ASSET PURCHASE AGREEMENT


         This Asset Purchase  Agreement (this "Agreement") is entered into as of
the date the last party  signs as shown on the  signature  page  hereto,  by and
among Mentor Corporation, a Minnesota corporation,  Mentor Ophthalmics,  Inc., a
Massachusetts  corporation,  and Mentor  Medical  Inc.,  a Delaware  corporation
(collectively "Seller") on the one hand, and Paradigm Medical Industries,  Inc.,
a Delaware corporation ("Purchaser") on the other hand.


                                    RECITALS

         WHEREAS,  Seller is engaged in the  business of  marketing  and selling
ophthalmic products, including a cataract surgery system product line consisting
of   the   Mentor(TM)    Phacoemulsification    S.I.S.tem,    the    Odyssey(TM)
Phacoemulsification  System, the Surg-E-Trol(R)  System I and System II, and all
accessories thereto (collectively, the "Phaco" product line); and

         WHEREAS, in accordance with the provisions of this Agreement, Purchaser
desires to purchase from Seller and Seller desires to sell to Purchaser  certain
assets described herein.


                                    AGREEMENT

         NOW, THEREFORE,  in consideration of the mutual covenants,  agreements,
representations  and warranties set forth in this Agreement,  the parties hereto
agree as follows.

         1.       PURCHASE AND SALE.

                  1.1  Purchase  and Sale of  Assets.  Subject  to the terms and
conditions  set forth in this  Agreement,  at the Closing (as defined in Section
1.4),  Seller  shall sell,  transfer,  assign,  convey,  delegate and deliver to
Purchaser, and Purchaser shall purchase and acquire from Seller, all of Seller's
right, title,  obligation and interest in and to the assets  (collectively,  the
"Assets") which are used by Seller to develop, manufacture,  market and sell the
Phaco  product  line and are owned by Seller or in which  Seller  has any right,
title or interest as of the Closing Date (as defined in Section 1.4). The Assets
include but are not limited to:

                           (a) Sales and Marketing.  Copies (and originals if in
Seller's possession) of Seller's Phaco customer lists, advertising materials and
sales literature,  sales booth graphics, ad slicks, artwork,  un-filled purchase
orders and supporting  documents,  and other marketing  information and records,
warranty and/or warranty  policies and/or other records used exclusively for the
Phaco, which are in Seller's possession as of the Closing Date.

                           (b) Inventories. All inventories relating exclusively
to the Phaco  product line,  including  finished  goods and products,  goods and
products in process and materials and supplies on hand and in transit, as of the
Closing Date.

                           (c)  Intellectual  Property.   All  patents,   patent
applications,  trade names,  trademarks and copyrights used  exclusively for the
Phaco product line. The list of Intellectual  Property transferred  hereunder is
set forth in Schedule 1.1(c) hereto.

                           (d)  Registrations.  All governmental  registrations,
registration  applications,  temporary registrations,  experimental use permits,
applications  and emergency use exemptions  used primarily for the Phaco product
line, including those listed on Schedule 1.1(d) hereto (the "Registrations").

                           (e) Material Contracts. All contracts, agreements and
licenses  which are listed on Schedule  1.1(e),  together  with all  consignment
contracts  with  customers,  but excluding any such contracts that expire or are
terminated  prior to Closing  and such  contracts  where the Seller is unable to
obtain an assignment prior to the Closing (the "Contracts").

                           (f) Equipment. All machinery,  tools, instruments and
personal  property used  exclusively  in connection  with the Phaco product line
(the "Equipment").

                           (g)  Technical  Information.   All  of  the  Seller's
technical information and data, including,  but not limited to, know-how,  trade
secrets,  inventions,   formulas,  processes,  designs,  drawings,   technology,
software (including source codes), databases,  manufacturing and quality control
procedures and records,  product composition data and specifications,  packaging
specifications,  material safety data sheets, customer  specifications,  product
standards,  competitive samples and reports of analyses thereof,  lab notebooks,
records of inventions,  patent application  drafts, and research and development
projects, materials, results and records, wherever located, used exclusively for
the Phaco product line ("Technical Information").

                           (h)  Warranties.  All  manufacturers',  vendors'  and
suppliers' warranties, to the extent assignable, relating directly to the Assets
or the Phaco product line.

                           (i)  Goodwill.   The  goodwill  of  Seller   relating
directly to the Assets or the Phaco product line.

                  1.2      Excluded Assets.  The Assets  shall  not  include the
following (the "Excluded Assets"):

                           (a)      Cash.

                           (b)      Securities.

                           (c)      Bank deposits.

(d)      Accounts receivable.

                           (e) Assets,  properties  and rights of the Seller (i)
not currently used exclusively for the Phaco product line or (ii) currently used
exclusively  for the Phaco  product line but that are ancillary to the operation
of the Phaco product line, including,  without limitation, any office equipment,
furniture and fixtures of the Seller.

                           (f) Any and all rights and assets,  including without
limitation  intellectual  property rights,  relating to product lines other than
the Phaco product line.

                  1.3  Purchase  Price.  The  aggregate  consideration  for  the
transfer to Purchaser of the Assets  hereunder  (the  "Purchase  Consideration")
shall consist of 485,751 shares of Purchaser's common stock, par value $.001 per
share (the "Common Shares").  Such number of Common Shares represents the result
of the  following  calculation:  (a)  the  sum  of  $1,500,000,  divided  by (b)
$3.08800,  which is the product of (i) 90%,  times (ii)  $3.43125,  which is the
average closing price of Purchaser's  common stock on the Nasdaq National Market
System (as  reported in The Wall Street  Journal)  for the twenty  trading  days
ending on October 13, 1999. Certain agreements of the parties as to registration
of the  Common  Shares and  related  matters  are set forth in the  Registration
Rights Statements attached hereto as Exhibit A and by this reference made a part
hereof.

