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<SEC-DOCUMENT>0000891618-08-000203.txt : 20080402
<SEC-HEADER>0000891618-08-000203.hdr.sgml : 20080402
<ACCEPTANCE-DATETIME>20080402171930
ACCESSION NUMBER:		0000891618-08-000203
CONFORMED SUBMISSION TYPE:	8-K
PUBLIC DOCUMENT COUNT:		4
CONFORMED PERIOD OF REPORT:	20080327
ITEM INFORMATION:		Entry into a Material Definitive Agreement
ITEM INFORMATION:		Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant
ITEM INFORMATION:		Financial Statements and Exhibits
FILED AS OF DATE:		20080402
DATE AS OF CHANGE:		20080402

FILER:

	COMPANY DATA:	
		COMPANY CONFORMED NAME:			IRIDEX CORP
		CENTRAL INDEX KEY:			0001006045
		STANDARD INDUSTRIAL CLASSIFICATION:	ELECTROMEDICAL & ELECTROTHERAPEUTIC APPARATUS [3845]
		IRS NUMBER:				770210467
		STATE OF INCORPORATION:			DE
		FISCAL YEAR END:			1230

	FILING VALUES:
		FORM TYPE:		8-K
		SEC ACT:		1934 Act
		SEC FILE NUMBER:	000-27598
		FILM NUMBER:		08734585

	BUSINESS ADDRESS:	
		STREET 1:		1212 TERRA BELLA AVE
		CITY:			MOUNTAIN VIEW
		STATE:			CA
		ZIP:			94043
		BUSINESS PHONE:		6509404700

	MAIL ADDRESS:	
		STREET 1:		1212 TERRA BELLA AVENUE
		CITY:			MOUNTAIN VIEW
		STATE:			CA
		ZIP:			94043
</SEC-HEADER>
<DOCUMENT>
<TYPE>8-K
<SEQUENCE>1
<FILENAME>f39469e8vk.htm
<DESCRIPTION>FORM 8-K
<TEXT>
<HTML>
<HEAD>
<TITLE>e8vk</TITLE>
</HEAD>
<BODY bgcolor="#FFFFFF">
<!-- PAGEBREAK -->
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>
<DIV style="font-family: 'Times New Roman',Times,serif">


<DIV style="width: 100%; border-bottom: 2pt solid black; font-size: 1pt">&nbsp;</DIV>
<DIV style="width: 100%; border-bottom: 1pt solid black; font-size: 1pt">&nbsp;</DIV>


<DIV align="center" style="font-size: 14pt; margin-top: 12pt"><B>UNITED STATES<BR>
SECURITIES AND EXCHANGE COMMISSION</B>
</DIV>

<DIV align="center" style="font-size: 12pt"><B>Washington, DC 20549</B>
</DIV>

<DIV align="center"><DIV style="font-size: 3pt; margin-top: 16pt; width: 15%; border-top: 1px solid #000000">&nbsp;</DIV></DIV>

<DIV align="center" style="font-size: 18pt; margin-top: 12pt"><B>FORM 8-K</B>
</DIV>


<DIV align="center" style="font-size: 12pt; margin-top: 12pt"><B>CURRENT REPORT<BR>
Pursuant to Section&nbsp;13 or 15(d) of<BR>
The Securities Exchange Act of 1934</B>
</DIV>


<DIV align="center" style="font-size: 10pt; margin-top: 18pt">Date of Report (Date of earliest event reported)
</DIV>


<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>March&nbsp;27, 2008</B>
</DIV>

<DIV align="center"><DIV style="font-size: 3pt; margin-top: 16pt; width: 15%; border-top: 1px solid #000000">&nbsp;</DIV></DIV>

<DIV align="center" style="font-size: 24pt; margin-top: 12pt"><B>IRIDEX CORPORATION</B>
</DIV>


<DIV align="center" style="font-size: 10pt; margin-top: 0pt">(Exact name of registrant as specified in its charter)
</DIV>

<DIV style="margin-top: 12pt">
</DIV>

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="30%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="30%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="30%">&nbsp;</TD>
</TR>
<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom">
    <TD align="center" valign="top"><B>Delaware</B>
</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top"><B>0-27598</B>
</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top"><B>77-0210467</B></TD>
</TR>
<TR style="font-size: 1px">
    <TD align="center" valign="top" style="border-top: 1px solid #000000">&nbsp;
</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top" style="border-top: 1px solid #000000">&nbsp;
</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD align="center" valign="top">(State or other jurisdiction <BR>
of incorporation)
</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">(Commission File Number)
</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">(IRS Employer<BR>
Identification No.)</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>


<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>1212 Terra Bella Avenue<BR>
Mountain View, California 94043</B><BR>
(Address of principal executive offices, including zip code)
</DIV>


<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>(650)&nbsp;940-4700</B><BR>
(Registrant&#146;s telephone number, including area code)
</DIV>


<DIV align="center">
<DIV style="font-size: 3pt; margin-top: 24pt; width: 100%; border-top: 1px solid #000000">&nbsp;</DIV>
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 0pt">(Former name or former address, if changed since last report)
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt">Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the
filing obligation of the registrant under any of the following provisions (see General Instruction
A.2. below):
</DIV>

<DIV align="center">
<TABLE cellspacing="0" border="0" cellpadding="0" width="100%" style="font-size: 10pt">
<TR style="font-size: 6pt">
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="96%">&nbsp;</TD>
</TR>
<TR valign="top">
    <TD align="left"><FONT face="Wingdings">&#111;</FONT></TD>
    <TD>&nbsp;</TD>
    <TD>Written communications pursuant to Rule&nbsp;425 under the Securities Act (17 CFR 230.425)</TD>
</TR>
</TABLE>
</DIV>

<DIV align="center">
<TABLE cellspacing="0" border="0" cellpadding="0" width="100%" style="font-size: 10pt">
<TR style="font-size: 6pt">
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="96%">&nbsp;</TD>
</TR>
<TR valign="top">
    <TD align="left"><FONT face="Wingdings">&#111;</FONT></TD>
    <TD>&nbsp;</TD>
    <TD>Soliciting material pursuant to Rule&nbsp;14a-12 under the Exchange Act (17 CFR 240.14a-12)</TD>
</TR>
</TABLE>
</DIV>

<DIV align="center">
<TABLE cellspacing="0" border="0" cellpadding="0" width="100%" style="font-size: 10pt">
<TR style="font-size: 6pt">
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="96%">&nbsp;</TD>
</TR>
<TR valign="top">
    <TD align="left"><FONT face="Wingdings">&#111;</FONT></TD>
    <TD>&nbsp;</TD>
    <TD>Pre-commencement communications pursuant to Rule&nbsp;14d-2(b) under the Exchange Act (17 CFR
240.14d-2(b))</TD>
</TR>
</TABLE>
</DIV>

<DIV align="center">
<TABLE cellspacing="0" border="0" cellpadding="0" width="100%" style="font-size: 10pt">
<TR style="font-size: 6pt">
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="96%">&nbsp;</TD>
</TR>
<TR valign="top">
    <TD align="left"><FONT face="Wingdings">&#111;</FONT></TD>
    <TD>&nbsp;</TD>
    <TD>Pre-commencement communications pursuant to Rule&nbsp;13e-4(c) under the Exchange Act (17 CFR
240.13e-4(c))</TD>
</TR>
</TABLE>
</DIV>


<DIV style="width: 100%; border-bottom: 1pt solid black; margin-top: 10pt; font-size: 1pt">&nbsp;</DIV>
<DIV style="width: 100%; border-bottom: 2pt solid black; font-size: 1pt">&nbsp;</DIV>


<P align="center" style="font-size: 10pt"><!-- Folio --><!-- /Folio -->
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>

<DIV style="font-family: 'Times New Roman',Times,serif">

<!-- TOC -->
<A name="toc"><DIV align="CENTER" style="page-break-before:always"><U><B>TABLE OF CONTENTS</B></U></DIV></A>

<P><CENTER>
<TABLE border="0" width="90%" cellpadding="0" cellspacing="0">
<TR>
	<TD width="3%"></TD>
	<TD width="3%"></TD>
	<TD width="3%"></TD>
	<TD width="3%"></TD>
	<TD width="3%"></TD>
	<TD width="3%"></TD>
	<TD width="3%"></TD>
	<TD width="3%"></TD>
	<TD width="76%"></TD>
</TR>
<TR><TD colspan="9"><A HREF="#000">ITEM 1.01. ENTRY INTO A MATERIAL DEFINITIVE AGREEMENT</A></TD></TR>
<TR><TD colspan="9"><A HREF="#001">ITEM 2.03. CREATION OF A DIRECT FINANCIAL OBLIGATION OR AN OBLIGATION UNDER AN OFF-BALANCE SHEET
ARRANGEMENT OF A REGISTRANT</A></TD></TR>
<TR><TD colspan="9"><A HREF="#002">ITEM 9.01. FINANCIAL STATEMENTS AND EXHIBITS</A></TD></TR>
<TR><TD colspan="9"><A HREF="#003">SIGNATURES</A></TD></TR>
<TR><TD colspan="9"><A HREF="f39469exv10w1.htm">EXHIBIT 10.1</A></TD></TR>
<TR><TD colspan="9"><A HREF="f39469exv10w2.htm">EXHIBIT 10.2</A></TD></TR>
<TR><TD colspan="9"><A HREF="f39469exv10w3.htm">EXHIBIT 10.3</A></TD></TR>
</TABLE>
</CENTER>
<!-- /TOC -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>


<!-- link1 "ITEM 1.01. ENTRY INTO A MATERIAL DEFINITIVE AGREEMENT" -->
<DIV align="left"><A NAME="000"></A></DIV>


<DIV align="left" style="margin-top: 12pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; background: transparent; color: #000000">
<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD></TD>
</TR>
<TR valign="top">
    <TD nowrap align="left"><B>Item&nbsp;1.01</B></TD>
    <TD>&nbsp;</TD>
    <TD><B>Entry into a Material Definitive Agreement</B></TD>
</TR>
</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;On March&nbsp;27, 2008, IRIDEX Corporation (the &#147;Company&#148;) entered into (i)&nbsp;a Credit and Security
Agreement (the &#147;Domestic Credit Agreement&#148;) with Wells Fargo Bank, National Association, acting
through its Wells Fargo Business Credit operating division (&#147;Lender&#148;), (ii)&nbsp;a Credit and Security
Agreement (Ex-Im Subfacility) (the &#147;Ex-Im Agreement&#148;) with the Lender, and (iii)&nbsp;a Borrower
Agreement (the &#147;Borrower Agreement&#148; and together with the Domestic Credit Agreement and the Ex-Im
Agreement, the &#147;Credit Agreement&#148;) in favor of Lender and Export-Import Bank of the United States
(&#147;Ex-Im Bank&#148;), each dated March&nbsp;27, 2008. The Domestic Credit Agreement provides for an
asset-based revolving line of credit of up to $8&nbsp;million (the &#147;Revolving Loans&#148;). Of the Revolving
Loans, up to $5&nbsp;million of principal amount (the &#147;Ex-Im Sublimit&#148;) will be guaranteed by Ex-Im Bank
to the extent such Revolving Loans are made under the Ex-Im Agreement.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Under
the Domestic Credit Agreement, the Company has the right to borrow, partially or wholly,
prepay and reborrow Revolving Loans and request the issuance of letters of credit (&#147;Letters of
Credit&#148;) in the aggregate amount equal to (i)&nbsp;80% of eligible domestic accounts, plus (ii)&nbsp;the
lesser of (a)&nbsp;20% of eligible domestic inventory or (b) $500,000, minus (iii)&nbsp;10% of the aggregate
debt outstanding under the Ex-Im Agreement, minus (iv)&nbsp;any borrowing base reserve, minus (v)&nbsp;any
advances made under the Ex-Im Agreement, minus (vi)&nbsp;any additional indebtedness owed to Lender
(such amount, the &#147;Borrowing Base&#148;). All outstanding amounts under the Revolving Loans, including
principal, interest, fees, costs and charges, are payable in full on March&nbsp;27, 2011. If at any
time the amount outstanding under the Revolving Loans exceeds the Borrowing Base, the Company will
be required to pay the difference between such outstanding amount and the Borrowing Base.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Under
the Ex-Im Sublimit, the Company may borrow, partially or wholly, prepay and reborrow loans
(&#147;Ex-Im Revolving Loans&#148;). The total amount available under the Ex-Im Sublimit is an aggregate
amount equal to (i)&nbsp;90% of eligible foreign accounts, plus (ii)&nbsp;75% of eligible foreign inventory,
minus (iii)&nbsp;any borrowing base reserve, minus (iv)&nbsp;any additional indebtedness owed to Lender (such
amount, the &#147;Ex-Im Borrowing Base&#148;). If the aggregate amount outstanding under the Ex-Im Sublimit
exceeds the Ex-Im Borrowing Base, the Company will be required to pay the difference between such
outstanding amount and the Ex-Im Borrowing Base. The Ex-Im Agreement is subject to an annual
facility fee in the amount of $75,000.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Company&#146;s obligations under the Revolving Loans (including the Ex-Im Sublimit) are secured by a
lien on substantially all of the Company&#146;s assets. Interest on the Revolving Loans (including the
Ex-Im Sublimit) is either (i)&nbsp;a floating rate equal to the prime rate as most recently announced by
the Lender at its principal office plus 0.75% or (ii)&nbsp;a fixed rate of the London Inter-Bank Offered
Rate (&#147;LIBOR&#148;) plus 3.50%. Revolving Loans bearing interest with reference to LIBOR are limited to
$6,000,000. Each interest rate is subject to a one-time 0.25% reduction if the Company&#146;s earnings
before taxes, depreciation and amortization for any fiscal year ending on or after December&nbsp;31,
2008 is greater than $1,500,000, as well as certain other adjustments under certain circumstances
including late payment or the occurrence of an event of default. The Company is required to pay at
least $20,000 of interest per month under the Credit Agreement.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Each of the Domestic Credit Agreement and the Ex-Im Agreement contains certain customary covenants,
including financial covenants which require the Company to maintain a certain level of net income
(loss)&nbsp;and to meet certain debt service coverage requirements. Other covenants include, but are
not limited to, covenants limiting or restricting the Company&#146;s ability to incur indebtedness,
incur liens, enter into mergers or consolidations, dispose of assets, make investments, pay
dividends, enter into transactions with affiliates, or prepay certain indebtedness.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Each of the Domestic Credit Agreement and the Ex-Im Agreement contains customary events of default
including, but not limited to, payment defaults, covenant defaults, cross-defaults to other
indebtedness, material judgment defaults, inaccuracy of representations and warranties, bankruptcy
and insolvency events, payment on subordinated debt, defects in Lender&#146;s security interest, change
in control events, material adverse change and certain officers being convicted of felonies. The
occurrence of an event of default will increase the interest rate by three percentage points over
the rate otherwise applicable and could result in the acceleration of all obligations of the
Company to Lender with respect to indebtedness, whether under the Credit Agreement or otherwise.
</DIV>

<P align="center" style="font-size: 10pt"><!-- Folio --><!-- /Folio -->
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The foregoing description of the Domestic Credit Agreement, the Ex-Im Agreement and the Borrower
Agreement does not purport to be complete and is qualified in its entirety by the terms and
conditions of the Domestic Credit Agreement, the Ex-Im Agreement and the Borrower Agreement
attached as Exhibits 10.1, 10.2 and 10.3, respectively, to this Current Report on Form 8-K, which
exhibits are incorporated herein by reference.
</DIV>


<!-- link1 "ITEM 2.03. CREATION OF A DIRECT FINANCIAL OBLIGATION OR AN OBLIGATION UNDER AN OFF-BALANCE SHEET
ARRANGEMENT OF A REGISTRANT" -->
<DIV align="left"><A NAME="001"></A></DIV>
<DIV align="left"><A NAME="000"></A></DIV>

<DIV align="left" style="margin-top: 12pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; background: transparent; color: #000000">
<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD></TD>
</TR>
<TR valign="top">
    <TD nowrap align="left"><B>Item&nbsp;2.03.</B></TD>
    <TD>&nbsp;</TD>
    <TD><B>Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet
Arrangement of a Registrant.</B></TD>
</TR>
</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The information set forth under Item&nbsp;1.01, &#147;Entry into a Material Definitive Agreement,&#148; is
incorporated herein by reference.
</DIV>

<!-- link1 "ITEM 9.01. FINANCIAL STATEMENTS AND EXHIBITS" -->
<DIV align="left"><A NAME="002"></A></DIV>
<DIV align="left"><A NAME="000"></A></DIV>

<DIV align="left" style="margin-top: 12pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; background: transparent; color: #000000">
<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD></TD>
</TR>
<TR valign="top">
    <TD nowrap align="left"><B>Item&nbsp;9.01.</B></TD>
    <TD>&nbsp;</TD>
    <TD><B>Financial Statements and Exhibits.</B></TD>
</TR>
</TABLE>
</DIV>
<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="10%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="85%">&nbsp;</TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom">

<TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">(d)
Exhibits
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top"></TD>
</TR>
<TR style="font-size: 12pt"><TD>&nbsp;</TD></TR>


<TR valign="bottom">

<TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Exhibit&nbsp;10.1
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Credit and Security Agreement by and between IRIDEX
Corporation and Wells Fargo Bank, National Association,
acting through its Wells Fargo Business Credit operating
division, dated March&nbsp;27, 2008</TD>
</TR>
<TR style="font-size: 12pt"><TD>&nbsp;</TD></TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Exhibit&nbsp;10.2
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Credit and Security Agreement (Ex-Im Subfacility) by and
between IRIDEX Corporation and Wells Fargo Bank, National
Association, acting through its Wells Fargo Business Credit
operating division, dated March&nbsp;27, 2008</TD>
</TR>
<TR style="font-size: 12pt"><TD>&nbsp;</TD></TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Exhibit&nbsp;10.3
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Borrower Agreement by IRIDEX Corporation in favor of
Export-Import Bank of the United States and Wells Fargo Bank,
National Association, acting through its Wells Fargo Business
Credit operating division, dated March&nbsp;27, 2008</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>


<P align="center" style="font-size: 10pt"><!-- Folio --><!-- /Folio -->
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">


<!-- link1 "SIGNATURES" -->
<DIV align="left"><A NAME="003"></A></DIV>
<DIV align="left"><A NAME="000"></A></DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>SIGNATURES</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;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 hereunto duly authorized.
</DIV>

<TABLE width="100%" border="0" cellspacing="0" cellpadding="0" style="font-size: 10pt">
<TR>
    <TD width="48%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="35%">&nbsp;</TD>
    <TD width="15%">&nbsp;</TD>
</TR>
<TR>
    <TD valign="top" align="left">&nbsp;</TD>
    <TD colspan="3" align="left"><B>IRIDEX CORPORATION</B><BR><BR>
&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR><TR>
    <TD align="left">&nbsp;</TD>
    <TD valign="top">By:&nbsp;&nbsp;</TD>
    <TD colspan="2" style="border-bottom: 1px solid #000000" align="left">/s/ Theodore A. Boutacoff
&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR><TR>
    <TD align="left">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD valign="top">Name:&nbsp;&nbsp;</TD>
    <TD align="left">Theodore A. Boutacoff&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR><TR>
    <TD align="left">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD valign="top">Title:&nbsp;&nbsp;</TD>
    <TD align="left">President and Chief Executive Officer&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>
</TABLE>
<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Date: April&nbsp;2, 2008
</DIV>



<P align="center" style="font-size: 10pt"><!-- Folio --><!-- /Folio -->
</DIV>



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</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10.1
<SEQUENCE>2
<FILENAME>f39469exv10w1.htm
<DESCRIPTION>EXHIBIT 10.1
<TEXT>
<HTML>
<HEAD>
<TITLE>exv10w1</TITLE>
</HEAD>
<BODY bgcolor="#FFFFFF">
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<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>
<DIV style="font-family: Helvetica,Arial,sans-serif">


<DIV align="right" style="font-size: 10pt; margin-top: 12pt"><B>Exhibit&nbsp;10.1</B>
</DIV>


<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>WELLS FARGO BUSINESS CREDIT<BR>
CREDIT AND SECURITY AGREEMENT</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">THIS CREDIT AND SECURITY AGREEMENT (THE &#147;AGREEMENT&#148;) IS DATED MARCH 27, 2008, AND IS ENTERED INTO
BETWEEN IRIDEX CORPORATION, A DELAWARE CORPORATION (&#147;COMPANY&#148;), AND WELLS FARGO BANK, NATIONAL
ASSOCIATION (AS MORE FULLY DEFINED IN EXHIBIT A, &#147;WELLS FARGO&#148;), ACTING THROUGH ITS WELLS FARGO
BUSINESS CREDIT OPERATING DIVISION.
</DIV>


<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>RECITALS</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Company has asked Wells Fargo to provide it with an $8,000,000 revolving line of credit (the &#147;Line
of Credit&#148;) for working capital purposes and to facilitate the issuance of letters of credit.
Wells Fargo is agreeable to meeting Company&#146;s request, provided that Company agrees to the terms
and conditions of this Agreement.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">For purposes of this Agreement, capitalized terms not otherwise defined in the Agreement shall have
the meaning given them in Exhibit&nbsp;A.
</DIV>


<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left"><B>1.</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD><B>AMOUNT AND TERMS OF THE LINE OF CREDIT</B></TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left"><B>1.1</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD><B>Line of Credit; Limitations on Borrowings; Termination Date; Use of Proceeds</B>.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left">(a)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD><U>Line of Credit and Limitations on Borrowing</U>. Wells Fargo shall make Advances to
Company under the Line of Credit that (i)&nbsp;together with the L/C Amount and the aggregate
outstanding amount of Indebtedness and other obligations owing under or in connection with the
Ex-Im Credit Agreement, shall not at any time exceed in the aggregate $8,000,000 (the &#147;Maximum
Line Amount&#148;), and (ii)&nbsp;together with the L/C Amount, exceed in the aggregate the Borrowing
Base limitations described in Section&nbsp;1.2. Within these limits, Company may periodically
borrow, prepay in whole or in part, and reborrow. Wells Fargo has no obligation to make an
Advance during a Default Period or at any time Wells Fargo believes that an Advance would
result in an Event of Default.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left">(b)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD><U>Maturity and Termination Dates</U>. Company may request Advances from the date that the
conditions set forth in Section&nbsp;3 are satisfied until the earlier of: (i)&nbsp;March&nbsp;27, 2011 (the
&#147;Maturity Date&#148;), (ii)&nbsp;the date Company terminates the Line of Credit, or (iii)&nbsp;the date Wells
Fargo terminates the Line of Credit following an Event of Default (the earliest of such dates,
the &#147;Termination Date&#148;).</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left">(c)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD><U>Use of Line of Credit Proceeds</U>. Company shall use the proceeds of each Advance and
each Letter of Credit for ordinary working capital purposes.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left">(d)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD><U>Revolving Note</U>. Company&#146;s obligation to repay Line of Credit Advances, regardless of
how initiated under Section&nbsp;1.3, shall be evidenced by a revolving promissory note (as
renewed, amended or replaced from time to time, the &#147;Revolving Note&#148;).</TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">


</TABLE>
</DIV>
<P align="center" style="font-size: 10pt"><!-- Folio -->&nbsp;<!-- /Folio -->
</DIV>

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<DIV style="font-family: Helvetica,Arial,sans-serif">


<DIV style="margin-top: 6pt"><TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">



</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left"><B>1.2</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD><B>Borrowing Base; Mandatory Prepayment</B>.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left">(a)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD><U>Borrowing Base</U>. The borrowing base (the &#147;Borrowing Base&#148;) is an amount equal to:</TD>
</TR>

</TABLE>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 4%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) 80% or such lesser percentage of Eligible Accounts as Wells Fargo in its sole
discretion may deem appropriate; provided that, as of any date of determination, this rate
shall be reduced one (1)&nbsp;percent for each percentage point by which Dilution is in excess
of ten percent (10%), <U>plus</U>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 4%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) 20% or such lesser percentage of Eligible Inventory as Wells Fargo in its sole
discretion may deem appropriate, or $500,000, whichever is less, <U>less</U>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 4%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii) a reserve equal to 10% of the aggregate outstanding amount of Indebtedness and
other obligations owing under or in connection with the Ex-Im Credit Agreement from time to
time, <U>less</U>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 4%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iv) the Borrowing Base Reserve, <U>less</U>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 4%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(v) without duplication of <U>clause (iii)</U> of this <U>Section&nbsp;1.2(a)</U>,
Indebtedness that Company owes Wells Fargo that has not been advanced on the Revolving Note
(other than Indebtedness constituting &#147;Advances&#148; under the Ex-Im Credit Agreement),
<U>less</U>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 4%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(vi) Indebtedness that Wells Fargo in its sole discretion finds on the date of
determination to be equal to Wells Fargo&#146;s net credit exposure with respect to any swap,
derivative, foreign exchange, hedge, deposit, treasury management or similar product or
transaction extended to Company by Wells Fargo that is not otherwise described in Section&nbsp;1
and any Indebtedness owed by Company to Wells Fargo Merchant Services, L.L.C.
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left">(b)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD><U>MANDATORY PREPAYMENT; OVERADVANCES</U>. If unreimbursed Line of Credit Advances
evidenced by the Revolving Note plus the L/C Amount exceed the Borrowing Base, or if the sum
of the unreimbursed Line of Credit Advances evidenced by the Revolving Note, the L/C Amount,
and the aggregate outstanding amount of Indebtedness and other obligations owing under or in
connection with the Ex-Im Credit Agreement exceeds the Maximum Line Amount at any time, then
Company shall immediately prepay the Revolving Note in an amount sufficient to eliminate the
excess, and if payment in full of the Revolving Note is insufficient to eliminate this excess
and the L/C Amount continues to exceed the Borrowing Base, then Company shall deliver cash to
Wells Fargo in an amount equal to the remaining excess for deposit to the Special Account,
unless in each case, Wells Fargo has delivered to Company an Authenticated Record consenting
to the Overadvance <U>prior</U> to its occurrence, in which event the Overadvance shall be
temporarily permitted on such terms and conditions as Wells Fargo in its sole discretion may
deem appropriate, including the payment of additional fees or interest, or both.</TD>
</TR>

</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B><I>Credit and Security Agreement</I></B><br>
<B><I>WFBC/Iridex (domestic facility)</I></B>
</DIV>


<P align="center" style="font-size: 10pt"><!-- Folio -->2<!-- /Folio -->
</DIV>

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<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="font-family: Helvetica,Arial,sans-serif">

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left"><B>1.3</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD><B>Procedures for Line of Credit Advances</B>.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left">(a)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD><U>Advances to Operating Account</U>. Advances shall be credited to Company&#146;s demand
deposit account maintained with Wells Fargo (the &#147;Operating Account&#148;), unless the parties
agree in a Record Authenticated by both of them to disburse to another account.</TD>
</TR>

</TABLE>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 4%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) <U>Advances upon Company&#146;s Request</U>. Line of Credit Advances may be funded
upon Company&#146;s request. No request will be deemed received until Wells Fargo acknowledges
receipt, and Company, if requested by Wells Fargo, confirms the request in an Authenticated
Record. Company shall repay all Advances, even if the Person requesting the Advance on
behalf of Company lacked authorization.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 6%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(A) <U>Floating Rate Advances</U>. If Company wants a Floating Rate Advance,
it shall make the request no later than 9:30 a.m. Pasadena, California Time on the
Business Day on which it wants the Floating Rate Advance to be funded, which
request shall specify the principal Advance amount being requested.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 6%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(B) <U>LIBOR Advances</U>. If Company wants a LIBOR Advance, it shall make
the request no later than 9:30 a.m. Pasadena, California Time three (3)&nbsp;Business
Days preceding the Business Day on which it wants the LIBOR Advance to be funded,
which request shall specify both the principal Advance amount and Interest Period
being requested. No more than four (4)&nbsp;separate LIBOR Advance Interest Periods may
be outstanding at any time under this Agreement and the Ex-Im Credit Agreement, on
a combined basis. Each LIBOR Advance shall be in multiples of $1,000,000 and in
the minimum amount of at least $1,000,000. LIBOR Advances are not available for
Advances made through the Loan Manager Service, and shall not be available during
Default Periods. Notwithstanding anything to the contrary in this Agreement, the
aggregate outstanding amount of LIBOR Advances under this Agreement and the Ex-Im
Credit Agreement shall not exceed $6,000,000 (the &#147;LIBOR Limitation Amount&#148;).
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 4%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) <U>Advances through Loan Manager</U>. If Wells Fargo has separately agreed that
Company may use the Wells Fargo Loan Manager service (&#147;Loan Manager&#148;), Line of Credit
Advances will be initiated by Wells Fargo and credited to the Operating Account as Floating
Rate Advances as of the end of each Business Day in an amount sufficient to maintain an
agreed upon ledger balance in the Operating Account, subject only to Line of Credit
availability as provided in Section&nbsp;1.1(a). If Wells Fargo terminates Company&#146;s access to
Loan Manager, Company may continue to request Line of Credit Advances as provided in
Section&nbsp;1.3(a)(i). Wells Fargo shall have no obligation to make an Advance through Loan
Manager during a Default Period, or in an amount in excess of Line of Credit availability,
and may terminate Loan Manager at any time in its sole discretion.
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left">(b)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD><U>Protective Advances; Advances to Pay Indebtedness Due</U>. Wells Fargo may initiate a
Floating Rate Advance on the Line of Credit in its sole discretion for</TD>
</TR>

</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B><I>Credit and Security Agreement</I></B><br>
<B><I>WFBC/Iridex (domestic facility)</I></B>
</DIV>


<P align="center" style="font-size: 10pt"><!-- Folio -->3<!-- /Folio -->
</DIV>

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<DIV style="font-family: Helvetica,Arial,sans-serif">




<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>any reason at any time, without
Company&#146;s compliance with any of the
conditions of this Agreement, and (i)
disburse the proceeds directly to third
Persons in order to protect Wells
Fargo&#146;s interest in Collateral or to
perform any of Company&#146;s obligations
under this Agreement, or (ii)&nbsp;apply the
proceeds to the amount of any
Indebtedness then due and payable to
Wells Fargo.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left"><B>1.4</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD><B>LIBOR Advances</B>.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left">(a)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD><U>Funding Line of Credit Advances as LIBOR Advances for Fixed Interest Periods</U>.
Subject to the LIBOR Limitation Amount, Company may fund a Line of Credit Advance as a LIBOR
Advance for one, three, or six month periods (each period an &#147;Interest Period&#148;, as more fully
defined in Exhibit&nbsp;A).</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left">(b)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD><U>Procedure for Converting Floating Rate Advances to LIBOR Advances</U>. Subject to the
LIBOR Limitation Amount, Company may request that all or any part of an outstanding Floating
Rate Advance be converted to a LIBOR Advance, provided that no Default Period is in effect,
and that Wells Fargo receives the request no later than 9:30 a.m. Pasadena, California Time
three (3)&nbsp;Business Days preceding the Business Day on which Company wishes the conversion to
become effective. Each request shall (i)&nbsp;specify the principal amount of the Floating Rate
Advance to be converted, (ii)&nbsp;the Business Day of conversion, and (iii)&nbsp;the Interest Period
desired. The request shall be confirmed in an Authenticated Record if requested by Wells
Fargo. Each conversion to a LIBOR Advance shall be in multiples of $1,000,000 and in the
minimum amount of at least $1,000,000.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left">(c)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD><U>Expiring LIBOR Advance Interest Periods</U>. Unless Company requests a new LIBOR
Advance, or prepays an outstanding LIBOR Advance at the expiration of an Interest Period,
Wells Fargo shall convert each LIBOR Advance to a Floating Rate Advance on the last day of the
expiring Interest Period. If no Default Period is in effect, Company may request that all or
part of any expiring LIBOR Advance be renewed as a new LIBOR Advance, provided that Wells
Fargo receives the request no later than 9:30 a.m. Pasadena, California Time three (3)
Business Days preceding the Business Day that constitutes the first day of the new Interest
Period. Each request shall specify the principal amount of the expiring LIBOR Advance to be
continued and Interest Period desired, and shall be confirmed in an Authenticated Record if
requested by Wells Fargo. Each renewal of a LIBOR Advance shall be in multiples of $1,000,000
and in the minimum amount of at least $1,000,000.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left">(d)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD><U>Quotation of LIBOR Advance Interest Rates</U>. Wells Fargo shall, with respect to any
request for a new or renewal LIBOR Advance, or the conversion of a Floating Rate Advance to a
LIBOR Advance, provide Company with a LIBOR quote for each Interest Period identified by
Company on the Business Day on which the request was made, if the request is received by Wells
Fargo no later than 9:30 a.m. Pasadena, California Time three (3)&nbsp;Business Days preceding the
Business Day on which Company has requested that the LIBOR Advance be made effective. If
Company does not immediately accept a LIBOR quote, the quoted rate shall expire and any
subsequent request for a LIBOR quote shall be subject to redetermination by Wells Fargo.</TD>
</TR>

</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B><I>Credit and Security Agreement</I></B><br>
<B><I>WFBC/Iridex (domestic facility)</I></B>
</DIV>


<P align="center" style="font-size: 10pt"><!-- Folio -->4<!-- /Folio -->
</DIV>

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<DIV style="font-family: Helvetica,Arial,sans-serif">

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left">(e)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD><U>Taxes and Regulatory Costs</U>. Company shall also pay Wells Fargo with respect to any
LIBOR Advance all (i)&nbsp;withholdings, interest equalization taxes, stamp taxes or other taxes
(except income and franchise taxes) imposed by any domestic or foreign governmental authority
that are related to LIBOR, and (ii)&nbsp;future, supplemental, emergency or other changes in the
LIBOR Reserve Percentage, the assessment rates imposed by the Federal Deposit Insurance
Corporation, or similar costs imposed by any domestic or foreign governmental authority or
resulting from compliance by Wells Fargo with any request or directive (whether or not having
the force of law) from any central bank or other governmental authority that are related to
LIBOR but not otherwise included in the calculation of LIBOR. In determining which of these
amounts are attributable to an existing LIBOR Advance, any reasonable allocation made by Wells
Fargo among its operations shall be deemed conclusive and binding.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left"><B>1.5</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD><B>Collection of Accounts and Application to Revolving Note</B>.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left">(a)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD><U>The Collection Account</U>. Company has granted a security interest to Wells Fargo in
the Collateral, including all Accounts. Except as otherwise agreed by both parties in an
Authenticated Record, all Proceeds of Accounts and other Collateral, upon receipt or
collection, shall be deposited each Business Day into the Collection Account. Funds so
deposited (&#147;Account Funds&#148;) may only be withdrawn from the Collection Account by Wells Fargo
for application in accordance with Section&nbsp;1.5(c) or as otherwise provided in the Loan
Documents or by applicable law.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left">(b)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD><U>Payment of Accounts by Company&#146;s Account Debtors</U>. Company shall instruct all account
debtors to make payments either directly to the Lockbox for deposit by Wells Fargo directly to
the Collection Account, or instruct them to deliver such payments to Wells Fargo by wire
transfer, ACH, or other means as Wells Fargo may direct for deposit to the Collection Account
or for direct application to the Line of Credit. If Company receives a payment or the Proceeds
of Collateral directly, Company will promptly deposit the payment or Proceeds into the
Collection Account. Until deposited, it will hold all such payments and Proceeds in trust for
Wells Fargo without commingling with other funds or property. All deposits held in the
Collection Account shall constitute Proceeds of Collateral and shall not constitute the
payment of Indebtedness.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left">(c)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD><U>Application of Payments to Revolving Note</U>. Wells Fargo will withdraw Account Funds
deposited to the Collection Account and pay down borrowings on the Line of Credit by applying
them to the Revolving Note on the first Business Day following the Business Day of deposit to
the Collection Account, or, if payments are received by Wells Fargo that are not first
deposited to the Collection Account pursuant to any treasury management service provided to
Company by Wells Fargo, such payments shall be applied to the Revolving Note as provided in
the Master Agreement for Treasury Management Services and the relevant service description.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left"><B>1.6</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD><B>Interest and Interest Related Matters</B>.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left">(a)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD><U>Interest Rates Applicable to Line of Credit</U>. Except as otherwise provided in this
Agreement, the unpaid principal amount of each Line of Credit Advance</TD>
</TR>

</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B><I>Credit and Security Agreement</I></B><br>
<B><I>WFBC/Iridex (domestic facility)</I></B>
</DIV>


<P align="center" style="font-size: 10pt"><!-- Folio -->5<!-- /Folio -->
</DIV>

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<DIV style="font-family: Helvetica,Arial,sans-serif">

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>evidenced by the Revolving Note shall accrue interest at an annual interest rate calculated
as follows:</TD>
</TR>

</TABLE>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 8%"><U><B>Floating Rate</B></U><B>:</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 8%">Line of Credit Advances = Prime Rate plus the applicable Margin, which interest
rate shall change whenever the Prime Rate changes (the &#147;Floating Rate&#148;); or
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 8%"><U><B>LIBOR Advance Rate for One-, Three-, or Six-Month Interest Periods</B></U><B>:</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 8%">Line of Credit Advances = LIBOR plus the applicable Margin (the &#147;LIBOR Advance
Rate&#148;)
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Multiple Advances under the Line of Credit may simultaneously accrue interest at both the
Floating Rate and at the LIBOR Advance Rate, subject to the limitations of Section
1.3(a)(i).</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>The Margins through and including the adjustment occurring as specified below shall be
0.75% per annum for Floating Rate Advances, and 3.50% per annum for LIBOR Advances. The
Margins shall be reduced by 0.25% per annum on a one-time basis if the Company&#146;s Earnings
Before Taxes, Depreciation, and Amortization for any fiscal year ending on or after
December&nbsp;31, 2008, is greater than $1,500,000.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>The Margin reduction provided for in the immediately preceding paragraph shall become
effective on the first calendar day of the first calendar month following the month of
receipt by Wells Fargo of fiscal year end financial statements that have been audited by
independent certified public accountants acceptable to Wells Fargo.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>If amended or restated financial statements would change previously calculated Margins, or
if Wells Fargo determines that any financial statements have materially misstated Company&#146;s
financial condition, then Wells Fargo may, using the most accurate information available to
it (it being agreed that if Company files amended and restated financial statements with
the U.S. Securities and Exchange Commission that modify financial statements previously
submitted to Wells Fargo, such amended and restated financial statements shall be deemed to
be the most accurate information available to Wells Fargo), recalculate the financial test
or tests governing the Margins and retroactively reduce or increase the Margins from the
date of receipt of such amended or restated financial statements and charge Company
additional interest, which may be imposed on them from the beginning of the appropriate
month to which the restated statements or recalculated financial tests relate, as Wells
Fargo in its sole discretion deems appropriate.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left">(b)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD><U>Minimum Interest Charge</U>. Notwithstanding the other terms of Section&nbsp;1.6 to the
contrary, and except as limited by the usury savings provision of Section&nbsp;1.6(e), Company
shall pay Wells Fargo at least $20,000 of interest each calendar month under this Agreement
and the Ex-Im Credit Agreement combined (the</TD>
</TR>

</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B><I>Credit and Security Agreement</I></B><br>
<B><I>WFBC/Iridex (domestic facility)</I></B>
</DIV>


<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">


</TABLE>
</DIV>
<P align="center" style="font-size: 10pt"><!-- Folio -->6<!-- /Folio -->
</DIV>

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<DIV style="font-family: Helvetica,Arial,sans-serif">


<DIV style="margin-top: 6pt"><TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">



</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>&#147;Minimum Interest Charge&#148;) during the term of this Agreement, and Company shall pay any
deficiency between the Minimum Interest Charge and the aggregate amount of interest
otherwise payable under this Agreement and the Ex-Im Credit Agreement on the first day of
each month and on the Termination Date. When calculating this deficiency, the Default Rate
set forth in Section&nbsp;1.6(c), if applicable, shall be disregarded.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left">(c)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD><U>Default Interest Rate</U>. Commencing on the day an Event of Default occurs, through and
including the date identified by Wells Fargo in a Record as the date that the Event of Default
has been cured or waived (each such period a &#147;Default Period&#148;), or during a time period
specified in Section&nbsp;1.9, or at any time following the Termination Date, in Wells Fargo&#146;s sole
discretion and without waiving any of its other rights or remedies, the principal amount of
the Revolving Note shall bear interest at a rate that is three percent (3.0%) above the
contractual rate set forth in Section&nbsp;1.6(a) (the &#147;Default Rate&#148;), or any lesser rate that
Wells Fargo may deem appropriate, starting on the first day of the month in which the Default
Period begins through the last day of that Default Period, or any shorter time period to which
Wells Fargo may agree in an Authenticated Record.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left">(d)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD><U>Interest Accrual on Payments Applied to Revolving Note</U>. Payments received by Wells
Fargo shall be applied to the Revolving Note as provided in Section&nbsp;1.4(c), but the principal
amount paid down shall continue to accrue interest through the end of the first Business Day
following the Business Day that the payment was applied to the Revolving Note.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left">(e)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD><U>Usury</U>. No interest rate shall be effective which would result in a rate greater than
the highest rate permitted by law. Payments in the nature of interest and other charges made
under any Loan Documents that are later determined to be in excess of the limits imposed by
applicable usury law will be deemed to be a payment of principal, and the Indebtedness shall
be reduced by that amount so that such payments will not be deemed usurious.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left"><B>1.7</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD><B>Fees</B>.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left">(a)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD><U>Origination Fee</U>. &#091;INTENTIONALLY OMITTED&#093;.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left">(b)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD><U>Unused Line Fee</U>. Company shall pay Wells Fargo an unused line fee of one-quarter of
one percent (0.25%) per annum of the daily average of the Maximum Line Amount reduced by
outstanding Advances, the L/C Amount, and outstanding &#147;Advances&#148; under the Ex-Im Credit
Agreement (the &#147;Unused Amount&#148;), from the date of this Agreement to and including the
Termination Date, which unused line fee shall be payable monthly in arrears on the first day
of each month and on the Termination Date; provided that for purposes of calculating the
Unused Amount for each month there shall be deemed outstanding at least the minimum amount of
Advances that would accrue interest equal to the Minimum Interest Charge for such month.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left">(c)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD><U>Facility Fee</U>. &#091;INTENTIONALLY OMITTED&#093;.</TD>
</TR>

</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B><I>Credit and Security Agreement</I></B><br>
<B><I>WFBC/Iridex (domestic facility)</I></B>
</DIV>


<P align="center" style="font-size: 10pt"><!-- Folio -->7<!-- /Folio -->
</DIV>

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<DIV style="font-family: Helvetica,Arial,sans-serif">

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left">(d)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD><U>Collateral Exam Fees</U>. Company shall pay Wells Fargo fees in connection with any
collateral exams, audits or inspections conducted by or on behalf of Wells Fargo at the
current rates established from time to time by Wells Fargo as its collateral exam fees (which
fees are currently $105 per hour per collateral examiner), together with all actual
out-of-pocket costs and expenses incurred in conducting any collateral examination or
inspection.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left">(e)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD><U>Collateral Monitoring Fees</U>. Company shall pay Wells Fargo a fee at the rates
established from time to time by Wells Fargo (or any other Person providing such services to
the Wells Fargo, including, but not limited to, Collateral Services, Inc.) as its Collateral
monitoring fees (which fees currently consist of a monthly fee of $250), due and payable
monthly in advance on the first day of the month.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left">(f)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD><U>Line of Credit Termination and/or Reduction Fees</U>. If (i)&nbsp;Wells Fargo terminates the
Line of Credit during a Default Period, or if (ii)&nbsp;Company terminates the Line of Credit on a
date prior to the Maturity Date, or if (iii)&nbsp;Company and Wells Fargo agree to reduce the
Maximum Line Amount, then Company shall pay Wells Fargo as liquidated damages a termination or
reduction fee in an amount equal to a percentage of the Maximum Line Amount (or the reduction
of the Maximum Line Amount, as the case may be) calculated as follows: (A)&nbsp;three percent
(3.0%) if the termination occurs on or before the first anniversary of the first Line of
Credit Advance; (B)&nbsp;one percent (1.0%) if the termination or reduction occurs after the first
anniversary of the first Line of Credit Advance, but on or before the second anniversary of
the first Line of Credit Advance; and (C)&nbsp;zero percent (-0-%) if the termination or reduction
occurs after the second anniversary of the first Line of Credit Advance.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left">(g)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD><U>Overadvance Fees</U>. Company shall pay a $500 Overadvance fee for each day that an
Overadvance exists which was not agreed to by Wells Fargo in an Authenticated Record prior to
its occurrence; provided that Wells Fargo&#146;s acceptance of the payment of such fees shall not
constitute either consent to the Overadvance or waiver of the resulting Event of Default.
Company shall pay additional Overadvance fees and interest in such amounts and on such terms
as Wells Fargo in its sole discretion may consider appropriate for any Overadvance to which
Wells Fargo has specifically consented in an Authenticated Record prior to its occurrence.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left">(h)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD><U>Treasury Management Fees</U>. Company will pay service fees to Wells Fargo for treasury
management services provided pursuant to the Master Agreement for Treasury Management Services
or any other agreement entered into by the parties, in the amount prescribed in Wells Fargo&#146;s
current service fee schedule.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left">(i)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD><U>Letter of Credit Fees</U>. Company shall pay a fee with respect to each Letter of Credit
issued by Wells Fargo of one and one-half percent (1.5%) of the aggregate undrawn amount of
the Letter of Credit (the &#147;Aggregate Face Amount&#148;) accruing daily from and including the date
the Letter of Credit is issued until the date that it either expires or is returned, which
shall be payable monthly in arrears on the first day of each month and on the date that the
Letter of Credit either expires or is returned; and following an Event of Default, this fee
shall increase to four and one-half percent (4.5%) of the Aggregate Face</TD>
</TR>

</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B><I>Credit and Security Agreement</I></B><br>
<B><I>WFBC/Iridex (domestic facility)</I></B>
</DIV>


<P align="center" style="font-size: 10pt"><!-- Folio -->8<!-- /Folio -->
</DIV>

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<DIV style="font-family: Helvetica,Arial,sans-serif">

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Amount, commencing on the first day of the month in which the Default Period begins and
continuing through the last day of such Default Period, or any shorter time period that
Wells Fargo in its sole discretion may deem appropriate, without waiving any of its other
rights and remedies.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left">(j)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD><U>Letter of Credit Administrative Fees</U>. Company shall pay all administrative fees
charged by Wells Fargo in connection with the honoring of drafts under any Letter of Credit,
and any amendments to or transfers of any Letter of Credit, and any other activity with
respect to the Letters of Credit at the current rates published by Wells Fargo for such
services rendered on behalf of its customers generally.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left">(k)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD><U>Other Fees and Charges</U>. Wells Fargo may impose additional fees and charges during a
Default Period for (i)&nbsp;waiving an Event of Default, or for (ii)&nbsp;the administration of
Collateral by Wells Fargo. All such fees and charges shall be imposed at Wells Fargo&#146;s sole
discretion following oral notice to Company on either an hourly, periodic, or flat fee basis,
and in lieu of or in addition to imposing interest at the Default Rate, and Company&#146;s request
for an Advance following such notice shall constitute Company&#146;s agreement to pay such fees and
charges.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left">(l)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD><U>LIBOR Advance Breakage Fees</U>. Company may prepay any LIBOR Advance at any time in any
amount, whether voluntarily or by acceleration; <U>provided</U>,<U> however</U>, that if the
LIBOR Advance is prepaid, Company shall pay Wells Fargo upon demand a LIBOR Advance breakage
fee equal to the sum of the discounted monthly differences for each month from the month of
prepayment through the month in which such Interest Period matures, calculated as follows for
each such month:</TD>
</TR>

</TABLE>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 4%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) <U>Determine</U> the amount of interest which would have accrued each month on
the amount prepaid at the interest rate applicable to such amount had it remained
outstanding until the last day of the applicable Interest Period.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 4%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) <U>Subtract</U> from the amount determined in (i)&nbsp;above the amount of interest
which would have accrued for the same month on the amount prepaid for the remaining term of
such Interest Period at LIBOR in effect on the date of prepayment for new loans made for
such term in a principal amount equal to the amount prepaid.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 4%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii) If the result obtained in (ii)&nbsp;for any month is greater than zero, discount that
difference by LIBOR used in (ii)&nbsp;above.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 4%"><B>Company acknowledges that prepayment of the Revolving Note may result in Wells Fargo
incurring additional costs, expenses or liabilities, and that it is difficult to ascertain
the full extent of such costs, expenses or liabilities. Company agrees to pay the
above-described LIBOR Advance breakage fee and agrees that this amount represents a
reasonable estimate of the LIBOR Advance breakage costs, expenses and/or liabilities of
Wells Fargo.</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B><I>Credit and Security Agreement</I></B><br>
<B><I>WFBC/Iridex (domestic facility)</I></B>
</DIV>


<P align="center" style="font-size: 10pt"><!-- Folio -->9<!-- /Folio -->
</DIV>

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<DIV style="font-family: Helvetica,Arial,sans-serif">

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left"><B>1.8</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD><B>Interest Accrual; Principal and Interest Payments; Computation</B>.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left">(a)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD><U>Interest Payments and Interest Accrual</U>. Accrued and unpaid interest under the
Revolving Note shall be due and payable on the first day of each month (each an &#147;Interest
Payment Date&#148;) and on the Termination Date, and shall be paid in the manner provided in
Section&nbsp;1.4(c). Interest shall accrue from the most recent date to which interest has been
paid or, if no interest has been paid, from the date of Advance to the Interest Payment Date.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left">(b)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD><U>Payment of Revolving Note Principal</U>. The principal amount of the Revolving Note
shall be paid from time to time as provided in this Agreement, and shall be fully due and
payable on the Termination Date.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left">(c)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD><U>Payments Due on Non-Business Days</U>. If an Interest Payment Date or the Termination
Date falls on a day which is not a Business Day, payment shall be made on the next Business
Day, and interest shall continue to accrue during that time period.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left">(d)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD><U>Computation of Interest and Fees</U>. Interest accruing on the unpaid principal amount
of the Revolving Note and fees payable under this Agreement shall be computed on the basis of
the actual number of days elapsed in a year of 360&nbsp;days.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left">(e)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD><U>Liability Records</U>. Wells Fargo shall maintain accounting and bookkeeping records of
all Advances and payments under the Line of Credit and all other Indebtedness due to Wells
Fargo in such form and content as Wells Fargo in its sole discretion deems appropriate. Wells
Fargo&#146;s calculation of current Indebtedness shall be presumed correct unless proven otherwise
by Company. Upon Wells Fargo&#146;s request, Company will admit and certify in a Record the exact
principal balance of the Indebtedness that Company then believes to be outstanding. Any
billing statement or accounting provided by Wells Fargo shall be conclusive and binding unless
Company notifies Wells Fargo in a detailed Record of its intention to dispute the billing
statement or accounting within 30&nbsp;days of receipt.</TD>
</TR>

</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B><I>Credit and Security Agreement</I></B><br>
<B><I>WFBC/Iridex (domestic facility)</I></B>
</DIV>


<P align="center" style="font-size: 10pt"><!-- Folio -->10<!-- /Folio -->
</DIV>

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<DIV style="font-family: Helvetica,Arial,sans-serif">

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left"><B>1.9</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD><B>Termination or Reduction of Line of Credit by Company; Notice</B>. Company may terminate or
reduce the Line of Credit at any time prior to the Maturity Date, if it (i)&nbsp;delivers an
Authenticated Record notifying Wells Fargo of its intentions at least 10 Business Days prior
to the proposed Termination Date (which notice may be contingent on the occurrence of an
event; provided that (x)&nbsp;if Company does not terminate or reduce the Line of Credit on the
date specified in such notice, Company may subsequently terminate or reduce the Line of Credit
only upon delivering Wells Fargo a new notice, as provided above, and complying with all other
terms of this paragraph, and (y)&nbsp;no more than three such notices may be provided within any 60
consecutive day period), (ii)&nbsp;pays Wells Fargo the termination fee set forth in Section
1.7(f), and (iii)&nbsp;pays the Indebtedness in full or down to the reduced Maximum Line Amount.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left"><B>1.10</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD><B>Letters of Credit.</B></TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left">(a)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD><U>Issuance of Letters of Credit; Amount</U>. Wells Fargo, subject to the terms and
conditions of this Agreement, shall issue, on or after the date that Wells Fargo is obligated
to make its first Advance under this Agreement and prior to the Termination Date, one or more
irrevocable standby or documentary letters of credit (each, a &#147;Letter of Credit&#148;, and
collectively, &#147;Letters of Credit&#148;) for Company&#146;s account. Wells Fargo will not issue any
Letter of Credit if the face amount of the Letter of Credit would exceed the least of: (i)
$1,000,000 less the L/C Amount, (ii)&nbsp;the Borrowing Base, less an amount equal to aggregate
unreimbursed Line of Credit Advances plus the L/C Amount, or (iii)&nbsp;the Maximum Line Amount,
less an amount equal to the aggregate unreimbursed Line of Credit Advances, plus the L/C
Amount, plus the aggregate unreimbursed &#147;Line of Credit Advances&#148; outstanding under the Ex-Im
Credit Agreement.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left">(b)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD><U>Additional Letter of Credit Documentation</U>. Prior to requesting issuance of a Letter
of Credit, Company shall first execute and deliver to Wells Fargo a Standby Letter of Credit
Agreement or a Commercial Letter of Credit Agreement, as applicable, an L/C Application, and
any other documents that Wells Fargo may request, which shall govern the issuance of the
Letter of Credit and Company&#146;s obligation to reimburse Wells Fargo for any related Letter of
Credit draws (the &#147;Obligation of Reimbursement&#148;).</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left">(c)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD><U>Expiration</U>. No Letter of Credit shall be issued that has an expiry date that is
later than one (1)&nbsp;year from the date of issuance, or the Maturity Date in effect on the date
of issuance, whichever is earlier.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left">(d)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD><U>Obligation of Reimbursement During Default Periods</U>. If Company is unable, due to the
existence of a Default Period or for any other reason, to obtain an Advance to pay any
Obligation of Reimbursement, Company shall pay Wells Fargo on demand and in immediately
available funds, the amount of the Obligation of Reimbursement together with interest, accrued
from the date presentment of the underlying draft until reimbursement in full at the Default
Rate. Wells Fargo is authorized, alternatively and in its sole discretion, to make an Advance
in an amount sufficient to discharge the Obligation of Reimbursement and pay all accrued but
unpaid interest and fees with respect to the Obligation of Reimbursement.</TD>
</TR>

</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B><I>Credit and Security Agreement</I></B><br>
<B><I>WFBC/Iridex (domestic facility)</I></B>
</DIV>


<P align="center" style="font-size: 10pt"><!-- Folio -->11<!-- /Folio -->
</DIV>

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<DIV style="font-family: Helvetica,Arial,sans-serif">

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left"><B>1.11</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD><B>Special Account</B>. If the Line of Credit is terminated for any reason while a Letter of Credit
is outstanding, or if after prepayment of the Revolving Note the L/C Amount continues to
exceed the Borrowing Base, then Company shall promptly pay Wells Fargo in immediately
available funds for deposit to the Special Account, an amount equal, as the case may be, to
either (a)&nbsp;the L/C Amount plus any anticipated fees and costs, or (b)&nbsp;the amount by which the
L/C Amount exceeds the Borrowing Base. If Company fails to pay these amounts promptly, then
Wells Fargo may in its sole discretion make an Advance to pay these amounts and deposit the
proceeds to the Special Account. The Special Account shall be an interest bearing account
maintained with Wells Fargo or any other financial institution acceptable to Wells Fargo.
Wells Fargo may in its sole discretion apply amounts on deposit in the Special Account to the
Indebtedness. Company may not withdraw amounts deposited to the Special Account until the
Line of Credit has been terminated and all outstanding Letters of Credit have either been
returned to Wells Fargo or have expired and the Indebtedness has been fully paid.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left"><B>2.</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD><B>SECURITY INTEREST AND OCCUPANCY OF COMPANY&#146;S PREMISES</B></TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left"><B>2.1</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD><B>Grant of Security Interest</B>. Company hereby pledges, assigns and grants to Wells Fargo, for
the benefit of Wells Fargo and as agent for Wells Fargo Merchant Services, L.L.C., a Lien and
security interest (collectively referred to as the &#147;Security Interest&#148;) in the Collateral, as
security for the payment and performance of the Indebtedness. Following request by Wells
Fargo, Company shall grant Wells Fargo, for the benefit of Wells Fargo and as agent for Wells
Fargo Merchant Services, L.L.C., a Lien and security interest in all commercial tort claims
that it may have against any Person.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left"><B>2.2</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD><B>Notifying Account Debtors and Other Obligors; Collection of Collateral</B>. Wells Fargo may at
any time (whether or not a Default Period then exists) deliver a Record giving an account
debtor or other Person obligated to pay an Account, a General Intangible, or other amount due,
notice that the Account, General Intangible, or other amount due has been assigned to Wells
Fargo for security and must be paid directly to Wells Fargo. Company shall join in giving
such notice and shall Authenticate any Record giving such notice upon Wells Fargo&#146;s request.
After Company or Wells Fargo gives such notice, Wells Fargo may, but need not, in Wells
Fargo&#146;s or in Company&#146;s name, demand, sue for, collect or receive any money or property at any
time payable or receivable on account of, or securing, such Account, General Intangible, or
other amount due, or grant any extension to, make any compromise or settlement with or
otherwise agree to waive, modify, amend or change the obligations (including collateral
obligations) of any account debtor or other obligor. Wells Fargo may, in Wells Fargo&#146;s name
or in Company&#146;s name, as Company&#146;s agent and attorney-in-fact, notify the United States Postal
Service to change the address for delivery of Company&#146;s mail to any address designated by
Wells Fargo, otherwise intercept Company&#146;s mail, and receive, open and dispose of Company&#146;s
mail, applying all Collateral as permitted under this Agreement and holding all other mail for
Company&#146;s account or forwarding such mail to Company&#146;s last known address.</TD>
</TR>

</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B><I>Credit and Security Agreement</I></B><br>
<B><I>WFBC/Iridex (domestic facility)</I></B>
</DIV>


<P align="center" style="font-size: 10pt"><!-- Folio -->12<!-- /Folio -->
</DIV>

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<DIV style="font-family: Helvetica,Arial,sans-serif">

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left"><B>2.3</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD><B>Assignment of Insurance</B>. As additional security for the Indebtedness, Company hereby assigns
to Wells Fargo and to Wells Fargo Merchant Services, L.L.C., all rights of Company under every
policy of insurance covering the Collateral and all business records and other documents
relating to it, and all monies (including proceeds and refunds) that may be payable under any
policy, and Company hereby directs the issuer of each policy to pay all such monies directly
to Wells Fargo. At any time, whether or not a Default Period then exists, Wells Fargo may
(but need not), in Wells Fargo&#146;s or Company&#146;s name, execute and deliver proofs of claim,
receive payment of proceeds and endorse checks and other instruments representing payment of
the policy of insurance, and adjust, litigate, compromise or release claims against the issuer
of any policy. Any monies received under any insurance policy assigned to Wells Fargo, other
than liability insurance policies, or received as payment of any award or compensation for
condemnation or taking by eminent domain, shall be paid to Wells Fargo and, as determined by
Wells Fargo in its sole discretion, either be applied to prepayment of the Indebtedness or
disbursed to Company under staged payment terms reasonably satisfactory to Wells Fargo for
application to the cost of repairs, replacements, or restorations which shall be effected with
reasonable promptness and shall be of a value at least equal to the value of the items or
property destroyed.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left"><B>2.4</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD><B>Company&#146;s Premises</B>.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left">(a)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD><U>Wells Fargo&#146;s Right to Occupy Company&#146;s Premises</U>. Company hereby grants to Wells
Fargo the right, at any time during a Default Period and without notice or consent, to take
exclusive possession of all locations where Company conducts its business or has any rights of
possession, including the locations described on Exhibit&nbsp;B (the &#147;Premises&#148;), until the earlier
of (i)&nbsp;payment in full and discharge of all Indebtedness and termination of the Line of
Credit, or (ii)&nbsp;final sale or disposition of all items constituting Collateral and delivery of
those items to purchasers.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left">(b)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD><U>Wells Fargo&#146;s Use of Company&#146;s Premises</U>. Wells Fargo may use the Premises to store,
process, manufacture, sell, use, and liquidate or otherwise dispose of items that are
Collateral, and for any other incidental purposes deemed appropriate by Wells Fargo in good
faith.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left">(c)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD><U>Company&#146;s Obligation to Reimburse Wells Fargo</U>. Wells Fargo shall not be obligated to
pay rent or other compensation for the possession or use of any Premises, but if Wells Fargo
elects to pay rent or other compensation to the owner of any Premises in order to have access
to the Premises, then Company shall promptly reimburse Wells Fargo all such amounts, as well
as all taxes, fees, charges and other expenses at any time payable by Wells Fargo with respect
to the Premises by reason of the execution, delivery, recordation, performance or enforcement
of any terms of this Agreement.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left"><B>2.5</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD><B>License</B>. Without limiting the generality of any other Security Document, Company hereby
grants to Wells Fargo a non-exclusive, worldwide and royalty-free license to use or otherwise
exploit all Intellectual Property Rights of Company for the purpose of: (a)&nbsp;completing the
manufacture of any in-process materials during any Default Period so that such materials
become saleable</TD>
</TR>

</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B><I>Credit and Security Agreement</I></B><br>
<B><I>WFBC/Iridex (domestic facility)</I></B>
</DIV>


<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">



</TABLE>
</DIV>
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</DIV>

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<DIV style="font-family: Helvetica,Arial,sans-serif">


<DIV style="margin-top: 6pt"><TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">



</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Inventory, all in accordance with the same quality standards previously adopted by Company
for its own manufacturing and subject to Company&#146;s reasonable exercise of quality control;
and (b)&nbsp;selling, leasing or otherwise disposing of any or all Collateral during any Default
Period.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left"><B>2.6</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD><B>Financing Statements</B>. Company authorizes Wells Fargo to file financing statements describing
Collateral to perfect Wells Fargo&#146;s Security Interest in the Collateral, and Wells Fargo may
describe the Collateral as &#147;all personal property&#148; or &#147;all assets&#148; or describe specific items
of Collateral including commercial tort claims as Wells Fargo may consider necessary or useful
to perfect the Security Interest. All financing statements filed before the date of this
Agreement to perfect the Security Interest were authorized by Company and are hereby
re-authorized. Following the termination of the Line of Credit and payment of all
Indebtedness, Wells Fargo shall, at Company&#146;s expense and within the time periods required
under applicable law, release or terminate any filings or other agreements that perfect the
Security Interest.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left"><B>2.7</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD><B>Setoff</B>. Wells Fargo may at any time, in its sole discretion and without demand or notice to
anyone, setoff any liability owed to Company by Wells Fargo against any Indebtedness then due
and unpaid.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left"><B>2.8</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD><B>Collateral Related Matters</B>. This Agreement does not contemplate a sale of Accounts or
chattel paper, and, as provided by law, Company is entitled to any surplus and shall remain
liable for any deficiency. Wells Fargo&#146;s duty of care with respect to Collateral in its
possession (as imposed by law) will be deemed fulfilled if it exercises reasonable care in
physically keeping such Collateral, or in the case of Collateral in the custody or possession
of a bailee or other third Person, exercises reasonable care in the selection of the bailee or
third Person, and Wells Fargo need not otherwise preserve, protect, insure or care for such
Collateral. Wells Fargo shall not be obligated to preserve rights Company may have against
prior parties, to liquidate the Collateral at all or in any particular manner or order or
apply the Proceeds of the Collateral in any particular order of application. Wells Fargo has
no obligation to clean-up or prepare Collateral for sale. Company waives any right it may
have to require Wells Fargo to pursue any third Person for any of the Indebtedness.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left"><B>2.9</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD><B>Notices Regarding Disposition of Collateral</B>. If notice to Company of any intended
disposition of Collateral or any other intended action is required by applicable law in a
particular situation, such notice will be deemed commercially reasonable if given in the
manner specified in Section&nbsp;7.4 at least ten calendar days before the date of intended
disposition or other action.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left"><B>3.</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD><B>CONDITIONS PRECEDENT</B></TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left"><B>3.1</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD><B>Conditions Precedent to Initial Advance and Issuance of Initial Letter of Credit</B>. Wells
Fargo&#146;s obligation to make the initial Advance or issue the first Letter of Credit shall be
subject to the condition that Wells Fargo shall have received and accepted this Agreement and
each of the Loan Documents, fees, and other documents and information described in Exhibit&nbsp;C,
executed and in form and content satisfactory to Wells Fargo (such date that all such items
have been received and accepted by Wells Fargo, the &#147;Closing Date&#148;).</TD>
</TR>

