ESCROW AGREEMENT
                           ----------------


       This Escrow Agreement (this "Escrow Agreement") dated as of May 16, 2000,
is entered  into by and among  Paradigm  Medical  Industries,  Inc.,  a Delaware
corporation  ("Paradigm"  or the  "Buyer"),  Paradigm  Subsidiary,  Inc., a Utah
corporation  and wholly owned  subsidiary  of Paradigm  ("Subsidiary"),  Vismed,
Inc.,  d/b/a  Dicon,  a  California  corporation  ("Dicon"),  and Mackey Price &
Williams,  a Utah  professional  corporation (the "Disbursing  Agent")(Paradigm,
Subsidiary, Dicon and Disbursing Agent, collectively, the "Parties").

                        W I T N E S S E T H :

       WHEREAS,  prior to the  execution  of this  Escrow  Agreement,  Paradigm,
Subsidiary  and Dicon have entered into an Agreement and Plan of  Reorganization
of even date herewith (the "Plan of Reorganization")  and a related Agreement of
Merger (the "Merger Agreement"), both of even date herewith; and

       WHEREAS,  the boards of directors of Paradigm,  Subsidiary and Dicon have
approved the acquisition of Dicon by Paradigm; and

       WHEREAS,  the boards of directors of Paradigm,  Subsidiary and Dicon have
approved the merger of Subsidiary  into Dicon (the  "Merger") upon the terms and
subject to the conditions set forth in the Plan of Reorganization and the Merger
Agreement  pursuant  to which  Dicon will become a wholly  owned  subsidiary  of
Paradigm; and

       WHEREAS, the Plan of Reorganization and the Merger Agreement  contemplate
the  execution  of this Escrow  Agreement  for the  purposes  stated  herein and
therein.

       NOW,  THEREFORE,  for good and  valuable  consideration,  the receipt and
sufficiency of which are hereby acknowledged, the parties agree as follows:


                              ARTICLE 1

                             DEFINITIONS

1.1 Certain Terms Defined. The terms defined in the Plan of Reorganization shall
for all purposes of this Escrow  Agreement  have the  meanings  specified in the
Plan of Reorganization, unless the context expressly or by necessary implication
otherwise requires.

<PAGE>

                             ARTICLE 2

              ESTABLISHMENT AND DISTRIBUTION OF ESCROW

2.1 Escrow  Account.  Pursuant to the  provisions  of Section 2.2 of the Plan of
Reorganization

   (a) Upon the  execution and delivery of the Plan of  Reorganization  and this
Agreement,  Paradigm shall pay $100,000 (the "Deposit Amount") to the Disbursing
Agent, to be held as part of the Escrow Account.

   (b) Paradigm and  Subsidiary  shall deliver the Merger  Consideration  to the
Disbursing  Agent no later  than  10:00  a.m.  (Mountain  Standard  Time) on the
Closing Date.

2.2  Distribution of Escrow Account.  The Escrow Account shall be distributed as
follows:

   (a) The  Deposit  Amount  shall  be  paid  to  Dicon  as  liquidated  damages
representing  reasonable  costs and  expenses  incurred by Dicon if (i) Paradigm
takes action to terminate the Plan of Reorganization pursuant to Section 11.1(a)
of the Plan of Reorganization,  or (ii) Dicon takes action to terminate the Plan
of   Reorganization   pursuant  to  Section  11.1(b)  or  (e)  of  the  Plan  of
Reorganization.   If  there  is  no  such  action  to  Terminate   the  Plan  of
Reorganization, the Deposit Amount shall be returned to Paradigm.

   (b) Promptly after the Effective Time of the Merger,  and in accordance  with
Sections 2.3 and 2.5 of the Plan of  Reorganization,  the Disbursing Agent shall
deliver to the holders of Dicon Common at the Effective Time of the Merger,  the
Merger  Consideration  in the proportion  set forth in Section  2.2(a)(1) of the
Plan of Reorganization.


                            ARTICLE   3

                           MISCELLANEOUS

3.1 Termination.  This Escrow Agreement shall terminate in the event of and upon
termination of the Plan of Reorganization.

