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Exhibit 10.25
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                               SECURITY AGREEMENT

         SECURITY  AGREEMENT (this  "Agreement"),  dated as of June 11, 2007, by
and among Paradigm Medical Industries, Inc., a Delaware corporation ("Company"),
and the  secured  parties  signatory  hereto  and  their  respective  endorsees,
transferees and assigns (collectively, the "Secured Party").

                              W I T N E S S E T H:

         WHEREAS,  pursuant to a Securities Purchase  Agreement,  dated the date
hereof,  between  Company  and the  Secured  Party (the  "Purchase  Agreement"),
Company  has  agreed to issue to the  Secured  Party and the  Secured  Party has
agreed to  purchase  from  Company  certain of  Company's  8%  Callable  Secured
Convertible  Notes, due three years from the date of issue (the "Notes"),  which
are convertible into shares of Company's Common Stock, par value $.001 per share
(the "Common Stock"). In connection  therewith,  Company shall issue the Secured
Party certain Common Stock purchase warrants (the "Warrants"); and

         WHEREAS,  in order to induce the Secured  Party to purchase  the Notes,
Company has agreed to execute and  deliver to the Secured  Party this  Agreement
for the  benefit  of the  Secured  Party  and to  grant  to it a first  priority
security  interest in certain  property of Company to secure the prompt payment,
performance  and  discharge  in full of all of Company's  obligations  under the
Notes and exercise and  discharge  in full of  Company's  obligations  under the
Warrants.

         NOW, THEREFORE, in consideration of the agreements herein contained and
for other good and valuable consideration,  the receipt and sufficiency of which
is hereby acknowledged, the parties hereto hereby agree as follows:

         1. Certain Definitions.  As used in this Agreement, the following terms
shall  have  the  meanings  set  forth in this  Section  1.  Terms  used but not
otherwise  defined in this  Agreement  that are  defined in Article 9 of the UCC
(such as  "general  intangibles"  and  "proceeds")  shall  have  the  respective
meanings given such terms in Article 9 of the UCC.

              (a)  "Collateral"  means the collateral in which the Secured Party
is granted a security  interest by this  Agreement  and which shall  include the
following,  whether presently owned or existing or hereafter  acquired or coming
into existence,  and all additions and accessions  thereto and all substitutions
and  replacements  thereof,  and all  proceeds,  products and accounts  thereof,
including,  without  limitation,  all proceeds  from the sale or transfer of the
Collateral  and of  insurance  covering  the  same  and of any  tort  claims  in
connection therewith:

                     (i)  All   Goods  of  the   Company,   including,   without
              limitations, all machinery,  equipment, computers, motor vehicles,
              trucks, tanks, boats, ships,  appliances,  furniture,  special and
              general  tools,  fixtures,  test and quality  control  devices and
              other  equipment of every kind and nature and  wherever  situated,
              together with all  documents of title and  documents  representing
              the same,  all  additions  and  accessions  thereto,  replacements
              therefor,  all parts therefor,  and all substitutes for any of the
              foregoing and all other items used and useful in  connection  with
              the   Company's    businesses   and   all   improvements   thereto
              (collectively, the "Equipment"); and

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                     (ii) All Inventory of the Company; and

                     (iii) All of the  Company's  contract  rights  and  general
              intangibles,   including,   without  limitation,  all  partnership
              interests, stock or other securities,  licenses,  distribution and
              other agreements,  computer software  development rights,  leases,
              franchises, customer lists, quality control procedures, grants and
              rights, goodwill,  trademarks,  service marks, trade styles, trade
              names, patents, patent applications, copyrights, deposit accounts,
              and income tax refunds (collectively,  the "General Intangibles");
              and

                     (iv) All Receivables of the Company including all insurance
              proceeds,  and  rights to refunds  or  indemnification  whatsoever
              owing,  together  with all  instruments,  all  documents  of title
              representing   any   of  the   foregoing,   all   rights   in  any
              merchandising,  goods, equipment,  motor vehicles and trucks which
              any of the same may represent,  and all right, title, security and
              guaranties with respect to each Receivable, including any right of
              stoppage in transit; and

                     (v) All of the Company's documents, instruments and chattel
              paper, files, records, books of account, business papers, computer
              programs and the  products  and  proceeds of all of the  foregoing
              Collateral set forth in clauses (i)-(iv) above.

              (b)  "Company"  shall mean,  collectively,  Company and all of the
subsidiaries  of Company,  a list of which is contained in Schedule A,  attached
hereto.

              (c)  "Obligations"  means all of the Company's  obligations  under
this Agreement and the Notes, in each case,  whether now or hereafter  existing,
voluntary or involuntary, direct or indirect, absolute or contingent, liquidated
or  unliquidated,  whether or not jointly owed with  others,  and whether or not
from time to time  decreased or  extinguished  and later  decreased,  created or
incurred,  and all or any portion of such  obligations or  liabilities  that are
paid,  to the  extent all or any part of such  payment  is avoided or  recovered
directly  or  indirectly  from the  Secured  Party as a  preference,  fraudulent
transfer  or  otherwise  as  such  obligations  may  be  amended,  supplemented,
converted, extended or modified from time to time.

              (d) "UCC" means the  Uniform  Commercial  Code,  as  currently  in
effect in the State of New York.

         2. Grant of Security  Interest.  As an inducement for the Secured Party
to purchase the Notes and to secure the complete and timely payment, performance
and  discharge  in  full,  as the case may be,  of all of the  Obligations,  the
Company  hereby,   unconditionally   and   irrevocably,   pledges,   grants  and
hypothecates  to the  Secured  Party,  a  continuing  security  interest  in,  a
continuing  first lien upon, an unqualified  right to possession and disposition
of and a right of set-off against,  in each case to the fullest extent permitted
by law, all of the Company's  right,  title and interest of whatsoever  kind and
nature in and to the Collateral (the "Security Interest").

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         3.  Representations,   Warranties,  Covenants  and  Agreements  of  the
Company.  The Company represents and warrants to, and covenants and agrees with,
the Secured Party as follows:

              (a) The Company has the requisite corporate power and authority to
enter into this Agreement and otherwise to carry out its obligations thereunder.
The execution, delivery and performance by the Company of this Agreement and the
filings  contemplated  therein have been duly authorized by all necessary action
on the part of the  Company and no further  action is  required by the  Company.
This Agreement  constitutes a legal, valid and binding obligation of the Company
enforceable  in  accordance  with its  terms,  except as  enforceability  may be
limited by bankruptcy,  insolvency,  reorganization,  moratorium or similar laws
affecting the enforcement of creditor's rights generally.

              (b) The Company  represents  and warrants  that it has no place of
business or offices where its  respective  books of account and records are kept
(other than  temporarily  at the offices of its  attorneys  or  accountants)  or
places where Collateral is stored or located,  except as set forth on Schedule A
attached hereto;

              (c) The  Company is the sole owner of the  Collateral  (except for
non-exclusive  licenses  granted  by the  Company  in  the  ordinary  course  of
business), free and clear of any liens, security interests, encumbrances, rights
or claims,  and is fully  authorized  to grant the  Security  Interest in and to
pledge the  Collateral,  except as set forth on Schedule C. There is not on file
in any  governmental  or  regulatory  authority,  agency or recording  office an
effective financing  statement,  security agreement,  license or transfer or any
notice of any of the  foregoing  (other than those that have been filed in favor
of the Secured Party  pursuant to this  Agreement)  covering or affecting any of
the  Collateral,  except as set forth on Schedule  C. So long as this  Agreement
shall be in effect, the Company shall not execute and shall not knowingly permit
to be on file in any such office or agency any such financing statement or other
document or  instrument  (except to the extent filed or recorded in favor of the
Secured Party pursuant to the terms of this  Agreement),  except as set forth on
Schedule C.

              (d)  No  part  of  the  Collateral  has  been  judged  invalid  or
unenforceable.  No written claim has been  received  that any  Collateral or the
Company's use of any  Collateral  violates the rights of any third party.  There
has been no adverse  decision to the Company's  claim of ownership  rights in or
exclusive  rights to use the Collateral in any  jurisdiction or to the Company's
right to keep and maintain such  Collateral in full force and effect,  and there
is no proceeding  involving said rights pending or, to the best knowledge of the
Company,   threatened  before  any  court,  judicial  body,   administrative  or
regulatory agency, arbitrator or other governmental authority.

              (e) The Company  shall at all times  maintain its books of account
and records  relating to the  Collateral at its principal  place of business and
its Collateral at the locations set forth on Schedule A attached  hereto and may
not relocate such books of account and records or tangible  Collateral unless it
delivers  to the  Secured  Party at least 30 days prior to such  relocation  (i)
written notice of such  relocation  and the new location  thereof (which must be
within  the  United  States)  and  (ii)  evidence  that  appropriate   financing
statements and other necessary  documents have been filed and recorded and other
steps have been taken to perfect the Security Interest to create in favor of the
Secured  Party valid,  perfected  and  continuing  first  priority  liens in the
Collateral.

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              (f) This  Agreement  creates in favor of the Secured Party a valid
security interest in the Collateral  securing the payment and performance of the
Obligations and, upon making the filings described in the immediately  following
sentence,  a perfected  first  priority  security  interest in such  Collateral.
Except for the filing of financing  statements  on Form-1 under the UCC with the
jurisdictions  indicated on Schedule B, attached  hereto,  no  authorization  or
approval of or filing with or notice to any governmental authority or regulatory
body  is  required  either  (i)  for  the  grant  by  the  Company  of,  or  the
effectiveness  of, the Security  Interest  granted  hereby or for the execution,
delivery  and  performance  of this  Agreement  by the  Company  or (ii) for the
perfection  of or  exercise  by the  Secured  Party of its rights  and  remedies
hereunder.

