VISION TWENTY ONE INC, S-1/A, 1997-11-19

VISION TWENTY ONE INC
S-1/A, 1997-11-19
MANAGEMENT SERVICES

Previous: CAPTEC FRANCHISE CAPITAL PARTNERS L P IV, 424B3, 1997-11-19

Next: IMALL INC, 10QSB, 1997-11-19

<PAGE> 1

AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON NOVEMBER 19, 1997

REGISTRATION NO. 333-39031
================================================================================

SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
---------------------

AMENDMENT NO. 2

FORM S-1
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
---------------------

VISION TWENTY-ONE, INC.
(Exact name of registrant as specified in its charter)
---------------------

<TABLE>
<S> <C> <C>
FLORIDA 8741 59-3384581
(State or other jurisdiction of (Primary Standard Industrial (I.R.S. Employer
incorporation or organization) Classification Code Number) Identification No.)
</TABLE>

---------------------

<TABLE>
<S> <C>
THEODORE N. GILLETTE, PRESIDENT AND CEO
VISION TWENTY-ONE, INC. VISION TWENTY-ONE, INC.
7209 BRYAN DAIRY ROAD 7209 BRYAN DAIRY ROAD
LARGO, FLORIDA 33777 LARGO, FLORIDA 33777
(813) 545-4300 (813) 545-4300
(Address, including zip code, and telephone (Name, address, including zip code, and
number, telephone
including area code, of registrant's principal number, including area code, of agent for
executive offices) service)
</TABLE>

---------------------
WITH COPIES TO:

<TABLE>
<C> <C>
DARRELL C. SMITH, ESQUIRE JEFFREY M. STEIN, ESQUIRE
MARK A. CATCHUR, ESQUIRE KING & SPALDING
SHUMAKER, LOOP & KENDRICK, LLP 191 PEACHTREE STREET, N.E.
101 E. KENNEDY BLVD., SUITE 2800 ATLANTA, GEORGIA 30303-1763
TAMPA, FLORIDA 33602 (404) 572-4600
(813) 229-7600
</TABLE>

---------------------
Approximate date of commencement of proposed sale to the public: As soon as
practicable after this Registration Statement becomes effective.

If any of the securities being registered on this Form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, check the following box. [ ]

If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, check the following box and
list the Securities Act registration statement number of the earlier effective
registration statement for the same offering. [ ]

If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [ ]

If this Form is a post-effective amendment filed pursuant to Rule 462(d)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [ ]

If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [ ]
---------------------

THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL
FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF
THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(A),
MAY DETERMINE.
================================================================================
<PAGE> 2

INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A
REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR
MAY OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT
BECOMES EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR
THE SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE
SECURITIES IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE
UNLAWFUL PRIOR TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS
OF ANY SUCH STATE.

SUBJECT TO COMPLETION -- DATED NOVEMBER 19, 1997

PROSPECTUS
- --------------------------------------------------------------------------------

2,400,000 Shares

[VISION TWENTY-ONE LOGO] [VISION TWENTY-ONE LOGO]
Common Stock

- --------------------------------------------------------------------------------

All of the 2,400,000 shares of common stock, par value $.001 per share (the
"Common Stock"), offered hereby (the "Offering") are being sold by Vision
Twenty-One, Inc. (the "Company").

The Common Stock is included in The Nasdaq Stock Market's National Market (the
"Nasdaq National Market") under the symbol "EYES." On November 18, 1997, the
last reported sales price for the Common Stock on the Nasdaq National Market was
$10.75 per share. See "Price Range of Common Stock."

SEE "RISK FACTORS" ON PAGES 7 TO 17 FOR A DISCUSSION OF CERTAIN MATERIAL FACTORS
THAT SHOULD
BE CONSIDERED IN CONNECTION WITH AN INVESTMENT IN THE COMMON STOCK OFFERED
HEREBY.
- --------------------------------------------------------------------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.

<TABLE>
<CAPTION>
=======================================================================================================================
Underwriting
Price to Discounts and Proceeds to
Public Commissions(1) Company(2)
- -----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Per Share................................... $ $ $
- -----------------------------------------------------------------------------------------------------------------------
Total(3).................................... $ $ $
=======================================================================================================================
</TABLE>

(1) The Company has agreed to indemnify the several Underwriters against certain
liabilities, including liabilities under the Securities Act of 1933. See
"Underwriting."

(2) Before deducting expenses payable by the Company estimated to be $600,000.

(3) The Company has granted the several Underwriters a 30-day over-allotment
option to purchase up to 360,000 additional shares of Common Stock on the
same terms and conditions as set forth above. If all such additional shares
are purchased by the Underwriters, the total Price to Public will be
$ , the total Underwriting Discounts and Commissions will be
$ and the total Proceeds to Company will be $ . See
"Underwriting."

- --------------------------------------------------------------------------------

The shares of Common Stock are offered by the several Underwriters subject to
delivery by the Company and acceptance by the Underwriters, to prior sale and to
withdrawal, cancellation or modification of the offer without notice. Delivery
of the shares to the Underwriters is expected to be made at the office of
Prudential Securities Incorporated, One New York Plaza, New York, New York, on
or about , 1997.

PRUDENTIAL SECURITIES INCORPORATED WHEAT FIRST BUTCHER SINGER

, 1997
<PAGE> 3

[The inside front cover depicts a graphic of the Company's Local Area
Delivery System. The graphic sets forth the four elements contained within the
Local Area Delivery System. The four elements are labeled primary, secondary,
tertiary and surgical facilities on four separate boxes, one on top of the
other, and each box is successively smaller, forming the shape of a pyramid.
Within each box is a description of these elements within a Local Delivery
System. In addition, the inside front cover folds out to depict a map of the
United States with the states in which the Company operates highlighted in a
different color. The Local Area Development Systems are further divided by color
to reflect those that were existing prior to the Block Acquisition and those
added as a result of the Block Acquisition.]

CERTAIN PERSONS PARTICIPATING IN THE OFFERING MAY ENGAGE IN TRANSACTIONS
THAT STABILIZE, MAINTAIN OR OTHERWISE AFFECT THE PRICE OF THE COMMON STOCK,
INCLUDING PURCHASES OF THE COMMON STOCK TO STABILIZE ITS MARKET PRICE, PURCHASES
OF THE COMMON STOCK TO COVER SOME OR ALL OF A SHORT POSITION IN THE COMMON STOCK
MAINTAINED BY THE UNDERWRITERS AND THE IMPOSITION OF PENALTY BIDS. FOR A
DESCRIPTION OF THESE ACTIVITIES, SEE "UNDERWRITING."

IN CONNECTION WITH THIS OFFERING, CERTAIN UNDERWRITERS (AND SELLING GROUP
MEMBERS, IF ANY) MAY ENGAGE IN PASSIVE MARKET MAKING TRANSACTIONS IN THE COMMON
STOCK ON THE NASDAQ NATIONAL MARKET IN ACCORDANCE WITH RULE 103 OF REGULATION M
UNDER THE SECURITIES EXCHANGE ACT OF 1934. SEE "UNDERWRITING."
<PAGE> 4

PROSPECTUS SUMMARY

The following summary is qualified in its entirety by the more detailed
information and financial statements, including the notes thereto, appearing
elsewhere in this Prospectus and information under "Risk Factors." Unless the
context otherwise requires, references in this Prospectus to the Company or
Vision Twenty-One include Vision Twenty-One, Inc., its predecessors and its
subsidiaries and references to Block Vision include Block Vision, Inc., its
parent holding company, BBG-COA, Inc., and its subsidiaries. As used herein, the
term "Managed Providers" refers to the licensed optometrists and
ophthalmologists employed by professional associations and providing eye care
services at Company clinic facilities and ambulatory surgical centers ("ASCs");
"Managed Professional Associations" refers to the professional associations
which are managed by the Company pursuant to long-term management agreements
("Management Agreements"); "Contract Providers" refers to the licensed
optometrists and ophthalmologists who are credentialed, or in the process of
being credentialed, to provide eye care services at optometry and ophthalmology
clinics and ASCs pursuant to the Company's managed care contracts; and
"Affiliated Providers" refers collectively to the Managed Providers and the
Contract Providers. Except as otherwise indicated, the information contained in
this Prospectus (i) assumes that the Underwriters' over-allotment options will
not be exercised and (ii) gives retroactive effect to a reverse stock split
resulting in an exchange of 1 share for 1.5 shares of Common Stock issued and
outstanding. The Company's acquisition of Block Vision is, upon finalization of
certain matters, effective as of October 31, 1997. This preliminary Prospectus
is drafted to reflect that certain pending matters regarding the acquisition of
Block Vision have been completed. The term "1997 Acquisitions" shall be deemed
to include all acquisitions made by the Company in 1997 except for the
acquisition of Block Vision.

THE COMPANY

The Company provides a wide range of management and administrative services
to local area delivery systems ("LADS(SM)") established by the Company. LADS are
developed to provide for integrated networks of optometrists, ophthalmologists,
ASCs and retail optical centers which offer the full continuum of eye care
services in local markets. The Company began operations in 1984, providing
management services to seven optometrists practicing at eight clinic locations.
The Company currently provides its services to 39 LADS located in 26 states
through which 5,810 Affiliated Providers deliver eye care services. Of these
Affiliated Providers, 86 are Managed Providers, consisting of 50 optometrists
and 36 ophthalmologists practicing at 57 clinic locations and five ASCs, and
5,724 are Contract Providers, consisting of 4,993 optometrists and 731
ophthalmologists practicing at over 4,300 clinic locations and 35 ASCs. The
Company's Affiliated Providers, in conjunction with select national retail
optical chains operating over 300 retail optical centers, deliver eye care
services under the Company's 82 managed care contracts and 12 discount
fee-for-service plans covering approximately 4.0 million exclusively contracted
patient lives. Furthermore, the Company has established a nationwide eye care
provider network of over 6,700 additional Contract Providers thereby positioning
the Company to capture future managed care business in anticipated new local
markets.

Eye care services in the United States are delivered through a highly
fragmented system of local providers that industry sources estimate consisted of
approximately 47,000 practicing eye care professionals in 1996, including
approximately 29,500 optometrists and 17,500 ophthalmologists. According to
industry sources, expenditures for all eye care services in the United States
were approximately $31.2 billion in 1995. Industry sources estimate $19.6
billion of these expenditures was spent on primary care, including approximately
$13.8 billion for optical goods (frames, lenses and accessories) and $5.8
billion for primary eye care services (routine eye exams, contact lens fitting
and diagnosis/management of eye disease), while $11.6 billion was spent on
secondary and tertiary care, including $6.9 billion for ophthalmology services
(medical and surgical eye care) and $4.7 billion for facility services (services
provided by hospital facilities and ASCs). The Company believes several trends
are effecting the growth of the overall eye care industry as well as the
delivery of eye care services. First, as the "baby boom" generation ages, the
demand for eye care services at all levels is expected to increase to treat such
conditions as glaucoma, cataracts and other eye disorders that naturally occur
as part of the aging process. Second, technological advances and innovations in
such areas as refractive surgery utilizing the excimer laser to correct
nearsightedness are expected to contribute to increased spending on eye care
services. Third, the Company believes that patients are increasingly seeking
convenient and accessible
3
<PAGE> 5

primary eye care through retail centers where primary eye care services and
products are being bundled, thus making the retail optical center an important
access point for eye care delivery networks. Finally, as more people become
eligible to receive eye care benefits, the Company believes there will be
increased utilization of primary eye care services, which will in turn lead to
an increase in the demand for secondary and tertiary eye care services.

The Company's goal is to enable each of its LADS to capture the leading
market share of fee-for-service patients and managed care members. To achieve
its goal, the Company is focused on the following strategies: (i) developing
LADS in order to provide for a complete continuum of easily accessible, high
quality and affordable eye care services, (ii) increasing patient revenue and
cost efficiencies for each LADS through practice development and managed care
initiatives and (iii) expanding into select new markets to create regional
networks of LADS.

The Company earns practice management fees by providing Managed Providers
with a wide range of management and administrative services. These management
and administrative services are designed to increase patient flow, while
effecting cost efficiencies, and to permit the Managed Provider to concentrate
on the delivery of easily accessible, high quality and affordable eye care
services. The Company also earns revenues by entering into capitated managed
care contracts with third-party insurers and payors and by administering
indemnity fee-for-service plans for its Affiliated Providers. The Company
believes it provides its Affiliated Providers with significant advantages in
negotiating, obtaining and effectively administering managed care contracts
through its experienced management team, management information systems, greater
capital resources and more efficient cost structure.

RECENT DEVELOPMENTS

Block Acquisition. Effective October 31, 1997, the Company acquired all of
the issued and outstanding stock of Block Vision (the "Block Acquisition").
Block Vision provides administration services on behalf of managed vision care
plans for a nationwide network of 5,171 Contract Providers who provide eye care
services pursuant to 58 capitated and five discount fee-for-service managed care
contracts covering over 2.1 million exclusively contracted patient lives. The
Block Acquisition has enabled the Company to establish 28 new LADS for future
development. Furthermore, Block Vision has established a network of
approximately 4,500 additional credentialed Contract Providers, and another
1,400 Contract Providers in the process of being credentialed, to capture future
managed care business in anticipated new local markets. In addition, Block
Vision operates a buying group division which provides billing and collection
services to suppliers of optical products. See "The Acquisitions -- Block
Acquisition."

October Acquisitions. In October 1997, the Company closed in escrow one
acquisition, and entered into an agreement with respect to another acquisition
to acquire the business assets of two ophthalmology clinics, two optical
dispensaries, and one ASC located in Brandon, Florida and Minneapolis,
Minnesota. Business assets consist of certain non-medical and non-optometric
assets, including accounts receivable, leases, contracts, equipment and other
tangible and intangible assets. Concurrently with these acquisitions, the
Company entered into long-term Management Agreements with the related
professional associations employing three optometrists and five
ophthalmologists. Such acquisitions are referred to herein as the "October
Acquisitions." See "The Acquisitions -- 1997 Acquisitions."

Initial Public Offering. On August 18, 1997, the Company completed its
initial public offering of 2,100,000 shares of Common Stock at a price to the
public of $10.00 per share (the "Initial Public Offering"). The net proceeds of
the Initial Public Offering were used to repay substantially all of the
Company's
4
<PAGE> 6

outstanding indebtedness and to provide funding to continue acquisitions of
optometry and ophthalmology clinics and ASCs.

THE OFFERING

Common Stock Offered by the Company....... 2,400,000 shares

Common Stock to be Outstanding after the
Offering(1)............................... 11,607,449 shares

Use of Proceeds........................... To fund the cash portion of the
Block Acquisition. See "Use of
Proceeds."

Nasdaq National Market Symbol............. EYES
- ---------------

(1) Excludes (a) an aggregate of 1,600,000 shares of Common Stock reserved for
issuance under the Company's stock plans (the "Plans"), pursuant to which
options to purchase approximately 792,667 shares of Common Stock have been
granted as of November 18, 1997, (b) an aggregate of 1,026,666 shares of
Common Stock which are reserved for issuance in the event of the exercise of
warrants granted by the Company and (c) an aggregate of 438,596 shares of
Common Stock which are being held in escrow as contingent consideration in
several acquisitions. Includes an aggregate of 1,066,155 shares of Common
Stock which are being held in escrow in connection with certain
acquisitions. See "The Acquisitions," "Management -- Stock Option Plans,"
"Certain Transactions" and "Underwriting."

RISK FACTORS

Investors should consider the material risk factors involved in connection
with an investment in the Common Stock and the impact to investors from various
events which could adversely affect the Company's business. See "Risk Factors."
5
<PAGE> 7

SUMMARY FINANCIAL DATA

<TABLE>
<CAPTION>
YEARS ENDED DECEMBER 31, NINE MONTHS ENDED SEPTEMBER 30,
----------------------------------------- -------------------------------
PRO FORMA PRO FORMA
1994 1995 1996 1996(1) 1996 1997 1997(1)
------- ------- ------- ----------- ------- ------- -----------
(DOLLARS IN THOUSANDS EXCEPT PER SHARE DATA)
<S> <C> <C> <C> <C> <C> <C> <C>
STATEMENT OF OPERATIONS DATA:
Revenues....................... $ 1,192 $ 3,082 $ 9,564 $ 117,735 $ 6,026 $29,444 $ 94,707
Operating expenses............. 1,340 4,300 15,524 121,409 9,392 29,729 92,671
------- ------- ------- ----------- ------- ------- -----------
Income (loss) from
operations................... (148) (1,218) (5,960) (3,674) (3,366) (285) 2,036
Income (loss) before
extraordinary charge......... (153) (1,226) (6,120) (3,762) (3,432) (1,026) 88
Pro forma income (loss) before
extraordinary charge per
common share(2).............. $ (0.38) $ 0.02
Pro forma weighted average
number of common shares
outstanding(2)............... 9,853,678 9,853,678
</TABLE>

<TABLE>
<CAPTION>
SEPTEMBER 30, 1997
--------------------------------------------
PRO FORMA
ACTUAL PRO FORMA(3) AS ADJUSTED(4)
------- ------------ -----------------
(IN THOUSANDS)
<S> <C> <C> <C>
BALANCE SHEET DATA:
Working capital (deficit)................................. $ 1,582 $(26,852) $(3,135)
Total assets.............................................. 43,771 86,999 87,014
Long-term debt and capital lease obligations,
including current maturities............................ 580 3,732 9,430
Total stockholders' equity................................ 30,899 37,950 61,667
</TABLE>

- ---------------

(1) Gives effect to the following transactions as if they were completed on
January 1, 1996: (i) the 1996 Acquisitions, (ii) the 1997 Acquisitions,
(iii) the Block Acquisition and (iv) the Initial Public Offering and the
application of the net proceeds therefrom. See "The Acquisitions" and
"Selected Pro Forma Financial Data."

(2) Reflects the pro forma income (loss) before extraordinary charge per common
share assuming an increase in the weighted average number of outstanding
shares to the extent necessary to fund the cash portion of the Block
Acquisition. See Note 6 to the Company's Unaudited Pro Forma Consolidated
Financial Information for a description of the computation of pro forma
income (loss) before extraordinary charge per common share.

(3) Gives effect to the October Acquisitions and the Block Acquisition as if
they were completed as of September 30, 1997. See "The Acquisitions."
(4) Gives effect to the Offering and the application of the estimated net
proceeds therefrom. See "Selected Pro Forma Financial Data."
6
<PAGE> 8

RISK FACTORS

An investment in the shares of Common Stock offered hereby involves a high
degree of risk. Prospective investors should carefully consider the following
risk factors, in addition to the other information set forth in this Prospectus,
in connection with an investment in the Common Stock offered hereby.

This Prospectus contains statements which constitute "forward looking
statements" within the meaning of Section 27A of the Securities Act of 1933 and
Section 21E of the Securities Exchange Act of 1934. The words "expect,"
"believe," "goal," "plan," "intend," "estimate" and similar expressions and
variations thereof used in this Prospectus are intended to specifically identify
forward-looking statements. Those statements appear in a number of places in
this Prospectus and include statements regarding the intent, belief or current
expectations of the Company, its directors or its officers with respect to,
among other things: (i) the financial prospects of the Company; (ii) potential
acquisitions by the Company and the successful integration of both completed and
future acquisitions; (iii) the ability of the Company to efficiently and
effectively manage its Managed Providers; (iv) the use of the proceeds of the
Offering; (v) the Company's financing plans; (vi) trends affecting the Company's
financial condition or results of operations; (vii) the Company's growth
strategy and operating strategy; (viii) trends in the health care and managed
care industries; (ix) the impact of current and future governmental regulations;
(x) the declaration and payment of dividends; (xi) the Company's current and
future managed care contracts; (xii) the Company's ability to continue to
recruit Contract Providers, to convert Contract Providers to Managed Providers,
and to maintain its relationships with Affiliated Providers; (xiii) the
Company's relationship with BSM Consulting Group and Bruce Maller; (xiv) the
Company's relationships with affiliated retail optical companies; (xv) the
Company's relationships with its buying group participants and suppliers of eye
care products and supplies; and (xvi) the Company's ability to operate
efficiently, profitably and effectively its new Block Vision subsidiary, which
includes a new business line and a significant increase in the Company's managed
care business. Prospective investors are cautioned that any such forward looking
statements are not guarantees of future performance and involve risks and
uncertainties, and that actual results may differ materially from those
projected in the forward looking statements as a result of various factors. The
accompanying information contained in this Prospectus, including without
limitation the information set forth under the headings "Risk Factors,"
"Management's Discussion and Analysis of Financial Condition and Results of
Operations," and "Business," identifies important factors that could cause such
differences. The Company undertakes no obligation to publicly update or revise
forward looking statements made in this Prospectus to reflect events or
circumstances after the date of this Prospectus or to reflect the occurrence of
unanticipated events.

HISTORY OF LOSSES. Although the Company has experienced substantial
revenue growth, the Company incurred operating and net losses in the years ended
December 31, 1994, 1995 and 1996 and in the nine months ended September 30,
1997. As of September 30, 1997, the Company had an accumulated deficit of $8.9
million. In addition, as of July 31, 1997, Block Vision had an accumulated
deficit of $584,000 due primarily to operating and net losses accumulated prior
to fiscal year ended April 30, 1996. The Company operated at a break-even level
for the third quarter of 1997 while Block Vision was marginally profitable for
the quarter ended July 31, 1997. There can be no assurance that the Company will
not incur further operating and net losses or achieve profitability in the near
future.

INTEGRATION AND OPERATION OF BLOCK ACQUISITION. The Block Acquisition is
the Company's largest acquisition to date. As a result of the Block Acquisition,
the Company has extended its business to 20 new states and the District of
Columbia, has significantly increased the managed care portion of its business
and has added a new line of business through Block Vision's buying group
division. The Company's results of operations will significantly depend on the
Company's successful integration and future operation of the businesses acquired
in the Block Acquisition. There can be no assurance that the Company will be
able to successfully integrate and operate Block Vision and a failure by the
Company to do so would have a material adverse effect on the Company's business
and profitability.

RISKS ASSOCIATED WITH EXPANSION STRATEGY. A significant portion of the
Company's expansion strategy is to grow its Managed Provider network through the
acquisition of certain assets of ophthalmology and

7
<PAGE> 9

optometry practices, ASCs and related businesses. The success of the Company's
expansion strategy will depend on factors which include the following:

Ability to Identify and Consummate Suitable Acquisitions. The Company
intends to devote substantial resources to identifying, negotiating and
consummating appropriate acquisitions. The Company may compete for
acquisition opportunities with entities that have greater resources than
the Company. There can be no assurance that suitable acquisition candidates
are available or can be identified or that acquisitions can be consummated
on terms favorable to the Company. Additionally, several acquisitions by
the Company have been closed in escrow and another acquisition which has
been agreed to but not completed, all of which have been included in the
pro forma calculations contained herein. Any failure by the Company
ultimately to close a material portion of such acquisitions and where
applicable, to obtain a release from escrow could have a material adverse
effect on the Company's pro forma financial statements contained herein and
on the Company's future results of operations and financial condition. See
"The Acquisitions."

Integration of Acquisitions. The Company has made significant
acquisitions in the past year. In the past twelve months, the size of its
Contract Provider network, the number and size of its managed care
contracts and related covered lives and the number of clinics and ASCs
managed by the Company have increased significantly. The Company's revenue
has increased from $9.6 million for the year ended December 31, 1996 to
$117.7 million on a pro forma basis. The Company's financial results in
fiscal quarters immediately following a material acquisition or series of
acquisitions may be adversely impacted while the Company attempts to
integrate the acquisition or acquisitions. There can be no assurance that
there will not be substantial unanticipated costs or problems associated
with the integration effort. During the first few months after an
acquisition, the Company's expenses related to an acquisition may exceed
the revenue it realizes from the acquisition and, accordingly, any such
acquisition may have a negative effect on the Company's short-term
operating results. As the Company pursues its expansion strategy, there can
be no assurance that the Company will be able to continue to successfully
integrate acquisitions and any failure or inability to do so may have a
material adverse effect on the Company's results of operations or financial
condition. In addition, acquisitions require the Company to attract and
retain competent and experienced management personnel and require the
integration of reporting and tracking systems, management information
systems and other operating systems. At present, the Company's recent
acquisitions have not been fully integrated into its management information
systems and there can be no assurance that the Company will be able to
successfully integrate its management information systems in the near
future. There can also be no assurance that the Company will be able to
attract suitable management or other personnel or effectively expand its
operating systems. The success of the Company's expansion strategy will
depend on the Company's ability to effectively manage an increasing number
of new acquisitions while continuing to manage its existing business.

Availability of Funds for Expansion Strategy. The Company's expansion
strategy will require that substantial capital investment and adequate
financing be available to the Company. Capital is needed not only for
acquisitions, but also for the integration of operations and the addition
of equipment and technology. The Company currently believes that the net
proceeds from this Offering, cash flow from operations, its bridge credit
facility, anticipated future bank credit facility borrowings seller
financing and the issuance of Common Stock in acquisitions, will be
adequate to meet the Company's anticipated capital needs for the next
twelve months. Should the Company be unable to obtain these anticipated
credit facility borrowings, the Company may be required to obtain financing
through other borrowings or the issuance of additional equity or debt
securities, which could have an adverse effect on the value of the shares
of Common Stock of the Company. There can be no assurance that the Company
will be able to obtain such financing or that, if available, such financing
will be on terms acceptable to the Company. An inability of the Company to
obtain the anticipated bank credit facility and suitable additional future
financings could cause the Company to substantially change its expansion
strategy, which could have a material adverse effect on the Company.

Managed Care Contract Expansion. The success of the Company's
expansion strategy also will be dependent on its ability to maintain and
expand its managed care contract relationships with HMOs and other third
party payors. The ability of the Company to maintain and expand its
Contract Provider network and retail affiliations will be important in
expanding these contractual relationships with both existing and new
payors. Correspondingly, expanding managed care contract relationships will
be

8
<PAGE> 10

important in maintaining and expanding its Contract Provider network and
retail affiliations. Additionally, the ability to effect acquisitions that
add to the Company's Managed Provider network will be dependent upon the
Company's ability to expand its managed care contract relationships.

Risks Associated with Merger Transactions. Several of the Company's
acquisitions have been accomplished by way of merger. As a result of such
merger transactions, there could be potential liabilities to which the
Company could be subject. The agreements entered into in connection with
the acquisitions provide for the Company to be fully indemnified against
any losses incurred by the Company as a result of certain material
liabilities. However, while the Company is not aware of any such
liabilities, there can be no assurance that the Company will not incur
losses in the event that the indemnifications are inadequate to reimburse
the Company for any such losses.

Information Systems. The Company is currently in the process of
modifying its information systems to be year 2000 compliant. The Company
expects its information systems to be year 2000 compliant within a
sufficient amount of time to meet its needs. The Block Vision managed care
information systems are currently year 2000 compliant and Block Vision is
in the process of modifying its remaining information systems to be year
2000 compliant.

RELIANCE ON AFFILIATED PROVIDERS. The Company's revenue depends on revenue
generated by the Affiliated Providers. There can be no assurance that the
practices managed by the Company will continue to maintain successful practices,
that the Management Agreements between the Company and such professional
associations will not be terminated or that the Managed Providers will continue
to be employed by the professional associations. Under the Management
Agreements, the Company has agreed with the professional associations that,
subject to certain exceptions, it will not provide management services for any
practice located within five miles of such professional associations without
first obtaining the express written consent of the professional associations.
The Company's ability to expand the managed care business will be dependent upon
the Company's ability to recruit and maintain an expanded Contract Provider
network as well as to market such network successfully to payors. The inability
to effectively expand the network and contractual relationships with payors
would have a material adverse effect on the Company's growth strategy.
Additionally, the practice management fees earned by the Company pursuant to
substantially all of its Management Agreements will fluctuate depending on
variances in revenues and expenses of the Managed Professional Association and
thus the Company's revenue and profitability in connection with its Management
Agreements will be directly and adversely affected by poor operating results of
its Managed Professional Associations.

RISKS ASSOCIATED WITH MANAGED CARE CONTRACTS AND CAPITATED FEE
ARRANGEMENTS. As a result of the Block Acquisition, the Company's managed care
business will increase significantly, with managed care revenues increasing from
$10.8 million for 1996 to $23.1 million for 1996 on a pro forma basis.
Additionally, as an increasing percentage of the population is covered by
managed care organizations, the Company believes that its success will be, in
part, dependent upon its ability to negotiate managed care contracts with HMOs,
health insurance companies and other third party payors pursuant to which
services will be provided on a risk-sharing or capitated basis. Additionally,
substantially all of the Company's managed care business is pursuant to
approximately 14 contracts and the loss of any one of those could have an
adverse effect on the Company's results of operations. Most of the Company's
managed care contracts are for one year terms which automatically renew and the
contracts are terminable by either party on sixty days notice. Under some of
these contracts, the health care provider may accept a pre-determined amount per
month per patient in exchange for providing all necessary covered services to
the patients covered under the agreement. These contracts pass much of the risk
of providing care from the payor to the provider. The proliferation of these
contracts in markets served by the Company could result in greater
predictability of revenue, but less certainty with respect to profitability.
There can be no assurance, however, that the Company will be able to negotiate
satisfactory arrangements on a risk-sharing or capitated basis. In addition, to
the extent that patients or enrollees covered by these contracts require, in the
aggregate, more frequent or extensive care than is anticipated, operating
margins may be reduced or the revenue derived from these contracts may be
insufficient to cover the costs of the services provided. Any such developments
could have a material adverse effect on the Company's results of operations or
financial condition. In connection with the Block Acquisition, the Company has
applied for approval by the Texas Insurance Commission regarding the change in
control of ownership of a Block Vision subsidiary in connection with licensing
requirements for Block Vision's managed care business in the State of Texas. In
the event such approval is not received the Company's ability to conduct future
managed care business in Texas could be adversely affected.

RISKS ASSOCIATED WITH BLOCK VISION'S BUYING GROUP. As a result of the
Block Acquisition, the Company provides billing and collection services to
suppliers of optical products benefiting suppliers and

9
<PAGE> 11

buyers of eye care products. Block Vision had revenues of $54.8 million from its
buying group division for the year ended December 31, 1996. The Company's
business arrangements are terminable at any time by Block Vision or its
customers. Any loss of a significant number of customers in connection with this
business could have a material adverse effect on the results of operations of
the Company. In connection with its buying group services, Block Vision bears
substantial credit risk, which if not managed successfully could have a material
adverse effect on the Company, its cash flows and results of operations. In
addition, the operations of the buying group may be subject to certain federal
laws, including anti-kickback laws. A determination that the buying group
operations are in violation of such laws could have a material adverse effect on
the results of operations of the buying group division. See
"Business -- Governmental Regulations -- Health Care Regulations."

GOVERNMENT REGULATIONS. Business arrangements between business
associations that provide practice management services and ophthalmologists and
optometrists are regulated extensively at the state and federal levels,
including regulation in the following areas:

Corporate Practice of Optometry and Ophthalmology. The laws of many
states prohibit corporations that are not owned entirely by eye care
professionals from employing eye care professionals, having control over
clinical decision-making, or engaging in other activities that are deemed
to constitute the practice of optometry and ophthalmology. The Company
contracts with professional associations (which are owned by one or more
licensed optometrists or ophthalmologists), which in turn employ or
contract with licensed optometrists or ophthalmologists to provide
professional services. The Company performs only non-professional services,
is not representing to the public or its customers that it provides
professional eye care services, and is not exercising influence or control
over the practices of the eye care practitioners employed by the
professional associations. Furthermore, the Management Agreements between
the Company and the Managed Professional Associations specifically provide
that all decisions required by law to be made by professionals shall be
made by such professionals. While certain shareholders of Managed
Professional Associations that perform the practice of medicine or
optometry are also involved in Company management, they act independently
when making decisions on behalf of their professional corporations and the
Company has no right (and does not attempt to exercise any right) to
control those decisions.

Fee-Splitting and Anti-kickback Laws.

State Law. Most states have laws prohibiting paying or receiving
any remuneration, direct or indirect, that is intended to induce
referrals for health care products or services. Many states also
prohibit "fee-splitting" by eye care professionals with any party except
other eye care professionals in the same professional corporation or
practice association. In most cases, these laws apply to the paying of a
fee to another person for referring a patient or otherwise generating
business, and do not prohibit payment of reasonable compensation for
facilities and services (other than the generation of business), even if
the payment is based on a percentage of the practice's revenues.

10
<PAGE> 12

could be determined to be in violation of the fee-splitting statute.
Since the same statute applies to optometrists, a risk would also exist
as to the Company's arrangements with them. The Company's management
arrangements provide that if they are determined in the future to
violate any law, the parties agree to use their best efforts to modify
the arrangement to approximate as closely as possible, consistent with
law, the economic position of the parties prior to the modification and,
if they are unable to reach agreement on a new arrangement, to submit
the matter to arbitration for the purpose of reaching an equitable
alternative arrangement. In the event the form of Management Agreement
utilized by the Company in Florida is ever determined to be in violation
of state law, and the parties or the arbitrator are unable to arrive at
a satisfactory modification to the Management Agreement, there could be
a material adverse impact on the Company's current Florida Management
Agreements and therefore, the Company's results of operations. On a pro
forma basis for 1996 the revenues under the Florida Management
Agreements represented approximately 5.0% of the Company's total
revenue.

An Arizona law prohibits "dividing a professional fee" only if it
is done "for patient referrals," similar to the language of the Florida
law. Other states, such as Illinois and New York, have fee-splitting
statutes that have been interpreted to prohibit any compensation
arrangements that are based on a percentage of a physician's revenue,
and such laws shall preclude the Company from using its typical
management arrangements at such time as Managed Provider relationships
are created in those states.

Federal Law. Federal law prohibits the offer, payment,
solicitation or receipt of any form of remuneration in return for the
referral of patients covered by federally funded health care programs
such as Medicare and Medicaid, or in return for purchasing, leasing,
ordering or arranging for the purchase, lease or order of any product or
service that is covered by a federal program. For this reason, the
Management Agreement provides that the Company will not engage in direct
marketing to potential sources of business, but will only assist the
practice's personnel in these endeavors by providing training, marketing
materials and technical assistance.

Advertising Restrictions. Many states prohibit eye care
professionals from using advertising which includes any name other than
their own, or from advertising in any manner that is likely to lead a
person to believe that a non eye care professional is engaged in the
delivery of eye care services. The Management Agreement provides that
all advertising shall conform to these requirements.

In addition, the Company's managed care arrangements with health care
service payors on the one hand, and its network of Affiliated Providers on the
other, are subject to federal and state regulations, including the following:

Insurance Licensure. Most states impose strict licensure requirements
on health insurance companies, HMOs, and other companies that engage in the
business of insurance. In most states, these laws do not apply to
discounted fee-for-service arrangements or networks that are paid on a
"capitated" basis, i.e. based on the number of covered persons the network
is required to serve without regard to the cost of service actually
rendered, unless the association with which the network provider is
contracting is not a licensed health insurer or HMO. There are exceptions
to these rules in some states. For example, certain states require a
license for a capitated arrangement with any party unless the risk-bearing
association is a professional corporation that employs the eye care
professionals. In the event that the Company is required to become licensed
under these laws, the licensure process can be lengthy and time consuming
and, unless the regulatory authority permits the Company to continue to
operate while the licensure process is progressing, the Company could
experience a material adverse change in its business while the licensure
process is pending. In addition, many of the licensing requirements mandate
strict financial and other requirements which the Company may not
immediately be able to meet. Once licensed, the Company would be subject to
continuing oversight by and reporting to the respective regulatory agency.

11
<PAGE> 13

even if its arrangements are with individual subscribers or self-insured
employers. Additionally, some states require licensing for certain
companies providing various administrative services in connection with
managed care business. The Company intends to seek such licenses in those
states where it is available for eye care networks. However, the Company
may not be able to meet such requirements in all cases and should this
result in the future in the loss of any material business (individually or
in the aggregate) it could have a material adverse effect on the Company's
business and operating results.

Physician Incentive Plans. Medicare regulations impose certain
disclosure requirements on managed care networks that compensate providers
in a manner that is related to the volume of services provided to Medicare
patients (other than services personally provided by the provider). If such
incentive payments exceed 25 percent of the provider's potential payments,
the network is also required to show that the providers have certain "stop
loss" financial projections and to conduct certain Medicare enrollee
surveys.

"Any Willing Provider" Laws. Some states have adopted, and others are
considering, legislation that requires managed care networks to include any
provider who is willing to abide by the terms of the network's contracts
and/or prohibit termination of providers without cause. Such laws would
limit the ability of the Company to develop effective managed care networks
in such states.

The Company and its affiliated professional associations are subject to a
range of antitrust laws that prohibit anti-competitive conduct, including price
fixing, concerted refusals to deal and divisions of markets. Among other things,
these laws limit the ability of the Company to enter into Management Agreements
with separate practice groups that compete with one another in the same
geographic market. This does not apply to professionals within the same practice
group. In addition, these laws prevent acquisitions of business assets that
would be integrated into existing professional associations if such acquisitions
substantially lessen competition or tend to create a monopoly.

The several laws described above have civil and criminal penalties and have
been subject to limited judicial and regulatory interpretation. They are
enforced by regulatory agencies that are vested with broad discretion in
interpreting their meaning. The Company's agreements and activities have not
been examined by federal or state authorities under these laws and regulations.
For these reasons, there can be no assurance that review of the Company's
business arrangements will not result in determinations that adversely affect
the Company's operations or that certain agreements between the Company and eye
care providers or third-party payors will not be held invalid and unenforceable.
In addition, these laws and their interpretation vary from state to state. The
regulatory framework of certain jurisdictions may limit the Company's expansion
into, or ability to continue operations within, such jurisdictions if the
Company is unable to modify its operational structure to conform with such
regulatory framework. Any limitation on the Company's ability to expand could
have an adverse effect on the Company. See "Business -- Government Regulations."

COST CONTAINMENT AND REIMBURSEMENT TRENDS. A significant portion of the
revenues received by the Affiliated Providers are derived from government
sponsored health care programs and private third-party payors. The health care
industry has experienced a trend toward cost containment as government and
private third- party payors seek to impose lower reimbursement and utilization
rates and negotiate reduced payment schedules with service providers. The
Company believes that these trends may result in a reduction from historical
levels in per patient revenue received by the professional associations. Recent
changes in Medicare payment rates will reduce payments to optometrists and
ophthalmologists. Medicare payments to physicians and other practitioners are
based on the "relative value units" ("RVUs") assigned to the service in
question. These RVUs were adjusted effective January 1, 1997 in a manner that
generally assigns a relatively lower value to services performed by optometrists
and ophthalmologists. As a result of these changes, the projected Medicare
payments to optometrists and ophthalmologists will be reduced by less than five
percent. Private insurance payments could also be affected to the extent that
the payment methodologies used by insurance companies are based on the Medicare
RVUs. Further reductions in payments to professionals or other changes in
reimbursement for health care services could have an adverse effect on the
Company's results of operations. There can be no assurance that any potential
reduced revenues and operating margins from such trends could

12
<PAGE> 14

be offset through cost reductions, increased volume, introduction of new
procedures or otherwise. See "Business -- Governmental Regulations."

RISKS ARISING FROM HEALTH CARE REFORM. There can be no assurance that the
laws and regulations of the states in which the Company operates will not change
or be interpreted in the future either to restrict or adversely affect the
Company's relationships with its Affiliated Providers or the operation of the
professional associations with which it contracts. Federal and state governments
are currently considering various types of health care initiatives and
comprehensive revisions to the health care and health insurance systems. Some of
the proposals under consideration, or others that may be introduced, could, if
adopted, have a material adverse effect on the Company's financial condition and
results of operations. It is uncertain what legislative programs, if any, will
be adopted in the future, or what actions Congress or state legislatures may
take regarding health care reform proposals or legislation. In addition, changes
in the health care industry, such as the growth of managed care organizations
and provider networks, may result in lower payments for the services of the
Affiliated Providers, which could have a material adverse effect on the Company.
On August 5, 1997, the President signed into law a number of Medicare provisions
as part of the Balanced Budget Act of 1997. When compared to projected Medicare
spending levels under current law, the legislation would reduce Medicare
spending by $115 billion over five years. The vast majority of these savings
would come from reductions in payments for services of health care facilities,
practitioners and other providers. The legislation will eliminate disparities in
payment rates for similar services by physicians in different specialties
effective January 1, 1998. Payment rates for physician services will no longer
necessarily be updated for inflation. Beginning in 1998, inflation increases
will be adjusted based on a "sustainable growth rate" defined with reference to
the change in (i) the number of Medicare beneficiaries, (ii) the gross domestic
product per capita, and (iii) the level of expenditures for physician services.
The legislation will also revise Medicare payments for practice expense costs.
See "Business -- Government Regulations." The legislation will also, among other
things, change payments to managed care plans from the current rate of 95% of
fee-for-service rates in the area to a system based on nationwide average per
capita fee-for-service spending, with an adjustment factor for local area wage
rates. This will result in curbing future increases in high payment urban areas
while increasing payments in rural areas. The legislation will also reduce the
annual inflation adjustment for ASC fees by two percentage points. It is
impossible to determine precisely how these changes will affect payments for
services of ophthalmologists, optometrists and ASC facilities. Any reductions in
payment for these services could have an adverse effect on the Company's results
of operations and financial condition. See "Business -- Governmental
Regulations."

NON-COMPETITION COVENANTS. The Management Agreements require each
professional association to use its best efforts to enter into employment
agreements with each Managed Provider that include covenants not to compete with
the professional association for periods ranging from one to two years after
termination of employment, and which require the professional association's
shareholders to pay certain specified amounts to the Company if such shareholder
professionals violate their respective covenants not to compete. Laws affecting
the enforceability of such covenants vary significantly from state to state. In
most states, a covenant not to compete will be enforced only to the extent it is
necessary to protect a legitimate business interest of the party seeking
enforcement, does not unreasonably restrain the party against whom enforcement
is sought, and is not contrary to the public interest. This determination is
made based on all the facts and circumstances of the specific case at the time
enforcement is sought. For this reason, one cannot predict with certainty
whether a court will enforce such a covenant in a given situation. In addition,
it is unclear whether a management company's interest under a management
agreement will be viewed by the courts as the type of protectable business
interest that would permit the management company to enforce such a covenant or
to require the managed professional association to enforce such a covenant
against the employed professional. Furthermore, liquidated damages provisions
will not be enforced unless the court determines that the amount is a reasonable
estimate of actual damages that would be difficult to ascertain in a precise
manner. Since the intangible value of the Management Agreement depends primarily
on the ability of the professional association to preserve its business, which
could be harmed if employed professionals went into competition with the
professional association, a determination that these provisions will not be
enforced could have a material adverse effect on the Company. See
"Business -- Management Agreements." Additionally, the Company is not permitted
under certain circumstances to expand its Affiliated or Managed Provider network
within a certain

13
<PAGE> 15

geographical area surrounding a Managed Provider without prior consent of the
Managed Provider. Such covenants could serve to limit market penetration
opportunities within a LADS and thus have an adverse effect on the Company's
ability to expand within a LADS.

RISKS ASSOCIATED WITH BSM RELATIONSHIP. The Company has exclusive
consulting agreements with leading ophthalmology practice consultants BSM
Consulting Group ("BSM") and Bruce S. Maller. The agreements are for a term of
five years and may be terminated by a party only for "cause" in the event of a
material breach which remains uncured for 30 days or the occurrence of certain
events related to bankruptcy. Mr. Maller is the chief executive officer of BSM
and a director of the Company. BSM and Mr. Maller assist the Company in
identifying and evaluating suitable ophthalmology practices for acquisition,
integrating the acquired practices and providing strategic planning designed to
enhance the growth and development of the Affiliated Providers. A large part of
the success of the Company in implementing its growth strategy will depend on
the ability of such consultants to identify and evaluate suitable ophthalmology
practices and to assist Managed Providers in growing their practices, and there
can be no assurance that the consultants will be able to provide such services
successfully. Furthermore, in the event that such consultants are no longer able
to provide such services for any reason, there can be no assurance that the
Company will be able to retain other consultants with similar expertise or
undertake these tasks internally. Therefore, the loss of the services of either
BSM or Maller could have a material adverse effect on the Company. See "Certain
Transactions."

RISKS RELATED TO AMORTIZATION OF INTANGIBLE VALUE IN MANAGEMENT
AGREEMENTS. The Company's pro forma combined total assets reflect substantial
intangible assets in the form of Management Agreements with Managed Providers.
At September 30, 1997, on a pro forma basis, intangible assets represent
approximately 75.9% of total assets and approximately 173.8% of total
stockholders' equity. The intangible asset value represents the excess of cost
over the fair value of the separate net assets acquired in connection with
rights received by the Company under its acquired Management Agreements and
goodwill. There can be no assurance that the value of such assets will ever be
realized by the Company. These intangible assets are expected to be amortized on
a straight-line method over an average life of 25 years. The Company evaluates
on a regular basis whether events and circumstances have occurred that indicate
that all or a portion of the carrying amount of the asset may no longer be
recoverable, in which case an additional charge to earnings would become
necessary. Any determination requiring the write-off of a significant portion of
unamortized intangible assets would adversely affect the Company's results of
operations. See "Selected Pro Forma Financial Data."

RELATIONSHIP WITH RETAIL OPTICAL COMPANIES. An important factor in the
Company's business and growth strategy is its strategic affiliations with retail
optical companies in the Company's markets. The Company currently has
contractual arrangements with ECCA Managed Vision Care, Inc. ("ECCA") and For
Eyes Managed Care, Inc. ("For Eyes"), subsidiaries of retail optical chains,
which are terminable by either party under certain circumstances, and there can
be no assurance that the Company will be able to maintain these arrangements.
The Company expects to gain benefits from strategic affiliations with optical
retailers through increasing patient flow into a LADS, increasing opportunities
to obtain managed care contracts and providing an opportunity to add affiliated
optometrists practicing within retail optical locations. However, under
applicable regulations these retailers may not be required to refer patients to
the Affiliated Providers and there can be no assurance that the Company's
arrangements with retail optical companies will result in the intended benefits
to the Company. Additionally, in those markets where more than one affiliated
optical retailer operates and competes with others, the Company may have to
choose among such optical retailers. There can be no assurance that the Company
will be able to successfully establish strategic affiliations in any particular
market or that any such affiliations will be successful. The inability of the
Company to maintain and develop its strategic affiliations could have a material
adverse effect on the Company's business, results of operations and financial
condition.

COMPETITION. The health care industry is highly competitive and subject to
continual changes in the methods by which services are provided and the manner
in which health care providers are selected and compensated. The Company
believes that private and public reforms in the health care industry emphasizing
cost containment and accountability will result in an increasing shift of eye
care from highly fragmented, individual or small practice providers to larger
group practices, affiliated practice groups or other eye care

14
<PAGE> 16

delivery systems. The Company competes with other physician practice management
companies which seek to acquire the allowable business assets of and provide
management services to eye care professionals, some of which have substantially
greater financial resources than the Company. Companies in other health care
industry segments, such as managers of other hospital-based specialties or
currently expanding large group practices, some of which have financial and
other resources greater than those of the Company, may become competitors in
providing management to providers of eye care services. Increased competition
could have a material adverse effect on the Company's financial condition and
results of operations. The basis for competition in the practice management area
is service, pricing, strength of the delivery network, strength of operational
systems, the degree of cost efficiencies and synergies, marketing strength,
management information systems, managed care expertise, patient access and
quality assessment programs. The Company also competes with other providers of
eye care services, including HMOs, PPOs and private insurers, for managed care
contracts, many of which have larger provider networks and greater financial and
other resources than the Company. Managed care organizations compete on the
basis of administrative strength, size, quality and geographic coverage of their
provider networks, marketing abilities, informational systems, the strategy of
their managed care contracts, operating efficiencies and price. The Company also
competes with other buying group organizations for group members. Buying group
organizations compete on the basis of size and purchasing power of its member
buying group, the strength of its credit, and the strength of its supplier
agreements and relationships. See "Business -- Competition."

RISKS ASSOCIATED WITH EYE CARE SERVICES. The Company's business entails an
inherent risk of claims of liability. The optometrists, ophthalmologists and
ASCs which the Company contracts with are involved in the delivery of health
care services to the public and, therefore, are exposed to the risk of
professional liability claims. As a result of the Company providing management
services pursuant to its Management Agreements, the Company may also be named as
a co-defendant in professional liability lawsuits against its Affiliated
Providers from time to time. The Company does not control the practice of
optometry or ophthalmology by the Affiliated Providers or the compliance with
regulatory and other requirements directly applicable to the Affiliated
Providers and their practices. Claims of this nature, if successful, could
result in substantial damage awards to the claimants that may exceed the limits
of any applicable insurance coverage. Insurance against losses related to claims
of this type can be expensive and varies widely from state to state. The Company
is indemnified under the Management Agreements for claims against the
professional associations with which it contracts and maintains liability
insurance for itself. Successful malpractice claims asserted against the
professional associations, however, could have an adverse effect on the
Company's profitability. The Company maintains an umbrella insurance policy
which includes professional liability and general liability insurance on a
claims made basis in the amounts of $5.0 million per incident, and $5.0 million
in the aggregate per year. While the Company believes it maintains reasonable
levels of liability insurance coverage, there can be no assurance that a pending
or future claim or claims will not be successful or, if successful, will not
exceed the limits of available insurance coverage or that such coverage will
continue to be available at acceptable costs and on favorable terms. See
"Business -- Management Agreements."

DEPENDENCE ON KEY INDIVIDUALS. The success of the Company is dependent
upon the continued services of the Company's senior management. The loss of the
services of one or more of these individuals, including the Company's Chairman,
President and Chief Executive Officer, Theodore N. Gillette, O.D. could have a
material adverse effect on the Company. The Company and Dr. Gillette are parties
to an employment agreement which expires on September 30, 2001 and is renewable
for subsequent one year terms. See "Management -- Employment Agreements." There
can be no assurance that Dr. Gillette will remain employed by the Company during
such period or that his employment agreement will be renewed. The Company
believes that its future success will also depend in part upon its ability to
attract and retain qualified management personnel. Competition for such
personnel is intense and the Company competes for qualified personnel with
numerous other employers, some of whom have greater financial and other
resources than the Company. There can be no assurance that the Company will be
successful in attracting and retaining such personnel. See "Management."

CONTROL BY CURRENT STOCKHOLDERS AND MANAGEMENT. Upon completion of the
Offering, the Company's current officers and directors will own approximately
33.8% of the outstanding shares of Common Stock.

15
<PAGE> 17

Accordingly, these individuals, as a group, will have the ability to
significantly influence and may be able to control all matters requiring
stockholder approval, including the election of the Company's directors and any
amendments to the Company's Articles of Incorporation and Bylaws, and to control
the business of the Company. Such control could preclude any acquisition of the
Company and could adversely affect the market price of the Common Stock. See
"Principal and Selling Stockholders" and "Description of Capital Stock."

SHARES ELIGIBLE FOR FUTURE SALE. Upon completion of the Offering, the
Company will have 11,607,449 shares of Common Stock outstanding of which the
2,400,000 shares sold in the Offering (2,760,000 shares if the Underwriters'
over-allotment option is exercised in full) and the 2,100,000 shares sold in the
Initial Public Offering will be freely tradeable without restriction or the
requirement of future registration under the Securities Act of 1933 (the
"Securities Act"). All of the remaining 7,107,449 shares are Restricted
Securities ("Restricted Securities") as that term is defined by Rule 144
promulgated under the Securities Act and are subject to certain restrictions
described below. Holders of 2,834,683 of the Restricted Shares will be eligible
to sell a portion of such shares pursuant to Rule 144 under the Securities Act
subject to manner of sale, volume, notice and information requirements of Rule
144 but are subject to certain lock-up agreements described below. Holders of
the 4,272,766 remaining Restricted Shares will be eligible to sell a portion of
such shares pursuant to Rule 144 at differing dates in and after December 1997.
These shares are subject to certain lock-up agreements described below and also
subject to registration rights agreements requiring the Company to register such
shares under certain circumstances. See "Description of Capital
Stock -- Registration Rights" and "Shares Eligible for Future Sale." The Company
has reserved 1,600,000 shares of Common Stock under the Plans for issuance
pursuant to stock options granted by the Company, of which options to purchase
792,667 shares have been granted. See "Management -- Stock Option Plans." In
addition, 1,026,666 shares of Common Stock are reserved for issuance in the
event of the exercise of warrants granted by the Company. See "Description of
Capital Stock -- Warrants." The warrant shares are subject to registration
rights agreements requiring the Company to register such shares under certain
circumstances and otherwise will be eligible for resale subject to all of the
limitations on resale imposed by Rule 144. See "Description of Capital Stock --
Registration Rights."

The Company and certain of its executive officers and directors have
executed agreements pursuant to which each has agreed not to, directly or
indirectly, offer, sell, offer to sell, contract to sell, pledge, grant any
option to purchase or otherwise sell or dispose (or announce any offer, sale,
offer of sale, contract of sale, pledge, grant of any option to purchase or
other sale or disposition) of any shares of Common Stock or other capital stock
of the Company or any securities convertible into, or exercisable or
exchangeable for, any shares of Common Stock or other capital stock of the
Company, for a period of 180 days after the date of this Prospectus, without the
prior written consent of Prudential Securities Incorporated, on behalf of the
Underwriters, except for bona fide gifts or transfers affected by such
stockholders other than on any securities exchange or in the over-the-counter
market to donees or transferees that agree to be bound by similar agreements
(the "Lock-up Agreements"). In addition, certain non-affiliates of the Company
had entered into contractual 180 day Lock-up Agreements from the date of the
Initial Public Offering similar to the above Lock-up Agreements which prohibit
the direct or indirect disposition of shares until the expiration of such
Lock-up Agreements without the prior written consent of Prudential Securities
Incorporated. Such non-affiliates have also contractually agreed that they will
be subject to the same restrictions as affiliates of the Company under Rule 144.
Prudential Securities Incorporated may, in its sole discretion, at any time and
without notice, release all or any portion of the shares of Common Stock subject
to such agreements.

The Company has filed a Form S-8 registration statement under the
Securities Act to register all shares of Common Stock subject to then
outstanding stock options and Common Stock issuable pursuant to the Incentive
Plan. Shares covered by this registration statement are eligible for sale in the
public markets, subject to the Lock-up Agreements relating to shares held by
executive officers. See "Management" and "Shares Eligible for Future Sale."

The Company is unable to predict the effect, if any, that future sales of
shares, or the availability of shares for future sale, will have on the market
price of the Common Stock prevailing from time to time. Sales of substantial
amounts of Common Stock in the public market, or the availability of such shares
for future sale, could adversely affect the market price of the Common Stock and
could impair the Company's future ability

16
<PAGE> 18

to raise additional capital through an offering of its equity securities. See
"Shares Eligible for Future Sale" and "Underwriting."

Following the Offering, the Company may issue its Common Stock from time to
time in connection with the acquisition of stock or assets of other companies.
Such securities may be issued in transactions exempt from registration under the
Securities Act. The Company currently expects for the foreseeable future to
continue to require contractual lock-up agreements and to provide registration
rights consistent with previous transactions for sellers receiving stock in
acquisitions.

CERTAIN ANTI-TAKEOVER PROVISIONS. Certain provisions in the Company's
Articles of Incorporation and Bylaws and Florida law may make a change in
control of the Company more difficult to effect, even if a change in control
were in the stockholders' interest. Such provisions include certain
supermajority voting requirements contained in the Company's Articles of
Incorporation. The Company's Articles of Incorporation also provide that the
Board of Directors is divided into three classes of directors, elected for
staggered three-year terms. In addition, the Company's Articles of Incorporation
allow the Board of Directors to determine the terms of preferred stock which may
be issued by the Company without approval of the holders of the Common Stock,
and thereby enable the Board of Directors to inhibit the ability of the holders
of the Common Stock to effect a change in control of the Company. See
"Description of Capital Stock -- Certain Provisions of Florida Law." The Company
has entered into employment agreements with executive officers Theodore
Gillette, Richard Sanchez, Richard Welch and Michael Block, as well as certain
other employees of the Company, that require the Company to pay certain amounts
to such employees upon their termination following certain events including a
change in control of the Company. Such agreements may inhibit a change in
control of the Company. See "Management -- Employment Agreements."

RESTRICTIONS ON PAYMENT OF DIVIDENDS. The Company's bridge credit facility
places certain restrictions on the future payment of dividends and the
anticipated bank credit facility is expected to have similar restrictions.
Furthermore, the Company currently intends to retain all future earnings for the
operation and expansion of its business and, accordingly, the Company does not
anticipate that any dividends will be declared or paid for the foreseeable
future. See "Dividend Policy" and "Management Discussion and Analysis of
Financial Conditions and Results of Operations -- Liquidity and Capital
Resources."

POTENTIAL CONFLICTS OF INTEREST FROM RELATED PARTY TRANSACTIONS. There are
currently Management Agreements existing between the Company and professional
associations owned and controlled by several of the Company's officers,
directors and key employees which could create the potential for possible
conflicts of interests for such individuals. Any future transactions and
agreements or modifications of current agreements between the Company and such
individuals, other affiliates and their professional associations will be
approved by a majority of the Company's independent directors and will be on
terms no less favorable to the Company than those that could be obtained from
unaffiliated parties. See "Certain Transactions."

POSSIBLE VOLATILITY OF STOCK PRICE. The market price of the Common Stock
could be subject to significant fluctuations in response to variations in
financial results or announcements of material events by the Company or its
competitors. Quarterly operating results of the Company, changes in general
conditions in the economy or the health care industry, or other developments
affecting the Company or its competitors, could cause the market price of the
Common Stock to fluctuate substantially. The equity markets have, on occasion,
experienced significant price and volume fluctuations that have affected the
market prices for many companies' securities and that have often been unrelated
to the operating performance of these companies. Concern about the potential
effects of health care reform measures has contributed to the volatility of
stock prices of companies in health care and related industries and may
similarly affect the price of the Common Stock following the Offering. Any such
fluctuations that occur following completion of the Offering may adversely
affect the market price of the Common Stock.

17
<PAGE> 19

THE COMPANY

Vision 21 Physician Practice Management Company, Inc., a current subsidiary
of the Company ("Vision 21 PPMC"), was founded in 1984 to provide management
services to optometry practices owned primarily by the Company's Chief Executive
Officer, Theodore N. Gillette, O.D. At such time, Vision 21 PPMC contracted with
VisionWorks and Eckerd Optical (subsidiaries of Eckerd Corporation) to manage
optometry practices located within VisionWorks and Eckerd retail optical
centers. As Vision 21 PPMC expanded its network of optometry practices under
management, its management services were also expanded to include management
information systems, electronic claims processing, practice administration,
continuing education and credentialing of associated optometrists. By 1987,
management services were provided to over 20 optometry clinics located in the
state of Florida in close proximity to, or within, VisionWorks and Eckerd
Optical retail optical centers. Additionally, during that period, Vision 21 PPMC
began to form strategic relationships with independent ophthalmologists to
provide its optometric patients with access to secondary and tertiary eye care
services.

In 1986, Vision 21 Managed Eye Care of Tampa Bay, Inc., a current
subsidiary of the Company ("Vision 21 MCO"), began to provide management and
administrative services to networks of eye care providers that offered primary,
secondary and tertiary eye care services. Vision 21 MCO was awarded its first
managed care contract in 1988 covering in excess of 18,000 patient lives, with
retail optical and optometric services provided by its network of eye care
providers.

The Company was incorporated in Florida on May 9, 1996. The principal
operating subsidiaries of the Company are Vision 21 Managed Eye Care of Tampa
Bay, Inc. and Vision 21 Physician Practice Management Company, Inc., both of
which merged with the Company in November 1996. In the merger, all of the
outstanding shares of stock of Vision 21 PPMC and Vision 21 MCO were exchanged
for an aggregate of 2,685,318 shares of Common Stock of the Company. The
previous shareholders of these two entities consisted of certain executive
officers and directors of the Company. See "Certain Transactions."

The Company's 5,810 Affiliated Providers provide eye care services to 39
LADS located in 26 states. Of these Affiliated Providers, 86 are Managed
Providers, consisting of 50 optometrists and 36 ophthalmologists practicing at
57 clinic locations and five ASCs, and 5,724 are Contract Providers, consisting
of 4,993 optometrists and 731 ophthalmologists practicing at over 4,300 clinic
locations and 35 ASCs. The Company's Affiliated Providers, in conjunction with
select national retail optical chains operating over 300 retail optical centers,
deliver eye care services under the Company's 82 managed care contracts and 12
discount fee-for-service plans covering approximately 4.0 million exclusively
contracted patient lives. Furthermore, the Company has established a nationwide
eye care provider network, of over 6,700 additional Contract Providers thereby
positioning the Company to capture incremental managed care market share in new
local markets.

The principal executive office of the Company is located at 7209 Bryan
Dairy Road, Largo, Florida 33777, and its telephone number is (813) 545-4300.

THE ACQUISITIONS

BLOCK ACQUISITION

Block Acquisition. Effective October 31, 1997, the Company acquired all of
the issued and outstanding stock of Block Vision. Block Vision provides
administration services on behalf of managed vision care plans for a nationwide
network of 5,171 Contract Providers who provide eye care services pursuant to 58
capitated and five discount fee-for-service managed care contracts covering over
2.1 million exclusively contracted patient lives. The Block Acquisition has
enabled the Company to establish 28 new LADS for future development.
Furthermore, Block Vision has established a network of approximately 4,500
additional credentialed Contract Providers, and another 1,400 Contract Providers
in the process of being credentialed, to provide eye care services to capture
future managed care business in anticipated new local markets. In addition,
Block Vision operates a buying group division which provides billing and
collection services to suppliers of optical products. The Block Acquisition was
accounted for under the purchase method of accounting. The aggregate

18
<PAGE> 20

consideration paid by the Company was approximately $35.0 million, consisting of
$25.6 million in cash, 458,365 shares of Common Stock, subject to certain
post-closing adjustments, and 219,633 shares of Common Stock to be held in
escrow as contingent consideration, of which 109,816 shares of Common Stock are
to be delivered by the Company to the sellers if earnings before interest,
taxes, depreciation and amortization ("EBITDA") of Block Vision reaches $4.5
million for the year ended December 31, 1998. The remaining 109,817 shares will
be deliverable on a pro rata escalating basis if Block Vision reaches $4.5
million of EBITDA for 1998 with the full contingent consideration deliverable
upon Block Vision attaining $4.9 million of EBITDA for 1998.

1997 ACQUISITIONS

October Acquisitions. In October 1997, the Company closed in escrow one
acquisition and entered into an agreement with respect to another acquisition to
acquire the business assets of two ophthalmology clinics, two optical
dispensaries and one ASC located in Brandon, Florida and Minneapolis, Minnesota.
Concurrently, the Company entered into Management Agreements with the related
professional associations employing three optometrists and five
ophthalmologists. These acquisitions were accounted for by recording assets and
liabilities at fair value and allocating the remaining costs to the related
Management Agreements. In connection with the October Acquisitions, the Company
provided aggregate consideration of approximately $3.2 million, consisting of
approximately 101,494 shares of Common Stock and approximately $1.8 million in
cash.

September Acquisitions. In September 1997, the Company closed in escrow
the acquisition of the business assets of four ophthalmology clinics and two
optical dispensaries located in Tampa, Florida, Tucson, Arizona and Setauket,
New York. Concurrently, the Company entered into Management Agreements with the
related professional associations employing eight ophthalmologists. These
acquisitions were accounted for by recording assets and liabilities at fair
value and allocating the remaining costs to the related Management Agreements.
Additionally, the Company closed in escrow the acquisition of substantially all
the business assets of a managed care company servicing two capitated managed
care contracts covering over 134,000 patient lives. In connection with the
September Acquisitions, the Company provided aggregate consideration of $7.6
million, consisting of 397,212 shares of Common Stock, $3.6 million in cash and
promissory notes in the amount of $100,000, subject to closing adjustments.
Additionally, the Company is required to provide additional contingent
consideration consisting of up to 76,622 shares of Common Stock and $800,000 in
cash, to be paid to the sellers in the event that certain post-acquisition
performance targets are met.

Material September Acquisitions include: (i) the business assets of a
professional corporation providing ophthalmology services at two clinics located
in Tucson, Arizona for a total consideration of $4.1 million, consisting of
219,057 shares of Common Stock, $1.8 million in cash and contingent
consideration of up to $405,000, consisting of 55% in Common Stock and 45% in
cash, to be paid to the sellers if certain post-acquisition performance targets
are met; (ii) the business assets of a professional partnership providing
ophthalmology services at two clinics located in Tampa and Zephyrhills, Florida
for a total consideration of $2.9 million, consisting of 155,702 shares of
Common Stock, $1.3 million in cash and certain contingent consideration to be
paid to the sellers if certain post-acquisition performance targets are met; and
(iii) the business assets of a managed care company located in Tampa, Florida
for a total consideration of $1.6 million, consisting of $435,000 in cash and
contingent consideration of 76,622 shares of Common Stock and $395,000 in cash
to be paid to the sellers if certain post-acquisition performance targets are
met.

Pre Initial Public Offering Acquisitions. Between March 1, 1997 and the
Initial Public Offering, which was completed on August 18, 1997, the Company
completed the acquisitions of the business assets of one optometry clinic, 11
ophthalmology clinics, six optical dispensaries and four ASCs located in
Pinellas Park and Ft. Lauderdale, Florida and Sierra Vista, Mesa, Tucson and
Phoenix, Arizona. Concurrently, the Company entered into Management Agreements
with the related professional associations employing six optometrists and 13
ophthalmologists (collectively the "Pre IPO Acquisitions"). These acquisitions
were accounted for by recording assets and liabilities at fair value and
allocating the remaining cost to the related Management Agreements. In
connection with the Pre IPO Acquisitions, the Company provided aggregate
consideration of

19
<PAGE> 21

$7.3 million, consisting of 876,524 shares of Common Stock, a promissory note in
the amount of $264,000 and $29,000 in cash, subject to closing adjustments.

1996 ACQUISITIONS

In December 1996, the Company completed a series of transactions resulting
in the acquisition of the business assets of 22 optometry clinics, nine
ophthalmology clinics, 15 optical dispensaries and one ASC. Concurrently, the
Company entered into Management Agreements with the related professional
associations employing 34 optometrists and 13 ophthalmologists. These
acquisitions were accounted for by recording the assets and liabilities at fair
value and allocating the remaining costs to the related Management Agreements.
Additionally, the Company acquired substantially all the business assets of a
managed care company servicing four capitated managed care contracts covering
over 100,000 patient lives, which was accounted for under the purchase method of
accounting (collectively, the "1996 Acquisitions"). In connection with the 1996
Acquisitions, the Company provided aggregate consideration of $11.2 million,
consisting of 2.1 million shares of Common Stock, promissory notes in the
aggregate principal amount of $1.9 million and $800,000 in assumed debt.
Additionally, the Company is required to provide additional consideration of up
to $316,000, consisting of up to 79,805 shares of Common Stock, in connection
with several of the 1996 Acquisitions, which will be transferred out of escrow
to certain sellers in the event that certain post-acquisition performance
targets are met. See "Certain Transactions."

Material 1996 Acquisitions include: (i) the business assets of a
professional association providing optometry services at 11 clinics located in
Tampa, Port Richey, Clearwater, St. Petersburg, Palm Harbor and Seminole,
Florida for a total consideration of $1.9 million, consisting of 373,971 shares
of Common Stock and a promissory note in the amount of $416,000; (ii) the
business assets of a professional corporation providing ophthalmology services
at three clinics located in Tucson, Arizona for a total consideration of $1.6
million, consisting of 396,612 shares of Common Stock; (iii) the business assets
of a professional association providing ophthalmology services at one clinic
located in Minneapolis, Minnesota for a total consideration of $1.4 million,
consisting of 247,108 shares of Common Stock and a promissory note in the amount
of $460,000; and (iv) the business assets of a professional limited liability
company providing ophthalmology services at two clinics located in Tucson and
Oro Valley, Arizona for a total consideration of $1.7 million, consisting of
327,717 shares of Common Stock and a promissory note in the amount of $396,000.

20
<PAGE> 22

RELATIONSHIPS WITH AFFILIATED PROVIDERS AND RETAIL OPTICAL COMPANIES

The Company provides practice management services pursuant to long-term
Management Agreements with professional associations employing Managed Providers
or with entities operating ASCs. This arrangement allows the Managed Providers
to focus on providing professional eye care services to patients. The related
professional associations receive payments from third-party payors or patients
for services provided. The Company receives management fees from the
professional associations for providing management services and employs all
administrative and non-professional staff for the clinic or ASC. The Company
owns all the business assets of the clinics and ASCs to the extent allowable by
law. Furthermore, the Company does not engage in the practice of optometry or
ophthalmology and does not control the practice of optometry or ophthalmology by
the Managed Providers or the compliance with regulatory and other requirements
directly applicable to the Managed Providers and their practices or the
operation of ASCs. The professional associations maintain full control over the
professional eye care services provided by the Managed Providers and set the
fees for all such services. See "Business -- Management Agreements."

The Company has also entered into managed care agreements with HMOs, health
insurance companies and other third-party payors pursuant to which the Company's
Managed Providers and Contract Providers provide eye care services to patients
who are covered by the payors' health benefit plans. The Company does not
provide practice management services to the Contract Providers. Furthermore, the
Company does not control the practice of optometry or ophthalmology by the
Contract Providers or the compliance with regulatory and other requirements
directly applicable to the Contract Providers and their practices or the
operation of ASCs.

The Company has contractual affiliations with ECCA and For Eyes,
subsidiaries of retail optical chains that operate a combined total of over 300
optical retail locations in 48 cities in the United States. As part of its
strategic relationship with ECCA, the Company's LADS provide certain eye care
services to customers of ECCA at retail optical centers located within the
Company's local area markets. In addition, the Company and ECCA jointly seek to
benefit from increasing managed care business by marketing to managed care plans
an integrated network of eye care providers that are able to offer primary,
secondary and tertiary care as well as retail optical products and services. In
its contractual agreement with For Eyes, the Company is a joint venture partner
in a general partnership called "Vision 21 Plus" in which the Company and For
Eyes each have a 50% interest. The objective of the joint venture is to maximize
opportunities for the Company in managed care by securing contracts and
providing comprehensive, fully integrated eye care products and services to
health care organizations and self-funded employer groups.

21
<PAGE> 23

USE OF PROCEEDS

The net proceeds to the Company from the sale of the 2,400,000 shares of
Common Stock offered by the Company (after deducting underwriting discounts and
commissions and estimated offering expenses) based upon an assumed public
offering price of $10.75, the last reported sales price for the Common Stock on
the Nasdaq National Market on Novmeber 18, 1997, are estimated to be
approximately $23.7 million ($24.1 million if the Underwriters' over-allotment
option is exercised in full).

The Company intends to use the net proceeds from the Offering to pay
approximately $23.7 million of the cash portion of the Block Acquisition. See
"Certain Transactions" and "Underwriting."

PRICE RANGE OF COMMON STOCK

The Common Stock has been included for quotation in the Nasdaq National
Market under the symbol "EYES" since August 18, 1997. The following table sets
forth, for the periods indicated, the range of high and low sales prices per
share of Common Stock, as reported by the Nasdaq National Market:

<TABLE>
<CAPTION>
1997 HIGH LOW
- ---- ------ ------
<S> <C> <C>
Third Quarter (beginning August 18, 1997)................... $15.00 $ 9.00
Fourth Quarter (through November 18, 1997).................. 14.75 10.75
</TABLE>

On November 18, 1997, the last reported sales price of the Common Stock on
the Nasdaq National Market was $10.75 per share and on November 18, 1997 the
number of holders of record of the Common Stock was approximately 132.

DIVIDEND POLICY

The Company has not paid or declared any dividends since its inception. The
Company currently intends to retain all future earnings for the operation and
expansion of its business and, accordingly, the Company does not anticipate that
any dividends will be declared or paid on the Common Stock for the foreseeable
future. Any future determination to pay cash dividends will be at the discretion
of the Board of Directors and will be dependent upon the Company's financial
condition, results of operations, capital requirements and other factors the
Board of Directors deems relevant. In addition, the Company's bridge credit
facility places certain restrictions on the payment of dividends and the
Company's anticipated bank credit facility is expected to have a similar
restriction. See "Management's Discussion and Analysis of Financial Condition
and Results of Operations -- Liquidity and Capital Resources."

22
<PAGE> 24

CAPITALIZATION

The following table sets forth the capitalization of the Company as of
September 30, 1997, (i) on an actual basis, (ii) on a pro forma basis to give
effect to the Block Acquisition and the October Acquisitions and (iii) as
adjusted to give effect to the sale of the 2,400,000 shares of Common Stock
offered by the Company hereby, which, based upon an assumed public offering
price of $10.75 per share (based upon the last reported sales price for the
Common Stock on the Nasdaq National Market on November 18, 1997), are estimated
to be approximately $23.7 million (after deducting underwriting discounts and
commissions and estimated offering expenses). This table should be read in
conjunction with "Management's Discussion and Analysis of Financial Condition
and Results of Operations" and the Consolidated Financial Statements and
Unaudited Pro Forma Consolidated Financial Information included elsewhere in
this Prospectus.

<TABLE>
<CAPTION>
SEPTEMBER 30, 1997
---------------------------------
PRO FORMA
ACTUAL PRO FORMA AS ADJUSTED
------- --------- -----------
(IN THOUSANDS)
<S> <C> <C> <C>
Current portion of long-term debt and capital lease
obligations............................................... $ 403 $ 430 $ 6,128
Long-term debt and capital lease obligations................ 177 3,302 3,302
Stockholders' equity(1):
Common Stock: $.001 par value; 50,000,000 shares
authorized, 8,591,234 shares outstanding, 9,207,449
shares outstanding, pro forma, 11,607,449 shares
outstanding, pro forma as adjusted..................... 9 9 12
Additional paid-in capital................................ 40,269 47,952 71,666
Deferred compensation..................................... (436) (436) (436)
Retained earnings (deficit)............................... (8,943) (9,575) (9,575)
------- ------- -------
Total stockholders' equity........................ 30,899 37,950 61,667
------- ------- -------
Total capitalization......................... $31,479 $41,682 $71,097
======= ======= =======
</TABLE>

- ---------------

(1) Excludes (a) an aggregate of 1,600,000 shares of Common Stock reserved for
issuance under the Plans, pursuant to which options to purchase 792,667
shares of Common Stock have been granted as of November 18, 1997, (b) an
aggregate of 1,026,666 shares of Common Stock which are reserved for
issuance in the event of the exercise of warrants granted by the Company and
(c) an aggregate of 438,596 shares of Common Stock which are being held in
escrow as contingent consideration in several acquisitions. Includes an
aggregate of 1,066,155 shares of Common Stock which are being held in escrow
in connection with certain acquisitions. See "The Acquisitions,"
"Management -- Stock Option Plans," "Shares Eligible for Future Sale" and
"Underwriting."

23
<PAGE> 25

SELECTED PRO FORMA FINANCIAL DATA

The pro forma financial data are derived from the Unaudited Pro Forma
Consolidated Financial Information of the Company appearing elsewhere in this
Prospectus. The Pro Forma Statement of Operations Data for the year ended
December 31, 1996 give effect to the following transactions as if they had
occurred on January 1, 1996: (i) the 1996 Acquisitions, (ii) the 1997
Acquisitions, (iii) the Block Acquisition and (iv) the Initial Public Offering
and the application of the net proceeds therefrom. The Pro Forma Statement of
Operations Data for the nine months ended September 30, 1997 give effect to the
following transactions as if they had occurred on January 1, 1996: (i) the 1997
Acquisitions, (ii) the Block Acquisition and (iii) the Initial Public Offering
and the application of the net proceeds therefrom. The Pro Forma Balance Sheet
Data as of September 30, 1997 give effect to the (i) the October Acquisitions,
(ii) the Block Acquisition and (iii) the Offering and the application of the
estimated net proceeds therefrom, as if they had occurred as of September 30,
1997.

The pro forma financial data should be read in conjunction with the
Unaudited Pro Forma Consolidated Financial Information of the Company and the
related notes thereto included elsewhere in this Prospectus. Management believes
the assumptions used in the Unaudited Pro Forma Consolidated Financial
Information provide a reasonable basis on which to present the pro forma
financial data. The pro forma financial data are provided for informational
purposes only and should not be construed to be indicative of the Company's
financial position or results of operations had the transactions and events
described in the notes thereto been consummated on the dates assumed and are not
intended to project the Company's financial condition or results of operations
on any future date or for any future period.

<TABLE>
<CAPTION>
NINE MONTHS
YEAR ENDED ENDED
DECEMBER 31, 1996 SEPTEMBER 30, 1997
----------------- ------------------
(IN THOUSANDS EXCEPT PER SHARE DATA)
<S> <C> <C>
PRO FORMA STATEMENT OF OPERATIONS DATA:
Revenues:
Practice management fees................................ $ 39,481 $ 31,073
Managed care............................................ 23,087 22,646
Buying group sales...................................... 54,832 40,389
Other revenue........................................... 335 599
-------- --------
Total revenues..................................... 117,735 94,707
-------- --------
Operating expenses:
Practice management expenses............................ 31,748 25,168
Medical claims.......................................... 20,789 17,342
Cost of buying group sales.............................. 52,085 38,360
Salaries, wages and benefits............................ 6,806 5,565
Business development.................................... 1,927 --
General and administrative.............................. 4,035 3,213
Depreciation and amortization........................... 4,019 3,023
-------- --------
Total operating expenses........................... 121,409 92,671
-------- --------
Income (loss) from operations........................... (3,674) 2,036
Interest expense........................................ 1,532 1,276
-------- --------
Income (loss) before income taxes....................... (5,206) 760
Income tax expense (benefit)............................ (1,444) 672
-------- --------
Net income (loss) before extraordinary charge........... $ (3,762) $ 88
======== ========
</TABLE>

<TABLE>
<CAPTION>
SEPTEMBER 30, 1997
------------------
(IN THOUSANDS)
<S> <C> <C>
PRO FORMA BALANCE SHEET DATA:
Working capital.............................................................. $ (3,135)
Total assets................................................................. 87,014
Long-term debt and capital lease obligations,
including current maturities............................................... 9,430
Total stockholders' equity................................................... 61,667
</TABLE>

See Notes to the Unaudited Pro Forma Consolidated Financial Information.

