**Exhibit 4.10**

 

NEITHER THIS WARRANT NOR THE SHARES OF STOCK ISSUABLE UPON ITS EXERCISEHAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “ACT”),OR ANY APPLICABLE STATE SECURITIES LAWS, AND MAY NOT BE OFFERED, SOLD OROTHERWISE TRANSFERRED, PLEDGED OR HYPOTHECATED UNLESS (I) PURSUANT TOREGISTRATION UNDER THE ACT OR (II) IN COMPLIANCE WITH AN EXEMPTION THEREFROMAND ACCOMPANIED, IF REQUESTED BY THE COMPANY, WITH AN OPINION OF COUNSELREASONABLY SATISFACTORY TO THE COMPANY THAT SUCH TRANSFER IS IN COMPLIANCE WITHAN EXEMPTION THEREFROM (UNLESS SUCH TRANSFER IS TO AN AFFILIATE OF THEREGISTERED HOLDER).

 

**THIS WARRANT AND THE SHARES OFSERIES A-3 CONVERTIBLE PREFERRED STOCK**

**ISSUED UPON ITS EXERCISE ARESUBJECT TO THE RESTRICTIONS ON**

**TRANSFER SET FORTH IN SECTION 4OF THIS WARRANT**

 

** **
| Date of  Issuance: March 1, 2005 | Number of Shares of Series A-3 Convertible  Preferred Stock:  133,334 (subject to adjustment) |
|----------------------------------|-----------------------------------------------------------------------------------------------|

 

 

**Refocus Group, Inc.**

 

**Series A-3 Convertible StockPurchase Warrant**

 

RefocusGroup, Inc., a Delaware corporation (the “***Company***”),for value received, hereby certifies that Medcare Investment Fund III, Ltd., a Texas limited partnership, or its registeredassigns (the “***Registered Holder***”), isentitled, subject to the terms and conditions set forth below, to purchase fromthe Company, in whole or in part, at any time and from time to time on or afterthe date of issuance on or before 11:59 p.m., San Antonio, Texas time, on February 28, 2007 and shall be void thereafter(the “***Exercise Period***”), 133,334****shares of Series A-3 Convertible Preferred Stock, $0.0001par value per share, of the Company (the “***Preferred Stock***”),at an exercise price of $30.00****pershare.  The shares purchasable uponexercise of this warrant (“***Warrant***”)and the exercise price per share, each as adjusted from time to time pursuantto the provisions of this Warrant, are hereinafter referred to as the “***Warrant Shares***” and the “***Exercise Price***,” respectively.

 

# 1.                                       **Exercise****.**

#  

## (a)                                  ThisWarrant may be exercised in whole or in part by the Registered Holder bysurrendering this Warrant, along with the purchase form appended hereto as Exhibit Aduly executed and completed by the Registered Holder or by the RegisteredHolder’s duly authorized attorney, at the principal office of the Company, orat such other office or agency as the Company may designate by notice inwriting to the Registered Holder, accompanied by cash or certified cashier’scheck payable to the Company (or wire transfer of immediately available funds),in lawful money of the United States, of the Exercise Price payable in respectof the number of Warrant Shares purchased upon such exercise (the “***Aggregate Exercise Price***”).

##  

## (b)                                 Eachexercise of this Warrant shall be deemed to have been effected immediatelyprior to the close of business on the day on which this Warrant shall have beensurrendered to the Company as provided in subsection 1(a) above (the “***Exercise Date***”).  At such time, the person or persons in whosename or names any certificates for Warrant Shares shall be issuable upon suchexercise

##  

## 1

## 

##  

## as provided in subsection1(c) below shall be deemed to have become the holder or holders of recordof the Warrant Shares represented by such certificates.

