-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, RwzfIac4HI0MZSYxNcBtp/2GvnFoM9NRGArsRjzkuzbyIrzUUEDo6OyLSeXDop7s 91g8QPfyPXnonlGC2gMxqw== 0000950135-97-004450.txt : 19971114 0000950135-97-004450.hdr.sgml : 19971114 ACCESSION NUMBER: 0000950135-97-004450 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 4 CONFORMED PERIOD OF REPORT: 19970930 FILED AS OF DATE: 19971112 SROS: NASD FILER: COMPANY DATA: COMPANY CONFORMED NAME: SIGHT RESOURCE CORP CENTRAL INDEX KEY: 0000895651 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-HEALTH SERVICES [8000] IRS NUMBER: 043181524 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: SEC FILE NUMBER: 000-21068 FILM NUMBER: 97713614 BUSINESS ADDRESS: STREET 1: 67 SOUTH BEFORD ST CITY: BURLINGTON STATE: MA ZIP: 01803 BUSINESS PHONE: 6172291100 MAIL ADDRESS: STREET 1: 67 SOUTH BEDFORD ST CITY: BURLINGTON STATE: MA ZIP: 01803 FORMER COMPANY: FORMER CONFORMED NAME: NEWVISION TECHNOLOGY INC DATE OF NAME CHANGE: 19940224 10-Q 1 SIGHT RESOURCE CORPORATION 1 SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For Quarterly Period Ended SEPTEMBER 30, 1997 Commission File Number 0-21068 SIGHT RESOURCE CORPORATION - -------------------------------------------------------------------------------- (Exact name of Registrant as specified in its charter) Delaware 04-3181524 - -------------------------------------------------------------------------------- (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) 100 Jeffrey Avenue Holliston, MA 01746 - -------------------------------------------------------------------------------- (Address of principal executive offices) 508-429-6916 - -------------------------------------------------------------------------------- (Issuer's telephone number) Registrant formerly located at N/A - -------------------------------------------------------------------------------- (Former name, former address and former fiscal year, if changed since the last report) Check whether the issuer (1) filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the past 12 months (or for such shorter period that the issuer was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes X No --- --- APPLICABLE ONLY TO CORPORATE ISSUERS: State the number of shares outstanding of each of the issuer's classes of common equity, as of the latest practicable date: On November 5, 1997, 8,756,500 shares of common stock, par value $0.01 per share, were outstanding. TOTAL PAGES 15 EXHIBIT INDEX AT PAGE 14 2 SIGHT RESOURCE CORPORATION INDEX
PART I. FINANCIAL INFORMATION PAGE ---- Item 1 Financial Statements Consolidated Balance Sheet as of September 30, 1997, and December 31, 1996 3 Consolidated Statement of Operations for the Three and Nine Months Ended September 30, 1997 and 1996 4 Consolidated Statement of Cash Flows for the Nine Months Ended September 30, 1997 and 1996 5 Notes to Consolidated Financial Statements 6 Item 2 Management's Discussion and Analysis of Financial Condition and Results of Operations 10 PART II. OTHER INFORMATION Item 6 Exhibits and Reports on Form 8-K 14 Signatures 15
2 3 PART I. FINANCIAL INFORMATION Item 1. Financial Statements SIGHT RESOURCE CORPORATION Consolidated Balance Sheets (In thousands, except share and per share data)
September 30, December 31, 1997 1996 ------------- ------------ ASSETS Current assets: Cash and cash equivalents $ 3,883 $ 9,924 Accounts receivable, net of allowances of $515 and $353, respectively 2,509 1,405 Inventories 4,133 2,489 Prepaid expenses and other current assets 803 286 Assets held for sale 56 458 -------- -------- Total current assets 11,384 14,562 -------- -------- Property and equipment 10,169 6,030 Less accumulated depreciation (4,236) (1,095) -------- -------- Net property and equipment 5,933 4,935 -------- -------- Other assets: Intangible assets, net 15,170 11,768 Other assets 1,399 165 -------- -------- Total other assets 16,569 11,933 -------- -------- $ 33,886 $ 31,430 ======== ======== LIABILITIES & STOCKHOLDERS' EQUITY Current liabilities: Revolving note payable $ 1,475 $ 475 Current portion of long term debt 1,000 800 Accounts payable 2,678 1,843 Accrued expenses 4,682 3,670 -------- -------- Total current liabilities 9,835 6,788 -------- -------- Non-current liabilities: Long term debt, less current maturities --- 1,600 Other liabilities 1,163 276 -------- -------- Non-current liabilities 1,163 1,876 -------- -------- Stockholders' equity: Preferred Stock, $.01 par value. Authorized 5,000,000 shares; no shares issued and outstanding -- -- Common Stock, $.01 par value. Authorized 20,000,000 shares; issued 8,756,500 at September 30, 1997 and 8,648,768 at December 31, 1996 88 86 Additional paid-in capital 38,282 37,510 Common Stock issuable, 71,181 shares at September 30, 1997 and December 31, 1996 432 432 Treasury stock at cost (shares at September 30, 1997: 30,600) (137) -- Accumulated deficit (15,777) (15,262) -------- -------- Total stockholders' equity 22,888 22,766 -------- -------- $ 33,886 $ 31,430 ======== ========
See accompanying notes to consolidated financial statements. 3 4 SIGHT RESOURCE CORPORATION Consolidated Statements of Operations (In thousands, except per share data)
Three Months Ended Nine Months Ended September 30, September 30, September 30, September 30, 1997 1996 1997 1996 ------------- ------------- ------------- ------------- Net revenue $12,674 $9,764 $33,141 $21,342 Cost of revenue 4,463 3,787 12,058 8,331 ------- ------ ------- ------- Gross profit 8,211 5,977 21,083 13,011 Selling, general and administrative expenses 8,364 6,702 22,102 15,148 ------- ------ ------- ------- Loss from operations (153) (725) (1,019) (2,137) ------- ------ ------- ------- Other income (expense) Interest income 69 169 292 349 Interest expense (89) (38) (261) (151) Gain on sale of assets 251 -- 474 -- ------- ------ ------- ------- Total other income 231 131 505 198 ------- ------ ------- ------- Net income (loss) $ 78 $ (594) $ (514) $(1,939) ======= ====== ======= ======= Earnings (loss) per common share $ 0.01 $(0.07) $ (0.06) $ (0.28) ======= ====== ======= ======= Weighted average number of common shares outstanding 8,782 8,158 8,639 6,988 ======= ====== ======= =======
See accompanying notes to consolidated financial statements. 4 5 SIGHT RESOURCE CORPORATION Consolidated Statements of Cash Flows (In thousands)
Nine Months Ended September 30, September 30, 1997 1996 ------------- ------------- Operating activities: Net loss $ (514) $(1,939) Adjustments to reconcile net loss to net cash used in operating activities: Depreciation and amortization 1,482 1,497 Gain on sale of assets (474) -- Changes in operating assets and liabilities: Accounts receivable (590) (358) Inventories (727) 30 Prepaid expenses and other current assets (530) (222) Accounts payable and accrued expenses (527) (1,185) ------- ------- Net cash used in operating activities (1,880) (2,177) ------- ------- Investing activities: Purchases of property and equipment (1,284) (767) Acquisition of subsidiaries (2,075) (2,854) Proceeds from sale of assets 1,005 -- Other assets (430) (4) ------- ------- Net cash used in investing activities (2,784) (3,625) ------- ------- Financing activities: Principal payments on long term debt (1,279) (300) Net proceeds from issuance of common stock -- 9,935 Other liabilities 39 (349) Purchase of common stock for treasury (137) -- ------- ------- Net cash (used in) provided by financing activities (1,377) 9,286 ------- ------- Net increase (decrease) in cash and cash equivalents (6,041) 3,484 Cash and cash equivalents, beginning of period 9,924 8,035 ------- ------- Cash and cash equivalents, end of period $ 3,883 $11,519 ======= ======= Supplemental Disclosure: Interest paid $ 283 $ 158 ======= ======= Equity issued associated with Credit Agreement $ 180 $ -- ======= =======
See accompanying notes to consolidated financial statements. 5 6 SIGHT RESOURCE CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA) (1) THE COMPANY (a) Nature of Business The business of Sight Resource Corporation is to participate in the delivery of a complete range of eye care products and services through integrated networks of opticians, optometrists and ophthalmologists. (b) US Acquisitions During 1995, the Company acquired two primary eye care chains, effective January 1, 1995 and July 1, 1995, respectively. The aggregate purchase price paid in connection with the acquisitions consisted of (i) $2,660 in cash, (ii) 555,525 shares of common stock, (iii) the assumption of approximately $1,600 of net liabilities, and (iv) $660 payable over a 3 year period and $250 payable over 18 months, contingent upon the occurrence of certain future events. The transactions were accounted for using the purchase method of accounting. Effective July 1, 1996, the Company purchased certain assets and assumed certain liabilities of The E.B. Brown Optical Company and Brown Optical Laboratories, Inc. as well as entered into a merger with E.B. Brown Opticians, Inc. (together "EB Brown") for approximately $4,000 in cash, 521,997 shares of common stock issued, 71,181 shares of common stock to be issued and $1,400 in notes payable over an eighteen month period. EB Brown operated forty-two eye care centers located throughout Ohio and Western Pennsylvania which provide optometric and audiology goods and services to persons with vision and hearing disorders. The transaction was accounted for using the purchase method of accounting. Effective July 1, 1997, the Company acquired one hundred percent of the outstanding shares of stock of Vision Holdings, Ltd. (formerly known as Dr. Greenberg, an Optometry Corporation ("Dr. Greenberg")). The purchase price paid in connection with this acquisition was $2,000 of cash on hand and the assumption and payment of notes payable outstanding as of July 1, 1997 of approximately $800. Dr. Greenberg operated seventeen eye care centers in Southeast Louisiana and Mississippi. The acquisition was accounted for using the purchase method of accounting. The results of operations of the four acquisitions have been included in the consolidated financial statements from their respective dates of acquisition. The excess of the purchase price and expenses associated with each acquisition over the estimated fair value of the net assets acquired has been recorded as goodwill. (2) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (a) Basis of Presentation The accompanying consolidated financial statements have been prepared by the Company without audit, pursuant to the rules and regulations of the Securities and Exchange Commission. In the opinion of the Company, these consolidated financial statements contain all adjustments (consisting of only normal, recurring adjustments) necessary to present fairly the financial position of Sight Resource Corporation as of September 30, 1997 and the results of its operations for the three and nine months ended September 30, 1997 and 1996 and its cash flow for the nine months ended September 30, 1997 and 1996. 6 7 SIGHT RESOURCE CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) (DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA) The accompanying consolidated financial statements and related notes should be read in conjunction with the audited consolidated financial statements which are contained in the Company's Annual Report on Form 10-K for the year ended December 31, 1996. (b) Principles of Consolidation The accompanying consolidated financial statements include the accounts of the Company, its wholly-owned subsidiaries and three professional corporations ("PCs") in which the Company's subsidiaries assume the financial risks and rewards of such PCs through a management contract and a stock agreement. The Company has no direct equity ownership in the PCs. All significant intercompany balances and transactions have been eliminated. In preparation of these consolidated financial statements, in conformity with generally accepted accounting principles, management of the Company has made estimates and assumptions that affect the reported amounts of assets and liabilities, such as accounts receivable, inventory, impairment of property and equipment and intangibles. Actual results could differ from those estimates. (c) Revenue Recognition Revenue and the related costs from the sale of eyewear are recognized at the time an order is placed. The Company has fee for service arrangements with all of its third party payors. Revenue is reported net of the contractual allowances. Under existing revenue sharing arrangements for refractive surgery where the Company is not responsible for patient billing, the Company receives a specified payment from the hospital or center for each refractive surgical procedure performed. Accordingly, the Company recognizes revenue on a per procedure basis at the time procedures are performed. Under existing revenue-sharing arrangements for refractive surgery where the Company is responsible for the collection from the patient and payment to the ophthalmologist and other operating costs, the total patient charge is recorded as revenue with the corresponding expenses recorded in cost of revenue. (d)Inventories Inventories primarily consist of the costs of eyeglass frames, contact lenses, ophthalmic lenses, sunglasses and other optical products and are valued at the lower of cost (using the first-in, first-out method) or market. (e)Property and Equipment Property and equipment is stated at cost. The Company provides for depreciation at the time the property and equipment is placed in service. The straight-line method is used over the estimated useful life of the asset. (f) Intangible Assets Intangible assets resulting from business acquisitions consist of customer lists, trademarks, non-compete agreements and the excess cost of the acquisition over the fair value of the 7 8 SIGHT RESOURCE CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) (DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA) net assets acquired (goodwill). Certain values assigned are based upon independent appraisals and are amortized on a straight line basis over a period of five to twenty-five years. The Company assesses the recoverability of unamortized intangible assets on an ongoing basis by comparing anticipated operating profits and future, undiscounted cash flows to net book value. In performing this analysis, management considers such factors as current results, trends, and future prospects, in addition to other economic factors. (g) Deferred Revenue The Company offers a contact lens purchasing program in which, for a set fee, customers may purchase contacts at discounted rates for a 12 month period. The Company recognizes revenue from the sales of its contact lens purchasing program on a monthly basis over the life of the program. (h) Earnings (Loss) Per Share Earnings per share are computed based on the weighted average number of shares outstanding plus common stock equivalents related to stock options and warrants, if such common stock equivalents cause dilution in earnings per share in excess of 3%. Net loss per share of common stock is based on the weighted average number of common shares outstanding. Common stock equivalents are not included in the calculation because they are antidilutive. (3) DEBT Debt is as follows:
SEPTEMBER 30, DECEMBER 31, 1997 1996 ------------- ------------ Bank term loan, secured by all assets of one of the Company's subsidiaries $ -- $1,000 Unsecured notes payable, 7% interest rate, $400 paid on September 18, 1997 and $1,000 due on March 18, 1998; due on demand if the Company's cash balance is less than $2,800 1,000 1,400 ------ ------ 1,000 2,400 Less current maturities 1,000 800 ------ ------ Long term debt, less current maturities $ -- $1,600 ====== ======
8 9 SIGHT RESOURCE CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) (DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA) At December 31, 1996, the Company had available a revolving credit facility in the amount of $500 based on eligible accounts receivable and inventory balances. As of December 31, 1996, $25 was unused. On February 20, 1997, the Company entered into a Credit Agreement (the "Agreement") with a bank pursuant to which the Company can borrow $5,000 on a term loan basis and $5,000 on a revolving credit basis, subject to certain performance criteria. Such certain performance criteria include, among others, financial condition covenants such as rolling EBITDA levels, indebtedness to EBITDA ratios, current ratio of 1:1 and minimum net worth requirement. The term loan facility bears interest at the bank's prime rate plus 1.5% or LIBOR plus 3% at the Company's election and the revolving credit facility bears interest at the bank's prime rate plus 1.25% or LIBOR plus 2.75% at the Company's election. These loans are secured by all assets of the Company and its wholly owned subsidiaries. As of September 30, 1997, the entire term loan was unused and $1,475 was outstanding on the revolving note. The revolving note bears interest at the bank's prime rate plus 1.25% (9.75% at September 30, 1997). As part of the Agreement, the Company issued to the bank warrants to purchase 150,000 shares of the common stock at a purchase price of $4.625 per share. The warrants expire December 31, 2003. The warrants were accounted for as additional paid in capital based upon the fair market value of the securities. Fair value was determined by using the relationship of the interest rate charged with the warrants versus the rate to be charged without the warrants. This value approximated that obtained using the Black Scholes Method. As of September 30, 1997, the Company was not in compliance with two of its financial covenants in the Agreement related to i.) minimum requirement of earnings before interest, depreciation, amortization and taxes and ii.) minimum net worth requirement. The Company obtained a waiver from the bank for noncompliance with these covenants. 9 10 PART I: ITEM 2: MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS "SAFE HARBOR" STATEMENT UNDER THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995 Statements contained in this document which are not historical fact are forward-looking statements based upon management's current expectations that are subject to risks and uncertainties that could cause actual results to differ materially from those set forth in or implied by forward-looking statements. These risks are described in the Company's Annual Report on Form 10K for the fiscal year ended December 31, 1996 filed with the Securities and Exchange Commission. OVERVIEW The Company is in the business to manufacture, distribute and sell eyewear and related products and services and, as necessary, to administer the business functions of providing vision related medical services. The Company provides a complete range of eye care products and services through integrated networks of opticians, optometrists and ophthalmologists. The Company's services are provided primarily to persons with common vision disorders, as well as to persons with sight-threatening conditions. The Company's operations currently consist of eighty-eight eye care centers, three management service organizations ("MSOs") and 5 laser vision correction ("LVC") centers which the Company has established in association with leading hospitals, ambulatory surgery centers and ophthalmologists. In addition, the Company operates a primary optical laboratory and distribution center in Holliston, Massachusetts. The Company's objective is to become the leading integrated provider of eye care products and services in select, regional markets. To develop significant regional integrated networks, the Company's business strategy focuses on (i) acquiring and integrating the assets of regional eye care centers and the practices of eye care professionals (optometrists and ophthalmologists), (ii) employing or entering into management services contracts with these professionals, (iii) continuing to market comprehensive and competitively priced eye care programs to leading HMOs, insurance companies and other third party payors in the Company's regional markets, (iv) expanding strategic affiliations, for pathology co-management opportunities, with select hospitals, ambulatory surgery centers and eye care professionals and (v) continuing to market and provide access to LVC services through the Company's eye care centers. The Company believes that its integrated approach to eye care provides significant advantages, benefits and opportunities to patients, providers and payors. Patients benefit from the convenience of eye care products and services delivered at a single location. Eye care professionals benefit from the supplemental management and administrative services and resources provided by the Company, permitting them to continue to dedicate their time and effort to their patients and professional practices. Payors benefit from the Company's ability to conveniently provide a complete range of high quality eye care products and services at competitive prices. 10 11 RESULTS OF OPERATIONS THREE AND NINE MONTHS ENDED SEPTEMBER 30, 1997 AND 1996 NET REVENUE. The Company generated net revenue of approximately $12.7 million and $33.1 million during the three and nine months ended September 30, 1997, respectively, from the operation of its eighty-eight eye care centers and six LVC centers as compared to net revenue of approximately $9.8 million and $21.3 million from its seventy-one eye care centers and ten LVC centers for the same periods in 1996. The $2.9 million, or 29.8%, increase in net revenue for the three months ended September 30, 1997 as compared to the three months ended September 30, 1996, relates primarily to the additional seventeen eye care centers acquired effective July 1, 1997. Of the $11.8 million, or 55.3%, increase in net revenue for the nine months ended September 30, 1997 as compared to the nine months ended September 30, 1996, approximately $11.0 million relates to the additional forty one eye care centers acquired effective July 1, 1996 and to the additional seventeen eye care centers acquired effective July 1, 1997. COST OF REVENUE. Cost of revenue increased from $3.8 million for the three months ended September 30, 1996 to $4.5 million for the three months ended September 30, 1997. Cost of revenue as a percent of net revenue decreased from 38.8% for the three months ended September 30, 1996 to 35.2% for the three months ended September 30, 1997. Cost of revenue increased from $8.3 million for the nine months ended September 30, 1996 to $12.1 million for the nine months ended September 30, 1997. Cost of revenue as a percent of net revenue decreased from 39.0% for the nine months ended September 30, 1996 to 36.4% for the nine months ended September 30, 1997. The decrease as a percentage of net revenue is mainly attributable to reduced depreciation on ophthalmic equipment after the write down due to the asset impairment recognized in the fourth quarter of 1996. Cost of revenue for the three and nine months ended September 30, 1997 and 1996 principally consisted of (i) the cost of manufacturing, purchasing and distributing optical products to its customers and (ii) the cost of delivering LVC, including depreciation and maintenance on excimer lasers. SELLING, GENERAL AND ADMINISTRATIVE EXPENSES. Selling, general and administrative expenses were approximately $8.4 million and $22.1 million for the three and nine months ended September 30, 1997, respectively, as compared to $6.7 million and $15.1 million for the three and nine months ended September 30, 1996, respectively. The increase primarily relates to payroll and facility costs incurred in operating additional eye care centers in the first three quarters of fiscal 1997 as compared to the first three quarters in fiscal 1996. Selling, general and administrative expenses, as a percentage of net revenue, declined from 68.6% and 71.0% for the three and nine months ended September 30, 1996, respectively, to 66.0% and 66.7% for the three and nine months ended September 30, 1997, respectively. This decrease as a percent of net revenue is a result of the Company's growth through acquisitions and the realization of certain efficiencies related to this growth. OTHER INCOME AND EXPENSES. Interest income totaled $69,000 and $292,000 for the three and nine months ended September 30, 1997, respectively, as compared to $169,000 and $349,000 for the three and nine months ended September 30, 1996, respectively. This decrease resulted from the investment of a lower average cash balance during 1997 as compared to the same periods for 1996. Interest expense totaled $89,000 and $261,000 for the three and nine months ended September 30, 1997 as compared to $38,000 and $151,000 for the three and nine months ended September 30, 1996. This increase is associated with a higher average balance of debt outstanding during 1997 as compared to the same periods in 1996. The sale of certain ophthalmic equipment during the three months ended September 30, 1997 generated a gain of approximately $251,000. The sale of certain ophthalmic equipment 11 12 during the nine months ended September 30, 1997 generated a gain of approximately $474,000. NET INCOME (LOSS). The Company realized net income of $78,000 ($0.01 per share) and a net loss of $514,000 ($0.06 per share) for the three and nine months ended September 30, 1997 as compared to a net loss of $594,000 ($0.07 per share) and $1.9 million ($0.28 per share) for the three and nine months ended September 30, 1996, respectively. The change from net loss to net income is primarily attributable to increased income generated by the additional forty-one eye care centers acquired by the Company effective July 1, 1996 and the seventeen eye care centers acquired effective July 1, 1997. The change from net loss per share to net income per share was partially offset by an increase in the weighted average number of common shares outstanding as of September 30, 1997. LIQUIDITY AND CAPITAL RESOURCES At September 30, 1997, the Company had approximately $3.9 million in cash and cash equivalents and working capital of approximately $1.5 million in comparison to approximately $9.9 million in cash and cash equivalents and working capital of approximately $7.8 million as of December 31, 1996. On October 9, 1997, the Company signed a definitive purchase agreement for the sale of approximately $5 million of its Series B Convertible Preferred Stock and warrants to purchase common stock to The Carlyle Group. The transaction is expected to close by the end of November, 1997. As of September 30, 1997, the Company had securities outstanding which provide it with potential sources of financing as outlined below:
Potential Securities proceeds - ------------------------------------------ ----------- Warrants 2,472,100 $14,800,000 Class A Warrants 85,000 500,000 Unit Purchase Options 215,000 3,700,000 IPO Representative Warrants 85,000 1,300,000 Creditanstalt Warrants 150,000 694,000 Representative Warrants 170,000 1,400,000 ----------- $22,394,000 ===========
There can be no assurance that the Company will obtain any such proceeds from the exercise of the above securities. The Company has a Credit Agreement with a bank pursuant to which the Company can borrow up to $5.0 million on a term loan basis and up to $5.0 million on a revolving credit basis, subject to certain performance criteria. Such certain performance criteria include, among others, financial condition covenants such as rolling EBITDA levels, indebtedness to EBITDA ratios, current ratio of 1:1 and minimum net worth requirement. The term loan facility bears interest at the bank's prime rate plus 1.5% or LIBOR plus 3% at the Company's election and the revolving credit 12 13 facility bears interest at the bank's prime rate plus 1.25% or LIBOR plus 2.75% at the Company's election. As of September 30, 1997, approximately $1.5 million was outstanding on the revolver. As part of the Agreement, the Company issued to the bank warrants to purchase 150,000 shares of the common stock at a purchase price of $4.625 per share. The warrants expire on December 31, 2003. As of September 30, 1997, the Company was not in compliance with two of its financial covenants in the Agreement related to a.) minimum requirement of earnings before interest, depreciation, amortization and taxes and b.) minimum net worth requirement. The Company obtained a waiver from the bank for noncompliance with these covenants. Effective July 1, 1997, the Company acquired one hundred percent of the outstanding shares of stock of Vision Holdings, Ltd. (formerly known as Dr. Greenberg, an Optometry Corporation ("Dr. Greenberg")). The purchase price paid in connection with this acquisition was $2.0 million of cash on hand and the assumption and payment of notes payable outstanding as of July 1, 1997 of approximately $800,000. Dr. Greenberg operated seventeen eye care centers in Southeast Louisiana and Mississippi. The acquisition was be accounted for using the purchase method of accounting. The Company anticipates that its working capital and sources of capital, such as the credit facility, cash flow from operations, revenues from operations and interest income from cash investments, will be adequate to fund the Company's currently proposed activities for at least the next twelve months. The Company anticipates using financing vehicles such as bank debt and other sources of funding, such as additional equity offerings, to achieve its business plan, including the acquisition of eye care centers. By acquiring eye care centers, the Company gains critical mass of locations ensuring that potential patients and third party payors will have convenient access to a wider variety of eye care services. It also allows the Company to deliver these services at considerable savings by using existing corporate and operational infrastructure, which includes store operations, MIS, manufacturing, purchasing, distribution and training. The Company is currently evaluating potential acquisition candidates. Without additional funding, the Company's rate of future acquisitions and size of future acquisitions could be limited. 13 14 PART II. OTHER INFORMATION Item 6. EXHIBITS AND REPORTS ON FORM 8-K
Exhibit No. Title - ------- ----- 10.1 Stock Purchase Agreement by and among Marjory O. Greenberg, As Testamentary Executrix of the Succession of Tom I. Greenberg, Peter Brown, and Vision Plaza Corp. 10.2* Promissory Note between Sight Resource Corporation and Mr. Stephen Blinn 27 Financial Data Schedule