24
<PAGE> 26

SELECTED FINANCIAL DATA

The following selected financial data with respect to the Company's
statements of operations for the years ended December 31, 1994, 1995 and 1996,
and the balance sheet data as of December 31, 1995 and 1996 are derived from the
Consolidated Financial Statements of the Company which have been audited by
Ernst & Young LLP, independent certified public accountants. The selected
financial data presented below for the years ended December 31, 1992, 1993 and
for the nine months ended September 30, 1996 and 1997 are unaudited and were
prepared by management of the Company on the same basis as the audited
Consolidated Financial Statements included elsewhere herein and, in the opinion
of management of the Company, include all adjustments necessary to present
fairly the information set forth therein. The results for the nine months ended
September 30, 1997 are not necessarily indicative of the results to be expected
for the full year ending December 31, 1997 or future periods. The following data
should be read in conjunction with the Consolidated Financial Statements of the
Company and the related notes thereto and "Management's Discussion and Analysis
of Financial Condition and Results of Operations" included elsewhere in this
Prospectus.

<TABLE>
<CAPTION>
NINE MONTHS ENDED
YEARS ENDED DECEMBER 31, SEPTEMBER 30,
------------------------------------------- -----------------
1992 1993 1994 1995 1996 1996 1997
----- ----- ------- ------- ------- ------- -------
(IN THOUSANDS EXCEPT PER SHARE DATA)
<S> <C> <C> <C> <C> <C> <C> <C>
STATEMENT OF OPERATIONS DATA:
Revenues:
Practice management fees................. $ 645 $ 653 $ 392 $ 424 $ 1,943 $ 555 $19,685
Managed care(1).......................... -- -- 669 2,446 7,315 5,307 9,307
Other revenue............................ 8 6 131 212 306 163 452
----- ----- ------- ------- ------- ------- -------
Total revenues...................... 653 659 1,192 3,082 9,564 6,025 29,444
----- ----- ------- ------- ------- ------- -------
Operating expenses:
Practice management expenses............. -- -- -- -- 1,244 -- 15,978
Medical claims........................... -- -- 551 2,934 9,129 7,319 8,053
Salaries, wages and benefits............. 494 501 538 904 1,889 1,375 3,405
Business development..................... -- -- -- -- 1,927 -- --
General and administrative............... 167 168 238 443 1,209 662 1,339
Depreciation and amortization............ 11 8 13 18 126 35 954
----- ----- ------- ------- ------- ------- -------
Total operating expenses............ 672 677 1,340 4,299 15,524 9,391 29,729
----- ----- ------- ------- ------- ------- -------
Loss from operations....................... (19) (18) (148) (1,217) (5,960) (3,366) (285)
Interest expense........................... 1 5 5 9 160 66 741
----- ----- ------- ------- ------- ------- -------
Loss before income taxes................... (20) (23) (153) (1,226) (6,120) (3,432) (1,026)
Income taxes............................... -- -- -- -- -- -- --
----- ----- ------- ------- ------- ------- -------
Loss before extraordinary charge........... (20) (23) (153) (1,226) (6,120) (3,432) (1,026)
Extraordinary charge -- early
extinguishment of debt................... -- -- -- -- -- -- 323
----- ----- ------- ------- ------- ------- -------
Net loss................................... $ (20) $ (23) $ (153) $(1,226) $(6,120) $(3,432) $(1,349)
===== ===== ======= ======= ======= ======= =======
Loss before extraordinary charge per common
share(2)................................. $ (1.02) $ (0.15)
======= =======
Net loss per common share(2)............... $ (1.02) $ (0.20)
======= =======
Weighted average number of common shares
outstanding(2)........................... 5,980 6,671
======= =======
</TABLE>

<TABLE>
<CAPTION>
DECEMBER 31,
------------------------------------------- SEPTEMBER 30,
1992 1993 1994 1995 1996 1997
----- ----- ------- ------- ------- -------------
(IN THOUSANDS)
<S> <C> <C> <C> <C> <C> <C> <C>
BALANCE SHEET DATA:
Working capital (deficit).................. $ 19 $ (5) $ (193) $(1,499) $(2,857) $ 1,582
Total assets............................... 53 67 49 165 15,712 43,771
Long-term debt and capital lease
obligations, including current
maturities............................... 56 89 85 363 7,735 580
Total stockholders' equity (deficit)....... (16) (38) (191) (1,439) 2,536 30,899
</TABLE>

- ---------------

(1) Revenues related to managed care for 1992 and 1993 are included under other
revenue as managed care revenues were not separately accounted for during
such periods.

(2) See Note 3 to Notes to Consolidated Financial Statements for a description
of the computation of net loss per common share.

25
<PAGE> 27

MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS

GENERAL

The Company provides a wide range of management and administrative services
to local area delivery systems ("LADS") established by the Company. LADS are
developed to provide for integrated networks of optometrists, ophthalmologists,
ASCs and retail optical centers which offer the full continuum of eye care
services in local markets. The Company began operations in 1984, providing
management services to seven optometrists practicing at eight clinic locations.
The Company currently provides its services to 39 LADS located in 26 states
through which 5,810 Affiliated Providers deliver eye care services. Of these
Affiliated Providers, 86 are Managed Providers, consisting of 50 optometrists
and 36 ophthalmologists practicing at 57 clinic locations and five ASCs, and
5,724 are Contract Providers, consisting of 4,993 optometrists and 731
ophthalmologists practicing at over 4,300 clinic locations and 35 ASCs. The
Company's Affiliated Providers, in conjunction with select national retail
optical chains operating over 300 retail optical centers, deliver eye care
services under the Company's 82 managed care contracts and 12 discount
fee-for-service plans covering approximately 4.0 million exclusively contracted
patient lives. Furthermore, the Company has established a nationwide eye care
provider network of over 6,700 additional Contract Providers thereby positioning
the Company to capture future managed care business in anticipated new local
markets.

RECENT DEVELOPMENTS

Effective October 31, 1997, the Company acquired all of the issued and
outstanding stock of Block Vision. Block Vision provides administration services
on behalf of managed vision care plans for a nationwide network of 5,171
Contract Providers who provide eye care services pursuant to 58 capitated and
five discount fee-for-service managed care contracts covering over 2.1 million
exclusively contracted patient lives. The Block Acquisition has enabled the
Company to establish 28 new LADS for future development. Furthermore, Block
Vision has established a network of approximately 4,500 additional credentialed
Contract Providers, and another 1,400 Contract Providers in the process of being
credentialed, to provide eye care services to capture future managed care
business in anticipated new local markets. For Block Vision's fiscal year ended
April 30, 1997, managed vision care revenue was approximately $14.4 million with
a medical loss ratio of 71.0%. In addition, Block Vision operates a buying group
division which provides billing and collection services to suppliers of optical
products. The buying group division is not directly involved in the ordering
process or the physical distribution of eye care products. For Block Vision's
fiscal year ended April 30, 1997, buying group revenue was approximately $54.6
million. See the Consolidated Financial Statements of BBG-COA Inc., included
elsewhere in this Prospectus.

The Block Acquisition was accounted for under the purchase method of
accounting. The aggregate consideration paid by the Company was approximately
$35.0 million, consisting of $25.6 million in cash, 458,365 shares of Common
Stock, subject to certain post-closing adjustments, and 219,633 shares of Common
Stock to be held in escrow as contingent consideration, of which 109,816 shares
are to be delivered by the Company to the sellers if EBITDA of Block Vision
reaches $4.5 million for the year ended December 31, 1998. The remaining 109,817
shares will be deliverable on a pro rata escalating basis if Block Vision
reaches $4.5 million of EBITDA for 1998 with the full contingent consideration
deliverable upon Block Vision attaining $4.9 million of EBITDA for 1998. On a
pro forma basis, had the Block Acquisition occurred at the beginning of 1996,
the Company would have recorded $54.8 million in buying group revenue and $23.1
million in managed care revenue for 1996 and $40.4 million in buying group
revenue and $22.6 million in managed care revenue for the nine months ended
September 30, 1997. See "The Acquisitions."

In October 1997, the Company closed in escrow one acquisition and entered
into an agreement with respect to another acquisition, the October Acquisitions,
resulting in the acquisition of the business assets of two ophthalmology
clinics, two optical dispensaries, and one ASC. Concurrently with the October
Acquisitions, the Company entered into long-term Management Agreements with the
related professional associations employing three optometrists and five
ophthalmologists. The October Acquisitions were accounted for by recording the
assets and liabilities at fair value and allocating the remaining costs to the
related Management

26
<PAGE> 28

Agreements. In connection with the October Acquisitions, the Company provided
aggregate consideration of approximately $3.2 million, consisting of
approximately 101,494 shares of Common Stock and approximately $1.8 million in
cash. On a pro forma basis, had the October Acquisition occurred at the
beginning of 1996, the Company would have recorded $3.0 million and $2.3 million
in practice management fee revenue for 1996 and the nine months ended September
30, 1997, respectively. See "The Acquisitions."

In September 1997, the Company closed in escrow the September Acquisitions
resulting in the acquisition of the business assets of four ophthalmology
clinics and two optical dispensaries. Concurrently with the September
Acquisitions, the Company entered into long-term Management Agreements with the
related professional associations employing eight ophthalmologists. These
acquisitions were accounted for by recording assets and liabilities at fair
value and allocating the remaining costs to the related Management Agreements.
Additionally, the Company closed in escrow the acquisition of substantially all
the business assets of a managed care company servicing two capitated managed
care contracts covering over 134,000 patient lives. In connection with the
September Acquisitions, the Company provided aggregate consideration of $7.6
million, consisting of 397,212 shares of Common Stock, $3.6 million in cash and
promissory notes in the amount of $100,000. Additionally, the Company is
required to provide additional contingent consideration, consisting of 76,622
shares of Common Stock and $800,000 cash, to be paid to the sellers if certain
post-acquisition performance targets are met. On a pro forma basis, had the
September Acquisitions occurred at the beginning of 1996, the Company would have
recorded $6.8 million and $4.6 million in practice management fee and managed
care revenue for 1996 and the nine months ended September 30, 1997,
respectively. See "The Acquisitions."

HISTORICAL OVERVIEW

The Company enters into Management Agreements with the Managed Professional
Associations pursuant to which the Company is the sole provider of comprehensive
management, business and administrative services for the non-professional
aspects of the professional practices which obligate the Company to provide
certain facilities and equipment, accounting services, purchasing, assistance in
managed care, contract negotiations, management and clinical personnel,
information systems, training, and billing and collection services. Each Managed
Provider maintains full authority, control and responsibility over the provision
of professional care and services to its patients. The Company does not provide
professional care to patients nor does the Company employ any of the
ophthalmologists or optometrists, or any other professional health care provider
personnel, of the Managed Professional Association. The Managed Professional
Association is responsible for, among other things, hiring, supervising, and
directing certain of the Managed Professional Association's professional
employees, adopting a peer review/quality assurance program and maintaining
appropriate worker's compensation, professional and comprehensive general
liability insurance. The Managed Professional Associations derive their revenues
from fees received for professional services provided by optometrists and
ophthalmologists, charges for the use of ASCs and sales of optical goods. The
Managed Professional Associations currently receive revenues from a combination
of sources, including fees paid by private-pay patients, indemnity insurance
reimbursements, capitation payments from managed care companies and government
funded reimbursements (Medicare and Medicaid). See "Business -- Management
Agreements."

The initial term of the Management Agreement is typically 40 years. Under
substantially all of the Company's Management Agreements, the management fee
ranges from 24% to 37% of the Managed Professional Association's gross revenues
after deducting from such revenues all expenses of the clinic other than those
related to shareholders of the Managed Professional Associations. The practice
management fees earned by the Company pursuant to these Management Agreements
fluctuate depending on variances in revenues and expenses of the Managed
Professional Association. Therefore, in connection with the Management
Agreements, the amount of such fees will be significantly affected by the degree
of success of operations of the Managed Professional Association and the
Company's ability to successfully manage the practice. See "Risk
Factors -- Reliance on Affiliated Providers" and "Business -- Management
Agreements."

27
<PAGE> 29

The Company recognizes as managed care revenue certain fixed payments
received pursuant to its managed care contracts on a capitated or risk-sharing
basis. The Company also recognizes fees received for the provision of certain
financial and administrative services related to its indemnity fee-for-service
plans. The Company manages risk of capitated managed care contracts by
monitoring utilization of each Affiliated Provider and comparing their
utilization to national averages, expected utilization at the time the contract
was bid, utilization of other providers and historical utilization of the
Affiliated Provider. Abnormal utilization of an Affiliated Provider results in a
medical chart review by the Company and further counseling on appropriate
clinical protocols. To further manage the risk of capitated managed care
contracts, the Company, in certain instances, enters into agreements to pay
Affiliated Providers a fixed per member per month fee for eye care services
rendered or a pro rata share of managed care capitated payments received (as
determined by the number of eye care procedures performed relative to other
Affiliated Providers). The Company targets these payments at a range of 80% to
90% of total payments received pursuant to the Company's capitated managed care
contracts. Pursuant to its capitated managed care contracts, the Company
receives a fixed payment per member per month for a predetermined benefit level
of eye care services, as negotiated between the Company and the payor.
Profitability of the Company's capitated managed care contracts is directly
related to the specific terms negotiated, utilization of eye care services by
member patients and the effectiveness of administering the contracts. The
Company receives a percentage of collected medical billings for administering
indemnity fee-for-service plans for its Affiliated Providers. Although the terms
and conditions of the Company's managed care contracts vary considerably, they
are typically for a one-year term. See "Risk Factors -- Risks Associated with
Managed Care Contracts and Capitated Fee Arrangements."

Between March 1, 1997 and the Initial Public Offering, which was completed
on August 18, 1997, the Company completed the Pre IPO Acquisitions resulting in
the acquisition of the business assets of one optometry clinic, 11 ophthalmology
clinics, six optical dispensaries and four ASCs. Concurrently, the Company
entered into Management Agreements with the related professional associations
employing six optometrists and 13 ophthalmologists. These acquisitions were
accounted for by recording the assets and liabilities at fair value and
allocating the remaining cost to the related Management Agreements. In
connection with the Pre IPO Acquisitions, the Company provided aggregate
consideration of $7.3 million, consisting of 876,524 shares of Common Stock,
promissory notes in the aggregate principal amount of $264,000 and $29,000 in
cash, subject to closing adjustments. On a pro forma basis, had the Pre IPO
Acquisitions occurred at the beginning of 1996, the Company would have recorded
$13.6 million and $6.2 million in practice management fee revenue for 1996 and
the nine months ended September 30, 1997, respectively.

In December 1996, the Company completed the 1996 Acquisitions resulting in
the acquisition of the business assets of 22 optometry clinics, nine
ophthalmology clinics, 15 optical dispensaries and one ASC. Concurrently, the
Company entered into Management Agreements with the related professional
associations employing 34 optometrists and 13 ophthalmologists. These
acquisitions were accounted for by recording the assets and liabilities at fair
value and allocating the remaining costs to the related Management Agreements.
Additionally, the Company acquired substantially all the business assets of a
managed care company servicing four capitated managed care contracts covering
over 100,000 patient lives, which was accounted for under the purchase method of
accounting. In connection with the 1996 Acquisitions, the Company provided
aggregate consideration of $11.2 million, consisting of 2.1 million shares of
Common Stock, promissory notes in the aggregate principal amount of $1.9 million
and $800,000 in assumed debt. Additionally, the Company is required to provide
additional consideration of up to $316,000, consisting of up to 79,805 shares of
Common Stock, in connection with several of the 1996 Acquisitions, which will be
transferred out of escrow to certain sellers in the event that certain
post-acquisition performance targets are met. If the 1996 Acquisitions had
occurred at the beginning of 1996, the Company would have recorded $16.8 million
in additional practice management fee revenue for 1996. The Company recorded a
one-time charge of $1.4 million in the fourth quarter of 1996 for expenses
associated with the planned acquisition of the business assets of certain
Contract Providers at the time of the 1996 Acquisitions which the Company chose
not to continue to pursue.

Effective October 1996, the Company renegotiated its agreements to pay
certain ophthalmology Contract Providers a per member per month fee for surgical
eye care services provided under the Company's largest

28
<PAGE> 30

capitated managed care contract. Previously, the Company had paid these Contract
Providers pursuant to a fee schedule for eye care services provided under the
same capitated managed care contract. In exchange for entering into the
renegotiated agreement, selected ophthalmology Contract Providers obtained
dedicated groups of managed care members and the right to manage the utilization
by these members. The renegotiated capitation agreements improved the Company's
medical claims ratio (medical claims expense divided by managed care revenue)
from 136.0% for the third quarter of 1996 to 90.1% for the fourth quarter of
1996 and 86.5% for the nine months ended September 30, 1997. On a pro forma
basis for 1996, assuming the renegotiated capitation agreement had been in place
for the entire period, medical claims expense would have been reduced by $2.6
million.

Effective June 1997, the Company renegotiated its agreement to pay the
existing operator of multiple surgical eye care facilities a per member per
month fee for facility services provided at its facilities pursuant to the
Company's largest capitated managed care contract. Previously, the Company had
paid these Contract Providers pursuant to a fee schedule for eye care services
provided under the same capitated managed care contract. In exchange for
entering into the renegotiated agreement, the facility operator obtained
dedicated groups of managed care members. On a pro forma basis for the nine
months ended September 30, 1997, assuming the renegotiated capitation agreement
had been in place for the entire period, medical claims expense would have been
reduced by $267,000. The effect of the renegotiated agreements of October 1996
and June 1997 was to shift the risk of any increased utilization for services by
members from the Company to the Contract Providers.

The Company leveraged its strategic alliance with a leading optical
retailer by adding five internally developed optometry clinics located in
Oklahoma, Louisiana and Florida and entering into Management Agreements with the
related professional association employing five optometrists. In June 1997, the
Company reached a tentative agreement with the same optical retailer to add at
least 20 internally developed optometry clinics through the first quarter of
1998. The Company will continue to leverage its strategic alliances by adding
select internally developed optometry clinics in affiliated optical retail
locations.

29
<PAGE> 31

RESULTS OF OPERATIONS

The following table sets forth, as a percentage of total revenues, certain
items in the Company's statement of operations for the periods indicated. As a
result of the 1996 Acquisitions, 1997 Acquisitions, and the Company's entering
into capitated arrangements with its Contract Providers, the Company does not
believe that the historical percentage relationships for 1994, 1995, 1996 and
the nine months ended September 30, 1996 and 1997 reflect the Company's expected
future operations.

<TABLE>
<CAPTION>
NINE MONTHS ENDED
YEARS ENDED DECEMBER 31, SEPTEMBER 30,
-------------------------- --------------------------
1994 1995 1996 1996 1997
------ ------ ------ ----------- -----------
(UNAUDITED)
<S> <C> <C> <C> <C> <C>
Revenues:
Practice management fees.................. 32.9% 13.8% 20.3% 9.2% 66.9%
Managed care.............................. 56.1 79.4 76.5 88.1 31.6
Other revenue............................. 11.0 6.8 3.2 2.7 1.5
----- ----- ----- ----- ------
Total revenues.................... 100.0 100.0 100.0 100.0 100.0
----- ----- ----- ----- ------
Operating expenses:
Practice management expenses.............. -- -- 13.0 -- 54.3
Medical claims............................ 46.3 95.2 95.5 121.5 27.3
Salaries, wages and benefits.............. 45.1 29.3 19.8 22.8 11.6
Business development...................... -- -- 20.1 -- --
General and administrative................ 19.9 14.4 12.6 11.0 4.5
Depreciation and amortization............. 1.1 0.6 1.3 0.6 3.2
----- ----- ----- ----- ------
Total operating expenses.......... 112.4 139.5 162.3 155.9 100.9
----- ----- ----- ----- ------
Loss from operations........................ (12.4) (39.5) (62.3) (55.9) (0.9)
Interest expense............................ 0.3 0.3 1.7 1.1 2.6
----- ----- ----- ----- ------
Loss before income taxes.................... (12.7) (39.8) (64.0) (57.0) (3.5)
Income taxes................................ -- -- -- -- --
----- ----- ----- ----- ------
Loss before extraordinary charge............ (12.7) (39.8) (64.0) (57.0) (3.5)
Extraordinary charge -- early extinguishment
of debt................................... -- -- -- -- (1.1)
----- ----- ----- ----- ------
Net loss.................................... (12.7)% (39.8)% (64.0)% (57.0)% (4.6)%
===== ===== ===== ===== ======
Medical claims ratio........................ 82.5% 120.0% 124.8% 137.9% 86.5%
===== ===== ===== ===== ======
</TABLE>

Nine Months Ended September 30, 1997 Compared to Nine Months Ended September
30, 1996

Revenues. Revenues increased 388.6% from $6.0 million for the nine months
ended September 30, 1996 to $29.4 million for the nine months ended September
30, 1997. This increase was caused primarily by an increase in practice
management fees attributable to the 1996 Acquisitions and the 1997 Acquisitions,
which accounted for $19.1 million of the increase, and a 75.4% increase in
managed care revenues attributable to the addition of one capitated contract and
the expansion of an existing contract, which accounted for $4.0 million of the
increase.

Practice Management Expenses. Practice management expenses were $16.0
million for the nine months ended September 30, 1997 as a result of the 1996
Acquisitions and the 1997 Acquisitions. Prior to the 1996 Acquisitions, the
Company recognized no practice management expenses related to its management
services because the Company was not liable for such expenses. Practice
management expenses consist of salaries, wages and benefits of certain clinic
staff, professional fees, medical supplies, advertising, building and occupancy
costs, and other general and administrative costs related to the operation of
clinics and ASCs.

Medical Claims. Medical claims expense increased 10.0% from $7.3 million
for the nine months ended September 30, 1996 to $8.1 million for the nine months
ended September 30, 1997. The Company's medical claims ratio decreased from
137.9% for the nine months ended September 30, 1996 to 86.5% for the nine months
ended September 30, 1997. This decrease was caused primarily by the Company's
renegotiated agreement to pay its ophthalmology and ASC Contract Providers a per
member per month fee for surgical eye care services provided under the Company's
largest capitated managed care contract. Medical claims expense consists of
payments by the Company to its Affiliated Providers for primary eye care
services, medical and

30
<PAGE> 32

surgical eye care services and facility services. These payments are based on
fixed payments per member per month, a pro rata share of managed care capitated
payments received (as determined by the number of eye care procedures performed
relative to other Affiliated Providers) or negotiated fee-for-service schedules.
Capitated payments and pro rata payments collectively represented 62.0% and
fee-for-service claims represented 38.0% of total medical claims expense for the
nine months ended September 30, 1997. Medical claims for the nine months ended
September 30, 1996 were based entirely on negotiated fee-for-service schedules.

Salaries, Wages and Benefits. Salaries, wages and benefits expense
increased 147.7% from $1.4 million for the nine months ended September 30, 1996
to $3.4 million for the nine months ended September 30, 1997. This increase was
caused primarily by an increase in corporate staff necessary to support the
Company's expanded practice management and managed care business. Salaries,
wages and benefits expense consists of expenses related to management and
administrative staff located at the Company's corporate headquarters and
regional offices. As a percentage of revenues, salaries, wages and benefits
expense decreased from 22.8% for the nine months ended September 30, 1996 to
11.6% for the nine months ended September 30, 1997. This decrease was caused
primarily by increased economies of scale resulting from the Company's expanding
business.

General and Administrative. General and administrative expenses increased
102.3% from $662,000 for the nine months ended September 30, 1996 to $1.3
million for the nine months ended September 30, 1997. This increase was caused
primarily by increases in travel expenses, professional fees and occupancy
costs. As a percentage of revenues, general and administrative expenses
decreased from 11.0% for the nine months ended September 30, 1996 to 4.5% for
the nine months ended September 30, 1997. This decrease was caused primarily by
increased economies of scale resulting from the Company's expanding business.

Depreciation and Amortization. Depreciation and amortization expense
increased from $35,000 for the nine months ended September 30, 1996 to $954,000
for the nine months ended September 30, 1997. As a percentage of revenues,
depreciation and amortization expense increased from 0.6% for the nine months
ended September 30, 1996 to 3.2% for the nine months ended September 30, 1997.
These increases were caused primarily by the amortization of intangibles
attributable to the 1996 Acquisitions and the 1997 Acquisitions.

Year Ended December 31, 1996 Compared to Year Ended December 31, 1995

Revenues. Revenues increased 210.3% from $3.1 million for 1995 to $9.6
million for 1996. This increase was caused primarily by a 358.3% increase in
practice management fees attributable to the 1996 Acquisitions, which accounted
for $1.5 million of the increase, and a 199.1% increase in managed care revenues
attributable to the addition of one new capitated contract and the expansion of
the Company's largest managed care contract, which accounted for $4.9 million of
the increase.

Practice Management Expenses. Practice management expenses were $1.2
million for 1996, all of which resulted from the 1996 Acquisitions. Prior to the
1996 Acquisitions, the Company recognized no practice management expenses
related to its management services, because the Company was not liable for
expenses of the practices.

Medical Claims. Medical claims expense increased 211.1% from $2.9 million
in 1995 to $9.1 million in 1996. The Company's medical claims ratio increased to
124.8% for 1996 from 120.0% for 1995. These increases were caused primarily by
excess utilization of surgical eye care services and facility services related
to the Company's largest managed care contract, which accounted for $4.8 million
of the increase, and an increase in members covered by the Company's capitated
managed care contracts, which accounted for $1.8 million of the increase.
Capitated payments and pro rata payments represented 11.3% and fee-for-service
payments represented 88.7% of total medical claim expense for 1996. Medical
claims for 1995 were based entirely on negotiated fee-for-service schedules.

Salaries, Wages and Benefits. Salaries, wages and benefits expense
increased 109.0% from $904,000 in 1995 to $1.9 million in 1996. This increase
was caused primarily by an increase in corporate staff necessary to support the
Company's expanded practice management and managed care business. As a
percentage of

31
<PAGE> 33

revenues, salaries, wages and benefits expense decreased from 29.3% in 1995 to
19.8% in 1996. This decrease was caused primarily by increased economies of
scale resulting from the Company's expanding business.

Business Development. Business development expenses were $1.9 million in
1996. Business development expenses consisted of a one-time charge of $1.4
million related to potential acquisitions that were not completed and $500,000
related to the amortization of deferred compensation charges attributable to
consulting services.

General and Administrative. General and administrative expenses increased
172.6% from $443,000 in 1995 to $1.2 million in 1996. This increase was caused
primarily by increases in travel expenses, professional fees, occupancy costs,
temporary labor and recruitment costs related to the Company's expanding
business. As a percentage of revenues, general and administrative expenses
decreased from 14.4% in 1995 to 12.6% in 1996. This decrease was caused
primarily by increased economies of scale resulting from the Company's expanding
business.

Depreciation and Amortization. Depreciation and amortization expense
increased from $18,000 in 1995 to $126,000 in 1996. As a percentage of revenues,
depreciation and amortization expense increased from 0.6% in 1995 to 1.3% in
1996. This increase was caused primarily by the amortization of intangibles
attributable to the 1996 Acquisitions.

Year Ended December 31, 1995 Compared to Year Ended December 31, 1994

Revenues. Revenues increased 158.6% from $1.2 million for 1994 to $3.1
million for 1995. This increase was primarily caused by an increase in managed
care revenues as a result of the Company obtaining its first complete eye care
capitated contract from a leading HMO, which accounted for $1.8 million of the
increase.

Practice Management Expenses. The Company incurred no practice management
expenses during 1994 or 1995. Prior to the 1996 Acquisitions, the Company
recognized no practice management expenses related to its management services
because the Company was not liable for the expenses of the practices.

Medical Claims. Medical claims expense increased 432.1% from $551,000 for
1994 to $2.9 million for 1995. The Company's medical claims ratio increased to
120.0% for 1995 from 82.5% for 1994. These increases were caused primarily by
excess utilization of surgical eye care services and facility services related
to the Company's largest managed care contract. All medical claims for 1995 and
1994 were based on negotiated fee-for-service schedules.

Salaries, Wages and Benefits. Salaries, wages and benefits expense
increased 68.1% from $538,000 in 1994 to $904,000 in 1995. This increase was
caused primarily by an increase in corporate staff necessary to support the
Company's expanded practice management and managed care business. As a
percentage of revenues, salaries, wages and benefits expense decreased from
45.1% in 1994 to 29.3% in 1995. This decrease was caused primarily by increased
economies of scale resulting from the Company's expanding business.

Business Development. The Company incurred no business development
expenses during 1994 or 1995.

General and Administrative. General and administrative expenses increased
86.5% from $238,000 in 1994 to $443,000 in 1995. This increase was caused
primarily by increases in travel expenses, professional fees, occupancy costs
and temporary labor and recruitment costs. As a percentage of revenues, general
and administrative expenses decreased from 19.9% in 1994 to 14.4% in 1995. This
decrease was caused primarily by increased economies of scale resulting from the
Company's expanding business.

Depreciation and Amortization. Depreciation and amortization expense
increased 37.9% from $13,000 in 1994 to $18,000 in 1995. This increase was
caused primarily by the amortization of intangibles. As a percentage of
revenues, depreciation and amortization expense decreased from 1.1% in 1994 to
0.6% in 1995.

LIQUIDITY AND CAPITAL RESOURCES

The Company has historically funded its working capital and capital
expenditure requirements primarily through institutional borrowings and private
debt and equity financings. Net cash provided by operating

32
<PAGE> 34

activities for 1994 was $30,000 and net cash used in operating activities for
1995 and 1996 and the nine months ended September 30, 1997 was $138,000, $4.2
million and $2.9 million, respectively. Net cash provided by operating
activities for 1994 was caused primarily by an increase in liabilities more than
offsetting a net loss. Net cash used in operating activities for 1995 and 1996
and the nine months ended September 30, 1997 was caused primarily by net losses
offset in part by increases in medical claims payable, deferred compensation and
accrued acquisition expenses.

Net cash used in investing activities for 1994, 1995 and 1996 and the nine
months ended September 30, 1997 was $14,000, $88,000, $1.6 million and $4.9
million, respectively, and was caused primarily by the purchase of furniture and
equipment and payments for capitalized acquisition and offering costs.

Net cash used in financing activities for 1994 was $4,000. Net cash
provided by financing activities for 1995 and 1996 and the nine months ended
September 30, 1997 was $256,000, $5.8 million and $10.4 million, respectively.
The amounts for 1996 and for the nine months ended September 30, 1997 were
attributable to private debt and equity financings and higher levels of
institutional borrowings to support the Company's internal expansion and
acquisition activities.

In June 1996, the Company borrowed $3.0 million from Peter Fontaine, a
director of the Company, for working capital purposes pursuant to an unsecured
promissory note bearing interest at 8.0% per annum (the "Fontaine Note"). The
Fontaine Note was repaid by the Company from the net proceeds of the Initial
Public Offering. In addition, the Company borrowed $200,000 and $500,000 from
Mr. Fontaine in November and December 1996, respectively, for working capital
purposes pursuant to unsecured promissory notes bearing interest at 8.5% per
annum. The unsecured promissory notes were repaid from the net proceeds of the
Initial Public Offering. See "Certain Transactions."

In December 1996, the Company completed the 1996 Acquisitions for an
aggregate consideration of $11.2 million, consisting of 2.1 million shares of
Common Stock, unsecured promissory notes in the aggregate principal amount of
$1.9 million bearing interest at 8.0% per annum and $800,000 in assumed debt.
Additionally, the Company has agreed to aggregate contingent consideration of
$316,000, consisting of 79,805 shares of Common Stock, in connection with
several of the 1996 Acquisitions which will be transferred out of escrow to
certain sellers in the event they meet certain post-acquisition performance
targets. The promissory notes were repaid by the Company from the net proceeds
of the Initial Public Offering.

In December 1996, the Company borrowed an aggregate of $1.3 million from
certain individuals for working capital purposes pursuant to the issuance of
senior subordinated notes bearing interest at 10% per annum (the "1996
Subordinated Notes"). The 1996 Subordinated Notes included detachable warrants
to purchase an aggregate of 208,333 shares of Common Stock at an exercise price
of $6.00 per share. The 1996 Subordinated Notes were repaid by the Company from
the net proceeds of the Initial Public Offering.

In February 1997, the Company borrowed an aggregate of $2.0 million from
Piper Jaffray Healthcare Fund II Limited Partnership ("Piper Jaffray") for
working capital purposes pursuant to the issuance of senior subordinated notes
bearing interest at 10% per annum (the "1997 Subordinated Notes"). The 1997
Subordinated Notes included a detachable warrant to purchase an aggregate of
333,333 shares of Common Stock which have an exercise price of $6.00 per share.
The 1997 Subordinated Notes were repaid by the Company from the net proceeds of
the Initial Public Offering.

Between March 1, 1997 and August 18, 1997, the Company completed the Pre
Initial Public Offering Acquisitions, and provided aggregate consideration of
$7.3 million, consisting of 876,524 shares of Common Stock, promissory notes in
the aggregate principal amount of $264,000 and $29,000 in cash, subject to
closing adjustments.

In April 1997, the Company entered into a credit facility in the aggregate
amount of $4.9 million with Prudential Securities Group Inc. ("Prudential")
pursuant to a Note and Warrant Purchase Agreement (as amended and restated, the
"Note and Warrant Purchase Agreement"). The proceeds from the borrowing were
used to repay the Company's credit facility with Barnett Bank N.A. in the
principal amount of $2.0 million and for general working capital purposes. Under
the Note and Warrant Purchase Agreement, the Company issued a senior note
secured by all the Company's assets (the "Prudential Note"). The Prudential

33
<PAGE> 35

Note accrued interest at 10% per annum with a maturity of the earlier of January
1, 1998 or upon completion of the Initial Public Offering. In addition, the Note
and Warrant Purchase Agreement include a detachable warrant to purchase 210,000
shares of Common Stock at an exercise price per share equal to $10.00 per share,
the price of the Common Stock in the Initial Public Offering. The Prudential
Note was repaid by the Company from the net proceeds of the Initial Public
Offering.

In September 1997, the Company closed in escrow the September Acquisitions
and provided aggregate consideration of $7.6 million consisting of 397,212
shares of Common Stock, $3.6 million in cash, which must be paid by the Company
in the near future, and promissory notes in the amount of $100,000, subject to
closing adjustments. Additionally, the Company is required to provide additional
contingent consideration consisting of 76,622 shares of Common Stock and
$800,000 in cash, to be paid to the sellers in the event that certain
post-acquisition performance targets are met.

In October 1997, the Company closed in escrow one acquisition and entered
into an agreement with respect to another, the October Acquisitions, and
provided aggregate consideration of approximately $3.2 million, consisting of
approximately 101,494 shares of Common Stock, and approximately $1.8 million in
cash which must be paid by the Company in the near future.

Effective October 31, 1997, the Company completed the Block Acquisition in
exchange for aggregate consideration paid to the sellers of approximately $35.0
million, consisting of $25.6 million in cash, 458,365 shares of Common Stock,
subject to certain post-closing adjustments and 219,633 shares of Common Stock
to be held in escrow as contingent consideration, of which 109,816 shares are to
be delivered by the Company to the sellers if EBITDA of Block Vision reaches
$4.5 million for the year ended December 31, 1998. The remaining 109,817 shares
will be deliverable on a pro rata escalating basis if Block Vision reaches $4.5
million of EBITDA for 1998 with the full contingent consideration deliverable
upon Block Vision attaining $4.9 million of EBITDA for 1998. Approximately $2.4
million in net indebtedness of Block Vision will be assumed in connection with
the Block Acquisition. See "The Acquisitions."

In October 1997, the Company received a commitment from Prudential
Securities Credit Corporation ("Prudential Credit") for a credit facility in the
aggregate amount of $37.0 million pursuant to a Note Purchase Agreement (the
"Bridge Credit Facility") of which the Company has borrowed approximately $3.5
million to date for use in the funding of acquisitions. Approximately $1.9
million of the proceeds from the borrowing are to be used to finance a portion
of the Block Acquisition and approximately $6.5 million is available for certain
other optometry and ophthalmology practice acquisitions. The remaining $26.1
million available under the Bridge Credit Facility is also available if needed
for the cash portion of the Block Acquisition but will not be utilized to the
extent of the amount of net proceeds from this Offering. Amounts borrowed
pursuant to the Bridge Credit Facility are secured by a first security interest
in all of the Company's assets. The Bridge Credit Facility must be repaid at the
earlier of six months from the date of any borrowing from the Bridge Credit
Facility or upon the closing of any debt or equity offering by the Company. The
Bridge Credit Facility contains negative and affirmative covenants and
agreements which include covenants requiring the maintenance of certain
financial ratios. The Company expects to repay in full any borrowing from the
Bridge Credit Facility upon the completion of its anticipated future bank credit
facility. See "Use of Proceeds" and "Underwriting."

The Company has retained Prudential Securities Incorporated as its
investment advisor for the purpose of obtaining on behalf of the Company a
future bank credit facility of up to approximately $50.0 million. The Company
expects to obtain such bank credit facility by the end of 1997. See
"Underwriting."

The Company has treated as deferred compensation the issuance of shares of
restricted stock in September and October 1996, for future services related to
various business development initiatives and management incentives. In September
1996, the Company entered into a five-year services agreement with its Chief
Medical Officer and current director of the Company and issued 108,133 shares of
restricted Common Stock. These shares were valued at $2.77 per share or
$300,000. Of these shares, 40% vested immediately and the Company recorded a
business development charge of $120,000. The remaining 60% of the shares were
recorded as an offset in stockholders' equity as deferred compensation for
$180,000. In October 1996, the Company entered into a five-year advisory
agreement with an industry consultant and issued 125,627 shares of

34
<PAGE> 36

restricted Common Stock which vest over the life of the advisory agreement.
These shares were valued at $2.77 per share or $349,000. The Company recorded
the issuance of these shares as an offset in stockholder's equity as deferred
compensation. This deferred compensation is being amortized as the shares vest
on a pro rata basis. See "Certain Transactions."

Intangible assets consist of the Management Agreements with the Managed
Professional Associations. The Management Agreements have 40-year terms and are
being amortized over an average life of 25 years. Intangible assets represented
64.1% of the Company's total assets as of September 30, 1997. In determining the
useful life of a Management Agreement, the Company considers the operating
history and other characteristics of each practice. A principal consideration is
the degree to which the practice has demonstrated its ability to extend its
existence indefinitely. The Company will review the carrying value of its
intangible assets at least quarterly on an entity-by-entity basis to determine
if facts and circumstances exist which would suggest that the intangible assets
may be impaired or that amortization periods need to be modified. Among the
factors the Company considers in making the valuation are changes in the Managed
Professional Associations market position, reputation, profitability, and
geographic penetration. See "Risk Factors -- Risks Related to Amortization of
Intangible Value in Management Agreements" and Note 3 to Notes to Consolidated
Financial Statements.

In addition to the business assets purchased, the Company assumes certain
payables and accrued expenses in connection with its acquisitions. Generally,
the acquired tangible assets exceed the assumed liabilities. The Company has
assumed liabilities of $3.2 million, including $791,000 of long-term debt, in
connection with acquisitions (including the Block Acquisition) completed through
October 31, 1997.

Based upon the Company's anticipated capital needs for operation of its
business, general corporate purposes, the acquisition of clinics and ASCs and
repayment of certain indebtedness, management believes that the combination of
the funds expected to be provided from the Company's operations, anticipated
future bank credit facilities, seller financing and the net proceeds received
from the Offering will be sufficient to meet the Company's funding requirements
to conduct its operations and for further implementation of its growth strategy
for a period of approximately twelve months. See "Risk Factors -- Availability
of Funds for Expansion Strategy." The Company will continue to offer Common
Stock, notes or combinations thereof as consideration for certain future mergers
and acquisitions related to the growth of its LADS and currently expects for the
foreseeable future to continue to require contractual lock-up agreements and to
provide registration rights consistent with previous transactions for sellers
receiving stock in acquisitions. After the twelve-month period, or in the event
the Company's capital expenditures are greater than currently expected and to
the extent additional capital resources are needed, the Company expects to
utilize supplemental borrowings to the extent available and/or the net proceeds
from the offering of debt or equity securities.

35
<PAGE> 37

BUSINESS

OVERVIEW

The Company provides a wide range of management and administrative services
to local area delivery systems ("LADS") established by the Company. LADS are
developed to provide for integrated networks of optometrists, ophthalmologists,
ASCs and retail optical centers which offer the full continuum of eye care
services in local markets. The Company began operations in 1984, providing
management services to seven optometrists practicing at eight clinic locations.
The Company currently provides its services to 39 LADS located in 26 states
through which 5,810 Affiliated Providers deliver eye care services. Of these
Affiliated Providers, 86 are Managed Providers, consisting of 50 optometrists
and 36 ophthalmologists practicing at 57 clinic locations and five ASCs, and
5,724 are Contract Providers, consisting of 4,993 optometrists and 731
ophthalmologists practicing at over 4,300 clinic locations and 35 ASCs. The
Company signed its first managed care contract in 1988 for 18,000 patient lives
serviced through the Company's network of optometrists practicing within retail
optical locations. The Company's Affiliated Providers, in conjunction with
select national retail optical chains operating over 300 retail optical centers,
deliver eye care services under the Company's 82 managed care contracts and 12
discount fee-for-service plans covering approximately 4.0 million exclusively
contracted patient lives. Furthermore, the Company has established a nationwide
eye care provider network of over 6,700 additional Contract Providers thereby
positioning the Company to capture future managed care business in anticipated
new local markets.

THE EYE CARE INDUSTRY

The Eye Care Market. According to industry sources, expenditures for all
eye care services in the United States were approximately $31.2 billion in 1995.
Industry sources estimate $19.6 billion of these expenditures was spent on
primary care, including approximately $13.8 billion for optical goods (frames,
lenses and accessories) and $5.8 billion for primary eye care services (routine
eye exams, contact lens fitting and diagnosis/management of eye disease), while
$11.6 billion was spent on secondary and tertiary care, including $6.9 billion
for ophthalmology services (medical and surgical eye care) and $4.7 billion for
facility services (services provided by hospital facilities and ASCs).

The aging of the "baby boom" generation in the United States is expected to
result in increased spending on all eye care services. As individuals age, their
need for eye services at all levels of care -- primary, secondary and
tertiary -- increases with the onset of cataracts, glaucoma and other eye
diseases and disorders. According to the American Academy of Ophthalmology, U.S.
surgeons performed 1.4 million cataract surgeries in 1995, up from 1.2 million
procedures in 1994. Additionally, according to The Journal of the American
Medical Association, cataract surgery is the largest single Medicare
expenditure.

Technological advances and innovations are also expected to contribute to
increased spending on eye care services. Innovative procedures in the area of
refractive surgery, such as Photo Refractive Keratectomy (PRK) procedures,
utilize the excimer laser to surgically correct nearsightedness. Additionally,
enhancements in current technology and micro surgical protocols have allowed for
less invasive and disruptive outpatient ocular procedures utilizing local rather
than general anesthesia. For example, according to industry sources, PRK
procedures alone are expected to increase from 108,000 in 1996 to 945,000 in the
year 2000.

Today's Delivery of Eye Care. Eye care services in the United States are
delivered through a highly fragmented system of local providers which industry
sources estimate consisted of approximately 47,000 practicing eye care
professionals in 1996, including approximately 29,500 optometrists and 17,500
ophthalmologists. A patient's first encounter with an eye care provider
frequently occurs with an optometrist or optical retailer for some form of
primary care. According to the American Optometric Association, approximately 86
million eye exams are performed each year in the U.S., 70% of which are
performed by optometrists. During the eye exam, the optometrist typically issues
prescriptions for corrective eye wear and evaluates the need for secondary
and/or tertiary procedures. As such, the optometrist is in a natural position as
the "gate keeper" for additional eye care services, influencing in excess of
$17.0 billion in domestic eye care expenditures annually.

36
<PAGE> 38

The Company believes that patients are increasingly seeking convenient and
accessible primary eye care through retail optical centers that typically
feature extended hours of operation, convenient locations, walk-in service, wide
selections of familiar name brand eyeglass frames and contact lenses, prompt
service, lower pricing, extensive advertising and the availability of an
optometrist on the premises. While optometrists have traditionally marketed eye
wear in their offices, the proliferation of large retail optical centers has
placed pressure on an optometrist's ability to compete for patients and has
caused optometrists to increasingly affiliate with retailers by locating within,
or in close proximity to, retail optical centers. Through such affiliations,
optometrists attempt to improve their access to patients. As a result, the
Company believes primary eye care services and products are increasingly being
bundled together at the retail level making the retail optical center an
important access point for eye care delivery networks.

While some ophthalmologists provide certain primary eye care services, such
as eye exams, their main focus is on the delivery of secondary care, such as
cataract surgery, and tertiary care, such as retina/vitreous procedures,
predominantly at office-based clinics and ASCs. Because optometrists are an
important source of patients, many ophthalmologists develop informal and
non-binding referral networks in conjunction with optometrists. However, despite
these initiatives, industry sources estimate that only 4.8% of all optometrists
actually provide eye care services within the same practice as an
ophthalmologist.

Eye Care Payors. The number of people covered by managed care and
indemnity eye care insurance plans has increased significantly in recent years
and is expected to continue to increase as health insurers seek to gain a
competitive advantage by offering insurance packages that include primary eye
care coverage. Many of these insurers are HMOs presently focused on the need to
increase revenue and market share by offering a full range of health insurance
options, including coverage for primary eye care, to both commercial and
Medicare patients. According to industry sources, HMO enrollment overall has
increased from 41.0 million members in 1992 to 58.0 million members in 1995,
while HMO Medicare membership increased to approximately 3.6 million in 1995 and
is expected to reach 7.2 million by 1999. It is estimated that in 1995, 65.0% of
commercial HMO plans and 86.0% of Medicare plans offered primary eye care
benefits.

While both private and government funded insurance programs vary widely in
their coverage and benefits, these programs are expected to significantly impact
the structure of the eye care industry. As more people become eligible to
receive eye care benefits, the Company believes there will be increased
utilization of primary eye care services, which will in turn lead to an increase
in the demand for secondary and tertiary eye care services. As such, provider
networks that can deliver and effectively manage all levels of eye care are
becoming increasingly attractive to health insurance companies that are then
able to market comprehensive "carve out" eye care plans covering not only
primary eye care, but also secondary and tertiary eye care. Additionally, health
insurance companies, including HMOs and other managed care companies, are
contracting with eye care provider networks on a capitated basis to provide eye
care services as well as all related administrative and quality assurance
services. In 1995, 45% of HMO contracts with specialty care networks (i.e., eye
care, dentistry and other medical specialties) were capitated, up from 35% in
1994.

Emerging Eye Care Delivery Models. Optometrists and ophthalmologists have
traditionally provided eye care services on a fee-for-service basis, primarily
through independent, office-based practices. The fee-for-service model provides
few incentives for the efficient utilization of resources and, the Company
believes, has contributed to increases in health care costs at rates
significantly higher than inflation. Concerns over the accelerating costs of
health care have resulted in the increasing prominence of managed care,
pressuring eye care providers to deliver care at a lower cost while maintaining
quality. The Company believes that this recent focus on cost containment has
placed independent optometry and ophthalmology practices at a disadvantage.
These practices typically lack the capital to expand, develop information and
billing systems, and purchase new technologies, which often facilitate increased
patient visits and per patient revenue, improve quality of care and reduce
costs. These practices also lack the cost accounting and quality management
systems necessary to allow eye care providers to enter into capitated or
risk-sharing contracts with private third-party payors. Finally, small to
mid-sized eye care provider groups and individual practices often have higher
operating costs because overhead must be spread over a relatively small revenue
base.

37
<PAGE> 39

In order to remain competitive in the changing eye care service
environment, optometrists and ophthalmologists are increasingly seeking to
affiliate with larger organizations, which offer skilled and experienced
management, improved access to payors and their enrollees, more sophisticated
information systems, greater capital resources and more efficient cost
structures. Much of this consolidation is taking place through the formation of
physician practice management companies ("PPMs"). Eye care PPMs are growing in
response to the demand by managed care companies for larger practice groups
which can offer full service, quality eye care over a wide geographic area. This
consolidation is still in the early stages as less than 2% of optometrists and
ophthalmologists have affiliated with a PPM. However, the mere consolidation of
practices and creation of a PPM will most likely not, in itself, be sufficient
to enhance the competitive position of combined eye care professional groups.
Rather, the Company believes that a cost efficient eye care delivery system
integrated within local markets is required to effectively compete in today's
changing eye care industry.

THE VISION TWENTY-ONE LOCAL AREA DELIVERY SYSTEM ("LADS")

Developing Integrated LADS (The LADS Model)

LADS are designed to provide for integrated networks of eye care providers
which offer the full continuum of eye care services in local markets. This
continuum of eye care services begins with primary eye care services provided by
optometrists practicing at free-standing clinics, optometrists located in retail
optical locations and primary care ophthalmologists. To provide greater access
for patients seeking primary eye care, the Company affiliates with both
optometrists and retail optical centers. To facilitate this patient access, the
Company has strategic affiliations with two major national retail optical
chains, one regional optical chain and numerous smaller, independent retail
optical centers. The Company generally has an affiliated optometrist in or
adjacent to each affiliated retail optical center that is located within a LADS.

Once patients have initially accessed a LADS to obtain primary eye care
services, they are well positioned to move within the LADS to the next
appropriate level of eye care. The Company affiliates with general
ophthalmologists and cataract surgeons that provide secondary eye care, with
subspecialty ophthalmologists (including subspecialties such as oculoplastics,
retina/vitreous and cornea) that provide tertiary eye care, and with ASCs that
provide facility services. LADS are especially attractive to managed care
companies because the Company's Affiliated Providers are able to deliver all
levels of eye care to the managed care plan's members.

Each Affiliated Provider generally begins as a fully credentialed Contract
Provider who delivers eye care services to members of the Company's contracted
managed care plans. The Company intends to acquire the business assets, employ
the non-professional personnel of and enter into Management Agreements with
select Contract Providers who then become Managed Providers. To date, the
Company has successfully acquired the business assets of 63 Contract Providers.
In addition, the Company intends to add optometry clinics located within retail
optical centers of leading national retail optical chains. To date, the Company
has added five optometry clinics located within retail optical centers and has
reached a tentative agreement with a leading optical retailer to add at least 20
additional internally developed optometry clinics throughout the first quarter
of 1998.

The successful integration of optometrists, ophthalmologists and ASCs is a
key component to the development of each LADS. The integration of Affiliated
Providers is accomplished through the implementation of proprietary quality
assurance, management and governance programs (the "V-21 TEAM CARE" program).
The V-21 TEAM CARE quality assurance program is administered by the Company's
Credentialing Committee, Clinical Protocol and Risk Management Committee, Peer
Review Committee, Outcome

38
<PAGE> 40

Assessment and Utilization Review Committee and a Medical Advisory Board whose
members include select Affiliated Providers. The V-21 TEAM CARE quality
assurance program provides for (i) the review and implementation of technology
standards and clinical protocols for the provision of high quality and cost
effective eye care services, and (ii) continuing assessments as to the quality
of facilities, equipment, record keeping, physician credentials, utilization
trends and clinical outcomes. The integration of Managed Providers is
accomplished through the V-21 TEAM CARE management and governance programs. The
V-21 TEAM CARE management program includes (i) development of LADS-specific and
practice-specific strategic plans, (ii) integration of operations, personnel,
facilities and equipment, (iii) consolidation of specialty and ancillary
services and (iv) coordination of marketing initiatives. The V-21 TEAM CARE
governance program establishes an active local governance structure consisting
of Practice Advisory Councils, Local Advisory Councils and a National Appeals
Council. These councils are designed to provide for substantial involvement and
clinical leadership by select Managed Providers in the local operations,
physician relationships and business development plans within each practice and
LADS.

Increasing Patient Revenue and Cost Efficiencies

Managed care initiatives are implemented for each LADS to enable the
Affiliated Providers to gain incremental market share and increased patient
visits. In conjunction with its affiliated retail optical centers and affiliated
optometrists, the Company jointly markets regional primary eye care networks to
managed vision plans. In addition, the Company markets regional networks of
affiliated ophthalmologists and ASCs to managed care plans for the provision of
medical and surgical eye care. More importantly, the Company is able to market
each of its LADS to managed care plans seeking to contract with integrated
networks of optometrists, ophthalmologists, retail optical centers and ASCs that
can offer all primary, secondary and tertiary eye care services pursuant to
comprehensive "carve out" eye care plans.

The Company also seeks to increase patient visits for each LADS through
cooperative marketing initiatives. The Company assists in developing cooperative
marketing campaigns between affiliated optometrists and optical retailers to
attract incremental fee-for-service primary eye care patients. The Company and,
in some cases, managed care companies sponsor extensive free community screening
activities. The Company has also initiated outreach programs through its Managed
Providers, such as providing primary eye care to long-term care facilities and
more complicated tertiary care to rural areas where such care might otherwise
not be available.

The Company also seeks to generate incremental per patient revenue for its
Managed Providers by providing access to new eye care services and products for
its LADS. This may be as a core service for fee-for-service patients or as a
value-added option for managed care patients over and above their insured
benefit. Patients are educated at the primary eye care level on new products and
procedures, including refractive surgery, oculoplastic procedures, pediatric
services, eye wear upgrades, specialty contact lenses and accessories. By
facilitating the addition of new eye care services and products, the Company is
able to leverage existing facilities and equipment to generate incremental per
patient revenue for the Company's Managed Providers. For example, the Company's
Chief Medical Officer, Richard Lindstrom, M.D., a world renowned refractive
surgeon, is assisting in the development of refractive surgery initiatives for
each LADS.

Finally, the Company develops and implements a practice development program
to increase productivity and efficiency thereby reducing costs per patient. The
practice development program includes re-engineering patient flow, establishing
clinical protocols, providing physician development programs and practice
governance, monitoring patient feedback, and improving office design. The
Company has exclusively retained BSM Consulting Group, a highly respected leader
in ophthalmology consulting, to assist the Company in developing these practice
development programs. Additionally, the Company will continue to consolidate the
back office functions of Managed Providers, including payroll, benefit
administration, accounts payable, accounts receivables, purchasing and general
administrative services, to gain further efficiencies for its LADS.

The Company's ability to successfully manage and develop the Managed
Providers will depend on its ability to increase patient revenue and achieve
cost efficiencies for the Managed Professional Associations. The Company's
future results of operations will depend on the Company's ability to
successfully manage and

39
<PAGE> 41

develop its Managed Providers as the Company's management fees are directly
related to the revenues and expenses of the Managed Professional Associations.
See "Risk Factors -- Reliance on Affiliated Providers", "Management's Discussion
and Analysis of Financial Condition and Results of Operations" and "Business --
Management Agreements."

Expanding the LADS Model to New Markets

The Company intends to continue expanding its LADS model to new markets.
The Company seeks to enter select markets where (i) the Company has a strategic
affiliation with a leading corporate retail optical provider, (ii) there is an
existing network of optometrists and ophthalmologists that the Company can
affiliate with, and/or (iii) the Company is able to obtain a managed care
contract that provides an initial patient base. Other considerations include an
analysis of the competitive environment, the legal and regulatory environment as
it pertains to delivery of eye care services and the level of managed care
penetration. The Company also intends to leverage existing managed care
relationships to expand into new markets where such managed care providers have
established a significant presence.

The Company's practice acquisition team continuously searches for
Affiliated Providers to develop additional LADS in new markets and to supplement
the eye care services offered by its LADS in existing markets. The Company's
acquisition team meets with selected acquisition candidates within a particular
local market area and evaluates such acquisition candidates on the basis of
their clinical reputation, quality of care, provider credentials, market share,
profitability and mix of payors. The Company's acquisition team also bases its
acquisition decisions on the strengths of the candidate's management team, the
stability of the practice, the existence of an ASC or optical dispensary, the
compatibility of the candidate's work philosophy and values, the potential to
expand the types of eye care services provided and the potential to increase
patient access to the candidate through the Company's managed care and practice
management initiatives. The Company's goal is to affiliate with well-respected
practices and intends to utilize such practices to assist in identifying
additional acquisition candidates for the LADS. In determining the consideration
for each acquisition, the Company primarily evaluates the acquisition criteria
along with projected future cash flows for the practice and the projected
management fee to be received.

The Company's ability to successfully expand the LADS model to new markets
will depend on a number of factors including the ability to obtain acceptable
financing to fund expansion, identify and consummate suitable acquisitions,
successfully integrate the acquisitions and effectively expand its managed care
relationships into such local markets. See "Risk Factors -- Risk Associated With
Expansion Strategy."

40
<PAGE> 42

LADS LOCATIONS

The following table sets forth the location of and certain data regarding
the Company's existing LADS as of October 31, 1997:

<TABLE>
<CAPTION>
AFFILIATED PROVIDERS(1)(2) AFFILIATED MANAGED
--------------------------- RETAIL(1)(2) CONTRACT
LOCAL AREA MDS ODS ASCS OPTICAL LOCATIONS LIVES(1)(3)
- ---------- ------ ------ ------- ----------------- -----------
<S> <C> <C> <C> <C> <C>
Tampa Bay.......................... 85 109 17 20 851,000
Miami.............................. 47 64 4 27 394,000
Orlando............................ 39 42 8 12 117,000
Jacksonville....................... 23 3 3 3 139,000
Tallahassee........................ 2 7 1 4 4,000
Chicago............................ 61 -- -- 18 9,000
Phoenix............................ 27 13 4 12 107,000
Tucson............................. 19 3 3 -- 50,000
Minneapolis........................ 4 11 -- -- --
Long Island........................ 73 1 -- 4 218,000
New Orleans........................ -- 6 -- 13 --
--- --- -- --- ---------
Total.................... 380 259 40 113 1,889,000
=== === == === =========
</TABLE>

- ---------------

(1) Excludes over 11,000 Contract Providers who became affiliated with the
Company pursuant to the Block Acquisition, 5,171 of which currently provide
managed vision care services nationwide to over 2.1 million exclusively
contracted patient lives.
(2) Excludes approximately 935 Contract Providers in other markets where the
Company is beginning to conduct managed care business.
(3) Represents HMO members exclusively contracted to the Company and does not
include the managed care patients directly contracted to the Affiliated
Providers or any fee-for-service patients of Managed Providers.

LADS MANAGEMENT AND SUPPORT SERVICES

The Company provides all necessary management and support services to
develop and expand its LADS. The Company employs over 97 team members at its
corporate headquarters and approximately 442 team members located within the
LADS to provide a wide range of management and support services, including
information services, managed care development, practice integration and
development, administration, credentialing, provider relations, outcome
assessment, human resources, financial management, marketing and communications,
member services, and purchasing.

Information Services. The Company's management information system combines
current computer technology with proprietary software developed over the past
ten years that integrates front-end practice management, back-end corporate
management, managed care administration, accounting, and marketing. The Company
utilizes its management information system to coordinate patient flow and
administer patient documentation; track patient inquiries/problems from
inception to resolution; support credentialing of Affiliated Providers;
administer managed care contracts, including billing, collection and claims
processing; and organize marketing initiatives. Furthermore, the Company's
proprietary software allows it to effectively manage sophisticated risk-sharing
arrangements with Affiliated Providers and third-party payors, administer
disease state management initiatives, and track and assess utilization trends.
By electronically integrating all aspects of LADS management, the Company is
able to decrease duplication of efforts, enhance quality control, and maximize
cost efficiencies.

Managed Care Development. The Company assists its Affiliated Providers in
obtaining both fee-for-service and capitated managed care contracts. After
analyzing competitive market demographics and managed care penetration, the
Company identifies potential managed care relationships. The Company's managed
care development team responds to requests for proposals (RFPs) from selected
payors and works with HMOs to develop custom eye care benefit programs and
services for their members.

41
<PAGE> 43

Practice Integration and Development. The Company assists in developing
the practices of its Managed Providers and the implementation of long-term
strategic initiatives to increase revenue and enhance operating efficiencies.
The Company has entered into exclusive consulting agreements with BSM Consulting
Group, a leading professional practice development consultant, and its chief
executive officer, Bruce S. Maller, to assist with the Company's practice
integration and development efforts. The Company's regional operating personnel
assist with implementing practice integration and development initiatives and
measure improvements achieved through such efforts.

Administrative Services. The Company provides certain administrative
services to its Affiliated Providers, including billing, collections,
eligibility verification and claims processing. The Company handles over 300,000
claims per year, including Medicare and Medicaid. The Company's administrative
services department utilizes sophisticated information systems to provide claims
processing support and submit claims electronically to payors in order to reduce
time for reimbursement.

Credentialing. The Company provides credentialing services according to
national standards as set forth by the National Committee for Quality Assurance
("NCQA") by which all health plans are measured for compliance with quality
assurance initiatives. All Affiliated Providers are fully credentialed. The
credentialing process includes collection of data from Affiliated Providers in
the form of an application; verification of licenses, insurance and education;
review of the Affiliated Provider's file in the National Practitioner Data Bank;
computerized management of all Affiliated Provider credentials and renewals; and
approval by an Affiliated Provider peer group. Several managed care companies
have awarded the Company "Delegated Provider" status. Delegated Provider status
is awarded only after a managed care company has audited credentialing policies
and procedures as well as each health care provider's patient files and has
determined each provider is in compliance with NCQA standards. The Company
re-credentials its Affiliated Providers every two years.

Provider Relations. The Company actively maintains its relationships and
communication with all Affiliated Providers. The Company has established
Provider Relations Representatives who educate, assist and support Affiliated
Providers and their clinic staff with respect to all their managed care needs.
Provider Relations Representatives are available 24-hours a day through a
toll-free telephone support number.

Outcome Assessment. The Company provides outcome assessment services to
its Managed Providers, including custom developed protocols and disease state
management. Through the measurement of outcomes, the Managed Providers are able
to evaluate the effectiveness of clinical initiatives. Certain of the Company's
Managed Providers have been selected as a beta site for the implementation of a
study developed by Johns Hopkins University School of Medicine to evaluate the
need for and outcome of cataract surgery. The Company is currently developing
additional disease management modules for laser and glaucoma surgery.

Human Resources. The Company provides human resource services to its
Managed Providers, including recruitment of optometrists, ophthalmologists and
clinic staff as well as administration of payroll, benefits and paid time off
programs. In addition, the Company develops training programs to enhance the
management and administrative skills of the clinic staff employed by the Company
and maintains management and administrative protocols and policies.

Financial Management. The Company provides financial management services
to its Managed Providers, including the development of budgets, implementation
of financial controls, capital budgeting and initiation of cost-containment
measures designed to improve operating and financial performance. The Company
also provides comprehensive financial analysis and cash management, tax and
accounting services.

Marketing and Communications. The Company's marketing department works in
conjunction with an outside advertising agency to create and produce marketing
materials supporting the development initiatives of its LADS and Managed
Providers. The Company's communications department develops and produces
corporate newsletters and works with the Company's Managed Providers and clinic
staff to produce feature news articles, press releases and related promotional
materials.

Member Services. The Company's Member Services Representatives provide
customer service for issues related to the Company's managed care business.
Member Services Representatives expedite the

42
<PAGE> 44

resolution of managed care service issues and track member service inquiries in
a database maintained by the Company. Statistics are developed and tracked to
identify trends in specific member service issues.

Purchasing. The Company purchases certain clinical and office supplies and
equipment for its Managed Providers. The Company has developed purchasing
arrangements and relationships to facilitate more efficient bulk purchasing and
delivery.

MANAGEMENT AGREEMENTS

The Company intends to continue to acquire the business assets of select
optometry and ophthalmology practices as it establishes and develops LADS and
expands into new markets. In conjunction with acquiring the assets of eye care
practices, the Company has entered, and will continue to enter, into long-term
business management agreements with the professional associations conducting
such practices (the "Managed Professional Associations") to provide management
and administrative services to Managed Professional Associations, as well as
managed care business development and administration. The Company also expects
to acquire ASC facilities.

The Company enters into Management Agreements with professional
associations managed by the Company, the initial term of which is typically 40
years. Under significantly all of the Company's Management Agreements, the
management fee ranges from 24% to 37% of the Managed Professional Associations'
gross revenues after deducting from such revenues all expenses of the clinic
other than those related to shareholders of the Managed Professional
Associations. The practice management fees earned by the Company pursuant to
these Management Agreements fluctuate depending on variances in revenues and
expenses of the Managed Professional Associations.

Under the Management Agreements, the Company is obligated, among other
things, to (i) provide, maintain and repair office and clinical equipment for
the Managed Professional Association, (ii) order and purchase all reasonable
supplies on behalf of the Managed Professional Association, (iii) provide
appropriate support services for the operation of the Managed Professional
Association's offices, (iv) assist the Managed Professional Association in
establishing and implementing quality assessment, risk management and
utilization review programs, (v) employ all management, clinicians,
administrative, clerical, secretarial, bookkeeping, accounting, payroll, billing
and collection personnel, and other nonprofessional personnel as necessary, (vi)
assist the Managed Professional Association in negotiating managed care
contracts, (vii) bill and collect professional and other fees on behalf of the
Managed Professional Association, (viii) establish and administer accounting
procedures, controls and systems for the financial books and records relating to
the business of the Managed Professional Association, (ix) monitor and maintain
the files and records of the Managed Professional Association and (x) provide
such management services as are necessary and appropriate for the day-to-day
administration of the business aspects of the Managed Professional Association.

The Management Agreements provide that the Managed Professional Association
is responsible for, among other things, (i) hiring, supervising, and directing
certain of the Managed Professional Association's professional employees, (ii)
adopting a peer review/quality assurance program and (iii) maintaining
appropriate worker's compensation, professional and comprehensive general
liability insurance.

43
<PAGE> 45

Pursuant to the Management Agreements, a Practice Advisory Council,
consisting of equal representation for the Company and the Managed Professional
Association, is responsible for (i) reviewing and making recommendations
regarding any renovation and expansion plans and capital equipment expenditures
relating to the Managed Professional Association's facilities, (ii) reviewing
and making recommendations regarding all marketing and public relations
services, (iii) reviewing and making recommendations regarding the fee schedule
and collection policies for the Managed Professional Association, (iv) approving
new non-professional ancillary services provided by the Managed Professional
Association, (v) approving and making recommendations regarding agreements with
institutional care providers and third party payors which are not in accordance
with guidelines established by the applicable Local Advisory Council (described
below), (vi) assisting the Managed Professional Association in developing
long-term strategic planning objectives, (vii) making recommendations regarding
the priority of major capital expenditures, (viii) recommending to the Managed
Professional Association the number and type of health care personnel required
for the efficient operation of the Managed Professional Association, (ix) making
recommendations regarding fee disputes, (x) approving the decision to terminate
higher level non-professional personnel employed by the Company who are
performing services at the Managed Professional Associations's offices, (xi)
approving any office relocation or expansion and the establishment of any new
ASC or optical business of the Managed Professional Association and (xii)
adopting, approving and amending the Managed Professional Association's budget.

Local Advisory Councils consist of Company representatives and delegates
from Managed Professional Associations located in each region. Each Managed
Professional Association is entitled to appoint one delegate to the Local
Advisory Council and the Company is entitled to appoint two delegates who will
have voting power equal to the combined voting power of all delegates appointed
by the Managed Professional Association. The Local Advisory Council makes
recommendations to the Company and the Managed Professional Associations as to
the regional policy and strategy issues within the region and as to (i) the
establishment of private pay fee schedules where permitted by law, (ii) the
establishment of guidelines for agreement with institutional health care
providers and third party payors and (iii) any agreement with an institutional
health care provider or third-party payor which materially differs from
guidelines established by the Local Advisory Council. The Local Advisory Council
may also select commercial carriers for professional, casualty and comprehensive
general liability insurance for the Managed Professional Associations in the
region. Finally, the Local Advisory Council considers and determines any issue
upon which the Practice Advisory Council is deadlocked, except for the
determination of the budget of each Managed Professional Association. Decisions
of the Local Advisory Council may be appealed to the National Appeal Council
consisting of one delegate appointed by each of the Local Advisory Councils and
two delegates appointed by the Company.

Each Managed Professional Association has the sole authority to set its
fees for patients, subject to obligations pursuant to managed care contracts. In
connection with managed care contracts the Managed Professional Associations may
contract directly with third-party payors. Otherwise, the managed care contracts
are entered into by the Company and at the option of the Managed Professional
Association the practice can be part of the provider group offered by the
Company in connection with the contract. See "-- Managed Care Contracts."

In accordance with its standard Management Agreement entered into with each
Managed Professional Association, the Company is responsible for, and authorized
to bill, in the Managed Professional Association's name, patients, third-party
payors and other fiscal intermediaries for all billable health care services
rendered by the practice. The Company is responsible for collecting and
receiving all payments for such health care services. Collections from
receivables are deposited by the Company into a cash collateral account from
which all amounts for the payment of expenses and other obligations are drawn.
In the event that any payments for billable services are received by the Managed
Professional Association or its employed professionals, such entities and
individuals are obligated to transfer such funds to the cash collateral account.
The Company has been provided a security interest in the cash collateral account
whereupon the Company is permitted, except where specifically limited by the
Management Agreement, to borrow against the account as well as against
receivables of the practice. The Company has the power to endorse checks payable
to the Managed

44
<PAGE> 46

Professional Association. The Company continuously monitors outstanding accounts
receivable and is authorized to take certain collection actions, including
extending the time for payment of accounts, and jointly decides with the Managed
Professional Association concerning any decision to undertake extraordinary
collection efforts. The Company has the obligation to fund shortages in the
account as necessary to pay practice management expenses which must be paid as
they become due. The Company reconciles the results of its billing and
collection efforts for its Managed Professional Associations on a quarterly
basis.

The Management Agreements are terminable by either party if the other party
materially defaults in the performance of any of its obligations under the
Management Agreement and such default continues for a certain period of time
after notice, if the other party files a petition for bankruptcy or upon the
occurrence of other similar events. The Management Agreements may also be
terminated by mutual agreement in writing.

During the term of the Management Agreement, the Company and the Managed
Professional Association agree not to compete with each other in the business of
providing management services to professional associations and agree not to
disclose certain confidential and proprietary information regarding the other.
The Management Agreements require the Company and the Managed Professional
Associations to indemnify and hold harmless the other party against claims
resulting from negligent or intentional acts or omissions.

The Managed Professional Association is required under each Management
Agreement to enter into written employment agreements with each of its
professional employees containing covenants not to compete with the Managed
Professional Association in a specified geographic area for a specified period
of time after termination of the employment agreement. The employment agreements
also require the payments of significant liquidated damages in the event of a
default by shareholders of the Managed Professional Associations and certain
employees of the Managed Professional Associations, early termination by such
shareholders and key non-shareholder professionals, or a breach of the covenant
not to compete.

Upon the expiration of the term of the Management Agreement, or in the
event that the Managed Professional Association breaches the Management
Agreement, and to the extent permitted by law, the Managed Professional
Association is obligated to purchase the related assets owned by the Company
(including the unamortized portion of the Management Agreement) at book value
and assume all related liabilities. For a period of five years from the date of
the Management Agreement, the shareholders of the Managed Professional
Association are required to personally guarantee any note provided in connection
with the repurchase. If the Company breaches the Management Agreement, the
Managed Professional Association has the option to purchase the related assets
owned by the Company pursuant to terms described in the Management Agreement.

STRATEGIC AFFILIATIONS WITH RETAIL OPTICAL COMPANIES

The Company has considered it important to enter into affiliations with
retail optical companies based on their market position, name recognition,
quality of service, accessibility through extended hours, geographic
distribution, and compatibility of management and facilities with the Company's
primary eye care objectives. The Company currently has contractual affiliations
with ECCA Managed Vision Care, Inc. and For Eyes Managed Care, Inc. which have a
combined total of over 300 retail locations in 48 cities in the United States.

Under the Company's strategic relationship with ECCA, the Company makes
available its LADS to provide the full continuum of high quality, cost effective
eye care services to customers at ECCA retail optical locations (Eyemasters,
Binyons and VisionWorks) in close proximity to the LADS. Further, the Company
seeks to expand revenues at ECCA through increasing managed care business which
require easy accessibility to optical products. In return, the Company believes
its strategic affiliations with retail optical companies will assist the LADS in
increasing their managed care market share. The Company believes most HMOs
strongly prefer a recognized retail optical company as the contracted vendor for
eye wear. By "bundling" retail optical services with LADS that provides
comprehensive eye care services at the primary, secondary and tertiary levels,
the Company believes it significantly improves its joint opportunity with ECCA
to obtain managed care business. The Company expects its retail optical
affiliates to serve increasingly as an important access point to its LADS for
fee-for-service and primary care patients. Further, the Company's relationship
with ECCA has resulted in the addition of five internally developed Managed
Provider optometry clinics adjacent to five

45
<PAGE> 47

ECCA retail optical locations, along with a tentative agreement to add at least
an additional 20 similar clinics throughout the remainder of 1997. These
arrangements are expected to further increase the above described benefits
sought by both parties in connection with their affiliation.

The Company is a joint venture partner in a general partnership called
"Vision 21 Plus" in which the Company and For Eyes each have a 50% interest. The
objective of the joint venture is to maximize opportunities for the Company in
managed eye care by securing contracts and providing comprehensive, fully
integrated eye care products and services to health care organizations and
self-funded employer groups. The general benefits to For Eyes in its
relationship with the Company are similar to that derived by ECCA. Under the
joint venture agreement, Vision 21 Plus is to enter into, perform and carry out
contracts and agreements related to the development of managed eye care business
and to explore opportunities to develop certain ancillary eye care businesses.

MANAGED CARE CONTRACTS

As an increasing percentage of the population is covered by managed care
organizations, the Company believes that its success will be, in part, dependent
upon its ability to negotiate managed care contracts with HMOs, health insurance
companies and other third-party payors pursuant to which services will be
provided on a risk-sharing or capitated basis. The Company also has contracts
for the provision of certain financial and administrative services related to
its indemnity insurance and fee-for-service plans. Managed care contracts are
typically for one year terms that renew automatically and the contracts are
terminable by either party on sixty days notice.

The Company's typical contracts with third-party health benefits payors
(insurance companies and HMOs) provide that the Company will arrange and pay for
eye care services that are needed by the payor's members in exchange for a fixed
amount per patient per month or a percentage of the premiums paid on behalf of
the patient, without regard to the volume of services that the patient requires.
Under these arrangements, the Company accepts the risk that the cost and
utilization of services may exceed expectations in exchange for its ability to
profit if cost and utilization are kept below expected levels. The Company can
directly benefit by effectively managing costs and utilizing its relationships
with its Affiliated Providers. Because the Company assures the credentials of
the providers, establishes quality and utilization control systems and
implements payment arrangements with the providers, third-party payors are able
to use their limited resources in other areas where they have greater expertise.

RECENT DEVELOPMENTS

In October 1997, the Company closed in escrow the October Acquisitions
resulting in the acquisition of the business assets of two ophthalmology
clinics, two optical dispensaries, and one ASC located in Brandon, Florida and
Minneapolis, Minnesota. Concurrently with the acquisitions, the Company entered
into long-term Management Agreements with the related professional associations
employing three optometrists and five ophthalmologists.

In September 1997, the Company closed in escrow the September Acquisitions
resulting in the acquisition of the business assets of four ophthalmology
clinics and two optical dispensaries located in Tampa, Florida, Tucson, Arizona
and Setauket, New York. Concurrently with the September Acquisitions, the
Company entered into long-term Management Agreement with the related
professional associations employ-

46
<PAGE> 48

ing eight ophthalmologists. Additionally, the Company closed in escrow the
acquisition of substantially all the business assets of a managed care company
servicing two capitated managed care contracts covering over 134,000 patient
lives.

GOVERNMENTAL REGULATIONS

General Overview

The health care industry is highly regulated, and there can be no assurance
that the regulatory environment in which the Company operates will not change
significantly and adversely in the future. In general, regulation of health care
providers and companies is increasing.

There are currently several federal and state initiatives designed to amend
regulations relating to the provision of health care services, the access to
health care, the costs of health care and the manner in which health care
providers are reimbursed for their services. However, it is not possible to
predict whether any such initiatives will be enacted as legislation or, if
enacted, what their form, effective dates or impact on the Company will be.

Every state imposes licensing requirements on ophthalmologists,
optometrists and opticians ("Practitioners") and on their facilities and
services. In addition, many states require regulatory approval, including
certificates of need, before establishing certain types of health care
facilities, offering certain services or making expenditures in excess of
statutory thresholds for health care equipment, facilities or programs. The
execution of a management agreement with a Practitioner group currently does not
require any health care regulatory approval on the part of the Company or the
Practitioner group. However, in connection with the expansion of existing
operations and the entry into new markets, the Company and its associated
Practitioner groups may become subject to additional regulation.

Much of the revenue of the Affiliated Providers is derived from payments
made by government-sponsored health care programs (principally Medicare). These
programs are subject to substantial regulation. Any change in reimbursement
regulations, policies, practices, interpretations or statutes that places
material limitations on reimbursement amounts or practices could adversely
affect the operations of the Company. Increasing budgetary pressures at both the
federal and state level and the rapidly escalating costs of health care and
reimbursement programs have led, and may continue to lead, to significant
reductions in government reimbursements for certain medical charges and
elimination of coverage for certain individuals under these programs. Federal
legislation could result in a reduction of Medicare funding. The Company cannot
predict at this time whether or when any of such proposals will be adopted or,
if adopted and implemented, what effect such proposals would have on the
Company. Medicare rates for physician services include a work-related component
and a practice expense component. The agency that administers the Medicare
program is required by law to institute a resource-based method for establishing
the practice expense component. The initial proposal to implement this mandate
would result in a redistribution of Medicare funds from specialists and surgeons
to primary care physicians. There are two options currently being considered.
The first would increase optometrists' Medicare revenue by 11% and decrease
ophthalmologists' revenue by 6%. The second would increase optometrists'
Medicare revenue by 11% and decrease ophthalmologists' revenue by 15%. Recently
passed Medicare budget legislation delays implementation of the resource-based
method of paying for physician practice expenses until 1999, except that rates
for certain services typically provided outside a physician's office will be
reduced in 1998 where the practice expense component of the rate exceeds 110% of
the work component. The legislation also calls for a phase in that would be
completed in the year 2002. There can be no assurance that payments under
governmental programs will remain at levels comparable to present levels. In
addition, funds received under these programs are subject to audit with respect
to the proper billing for physician services and accordingly, retroactive
adjustments of revenue from these programs may occur. See "Risk
Factors -- Governmental Regulations."

47
<PAGE> 49

Health Care Regulations

Business arrangements between business associations that provide practice
management services and ophthalmologists and optometrists are regulated
extensively at the state and federal levels, including regulation in the
following areas:

Corporate Practice of Optometry and Ophthalmology. The laws of many
states prohibit corporations that are not owned entirely by eye care
professionals from employing eye care professionals, having control over
clinical decision-making, or engaging in other activities that are deemed
to constitute the practice of optometry and ophthalmology. The Company
contracts with professional associations (which are owned by one or more
licensed optometrists or ophthalmologists), which in turn employ or
contract with other licensed optometrists or ophthalmologists to provide
professional services. The Company performs only non-professional services,
does not represent to the public or its customers that it provides
professional eye care services, and is not exercising influence or control
over the practices of the eye care practitioners employed by the
professional associations. Furthermore, the Management Agreements between
the Company and the Professional Associations specifically provide that all
decisions required by law to be made by professionals shall be made by the
professionals. While certain shareholders of such Managed Professional
Associations which perform the practice of medicine or optometry are also
involved in Company management, they act independently when making
decisions on behalf of their professional corporations and the Company has
no right (and does not attempt to exercise any right) to control those
decisions.

