PARADIGM MEDICAL INDUSTRIES INC
INDEMNIFICATION AGREEMENT
<DOCUMENT>
<TYPE>EX-10.5
<SEQUENCE>6
<FILENAME>0006.txt
<DESCRIPTION>INDEMNIFICATION AGREEMENT
<TEXT>


                            INDEMNIFICATION AGREEMENT


     This Indemnification Agreement (this "Indemnification  Agreement") dated as
of June ____,  2000, is entered into by and among Paradigm  Medical  Industries,
Inc., a Delaware corporation  ("Paradigm" or the "Buyer"),  Paradigm Subsidiary,
Inc.,  a  Delaware   corporation   and  wholly  owned   subsidiary  of  Paradigm
("Subsidiary"),  Vismed, Inc., d/b/a Dicon, a California  corporation  "(Dicon")
and the undersigned  principal  shareholders of Dicon (the "Dicon Shareholders")
(Paradigm,   Subsidiary,   Dicon  and  Dicon  Shareholders   collectively,   the
"Parties").

                     W I T N E S S E T H :

     WHEREAS,  prior  to  the  execution  of  this  Indemnification   Agreement,
Paradigm,  Subsidiary  and Dicon  have  entered  into an  Agreement  and Plan of
Reorganization  of even date herewith (the "Plan of  Reorganization")  providing
for certain representations,  warranties,  and agreements in connection with the
transaction contemplated; and

     WHEREAS,  the boards of directors of  Paradigm,  Subsidiary  and Dicon have
approved the acquisition of Dicon by Paradigm; and

     WHEREAS,  the boards of directors of  Paradigm,  Subsidiary  and Dicon have
approved the merger of Subsidiary  into Dicon (the  "Merger") upon the terms and
subject to the conditions set forth in the Plan of  Reorganization  and pursuant
to which Dicon will become a wholly owned subsidary of Paradigm; and

     WHEREAS, the Plan of Reorganization  provides that after the Effective Time
of the Merger,  the holders of Dicon Common,  pro rata in accordance  with their
ownership of Dicon Common as of the Effective Time of the Merger,  shall succeed
to  Dicon's   indemnification   rights  and   obligations   under  the  Plan  of
Reorganization; and

     WHEREAS,  the  obligation  of  Paradigm  to proceed  with the  transactions
contemplated  by the Plan of  Reorganization  is subject to, among other things,
the condition that the Dicon Shareholders execute this Indemnification Agreement
whereby the Dicon Shareholders shall expressly agree to be obligated for Dicon's
indemnification obligations under the Plan of Reorganization.

     NOW,  THEREFORE,  for good and  valuable  consideration,  the  receipt  and
sufficiency of which are hereby acknowledged, the parties agree as follows:

<PAGE>

                                    ARTICLE 1

                                   DEFINITIONS

1.1 Certain Terms Defined. The terms defined in the Plan of Reorganization shall
for all purposes of this  Indemnification  Agreement have the meanings specified
in the Plan of  Reorganization,  unless the context  expressly  or by  necessary
implication otherwise requires.


                                    ARTICLE 2

                             AGREEMENT TO INDEMNIFY

2.1  Indemnification  by  Dicon  Shareholders.  Effective  upon  and  after  the
Effective  Time of the Merger,  the Dicon  Shareholders,  pro rata in accordance
with their  ownership  of Dicon Common as of the  Effective  Time of the Merger,
hereby  expressly  assume and agree to be obligated for Dicon's  indemnification
obligations under the Plan of Reorganization. Without limiting the generality of
the foregoing  sentence,  Dicon Shareholders hereby expressly agree to indemnify
and hold harmless  Paradigm and Subsidiary  against and in respect of any direct
out-of-pocket loss, damage, or expense arising out of:

     (a) Any claim, liability, or obligation suffered or incurred by Paradigm or
Subsidiary  resulting from or arising out of any  misrepresentation,  breach, or
non-fulfillment of any representation,  warranty,  covenant, or agreement on the
part of Dicon contained in the Plan of Reorganization; and

     (b) All actions, suits, investigations,  proceedings, demands, assessments,
judgments,  reasonable  attorney's fees, direct out-of-pocket costs and expenses
incident  to the  foregoing,  including  (but  not  limited  to)  any  audit  or
investigation by any governmental entity.