* This exhibit relates to a management contract or compensatory plan or arrangement required to be filed as an exhibit to this form. Reports on Form 8-K ------------------- NONE 14 15 SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. Sight Resource Corporation Date: November 14, 1997 /s/ William G. McLendon ----------------- ------------------------------------------ William G. McLendon Chief Executive Officer and President (principal executive officer) Date: November 14, 1997 /s/ Alan MacDonald ----------------- ------------------------------------------ Alan MacDonald Vice President, Finance and Administration (principal financial and chief accounting officer)
15 EX-10.1 2 STOCK PURCHASE AGREEMENT 1 Exhibit 10.1 STOCK PURCHASE AGREEMENT BY AND AMONG MARJORY O. GREENBERG, AS TESTAMENTARY EXECUTRIX OF THE SUCCESSION OF TOM I. GREENBERG, PETER BROWN, AND VISION PLAZA CORP. 2 TABLE OF CONTENTS Page ---- Section 1. Terms of the Sale and Purchase of Stock 1.1 Conveyance of Stock. 1 1.2 Purchase Price: Liabilities Assumed 2 Section 2. Representations and Warranties of the Shareholders 2.1 Corporate Existence: Good Standing 2 2.2 Power and Authority for Transactions 3 2.3 Permits. Licenses and Governmental Authorizations 3 2.4 Corporate Records 3 2.5 Consents 4 2.6 The Company's Financial Information 4 2.7 Leases 4 2.8 Condition of Assets 4 2.9 Title to and Encumbrances on Property 4 2.10 Intellectual Property Rights: 5 2.11 Directors and Officers: Payroll Information: Employees 5 2.12 Legal Proceedings 6 2.13 Contracts 6 2.14 Subsequent Events 7 2.15 Taxes 9 2.16 Liabilities: Debt 9 2.17 Insurance Policies 10 2.18 Employee Benefit Plans 10 2.19 Adverse Agreements 10 2.20 Compliance with Laws in General 11 2.21 Medicare and Medicaid Programs 11 2.22 Fraud and Abuse 11 2.23 No Untrue Representations 12 2.24 Distributions and Repurchases 12 2.25 Ownership Interests of Interested Persons: Competitors 12 2.26 Inventory 12 2.27 Certain Practices 12 2.28 Environmental Matters 13 2.29 Significant Customers and Suppliers 13 2.30 Broker s Fee 13 Section 3. Representations and Warranties of Purchaser 3.1 Corporate Existence: Good Standing 13 3.2 Power and Authority 13 3.3 No Untrue Representations 14 -i- 3 Section 4. Covenants of the Shareholders 4.1 Consummation of Agreement 14 4.2 Business Operations 14 4.3 Access and Notice 14 4.4 Approvals of Third Parties and Permits and Consents 14 4.5 Acquisition Proposals 15 4.6 Employee Matters 15 4.7 Distributions and Repurchases 15 4.8 Requirements to Effect Transaction 15 4.9 Voting of Shares 15 4.10 Accounting and Tax Matters 16 4.11 Conversion Transaction 17 4.12 Survival of Covenants 17 4.13 Covenant Not to Compete 17 Section 5. Covenants of Purchaser 5.1 Consummation of Agreement 18 5.2 Approvals of Third Parties and Permits and Consents 18 Section 6. Purchaser Conditions Precedent 6.1 Representations and Warranties 18 6.2 Covenants and Conditions 18 6.3 Proceedings 19 6.4 No Material Adverse Change 19 6.5 Approvals 19 6.6 Notice 19 6.7 Employment Arrangements 19 6.8 Consents and Approvals: Succession Court Approval 19 6.9 Closing Deliveries 20 6.10 Debt and Receivables 20 6.11 Resignations 20 6.12 Dissenting Shares 20 6.13 No Material Change in Working Capital 20 6.14 No Material Adverse Economic Effect 20 6.15 Opinion Letter 20 Section 7. The Company's and the Shareholders' Conditions Precedent 7.1 Representations and Warranties 20 7.2 Covenants and Conditions 21 7.3 Proceedings 21 7.4 Closing Deliveries 21 -ii- 4 Section 8. Closing Deliveries 8.1 Deliveries of the Company and the Shareholders 21 8.2 Deliveries of Purchaser 21 Section 9. Nature and Survival of Representations and Warranties: Indemnification 9.1 Nature and Survival 22 Section 10. Termination 24 Section 11. Miscellaneous 11.1 Notices 24 11.2 Further Assurances 25 11.3 Each Party to Bear Costs 25 11.4 Public Disclosures 25 11.5 GOVERNING LAW 26 11.6 Captions 26 11.7 Integration of Exhibits 26 11.8 ENTIRE AGREEMENT/AMENDMENT 26 11.9 Counterparts 26 11.10 Binding Effect/Assignment 26 11.11 No Rule of Construction 26 11.12 Costs of Enforcement 26 11.13 Amendments: Waivers 27 11.14 Severability 27 11.15 Jimmy Bradford 27 11.16 Jeff Greenberg 27 11.17 Closing 27 11.18 Deposit 27 -iii- 5 STOCK PURCHASE AGREEMENT This STOCK PURCHASE AGREEMENT, made and executed as of the 1st day of July, 1997 is by and among VISION PLAZA CORP. ("Purchaser"); and MRS. MARJORY O. GREENBERG, in her capacity as the Testamentary Executrix of the Succession of Tom I. Greenberg (Civil District Court No. 96-13287) and PETER BROWN (individually "Shareholder," and collectively "Shareholders"). WITNESSETH: WHEREAS, the Shareholders are the sole shareholders of Dr. Greenberg, An Optometry Corporation, a Louisiana professional optometry corporation ("Parent"); and WHEREAS, Vision Horizon, Inc., Vision Universe, Inc., Vision Lake Forest, Inc., Vision Southland, Inc., Vision Hammond Square, Inc., Vision Oakwood, Inc., Vision Uptown, Inc., Vision CBD, Inc., Vision Hattiesburg, Inc., Vision at the Dome, Inc., Vision Mississippi, Inc., Vision Esplanade, Inc., Vision Tomorrow, Inc., World Vision Quest, Inc., Orleans Spectacle Corp., Orleans Sunglasses, Inc., Vision Unlimited Laboratories, Inc., Eye Refractions Consultants, Inc., Vision Williams, Inc., Vision Downtown, Inc., Vision Plaza, Inc., Vision Frontiers, Inc. and Vision Quest, Inc. (the "Subsidiaries") are wholly owned subsidiaries of Parent and represent all subsidiaries and affiliates of Parent (Parent and Subsidiaries collectively referred to herein as the "Company"); and WHEREAS, the Company operates an optometry business in Louisiana and Mississippi; and WHEREAS, the Shareholders wish to sell to Purchaser, and Purchaser wishes to acquire from the Shareholders, one hundred percent (100%) of the shares of Parent, all upon the terms and subject to the conditions set forth herein; NOW THEREFORE, in consideration of the mutual promises and covenants hereinafter set forth, and for other good and valuable consideration, the sufficiency of which is hereby acknowledged, the parties hereby agree as follows: SECTION 1. TERMS OF THE SALE AND PURCHASE OF STOCK The sale of the stock of the Parent which is to be sold hereunder and the acquisition thereof by Purchaser shall be based on the respective representations, warranties and agreements of the parties hereto, and shall be subject to the terms and conditions herein stated, and shall occur upon the satisfaction of all conditions precedent contained herein (the "Closing Date"). 1.1 Conveyance of Stock. Subject to and upon the terms and conditions contained herein, on the Closing Date, the Shareholders shall sell, convey, transfer, deliver and assign to Purchaser one hundred percent (100%) of their shares of the Parent which represents one hundred percent (100%) of the 6 outstanding stock of the Parent, free and clear of any obligations, security, intents, claims, liens and encumbrances whatsoever (the "Shares"). 1.2 Purchase Price; Liabilities Assumed. As consideration for the sale of the Shares by Shareholders, Purchaser shall, on the Closing Date, provide Shareholders with the consideration specified in Annex I attached hereto (the "Consideration"), the cash portion of which Consideration shall be payable by federal wire or cashier's check. In addition to paying the Consideration specified in Annex I, Purchaser shall cause the Parent to pay in full on the Closing Date the following indebtedness: (i) the indebtedness owing to Mrs. Marjory Greenberg as evidenced by the Promissory Note attached hereto as Exhibit 1.2(a) in an amount not to exceed the $470,585.80, (ii) the indebtedness owing to Donald M. Weil as evidenced by the Promissory Note attached hereto as Exhibit 1.2(b) in an amount not to exceed $265,498.18, and (iii) the indebtedness owing on Donald Weil s contract attached hereto as Exhibit 1.2C in an amount not to exceed $63,000. Other than the indebtedness set forth in (i), (ii) and (iii) above and as set forth on the Balance Sheet, the Shareholders represent and warrant that there is no other indebtedness of the Company other than as disclosed in this Agreement including the Exhibits attached hereto. SECTION 2. REPRESENTATIONS AND WARRANTIES OF THE SHAREHOLDERS The Shareholders, jointly and severally, hereby represent and warrant to Purchaser as follows: 2.1 Corporate Existence: Good Standing. The Parent is a professional optometry corporation duly organized, validly existing and in good standing under the laws of the State of Louisiana; and the Companies other than Parent are business corporations duly organized, validly existing and in goods standing under the laws of the State of Louisiana. The Company has all necessary corporate powers to own all of its assets and to carry on its business as such business is now being conducted except as may have been caused by the death of Dr. Tom 1. Greenberg, the only licensed optometrist shareholder of the Parent. The Shareholders are the sole shareholders of the Parent and own all outstanding shares of capital stock free of all security interests, claims, encumbrances and liens in the amounts set forth on Exhibit 2.1. Each share of Company common stock has been legally and validly issued and is fully paid and nonassessable. Other than as set forth on Exhibit 2.1, no shares of capital stock of the Company are owned by the Company in treasury. There are no outstanding (a) bonds, debentures, notes or other obligations the holders of which have the right to vote with the stockholders of the Company on any matter, (b) securities of the Company convertible into equity interests in the Company, or (c) commitments, options, rights or warrants to issue any such equity interests in the Company, to issue securities of the Company convertible into such equity interests, or to redeem any securities of the Company. No shares of capital stock of the Company have been issued or disposed of in violation of the preemptive rights, rights of first refusal or similar rights of any of the Company's stockholders. The Company is not required to qualify to do business as a foreign corporation in any other state or jurisdiction by reason of its business, properties or activities in or relating to such other state or jurisdiction , except for Vision Mississippi, Inc., which is qualified to do business in Mississippi and except that no representation is made as to whether Parent is required to qualify to do business as a foreign corporation 1 7 in Mississippi. The Company does not have any assets, employees or offices in any state other than Louisiana and Mississippi. 2.2 Power and Authority for Transactions. There is no action required by law, the Company's Articles or Certificate of Incorporation, its Bylaws or otherwise, to authorize the execution, delivery and performance of this Agreement and such related documents, except the approval of the Civil District Court in proceedings bearing number 96-13287 being the Succession of Tom I. Greenberg. Each Shareholder has the legal capacity to enter into and perform this Agreement and the other agreements to be executed and delivered in connection herewith. This Agreement and all agreements and documents executed and delivered in connection herewith have been, or will be as of the Closing Date, duly executed and delivered by the Shareholders, as appropriate, and constitute or will constitute the legal, valid and binding obligations of the Shareholders, enforceable against the Shareholders in accordance with their respective terms, except as may be limited by applicable bankruptcy, insolvency or similar laws affecting creditors' rights generally or the availability of equitable remedies. The execution and delivery of this Agreement, and the agreements executed and delivered pursuant to this Agreement or to be executed and delivered on the Closing Date, do not, and, subject to the receipt of consents described on Exhibit 2.5 and the order of the court described in Section 6.8 hereof, the consummation of the actions contemplated hereby will not, violate any provision of the Articles or Certificate of Incorporation or Bylaws of the Company or any provisions of, or result in the acceleration of, any obligation under any mortgage, lien, lease, agreement, rent, instrument, order, arbitration award, judgment or decree to which the Company or any Shareholder is a party or by which the Company or any Shareholder is bound, or violate any material restrictions of any kind to which the Company is subject, or result in any lien or encumbrance on any of the Company's assets other than as disclosed in this Agreement including the Exhibits attached hereto. 2.3 Permits. Licenses and Governmental Authorizations. All building or other permits, certificates of occupancy, concessions, grants, franchises, licenses, certificates of need and other governmental authorizations and approvals required to be maintained by the Company and each doctor or licensed employee of the Company have been duly obtained and are in full force and effect and are described on Exhibit 2.3. There are no proceedings pending or, to the knowledge of the Company and the Shareholders, threatened, which may result in the revocation, cancellation or suspension, or any adverse modification, of any thereof. 2.4 Corporate Records. True and correct copies of the Articles or Certificate of Incorporation, Bylaws and minutes, if any, of the Company and all amendments thereto of the Company have been delivered to Purchaser. The minute books of the Company contain all minutes of the meetings of and consents to actions taken without meetings of the Board of Directors and stockholders of the Company since its formation which are in existence or have been prepared, the Shareholders not representing and warranting that all meetings were documented in the form of written minutes. The books of account of the Company have been kept accurately in the ordinary course of business and the revenues, expenses, assets and liabilities of the Company have been properly recorded in such books in accordance with GAAP (as defined in section 2.6). 2 8 2.5 Consents. Except as set forth on Exhibit 2.5, no consent, authorization, permit, license or filing with any governmental authority, any lender, lessor, any manufacturer or supplier or any other person or entity is required to authorize, or is required in connection with, the execution, delivery and performance of this Agreement and the agreements and documents contemplated hereby on the part of the Company or the Shareholders. 2.6 The Company's Financial Information. The Company has heretofore furnished Purchaser with financial information about the Company disclosed on Exhibit 2.6 attached hereto (the "Financial Statements"), including the unaudited Balance Sheet ("Balance Sheet") as of March 31, 1997 ("Balance Sheet Date"). Other than as disclosed in this Agreement including the Exhibits attached hereto, the Financial Statements for the periods indicated, reflect all liabilities of the Company required to be reported in accordance with generally accepted accounting principles consistently applied ("GAAP"), reflect all contingent liabilities of the Company required to be reported in accordance with GAAP, as of their respective dates, and present fairly the financial position of the Company as of such dates and the results of operations and cash flows for the period or periods reflected therein. The Financial Statements do not include as inventory any item that does not meet the definition of inventory (e.g. items owned by a party other than the Company and held by or on behalf of the Company as consignee are not included). The Financial Statements do not include as fixed assets any operating leases. 