              (g) On the date of execution of this  Agreement,  the Company will
deliver to the Secured Party one or more  executed UCC  financing  statements on
Form-1 with respect to the Security  Interest for filing with the  jurisdictions
indicated on Schedule B, attached hereto and in such other  jurisdictions as may
be requested by the Secured Party.

              (h) Except as set forth on Schedule C, the execution, delivery and
performance  of this  Agreement  does not  conflict  with or  cause a breach  or
default,  or an event that with or without the passage of time or notice,  shall
constitute  a breach or default,  under any  agreement to which the Company is a
party  or by  which  the  Company  is  bound.  No  consent  (including,  without
limitation,  from stock holders or creditors of the Company) is required for the
Company to enter into and perform its obligations hereunder.

              (i) The Company shall at all times maintain the liens and Security
Interest  provided for hereunder as valid and perfected first priority liens and
security  interests in the  Collateral  in favor of the Secured Party until this
Agreement  and the  Security  Interest  hereunder  shall  terminate  pursuant to
Section 11. The  Company  hereby  agrees to defend the same  against any and all
persons.  The Company shall safeguard and protect all Collateral for the account
of the Secured Party. At the request of the Secured Party, the Company will sign
and  deliver to the  Secured  Party at any time or from time to time one or more
financing  statements  pursuant to the UCC (or any other applicable  statute) in
form  reasonably  satisfactory  to the  Secured  Party  and will pay the cost of
filing the same in all public  offices  wherever  filing is, or is deemed by the
Secured Party to be, necessary or desirable to effect the rights and obligations
provided for herein.  Without  limiting the  generality  of the  foregoing,  the
Company shall pay all fees,  taxes and other  amounts  necessary to maintain the
Collateral and the Security Interest hereunder, and the Company shall obtain and
furnish to the  Secured  Party from time to time,  upon  demand,  such  releases
and/or  subordinations of claims and liens which may be required to maintain the
priority of the Security Interest hereunder.

              (j) The Company will not transfer, pledge, hypothecate,  encumber,
license  (except  for  non-exclusive  licenses  granted  by the  Company  in the
ordinary course of business), sell or otherwise dispose of any of the Collateral
without the prior written consent of the Secured Party.

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              (k) The Company shall keep and preserve its  Equipment,  Inventory
and other tangible Collateral in good condition,  repair and order and shall not
operate or locate any such  Collateral  (or cause to be  operated or located) in
any area excluded from insurance coverage.

              (l) The Company shall, within ten (10) days of obtaining knowledge
thereof,  advise the  Secured  Party  promptly,  in  sufficient  detail,  of any
substantial  change in the Collateral,  and of the occurrence of any event which
would have a material  adverse  effect on the value of the  Collateral or on the
Secured Party's security interest therein.

              (m) The Company shall promptly  execute and deliver to the Secured
Party such further deeds, mortgages, assignments, security agreements, financing
statements or other instruments, documents, certificates and assurances and take
such further  action as the Secured  Party may from time to time request and may
in its sole  discretion  deem  necessary  to  perfect,  protect or  enforce  its
security interest in the Collateral including, without limitation, the execution
and delivery of a separate  security  agreement  with  respect to the  Company's
intellectual property  ("Intellectual Property Security Agreement") in which the
Secured Party has been granted a security interest hereunder, substantially in a
form  acceptable to the Secured  Party,  which  Intellectual  Property  Security
Agreement,  other than as stated  therein,  shall be subject to all of the terms
and conditions hereof.

              (n)  The  Company   shall   permit  the  Secured   Party  and  its
representatives  and agents to inspect  the  Collateral  at any time and to make
copies of  records  pertaining  to the  Collateral  as may be  requested  by the
Secured Party from time to time.

              (o) The  Company  will  take all  steps  reasonably  necessary  to
diligently pursue and seek to preserve,  enforce and collect any rights, claims,
causes of action and accounts receivable in respect of the Collateral.

              (p) The  Company  shall  promptly  notify  the  Secured  Party  in
sufficient detail upon becoming aware of any attachment,  garnishment, execution
or  other  legal  process  levied  against  any  Collateral  and  of  any  other
information  received by the Company that may materially affect the value of the
Collateral,  the  Security  Interest  or the rights and  remedies of the Secured
Party hereunder.

              (q) All information  heretofore,  herein or hereafter  supplied to
the Secured Party by or on behalf of the Company with respect to the  Collateral
is accurate and complete in all material respects as of the date furnished.

              (r)  Schedule  A  attached  hereto  contains  a list of all of the
subsidiaries of Company.

         4. Defaults. The following events shall be "Events of Default":

              (a) The  occurrence  of an Event of  Default  (as  defined  in the
Notes) under the Notes;

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              (b)  Any  representation  or  warranty  of  the  Company  in  this
Agreement or in the Intellectual Property Security Agreement shall prove to have
been incorrect in any material respect when made;

              (c) The  failure by the  Company to observe or perform  any of its
obligations hereunder or in the Intellectual Property Security Agreement for ten
(10) days  after  receipt  by the  Company  of notice of such  failure  from the
Secured Party; and

              (d) Any breach of, or default under, the Warrants.

         5. Duty To Hold In Trust.  Upon the  occurrence of any Event of Default
and at any  time  thereafter,  the  Company  shall,  upon  receipt  by it of any
revenue, income or other sums subject to the Security Interest,  whether payable
pursuant  to the  Notes  or  otherwise,  or of any  check,  draft,  note,  trade
acceptance  or other  instrument  evidencing  an obligation to pay any such sum,
hold the same in trust for the  Secured  Party and shall  forthwith  endorse and
transfer  any such  sums or  instruments,  or both,  to the  Secured  Party  for
application to the satisfaction of the Obligations.

         6. Rights and Remedies  Upon Default.  Upon  occurrence of any Event of
Default and at any time  thereafter,  the Secured  Party shall have the right to
exercise all of the remedies  conferred  hereunder and under the Notes,  and the
Secured  Party shall have all the rights and  remedies of a secured  party under
the UCC and/or any other  applicable law (including the Uniform  Commercial Code
of  any  jurisdiction  in  which  any  Collateral  is  then  located).   Without
limitation, the Secured Party shall have the following rights and powers:

              (a) The Secured  Party shall have the right to take  possession of
the Collateral and, for that purpose,  enter, with the aid and assistance of any
person,  any premises where the  Collateral,  or any part thereof,  is or may be
placed and remove the same,  and the Company shall  assemble the  Collateral and
make it available to the Secured  Party at places which the Secured  Party shall
reasonably  select,  whether at the Company's  premises or  elsewhere,  and make
available to the Secured Party,  without rent,  all of the Company's  respective
premises and facilities  for the purpose of the Secured Party taking  possession
of, removing or putting the Collateral in saleable or disposable form.

              (b) The Secured Party shall have the right to operate the business
of the Company using the  Collateral  and shall have the right to assign,  sell,
lease or otherwise dispose of and deliver all or any part of the Collateral,  at
public or private sale or otherwise,  either with or without special  conditions
or stipulations, for cash or on credit or for future delivery, in such parcel or
parcels  and at such time or times and at such  place or  places,  and upon such
terms and conditions as the Secured Party may deem commercially reasonable,  all
without (except as shall be required by applicable statute and cannot be waived)
advertisement  or demand upon or notice to the Company or right of redemption of
the Company,  which are hereby  expressly  waived.  Upon each such sale,  lease,
assignment  or other  transfer  of  Collateral,  the Secured  Party may,  unless
prohibited by applicable law which cannot be waived, purchase all or any part of
the Collateral being sold, free from and discharged of all trusts, claims, right
of redemption and equities of the Company, which are hereby waived and released.

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         7.  Applications of Proceeds.  The proceeds of any such sale,  lease or
other  disposition of the Collateral  hereunder  shall be applied first,  to the
expenses of retaking,  holding,  storing,  processing  and  preparing  for sale,
selling, and the like (including,  without limitation, any taxes, fees and other
costs  incurred in connection  therewith) of the  Collateral,  to the reasonable
attorneys'  fees and expenses  incurred by the Secured  Party in  enforcing  its
rights hereunder and in connection with collecting, storing and disposing of the
Collateral,  and then to satisfaction of the Obligations,  and to the payment of
any other  amounts  required by  applicable  law,  after which the Secured Party
shall pay to the  Company any surplus  proceeds.  If, upon the sale,  license or
other  disposition of the Collateral,  the proceeds  thereof are insufficient to
pay all amounts to which the Secured Party is legally entitled, the Company will
be liable for the deficiency, together with interest thereon, at the rate of 15%
per  annum  (the  "Default  Rate"),  and the  reasonable  fees of any  attorneys
employed  by the  Secured  Party  to  collect  such  deficiency.  To the  extent
permitted by applicable law, the Company waives all claims,  damages and demands
against the Secured Party arising out of the repossession, removal, retention or
sale of the Collateral, unless due to the gross negligence or willful misconduct
of the Secured Party.

         8. Costs and  Expenses.  The  Company  agrees to pay all  out-of-pocket
fees,  costs and  expenses  incurred  in  connection  with any  filing  required
hereunder, including without limitation, any financing statements,  continuation
statements,  partial releases and/or  termination  statements related thereto or
any  expenses of any  searches  reasonably  required by the Secured  Party.  The
Company  shall also pay all other  claims and  charges  which in the  reasonable
opinion of the Secured Party might  prejudice,  imperil or otherwise  affect the
Collateral or the Security Interest therein. The Company will also, upon demand,
pay to the  Secured  Party  the  amount  of any  and  all  reasonable  expenses,
including the reasonable fees and expenses of its counsel and of any experts and
agents, which the Secured Party may incur in connection with (i) the enforcement
of this  Agreement,  (ii)  the  custody  or  preservation  of,  or the  sale of,
collection from, or other realization upon, any of the Collateral,  or (iii) the
exercise  or  enforcement  of any of the rights of the  Secured  Party under the
Notes. Until so paid, any fees payable hereunder shall be added to the principal
amount of the Notes and shall bear interest at the Default Rate.