</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B><I>Credit and Security Agreement</I></B><br>
<B><I>WFBC/Iridex (domestic facility)</I></B>
</DIV>


<P align="center" style="font-size: 10pt"><!-- Folio -->14<!-- /Folio -->
</DIV>

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<DIV style="font-family: Helvetica,Arial,sans-serif">

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left"><B>3.2</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD><B>Additional Conditions Precedent to All Advances and Letters of Credit</B>. Wells Fargo&#146;s
obligation to make any Advance (including the initial Advance) or issue any Letter of Credit
shall be subject to the further additional conditions: (a)&nbsp;that the representations and
warranties described in Exhibit&nbsp;D are correct on the date of the Advance or the issuance of
the Letter of Credit, except to the extent that such representations and warranties relate
solely to an earlier date; and (b)&nbsp;that no event has occurred and is continuing, or would
result from the requested Advance or issuance of the Letter of Credit that would result in an
Event of Default.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left"><B>4.</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD><B>REPRESENTATIONS AND WARRANTIES</B></TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>To induce Wells Fargo to enter into this Agreement, Company makes the representations and
warranties described in Exhibit&nbsp;D. Any request for an Advance will be deemed a
representation by Company that all representations and warranties described in Exhibit&nbsp;D
are true, correct, and complete as of the time of the request, unless they relate
exclusively to an earlier date. Company shall promptly deliver a Record notifying Wells
Fargo of any change in circumstance that would affect the accuracy of any representation or
warranty, unless the representation and warranty specifically relates to an earlier date.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left"><B>5.</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD><B>COVENANTS</B></TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>So long as the Indebtedness remains unpaid, or the Line of Credit has not been terminated,
Company shall comply with each of the following covenants, unless Wells Fargo shall consent
otherwise in an Authenticated Record delivered to Company.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left"><B>5.1</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD><B>Reporting Requirements</B>. Company shall deliver to Wells Fargo the following information,
compiled where applicable using GAAP consistently applied, in form and content acceptable to
Wells Fargo:</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left">(a)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD><U>Annual Financial Statements</U>. As soon as available and in any event within 120&nbsp;days
after Company&#146;s fiscal year end, Company&#146;s audited financial statements prepared by an
independent certified public accountant acceptable to Wells Fargo, which shall include
Company&#146;s balance sheet, income statement, and statement of retained earnings and cash flows
prepared, if requested by Wells Fargo, on a consolidated and consolidating basis to include
Company&#146;s Subsidiaries. The annual financial statements shall be accompanied by a certificate
(the &#147;Compliance Certificate&#148;) in the form of Exhibit&nbsp;E that is signed by Company&#146;s chief
financial officer.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Each Compliance Certificate that accompanies an annual financial statement shall also be
accompanied by copies of all management letters prepared by Company&#146;s accountants.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left">(b)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD><U>Quarterly Financial Statements</U>. As soon as available and in any event within 30&nbsp;days
for the first two fiscal quarters in Company&#146;s fiscal year 2008 and 25&nbsp;days for each fiscal
quarter thereafter for preliminary statements and within 45&nbsp;days for final statements, in each
case after the end of each fiscal quarter, the unaudited/internal balance sheet and statements
of income and retained</TD>
</TR>

</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B><I>Credit and Security Agreement</I></B><br>
<B><I>WFBC/Iridex (domestic facility)</I></B>
</DIV>


<P align="center" style="font-size: 10pt"><!-- Folio -->15<!-- /Folio -->
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<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>earnings of Company as at the end of and for such quarter and for the year to date period
then ended, prepared, if Wells Fargo so requests, on a consolidated and consolidating
basis to include Company&#146;s Subsidiaries, in reasonable detail, all prepared in accordance
with GAAP, subject to year-end audit adjustments and without footnotes, and which fairly
represent Company&#146;s financial position and the results of its operations. The final
quarterly financial statements (i.e., the statements due within 45&nbsp;days after the end of
each fiscal quarter) shall be accompanied by a Compliance Certificate in the form of
Exhibit&nbsp;E that is signed by Company&#146;s chief financial officer.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left">(c)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD><U>Monthly Financial Statements</U>. As soon as available and in any event within 30&nbsp;days
after the end of each month for each month through August, 2008 and within 25&nbsp;days after the
end of each month for each month thereafter, a Company prepared balance sheet, income
statement, and statement of retained earnings prepared for that month and for the year&#150;to-date
period then ended, prepared, if requested by Wells Fargo, on a consolidated and consolidating
basis to include Company&#146;s Subsidiaries, and stating in comparative form the figures for the
corresponding date and periods in the prior fiscal year, subject to year-end adjustments and
without footnotes. The monthly financial statements shall be accompanied by a Compliance
Certificate in the form of Exhibit&nbsp;E that is signed by Company&#146;s chief financial officer.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left">(d)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD><U>Collateral Reports</U>. No later than 15&nbsp;days after each month end (or more frequently
if Wells Fargo shall request it), (i)&nbsp;detailed agings of Company&#146;s accounts receivable and
accounts payable, a detailed inventory report, an inventory certification report (including a
listing by location and category), an accounts receivable reconciliation report, and a
calculation of Company&#146;s Accounts (including an accounts receivable ineligibility
certification), Eligible Accounts, Inventory and Eligible Inventory as of the end of that
month or shorter time period requested by Wells Fargo, and (ii)&nbsp;Company shall provide Wells
Fargo with copies of bank account statements for each deposit or other account maintained by
Company. Accounts receivable agings shall be delivered electronically to Wells Fargo in
accordance with the instructions and procedures established by Wells Fargo from time to time.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left">(e)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD><U>Projections</U>. No later than 30&nbsp;days prior to each fiscal year end for a draft, and no
later than 30&nbsp;days after the commencement of each fiscal year for a final, projected balance
sheet and income statement and statement of retained earnings and cash flows for each month of
the next fiscal year for Company, certified as accurate by Company&#146;s chief financial officer
and accompanied by a statement of assumptions and supporting schedules and information.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left">(f)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD><U>Supplemental Reports</U>. Weekly, or more frequently if Wells Fargo requests, Company&#146;s
standard form of &#147;daily collateral report&#148;, together with sales reports, credit memos and
other accounts receivable adjustments, receivables schedules, collection reports, inventory
reports by category and location, copies of Company&#146;s five (5)&nbsp;largest invoices (by Dollar
amount) together with related shipment documents and delivery receipts for goods.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left">(g)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD><U>Litigation</U>. No later than three days after discovery, a Record notifying Wells Fargo
of any litigation or other proceeding before any court or governmental</TD>
</TR>

</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B><I>Credit and Security Agreement</I></B><br>
<B><I>WFBC/Iridex (domestic facility)</I></B>
</DIV>


<P align="center" style="font-size: 10pt"><!-- Folio -->16<!-- /Folio -->
</DIV>

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<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="font-family: Helvetica,Arial,sans-serif">

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>agency which seeks a monetary recovery against Company in excess of $250,000.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left">(h)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD><U>Intellectual Property</U>. (i)&nbsp;No later than 30&nbsp;days before it acquires material
Intellectual Property Rights, a Record notifying Wells Fargo of Company&#146;s intention to acquire
such rights; (ii)&nbsp;except for transfers permitted under Section&nbsp;5.18, no later than 30&nbsp;days
before it disposes of material Intellectual Property Rights, a Record notifying Wells Fargo of
Company&#146;s intention to dispose of such rights, along with copies of all proposed documents and
agreements concerning the disposal of such rights as requested by Wells Fargo; (iii)&nbsp;promptly
upon discovery, a Record notifying Wells Fargo of (A)&nbsp;any Infringement of Company&#146;s
Intellectual Property Rights by any Person, (B)&nbsp;claims that Company is Infringing another
Person&#146;s Intellectual Property Rights and (C)&nbsp;any threatened cancellation, termination or
material limitation of Company&#146;s Intellectual Property Rights; and (iv)&nbsp;promptly upon receipt,
copies of all registrations and filings with respect to Company&#146;s Intellectual Property
Rights.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left">(i)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD><U>Defaults</U>. No later than three days after learning of the probable occurrence of any
Event of Default, a Record notifying Wells Fargo of the Event of Default and the steps being
taken by Company to cure the Event of Default.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left">(j)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD><U>Disputes</U>. Promptly upon discovery, a Record notifying Wells Fargo of (i)&nbsp;any
disputes or claims by Company&#146;s customers exceeding $250,000 in the aggregate during any
three-month period; (ii)&nbsp;credit memos not previously reported in Section&nbsp;5.1(e); and (iii)&nbsp;any
goods returned to or recovered by Company outside of the ordinary course of business or in the
ordinary course of business but with a value in an amount in excess of $250,000.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left">(k)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD><U>Changes in Officers and Directors</U>. Promptly following occurrence, a Record notifying
Wells Fargo of any change in the persons constituting Company&#146;s executive Officers and
Directors.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left">(l)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD><U>Collateral</U>. Promptly upon discovery, a Record notifying Wells Fargo of any loss of
or material damage to any Collateral or of any substantial adverse change in any Collateral or
the prospect of its payment.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left">(m)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD><U>Commercial Tort Claims</U>. Promptly upon discovery, a Record notifying Wells Fargo of
any commercial tort claims brought by Company against any Person, including the name and
address of each defendant, a summary of the facts, an estimate of Company&#146;s damages, copies of
any complaint or demand letter submitted by Company, and such other information as Wells Fargo
may request.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left">(n)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD><U>Reports to Owners</U>. Promptly upon distribution, copies of all financial statements,
reports and proxy statements which Company shall have sent to its Owners; provided that
delivery to Wells Fargo of an email link that enables Wells Fargo to obtain complete copies of
the foregoing statements and reports shall satisfy such requirement.</TD>
</TR>

</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B><I>Credit and Security Agreement</I></B><br>
<B><I>WFBC/Iridex (domestic facility)</I></B>
</DIV>


<P align="center" style="font-size: 10pt"><!-- Folio -->17<!-- /Folio -->
</DIV>

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<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="font-family: Helvetica,Arial,sans-serif">

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left">(o)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD><U>Tax Returns of Company</U>. No later than thirty (30)&nbsp;days after the earlier of the date
that they are filed or required to be filed, copies of Company&#146;s signed and dated state and
federal income tax returns and all related schedules, and copies of any extension requests.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left">(p)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD><U>Tax Returns and Personal Financial Statements of Owners and Guarantors</U>.
&#091;INTENTIONALLY OMITTED&#093;.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left">(q)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD><U>Violations of Law</U>. No later than three days after discovery of any violation, a
Record notifying Wells Fargo of Company&#146;s violation of any law, rule or regulation, the
non-compliance with which could have a Material Adverse Effect on Company.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left">(r)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD><U>Pension Plans</U>. (i)&nbsp;Promptly upon discovery, and in any event within 30&nbsp;days after
Company knows or has reason to know that any Reportable Event with respect to any Pension Plan
has occurred, a Record authenticated by Company&#146;s chief financial officer notifying Wells
Fargo of the Reportable Event in detail and the actions which Company proposes to take to
correct the deficiency, together with a copy of any related notice sent to the Pension Benefit
Guaranty Corporation; (ii)&nbsp;promptly upon discovery, and in any event within 10&nbsp;days after
Company fails to make a required quarterly Pension Plan contribution under Section 412(m) of
the IRC, a Record authenticated by the Company&#146;s chief financial officer notifying Wells Fargo
of the failure in detail and the actions that Company will take to cure the failure, together
with a copy of any related notice sent to the Pension Benefit Guaranty Corporation; and (iii)
promptly upon discovery, and in any event within 10&nbsp;days after Company knows or has reason to
know that it may be liable or may be reasonably expected to have liability for any withdrawal,
partial withdrawal, reorganization or other event under any Multiemployer Plan under Sections
4201 or 4243 of ERISA, a Record authenticated by Company&#146;s chief financial officer notifying
Wells Fargo of the details of the event and the actions that Company proposes to take in
response.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left">(s)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD><U>Other Reports</U>. From time to time, with reasonable promptness, all receivables
schedules, inventory reports, collection reports, deposit records, equipment schedules,
invoices to account debtors, shipment documents and delivery receipts for goods sold, and such
other materials, reports, records or information as Wells Fargo may reasonably request.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left"><B>5.2</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD><B>Financial Covenants. </B>Company agrees to comply with the financial covenants described below,
which shall be calculated using GAAP consistently applied, except as they may be otherwise
modified by the following capitalized definitions:</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left">(a)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD><U>Minimum Net Income</U>. Company shall achieve, for each period described below, the sum
of (i)&nbsp;Net Income, <U><B><I>plus</I></B></U> (ii)&nbsp;non-cash expenses (to the extent deducted from Company&#146;s
net income in order to calculate Net Income), not to exceed $10,000,000, incurred in fiscal
2008 by Company that arise from the write-down of Company&#146;s intangible assets in connection
with the Company&#146;s analysis, as audited by Company&#146;s independent certified public accountants,
of the impairment of Company&#146;s book value of its goodwill, <U><B><I>plus</I></B></U> (iii)&nbsp;non-recurring
cash expenses, not to exceed $710,000, incurred in fiscal year 2008 by</TD>
</TR>

</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B><I>Credit and Security Agreement</I></B><br>
<B><I>WFBC/Iridex (domestic facility)</I></B>
</DIV>


<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">



</TABLE>
</DIV>
<P align="center" style="font-size: 10pt"><!-- Folio -->18<!-- /Folio -->
</DIV>

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<DIV style="font-family: Helvetica,Arial,sans-serif">


<DIV style="margin-top: 6pt"><TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">



</TABLE>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 4%">Company as a result of the winding up of Company&#146;s United Kingdom and French subsidiaries,
<U><B><I>less</I></B></U> (iv)&nbsp;to the extent included in the calculation of Net Income, any payments
received by Company under or in connection with that certain Settlement Agreement, dated
April&nbsp;6, 2007, among Company, Synergetics, Inc., and Synergetics USA, Inc., of not less
than the amount set forth for each such period (numbers appearing between &#147;&#060; &#062;&#147; are
negative):
</DIV>
<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="88%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left" colspan="3"><B>Minimum Net Income</B></TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left" colspan="3"><B>plus approved intangible</B></TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD nowrap align="left" style="border-bottom: 1px solid #000000"><B>Period</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left" colspan="3" style="border-bottom: 1px solid #000000"><B>expense adjustments</B></TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">April&nbsp;1, 2008 through April&nbsp;30, 2008</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">&#060;1,285,000&#062;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">April&nbsp;1, 2008 through May&nbsp;31, 2008</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">&#060;1,875,000&#062;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">April&nbsp;1, 2008 through June&nbsp;30, 2008</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">&#060;2,130,000&#062;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">April&nbsp;1, 2008 through July&nbsp;31, 2008</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">&#060;2,745,000&#062;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">April&nbsp;1, 2008 through August&nbsp;31, 2008</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">&#060;3,010,000&#062;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">April&nbsp;1, 2008 through September&nbsp;30, 2008</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">&#060;3,245,000&#062;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">April&nbsp;1, 2008 through October&nbsp;31, 2008</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">&#060;3,880,000&#062;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">April&nbsp;1, 2008 through November&nbsp;30, 2008</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">&#060;4,430,000&#062;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">April&nbsp;1, 2008 through December&nbsp;31, 2008</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">&#060;4,765,000&#062;</TD>
    <TD>&nbsp;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>


<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left">(b)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD><U>Minimum Debt Service Coverage Ratio</U>. Company shall maintain, as of the last day of
each period described below, a Debt Service Coverage Ratio, determined as at the end of each
month, of not less than the ratio set forth for each such period:</TD>
</TR>

</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B><I>Credit and Security Agreement</I></B><br>
<B><I>WFBC/Iridex (domestic facility)</I></B>
</DIV>


<P align="center" style="font-size: 10pt"><!-- Folio -->19<!-- /Folio -->
</DIV>

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<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="font-family: Helvetica,Arial,sans-serif">
<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="88%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="7%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD nowrap align="left" style="border-bottom: 1px solid #000000"><B>Period</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left" style="border-bottom: 1px solid #000000"><B>Debt Service Coverage Ratio</B></TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom" style="background: #cceeff">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">April&nbsp;1, 2008 through April&nbsp;30, 2008
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">1.10 to 1.0</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">April&nbsp;1, 2008 through May&nbsp;31, 2008
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">1.10 to 1.0</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">April&nbsp;1, 2008 through June&nbsp;30, 2008
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">1.10 to 1.0</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">April&nbsp;1, 2008 through July&nbsp;31, 2008
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">1.10 to 1.0</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">April&nbsp;1, 2008 through August&nbsp;31, 2008
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">1.10 to 1.0</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">April&nbsp;1, 2008 through September&nbsp;30, 2008
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">1.10 to 1.0</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">April&nbsp;1, 2008 through October&nbsp;31, 2008
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">1.10 to 1.0</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">April&nbsp;1, 2008 through November&nbsp;30, 2008
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">1.10 to 1.0</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">April&nbsp;1, 2008 through December&nbsp;31, 2008
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">1.10 to 1.0</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;If Company fails to satisfy the foregoing Debt Service Coverage Ratio covenant on any test
date, but Company has maintained an average daily ending cash balance in its deposit accounts (net
of book overdrafts and past due accounts payable owing by Company) for the 30-day period ending on
such test date that equals or exceeds an amount equal to double the deficiency in Net Income that
would have resulted in compliance with such Debt Service Coverage Ratio, Company will be deemed to
be in compliance with the Debt Service Coverage Ratio on such test date.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;If Company does not have any term debt outstanding (including no obligations outstanding to
American Medical Systems, Inc.), Company shall not be required to comply with the foregoing Debt
Service Coverage Ratio.
</DIV>


<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left">(c)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD><U>Capital Expenditures</U>. Company shall not incur or contract to incur Capital
Expenditures of more than $250,000 in the aggregate during any fiscal year.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left"><B>5.3</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD><B>Other Liens and Permitted Liens</B>.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left">(a)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD><U>Other Liens; Permitted Liens</U>. Company shall not create, incur or suffer to exist any
Lien upon any of its assets, now owned or later acquired, as security for</TD>
</TR>

</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B><I>Credit and Security Agreement</I></B><br>
<B><I>WFBC/Iridex (domestic facility)</I></B>
</DIV>


<P align="center" style="font-size: 10pt"><!-- Folio -->20<!-- /Folio -->
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="font-family: Helvetica,Arial,sans-serif">

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>any indebtedness, with the exception of the following (each a &#147;Permitted Lien&#148;;
collectively, &#147;Permitted Liens&#148;): (i)&nbsp;In the case of real property, covenants,
restrictions, rights, easements and minor irregularities in title which do not materially
interfere with Company&#146;s business or operations as presently conducted; (ii)&nbsp;Liens in
existence on the date of this Agreement that are described in Exhibit&nbsp;F and secure
indebtedness for borrowed money permitted under Section&nbsp;5.4; (iii)&nbsp;The Security Interest
and Liens created by the Security Documents; (iv)&nbsp;Purchase money Liens (including any
capital lease and any sale-leaseback of equipment occurring within 90&nbsp;days of the
acquisition of such equipment) relating to the acquisition of Equipment not exceeding the
lesser of cost or fair market value, not exceeding $100,000 in the aggregate during any
fiscal year, and so long as no Default Period is then in existence and none would exist
immediately after such acquisition; (v)&nbsp;Liens for taxes, fees, assessments or other
governmental charges or levies, either not delinquent or being contested in good faith by
appropriate proceedings and for which adequate reserves have been established in accordance
with GAAP, provided the same have no priority over any of Wells Fargo&#146;s security interests;
(vi)&nbsp;Liens existing on equipment at the time of its acquisition, provided that the Lien is
confined solely to the property so acquired and improvements thereon, and the proceeds of
such equipment; (vii)&nbsp;Liens to secure payment of workers&#146; compensation, employment
insurance, old age pensions, social security or other like obligations incurred in the
ordinary course of business; (viii)&nbsp;Liens arising from judgments, decrees or attachments in
circumstances not constituting an Event of Default under Section&nbsp;6.1(h); (ix)&nbsp;Liens in
favor of other financial institutions arising in connection with accounts at such
institutions to secure standard fees for services, but not financing made available by such
institution; (x)&nbsp;carriers&#146; warehousemen&#146;s, mechanics, materialmen&#146;s, repairmen&#146;s or other
like Liens arising in the ordinary course of business which are not delinquent or which are
being contested in good faith and by appropriate proceedings and for which Company
maintains adequate reserves in accordance with GAAP; (xi)&nbsp;leases or subleases and licenses
or sublicenses granted to others in the ordinary course of business which do not interfere
in any material respect with the business operations of Company or any applicable
Subsidiary; (xii)&nbsp;Liens in favor of customs and revenue authorities arising as a matter of
law to secure payment of customs duties in connection with the importation of goods; and
(xiii)&nbsp;Liens incurred in connection with the extension, renewal or refinancing of the
indebtedness secured by Liens of the type described in clauses (ii)&nbsp;and (iv)&nbsp;above,
provided that any extension, renewal or replacement Lien shall be limited to the property
encumbered by the existing Lien and the principal amount of the indebtedness being
extended, renewed or refinanced does not increase.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left">(b)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD><U>Financing Statements</U>. Company shall not authorize the filing of any financing
statement by any Person as Secured Party with respect to any of Company&#146;s assets, other than
Wells Fargo or in connection with Permitted Liens. Company shall not amend any financing
statement filed by Wells Fargo as Secured Party except as permitted by law.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left"><B>5.4</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD><B>Indebtedness</B>. Company shall not incur, create, assume or permit to exist any Debt, except:
(a)&nbsp;Indebtedness arising under this Agreement and the Ex-Im Credit Agreement; (b)&nbsp;Debt of
Company described on Exhibit&nbsp;F; (c)&nbsp;Debt</TD>
</TR>

</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B><I>Credit and Security Agreement</I></B><br>
<B><I>WFBC/Iridex (domestic facility)</I></B>
</DIV>


<P align="center" style="font-size: 10pt"><!-- Folio -->21<!-- /Folio -->
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="font-family: Helvetica,Arial,sans-serif">

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>secured by Permitted Liens; and (d)&nbsp;inter-company unsecured Debt owing by Company to a
Subsidiary; provided, that, upon the request of Wells Fargo, such Debt shall be evidenced
by promissory notes having terms (including subordination terms) satisfactory to Wells
Fargo, the sole originally executed counterparts of which shall be pledged and delivered to
Wells Fargo as security for the Indebtedness. With respect to the Debt owing by Company to
American Medical Systems, Inc. that is described on Exhibit&nbsp;F (the &#147;AMS Debt&#148;), Company
shall make payments owing with respect to the AMS Debt when due (and in no event shall the
AMS Debt be prepaid) in accordance with the terms and conditions of the agreements
governing the AMS Debt that are in existence as of the Closing Date, except to the extent
such payments of the AMS Debt would be prohibited by the terms of the Subordination
Agreement entered into between American Medical Systems, Inc. and Wells Fargo. With
respect to any other Debt owing by Company to any Subordinated Creditor other than American
Medical Systems, Inc., Company may only make payments of interest and principal to the
extent such interest and/or principal payments are permitted under the terms and conditions
of the Subordination Agreement entered into by Wells Fargo and the relevant Subordinated
Creditor.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left"><B>5.5</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD><B>Guaranties</B>. Company shall not assume, guarantee, endorse or otherwise become directly or
contingently liable for the obligations of any Person, except: (a)&nbsp;the endorsement of
negotiable instruments by Company for deposit or collection or similar transactions in the
ordinary course of business; (b)&nbsp;guaranties, endorsements and other direct or contingent
liabilities in connection with the obligations of other Persons in existence on the date of
this Agreement and described in Exhibit&nbsp;F; and (c)&nbsp;Investments permitted under Section&nbsp;5.6.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left"><B>5.6</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD><B>Investments and Subsidiaries</B>. Company shall not make or permit to exist any loans or
advances to, any guaranties or other credit support for the benefit of, or make any investment
or acquire any interest whatsoever in (collectively, &#147;Investments&#148;), any Person or Affiliate,
including any partnership or joint venture, nor purchase or hold beneficially any stock or
other securities or evidence of indebtedness of any Person or Affiliate, except:</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left">(a)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Investments in (i)&nbsp;direct obligations issued or unconditionally guaranteed by the United
States government and backed by the full faith and credit of the United States government;
(ii)&nbsp;certificates of deposit and time deposits, bankers&#146; acceptances and floating rate
certificates of deposit issued by any commercial bank organized under the laws of the United
States, any state thereof, the District of Columbia, any foreign bank, or its branches or
agencies, the long-term indebtedness of which institution at the time of acquisition is rated
A- (or better) by Standard &#038; Poor&#146;s Ratings Group, a division of McGraw-Hill, Inc. (&#147;S&#038;P&#148;) or
A3 (or better) by Moody&#146;s Investors Service, Inc. (&#147;Moody&#146;s&#148;), and which certificates of
deposit and time deposits are fully protected against currency fluctuations for any such
deposits with a term of more than ninety (90)&nbsp;days; (iii)&nbsp;shares of money market, mutual or
similar funds having assets in excess of $100,000,000 and the investments of which are limited
to (a)&nbsp;investment grade securities (i.e., securities rated at least Baa by Moody&#146;s or at least
BBB by S&#038;P) and (b)&nbsp;commercial paper of United States and foreign banks and bank holding
companies and their subsidiaries and United States and foreign finance, commercial industrial
or utility companies which, at the time</TD>
</TR>

</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B><I>Credit and Security Agreement</I></B><br>
<B><I>WFBC/Iridex (domestic facility)</I></B>
</DIV>


<P align="center" style="font-size: 10pt"><!-- Folio -->22<!-- /Folio -->
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="font-family: Helvetica,Arial,sans-serif">

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>of acquisition, are rated A-2 (or better) by S&#038;P or P-2 (or better) by Moody&#146;s (all such
institutions being, &#147;<U>Qualified Institutions</U>&#148;); and (iv)&nbsp;commercial paper of
Qualified Institutions; <U>provided</U> that the maturities of any of the foregoing
Investments shall not exceed three hundred sixty-five (365)&nbsp;days from the date of
acquisition thereof.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left">(b)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Travel advances or loans to Company&#146;s Officers and employees not exceeding at any one time an
aggregate of $50,000;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left">(c)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Prepaid rent not exceeding one month or security deposits;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left">(d)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Current Investments in those Subsidiaries in existence on the date of this Agreement which
are identified on Exhibit&nbsp;D, and Investments in Subsidiaries after the Closing Date not to
exceed $250,000 in the aggregate. Except to the extent permitted in the immediately preceding
sentence, Company shall not make any further capital contributions or loans to any
Subsidiaries after the Closing Date, guarantee, otherwise become liable for, or provide any
other form of credit support for any obligations of any Subsidiaries after the Closing Date,
or transfer any assets to any Subsidiaries after the Closing Date;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left">(e)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Investments (including debt obligations) received in connection with the bankruptcy or
reorganization of customers or suppliers and in settlement of delinquent obligations of, and
other disputes with, customers or suppliers arising in the ordinary course of Company&#146;s
business;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left">(f)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Investments consisting of accounts receivable of, notes receivable of, or prepaid royalties
and other credit extensions, to customers and suppliers who are not Affiliates, in the
ordinary course of Company&#146;s business; and</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left">(g)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Other Investments by Company which do not exceed $250,000 in the aggregate in any fiscal
year.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left"><B>5.7</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD><B>Dividends and Distributions</B>. Company shall not declare or pay any dividends (other than
dividends payable solely in Permitted Securities of Company on any class of its stock), or
make any payment on account of the purchase, redemption or retirement of any shares of its
stock, or other securities or evidence of its indebtedness or make any distribution regarding
its stock, either directly or indirectly; provided that Company may (i)&nbsp;make payments in lieu
of fractional shares in connection with any stock split or consolidation, (ii)&nbsp;repurchase
stock from directors, officers or employees in connection with employee benefit arrangements
or upon termination of employment in an amount not to exceed $100,000 in any fiscal year, and
(iii)&nbsp;retain stock in lieu of withholding obligations.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left"><B>5.8</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD><B>Salaries</B>. &#091;INTENTIONALLY OMITTED&#093;.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left"><B>5.9</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD><B>Key Person Life Insurance</B>. &#091;INTENTIONALLY OMITTED&#093;.</TD>
</TR>

</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B><I>Credit and Security Agreement</I></B><br>
<B><I>WFBC/Iridex (domestic facility)</I></B>
</DIV>


<P align="center" style="font-size: 10pt"><!-- Folio -->23<!-- /Folio -->
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="font-family: Helvetica,Arial,sans-serif">

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left"><B>5.10</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD><B>Books and Records; Collateral Examination; Inspection and Appraisals</B>.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left">(a)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD><U>Books and Records; Inspection</U>. Company shall keep complete and accurate books and
records with respect to the Collateral and Company&#146;s business and financial condition and any
other matters that Wells Fargo may request, in accordance with GAAP. Company shall permit any
employee, attorney, accountant or other agent of Wells Fargo to audit, review, make extracts
from and copy any of its books and records at any time during ordinary business hours, and to
discuss Company&#146;s affairs with any of its Directors, Officers, employees, Owners or agents.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left">(b)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD><U>Authorization to Company&#146;s Agents to Make Disclosures to Wells Fargo</U>. Company
authorizes all accountants and other Persons acting as its agent to disclose and deliver to
Wells Fargo&#146;s employees, accountants, attorneys and other Persons acting as its agent, at
Company&#146;s expense, all financial information, books and records, work papers, management
reports and other information in their possession regarding Company.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left">(c)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD><U>Collateral Exams and Inspections</U>. Company shall permit Wells Fargo&#146;s employees,
accountants, attorneys or other Persons acting as its agent, to examine and inspect any
Collateral or any other property of Company at any time during ordinary business hours.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left">(d)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD><U>Collateral Appraisals</U>. Wells Fargo may also obtain, from time to time, at Company&#146;s
expense, an appraisal of the Collateral by an appraiser acceptable to Wells Fargo in its sole
discretion.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left"><B>5.11</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD><B>Account Verification; Payment of Permitted Liens</B>.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left">(a)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD><U>Account Verification</U>. Wells Fargo or its agents may (i)&nbsp;contact account debtors and
other obligors at any time to verify Company&#146;s Accounts; and (ii)&nbsp;require Company to send
requests for verification of Accounts or send notices of assignment of Accounts to account
debtors and other obligors.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left">(b)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD><U>Covenant to Pay Permitted Liens</U>. Company shall pay when due each account payable due
to any Person holding a Permitted Lien (as a result of such payable) on any Collateral.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left"><B>5.12</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD><B>Compliance with Laws</B>.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left">(a)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD><U>General Compliance with Applicable Law; Use of Collateral</U>. Company shall (i)&nbsp;comply,
and cause each Subsidiary to comply, with the requirements of applicable laws and regulations,
the non-compliance with which would have a Material Adverse Effect on its business or its
financial condition and (ii)&nbsp;use and keep the Collateral, and require that others use and keep
the Collateral, only for lawful purposes, without violation of any federal, state or local
law, statute or ordinance.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left">(b)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD><U>Compliance with Federal Regulatory Laws</U>. Company shall (i)&nbsp;prohibit, and cause each
Subsidiary to prohibit, any Person that is an Owner or Officer from being listed on the
Specially Designated Nationals and Blocked Person List or</TD>
</TR>

</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B><I>Credit and Security Agreement</I></B><br>
<B><I>WFBC/Iridex (domestic facility)</I></B>
</DIV>


<P align="center" style="font-size: 10pt"><!-- Folio -->24<!-- /Folio -->
</DIV>

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<DIV style="font-family: Helvetica,Arial,sans-serif">

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>other similar lists maintained by the Office of Foreign Assets Control (&#147;OFAC&#148;), the
Department of the Treasury or included in any Executive Orders, (ii)&nbsp;not permit the
proceeds of the Line of Credit or any other financial accommodation extended by Wells Fargo
to be used in any way that violates any foreign asset control regulations of OFAC or other
applicable law, (iii)&nbsp;comply, and cause each Subsidiary to comply, with all applicable Bank
Secrecy Act laws and regulations, as amended from time to time, and (iv)&nbsp;otherwise comply
with the USA Patriot Act and Wells Fargo&#146;s related policies and procedures.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left">(c)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD><U>Compliance with Environmental Laws</U>. Company shall (i)&nbsp;comply, and cause each
Subsidiary to comply, with the requirements of applicable Environmental Laws and obtain and
comply with all permits, licenses and similar approvals required by them, and (ii)&nbsp;not
generate, use, transport, treat, store or dispose of any Hazardous Substances in such a manner
as to create any material liability or obligation under the common law of any jurisdiction or
any Environmental Law.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left"><B>5.13</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD><B>Payment of Taxes and Other Claims</B>. Company shall pay or discharge, when due, and cause each
Subsidiary to pay or discharge, when due, (a)&nbsp;all taxes, assessments and governmental charges
exceeding $25,000 in the aggregate that are levied or imposed upon it or upon its income or
profits, upon any properties belonging to it (including the Collateral), or upon or against
the creation, perfection or continuance of the Security Interest, prior to the date on which
penalties attach, (b)&nbsp;all federal, state and local taxes required to be withheld by it, and
(c)&nbsp;all lawful claims for labor, materials and supplies which, if unpaid, might by law become
a Lien upon any properties of Company, although Company shall not be required to pay any such
tax, assessment, charge or claim whose amount, applicability or validity is being contested in
good faith by appropriate proceedings and for which proper reserves have been made.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left"><B>5.14</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD><B>Maintenance of Collateral and Properties</B>.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left">(a)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Company shall keep and maintain the Collateral and all of its other properties necessary or
useful in its business in good condition, repair and working order (normal wear and tear
excepted) and will from time to time replace or repair any worn, defective or broken parts,
although Company may discontinue the operation and maintenance of any properties if Company
believes that such discontinuance is desirable to the conduct of its business and not
disadvantageous in any material respect to Wells Fargo. Company shall take all commercially
reasonable steps necessary to protect and maintain its Intellectual Property Rights.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left">(b)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Company shall defend the Collateral against all Liens, claims and demands of all third
Persons claiming any interest in the Collateral. Company shall keep all Collateral free and
clear of all Liens except Permitted Liens. Company shall take all commercially reasonable
steps necessary to prosecute any Person Infringing its Intellectual Property Rights and to
defend itself against any Person accusing it of Infringing any Person&#146;s Intellectual Property
Rights.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left"><B>5.15</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD><B>Insurance</B>. Company shall at all times maintain insurance with insurers acceptable to Wells
Fargo, in such amounts, on such terms (including any</TD>
</TR>

</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B><I>Credit and Security Agreement</I></B><br>
<B><I>WFBC/Iridex (domestic facility)</I></B>
</DIV>


<P align="center" style="font-size: 10pt"><!-- Folio -->25<!-- /Folio -->
</DIV>

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<DIV style="font-family: Helvetica,Arial,sans-serif">


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 4%">deductibles) and against such risks as Wells Fargo may require (which, at a minimum shall
be in such amounts and against such risks as are usually carried by companies engaged in
similar business and owning similar properties in the same geographical areas in which
Company operates). Without limiting the generality of the foregoing, Company shall, at all
times and without limitation, maintain business interruption insurance (including force
majeure coverage) and keep all tangible Collateral insured against risks of fire (including
so-called extended coverage), theft, collision (for Collateral consisting of motor
vehicles) and such other risks and in such amounts as Wells Fargo may reasonably request,
with any loss payable to Wells Fargo to the extent of its interest, and all such policies
of insurance shall contain a lender&#146;s loss payable endorsement for the benefit of Wells
Fargo. All policies of liability insurance shall name Wells Fargo as an additional
insured.
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left"><B>5.16</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD><B>Preservation of Existence</B>. Company shall preserve and maintain its existence and all of its
rights, privileges and franchises necessary or desirable in the normal conduct of its business
and shall conduct its business in an orderly, efficient and regular manner.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left"><B>5.17</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD><B>Delivery of Instruments, etc</B>. Upon request by Wells Fargo, Company shall promptly deliver to
Wells Fargo in pledge all instruments, documents and chattel paper constituting Collateral,
endorsed or assigned by Company.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left"><B>5.18</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD><B>Sale or Transfer of Assets; Suspension of Business Operations</B>. Company shall not sell,
lease, assign, transfer, license, or otherwise dispose of (each, a &#147;Transfer&#148;) (a)&nbsp;the stock
of any Subsidiary, (b)&nbsp;all or a substantial part of its assets, or (c)&nbsp;any Collateral or any
interest in Collateral (whether in one transaction or in a series of transactions) to any
other Person other than (i)&nbsp;the sale of Inventory in the ordinary course of business and the
licensing of Intellectual Property Rights in the ordinary course of its business in connection
with sales of Inventory or the provision of services to its customers, (ii)&nbsp;Transfers of
worn-out, obsolete or unneeded equipment, and (iii)&nbsp;Transfers constituting Permitted
Investments. Company shall not liquidate, dissolve or suspend business operations. Company
shall not permit its rights as licensee of Licensed Intellectual Property to lapse, except
that Company may transfer such rights or permit them to lapse if it has reasonably determined
that such Intellectual Property Rights are no longer useful in its business.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left"><B>5.19</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD><B>Consolidation and Merger; Asset Acquisitions</B>. Company shall not consolidate with or merge
into any other entity, or permit any other entity to merge into it, or acquire (in a
transaction analogous in purpose or effect to a consolidation or merger) all or substantially
all of the assets of any other entity; provided that any Subsidiary of Company may merge with
and into Company so long as Company is the surviving entity.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left"><B>5.20</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD><B>Sale and Leaseback</B>. Company shall not enter into any arrangement, directly or indirectly,
with any other Person pursuant to which Company shall sell or transfer any real or personal
property, whether owned now or acquired in the future, and then rent or lease all or part of
such property or any other property which Company intends to use for substantially the same
purpose or purposes</TD>
</TR>

</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B><I>Credit and Security Agreement</I></B><br>
<B><I>WFBC/Iridex (domestic facility)</I></B>
</DIV>


<P align="center" style="font-size: 10pt"><!-- Folio -->26<!-- /Folio -->
</DIV>

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<DIV style="font-family: Helvetica,Arial,sans-serif">

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>as the property being sold or transferred, except in connection with a financing that would
be permitted under Section&nbsp;5.3(a)(iv).</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left"><B>5.21</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD><B>Restrictions on Nature of Business</B>. Company will not engage in any line of business
materially different from that presently engaged in by Company, and will not purchase, lease
or otherwise acquire assets not related to its business.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left"><B>5.22</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD><B>Accounting</B>. Company will not adopt any material change in accounting principles except as
required by GAAP, consistently applied. Company will not change its fiscal year.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left"><B>5.23</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD><B>Discounts, etc</B>. After notice from Wells Fargo, Company will not grant any discount, credit
or allowance to any customer of Company or accept any return of goods sold except in the
ordinary course of Company&#146;s business. Company will not at any time modify, amend,
subordinate, cancel or terminate any Account except in the ordinary course of Company&#146;s
business.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left"><B>5.24</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD><B>Pension Plans</B>. Except as disclosed to Wells Fargo in a Record prior to the date of this
Agreement, neither Company nor any ERISA Affiliate will (a)&nbsp;adopt, create, assume or become
party to any Pension Plan, (b)&nbsp;become obligated to contribute to any Multiemployer Plan, (c)
incur any obligation to provide post-retirement medical or insurance benefits with respect to
employees or former employees (other than benefits required by law) or (d)&nbsp;amend any Plan in a
manner that would materially increase its funding obligations.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left"><B>5.25</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD><B>Place of Business; Name</B>. Company will not transfer its chief executive office or principal
place of business, or move, relocate, close or sell any business Premises, without prior
written notice to Wells Fargo. Company will not change its name or jurisdiction of
organization without prior written notice to Wells Fargo.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left"><B>5.26</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD><B>Constituent Documents</B>. Company will not amend its Constituent Documents.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left"><B>5.27</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD><B>Performance by Wells Fargo</B>. If Company fails to perform or observe any of its obligations
under this Agreement at any time, Wells Fargo may, but need not, perform or observe them on
behalf of Company and may, but need not, take any other actions which Wells Fargo may
reasonably deem necessary to cure or correct this failure; and Company shall pay Wells Fargo
upon demand the amount of all costs and expenses (including reasonable attorneys&#146; fees and
legal expense) incurred by Wells Fargo in performing these obligations, together with interest
on these amounts at the Default Rate.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left"><B>5.28</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD><B>Wells Fargo Appointed as Company&#146;s Attorney in Fact</B>. To facilitate Wells Fargo&#146;s performance
or observance of Company&#146;s obligations under this Agreement, Company hereby irrevocably
appoints Wells Fargo and Wells Fargo&#146;s agents, as Company&#146;s attorney in fact (which
appointment is coupled with an interest) with the right (but not the duty) to create, prepare,
complete, execute, deliver, endorse or file on behalf of Company any instruments, documents,
assignments, security agreements, financing statements, applications for insurance and any
other agreements or any Record required to</TD>
</TR>

</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B><I>Credit and Security Agreement</I></B><br>
<B><I>WFBC/Iridex (domestic facility)</I></B>
</DIV>


<P align="center" style="font-size: 10pt"><!-- Folio -->27<!-- /Folio -->
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<DIV style="font-family: Helvetica,Arial,sans-serif">

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>be obtained, executed, delivered or endorsed by Company in accordance with the terms of
this Agreement.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left"><B>6.</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD><B>EVENTS OF DEFAULT AND REMEDIES</B></TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left"><B>6.1</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD><B>Events of Default</B>. An &#147;Event of Default&#148; means any of the following:</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left">(a)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Company fails to pay any the amount of any Indebtedness on the date that it becomes due and
payable;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left">(b)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Company fails to observe or perform any covenant or agreement of Company set forth in this
Agreement, in any of the Loan Documents, or in the Master Agreement for Treasury Management
Services, or any covenant in Section&nbsp;5.2 becomes inapplicable due to the lapse of time, and
Wells Fargo and Company fail to come to an agreement acceptable to Wells Fargo in Wells
Fargo&#146;s sole discretion to amend the covenant to apply to future periods;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left">(c)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>An Overadvance arises as the result of any reduction in the Borrowing Base and the amount of
the Overadvance is not immediately repaid, or arises in any manner or on terms not otherwise
approved of in advance by Wells Fargo in a Record that it has Authenticated and the amount of
the Overadvance is not immediately repaid;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left">(d)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>A Change of Control shall occur;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left">(e)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Company or any Guarantor becomes insolvent or admits in a Record an inability to pay debts as
they mature, or Company or any Guarantor makes an assignment for the benefit of creditors; or
Company or any Guarantor applies for or consents to the appointment of any receiver, trustee,
or similar officer for the benefit of Company or any Guarantor, or for any of their
properties; or any receiver, trustee or similar officer is appointed without the application
or consent of Company or such Guarantor and such appointment is not vacated within 30&nbsp;days; or
any judgment, writ, warrant of attachment or execution or similar process is issued or levied
against a substantial part of the property of Company or any Guarantor and such process is not
vacated within 30&nbsp;days;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left">(f)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Company or any Guarantor files a petition under any chapter of the United States Bankruptcy
Code or under the laws of any other jurisdiction naming Company or such Guarantor as debtor;
or any such petition is instituted against Company or any such Guarantor and such petition is
not dismissed within 30&nbsp;days; or Company or any Guarantor institutes (by petition,
application, answer, consent or otherwise) any bankruptcy, insolvency, reorganization, debt
arrangement, dissolution, liquidation or similar proceeding under the laws of any
jurisdiction; or any such proceeding is instituted (by petition, application or otherwise)
against Company or any such Guarantor and such proceeding is not dismissed within 30&nbsp;days;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left">(g)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Any representation or warranty made by Company in this Agreement or by any Guarantor in any
Guaranty, or by Company (or any of its Officers) or any Guarantor in any agreement,
certificate, instrument or financial statement or other statement delivered to Wells Fargo in
connection with this Agreement or</TD>
</TR>

</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B><I>Credit and Security Agreement</I></B><br>
<B><I>WFBC/Iridex (domestic facility)</I></B>
</DIV>


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<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>pursuant to such Guaranty is untrue or misleading in any material respect when delivered to
Wells Fargo;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left">(h)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>A final, non-appealable arbitration award, judgment, or decree or order for the payment of
money in an amount in excess of $250,000 which is not insured or subject to indemnity, is
entered against Company which is not satisfied, stayed or appealed within 10&nbsp;days;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left">(i)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Company is in default with respect to any bond, debenture, note or other evidence of
indebtedness in an amount in excess of $250,000 issued by Company that is held by any third
Person other than Wells Fargo, or under any instrument under which any such evidence of
indebtedness has been issued or by which it is governed, or under any material lease or other
contract, and the applicable grace period, if any, has expired and the holder of such
indebtedness has the right to accelerate the maturity of such indebtedness;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left">(j)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Company fails to pay any indebtedness or obligation owed to Wells Fargo which is unrelated to
the Line of Credit or this Agreement as it becomes due and payable;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left">(k)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Any Guarantor repudiates or purports to revokes the Guarantor&#146;s Guaranty, or fails to perform
any obligation under such Guaranty, or any individual Guarantor dies or becomes incapacitated,
or any other Guarantor ceases to exist for any reason;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left">(l)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Company engages in any act prohibited by any Subordination Agreement, or makes any payment on
Subordinated Indebtedness (as defined in the Subordination Agreement) or other debt or
obligations that in each case the Subordinated Creditor was not contractually entitled to
receive;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left">(m)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Any event or circumstance occurs that Wells Fargo in good faith believes may impair the
prospect of payment of all or part of the Indebtedness, or Company&#146;s ability to perform
material obligations under any of the Loan Documents or the Master Agreement for Treasury
Management Services, or there occurs any material adverse change in the business or financial
condition of Company;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left">(n)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>The chairman, president or chief financial officer of Company or any Owner of at least forty
percent (40%) of the issued and outstanding common stock or other equity interests of Company
is convicted of a felony under state or federal law;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left">(o)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Any Reportable Event, which Wells Fargo in good faith believes to constitute sufficient
grounds for termination of any Pension Plan or for the appointment of a trustee to administer
any Pension Plan, has occurred and is continuing 30&nbsp;days after Company gives Wells Fargo a
Record notifying it of the Reportable Event; or a trustee is appointed by an appropriate court
to administer any Pension Plan; or the Pension Benefit Guaranty Corporation institutes
proceedings to terminate or appoint a trustee to administer any Pension Plan; or Company or
any ERISA Affiliate files for a distress termination of any Pension Plan under Title IV of
ERISA; or Company or any ERISA Affiliate fails to make any quarterly Pension Plan contribution
required under Section</TD>
</TR>

</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B><I>Credit and Security Agreement</I></B><br>
<B><I>WFBC/Iridex (domestic facility)</I></B>
</DIV>


<P align="center" style="font-size: 10pt"><!-- Folio -->29<!-- /Folio -->
</DIV>

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<DIV style="font-family: Helvetica,Arial,sans-serif">

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>412(m) of the IRC, which Wells Fargo in good faith believes may, either by itself or in
combination with other failures, result in the imposition of a Lien on Company&#146;s assets in
favor of the Pension Plan; or any withdrawal, partial withdrawal, reorganization or other
event occurs with respect to a Multiemployer Plan which could reasonably be expected to
result in a material liability by Company to the Multiemployer Plan under Title IV of
ERISA; or</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left">(p)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Any &#147;Event of Default&#148; occurs under any of the Ex-Im Loan Documents.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left"><B>6.2</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD><B>Rights and Remedies</B>. During any Default Period, Wells Fargo may in its discretion exercise
any or all of the following rights and remedies:</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left">(a)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Wells Fargo may terminate the Line of Credit and decline to make Advances, and terminate any
services extended to Company under the Master Agreement for Treasury Management Services;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left">(b)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Wells Fargo may declare the Indebtedness to be immediately due and payable and accelerate
payment of the Revolving Note, and all Indebtedness shall immediately become due and payable,
without presentment, notice of dishonor, protest or further notice of any kind, all of which
Company hereby expressly waives;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left">(c)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Wells Fargo may, without notice to Company, apply any money owing by Wells Fargo to Company
to payment of the Indebtedness;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left">(d)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Wells Fargo may exercise and enforce any rights and remedies available upon default to a
secured party under the UCC, including the right to take possession of Collateral, proceeding
with or without judicial process (without a prior hearing or notice of hearing, which Company
hereby expressly waives) and sell, lease or otherwise dispose of Collateral for cash or on
credit (with or without giving warranties as to condition, fitness, merchantability or title
to Collateral, and in the event of a credit sale, Indebtedness shall be reduced only to the
extent that payments are actually received), and Company will upon Wells Fargo&#146;s demand
assemble the Collateral and make it available to Wells Fargo at any place designated by Wells
Fargo which is reasonably convenient to both parties;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left">(e)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Wells Fargo may exercise and enforce its rights and remedies under any of the Loan Documents;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left">(f)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Company will pay Wells Fargo upon demand in immediately available funds an amount equal to
the Aggregate Face Amount plus any anticipated costs and fees for deposit to the Special
Account pursuant to Section&nbsp;1.10;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left">(g)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Wells Fargo may for any reason apply for the appointment of a receiver of the Collateral, to
which appointment Company hereby consents; and</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left">(h)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Wells Fargo may exercise any other rights and remedies available to it by law or agreement.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left"><B>6.3</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD><B>Immediate Default and Acceleration</B>. Following the occurrence of an Event of Default
described in Section&nbsp;6.1(e) or (f), the Line of Credit shall immediately</TD>
</TR>

</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B><I>Credit and Security Agreement</I></B><br>
<B><I>WFBC/Iridex (domestic facility)</I></B>
</DIV>


<P align="center" style="font-size: 10pt"><!-- Folio -->30<!-- /Folio -->
</DIV>

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<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="font-family: Helvetica,Arial,sans-serif">

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>terminate and all of Company&#146;s Indebtedness shall immediately become due and payable
without presentment, demand, protest or notice of any kind.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left"><B>7.</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD><B>MISCELLANEOUS</B></TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left"><B>7.1</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD><B>No Waiver; Cumulative Remedies</B>. No delay or any single or partial exercise by Wells Fargo of
any right, power or remedy under the Loan Documents shall constitute a waiver of any other
right, power or remedy under the Loan Documents. No notice to or demand on Company in any
circumstance shall entitle Company to any additional notice or demand in any other
circumstances. The remedies provided in the Loan Documents are cumulative and not exclusive
of any remedies provided by law. Wells Fargo may comply with applicable law in connection
with a disposition of Collateral, and such compliance will not be considered to adversely
affect the commercial reasonableness of any sale of the Collateral.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left"><B>7.2</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD><B>Amendment of Loan Documents; Consents and Waivers; Authentication</B>. No amendment or
modification of any Loan Documents, or consent to or waiver of any Event of Default, or
consent to or waiver of the application of any covenant or representation set forth in any of
the Loan Documents, or any release of Wells Fargo&#146;s Security Interest in any Collateral, shall
be effective unless it has been agreed to by Wells Fargo and memorialized in a Record that:
(a)&nbsp;specifically states that it is intended to amend or modify specific Loan Documents, or
waive any Event of Default or the application of any covenant or representation of any terms
of specific Loan Documents, or is intended to release Wells Fargo&#146;s Security Interest in
specific Collateral; and (b)&nbsp;is Authenticated by the signature of an authorized employee of
both parties, or by an authorized employee of Wells Fargo with respect to a consent or waiver.
The terms of an amendment, consent or waiver memorialized in any Record shall be effective
only to the extent, and in the specific instance, and for the limited purpose to which Wells
Fargo has agreed.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left"><B>7.3</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD><B>Execution in Counterparts; Delivery of Counterparts</B>. This Agreement and all other Loan
Documents, and any amendment or modification to them may be Authenticated by the parties in
any number of counterparts, each of which, once authenticated and delivered in accordance with
the terms of this Section&nbsp;7.3, will be deemed an original, and all such counterparts, taken
together, shall constitute one and the same instrument. Delivery by fax or by encrypted
e-mail or e-mail file attachment of any counterpart to any Loan Document Authenticated by an
authorized signature will be deemed the equivalent of the delivery of the original
Authenticated instrument. Company shall send the original Authenticated counterpart to Wells
Fargo by first class U.S. mail or by overnight courier, but Company&#146;s failure to deliver a
Record in this form shall not affect the validity, enforceability, and binding effect of this
Agreement or the other Loan Documents.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left"><B>7.4</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD><B>Notices, Requests, and Communications; Confidentiality</B>. Except as otherwise expressly
provided in this Agreement:</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left">(a)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD><U>Delivery of Notices, Requests and Communications</U>. Any notice, request, demand, or
other communication by either party that is required under the Loan</TD>
</TR>

</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B><I>Credit and Security Agreement</I></B><br>
<B><I>WFBC/Iridex (domestic facility)</I></B>
</DIV>


<P align="center" style="font-size: 10pt"><!-- Folio -->31<!-- /Folio -->
</DIV>

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<DIV style="font-family: Helvetica,Arial,sans-serif">

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Documents to be in the form of a Record (but excluding any Record containing information
Company must report to Wells Fargo under Section&nbsp;5.1) may be delivered (i)&nbsp;in person,
(ii)&nbsp;by first class U.S. mail, (iii)&nbsp;by overnight courier of national reputation, or (iv)
by fax, or the Record may be sent as an Electronic Record and delivered (v)&nbsp;by an encrypted
e-mail, or (vi)&nbsp;through Wells Fargo&#146;s Commercial Electronic Office&#174; (&#147;CEO&#174;&#148;) portal or
other secure electronic channel to which the parties have agreed.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left">(b)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD><U>Addresses for Delivery</U>. Delivery of any Record under this Section&nbsp;7.4 shall be made
to the appropriate address set forth on the last page of this Agreement (which either party
may modify by a Record sent to the other party), or through Wells Fargo&#146;s CEO portal or other
secure electronic channel to which the parties have agreed.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left">(c)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD><U>Date of Receipt</U>. Each Record sent pursuant to the terms of this Section&nbsp;7.4 will be
deemed to have been received on (i)&nbsp;the date of delivery if delivered in person, (ii)&nbsp;the date
deposited in the mail if sent by mail, (iii)&nbsp;the date delivered to the courier if sent by
overnight courier, (iv)&nbsp;the date of transmission if sent by fax, or (v)&nbsp;the date of
transmission, if sent as an Electronic Record by electronic mail or through Wells Fargo&#146;s CEO
portal or similar secure electronic channel to which the parties have agreed; <U>except
</U>that any request for an Advance or any other notice, request, demand or other
communication from Company required under Section&nbsp;1, and any request for an accounting under
Section&nbsp;9-210 of the UCC, will not be deemed to have been received until actual receipt by
Wells Fargo on a Business Day by an authorized employee of Wells Fargo.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left">(d)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD><U>Confidentiality of Unencrypted E-mail</U>. Company acknowledges that if it sends an
Electronic Record to Wells Fargo without encryption by e-mail or as an e-mail file attachment,
there is a risk that the Electronic Record may be received by unauthorized Persons, and that
by so doing it will be deemed to have accepted this risk and the consequences of any such
unauthorized disclosure.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left"><B>7.5</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD><B>Company Information Reporting; Confidentiality</B>. Except as otherwise expressly provided in
this Agreement:</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left">(a)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD><U>Delivery of Company Information Records</U>. Any information that Company is required to
deliver under Section&nbsp;5.1 in the form of a Record may be delivered to Wells Fargo (i)&nbsp;in
person, or by (ii)&nbsp;first class U.S. mail, (iii)&nbsp;overnight courier of national reputation, or
(iv)&nbsp;fax, or the Record may be sent as an Electronic Record (v)&nbsp;by encrypted e-mail, or (vi)
through the file upload service of Wells Fargo&#146;s CEO portal or other secure electronic channel
to which the parties have agreed.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left">(b)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD><U>Addresses for Delivery</U>. Delivery of any Record to Wells Fargo under this Section&nbsp;7.5
shall be made to the appropriate address set forth on the last page of this Agreement (which
Wells Fargo may modify by a Record sent to Company), or through Wells Fargo&#146;s CEO portal or
other secure electronic channel to which the parties have agreed.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left">(c)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD><U>Date of Receipt</U>. Each Record sent pursuant to this Section will be deemed to have
been received on (i)&nbsp;the date of delivery to an authorized employee of</TD>
</TR>

</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B><I>Credit and Security Agreement</I></B><br>
<B><I>WFBC/Iridex (domestic facility)</I></B>
</DIV>


<P align="center" style="font-size: 10pt"><!-- Folio -->32<!-- /Folio -->
</DIV>

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<DIV style="font-family: Helvetica,Arial,sans-serif">

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Wells Fargo, if delivered in person, or by U.S. mail, overnight courier, fax, or e-mail; or
(ii)&nbsp;the date of transmission, if sent as an Electronic Record through Wells Fargo&#146;s CEO
portal or similar secure electronic channel to which the parties have agreed.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left">(d)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD><U>Authentication of Company Information Records</U>. Company shall Authenticate any Record
delivered (i)&nbsp;in person, or by U.S. mail, overnight courier, or fax, by the signature of the
Officer or employee of Company who prepared the Record; (ii)&nbsp;as an Electronic Record sent via
encrypted e-mail, by the signature of the Officer or employee of Company who prepared the
Record by any file format signature that is acceptable to Wells Fargo, or by a separate
certification signed and sent by fax; or (iii)&nbsp;as an Electronic Record via the file upload
service of Wells Fargo&#146;s CEO portal or similar secure electronic channel to which the parties
have agreed, through such credentialing process as Wells Fargo and Company may agree to under
the CEO agreement.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left">(e)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD><U>Certification of Company Information Records</U>. Any Record (including any Electronic
Record) Authenticated and delivered to Wells Fargo under this Section&nbsp;7.5 will be deemed to
have been certified as materially true, correct, and complete by Company and each Officer or
employee of Company who prepared and Authenticated the Record on behalf of Company, and may be
legally relied upon by Wells Fargo without regard to method of delivery or transmission.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left">(f)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD><U>Confidentiality of Company Information Records Sent by Unencrypted E-mail</U>. Company
acknowledges that if it sends an Electronic Record to Wells Fargo without encryption by e-mail
or as an e-mail file attachment, there is a risk that the Electronic Record may be received by
unauthorized Persons, and that by so doing it will be deemed to have accepted this risk and
the consequences of any such unauthorized disclosure. Company acknowledges that it may
deliver Electronic Records containing Company information to Wells Fargo by e-mail pursuant to
any encryption tool acceptable to Wells Fargo and Company, or through Wells Fargo&#146;s CEO portal
file upload service without risk of unauthorized disclosure.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left"><B>7.6</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD><B>Further Documents</B>. Company will from time to time execute, deliver, endorse and authorize
the filing of any instruments, documents, conveyances, assignments, security agreements,
financing statements, control agreements and other agreements that Wells Fargo may reasonably
request in order to secure, protect, perfect or enforce the Security Interest or Wells Fargo&#146;s
rights under the Loan Documents (but any failure to request or assure that Company executes,
delivers, endorses or authorizes the filing of any such item shall not affect or impair the
validity, sufficiency or enforceability of the Loan Documents and the Security Interest,
regardless of whether any such item was or was not executed, delivered or endorsed in a
similar context or on a prior occasion).</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left"><B>7.7</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD><B>Costs and Expenses</B>. Company shall pay on demand all costs and expenses, including reasonable
attorneys&#146; fees, incurred by Wells Fargo in connection with the Indebtedness, this Agreement,
the Loan Documents, or any other document or agreement related to this Agreement, and the
transactions contemplated by this Agreement, including all such costs, expenses and fees
incurred in</TD>
</TR>

</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B><I>Credit and Security Agreement</I></B><br>
<B><I>WFBC/Iridex (domestic facility)</I></B>
</DIV>


<P align="center" style="font-size: 10pt"><!-- Folio -->33<!-- /Folio -->
</DIV>

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<DIV style="font-family: Helvetica,Arial,sans-serif">

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>connection with the negotiation, preparation, execution, amendment, administration,
performance, collection and enforcement of the Indebtedness and all such documents and
agreements and the creation, perfection, protection, satisfaction, foreclosure or
enforcement of the Security Interest.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left"><B>7.8</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD><B>Indemnity</B>. In addition to its obligation to pay Wells Fargo&#146;s expenses under the terms of
this Agreement, Company shall indemnify, defend and hold harmless Wells Fargo, its parent
Wells Fargo &#038; Company, and any of its affiliates and successors, and all of their present and
future Officers, Directors, employees, attorneys and agents (the &#147;Indemnitees&#148;) from and
against any of the following (collectively, &#147;Indemnified Liabilities&#148;):</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left">(a)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Any and all transfer taxes, documentary taxes, assessments or charges made by any
governmental authority by reason of the execution and delivery of the Loan Documents or the
making of the Advances;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left">(b)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Any claims, loss or damage to which any Indemnitee may be subjected if any representation or
warranty contained in Exhibit&nbsp;D proves to be incorrect in any respect or as a result of any
violation of the covenants contained in Section&nbsp;5.12; and</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left">(c)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Any and all other liabilities, losses, damages, penalties, judgments, suits, claims, costs
and expenses of any kind or nature whatsoever (including the reasonable fees and disbursements
of counsel) in connection with this Agreement and any other investigative, administrative or
judicial proceedings, whether or not such Indemnitee shall be designated a party to such
proceedings, which may be imposed on, incurred by or asserted against any such Indemnitee, in
any manner related to or arising out of or in connection with the making of the Advances and
the Loan Documents or the use or intended use of the proceeds of the Advances, with the
exception of any Indemnified Liability caused by the gross negligence or willful misconduct of
an Indemnitee.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>If any investigative, judicial or administrative proceeding described in this Section is
brought against any Indemnitee, upon the Indemnitee&#146;s request, Company, or counsel
designated by Company and satisfactory to the Indemnitee, will resist and defend the
action, suit or proceeding to the extent and in the manner directed by the Indemnitee, at
Company&#146;s sole cost and expense. Each Indemnitee will use its best efforts to cooperate in
the defense of any such action, suit or proceeding. If this agreement to indemnify is held
to be unenforceable because it violates any law or public policy, Company shall
nevertheless make the maximum contribution to the payment and satisfaction of each of the
Indemnified Liabilities to the extent permissible under applicable law. Company&#146;s
obligations under this Section shall survive the termination of this Agreement and the
discharge of Company&#146;s other obligations under this Agreement.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left"><B>7.9</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD><B>Retention of Company&#146;s Records</B>. Wells Fargo shall have no obligation to maintain Electronic
Records or retain any documents, schedules, invoices, agings, or other Records delivered to
Wells Fargo by Company in connection with the Loan Documents for more than 30&nbsp;days after
receipt by Wells Fargo. If there is a special need to retain specific Records, Company must
notify Wells</TD>
</TR>

</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B><I>Credit and Security Agreement</I></B><br>
<B><I>WFBC/Iridex (domestic facility)</I></B>
</DIV>


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<DIV style="font-family: Helvetica,Arial,sans-serif">