##  

## (c)                                  Withinten (10) days after the date of exerciseof this Warrant, the Company, at its expense, will cause to be issued in thename of, and delivered to, the Registered Holder, or as such Holder (uponpayment by such Holder of any applicable transfer taxes) may direct, a certificateor certificates for the number of full Warrant Shares to which the RegisteredHolder shall be entitled upon such exercise plus, in lieu of any fractionalshare to which the Registered Holder would otherwise be entitled, cash in anamount determined pursuant to Section 3 hereof.  Notwithstanding the foregoing, the RegisteredHolder shall be solely responsible for any income taxes payable and arisingfrom the issuance or exercise of this Warrant, or any *ad valorem*property or intangible tax assessed against the Registered Holder.

##  

## (d)                                 TheCompany shall assist and cooperate with any Registered Holder required to makeany governmental filings or obtain any governmental approvals prior to or inconnection with any exercise of this Warrant (including, without limitation,making any filings required to be made by the Company).

##  

## (e)                                  Notwithstanding any other provision of this Warrant,if the exercise of all or any portion of this Warrant is to be made inconnection with a registered public offering, a sale of the Company or anyother transaction or event, such exercise may, at the election of theRegistered Holder, be conditioned upon consummation of such transaction orevent in which case such exercise shall not be deemed effective until theconsummation of such transaction or event.

##  

# 2.                                       **Adjustments****. **In order to preventdilution of the rights granted under this Warrant and to grant the RegisteredHolder certain additional rights, the Exercise Price shall be subject toadjustment from time to time as provided in this Section 2 and thenumber of Warrant Shares shall be subject to adjustment from time to time asprovided in this Section 2.

#  

## (a)                                  Adjustmentfor Stock Splits and Combinations. If the Company shall at any time after the date on which this Warrantwas first issued (the “***Original Issue Date***”)while this Warrant remains outstanding and unexpired in whole or in part,effect a subdivision (by any stock split or otherwise) of the outstanding PreferredStock into a greater number of shares, the Exercise Price in effect immediatelybefore that subdivision shall be proportionately decreased and the number ofshares of Preferred Stock obtainable upon exercise of this Warrant shall beproportionately increased.  Conversely,if the Company shall at any time or from time to time after the Original IssueDate combine (by reverse stock split or otherwise) the outstanding shares of PreferredStock into a smaller number of shares, the Exercise Price in effect immediatelybefore the combination shall be proportionately increased and the number ofshares of Preferred Stock obtainable upon exercise of this Warrant shall beproportionately decreased.  Anyadjustment under this paragraph shall become effective at the close of businesson the date the subdivision or combination becomes effective.

##  

## (b)                                 Adjustment for Certain Dividends and Distributions.  In theevent the Company at any time, or from time to time after the Original IssueDate while this Warrant remains outstanding and unexpired in whole or in partshall make or issue, or fix a record date for the determination of holders of theCompany’s common stock or convertible preferred stock of any class or series orentitled to receive, a dividend or other distribution payable in additionalshares of common stock or convertible preferred stock, then and in each suchevent the Exercise Price then in effect immediately before such event shall be adjustedas of the time of such issuance or, in the event such a record date shall havebeen fixed, as of the close of business on such record date, so that theExercise Price will equal that price determined by multiplying the ExercisePrice then in effect by a fraction:

##  

## 2

## 

##  

#### (i)                                     thenumerator of which shall be the total number of shares of common stock andconvertible preferred stock issued and outstanding immediately prior to thetime of such issuance or the close of business on such record date (on anas-converted basis); and

####  

#### (ii)                                  thedenominator of which shall be the total number of shares of common stock andconvertible preferred stock issued and outstanding immediately prior to thetime of such issuance or the close of business on such record date (on anas-converted basis) plus the number of shares of common stock and convertiblepreferred stock issuable in payment of such dividend or distribution (on anas-converted basis);

####  

provided, however, that ifsuch record date shall have been fixed and such dividend is not fully paid orif such distribution is not fully made on the date fixed therefor, the ExercisePrice shall be recomputed accordingly as of the close of business on suchrecord date and thereafter the Exercise Price shall be adjusted pursuant tothis paragraph as of the time of actual payment of such dividends ordistributions.