Fee-Splitting and Anti-kickback Laws.

State Law. Most states have laws prohibiting paying or receiving any
remuneration, direct or indirect, that is intended to induce referrals for
health care products or services. Many states also prohibit "fee-splitting"
by eye care professionals with any party except other eye care
professionals in the same professional corporation or practice association.
In most cases, these laws apply to the paying of a fee to another person
for referring a patient or otherwise generating business, and do not
prohibit payment of reasonable compensation for facilities and services
(other than the generation of business), even if the payment is based on a
percentage of the practice's revenues.

The Florida fee-splitting law prohibits paying or receiving any
commission, bonus, kickback, or rebate, or engaging in any split-fee
arrangement in any form for patient referrals or patronage. According to a
Florida court of appeals decision interpreting this law, it does not
prohibit a management fee that is based on a percentage of gross income of
a professional practice. However, the Florida Board of Medicine recently
issued an order determining that a management fee charged by a publicly
held national management company based upon a percentage of revenue
constitutes illegal fee-splitting. The case before the Board involved
arrangements that are different from the Company's arrangements in certain
respects, including the fact the management fee was based on a percentage
of the increase in net revenues of the practice after the management
arrangement commenced. The ruling is limited to the facts presented to the
Board. The Board's statement of the rationale for its opinion is unclear as
to whether it would also apply to arrangements similar to those utilized by
the Company. The Board of Medicine's order has been stayed to permit an
appeal to a Florida district court of appeals. The appellate court could
reverse or affirm the Board's opinion, or clarify that it is correct only
in limited situations. If the Board's order is allowed to stand without
clarification, there is a risk that the Company's arrangements with
physicians in the State of Florida could be determined to be in violation
of the fee-splitting statute. Since the same statute applies to
optometrists, a risk would also exist as to the Company's arrangements with
them. The Company's management arrangements provide that if they are
determined in the future to violate any law, the parties agree to use their
best efforts to modify the arrangement to approximate as closely as
possible, consistent with law, the economic position of the parties prior
to the modification and, if they are unable to reach agreement on a new
arrangement, to submit the matter to arbitration for the purpose of
reaching an equitable alternative arrangement. In the event the form of
Management Agreement utilized by the Company in Florida is ever determined
to be in violation of state law, and the parties or the arbitrator are
unable to arrive at a satisfactory modification to the Management
Agreement, there could be a material adverse impact on the Company's
current Florida Management Agreements

48
<PAGE> 50

and therefore, the Company's results of operations. On a pro forma basis
for 1996 the revenues under the Florida Management Agreements represented
approximately 5.0% of the Company's total revenue.

An Arizona law prohibits "dividing a professional fee" only if it is
done "for patient referrals," similar to the language of the Florida law.
Other states, such as Illinois and New York, have fee-splitting statutes
that have been interpreted to prohibit any compensation arrangements that
are based on a percentage of a physician's revenue, and such laws shall
preclude the Company from using its typical management arrangements at such
time as Managed Provider relationships are created in those states.

Federal Law. Federal law prohibits the offer, payment, solicitation
or receipt of any form of remuneration in return for the referral of
patients covered by federally funded health care programs such as Medicare
and Medicaid, or in return for purchasing, leasing, ordering or arranging
for the purchase, lease or order of any item or service that is covered by
a federal program. For this reason, the Management Agreements provide that
the Company will not engage in direct marketing to potential sources of
business, but will only assist the practices' personnel in these endeavors
by providing training, marketing materials and technical assistance.

Advertising Restrictions. Many states, prohibit eye care
professionals from using advertising which includes any name other than
their own, or from advertising in any manner that is likely to lead a
person to believe that a non eye care professional is engaged in the
delivery of eye care services. The Management Agreements provide that all
advertising shall conform to these requirements.

Limited Health Service Plans and Third Party Administration
Licensing. Some states permit managed care networks that assume insurance
risk, but only as to a limited class of health services, to be licensed as
limited health service plans, and thereby avoid the need to be licensed as
an insurer or HMO even if its arrangements are with individual subscribers
or self-insured employers. Additionally, some states require licensing for
certain companies providing various administrative services in connection
with managed care business. The Company intends to seek such licenses in
those states where it is available for eye care networks. However, the
Company may not be able to meet such requirements in all cases and should
this result in the future in the loss of any material business
(individually or in the aggregate) it could have a material adverse effect
on the Company's business and operating results.

Physician Incentive Plans. Medicare regulations impose certain
disclosure requirements on managed care networks that compensate eye care
providers in a manner that is related to the volume of services provided to
Medicare patients (other than services personally provided by the
provider). If such incentive payments exceed 25 percent of the provider's
potential payments, the network is also required to show that the providers
have certain "stop loss" financial projections and to conduct certain
Medicare enrollee surveys.

"Any Willing Provider" Laws. Some states have adopted, and others are
considering, legislation that requires managed care networks to include any
provider who is willing to abide by the terms of the

49
<PAGE> 51

network's contracts and/or prohibit termination of providers without cause.
Such laws would limit the ability of the Company to develop effective
managed care networks in such states.

The several laws described above have civil and criminal penalties and have
been subject to limited judicial and regulatory interpretation. They are
enforced by regulatory agencies that are vested with broad discretion in
interpreting their meaning. The Company's agreements and activities have not
been examined by federal or state authorities under these laws and regulations.
For these reasons, there can be no assurance that review of the Company's
business arrangements will not result in determinations that adversely affect
the Company's operations or that certain agreements between the Company and eye
care providers or third party payors will not be held invalid and unenforceable.
In addition, these laws and their interpretation vary from state to state. The
regulatory framework of certain jurisdictions may limit the Company's expansion
into, or ability to continue operations within, such jurisdictions if the
Company is unable to modify its operational structure to conform with such
regulatory framework. Any limitation on the Company's ability to expand could
have an adverse effect on the Company. See "Risk Factors -- Government
Regulations."

COMPETITION

The health care industry is highly competitive and subject to continual
changes in the method in which services are provided and the manner in which
health care providers are selected and compensated. The Company believes that
private and public reforms in the health care industry emphasizing cost
containment and accountability will result in an increasing shift of eye care
from highly fragmented, individual or small practice providers to larger group
practices or other eye care delivery services. Companies in other health care
industry segments, such as managers of other hospital-based specialties or
currently expanding large group practices, some of which have financial and
other resources greater than those of the Company, may become competitors in
providing management to providers of eye care services. Increased competition
could have a material adverse effect on the Company's financial condition and
results of operations. The basis for competition in the practice management area
includes service, pricing, strength of the Company's delivery network (where
applicable), strength of operational systems, the degree of cost efficiencies
and synergies, marketing strength, managed care expertise, patient access and
quality assessments and assurances programs. The Company also competes with
other providers of eye care services for managed care contracts, many of which
have greater financial and other resources than the Company. These include HMOs,
PPOs and private insurers. The basis for competition in the managed care
organization area includes administrative strength, size and quality of network,
marketing abilities, informational systems and operating efficiencies. The
future success of the Company will be directly related to its ability to expand
the managed eye care delivery network geographically, attract reputable
providers, expand the scope of services offered by associated practices (i.e.
not only optical and optometric, but also ophthalmological), and dedicate
resources to an active sales team focused exclusively on the Company's sales
effort.

EMPLOYEES

In most circumstances, at the time of its integration into the Company's
managed operations, each Managed Provider enters into an employment agreement
with his or her respective professional association. The employment agreements
with shareholder professionals are for an initial term of five years and for
non-shareholder professionals are for an initial term of two years. Shareholder
professionals are obligated to work for the full five-year term unless the
professional employment is terminated for reasons such as the professional's
death or disability or the occurrence of certain events outside the
professional's control. The professional employment agreements provide that the
employed professionals will not compete with the

50
<PAGE> 52

professional association during the term of the agreement and following the
termination of the agreement for a term of two years for a shareholder
professional and one year for a non-shareholder professional in a specified
geographical area. At November 18, 1997, the Company had 539 employees, of which
approximately 97 were employed at the Company's headquarters 61 were employed at
Block Vision's office and 442 were employed by the Company at Managed Provider
practices. The Company believes that its relationship with its employees is
good.

INSURANCE

The Company's business entails an inherent risk of claims of liability. The
optometrists and ophthalmologists with which the Company associates and certain
employees of the Company are involved in the delivery of health care services to
the public and, therefore, are exposed to the risk of professional liability
claims. Claims of this nature, if successful, could result in substantial damage
awards to the claimants that may exceed the limits of any applicable insurance
coverage. Insurance against losses related to claims of this type can be
expensive and varies widely from state to state. The Company is indemnified
under its service agreements for claims against the its Managed Providers
practices and maintains a blanket liability insurance policy for itself.
Successful malpractice claims asserted against the Managed Practices, however,
could have an adverse effect on the Company's profitability. The Company
maintains umbrella general liability insurance on a claims-made basis in the
amounts of $5.0 million per incident, and $5.0 million in the aggregate per
annum. While the Company believes it has adequate liability insurance coverage,
there can be no assurance that a pending or future claim or claims will not be
successful or, if successful, will not exceed the limits of available insurance
coverage or that such coverage will continue to be available at acceptable costs
and on favorable terms.

LITIGATION

There are no material pending legal proceedings other than routine
litigation arising in the ordinary course of business. The Company does not
believe that the results of such litigation, even if the outcome were
unfavorable to the Company, would have a material adverse effect on its
financial position.

SERVICE MARKS

The Company has applied for registration of "Vision 21," "Eye Care for the
21st Century," "A Different Point of View," "LADS," and the Company's design
logo with the United States Patent and Trademark Office in 1997, which
applications are all currently pending.

PROPERTIES

The Company leases 9,902 square feet of office space in Largo, Florida, for
its corporate headquarters. The lease is for a term through September 1998, and
the Company believes that the facility is adequate for its current needs.

The Company leases 10,586 square feet of office space in Boca Raton,
Florida for Block Vision's corporate office under a lease expiring May 31, 2001.
The Company believes that the facility is adequate for Block Vision's current
needs.

The Company leases or subleases the clinic locations it manages pursuant to
the Management Agreements with the Managed Professional Associations. The
Company anticipates that expanded facilities will be needed as the Managed
Professional Associations grow. The Company also expects to enter into leases
and subleases in the future as it acquires the allowable assets of Contract
Providers and enters into Management Agreements.

The Company also leases and subleases the ASC facilities it manages. The
Company does not expect that the current ASCs will need to be expanded. However,
the Company does anticipate that it will enter into leases and subleases as it
acquires additional ASC facilities.

The Company also leases minimal but adequate facilities in certain business
regions for regional support.

51
<PAGE> 53

MANAGEMENT

DIRECTORS AND EXECUTIVE OFFICERS

The following table sets forth the names and ages of the Company's
directors and executive officers, and positions they hold with the Company:

<TABLE>
<CAPTION>
NAME AGE POSITION
- ---- --- --------
<S> <C> <C>
Theodore N. Gillette, O.D................. 43 Chairman of the Board, Chief Executive Officer,
President and Director(1)
Richard L. Sanchez........................ 44 Chief Development Officer, Secretary and Director
Richard T. Welch.......................... 46 Chief Financial Officer, Treasurer and Director(2)
Richard L. Lindstrom, M.D................. 49 Chief Medical Officer and Director
Michael P. Block.......................... 46 President -- Block Vision
Peter J. Fontaine......................... 43 Director(1)(2)
Herbert U. Pegues, II, M.D................ 47 Director(1)(2)
Bruce S. Maller........................... 43 Director
Jeffrey I. Katz, M.D...................... 51 Director
</TABLE>

- ---------------

(1) Member of Compensation Committee
(2) Member of Audit Committee

THEODORE N. GILLETTE, O.D., CHAIRMAN OF THE BOARD, CHIEF EXECUTIVE OFFICER,
PRESIDENT AND DIRECTOR. Dr. Gillette has served as Chairman of the Board, Chief
Executive Officer, President, and director of the Company since its inception.
Dr. Gillette has served as President and director of the Company's wholly-owned
subsidiaries, Vision 21 Physician Practice Management Company and Vision 21
Managed Eyecare of Tampa Bay, Inc. since 1984 and 1993, respectively. He
obtained his Doctorate of Optometry from Southern California College of
Optometry in 1979 and his Bachelor of Science from Florida State University in
1975.

RICHARD L. SANCHEZ, CHIEF DEVELOPMENT OFFICER, SECRETARY AND DIRECTOR. Mr.
Sanchez has served as Chief Development Officer, Secretary and director of the
Company since its inception. From 1993 until assuming his positions with the
Company, Mr. Sanchez was Vice President of Marketing and Administration of the
Company's wholly-owned subsidiary, Vision 21 Managed Eyecare of Tampa Bay, Inc.
Prior to November 1992, Mr. Sanchez worked for Exxon Corporation for over 18
years in various management positions including divisional management
responsibility for over 300 employees and $600 million in revenues. Mr. Sanchez
obtained his Bachelor of Science in Chemistry from Florida State University in
1975.

RICHARD T. WELCH, CHIEF FINANCIAL OFFICER, TREASURER AND DIRECTOR. Mr.
Welch has served as Chief Financial Officer, Treasurer and director of the
Company since August 1996. Prior to joining the Company, Mr. Welch served as
Executive Vice President of Finance and Administration and as Vice Chairman of
the Board of Directors of Sports & Recreation, Inc., a public company engaged in
the business of retail sporting goods and equipment sales generating over $500
million in annual revenue, from December 1994 to March 1996. He served as its
Chief Financial Officer and a Director from January 1992 to December 1994. Mr.
Welch is a certified public accountant and he graduated from Louisiana State
University in 1973 with a Bachelor of Science in Management and Accounting.

RICHARD L. LINDSTROM, M.D., CHIEF MEDICAL OFFICER AND DIRECTOR. Dr.
Lindstrom has served as Chief Medical Officer of the Company since September
1996 and has served as a director since January 1997. Since October 1989, Dr.
Lindstrom has maintained a private practice adjacent to the Phillips Eye
Institute in Minneapolis where he serves as the Medical Director for Research
and Teaching. Dr. Lindstrom holds 22 patents in ophthalmology and has given
numerous presentations throughout the world including 13 named lectures. He is
active on multiple educational and advisory boards including chief medical
editor of Ocular Surgery News. He has co-authored two books, published 50
chapters in other books and published over 300 articles in refereed journals.
Dr. Lindstrom graduated from the University of Minnesota Medical School in 1972
followed by a research residency and cornea fellowship at the University of
Minnesota, an Anterior

52
<PAGE> 54

Segment fellowship at Mary Shields Eye Hospital in Dallas and a third fellowship
in Glaucoma/Anterior Segment at University Hospitals in Salt Lake City.

MICHAEL P. BLOCK, PRESIDENT -- BLOCK VISION. Mr. Block is the founder of
Block Vision, Inc. and has served as its Chairman of the Board, President and
Treasurer since its inception in 1984. Mr. Block is also Chairman of the Board,
President and Treasurer of BBG-COA, Inc. and Chairman of the Board of BBG-COA,
Inc.'s other subsidiaries. Mr. Block graduated from Farleigh Dickinson
University in 1973 with a Bachelor of Arts degree and has been a licensed
optician in the State of New Jersey since 1974. Mr. Block is a member of the New
Jersey Society of Dispensing Opticians, holds a Fellowship with the National
Academy of Opticianary, is a member of the Board of Overseers of Lynn University
and serves on the Board of Advisory Editorial Staff for both Medical Interface
magazine and 20/20 Magazine.

PETER J. FONTAINE, DIRECTOR. Mr. Fontaine has served as a director of the
Company since July 1996. Mr. Fontaine is currently the Chairman of the Board of
Directors and Chief Executive Officer of Discount Auto Parts, Inc., a public
company engaged in the business of retail automotive parts sales, and he has
been employed by Discount Auto Parts, Inc. in various capacities since 1977. Mr.
Fontaine has served on the Board of Directors of Discount Auto Parts, Inc. since
1996 and as its Chief Executive Officer since 1994. From 1994 to January 1997,
Mr. Fontaine also served as its President.

HERBERT U. PEGUES, II, M.D., DIRECTOR. Dr. Pegues has served as a director
of the Company since November 1996. He is currently Medical Director for managed
care at the Miami Children's Hospital, Miami, Florida and administers its
physician hospital organization. He has been the Vice President/Medical Director
for Memorial Sisters of Charity Health Network in Houston, Texas from 1995 to
1996. From 1988 to 1992, Dr. Pegues was the Associate Executive Director of
Medical Affairs for Humana Healthcare Plans in Tampa, Florida and Assistant
Clinical Professor of the Department of Family Medicine at the University of
South Florida College of Medicine. Dr. Pegues graduated from the University of
Illinois College of Medicine in 1975. He received his B.A. from Grinnell College
in Grinnell, Iowa and is a Diplomate, Certified by the American Board of Family
Practice and National Board of Medical Examiners. Dr. Pegues is also a Fellow of
the American Academy of Family Physicians, and is licensed to practice medicine
in Florida.

BRUCE S. MALLER, DIRECTOR. Mr. Maller has served as a director of Vision
Twenty-One since November 1996 and is an ophthalmology practice management
consultant to the Company. He is the founder of, and has been the President of,
the BSM Consulting Group of Incline Village, Nevada since 1978. BSM provides
consulting services predominantly in the fields of ophthalmology and cardiology
to individual physicians and corporate clients such as Allergan, Inc., Boston
Scientific, Columbia/HCA Healthcare, Inc. and Vision Twenty-One. Mr. Maller has
served as a Vice-President of Summit Medical Systems, Inc., the parent company
of BSM since October 1995. Mr. Maller is a frequent lecturer for various medical
societies, including the American Academy of Ophthalmology and the American
Society of Cataract and Refractive Surgery. Mr. Maller also heads BSM Healthcare
Publications, which produces works related to the field of medical practice
management. Mr. Maller received his Bachelor of Arts degree from the University
of Colorado in 1975.

JEFFREY I. KATZ, M.D., DIRECTOR. Dr. Katz has served as a director of the
Company since January 1997. Dr. Katz has operated an ophthalmology practice at
the Eye Institute of Southern Arizona in Tucson since 1984. He also serves as a
clinical associate professor in the Department of Ophthalmology at the
University of Arizona in Tucson and is the past president of the Tucson
Ophthalmologic Society. Dr. Katz graduated from George Washington University
Medical School in 1972. He was chief of ophthalmic surgery at El Dorado Hospital
in Tucson and has served as the Medical Director for the Tucson Laboratory of
the Arizona Lions eye Bank since 1978.

Pursuant to the terms of the Company's Articles of Incorporation and
Bylaws, the Board of Directors has the power to set the number of directors. The
number of directors is presently set at eight members. The directors are divided
into three classes. Each director in a particular class is elected to serve a
three-year term or until his or her successor is duly elected and qualified. The
classes are staggered so that their terms expire in successive years resulting
in the election of only one class of directors each year. The Class I directors
are Mr. Welch and Drs. Pegues and Katz, the Class II directors are Messrs.
Sanchez and Fontaine, and the Class III directors are Drs. Gillette and
Lindstrom and Mr. Maller. The initial terms of the current Class I,

53
<PAGE> 55

Class II and Class III directors will expire at the annual meeting of the
stockholders of the Company in 1998, 1999 and 2000, respectively. Officers of
the Company are appointed by the Board of Directors and hold office until the
first meeting of directors following the annual meeting of stockholders and
until their successors are appointed, subject to earlier removal by the Board of
Directors.

INDEMNIFICATION OF DIRECTORS AND OFFICERS

The Company's Articles of Incorporation (the "Articles") provide that a
Director will not be personally liable to the Company or its stockholders for
monetary damages for breach of fiduciary duty as a director, except: (i) for any
breach of duty of loyalty; (ii) for acts or omissions not in good faith or which
involve intentional misconduct or knowing violations of laws; (iii) for
liability under the Florida Business Corporation Act (relating to certain
unlawful dividends, stock repurchases or stock redemptions); or (iv) for any
transaction from which the director derived any improper personal benefit. The
Company's Bylaws provides that the Company will indemnify each director and such
of the Company's officers, employees and agents as the Board of Directors shall
determine from time to time to the fullest extent provided by the Florida
Business Corporation Act.

The Company has entered into indemnification agreements (the
"Indemnification Agreements") with all of its directors and certain of its
officers. Similar Indemnification Agreements may from time to time be entered
into with additional officers of the Company or certain other employees or
agents of the Company. At present, there is no material pending litigation or
proceeding involving a director, officer, employee or agent of the Company where
indemnification is required or permitted, nor is the Company aware of any
threatened litigation or proceeding that may result in a claim for such
indemnification. The Company is also empowered under its Articles to purchase
and maintain insurance or furnish similar protection on behalf of any person who
it is required or permitted to indemnify and the Company has acquired such
insurance in connection with such individuals that the Company believes is
warranted.

DIRECTORS' COMPENSATION

Directors are reimbursed for expenses in connection with attendance at
Board of Director and Committee meetings. Directors who are not officers of the
Company or affiliates of major stockholders are paid $1,000 per meeting plus
expenses. In addition, non-employee directors may be awarded options under the
Company's Stock Option Plans. See "-- Stock Option Plans."

COMMITTEES OF THE BOARD OF DIRECTORS

The Board of Directors has established an Audit Committee, the members of
which are Messrs. Welch, Fontaine and Pegues, and a Compensation Committee, the
members of which are Messrs. Gillette, Fontaine and Pegues. A majority of the
members of the Audit and Compensation Committees are non-employee directors.

The functions of the Audit Committee are to recommend annually to the Board
of Directors the appointment of the independent public accountants of the
Company, discuss and review the scope and the fees of the prospective annual
audit, to review the results thereof with the independent public accountants,
review and approve non-audit services of the independent public accountants,
review compliance with existing major accounting and financial policies of the
Company, review the adequacy of the financial organization of the Company,
review management's procedures and policies relative to the adequacy of the
Company's internal accounting controls, review compliance with federal and state
laws relating to accounting practices and review and approve (with the
concurrence of a majority of the disinterested directors of the Company)
transactions, if any, with affiliated parties.

The functions of the Compensation Committee are to review and approve
annual salaries and bonuses for the executive officers, review, approve and
recommend to the Board of Directors the terms and conditions of all employee
benefit plans or changes thereto, to administer the Company's stock option
plans, and to carry out the responsibilities required by rules of the Securities
and Exchange Commission.

54
<PAGE> 56

EXECUTIVE COMPENSATION

The following table sets forth information with respect to all compensation
paid or accrued in the year ended December 31, 1996, for services rendered in
all capacities to the Company by the Chief Executive Officer and the one other
executive officer of the Company who earned in excess of $100,000 in salary and
bonus for 1996. For the year ended December 31, 1996, no officer of the Company
other than Theodore N. Gillette, Chief Executive Officer and Richard L. Sanchez,
Chief Development Officer, received compensation in excess of $100,000.

SUMMARY COMPENSATION TABLE

<TABLE>
<CAPTION>
ANNUAL
COMPENSATION
----------------
NAME AND PRINCIPAL POSITION YEAR SALARY
- --------------------------- ---- ---------
<S> <C> <C>
Theodore N. Gillette, O.D., Chief Executive Officer......... 1996 $189,072
Richard L. Sanchez, Chief Development Officer............... 1996 143,984
</TABLE>

EMPLOYMENT AGREEMENTS

Theodore N. Gillette, O.D. and Richard L. Sanchez have each entered into
Employment Agreements with the Company (the "Employment Agreements"), pursuant
to which they have agreed to serve as the Company's Chief Executive Officer and
Chief Development Officer, respectively. Each Employment Agreement is for a term
of five years ending on September 30, 2001, and is renewable for subsequent
one-year terms by mutual agreement of the parties. Dr. Gillette and Mr. Sanchez
will receive annual base salaries of not less than $220,000 and $180,000,
respectively, which are subject to review by the Compensation Committee of the
Board of Directors at annual intervals and may be adjusted from time to time as
the Compensation Committee deems to be appropriate. Under the Employment
Agreements, Dr. Gillette and Mr. Sanchez have agreed to devote their best
efforts and substantially all of their business time and services to the
business and affairs of the Company. Dr. Gillette and Mr. Sanchez will each be
eligible for annual incentive bonuses, up to 50% of their annual base salary, in
an amount to be determined by the Compensation Committee to the extent that the
Company achieves certain performance measures set by the Committee. Dr. Gillette
and Mr. Sanchez are also entitled to receive stock options or other stock awards
under the Company's Stock Incentive Plan to the extent that the Compensation
Committee determines such awards to be appropriate. Each Employment Agreement
provides that in the event that employment is terminated by the Company other
than (i) for cause, (ii) upon death or disability, or (iii) upon voluntary
termination by the employee, such employee will be entitled to receive from the
Company monthly payments equal to one-twelfth of the employee's annual base
salary for each month during the remaining term of such Employment Agreement,
but not less than twenty-four months. In the event of a change in control (as
defined in the Employment Agreements), each Employment Agreement provides that
if such employee's employment is terminated other than for cause within twelve
months following a change of control of the Company, the Company shall pay such
employee thirty-six monthly payments of one-twelfth of the sum of such
employee's base salary plus his previous year's bonus. Each Employment Agreement
also contains a covenant not to compete with the Company for a period of
twenty-four months following termination of employment.

The Company and Richard T. Welch are parties to an Employment Agreement
(the "Employment Agreement"), pursuant to which Mr. Welch has agreed to serve as
Chief Financial Officer of the Company. The term of the Employment Agreement is
for two years ending on August 31, 1998, and is renewable for subsequent
one-year terms by mutual agreement of the parties. Under the Employment
Agreement, Mr. Welch will receive an annual base salary of not less than
$150,000 which is subject to review by the Compensation Committee of the Board
of Directors at annual intervals and may be adjusted from time to time as the
Compensation Committee deems to be appropriate. Under the Employment Agreement,
Mr. Welch has agreed to devote his best efforts and substantially all of his
business time and services to the business and affairs of the Company. Mr. Welch
will be eligible for annual incentive bonuses, up to 50% of his annual base
salary, in an amount to be determined by the Compensation Committee of the Board
of Directors to the extent that the Company achieves certain performance
measures set by the Committee. Under the Employment

55
<PAGE> 57

Agreement, Mr. Welch received non-statutory stock options to purchase 80,000
shares of Common Stock pursuant to the Company's Stock Incentive Plan. The
options are exercisable at a price of $3.11 per share and 64,000 shares became
vested at the time of the Company's Initial Public Offering on August 18, 1997.
The remaining 16,000 shares vest pro rata on an equal basis over a four-year
period. Additionally, in July 1997 and October 1997, respectively, Mr. Welch
received non-statutory stock options to purchase 20,000 and 50,000 shares of
Common Stock, respectively, pursuant to the Company's Stock Incentive Plan.
20,000 of the options are exercisable at $10.00 per share and vest equally on
April 1, 1999 and April 1, 2000. 50,000 of the options are exercisable at
$11.375 per share and vest pro rata on an equal basis over a four year period
commencing October 27, 1999. Mr. Welch is also entitled to receive such
additional stock options or other stock awards under the Company's Stock
Incentive Plan to the extent the Compensation Committee determines such awards
to be appropriate. The Employment Agreement provides that in the event that
employment is terminated by the Company other than (i) for cause, (ii) upon
death or disability, or (iii) upon voluntary termination by the employee, such
employee shall be entitled to receive from the Company a series of monthly
payments equal to one-twelfth of the employee's annual base salary for each
month during the remaining term of such Employment Agreement, but not less than
twelve months. In the event of a change in control (as defined in the Employment
Agreement), the Employment Agreement provides that if such employee's employment
is terminated other than for cause within twelve months following a change of
control of the Company, the Company shall pay such employee a series of twelve
monthly payments of one-twelfth of the sum of such employee's base salary plus
his previous year's bonus. The Employment Agreement also contains a covenant not
to compete with the Company for a period of twelve months following termination
of employment.

At the time of the Block Acquisition, Michael Block entered into an
employment agreement with the Company (the "Employment Agreement"), pursuant to
which he has agreed to serve as President of Block Vision, Inc., the Company's
wholly-owned subsidiary. The Employment Agreement is for a term of two years
ending on October 30, 1999, and is renewable for subsequent one-year terms by
mutual agreement of the parties. Mr. Block will receive an annual base salary of
$250,000 which is subject to review by the Compensation Committee of the Board
of Directors at annual intervals and may be adjusted from time to time as the
Compensation Committee deems appropriate. Under the Employment Agreement, Mr.
Block has agreed to devote his best efforts and substantially all of his
business time and services to the business and affairs of Block Vision. Mr.
Block will be eligible for an annual incentive bonus of up to 25% of his annual
base salary, if Block Vision's earnings before interest, taxes, depreciation and
amortization reaches certain levels, which target levels will increase in 1999.
Under the Employment Agreement, Mr. Block received non-statutory stock options
to purchase 40,000 shares of Common Stock, pursuant to the Company's Stock
Incentive Plan. The options are exercisable at a price of $13.20 per share and
vest pro rata on an equal basis over a four-year period subject to acceleration
upon the occurrence of certain events. In the event 25% of Block Vision's
capitated lives are expanded to include medical and surgical services, 50% of
the unvested options would vest at such time and in the event that 50% of Block
Vision's capitated lives are expanded to include medical and surgical services,
all remaining options will vest at such time. Mr. Block is also entitled to
receive such additional stock options or other stock awards under the Company's
Stock Incentive Plan to the extent determined by the Compensation Committee as
successful integration and growth of Block Vision's occurs. The Employment
Agreement provides that in the event that employment is terminated by the
Company other than (i) for cause, (ii) upon death or disability, or (iii) upon
voluntary termination by the employee, such employee shall be entitled to
receive from the Company a series of monthly payments equal to one-twelfth of
the employee's annual base salary for each month during the remaining term of
such employment agreement, but not less than twelve months. In the event of a
change in control (as defined in the Employment Agreement), the Employment
Agreement provides that if such employee's employment is terminated other than
for cause within twelve months following a change of control of the Company, the
Company shall pay such employee a series of twelve monthly payments of
one-twelfth of the sum of such employee's base salary plus his previous year's
bonus. The Employment Agreement also contains a covenant not to compete with the
Company for a period of three years following termination of employment.

56
<PAGE> 58

STOCK OPTION PLANS

In July 1996, the Board of Directors adopted, and the stockholders of the
Company approved, the 1996 Stock Incentive Plan (the "Incentive Plan") and the
1996 Affiliated Professionals Stock Plan (the "Professionals Plan," and together
with the Incentive Plan, the "Plans"). The purpose of the Plans is to provide
non-employee directors, officers, key employees, advisors and medical
professionals employed by Affiliated Practices with additional incentives by
increasing their proprietary interest in the Company or tying a portion of their
compensation to increases in the price of the Company's Common Stock. The
aggregate number of shares of Common Stock subject to the Plans is 1,600,000
shares.

The Incentive Plan permits the Company to grant incentive stock options
("ISOs"), as defined in Section 422 of the Internal Revenue Code of 1986, as
amended (the "Code"), nonqualified stock options ("Nonqualified Options"), stock
appreciation rights ("SARs"), restricted shares of Common Stock ("Restricted
Shares") and performance shares of Common Stock (individually, an "Award" and
collectively, "Awards") to directors, officers, key employees and consultants of
the Company. The Professionals Plan permits the Company to grant Awards of
Nonqualified Stock Options, SARs and Restricted Shares to medical professionals
employed by Affiliated Practices. The various types of Awards are described in
more detail below.

The Incentive Plan is intended to qualify for favorable treatment under
Section 16 of the Exchange Act pursuant to Rule 16b-3 promulgated thereunder
("Rule 16b-3") and Awards under the Incentive Plan are intended to qualify for
treatment as "performance-based compensation" under Section 162(m) of the
Internal Revenue Code ("Section 162(m)"). Following the consummation of this
Offering, the Plans will be administered by the Compensation Committee, which
will be comprised of two or more non-employee directors who are "disinterested"
within the meaning of Rule 16b-3 and Section 162(m) (the "Committee"). The
Committee will have, subject to the terms of the Plans, the sole authority to
grant Awards under the Plans, to construe and interpret the Plans and to make
all other determinations and take any and all actions necessary or advisable for
the administration of the Plans. Prior to the consummation of this Offering, the
Plans have been administered by the Company's full Board of Directors.

Options. Options for the purchase of shares of the Common Stock may be
granted under both Plans. The exercise price for the ISOs granted under the
Incentive Plan may be no less than the fair market value of the Common Stock on
the date of grant (or 110% in the case of ISOs granted to employees owning more
than 10% of the Common Stock). Only employees of the Company are eligible to
receive ISOs. The exercise price for Nonqualified Options granted under the
Plans will generally be the fair market value of the Common Stock on the date of
grant; however, the Compensation Committee may set an exercise price at less
than fair market value if it determines that special circumstances warrant a
lower price. Options will be exercisable during the period specified in each
option agreement and will generally be exercisable in installments pursuant to a
vesting schedule to be designated by the Committee. No Option will remain
exercisable later than ten years after the date of grant (or five years from the
date of grant in the case of ISOs granted to holders of more than 10% of the
Common Stock).

SARs. Stock appreciation rights may be granted under both Plans in tandem
with Options. An SAR represents the right to receive from the Company the
difference (the "Spread"), or a percentage thereof not in excess of 100 percent,
between the exercise price of the related Option and the market value of the
Common Stock on the date of exercise of the SAR. SARs may only be exercised at a
time when the related Option is exercisable and the Spread is positive, and the
exercise requires the surrender of the related Option for cancellation. The
amount payable by the Company upon exercise may be paid in cash, Common Stock or
a combination thereof, as determined by the Committee.

Restricted Shares. Restricted Shares may be granted under both Plans. An
award of Restricted Shares involves the immediate issuance by the Company to a
participating employee of ownership of a specific number of shares of Common
Stock in consideration of the performance of services. The employee is entitled
immediately to voting, dividend and other ownership rights in the shares. The
issuance may be made without additional consideration, or for payment of an
amount that is less than the market value of the shares on the date of grant, as
the Committee may determine. Restricted Shares must be subject to a "substantial
risk of

57
<PAGE> 59

forfeiture" for a period to be determined by the Committee. An example of such
forfeiture would be a provision that the employee's Restricted Shares would be
forfeited if he or she ceased to serve the Company as an officer at any time
before the end of a specified period of years. In order to enforce these
forfeiture provisions, the transferability of Restricted Shares will be
prohibited or restricted in a manner and to the extent prescribed by the
Committee for the period during which the forfeiture provisions are to continue.
The Committee may also condition the vesting of the Restricted Shares on the
achievement of specified performance objectives ("Management Objectives").

Performance Shares. Performance Shares may be granted under the Incentive
Plan. A Performance Share is the equivalent of one share of Common Stock. An
Incentive Plan participant may be granted any number of Performance Shares. The
participant will be given one or more Management Objectives to meet within a
specified period (the "Performance Period"). Maximum or minimum level of
acceptable achievement for each Management Objective will be established by the
Committee. If, by the end of the Performance Period, the specified Management
Objectives have been satisfied, the participant will be deemed to have fully
earned the Performance Shares. If the Management Objectives have not been
satisfied in full but predetermined minimum level of acceptable achievement has
been attained or exceeded, the participant will be deemed to have partly earned
the Performance Shares in accordance with a predetermined formula. To the extent
earned, the Performance Shares will be paid to the participant at the time and
in the manner determined by the Committee in cash or in shares of Common Stock
or any combination thereof.

Management Objectives may be described in terms of either Company-wide
objectives or objectives that are related to the performance of a department or
function within the Company or with respect to which the participant provides
services. The Committee may adjust any Management Objectives and the related
minimum level of acceptable achievement if, in its judgment, transactions or
events have occurred after the date of grant that are unrelated to the
participant's performance and result in distortion of the Management Objectives
or the related minimum level of acceptable achievement.

Notwithstanding the provisions of any agreement relating to an Award, in
the event of a change or threatened "change in control" (as defined in the
Plans) of the Company and in the event of certain mergers and reorganizations of
the Company, the Committee will have the discretion to (i) declare all Options
immediately exercisable, (ii) determine that all or any portion of conditions
associated with a Restricted Share or Performance Share award have been met,
(iii) grant SARs or cash bonus awards to holders of outstanding Options, (iv)
pay cash in exchange for the cancellation of Nonqualified Options, SARs,
Performance Share Awards or Restricted Shares, or (v) make other adjustments or
amendments to the Plans and outstanding Awards and/or substitute new Awards.

COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION

Executive compensation in the past has been determined by the Company's
chief executive officer and approved by the Board of Directors. After completion
of the Initial Public Offering, the Company established the Compensation
Committee of the Board of Directors, which is comprised of a majority of
non-employee independent directors and is responsible for establishing salaries,
bonuses and other compensation for the Company's executive officers.

58
<PAGE> 60

CERTAIN TRANSACTIONS

The information set forth herein briefly describes transactions since the
beginning of the Company's last fiscal year between the Company and its
directors, officers and 5% stockholders. These transactions have been approved
by the Company's Board of Directors. Transactions after the Company's Initial
Public Offering, if any, with affiliated parties were approved by a majority of
the Company's independent directors and were on terms no less favorable to the
Company than those that could be obtained from unaffiliated parties.

As part of a reorganization of the Company in November 1996, the Company
completed an acquisition of all the outstanding stock of Vision 21 Managed
Eyecare of Tampa Bay, Inc. in exchange for a certain number of shares of Common
Stock of the Company. In addition, in November 1996, the Company completed an
acquisition of all of the outstanding stock of Dr. Gillette & Associates, Inc.
(renamed Vision 21 Physician Practice Management Company). The shareholders of
these entities acquired by the Company were Theodore Gillette, Richard Sanchez
and Peter Fontaine. Dr. Gillette and Mr. Sanchez are executive officers and
directors of the Company and Mr. Fontaine is a director of the Company. In
connection with these transactions, Gillette, Sanchez and Fontaine received an
aggregate of 1,724,574, 600,302 and 360,442 shares of Common Stock,
respectively.

Effective December 1, 1996 the Company acquired all the business assets of
Gillette, Beiler & Associates, #6965 P.A. ("G&A"), a Florida professional
association owned in part by Theodore Gillette, an executive officer and
director of the Company, with nine optometry offices located in Tampa, Port
Richey, Clearwater, St. Petersburg, Palm Harbor, and Seminole, Florida. As
consideration for the acquisition, G&A received 373,971 shares of Common Stock,
of which Dr. Gillette is the beneficial owner of 196,064 shares, and a
promissory note in the amount of $416,103, which bears interest at 8% per annum.
The promissory note was repaid in full from the net proceeds of the Initial
Public Offering.

The Company has an agreement to provide practice management services to
G&A, pursuant to which G&A made payments of $392,206, $423,890 and $538,982 in
1994, 1995 and 1996, respectively. In December 1996, the Company and G&A entered
into a new Management Agreement pursuant to which the Company provides practice
management services for a management fee equal to a gross percentage of the
revenue of G&A's eye care practice. Payments earned by the Company under the new
Management Agreement in the nine months ended September 30, 1997 were $920,612.

The Company entered into an Agreement with Bruce S. Maller, a director of
the Company, dated May 10, 1996, pursuant to which the Company issued to Maller
144,705 shares of Common Stock for services previously rendered by Mr. Maller to
the Company. In October 1996, the Company finalized a five-year Advisory
Agreement with Mr. Maller (the "Advisory Agreement"), pursuant to which Mr.
Maller agreed to render certain advisory services to the Company, including the
identification and integration of ophthalmology practices and the provision of
assistance to the Company with its strategic planning, growth and development.
In consideration for such services, the Company issued to Mr. Maller 125,627
shares of Common Stock. A decreasing percentage of such shares are subject to
forfeiture in the event the Advisory Agreement is terminated "for cause" prior
to January 1, 2000. The shares issued to Mr. Maller pursuant to the Advisory
Agreement are subject to certain piggyback and demand registration rights. See
"Description of Capital Stock -- Registration Rights."

The Company entered into a Services Agreement with the BSM Consulting Group
("BSM"), a consulting company which employs Mr. Maller, dated as of March 10,
1996 (the "Services Agreement"), pursuant to which BSM agreed to provide
substantial consulting services to assist the Company with its operational and
management development. The Services Agreement is for a term of five years and
the fees payable to BSM for such services are approximately $40,000 per month.
Payments earned by BSM under the Services Agreement were $332,128 and $443,344
in 1996 and the nine months ended September 30, 1997, respectively.

The Company borrowed $3.0 million from Mr. Fontaine pursuant to a
Promissory Note dated June 1996 (the "Fontaine Note") bearing interest at 8% per
annum. The Fontaine Note was repaid in full from the proceeds of the Initial
Public Offering. In addition, the Company borrowed $200,000 and $500,000 from

59
<PAGE> 61

Mr. Fontaine in November and December 1996, respectively, for working capital
pursuant to unsecured promissory notes bearing interest at 8.5% per annum. The
unsecured promissory notes were repaid in full from the net proceeds from the
Initial Public Offering.

Effective September 9, 1996, the Company entered into a Services Agreement
(the "Services Agreement") with Dr. Richard L. Lindstrom, a director of the
Company, who pursuant to the Services Agreement provides certain consulting and
advisory services primarily related to assisting the Company in the
identification and integration of Affiliated Providers into the Company's
managed eye care delivery network and assistance in the development of
Affiliated Provider practices. In consideration for his services, Dr. Lindstrom
is paid an annual base salary of $60,000 and received 108,133 shares of Common
Stock, of which 40% is non-forfeitable and the remaining 60% is subject to
forfeiture in various amounts if the Services Agreement is terminated by the
Company for cause or by Dr. Lindstrom prior to August 31, 2000. The shares
issued to Dr. Lindstrom pursuant to the Services Agreement are subject to
certain piggyback and demand registration rights. See "Description of Capital
Stock -- Registration Rights."

Effective December 1, 1996, the Company acquired all the business assets of
Lindstrom, Samuelson and Hardten Ophthalmology Associates, P.A. ("Lindstrom
P.A."), in which Dr. Lindstrom owns a majority interest, at a purchase price of
247,108 shares of Common Stock of the Company, of which Lindstrom received
151,732 shares, and a promissory note in the amount of $460,416 bearing interest
at 8% per annum. The shares are subject to certain registration rights. See
"Description of Capital Stock -- Registration Rights." In connection with the
acquisition, Lindstrom P.A. and the Company entered into a Management Agreement
which provides for a management fee of 30% of the amounts remaining after
certain expenses are paid as set forth in the Management Agreement. The Company
earned fees of $338,435 under the Management Agreement in the nine months ended
September 30, 1997. The promissory note was repaid in full from the net proceeds
of the Initial Public Offering.

The Company acquired all of the stock of Midwest Eye Care Alliance, Inc.
("M.E.C.A."), a corporation in which Dr. Lindstrom owned an 8% interest, for a
total purchase price of $700,000, which was paid in full from the net proceeds
from the Initial Public Offering. The Company also entered into Regional
Services Agreements with the shareholders of M.E.C.A., including Dr. Lindstrom
(collectively the "Coordinators"), effective at the time of an initial public
offering of the Company (collectively the "Regional Agreements"). The Regional
Agreements provide for the Coordinators to render advisory services to the
Company in connection with identifying potential ophthalmology and optometry
practices in the Midwestern region of the United States for acquisition or
affiliation and assisting the Company in negotiating agreements with such
practices in exchange for specific cash compensation that varies among the
Regional Agreements. Dr. Lindstrom will receive a total of $40,000 per year for
each of three years for his advisory services.

Effective December 1, 1996, the Company acquired all the business assets of
Eye Institute of Southern Arizona, P.C. ("Eye Institute"), an Arizona
professional corporation located in Tucson, Arizona and engaged in the provision
of ophthalmology services. Jeffrey I. Katz, M.D., a director of the Company,
owns a 50% interest in Eye Institute. The acquisition was accomplished by a
merger of Eye Institute into the Company's wholly-owned subsidiary, Vision 21 of
Southern Arizona, Inc. As consideration for the acquisition, Dr. Katz received
198,306 shares Common Stock. The shares are subject to certain registration
rights. See "Description of Capital Stock -- Registration Rights." As a result
of the merger of Eye Institute with and into Vision 21 of Southern Arizona,
Inc., Vision 21 of Southern Arizona, Inc. assumed Eye Institute's role as
business manager under a Management Agreement between Eye Institute and Vital
Sight, P.C., a newly-formed Arizona professional corporation to which Eye
Institute had transferred its medical assets prior to the merger. The Management
Agreement provides for a management fee of 35% of the amounts remaining after
certain expenses are paid as set forth in the Management Agreement. The Company
earned fees of $441,185 under the Management Agreement in the nine months ended
September 30, 1997. The Company, the former shareholders of Eye Institute and
certain other related entities closed in escrow an agreement dated as of July
31, 1997 to transfer certain ASC assets from Vital Sight, P.C. and such
shareholders' limited liability company to Vision 21 of Southern Arizona, Inc.
When the State of Arizona approves Vital Sight, P.C.'s application for a license
to conduct an ASC business (which is expected by the end of November 1997), all
income associated with such ASC business shall be subject to the business
management fee. The Company's

60
<PAGE> 62

obligation to purchase the ASC business shall terminate if the ASC license is
not obtained within eighteen months of the closing date of the merger of Eye
Institute into Vision Twenty-One of Southern Arizona, Inc. As consideration for
this transaction, the Dr. Katz will be entitled, subject to post-closing
adjustments, to receive 69,169 shares of Common Stock.

Effective October 31, 1997, the Company acquired all of the stock of
BBG-COA, Inc., a corporation in which Michael P. Block, President of Block
Vision, Inc., and his wife owned a 25.6% interest, for a total purchase price of
approximately $35.0 million consisting of cash and Common Stock of which Mr.
Block received his pro rata share. The shares are subject to certain
registration rights. See "Description of Capital Stock -- Registration Rights."
Additionally, Mr. and Mrs. Block may receive up to an additional 56,226 shares
of Common Stock contingent upon Block Vision successfully attaining certain 1998
targets agreed to as part of the Block Acquisition. See "The
Acquisitions -- Block Acquisition."

61
<PAGE> 63

PRINCIPAL STOCKHOLDERS

The following table sets forth information with respect to the beneficial
ownership of the Company's outstanding Common Stock as of November 18, 1997 and
as adjusted to reflect the sale of the Common Stock offered hereby by (i) each
person or entity known by the Company to be the beneficial owners of more than
5% of the outstanding shares of Common Stock, (ii) each director or executive
officer of the Company who beneficially owns any shares of Common Stock, and
(iii) all directors and executive officers of the Company as a group. Except as
otherwise indicated, the persons listed below have sole voting and investment
power with respect to all shares of Common Stock owned by them, except to the
extent such power may be shared with a spouse.

<TABLE>
<CAPTION>
PERCENT BENEFICIALLY
OWNED(2)
SHARES BENEFICIALLY --------------------
NAME AND ADDRESS OWNED PRIOR TO PRIOR TO AFTER
OF BENEFICIAL OWNER(1) THE OFFERING(2) OFFERING OFFERING
- ---------------------- ------------------- -------- --------
<S> <C> <C> <C>
Gillette Family Limited Partnership(3)...................... 1,702,494 18.5% 14.7%
Theodore N. Gillette, O.D.(4)............................... 1,898,558 20.6 16.4
Sanchez Family Limited Partnership(5)....................... 593,329 6.4 5.1
Richard L. Sanchez(6)....................................... 593,329 6.4 5.1
Peter J. Fontaine........................................... 360,422 3.9 3.1
Michael P. Block(7)......................................... 117,340 1.3 1.0
Richard L. Lindstrom, M.D................................... 259,864 2.8 2.2
Bruce S. Maller(8).......................................... 270,331 2.9 2.3
BSM Investments Ltd......................................... 108,976 1.2 1.0
Jeffrey I. Katz, M.D........................................ 267,475 2.9 2.3
Richard T. Welch(9)......................................... 64,000 * *
All directors and executive officers as a group (8
persons).................................................. 3,931,319 42.7 33.8
</TABLE>

- ---------------

* Less than one percent.
(1) Unless otherwise indicated, the address of each of the beneficial owners
identified is 7209 Bryan Dairy Road, Largo, Florida 34647. See
"Management -- Directors and Executive Officers," "Management -- Employment
Agreements" and "Certain Transactions" for discussion of any material
relationship which any Selling Stockholder has had with the Company within
the past three years.

(2) Based on 9,207,449 shares of Common Stock outstanding prior to this Offering
(excluding 438,596 Contingent Shares held in escrow in conjunction with
certain acquisitions) and 11,607,449 shares of Common Stock to be
outstanding immediately after the Offering excluding Contingent Shares
(assuming the Underwriters' over-allotment option is not exercised).
Pursuant to the rules of the Securities and Exchange Commission (the
"Commission"), certain shares of Common Stock which a person has the right
to acquire within 60 days of the date hereof pursuant to the exercise of
stock options are deemed to be outstanding for the purpose of computing the
percentage ownership of such person but are not deemed outstanding for the
purpose of computing the percentage ownership of any other person.

(3) Shares are owned by the Gillette Family Limited Partnership, a Nevada
Limited Partnership, in which Dr. Theodore Gillette exercises voting
control.
(4) Represents (a) 1,702,494 shares owned by the Gillette Family Limited
Partnership over which Dr. Theodore Gillette has voting control as the sole
shareholder of the corporate general partners (b) 9,077 shares owned by
Gillette, Beiler & Associates, P.A. and (c) 186,987 shares owned
individually. See "Certain Transactions."
(5) Shares are owned by the Sanchez Family Limited Partnership, a Nevada Limited
Partnership in which Richard L. Sanchez exercises voting control.
(6) Represents 593,329 shares owned by the Sanchez Family Limited Partnership
over which Richard L. Sanchez has voting control.

(7) Represents shares received in connection with the Block Acquisition and
includes 58,670 shares owned by Mr. Block's wife.

(8) Includes 108,976 owned by BSM Investment, Ltd., over which Bruce Maller has
voting control.
(9) Represents shares issuable pursuant to options to purchase an aggregate of
80,000 shares, of which 64,000 shares have vested and are fully exercisable.

62
<PAGE> 64

DESCRIPTION OF CAPITAL STOCK

GENERAL

The authorized capital stock of the Company consists of (i) 50,000,000
shares of Common Stock, and (ii) 10,000,000 shares of preferred stock, $.001 par
value per share (the "Preferred Stock"). As of November 18, 1997, an aggregate
of 9,207,449 shares of Common Stock were outstanding and held of record by 132
stockholders and no shares of Preferred Stock were outstanding. Upon completion
of the Offering the Company will have 11,607,449 shares of Common Stock
outstanding (11,967,449 if the Underwriters' over-allotment option is exercised
in full). Copies of the Articles of Incorporation and Bylaws have been filed as
exhibits to the Registration Statement and are incorporated by reference herein.

COMMON STOCK

Holders of shares of Common Stock are entitled to one vote per share on all
matters to be voted upon by the stockholders. Subject to the prior rights of the
holders of Preferred Stock, holders of Common Stock are entitled to receive
dividends when, as and if declared by the Board of Directors from funds legally
available therefor, and to share ratably in the assets of the Company legally
available for distribution to the stockholders in the event of liquidation or
dissolution. The Common Stock has no preemptive rights and no subscription or
redemption privileges. The Common Stock does not have cumulative voting rights,
which means the holder or holders of more than half of the shares voting for the
election of directors can elect all the directors then being elected. See
"Principal and Selling Shareholders." All the outstanding shares of Common Stock
are, and the shares being offered hereby will be, when issued and paid for,
fully paid and not liable for further call or assessment.

WARRANTS

In December 1996, the Company issued to certain unrelated parties warrants
exchangeable for an aggregate maximum of 208,333 shares of Common Stock at an
exchange price ranging from $6.00 to $7.11 per share, or in a cashless exchange
for a reduced number of shares pursuant to a formula. The warrants are
exchangeable at any time through August 18, 2002.

In February 1997, the Company issued to Piper Jaffray Healthcare Fund II
Limited Partnership ("Piper Jaffray") a warrant exchangeable for an aggregate
maximum of 333,333 shares of Common Stock at an exchange price ranging from
$6.00 to $7.11, or in a cashless exchange for a reduced number of shares
pursuant to a formula. The warrants are exchangeable at any time through August
18, 2002.

In July 1997, the Company entered into an amended and restated credit
facility in the aggregate amount of $4.9 million with Prudential, pursuant to
the Note and Warrant Purchase Agreement. Under the Note and Warrant Purchase
Agreement, the Company sold to Prudential for $126,000 a warrant exchangeable
for 210,000 shares of Common Stock at any time during the five-year period
commencing at the effective date of the Initial Public Offering, at an exercise
price of $10.00 per share (equal to the Initial Public Offering price). See
"Underwriting," "Management's Discussion and Analysis of Financial Condition and
Results of Operations" and Note 11 to Notes to Consolidated Financial
Statements.

In October 1997, the Company received a commitment from Prudential Credit
for a credit facility in the aggregate amount of $37.0 million pursuant to the
Bridge Credit Facility. As a commitment fee for the Bridge Credit Facility,
Prudential Credit received warrants to purchase up to 50,000 shares of Common
Stock at an exercise price equal to the closing price of the Common Stock on the
date of issuance. In addition, upon borrowings by the Company, Prudential Credit
will receive a funding fee which includes warrants to purchase up to 150,000
shares of Common Stock calculated on a pro rata basis with respect to the actual
amount borrowed by the Company at an exercise price equal to the closing price
of the Common Stock on the date of issuance.

In addition, in October 1997 the Company entered into an advisory agreement
with Prudential Securities Incorporated whereby Prudential Securities
Incorporated provides certain advisory services in connection with

63
<PAGE> 65

the Block Acquisition. Prudential Securities Incorporated will receive an
advisory fee which includes warrants to purchase up to 25,000 shares of Common
Stock at an exercise price of $13.25 per share.

In October 1997, Prudential Securities Incorporated also received warrants
to purchase up to 10,000 shares of Common Stock at an exercise price of $13.625
per share as a retainer in connection with the Company's obtaining an
anticipated bank credit facility which is expected to provide for borrowings of
up to approximately $50.0 million. The Company expects to obtain such bank
credit facility by the end of 1997. Upon closing of such bank credit facility,
Prudential Securities Incorporated will receive certain compensation including
warrants to purchase an additional 40,000 shares of Common Stock at an exercise
price per share equal to the price of the Common Stock as of the date of closing
of such bank credit facility.

PREFERRED STOCK

The Company is authorized to issue 10,000,000 shares of Preferred Stock.
The Preferred Stock may be issued from time to time in one or more series, and
the Board of Directors is authorized to fix the dividend rights, dividend rates,
any conversion or exchange rights, any voting rights, rights and terms of
redemption (including sinking fund provisions), the redemption price or prices,
the liquidation preferences and any other rights, preferences, privileges and
restrictions of any series of Preferred Stock and the number of shares
constituting such series and the designation thereof. The Company has no present
plans to issue any shares of Preferred Stock.

Depending upon the rights of such Preferred Stock, the issuance of
Preferred Stock could have an adverse effect on holders of Common Stock by
delaying or preventing a change in control of the Company, making removal of the
present management of the Company more difficult or resulting in restrictions
upon the payment of dividends and other distributions to the holders of Common
Stock.

CERTAIN FLORIDA LEGISLATION

The Company is subject to (i) the Florida Control Share Act, which
generally provides that shares acquired in excess of certain specified
thresholds will not possess any voting rights unless such voting rights are
approved by a majority vote of the corporation's disinterested shareholders, and
(ii) the Florida Fair Price Act, which generally requires supermajority approval
by disinterested directors or shareholders of certain specified transactions
between a corporation and holders of more than 10% of the outstanding shares of
the corporation (or their affiliates).

ANTI-TAKEOVER EFFECTS OF PROVISIONS OF THE COMPANY'S ARTICLES OF INCORPORATION
AND BYLAWS

Certain provisions of the Articles of Incorporation and the Bylaws of the
Company could have an anti-takeover effect. These provisions are intended to
enhance the likelihood of continuity and stability in the composition of the
Board of Directors of the Company and in the policies formulated by the Board of
Directors and to discourage certain types of transactions, described below,
which may involve an actual or threatened change of control of the Company. The
provisions are designed to reduce the vulnerability of the Company to an
unsolicited proposal for a takeover of the Company that does not contemplate the
acquisition of all of its outstanding shares or an unsolicited proposal for the
restructuring or sale of all or part of the Company. The provisions are also
intended to discourage certain tactics that may be used in proxy fights. The
Board of Directors believes that, as a general rule, such takeover proposals
would not be in the best interests of the Company and its stockholders.

64
<PAGE> 66

Classified Board of Directors. The Articles of Incorporation provide for
the Board of Directors to be divided into three classes of directors serving
staggered three-year terms. As a result, approximately one-third of the Board of
Directors will be elected each year.

The Board of Directors believes that a classified Board of Directors will
help to assure the continuity and stability of the Board of Directors and the
business strategies and policies of the Company as determined by the Board of
Directors, because the likelihood of continuity and stability in the composition
of the Company's Board of Directors and in the policies formulated by the Board
will be enhanced by staggered three-year terms.

The classified board provision could have the effect of discouraging a
third party from making a tender offer or otherwise attempting to obtain control
of the Company, even though such an attempt might be beneficial to the Company
and its stockholders. In addition, the classified board provision could delay
stockholders who do not agree with the policies of the Board of Directors from
removing a majority of the Board for two years, unless they can show cause and
obtain the requisite vote. See "Number of Directors; Removal" below.

Special Meetings of Stockholders. The Articles of Incorporation provide
that no business may be brought up by a stockholder at a meeting of stockholders
except in accordance with certain provisions set forth in the Articles. Such
provisions require a minimum amount of notice to the Company of any such
business and certain disclosures relating to the business intended to be brought
up.

Amendment of Certain Provisions of the Articles of Incorporation. The
Articles of Incorporation requires the affirmative vote of the holders of at
least 80% of the votes entitled to be cast by the holders of all then
outstanding shares of voting stock in order to amend the Articles' provisions
relating to (i) the classified board, (ii) the method of bringing up business at
stockholders' meetings, (iii) the limitation on the liability of directors, (iv)
indemnification of officers and directors, and (v) the required vote to amend
the foregoing provisions. These voting requirements will make it more difficult
for stockholders to make changes in the Articles which would be designed to
facilitate the exercise of control over the Company. In addition, the
requirement for approval by at least an 80% stockholder vote will enable the
holders of a minority of the voting securities of the Company to prevent the
holders of a majority or more of such securities from amending such provisions
of the Articles.

Number of Directors; Removal. The Articles of Incorporation provide that
the Board of Directors will consist of between two and fifteen members, the
exact number to be fixed from time to time by resolution adopted by a majority
of the directors then in office. The Company currently has eight directors and
no vacancies. Subject to the rights of the holders of any series of Preferred
Stock then outstanding, the Articles provide that directors of the Company may
be removed only for cause and only by the affirmative vote of holders of a
majority of the outstanding shares of voting stock. This provision will preclude
a stockholder from removing incumbent directors without cause and simultaneously
gaining control of the Board of Directors by filling the vacancies created by
such removal with its own nominees.

REGISTRATION RIGHTS

The Company has granted holders of 3,518,813 shares of Common Stock
received in connection with the Company's acquisitions of the allowable assets
of certain optometric and ophthalmology practices certain piggyback and demand
registration rights pursuant to registration rights agreements. In general, each
holder has piggyback registration rights with respect to a maximum of 60% (30%
of which may be registered pursuant to an initial public offering) of such
holder's shares in the event the Company proposes to file a registration
statement under the Securities Act of 1933 for the purposes of effecting an
underwritten public offering of shares of the Company's Common Stock. Each
holder also has demand registration rights, which are effective one year after
completion of the Initial Public Offering, to obligate the Company to file up to
two registration statements covering shares that were not registered in a prior
registration statement up to the 60% maximum. These rights expire two years from
the date of completion of an initial public offering and are subject to certain
conditions and limitations, including the right of the Company to limit the
number of shares included in the registration statement to the amount
recommended by the managing underwriter. The

65
<PAGE> 67

Company is obligated to pay all costs and expenses of the registration statement
except for underwriting discounts, fees and commissions.

The Company has granted certain piggyback and demand registration rights to
Bruce Maller and Richard Lindstrom with respect to a total of 378,463 shares of
Common Stock. Following an initial public offering of Common Stock of the
Company, if the Company proposes to file a registration statement under the
Securities Act for purposes of effecting a public offering of the Company's
Common Stock, Maller and Lindstrom will be entitled to include up to 20% of
their shares in the registration statement. If Maller and Lindstrom are unable
to sell 20% of their shares pursuant to such piggyback registration rights, they
may require the Company, on one occasion, to file a registration statement under
the Securities Act registering such number of shares as is necessary to permit
them to sell the full 20%. These rights expire upon the expiration of their
respective advisory and services agreements with the Company and are subject to
certain conditions and limitations, including the right of the Company to limit
the number of shares included in the registration statement to the amount
recommended by the managing underwriter. The Company is obligated to pay all
costs and expenses of the registration statement except for underwriting
discounts, fees and commissions.

The Company has granted certain piggyback and demand registration rights to
Michael Block, his wife, Saree Block and certain unrelated parties (the "BBG
Shareholders") with respect to an aggregate of 475,397 shares issued in
connection with the Company's acquisition of the stock of BBG-COA, Inc. In the
event the Company files a registration statement under the Securities Act for
purposes of effecting a public offering of shares of Common Stock, the BBG
Shareholders will be entitled to include their shares in the registration
statement. The BBG Shareholders also have demanded registration rights to
obligate the Company at any time after six months from the date of any public
offering, on up to two occasions, to use its best efforts to file a registration
statement covering shares not registered in a prior registration statement.
These rights are subject to certain conditions and limitations including the
right of the Company to limit the number of shares in the registration to the
amount recommended by the managing underwriter. The Company is obligated to pay
all costs and expenses of the registration statement except for underwriting
discounts and commissions.

The Company has granted certain piggyback and demand registration rights to
Prudential, Piper Jaffray and certain unrelated parties (the "Warrant Holders")
with respect to a maximum total of 751,666 shares of Common Stock underlying the
warrants issued to the Warrant Holders. In the event the warrants are exchanged
for shares, the Warrant Holders have piggyback registration rights with respect
to the shares in the event the Company proposes to file a registration statement
under the Securities Act for purposes of effecting a public offering of shares
of the Common Stock. Each of the Warrant Holders also have demand registration
rights to obligate the Company at any time after six months from the date of any
public offering, on one occasion, to use its best efforts to file a registration
statement covering any or all shares not registered in a prior registration
statement. These rights are subject to certain conditions and limitations,
including the right of the Company to limit the number of shares in the
registration to the amount recommended by the managing underwriter. The Company
is obligated to pay all costs and expenses of the registration statement except
for underwriting discounts, fees and commissions.

TRANSFER AGENT AND REGISTRAR

The transfer agent and registrar of the Common Stock is American Stock
Transfer & Trust Company, New York, New York.

66
<PAGE> 68

SHARES ELIGIBLE FOR FUTURE SALE

Upon completion of the Offering, the Company will have 11,607,449 shares of
Common Stock outstanding (11,967,449 if the Underwriters' over-allotment option
is exercised in full). Of these shares, the 2,400,000 shares offered hereby and
the 2,100,000 shares sold in the Initial Public Offering will be freely
tradeable without restriction or further registration under the Securities Act
except for those shares, if any, purchased by "affiliates" of the Company as
that term is defined in Rule 144 under the Securities Act. The remaining
7,107,449 shares outstanding are "Restricted Securities" as that term is defined
in Rule 144 and fall into three categories: (i) 2,834,683 shares held by
"affiliates" who have already held their shares for more than one year, (ii)
1,227,360 shares held by affiliates who have not held their shares for more than
one year and (iii) 3,045,406 shares held by non-affiliates who have not held
their shares for more than one year. In addition, 1,600,000 shares of Common
Stock are reserved under the Plans for exercise of stock options granted by the
Company, of which options to purchase approximately 792,667 shares have been
granted (the "Option Shares"). See "Management -- Stock Option Plans." Finally,
1,026,666 shares of Common Stock are reserved for issuance in the event the
warrants issued to Prudential, Piper Jaffray and certain unrelated parties are
exercised (the "Warrant Shares"). See "Description of Capital Stock -- Warrants"
and "Underwriting."

The Restricted Securities may not be sold unless they are registered under
the Securities Act or are sold pursuant to an exemption from registration, such
as the exemption provided by Rule 144. Rule 144 imposes certain restrictions and
limitations on resale. In general, under Rule 144 as currently in effect, any
affiliate of the Company or any person (or persons whose shares are aggregated
in accordance with the Rule), who has beneficially owned Restricted Securities
for at least one year would be entitled to sell, within any three-month period a
number of such shares that does not exceed the greater of 1% of the then
outstanding shares of Common Stock (approximately 120,244 shares after the
Offering), or the reported average weekly trading volume of the Common Stock on
the Nasdaq National Market during the four calendar weeks preceding the date on
which notice of the sale is filed with the Commission. Sales under Rule 144 are
also subject to certain manner of sale restrictions and notice requirements and
to the availability of current public information concerning the Company. A
person (or persons whose shares are aggregated) who is not an "affiliate" of the
Company at any time during the 90 days preceding a sale, and who has
beneficially owned such shares for at least two years, is currently entitled to
sell such shares under Rule 144(k) without regard to the availability of current
public information, volume limitations, manner of sales provisions or notice
requirements. Currently, 2,834,683 Restricted Securities held by affiliates are
eligible for sale in the public market pursuant to Rule 144, but are subject to
certain "lock-up" agreements described below and beginning December 31, 1997;
January 15, 1998; July 1, 1998; and October 31, 1998, respectively, 343,175;
483,449; 79,645 and 121,702 Restricted Securities held by affiliates will be
eligible for sale in the public market pursuant to Rule 144 unless otherwise
registered pursuant to certain registration rights agreements, but are subject
to certain lock-up and other contractual arrangements described below. Beginning
on December 31, 1997; January 15, 1998; March 27, 1988; April 1, 1998; May 1,
1998; June 1, 1998; July 1, 1998; September 1, 1998; October 1, 1998, October
31, 1998 and October 1998, respectively, 308,668; 1,064,305; 29,053; 128,541;
180,561; 429,084; 69,169; 397,212; 64,402, 353,695 and 37,092 Restricted
Securities held by non-affiliates will be eligible for sale on the public market
pursuant to Rule 144 unless otherwise registered pursuant to certain
registration rights agreements, but are subject to certain lock-up and other
contractual agreements related to Rule 144 described below.

The Company and certain of its officers and directors which include
affiliates holding 3,727,147 Restricted Securities, have executed agreements
pursuant to which each has agreed not to, directly or indirectly, offer, sell,
offer to sell, contract to sell, pledge, grant any option to purchase or
otherwise sell or dispose (or announce any offer, sale, offer of sale, contract
of sale, pledge, grant of any option to purchase or other sale or disposition)
of any shares of Common Stock or any other securities convertible into, or
exercisable or exchangeable for, Common Stock or other capital stock of the
Company or any right to purchase or acquire Common Stock or other capital stock
of the Company, for a period of 180 days after the date of this Prospectus,
without the prior written consent of Prudential Securities Incorporated, on
behalf of the Underwriters, except for bona fide gifts or transfers effected by
such stockholders other than on any securities exchange or in the
over-the-counter market to donees or transferees that agree to be bound by

67
<PAGE> 69

similar agreements. Prudential Securities Incorporated may, in its sole
discretion, at any time and without notice, release all or any portion of the
shares of Common Stock subject to such agreements. In addition, certain
non-affiliates of the Company holding 1,254,470 Restricted Securities had
entered into contractual 180-day lock-up agreements from the date of the Initial
Public Offering similar to the above agreements which prohibit the direct or
indirect disposition of shares without the prior written consent of Prudential
Securities Incorporated until the expiration of such lock-up agreements. Such
non-affiliates have also contractually agreed with the Company to be bound by
the same Rule 144 restrictions placed on affiliates of the Company.

The Option Shares are subject to all the limitations on resale imposed by
Rule 701. In general, shares subject to Rule 701 are subject to the resale
restrictions of Rule 144. However, with respect to resales by non-affiliates, 90
days after the date of this Prospectus, the Option Shares may be resold without
conformance with Rule 144 except for its manner of sale limitation. With respect
to resale of Option Shares by affiliates, all Rule 144 limitations continue to
apply except the one-year holding period. Additionally, the Company filed a Form
S-8 registration statement under the Securities Act to register the shares of
Common Stock subject to then outstanding stock options and the 933,333 shares of
Common Stock issuable pursuant to the Incentive Plan. Shares covered by this
registration statement will thereupon be eligible for sale in the public
markets, subject to lock-up agreements, to the extent applicable. See
"Management." The Warrant Shares are also subject to registration rights
agreements requiring the Company to register such shares under certain
circumstances and otherwise will be eligible for resale subject to all of the
limitations on resale imposed by Rule 144.

Sales of substantial amounts of Common Stock, or the perception that such
sales could occur, could adversely affect market prices for the Common Stock and
could impair the Company's future ability to obtain capital through offerings of
equity securities.

68
<PAGE> 70

UNDERWRITING

The Underwriters named below (the "Underwriters"), for whom Prudential
Securities Incorporated and Wheat, First Securities, Inc. are acting as
representatives (the "Representatives"), have severally agreed, subject to the
terms and conditions contained in the underwriting agreement (the "Underwriting
Agreement"), to purchase from the Company the number of shares of Common Stock
set forth below opposite their respective names:

<TABLE>
<CAPTION>
NUMBER
UNDERWRITER OF SHARES
- ------------------------------------------------------------ ---------
<S> <C>
Prudential Securities Incorporated..........................
Wheat, First Securities, Inc................................

---------

Total................................................ 2,400,000
=========
</TABLE>

The Company is obligated to sell, and the Underwriters are obligated to
purchase, all the shares of Common Stock offered hereby if any are purchased.

The Underwriters, through their Representatives, have advised the Company
that they propose to offer the Common Stock initially at the public offering
price set forth on the cover page of this Prospectus; that the Underwriters may
allow to selected dealers a concession of $ per share; and that such dealers
may reallow a concession of $ per share to certain other dealers. After the
Offering, the offering price and the concessions may be changed by the
Representatives.

The Company has granted the Underwriters options, exercisable for 30 days
from the date of this Prospectus, to purchase up to 360,000 additional shares of
Common Stock at the public offering price, less underwriting discounts and
commissions, as set forth on the cover page of this Prospectus. The Underwriters
may exercise such options solely for the purpose of covering over-allotments
incurred in the sale of the shares of Common Stock offered hereby. To the extent
such options are exercised, each Underwriter will become obligated, subject to
certain conditions, to purchase approximately the same percentage of such
additional shares as the number set forth next to such Underwriter's name in the
preceding table bears to 2,800,000.

Certain of the Company's officers and directors, who in the aggregate
beneficially own approximately 3,868,339 shares of Common Stock, the Company and
certain other stockholders of the Company, have agreed not to, directly or
indirectly, offer, sell, offer to sell, contract to sell, pledge, grant any
option to purchase or otherwise sell or dispose (or announce any offer, sale,
offer of sale, contract of sale, pledge, grant of any option to purchase or
other sale or disposition) of any shares of Common Stock or other capital stock
or any securities convertible into, or exercisable or exchangeable for, any
shares of Common Stock or other capital stock of the Company or any right to
purchase or acquire Common Stock or other capital stock of the Company, for a
period of 180 days after the date of this Prospectus without the prior written
consent of Prudential Securities Incorporated, on behalf of the Underwriters,
other than stock issued by the Company in connection with acquisitions and the
exercise of currently outstanding stock options and except for bona fide gifts
or transfers effected by such stockholders other than on any securities exchange
or in the over-the-counter market to donees or transferees that agree to execute
and be bound by such agreements. Prudential Securities Incorporated may, in its
sole discretion, at any time and without prior notice, release all or any
portion of the shares of Common Stock subject to such agreement. In addition,
certain non-affiliates of the Company holding 1,254,470 Restricted Securities
had entered into contractual 180-day lock-up agreements

69
<PAGE> 71

from the date of the Initial Public Offering similar to the above agreements
which prohibit the direct or indirect disposition of shares until the expiration
of such lock-up agreements without the prior written consent of Prudential
Securities Incorporated.

The Company has agreed to indemnify the several Underwriters and contribute
to losses arising out of certain liabilities, including liabilities under the
Securities Act.

In connection with the Offering, certain Underwriters (and selling group
members, if any) or their respective affiliates who are qualified market makers
on the Nasdaq National Market may engage in passive market making transactions
in the Common Stock of the Company on the Nasdaq National Market in accordance
with Rule 103 of Regulation M under the Exchange Act during the business day
prior to the pricing of the Offering before the commencement of offers and sales
of Common Stock. Passive market makers must comply with applicable volume and
price limitations and must be identified as such. In general, a passive market
maker must display its bid at a price not in excess of the highest independent
bid for such security; if all independent bids are lowered below the passive
market maker's bid, however, such big must then be lowered when certain purchase
limits are exceeded.

In connection with the Offering, certain Underwriters (and selling group
members, if any) and their respective affiliates may engage in transactions that
stabilize, maintain or otherwise affect the market price of the Common Stock.
Such transactions may include stabilization transactions effected in accordance
with Rule 104 of Regulation M under the Securities Exchange Act of 1934,
pursuant to which such persons may bid for or purchase Common Stock for the
purpose of stabilizing its market price. The Underwriters also may create a
short position for the account of the Underwriters by selling more Common Stock
in connection with the Offering than they are committed to purchase from the
Company and in such case may purchase Common Stock in the open market following
completion of the Offering to cover all or a portion of such short position. The
Underwriters may also cover all or a portion of such short position, up to
360,000 shares of Common Stock, by exercising the Underwriters' over-allotment
option referred to above. In addition, Prudential Securities Incorporated, on
behalf of the Underwriters, may impose "penalty bids" under contractual
arrangements with the Underwriters whereby it may reclaim from an Underwriter
(or any selling group member) for the account of the other Underwriters, the
selling concession with respect to Common stock that is distributed in the
Offering but subsequently purchased for the account of the Underwriters in the
open market. Any of the transactions described in this paragraph may result in
the maintenance of the price of the Common Stock at a level above that which
might otherwise prevail in the open market. None of the transactions described
in this paragraph are required, and, if they are undertaken, they may be
discontinued at any time.

At June 30, 1997, an affiliate of Prudential Securities Incorporated loaned
an aggregate of $4.9 million to the Company, represented by a senior secured
note bearing interest at a rate of 10% per annum, payable monthly, and was paid
in full from the net proceeds of the Initial Public Offering. In connection with
the loan, the Company sold to Prudential for $126,000 a warrant to purchase
210,000 shares of Common Stock at a purchase price per share equal to the
Initial Public Offering price. The warrants are exchangeable at any time during
the five-year period commencing at the effective date of the Initial Public
Offering. Subject to the restrictions on transfer, the shares of Common Stock
underlying the warrant are accorded one demand registration right exercisable at
any time between one and five years after the effective date of the Initial
Public Offering and unlimited piggyback registration rights exercisable at any
time before seven years after the effective date of the Initial Public Offering.
Under the terms of the warrant, neither the warrant nor the Common Stock issued
upon exercise of the warrant may be transferred, assigned, pledged or
hypothecated for a period of one year following the effective date of the
Initial Public Offering. See "Description of Capital Stock -- Warrants" and
"-- Registration Rights," and "Shares Eligible for Future Sale."

In October 1997, the Company received a commitment from Prudential Credit
for a credit facility in the aggregate amount of $37.0 million pursuant to the
Bridge Credit Facility. If needed, the proceeds from the borrowing are to be
used to finance the Block Acquisition and certain other optometry and
ophthalmology practice acquisitions. Amounts borrowed pursuant to the Bridge
Credit Facility are secured by a first security interest in all of the Company's
assets. The Bridge Credit Facility must be repaid at the earlier of six months

70
<PAGE> 72

from the date of any borrowing from the Bridge Credit Facility or closing of a
public offering by the Company. The Bridge Credit Facility contains negative and
affirmative covenants and agreements requiring the maintenance of certain
financial ratios. As a commitment fee for the Bridge Credit Facility, Prudential
Credit received warrants to purchase up to 50,000 shares of Common Stock at an
exercise price equal to the closing price of the Common Stock on the date of
issuance. In addition, upon borrowings by the Company, Prudential Credit will
receive a funding fee which includes warrants to purchase up to 150,000 shares
of Common Stock calculated on a pro rata basis with respect to the actual amount
borrowed by the Company at an exercise price equal to the closing price of the
Common Stock on the date of issuance.

In addition, in October 1997 the Company entered into an advisory agreement
with Prudential Securities Incorporated whereby Prudential Securities
Incorporated agreed to provide certain advisory services to the Company in
connection with the Block Acquisition. Prudential Securities Incorporated will
receive an advisory fee which includes warrants to purchase up to 25,000 shares
of Common Stock at an exercise price of $13.25 per share.

LEGAL MATTERS

Certain legal matters in connection with the sale of the shares of Common
Stock offered hereby will be passed upon for the Company by Shumaker, Loop &
Kendrick, LLP, Tampa, Florida and for the Underwriters by King & Spalding,
Atlanta, Georgia. Members in the law firm of Shumaker, Loop & Kendrick, LLP own
an aggregate of approximately 17,000 shares of Common Stock as of October 20,
1997.

EXPERTS

The financial statements of the following entities, appearing in this
Prospectus and Registration Statement have been audited by Ernst & Young LLP,
independent certified public accountants, to the extent indicated in their
reports thereon also appearing elsewhere in this Prospectus and the Registration
Statement:

- Vision Twenty-One, Inc. and Subsidiaries
- Northwest Eye Specialists, P.L.L.C.
- Cambridge Eye Clinic, P.A. -- John W. Lahr, Optometrist, P.A. and
Eyeglass Express Optical Lab, Inc.
- J & R Kennedy, O.D., P.A. and Roseville Opticians, Inc.
- Lindstrom, Samuelson & Hardten Ophthalmology Associates, P.A. and Vision
Correction Centers, Inc.
- Jerald B. Turner, M.D., P.A.
- Eye Institute of Southern Arizona, P.C.
- Optometric Eye Care Centers, P.A.
- Dr. Smith and Associates, P.A. #6950, Dr. Smith and Associates, P.A.
#6958, and Dr. Smith and Associates, P.A. #6966
- Daniel B. Feller, M.D., P.C., d/b/a Paradise Valley Eye Specialists; Eye
Specialists of Arizona Network, P.C.; and Sharona Optical, Inc.
- Gillette, Beiler & Associates, P.A.
- Swagel-Wootton Eye Center, Ltd. and Aztec Optical Limited Partnership

71
<PAGE> 73

- Cochise Eye & Laser, P.C.
- Richard L. Short, D.O., P.A. d/b/a Eye Associates of Pinellas

The financial statements of BBG-COA, Inc., as of April 30, 1997 and 1996
and for each of the three years in the period ended April 30, 1997 included in
this Prospectus and Registration Statement have been so included in reliance on
the report of Price Waterhouse LLP, independent accountants.