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Fargo of its need to retain or return such Records with particularity, which notice must be
delivered to Wells Fargo in accordance with the terms of this Agreement at the time of the
initial delivery of the Record to Wells Fargo.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left"><B>7.10</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD><B>Binding Effect; Assignment; Complete Agreement</B>. The Loan Documents shall be binding upon and
inure to the benefit of Company and Wells Fargo and their respective successors and assigns,
except that Company shall not have the right to assign its rights under this Agreement or any
interest in this Agreement without Wells Fargo&#146;s prior consent, which must be confirmed in a
Record Authenticated by Wells Fargo. To the extent permitted by law, Company waives and will
not assert against any assignee any claims, defenses or set-offs which Company could assert
against Wells Fargo. This Agreement shall also bind all Persons who become a party to this
Agreement as a borrower. This Agreement, together with the Loan Documents, comprises the
complete and integrated agreement of the parties on the subject matter of this Agreement and
supersedes all prior agreements, whether oral or evidenced in a Record. To the extent that
any provision of this Agreement contradicts other provisions of the Loan Documents other than
this Agreement, this Agreement shall control.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left"><B>7.11</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD><B>Sharing of Information</B>. Wells Fargo may share any information that it may have regarding
Company and its Affiliates with its accountants, lawyers, and other advisors, and Wells Fargo
and each direct and indirect subsidiary of Wells Fargo &#038; Company may also share any
information that they have with each other, and Company waives any right of confidentiality it
may have with respect to the sharing of all such information.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left"><B>7.12</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD><B>Severability of Provisions</B>. Any provision of this Agreement which is prohibited or
unenforceable shall be ineffective to the extent of such prohibition or unenforceability
without invalidating the remaining terms of this Agreement.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left"><B>7.13</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD><B>Headings</B>. Section and subsection headings in this Agreement are included for convenience of
reference only and shall not constitute a part of this Agreement for any other purpose.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left"><B>7.14</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD><B>Governing Law; Jurisdiction, Venue</B>. The Loan Documents shall be governed by and construed in
accordance with the substantive laws (other than conflict laws) of the State of California.
The parties to this Agreement (a)&nbsp;consent to the personal jurisdiction of the state and
federal courts located in the State of California in connection with any controversy related
to this Agreement; (b)&nbsp;waive any argument that venue in any such forum is not convenient;
(c)&nbsp;agree that any litigation initiated by Wells Fargo or Company in connection with this
Agreement or the other Loan Documents may be venued in either the state or federal courts
located in the City of Los Angeles, County of Los Angeles, State of California; and (d)&nbsp;agree
that a final judgment in any such suit, action or proceeding shall be conclusive and may be
enforced in other jurisdictions by suit on the judgment or in any other manner provided by
law.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left"><B>7.15</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD><B>Arbitration</B>.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left">(a)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD><B>Arbitration</B>. The parties hereto agree, upon demand by any party, to submit to binding
arbitration all claims, disputes and controversies between or among</TD>
</TR>

</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B><I>Credit and Security Agreement</I></B><br>
<B><I>WFBC/Iridex (domestic facility)</I></B>
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<DIV style="font-family: Helvetica,Arial,sans-serif">

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>them (and their respective employees, officers, directors, attorneys, and other agents),
whether in tort, contract or otherwise arising out of or relating to in any way (i)&nbsp;the
loan and related Loan Documents which are the subject of this Agreement and its
negotiation, execution, collateralization, administration, repayment, modification,
extension, substitution, formation, inducement, enforcement, default or termination; or
(ii)&nbsp;requests for additional credit.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left">(b)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD><B>Governing Rules</B>. Any arbitration proceeding will (i)&nbsp;proceed in a location in California
selected by the American Arbitration Association (&#147;AAA&#148;); (ii)&nbsp;be governed by the Federal
Arbitration Act (Title 9 of the United States Code), notwithstanding any conflicting choice of
law provision in any of the documents between the parties; and (iii)&nbsp;be conducted by the AAA,
or such other administrator as the parties shall mutually agree upon, in accordance with the
AAA&#146;s commercial dispute resolution procedures, unless the claim or counterclaim is at least
$1,000,000.00 exclusive of claimed interest, arbitration fees and costs in which case the
arbitration shall be conducted in accordance with the AAA&#146;s optional procedures for large,
complex commercial disputes (the commercial dispute resolution procedures or the optional
procedures for large, complex commercial disputes to be referred to, as applicable, as the
&#147;Rules&#148;). If there is any inconsistency between the terms hereof and the Rules, the terms and
procedures set forth herein shall control. Any party who fails or refuses to submit to
arbitration following a demand by any other party shall bear all costs and expenses incurred
by such other party in compelling arbitration of any dispute. Nothing contained herein shall
be deemed to be a waiver by any party that is a bank of the protections afforded to it under
12 U.S.C. &#167;91 or any similar applicable state law.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left">(c)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD><B>No Waiver of Provisional Remedies, Self-Help and Foreclosure</B>. The arbitration requirement
does not limit the right of any party to (i)&nbsp;foreclose against real or personal property
collateral; (ii)&nbsp;exercise self-help remedies relating to collateral or proceeds of collateral
such as setoff or repossession; or (iii)&nbsp;obtain provisional or ancillary remedies such as
replevin, injunctive relief, attachment or the appointment of a receiver, before during or
after the pendency of any arbitration proceeding. This exclusion does not constitute a waiver
of the right or obligation of any party to submit any dispute to arbitration or reference
hereunder, including those arising from the exercise of the actions detailed in sections (i),
(ii)&nbsp;and (iii)&nbsp;of this paragraph.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left">(d)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD><B>Arbitrator Qualifications and Powers</B>. Any arbitration proceeding in which the amount in
controversy is $5,000,000.00 or less will be decided by a single arbitrator selected according
to the Rules, and who shall not render an award of greater than $5,000,000.00. Any dispute in
which the amount in controversy exceeds $5,000,000.00 shall be decided by majority vote of a
panel of three arbitrators; provided however, that all three arbitrators must actively
participate in all hearings and deliberations. The arbitrator will be a neutral attorney
licensed in the State of California or a neutral retired judge of the state or federal
judiciary of California, in either case with a minimum of ten years experience in the
substantive law applicable to the subject matter of the dispute to be arbitrated. The
arbitrator will determine whether or not an issue is arbitratable and will give effect to the
statutes of limitation in determining any claim. In any arbitration proceeding the arbitrator
will decide (by documents</TD>
</TR>

</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B><I>Credit and Security Agreement</I></B><br>
<B><I>WFBC/Iridex (domestic facility)</I></B>
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<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>only or with a hearing at the arbitrator&#146;s discretion) any pre-hearing motions which are
similar to motions to dismiss for failure to state a claim or motions for summary
adjudication. The arbitrator shall resolve all disputes in accordance with the substantive
law of California and may grant any remedy or relief that a court of such state could order
or grant within the scope hereof and such ancillary relief as is necessary to make
effective any award. The arbitrator shall also have the power to award recovery of all
costs and fees, to impose sanctions and to take such other action as the arbitrator deems
necessary to the same extent a judge could pursuant to the Federal Rules of Civil
Procedure, the California Rules of Civil Procedure or other applicable law. Judgment upon
the award rendered by the arbitrator may be entered in any court having jurisdiction. The
institution and maintenance of an action for judicial relief or pursuit of a provisional or
ancillary remedy shall not constitute a waiver of the right of any party, including the
plaintiff, to submit the controversy or claim to arbitration if any other party contests
such action for judicial relief.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left">(e)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD><B>Discovery</B>. In any arbitration proceeding discovery will be permitted in accordance with the
Rules. All discovery shall be expressly limited to matters directly relevant to the dispute
being arbitrated and must be completed no later than 20&nbsp;days before the hearing date and
within 180&nbsp;days of the filing of the dispute with the AAA. Any requests for an extension of
the discovery periods, or any discovery disputes, will be subject to final determination by
the arbitrator upon a showing that the request for discovery is essential for the party&#146;s
presentation and that no alternative means for obtaining information is available.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left">(f)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD><B>Class&nbsp;Proceedings and Consolidations</B>. The resolution of any dispute arising pursuant to the
terms of this Agreement shall be determined by a separate arbitration proceeding and such
dispute shall not be consolidated with other disputes or included in any class proceeding.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left">(g)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD><B>Payment Of Arbitration Costs And Fees</B>. The arbitrator shall award all costs and expenses of
the arbitration proceeding.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left">(h)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD><B>Real Property Collateral; Judicial Reference</B>. Notwithstanding anything herein to the
contrary, no dispute shall be submitted to arbitration if the dispute concerns indebtedness
secured directly or indirectly, in whole or in part, by any real property unless (i)&nbsp;the
holder of the mortgage, lien or security interest specifically elects in writing to proceed
with the arbitration, or (ii)&nbsp;all parties to the arbitration waive any rights or benefits that
might accrue to them by virtue of the single action rule statute of California, thereby
agreeing that all indebtedness and obligations of the parties, and all mortgages, liens and
security interests securing such indebtedness and obligations, shall remain fully valid and
enforceable. If any such dispute is not submitted to arbitration, the dispute shall be
referred to a referee in accordance with California Code of Civil Procedure Section&nbsp;638 et
seq., and this general reference agreement is intended to be specifically enforceable in
accordance with said Section&nbsp;638. A referee with the qualifications required herein for
arbitrators shall be selected pursuant to the AAA&#146;s selection procedures. Judgment upon the
decision rendered by a referee shall be entered in the court in which such proceeding</TD>
</TR>

</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B><I>Credit and Security Agreement</I></B><br>
<B><I>WFBC/Iridex (domestic facility)</I></B>
</DIV>


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<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>was commenced in accordance with California Code of Civil Procedure Sections&nbsp;644 and 645.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left">(i)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD><B>Miscellaneous</B>. To the maximum extent practicable, the AAA, the arbitrators and the parties
shall take all action required to conclude any arbitration proceeding within 180&nbsp;days of the
filing of the dispute with the AAA. No arbitrator or other party to an arbitration proceeding
may disclose the existence, content or results thereof, except for disclosures of information
by a party required in the ordinary course of its business or by applicable law or regulation.
If more than one agreement for arbitration by or between the parties potentially applies to a
dispute, the arbitration provision most directly related to the Loan Documents or the subject
matter of the dispute shall control. This arbitration provision shall survive termination,
amendment or expiration of any of the Loan Documents or any relationship between the parties.</TD>
</TR>

</TABLE>
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 18pt">&#091;signatures on next page&#093;
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B><I>Credit and Security Agreement</I></B><br>
<B><I>WFBC/Iridex (domestic facility)</I></B>
</DIV>



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<DIV style="font-family: Helvetica,Arial,sans-serif">

<DIV style="font-size: 10pt; margin-top: 6pt">COMPANY AND WELLS FARGO HAVE EXECUTED THIS AGREEMENT THROUGH THEIR AUTHORIZED OFFICERS AS OF THE
DATE SET FORTH ABOVE.
</DIV>

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="45%">&nbsp;</TD>
    <TD width="10%">&nbsp;</TD>
    <TD width="45%">&nbsp;</TD>
</TR>
<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom">
    <TD valign="top"><B>WELLS FARGO BANK,</B></TD>
    <TD>&nbsp;</TD>
    <TD valign="top"><B>IRIDEX CORPORATION</B></TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><B>NATIONAL ASSOCIATION</B></TD>
    <TD>&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">

<TD valign="top">By:&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;/s/ Jorge Visitacion</TD>
    <TD>&nbsp;</TD>

<TD valign="top">By:&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;/s/&nbsp;James Mackaness</TD>
</TR>
<TR valign="bottom" style="font-size: 1pt">
    <TD valign="top" align="right"><DIV style="width: 90%; border-top: 1px solid #000000; font-size: 1px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="top"><DIV style="width: 90%; border-top: 1px solid #000000; font-size: 1px">&nbsp;</DIV></TD>
</TR>
<TR valign="bottom">

<TD valign="top">Print
Name:&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Jorge Visitacion</TD>
    <TD>&nbsp;</TD>
    <TD valign="top">Print Name:&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;James Mackaness</TD>
</TR>
<TR valign="bottom" style="font-size: 1pt">
    <TD valign="top" align="right"><DIV style="width: 75%; border-top: 1px solid #000000; font-size: 1px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="top"><DIV style="width: 75%; border-top: 1px solid #000000; font-size: 1px">&nbsp;</DIV></TD>
</TR>
<TR valign="bottom">

<TD valign="top">Title:&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;AVP
+ Relationship Manager</TD>
    <TD>&nbsp;</TD>

<TD valign="top">Title:&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;CFO</TD>
</TR>
<TR valign="bottom" style="font-size: 1pt">
    <TD valign="top" align="right"><DIV style="width: 85%; border-top: 1px solid #000000; font-size: 1px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="top"><DIV style="width: 85%; border-top: 1px solid #000000; font-size: 1px">&nbsp;</DIV></TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><B>Wells Fargo Bank, National Association</B></TD>
    <TD>&nbsp;</TD>
    <TD valign="top"><B>IRIDEX Corporation</B></TD>
</TR>
<TR valign="bottom">
    <TD valign="top">245 Los Robles Avenue, Suite&nbsp;700</TD>
    <TD>&nbsp;</TD>
    <TD valign="top">1212 Terra Bella Avenue</TD>
</TR>
<TR valign="bottom">
    <TD valign="top">Pasadena, California 91101</TD>
    <TD>&nbsp;</TD>
    <TD valign="top">Mountain View, California 94043</TD>
</TR>
<TR valign="bottom">
    <TD valign="top">Fax: 626.844.9063</TD>
    <TD>&nbsp;</TD>
    <TD valign="top">Fax: <U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U><U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U></TD>
</TR>
<TR valign="bottom">
    <TD valign="top">Attention: Jorge Visitacion</TD>
    <TD>&nbsp;</TD>
    <TD valign="top">Attention: James Mackaness</TD>
</TR>
<TR valign="bottom">
    <TD valign="top">e-mail: <u>jorge.c.visitacion@wellsfargo.com </u></TD>
    <TD>&nbsp;</TD>
    <TD valign="top">e-mail: <U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U><U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U></TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD valign="top">Federal Employer</TD>
</TR>
<TR valign="bottom">
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD valign="top">Identification No.: <U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U><U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U></TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD valign="top">Organizational<BR>
 Identification No.: <U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U><U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U></TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>


<DIV style="font-size: 10pt; margin-top: 12pt"><B><I>Credit and Security Agreement</I></B><br>
<B><I>WFBC/Iridex (domestic facility)</I></B>
</DIV>



<P align="center" style="font-size: 10pt"><!-- Folio -->S-1<!-- /Folio -->
</DIV>



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<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>
<DIV style="font-family: Helvetica,Arial,sans-serif">


<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>Exhibit&nbsp;A to Credit and Security Agreement</B>
</DIV>


<DIV align="Center" style="font-size: 10pt; margin-top: 6pt"><U><B>DEFINITIONS</B></U>

</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&#147;Account Funds&#148; is defined in Section&nbsp;1.4(a).
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&#147;Accounts&#148; shall have the meaning given it under the UCC.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&#147;Advance&#148; and &#147;Advances&#148; means an advance or advances under the Line of Credit.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&#147;Affiliate&#148; or &#147;Affiliates&#148; means any Person controlled by, controlling or under common control
with Company, including any Subsidiary of Company. For purposes of this definition, &#147;control,&#148;
when used with respect to any specified Person, means the power to direct the management and
policies of such Person, directly or indirectly, whether through the ownership of voting
securities, by contract or otherwise.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&#147;Aggregate Face Amount&#148; means the aggregate amount that may then be drawn under each outstanding
Letter of Credit, assuming compliance with all conditions for drawing.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&#147;Agreement&#148; means this Credit and Security Agreement.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&#147;Authenticated&#148; means (a)&nbsp;to have signed; or (b)&nbsp;to have executed or to have otherwise adopted a
symbol, or have encrypted or similarly processed a Record in whole or in part, with the present
intent of the authenticating Person to identify the Person and adopt or accept a Record.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&#147;Borrowing Base&#148; is defined in Section&nbsp;1.2(a).
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&#147;Borrowing Base Reserve&#148; means, as of any date of determination, an amount or a percent of a
specified category or item that Wells Fargo establishes in its sole discretion from time to time to
reduce availability under the Borrowing Base (a)&nbsp;to reflect events, conditions, contingencies or
risks which affect the assets, business or prospects of Company, or the Collateral or its value, or
the enforceability, perfection or priority of Wells Fargo&#146;s Security Interest in the Collateral, as
the term &#147;Collateral&#148; is defined in this Agreement, or (b)&nbsp;to reflect Wells Fargo&#146;s judgment that
any collateral report or financial information relating to Company and furnished to Wells Fargo may
be incomplete, inaccurate or misleading in any material respect.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&#147;Business Day&#148; means a day on which the Federal Reserve Bank of New York is open for business and,
if such day relates to a LIBOR Advance, a day on which dealings are carried on in the London
interbank eurodollar market.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&#147;Capital Expenditures&#148; means for a period, any expenditure of money during such period for the
lease, purchase or other acquisition of any capital asset, or for the lease of any other asset
whether payable currently or in the future.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&#147;CEO&#148; is defined in Section&nbsp;7.4(a).
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&#147;Change of Control&#148; means the occurrence of any of the following events:
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left">(a)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Any Person or &#147;group&#148; (as such term is used in Sections 13(d) and 14(d) of the Securities
Exchange Act of 1934) is or becomes the &#147;beneficial owner&#148; (as defined in Rules&nbsp;13d-3 and
13d-5 under the Securities Exchange Act of 1934, except that any such</TD>
</TR>

</TABLE>
</DIV>
<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B><I>Credit and Security Agreement<br>
WFBC/Iridex (domestic facility)</I></B>

</DIV>


<P align="center" style="font-size: 10pt"><!-- Folio -->Exhibit A &#151; Page 1<!-- /Folio -->
</DIV>

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<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="font-family: Helvetica,Arial,sans-serif">


<DIV style="margin-top: 6pt"><TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">


<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Person, entity or group will be deemed to have &#147;beneficial ownership&#148; of all securities that
such Person, entity or group has the right to acquire, whether such right is exercisable
immediately or only after the passage of time), directly or indirectly, of more than
thirty-three and one-third percent (33.33%) of the voting power of all classes of ownership
of Company;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left">(b)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>During any consecutive two-year period, individuals who at the beginning of such period
constituted the board of Directors of Company (together with any new Directors whose election
to such board of Directors, or whose nomination for election by the Owners of Company, was
approved by a vote of two thirds of the Directors then still in office who were either
Directors at the beginning of such period or whose election or nomination for election was
previously so approved) cease for any reason to constitute a majority of the board of
Directors of Company then in office.</TD>
</TR>

</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&#147;Collateral&#148; means all of Company&#146;s Accounts, chattel paper and electronic chattel paper, deposit
accounts, documents, Equipment, General Intangibles, goods, instruments, Inventory, Investment
Property, letter-of-credit rights, letters of credit, all sums on deposit in any Collection
Account, and any items in any Lockbox; together with (a)&nbsp;all substitutions and replacements for and
products of such property; (b)&nbsp;in the case of all goods, all accessions; (c)&nbsp;all accessories,
attachments, parts, Equipment and repairs now or subsequently attached or affixed to or used in
connection with any goods; (d)&nbsp;all warehouse receipts, bills of lading and other documents of title
that cover such goods now or in the future; (e)&nbsp;all collateral subject to the Lien of any of the
Security Documents; (f)&nbsp;any money, or other assets of Company that come into the possession,
custody, or control of Wells Fargo now or in the future; (g)&nbsp;Proceeds of any of the above
Collateral; (h)&nbsp;books and records of Company, including all mail or e-mail addressed to Company;
and (i)&nbsp;all of the above Collateral, whether now owned or existing or acquired now or in the future
or in which Company has rights now or in the future; provided, however, that the term &#147;Collateral&#148;
shall not include more than 66% of the stock of any Subsidiary that is a &#147;controlled foreign
corporation&#148; as defined in the U.S. Internal Revenue Code.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&#147;Closing Date&#148; is defined in Section&nbsp;3.1.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&#147;Collection Account&#148; means &#147;Collection Account&#148; as defined in the Master Agreement for Treasury
Management Services and related Lockbox and Collection Account Service Description or Collection
Account Service Description, whichever is applicable. .
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&#147;Compliance Certificate&#148; is defined in Section&nbsp;5.1(a) and is in the form of Exhibit&nbsp;E.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&#147;Commercial Letter of Credit Agreement&#148; means an agreement governing the issuance of documentary
letters of credit entered into between Company as applicant and Wells Fargo as issuer.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&#147;Constituent Documents&#148; means with respect to any Person, as applicable, that Person&#146;s certificate
of incorporation, articles of incorporation, by-laws, certificate of formation, articles of
organization, limited liability company agreement, management agreement, operating agreement,
shareholder agreement, partnership agreement or similar document or agreement governing such
Person&#146;s existence, organization or management or concerning disposition of ownership interests of
such Person or voting rights among such Person&#146;s owners.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B><I>Credit and Security Agreement<BR>
WFBC/Iridex (domestic facility)</I></B>

</DIV>


<P align="center" style="font-size: 10pt"><!-- Folio -->Exhibit A &#151; Page 2<!-- /Folio -->
</DIV>

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<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="font-family: Helvetica,Arial,sans-serif">

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&#147;Current Maturities of Long Term Debt&#148; means, during a period beginning and ending on designated
dates, the amount of Company&#146;s long-term debt and capitalized leases which become due during that
period.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&#147;Debt&#148; means, as applied to any Person, (a)&nbsp;all obligations for borrowed money, (b)&nbsp;all obligations
evidenced by bonds, debentures, notes, or other similar instruments and all reimbursement or other
obligations in respect of letters of credit, bankers acceptances, hedges, derivatives, or other
financial products, (c)&nbsp;all obligations as a lessee under leases required to be capitalized in
accordance with GAAP, (d)&nbsp;all obligations or liabilities of others secured by a Lien on any asset
of such Person or its Subsidiaries, irrespective of whether such obligation or liability is
assumed, (e)&nbsp;all obligations of such Person to pay the deferred purchase price of assets (other
than trade payables incurred in the ordinary course of business and repayable in accordance with
customary trade practices), (f)&nbsp;all obligations of such Person owing under swap, cap, floor, collar
or similar hedging arrangements, and (g)&nbsp;any obligation guaranteeing or intended to guarantee
(whether directly or indirectly guaranteed, endorsed, co-made, discounted, or sold with recourse)
any obligation of any other Person that constitutes Indebtedness under any of clauses (a)&nbsp;through
(f)&nbsp;above.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&#147;Debt Service Coverage Ratio&#148; means (a)&nbsp;the sum of (i)&nbsp;Funds from Operations, plus (ii)&nbsp;Interest
Expense, minus (iii)&nbsp;unfinanced Capital Expenditures, plus (iv)&nbsp;to the extent not included in Net
Income, cash payments received by Company under that certain Settlement Agreement, dated April&nbsp;6,
2007, among Company, Synergetics, Inc., and Synergetics USA, Inc., <B><I>divided by </I></B>(b)&nbsp;the sum of
(i)&nbsp;monthly contractual debt payments paid or payable to American Medical Systems, (ii)&nbsp;other
Current Maturities of Long Term Debt, (iii)&nbsp;Interest Expense, (iv)&nbsp;any cash dividends or
distributions paid or payable, and (v)&nbsp;any amounts paid to redeem or repurchase stock or other
equity interests of Company.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&#147;Default Period&#148; is defined in Section&nbsp;1.6(c).
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&#147;Default Rate&#148; is defined in Section&nbsp;1.6(c).
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&#147;Dilution&#148; means, as of any date of determination, a percentage, based upon the prior six (6)
months, which is the result of dividing (a)&nbsp;actual bad debt write-downs, discounts, advertising
allowances, credits, and any other items with respect to the Accounts determined to be dilutive by
Wells Fargo in its sole discretion during this period, by (b)&nbsp;Company&#146;s net sales during such
period (excluding extraordinary items) plus the amount of clause (a).
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&#147;Director&#148; means a director if Company is a corporation.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&#147;Dollars&#148; or &#147;$&#148; shall mean the lawful currency of the United States.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&#147;Earnings Before Taxes, Depreciation, and Amortization&#148; means Company&#146;s pretax earnings from
operations, excluding extraordinary gains, but including extraordinary losses, as determined prior
to deduction for depreciation and amortization.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&#147;Electronic Record&#148; means a Record that is created, generated, sent, communicated, received, or
stored by electronic means, but <U>does not</U> include any Record that is sent, communicated, or
received by fax.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B><I>Credit and Security Agreement<BR>
WFBC/Iridex (domestic facility)</I></B>

</DIV>


<P align="center" style="font-size: 10pt"><!-- Folio -->Exhibit A &#151; Page 3<!-- /Folio -->
</DIV>

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<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="font-family: Helvetica,Arial,sans-serif">

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&#147;Eligible Accounts&#148; means all unpaid Accounts of Company arising from the sale or lease of goods or
the performance of services, net of any credits, but excluding any Accounts having any of the
following characteristics:
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left">(a)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>That portion of Accounts unpaid 90&nbsp;days or more after the invoice date;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left">(b)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>That portion of Accounts related to goods or services with respect to which Company has
received notice of a claim or dispute, which are subject to a claim of offset or a contra
account, or which reflect a reasonable reserve for warranty claims or returns;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left">(c)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>That portion of Accounts not yet earned by the final delivery of goods or that portion of
Accounts not yet earned by the final rendition of services by Company to the account debtor,
including with respect to both goods and services, progress billings, and that portion of
Accounts for which an invoice has not been sent to the applicable account debtor;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left">(d)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Accounts owed by any unit of government, whether foreign or domestic (except that there shall
be included in Eligible Accounts that portion of Accounts owed by such units of government for
which Company has provided evidence satisfactory to Wells Fargo that (i)&nbsp;Wells Fargo&#146;s
Security Interest constitutes a perfected first priority Lien in such Accounts, and (ii)&nbsp;such
Accounts may be enforced by Wells Fargo directly against such unit of government under all
applicable laws);</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left">(e)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Accounts denominated in any currency other than United States Dollars;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left">(f)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Accounts owed by an account debtor located outside the United States or Canada which are not
(i)&nbsp;backed by a bank letter of credit naming Wells Fargo as beneficiary or assigned to Wells
Fargo, in Wells Fargo&#146;s possession or control, and with respect to which a control agreement
concerning the letter-of-credit rights is in effect, and acceptable to Wells Fargo in all
respects, in its sole discretion, or (ii)&nbsp;covered by a foreign receivables insurance policy
acceptable to Wells Fargo in its sole discretion;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left">(g)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Accounts owed by an account debtor that is insolvent, the subject of bankruptcy proceedings
or has gone out of business;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left">(h)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Accounts owed by an Owner, Subsidiary, Affiliate, Officer or employee of Company;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left">(i)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Accounts not subject to the Security Interest or which are subject to any Lien in favor of
any Person other than Wells Fargo;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left">(j)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>That portion of Accounts that has been restructured, extended, amended or modified;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left">(k)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>That portion of Accounts that constitutes advertising, finance charges, service charges or
sales or excise taxes;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left">(l)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>That portion of Accounts owed by an account debtor, regardless of whether otherwise eligible,
to the extent that the aggregate balance of such Accounts exceeds 15% of the aggregate amount
of all Eligible Accounts;</TD>
</TR>

</TABLE>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B><I>Credit and Security Agreement<BR>
WFBC/Iridex (domestic facility)</I></B>

</DIV>


<P align="center" style="font-size: 10pt"><!-- Folio -->Exhibit A &#151; Page 4<!-- /Folio -->
</DIV>

<!-- PAGEBREAK -->
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<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="font-family: Helvetica,Arial,sans-serif">


<DIV style="margin-top: 6pt"><TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">


<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left">(m)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Accounts owed by an account debtor, regardless of whether otherwise eligible, if 25% or more
of the total amount of Accounts due from such debtor is ineligible under clauses&nbsp;(a), (b), or
(k)&nbsp;above;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left">(n)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Any Accounts deemed to be &#147;Eligible Accounts&#148; under the Ex-Im Credit Agreement; and</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left">(o)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Accounts, or portions of Accounts, otherwise deemed ineligible by Wells Fargo in its sole
discretion.</TD>
</TR>

</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&#147;Eligible Inventory&#148; means all Inventory of Company, valued at the lower of cost or market in
accordance with GAAP; but excluding Inventory having any of the following characteristics:
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left">(a)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Inventory that is: in-transit; located at any warehouse, job site or other premises not
approved by Wells Fargo in an Authenticated Record delivered to Company; not subject to a
perfected first priority Lien in Wells Fargo&#146;s favor; subject to any Lien or encumbrance that
is subordinate to Wells Fargo&#146;s first priority Lien; covered by any negotiable or
non-negotiable warehouse receipt, bill of lading or other document of title; on consignment
from any consignor; or on consignment to any consignee or subject to any bailment unless the
consignee or bailee has executed an agreement with Wells Fargo;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left">(b)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Supplies, packaging, parts or sample Inventory, or customer supplied parts or Inventory;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left">(c)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Work-in-process Inventory;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left">(d)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Inventory that is damaged, defective, obsolete, slow moving or not currently saleable in the
normal course of Company&#146;s operations, or the amount of such Inventory that has been reduced
by shrinkage;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left">(e)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Inventory that Company has returned, has attempted to return, is in the process of returning
or intends to return to the vendor of the Inventory;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left">(f)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Inventory that is perishable or live;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left">(g)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Inventory manufactured by Company pursuant to a license unless the applicable licensor has
agreed in a Record that has been Authenticated by licensor to permit Wells Fargo to exercise
its rights and remedies against such Inventory;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left">(h)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Inventory that is subject to a Lien in favor of any Person other than Wells Fargo;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left">(i)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Inventory stored at locations holding less than 10% of the aggregate value of Company&#146;s
Inventory;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left">(j)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Inventory that is deemed to be &#147;Eligible Inventory&#148; under the Ex-Im Credit Agreement; and</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left">(k)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Inventory otherwise deemed ineligible by Wells Fargo in its sole discretion.</TD>
</TR>

</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&#147;Environmental Law&#148; means any federal, state, local or other governmental statute, regulation, law
or ordinance dealing with the protection of human health and the environment.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B><I>Credit and Security Agreement<BR>
WFBC/Iridex (domestic facility)</I></B>

</DIV>


<P align="center" style="font-size: 10pt"><!-- Folio -->Exhibit A &#151; Page 5<!-- /Folio -->
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="font-family: Helvetica,Arial,sans-serif">

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&#147;Equipment&#148; shall have the meaning given it under the Uniform Commercial Code in effect in the
state whose laws govern this Agreement.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&#147;ERISA&#148; means the Employee Retirement Income Security Act of 1974, as amended from time to time.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&#147;ERISA Affiliate&#148; means any trade or business (whether or not incorporated) that is a member of a
group which includes Company and which is treated as a single employer under Section&nbsp;414 of the
IRC.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&#147;Event of Default&#148; is defined in Section&nbsp;6.1.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&#147;Ex-Im Credit Agreement&#148; means that certain Credit and Security Agreement (Ex-Im Subfacility),
between the Company and Wells Fargo of even date with this Agreement.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&#147;Ex-Im Loan Documents&#148; means the Ex-Im Credit Agreement and all other documents, agreements,
instruments, and certificates now or hereafter executed or provided in connection with the Ex-Im
Credit Agreement.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&#147;Floating Rate&#148; is defined in Section&nbsp;1.6(a).
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&#147;Floating Rate Advance&#148; means an Advance bearing interest at the Floating Rate.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&#147;Funds from Operations&#148; means for a given period, the sum of (a)&nbsp;Net Income, (b)&nbsp;depreciation and
amortization, (c)&nbsp;stock-based compensation expenses, (d)&nbsp;any increase (or decrease) in lifo
reserves, each as determined for such period in accordance with GAAP, and (e)&nbsp;during the period
April&nbsp;1, 2008 to December&nbsp;31, 2008, an amount equal to the value (based on cost) of inventory sold
during the relevant measurement period, less an amount equal to the product of the applicable
advance rate (set forth in Section&nbsp;1.2) for such inventory multiplied by such inventory sold.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&#147;GAAP&#148; means generally accepted accounting principles, applied on a basis consistent with the
accounting practices applied in the financial statements described on Exhibit&nbsp;D.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&#147;General Intangibles&#148; shall have the meaning given it under the UCC.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&#147;Guarantor(s)&#148; means any Person now or in the future guaranteeing the Indebtedness through the
issuance of a Guaranty.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&#147;Guaranty&#148; means an unconditional continuing guaranty executed by a Guarantor in favor of Wells
Fargo (if more than one, the &#147;Guaranties&#148;).
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&#147;Hazardous Substances&#148; means pollutants, contaminants, hazardous substances, hazardous wastes,
petroleum and fractions thereof, and all other chemicals, wastes, substances and materials listed
in, regulated by or identified in any Environmental Law.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&#147;Indebtedness&#148; is used in its most comprehensive sense and means any debts, obligations and
liabilities of Company to Wells Fargo, whether incurred in the past, present or future, whether
voluntary or involuntary, and however arising, and whether due or not due, absolute or contingent,
liquidated or unliquidated, determined or undetermined, and including without limitation
indebtedness arising under any swap, derivative, foreign exchange, hedge, deposit,
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B><I>Credit and Security Agreement<BR>
WFBC/Iridex (domestic facility)</I></B>

</DIV>


<P align="center" style="font-size: 10pt"><!-- Folio -->Exhibit A &#151; Page 6<!-- /Folio -->
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="font-family: Helvetica,Arial,sans-serif">



<DIV align="left" style="font-size: 10pt; margin-top: 6pt">treasury management or any similar transaction or arrangement that Company may enter into at any
time with Wells Fargo or with Wells Fargo Merchant Services, L.L.C., whether or not Company may be
liable individually or jointly with others, or whether recovery upon such Indebtedness may
subsequently become unenforceable.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&#147;Indemnified Liabilities&#148; is defined in Section&nbsp;7.8.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&#147;Indemnitees&#148; is defined in Section&nbsp;7.8.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&#147;Infringement&#148; or &#147;Infringing&#148; when used with respect to Intellectual Property Rights means any
infringement or other violation of Intellectual Property Rights.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&#147;Intellectual Property Rights&#148; means all actual or prospective rights arising in connection with
any intellectual property or other proprietary rights, including all rights arising in connection
with copyrights, patents, service marks, trade dress, trade secrets, trademarks, trade names or
mask works.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&#147;Interest Expense&#148; means for any period, Company&#146;s total gross interest expense during such period
(excluding interest income), and shall in any event include (a)&nbsp;interest expensed (whether or not
paid) on all Debt, (b)&nbsp;the amortization of debt discounts, (c)&nbsp;the amortization of all fees payable
in connection with the incurrence of Debt to the extent included in interest expense, and (d)&nbsp;the
portion of any capitalized lease obligation allocable to interest expense.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&#147;Interest Payment Date&#148; is defined in Section&nbsp;1.8(a).
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&#147;Interest Period&#148; means the period that commences on (and includes) the Business Day on which
either a LIBOR Advance is made or continued or on which a Floating Rate Advance is converted to a
LIBOR Advance, and ending on (but excluding) the Business Day numerically corresponding to that
date that falls the number of months afterward as selected by Company pursuant to Section&nbsp;1.3A,
during which period the outstanding principal amount of the LIBOR Advance shall bear interest at
the LIBOR Advance Rate; <U>provided</U>, <U>however</U>, that:
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left">(a)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>If an Interest Period would otherwise end on a day which is not a Business Day, then it shall
end on the next Business Day, unless that day is the first Business Day of a month, in which
case the Interest Period shall end on the last Business Day of the preceding month;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left">(b)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>No Interest Period applicable to an Advance may end later than the Maturity Date; and</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left">(c)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>In no event shall Company select Interest Periods with respect to LIBOR Advances which would
result in the payment of a LIBOR Advance breakage fee under this Agreement in order to make
required principal payments.</TD>
</TR>

</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&#147;Inventory&#148; shall have the meaning given it under the UCC.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&#147;Investment Property&#148; shall have the meaning given it under the UCC.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&#147;L/C Amount&#148; means the sum of (a)&nbsp;the Aggregate Face Amount of any outstanding Letters of Credit,
plus (b)&nbsp;the amount of each Obligation of Reimbursement that either remains unreimbursed or has not
been paid through an Advance on the Line of Credit.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B><I>Credit and Security Agreement<BR>
WFBC/Iridex (domestic facility)</I></B>

</DIV>


<P align="center" style="font-size: 10pt"><!-- Folio -->Exhibit A &#151; Page 7<!-- /Folio -->
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="font-family: Helvetica,Arial,sans-serif">

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&#147;L/C Application&#148; means an application for the issuance of standby or documentary Letters of Credit
pursuant to the terms of a Standby Letter of Credit Agreement or Commercial Letter of Credit
Agreement, in form acceptable to Wells Fargo.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&#147;Letter of Credit&#148; and &#147;Letters of Credit&#148; are each defined in Section&nbsp;1.10(a).
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&#147;Licensed Intellectual Property&#148; is defined in Exhibit&nbsp;D.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&#147;LIBOR&#148; means the rate per annum (rounded upward, if necessary, to the nearest whole
1/8<SUP style="font-size: 85%; vertical-align: text-top">th</SUP> of one percent (1%)) determined pursuant to the following formula:
</DIV>
<DIV align="right">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="95%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="8%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="25%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="34%">&nbsp;</TD>
</TR>
<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">LIBOR =
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">Base LIBOR
<DIV style="font-size: 1pt; border-top: 1px solid #000000">&nbsp;</DIV>
100% &#151; LIBOR Reserve Percentage
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>


<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left">(a)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>&#147;Base LIBOR&#148; means the rate per annum for United States dollar deposits quoted by Wells Fargo
as the Inter-Bank Market Offered Rate, with the understanding that such rate is quoted by
Wells Fargo for the purpose of calculating effective rates of interest for loans making
reference to it, on the first day of an Interest Period for delivery of funds on that date for
a period of time approximately equal to the number of days in that Interest Period and in an
amount approximately equal to the principal amount to which that Interest Period applies.
Company understands and agrees that Wells Fargo may base its quotation of the Inter-Bank
Market Offered Rate upon such offers or other market indicators of the Inter-Bank Market as
Wells Fargo in its discretion deems appropriate including the rate offered for U.S. dollar
deposits on the London Inter-Bank Market.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left">(b)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>&#147;LIBOR Reserve Percentage&#148; means the reserve percentage prescribed by the Board of Governors
of the Federal Reserve System (or any successor) for &#147;Eurocurrency Liabilities&#148; (as defined in
Regulation&nbsp;D of the Federal Reserve Board, as amended), adjusted by Wells Fargo for expected
changes in such reserve percentage during the applicable Interest Period.</TD>
</TR>

</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&#147;LIBOR Advance&#148; means an Advance bearing interest at the LIBOR Advance Rate.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&#147;LIBOR Advance Rate&#148; is defined in Section&nbsp;1.6(a).
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&#147;Lien&#148; means any security interest, mortgage, deed of trust, pledge, lien, charge, encumbrance,
title retention agreement or analogous instrument or device, including the interest of each lessor
under any capitalized lease and the interest of any bondsman under any payment or performance bond,
in, of or on any assets or properties of a Person, whether now owned or subsequently acquired and
whether arising by agreement or operation of law.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&#147;Line of Credit&#148; is defined in the Recitals.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&#147;Loan Documents&#148; means this Agreement, the Revolving Note, each Guaranty, each Subordination
Agreement, each Patent and Trademark Security Agreement, each Standby Letter of Credit Agreement,
each Commercial Letter of Credit Agreement, any L/C Applications, and the Security Documents,
together with every other agreement, note, document, contract or instrument to which Company now or
in the future may be a party and which may be required by Wells Fargo.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B><I>Credit and Security Agreement<BR>
WFBC/Iridex (domestic facility)</I></B>

</DIV>


<P align="center" style="font-size: 10pt"><!-- Folio -->Exhibit A &#151; Page 8<!-- /Folio -->
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="font-family: Helvetica,Arial,sans-serif">

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&#147;Loan Manager&#148; means the treasury management service defined in the Master Agreement for Treasury
Management Services and related Loan Manager Service Description.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&#147;Lockbox&#148; means &#147;Lockbox&#148; as defined in the Master Agreement for Treasury Management Services and
related Lockbox and Collection Account Service Description.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&#148;Margin&#148; means a rate per annum, expressed as a percentage, as more fully described in Section
1.6(a).
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&#147;Master Agreement for Treasury Management Services&#148; means the Master Agreement for Treasury
Management Services, the related Acceptance of Services, and the Service Description governing each
treasury management service used by Company.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&#147;Material Adverse Effect&#148; means any of the following:
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left">(a)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>A material adverse effect on the business, operations, results of operations, assets,
liabilities or financial condition of Company;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left">(b)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>A material adverse effect on the ability of Company to perform its obligations under the Loan
Documents; or</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left">(c)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>A material adverse effect on the ability of Wells Fargo to enforce the Indebtedness or to
realize the intended benefits of the Security Documents, including a material adverse effect
on the validity or enforceability of any Loan Document or of any rights against any Guarantor,
or on the status, existence, perfection, priority (subject to Permitted Liens) or
enforceability of any Lien securing payment or performance of the Indebtedness.</TD>
</TR>

</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&#147;Maturity Date&#148; is defined in Section&nbsp;1.1(b).
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&#147;Maximum Line Amount&#148; is defined in Section&nbsp;1.1(a).
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&#147;Minimum Interest Charge&#148; is defined in Section&nbsp;1.6(b).
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&#147;Multiemployer Plan&#148; means a multiemployer plan (as defined in Section&nbsp;4001(a)(3) of ERISA) to
which Company or any ERISA Affiliate contributes or is obligated to contribute.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&#147;Net Income&#148; means fiscal year-to-date after-tax net income from continuing operations, including
extraordinary losses but excluding extraordinary gains, all as determined in accordance with GAAP.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&#147;Obligation of Reimbursement&#148; is defined in Section&nbsp;1.10(b).
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&#147;OFAC&#148; is defined in Section&nbsp;5.12(b).
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&#147;Officer&#148; means with respect to Company, an officer of the Company.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&#147;Operating Account&#148; is defined in Section&nbsp;1.3(a), and maintained in accordance with the terms of
Wells Fargo&#146;s Commercial Account Agreement in effect for demand deposit accounts.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&#147;Overadvance&#148; means the amount, if any, by which the unpaid principal amount of the Revolving Note,
plus the L/C Amount, is in excess of the then-existing Borrowing Base.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B><I>Credit and Security Agreement<BR>
WFBC/Iridex (domestic facility)</I></B>

</DIV>


<P align="center" style="font-size: 10pt"><!-- Folio -->Exhibit A &#151; Page 9<!-- /Folio -->
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="font-family: Helvetica,Arial,sans-serif">

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&#147;Owned Intellectual Property&#148; is defined in Exhibit&nbsp;D.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&#147;Owner&#148; means with respect to Company, each Person having legal or beneficial title to an ownership
interest in Company or a right to acquire such an interest.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&#147;Patent and Trademark Security Agreement&#148; means each Patent and Trademark Security Agreement
entered into between Company and Wells Fargo.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&#147;Pension Plan&#148; means a pension plan (as defined in Section&nbsp;3(2) of ERISA) maintained for employees
of Company or any ERISA Affiliate and covered by Title IV of ERISA.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&#147;Permitted Lien&#148; and &#147;Permitted Liens&#148; are defined in Section&nbsp;5.3(a).
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&#147;Permitted Securities&#148; shall mean any shares, units or interests of equity securities or ownership
interests of Company that by their terms (or by the terms of any security into which they are
convertible or for which they are exchangeable) or upon the happening of any event or otherwise
(A)&nbsp;are not convertible or exchangeable for Debt or any securities that are not Permitted
Securities, (B)&nbsp;(i)&nbsp;do not mature and (ii)&nbsp;are not putable or redeemable at the option of the
holder thereof, in each case in whole or in part on or prior to the date that is six months after
the earlier of the Maturity Date or the actual payment in full in cash of the Indebtedness, (C)&nbsp;do
not require payments of dividends or distributions in cash on or prior to the date that is six
months after the earlier of the Maturity Date or the actual payment in full in cash of the
Indebtedness, and (D)&nbsp;are not secured by any Liens in property of Company.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&#147;Person&#148; means any individual, corporation, partnership, joint venture, limited liability company,
association, joint-stock company, trust, unincorporated organization or government or any agency or
political subdivision of a governmental entity.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&#147;Plan&#148; means an employee benefit plan (as defined in Section&nbsp;3(3) of ERISA) maintained for
employees of Company or any ERISA Affiliate.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&#147;Premises&#148; is defined in Section&nbsp;2.4(a).
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&#147;Prime Rate&#148; means at any time the rate of interest most recently announced by Wells Fargo at its
principal office as its Prime Rate, with the understanding that the Prime Rate is one of Wells
Fargo&#146;s base rates, and serves as the basis upon which effective rates of interest are calculated
for those loans making reference to it, and is evidenced by its recording in such internal
publication or publications as Wells Fargo may designate. Each change in the rate of interest
shall become effective on the date each Prime Rate change is announced by Wells Fargo.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&#147;Proceeds&#148; shall have the meaning given it under the UCC.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&#147;Record&#148; means information that is inscribed on a tangible medium or that is stored in an
electronic or other medium and is retrievable in perceivable form, and includes all information
that is required to be reported by Company to Wells Fargo pursuant to Section&nbsp;5.1.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&#147;Reportable Event&#148; means a reportable event (as defined in Section&nbsp;4043 of ERISA), other than an
event for which the 30-day notice requirement under ERISA has been waived in regulations issued by
the Pension Benefit Guaranty Corporation.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&#147;Revolving Note&#148; is defined in Section&nbsp;1.1(d).
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B><I>Credit and Security Agreement<BR>
WFBC/Iridex (domestic facility)</I></B>

</DIV>


<P align="center" style="font-size: 10pt"><!-- Folio -->Exhibit A &#151; Page 10<!-- /Folio -->
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="font-family: Helvetica,Arial,sans-serif">

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&#147;Security Documents&#148; means this Agreement, the Patent and Trademark Security Agreement(s), and any
other document delivered to Wells Fargo from time to time to secure the Indebtedness.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&#147;Security Interest&#148; is defined in Section&nbsp;2.1.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&#147;Special Account&#148; means a specified cash collateral account maintained with Wells Fargo or another
financial institution acceptable to Wells Fargo in connection with each undrawn Letter of Credit
issued by Wells Fargo, as more fully described in Section&nbsp;1.10.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&#147;Standby Letter of Credit Agreement&#148; means an agreement governing the issuance of standby letters
of credit by Wells Fargo entered into between Company as applicant and Wells Fargo as issuer.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&#147;Subordinated Creditor(s)&#148; means American Medical Systems, Inc. (&#147;AMS&#148;) , a Delaware corporation,
Laserscope, a California corporation and wholly-owned subsidiary of AMS, and any other Person now
or in the future subordinating indebtedness of Company held by that Person to the payment of the
Indebtedness.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&#147;Subordination Agreement&#148; means a subordination agreement executed by a Subordinated Creditor in
favor of Wells Fargo (if more than one, the &#147;Subordination Agreements&#148;).
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&#147;Subsidiary&#148; means any Person of which more than 50% of the outstanding ownership interests having
general voting power under ordinary circumstances to elect a majority of the board of directors or
the equivalent of such Person, irrespective of whether or not at the time ownership interests of
any other class or classes shall have or might have voting power by reason of the happening of any
contingency, is at the time directly or indirectly owned by Company, by Company and one or more
other Subsidiaries, or by one or more other Subsidiaries.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&#147;Termination Date&#148; is defined in Section&nbsp;1.1(b).
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&#147;UCC&#148; means the Uniform Commercial Code in effect in the state designated in this Agreement as the
state whose laws shall govern this Agreement, or in any other state whose laws are held to govern
this Agreement or any portion of this Agreement.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&#147;Unused Amount&#148; is defined in Section&nbsp;1.7(b).
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&#147;Wells Fargo&#148; means Wells Fargo Bank, National Association in its broadest and most comprehensive
sense as a legal entity, and is not limited in its meaning to the Wells Fargo Business Credit
operating division, or to any other operating division of Wells Fargo.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B><I>Credit and Security Agreement<BR>
WFBC/Iridex (domestic facility)</I></B>

</DIV>


<P align="center" style="font-size: 10pt"><!-- Folio -->Exhibit A &#151; Page 11<!-- /Folio -->
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="font-family: Helvetica,Arial,sans-serif">




<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>Exhibit&nbsp;B to Credit and Security Agreement</B>
</DIV>


<DIV align="Center" style="font-size: 10pt; margin-top: 6pt"><U><B>PREMISES</B></U>

</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Premises referred to in the Credit and Security Agreement have an address of 1212 Terra
Bella Avenue, Mountain View, California 94043,
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B><I>Credit and Security Agreement<BR>
WFBC/Iridex (domestic facility)</I></B>

</DIV>


<P align="center" style="font-size: 10pt"><!-- Folio -->Exhibit B &#151; Page 1<!-- /Folio -->
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="font-family: Helvetica,Arial,sans-serif">

<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>Exhibit&nbsp;C to Credit and Security Agreement</B>
</DIV>


<DIV align="Center" style="font-size: 10pt; margin-top: 6pt"><U><B>CONDITIONS PRECEDENT</B></U>

</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Wells Fargo&#146;s obligation to make an initial Advance shall be subject to the condition that Wells
Fargo shall have received the following, duly executed and in form and content satisfactory to
Wells Fargo. The following descriptions are limited descriptions for reference purposes only and
should not be construed as limiting in any way the subject matter that Wells Fargo requires each
document to address.
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left"><B>A.</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD><B>Loan Documents to be Executed by Company:</B></TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left">(1)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>The Revolving Note.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left">(2)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>The Credit and Security Agreement.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left">(3)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>The Master Agreement for Treasury Management Services, the Acceptance of Services, and the
related Service Description for each deposit or treasury management related product or service
that Company will subscribe to, including the Loan Manager Service Description and the Lockbox
and Collection Account Service Description.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left">(4)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>The Patent and Trademark Security Agreement.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left">(5)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>The Ex-Im Bank Documents.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left"><B>B.</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD><B>Loan Documents to be Executed by Third Parties:</B></TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left">(1)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>The Subordination Agreement of American Medical Systems, Inc. and Laserscope, pursuant to
which each Subordinated Creditor shall unconditionally subordinate payment of any indebtedness
of Company held by the Subordinated Creditor to the full and prompt payment of all Company&#146;s
Indebtedness.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left">(2)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>A Landlord&#146;s Disclaimer and Consent to each lease entered into by Company and that Landlord
with respect to the Premises, pursuant to which the Landlord waives its Lien in any goods or
other Inventory of Company located on the Premises.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left">(3)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Certificates Insurance required under this Agreement, with all hazard insurance containing a
lender&#146;s loss payable endorsement in Wells Fargo&#146;s favor and with all liability insurance
naming Wells Fargo as additional insured.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left">(4)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Any Ex-Im Loan Documents requiring the execution by a third party (including, but not limited
to, the Export-Import Bank of the United States).</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left"><B>C.</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD><B>Documents Related to the Premises</B></TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left">(1)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Any leases pursuant to which Company is leasing the Premises from a lessor.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left">(2)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Every bailment or consignment pursuant to which any property of Company is in the possession
of a third Person such as a consignee or subcontractor, together with, in the case of any
goods held by such Person for resale, UCC financing statements sufficient to protect Company&#146;s
and Wells Fargo&#146;s interests in such goods.</TD>
</TR>

</TABLE>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B><I>Credit and Security Agreement<BR>
WFBC/Iridex (domestic facility)</I></B>

</DIV>


<P align="center" style="font-size: 10pt"><!-- Folio -->Exhibit C &#151; Page 1<!-- /Folio -->
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="font-family: Helvetica,Arial,sans-serif">


<DIV style="margin-top: 6pt"><TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">


<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left"><B>D.</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD><B>Federal Tax, State Tax, Judgment, UCC and Intellectual Property Lien Searches</B></TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left">(1)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Current searches of Company in appropriate filing offices showing that (i)&nbsp;no Liens have been
filed and remain in effect against Company and Collateral except Permitted Liens or Liens held
by Persons who have agreed in an Authenticated Record that upon receipt of proceeds of the
initial Advances, they will satisfy, release or terminate such Liens in a manner satisfactory
to Wells Fargo, and (ii)&nbsp;Wells Fargo has filed all UCC financing statements necessary to
perfect the Security Interest, to the extent the Security Interest is capable of being
perfected by filing.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left">(2)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Current searches of Third Persons in appropriate filing offices with respect to any of the
Collateral that is in the possession of a Person other than Company that is held for resale,
showing that (i)&nbsp;UCC financing statements sufficient to protect Company&#146;s and Wells Fargo&#146;s
interests in such Collateral have been filed, and (ii)&nbsp;no other secured party has filed a
financing statement against such Person and covering property similar to Company&#146;s, other than
Company, or if there exists any such secured party, evidence that each such party has received
notice from Company and Wells Fargo sufficient to protect Company&#146;s and Wells Fargo&#146;s
interests in Company&#146;s goods from any claim by such secured party.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left"><B>E.</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD><B>Constituent Documents:</B></TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left">(1)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>The Certificate of Authority of Company, which shall include as part of the Certificate or as
exhibits to the Certificate, (i)&nbsp;the Resolution of Company&#146;s Directors and, if required,
Owners, authorizing the execution, delivery and performance of the Loan Documents, (ii)&nbsp;an
Incumbency Certificate containing the signatures of Company&#146;s Officers or agents authorized to
execute and deliver the Loan Documents and other instruments, agreements and certificates,
including Advance requests, on Company&#146;s behalf, (iii)&nbsp;Company&#146;s Constituent Documents, (iv)&nbsp;a
current Certificate of Good Standing or Certificate of Status issued by the secretary of state
or other appropriate authority for Company&#146;s state of organization, certifying that Company is
in good standing and in compliance with all applicable organizational requirements of the
state of organization, and (v)&nbsp;a Secretary&#146;s Certificate of Company&#146;s secretary or assistant
secretary certifying that the Certificate of Authority of Company is true, correct and
complete.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left">(2)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>The Certificate of Authority of Corporate Guarantor, which shall include as part of the
Certificate or as exhibits to the Certificate, (i)&nbsp;the Resolution of Guarantor&#146;s Directors
and, if required, Owners, authorizing the execution, delivery and performance of the Guaranty
of Corporation, (ii)&nbsp;an Incumbency Certificate containing the signatures of Guarantor&#146;s
Officers or agents authorized to execute and deliver the Guaranty by Corporation on
Guarantor&#146;s behalf, (iii)&nbsp;Guarantor&#146;s Constituent Documents, (iv)&nbsp;a current Certificate of
Good Standing or Certificate of Status issued by the secretary of state or other appropriate
authority for Guarantor&#146;s state of organization, certifying that Guarantor is in good standing
and in compliance with all applicable organizational requirements of the state of
organization, and (v)&nbsp;a Secretary&#146;s Certificate of Guarantor&#146;s secretary or assistant
secretary certifying that the Certificate of Authority of Corporate Guarantor and all attached
exhibits are true, correct and complete.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left">(3)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Evidence that Company is licensed or qualified to transact business in all jurisdictions
where the character of the property owned or leased or the nature of the business transacted
by it makes such licensing or qualification necessary.</TD>
</TR>

</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B><I>Credit and Security Agreement<BR>
WFBC/Iridex (domestic facility)</I></B>

</DIV>


<P align="center" style="font-size: 10pt"><!-- Folio -->Exhibit C &#151; Page 2<!-- /Folio -->
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="font-family: Helvetica,Arial,sans-serif">


<DIV style="margin-top: 6pt"><TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">


<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left">(4)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>An Officer&#146;s Certificate of an appropriate Officer of Company confirming, in his or her
personal capacity, the representations and warranties set forth in this Agreement.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left">(5)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>A Customer Identification Information Form and such other forms and verification as Wells
Fargo may need to comply with the U.S.A. Patriot Act.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left"><B>F.</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD><B>Miscellaneous Matters or Documents:</B></TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left">(1)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Payment of fees and reimbursable costs and expenses due under this Agreement through the date
of initial Advance or issuance of a Letter of Credit, including all legal expenses incurred
through the date of the closing of this Agreement.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left">(2)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Evidence that after making the initial Advance and issuing the initial Letter of Credit,
establishing all reserves under the Borrowing Base (including a reserve equal to 10% of the
outstanding balance (or initial projected balance) under the Ex-Im Credit Agreement), and
satisfying all obligations owed to Company&#146;s prior lender and all trade payables older than
60&nbsp;days from invoice date, book overdrafts and closing costs and fees (including any fees
deemed paid), the combined availability under the Line of Credit under this Agreement and the
&#147;Line of Credit&#148; under the Ex-Im Credit Agreement is not less than $1,000,000.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left">(3)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Such other documents as Wells Fargo in its sole discretion may require.</TD>
</TR>

</TABLE>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B><I>Credit and Security Agreement<BR>
WFBC/Iridex (domestic facility)</I></B>

</DIV>


<P align="center" style="font-size: 10pt"><!-- Folio -->Exhibit C &#151; Page 3<!-- /Folio -->
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="font-family: Helvetica,Arial,sans-serif">

<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>Exhibit&nbsp;D to Credit and Security Agreement</B>
</DIV>


<DIV align="Center" style="font-size: 10pt; margin-top: 6pt"><U><B>REPRESENTATIONS AND WARRANTIES</B></U>

</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Company represents and warrants to Wells Fargo as follows:</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left">(a)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD><U>Existence and Power; Name; Chief Executive Office; Inventory and Equipment Locations;
Federal Employer Identification Number and Organizational Identification Number</U>. Company
is a corporation organized, validly existing and in good standing under the laws of the State
of Delaware and is licensed or qualified to transact business in all jurisdictions where the
character of the property owned or leased or the nature of the business transacted by it makes
such licensing or qualification necessary. Company has all requisite power and authority to
conduct its business, to own its properties and to execute and deliver, and to perform all of
its obligations under, the Loan Documents. During its existence, Company has done business
solely under the names set forth below in addition to its correct legal name. Company&#146;s chief
executive office and principal place of business is located at the address set forth below,
and all of Company&#146;s records relating to its business or the Collateral are kept at that
location. All Inventory and Equipment is located at that location or at one of the other
locations set forth below. Company&#146;s name, Federal Employer Identification Number and
Organization Identification Number are correctly set forth at the end of the Agreement next to
Company&#146;s signature.</TD>
</TR>

</TABLE>
</DIV>
<DIV align="left" style="font-size: 10pt; margin-left: 6%; margin-top: 6pt"><B>Trade Names</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-left: 6%; margin-top: 6pt">IRIS Medical Instruments, Inc.<BR>
Prospero Surgical, Inc.<BR>
Trilogy Medical Systems, Inc.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-left: 6%; margin-top: 6pt"><B>Chief Executive Office / Principal Place of Business</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-left: 6%; margin-top: 6pt">1212 Terra Bella Avenue, Mountain View, California 94043
</DIV>

<DIV align="left" style="font-size: 10pt; margin-left: 6%; margin-top: 6pt"><B>Other Inventory and Equipment Locations</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-left: 6%; margin-top: 6pt">Aeronet<BR>
1751 Junction Ave<BR>
San Jose, CA 95112<BR>
(offsite inventory purchased from AMS)
</DIV>


<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left">(b)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD><U>Capitalization</U>. &#091;INTENTIONALLY OMITTED&#093;.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left">(c)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD><U>Authorization of Borrowing; No Conflict as to Law or Agreements</U>. The execution,
delivery and performance by Company of the Loan Documents and borrowing under the Line of
Credit have been authorized and do not (i)&nbsp;require the consent or approval of Company&#146;s
Owners; (ii)&nbsp;require the authorization, consent or approval by, or registration, declaration
or filing with, or notice to, any governmental agency or instrumentality, whether domestic or
foreign, or any other Person, except to the extent obtained, accomplished or given prior to
the date of this Agreement; (iii)&nbsp;violate any provision of any law, rule or regulation
(including Regulation&nbsp;X of the Board of Governors of the</TD>
</TR>

</TABLE>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B><I>Credit and Security Agreement<BR>
WFBC/Iridex (domestic facility)</I></B>

</DIV>


<P align="center" style="font-size: 10pt"><!-- Folio -->Exhibit D &#151; Page 1<!-- /Folio -->
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="font-family: Helvetica,Arial,sans-serif">


<DIV style="margin-top: 6pt"><TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">
<TR valign="top" style="font-size: 10pt; color: #textcolor#; background: #bgcolor#">
    <TD width="3%" nowrap align="left">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Federal Reserve System) or of any order, writ, injunction or decree presently in effect
having applicability to Company or of Company&#146;s Constituent Documents; (iv)&nbsp;result in a
breach of or constitute a default or event of default under any indenture or loan or credit
agreement or any other material agreement, lease or instrument to which Company is a party
or by which it or its properties may be bound or affected; or (v)&nbsp;result in, or require, the
creation or imposition of any Lien (other than the Security Interest) upon or with respect
to any of the properties now owned or subsequently acquired by Company.</TD>
</TR>
<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left">(d)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD><U>Legal Agreements</U>. This Agreement constitutes and, upon due execution by Company, the
other Loan Documents will constitute the legal, valid and binding obligations of Company,
enforceable against Company in accordance with their respective terms.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left">(e)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD><U>Subsidiaries</U>. Except as disclosed below, Company has no Subsidiaries.</TD>
</TR>

</TABLE>
</DIV>
<DIV align="left" style="font-size: 10pt; margin-left: 6%; margin-top: 6pt"><B>Subsidiaries</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-left: 6%; margin-top: 6pt">1.&nbsp;&nbsp; IRIDEX UK Limited<BR>
2.&nbsp;&nbsp; IRIDEX France S.A.<BR>
3.&nbsp;&nbsp; Iris Medical Instruments, Inc. &#150; wholly-owned subsidiary but not active<BR>
4.&nbsp;&nbsp; Light Solutions Corporation &#150; wholly-owned subsidiary but not active
</DIV>


<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left">(f)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD><U>Financial Condition; No Adverse Change</U>. Company has furnished to Wells Fargo its
audited financial statements for its fiscal year ended December&nbsp;30, 2006, and unaudited
financial statements for the fiscal-year-to-date period ended September&nbsp;29, 2007, and those
statements fairly present Company&#146;s financial condition as of those dates and the results of
Company&#146;s operations and cash flows for the periods then ended and were prepared in accordance
with GAAP. Since the date of the most recent financial statements, there has been no Material
Adverse Effect in Company&#146;s business, properties or condition (financial or otherwise).</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left">(g)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD><U>Litigation</U>. There are no actions, suits or proceedings pending or, to Company&#146;s
knowledge, threatened against or affecting Company or any of its Affiliates or the properties
of Company or any of its Affiliates before any court or governmental department, commission,
board, bureau, agency or instrumentality, domestic or foreign, which, if determined adversely
to Company or any of its Affiliates, would have a Material Adverse Effect on the financial
condition, properties or operations of Company or any of its Affiliates.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left">(h)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD><U>Intellectual Property Rights</U>.</TD>
</TR>

</TABLE>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 4%">(i) <U>Owned Intellectual Property</U>. Set forth below is a complete list of all patents,
applications for patents, trademarks, applications to register trademarks, service marks,
applications to register service marks, mask works, trade dress and copyrights for which
Company is the owner of record (the &#147;Owned Intellectual Property&#148;). Except as set forth
below, (A)&nbsp;Company owns the Owned Intellectual Property free and clear of all restrictions
(including covenants not to sue any Person), court orders, injunctions, decrees, writs or
Liens, whether by agreement memorialized in a Record Authenticated by Company or otherwise,
(B)&nbsp;no Person other than Company owns or has been granted any right in the Owned
Intellectual Property, (C)&nbsp;all Owned Intellectual Property is valid, subsisting and
enforceable, and (D)&nbsp;Company has taken all commercially reasonable action necessary to
maintain and protect the Owned Intellectual Property.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B><I>Credit and Security Agreement<BR>
WFBC/Iridex (domestic facility)</I></B>