2.7 Leases. Exhibit 2.7 attached hereto sets forth a list of all leases pursuant to which the Company leases, as lessor or lessee, real or personal property used in operating the business of the Company or otherwise. All such leases listed on Exhibit 2.7 are valid and enforceable in accordance with their respective terms, and there is not under any such lease any existing default by the Company, as lessor or lessee, or any condition or event of which the Company or any Shareholder has knowledge which with notice or lapse of time, or both, would constitute a default, in respect of which the Company has not taken adequate steps to cure such default or to prevent a default from occurring. Nothing herein shall be deemed to imply that the Shareholders are representing that the sale of the stock of the Company does not in and of itself create a default in and under the leases. 2.8 Condition of Assets. All of the plants, structures and equipment used by the Company in its business are in good condition and repair subject to normal wear and tear and conform with all applicable ordinances, regulations and other laws, and the Company and the Shareholders have no knowledge of any latent defects therein. 2.9 Title to and Encumbrances on Property. A description of all interests in real and personal property owned by the Company is set forth on Exhibit 2.9. The Company has good, valid and marketable title to all of its personal and real property, free and clear of any liens, claims, charges, exceptions or encumbrances. The real and personal property described on Exhibit 2.9 and Exhibit 2.7 constitute the only real and personal property used in the conduct of the Company's business. 2.10 Intellectual Property Rights. Except as set forth on Exhibit 2.10, the Company has no right, title or interest in or to patents, patent rights, corporate 3 9 names, assumed names, manufacturing processes, trade names, trademarks, service marks, inventions, specialized treatment protocols, copyrights, formulas and trade secrets or similar items and such items are the only such items necessary for the conduct of its business. Set forth in Exhibit 2.10 is a listing of all names of all predecessor companies of the Company, including the names of any entities from whom the Company previously acquired significant assets. Except for off-the-shelf software licenses and except as set forth on Exhibit 2.10, the Company is not a licensee in respect of any patents, trademarks, service marks, trade names, copyrights or applications therefor, or manufacturing processes, formulas or trade secrets or similar items and no such licenses are necessary for the conduct of its business. No claim is pending or has been made to the effect that the present or past operations of the Company infringe upon or conflict with the asserted rights of others to any patents, patent rights, manufacturing processes, trade names, trademarks, service marks, inventions, licenses, specialized treatment protocols, copyrights, formulas, know-how and trade secrets. The Company is not in default under any license agreement or contract relating to any such proprietary rights nor, to its knowledge, is any other party. The Company has the sole and exclusive right to use all such proprietary rights without infringing or violating the rights of any third parties and no consents of any third parties are required for the use thereof by the Purchaser. 2.11 Directors and Officers: Payroll Information: Employees. Set forth on Exhibit 2.11 attached hereto is a true and complete list, as of the date of this Agreement of: (a) the name of each director and officer of the Company and the offices held by each, (b) the most recent payroll report of the Company, showing all current employees of the Company and their current levels of compensation, (c) promised increases in compensation of employees of the Company that have not yet been effected, (d) oral or written employment agreements or independent contractor agreements (and all amendments thereto) to which the Company is a party, copies of which have been delivered to Purchaser, and (e) all employee manuals, materials, policies, procedures and work-related rules, copies of which have been delivered to Purchaser. The Company is in compliance with all applicable laws, rules, regulations and ordinances respecting employment and employment practices. The Company has not engaged in any unfair labor practice. There are no unfair labor practices charges or complaints pending or threatened against the Company, and the Company has never been a party to any agreement with any union, labor organization or collective bargaining unit. The 1996 W-2 and 1099 forms filed by the Company have been made available to the Purchaser at Company s office. No employee has a written employment agreement with the Company which is not terminable on notice by the Company without cost or other liability to the Company. No employee has indicated to the Company or the Shareholders that he or she intends to terminate his or her employment by the Company or seek a material change in his or her duties or status. 4 10 2.12 Legal Proceedings. Other than as set forth on Exhibit 2.12 neither the Company nor any of the Company's assets is subject to any pending, nor does the Company or any Shareholder have knowledge of any threatened, litigation, governmental investigation, condemnation or other proceeding against or relating to or affecting the Company, the outstanding shares of the Company's stock, any of the assets of the Company, the operations, business or prospects of the Company or the transactions contemplated by this Agreement, and, to the knowledge of the Company and the Shareholders, no basis for any such action exists, nor is there any legal impediment of which the Company or any Shareholder has knowledge to the continued operation of its business in the ordinary course, subject to consents set forth on Exhibit 2.5 and subject to the provisions of the Louisiana Professional Optometry Corporation statute, being R.S. 12:1110, et seq. 2.13 Contracts. The Company has delivered to Purchaser true copies of all written, and disclosed to Purchaser all oral, outstanding contracts, obligations and commitments of the Company ("Contracts"), all of which are listed or incorporated by reference on Exhibit 2.7 (in the case of leases), Exhibit 2.11 (in the case of employment agreements) and Exhibit 2.13 (in the case of Contracts other than leases) attached hereto. Except as otherwise indicated on such Exhibits, all of such Contracts are valid, binding and enforceable in accordance with their terms and are in full force and effect, and no defenses, offsets or counterclaims have been asserted or may be made by any party thereto. Except as indicated on such Exhibits, there is not under any such Contract any existing default by the Company, or any condition or event of which the Company or any Shareholder has knowledge which with notice or lapse of time, or both, would constitute a default. The Company and the Shareholders have no knowledge of any default by any other party to such Contracts. Neither the Company nor the Shareholders have received notice of the intention of any party to any Contract to cancel or terminate any Contract or have any reason to believe that any amendment or change to any Contract is contemplated by any party thereto. Other than as disclosed in this Agreement including the Exhibits attached hereto or listed on Exhibits 2.7, 2.11 and 2.3, the Company is not a party to any material written or oral agreement contract, lease or arrangement, including any: (a) Contract related to the sale of any assets of the Company not made in the ordinary course of business other than this Agreement; (b) Employment, consulting or compensation agreement or arrangement; (c) Labor or collective bargaining agreement; (d) Lease agreement with respect to any property, whether as lessor or lessee; (e) Deed, bill of sale or other document evidencing an interest in or agreement to purchase or sell real or personal property; (f) Contract for the purchase of materials, supplies or equipment (i) which is in excess of the requirements of its business now booked or for normal operating inventories, or (ii) which is not terminable upon notice of thirty (30) 5 11 days or less, or (iii) under which the Company is likely to pay more than $25,000; (g) Agreement for the purchase from a supplier of all or substantially all of the requirements of the Company of a particular product or service; (h) Loan agreement or other contract for money borrowed or lent or to be borrowed or lent to another, except short term loans to employees in amounts not in excess of one month s compensation; (i) Contracts containing non-competition covenants; or (j) Broker, distribution, dealer, manufacturer's representative, franchise, agency, sales, promotion, market research, marketing consultant and advertising contracts; (k) Contracts and agreements with any governmental authority; (l) Contracts and agreements with optometrists, ophthalmologists, or other licensed eye care professionals; (m) Contracts, agreements and arrangements between or among the Company and any of its directors or shareholders or any member of the family of any director or shareholder; or (n) Other contracts or agreements that involve either an unperformed commitment in excess of $1 ,000 or that terminate or can only be terminated by the Company on more than 30 days after the date hereof. 2.14 Subsequent Events. Except as set forth on Exhibit 2.14. the Company has not, since the Balance Sheet Date: (a) Incurred any material obligation or liability (absolute, accrued, contingent or otherwise) or entered into any contract, lease, license or commitment, or incurred any indebtedness, except in connection with the performance of this Agreement, other than in the ordinary course of business; (b) Discharged or satisfied any material lien or encumbrance, or paid or satisfied any material obligation or liability (absolute, accrued, contingent or otherwise) other than (i) liabilities shown or reflected on the Balance Sheet or (ii) liabilities incurred since the Balance Sheet Date in the ordinary course of business; 6 12 (c) Formed or acquired or disposed of any interest in any corporation, partnership, joint venture or other entity; (d) Made any payments to or loaned any money to any person or entity other than in the ordinary course of business; (e) Lost or terminated any employee, patient, customer or supplier that has, individually or in the aggregate, a material adverse effect on its business; (f) Increased or established any reserve for taxes or any other liability on its books or otherwise provided therefor, except as may have been required due to income or operations of the Company since the Balance Sheet Date; (g) Mortgaged, pledged or subjected to any lien, charge or other encumbrance any of the assets of the Company, tangible or intangible; (h) Sold or contracted to sell or transferred or contracted to transfer any of the assets used in the conduct of the Company's business or cancelled any debts or claims or waived any rights, except in the ordinary course of business; (i) Increased the compensation of any officer, employee, consultant or agent by more than the lesser of 12% or $6,000.00; (j) Authorized or incurred any capital expenditures in excess of Five Thousand and No/100 Dollars ($5,000.00); (k) Except for this Agreement and any other agreement executed and delivered pursuant to this Agreement, entered into any material transaction other than in the ordinary course of business or permitted hereunder; (l) Redeemed, purchased, sold or issued any stock, bonds or other securities; (m) Experienced damage, destruction or loss (whether or not covered by insurance) materially and adversely affecting any of its properties, assets or business, or experienced any other material adverse change in its financial condition, assets, prospects, liabilities or business; (n) Declared or paid a distribution, payment or dividend of any kind on the capital stock of the Company; 7 13 (o) Repurchased, approved any repurchase or agreed to repurchase any of the Company's capital stock; or (p) Suffered any material adverse change in the business of the Company or to the assets of the Company. 2.15 Taxes. The Company has filed all tax returns (including tax reports and other statements) required to be filed by it, and made all payments of taxes (including any interest, penalty or addition thereto) required to be made by it, on or before the date of this Agreement, with respect to income taxes, real and personal property taxes, sales taxes, use taxes, employment taxes, excise taxes and other taxes. All such tax returns are complete and accurate in all respects and properly reflect the relevant taxes for the periods covered thereby. The Company and the Shareholders have not received any notice that any tax deficiency or delinquency has been asserted against the Company. There are no audits relating to taxes of the Company threatened, pending or in process. The Company is not currently the beneficiary of any waiver of any statute of limitations in respect of taxes nor of any extension of time within which to file any tax return or to pay any tax assessment or deficiency. There are no liens or encumbrances relating to taxes on or threatened against any of the assets of the Company. The Company has withheld and paid all taxes required by law to have been withheld and paid by it. Neither the Company nor any predecessor of the Company is or has been a party to any tax allocation or sharing agreement or a member of an affiliated group of corporations filing a consolidated federal income tax return. The Company has delivered to Purchaser correct and complete copies of the Company's three most recently filed annual state and federal income tax returns, together with all examination reports and statements of deficiencies assessed against or agreed to by the Company during the three calendar year period preceding the date of this Agreement. The Company has not made any payments, is not obligated to make any payments, and is not a party to any agreement that under any circumstance could obligate it to make any payments that will not be deductible under Code section 280G. 2.16 Liabilities: Debt. Except to the extent reflected or reserved against on the Balance Sheet and the indebtedness described in Section 1.2 hereof, the Company did not have, as of the Balance Sheet Date, and has not incurred since that date and will not have incurred as of the Closing Date, any liabilities or obligations of any nature, whether accrued, absolute, contingent or otherwise, and whether due or to become due, other than those incurred in the ordinary course of business. The Company and the Shareholders do not know, or have reasonable grounds to know, of any basis for the assertion against the Company as of the Balance Sheet Date, of any claim or liability of any nature in any amount not fully reflected or reserved against on the Balance Sheet, or of any claim or liability of any nature arising since that date other than those incurred in the ordinary course of business or contemplated by this Agreement. All indebtedness of the Company (including without limitation, indebtedness for borrowed money, guaranties and capital lease obligations) is described on the Balance Sheet or in Section 1.2. The Company and the Shareholders represent and warrant that all indebtedness due and owing to Hibernia National Bank as reflected on the July 1996 financial statements provided to Purchaser has been extinguished and replaced by the indebtedness set forth on Exhibit 1.2(a) due Mrs. Marjory Greenberg. Other than said indebtedness to Mrs. Marjory Greenberg, the Company has no liability or obligation to any other director or other shareholder of the Company or any 8 14 family member of a shareholder other than due Jeff Greenberg, a Company employee. 