THIS WARRANT AND ANY SHARES  ACQUIRED UPON THE EXERCISE OF THIS WARRANT HAVE NOT
BEEN  REGISTERED  UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE  "SECURITIES
ACT"), OR APPLICABLE STATE SECURITIES LAWS. NEITHER THIS WARRANT NOR ANY OF SUCH
SHARES MAY BE SOLD,  ASSIGNED,  TRANSFERRED,  OR  OTHERWISE  DISPOSED  OF IN THE
ABSENCE OF  REGISTRATION  UNDER THE  SECURITIES ACT AND UNDER  APPLICABLE  STATE
SECURITIES OR BLUE SKY LAWS OR EXEMPTIONS FROM SUCH  REGISTRATION.  THIS WARRANT
MAY NOT BE SOLD, ASSIGNED, TRANSFERRED, OR OTHERWISE DISPOSED OF EXCEPT UPON THE
CONDITIONS  SPECIFIED IN THIS WARRANT,  AND NO SALE,  ASSIGNMENT,  TRANSFER,  OR
OTHER  DISPOSITION OF THIS WARRANT SHALL BE VALID OR EFFECTIVE  UNLESS AND UNTIL
THERE SHALL HAVE BEEN COMPLIANCE WITH SUCH CONDITIONS.

                     Dated: Effective as of February 7, 2001

                                     WARRANT

                To purchase up to 100,000 shares of Common Stock

                        PARADIGM MEDICAL INDUSTRIES, INC.

                            Expiring February 7, 2006

         THIS IS TO CERTIFY THAT, for value received, KSH INVESTMENT GROUP, INC.
(the "Holder"), is entitled, subject to certain conditions set forth in Sections
1.01 and 1.02 hereof,  to purchase from  PARADIGM  MEDICAL  INDUSTRIES,  INC., a
Delaware  corporation  (the  "Company"),  at the Company's  principal  executive
office, at the exercise price of $4.00 per share ("Exercise  Price"),  up to the
number of shares of Common Stock, $.001, par value per share (the "Shares"),  of
the  Company  shown  above,  all  subject to  adjustment  and upon the terms and
conditions as hereinafter  provided,  and is entitled also to exercise the other
appurtenant rights, powers and privileges hereinafter described.

         Certain terms used in this Warrant are defined in Article IV hereof.

                                    ARTICLE I

                               METHOD OF EXERCISE

         1.01. Time of Exercise.  Subject to the provisions of Sections 1.02 and
1.03  hereof,  this  Warrant may be  exercised at any time and from time to time
after 9:00 a.m.  Mountain  Standard Time on the first day immediately  following
one year from the date first written above and prior to the Expiration Time.



<PAGE>



                                       -2-
G:\WAR-207M.PMI.wpd
         1.02. Method of Exercise. To exercise this Warrant in whole or in part,
the Holder shall deliver to the Company,  at the Company's  principal  executive
office (a) this  Warrant,  (b) a written  notice of such  Holder's  election  to
exercise  this  Warrant,  which notice shall  specify the number of Shares to be
purchased,  but in no event less than 1,000  shares,  the  denominations  of the
share  certificate or  certificates  desired and the name or names in which such
certificates  are to be  registered,  and (c) payment of the Exercise Price with
respect to such shares.  Such payment may be made,  at the option of the Holder,
in cash, by certified or bank cashier's check, money order or wire transfer,  in
the manner  specified in the next succeeding  paragraph,  or in any other manner
consented to in writing by the Company, or any combination thereof.