                  1.4 Closing. The consummation of the transactions contemplated
by this  Agreement  (the  "Closing")  shall take place at the  offices of Seller
located at 201 Mentor  Drive,  Santa  Barbara,  CA 93111 on October 22, 1999, at
11:59 p.m.  local time or at such other  time,  date or place as  Purchaser  and
Seller may mutually agree upon (the "Closing Date").

                  1.5 Liabilities.  Purchaser shall assume, pay, perform, defend
and discharge all liabilities and obligations relating to the Phaco product line
and the Assets  which arise  after the Closing  Date and are based upon or arise
from any act,  omission,  transaction,  circumstance,  performance  of services,
state of facts or  other  condition  which  occurred  after  the  Closing  Date.
Purchaser  is not  assuming or agreeing  to pay or perform  any  liabilities  or
obligations  of Seller which  existed on or before the Closing  Date,  including
without limitation any judgments, claims, actions or proceedings relating to the
Phaco  product  line or the Assets.  Notwithstanding  the  foregoing,  Purchaser
specifically assumes the following: (i) all of Seller's warranty obligations for
Phaco products  previously  sold;  (ii) all of Seller's  repair and  maintenance
obligations  for Phaco  products  previously  sold;  (iii) all  liabilities  and
obligations of the Seller under the Contracts and Registrations  included in the
Assets; (iv) all accounts payable and accrued  liabilities;  (v) all liabilities
shown on the books and records of the business relating exclusively to the Phaco
product line as of the Closing Date;  (vi) all  liabilities  or  obligations  to
third  parties for personal  injury,  property  damage,  consequential  damages,
punitive damages or incidental damages arising from any injury,  event or damage
as a result of any product or good shipped, sold or manufactured by Purchaser or
by Seller pursuant to the Transition Services  Agreement;  (vii) all liabilities
or obligations to third parties with respect to the Intellectual  Property;  and
(viii) all  obligations  associated  with open purchase  orders on and as of the
Closing Date. All sales or transfer taxes, including but not limited to document
recording  fees,  transfer taxes,  sales and excise taxes,  arising out of or in
connection with the consummation of the transactions  contemplated herein, shall
be paid by Purchaser.  Purchaser  acknowledges  that Xomed, Inc. owns certain of
the accounts  receivable for Phaco products  previously  sold by Mentor.  In the
event of a customer  dispute  regarding a product for which Xomed,  Inc.  owns a
receivable, Purchaser will resolve the problem with Xomed, Inc.

                  1.6  Instruments of Conveyance  and Transfer.  Upon receipt of
the Purchase Consideration, Seller shall execute and deliver to Purchaser a Bill
of Sale with the appropriate schedules attached thereto that shall be reasonably
acceptable to Purchaser and necessary to effect the transfer to Purchaser of and
to vest in  Purchaser a complete,  valid and legal title  and/or  license to the
Assets.

                  1.7  Transitional   Support  Services.   Concurrent  with  the
Closing, the parties will execute a Transition Services Agreement.

                  1.8 Limited License.  Purchaser will acquire certain inventory
which  displays  the  "Mentor"  name and mark  (the  "Mark").  Seller  grants to
Purchaser  as of the  Closing  Date a  limited  license  to use  the  Mark in an
informational  sense only to identify the existing  inventory  transferred under
this  Agreement  and on  any  related  advertising  and  promotional  materials.
Purchaser  agrees to comply with Seller's  guidelines for use of the Mark, which
Seller will  provide to  Purchaser.  Purchaser  acknowledges  that Seller is the
exclusive owner of the Mark.  Purchaser  agrees to refrain from any action which
is in any way inconsistent  with Seller's  ownership of the Mark, or which could
damage Seller's interest in the Mark or Seller's reputation,  or to use the Mark
in connection  with any other  products.  Seller retains the right to review and
pre-approve any written materials using the Mark.

         2.       REPRESENTATIONS AND WARRANTIES.

                  2.1  Mutual   Representations   and  Warranties.   Each  party
represents and warrants as follows:

                           (a)   Organization   and  Good  Standing.   It  is  a
corporation duly organized, validly existing and in good standing under the laws
of the state of its incorporation. It is in good standing in each other state or
jurisdiction  in which the  ownership of its  properties or where the conduct of
its business requires it to be qualified or registered.

                           (b)  Authority  and  Status.  It has full  power  and
authority  to execute and deliver  this  Agreement,  to perform its  obligations
hereunder,  and to consummate the transactions  contemplated  hereby without the
necessity of any act or consent of any other entity.  It has taken all necessary
and appropriate corporate action,  including,  if necessary,  Board of Directors
consents with respect to the execution,  delivery and  performance by it of this
Agreement and each and every  agreement,  document and  instrument  provided for
herein. This Agreement and each and every agreement,  document and instrument to
be  executed,  delivered  and  performed by each party in  connection  herewith,
constitute or will when executed and delivered constitute, the valid and legally
binding  obligations  of each party  enforceable  against it in accordance  with
their respective terms,  except as  enforceability  may be limited by applicable
equitable doctrines or by bankruptcy, insolvency, reorganization,  moratorium or
similar laws from time to time in effect affecting the enforcement of creditors'
rights generally.

                           (c) No Finder or  Brokers.  Neither it, nor any party
acting  on its  behalf,  has  paid  or has  become  obligated  to pay any fee or
commission  to any  broker,  finder or  intermediary  for, or on account of, the
transactions contemplated by this Agreement.