 

## (c)                                  Adjustmentfor Reclassification, Exchange and Substitution. If at any time after theOriginal Issue Date while this Warrant remains outstanding and unexpired inwhole or in part, the Preferred Stock issuable upon exercise of this Warrant ischanged into the same or a different number of shares of any class or classes orseries of stock, this Warrant will thereafter represent the right to acquiresuch number and kind of securities as would have been issuable as a result ofexercise of this Warrant and the Exercise Price therefor shall be appropriatelyadjusted, all subject to further adjustment in this Section 2.

##  

## (d)                                 Adjustments for Other Dividends and Distributions.  In theevent the Company at any time or from time to time after the Original Issue Datewhile this Warrant remains outstanding and unexpired in whole or in part shallmake or issue, or fix a record date for the determination of holders of commonstock and convertible preferred stock entitled to receive, a dividend or otherdistribution payable in securities of the Company (other than shares of commonstock) or in cash or other property, then and in each such event provisionshall be made so that the Registered Holder shall receive upon exercise hereof,in addition to the number of shares of Preferred Stock issuable hereunder, thekind and amount of securities of the Company and/or cash and other propertywhich the Registered Holder would have been entitled to receive had thisWarrant been exercised into Preferred Stock on the date of such event and hadthe Registered Holder thereafter, during the period from the date of such eventto and including the Exercise Date, retained any such securities receivable,giving application to all adjustments called for during such period under this Section2 with respect to the rights of the Registered Holder.

##  

## (e)                                  Adjustmentfor Mergers or Reorganizations, etc. Any reorganization, recapitalization,reclassification, consolidation, merger, sale of all or substantially all ofthe Company’s assets or other transaction involving the Company in which the PreferredStock is converted into or exchanged for securities, cash or other propertywhile this Warrant remains outstanding and unexpired in whole or in part (otherthan a transaction covered by subsections 2(a), 2(b) or 2(d))is referred to herein as an “***Organic Change***”.Prior to the consummation of any such Organic Change, the Company shall makeappropriate provision (in form and substance satisfactory to the RegisteredHolders of a majority of the Warrants then remaining outstanding and unexpired)(as determined in good faith by the Board of Directors of the Company and theRegistered Holders of a majority of****the Warrantsthen remaining outstanding and unexpired) to ensure that the Registered Holdershall have the right to receive, in lieu of or in addition to (as the case maybe) such shares of Preferred Stock immediately acquirable and receivable uponexercise of this Warrant, the kind and amount of securities, cash or otherproperty as may be issued or payable with respect to or in exchange for thenumber of shares of Preferred Stock immediately acquirable and receivable uponexercise of this Warrant had such Organic Change not taken place. ** **In such case,appropriate adjustment (in form and substance satisfactory to the RegisteredHolders

##  

## 3

## 

##  

## of a majority ofthe Warrants then remaining outstanding and unexpired) (as determined in goodfaith by the Board of Directors of the Company and the Registered Holders of amajority of****the Warrants then remainingoutstanding and unexpired) shall be made with respect to the Registered Holder’srights and interests to ensure that the provisions of this Section 2shall thereafter be applicable to the Warrants (including, in the case of anyOrganic Change where the successor entity or purchasing entity is other thanthe Company, an immediate reduction to the Exercise Price to the value of the PreferredStock reflected by the terms of the Organic Change and a corresponding increasein the number of shares of Preferred Stock acquirable and receivable uponexercise of this Warrant, if the value so reflected is less than the ExercisePrice then in effect immediately prior to such Organic Change).  The Company shall not effect any reorganization,recapitalization, consolidation or merger unless, prior to the consummationthereof, the successor entity (if other than the Company) resulting from theconsolidation or merger or the entity purchasing such assets assumes by writteninstrument (in form and substance satisfactory to the Registered Holders of amajority of the Warrants then remaining outstanding and unexpired) theobligation to deliver to each Registered Holder such shares of stock,securities or assets as, in accordance with the foregoing provisions, suchholder may be entitled to acquire; provided, that any assumption shall notrelieve the Company of its obligations hereunder.