Such financial statements have been included herein in reliance upon such
reports given upon the authority of such firms as experts in accounting and
auditing.

ADDITIONAL INFORMATION

The Company is subject to the informational requirement of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), and, in accordance
therewith, files reports, proxy statements and other information with the
Commission.

The Company has filed with the Commission a Registration Statement on Form
S-1 (herein, together with all amendments, exhibits and schedules, referred to
as the "Registration Statement"), under the Securities Act, with respect to the
Common Stock offered hereby. This Prospectus omits certain of the information
contained in the Registration Statement, and reference is hereby made to the
Registration Statement for further information with respect to the Company and
the Common Stock offered hereby. Any statements contained herein concerning the
provisions of any document are not necessarily complete, and in each such
instance reference is made to the copy of such document filed as an exhibit to
the Registration Statement. Each such statement is qualified in its entirety by
such reference.

Reports and other information filed by the Company with the Commission and
copies of the Registration Statement can be inspected and copied at the public
reference facilities maintained by the Commission at Room 1024, 450 Fifth
Street, N.W., Washington D.C. 20549, and should also be available for inspection
and copying at the following regional offices of the Commission: 7 World Trade
Center, Suite 1300, New York, New York 10048; and Northwestern Atrium Center,
500 West Madison Street, Suite 1400 Chicago, Illinois 60661-2511. Copies of such
material also may be obtained from the Public Reference Section of the
Commission, 450 Fifth Street, N.W., Washington D.C. 20549, at prescribed rates,
and through the Commission's Internet address at "http://www.sec.gov".

72
<PAGE> 74

INDEX TO FINANCIAL STATEMENTS

<TABLE>
<CAPTION>
PAGE
----
<S> <C>
UNAUDITED PRO FORMA CONSOLIDATED FINANCIAL INFORMATION
Basis of Presentation....................................... F-5
Unaudited Pro Forma Consolidated Statements of
Operations -- Year Ended December 31, 1996................ F-6
Unaudited Pro Forma Consolidated Statements of
Operations -- Nine-Month Period Ended September 30,
1997...................................................... F-7
Unaudited Pro Forma Consolidated Balance Sheet as of
September 30, 1997........................................ F-8
Notes to Unaudited Pro Forma Consolidated Financial
Information............................................... F-9

FINANCIAL STATEMENTS OF VISION TWENTY-ONE, INC. AND SUBSIDIARIES
Report of Independent Certified Public Accountants.......... F-13
Consolidated Balance Sheets as of December 31, 1995 and 1996
and September 30, 1997 (Unaudited)........................ F-14
Consolidated Statements of Operations for the Years Ended
December 31, 1994, 1995 and 1996 and the Nine-Month
Periods Ended September 30, 1996 and 1997 (Unaudited)..... F-15
Consolidated Statements of Stockholders' Equity (Deficit)
for the Years Ended December 31, 1994, 1995 and 1996 and
the Nine-Month Period Ended September 30, 1997
(Unaudited)............................................... F-16
Consolidated Statements of Cash Flows for the Years Ended
December 31, 1994, 1995 and 1996 and the Nine-Month
Periods Ended September 30, 1996 and 1997 (Unaudited)..... F-17
Notes to Consolidated Financial Statements.................. F-18

FINANCIAL STATEMENTS OF BBG-COA, INC.
Report of Independent Certified Public Accountants.......... F-31
Consolidated Balance Sheets as of April 30, 1996 and 1997... F-32
Consolidated Statements of Operations and Accumulated
Deficit for the Years Ended April 30, 1995, 1996 and
1997...................................................... F-33
Consolidated Statements of Cash Flows for the Years Ended
April 30, 1995, 1996 and 1997............................. F-34
Notes to Consolidated Financial Statements.................. F-35
Consolidated Balance Sheet as of July 31, 1997
(Unaudited)............................................... F-41
Consolidated Statements of Operations and Accumulated
Deficit for the Three-Month Periods Ended July 31, 1996
and 1997 (Unaudited)...................................... F-42
Consolidated Statements of Cash Flows for the Three-Month
Periods Ended July 31, 1996 and 1997 (Unaudited).......... F-43
Notes to Consolidated Financial Statements (Unaudited)...... F-44

FINANCIAL STATEMENTS OF EYE INSTITUTE OF SOUTHERN ARIZONA, P.C.
Report of Independent Certified Public Accountants.......... F-45
Balance Sheets as of December 31, 1995 and November 30,
1996...................................................... F-46
Statements of Operations for the Year Ended December 31,
1995 and Eleven-Month Period Ended November 30, 1996...... F-47
Statements of Stockholders' Equity (Deficit) for the Year
Ended December 31, 1995 and Eleven-Month Period Ended
November 30, 1996......................................... F-48
Statements of Cash Flows for the Year Ended December 31,
1995 and for the Eleven-Month Period Ended November 30,
1996...................................................... F-49
Notes to Financial Statements............................... F-50
</TABLE>

F-1
<PAGE> 75

FINANCIAL STATEMENTS OF
DANIEL B. FELLER, M.D., P.C., D/B/A
PARADISE VALLEY EYE SPECIALISTS;
EYE SPECIALISTS OF ARIZONA NETWORK, P.C.;
AND SHARONA OPTICAL, INC.

<TABLE>
<CAPTION>
PAGE
-----
<S> <C>
Report of Independent Certified Public Accountants.......... F-54
Combined Balance Sheets as of December 31, 1995 and November
30, 1996.................................................. F-55
Combined Statements of Income for the Year Ended December
31, 1995 and for the Eleven-Month Period Ended November
30, 1996.................................................. F-56
Combined Statements of Stockholders' Equity for the Year
Ended December 31, 1995 and the Eleven-Month Period Ended
November 30, 1996......................................... F-57
Combined Statements of Cash Flows for the Year Ended
December 31, 1995 and for the Eleven-Month Period Ended
November 30, 1996......................................... F-58
Notes to Combined Financial Statements...................... F-59

FINANCIAL STATEMENTS OF NORTHWEST EYE SPECIALISTS, P.L.L.C.
Report of Independent Certified Public Accountants.......... F-65
Balance Sheets as of December 31, 1995 and November 30,
1996...................................................... F-66
Statements of Income for the Year Ended December 31, 1995
and for the Eleven-Month Period Ended November 30, 1996... F-67
Statements of Partners' Equity for the Year Ended December
31, 1995 and for the Eleven-Month Period Ended November
30, 1996.................................................. F-68
Statements of Cash Flows for the Year Ended December 31,
1995 and for the Eleven-Month Period Ended November 30,
1996...................................................... F-69
Notes to Financial Statements............................... F-70

FINANCIAL STATEMENTS OF LINDSTROM, SAMUELSON & HARDTEN
OPHTHALMOLOGY ASSOCIATES, P.A. AND
VISION CORRECTION CENTERS, INC.
Report of Independent Certified Public Accountants.......... F-74
Combined Balance Sheets as of December 31, 1995 and November
30, 1996.................................................. F-75
Combined Statements of Operations for the Year Ended
December 31, 1995 and for the Eleven-Month Period Ended
November 30, 1996......................................... F-76
Combined Statements of Stockholders' Equity for the Year
Ended December 31, 1995 and for the Eleven-Month Period
Ended November 30, 1996................................... F-77
Combined Statements of Cash Flows for the Year Ended
December 31, 1995 and for the Eleven-Month Period Ended
November 30, 1996......................................... F-78
Notes to Combined Financial Statements...................... F-79

FINANCIAL STATEMENTS OF CAMBRIDGE EYE CLINIC, P.A. --
JOHN W. LAHR, OPTOMETRIST, P.A. AND
EYEGLASS EXPRESS OPTICAL LAB, INC.
Report of Independent Certified Public Accountants.......... F-84
Combined Balance Sheets as of December 31, 1995 and November
30, 1996.................................................. F-85
Combined Statements of Operations for the Year Ended
December 31, 1995 and for the Eleven-Month Period Ended
November 30, 1996......................................... F-86
Combined Statements of Stockholders' Equity for the Year
Ended December 31, 1995 and for the Eleven-Month Period
Ended December 31, 1996................................... F-87
Combined Statements of Cash Flows for the Year Ended
December 31, 1995 and for the Eleven-Month Period Ended
November 30, 1996......................................... F-88
Notes to Combined Financial Statements...................... F-89

FINANCIAL STATEMENTS OF OPTOMETRIC EYE CARE CENTERS, P.A.
Report of Independent Certified Public Accountants.......... F-95
Balance Sheets as of December 31, 1995 and November 30,
1996...................................................... F-96
</TABLE>

F-2
<PAGE> 76

<TABLE>
<CAPTION>
PAGE
-----
<S> <C>
Statements of Income for the Year Ended December 31, 1995
and for the Eleven-Month Period Ended November 30, 1996... F-97
Statements of Stockholders' Equity for the Year Ended
December 31, 1995 and for the Eleven-Month Period Ended
November 30, 1996......................................... F-98
Statements of Cash Flows for the Year Ended December 31,
1995 and for the Eleven-Month Period Ended November 30,
1996...................................................... F-99
Notes to Financial Statements............................... F-100

FINANCIAL STATEMENTS OF JERALD B. TURNER, M.D., P.A.
Report of Independent Certified Public Accountants.......... F-104
Balance Sheets as of December 31, 1995 and November 30,
1996...................................................... F-105
Statements of Income for the Year Ended December 31, 1995
and for the Eleven-Month Period Ended November 30, 1996... F-106
Statements of Stockholder's Equity for the Year Ended
December 31, 1995 and for the Eleven-Month Period Ended
November 30, 1996......................................... F-107
Statements of Cash Flows for the Year Ended December 31,
1995 and for the Eleven-Month Period Ended November 30,
1996...................................................... F-108
Notes to Financial Statements............................... F-109

FINANCIAL STATEMENTS OF GILLETTE, BEILER & ASSOCIATES, P.A.
Report of Independent Certified Public Accountants.......... F-112
Balance Sheets as of December 31, 1995 and November 30,
1996...................................................... F-113
Statements of Operations for the Year Ended December 31,
1995 and for the Eleven-Month Period Ended November 30,
1996...................................................... F-114
Statements of Stockholders' Deficit for the Year Ended
December 31, 1995 and for the Eleven-Month Period Ended
November 30, 1996......................................... F-115
Statements of Cash Flows for the Year Ended December 31,
1995 and for the Eleven-Month Period Ended November 30,
1996...................................................... F-116
Notes to Financial Statements............................... F-117

FINANCIAL STATEMENTS OF J & R KENNEDY, O.D., P.A.
AND ROSEVILLE OPTICIANS, INC.
Report of Independent Certified Public Accountants.......... F-122
Combined Balance Sheets as of December 31, 1995 and November
30, 1996.................................................. F-123
Combined Statements of Income for the Year Ended December
31, 1995 and for the Eleven-Month Period Ended November
30, 1996.................................................. F-124
Combined Statements of Stockholders' Equity for the Year
Ended December 31, 1995 and for the Eleven-Month Period
Ended November 30, 1996................................... F-125
Combined Statements of Cash Flows for the Year Ended
December 31, 1995 and for the Eleven-Month Period Ended
November 30, 1996......................................... F-126
Notes to Combined Financial Statements...................... F-127

FINANCIAL STATEMENTS OF DR. SMITH AND ASSOCIATES, P.A.
#6950, DR. SMITH AND ASSOCIATES,
P.A. #6958, AND DR. SMITH AND
ASSOCIATES P.A. #6966
Report of Independent Certified Public Accountants.......... F-132
Combined Balance Sheets as of December 31, 1995 and November
30, 1996.................................................. F-133
Combined Statements of Income for the Year Ended December
31, 1995 and for the Eleven-Month Period Ended November
30, 1996.................................................. F-134
Combined Statements of Stockholders' Equity for the Year
Ended December 31, 1995 and for the Eleven-Month Period
Ended November 30, 1996................................... F-135
Combined Statements of Cash Flows for the Year Ended
December 31, 1995 and for the Eleven-Month Period Ended
November 30, 1996......................................... F-136
Notes to Combined Financial Statements...................... F-137
</TABLE>

F-3
<PAGE> 77

<TABLE>
<CAPTION>
PAGE
-----
<S> <C>
FINANCIAL STATEMENTS OF SWAGEL-WOOTTON EYE CENTER, LTD. AND
AZTEC OPTICAL LIMITED PARTNERSHIP
Report of Independent Certified Public Accountants.......... F-142
Combined Balance Sheets as of December 31, 1996 and May 31,
1997 (Unaudited).......................................... F-143
Combined Statements of Operations for the Year Ended
December 31, 1996 and the Five-Month Periods Ended May 31,
1996 and 1997 (Unaudited)................................. F-144
Combined Statements of Stockholders' (Partners') Equity for
the Year Ended December 31, 1996 and the Five-Month Period
Ended May 31, 1997 (Unaudited)............................ F-145
Combined Statements of Cash Flows for the Year Ended
December 31, 1996 and the Five-Month Periods Ended May 31,
1996 and 1997 (Unaudited)................................. F-146
Notes to Combined Financial Statements...................... F-147

FINANCIAL STATEMENTS OF RICHARD L. SHORT, D.O., P.A.
D/B/A EYE ASSOCIATES OF PINELLAS
Report of Independent Certified Public Accountants.......... F-151
Balance Sheet as of December 31, 1996....................... F-152
Statement of Income for the Year Ended December 31, 1996.... F-153
Statement of Stockholder's Equity for the Year Ended
December 31, 1996......................................... F-154
Statement of Cash Flows for the Year Ended December 31,
1996...................................................... F-155
Notes to Financial Statements............................... F-156

FINANCIAL STATEMENTS OF COCHISE EYE & LASER, P.C.
Report of Independent Certified Public Accountants.......... F-162
Balance Sheets as of July 31, 1996 and April 30, 1997
(Unaudited)............................................... F-163
Statements of Income for the Year Ended July 31, 1996 and
the Nine-Month Periods Ended April 30, 1996 and 1997
(Unaudited)............................................... F-164
Statements of Stockholders' Equity for the Year Ended July
31, 1996 and the Nine-Month Period Ended April 30, 1997
(Unaudited)............................................... F-165
Statements of Cash Flows for the Year Ended July 31, 1996
and the Nine-Month Periods Ended April 30, 1996 and 1997
(Unaudited)............................................... F-166
Notes to Financial Statements............................... F-167
</TABLE>

F-4
<PAGE> 78

VISION TWENTY-ONE, INC. AND SUBSIDIARIES

UNAUDITED PRO FORMA
CONSOLIDATED FINANCIAL INFORMATION

BASIS OF PRESENTATION

Effective December 1, 1996, Vision Twenty-One, Inc. (the "Company")
acquired substantially all of the assets, primarily consisting of accounts
receivable, leases, contracts, equipment and other tangible and intangible
assets (the "business assets"), and assumed certain liabilities of 10
ophthalmology and optometry practices located in Minnesota, Arizona and Florida
(the "1996 Acquisitions"). In conjunction with the 1996 Acquisitions, the
Company entered into various business management agreements (the "Management
Agreements") with the professional associations operating those practices. From
March 1, 1997 to the Company's Initial Public Offering on August 18, 1997, the
Company acquired the business assets of one optometry clinic, 11 ophthalmology
clinics, six optical dispensaries and four ASCs located in Arizona and Florida
(the "Pre IPO Acquisitions"). In conjunction with the Pre IPO Acquisitions, the
Company entered into Management Agreements with the professional associations
operating the practices. In September 1997, the Company acquired the business
assets of four ophthalmology clinics and two optical dispensaries located in
Arizona, Florida and New York and acquired the business assets of a managed care
company (the "September Acquisitions"). In October 1997, the Company acquired
the business assets of one optical dispensary, two ophthalmology clinics and one
ASC located in Florida (the "October Acquisitions"). In conjunction with the
September and October Acquisitions, the Company entered into various Management
Agreements with the professional associations operating those practices.
Effective October 31, 1997, the Company acquired all of the issued and
outstanding stock of BBG-COA, Inc. (the "Block Acquisition"). The Pre IPO
Acquisitions, the September Acquisitions and the October Acquisitions are
collectively referred to as the "1997 Acquisitions." Except for the Company's
acquisitions of managed care companies and the Block Acquisition, which were
accounted for under the purchase method of accounting, its acquisitions have
been accounted for by recording the assets and liabilities at fair value and
allocating the remaining costs to the related Management Agreements.

The following unaudited pro forma consolidated financial statements are
based on the historical consolidated financial statements of the Company,
adjusted to give effect to the transactions described below. The unaudited pro
forma consolidated statements of operations of the Company for the year ended
December 31, 1996 give effect to the following transactions as if they had
occurred on January 1, 1996: (i) the 1996 Acquisitions, (ii) the 1997
Acquisitions, (iii) the Block Acquisition, (iv) the Initial Public Offering and
the application of the net proceeds therefrom and (v) the Offering and the
application of the estimated net proceeds therefrom. The unaudited pro forma
consolidated statements of operations of the Company for the nine-month period
ended September 30, 1997 give effect to the following transactions as if they
had occurred on January 1, 1996: (i) the 1997 Acquisitions, (ii) the Block
Acquisition, (iii) the Initial Public Offering and the application of the net
proceeds therefrom and (iv) the Offering and the application of the estimated
net proceeds therefrom. The unaudited pro forma consolidated balance sheet of
the Company as of September 30, 1997 gives effect to the October Acquisitions
and the Block Acquisition at that date and the consummation of the Offering and
the application of the estimated net proceeds therefrom.

The unaudited pro forma consolidated financial statements are based on the
historical financial statements of the Company, Block Vision and the
professional or other entities which owned the business assets which were the
subject of the 1996 and 1997 Acquisitions and give effect to the 1996
Acquisitions, the 1997 Acquisitions, the Block Acquisition, the Initial Public
Offering and the Offering and the assumptions and adjustments described in the
notes thereto. The unaudited pro forma consolidated financial information does
not purport to indicate what the results of operations or financial condition of
the Company would have been if the 1996 and 1997 Acquisitions, the Block
Acquisition, the Initial Public Offering and the Offering had been effected on
the dates indicated or to project the future results of operations or financial
condition of the Company. Such pro forma financial information should be read in
conjunction with the consolidated financial statements of the Company and the
financial statements of the other entities included in this Prospectus.

F-5
<PAGE> 79

VISION TWENTY-ONE, INC. AND SUBSIDIARIES

UNAUDITED PRO FORMA CONSOLIDATED
STATEMENTS OF OPERATIONS
YEAR ENDED DECEMBER 31, 1996

<TABLE>
<CAPTION>
HISTORICAL
COMPANY BLOCK 1996 AND
FOR THE TWELVE-MONTH FOR THE TWELVE-MONTH BLOCK 1997
PERIOD ENDED PERIOD ENDED ACQUISITION ACQUISITIONS
DECEMBER 31, 1996 DECEMBER 31, 1996 ADJUSTMENTS ADJUSTMENTS
-------------------- -------------------- ----------- ------------
<S> <C> <C> <C> <C>
Revenues:
Practice management
fees................... $ 1,942,843 $37,538,000(2)
Managed care............. 7,315,196 $12,279,598 3,492,000(1)
Buying group sales....... 54,832,374
Other revenue............ 305,654 26,244 3,000(1)
----------- ----------- ----------- -----------
9,563,693 67,138,216 -- 41,033,000
Operating expenses:
Practice management
expenses............... 1,244,173 30,504,000(2)
Medical claims........... 9,128,659 8,741,585 2,919,000(1)
Cost of buying group
sales.................. 52,084,442 --
Salaries, wages and
benefits............... 1,889,395 2,530,611 (90,000)(4) 38,000(1)
2,438,000(14)
Business development..... 1,926,895 --
General and
administrative......... 1,208,678 2,274,141 322,000(1)
230,000(14)
Depreciation and
amortization........... 126,046 556,000 (372,000)(5) 2,338,000(3)
1,371,000(5)
----------- ----------- ----------- -----------
15,523,846 66,186,779 909,000 38,789,000
Income (loss) from
operations............... (5,960,153) 951,437 (909,000) 2,244,000
Interest expense.......... 159,484 333,074 1,195,000(13) 204,000(6)
----------- ----------- ----------- -----------
Income (loss) before
income taxes............. (6,119,637) 618,363 (2,104,000) 2,040,000
Income tax expense
(benefit)................ -- 391,194 (434,194)(8) (1,536,000)(8)
----------- ----------- ----------- -----------
Net income (loss)......... $(6,119,637) $ 227,169 $(1,669,806) $ 3,576,000
=========== =========== =========== ===========
Net income (loss) per
common share............. $ (1.02)
===========
Weighted average number of
common shares
outstanding.............. 5,979,543
===========

Business development..... 1,926,895 1,926,895
General and
administrative......... 4,034,819 4,034,819
--
Depreciation and
amortization........... 4,019,046 -- 4,019,046

------------ --------- ------------
121,408,625 -- 121,408,625
Income (loss) from
operations............... (3,673,716) -- (3,673,716)
Interest expense.......... 1,891,558 (359,000)(7) 1,532,558
------------ --------- ------------
Income (loss) before
income taxes............. (5,565,274) 359,000 (5,206,274)
Income tax expense
(benefit)................ (1,579,000) 135,000(8) (1,444,000)
------------ --------- ------------
Net income (loss)......... $ (3,986,274) $ 224,000 $ (3,762,274)
============ ========= ============
Net income (loss) per
common share............. $ (0.52) $ (0.38)(9)
============ ============
Weighted average number of
common shares
outstanding.............. 7,647,492 9,853,678(9)
============ ============
</TABLE>

See accompanying notes to unaudited pro forma consolidated financial
information.

F-6
<PAGE> 80

VISION TWENTY-ONE, INC. AND SUBSIDIARIES

UNAUDITED PRO FORMA CONSOLIDATED
STATEMENTS OF OPERATIONS
NINE-MONTH PERIOD ENDED SEPTEMBER 30, 1997

<TABLE>
<CAPTION>
HISTORICAL
COMPANY BLOCK
FOR THE NINE-MONTH FOR THE NINE-MONTH BLOCK 1997
PERIOD ENDED PERIOD ENDED ACQUISITION ACQUISITIONS
SEPTEMBER 30, 1997 JULY 31, 1997 ADJUSTMENTS ADJUSTMENTS
------------------ ------------------ ----------- ------------
<S> <C> <C> <C> <C>
Revenues:
Practice management fees..... $19,684,406 $11,388,000(2)
Managed care................. 9,307,430 $11,878,000 1,461,000(1)
Buying group revenue......... 40,389,000 --
Other revenue................ 451,925 147,000 --
----------- ----------- ----------- -----------
29,443,761 52,414,000 -- 12,849,000
----------- ----------- ----------- -----------
Operating expenses:
Practice management
expenses................... 15,977,619 9,190,000(2)
Medical claims............... 8,052,709 8,103,000 1,186,000(1)
Cost of buying group sales... 38,360,000 --
Salaries, wages and
benefits................... 3,405,067 2,228,000 (68,000)(4) --
General and administrative... 1,339,555 1,770,000 104,000(1)
Depreciation and
amortization............... 954,313 530,000 (297,000)(5) 808,000(3)
1,028,000(5) --
----------- ----------- ----------- -----------
29,729,263 50,991,000 663,000 11,288,000
----------- ----------- ----------- -----------
Income (loss) from
operations................... (285,502) 1,423,000 (663,000) 1,561,000
Interest expense.............. 740,777 181,000 1,054,000(13) --
----------- ----------- ----------- -----------
Income (loss) before income
taxes........................ (1,026,279) 1,242,000 (1,717,000) 1,561,000
Income taxes.................. -- 601,000 (393,000)(8) 201,000(8)
----------- ----------- ----------- -----------
Income (loss) before
extraordinary charge(15)..... $(1,026,279) $ 641,000 $(1,324,000) $ 1,360,000
=========== =========== =========== ===========
Income (loss) before
extraordinary charge per
common share(15)............. $ (0.15)
===========
Weighted average number of
common shares outstanding.... 6,670,779
===========

INITIAL
PUBLIC PRO FORMA
PRO FORMA OFFERING CONSOLIDATED
CONSOLIDATED ADJUSTMENTS AFTER OFFERING
------------ ----------- --------------
<S> <C> <C> <C>
Revenues:
Practice management fees..... $31,072,406 $31,072,406
Managed care................. 22,646,430 22,646,430
Buying group revenue......... 40,389,000 40,389,000
Other revenue................ 598,925 598,925
----------- --------- -----------
94,706,761 94,706,761
----------- --------- -----------
Operating expenses:
Practice management
expenses................... 25,167,619 25,167,619
Medical claims............... 17,341,709 17,341,709
Cost of buying group sales... 38,360,000 38,360,000
Salaries, wages and
benefits................... 5,565,067 5,565,067
General and administrative... 3,213,555 3,213,555
Depreciation and
amortization............... 3,023,313 -- 3,023,313
--
----------- --------- -----------
92,671,263 -- 92,671,263
----------- --------- -----------
Income (loss) from
operations................... 2,035,498 -- 2,035,498
Interest expense.............. 1,975,777 (700,000)(7) 1,275,777
----------- --------- -----------
Income (loss) before income
taxes........................ 59,721 700,000 759,721
Income taxes.................. 409,000 263,000(8) 672,000
----------- --------- -----------
Income (loss) before
extraordinary charge(15)..... $ (349,279) $ 437,000 $ 87,721
=========== ========= ===========
Income (loss) before
extraordinary charge per
common share(15)............. $ (0.05) $ 0.01(9)
=========== ===========
Weighted average number of
common shares outstanding.... 7,647,492 9,853,678(9)
=========== ===========
</TABLE>

See accompanying notes to unaudited pro forma consolidated financial
information.

F-7
<PAGE> 81

VISION TWENTY-ONE, INC. AND SUBSIDIARIES

UNAUDITED PRO FORMA
CONSOLIDATED BALANCE SHEET
SEPTEMBER 30, 1997

<TABLE>
<CAPTION>
HISTORICAL
COMPANY BLOCK
AS OF AS OF BLOCK OCTOBER
SEPTEMBER 30, JULY 31, ACQUISITION ACQUISITION
1997 1997 ADJUSTMENTS ADJUSTMENTS
------------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents....... $ 2,615,335 $ 338,845 (750,000)(11) $(1,792,000)(10)
(427,000)(13)
Accounts receivable............. 7,471,833 6,562,298 --
Other receivables............... 1,321,389 --
Prepaid expenses and other
current assets................ 889,941 56,858 --
----------- ----------- ----------- -----------
Total current assets...... 12,298,498 6,958,001 (1,177,000) (1,792,000)
Fixed assets, net................. 3,263,943 977,787 --
Intangible assets................. 28,050,825 5,051,204 29,211,942(11) 3,150,000(10)
590,000(10)
Other assets...................... 157,489 258,513 --
----------- ----------- ----------- -----------
Total assets.............. $43,770,755 $13,245,505 $28,034,942 $ 1,948,000
=========== =========== =========== ===========

LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable................ $ 955,998 $ 6,601,635 --
Accrued expenses................ 967,261 193,956 --
Accrued acquisition and offering
costs......................... -- --
Accrued compensation............ 1,317,385 --
Due to managed professional
associations.................. 1,814,691 --
Due to selling shareholders..... 3,800,228 25,600,000(11)
Current portion of long-term
debt.......................... 112,889 --
Current portion of obligations
under capital leases.......... 289,742 27,511 --
Medical claims payable.......... 1,457,866 --
----------- ----------- ----------- -----------
Total current
liabilities............. 10,716,060 6,823,102 25,600,000 --
Deferred rent payable............. 262,376 --
Obligations under capital
leases.......................... 111,046 -- --
Long-term debt, less current
portion......................... 66,264 3,124,134 --
Other long-term liabilities....... 40,211
Deferred income taxes............. 1,716,000 590,000(10)
Stockholders' equity:
Common stock.................... 8,591 13,638 (13,638)(11) 101(10)
458(11)
Additional paid-in capital...... 40,269,136 3,828,365 (3,828,365)(11) 1,357,899(10)
6,049,542(11)
70,000(11)
205,000(13)
Deferred compensation........... (435,810) --
Accumulated deficit............. (8,942,908) (583,945) 583,945(11) --
(632,000)(13)
----------- ----------- ----------- -----------
Total stockholders'
equity.................. 30,899,009 3,258,058 2,434,942 1,358,000
----------- ----------- ----------- -----------
Total liabilities and
stockholders' equity.... $43,770,755 $13,245,505 $28,034,942 $ 1,948,000
=========== =========== =========== ===========

PRO FORMA
PRO FORMA OFFERING CONSOLIDATED
CONSOLIDATED ADJUSTMENTS AFTER OFFERING
------------ ------------ --------------
<S> <C> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents....... $ (14,820) $ 15,000 $ 180

Accounts receivable............. 14,034,131 14,034,131
Other receivables............... 1,321,389 1,321,389
Prepaid expenses and other
current assets................ 946,799 946,799
------------ ------------ -----------
Total current assets...... 16,287,499 15,000 16,302,499
Fixed assets, net................. 4,241,730 4,241,730
Intangible assets................. 66,053,971 66,053,971

Other assets...................... 416,002 416,002
------------ ------------ -----------
Total assets.............. $ 86,999,202 $ 15,000 $87,014,202
============ ============ ===========
LIABILITIES AND STOCKHOLDERS' EQUI
Current liabilities:
Accounts payable................ $ 7,557,633 $ 7,557,633
Accrued expenses................ 1,161,217 1,161,217
Accrued acquisition and offering
costs......................... -- --
Accrued compensation............ 1,317,385 1,317,385
Due to managed professional
associations.................. 1,814,691 1,814,691
Due to selling shareholders..... 29,400,228 $ (3,800,228)(12) --
(25,600,000)(12)
Current portion of long-term
debt.......................... 112,889 5,698,728 5,811,617
Current portion of obligations
under capital leases.......... 317,253 317,253
Medical claims payable.......... 1,457,866 1,457,866
------------ ------------ -----------
Total current
liabilities............. 43,139,162 (23,701,500) 19,437,662
Deferred rent payable............. 262,376 262,376
Obligations under capital
leases.......................... 111,046 111,046
Long-term debt, less current
portion......................... 3,190,398 3,190,398
Other long-term liabilities....... 40,211 40,211
Deferred income taxes............. 2,306,000 2,306,000
Stockholders' equity:
Common stock.................... 9,150 2,400(12) 11,550

Additional paid-in capital...... 47,951,577 23,714,100(12) 71,665,677

Deferred compensation........... (435,810) (435,810)
Accumulated deficit............. (9,574,908) 23,716,500

------------ ------------ -----------
Total stockholders'
equity.................. 37,950,009 23,716,500 61,666,509
------------ ------------ -----------
Total liabilities and
stockholders' equity.... $ 86,999,202 $ 15,000 $87,014,202
============ ============ ===========
</TABLE>

See accompanying notes to unaudited pro forma consolidated financial
information.

F-8
<PAGE> 82

VISION TWENTY-ONE, INC. AND SUBSIDIARIES

NOTES TO UNAUDITED PRO FORMA
CONSOLIDATED FINANCIAL INFORMATION

(1) The Company has acquired two managed care businesses -- one on December
1, 1996 (a 1996 Acquisition) and the other on September 1, 1997 (a 1997
Acquisition). These adjustments reflect the pro forma additional managed care
revenue, medical claims, salaries, wages and benefits and general and
administrative expenses that would have been generated by each business if the
1996 Acquisition and the 1997 Acquisition had occurred on January 1, 1996. The
managed care revenue, medical claims, salaries, wages and benefits and general
and administrative expenses for the nine-month period ended September 30, 1996
reflect the pro forma additional amounts that would have been incurred if the
1997 Acquisition had occurred on January 1, 1996.

<TABLE>
<CAPTION>
TWELVE-MONTH NINE-MONTH
PERIOD ENDED PERIOD ENDED
12/31/96 9/30/97
------------ ------------
<S> <C> <C>
Revenues:
Managed care.............................................. $3,492,000 $1,461,000
Other..................................................... 3,000 --
---------- ----------
3,495,000 1,461,000
---------- ----------
Expenses:
Medical claims............................................ 2,919,000 1,186,000
Salaries, wages and benefits.............................. 38,000 --
General and administrative................................ 322,000 104,000
---------- ----------
3,279,000 1,290,000
---------- ----------
Net......................................................... $ 216,000 $ 171,000
========== ==========
</TABLE>

(2) The practice management fees and practice management expenses for the
year ended December 31, 1996 reflect the pro forma additional practice
management fee revenue that would have been earned through the management of the
related managed professional entities under the Management Agreements if the
1996 Acquisitions (which were effective on December 1, 1996) and the 1997
Acquisitions had occurred on January 1, 1996, less approximately $479,000 earned
by the Company on a historical basis through a management agreement with managed
professional entities included in the 1996 Acquisitions. The practice management
fees and practice management expenses for the nine-month period ended September
30, 1997 reflect the pro forma additional practice management fee revenue that
would have been earned through the management of the related managed
professional entities under the Management Agreements if the 1997 Acquisitions
had occurred on January 1, 1996. This revenue represents reimbursement of
practice management expenses incurred by the Company, including depreciation of
fixed assets. In addition, the Company receives a percentage (ranging from 24 to
37 percent) of the related managed professional entities net earnings before
interest, taxes and shareholder physician expenses, as determined under the
related Management Agreements.

F-9
<PAGE> 83

The following analysis summarizes the adjustments related to practice
management fees:

<TABLE>
<CAPTION>
1996 AND 1997
ACQUISITION ADJUSTMENTS
---------------------------
TWELVE-MONTH NINE-MONTH
PERIOD ENDED PERIOD ENDED
12/31/96 9/30/97
------------ ------------
<S> <C> <C>
Practice management fee summary:
Reimbursement of practice management expenses:
Practice management expenses.............................. $30,504,000 $ 9,190,000
Depreciation.............................................. 1,140,000 347,000
----------- -----------
31,644,000 9,537,000
Share of Managed Professional Associations' net earnings.... 6,373,000 1,851,000
----------- -----------
38,017,000 11,388,000
Less management fee earned by the Company through a
management agreement with a Managed Professional
Association for the eleven-month period ended November 30,
1996...................................................... (479,000) --
----------- -----------
Practice management fee revenue............................. $37,538,000 $11,388,000
=========== ===========
</TABLE>

The share of Managed Professional Associations' net earnings was computed
as follows:

<TABLE>
<CAPTION>
TWELVE-MONTH NINE-MONTH
PERIOD ENDED PERIOD ENDED
12/31/96 9/30/97
------------ ------------
<S> <C> <C>
Gross practice revenues..................................... $52,887,000 $15,707,000
less defined practice expenses including depreciation..... 31,644,000 9,537,000
----------- -----------
Managed Professional Associations'
net earnings.............................................. $21,243,000 $ 6,170,000
Weighted-average management fee percentage.................. 30% 30%
----------- -----------
Share of Managed Professional Associations'
net earnings.............................................. $ 6,373,000 $ 1,851,000
=========== ===========
</TABLE>

The pro forma adjustments for practice management fees and practice
management expenses are based on the actual results of operations of the
individual practices, as adjusted for the terms of the Management Agreements.
While the Company expects the operations of the practices to improve under its
management, there can be no assurance that operations will not deteriorate.
However, the Company believes this information is the best available objective
information upon which to evaluate the performance of the practices.

(3) Depreciation and amortization reflect depreciation of the related
managed professional entities' fixed assets acquired over their estimated useful
life and amortization of intangible assets over an average life of 25 years:

<TABLE>
<CAPTION>
1996 AND 1997
ACQUISITION ADJUSTMENTS
---------------------------
TWELVE-MONTH NINE-MONTH
PERIOD ENDED PERIOD ENDED
12/31/96 9/30/97
------------ ------------
<S> <C> <C>
Fixed assets(a)............................................. $ 1,140,000 $ 347,000
Intangible assets(b)........................................ 1,198,000 461,000
----------- ----------
$ 2,338,000 $ 808,000
=========== ==========
</TABLE>

(a) Depreciation on fixed assets is calculated on a straight-line method
over the estimated useful lives of the various classes of assets, which range
from three to seven years.

(b) Amortization of intangible assets is calculated on a straight-line
method over an average life of 25 years. Included in amortization expense is
$191,000 and $109,000 for the twelve-month period ended

F-10
<PAGE> 84

December 31, 1996 and the nine-month period ended September 30, 1997,
respectively, for the addition to intangible assets and corresponding increase
in deferred income taxes for the value of the portion of the Management
Agreements acquired in non-taxable transactions as if they had occurred on
January 1, 1996 and January 1, 1997, respectively.

(4) The adjustment reduces certain salaries of the management of Block by
$90,000 and $68,000 for the twelve-month period ended December 31, 1996 and the
nine-month period ended September 30, 1997, respectively, to levels that will be
paid by the Company.

(5) The adjustment removes the goodwill amortization previously recorded by
Block of $372,000 and $297,000 for the twelve-month period ended December 31,
1996 and the nine-month period ended September 30, 1997, respectively, and
records the goodwill amortization of $1,371,000 and $1,028,000 for the
twelve-month period ended December 31, 1996 and the nine-month period ended
September 30, 1997, respectively, related to the acquisition of Block by the
Company.

(6) The adjustment to interest expense reflects the additional interest on
the notes issued and the debt assumed in conjunction with the 1996 Acquisitions
as if the 1996 Acquisitions occurred on January 1, 1996, as follows:

<TABLE>
<CAPTION>
CARRYING
AMOUNT INTEREST INTEREST
DESCRIPTION 12/31/96 RATE PERIOD EXPENSE
- ----------- ---------- -------- ----------------- --------
<S> <C> <C> <C> <C>
Unsecured notes payable issued to
stockholders of the Managed
Professional Associations on
12/1/96............................ $1,924,959 8.00% 1/1/96 -- 11/30/96 $141,000
Certain notes payable and capital
lease obligations assumed of the
Managed Professional Associations
on 12/1/96......................... 744,481 9.25% 1/1/96 -- 11/30/96 63,000
--------
$204,000
========
</TABLE>

(7) The adjustment reflects the savings on interest expense due to the
repayment of debt with proceeds from the Initial Public Offering.

<TABLE>
<CAPTION>
TWELVE-MONTH NINE-MONTH
PERIOD ENDED PERIOD ENDED
12/31/96 9/30/97
------------ ------------
<S> <C> <C>
Unsecured notes payable, 8%................................. $274,000 $275,000
Senior subordinated note, 10%............................... 1,300 114,000
Senior subordinated note, 10%............................... -- 122,000
Certain notes payable and capital lease obligations,
9.25%..................................................... 83,700 --
Credit facilities, 10%...................................... -- 189,000
-------- --------
$359,000 $700,000
======== ========
</TABLE>

(8) The adjustment records the income tax expense (benefit) that would have
been recorded if the transactions had occurred on January 1, 1996. The expense
(benefit) is calculated using an estimated average income tax rate of 38% and
income before income taxes adjusted for the amortization of the non-deductible
goodwill resulting from the Block Acquisition.

(9) To reflect the pro forma net income (loss) per common share assuming an
increase in the weighted average number of outstanding shares that would have
been necessary to repay the selling shareholders of Block of $23,716,500,
representing an increase of 2,206,186 shares.

(10) The adjustment reflects the October Acquisitions. The fair value of
the net assets and Management Agreements associated with the October
Acquisitions is expected to approximate $3,150,000. The October Acquisitions
were financed through the payment of $1,792,000 in cash and the issuance of
101,000 shares of the Company's Common Stock, valued at the average closing
prices of the Company's Common Stock five days before and after the closing
dates. The acquisition adjustment assumes the fair value of the net business
assets is immaterial and, accordingly, allocates the entire fair value of
$3,150,000 to intangible assets, principally representing the fair value of the
Management Agreements. The Company has also recorded an

F-11
<PAGE> 85

addition to intangible assets of $590,000 with a corresponding increase in
deferred income taxes for the value of the portion of the Management Agreements
acquired in non-taxable transactions.

(11) The adjustments reflect the Block Acquisition which was effective
October 31, 1997. The Company delivered 458,365 shares of the Company's Common
Stock valued at $13.20 per share based on the average closing prices of the
Company's Common Stock in the five days before the closing date. The Company is
obligated to pay $25,600,000 in cash on the earlier of consummation of the
Offering or November 30, 1997. Goodwill was estimated as follows:

<TABLE>
<S> <C> <C>
Value of Company Common Stock............................... $ 6,050,000
Cash to be paid to selling shareholders..................... 25,600,000
Transaction fee paid in cash................................ 750,000
Transaction fee paid in warrants............................ 70,000
-----------
32,470,000
Recorded net book value of Block............................ $3,258,058
Less previously recorded goodwill........................... 5,051,204 (1,793,146)
---------- -----------
Resulting goodwill.......................................... 34,263,146
Previously recorded goodwill................................ 5,051,204
-----------
Net increase in goodwill.......................... $29,211,942
===========
</TABLE>

The Company anticipates that it will amortize the goodwill over a 25 year
life. The Company will continue to evaluate the appropriate value of the assets
and liabilities, the purchase price allocation and the amortization period for
the goodwill. The adjustments also record the amounts due to selling
shareholders of $25,600,000; the issuance of $6,050,000 in the Company Common
Stock; payment of $750,000 in cash and $70,000 in warrants for certain
transaction fees to be incurred in connection with the Block Acquisition; and
the elimination of Block's historical equity accounts. There is no adjustment to
deferred income taxes because the goodwill is non-deductible. If the Company
subsequently determines that there are identifiable intangible assets, the
amortization period for those amounts will be adjusted accordingly and deferred
income taxes will also be recorded, which will increase the amount of goodwill.

(12) The adjustments reflect the Company's intent to sell 2,400,000 shares
of Common Stock in the Offering resulting in net proceeds of $23,716,500. Such
proceeds will be used to repay the selling shareholders of Block of $23,716,500.

(13) The adjustments reflect the Company's entering into a bridge loan
credit facility in October 1997 to borrow up to $37.0 million to complete the
acquisition of Block if the Offering is not completed in a timely manner and to
borrow $5.7 million on the bridge loan credit facility. The Company paid
$370,000 in cash and issued 50,000 warrants valued at $140,000 to enter into the
borrowing arrangement. When the Company draws on the borrowing arrangement, it
pays an additional funding fee and issues additional warrants. The borrowing of
$5.7 million on the bridge loan credit facility resulted in the Company's paying
a funding fee of $57,000 and issuing 23,214 in additional warrants. Because the
cash fees paid and warrants issued are not refundable, they are recognized as an
expense in the unaudited pro forma consolidated statement of operations for the
year ended December 31, 1996 and the nine-month period ended September 30, 1997.
The unaudited pro forma consolidated balance sheet as of September 30, 1997
includes adjustments to reduce cash by $427,000; record the $205,000 value of
warrants as an increase in additional paid-in capital; and increase accumulated
deficit by $632,000. The adjustment also reflects the additional expense that
would have been incurred from the borrowing of $5.7 million on the bridge loan
credit facility at an estimated interest rate of 9.9%.

(14) The adjustment increases the salaries, wages and benefits for the year
ended December 31, 1996 by $2,438,000 and general and administrative expenses
for the year ended December 31, 1996 by $230,000 to the level incurred in the
first six months of 1997 to reflect the expense of the additional infrastructure
needed to manage the 1996 Acquisitions and the 1997 Acquisitions. The adjusted
salaries, wages and benefits and general and administrative expenses for the
year ended December 31, 1996 equal the annualized expenses incurred through June
30, 1997 for the same activities.

(15) Net income (loss) excludes the extraordinary charge for early
extinguishment of debt for $323,346.

F-12
<PAGE> 86

REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS

Board of Directors
Vision Twenty-One, Inc. and Subsidiaries

We have audited the accompanying consolidated balance sheets of Vision
Twenty-One, Inc. and subsidiaries as of December 31, 1995 and 1996, and the
related consolidated statements of operations, stockholders' equity (deficit),
and cash flows for each of the three years in the period ended December 31,
1996. These consolidated financial statements are the responsibility of the
Company's management. Our responsibility is to express an opinion on these
financial statements based on our audits.

We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the consolidated financial statements referred to above
present fairly, in all material respects, the consolidated financial position of
Vision Twenty-One, Inc. and subsidiaries at December 31, 1995 and 1996, and the
consolidated results of their operations and their cash flows for each of the
three years in the period ended December 31, 1996, in conformity with generally
accepted accounting principles.

Tampa, Florida
March 22, 1997,
except for Note 11, as to which the date is
July 29, 1997
ERNST & YOUNG LLP

F-13
<PAGE> 87

VISION TWENTY-ONE, INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

<TABLE>
<CAPTION>
DECEMBER 31,
------------------------- SEPTEMBER 30,
1995 1996 1997
----------- ----------- -------------
(UNAUDITED)
<S> <C> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents............................. $ 42,272 $ 67,353 $ 2,615,335
Accounts receivable, net of allowance for doubtful
accounts of $685,000 and $2,620,000 in 1996 and
1997, respectively................................. -- 1,968,587 7,471,833
Other receivables..................................... -- 185,263 1,321,389
Prepaid expenses and other current assets............. 999 192,789 889,941
----------- ----------- -----------
Total current assets.......................... 43,271 2,413,992 12,298,498
Fixed assets, net....................................... 98,726 1,941,259 3,263,943
Intangible assets, net of accumulated amortization of
$29,125 and $298,340 in 1996 and 1997, respectively... -- 11,022,396 28,050,825
Deferred offering costs................................. -- 287,792 --
Other assets............................................ 23,222 46,792 157,489
----------- ----------- -----------
Total assets.................................. $ 165,219 $15,712,231 $43,770,755
=========== =========== ===========
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
Current liabilities:
Accounts payable...................................... $ 99,931 $ 529,427 $ 955,998
Accrued expenses...................................... 1,617 946,519 967,261
Accrued acquisition and offering costs................ -- 1,362,012 --
Accrued compensation.................................. 55,872 546,740 1,317,385
Due to Managed Professional Associations.............. 27,741 -- 1,814,691
Note payable to related party......................... 250,000 -- --
Due to selling shareholders........................... -- -- 3,800,228
Current portion of long-term debt..................... 51,127 48,249 112,889
Current portion of obligations under capital leases... -- 43,849 289,742
Medical claims payable................................ 1,056,141 1,793,861 1,457,866
----------- ----------- -----------
Total current liabilities..................... 1,542,429 5,270,657 10,716,060
Deferred rent payable................................... -- 263,006 262,376
Obligations under capital leases........................ -- 71,870 111,046
Long-term debt, less current portion ($9,288, $5,983,098
and $0 to related parties in 1995, 1996 and 1997,
respectively)......................................... 61,840 7,570,974 66,264
Deferred income taxes................................... -- -- 1,716,000
Stockholders' equity (deficit):
Preferred stock, $.001 par value; no shares authorized
in 1995 and 10,000,000 shares authorized in 1996
and 1997; no shares issued......................... -- -- --
Common stock, $.001 par value; 50,000,000 shares
authorized; 2,324,876 (1995), 3,715,625 (1996) and
8,591,234 (1997) shares issued and outstanding..... 2,325 3,716 8,591
Additional paid-in capital............................ 32,271 4,736,361 40,269,136
Common stock to be issued (1,491,397 shares in
1996).............................................. -- 5,905,965 --
Deferred compensation................................. -- (517,035) (435,810)
Accumulated deficit................................... (1,473,646) (7,593,283) (8,942,908)
----------- ----------- -----------
Total stockholders' equity (deficit).......... (1,439,050) 2,535,724 30,899,009
----------- ----------- -----------
Total liabilities and stockholders' equity
(deficit)................................... $ 165,219 $15,712,231 $43,770,755
=========== =========== ===========
</TABLE>

See accompanying notes.

F-14
<PAGE> 88

VISION TWENTY-ONE, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS

<TABLE>
<CAPTION>
NINE-MONTH PERIOD
YEAR ENDED DECEMBER 31, ENDED SEPTEMBER 30,
-------------------------------------- -------------------------
1994 1995 1996 1996 1997
---------- ----------- ----------- ----------- -----------
(UNAUDITED)
<S> <C> <C> <C> <C> <C>
Revenues:
Practice management fees
($392,206, $423,890 and
$479,004 from a related
party in 1994, 1995 and
1996, respectively)......... $ 392,206 $ 423,890 $ 1,942,843 $ 555,408 $19,684,406
Managed care................... 668,590 2,446,010 7,315,196 5,307,075 9,307,430
Other revenue.................. 131,098 211,746 305,654 163,344 451,925
---------- ----------- ----------- ----------- -----------
1,191,894 3,081,646 9,563,693 6,025,827 29,443,761
Operating expenses:
Practice management expenses... -- -- 1,244,173 -- 15,977,619
Medical claims................. 551,408 2,934,180 9,128,659 7,319,446 8,052,709
Salaries, wages and benefits... 537,864 903,966 1,889,395 1,374,832 3,405,067
Business development........... -- -- 1,926,895 -- --
General and administrative
(including $53,000 to
related parties for rent in
1996)....................... 237,702 443,374 1,208,678 662,213 1,339,555
Depreciation and
amortization................ 13,052 18,005 126,046 35,222 954,313
---------- ----------- ----------- ----------- -----------
1,340,026 4,299,525 15,523,846 9,391,713 29,729,263
---------- ----------- ----------- ----------- -----------
Loss from operations............. (148,132) (1,217,879) (5,960,153) (3,365,886) (285,502)
Interest expense................. 4,444 8,557 159,484 66,147 740,777
---------- ----------- ----------- ----------- -----------
Loss before income taxes......... (152,576) (1,226,436) (6,119,637) (3,432,033) (1,026,279)
Income taxes..................... -- -- -- -- --
---------- ----------- ----------- ----------- -----------
Loss before extraordinary
charge......................... (152,576) (1,226,436) (6,119,637) (3,432,033) (1,026,279)
Extraordinary charge -- early
extinguishment of debt......... -- -- -- -- 323,346
---------- ----------- ----------- ----------- -----------
Net loss............... $ (152,576) $(1,226,436) $(6,119,637) $(3,432,033) $(1,349,625)
========== =========== =========== =========== ===========
Loss before extraordinary charge
per common share............... $ (.03) $ (.21) $ (1.02) $ (.57) $ (.15)
---------- ----------- ----------- ----------- -----------
Extraordinary charge per common
share.......................... -- -- -- -- (.05)
---------- ----------- ----------- ----------- -----------
Net loss per common share........ $ (0.03) $ (0.21) $ (1.02) $ (.57) $ (.20)
========== =========== =========== =========== ===========
Weighted average number of common
shares outstanding............. 5,979,543 5,979,543 5,979,543 5,979,543 6,670,779
========== =========== =========== =========== ===========
</TABLE>

See accompanying notes.

F-15
<PAGE> 89

VISION TWENTY-ONE, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (DEFICIT)

<TABLE>
<CAPTION>
COMMON TOTAL
COMMON STOCK ADDITIONAL STOCK STOCKHOLDERS'
------------------ PAID-IN TO BE DEFERRED ACCUMULATED EQUITY
SHARES AMOUNT CAPITAL ISSUED COMPENSATION DEFICIT (DEFICIT)
--------- ------ ----------- ---------- ------------ ----------- -------------
<S> <C> <C> <C> <C> <C> <C> <C>
BALANCE AT JANUARY 1, 1994........... 2,324,876 $2,325 $ 54,185 -- $ -- $ (94,634) $ (38,124)
Net loss........................... -- -- -- -- -- (152,576) (152,576)
--------- ------ ----------- ---------- --------- ----------- -----------
BALANCE AT DECEMBER 31, 1994......... 2,324,876 2,325 54,185 -- -- (247,210) (190,700)
Net loss........................... -- -- -- -- -- (1,226,436) (1,226,436)
Capital distribution............... -- -- (21,914) -- -- -- (21,914)
--------- ------ ----------- ---------- --------- ----------- -----------
BALANCE AT DECEMBER 31, 1995......... 2,324,876 2,325 32,271 -- -- (1,473,646) (1,439,050)
Sale of common stock............... 360,442 360 999,640 -- -- -- 1,000,000
Issuance of shares of common stock
for 1996 Acquisitions consummated
effective December 1, 1996....... 651,842 652 2,580,645 -- -- -- 2,581,297
1,491,397 shares of common stock to
be issued in 1997 for 1996
Acquisitions consummated
effective December 1, 1996....... -- -- -- 5,905,965 -- -- 5,905,965
Issuance of detachable stock
purchase warrants................ -- -- 125,000 -- -- -- 125,000
Issuance of shares of common stock
for prior service................ 144,705 145 401,410 -- -- -- 401,555
Issuance of shares of common stock
for advisory agreement........... 125,627 126 348,488 -- (348,614) -- --
Issuance of shares of common stock
for services agreement........... 108,133 108 299,960 -- (180,041) -- 120,027
Amortization of deferred
compensation..................... -- -- -- -- 11,620 -- 11,620
Net loss........................... -- -- -- -- -- (6,119,637) (6,119,637)
Capital distribution............... -- -- (51,053) -- -- -- (51,053)
--------- ------ ----------- ---------- --------- ----------- -----------
BALANCE AT DECEMBER 31, 1996......... 3,715,625 3,716 4,736,361 5,905,965 (517,035) (7,593,283) 2,535,724
Unaudited:
Initial public offering of common
shares........................... 2,100,000 2,100 18,054,361 -- -- -- 18,056,461
Issuance of shares of common stock
for business combinations........ 2,775,609 2,775 17,077,664 (5,905,965) -- -- 11,174,474
Issuance of detachable stock
purchase warrants................ -- -- 203,500 -- -- -- 203,500
Sale of detachable stock purchase
warrant.......................... -- -- 126,000 -- -- -- 126,000
Compensatory stock options
accounted for under SFAS 123..... -- -- 71,250 -- -- -- 71,250
Amortization of deferred
compensation..................... -- -- -- -- 81,225 -- 81,225
Net loss........................... -- -- -- -- -- (1,349,625) (1,349,625)
--------- ------ ----------- ---------- --------- ----------- -----------
BALANCE AT SEPTEMBER 30,
1997(Unaudited).................... 8,591,234 $8,591 $40,269,136 -- $(435,810) $(8,942,908) $30,899,009
========= ====== =========== ========== ========= =========== ===========
</TABLE>

See accompanying notes.

F-16
<PAGE> 90

VISION TWENTY-ONE, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

<TABLE>
<CAPTION>
NINE-MONTH PERIOD
YEAR ENDED DECEMBER 31, ENDED SEPTEMBER 30,
--------------------------------------- --------------------------
1994 1995 1996 1996 1997
--------- ----------- ----------- ----------- -----------
(UNAUDITED)
<S> <C> <C> <C> <C> <C>
OPERATING ACTIVITIES
Net loss...................................... $(152,576) $(1,226,436) $(6,119,637) $(3,432,033) $(1,349,625)
Adjustments to reconcile net loss to net cash
provided by (used in) operating activities:
Extraordinary charge -- early extinguishment
of debt................................... -- -- -- -- 323,346
Depreciation and amortization............... 13,052 18,005 126,046 35,222 954,313
Noncash compensation expense................ -- -- 521,582 -- 71,250
Amortization of deferred compensation....... -- -- 11,620 -- 81,225
Interest accretion.......................... -- -- -- -- 41,477
Changes in operating assets and liabilities,
net of effects from business combinations:
Accounts receivable, net.................. 13,827 -- (298,328) (568,128) (3,170,230)
Other receivables......................... -- -- (185,263) 80,481 (1,136,126)
Prepaid expenses and other current
assets.................................. 308 516 (22,766) (11,412) (461,214)
Other assets.............................. -- -- (32,984) (122,836) (110,697)
Accounts payable.......................... 5 87,141 429,496 252,109 104,223
Accrued expenses.......................... 170 614 119,955 (1,617) (190,486)
Accrued acquisition and offering costs.... -- -- 522,963 -- --
Accrued compensation...................... 10,525 43,138 48,342 90,594 436,289
Medical claims payable.................... 127,539 928,602 737,720 1,156,689 (335,995)
Due to Managed Professional
Associations............................ 17,557 10,184 (27,741) (27,741) 1,814,691
--------- ----------- ----------- ----------- -----------
Net cash provided by (used in)
operating activities............... 30,407 (138,236) (4,168,995) (2,548,672) (2,927,559)
INVESTING ACTIVITIES
Purchases of furniture and equipment, net..... (13,783) (68,138) (443,577) (253,055) (272,044)
Payments for business acquired................ -- -- -- -- (700,000)
Payments for capitalized acquisition costs.... -- (20,240) (1,138,829) (1,071,330) (3,928,495)
--------- ----------- ----------- ----------- -----------
Net cash used in investing
activities......................... (13,783) (88,378) (1,582,406) (1,324,385) (4,900,539)
FINANCING ACTIVITIES
Net proceeds from sale of common stock........ -- -- 750,000 750,000 19,530,000
Payments for offering costs................... -- -- -- -- (1,473,539)
Proceeds from long term debt.................. 11,700 310,413 4,950,000 3,266,187 2,000,000
Payments on long term debt.................... (15,451) (32,694) (56,729) (22,173) (9,806,381)
Net proceeds from line of credit.............. -- -- 184,264 -- --
Proceeds from credit facility................. -- -- -- -- 4,874,000
Payments on credit facility................... -- -- -- -- (4,874,000)
Sale of detachable stock purchase warrant..... -- -- -- -- 126,000
Capital distribution.......................... -- (21,914) (51,053) (49,855) --
--------- ----------- ----------- ----------- -----------
Net cash provided by (used in)
financing activities............... (3,751) 255,805 5,776,482 3,944,159 10,376,080
--------- ----------- ----------- ----------- -----------
Increase in cash.............................. 12,873 29,191 25,081 71,102 2,547,982
Cash and cash equivalents at beginning of
period...................................... 208 13,081 42,272 42,272 67,353
--------- ----------- ----------- ----------- -----------
Cash and cash equivalents at end of period.... $ 13,081 $ 42,272 $ 67,353 $ 113,374 $ 2,615,335
========= =========== =========== =========== ===========
SUPPLEMENTAL DISCLOSURE OF CASH FLOW
INFORMATION
Cash paid during the period for interest...... $ 4,000 $ 9,000 $ 17,000 $ 12,000 $ 883,000
========= =========== =========== =========== ===========
SUPPLEMENTAL SCHEDULE OF NONCASH INVESTING AND
FINANCING ACTIVITIES
Common stock issued upon conversion of a note
payable..................................... -- -- $ 250,000 $ 250,000 --
========= =========== =========== =========== ===========
</TABLE>

See Note 2 regarding affiliations with practices financed through the issuance
of common stock and notes payable.

See accompanying notes.

F-17
<PAGE> 91

VISION TWENTY-ONE, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 1996

1. DESCRIPTION OF BUSINESS

Vision Twenty-One, Inc. and Subsidiaries (Vision Twenty-One or the Company)
is a Florida corporation formed in May 1996 as a holding company. The Company's
principal subsidiaries include Vision 21 Physician Practice Management Company
(MSO) and Vision 21 Managed Eyecare of Tampa Bay, Inc. (MCO). The MSO provides
business management services for eye care professionals and related businesses.
The MCO is a managed care organization which contracts with third-party health
benefits payors to provide eye care services through a network of associated
optometry and ophthalmology practices, retail optical companies and ambulatory
surgical centers. Most of the managed care contracts are for one year terms
which automatically renew and the contracts are terminable by either party on
sixty days notice. Revenues from one payor constituted approximately 95%, 94%
and 79% of managed care revenues and 53%, 75% and 60% of total revenues for the
years ended December 31, 1994, 1995 and 1996, respectively. Any adverse
development in the Company's relationship with this payor would have a material
adverse effect on the Company's results of operations and financial condition.

Vision Twenty-One was formed to be a holding company to own the MSO and
MCO. The MSO and MCO were owned in identical proportions by two executive
officers and a member of the Board of Directors of the Company. During 1996, the
Company acquired the MSO and MCO through an exchange of 2,685,318 shares of
Common Stock for all of the outstanding shares of the MSO and MCO. There was no
other consideration paid by the Company. This transaction was accounted for as a
reorganization of companies under common control in a manner similar to that
used in a pooling of interests transaction. As a result, the accompanying
financial statements have been prepared to reflect the accounts of the Company
as if the reorganization had occurred as of the beginning of the earliest period
presented.

2. AFFILIATIONS WITH PRACTICES

Effective December 1, 1996, the Company acquired substantially all of the
assets and assumed certain liabilities of 10 ophthalmology and optometry
practices (the Managed Professional Associations) located in Minnesota, Arizona
and Florida. The 1996 Acquisitions were accounted for by recording the assets
and liabilities at fair value and allocating the remaining cost to the related
Management Agreements. In conjunction with these acquisitions, the Company
entered into various business management agreements (Management Agreements) with
the Managed Professional Associations and the Managed Professional Associations'
stockholders (collectively referred to as the 1996 Acquisitions). Under the
Management Agreements, the Company provides management, marketing and
administrative services to the Managed Professional Associations in return for a
management fee. The Management Agreements have a 40-year life and are cancelable
only for breach of its provisions or insolvency. The Managed Professional
Associations employ ophthalmologists and optometrists and provide all eye care
services to patients.

F-18
<PAGE> 92

VISION TWENTY-ONE, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

A summary of the 1996 Acquisitions and an allocation of the purchase price
are as follows:

<TABLE>
<S> <C>
Net assets acquired:
Current and other assets.................................. $ 1,850,108
Furniture and equipment................................... 1,495,877
Business management agreements............................ 11,051,521
Liabilities assumed....................................... (2,274,959)
-----------
Net assets acquired............................... $12,122,547
===========
Consideration for net assets acquired:
Capitalized acquisition costs............................. $ 1,710,326
Long-term notes payable issued............................ 1,924,959
Common stock issued and to be issued...................... 8,487,262
-----------
Total consideration............................... $12,122,547
===========
</TABLE>

Vision Twenty-One issued 651,842 shares of Common Stock in 1996 and
1,491,397 shares of Common Stock in 1997. The shares which were issued in 1997
were reported as Common Stock to be issued as of December 31, 1996, in
connection with the 1996 Acquisitions. All 2,143,239 shares of Common Stock were
valued at $3.96 per share based on an independent valuation. In connection with
the 1996 Acquisitions, the Company holds in escrow 79,805 shares of Common
Stock. Such shares of Common Stock held in escrow will be issued to the sellers
of three of the ophthalmology and optometry practices if certain financial goals
are met during the twelve-month period ending November 30, 1997. Such financial
goals were established to resolve certain differences between the Company and
the owners of the three ophthalmology and optometry practices regarding the
purchase price valuations of the respective practices. Any shares of Common
Stock held in escrow which are ultimately issued by the Company if such
financial goals are met will be treated as an adjustment of the purchase price
of the assets acquired from the three ophthalmology and optometry practices.
Based upon information to date, management of the Company believes that the
ultimate issuance of any such shares held in escrow will not have a material
adverse effect on the results of operations, financial condition or liquidity of
the Company.

As part of the purchase price allocation, no consideration has been
allocated to employment and noncompete agreements between the Company and the
Managed Professional Associations' stockholders because the Company believes
these agreements have no material value.

During 1996, the Company incurred $1,710,326 of acquisition costs which
were capitalized and allocated to the assets acquired and Management Agreements
entered into, including $839,049 which is included in accrued acquisition
expenses in the accompanying consolidated balance sheets.

The following unaudited pro forma information presents the Company's
approximate results of operations with pro forma adjustments for 1995 as if the
1996 Acquisitions had been consummated as of January 1, 1995; for 1996 as if the
1996 Acquisitions and eleven acquisitions completed in 1997 (Note 11) had been
consummated as of January 1, 1996; and for the nine-month period ended September
30, 1997 as if the eleven acquisitions completed in 1997 had been consummated as
of January 1, 1997. This pro forma information does not purport to be indicative
of what would have occurred had the acquisitions been made as of those dates or
of results which may occur in the future.

<TABLE>
<CAPTION>
YEAR ENDED
DECEMBER 31, NINE-MONTH
------------------------- PERIOD ENDED
1995 1996 SEPTEMBER 30, 1997
----------- ----------- ------------------
<S> <C> <C> <C>
Pro forma information (unaudited):
Total revenues.................................... $18,983,000 $47,558,000 $40,730,000
Income (loss) before extraordinary charge......... $ 836,000 $(4,110,000) $ 819,000
Net income (loss)................................. $ 836,000 $(4,110,000) $ 496,000
Net income (loss) per common share................ $ 0.14 $ (0.58) $ 0.07
</TABLE>

F-19
<PAGE> 93

VISION TWENTY-ONE, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

PRINCIPLES OF CONSOLIDATION

The consolidated financial statements include the accounts of the Company
and its subsidiaries. All significant intercompany transactions have been
eliminated. The Company does not own any interests in or control the activities
of the Managed Professional Associations. Accordingly, the financial statements
of the Managed Professional Associations are not consolidated with those of the
Company.

UNAUDITED INTERIM FINANCIAL STATEMENTS

The interim financial statements as of September 30, 1997 and for the
nine-month periods ended September 30, 1996 and 1997 do not provide all
disclosures included in the annual financial statements. These interim
statements should be read in conjunction with the annual audited financial
statements and the footnotes thereto. Results for the 1997 interim period are
not necessarily indicative of the results for the year ending December 31, 1997.
However, the accompanying interim financial statements reflect all adjustments
which are, in the opinion of management, of a normal and recurring nature
necessary for a fair presentation of the financial position and results of
operations of the Company.

USE OF ESTIMATES

The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the amounts reported in the financial statements and
accompanying notes. Actual results could differ from those estimates.

REVENUE RECOGNITION

Managed Care

Managed care revenues are derived from monthly capitation payments from
health benefits payors which contract with the Company for the delivery of eye
care services. The Company records this revenue at contractually agreed-upon
rates.

Practice Management Fees

Prior to December 1, 1996, practice management fee revenue was earned
through contractual arrangements between the Company and several optometry
practices under common control. This revenue totaled $392,206, $423,890 and
$479,004 for the years ended December 31, 1994, 1995 and 1996, respectively.

Subsequent to December 1, 1996, practice management fee revenue was earned
through management of the Managed Professional Associations under the Management
Agreements. This revenue represents reimbursement of practice management
expenses incurred by the Company, including depreciation expense of $54,164 and
$335,409 (unaudited) for the year ended December 31, 1996 and the nine-month
period ended September 30, 1997, respectively. In addition, the Company receives
a percentage (ranging from 24 to 37 percent) of the Managed Professional
Associations' net earnings before interest, taxes, and shareholder physician
expenses, as

F-20
<PAGE> 94

VISION TWENTY-ONE, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

determined under the related Management Agreements. For the year ended December
31, 1996 and the nine-month period ended September 30, 1997, this revenue was as
follows:

<TABLE>
<CAPTION>
NINE-MONTH
YEAR ENDED PERIOD ENDED
DECEMBER 31, 1996 SEPTEMBER 30, 1997
----------------- ------------------
(UNAUDITED)
<S> <C> <C>
Medical service revenues of Managed Professional
Associations....................................... $1,667,025 $23,683,791
Less amounts retained by physician shareholders of
Managed Professional Associations.................. (203,186) (3,999,385)
---------- -----------
Management fees under Management Agreements with
Managed Professional Associations.................. $1,463,839 $19,684,406
========== ===========
</TABLE>

Included in net management fees are amounts representing reimbursement of
expenses for practice management expenses and a portion of depreciation and
amortization. These amounts were $1,298,337 for the year ended December 31, 1996
and $16,313,028 (unaudited) for the nine-month period ended September 30, 1997.

Other Revenues

Other revenues consist of fees earned through consulting and other
contractual arrangements.

MEDICAL CLAIMS PAYABLE

In accordance with the capitation contracts entered into with certain
health benefits payors, the MCO is responsible for payment of providers' claims.
Medical claims payable represent provider claims reported to the MCO and an
estimate of provider claims incurred but not reported (IBNR).

The Company and its actuary estimate the amount of IBNR using standard
actuarial methodologies based upon the average interval between the date
services are rendered and the date claims are reported and other factors
considered relevant by the Company.

Prior to December 1, 1996, certain medical claims were paid to several
optometry practices under common control. Expense related to these transactions
totaled approximately $81,000, $299,000 and $249,000 for the years ended
December 31, 1994, 1995 and 1996, respectively.

FAIR VALUE OF FINANCIAL INSTRUMENTS

The carrying value of all current assets and current liabilities
approximates their fair value because of their short-term nature. The fair value
of long-term debt approximates its carrying value based on current rates offered
to the Company for debt of similar maturities.

CASH AND CASH EQUIVALENTS

The Company considers all highly liquid investments purchased with an
original maturity of three months or less to be cash equivalents.

ACCOUNTS RECEIVABLE

Accounts receivable represent amounts due from the Managed Professional
Associations.

FIXED ASSETS

Fixed assets are stated at cost. Depreciation is calculated using the
straight-line method over the estimated useful lives of the various classes of
assets, which range from three to seven years. Leasehold improvements are
amortized using the straight-line method over the shorter of the term of lease
or the

F-21
<PAGE> 95

VISION TWENTY-ONE, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

estimated useful life of the improvements. Routine maintenance and repairs are
charged to expense as incurred, while betterments and renewals are capitalized.

DEFERRED OFFERING COSTS

Deferred offering costs consist primarily of costs deferred in connection
with the Company's anticipated initial public offering. These costs were charged
against the offering proceeds when the initial public offering was completed in
August, 1997.

TRANSACTIONS AND BUSINESS DEVELOPMENT COSTS

Direct, external legal, accounting and other costs associated with
successful acquisitions are capitalized as part of the related purchase price
allocation. External costs associated with unsuccessful acquisitions, including
start-up consulting services (Note 10), are expensed and are shown as business
development expense in the accompanying consolidated statements of operations.
All internal costs associated with acquisitions are expensed as incurred.

INTANGIBLE ASSETS

Intangible assets consist of the Management Agreements with the Managed
Professional Associations. The Management Agreements have 40-year terms and are
being amortized on a straight-line method over an average life of 25 years. In
evaluating the useful life of a Management Agreement, the Company considers the
operating history and other characteristics of each practice. The primary
consideration is the degree to which a practice has demonstrated its ability to
extend its existence indefinitely. In making this determination, the Company
considers (i) the number of physicians recruited into the practice, (ii) the
number of staff members, including physicians, (iii) the number of locations,
and (iv) the complexity of the procedures being performed, including disease
treatment and control.

The Company anticipates that the Emerging Issues Task Force of the
Financial Accounting Standards Board will be evaluating certain matters relating
to the physician practice management industry, which the Company expects to
include a review of accounting for business combinations. The Company is unable
to predict the impact, if any, that this review may have on the Company's
acquisition strategy, allocation of purchase price related to acquisitions, and
amortization life assigned to intangible assets.

Amortization expense with respect to intangible assets was $29,125 and
$516,389 (unaudited) for the year ended December 31, 1996 and the nine-month
period ended September 30, 1997, respectively.

The Company has adopted the provisions of Statement of Financial Accounting
Standards No. 121, Accounting for the Impairment of Long-Lived Assets and for
Long-Lived Assets to Be Disposed Of (SFAS 121). In accordance with SFAS 121, the
Company reviews the carrying value of its intangible assets at least quarterly
on an entity-by-entity basis to determine if facts and circumstances exist which
would suggest that the intangible assets may be impaired or that the
amortization period needs to be modified. Among the factors the Company
considers in making the evaluation are changes in the Managed Professional
Associations' market position, reputation, profitability and geographical
penetration. If indicators are present which may indicate impairments, the
Company will prepare a projection of the undiscounted cash flows of the specific
practice and determine if the intangible assets are recoverable based on these
undiscounted cash flows. If impairment is indicated, then an adjustment will be
made to reduce the carrying amount of the intangible assets to fair value.

CONCENTRATIONS OF CREDIT RISK

The Company does not believe that there are any credit risks associated
with receivables due from governmental agencies. Any concentration of credit
risk from other payors of the Managed Professional Associations is limited by
the number of patients and payors. The Company and the Managed Professional
Associations do not require any form of collateral from their patients or
third-party payors.

F-22
<PAGE> 96

VISION TWENTY-ONE, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

The Company places cash and cash equivalents with high-quality financial
institutions. At times, the Company maintains cash balances in excess of amounts
insured by the Federal Deposit Insurance Corporation (FDIC).

NET LOSS PER COMMON SHARE

Net loss per common share amounts in the consolidated statements of
operations are based upon the weighted average number of common shares
outstanding in each period and the guidance in a Staff Accounting Bulletin (SAB)
of the Securities and Exchange Commission. According to the SAB, stock, options
and warrants issued within a one-year period prior to the filing of an initial
public offering and at prices less than the proposed public offering price must
be reflected as outstanding for all reported periods.

In February 1997, the FASB issued Statement No. 128 (SFAS 128), Earnings
Per Share, which establishes new standards for computing and presenting earnings
per share. SFAS 128 is effective for financial statements issued for periods
after December 15, 1997, including interim periods. Management has not yet
determined whether the implementation of SFAS 128 will have any impact on the
Company's per share amounts.

CONTINGENT CONSIDERATION

As part of its business strategy, the Company enters into various
transactions to acquire substantially all of the assets of various eye care
practices and enters into business management agreements with the eye care
practices. In connection with certain of the acquisitions, the Company will hold
shares of its common stock in escrow as contingent consideration. Such shares of
common stock held in escrow are due to the owners of the certain eye care
practices if certain financial goals are met in the future, generally within
twelve to eighteen months of the effective date of the acquisition. The
financial goals are established on an acquisition by acquisition basis and are
generally established to resolve differences between the Company and the
applicable eye care practices regarding the purchase price valuation.

Depending on the relevant facts and circumstances of each acquisition and
the business reason for issuing contingent consideration, the Company accounts
for the issuance of common stock held in escrow as either additional purchase
consideration or compensation to the owners of the applicable eye care practices
utilizing the provisions of Emerging Issues Task Force Issue No. 95-8(EITF
95-8). Under EITF 95-8, the factors to be considered in making the
aforementioned accounting determination include, but are not limited to, terms
of continuing employment, components of the shareholder group, reasons for
contingent payment provisions, formulas for determining contingent consideration
and other agreements and issues.

COMMON STOCK TO BE ISSUED

Common stock to be issued represents stock to be issued in connection with
certain of the 1996 Acquisitions consummated on December 1, 1996. The stock was
issued in January 1997.

STOCK-BASED COMPENSATION

The Company accounts for stock-based compensation arrangements under the
provisions of Accounting Principles Board Opinion No. 25, Accounting for Stock
Issued to Employees (APB 25). In 1995, the Financial Accounting Standards Board
issued Statement of Financial Accounting Standards No. 123, Accounting for
Stock-Based Compensation (SFAS 123), which is effective for fiscal years
beginning after December 15, 1995. Under SFAS 123, the Company may elect to
recognize stock-based compensation expense based on the fair value of the awards
or continue to account for stock-based compensation under APB 25, and disclose
in the financial statements the effects of SFAS 123 as if the recognition
provisions were adopted.

F-23
<PAGE> 97

VISION TWENTY-ONE, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

The Company accounts for any stock-based compensation arrangements not
specifically addressed by APB 25 under the fair value provisions of SFAS 123,
including options granted to non-employees and professionals employed by the
Managed Professional Associations. The amounts for 1995 and 1996 are immaterial.
The pro forma disclosures required by SFAS 123 are provided for all stock-based
compensation which are accounted for under APB 25 (Note 10).

INCOME TAXES

The Company has applied the provisions of Statement of Financial Accounting
Standards No. 109, Accounting for Income Taxes (SFAS 109), which requires an
asset and liability approach for financial accounting and reporting. Deferred
income tax assets and liabilities are determined based upon differences between
the financial reporting and tax bases of assets and liabilities and are measured
using the enacted tax rates and lives that will be in effect when the
differences are expected to reverse.

4. FIXED ASSETS

Fixed assets consist of the following:

<TABLE>
<CAPTION>
DECEMBER 31,
---------------------
DESCRIPTION 1995 1996
- ----------- -------- ----------
<S> <C> <C>
Office furniture and equipment.............................. $189,973 $1,828,855
Leased equipment............................................ -- 119,825
Leasehold improvements...................................... 6,264 169,335
-------- ----------
196,237 2,118,015
Less accumulated depreciation and amortization.............. (97,511) (176,756)
-------- ----------
$ 98,726 $1,941,259
======== ==========
</TABLE>

Depreciation and amortization of fixed assets totaled approximately
$13,000, $18,000 and $97,000 in 1994, 1995 and 1996, respectively.