                           (d) No Conflict or Default. Neither the execution and
deliver of this Agreement nor compliance  with the terms and provisions  hereof,
including, without limitation, the consummation of the transactions contemplated
hereby,  will violate any statute,  regulation or ordinance of any  governmental
authority  or conflict  with or result in the breach of any term,  condition  or
provision  of its  Articles  of  Incorporation  or By-Laws,  or of any  material
agreement,  deed,  contract,  mortgage,  indenture,  writ, order,  decree, legal
obligation or instrument to which it is or may be bound, or constitute a default
(or an event  which,  with the lapse of time or the giving of  notice,  or both,
would constitute a default) thereunder.

                           (e) Litigation.  There is no claim, litigation,  suit
or  proceeding,  administrative  or  judicial,  pending,  or to  its  knowledge,
threatened,   against  it  relating  to  this  Agreement  or  the   transactions
contemplated hereunder, at law or in equity, before any federal, state, local or
foreign court or regulatory agency or other  governmental  authority which could
result in the  institution  of legal  proceedings  to prohibit  or restrain  the
consummation or performance of this Agreement or the  transactions  contemplated
hereby  or claim  damages  as a result  of this  Agreement  or the  transactions
contemplated hereby.

                  2.2      Representations and Warranties of Purchaser.

                           (a)  Review  of  Documents.  Purchaser  has  had  the
opportunity  to, and has reviewed to its  satisfaction,  all of the documents it
has requested prior to the Closing Date.

                           (b) Issuance of Common  Shares.  The common shares of
Purchaser  to be  issued to  Mentor  Corporation  at the  Closing  (the  "Common
Shares") are duly authorized and, upon issuance,  will be validly issued,  fully
paid  and  non-assessable,  free  and  clear of any and all  liens,  claims  and
encumbrances.  The  issuance  of the  Common  Shares  will be  exempt  from  the
registration  requirements  of the  Securities  Act of  1933,  as  amended  (the
"Securities  Act") by reason of compliance with the provisions of Securities Act
Regulation D. The Common Shares, when registered under an effective registration
statement under the Securities Act of 1933, as amended (the "Securities Act") or
upon  compliance  with  Securities Act Rule 144, and when authorized for trading
under the rules of the Nasdaq (as defined below),  will be entitled to be traded
on the National  Association of Securities  Dealers  Automated  Quotation system
("Nasdaq"), and the holders of the Common Shares shall be entitled to all rights
and  preferences   accorded  to  a  holder  of  Purchaser's  common  stock.  The
outstanding common stock of Purchaser is currently quoted on the Nasdaq.

                           (c)  No  Conflicts.   The  execution,   delivery  and
performance of this Agreement by Purchaser and the  consummation by Purchaser of
the  transactions  contemplated  hereby and the issuance of the Common Shares to
Mentor  Corporation do not and will not (i) result in a violation of Purchaser's
Articles or By-Laws, or (ii) conflict with, or constitute a default (or an event
which with  notice or lapse of time or both would  become a default)  under,  or
give  to  others  any  rights  of   termination,   amendment,   acceleration  or
cancellation of, any agreement,  indenture, patent, patent license or instrument
to which  Purchaser  or any of its  subsidiaries  is a  party,  or  result  in a
violation of any federal, state, local or foreign law, rule, regulation,  order,
judgment or decree (including Federal and state securities laws and regulations)
applicable to Purchaser or any of its  subsidiaries  or by which any property or
asset of Purchaser or any of its  subsidiaries is bound or affected  (except for
such conflicts, defaults, terminations, amendments, accelerations, cancellations
and violations as would not,  individually or in the aggregate,  have a material
adverse  effect).  Except for such  filings as  Purchaser  has made or will make
prior to the Closing,  Purchaser is not required under Federal,  state, local or
foreign law, rule or regulation  to obtain any consent,  authorization  or order
of, or make any filing or registration with, any court or governmental agency in
order for it to execute,  deliver or perform any of its  obligations  under this
Agreement,  or issue and sell the  Common  Shares in  accordance  with the terms
hereof.

                           (d)  SEC   Documents;   Financial   Statements.   The
outstanding common stock of Purchaser is registered pursuant to Section 12(g) of
the  Securities  Exchange  Act of 1934,  as  amended  (the  "Exchange  Act") and
Purchaser  has  filed  all  reports,  schedules,  forms,  statements  and  other
documents required to be filed by it with the Securities and Exchange Commission
("SEC")  pursuant to the reporting  requirements of the Exchange Act (all of the
foregoing,  including filings incorporated by reference therein,  being referred
to herein as the "SEC Documents").  Purchaser has delivered or made available to
Mentor  Corporation  true and complete  copies of all SEC Documents  (including,
without limitation, proxy information and solicitation materials) filed with the
SEC since  December 31, 1996.  Purchaser has not provided to Mentor  Corporation
any material  non-public  information  or any  information  which,  according to
applicable  law,  rule or  regulation,  should have been  disclosed  publicly by
Purchaser but which has not been so  disclosed.  As of their  respective  dates,
Purchaser's  Form 10-K for the year ended  December 31, 1998,  and all documents
subsequently  filed  with  the  SEC  (the  "Current  Filings"),   together  with
Purchaser's second quarter 1999 earnings press release, dated September 1, 1999,
complied in all material  respects with the requirements of the Exchange Act and
the rules and regulations of the SEC  promulgated  thereunder and other federal,
state and local laws, rules and regulations  applicable to such Current Filings,
and none of the Current  Filings  contained  any untrue  statement of a material
fact or  omitted  to state a  material  fact  required  to be stated  therein or
necessary in order to make the statements therein, in light of the circumstances
under which they were made,  not  misleading.  The Current  Filings  contain all
material  information  concerning  Purchaser,  and no event or circumstance  has
occurred which would require Purchaser to disclose such event or circumstance in
order to make the  statements  in the  Current  Filings,  taken as a whole,  not
misleading  on the date hereof or on the Closing  Date but which has not been so
disclosed. The financial statements of Purchaser included in the Current Filings
complied  as to  form  in  all  material  respects  with  applicable  accounting
requirements  and the  published  rules  and  regulations  of the  SEC or  other
applicable  rules and  regulations  with respect  thereto at the time of filing.
Such financial  statements were prepared in accordance  with generally  accepted
accounting  principles applied on a consistent basis during the periods involved
(except (i) as may be otherwise  indicated in such  financial  statements or the
notes thereto or (ii) in the case of unaudited interim statements, to the extent
they may not include  footnotes or may be condensed or summary  statements)  and
fairly present in all material  respects the financial  position of Purchaser as
of the dates  thereof  and the  results  of  operations  and cash  flows for the
periods  then ended  (subject,  in the case of unaudited  statements,  to normal
year-end audit adjustments).