##  

## (f)                                    Intentionally Omitted.

##  

## (g)                                 OtherEvents.  If any event occurs that isconsistent with the intent of this Section 2 but not expresslyprovided for by this Section 2 (including, without limitation, thegranting of stock appreciation rights, phantom stock rights or other rightswith equity features), then the Company’s Independent Directors will make an appropriateadjustment in the Exercise Price and number of Warrant Shares subject to thisWarrant so as to carry out the intent of this Section 2; provided,however, that no such adjustment will increase the Exercise Price ordecrease the number of shares of Preferred Stock obtainable as otherwisedetermined pursuant to this Section 2.

##  

### (h)                                 Certificateas to Adjustments.  Upon theoccurrence of each adjustment or readjustment of the Exercise Price pursuant tothis Section 2, the Company at its expense shall promptly compute suchadjustment or readjustment in accordance with the terms hereof and furnish tothe Registered Holder a certificate setting forth such adjustment orreadjustment (including the kind and amount of securities, cash or otherproperty for which this Warrant shall be exercisable and the Exercise Price)and showing in detail the facts upon which such adjustment or readjustment isbased.  The Company shall, upon thewritten request at any time of the Registered Holder, promptly furnish or causeto be furnished to the Registered Holder a certificate setting forth(i) the Exercise Price then in effect and (ii) the number of sharesof Preferred Stock and the amount, if any, of other securities, cash orproperty which then would be received upon the exercise of this Warrant, andshall cause a copy of such certificate to be mailed (by first-class mail,postage prepaid) to the Registered Holder.

###  

# 3.                                       **Requirements for Transfer****.**

#  

## (a)                                  ThisWarrant and the Warrant Shares shall not be sold or transferred unless either(i) they first shall have been registered under the Act or (ii) theCompany first shall have been furnished with an opinion of legal counsel to theeffect that such sale or transfer is exempt from the registration requirementsof the Act.

##  

## (b)                                 Notwithstandingthe foregoing, no registration or opinion of counsel shall be required for(i) a transfer by a Registered Holder which is a corporation to a whollyowned subsidiary of such corporation or to a corporation owned by the sameparent entity of such corporation, a transfer by a Registered Holder which is apartnership to a partner of such partnership or a retired partner of suchpartnership or to the estate of any such partner or retired partner, or atransfer by a Registered Holder

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## 4

## 

##  

## which is a limitedliability company to a member of such limited liability company or a retiredmember or to the estate of any such member or retired member, provided that, asa condition to the Company effecting such transfer, the transferee in each caseagrees in writing to be subject to the terms of this Section 3, or(ii) a transfer made in accordance with Rule 144 under the Act.

##  

##### *(c)*                                  Each certificate representing Warrant Shares shallbear a legend substantially in the following form:

##### * *

“THESECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THESECURITIES ACT OF 1933, AS AMENDED, AND MAY NOT BE OFFERED, SOLD OR OTHERWISETRANSFERRED, PLEDGED OR HYPOTHECATED UNLESS AND UNTIL SUCH SECURITIES ARE REGISTEREDUNDER SUCH ACT OR UNLESS SOLD PURSUANT TO AN EXEMPTION THEREFROM OR AN OPINIONOF COUNSEL SATISFACTORY TO THE COMPANY IS OBTAINED TO THE EFFECT THAT SUCHREGISTRATION IS NOT REQUIRED.”

 

Theforegoing legend shall be removed from the certificates representing anyWarrant Shares, at the request of the holder thereof, at such time as theybecome eligible for resale pursuant to Rule 144(k) under the Act.

 

# 4.                                       **No Impairment****.**  TheCompany will not, by amendment of its charter or through reorganization, transferof assets, consolidation, merger, dissolution, issue or sale of securities orany other voluntary action, avoid or seek to avoid the observance orperformance of any of the terms of this Warrant, but will at all times in goodfaith assist in the carrying out of all such terms and in the taking of allsuch action as may be necessary or appropriate in order to protect the rightsof the holder of this Warrant against impairment.  Without limiting the generality of theforegoing, the Company will (a) not increase the par value of any shares of PreferredStock obtainable upon the exercise of this Warrant and (b) take all suchactions as may be necessary or appropriate in order that the Company mayvalidly and legally issue fully paid and nonassessable shares of PreferredStock upon the exercise of this Warrant.