2.2  Survival  of  Obligation  to  Indemnify.  The  provisions  in the  Plan  of
Reorganiization  dealing  with  indemnification  including,  but not limited to,
provisions dealing with the survival of the indemnification obligations of Dicon
and notice and procedure requirements shall apply equally to the indemnification
obligations  of  Dicon  Shareholders  under  this   Indemnification   Agreement.
Accordingly,  it is agreed that after the maximum aggregate amount for which any
shareholder  of Dicon  Common is required to  indemnify  Paradigm or  Subsidiary
pursuant to this Indemnification  Agreement and the Plan of Reorganization shall
not exceed such  shareholder's Pro Rata  Indemnification  Obligation (as defined
below). A shareholder's Pro Rata Indemnification  Obligation shall be determined
by multiplying (x) the Indemnity Amount by (y) the quotient of (A) the number of

                                      2
<PAGE>

shares  of  Paradigm  Common  paid  to  such  shareholder   under  the  Plan  of
Reorganization,  divided by (B) the total  number of shares of  Paradigm  Common
paid  to  shareholders  of  Dicon  Common   hereunder  as  part  of  the  Merger
Consideration.  Each  of  the  undersigned  Dicon  Shareholders  represents  and
warrants  that the  number of shares of Dicon  Common  owned by him or it is set
forth following his or its signature.


                                    ARTICLE 3

                                  MISCELLANEOUS

3.1 Termination; Expenses. This Indemnification Agreement shall terminate in the
event of and upon termination of the Plan of Reorganization.

3.2 Prior Agreements;  Modifications. This Indemnification Agreement the Plan of
Reorganization  constitute the entire agreement between the parties with respect
to the  subject  matter  hereof,  and  shall  supersede  all  prior  agreements,
documents, or other instruments with respect to the matters covered hereby. This
Agreement may be amended by an  instrument  in writing  signed by each of Dicon,
Dicon Shareholders, Subsidiary and Paradigm.

3.3 Captions  and Table of Contents.  The captions and table of contents in this
Indemnification Agreement are for convenience only and shall not be considered a
part of or affect the  construction or  interpretation  of any provision of this
Indemnification Agreement.

3.4 Governing Law. The terms of this Indemnification Agreement shall be governed
by, and interpreted and construed in accordance with the provisions of, the laws
of the State of Delaware without regard to its conflicts of law principles.

3.5 Counterparts.  This Indemnification  Agreement may be executed in any number
of counterparts,  each of which, when so executed,  shall constitute an original
copy hereof.

3.6 Severability.  If any clause,  provision, or section of this Indemnification
Agreement is ruled illegal,  invalid, or unenforceable by any court of competent
jurisdiction,  the invalidity or unenforceability of such clause,  provision, or
section shall not affect any of the remaining provisions hereof.

3.7 Notices.  Any notice,  request,  instruction,  or other document to be given
hereunder  shall  be in  writing  and  shall  be  transmitted  by  certified  or
registered mail, postage prepaid,  by reputable express courier, or by facsimile
transmission.  The  addresses  or  facsimile  telephone  numbers  to which  such
communications shall be sent are as follows:

                                       3
<PAGE>


If to Dicon:
       10373 Roselle Street
       San Diego, California 92121
       Attention: Mark R. Miehle, President and
       Chief Executive Officer
       Facsimile Number:

       With a copy to:

       Luce, Forward, Hamilton & Scripps LLP
       600 West Broadway, Suite 2600
       San Diego, California 92101
       Attention: Dennis J. Doucette, Esq.
       Facsimile Number:


If to Paradigm or Subsidiary:

       2355 South 1070 West
       Salt Lake City, Utah  84119
       Attention: Thomas F. Motter, President and
       Chief Executive Officer
       Facsimile Number:

       With a copy to:

       Mackey, Price & Williams
       170 South Main Street, Suite 900
       Salt Lake City, Utah  84101-1655
       Attention: Randall A. Mackey, Esq.
       Facsimile Number: (801) 575-5006

If to Dicon Shareholders:

       To their respective addresses or facsimile telephone numbers
       following their signatures below.

or to such other  address or  facsimile  telephone  number as any party may from
time to time designate to the others in writing.