         9.  Responsibility for Collateral.  The Company assumes all liabilities
and responsibility in connection with all Collateral, and the obligations of the
Company  hereunder  or  under  the  Notes  and the  Warrants  shall in no way be
affected or  diminished by reason of the loss,  destruction,  damage or theft of
any of the Collateral or its unavailability for any reason.

         10. Security Interest Absolute. All rights of the Secured Party and all
Obligations  of the  Company  hereunder,  shall be absolute  and  unconditional,
irrespective of: (a) any lack of validity or  enforceability  of this Agreement,
the Notes,  the Warrants or any agreement  entered into in  connection  with the
foregoing,  or any portion hereof or thereof; (b) any change in the time, manner
or place of  payment or  performance  of, or in any other term of, all or any of
the  Obligations,  or any other  amendment  or waiver of or any  consent  to any
departure from the Notes,  the Warrants or any other  agreement  entered into in
connection with the foregoing; (c) any exchange, release or nonperfection of any
of the  Collateral,  or any  release  or  amendment  or waiver of or  consent to
departure from any other collateral for, or any guaranty, or any other security,
for all or any of the  Obligations;  (d) any  action  by the  Secured  Party  to
obtain, adjust, settle and cancel in its sole discretion any insurance claims or
matters  made or arising in  connection  with the  Collateral;  or (e) any other
circumstance  which might  otherwise  constitute any legal or equitable  defense

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available  to the  Company,  or a discharge  of all or any part of the  Security
Interest  granted  hereby.  Until  the  Obligations  shall  have  been  paid and
performed in full,  the rights of the Secured  Party shall  continue even if the
Obligations  are barred  for any  reason,  including,  without  limitation,  the
running of the statute of  limitations  or  bankruptcy.  The  Company  expressly
waives presentment, protest, notice of protest, demand, notice of nonpayment and
demand  for  performance.  In the  event  that at any time any  transfer  of any
Collateral  or any  payment  received by the Secured  Party  hereunder  shall be
deemed  by final  order  of a court of  competent  jurisdiction  to have  been a
voidable preference or fraudulent  conveyance under the bankruptcy or insolvency
laws of the United  States,  or shall be deemed to be otherwise due to any party
other than the Secured Party, then, in any such event, the Company's obligations
hereunder  shall  survive  cancellation  of this  Agreement,  and  shall  not be
discharged or satisfied by any prior payment thereof and/or cancellation of this
Agreement,  but  shall  remain a valid and  binding  obligation  enforceable  in
accordance with the terms and provisions hereof. The Company waives all right to
require the Secured  Party to proceed  against any other  person or to apply any
Collateral  which the Secured Party may hold at any time, or to marshal  assets,
or to pursue any other remedy.  The Company waives any defense arising by reason
of the  application  of the statute of  limitations  to any  obligation  secured
hereby.

         11. Term of Agreement.  This Agreement and the Security  Interest shall
terminate  on the date on which all  payments  under the Notes have been made in
full  and all  other  Obligations  have  been  paid  or  discharged.  Upon  such
termination,  the  Secured  Party,  at the  request  and at the  expense  of the
Company,  will join in executing any  termination  statement with respect to any
financing statement executed and filed pursuant to this Agreement.

         12. Power of Attorney; Further Assurances.

              (a) The  Company  authorizes  the Secured  Party,  and does hereby
make, constitute and appoint it, and its respective officers, agents, successors
or assigns with full power of  substitution,  as the  Company's  true and lawful
attorney-in-fact, with power, in its own name or in the name of the Company, to,
after the  occurrence  and during the  continuance  of an Event of Default,  (i)
endorse any notes, checks, drafts, money orders, or other instruments of payment
(including  payments  payable under or in respect of any policy of insurance) in
respect of the  Collateral  that may come into  possession of the Secured Party;
(ii) to sign and endorse any UCC financing statement or any invoice,  freight or
express bill,  bill of lading,  storage or warehouse  receipts,  drafts  against
debtors, assignments, verifications and notices in connection with accounts, and
other  documents  relating to the Collateral;  (iii) to pay or discharge  taxes,
liens,  security interests or other encumbrances at any time levied or placed on
or threatened  against the  Collateral;  (iv) to demand,  collect,  receipt for,
compromise,  settle and sue for monies due in respect of the Collateral; and (v)
generally,  to do, at the  option of the  Secured  Party,  and at the  Company's
expense,  at any  time,  or from  time to time,  all acts and  things  which the
Secured  Party  deems  necessary  to  protect,  preserve  and  realize  upon the
Collateral  and the  Security  Interest  granted  therein in order to effect the
intent  of  this  Agreement,  the  Notes  and the  Warrants,  all as  fully  and
effectually  as the Company might or could do; and the Company  hereby  ratifies
all that said attorney  shall  lawfully do or cause to be done by virtue hereof.
This power of attorney is coupled with an interest and shall be irrevocable  for
the term of this  Agreement  and  thereafter  as long as any of the  Obligations
shall be outstanding.

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              (b)  On a  continuing  basis,  the  Company  will  make,  execute,
acknowledge,  deliver, file and record, as the case may be, in the proper filing
and recording places in any jurisdiction,  including,  without  limitation,  the
jurisdictions  indicated on Schedule B, attached hereto,  all such  instruments,
and take all such action as may reasonably be deemed necessary or advisable,  or
as reasonably  requested by the Secured Party, to perfect the Security  Interest
granted  hereunder  and  otherwise  to carry out the intent and purposes of this
Agreement,  or for assuring  and  confirming  to the Secured  Party the grant or
perfection of a security interest in all the Collateral.

              (c) The Company hereby  irrevocably  appoints the Secured Party as
the Company's  attorney-in-fact,  with full  authority in the place and stead of
the  Company  and in the name of the  Company,  from time to time in the Secured
Party's  discretion,  to take any action and to execute any instrument which the
Secured Party may deem necessary or advisable to accomplish the purposes of this
Agreement,  including  the  filing,  in its  sole  discretion,  of  one or  more
financing or continuation statements and amendments thereto,  relative to any of
the Collateral without the signature of the Company where permitted by law.

         13. Notices.  All notices,  requests,  demands and other communications
hereunder shall be in writing,  with copies to all the other parties hereto, and
shall be deemed to have been duly  given  when (i) if  delivered  by hand,  upon
receipt,  (ii) if sent by facsimile,  upon receipt of proof of sending  thereof,
(iii) if sent by  nationally  recognized  overnight  delivery  service  (receipt
requested), the next business day or (iv) if mailed by first-class registered or
certified  mail,  return receipt  requested,  postage  prepaid,  four days after
posting in the U.S. mails, in each case if delivered to the following addresses:

If to the Company:                     Paradigm Medical Industries, Inc.
                                       2355 South 1070 West
                                       Salt Lake City, UT 84119
                                       Attention: Chief Executive Officer
                                       Telephone:        (801) 977-8970
                                       Facsimile:        (801) 977-8973

With a copy to:                        Mackey Price Thompson & Ostler
                                       350 American Plaza II
                                       57 West 200 South
                                       Salt Lake City, UT 84101
                                       Attention:   Randall A. Mackey, Esq.
                                       Telephone:  (801) 575-5000
                                       Facsimile:   (801) 575-5006

                                       9
<PAGE>

If to the Secured Party:               AJW Partners, LLC
                                       AJW Master Fund, Ltd.
                                       New Millennium Capital Partners II, LLC
                                       1044 Northern Boulevard
                                       Suite 302
                                       Roslyn, New York 11576
                                       Attention:  Corey Ribotsky
                                       Facsimile:  516-739-7115

With a copy to:                        Ballard Spahr Andrews & Ingersoll, LLP
                                       1735 Market Street, 51st Floor
                                       Philadelphia, Pennsylvania  19103
                                       Attention:  Gerald J. Guarcini, Esq.
                                       Facsimile: 215-864-8999

         14.  Other  Security.  To the extent  that the  Obligations  are now or
hereafter  secured by property  other than the  Collateral or by the  guarantee,
endorsement or property of any other person, firm,  corporation or other entity,
then the Secured Party shall have the right, in its sole discretion,  to pursue,
relinquish,  subordinate,  modify or take any other action with respect thereto,
without in any way modifying or affecting any of the Secured  Party's rights and
remedies hereunder.

         15.Miscellaneous.

              (a) No course of  dealing  between  the  Company  and the  Secured
Party, nor any failure to exercise, nor any delay in exercising,  on the part of
the Secured Party,  any right,  power or privilege  hereunder or under the Notes
shall operate as a waiver thereof;  nor shall any single or partial  exercise of
any right,  power or  privilege  hereunder or  thereunder  preclude any other or
further exercise thereof or the exercise of any other right, power or privilege.

              (b) All of the  rights  and  remedies  of the  Secured  Party with
respect to the Collateral,  whether established hereby or by the Notes or by any
other agreements, instruments or documents or by law shall be cumulative and may
be exercised singly or concurrently.