2.17 Insurance Policies. Valid and enforceable property, liability, malpractice, worker's compensation and other insurance necessary to the operations of the business are outstanding and duly in force and will remain duly in force through the Closing Date. All such policies are described in Exhibit 2.17 attached hereto and true and correct copies have been delivered to Purchaser. Neither the Company nor any Shareholder has received notice or other communication from the issuer of any such insurance policy cancelling or amending such policy or threatening to do so, nor is the Company or any shareholder on notice of any material increase in any insurance premiums relating to such policies. Neither the Company, nor each Shareholder nor any doctor employee of the Company has any outstanding claims, settlements or premiums owed against any insurance policy. 2.18 Employee Benefit Plans. Except as set forth on Exhibit 2.18 attached hereto, the Company has not established, does not maintain, and is not obligated to make contributions to or under or otherwise participate in, (a) any bonus or other type of compensation or employment plan, program, agreement, policy, commitment, contract or arrangement (whether or not set forth in a written document); (b) any pension, profit-sharing, retirement or other plan, program or arrangement; or (c) any other employee benefit plan, fund or program, including, but not limited to, those described in Section 3(3) of the Employee Retirement Income Security Act of 1974, as amended ("ERISA"). All such plans listed on Exhibit 2.20 (individually "Company Plan," and collectively "Company Plans") have been operated and administered in all material respects in accordance with all applicable laws, rules and regulations, including without limitation, ERISA, the Internal Revenue Code of 1986, as amended, Title VII of the Civil Rights Act of 1964, as amended, the Equal Pay Act of 1967, as amended, the Age Discrimination in Employment Act of 1967, as amended, and the related rules and regulations adopted by those federal agencies responsible for the administration of such laws. No act or failure to act by the Company has resulted in a "prohibited transaction" (as defined in ERISA) with respect to the Company Plans. No "reportable event" (as defined in ERISA) has occurred with respect to any of the Company Plans. The Company has not previously made, is not currently making, and is not obligated in any way to make, any contributions to any multi- employer plan within the meaning of the Multi-Employer Pension Plan Amendments Act of 1980. With respect to each Company Plan, either (i) the value of plan assets (including commitments under insurance contracts) is at least equal to the value of plan liabilities or (ii) the value of plan liabilities in excess of plan assets is disclosed on the Balance Sheet. The Company has made all required Form 5500 filings and required reporting with respect to the Company Plans on a timely basis. 2.19 Adverse Agreements. The Company is not, and will not as of the Closing Date, be a party to any agreement or instrument or subject to any charter or other corporate restriction or any judgment, order, writ, injunction, decree, rule or regulation that materially and adversely affects the condition (financial or otherwise), operations, assets, liabilities, business or prospects of the Company other than as disclosed in this Agreement including the Exhibits attached hereto. 2.20 Compliance with Laws in General. The Company, the Shareholders and to the best knowledge of the Shareholders, Company's doctor 9 15 and licensed employees have complied with all applicable laws, rules, regulations and licensing requirements, including, without limitation, the Federal Environmental Protection Act, the Occupational Safety and Health Act, the Americans with Disabilities Act and any environmental laws and medical waste laws, and there exist no violations by the Company, any Shareholder or any doctor or licensed employee of the Company of any federal, state or local law or regulation. Neither the Company nor any Shareholder has received any notice of a violation of any federal, state and local laws, regulations and ordinances relating to the operations of the business and assets of the Company and no notice of any pending inspection or violation of any such law, regulation or ordinance has been received by the Company or any Shareholder. 2.21 Medicare and Medicaid Programs. The Company and each doctor and licensed employee of the Company is qualified for participation in the Medicare and Medicaid programs and is party to provider agreements for such programs which are in full force and effect with no defaults having occurred thereunder. The Company, each Shareholder and each doctor and licensed employee of the Company has timely filed all claims or other reports required to be filed with respect to the purchase of services by third-party payors, and all such claims or reports are complete and accurate, and there is no liability to any payor with respect thereto. There are no pending appeals, overpayment determinations, adjustments, challenges, audit, litigation or notices of intent to open Medicare or Medicaid claim determinations or other reports required to be filed by the Company, any Shareholder and any licensed employee of the Company. Neither the Company, nor any Shareholder, nor to the knowledge of the Shareholders, any doctor or licensed employee of the Company has been convicted of, or pled guilty or nolo contendere to, patient abuse or negligence, or any other Medicare or Medicaid program related offense and none has committed any offense which may serve as the basis for suspension or exclusion from the Medicare and Medicaid programs. 2.22 Fraud and Abuse. The Company and all persons and entities providing professional services for the Company's business have not, to the knowledge of the Company and the Shareholders, engaged in any activities which are prohibited under ss. 1320a-7b or ss. 1395nn of Title 42 of the United States Code or the regulations promulgated thereunder, or related state or local statutes or regulations, or which are prohibited by rules of professional conduct, including, but not limited to, the following: (a) knowingly and willfully making or causing to be made a false statement or representation of a material fact in any application for any benefit or payment; (b) knowingly and willfully making or causing to be made any false statement or representation of a material fact for use in determining rights to any benefit or payment; (c) any failure by a claimant to disclose knowledge of the occurrence of any event affecting the initial or continued right to any benefit or payment on its own behalf or on behalf of another, with the intent to fraudulently secure such benefit or payment; and (d) knowingly and willfully soliciting or receiving any remuneration (including any kickback, bribe or rebate) directly or indirectly, overtly or covertly, in cash or in kind, or offering to pay or receive such remuneration (i) in return for referring an individual to a person for the furnishing or arranging for the furnishing of any item or service for which payment may be made in whole or in part by Medicare or Medicaid, or (ii) in return for purchasing, leasing or ordering or arranging for, or recommending, purchasing, leasing or ordering any good, facility, service or item for which payment may be made in whole or in part by Medicare or 10 16 Medicaid, or (e) referring a patient for designated health services to or providing designated health services to a patient upon referral from an entity or person with which the doctor or an immediate family member has a financial relationship, and to which no exception under ss.1395nn of Title 42 of the United States Code applies. 2.23 No Untrue Representations. No representation or warranty by the Company or any Shareholder in this Agreement, and no Exhibit or certificate issued or executed by, or information furnished by, officers or directors of the Company or any Shareholder and furnished or to be furnished to Purchaser pursuant hereto, or in connection with the transactions contemplated hereby, contains or will contain any untrue statement of a material fact, or omits or will omit to state a material fact necessary to make the statements or facts contained therein not misleading. 2.24 Distributions and Repurchases. No distribution, payment or dividend of any kind has been declared or paid by the Company on any of its capital stock since the Balance Sheet Date. No repurchase of any of the Company's capital stock has been approved, effected or is pending, or is contemplated by the Board of Directors of the Company. 2.25 Ownership Interests of Interested Persons: Competitors. Neither the Company, nor any of its directors, officers, or Shareholders (or members of the family of any thereof) is, or within the last three years was, a party to any contract, lease, agreement or arrangement, including, but not limited to, any joint venture or consulting agreement with or has any financial interest in any doctor, hospital, pharmacy, home health agency or other person or entity which is in a position to make or influence referrals to, or otherwise generate business for, the Company or to provide services, lease space, lease equipment or engage in any other venture or activity with the Company or compete with the Company other than as disclosed in this Agreement including the Exhibits attached hereto. 2.26 All of the inventory reflected on the balance sheet or thereafter acquired (and not subsequently sold in the ordinary course of business) consist of items of a quality and quantity usable or saleable in the ordinary course of business as first quality items (except obsolete or discontinued inventory or except to the extent specifically reserved against), valued in a manner consistent with past practice and, with respect to after-acquired inventory, valued at prices at least equal to the lower of the cost thereof or fair market value. The inventories and supplies of the Company are at normal and adequate levels for the continuation of the Company s business in the ordinary course. All work-in-progress can be completed for sale in the ordinary course of business in accordance with the usual standards and practices of the Company. 2.27 Certain Practices. Neither the Company nor, to the best knowledge of the Shareholders, any of its officers, directors or stockholders has, directly or indirectly, given or agreed to give any significant rebate, gift or similar benefit to any supplier, customer, governmental employee or other person who was, is or may be in a position to help or hinder the Company (or assist in connection with any actual or proposed transaction) which could subject the Company or Purchaser to any damage or penalty in any civil, criminal or governmental action, other than as disclosed in this Agreement including the Exhibits attached hereto. 11 17 2.28 Environmental Matters. Except as set forth on Exhibit 2.29 or other than as disclosed in this Agreement including the Exhibits attached hereto, no event has occurred or condition exists or operating practice is being employed that could give rise to any claim, action, order or award under any environmental law or environmental permit. The Company is and the Company s leased properties are in compliance with all environmental laws, except where the noncompliance therewith has not had and would not have a material adverse effect on the Company s business, operations, assets, liabilities or financial condition. 2.29 Significant Customers and Suppliers. Set forth on Exhibit 2.28 is a list of the ten largest customers and ten largest suppliers of the Company for the most recent twelve month period, together with the amount of sales or purchases attributable to such customers or suppliers expressed in dollars. No customer or supplier which was significant to the Company during the past three years has terminated, materially reduced or threatened to terminate or materially reduce its purchases from or provision of products or services to the Company, as the case may be. 2.30 Broker's Fee. No person has or will have, as a result of the execution, delivery and performance by the Shareholders of this Agreement, any right, interest or claim against or upon Purchaser or any other person for any commission, fee or other compensation as finder or broker or in any similar capacity. SECTION 3. REPRESENTATIONS AND WARRANTIES OF PURCHASER Purchaser hereby represents and warrants to the Shareholders as follows: 3.1 Corporate Existence: Good Standing. Purchaser is a corporation duly organized and existing and in good standing under the laws of the State of Delaware, respectively. 3.2 Power and Authority. Purchaser has corporate power to execute, deliver and perform this Agreement and all agreements and other documents executed and delivered by it pursuant to this Agreement, and has taken all actions required by law, its Certificate or Articles of Incorporation, its Bylaws or otherwise, to authorize the execution, delivery and performance of this Agreement and such related documents. The execution and delivery of this Agreement and the agreements related hereto executed and delivered pursuant to this Agreement do not and, subject to the receipt of consents to assignments of leases and other contracts where required and the receipt of regulatory approvals where required, the consummation of the transactions contemplated hereby will not, violate any provision of the Certificate or Articles of Incorporation or Bylaws of Purchaser or any provisions of, or result in the acceleration of, any obligation under any mortgage, lien, lease, agreement instrument, order, arbitration award, judgment or decree to which Purchaser is a party or by which either of them is bound, or violate any restrictions of any kind to which Purchaser is subject. 