</DIV>


<P align="center" style="font-size: 10pt"><!-- Folio -->Exhibit D &#151; Page 2<!-- /Folio -->
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="font-family: Helvetica,Arial,sans-serif">


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 4%">(ii) <U>Agreements with Employees and Contractors</U>. Company has entered into a legally
enforceable agreement with each Person that is an employee or subcontractor obligating that
Person to assign to Company, without additional compensation, any Intellectual Property
Rights created, discovered or invented by that Person in the course of that Person&#146;s
employment or engagement with Company (except to the extent prohibited by law), and further
obligating that Person to cooperate with Company, without additional compensation, to secure
and enforce the Intellectual Property Rights on behalf of Company, unless the job
description of the Person is such that it is not reasonably foreseeable that the employee or
subcontractor will create, discover, or invent Intellectual Property Rights.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 4%">(iii) <U>Intellectual Property Rights Licensed from Others</U>. Set forth below is a
complete list of all agreements under which Company has licensed Intellectual Property
Rights from another Person (&#147;Licensed Intellectual Property&#148;) other than readily available,
non-negotiated licenses of computer software and other intellectual property used solely for
performing accounting, word processing and similar administrative tasks (&#147;Off-the-shelf
Software&#148;) and a summary of any ongoing payments Company is obligated to make with respect
thereto. Except as set forth below or in any other Record, copies of which have been given
to Wells Fargo, Company&#146;s licenses to use the Licensed Intellectual Property are free and
clear of all restrictions, Liens, court orders, injunctions, decrees, or writs, whether by
agreed to in a Record Authenticated by Company or otherwise. Except as disclosed below,
Company is not contractually obligated to make royalty payments of a material nature, or pay
fees to any owner of, licensor of, or other claimant to, any Intellectual Property Rights.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 4%">(iv) <U>Other Intellectual Property Needed for Business</U>. Except for Off-the-shelf
Software and as disclosed below, the Owned Intellectual Property and the Licensed
Intellectual Property constitute all Intellectual Property Rights used or necessary to
conduct Company&#146;s business as it is presently conducted or as Company reasonably foresees
conducting it.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 4%">(v) <U>Infringement</U>. Except as disclosed below, Company has no knowledge of, and has
not received notice either orally or in a Record alleging, any Infringement of another
Person&#146;s Intellectual Property Rights (including any claim set forth in a Record that
Company must license or refrain from using the Intellectual Property Rights of any Person)
nor, to Company&#146;s knowledge, is there any threatened claim or any reasonable basis for any
such claim.
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B><U>Intellectual Property Disclosures</U></B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-left: 4%; margin-top: 6pt"><B>(h)(i) &#151; Please see attached</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-left: 4%; margin-top: 6pt"><B>(h)(iii) &#151; Inbound License Agreements</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-left: 4%; margin-top: 6pt">1.&nbsp;&nbsp; Laserscope / AMS &#150; paid up license<BR>
2.&nbsp;&nbsp; Georgetown University &#150; 5% on G-probes<BR>
3.&nbsp;&nbsp; Palomar &#150; 7.5% on Lyra and 3.75% on Gemini<BR>
4.&nbsp;&nbsp; Colder Products &#150; $5.00 on each RFID Console (IQ577) manufactured
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B><I>Credit and Security Agreement<BR>
WFBC/Iridex (domestic facility)</I></B>

</DIV>


<P align="center" style="font-size: 10pt"><!-- Folio -->Exhibit D &#151; Page 3<!-- /Folio -->
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="font-family: Helvetica,Arial,sans-serif">

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left">(i)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD><U>Taxes</U>. Except as disclosed below, Company and its Affiliates have paid or caused to
be paid to the proper authorities when due all federal, state and local taxes required to be
withheld by each of them. Company and its Affiliates have filed all federal, state and local
tax returns which to the knowledge of the Officers of Company or any Affiliate, as the case
may be, are required to be filed, and Company and its Affiliates have paid or caused to be
paid to the respective taxing authorities all taxes as shown on these returns or on any
assessment received by any of them to the extent such taxes have become due.</TD>
</TR>

</TABLE>
</DIV>
<DIV align="left" style="font-size: 10pt; margin-left: 4%; margin-top: 6pt"><B>Taxes</B>
</DIV>



<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 8%">Company received and has responded to an inquiry from the State of
Iowa regarding $9,900 of back taxes.
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left">(j)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD><U>Titles and Liens</U>. Company has good and absolute title to all Collateral free and
clear of all Liens other than Permitted Liens. No financing statement naming Company as
debtor is on file in any office except to perfect only Permitted Liens.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left">(k)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD><U>No Defaults</U>. Except as disclosed below, Company is in compliance with all provisions
of all agreements, instruments, decrees and orders to which it is a party or by which it or
its property is bound or affected, the breach or default of which could have a Material
Adverse Effect on Company&#146;s financial condition, properties or operations.</TD>
</TR>

</TABLE>
</DIV>
<DIV align="left" style="font-size: 10pt; margin-left: 4%; margin-top: 6pt"><B>No Defaults</B>
</DIV>



<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 8%">Company is not in compliance with certain provisions of the
Business Loan and Security Agreement by and among IRIDEX
Corporation and Mid-Peninsula Bank, part of Greater Bay Bank N.A.,
dated January&nbsp;16, 2007.
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left">(l)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD><U>Submissions to Wells Fargo</U>. All financial and other information provided to Wells
Fargo by or on behalf of Company in connection with Company&#146;s request for the credit
facilities contemplated hereby is (i)&nbsp;true and correct in all material respects, (ii)&nbsp;does not
omit any material fact that would cause such information to be misleading, and (iii)&nbsp;as to
projections, valuations or proforma financial statements, present a good faith opinion as to
such projections, valuations and proforma condition and results.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left">(m)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD><U>Financing Statements</U>. Company has previously authorized the filing of financing
statements sufficient when filed to perfect the Security Interest and other Liens created by
the Security Documents. When such financing statements are filed, Wells Fargo will have a
valid and perfected security interest in all Collateral capable of being perfected by the
filing of financing statements. None of the Collateral is or will become a fixture on real
estate, unless a sufficient fixture filing has been filed with respect to such Collateral.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left">(n)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD><U>Rights to Payment</U>. Each right to payment and each instrument, document, chattel
paper and other agreement constituting or evidencing Collateral is (or, in the case of all
future Collateral, will be when arising or issued) the valid, genuine and legally enforceable
obligation, subject to no defense, setoff or counterclaim of the account debtor or other
obligor named in that instrument.</TD>
</TR>

</TABLE>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B><I>Credit and Security Agreement<BR>
WFBC/Iridex (domestic facility)</I></B>

</DIV>


<P align="center" style="font-size: 10pt"><!-- Folio -->Exhibit D &#151; Page 4<!-- /Folio -->
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="font-family: Helvetica,Arial,sans-serif">


<DIV style="margin-top: 6pt"><TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">


<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left">(o)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD><U>Employee Benefit Plans</U>.</TD>
</TR>

</TABLE>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 4%">(i) <U>Maintenance and Contributions to Plans</U>. Except as disclosed below, neither
Company nor any ERISA Affiliate (A)&nbsp;maintains or has maintained any Pension Plan,
(B)&nbsp;contributes or has contributed to any Multiemployer Plan, or (C)&nbsp;provides or has
provided post-retirement medical or insurance benefits to employees or former employees
(other than benefits required under Section&nbsp;601 of ERISA, Section&nbsp;4980B of the IRC, or
applicable state law).
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 4%">(ii) <U>Knowledge of Plan Noncompliance with Applicable Law</U>. Except as disclosed
below, neither Company nor any ERISA Affiliate has (A)&nbsp;knowledge that Company or the ERISA
Affiliate is not in full compliance with the requirements of ERISA, the IRC, or applicable
state law with respect to any Plan, (B)&nbsp;knowledge that a Reportable Event occurred or
continues to exist in connection with any Pension Plan, or (C)&nbsp;sponsored a Plan that it
intends to maintain as qualified under the IRC that is not so qualified, and no fact or
circumstance exists which may have an adverse effect on such Plan&#146;s tax-qualified status.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 4%">(iii) <U>Funding Deficiencies and Other Liabilities</U>. Neither Company nor any ERISA
Affiliate has liability for any (A)&nbsp;accumulated funding deficiency (as defined in Section
302 of ERISA and Section&nbsp;412 of the IRC) under any Plan, whether or not waived,
(B)&nbsp;withdrawal, partial withdrawal, reorganization or other event under any Multiemployer
Plan under Section&nbsp;4201 or 4243 of ERISA, or (C)&nbsp;event or circumstance which could result in
financial obligation to the Pension Benefit Guaranty Corporation, the Internal Revenue
Service, the Department of Labor or any participant in connection with any Plan (other than
routine claims for benefits under the Plan).
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD><B>Employee Benefit Plans</B></TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD><B>None</B></TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left">(p)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD><U>Environmental Matters</U>.</TD>
</TR>

</TABLE>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 4%">(i)&nbsp;Hazardous Substances on Premises. Except as disclosed below, there are not present in,
on or under the Premises any Hazardous Substances in such form or quantity as to create any
material liability or obligation for either Company or Wells Fargo under the common law of
any jurisdiction or under any Environmental Law, and no Hazardous Substances have ever been
stored, buried, spilled, leaked, discharged, emitted or released in, on or under the
Premises in such a way as to create a material liability.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 4%">(ii) <U>Disposal of Hazardous Substances</U>. Except as disclosed below, Company has not
disposed of Hazardous Substances in such a manner as to create any material liability under
any Environmental Law.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 4%">(iii) <U>Claims and Proceedings with Respect to Environmental Law Compliance</U>. Except
as disclosed below, there have not existed in the past, nor are there any threatened or
impending requests, claims, notices, investigations, demands, administrative proceedings,
hearings or litigation relating in any way to the Premises or
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B><I>Credit and Security Agreement<BR>
WFBC/Iridex (domestic facility)</I></B>

</DIV>


<P align="center" style="font-size: 10pt"><!-- Folio -->Exhibit D &#151; Page 5<!-- /Folio -->
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="font-family: Helvetica,Arial,sans-serif">



<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 4%">Company, alleging material liability under, violation of, or noncompliance with any
Environmental Law or any license, permit or other authorization issued pursuant thereto.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 4%">(iv) <U>Compliance with Environmental Law; Permits and Authorizations</U>. Except as
disclosed below, Company (A)&nbsp;conducts its business at all times in compliance with
applicable Environmental Law, (B)&nbsp;possesses valid licenses, permits and other authorizations
required under applicable Environmental Law for the lawful and efficient operation of its
business, none of which are scheduled to expire, or withdrawal, or material limitation
within the next 12&nbsp;months, and (C)&nbsp;has not been denied insurance on grounds related to
potential environmental liability.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 4%">(v) <U>Status of Premises</U>. Except as disclosed below, the Premises are not and never
have been listed on the National Priorities List, the Comprehensive Environmental Response,
Compensation and Liability Information System or any similar federal, state or local list,
schedule, log, inventory or database.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 4%">(vi) <U>Environmental Audits, Reports, Permits and Licenses</U>. Company has delivered to
Wells Fargo all environmental assessments, audits, reports, permits, licenses and other
documents describing or relating in any way to the Premises or Company&#146;s businesses.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 4%"><B>Environmental Matters</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 8%">Please see attached &#147;Environmental Compliance Plan&#148; submitted by
the Company to the City of Mountain View.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B><I>Credit and Security Agreement<BR>
WFBC/Iridex (domestic facility)</I></B>

</DIV>


<P align="center" style="font-size: 10pt"><!-- Folio -->Exhibit D &#151; Page 6<!-- /Folio -->
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="font-family: Helvetica,Arial,sans-serif">

<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><U>Exhibit&nbsp;D &#150; Item (h)(i)</U>
</DIV>


<DIV align="Center" style="font-size: 10pt; margin-top: 6pt">Intellectual Property Disclosures

</DIV>

<DIV align="Center" style="font-size: 10pt; margin-top: 6pt">U.S Issued Patents

</DIV>
<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="40%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="11%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="8%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="9%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="16%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left"><B>DATE</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left" colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD nowrap align="left" style="border-bottom: 1px solid #000000"><B>PATENT TITLE</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left" style="border-bottom: 1px solid #000000"><B>ISSUED</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left" colspan="3" style="border-bottom: 1px solid #000000"><B>PATENT NO.</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left" style="border-bottom: 1px solid #000000"><B>HOLDER</B></TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Optical Fiber with
Electrical Encoding
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">02/4/1992
</TD>
    <TD>&nbsp;</TD>

    <TD align="left" valign="top" colspan="2">5,085,492</TD>
    <TD nowrap valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">IRIDEX Corporation</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Technique for Coupling
Laser Diode to Optical
Fiber
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">02/18/1992
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top" colspan="2">5,088,803</TD>
    <TD nowrap valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">IRIDEX Corporation</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Contact Probe for Laser
Cyclophotocoagulation
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">12/13/1994
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top" colspan="2">5,372,595</TD>
    <TD nowrap valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">IRIDEX Corporation
Georgetown
University</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Passively stabilized
intracavity doubling laser
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">04/23/1996
</TD>
    <TD>&nbsp;</TD>

    <TD align="left" valign="top" colspan="2">5,511,085</TD>
    <TD nowrap valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">IRIDEX Corporation</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Scalable side-pumped
solid-state laser
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">05/28/1996
</TD>
    <TD>&nbsp;</TD>

    <TD align="left" valign="top" colspan="2">5,521,932</TD>
    <TD nowrap valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">IRIDEX Corporation</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Fiber stub end-pumped laser
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">09/2/1997
</TD>
    <TD>&nbsp;</TD>

    <TD align="left" valign="top" colspan="2">5,663,979</TD>
    <TD nowrap valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">IRIDEX Corporation</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Pulsed Laser with Passive
Stabilization
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">11/9/1999
</TD>
    <TD>&nbsp;</TD>

    <TD align="left" valign="top" colspan="2">5,982,789</TD>
    <TD nowrap valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">IRIDEX Corporation</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Fiber stub end-pumped laser
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">12/7/1999
</TD>
    <TD>&nbsp;</TD>

    <TD align="left" valign="top" colspan="2">5,999,554</TD>
    <TD nowrap valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">IRIDEX Corporation</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Cw laser amplifier
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">10/31/2000
</TD>
    <TD>&nbsp;</TD>

    <TD align="left" valign="top" colspan="2">6,141,143</TD>
    <TD nowrap valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">IRIDEX Corporation</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Cw laser amplifier
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">11/7/2000
</TD>
    <TD>&nbsp;</TD>

    <TD align="left" valign="top" colspan="2">6,144,484</TD>
    <TD nowrap valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">IRIDEX Corporation</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Aspheric Lensing Control
for High Power
Butt-Coupled End-Pumped
Laser
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">04/24/2001
</TD>
    <TD>&nbsp;</TD>

    <TD align="left" valign="top" colspan="2">6,222,869 B1</TD>
    <TD nowrap valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">IRIDEX Corporation</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Fiber stub end-pumped laser
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">12/4/2001
</TD>
    <TD>&nbsp;</TD>

    <TD align="left" valign="top" colspan="2">6,327,291 B1</TD>
    <TD nowrap valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">IRIDEX Corporation</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Focusability Enhancing
Optic for Laser Diode
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">04/23/2002
</TD>
    <TD>&nbsp;</TD>

    <TD align="left" valign="top" colspan="2">6,377,599 B1</TD>
    <TD nowrap valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">IRIDEX Corporation</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Method and Apparatus for
Real-Time Detection,
Control and Recording of
Sub-Clinical Therapeutic
Laser Lesions During
Ocular Laser
Photocoagulation
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">04/1/2003
</TD>
    <TD>&nbsp;</TD>

    <TD align="left" valign="top" colspan="2" nowrap>6,540,391 B2</TD>
    <TD nowrap valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">IRIDEX Corporation</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B><I>Credit and Security Agreement<br>
WFBC/Iridex (domestic facility)</I></B>

</DIV>



<P align="center" style="font-size: 10pt"><!-- Folio -->Exhibit D &#151; Page 1<!-- /Folio -->
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="font-family: Helvetica,Arial,sans-serif">

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="40%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="11%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="8%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="9%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="16%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left"><B>DATE</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left" colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD nowrap align="left" style="border-bottom: 1px solid #000000"><B>PATENT TITLE</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left" style="border-bottom: 1px solid #000000"><B>ISSUED</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left" colspan="3" style="border-bottom: 1px solid #000000"><B>PATENT NO.</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left" style="border-bottom: 1px solid #000000"><B>HOLDER</B></TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Method and Apparatus for
Controlling Sub-Clinical
Laser Procedures with
Intra-Operataive
Monitoring of
Electrophysiological
Changes
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">05/11/2004
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top" colspan="2" nowrap>6,733,490</TD>
    <TD nowrap valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">IRIDEX Corporation</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Treatment Site Cooling
System of Skin Disorders
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">12/12/2006
</TD>
    <TD>&nbsp;</TD>

    <TD align="left" valign="top" colspan="2" nowrap>7,147,654</TD>
    <TD nowrap valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">IRIDEX Corporation</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>


<DIV align="center" style="font-size: 10pt; margin-top: 18pt">U.S Patent Applications
</DIV>

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="40%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="11%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="13%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="16%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left"><B>DATE</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD nowrap align="left" style="border-bottom: 1px solid #000000"><B>PATENT APPLICATION TITLE</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left" style="border-bottom: 1px solid #000000"><B>FILED</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left" style="border-bottom: 1px solid #000000"><B>APPLICATION NO.</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left" style="border-bottom: 1px solid #000000"><B>HOLDER</B></TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Apparatus for Real-Time
Measurement/Control Of
Intra-Operataive Effects
During Laser Thermal
Treatments, Using Light
Scattering
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">09/20/2002
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">60/412,465
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">IRIDEX Corporation</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">MicroPulse for Uveo/Scleral
Outflow (Provisional)
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">10/30/2007
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">60/983,811
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">IRIDEX Corporation</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Directional (stepped)&nbsp;Probe
Treatment Apparatus
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">08/16/2004
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">11/205,629
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">IRIDEX Corporation</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Short Pulse Laser Treatment
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">02/15/2005
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">11/066,615
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">IRIDEX Corporation</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Flushtip Illuminating EndoProbe
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">11/3/2006
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">11/556,504
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">IRIDEX Corporation</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Shaped Tip Illuminating
EndoProbe
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">03/13/2007
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">11/685,351
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">IRIDEX Corporation</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>


<DIV align="center" style="font-size: 10pt; margin-top: 18pt">Foreign Issued Patents
</DIV>

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="40%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="11%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="8%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="9%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="16%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD nowrap align="left" style="border-bottom: 1px solid #000000"><B>TITLE</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left" style="border-bottom: 1px solid #000000"><B>COUNTRY</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left" colspan="3" style="border-bottom: 1px solid #000000"><B>PATENT NO.</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left" style="border-bottom: 1px solid #000000"><B>DATE ISSUED</B></TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Pulsed Laser w/Passive Stabilization
EP0904615
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Europe
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top" colspan="2">0904615</TD>
    <TD nowrap valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">09/5/2001</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">DE app &#150; 97928819.8
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Germany
</TD>
    <TD>&nbsp;</TD>

    <TD align="left" valign="top" colspan="2">69706541</TD>
    <TD nowrap valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">09/5/2001</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">UK App &#150; 97928819.8
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">United Kingdom
</TD>
    <TD>&nbsp;</TD>

    <TD align="left" valign="top" colspan="2">69706541</TD>
    <TD nowrap valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">09/5/2001</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">FR App &#150; 97928819.8
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">France
</TD>
    <TD>&nbsp;</TD>

    <TD align="left" valign="top" colspan="2">69706541</TD>
    <TD nowrap valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">09/5/2001</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Passively Stable Intra-doubling Laser
EP0730783
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Europe
</TD>
    <TD>&nbsp;</TD>

    <TD align="left" valign="top" colspan="2">0730783</TD>
    <TD nowrap valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">04/23/2003</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">DE app &#150; 69530497.6
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Germany
</TD>
    <TD>&nbsp;</TD>

    <TD align="left" valign="top" colspan="2">69530497.6</TD>
    <TD nowrap valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">4/23/2003</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Passively Stable Intra-doubling Laser
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Korea
</TD>
    <TD>&nbsp;</TD>

    <TD align="left" valign="top" colspan="2">348012</TD>
    <TD nowrap valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">07/26/2002</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B><I>Credit and Security Agreement<br>
WFBC/Iridex (domestic facility)</I></B>

</DIV>



<P align="center" style="font-size: 10pt"><!-- Folio -->Exhibit D &#151; Page 2<!-- /Folio -->
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="font-family: Helvetica,Arial,sans-serif">

<DIV align="center" style="font-size: 10pt; margin-top: 18pt">Foreign Patent Applications
</DIV>

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="40%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="11%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="8%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="9%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="16%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD nowrap align="left" style="border-bottom: 1px solid #000000"><B>TITLE</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left" style="border-bottom: 1px solid #000000"><B>COUNTRY</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left" colspan="3" style="border-bottom: 1px solid #000000"><B>SERIAL NUMBER</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left" style="border-bottom: 1px solid #000000"><B>FILING DATE</B></TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Directional (Stepped) Probe
Treatment Apparatus
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Germany
</TD>
    <TD>&nbsp;</TD>

    <TD align="left" valign="top" colspan="2">2005/038611.3</TD>
    <TD nowrap valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">08/16/2005</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Method and Apparatus for
Controlling Sub-Clinical
Laser Procedures with
Intra-Operataive Monitoring
of Electrophysiological
Changes
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Europe
</TD>
    <TD>&nbsp;</TD>

    <TD align="left" valign="top" colspan="2">03723833.4</TD>
    <TD nowrap valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">3/25/2003</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Short Pulse (Green microPulse)
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Europe
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top" colspan="2">2006/006369</TD>
    <TD nowrap valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">02/22/2006</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Short Pulse (Green microPulse)
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Japan
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top" colspan="2">2007-557145</TD>
    <TD nowrap valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">08/21/2007</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">

<TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Flush and Shaped Tip Illuminating EndoProbes
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">PCT
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top" colspan="2">2007-083139</TD>
    <TD nowrap valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">10/31/2007</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>


<DIV align="center" style="font-size: 10pt; margin-top: 18pt">U.S. Trademark Registrations
</DIV>

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="40%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="11%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="8%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="9%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="16%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left"><B>REGISTRATION</B></TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD nowrap align="left" style="border-bottom: 1px solid #000000"><B>COUNTRY</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left" style="border-bottom: 1px solid #000000"><B>TRADEMARK</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left" colspan="3" style="border-bottom: 1px solid #000000"><B>REGISTRATION NO.</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left" style="border-bottom: 1px solid #000000"><B>DATE</B></TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">U.S.
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">APEX
</TD>
    <TD>&nbsp;</TD>

    <TD align="left" valign="top" colspan="2">2,528,141</TD>
    <TD nowrap valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">01/08/2002</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">U.S.
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">AURA
</TD>
    <TD>&nbsp;</TD>

    <TD align="left" valign="top" colspan="2">3,306.455</TD>
    <TD nowrap valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">10/09/2007</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">U.S.
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">COOLSPOT
</TD>
    <TD>&nbsp;</TD>

    <TD align="left" valign="top" colspan="2">3,044,965</TD>
    <TD nowrap valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">01/17/2006</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">U.S.
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">DERMASTAT
</TD>
    <TD>&nbsp;</TD>

    <TD align="left" valign="top" colspan="2">1,329,417</TD>
    <TD nowrap valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">04/09/1985</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">U.S.
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">DESIGN
</TD>
    <TD>&nbsp;</TD>

    <TD align="left" valign="top" colspan="2">1,618,629</TD>
    <TD nowrap valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">10/23/1990</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">U.S.
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">ENDOPROBE
</TD>
    <TD>&nbsp;</TD>

    <TD align="left" valign="top" colspan="2">1,622,307</TD>
    <TD nowrap valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">11/13/1990</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">U.S.
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">GEMINI
</TD>
    <TD>&nbsp;</TD>

    <TD align="left" valign="top" colspan="2">3,044,850</TD>
    <TD nowrap valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">01/17/2006</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">U.S.
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">IRIDEX
</TD>
    <TD>&nbsp;</TD>

    <TD align="left" valign="top" colspan="2">2,204,220</TD>
    <TD nowrap valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">11/17/1998</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">U.S.
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">IRIDEX
</TD>
    <TD>&nbsp;</TD>

    <TD align="left" valign="top" colspan="2">2,204,219</TD>
    <TD nowrap valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">11/17/1998</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">U.S.
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top" nowrap>IRIS MEDICAL
</TD>
    <TD>&nbsp;</TD>

    <TD align="left" valign="top" colspan="2">1,822,545</TD>
    <TD nowrap valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">02/22/1994</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">U.S.
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">LYRA
</TD>
    <TD>&nbsp;</TD>

    <TD align="left" valign="top" colspan="2">3,200,356</TD>
    <TD nowrap valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">01/23/2007</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">U.S.
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">OCULIGHT
</TD>
    <TD>&nbsp;</TD>

    <TD align="left" valign="top" colspan="2">1,618,628</TD>
    <TD nowrap valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">10/23/1990</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">U.S.
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">SMARTKEY
</TD>
    <TD>&nbsp;</TD>

    <TD align="left" valign="top" colspan="2">1,618,627</TD>
    <TD nowrap valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">10/23/1990</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">U.S.
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">VENUS
</TD>
    <TD>&nbsp;</TD>

    <TD align="left" valign="top" colspan="2">3,023,256</TD>
    <TD nowrap valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">12/06/2005</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>


<DIV align="center" style="font-size: 10pt; margin-top: 18pt">U.S. Trademark Applications
</DIV>

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="40%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="11%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="13%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="16%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD nowrap align="left" style="border-bottom: 1px solid #000000"><B>COUNTRY</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left" style="border-bottom: 1px solid #000000"><B>TRADEMARK</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left" style="border-bottom: 1px solid #000000"><B>APPLICATION NO.</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left" style="border-bottom: 1px solid #000000"><B>FILING DATE</B></TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">U.S.
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">SOLIS
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">78/446,386
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">07/06/2004</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B><I>Credit and Security Agreement<br>
WFBC/Iridex (domestic facility)</I></B>

</DIV>


<P align="center" style="font-size: 10pt"><!-- Folio -->Exhibit D &#151; Page 3<!-- /Folio -->
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="font-family: Helvetica,Arial,sans-serif">

<DIV align="center" style="font-size: 10pt; margin-top: 18pt">Foreign Trademark Registrations
</DIV>

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="40%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="11%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="8%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="9%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="16%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left"><B>REGISTRATION</B></TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD nowrap align="left" style="border-bottom: 1px solid #000000"><B>COUNTRY</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left" style="border-bottom: 1px solid #000000"><B>TRADEMARK</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left" colspan="3" style="border-bottom: 1px solid #000000"><B>REGISTRATION NO.</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left" style="border-bottom: 1px solid #000000"><B>DATE</B></TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Australia
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">AURA
</TD>
    <TD>&nbsp;</TD>

    <TD align="left" valign="top" colspan="2">852,861</TD>
    <TD nowrap valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">12/07/2004</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">France</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Korea</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Madrid Protocol</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">United Kingdom</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">France
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">GEMINI
</TD>
    <TD>&nbsp;</TD>

    <TD align="left" valign="top" colspan="2">838,771</TD>
    <TD nowrap valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">11/17/2004</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Korea</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Madrid Protocol</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">United Kingdom</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Australia
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">LYRA
</TD>
    <TD>&nbsp;</TD>

    <TD align="left" valign="top" colspan="2">849,033</TD>
    <TD nowrap valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">12/07/2004</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">France</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Korea</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Madrid Protocol</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">United Kingdom</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">France
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">SOLIS
</TD>
    <TD>&nbsp;</TD>

    <TD align="left" valign="top" colspan="2">866,673</TD>
    <TD nowrap valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">12/07/2004</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Madrid Protocol</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">United Kingdom</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">France
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">VENUS
</TD>
    <TD>&nbsp;</TD>

    <TD align="left" valign="top" colspan="2">849,035</TD>
    <TD nowrap valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">12/07/2004</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Madrid Protocol</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Canada
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">GEMINI
</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="3" align="left" valign="top">TMA707678
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">02/19/2008</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>


<DIV align="center" style="font-size: 10pt; margin-top: 18pt">Foreign Trademark Applications
</DIV>

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="40%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="11%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="8%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="9%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="16%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD nowrap align="left" style="border-bottom: 1px solid #000000"><B>COUNTRY</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left" style="border-bottom: 1px solid #000000"><B>TRADEMARK</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left" colspan="3" style="border-bottom: 1px solid #000000"><B>APPLICATION NO.</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left" style="border-bottom: 1px solid #000000"><B>FILING DATE</B></TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Canada
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">AURA
</TD>
    <TD>&nbsp;</TD>

    <TD align="left" valign="top" colspan="2">1,239,900</TD>
    <TD nowrap valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">12/07/2004</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Australia
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">GEMINI
</TD>
    <TD>&nbsp;</TD>

    <TD align="left" valign="top" colspan="2">1,154,571</TD>
    <TD nowrap valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">12/28/2006</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Canada
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">LYRA
</TD>
    <TD>&nbsp;</TD>

    <TD align="left" valign="top" colspan="2">1,239,901</TD>
    <TD nowrap valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">12/07/2004</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Canada
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">VENUS
</TD>
    <TD>&nbsp;</TD>

    <TD align="left" valign="top" colspan="2">1,239,902</TD>
    <TD nowrap valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">12/07/2004</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B><I>Credit and Security Agreement<br>
WFBC/Iridex (domestic facility)</I></B>

</DIV>



<P align="center" style="font-size: 10pt"><!-- Folio -->Exhibit D &#151; Page 4<!-- /Folio -->
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="font-family: Helvetica,Arial,sans-serif">

<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><U>Exhibit&nbsp;D &#150; Item (p)</U>
</DIV>


<DIV align="Center" style="font-size: 10pt; margin-top: 6pt">(see attached copy)

</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B><I>Credit and Security Agreement<br>
WFBC/Iridex (domestic facility)</I></B>

</DIV>


<P align="center" style="font-size: 10pt"><!-- Folio -->Exhibit D &#151; Page 1<!-- /Folio -->
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="font-family: Helvetica,Arial,sans-serif">

<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>Exhibit&nbsp;E to Credit and Security Agreement</B>
</DIV>


<DIV align="Center" style="font-size: 10pt; margin-top: 6pt"><U><B>COMPLIANCE CERTIFICATE</B></U>

</DIV>
<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="5%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="92%">&nbsp;</TD>
</TR>
<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">To:
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Wells Fargo Bank, National Association</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Date:
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&#091;<U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U><U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;</U>, 200<U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U>&#093;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Subject:
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Financial Statements</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In accordance with our Credit and Security Agreement dated March <U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U>, 2008 (as amended from
time to time, the &#147;Credit Agreement&#148;), attached are the financial statements of IRIDEX CORPORATION
(the &#147;Company&#148;) dated &#091;<U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U><U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U>, 200<U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U>&#093; (the &#147;Reporting Date&#148;) and the year-to-date period
then ended (the &#147;Current Financials&#148;). All terms used in this certificate have the meanings given
in the Credit Agreement.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;A.&nbsp;Preparation and Accuracy of Financial Statements. I certify that the Current Financials
have been prepared in accordance with GAAP, subject to year-end audit adjustments, and fairly
present Company&#146;s financial condition as of the Reporting Date.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;B.&nbsp;Name of Company; Merger and Consolidation. I certify that:
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(Check one)
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="center"><FONT face="Wingdings">&#111;</FONT></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Company has not, since the date of the Credit Agreement, changed its name or
jurisdiction of organization, nor has it consolidated or merged with another Person.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
     <TD width="3%" nowrap align="center"><FONT face="Wingdings">&#111;</FONT></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Company has, since the date of the Credit Agreement, either changed its name or
jurisdiction of organization, or both, or has consolidated or merged with another
Person, which change, consolidation or merger: <FONT face="Wingdings">&#111;</FONT>&nbsp;was consented to in advance by Wells
Fargo in an Authenticated Record, and/or <FONT face="Wingdings">&#111;</FONT>&nbsp;is more fully described in the statement
of facts attached to this Certificate.</TD>
</TR>

</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;C.&nbsp;Events of Default. I certify that:
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(Check one)
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
     <TD width="3%" nowrap align="center"><FONT face="Wingdings">&#111;</FONT></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>I have no knowledge of the occurrence of an Event of Default under the Credit
Agreement, except as previously reported to Wells Fargo in a Record.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
     <TD width="3%" nowrap align="center"><FONT face="Wingdings">&#111;</FONT></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>I have knowledge of an Event of Default under the Credit Agreement not previously
reported to Wells Fargo in a Record, as more fully described in the statement of
facts attached to this Certificate, and further, I acknowledge that Wells Fargo may
under the terms of the Credit Agreement impose the Default Rate at any time during
the resulting Default Period.</TD>
</TR>

</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;D.&nbsp;Litigation Matters. I certify that:
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(Check one)
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
     <TD width="3%" nowrap align="center"><FONT face="Wingdings">&#111;</FONT></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>I have no knowledge of any material adverse change to the litigation exposure of
Company or any of its Affiliates or of any Guarantor.</TD>
</TR>

</TABLE>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B><I>Credit and Security Agreement<br>
WFBC/Iridex (domestic facility)</I></B>

</DIV>


<P align="center" style="font-size: 10pt"><!-- Folio -->Exhibit E &#151; Page 1<!-- /Folio -->
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="font-family: Helvetica,Arial,sans-serif">


<DIV style="margin-top: 6pt"><TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">


<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="center"><FONT face="Wingdings">&#111;</FONT></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>I have knowledge of material adverse changes to the litigation exposure of Company
or any of its Affiliates or of any Guarantor not previously disclosed in Exhibit&nbsp;D,
as more fully described in the statement of facts attached to this Certificate.</TD>
</TR>

</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;E.&nbsp;Financial Covenants. I further certify that:
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(Check and complete each of the following)
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.&nbsp;Minimum Net Income. Pursuant to Section&nbsp;5.2(a) of the Credit Agreement, as of the
Reporting Date, Company&#146;s Net Income plus approved intangible expense adjustments (approved by
Wells Fargo in Wells Fargo&#146;s sole discretion) was
$<U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U>,
which <FONT face="Wingdings">&#111;</FONT>&nbsp;satisfies <FONT face="Wingdings">&#111;</FONT>&nbsp;does not satisfy
the requirement that Net Income be not less than $<U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U> on the Reporting Date (numbers
appearing between &#147;&#060; &#062;&#147; are negative).
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.&nbsp;Minimum Debt Service Coverage Ratio. Pursuant to Section&nbsp;5.2(b) of the Credit Agreement,
as of the Reporting Date, Company&#146;s Debt Service Coverage Ratio
was
<U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U> to 1.00, which <FONT face="Wingdings">&#111;</FONT>&nbsp;satisfies <FONT face="Wingdings">&#111;</FONT>
&nbsp;does not satisfy the requirement that such ratio be no less than <U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U> to 1.00 on the Reporting
Date.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.&nbsp;Capital Expenditures. Pursuant to Section&nbsp;5.2(c) of the Credit Agreement, for the
year-to-date period ending on the Reporting Date, Company has expended or contracted to expend
during the fiscal year ended <U>&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U><U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U>, 200<U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U>, for Capital Expenditures, $<U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U><U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U> in
the aggregate, which <FONT face="Wingdings">&#111;</FONT> satisfies <FONT face="Wingdings">&#111;</FONT>&nbsp;does not satisfy the requirement that such expenditures not exceed
$<U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U> in the aggregate.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Attached are statements of all relevant facts and computations in reasonable detail sufficient
to evidence Company&#146;s compliance with the financial covenants referred to above, which computations
were made in accordance with GAAP.
</DIV>
<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="48%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="38%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="10%">&nbsp;</TD>
</TR>
<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">By:</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top"><DIV style="font-size: 1pt; border-top: 1px solid #000000">&nbsp;</DIV>
Its: Chief Financial Officer
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B><I>Credit and Security Agreement<br>
WFBC/Iridex (domestic facility)</I></B>

</DIV>



<P align="center" style="font-size: 10pt"><!-- Folio -->Exhibit E &#151; Page 2<!-- /Folio -->
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="font-family: Helvetica,Arial,sans-serif">

<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>Exhibit&nbsp;F to Credit and Security Agreement</B>
</DIV>


<DIV align="Center" style="font-size: 10pt; margin-top: 6pt"><U><B>PERMITTED LIENS</B></U>

</DIV>
<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="27%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="24%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="15%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD nowrap align="center" style="border-bottom: 1px solid #000000">Creditor</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" style="border-bottom: 1px solid #000000">Collateral</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" style="border-bottom: 1px solid #000000">Jurisdiction</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" style="border-bottom: 1px solid #000000">Filing Date</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3" style="border-bottom: 1px solid #000000">Filing No.</TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">American Medical
Systems (AMS)&nbsp;and
Laserscope
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">All assets of the
Company
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">DE
</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">08/16/2007
</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">73128476</TD>
    <TD nowrap valign="top">&nbsp;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>


<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><U><B>INDEBTEDNESS</B></U>
</DIV>

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="22%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="33%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3">Current Principal</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3">Maturity</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3">Monthly</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD nowrap align="center" style="border-bottom: 1px solid #000000">Creditor</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3" style="border-bottom: 1px solid #000000">Amt.</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3" style="border-bottom: 1px solid #000000">Date</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3" style="border-bottom: 1px solid #000000">Payment</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3" style="border-bottom: 1px solid #000000">Collateral</TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">AMS</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">420,192.22</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="center" nowrap>Aug. 7, 2008</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">22,115.38</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="left">See Subordination Agreement</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">AMS</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">2,777,591.63</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="center" nowrap>Sept. 25, 2008</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">110,185</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="left">See Subordination Agreement</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">

<TD><DIV style="margin-left:15px; text-indent:-15px">AMS<SUP>1</SUP></DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">823,536</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="center">Sept.</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="center" nowrap>Approx $140,000</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="left">See Subordination Agreement</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>


<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><U><B>GUARANTIES</B></U>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">None.
</DIV>


<DIV align="left">
<DIV style="font-size: 3pt; margin-top: 16pt; width: 18%; border-top: 1px solid #000000">&nbsp;</DIV>
</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">
<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96"></TD>
</TR>

<TR valign="top">
    <TD nowrap align="left"><SUP>1</SUP></TD>
    <TD>&nbsp;</TD>
    <TD>This indebtedness relates to contractual POS the Company has
placed with AMS for inventory. The Company must prepay when the inventory is
delivered.</TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B><I>Credit and Security Agreement<br>
WFBC/Iridex (domestic facility)</I></B>

</DIV>




<P align="center" style="font-size: 10pt"><!-- Folio -->Exhibit F
&#151; Page 1<!-- /Folio -->
</DIV>



</BODY>
</HTML>
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10.2
<SEQUENCE>3
<FILENAME>f39469exv10w2.htm
<DESCRIPTION>EXHIBIT 10.2
<TEXT>
<HTML>
<HEAD>
<TITLE>exv10w2</TITLE>
</HEAD>
<BODY bgcolor="#FFFFFF">
<!-- PAGEBREAK -->
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="font-family: Helvetica,Arial,sans-serif">


<DIV align="right" style="font-size: 10pt; margin-top: 12pt"><B>Exhibit&nbsp;10.2</B>
</DIV>


<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>CREDIT AND SECURITY AGREEMENT<BR>
(EX-IM SUBFACILITY)</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">THIS CREDIT AND SECURITY AGREEMENT (EX-IM SUBFACILITY) (THE &#147;AGREEMENT&#148;) IS DATED MARCH 27, 2008,
AND IS ENTERED INTO BETWEEN IRIDEX CORPORATION, A DELAWARE CORPORATION (&#147;COMPANY&#148;), AND WELLS FARGO
BANK, NATIONAL ASSOCIATION (AS MORE FULLY DEFINED IN EXHIBIT A, &#147;WELLS FARGO&#148;), ACTING THROUGH ITS
WELLS FARGO BUSINESS CREDIT OPERATING DIVISION.
</DIV>


<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>RECITALS</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Company has asked Wells Fargo to provide it with a $5,000,000 revolving line of credit (the &#147;Line
of Credit&#148;) for working capital purposes, with such Line of Credit constituting a subfacility
within the Domestic Facility Agreement (defined below). Wells Fargo is agreeable to meeting
Company&#146;s request, provided that Company agrees to the terms and conditions of this Agreement.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">For purposes of this Agreement, capitalized terms not otherwise defined in the Agreement shall have
the meaning given them in Exhibit&nbsp;A.
</DIV>


<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left"><B>1.</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD><B>AMOUNT AND TERMS OF THE LINE OF CREDIT</B></TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left"><B>1.1</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD><B>Line of Credit; Limitations on Borrowings; Termination Date; Use of Proceeds</B>.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left">(a)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD><U>Line of Credit and Limitations on Borrowing</U>. Wells Fargo shall make Advances to
Company under the Line of Credit that in the aggregate do not exceed the lesser of (i)
$5,000,000 (the &#147;Maximum Line Amount&#148;), and (ii)&nbsp;the Borrowing Base limitations described in
Section&nbsp;1.2. Within these limits, Company may periodically borrow, prepay in whole or in
part, and reborrow. Wells Fargo has no obligation to make an Advance during a Default Period
or at any time Wells Fargo believes that an Advance would result in an Event of Default. The
Line of Credit provided for in this Agreement is subject to the limitations set forth in the
Domestic Facility Agreement and is deemed to be a subfacility within the &#147;Line of Credit&#148;
provided for in the Domestic Facility Agreement as set forth therein.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left">(b)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD><U>Maturity and Termination Dates</U>. Company may request Advances from the date that the
conditions set forth in Section&nbsp;3 are satisfied until the earlier of: (i)&nbsp;March&nbsp;27, 2009 (the
&#147;Maturity Date&#148;), (ii)&nbsp;the date Company terminates the Line of Credit, or (iii)&nbsp;the date Wells
Fargo terminates the Line of Credit following an Event of Default (the earliest of such dates,
the &#147;Termination Date&#148;). Provided that no Default or Event of Default has occurred and is
continuing, Company has provided Wells Fargo with a written notice of Company&#146;s election to
extend the Maturity Date no less than 45&nbsp;days prior to the then applicable Maturity Date, and
Wells Fargo has received the Facility Fee required under Section&nbsp;1.7(c), the Maturity Date may
be extended for consecutive one-year periods; provided that the final Maturity Date shall not
extend beyond the &#147;Maturity Date&#148;</TD>
</TR>

</TABLE>
</DIV>

<P align="center" style="font-size: 10pt"><!-- Folio -->&nbsp;<!-- /Folio -->
</DIV>

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<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="font-family: Helvetica,Arial,sans-serif">

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>provided for under the Domestic Facility Agreement, it being agreed that the Line of Credit
under this Agreement is co-terminus with the &#147;Line of Credit&#148; under the Domestic Facility
Agreement.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left">(c)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD><U>Use of Line of Credit Proceeds</U>. Company shall use the proceeds of Advances to
provide working capital to fulfill written export orders or contracts from customers outside
the U.S. to purchase goods or services from Company.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left">(d)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD><U>Revolving Notes</U>. Company&#146;s obligation to repay Line of Credit Advances, regardless
of how initiated under Section&nbsp;1.3, shall be evidenced by one or more revolving promissory
notes (as renewed, amended or replaced from time to time, the &#147;Revolving Notes&#148;).</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left"><B>1.2</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD><B>Borrowing Base; Mandatory Prepayment</B>.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left">(a)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD><U>Borrowing Base</U>. The borrowing base (the &#147;Borrowing Base&#148;) is an amount equal to:</TD>
</TR>

</TABLE>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 4%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) 90% or such lesser percentage of Eligible Accounts as Wells Fargo in its sole
discretion may deem appropriate; provided that, as of any date of determination, this rate
shall be reduced one (1)&nbsp;percent for each percentage point by which Dilution is in excess
of ten percent (10%), <U>plus</U>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 4%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) 75% or such lesser percentage of Eligible Inventory as Wells Fargo in its sole
discretion may deem appropriate; provided that no more than 60% of the aggregate
outstanding Advances under the Line of Credit may be supported by Eligible Inventory at any
time, <U>less</U>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 4%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii) the Borrowing Base Reserve, <U>less</U>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 4%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iv) Indebtedness that Company owes Wells Fargo that has not been advanced on the
Revolving Notes (other than Indebtedness constituting &#147;Advances&#148; under the Domestic
Facility Agreement), <U>less</U>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 4%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(v) Indebtedness that Wells Fargo in its sole discretion finds on the date of
determination to be equal to Wells Fargo&#146;s net credit exposure with respect to any swap,
derivative, foreign exchange, hedge, deposit, treasury management or similar product or
transaction extended to Company by Wells Fargo that is not otherwise described in Section&nbsp;1
and any Indebtedness owed by Company to Wells Fargo Merchant Services, L.L.C.
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left">(b)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD><U>MANDATORY PREPAYMENT; OVERADVANCES</U>. If unreimbursed Line of Credit Advances
evidenced by the Revolving Notes exceed the lesser of the Borrowing Base or the Maximum Line
Amount at any time, then Company shall immediately prepay the Revolving Notes in an amount
sufficient to eliminate the excess, unless Wells Fargo has delivered to Company an
Authenticated Record consenting to the Overadvance <U>prior</U> to its occurrence, in which
event the Overadvance shall be temporarily permitted on such terms and conditions as Wells
Fargo in its sole discretion may deem appropriate, including the payment of additional fees or
interest, or both.</TD>
</TR>

</TABLE>
</DIV>
<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B><i>Credit and Security Agreement<BR>
WFBC/Iridex (Ex-Im Subfacility)</i></B>

</DIV>


<P align="center" style="font-size: 10pt"><!-- Folio -->2<!-- /Folio -->
</DIV>

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<DIV style="font-family: Helvetica,Arial,sans-serif">


<DIV style="margin-top: 6pt"><TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">



</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left"><B>1.3</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD><B>Procedures for Line of Credit Advances</B>.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left">(a)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD><U>Advances to Operating Account</U>. Advances shall be credited to Company&#146;s demand
deposit account maintained with Wells Fargo (the &#147;Operating Account&#148;), unless the parties
agree in a Record Authenticated by both of them to disburse to another account.</TD>
</TR>

</TABLE>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 4%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) <U>Advances upon Company&#146;s Request</U>. Line of Credit Advances may be funded
upon Company&#146;s request. No request will be deemed received until Wells Fargo acknowledges
receipt, and Company, if requested by Wells Fargo, confirms the request in an Authenticated
Record. Company shall repay all Advances, even if the Person requesting the Advance on
behalf of Company lacked authorization.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 6%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(A) <U>Floating Rate Advances</U>. If Company wants a Floating Rate Advance,
it shall make the request no later than 9:30 a.m. Pasadena, California Time on the
Business Day on which it wants the Floating Rate Advance to be funded, which
request shall specify the principal Advance amount being requested.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 6%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(B) <U>LIBOR Advances</U>. If Company wants a LIBOR Advance, it shall make
the request no later than 9:30 a.m. Pasadena, California Time three (3)&nbsp;Business
Days preceding the Business Day on which it wants the LIBOR Advance to be funded,
which request shall specify both the principal Advance amount and Interest Period
being requested. No more than four (4)&nbsp;separate LIBOR Advance Interest Periods may
be outstanding at any time under this Agreement and the Domestic Facility
Agreement, on a combined basis. Each LIBOR Advance shall be in multiples of
$1,000,000 and in the minimum amount of at least $1,000,000. LIBOR Advances are
not available for Advances made through the Loan Manager Service, and shall not be
available during Default Periods. Notwithstanding anything to the contrary in this
Agreement, the aggregate outstanding amount of LIBOR Advances under this Agreement
and the Domestic Facility Agreement shall not exceed $6,000,000 (the &#147;LIBOR
Limitation Amount&#148;).
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 4%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) <U>Advances through Loan Manager</U>. If Wells Fargo has separately agreed that
Company may use the Wells Fargo Loan Manager service (&#147;Loan Manager&#148;), Line of Credit
Advances will be initiated by Wells Fargo and credited to the Operating Account as Floating
Rate Advances as of the end of each Business Day in an amount sufficient to maintain an
agreed upon ledger balance in the Operating Account, subject only to Line of Credit
availability as provided in Section&nbsp;1.1(a). If Wells Fargo terminates Company&#146;s access to
Loan Manager, Company may continue to request Line of Credit Advances as provided in
Section&nbsp;1.3(a)(i). Wells Fargo shall have no obligation to make an Advance through Loan
Manager during a Default Period, or in an amount in excess of Line of Credit availability,
and may terminate Loan Manager at any time in its sole discretion.
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left">(b)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD><U>Protective Advances; Advances to Pay Indebtedness Due</U>. Wells Fargo may initiate a
Floating Rate Advance on the Line of Credit in its sole discretion for</TD>
</TR>

</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B><i>Credit and Security Agreement<BR>
WFBC/Iridex (Ex-Im Subfacility)</i></B>
</DIV>


<P align="center" style="font-size: 10pt"><!-- Folio -->3<!-- /Folio -->
</DIV>

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<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="font-family: Helvetica,Arial,sans-serif">


<DIV style="margin-top: 6pt"><TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">



</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>any reason at any time, without
Company&#146;s compliance with any of the
conditions of this Agreement, and (i)
disburse the proceeds directly to third
Persons in order to protect Wells
Fargo&#146;s interest in Collateral or to
perform any of Company&#146;s obligations
under this Agreement, or (ii)&nbsp;apply the
proceeds to the amount of any
Indebtedness then due and payable to
Wells Fargo.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left"><B>1.4</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD><B>LIBOR Advances</B>.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left">(a)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD><U>Funding Line of Credit Advances as LIBOR Advances for Fixed Interest Periods</U>.
Subject to the LIBOR Limitation Amount, Company may fund a Line of Credit Advance as a LIBOR
Advance for one, three, or six month periods (each period an &#147;Interest Period&#148;, as more fully
defined in Exhibit&nbsp;A).</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left">(b)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD><U>Procedure for Converting Floating Rate Advances to LIBOR Advances</U>. Subject to the
LIBOR Limitation Amount, Company may request that all or any part of an outstanding Floating
Rate Advance be converted to a LIBOR Advance, provided that no Default Period is in effect,
and that Wells Fargo receives the request no later than 9:30 a.m. Pasadena, California Time
three (3)&nbsp;Business Days preceding the Business Day on which Company wishes the conversion to
become effective. Each request shall (i)&nbsp;specify the principal amount of the Floating Rate
Advance to be converted, (ii)&nbsp;the Business Day of conversion, and (iii)&nbsp;the Interest Period
desired. The request shall be confirmed in an Authenticated Record if requested by Wells
Fargo. Each conversion to a LIBOR Advance shall be in multiples of $1,000,000 and in the
minimum amount of at least $1,000,000.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left">(c)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD><U>Expiring LIBOR Advance Interest Periods</U>. Unless Company requests a new LIBOR
Advance, or prepays an outstanding LIBOR Advance at the expiration of an Interest Period,
Wells Fargo shall convert each LIBOR Advance to a Floating Rate Advance on the last day of the
expiring Interest Period. If no Default Period is in effect, Company may request that all or
part of any expiring LIBOR Advance be renewed as a new LIBOR Advance, provided that Wells
Fargo receives the request no later than 9:30 a.m. Pasadena, California Time three (3)
Business Days preceding the Business Day that constitutes the first day of the new Interest
Period. Each request shall specify the principal amount of the expiring LIBOR Advance to be
continued and Interest Period desired, and shall be confirmed in an Authenticated Record if
requested by Wells Fargo. Each renewal of a LIBOR Advance shall be in multiples of $1,000,000
and in the minimum amount of at least $1,000,000.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left">(d)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD><U>Quotation of LIBOR Advance Interest Rates</U>. Wells Fargo shall, with respect to any
request for a new or renewal LIBOR Advance, or the conversion of a Floating Rate Advance to a
LIBOR Advance, provide Company with a LIBOR quote for each Interest Period identified by
Company on the Business Day on which the request was made, if the request is received by Wells
Fargo no later than 9:30 a.m. Pasadena, California Time three (3)&nbsp;Business Days preceding the
Business Day on which Company has requested that the LIBOR Advance be made effective. If
Company does not immediately accept a LIBOR quote, the quoted rate shall expire and any
subsequent request for a LIBOR quote shall be subject to redetermination by Wells Fargo.</TD>
</TR>

</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B><i>Credit and Security Agreement<BR>
WFBC/Iridex (Ex-Im Subfacility)</i></B>
</DIV>


<P align="center" style="font-size: 10pt"><!-- Folio -->4<!-- /Folio -->
</DIV>

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<DIV style="font-family: Helvetica,Arial,sans-serif">

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left">(e)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD><U>Taxes and Regulatory Costs</U>. Company shall also pay Wells Fargo with respect to any
LIBOR Advance all (i)&nbsp;withholdings, interest equalization taxes, stamp taxes or other taxes
(except income and franchise taxes) imposed by any domestic or foreign governmental authority
that are related to LIBOR, and (ii)&nbsp;future, supplemental, emergency or other changes in the
LIBOR Reserve Percentage, the assessment rates imposed by the Federal Deposit Insurance
Corporation, or similar costs imposed by any domestic or foreign governmental authority or
resulting from compliance by Wells Fargo with any request or directive (whether or not having
the force of law) from any central bank or other governmental authority that are related to
LIBOR but not otherwise included in the calculation of LIBOR. In determining which of these
amounts are attributable to an existing LIBOR Advance, any reasonable allocation made by Wells
Fargo among its operations shall be deemed conclusive and binding.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left"><B>1.5</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD><B>Collection of Accounts and Application to Revolving Notes</B>.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left">(a)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD><U>The Collection Account</U>. Company has granted a security interest to Wells Fargo in
the Collateral, including all Accounts. Except as otherwise agreed by both parties in an
Authenticated Record, all Proceeds of Accounts and other Collateral, upon receipt or
collection, shall be deposited each Business Day into the Collection Account. Funds so
deposited (&#147;Account Funds&#148;) may only be withdrawn from the Collection Account by Wells Fargo
for application in accordance with Section&nbsp;1.5(c) or as otherwise provided in the Loan
Documents or by applicable law.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left">(b)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD><U>Payment of Accounts by Company&#146;s Account Debtors</U>. Company shall instruct all account
debtors to make payments either directly to the Lockbox for deposit by Wells Fargo directly to
the Collection Account, or instruct them to deliver such payments to Wells Fargo by wire
transfer, ACH, or other means as Wells Fargo may direct for deposit to the Collection Account
or for direct application to the Line of Credit. If Company receives a payment or the Proceeds
of Collateral directly, Company will promptly deposit the payment or Proceeds into the
Collection Account. Until deposited, it will hold all such payments and Proceeds in trust for
Wells Fargo without commingling with other funds or property. All deposits held in the
Collection Account shall constitute Proceeds of Collateral and shall not constitute the
payment of Indebtedness.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left">(c)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD><U>Application of Payments to Revolving Notes</U>. Wells Fargo will withdraw Account Funds
deposited to the Collection Account and pay down borrowings on the Line of Credit by applying
them to the Revolving Notes on a pro rata basis on the first Business Day following the
Business Day of deposit to the Collection Account, or, if payments are received by Wells Fargo
that are not first deposited to the Collection Account pursuant to any treasury management
service provided to Company by Wells Fargo, such payments shall be applied to the Revolving
Notes as provided in the Master Agreement for Treasury Management Services and the relevant
service description.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left"><B>1.6</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD><B>Interest and Interest Related Matters</B>.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left">(a)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD><U>Interest Rates Applicable to Line of Credit</U>. Except as otherwise provided in this
Agreement, the unpaid principal amount of each Line of Credit Advance</TD>
</TR>

</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B><i>Credit and Security Agreement<BR>
WFBC/Iridex (Ex-Im Subfacility)</i></B>
</DIV>


<P align="center" style="font-size: 10pt"><!-- Folio -->5<!-- /Folio -->
</DIV>

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<DIV style="font-family: Helvetica,Arial,sans-serif">

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>evidenced by the Revolving Notes shall accrue interest at an annual interest rate
calculated as follows:</TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD><U><B>Floating Rate</B></U><B>:</B></TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Line of Credit Advances = Prime Rate plus the applicable Margin, which interest
rate shall change whenever the Prime Rate changes (the &#147;Floating Rate&#148;); or</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD><U><B>LIBOR Advance Rate for One-, Three-, or Six-Month Interest Periods</B></U><B>:</B></TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Line of Credit Advances = LIBOR plus the applicable Margin (the &#147;LIBOR Advance
Rate&#148;)</TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Multiple Advances under the Line of Credit may simultaneously accrue interest at both the
Floating Rate and at the LIBOR Advance Rate, subject to the limitations of Section
1.3(a)(i).</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>The Margins through and including the adjustment occurring as specified below shall be
0.75% per annum for Floating Rate Advances, and 3.50% per annum for LIBOR Advances. The
Margins shall be reduced by 0.25% per annum on a one-time basis if the Company&#146;s Earnings
Before Taxes, Depreciation, and Amortization for any fiscal year ending on or after
December&nbsp;31, 2008, is greater than $1,500,000.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>The Margin reduction provided for in the immediately preceding paragraph shall become
effective on the first calendar day of the first calendar month following the month of
receipt by Wells Fargo of fiscal year end financial statements that have been audited by
independent certified public accountants acceptable to Wells Fargo.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>If amended or restated financial statements would change previously calculated Margins, or
if Wells Fargo determines that any financial statements have materially misstated Company&#146;s
financial condition, then Wells Fargo may, using the most accurate information available to
it (it being agreed that if Company files amended and restated financial statements with
the U.S. Securities and Exchange Commission that modify financial statements previously
submitted to Wells Fargo, such amended and restated financial statements shall be deemed to
be the most accurate information available to Wells Fargo), recalculate the financial test
or tests governing the Margins and retroactively reduce or increase the Margins from the
date of receipt of such amended or restated financial statements and charge Company
additional interest, which may be imposed on them from the beginning of the appropriate
month to which the restated statements or recalculated financial tests relate, as Wells
Fargo in its sole discretion deems appropriate.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left">(b)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD><U>Minimum Interest Charge</U>. &#091;INTENTIONALLY OMITTED&#093;.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left">(c)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD><U>Default Interest Rate</U>. Commencing on the day an Event of Default occurs, through and
including the date identified by Wells Fargo in a Record as the date</TD>
</TR>

</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B><i>Credit and Security Agreement<BR>
WFBC/Iridex (Ex-Im Subfacility)</i></B>
</DIV>


<P align="center" style="font-size: 10pt"><!-- Folio -->6<!-- /Folio -->
</DIV>

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<DIV style="font-family: Helvetica,Arial,sans-serif">

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>that the Event of Default has been cured or waived (each such period a &#147;Default Period&#148;),
or during a time period specified in Section&nbsp;1.9, or at any time following the Termination
Date, in Wells Fargo&#146;s sole discretion and without waiving any of its other rights or
remedies, the principal amount of the Revolving Notes shall bear interest at a rate that is
three percent (3.0%) above the contractual rate set forth in Section&nbsp;1.6(a) (the &#147;Default
Rate&#148;), or any lesser rate that Wells Fargo may deem appropriate, starting on the first day
of the month in which the Default Period begins through the last day of that Default
Period, or any shorter time period to which Wells Fargo may agree in an Authenticated
Record.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left">(d)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD><U>Interest Accrual on Payments Applied to Revolving Notes</U>. Payments received by Wells
Fargo shall be applied to the Revolving Notes as provided in Section&nbsp;1.4(c), but the principal
amount paid down shall continue to accrue interest through the end of the first Business Day
following the Business Day that the payment was applied to the Revolving Notes.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left">(e)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD><U>Usury</U>. No interest rate shall be effective which would result in a rate greater than
the highest rate permitted by law. Payments in the nature of interest and other charges made
under any Loan Documents that are later determined to be in excess of the limits imposed by
applicable usury law will be deemed to be a payment of principal, and the Indebtedness shall
be reduced by that amount so that such payments will not be deemed usurious.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left"><B>1.7</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD><B>Fees</B>.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left">(a)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD><U>Origination Fee</U>. &#091;INTENTIONALLY OMITTED&#093;.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left">(b)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD><U>Unused Line Fee</U>. &#091;INTENTIONALLY OMITTED&#093;.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left">(c)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD><U>Facility Fees</U>. On each anniversary date of this Agreement of this Agreement, Company
shall pay Wells Fargo a facility fee equal to 1.5% of the Maximum Line Amount, which fee when
paid shall be deemed fully earned and non-refundable under all circumstances. In addition to
the foregoing, on or before March&nbsp;27, 2009, Company shall pay Wells Fargo an additional fee
equal to the product of (i)&nbsp;1.5% of the Maximum Line Amount, multiplied by (ii)&nbsp;0.1945 (the
&#147;Supplementary Fee&#148;). The Supplementary Fee is in addition to the annual fee required in the
first sentence of this paragraph.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left">(d)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD><U>Collateral Exam Fees</U>. Company shall pay Wells Fargo fees in connection with any
collateral exams, audits or inspections conducted by or on behalf of Wells Fargo at the
current rates established from time to time by Wells Fargo as its collateral exam fees (which
fees are currently $105 per hour per collateral examiner), together with all actual
out-of-pocket costs and expenses incurred in conducting any collateral examination or
inspection.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left">(e)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD><U>Collateral Monitoring Fees</U>. Company shall pay Wells Fargo a fee at the rates
established from time to time by Wells Fargo (or any other Person providing such services to
the Wells Fargo, including, but not limited to, Collateral Services, Inc.) as its Collateral
monitoring fees (which fees currently consist of a</TD>
</TR>

</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B><i>Credit and Security Agreement<BR>
WFBC/Iridex (Ex-Im Subfacility)</i></B>

</DIV>


<P align="center" style="font-size: 10pt"><!-- Folio -->7<!-- /Folio -->
</DIV>

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<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="font-family: Helvetica,Arial,sans-serif">

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>monthly fee of $250), due and payable monthly in advance on the first day of the month.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left">(f)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD><U>Line of Credit Termination and/or Reduction Fees</U>. &#091;INTENTIONALLY OMITTED&#093;.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left">(g)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD><U>Overadvance Fees</U>. Company shall pay a $500 Overadvance fee for each day that an
Overadvance exists which was not agreed to by Wells Fargo in an Authenticated Record prior to
its occurrence; provided that Wells Fargo&#146;s acceptance of the payment of such fees shall not
constitute either consent to the Overadvance or waiver of the resulting Event of Default.
Company shall pay additional Overadvance fees and interest in such amounts and on such terms
as Wells Fargo in its sole discretion may consider appropriate for any Overadvance to which
Wells Fargo has specifically consented in an Authenticated Record prior to its occurrence.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left">(h)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD><U>Treasury Management Fees</U>. Company will pay service fees to Wells Fargo for treasury
management services provided pursuant to the Master Agreement for Treasury Management Services
or any other agreement entered into by the parties, in the amount prescribed in Wells Fargo&#146;s
current service fee schedule.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left">(i)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD><U>Other Fees and Charges</U>. Wells Fargo may impose additional fees and charges during a
Default Period for (i)&nbsp;waiving an Event of Default, or for (ii)&nbsp;the administration of
Collateral by Wells Fargo. All such fees and charges shall be imposed at Wells Fargo&#146;s sole
discretion following oral notice to Company on either an hourly, periodic, or flat fee basis,
and in lieu of or in addition to imposing interest at the Default Rate, and Company&#146;s request
for an Advance following such notice shall constitute Company&#146;s agreement to pay such fees and
charges.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left">(j)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD><U>LIBOR Advance Breakage Fees</U>. Company may prepay any LIBOR Advance at any time in any
amount, whether voluntarily or by acceleration; <U>provided</U>,<U> however</U>, that if the
LIBOR Advance is prepaid, Company shall pay Wells Fargo upon demand a LIBOR Advance breakage
fee equal to the sum of the discounted monthly differences for each month from the month of
prepayment through the month in which such Interest Period matures, calculated as follows for
each such month:</TD>
</TR>