              (c) This Agreement constitutes the entire agreement of the parties
with respect to the subject matter hereof and is intended to supersede all prior
negotiations,  understandings  and agreements  with respect  thereto.  Except as
specifically set forth in this Agreement,  no provision of this Agreement may be
modified or amended except by a written agreement specifically referring to this
Agreement and signed by the parties hereto.

              (d) In the event that any  provision of this  Agreement is held to
be invalid,  prohibited or  unenforceable  in any  jurisdiction  for any reason,
unless such  provision  is narrowed by  judicial  construction,  this  Agreement
shall, as to such jurisdiction,  be construed as if such invalid,  prohibited or
unenforceable  provision had been more  narrowly  drawn so as not to be invalid,
prohibited or unenforceable. If, notwithstanding the foregoing, any provision of
this  Agreement  is held  to be  invalid,  prohibited  or  unenforceable  in any

                                       10
<PAGE>

jurisdiction,  such provision, as to such jurisdiction,  shall be ineffective to
the  extent  of  such  invalidity,   prohibition  or  unenforceability   without
invalidating the remaining  portion of such provision or the other provisions of
this  Agreement  and without  affecting the validity or  enforceability  of such
provision or the other provisions of this Agreement in any other jurisdiction.

              (e) No waiver of any  breach or  default  or any right  under this
Agreement  shall be  considered  valid unless in writing and signed by the party
giving  such  waiver,  and no such  waiver  shall  be  deemed  a  waiver  of any
subsequent breach or default or right,  whether of the same or similar nature or
otherwise.

              (f) This Agreement  shall be binding upon and inure to the benefit
of each party hereto and its successors and assigns.

              (g) Each party  shall take such  further  action and  execute  and
deliver such further  documents as may be necessary or  appropriate  in order to
carry out the provisions and purposes of this Agreement.

              (h) This Agreement  shall be construed in accordance with the laws
of the State of New York,  except to the  extent  the  validity,  perfection  or
enforcement  of a security  interest  hereunder  in  respect  of any  particular
Collateral which are governed by a jurisdiction other than the State of New York
in which case such law shall  govern.  Each of the  parties  hereto  irrevocably
submit to the  exclusive  jurisdiction  of any New York  State or United  States
Federal court sitting in Manhattan county over any action or proceeding  arising
out of or relating to this Agreement,  and the parties hereto hereby irrevocably
agree that all claims in respect of such action or  proceeding  may be heard and
determined  in such New York State or Federal  court.  The parties  hereto agree
that a final  judgment in any such action or proceeding  shall be conclusive and
may be enforced in other  jurisdictions  by suit on the judgment or in any other
manner  provided by law. The parties hereto further waive any objection to venue
in the State of New York and any  objection  to an action or  proceeding  in the
State of New York on the basis of forum non conveniens.

              (i) EACH PARTY HERETO HEREBY AGREES TO WAIVE ITS RESPECTIVE RIGHTS
TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION  BASED  UPON OR  ARISING  OUT OF
THIS AGREEMENT.  THE SCOPE OF THIS WAIVER IS INTENDED TO BE ALL  ENCOMPASSING OF
ANY DISPUTES THAT MAY BE FILED IN ANY COURT AND THAT RELATE TO THE SUBJECT MATER
OF THIS AGREEMENT,  INCLUDING WITHOUT LIMITATION  CONTRACT CLAIMS,  TORT CLAIMS,
BREACH OF DUTY CLAIMS AND ALL OTHER COMMON LAW AND STATUTORY CLAIMS.  EACH PARTY
HERETO  ACKNOWLEDGES THAT THIS WAIVER IS A MATERIAL INDUCEMENT FOR EACH PARTY TO
ENTER INTO A BUSINESS  RELATIONSHIP,  THAT EACH PARTY HAS ALREADY RELIED ON THIS
WAIVER IN ENTERING INTO THIS AGREEMENT AND THAT EACH PARTY WILL CONTINUE TO RELY
ON THIS WAIVER IN THEIR RELATED FUTURE DEALINGS. EACH PARTY FURTHER WARRANTS AND
REPRESENTS  THAT IT HAS REVIEWED  THIS WAIVER WITH ITS LEGAL  COUNSEL,  AND THAT
SUCH  PARTY HAS  KNOWINGLY  AND  VOLUNTARILY  WAIVES  ITS RIGHTS TO A JURY TRIAL

                                       11
<PAGE>

FOLLOWING  SUCH  CONSULTATION.   THIS  WAIVER  IS  IRREVOCABLE,   MEANING  THAT,
NOTWITHSTANDING  ANYTHING HEREIN TO THE CONTRARY,  IT MAY NOT BE MODIFIED EITHER
ORALLY OR IN WRITING, AND THIS WAIVER SHALL APPLY TO ANY SUBSEQUENT  AMENDMENTS,
RENEWALS AND SUPPLEMENTS OR MODIFICATIONS  TO THIS AGREEMENT.  IN THE EVENT OF A
LITIGATION,  THIS AGREEMENT MAY BE FILED AS A WRITTEN  CONSENT TO A TRIAL BY THE
COURT.

              (j) This Agreement may be executed in any number of  counterparts,
each of which when so  executed  shall be deemed to be an original  and,  all of
which taken together shall  constitute one and the same Agreement.  In the event
that any signature is delivered by facsimile transmission,  such signature shall
create a valid  binding  obligation  of the party  executing (or on whose behalf
such  signature is executed)  the same with the same force and effect as if such
facsimile signature were the original thereof.

                  [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

                                       12
<PAGE>

         IN WITNESS  WHEREOF,  the parties  hereto  have  caused  this  Security
Agreement to be duly executed on the day and year first above written.

                                       PARADIGM MEDICAL INDUSTRIES, INC.

                                       By: /s/ Raymond P.L. Cannefax
                                       -------------------------------------
                                       Raymond P.L. Cannefax
                                       President and Chief Executive Officer

                                       AJW PARTNERS, LLC
                                       By: SMS Group, LLC

                                       By: /s/ Corey S. Ribotsky
                                       -------------------------------------
                                       Corey S. Ribotsky
                                       Manager

                                       AJW MASTER FUND, LTD.
                                       By:  First Street Manager II, LLC

                                       By: /s/ Corey S. Ribotsky
                                       -------------------------------------
                                       Corey S. Ribotsky
                                       Manager

                                       NEW MILLENNIUM CAPITAL PARTNERS II, LLC
                                       By:  First Street Manager II, LLC

                                       By: /s/ Corey S. Ribotsky
                                       -------------------------------------
                                       Corey S. Ribotsky
                                       Manager

                                       13

--------------------------------------------------------------------------------================================================================================

Exhibit 10.26
-------------

                    INTELLECTUAL PROPERTY SECURITY AGREEMENT

         Intellectual  Property Security Agreement (this "Agreement" dated as of
June 11,  2007,  by and among  Paradigm  Medical  Industries,  Inc.,  a Delaware
corporation (the "Company"),  and the secured parties signatory hereto and their
respective  endorsees,  transferees  and  assigns  (collectively,  the  "Secured
Party").

                              W I T N E S S E T H :

         WHEREAS,  pursuant to a Securities Purchase  Agreement,  dated the date
hereof,  between  Company  and the  Secured  Party (the  "Purchase  Agreement"),
Company  has  agreed to issue to the  Secured  Party and the  Secured  Party has
agreed to  purchase  from  Company  certain of  Company's  8%  Callable  Secured
Convertible  Notes, due three years from the date of issue (the "Notes"),  which
are convertible into shares of Company's Common Stock, par value $.001 per share
(the "Common Stock"). In connection  therewith,  Company shall issue the Secured
Party certain Common Stock purchase warrants (the "Warrants"); and

         WHEREAS,  in order to induce the Secured  Party to purchase  the Notes,
Company has agreed to execute and  deliver to the Secured  Party this  Agreement
for the  benefit  of the  Secured  Party  and to  grant  to it a first  priority
security interest in certain Intellectual Property (defined below) of Company to
secure the prompt payment, performance and discharge in full of all of Company's
obligations  under the Notes and  exercise  and  discharge  in full of Company's
obligations under the Warrants; and

         NOW, THEREFORE, in consideration of the agreements herein contained and
for other good and valuable consideration,  the receipt and sufficiency of which
is hereby acknowledged, the parties hereto hereby agree as follows:

              1. Defined Terms. Unless otherwise defined herein, terms which are
defined in the Purchase Agreement and used herein are so used as so defined; and
the following terms shall have the following meanings:

                     "Software Intellectual Property" shall mean:

                     (a) all  software  programs  (including  all  source  code,
object code and all related  applications  and data  files),  whether now owned,
upgraded,  enhanced,  licensed or leased or  hereafter  acquired by the Company,
above;

                     (b) all computers and electronic data  processing  hardware
and firmware associated therewith;

                     (c)  all  documentation   (including  flow  charts,   logic
diagrams,  manuals,  guides and  specifications)  with respect to such software,
hardware and firmware described in the preceding clauses (a) and (b); and

                     (d)  all  rights  with  respect  to all  of the  foregoing,
including, without limitation, any and all upgrades, modifications,  copyrights,
licenses, options, warranties, service contracts, program services, test rights,
maintenance  rights,  support  rights,  improvement  rights,  renewal rights and
indemnifications   and   substitutions,   replacements,   additions,   or  model
conversions of any of the foregoing.

                                       1
<PAGE>

                     "Copyrights"  shall mean (a) all copyrights,  registrations
and  applications  for  registration,  issued or filed,  including any reissues,
extensions or renewals thereof, by or with the United States Copyright Office or
any similar  office or agency of the United States,  any state  thereof,  or any
other country or political  subdivision  thereof, or otherwise,  including,  all
rights  in  and  to  the  material  constituting  the  subject  matter  thereof,
including, without limitation, any referred to in Schedule B hereto, and (b) any
rights in any material  which is  copyrightable  or which is protected by common
law,  United  States  copyright  laws or  similar  laws or any law of any State,
including, without limitation, any thereof referred to in Schedule B hereto.