         The Company  shall,  as promptly as  practicable  after  receipt of the
items  required by the preceding  paragraphs  of this Section 1.02,  execute and
deliver or cause to be executed and delivered, in accordance with such notice, a
certificate  or  certificates   representing  the  aggregate  number  of  Shares
specified in such notice.  The share  certificate or  certificates  so delivered
shall be in such denominations as shall be specified in such notice and shall be
issued  in the  name of the  Holder  or,  provided,  in an  opinion  of  counsel
reasonably  acceptable  to the Company,  the  following  is permitted  under the
Securities Act and applicable state securities laws, such other name as shall be
designated in such notice.  Such certificate or certificates  shall be deemed to
have been issued,  and such Holder or Holders or any other person so  designated
to be named  therein shall be deemed for all purposes to have become a Holder of
record of such shares, as of the date the  aforementioned  notice is received by
the Company. If this Warrant shall have been exercised only in part, the Company
shall,  at the time of delivery of the certificate or  certificates,  deliver to
the Holder a new Warrant  evidencing the right to purchase the remaining  Shares
called for by this  Warrant,  which new Warrant  shall in all other  respects be
identical  with this  Warrant,  or, at the  request of the  Holder,  appropriate
notations  may be made on this  Warrant  which  shall  then be  returned  to the
Holder.  The Company shall pay all expenses,  taxes and other charges payable in
connection with the preparation, issuance and delivery of share certificates and
new  Warrants,  except that,  if share  certificates  or new  Warrants  shall be
registered  in a name  or  names  other  than  the  name  of the  Holder,  funds
sufficient  to pay all  transfer  taxes,  if any,  payable  as a result  of such
transfer   shall  be  paid  by  the  Holder  at  the  time  of  delivering   the
aforementioned  notice of exercise or promptly upon receipt of a written request
of the Company for payment.

         1.03. Shares To Be Fully Paid and Nonassessable. All Shares issued upon
the  exercise  of  this  Warrant  shall  be  validly  issued,   fully  paid  and
nonassessable  and, if the Shares are then  eligible for listing on any national
securities  exchanges  (as defined in the  Exchange  Act),  or quoted on Nasdaq,
shall be duly listed or quoted thereon or application made therefor, as the case
may be.

         1.04.  No  Fractional  Shares To Be Issued.  The  Company  shall not be
required to issue  fractions  of Shares upon  exercise of this  Warrant.  If any
fractions of a share would, but for this Section,  be issuable upon any exercise
of this Warrant,  in lieu of such fractional  share the Company shall pay to the
holder,  in cash,  an amount equal to the same fraction of the Closing Price per
Share for the Trading Day immediately prior to the date of such exercise.

         1.05. Share Legend. Each certificate for Shares issued upon exercise of
this Warrant, unless at the time of exercise such shares are registered under
the Securities Act, shall bear a legend substantially as follows:



<PAGE>


                  THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT
         OF 1933, AS AMENDED,  OR APPLICABLE  STATE SECURITIES LAWS, AND MAY NOT
         BE  SOLD,  PLEDGED  OR  OTHERWISE   TRANSFERRED  WITHOUT  AN  EFFECTIVE
         REGISTRATION  STATEMENT UNDER SUCH ACT OR PURSUANT TO AN EXEMPTION FROM
         THE  REGISTRATION   REQUIREMENTS  OF  SUCH  ACT  AND  APPLICABLE  STATE
         SECURITIES  LAWS,  SUPPORTED  BY  AN  OPINION  OF  COUNSEL,  REASONABLY
         SATISFACTORY TO THE COMPANY AND ITS COUNSEL,  THAT SUCH REGISTRATION IS
         NOT REQUIRED.

         Any certificate  issued at any time in exchange or substitution for any
certificate bearing such legend (except a new certificate issued upon completion
of  a  public  distribution  pursuant  to a  registration  statement  under  the
Securities  Act) shall also bear such legend  unless,  in the opinion of counsel
reasonably acceptable to the Company, the securities represented thereby need no
longer be subject to restrictions on resale under the Securities Act.

                                   ARTICLE II

                      REPLACEMENTS OF WARRANT CERTIFICATES

         2.01. Loss, Theft or Destruction of Warrant Certificates.  Upon receipt
of evidence  satisfactory  to the  Company of the loss,  theft,  destruction  or
mutilation  of any  Warrant  and,  in  the  case  of any  such  loss,  theft  or
destruction,  upon receipt of indemnity or security satisfactory to the Company,
or, in the case of any such  mutilation,  upon surrender and cancellation of the
Warrant,  the  Company  will make and  deliver,  in lieu of such  lost,  stolen,
destroyed or mutilated Warrant, a new Warrant of like tenor and representing the
right to purchase the same aggregate number of Shares.