5. NOTE PAYABLE TO RELATED PARTY

Note payable to related party consists of the following as of December 31:

<TABLE>
<CAPTION>
1995 1996
-------- --------
<S> <C> <C>
Note payable to a stockholder, due October 1, 1996, with
interest at 10% per annum. In 1996, the note was exchanged
for shares of the Company's common stock.................. $250,000 $ --
======== ========
</TABLE>

F-24
<PAGE> 98

VISION TWENTY-ONE, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

6. LONG-TERM DEBT

Long-term debt consists of the following:

<TABLE>
<CAPTION>
DECEMBER 31,
----------------------- SEPTEMBER 30,
1995 1996 1997
---------- ---------- -------------
(UNAUDITED)
<S> <C> <C> <C>
Unsecured notes payable to a stockholder, interest
and principal due on January 1, 1998, with
interest at 8.5% per annum...................... $ -- $ 700,000 --
Notes payable under $300,000 line of credit, due
on demand, bearing interest at prime plus 1%
(9.5% at December 31, 1995 and 9.25% at December
31, 1996). Interest due monthly. The notes are
collateralized by accounts receivable and were
refinanced with a bank in 1997 (Note 11)........ -- 252,124 --
Unsecured note payable to a stockholder, due on
demand, with interest at 9% per annum. Interest
due monthly. The note was refinanced with a bank
in 1997 (Note 11)............................... -- 293,262 --
Unsecured note payable to a stockholder with
interest at 8% per annum. Interest and principal
due upon completion of an initial public
offering........................................ -- 3,000,000 --
Unsecured notes payable to stockholders, interest
at 8%. Principal and interest due the earlier of
15 business days after closing of an initial
public offering or March 1, 1998................ $ -- $1,924,959 --
10% senior subordinated notes, interest due
semiannually at an effective rate of 13.5%. The
notes are unsecured and mature on the earlier of
a first liquidity event (initial public
offering) or December 19, 1999 (Notes 10 and
11)............................................. -- 1,125,000 --
Other long term debt.............................. 112,967 323,878 179,153
---------- ---------- ----------
112,967 7,619,223 179,153
Less current portion.............................. (51,127) (48,249) (112,889)
---------- ---------- ----------
$ 61,840 $7,570,974 $ 66,264
========== ========== ==========
</TABLE>

As of December 31, 1996, the aggregate principal maturities of long-term
debt, without giving effect to an initial public offering and assuming the $3
million unsecured note payable to stockholder is repaid in 1998, are as follows:

F-25
<PAGE> 99

VISION TWENTY-ONE, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

7. CAPITAL LEASE OBLIGATIONS

The Company leases equipment under noncancelable capital leases (with an
initial or remaining term in excess of one year). Future minimum lease
commitments are as follows:

<TABLE>
<CAPTION>
YEAR ENDING DECEMBER 31:
- ------------------------
<S> <C>
1997...................................................... $ 54,413
1998...................................................... 50,195
1999...................................................... 31,604
2000...................................................... 14,706
2001...................................................... 1,364
--------
Total minimum lease payments................................ 152,282
Less amount representing interest........................... (36,563)
--------
Present value of minimum lease payments..................... $115,719
========
</TABLE>

8. COMMITMENTS AND CONTINGENCIES

Commitments

The Company leases its headquarters, store locations and certain office
equipment under noncancelable operating lease arrangements which expire at
various dates, most with options for renewal. Certain locations are leased from
stockholders of the Managed Professional Associations. As of December 31, 1996,
future minimum lease payments under noncancelable operating leases with original
terms of more than one year are as follows:

<TABLE>
<S> <C>
1997........................................................ $ 1,624,776
1998........................................................ 1,620,771
1999........................................................ 1,440,429
2000........................................................ 1,278,998
2001........................................................ 1,167,241
Thereafter.................................................. 8,730,469
-----------
Total....................................................... $15,862,684
===========
</TABLE>

Rent expense in 1994, 1995 and 1996 was approximately $61,000, $76,000 and
$280,000, respectively. Rent expense related to locations leased from
stockholders of the Managed Professional Associations was approximately $53,000
during 1996.

Malpractice

The Company and the Managed Professional Associations are insured with
respect to medical malpractice risks primarily on a claims-made basis.
Management is aware of a claim pending against one of the Managed Professional
Associations. The Company also is named in the suit; however, management of the
Company believes that the Company ultimately will be dismissed from the suit.
The claim, which alleges medical malpractice, and which relates to an incident
which occurred prior to December 1, 1996, is currently in the discovery stage
and no trial date has been set. The Managed Professional Association has
determined that its insurer is liable for any damages resulting from the claim
which are within the Managed Professional Association policy limits, as well as
the professional costs to defend the Managed Professional Association against
the claim. The insurer is currently providing the defense for the claim. In the
opinion of Management, the ultimate result of this matter will not have a
material adverse effect on the results of operations, financial condition or
liquidity of the Company.

F-26
<PAGE> 100

VISION TWENTY-ONE, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

Losses resulting from unreported claims cannot be estimated by management
and therefore, an accrual has not been included in the accompanying consolidated
financial statements.

9. INCOME TAXES

The Company did not have a current or deferred tax provision or benefit for
the years ended December 31, 1994, 1995 and 1996 or the nine months ended
September 30, 1995 and 1996 due to its net losses.

At December 31, 1995 and 1996 and at September 30, 1997, the Company had
temporary differences between amounts of assets and liabilities for financial
reporting purposes and such amounts measured by income tax reporting purposes.
The Company also has net operating loss (NOL) carryforwards available to offset
future taxable income. Significant components of the Company's deferred tax
assets and liabilities are as follows:

<TABLE>
<CAPTION>
DEFERRED TAX ASSET (LIABILITY)
---------------------------------------
DECEMBER 31,
----------------------- SEPTEMBER 30,
TEMPORARY DIFFERENCES/CARRYFORWARDS 1995 1996 1997
- ----------------------------------- --------- ----------- -------------
(UNAUDITED)
<S> <C> <C> <C>
Cash to accrual adjustments...................... $ 47,489 $ 469,859 $ 470,000
Net operating losses............................. 67,249 1,735,723 2,243,000
Other............................................ -- 220,418 220,000
--------- ----------- -----------
Total deferred tax assets.............. 114,738 2,426,000 2,933,000
Identifiable intangible assets not deductible for
tax purposes................................... -- (1,190,582) (4,290,000)
Other deferred tax liabilities................... (3,859) (278,282) (278,000)
Valuation allowance.............................. (110,879) (957,136) (81,000)
--------- ----------- -----------
Net deferred taxes..................... $ -- $ -- $(1,716,000)
========= =========== ===========
</TABLE>

Income taxes are different from the amount computed by applying the United
States statutory rate to income before income taxes for the following reasons:

<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
----------------------------------
1994 1995 1996
-------- --------- -----------
<S> <C> <C> <C>
Income tax benefit at the statutory rate............ $(51,876) $(416,987) $(2,080,676)
Permanent differences............................... 59,197 78,078 7,888
S-Corporation (income) loss......................... (7,435) 248,185 924,203
State taxes, net of federal benefit................. (12) (9,686) (122,628)
Change in valuation allowance....................... 126 100,410 1,271,213
-------- --------- -----------
Income taxes........................................ $ -- $ -- $ --
======== ========= ===========
</TABLE>

The Company has net operating loss carryforwards of approximately
$4,612,000 at December 31, 1996 that expire in various amounts from 2008 to
2011. These net operating loss carryforwards will be subject to the "ownership
change" rules of Section 382 of the Internal Revenue Code of 1986 and may be
limited as to their future use if there are changes in ownership exceeding 50%.

10. STOCKHOLDERS' EQUITY

Issuance of Stock

The Company entered into an agreement in 1993 to issue common stock in
exchange for cash received in 1993. The related shares of common stock were not
physically issued until June 30, 1996. For financial

F-27
<PAGE> 101

VISION TWENTY-ONE, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

reporting purposes the Company has presented these shares of common stock as if
they had been issued in 1993 since the ownership interest in those shares had
transferred in 1993.

Stock Option Plans

In July 1996, the Board of Directors adopted, and the stockholders of the
Company approved, two stock option plans: the Stock Incentive Plan (the
Incentive Plan) and the Affiliated Professionals Stock Plan (the Professionals
Plan and together with the Incentive Plan, the Plans). The purpose of the Plans
is to provide directors, officers, key employees, advisors and professionals
employed by the Managed Professional Associations with additional incentives by
increasing their proprietary interest in the Company or tying a portion of their
compensation to increases in the price of the Company's common stock. The
aggregate number of shares of common stock reserve for issuance related to the
Incentive Plan and the Professionals Plan is 1,000,000 shares and 600,000
shares, respectively. During 1996, the Company granted 459,667 and 102,333 stock
options to employees and non-employees, respectively, under the provisions of
the Plans with exercise prices equal to the estimated fair market value of the
Company's stock on the date of grant of $3.11 to $7.11. Compensation expense
under SFAS No. 123 for the 102,333 options issued to nonemployees was immaterial
for the year ended December 31, 1996 and approximately $70,000 (unaudited) for
the nine-month period ended September 30, 1997. The options vest over three to
four-year periods.

A summary of the Plans is as follows:

<TABLE>
<CAPTION>
DECEMBER 31, SEPTEMBER 30,
1996 1997
------------ -------------
(UNAUDITED)
<S> <C> <C>
Options outstanding......................................... 562,000 649,667
Options exercisable......................................... -- 64,000
</TABLE>

The weighted average grant-date fair value of all options granted during
1996 was $1.91. The weighted average remaining contractual life of those options
is 3.4 years.

Pro forma information regarding net income is required by SFAS 123, and has
been determined as if the Company had accounted for its employee stock options
under the fair value method of that Statement. The fair value for these options
was estimated at the date of grant using the Black-Scholes option pricing model
with the following weighted-average assumptions for 1996: risk-free interest
rate of 6.0%; a dividend yield of zero; volatility factors of the expected
market price of the Company's common stock based on industry trends; and a
weighted-average expected life of the options of 3.4 years. In addition, for pro
forma purposes, the estimated fair value of the options is amortized to expense
over the options' vesting period. Based on these assumptions, the pro forma net
loss and net loss per common share for the year ended December 31, 1996 would be
approximately $(6,235,000) and $(1.04), respectively.

Stock Compensation

In May 1996, the Company granted 144,705 shares of common stock to a
consultant as compensation for prior service (the Grant). In October 1996, the
Company entered into advisory and services agreements (the Agreements) with the
consultant and its chief medical officer whereby they would be entitled to
233,760 shares of common stock as compensation over the term of the Agreements.
The Company recorded issuance of the common stock at its fair value on the dates
of the Agreements and Grant. The expense is recognized in 1996 for the Grant and
over the related terms for the Agreements. For the year ended December 31, 1996,
the Company recognized expense of approximately $401,000 and $132,000, related
to the Grant and Agreements, respectively.

F-28
<PAGE> 102

VISION TWENTY-ONE, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

Warrants

During December 1996, the Company issued $1.25 million, 10% senior
subordinated notes (the Senior Notes) along with detachable warrants. The
warrants allow the holders to purchase 208,333 shares, subject to certain
adjustments, of the Company's common stock upon payment of $6 per share, subject
to certain adjustments. The Company has allocated $125,000 of the proceeds to
the warrants, representing their estimated fair value at the date of issuance,
as determined by an investment banking firm. The Senior Notes are limited in
aggregate principal amount to $1.25 million and mature on the earlier of a first
liquidity event or December 19, 1999. The Senior Notes bear stated interest at
the rate of 10% per annum payable semiannually in arrears on June 19 and
December 19, with an effective interest rate of 13.5% (Note 11). An amount equal
to the estimated value of the warrants will be amortized using the interest
method over the term of the Senior Notes.

11. SUBSEQUENT EVENTS

On February 7, 1997, the Company obtained a $2 million revolving line of
credit (LOC) from a commercial bank with interest at the rate of prime plus 1%.
Borrowings under the LOC are due on demand and are collateralized by
substantially all assets of the Company. A stockholder is also a guarantor of
the LOC. The proceeds from the LOC were used to refinance certain outstanding
debt as of December 31, 1996 and to provide additional working capital.

On February 28, 1997, the Company issued a $2 million, 10% senior
subordinated note with a detachable warrant to purchase 333,333 shares, subject
to certain adjustments, of the Company's common stock upon payment of $6 per
share, subject to certain adjustments. The Company allocated $200,000 of the
proceeds to the warrant, representing its estimated fair value at the date of
the transaction as determined by an investment banking firm. The warrant expires
on December 19, 2003. The note is due upon the earlier of a first liquidity
event (initial public offering) or December 19, 1999. The effective interest
rate on the note is 13.5% and the proceeds will be used to provide additional
working capital. An amount equal to the estimated value of the warrants will be
amortized using the interest method over the term of the note.

On April 11, 1997, the Company entered into a $4.88 million credit facility
bearing interest at 10%. The terms of the credit facility were amended on June
13, 1997 and July 29, 1997. The terms of the credit facility require the Company
to use $2 million of the proceeds from the credit facility to repay the $2
million revolving line of credit referred to above, with assignment of the
related collateral to the new lender. The remaining proceeds will be used to
provide additional working capital. The terms of the credit facility require the
Company to sell to the lender a warrant to purchase up to 210,000 shares of
common stock at a purchase price per share equal to the initial public offering
price. The warrant will be exercisable during the five-year period commencing at
the effective date of the Company's initial public offering. In addition to the
exercise price, the lender will pay the Company $126,000 for the warrant. The
Company believes the consideration paid and the exercise prices represent the
fair value of the warrant. Accordingly, no amounts will be amortized to interest
expense. The terms of the credit facility extend the maturity of the credit
facility to the earlier of January 1, 1998 or completion of an initial public
offering. The credit facility was repaid with proceeds of the Company's initial
public offering which was completed in August, 1997.

On June 6, 1997, the Company's Board of Directors approved a 1-for-1.5
reverse stock split pursuant to the Company's initial public offering of common
stock. All share and per share amounts in the accompanying financial statements
have been restated to retroactively reflect the reverse split.

12. OTHER TRANSACTIONS (UNAUDITED)

During 1997, the Company acquired eight additional eye care practices, one
managed care company, a medical consulting company and an ambulatory surgical
center. The Company also intends to enter into

F-29
<PAGE> 103

VISION TWENTY-ONE, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

business management agreements with these entities. The acquisitions have been
and will be accounted for by recording assets and liabilities at fair value and
allocating the remaining cost to the related Management Agreements. The fair
value of the net assets and business management agreements associated with these
entities is expected to approximate $16.2 million (subject to certain
adjustments), and will be paid through the issuance of 1,284,212 shares of the
Company's common stock (subject to certain adjustments), $3.8 million due to
selling shareholders and $700,000 in cash. The amount due to selling
shareholders will be paid upon completion of the post-closing adjustment period,
which is no more than ninety days from the closing date of the transactions. The
Common Stock to be issued in connection with these acquisitions will be valued
at $3.96 to $10.30 per share. An additional 197,470 shares of Common Stock will
be held in escrow. The shares held in escrow will be due the owners of certain
of the eye care practices if certain financial goals are met in the
eighteen-month period following the effective date of the transactions
(generally at several dates through February 1999). Such financial goals were
established to resolve certain differences between the Company and the owners of
the eye care practices regarding the purchase price valuations of the practices.
Any additional shares of Common Stock held in escrow which are ultimately issued
by the Company if such financial goals are met will be treated as an adjustment
of the purchase price of the assets acquired from the eye care practices. Based
upon information to date, management of the Company believes that the ultimate
issuance of any such shares held in escrow will not have a material adverse
effect on the results of operations, financial condition or liquidity of the
Company.

On August 18, 1997, the Company completed a public offering (the "Initial
Public Offering") of 2,100,000 shares of Common Stock. The Initial Public
Offering price was $10.00 per share, resulting in gross offering proceeds of
$21,000,000. Net proceeds to the Company, net of underwriters' discount and
other offering expenses, were $18,056,461 (unaudited). The net proceeds of the
offering were used to repay outstanding debt and for other general corporate
uses. In connection with the early extinguishment of certain indebtedness repaid
from the net proceeds of the Initial Public Offering, the Company incurred an
extraordinary charge of $323,346 (unaudited) during the nine months ended
September 30, 1997.

On October 10, 1997, the Company received a written commitment for a bridge
loan credit facility of $37,000,000 at an interest rate of the three-month
London Interbank Offered Rate plus 400 basis points. The loan will be due at the
earlier of six months from closing of the loan or the completion of an
additional equity offering. The loan will be collateralized by all assets of the
Company.

On October 15, 1997, the Company signed a letter of intent to acquire all
of the outstanding stock of BBG-COA, Inc. and all related subsidiaries and
affiliated companies ("Block Vision") from Block Vision's shareholders for a
maximum amount of $37.5 million comprised of cash and Common Stock of the
Company. The Company will account for the acquisition by recording the assets
and liabilities at their fair values and allocating the remaining cost to
goodwill.

F-30
<PAGE> 104

REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS

To the Board of Directors
and Shareholders of
BBG-COA, Inc.

In our opinion, the accompanying consolidated balance sheets and the
related consolidated statements of operations and accumulated deficit and of
cash flows present fairly, in all material respects, the financial position of
BBG-COA, Inc. and its subsidiaries (the "Company") at April 30, 1997 and 1996,
and the results of their operations and their cash flows for each of the three
years in the period ended April 30, 1997, in conformity with generally accepted
accounting principles. These financial statements are the responsibility of the
Company's management; our responsibility is to express an opinion on these
financial statements based on our audits. We conducted our audits of these
statements in accordance with generally accepted auditing standards which
require that we plan and perform the audit to obtain reasonable assurance about
whether the financial statements are free of material misstatement. An audit
includes examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements, assessing the accounting principles
used and significant estimates made by management, and evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for the opinion expressed above.

PRICE WATERHOUSE LLP

Fort Lauderdale, Florida
July 1, 1997, except as to Note 10,
which is as of August 19, 1997

F-31
<PAGE> 105

BBG-COA, INC.

CONSOLIDATED BALANCE SHEETS

<TABLE>
<CAPTION>
APRIL 30,
-------------------------
1997 1996
----------- -----------
<S> <C> <C>
ASSETS
Current assets
Cash...................................................... $ 653,228 $ 704,312
Accounts receivable:
Receivables from buying group members, less allowance
for doubtful accounts of $35,632 and $56,406.......... 6,031,354 6,441,516
Managed vision care fees receivable.................... 284,529 211,484
Receivables from fee for service plans................. 727,802 18,128
Other.................................................. 237,603 106,862
Prepaid expenses and other current assets................. 81,334 143,510
Prepaid income taxes...................................... 191,971 273,055
Deferred income taxes..................................... 31,810 122,243
----------- -----------
Total current assets.............................. 8,239,631 8,021,110
Restricted cash............................................. 125,000 125,000
Furniture, fixtures and purchased software, net............. 915,913 482,225
Other assets................................................ 50,826 156,083
Goodwill, less accumulated amortization of $2,684,636 and
$2,312,735................................................ 5,144,180 5,516,081
----------- -----------
Total assets...................................... $14,475,550 $14,300,499
=========== ===========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities
Current portion of capital lease obligations.............. $ 33,750 $ 40,000
Accounts payable:
Payables to buying group suppliers..................... 5,726,000 6,126,767
Managed vision care claim reserves..................... 1,507,835 1,018,607
Fee for service plans claims payable................... 719,455 13,458
Accrued liabilities....................................... 306,699 394,311
----------- -----------
Total current liabilities......................... 8,293,739 7,593,143
Line of credit.............................................. 3,302,352 4,446,415
Capital lease obligations................................... 18,414 24,890
----------- -----------
Total liabilities................................. 11,614,505 12,064,448
----------- -----------
Shareholders' equity
Common stock, $0.01 par value, authorized 3,000,000
shares; issued and outstanding 1,363,814 shares........ 13,638 13,638
Additional paid-in capital................................ 3,828,365 3,828,365
Accumulated deficit....................................... (980,958) (1,605,952)
----------- -----------
Total shareholders' equity........................ 2,861,045 2,236,051
----------- -----------
Total liabilities and shareholders' equity........ $14,475,550 $14,300,499
=========== ===========
</TABLE>

The accompanying notes are an integral part of these financial statements.

F-32
<PAGE> 106

BBG-COA, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS AND ACCUMULATED DEFICIT

<TABLE>
<CAPTION>
YEAR ENDED APRIL 30,
---------------------------------------
1997 1996 1995
----------- ----------- -----------
<S> <C> <C> <C>
Revenues:
Buying group sales.................................... $54,589,487 $56,361,820 $63,245,994
Managed vision care division fees..................... 14,386,981 8,283,865 --
----------- ----------- -----------
Total revenues................................ 68,976,468 64,645,685 63,245,994
Expenses:
Cost of product -- buying group....................... 51,816,568 53,448,373 58,287,963
Cost of service -- managed vision care division....... 10,220,761 5,965,721 --
Selling and administrative expenses................... 5,474,972 4,747,000 4,135,986
Provision for relocation costs........................ -- -- 552,000
----------- ----------- -----------
67,512,301 64,161,094 62,975,949
Income from operations.................................. 1,464,167 484,591 270,045
Interest expense........................................ 291,354 364,163 335,956
Other (income) expense, net............................. (14,303) 36,454 31,348
----------- ----------- -----------
Income (loss) before income taxes....................... 1,187,116 83,974 (97,259)
Provision for income taxes.............................. 562,122 166,479 126,188
----------- ----------- -----------
Net income (loss)............................. 624,994 (82,505) (223,447)
Accumulated deficit -- beginning of year................ (1,605,952) (1,523,447) (1,300,000)
----------- ----------- -----------
Accumulated deficit -- end of year...................... $ (980,958) $(1,605,952) $(1,523,447)
=========== =========== ===========
</TABLE>

The accompanying notes are an integral part of these financial statements.

F-33
<PAGE> 107

BBG-COA, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

<TABLE>
<CAPTION>
YEAR ENDED APRIL 30,
-----------------------------------
1997 1996 1995
----------- --------- ---------
<S> <C> <C> <C>
Cash flows from operating activities
Net income (loss)........................................ $ 624,994 $ (82,505) $(223,447)
Adjustments to reconcile net income (loss) to net cash
provided by operating activities
Depreciation and amortization......................... 646,901 478,256 455,220
Changes in assets and liabilities
(Increase) decrease in accounts receivable.......... (503,298) (510,244) 426,424
Decrease (increase) in prepaid expenses and other
current assets................................... 62,176 53,292 (119,765)
Decrease (increase) in prepaid income taxes......... 81,084 (215,000) (42,654)
Decrease (increase) in deferred income taxes........ 90,433 187,640 (134,142)
Increase in restricted cash......................... -- (125,000) --
Decrease (increase) in other assets................. 105,257 (78,386) 14,021
Increase (decrease) in accounts payable............. 794,458 1,502,110 (368,754)
(Decrease) increase in accrued liabilities.......... (87,612) (1,044,481) 710,756
Other............................................... -- 37,337 --
----------- --------- ---------
Net cash provided by operating activities........ 1,814,393 203,019 717,659
----------- --------- ---------
Cash flows from investing activities
Capital expenditures..................................... (708,688) (347,175) (51,513)
----------- --------- ---------
Net cash used in investing activities............ (708,688) (347,175) (51,513)
----------- --------- ---------
Cash flows from financing activities
(Repayments of) proceeds from revolving credit loan,
net................................................... (1,144,063) 881,675 (33,220)
Repayments of capital lease obligations.................. (12,726) (37,000) (11,304)
Repayments of long-term debt and notes
payable -- shareholders............................... -- (370,000) (666,667)
----------- --------- ---------
Net cash (used in) provided by financing
activities..................................... (1,156,789) 474,675 (711,191)
----------- --------- ---------
Net (decrease) increase in cash............................ (51,084) 330,519 (45,045)
Cash -- beginning of year.................................. 704,312 373,793 418,838
----------- --------- ---------
Cash -- end of year........................................ $ 653,228 $ 704,312 $ 373,793
=========== ========= =========
Supplemental cash flow information
Cash paid during the year for:
Interest.............................................. $ 291,354 $ 378,000 $ 364,290
=========== ========= =========
Income taxes.......................................... $ 652,532 $ 265,000 $ 251,400
=========== ========= =========
</TABLE>

The accompanying notes are an integral part of these financial statements.

F-34
<PAGE> 108

BBG-COA, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

1. NATURE OF BUSINESS AND SUMMARY OF ACCOUNTING POLICIES

NATURE OF BUSINESS

BBG-COA, Inc. (the "Company") through its wholly-owned subsidiary, Block
Vision, Inc. ("BVI") (formerly Block Buying Group, Inc.), provides billing and
collection services to suppliers of optical products, through its buying group
division ("buying group"). The Company, through its managed care division and
through BVI's wholly-owned subsidiary, Block Vision of Texas, Inc. ("BVT")
provides vision benefit management services to health maintenance organizations,
preferred provider organizations and other managed care entities.

BASIS OF PRESENTATION AND CONSOLIDATION

The consolidated financial statements have been prepared in conformity with
generally accepted accounting principles and reflect management's estimates and
assumptions, such as those regarding managed vision care costs that affect the
recorded amounts. These consolidated financial statements include the accounts
of the Company and its subsidiaries. All material intercompany transactions have
been eliminated. References to 1997, 1996 and 1995 refer to the fiscal years
ended April 30, 1997, 1996 and 1995, respectively.

REVENUE RECOGNITION

The buying group business provides billing and collection services to
suppliers of optical products, whereby providers receive merchandise from
suppliers for direct shipment to the providers. The Company pays the vendors and
likewise bills the providers for such products. The Company receives revenue by
retaining generally 5% of the total receivables collected by the Company. This
commission revenue is included in buying group sales in the accompanying
statements of operations and is recognized upon shipment of merchandise by the
suppliers.

The managed vision care division of the Company provides vision care
administrative services to health maintenance organizations and other groups,
generally based on predetermined monthly fees. The Company reimburses
participating vision care providers for vision care services rendered by such
providers to enrollees of the Company's clients.

CASH AND CASH EQUIVALENTS

Short-term investments with a maturity of three months or less at the time
of purchase are reported as cash equivalents and include a certificate of
deposit.

RESTRICTED CASH

The Company established a Texas subsidiary during 1996 which is subject to
various regulatory restrictions. At April 30, 1997 and 1996, the Company
maintained a minimum required surplus of $125,000, including a statutory deposit
of $50,000.

FURNITURE, FIXTURES AND PURCHASED SOFTWARE

Furniture, fixtures and purchased software are carried at cost less
accumulated depreciation and amortization. Depreciation and amortization expense
is computed using the straight-line method based on estimated useful lives of
the assets ranging from 5 to 7 years.

GOODWILL

The cost of acquired businesses in excess of values assigned to net assets
is amortized over 20 years. Amortization expense for each of the years ended
April 30, 1997, 1996 and 1995 was $371,901, and is included in selling and
administrative expenses. The Company periodically reviews the recoverability of
goodwill from future cash flows, and adjusts the carrying value as required. At
April 30, 1997 and 1996, the Company determined that goodwill, net of
accumulated amortization, was not impaired.

F-35
<PAGE> 109

BBG-COA, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

MANAGED VISION CARE CLAIM RESERVES

The Company has accrued a liability for unpaid claims of $546,054 and
$328,142 at April 30, 1997 and 1996, respectively, and a liability for claims
incurred but not reported (IBNR) of $961,781 and $690,465 at April 30, 1997 and
1996, respectively. The liability for IBNR claims includes amounts for which
services by a vision care provider have been rendered but are not yet paid and
an estimate of costs incurred but not reported. Accruals are based on
estimations of the Company's incurred claims. The accrued liabilities for unpaid
claims and for claims incurred but not reported are included in accounts
payable.

INCOME TAXES

The Company provides for income taxes in accordance with the provisions of
Statement of Financial Accounting Standards No. 109 ("SFAS No. 109"),
"Accounting for Income Taxes." SFAS No. 109 requires the Company to recognize
deferred tax liabilities and assets for the expected future tax consequences of
events that have been recognized in the Company's financial statements or tax
returns. Under this method, deferred tax assets and liabilities are determined
based on the differences between the financial statement carrying amounts and
the tax bases of assets and liabilities using enacted tax rates in effect in the
year in which the differences are expected to reverse.

CASH FLOW INFORMATION

Certain noncash transactions are excluded from the consolidated statement
of cash flows as follows:

<TABLE>
<CAPTION>
1997 1996 1995
------- ---- --------
<S> <C> <C> <C>
Noncash investing and financing activities
Fixed assets acquired under capital leases................ $29,181 $ -- $113,194
</TABLE>

STOCK BASED COMPENSATION

The Company's employee stock option plan is accounted for using the
intrinsic value method as prescribed by Accounting Principles Board Opinion No.
25 ("APB 25"). Effective May 1, 1996, the Company adopted Statement of Financial
Accounting Standards No. 123 ("SFAS No. 123"), "Accounting for Stock Based
Compensation". SFAS No. 123 establishes a fair value based accounting method of
accounting for stock based compensation plans. As permitted under the Statement,
the Company has elected to continue to apply the provisions of APB 25 and to
comply with the disclosure requirements of SFAS No. 123. There was no effect on
the Company's results of operations or financial position upon adoption of the
Statement (see Note 7).

2. FURNITURE, FIXTURES AND PURCHASED SOFTWARE

Furniture, fixtures and purchased software consist of the following:

<TABLE>
<CAPTION>
APRIL 30,
-----------------------
1997 1996
---------- ----------
<S> <C> <C>
Furniture and fixtures...................................... $ 442,088 $ 368,354
Computer equipment.......................................... 432,603 383,147
Purchased software.......................................... 933,735 348,237
Leasehold improvements...................................... 16,001 16,001
---------- ----------
1,824,427 1,115,739
Less: Accumulated depreciation and amortization............. 908,514 633,514
---------- ----------
$ 915,913 $ 482,225
========== ==========
</TABLE>

F-36
<PAGE> 110

BBG-COA, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

Included in selling and administrative expenses is depreciation and
amortization expense for the years ended April 30, 1997, 1996 and 1995 of
$275,000, $106,355 and $83,319, respectively. The Company leases certain
computer equipment under capital leases with an aggregate cost of $142,375 and
$113,058 at April 30, 1997 and 1996, respectively.

3. DEBT AND CREDIT AGREEMENTS

<TABLE>
<CAPTION>
APRIL 30,
-----------------------
1997 1996
---------- ----------
<S> <C> <C>
Line of credit.............................................. $3,302,352 $4,446,415
Capital lease obligations................................... 52,164 64,890
---------- ----------
3,354,516 4,511,305
Less: Current portion....................................... 33,750 40,000
---------- ----------
$3,320,766 $4,471,305
========== ==========
</TABLE>

At April 30, 1997 and 1996, the Company had $3,302,352 and $4,446,415,
respectively, outstanding under a financing agreement (the "Agreement") with
NationsBank. The Agreement expires on September 30, 1997. Under the Agreement,
borrowings under a line of credit facility are limited to the lesser of
$6,500,000 or approximately 85% of accounts receivable (maximum line of
approximately $6,189,095 at April 30, 1997). The Agreement also contains a
letter of credit facility which is limited to $2,200,000. The exposure under the
letters of credit, calculated from time to time, reduces the amount available
under the line of credit. As of April 30, 1997 and 1996, the Company had caused
letters of credit to be issued to suppliers to guarantee future payments for up
to $1,425,000 and $1,770,000, respectively. The outstanding borrowings under the
line of credit bear interest at the prime interest rate plus 1%. Additionally,
the Company is required to pay a commitment fee of .5% annually on the unused
portion of the commitment. Borrowings under the Agreement are secured by
substantially all assets of the Company. The Agreement, as amended, contains
certain financial covenants including the maintenance of minimum levels of
profitability and maximum debt to equity leverage ratios.

4. INCOME TAXES

A summary of the provision (benefit) for income taxes follows:

<TABLE>
<CAPTION>
YEAR ENDED APRIL 30,
------------------------------
1997 1996 1995
-------- -------- --------
<S> <C> <C> <C>
Current
Federal.............................................. $402,748 $(33,654) $188,305
State................................................ 68,942 13,493 72,337
-------- -------- --------
471,690 (20,161) 260,642
-------- -------- --------
Deferred
Federal.............................................. 76,728 136,166 (98,027)
State................................................ 13,704 51,474 (36,545)
-------- -------- --------
90,432 187,640 (134,572)
-------- -------- --------
$562,122 $167,479 $126,070
======== ======== ========
</TABLE>

At April 30, 1997, 1996 and 1995, the Company has net operating loss
carryforwards of approximately $0, $95,000 and $0, respectively, for both
financial reporting and federal income tax purposes. Differences between book
and taxable income primarily relate to non-deductible amortization of goodwill.

F-37
<PAGE> 111

BBG-COA, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

The tax effect of temporary differences which give rise to deferred income
tax assets as of April 30, 1997 and 1996 are as follows:

<TABLE>
<CAPTION>
1997 1996
------- --------
<S> <C> <C>
Allowance for doubtful accounts............................. $13,408 $ 20,037
Returns and allowance reserve............................... -- 30,400
Net operating loss carryforwards............................ -- 32,020
Deferred gains.............................................. 6,593 11,850
Other....................................................... 11,809 27,936
------- --------
Deferred tax asset.......................................... $31,810 $122,243
======= ========
</TABLE>

5. CREDIT AND CONCENTRATION RISK

Financial instruments which subject the Company to concentrations of credit
risk consist principally of buying group accounts receivables. The Company
provides credit, in the normal course of business, to a large number of
optometrists.

Revenues generated from sales of products from one vendor constituted
approximately 15%, 16% and 19% of the Company's buying group sales revenue
during the years ended April 30, 1997, 1996 and 1995, respectively. Revenues
generated from sales of products from a second vendor constituted 14%, 13% and
12% of the Company's buying group sales revenue during the years ended April 30,
1997, 1996 and 1995, respectively.

Capitation payments generated from three managed care customers comprised
12%, 11% and 7% of total capitation payments during the year ended April 30,
1997.

6. EMPLOYEE BENEFIT PLANS

The Company sponsors a 401(k) plan to which employees can contribute 1%
- -15% of their pretax salary. The Company makes a discretionary match of this
amount. During the years ended April 30, 1997 and 1996, the Company's expense
for this plan was $57,364 and $33,478, respectively.

During the year ended April 30, 1995, the Company sponsored defined benefit
and contribution plans. The Company's pension expense under these plans in 1995
was $75,323.

7. STOCK OPTIONS

In May 1993, the Company adopted an incentive stock option plan ("Plan"),
which authorized the granting of options to purchase 100,000 shares of the
Company's common stock. On June 15, 1993, the Company granted 67,500 options to
key employees at an option price of $4.33 per share which was determined to be
the fair market value on the date of grant. In fiscal year 1995, 6,250 options
lapsed due to the resignation of an employee. On May 18, 1995, the Company
authorized the grant of 23,750 options at an option price of $7.00 per share
which was determined to be the fair market value on the date of grant. Of the
23,750 options authorized for grant in May 1995, only 21,250 were issued. On
December 26, 1995, the Company granted the remaining 17,500 options to key
employees at an option price of $7.00 per share which was determined to be the
fair market value on the date of grant. These options vest over 36 to 48 months
and can be exercised over a 10-year period beginning with the respective date of
grant. At April 30, 1997, there were no options available for issuance under the
Plan and no options had been exercised as of April 30, 1997.

The fair value of each option grant is estimated on the date of grant using
the Black Scholes option-pricing model with the following weighted-average
assumptions used for grants in fiscal year 1996: dividend yield of 0%; risk-free
interest rate of 6.76%; and expected lives of 7.5 years.

F-38
<PAGE> 112

BBG-COA, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

A summary of the Company's stock option plan as of and for each of the
three years ended April 30, 1997 is as follows:

<TABLE>
<CAPTION>
1997 1996 1995
------------------ ------------------ -----------------
WEIGHTED WEIGHTED WEIGHTED
AVERAGE AVERAGE AVERAGE
EXERCISE EXERCISE EXERCISE
SHARES PRICE SHARES PRICE SHARES PRICE
------- -------- ------- -------- ------ --------
<S> <C> <C> <C> <C> <C> <C>
Outstanding at beginning of year.......... 100,000 $5.36 61,250 $4.33 67,500 $4.33
Granted................................. -- -- 41,250 7.00 -- --
Exercised............................... -- -- -- -- -- --
Forfeited............................... -- -- (2,500) 7.00 (6,250) 4.33
------- ----- ------- ----- ------ -----
Outstanding at end of year................ 100,000 $5.36 100,000 $5.36 61,250 $4.33
======= ===== ======= ===== ====== =====
Weighted-average fair value of options
granted during the year................. $ -- $7.00 $ --
===== ===== =====
</TABLE>

The following table summarizes information about stock options outstanding
at April 30, 1997:

<TABLE>
<CAPTION>
OPTIONS OUTSTANDING
--------------------------------
WEIGHTED
AVERAGE WEIGHTED
RANGE OF CONTRACTUAL AVERAGE
EXERCISE REMAINING EXERCISE
PRICES NUMBER LIFE PRICE
-------- ------- ----------- --------
<S> <C> <C> <C>
$4.33.................................................... 61,250 6 years $4.33
$7.00.................................................... 38,750 8 years 7.00
- ------------- ------- --------- -------
$4.33 - $7.00............................................ 100,000 7 years $5.36
============= ======= ========= =======
</TABLE>

8. RELOCATION COSTS

In January 1995, the Company's Board of Directors approved the relocation
of the Company's operations to Florida. In 1995, the Company recorded a $552,000
charge for the costs associated with the move. These charges cover office moving
costs, severance payments to approximately 15 employees not relocating, and
moving costs for employees relocating including closing costs and real estate
commissions on new homes.

9. COMMITMENTS

OPERATING LEASES

The Company leases its office facilities and various equipment. Total
rental expense for the years ended April 30, 1997, 1996 and 1995 was $256,648,
$227,662 and $149,316, respectively. Approximate minimum annual rental
commitments under non-cancelable operating leases at April 30, 1997 are as
follows:

<TABLE>
<S> <C>
1998........................................................ $224,731
1999........................................................ 199,926
2000........................................................ 205,055
2001........................................................ 210,804
2002........................................................ 17,637
Thereafter.................................................. --
--------
$858,153
========
</TABLE>

F-39
<PAGE> 113

BBG-COA, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

CUSTOMER CONTRACTS

The Company has entered into several contracts with health maintenance
organizations ("HMO's"). These contracts define a business relationship whereby
the Company, through its network of providers, arranges vision care services to
members of the HMO's pursuant to a predetermined reimbursement schedule. The HMO
contracts generally have a term of one to two years, but generally may be
terminated by either party without cause on 60-90 days notice.

10. SUBSEQUENT EVENT

On August 19, 1997, the Company and NationsBank entered into a verbal
agreement to renew the Company's line of credit facility through September 30,
1998.

* * * * *

F-40
<PAGE> 114

BBG-COA, INC.

CONSOLIDATED BALANCE SHEET

<TABLE>
<CAPTION>
JULY 31,
1997
-----------
(UNAUDITED)
<S> <C>
ASSETS
Current assets
Cash...................................................... $ 338,845
Accounts receivable:
Receivables from buying group members, less allowance
for doubtful accounts of $41,632..................... 5,058,177
Managed vision care fee receivables.................... 718,420
Receivables from fee for service plans................. 785,701
Prepaid expenses and other current assets................. 41,848
Prepaid income taxes...................................... (9,163)
Deferred income taxes..................................... 24,173
-----------
Total current assets.............................. 6,958,001
Restricted cash............................................. 125,000
Furniture, fixtures and purchased software, net............. 977,787
Other assets................................................ 133,513
Goodwill, less accumulated amortization of $2,777,612....... 5,051,204
-----------
Total assets...................................... $13,245,505
===========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities
Current portion of capital lease obligations.............. $ 27,511
Accounts payable:
Payables to buying group suppliers..................... 4,830,741
Managed vision care claim reserves..................... 1,207,326
Fee for service plans claims payable................... 563,568
Accrued liabilities....................................... 193,956
-----------
Total current liabilities......................... 6,823,102
Line of credit.............................................. 3,124,134
Other long-term liabilities................................. 40,211
-----------
Total liabilities................................. 9,987,447
-----------
Shareholders' equity
Common stock, $0.01 par value, authorized 3,000,000
shares;
issued and outstanding 1,363,814 shares................ 13,638
Additional paid-in capital................................ 3,828,365
Accumulated deficit....................................... (583,945)
-----------
Total shareholders' equity........................ 3,258,058
-----------
Total liabilities and shareholders' equity........ $13,245,505
===========
</TABLE>

The accompanying notes are an integral part of these financial statements.

F-41
<PAGE> 115

BBG-COA, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS AND ACCUMULATED DEFICIT

<TABLE>
<CAPTION>
THREE-MONTH PERIOD ENDED
JULY 31,
--------------------------
1997 1996
----------- -----------
(UNAUDITED)
<S> <C> <C>
Revenues:
Buying group sales........................................ $13,921,435 $14,021,144
Managed vision care division fees......................... 3,913,145 2,883,234
----------- -----------
Total revenues.................................... 17,834,580 16,904,378
Expenses:
Cost of product -- buying group........................... 13,233,812 13,322,123
Cost of service -- managed vision care division........... 2,418,131 1,973,292
Selling and administrative expenses....................... 1,428,039 1,257,195
----------- -----------
17,079,982 16,552,610
Income from operations............................ 754,598 351,768
Interest expense............................................ 60,228 92,968
Other income, net........................................... (8,596) (8,363)
----------- -----------
Income before income taxes.................................. 702,966 267,163
Provision for income taxes.................................. 305,953 210,259
----------- -----------
Net income........................................ 397,013 56,904
Accumulated deficit -- beginning of period.................. (980,958) (1,605,952)
----------- -----------
Accumulated deficit -- end of period........................ $ (583,945) $(1,549,048)
=========== ===========
</TABLE>

The accompanying notes are an integral part of these financial
statements.

F-42
<PAGE> 116

BBG-COA, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

<TABLE>
<CAPTION>
THREE-MONTH PERIOD ENDED
JULY 31,
--------------------------
1997 1996
----------- -----------
(UNAUDITED)
<S> <C> <C>
Cash flows from operating activities
Net income................................................ $ 397,013 $ 56,904
Adjustments to reconcile net income to net cash provided
by operating activities
Depreciation and amortization.......................... 164,975 140,975
Changes in assets and liabilities
Decrease in accounts receivable...................... 718,990 1,179,937
Decrease in prepaid expenses and other current
assets.............................................. 39,486 30,963
Decrease in prepaid income taxes..................... 201,134 109,064
Decrease in deferred income taxes.................... 7,637 41,734
Increase in other assets............................. (82,687) (41,875)
Decrease in accounts payable......................... (1,351,655) (1,186,636)
Decrease in accrued liabilities...................... (112,743) (220,019)
Other................................................ 40,211 115,502
----------- -----------
Net cash provided by operating activities......... 22,361 226,549
----------- -----------
Cash flows from investing activities
Capital expenditures...................................... (133,874) (143,380)
----------- -----------
Net cash used in investing activities............. (133,874) (143,380)
----------- -----------
Cash flows from financing activities
Repayments of revolving credit loan, net.................. (178,217) (436,518)
Repayments of capital lease obligations................... (24,653) (13,015)
----------- -----------
Net cash used in financing activities............. (202,870) (449,533)
----------- -----------
Net decrease in cash........................................ (314,383) (366,364)
Cash -- beginning of period................................. 653,228 704,312
----------- -----------
Cash -- end of period....................................... $ 338,845 $ 337,948
=========== ===========
Supplemental cash flow information
Cash paid during the period for:
Interest............................................... $ 60,227 $ 92,968
=========== ===========
</TABLE>

The accompanying notes are an integral part of these financial statements.

F-43
<PAGE> 117

BBG-COA, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)

1. BASIS OF PRESENTATION

The consolidated financial statements of BBG-COA, Inc. and its subsidiaries
(the "Company") have been prepared pursuant to the rules and regulations of the
Securities and Exchange Commission. Certain information and note disclosures
normally included in financial statements prepared in accordance with generally
accepted accounting principles have been condensed or omitted. The interim
financial data is unaudited; however, in the opinion of the Company, the interim
data includes all adjustments, consisting only of normal recurring adjustments,
necessary for a fair statement of the results for interim periods.

These consolidated financial statements should be read in conjunction with
the audited financial statements and the notes thereto contained in the
prospectus.

The Company believes that the maturation of the Company's managed vision
care business and the Company's termination of certain unprofitable managed
vision care contracts has resulted in lower participant utilization and higher
gross profits on the Company's managed vision care business during the quarter
ended July 31, 1997. However, the results of operations for the three month
period ended July 31, 1997 are not necessarily indicative of the results to be
expected for the full year.

2. AMENDMENT OF FINANCING AGREEMENT

On October 1, 1997, the Company and NationsBank executed an amendment to
the Company's financing agreement to extend the maturity date of the agreement
to September 30, 1998 and to amend various covenants specified in the agreement.

3. SALE OF COMPANY

On October 13, 1997, BBG-COA's Board of Directors approved the terms of a
letter of intent for the acquisition by Vision Twenty-One, Inc. of 100% of the
issued and outstanding shares of BBG-COA's common stock for $35.0 million
consideration consisting of cash and the common stock of Vision Twenty-One, Inc.
plus the assumption of certain indebtedness. Additional shares of common stock
will be held in escrow as contingent consideration, deliverable upon the
attainment of certain operating results.

F-44
<PAGE> 118

REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS

Stockholders
Eye Institute of Southern Arizona, P.C.

We have audited the accompanying balance sheets of Eye Institute of
Southern Arizona, P.C. (the Company) as of December 31, 1995 and November 30,
1996, and the related statements of operations, stockholders' equity (deficit),
and cash flows for the year ended December 31, 1995 and the eleven-month period
ended November 30, 1996. These financial statements are the responsibility of
the Company's management. Our responsibility is to express an opinion on these
financial statements based on our audits.

In our opinion, the financial statements referred to above present fairly,
in all material respects, the financial position of Eye Institute of Southern
Arizona, P.C. at December 31, 1995 and November 30, 1996, and the results of its
operations and its cash flows for the year ended December 31, 1995 and the
eleven-month period ended November 30, 1996 in conformity with generally
accepted accounting principles.

ERNST & YOUNG LLP

Tampa, Florida
January 15, 1997

F-45
<PAGE> 119

EYE INSTITUTE OF SOUTHERN ARIZONA, P.C.

BALANCE SHEETS

<TABLE>
<CAPTION>
DECEMBER 31, NOVEMBER 30,
1995 1996
------------ ------------
<S> <C> <C>
ASSETS
Current assets:
Cash...................................................... $ 2,494 $ 49,943
Patient accounts receivable, net of allowances for
contractual adjustments and uncollectible accounts of
$612,000 and $466,000 at December 31, 1995 and November
30, 1996, respectively................................. 383,887 438,549
Due from related parties.................................. -- 8,032
Other receivables......................................... 94,023 39,113
Prepaid expenses.......................................... 14,354 14,818
---------- ----------
Total current assets.............................. 494,758 550,455
Deferred tax asset.......................................... 48,672 128,068
Property, equipment and improvements, net................... 1,552,728 1,463,539
---------- ----------
Total assets...................................... $2,096,158 $2,142,062
========== ==========
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
Current liabilities:
Accounts payable.......................................... $ 21,462 $ 42,844
Accrued compensation...................................... 180,022 141,449
Other current liabilities................................. 115,365 56,484
Due to related parties.................................... 57,985 --
Deferred tax liability.................................... 48,672 128,068
Current portion of capital lease obligation............... 50,884 55,107
---------- ----------
Total current liabilities......................... 474,390 423,952
Capital lease obligation, net of current portion............ 1,998,256 1,947,389
Stockholders' equity (deficit):
Common stock, $5 par value: 100,000 shares authorized;
2,000 shares issued and outstanding.................... 10,000 10,000
Deficiency in retained earnings........................... (386,488) (239,279)
---------- ----------
Total stockholders' equity (deficit).............. (376,488) (229,279)
---------- ----------
Total liabilities and stockholders' equity
(deficit)....................................... $2,096,158 $2,142,062
========== ==========
</TABLE>

See accompanying notes.

F-46
<PAGE> 120

EYE INSTITUTE OF SOUTHERN ARIZONA, P.C.

STATEMENTS OF OPERATIONS

<TABLE>
<CAPTION>
ELEVEN-MONTH
YEAR ENDED PERIOD ENDED
DECEMBER 31, NOVEMBER 30,
1995 1996
------------ ------------
<S> <C> <C>
Revenues:
Net patient service revenues.............................. $3,649,990 $2,747,555
Premium revenue........................................... -- 69,401
Other..................................................... 355,644 338,774
---------- ----------
Total revenues.................................... 4,005,634 3,155,730
Expenses:
Salaries and benefits -- physicians....................... 2,522,538 1,658,590
Salaries and benefits -- other............................ 726,974 630,409
General and administrative................................ 358,936 298,254
Building and equipment rent............................... 175,918 168,424
Interest expense.......................................... 166,084 152,371
Depreciation and amortization............................. 112,175 100,473
---------- ----------
Total expenses.................................... 4,062,625 3,008,521
---------- ----------
Net income (loss)................................. $ (56,991) $ 147,209
========== ==========
</TABLE>

See accompanying notes.

F-47
<PAGE> 121

EYE INSTITUTE OF SOUTHERN ARIZONA, P.C.

STATEMENTS OF STOCKHOLDERS' EQUITY (DEFICIT)

<TABLE>
<CAPTION>
TOTAL
COMMON STOCK DEFICIENCY IN STOCKHOLDERS'
---------------- RETAINED EQUITY
SHARES AMOUNT EARNINGS (DEFICIT)
------ ------- ------------- -------------
<S> <C> <C> <C> <C>
BALANCE AT JANUARY 1, 1995............................ 2,000 $10,000 $(329,497) $(319,497)
Net loss............................................ -- -- (56,991) (56,991)
----- ------- --------- ---------
BALANCE AT DECEMBER 31, 1995.......................... 2,000 10,000 (386,488) (376,488)
Net income.......................................... -- -- 147,209 147,209
----- ------- --------- ---------
BALANCE AT NOVEMBER 30, 1996.......................... 2,000 $10,000 $(239,279) $(229,279)
===== ======= ========= =========
</TABLE>

See accompanying notes.

F-48
<PAGE> 122

EYE INSTITUTE OF SOUTHERN ARIZONA, P.C.

STATEMENTS OF CASH FLOWS

<TABLE>
<CAPTION>
ELEVEN-MONTH
YEAR ENDED PERIOD ENDED
DECEMBER 31, NOVEMBER 30,
1995 1996
------------ ------------
<S> <C> <C>
OPERATING ACTIVITIES
Net income (loss)........................................... $ (56,991) $147,209
Adjustments to reconcile net income (loss) to net cash
provided by (used in) operating activities:
Depreciation and amortization............................. 112,175 100,473
Changes in operating assets and liabilities:
Patient accounts receivable, net....................... (122,887) (54,662)
Due from related parties............................... 23,951 (8,032)
Other receivables...................................... (74,157) 54,910
Prepaid expenses....................................... 2,627 (464)
Accounts payable, accrued compensation and other
current liabilities................................... 46,505 (76,072)
Due to related parties................................. 42,152 (57,985)
--------- --------
Net cash provided by (used in) operating
activities...................................... (26,625) 105,377
INVESTING ACTIVITIES
Purchases of property and equipment......................... (24,783) (11,284)
--------- --------
Net cash used in investing activities....................... (24,783) (11,284)
FINANCING ACTIVITIES
Repayment of capital lease obligations...................... (46,984) (46,644)
--------- --------
Net cash used in financing activities....................... (46,984) (46,644)
--------- --------
Increase (decrease) in cash................................. (98,392) 47,449
Cash, beginning of period................................... 100,886 2,494
--------- --------
Cash, end of period......................................... $ 2,494 $ 49,943
========= ========
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION
Cash paid for interest...................................... $ 165,691 $148,741
========= ========
Cash paid for income taxes.................................. $ 40,168 $ --
========= ========
</TABLE>

See accompanying notes.

F-49
<PAGE> 123

EYE INSTITUTE OF SOUTHERN ARIZONA, P.C.

NOTES TO FINANCIAL STATEMENTS
NOVEMBER 30, 1996

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

NATURE OF OPERATIONS

Eye Institute of Southern Arizona, P.C., an Arizona Professional Company
(the Company), operates a professional medical practice in Tucson, Arizona,
specializing in general ophthalmology.

PROPERTY, EQUIPMENT AND IMPROVEMENTS

Property, equipment and improvements are carried at cost. The Company's
building is held under a capital lease agreement. Depreciation and amortization,
including amortization of assets held under capital lease agreements, are
computed using the straight-line method, with useful lives generally ranging
from 5 to 31 years. Routine maintenance and repairs are charged to expense as
incurred, while costs of betterments and renewals are capitalized.

NET PATIENT SERVICE REVENUES

Net patient service revenues are based on established billing rates less
allowances for contractual adjustments for patients covered by Medicare, the
Arizona Health Care Cost Containment System (AHCCCS) and various other discount
arrangements. Payments received under these programs and arrangements, which
generally are based on predetermined rates, are generally less than the
Company's customary charges, and the differences are recorded as contractual
adjustments at the time the related service is rendered.

The Company has contracted, effective August 1, 1996, with CIGNA as a
qualified provider of general ophthalmology services. The Company receives a
monthly capitation payment for all plan members in its assigned geographic area.
The premium revenue is paid pursuant to CIGNA HealthCare of Arizona guidelines
and administered on their behalf by Connecticut General Life Insurance Company.

On December 1, 1996, the Company contracted with FHP as a qualified
provider of general ophthalmology services. The Company will receive a monthly
capitation payment for all plan members in its assigned geographic area. The
premium revenue will be paid pursuant to FHP guidelines and administered on
their behalf by the Eye Specialists of Arizona Network.

The following table summarizes the percent of patient service revenues by
payor class:

<TABLE>
<CAPTION>
ELEVEN-MONTH
YEAR ENDED PERIOD ENDED
DECEMBER 31, NOVEMBER 30,
1995 1996
------------ ------------
<S> <C> <C>
Medicare................................................... 35% 38%
FHP and CIGNA.............................................. 36 31
Other (including self-pay)................................. 29 31
--- ---
100% 100%
=== ===
</TABLE>

Laws and regulations governing the Medicare and AHCCCS programs are complex
and subject to interpretation. The Company believes that it is in compliance
with all applicable laws and regulations and is not aware of any pending or
threatened investigations involving allegations of potential wrong doing. While
no such regulatory inquiries have been made, compliance with such laws and
regulations can be subject to future government review and interpretation as
well as significant regulatory action including fines, penalties and exclusion
from the Medicare and AHCCCS programs.

F-50
<PAGE> 124

EYE INSTITUTE OF SOUTHERN ARIZONA, P.C.

NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)

INCOME TAXES

Income taxes have been provided using the liability method in accordance
with Statement of Financial Accounting Standards No. 109, Accounting for Income
Taxes (SFAS 109). Under this method, deferred tax assets and liabilities are
determined based on differences between the financial reporting and tax bases of
assets and liabilities and are measured using the enacted tax rates and laws
that will be in effect when the differences are expected to reverse.

FAIR VALUE OF FINANCIAL INSTRUMENTS

The carrying amount for cash approximates its fair value because of its
short-term maturity. The fair value of the Company's capital lease obligation
cannot be determined due to its related party nature.

USE OF ESTIMATES

The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the amount reported in the financial statements and
accompanying notes. Actual results could differ from those estimates.

2. RELATED PARTY TRANSACTIONS

Kuskat Investment Company (Kuskat) owns certain real property and surgical
equipment which the Company leases. Kuskat is owned by the two shareholders of
the Company. Rent expense for property owned by Kuskat totaled approximately
$176,000 and $168,000 for the year ended December 31, 1995 and the eleven-month
period ended November 30, 1996, respectively.

Due (to) from related parties consists of the following:

<TABLE>
<CAPTION>
DECEMBER 31, NOVEMBER 30,
1995 1996
------------ ------------
<S> <C> <C>
Due to stockholders......................................... $(29,290) $(21,375)
Due (to) from Kuskat........................................ (43,025) 22,757
Employee advances........................................... 14,330 6,650
-------- --------
$(57,985) $ 8,032
======== ========
</TABLE>

3. PROPERTY, EQUIPMENT AND IMPROVEMENTS

Property, equipment and improvements consist of the following:

<TABLE>
<CAPTION>
DECEMBER 31, NOVEMBER 30,
1995 1996
------------ ------------
<S> <C> <C>
Building under capital lease................................ $ 2,450,000 $ 2,450,000
Leasehold improvements...................................... 53,005 53,005
Medical equipment........................................... 75,184 76,775
Office equipment............................................ 36,967 45,515
Automobiles................................................. 66,964 66,964
Computer equipment.......................................... 44,251 44,251
Other....................................................... 16,005 16,619
----------- -----------
2,742,376 2,753,129
Accumulated depreciation and amortization................... (1,189,648) (1,289,590)
----------- -----------
$ 1,552,728 $ 1,463,539
=========== ===========
</TABLE>

F-51
<PAGE> 125

EYE INSTITUTE OF SOUTHERN ARIZONA, P.C.

NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)

4. LEASE COMMITMENTS

The Company leases office space and medical equipment under capital and
operating leases.

Future minimum lease commitments under a related party capital lease and
noncancelable operating leases (with terms of one year or more) consist of the
following at November 30, 1996:

<TABLE>
<CAPTION>
CAPITAL OPERATING
LEASE LEASES
----------- ---------
<S> <C> <C>
Month ending December 31, 1996.............................. $ 17,748 $ 13,265
Year ending December 31:
1997...................................................... 212,976 159,180
1998...................................................... 212,976 159,180
1999...................................................... 212,976 145,915
2000...................................................... 212,976 --
2001...................................................... 212,976 --
Thereafter................................................ 2,644,291 --
----------- --------
Total minimum lease payments................................ 3,726,919 $477,540
========
Less amount representing interest........................... (1,724,423)
-----------
Present value of minimum lease payments..................... $ 2,002,496
===========
</TABLE>

5. INCOME TAXES

Deferred income taxes reflect the net tax effects of temporary differences
between the carrying amounts of assets and liabilities for financial reporting
purposes and the amounts used for income tax purposes. Significant components of
the Company's deferred tax assets and liabilities are as follows:

<TABLE>
<CAPTION>
DECEMBER 31, NOVEMBER 30,
1995 1996
------------ ------------
<S> <C> <C>
DEFERRED TAX ASSETS
Noncurrent:
Contribution carryforward................................. $ 663 $ 663
Net operating loss carryforward........................... 48,675 71,622
Lease capitalized for financial reporting purposes........ 207,771 196,746
Accumulated depreciation.................................. 59,474 62,615
-------- --------
316,583 331,646
Valuation allowance......................................... 267,911 203,578
-------- --------
Total deferred tax assets......................... $ 48,672 $128,068
======== ========
DEFERRED TAX LIABILITIES
Current:
Accrual to cash adjustment................................ $ 48,672 $128,068
-------- --------
Total deferred tax liabilities.................... $ 48,672 $128,068
======== ========
</TABLE>

F-52
<PAGE> 126

EYE INSTITUTE OF SOUTHERN ARIZONA, P.C.

NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)

Income taxes are different from the amount computed by applying the United
States statutory rate to income before income taxes for the following reasons:

<TABLE>
<CAPTION>
ELEVEN-MONTH
YEAR ENDED PERIOD ENDED
DECEMBER 31, NOVEMBER 30,
1995 1996
------------ -------------
<S> <C> <C>
Income taxes at the statutory rate.......................... $(19,377) $ 50,051
Permanent differences....................................... 8,892 3,494
State taxes, net of federal benefit......................... (1,832) 9,355
Change in valuation allowance............................... 12,598 (64,333)
Personal service corporation status......................... (281) 1,433
-------- --------
$ -- $ --
======== ========
</TABLE>

SFAS 109 requires a valuation allowance to reduce the deferred tax assets
reported if, based on the weight of the evidence, it is more likely than not
that some portion or all of the deferred tax assets will not be realized. After
consideration of all the evidence, both positive and negative, management has
determined that a $267,911 and $203,578 valuation allowance at December 31, 1995
and November 30, 1996, respectively, is necessary to reduce the deferred tax
assets to the amount that will more likely than not be realized. The change in
the valuation allowance for the current year is $(64,333). At November 30, 1996
and December 31, 1995, the Company has available net operating loss
carryforwards of approximately $174,000 and $119,000, respectively, which expire
in the years 2010 and 2011, respectively.

6. MALPRACTICE INSURANCE

The Company carries claims-made malpractice insurance for each of its
physicians. This insurance provides coverage of $3 million per incident, with a
$5 million annual limit. In addition, the Company has an umbrella policy which
provides coverage of $3 million per claim, with a $5 million annual limit.
Management is not aware of any reported claims pending against the Company.
Losses resulting from unreported claims cannot be estimated by management and,
therefore, are not included in the accompanying financial statements.

7. RETIREMENT PLAN

The Company maintains an employee savings plan under Section 401(k) of the
Internal Revenue Code. The plan covers substantially all employees. Management
has elected to not make matching or discretionary contributions to the plan.

8. SUBSEQUENT EVENT

On December 1, 1996, substantially all assets and liabilities of the
Company were acquired by Vision Twenty-One, Inc. (Vision) in exchange for
approximately 595,000 shares of Vision common stock. In connection therewith,
the Company entered into a 40-year business management agreement with Vision,
whereby Vision will provide substantially all nonmedical services to the
Company.

The financial statements of the Company have been prepared as supplemental
information about the association to which Vision will provide management
services following consummation of the acquisition. The Company previously
operated as a separate independent association. The historical financial
position, results of operations and cash flows do not reflect any adjustments
relating to the acquisition.

F-53
<PAGE> 127

REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS

Board of Directors
Daniel B. Feller, M.D., P.C., d/b/a
Paradise Valley Eye Specialists;
Eye Specialists of Arizona Network, P.C.; and
Sharona Optical, Inc.

We have audited the accompanying combined balance sheets of Daniel B.
Feller, M.D., P.C., d/b/a Paradise Valley Eye Specialists; Eye Specialists of
Arizona Network, P.C.; and Sharona Optical, Inc. (collectively referred to as
the Company), as of December 31, 1995 and November 30, 1996, and the related
combined statements of income, stockholders' equity, and cash flows for the year
ended December 31, 1995 and the eleven-month period ended November 30, 1996.
These financial statements are the responsibility of the Company's management.
Our responsibility is to express an opinion on these financial statements based
on our audits.

In our opinion, the financial statements referred to above present fairly,
in all material respects, the combined financial position of Daniel B. Feller,
M.D., P.C., d/b/a Paradise Valley Eye Specialists; Eye Specialists of Arizona
Network, P.C.; and Sharona Optical, Inc. at December 31, 1995 and November 30,
1996, and the combined results of their operations and their cash flows for the
year ended December 31, 1995 and the eleven-month period ended November 30, 1996
in conformity with generally accepted accounting principles.

ERNST & YOUNG LLP

Tampa, Florida
January 17, 1997

F-54
<PAGE> 128

DANIEL B. FELLER, M.D., P.C.,
D/B/A PARADISE VALLEY EYE SPECIALISTS;
EYE SPECIALISTS OF ARIZONA NETWORK, P.C.;
AND SHARONA OPTICAL, INC.

COMBINED BALANCE SHEETS

<TABLE>
<CAPTION>
DECEMBER 31, NOVEMBER 30,
1995 1996
------------ ------------
<S> <C> <C>
ASSETS
Current assets:
Cash...................................................... $ 32,543 $ 36,711
Patient accounts receivable, net.......................... 110,452 80,081
Inventory................................................. 60,768 62,450
Prepaid expenses and other................................ 7,808 6,929
-------- --------
Total current assets.............................. 211,571 186,171
Property and equipment, net................................. 314,307 242,204
Deposits.................................................... 10,363 10,363
-------- --------
Total assets...................................... $536,241 $438,738
======== ========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable.......................................... $ 23,033 $ 70,260
Accrued salaries and benefits............................. 36,017 30,015
Notes payable and current portion of long-term debt....... 36,560 32,786
Current portion of obligations under capital leases....... 10,385 11,097
Deferred tax liability...................................... 23,632 11,468
-------- --------
Total current liabilities......................... 129,627 155,626
Deferred tax liability...................................... 27,377 23,039
Loan payable -- stockholder................................. -- 4,648
Long-term debt, less current portion........................ 97,412 58,914
Obligations under capital leases, less current portion...... 35,264 25,060
Stockholders' equity:
Common stock, $1 par value: PVES -- 100,000 shares
authorized, 500 shares issued and outstanding;
ESAN -- 10,000 shares authorized, issued and
outstanding; Sharona Optical -- 500,000 shares
authorized, 5,000 shares issued and outstanding........ 15,500 15,500
Retained earnings......................................... 231,061 155,951
-------- --------
Total stockholders' equity........................ 246,561 171,451
-------- --------
Total liabilities and stockholders' equity........ $536,241 $438,738
======== ========
</TABLE>

See accompanying notes.

F-55
<PAGE> 129

DANIEL B. FELLER, M.D., P.C.,
D/B/A PARADISE VALLEY EYE SPECIALISTS;
EYE SPECIALISTS OF ARIZONA NETWORK, P.C.;
AND SHARONA OPTICAL, INC.

COMBINED STATEMENTS OF INCOME

<TABLE>
<CAPTION>
ELEVEN-MONTH
YEAR ENDED PERIOD ENDED
DECEMBER 31, NOVEMBER 30,
1995 1996
------------ -------------
<S> <C> <C>
Revenues:
Net patient service revenues.............................. $1,136,324 $ 888,289
Capitation revenues....................................... 1,433,085 1,272,761
Retail income............................................. 300,110 380,715
Rental income............................................. 19,700 16,550
Interest income........................................... 1,990 4,075
---------- ----------
Total revenues.................................... 2,891,209 2,562,390
Expenses:
Cost of sales............................................. 131,388 167,630
Salaries and benefits -- physicians....................... 743,957 530,226
Salaries and benefits -- all other........................ 745,425 760,307
Professional fees......................................... 383,478 381,707
Medical supplies.......................................... 108,964 46,210
General and administrative................................ 266,992 249,929
Building and equipment rent............................... 322,411 278,973
Depreciation and amortization............................. 76,596 82,340
Insurance................................................. 39,139 29,678
Interest.................................................. 12,945 12,525
---------- ----------
Total expenses.................................... 2,831,295 2,539,525
---------- ----------
Income before income taxes.................................. 59,914 22,865
Income tax expense (benefit)................................ (10,098) (16,502)
---------- ----------
Net income........................................ $ 70,012 $ 39,367
========== ==========
</TABLE>

See accompanying notes.

F-56
<PAGE> 130

DANIEL B. FELLER, M.D., P.C.,
D/B/A PARADISE VALLEY EYE SPECIALISTS;
EYE SPECIALISTS OF ARIZONA NETWORK, P.C.;
AND SHARONA OPTICAL, INC.

COMBINED STATEMENTS OF STOCKHOLDERS' EQUITY

<TABLE>
<CAPTION>
COMMON STOCK TOTAL
----------------- RETAINED STOCKHOLDERS'
NUMBER AMOUNT EARNINGS EQUITY
------ ------- --------- -------------
<S> <C> <C> <C> <C>
BALANCE, JANUARY 1, 1995........................ 15,500 $15,500 $ 233,049 $ 248,549
Distributions to stockholders................. -- -- (72,000) (72,000)
Net income.................................... -- -- 70,012 70,012
------ ------- --------- ---------
BALANCE, DECEMBER 31, 1995...................... 15,500 15,500 231,061 246,561
Distributions to stockholders................. -- -- (114,477) (114,477)
Net income.................................... -- -- 39,367 39,367
------ ------- --------- ---------
BALANCE, NOVEMBER 30, 1996...................... 15,500 $15,500 $ 155,951 $ 171,451
====== ======= ========= =========
</TABLE>

See accompanying notes.

F-57
<PAGE> 131

DANIEL B. FELLER, M.D., P.C.,
D/B/A PARADISE VALLEY EYE SPECIALISTS;
EYE SPECIALISTS OF ARIZONA NETWORK, P.C.;
AND SHARONA OPTICAL, INC.

COMBINED STATEMENTS OF CASH FLOWS

<TABLE>
<CAPTION>
ELEVEN-MONTH
YEAR ENDED PERIOD ENDED
DECEMBER 31, NOVEMBER 30,
1995 1996
------------ -------------
<S> <C> <C>
OPERATING ACTIVITIES
Net income.................................................. $ 70,012 $ 39,367
Adjustments to reconcile net income to net cash provided by
operating activities:
Depreciation and amortization............................. 76,596 82,340
Loss on disposal of fixed assets.......................... -- 6,963
Provision for doubtful accounts........................... 1,000 --
Deferred income taxes..................................... (10,098) (16,502)
Changes in assets and liabilities:
Patient accounts receivable............................ 64,857 30,371
Inventory.............................................. (4,768) (1,682)
Prepaid expenses and other............................. 5,721 879
Accounts payable....................................... 7,493 47,227
Accrued salaries and benefits.......................... 4,729 (6,002)
Loan payable--stockholder.............................. -- 4,648
--------- ---------
Net cash provided by operating activities......... 215,542 187,609
INVESTING ACTIVITIES
Purchases of property and equipment......................... (128,337) (17,200)
--------- ---------
Net cash used in investing activities............. (128,337) (17,200)
FINANCING ACTIVITIES
Proceeds from issuance of long-term debt.................... 33,689 21,250
Payments of long-term debt.................................. (34,561) (63,522)
Principal payments of capital leases........................ (8,546) (9,492)
Distributions to stockholders............................... (72,000) (114,477)
--------- ---------
Net cash used in financing activities............. (81,418) (166,241)
--------- ---------
Net increase in cash........................................ 5,787 4,168
Cash at beginning of period................................. 26,756 32,543
--------- ---------
Cash at end of period............................. $ 32,543 $ 36,711
========= =========
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION
Cash paid during the period for interest.................... $ 12,945 $ 12,525
========= =========
SUPPLEMENTAL SCHEDULE OF NONCASH INVESTING ACTIVITIES
Purchase of property and equipment through issuance of
capital lease obligations................................. $ 19,950 $ --
========= =========
</TABLE>

See accompanying notes.

F-58
<PAGE> 132

DANIEL B. FELLER, M.D., P.C.,
D/B/A PARADISE VALLEY EYE SPECIALISTS;
EYE SPECIALISTS OF ARIZONA NETWORK, P.C.;
AND SHARONA OPTICAL, INC.

NOTES TO COMBINED FINANCIAL STATEMENTS
NOVEMBER 30, 1996

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

NATURE OF OPERATIONS

Daniel B. Feller, M.D., P.C. d/b/a Paradise Valley Eye Specialists (PVES),
a professional corporation, operates a professional medical practice
specializing in optometry and general ophthalmology. Eye Specialists of Arizona
Network, P.C. (ESAN), a professional corporation with common ownership, was
formed in 1994 to negotiate capitated contracts with managed care companies.
Sharona Optical, Inc., a C-corporation, operates a retail store which sells
sunglasses and eyeglass frames. All three of the corporations operate in the
Phoenix area, and are hereinafter collectively referred to as the Company. All
significant intercompany transactions have been eliminated.

INVENTORIES

Inventories are stated at cost.

PROPERTY AND EQUIPMENT

Property and equipment are carried at cost. Depreciation is computed using
the straight-line method, with the assets' useful lives estimated at five to
seven years.

Property and equipment consists of the following:

<TABLE>
<CAPTION>
DECEMBER 31, NOVEMBER 30,
1995 1996
------------ ------------
<S> <C> <C>
Medical equipment........................................... $ 312,785 $ 335,500
Office equipment............................................ 186,718 191,158
Computer equipment.......................................... 99,140 104,873
Automobile.................................................. 34,494 --
--------- ---------
633,137 631,531
Less accumulated depreciation and amortization.............. (318,830) (389,327)
--------- ---------
$ 314,307 $ 242,204
========= =========
</TABLE>

Included in medical equipment as of December 31, 1995 and November 30, 1996
are assets acquired through capital leases with original costs of approximately
$57,000.

Amortization expense related to capital leases is included in depreciation
and amortization in the combined statements of income.

ESTIMATED FAIR VALUE OF FINANCIAL INSTRUMENTS

The carrying value of cash and accounts receivable are reflected in the
financial statements at fair value because of the short-term maturity of these
instruments.

F-59
<PAGE> 133

DANIEL B. FELLER, M.D., P.C.,
D/B/A PARADISE VALLEY EYE SPECIALISTS;
EYE SPECIALISTS OF ARIZONA NETWORK, P.C.;
AND SHARONA OPTICAL, INC.

NOTES TO COMBINED FINANCIAL STATEMENTS -- (CONTINUED)

The carrying amount and approximate fair values of the Company's long-term
debt and obligations under capital leases at December 31, 1995 and November 30,
1996 are as follows:

<TABLE>
<CAPTION>
1995 1996
-------------------- --------------------
ESTIMATED ESTIMATED
CARRYING FAIR CARRYING FAIR
AMOUNT VALUE AMOUNT VALUE
-------- --------- -------- ---------
<S> <C> <C> <C> <C>
$179,621 $183,516 $127,857 $143,161
======== ======== ======== ========
</TABLE>

Fair value is based on quoted market rates for debt with similar terms.

PATIENT SERVICE REVENUES

Revenues are based on established billing rates less allowances and
discounts for patients covered by Medicare, the Arizona Health Care Cost
Containment System (AHCCCS) and various other discount arrangements. Payments
received under these programs and arrangements, which are based on either
predetermined rates or the cost of services, are generally less than the
Company's customary charges. Revenues are recorded net of such contractual
adjustments or policy discounts.

For the year ended December 31, 1995 and the eleven-month period ended
November 30, 1996, the Company's net patient revenues derived from Medicare and
AHCCCS were approximately 15 percent. The Company does not believe that there
are any credit risks associated with receivables due from governmental agencies.
Concentration of credit risk from other payors is limited by the number of
patients and payors.

The Company has arrangements with third-party payors under capitated
medical services contracts. Under these contracts, the Company receives fixed,
monthly fees from the third-party payors for each covered life in exchange for
assuming responsibility for the provision of specified medical services.

INCOME TAXES

Income taxes for PVES have been provided using the liability method in
accordance with Statement of Financial Accounting Standards No. 109, Accounting
for Income Taxes. Under this method, deferred tax assets and liabilities are
determined based on differences between the financial reporting and tax bases of
assets and liabilities and are measured using the enacted tax rates and laws
that will be in effect when the differences are expected to reverse.

ESAN and Sharona Optical, Inc. have elected to have their income taxed as S
corporations under the federal Internal Revenue Code. As a result, in lieu of
corporate income tax, ESAN and Sharona Optical, Inc.'s taxable income is passed
through to the stockholders of ESAN and Sharona Optical, Inc. and taxed at the
individual level. Accordingly, no provision or liability for federal income tax
has been reflected in these combined financial statements for ESAN and Sharona
Optical, Inc.

F-60
<PAGE> 134

DANIEL B. FELLER, M.D., P.C.,
D/B/A PARADISE VALLEY EYE SPECIALISTS;
EYE SPECIALISTS OF ARIZONA NETWORK, P.C.;
AND SHARONA OPTICAL, INC.

NOTES TO COMBINED FINANCIAL STATEMENTS -- (CONTINUED)

USE OF ESTIMATES

The preparation of the combined financial statements in conformity with
generally accepted accounting principles requires management to make estimates
and assumptions that affect the amounts reported in the combined financial
statements and accompanying notes. Actual results could differ from those
estimates.

2. NOTES PAYABLE AND LONG-TERM DEBT

Notes payable and long-term debt consists of the following:

<TABLE>
<CAPTION>
DECEMBER 31, NOVEMBER 30,
1995 1996
------------ ------------
<S> <C> <C>
Promissory note bearing interest at prime plus .5% (9.25%
and 8.75% at December 31, 1995 and November 30, 1996,
respectively), payable in equal installments of $1,564,
principal and interest, through April 2000, collateralized
by office equipment....................................... $ 82,875 $ 65,674
Note payable with interest at 8%, payable in monthly
installments of $1,564, principal and interest, through
October 1999.............................................. 21,418 17,095
Promissory note bearing interest at prime plus .5% (9.25% at
December 31, 1995), payable in equal installments of $573,
principal and interest, paid in full October 1996......... 23,490 --
Note payable with interest at 8.25%, payable in monthly
installments of $2,731, principal and interest, through
February 1997............................................. -- 8,082
Installment loan from vendor for medical equipment.......... 6,189 849
-------- --------
133,972 91,700
Less current portion........................................ (36,560) (32,786)
-------- --------
Notes payable and long-term debt............................ $ 97,412 $ 58,914
======== ========
</TABLE>

As of November 30, 1996, maturities of notes payable and long-term debt is
as follows:

<TABLE>
<S> <C>
Month ending December 31, 1996.............................. $ 5,498
Year ending December 31:
1997...................................................... 29,295
1998...................................................... 24,313
1999...................................................... 24,776
2000...................................................... 7,818
-------
$91,700
=======
</TABLE>

F-61
<PAGE> 135

DANIEL B. FELLER, M.D., P.C.,
D/B/A PARADISE VALLEY EYE SPECIALISTS;
EYE SPECIALISTS OF ARIZONA NETWORK, P.C.;
AND SHARONA OPTICAL, INC.

NOTES TO COMBINED FINANCIAL STATEMENTS -- (CONTINUED)

3. LEASE COMMITMENTS

Future minimum lease commitments under noncancelable operating and capital
leases (with an initial or remaining term in excess of one year) at November 30,
1996 are as follows:

<TABLE>
<CAPTION>
CAPITAL OPERATING
LEASES LEASES
------- ----------
<S> <C> <C>
Month ending December 31, 1996.............................. $ 1,150 $ 17,947
Year ending December 31:
1997........................................................ 13,803 216,838
1998........................................................ 13,803 203,929
1999........................................................ 10,242 169,728
2000........................................................ 2,716 159,106
2001........................................................ -- 162,108
Thereafter.................................................. -- 229,653
------- ----------
Total minimum lease obligations............................. 41,714 $1,159,309
==========
Less amount representing interest........................... (5,557)
-------
Present value of minimum lease payments (including current
portion of $11,097)....................................... $36,157
=======
</TABLE>

4. MALPRACTICE INSURANCE

The Company carries claims-made malpractice insurance for each of its
physicians. This insurance provides coverage of $1,000,000 per incident, with a
$2,000,000 annual limit. In addition, the Company has an umbrella policy which
provides coverage of $5,000,000 per claim, with a $5,000,000 annual limit.
Management is not aware of any reported claims pending against the Company.
Losses resulting from unreported claims cannot be estimated by management and,
therefore, are not included in the accompanying combined financial statements.

5. RELATED PARTY TRANSACTIONS

The Company leases a medical building from a stockholder. Total lease
payments were approximately $167,000 for the eleven-month period ended November
30, 1996 and $122,000 for the year ended December 31, 1995. The Company also
leased a medical building from an employee with total lease payments
approximating $29,000 for the eleven-month period ended November 30, 1996 and
$36,000 for the year ended December 31, 1995.

The Company received rental income of approximately $17,000 for the
eleven-month period ended November 30, 1996 from a medical building sublease
arrangement with an affiliated physician. Future minimum rentals to be received
under this sublease arrangement total approximately $156,000 at November 30,
1996.

The Company paid a stockholder approximately $311,000 for the eleven-month
period ended November 30, 1996 and $448,000 for the year ended December 31, 1995
as compensation for services provided to the Company.

F-62
<PAGE> 136

DANIEL B. FELLER, M.D., P.C.,
D/B/A PARADISE VALLEY EYE SPECIALISTS;
EYE SPECIALISTS OF ARIZONA NETWORK, P.C.;
AND SHARONA OPTICAL, INC.