3.3 No Untrue Representations. No representation or warranty by Purchaser in this Agreement, and no Exhibit or certificate issued by officers or 12 18 directors of Purchaser and furnished or to be furnished to the Company or the Shareholders pursuant hereto, or in connection with the transactions contemplated hereby, contains or will contain any untrue statement of a material fact, or omits or will omit to state a material fact necessary to make the statements or facts contained therein not misleading. SECTION 4. COVENANTS OF THE SHAREHOLDERS The Shareholders, jointly and severally, agree that between the date hereof and the Closing Date: 4.1 Consummation of Agreement. The Company and the Shareholders shall use their best efforts to cause the consummation of the transactions contemplated hereby in accordance with their terms and conditions. 4.2 Business Operations. The Company and the Shareholders shall operate the Company's business in the ordinary course. The Company shall not enter into any lease, contract, indebtedness, commitment, purchase or sale or acquire or dispose of any capital asset except in the ordinary course of business. The Company and the Shareholders shall use their best efforts to preserve the business and assets of the Company intact and shall not take any action that would have an adverse effect on the business or assets of the Company, including without limitation, any action the primary purpose or effect of which is to generate or preserve cash; provided that the Company may continue to operate in the ordinary course of business. The Company and the Shareholders shall use their best efforts to preserve intact the relationships with payors, customers, suppliers, patients and others having significant business relations with the Company. The Company shall collect its receivables and pay its trade payables in the ordinary course of business. The Company shall not introduce any new method of management, operations or accounting. 4.3 Access and Notice. The Company and the Shareholders shall permit Purchaser and their authorized representatives access to, and make available for inspection, all of the assets and business of the Company and all of its assets, including employees, customers and suppliers and permit Purchaser, and its authorized representatives to inspect and make copies of all documents, records and information with respect to the business or assets of the Company as Purchaser or its representatives may request. The Company and the Shareholders shall promptly notify Purchaser in writing of (a) any notice or communication relating to a default or event that, with notice or lapse of time or both, could become a default, under any contract, commitment or obligation to which the Company is a party, and (b) any adverse change in the Company's business, financial condition or the conditions of its assets. 4.4 Approvals of Third Parties and Permits and Consents. The Company and the Shareholders shall use their best efforts to secure all necessary approvals and consents of third parties to the consummation of the transactions contemplated hereby, including consents described on Exhibit 2.5. The Company and the Shareholders shall use their best efforts to obtain all licenses, permits, approvals or other authorizations required under any law, rule, regulation, or otherwise for the consummation of the transactions contemplated hereby. Following the Closing Date and at the expense of the Shareholders, the Shareholders shall, upon Purchaser's request, exercise their best efforts to obtain 13 19 any such approvals, consents, permits, licenses or authorizations which have not been obtained on or prior to the Closing Date. 4.5 Acquisition Proposals. The Company and the Shareholders shall not, and shall use their best efforts to cause the Company's employees, agents and representatives not to, initiate, solicit or encourage, directly or indirectly, any inquiries or the making or implementation of any proposal or offer, including without limitation, any proposal or offer to the Shareholders, with respect to a merger, acquisition, consolidation or similar transaction involving, or the purchase of all or any significant portion of the assets or any equity securities of the Company or engage in any negotiations concerning, or provide any confidential information or data to, or have any discussions with, any person relating to such proposal or offer, and the Company and the Shareholders will immediately cease any such activities, discussions or negotiations heretofore conducted with respect to any of the foregoing. 4.6 Employee Matters. The Shareholders shall not, without the prior written approval of Purchaser, except as required by law, increase the cash compensation of any Shareholder or other employee or an independent contractor of the Company, adopt, amend or terminate any compensation plan, employment agreement, independent contractor agreement, employee policies and procedures or employee benefit plan, take any action that could deplete the assets of any employee benefit, or fail to pay any premium or contribution due or file any report with respect to any employee benefit plan or take any actions with respect to its employees or employee matters without prompt written notice thereof to the Purchaser or which might have a material adverse effect on the Company, its business, assets or prospects. 4.7 Distributions and Repurchases. No distribution, payment or dividend of any kind will be declared or paid by the Company, nor will any repurchase of any of the Company's capital stock be approved or effected. 4.8 Requirements to Effect Transaction. The Company and each Shareholder shall use their best efforts to take, or cause to be taken, all actions necessary to effect the transaction contemplated hereby under applicable law, including without limitation the filing with the appropriate government officials of all necessary documents in form approved by counsel for the parties to this Agreement. 4.9 Voting of Shares. Each Shareholder agrees that until the earlier of the Closing Date or the termination of this Agreement, each such Shareholder shall vote all shares of Company common stock owned by the Shareholders at any meeting of the stockholders of the Company or take action by written consent for adoption of this Agreement, as hereby amended, and in favor of the transaction contemplated hereby and any other transactions contemplated by this Agreement, and against any action, omission or agreement which would impede or interfere with, or have the effect of discouraging, the transaction contemplated hereby. 4.10 Accounting and Tax Matters. The Company will not change in any material respect the accounting methods or practices followed by the Company (including any material change in any assumption underlying, or any method of calculating, any bad debt, contingency or other reserve), except as may 14 20 be required by generally accepted accounting principles. The Company will not make any material tax election except in the ordinary course of business consistent with past practice, change any material tax election already made, adopt any tax accounting method except in the ordinary course of business consistent with past practice, change any tax accounting method, enter into any closing agreement, settle any tax claim or assessment or consent to any tax claim or assessment or any waiver of the statute of limitations for any such claim or assessment. The Company will duly, accurately and timely (without regard to any extensions of time) file all returns, information statements and other documents relating to taxes of the Company required to be filed by it, and pay all taxes required to be paid by it, on or before the Closing Date. The following provisions shall govern the allocation of responsibility as between the Purchaser and the Shareholders for certain tax matters following the Closing Date: (a) The Purchaser and the Shareholders shall cooperate fully, as and to the extent reasonably requested by the other, in connection with the filing of returns and other forms required to be filed with respect to any taxes, fees, levies, duties, tariffs, imposts and other charges of any kind imposed by any government or taxing authority ("Taxes") and as to any audit, litigation or other proceeding with respect to Taxes. Such cooperation shall include the retention and (upon the other s reasonable request) the provision of records and information which are reasonably relevant to any such audit, litigation or other proceeding and making employees available on a mutually convenient basis to provide additional information and explanation of any material provided. The Shareholders and the Purchaser agree (i) to retain all books and records with respect to matters relating to Taxes for each taxable period until the expiration of the statute of limitations (and, to the extent notified by the Purchaser or the Shareholders, any extensions thereof) of the respective taxable periods, and to abide by all record retention agreements entered into with any taxing authority, and (ii) to give the other reasonable written notice prior to transferring, destroying or discarding any such books and records and, if the party so requests, to allow the other party to take possession of such books and records. (b) The Purchaser and the Shareholders further agree, upon reasonable request, to use their reasonable best efforts to obtain any certificate or other document from any governmental authority or any other person as may be necessary to mitigate, reduce or eliminate any Tax imposed (including, but not limited to, with respect to the transactions contemplated herein). 4.11 Conversion Transaction. On or prior to the Closing Date, the Shareholders and the Company shall file with the Secretary of State of Louisiana an amendment to and/or a restatement of the Company's Articles of Incorporation and shall take such other action as may be necessary to convert itself into a general business corporation. 4.12 Survival of Covenants. All covenants contained in this Agreement (regardless of whether expressly labeled as such) shall survive the Closing. 4.13 Covenant Not to Compete. Each of the Shareholders agrees that, during the period commencing on the Closing Date and ending on the third 15 21 anniversary of the Closing Date, the Shareholder will not, without the prior written consent of Purchaser: (a) for itself or on behalf of any other person, directly or indirectly, either as principal, partner, agent, independent contractor, stockholder, consultant, representative or in any other capacity, own, manage, operate or control, or otherwise in any manner have a financial interest in any business which is directly or indirectly competitive with the Company or the business as conducted by Purchaser located anywhere in the state(s) of Louisiana and Mississippi (the "Restricted Territory"), except that nothing contained herein shall preclude the Shareholders from purchasing or owning securities of any such business if such securities are publicly traded, and provided that such holdings do not exceed two (2%) percent of the issued and outstanding securities of any class of securities of such business; or (b) without limiting the generality of the preceding clause (a), either individually or on behalf of or through any third party, solicit, divert or appropriate or attempt to solicit, divert or appropriate, for the purpose of competing with the Company or the business as conducted by Purchaser or any present or future parent, subsidiary or other affiliate of Purchaser which is engaged in a similar business as Purchaser, any existing or prospective customer, partner, supplier, licensee or licensor of Purchaser located within the Restricted Territory; or (c) either individually or on behalf of or through any third party, directly or indirectly, employ, or knowingly permit any company or business organization directly or indirectly controlled by it to employ, or solicit, entice or persuade or attempt to solicit, entice or persuade to leave the services of Purchaser or any such parent, subsidiary or affiliate for any reason, any other employees of or consultants to Purchaser. For the purposes of this section, the engaging in a business activity shall be deemed "competitive" with the business as conducted by Purchaser if such activity, directly or indirectly, relates to the business of distributing and selling eyeglasses and contact lenses and providing related optical and optometric prescriptions, goods and services to persons with vision disorders, or the business of participating in any manner in the delivery of vision corrective or refractive services (including, without limitation, photo refractive keratectomy) to persons with vision disorders. 16 22 Each Shareholder recognizes and acknowledges that (i) the types of competition which are prohibited by this Agreement are narrow and reasonable in relation to the types of business activities in which the Shareholder is or may engage and (ii) the specific but broad geographical scope of the provisions of this section is reasonable, legitimate and fair to the Shareholder in light of Purchaser s need to conduct its business in a large geographic area in order to have a sufficient base to make its business profitable and in light of the limited restrictions on the type of business activities prohibited herein compared to the types of business activities in which the Shareholder is or may engage. Each Shareholder hereby expressly acknowledges that any breach or threatened breach of any of the terms and/or conditions set forth in this section will result in substantial, continuing and irreparable injury to Purchaser. Therefore, the Shareholder hereby agrees that, in addition to any other remedy that may be available to Purchaser, Purchaser shall be entitled to injunctive relief, specific performance or other equitable relief by a court of appropriate jurisdiction in the event of any breach or threatened breach of the terms of this Agreement. Furthermore, in addition to the remedies Purchaser may seek and obtain pursuant to this section, the period during which the covenants contained herein apply shall be extended by any and all periods during which the Shareholder shall be found by a court of competent jurisdiction to have been in violation of the covenants contained in this Agreement. SECTION 5. COVENANTS OF PURCHASER Purchaser agrees that between the date hereof and the Closing Date: 5.1 Consummation of Agreement. Upon the satisfaction of Purchaser's conditions precedent, Purchaser shall cause the consummation of the transactions contemplated hereby in accordance with their terms and provisions. 5.2 Approvals of Third Parties and Permits and Consents. Purchaser shall use its best efforts to secure all necessary approvals and consents of third parties to the consummation of the transactions contemplated hereby. SECTION 6. PURCHASER CONDITIONS PRECEDENT The obligations of Purchaser hereunder are subject to the fulfillment at or prior to the Closing Date of each of the following conditions: 6.1 Representations and Warranties. The representations and warranties of the Shareholders contained herein shall have been true and correct in all respects when initially made and shall be true and correct in all respects as of the Closing Date. 6.2 Covenants and Conditions. The Shareholders shall have performed and complied with all covenants and conditions required by this Agreement to be performed and complied with by the Shareholders prior to the Closing Date, in form and substance reasonably satisfactory to Purchaser. 