         2.02.  Change of Principal  Executive  Office. In the event the Company
shall change the address of its principal  executive  office,  the Company shall
give the holder of this Warrant notice of any such change.

                                   ARTICLE III

                             ANTIDILUTION PROVISIONS

         3.01 Adjustments Generally. The Exercise Price and the number of Shares
(or other  securities or property)  issuable upon exercise of this Warrant shall
be  subject  to  adjustment  from time to time upon the  occurrence  of  certain
events, as provided in this Article III.



<PAGE>


         3.02 Common Stock  Reorganization.  If the Company shall  subdivide its
outstanding  shares of Common Stock, $.001 par value per share ("Common Stock"),
into a greater number of shares or consolidate its outstanding  shares of Common
Stock into a smaller  number of shares  (any such event  being  called a "Common
Stock Reorganization"), then (a) the Exercise Price shall be adjusted, effective
immediately after the record date at which the holders of shares of Common Stock
are  determined  for  purposes of such Common Stock  Reorganization,  to a price
determined by multiplying the Exercise Price in effect immediately prior to such
record date by a fraction,  the numerator of which shall be the number of shares
of Common Stock  outstanding  on such record date before  giving  effect to such
Common Stock  Reorganization and the denominator of which shall be the number of
shares of Common  Stock  outstanding  after  giving  effect to such Common Stock
Reorganization,  and (b) the number of Shares  subject to purchase upon exercise
of this  Warrant  shall  be  adjusted,  effective  at  such  time,  to a  number
determined by multiplying the number of Shares subject to purchase upon exercise
of this  Warrant  immediately  before  such  Common  Stock  Reorganization  by a
fraction,  the numerator of which shall be the number of shares then outstanding
after giving effect to such Common Stock  Reorganization  and the denominator of
which  shall be the  number of shares of Common  Stock  outstanding  immediately
before such Common Stock Reorganization.

         3.03 Special Dividends. If the Company shall issue or distribute to all
or   substantially   all  holders  of  shares  of  Common  Stock   evidences  of
indebtedness,  any other  securities  of the Company,  or any cash,  property or
other assets,  and if such issuance or  distribution  does not constitute a cash
dividend  or  distribution  out of  surplus  or net  profits  legally  available
therefor,  or a Common Stock  Reorganization  (any such nonexcluded  event being
herein  called a "Special  Dividend"),  the  Exercise  Price shall be  adjusted,
effective  immediately  after the record  date at which the holders of shares of
Common Stock are  determined for purposes of such Special  Dividend,  to a price
determined by multiplying  the Exercise Price then in effect by a fraction,  the
numerator  of which shall be the Market  Price per share of Common Stock on such
record date less the then fair market value (as  reasonably  determined  in good
faith  by  the  Board  of  Directors  of  the  Company)  of  the   evidences  of
indebtedness,  securities or property or other assets issued or  distributed  in
such  Special  Dividend  with  respect  to one  share of Common  Stock,  and the
denominator  of which  shall be the Closing  Price per share of Common  Stock on
such record date.

         3.04 Capital  Reorganizations.  If there shall be any  consolidation or
merger to which the Company is a party,  other than a consolidation  or a merger
in which the Company is a  continuing  corporation  and which does not result in
any  reclassification of, or change (other than a Common Stock Reorganization or
a change in par value) in,  outstanding  shares of Common Stock,  or any sale or
conveyance of the property of the Company as an entirety or  substantially as an
entirety  (any  such  event  being  called  a  "Capital  Reorganization"),  then
effective  upon the effective  date of such Capital  Reorganization,  the Holder
shall have the right to purchase,  upon exercise of this  Warrant,  the kind and
amount of shares of stock and other  securities  and property  (including  cash)
which the Holder  would have owned or have been  entitled to receive  after such
Capital  Reorganization if this Warrant had been exercised  immediately prior to
such  Capital   Reorganization.   As  a  condition  to  effecting   any  Capital
Reorganization,  the Company or the successor or surviving  corporation,  as the
case may be,  shall  execute and deliver to each Holder an  agreement  as to the
Holders' rights in accordance  with this Section 3.04,  providing for subsequent
adjustments  as  nearly  equivalent  as may be  practicable  to the  adjustments
provided  for in this Article  III.  The  provisions  of this Section 3.04 shall
similarly apply to successive Capital Reorganizations.



