<PAGE>

                          TRANSITION SERVICES AGREEMENT


         This  Transition  Services  Agreement (the  "Transition  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,  concurrent with the execution and delivery of this Transition
Agreement,  Seller is selling and  Purchaser is  purchasing  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)
pursuant  to that  certain  Asset  Purchase  Agreement,  of even date  herewith,
between Seller and Purchaser (the "Asset Purchase Agreement"); and

         WHEREAS,  Purchaser  has  requested  and  Seller  has agreed to provide
certain  transition  services  after  the  Closing  subject  to  the  terms  and
conditions of this Transition Agreement.

                                    AGREEMENT

         NOW, THEREFORE, in consideration of the mutual promises,  covenants and
agreements  set forth  herein and other  good and  valuable  consideration,  the
receipt and sufficiency of which are hereby  acknowledged,  the parties agree as
follows:

         1. Definitions. All capitalized terms used in this Transition Agreement
which are not otherwise defined herein shall have the meaning set forth for such
term in the Asset Purchase Agreement.

         2.  Cooperation  of the  Parties.  Purchaser  has  requested  Seller to
perform  the  Services  (defined  below) to assist  Purchaser  in its efforts to
maintain the CE on the acquired products.  To help Purchaser achieve this result
and to minimize any disruption to the ongoing  operations of Seller, the parties
agree to cooperate in good faith and shall direct their respective  employees to
work with the representatives of the other party and to provide such information
and other assistance as may be reasonably required in order to fulfill the terms
of this Transition Agreement.

         3. Access to Facilities,  Assets and Personnel. During the term of this
Transition Agreement, Seller shall:

                  (a) Allow  Purchaser's  employees,  agents and  contractors to
enter onto the premises of Seller as needed,  following  reasonable prior notice
and during normal business hours, or such other time or times as the parties may
mutually agree, for the purpose of identifying the Assets,  utilizing the Assets
for the  operation of the  business,  and  arranging  for the  relocation of the
Assets  (provided that Purchaser  shall be solely  responsible  for the costs of
shipping any such Assets); and

                  (b) Allow  Purchaser's  employees,  agents and  contractors to
have  reasonable  access to  employees  who  remain  employed  by Seller  having
knowledge or information relevant to the Assets, provided that such access shall
not  unreasonably  interfere with the continued  performance of such  employees'
duties for Seller.  Seller shall instruct such employees to cooperate fully with
Purchaser.  Access to Seller  employees shall include the opportunity to hold in
person  meetings at the facilities of either Seller or Purchaser,  provided that
Purchaser shall reimburse Seller employees for any expenses  reasonably incurred
by such  employees  related to travel  undertaken at  Purchaser's  request,  and
Seller shall allow such  employees the necessary  and  reasonable  time off from
work for such travel.

4. Transition  Services.  During the term of this Transition  Agreement,  Seller
shall use commercially  reasonable efforts to provide on behalf of Purchaser the
services set forth in Attachment  "A" (the  "Services").  The Services  shall be
performed  in a timely and  professional  manner  consistent  with  service  and
quality  levels  maintained by Seller prior to Closing.  Purchaser  acknowledges
that Seller's  ability to manufacture  products is dependent upon  circumstances
that are outside of Seller's  control,  including the  availability of materials
and components,  timing of delivery of such items to Seller, and the willingness
of personnel to remain employed by Seller.

         5. Key Employees. On or before October 18, 1999, Purchaser will provide
Seller with a list of Key Employees to be attached hereto as Exhibit "B." Seller
will  use  its  best  efforts  to  retain  the  Key  Employees  pursuant  to the
termination  schedule  set forth  therein.  "Best  efforts"  shall  mean (i) the
continuation of the retention  packages which Seller  previously  offered to the
Key  Employees  through  termination  hereunder,  and  (ii) not  terminating  or
decreasing  the  compensation  or benefits of any Key Employee  except,  in each
case,  for good cause and,  except in an emergency,  with  Purchaser's  consent,
which  consent will not be  unreasonably  withheld or delayed.  In the event the
termination schedule changes, Purchaser will notify Seller as soon as practical,
and in any case,  Purchaser will be responsible for paying the Key Employees for
their final two weeks of  employment,  regardless  of whether they  received two
weeks notice.

         6. Compensation. Purchaser shall reimburse Seller for: (i) incremental,
out-of-pocket  costs incurred by Seller in providing the Services and such other
cooperation  and  assistance  provided  by Seller  pursuant  to this  Transition
Agreement; (ii) labor costs, which will be based on an hourly rate that reflects
the actual salary and benefits for those Key Employees providing Services; (iii)
retention  benefits for Key Employees accruing between October 22, 1999 and each
Key Employee's  termination  date;  and (iv)  severance for Key Employees  which
accrues after October 22, 1999.  Purchaser shall not be responsible for: (i) any
retention  benefits  accrued  before  October  22,  1999,  for  any of  Seller's
employees;   (ii)  any  expenses   relating  to  Seller's   facilities  for  any
time-period;  or (iii) severance for any Seller employee  accrued before October
22, 1999. Seller shall submit a monthly invoice for Services rendered during the
previous   calendar  month.  Each  monthly  invoice  shall  include  a  detailed
accounting of charges and expenses.  Purchaser shall remit payment within thirty
days from receipt of each monthly invoice.