NOTES TO COMBINED FINANCIAL STATEMENTS -- (CONTINUED)

6. INCOME TAXES

Deferred income taxes reflect the net tax effects of temporary differences
between the carrying amounts of assets and liabilities for financial reporting
purposes and the amounts used for income tax purposes. Significant components of
PVES' deferred tax assets and liabilities are as follows:

<TABLE>
<CAPTION>
DECEMBER 31, NOVEMBER 30,
1995 1996
------------ ------------
<S> <C> <C>
DEFERRED TAX ASSETS
Noncurrent:
Tax credit carryforward................................... $ 5,286 $ 5,286
Net operating loss carryforward........................... 2,576 5,851
-------- --------
Total deferred tax assets......................... 7,862 11,137
DEFERRED TAX LIABILITIES
Current:
Accrual to cash........................................... 23,632 11,468
Noncurrent:
Capital lease............................................. 4,810 8,688
Depreciation expense...................................... 30,429 25,488
-------- --------
35,239 34,176
-------- --------
Total deferred tax liabilities.................... 58,871 45,644
-------- --------
Net deferred tax assets........................... $(51,009) $(34,507)
======== ========
</TABLE>

Components of the income tax provision (benefit) which relates only to PVES
consist of the following:

<TABLE>
<CAPTION>
DECEMBER 31, 1995 NOVEMBER 30, 1996
----------------------------- -----------------------------
CURRENT DEFERRED TOTAL CURRENT DEFERRED TOTAL
------- -------- -------- ------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
Federal.................. $ -- $ (9,038) $ (9,038) $ -- $(12,866) $(12,866)
State.................... -- (1,060) (1,060) -- (3,636) (3,636)
------- -------- -------- ------- -------- --------
$ -- $(10,098) $(10,098) $ -- $(16,502) $(16,502)
======= ======== ======== ======= ======== ========
</TABLE>

Income taxes are different from the amount computed by applying the United
States statutory rate to income before income taxes for the following reasons:

<TABLE>
<CAPTION>
ELEVEN-MONTH
YEAR ENDED PERIOD ENDED
DECEMBER 31, NOVEMBER 30,
1995 1996
------------ -------------
<S> <C> <C>
Income taxes at the statutory rate........................ $ 20,371 $ 7,774
Permanent differences..................................... 356 356
S corporation income...................................... (24,732) (21,865)
State taxes, net of federal benefit....................... (700) (2,400)
Tax credit................................................ (5,286) --
Personal service corporation status....................... (107) (367)
-------- --------
$(10,098) $(16,502)
======== ========
</TABLE>

At December 31, 1995 and November 30, 1996, PVES has available net
operating loss carryforwards of approximately $6,000 (which expires in 2010) and
$14,000 (which expires in 2011), respectively.

F-63
<PAGE> 137

DANIEL B. FELLER, M.D., P.C.,
D/B/A PARADISE VALLEY EYE SPECIALISTS;
EYE SPECIALISTS OF ARIZONA NETWORK, P.C.;
AND SHARONA OPTICAL, INC.

NOTES TO COMBINED FINANCIAL STATEMENTS -- (CONTINUED)

7. SUBSEQUENT EVENT

On December 1, 1996, substantially all assets and liabilities of Daniel B.
Feller, M.D., P.C., d/b/a Paradise Valley Eye Specialists, Eye Specialists of
Arizona Network, P.C., and Sharona Optical, Inc. were acquired by Vision
Twenty-One, Inc. (Vision) in exchange for approximately 421,000 shares of Vision
common stock and notes of approximately $150,000. In connection therewith, the
Company entered into a 40-year business management agreement with Vision,
whereby Vision will provide substantially all nonmedical services to the
practice.

The combined financial statements of Daniel B. Feller, M.D., P.C., d/b/a
Paradise Valley Eye Specialists; Eye Specialists of Arizona Network, P.C.; and
Sharona Optical, Inc. have been prepared as supplemental information about the
association to which Vision will provide management services following
consummation of the acquisition. The Company previously operated as a separate
independent association. The historical financial position, results of
operations and cash flows do not reflect any adjustments relating to the
acquisition.

F-64
<PAGE> 138

REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS

Board of Directors
Northwest Eye Specialists, P.L.L.C.

We have audited the accompanying balance sheets of Northwest Eye
Specialists, P.L.L.C. (the Company) as of December 31, 1995 and November 30,
1996, and the related statements of income, partners' equity, and cash flows for
the year ended December 31, 1995 and the eleven-month period ended November 30,
1996. These financial statements are the responsibility of the Company's
management. Our responsibility is to express an opinion on these financial
statements based on our audits.

In our opinion, the financial statements referred to above present fairly,
in all material respects, the financial position of Northwest Eye Specialists,
P.L.L.C. at December 31, 1995 and November 30, 1996, and the results of its
operations and its cash flows for the year ended December 31, 1995 and the
eleven-month period ended November 30, 1996 in conformity with generally
accepted accounting principles.

ERNST & YOUNG LLP

Tampa, Florida
January 15, 1997

F-65
<PAGE> 139

NORTHWEST EYE SPECIALISTS, P.L.L.C.

BALANCE SHEETS

<TABLE>
<CAPTION>
DECEMBER 31, NOVEMBER 30,
1995 1996
------------ ------------
<S> <C> <C>
ASSETS
Current assets:
Cash...................................................... $135,148 $122,445
Patient accounts receivable, net of allowances for
uncollectible accounts of approximately $49,000 and
$96,000 at December 31, 1995 and November 30, 1996,
respectively........................................... 195,209 349,974
Due from related parties.................................. 32,420 32,107
Prepaid expenses.......................................... 24,963 40,384
Inventories............................................... -- 65,476
-------- --------
Total current assets.............................. 387,740 610,386
Property, equipment and improvements, net................... 105,841 141,201
Other assets................................................ 27,072 27,072
-------- --------
Total assets...................................... $520,653 $778,659
======== ========
LIABILITIES AND PARTNERS' EQUITY
Current liabilities:
Accounts payable and accrued expenses..................... $ 53,832 $250,386
Accrued compensation...................................... 34,421 72,452
Accrued distributions to physicians....................... -- 101,260
Other accrued liabilities................................. 8,727 8,018
Profit sharing payable.................................... 51,162 30,000
Due to related parties.................................... 7,082 7,082
Short-term borrowings..................................... -- 45,000
Current maturities of obligations under capital leases.... 7,962 8,341
-------- --------
Total current liabilities......................... 163,186 522,539
Obligations under capital leases, net of current portion.... 19,742 12,337
Partners' equity............................................ 337,725 243,783
-------- --------
Total liabilities and partners' equity............ $520,653 $778,659
======== ========
</TABLE>

See accompanying notes.

F-66
<PAGE> 140

NORTHWEST EYE SPECIALISTS, P.L.L.C.

STATEMENTS OF INCOME

<TABLE>
<CAPTION>
ELEVEN-MONTH
YEAR ENDED PERIOD ENDED
DECEMBER 31, NOVEMBER 30,
1995 1996
------------ -------------
<S> <C> <C>
Revenues:
Net patient service revenues.............................. $2,302,823 $2,160,519
Sales of optical goods.................................... -- 250,901
Other..................................................... 42,399 2,964
---------- ----------
Total revenues.................................... 2,345,222 2,414,384
Expenses:
Salaries, wages and benefits.............................. 559,124 620,435
Cost of optical goods sold................................ -- 94,901
Medical supplies.......................................... 177,681 156,962
General and administrative................................ 430,894 571,594
Insurance................................................. 190,045 146,808
Building and equipment rent............................... 120,000 140,657
Depreciation and amortization............................. 26,372 27,688
Consulting fee to physician............................... -- 11,000
Interest.................................................. 50,817 5,353
---------- ----------
Total expenses.................................... 1,554,933 1,775,398
---------- ----------
Net income........................................ $ 790,289 $ 638,986
========== ==========
</TABLE>

See accompanying notes.

F-67
<PAGE> 141

NORTHWEST EYE SPECIALISTS, P.L.L.C.

STATEMENTS OF PARTNERS' EQUITY

<TABLE>
<CAPTION>
ELEVEN-MONTH
YEAR ENDED PERIOD ENDED
DECEMBER 31, NOVEMBER 30,
1995 1996
------------ -------------
<S> <C> <C>
Partners' equity, beginning of period....................... $ 278,895 $ 337,725
Net income................................................ 790,289 638,986
Cash contributions from partners.......................... 75,321 --
In-kind capital contributions from partner................ 120,000 151,657
Distributions to partners................................. (926,780) (884,585)
--------- ---------
Partners' equity, end of period............................. $ 337,725 $ 243,783
========= =========
</TABLE>

See accompanying notes.

F-68
<PAGE> 142

NORTHWEST EYE SPECIALISTS, P.L.L.C.

STATEMENTS OF CASH FLOWS

<TABLE>
<CAPTION>
ELEVEN-MONTH
YEAR ENDED PERIOD ENDED
DECEMBER 31, NOVEMBER 30,
1995 1996
------------ ------------
<S> <C> <C>
OPERATING ACTIVITIES
Net income.................................................. $ 790,289 $ 638,986
Adjustments to reconcile net income to net cash provided by
operating activities:
Depreciation and amortization............................. 26,372 27,688
In-kind capital contributions from partner................ 120,000 151,657
Changes in operating assets and liabilities:
Patient accounts receivable, net....................... (25,534) (154,765)
Due from related parties............................... (3,025) 313
Prepaid expenses....................................... (17,529) (15,421)
Inventories............................................ -- (65,476)
Accounts payable, accrued expenses and other........... 17,350 313,974
--------- ---------
Net cash provided by operating activities......... 907,923 896,956
INVESTING ACTIVITIES
Cash contributions from partners............................ 75,321 --
Purchases of property and equipment......................... (66,650) (63,048)
--------- ---------
Net cash provided by (used in) investing activities......... 8,671 (63,048)
FINANCING ACTIVITIES
Proceeds from short-term borrowings......................... -- 45,000
Principal payments on capital leases........................ (7,041) (7,026)
Distributions to partners................................... (926,780) (884,585)
--------- ---------
Net cash used in financing activities....................... (933,821) (846,611)
--------- ---------
Decrease in cash............................................ (17,227) (12,703)
Cash at beginning of period................................. 152,375 135,148
--------- ---------
Cash at end of period....................................... $ 135,148 $ 122,445
========= =========
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION
Cash paid during the year for interest...................... $ 48,013 $ 5,353
========= =========
</TABLE>

See accompanying notes.

F-69
<PAGE> 143

NORTHWEST EYE SPECIALISTS, P.L.L.C.

NOTES TO FINANCIAL STATEMENTS
NOVEMBER 30, 1996

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

NATURE OF OPERATIONS

Northwest Eye Specialists, P.L.L.C. (the Company), an Arizona Professional
Company, operates a professional medical practice in Tucson, Arizona,
specializing in general ophthalmology and surgery. Per the operating agreement
dated June 1, 1993, the Company will cease to exist upon the occurrence of
certain events or on December 31, 2050. Each member's liability for the debts
and obligation of the Company shall be limited as set forth in the Arizona
Limited Liability Company Act, Section 29-651.

INVENTORIES

Inventories consist primarily of optical lenses, contact lenses and
eyeglass frames (collectively, "optical goods"). Inventories are stated at the
lower of cost or market, with cost determined on a specific-identification
basis.

PROPERTY, EQUIPMENT AND IMPROVEMENTS

Property, equipment and improvements are carried at cost. Depreciation,
including amortization of assets held under capital lease obligations, is
computed using the straight-line method, with the assets' useful lives ranging
from 5 to 39 years. Routine maintenance and repairs are charged to expense as
incurred, while costs of betterments and renewals are capitalized.

Property, equipment and improvements consist of the following:

<TABLE>
<CAPTION>
DECEMBER 31, NOVEMBER 30,
1995 1996
------------ ------------
<S> <C> <C>
Medical equipment........................................... $ 57,827 $ 74,611
Office equipment............................................ 38,120 42,954
Optical shop equipment...................................... 15,000 19,158
Medical equipment held under capital leases................. 39,924 39,924
Leasehold improvements...................................... 7,121 44,393
-------- --------
157,992 221,040
Less accumulated depreciation and amortization.............. (52,151) (79,839)
-------- --------
$105,841 $141,201
======== ========
</TABLE>

Amortization expense related to capital leases is included in depreciation
and amortization in the accompanying statements of income.

NET PATIENT SERVICE REVENUES

Net patient service revenues are based on established billing rates, less
allowances for contractual adjustments for patients covered by Medicare, Arizona
Health Care Cost Containment System (AHCCCS) and various other discount
arrangements. Payments received under these programs and arrangements, which are
based on predetermined rates, are generally less than the Company's established
billing rates and the differences are recorded as contractual adjustments at the
time the related service is rendered.

For the year ended December 31, 1995 and the eleven-month period ended
November 30, 1996, approximately 53% and 52%, respectively, of the Company's net
patient service revenues were derived from the Medicare and AHCCCS programs. The
Company does not believe that there are any credit risks associated with
receivables due from governmental agencies. Concentration of credit risk from
other payors is

F-70
<PAGE> 144

NORTHWEST EYE SPECIALISTS, P.L.L.C.

NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)

limited by the number of patients and payors. The Company does not require any
form of collateral from its patients or third-party payors.

INCOME TAXES

The Company was organized as an Arizona Limited Liability Company and is
taxed as a partnership for federal and state income tax purposes. As a result,
in lieu of corporate income taxes, the Company's taxable income is passed
through to the partners of the Company and taxed at the individual taxpayer
level in accordance with their ownership interests. As a result, the
accompanying financial statements include no provision for income taxes for the
Company.

USE OF ESTIMATES

The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the amount reported in the financial statements and
accompanying notes. Actual results could differ from those estimates.

ESTIMATED FAIR VALUE OF FINANCIAL INSTRUMENTS

The carrying value of cash reflects its fair value because of the
short-term maturity of that financial instrument. It is not practicable to
estimate the fair value of the Company's capital lease obligation because the
Company's incremental borrowing rate cannot reasonably be determined.

2. RELATED PARTY TRANSACTIONS

The Company leases its operating facilities and certain equipment from a
partner of the Company. Expenses under such leases amounted to approximately
$120,000 and $141,000 for the year ended December 31, 1995 and the eleven-month
period ended November 30, 1996, respectively. Such amounts are recognized as
in-kind capital contributions from partner because no payment was made to the
partner.

The Company recognized expense of $11,000 for the eleven-month period ended
November 30, 1996 under a consulting agreement with a partner of the Company.
Such amount is recognized as in-kind capital contributions from partner because
no payment was made to the partner.

The Company reimbursed a partner in 1995 for interest on a loan relating to
the Company's facility. Such interest expense reimbursement was approximately
$51,000 for the year ended December 31, 1995. Although the partner incurred
interest on the loan in 1996, the Company did not reimburse the partner for such
interest in 1996.

F-71
<PAGE> 145

NORTHWEST EYE SPECIALISTS, P.L.L.C.

NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)

3. LEASE COMMITMENTS

At November 30, 1996, approximate future minimum rental commitments under
noncancelable operating leases (with an initial or remaining term in excess of
one year) and a capital lease are as follows (including related party leases):

<TABLE>
<CAPTION>
OPERATING CAPITAL
LEASES LEASE
---------- -------
<S> <C> <C>
Month ending December 31, 1996.............................. $ 10,984 $ 820
Year ending December 31:
1997...................................................... 133,955 9,845
1998...................................................... 134,492 9,845
1999...................................................... 121,820 2,461
2000...................................................... 120,000 --
Thereafter................................................ 6,000,000 --
---------- -------
Total minimum lease obligations............................. $6,521,251 22,971
==========
Less amount representing interest........................... (2,293)
-------
Present value of minimum lease obligations.................. $20,678
=======
</TABLE>

4. RETIREMENT PLAN

The Company maintains an employee savings and profit sharing plan under
Section 401(k) of the Internal Revenue Code. The plan covers substantially all
employees. Under the plan, the Company may make discretionary contributions
subject to various limits. Total Company expense related to the plan was
approximately $52,000 and $44,000 for the year ended December 31, 1995 and for
the eleven-month period ended November 30, 1996, respectively.

5. MALPRACTICE INSURANCE

The Company carries separate occurrence based malpractice insurance
policies for each of its two physicians. This insurance provides separate
per-occurrence coverage of $2,000,000 and $3,000,000, respectively, for the two
physicians with an aggregate limit of $4,000,000 and $5,000,000, respectively.
Management is not aware of any reported claims pending against the Company.
Losses resulting from unreported claims cannot be estimated by management and,
therefore, are not included in the accompanying financial statements.

6. SHORT-TERM BORROWINGS

Short-term borrowings represent a bank revolving line of credit of $75,000
for working capital needs, of which $30,000 is available at November 30, 1996.
The maturity date is June 16, 1997. Interest payments are due monthly with
interest accruing at the bank's prime rate (9.25% at November 30, 1996). The
revolving line of credit is collateralized by the Company's receivables and
guaranteed by the partners.

7. COMMITMENTS AND CONTINGENCIES

Other assets include an investment in an unrelated limited liability
investment company with a book value of $27,072 at December 31, 1995 and
November 30, 1996. Under the investment agreement, the investment company may
require additional capital contributions from the Company not to exceed $50,000
in the aggregate. Additional capital contributions of approximately $3,000 have
been made through November 30, 1996.

F-72
<PAGE> 146

NORTHWEST EYE SPECIALISTS, P.L.L.C.

NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)

8. OTHER REVENUE

Through December 31, 1995, an unrelated organization operated an optical
shop on the Company's premises. Other revenue for the year ended December 31,
1995 includes approximately $41,000 received by the Company related to the
optical shop arrangement with such unrelated organization.

9. SUBSEQUENT EVENT

On December 1, 1996, substantially all assets and liabilities of the
Company were acquired by Vision Twenty-One, Inc. (Vision) in exchange for
approximately 492,000 shares of Vision common stock and notes of approximately
$396,000. In connection therewith, the Company entered into a 40-year business
management agreement with Vision, whereby Vision will provide substantially all
nonmedical services to the practice.

The financial statements of the Company have been prepared as supplemental
information about the associations to which Vision will provide management
services following consummation of the acquisition. The Company previously
operated as a separate independent association. The historical financial
position, results of operations and cash flows do not reflect any adjustments
relating to the acquisition.

F-73
<PAGE> 147

REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS

Board of Directors
Lindstrom, Samuelson & Hardten Ophthalmology Associates, P.A.
and Vision Correction Centers, Inc.

We have audited the accompanying combined balance sheets of Lindstrom,
Samuelson & Hardten Ophthalmology Associates, P.A. and Vision Correction
Centers, Inc. as of December 31, 1995 and November 30, 1996, and the related
combined statements of operations, stockholders' equity, and cash flows for the
year ended December 31, 1995 and the eleven-month period ended November 30,
1996. These financial statements are the responsibility of the Company's
management. Our responsibility is to express an opinion on these financial
statements based on our audits.

In our opinion, the financial statements referred to above present fairly,
in all material respects, the combined financial position of Lindstrom,
Samuelson & Hardten Ophthalmology Associates, P.A. and Vision Correction
Centers, Inc. at December 31, 1995 and November 30, 1996, and the combined
results of their operations and their cash flows for the year ended December 31,
1995 and the eleven-month period ended November 30, 1996 in conformity with
generally accepted accounting principles.

ERNST & YOUNG LLP

Tampa, Florida
January 14, 1997

F-74
<PAGE> 148

LINDSTROM, SAMUELSON & HARDTEN OPHTHALMOLOGY ASSOCIATES, P.A. AND
VISION CORRECTION CENTERS, INC.

COMBINED BALANCE SHEETS

<TABLE>
<CAPTION>
DECEMBER 31, NOVEMBER 30,
1995 1996
------------ ------------
<S> <C> <C>
ASSETS
Current assets:
Cash...................................................... $ 353 $177,637
Patient accounts receivable, net of allowance for doubtful
accounts of approximately $51,000 and $48,000 at
December 31, 1995 and November 30, 1996,
respectively........................................... 305,103 290,272
Other receivables......................................... 5,000 11,706
Prepaid expenses.......................................... 12,473 3,932
-------- --------
Total current assets.............................. 322,929 483,547
Property, equipment and improvements, net................... 584,653 455,448
Other assets................................................ 51,912 36,771
-------- --------
Total assets...................................... $959,494 $975,766
======== ========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable and accrued expenses..................... $125,531 $257,421
Due to related party...................................... -- 84,825
Revolving credit note payable............................. -- 60,000
Current portion of long-term debt......................... 53,713 46,439
Current portion of obligations under capital leases....... 81,419 111,817
-------- --------
Total current liabilities......................... 260,663 560,502
Long-term debt.............................................. 106,938 65,079
Obligations under capital leases, net of current portion.... 388,299 316,473
Stockholders' equity:
Common stock, $1 par value: 100 shares authorized, issued
and outstanding........................................ 100 100
Retained earnings......................................... 203,494 33,612
-------- --------
Total stockholders' equity........................ 203,594 33,712
-------- --------
Total liabilities and stockholders' equity........ $959,494 $975,766
======== ========
</TABLE>

See accompanying notes.

F-75
<PAGE> 149

LINDSTROM, SAMUELSON & HARDTEN OPHTHALMOLOGY ASSOCIATES, P.A. AND
VISION CORRECTION CENTERS, INC.

COMBINED STATEMENTS OF OPERATIONS

<TABLE>
<CAPTION>
ELEVEN-MONTH
YEAR ENDED PERIOD ENDED
DECEMBER 31, NOVEMBER 30,
1995 1996
------------ ------------
<S> <C> <C>
Revenues:
Net patient service revenues.............................. $2,679,914 $3,404,975
Other..................................................... 61,171 57,991
---------- ----------
Total revenues.................................... 2,741,085 3,462,966
Expenses:
Compensation to physician stockholders.................... 884,903 947,780
Salaries, wages and benefits.............................. 585,386 746,251
Advertising............................................... 239,904 240,848
Professional fees -- related party........................ -- 591,455
Professional fees -- other................................ 197,680 164,794
General and administrative................................ 263,856 332,598
Medical supplies.......................................... 82,429 118,665
Insurance................................................. 73,697 31,496
Building and equipment rent............................... 162,534 171,980
Depreciation and amortization............................. 257,730 235,047
Interest.................................................. 79,674 51,934
---------- ----------
Total expenses.................................... 2,827,793 3,632,848
---------- ----------
Net loss.......................................... $ (86,708) $ (169,882)
========== ==========
</TABLE>

See accompanying notes.

F-76
<PAGE> 150

LINDSTROM, SAMUELSON & HARDTEN OPHTHALMOLOGY ASSOCIATES, P.A. AND
VISION CORRECTION CENTERS, INC.

COMBINED STATEMENTS OF STOCKHOLDERS' EQUITY

<TABLE>
<CAPTION>
COMMON STOCK TOTAL
--------------- RETAINED STOCKHOLDERS'
NUMBER AMOUNT EARNINGS EQUITY
------ ------ --------- -------------
<S> <C> <C> <C> <C>
BALANCE, JANUARY 1, 1995............................... 100 $100 $ 290,202 $ 290,302
Net loss............................................. -- -- (86,708) (86,708)
--- ---- --------- ---------
BALANCE, DECEMBER 31, 1995............................. 100 100 203,494 203,594
Net loss............................................. -- -- (169,882) (169,882)
--- ---- --------- ---------
BALANCE, NOVEMBER 30, 1996............................. 100 $100 $ 33,612 $ 33,712
=== ==== ========= =========
</TABLE>

See accompanying notes.

F-77
<PAGE> 151

LINDSTROM, SAMUELSON & HARDTEN OPHTHALMOLOGY ASSOCIATES, P.A. AND
VISION CORRECTION CENTERS, INC.

COMBINED STATEMENTS OF CASH FLOWS

<TABLE>
<CAPTION>
ELEVEN-MONTH
YEAR ENDED PERIOD ENDED
DECEMBER 31, NOVEMBER 30,
1995 1996
------------ ------------
<S> <C> <C>
OPERATING ACTIVITIES
Net loss.................................................... $ (86,708) $(169,882)
Adjustments to reconcile net loss to net cash provided by
operating activities:
Depreciation and amortization............................. 257,730 235,047
(Gain) loss on disposal of fixed assets................... (8,477) 1,096
Changes in assets and liabilities:
Patient accounts receivable, net....................... (20,851) 14,831
Other receivables...................................... 6,000 (6,706)
Prepaid expenses....................................... (1,298) 8,541
Accounts payable and accrued expenses.................. 16,867 116,807
Due to related party................................... -- 84,825
--------- ---------
Net cash provided by operating activities......... 163,263 284,559
INVESTING ACTIVITIES
Purchases of property and equipment......................... (55,947) (47,884)
(Increase) decrease in other assets......................... (1,089) 4,700
--------- ---------
Net cash used in investing activities....................... (57,036) (43,184)
FINANCING ACTIVITIES
Proceeds from issuance of revolving credit note payable..... -- 80,000
Payment of revolving credit note payable.................... -- (20,000)
Payment of long-term debt................................... (83,898) (49,133)
Principal payments on capital leases........................ (60,035) (74,958)
--------- ---------
Net cash used in financing activities....................... (143,933) (64,091)
--------- ---------
(Decrease) increase in cash................................. (37,706) 177,284
Cash at beginning of period................................. 38,059 353
--------- ---------
Cash at end of period....................................... $ 353 $ 177,637
========= =========
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION
Cash paid during the period for interest.................... $ 72,954 $ 56,000
========= =========
SUPPLEMENTAL DISCLOSURES OF NONCASH INVESTING ACTIVITY
Capital lease obligations incurred to acquire equipment..... $ 45,889 $ 33,530
========= =========
Loan and vendor accounts payable incurred to acquire
equipment................................................. $ 24,856 $ 15,083
========= =========
</TABLE>

See accompanying notes.

F-78
<PAGE> 152

LINDSTROM, SAMUELSON & HARDTEN OPHTHALMOLOGY ASSOCIATES, P.A.
AND VISION CORRECTION CENTERS, INC.

NOTES TO COMBINED FINANCIAL STATEMENTS
NOVEMBER 30, 1996

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

NATURE OF OPERATIONS

Lindstrom, Samuelson & Hardten Ophthalmology Associates, P.A. (Practice), a
Minnesota corporation, operates a professional medical practice, specializing in
general ophthalmology and surgery. Vision Correction Centers, Inc. (VCC), a
Minnesota corporation with common ownership with the Practice, was formed in
1994 to provide ophthalmic surgery services. Both corporations operate in the
greater Minneapolis and St. Paul area, and are hereinafter collectively referred
to as the Company. During 1995, VCC transferred all of its assets and
liabilities to the Practice and ceased all operations. All significant
intercompany transactions have been eliminated.

PROPERTY, EQUIPMENT AND IMPROVEMENTS

Property, equipment and improvements are carried at cost. Depreciation is
computed using straight-line and accelerated methods, with the assets' useful
lives estimated at five to seven years. Routine maintenance and repairs are
charged to expense as incurred, while costs of betterments and renewals are
capitalized.

Property, equipment and improvements consist of the following:

<TABLE>
<CAPTION>
DECEMBER 31, NOVEMBER 30,
1995 1996
------------ ------------
<S> <C> <C>
Medical equipment........................................... $ 991,724 $1,043,715
Office furniture and equipment.............................. 147,760 181,938
Computer software........................................... 25,021 25,521
Leasehold improvements...................................... 35,752 37,170
---------- ----------
1,200,257 1,288,344
Less accumulated depreciation and amortization.............. (615,604) (832,896)
---------- ----------
$ 584,653 $ 455,448
========== ==========
</TABLE>

Included in medical equipment as of December 31, 1995 and November 30, 1996
are assets acquired through capital leases with original costs of approximately
$558,000. Included in office furniture and equipment as of November 30, 1996 are
assets acquired through capital leases with original costs of approximately
$15,000.

Amortization expense related to capital leases is included in depreciation
and amortization in the combined statements of operations.

ESTIMATED FAIR VALUE OF FINANCIAL INSTRUMENTS

The carrying amount of cash and revolving credit note payable reported in
the combined financial statements reflects their fair value because of the
short-term maturity of those financial instruments. It is not practicable to
estimate the fair value of the Company's long-term debt and obligations under
capital leases because the Company's incremental borrowing rate cannot
reasonably be determined.

NET PATIENT SERVICE REVENUES

F-79
<PAGE> 153

LINDSTROM, SAMUELSON & HARDTEN OPHTHALMOLOGY ASSOCIATES, P.A.
AND VISION CORRECTION CENTERS, INC.

NOTES TO COMBINED FINANCIAL STATEMENTS -- (CONTINUED)

than the Company's established billing rates and the differences are recorded as
contractual adjustments at the time the related service is rendered.

For the year ended December 31, 1995 and the eleven-month period ended
November 30, 1996, approximately 23% and 19%, respectively, of the Company's net
patient service revenues were derived from the Medicare and Medicaid programs.
The Company does not believe that there are any credit risks associated with
receivables due from governmental agencies. Concentration of credit risk from
other payors is limited by the number of patients and payors. The Company does
not require any form of collateral from its patients or third-party payors.

Laws and regulations governing the Medicare and Medicaid programs are
complex and subject to interpretation. The Company believes that it is in
compliance with all applicable laws and regulations and is not aware of any
pending or threatened investigations involving allegations of potential wrong
doing. While no such regulatory inquires have been made, compliance with such
laws and regulations can be subject to future government review and
interpretation as well as significant regulatory action including fines,
penalties and exclusion from the Medicare and Medicaid programs.

ADVERTISING COSTS

The Company expenses advertising costs as incurred.

INCOME TAXES

Income taxes for VCC have been provided using the liability method in
accordance with Statement of Financial Accounting Standards No. 109, Accounting
for Income Taxes. Under this method, deferred tax assets and liabilities are
determined based on differences between the financial reporting and tax bases of
assets and liabilities and are measured using the enacted tax rates and laws
that will be in effect when the differences are expected to reverse.

The Practice is taxed under the provisions of Subchapter S of the Internal
Revenue Code, which generally provides that in lieu of corporate taxes, the
stockholders shall be taxed on the Practice's taxable income in accordance with
their ownership interests. As a result, the accompanying combined financial
statements include no provision for income taxes for the Practice.

USE OF ESTIMATES

The preparation of combined financial statements in conformity with
generally accepted accounting principles requires management to make estimates
and assumptions that affect the amount reported in the combined financial
statements and accompanying notes. Actual results could differ from those
estimates.

OTHER ASSETS

The Company purchased a physician practice in 1994. Costs of approximately
$43,000 and $32,000 (net of accumulated amortization of approximately $14,000
and $25,000) as of December 31, 1995 and November 30, 1996, respectively, are
included in other assets in the combined financial statements. The costs are
being amortized over five years and the related expense is included in
depreciation and amortization in the combined statements of operations.

F-80
<PAGE> 154

LINDSTROM, SAMUELSON & HARDTEN OPHTHALMOLOGY ASSOCIATES, P.A.
AND VISION CORRECTION CENTERS, INC.

NOTES TO COMBINED FINANCIAL STATEMENTS -- (CONTINUED)

2. LONG-TERM DEBT

Long-term debt consists of the following:

<TABLE>
<CAPTION>
DECEMBER 31, NOVEMBER 30,
1995 1996
------------ ------------
<S> <C> <C>
Bank term loan bearing interest at prime plus 1% (9.75% and
9.25% at December 31, 1995 and November 30, 1996,
respectively), payable in equal installments of $3,000
(principal and interest) through December 1998............. $100,475 $ 75,219
Note payable with interest imputed at 10%, payable in
monthly installments of $1,200 (principal and interest)
through September 1999..................................... 44,876 36,299
Installment loan from vendor for medical equipment......... 15,300 --
-------- --------
160,651 111,518
Less current portion....................................... (53,713) (46,439)
-------- --------
$106,938 $ 65,079
======== ========
</TABLE>

The term loan is collateralized by substantially all of the assets of the
Company.

As of November 30, 1996, the aggregate amounts of annual principal
maturities of long-term debt are as follows:

<TABLE>
<S> <C>
Month ending December 31, 1996.............................. $ 4,222
Year ending December 31:
1997...................................................... 46,239
1998...................................................... 50,693
1999...................................................... 10,364
--------
$111,518
========
</TABLE>

3. LEASE COMMITMENTS

Future minimum lease commitments under noncancelable operating and capital
leases (with an initial or remaining term in excess of one year) at November 30,
1996 are as follows:

<TABLE>
<CAPTION>
CAPITAL OPERATING
LEASES LEASES
-------- ---------
<S> <C> <C>
Month ending December 31, 1996.............................. $ 21,757 $ 15,277
Year ending December 31:
1997...................................................... 160,267 186,950
1998...................................................... 183,857 194,322
1999...................................................... 120,395 201,654
2000...................................................... 11,990 208,986
2001...................................................... 1,364 106,326
-------- --------
Total minimum lease payments................................ 499,630 $913,515
========
Less amount representing interest........................... (71,340)
--------
Present value of minimum lease payments..................... $428,290
========
</TABLE>

F-81
<PAGE> 155

LINDSTROM, SAMUELSON & HARDTEN OPHTHALMOLOGY ASSOCIATES, P.A.
AND VISION CORRECTION CENTERS, INC.

NOTES TO COMBINED FINANCIAL STATEMENTS -- (CONTINUED)

4. INCOME TAXES

At December 31, 1995, VCC had no deferred tax assets or liabilities as the
result of the sale of its assets to the Practice. This sale resulted in income
during 1995 for tax purposes.

Income taxes are different from the amount computed by applying the United
States statutory rate to income before income taxes for the following reasons:

<TABLE>
<CAPTION>
1995
--------
<S> <C>
Income taxes at the statutory rate.......................... $(29,481)
Permanent differences....................................... 28,573
S-corporation income........................................ 14,448
State taxes, net of federal benefit......................... 2,576
Benefit of graduated rates.................................. (6,825)
Change in valuation allowance............................... (9,291)
--------
$ --
========
</TABLE>

The change in the valuation allowance for the year ended December 31, 1995
was $9,291.

5. MALPRACTICE INSURANCE

The Company carries claims-made malpractice insurance for each of its
physicians. This insurance provides coverage of $5,000,000 per incident, with a
$5,000,000 annual limit. In addition, the Company has an umbrella policy which
provides coverage of $2,000,000 per claim, with a $4,000,000 annual limit.
Management is not aware of any reported claims pending against the Company.
Losses resulting from unreported claims cannot be estimated by management and,
therefore, are not included in the accompanying combined financial statements.

6. RETIREMENT PLAN

The Company maintains an employee savings and profit sharing plan under
Section 401(k) of the Internal Revenue Code. The plan covers substantially all
employees. Under the plan, the Company may make discretionary contributions
subject to various limits. Total Company expense related to this plan was
approximately $42,000 for the year ended December 31, 1995 and for the
eleven-month period ended November 30, 1996.

7. COMMITMENTS

The Company has employment agreements with each of the three
physician-stockholders which provide for, among other things, base pay and
incentive compensation based on the Company's net income. Additionally, the
Company has a deferred compensation agreement with each physician-stockholder
which provides for compensation in the event of voluntary or involuntary
termination. In connection with the transaction described in Note 9, each of the
aforementioned agreements was terminated.

The Company has a revolving credit note payable of $100,000 due on demand,
bearing interest at a rate of prime plus 0.5% (8.75% at November 30, 1996). As
of November 30, 1996, the Company had $60,000 outstanding on this revolving
credit note payable.

8. RELATED PARTY TRANSACTIONS

During the eleven-month period ended November 30, 1996, the Company
incurred costs of approximately $591,000 for the use of laser equipment owned by
Laser Vision Centers, Inc. (LVC). As of

F-82
<PAGE> 156

LINDSTROM, SAMUELSON & HARDTEN OPHTHALMOLOGY ASSOCIATES, P.A.
AND VISION CORRECTION CENTERS, INC.

NOTES TO COMBINED FINANCIAL STATEMENTS -- (CONTINUED)

November 30, 1996, $84,825 was payable to LVC and is included in due to related
party in the combined balance sheets. The majority stockholder of the Company is
a shareholder and director of LVC.

Subsequent to November 30, 1996, the Company executed a letter of intent
with LVC whereby the Company will sell certain equipment and assets with a net
book value of approximately $225,000. The letter of intent also states that the
Company will enter into a management service agreement with LVC for the
performance of various management services related to refractive surgery.

9. SUBSEQUENT EVENT

On December 1, 1996, substantially all assets and liabilities of the
Company were acquired by Vision Twenty-One, Inc. (Vision) in exchange for
approximately 371,000 shares of Vision common stock and notes of approximately
$460,000. In connection therewith, the Company entered into a 40-year business
management agreement with Vision, whereby Vision will provide substantially all
nonmedical services to the practice.

The combined financial statements of the Company have been prepared as
supplemental information about the associations to which Vision will provide
management services following consummation of the acquisition. The Company
previously operated as a separate independent association. The historical
financial position, results of operations and cash flows do not reflect any
adjustments relating to the acquisition.

F-83
<PAGE> 157

REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS

Board of Directors
Cambridge Eye Clinic, P.A. --
John W. Lahr, Optometrist, P.A. and
Eyeglass Express Optical Lab, Inc.

We have audited the accompanying combined balance sheets of Cambridge Eye
Clinic, P. A. -- John W. Lahr, Optometrist, P.A. and Eyeglass Express Optical
Lab, Inc. as of December 31, 1995 and November 30, 1996, and the related
combined statements of operations, stockholders' equity, and cash flows for the
year ended December 31, 1995 and the eleven-month period ended November 30,
1996. These financial statements are the responsibility of the Company's
management. Our responsibility is to express an opinion on these financial
statements based on our audits.

In our opinion, the financial statements referred to above present fairly,
in all material respects, the combined financial position of Cambridge Eye
Clinic, P. A. -- John W. Lahr, Optometrist, P.A. and Eyeglass Express Optical
Lab, Inc. at December 31, 1995 and November 30, 1996, and the combined results
of their operations and their cash flows for the year ended December 31, 1995
and the eleven-month period ended November 30, 1996 in conformity with generally
accepted accounting principles.

ERNST & YOUNG LLP

Tampa, Florida
January 10, 1997

F-84
<PAGE> 158

CAMBRIDGE EYE CLINIC, P. A.--
JOHN W. LAHR, OPTOMETRIST, P.A. AND
EYEGLASS EXPRESS OPTICAL LAB, INC.

COMBINED BALANCE SHEETS

<TABLE>
<CAPTION>
DECEMBER 31, NOVEMBER 30,
1995 1996
------------ ------------
<S> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents................................. $ 45,061 $ 83,302
Patient accounts receivable, net of allowances for
uncollectible accounts of approximately $37,000 and
$25,000 at December 31, 1995 and November 30, 1996,
respectively........................................... 191,680 129,517
Other receivables......................................... 3,374 15,668
Inventories............................................... 207,968 210,701
Prepaid expenses.......................................... 11,381 11,581
-------- --------
Total current assets.............................. 459,464 450,769
Deferred tax assets......................................... 31,433 33,237
Other assets................................................ 600 462
Property, equipment and improvements, net................. 149,518 101,922
-------- --------
Total assets...................................... $641,015 $586,390
======== ========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable and accrued expenses..................... $ 65,151 $141,222
Note payable to stockholder............................... 5,946 5,946
Demand notes payable...................................... 5,363 1,857
Current maturities of long-term debt...................... 24,795 22,330
Deferred tax liabilities.................................. 141,368 89,277
-------- --------
Total current liabilities......................... 242,623 260,632
Long-term debt, net of current portion...................... 155,480 161,557
Stockholders' equity:
Common stock, no par value: 2,500 shares authorized; 1,250
shares issued and outstanding.......................... -- --
Additional paid-in capital................................ 42,389 42,389
Note receivable from stock sales.......................... (12,850) --
Retained earnings......................................... 213,373 148,840
Treasury stock at cost (750 shares)....................... -- (27,028)
-------- --------
Total stockholders' equity........................ 242,912 164,201
-------- --------
Total liabilities and stockholders' equity........ $641,015 $586,390
======== ========
</TABLE>

See accompanying notes.

F-85
<PAGE> 159

CAMBRIDGE EYE CLINIC, P. A. --
JOHN W. LAHR, OPTOMETRIST, P.A. AND
EYEGLASS EXPRESS OPTICAL LAB, INC.

COMBINED STATEMENTS OF OPERATIONS

<TABLE>
<CAPTION>
ELEVEN-MONTH
YEAR ENDED PERIOD ENDED
DECEMBER 31, NOVEMBER 30,
1995 1996
------------ ------------
<S> <C> <C>
Revenues:
Net patient service revenues.............................. $ 537,834 $ 527,068
Sales of optical goods.................................... 900,826 749,783
Other income.............................................. 2,080 2,724
---------- ----------
Total revenues.................................... 1,440,740 1,279,575
Expenses:
Compensation to physician stockholder..................... 65,175 62,306
Salaries, wages and benefits.............................. 582,086 639,931
Cost of optical goods sold................................ 348,984 316,115
General and administrative................................ 182,769 177,697
Insurance................................................. 15,791 6,891
Building and equipment rent............................... 136,965 125,894
Depreciation.............................................. 60,878 42,458
Interest.................................................. 21,759 16,931
Other..................................................... 6,503 3,107
---------- ----------
Total expenses.................................... 1,420,910 1,391,330
---------- ----------
Income (loss) before income taxes........................... 19,830 (111,755)
Income tax expense (benefit)................................ 7,984 (47,222)
---------- ----------
Net income (loss)........................................... $ 11,846 $ (64,533)
========== ==========
</TABLE>

See accompanying notes.

F-86
<PAGE> 160

CAMBRIDGE EYE CLINIC, P. A. --
JOHN W. LAHR, OPTOMETRIST, P.A. AND
EYEGLASS EXPRESS OPTICAL LAB, INC.

COMBINED STATEMENTS OF STOCKHOLDERS' EQUITY

<TABLE>
<CAPTION>
NOTE
NO-PAR ADDITIONAL RECEIVABLE TOTAL
COMMON PAID-IN FROM RETAINED TREASURY STOCKHOLDERS'
STOCK SHARES CAPITAL STOCK SALES EARNINGS STOCK EQUITY
------------ ---------- ----------- -------- -------- -------------
<S> <C> <C> <C> <C> <C> <C>
BALANCE AT JANUARY 1, 1995..... 1,250 $42,389 $(12,850) $201,527 $ -- $231,066
Net income................... -- -- -- 11,846 -- 11,846
----- ------- -------- -------- -------- --------
BALANCE AT DECEMBER 31, 1995... 1,250 42,389 (12,850) 213,373 -- 242,912
Net loss..................... -- -- -- (64,533) -- (64,533)
Payment on note receivable
from stock sales.......... -- -- 12,850 -- -- 12,850
Purchase of treasury stock at
cost...................... -- -- -- -- (27,028) (27,028)
----- ------- -------- -------- -------- --------
BALANCE AT DECEMBER 31, 1996... 1,250 $42,389 $ -- $148,840 $(27,028) $164,201
===== ======= ======== ======== ======== ========
</TABLE>

See accompanying notes.

F-87
<PAGE> 161

CAMBRIDGE EYE CLINIC, P. A. --
JOHN W. LAHR, OPTOMETRIST, P.A. AND
EYEGLASS EXPRESS OPTICAL LAB, INC.

COMBINED STATEMENTS OF CASH FLOWS

<TABLE>
<CAPTION>
ELEVEN-MONTH
YEAR ENDED PERIOD ENDED
DECEMBER 31, NOVEMBER 30,
1995 1996
------------ -------------
<S> <C> <C>
OPERATING ACTIVITIES
Net income (loss)........................................... $ 11,846 $(64,533)
Adjustments to reconcile net income (loss) to net cash
provided by operating activities:
Depreciation.............................................. 60,878 42,458
Loss on disposal of property, equipment and
improvements........................................... -- 2,774
Provision for deferred taxes.............................. 3,715 (53,895)
Changes in assets and liabilities:
Patient accounts receivable, net....................... 16,921 62,163
Other receivables...................................... 10,135 (12,294)
Inventories............................................ (7,968) (2,733)
Prepaid expenses....................................... (11,381) (200)
Other assets........................................... (320) 138
Accounts payable and accrued expenses.................. (28,483) 76,071
-------- --------
Net cash provided by operating activities......... 55,343 49,949
INVESTING ACTIVITIES
Proceeds from collection on notes receivable from stock
sales..................................................... -- 12,850
Proceeds from sale of property, plant and equipment....... -- 2,364
Purchases of property, equipment and improvements......... (42,350) --
-------- --------
Net cash (used in) provided by investing
activities...................................... (42,350) 15,214
FINANCING ACTIVITIES
Proceeds from long-term debt................................ 20,000 21,500
Repayment of long-term debt and demand notes payable........ (62,696) (21,394)
Purchase of treasury stock.................................. -- (27,028)
Proceeds from issuance of note payable to stockholder....... 5,946 --
-------- --------
Net cash used in financing activities............. (36,750) (26,922)
-------- --------
(Decrease) increase in cash................................. (23,757) 38,241
Cash at beginning of period................................. 68,818 45,061
-------- --------
Cash at end of period....................................... $ 45,061 $ 83,302
======== ========
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION
Cash paid during the year for interest...................... $ 21,202 $ 16,931
======== ========
Cash paid during the year for income taxes.................. $ -- $ 6,673
======== ========
</TABLE>

See accompanying notes.

F-88
<PAGE> 162

CAMBRIDGE EYE CLINIC, P. A. --
JOHN W. LAHR, OPTOMETRIST, P.A. AND
EYEGLASS EXPRESS OPTICAL LAB, INC.

NOTES TO COMBINED FINANCIAL STATEMENTS
NOVEMBER 30, 1996

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

NATURE OF OPERATIONS

Cambridge Eye Clinic, P. A. -- John W. Lahr, Optometrist, P.A. (the Clinic)
is a Minnesota corporation which operates professional medical practices,
specializing in general ophthalmology and optometry. The Clinic's service area
is Cambridge, Minnesota, and surrounding communities in North Branch, Mora,
Sandstone and Pine City, Minnesota.

The combined financial statements include the accounts of Cambridge Eye
Clinic, P. A. -- John W. Lahr, Optometrist, P.A. and Eyeglass Express Optical
Lab, Inc., which are companies under common ownership and are collectively
referred to herein as the "Company." All intercompany accounts and transactions
have been eliminated from these combined financial statements.

CASH EQUIVALENTS

The Company considers all liquid investments with an original maturity of
three months or less when purchased to be cash equivalents.

INVENTORIES

PROPERTY, EQUIPMENT AND IMPROVEMENTS

Property, equipment and improvements are carried at cost. Depreciation is
computed using accelerated methods, with the assets' useful lives estimated at
19 years for leasehold improvements and three to seven years for the other asset
categories. Routine maintenance and repairs are charged to expense as incurred,
while costs of betterments and renewals are capitalized.

INCOME TAXES

Income taxes have been provided using the liability method in accordance
with Statement of Financial Accounting Standards No. 109, Accounting for Income
Taxes. Under this method, deferred tax assets and liabilities are determined
based on differences between the financial reporting and tax bases of assets and
liabilities and are measured using the enacted tax rates and laws that will be
in effect when the differences are expected to reverse.

NET PATIENT SERVICE REVENUES

Net patient service revenues are based on established billing rates less
allowances for contractual adjustments for patients covered by Medicare,
Medicaid and various other discount arrangements. Payments received under these
programs and arrangements, which generally are based on predetermined rates, are
generally less than the Company's customary charges, and the differences are
recorded as contractual adjustments at the time the related service is rendered.

For the year ended December 31, 1995 and the eleven-month period ended
November 30, 1996, approximately 35% of the Company's net patient service
revenues were derived from services rendered to Medicare and Medicaid patients.
The Company does not believe that there are any credit risks associated with

F-89
<PAGE> 163

CAMBRIDGE EYE CLINIC, P. A. --
JOHN W. LAHR, OPTOMETRIST, P.A. AND
EYEGLASS EXPRESS OPTICAL LAB, INC.

NOTES TO COMBINED FINANCIAL STATEMENTS -- (CONTINUED)

receivables due from governmental agencies. Concentration of credit risk from
other third-party payors is limited by the number of patients and payors. The
Company does not require any form of collateral from its patients or third-party
payors.

Laws and regulations governing the Medicare and Medicaid programs are
complex and subject to interpretation. The Company believes that it is in
compliance with all applicable laws and regulations and is not aware of any
pending or threatened investigations involving allegations of potential wrong
doing. While no such regulatory inquiries have been made, compliance with such
laws and regulations can be subject to future government review and
interpretation as well as significant regulatory action including fines,
penalties and exclusion from the Medicare and Medicaid programs.

ADVERTISING

The Company expenses advertising costs as incurred. Advertising expenses
amounted to $26,182 for the year ended December 31, 1995 and $21,740 for the
eleven-month period ended November 30, 1996.

USE OF ESTIMATES

The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the amount reported in the financial statements and
accompanying notes. Actual results could differ from those estimates.

FINANCIAL INSTRUMENTS

The carrying amount of cash and cash equivalents reported in the combined
financial statements reflects its fair value because of the short-term nature of
that financial instrument. It is not practicable to estimate the fair value of
the Company's long-term debt because the Company's incremental borrowing rate
cannot reasonably be determined.

2. PROPERTY, EQUIPMENT AND IMPROVEMENTS

Property, equipment and improvements consist of the following:

<TABLE>
<CAPTION>
DECEMBER 31, NOVEMBER 30,
1995 1996
------------ ------------
<S> <C> <C>
Equipment................................................... $ 504,616 $ 504,616
Leasehold improvements...................................... 19,088 19,088
Furniture and fixtures...................................... 102,544 102,544
Vehicles.................................................... 18,051 --
Other....................................................... 15,547 15,547
--------- ---------
659,846 641,795
Less accumulated depreciation............................... (510,328) (539,873)
--------- ---------
$ 149,518 $ 101,922
========= =========
</TABLE>

F-90
<PAGE> 164

CAMBRIDGE EYE CLINIC, P. A. --
JOHN W. LAHR, OPTOMETRIST, P.A. AND
EYEGLASS EXPRESS OPTICAL LAB, INC.

NOTES TO COMBINED FINANCIAL STATEMENTS -- (CONTINUED)

3. LONG-TERM DEBT

Long-term debt consists of the following:

<TABLE>
<CAPTION>
DECEMBER 31, NOVEMBER 30,
1995 1996
------------ ------------
<S> <C> <C>
10% note payable due in 180 monthly installments of $526
principal and interest through January 2000............... $ 20,760 $ 16,705
8% note payable due in 120 monthly installments of $89
principal and interest through July 1996.................. 2,182 --
8.25% note payable due in 173 monthly installments of $1,050
principal and interest through May 2003................... 69,366 62,840
Bank term loan payable due in 102 monthly installments of
$143 principal and interest at 1% over the Wall Street
Journal's prime rate, through September 2, 1996........... 1,501 --
Line of credit secured by the Clinic's receivables,
equipment and inventory, payable in monthly installments.
A final payment of the unpaid principal balance plus
accrued interest is due and payable December 1, 2001. The
interest rate is 2.75% over the Wall Street Journal's
prime rate................................................ 86,466 104,342
-------- --------
180,275 183,887
Less current portion........................................ (24,795) (22,330)
-------- --------
$155,480 $161,557
======== ========
</TABLE>

Maturities under the long-term debt agreements described above are as
follows:

<TABLE>
<CAPTION>
YEAR
- ----
<S> <C>
Month ending December 31, 1996.............................. $ 1,860
Year ending December 31:
1997...................................................... 22,370
1998...................................................... 35,254
1999...................................................... 39,307
2000...................................................... 36,113
2001...................................................... 33,704
Thereafter................................................ 15,279
--------
$183,887
========
</TABLE>

4. LEASE COMMITMENTS

Rent expense relating primarily to operating leases for office space is
classified as building and equipment rent in the accompanying combined
statements of operations.

F-91
<PAGE> 165

CAMBRIDGE EYE CLINIC, P. A. --
JOHN W. LAHR, OPTOMETRIST, P.A. AND
EYEGLASS EXPRESS OPTICAL LAB, INC.

NOTES TO COMBINED FINANCIAL STATEMENTS -- (CONTINUED)

Future minimum lease commitments under noncancelable operating leases (with
an initial or remaining term in excess of one year) at November 30, 1996 are as
follows (including related party leases):

<TABLE>
<S> <C>
Month ending December 31, 1996.............................. $ 3,458
Year ending December 31:
1997...................................................... 41,494
1998...................................................... 41,494
1999...................................................... 41,494
2000...................................................... 41,494
2001...................................................... 41,494
Thereafter................................................ 65,699
--------
Total minimum lease obligations................... $276,627
========
</TABLE>

5. INCOME TAXES

<TABLE>
<CAPTION>
DECEMBER 31, NOVEMBER 30,
1995 1996
------------ ------------
<S> <C> <C>
DEFERRED TAX ASSETS
Noncurrent:
Net operating loss carryforward........................... $ 31,433 $33,237
-------- -------
Total deferred tax assets......................... 31,433 33,237
DEFERRED TAX LIABILITIES
Current:
Accrual to cash........................................... 141,368 89,277
-------- -------
Net deferred tax liabilities...................... $109,935 $56,040
======== =======
</TABLE>

Components of the income tax provision (benefit) consists of the following:

<TABLE>
<CAPTION>
YEAR ENDED ELEVEN-MONTH PERIOD ENDED
DECEMBER 31, 1995 NOVEMBER 30, 1996
--------------------------- -----------------------------
CURRENT DEFERRED TOTAL CURRENT DEFERRED TOTAL
------- -------- ------ ------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
Federal................................... $2,476 $2,835 $5,311 $3,871 $(41,129) $(37,258)
State..................................... 1,793 880 2,673 2,802 (12,766) (9,964)
------ ------ ------ ------ -------- --------
$4,269 $3,715 $7,984 $6,673 $(53,895) $(47,222)
====== ====== ====== ====== ======== ========
</TABLE>

F-92
<PAGE> 166

CAMBRIDGE EYE CLINIC, P. A. --
JOHN W. LAHR, OPTOMETRIST, P.A. AND
EYEGLASS EXPRESS OPTICAL LAB, INC.

NOTES TO COMBINED FINANCIAL STATEMENTS -- (CONTINUED)

Income taxes are different from the amount computed by applying the United
States statutory rate to income before income taxes for the following reasons:

<TABLE>
<CAPTION>
ELEVEN-MONTH
YEAR ENDED PERIOD ENDED
DECEMBER 31 NOVEMBER 30,
1995 1996
------------ ------------
<S> <C> <C>
Income taxes at the statutory rate.......................... $ 6,742 $(36,821)
Permanent differences....................................... 2,532 (6,845)
State taxes, net of federal benefit......................... 1,684 2,459
Benefit of graduated rates.................................. (3,082) (4,815)
Personal service corporation status......................... 108 (1,200)
------- --------
$ 7,984 $(47,222)
======= ========
</TABLE>

SFAS 109 requires a valuation allowance to reduce the deferred tax assets
reported if, based on the weight of the evidence, it is more likely than not
that some portion or all of the deferred tax assets will not be realized. After
consideration of all the evidence, both positive and negative, management has
determined that no valuation allowance at December 31, 1995 and November 30,
1996 is necessary to reduce the deferred tax assets to the amount that will more
likely than not be realized. At November 30, 1996, the Company has available net
operating loss carryforwards of approximately $83,000, which expire in the year
2011.

6. MALPRACTICE INSURANCE

The Company carries claims-made malpractice insurance for each of its
physicians. This insurance provides coverage of $1,000,000 per incident, with a
$2,000,000 aggregate annual limit. In addition, the Company has an umbrella
policy which provides coverage of $1,000,000 per claim, with a $3,000,000
aggregate annual limit. Management is not aware of any reported claims pending
against the Company not covered by its malpractice insurance policy. Losses
resulting from unreported claims cannot be estimated by management and,
therefore, are not included in the accompanying combined financial statements.

7. RETIREMENT PLAN

The Company maintains an employee savings and profit sharing plan under
Section 401(k) of the Internal Revenue Code. The plan covers substantially all
employees. Under the plan, the Company may make discretionary contributions
subject to various limits. Total Company expense related to this plan was
approximately $7,000 for the year ended December 31, 1995 and $10,000 for the
eleven-month period ended November 30, 1996.

8. RELATED PARTY TRANSACTIONS

The Company leases office space from the general stockholder. Rent expense
on these leases amounted to approximately $125,000 for the year ended December
31, 1995 and $114,000 for the eleven-month period ended November 30, 1996.

F-93
<PAGE> 167

CAMBRIDGE EYE CLINIC, P. A. --
JOHN W. LAHR, OPTOMETRIST, P.A. AND
EYEGLASS EXPRESS OPTICAL LAB, INC.

NOTES TO COMBINED FINANCIAL STATEMENTS -- (CONTINUED)

9. SUBSEQUENT EVENT

On December 1, 1996, substantially all assets and liabilities of the
Company were acquired by Vision Twenty-One, Inc. (Vision) in exchange for
approximately 116,000 shares of Vision common stock. In connection therewith,
the Company entered into a 40-year business management agreement with Vision,
whereby Vision will provide substantially all nonmedical services to the
practice.

F-94
<PAGE> 168

REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS

Board of Directors
Optometric Eye Care Centers, P.A.

We have audited the accompanying balance sheets of Optometric Eye Care
Centers, P.A. as of December 31, 1995 and November 30, 1996, and the related
statements of income, stockholders' equity, and cash flows for the year ended
December 31, 1995 and the eleven-month period ended November 30, 1996. These
financial statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial statements based on
our audits.

In our opinion, the financial statements referred to above present fairly,
in all material respects, the financial position of Optometric Eye Care Centers,
P.A. at December 31, 1995 and November 30, 1996, and the results of its
operations and its cash flows for the year ended December 31, 1995 and the
eleven-month period ended November 30, 1996 in conformity with generally
accepted accounting principles.

ERNST & YOUNG LLP

Tampa, Florida
January 17, 1997

F-95
<PAGE> 169

OPTOMETRIC EYE CARE CENTERS, P.A.

BALANCE SHEETS

<TABLE>
<CAPTION>
DECEMBER 31, NOVEMBER 30,
1995 1996
------------ ------------
<S> <C> <C>
ASSETS
Current assets:
Cash...................................................... $ 23,954 $ 19,271
Accounts receivable, net of allowances for uncollectible
accounts of approximately $1,000 at December 31, 1995
and November 30, 1996.................................. 79,508 71,152
Inventories............................................... 82,397 109,106
Deferred tax asset........................................ -- 238
Other current assets...................................... 392 3,300
-------- --------
Total current assets.............................. 186,251 203,067
Deferred tax asset.......................................... 5,020 10,772
Property, equipment and improvements........................ 68,858 37,002
-------- --------
Total assets...................................... $260,129 $250,841
======== ========

LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable and accrued expenses..................... $ 44,376 $ 54,642
Income taxes payable...................................... -- 3,096
Current maturities of obligations under capital leases.... 7,002 3,744
Current maturities of long-term debt...................... 24,196 27,132
-------- --------
Total current liabilities......................... 75,574 88,614
Long-term debt.............................................. 87,262 61,963
Obligations under capital leases............................ 18,644 6,817
Stockholders' equity:
Common stock, $1 par value: 2,500 shares authorized; 1,000
shares issued and outstanding.......................... 1,000 1,000
Retained earnings......................................... 77,649 92,447
-------- --------
Total stockholders' equity........................ 78,649 93,447
-------- --------
Total liabilities and stockholders' equity........ $260,129 $250,841
======== ========
</TABLE>

See accompanying notes.

F-96
<PAGE> 170

OPTOMETRIC EYE CARE CENTERS, P.A.

STATEMENTS OF INCOME

<TABLE>
<CAPTION>
ELEVEN-MONTH
YEAR ENDED PERIOD ENDED
DECEMBER 31, NOVEMBER 30,
1995 1996
------------ ------------
<S> <C> <C>
Revenues:
Net patient service revenues.............................. $ 213,384 $ 242,793
Sale of optical goods..................................... 811,509 820,392
Other..................................................... 7,775 1,780
---------- ----------
Total revenues.................................... 1,032,668 1,064,965
Expenses:
Compensation -- physician stockholders.................... 192,463 218,126
Salaries, wages and benefits.............................. 252,922 247,992
Cost of optical goods sold................................ 333,145 310,367
General and administrative................................ 102,887 139,730
Contract services......................................... 1,766 15,170
Optical and clinical supplies............................. 7,893 10,893
Insurance................................................. 9,945 2,164
Building and equipment rent............................... 56,717 52,361
Depreciation and amortization............................. 43,987 33,111
Interest.................................................. 18,741 15,081
---------- ----------
Total expenses.................................... 1,020,466 1,044,995
---------- ----------
Income before income taxes.................................. 12,202 19,970
Provision for income taxes.................................. 2,815 5,172
---------- ----------
Net income........................................ $ 9,387 $ 14,798
========== ==========
</TABLE>

See accompanying notes.

F-97
<PAGE> 171

OPTOMETRIC EYE CARE CENTERS, P.A.

STATEMENTS OF STOCKHOLDERS' EQUITY

<TABLE>
<CAPTION>
COMMON STOCK TOTAL
--------------- RETAINED STOCKHOLDERS'
NUMBER AMOUNT EARNINGS EQUITY
------ ------ -------- -------------
<S> <C> <C> <C> <C>
BALANCE AT JANUARY 1, 1995............................... 1,000 $1,000 $68,262 $69,262
Net income............................................. -- -- 9,387 9,387
----- ------ ------- -------
BALANCE AT DECEMBER 31, 1995............................. 1,000 $1,000 77,649 78,649
Net income............................................. -- -- 14,798 14,798
----- ------ ------- -------
BALANCE AT NOVEMBER 30, 1996............................. 1,000 $1,000 $92,447 $93,447
===== ====== ======= =======
</TABLE>

See accompanying notes.

F-98
<PAGE> 172

OPTOMETRIC EYE CARE CENTERS, P.A.

STATEMENTS OF CASH FLOWS

<TABLE>
<CAPTION>
ELEVEN-MONTH
YEAR ENDED PERIOD ENDED
DECEMBER 31, NOVEMBER 30,
1995 1996
------------ -------------
<S> <C> <C>
OPERATING ACTIVITIES
Net income.................................................. $ 9,387 $ 14,798
Adjustments to reconcile net income to net cash provided by
operating activities:
Depreciation and amortization............................. 43,987 33,111
Changes in assets and liabilities:
Patient accounts receivable, net....................... (9,766) 8,356
Inventories............................................ (3,928) (26,709)
Other current assets................................... 1,658 (2,908)
Deferred income taxes.................................. (6,891) (5,990)
Accounts payable and accrued expenses.................. 5,435 10,266
Income taxes payable................................... -- 3,096
-------- --------
Net cash provided by operating activities......... 39,882 34,020
INVESTING ACTIVITIES
Purchases of property plant and equipment................... -- (1,255)
-------- --------
Net cash used in investing activities....................... -- (1,255)
FINANCING ACTIVITIES
Repayment of long-term debt................................. (21,351) (22,363)
Repayment of capital lease obligations...................... (6,065) (15,085)
-------- --------
Net cash used in financing activities....................... (27,416) (37,448)
-------- --------
Net increase (decrease) in cash............................. 12,466 (4,683)
Cash at beginning of period................................. 11,488 23,954
-------- --------
Cash at end of period....................................... $ 23,954 $ 19,271
======== ========
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION
Cash paid during the year for interest...................... $ 18,741 $ 15,081
======== ========
Cash paid during the year for income taxes.................. $ 3,900 $ 4,200
======== ========
</TABLE>

See accompanying notes.

F-99
<PAGE> 173

OPTOMETRIC EYE CARE CENTERS, P.A.

NOTES TO FINANCIAL STATEMENTS
NOVEMBER 30, 1996

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

NATURE OF OPERATIONS

Optometric Eye Care Centers, P.A. (the Company), a Minnesota corporation,
operates a professional medical practice, specializing in general optometry. The
Company's service area is Fridley, Minnesota, and the surrounding communities of
Minneapolis, Minnesota.

INVENTORIES

PROPERTY, EQUIPMENT AND IMPROVEMENTS

Property, equipment and improvements consist of the following:

<TABLE>
<CAPTION>
DECEMBER 31, NOVEMBER 30,
1995 1996
------------ ------------
<S> <C> <C>
Medical equipment........................................... $ 137,125 $ 137,551
Leasehold improvements...................................... 94,971 94,971
Office equipment and furniture.............................. 34,795 35,624
--------- ---------
266,891 268,146
Less accumulated depreciation and amortization.............. (198,033) (231,144)
--------- ---------
$ 68,858 $ 37,002
========= =========
</TABLE>

Included in medical equipment as of December 31, 1995 and November 30, 1996
are assets acquired through capital leases with original costs of approximately
$38,000.

ESTIMATED FAIR VALUE OF FINANCIAL INSTRUMENTS

The carrying amount of cash reported in the financial statements reflects
its fair value because of the short-term maturity of this financial instrument.
It is not practicable to estimate the fair value of the Company's long-term debt
and obligations under capital lease because the Company's incremental borrowing
rate cannot reasonably be determined.

PATIENT SERVICE REVENUES

Net patient service revenues are based on establishing billing rates, less
allowances for contractual adjustments for patients covered by Medicare,
Medicaid and various other discount arrangements. Payments received under these
programs and arrangements, which are based on predetermined rates, are generally
less than the Company's established billing rates and the differences are
recorded as contractual adjustments at the time the related service is rendered.

For the year ended December 31, 1995, approximately 6% and 81% of the
Company's gross patient service revenues were derived from Medicare and various
third-party programs, respectively. For the eleven-month period ended November
30, 1996, approximately 5% and 76% of the Company's gross patient service
revenues were derived from Medicare and various third-party programs,
respectively. The Company does not believe that there are any credit risks
associated with receivables due from governmental agencies.

F-100
<PAGE> 174

OPTOMETRIC EYE CARE CENTERS, P.A.

NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)

Concentration of credit risk from other payors is limited by the number of
patients and payors. The Company does not require any form of collateral from
its patients or third-party payors.

INCOME TAXES

USE OF ESTIMATES

The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the amount reported in the financial statements and
accompanying notes. Actual results could differ from those estimates.

2. LONG-TERM DEBT

Long-term debt consists of the following:

<TABLE>
<CAPTION>
DECEMBER 31, NOVEMBER 30,
1995 1996
------------ ------------
<S> <C> <C>
Bank term loan, bearing interest at prime plus 2.5% (11.00%
and 11.25% at December 31, 1995 and November 30, 1996,
respectively), payable in equal monthly installments of
$2,957 (principal and interest) through October 1999...... $111,458 $ 89,095
Less current portion........................................ (24,196) (27,132)
-------- --------
$ 87,262 $ 61,963
======== ========
</TABLE>

As of November 30, 1996, the aggregate amounts of annual principal
maturities of long-term debt are as follows:

<TABLE>
<S> <C>
Month ending December 1996.................................. $ 2,149
Year ending December 31:
1997...................................................... 27,377
1998...................................................... 30,545
1999...................................................... 29,024
-------
$89,095
=======
</TABLE>

F-101
<PAGE> 175

OPTOMETRIC EYE CARE CENTERS, P.A.

NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)

3. LEASE COMMITMENTS

Future minimum lease commitments under noncancelable operating and capital
leases (with an initial or remaining term in excess of one year) at November 30,
1996 are as follows:

<TABLE>
<CAPTION>
OPERATING CAPITAL
LEASES LEASES
--------- -------
<S> <C> <C>
Month ending December 1996.................................. $ 3,256 $ 416
Year ending December 31:
1997...................................................... 31,224 4,990
1998...................................................... 27,330 4,990
1999...................................................... 2,275 2,159
------- -------
Total minimum lease payments...................... $64,085 12,555
=======
Less amount representing interest........................... (1,994)
-------
Present value of minimum lease payments (including current
portion of $4,080)........................................ $10,561
=======
</TABLE>

4. INCOME TAXES

Deferred income taxes reflect the net effects of temporary differences
between the carrying amounts of assets and liabilities for financial reporting
purposes and the amount used for income tax purposes. Significant components of
the Company's deferred tax assets and liabilities are as follows:

<TABLE>
<CAPTION>
ELEVEN-MONTH
YEAR ENDED PERIOD ENDED
DECEMBER 31, NOVEMBER 30,
1995 1996
------------ ------------
<S> <C> <C>
DEFERRED TAX ASSETS
Current:
Allowance for doubtful accounts........................... $ -- $ 238
Noncurrent:
Depreciation expense...................................... 5,020 10,772
------ -------
Total deferred tax assets......................... $5,020 $11,010
====== =======
</TABLE>

Components of the income tax provision (benefit) consist of the following:

<TABLE>
<CAPTION>
ELEVEN-MONTH PERIOD ENDED
YEAR ENDED DECEMBER 31, 1995 NOVEMBER 30, 1996
------------------------------ ---------------------------
CURRENT DEFERRED TOTAL CURRENT DEFERRED TOTAL
-------- --------- ------- ------- -------- ------
<S> <C> <C> <C> <C> <C> <C>
Federal....................... $5,436 $(3,996) $1,440 $ 6,473 $(3,474) $2,999
State......................... 4,270 (2,895) 1,375 4,689 (2,516) 2,173
------ ------- ------ ------- ------- ------
$9,706 $(6,891) $2,815 $11,162 $(5,990) $5,172
====== ======= ====== ======= ======= ======
</TABLE>

F-102
<PAGE> 176

OPTOMETRIC EYE CARE CENTERS, P.A.

NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)

Income taxes are different from the amount computed by applying the United
States statutory rate to income before income taxes for the following reasons:

<TABLE>
<CAPTION>
ELEVEN-MONTH
YEAR ENDED PERIOD ENDED
DECEMBER 31, NOVEMBER 30,
1995 1996
------------ -------------
<S> <C> <C>
Income taxes at the statutory rate........................ $ 4,149 $ 6,790
Permanent differences..................................... 256 1,436
State taxes, net of federal benefit....................... 963 748
Benefit of graduated rates................................ (2,553) (3,802)
------- -------
$ 2,815 $ 5,172
======= =======
</TABLE>

5. MALPRACTICE INSURANCE

The Company carries malpractice insurance for each of its physicians
written on an occurrence basis. This insurance provides coverage of $1 million
per incident, with a $2 million annual limit. In addition, the Company has an
umbrella policy which provides coverage of $3 million per incident, with a $3
million annual limit. Management is not aware of any reported claims pending
against the Company. Losses resulting from unreported claims cannot be estimated
by management and, therefore, are not included in the accompanying financial
statements.

6. RELATED PARTY TRANSACTIONS

The physician stockholders of the Company provide all optometry services
for the Company and their salaries and related benefits are reported as
compensation -- physician stockholders in the accompanying statements of income.
Salaries and benefits of approximately $18,000 and $19,000 for the year ended
December 31, 1995 and the eleven-month period ended November 30, 1996,
respectively, which are paid to a related party, are included in salaries, wages
and benefits in the accompanying statements of income.

7. SUBSEQUENT EVENT

On December 1, 1996, substantially all assets and liabilities of the
Company were acquired by Vision Twenty-One, Inc. (Vision) in exchange for
approximately 94,700 shares of Vision common stock and notes of approximately
$46,800. In connection therewith, the Company entered into a 40-year business
management agreement with Vision, whereby Vision, will provide substantially all
nonmedical services to the practice.

F-103
<PAGE> 177

REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS

The Board of Directors and Stockholder
Jerald B. Turner, M.D., P.A.

We have audited the accompanying balance sheets of Jerald B. Turner, M.D.,
P.A. as of December 31, 1995 and November 30, 1996, and the related statements
of income, stockholder's equity, and cash flows for the year ended December 31,
1995 and the eleven-month period ended November 30, 1996. These financial
statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial statements based on
our audits.

In our opinion, the financial statements referred to above present fairly,
in all material respects, the financial position of Jerald B. Turner, M.D., P.A.
at December 31, 1995 and November 30, 1996, and the results of its operations
and its cash flows for the year ended December 31, 1995 and the eleven-month
period ended November 30, 1996 in conformity with generally accepted accounting
principles.

ERNST & YOUNG LLP
Tampa, Florida
February 26, 1997

F-104
<PAGE> 178

JERALD B. TURNER, M.D., P.A.

BALANCE SHEETS

LIABILITIES AND STOCKHOLDER'S EQUITY
Current liabilities:
Accounts payable and accrued expenses..................... $ 10,072 $ 14,666
Accrued salaries, wages and benefits...................... 59,539 128,192
Note payable to stockholder............................... -- 293,262
-------- --------
Total current liabilities......................... 69,611 436,120
Stockholder's equity:
Common stock, $1 par value: 7,500 shares authorized; 500
shares issued and outstanding.......................... 500 500
Additional paid-in capital................................ 7,822 7,822
Retained earnings......................................... 356,713 477,602
-------- --------
Total stockholder's equity........................ 365,035 485,924
-------- --------
Total liabilities and stockholder's equity........ $434,646 $922,044
======== ========
</TABLE>

See accompanying notes.

F-105
<PAGE> 179

JERALD B. TURNER, M.D., P.A.

STATEMENTS OF INCOME

<TABLE>
<CAPTION>
ELEVEN-MONTH
YEAR ENDED PERIOD ENDED
DECEMBER 31, NOVEMBER 30,
1995 1996
------------ -------------
<S> <C> <C>
Revenues:
Net patient service revenues.............................. $1,262,429 $1,520,911
Sales of optical goods.................................... 13,123 90,407
Other..................................................... 816 2,568
---------- ----------
Total revenues.................................... 1,276,368 1,613,886
Expenses:
Compensation to physician stockholder..................... 526,735 423,641
Salaries, wages and benefits.............................. 414,263 682,687
Cost of optical goods sold................................ 8,439 37,857
Medical supplies.......................................... 20,909 20,824
Optical supplies.......................................... 1,709 6,972
General and administrative................................ 80,054 119,429
Insurance................................................. 11,272 14,415
Building rent............................................. 67,998 61,531
Depreciation.............................................. 67,552 113,577
Repairs and maintenance................................... 9,070 4,269
Interest.................................................. -- 7,795
---------- ----------
Total expenses.................................... 1,208,001 1,492,997
---------- ----------
Net income........................................ $ 68,367 $ 120,889
========== ==========
</TABLE>

See accompanying notes.

F-106
<PAGE> 180

JERALD B. TURNER, M.D., P.A.

STATEMENTS OF STOCKHOLDER'S EQUITY

<TABLE>
<CAPTION>
COMMON STOCK ADDITIONAL TOTAL
--------------- PAID-IN RETAINED STOCKHOLDER'S
SHARES AMOUNT CAPITAL EARNINGS EQUITY
------ ------ ---------- -------- -------------
<S> <C> <C> <C> <C> <C>
BALANCE AT JANUARY 1, 1995...................... 500 $500 $7,822 $288,346 $296,668
Net income.................................... -- -- -- 68,367 68,367
--- ---- ------ -------- --------
BALANCE AT DECEMBER 31, 1995.................... 500 500 7,822 356,713 365,035
Net income.................................... -- -- -- 120,889 120,889
--- ---- ------ -------- --------
BALANCE AT NOVEMBER 30, 1996.................... 500 $500 $7,822 $477,602 $485,924
=== ==== ====== ======== ========
</TABLE>

See accompanying notes.

F-107
<PAGE> 181

JERALD B. TURNER, M.D., P.A.

STATEMENTS OF CASH FLOWS

<TABLE>
<CAPTION>
ELEVEN-MONTH
YEAR ENDED PERIOD ENDED
DECEMBER 31, NOVEMBER 30,
1995 1996
------------ -------------
<S> <C> <C>
OPERATING ACTIVITIES
Net income.................................................. $ 68,367 $120,889
Adjustments to reconcile net income to net cash provided by
operating activities:
Depreciation.............................................. 67,552 113,577
Loss on disposal of property, equipment and
improvements........................................... -- 1,600
Changes in operating assets and liabilities:
Increase in patient accounts receivable, net........... (9,749) (32,641)
Increase in inventories................................ (25,020) (7,114)
Decrease (increase) in prepaid expenses and other
current assets........................................ 4,043 (14,225)
Increase in accounts payable and accrued expenses...... 8,031 4,594
Increase in accrued salaries, wages and benefits....... 8,877 68,653
--------- --------
Net cash provided by operating activities......... 122,101 255,333
INVESTING ACTIVITIES
Purchases of property, equipment and improvements........... (113,451) (16,846)
--------- --------
Net cash used in investing activities....................... (113,451) (16,846)
FINANCING ACTIVITIES
Net cash provided by financing activities................... -- --
--------- --------
Increase in cash............................................ 8,650 238,487
Cash at beginning of period................................. 50,379 59,029
--------- --------
Cash at end of period....................................... $ 59,029 $297,516
========= ========
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION
Cash paid during the year for interest...................... $ -- $ 5,605
========= ========
SUPPLEMENTAL DISCLOSURE OF NONCASH INVESTING ACTIVITY
Note payable incurred to acquire property, equipment and
improvements.............................................. $ -- $293,262
========= ========
</TABLE>

See accompanying notes.

F-108
<PAGE> 182

JERALD B. TURNER, M.D., P.A.

NOTES TO FINANCIAL STATEMENTS
NOVEMBER 30, 1996

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

NATURE OF OPERATIONS

Jerald B. Turner, M.D., P.A., a Florida corporation (the Company), operates
a professional medical practice, specializing in general ophthalmology. The
Company's service area is Clearwater, Florida, and surrounding communities in
Pinellas County, Florida.

INVENTORIES

PROPERTY, EQUIPMENT AND IMPROVEMENTS

Property, equipment and improvements are carried at cost. Depreciation is
computed using straight-line and accelerated methods, with the assets' useful
lives estimated at five to ten years for equipment, furniture and fixtures, and
seven to thirty-nine years for leasehold improvements. Routine maintenance and
repairs are charged to expense as incurred, while costs of betterments and
renewals are capitalized.

NET PATIENT SERVICE REVENUES

Net patient service revenues are based on established billing rates, less
allowances for contractual adjustments for patients covered by Medicare,
Medicaid and various other discount arrangements. Payments received under these
programs and arrangements, which generally are based on predetermined rates, are
generally less than the Company's established billing rates, and the differences
are recorded as contractual adjustments at the time the related service is
rendered.

For the year ended December 31, 1995 and the eleven-month period ended
November 30, 1996, approximately 61% and 64%, respectively, of the Company's net
patient service revenues were derived from third-party payors (Medicare,
Medicaid and managed care contracts). The Company does not believe that there
are any credit risks associated with receivables due from governmental agencies.
Concentration of credit risk from other payors is limited by the number of
patients and payors. The Company does not require any form of collateral from
its patients or third-party payors.

Laws and regulations governing the Medicare and Medicaid programs are
complex and subject to interpretation. The Company believes that it is in
compliance with all applicable laws and regulations and is not aware of any
pending or threatened investigations involving allegations of potential
wrongdoing. While no such regulatory inquiries have been made, compliance with
such laws and regulations can be subject to future government review and
interpretation as well as significant regulatory action including fines,
penalties and exclusion from the Medicare and Medicaid programs.