                     "Copyright  License" shall mean any  agreement,  written or
oral,  providing  for a grant by the  Company  of any  right  in any  Copyright,
including, without limitation, any thereof referred to in Schedule B hereto.

                     "Intellectual  Property"  shall  means,  collectively,  the
Software Intellectual Property, Copyrights,  Copyright Licenses, Patents, Patent
Licenses, Trademarks, Trademark Licenses and Trade Secrets.

                     "Obligations" means all of the Company's  obligations under
this Agreement and the Notes, in each case,  whether now or hereafter  existing,
voluntary or involuntary, direct or indirect, absolute or contingent, liquidated
or  unliquidated,  whether or not jointly owed with  others,  and whether or not
from time to time  decreased or  extinguished  and later  decreased,  created or
incurred,  and all or any portion of such  obligations or  liabilities  that are
paid,  to the  extent all or any part of such  payment  is avoided or  recovered
directly  or  indirectly  from the  Secured  Party as a  preference,  fraudulent
transfer  or  otherwise  as  such  obligations  may  be  amended,  supplemented,
converted, extended or modified from time to time.

                     "Patents"  shall mean (a) all letters  patent of the United
States  or any other  country  or any  political  subdivision  thereof,  and all
reissues and extensions  thereof,  including,  without  limitation,  any thereof
referred to in Schedule B hereto, and (b) all applications for letters patent of
the United States and all  divisions,  continuations  and  continuations-in-part
thereof or any other country or any political  subdivision,  including,  without
limitation, any thereof referred to in Schedule B hereto.

                     "Patent License" shall mean all agreements, whether written
or oral, providing for the grant by the Company of any right to manufacture, use
or sell any invention covered by a Patent,  including,  without limitation,  any
thereof referred to in Schedule B hereto.

                     "Security  Agreement" shall mean the a Security  Agreement,
dated the date hereof between Company and the Secured Party.

                     "Trademarks"  shall mean (a) all  trademarks,  trade names,
corporate names, company names, business names, fictitious business names, trade
styles,  service marks, logos and other source or business identifiers,  and the
goodwill  associated  therewith,  now existing or hereafter adopted or acquired,
all  registrations  and recordings  thereof,  and all applications in connection

                                       2
<PAGE>

therewith,  whether in the United States  Patent and Trademark  Office or in any
similar  office or agency of the United  States,  any state thereof or any other
country or any political subdivision thereof, or otherwise,  including,  without
limitation,  any thereof referred to in Schedule B hereto, and (b) all reissues,
extensions or renewals thereof.

                     "Trademark  License" shall mean any  agreement,  written or
oral,  providing for the grant by the Company of any right to use any Trademark,
including, without limitation, any thereof referred to in Schedule B hereto.

                     "Trade  Secrets" shall mean common law and statutory  trade
secrets and all other  confidential or proprietary or useful information and all
know-how  obtained  by or used in or  contemplated  at any  time  for use in the
business of the Company (all of the foregoing being collectively called a "Trade
Secret"),  whether  or not such Trade  Secret  has been  reduced to a writing or
other tangible form, including all documents and things embodying, incorporating
or  referring  in any way to such  Trade  Secret,  all  Trade  Secret  licenses,
including  each Trade  Secret  license  referred  to in  Schedule B hereto,  and
including  the right to sue for and to enjoin  and to  collect  damages  for the
actual or threatened  misappropriation of any Trade Secret and for the breach or
enforcement of any such Trade Secret license.

              2. Grant of Security Interest.  In accordance with Section 3(m) of
the Security Agreement,  to secure the complete and timely payment,  performance
and  discharge  in  full,  as the case may be,  of all of the  Obligations,  the
Company  hereby,   unconditionally   and   irrevocably,   pledges,   grants  and
hypothecates  to the  Secured  Party,  a  continuing  security  interest  in,  a
continuing  first lien upon, an unqualified  right to possession and disposition
of and a right of set-off against,  in each case to the fullest extent permitted
by law, all of the Company's  right,  title and interest of whatsoever  kind and
nature in and to the Intellectual Property (the "Security Interest").

              3.  Representations and Warranties.  The Company hereby represents
and warrants, and covenants and agrees with, the Secured Party as follows:

                     (a) The  Company  has the  requisite  corporate  power  and
authority  to  enter  into  this  Agreement  and  otherwise  to  carry  out  its
obligations thereunder.  The execution,  delivery and performance by the Company
of this Agreement and the filings contemplated therein have been duly authorized
by all  necessary  action on the part of the  Company  and no further  action is
required by the Company.  This Agreement  constitutes a legal, valid and binding
obligation of the Company  enforceable in accordance  with its terms,  except as
enforceability  may  be  limited  by  bankruptcy,  insolvency,   reorganization,
moratorium  or similar laws  affecting  the  enforcement  of  creditor's  rights
generally.

                     (b) The  Company  represents  and  warrants  that it has no
place of business or offices where its  respective  books of account and records
are kept (other than temporarily at the offices of its attorneys or accountants)
or places where the  Intellectual  Property is stored or located,  except as set
forth on Schedule A attached hereto;

                                       3
<PAGE>

                     (c) The  Company  is the  sole  owner  of the  Intellectual
Property  (except  for  non-exclusive  licenses  granted  by the  Company in the
ordinary course of business),  free and clear of any liens,  security interests,
encumbrances,  rights or claims,  and is fully  authorized to grant the Security
Interest  in and to pledge  the  Intellectual  Property,  except as set forth on
Schedule D. There is not on file in any  governmental  or regulatory  authority,
agency or recording office an effective financing statement, security agreement,
license or transfer or any notice of any of the foregoing (other than those that
have  been  filed in favor of the  Secured  Party  pursuant  to this  Agreement)
covering or affecting any of the Intellectual  Property,  except as set forth on
Schedule D. So long as this Agreement shall be in effect,  the Company shall not
execute  and shall  not  knowingly  permit  to be on file in any such  office or
agency any such financing  statement or other document or instrument  (except to
the extent filed or recorded in favor of the Secured Party pursuant to the terms
of this  Agreement),  except as set forth on Schedule D, provided that the value
of the Intellectual Property covered by this Agreement along with the Collateral
(as  defined  in the  Security  Agreement)  is  equal  to at  least  150% of the
Obligations.

                     (d) The Company  shall at all times  maintain  its books of
account and records relating to the Intellectual Property at its principal place
of business and its Intellectual Property at the locations set forth on Schedule
A attached  hereto and may not relocate such books of account and records unless
it delivers to the Secured Party at least 30 days prior to such  relocation  (i)
written notice of such  relocation  and the new location  thereof (which must be
within the United  States) and (ii) evidence that the necessary  documents  have
been filed and  recorded and other steps have been taken to perfect the Security
Interest to create in favor of the Secured Party valid, perfected and continuing
first  priority  liens in the  Intellectual  Property  to the extent they can be
perfected through such filings.

                     (e) This Agreement  creates in favor of the Secured Party a
valid security  interest in the Intellectual  Property  securing the payment and
performance of the Obligations and, upon making the filings required  hereunder,
a perfected first priority security  interest in such  Intellectual  Property to
the extent that it can be perfected through such filings.

                     (f) Upon request of the Secured  Party,  the Company  shall
execute and deliver any and all agreements,  instruments,  documents, and papers
as the  Secured  Party may  request to evidence  the  Secured  Party's  security
interest in the Intellectual  Property and the goodwill and general  intangibles
of the Company relating thereto or represented  thereby,  and the Company hereby
appoints  the Secured  Party its  attorney-in-fact  to execute and file all such
writings for the  foregoing  purposes,  all acts of such  attorney  being hereby
ratified and confirmed; such power being coupled with an interest is irrevocable
until the Obligations have been fully satisfied and are paid in full.

                     (g)  Except  as set  forth on  Schedule  D, the  execution,
delivery and  performance  of this  Agreement  does not conflict with or cause a
breach or  default,  or an event  that with or  without  the  passage of time or
notice,  shall constitute a breach or default,  under any agreement to which the
Company  is a party or by which the  Company is bound.  No  consent  (including,
without limitation,  from stock holders or creditors of the Company) is required
for the Company to enter into and perform its obligations hereunder.

                                       4
<PAGE>
                     (h) The Company  shall at all times  maintain the liens and
Security  Interest  provided for hereunder as valid and perfected first priority
liens and security interests in the Intellectual Property to the extent they can
be perfected by filing in favor of the Secured  Party until this  Agreement  and
the Security  Interest  hereunder  shall  terminate  pursuant to Section 11. The
Company  hereby  agrees to defend  the same  against  any and all  persons.  The
Company shall safeguard and protect all Intellectual Property for the account of
the Secured Party. Without limiting the generality of the foregoing, the Company
shall  pay  all  fees,  taxes  and  other  amounts  necessary  to  maintain  the
Intellectual Property and the Security Interest hereunder, and the Company shall
obtain and furnish to the Secured  Party from time to time,  upon  demand,  such
releases  and/or  subordinations  of claims and liens  which may be  required to
maintain the priority of the Security Interest hereunder.

                     (i) The Company  will not  transfer,  pledge,  hypothecate,
encumber,  license (except for non-exclusive  licenses granted by the Company in
the  ordinary  course of  business),  sell or  otherwise  dispose  of any of the
Intellectual Property without the prior written consent of the Secured Party.