<PAGE>


         3.05.  Certain  Other  Events.  If any  event  occurs  as to which  the
foregoing  provisions  of this  Article III are not strictly  applicable  or, if
strictly  applicable,  would  not,  in the good faith  judgment  of the Board of
Directors of the Company,  fairly protect the purchase rights of the Warrants in
accordance  with the essential  intent and principles of such  provisions,  then
such Board shall make such adjustments in the application of such provisions, in
accordance  with such essential  intent and  principles,  as shall be reasonably
necessary,  in the good faith  opinion of such Board,  to protect such  purchase
rights as aforesaid,  but in no event shall any such  adjustment have the effect
of increasing  the Exercise  Price or decreasing the number of Shares subject to
purchase upon exercise of this Warrant.

         3.06.  Adjustment Rules.
                ----------------

                  (a) Any adjustments pursuant to this Article III shall be made
successively whenever an event referred to therein shall occur.

                  (b) If the Company  shall set a record date to  determine  the
holders of shares of Common Stock for purposes of a Common Stock  Reorganization
or Capital  Reorganization,  and shall  legally  abandon  such  action  prior to
effecting such action, then no adjustment shall be made pursuant to this Article
III in respect of such action.

                  (c) All  calculations  under this Article III shall be made to
the nearest cent or to the nearest one  hundredth  (1/100th) of a share,  as the
case may be.  Notwithstanding any provision of this Article III to the contrary,
no  adjustment  in the  Exercise  Price  shall  be  made if the  amount  of such
adjustment  would be less  than  $0.05,  but any such  amount  shall be  carried
forward and an adjustment  with respect thereto shall be made at the time of and
together with any subsequent adjustment which, together with such amount and any
other amount or amounts so carried forward, shall aggregate $0.05 or more.

                  (d) In any case in which the  provisions  of this  Article III
shall  require that an adjustment  shall become  effective  immediately  after a
record date for an event,  the Company  may defer until the  occurrence  of such
event (i) issuing to the holder of any Warrant  exercised after such record date
and before the  occurrence of such event the  additional  shares of Common Stock
issuable upon such conversion by reason of the adjustment required by such event
over and above the Shares  issuable upon such  exercise  before giving effect to
such  adjustment  and (ii) paying to such holder any amount of cash in lieu of a
fractional  share of Common Stock  pursuant to Section  1.04;  provided that the
Company  upon  request  shall  deliver  to  such  holder  a due  bill  or  other
appropriate   instrument   evidencing  such  holder's  rights  to  receive  such
additional  shares,  and such cash,  upon the occurrence of the event  requiring
such adjustment.

         3.07  Proceedings  Prior  to  Any  Action  Requiring  Adjustment.  As a
condition precedent to the taking of any action that would require an adjustment
pursuant to this  Article  III,  the Company  shall take any action which may be
necessary in order that the Company may thereafter  validly and legally issue as
fully paid and nonassessable all Shares that the Holders are entitled to receive
upon exercise of this Warrant.



