February 23, 2000
VIA FACSIMILE (805) 541-0821
AND FEDERAL EXPRESS
Dr. Michael B. Limberg
1270 Peach Street
San Luis Obispo, California 93401
Re: Consulting Agreement with Paradigm Medical Industries, Inc.
Dear Dr. Limberg:
We represent Paradigm Medical Industries, Inc. (the "Company").
Reference is made to the agreement dated December 18, 1998 (the "Agreement"),
between you and the Company which has been incorporated into the Consulting
Agreement, dated December 1, 1998 (the "Consulting Agreement"), between you and
the Company.
The term of the Agreement is for six months, beginning December 1,
1998, with successive six month renewal periods. You and the Company previously
agreed to extend the term of the Agreement for an additional six month period
from June 1, 1999, to November 30, 1999 (the "First Renewal Period"), and now
desire to extend the Agreement for an additional six month period from December
1, 1999, to May 30, 2000 (the "Second Renewal Period"). Accordingly, the parties
agree to extend the Agreement for an additional six month period during the
Second Renewal Period upon the following terms and conditions:
1. The Company agrees to issue you 2,000 shares of its common stock
each month during the Second Renewal Period of the Agreement in consideration
for your providing services to the Company pursuant to the Consulting Agreement.
These shares will be restricted and will be issued to you on a quarterly basis.
As restricted shares each certificate shall bear a legend substantially similar
to the following legend until (a) such securities have been registered under the
Securities Act of 1933, as amended, and effectually been disposed of in
accordance with a registration statement; or (b) in the opinion of counsel for
the Company that such securities may be sold without registration under Rule 144
of the General Rules and Regulations of the Securities Act of 1933, as amended,
as well as any applicable "Blue Sky" or state securities laws:
<PAGE>
Dr. Michael B. Limberg
February 23, 2000
Page 3
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THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933, AS AMENDED (THE "SECURITIES ACT") AND MAY NOT BE OFFERED, SOLD,
PLEDGED, HYPOTHECATED, ASSIGNED OR TRANSFERRED EXCEPT (i) PURSUANT TO A
REGISTRATION STATEMENT UNDER THE SECURITIES ACT WHICH HAS BECOME
EFFECTIVE AND IS CURRENT WITH RESPECT TO THESE SECURITIES, OR (ii)
PURSUANT TO A SPECIFIC EXEMPTION FROM REGISTRATION UNDER THE SECURITIES
ACT BUT ONLY UPON A HOLDER THEREOF FIRST HAVING OBTAINED THE WRITTEN
OPINION OF COUNSEL OF THE COMPANY, OR OTHER COUNSEL REASONABLY
ACCEPTABLE TO THE COMPANY, THAT THE PROPOSED DISPOSITION IS CONSISTENT
WITH ALL APPLICABLE PROVISIONS OF THE SECURITIES ACT AS WELL AS ANY
APPLICABLE "BLUE SKY" OR OTHER STATE SECURITIES LAWS.
2. The Company agrees to grant you warrants to purchase 50,000 shares
of its common stock at an exercise price of $4.75 per share. These warrants
shall vest as of May 30, 2000, in consideration for the services that you will
be providing to the Company during the Second Renewal Period.
3. The Company agrees to register for resale at no expense to you the
following securities: (a) 100,000 shares of common stock that are issuable to
you upon the exercise of the warrants which were granted to you for services you
performed for the Company under the Consulting Agreement during the period from
December 1, 1998, to November 30, 1999; and (b) 50,000 shares of common stock
that are issuable to you upon the exercise of the warrants which are to be
granted to you for services you will be performing for the Company under the
Consulting Agreement during the Second Renewal Period.
4. The Company agrees to file a registration statement with the U.S.
Securities and Exchange Commission within 60 days from the date of this letter
in order to register for resale the shares of common stock issuable to you upon
the exercise of the warrants set forth in paragraphs 2 and 3 above.
5. You and the Company agree to terminate the letter agreement of
November 25, 1999, between you and the Company, a copy of which is attached
hereto as Exhibit "A" and by this reference made a part hereof.
6. All other terms of the Agreement and the Consulting Agreement shall
remain the same in all respects.
<PAGE>
If the foregoing conforms to your understanding, please sign, date and
return to us the enclosed copy of this letter.
Very truly yours,
/s/ Randall A. Mackey
---------------------
Randall A. Mackey
The foregoing is in conformity with our understanding:
PARADIGM MEDICAL INDUSTRIES, INC.
By: /s/ Thomas F. Motter
--------------------
Thomas F. Motter
Its: President and Chief Executive Officer
DATED: February 24, 2000
By: /s/ Michael B. Limberg, MD
--------------------------
Dr. Michael B. Limberg
DATED: February 28, 2000