</TABLE>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 4%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) <U>Determine</U> the amount of interest which would have accrued each month on
the amount prepaid at the interest rate applicable to such amount had it remained
outstanding until the last day of the applicable Interest Period.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 4%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) <U>Subtract</U> from the amount determined in (i)&nbsp;above the amount of interest
which would have accrued for the same month on the amount prepaid for the remaining term of
such Interest Period at LIBOR in effect on the date of prepayment for new loans made for
such term in a principal amount equal to the amount prepaid.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 4%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii) If the result obtained in (ii)&nbsp;for any month is greater than zero, discount that
difference by LIBOR used in (ii)&nbsp;above.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B><i>Credit and Security Agreement<BR>
WFBC/Iridex (Ex-Im Subfacility)</i></B>
</DIV>


<P align="center" style="font-size: 10pt"><!-- Folio -->8<!-- /Folio -->
</DIV>

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<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="font-family: Helvetica,Arial,sans-serif">

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD><B>Company acknowledges that prepayment of the Revolving Notes may result in Wells Fargo
incurring additional costs, expenses or liabilities, and that it is difficult to ascertain
the full extent of such costs, expenses or liabilities. Company agrees to pay the
above-described LIBOR Advance breakage fee and agrees that this amount represents a
reasonable estimate of the LIBOR Advance breakage costs, expenses and/or liabilities of
Wells Fargo.</B></TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left"><B>1.8</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD><B>Interest Accrual; Principal and Interest Payments; Computation</B>.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left">(a)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD><U>Interest Payments and Interest Accrual</U>. Accrued and unpaid interest under the
Revolving Notes shall be due and payable on the first day of each month (each an &#147;Interest
Payment Date&#148;) and on the Termination Date, and shall be paid in the manner provided in
Section&nbsp;1.4(c). Interest shall accrue from the most recent date to which interest has been
paid or, if no interest has been paid, from the date of Advance to the Interest Payment Date.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left">(b)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD><U>Payment of Revolving Notes Principal</U>. The principal amount of the Revolving Notes
shall be paid from time to time as provided in this Agreement, and shall be fully due and
payable on the Termination Date.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left">(c)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD><U>Payments Due on Non-Business Days</U>. If an Interest Payment Date or the Termination
Date falls on a day which is not a Business Day, payment shall be made on the next Business
Day, and interest shall continue to accrue during that time period.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left">(d)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD><U>Computation of Interest and Fees</U>. Interest accruing on the unpaid principal amount
of the Revolving Notes and fees payable under this Agreement shall be computed on the basis of
the actual number of days elapsed in a year of 360&nbsp;days.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left">(e)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD><U>Liability Records</U>. Wells Fargo shall maintain accounting and bookkeeping records of
all Advances and payments under the Line of Credit and all other Indebtedness due to Wells
Fargo in such form and content as Wells Fargo in its sole discretion deems appropriate. Wells
Fargo&#146;s calculation of current Indebtedness shall be presumed correct unless proven otherwise
by Company. Upon Wells Fargo&#146;s request, Company will admit and certify in a Record the exact
principal balance of the Indebtedness that Company then believes to be outstanding. Any
billing statement or accounting provided by Wells Fargo shall be conclusive and binding unless
Company notifies Wells Fargo in a detailed Record of its intention to dispute the billing
statement or accounting within 30&nbsp;days of receipt.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left">(f)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD><U>Pro Rata Application</U>. All payments or other sums received by Wells Fargo and applied
to the Revolving Notes shall be applied on a pro rata basis.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left"><B>1.9</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD><B>Termination or Reduction of Line of Credit by Company; Notice</B>. Company may terminate or
reduce the Line of Credit at any time prior to the Maturity Date, if it (i)&nbsp;delivers an
Authenticated Record notifying Wells Fargo of its intentions at least 10 Business Days prior
to the proposed Termination Date (which notice may be contingent on the occurrence of an
event; provided that</TD>
</TR>

</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B><i>Credit and Security Agreement<BR>
WFBC/Iridex (Ex-Im Subfacility)</i></B>

</DIV>


<P align="center" style="font-size: 10pt"><!-- Folio -->9<!-- /Folio -->
</DIV>

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<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="font-family: Helvetica,Arial,sans-serif">

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>(x) if Company does not terminate or reduce the Line of Credit on the date specified in
such notice, Company may subsequently terminate or reduce the Line of Credit only upon
delivering Wells Fargo a new notice, as provided above, and complying with all other terms
of this paragraph, and (y)&nbsp;no more than three such notices may be provided within any 60
consecutive day period), (ii)&nbsp;pays Wells Fargo the termination fee set forth in Section
1.7(f), and (iii)&nbsp;pays the Indebtedness in full or down to the reduced Maximum Line Amount.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left"><B>1.10</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD><B>Facility Subject to Ex-Im Bank Rules</B>. Company acknowledges that Wells Fargo is willing to
make the Ex-Im Subfacility available to Company because the Ex-Im Bank is willing to guaranty
payment of a significant portion of the Indebtedness pursuant to the Master Guarantee
Agreement (as defined in the Borrower Agreement). Accordingly, in the event of any
inconsistency between this Agreement and the Master Guarantee Agreement or the Borrower
Agreement, the provision that is the more stringent on Company shall control with respect to
Advances under this Agreement and procedures related thereto. This Agreement is supplemental
to the Borrower Agreement.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left"><B>2.</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD><B>SECURITY INTEREST AND OCCUPANCY OF COMPANY&#146;S PREMISES</B></TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left"><B>2.1</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD><B>Grant of Security Interest</B>. Company hereby pledges, assigns and grants to Wells Fargo, for
the benefit of Wells Fargo and as agent for Wells Fargo Merchant Services, L.L.C., a Lien and
security interest (collectively referred to as the &#147;Security Interest&#148;) in the Collateral, as
security for the payment and performance of the Indebtedness. Following request by Wells
Fargo, Company shall grant Wells Fargo, for the benefit of Wells Fargo and as agent for Wells
Fargo Merchant Services, L.L.C., a Lien and security interest in all commercial tort claims
that it may have against any Person.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left"><B>2.2</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD><B>Notifying Account Debtors and Other Obligors; Collection of Collateral</B>. Wells Fargo may at
any time (whether or not a Default Period then exists) deliver a Record giving an account
debtor or other Person obligated to pay an Account, a General Intangible, or other amount due,
notice that the Account, General Intangible, or other amount due has been assigned to Wells
Fargo for security and must be paid directly to Wells Fargo. Company shall join in giving
such notice and shall Authenticate any Record giving such notice upon Wells Fargo&#146;s request.
After Company or Wells Fargo gives such notice, Wells Fargo may, but need not, in Wells
Fargo&#146;s or in Company&#146;s name, demand, sue for, collect or receive any money or property at any
time payable or receivable on account of, or securing, such Account, General Intangible, or
other amount due, or grant any extension to, make any compromise or settlement with or
otherwise agree to waive, modify, amend or change the obligations (including collateral
obligations) of any account debtor or other obligor. Wells Fargo may, in Wells Fargo&#146;s name
or in Company&#146;s name, as Company&#146;s agent and attorney-in-fact, notify the United States Postal
Service to change the address for delivery of Company&#146;s mail to any address designated by
Wells Fargo, otherwise intercept Company&#146;s mail, and receive, open and dispose of Company&#146;s
mail, applying all Collateral as permitted under this Agreement and holding all other mail for
Company&#146;s account or forwarding such mail to Company&#146;s last known address.</TD>
</TR>

</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B><i>Credit and Security Agreement<BR>
WFBC/Iridex (Ex-Im Subfacility)</i></B>
</DIV>


<P align="center" style="font-size: 10pt"><!-- Folio -->10<!-- /Folio -->
</DIV>

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<DIV style="font-family: Helvetica,Arial,sans-serif">

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left"><B>2.3</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD><B>Assignment of Insurance</B>. As additional security for the Indebtedness, Company hereby assigns
to Wells Fargo and to Wells Fargo Merchant Services, L.L.C., all rights of Company under every
policy of insurance covering the Collateral and all business records and other documents
relating to it, and all monies (including proceeds and refunds) that may be payable under any
policy, and Company hereby directs the issuer of each policy to pay all such monies directly
to Wells Fargo. At any time, whether or not a Default Period then exists, Wells Fargo may
(but need not), in Wells Fargo&#146;s or Company&#146;s name, execute and deliver proofs of claim,
receive payment of proceeds and endorse checks and other instruments representing payment of
the policy of insurance, and adjust, litigate, compromise or release claims against the issuer
of any policy. Any monies received under any insurance policy assigned to Wells Fargo, other
than liability insurance policies, or received as payment of any award or compensation for
condemnation or taking by eminent domain, shall be paid to Wells Fargo and, as determined by
Wells Fargo in its sole discretion, either be applied to prepayment of the Indebtedness or
disbursed to Company under staged payment terms reasonably satisfactory to Wells Fargo for
application to the cost of repairs, replacements, or restorations which shall be effected with
reasonable promptness and shall be of a value at least equal to the value of the items or
property destroyed.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left"><B>2.4</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD><B>Company&#146;s Premises</B>.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left">(a)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD><U>Wells Fargo&#146;s Right to Occupy Company&#146;s Premises</U>. Company hereby grants to Wells
Fargo the right, at any time during a Default Period and without notice or consent, to take
exclusive possession of all locations where Company conducts its business or has any rights of
possession, including the locations described on Exhibit&nbsp;B (the &#147;Premises&#148;), until the earlier
of (i)&nbsp;payment in full and discharge of all Indebtedness and termination of the Line of
Credit, or (ii)&nbsp;final sale or disposition of all items constituting Collateral and delivery of
those items to purchasers.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left">(b)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD><U>Wells Fargo&#146;s Use of Company&#146;s Premises</U>. Wells Fargo may use the Premises to store,
process, manufacture, sell, use, and liquidate or otherwise dispose of items that are
Collateral, and for any other incidental purposes deemed appropriate by Wells Fargo in good
faith.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left">(c)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD><U>Company&#146;s Obligation to Reimburse Wells Fargo</U>. Wells Fargo shall not be obligated to
pay rent or other compensation for the possession or use of any Premises, but if Wells Fargo
elects to pay rent or other compensation to the owner of any Premises in order to have access
to the Premises, then Company shall promptly reimburse Wells Fargo all such amounts, as well
as all taxes, fees, charges and other expenses at any time payable by Wells Fargo with respect
to the Premises by reason of the execution, delivery, recordation, performance or enforcement
of any terms of this Agreement.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left"><B>2.5</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD><B>License</B>. Without limiting the generality of any other Security Document, Company hereby
grants to Wells Fargo a non-exclusive, worldwide and royalty-free license to use or otherwise
exploit all Intellectual Property Rights of Company for the purpose of: (a)&nbsp;completing the
manufacture of any in-process materials during any Default Period so that such materials
become saleable</TD>
</TR>

</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B><i>Credit and Security Agreement<BR>
WFBC/Iridex (Ex-Im Subfacility)</i></B>
</DIV>


<P align="center" style="font-size: 10pt"><!-- Folio -->11<!-- /Folio -->
</DIV>

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<DIV style="font-family: Helvetica,Arial,sans-serif">

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Inventory, all in accordance with the same quality standards previously adopted by Company
for its own manufacturing and subject to Company&#146;s reasonable exercise of quality control;
and (b)&nbsp;selling, leasing or otherwise disposing of any or all Collateral during any Default
Period.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left"><B>2.6</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD><B>Financing Statements</B>. Company authorizes Wells Fargo to file financing statements describing
Collateral to perfect Wells Fargo&#146;s Security Interest in the Collateral, and Wells Fargo may
describe the Collateral as &#147;all personal property&#148; or &#147;all assets&#148; or describe specific items
of Collateral including commercial tort claims as Wells Fargo may consider necessary or useful
to perfect the Security Interest. All financing statements filed before the date of this
Agreement to perfect the Security Interest were authorized by Company and are hereby
re-authorized. Following the termination of the Line of Credit and payment of all
Indebtedness, Wells Fargo shall, at Company&#146;s expense and within the time periods required
under applicable law, release or terminate any filings or other agreements that perfect the
Security Interest.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left"><B>2.7</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD><B>Setoff</B>. Wells Fargo may at any time, in its sole discretion and without demand or notice to
anyone, setoff any liability owed to Company by Wells Fargo against any Indebtedness then due
and unpaid.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left"><B>2.8</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD><B>Collateral Related Matters</B>. This Agreement does not contemplate a sale of Accounts or
chattel paper, and, as provided by law, Company is entitled to any surplus and shall remain
liable for any deficiency. Wells Fargo&#146;s duty of care with respect to Collateral in its
possession (as imposed by law) will be deemed fulfilled if it exercises reasonable care in
physically keeping such Collateral, or in the case of Collateral in the custody or possession
of a bailee or other third Person, exercises reasonable care in the selection of the bailee or
third Person, and Wells Fargo need not otherwise preserve, protect, insure or care for such
Collateral. Wells Fargo shall not be obligated to preserve rights Company may have against
prior parties, to liquidate the Collateral at all or in any particular manner or order or
apply the Proceeds of the Collateral in any particular order of application. Wells Fargo has
no obligation to clean-up or prepare Collateral for sale. Company waives any right it may
have to require Wells Fargo to pursue any third Person for any of the Indebtedness.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left"><B>2.9</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD><B>Notices Regarding Disposition of Collateral</B>. If notice to Company of any intended
disposition of Collateral or any other intended action is required by applicable law in a
particular situation, such notice will be deemed commercially reasonable if given in the
manner specified in Section&nbsp;7.4 at least ten calendar days before the date of intended
disposition or other action.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left"><B>3.</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD><B>CONDITIONS PRECEDENT</B></TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left"><B>3.1</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD><B>Conditions Precedent to Initial Advance</B>. Wells Fargo&#146;s obligation to make the initial
Advance shall be subject to the condition that Wells Fargo shall have received and accepted
this Agreement and each of the Loan Documents, fees, and other documents and information
described in Exhibit&nbsp;C, executed and in form and content satisfactory to Wells Fargo (such
date that all such items have been received and accepted by Wells Fargo, the &#147;Closing Date&#148;).</TD>
</TR>

</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B><i>Credit and Security Agreement<BR>
WFBC/Iridex (Ex-Im Subfacility)</i></B>
</DIV>


<P align="center" style="font-size: 10pt"><!-- Folio -->12<!-- /Folio -->
</DIV>

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<DIV style="font-family: Helvetica,Arial,sans-serif">

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left"><B>3.2</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD><B>Additional Conditions Precedent to All Advances</B>. Wells Fargo&#146;s obligation to make any
Advance (including the initial Advance) shall be subject to the further additional conditions:
(a)&nbsp;that the representations and warranties described in Exhibit&nbsp;D are correct on the date of
the Advance, except to the extent that such representations and warranties relate solely to an
earlier date; and (b)&nbsp;that no event has occurred and is continuing, or would result from the
requested Advance that would result in an Event of Default.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left"><B>4.</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD><B>REPRESENTATIONS AND WARRANTIES</B></TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>To induce Wells Fargo to enter into this Agreement, Company makes the representations and
warranties described in Exhibit&nbsp;D. Any request for an Advance will be deemed a
representation by Company that all representations and warranties described in Exhibit&nbsp;D
are true, correct, and complete as of the time of the request, unless they relate
exclusively to an earlier date. Company shall promptly deliver a Record notifying Wells
Fargo of any change in circumstance that would affect the accuracy of any representation or
warranty, unless the representation and warranty specifically relates to an earlier date.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left"><B>5.</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD><B>COVENANTS</B></TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>So long as the Indebtedness remains unpaid, or the Line of Credit has not been terminated,
Company shall comply with each of the following covenants, unless Wells Fargo shall consent
otherwise in an Authenticated Record delivered to Company.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left"><B>5.1</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD><B>Reporting Requirements</B>. Company shall deliver to Wells Fargo the following information,
compiled where applicable using GAAP consistently applied, in form and content acceptable to
Wells Fargo:</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left">(a)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD><U>Annual Financial Statements</U>. As soon as available and in any event within 120&nbsp;days
after Company&#146;s fiscal year end, Company&#146;s audited financial statements prepared by an
independent certified public accountant acceptable to Wells Fargo, which shall include
Company&#146;s balance sheet, income statement, and statement of retained earnings and cash flows
prepared, if requested by Wells Fargo, on a consolidated and consolidating basis to include
Company&#146;s Subsidiaries. The annual financial statements shall be accompanied by a certificate
(the &#147;Compliance Certificate&#148;) in the form of Exhibit&nbsp;E that is signed by Company&#146;s chief
financial officer.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Each Compliance Certificate that accompanies an annual financial statement shall also be
accompanied by copies of all management letters prepared by Company&#146;s accountants.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left">(b)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD><U>Quarterly Financial Statements</U>. As soon as available and in any event within 30&nbsp;days
for the first two fiscal quarters in Company&#146;s fiscal year 2008 and 25&nbsp;days for each fiscal
quarter thereafter for preliminary statements and within 45&nbsp;days for final statements, in each
case after the end of each fiscal quarter, the unaudited/internal balance sheet and statements
of income and retained earnings of Company as at the end of and for such quarter and for the
year to date period then ended, prepared, if Wells Fargo so requests, on a consolidated</TD>
</TR>

</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B><i>Credit and Security Agreement<BR>
WFBC/Iridex (Ex-Im Subfacility)</i></B>
</DIV>


<P align="center" style="font-size: 10pt"><!-- Folio -->13<!-- /Folio -->
</DIV>

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<DIV style="font-family: Helvetica,Arial,sans-serif">

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>and consolidating basis to include Company&#146;s Subsidiaries, in reasonable detail, all
prepared in accordance with GAAP, subject to year-end audit adjustments and without
footnotes, and which fairly represent Company&#146;s financial position and the results of its
operations. The final quarterly financial statements (i.e., the statements due within 45
days after the end of each fiscal quarter) shall be accompanied by a Compliance Certificate
in the form of Exhibit&nbsp;E that is signed by Company&#146;s chief financial officer.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left">(c)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD><U>Monthly Financial Statements</U>. As soon as available and in any event within 30&nbsp;days
after the end of each month for each month through August, 2008 and within 25&nbsp;days after the
end of each month for each month thereafter, a Company prepared balance sheet, income
statement, and statement of retained earnings prepared for that month and for the year&#150;to-date
period then ended, prepared, if requested by Wells Fargo, on a consolidated and consolidating
basis to include Company&#146;s Subsidiaries, and stating in comparative form the figures for the
corresponding date and periods in the prior fiscal year, subject to year-end adjustments and
without footnotes. The monthly financial statements shall be accompanied by a Compliance
Certificate in the form of Exhibit&nbsp;E that is signed by Company&#146;s chief financial officer.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left">(d)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD><U>Collateral Reports</U>. No later than 15&nbsp;days after each month end (or more frequently
if Wells Fargo shall request it), (i)&nbsp;detailed agings of Company&#146;s accounts receivable and
accounts payable, a detailed inventory report, an inventory certification report (including a
listing by location and category), an accounts receivable reconciliation report, and a
calculation of Company&#146;s Accounts (including an accounts receivable ineligibility
certification), Eligible Accounts, Inventory and Eligible Inventory as of the end of that
month or shorter time period requested by Wells Fargo, (ii)&nbsp;Company shall provide Wells Fargo
with copies of bank account statements for each deposit or other account maintained by
Company, and (iii)&nbsp;Company shall deliver to Wells Fargo a current Borrowing Base Certificate
for Ex-Im Bank Guaranteed Line, the form of which is attached hereto as Exhibit&nbsp;G. Accounts
receivable agings shall be delivered electronically to Wells Fargo in accordance with the
instructions and procedures established by Wells Fargo from time to time.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left">(e)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD><U>Projections</U>. No later than 30&nbsp;days prior to each fiscal year end for a draft, and no
later than 30&nbsp;days after the commencement of each fiscal year for a final, projected balance
sheet and income statement and statement of retained earnings and cash flows for each month of
the next fiscal year for Company, certified as accurate by Company&#146;s chief financial officer
and accompanied by a statement of assumptions and supporting schedules and information.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left">(f)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD><U>Supplemental Reports</U>. Weekly, or more frequently if Wells Fargo requests, Company&#146;s
standard form of &#147;daily collateral report&#148;, together with sales reports, credit memos and
other accounts receivable adjustments, receivables schedules, collection reports, inventory
reports by category and location, copies of Company&#146;s five (5)&nbsp;largest invoices (by Dollar
amount) together with related shipment documents and delivery receipts for goods.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left">(g)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD><U>Litigation</U>. No later than three days after discovery, a Record notifying Wells Fargo
of any litigation or other proceeding before any court or governmental</TD>
</TR>

</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B><i>Credit and Security Agreement<BR>
WFBC/Iridex (Ex-Im Subfacility)</i></B>
</DIV>


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<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>agency which seeks a monetary recovery against Company in excess of $250,000.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left">(h)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD><U>Intellectual Property</U>. (i)&nbsp;No later than 30&nbsp;days before it acquires material
Intellectual Property Rights, a Record notifying Wells Fargo of Company&#146;s intention to acquire
such rights; (ii)&nbsp;except for transfers permitted under Section&nbsp;5.18, no later than 30&nbsp;days
before it disposes of material Intellectual Property Rights, a Record notifying Wells Fargo of
Company&#146;s intention to dispose of such rights, along with copies of all proposed documents and
agreements concerning the disposal of such rights as requested by Wells Fargo; (iii)&nbsp;promptly
upon discovery, a Record notifying Wells Fargo of (A)&nbsp;any Infringement of Company&#146;s
Intellectual Property Rights by any Person, (B)&nbsp;claims that Company is Infringing another
Person&#146;s Intellectual Property Rights and (C)&nbsp;any threatened cancellation, termination or
material limitation of Company&#146;s Intellectual Property Rights; and (iv)&nbsp;promptly upon receipt,
copies of all registrations and filings with respect to Company&#146;s Intellectual Property
Rights.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left">(i)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD><U>Defaults</U>. No later than three days after learning of the probable occurrence of any
Event of Default, a Record notifying Wells Fargo of the Event of Default and the steps being
taken by Company to cure the Event of Default.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left">(j)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD><U>Disputes</U>. Promptly upon discovery, a Record notifying Wells Fargo of (i)&nbsp;any
disputes or claims by Company&#146;s customers exceeding $250,000 in the aggregate during any
three-month period; (ii)&nbsp;credit memos not previously reported in Section&nbsp;5.1(e); and (iii)&nbsp;any
goods returned to or recovered by Company outside of the ordinary course of business or in the
ordinary course of business but with a value in an amount in excess of $250,000.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left">(k)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD><U>Changes in Officers and Directors</U>. Promptly following occurrence, a Record notifying
Wells Fargo of any change in the persons constituting Company&#146;s executive Officers and
Directors.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left">(l)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD><U>Collateral</U>. Promptly upon discovery, a Record notifying Wells Fargo of any loss of
or material damage to any Collateral or of any substantial adverse change in any Collateral or
the prospect of its payment.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left">(m)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD><U>Commercial Tort Claims</U>. Promptly upon discovery, a Record notifying Wells Fargo of
any commercial tort claims brought by Company against any Person, including the name and
address of each defendant, a summary of the facts, an estimate of Company&#146;s damages, copies of
any complaint or demand letter submitted by Company, and such other information as Wells Fargo
may request.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left">(n)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD><U>Reports to Owners</U>. Promptly upon distribution, copies of all financial statements,
reports and proxy statements which Company shall have sent to its Owners; provided that
delivery to Wells Fargo of an email link that enables Wells Fargo to obtain complete copies of
the foregoing statements and reports shall satisfy such requirement.</TD>
</TR>

</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B><i>Credit and Security Agreement<BR>
WFBC/Iridex (Ex-Im Subfacility)</i></B>
</DIV>


<P align="center" style="font-size: 10pt"><!-- Folio -->15<!-- /Folio -->
</DIV>

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<DIV style="font-family: Helvetica,Arial,sans-serif">

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left">(o)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD><U>Tax Returns of Company</U>. No later than thirty (30)&nbsp;days after the earlier of the date
that they are filed or required to be filed, copies of Company&#146;s signed and dated state and
federal income tax returns and all related schedules, and copies of any extension requests.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left">(p)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD><U>Tax Returns and Personal Financial Statements of Owners and Guarantors</U>.
&#091;INTENTIONALLY OMITTED&#093;.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left">(q)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD><U>Violations of Law</U>. No later than three days after discovery of any violation, a
Record notifying Wells Fargo of Company&#146;s violation of any law, rule or regulation, the
non-compliance with which could have a Material Adverse Effect on Company.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left">(r)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD><U>Pension Plans</U>. (i)&nbsp;Promptly upon discovery, and in any event within 30&nbsp;days after
Company knows or has reason to know that any Reportable Event with respect to any Pension Plan
has occurred, a Record authenticated by Company&#146;s chief financial officer notifying Wells
Fargo of the Reportable Event in detail and the actions which Company proposes to take to
correct the deficiency, together with a copy of any related notice sent to the Pension Benefit
Guaranty Corporation; (ii)&nbsp;promptly upon discovery, and in any event within 10&nbsp;days after
Company fails to make a required quarterly Pension Plan contribution under Section 412(m) of
the IRC, a Record authenticated by the Company&#146;s chief financial officer notifying Wells Fargo
of the failure in detail and the actions that Company will take to cure the failure, together
with a copy of any related notice sent to the Pension Benefit Guaranty Corporation; and (iii)
promptly upon discovery, and in any event within 10&nbsp;days after Company knows or has reason to
know that it may be liable or may be reasonably expected to have liability for any withdrawal,
partial withdrawal, reorganization or other event under any Multiemployer Plan under Sections
4201 or 4243 of ERISA, a Record authenticated by Company&#146;s chief financial officer notifying
Wells Fargo of the details of the event and the actions that Company proposes to take in
response.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left">(s)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD><U>Other Reports</U>. From time to time, with reasonable promptness, all receivables
schedules, inventory reports, collection reports, deposit records, equipment schedules,
invoices to account debtors, shipment documents and delivery receipts for goods sold, and such
other materials, reports, records or information as Wells Fargo may reasonably request.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left"><B>5.2</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD><B>Financial Covenants. </B>Company agrees to comply with the financial covenants described below,
which shall be calculated using GAAP consistently applied, except as they may be otherwise
modified by the following capitalized definitions:</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left">(a)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD><U>Minimum Net Income</U>. Company shall achieve, for each period described below, the sum
of (i)&nbsp;Net Income, <U><B><I>plus</I></B></U> (ii)&nbsp;non-cash expenses (to the extent deducted from Company&#146;s
net income in order to calculate Net Income), not to exceed $10,000,000, incurred in fiscal
2008 by Company that arise from the write-down of Company&#146;s intangible assets in connection
with the Company&#146;s analysis, as audited by Company&#146;s independent certified public accountants,
of the impairment of Company&#146;s book value of its goodwill, <U><B><I>plus</I></B></U> (iii)&nbsp;non-recurring
cash expenses, not to exceed $710,000, incurred in fiscal year 2008 by</TD>
</TR>

</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B><i>Credit and Security Agreement<BR>
WFBC/Iridex (Ex-Im Subfacility)</i></B>

</DIV>


<P align="center" style="font-size: 10pt"><!-- Folio -->16<!-- /Folio -->
</DIV>



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<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>
<DIV style="font-family: Helvetica,Arial,sans-serif">


<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Company as a result of the winding up of Company&#146;s United Kingdom and French subsidiaries,
<U><B><I>less</I></B></U> (iv)&nbsp;to the extent included in the calculation of Net Income, any payments
received by Company under or in connection with that certain Settlement Agreement, dated
April&nbsp;6, 2007, among Company, Synergetics, Inc., and Synergetics USA, Inc., of not less
than the amount set forth for each such period (numbers appearing between &#147;&#060; &#062;&#148; are
negative):</TD>
</TR>

</TABLE>
</DIV>
<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="77%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="18%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left"><B>Minimum Net Income</B></TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left"><B>plus approved intangible</B></TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD nowrap align="left" style="border-bottom: 1px solid #000000"><B>Period</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left" style="border-bottom: 1px solid #000000"><B>expense adjustments</B></TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom" style="background: #cceeff">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">April&nbsp;1, 2008 through April&nbsp;30, 2008
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">$&#060;1,285,000&#062;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">April&nbsp;1, 2008 through May&nbsp;31, 2008
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">$&#060;1,875,000&#062;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">April&nbsp;1, 2008 through June&nbsp;30, 2008
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">$&#060;2,130,000&#062;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">April&nbsp;1, 2008 through July&nbsp;31, 2008
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">$&#060;2,745,000&#062;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">April&nbsp;1, 2008 through August&nbsp;31, 2008
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">$&#060;3,010,000&#062;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">April&nbsp;1, 2008 through September&nbsp;30, 2008
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">$&#060;3,245,000&#062;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">April&nbsp;1, 2008 through October&nbsp;31, 2008
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">$&#060;3,880,000&#062;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">April&nbsp;1, 2008 through November&nbsp;30, 2008
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">$&#060;4,430,000&#062;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">April&nbsp;1, 2008 through December&nbsp;31, 2008
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">$&#060;4,765,000&#062;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>


<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left">(b)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD><U>Minimum Debt Service Coverage Ratio</U>. Company shall maintain, as of the last day of
each period described below, a Debt Service Coverage Ratio, determined as at the end of each
month, of not less than the ratio set forth for each such period:</TD>
</TR>

</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B><I>Credit and Security Agreement<BR>
WFBC/Iridex (Ex-Im Subfacility)</I></B>

</DIV>

<P align="center" style="font-size: 10pt"><!-- Folio -->17<!-- /Folio -->
</DIV>

<!-- PAGEBREAK -->
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<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="font-family: Helvetica,Arial,sans-serif">
<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="79%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="16%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left"><B>Debt Service Coverage</B></TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD nowrap align="left" style="border-bottom: 1px solid #000000"><B>Period</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left" style="border-bottom: 1px solid #000000"><B>Ratio</B></TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom" style="background: #cceeff">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">April&nbsp;1, 2008 through April&nbsp;30, 2008
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">1.10 to 1.0</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">April&nbsp;1, 2008 through May&nbsp;31, 2008
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">1.10 to 1.0</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">April&nbsp;1, 2008 through June&nbsp;30, 2008
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">1.10 to 1.0</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">April&nbsp;1, 2008 through July&nbsp;31, 2008
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">1.10 to 1.0</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">April&nbsp;1, 2008 through August&nbsp;31, 2008
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">1.10 to 1.0</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">April&nbsp;1, 2008 through September&nbsp;30, 2008
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">1.10 to 1.0</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">April&nbsp;1, 2008 through October&nbsp;31, 2008
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">1.10 to 1.0</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">April&nbsp;1, 2008 through November&nbsp;30, 2008
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">1.10 to 1.0</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">April&nbsp;1, 2008 through December&nbsp;31, 2008
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">1.10 to 1.0</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;If Company fails to satisfy the foregoing Debt Service Coverage Ratio covenant on any test
date, but Company has maintained an average daily ending cash balance in its deposit accounts (net
of book overdrafts and past due accounts payable owing by Company) for the 30-day period ending on
such test date that equals or exceeds an amount equal to double the deficiency in Net Income that
would have resulted in compliance with such Debt Service Coverage Ratio, Company will be deemed to
be in compliance with the Debt Service Coverage Ratio on such test date.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;If Company does not have any term debt outstanding (including no obligations outstanding to
American Medical Systems, Inc.), Company shall not be required to comply with the foregoing Debt
Service Coverage Ratio.
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left">(c)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD><U>Capital Expenditures</U>. Company shall not incur or contract to incur Capital
Expenditures of more than $250,000 in the aggregate during any fiscal year.</TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left"><B>5.3</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD><B>Other Liens and Permitted Liens</B>.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left">(a)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD><U>Other Liens; Permitted Liens</U>. Company shall not create, incur or suffer to exist any
Lien upon any of its assets, now owned or later acquired, as security for</TD>
</TR>

</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B><I>Credit and Security Agreement<BR>
WFBC/Iridex (Ex-Im Subfacility)</I></B>

</DIV>

<P align="center" style="font-size: 10pt"><!-- Folio -->18<!-- /Folio -->
</DIV>

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<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="font-family: Helvetica,Arial,sans-serif">

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>any indebtedness,
with the exception of the following (each a &#147;Permitted Lien&#148;; collectively, &#147;Permitted
Liens&#148;): (i)&nbsp;In the case of real property, covenants, restrictions, rights, easements and
minor irregularities in title which do not materially interfere with Company&#146;s business or
operations as presently conducted; (ii)&nbsp;Liens in existence on the date of this Agreement that
are described in Exhibit&nbsp;F and secure indebtedness for borrowed money permitted under Section
5.4; (iii)&nbsp;The Security Interest and Liens created by the Security Documents; (iv)&nbsp;Purchase
money Liens (including any capital lease and any sale-leaseback of equipment occurring within
90&nbsp;days of the acquisition of such equipment) relating to the acquisition of Equipment not
exceeding the lesser of cost or fair market value, not exceeding $100,000 in the aggregate
during any fiscal year, and so long as no Default Period is then in existence and none would
exist immediately after such acquisition; (v)&nbsp;Liens for taxes, fees, assessments or other
governmental charges or levies, either not delinquent or being contested in good faith by
appropriate proceedings and for which adequate reserves have been established in accordance
with GAAP, provided the same have no priority over any of Wells Fargo&#146;s security interests;
(vi)&nbsp;Liens existing on equipment at the time of its acquisition, provided that the Lien is
confined solely to the property so acquired and improvements thereon, and the proceeds of such
equipment; (vii)&nbsp;Liens to secure payment of workers&#146; compensation, employment insurance, old
age pensions, social security or other like obligations incurred in the ordinary course of
business; (viii)&nbsp;Liens arising from judgments, decrees or attachments in circumstances not
constituting an Event of Default under Section&nbsp;6.1(h); (ix)&nbsp;Liens in favor of other financial
institutions arising in connection with accounts at such institutions to secure standard fees
for services, but not financing made available by such institution; (x)&nbsp;carriers&#146;
warehousemen&#146;s, mechanics, materialmen&#146;s, repairmen&#146;s or other like Liens arising in the
ordinary course of business which are not delinquent or which are being contested in good
faith and by appropriate proceedings and for which Company maintains adequate reserves in
accordance with GAAP; (xi)&nbsp;leases or subleases and licenses or sublicenses granted to others
in the ordinary course of business which do not interfere in any material respect with the
business operations of Company or any applicable Subsidiary; (xii)&nbsp;Liens in favor of customs
and revenue authorities arising as a matter of law to secure payment of customs duties in
connection with the importation of goods; and (xiii)&nbsp;Liens incurred in connection with the
extension, renewal or refinancing of the indebtedness secured by Liens of the type described
in clauses (ii)&nbsp;and (iv)&nbsp;above, provided that any extension, renewal or replacement Lien shall
be limited to the property encumbered by the existing Lien and the principal amount of the
indebtedness being extended, renewed or refinanced does not increase.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left">(b)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD><U>Financing Statements</U>. Company shall not authorize the filing of any financing
statement by any Person as Secured Party with respect to any of Company&#146;s assets, other than
Wells Fargo or in connection with Permitted Liens. Company shall not amend any financing
statement filed by Wells Fargo as Secured Party except as permitted by law.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left"><B>5.4</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD><B>Indebtedness</B>. Company shall not incur, create, assume or permit to exist any Debt, except:
(a)&nbsp;Indebtedness arising under this Agreement and the Ex-Im Credit Agreement; (b)&nbsp;Debt of
Company described on Exhibit&nbsp;F; (c)&nbsp;Debt</TD>
</TR>

</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B><I>Credit and Security Agreement<BR>
WFBC/Iridex (Ex-Im Subfacility)</I></B>

</DIV>

<P align="center" style="font-size: 10pt"><!-- Folio -->19<!-- /Folio -->
</DIV>

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<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="font-family: Helvetica,Arial,sans-serif">

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>secured by Permitted Liens; and (d)&nbsp;inter-company
unsecured Debt owing by Company to a Subsidiary; provided, that, upon the request of Wells
Fargo, such Debt shall be evidenced by promissory notes having terms (including subordination
terms) satisfactory to Wells Fargo, the sole originally executed counterparts of which shall
be pledged and delivered to Wells Fargo as security for the Indebtedness. With respect to the
Debt owing by Company to American Medical Systems, Inc. that is described on Exhibit&nbsp;F (the
&#147;AMS Debt&#148;), Company shall make payments owing with respect to the AMS Debt when due (and in
no event shall the AMS Debt be prepaid) in accordance with the terms and conditions of the
agreements governing the AMS Debt that are in existence as of the Closing Date, except to the
extent such payments of the AMS Debt would be prohibited by the terms of the Subordination
Agreement entered into between American Medical Systems, Inc. and Wells Fargo. With respect
to any other Debt owing by Company to any Subordinated Creditor other than American Medical
Systems, Inc., Company may only make payments of interest and principal to the extent such
interest and/or principal payments are permitted under the terms and conditions of the
Subordination Agreement entered into by Wells Fargo and the relevant Subordinated Creditor.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left"><B>5.5</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD><B>Guaranties</B>. Company shall not assume, guarantee, endorse or otherwise become directly or
contingently liable for the obligations of any Person, except: (a)&nbsp;the endorsement of
negotiable instruments by Company for deposit or collection or similar transactions in the
ordinary course of business; (b)&nbsp;guaranties, endorsements and other direct or contingent
liabilities in connection with the obligations of other Persons in existence on the date of
this Agreement and described in Exhibit&nbsp;F; and (c)&nbsp;Investments permitted under Section&nbsp;5.6.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left"><B>5.6</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD><B>Investments and Subsidiaries</B>. Company shall not make or permit to exist any loans or
advances to, any guaranties or other credit support for the benefit of, or make any investment
or acquire any interest whatsoever in (collectively, &#147;Investments&#148;), any Person or Affiliate,
including any partnership or joint venture, nor purchase or hold beneficially any stock or
other securities or evidence of indebtedness of any Person or Affiliate, except:</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left">(a)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Investments in (i)&nbsp;direct obligations issued or unconditionally guaranteed by the United
States government and backed by the full faith and credit of the United States government;
(ii)&nbsp;certificates of deposit and time deposits, bankers&#146; acceptances and floating rate
certificates of deposit issued by any commercial bank organized under the laws of the United
States, any state thereof, the District of Columbia, any foreign bank, or its branches or
agencies, the long-term indebtedness of which institution at the time
of acquisition is rated
A- (or better) by Standard &#038; Poor&#146;s Ratings Group, a division of McGraw-Hill, Inc. (&#147;S&#038;P&#148;) or
A3 (or better) by Moody&#146;s Investors Service, Inc. (&#147;Moody&#146;s&#148;), and which certificates of
deposit and time deposits are fully protected against currency fluctuations for any such
deposits with a term of more than ninety (90)&nbsp;days; (iii)&nbsp;shares of money market, mutual or
similar funds having assets in excess of $100,000,000 and the investments of which are limited
to (a)&nbsp;investment grade securities (i.e., securities rated at least Baa by Moody&#146;s or at
least BBB by S&#038;P) and (b)&nbsp;commercial paper of United States and foreign banks and bank
holding companies and their subsidiaries and United States and foreign finance, commercial
industrial or utility companies which, at the time</TD>
</TR>

</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B><I>Credit and Security Agreement<BR>
WFBC/Iridex (Ex-Im Subfacility)</I></B>

</DIV>

<P align="center" style="font-size: 10pt"><!-- Folio -->20<!-- /Folio -->
</DIV>

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<DIV style="font-family: Helvetica,Arial,sans-serif">

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left"><B></B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>of acquisition, are rated A-2 (or
better) by S&#038;P or P-2 (or better) by Moody&#146;s (all such institutions being, &#147;<U>Qualified
Institutions</U>&#148;); and (iv)&nbsp;commercial paper of Qualified Institutions; <U>provided</U>
that the maturities of any of the foregoing Investments shall not exceed three hundred
sixty-five (365)&nbsp;days from the date of acquisition thereof.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left">(b)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Travel advances or loans to Company&#146;s Officers and employees not exceeding at any one time an
aggregate of $50,000;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left">(c)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Prepaid rent not exceeding one month or security deposits;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left">(d)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Current Investments in those Subsidiaries in existence on the date of this Agreement which
are identified on Exhibit&nbsp;D, and Investments in Subsidiaries after the Closing Date not to
exceed $250,000 in the aggregate. Except to the extent permitted in the immediately preceding
sentence, Company shall not make any further capital contributions or loans to any
Subsidiaries after the Closing Date, guarantee, otherwise become liable for, or provide any
other form of credit support for any obligations of any Subsidiaries after the Closing Date,
or transfer any assets to any Subsidiaries after the Closing Date;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left">(e)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Investments (including debt obligations) received in connection with the bankruptcy or
reorganization of customers or suppliers and in settlement of delinquent obligations of, and
other disputes with, customers or suppliers arising in the ordinary course of Company&#146;s
business;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left">(f)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Investments consisting of accounts receivable of, notes receivable of, or prepaid royalties
and other credit extensions, to customers and suppliers who are not Affiliates, in the
ordinary course of Company&#146;s business; and</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left">(g)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Other Investments by Company which do not exceed $250,000 in the aggregate in any fiscal
year.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left"><B>5.7</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD><B>Dividends and Distributions</B>. Company shall not declare or pay any dividends (other than
dividends payable solely in Permitted Securities of Company on any class of its stock), or
make any payment on account of the purchase, redemption or retirement of any shares of its
stock, or other securities or evidence of its indebtedness or make any distribution regarding
its stock, either directly or indirectly; provided that Company may (i)&nbsp;make payments in lieu
of fractional shares in connection with any stock split or consolidation, (ii)&nbsp;repurchase
stock from directors, officers or employees in connection with employee benefit arrangements
or upon termination of employment in an amount not to exceed $100,000 in any fiscal year, and
(iii)&nbsp;retain stock in lieu of withholding obligations.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left"><B>5.8</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD><B>Salaries</B>. &#091;INTENTIONALLY OMITTED&#093;.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left"><B>5.9</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD><B>Key Person Life Insurance</B>. &#091;INTENTIONALLY OMITTED&#093;.</TD>
</TR>

</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B><I>Credit and Security Agreement<BR>
WFBC/Iridex (Ex-Im Subfacility)</I></B>

</DIV>

<P align="center" style="font-size: 10pt"><!-- Folio -->21<!-- /Folio -->
</DIV>

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<DIV style="font-family: Helvetica,Arial,sans-serif">

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<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left"><B>5.10</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD><B>Books and Records; Collateral Examination; Inspection and Appraisals</B>.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left">(a)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD><U>Books and Records; Inspection</U>. Company shall keep complete and accurate books and
records with respect to the Collateral and Company&#146;s business and financial condition and any
other matters that Wells Fargo may request, in accordance with GAAP. Company shall permit any
employee, attorney, accountant or other agent of Wells Fargo to audit, review, make extracts
from and copy any of its books and records at any time during ordinary business hours, and to
discuss Company&#146;s affairs with any of its Directors, Officers, employees, Owners or agents.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left">(b)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD><U>Authorization to Company&#146;s Agents to Make Disclosures to Wells Fargo</U>. Company
authorizes all accountants and other Persons acting as its agent to disclose and deliver to
Wells Fargo&#146;s employees, accountants, attorneys and other Persons acting as its agent, at
Company&#146;s expense, all financial information, books and records, work papers, management
reports and other information in their possession regarding Company.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left">(c)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD><U>Collateral Exams and Inspections</U>. Company shall permit Wells Fargo&#146;s employees,
accountants, attorneys or other Persons acting as its agent, to examine and inspect any
Collateral or any other property of Company at any time during ordinary business hours.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left">(d)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD><U>Collateral Appraisals</U>. Wells Fargo may also obtain, from time to time, at Company&#146;s
expense, an appraisal of the Collateral by an appraiser acceptable to Wells Fargo in its sole
discretion.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left"><B>5.11</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD><B>Account Verification; Payment of Permitted Liens</B>.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left">(a)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD><U>Account Verification</U>. Wells Fargo or its agents may (i)&nbsp;contact account debtors and
other obligors at any time to verify Company&#146;s Accounts; and (ii)&nbsp;require Company to send
requests for verification of Accounts or send notices of assignment of Accounts to account
debtors and other obligors.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left">(b)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD><U>Covenant to Pay Permitted Liens</U>. Company shall pay when due each account payable due
to any Person holding a Permitted Lien (as a result of such payable) on any Collateral.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left"><B>5.12</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD><B>Compliance with Laws</B>.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left">(a)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD><U>General Compliance with Applicable Law; Use of Collateral</U>. Company shall (i)&nbsp;comply,
and cause each Subsidiary to comply, with the requirements of applicable laws and regulations,
the non-compliance with which would have a Material Adverse Effect on its business or its
financial condition and (ii)&nbsp;use and keep the Collateral, and require that others use and keep
the Collateral, only for lawful purposes, without violation of any federal, state or local
law, statute or ordinance.</TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left">(b)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD><U>Compliance with Federal Regulatory Laws</U>. Company shall (i)&nbsp;prohibit, and cause each
Subsidiary to prohibit, any Person that is an Owner or Officer from being listed on the
Specially Designated Nationals and Blocked Person List or</TD>
</TR>

</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B><I>Credit and Security Agreement<BR>
WFBC/Iridex (Ex-Im Subfacility)</I></B>

</DIV>

<P align="center" style="font-size: 10pt"><!-- Folio -->22<!-- /Folio -->
</DIV>

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<DIV style="font-family: Helvetica,Arial,sans-serif">

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left"><B></B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>other similar lists maintained by the Office of Foreign Assets Control (&#147;OFAC&#148;), the
Department of the Treasury or included in any Executive Orders, (ii)&nbsp;not permit the
proceeds of the Line of Credit or any other financial accommodation extended by Wells Fargo
to be used in any way that violates any foreign asset control regulations of OFAC or other
applicable law, (iii)&nbsp;comply, and cause each Subsidiary to comply, with all applicable Bank
Secrecy Act laws and regulations, as amended from time to time, and (iv)&nbsp;otherwise comply
with the USA Patriot Act and Wells Fargo&#146;s related policies and procedures.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left">(c)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD><U>Compliance with Environmental Laws</U>. Company shall (i)&nbsp;comply, and cause each
Subsidiary to comply, with the requirements of applicable Environmental Laws and obtain and
comply with all permits, licenses and similar approvals required by them, and (ii)&nbsp;not
generate, use, transport, treat, store or dispose of any Hazardous Substances in such a manner
as to create any material liability or obligation under the common law of any jurisdiction or
any Environmental Law.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left"><B>5.13</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD><B>Payment of Taxes and Other Claims</B>. Company shall pay or discharge, when due, and cause each
Subsidiary to pay or discharge, when due, (a)&nbsp;all taxes, assessments and governmental charges
exceeding $25,000 in the aggregate that are levied or imposed upon it or upon its income or
profits, upon any properties belonging to it (including the Collateral) or upon or against the
creation, perfection or continuance of the Security Interest, prior to the date on which
penalties attach, (b)&nbsp;all federal, state and local taxes required to be withheld by it, and
(c)&nbsp;all lawful claims for labor, materials and supplies which, if unpaid, might by law become
a Lien upon any properties of Company, although Company shall not be required to pay any such
tax, assessment, charge or claim whose amount, applicability or validity is being contested in
good faith by appropriate proceedings and for which proper reserves have been made.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left"><B>5.14</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD><B>Maintenance of Collateral and Properties</B>.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left">(a)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Company shall keep and maintain the Collateral and all of its other properties necessary or
useful in its business in good condition, repair and working order (normal wear and tear
excepted) and will from time to time replace or repair any worn, defective or broken parts,
although Company may discontinue the operation and maintenance of any properties if Company
believes that such discontinuance is desirable to the conduct of its business and not
disadvantageous in any material respect to Wells Fargo. Company shall take all commercially
reasonable steps necessary to protect and maintain its Intellectual Property Rights.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left">(b)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Company shall defend the Collateral against all Liens, claims and demands of all third
Persons claiming any interest in the Collateral. Company shall keep all Collateral free and
clear of all Liens except Permitted Liens. Company shall take all commercially reasonable
steps necessary to prosecute any Person Infringing its Intellectual Property Rights and to
defend itself against any Person accusing it of Infringing any Person&#146;s Intellectual Property
Rights.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left"><B>5.15</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD><B>Insurance</B>. Company shall at all times maintain insurance with insurers acceptable to Wells
Fargo, in such amounts, on such terms (including any</TD>
</TR>

</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B><I>Credit and Security Agreement<BR>
WFBC/Iridex (Ex-Im Subfacility)</I></B>

</DIV>

<P align="center" style="font-size: 10pt"><!-- Folio -->23<!-- /Folio -->
</DIV>

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<DIV style="font-family: Helvetica,Arial,sans-serif">

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>deductibles)&nbsp;and against such risks as Wells Fargo may require (which, at a minimum shall
be in such amounts and against such risks as are usually carried by companies engaged in
similar business and owning similar properties in the same geographical areas in which
Company operates). Without limiting the generality of the foregoing, Company shall, at all
times and without limitation, maintain business interruption insurance (including force
majeure coverage) and keep all tangible Collateral insured against risks of fire (including
so-called extended coverage), theft, collision (for Collateral consisting of motor
vehicles) and such other risks and in such amounts as Wells Fargo may reasonably request,
with any loss payable to Wells Fargo to the extent of its interest, and all such policies
of insurance shall contain a lender&#146;s loss payable endorsement for the benefit of Wells
Fargo. All policies of liability insurance shall name Wells Fargo as an additional
insured.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left"><B>5.16</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD><B>Preservation of Existence</B>. Company shall preserve and maintain its existence and all of its
rights, privileges and franchises necessary or desirable in the normal conduct of its business
and shall conduct its business in an orderly, efficient and regular manner.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left"><B>5.17</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD><B>Delivery of Instruments, etc</B>. Upon request by Wells Fargo, Company shall promptly deliver to
Wells Fargo in pledge all instruments, documents and chattel paper constituting Collateral,
endorsed or assigned by Company.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left"><B>5.18</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD><B>Sale or Transfer of Assets; Suspension of Business Operations</B>. Company shall not sell,
lease, assign, transfer, license, or otherwise dispose of (each, a &#147;Transfer&#148;) (a)&nbsp;the stock
of any Subsidiary, (b)&nbsp;all or a substantial part of its assets, or (c)&nbsp;any Collateral or any
interest in Collateral (whether in one transaction or in a series of transactions) to any
other Person other than (i)&nbsp;the sale of Inventory in the ordinary course of business and the
licensing of Intellectual Property Rights in the ordinary course of its business in connection
with sales of Inventory or the provision of services to its customers, (ii)&nbsp;Transfers of
worn-out, obsolete or unneeded equipment, and (iii)&nbsp;Transfers constituting Permitted
Investments. Company shall not liquidate, dissolve or suspend business operations. Company
shall not permit its rights as licensee of Licensed Intellectual Property to lapse, except
that Company may transfer such rights or permit them to lapse if it has reasonably determined
that such Intellectual Property Rights are no longer useful in its business.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left"><B>5.19</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD><B>Consolidation and Merger; Asset Acquisitions</B>. Company shall not consolidate with or merge
into any other entity, or permit any other entity to merge into it, or acquire (in a
transaction analogous in purpose or effect to a consolidation or merger) all or substantially
all of the assets of any other entity; provided that any Subsidiary of Company may merge with
and into Company so long as Company is the surviving entity.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left"><B>5.20</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD><B>Sale and Leaseback</B>. Company shall not enter into any arrangement, directly or indirectly,
with any other Person pursuant to which Company shall sell or transfer any real or personal
property, whether owned now or acquired in the future, and then rent or lease all or part of
such property or any other property which Company intends to use for substantially the same
purpose or purposes</TD>
</TR>

</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B><I>Credit and Security Agreement<BR>
WFBC/Iridex (Ex-Im Subfacility)</I></B>

</DIV>

<P align="center" style="font-size: 10pt"><!-- Folio -->24<!-- /Folio -->
</DIV>

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<DIV style="font-family: Helvetica,Arial,sans-serif">

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>as the property being sold or transferred, except in connection with a financing that would
be permitted under Section&nbsp;5.3(a)(iv).</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left"><B>5.21</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD><B>Restrictions on Nature of Business</B>. Company will not engage in any line of business
materially different from that presently engaged in by Company, and will not purchase, lease
or otherwise acquire assets not related to its business.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left"><B>5.22</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD><B>Accounting</B>. Company will not adopt any material change in accounting principles except as
required by GAAP, consistently applied. Company will not change its fiscal year.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left"><B>5.23</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD><B>Discounts, etc</B>. After notice from Wells Fargo, Company will not grant any discount, credit
or allowance to any customer of Company or accept any return of goods sold except in the
ordinary course of Company&#146;s business. Company will not at any time modify, amend,
subordinate, cancel or terminate any Account except in the ordinary course of Company&#146;s
business.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left"><B>5.24</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD><B>Pension Plans</B>. Except as disclosed to Wells Fargo in a Record prior to the date of this
Agreement, neither Company nor any ERISA Affiliate will (a)&nbsp;adopt, create, assume or become
party to any Pension Plan, (b)&nbsp;become obligated to contribute to any Multiemployer Plan, (c)
incur any obligation to provide post-retirement medical or insurance benefits with respect to
employees or former employees (other than benefits required by law) or (d)&nbsp;amend any Plan in a
manner that would materially increase its funding obligations.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left"><B>5.25</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD><B>Place of Business; Name</B>. Company will not transfer its chief executive office or principal
place of business, or move, relocate, close or sell any business Premises, without prior
written notice to Wells Fargo. Company will not change its name or jurisdiction of
organization without prior written notice to Wells Fargo.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left"><B>5.26</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD><B>Constituent Documents</B>. Company will not amend its Constituent Documents.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left"><B>5.27</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD><B>Performance by Wells Fargo</B>. If Company fails to perform or observe any of its obligations
under this Agreement at any time, Wells Fargo may, but need not, perform or observe them on
behalf of Company and may, but need not, take any other actions which Wells Fargo may
reasonably deem necessary to cure or correct this failure; and Company shall pay Wells Fargo
upon demand the amount of all costs and expenses (including reasonable attorneys&#146; fees and
legal expense) incurred by Wells Fargo in performing these obligations, together with interest
on these amounts at the Default Rate.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left"><B>5.28</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD><B>Wells Fargo Appointed as Company&#146;s Attorney in Fact</B>. To facilitate Wells Fargo&#146;s performance
or observance of Company&#146;s obligations under this Agreement, Company hereby irrevocably
appoints Wells Fargo and Wells Fargo&#146;s agents, as Company&#146;s attorney in fact (which
appointment is coupled with an interest) with the right (but not the duty) to create, prepare,
complete, execute, deliver, endorse or file on behalf of Company any instruments, documents,
assignments, security agreements, financing statements, applications for insurance and any
other agreements or any Record required to</TD>
</TR>

</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B><I>Credit and Security Agreement<BR>
WFBC/Iridex (Ex-Im Subfacility)</I></B>

</DIV>

<P align="center" style="font-size: 10pt"><!-- Folio -->25<!-- /Folio -->
</DIV>

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<DIV style="font-family: Helvetica,Arial,sans-serif">

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>be obtained, executed, delivered or endorsed by Company in accordance with the terms of
this Agreement.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left"><B>6.</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD><B>EVENTS OF DEFAULT AND REMEDIES</B></TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left"><B>6.1</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD><B>Events of Default</B>. An &#147;Event of Default&#148; means any of the following:</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left">(a)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Company fails to pay any the amount of any Indebtedness on the date that it becomes due and
payable;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left">(b)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Company fails to observe or perform any covenant or agreement of Company set forth in this
Agreement, in any of the Loan Documents, or in the Master Agreement for Treasury Management
Services, or any covenant in Section&nbsp;5.2 becomes inapplicable due to the lapse of time, and
Wells Fargo and Company fail to come to an agreement acceptable to Wells Fargo in Wells
Fargo&#146;s sole discretion to amend the covenant to apply to future periods;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left">(c)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>An Overadvance arises as the result of any reduction in the Borrowing Base and the amount of
the Overadvance is not immediately repaid, or arises in any manner or on terms not otherwise
approved of in advance by Wells Fargo in a Record that it has Authenticated and the amount of
the Overadvance is not immediately repaid;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left">(d)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>A Change of Control shall occur;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left">(e)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Company or any Guarantor becomes insolvent or admits in a Record an inability to pay debts as
they mature, or Company or any Guarantor makes an assignment for the benefit of creditors; or
Company or any Guarantor applies for or consents to the appointment of any receiver, trustee,
or similar officer for the benefit of Company or any Guarantor, or for any of their
properties; or any receiver, trustee or similar officer is appointed without the application
or consent of Company or such Guarantor and such appointment is not vacated within 30&nbsp;days; or
any judgment, writ, warrant of attachment or execution or similar process is issued or levied
against a substantial part of the property of Company or any Guarantor and such process is not
vacated within 30&nbsp;days;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left">(f)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Company or any Guarantor files a petition under any chapter of the United States Bankruptcy
Code or under the laws of any other jurisdiction naming Company or such Guarantor as debtor;
or any such petition is instituted against Company or any such Guarantor and such petition is
not dismissed within 30&nbsp;days; or Company or any Guarantor institutes (by petition,
application, answer, consent or otherwise) any bankruptcy, insolvency, reorganization, debt
arrangement, dissolution, liquidation or similar proceeding under the laws of any
jurisdiction; or any such proceeding is instituted (by petition, application or otherwise)
against Company or any such Guarantor and such proceeding is not dismissed within 30&nbsp;days;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left">(g)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Any representation or warranty made by Company in this Agreement or by any Guarantor in any
Guaranty, or by Company (or any of its Officers) or any Guarantor in any agreement,
certificate, instrument or financial statement or other statement delivered to Wells Fargo in
connection with this Agreement or</TD>
</TR>

</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B><I>Credit and Security Agreement<BR>
WFBC/Iridex (Ex-Im Subfacility)</I></B>

</DIV>

<P align="center" style="font-size: 10pt"><!-- Folio -->26<!-- /Folio -->
</DIV>

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<DIV style="font-family: Helvetica,Arial,sans-serif">

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<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>pursuant to such Guaranty is untrue or misleading in any material respect when delivered to
Wells Fargo;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left">(h)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>A final, non-appealable arbitration award, judgment, or decree or order for the payment of
money in an amount in excess of $250,000 which is not insured or subject to indemnity, is
entered against Company which is not satisfied, stayed or appealed within 10&nbsp;days;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left">(i)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Company is in default with respect to any bond, debenture, note or other evidence of
indebtedness in an amount in excess of $250,000 issued by Company that is held by any third
Person other than Wells Fargo, or under any instrument under which any such evidence of
indebtedness has been issued or by which it is governed, or under any material lease or other
contract, and the applicable grace period, if any, has expired and the holder of such
indebtedness has the right to accelerate the maturity of such indebtedness;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left">(j)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Company fails to pay any indebtedness or obligation owed to Wells Fargo which is unrelated to
the Line of Credit or this Agreement as it becomes due and payable;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left">(k)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Any Guarantor repudiates or purports to revokes the Guarantor&#146;s Guaranty, or fails to perform
any obligation under such Guaranty, or any individual Guarantor dies or becomes incapacitated,
or any other Guarantor ceases to exist for any reason;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left">(l)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Company engages in any act prohibited by any Subordination Agreement, or makes any payment on
Subordinated Indebtedness (as defined in the Subordination Agreement) or other debt or
obligations that in each case the Subordinated Creditor was not contractually entitled to
receive;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left">(m)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Any event or circumstance occurs that Wells Fargo in good faith believes may impair the
prospect of payment of all or part of the Indebtedness, or Company&#146;s ability to perform
material obligations under any of the Loan Documents or the Master Agreement for Treasury
Management Services, or there occurs any material adverse change in the business or financial
condition of Company;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left">(n)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>The chairman, president or chief financial officer of Company or any Owner of at least forty
percent (40%) of the issued and outstanding common stock or other equity interests of Company
is convicted of a felony under state or federal law;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left">(o)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Any Reportable Event, which Wells Fargo in good faith believes to constitute sufficient
grounds for termination of any Pension Plan or for the appointment of a trustee to administer
any Pension Plan, has occurred and is continuing 30&nbsp;days after Company gives Wells Fargo a
Record notifying it of the Reportable Event; or a trustee is appointed by an appropriate court
to administer any Pension Plan; or the Pension Benefit Guaranty Corporation institutes
proceedings to terminate or appoint a trustee to administer any Pension Plan; or Company or
any ERISA Affiliate files for a distress termination of any Pension Plan under Title IV of
ERISA; or Company or any ERISA Affiliate fails to make any quarterly Pension Plan contribution
required under Section</TD>
</TR>

</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B><I>Credit and Security Agreement<BR>
WFBC/Iridex (Ex-Im Subfacility)</I></B>

</DIV>

<P align="center" style="font-size: 10pt"><!-- Folio -->27<!-- /Folio -->
</DIV>

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<DIV style="font-family: Helvetica,Arial,sans-serif">

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>412(m) of the
IRC, which Wells Fargo in good faith believes may, either by itself or in combination with
other failures, result in the imposition of a Lien on Company&#146;s assets in favor of the
Pension Plan; or any withdrawal, partial withdrawal, reorganization or other event occurs
with respect to a Multiemployer Plan which could reasonably be expected to result in a
material liability by Company to the Multiemployer Plan under Title IV of ERISA; or</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left">(p)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Any &#147;Event of Default&#148; occurs under any of the Ex-Im Loan Documents.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left"><B>6.2</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD><B>Rights and Remedies</B>. During any Default Period, Wells Fargo may in its discretion exercise
any or all of the following rights and remedies:</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left">(a)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Wells Fargo may terminate the Line of Credit and decline to make Advances, and terminate any
services extended to Company under the Master Agreement for Treasury Management Services;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left">(b)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Wells Fargo may declare the Indebtedness to be immediately due and payable and accelerate
payment of the Revolving Notes, and all Indebtedness shall immediately become due and payable,
without presentment, notice of dishonor, protest or further notice of any kind, all of which
Company hereby expressly waives;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left">(c)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Wells Fargo may, without notice to Company, apply any money owing by Wells Fargo to Company
to payment of the Indebtedness;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left">(d)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Wells Fargo may exercise and enforce any rights and remedies available upon default to a
secured party under the UCC, including the right to take possession of Collateral, proceeding
with or without judicial process (without a prior hearing or notice of hearing, which Company
hereby expressly waives) and sell, lease or otherwise dispose of Collateral for cash or on
credit (with or without giving warranties as to condition, fitness, merchantability or title
to Collateral, and in the event of a credit sale, Indebtedness shall be reduced only to the
extent that payments are actually received), and Company will upon Wells Fargo&#146;s demand
assemble the Collateral and make it available to Wells Fargo at any place designated by Wells
Fargo which is reasonably convenient to both parties;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left">(e)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Wells Fargo may exercise and enforce its rights and remedies under any of the Loan Documents;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left">(f)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Wells Fargo may for any reason apply for the appointment of a receiver of the Collateral, to
which appointment Company hereby consents; and</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left">(g)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Wells Fargo may exercise any other rights and remedies available to it by law or agreement.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left"><B>6.3</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD><B>Immediate Default and Acceleration</B>. Following the occurrence of an Event of Default
described in Section&nbsp;6.1(e) or (f), the Line of Credit shall immediately terminate and all of
Company&#146;s Indebtedness shall immediately become due and payable without presentment, demand,
protest or notice of any kind.</TD>
</TR>

</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B><I>Credit and Security Agreement<BR>
WFBC/Iridex (Ex-Im Subfacility)</I></B>