                           (e) No Material  Adverse  Change.  Since December 31,
1998,  the date through  which the most recent  report of Purchaser on Form 10-K
has been prepared and filed with the SEC, a copy of which is included in the SEC
Documents,  no material  adverse  effect has  occurred or exists with respect to
Purchaser or its  subsidiaries,  except as  otherwise  disclosed or reflected in
other SEC Documents  filed or press releases  issued as of a date  subsequent to
December 31, 1998.

                           (f) No  Undisclosed  Liabilities.  Purchaser  and its
direct  and  indirect  subsidiaries  have  no  liabilities  or  obligations  not
disclosed in the SEC  Documents,  other than those  liabilities  incurred in the
ordinary course of Purchaser's or its subsidiaries'  respective businesses since
December 31, 1998, which liabilities,  individually or in the aggregate,  do not
or would not have a  material  adverse  effect  on  Purchaser  or its  direct or
indirect subsidiaries.

                           (g) No Undisclosed Events or Circumstances.  No event
or  circumstance  has occurred or exists with respect to Purchaser or its direct
or indirect subsidiaries or their respective businesses,  properties, prospects,
operations  or  financial  condition,  which,  under  applicable  law,  rule  or
regulation,  requires  public  disclosure or announcement by Purchaser but which
has not been so publicly announced or disclosed.

                           (h) No General Solicitation.  Neither Purchaser,  nor
any of its affiliates,  or, to its knowledge,  any person acting on its or their
behalf has engaged in any form of general  solicitation  or general  advertising
(within the meaning of Regulation D under the Securities Act of 1933, as amended
(the "Act")) in connection with the offer or sale of the Common Shares.

                           (i) No Integrated  Offering.  Neither Purchaser,  nor
any of its  affiliates,  nor to its  knowledge any person acting on its or their
behalf has, directly or indirectly,  made any offers or sales of any security or
solicited any offers to buy any security, under circumstances that would require
registration of the Common Shares under the Act.

                  2.3      Representations and Warranties of Seller.

                           (a)  Title  to  the  Assets.   Except  for  permitted
encumbrances,  Seller has good and marketable title and/or license to the Assets
free  and  clear  of  any  pledges,  liens,  encumbrances,  security  interests,
equities, charges and restrictions of any nature whatsoever. The term "permitted
encumbrances" shall mean liens for taxes not due and payable.

                           (b)  Litigation.   There  is  no  claim,  litigation,
action, suit or proceeding,  administrative or judicial,  pending or to Seller's
knowledge  threatened  against Seller  relating to the Phaco product line or the
Assets, at law or in equity, before any federal,  state, local or foreign court,
or regulatory agency or other governmental authority.

                           (c)    Limitation.    EXCEPT    FOR    THE    EXPRESS
REPRESENTATIONS   AND   WARRANTIES  SET  FORTH  IN  THIS  SECTION  2.3:  (i)  NO
REPRESENTATION  OR  WARRANTY  WHATSOEVER  IS MADE BY SELLER,  AND SELLER  HEREBY
DISCLAIMS ANY  REPRESENTATIONS OR WARRANTIES IMPLIED AS TO THE CONDITION,  VALUE
OR QUALITY OF THE ASSETS AND  SPECIFICALLY  DISCLAIMS WITH RESPECT TO THE ASSETS
ANY REPRESENTATIONS AND WARRANTIES OF VALUE,  MERCHANTABILITY,  USAGE OR FITNESS
FOR ANY  PARTICULAR  PURPOSE  AND  NON-INFRINGEMENT;  AND (ii) THE ASSETS  BEING
TRANSFERRED  TO THE  PURCHASER  ARE CONVEYED ON AN "AS IS" AND "WHERE IS" BASIS,
AND PURCHASER SHALL RELY UPON ITS OWN EXAMINATION THEREOF.

                           (d)  ADDITIONAL  LIMITATIONS.  WITHOUT  LIMITING  THE
GENERALITY OF THE FOREGOING:

                                    (i) NONINFRINGEMENT. SELLER DOES NOT WARRANT
AND MAKES NO  REPRESENTATION  THAT  PURCHASER'S  EXERCISE OF THE RIGHTS ASSIGNED
UNDER  THIS  AGREEMENT  IS OR  WILL BE  FREE  FROM  CLAIMS  OF  INFRINGEMENT  OR
MISAPPROPRIATION  OF THIRD PARTY  INTELLECTUAL  PROPERTY RIGHTS, AND SELLER WILL
HAVE NO OBLIGATION WHATSOEVER TO INDEMNIFY PURCHASER AGAINST ANY SUCH CLAIM.