6.3 Proceedings. No action, proceeding or order by any court or governmental body shall have been threatened orally or in writing, asserted, 17 23 instituted or entered to restrain or prohibit the carrying out of the transactions contemplated hereby. 6.4 No Material Adverse Change. No material adverse change in the condition (financial or otherwise), operations, assets, liabilities, business or prospects of the Company shall have occurred since the Balance Sheet Date. 6.5 Approval of the following named lessors of the properties to the following subsidiaries to the consummation of the transactions contemplated hereby: Vision Oakwood, Inc. Vision CBD, Inc. Vision Esplanade, Inc. Vision Tomorrow, Inc. 6.6 The Company shall have given notice of the transactions contemplated hereby by notices prepared by the Purchaser to the reasonable satisfaction of the Shareholders to the lessors of the following subsidiaries: Vision Plaza, Inc. Vision Horizon, Inc. Vision Lake Forest, Inc. Vision Southland, Inc. Vision Hammond Square, Inc. Vision Uptown, Inc. Vision Frontiers, Inc. Vision Unlimited Laboratories, Inc. Vision Universe, Inc. Vision Mississippi, Inc. Orleans Spectacle Corp. 6.7 Employment Arrangements. The Company and Shareholders will cooperate with Purchaser and any professional corporation or association created at the suggestion of Purchaser for the purpose of employing all of the professional employees of the Company. 6.8 Consents and Approvals: Succession Court Approval. The Shareholders shall have obtained the approval of the court in the Succession of Tom I. Greenberg, bearing proceeding number 96-13287 of the Civil District Court for the Parish of Orleans, State of Louisiana, to sell the Company stock at a price not to exceed the purchase price. 6.9 Closing Deliveries. Purchaser shall have received all documents, duly executed in form and substance satisfactory to Purchaser and its counsel, referred to in Section 8.1. 6.10 Debt and Receivables. There shall be no indebtedness, receivables or payables between the Company and its shareholders or affiliates and the Company shall not have any liabilities, including indebtedness, guaranties and capital leases, that are not disclosed in Section 2.16. 18 24 6.11 Purchaser shall have received written resignations from any officer or director of the Company whose resignation is requested by Purchaser, each such resignation to be effective as of the Closing date. 6.12 Dissenting Shares. No holder of the Company's common stock shall have demanded appraisal for the shares of Company common stock held by such holder in accordance with the Louisiana Business Law. 6.13 No Material Change in Working Capital. There shall have been no material change in the Company s Working Capital. 6.14 No Material Adverse Economic Event. There shall not have occurred (i) any general suspension of trading in, or limitation on prices for, or other extraordinary event affecting securities on NASDAQ, (ii) a declaration of a banking moratorium or any suspension of payments in respect of banks in the United States, (iii) any material limitation (whether or not mandatory) by any governmental authority on, or any other event which might affect the extension of credit by, lending institutions generally or (iv) in the case of any of the foregoing existing on the date of execution hereof, a material acceleration or worsening thereof. 6.15 The receipt of an opinion letter of Baldwin & Haspel, L.L.C. substantially in the form annexed hereto as Annex 2 as modified by a letter dated June 26, 1997 from Leon H. Rittenberg, Jr. to Leonard Weiser-Varon. SECTION 7. THE COMPANY'S AND THE SHAREHOLDERS' CONDITIONS PRECEDENT The obligations of the Company and the Shareholders hereunder are subject to fulfillment at or prior to the Closing Date of each of the following conditions: 7.1 Representations and Warranties. The representations and warranties of Purchaser contained herein shall have been true and correct in all respects when initially made and shall be true and correct in all respects as of the Closing Date. 7.2 Covenants and Conditions. Purchaser shall have performed and complied with all covenants and conditions required by this Agreement to be performed and complied with by Purchaser prior to the Closing Date. 7.3 Proceedings. No action, proceeding or order by any court or governmental body shall have been threatened orally or in writing, asserted, instituted or entered to restrain or prohibit the carrying out of the transactions contemplated hereby. 7.4 Closing Deliveries. The Company shall have received all documents, duly executed in form satisfactory to the Company and its counsel, referred to in Section 8.2. SECTION 8. CLOSING DELIVERIES 19 25 8.1 Deliveries of the Company and the Shareholders. At or prior to the Closing, the Company and the Shareholders shall deliver to Purchaser the following, all of which shall be in a form satisfactory to counsel to Purchaser: (a) stock certificates evidencing the Shareholders' ownership of the Shares together with blank stock powers executed by such Shareholders; (b) certificates of each Shareholder, dated as of the Closing Date, (i) as to the truth and correctness of the representations and warranties of each Shareholder contained herein; (ii) as to the performance of and compliance by each Shareholder with all covenants contained herein; and (iii) certifying that all conditions precedent of each Shareholder to the Closing have been satisfied; (c) a certificate, dated within 20 days of the Closing Date, of the Secretary of the State of Louisiana establishing that the Company is in existence and is in good standing to transact business in its state of incorporation, and a certificate, dated within 20 days of the Closing Date, of the Secretary of State of the State of Mississippi establishing that the Vision Mississippi, Inc. is in existence and is in good standing to transact business in Mississippi; (d) all authorizations, consents, approvals, permits and licenses referred to in Sections 2.3 and 2.5; (e) the resignations of the directors and officers of the Company as requested by Purchaser; and (f) such other instruments and documents as reasonably requested by Purchaser to carry out and effect the purpose and intent of this Agreement. 8.2 Deliveries of Purchaser. At or prior to the Closing, Purchaser shall deliver to the Company the following, all of which shall be in a form satisfactory to counsel to the Company and the Shareholders: (a) the Consideration; (b) a copy of the resolutions of the Board of Directors of Purchaser authorizing the execution, delivery and performance of this Agreement and all related documents and agreements each certified by the Secretary as being true and correct copies of the original thereof; (c) certificates of the President of Purchaser, dated as of the Closing Date, (i) as to the truth and correctness of the representations and warranties of Purchaser contained herein; (ii) as to the performance of and compliance by Purchaser with all covenants contained herein; and (iii) certifying that all conditions precedent of Purchaser to the Closing have been satisfied; (d) a certificate of the Secretary of Purchaser certifying as to the incumbency of the directors and officers of Purchaser and as to the signatures of such directors and officers who have executed documents delivered at the Closing on behalf of Purchaser; 20 26 (e) certificates, dated within 20 days of the Closing Date, of the Secretary of the State of Delaware establishing that Purchaser is in existence and is in good standing to transact business in the State of Delaware; (f) such other instruments and documents as reasonably requested by the Company or Shareholders to carry out and effect the purpose and intent of this Agreement. SECTION 9. NATURE AND SURVIVAL OF REPRESENTATIONS AND WARRANTIES; INDEMNIFICATION 9.1 Nature and Survival. All statements contained in this Agreement or in any Exhibit attached hereto, any agreement executed pursuant hereto, and any certificate executed and delivered by any party pursuant to the terms of this Agreement, shall constitute representations and warranties. All such representations and warranties, and all representations and warranties expressly labeled as such in this Agreement shall survive the date of this Agreement and the Closing Date for a period of two (2) years following the Closing Date (the "Second Anniversary"), except that (i) all claims, if any, asserted in writing on or prior to the Second Anniversary identified as a claim for indemnification pursuant to this section 9.1 shall survive until finally resolved and satisfied in full, and (ii) claims, if any, that (A) are based upon fraud by any party hereto or (B) assert liability for any taxes imposed on or with respect to income shall survive for the full period of the applicable statute of limitations, and until finally resolved and satisfied in full if asserted on or prior to such date. The Shareholders shall jointly and severally indemnify, defend, and hold harmless Purchaser and its affiliates, and the officers, directors and employees of the foregoing, and their successors and assigns from, against and with respect to any claim, liability, obligation, loss, damage, assessment, judgment, cost and expense (including, without limitation, reasonable attorneys , consultants and accountants fees and costs and expenses reasonably incurred in investigating, preparing, defending against or prosecuting any claim, action or proceeding) of any kind or character (collectively, "Damages"), arising out of or in any manner incident, relating or attributable to: (a) any inaccuracy in any representation or breach of warranty of the Shareholders contained in this Agreement or in any related document; (b) any failure by the Shareholders to perform or observe, or to have performed or observed, in full, any covenant, agreement or condition to be performed or observed by them under this Agreement; or (c) the Shareholder's ownership of the shares or any uninsured third party claims arising from matters occurring prior to the Closing. In the event of the occurrence of any event which any party asserts is an indemnifiable event pursuant to this section 9.1, the party claiming indemnification (the "Indemnified Party") shall provide prompt notice to the party required to provide indemnification (the "Indemnifying Party"), specifying in reasonable detail the facts and circumstances (to the extent then known) with respect to such claim and the basis for which indemnification is available 21 27 hereunder. If such event involves the claim of any third party, the Indemnifying Party shall have the right to control the defense or settlement of such claim; provided that: (i) the Indemnified Party shall be entitled to participate in the defense of such claim at its own expense, (ii) the Indemnifying Party shall obtain the prior written approval of the Indemnified Party (which approval shall not be unreasonably withheld or delayed) before entering into any settlement of such claim if, pursuant to or as a result of such settlement, an order, injunctive or other non-monetary relief would be imposed against the Indemnified Party, (iii) the Indemnifying Party shall not be entitled to control (but shall be entitled to participate at its own expense in the defense of), and the Indemnified Party shall be entitled to have sole control over, any claim which seeks an order, injunction or other non-monetary relief against the Indemnified Party; provided that (1) the Indemnified Party shall provide written notice to the Indemnifying Party of its election to assume control over the defense of such claim pursuant to this clause (iii) and (2) the Indemnified Party shall obtain the prior written approval of the Indemnifying Party (which approval shall not be unreasonably withheld or delayed) before entering into any settlement of such claim, and/or (iv) if the Indemnifying Party is entitled but fails to assume control over the defense of a claim as provided in this section 9.1, the Indemnified Party shall have the right to defend such claim, provided further that the Indemnified Party shall obtain the prior written approval of the Indemnifying Party (which approval shall not be unreasonably withheld or delayed) before entering into any settlement of such claim if, pursuant to or as a result of such settlement, injunctive or other non-monetary relief would be imposed against the Indemnifying Party. In the event that the Indemnifying Party shall be obligated to indemnify the Indemnified Party pursuant to this section 9.1, the Indemnifying Party shall, upon payment of such indemnity in full, be subrogated to all rights of the Indemnified Party with respect to the claim to which such indemnification relates. However, the Shareholders shall not be required to indemnify any Indemnified Party for any item of damage unless the aggregate amount of such item of damage, together with the aggregate amount of all prior damages of such party, exceeds $25,000.00, in which event the Indemnified Party shall be entitled to indemnification for damages in excess of $25,000.00. SECTION 10. TERMINATION This Agreement may be terminated: (a) at any time by mutual agreement of all parties; 22 28 (b) at any time prior to the Closing by Purchaser if any material representation or material warranty of the Company or any Shareholder contained in this Agreement or in any certificate or other document executed and delivered by the Company or any Shareholder pursuant to this Agreement is or becomes untrue or breached in any material respect or if the Company or any Shareholder fails to comply in any material respect with any covenant or agreement contained herein, and any such misrepresentation, noncompliance or breach is not cured, waived or eliminated within twenty (20) days after receipt of written notice thereof; (c) at any time prior to the Closing by the Shareholders if any material representation or material warranty of Purchaser contained in this Agreement or in any certificate or other document executed and delivered by Purchaser pursuant to this Agreement is or becomes untrue or breached in any material respect or if Purchaser fails to comply in any material respect with any covenant or agreement contained herein and such misrepresentation, noncompliance or bread is not cured, waived or eliminated within twenty (20) days after receipt of written notice thereof; SECTION 11. MISCELLANEOUS 11.1 Notices. Any communications required or desired to be given hereunder shall be deemed to have been properly given if sent by hand delivery, or by facsimile and overnight courier, to the parties hereto at the following addresses, or at such other address as either party may advise the other in writing from time to time: 23 29 If to the Purchaser: Vision Plaza Corp. c/o Cambridge Eye Associates, Inc. 100 Jeffrey Avenue Holliston, MA 01746 Attention: Alan B. MacDonald with a copy of each notice directed to Purchaser to: Lewis Geffen Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, PC One Financial Center Boston, Massachusetts 02111 If to the Shareholders: Mrs. Marjory Greenberg One River Place, Apt. 4H 3 Poydras Street New Orleans, LA 70130 with a copy to: Leon H. Rittenberg, Jr. 1100 Poydras Street, Suite 2200 New Orleans, LA 70163-2200 Facsimile: 504-585-7751 All such communications shall be deemed to have been delivered on the date of hand delivery or on the next business day following the deposit of such communications, properly addressed and postage prepaid with the overnight courier. 