<PAGE>


         3.08 Statement Regarding Adjustment. Whenever the Exercise Price or the
number of shares  received  upon  exercise of the Warrants  shall be adjusted as
provided in this Article III, the Company shall forthwith file, at the office of
any transfer agent for the Warrants and at the principal executive office of the
Company,  a statement  showing in detail the facts requiring such adjustment and
the  Exercise  Price and the  number of shares  received  upon  exercise  of the
Warrants  that shall be in effect after such  adjustment,  and the Company shall
also cause a copy of such  statement  to be sent by mail,  first  class  postage
prepaid,  to each Holder,  at its address  appearing on the  Company's  records.
Where appropriate, such copy may be given in advance and may be included as part
of a notice  required to be mailed  under the  provisions  of this  Article III.
Failure  to give such  notice,  or any  defect  therein,  shall not  affect  the
legality or validity of any such action.

         3.09 Notice to Holders.  In the event the Company shall propose to take
any action of the type  described in this Article III (but only if the action of
the type  described  in this Article III would  result in an  adjustment  in the
Exercise Price or the number of shares  received upon exercise of the Warrants),
or to declare any cash dividends or  distribution  out of surplus or net profits
legally available therefor,  the Company shall give notice to each Holder in the
manner set forth in Section 3.08, which notice shall specify the record date, if
any,  with  respect to any such  action and the  approximate  date on which such
action is to take  place.  Such  notice  shall  also set forth  such  facts with
respect thereto as shall be reasonably  necessary to indicate the effect of such
action (to the extent  such  effect may be known at the date of such  notice) on
the Exercise Price and the number,  kind or class of shares or other  securities
or property which shall be  deliverable  or  purchasable  upon the occurrence of
such action or  deliverable  upon exercise of the  Warrants.  In the case of any
action that would  require  the fixing of a record  date,  such notice  shall be
given at least 10 days  prior  to the date so  fixed,  and in case of all  other
action,  such notice shall be given at least 15 days prior to the taking of such
proposed action.  Failure to give such notice, or any defect therein,  shall not
affect the legality or validity of any such action.

                                   ARTICLE IV

                                   DEFINITIONS

         The  following  terms,  as used in this  Warrant,  have  the  following
respective meanings:

         "Capital  Reorganization"  shall have the  meaning set forth in Section
3.04 hereof.

         "Closing  Price" on any day means (a) if the Common  Stock is listed or
admitted for trading on a national securities exchange,  the reported last sales
price or, if no such  reported  sale  occurs on such  day,  the  average  of the
closing bid and asked prices on such day, in each case on the principal national
securities  exchange on which the Common Stock is listed or admitted to trading,
(b) if the Common  Stock is not listed or  admitted  to trading on any  national
securities  exchange,  the average of the  closing  bid and asked  prices in the
over-the-counter  market on such day as  reported  by  Nasdaq or any  comparable
system or, if not so reported, as reported by any New York Stock Exchange member
firm selected by the Company for such purpose or (c) if no such  quotations  are
available  on such day,  the fair market  value of one share of Common  Stock on
such day as determined in good faith by the Board of Directors of the Company.

         "Common Stock" shall have the meaning set forth in Section 3.02 hereof.

         "Common  Stock  Reorganization"  shall  have the  meaning  set forth in
Section 3.02 hereof.


<PAGE>


         "Company"  shall have the meaning set forth in the first  paragraph  of
this Warrant.

         "Demand  Registration"  shall  have the  meaning  set forth in  Section
6.01(a).

         "Exchange Act" means the  Securities  Exchange Act of 1934, as amended,
and any similar or successor  Federal statute,  and the rules and regulations of
the Securities and Exchange Commission (or its successor) thereunder, all as the
same shall be in effect at the time.

         "Exercise Price" means $4.00 per share.

         "Expiration Time" means 5:00 p.m. Mountain Standard Time on February 7,
2006.

         "Holder"  shall have the  meaning set forth in the first  paragraph  of
this Warrant and "Holders"  shall include any and all  successors and assigns of
the initial Holder with respect to this Warrant.

         "Market Price" on any day means the average of the daily Closing Prices
of a share of Common  Stock for the 20  consecutive  Trading  Days ending on the
most recent Trading Day for which a closing price is available and if the shares
of Common Stock are not then publicly traded Market Price shall be determined in
good faith by the Board of Directors of the Company.

         "NASD" means The National Association of Securities Dealers, Inc.