</DIV>

<P align="center" style="font-size: 10pt"><!-- Folio -->28<!-- /Folio -->
</DIV>

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<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left"><B>7.</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD><B>MISCELLANEOUS</B></TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left"><B>7.1</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD><B>No Waiver; Cumulative Remedies</B>. No delay or any single or partial exercise by Wells Fargo of
any right, power or remedy under the Loan Documents shall constitute a waiver of any other
right, power or remedy under the Loan Documents. No notice to or demand on Company in any
circumstance shall entitle Company to any additional notice or demand in any other
circumstances. The remedies provided in the Loan Documents are cumulative and not exclusive
of any remedies provided by law. Wells Fargo may comply with applicable law in connection
with a disposition of Collateral, and such compliance will not be considered to adversely
affect the commercial reasonableness of any sale of the Collateral.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left"><B>7.2</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD><B>Amendment of Loan Documents; Consents and Waivers; Authentication</B>. No amendment or
modification of any Loan Documents, or consent to or waiver of any Event of Default, or
consent to or waiver of the application of any covenant or representation set forth in any of
the Loan Documents, or any release of Wells Fargo&#146;s Security Interest in any Collateral, shall
be effective unless it has been agreed to by Wells Fargo and memorialized in a Record that:
(a)&nbsp;specifically states that it is intended to amend or modify specific Loan Documents, or
waive any Event of Default or the application of any covenant or representation of any terms
of specific Loan Documents, or is intended to release Wells Fargo&#146;s Security Interest in
specific Collateral; and (b)&nbsp;is Authenticated by the signature of an authorized employee of
both parties, or by an authorized employee of Wells Fargo with respect to a consent or waiver.
The terms of an amendment, consent or waiver memorialized in any Record shall be effective
only to the extent, and in the specific instance, and for the limited purpose to which Wells
Fargo has agreed.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left"><B>7.3</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD><B>Execution in Counterparts; Delivery of Counterparts</B>. This Agreement and all other Loan
Documents, and any amendment or modification to them may be Authenticated by the parties in
any number of counterparts, each of which, once authenticated and delivered in accordance with
the terms of this Section&nbsp;7.3, will be deemed an original, and all such counterparts, taken
together, shall constitute one and the same instrument. Delivery by fax or by encrypted
e-mail or e-mail file attachment of any counterpart to any Loan Document Authenticated by an
authorized signature will be deemed the equivalent of the delivery of the original
Authenticated instrument. Company shall send the original Authenticated counterpart to Wells
Fargo by first class U.S. mail or by overnight courier, but Company&#146;s failure to deliver a
Record in this form shall not affect the validity, enforceability, and binding effect of this
Agreement or the other Loan Documents.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left"><B>7.4</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD><B>Notices, Requests, and Communications; Confidentiality</B>. Except as otherwise expressly
provided in this Agreement:</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left">(a)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD><U>Delivery of Notices, Requests and Communications</U>. Any notice, request, demand, or
other communication by either party that is required under the Loan Documents to be in the
form of a Record (but excluding any Record containing information Company must report to Wells
Fargo under Section&nbsp;5.1) may be delivered (i)&nbsp;in person, (ii)&nbsp;by first class U.S. mail, (iii)
by overnight courier of</TD>
</TR>

</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B><I>Credit and Security Agreement<BR>
WFBC/Iridex (Ex-Im Subfacility)</I></B>

</DIV>

<P align="center" style="font-size: 10pt"><!-- Folio -->29<!-- /Folio -->
</DIV>

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<DIV style="font-family: Helvetica,Arial,sans-serif">

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>national reputation, or (iv)&nbsp;by fax, or the Record may be sent as an Electronic Record and
delivered (v)&nbsp;by an encrypted e-mail, or (vi)&nbsp;through Wells Fargo&#146;s Commercial Electronic
Office<SUP style="font-size: 85%; vertical-align: text-top">&#174;</SUP> (&#147;CEO<SUP style="font-size: 85%; vertical-align: text-top">&#174;</SUP>&#148;) portal or other secure electronic channel to which the parties have
agreed.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left">(b)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD><U>Addresses for Delivery</U>. Delivery of any Record under this Section&nbsp;7.4 shall be made
to the appropriate address set forth on the last page of this Agreement (which either party
may modify by a Record sent to the other party), or through Wells Fargo&#146;s CEO portal or other
secure electronic channel to which the parties have agreed.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left">(c)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD><U>Date of Receipt</U>. Each Record sent pursuant to the terms of this Section&nbsp;7.4 will be
deemed to have been received on (i)&nbsp;the date of delivery if delivered in person, (ii)&nbsp;the date
deposited in the mail if sent by mail, (iii)&nbsp;the date delivered to the courier if sent by
overnight courier, (iv)&nbsp;the date of transmission if sent by fax, or (v)&nbsp;the date of
transmission, if sent as an Electronic Record by electronic mail or through Wells Fargo&#146;s CEO
portal or similar secure electronic channel to which the parties have agreed; <U>except
</U>that any request for an Advance or any other notice, request, demand or other
communication from Company required under Section&nbsp;1, and any request for an accounting under
Section&nbsp;9-210 of the UCC, will not be deemed to have been received until actual receipt by
Wells Fargo on a Business Day by an authorized employee of Wells Fargo.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left">(d)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD><U>Confidentiality of Unencrypted E-mail</U>. Company acknowledges that if it sends an
Electronic Record to Wells Fargo without encryption by e-mail or as an e-mail file attachment,
there is a risk that the Electronic Record may be received by unauthorized Persons, and that
by so doing it will be deemed to have accepted this risk and the consequences of any such
unauthorized disclosure.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left"><B>7.5</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD><B>Company Information Reporting; Confidentiality</B>. Except as otherwise expressly provided in
this Agreement:</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left">(a)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD><U>Delivery of Company Information Records</U>. Any information that Company is required to
deliver under Section&nbsp;5.1 in the form of a Record may be delivered to Wells Fargo (i)&nbsp;in
person, or by (ii)&nbsp;first class U.S. mail, (iii)&nbsp;overnight courier of national reputation, or
(iv)&nbsp;fax, or the Record may be sent as an Electronic Record (v)&nbsp;by encrypted e-mail, or (vi)
through the file upload service of Wells Fargo&#146;s CEO portal or other secure electronic channel
to which the parties have agreed.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left">(b)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD><U>Addresses for Delivery</U>. Delivery of any Record to Wells Fargo under this Section&nbsp;7.5
shall be made to the appropriate address set forth on the last page of this Agreement (which
Wells Fargo may modify by a Record sent to Company), or through Wells Fargo&#146;s CEO portal or
other secure electronic channel to which the parties have agreed.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left">(c)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD><U>Date of Receipt</U>. Each Record sent pursuant to this Section will be deemed to have
been received on (i)&nbsp;the date of delivery to an authorized employee of Wells Fargo, if
delivered in person, or by U.S. mail, overnight courier, fax, or e-mail; or (ii)&nbsp;the date of
transmission, if sent as an Electronic Record through</TD>
</TR>

</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B><I>Credit and Security Agreement<BR>
WFBC/Iridex (Ex-Im Subfacility)</I></B>

</DIV>

<P align="center" style="font-size: 10pt"><!-- Folio -->30<!-- /Folio -->
</DIV>

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<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="font-family: Helvetica,Arial,sans-serif">

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Wells Fargo&#146;s CEO portal or similar secure electronic channel to which the parties have
agreed.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left">(d)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD><U>Authentication of Company Information Records</U>. Company shall Authenticate any Record
delivered (i)&nbsp;in person, or by U.S. mail, overnight courier, or fax, by the signature of the
Officer or employee of Company who prepared the Record; (ii)&nbsp;as an Electronic Record sent via
encrypted e-mail, by the signature of the Officer or employee of Company who prepared the
Record by any file format signature that is acceptable to Wells Fargo, or by a separate
certification signed and sent by fax; or (iii)&nbsp;as an Electronic Record via the file upload
service of Wells Fargo&#146;s CEO portal or similar secure electronic channel to which the parties
have agreed, through such credentialing process as Wells Fargo and Company may agree to under
the CEO agreement.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left">(e)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD><U>Certification of Company Information Records</U>. Any Record (including any Electronic
Record) Authenticated and delivered to Wells Fargo under this Section&nbsp;7.5 will be deemed to
have been certified as materially true, correct, and complete by Company and each Officer or
employee of Company who prepared and Authenticated the Record on behalf of Company, and may be
legally relied upon by Wells Fargo without regard to method of delivery or transmission.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left">(f)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD><U>Confidentiality of Company Information Records Sent by Unencrypted E-mail</U>. Company
acknowledges that if it sends an Electronic Record to Wells Fargo without encryption by e-mail
or as an e-mail file attachment, there is a risk that the Electronic Record may be received by
unauthorized Persons, and that by so doing it will be deemed to have accepted this risk and
the consequences of any such unauthorized disclosure. Company acknowledges that it may
deliver Electronic Records containing Company information to Wells Fargo by e-mail pursuant to
any encryption tool acceptable to Wells Fargo and Company, or through Wells Fargo&#146;s CEO portal
file upload service without risk of unauthorized disclosure.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left"><B>7.6</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD><B>Further Documents</B>. Company will from time to time execute, deliver, endorse and authorize
the filing of any instruments, documents, conveyances, assignments, security agreements,
financing statements, control agreements and other agreements that Wells Fargo may reasonably
request in order to secure, protect, perfect or enforce the Security Interest or Wells Fargo&#146;s
rights under the Loan Documents (but any failure to request or assure that Company executes,
delivers, endorses or authorizes the filing of any such item shall not affect or impair the
validity, sufficiency or enforceability of the Loan Documents and the Security Interest,
regardless of whether any such item was or was not executed, delivered or endorsed in a
similar context or on a prior occasion).</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left"><B>7.7</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD><B>Costs and Expenses</B>. Company shall pay on demand all costs and expenses, including reasonable
attorneys&#146; fees, incurred by Wells Fargo in connection with the Indebtedness, this Agreement,
the Loan Documents, or any other document or agreement related to this Agreement, and the
transactions contemplated by this Agreement, including all such costs, expenses and fees
incurred in connection with the negotiation, preparation, execution, amendment,
administration, performance, collection and enforcement of the Indebtedness</TD>
</TR>

</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B><I>Credit and Security Agreement<BR>
WFBC/Iridex (Ex-Im Subfacility)</I></B>

</DIV>

<P align="center" style="font-size: 10pt"><!-- Folio -->31<!-- /Folio -->
</DIV>

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<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="font-family: Helvetica,Arial,sans-serif">

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>and all such documents and agreements and the creation, perfection, protection,
satisfaction, foreclosure or enforcement of the Security Interest.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left"><B>7.8</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD><B>Indemnity</B>. In addition to its obligation to pay Wells Fargo&#146;s expenses under the terms of
this Agreement, Company shall indemnify, defend and hold harmless Wells Fargo, its parent
Wells Fargo &#038; Company, and any of its affiliates and successors, and all of their present and
future Officers, Directors, employees, attorneys and agents (the &#147;Indemnitees&#148;) from and
against any of the following (collectively, &#147;Indemnified Liabilities&#148;):</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left">(a)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Any and all transfer taxes, documentary taxes, assessments or charges made by any
governmental authority by reason of the execution and delivery of the Loan Documents or the
making of the Advances;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left">(b)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Any claims, loss or damage to which any Indemnitee may be subjected if any representation or
warranty contained in Exhibit&nbsp;D proves to be incorrect in any respect or as a result of any
violation of the covenants contained in Section&nbsp;5.12; and</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left">(c)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Any and all other liabilities, losses, damages, penalties, judgments, suits, claims, costs
and expenses of any kind or nature whatsoever (including the reasonable fees and disbursements
of counsel) in connection with this Agreement and any other investigative, administrative or
judicial proceedings, whether or not such Indemnitee shall be designated a party to such
proceedings, which may be imposed on, incurred by or asserted against any such Indemnitee, in
any manner related to or arising out of or in connection with the making of the Advances and
the Loan Documents or the use or intended use of the proceeds of the Advances, with the
exception of any Indemnified Liability caused by the gross negligence or willful misconduct of
an Indemnitee.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>If any investigative, judicial or administrative proceeding described in this Section is
brought against any Indemnitee, upon the Indemnitee&#146;s request, Company, or counsel
designated by Company and satisfactory to the Indemnitee, will resist and defend the
action, suit or proceeding to the extent and in the manner directed by the Indemnitee, at
Company&#146;s sole cost and expense. Each Indemnitee will use its best efforts to cooperate in
the defense of any such action, suit or proceeding. If this agreement to indemnify is held
to be unenforceable because it violates any law or public policy, Company shall
nevertheless make the maximum contribution to the payment and satisfaction of each of the
Indemnified Liabilities to the extent permissible under applicable law. Company&#146;s
obligations under this Section shall survive the termination of this Agreement and the
discharge of Company&#146;s other obligations under this Agreement.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left"><B>7.9</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD><B>Retention of Company&#146;s Records</B>. Wells Fargo shall have no obligation to maintain Electronic
Records or retain any documents, schedules, invoices, agings, or other Records delivered to
Wells Fargo by Company in connection with the Loan Documents for more than 30&nbsp;days after
receipt by Wells Fargo. If there is a special need to retain specific Records, Company must
notify Wells Fargo of its need to retain or return such Records with particularity, which
notice</TD>
</TR>

</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B><I>Credit and Security Agreement<BR>
WFBC/Iridex (Ex-Im Subfacility)</I></B>

</DIV>

<P align="center" style="font-size: 10pt"><!-- Folio -->32<!-- /Folio -->
</DIV>

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<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="font-family: Helvetica,Arial,sans-serif">

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>must be delivered to Wells Fargo in accordance with the terms of this Agreement at the time
of the initial delivery of the Record to Wells Fargo.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left"><B>7.10</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD><B>Binding Effect; Assignment; Complete Agreement</B>. The Loan Documents shall be binding upon and
inure to the benefit of Company and Wells Fargo and their respective successors and assigns,
except that Company shall not have the right to assign its rights under this Agreement or any
interest in this Agreement without Wells Fargo&#146;s prior consent, which must be confirmed in a
Record Authenticated by Wells Fargo. To the extent permitted by law, Company waives and will
not assert against any assignee any claims, defenses or set-offs which Company could assert
against Wells Fargo. This Agreement shall also bind all Persons who become a party to this
Agreement as a borrower. This Agreement, together with the Loan Documents, comprises the
complete and integrated agreement of the parties on the subject matter of this Agreement and
supersedes all prior agreements, whether oral or evidenced in a Record. To the extent that
any provision of this Agreement contradicts other provisions of the Loan Documents other than
this Agreement, this Agreement shall control.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left"><B>7.11</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD><B>Sharing of Information</B>. Wells Fargo may share any information that it may have regarding
Company and its Affiliates with its accountants, lawyers, and other advisors and with Ex-Im
Bank, and Wells Fargo, each direct and indirect subsidiary of Wells Fargo &#038; Company, and Ex-Im
Bank may also share any information that they have with each other, and Company waives any
right of confidentiality it may have with respect to the sharing of all such information.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left"><B>7.12</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD><B>Severability of Provisions</B>. Any provision of this Agreement which is prohibited or
unenforceable shall be ineffective to the extent of such prohibition or unenforceability
without invalidating the remaining terms of this Agreement.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left"><B>7.13</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD><B>Headings</B>. Section and subsection headings in this Agreement are included for convenience of
reference only and shall not constitute a part of this Agreement for any other purpose.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left"><B>7.14</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD><B>Governing Law; Jurisdiction, Venue</B>. The Loan Documents shall be governed by and construed in
accordance with the substantive laws (other than conflict laws) of the State of California.
The parties to this Agreement (a)&nbsp;consent to the personal jurisdiction of the state and
federal courts located in the State of California in connection with any controversy related
to this Agreement; (b)&nbsp;waive any argument that venue in any such forum is not convenient; (c)
agree that any litigation initiated by Wells Fargo or Company in connection with this
Agreement or the other Loan Documents may be venued in either the state or federal courts
located in the City of Los Angeles, County of Los Angeles, State of California; and (d)&nbsp;agree
that a final judgment in any such suit, action or proceeding shall be conclusive and may be
enforced in other jurisdictions by suit on the judgment or in any other manner provided by
law.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left"><B>7.15</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD><B>Incorporation of Borrower Agreement by Reference</B>. This Agreement shall constitute the &#147;Loan
Agreement&#148; under the Borrower Agreement, and the Line of Credit shall constitute the &#147;Loan
Facility&#148; under the Borrower Agreement. The terms of the Borrower Agreement are hereby
incorporated herein by this reference. In the event that any provision of this Agreement
conflicts with or is</TD>
</TR>

</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B><I>Credit and Security Agreement<BR>
WFBC/Iridex (Ex-Im Subfacility)</I></B>

</DIV>

<P align="center" style="font-size: 10pt"><!-- Folio -->33<!-- /Folio -->
</DIV>

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<DIV style="font-family: Helvetica,Arial,sans-serif">

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>inconsistent with any provision of the Borrower Agreement, the provision that is more
burdensome or restrictive as to Company shall control.</TD>
</TR>

</TABLE>
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 18pt">&#091;signatures on next page&#093;
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B><I>Credit and Security Agreement<BR>
WFBC/Iridex (Ex-Im Subfacility)</I></B>

</DIV>

<P align="center" style="font-size: 10pt"><!-- Folio -->34<!-- /Folio -->
</DIV>

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<DIV style="font-family: Helvetica,Arial,sans-serif">
<DIV style="font-size: 10pt; margin-top: 6pt">COMPANY AND WELLS FARGO HAVE EXECUTED THIS AGREEMENT THROUGH THEIR AUTHORIZED OFFICERS AS OF THE
DATE SET FORTH ABOVE.
</DIV>

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="2%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="30%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="10%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="30%">&nbsp;</TD>
</TR>
<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom">
    <TD colspan="5" valign="top"><B>WELLS FARGO BANK,</B></TD>
    <TD>&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="5" valign="top"><B>IRIDEX CORPORATION</B></TD>
</TR>
<TR valign="bottom">
    <TD colspan="5" valign="top"><B>NATIONAL ASSOCIATION</B></TD>
    <TD>&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">By:
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD valign="top">/s/ Jorge Visitacion</TD>
    <TD>&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD valign="top">By:</TD>
    <TD>&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD valign="top">/s/ James Mackaness</TD>
</TR>
<TR style="font-size: 1px">
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" valign="top" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" valign="top" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD colspan="3" valign="top" nowrap>Print Name:</TD>
    <TD>&nbsp;</TD>
    <TD valign="top">Jorge Visitacion</TD>
    <TD>&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" valign="top" nowrap>Print Name:</TD>
    <TD>&nbsp;</TD>
    <TD valign="top">James Mackaness</TD>
</TR>
<TR style="font-size: 1px">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD valign="top" style="border-top: 1px solid #000000">&nbsp;
</TD>
    <TD>&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD valign="top" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Title:
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD valign="top">AVP + Relationship Manager</TD>
    <TD>&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD valign="top">Title:</TD>
    <TD>&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD valign="top">CFO</TD>
</TR>
<TR style="font-size: 1px">
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" valign="top" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" valign="top" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD colspan="5" valign="top"><B>Wells Fargo Bank, National Association</B></TD>
    <TD>&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="5" valign="top"><B>IRIDEX Corporation</B></TD>
</TR>
<TR valign="bottom">
    <TD colspan="5" valign="top">245 Los Robles Avenue, Suite&nbsp;700</TD>
    <TD>&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="5" valign="top">1212 Terra Bella Avenue</TD>
</TR>
<TR valign="bottom">
    <TD colspan="5" valign="top">Pasadena, California 91101</TD>
    <TD>&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="5" valign="top">Mountain View, California 94043</TD>
</TR>
<TR valign="bottom">
    <TD colspan="5" valign="top">Fax: 626.844.9063</TD>
    <TD>&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="5" valign="top">Fax: <U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U><U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U></TD>
</TR>
<TR valign="bottom">
    <TD colspan="5" valign="top">Attention: Jorge Visitacion</TD>
    <TD>&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="5" valign="top">Attention: James Mackaness</TD>
</TR>
<TR valign="bottom">
    <TD colspan="5" valign="top">e-mail:
<u>jorge.c.visitacion@wellsfargo.com</u></TD>
    <TD>&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="5" valign="top">e-mail: <U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U><U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U></TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="5" valign="top">Federal Employer</TD>
</TR>
<TR valign="bottom">
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="5" valign="top">Identification No.: <U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U><U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U></TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="5" valign="top">Organizational Identifi-</TD>
</TR>
<TR valign="bottom">
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="5" valign="top">cation No.: <U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U><U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U></TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>


<DIV style="font-size: 10pt; margin-top: 6pt"><B><I>Credit and Security Agreement<BR>
WFBC/Iridex (Ex-Im Subfacility)</I></B>

</DIV>

<P align="center" style="font-size: 10pt"><!-- Folio -->S-1<!-- /Folio -->
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="font-family: Helvetica,Arial,sans-serif">

<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>Exhibit&nbsp;A to Credit and Security Agreement (Ex-Im Subfacility)</B>
</DIV>


<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><U><B>DEFINITIONS</B></U>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&#147;Account Funds&#148; is defined in Section&nbsp;1.4(a).
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&#147;Accounts&#148; shall have the meaning given it under the UCC.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&#147;Advance&#148; and &#147;Advances&#148; means an advance or advances under the Line of Credit.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&#147;Affiliate&#148; or &#147;Affiliates&#148; means any Person controlled by, controlling or under common control
with Company, including any Subsidiary of Company. For purposes of this definition, &#147;control,&#148;
when used with respect to any specified Person, means the power to direct the management and
policies of such Person, directly or indirectly, whether through the ownership of voting
securities, by contract or otherwise.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&#147;Agreement&#148; means this Credit and Security Agreement.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&#147;Authenticated&#148; means (a)&nbsp;to have signed; or (b)&nbsp;to have executed or to have otherwise adopted a
symbol, or have encrypted or similarly processed a Record in whole or in part, with the present
intent of the authenticating Person to identify the Person and adopt or accept a Record.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&#147;Borrower Agreement&#148; means the Borrower Agreement, dated on or about the date hereof, made by
Company in favor of Ex-Im Bank and Wells Fargo, as the same may hereafter be amended, modified,
supplemented or restated from time to time.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&#147;Borrowing Base&#148; is defined in Section&nbsp;1.2(a).
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&#147;Borrowing Base Reserve&#148; means, as of any date of determination, an amount or a percent of a
specified category or item that Wells Fargo establishes in its sole discretion from time to time to
reduce availability under the Borrowing Base (a)&nbsp;to reflect events, conditions, contingencies or
risks which affect the assets, business or prospects of Company, or the Collateral or its value, or
the enforceability, perfection or priority of Wells Fargo&#146;s Security Interest in the Collateral, as
the term &#147;Collateral&#148; is defined in this Agreement, or (b)&nbsp;to reflect Wells Fargo&#146;s judgment that
any collateral report or financial information relating to Company and furnished to Wells Fargo may
be incomplete, inaccurate or misleading in any material respect.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&#147;Buyer&#148; shall have the meaning provided for such term in the Borrower Agreement.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&#147;Business Day&#148; means a day on which the Federal Reserve Bank of New York is open for business and,
if such day relates to a LIBOR Advance, a day on which dealings are carried on in the London
interbank eurodollar market.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&#147;Capital Expenditures&#148; means for a period, any expenditure of money during such period for the
lease, purchase or other acquisition of any capital asset, or for the lease of any other asset
whether payable currently or in the future.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&#147;CEO&#148; is defined in Section&nbsp;7.4(a).
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&#147;Change of Control&#148; means the occurrence of any of the following events:
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B><I>Credit and Security Agreement<BR>
WFBC/Iridex (Ex-Im Subfacility)</I></B>

</DIV>

<P align="center" style="font-size: 10pt"><!-- Folio -->Exhibit A
&#151; Page 1<!-- /Folio -->
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="font-family: Helvetica,Arial,sans-serif">

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left">(a)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Any Person or &#147;group&#148; (as such term is used in Sections 13(d) and 14(d) of the Securities
Exchange Act of 1934) is or becomes the &#147;beneficial owner&#148; (as defined in Rules&nbsp;13d-3 and
13d-5 under the Securities Exchange Act of 1934, except that any such Person, entity or group
will be deemed to have &#147;beneficial ownership&#148; of all securities that such Person, entity or
group has the right to acquire, whether such right is exercisable immediately or only after
the passage of time), directly or indirectly, of more than thirty-three and one-third percent
(33.33%) of the voting power of all classes of ownership of Company;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left">(b)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>During any consecutive two-year period, individuals who at the beginning of such period
constituted the board of Directors of Company (together with any new Directors whose election
to such board of Directors, or whose nomination for election by the Owners of Company, was
approved by a vote of two thirds of the Directors then still in office who were either
Directors at the beginning of such period or whose election or nomination for election was
previously so approved) cease for any reason to constitute a majority of the board of
Directors of Company then in office.</TD>
</TR>

</TABLE>
</DIV>
<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&#147;Collateral&#148; means all of Company&#146;s Accounts, chattel paper and electronic chattel paper, deposit
accounts, documents, Equipment, General Intangibles, goods, instruments, Inventory, Investment
Property, letter-of-credit rights, letters of credit, all sums on deposit in any Collection
Account, and any items in any Lockbox; together with (a)&nbsp;all substitutions and replacements for and
products of such property; (b)&nbsp;in the case of all goods, all accessions; (c)&nbsp;all accessories,
attachments, parts, Equipment and repairs now or subsequently attached or affixed to or used in
connection with any goods; (d)&nbsp;all warehouse receipts, bills of lading and other documents of title
that cover such goods now or in the future; (e)&nbsp;all collateral subject to the Lien of any of the
Security Documents; (f)&nbsp;any money, or other assets of Company that come into the possession,
custody, or control of Wells Fargo now or in the future; (g)&nbsp;Proceeds of any of the above
Collateral; (h)&nbsp;books and records of Company, including all mail or e-mail addressed to Company;
and (i)&nbsp;all of the above Collateral, whether now owned or existing or acquired now or in the future
or in which Company has rights now or in the future; provided, however, that the term &#147;Collateral&#148;
shall not include more than 66% of the stock of any Subsidiary that is a &#147;controlled foreign
corporation&#148; as defined in the U.S. Internal Revenue Code.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&#147;Closing Date&#148; is defined in Section&nbsp;3.1.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&#147;Collection Account&#148; means &#147;Collection Account&#148; as defined in the Master Agreement for Treasury
Management Services and related Lockbox and Collection Account Service Description or Collection
Account Service Description, whichever is applicable.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&#147;Compliance Certificate&#148; is defined in Section&nbsp;5.1(a) and is in the form of Exhibit&nbsp;E.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&#147;Constituent Documents&#148; means with respect to any Person, as applicable, that Person&#146;s certificate
of incorporation, articles of incorporation, by-laws, certificate of formation, articles of
organization, limited liability company agreement, management agreement, operating agreement,
shareholder agreement, partnership agreement or similar document or agreement governing such
Person&#146;s existence, organization or management or concerning disposition of ownership interests of
such Person or voting rights among such Person&#146;s owners.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&#147;Country Limitation Schedule&#148; shall have the meaning provided for such term in the Borrower
Agreement.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B><I>Credit and Security Agreement<BR>
WFBC/Iridex (Ex-Im Subfacility)</I></B>

</DIV>

<P align="center" style="font-size: 10pt"><!-- Folio -->Exhibit A &#151; Page 2<!-- /Folio -->
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="font-family: Helvetica,Arial,sans-serif">
<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&#147;Current Maturities of Long Term Debt&#148; means, during a period beginning and ending on designated
dates, the amount of Company&#146;s long-term debt and capitalized leases which become due during that
period.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&#147;Debt&#148; means, as applied to any Person, (a)&nbsp;all obligations for borrowed money, (b)&nbsp;all obligations
evidenced by bonds, debentures, notes, or other similar instruments and all reimbursement or other
obligations in respect of letters of credit, bankers acceptances, hedges, derivatives, or other
financial products, (c)&nbsp;all obligations as a lessee under leases required to be capitalized in
accordance with GAAP, (d)&nbsp;all obligations or liabilities of others secured by a Lien on any asset
of such Person or its Subsidiaries, irrespective of whether such obligation or liability is
assumed, (e)&nbsp;all obligations of such Person to pay the deferred purchase price of assets (other
than trade payables incurred in the ordinary course of business and repayable in accordance with
customary trade practices), (f)&nbsp;all obligations of such Person owing under swap, cap, floor, collar
or similar hedging arrangements, and (g)&nbsp;any obligation guaranteeing or intended to guarantee
(whether directly or indirectly guaranteed, endorsed, co-made, discounted, or sold with recourse)
any obligation of any other Person that constitutes Indebtedness under any of clauses (a)&nbsp;through
(f)&nbsp;above.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&#147;Debt Service Coverage Ratio&#148; means (a)&nbsp;the sum of (i)&nbsp;Funds from Operations, plus (ii)&nbsp;Interest
Expense, minus (iii)&nbsp;unfinanced Capital Expenditures, plus (iv)&nbsp;to the extent not included in Net
Income, cash payments received by Company under that certain Settlement Agreement, dated April&nbsp;6,
2007, among Company, Synergetics, Inc., and Synergetics USA, Inc., <B><I>divided by </I></B>(b)&nbsp;the sum of (i)
monthly contractual debt payments paid or payable to American Medical Systems, (ii)&nbsp;other Current
Maturities of Long Term Debt, (iii)&nbsp;Interest Expense, (iv)&nbsp;any cash dividends or distributions paid
or payable, and (v)&nbsp;any amounts paid to redeem or repurchase stock or other equity interests of
Company.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&#147;Default Period&#148; is defined in Section&nbsp;1.6(c).
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&#147;Default Rate&#148; is defined in Section&nbsp;1.6(c).
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&#147;Dilution&#148; means, as of any date of determination, a percentage, based upon the prior six (6)
months, which is the result of dividing (a)&nbsp;actual bad debt write-downs, discounts, advertising
allowances, credits, and any other items with respect to the Accounts determined to be dilutive by
Wells Fargo in its sole discretion during this period, by (b)&nbsp;Company&#146;s net sales during such
period (excluding extraordinary items) plus the amount of clause (a).
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&#147;Director&#148; means a director if Company is a corporation.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&#147;Dollars&#148; or &#147;$&#148; shall mean the lawful currency of the United States.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&#147;Domestic Facility Agreement&#148; means the Credit and Security Agreement, dated as of March&nbsp;27, 2008,
between Company and Wells Fargo.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&#147;Earnings Before Taxes, Depreciation, and Amortization&#148; means Company&#146;s pretax earnings from
operations, excluding extraordinary gains, but including extraordinary losses, as determined prior
to deduction for depreciation and amortization.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&#147;Electronic Record&#148; means a Record that is created, generated, sent, communicated, received, or
stored by electronic means, but <U>does not</U> include any Record that is sent, communicated, or
received by fax.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B><I>Credit and Security Agreement<BR>
WFBC/Iridex (Ex-Im Subfacility)</I></B>

</DIV>

<P align="center" style="font-size: 10pt"><!-- Folio -->Exhibit A &#151; Page 3<!-- /Folio -->
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="font-family: Helvetica,Arial,sans-serif">
<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&#147;Eligible Accounts&#148; means all unpaid Accounts of Company owing by account debtors located outside
of the United States of America arising from the sale or lease of goods or the performance of
services, net of any credits, except that in no event shall Eligible Accounts include any Account:
</DIV>



<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 4%">(a)&nbsp;that does not arise from the sale of Items in the ordinary course of business;
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 4%">(b)&nbsp;that is not subject to a valid, perfected first priority Lien in favor of Wells Fargo;
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 4%">(c)&nbsp;as to which any covenant, representation or warranty contained in the Loan Documents
with respect to such Account has been breached;
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 4%">(d)&nbsp;that is not owned by Company or that is subject to any right, claim or interest of
another Person other than the Lien in favor of Wells Fargo;
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 4%">(e)&nbsp;with respect to which an invoice has not been sent;
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 4%">(f)&nbsp;that arises from the sale of defense articles or defense services;
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 4%">(g)&nbsp;that is due and payable from a Buyer located in a country with which Ex-Im Bank is
prohibited from doing business as designated in the Country Limitation Schedule;
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 4%">(h)&nbsp;that does not comply with the requirements of the Country Limitation Schedule;
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 4%">(i)&nbsp;that is not paid within 90&nbsp;days from the invoice date;
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 4%">(j)&nbsp;that arises from a sale of goods to or performance of services for an employee of
Company, a stockholder of Company, a subsidiary of Company, a Person with a controlling
interest in Company or a Person which shares common controlling ownership with Company;
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 4%">(k)&nbsp;that is backed by a letter of credit unless the Items covered by the subject letter of
credit have been shipped;
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 4%">(l)&nbsp;that Wells Fargo or Ex-Im Bank, in its reasonable judgment, deems uncollectible for any
reason;
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 4%">(m)&nbsp;that is due and payable in a currency other than Dollars, except as may be approved in
writing by Ex-Im Bank;
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 4%">(n)&nbsp;that is due and payable from a military Buyer, except as may be approved in writing by
Ex-Im Bank;
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 4%">(o)&nbsp;that does not comply with the terms of sale set forth in Section&nbsp;7 of the Loan
Authorization Notice;
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 4%">(p)&nbsp;that is due and payable from a Buyer who (A)&nbsp;applies for, suffers, or consents to the
appointment of, or the taking of possession by, a receiver, custodian, trustee or liquidator
of itself or of all or a substantial part of its property or calls a meeting of its
creditors, (B)&nbsp;admits in writing its inability, or is generally unable, to pay its debts as
they become due or ceases operations of its present business, (C)&nbsp;makes a general
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B><I>Credit and Security Agreement<BR>
WFBC/Iridex (Ex-Im Subfacility)</I></B>

</DIV>

<P align="center" style="font-size: 10pt"><!-- Folio -->Exhibit A &#151; Page 4<!-- /Folio -->
</DIV>

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<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="font-family: Helvetica,Arial,sans-serif">


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 4%">assignment for the benefit of creditors, (D)&nbsp;commences a voluntary case under any state or
federal bankruptcy laws (as now or hereafter in effect), (E)&nbsp;is adjudicated as bankrupt or
insolvent, (F)&nbsp;files a petition seeking to take advantage of any other law providing for the
relief of debtors, (G)&nbsp;acquiesces to, or fails to have dismissed, any petition which is
filed against it in any involuntary case under such bankruptcy laws, or (H)&nbsp;takes any action
for the purpose of effecting any of the foregoing;
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 4%">(q)&nbsp;that arises from a bill-and-hold, guaranteed sale, sale-and-return, sale on approval,
consignment or any other repurchase or return basis or is evidenced by chattel paper;
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 4%">(r)&nbsp;for which the Items giving rise to such Account have not been shipped and delivered and
accepted by the Buyer or the services giving rise to such Account have not been performed by
Company and accepted by the Buyer or the Account otherwise does not represent a final sale;
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 4%">(s)&nbsp;that portion of the Account that is subject to any offset, deduction, defense, dispute,
or counterclaim or where the Buyer is also a creditor or supplier of Company or that portion
of the Account that is contingent in any respect or for any reason;
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 4%">(t)&nbsp;for which Company has made any agreement with the Buyer for any deduction therefrom,
except for discounts or allowances made in the ordinary course of business for prompt
payment, all of which discounts or allowances are reflected in the calculation of the face
value of each respective invoice related thereto;
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 4%">(u)&nbsp;for which any of the Items giving rise to such Account have been returned, rejected or
repossessed;
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 4%">(v)&nbsp;to the extent it includes any finance charges, service charges, taxes, discounts,
credits, allowances and Retainages;
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 4%">(w)&nbsp;that arises from the sale of Items containing less than fifty one percent (51%) U.S.
Content;
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 4%">(x)&nbsp;that arises from the sale of Items containing any Foreign Content not incorporated into
such Items in the United States;
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 4%">(y)&nbsp;that arises from the sale of any Items to be used in the construction, alteration,
operation or maintenance of nuclear power, enrichment, reprocessing, research or heavy water
production facilities;
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 4%">(z)&nbsp;that does not meet the requirements set forth in the definition of &#147;Eligible-Related
Accounts Receivable&#148; in the Borrower Agreement;
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 4%">(aa)&nbsp;that is not subject to a duly perfected security interest in Wells Fargo&#146;s favor or
which are subject to any Lien in favor of any Person other than Wells Fargo;
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 4%">(bb)&nbsp;that has been restructured, extended, amended or modified;
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 4%">(cc)&nbsp;that is owing by an account debtor, regardless of whether otherwise eligible, to the
extent that the balance of such Accounts exceeds either (i)&nbsp;15% of the sum of (A)&nbsp;the
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B><I>Credit and Security Agreement<BR>
WFBC/Iridex (Ex-Im Subfacility)</I></B>

</DIV>

<P align="center" style="font-size: 10pt"><!-- Folio -->Exhibit A &#151; Page 5<!-- /Folio -->
</DIV>

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<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="font-family: Helvetica,Arial,sans-serif">


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 4%">aggregate amount of all Eligible Accounts and (B)&nbsp;the aggregate amount of all accounts
deemed eligible under the Domestic Facility Agreement or (ii)&nbsp;50% of the aggregate amount of
all Accounts owed by account debtors located outside the United States;
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 4%">(dd)&nbsp;that is owed by an account debtor, regardless of whether otherwise eligible, if 50% or
more of the total amount due under Accounts from such debtor is ineligible under clauses
(i), (s), or (bb)&nbsp;above;
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 4%">(ee)&nbsp;that is included as an &#147;Eligible Account&#148; under the Domestic Facility Agreement;
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 4%">(ff)&nbsp;that constitutes (i)&nbsp;Proceeds of copyrightable material unless such copyrightable
material shall have been registered with the United States Copyright Office, or (ii)
Proceeds of patentable inventions unless such patentable inventions have been registered
with the United States Patent and Trademark Office; and
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 4%">(gg)&nbsp;that are otherwise deemed ineligible for any reason by Wells Fargo or Ex-Im Bank in
their sole discretion.
</DIV>
<DIV align="left" style="font-size: 10pt; margin-top: 6pt">For sake of clarity, any Accounts that are deemed to be &#147;Eligible Accounts&#148; under the Domestic
Facility Agreement shall not be Eligible Accounts under this Agreement, and any Eligible Accounts
under this Agreement shall not be deemed to be &#147;Eligible Accounts&#148; under the Domestic Facility
Agreement.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&#147;Eligible Inventory&#148; means all export-related Inventory of Company, valued at the lower of cost or
market in accordance with GAAP; but excluding Inventory having any of the following
characteristics:
</DIV>



<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 4%">(a)&nbsp;Inventory that is: in-transit; located at any warehouse, job site or other premises not
approved by Wells Fargo in an Authenticated Record delivered to Company; not subject to a
perfected first priority Lien in Wells Fargo&#146;s favor; subject to any Lien or encumbrance
that is subordinate to Wells Fargo&#146;s first priority Lien; covered by any negotiable or
non-negotiable warehouse receipt, bill of lading or other document of title; on consignment
from any consignor; or on consignment to any consignee or subject to any bailment unless the
consignee or bailee has executed an agreement with Wells Fargo;
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 4%">(b)&nbsp;Supplies, packaging, parts or sample Inventory, or customer supplied parts or Inventory;
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 4%">(c)&nbsp;Inventory that is damaged, defective, obsolete, slow moving or not currently saleable in
the normal course of Company&#146;s operations, or the amount of such Inventory that has been
reduced by shrinkage;
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 4%">(d)&nbsp;Inventory that Company has returned, has attempted to return, is in the process of
returning or intends to return to the vendor of the Inventory;
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 4%">(e)&nbsp;Inventory that is perishable or live;
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 4%">(f)&nbsp;Inventory manufactured by Company pursuant to a license unless the applicable licensor
has agreed in a Record that has been Authenticated by licensor to permit Wells Fargo to
exercise its rights and remedies against such Inventory;
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B><I>Credit and Security Agreement<BR>
WFBC/Iridex (Ex-Im Subfacility)</I></B>

</DIV>

<P align="center" style="font-size: 10pt"><!-- Folio -->Exhibit A &#151; Page 6<!-- /Folio -->
</DIV>

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<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="font-family: Helvetica,Arial,sans-serif">


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 4%">(g)&nbsp;Inventory that is subject to a Lien in favor of any Person other than Wells Fargo;
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 4%">(h)&nbsp;Inventory stored at locations holding less than 10% of the aggregate value of Company&#146;s
Inventory;
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 4%">(i)&nbsp;Inventory containing less than fifty one percent (51%) U.S. Content;
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 4%">(j)&nbsp;Inventory containing any Foreign Content not incorporated into such Inventory in the
United States;
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 4%">(k)&nbsp;Inventory that does not meet the requirements set forth for eligible inventory in the
Borrower Agreement;
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 4%">(l)&nbsp;Inventory that was previously exported;
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 4%">(m)&nbsp;Inventory that consists of proprietary software;
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 4%">(n)&nbsp;Inventory consisting of defense articles or goods; and
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 4%">(o)&nbsp;Inventory otherwise deemed ineligible by Wells Fargo or Ex-Im Bank in their sole
discretion.
</DIV>
<DIV align="left" style="font-size: 10pt; margin-top: 6pt">For sake of clarity, any Inventory that is deemed to be &#147;Eligible Inventory&#148; under the Domestic
Facility Agreement shall not be Eligible Inventory under this Agreement, and any Eligible Inventory
under this Agreement shall not be deemed to be &#147;Eligible Inventory&#148; under the Domestic Facility
Agreement.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&#147;Environmental Law&#148; means any federal, state, local or other governmental statute, regulation, law
or ordinance dealing with the protection of human health and the environment.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&#147;Equipment&#148; shall have the meaning given it under the Uniform Commercial Code in effect in the
state whose laws govern this Agreement.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&#147;ERISA&#148; means the Employee Retirement Income Security Act of 1974, as amended from time to time.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&#147;ERISA Affiliate&#148; means any trade or business (whether or not incorporated) that is a member of a
group which includes Company and which is treated as a single employer under Section&nbsp;414 of the
IRC.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&#147;Event of Default&#148; is defined in Section&nbsp;6.1.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&#147;Ex-Im Bank&#148; means the Export-Import Bank of the United States, and its successors and assigns.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&#147;Ex-Im Bank Guaranty&#148; means that certain Master Guarantee Agreement between Wells Fargo and the
Export-Import Bank of the United States, as the same may hereafter be amended, modified,
supplemented or restated from time to time.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&#147;Export Order&#148; means a written export order or contract for the purchase by the Buyer from the
Company of any of the Items.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B><I>Credit and Security Agreement<BR>
WFBC/Iridex (Ex-Im Subfacility)</I></B>

</DIV>

<P align="center" style="font-size: 10pt"><!-- Folio -->Exhibit A &#151; Page 7<!-- /Folio -->
</DIV>

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<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="font-family: Helvetica,Arial,sans-serif">
<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&#147;Floating Rate&#148; is defined in Section&nbsp;1.6(a).
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&#147;Floating Rate Advance&#148; means an Advance bearing interest at the Floating Rate.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&#147;Foreign Content&#148; means, with respect to any Item, all of the labor, materials and services which
are not of United States origin or manufacture, or which are not incorporated into such Item in the
United States.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&#147;Funds from Operations&#148; means for a given period, the sum of (a)&nbsp;Net Income, (b)&nbsp;depreciation and
amortization, (c)&nbsp;stock-based compensation expenses, (d)&nbsp;any increase (or decrease) in lifo
reserves, each as determined for such period in accordance with GAAP, and (e)&nbsp;during the period
April&nbsp;1, 2008 to December&nbsp;31, 2008, an amount equal to the value (based on cost) of inventory sold
during the relevant measurement period, less an amount equal to the product of the applicable
advance rate (set forth in Section&nbsp;1.2) for such inventory multiplied by such inventory sold.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&#147;GAAP&#148; means generally accepted accounting principles, applied on a basis consistent with the
accounting practices applied in the financial statements described on Exhibit&nbsp;D.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&#147;General Intangibles&#148; shall have the meaning given it under the UCC.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&#147;Guarantor(s)&#148; means any Person now or in the future guaranteeing the Indebtedness through the
issuance of a Guaranty.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&#147;Guaranty&#148; means an unconditional continuing guaranty executed by a Guarantor in favor of Wells
Fargo (if more than one, the &#147;Guaranties&#148;).
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&#147;Hazardous Substances&#148; means pollutants, contaminants, hazardous substances, hazardous wastes,
petroleum and fractions thereof, and all other chemicals, wastes, substances and materials listed
in, regulated by or identified in any Environmental Law.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&#147;Indebtedness&#148; is used in its most comprehensive sense and means any debts, obligations and
liabilities of Company to Wells Fargo, whether incurred in the past, present or future, whether
voluntary or involuntary, and however arising, and whether due or not due, absolute or contingent,
liquidated or unliquidated, determined or undetermined, and including without limitation
indebtedness arising under any swap, derivative, foreign exchange, hedge, deposit, treasury
management or any similar transaction or arrangement that Company may enter into at any time with
Wells Fargo or with Wells Fargo Merchant Services, L.L.C., whether or not Company may be liable
individually or jointly with others, or whether recovery upon such Indebtedness may subsequently
become unenforceable.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&#147;Indemnified Liabilities&#148; is defined in Section&nbsp;7.8.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&#147;Indemnitees&#148; is defined in Section&nbsp;7.8.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&#147;Infringement&#148; or &#147;Infringing&#148; when used with respect to Intellectual Property Rights means any
infringement or other violation of Intellectual Property Rights.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&#147;Intellectual Property Rights&#148; means all actual or prospective rights arising in connection with
any intellectual property or other proprietary rights, including all rights arising in connection
with
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B><I>Credit and Security Agreement<BR>
WFBC/Iridex (Ex-Im Subfacility)</I></B>

</DIV>

<P align="center" style="font-size: 10pt"><!-- Folio -->Exhibit A &#151; Page 8<!-- /Folio -->
</DIV>

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<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="font-family: Helvetica,Arial,sans-serif">
<DIV align="left" style="font-size: 10pt; margin-top: 6pt">copyrights, patents, service marks, trade dress, trade secrets, trademarks, trade names or mask
works.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&#147;Interest Expense&#148; means for any period, Company&#146;s total gross interest expense during such period
(excluding interest income), and shall in any event include (a)&nbsp;interest expensed (whether or not
paid) on all Debt, (b)&nbsp;the amortization of debt discounts, (c)&nbsp;the amortization of all fees payable
in connection with the incurrence of Debt to the extent included in interest expense, and (d)&nbsp;the
portion of any capitalized lease obligation allocable to interest expense.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&#147;Interest Payment Date&#148; is defined in Section&nbsp;1.8(a).
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&#147;Interest Period&#148; means the period that commences on (and includes) the Business Day on which
either a LIBOR Advance is made or continued or on which a Floating Rate Advance is converted to a
LIBOR Advance, and ending on (but excluding) the Business Day numerically corresponding to that
date that falls the number of months afterward as selected by Company pursuant to Section&nbsp;1.3A,
during which period the outstanding principal amount of the LIBOR Advance shall bear interest at
the LIBOR Advance Rate; <U>provided</U>, <U>however</U>, that:
</DIV>


<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left">(a)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>If an Interest Period would otherwise end on a day which is not a Business Day, then it shall
end on the next Business Day, unless that day is the first Business Day of a month, in which
case the Interest Period shall end on the last Business Day of the preceding month;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left">(b)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>No Interest Period applicable to an Advance may end later than the Maturity Date; and</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left">(c)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>In no event shall Company select Interest Periods with respect to LIBOR Advances which would
result in the payment of a LIBOR Advance breakage fee under this Agreement in order to make
required principal payments.</TD>
</TR>

</TABLE>
</DIV>
<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&#147;Inventory&#148; shall have the meaning given it under the UCC.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&#147;Investment Property&#148; shall have the meaning given it under the UCC.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&#147;Items&#148; means the finished goods or services which are intended for export from the United States,
as specified in Section&nbsp;4(A) of the Loan Authorization Notice.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&#147;Joint Application&#148; means the Joint Application for Working Capital Guarantee made by Company and
Wells Fargo to Ex-Im Bank in connection with this Agreement.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&#147;Licensed Intellectual Property&#148; is defined in Exhibit&nbsp;D.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&#147;LIBOR&#148; means the rate per annum (rounded upward, if necessary, to the nearest whole
1/8<SUP style="font-size: 85%; vertical-align: text-top">th</SUP> of one percent (1%)) determined pursuant to the following formula:
</DIV>

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="15%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="50%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="22%">&nbsp;</TD>
</TR>
<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom">
    <TD align="right" valign="top"><DIV style="margin-left:0px; text-indent:-0px">LIBOR =
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">Base LIBOR
<DIV style="font-size: 1pt; border-top: 1px solid #000000">&nbsp;</DIV>
100% &#151; LIBOR Reserve Percentage
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;&nbsp;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>


<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left">(a)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>&#147;Base LIBOR&#148; means the rate per annum for United States dollar deposits quoted by Wells Fargo
as the Inter-Bank Market Offered Rate, with the understanding that such rate is quoted by
Wells Fargo for the purpose of calculating effective rates of interest for loans making
reference to it, on the first day of an Interest Period for delivery of funds on</TD>
</TR>

</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B><I>Credit and Security Agreement<BR>
WFBC/Iridex (Ex-Im Subfacility)</I></B>

</DIV>

<P align="center" style="font-size: 10pt"><!-- Folio -->Exhibit A &#151; Page 9<!-- /Folio -->
</DIV>

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<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="font-family: Helvetica,Arial,sans-serif">

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>that date for a period of time approximately equal to the number of days in that Interest
Period and in an amount approximately equal to the principal amount to which that Interest
Period applies. Company understands and agrees that Wells Fargo may base its quotation of
the Inter-Bank Market Offered Rate upon such offers or other market indicators of the
Inter-Bank Market as Wells Fargo in its discretion deems appropriate including the rate
offered for U.S. dollar deposits on the London Inter-Bank Market.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left">(b)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>&#147;LIBOR Reserve Percentage&#148; means the reserve percentage prescribed by the Board of Governors
of the Federal Reserve System (or any successor) for &#147;Eurocurrency Liabilities&#148; (as defined in
Regulation&nbsp;D of the Federal Reserve Board, as amended), adjusted by Wells Fargo for expected
changes in such reserve percentage during the applicable Interest Period.</TD>
</TR>

</TABLE>
</DIV>
<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&#147;LIBOR Advance&#148; means an Advance bearing interest at the LIBOR Advance Rate.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&#147;LIBOR Advance Rate&#148; is defined in Section&nbsp;1.6(a).
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&#147;Lien&#148; means any security interest, mortgage, deed of trust, pledge, lien, charge, encumbrance,
title retention agreement or analogous instrument or device, including the interest of each lessor
under any capitalized lease and the interest of any bondsman under any payment or performance bond,
in, of or on any assets or properties of a Person, whether now owned or subsequently acquired and
whether arising by agreement or operation of law.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&#147;Line of Credit&#148; is defined in the Recitals.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&#147;Loan Authorization Notice&#148; means the Loan Authorization Notice executed and delivered in
connection with this Agreement.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&#147;Loan Documents&#148; means this Agreement, the Domestic Facility Agreement, the Revolving Note, the
Ex-Im Bank Guaranty, the Borrower Agreement, the Joint Application, the Loan Authorization Notice,
each Guaranty, each Subordination Agreement, each Patent and Trademark Security Agreement, and the
Security Documents, together with every other agreement, note, document, contract or instrument to
which Company now or in the future may be a party and which may be required by Wells Fargo.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&#147;Loan Manager&#148; means the treasury management service defined in the Master Agreement for Treasury
Management Services and related Loan Manager Service Description.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&#147;Lockbox&#148; means &#147;Lockbox&#148; as defined in the Master Agreement for Treasury Management Services and
related Lockbox and Collection Account Service Description.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&#147;Margin&#148; means a rate per annum, expressed as a percentage, as more fully described in Section
1.6(a).
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&#147;Master Agreement for Treasury Management Services&#148; means the Master Agreement for Treasury
Management Services, the related Acceptance of Services, and the Service Description governing each
treasury management service used by Company.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&#147;Material Adverse Effect&#148; means any of the following:
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B><I>Credit and Security Agreement<BR>
WFBC/Iridex (Ex-Im Subfacility)</I></B>

</DIV>

<P align="center" style="font-size: 10pt"><!-- Folio -->Exhibit A &#151; Page 10<!-- /Folio -->
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="font-family: Helvetica,Arial,sans-serif">

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left">(a)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>A material adverse effect on the business, operations, results of operations, assets,
liabilities or financial condition of Company;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left">(b)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>A material adverse effect on the ability of Company to perform its obligations under the Loan
Documents; or</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left">(c)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>A material adverse effect on the ability of Wells Fargo to enforce the Indebtedness or to
realize the intended benefits of the Security Documents, including a material adverse effect
on the validity or enforceability of any Loan Document or of any rights against any Guarantor,
or on the status, existence, perfection, priority (subject to Permitted Liens) or
enforceability of any Lien securing payment or performance of the Indebtedness.</TD>
</TR>

</TABLE>
</DIV>
<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&#147;Maturity Date&#148; is defined in Section&nbsp;1.1(b).
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&#147;Maximum Line Amount&#148; is defined in Section&nbsp;1.1(a).
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&#147;Multiemployer Plan&#148; means a multiemployer plan (as defined in Section&nbsp;4001(a)(3) of ERISA) to
which Company or any ERISA Affiliate contributes or is obligated to contribute.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&#147;Net Income&#148; means fiscal year-to-date after-tax net income from continuing operations, including
extraordinary losses but excluding extraordinary gains, all as determined in accordance with GAAP.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&#147;OFAC&#148; is defined in Section&nbsp;5.12(b).
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&#147;Officer&#148; means with respect to Company, an officer of the Company.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&#147;Operating Account&#148; is defined in Section&nbsp;1.3(a), and maintained in accordance with the terms of
Wells Fargo&#146;s Commercial Account Agreement in effect for demand deposit accounts.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&#147;Overadvance&#148; means the amount, if any, by which the unpaid principal amount of the Revolving Note
is in excess of the then-existing Borrowing Base.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&#147;Owned Intellectual Property&#148; is defined in Exhibit&nbsp;D.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&#147;Owner&#148; means with respect to Company, each Person having legal or beneficial title to an ownership
interest in Company or a right to acquire such an interest.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&#147;Patent and Trademark Security Agreement&#148; means each Patent and Trademark Security Agreement
entered into between Company and Wells Fargo.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&#147;Pension Plan&#148; means a pension plan (as defined in Section&nbsp;3(2) of ERISA) maintained for employees
of Company or any ERISA Affiliate and covered by Title IV of ERISA.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&#147;Permitted Lien&#148; and &#147;Permitted Liens&#148; are defined in Section&nbsp;5.3(a).
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&#147;Permitted Securities&#148; shall mean any shares, units or interests of equity securities or ownership
interests of Company that by their terms (or by the terms of any security into which they are
convertible or for which they are exchangeable) or upon the happening of any event or otherwise (A)
are not convertible or exchangeable for Debt or any securities that are not Permitted Securities,
(B) (i)&nbsp;do not mature and (ii)&nbsp;are not putable or redeemable at the option of
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B><I>Credit and Security Agreement<BR>
WFBC/Iridex (Ex-Im Subfacility)</I></B>

</DIV>

<P align="center" style="font-size: 10pt"><!-- Folio -->Exhibit A &#151; Page 11<!-- /Folio -->
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="font-family: Helvetica,Arial,sans-serif">
<DIV align="left" style="font-size: 10pt; margin-top: 6pt">the holder thereof, in each case in whole or in part on or prior to the date that is six months
after the earlier of the Maturity Date or the actual payment in full in cash of the Indebtedness,
(C)&nbsp;do not require payments of dividends or distributions in cash on or prior to the date that is
six months after the earlier of the Maturity Date or the actual payment in full in cash of the
Indebtedness, and (D)&nbsp;are not secured by any Liens in property of Company.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&#147;Person&#148; means any individual, corporation, partnership, joint venture, limited liability company,
association, joint-stock company, trust, unincorporated organization or government or any agency or
political subdivision of a governmental entity.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&#147;Plan&#148; means an employee benefit plan (as defined in Section&nbsp;3(3) of ERISA) maintained for
employees of Company or any ERISA Affiliate.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&#147;Premises&#148; is defined in Section&nbsp;2.4(a).
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&#147;Prime Rate&#148; means at any time the rate of interest most recently announced by Wells Fargo at its
principal office as its Prime Rate, with the understanding that the Prime Rate is one of Wells
Fargo&#146;s base rates, and serves as the basis upon which effective rates of interest are calculated
for those loans making reference to it, and is evidenced by its recording in such internal
publication or publications as Wells Fargo may designate. Each change in the rate of interest
shall become effective on the date each Prime Rate change is announced by Wells Fargo.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&#147;Proceeds&#148; shall have the meaning given it under the UCC.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&#147;Record&#148; means information that is inscribed on a tangible medium or that is stored in an
electronic or other medium and is retrievable in perceivable form, and includes all information
that is required to be reported by Company to Wells Fargo pursuant to Section&nbsp;5.1.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&#147;Reportable Event&#148; means a reportable event (as defined in Section&nbsp;4043 of ERISA), other than an
event for which the 30-day notice requirement under ERISA has been waived in regulations issued by
the Pension Benefit Guaranty Corporation.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&#147;Retainage&#148; shall mean that portion of the purchase price of an Export Order that a Buyer is not
obligated to pay until the end of a specified period of time following the satisfactory performance
under such Export Order.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&#147;Revolving Notes&#148; is defined in Section&nbsp;1.1(d).
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&#147;Security Documents&#148; means this Agreement, the Patent and Trademark Security Agreement(s), the
Domestic Facility Agreement, the Borrower Agreement, and any other document delivered to Wells
Fargo from time to time to secure the Indebtedness.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&#147;Security Interest&#148; is defined in Section&nbsp;2.1.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&#147;Subordinated Creditor(s)&#148; means American Medical Systems, Inc. (&#147;AMS&#148;) , a Delaware corporation,
Laserscope, a California corporation and wholly-owned subsidiary of AMS, and any other Person now
or in the future subordinating indebtedness of Company held by that Person to the payment of the
Indebtedness.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&#147;Subordination Agreement&#148; means a subordination agreement executed by a Subordinated Creditor in
favor of Wells Fargo (if more than one, the &#147;Subordination Agreements&#148;).
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B><I>Credit and Security Agreement<BR>
WFBC/Iridex (Ex-Im Subfacility)</I></B>

</DIV>

<P align="center" style="font-size: 10pt"><!-- Folio -->Exhibit A &#151; Page 12<!-- /Folio -->
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="font-family: Helvetica,Arial,sans-serif">
<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&#147;Subsidiary&#148; means any Person of which more than 50% of the outstanding ownership interests having
general voting power under ordinary circumstances to elect a majority of the board of directors or
the equivalent of such Person, irrespective of whether or not at the time ownership interests of
any other class or classes shall have or might have voting power by reason of the happening of any
contingency, is at the time directly or indirectly owned by Company, by Company and one or more
other Subsidiaries, or by one or more other Subsidiaries.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&#147;Termination Date&#148; is defined in Section&nbsp;1.1(b).
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&#147;UCC&#148; means the Uniform Commercial Code in effect in the state designated in this Agreement as the
state whose laws shall govern this Agreement, or in any other state whose laws are held to govern
this Agreement or any portion of this Agreement.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&#147;U.S. Content&#148; means, with respect to any Item, all of the labor, materials and services which are
of United States origin or manufacture, and which are incorporated into such Item in the United
States.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&#147;Wells Fargo&#148; means Wells Fargo Bank, National Association in its broadest and most comprehensive
sense as a legal entity, and is not limited in its meaning to the Wells Fargo Business Credit
operating division, or to any other operating division of Wells Fargo.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B><I>Credit and Security Agreement<BR>
WFBC/Iridex (Ex-Im Subfacility)</I></B>

</DIV>

<P align="center" style="font-size: 10pt"><!-- Folio -->Exhibit A &#151; Page 13<!-- /Folio -->
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="font-family: Helvetica,Arial,sans-serif">

<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>Exhibit&nbsp;B to Credit and Security Agreement (Ex-Im Subfacility)</B>
</div>

<DIV align="center" style="font-size: 10pt; margin-top: 6pt"><B><u>PREMISES</u></B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Premises referred to in the Credit and Security Agreement have an address of 1212 Terra
Bella Avenue, Mountain View, California 94043,
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B><I>Credit and Security Agreement<BR>
WFBC/Iridex (Ex-Im Subfacility)</I></B>

</DIV>


<DIV align="center" style="font-size: 10pt; margin-top: 18pt">Exhibit&nbsp;B &#151; Page 1
</DIV>


<P align="center" style="font-size: 10pt"><!-- Folio --><!-- /Folio -->
</DIV>



<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>
<DIV style="font-family: Helvetica,Arial,sans-serif">


<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>Exhibit&nbsp;C to Credit and Security Agreement (Ex-Im Subfacility)</B>
</DIV>


<DIV align="center" style="font-size: 10pt; margin-top: 6pt"><U><B>CONDITIONS PRECEDENT</B></U>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Wells Fargo&#146;s obligation to make an initial Advance shall be subject to the condition that Wells
Fargo shall have received the following, duly executed and in form and content satisfactory to
Wells Fargo. The following descriptions are limited descriptions for reference purposes only and
should not be construed as limiting in any way the subject matter that Wells Fargo requires each
document to address.
</DIV>


<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left"><B>A.</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD><B>Loan Documents to be Executed by Company:</B></TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left">(1)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>The Revolving Note.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left">(2)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>The Credit and Security Agreement.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left">(3)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>The Master Agreement for Treasury Management Services, the Acceptance of Services, and the
related Service Description for each deposit or treasury management related product or service
that Company will subscribe to, including the Loan Manager Service Description and the Lockbox
and Collection Account Service Description.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left">(4)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>The Patent and Trademark Security Agreement.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left">(5)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>The Domestic Facility Agreement and all related documents, agreements, and instruments.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left">(6)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>The Borrower Agreement.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left">(7)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>The Joint Application.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left"><B>B.</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD><B>Loan Documents to be Executed by Third Parties:</B></TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left">(1)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>The Subordination Agreement of American Medical Systems, Inc. and Laserscope, pursuant to
which each Subordinated Creditor shall unconditionally subordinate payment of any indebtedness
of Company held by the Subordinated Creditor to the full and prompt payment of all Company&#146;s
Indebtedness.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left">(2)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>A Landlord&#146;s Disclaimer and Consent to each lease entered into by Company and that Landlord
with respect to the Premises, pursuant to which the Landlord waives its Lien in any goods or
other Inventory of Company located on the Premises.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left">(3)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Certificates Insurance required under this Agreement, with all hazard insurance containing a
lender&#146;s loss payable endorsement in Wells Fargo&#146;s favor and with all liability insurance
naming Wells Fargo as additional insured.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left">(4)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Any documents, agreements, or instruments requiring the execution by a third party
(including, but not limited to, the Export-Import Bank of the United States).</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left"><B>C.</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD><B>Documents Related to the Premises</B></TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left">(1)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Any leases pursuant to which Company is leasing the Premises from a lessor.</TD>
</TR>


</table>


</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B><I>Credit and Security Agreement<BR>
WFBC/Iridex (Ex-Im Subfacility)</I></B>

</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 18pt">Exhibit&nbsp;C &#151; Page 1
</DIV>


<P align="center" style="font-size: 10pt"><!-- Folio -->&nbsp;<!-- /Folio -->
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="font-family: Helvetica,Arial,sans-serif">