11.2 Further Assurances. Each party hereby agrees to perform any further acts and to execute and deliver any documents which may be reasonably necessary to carry out the provisions of Agreement. 11.3 Each Party to Bear Costs. Each of the parties to this Agreement shall pay all of the costs and expenses incurred by such party in connection with the transactions contemplated by this Agreement, whether or not such transactions are consummated. 11.4 Public Disclosures. Except as otherwise required by law, no party to this Agreement shall make any public or other disclosure of this Agreement or the transactions contemplated hereby without the prior consent of the other parties. The parties to this Agreement shall cooperate with respect to the form and content of any such disclosures. 11.5 GOVERNING LAW. THIS AGREEMENT SHALL BE INTERPRETED, CONSTRUED AND ENFORCED IN ACCORDANCE WITH 24 30 THE LAWS OF THE STATE OF LOUISIANA AND APPLIED WITHOUT GIVING EFFECT TO ANY CONFLICTS OF LAWS PRINCIPLES. 11.6 Captions. The captions or headings in this Agreement are made for convenience and general reference only and shall not be construed to describe, define or limit the scope or intent of the provisions of this Agreement. 11.7 Integration of Exhibits. All Exhibits attached to this Agreement are integral parts of this Agreement as if fully set forth herein, and all statements appearing therein shall be deemed disclosed for all purposes and not only in connection with the specific representation in which they are explicitly referenced. 11.8 ENTIRE AGREEMENT/AMENDMENT. THIS INSTRUMENT, INCLUDING ALL EXHIBITS ATTACHED HERETO, CONTAINS THE ENTIRE AGREEMENT OF THE PARTIES AND SUPERSEDES ANY AND ALL PRIOR OR CONTEMPORANEOUS AGREEMENTS BETWEEN THE PARTIES, WRITTEN OR ORAL, WITH RESPECT TO THE TRANSACTIONS CONTEMPLATED HEREBY. 11.9 Counterparts. This Agreement may be executed in several counterparts, each of which when so executed shall be deemed to be an original, and such counterparts shall together constitute and be one and the same instrument. 11.10 Binding Effect/Assignment. This Agreement shall be binding on, and shall inure to the benefit of, the parties hereto, and their respective successors and assigns, and no other person shall acquire or have any right under or by virtue of this Agreement. No party may assign any right or obligation hereunder without the prior written consent of the other parties; provided, however, that Purchaser may assign its rights and obligations hereunder to an affiliate, which assignment shall not release Purchaser of its obligations hereunder. 11.11 No Rule of Construction. The parties acknowledge that this Agreement was initially prepared by Shareholders, and that all parties have read and negotiated the language used in this Agreement. The parties agree that, because all parties participated in negotiating and drafting this Agreement, no rule of construction shall apply to this Agreement which construes ambiguous language in favor of or against any party by reason of that party's role in drafting this Agreement. 11.12 Costs of Enforcement. In the event that Purchaser, on the one hand, or the Company or the Shareholders, on the other hand, file suit in any court against any other party to enforce the terms of this Agreement against the other party or to obtain performance by it hereunder, the prevailing party will be entitled to recover all reasonable costs, including reasonable attorneys' fees, from the other party as part of any judgment in such suit. The term "prevailing party" shall mean the party in whose favor final judgment after appeal (if any) is rendered with respect to the claims asserted in the Complaint. "Reasonable attorneys' fees" are those reasonable attorneys' fees actually incurred in obtaining a judgment in favor of the prevailing party. 25 31 11.13 Amendments: Waivers. This Agreement may be amended, modified or supplemented only by an instrument in writing executed by all the parties hereto. Any waiver of the terms and conditions hereof must be in writing, and signed by the parties hereto. The waiver of any of the terms and conditions of this Agreement shall not be construed as a waiver of any other terms and conditions hereof. 11.14 Severability. If any provision of this Agreement shall be found to be illegal, invalid or unenforceable under present or future laws, such provision shall be fully severable and this Agreement shall be construed and enforced as if such provision never comprised a part hereof; and the remaining provisions hereof shall remain in full force and effect. In lieu of such provision, there shall be added automatically as part of this Agreement, a provision as similar in its terms to such provision as may be possible and be legal, valid and enforceable. 11.15 Jimmy Bradford. The Company may grant Jimmy Bradford an employment contract for a term of not more than two years and for compensation not less than that which he is presently earning upon terms and conditions reasonably satisfactory to Purchaser. 11.16 Jeff Greenberg. The Company may grant Jeff Greenberg a consulting contract for a term of two years at an annual compensation of $35,000.00 per year, which contract shall require consulting services of not less than twenty hours per month. This compensation shall be paid quarterly upon receipt of appropriate invoices. 11.17 Closing. The Closing shall take place at the offices of Baldwin & Haspel, L.L.C. in New Orleans, Louisiana. If the Closing has not been consummated prior to July 30, 1997, the Closing shall be at 10:00 a.m. on July 31, 1997. 11.18 Deposit. Upon the execution of this Agreement by the Sellers, the Purchaser becomes obligated to deposit immediately with Baldwin & Haspel, L.L.C. Fifty Thousand and No/100 ($50,000.00) Dollars, and failure to do shall be considered a breach of this Agreement. This deposit is to be non-interest bearing and shall be placed in any federally insured banking or savings and loan institution without responsibility on the part of Baldwin & Haspel, L.L.C. in case of failure or suspension of such institution. In the event that Purchaser fails to comply with this Agreement within the time specified, Sellers shall have the right to declare the deposit ipso facto forfeited without formality beyond tender of title to Purchaser. The forfeiture of said deposit shall be deemed as liquidated damages and not as a penalty for Purchaser's failure to comply with this Agreement. In the event that Purchaser complies with this Agreement within the time specified, the deposit shall be credited against the purchase price if the sale is consummated and if the sale is not consummated, it shall be returned to the Purchaser. IN WITNESS WHEREOF, the parties have executed this Agreement as of the day and year first above written. 26 32 PURCHASER: VISION PLAZA CORP. BY: /s/ Alan B. MacDonald -------------------------------------------- ALAN B. MACDONALD VICE PRESIDENT SHAREHOLDERS: /s/ Marjory O. Greenberg - ------------------------------------------------ MARJORY O. GREENBERG, AS TESTAMENTARY EXECUTRIX OF THE SUCCESSION OF TOM I. GREENBERG /s/ Peter Brown - ------------------------------------------------ PETER BROWN 27 33 INDEX TO EXHIBITS Exhibit Description 1.2(a) Promissory Note - Mrs. Marjory O. Greenberg 1.2(b) Promissory Note - Donald Weil 1.2(c) Agreement- $63,000 2.1 Capitalization of the Company 2.3 Permits and Licenses 2.5 Consents 2.6 Financial Statements 2.7 Leases 2.9 Real and Personal Property; Encumbrances 2.10 Patents and Trademarks; Names 2.11(a) through 2.11(c) Directors and Officers; Payroll Information 2.12 Litigation 2.13 Contracts (other than Leases) 2.14 Changes Since Balance Sheet Date 2.17 Insurance Policies 8.1(h) Shareholder Release ANNEX I Consideration ANNEX II Legal Opinion 28 34 ANNEX I CONSIDERATION The consideration to be received by the Shareholders pursuant to the Agreement (the "Consideration") is $1,832,916.02 cash payable to Mrs. Marjory O. Greenberg, in her capacity as the Testamentary Executrix of the Succession of Tom I. Greenberg (Civil District Court No. 96-13287) and $168,000.00 cash payable to Peter Brown. As additional consideration, the Purchaser shall cause the payment of the consulting fees due Jeff Greenberg in the amount of $35,000.00 per year for two years pursuant to the terms of section 11.16. 29 EX-10.2 3 PROMISSORY NOTE 1 EXHIBIT 10.2 PROMISSORY NOTE $594,110.80 Holliston, Massachusetts as of September 2, 1997 FOR VALUE RECEIVED, Stephen M. Blinn, an individual residing at 6 Thoreau Circle, Beverly, MA 01915 (the "Borrower") hereby promises to pay to Sight Resource Corporation, a Delaware corporation (the "Lender") at 100 Jeffrey Avenue, Holliston, MA 01746, or at such other place as the Lender may from time to time designate, the principal amount of Five Hundred Ninety Four Thousand One Hundred Ten Dollars and Eighty Cents ($594,110.80) in lawful money of the United States of America, on the Maturity Date (as hereinafter defined). Interest shall accrue on the outstanding principal balance hereof commencing on the date hereof until maturity (whether as stated, by acceleration or otherwise) at a rate of six and fifty-five hundredths percent (6.55%) per annum, compounding annually, and shall be payable semi-annually on the earlier of the Maturity Date or the occurrence of an "Event of Default" (as hereinafter defined). Interest on overdue payments shall be payable at a rate of two percent (2%) per annum above the rate payable hereunder. In no event shall the rate of interest hereunder exceed the maximum interest rate permitted by applicable law. The Borrower may, at its option, at any time and from time to time, prepay all or any part of the principal balance of this Note, without penalty or premium. This Note shall, at the option of the Lender, become immediately due and payable upon notice or demand upon the occurrence of any of the following events (each, an "Event of Default"): (a) Borrower shall fail to make any payment when due which failure continues for five(5) days after written receipt of notice from the Lender; or (b) The occurrence of any of the following with respect to the Borrower: the admission in writing of his inability, or the general inability, to pay his debts as they become due, appointment of a receiver for any part of the property of, legal or equitable assignment, conveyance or transfer of property for the benefit of creditors by, or the commencement of any proceedings under any bankruptcy or insolvency laws by or against, the Borrower, provided that it shall not be an Event of Default hereunder if a proceeding under any bankruptcy or insolvency laws commenced against the Borrower is dismissed within ninety (90) days. The "Maturity Date" shall mean the earlier to occur of (a) September 2, 2007 or (b) the date upon which the Borrower receives the proceeds of the sale of not less than 20,000 shares of Common Stock of the Lender, the shares having been acquired by the exercise of options for which the Borrower used the funds received on account of this Note. No act, omission or delay by the Lender or course of dealing between the Lender and the Borrower shall constitute a waiver of the rights and remedies of the Lender hereunder. No single or partial waiver by the Lender of any default or right or remedy which it may have shall operate as a waiver of any other default, right or remedy or of the same default, right or remedy on a future occasion. This Note shall be governed by and construed in accordance with the laws of The Commonwealth of Massachusetts (without giving effect to the conflict of laws principles thereof). 2 Any legal action or proceeding with respect to this Note may be brought in the courts of The Commonwealth of Massachusetts or of the United States of America for the District of Massachusetts, and, by execution and delivery of this Note, the Borrower hereby accepts for itself and in respect of its property, generally and unconditionally, the jurisdiction of the aforesaid courts. The Borrower hereby knowingly, voluntarily, intentionally and irrevocably waives, in connection with any such action or proceeding: (i) any objection, including, without limitation, any objection to the laying of venue or based on the grounds of forum non conveniens, which it may now or hereafter have to the bringing of any such action or proceeding in such respective jurisdictions, (ii) the right to interpose any setoff, non-compulsory counterclaim or cross-claim and (iii) to the maximum extent not prohibited by law, any right it may have to a trial by jury in respect of any litigation directly or indirectly arising out of, under or in connection with this Note. The Borrower irrevocably consents to the service of process of any of the aforementioned courts in any such action or proceeding by the mailing of copies thereof by registered or certified mail, postage prepaid, to the Borrower at its address set forth above. Nothing herein shall affect the right of the Lender to serve process in any other manner permitted by law or to commence legal proceedings or otherwise proceed against the Borrower in any other jurisdiction. No provision hereof shall be modified, altered or limited except by a written instrument expressly referring to this Note and to such provision, and executed by the Borrower and the Lender. This Note and all obligations evidenced hereby shall be binding upon the heirs, executors, administrators, successors and assigns of the Borrower and shall, together with the rights and remedies of the Lender hereunder, inure to the benefit of the Lender, its successors, endorsees and assigns. In the event the Lender or any holder hereof shall refer this Note to an attorney for collection, the Borrower agrees to pay, in addition to unpaid principal and interest, all the costs and expenses incurred in attempting or effecting collection hereunder, including reasonable attorney's fees, whether or not suit is instituted. This Note shall take effect as an instrument under seal in The Commonwealth of Massachusetts. /s/ Stephen M. Blinn -------------------- Stephen M. Blinn EX-27 4 FINANCIAL DATA SCHEDULE
5 THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM SIGHT RESOURCE CORPORATION'S BALANCE SHEET AND STATEMENT OF OPERATIONS AS OF AND FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1997 AND IS QUALIFIED IN ITS ENTIRETY BY SUCH REFERENCE TO SUCH FORM 10-Q FOR THE QUARTER ENDED SEPTEMBER 30, 1997. 1,000 US DOLLARS 9-MOS DEC-31-1997 JAN-01-1997 SEP-30-1997 1 3,883 0 3,024 515 4,133 11,384 10,169 4,236 33,886 9,835 0 0 0 88 22,800 33,886 33,141 33,141 12,058 12,058 22,102 0 261 (514) 0 (514) 0 0 0 (514) (0.06) 0
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