         "Nasdaq"  means The National  Association of Securities  Dealers,  Inc.
Automated Quotation System.

         "Permitted  Interruption"  shall have the  meaning set forth in Section
6.01(e).

         "Prospectus"   means  the  prospectus   included  in  any  Registration
Statement   (including,   without   limitation,   a  prospectus  that  discloses
information  previously  omitted from a prospectus filed as part of an effective
registration  statement in reliance upon Rule 430A),  as amended or supplemented
by any  prospectus  supplement,  relating  to the terms of the  offering  of any
portion of the Registrable Securities covered by such Registration Statement and
all  other  amendments  and  supplements  to  the   Registration   Statement  or
prospectus,  as the case may be, including  post-effective  amendments,  and all
material  incorporated  or  deemed  to be  incorporated  by  reference  in  such
prospectus.

         "Registrable  Securities"  means the Shares  issuable  upon exercise of
this Warrant.

         "Registration  Statement"  means  any  registration  statement  of  the
Company that covers any of the Registrable Securities pursuant to the provisions
of this Warrant,  including the  Prospectus,  amendments and supplements to such
registration  statement  or  the  Prospectus,  as the  case  may  be,  including
post-effective amendments, all exhibits, and all material incorporated or deemed
to be incorporated by reference in such registration statement.



<PAGE>


         "Securities Act" means the Securities Act of 1933, as amended,  and any
similar or  successor  Federal  statute,  and the rules and  regulations  of the
Securities and Exchange  Commission (or its  successor)  thereunder,  all as the
same shall be in effect at the time.

         "Shares"  shall have the  meaning set forth in the first  paragraph  of
this Warrant, subject to adjustment pursuant to Article III.

         "Trading  Day" means (a) if the Common  Stock is listed or  admitted to
trading on a national securities exchange, a day on which the principal national
securities  exchange on which the Common  Stock is listed or admitted to trading
is open for  business or (b) if the Common Stock is not so listed or admitted to
trading,  a day on which any New York  Stock  Exchange  member  firm is open for
business.

         "Warrant"  and  "Warrants"  shall mean this  warrant  and any  warrants
issued upon the partial exercise of this warrant.

                                    ARTICLE V

                     REDEMPTION AND CANCELLATION OF WARRANTS

         5.01  Redemption  of Warrants.  The Warrants are not  redeemable by the
Company  and the  Company  has no right to  purchase  or  otherwise  acquire the
Warrants.

         5.02  Cancellation  of Warrants.  The Company  shall cancel any Warrant
surrendered for transfer, exchange or exercise.

                                   ARTICLE VI

                               REGISTRATION RIGHTS

         6.01  Demand  Registration.  (a) Subject to the  provisions  of Section
6.01(b) hereof and during the period commencing on the day immediately following
the date first written above and expiring at the Expiration Time, the Holder may
make a written request to the Company for  registration  under and in accordance
with the  provisions of the Securities Act of all, and not less than all, of the
Registrable  Securities held by the Holder(a "Demand  Registration").  Except in
the  event  that  the  Company  is  advised  by  counsel  that the  filing  of a
Registration  Statement  would not be permitted  under the Securities Act due to
the Company's not having current audited  financial  statements,  in which event
within  five (5)  business  days  after  completion  of such  audited  financial
statements the Company shall file such Registration Statement,  the Company will
file as soon as practicable,  and in any event within sixty (60) days of receipt
of such  request,  and to use its best  efforts to cause to become  effective as
soon as practicable,  the Registration  Statement,  subject to the terms of this
Warrant.



<PAGE>


                  (b) Number of  Registrations.  The Holder is  entitled  to one
Demand Registration. The Holder agrees that if the Company determines that there
are material  developments  which the Company determines require the filing of a
post-effective  amendment to the Registration Statement,  then the Holder agrees
to refrain  from selling any  Registrable  Securities  until the  post-effective
amendment is declared effective.  The Company agrees to file and attempt to have
declared  effective  such  post-effective  amendment  as soon as  possible.  The
Company  shall not be deemed to have effected a Demand  Registration  unless and
until such Demand Registration is declared effective.

