AGREEMENT OF MERGER
                         -------------------

     This  Agreement of Merger  (this  "Merger  Agreement')  dates as of June 5,
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")  and Vismed,
Inc., d/b/a Dicon, a California corporation ("Dicon") (Paradigm, Subsidiary, and
Dicon collectively, the "Parties").

                        W I T N E S S E T H :

     WHEREAS,  prior  to the  execution  of  this  Merger  Agreement,  Paradigm,
Subsidiary  and Dicon have entered into an Agreement and Plan of  Reorganization
of even date  herewith  (the "Plan of  Reorganization")  providing  for  certain
representations,  warranties,  and agreements in connection with the transaction
contemplated; 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 herein and in the Plan of Reorganization and
pursuant to which Dicon will become a wholly owned subsidary of Paradigm; and

     WHEREAS,  for federal  income tax purposes,  it is intended that the Merger
shall qualify as a  reorganization  within the meaning of Section  368(a) of the
Internal Revenue Code of 1986, as amended (the "Code")

     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 Merger  Agreement  have the  meanings  specified in the
Plan of Reorganization, unless the context expressly or by necessary implication
otherwise requires.
<PAGE>

                             ARTICLE 2

                         AGREEMENT TO MERGE

2.1 Agreement to Merge. In accordance with the provision of Section  16-10a-1101
et seq. of the Utah Revised Business Corporation Act and Section 1100 et seq. of
the California Corporations Code, at the Effective Time of the Merger Subsidiary
shall be merged with and into Dicon upon the terms and conditions of this Merger
Agreement and the Plan of Reorganization. Pursuant to such Merger:

   (a) The separate  existence of Subsidiary  shall cease in accordance with the
provisions of Section  16-10a-1106 of the Utah Revised Business  Corporation Act
and Section 1100 et seq. Of the California Corporations Code.

   (b) Dicon will be the Surviving  Corporation  in the Merger and will continue
to be  governed  by the  laws of the  State  of  California,  and  the  separate
corporate existence of Dicon and all of its rights,  privileges,  immunities and
franchises,  public or  private,  and all of its  duties  and  liabilities  as a
corporation  organized under the laws of the State of California,  will continue
unaffected by the Merger.

   (c) The  shares of Dicon  Common  owned by Dicon's  shareholders  immediately
prior to the  Effective  Time of the Merger  shall be  converted  into  Paradigm
Common in accordance with the terms and conditions of this Merger  Agreement and
the Plan of Reorganization.

   (d)  The  Dicon  Options  owned  by  Optionholder  immediately  prior  to the
Effective  Time of the  Merger  shall be  converted  into  Paradigm  Options  in
accordance  with the terms and conditions of this Merger  Agreement and the Plan
of Reorganization.

   (e) The shares of Subsidiary  Common owned by Paradigm  immediately  prior to
the Effective Time of the Merger shall,  by virtue of the Merger and without any
action on the part of Paradigm,  automatically be converted into Dicon Common so
that,  following such  conversion,  Dicon shall be a wholly owned  subsidiary of
Paradigm.

2.2 Conversion of Dicon Common into Paradigm Common.
   (a)(1) The total amount of Paradigm Common to be delivered by Paradigm to the
holders of Dicon Common, pro rata to their respective share ownership,  shall be
921,500  shares,  subject to  adjustment  as  described  below  (such  amount as
adjusted, the "Merger Consideration").  In addition,  Paradigm shall deliver, on
the Closing Date, 22,500 shares of Paradigm Common to Mark R. Miehle,  President
and  Chief  Executive  Officer  of  Dicon,  representing  a  transaction  fee in
connection with the Merger.he Merger Consideration shall be provided by Paradigm
through  Subsidiary  and by virtue of  Subsidiary's  merger with and into Dicon.
Each share of Dicon  Common  issued  and  outstanding  immediately  prior to the

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<PAGE>

Effective  Time of the Merger  shall,  by virtue of the Merger and  without  any
action  on the  part  of the  holder  thereof,  automatically  be  canceled  and
converted  into the right to  receive  an amount  per share  equal to the Merger
Consideration  divided by the total number of shares of Dicon Common  issued and
outstanding  at the Effective  Time of the Merger,  rounded to the nearest whole
share (such amount, the "Per Share Amount"). Each holder of a share or shares of
Dicon  Common  immediately  prior to the  Effective  Time of the Merger shall be
virtue of the Merger and  without  any action on the part of such  holder  cease
being a shareholder of Dicon and  automatically  be converted into a shareholder
of Paradigm in an amount  equal to the number of shares of Dicon  Common held of
record by such holder at such time multiplied by the Per Share Amount. Rights of
dissenting shareholders are described in Section 2.3.

   (a)(2) Each Dicon Option outstanding  immediately prior to the Effective Time
of the Merger shall,  by virtue of the Merger and without any action on the part
of the  Optionholder,  automatically  be  converted  into the option to purchase
Paradigm Common (a "Paradigm Option").  The terms and provisions of the Paradigm
Option shall be the same as the terms and  provisions of the Dicon Option except
that:

       (i) the  number of  shares  of  Paradigm  Common  which may be  purchased
pursuant to each Paradigm  Option shall be determined by multiplying  the number
of shares of Dicon Common covered by the  applicable  Dicon Option times the Per
Share Amount, and

       (ii) the purchase price for each share of Paradigm  Common covered by the
Paradigm  Option shall be  determined  by dividing  the purchase  price for each
share of Dicon Common  covered by the  applicable  Dicon Option by the Per Share
Amount.