                                    (ii)  VALIDITY  OR  SCOPE.  SELLER  DOES NOT
WARRANT AND MAKES NO REPRESENTATION AS TO THE VALIDITY, ENFORCEABILITY, OR SCOPE
OF ANY OF THE INTELLECTUAL PROPERTY RIGHTS LICENSED TO PURCHASER PURSUANT TO THE
ASSIGNMENT MADE UNDER SECTION 1.1.

                                    (iii)  ENFORCEMENT.  SELLER DOES NOT WARRANT
AND  MAKES  NO  REPRESENTATION  THAT  ANY OF THE  INTELLECTUAL  PROPERTY  RIGHTS
ASSIGNED TO PURCHASER  PURSUANT TO SECTION 1.1 WILL BE FREE OF  INFRINGEMENT  OR
MISAPPROPRIATION,  AS APPLICABLE,  BY THIRD PARTIES, AND WILL HAVE NO OBLIGATION
TO  COOPERATE  IN  ENFORCEMENT  OF ANY  SUCH  INTELLECTUAL  PROPERTY  RIGHTS  OR
OTHERWISE  TAKE  ACTION   AGAINST  THIRD  PARTIES   ALLEGED  TO  HAVE  COMMITTED
INFRINGEMENT OR MISAPPROPRIATION.

                                    (iv)   PROSECUTION.   SELLER  WILL  HAVE  NO
OBLIGATION TO PROSECUTE,  MAINTAIN,  OR OTHERWISE SECURE  INTELLECTUAL  PROPERTY
RIGHTS, INCLUDING WITHOUT LIMITATION ANY PATENTS, PATENT APPLICATIONS, INVENTION
REGISTRATIONS,  OR COPYRIGHT REGISTRATIONS,  WITH RESPECT TO THE ASSETS ASSIGNED
TO PURCHASER PURSUANT TO SECTION 1.1.

                                    (v)  NO  OTHER   ASSIGNMENT   OR   LICENSES.
PURCHASER  OBTAINS NO  ASSIGNMENTS  OR  LICENSES  UNDER ANY SELLER  INTELLECTUAL
PROPERTY RIGHTS NOT SPECIFIED IN THIS AGREEMENT.

         3.       PURCHASER'S COVENANTS.  So long as  Seller  holds  any  of the
Common Shares, Purchaser agrees to:

                  (a) Make and keep  available  at all  times  adequate  current
public information,  as those terms are understood and defined in Securities Act
Rule 144;

                  (b) File with the SEC in a timely manner all reports and other
documents required of Purchaser under the Securities Act and the Exchange Act;

                  (c) Furnish to Seller  promptly upon its written request (i) a
written  statement  by  Purchaser  that it has filed all reports  required to be
filed by Section 13 or 15(d) of the Exchange Act during the  preceding 12 months
and has been subject to these filing  requirements  for the past 90 days,  (b) a
copy of Purchaser's  most recent annual or quarterly  report filed with the SEC,
and (c) any other  reports and  documents  filed with the SEC by Purchaser  that
Seller  may  reasonably  request  in  order to sell the  Common  Shares  without
registration under the Securities Act.

         4.       INDEMNIFICATION

                  4.1  Indemnification  of Seller.  Purchaser  hereby  agrees to
indemnify and hold Seller harmless from, against and in respect of (and shall on
demand reimburse Seller for):

                           (a) any and all loss,  liability or damage  resulting
from any untrue  representation,  breach of warranty or  non-fulfillment  of any
covenant or  agreement  by  Purchaser  contained  herein or in any  certificate,
document or instrument delivered to Seller hereunder;

                           (b) any and all  debts,  liabilities  or  obligations
relating to the Phaco product line or the Assets, accrued, absolute, contingent,
unliquidated  or  otherwise  which arise after the Closing  Date which are based
upon or arise from any act, omission, transaction,  circumstance, performance of
services,  state of facts or other  condition  which  occurred after the Closing
Date, whether or not then known, due or payable;

                           (c) any and all  debts,  liabilities  or  obligations
arising from the Assumed Liabilities; and

                           (d) any and all actions, suits, proceedings,  claims,
demands  assessments,   judgments,   costs  and  expenses  (including,   without
limitation,  legal  fees  and  expenses)  incident  to any of the  foregoing  or
incurred  in  investigating  or  attempting  to avoid the same or to oppose  the
imposition thereof or in enforcing this Agreement.

                  4.2  Indemnification  of  Purchaser.  Seller  hereby agrees to
indemnify and hold Purchaser harmless from, against and in respect of (and shall
on demand reimburse Purchaser for):

                           (a) any and all loss,  liability or damage  resulting
from any untrue  representation,  breach of warranty or  non-fulfillment  of any
covenant or agreement by Seller contained herein or in any certificate, document
or instrument delivered to Purchaser hereunder;

                           (b) any and all  debts,  liabilities  or  obligations
relating to the Phaco product line or the Assets accrued, absolute,  contingent,
unliquidated  or  otherwise  which arise on or before the  Closing  Date and are
based  upon  or  arise  from  any  act,  omission,  transaction,   circumstance,
performance  of services,  state of facts or other  condition  which occurred or
existed  on or before  the  Closing  Date,  whether  or not then  known,  due or
payable, except for any such debts,  liabilities or obligations arising from the
Assumed Liabilities; and

                           (c) any and all actions, suits, proceedings,  claims,
demands  assessments,   judgments,  costs  and  expenses,   including,   without
limitation, legal fees and expenses incident to any of the foregoing or incurred
in  investigating  or attempting  to avoid the same or to oppose the  imposition
thereof or in enforcing this Agreement.