                  (c) Reduction  Size of Demand  Registrations.  If the managing
underwriter  or  underwriters  of a Demand  Registration  advise the  Company in
writing  that in its or their  opinion the  principal  amount  and/or  number of
Registrable  Securities proposed to be sold in such Demand Registration  exceeds
the principal  amount and/or number of Registrable  Securities which can be sold
in such offering  without an adverse effect on such  offering,  the Company will
include in such registration only the number of Registrable Securities which, in
the opinion of such underwriter or  underwriters,  can be sold. The Holder shall
be entitled to an additional Demand Registration hereunder (with all expenses of
registration  relating to such additional Demand Registration to be borne by the
Company) on the same terms and conditions as would have applied had such earlier
Demand  Registration not been made in the event that all Registrable  Securities
requested to be included in the Demand Registration are not so included.

                  (d)  Selection  of  Underwriters  and  Counsel.  If any Demand
Registration  is  an  underwritten   offering  with  respect  to  any  issue  of
Registrable Securities,  the Holder will select the investment banker or bankers
and manager or managers to  administer  the  offering and counsel to the Holder;
provided,  that such investment bankers and managers be of nationally recognized
standing and reasonably  satisfactory  to the Company.  The Holder shall pay all
underwriting  discounts and commissions of such investment banker or bankers and
manager or managers.

                  (e)  Notwithstanding the provisions of Section 6.01(a) hereof,
the Company  shall have the right at any time on one  occasion in respect of any
Registration  Statement to delay the filing of such Registration Statement or to
withdraw  such  Registration  Statement  (or  notify the Holder not to sell such
Registrable Securities pursuant to such Registration Statement) after the filing
and the  effective  date  thereof  (each  such  delay,  withdrawal  or notice is
referred to herein as a "Permitted  Interruption")  for a  reasonable  period of
time (not to exceed 45 days in any 12-month  period in any such case,  which may
not thereafter be extended) if, at such time: (i) the Holder is in possession of
material non-public  information in respect of the Company;  (ii) the Company is
engaged in any  active  program  for  repurchase  of shares of Common  Stock and
furnishes a  certificate  to that  effect to the  Holder;  or (iii) the Board of
Directors of the Company  shall  determine in good faith that such offering will
interfere with a pending or contemplated financing, merger, acquisition, sale of
assets,  recapitalization  or other similar  corporate action of the Company and
the Company  furnishes a  certificate  to that effect to the Holder.  After such
Permitted  Interruption,  the Company shall use its best efforts to restore such
Registration or to effect such  Registration (as the case may be) within 30 days
without further request from the Holder, unless such Demand Registration request
has been withdrawn by written notice of the Holder.



<PAGE>


         6.02  Piggyback Registration Rights.
               -----------------------------

                  (a) If the Company at any time or from time to time subsequent
to the date of this  Warrant  proposes  to  register  any  securities  under the
Securities Act either for its own account or the account of any selling security
holders (other than pursuant to (i) a registration statement on Forms S-4 or S-8
or any successor or similar  forms,  (ii) a  registration  relating  solely to a
Commission Rule 145 offering,  or (iii) a registration on any form that does not
permit secondary  sales),  it will give written notice to each of the Holders of
its  intention  at  least  ten  (10)  days  in  advance  of  the  filing  of any
registration  statement with respect thereto. Upon the written request of any of
the Holders given within five (5) days after receipt of such notice, the Company
will  use  its  best  efforts  to  include  in  such  registration,  and  in any
underwriting  involved therein, all the Registrable  Securities included in such
request.

                  (b) Upon making a request  pursuant to this Section 6.02,  the
Holders  shall  specify  the number of shares of  Registrable  Securities  to be
registered on their behalf and the intended method of disposition  thereof.  The
Company may require the Holders to furnish to the Company  such  information  in
writing regarding  themselves and the distribution of Registrable  Securities as
the  Company  may from time to time  reasonably  request  in writing in order to
comply  with the  Securities  Act.  The  Holders  agree to notify the Company as
promptly as practicable  of any  inaccuracy or change in  information  they have
previously furnished to the Company.