3.2 Prior Agreements; Modifications. This Escrow Agreement, the Merger Agreement
and the Plan of  Reorganization  constitute  the entire  agreement  between  the
parties with respect to the subject matter hereof, and shall supersede all prior
agreements,  documents, or other instruments with respect to the matters covered
hereby.  This Escrow Agreement may be amended by an instrument in writing signed
by each of the Parties.

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<PAGE>

3.3 Captions  and Table of Contents.  The captions and table of contents in this
Escrow  Agreement are for convenience only and shall not be considered a part of
or affect the  construction  or  interpretation  of any provision of this Escrow
Agreement.

3.4 Governing Law. The terms of this Escrow  Agreement shall be governed by, and
interpreted  and construed in accordance with the provisions of, the laws of the
State of Delaware without regard to its conflicts of law principles.

3.5  Counterparts.  This  Escrow  Agreement  may be  executed  in any  number of
counterparts, each of which, when so executed, shall constitute an original copy
hereof.

3.6 Severability.  If any clause, provision, or section of this Escrow Agreement
is  ruled  illegal,   invalid,  or  unenforceable  by  any  court  of  competent
jurisdiction,  the invalidity or unenforceability of such clause,  provision, or
section shall not affect any of the remaining provisions hereof.

3.7 Notices.  Any notice,  request,  instruction,  or other document to be given
hereunder  shall  be in  writing  and  shall  be  transmitted  by  certified  or
registered mail, postage prepaid,  by reputable express courier, or by facsimile
transmission.  The  addresses  or  facsimile  telephone  numbers  to which  such
communications shall be sent are as follows:

If to Dicon:

   10373 Roselle Street
   San Diego, California 92121
   Attention: Mark R. Miehle, President and
   Chief Executive Officer
   Facsimile Number:

   With a copy to:

   Luce, Forward, Hamilton & Scripps LLP
   600 West Broadway, Suite 2600
   San Diego, California 92101
   Attention: Dennis J. Doucette, Esq.
   Facsimile Number: (619) 232-8311


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<PAGE>

If to Paradigm:

   2355 South 1070 West
   Salt Lake City, Utah  84119
   Attention: Thomas F. Motter, President and
   Chief Executive Officer
   Facsimile Number: (801) 977-8973

   With a copy to:

   Mackey, Price & Williams
   170 South Main Street, Suite 900
   Salt Lake City, Utah  84101-1655
   Attention: Randall A. Mackey, Esq.
   Facsimile Number: (801) 575-5006

If to the Disbursing Agent:

   Mackey, Price & Williams
   170 South Main Street, Suite 900
   Salt Lake City, Utah  84101-1655
   Attention: Randall A. Mackey, Esq.
   Facsimile Number: (801) 575-5006

or to such other  address or  facsimile  telephone  number as any party may from
time to time designate to the others in writing.

3.8 Waiver.  The  performance of any covenant or agreement or the fulfillment of
any  condition of this Escrow  Agreement by the Parties may be expressly  waived
only in writing by the other parties.  Any waiver  hereunder  shall be effective
only in the specific instance and for the purpose for which given. No failure or
delay on the part of the Parties in exercising  any right,  power,  or privilege
under this Escrow  Agreement  shall operate as a waiver  thereof,  nor shall any
single or partial exercise of any right,  power, or privilege hereunder preclude
any other or further exercise thereof or the exercise of any other right, power,
or privilege.

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<PAGE>

   IN WITNESS WHEREOF, each of the parties hereto, intending to be legally bound
hereby,  has duly  executed  this Escrow  Agreement as of the date first written
above.

                                VISMED, INC., d/b/a DICON


                                By: /s/ Mark R. Miehle
                                    ---------------------
                                Mark R. Miehle, President and
                                and Chief Executive Officer
                                PARADIGM MEDICAL INDUSTRIES, INC.

                                By: /s/ Thomas F. Motter
                                    ---------------------
                                Thomas F. Motter, President and
                                Chief Executive Officer
                                PARADIGM SUBSIDIARY, INC.

                                By: /s/ Thomas F. Motter
                                    ---------------------
                                Thomas F. Motter, President and
                                Chief Executive Officer
                                MACKEY PRICE & WILLIAMS

                                By: /s/ Randall A. Mackey
                                    ----------------------
                                Randall A. Mackey, President

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