                  4.3 Procedure for Indemnification. In the event any damages or
expenses are incurred by the indemnified  party for which the indemnified  party
would be entitled to  indemnification  hereunder,  the  indemnified  party shall
promptly notify the indemnifying  party in writing of such damages and expenses.
The  indemnifying  party  agrees  that it will  promptly  reimburse  and pay the
indemnified   party  for  such   damages   and   expenses.   If  any  claim  for
indemnification hereunder is based upon an action or claim filed or made against
the indemnified party by a third party,  then the indemnifying  party shall have
the sole right to negotiate a  settlement  or  compromise  of any such action or
claim subject to the indemnified  party's approval,  which approval shall not be
unreasonably  withheld or delayed,  or to defend any such action or claim at the
sole  expense or cost of the  indemnifying  party with  counsel  selected by the
indemnified party. Provided,  however, that the indemnified party at its expense
shall have the right to have its counsel participate in such proceedings and any
compromise  or  settlement  of any claim other than for money  damages  shall be
subject to the prior written consent of the indemnified party.

                  4.4 Time to Assert Claims. All claims for indemnification must
be asserted no later than one year after the Closing  Date,  provided,  however,
that  Mentor  Corporation  may  assert  claims  for  indemnification  related to
Purchaser's  representations and warranties set forth in Sections 2.2(b) through
2.2(i) and  Purchaser's  covenants set forth in Article 3, up to the  applicable
statute of limitations.

                  4.5  Deductible.  The  Purchaser may make no claim against the
Seller for indemnification  unless and until the aggregate amount of such claims
exceeds  $20,000.00 (the  "Deductible"),  in which event the Purchaser may claim
indemnification for the amount of such claims in excess of the Deductible.

                  4.6  Limitation.  The Seller's  obligation for indemnity shall
only be up to a maximum aggregate  liability of $225,000.00.  In calculating any
amount  of  damages  to be  paid  by the  indemnifying  party  pursuant  to this
Agreement,  the amount of such  damages  will be  reduced by all  reimbursements
credited to or received by the indemnified party,  relating to such damages, and
will be net of any tax benefits and insurance  proceeds  (after giving effect to
any premium  increases or deductibles)  received by the  indemnified  party with
respect to the matter for which indemnification is claimed.

                  4.7      Exclusive Remedy; Release.

                           (a) The  indemnification  provided  pursuant  to this
Agreement  shall be the sole and  exclusive  remedy  hereto  for any losses as a
result of, with respect to or arising out of breach of this Agreement, or any of
the transactions or other agreements or instruments contemplated or entered into
in connection herewith (including, but not limited to, all Schedules attached or
referenced herein);  provided,  however,  that such indemnification shall not be
the sole and  exclusive  remedy  and  shall in no way  limit  the  rights of the
parties for fraud, willful breach, Purchaser's breach of the representations and
warranties set forth in Sections 2.2(b) through  Section 2.2(i),  or Purchaser's
failure to fulfill the covenants set forth in Article 3.

                           (b) Except as  specifically  provided in this Article
4, neither party nor its  affiliates or  representatives  shall be liable to the
other party for,  and (except as so  provided)  each party  hereby  releases and
discharges the other party and its affiliates and representatives  from, any and
all losses  incurred  as a result  of,  with  respect  to or arising  out of the
ownership or operation of the Assets.

         5.       CONFIDENTIALITY.

                  5.1 Confidential  Information.  The Confidentiality  Agreement
between the parties  dated August 30, 1999 shall remain in full force and effect
and shall be incorporated herein by this reference.

                  5.2 Public  Announcements.  For the period  beginning with the
Closing Date and ending thirty (30) days thereafter,  no public announcement may
be made by either  party with regard to the  transactions  contemplated  by this
Agreement  without  the  prior  written  consent  of  both  the  Seller  and the
Purchaser;  provided  that either party may make such  disclosure  to the extent
required by applicable  law or regulation  of any  governmental  agency or stock
exchange  upon which the  securities of such party are  registered.  For the one
month period  following  the Closing  Date,  the Seller and the  Purchaser  will
discuss any public  announcements  or disclosures  concerning  the  transactions
contemplated  by this  Agreement  with the  other  party  prior to  making  such
announcements or disclosures.

         6.       CONDITIONS PRECEDENT TO OBLIGATIONS.

                  6.1  Conditions to  Obligations  of Purchaser.  Each and every
obligation  of Purchaser to be performed at the Closing  shall be subject to the
satisfaction  as of or  before  the  Closing  Date of the  following  conditions
(unless waived in writing by Purchaser):

                           (a)    Representations     and    Warranties.     The
representations  and  warranties  of  Seller  set  forth  in  Section  2 of this
Agreement  shall  have  been  true and  correct  when made and shall be true and
correct at and as of the Closing Date as if such  representations and warranties
were made as of such date and time.

                           (b)   Performance   of  Agreement.   All   covenants,
conditions and other  obligations under this Agreement which are to be performed
or complied with by Seller shall have been fully  performed and complied with at
or  prior to the  Closing  Date,  including  the  delivery  of  instruments  and
documents as required herein.

                           (c) Absence of Governmental or Other Objection. There
shall be no  pending or  threatened  lawsuit  or any other  legal or  regulatory
proceeding  challenging  the  transaction  by any body or agency of the federal,
state or local  government  or by any third  party and the  consummation  of the
transaction  shall not have been  enjoined,  or threatened to be enjoined,  by a
court of competent jurisdiction as of the Closing Date.

