February 7, 2001
VIA FEDERAL EXPRESS
Xx. Xxxxxxx X. Xxxxxxx
0000 Xxxxx Xxxxxx
Xxx Xxxx Xxxxxx, Xxxxxxxxxx 00000
Re: Consulting Agreement with Paradigm Medical Industries, Inc.
Dear Xx. Xxxxxxx:
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 additional six month periods from
June 1, 1999 to November 30, 1999 (the "First Renewal Period"), from December 1,
1999 to May 31, 2000 (the "Second Renewal Period"), and from June 1, 2000 to
November 30, 2000 (the "Third Renewal Period") and now desire to extend the
Agreement for an additional six month period from December 1, 2000 to May 31,
2001 (the "Fourth Renewal Period"). Accordingly, the parties agree to extend the
Agreement for an additional six month period during the Fourth Renewal Period
upon the following terms and conditions:
Xx. Xxxxxxx X. Xxxxxxx
February 7, 2001
Page [PG NUMBER]
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1. The Company agrees to issue you 2,000 shares of its common stock
each month during the Fourth 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:
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 $4.00 per share. These warrants
shall vest as of May 31, 2001, in consideration for the services that you will
be providing to the Company during the Fourth Renewal Period, and be exercisable
for a period of ten (10) years from the effective date that the warrants are
granted, which is the beginning date of the Fourth Renewal Period. All previous
warrants granted to you which have not been exercised as of the date hereof
shall be modified such that they are each exercisable for ten (10) years from
the date of grant.
3. The Company agrees to register for resale at no expense to you the
following securities: (a) 200,000 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, 2000; (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 Fourth Renewal Period; (c) 63,580 shares of common stock
which were issued to you for services that you performed for the Company under
the Consulting Agreement during the period from December 1, 1998 to November 30,
2000 as well as for services prior to December 1, 1998; and (d) 12,000 shares of
common stock that are issuable to you for services which you will be performing
for the Company under the Consulting Agreement during the Fourth Renewal Period.
4. The Company agrees to file a registration statement with the U.S.
Securities and Exchange Commission within 90 days from the date of this letter
in order to register for resale the shares of common stock issuable to you as
set forth in paragraph 3 above.
5. The Company agrees to furnish you for exclusive use on a consignment
basis for a two (2) year period one Ultrasound Biomicroscope Plus, Model P-45
UBM Plus (the "Biomicroscope Plus"). You agree to return the Biomicroscope Plus
in satisfactory condition within two (2) years after delivery. You also agree to
pay the packaging and shipping costs associated with the return of the
Biomicroscope Plus to the Company.
6. All other terms of the Agreement and the Consulting Agreement shall
remain the same in all respects.
If the foregoing conforms to your understanding, please sign, date and
return to us the enclosed copy of this letter.
Very truly yours,
Xxxxxxx X. Xxxxxx
The foregoing is in conformity with our understanding:
PARADIGM MEDICAL INDUSTRIES, INC.
By: /s/ Xxxxxx X. Xxxxxx
------------------------------------------------------------
Xxxxxx X. Xxxxxx
Its: Chairman and Chief Executive Officer
DATED: February _7_, 2001
/s/ Xx. Xxxxxxx X. Xxxxxxx
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Xx. Xxxxxxx X. Xxxxxxx
DATED: February _9__, 2001
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