                     (j) The Company  shall,  within ten (10) days of  obtaining
knowledge thereof,  advise the Secured Party promptly,  in sufficient detail, of
any substantial  change in the Intellectual  Property,  and of the occurrence of
any  event  which  would  have a  material  adverse  effect  on the value of the
Intellectual Property or on the Secured Party's security interest therein.

                     (k) The  Company  shall  permit the  Secured  Party and its
representatives and agents to inspect the Intellectual Property at any time, and
to make  copies of records  pertaining  to the  Intellectual  Property as may be
requested by the Secured Party from time to time.

                     (l) The Company will take all steps reasonably necessary to
diligently pursue and seek to preserve,  enforce and collect any rights, claims,
causes  of  action  and  accounts  receivable  in  respect  of the  Intellectual
Property.

                     (m) The Company shall promptly  notify the Secured Party in
sufficient detail upon becoming aware of any attachment,  garnishment, execution
or other legal process levied against any Intellectual Property and of any other
information  received by the Company that may materially affect the value of the
Intellectual  Property,  the Security Interest or the rights and remedies of the
Secured Party hereunder.

                     (n)  All  information   heretofore,   herein  or  hereafter
supplied to the Secured Party by or on behalf of the Company with respect to the
Intellectual  Property is accurate and  complete in all material  respects as of
the date furnished.

                     (o)  Schedule A attached  hereto  contains a list of all of
the subsidiaries of Company.

                     (p) Schedule B attached hereto  includes all Licenses,  and
all Patents and Patent Licenses, if any, owned by the Company in its own name as
of the date hereof.  Schedule B hereto  includes all  Trademarks  and  Trademark

                                       5
<PAGE>

Licenses,  if any,  owned by the Company in its own name as of the date  hereof.
Schedule B hereto includes all Copyrights and Copyright Licenses,  if any, owned
by the Company in its own name as of the date hereof. Schedule B hereto includes
all Trade Secrets and Trade Secret Licenses,  if any, owned by the Company as of
the date hereof. To the best of the Company's knowledge,  each License,  Patent,
Trademark,   Copyright  and  Trade  Secret  is  valid,  subsisting,   unexpired,
enforceable and has not been abandoned.  Except as set forth in Schedule B, none
of such  Licenses,  Patents,  Trademarks,  Copyrights  and Trade  Secrets is the
subject of any  licensing or franchise  agreement.  To the best of the Company's
knowledge,   no  holding,   decision  or  judgment  has  been  rendered  by  any
Governmental  Body which would  limit,  cancel or question  the  validity of any
License, Patent, Trademark, Copyright and Trade Secrets . Except as set forth in
Schedule B, no action or proceeding  is pending (i) seeking to limit,  cancel or
question  the  validity of any License,  Patent,  Trademark,  Copyright or Trade
Secret,  or (ii) which, if adversely  determined,  would have a material adverse
effect  on the  value of any  License,  Patent,  Trademark,  Copyright  or Trade
Secret.  The Company has used and will  continue to use for the duration of this
Agreement,  proper  statutory  notice in connection with its use of the Patents,
Trademarks and Copyrights and consistent standards of quality in products leased
or sold under the Patents, Trademarks and Copyrights.

                     (q) With respect to any Intellectual Property:

                     (i) such  Intellectual  Property is subsisting  and has not
been adjudged invalid or unenforceable, in whole or in part;

                     (ii) such Intellectual Property is valid and enforceable;

                     (iii)  the  Company  has made  all  necessary  filings  and
recordations to protect its interest in such Intellectual  Property,  including,
without limitation,  recordations of all of its interests in the Patents, Patent
Licenses,  Trademarks  and  Trademark  Licenses in the United  States Patent and
Trademark  Office  and in  corresponding  offices  throughout  the world and its
claims to the Copyrights and Copyright  Licenses in the United States  Copyright
Office and in corresponding offices throughout the world;

                     (iv) other than as set forth in  Schedule B, the Company is
the exclusive owner of the entire and unencumbered  right, title and interest in
and to such  Intellectual  Property  and no claim  has been made that the use of
such Intellectual  Property infringes on the asserted rights of any third party;
and

                     (v) the Company has  performed and will continue to perform
all acts and has paid all  required  fees and taxes to  maintain  each and every
item of Intellectual  Property in full force and effect throughout the world, as
applicable.

                                       6
<PAGE>

                     (r) Except with respect to any Trademark or Copyright  that
the Company shall  reasonably  determine is of negligible  economic value to the
Company, the Company shall:

                     (i) maintain  each  Trademark  and  Copyright in full force
free from any claim of  abandonment  for  non-use,  maintain  as in the past the
quality of products  and services  offered  under such  Trademark or  Copyright;
employ such Trademark or Copyright with the appropriate  notice of registration;
not adopt or use any mark which is confusingly  similar or a colorable imitation
of such Trademark or Copyright unless the Secured Party shall obtain a perfected
security  interest  in such mark  pursuant to this  Agreement;  and not (and not
permit any licensee or  sublicensee  thereof to) do any act or knowingly omit to
do any act whereby any Trademark or Copyright may become invalidated;

                     (ii) not,  except with  respect to any Patent that it shall
reasonably  determine is of negligible economic value to it, do any act, or omit
to do any act, whereby any Patent may become abandoned or dedicated; and

                     (iii) notify the Secured Party  immediately if it knows, or
has reason to know, that any application or registration relating to any Patent,
Trademark or Copyright  may become  abandoned  or  dedicated,  or of any adverse
determination or development (including, without limitation, the institution of,
or any such determination or development in, any proceeding in the United States
Patent and  Trademark  Office,  United States  Copyright  Office or any court or
tribunal in any country)  regarding  its  ownership of any Patent,  Trademark or
Copyright or its right to register the same or to keep and maintain the same.

                     (s) Whenever  the Company,  either by itself or through any
agent,  employee,  licensee  or  designee,  shall  file an  application  for the
registration of any Patent, Trademark or Copyright with the United States Patent
and Trademark  Office,  United States  Copyright Office or any similar office or
agency in any other  country  or any  political  subdivision  thereof or acquire
rights to any new Patent,  Trademark  or  Copyright  whether or not  registered,
report such filing to the Secured Party within five business days after the last
day of the fiscal quarter in which such filing occurs.

                     (t) The Company  shall take all  reasonable  and  necessary
steps, including, without limitation, in any proceeding before the United States
Patent and  Trademark  Office,  United  States  Copyright  Office or any similar
office or agency in any other country or any political  subdivision  thereof, to
maintain and pursue each application  (and to obtain the relevant  registration)
and to maintain each  registration  of the Patents,  Trademarks and  Copyrights,
including, without limitation, filing of applications for renewal, affidavits of
use and affidavits of incontestability.

                                       7
<PAGE>

                     (u) In the event that any Patent,  Trademark  or  Copyright
included in the Intellectual  Property is infringed,  misappropriated or diluted
by a third party,  promptly notify the Secured Party after it learns thereof and
shall,  unless it shall  reasonably  determine  that such  Patent,  Trademark or
Copyright is of negligible  economic value to it, which  determination  it shall
promptly   report  to  the  Secured  Party,   promptly  sue  for   infringement,
misappropriation or dilution, to seek injunctive relief where appropriate and to
recover any and all damages for such infringement, misappropriation or dilution,
or take such other actions as it shall  reasonably  deem  appropriate  under the
circumstances  to protect such Patent,  Trademark or  Copyright.  If the Company
lacks the  financial  resources  to comply with this Section  3(t),  the Company
shall so notify the Secured Party and shall cooperate fully with any enforcement
action undertaken by the Secured Party on behalf of the Company.

              4. Defaults. The following events shall be "Events of Default":

                     (a) The  occurrence  of an Event of Default  (as defined in
the Notes) under the Notes;

                     (b) Any  representation  or warranty of the Company in this
Agreement or in the Security Agreement shall prove to have been incorrect in any
material respect when made;

                     (c) The failure by the Company to observe or perform any of
its obligations  hereunder or in the Security  Agreement for ten (10) days after
receipt by the Company of notice of such failure from the Secured Party; and

                     (d) Any breach of, or default under, the Warrants.

              5.  Duty To Hold In  Trust.  Upon the  occurrence  of any Event of
Default and at any time thereafter, the Company shall, upon receipt by it of any
revenue, income or other sums subject to the Security Interest,  whether payable
pursuant  to the  Notes  or  otherwise,  or of any  check,  draft,  note,  trade
acceptance  or other  instrument  evidencing  an obligation to pay any such sum,
hold the same in trust for the  Secured  Party and shall  forthwith  endorse and
transfer  any such  sums or  instruments,  or both,  to the  Secured  Party  for
application to the satisfaction of the Obligations.

              6. Rights and Remedies Upon Default.  Upon occurrence of any Event
of Default and at any time thereafter, the Secured Party shall have the right to
exercise all of the remedies  conferred  hereunder and under the Notes,  and the
Secured  Party shall have all the rights and  remedies of a secured  party under
the UCC and/or any other  applicable law (including the Uniform  Commercial Code
of any jurisdiction in which any Intellectual Property is then located). Without
limitation, the Secured Party shall have the following rights and powers:

                     (a)  The  Secured  Party  shall  have  the  right  to  take
possession of the Intellectual  Property and, for that purpose,  enter, with the
aid and assistance of any person, any premises where the Intellectual  Property,
or any part  thereof,  is or may be placed and remove the same,  and the Company
shall  assemble the  Intellectual  Property and make it available to the Secured

                                       8
<PAGE>

Party at places which the Secured Party shall reasonably select,  whether at the
Company's  premises or  elsewhere,  and make  available  to the  Secured  Party,
without rent,  all of the Company's  respective  premises and facilities for the
purpose of the  Secured  Party  taking  possession  of,  removing or putting the
Intellectual Property in saleable or disposable form.