<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left">(2)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Every bailment or consignment pursuant to which any property of Company is in the possession
of a third Person such as a consignee or subcontractor, together with, in the case of any
goods held by such Person for resale, UCC financing statements sufficient to protect Company&#146;s
and Wells Fargo&#146;s interests in such goods.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left"><B>D.</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD><B>Federal Tax, State Tax, Judgment, UCC and Intellectual Property Lien Searches</B></TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left">(1)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Current searches of Company in appropriate filing offices showing that (i)&nbsp;no Liens have been
filed and remain in effect against Company and Collateral except Permitted Liens or Liens held
by Persons who have agreed in an Authenticated Record that upon receipt of proceeds of the
initial Advances, they will satisfy, release or terminate such Liens in a manner satisfactory
to Wells Fargo, and (ii)&nbsp;Wells Fargo has filed all UCC financing statements necessary to
perfect the Security Interest, to the extent the Security Interest is capable of being
perfected by filing.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left">(2)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Current searches of Third Persons in appropriate filing offices with respect to any of the
Collateral that is in the possession of a Person other than Company that is held for resale,
showing that (i)&nbsp;UCC financing statements sufficient to protect Company&#146;s and Wells Fargo&#146;s
interests in such Collateral have been filed, and (ii)&nbsp;no other secured party has filed a
financing statement against such Person and covering property similar to Company&#146;s, other than
Company, or if there exists any such secured party, evidence that each such party has received
notice from Company and Wells Fargo sufficient to protect Company&#146;s and Wells Fargo&#146;s
interests in Company&#146;s goods from any claim by such secured party.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left"><B>E.</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD><B>Constituent Documents:</B></TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left">(1)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>The Certificate of Authority of Company, which shall include as part of the Certificate or as
exhibits to the Certificate, (i)&nbsp;the Resolution of Company&#146;s Directors and, if required,
Owners, authorizing the execution, delivery and performance of the Loan Documents, (ii)&nbsp;an
Incumbency Certificate containing the signatures of Company&#146;s Officers or agents authorized to
execute and deliver the Loan Documents and other instruments, agreements and certificates,
including Advance requests, on Company&#146;s behalf, (iii)&nbsp;Company&#146;s Constituent Documents, (iv)&nbsp;a
current Certificate of Good Standing or Certificate of Status issued by the secretary of state
or other appropriate authority for Company&#146;s state of organization, certifying that Company is
in good standing and in compliance with all applicable organizational requirements of the
state of organization, and (v)&nbsp;a Secretary&#146;s Certificate of Company&#146;s secretary or assistant
secretary certifying that the Certificate of Authority of Company is true, correct and
complete.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left">(2)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>The Certificate of Authority of Corporate Guarantor, which shall include as part of the
Certificate or as exhibits to the Certificate, (i)&nbsp;the Resolution of Guarantor&#146;s Directors
and, if required, Owners, authorizing the execution, delivery and performance of the Guaranty
of Corporation, (ii)&nbsp;an Incumbency Certificate containing the signatures of Guarantor&#146;s
Officers or agents authorized to execute and deliver the Guaranty by Corporation on
Guarantor&#146;s behalf, (iii)&nbsp;Guarantor&#146;s Constituent Documents, (iv)&nbsp;a current Certificate of
Good Standing or Certificate of Status issued by the secretary of state or other appropriate
authority for Guarantor&#146;s state of organization, certifying that
Guarantor is in good standing and in compliance with all applicable organizational
requirements of the state of organization, and (v)&nbsp;a Secretary&#146;s Certificate of Guarantor&#146;s</TD>
</TR>

</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B><I>Credit and Security Agreement<BR>
WFBC/Iridex (Ex-Im Subfacility)</I></B>

</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 18pt">Exhibit&nbsp;C &#151; Page 2
</DIV>



<P align="center" style="font-size: 10pt"><!-- Folio -->&nbsp;<!-- /Folio -->
</DIV>


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<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>


<DIV style="font-family: Helvetica,Arial,sans-serif">




<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>secretary or assistant secretary certifying that the Certificate of Authority of Corporate
Guarantor and all attached exhibits are true, correct and complete.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left">(3)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Evidence that Company is licensed or qualified to transact business in all jurisdictions
where the character of the property owned or leased or the nature of the business transacted
by it makes such licensing or qualification necessary.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left">(4)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>An Officer&#146;s Certificate of an appropriate Officer of Company confirming, in his or her
personal capacity, the representations and warranties set forth in this Agreement.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left">(5)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>A Customer Identification Information Form and such other forms and verification as Wells
Fargo may need to comply with the U.S.A. Patriot Act.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left"><B>F.</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD><B>Miscellaneous Matters or Documents:</B></TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left">(1)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Payment of fees and reimbursable costs and expenses due under this Agreement through the date
of initial Advance, including all legal expenses incurred through the date of the closing of
this Agreement.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left">(2)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Evidence that after making the initial Advance, establishing all reserves under the Borrowing
Base, and satisfying all obligations owed to Company&#146;s prior lender and all trade payables
older than 60&nbsp;days from invoice date, book overdrafts and closing costs and fees (including
any fees deemed paid), the combined availability under the Line of Credit under this Agreement
and the &#147;Line of Credit&#148; under the Domestic Facility Agreement is not less than $1,000,000.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left">(3)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Such other documents as Wells Fargo in its sole discretion may require.</TD>
</TR>

</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B><I>Credit and Security Agreement<BR>
WFBC/Iridex (Ex-Im Subfacility)</I></B>

</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 18pt">Exhibit&nbsp;C &#151; Page 3
</DIV>


<P align="center" style="font-size: 10pt"><!-- Folio -->&nbsp;<!-- /Folio -->
</DIV>

<!-- PAGEBREAK -->
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<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="font-family: Helvetica,Arial,sans-serif">




<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>Exhibit&nbsp;D to Credit and Security Agreement (Ex-Im Subfacility)</B>
</DIV>


<DIV align="center" style="font-size: 10pt; margin-top: 6pt"><U><B>REPRESENTATIONS AND WARRANTIES</B></U>
</DIV>


<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Company represents and warrants to Wells Fargo as follows:</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left">(a)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD><U>Existence and Power; Name; Chief Executive Office; Inventory and Equipment Locations;
Federal Employer Identification Number and Organizational Identification Number</U>. Company
is a corporation organized, validly existing and in good standing under the laws of the State
of Delaware and is licensed or qualified to transact business in all jurisdictions where the
character of the property owned or leased or the nature of the business transacted by it makes
such licensing or qualification necessary. Company has all requisite power and authority to
conduct its business, to own its properties and to execute and deliver, and to perform all of
its obligations under, the Loan Documents. During its existence, Company has done business
solely under the names set forth below in addition to its correct legal name. Company&#146;s chief
executive office and principal place of business is located at the address set forth below,
and all of Company&#146;s records relating to its business or the Collateral are kept at that
location. All Inventory and Equipment is located at that location or at one of the other
locations set forth below. Company&#146;s name, Federal Employer Identification Number and
Organization Identification Number are correctly set forth at the end of the Agreement next to
Company&#146;s signature.</TD>
</TR>

</TABLE>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>Trade Names</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;IRIS Medical Instruments, Inc.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 0pt; margin-left: 2%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Prospero Surgical, Inc.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 0pt; margin-left: 2%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Trilogy Medical Systems, Inc.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>Chief Executive Office / Principal Place of Business</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1212 Terra Bella Avenue, Mountain View, California 94043
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>Other Inventory and Equipment Locations</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Aeronet
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 0pt; margin-left: 2%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1751 Junction Ave
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 0pt; margin-left: 2%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;San Jose, CA 95112
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 0pt; margin-left: 2%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(offsite inventory purchased from AMS)
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left">(b)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD><U>Capitalization</U>. &#091;INTENTIONALLY OMITTED&#093;.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left">(c)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD><U>Authorization of Borrowing; No Conflict as to Law or Agreements</U>. The execution,
delivery and performance by Company of the Loan Documents and borrowing under the Line of
Credit have been authorized and do not (i)&nbsp;require the consent or approval of Company&#146;s
Owners; (ii)&nbsp;require the authorization, consent or approval by, or registration, declaration
or filing with, or notice to, any governmental agency or instrumentality, whether domestic or
foreign, or any other Person, except to the extent obtained, accomplished or given prior to
the date of this Agreement; (iii)&nbsp;violate any provision of any law, rule or regulation
(including Regulation&nbsp;X of the Board of Governors of the</TD>
</TR>

</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B><I>Credit and Security Agreement<BR>
WFBC/Iridex (Ex-Im Subfacility)</I></B>

</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 18pt">Exhibit&nbsp;D &#151; Page 1
</DIV>


<P align="center" style="font-size: 10pt"><!-- Folio -->&nbsp;<!-- /Folio -->
</DIV>

<!-- PAGEBREAK -->
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<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="font-family: Helvetica,Arial,sans-serif">




<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Federal Reserve System) or of any order, writ, injunction or decree presently in effect
having applicability to Company or of Company&#146;s Constituent Documents; (iv)&nbsp;result in a
breach of or constitute a default or event of default under any indenture or loan or credit
agreement or any other material agreement, lease or instrument to which Company is a party
or by which it or its properties may be bound or affected; or (v)&nbsp;result in, or require, the
creation or imposition of any Lien (other than the Security Interest) upon or with respect
to any of the properties now owned or subsequently acquired by Company.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left">(d)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD><U>Legal Agreements</U>. This Agreement constitutes and, upon due execution by Company, the
other Loan Documents will constitute the legal, valid and binding obligations of Company,
enforceable against Company in accordance with their respective terms.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left">(e)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD><U>Subsidiaries</U>. Except as disclosed below, Company has no Subsidiaries.</TD>
</TR>

</TABLE>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 4%"><B>Subsidiaries</B>
</DIV>

<DIV style="margin-top: 6pt; margin-left:2%">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">1.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>IRIDEX UK Limited</TD>
</TR>


<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">2.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>IRIDEX France S.A.</TD>
</TR>

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">3.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Iris Medical Instruments, Inc. &#151; wholly-owned subsidiary but not active</TD>
</TR>

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">4.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Light Solutions Corporation &#151; wholly-owned subsidiary but not active</TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left">(f)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD><U>Financial Condition; No Adverse Change</U>. Company has furnished to Wells Fargo its
audited financial statements for its fiscal year ended December&nbsp;31, 2006, and unaudited
financial statements for the fiscal-year-to-date period ended September&nbsp;29, 2007, and those
statements fairly present Company&#146;s financial condition as of those dates and the results of
Company&#146;s operations and cash flows for the periods then ended and were prepared in accordance
with GAAP. Since the date of the most recent financial statements, there has been no Material
Adverse Effect in Company&#146;s business, properties or condition (financial or otherwise).</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left">(g)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD><U>Litigation</U>. There are no actions, suits or proceedings pending or, to Company&#146;s
knowledge, threatened against or affecting Company or any of its Affiliates or the properties
of Company or any of its Affiliates before any court or governmental department, commission,
board, bureau, agency or instrumentality, domestic or foreign, which, if determined adversely
to Company or any of its Affiliates, would have a Material Adverse Effect on the financial
condition, properties or operations of Company or any of its Affiliates.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left">(h)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD><U>Intellectual Property Rights</U>.</TD>
</TR>

</TABLE>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 3%">(i) <U>Owned Intellectual Property</U>. Set forth below is a complete list of all patents,
applications for patents, trademarks, applications to register trademarks, service marks,
applications to register service marks, mask works, trade dress and copyrights for which
Company is the owner of record (the &#147;Owned Intellectual Property&#148;). Except as set forth
below, (A)&nbsp;Company owns the Owned Intellectual Property free and clear of all restrictions
(including covenants not to sue any Person), court orders, injunctions, decrees, writs or
Liens, whether by agreement memorialized in a Record Authenticated by Company or otherwise,
(B)&nbsp;no Person other than Company owns or has been granted any right in the Owned
Intellectual Property, (C)&nbsp;all Owned Intellectual Property is valid, subsisting and
enforceable, and (D)&nbsp;Company has taken all commercially reasonable action necessary to
maintain and protect the Owned Intellectual Property.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B><I>Credit and Security Agreement<BR>
WFBC/Iridex (Ex-Im Subfacility)</I></B>

</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 18pt">Exhibit&nbsp;D &#151; Page 2
</DIV>


<P align="center" style="font-size: 10pt"><!-- Folio -->&nbsp;<!-- /Folio -->
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="font-family: Helvetica,Arial,sans-serif">





<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">(ii) <U>Agreements with Employees and Contractors</U>. Company has entered into a legally
enforceable agreement with each Person that is an employee or subcontractor obligating that
Person to assign to Company, without additional compensation, any Intellectual Property
Rights created, discovered or invented by that Person in the course of that Person&#146;s
employment or engagement with Company (except to the extent prohibited by law), and further
obligating that Person to cooperate with Company, without additional compensation, to secure
and enforce the Intellectual Property Rights on behalf of Company, unless the job
description of the Person is such that it is not reasonably foreseeable that the employee or
subcontractor will create, discover, or invent Intellectual Property Rights.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">(iii) <U>Intellectual Property Rights Licensed from Others</U>. Set forth below is a
complete list of all agreements under which Company has licensed Intellectual Property
Rights from another Person (&#147;Licensed Intellectual Property&#148;) other than readily available,
non-negotiated licenses of computer software and other intellectual property used solely for
performing accounting, word processing and similar administrative tasks (&#147;Off-the-shelf
Software&#148;) and a summary of any ongoing payments Company is obligated to make with respect
thereto. Except as set forth below or in any other Record, copies of which have been given
to Wells Fargo, Company&#146;s licenses to use the Licensed Intellectual Property are free and
clear of all restrictions, Liens, court orders, injunctions, decrees, or writs, whether by
agreed to in a Record Authenticated by Company or otherwise. Except as disclosed below,
Company is not contractually obligated to make royalty payments of a material nature, or pay
fees to any owner of, licensor of, or other claimant to, any Intellectual Property Rights.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">(iv) <U>Other Intellectual Property Needed for Business</U>. Except for Off-the-shelf
Software and as disclosed below, the Owned Intellectual Property and the Licensed
Intellectual Property constitute all Intellectual Property Rights used or necessary to
conduct Company&#146;s business as it is presently conducted or as Company reasonably foresees
conducting it.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">(v) <U>Infringement</U>. Except as disclosed below, Company has no knowledge of, and has
not received notice either orally or in a Record alleging, any Infringement of another
Person&#146;s Intellectual Property Rights (including any claim set forth in a Record that
Company must license or refrain from using the Intellectual Property Rights of any Person)
nor, to Company&#146;s knowledge, is there any threatened claim or any reasonable basis for any
such claim.
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><U><B>Intellectual Property Disclosures</B></U>
</DIV>



<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%"><B>(h)(i) &#151; Please see attached</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%"><B>(h)(iii) &#151; Inbound License Agreements</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">1. Laserscope / AMS &#151; paid up license<BR>
2. Georgetown University &#151; 5% on G-probes<BR>
3. Palomar &#151; 7.5% on Lyra and 3.75% on Gemini<BR>
4. Colder Products &#151; $5.00 on each RFID Console (IQ577) manufactured<BR>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B><I>Credit and Security Agreement<BR>
WFBC/Iridex (Ex-Im Subfacility)</I></B>

</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 18pt">Exhibit&nbsp;D &#151; Page 3
</DIV>



<P align="center" style="font-size: 10pt"><!-- Folio -->&nbsp;<!-- /Folio -->
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="font-family: Helvetica,Arial,sans-serif">




<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left">(i)&nbsp;&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD><U>Taxes</U>. Except as disclosed below, Company and its Affiliates have paid or caused to
be paid to the proper authorities when due all federal, state and local taxes required to be
withheld by each of them. Company and its Affiliates have filed all federal, state and local
tax returns which to the knowledge of the Officers of Company or any Affiliate, as the case
may be, are required to be filed, and Company and its Affiliates have paid or caused to be
paid to the respective taxing authorities all taxes as shown on these returns or on any
assessment received by any of them to the extent such taxes have become due.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD>&nbsp;&nbsp;&nbsp;&nbsp;<B>Taxes</B></TD>
</TR>

</TABLE>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left:6%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Company received and has responded to an inquiry from the State of
Iowa regarding $9,900 of back taxes.
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left">(j)&nbsp;&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD><U>Titles and Liens</U>. Company has good and absolute title to all Collateral free and
clear of all Liens other than Permitted Liens. No financing statement naming Company as
debtor is on file in any office except to perfect only Permitted Liens.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left">(k)&nbsp;&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD><U>No Defaults</U>. Except as disclosed below, Company is in compliance with all provisions
of all agreements, instruments, decrees and orders to which it is a party or by which it or
its property is bound or affected, the breach or default of which could have a Material
Adverse Effect on Company&#146;s financial condition, properties or operations.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD>&nbsp;&nbsp;&nbsp;<B>No Defaults</B></TD>
</TR>

</TABLE>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 6%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Company is not in compliance with certain provisions of the
Business Loan and Security Agreement by and among <br>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;IRIDEX
Corporation and Mid-Peninsula Bank, part of Greater Bay Bank N.A.,
dated January&nbsp;16, 2007.
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left">(l)&nbsp;&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD><U>Submissions to Wells Fargo</U>. All financial and other information provided to Wells
Fargo by or on behalf of Company in connection with Company&#146;s request for the credit
facilities contemplated hereby is (i)&nbsp;true and correct in all material respects, (ii)&nbsp;does not
omit any material fact that would cause such information to be misleading, and (iii)&nbsp;as to
projections, valuations or proforma financial statements, present a good faith opinion as to
such projections, valuations and proforma condition and results.</TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left">(m)</TD>
    <TD width="4%">&nbsp;</TD>
    <TD><U>Financing Statements</U>. Company has previously authorized the filing of financing
statements sufficient when filed to perfect the Security Interest and other Liens created by
the Security Documents. When such financing statements are filed, Wells Fargo will have a
valid and perfected security interest in all Collateral capable of being perfected by the
filing of financing statements. None of the Collateral is or will become a fixture on real
estate, unless a sufficient fixture filing has been filed with respect to such Collateral.</TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left">(n)&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD><U>Rights to Payment</U>. Each right to payment and each instrument, document, chattel
paper and other agreement constituting or evidencing Collateral is (or, in the case of all
future Collateral, will be when arising or issued) the valid, genuine and legally enforceable
obligation, subject to no defense, setoff or counterclaim of the account debtor or other
obligor named in that instrument.</TD>
</TR>

</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B><I>Credit and Security Agreement<BR>
WFBC/Iridex (Ex-Im Subfacility)</I></B>

</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 18pt">Exhibit&nbsp;D &#151; Page 4
</DIV>



<P align="center" style="font-size: 10pt"><!-- Folio -->&nbsp;<!-- /Folio -->
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="font-family: Helvetica,Arial,sans-serif">




<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left">(o)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD><U>Employee Benefit Plans</U>.</TD>
</TR>

</TABLE>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">(i) <U>Maintenance and Contributions to Plans</U>. Except as disclosed below, neither
Company nor any ERISA Affiliate (A)&nbsp;maintains or has maintained any Pension Plan,
(B)&nbsp;contributes or has contributed to any Multiemployer Plan, or (C)&nbsp;provides or has
provided post-retirement medical or insurance benefits to employees or former employees
(other than benefits required under Section&nbsp;601 of ERISA, Section&nbsp;4980B of the IRC, or
applicable state law).
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">(ii) <U>Knowledge of Plan Noncompliance with Applicable Law</U>. Except as disclosed
below, neither Company nor any ERISA Affiliate has (A)&nbsp;knowledge that Company or the ERISA
Affiliate is not in full compliance with the requirements of ERISA, the IRC, or applicable
state law with respect to any Plan, (B)&nbsp;knowledge that a Reportable Event occurred or
continues to exist in connection with any Pension Plan, or (C)&nbsp;sponsored a Plan that it
intends to maintain as qualified under the IRC that is not so qualified, and no fact or
circumstance exists which may have an adverse effect on such Plan&#146;s tax-qualified status.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">(iii) <U>Funding Deficiencies and Other Liabilities</U>. Neither Company nor any ERISA
Affiliate has liability for any (A)&nbsp;accumulated funding deficiency (as defined in Section
302 of ERISA and Section&nbsp;412 of the IRC) under any Plan, whether or not waived,
(B)&nbsp;withdrawal, partial withdrawal, reorganization or other event under any Multiemployer
Plan under Section&nbsp;4201 or 4243 of ERISA, or (C)&nbsp;event or circumstance which could result in
financial obligation to the Pension Benefit Guaranty Corporation, the Internal Revenue
Service, the Department of Labor or any participant in connection with any Plan (other than
routine claims for benefits under the Plan).
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 3%"><B>Employee Benefit Plans</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 3%"><B>None</B>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left">(p)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD><U>Environmental Matters</U>.</TD>
</TR>

</TABLE>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">(i)&nbsp;Hazardous Substances on Premises. Except as disclosed below, there are not present in,
on or under the Premises any Hazardous Substances in such form or quantity as to create any
material liability or obligation for either Company or Wells Fargo under the common law of
any jurisdiction or under any Environmental Law, and no Hazardous Substances have ever been
stored, buried, spilled, leaked, discharged, emitted or released in, on or under the
Premises in such a way as to create a material liability.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">(ii) <U>Disposal of Hazardous Substances</U>. Except as disclosed below, Company has not
disposed of Hazardous Substances in such a manner as to create any material liability under
any Environmental Law.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">(iii) <U>Claims and Proceedings with Respect to Environmental Law Compliance</U>. Except
as disclosed below, there have not existed in the past, nor are there any threatened or
impending requests, claims, notices, investigations, demands, administrative proceedings,
hearings or litigation relating in any way to the Premises or
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B><I>Credit and Security Agreement<BR>
WFBC/Iridex (Ex-Im Subfacility)</I></B>

</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 18pt">Exhibit&nbsp;D &#151; Page 5
</DIV>



<P align="center" style="font-size: 10pt"><!-- Folio -->&nbsp;<!-- /Folio -->
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="font-family: Helvetica,Arial,sans-serif">





<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">Company, alleging material liability under, violation of, or noncompliance with any
Environmental Law or any license, permit or other authorization issued pursuant thereto.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">(iv) <U>Compliance with Environmental Law; Permits and Authorizations</U>. Except as
disclosed below, Company (A)&nbsp;conducts its business at all times in compliance with
applicable Environmental Law, (B)&nbsp;possesses valid licenses, permits and other authorizations
required under applicable Environmental Law for the lawful and efficient operation of its
business, none of which are scheduled to expire, or withdrawal, or material limitation
within the next 12&nbsp;months, and (C)&nbsp;has not been denied insurance on grounds related to
potential environmental liability.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">(v) <U>Status of Premises</U>. Except as disclosed below, the Premises are not and never
have been listed on the National Priorities List, the Comprehensive Environmental Response,
Compensation and Liability Information System or any similar federal, state or local list,
schedule, log, inventory or database.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">(vi) <U>Environmental Audits, Reports, Permits and Licenses</U>. Company has delivered to
Wells Fargo all environmental assessments, audits, reports, permits, licenses and other
documents describing or relating in any way to the Premises or Company&#146;s businesses.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 4%"><B>Environmental Matters</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 6%">Please see attached &#147;Environmental Compliance Plan&#148; submitted by
the Company to the City of Mountain View.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B><I>Credit and Security Agreement<BR>
WFBC/Iridex (Ex-Im Subfacility)</I></B>

</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 18pt">Exhibit&nbsp;D &#151; Page 6
</DIV>




<P align="center" style="font-size: 10pt"><!-- Folio -->&nbsp;<!-- /Folio -->
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="font-family: Helvetica,Arial,sans-serif">




<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><U>Exhibit&nbsp;D &#151; Item (h)(i)</U>
</DIV>


<DIV align="Center" style="font-size: 10pt; margin-top: 6pt">Intellectual Property Disclosures

</DIV>

<DIV align="Center" style="font-size: 10pt; margin-top: 6pt">U.S Issued Patents

</DIV>
<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="64%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="8%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left" colspan="3"><B>DATE</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left" colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left" colspan="3">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD nowrap align="left" style="border-bottom: 1px solid #000000"><B>PATENT TITLE</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left" colspan="3" style="border-bottom: 1px solid #000000"><B>ISSUED</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left" colspan="3" style="border-bottom: 1px solid #000000"><B>PATENT NO.</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left" colspan="3" style="border-bottom: 1px solid #000000"><B>HOLDER</B></TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Optical Fiber with Electrical Encoding</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">02/4/1992</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">5,085,492</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="left">IRIDEX Corporation</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Technique for Coupling Laser Diode to Optical
Fiber</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">02/18/1992</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">5,088,803</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="left">IRIDEX Corporation</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Contact Probe for Laser Cyclophotocoagulation</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">12/13/1994</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">5,372,595</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>

<TD colspan="3" align="left"><FONT style="white-space: nowrap">IRIDEX
Corporation Georgetown University</font></TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Passively
stabilized intracavity doubling laser</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">04/23/1996</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">5,511,085</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="left">IRIDEX Corporation</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Scalable side-pumped
solid-state laser</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">05/28/1996</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">5,521,932</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="left">IRIDEX Corporation</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Fiber stub end-pumped laser</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">09/2/1997</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">5,663,979</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="left">IRIDEX Corporation</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Pulsed Laser with Passive
Stabilization</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">11/9/1999</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">5,982,789</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="left">IRIDEX Corporation</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Fiber stub end-pumped laser</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">12/7/1999</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">5,999,554</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="left">IRIDEX Corporation</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Cw laser amplifier</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">10/31/2000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">6,141,143</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="left">IRIDEX Corporation</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Cw laser amplifier</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">11/7/2000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">6,144,484</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="left">IRIDEX Corporation</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Aspheric Lensing Control
for High Power
Butt-Coupled End-Pumped
Laser</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">04/24/2001</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">6,222,869</TD>
    <TD>&nbsp;B1</TD>
    <TD>&nbsp;</td>
    <TD colspan="3" align="left">IRIDEX Corporation</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Fiber stub end-pumped laser</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">12/4/2001</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">6,327,291</TD>
    <TD>&nbsp;B1</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="left">IRIDEX Corporation</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Focusability Enhancing
Optic for Laser Diode</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">04/23/2002</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">6,377,599</TD>
    <TD>&nbsp;B1</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="left">IRIDEX Corporation</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Method and
Apparatus for
Real-Time Detection,
Control and Recording of
Sub-Clinical Therapeutic
Laser Lesions During
Ocular Laser
Photocoagulation</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">04/1/2003</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">6,540,391</TD>
    <TD>&nbsp;B2</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="left">IRIDEX Corporation</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B><I>Credit and Security Agreement<BR>
WFBC/Iridex (Ex-Im Subfacility)</I></B>

</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 18pt">Exhibit&nbsp;D &#151; Page 1
</DIV>






<P align="center" style="font-size: 10pt"><!-- Folio -->&nbsp;<!-- /Folio -->
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="font-family: Helvetica,Arial,sans-serif">



<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="64%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left" colspan="3"><B>DATE</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left" colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left" colspan="3">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD nowrap align="left" style="border-bottom: 1px solid #000000"><B>PATENT TITLE</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left" colspan="3" style="border-bottom: 1px solid #000000"><B>ISSUED</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left" colspan="3" style="border-bottom: 1px solid #000000"><B>PATENT NO.</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left" colspan="3" style="border-bottom: 1px solid #000000"><B>HOLDER</B></TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Method and Apparatus for
Controlling Sub-Clinical
Laser Procedures with
Intra-Operataive
Monitoring of
Electrophysiological
Changes</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">05/11/2004</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">6,733,490</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="left"><FONT style="white-space: nowrap">IRIDEX Corporation</font></TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Treatment Site Cooling
System of Skin Disorders</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">12/12/2006</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">7,147,654</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="left">IRIDEX Corporation</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>


<DIV align="center" style="font-size: 10pt; margin-top: 18pt">U.S Patent Applications
</DIV>

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="64%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left" colspan="3"><B>DATE</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left" colspan="3"><B>APPLICATION</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left" colspan="3">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD nowrap align="left" style="border-bottom: 1px solid #000000"><B>PATENT APPLICATION TITLE</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left" colspan="3" style="border-bottom: 1px solid #000000"><B>FILED</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left" colspan="3" style="border-bottom: 1px solid #000000"><B>NO.</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left" colspan="3" style="border-bottom: 1px solid #000000"><B>HOLDER</B></TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Apparatus for Real-Time
Measurement/Control Of
Intra-Operataive Effects
During Laser Thermal
Treatments, Using Light
Scattering</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">09/20/2002</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">60/412,465</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="left"><FONT style="white-space: nowrap">IRIDEX Corporation</font></TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">MicroPulse for Uveo/Scleral
Outflow (Provisional)</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">10/30/2007</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">60/983,811</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="left">IRIDEX Corporation</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Directional (stepped)&nbsp;Probe
Treatment Apparatus</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">08/16/2004</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">11/205,629</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="left">IRIDEX Corporation</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Short Pulse Laser Treatment</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">02/15/2005</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">11/066,615</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="left">IRIDEX Corporation</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Flushtip Illuminating EndoProbe</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">11/3/2006</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">11/556,504</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="left">IRIDEX Corporation</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Shaped Tip Illuminating
EndoProbe</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">03/13/2007</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">11/685,351</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="left">IRIDEX Corporation</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>


<DIV align="center" style="font-size: 10pt; margin-top: 18pt">Foreign Issued Patents
</DIV>

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="64%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD nowrap align="left" style="border-bottom: 1px solid #000000"><B>TITLE</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left" colspan="3" style="border-bottom: 1px solid #000000"><B>COUNTRY</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left" colspan="3" style="border-bottom: 1px solid #000000"><B>PATENT NO.</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left" colspan="3" style="border-bottom: 1px solid #000000"><B>DATE ISSUED</B></TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Pulsed Laser w/Passive Stabilization
EP0904615</DIV></TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="left">Europe</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">0904615</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">09/5/2001</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">DE app &#151; 97928819.8</DIV></TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="left">Germany</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">69706541</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">09/5/2001</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">UK App &#151; 97928819.8</DIV></TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="left"><FONT style="white-space: nowrap">United Kingdom</font></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">69706541</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">09/5/2001</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">FR App &#151; 97928819.8</DIV></TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="left">France</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">69706541</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">09/5/2001</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Passively Stable Intra-doubling Laser
EP0730783</DIV></TD>
        <TD>&nbsp;</TD>
    <TD colspan="3">Europe</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">0730783</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">04/23/2003</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">DE app &#151; 69530497.6</DIV></TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="left">Germany</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">69530497.6</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">4/23/2003</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Passively Stable Intra-doubling Laser</DIV></TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="left">Korea</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">348012</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">07/26/2002</TD>
    <TD>&nbsp;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B><I>Credit and Security Agreement<BR>
WFBC/Iridex (Ex-Im Subfacility)</I></B>

</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 18pt">Exhibit&nbsp;D &#151; Page 2
</DIV>



<P align="center" style="font-size: 10pt"><!-- Folio -->&nbsp;<!-- /Folio -->
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="font-family: Helvetica,Arial,sans-serif">




<DIV align="center" style="font-size: 10pt; margin-top: 18pt">Foreign Patent Applications
</DIV>

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="64%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD nowrap align="left" style="border-bottom: 1px solid #000000"><B>TITLE</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left" colspan="3" style="border-bottom: 1px solid #000000"><B>COUNTRY</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left" colspan="3" style="border-bottom: 1px solid #000000"><B>SERIAL NUMBER</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left" colspan="3" style="border-bottom: 1px solid #000000"><B>FILING DATE</B></TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Directional (Stepped) Probe
Treatment Apparatus</DIV></TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="center">Germany</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2005/038611.3</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">08/16/2005</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Method and Apparatus for
Controlling Sub-Clinical
Laser Procedures with
Intra-Operataive Monitoring
of Electrophysiological
Changes</DIV></TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="left">Europe</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">03723833.4</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">3/25/2003</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Short Pulse (Green microPulse)</DIV></TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="left">Europe</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2006/006369</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">02/22/2006</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Short Pulse (Green microPulse)</DIV></TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="left">Japan</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">2007-557145</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">08/21/2007</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Flush and Shaped Tip
Illuminating EndoProbes</DIV></TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="left">PCT</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">2007-083139</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">10/31/2007</TD>
    <TD>&nbsp;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>


<DIV align="center" style="font-size: 10pt; margin-top: 18pt">U.S. Trademark Registrations
</DIV>

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="64%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD nowrap align="left" colspan="3"></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left" colspan="3"><B>REGISTRATION</B></TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD nowrap align="left" colspan="3" style="border-bottom: 1px solid #000000"><B>COUNTRY</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left" style="border-bottom: 1px solid #000000"><B>TRADEMARK</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left" colspan="3" style="border-bottom: 1px solid #000000"><B>REGISTRATION NO.</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left" colspan="3" style="border-bottom: 1px solid #000000"><B>DATE</B></TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom" style="background: #cceeff">
    <TD valign="top" align="left" colspan="2">U.S.</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD><DIV style="margin-left:15px; text-indent:-15px">APEX</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2,528,141</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">01/08/2002</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top" align="left" colspan="2">U.S.</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD><DIV style="margin-left:15px; text-indent:-15px">AURA</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">3,306.455</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">10/09/2007</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD valign="top" align="left" colspan="2">U.S.</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD><DIV style="margin-left:15px; text-indent:-15px">COOLSPOT</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">3,044,965</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">01/17/2006</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top" align="left" colspan="2">U.S.</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD><DIV style="margin-left:15px; text-indent:-15px">DERMASTAT</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,329,417</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">04/09/1985</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD valign="top" align="left" colspan="2">U.S.</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD><DIV style="margin-left:15px; text-indent:-15px">DESIGN</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,618,629</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">10/23/1990</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top" align="left" colspan="2">U.S.</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD><DIV style="margin-left:15px; text-indent:-15px">ENDOPROBE</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,622,307</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">11/13/1990</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD valign="top" align="left" colspan="2">U.S.</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD><DIV style="margin-left:15px; text-indent:-15px">GEMINI</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">3,044,850</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">01/17/2006</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top" align="left" colspan="2">U.S.</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD><DIV style="margin-left:15px; text-indent:-15px">IRIDEX</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2,204,220</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">11/17/1998</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD valign="top" align="left" colspan="2">U.S.</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD><DIV style="margin-left:15px; text-indent:-15px">IRIDEX</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2,204,219</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">11/17/1998</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top" align="left" colspan="2">U.S.</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD><DIV style="margin-left:15px; text-indent:-15px">IRIS MEDICAL</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,822,545</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">02/22/1994</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD valign="top" align="left" colspan="2">U.S.</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD><DIV style="margin-left:15px; text-indent:-15px">LYRA</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">3,200,356</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">01/23/2007</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top" align="left" colspan="2">U.S.</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD><DIV style="margin-left:15px; text-indent:-15px">OCULIGHT</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,618,628</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">10/23/1990</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD valign="top" align="left" colspan="2">U.S.</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD><DIV style="margin-left:15px; text-indent:-15px">SMARTKEY</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,618,627</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">10/23/1990</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top" align="left" colspan="2">U.S.</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD><DIV style="margin-left:15px; text-indent:-15px">VENUS</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">3,023,256</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">12/06/2005</TD>
    <TD>&nbsp;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>


<DIV align="center" style="font-size: 10pt; margin-top: 18pt">U.S. Trademark Applications
</DIV>

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="64%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD nowrap align="left" style="border-bottom: 1px solid #000000"><B>COUNTRY</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left" colspan="3" style="border-bottom: 1px solid #000000"><B>TRADEMARK</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left" colspan="3" style="border-bottom: 1px solid #000000"><B>APPLICATION NO.</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left" colspan="3" style="border-bottom: 1px solid #000000"><B>FILING DATE</B></TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">U.S.</DIV></TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="center">SOLIS</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">78/446,386</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">07/06/2004</TD>
    <TD>&nbsp;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B><I>Credit and Security Agreement<BR>
WFBC/Iridex (Ex-Im Subfacility)</I></B>

</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 18pt">Exhibit&nbsp;D &#151; Page 3
</DIV>
</DIV>
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>
<DIV style="font-family: Helvetica,Arial,sans-serif">

<DIV align="center" style="font-size: 10pt; margin-top: 18pt">Foreign Trademark Registrations
</DIV>

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="64%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left" colspan="3"><B>REGISTRATION</B></TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD nowrap align="left" style="border-bottom: 1px solid #000000"><B>COUNTRY</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left" colspan="3" style="border-bottom: 1px solid #000000"><B>TRADEMARK</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left" colspan="3" style="border-bottom: 1px solid #000000"><B>REGISTRATION NO.</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left" colspan="3" style="border-bottom: 1px solid #000000"><B>DATE</B></TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:0px; text-indent:-0px">Australia<br></DIV></TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="left">AURA</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">852,861</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">12/07/2004</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:0px; text-indent:-0px">France<br>
Korea<br>
Madrid Protocol<br>
United Kingdom</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="padding-top: 0em"><!-- Blank Space -->
    <TD><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:0px; text-indent:-0px">France<br></DIV></TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="left">GEMINI</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">838,771</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">11/17/2004</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:0px; text-indent:-0px">Korea<br>
Madrid Protocol<br>
United Kingdom</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="padding-top: 0em; background: #cceeff">
    <TD><DIV style="margin-left:0px; text-indent:-0px">Australia<br></DIV></TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="left">LYRA</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">849,033</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">12/07/2004</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:0px; text-indent:-0px">France<br>
Korea<br>
Madrid Protocol<br>
United Kingdom</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="padding-top: 0em"><!-- Blank Space -->
    <TD><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:0px; text-indent:-0px">France<br></DIV></TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="left">SOLIS</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">866,673</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">12/07/2004</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:0px; text-indent:-0px">Madrid Protocol<br>
United Kingdom</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="padding-top: 0em; background: #cceeff">
    <TD><DIV style="margin-left:0px; text-indent:-0px">France<br></DIV></TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="left">VENUS</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">849,035</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">12/07/2004</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:0px; text-indent:-0px">Madrid Protocol</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="padding-top: 0em"><!-- Blank Space -->
    <TD><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:0px; text-indent:-0px">Canada</DIV></TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="left">GEMINI</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">TMA707678</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">02/19/2008</TD>
    <TD>&nbsp;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>



<DIV align="center" style="font-size: 10pt; margin-top: 18pt">Foreign Trademark Applications
</DIV>

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="64%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD nowrap align="left" style="border-bottom: 1px solid #000000"><B>COUNTRY</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left" colspan="3" style="border-bottom: 1px solid #000000"><B>TRADEMARK</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left" colspan="3" style="border-bottom: 1px solid #000000"><B>APPLICATION NO.</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left" colspan="3" style="border-bottom: 1px solid #000000"><B>FILING DATE</B></TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Canada</DIV></TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="left">AURA</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,239,900</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">12/07/2004</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Australia</DIV></TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="left">GEMINI</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,154,571</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">12/28/2006</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Canada</DIV></TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="left">LYRA</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,239,901</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">12/07/2004</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Canada</DIV></TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="left">VENUS</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,239,902</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">12/07/2004</TD>
    <TD>&nbsp;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B><I>Credit and Security Agreement<BR>
WFBC/Iridex (Ex-Im Subfacility)</I></B>

</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 18pt">Exhibit&nbsp;D &#151; Page 4
</DIV>



<P align="center" style="font-size: 10pt"><!-- Folio -->&nbsp;<!-- /Folio -->
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="font-family: Helvetica,Arial,sans-serif">




<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><U>Exhibit&nbsp;D &#151; Item (p)</U>
</DIV>


<DIV align="Center" style="font-size: 10pt; margin-top: 6pt">(see attached copy)

</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B><I>Credit and Security Agreement<BR>
WFBC/Iridex (Ex-Im Subfacility)</I></B>

</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 18pt">Exhibit&nbsp;D &#151; Page 1
</DIV>



<P align="center" style="font-size: 10pt"><!-- Folio -->&nbsp;<!-- /Folio -->
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="font-family: Helvetica,Arial,sans-serif">




<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>Exhibit&nbsp;E to Credit and Security Agreement (Ex-Im Subfacility)</B><BR>
<U><B>COMPLIANCE CERTIFICATE</B></U>
</DIV>

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="10%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="88%">&nbsp;</TD>
</TR>
<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">To:
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Wells Fargo Bank, National Association</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Date:
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&#091;<U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U>,&nbsp;200_&#093;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Subject:
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Financial Statements</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In accordance with our Credit and Security Agreement (Ex-Im Subfacility) dated March&nbsp;27, 2008
(as amended from time to time, the &#147;Credit Agreement&#148;), attached are the financial statements of
IRIDEX CORPORATION (the &#147;Company&#148;) dated &#091;<U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U>, 200_&#093; (the &#147;Reporting Date&#148;) and the
year-to-date period then ended (the &#147;Current Financials&#148;). All terms used in this certificate have
the meanings given in the Credit Agreement.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;A.&nbsp;Preparation and Accuracy of Financial Statements. I certify that the Current Financials
have been prepared in accordance with GAAP, subject to year-end audit adjustments, and fairly
present Company&#146;s financial condition as of the Reporting Date.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;B.&nbsp;Name of Company; Merger and Consolidation. I certify that:
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(Check one)
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><FONT face="Wingdings">&#111;</FONT></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Company has not, since the date of the Credit Agreement, changed its name or
jurisdiction of organization, nor has it consolidated or merged with another Person.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><FONT face="Wingdings">&#111;</FONT></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Company has, since the date of the Credit Agreement, either changed its name or
jurisdiction of organization, or both, or has consolidated or merged with another
Person, which change, consolidation or merger: <FONT face="Wingdings">&#111;</FONT> was consented to in advance by Wells
Fargo in an Authenticated Record, and/or <FONT face="Wingdings">&#111;</FONT> is more fully described in the statement
of facts attached to this Certificate.</TD>
</TR>

</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;C.&nbsp;Events of Default. I certify that:
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(Check one)
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><FONT face="Wingdings">&#111;</FONT></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>I have no knowledge of the occurrence of an Event of Default under the Credit
Agreement, except as previously reported to Wells Fargo in a Record.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><FONT face="Wingdings">&#111;</FONT></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>I have knowledge of an Event of Default under the Credit Agreement not previously
reported to Wells Fargo in a Record, as more fully described in the statement of
facts attached to this Certificate, and further, I acknowledge that Wells Fargo may
under the terms of the Credit Agreement impose the Default Rate at any time during
the resulting Default Period.</TD>
</TR>

</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;D.&nbsp;Litigation Matters. I certify that:
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(Check one)
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><FONT face="Wingdings">&#111;</FONT></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>I have no knowledge of any material adverse change to the litigation exposure of
Company or any of its Affiliates or of any Guarantor.</TD>
</TR>

</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B><I>Credit and Security Agreement<BR>
WFBC/Iridex (Ex-Im Subfacility)</I></B>

</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 18pt">Exhibit&nbsp;E &#151; Page 1
</DIV>



<P align="center" style="font-size: 10pt"><!-- Folio -->&nbsp;<!-- /Folio -->
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="font-family: Helvetica,Arial,sans-serif">




<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><FONT face="Wingdings">&#111;</FONT></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>I have knowledge of material adverse changes to the litigation exposure of Company
or any of its Affiliates or of any Guarantor not previously disclosed in Exhibit&nbsp;D,
as more fully described in the statement of facts attached to this Certificate.</TD>
</TR>

</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;E.&nbsp;Financial Covenants. I further certify that:
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(Check and complete each of the following)
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.&nbsp;Minimum Net Income. Pursuant to Section&nbsp;5.2(a) of the Credit Agreement, as of the
Reporting Date, Company&#146;s Net Income plus approved intangible expense adjustments (approved by
Wells Fargo in Wells Fargo&#146;s sole discretion) was $<U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U>, which <FONT face="Wingdings">&#111;</FONT> satisfies <FONT face="Wingdings">&#111;</FONT> does not satisfy
the requirement that Net Income be not less than $<U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U> on the Reporting Date (numbers
appearing between &#147;&#060; &#062;&#148; are negative).
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.&nbsp;Minimum Debt Service Coverage Ratio. Pursuant to Section&nbsp;5.2(b) of the Credit Agreement,
as of the Reporting Date, Company&#146;s Debt Service Coverage Ratio was <U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U> to 1.00, <FONT face="Wingdings">&#111;</FONT> which <FONT face="Wingdings">&#111;</FONT> satisfies
does not satisfy the requirement that such ratio be no less than <U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U> to 1.00 on the Reporting
Date.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.&nbsp;Capital Expenditures. Pursuant to Section&nbsp;5.2(c) of the Credit Agreement, for the
year-to-date period ending on the Reporting Date, Company has expended or contracted to expend
during the fiscal year ended <U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U>, 200&#95;&#95;&#95;, for Capital Expenditures, $<U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U> in
the aggregate, which <FONT face="Wingdings">&#111;</FONT> satisfies <FONT face="Wingdings">&#111;</FONT> does not satisfy the requirement that such expenditures not exceed
$<U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U> in the aggregate.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Attached are statements of all relevant facts and computations in reasonable detail sufficient
to evidence Company&#146;s compliance with the financial covenants referred to above, which computations
were made in accordance with GAAP.
</DIV>
<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="40%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="30%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="14%">&nbsp;</TD>
</TR>
<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">By:</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top"><DIV style="font-size: 1pt; border-top: 1px solid #000000">&nbsp;</DIV>
Its: Chief Financial Officer
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B><I>Credit and Security Agreement<BR>
WFBC/Iridex (Ex-Im Subfacility)</I></B>

</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 18pt">Exhibit&nbsp;E &#151; Page 2
</DIV>




<P align="center" style="font-size: 10pt"><!-- Folio -->&nbsp;<!-- /Folio -->
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="font-family: Helvetica,Arial,sans-serif">




<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>Exhibit&nbsp;F to Credit and Security Agreement (Ex-Im Subfacility)</B>
</DIV>


<DIV align="Center" style="font-size: 10pt; margin-top: 6pt"><U><B>PERMITTED LIENS</B></U>

</DIV>
<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="64%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD nowrap align="left" style="border-bottom: 1px solid #000000">Creditor</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3" style="border-bottom: 1px solid #000000">Collateral</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3" style="border-bottom: 1px solid #000000">Jurisdiction</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3" style="border-bottom: 1px solid #000000">Filing Date</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3" style="border-bottom: 1px solid #000000">Filing No.</TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">American Medical
Systems (AMS)&nbsp;and
Laserscope</DIV></TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="center"><FONT style="white-space: nowrap">All assets of the Company</font></TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="center">DE</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">08/16/2007</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">73128476</TD>
    <TD>&nbsp;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>


<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><U><B>INDEBTEDNESS</B></U>
</DIV>

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="52%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3">Current Principal</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3">Maturity</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3">Monthly</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD nowrap align="left" style="border-bottom: 1px solid #000000">Creditor</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3" style="border-bottom: 1px solid #000000">Amt.</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3" style="border-bottom: 1px solid #000000">Date</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3" style="border-bottom: 1px solid #000000">Payment</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3" style="border-bottom: 1px solid #000000">Collateral</TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">AMS</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">420,192.22</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="center"><FONT style="white-space: nowrap">Aug. 7, 2008</font></TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">22,115.38</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="center"><FONT style="white-space: nowrap">See Subordination Agreement</font></TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">AMS</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">2,777,591.63</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="center"><FONT style="white-space: nowrap">Sept. 25, 2008</font></TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">110,185</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="center">See Subordination Agreement</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">

<TD><DIV style="margin-left:15px; text-indent:-15px">AMS<SUP style="font-size: 85%; vertical-align: text-top">1 </SUP></DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">823,536</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="center">Sept.</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="center"><FONT style="white-space: nowrap">Approx $140,000</font></TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="center">See Subordination Agreement</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>


<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><U><B>GUARANTIES</B></U>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt">None.
</DIV>



<DIV align="left">
<DIV style="font-size: 3pt; margin-top: 16pt; width: 18%; border-top: 1px solid #000000">&nbsp;</DIV>
</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">
<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96"></TD>
</TR>

<TR valign="top">
    <TD nowrap align="left">1</TD>
    <TD>&nbsp;</TD>
    <TD>This indebtedness relates to contractual POS the Company has
placed with AMS for inventory. The Company must prepay when the inventory is
delivered.</TD>
</TR>

</TABLE>



<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B><I>Credit and Security Agreement<BR>
WFBC/Iridex (Ex-Im Subfacility)</I></B>

</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 18pt">Exhibit&nbsp;F &#151; Page 1
</DIV>



<P align="center" style="font-size: 10pt"><!-- Folio -->&nbsp;<!-- /Folio -->
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="font-family: Helvetica,Arial,sans-serif">




<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>Exhibit&nbsp;G to Credit and Security Agreement (Ex-Im Subfacility)</B>
</DIV>


<DIV align="Center" style="font-size: 10pt; margin-top: 6pt"><B>Borrowing Base Certificate for Ex-Im Bank Guaranteed Line</B>

</DIV>

<DIV align="Center" style="font-size: 10pt; margin-top: 6pt"><B>(See attached form)</B>

</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B><I>Credit and Security Agreement<BR>
WFBC/Iridex (Ex-Im Subfacility)</I></B>

</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 18pt">Exhibit&nbsp;F &#151; Page 1
</DIV>



<P align="center" style="font-size: 10pt"><!-- Folio -->&nbsp;<!-- /Folio -->
</DIV>



</BODY>
</HTML>
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10.3
<SEQUENCE>4
<FILENAME>f39469exv10w3.htm
<DESCRIPTION>EXHIBIT 10.3
<TEXT>
<HTML>
<HEAD>
<TITLE>exv10w3</TITLE>
</HEAD>
<BODY bgcolor="#FFFFFF">
<!-- PAGEBREAK -->
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>
<DIV style="font-family: Helvetica,Arial,sans-serif">


<DIV align="right" style="font-size: 10pt; margin-top: 12pt"><B>Exhibit&nbsp;10.3</B>
</DIV>


<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><FONT style="font-variant: SMALL-CAPS"><B>Export-Import Bank of the United States</B></FONT><BR>
<FONT style="font-variant: SMALL-CAPS"><B>Working Capital Guarantee Program</B></FONT>
</DIV>


<DIV align="Center" style="font-size: 10pt; margin-top: 6pt"><FONT style="font-variant: SMALL-CAPS"><B>Borrower Agreement</B></FONT>

</DIV>

<P align="center" style="font-size: 10pt"><!-- Folio -->&nbsp;<!-- /Folio -->
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="font-family: Helvetica,Arial,sans-serif">

<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>TABLE OF CONTENTS</B>
</DIV>

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="88%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>
<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><B>ARTICLE I DEFINITIONS</B></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px">1.01 Definition of Terms</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px">1.02 Rules of Construction</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">14</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px">1.03 Incorporation of Recitals</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">15</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">ARTICLE II OBLIGATIONS OF BORROWER</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">15</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px">2.01 Use of Credit Accommodations</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">15</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px">2.02 Security Interests</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">15</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px">2.03 Loan Documents and Loan Authorization Agreement</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">16</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px">2.04 Export-Related Borrowing Base Certificates and Export Orders</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">16</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px">2.05 Schedules, Reports and Other Statements</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">16</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px">2.06
Exclusions from the Export-Related Borrowing Base</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">16</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px">2.07 Borrowings and Reborrowings</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">17</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px">2.08 Repayment Terms</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">17</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px">2.09 Financial Statements</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">17</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px">2.10 Additional Security or Payment</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">17</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px">2.11 Continued Security Interest</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">18</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px">2.12 Inspection of Collateral and Facilities</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">18</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px">2.13 General Intangibles</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">19</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px">2.14 Economic Impact Approval</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">19</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px">2.15 Indirect Exports</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">19</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px">2.16 Overseas Inventory and Accounts Receivable</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">20</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px">2.17 Country Limitation Schedule</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">21</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px">2.18 Notice of Certain Event</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">21</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px">2.19 Insurance</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">22</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px">2.20 Taxes</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">22</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px">2.21 Compliance with Laws</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">22</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px">2.22 Negative Covenants</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">22</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px">2.23 Cross Default</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">22</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px">2.24 Munitions List</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">22</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px">2.25 Suspension and Debarment, etc</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">22</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">ARTICLE III RIGHTS AND REMEDIES</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">23</TD>
    <TD>&nbsp;</TD>
</TR>
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<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="88%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>
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<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px">3.01 Indemnification</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">23</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px">3.02 Liens</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">23</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">ARTICLE IV MISCELLANEOUS</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">24</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px">4.01 Governing Law</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">24</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px">4.02 Notification</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">24</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px">4.03 Partial Invalidity</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">24</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px">4.04 Waiver of Jury Trial</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">24</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px">4.05 Consequential Damages</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">24</TD>
    <TD>&nbsp;</TD>
</TR>
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<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><FONT style="font-variant: SMALL-CAPS"><B>Export-Import Bank of the United States</B></FONT><BR>
<FONT style="font-variant: SMALL-CAPS"><B>Working Capital Guarantee Program</B></FONT><BR>
<FONT style="font-variant: SMALL-CAPS"><B>Borrower Agreement</B></FONT>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;THIS BORROWER AGREEMENT (this &#147;Agreement&#148;) is made and entered into by the entity identified
as Borrower on the signature page hereof (&#147;Borrower&#148;) in favor of the Export-Import Bank of the
United States (&#147;Ex-Im Bank&#148;) and the institution identified as Lender on the signature page hereof
(&#147;Lender&#148;).
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>RECITALS</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Borrower has requested that Lender establish a Loan Facility in favor of Borrower for the
purposes of providing Borrower with working capital to finance the manufacture, production or
purchase and subsequent export sale of Items.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Lender and Borrower expect that Ex-Im Bank will provide a guarantee to Lender regarding this
Loan Facility subject to the terms and conditions of the Master Guarantee Agreement, a Loan
Authorization Agreement, and to the extent applicable, the Delegated Authority Letter Agreement or
Fast Track Lender Agreement.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Lender and Ex-Im Bank have requested that Borrower execute this Agreement as a condition
precedent to Lender establishing the Loan Facility and Ex-Im Bank providing the guarantee.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;NOW, THEREFORE, Borrower hereby agrees as follows:
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>ARTICLE I<BR>
DEFINITIONS</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.01 <U>Definition of Terms</U>. As used in this Agreement, including the Recitals to this
Agreement and the Loan Authorization Agreement, the following terms shall have the following
meanings:
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;Accounts Receivable&#148; shall mean all of Borrower&#146;s now owned or hereafter acquired
(a) &#147;accounts&#148; (as such term is defined in the UCC), other receivables, book debts and other forms
of obligations, whether arising out of goods sold or services rendered or from any other
transaction; (b)&nbsp;rights in, to and under all purchase orders or receipts for goods or services; (c)
rights to any goods represented or purported to be represented by any of the foregoing (including
unpaid sellers&#146; rights of rescission, replevin, reclamation and stoppage in transit and rights to
returned, reclaimed or repossessed goods); (d)&nbsp;moneys due or to become due to such Borrower under
all purchase orders and contracts (which includes Export Orders) for the sale of goods or the
performance of services or both by Borrower (whether or not yet earned by performance on the part
of Borrower), including the proceeds of the foregoing; (e)&nbsp;any notes, drafts, letters of credit,
insurance proceeds or other instruments, documents and writings evidencing or supporting the
foregoing; and (f)&nbsp;all collateral security and guarantees of any kind given by any other Person
with respect to any of the foregoing.
</DIV>

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<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;Accounts Receivable Aging Report&#148; shall mean a report detailing the Export-Related Accounts
Receivable and Export-Related Overseas Accounts Receivable for a Loan Facility, and the applicable
terms for the relevant time period; in the case of Indirect Exports, such report shall indicate the
portion of such Accounts Receivables corresponding to Indirect Exports.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;Advance Rate&#148; shall mean, with respect to a Loan Facility, the rate specified in Section&nbsp;5.C.
of the Loan Authorization Agreement for each category of Primary Collateral except for
Export-Related General Intangibles and Other Collateral. Unless otherwise set forth in writing by
Ex-Im Bank, in no event shall the Advance Rate exceed (i)&nbsp;ninety percent (90%) for Eligible
Export-Related Accounts Receivable, (ii)&nbsp;seventy five percent (75%) for Eligible Export-Related
Inventory, (iii)&nbsp;seventy percent (70%) for Eligible Export-Related Overseas Accounts Receivable or
(iv)&nbsp;sixty percent (60%) for Eligible Export-Related Overseas Inventory and (v)&nbsp;twenty five percent
(25%) for Retainage Accounts Receivable.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;Affiliated Foreign Person&#148; shall have the meaning set forth in Section&nbsp;2.15.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;Business Day&#148; shall mean any day on which the Federal Reserve Bank of New York is open for
business.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;Buyer&#148; shall mean a Person that has entered into one or more Export Orders with Borrower or
who is an obligor on Export-Related Accounts Receivable or Export-Related Overseas Accounts
Receivable.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;Capital Good&#148; shall mean a capital good (e.g., manufacturing equipment, licensing agreements)
that will establish or expand foreign production capacity of an exportable good.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;Collateral&#148; shall mean all real and personal property and interest in real and personal
property in or upon which Lender has been, or shall be, granted a Lien as security for the payment
of all the Loan Facility Obligations and all products and proceeds (cash and non-cash) thereof.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;Commercial Letters of Credit&#148; shall mean those letters of credit subject to the UCP payable
in Dollars and issued or caused to be issued by Lender on behalf of Borrower under a Loan Facility
for the benefit of a supplier(s) of Borrower in connection with Borrower&#146;s purchase of goods or
services from the supplier in support of the export of the Items.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;Country Limitation Schedule&#148; shall mean the schedule published from time to time by Ex-Im
Bank setting forth on a country by country basis whether and under what conditions Ex-Im Bank will
provide coverage for the financing of export transactions to countries listed therein.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;Credit Accommodation Amount&#148; shall mean, the sum of (a)&nbsp;the aggregate outstanding amount of
Disbursements and (b)&nbsp;the aggregate outstanding Letter of Credit Obligations, which sum may not
exceed the Maximum Amount.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;Credit Accommodations&#148; shall mean, collectively, Disbursements and Letter of Credit
Obligations.
</DIV>

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<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;Debarment Regulations&#148; shall mean, collectively, (a)&nbsp;the Governmentwide Debarment and
Suspension (Nonprocurement) regulations (Common Rule), 53 Fed. Reg. 19204 (May&nbsp;26, 1988), (b)
Subpart 9.4 (Debarment, Suspension, and Ineligibility) of the Federal Acquisition Regulations, 48
C.F.R. 9.400-9.409 and (c)&nbsp;the revised Governmentwide Debarment and Suspension (Nonprocurement)
regulations (Common Rule), 60 Fed. Reg. 33037 (June&nbsp;26, 1995).
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;Delegated Authority Letter Agreement&#148; shall mean the Delegated Authority Letter Agreement, if
any, between Ex-Im Bank and Lender.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;Disbursement&#148; shall mean, collectively, (a)&nbsp;an advance of a working capital loan from Lender
to Borrower under the Loan Facility, and (b)&nbsp;an advance to fund a drawing under a Letter of Credit
issued or caused to be issued by Lender for the account of Borrower under the Loan Facility.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;Dollars&#148; or &#147;$&#148; shall mean the lawful currency of the United States.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;Economic Impact Approval&#148; shall mean a written approval issued by Ex-Im Bank stating the
conditions under which a Capital Good may be included as an Item in a Loan Facility consistent with
Ex-Im Bank&#146;s economic impact procedures (or other mechanism for making this determination that
Ex-Im Bank notifies Lender of in writing).
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;Economic Impact Certification&#148; shall have the meaning set forth in Section&nbsp;2.14(b).
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;Effective Date&#148; shall mean the date on which (a)&nbsp;all of the Loan Documents have been executed
by Lender, Borrower and, if applicable, Ex-Im Bank and (b)&nbsp;all of the conditions to the making of
the initial Credit Accommodations under the Loan Documents or any amendments thereto have been
satisfied.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;Eligible Export-Related Accounts Receivable&#148; shall mean Export-Related Accounts Receivable
which are acceptable to Lender and which are deemed to be eligible pursuant to the Loan Documents,
but in no event shall Eligible Export-Related Accounts Receivable include any Account Receivable:
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;that does not arise from the sale of Items in the ordinary course of Borrower&#146;s business;
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;that is not subject to a valid, perfected first priority Lien in favor of Lender;
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)&nbsp;as to which any covenant, representation or warranty contained in the Loan Documents with
respect to such Account Receivable has been breached;
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d)&nbsp;that is not owned by Borrower or is subject to any right, claim or interest of another
Person other than the Lien in favor of Lender;
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e)&nbsp;with respect to which an invoice has not been sent;
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f)&nbsp;that arises from the sale of defense articles or defense services;
</DIV>

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<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(g)&nbsp;that arises from the sale of Items to be used in the construction, alteration, operation
or maintenance of nuclear power, enrichment, reprocessing, research or heavy water production
facilities unless with Ex-Im Bank&#146;s prior written consent;
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(h)&nbsp;that is due and payable from a Buyer located in a country with which Ex-Im Bank is
prohibited from doing business as designated in the Country Limitation Schedule;
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i)&nbsp;that does not comply with the requirements of the Country Limitation Schedule;
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(j)&nbsp;that is due and payable more than one hundred eighty (180)&nbsp;days from the date of the
invoice;
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(k)&nbsp;that is not paid within sixty (60)&nbsp;calendar days from its original due date, unless it is
insured through Ex-Im Bank export credit insurance for comprehensive commercial and political risk,
or through Ex-Im Bank approved private insurers for comparable coverage, in which case it is not
paid within ninety (90)&nbsp;calendar days from its due date;
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(l)&nbsp;of a Buyer for whom fifty percent (50%) or more of the Accounts Receivable of such Buyer
do not satisfy the requirements of subclauses (j)&nbsp;and (k)&nbsp;above;
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(m)&nbsp;that arises from a sale of goods to or performance of services for an employee of
Borrower, a stockholder of Borrower, a subsidiary of Borrower, a Person with a controlling interest
in Borrower or a Person which shares common controlling ownership with Borrower;
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(n)&nbsp;that is backed by a letter of credit unless the Items covered by the subject letter of
credit have been shipped;
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(o)&nbsp;that Lender or Ex-Im Bank, in its reasonable judgment, deems uncollectible for any reason;
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(p)&nbsp;that is due and payable in a currency other than Dollars, except as may be approved in
writing by Ex-Im Bank;
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(q)&nbsp;that is due and payable from a military Buyer, except as may be approved in writing by
Ex-Im Bank;
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(r)&nbsp;that does not comply with the terms of sale set forth in Section&nbsp;7 of the Loan
Authorization Agreement;
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(s)&nbsp;that is due and payable from a Buyer who (i)&nbsp;applies for, suffers, or consents to the
appointment of, or the taking of possession by, a receiver, custodian, trustee or liquidator of
itself or of all or a substantial part of its property or calls a meeting of its creditors, (ii)
admits in writing its inability, or is generally unable, to pay its debts as they become due or
ceases operations of its present business, (iii)&nbsp;makes a general assignment for the benefit of
creditors, (iv)&nbsp;commences a voluntary case under any state or federal bankruptcy laws (as now or
hereafter in effect), (v)&nbsp;is adjudicated as bankrupt or insolvent, (vi)&nbsp;files a petition seeking to
take advantage of any other law providing for the relief of debtors, (vii)&nbsp;acquiesces to, or fails
to have
</DIV>