                  6.2  Conditions  to  Obligations  of  Seller.  Each and  every
obligation  of Seller to be  performed  at the  Closing  shall be subject to the
satisfaction  as of or  before  the  Closing  Date of the  following  conditions
(unless waived in writing by Seller):

                           (a)    Representations     and    Warranties.     The
representations  and  warranties  of  Purchaser  set forth in  Section 2 of this
Agreement  shall  have  been  true and  correct  when made and shall be true and
correct at and as of the Closing Date as if such  representations and warranties
were made as of such date and time.

                           (b)   Performance   of  Agreement.   All   covenants,
conditions and other  obligations under this Agreement which are to be performed
or complied with by Purchaser  shall have been fully performed and complied with
at or prior to the Closing  Date,  including  the  delivery of  instruments  and
documents as required herein.

                           (c) Absence of Governmental or Other Objection. There
shall be no pending or threatened  lawsuit  challenging  the  transaction by any
body or agency of the federal,  state or local  government or by any third party
and the consummation of the transaction  shall not have been enjoined by a court
of competent jurisdiction as of the Closing Date.

         7.  DELIVERIES  AT CLOSING.  All  transactions  at the Closing shall be
deemed to take place  simultaneously  and no transaction at the Closing shall be
deemed to have been  completed  until all  documents  set forth herein have been
delivered  by the  parties  hereto  except  as  waived  by the party to who such
document is to be delivered.

                  7.1      Obligations of Seller.  At the Closing, Seller  shall
deliver to Purchaser:

                           (a)  such   good  and   sufficient   bills  of  sale,
assignments,   deeds  and  other  good  and  sufficient   instruments  of  sale,
conveyance,  transfer  and  assignment  as  shall  be  required  or  as  may  be
appropriate in order to effectively  vest in Purchaser good and marketable title
to the Assets;

                           (b)  Mentor   Corporation's   irrevocable   proxy  to
Purchaser's  Board of  Directors  to vote the Common  Shares for a period of one
year following the Closing Date; provided, however, that if during such one year
period Mentor  Corporation sells any of such Common Shares,  following such sale
the proxy  shall  terminate  and be of no force and effect  with  respect to the
Common Shares which are sold; and

                           (c) such other  instruments  or  documents  as may be
reasonably   requested  by  Purchaser  or  Purchaser's   counsel  to  fully  and
effectively  convey the Assets to Purchaser in accordance with the provisions of
this Agreement.

                  7.2      Obligations of Purchaser.  At the Closing,  Purchaser
shall deliver to Seller:

                           (a) original share  certificates  (with the number of
and  denomination  of such  certificates  as  reasonably  requested  by Seller),
representing the Common Shares registered in the name of Mentor Corporation.

                           (b) an  opinion  of  Purchaser's  counsel,  dated the
Closing Date, reasonably satisfactory in form and substance to Seller.

                           (c) such other  instruments  or  documents  as may be
reasonably  requested  by Seller or  Seller's  counsel to fully and  effectively
evidence Purchaser's compliance with the provisions of this Agreement.

         8.       MISCELLANEOUS.

                  8.1 Expenses.  Each party to this Agreement shall bear its own
costs and expenses  incurred in connection with the  preparation,  execution and
delivery of this Agreement and the transactions contemplated by this Agreement.

                  8.2 Notices.  All  notices,  claims,  certificates,  requests,
demands and other  communications  under this Agreement shall be made in writing
and shall be delivered by hand or sent, postage prepaid by registered, certified
or express mail, or reputable  overnight  courier  service,  and shall be deemed
given when so  delivered  by hand or if mailed,  three days after  mailing,  one
business day in the case of express mail or overnight  courier  service,  to the
parties at the  following  addresses  (or at such other  address  for a party as
shall be specified by like notice):

If to Seller:

         Mentor Corporation
         Attention: Loren McFarland
         201 Mentor Drive
         Santa Barbara, CA 93111
         Telephone:  (805) 879-6000
         Facsimile:   (805) 964-2712

With a copy to:

         Chief Counsel
         Mentor Corporation
         201 Mentor Drive
         Santa Barbara, CA 93111
         Telephone:  (805) 879-6000
         Facsimile:   (805) 681-6006

If to Purchaser:

         Paradigm Medical Industries, Inc.
         Attention: Mike Stelzer
         1127 West 2320 South, Suite A
         Salt Lake City, UT 84119

                  8.3 Agreements  and Waivers.  This Agreement may be amended or
modified only by a written instrument executed by the parties to this Agreement.
No failure or delay on the part of any party in exercising any of its respective
rights  hereunder  upon any failure by any other party to perform or observe any
condition,  covenant  or  provision  herein  contained  shall  operate as waiver
thereof,  nor shall any single or partial  exercise of any such rights  preclude
any other or  further  exercise  thereof  or the  exercises  of any other  right
hereunder.

                  8.4 No  Assignment.  The rights and  obligations or each party
under this  Agreement  shall not be  assigned  prior to, on or after the Closing
without the written consent of the other party hereto. The obligations of Seller
and Purchaser  hereunder shall be binding upon their  respective  successors and
permitted assigns.

                  8.5  Benefits.  Nothing  expressed  or  referred  to  in  this
Agreement  is intended or shall be  construed to give any person or entity other
than the parties to this Agreement or their respective  successors and permitted
assigns  any  legal or  equitable  right,  remedy or claim  under or in  respect
thereof or any provision contained herein, it being the intention of the parties
that this Agreement is for the sole and exclusive  benefit of such parties,  and
such successors and permitted assigns of this Agreement,  and for the benefit of
no other person or entity.

                  8.6 Headings. The section and other headings contained in this
Agreement  are for  reference  purposes only and shall not in any way affect the
meaning of interpretation of this Agreement.