INCOME TAXES

The Company has elected to have its income taxed as an S Corporation under
the federal Internal Revenue Code. As a result, in lieu of corporate income tax,
the Company's taxable income is passed through to the stockholder of the Company
and taxed at the individual level. Accordingly, no provision or liability for
federal income tax has been reflected in these financial statements.

F-109
<PAGE> 183

JERALD B. TURNER, M.D., P.A.

NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)

FAIR VALUE OF FINANCIAL INSTRUMENTS

The carrying amount for cash reported in the balance sheets approximates
its fair value because of its short-term nature. It is not practicable to
estimate the fair value of the Company's note payable to stockholder due to its
related party nature.

USE OF ESTIMATES

The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the amount reported in the financial statements and
accompanying footnotes. Actual results could differ from those estimates.

2. PROPERTY, EQUIPMENT AND IMPROVEMENTS

Property, equipment and improvements consist of the following:

<TABLE>
<CAPTION>
DECEMBER 31, NOVEMBER 30,
1995 1996
------------ ------------
<S> <C> <C>
Medical equipment.......................................... $ 368,662 $ 567,746
Computer equipment......................................... 66,885 132,494
Furniture and fixtures..................................... 141,177 152,755
Leasehold improvements..................................... 3,800 26,421
--------- ---------
580,524 879,416
Less accumulated depreciation.............................. (385,829) (489,790)
--------- ---------
$ 194,695 $ 389,626
========= =========
</TABLE>

3. OPERATING LEASES

The Company leases office space at $1,148 per month under a short-term
operating lease expiring July 31, 1997 and a month-to-month lease in a space
owned by the physician stockholder for $5,000 per month. Lease agreements
generally provide for the payment of taxes, insurance, utilities and repairs by
the lessee.

4. NOTE PAYABLE TO STOCKHOLDER

On November 15, 1996, the Company entered into an unsecured demand note
agreement for approximately $293,000 at 9% with its principal stockholder,
Jerald B. Turner, M.D. The proceeds were used during the eleven-month period
ended November 30, 1996 to purchase property, equipment and improvements and
interest is payable monthly. Interest expense during the eleven-month period
ended November 30, 1996 amounted to $7,795.

5. MALPRACTICE INSURANCE

The Company carries claims-made medical malpractice insurance for each of
its physicians. This insurance provides coverage of $1,000,000 per incident,
with a $3,000,000 aggregate annual limit. In the normal course of business, the
Company has been named in various medical malpractice lawsuits; however,
management is not aware of any reported claims currently pending against the
Company. Losses from unreported claims cannot be estimated by management and,
therefore, are not included in the accompanying financial statements.

F-110
<PAGE> 184

JERALD B. TURNER, M.D., P.A.

NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)

6. PROFIT SHARING PLAN

The Company maintains an employee profit sharing plan covering
substantially all employees and the physician stockholder. Under the Plan, the
Company may make discretionary contributions subject to various limits. Total
Company expense related to this plan was approximately $53,000 and $64,000 for
the year ended December 31, 1995 and the eleven-month period ended November 30,
1996, respectively. Company contributions to the physician stockholder are
included in compensation to physician stockholder in the accompanying statements
of income.

7. SUBSEQUENT EVENTS

OPERATING LEASE AGREEMENT WITH PHYSICIAN STOCKHOLDER

On December 1, 1996, the Company and the physician stockholder executed a
long-term lease agreement expiring in the year 2001 under which the Company
leases office space in a building owned by the physician stockholder. The lease
agreement provides for the payment of taxes, insurance, utilities and repairs by
the lessee. The Company, at its option, can renew the lease at rental rates
adjusted by the consumer price index.

Future minimum lease payments as of November 30, 1996 are as follows:

<TABLE>
<S> <C>
Month ending December 31, 1996.............................. $ 7,782
Year ending December 31,
1997...................................................... 93,380
1998...................................................... 93,380
1999...................................................... 93,380
2000...................................................... 93,380
2001...................................................... 85,598
Thereafter................................................ --
--------
$466,900
========
</TABLE>

SALE OF ASSETS

On December 1, 1996, substantially all assets and liabilities of the
Company were acquired by Vision Twenty-One, Inc. (Vision) in exchange for
approximately 194,000 shares of Vision common stock and notes of approximately
$231,000. In connection therewith, Jerald B. Turner, M.D., principal
stockholder, entered into a 40-year business management agreement with Vision,
whereby Vision will provide substantially all nonmedical services to the
practice.

F-111
<PAGE> 185

REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS

Board of Directors
Gillette, Beiler & Associates, P.A.

We have audited the accompanying balance sheets of Gillette, Beiler &
Associates, P.A. as of December 31, 1995 and November 30, 1996, and the related
statements of operations, stockholders' deficit, and cash flows for the year
ended December 31, 1995 and the eleven-month period ended November 30, 1996.
These financial statements are the responsibility of the Company's management.
Our responsibility is to express an opinion on these financial statements based
on our audits.

In our opinion, the financial statements referred to above present fairly,
in all material respects, the financial position of Gillette, Beiler &
Associates, P.A. at December 31, 1995 and November 30, 1996, and the results of
its operations and its cash flows for the year ended December 31, 1995 and the
eleven-month period ended November 30, 1996, in conformity with generally
accepted accounting principles.

ERNST & YOUNG LLP

Tampa, Florida
March 22, 1997

F-112
<PAGE> 186

GILLETTE, BEILER & ASSOCIATES, P.A.

BALANCE SHEETS

<TABLE>
<CAPTION>
DECEMBER 31, NOVEMBER 30,
1995 1996
------------ ------------
<S> <C> <C>
ASSETS
Current assets:
Cash..................................................... $ 52,425 $ 16,846
Patient accounts receivable, net of allowance for
doubtful accounts of $14,000 in 1995 and $32,000 in
1996.................................................. 87,602 105,932
Due from related party................................... 27,741 79,722
--------- ---------
Total current assets............................. 167,768 202,500
Property and equipment, net................................ 179,243 187,023
Goodwill................................................... -- 127,574
--------- ---------
Total assets..................................... $ 347,011 $ 517,097
========= =========
LIABILITIES AND STOCKHOLDERS' DEFICIT
Current liabilities:
Accrued compensation..................................... $ 183,147 $ 221,962
Accounts payable and accrued expenses.................... 62,855 32,794
Current portion of loans payable to stockholder.......... 37,094 58,832
Notes payable and current portion of long-term debt...... 180,693 154,413
Due to related parties................................... -- 144,941
--------- ---------
Total current liabilities........................ 463,789 612,942
Loans payable to stockholder, less current portion......... 58,832 --
Long-term debt, less current portion....................... 162,832 93,926
Deferred rent payable...................................... 264,032 263,163
Other long-term liabilities................................ 18,012 14,834
Stockholders' deficit:
Common stock, $.01 par value: 50,000 shares authorized;
37,775 and 40,500 shares issued and outstanding in
1995 and 1996, respectively........................... 378 405
Additional paid-in capital............................... -- 127,547
Accumulated deficit...................................... (620,864) (595,720)
--------- ---------
Total stockholders' deficit...................... (620,486) (467,768)
--------- ---------
Total liabilities and stockholders' deficit...... $ 347,011 $ 517,097
========= =========
</TABLE>

See accompanying notes.

F-113
<PAGE> 187

GILLETTE, BEILER & ASSOCIATES, P.A.

STATEMENTS OF OPERATIONS

<TABLE>
<CAPTION>
ELEVEN-MONTH
YEAR ENDED PERIOD ENDED
DECEMBER 31, NOVEMBER 30,
1995 1996
------------ -------------
<S> <C> <C>
Revenues:
Net patient service revenues.............................. $2,752,187 $3,086,443
Patient service revenue -- related party.................. 298,543 190,376
Other income.............................................. 53,336 --
---------- ----------
Total revenues.................................... 3,104,066 3,276,819
Expenses:
Salaries and benefits -- optometrists..................... 1,832,844 1,856,888
Salaries and benefits -- other............................ 156,712 193,676
Management fees to related party.......................... 423,890 479,004
Advertising............................................... 25,236 16,187
Professional fees......................................... 55,326 12,600
General and administrative................................ 75,345 138,006
Medical supplies.......................................... 27,513 23,924
Insurance................................................. 30,116 50,552
Building and equipment rent............................... 452,695 400,586
Depreciation and amortization............................. 36,880 49,763
Interest.................................................. 41,693 30,489
---------- ----------
Total expenses.................................... 3,158,250 3,251,675
---------- ----------
Net income (loss)................................. $ (54,184) $ 25,144
========== ==========
</TABLE>

See accompanying notes.

F-114
<PAGE> 188

GILLETTE, BEILER & ASSOCIATES, P.A.

STATEMENTS OF STOCKHOLDERS' DEFICIT

<TABLE>
<CAPTION>
COMMON STOCK ADDITIONAL TOTAL
--------------- PAID-IN ACCUMULATED STOCKHOLDERS'
NUMBER AMOUNT CAPITAL DEFICIT DEFICIT
------ ------ ---------- ----------- -------------
<S> <C> <C> <C> <C> <C>
BALANCE, JANUARY 1, 1995..................... 37,775 $378 $ -- $(565,005) $(564,627)
Distributions.............................. -- -- -- (1,675) (1,675)
Net loss................................... -- -- -- (54,184) (54,184)
------ ---- -------- --------- ---------
BALANCE, DECEMBER 31, 1995................... 37,775 378 -- (620,864) (620,486)
Purchase of minority interest.............. 2,725 27 127,547 -- 127,574
Net income................................. -- -- -- 25,144 25,144
------ ---- -------- --------- ---------
BALANCE, NOVEMBER 30, 1996................... 40,500 $405 $127,547 $(595,720) $(467,768)
====== ==== ======== ========= =========
</TABLE>

See accompanying notes.

F-115
<PAGE> 189

GILLETTE, BEILER & ASSOCIATES, P.A.

STATEMENTS OF CASH FLOWS

<TABLE>
<CAPTION>
ELEVEN-MONTH
YEAR ENDED PERIOD ENDED
DECEMBER 31, NOVEMBER 30,
1995 1996
------------ ------------
<S> <C> <C>
OPERATING ACTIVITIES
Net income (loss)........................................... $ (54,184) $ 25,144
Adjustments to reconcile net income (loss) to net cash
provided by operating activities:
Depreciation and amortization............................. 36,880 49,763
Provision for bad debts................................... 14,000 17,573
Amortization of deferred rent and other................... 53,050 (12,817)
(Gain) loss on disposal of fixed assets................... (22,909) --
Changes in assets and liabilities:
Patient accounts receivable............................ (62,436) (35,903)
Due from related party................................. (10,183) (51,981)
Accrued compensation................................... 144,612 38,815
Accounts payable and accrued expenses.................. 20,077 (21,291)
Due to related parties................................. -- 144,941
--------- ---------
Net cash provided by operating activities......... 118,907 154,244
INVESTING ACTIVITIES
Purchases of property and equipment......................... (187,004) (57,543)
Proceeds from disposal of fixed assets...................... 37,909 --
--------- ---------
Net cash used in investing activities............. (149,095) (57,543)
FINANCING ACTIVITIES
Borrowings on revolving credit note......................... -- 196,012
Payments of revolving credit note........................... -- (222,627)
Proceeds from issuance of long-term debt.................... 276,737 13,179
Payments of long-term debt.................................. (167,052) (81,750)
Payments of related party debt.............................. (49,109) (37,094)
--------- ---------
Net cash provided by (used in) financing
activities.................................................. 60,576 (132,280)
--------- ---------
Increase (decrease) in cash................................. 30,388 (35,579)
Cash at beginning of period................................. 22,037 52,425
--------- ---------
Cash at end of period....................................... $ 52,425 $ 16,846
--------- ---------
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION
Cash paid during the period for interest.................... $ 39,000 $ 34,000
========= =========
Goodwill recorded in connection with purchase of minority
interest.................................................. $ -- $ 127,574
========= =========
</TABLE>

See accompanying notes.

F-116
<PAGE> 190

GILLETTE, BEILER & ASSOCIATES, P.A.

NOTES TO FINANCIAL STATEMENTS
NOVEMBER 30, 1996

1. BUSINESS ORGANIZATION AND BASIS OF PRESENTATION

Gillette, Beiler & Associates, P.A., a Florida corporation, operates
professional optometry practices in 11 VisionWorks stores located in the Tampa
Bay area.

The following corporations (the Predecessor Practices) previously operated
as entities under common control:

Drs. Gillette, Beiler & Associates, P.A.
Dr. Gillette & Associates, Tampa, P.A.
Dr. Gillette & Associates, St. Petersburg, P.A.
Dr. Gillette & Associates, Palm Harbor, P.A.
Dr. Gillette & Associates, Sarasota, P.A.
Dr. Gillette & Associates, St. Petersburg East, P.A.
Dr. Gillette & Associates, North Tampa, P.A.
Dr. Gillette & Associates, South Tampa, P.A.
Dr. Gillette & Associates, #6978, P.A.

Effective November 27, 1996, the Predecessor Practices merged with Dr.
Gillette & Associates, #6965, P.A. (the Surviving Practice). On December 31,
1996, the Surviving Practice changed its name to Gillette, Beiler & Associates,
P.A. (the Company). Each outstanding share of the Predecessor Practices was
converted into shares of the Company. This transaction was accounted for as a
reorganization of companies under common control in a manner similar to that
used in a pooling of interests transaction, except for a minority interest which
was recorded under the purchase method. The accompanying financial statements
have been prepared to reflect the accounts of the Company as if the
reorganization had occurred as of the beginning of the earliest period
presented.

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

PROPERTY AND EQUIPMENT

Property and equipment are carried at cost. Depreciation is computed using
the straight-line method, with the assets' useful lives estimated at five to
seven years. Routine maintenance and repairs are charged to expense as incurred,
while costs of betterments and renewals are capitalized.

Property and equipment consist of the following:

<TABLE>
<CAPTION>
DECEMBER 31, NOVEMBER 30,
1995 1996
------------ ------------
<S> <C> <C>
Office furniture and equipment.............................. $ 765,350 $ 822,893
Less accumulated depreciation............................... (586,107) (635,870)
--------- ---------
$ 179,243 $ 187,023
========= =========
</TABLE>

ESTIMATED FAIR VALUE OF FINANCIAL INSTRUMENTS

The carrying amount of cash, accounts receivable and short-term borrowings
reported in the financial statements reflect their fair value because of the
short-term maturity of those financial instruments. It is not practicable to
estimate the fair value of the Company's long-term debt and other noncurrent
liabilities because the Company's incremental borrowing rate cannot reasonably
be determined.

F-117
<PAGE> 191

GILLETTE, BEILER & ASSOCIATES, P.A.

NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)

NET PATIENT SERVICE REVENUES

Net patient service revenues are based on established billing rates, less
allowances and contractual adjustments for patients covered by Medicare,
Medicaid and various other discount arrangements. Payments received under these
programs and arrangements, which are based on predetermined rates, are generally
less than the Company's established billing rates and the differences are
recorded as contractual adjustments at the time the related service is rendered.

For the year ended December 31, 1995 and the eleven-month period ended
November 30, 1996, patient service revenue -- related party was earned through
contractual arrangements between the Company and an association under common
control.

The Company does not believe that there are any credit risks associated
with receivables due from governmental agencies. Concentration of credit risk
from other payors is limited by the number of patients and payors. The Company
does not require any form of collateral from its patients or third-party payors.

ADVERTISING COSTS

The Company expenses advertising costs as incurred.

INCOME TAXES

The Company has elected to have its income taxed as an S corporation under
the federal Internal Revenue Code. As a result, in lieu of corporate income tax,
the Company's taxable income is passed through to the stockholders of the
Company and taxed at the individual level. Accordingly, no provision or
liability for federal income tax has been reflected in the financial statements.

USE OF ESTIMATES

The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the amount reported in the financial statements and
accompanying notes. Actual results could differ from those estimates.

INTANGIBLE ASSETS

Goodwill is being amortized over its estimated useful life of 40 years.

F-118
<PAGE> 192

GILLETTE, BEILER & ASSOCIATES, P.A.

NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)

3. NOTES PAYABLE AND LONG-TERM DEBT

Notes payable and long-term debt and consist of the following:

<TABLE>
<CAPTION>
DECEMBER 31, NOVEMBER 30,
1995 1996
------------ ------------
<S> <C> <C>
Notes payable under $100,000 line of credit, due on demand.
Interest due monthly at prime plus 1% (9.5% at December
31, 1995 and 9.25% at November 30, 1996). The note is
collateralized by accounts receivable..................... $ 94,475 $ 67,860
Bank term loans due in monthly installments of $663
(principal and interest) through 2000. The loans bear
interest at 12.5% and 14% and are collateralized by
certain equipment. The loans were refinanced with a bank
in 1997 and will be due on demand......................... 28,066 23,907
Notes payable to a corporation due in monthly installments
of $7,218 (principal and interest) through 2000. The notes
bear interest ranging from the prime rate plus .5% to the
prime rate plus 2% (8.75% to 10.25% at November 30, 1996)
and are collateralized by certain equipment............... 220,984 156,572
-------- ---------
343,525 248,339
Less current portion........................................ (180,693) (154,413)
-------- ---------
$162,832 $ 93,926
======== =========
</TABLE>

As of November 30, 1996, maturity of long-term debt is as follows:

<TABLE>
<S> <C>
Month ending December 31, 1996.............................. $ 74,463
Year ending December 31:
1997...................................................... 79,950
1998...................................................... 41,411
1999...................................................... 41,906
2000...................................................... 10,609
--------
$248,339
========
</TABLE>

F-119
<PAGE> 193

GILLETTE, BEILER & ASSOCIATES, P.A.

NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)

4. LOANS PAYABLE TO STOCKHOLDER

Loans payable to stockholder consist of the following:

<TABLE>
<CAPTION>
DECEMBER 31, NOVEMBER 30,
1995 1996
------------ ------------
<S> <C> <C>
Note payable to the majority stockholder of the Company due
in monthly installments of $2,005 (principal and
interest) through 1999. The note bears interest at 9.75%
and is collateralized by certain equipment. The note was
refinanced with a bank in 1997........................... $ 75,093 $ 58,832
Unsecured note payable to the majority stockholder of the
Company due in monthly principal installments of $2,083
through 1996, plus interest at the rate of prime plus 1%.
The note was fully paid in 1996.......................... 18,750 --
Note payable to the majority stockholder of the Company due
in monthly principal installments of $694 through 1996
plus interest at the rate of prime plus 2%. The note was
collateralized by certain equipment, and was fully paid
in 1996.................................................. 2,083 --
-------- --------
95,926 58,832
Less current portion....................................... (37,094) (58,832)
-------- --------
$ 58,832 $ --
======== ========
</TABLE>

5. LEASE COMMITMENTS

Future minimum lease commitments under noncancelable operating leases (with
an initial or remaining term in excess of one year) at November 30, 1996 are as
follows:

<TABLE>
<S> <C>
Month ending December 31, 1996.............................. $ 38,217
Year ending December 31,
1997...................................................... 458,604
1998...................................................... 465,604
1999...................................................... 470,604
2000...................................................... 477,604
2001...................................................... 482,604
Thereafter................................................ 2,393,117
----------
$4,786,354
==========
</TABLE>

6. MALPRACTICE INSURANCE

The Company carries claims-made malpractice insurance for each of its
optometrists. This insurance provides coverage of $1 million per incident, with
a $3 million annual limit.

Management is aware of a claim pending against the Company. The claim,
which alleges medical malpractice, and which relates to an incident which
occurred prior to December 1, 1996, is currently in the discovery stage and no
trial date has been set. The Company has determined that its insurer is liable
for any damages resulting from the claim which are within the Company's policy
limits, as well as the costs to defend the Company against the claim. The
insurer is currently providing the defense for the claim. In the opinion of
management, the ultimate result of this matter will not have a material adverse
effect on the results of operations, financial condition or liquidity of the
Company.

Losses resulting from unreported claims cannot be estimated by management
and, therefore, are not included in the accompanying financial statements.

F-120
<PAGE> 194

GILLETTE, BEILER & ASSOCIATES, P.A.

NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)

7. SUBSEQUENT EVENT

On December 1, 1996, substantially all assets and liabilities of the
Company were acquired by Vision Twenty-One, Inc. (a related company -- Vision)
in exchange for 560,957 shares of Vision common stock and notes of $416,103. In
connection with this transaction, the Company entered into a 40-year business
management agreement with Vision, whereby Vision will provide substantially all
nonmedical services to the practice.

F-121
<PAGE> 195

REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS

Board of Directors
J & R Kennedy, O.D., P.A.
and Roseville Opticians, Inc.

We have audited the accompanying combined balance sheets of J & R Kennedy,
O.D., P.A. and Roseville Opticians, Inc. as of December 31, 1995 and November
30, 1996, and the related combined statements of income, stockholder's equity,
and cash flows for the year ended December 31, 1995 and the eleven-month period
ended November 30, 1996. These financial statements are the responsibility of
the Company's management. Our responsibility is to express an opinion on these
financial statements based on our audits.

In our opinion, the financial statements referred to above present fairly,
in all material respects, the combined financial position of J & R Kennedy,
O.D., P.A. and Roseville Opticians, Inc. at December 31, 1995 and November 30,
1996, and the combined results of their operations and their cash flows for the
year ended December 31, 1995 and the eleven-month period ended November 30, 1996
in conformity with generally accepted accounting principles.

ERNST & YOUNG LLP

Tampa, Florida
March 21, 1997

F-122
<PAGE> 196

J & R KENNEDY, O.D., P.A. AND
ROSEVILLE OPTICIANS, INC.

COMBINED BALANCE SHEETS

<TABLE>
<CAPTION>
DECEMBER 31, NOVEMBER 30,
1995 1996
------------ ------------
<S> <C> <C>
ASSETS
Current assets:
Cash...................................................... $ 25 $ 4,761
Patient accounts receivable............................... 71,488 77,529
Due from stockholder...................................... 1,623 2,779
Inventories............................................... 104,787 107,827
Prepaid expenses and other current assets................. 7,646 5,972
-------- --------
Total current assets.............................. 185,569 198,868
Property, equipment and improvements, net................... 75,238 76,848
Noncurrent deferred tax asset............................... -- 8,309
-------- --------
Total assets...................................... $260,807 $284,025
======== ========

LIABILITIES AND STOCKHOLDER'S EQUITY
Current liabilities:
Bank overdraft............................................ $ 30,980 $ 3,547
Accounts payable and accrued expenses..................... 67,374 88,606
Taxes payable............................................. 6,993 17,006
Current deferred tax liability............................ 14,130 14,076
Current maturities of long-term debt...................... 5,271 5,751
-------- --------
Total current liabilities......................... 124,748 128,986
Long-term debt.............................................. 14,946 9,709
Noncurrent deferred tax liability........................... 322 --
Stockholder's equity:
Common stock, $1 par value: 75,000 shares authorized;
1,010 shares issued and outstanding.................... 1,010 1,010
Retained earnings......................................... 119,781 144,320
-------- --------
Total stockholder's equity........................ 120,791 145,330
-------- --------
Total liabilities and stockholder's equity........ $260,807 $284,025
======== ========
</TABLE>

See accompanying notes.

F-123
<PAGE> 197

J & R KENNEDY, O.D., P.A. AND
ROSEVILLE OPTICIANS, INC.

COMBINED STATEMENTS OF INCOME

<TABLE>
<CAPTION>
ELEVEN-MONTH
YEAR ENDED PERIOD ENDED
DECEMBER 31, NOVEMBER 30,
1995 1996
------------ -------------
<S> <C> <C>
Revenue:
Net patient service revenues.............................. $296,386 $324,416
Sale of optical goods..................................... 671,309 663,095
Other..................................................... 170 74
-------- --------
Total revenue..................................... 967,865 987,585
Expenses:
Compensation to physician stockholder..................... 231,838 221,875
Salaries, wages and benefits.............................. 267,728 314,686
Cost of optical goods sold................................ 233,276 234,154
General and administrative................................ 130,904 118,589
Insurance................................................. 6,345 4,114
Building and equipment rent............................... 52,259 48,066
Depreciation and amortization............................. 10,585 12,302
Interest.................................................. 1,319 939
-------- --------
Total expenses.................................... 934,254 954,725
-------- --------
Income before income taxes.................................. 33,611 32,860
Provision for income taxes.................................. 14,856 8,321
-------- --------
Net income.................................................. $ 18,755 $ 24,539
======== ========
</TABLE>

See accompanying notes.

F-124
<PAGE> 198

J & R KENNEDY, O.D., P.A.
AND ROSEVILLE OPTICIANS, INC.

COMBINED STATEMENTS OF STOCKHOLDER'S EQUITY

<TABLE>
<CAPTION>
COMMON STOCK TOTAL
--------------- RETAINED STOCKHOLDERS'
SHARES AMOUNT EARNINGS EQUITY
------ ------ -------- -------------
<S> <C> <C> <C> <C>
BALANCE AT JANUARY 1, 1995............................... 1,010 $1,010 $101,026 $102,036
Net income............................................. -- -- 18,755 18,755
----- ------ -------- --------
BALANCE AT DECEMBER 31, 1995............................. 1,010 1,010 119,781 120,791
Net income............................................. -- -- 24,539 24,539
----- ------ -------- --------
BALANCE AT NOVEMBER 30, 1996............................. 1,010 $1,010 $144,320 $145,330
===== ====== ======== ========
</TABLE>

See accompanying notes.

F-125
<PAGE> 199

J & R KENNEDY, O.D., P.A. AND
ROSEVILLE OPTICIANS, INC.

COMBINED STATEMENTS OF CASH FLOWS

<TABLE>
<CAPTION>
ELEVEN-MONTH
YEAR ENDED PERIOD ENDED
DECEMBER 31, NOVEMBER 30,
1995 1996
------------ -------------
<S> <C> <C>
OPERATING ACTIVITIES
Net income.................................................. $ 18,755 $ 24,539
Adjustments to reconcile net income to net cash provided by
operating activities:
Depreciation and amortization............................. 10,585 12,302
Deferred income taxes..................................... 7,863 (8,685)
Changes in assets and liabilities:
Patient accounts receivable............................ (16,354) (6,041)
Due from stockholder................................... (1,623) (1,156)
Inventories............................................ (24,425) (3,040)
Prepaid expenses and other current assets.............. (4,899) 1,674
Bank overdraft and accounts payable and accrued
expenses.............................................. 30,319 (6,201)
Taxes payable.......................................... 6,993 10,013
-------- --------
Net cash provided by operating activities......... 27,214 23,405
INVESTING ACTIVITIES
Purchases of property and equipment......................... (47,456) (13,912)
-------- --------
Net cash used in investing activities............. (47,456) (13,912)
FINANCING ACTIVITIES
Borrowings from third parties............................... 23,000 -
Repayment of borrowings from third parties.................. (2,783) (4,757)
-------- --------
Net cash provided by (used in) financing
activities...................................... 20,217 (4,757)
-------- --------
(Decrease) increase in cash................................. (25) 4,736
Cash at beginning of year................................... 50 25
-------- --------
Cash at end of year......................................... $ 25 $ 4,761
======== ========
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION
Cash paid during the period for interest.................... $ 1,300 $ 1,000
======== ========
</TABLE>

See accompanying notes.

F-126
<PAGE> 200

J & R KENNEDY, O.D., P.A. AND
ROSEVILLE OPTICIANS, INC.

NOTES TO COMBINED FINANCIAL STATEMENTS
NOVEMBER 30, 1996

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

NATURE OF OPERATIONS

J & R Kennedy, O.D., P.A. and Roseville Opticians, Inc. (the Company),
commonly controlled Minnesota C corporations, operate as a professional medical
practice, specializing in general optometry and as an optical retail dispensary,
respectively. The Company's primary service area is Roseville, Minnesota, and
surrounding communities in Ramsey County, Minnesota.

INVENTORIES

Inventories consist primarily of optical lenses, contact lenses and
eyeglass frames (collectively, optical goods). Inventories are stated at the
lower of cost or market, with cost determined on an average cost basis.

PROPERTY, EQUIPMENT AND IMPROVEMENTS

Property, equipment and improvements are carried at cost. Depreciation is
computed using straight-line and accelerated methods, with the assets' useful
lives estimated at 5 to 10 years for equipment, furniture and fixtures and
automobiles, and 31 years for leasehold improvements. Routine maintenance and
repairs are charged to expense as incurred, while costs of betterments and
renewals are capitalized.

ESTIMATED FAIR VALUE OF FINANCIAL INSTRUMENTS

The carrying value of cash reflects its fair value because of the
short-term maturity of that financial instrument. It is not practicable to
estimate the fair value of the Company's long-term debt because the Company's
incremental borrowing rate cannot reasonably be determined.

NET PATIENT SERVICE REVENUES

Net patient service revenues are based on established billing rates, less
allowances for contractual adjustments for patients covered by Medicare,
Medicaid and various other discount arrangements. Payments received under these
programs and arrangements, which are based on predetermined rates, are generally
less than the Company's established billing rates, and the differences are
recorded as contractual adjustments at the time the related service is rendered.

For the year ended December 31, 1995 and the eleven-month period ended
November 30, 1996, approximately 19% and 24%, respectively, of the Company's net
patient service revenues were derived from third-party payors (Medicare,
Medicaid, and managed care contracts). The Company does not believe that there
are any credit risks associated with receivables due from governmental agencies.
Concentration of credit risk from other payers is limited by the number of
patients and payors. The Company does not require any form of collateral from
its patients or third-party payors.

Laws and regulations governing the Medicare and Medicaid programs are
complex and subject to interpretation. The Company believes that it is in
compliance with all applicable laws and regulations and is not aware of any
pending or threatened investigations involving allegations of potential wrong
doing. While no such regulatory inquiries have been made, compliance with such
laws and regulations can be subject to future government review and
interpretation as well as significant regulatory action including fines,
penalties and exclusion from the Medicare and Medicaid programs.

F-127
<PAGE> 201

J & R KENNEDY, O.D., P.A. AND
ROSEVILLE OPTICIANS, INC.

NOTES TO COMBINED FINANCIAL STATEMENTS -- (CONTINUED)

INCOME TAXES

USE OF ESTIMATES

2. RELATED PARTY TRANSACTIONS

The Company paid approximately $6,000 for the year ended December 31, 1995
and $7,000 for the eleven-month period ended November 30, 1996 for services
rendered to the Company by a related organization with certain common ownership.

The Company has an amount due from stockholder of $1,623 at December 31,
1995 and $2,779 at November 30, 1996. Such amounts relate to personal expenses
paid by the Company on behalf of the stockholder.

3. PROPERTY, EQUIPMENT AND IMPROVEMENTS

Property, equipment and improvements consist of the following:

<TABLE>
<CAPTION>
DECEMBER 31, NOVEMBER 30,
1995 1996
------------ ------------
<S> <C> <C>
Equipment................................................... $ 191,111 $ 205,023
Furniture and fixtures...................................... 47,183 47,183
Automobiles................................................. 16,752 16,752
Leasehold improvements...................................... 18,690 18,690
--------- ---------
273,736 287,648
Less accumulated depreciation............................... (198,498) (210,800)
--------- ---------
$ 75,238 $ 76,848
========= =========
</TABLE>

4. LONG-TERM DEBT

Long-term debt consists of the following:

<TABLE>
<CAPTION>
DECEMBER 31, NOVEMBER 30,
1995 1996
------------ ------------
<S> <C> <C>
Note payable to bank at 10% with monthly payments of $586,
including interest, due May 1999.......................... $20,217 $15,460
Less current portion........................................ (5,271) (5,751)
------- -------
$14,946 $ 9,709
======= =======
</TABLE>

F-128
<PAGE> 202

J & R KENNEDY, O.D., P.A. AND
ROSEVILLE OPTICIANS, INC.

NOTES TO COMBINED FINANCIAL STATEMENTS -- (CONTINUED)

As of November 30, 1996, the aggregate amounts of annual principal
maturities of long-term debt are as follows:

<TABLE>
<S> <C>
Month ending December 31, 1996.............................. $ 458
Year ending December 31:
1997...................................................... 5,800
1998...................................................... 6,407
1999...................................................... 2,795
-------
$15,460
=======
</TABLE>

5. INCOME TAXES

<TABLE>
<CAPTION>
DECEMBER 31, NOVEMBER 30,
1995 1996
------------ ------------
<S> <C> <C>
DEFERRED TAX ASSETS
Noncurrent:
Charitable contribution................................... $ 426 $ 446
Net operating loss carryforward........................... 5,127 14,890
-------- -------
5,553 15,336
Valuation allowance......................................... -- (1,152)
-------- -------
Total deferred tax assets......................... 5,553 14,184
DEFERRED TAX LIABILITIES
Current:
Accrual to cash........................................... 14,130 14,076
Noncurrent:
Depreciation.............................................. 5,875 5,875
-------- -------
Total deferred tax liabilities.................... 20,005 19,951
-------- -------
Net deferred tax liabilities...................... $(14,452) $(5,767)
======== =======
</TABLE>

Components of the income tax provision (benefit) consists of the following:

<TABLE>
<CAPTION>
YEAR ENDED ELEVEN-MONTH PERIOD ENDED
DECEMBER 31, 1995 NOVEMBER 30, 1996
---------------------------- ---------------------------
CURRENT DEFERRED TOTAL CURRENT DEFERRED TOTAL
------- -------- ------- ------- -------- ------
<S> <C> <C> <C> <C> <C> <C>
Federal............................ $5,337 $5,987 $11,324 $12,978 $(6,579) $6,399
State.............................. 1,656 1,876 3,532 4,028 (2,106) 1,922
------ ------ ------- ------- ------- ------
$6,993 $7,863 $14,856 $17,006 $(8,685) $8,321
====== ====== ======= ======= ======= ======
</TABLE>

F-129
<PAGE> 203

J & R KENNEDY, O.D., P.A. AND
ROSEVILLE OPTICIANS, INC.

NOTES TO COMBINED FINANCIAL STATEMENTS -- (CONTINUED)

Income taxes are different from the amount computed by applying the United
States statutory rate to income before income taxes for the following reasons:

<TABLE>
<CAPTION>
ELEVEN-MONTH
YEAR ENDED PERIOD ENDED
DECEMBER 31, NOVEMBER 30,
1995 1996
------------ ------------
<S> <C> <C>
Income taxes at the statutory rate.......................... $11,834 $5,301
Permanent differences....................................... 421 413
State taxes, net of federal benefit......................... 2,332 1,087
Change in valuation allowance............................... - 1,152
Personal service corporation status......................... 269 368
------- ------
$14,856 $8,321
======= ======
</TABLE>

Statement of Financial Accounting Standards No. 109, Accounting for Income
Taxes, requires a valuation allowance to reduce the deferred tax assets reported
if, based on the weight of the evidence, it is more likely than not that some
portion or all of the deferred tax assets will not be realized. After
consideration of all the evidence, both positive and negative, management has
determined that a $1,152 valuation allowance at November 30, 1996 is necessary
to reduce the deferred tax assets to the amount that will more likely than not
be realized. The change in the valuation allowance for the current year is
$1,152. At December 31, 1995 and November 30, 1996, the Company has available
net operating loss carryforwards of approximately $13,000 and $37,000,
respectively, which expire in the year 2011.

6. MALPRACTICE INSURANCE

The Company carries claims-made malpractice insurance for each of its
physicians. This insurance provides coverage of $1,000,000 per incident, with a
$2,000,000 annual limit. In addition, the Company has an umbrella policy which
provides coverage of $2,000,000 per claim, with a $2,000,000 annual limit.
Management is not aware of any reported claims pending against the Company.
Losses resulting from unreported claims cannot be estimated by management and,
therefore, are not included in the accompanying combined financial statements.

7. RETIREMENT PLAN

The Company maintains an employee savings and profit sharing plan under
Section 401(k) of the Internal Revenue Code. The plan covers substantially all
employees. Under the plan, the Company may make discretionary contributions
subject to various limits. Total Company expense related to this plan was
approximately $2,000 and $4,000 for the year ended December 31, 1995 and the
eleven-month period ended November 30, 1996, respectively.

8. SUBSEQUENT EVENTS

On December 1, 1996 and December 20, 1996, the Company renewed
noncancelable operating leases for office space. The effective date of the
leases is December 1, 1996 and they are scheduled to terminate on

F-130
<PAGE> 204

J & R KENNEDY, O.D., P.A. AND
ROSEVILLE OPTICIANS, INC.

NOTES TO COMBINED FINANCIAL STATEMENTS -- (CONTINUED)

November 30, 2001. The former operating leases had expired as of November 30,
1996. Approximate future minimum rental commitments under the noncancelable
operating leases are as follows:

<TABLE>
<S> <C>
Month ending December 31, 1996.............................. $ 4,488
Year ending December 31:
1997...................................................... 55,194
1998...................................................... 56,883
1999...................................................... 58,626
2000...................................................... 60,418
2001...................................................... 56,932
--------
$292,641
========
</TABLE>

On December 1, 1996, substantially all assets and liabilities of the
Company were acquired by Vision Twenty-One, Inc. (Vision) in exchange for
approximately 115,000 shares of Vision common stock and notes of approximately
$79,000. In connection therewith, the Company entered into a 40-year business
management agreement with Vision, whereby Vision will provide substantially all
nonmedical services to the practice.

The combined financial statements of the Company have been prepared as
supplemental information about the association to which Vision will provide
management services following consummation of the acquisition. The Company
previously operated as a separate independent association. The historical
combined financial position, results of operations and cash flows do not reflect
any adjustments relating to the acquisition.

F-131
<PAGE> 205

REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS

Board of Directors
Dr. Smith and Associates, P.A. #6950,
Dr. Smith and Associates, P.A. #6958, and
Dr. Smith and Associates, P.A. #6966

We have audited the accompanying combined balance sheets of Dr. Smith and
Associates, P.A. #6950, Dr. Smith and Associates, P.A. #6958, and Dr. Smith and
Associates, P.A. #6966 (the Company) as of December 31, 1995 and November 30,
1996, and the related combined statements of income, stockholders' equity, and
cash flows for the year ended December 31, 1995 and the eleven-month period
ended November 30, 1996. These financial statements are the responsibility of
the Company's management. Our responsibility is to express an opinion on these
financial statements based on our audits.

In our opinion, the financial statements referred to above present fairly,
in all material respects, the combined financial position of Dr. Smith and
Associates, P.A. #6950, Dr. Smith and Associates, P.A. #6958, and Dr. Smith and
Associates, P.A. #6966 at December 31, 1995 and November 30, 1996, and the
combined results of their operations and their cash flows for the year ended
December 31, 1995 and the eleven-month period ended November 30, 1996 in
conformity with generally accepted accounting principles.

ERNST & YOUNG LLP

Tampa, Florida
January 17, 1997

F-132
<PAGE> 206

DR. SMITH AND ASSOCIATES, P.A. #6950,
DR. SMITH AND ASSOCIATES, P.A. #6958, AND
DR. SMITH AND ASSOCIATES, P.A. #6966

COMBINED BALANCE SHEETS

LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable.......................................... $ 19,750 $ 28,200
Accrued expenses and other current liabilities............ 57,570 68,514
Amounts due under line of credit.......................... -- 14,000
Due to affiliate.......................................... 12,705 39,591
Income tax payable........................................ 1,182 --
Current portion of long-term debt......................... 38,917 39,931
Current portion of obligations under capital leases....... 26,220 25,428
-------- --------
Total current liabilities......................... 156,344 215,664
Long-term debt.............................................. 52,130 15,442
Obligations under capital leases............................ 48,717 25,469
Stockholders' equity:
Common stock, $.01 par value; 30,000 shares authorized,
and 3,000 shares issued and outstanding................ 30 30
Additional paid-in capital................................ 8,180 8,180
Retained earnings......................................... 124,869 130,109
-------- --------
Total stockholders' equity........................ 133,079 138,319
-------- --------
Total liabilities and stockholders' equity........ $390,270 $394,894
======== ========
</TABLE>

See accompanying notes.

F-133
<PAGE> 207

DR. SMITH AND ASSOCIATES, P.A. #6950,
DR. SMITH AND ASSOCIATES, P.A. #6958, AND
DR. SMITH AND ASSOCIATES, P.A. #6966

COMBINED STATEMENTS OF INCOME

<TABLE>
<CAPTION>
ELEVEN-MONTH
YEAR ENDED PERIOD ENDED
DECEMBER 31, NOVEMBER 30,
1995 1996
------------ -------------
<S> <C> <C>
Revenues:
Net patient service revenues.............................. $1,019,159 $ 990,014
Other..................................................... 18,248 14,137
---------- ----------
Total revenues.................................... 1,037,407 1,004,151
Expenses:
Compensation to physician stockholder..................... 75,000 70,000
Salaries, wages and benefits.............................. 511,033 547,622
General and administrative................................ 169,513 164,967
Medical supplies.......................................... 6,524 5,269
Building and equipment rent............................... 83,600 100,477
Depreciation and amortization............................. 35,038 35,442
Interest.................................................. 24,169 14,478
---------- ----------
Total expenses.................................... 904,877 938,255
---------- ----------
Income before income taxes.................................. 132,530 65,896
Provision for income taxes.................................. 1,182 --
---------- ----------
Net income........................................ $ 131,348 $ 65,896
========== ==========
</TABLE>

See accompanying notes.

F-134
<PAGE> 208

DR. SMITH AND ASSOCIATES, P.A. #6950,
DR. SMITH AND ASSOCIATES, P.A. #6958, AND
DR. SMITH AND ASSOCIATES, P.A. #6966

COMBINED STATEMENTS OF STOCKHOLDERS' EQUITY

<TABLE>
<CAPTION>
COMMON STOCK ADDITIONAL TOTAL
--------------- PAID-IN RETAINED STOCKHOLDERS'
NUMBER AMOUNT CAPITAL EARNINGS EQUITY
------ ------ ---------- -------- -------------
<S> <C> <C> <C> <C> <C>
BALANCE, JANUARY 1, 1995....................... 3,000 $30 $8,180 $ 28,006 $ 36,216
Net income................................... -- -- -- 131,348 131,348
Distributions................................ -- -- -- (34,485) (34,485)
----- --- ------ -------- --------
BALANCE, DECEMBER 31, 1995..................... 3,000 30 8,180 124,869 133,079
Net income................................... -- -- -- 65,896 65,896
Distributions................................ -- -- -- (60,656) (60,656)
----- --- ------ -------- --------
BALANCE, NOVEMBER 30, 1996..................... 3,000 $30 $8,180 $130,109 $138,319
===== === ====== ======== ========
</TABLE>

See accompanying notes.

F-135
<PAGE> 209

DR. SMITH AND ASSOCIATES, P.A. #6950,
DR. SMITH AND ASSOCIATES, P.A. #6958, AND
DR. SMITH AND ASSOCIATES, P.A. #6966

COMBINED STATEMENTS OF CASH FLOWS

<TABLE>
<CAPTION>
ELEVEN-MONTH
YEAR ENDED PERIOD ENDED
DECEMBER 31, NOVEMBER 30,
1995 1996
------------ -------------
<S> <C> <C>
OPERATING ACTIVITIES
Net income.................................................. $131,348 $ 65,896
Adjustments to reconcile net income to net cash provided by
operating activities:
Depreciation and amortization............................. 35,038 35,442
Changes in operating assets and liabilities:
Patient accounts receivable, net....................... (4,178) 15,334
Prepaid expenses....................................... -- (699)
Due from stockholder................................... (62,718) (42,219)
Accounts payable....................................... 15,036 8,450
Accrued expenses and other current liabilities......... 39,320 10,944
Due to affiliate....................................... (24,203) 26,886
Income tax payable..................................... 1,182 (1,182)
-------- ---------
Net cash provided by operating activities......... 130,825 118,852
INVESTING ACTIVITIES
Purchases of property, plant and equipment.................. (53,736) (4,027)
Other....................................................... 11,318 --
-------- ---------
Net cash used in investing activities............. (42,418) (4,027)
FINANCING ACTIVITIES
Borrowings on line of credit................................ -- 14,000
Distributions to shareholders............................... (34,485) (60,656)
Payment of capital lease obligations........................ (28,999) (24,040)
Payment of long-term debt................................... -- (35,674)
-------- ---------
Net cash used in financing activities............. (63,484) (106,370)
-------- ---------
Net increase in cash and cash equivalents................... 24,923 8,455
Cash and cash equivalents at beginning of period............ (1,385) 23,538
-------- ---------
Cash and cash equivalents at end of period........ $ 23,538 $ 31,993
======== =========
</TABLE>

See accompanying notes.

F-136
<PAGE> 210

DR. SMITH AND ASSOCIATES, P.A. #6950,
DR. SMITH AND ASSOCIATES, P.A. #6958, AND
DR. SMITH AND ASSOCIATES, P.A. #6966

NOTES TO COMBINED FINANCIAL STATEMENTS
NOVEMBER 30, 1996

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

NATURE OF OPERATIONS AND BASIS OF PRESENTATION

Dr. Smith and Associates, P.A. #6950 (P.A. #6950), a C corporation, Dr.
Smith and Associates, P.A. #6958 (P.A. #6958), an S corporation, and Dr. Smith
and Associates, P.A. #6966 (P.A. #6966), an S corporation, operate under common
ownership as a professional medical practice, specializing in general optometry.
These corporations are located in the Miami, Florida, area and are hereinafter
collectively referred to as the Company. All significant intercompany
transactions have been eliminated.

PROPERTY AND EQUIPMENT

Property and equipment are carried at cost. Property and equipment under
capital leases are stated at the net present value of the future minimum lease
payments at the inception of the related leases. Depreciation is computed using
straight-line and accelerated methods, with the assets' useful lives estimated
at five to seven years. Amortization expense related to capital leases is
included in depreciation and amortization in the combined statements of income.

ESTIMATED FAIR VALUE OF FINANCIAL INSTRUMENTS

The carrying amount of cash and amounts due under line of credit reported
in the combined financial statements reflects their fair value because of the
short-term maturity of those financial instruments. It is not practicable to
estimate the fair value of the Company's long-term debt and obligations under
capital leases because the Company's incremental borrowing rate cannot
reasonably be determined.

NET PATIENT SERVICE REVENUES

Net patient service revenues are based on established billing rates, less
allowances for contractual adjustments for patients covered by Medicare,
Medicaid and various other discount arrangements. Payments received under these
programs and arrangements, which are based on predetermined rates, are generally
less than the Company's established billing rates and the differences are
recorded as contractual adjustments at the time the related service is rendered.

For the year ended December 31, 1995 and the eleven-month period ended
November 30, 1996, approximately 12% and 14%, respectively, of the Company's net
patient service revenues were derived from third-party payors. The Company does
not believe that there are any credit risks associated with receivables due from
governmental agencies. Concentration of credit risk from other payors is limited
by the number of patients and payors. The Company does not require any form of
collateral from its patients or third-party payors.

F-137
<PAGE> 211

DR. SMITH AND ASSOCIATES, P.A. #6950,
DR. SMITH AND ASSOCIATES, P.A. #6958, AND
DR. SMITH AND ASSOCIATES, P.A. #6966

NOTES TO COMBINED FINANCIAL STATEMENTS -- (CONTINUED)

INCOME TAXES

Income taxes for P.A. #6950 have been provided using the liability method
in accordance with Statement of Financial Accounting Standards No. 109,
Accounting for Income Taxes (SFAS No. 109). Under this method, deferred tax
assets and liabilities are determined based on differences between the financial
reporting and tax bases of assets and liabilities and are measured using the
enacted tax rates and laws that will be in effect when the differences are
expected to reverse.

P.A. #6958 and P.A. #6966 have elected to have their income taxed under the
provisions of Subchapter S of the federal Internal Revenue Code. As a result, in
lieu of corporate tax, #6958's and #6966's taxable income is passed through to
the stockholders of #6958 and #6966 and taxed at the individual level.
Accordingly, no provision or liability for federal income tax for #6958 and
#6966 has been reflected in these combined financial statements.

USE OF ESTIMATES

2. PROPERTY AND EQUIPMENT

Property and equipment consist of the following:

<TABLE>
<CAPTION>
DECEMBER 31, NOVEMBER 30,
1995 1996
------------ ------------
<S> <C> <C>
Medical equipment........................................... $ 34,751 $ 37,552
Computer equipment.......................................... 25,556 26,782
Office furniture and equipment.............................. 4,380 4,380
Equipment under capital lease............................... 244,605 244,605
--------- ---------
309,292 313,319
Less accumulated depreciation and amortization.............. (185,903) (221,345)
--------- ---------
$ 123,389 $ 91,974
========= =========
</TABLE>

3. LONG-TERM DEBT

Long-term debt consists of the following:

<TABLE>
<CAPTION>
DECEMBER 31, NOVEMBER 30,
1995 1996
------------ ------------
<S> <C> <C>
Note payable to vendor with interest imputed at 10.75%,
payable in monthly installments of $528 through 1997
(collateralized by certain equipment)..................... $ 30,470 $ 21,450
Note payable to landlord bearing interest at prime plus 1%
(9.65% and 9.25% at December 31, 1995 and November 30,
1996, respectively), payable in monthly installments
through 1998)............................................. 60,577 33,923
-------- --------
91,047 55,373
Less current portion........................................ (38,917) (39,931)
-------- --------
$ 52,130 $ 15,442
======== ========
</TABLE>

F-138
<PAGE> 212

DR. SMITH AND ASSOCIATES, P.A. #6950,
DR. SMITH AND ASSOCIATES, P.A. #6958, AND
DR. SMITH AND ASSOCIATES, P.A. #6966

NOTES TO COMBINED FINANCIAL STATEMENTS -- (CONTINUED)

As of November 30, 1996, maturity of long-term debt is as follows:

<TABLE>
<S> <C>
Month ending December 31, 1996.............................. $ 3,283
Year ending December 31:
1997...................................................... 40,031
1998...................................................... 12,059
1999...................................................... --
-------
Total............................................. $55,373
=======
</TABLE>

Interest payments approximate interest expense for the year ended December
31, 1995 and for the eleven-month period ended November 30, 1996.

4. LEASE COMMITMENTS

Future minimum lease commitments under capital leases and noncancelable
operating leases (with an initial or remaining term in excess of one year) at
November 30, 1996 are as follows:

<TABLE>
<CAPTION>
CAPITAL OPERATING
LEASES LEASES
------- ---------
<S> <C> <C>
Month ending December 31, 1996.............................. $ 2,566 $ 9,000
Year ending December 31:
1997...................................................... 29,499 108,000
1998...................................................... 22,154 108,000
1999...................................................... 2,361 108,000
2000...................................................... 790 108,000
2001...................................................... -- 108,000
Thereafter................................................ -- 162,000
------- --------
Total minimum lease payments...................... 57,370 $711,000
========
Less amount representing interest........................... (6,473)
-------
Present value of minimum lease payments (including current
portion of $25,428)....................................... $50,897
=======
</TABLE>

F-139
<PAGE> 213

DR. SMITH AND ASSOCIATES, P.A. #6950,
DR. SMITH AND ASSOCIATES, P.A. #6958, AND
DR. SMITH AND ASSOCIATES, P.A. #6966

NOTES TO COMBINED FINANCIAL STATEMENTS -- (CONTINUED)

5. INCOME TAXES

Deferred income taxes reflect the net tax effects of temporary differences
between the carrying amounts of assets and liabilities for financial reporting
purposes and the amounts used for income tax purposes. Significant components of
#6950's deferred tax assets and liabilities are as follows:

<TABLE>
<CAPTION>
DECEMBER 31, NOVEMBER 30,
1995 1996
------------ ------------
<S> <C> <C>
DEFERRED TAX ASSETS
Current:
Accrual to cash........................................... $ 8,722 $ --
Noncurrent:
Depreciation.............................................. 27,383 29,092
Valuation allowance......................................... (35,560) (24,593)
-------- --------
Total deferred tax assets......................... 545 4,499
DEFERRED TAX LIABILITIES
Current:
Accrual to cash........................................... -- 3,681
Noncurrent:
Capital lease............................................. 545 818
-------- --------
Total deferred tax liabilities.................... 545 4,499
-------- --------
Net deferred tax assets........................... $ -- $ --
======== ========
</TABLE>

Components of the income tax provision (benefit) which relate solely to
#6950 consist of the following:

<TABLE>
<CAPTION>
DECEMBER 31, 1995 NOVEMBER 30, 1996
--------------------------- --------------------------
CURRENT DEFERRED TOTAL CURRENT DEFERRED TOTAL
------- -------- ------ ------- -------- -----
<S> <C> <C> <C> <C> <C> <C>
Federal................................. $1,182 $-- $1,182 $-- $-- $--
State................................... -- -- -- -- -- --
------ --- ------ --- --- ---
$1,182 $-- $1,182 $-- $-- $--
====== === ====== === === ===
</TABLE>

Income taxes are different from the amount computed by applying the United
States statutory rate to income before income taxes for the following reasons:

<TABLE>
<CAPTION>
DECEMBER 31, NOVEMBER 30,
1995 1996
------------ ------------
<S> <C> <C>
Income taxes at the statutory rate.......................... $ 36,678 $ 17,691
Permanent differences....................................... 332 332
S-corporation income........................................ (32,250) (8,356)
State taxes, net of federal benefit......................... 508 1,032
Change in valuation allowance............................... (4,217) (10,967)
Personal service corporation status......................... 131 268
-------- --------
$ 1,182 $ --
======== ========
</TABLE>

SFAS No. 109 requires a valuation allowance to reduce the deferred tax
assets reported if, based on the weight of the evidence, it is more likely than
not that some portion or all of the deferred tax assets will not be realized.
After consideration of all the evidence, both positive and negative, management
has determined that valuation allowances of $35,560 at December 31, 1995 and
$24,593 at November 30, 1996 are necessary to

F-140
<PAGE> 214

DR. SMITH AND ASSOCIATES, P.A. #6950,
DR. SMITH AND ASSOCIATES, P.A. #6958, AND
DR. SMITH AND ASSOCIATES, P.A. #6966

NOTES TO COMBINED FINANCIAL STATEMENTS -- (CONTINUED)

reduce the deferred tax assets to the amount that will more likely than not be
realized. The change in the valuation allowance for the year ended December 31,
1995 was $(4,217) and for the current year is $(10,967).

6. MALPRACTICE INSURANCE

The Company is covered by medical malpractice liability insurance written
on an occurrence basis. This insurance provides coverage of $5,000,000 per
incident, with a $5,000,000 aggregate limit. Management is not aware of any
reported claims pending against the Company. Losses resulting from unreported
claims cannot be estimated by management and, therefore, are not included in the
accompanying combined financial statements.

7. LITIGATION

During 1996, the Company entered into an out-of-court settlement related to
a wrongful termination claim. Payment under the out-of-court settlement of
$25,000 is classified in general and administrative expenses in the 1996
combined statement of income.

8. RELATED PARTY TRANSACTIONS

Amounts due from stockholder and due to affiliate of the Company reflect
net advances and borrowings between the Company and their owner and the owner's
related interests, including other affiliated corporations. Advances to and
borrowings from the shareholder accrue interest at approximately 6.5%.

Compensation to stockholder reflects wages earned by the stockholder acting
in the capacity as an optometrist and officer of the Company. Other related
party compensation for the year ended December 31, 1995 and the eleven-month
period ended November 30, 1996 was approximately $48,000 and $18,000,
respectively.

9. LINE OF CREDIT

The Company has a revolving credit note of $50,000 due on demand, which
bears interest at prime plus 3% (11.65% and 11.25% at December 31, 1995 and
November 30, 1996, respectively). At November 30, 1996, $14,000 was outstanding
under this facility.

The revolving credit note is collateralized by substantially all of the
assets of the Company.

10. SUBSEQUENT EVENT

On December 1, 1996, substantially all assets and liabilities of the
Company were acquired by Vision Twenty-One, Inc. (Vision) in exchange for
approximately 255,000 shares of Vision common stock and notes of approximately
$145,000. In connection therewith, the Company entered into a 40-year business
management agreement with Vision, whereby Vision will provide substantially all
nonmedical services to the practice.

F-141
<PAGE> 215

REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS

Board of Directors
Swagel-Wootton Eye Center, Ltd.
and Aztec Optical Limited Partnership

We have audited the accompanying combined balance sheet of Swagel-Wootton
Eye Center, Ltd. and Aztec Optical Limited Partnership (collectively referred to
as the Company), as of December 31, 1996, and the related combined statements of
operations, stockholders' (partners') equity, and cash flows for the year then
ended. These financial statements are the responsibility of the Company's
management. Our responsibility is to express an opinion on these financial
statements based on our audit.

We conducted our audit in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audit provides a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly,
in all material respects, the combined financial position at December 31, 1996
of Swagel-Wootton Eye Center, Ltd. and Aztec Optical Limited Partnership, and
the combined results of their operations and their cash flows for the year then
ended in conformity with generally accepted accounting principles.

ERNST & YOUNG LLP

Tampa, Florida
October 12, 1997

F-142
<PAGE> 216

SWAGEL-WOOTTON EYE CENTER, LTD. AND
AZTEC OPTICAL LIMITED PARTNERSHIP

COMBINED BALANCE SHEETS

<TABLE>
<CAPTION>
DECEMBER 31, MAY 31,
1996 1997
------------ -----------
(UNAUDITED)
<S> <C> <C>
ASSETS
Current assets:
Cash...................................................... $ 202,973 $ 191,441
Patient accounts receivable, net.......................... 418,488 317,368
Inventories............................................... 48,786 53,742
Note receivable from stockholder.......................... 20,000 --
Prepaid expenses and other current assets................. 68,600 43,756
---------- ----------
Total current assets.............................. 758,847 606,307
Property, equipment and improvements, net................... 2,378,940 2,254,568
Notes receivable from stockholder........................... 100,000 100,000
Other assets................................................ 47,032 79,907
---------- ----------
Total assets...................................... $3,284,819 $3,040,782
========== ==========
LIABILITIES AND STOCKHOLDERS' (PARTNERS') EQUITY
Current liabilities:
Accounts payable.......................................... $ 90,552 $ 111,447
Accrued compensation...................................... 191,551 176,758
Accrued pension contribution.............................. 106,207 149,096
Current portion of long-term debt ($38,620 and $39,600 to
a related party at December 31, 1996 and May 31, 1997,
respectively).......................................... 636,921 381,421
Current portion of obligations under capital leases....... 16,321 18,750
---------- ----------
Total current liabilities......................... 1,041,552 837,472
Long-term debt, less current portion ($470,273 and $453,630
to a related party at December 31, 1996 and May 31, 1997,
respectively)............................................. 1,687,536 1,554,417
Obligations under capital leases, net of current portion.... 45,595 36,793
Stockholders' (Partners') equity:
Common stock, $1 par value: 1,000 shares authorized, 800
shares issued and outstanding.......................... 800 800
Retained earnings......................................... 359,867 494,516
Partners' capital......................................... 149,469 116,784
---------- ----------
Total stockholders' (partners') equity............ 510,136 612,100
---------- ----------
Total liabilities and stockholders' (partners')
equity.......................................... $3,284,819 $3,040,782
========== ==========
</TABLE>

See accompanying notes.

F-143
<PAGE> 217

SWAGEL-WOOTTON EYE CENTER, LTD. AND
AZTEC OPTICAL LIMITED PARTNERSHIP

COMBINED STATEMENTS OF OPERATIONS

<TABLE>
<CAPTION>
FIVE-MONTH
PERIOD ENDED
YEAR ENDED MAY 31,
DECEMBER 31, -----------------------
1996 1996 1997
------------ ---------- ----------
(UNAUDITED)
<S> <C> <C> <C>
Revenues:
Net patient service revenues............................ $4,776,952 $2,366,202 $2,283,341
Sale of optical goods................................... 1,074,633 483,056 469,742
Other income............................................ 17,261 3,268 14,638
---------- ---------- ----------
Total revenues.................................. 5,868,846 2,852,526 2,767,721
Expenses:
Compensation to physician stockholders.................. 843,140 301,046 500,342
Salaries, wages and benefits............................ 2,196,575 987,640 938,631
Cost of optical goods sold.............................. 412,197 180,722 192,170
Medical supplies........................................ 530,618 251,777 228,397
Advertising............................................. 309,626 148,074 149,112
General and administrative.............................. 440,729 204,556 164,832
Utilities............................................... 83,011 36,299 39,132
Insurance............................................... 51,267 14,390 30,390
Building and equipment rent............................. 53,266 31,467 36,605
Professional fees....................................... 47,654 19,869 35,800
Depreciation and amortization........................... 254,681 110,238 103,423
---------- ---------- ----------
Total expenses.................................. 5,222,764 2,286,078 2,418,834
---------- ---------- ----------
Income from operations.................................... 646,082 566,448 348,887
Interest expense.......................................... 222,695 97,662 83,465
---------- ---------- ----------
Net income...................................... $ 423,387 $ 468,786 $ 265,422
========== ========== ==========
</TABLE>

See accompanying notes.

F-144
<PAGE> 218

SWAGEL-WOOTTON EYE CENTER, LTD. AND
AZTEC OPTICAL LIMITED PARTNERSHIP

COMBINED STATEMENTS OF STOCKHOLDERS' (PARTNERS') EQUITY

<TABLE>
<CAPTION>
TOTAL
COMMON STOCK STOCKHOLDERS'
--------------- RETAINED PARTNERS' (PARTNERS')
NUMBER AMOUNT EARNINGS CAPITAL EQUITY
------ ------ -------- --------- -------------
<S> <C> <C> <C> <C> <C>
BALANCE, JANUARY 1, 1996..................... 800 $800 $279,516 $ 136,731 $ 417,047
Cash distributions......................... (7,699) (322,599) (330,298)
Net income................................. -- -- 88,050 335,337 423,387
--- ---- -------- --------- ---------
BALANCE, DECEMBER 31, 1996................... 800 800 359,867 149,469 510,136
Net income (Unaudited)..................... -- -- 134,649 130,773 265,422
Cash distributions (Unaudited)............. -- -- -- (163,458) (163,458)
--- ---- -------- --------- ---------
BALANCE, MAY 31, 1997 (UNAUDITED)............ 800 $800 $494,516 $ 116,784 $ 612,100
=== ==== ======== ========= =========
</TABLE>

See accompanying notes.

F-145
<PAGE> 219

SWAGEL-WOOTTON EYE CENTER, LTD. AND
AZTEC OPTICAL LIMITED PARTNERSHIP

COMBINED STATEMENTS OF CASH FLOWS

<TABLE>
<CAPTION>
FIVE-MONTH
PERIOD ENDED
YEAR ENDED MAY 31,
DECEMBER 31, ---------------------
1996 1996 1997
------------ --------- ---------
(UNAUDITED)
<S> <C> <C> <C>
OPERATING ACTIVITIES
Net income................................................. $ 423,387 $ 468,786 $ 265,422
Adjustments to reconcile net income to net cash provided by
operating activities:
Depreciation and amortization............................ 254,681 110,238 103,423
(Gain) loss on disposal of equipment..................... 3,787 (1,050) (13,426)
Changes in operating assets and liabilities:
Patient accounts receivable, net...................... 46,811 26,793 101,120
Inventories........................................... (8,607) (4,390) (4,956)
Prepaid expenses and other current assets............. (10,561) 6,075 24,844
Accounts payable...................................... (103,174) (81,977) 20,895
Accrued compensation.................................. 17,704 596 (14,793)
Accrued pension contribution.......................... 653 38,088 42,889
--------- --------- ---------
Net cash provided by operating activities........ 624,681 563,159 525,418
INVESTING ACTIVITIES
Payment to stockholder..................................... (20,000) -- --
Collections from stockholders.............................. 52,918 -- 20,000
Proceeds on disposal of equipment.......................... 4,050 1,050 1,500
Purchases of property and equipment........................ (52,568) (25,045) --
--------- --------- ---------
Net cash (used in) provided by investing
activities..................................... (15,600) (23,995) 21,500
FINANCING ACTIVITIES
Proceeds from long-term debt............................... 528,989 169,520 --
Payments on long-term debt................................. (784,498) (550,530) (388,619)
Cash distributions......................................... (330,298) (125,167) (163,458)
Payments on obligations under capital leases............... (27,027) (7,173) (6,373)
--------- --------- ---------
Net cash used in financing activities............ (612,834) (513,350) (558,450)
--------- --------- ---------
Increase (decrease) in cash................................ (3,753) 25,814 (11,532)
Cash at beginning of period................................ 206,726 206,726 202,973
--------- --------- ---------
Cash at end of period...................................... $ 202,973 $ 232,540 $ 191,441
========= ========= =========
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION
Cash paid during the period for interest................... $ 219,865 $ 97,662 $ 83,465
========= ========= =========
SUPPLEMENTAL SCHEDULE OF NONCASH INVESTING AND FINANCING
ACTIVITIES
Capital lease obligations incurred to acquire equipment.... $ 59,390 -- --
========= ========= =========
</TABLE>

See accompanying notes.

F-146
<PAGE> 220

SWAGEL-WOOTTON EYE CENTER, LTD. AND
AZTEC OPTICAL LIMITED PARTNERSHIP

NOTES TO COMBINED FINANCIAL STATEMENTS
DECEMBER 31, 1996

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

NATURE OF OPERATIONS

Swagel-Wootton Eye Center, Ltd. (SWEC), an Arizona corporation, operates a
professional medical practice, specializing in general ophthalmology, surgery
and optometry. Aztec Optical Limited Partnership (Aztec), an Arizona limited
partnership with common ownership, operates a retail store which sells
sunglasses and eyeglass frames and lenses. Both entities operate in the greater
Phoenix area, and are hereinafter collectively referred to as the Company. All
significant intercompany transactions have been eliminated.

UNAUDITED INTERIM FINANCIAL STATEMENTS

The interim financial statements as of May 31, 1997 and for the five-month
periods ended May 31, 1996 and 1997 do not provide all disclosures included in
the annual financial statements. These interim statements should be read in
conjunction with the annual audited financial statements and the footnotes
thereto. Results for the 1997 interim period are not necessarily indicative of
the results for the year ending December 31, 1997. However, the accompanying
interim financial statements reflect all adjustments which are, in the opinion
of management, of a normal and recurring nature necessary for a fair
presentation of the financial position and results of operations of the Company.

INVENTORIES

Inventories consist primarily of sunglasses and eyeglass frames and lenses
(collectively, optical goods). Inventories are stated at the lower of cost or
market, with cost determined on an average cost basis.

PROPERTY, EQUIPMENT AND IMPROVEMENTS

Property, equipment and improvements are carried at cost. Depreciation is
computed using the straight-line method, with the assets' useful lives estimated
at five to thirty-one years. Routine maintenance and repairs are charged to
expense as incurred, while costs of betterments and renewals are capitalized.

ESTIMATED FAIR VALUE OF FINANCIAL INSTRUMENTS

NET PATIENT SERVICE REVENUES

Net patient service revenues are based on established billing rates, less
allowances for contractual adjustments for patients covered by Medicare, the
Arizona Health Care Cost Containment System (AHCCS) and various other discount
arrangements. Payments received under these programs and arrangements, which are
based on predetermined rates, are generally less than the Company's established
billing rates and the differences are recorded as contractual adjustments at the
time the related service is rendered.

F-147
<PAGE> 221

SWAGEL-WOOTTON EYE CENTER, LTD. AND
AZTEC OPTICAL LIMITED PARTNERSHIP

NOTES TO COMBINED FINANCIAL STATEMENTS -- (CONTINUED)

such regulatory inquires have been made, compliance with such laws and
regulations can be subject to future government review and interpretation as
well as significant regulatory action including fines, penalties and exclusion
from the Medicare and AHCCS programs.

ADVERTISING COSTS

The Company expenses advertising costs as incurred.

INCOME TAXES

SWEC has elected to have its income taxed as an S corporation for income
tax purposes. As a result, in lieu of corporate income tax, SWEC's taxable
income is passed through to the stockholders of SWEC and taxed at the individual
level.

Aztec is taxed as a partnership for income tax purposes. As a result, in
lieu of corporate income tax, Aztec's taxable income is passed through to the
partners of Aztec and taxed at the individual level.

Accordingly, no provision or liability for federal or state income tax has
been reflected in the combined financial statements of the Company.

USE OF ESTIMATES

2. NOTES RECEIVABLE

The Company has notes receivable from a stockholder of $100,000 and $20,000
at December 31, 1996, with interest at prime plus 1% (9.25% at December 31,
1996). Interest is payable annually. The $20,000 note was repaid in 1997 and the
$100,000 note will be repaid in 1998.

3. LONG-TERM DEBT

Long-term debt consists of the following:

<TABLE>
<CAPTION>
DECEMBER 31, MAY 31,
1996 1997
------------ -----------
(UNAUDITED)
<S> <C> <C>
Note payable to an insurance company due in monthly
installments through June 2006, with interest at 10%...... $1,098,633 $1,068,694
Note payable to a stockholder of SWEC due in monthly
installments through November 2005, with interest at
9.21%..................................................... 508,893 493,230
Note payable to a bank under a $400,000 credit facility: due
in October 1997, with interest at prime plus .5% (8.75% at
December 31, 1996). The note is guaranteed by the
stockholders of SWEC...................................... 353,000 100,000
Note payable to a vendor due in monthly installments through
November 1999, with interest at 9.07%. The note is
guaranteed by a stockholder of SWEC....................... 249,550 196,647
</TABLE>

F-148
<PAGE> 222

SWAGEL-WOOTTON EYE CENTER, LTD. AND
AZTEC OPTICAL LIMITED PARTNERSHIP

NOTES TO COMBINED FINANCIAL STATEMENTS -- (CONTINUED)
<TABLE>
<CAPTION>
DECEMBER 31, MAY 31,
1996 1997
------------ -----------
<S> <C> <C>
Notes payable to a bank due in monthly principal
installments plus interest at prime plus .5% (8.75% at
December 31, 1996) through 1999. The notes are guaranteed
by the stockholders of SWEC............................... 84,049 54,853
Note payable to a finance company due in monthly
installments through December 1997, with interest at
6.9%...................................................... 6,757 3,736
Unsecured note payable to a bank under a $50,000 credit
facility: due in October 1997, with interest at prime plus
.5% (8.75% at December 31, 1996). The note is guaranteed
by a partner of Aztec..................................... 19,000 16,500
Note payable to a vendor due in monthly installments through
June 1997, with interest at 9.25%......................... 4,575 2,178
---------- ----------
2,324,457 1,935,838
Less current portion........................................ (636,921) (381,421)
---------- ----------
$1,687,536 $1,554,417
========== ==========
</TABLE>

Long-term debt is collateralized by substantially all assets of the
Company.

As of December 31, 1996, the aggregate amounts of annual principal
maturities of long-term debt are as follows:

<TABLE>
<S> <C>
Year ending December 31:
1997................................................... $ 636,921
1998................................................... 227,309
1999................................................... 226,046
2000................................................... 150,597
2001................................................... 165,927
Thereafter............................................. 917,657
----------
$2,324,457
==========
</TABLE>

4. LEASE COMMITMENTS

Future minimum lease commitments under noncancelable operating and capital
leases (with an initial or remaining term in excess of one year) at December 31,
1996 are as follows:

<TABLE>
<CAPTION>
CAPITAL OPERATING
LEASES LEASES
-------- ---------
<S> <C> <C>
Year ending December 31:
1997...................................................... $ 21,856 $ 62,124
1998...................................................... 15,336 62,124
1999...................................................... 15,336 54,994
2000...................................................... 15,336 12,758
2001...................................................... 7,668 --
-------- --------
Total minimum lease payments...................... 75,532 $192,000
========
Less amount representing interest........................... (13,616)
--------
Present value of minimum lease payments (including current
portion of $16,321)....................................... $ 61,916
========
</TABLE>

F-149
<PAGE> 223

SWAGEL-WOOTTON EYE CENTER, LTD. AND
AZTEC OPTICAL LIMITED PARTNERSHIP

NOTES TO COMBINED FINANCIAL STATEMENTS -- (CONTINUED)

5. PROPERTY, EQUIPMENT AND IMPROVEMENTS

Property, equipment and improvements consist of the following at December
31, 1996:

<TABLE>
<S> <C>
Land........................................................ $ 634,378
Buildings................................................... 2,172,424
Medical equipment........................................... 798,319
</TABLE>

Office furniture and equipment.............................. 313,072
Automobiles................................................. 78,754
Leasehold improvements...................................... 15,184
-----------
4,012,131
Less accumulated depreciation and amortization.............. (1,633,191)
-----------
$ 2,378,940
===========

Included in medical equipment as of December 31, 1996 are assets acquired
through capital leases with original costs of approximately $147,000.
Amortization expense related to capital leases is included in depreciation and
amortization in the combined statements of operations.

6. MALPRACTICE INSURANCE

The Company carries malpractice insurance for each of its physicians and
optometrists. The insurance for the physicians provides coverage of $3,000,000
per incident, with a $5,000,000 annual limit. The two optometrists both have
coverages of $1,000,000 per incident, with one optometrist having a $1,000,000
annual limit and the other optometrist having a $3,000,000 annual limit.
Coverage for the physicians and optometrists is on a claims-made basis, with the
exception of one optometrist who has occurrence basis coverage. Management is
not aware of any reported claims pending against the Company. Losses resulting
from unreported claims cannot be estimated by management and, therefore, are not
included in the accompanying combined financial statements.

7. RETIREMENT PLAN

The Company maintains an employees savings and profit sharing plan under
Section 401(k) of the Internal Revenue Code which covers substantially all
employees. The Company has elected to not make matching or discretionary
contributions to this plan.

The Company maintains a money purchase pension plan which covers
substantially all employees. The Company makes annual contributions on behalf of
eligible employees based on 7.5% of the employee's compensation as defined in
the plan. Total expense related to the money purchase pension plan was
approximately $106,000 for the year ended December 31, 1996.

8. SUBSEQUENT EVENT

On June 1, 1997, substantially all assets and liabilities were acquired by
Vision Twenty-One, Inc. (Vision) in exchange for 320,000 shares of Vision common
stock. In connection therewith, the Company entered in to a 40-year service
agreement with Vision, whereby Vision will provide substantially all nonmedical
services to the practice.

The combined financial statements of the Company have been prepared as
supplemental information about the association to which Vision will provide
management services following consummation of the acquisition. The Company
previously operated as a separate independent association. The historical
financial position, results of operations and cash flows do not reflect any
adjustments relating to the acquisition.

F-150
<PAGE> 224

REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS

Board of Directors
Richard L. Short, D.O., P.A.
d/b/a Eye Associates of Pinellas

We have audited the accompanying balance sheet of Richard L. Short, D.O.,
P.A. d/b/a Eye Associates of Pinellas (the Company) as of December 31, 1996, and
the related statements of income, stockholder's equity, and cash flows for the
year then ended. These financial statements are the responsibility of the
Company's management. Our responsibility is to express an opinion on these
financial statements based on our audit.

In our opinion, the financial statements referred to above present fairly,
in all material respects, the financial position of Richard L. Short, D.O., P.A.
d/b/a Eye Associates of Pinellas at December 31, 1996, and the results of its
operations and its cash flows for the year then ended in conformity with
generally accepted accounting principles.

ERNST & YOUNG LLP

Tampa, Florida
March 14, 1997,
except for Note 12, as to which the date is
March 28, 1997

F-151
<PAGE> 225

RICHARD L. SHORT, D.O., P.A.
D/B/A EYE ASSOCIATES OF PINELLAS

BALANCE SHEET

<TABLE>
<CAPTION>
DECEMBER 31,
1996
------------
<S> <C>
ASSETS
Current assets:
Patient accounts receivable, net of allowance for
uncollectible accounts of approximately $57,000........ $332,220
Inventory................................................. 40,728
Prepaid expenses.......................................... 19,074
Prepaid rent-related party................................ 97,593
--------
Total current assets.............................. 489,615
Available-for-sale securities............................... 61,076
Property and equipment, net................................. 71,544
Deferred tax assets......................................... 7,208
--------
Total assets...................................... $629,443
========
LIABILITIES AND STOCKHOLDER'S EQUITY
Current liabilities:
Accounts payable and accrued expenses..................... $ 52,266
Bank overdraft............................................ 46,415
Accrued compensation...................................... 128,237
Pension plan payable...................................... 60,000
Deferred tax liability.................................... 86,248
Current portion of long-term debt obligation.............. 21,936
--------
Total current liabilities......................... 395,102
Long-term debt obligation, net of current portion........... 80,451
Note payable and accrued interest to related party.......... 37,781
Deferred compensation....................................... 14,826
Stockholder's equity:
Common stock, $1 par value: 5,000 shares authorized; 500
shares issued and outstanding.......................... 500
Additional paid-in capital................................ 4,500
Unrealized gain on available-for-sale securities.......... 14,972
Retained earnings......................................... 81,311
--------
Total stockholder's equity........................ 101,283
--------
Total liabilities and stockholder's equity........ $629,443
========
</TABLE>

See accompanying notes.

F-152
<PAGE> 226

RICHARD L. SHORT, D.O., P.A.
D/B/A EYE ASSOCIATES OF PINELLAS

STATEMENT OF INCOME

<TABLE>
<CAPTION>
YEAR ENDED
DECEMBER 31,
1996
------------
<S> <C>
Revenues:
Net patient service revenues.............................. $2,472,423
Other..................................................... 12,168
----------
Total revenues.................................... 2,484,591
Expenses:
Compensation -- physician stockholder..................... 509,614
Salaries, wages and benefits -- physicians................ 712,243
Salaries, wages and benefits -- other..................... 513,027
General and administrative................................ 307,772
Medical supplies.......................................... 193,203
Rent -- related party..................................... 183,000
Depreciation.............................................. 41,786
Interest.................................................. 15,764
----------
Total expenses.................................... 2,476,409
----------
Income before income taxes.................................. 8,182
Income tax expense.......................................... 4,740
----------
Net income........................................ $ 3,442
==========
</TABLE>

See accompanying notes.

F-153
<PAGE> 227

RICHARD L. SHORT, D.O., P.A.
D/B/A EYE ASSOCIATES OF PINELLAS

STATEMENT OF STOCKHOLDER'S EQUITY

<TABLE>
<CAPTION>
UNREALIZED
COMMON STOCK ADDITIONAL GAIN ON TOTAL
--------------- PAID-IN AVAILABLE-FOR- RETAINED STOCKHOLDER'S
NUMBER AMOUNT CAPITAL SALE SECURITIES EARNINGS EQUITY
------ ------ ---------- --------------- -------- -------------
<S> <C> <C> <C> <C> <C> <C>
BALANCE AT DECEMBER 31, 1995....... 500 $500 $4,500 $ 8,713 $ 77,869 $ 91,582
Net income....................... -- -- -- -- 3,442 3,442
Unrealized gain on
available-for-sale
securities.................... -- -- -- 6,259 -- 6,259
--- ---- ------ ------- -------- --------
BALANCE AT DECEMBER 31, 1996....... 500 $500 $4,500 $14,972 $ 81,311 $101,283
=== ==== ====== ======= ======== ========
</TABLE>

See accompanying notes.