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<DIV align="left" style="font-size: 10pt; margin-top: 6pt">dismissed, any petition which is filed against it in any involuntary case under such
bankruptcy laws, or (viii)&nbsp;takes any action for the purpose of effecting any of the foregoing;
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(t)&nbsp;that arises from a bill-and-hold, guaranteed sale, sale-and-return, sale on approval,
consignment or any other repurchase or return basis or is evidenced by chattel paper;
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(u)&nbsp;for which the Items giving rise to such Accounts Receivable have not been shipped to the
Buyer or when the Items are services, such services have not been performed or when the Export
Order specifies a timing for invoicing the Items other than shipment or performance and the Items
have not been invoiced in accordance with such terms of the Export Order, or the Accounts
Receivable otherwise do not represent a final sale;
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(v)&nbsp;that is subject to any offset, deduction, defense, dispute, or counterclaim or the Buyer
is also a creditor or supplier of Borrower or the Account Receivable is contingent in any respect
or for any reason;
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(w)&nbsp;for which Borrower has made any agreement with the Buyer for any deduction therefrom,
except for discounts or allowances made in the ordinary course of business for prompt payment, all
of which discounts or allowances are reflected in the calculation of the face value of each
respective invoice related thereto;
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(x)&nbsp;for which any of the Items giving rise to such Account Receivable have been returned,
rejected or repossessed;
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(y)&nbsp;that is included as an eligible receivable under any other credit facility to which
Borrower is a party;
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(z)&nbsp;any of the Items giving rise to such Accounts Receivable are Capital Goods, unless the
transaction is in accordance with Section&nbsp;2.14;
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(aa)&nbsp;that is due and payable from a Buyer that is, or is located in, the United States;
provided however, that this subsection (aa)&nbsp;shall not preclude an Export-Related Accounts
Receivable arising from the sale of Items to foreign contractors or subcontractors providing
services to a United States Embassy or the United States Military located overseas from being
deemed an Eligible Export-Related Accounts Receivable; or
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(bb)&nbsp;that arises from the sale of Items that do not meet the U.S. Content requirements in
accordance with Section&nbsp;2.01(b)(ii).
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;Eligible Export-Related Inventory&#148; shall mean Export-Related Inventory which is acceptable to
Lender and which is deemed to be eligible pursuant to the Loan Documents, but in no event shall
Eligible Export-Related Inventory include any Inventory:
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;that is not subject to a valid, perfected first priority Lien in favor of Lender;
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;that is located at an address that has not been disclosed to Lender in writing;
</DIV>

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<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)&nbsp;that is placed by Borrower on consignment or held by Borrower on consignment from another
Person;
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d)&nbsp;that is in the possession of a processor or bailee, or located on premises leased or
subleased to Borrower, or on premises subject to a mortgage in favor of a Person other than Lender,
unless such processor or bailee or mortgagee or the lessor or sublessor of such premises, as the
case may be, has executed and delivered all documentation which Lender shall require to evidence
the subordination or other limitation or extinguishment of such Person&#146;s rights with respect to
such Inventory and Lender&#146;s right to gain access thereto;
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e)&nbsp;that is produced in violation of the Fair Labor Standards Act or subject to the &#147;hot
goods&#148; provisions contained in 29 U.S.C.&#167;215 or any successor statute or section;
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f)&nbsp;as to which any covenant, representation or warranty with respect to such Inventory
contained in the Loan Documents has been breached;
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(g)&nbsp;that is not located in the United States unless expressly permitted by Lender, on terms
acceptable to Lender;
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(h)&nbsp;that is an Item or is to be incorporated into Items that do not meet U.S. Content
requirements in accordance with Section&nbsp;2.01(b)(ii);
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i)&nbsp;that is demonstration Inventory;
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(j)&nbsp;that consists of proprietary software (i.e. software designed solely for Borrower&#146;s
internal use and not intended for resale);
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(k)&nbsp;that is damaged, obsolete, returned, defective, recalled or unfit for further processing;
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(l)&nbsp;that has been previously exported from the United States;
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(m)&nbsp;that constitutes, or will be incorporated into Items that constitute, defense articles or
defense services;
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(n)&nbsp;that is an Item or will be incorporated into Items that will be used in the construction,
alteration, operation or maintenance of nuclear power, enrichment, reprocessing, research or heavy
water production facilities unless with Ex-Im Bank&#146;s prior written consent;
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(o)&nbsp;that is an Item or is to be incorporated into Items destined for shipment to a country as
to which Ex-Im Bank is prohibited from doing business as designated in the Country Limitation
Schedule;
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(p)&nbsp;that is an Item or is to be incorporated into Items destined for shipment to a Buyer
located in a country in which Ex-Im Bank coverage is not available for commercial reasons as
designated in the Country Limitation Schedule, unless and only to the extent that such Items are to
be sold to such country on terms of a letter of credit confirmed by a bank acceptable to Ex-Im
Bank;
</DIV>

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<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(q)&nbsp;that constitutes, or is to be incorporated into, Items whose sale would result in an
Accounts Receivable which would not be an Eligible Export-Related Accounts Receivable;
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(r)&nbsp;that is included as eligible inventory under any other credit facility to which Borrower
is a party; or
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(s)&nbsp;that is, or is to be incorporated into, an Item that is a Capital Good, unless the
transaction is in accordance with Section&nbsp;2.14.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;Eligible Export-Related Overseas Accounts Receivable&#148; shall mean Export-Related Overseas
Accounts Receivable which are acceptable to Lender and which are deemed to be eligible pursuant to
the Loan Documents but in no event shall include the Accounts Receivable (a)&nbsp;through (bb)&nbsp;excluded
from the definition of Eligible Export-Related Accounts Receivable.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;Eligible Export-Related Overseas Inventory&#148; shall mean Export-Related Overseas Inventory
which is acceptable to Lender and which is deemed to be eligible pursuant to the Loan Documents,
but in no event shall include the Inventory (a)&nbsp;through (r)&nbsp;excluded from the definition of
Eligible Export-Related Inventory.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;Eligible Person&#148; shall mean a sole proprietorship, partnership, limited liability
partnership, corporation or limited liability company which (a)&nbsp;is domiciled, organized or formed,
as the case may be, in the United States, whether or not such entity is owned by a foreign national
or foreign entity; (b)&nbsp;is in good standing in the state of its formation or otherwise authorized to
conduct business in the United States; (c)&nbsp;is not currently suspended or debarred from doing
business with the United States government or any instrumentality, division, agency or department
thereof; (d)&nbsp;exports or plans to export Items; (e)&nbsp;operates and has operated as a going concern for
at least one (1)&nbsp;year; (f)&nbsp;has a positive tangible net worth determined in accordance with GAAP;
and (g)&nbsp;has revenue generating operations relating to its core business activities for at least one
year. An Affiliated Foreign Person that meets all of the requirements of the foregoing definition
of Eligible Person other than subclause (a)&nbsp;thereof shall be deemed to be an Eligible Person
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;ERISA&#148; shall mean the Employee Retirement Income Security Act of 1974 and the rules and
regulations promulgated thereunder.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;Export Order&#148; shall mean a documented purchase order or contract evidencing a Buyer&#146;s
agreement to purchase the Items from Borrower for export from the United States, which
documentation shall include written information that is necessary to confirm such purchase order or
contract, including identification of the Items, the name of the Buyer, the country of destination,
contact information for the Buyer and the total amount of the purchase order or contract; in the
case of Indirect Exports, such documentation shall further include a copy of the written purchase
order or contract from a foreign purchaser or other documentation clearly evidencing a foreign
purchaser&#146;s agreement to purchase the Items.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;Export-Related Accounts Receivable&#148; shall mean those Accounts Receivable arising from the
sale of Items which are due and payable to Borrower in the United States.
</DIV>

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<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;Export-Related Accounts Receivable Value&#148; shall mean, at the date of determination thereof,
the aggregate face amount of Eligible Export-Related Accounts Receivable less taxes, discounts,
credits, allowances and Retainages, except to the extent otherwise permitted by Ex-Im Bank in
writing.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;Export-Related Borrowing Base&#148; shall mean, at the date of determination thereof, the sum of
(a) (if Lender elects to include) the Export-Related Inventory Value or Export-Related Historical
Inventory Value multiplied by the Advance Rate applicable to Eligible Export-Related Inventory set
forth in Section&nbsp;5.B.(1.) of the Loan Authorization Agreement, plus (b)&nbsp;the Export-Related Accounts
Receivable Value multiplied by the Advance Rate applicable to Eligible Export-Related Accounts
Receivable set forth in Section&nbsp;5.B.(2.) of the Loan Authorization Agreement, plus (c)&nbsp;if permitted
by Ex-Im Bank in writing, the Retainage Value multiplied by the Advance Rate applicable to
Retainages set forth in Section&nbsp;5.B.(3.) of the Loan Authorization Agreement, plus (d)&nbsp;the Other
Assets set forth in Section&nbsp;5.B.(4.) of the Loan Authorization Agreement multiplied by the Advance
Rate agreed to in writing by Ex-Im Bank, plus (e)&nbsp;if permitted by Ex-Im Bank in writing, the
Export-Related Overseas Accounts Receivable Value multiplied by the Advance Rate applicable to
Eligible Export-Related Overseas Accounts Receivable set forth in Section&nbsp;5.B.(5.) of the Loan
Authorization Agreement, plus (f)&nbsp;if permitted by Ex-Im Bank in writing, the Export-Related
Overseas Inventory Value multiplied by the Advance Rate applicable to Eligible Export-Related
Overseas Inventory set forth in Section&nbsp;5.B.(6.) of the Loan Authorization Agreement, less (g)&nbsp;the
amounts required to be reserved pursuant to Sections&nbsp;4.12 and 4.13 of this Agreement for each
outstanding Letter of Credit, less (h)&nbsp;such reserves and in such amounts deemed necessary and
proper by Lender from time to time.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;Export-Related Borrowing Base Certificate&#148; shall mean a certificate in the form provided or
approved by Lender, executed by Borrower and delivered to Lender pursuant to the Loan Documents
detailing the Export-Related Borrowing Base supporting the Credit Accommodations which reflects, to
the extent included in the Export-Related Borrowing Base, Export-Related Accounts Receivable,
Eligible Export-Related Accounts Receivable, Export-Related Inventory, Eligible Export-Related
Inventory, Export-Related Overseas Accounts Receivable, Eligible Export-Related Accounts
Receivable, Export-Related Overseas Inventory and Eligible Export-Related Overseas Inventory
balances that have been reconciled with Borrower&#146;s general ledger, Accounts Receivable Aging Report
and Inventory schedule.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;Export-Related General Intangibles&#148; shall mean the Pro Rata Percentage of General Intangibles
determined as of the earlier of: (i)&nbsp;the date such General Intangibles are liquidated and (ii)&nbsp;the
date Borrower fails to pay when due any outstanding amount of principal or accrued interest payable
under the Loan Documents that becomes the basis for a Payment Default on which a Claim is filed.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;Export-Related Historical Inventory Value&#148; shall mean with respect to a Borrower, the
relevant Export-Related Sales Ratio multiplied by the lowest of (i)&nbsp;the cost of such Borrower&#146;s
Inventory as determined in accordance with GAAP, or (ii)&nbsp;the market value of such Borrower&#146;s
Inventory as determined in accordance with GAAP or (iii)&nbsp;the appraised or orderly liquidation value
of such Borrower&#146;s Inventory, if Lender has loans and financial accommodations to such Borrower for
which it conducts (or contracts for the performance of) such an appraised or orderly liquidation
value.
</DIV>

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<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;Export-Related Inventory&#148; shall mean the Inventory of Borrower located in the United States
that has been purchased, manufactured or otherwise acquired by Borrower for sale or resale as
Items, or to be incorporated into Items to be sold or resold pursuant to Export Orders.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;Export-Related Inventory Value&#148; shall mean, at the date of determination thereof, the lowest
of (i)&nbsp;the cost of Eligible Exported-Related Inventory as determined in accordance with GAAP, or
(ii)&nbsp;the market value of Eligible Export-Related Inventory as determined in accordance with GAAP or
(iii)&nbsp;the lower of the appraised market value or orderly liquidation value of the Eligible
Export-Related Inventory, if Lender has other loans and financial accommodations to a Borrower for
which it conducts (or contracts for the performance of) such an appraised or orderly liquidation
value.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;Export-Related Overseas Accounts Receivable&#148; shall mean those Accounts Receivable arising
from the sale of Items which are due and payable outside of the United States either to a Borrower
or an Affiliated Foreign Person.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;Export-Related Overseas Accounts Receivable Value&#148; shall mean, with respect to a Loan
Facility, at the date of determination thereof, the aggregate face amount of Eligible
Export-Related Overseas Accounts Receivable less taxes, discounts, credits, allowances and
Retainages, except to the extent otherwise permitted by Ex-Im Bank in writing.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;Export-Related Overseas Inventory&#148; shall mean the Inventory of Borrower located outside of
the United States that has been purchased, manufactured or otherwise acquired by such Borrower for
sale or resale as Items, or to be incorporated into Items to be sold or resold pursuant to Export
Orders.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;Export-Related Overseas Inventory Value&#148; shall mean, at the date of determination thereof,
the lowest of (i)&nbsp;the cost of Eligible Export-Related Overseas Inventory as determined in
accordance with GAAP, (ii)&nbsp;the market value of Eligible Export-Related Overseas Inventory as
determined in accordance with GAAP or (iii)&nbsp;the appraised or orderly liquidation value of the
Eligible Export-Related Overseas Inventory, if Lender has other loans and financial accommodations
to Borrower or an Affiliated Foreign Person for which it conducts (or contracts for the performance
of) such a appraised or orderly liquidation.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;Export-Related Sales Ratio&#148; shall mean with respect to a Borrower, the percentage of such
Borrower&#146;s total sales revenue derived from the sale of Eligible Export-Related Inventory over a
rolling twelve-month period ending no more than ninety (90)&nbsp;days prior to the date of the relevant
Export-Related Borrowing Base Certificate
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;Extension&#148; shall mean, with respect to a Loan Facility, an amendment to the Loan
Authorization Agreement extending the Final Disbursement Date on the same terms and conditions as
the Loan Facility for an aggregate period not to exceed one hundred and twenty (120)&nbsp;days beyond
the original Final Disbursement Date, either as agreed to in writing by Ex-Im Bank or, in the case
of Delegated Authority, as notified by Lender to Ex-Im Bank pursuant to its authority under the
Delegated Authority Letter Agreement.
</DIV>

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<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;Fast Track Lender Agreement&#148; shall mean the Fast Track Lender Agreement, if any, between
Ex-Im Bank and Lender.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;Final Disbursement Date&#148; shall mean the last date on which Lender may make a Disbursement set
forth in Section&nbsp;10 of the Loan Authorization Agreement (including as amended by an Extension) or,
if such date is not a Business Day, the next succeeding Business Day; <U>provided</U>,
<U>however</U>, to the extent that Lender has not received cash collateral in the amount of the
Letter of Credit Obligations or an equivalent full indemnity from Borrower or Guarantor, as
applicable, with respect to Letter of Credit Obligations outstanding on the Final Disbursement
Date, the Final Disbursement Date with respect to an advance to fund a drawing under such Letter of
Credit shall be no later than thirty (30)&nbsp;days after any such drawing which may be no later than
the expiry date of the Letter of Credit related thereto.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;GAAP&#148; shall mean the generally accepted accounting principles issued in the United States.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;General Intangibles&#148; shall mean all intellectual property and other &#147;general intangibles&#148; (as
such term is defined in the UCC).
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;Guarantor&#148; shall mean any Person which is identified in Section&nbsp;3 of the Loan Authorization
Agreement who shall guarantee (jointly and severally if more than one) the payment and performance
of all or a portion of the Loan Facility Obligations.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;Guarantee Agreement&#148; shall mean a valid and enforceable agreement of guarantee executed by
each Guarantor in favor of Lender.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;Indirect Exports&#148; shall mean finished goods or services that are sold by a Borrower to a
Buyer located in the United States, are intended for export from the United States, and are
identified in Section&nbsp;4.A.(2.) of the Loan Authorization Agreement.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;Inventory&#148; shall mean all &#147;inventory&#148; (as such term is defined in the UCC), now or hereafter
owned or acquired by Borrower, wherever located, including all inventory, merchandise, goods and
other personal property which are held by or on behalf of Borrower for sale or lease or are
furnished or are to be furnished under a contract of service or which constitute raw materials,
work in process or materials used or consumed or to be used or consumed in Borrower&#146;s business or
in the processing, production, packaging, promotion, delivery or shipping of the same, including
other supplies.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;ISP&#148; shall mean the International Standby Practices-ISP98, International Chamber of Commerce
Publication No.&nbsp;590 and any amendments and revisions thereof.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;Issuing Bank&#148; shall mean the bank that issues a Letter of Credit, which bank is Lender itself
or a bank that Lender has caused to issue a Letter of Credit by way of a guarantee or reimbursement
obligation.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;Items&#148; shall mean the finished goods or services which are intended for export from the
United States, either directly or as an Indirect Export, meet the U.S. Content requirements in
</DIV>

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<DIV align="left" style="font-size: 10pt; margin-top: 6pt">accordance with Section&nbsp;2.01(b)(ii) of this Agreement and are specified in Section&nbsp;4.A. of the
Loan Authorization Agreement.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;Letter of Credit&#148; shall mean a Commercial Letter of Credit or a Standby Letter of Credit.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;Letter of Credit Obligations&#148; shall mean all undrawn amounts of outstanding obligations
incurred by Lender, whether direct or indirect, contingent or otherwise, due or not due, in
connection with the issuance or guarantee by Lender or Issuing Bank of Letters of Credit.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;Lien&#148; shall mean any mortgage, security deed or deed of trust, pledge, hypothecation,
assignment, deposit arrangement, lien, charge, claim, security interest, security title, easement
or encumbrance, or preference, priority or other security agreement or preferential arrangement of
any kind or nature whatsoever (including any lease or title retention agreement, any financing
lease having substantially the same economic effect as any of the foregoing, and the filing of, or
agreement to give, any financing statement perfecting a security interest under the UCC or
comparable law of any jurisdiction) by which property is encumbered or otherwise charged.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;Loan Agreement&#148; shall mean a valid and enforceable agreement between Lender and a Borrower
setting forth, with respect to each Loan Facility, the terms and conditions of such Loan Facility.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;Loan Authorization Agreement&#148; shall mean, as applicable, the duly executed Loan Authorization
Agreement, Fast Track Loan Authorization Agreement, or the Loan Authorization Notice, setting forth
certain terms and conditions of each Loan Facility, a copy of which is attached hereto as Annex A.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;Loan Authorization Notice&#148; shall mean the Loan Authorization Notice executed by Lender and
delivered to Ex-Im Bank in accordance with the Delegated Authority Letter Agreement setting forth
the terms and conditions of each Loan Facility.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;Loan Documents&#148; shall mean the Loan Authorization Agreement, the Loan Agreement, this
Agreement, each promissory note (if applicable), each Guarantee Agreement, and all other
instruments, agreements and documents now or hereafter executed by the applicable Borrower, any
Guarantor, Lender or Ex-Im Bank evidencing, securing, guaranteeing or otherwise relating to the
Loan Facility or any Credit Accommodations made thereunder.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;Loan Facility&#148; shall mean the Revolving Loan Facility, the Transaction Specific Loan Facility
or the Transaction Specific Revolving Loan Facility established by Lender in favor of Borrower
under the Loan Documents.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;Loan Facility Obligations&#148; shall mean all loans, advances, debts, expenses, fees,
liabilities, and obligations, including any accrued interest thereon, for the performance of
covenants, tasks or duties or for payment of monetary amounts (whether or not such performance is
then required or contingent, or amounts are liquidated or determinable) owing by Borrower to
Lender, of any kind or nature, present or future, arising in connection with the Loan Facility.
</DIV>

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<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;Loan Facility Term&#148; shall mean, with respect to a Loan Facility, the number of months or
portion thereof from the Effective Date to the Final Disbursement Date as set forth in the Loan
Authorization Agreement as amended.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;Master Guarantee Agreement&#148; shall mean the Master Guarantee Agreement between Ex-Im Bank and
Lender, as amended, modified, supplemented and restated from time to time.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;Material Adverse Effect&#148; shall mean a material adverse effect on (a)&nbsp;the business, assets,
operations, prospects or financial or other condition of Borrower or any Guarantor, (b)&nbsp;any
Borrower&#146;s ability to pay or perform the Loan Facility Obligations in accordance with the terms
thereof, (c)&nbsp;the Collateral or Lender&#146;s Liens on the Collateral or the priority of such Lien, or
(d)&nbsp;Lender&#146;s rights and remedies under the Loan Documents.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;Maximum Amount&#148; shall mean the maximum Credit Accommodation Amount that may be outstanding at
any time under each Loan Facility, as specified in Section&nbsp;5.A. of the Loan Authorization
Agreement.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;Other Assets&#148; shall mean, with respect to a Loan Facility, such other assets of a Borrower to
be included in Primary Collateral, which may include cash and marketable securities, or such other
assets as Ex-Im Bank agrees to in writing, and disclosed as Primary Collateral in Section&nbsp;6.A. of
the Loan Authorization Agreement. The applicable Advance Rate (to be multiplied by the Other Asset
Value) shall be as agreed to by Ex-Im Bank in writing case by case by case and set forth in Section
5.B.(4) of the Loan Authorization Agreement.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;Other Asset Value&#148; shall mean, with respect to a Loan Facility, at the date of determination
thereof, the value of the Other Assets as determined in accordance with GAAP.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;Other Collateral&#148; shall mean any additional collateral that Lender customarily would require
as security for loan facilities on its own account and risk where the permitted borrowing level is
based principally on a borrowing base derived from a borrower&#146;s inventory and accounts receivable,
but where such additional collateral does not enter into the borrowing base calculation.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;Permitted Liens&#148; shall mean (a)&nbsp;Liens for taxes, assessments or other governmental charges or
levies not delinquent, or, being contested in good faith and by appropriate proceedings and with
respect to which proper reserves have been taken by Borrower; <U>provided</U>, <U>that</U>, the
Lien shall have no effect on the priority of the Liens in favor of Lender or the value of the
assets in which Lender has such a Lien and a stay of enforcement of any such Lien shall be in
effect; (b)&nbsp;deposits or pledges securing obligations under worker&#146;s compensation, unemployment
insurance, social security or public liability laws or similar legislation; (c)&nbsp;deposits or pledges
securing bids, tenders, contracts (other than contracts for the payment of money), leases,
statutory obligations, surety and appeal bonds and other obligations of like nature arising in the
ordinary course of Borrower&#146;s business; (d)&nbsp;judgment Liens that have been stayed or bonded; (e)
mechanics&#146;, workers&#146;, materialmen&#146;s or other like Liens arising in the ordinary course of
Borrower&#146;s business with respect to obligations which are not due; (f)&nbsp;Liens placed upon fixed
assets hereafter acquired to secure a portion of the purchase price thereof, provided, that, any
such Lien shall not encumber any other property of Borrower; (g)&nbsp;security interests being
terminated concurrently with the execution of the Loan Documents; and (h)&nbsp;Liens disclosed in
Section&nbsp;6.D. of the Loan
</DIV>

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<DIV style="font-family: Helvetica,Arial,sans-serif">



<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Authorization Agreement, <U>provided that</U>, except as otherwise permitted by Ex-Im Bank in
writing, such Liens in Section&nbsp;6.D. shall be subordinate to the Liens in favor of Lender on Primary
Collateral.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;Person&#148; shall mean any individual, sole proprietorship, partnership, limited liability
partnership, joint venture, trust, unincorporated organization, association, corporation, limited
liability company, institution, public benefit corporation, entity or government (whether national,
federal, provincial, state, county, city, municipal or otherwise, including any instrumentality,
division, agency, body or department thereof), and shall include such Person&#146;s successors and
assigns.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;Pro Rata Percentage&#148; shall mean, with respect to a Loan Facility, as of the date of
determination thereof, the principal balance of the Credit Accommodations outstanding as a
percentage of the combined principal balance of all loans from Lender to such Borrower including
the then outstanding principal balance of the Credit Accommodations plus unfunded amounts under
outstanding Letters of Credit.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;Principals&#148; shall mean any officer, director, owner, partner, key employee, or other Person
with primary management or supervisory responsibilities with respect to Borrower or any other
Person (whether or not an employee) who has critical influence on or substantive control over the
transactions covered by this Agreement.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;Retainage&#148; shall mean that portion of the purchase price of an Export Order that a Buyer is
not obligated to pay until the end of a specified period of time following the satisfactory
performance under such Export Order.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;Retainage Accounts Receivable&#148; shall mean those portions of Eligible Export-Related Accounts
Receivable or Eligible Export-Related Overseas Accounts Receivable arising out of a Retainage.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;Retainage Value&#148; shall mean, at the date of determination thereof, the aggregate face amount
of Retainage Accounts Receivable as permitted by Ex-Im Bank in writing, less taxes, discounts,
credits and allowances, except to the extent otherwise permitted by Ex-Im Bank in writing.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;Revolving Loan Facility&#148; shall mean the credit facility or portion thereof established by
Lender in favor of Borrower for the purpose of providing working capital in the form of loans
and/or Letters of Credit to finance the manufacture, production or purchase and subsequent export
sale of Items pursuant to Loan Documents under which Credit Accommodations may be made and repaid
on a continuous basis based solely on credit availability on the Export-Related Borrowing Base
during the term of such credit facility
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;Special Conditions&#148; shall mean those conditions, if any, set forth in Section&nbsp;13 of the Loan
Authorization Agreement.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;Specific Export Orders&#148; shall mean those Export Orders specified in Section&nbsp;5.D. of the Loan
Authorization Agreement as applicable for a Transaction Specific Revolving Loan Facility or a
Transaction Specific Loan Facility.
</DIV>

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<DIV style="font-family: Helvetica,Arial,sans-serif">

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;Standby Letters of Credit&#148; shall mean those letters of credit subject to the ISP or UCP
issued or caused to be issued by Lender for Borrower&#146;s account that can be drawn upon by a Buyer
only if Borrower fails to perform all of its obligations with respect to an Export Order.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;Transaction Specific Loan Facility&#148; shall mean a credit facility or a portion thereof
established by Lender in favor of Borrower for the purpose of providing working capital in the form
of loans and/or Letters of Credit to finance the manufacture, production or purchase and subsequent
export sale of Items pursuant to Loan Documents under which Credit Accommodations are made based
solely on credit availability on the Export-Related Borrowing Base relating to Specific Export
Orders and once such Credit Accommodations are repaid they may not be reborrowed.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;Transaction Specific Revolving Loan Facility&#148; shall mean a Revolving Credit Facility
established to provide financing of Specific Export Orders.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;UCC&#148; shall mean the Uniform Commercial Code, as the same may be in effect from time to time
in the relevant United States jurisdiction.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;UCP&#148; shall mean the Uniform Customs and Practice for Documentary Credits (1993 Revision),
International Chamber of Commerce Publication No.&nbsp;500 and any amendments and revisions thereof.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;U.S.&#148; or &#147;United States&#148; shall mean the United States of America including any division or
agency thereof (including United States embassies or United States military bases located
overseas), and any United States Territory (including without limitation, Puerto Rico, Guam or the
United States Virgin Islands).
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;U.S. Content&#148; shall mean, with respect to any Item, all the costs, including labor,
materials, services and overhead, but not markup or profit margin, which are of U.S. origin or
manufacture, and which are incorporated into an Item in the United States.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;Warranty&#148; shall mean Borrower&#146;s guarantee to Buyer that the Items will function as intended
during the warranty period set forth in the applicable Export Order.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;Warranty Letter of Credit&#148; shall mean a Standby Letter of Credit which is issued or caused to
be issued by Lender to support the obligations of Borrower with respect to a Warranty or a Standby
Letter of Credit which by its terms becomes a Warranty Letter of Credit.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.02 <U>Rules of Construction</U>. For purposes of this Agreement, the following additional
rules of construction shall apply, unless specifically indicated to the contrary: (a)&nbsp;wherever from
the context it appears appropriate, each term stated in either the singular or plural shall include
the singular and the plural, and pronouns stated in the masculine, feminine or neuter gender shall
include the masculine, the feminine and the neuter; (b)&nbsp;the term &#147;or&#148; is not exclusive; (c)&nbsp;the
term &#147;including&#148; (or any form thereof) shall not be limiting or exclusive; (d)&nbsp;all references to
statutes and related regulations shall include any amendments of same and any successor statutes
and regulations; (e)&nbsp;the words &#147;this Agreement&#148;, &#147;herein&#148;, &#147;hereof&#148;, &#147;hereunder&#148; or other words of
similar import refer to this Agreement as a
whole including the schedules, exhibits, and annexes
</DIV>

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<DIV align="left" style="font-size: 10pt; margin-top: 6pt">hereto as the same may be amended,
modified or supplemented; (f)&nbsp;all references in this Agreement to sections, schedules, exhibits,
and annexes shall refer to the corresponding sections, schedules, exhibits, and annexes
of or to
this Agreement; and (g)&nbsp;all references to any instruments or agreements, including references to
any of the Loan Documents, the Delegated Authority Letter Agreement, or the Fast Track Lender
Agreement shall include any and all modifications, amendments and supplements thereto and any and
all extensions or renewals thereof to the extent permitted under this Agreement.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.03 <U>Incorporation of Recitals</U>. The Recitals to this Agreement are incorporated into
and shall constitute a part of this Agreement.
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>ARTICLE II<BR>
OBLIGATIONS OF BORROWER</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Until payment in full of all Loan Facility Obligations and termination of the Loan Documents,
Borrower agrees as follows:
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.01 <U>Use of Credit Accommodations</U>. (a)&nbsp;Borrower shall use Credit Accommodations only
for the purpose of enabling Borrower to finance the cost of manufacturing, producing, purchasing or
selling the Items. Borrower may not use any of the Credit Accommodations for the purpose of: (i)
servicing or repaying any of Borrower&#146;s pre-existing or future indebtedness unrelated to the Loan
Facility unless approved by Ex-Im Bank in writing; (ii)&nbsp;acquiring fixed assets or capital assets
for use in Borrower&#146;s business; (iii)&nbsp;acquiring, equipping or renting commercial space outside of
the United States; (iv)&nbsp;paying the salaries of non U.S. citizens or non-U.S. permanent residents
who are located in offices outside of the United States; or (v)&nbsp;in connection with a Retainage or
Warranty unless approved by Ex-Im Bank in writing.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;In addition, no Credit Accommodation may be used to finance the manufacture, purchase or
sale of any of the following:
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i)&nbsp;Items to be sold to a Buyer located in a country as to which Ex-Im Bank is prohibited from
doing business as designated in the Country Limitation Schedule;
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii)&nbsp;that part of the cost of the Items which is not U.S. Content unless such part is not
greater than fifty percent (50%) of the cost of the Items and is incorporated into the Items in the
United States;
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii)&nbsp;defense articles or defense services;
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iv)&nbsp;Capital Goods unless in accordance with Section&nbsp;2.14 of this Agreement; or
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(v)&nbsp;without Ex-Im Bank&#146;s prior written consent, any Items to be used in the construction,
alteration, operation or maintenance of nuclear power, enrichment, reprocessing, research or heavy
water production facilities.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.02 <U>Security Interests</U>. Borrower agrees to cooperate with Lender in any steps Lender
shall take to file and maintain valid, enforceable and perfected security interests in the
Collateral.
</DIV>

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<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.03 <U>Loan Documents and Loan Authorization Agreement</U>. (a)&nbsp;This Agreement and each of
the other Loan Documents applicable to Borrower have been duly executed and delivered on behalf of
Borrower, and are and will continue to be legal and valid obligations of Borrower, enforceable
against it in accordance with its terms.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;Borrower shall comply with all of the terms and conditions of this Agreement, the Loan
Authorization Agreement and each of the other Loan Documents to which it is a party.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)&nbsp;Borrower hereby represents and warrants to Lender that Borrower is an Eligible Person.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.04 <U>Export-Related Borrowing Base Certificates and Export Orders</U>. (a)&nbsp;In order to
receive Credit Accommodations under the Loan Facility, Borrower shall have delivered to Lender an
Export-Related Borrowing Base Certificate as frequently as required by Lender but at least within
the past month, together with a copy of the Export Order(s) or, for Revolving Loan Facilities, if
permitted by Lender, a written summary of the Export Orders (when Eligible Export-Related Inventory
and Eligible Overseas Export-Related Inventory are entering the Export-Related Borrowing Base)
against which Borrower is requesting Credit Accommodations. In addition, so long as there are any
Credit Accommodations outstanding under the Loan Facility, Borrower shall deliver to Lender an
Export-Related Borrowing Base Certificate at least once each month. Lender shall determine if
daily electronic reporting reconciled monthly may substitute for monthly Export-Related Borrowing
Base Certificates. If the Lender requires an Export-Related Borrowing Base Certificate more
frequently, Borrower shall deliver such Export-Related Borrowing Base Certificate as required by
Lender.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;If Lender permits summaries of Export Orders, Borrower shall also deliver promptly to
Lender copies of any Export Orders requested by Lender.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.05 <U>Schedules, Reports and Other Statements</U>. With the delivery of each
Export-Related Borrowing Base Certificate required in Section&nbsp;2.04 above, Borrower shall submit to
Lender in writing (a)&nbsp;an Inventory schedule for the preceding month, as applicable, and (b)&nbsp;an
Accounts Receivable Aging Report for the preceding month. Borrower shall also furnish to Lender
promptly upon request such information, reports, contracts, invoices and other data concerning the
Collateral as Lender may from time to time specify.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.06 <U>Exclusions from the Export-Related Borrowing Base</U>. In determining the
Export-Related Borrowing Base, Borrower shall exclude therefrom Inventory which are not Eligible
Export-Related Inventory or Eligible Export-Related Overseas Inventory and Accounts Receivable
which are not Eligible Export-Related Accounts Receivable or Eligible Export-Related Overseas
Accounts Receivable. Borrower shall promptly, but in any event within five (5)&nbsp;Business Days,
notify Lender (a)&nbsp;if any then existing Export-Related Inventory or Export-Related Overseas
Inventory no longer constitutes Eligible Export-Related Inventory or Eligible Export-Related
Overseas Inventory, as applicable or (b)&nbsp;of any event or circumstance which to Borrower&#146;s knowledge
would cause Lender to consider any then existing Export-Related Accounts Receivable or
Export-Related Overseas Accounts Receivable as no longer constituting an Eligible Export-Related
Accounts Receivable or Eligible Export-Related Overseas Accounts Receivable, as applicable.
</DIV>

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<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.07 <U>Borrowings and Reborrowings</U>. (a)&nbsp;If the Loan Facility is a Revolving Loan
Facility or Transaction Specific Revolving Loan Facility, <U>provided that</U> Borrower is not in
default under any of the Loan Documents, Borrower may borrow, repay and reborrow amounts under such
Loan Facility up to the credit available on the current Export-Related Borrowing Base Certificate
subject to the terms of this Agreement and each of the other Loan Documents until the close of
business on the Final Disbursement Date.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;If the Loan Facility is a Transaction Specific Loan Facility, <U>provided that</U>
Borrower is not in default under any of the Loan Documents, Borrower may borrow (but not reborrow)
amounts under the Loan Facility up to the credit available on the current Export-Related Borrowing
Base Certificate subject to the terms of this Agreement and each of the other Loan Documents until
the close of business on the Final Disbursement Date.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.08 <U>Repayment Terms</U>. (a)&nbsp;The Borrower on a Revolving Loan Facility shall pay in
full the outstanding Loan Facility Obligations no later than the first Business Day after the Final
Disbursement Date unless such Loan Facility is renewed or extended by Lender consistent with
procedures required by Ex-Im Bank.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;The Borrower on a Transaction Specific Loan Facility and a Transaction Specific Revolving
Loan Facility shall, within two (2)&nbsp;Business Days of the receipt thereof, pay to Lender (for
application against the outstanding Loan Facility Obligations) all checks, drafts, cash and other
remittances it may receive in payment or on account of the Export-Related Accounts Receivable,
Export-Related Overseas Accounts Receivable or any other Collateral, in precisely the form received
(except for the endorsement of Borrower where necessary). Pending such deposit, Borrower shall
hold such amounts in trust for Lender separate and apart and shall not commingle any such items of
payment with any of its other funds or property. Unless a Transaction Specific Loan Facility or
Transaction Specific Revolving Loan Facility is renewed or extended by Lender consistent with
procedures required by Ex-Im Bank, Borrower shall pay in full all outstanding Loan Facility
Obligations no later than the first Business Day after the Final Disbursement Date, except for
Eligible Export-Related Accounts Receivables and Eligible Export-Related Overseas Accounts
Receivable outstanding as of the Final Disbursement Date and due and payable after such date, for
which the principal and accrued and unpaid interest thereon shall be due and payable no later than
the first Business Day after the date such Accounts Receivable are due and payable.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.09 <U>Financial Statements</U>. Borrower shall deliver to Lender the financial statements
required to be delivered by Borrower in accordance with Section&nbsp;11 of the Loan Authorization
Agreement.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.10 <U>Additional Security or Payment</U>. (a)&nbsp;Borrower shall at all times ensure that the
Export-Related Borrowing Base equals or exceeds the aggregate outstanding amount of Disbursements.
If informed by Lender or if Borrower otherwise has actual knowledge that the Export-Related
Borrowing Base is at any time less than the aggregate outstanding amount of Disbursements, Borrower
shall, within five (5)&nbsp;Business Days, either (i)&nbsp;furnish additional Collateral to Lender, in form
and amount satisfactory to Lender and Ex-Im Bank or (ii)&nbsp;pay to Lender an amount equal to the
difference between the aggregate outstanding amount of Disbursements and the Export-Related
Borrowing Base.
</DIV>

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<DIV style="font-family: Helvetica,Arial,sans-serif">

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;For purposes of this Agreement, in determining the Export-Related Borrowing Base there
shall be deducted from the Export-Related Borrowing Base an amount equal to (i)&nbsp;twenty-five percent
(25%) of the undrawn amount of outstanding Commercial Letters of Credit and Standby Letters of
Credit and (ii)&nbsp;one hundred percent (100%) of the undrawn amount of outstanding Warranty Letters of
Credit <U>less</U> the amount of cash collateral held by Lender to secure Warranty Letters of
Credit.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)&nbsp;Unless otherwise approved in writing by Ex-Im Bank, for Revolving Loan Facilities (other
than Transaction Specific Revolving Loan Facilities), Borrower shall at all times ensure that the
sum of the outstanding amount of Disbursements and the undrawn amount of outstanding Commercial
Letters of Credit that is supported by Eligible Export-Related Inventory or Eligible Export-Related
Overseas Inventory (discounted by the relevant Advance Rate percentages) in the Export-Related
Borrowing Base does not exceed sixty percent (60%) of the sum of the total outstanding amount of
Disbursements and the undrawn amount of all outstanding Commercial Letters of Credit. If informed
by Lender or if Borrower otherwise has actual knowledge that the sum of the outstanding amount of
Disbursements and the undrawn amount of outstanding Commercial Letters of Credit that is supported
by such Inventory exceeds sixty percent (60%) of the sum of the total outstanding Disbursements and
the undrawn amount of all outstanding Commercial Letters of Credit, Borrower shall, within five (5)
Business Days, either (i)&nbsp;furnish additional non-Inventory Collateral to Lender, in form and amount
satisfactory to Lender and Ex-Im Bank, or (ii)&nbsp;pay down the applicable portion of the outstanding
Disbursements or (iii)&nbsp;reduce the undrawn amount of outstanding Commercial Letters of Credit such
that the above described ratio is not exceeded.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d)&nbsp;If informed by Lender or if Borrower otherwise has actual knowledge that the conditions of
Section&nbsp;2.16(g) are at any time not being met, Borrower shall, within five (5)&nbsp;Business Days,
either (i)&nbsp;furnish additional Collateral to Lender that is not Eligible Export-Related Overseas
Accounts Receivable or Eligible Export-Related Overseas Inventory, in form and amount satisfactory
to Lender and Ex-Im Bank, or (ii)&nbsp;remove from the Export-Related Borrowing Base the portion of
Eligible Export-Related Overseas Accounts Receivable or Eligible Export-Related Overseas Inventory
that supports greater than fifty percent (50%) of the Export-Related Borrowing Base.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.11 <U>Continued Security Interest</U>. Borrower shall not change (a)&nbsp;its name or identity
in any manner, (b)&nbsp;the location of its principal place of business or its jurisdiction of
organization or formation, (c)&nbsp;the location of any of the Collateral or (d)&nbsp;the location of any of
the books or records related to the Collateral, in each instance without giving thirty (30)&nbsp;days
prior written notice thereof to Lender and taking all
actions deemed necessary or appropriate by Lender to continuously protect and perfect Lender&#146;s
Liens upon the Collateral.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.12 <U>Inspection of Collateral and Facilities</U>. (a)&nbsp;Borrower shall permit the
representatives of Lender and Ex-Im Bank to make at any time during normal business hours
inspections of the Collateral and of Borrower&#146;s facilities, activities, and books and records, and
shall cause its officers and employees to give full cooperation and assistance in connection
therewith.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;Borrower agrees to facilitate Lender&#146;s conduct of field examinations at Borrower&#146;s
facilities in accordance with the time schedule and content for such examinations
</DIV>

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<DIV style="font-family: Helvetica,Arial,sans-serif">



<DIV align="left" style="font-size: 10pt; margin-top: 6pt">that Lender
requests. Such field examinations shall address at a minimum: (x)&nbsp;the value of the Collateral
against which Credit Accommodations may be provided, (y)&nbsp;the amount, if any, that the aggregate
outstanding amount of Disbursements exceeds the Export-Related Borrowing Base and (z)&nbsp;whether such
Borrower is in material compliance with the terms of each of the Loan Documents. Such field
examinations shall include an inspection and evaluation of the Export-Related Inventory and
Export-Related Overseas Inventory, a book audit of Export-Related Accounts Receivable and
Export-Related Overseas Accounts Receivable, a review of the Accounts Receivable Aging Reports and
a review of Borrower&#146;s compliance with any Special Conditions. Lenders who opt to use the
Export-Related Historical Inventory Value in the Export-Related Borrowing Base calculation shall
reconcile those numbers against the calculation for the relevant time periods using the
Export-Related Inventory Value. Whenever Export-Related Accounts Receivable or Export-Related
Inventory derived from Indirect Exports are in the Export-Related Borrowing Base, Lender shall
verify compliance with Section&nbsp;2.15 herein, including taking a random sampling of ultimate foreign
purchasers.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.13 <U>General Intangibles</U>. Borrower represents and warrants that it owns, or is
licensed to use, all General Intangibles necessary to conduct its business as currently conducted
except where the failure of Borrower to own or license such General Intangibles could not
reasonably be expected to have a Material Adverse Effect.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.14 <U>Economic Impact Approval</U>. (a)&nbsp;For Loan Facilities up to and including $10
million, Borrower acknowledges that Capital Goods may not be included as Items, and Export-Related
Inventory, Export-Related Overseas Inventory, Export-Related Accounts Receivable and Export-Related
Overseas Accounts Receivable in connection with the sale of such Capital Goods may not be included
in the Export-Related Borrowing Base, if such Capital Goods would enable a foreign buyer to
establish or expand production of a product where, as of the date of the Economic Impact
Certification covering such Item: (i)&nbsp;the Buyer is subject to a Final Anti-Dumping (AD)&nbsp;or
Countervailing Duty (CVD)&nbsp;order, or a Suspension Agreement arising from a AD or CVD investigation,
and such product is substantially the same as the product that is the subject of the AD/CVD order
or suspension agreement; or (ii)&nbsp;the Buyer is the subject of a Section&nbsp;201 injury determination by
the International Trade Commission (&#147;ITC&#148;) and such product is substantially the same as a product
that is the subject of the ITC injury determination. Borrower may consult with Ex-Im Bank
regarding the appropriate application of this Section&nbsp;2.14(a) and may, at its option, request that
Ex-Im Bank issue an Economic Impact Approval covering any Items listed in Section&nbsp;4.A. of the Loan
Authorization Agreement. For Loan Facilities over $10&nbsp;million
involving Items that are Capital Goods, Borrower shall obtain from Ex-Im Bank, and abide by,
an Economic Impact Approval covering all Items listed in Section&nbsp;4(A) of the Loan Authorization
Agreement.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;Borrower shall provide Lender with a certification in the form of Annex B (an &#147;Economic
Impact Certification&#148;) covering the Items stated in Section&nbsp;4(A) of the Loan Authorization
Agreement prior to Lender including such Items in the Loan Authorization Agreement. Prior to
Lender amending the Loan Authorization Agreement to include additional Items, Borrower shall
provide Lender with an additional Economic Impact Certification covering such additional Items.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.15 <U>Indirect Exports.</U> Indirect Exports may be included as Items in a Loan Facility
<U>provided that</U> funds available under such Loan Facility&#146;s Export-Related Borrowing Base
</DIV>

<P align="center" style="font-size: 10pt"><!-- Folio -->19<!-- /Folio -->
</DIV>

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<DIV style="font-family: Helvetica,Arial,sans-serif">



<DIV align="left" style="font-size: 10pt; margin-top: 6pt">supported by Accounts Receivable and Inventory derived from Indirect Exports at no time exceed ten
percent (10%) of the Maximum Amount of such Loan Facility, and <U>provided</U>, <U>further
</U>that (a)&nbsp;the ultimate foreign buyer for the Items must be located in a country in which Ex-Im
Bank is <U>not</U> legally prohibited from doing business in accordance with the Country
Limitation Schedule, and (b)&nbsp;the Borrower must make available to Lender verifiable evidence of
intent to export the Indirect Exports from the United States, which evidence may be contained in
the Export Orders and Accounts Receivable Aging Reports and supporting documents. Lender must
obtain written consent from Ex-Im Bank prior to including funds derived from Indirect Exports in an
Export-Related Borrowing Base above the ten percent (10%) threshold.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.16 <U>Overseas Inventory and Accounts Receivable</U>. Upon the prior written consent of
Ex-Im Bank, Export-Related Overseas Accounts Receivable and Export-Related Overseas Inventory of a
Borrower or of an Affiliated Foreign Person (as defined below) may be included in the
Export-Related Borrowing Base provided that conditions required by Ex-Im Bank, including the
following, are met:
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;the Affiliated Foreign Person, if any, has been approved by Ex-Im Bank;
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;the Affiliated Foreign Person, if any, is a Borrower under the relevant Loan Facility;
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)&nbsp;notwithstanding the Maximum Amount of the Loan Facility, all payments due and payable on
such Export-Related Overseas Accounts Receivable are collected through a cash collateral account
under Lender&#146;s control;
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d)&nbsp;as of the Effective Date, or such later date when the Export-Related Overseas Accounts
Receivable and/or Export-Related Overseas Inventory are added to the Loan Facility, Lender has
obtained a valid and enforceable first priority Lien in the Export-Related Overseas Accounts
Receivable and Export-Related Overseas Inventory, as applicable;
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e)&nbsp;as of the Effective Date, or such later date when the Export-Related Overseas Accounts
Receivable and/or Export-Related Overseas Inventory are added to the Loan Facility,
Lender has obtained a legal opinion confirming the security interest in the Export-Related
Overseas Accounts Receivable and Export-Related Overseas Inventory;
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f)&nbsp;the Export-Related Overseas Accounts Receivable are due and payable in United States
Dollars or other currency acceptable to Ex-Im Bank; and
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(g)&nbsp;at no time may the portion of the Export-Related Borrowing Base derived from Eligible
Export-Related Overseas Accounts Receivable and Eligible Export-Related Overseas Inventory exceed
fifty percent (50%) of the Export-Related Borrowing Base.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;For purposes hereof, an &#147;Affiliated Foreign Person&#148; shall mean a subsidiary or affiliate of a
Borrower on the same Loan Facility, which has duly executed as a Borrower all of the applicable
Loan Documents and any other documents required by Ex-Im Bank, meets all of the requirements of the
definition of Eligible Person other than subclause (a)&nbsp;thereof and is in good standing in the
country of its formation or otherwise authorized to conduct business in such country.
</DIV>


<P align="center" style="font-size: 10pt"><!-- Folio -->20<!-- /Folio -->
</DIV>

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<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.17 <U>Country Limitation Schedule</U>. Unless otherwise informed in writing by Lender or
Ex-Im Bank, Borrower shall be entitled to rely on the last copy of the Country Limitation Schedule
distributed from Lender to Borrower.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.18 <U>Notice of Certain Events</U>. Borrower shall promptly, but in any event within five
(5)&nbsp;Business Days, notify Lender in writing of the occurrence of any of the following:
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;Borrower or any Guarantor (i)&nbsp;applies for, consents to or suffers the appointment of, or
the taking of possession by, a receiver, custodian, trustee, liquidator or similar fiduciary of
itself or of all or a substantial part of its property or calls a meeting of its creditors, (ii)
admits in writing its inability, or is generally unable, to pay its debts as they become due or
ceases operations of its present business, (iii)&nbsp;makes a general assignment for the benefit of
creditors, (iv)&nbsp;commences a voluntary case under any state or federal bankruptcy laws (as now or
hereafter in effect), (v)&nbsp;is adjudicated as bankrupt or insolvent, (vi)&nbsp;files a petition seeking to
take advantage of any other law providing for the relief of debtors, (vii)&nbsp;acquiesces to, or fails
to have dismissed within thirty (30)&nbsp;days, any petition filed against it in any involuntary case
under such bankruptcy laws, or (vii)&nbsp;takes any action for the purpose of effecting any of the
foregoing;
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;any Lien in any of the Collateral, granted or intended by the Loan Documents to be granted
to Lender, ceases to be a valid, enforceable, perfected, first priority Lien (or a lesser priority
if expressly permitted pursuant to Section&nbsp;6 of the Loan Authorization Agreement) subject only to
Permitted Liens;
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)&nbsp;the issuance of any levy, assessment, attachment, seizure or Lien, other than a Permitted
Lien, against any of the Collateral which is not stayed or lifted within thirty (30)&nbsp;calendar days;
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d)&nbsp;any proceeding is commenced by or against Borrower or any Guarantor for the liquidation of
its assets or dissolution;
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e)&nbsp;any litigation is filed against Borrower or any Guarantor which has had or could
reasonably be expected to have a Material Adverse Effect and such litigation is not withdrawn or
dismissed within thirty (30)&nbsp;calendar days of the filing thereof;
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f)&nbsp;any default or event of default under the Loan Documents;
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(g)&nbsp;any failure to comply with any terms of the Loan Authorization Agreement;
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(h)&nbsp;any material provision of this Agreement or any other Loan Document for any reason ceases
to be valid, binding and enforceable in accordance with its terms;
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i)&nbsp;any event which has had or could reasonably be expected to have a Material Adverse Effect;
or
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(j)&nbsp;the aggregate outstanding amount of Disbursements exceeds the applicable Export-Related
Borrowing Base.
</DIV>

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</DIV>

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<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.19 <U>Insurance</U>. Borrower will at all times carry property, liability and other
insurance, with insurers acceptable to Lender, in such form and amounts, and with such deductibles
and other provisions, as Lender shall require, and Borrower will provide evidence of such insurance
to Lender on the proper Acord Form, so that Lender is satisfied that such insurance is, at all
times, in full force and effect. Each property insurance policy shall name Lender as loss payee or
mortgagee and shall contain a lender&#146;s loss payable endorsement in form acceptable to Lender and
each liability insurance policy shall name Lender as an additional insured. All policies of
insurance shall provide that they may not be cancelled or changed without at least thirty (30)
days&#146; prior written notice to Lender and shall otherwise be in form and substance satisfactory to
Lender. Borrower will promptly deliver to Lender copies of all reports made to insurance
companies.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.20 <U>Taxes</U>. Borrower has timely filed all tax returns and reports required by
applicable law, has timely paid all applicable taxes, assessments, deposits and contributions owing
by Borrower and will timely pay all such items in the future as they became due and payable.
Borrower may, however, defer payment of any contested taxes; provided, that Borrower (a)&nbsp;in good
faith contests Borrower&#146;s obligation to pay such taxes by appropriate proceedings promptly and
diligently instituted and conducted; (b)&nbsp;notifies Lender in writing of the commencement of, and any
material development in, the proceedings; (c)&nbsp;posts bonds or takes any other steps required to keep
the contested taxes from becoming a Lien upon any of the Collateral; and (d)&nbsp;maintains adequate
reserves therefore in conformity with GAAP.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.21 <U>Compliance with Laws</U>. Borrower represents and warrants that it has complied in
all material respects with all provisions of all applicable laws and regulations, including those
relating to Borrower&#146;s ownership of real or personal property, the conduct and licensing of
Borrower&#146;s business, the payment and withholding of taxes, ERISA and other employee matters, safety
and environmental matters.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.22 <U>Negative Covenants</U>. Without the prior written consent of Ex-Im Bank and Lender,
Borrower shall not: (a)&nbsp;merge, consolidate or otherwise combine with any other Person; (b)&nbsp;acquire
all or substantially all of the assets or
capital stock of any other Person; (c)&nbsp;sell, lease, transfer, convey, assign or otherwise
dispose of any of its assets, except for the sale of Inventory in the ordinary course of business
and the disposition of obsolete equipment in the ordinary course of business; (d)&nbsp;create any Lien
on the Collateral except for Permitted Liens; (e)&nbsp;make any material changes in its organizational
structure or identity; or (f)&nbsp;enter into any agreement to do any of the foregoing.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.23 <U>Cross Default</U>. Borrower shall be deemed in default under the Loan Facility if
Borrower fails to pay when due any amount payable to Lender under any loan or other credit
accommodations to Borrower whether or not guaranteed by Ex-Im Bank.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.24 <U>Munitions List</U>. If any of the Items are articles, services, or related technical
data that are listed on the United States Munitions List (part 121 of title 22 of the Code of
Federal Regulations), Borrower shall send a written notice promptly, but in any event within five
(5)&nbsp;Business Days, of Borrower learning thereof to Lender describing the Items(s) and the
corresponding invoice amount.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.25 <U>Suspension and Debarment, etc</U>. On the date of this Agreement neither Borrower
nor its Principals are (a)&nbsp;debarred, suspended, proposed for debarment with a final determination
</DIV>

<P align="center" style="font-size: 10pt"><!-- Folio -->22<!-- /Folio -->
</DIV>

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<DIV style="font-family: Helvetica,Arial,sans-serif">



<DIV align="left" style="font-size: 10pt; margin-top: 6pt">still pending, declared ineligible or voluntarily excluded (as such terms are defined under any of
the Debarment Regulations referred to below) from participating in procurement or nonprocurement
transactions with any United States federal government department or agency pursuant to any of the
Debarment Regulations or (b)&nbsp;indicted, convicted or had a civil judgment rendered against Borrower
or any of its Principals for any of the offenses listed in any of the Debarment Regulations.
Unless authorized by Ex-Im Bank, Borrower will not knowingly enter into any transactions in
connection with the Items with any person who is debarred, suspended, declared ineligible or
voluntarily excluded from participation in procurement or nonprocurement transactions with any
United States federal government department or agency pursuant to any of the Debarment Regulations.
Borrower will provide immediate written notice to Lender if at any time it learns that the
certification set forth in this Section&nbsp;2.24 was erroneous when made or has become erroneous by
reason of changed circumstances.
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>ARTICLE III<BR>
RIGHTS AND REMEDIES</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.01 <U>Indemnification</U>. Upon Ex-Im Bank&#146;s payment of a Claim to Lender in connection
with the Loan Facility pursuant to the Master Guarantee Agreement, Ex-Im Bank may assume all rights
and remedies of Lender under the Loan Documents and may enforce any such rights or remedies against
Borrower, the Collateral and any Guarantors. Borrower shall hold Ex-Im Bank and Lender harmless
from and indemnify them against any and all liabilities, damages, claims, costs and losses incurred
or suffered by either of them resulting from (a)&nbsp;any materially incorrect certification or
statement knowingly made by Borrower or its agent to Ex-Im Bank or Lender in connection with the
Loan Facility, this Agreement, the Loan Authorization Agreement or any other Loan Documents or (b)
any material breach by Borrower of the terms and conditions of this Agreement, the Loan
Authorization Agreement or any of the other Loan Documents. Borrower also acknowledges
that any statement, certification or representation made by Borrower in connection with the
Loan Facility is subject to the penalties provided in Article&nbsp;18 U.S.C. Section&nbsp;1001.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.02 <U>Liens</U>. Borrower agrees that any and all Liens granted by it to Lender are also
hereby granted to Ex-Im Bank to secure Borrower&#146;s obligation, however arising, to reimburse Ex-Im
Bank for any payments made by Ex-Im Bank pursuant to the Master Guarantee Agreement. Lender is
authorized to apply the proceeds of, and recoveries from, any property subject to such Liens to the
satisfaction of Loan Facility Obligations in accordance with the terms of any agreement between
Lender and Ex-Im Bank.
</DIV>

<P align="center" style="font-size: 10pt"><!-- Folio -->23<!-- /Folio -->
</DIV>

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<DIV style="font-family: Helvetica,Arial,sans-serif">

<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>ARTICLE IV<BR>
MISCELLANEOUS</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.01 <U>Governing Law</U>. This Agreement and the obligations arising under this Agreement
shall be governed by, and construed in accordance with, the law of the state governing the Loan
Agreement.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.02 <U>Notification</U>. All notices required by this Agreement shall be given in the
manner and to the parties provided for in the Loan Agreement.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.03 <U>Partial Invalidity</U>. If at any time any of the provisions of this Agreement
becomes illegal, invalid or unenforceable in any respect under the law of any jurisdiction, neither
the legality, the validity nor the enforceability of the remaining provisions hereof shall in any
way be affected or impaired.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.04 <U>Waiver of Jury Trial</U>. BORROWER HEREBY KNOWINGLY, VOLUNTARILY AND INTENTIONALLY
WAIVES ANY AND ALL RIGHTS IT MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY ACTION, SUIT, PROCEEDING
OR OTHER LITIGATION BROUGHT TO RESOLVE ANY DISPUTE ARISING UNDER, ARISING OUT OF OR IN CONNECTION
WITH THIS AGREEMENT, THE LOAN AUTHORIZATION AGREEMENT, ANY LOAN DOCUMENT, OR ANY OTHER AGREEMENT,
DOCUMENT OR INSTRUMENT EXECUTED OR DELIVERED IN CONNECTION HEREWITH OR THEREWITH OR ANY COURSE OF
CONDUCT, COURSE OF DEALING, STATEMENTS (WHETHER VERBAL OR WRITTEN), OR ACTIONS OR OMISSIONS OF
LENDER, EX-IM BANK, OR ANY OTHER PERSON, RELATING TO THIS AGREEMENT, THE LOAN AUTHORIZATION
AGREEMENT OR ANY OTHER LOAN DOCUMENT.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.05 <U>Consequential Damages</U>. Neither Ex-Im Bank, Lender nor any agent or attorney for
any of them shall be liable to Borrower for consequential damages arising from any breach of
contract, tort or other wrong relating to the establishment, administration or collection of the
Loan Facility Obligations.
</DIV>

<P align="center" style="font-size: 10pt"><!-- Folio -->24<!-- /Folio -->
</DIV>

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<DIV style="font-family: Helvetica,Arial,sans-serif">

<DIV style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;IN WITNESS WHEREOF, Borrower has caused this Agreement to be duly executed as of the <U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U>
day of <U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U>, 200_.</DIV>
<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="2%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="35%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="50%">&nbsp;</TD>
</TR>
<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom">
    <TD colspan="3" align="center" valign="top">Iridex Corporation<DIV style="font-size: 1pt; border-top: 1px solid #000000">&nbsp;</DIV>
(Name of Borrower)
</TD>
    <TD>&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top">By:</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">/s/ James Mackaness</TD>
    <TD>&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top">&nbsp;</TD>

    <TD  colspan="2" align="center" valign="top"><DIV style="font-size: 1pt; border-top: 1px solid #000000">&nbsp;</DIV>
(Signature)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</TD>
    <TD>&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top">Name:</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top" style="border-bottom:1px solid black">James Mackaness</TD>
    <TD>&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top">Title:</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top" style="border-bottom:1px solid black">CFO</TD>
    <TD>&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
</TR>
<!-- End Table Body -->
</TABLE></DIV>


<DIV style="font-size: 10pt; margin-top: 12pt">ACKNOWLEDGED:</DIV>

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="2%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="35%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="50%">&nbsp;</TD>
</TR>
<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom">
    <TD  colspan="3" align="center" valign="top">Wells Fargo Bank N.A. Wells Fargo Business Credit<DIV style="font-size: 1pt; border-top: 1px solid #000000">&nbsp;</DIV>
(Name of Lender)
</TD>
    <TD>&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top">By:</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">/s/ Jorge Visitacion</TD>
    <TD>&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top">&nbsp;</TD>

    <TD colspan="2" align="center" valign="top"><DIV style="font-size: 1pt; border-top: 1px solid #000000">&nbsp;</DIV>
(Signature)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</TD>
    <TD>&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top">Name:</TD>
    <TD>&nbsp;</TD>
    <TD valign="top" style="border-bottom:1px solid black">Jorge Visitacion</TD>
    <TD>&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top">Title:</TD>
    <TD>&nbsp;</TD>
    <TD valign="top" style="border-bottom:1px solid black">AVP + Relationship Manager</TD>
    <TD>&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
</TR>
<!-- End Table Body -->
</TABLE></DIV>


<P align="center" style="font-size: 10pt"><!-- Folio -->25<!-- /Folio --></DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="font-family: Helvetica,Arial,sans-serif">

<DIV align="left" style="font-size: 10pt; margin-top: 12pt">CONSENT OF GUARANTORS
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Each of the undersigned as a Guarantor of the obligations of Borrower to the Lender executing
the foregoing Agreement hereby agrees that the foregoing Agreement, each of their respective
Guarantee Agreements and each other Loan Documents may be assigned to the Export-Import Bank of the
United States.
</DIV>
<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="49%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="35%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="15%">&nbsp;</TD>
</TR>
<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Signature:</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top"><DIV style="font-size: 1pt; border-top: 1px solid #000000">&nbsp;</DIV>
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Signature:</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top"><DIV style="font-size: 1pt; border-top: 1px solid #000000">&nbsp;</DIV>
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt">ANNEXES:
</DIV>

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="10%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="90%">&nbsp;</TD>
</TR>
<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Annex A
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">- Loan Authorization Agreement, Fast Track Loan Authorization Agreement or Loan Authorization Notice, as<br>&nbsp; applicable</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Annex B
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">- Economic Impact Certification</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>


<P align="center" style="font-size: 10pt"><!-- Folio -->26<!-- /Folio -->
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="font-family: Helvetica,Arial,sans-serif">

<DIV align="right" style="font-size: 10pt; margin-top: 12pt"><B>ANNEX B</B>
</DIV>


<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>Economic Impact Certification</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">I am making this Economic Impact Certification on behalf of <U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U><U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U> (the
&#147;Borrower&#148;) pursuant to Section&nbsp;2.14(b) of the Borrower Agreement applicable to the Borrower&#146;s Loan
Facility. All capitalized terms not otherwise defined in this Certification are as defined in the
Borrower Agreement.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt">I hereby certify that:
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><FONT face="Wingdings">&#111;</FONT> No Items listed in Section&nbsp;4.A.(1.) of the Loan Authorization Agreement applicable to the
Borrower&#146;s Loan Facility are Capital Goods.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><FONT face="Wingdings">&#111;</FONT> No Items being added to Section&nbsp;4.A.(1.) of the Loan Authorization Agreement in amending such
document are Capital Goods.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><FONT face="Wingdings">&#111;</FONT> The Items listed below are Capital Goods. In accordance with Section&nbsp;2.14(a) of the Borrower
Agreement, the Borrower has either conducted its own analysis or obtained an Economic Impact
Approval concluding that such Items do not require any restrictions. The Economic Impact Approval
or Borrower&#146;s analysis supporting this conclusion is attached.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><FONT face="Wingdings">&#111;</FONT> The Items listed below are Capital Goods. In accordance with Section&nbsp;2.14(a) of the Borrower
Agreement, the Borrower has either conducted its own analysis or obtained an Economic Impact
Approval that identifies certain restrictions. The Borrower shall abide by the terms of such
restrictions throughout the term of the Loan Facility. The Economic Impact Approval or Borrower&#146;s
analysis enumerating the restrictions is attached.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">I certify that I am authorized to sign this Certification on behalf of the Borrowers.
</DIV>

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="40%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="60%">&nbsp;</TD>
</TR>
<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top"><B>Date:</B></TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px"><DIV style="font-size: 1pt; border-top: 1px solid #000000">&nbsp;</DIV>
Name:
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Title:</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>



<P align="center" style="font-size: 10pt"><!-- Folio -->27<!-- /Folio -->
</DIV>



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