                  8.7 Entire Agreement. This Agreement, the Exhibits hereto, the
documents  referred  to herein,  and the  documents  executed  contemporaneously
hereto on the Closing Date  constitute the entire  Agreement of the parties with
respect to the subject  matter of this Agreement and supercede all prior oral or
written  agreements,  understandings or representations  relating to the subject
matter of this Agreement (except the August 30, 1999  Confidentiality  Agreement
entered into between the parties).

                  8.8  Governing  Law.  This  Agreement  shall be  construed  in
accordance  with, and governed by, the internal laws of the State of California,
without regard to its conflict of law provisions.

                  8.9 Choice of Forum.  Any suit,  action or proceeding  against
any party hereto with respect to the subject  matter of this  Agreement  must be
brought  in the  United  States  District  Court  for the  Central  District  of
California,   and  each  party  hereby  irrevocably  submits  to  the  exclusive
jurisdiction of such court for the purpose of any such suit, action,  proceeding
or judgment.  Each party hereto irrevocably waives any objection which either of
them may now or  hereafter  have to the  laying of venue of any suit,  action or
proceeding arising out of or relating to this Agreement,  brought as provided in
this  Section,  and hereby  further  irrevocably  waives any claim that any such
suit,  action or  proceeding  brought in any such  court has been  brought in an
inconvenient forum. The parties hereto agree that exclusive  jurisdiction of all
disputes,  suits, actions or proceedings between the parties hereto with respect
to the  subject  matter  of this  Agreement  lies in the  court  as  hereinabove
mentioned.  Service of process by mailing (by  certified  mail,  return  receipt
requested) or  delivering a copy of such process to a party in  accordance  with
Section 8.2 hereof will be deemed good and sufficient service thereof.

                  8.10  Counterparts.  This  Agreement may be executed in one or
more counterparts,  each of which shall be deemed an original,  but all of which
taken together shall constitute one and the same Agreement.

                  8.11  Severability.  If any provision of this Agreement or any
covenant,  obligation or agreement  contained herein is determined by a court of
competent jurisdiction to be invalid or unenforceable,  such determination shall
not affect any other provision, covenant, obligation or agreement, each of which
shall be construed and enforced as if such valid or unenforceable provision were
not contained herein. Such invalidity or  unenforceability  shall not affect any
valid and enforceable  application thereof,  and each such provision,  covenant,
obligation  or  agreement  shall be deemed  to be  effective,  operative,  made,
entered into or taken in the manner to the full extent permitted by law.

                  8.12  Termination.  This  Agreement may be terminated  and the
transactions herein contemplated may be abandoned at any time without liability,
but not later than the Closing Date:

                           (a)      by mutual written consent of the parties; or

                           (b) by Seller or  Purchaser  if the  Closing  has not
occurred  by  November  15,  1999,  through no fault of the party who  initiates
termination.

                  8.13  Obligations  After  Termination.   Termination  of  this
Agreement pursuant to section 8.12 will terminate all obligations of the parties
hereto,  except for the obligations under Section 2.1(c) (Brokerage),  Section 4
(Indemnity), and Section 5 (Confidentiality).

         IN WITNESS WHEREOF,  Seller and Purchaser have caused their respective,
duly authorized  officers to execute this Agreement as of the day and year first
above written.

MENTOR CORPORATION                           PARADIGM MEDICAL INDUSTRIES, INC.


By /s/ Anthony R. Gette                      By /s/ Thomas F. Motter
   --------------------                         --------------------
Anthony R. Gette, CEO and President          Thomas F. Motter, CEO and President

MENTOR MEDICAL INC.


By /s/ Loren McFarland
   -------------------
Loren McFarland, Secretary/Treasurer


MENTOR OPHTHALMICS, INC.


By /s/ Loren McFarland
   -------------------
Loren McFarland, Secretary/Treasurer

<PAGE>
                                 SCHEDULE 1.1(c)

                              Intellectual Property


See attached schedules of patents, patent applications, trademarks and trademark
applications.

Copyrights

         All unregistered copyrights to written materials transferred hereunder.


<PAGE>



                                 SCHEDULE 1.1(d)

                                  Registrations


o        TUV Product Service Gmbh ISO 9001 and EN 46001 Certificate No. Q1 97 04
         28718 006 (Norwell) (as it relates to the Phaco product line but not as
         it relates to other products)

o        EC  Certificate  No.  G1 98 10 28718  005 (as it  relates  to the Phaco
         product line but not as it relates to other products)

o        FDA 510(k) No. K912904 (Odyssey Phacoemulsification System)

o        FDA 510(k) No. K955245 (Meridian Phacoemulsification System)

o        FDA 510(k) No. K974469 (Phacoemulsification SIStem Remote Control)

o        FDA 510(k) No. K890622 (Surg-E-Trol System I and System II)

o        International permits and approvals:

o        Mentor SIStem: Argentina,  Austria, Belgium, Brazil, Bulgaria,  Canada,
         Chile, Colombia,  Denmark,  Egypt, Finland,  France,  Germany,  Greece,
         Iceland,   India,  Ireland,   Israel,   Italy,  Korea,   Liechtenstein,
         Luxembourg,  Malaysia,  Netherlands,  Norway, Pakistan, Peru, Portugal,
         Puerto Rico,  Singapore,  Spain,  South  Africa,  Sweden,  Switzerland,
         Taiwan, Thailand, Turkey, United Kingdom, Venezuela. Pending: China

o        Odyssey System: Russia.

o        Surg-E-Trol System I and System II: Australia.



<PAGE>



                                 SCHEDULE 1.1(e)

                               Material Contracts


o        October 4, 1999 License Agreement with Xomed, Inc.

o        July 4, 1997 Software License Agreement with Dialogue Technology, Inc.