                                       4
<PAGE>


3.8 Waiver.  The  performance of any covenant or agreement or the fulfillment of
any condition of this  Indemnification  Agreement by Dicon  Shareholders  may be
expressly  waived only in writing by  Paradigm.  Any waiver  hereunder  shall be
effective only in the specific  instance and for the purpose for which given. No
failure or delay on the part of Paradigm or Subsidiary in exercising  any right,
power, or privilege under this Agreement shall operate as a waiver thereof,  nor
shall any single or partial exercise of any right, power, or privilege hereunder
preclude  any other or further  exercise  thereof or the  exercise  of any other
right, power, or privilege.  The rights and remedies expressly specified in this
Indemnification  Agreement are cumulative and are not exclusive of any rights or
remedies which either party would otherwise have.

3.9  Attorney's  Fees.  In the event any party hereto  institutes  litigation to
enforce its rights or remedies under this Indemnification  Agreement,  the party
prevailing  in such  litigation  shall be  entitled to receive an award from the
non-prevailing  party of the prevailing party's  reasonable  attorney's fees and
costs incurred in connection with such  litigation.  The foregoing shall include
reasonable attorney's fees and costs incurred at trial, on any appeal and in any
proceeding in bankruptcy.

3.10 Consent to Jurisdiction.  Each of the Parties  irrevocably  consents to the
non-exclusive  jurisdiction  of the  courts of the State of Utah  located in the
County of Salt Lake,  and of the United  States  District  Court for the Central
District of Utah for purposes of any suit,  action,  or  proceeding  relating to
this  Indemnification  Agreement  or the  Plan  of  Reorganization  (a  "Related
Proceeding") and irrevocably waives, to the fullest extent it may effectively do
so,  (i) any  objection  it may  have to the  laying  of  venue  of any  Related
Proceeding in any such court,  and (ii) the defense of an inconvenient  forum to
the maintenance of any Related Proceeding in any such court. IN WITNESS WHEREOF,
each of the parties  hereto,  intending  to be legally  bound  hereby,  has duly
executed this Indemnification Agreement as of the date first written above.

                                       5
<PAGE>

            Dicon:

                              VISMED, INC., d/b/a DICON


                              By:   /s/ Mark H. Miehle
                                   --------------------
                              Mark H. Miehle, President and
                              and Chief Executive Officer

            Paradigm:

                              PARADIGM MEDICAL INDUSTRIES, INC.


                              By:    /s/ Thomas F. Motter
                                     --------------------
                              Thomas F. Motter, President and
                              Chief Executive Officer

            Subsidiary:

                              PARADIGM SUBSIDARY, INC.


                              By: /s/ Thomas F. Motter
                                  ----------------------
                              Thomas F. Motter, President and
                              Chief Executive Officer

            Dicon Shareholders:

                            POLYCARE OPTICAL


                            By: /s/ Sammy Simarco
                                -----------------------
                            Its:_________________________
                            Number of Shares Owned: 4,509,868
                            Facsimile Telephone Number:
                            Address:

                                       6
<PAGE>


                            /s/ Mark R. Miehle
                            ------------------
                            Mark R. Miehle
                            Number of Shares Owned: 327,560
                            Facsimile Telephone Number:
                            Address:



                            /s/ Neil Davis
                            -----------------
                            Neil Davis
                            Number of Shares Owned: 240,000
                            Facsimile Telephone Number:
                            Address:

                            RH CAPITAL ASSOCIATES


                            /s/ Robert Horwitz
                            --------------------
                            ___________________________
                            Its:_______________________
                            Number of Shares Owned: 152,667
                            Facsimile Telephone Number:
                            Address:

                            Eberhardt Family Trust
                            (UTD) dated 3/12/92


                            By: ________________________
                            Richard Eberhardt, Trustee
                            Number of Shares Owned:86,670
                            Facsimile Telephone Number:
                            Address:



                             /s/ George Mansfield
                             ------------------------
                            George Mansfield
                            Number of Shares Owned: 114,000
                            Facsimile Telephone Number:
                            Address:

                                      7
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