#  

# 5.                                       **Notices of Record Date, etc****.**  In theevent:

#  

## (a)                                  theCompany shall take a record of the holders of its Preferred Stock (or otherstock or securities at the time deliverable upon the exercise of this Warrant)for the purpose of entitling or enabling them to receive any dividend or otherdistribution, or to receive any right to subscribe for or purchase any sharesof stock of any class or any other securities, or to receive any other right;or

##  

## (b)                                 ofany Organic Change; or

##  

##### *(c)*                                  of the voluntary or involuntary dissolution,liquidation or winding-up of the Company,

##### * *

then, and in each such case, the Company will mail orcause to be mailed to the Registered Holders at least ten (10)****days prior to the record date specified therein (or suchshorter period approved by a majority of the holders) and at least ten (10)****days prior to the effective date of such event specified inclause (b) or (c) hereof a notice specifying, as the case may be,(i) the record date for such dividend, distribution or

 

5

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right, and the amount and character of such dividend,distribution or right, or (ii) the effective date on which such Organic Change,dissolution, liquidation or winding-up is to take place, and the time, if anyis to be fixed, as of which the holders of record of Preferred Stock (or suchother stock or securities at the time deliverable upon the exercise of thisWarrant) shall be entitled to exchange their shares of Preferred Stock (or suchother stock or securities) for securities or other property deliverable uponsuch Organic Change, dissolution, liquidation or winding-up; provided, however,that the failure to mail such notice or any defect therein or in the mailingthereof shall not affect the validity of the corporate action required to bespecified in such notice.  Nothing hereinshall prohibit the Registered Holder from exercising this Warrant during theten (10) day period commencing on the date of such notice.

 

# 6.                                       **Reservation of Stock**.  TheCompany covenants that for the duration of the Exercise Period, the Companywill at all times reserve and keep available, from its authorized and unissued PreferredStock solely for issuance and delivery upon the exercise of this Warrant andfree of preemptive rights, such number of Warrant Shares and other securities,cash and/or property, as from time to time shall be issuable upon the exerciseof this Warrant.  The Company further covenantsthat it shall, from time to time, take all steps necessary to increase theauthorized number of shares of its Preferred Stock if at any time theauthorized number of shares of Preferred Stock remaining unissued isinsufficient to permit the exercise of this Warrant.

#  

# 7.                                       **Issuance Upon Exercise**.  Allshares of Preferred Stock issuable upon exercise of this Warrant, when and ifissued for the consideration stated herein and in accordance with the termshereof, will be duly and validly issued, fully paid and nonassessable and willbe free of restrictions on transfer, other than restrictions on transfer underany agreement between the Holder and the Company and under applicable state andfederal securities laws, and will be free from all taxes, liens and charges inrespect of the issue thereof (other than taxes in respect of any transferoccurring contemporaneously or otherwise specified herein).  The Company shall take all such actions asmay be necessary to ensure that all such shares of Preferred Stock may be soissued without violation of any applicable law or governmental regulation orany requirements of any domestic stock exchange upon which shares of PreferredStock may be listed (except for official notice of issuance which shall beimmediately delivered by the Company upon each such issuance).

#  

# 8.                                       **Exchange of Warrants**.  Upon thesurrender by the Registered Holder, properly endorsed, to the Company at theprincipal office of the Company, the Company will, subject to the provisions ofSection 3 hereof, issue and deliver to or upon the order of such Holder,at the Company’s expense, a new Warrant or Warrants of like tenor, in the nameof the Registered Holder or as the Registered Holder may direct, calling in theaggregate on the face or faces thereof for the number of shares of Preferred Stock(or other securities, cash and/or property) then issuable upon exercise of thisWarrant.