                     (b) The  Secured  Party shall have the right to operate the
business of the Company using the Intellectual Property and shall have the right
to assign,  sell,  lease or otherwise  dispose of and deliver all or any part of
the Intellectual  Property, at public or private sale or otherwise,  either with
or without  special  conditions  or  stipulations,  for cash or on credit or for
future delivery, in such parcel or parcels and at such time or times and at such
place or places,  and upon such terms and  conditions  as the Secured  Party may
deem  commercially  reasonable,  all  without  (except as shall be  required  by
applicable statute and cannot be waived)  advertisement or demand upon or notice
to the Company or right of redemption of the Company, which are hereby expressly
waived. Upon each such sale, lease, assignment or other transfer of Intellectual
Property,  the Secured Party may,  unless  prohibited  by  applicable  law which
cannot be waived,  purchase all or any part of the  Intellectual  Property being
sold,  free from and discharged of all trusts,  claims,  right of redemption and
equities of the Company, which are hereby waived and released.

              7. Applications of Proceeds.  The proceeds of any such sale, lease
or other  disposition of the  Intellectual  Property  hereunder shall be applied
first, to the expenses of retaking,  holding, storing,  processing and preparing
for sale, selling, and the like (including,  without limitation, any taxes, fees
and other costs incurred in connection therewith) of the Intellectual  Property,
to the reasonable  attorneys' fees and expenses incurred by the Secured Party in
enforcing its rights  hereunder and in connection with  collecting,  storing and
disposing  of  the  Intellectual  Property,  and  then  to  satisfaction  of the
Obligations, and to the payment of any other amounts required by applicable law,
after which the Secured Party shall pay to the Company any surplus proceeds. If,
upon the sale,  license or other disposition of the Intellectual  Property,  the
proceeds  thereof are insufficient to pay all amounts to which the Secured Party
is legally  entitled,  the Company will be liable for the  deficiency,  together
with interest  thereon,  at the rate of 15% per annum (the "Default Rate"),  and
the  reasonable  fees of any attorneys  employed by the Secured Party to collect
such  deficiency.  To the extent permitted by applicable law, the Company waives
all claims,  damages and demands  against the Secured  Party  arising out of the
repossession,  removal,  retention or sale of the Intellectual Property,  unless
due to the gross negligence or willful misconduct of the Secured Party.

              8. Costs and Expenses. The Company agrees to pay all out-of-pocket
fees,  costs and  expenses  incurred  in  connection  with any  filing  required
hereunder, including without limitation, any financing statements,  continuation
statements,  partial releases and/or  termination  statements related thereto or
any  expenses of any  searches  reasonably  required by the Secured  Party.  The
Company  shall also pay all other  claims and  charges  which in the  reasonable
opinion of the Secured Party might  prejudice,  imperil or otherwise  affect the
Intellectual  Property or the Security Interest therein.  The Company will also,
upon  demand,  pay to the  Secured  Party the  amount of any and all  reasonable
expenses,  including the reasonable  fees and expenses of its counsel and of any
experts and agents, which the Secured Party may incur in connection with (i) the

                                       9
<PAGE>

enforcement of this Agreement,  (ii) the custody or preservation of, or the sale
of,  collection  from,  or  other  realization  upon,  any of  the  Intellectual
Property,  or (iii) the  exercise  or  enforcement  of any of the  rights of the
Secured Party under the Notes.  Until so paid, any fees payable  hereunder shall
be added to the  principal  amount of the Notes and shall bear  interest  at the
Default Rate.

              9. Responsibility for Intellectual  Property.  The Company assumes
all liabilities and responsibility in connection with all Intellectual Property,
and the obligations of the Company hereunder or under the Notes and the Warrants
shall in no way be affected or  diminished  by reason of the loss,  destruction,
damage or theft of any of the Intellectual  Property or its  unavailability  for
any reason.

              10. Security  Interest  Absolute.  All rights of the Secured Party
and  all   Obligations  of  the  Company   hereunder,   shall  be  absolute  and
unconditional,  irrespective of: (a) any lack of validity or  enforceability  of
this  Agreement,  the Notes,  the  Warrants  or any  agreement  entered  into in
connection with the foregoing,  or any portion hereof or thereof; (b) any change
in the time,  manner or place of payment or performance of, or in any other term
of, all or any of the  Obligations,  or any other  amendment or waiver of or any
consent to any  departure  from the Notes,  the Warrants or any other  agreement
entered into in connection  with the  foregoing;  (c) any  exchange,  release or
nonperfection of any of the Intellectual  Property,  or any release or amendment
or waiver of or consent to departure from any other  Intellectual  Property for,
or any guaranty, or any other security,  for all or any of the Obligations;  (d)
any action by the Secured Party to obtain, adjust, settle and cancel in its sole
discretion  any insurance  claims or matters made or arising in connection  with
the Intellectual  Property;  or (e) any other circumstance which might otherwise
constitute  any  legal or  equitable  defense  available  to the  Company,  or a
discharge of all or any part of the Security Interest granted hereby.  Until the
Obligations  shall  have  been paid and  performed  in full,  the  rights of the
Secured Party shall continue even if the  Obligations are barred for any reason,
including,  without  limitation,  the running of the statute of  limitations  or
bankruptcy.  The  Company  expressly  waives  presentment,  protest,  notice  of
protest,  demand, notice of nonpayment and demand for performance.  In the event
that at any  time any  transfer  of any  Intellectual  Property  or any  payment
received  by the  Secured  Party  hereunder  shall be deemed by final order of a
court of competent jurisdiction to have been a voidable preference or fraudulent
conveyance  under the  bankruptcy or insolvency  laws of the United  States,  or
shall be deemed to be otherwise  due to any party other than the Secured  Party,
then,  in any such event,  the  Company's  obligations  hereunder  shall survive
cancellation of this Agreement,  and shall not be discharged or satisfied by any
prior payment thereof and/or cancellation of this Agreement,  but shall remain a
valid  and  binding  obligation  enforceable  in  accordance  with the terms and
provisions  hereof. The Company waives all right to require the Secured Party to
proceed against any other person or to apply any Intellectual Property which the
Secured Party may hold at any time, or to marshal assets, or to pursue any other
remedy.  The Company waives any defense  arising by reason of the application of
the statute of limitations to any obligation secured hereby.

              11. Term of Agreement.  This  Agreement and the Security  Interest
shall terminate on the date on which all payments under the Notes have been made
in full and all  other  Obligations  have  been  paid or  discharged.  Upon such
termination,  the  Secured  Party,  at the  request  and at the  expense  of the
Company,  will join in executing any  termination  statement with respect to any
financing statement executed and filed pursuant to this Agreement.

                                       10
<PAGE>

              12. Power of Attorney; Further Assurances.

                     (a) The  Company  authorizes  the Secured  Party,  and does
hereby make,  constitute  and appoint it, and its respective  officers,  agents,
successors or assigns with full power of substitution, as the Company's true and
lawful  attorney-in-fact,  with  power,  in its own  name or in the  name of the
Company,  to, after the  occurrence  and during the  continuance  of an Event of
Default,  (i)  endorse  any  notes,  checks,  drafts,  money  orders,  or  other
instruments of payment  (including  payments  payable under or in respect of any
policy of insurance) in respect of the Intellectual  Property that may come into
possession  of the Secured  Party;  (ii) to sign and  endorse any UCC  financing
statement or any invoice,  freight or express bill,  bill of lading,  storage or
warehouse  receipts,  drafts against  debtors,  assignments,  verifications  and
notices  in  connection  with  accounts,  and other  documents  relating  to the
Intellectual  Property;  (iii)  to  pay  or  discharge  taxes,  liens,  security
interests or other  encumbrances  at any time levied or placed on or  threatened
against  the  Intellectual  Property;  (iv) to  demand,  collect,  receipt  for,
compromise,  settle  and sue  for  monies  due in  respect  of the  Intellectual
Property;  and (v) generally,  to do, at the option of the Secured Party, and at
the Company's  expense,  at any time, or from time to time,  all acts and things
which the Secured  Party deems  necessary to protect,  preserve and realize upon
the Intellectual  Property and the Security Interest granted therein in order to
effect the intent of this  Agreement,  the Notes and the Warrants,  all as fully
and  effectually  as the  Company  might or could  do;  and the  Company  hereby
ratifies all that said attorney  shall lawfully do or cause to be done by virtue
hereof.  This  power of  attorney  is  coupled  with an  interest  and  shall be
irrevocable  for the term of this Agreement and thereafter as long as any of the
Obligations shall be outstanding.

                     (b) On a continuing basis, the Company will make,  execute,
acknowledge,  deliver, file and record, as the case may be, in the proper filing
and recording places in any jurisdiction,  including,  without  limitation,  the
jurisdictions  indicated on Schedule C, attached hereto,  all such  instruments,
and take all such action as may reasonably be deemed necessary or advisable,  or
as reasonably  requested by the Secured Party, to perfect the Security  Interest
granted  hereunder  and  otherwise  to carry out the intent and purposes of this
Agreement,  or for assuring  and  confirming  to the Secured  Party the grant or
perfection of a security interest in all the Intellectual Property.

                     (c) The Company  hereby  irrevocably  appoints  the Secured
Party as the Company's  attorney-in-fact,  with full  authority in the place and
stead of the  Company and in the name of the  Company,  from time to time in the
Secured  Party's  discretion,  to take any action and to execute any  instrument
which the Secured  Party may deem  necessary  or  advisable  to  accomplish  the
purposes of this Agreement, including the filing, in its sole discretion, of one
or more financing or continuation statements and amendments thereto, relative to
any of the  Intellectual  Property  without the  signature of the Company  where
permitted by law.