                                   ARTICLE VII

                                  MISCELLANEOUS

         7.01 Notices. All notices,  requests and other communications  provided
for herein  shall be in writing,  and shall be deemed to have been made or given
when  delivered or mailed,  first class,  postage  prepaid,  or sent by telex or
other  telegraphic  communications  equipment.  Such notices and  communications
shall be addressed:

                  (a)      if to the Company, to

                           Paradigm Medical Industries, Inc.
                           1127 West 2320 South, Suite A
                           Salt Lake City, Utah 84119
                           Attention: Chief Executive Officer; or

                  (b)      if to the Holder, to

                           KSH Investment Group, Inc.
                           245 Great Neck Road
                           Great Neck, New York 11021



<PAGE>


         7.02  Waivers;  Amendments.  No  failure  or  delay  of the  Holder  in
exercising any right,  power or privilege,  hereunder  shall operate as a waiver
thereof, nor shall any single or partial exercise thereof, or any abandonment or
discontinuance  of steps to enforce such a right,  power or privilege,  preclude
any other or further exercise thereof or the exercise of any other right,  power
or  privilege.  The rights and  remedies  of the Holder are  cumulative  and not
exclusive  of any  rights  or  remedies  which  it  would  otherwise  have.  The
provisions  of this Warrant may be amended,  modified or waived if, but only if,
such  amendment,  modification  or  waiver  is in  writing  and is signed by the
Company and a majority of the Holders; provided that no amendment,  modification
or waiver may change the  exercise  price of the Warrant or the number of Shares
in  which  this  Warrant  is  exercisable   (including  without  limitation  any
adjustments or any provisions with respect to adjustments,  the expiration of or
the manner of exercising the Warrants)  without the consent in writing of all of
the Holders.

         7.03 Governing Law. This Warrant shall be construed in accordance  with
and governed by the laws of the State of Utah.

         7.04 Survival of Agreements;  Representations and Warranties,  etc. All
warranties,  representations  and covenants made by the Company herein or in any
certificate  or other  instrument  delivered by or on behalf of it in connection
herewith  shall be  considered to have been relied upon by the Holders and shall
survive the issuance  and  delivery of the  Warrants  and the Shares,  and shall
continue in full force and effect so long as this  Warrant is  outstanding.  All
statements  in  any  such  certificate  or  other  instrument  shall  constitute
representations and warranties hereunder.

         7.05  Covenants  To Bind  Successor  and  Assigns.  All the  covenants,
stipulations,  promises and agreements in this Warrant contained by or on behalf
of the  Company  shall  bind  its  successors  and  assigns,  whether  or not so
expressed.

         7.06 Severability.  In case any one or more of the provisions contained
in this Warrant shall be invalid,  illegal or unenforceable in any jurisdiction,
the validity,  legality and enforceability of the remaining provisions contained
herein  and  therein  shall  not in any  way be  affected  or  impaired  in such
jurisdiction  and shall not invalidate or render illegal or  unenforceable  such
provision in any other jurisdiction.

         7.07  Headings.  The  headings  used  herein  are  for  convenience  of
reference only and shall not be deemed to be a part of this Warrant.

         7.08 No Rights as  Stockholder.  This  Warrant  shall not  entitle  the
Holder to any rights as a stockholder of the Company.

         7.09  Pronouns.  The pronouns  "it" and "its" herein shall be deemed to
mean "he" and "his" or "she" and "hers", as the context requires.



<PAGE>


         IN WITNESS WHEREOF,  the Company has caused this Warrant to be executed
in its corporate name by one of its officers thereunto duly authorized effective
as of the day and year first above written.

                                PARADIGM MEDICAL INDUSTRIES, INC.



Dated:__________________        By:
                                ------------------------------------------------
                                Thomas F. Motter
                                Chairman and Chief Executive Officer