#  

# 9.                                       **Replacement of Warrants**.  Uponreceipt of evidence reasonably satisfactory to the Company (an affidavit of aRegistered Holder shall be satisfactory) of the ownership and loss, theft,destruction or mutilation of any certificate evidencing this Warrant and in thecase of loss, theft or destruction, upon delivery of an unsecured indemnityagreement of the Registered Holder in form reasonably satisfactory to theCompany, or in the case of mutilation, upon surrender and cancellation of suchcertificate, the Company shall, at its expense, execute and deliver in lieu ofsuch certificate, a new certificate of like kind representing the same rightsrepresented by such lost, stolen, destroyed or mutilated certificate and datedthe date of such lost, stolen, destroyed or mutilated certificate.

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# 6

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# 10.                                 **Transfers, etc****.**

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## (a)                                  TheCompany shall maintain a register at its principal executive office containingthe name and address of the Registered Holder of this Warrant.  The Registered Holder may change its or hisaddress as shown on the warrant register by written notice to the Company requestingsuch change.

##  

## (b)                                 Subjectto the provisions of Section 3 hereof, this Warrant and all rightshereunder are transferable, in whole or in part, upon surrender of this Warrantwith a properly executed assignment (in the form of Exhibit Bhereto) at the principal executive office of the Company.

##  

## (c)                                  Untilany transfer of this Warrant is made in the warrant register, the Company maytreat the Registered Holder as the absolute owner hereof for all purposes; provided,however, that if and when this Warrant is properly assigned in blank,the Company may (but shall not be obligated to) treat the bearer hereof as theabsolute owner hereof for all purposes, notwithstanding any notice to thecontrary.

##  

## (d)                                 TheCompany shall not close its books against the transfer of this Warrant or anyshare of Preferred Stock issued or issuable upon the exercise of this Warrantin any manner which interferes with the timely exercise of this Warrant.  The Company shall from time to time take allsuch action as may be necessary to ensure that the par value per share of theunissued Preferred Stock acquirable upon exercisable of this Warrant is at alltimes equal to or less than the Exercise Price then in effect.

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# 11.                                 **Mailing of Notices, etc**. Any notice, request, demand or othercommunication required or permitted to be given to a party pursuant to theprovisions of this Agreement will be in writing and will be effective anddeemed given under this Agreement on the earliest of: (a) the date of personaldelivery, (b) the date of transmission by facsimile, with confirmed transmissionand receipt, (c) two (2) days after deposit with a nationally-recognizedcourier or overnight service such as Federal Express, or (d) five (5) daysafter mailing via certified mail, return receipt requested.  All notices not delivered personally or byfacsimile will be sent with postage and other charges prepaid and properlyaddressed to the party to be notified at the address set forth for such party:

#  

Ifto Registered Holder:

 

MedcareInvestment Fund III, Ltd.

8122Datapoint Drive, Suite 1000

SanAntonio, Texas  78229

Fax:(210) 614-5841

Attn:Tim Lyles

With a copy to (whichdoes not constitute notice):

 

Akin,Gump, Strauss, Hauer & Feld, L.L.P.

300Convent Street

Suite1500San Antonio, Texas 78205Fax:  (210) 224-2035Attn:  Alan Schoenbaum

 

7

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RefocusGroup, Inc.

10300North Central Expressway, Suite 104

Dallas,Texas  75231

Fax:  (214) 368-0332

Attn:  President

 

Witha copy to (which does not constitute notice):

 

Jenkens& Gilchrist, P.C.

1445Ross Avenue, Suite 3200

Dallas,Texas  75202

Phone:  (214) 855-4500

Fax:  (214) 855-4300

Attn:  Robert W. Dockery, Esq.

 

Any party hereto (andsuch party’s permitted assigns) may change such party’s address for receipt offuture notices hereunder by giving written notice to the Company and the otherparties hereto.