   (b) The Merger  Consideration  shall be delivered to the Disbursing  Agent as
follows:

       (i) No later than  10:00 a.m.  (Mountain  Standard  Time) on the  Closing
Date,  paradigm and  Subsidiary  shall deliver the Merger  Consideration  to the
Disbursing Agent.

       (ii) Promptly after the Effective  Time of the Merger,  and in accordance
with Section 2.3 hereof,  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) hereof.

2.3 Delivery of  Certificates  for Paradigm Common and Surrender of Certificates
for Dicon  Common.  All  deliveries  of Merger  Consideration  to be made to the
shareholders  of Dicon  Common  shall be made by  delivery of a  certificate  of
Paradigm  Common by the  Disbursing  Agent to and in the name of each  holder of
Dicon Common or its designated agent or transferee.  After the Effective Time of

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<PAGE>

the Merger,  there shall be no further registry of transfers in respect of Dicon
Common. Promptly after the Effective Time of the Merger, Paradigm will cause the
Disbursing  Agent to send a notice  and a  transmittal  form to each  holder  of
record of Dicon Common  immediately  prior to the  Effective  Time of the Merger
advising such holders of the terms of the Merger Consideration to be effected in
connection  with the Merger,  the procedure for delivery to such  shareholder of
the amount of Paradigm  Common  stock which such holder is entitled  pursuant to
the terms hereof and the Plan of Merger.  If any such  Paradigm  Common is to be
delivered  to a  name  other  than  that  in  which  the  stock  certificate  is
registered,  the  certificate  so  surrendered  shall be properly  endorsed  and
otherwise in proper form for transfer,  and the person  requesting such Paradigm
Common shall pay to the Disbursing  Agent any transfer or other fees required by
reason of the  deliver to any name other than that of the  registered  holder of
the certificate surrendered,  or establish to the satisfaction of the Disbursing
Agent that such fee has been paid or is not applicable.

2.4 Dissenting  Shareholders.  The duties and rights of a dissenting shareholder
of Dicon Common,  as well as the duties and rights of the Surviving  Corporation
shall  be as  provided  in the Utah  Revised  Business  Corporation  Act and the
California  Corporations  Code.  If any such  shareholder  shall not perfect his
rights as a dissenting  shareholder under Section 1300 et seq. of the California
Corporations  Code, or such shareholder shall thereafter  withdraw such election
or otherwise  become bound by the  provisions of this  Agreement and the Plan of
Merger  pursuant to the  California  Corporations  Code,  the amount of Paradigm
Common delivered to the Disbursing Agent with respect to such shareholder  shall
be delivered by the  Disbursing  Agent to such  shareholder  in exchange for the
certificates representing such shareholder's shares of Dicon Common. If any such
shareholder  thereafter  receives  payment  for  such  shareholder's  shares  as
provided in the California Corporation Code the Disbursing Agent shall return to
the Surviving  Corporation  those shares of Paradigm Common which the Disbursing
Agent  had  been  holding  as due to such  shareholder  pursuant  to the Plan of
Merger.

2.5  Surviving  Corporation.  Except  as  provided  otherwise  in  the  Plan  of
Reorganization:

   (a) The Articles of Incorporation of Dicon as in effect  immediately prior to
the Effective Time of the Merger shall be the Articles of  Incorporation  of the
Surviving Corporation after the Effective Time.

   (b) the Bylaws of Dicon as in effect  immediately prior to the Effective Time
shall be the Bylaws of the Surviving Corporation after the Effective Time.

   (c) from and after the Effective Time, the Board of Directors and officers of
Paradigm  shall  be the  Board  of  Directors  and  officers  of  the  Surviving
Corporation.

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<PAGE>

2.6 Effectiveness of Merger.  The Merger shall become effective at the Effective
Time of the Merger as defined in the Plan of Reorganization.

                            ARTICLE   3

                           MISCELLANEOUS

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

3.2 Prior  Agreements;  Modifications.  This  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
Agreement may be amended by an  instrument  in writing  signed by each of Dicon,
Subsidiary and Paradigm ; provided, however, that no such amendment entered into
without the written consent of the shareholders of Dicon may decrease the Merger
Consideration.

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

3.4 Governing Law. The terms of this Merger  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  Merger  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  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:

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<PAGE>

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

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.

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<PAGE>

3.8 Waiver.  The  performance of any covenant or agreement or the fulfillment of
any condition of this Merger  Agreement by Dicon,  Subsidiary or Paradigm 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 Dicon,  Subsidiary  or  Paradigm  in
exercising any right,  power,  or privilege  under this Merger  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.

   IN WITNESS WHEREOF, each of the parties hereto, intending to be legally bound
hereby,  has duly  executed  this Merger  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

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