              13.   Notices.   All   notices,   requests,   demands   and  other
communications  hereunder  shall be in  writing,  with  copies  to all the other
parties  hereto,  and  shall be  deemed  to have  been  duly  given  when (i) if

                                       11
<PAGE>

delivered by hand,  upon  receipt,  (ii) if sent by  facsimile,  upon receipt of
proof of  sending  thereof,  (iii) if sent by  nationally  recognized  overnight
delivery service (receipt requested), the next business day or (iv) if mailed by
first-class  registered or certified  mail,  return receipt  requested,  postage
prepaid, four days after posting in the U.S. mails, in each case if delivered to
the following addresses:

If to the Company:              Paradigm Medical Industries, Inc.
                                2355 South 1070 West
                                Salt Lake City, UT 84119
                                Attention: Chief Executive Officer
                                Telephone:        (801) 977-8970
                                Facsimile:        (801) 977-8973

With a copy to:                 Mackey Price Thompson & Ostler
                                350 American Plaza II
                                57 West 200 South
                                Salt Lake City, UT 84101
                                Attention:   Randall A. Mackey, Esq.
                                Telephone:  (801) 575-5000
                                Facsimile:   (801) 575-5006

If to the Secured Party:        AJW Partners, LLC
                                AJW Master Fund, Ltd.
                                New Millennium Capital Partners II, LLC
                                1044 Northern Boulevard
                                Suite 302
                                Roslyn, New York 11576
                                Attention:  Corey Ribotsky
                                Facsimile:  516-739-7115

With copies to:                 Ballard Spahr Andrews & Ingersoll, LLP
                                1735 Market Street, 51st Floor
                                Philadelphia, Pennsylvania  19103
                                Attention:  Gerald J. Guarcini, Esquire
                                Facsimile: 215-864-8999

              14. Other Security.  To the extent that the Obligations are now or
hereafter  secured by property  other than the  Intellectual  Property or by the
guarantee,  endorsement  or property of any other person,  firm,  corporation or
other  entity,  then  the  Secured  Party  shall  have  the  right,  in its sole
discretion, to pursue, relinquish,  subordinate, modify or take any other action
with respect  thereto,  without in any way  modifying  or  affecting  any of the
Secured Party's rights and remedies hereunder.

                                       12
<PAGE>

              15. Miscellaneous.

                     (a) No  course  of  dealing  between  the  Company  and the
Secured Party, nor any failure to exercise, nor any delay in exercising,  on the
part of the Secured Party, any right, power or privilege  hereunder or under the
Notes  shall  operate  as a waiver  thereof;  nor  shall any  single or  partial
exercise of any right, power or privilege  hereunder or thereunder  preclude any
other or further exercise  thereof or the exercise of any other right,  power or
privilege.

                     (b) All of the rights and  remedies  of the  Secured  Party
with respect to the Intellectual Property,  whether established hereby or by the
Notes or by any other  agreements,  instruments  or documents or by law shall be
cumulative and may be exercised singly or concurrently.

                     (c) This  Agreement and the Security  Agreement  constitute
the entire  agreement of the parties with respect to the subject  matter  hereof
and  is  intended  to  supersede  all  prior  negotiations,  understandings  and
agreements  with  respect  thereto.  Except  as  specifically  set forth in this
Agreement, no provision of this Agreement may be modified or amended except by a
written  agreement  specifically  referring to this  Agreement and signed by the
parties hereto.

                     (d) In the event that any  provision  of this  Agreement is
held to be invalid,  prohibited or  unenforceable  in any  jurisdiction  for any
reason,  unless  such  provision  is narrowed  by  judicial  construction,  this
Agreement  shall,  as to such  jurisdiction,  be construed  as if such  invalid,
prohibited or unenforceable  provision had been more narrowly drawn so as not to
be invalid, prohibited or unenforceable.  If, notwithstanding the foregoing, any
provision of this Agreement is held to be invalid,  prohibited or  unenforceable
in  any  jurisdiction,  such  provision,  as  to  such  jurisdiction,  shall  be
ineffective to the extent of such  invalidity,  prohibition or  unenforceability
without  invalidating  the  remaining  portion  of such  provision  or the other
provisions   of  this   Agreement   and  without   affecting   the  validity  or
enforceability  of such  provision or the other  provisions of this Agreement in
any other jurisdiction.

                     (e) No waiver of any breach or  default or any right  under
this  Agreement  shall be  considered  valid unless in writing and signed by the
party  giving such  waiver,  and no such waiver  shall be deemed a waiver of any
subsequent breach or default or right,  whether of the same or similar nature or
otherwise.

                     (f) This  Agreement  shall be binding upon and inure to the
benefit of each party hereto and its successors and assigns.

                     (g) Each party shall take such  further  action and execute
and deliver such further  documents as may be necessary or  appropriate in order
to carry out the provisions and purposes of this Agreement.

                     (h) This  Agreement  shall be construed in accordance  with
the laws of the State of New York, except to the extent the validity, perfection
or  enforcement  of a security  interest  hereunder in respect of any particular
Intellectual  Property which are governed by a jurisdiction other than the State
of New York in which  case such law shall  govern.  Each of the  parties  hereto
irrevocably submit to the exclusive jurisdiction of any New York State or United

                                       13
<PAGE>

States  Federal court sitting in Manhattan  county over any action or proceeding
arising out of or  relating to this  Agreement,  and the parties  hereto  hereby
irrevocably agree that all claims in respect of such action or proceeding may be
heard and determined in such New York State or Federal court. The parties hereto
agree that a final judgment in any such action or proceeding shall be conclusive
and may be enforced  in other  jurisdictions  by suit on the  judgment or in any
other manner  provided by law. The parties hereto further waive any objection to
venue in the State of New York and any  objection to an action or  proceeding in
the State of New York on the basis of forum non conveniens.

                     (i) EACH PARTY HERETO HEREBY AGREES TO WAIVE ITS RESPECTIVE
RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING OUT
OF THIS AGREEMENT.  THE SCOPE OF THIS WAIVER IS INTENDED TO BE ALL  ENCOMPASSING
OF ANY  DISPUTES  THAT MAY BE FILED IN ANY COURT AND THAT  RELATE TO THE SUBJECT
MATER OF THIS AGREEMENT,  INCLUDING  WITHOUT  LIMITATION  CONTRACT CLAIMS,  TORT
CLAIMS,  BREACH OF DUTY CLAIMS AND ALL OTHER  COMMON LAW AND  STATUTORY  CLAIMS.
EACH PARTY HERETO  ACKNOWLEDGES  THAT THIS WAIVER IS A MATERIAL  INDUCEMENT  FOR
EACH PARTY TO ENTER INTO A BUSINESS  RELATIONSHIP,  THAT EACH PARTY HAS  ALREADY
RELIED ON THIS WAIVER IN ENTERING  INTO THIS  AGREEMENT AND THAT EACH PARTY WILL
CONTINUE TO RELY ON THIS WAIVER IN THEIR  RELATED  FUTURE  DEALINGS.  EACH PARTY
FURTHER  WARRANTS AND REPRESENTS THAT IT HAS REVIEWED THIS WAIVER WITH ITS LEGAL
COUNSEL,  AND THAT SUCH PARTY HAS KNOWINGLY AND VOLUNTARILY WAIVES ITS RIGHTS TO
A JURY TRIAL FOLLOWING SUCH  CONSULTATION.  THIS WAIVER IS IRREVOCABLE,  MEANING
THAT,  NOTWITHSTANDING  ANYTHING HEREIN TO THE CONTRARY,  IT MAY NOT BE MODIFIED
EITHER  ORALLY OR IN  WRITING,  AND THIS WAIVER  SHALL  APPLY TO ANY  SUBSEQUENT
AMENDMENTS,  RENEWALS AND SUPPLEMENTS OR MODIFICATIONS TO THIS AGREEMENT. IN THE
EVENT OF A LITIGATION,  THIS  AGREEMENT  MAY BE FILED AS A WRITTEN  CONSENT TO A
TRIAL BY THE COURT.

                     (j)  This  Agreement  may  be  executed  in any  number  of
counterparts,  each of which when so executed  shall be deemed to be an original
and, all of which taken together shall constitute one and the same Agreement. In
the event that any  signature  is  delivered  by  facsimile  transmission,  such
signature shall create a valid binding  obligation of the party executing (or on
whose behalf such signature is executed) the same with the same force and effect
as if such facsimile signature were the original thereof.

                  [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

                                       14
<PAGE>

         IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed on the day and year first above written.

                                       PARADIGM MEDICAL INDUSTRIES, INC.

                                       By: /s/ Raymond P.L. Cannefax
                                       --------------------------------------
                                       Raymond P.L. Cannefax
                                       President and Chief Executive Officer

                                       AJW PARTNERS, LLC
                                       By: SMS Group, LLC

                                       /s/ Corey S. Ribotsky
                                       --------------------------------------
                                       Corey S. Ribotsky
                                       Manager

                                       AJW MASTER FUND, LTD.
                                       By:  First Street Manager II, LLC

                                       By: /s/ Corey S. Ribotsky
                                       --------------------------------------
                                       Corey S. Ribotsky
                                       Manager

                                       NEW MILLENNIUM CAPITAL PARTNERS II, LLC
                                       By:  First Street Manager II, LLC

                                       By:  /s/ Corey S. Ribotsky
                                       --------------------------------------
                                       Corey S. Ribotsky
                                       Manager

                                       15

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