 

# 12.                                 **No Rights or Liabilities asStockholder**.  Subject to the provisions of Sections 2and 6 hereof, until the exercise of this Warrant, the Registered Holdershall be entitled to notice of all stockholders meetings as required to be madeto all stockholders in accordance with the Company’s bylaws, but except asotherwise required by applicable law, shall not be entitled to vote on anymatters submitted to the stockholders for a vote.  In the event (a) the Company effects asplit of the Preferred Stock by means of a stock dividend and the ExercisePrice of and the number of Warrant Shares are adjusted as of the date of thedistribution of the dividend (rather than as of the record date for such dividend),and (b) the Registered Holder exercises this Warrant between the recorddate and the distribution date for such stock dividend, the Registered Holdershall be entitled to receive, on the distribution date, the stock dividend withrespect to the shares of Preferred Stock acquired upon such exercise,notwithstanding the fact that such shares were not outstanding as of the closeof business on the record date for such stock dividend.

#  

# 13.                                 **Amendment or Waiver**.  Any termof this Warrant may be amended or waived upon the written consent of theCompany and the holders of Company Warrants representing at least 66% of thenumber of shares of Preferred Stock then subject to outstanding CompanyWarrants; provided that any such amendment or waiver must apply to allCompany Warrants then outstanding; and providedfurther that thenumber of Warrant Shares subject to this Warrant, the Exercise Price of thisWarrant and the number of shares or class of stock obtainable upon exercise ofthis Warrant may not be amended, and the right to exercise this Warrant may notbe waived, without the written consent of the holder of this Warrant (it beingagreed that an amendment to or waiver under any of the provisions of Section2 of this Warrant shall not be considered an amendment of the number ofWarrant Shares or the Exercise Price). The Company shall promptly give notice to all holders of the CompanyWarrants of any amendments effected in accordance with this Section 13.  No special consideration may be given to anyholder as inducement to waive or amend this Warrant unless such considerationis given equally and ratably to all holders.

#  

# 14.                                 **Successors and Assigns**.  ThisWarrant shall be binding upon and inure to the benefit of the Registered Ownerand its assigns, and shall be binding upon any entity succeeding to the Companyby consolidation, merger or acquisition of all or substantially all of theCompany’s assets.  The Company may notassign this Warrant or any rights or obligations hereunder without the priorwritten consent of the Registered Holder. The Registered Holder may assign (in whole or in part) this Warrantwithout the Company’s prior written consent, in which case the Company shallsubdivide the Warrant, as appropriate.

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# 8

# 

#  

# 15.                                 **Remedies**.    In theevent of a breach by the Company of any of their obligations under thisWarrant, the Registered Holder, in addition to being entitled to exercise allrights granted by law, including recovery of damages, will be entitled tospecific performance of its rights under this Warrant.  The Company agrees that monetary damageswould not provide adequate compensation for any losses incurred by reason ofits breach of any of the provisions of this Warrant and hereby further agrees that,in the event of any action for specific performance in respect of such breach,it shall waive the defense that a remedy at law would be adequate.

#  

# 16.                                 **Section Headings**.  Thesection headings in this Warrant are for the convenience of the parties and inno way alter, modify, amend, limit or restrict the contractual obligations ofthe parties.

#  

# 17.                                 **Counterparts****. **This Warrant may beexecuted in two or more counterparts, each of which will be deemed an originalbut all of which together will constitute one and the same instrument.

#  

# 18.                                 **Severability****. **The provisions of thisWarrant will be deemed severable and the invalidity or unenforceability of anyprovision hereof will not affect the validity or enforceability of the otherprovisions hereof; provided that if any provision of this Warrant, as appliedto any party or to any circumstance, is adjudged by a court, governmental body****not to be enforceable in accordance with its terms, theparties agree that the court, governmental body****makingsuch determination will have the power to modify the provision in a mannerconsistent with its objectives such that it is enforceable, and/or to deletespecific words or phrases, and in its reduced form, such provision will then beenforceable and will be enforced.

#  

# 19.                                 **Third Parties****.**Nothing in this Warrant, express or implied, isintended to confer upon any person other than the parties hereto and theirsuccessors and assigns, any rights or remedies under or by reason of thisWarrant.