         7. Compliance  with Policies and  Procedures.  While on the premises of
Seller,  Purchaser's employees,  agents and contractors shall observe all rules,
policies and  procedures  applicable to the employees of Seller  working at such
site.

         8.  Continuation  of Facilities and Compliance  with Law.  Seller shall
maintain in effect,  at its own expense,  all leases relating to the facilities,
offices and equipment required to provide the Services,  and shall, as available
resources  permit,  maintain  the  same in a  reasonable  state  of  repair  and
operation  consistent with past practices and in compliance with all laws, rules
and  regulations,  including,  but not limited to, the  Occupational  Safety and
Health Act of 1970, as amended, and all Environmental Laws.

         9.   Confidentiality.   The  parties   acknowledge  that   confidential
information  belonging  to a  party  may  be  disclosed  to the  other  parties'
employees,  agents and contractors as a result of the activities contemplated by
this   Transition   Agreement.   Each  party   agrees  that  the  terms  of  the
Confidentiality  Agreement,  dated  August 30,  1999 by and  between  Seller and
Purchaser  (the  "Confidentiality  Agreement")  shall apply to any  confidential
information disclosed pursuant to this Transition Agreement and each party shall
cause its employees or contractors to comply with the terms thereof.

         10.  Status.  Seller  shall  provide  the  Services  as an  independent
contractor and Seller's  employees shall not for any purpose act as employees or
agents of Purchaser.

         11.  Indemnification.  Purchaser  shall  indemnify  and  hold  harmless
Seller, and the officers,  directors,  employees, agents, successors and assigns
of Seller, from and against any liabilities, losses, damages, costs and expenses
(including  reasonable  attorney's fees) ("Damages")  incurred by Seller arising
out of or related to (i) the use or occupation of the premises or any facilities
or equipment of Seller by any employees, agents or contractors of Purchaser, and
(ii) any acts or omissions by any  employee,  agent or  contractor of Purchaser,
except and to the extent such  Damages are  attributable  to the  negligence  or
misconduct of Seller.

         12. Term and Termination.  This Transition  Agreement shall commence on
the Closing  Date and  terminate on November  30,  1999.  Purchaser  may earlier
terminate  this  agreement  upon  written  notice  to  Seller  subject  only  to
completion of its obligations in this Transition Agreement. Purchaser shall have
no  responsibility  for costs incurred after  termination in connection with the
Services.  Seller's  sole  responsibility  is to perform the Services  specified
herein, in the manner described herein, up to the termination date; Seller shall
have no  responsibility  for  maintaining the CE mark on the products during the
term of this Transition Agreement or thereafter.

         13.  Independent Sales  Representatives  and Distributors.  The parties
acknowledge  and agree that the agreements  between  Seller and its  Independent
Sales Representatives ("ISRs") and International  Distributors  ("Distributors")
have not been assigned to, and no  obligations  arising  under those  agreements
will be assumed by  Purchaser.  In order to  facilitate  Seller's  exit from the
business,  Purchaser will continue to sell Phaco products to those  Distributors
identified by Seller through and including December 31, 1999.

         14. General Provisions. Except for the Asset Purchase Agreement and any
documents reference therein and the Confidentiality  Agreement,  this Transition
Agreement is the entire  agreement  between the parties  relating to the subject
matter hereof,  superceding  any and all prior  agreements  between the parties.
This  Transition  Agreement  may not be  amended  except by a written  agreement
signed by an authorized  representative of each party, and is for the benefit of
the parties and their permitted assigns.  It is not intended to create a benefit
for any third parties.

         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>


                                  ATTACHMENT A


                               Transition Services


I.       Customer Service Functions:

         Receive  and  process  customer  orders,   provide  technical  customer
         support,  including  complaint handling and Medical Device Reporting as
         requested by Purchaser.

  II.    Logistics, Distribution and Inventory Control:

         In response to customer  orders,  ship  products to such  customers and
         also process returns,  maintain consignment inventory records, maintain
         customer master and item master files,  as directed by Purchaser.  Upon
         request  from  Purchaser,  pack and  ship to  Purchaser  the  remaining
         product inventory located at Seller's Norwell and Rockland facilities.

III.     Systems Maintenance and Support:

         Consistent with available resources,  maintain and operate all systems,
         equipment and  facilities  required to perform the Services,  including
         but not limited to voice and data networks,  and desktop  applications;
         provided  that Seller  shall not be  required  to  purchase  additional
         hardware  or software  nor shall it be  required  to employ  additional
         personnel to maintain or support the systems, equipment or facilities.

IV.      Manufacturing and Repair Operations:

         Utilizing materials and components  provided by Purchaser,  Seller will
         use   commercially   reasonable   efforts  to   manufacture  up  to  20
         phacoemulsification  SIStems  (subject to the  available  resources and
         access to available  materials and  components)  and repair products to
         the same standards, specifications and quality as previously maintained
         by Seller.

V.       Notifications:

         Notify all current Phaco-related vendors of the acquisition and further
         notify  vendors in writing  that  ownership  to any Phaco  inventory in
         their   possession  has  been   transferred  to  Purchaser  under  this
         Agreement.