#  

# 20.                                 **Governing Law**. The laws of the State of Texas shall govern theconstruction of any contracts, without reference to principles of conflict oflaw, provided that the Delaware General Corporate Law will apply to all mattersof corporate law.

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# **[SIGNATURE PAGE FOLLOWS]**

#  

# 9

# 

 

**Refocus Group, Inc.**

** **

**Series A-3 Convertible StockPurchase Warrant**

** **

**Signature Page**

** **

INWITNESS WHEREOF, the Company has caused this Warrant to be signed and attestedby its duly authorized officers under its corporate seal and to be dated theDate of Issuance hereof.

 

 
|            | REFOCUS GROUP,  INC.           |
|-----------------|--------------------------------|
|            |                           |
|            |                           |
|            | By:                            | /s/ Terence A.  Walts |   |
|            | Name: Terence A.  Walts        |
|            | Title:  President and CEO |
|            |                           |
| Attest:         |                           |
|            |                           |
|            |                           |
| /s/ Mark A. Cox |                           |   |
| Secretary       |                           |
|                 |                                |  |  |  |  |

 

10

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**EXHIBIT A**

 

**PURCHASE FORM**

 
| To:    | Refocus  Group, Inc.                       | Dated:  |   |
|--------|--------------------------------------------|--------------|--------|
|   | 10300  North Central Expressway, Suite 104 |         |
|   | Dallas,  Texas  75231                 |         |
|   | Fax:  (214) 368-0332                  |         |
|   | Attn:  President                      |         |

 

The undersigned, pursuant to the provisions set forthin the attached Warrant, hereby irrevocably elects to purchase        shares of the Preferred Stock covered by such Warrant.

 

The undersigned herewith makes payment of the fullexercise price for such shares at the price per share provided for in suchWarrant, which is $         in lawfulmoney of the United States.

 
|   | MEDCARE  INVESTMENT FUND III, LTD. |
|--------|------------------------------------|
|   |                               |
|   | By:                                | MEDCARE  GP CORP, INC., a Texas |
|   |                               | corporation,  General Partner |
|   |                               |
|   | By:                                |   |   |
|   |                               | Thomas W. Lyles,  Jr., President |   |
|   |                               |
|   | Address:                           | 8122  Datapoint Drive, Suite 1000 |
|   |                               | San  Antonio, Texas  78229 |
|   |                               | Fax:  (210) 614-5841 |
|        |                                    |  |  |  |

 

A1

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**EXHIBIT B**

 

**ASSIGNMENT FORM**

 

FOR VALUE RECEIVED, Medcare Investment Fund III, Ltd. herebysells, assigns and transfers all of the rights of the undersigned under the attachedWarrant with respect to the number of shares of Preferred Stock covered therebyset forth below, unto:

 

 
| **Name of Assignee** | ** ** | **Address** | ** ** | **No. of  Shares** | ** ** |
|----------------------|------------|-------------|------------|--------------------|------------|
|                 |       |        |       |               |       |
|                 |       |        |       |               |       |
|                 |       |        |       |               |       |

 

 
| Dated:                |   |                                                          | MEDCARE INVESTMENT FUND III, LTD. |
|-----------------------|--------|---------------------------------------------------------------|-----------------------------------|
|                  |   |
|                  | By:    | MEDCARE  GP CORP, INC., a Texas  corporation, General Partner |
|                  |   |
|                  |   |
|                  |   |
|                  | By:    |                                                          |                              |
|                  |   | Thomas W. Lyles,  Jr., President                              |
|                  |   |
|                  |   |
| Signature Guaranteed: |   |
|                  |   |
| By:                   |   |                                                          |                              |
|                       |        |                                                               |                                   |  |  |  |

 

The signature should be guaranteed by an eligibleguarantor institution (banks, stockbrokers, savings and loan associations andcredit unions with membership in an approved signature guarantee medallionprogram) pursuant to Rule 17Ad-15 under the Securities Exchange Act of1934.

 

B1

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