F-154
<PAGE> 228

RICHARD L. SHORT, D.O., P.A.
D/B/A EYE ASSOCIATES OF PINELLAS

STATEMENT OF CASH FLOWS

<TABLE>
<CAPTION>
YEAR ENDED
DECEMBER 31,
1996
------------
<S> <C>
OPERATING ACTIVITIES
Net income.................................................. $ 3,442
Adjustments to reconcile net income to net cash provided by
operating activities:
Depreciation.............................................. 41,786
Accrued interest on note payable to related party......... 3,434
Income tax expense........................................ 4,740
Changes in operating assets and liabilities:
Patient accounts receivable............................ 28,527
Inventory.............................................. (13,367)
Prepaid expenses....................................... (3,330)
Prepaid rent -- related party.......................... (18,141)
Accounts payable and accrued expenses and bank
overdraft............................................. 42,128
Accrued and deferred compensation...................... 6,345
---------
Net cash provided by operating activities......... 95,564
INVESTING ACTIVITIES
Purchases of property and equipment......................... (11,022)
Purchases of available-for-sale securities.................. (7,462)
---------
Net cash used in investing activities....................... (18,484)
FINANCING ACTIVITIES
Borrowings on long-term debt................................ 109,700
Repayment of long-term debt................................. (56,780)
Repayments to related party................................. (30,000)
Repayment of line of credit................................. (100,000)
---------
Net cash used in financing activities....................... (77,080)
---------
Increase in cash and cash equivalents....................... --
Cash and cash equivalents, beginning of year................ --
---------
Cash and cash equivalents, end of year...................... $ --
=========
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION
Cash paid for interest...................................... $ 15,571
=========
Cash paid for income taxes.................................. $ 850
=========
</TABLE>

See accompanying notes.

F-155
<PAGE> 229

RICHARD L. SHORT, D.O., P.A.
D/B/A EYE ASSOCIATES OF PINELLAS

NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1996

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

NATURE OF OPERATIONS

Richard L. Short, D.O., P.A., a Florida professional corporation (the
Company), operates a professional medical practice in Pinellas Park, Florida,
specializing in ophthalmology.

CASH AND CASH EQUIVALENTS

The Company considers all highly liquid investments with a maturity of
three months or less at date of purchase to be cash equivalents.

INVESTMENTS IN DEBT AND EQUITY SECURITIES

The Company accounts for investments in debt and equity securities in
accordance with Statement of Financial Accounting Standards No. 115, Accounting
for Certain Investments in Debt and Equity Securities. The Company has evaluated
its investment policies and determined that all of its securities are classified
as available-for-sale. Management determines the appropriate classification of
securities at the time of purchase and reevaluates such designation as of each
balance sheet date. Available-for-sale securities are carried at fair value,
with the unrealized gains and losses, net of tax, reported as a separate
component of stockholder's equity. Realized gains and losses, and losses in
value judged to be other than temporary on available-for-sale investments, are
included in other revenue. The cost of securities sold is based on the specific
identification method.

INVENTORY

Inventory, consisting of eyeglass frames, contact lenses and optical
supplies, is stated at cost using the first-in, first-out method.

PROPERTY AND EQUIPMENT

Property and equipment are stated at cost. Depreciation is computed using
the straight-line method, with useful lives generally ranging from 5 to 31
years. Routine maintenance and repairs are charged to expense as incurred, while
costs of betterments and renewals are capitalized.

NET PATIENT SERVICE REVENUES

Net Patient service revenues are based on established billing rates less
allowances for contractual adjustments for patients covered by Medicare,
Medicaid and various other discount arrangements. Payments received under these
programs and arrangements, which generally are based on predetermined rates, are
generally less than the Company's customary charges, and the differences are
recorded as contractual adjustments at the time the related service is rendered.

The following table summarizes the percentage of net patient service
revenues by payor class for the year ended December 31, 1996:

<TABLE>
<S> <C>
Medicare.................................................... 31%
Managed care plans.......................................... 31
Medicaid.................................................... 2
Other (including self-pay).................................. 36
---
100%
===
</TABLE>

F-156
<PAGE> 230

RICHARD L. SHORT, D.O., P.A.
D/B/A EYE ASSOCIATES OF PINELLAS

NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)

ADVERTISING COSTS

The Company expenses all advertising costs as they are incurred.
Advertising costs for the year ended December 31, 1996 was $15,178 and is
included in general and administrative expenses in the accompanying financial
statements.

INCOME TAXES

FAIR VALUE OF FINANCIAL INSTRUMENTS

The carrying amount of short-term borrowings reported in the financial
statements reflects its fair value because of the short-term maturity of that
financial instrument. It is not practicable to estimate the fair value of the
Company's long-term debt because the Company's incremental borrowing rate cannot
reasonably be determined.

USE OF ESTIMATES

The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the amount reported in the financial statements and
accompanying notes. Actual results could differ from those estimates.

2. RELATED PARTY TRANSACTIONS

The Company leases certain real property from R&R Seminole, Ltd., (the
Partnership) under a month-to-month arrangement for which no formal lease
agreement has been executed. The Company is the general partner and has a 1%
interest in the Partnership and the sole physician stockholder of the Company
and his wife are the limited partners. The Company is the guarantor of the
Partnership's mortgage note dated June 25, 1991 bearing interest at 8.875% with
an outstanding principal balance of $742,446 at December 31, 1996. Rent expense,
recorded by the Company, was approximately $183,000 in 1996 for property owned
by the Partnership. Rental payments are based on monthly principal and interest
payments due on the mortgage note payable on the property. Payments made by the
Company to the Partnership totaled $201,141 in 1996. Prepaid rent to the
Partnership totaled $97,593 at December 31, 1996.

F-157
<PAGE> 231

RICHARD L. SHORT, D.O., P.A.
D/B/A EYE ASSOCIATES OF PINELLAS

NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)

3. AVAILABLE-FOR-SALE SECURITIES

All available-for-sale securities are comprised of mutual funds. The
following is a summary of available-for-sale securities:

<TABLE>
<CAPTION>
GROSS UNREALIZED
----------------- ESTIMATED
COST GAINS LOSSES FAIR VALUE
------- ------- ------- ----------
<S> <C> <C> <C> <C>
1996............................................. $46,104 $14,972 $ -- $61,076
</TABLE>

There were no realized gains or losses on available-for-sale securities
during the year ended December 31, 1996.

4. PROPERTY, PLANT, AND EQUIPMENT

Property and equipment consist of the following at December 31, 1996:

<TABLE>
<S> <C>
Medical equipment........................................... $ 250,198
Office equipment and furniture.............................. 100,301
Automobile.................................................. 27,685
Leasehold improvements...................................... 17,989
---------
396,173
Accumulated depreciation.................................... (324,629)
---------
$ 71,544
=========
</TABLE>

5. LINE OF CREDIT

At December 31, 1995, the Company had $100,000 outstanding on a line of
credit with a bank. Interest on the outstanding principal amount was payable
monthly at prime (8.5% at December 31, 1995) plus 2%. The line of credit matured
in May 1996 and was repaid.

6. NOTE PAYABLE TO RELATED PARTY

In 1993, the Company issued a note payable for $40,000 to an employee
physician to purchase the assets of his optometry practice. As part of the asset
purchase agreement, the employee physician entered into an employment agreement
(the Employment Agreement) with the Company. (See Employment Agreements below
for additional information.) The outstanding principal balance on the note due
to the employee physician was $27,080 at December 31, 1996. Accrued interest on
the note payable was $10,701 at December 31, 1996. The note is payable in five
annual installments of $10,548 per year including interest at 10% per annum,
commencing July 1998.

Under the terms of the Employment Agreement, the Company is to pay the
employee physician deferred compensation of $9,551 per year for five years
beginning August 1, 1998. The payments are to be reduced by certain amounts if
the employee physician does not complete five years of service for the Company
beginning July 1, 1993. In addition, deferred compensation payments may be
reduced if the dollar value of the employee physician's practice production
averaged less than $200,000 per year during the two-year period ended July 31,
1995. The accrued liability for deferred compensation payable to the employee
physician, discounted at 8.25%, was $14,826 at December 31, 1996.

F-158
<PAGE> 232

RICHARD L. SHORT, D.O., P.A.
D/B/A EYE ASSOCIATES OF PINELLAS

NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)

7. LONG-TERM DEBT

Long-term debt at December 31, 1996 consists of the following:

<TABLE>
<S> <C>
Note payable to bank, interest at prime (8.25% at December
31, 1996) plus .75%, principal of $1,828 plus interest
payable monthly, collateralized by accounts receivable,
inventories, furniture and equipment, due August 2001..... $102,387
Less current maturities..................................... (21,936)
--------
Long-term debt.............................................. $ 80,451
========
</TABLE>

Aggregate maturities required on long-term debt at December 31, 1996, are
as follows:

<TABLE>
<CAPTION>
YEAR AMOUNT
- ---- --------
<S> <C>
1997........................................................ $ 21,936
1998........................................................ 21,936
1999........................................................ 21,936
2000........................................................ 21,936
2001........................................................ 14,643
--------
$102,387
========
</TABLE>

8. INCOME TAXES

Deferred income taxes reflect the net effects of temporary differences
between the carrying amounts of assets and liabilities for financial reporting
purposes and the amounts used for income tax purposes. Significant components of
the Company's deferred tax assets and liabilities are as follows:

<TABLE>
<S> <C>
Noncurrent
Depreciation.............................................. $ 7,102
Contribution carryover.................................... 106
-------
Total deferred tax assets................................... 7,208
-------
Current accrual to cash..................................... 86,248
Total deferred tax liabilities.............................. 86,248
-------
Net deferred tax liabilities................................ $79,040
=======
</TABLE>

Components of the income tax provision (benefit) consists of the following
for the year ended December 31, 1996:

<TABLE>
<CAPTION>
CURRENT DEFERRED TOTAL
------- -------- ------
<S> <C> <C> <C>
Federal..................................................... $-- $4,064 $4,064
State....................................................... -- 676 676
--- ------ ------
$-- $4,740 $4,740
=== ====== ======
</TABLE>

F-159
<PAGE> 233

RICHARD L. SHORT, D.O., P.A.
D/B/A EYE ASSOCIATES OF PINELLAS

NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)

Income taxes are different from the amount computed by applying the United
States Statutory Rate to income before income taxes for the following reasons:

<TABLE>
<CAPTION>
YEAR ENDED
DECEMBER 31,
1996
------------
<S> <C>
Income taxes at statutory rate.............................. $2,782
Permanent differences....................................... 1,396
State taxes, net of federal benefit......................... 446
Personal service corporation status......................... 116
------
$4,740
======
</TABLE>

SFAS 109 requires a valuation allowance to reduce the deferred tax assets
reported if, based on the weight of the evidence, it is more likely than not
that some portion or all of the deferred tax assets will not be realized. After
consideration of all the evidence, both positive and negative, management has
determined that no valuation allowance at December 31, 1996 is necessary to
reduce the deferred tax assets to the amount that will more likely than not be
realized. There was no change in the valuation allowance in 1996. At December
31, 1996, the Company did not have available any net operating loss
carryforwards.

9. MALPRACTICE INSURANCE

The Company carries claims-made malpractice insurance for each of its
physicians. This insurance provides coverage of $1 million per incident, with a
$3 million annual limit. Management is not aware of any reported claims pending
against the Company. Losses resulting from unreported claims cannot be estimated
by management and, therefore, are not included in the accompanying financial
statements.

10. RETIREMENT PLAN

The Company maintains a profit-sharing plan covering all employees with two
years of service. The amount of contribution to the plan is determined annually
by the Board of Directors and may vary from zero to fifteen percent of covered
compensation.

The Company restated its profit sharing plan effective October 1, 1996 to
comply with Section 401(k) of the Federal Internal Revenue Code. The plan allows
employees with one year of service to defer up to fifteen percent of their
salary with a discretionary matching Company contribution. Total Company expense
related to the plan was $61,815 for the year ended December 31, 1996.

11. EMPLOYMENT AGREEMENTS

The Company employs several physicians through various employment
agreements. Compensation is calculated as a percentage of the dollar value of
practice production collected which is attributable to the employee physician.
The compensation percentage ranges from 40% to 70%. The employment agreements
are one year in duration and may be canceled with 90 days written notice by
either party.

In addition, if the sole stockholder of the Company should die during the
term of a certain physician employment agreement, the physician employee shall
have 15 days to match any offer received to purchase all or a portion of the
stock or assets of the Company.

12. SUBSEQUENT EVENT

On March 28, 1997, substantially all assets and liabilities of the Company
were acquired by Vision Twenty-One, Inc. (Vision) in exchange for approximately
129,000 shares of Vision common stock. In connection therewith, the Company
entered into a 40-year business management agreement with Vision, whereby Vision
will provide substantially all nonmedical services to the practice.

F-160
<PAGE> 234

RICHARD L. SHORT, D.O., P.A.
D/B/A EYE ASSOCIATES OF PINELLAS

NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)

F-161
<PAGE> 235

REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS

Board of Directors
Cochise Eye & Laser, P.C.

We have audited the accompanying balance sheet of Cochise Eye & Laser, P.C.
as of July 31, 1996, and the related statements of income, stockholders' equity,
and cash flows for the year then ended. These financial statements are the
responsibility of the Company's management. Our responsibility is to express an
opinion on these financial statements based on our audit.

In our opinion, the financial statements referred to above present fairly,
in all material respects, the financial position of Cochise Eye & Laser, P.C. at
July 31, 1996, and the results of its operations and its cash flows for the year
then ended in conformity with generally accepted accounting principles.

ERNST & YOUNG LLP

Tampa, Florida
March 28, 1997
except for Note 6, as to which the date is
May 1, 1997

F-162
<PAGE> 236

COCHISE EYE & LASER, P.C.

BALANCE SHEETS

<TABLE>
<CAPTION>
JULY 31, APRIL 30,
1996 1997
-------- -----------
(UNAUDITED)
<S> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents................................. $155,798 $256,567
Patient accounts receivable, net.......................... 333,877 262,543
Inventories............................................... 102,715 87,564
Due from related party.................................... 1,087 32,054
Prepaid expenses.......................................... 60,288 22,756
-------- --------
Total current assets.............................. 653,765 661,484
Due from related party...................................... 6,952 6,952
Property, equipment and improvements, net................... 333,273 329,528
-------- --------
Total assets...................................... $993,990 $997,964
======== ========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Bank overdraft............................................ $139,105 $ --
Accounts payable.......................................... 42,595 37,634
Accrued pension contribution.............................. 126,629 60,489
Accrued compensation...................................... 28,619 42,650
-------- --------
Total current liabilities......................... 336,948 140,773
Deferred tax liability.................................... 245,710 321,710
Stockholders' equity:
Common stock, $1 par value: 50,000 shares authorized;
1,225 (1996) and 1,247 (1997) shares issued and
outstanding............................................ 1,225 1,247
Additional paid-in capital................................ 95,625 104,197
Due from stockholder......................................
Retained earnings......................................... 314,482 430,037
-------- --------
Total stockholders' equity........................ 411,332 535,481
-------- --------
Total liabilities and stockholders' equity........ $993,990 $997,964
======== ========
</TABLE>

See accompanying notes.

F-163
<PAGE> 237

COCHISE EYE & LASER, P.C.

STATEMENTS OF INCOME

<TABLE>
<CAPTION>
NINE-MONTH
PERIOD ENDED
YEAR ENDED APRIL 30,
JULY 31, -----------------------
1996 1996 1997
---------- ---------- ----------
(UNAUDITED)
<S> <C> <C> <C>
Revenues:
Net patient service revenues............................. $2,096,246 $1,679,545 $1,627,918
Sale of optical supplies................................. 599,944 448,461 558,530
Other.................................................... 7,102 6,546 35,832
---------- ---------- ----------
Total revenues................................... 2,703,292 2,134,552 2,222,280
Expenses:
Compensation to physician stockholders................... 740,324 450,872 432,456
Salaries, wages and benefits............................. 837,029 610,318 711,509
Cost of optical supplies sold............................ 313,644 228,819 300,265
Optical, clinical and surgical supplies.................. 254,328 220,812 175,516
General and administrative............................... 156,191 101,663 174,035
Advertising.............................................. 40,285 16,234 42,236
Contract services........................................ 31,090 17,170 17,309
Insurance................................................ 23,422 4,657 27,399
Building and equipment rent.............................. 109,292 74,724 93,003
Depreciation and amortization............................ 72,927 55,452 56,997
Interest................................................. 1,415 2,183 --
---------- ---------- ----------
Total expenses................................... 2,579,897 1,782,904 2,030,725
---------- ---------- ----------
Income before income taxes....................... 123,345 351,648 191,555
---------- ---------- ----------
Income taxes............................................... 53,852 40,000 76,000
---------- ---------- ----------
Net income................................................. $ 69,493 $ 311,648 $ 115,555
========== ========== ==========
</TABLE>

See accompanying notes.

F-164
<PAGE> 238

COCHISE EYE & LASER, P.C.

STATEMENTS OF STOCKHOLDERS' EQUITY

<TABLE>
<CAPTION>
COMMON STOCK ADDITIONAL TOTAL
--------------- PAID-IN RETAINED STOCKHOLDERS'
NUMBER AMOUNT CAPITAL EARNINGS EQUITY
------ ------ ---------- --------- -------------
<S> <C> <C> <C> <C> <C>
BALANCE AT AUGUST 1, 1995..................... 1,113 $1,113 $ 52,762 $262,989 $316,864
Issuance of common stock.................... 112 112 42,863 -- 42,975
Net income.................................. -- -- -- 69,493 69,493
Distributions to stockholders............... -- -- -- (18,000) (18,000)
----- ------ -------- -------- --------
BALANCE AT JULY 31, 1996...................... 1,225 1,225 95,625 314,482 411,332
Issuance of common stock.................... 22 22 8,572 -- 8,594
Net income.................................. -- -- -- 115,555 115,555
----- ------ -------- -------- --------
BALANCE AT APRIL 30, 1997 (UNAUDITED)......... 1,247 $1,247 $104,197 $430,037 $535,481
===== ====== ======== ======== ========
</TABLE>

See accompanying notes.

F-165
<PAGE> 239

COCHISE EYE & LASER, P.C.

STATEMENTS OF CASH FLOWS

<TABLE>
<CAPTION>
NINE-MONTH
PERIOD ENDED
YEAR ENDED APRIL 30,
JULY 31, ---------------------
1996 1996 1997
---------- --------- ---------
(UNAUDITED)
<S> <C> <C> <C>
OPERATING ACTIVITIES
Net income.................................................. $ 69,493 $ 311,648 $ 115,555
Adjustments to reconcile net income to net cash provided by
operating activities:
Depreciation and amortization............................. 72,927 55,452 56,997
Income taxes.............................................. 53,852 40,000 76,000
Changes in operating assets and liabilities:
Patient accounts receivable, net....................... (73,990) (69,606) 71,334
Inventories............................................ -- 8,793 15,151
Prepaid expenses....................................... (39,908) -- 37,532
Due from related party................................. 12,858 2,897 (30,967)
Accounts payable and accrued expenses.................. 122,797 (36,381) (196,175)
--------- --------- ---------
Net cash provided by operating activities......... 218,029 312,803 145,427
INVESTING ACTIVITIES
Purchases of property, equipment and improvements........... (107,954) (98,471) (53,252)
--------- --------- ---------
Net cash used in investing activities....................... (107,954) (98,471) (53,252)
FINANCING ACTIVITIES
Payment of capital lease obligation......................... (31,513) (8,964) --
Issuance of common stock.................................... 42,975 22,538 8,594
Distributions to stockholders............................... (18,000) -- --
--------- --------- ---------
Net cash provided by (used in) financing
activities...................................... (6,538) 13,574 8,594
--------- --------- ---------
Net increase in cash equivalents............................ 103,537 227,906 100,769
Cash equivalents at beginning of period..................... 52,261 52,261 155,798
--------- --------- ---------
Cash equivalents at end of period................. $ 155,798 $ 280,167 $ 256,567
========= ========= =========
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION
Cash paid during the period for interest.................... $ 1,415 $ 1,313 $ --
========= ========= =========
</TABLE>

See accompanying notes.

F-166
<PAGE> 240

COCHISE EYE & LASER, P.C.

NOTES TO FINANCIAL STATEMENTS
JULY 31, 1996

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

NATURE OF OPERATIONS

Cochise Eye & Laser, P.C. (the Company), an Arizona corporation, operates a
professional medical practice, specializing in general ophthalmology, surgery,
and optometry. The Company has three offices located in Sierra Vista, Benson and
Douglas, Arizona.

UNAUDITED INTERIM FINANCIAL STATEMENTS

The interim financial statements as of April 30, 1997 and for the
nine-month periods ended April 30, 1996 and 1997 do not provide all disclosures
included in the annual financial statements. These interim statements should be
read in conjunction with the annual audited financial statements and the
footnotes thereto. Results for the 1997 interim period are not necessarily
indicative of the results for the year ending July 31, 1997. However, the
accompanying interim financial statements reflect all adjustments which are, in
the opinion of management, of a normal and recurring nature necessary for a fair
presentation of the financial position and results of operations of the Company.

CASH AND CASH EQUIVALENTS

The Company considers all highly liquid investments with an original
maturity of three months or less when purchased to be cash equivalents.

INVENTORIES

Inventories consist primarily of optical lenses, contact lenses and
eyeglass frames. Inventories are stated at the lower of cost or market, with
cost determined on a specific-identification basis.

PROPERTY, EQUIPMENT AND IMPROVEMENTS

Property, equipment and improvements are carried at cost. Depreciation and
amortization, including amortization of assets held under capital lease
agreements are computed using the straight-line method, with useful lives
generally ranging from 5 to 20 years. Routine maintenance and repairs are
charged to expense as incurred, while costs of betterments and renewals are
capitalized.

Property, equipment and improvements consist of the following at July 31,
1996:

<TABLE>
<S> <C>
Land........................................................ $ 42,710
Medical, optical and surgical equipment..................... 511,837
Office equipment and furniture.............................. 260,274
Vehicles.................................................... 20,753
Leasehold improvements...................................... 103,783
--------
939,357
Less accumulated depreciation and amortization.............. (606,084)
--------
$333,273
========
</TABLE>

Included in medical equipment as of July 31, 1996 are assets acquired
through capital leases with original costs of approximately $42,000.

Amortization expense related to capital leases was approximately $8,000 for
the year ended July 31, 1996, and is included in depreciation in the statement
of income.

F-167
<PAGE> 241

COCHISE EYE & LASER, P.C.

NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)

FAIR VALUE OF FINANCIAL INSTRUMENTS

The carrying value of all current assets and current liabilities
approximates their fair value because of their short-term nature.

NET PATIENT SERVICE REVENUES

Net patient service revenues are based on established billing rates, less
allowances for contractual adjustments for patients covered by Medicare and the
Arizona Health Care Cost Containment System (AHCCS), and various other discount
arrangements. Payments received under these programs and arrangements, which
generally are based on predetermined rates, are generally less than the
Company's customary charges, and the differences are recorded as contractual
adjustments at the time the related service is rendered.

For the year ended July 31, 1996, approximately 27% of the Company's net
patient service revenues were derived from the Medicare and AHCCS programs. The
Company does not believe that there are any credit risks associated with
receivables due from governmental agencies. Concentration of credit risk from
other payors is limited by the number of patients and payors. The Company does
not require any form of collateral from its patients or third-party payors.

Laws and regulations governing the Medicare and AHCCS programs are complex
and subject to interpretation. The Company believes that it is in compliance
with all applicable laws and regulations and is not aware of any pending or
threatened investigations involving allegations of potential wrong doing. While
no such regulatory inquiries have been made, compliance with such laws and
regulations can be subject to future government review and interpretation as
well as significant regulatory action including fines, penalties and exclusion
from the Medicare and AHCCS programs.

ADVERTISING COSTS

The Company expenses advertising costs as incurred.

INCOME TAXES

USE OF ESTIMATES

F-168
<PAGE> 242

COCHISE EYE & LASER, P.C.

NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)

2. INCOME TAXES

<TABLE>
<S> <C>
DEFERRED TAX ASSETS
Noncurrent:
NOL carryforward.......................................... $ 10,722
Other..................................................... 2,664
---------
Total deferred tax assets......................... 13,386
---------
DEFERRED TAX LIABILITIES
Noncurrent:
Depreciation................................................ 43,620
Accrual to cash............................................. 215,476
---------
Total deferred tax liabilities.................... (259,096)
---------
Net deferred liability...................................... $(245,710)
=========
</TABLE>

Components of the income tax provision consist of the following for the
year ended July 31, 1996:

<TABLE>
<CAPTION>
CURRENT DEFERRED TOTAL
------- -------- --------
<S> <C> <C> <C>
Federal.................................................. $ -- $ 41,987 $ 41,987
State.................................................... -- 11,865 11,865
------ -------- --------
$ -- $ 53,852 $ 53,852
====== ======== ========
</TABLE>

Income taxes are different from the amount computed by applying the United
States statutory rate to income before income taxes for the following reasons
for the year ended July 31, 1996:

<TABLE>
<S> <C>
Income taxes at the statutory rate.......................... $41,937
Permanent differences....................................... 7,712
State taxes, net of federal benefit......................... 2,969
Personal service corporation status......................... 1,234
-------
$53,852
=======
</TABLE>

SFAS 109 requires a valuation allowance to reduce the deferred tax assets
reported if, based on the weight of the evidence, it is more likely than not
that some portion or all of the deferred tax assets will not be realized. After
consideration of all the evidence, both positive and negative, management has
determined that no valuation allowance at July 31, 1996 is necessary to reduce
the deferred tax assets to the amount that will more likely than not be
realized. At July 31, 1996, the Company has net operating loss carryforwards of
approximately $26,000 which expire in the years 2010 and 2011.

3. MALPRACTICE INSURANCE

The Company carries malpractice insurance for its physicians and
optometrists. This insurance provides coverage of $1,000,000 per incident with a
$3,000,000 annual limit, with the exception of one optometrist who has coverage
of $2,000,000 per incident and a $4,000,000 annual limit. Coverage for the
physicians is on a claims-made basis, while coverage for the optometrists is on
an occurrence basis. In addition, the Company has an umbrella policy which
provides coverage of $1,000,000 per incident and $3,000,000 per annum.
Management is not aware of any reported claims pending against the Company.
Losses resulting from unreported claims cannot be estimated by management and,
therefore, are not included in the accompanying financial statements.

F-169
<PAGE> 243

COCHISE EYE & LASER, P.C.

NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)

4. RETIREMENT PLAN

The Company maintains a profit sharing plan under Section 401(k) of the
Internal Revenue Code which covers substantially all employees. The Company
makes discretionary contributions on behalf of eligible employees which are
subject to various limits. Total expense related to the profit sharing plan for
the year ended July 31, 1996 was approximately $75,000.

The Company maintains a money purchase pension plan which covers
substantially all employees. The Company makes annual contributions on behalf of
eligible employees based on 5.7% of the employee's compensation, plus 5.7% of
the employee's compensation in excess of the taxable wage base as defined in the
plan. Total expense related to the money purchase pension plan for the year
ended July 31, 1996 was approximately $52,000.

5. RELATED PARTY TRANSACTIONS

The physician stockholders of the Company provide virtually all
ophthalmology services and their related salaries and benefits are reported as
compensation to physician stockholders in the accompanying statement of income.

The Company rents the Sierra Vista building from one of its stockholders.
Total rent paid to the stockholder for the year ended July 31, 1996 approximated
$83,000, and is included in building and equipment rent in the accompanying
statement of income.

Included as a reduction to stockholders' equity is a note receivable for
$900 from a stockholder related to the purchase of common stock.

As of July 31, 1996, the Company had an amount due from an employee of
$8,039, bearing interest at 8% and payable through 2010.

6. SUBSEQUENT EVENTS

On May 1, 1997, substantially all assets and liabilities were acquired by
Vision Twenty-One, Inc. (Vision) in exchange for 169,150 shares of Vision common
stock. In connection therewith, the Company entered into a 40-year service
agreement with Vision, whereby Vision will provide substantially all nonmedical
services to the practice.

The financial statements of the Company have been prepared as supplemental
information about the Association to which Vision will provide management
services following consummation of the acquisition. The Company previously
operated as a separate independent association. The historical financial
position, results of operations and cash flows do not reflect any adjustments
relating to the acquisition.

F-170
<PAGE> 244

(This page intentionally left blank)
<PAGE> 245

(This page intentionally left blank)
<PAGE> 246

[INSIDE BACK COVER]

[THE INSIDE BACK COVER SETS FORTH THE COMPANY NAME AND LOGO WITH PICTURES
DEPICTING EYEGLASSES, A COLLAGE OF VARIOUS MANAGED CARE MEMBERS IN THE PROCESS
OF RECEIVING EYE CARE AT MANAGED CLINICS; A MANAGED PROVIDER; AND A TELEPHONE
OPERATOR/RECEPTIONIST TAKING CALLS.]

<PAGE> 247

============================================================

NO DEALER, SALESPERSON OR ANY OTHER PERSON HAS BEEN AUTHORIZED TO GIVE ANY
INFORMATION OR TO MAKE ANY REPRESENTATIONS OTHER THAN THOSE CONTAINED IN THIS
PROSPECTUS IN CONNECTION WITH THE OFFER MADE BY THIS PROSPECTUS AND, IF GIVEN OR
MADE, SUCH INFORMATION OR REPRESENTATIONS MUST NOT BE RELIED UPON AS HAVING BEEN
AUTHORIZED BY THE COMPANY OR ANY OF THE UNDERWRITERS. THIS PROSPECTUS DOES NOT
CONSTITUTE AN OFFER TO SELL OR THE SOLICITATION OF ANY OFFER TO BUY ANY SECURITY
OTHER THAN THE SHARES OF COMMON STOCK OFFERED BY THIS PROSPECTUS, NOR DOES IT
CONSTITUTE AN OFFER TO SELL OR A SOLICITATION OF ANY OFFER TO BUY THE SHARES OF
COMMON STOCK BY ANYONE IN ANY JURISDICTION IN WHICH SUCH AN OFFER OR
SOLICITATION IS NOT AUTHORIZED, OR IN WHICH THE PERSON MAKING SUCH OFFER OR
SOLICITATION IS NOT QUALIFIED TO DO SO, OR TO ANY PERSON TO WHOM IT IS UNLAWFUL
TO MAKE SUCH OFFER OR SOLICITATION. NEITHER THE DELIVERY OF THIS PROSPECTUS NOR
ANY SALE MADE HEREUNDER SHALL, UNDER ANY CIRCUMSTANCES, CREATE ANY IMPLICATION
THAT THE INFORMATION CONTAINED HEREIN IS CORRECT AS OF ANY TIME SUBSEQUENT TO
THE DATE HEREOF.

------------------------

TABLE OF CONTENTS

<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Prospectus Summary........................ 3
Risk Factors.............................. 7
The Company............................... 18
The Acquisitions.......................... 18
Relationships with Affiliated Providers
and Retail Optical Companies............ 21
Use of Proceeds........................... 22
Price Range of Common Stock............... 22
Dividend Policy........................... 22
Capitalization............................ 23
Selected Pro Forma Financial Data......... 24
Selected Financial Data................... 25
Management's Discussion and Analysis of
Financial Condition and Results of
Operations.............................. 26
Business.................................. 36
Management................................ 52
Certain Transactions...................... 59
Principal Stockholders.................... 62
Description of Capital Stock.............. 63
Shares Eligible for Future Sale........... 67
Underwriting.............................. 69
Legal Matters............................. 71
Experts................................... 71
Additional Information.................... 72
Index to Financial Statements............. F-1
</TABLE>

============================================================
============================================================

2,400,000 Shares

[VISION TWENTY-ONE LOGO]

Common Stock

-------------------------

PROSPECTUS

-------------------------

PRUDENTIAL SECURITIES INCORPORATED

WHEAT FIRST BUTCHER SINGER
, 1997

============================================================
<PAGE> 248

PART II.

INFORMATION NOT REQUIRED IN PROSPECTUS

ITEM 13. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION

The Company estimates that expenses payable by it in connection with the
Offering described in this registration statement (other than underwriting
discounts and commissions) will be as follows:

<TABLE>
<S> <C>
Securities and Exchange Commission registration fee......... $ 11,954
NASD filing fee............................................. 4,445
Nasdaq National Market listing fee.......................... 17,500
Printing expenses........................................... 100,000
Accounting fees and expenses................................ 225,000
Legal fees and expenses..................................... 225,000
Fees and expenses (including legal fees) for qualifications
under state securities laws............................... 10,000
Registrar and Transfer Agent's fees and expenses............ 3,500
Miscellaneous............................................... 2,601
--------
Total............................................. $600,000
========
</TABLE>

- ---------------

All amounts except the Securities and Exchange Commission registration fee,
the NASD filing fee and the Nasdaq National Market listing fee are estimated.

ITEM 14. INDEMNIFICATION OF DIRECTORS AND OFFICERS

Section 607.0831 of the Florida Business Corporation Act ("FBCA") limits
the liability of directors of Florida corporations. Section 607.0831 provides as
follows:

1. A director is not personally liable for monetary damages to the
corporation or any other person for any statement, vote, decision, or
failure to act, regarding corporate management or policy, by a director,
unless:

a. The director breached or failed to perform his duties as a
director; and

b. The director's breach of, or failure to perform, those duties
constitutes:

(1) A violation of the criminal law, unless the director had
reasonable cause to believe his conduct was lawful or had no
reasonable cause to believe his conduct was unlawful. A judgment or
other final adjudication against a director in any criminal
proceeding for a violation of the criminal law estops that director
from contesting the fact that his breach, or failure to perform,
constitutes a violation of the criminal law; but does not estop the
director from establishing that he had reasonable cause to believe
that his conduct was lawful or had no reasonable cause to believe
that his conduct was unlawful;

(2) A transaction from which the director derived an improper
personal benefit, either directly or indirectly;

(3) A circumstance under which the liability provisions of
Florida Statutes sec. 607.0834 (liability for unlawful distributions)
are applicable;

(4) In a proceeding by or in the right of the corporation to
procure a judgment in its favor or by or in the right of a
shareholder, conscious disregard for the best interest of the
corporation, or willful misconduct; or

(5) In a proceeding by or in the right of someone other than the
corporation or a shareholder, recklessness or an act or omission
which was committed in bad faith or with

II-1
<PAGE> 249

malicious purpose or in a manner exhibiting wanton and willful
disregard of human rights, safety, or property.

2. For the purposes of this section, the term "recklessness" means the
action, or omission to act, in conscious disregard of a risk;

a. Known, or so obvious that it should have been known to the
director; and

b. Known to the director, or so obvious that it should have been
known, to be so great as to make it highly probable that harm would
follow from such action or omission.

3. A director is deemed not to have derived an improper personal
benefit from any transaction if the transaction and the nature of any
personal benefit derived by the director are not prohibited by state or
federal law or regulation and, without further limitation:

a. In an action other than a derivative suit regarding a decision
by the director to approve, reject, or otherwise affect the outcome of
an offer to purchase the stock of, or to effect a merger of, the
corporation, the transaction and the nature of any personal benefits
derived by a director are disclosed or known to all directors voting on
the matter, and the transaction was authorized, approved or ratified by
at least two directors who comprise a majority of the disinterested
directors (whether or not such disinterested directors constitute a
quorum);

b. The transaction and the nature of any personal benefits derived
by a director are disclosed or known to the shareholders entitled to
vote, and the transaction was authorized, approved, or ratified by the
affirmative vote or written consent of such shareholders who hold a
majority of the shares, the voting of which is not controlled by
directors who derived a personal benefit from or otherwise had a
personal interest in the transaction; or

c. The transaction was fair and reasonable to the corporation at
the time it was authorized by the board, a committee, or the
shareholders, notwithstanding that a director received a personal
benefit.

4. The circumstances set forth in subsection 3 are not exclusive and
do not preclude the existence of other circumstances under which a director
will be deemed not to have derived an improper benefit.

Section 607.0850 of the FBCA empowers a Florida corporation, subject to
certain limitations, to indemnify its directors and officers against expenses
(including attorneys' fees, judgments, fines and certain settlements) actually
and reasonably incurred by them in connection with any suit or proceeding to
which they are a party so long as they acted in good faith and in a manner
reasonably believed to be in or not opposed to the best interests of the
corporation, and, with respect to a criminal action or proceeding, so long as
they had no reasonable cause to believe their conduct to have been unlawful.

The Articles of Incorporation of the Company provide that the Company shall
indemnify any person who is or was a director or officer of the Company to the
full extent permitted by Florida law. In addition, the Board of Directors of the
Company has approved the execution by the Company of indemnification agreements
with the Directors and certain officers of the Company, the form of which has
been filed as an exhibit to the Registration Statement.

The Company maintains director and officer liability insurance.

ITEM 15. RECENT SALES OF UNREGISTERED SECURITIES

In November 1996, the Company issued an aggregate of 2,685,318 shares of
Common Stock to Theodore Gillette, Richard Sanchez and Peter Fontaine in
connection with a reorganization of the Company. These transactions were exempt
from the registration requirements of the Securities Act pursuant to Section
4(2).

In May 1996 and October 1996, the Company issued an aggregate of 270,331
shares of Common Stock to Bruce S. Maller, a director of the Company, as
compensation for consulting and advisory services. These transactions were
exempt from the registration requirements of the Securities Act pursuant to Rule
701.

II-2
<PAGE> 250

In September 1996, the Company issued 108,132 shares of Common Stock to Dr.
Richard L. Lindstrom, a Director of the Company, as compensation for consulting
and advisory services. This transaction was exempt from the registration
requirements of the Securities Act pursuant to Rule 701.

In December 1996, the Company sold an aggregate principal amount of
$1,250,000 of its 10% Senior Subordinated Notes, Due December 19, 1999 (the
"Notes"), to certain unrelated parties in a private placement. Each Note has a
detachable Warrant exchangeable into 7,036 shares of Common Stock of the Company
at an exchange price ranging from $6.00 to $7.11 per share, or in a cashless
exchange for a reduced number of shares pursuant to a formula. This transaction
was exempt from the registration requirements of the Securities Act pursuant to
Section 4(2).

In February 1997, the Company sold a 10% Senior Subordinated Series 1997
Note, Due December 19, 1999, in the principal amount of $2,000,000 (the "Note"),
to Piper Jaffray Healthcare Fund II Limited Partnership in a private placement.
The Note has a detachable Warrant exchangeable into a maximum of 333,333 shares
of Common Stock at an exchange price ranging from $6.00 to $7.11 per share, or
in a cashless exchange for a reduced number of shares pursuant to a formula.
This transaction was exempt from the registration requirements of the Securities
Act pursuant to Section 4(2).

In a private placement April 1997, which was amended in June 1997, the
Company issued a promissory note to Prudential Securities Group Inc. in the
maximum aggregate amount of $4.7 million and warrants exchangeable into 210,000
shares of Common Stock at an exchange price per share equal to the initial
public offering price of the Company's Common Stock. This transaction was exempt
from the registration requirements of the Securities Act pursuant to Section
4(2).

In connection with the 1996 Acquisitions, the Company issued non-negotiable
promissory notes, as part of the purchase price, totalling approximately
$2,000,000 and issued an aggregate of 2,223,053 shares of Common Stock. These
transactions were exempt from the registration requirements of the Securities
Act pursuant to Section 4(2).

In 1996 and 1997, the Company granted options to purchase 682,677 shares of
Common Stock under the Plans to certain employees, executive officers and
affiliated professionals. These transactions were exempt from the registration
requirements of the Securities Act pursuant to Rule 701.

In April 1997, the Company issued 128,541 shares of Common Stock in
connection with the Merger Agreement with Richard L. Short, D.O., P.A. This
transaction was exempt from the registration requirements of the Securities Act
pursuant to Section 4(2).

In May 1997, the Company issued 11,411 shares of Common Stock, $19,000 in a
non-negotiable promissory note and $26,000 in cash in connection with the
acquisition of certain assets of Drs. Smith, Porter & Associates, P.A. This
transaction was exempt from the registration requirements of the Securities Act
pursuant to Section 4(2).

In May 1997, the Company issued 169,150 shares of Common Stock in
connection with the Merger Agreement with Cochise Eye & Laser, P.C. This
transaction was exempt from the registration requirements of the Securities Act
pursuant to Section 4(2).

In June 1997, the Company issued 109,084 shares of Common Stock and
$245,440 in non-negotiable promissory notes in connection with the acquisition
agreements with Craig R. Cassidy, D.O., P.C., Sanford L. Moretsky, D.O., P.C.,
and Valley Outpatient Surgical Center, Inc. This transaction was exempt from the
registration requirements of the Securities Act pursuant to Section 4(2).

In June 1997, the Company issued 320,000 shares of Common Stock in
connection with the acquisition of certain assets of Swagel-Wootton Eye Care
Center, Ltd. and Aztec Optical. This transaction was exempt from the
registration requirements of the Securities Act pursuant to Section 4(2).

Effective July 1997, the Company issued 138,338 shares of Common Stock into
escrow pending final closing upon the professional corporation obtaining a
license in connection with the Merger Agreement with

II-3
<PAGE> 251

Eye Institute of Southern Arizona, P.C. This transaction is exempt from the
registration requirements of the Securities Act pursuant to Section 4(2).

In September 1997, the Company issued 219,057 shares of Common Stock in
connection with the closing in escrow of the acquisition of Retina Associates
Southwest, P.C. This transaction is exempt from the registration requirements of
the Securities Act pursuant to Section 4(2).

In September 1997, the Company issued 155,702 shares of Common Stock in
connection with the closing in escrow of the acquisition of Florida Eye Center,
Sever & Ramseur, M.D., P.A., Thomas J. Pusateri, M.D., P.A., and Leonard E.
Cortelli, M.D., P.A., Center Optical, Inc. This transaction is exempt from the
registration requirements of the Securities Act pursuant to Section 4(2).

In September 1997, the Company issued 22,453 shares of Common Stock in
connection with the closing in escrow of the acquisition of Eye Q Corporation.
This transaction is exempt from the registration requirements of the Securities
Act pursuant to Section 4(2).

In October 1997, the Company issued 64,402 shares of Common Stock in
connection with the closing in escrow of the acquisition of Lawrence C. Taylor,
Jr., M.D., P.A. and Leslie A. Tavares, M.D., P.A. This transaction is exempt
from the registration requirements of the Securities Act pursuant to Section
4(2).

In an October 1997 private placement, the Company issued a promissory note
to Prudential Securities Credit Corporation in the aggregate amount of $37.0
million and warrants to purchase up to an aggregate of 50,000 shares of Common
Stock at an exercise price of $13.125 per share. Upon borrowings by the Company,
Prudential will receive up to 150,000 additional warrants at an exercise price
of equal to the average of the closing prices of the Common Stock for the ten
trading days prior to the grant date. This transaction is exempt from the
registration requirements of the Securities Act pursuant to Section 4(2).

In October 1997, the Company issued warrants to purchase up to 25,000
shares of Common Stock at an exercise price of $13.25 per share to Prudential
Securities Incorporated as compensation for advisory services in connection with
the Company's acquisitions. This transaction is exempt from the registration
requirements of the Securities Act pursuant to Section 4(2).

In October 1997, the Company issued warrants to purchase up to 10,000
shares of Common Stock at an exercise price of $13.125 per share to Prudential
Securities Incorporated as a retainer in connection with the location of a bank
credit facility and upon closing of such bank credit facility will receive
warrants to purchase an additional 40,000 shares at an exercise price of equal
to the average of the closing prices of the Common Stock for the ten trading
days prior to the grant date.

Effective October 31, 1997, the Company issued 677,998 shares of Common
Stock in connection with the closing in escrow of the acquisition of the stock
of BBG-COA, Inc. of which 219,633 shares are contingent upon certain future
events. This transaction is exempt from the registration requirements of the
Securities Act pursuant to Section 4(2).

Effective October 1997, the Company entered into an agreement whereby it
expects to be obligated to issue approximately 37,092 shares of Common Stock in
February 1998 in connection with the acquisition of First Eye Care, P.C. This
transaction will be exempt from the registration requirements of the Securities
Act pursuant to Section 4(2).

II-4
<PAGE> 252

ITEM 16. EXHIBITS AND FINANCIAL STATEMENT SCHEDULE

(a) Exhibits

<TABLE>
<CAPTION>
EXHIBIT
NUMBER EXHIBIT DESCRIPTION
------- -------------------
<C> <C> <S>
1.1******** -- Form of Underwriting Agreement.
2.1****** -- Agreement and Plan of Reorganization effective as of
September 1, 1997 among Florida Eye Center, Sever & Ramseur,
M.D., P.A., Raymond J. Sever, M.D. and Henry M. Ramseur,
M.D., and the Registrant.
2.2****** -- Asset Purchase Agreement effective as of September 1, 1997
among Thomas J. Pusateri, M.D., P.A., Thomas J. Pusateri,
M.D., and the Registrant.
2.3****** -- Asset Purchase Agreement effective as of September 1, 1997
among Leonard E. Cortelli, M.D., P.A., Leonard E. Cortelli,
M.D., and the Registrant.
2.4****** -- Optical Asset Purchase Agreement effective as of September
1, 1997 among Center Optical, Inc., Sever, Pusateri &
Cortelli, M.D., P.A., Henry M. Ramseur, M.D., Raymond J.
Sever, M.D., and the Registrant.
2.5****** -- Managed Care Organization Asset Purchase Agreement effective
as of September 1, 1997, among Managed Health Services,
Inc., Leonard E. Cortelli, M.D., Thomas J. Pusateri, M.D.,
Henry M. Ramseur, M.D., Raymond J. Sever, M.D., the
Registrant and Vision 21 Management Services, Inc.
2.6****** -- Agreement and Plan of Reorganization effective as of
September 1, 1997, among Retina Associates Southwest, P.C.,
Denis Carroll, M.D., Leonard Joffe, M.D., Reid Schindler,
M.D., and the Registrant.
2.7 -- Agreement and Plan of Reorganization dated May 1, 1997 by
and among Cochise Eye & Laser, P.C., Jeffrey S. Felter,
M.D., Thomas Rodcay, M.D., Vision 21 of Sierra Vista, Inc.
and Vision Twenty-One, Inc.
2.8 -- Asset Purchase Agreement dated June 1, 1997 among
Swagel-Wootton Eye Center, Ltd., Wendy Wootton, M.D., James
C. Wootton, M.D., Lorin Swagel, M.D., Daniel T. McGehee,
O.D. and Vision Twenty-One, Inc.
2.9 -- Optical Asset Purchase Agreement dated June 1, 1997 among
Aztec Optical Limited Partnership, Swagel-Wootton Eye
Center, Ltd., Wendy Wootton, M.D., James C. Wootton, M.D.,
Lorin Swagel, M.D., Daniel T. McGehee, O.D. and Vision
Twenty-One, Inc.
2.10********* -- Stock Purchase Agreement dated as of October 31, 1997 by and
among Vision Twenty-One, Inc., BBG-COA, Inc., MarketCorp
Venture Associates, L.P., New York State Business Venture
Partnership, Chase Venture Capital Associates, Michael P.
Block, Saree Block and James T. Roberto.
(Schedules (or similar attachments) have been omitted and
the Registrant agrees to furnish supplementally a copy of
any omitted schedule to the Securities and Exchange
Commission upon request.)
3.1** -- Amended and Restated Articles of Incorporation of Vision
Twenty-One, Inc.
3.2** -- Bylaws of Vision Twenty-One, Inc.
4.1** -- Specimen of Vision Twenty-One, Inc. Common Stock
Certificate.
4.2** -- Promissory Note dated June 1996 from Vision Twenty-One, Inc.
to Peter Fontaine.
4.3** -- Promissory Note dated November 1996 from Vision Twenty-One,
Inc. to Peter Fontaine.
4.4** -- Promissory Note dated December 1996 from Vision Twenty-One,
Inc. to Peter Fontaine.
4.5** -- Note Purchase Agreement for 10% Senior Subordinated Notes
Due December 19, 1999 (Detachable Warrants Exchangeable Into
Common Stock) dated December 20, 1996, by and between Vision
Twenty-One, Inc. and certain purchasers.
</TABLE>

II-5
<PAGE> 253

<TABLE>
<CAPTION>
EXHIBIT
NUMBER EXHIBIT DESCRIPTION
------- -------------------
<C> <C> <S>
4.6** -- Amendment No. 1 dated April 18, 1997, to that certain Note
Purchase Agreement dated December 20, 1996, by and between
Vision Twenty-One, Inc. and certain purchasers.
4.7** -- Note Purchase Agreement for 10% Senior Subordinated Series
1997 Notes Due December 19, 1999 (Detachable Warrants
Exchangeable Into Common Stock) dated February 28, 1997
between Vision Twenty-One, Inc. and Piper Jaffray Healthcare
Fund II Limited Partnership.
4.8***** -- Amended and Restated Note and Warrant Purchase Agreement
dated June 1997 and First Amendment to Amended and Restated
Note and Warrant Purchase Agreement dated August 1997
between Vision Twenty-One, Inc. and Prudential Securities
Group.
4.9******* -- Credit facility commitment letter dated October 10, 1997
between Prudential Securities Credit Corporation and Vision
Twenty-One, Inc.
4.10 -- Note Purchase Agreement dated October 1997 between Vision
Twenty-One, Inc. and Prudential Securities Credit
Corporation.
(The Company is not filing any instrument with respect to
long-term debt that does not exceed 10% of the total assets
of the Company and the Company agrees to furnish a copy of
such instrument to the Commission upon request.)
5.1 -- Opinion of Shumaker, Loop & Kendrick, LLP as to the Common
Stock being registered.
10.1** -- Employment Agreement dated October 1, 1996 between Vision
Twenty-One, Inc. and Theodore N. Gillette.
10.2** -- Employment Agreement dated October 1, 1996 between Vision
Twenty-One, Inc. and Richard Sanchez.
10.3** -- Employment Agreement dated September 1, 1996 between Vision
Twenty-One, Inc. and Richard T. Welch.
10.4** -- Services Agreement dated September 9, 1996 between Vision
Twenty-One, Inc. and Dr. Richard L. Lindstrom, M.D.
10.5** -- Vision Twenty-One, Inc. 1996 Stock Incentive Plan.
10.6** -- Vision Twenty-One, Inc. Affiliated Professionals Stock Plan.
10.7** -- Agreement dated May 10, 1996 between Vision Twenty-One, Inc.
and Bruce S. Maller.
10.8** -- Advisory Agreement dated October 20, 1996 between Vision
Twenty-One, Inc. and Bruce S. Maller.
10.9** -- Services Agreement dated March 10, 1996 between Vision
Twenty-One, Inc. and The BSM Consulting Group.
10.10** -- Subscription Agreement dated June 4, 1996 between Vision
Twenty-One, Inc. and Peter Fontaine.
10.11** -- Promissory Note dated June 1996 from Vision Twenty-One, Inc.
to Peter Fontaine, filed as Exhibit 4.2 to this Registration
Statement and incorporated herein by reference.
10.12** -- Promissory Note dated November 1996 from Vision Twenty-One,
Inc. to Peter Fontaine, filed as Exhibit 4.3 to this
Registration Statement and incorporated herein by reference.
10.13** -- Promissory Note dated December 1996 from Vision Twenty-One,
Inc. to Peter Fontaine filed as Exhibit 4.4 to this
Registration Statement and incorporated herein by reference.
10.14** -- Note Purchase Agreement for 10% Senior Subordinated Notes
Due December 19, 1999 (Detachable Warrants Exchangeable Into
Common Stock), dated December 20, 1996, by and between
Vision Twenty-One, Inc. and certain purchasers filed as
Exhibit 4.5 to this Registration Statement and incorporated
herein by reference.
</TABLE>

II-6
<PAGE> 254
<TABLE>
<CAPTION>
EXHIBIT
NUMBER EXHIBIT DESCRIPTION
------- -------------------
<C> <C> <S>
10.15** -- Amendment No. 1 dated April 18, 1997, to that certain Note
Purchase Agreement dated December 20, 1996, by and between
Vision Twenty-One, Inc. and certain purchasers filed as
Exhibit 4.6 to this Registration Statement and incorporated
herein by reference.
10.16** -- Note Purchase Agreement for 10% Senior Subordinated Series
1997 Notes Due December 19, 1999 (Detachable Warrants
Exchangeable Into Common Stock), by and between Vision
Twenty-One, Inc. and Piper Jaffray Healthcare Fund II
Limited Partnership, filed as Exhibit 4.7 to this
Registration Statement and incorporated herein by reference.
10.17***** -- Amended and Restated Note and Warrant Purchase Agreement
dated June 1997 and First Amendment to Amended and Restated
Note and Warrant Purchase Agreement dated August 1997
between Vision Twenty-One, Inc. and Prudential Securities
Group, Inc. filed as Exhibit 4.8 to this Registration
Statement and incorporated herein by reference.
10.18** -- Form of Indemnification Agreement.
10.19+*** -- Ancillary Provider Participation Agreement and Provider
Amendment among Humana Medical Plan, Inc., Humana Health
Plan of Florida, Inc., Humana Health Insurance of Florida,
Inc., Humana Insurance Company and Vision 21.
10.20+*** -- Asset Purchase Agreement dated December 1, 1996, by and
among Gillette & Associates, #6965, P.A., Theodore N.
Gillette, O.D., Mark Sarno, O.D. and Mark Beiler, O.D. and
Vision Twenty-One, Inc.
10.21** -- Subordinated Promissory Note dated December 1, 1996, from
Vision Twenty-One, Inc. to Gillette & Associates, #6965,
P.A.
10.22*** -- Business Management Agreement dated December 1, 1996,
between Vision Twenty-One, Inc. and Gillette & Associates,
#6965, P.A.
10.23+**** -- Agreement and Plan of Reorganization dated December 1, 1996,
by and among Eye Institute of Southern Arizona, P.C.,
Jeffrey I. Katz, M.D. and Barry Kusman, M.D., Vision
Twenty-One, Inc. and Vision 21 of Southern Arizona, Inc.
10.24** -- Business Management Agreement dated December 1, 1996,
between Eye Institute of Southern Arizona, P.C. and
ExcelCare, P.C. (as assigned to Vision Twenty-One, Inc.)
10.25+*** -- Asset Purchase Agreement dated December 1, 1996, by and
among Lindstrom, Samuelson & Hardten Ophthalmology
Associates, P.A., Richard L. Lindstrom, M.D., Thomas W.
Samuelson, M.D. and David R. Hardten, M.D. and Vision
Twenty-One, Inc.
10.26** -- Subordinated Promissory Note dated December 1, 1996, from
Vision Twenty-One, Inc. to Lindstrom, Samuelson & Hardten
Ophthalmology Associates, P.A.
10.27** -- Business Management Agreement dated December 1, 1996,
between Vision Twenty-One, Inc. and Lindstrom, Samuelson &
Hardten Ophthalmology Associates, P.A.
10.42** -- Stock Purchase Agreement dated May 1997, between David R.
Hardten, M.D., Robert B. Kennedy, O.D., Thomas A. Knox,
Gregory W. Kraupa, O.D., John W. Lahr, O.D., Richard L.
Lindstrom, M.D., Jack W. Moore, Thomas W. Samuelson, M.D.
and Bradley D. Richter, O.D. and Vision Twenty-One, Inc.
10.43** -- Regional Services Agreement dated May 1997, between Vision
Twenty-One, Inc. and Richard L. Lindstrom, M.D.
10.47** -- Form of Contract Provider agreement.
10.48+*** -- Joint Venture Agreement dated May 1, 1996 by and between for
Eyes Managed Care, Inc. and Vision 21 Managed Eye Care of
Tampa Bay, Inc.
</TABLE>

II-7
<PAGE> 255

<TABLE>
<C> <C> <S>
10.49**** -- Amendment to Agreement and Plan of Reorganization dated July 31, 1997 by and among
Kuscat Investments, L.L.C., Ocusite-ASC, Inc., Jeffrey I. Katz, M.D. and Barry
Kusman, M.D., Vital Site, P.C., Vision Twenty-One, Inc., Vision 21 of Southern
Arizona, Inc., and the escrow agent.
10.50 -- Employment Agreement dated October 31, 1997 between Vision Twenty-One, Inc. and
Michael P. Block.
10.51******* -- Letter of Intent dated as of October 15, 1997 by and among Vision Twenty-One, Inc.,
BBG-COA, Inc., MarketCorp Venture Associates, L.P., New York State Business Venture
Partnership, Chase Venture Capital Associates, Michael P. Block, Saree Block and
James T. Roberto.
10.52******* -- Credit facility commitment letter dated October 10, 1997 between Prudential
Securities Credit Corporation and Vision Twenty-One, Inc. filed as Exhibit 4.9 to
this Registration Statement and incorporated herein by reference.
10.53 -- Note Purchase Agreement dated October 1997 between Vision Twenty-One, Inc. and
Prudential Securities Credit Corporation, filed as Exhibit 4.10 to this
Registration Statement and incorporated herein by reference.
10.54********* -- Stock Purchase Agreement effective October 31, 1997 by and among Vision Twenty-One,
Inc., BBG-COA, Inc., MarketCorp Venture Associates, L.P., New York State Business
Venture Partnership, Chase Venture Capital Associates, Michael P. Block, Saree
Block and James T. Roberto, filed as Exhibit 2.10 to this Registration Statement
and incorporated herein.
10.55 -- Letter Agreement of October 2, 1997 by and between Prudential Securities
Incorporated as exclusive agent for obtaining $50.0 million credit facility, and
Vision Twenty-One, Inc.
10.56 -- Letter Agreement of October 14, 1997 by and between Prudential Securities
Incorporated, as exclusive financial adviser in the Block Acquisition, and Vision
Twenty-One, Inc.
11******* -- Statement of Computation of Per Share Earnings.
21 -- List of the subsidiaries of Vision Twenty-One, Inc.
23.1 -- Consent of Shumaker, Loop & Kendrick, LLP (included in their opinion filed as
Exhibit 5.1).
23.2 -- Consent of Ernst & Young, LLP, independent certified public accountants.
23.3 -- Consent of Price Waterhouse LLP, independent certified public accountants.
24******* -- Power of Attorney (included on signature page).
27.1** -- Financial Data Schedule for year ended December 31, 1996 (for SEC Use Only).
27.2******* -- Financial Data Schedule for nine months ended September 30, 1997. (For SEC Use
Only).
</TABLE>

- ---------------

** Previously filed as an Exhibit with the same Exhibit Number
identification in the Company's Registration Statement on Form S-1
filed on June 13, 1997 (File No. 333-29213) and incorporated herein
by reference.

*** Previously filed as an Exhibit with the same Exhibit Number
identification in the Company's Amendment No. 1 to Registration
Statement on Form S-1 filed on July 23, 1997 and incorporated herein
by reference.
**** Previously filed as an Exhibit with the same Exhibit Number
identification in the Company's Amendment No. 3 to Registration
Statement on Form S-1 filed August 14, 1997 and incorporated herein
by reference.

***** Previously filed as an Exhibit with the same Exhibit Number
identification in the Company's Amendment No. 4 to Registration
Statement on Form S-1 filed on August 15, 1997 and incorporated
herein by reference.

****** Previously filed as an Exhibit with the same Exhibit Number
identification in the Company's Form 8-K dated September 30, 1997 and
incorporated herein by reference.

II-8
<PAGE> 256

******* Previously filed as an Exhibit with the same Exhibit Number
identification in the Company's Registration Statement on Form S-1
filed on October 30, 1997 and incorporated herein by reference.

******** Previously filed as an Exhibit with the same Exhibit Number
identification in the Company's Amendment No. 1 to Registration
Statement on Form S-1 filed on November 3, 1997 and incorporated
herein by reference.

********* Previously filed as an Exhibit with the same Exhibit Number
identification in the Company's Form 10-Q filed on November 14, 1997
and incorporated herein by reference.

+ Certain information contained in this exhibit has been granted
confidential treatment pursuant to Rule 406 promulgated under the
Securities Act of 1933, as amended, and such confidential
information has been omitted herefrom.

(b) Financial Statement Schedules:

SCHEDULE I -- VALUATION AND QUALIFYING ACCOUNTS

All other schedules are omitted because the required information is not
present or is not present in amounts sufficient to require submission of the
schedule or because the information required is included in the financial
statements or notes thereto or the schedule is not required or inapplicable
under the related instructions.

ITEM 17. UNDERTAKINGS

(a) The undersigned Registrant hereby undertakes to provide to the
underwriter at the closing specified in the underwriting agreement, certificates
in such denominations and registered in such names as required by the
underwriter to permit prompt delivery to each purchaser.

(b) Insofar as indemnification for liabilities arising under the Securities
Act may be permitted to directors, officers and controlling persons of the
Registrant pursuant to the foregoing provisions, or otherwise, the Registrant
has been advised that in the opinion of the Securities and Exchange Commission
such indemnification is against public policy as expressed in the Securities Act
and is, therefore, unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by the Registrant of expenses
incurred or paid by a director, officer or controlling person of the Registrant
in the successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the Registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Securities Act and will be governed by the final
adjudication of such issue.

(1) For purposes of determining any liability under the Securities Act
of 1933, the information omitted from the form of prospectus filed as part
of this registration statement in reliance upon Rule 430A and contained in
a form of prospectus filed by the Registrant pursuant to Rule 424(b)(1) or
(4) under the Securities Act shall be deemed to be part of this
registration statement as of the time it was declared effective.

(2) For purposes of determining any liability under the Securities Act
of 1933, each post-effective amendment that contains a form of prospectus
shall be deemed to be a new registration statement relating to the
securities offered therein, and the offering of such securities at that
time shall be deemed to be the initial bonafide offering thereof.

II-9
<PAGE> 257

SIGNATURES

Pursuant to the requirements of the Securities Act of 1933, the Company has
duly caused this Amendment No. 2 to the Registration Statement to be signed on
its behalf by the undersigned, thereunto duly authorized, in the City of Largo,
State of Florida on November 19, 1997.

VISION TWENTY-ONE, INC.

By: /s/ THEODORE N. GILLETTE
------------------------------------
Theodore N. Gillette
Chief Executive Officer
(The Principal Executive Officer)

By: /s/ RICHARD T. WELCH
------------------------------------
Richard T. Welch
Chief Financial Officer
(The Principal Financial and
Accounting Officer)

Pursuant to the requirements of the Securities Act of 1933, this Amendment
No. 2 to the Registration Statement has been signed by the following persons in
the capacities indicated on November 19, 1997.

<TABLE>
<CAPTION>
SIGNATURE TITLE
--------- -----
<C> <S>
/s/ THEODORE N. GILLETTE Chief Executive Officer
- --------------------------------------------------------
Theodore N. Gillette

/s/ RICHARD T. WELCH Chief Financial Officer
- --------------------------------------------------------
Richard T. Welch

* Director
- --------------------------------------------------------
Richard L. Sanchez

* Director
- --------------------------------------------------------
Peter Fontaine

* Director
- --------------------------------------------------------
Herbert U. Pegues II, M.D.

* Director
- --------------------------------------------------------
Bruce S. Maller

* Director
- --------------------------------------------------------
Richard L. Lindstrom, M.D.

* Director
- --------------------------------------------------------
Jeffrey Katz, M.D.

*By: /s/ THEODORE N. GILLETTE as attorneys in fact pursuant to the power
- -------------------------------------------------------- of attorney included in the Registration
Theodore N. Gillette Statement as originally filed on October 30,
1997.
*By: /s/ RICHARD T. WELCH
- --------------------------------------------------------
Richard T. Welch
</TABLE>

II-10
<PAGE> 258

REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS

We have audited the consolidated financial statements of Vision Twenty-One,
Inc. and Subsidiaries as of December 31, 1995 and 1996, and for each of the
three years in the period ended December 31, 1996, and have issued our report
thereon dated March 22, 1997, except for Note 11, as to which the date is July
29, 1997 (included elsewhere in this Registration Statement). Our audits also
included the financial schedule listed in Item 16(b) of this Registration
Statement. This schedule is the responsibility of the Company's management. Our
responsibility is to express an opinion based on our audits.

In our opinion, the financial statement schedule referred to above, when
considered in relation to the basic financial statements taken as a whole,
presents fairly in all material respects, the information set forth therein.

/s/ ERNST & YOUNG LLP

Tampa, Florida
July 29, 1997

S-1
<PAGE> 259

VISION TWENTY-ONE, INC. AND SUBSIDIARIES

SCHEDULE I -- VALUATION AND QUALIFYING ACCOUNTS

<TABLE>
<CAPTION>
ADDITIONS
BALANCE AT -----------------------
BEGINNING CHARGED TO CHARGED TO BALANCE AT
OF COSTS AND OTHER END OF
DESCRIPTION PERIOD EXPENSES ACCOUNTS DEDUCTIONS PERIOD
- ----------- ------------ ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C>
For the year ended December 31, 1994:
Deducted from asset accounts:
Allowance for doubtful accounts..... $ -- $ -- $ -- $ -- $ --
==== ==== ======== ==== ========
For the year ended December 31, 1995:
Deducted from asset accounts:
Allowance for doubtful accounts..... $ -- $ -- $ -- $ -- $ --
==== ==== ======== ==== ========
For the year ended December 31, 1996:
Deducted from asset accounts:
Allowance for doubtful accounts..... $ -- $ -- $685,000(1) $ -- $685,000
==== ==== ======== ==== ========
</TABLE>

- ---------------

(1) Amount represents allowance for doubtful accounts acquired in connection
with the December 1, 1996 acquisition of substantially all of the assets and
certain liabilities of 10 ophthalmology and optometry practices.

S-2
<PAGE> 260

EXHIBIT INDEX

<PAGE> 261

<TABLE>
<CAPTION>
EXHIBIT
NUMBER EXHIBIT DESCRIPTION
------- -------------------
<C> <C> <S>
4.5** -- Note Purchase Agreement for 10% Senior Subordinated Notes
Due December 19, 1999 (Detachable Warrants Exchangeable Into
Common Stock) dated December 20, 1996, by and between Vision
Twenty-One, Inc. and certain purchasers.
4.6** -- Amendment No. 1 dated April 18, 1997, to that certain Note
Purchase Agreement dated December 20, 1996, by and between
Vision Twenty-One, Inc. and certain purchasers.
4.7** -- Note Purchase Agreement for 10% Senior Subordinated Series
1997 Notes Due December 19, 1999 (Detachable Warrants
Exchangeable Into Common Stock) dated February 28, 1997
between Vision Twenty-One, Inc. and Piper Jaffray Healthcare
Fund II Limited Partnership.
4.8***** -- Amended and Restated Note and Warrant Purchase Agreement
dated June 1997 and First Amendment to Amended and Restated
Note and Warrant Purchase Agreement dated August 1997
between Vision Twenty-One, Inc. and Prudential Securities
Group.
4.9******* -- Credit facility commitment letter dated October 10, 1997
between Prudential Securities Credit Corporation and Vision
Twenty-One, Inc.
4.10 -- Note Purchase Agreement dated October 1997 between Vision
Twenty-One, Inc. and Prudential Securities Credit
Corporation.
(The Company is not filing any instrument with respect to
long-term debt that does not exceed 10% of the total assets
of the Company and the Company agrees to furnish a copy of
such instrument to the Commission upon request.)
5.1 -- Opinion of Shumaker, Loop & Kendrick, LLP as to the Common
Stock being registered.
10.1** -- Employment Agreement dated October 1, 1996 between Vision
Twenty-One, Inc. and Theodore N. Gillette.
10.2** -- Employment Agreement dated October 1, 1996 between Vision
Twenty-One, Inc. and Richard Sanchez.
10.3** -- Employment Agreement dated September 1, 1996 between Vision
Twenty-One, Inc. and Richard T. Welch.
10.4** -- Services Agreement dated September 9, 1996 between Vision
Twenty-One, Inc. and Dr. Richard L. Lindstrom, M.D.
10.5** -- Vision Twenty-One, Inc. 1996 Stock Incentive Plan.
10.6** -- Vision Twenty-One, Inc. Affiliated Professionals Stock Plan.
10.7** -- Agreement dated May 10, 1996 between Vision Twenty-One, Inc.
and Bruce S. Maller.
10.8** -- Advisory Agreement dated October 20, 1996 between Vision
Twenty-One, Inc. and Bruce S. Maller.
10.9** -- Services Agreement dated March 10, 1996 between Vision
Twenty-One, Inc. and The BSM Consulting Group.
10.10** -- Subscription Agreement dated June 4, 1996 between Vision
Twenty-One, Inc. and Peter Fontaine.
10.11** -- Promissory Note dated June 1996 from Vision Twenty-One, Inc.
to Peter Fontaine, filed as Exhibit 4.2 to this Registration
Statement and incorporated herein by reference.
10.12** -- Promissory Note dated November 1996 from Vision Twenty-One,
Inc. to Peter Fontaine, filed as Exhibit 4.3 to this
Registration Statement and incorporated herein by reference.
</TABLE>

<PAGE> 262
<TABLE>
<CAPTION>
EXHIBIT
NUMBER EXHIBIT DESCRIPTION
------- -------------------
<C> <C> <S>
10.13** -- Promissory Note dated December 1996 from Vision Twenty-One,
Inc. to Peter Fontaine filed as Exhibit 4.4 to this
Registration Statement and incorporated herein by reference.
10.14** -- Note Purchase Agreement for 10% Senior Subordinated Notes
Due December 19, 1999 (Detachable Warrants Exchangeable Into
Common Stock), dated December 20, 1996, by and between
Vision Twenty-One, Inc. and certain purchasers filed as
Exhibit 4.5 to this Registration Statement and incorporated
herein by reference.
10.15** -- Amendment No. 1 dated April 18, 1997, to that certain Note
Purchase Agreement dated December 20, 1996, by and between
Vision Twenty-One, Inc. and certain purchasers filed as
Exhibit 4.6 to this Registration Statement and incorporated
herein by reference.
10.16** -- Note Purchase Agreement for 10% Senior Subordinated Series
1997 Notes Due December 19, 1999 (Detachable Warrants
Exchangeable Into Common Stock), by and between Vision
Twenty-One, Inc. and Piper Jaffray Healthcare Fund II
Limited Partnership, filed as Exhibit 4.7 to this
Registration Statement and incorporated herein by reference.
10.17***** -- Amended and Restated Note and Warrant Purchase Agreement
dated June 1997 and First Amendment to Amended and Restated
Note and Warrant Purchase Agreement dated August 1997
between Vision Twenty-One, Inc. and Prudential Securities
Group, Inc. filed as Exhibit 4.8 to this Registration
Statement and incorporated herein by reference.
10.18** -- Form of Indemnification Agreement.
10.19+*** -- Ancillary Provider Participation Agreement and Provider
Amendment among Humana Medical Plan, Inc., Humana Health
Plan of Florida, Inc., Humana Health Insurance of Florida,
Inc., Humana Insurance Company and Vision 21.
10.20+*** -- Asset Purchase Agreement dated December 1, 1996, by and
among Gillette & Associates, #6965, P.A., Theodore N.
Gillette, O.D., Mark Sarno, O.D. and Mark Beiler, O.D. and
Vision Twenty-One, Inc.
10.21** -- Subordinated Promissory Note dated December 1, 1996, from
Vision Twenty-One, Inc. to Gillette & Associates, #6965,
P.A.
10.22*** -- Business Management Agreement dated December 1, 1996,
between Vision Twenty-One, Inc. and Gillette & Associates,
#6965, P.A.
10.23+**** -- Agreement and Plan of Reorganization dated December 1, 1996,
by and among Eye Institute of Southern Arizona, P.C.,
Jeffrey I. Katz, M.D. and Barry Kusman, M.D., Vision
Twenty-One, Inc. and Vision 21 of Southern Arizona, Inc.
10.24** -- Business Management Agreement dated December 1, 1996,
between Eye Institute of Southern Arizona, P.C. and
ExcelCare, P.C. (as assigned to Vision Twenty-One, Inc.)
10.25+*** -- Asset Purchase Agreement dated December 1, 1996, by and
among Lindstrom, Samuelson & Hardten Ophthalmology
Associates, P.A., Richard L. Lindstrom, M.D., Thomas W.
Samuelson, M.D. and David R. Hardten, M.D. and Vision
Twenty-One, Inc.
10.26** -- Subordinated Promissory Note dated December 1, 1996, from
Vision Twenty-One, Inc. to Lindstrom, Samuelson & Hardten
Ophthalmology Associates, P.A.
10.27** -- Business Management Agreement dated December 1, 1996,
between Vision Twenty-One, Inc. and Lindstrom, Samuelson &
Hardten Ophthalmology Associates, P.A.
</TABLE>
<PAGE> 263

<TABLE>
<CAPTION>
EXHIBIT
NUMBER EXHIBIT DESCRIPTION
------- -------------------
<C> <C> <S>
10.42** -- Stock Purchase Agreement dated May 1997, between David R.
Hardten, M.D., Robert B. Kennedy, O.D., Thomas A. Knox,
Gregory W. Kraupa, O.D., John W. Lahr, O.D., Richard L.
Lindstrom, M.D., Jack W. Moore, Thomas W. Samuelson, M.D.
and Bradley D. Richter, O.D. and Vision Twenty-One, Inc.
10.43** -- Regional Services Agreement dated May 1997, between Vision
Twenty-One, Inc. and Richard L. Lindstrom, M.D.
10.47** -- Form of Contract Provider agreement.
10.48+*** -- Joint Venture Agreement dated May 1, 1996 by and between for
Eyes Managed Care, Inc. and Vision 21 Managed Eye Care of
Tampa Bay, Inc.
10.49**** -- Amendment to Agreement and Plan of Reorganization dated July
31, 1997 by and among Kuscat Investments, L.L.C.,
Ocusite-ASC, Inc., Jeffrey I. Katz, M.D. and Barry Kusman,
M.D., Vital Site, P.C., Vision Twenty-One, Inc., Vision 21
of Southern Arizona, Inc., and the escrow agent.
10.50 -- Employment Agreement dated October 31, 1997 between Vision
Twenty-One, Inc. and Michael P. Block.
10.51******* -- Letter of Intent dated as of October 15, 1997 by and among
Vision Twenty-One, Inc., BBG-COA, Inc., MarketCorp Venture
Associates, L.P., New York State Business Venture
Partnership, Chase Venture Capital Associates, Michael P.
Block, Saree Block and James T. Roberto.
10.52******* -- Credit facility commitment letter dated October 10, 1997
between Prudential Securities Credit Corporation and Vision
Twenty-One, Inc. filed as Exhibit 4.9 to this Registration
Statement and incorporated herein by reference.
10.53 -- Note Purchase Agreement dated October 1997 between Vision
Twenty-One, Inc. and Prudential Securities Credit
Corporation, filed as Exhibit 4.10 to this Registration
Statement and incorporated herein by reference.
10.54********* -- Stock Purchase Agreement effective October 31, 1997 by and
among Vision Twenty-One, Inc., BBG-COA, Inc., MarketCorp
Venture Associates, L.P., New York State Business Venture
Partnership, Chase Venture Capital Associates, Michael P.
Block, Saree Block and James T. Roberto, filed as Exhibit
2.10 to this Registration Statement and incorporated herein.
10.55 -- Letter Agreement of October 2, 1997 by and between
Prudential Securities Incorporated as exclusive agent for
obtaining $50.0 million credit facility, and Vision
Twenty-One, Inc.
10.56 -- Letter Agreement of October 14, 1997 by and between
Prudential Securities Incorporated, as exclusive financial
adviser in the Block Acquisition, and Vision Twenty-One,
Inc.
11******* -- Statement of Computation of Per Share Earnings.
21 -- List of the subsidiaries of Vision Twenty-One, Inc.
23.1 -- Consent of Shumaker, Loop & Kendrick, LLP (included in their
opinion filed as Exhibit 5.1).
23.2 -- Consent of Ernst & Young, LLP, independent certified public
accountants.
23.3 -- Consent of Price Waterhouse LLP, independent certified
public accountants.
</TABLE>

<PAGE> 264
<TABLE>
<CAPTION>
EXHIBIT
NUMBER EXHIBIT DESCRIPTION
------- -------------------
<C> <C> <S>
24******* -- Power of Attorney (included on signature page).
27.1** -- Financial Data Schedule for year ended December 31, 1996
(for SEC Use Only).
27.2******* -- Financial Data Schedule for nine months ended September 30,
1997. (For SEC Use Only).
</TABLE>

- ---------------

****** Previously filed as an Exhibit with the same Exhibit Number
identification in the Company's Form 8-K dated September 30, 1997 and
incorporated herein by reference.

******* Previously filed as an Exhibit with the same Exhibit Number
identification in the Company's Registration Statement on Form S-1
filed on October 30, 1997 and incorporated herein by reference.

********* Previously filed as an Exhibit with the same Exhibit Number
identification in the Company's Form 10-Q filed on November 14, 1997
and incorporated herein by reference.

<PAGE> 1
EXHIBIT 2.7

AGREEMENT AND PLAN OF REORGANIZATION

This Agreement and Plan of Reorganization (this "Agreement"), dated
effective as of May 1, 1997, is by and among COCHISE EYE & LASER, P.C., an
Arizona professional corporation, (the "Company"), JEFFREY S. FELTER, M.D. and
THOMAS E. RODCAY, M.D. (together, the "Physician"), VISION TWENTY-ONE, INC., a
Florida corporation ("Vision 21"), and VISION 21 OF SIERRA VISTA, INC., a
Florida corporation (the "Subsidiary").

R E C I T A L S

A. Physician is a physician licensed to practice medicine in the State
(as defined herein) and currently conducts an ophthalmology practice through the
Company and through optometrist employees currently conducts an optometry
practice through the Company.

B. Physician owns all of the issued and outstanding shares of capital
stock of the Company.

C. The Company and Vision 21 desire to effect a business combination
and merger of the Company with and into Vision 21's wholly-owned subsidiary, the
Subsidiary, upon the terms and subject to the satisfaction of the conditions
precedent contained herein (the "Merger").

D. It is intended that for federal income tax purposes the Merger shall
qualify as a reorganization within the meaning of Section 368(a)(1)(A) and
Section 368(a)(2)(D) of the Internal Revenue Code of 1986, as amended (the
"Code").

E. The Subsidiary cannot acquire certain of the Company's assets
because of laws prohibiting general business corporations from engaging in the
practice of medicine or optometry, or exercising control over physicians
practicing medicine or optometrists practicing optometry, and accordingly, the
Company, Vision 21 and the Subsidiary desire that the Company divest itself of
such assets prior to the Merger.

F. Prior to the Merger, the Company intends to form a new professional
corporation ("New P.C.") to which it intends to transfer its medical and
optometry business and all of its Medical Assets (as defined herein) and all of
the Excluded Liabilities (as defined herein) in exchange for all of New P.C.'s
capital stock and to distribute such stock to Physician.

G. New P.C. intends to employ the Physician and enter into a Business
Management Agreement (as defined herein) with the Company immediately prior to
the Merger; and

H. As a result of the Merger, the Surviving Corporation (as defined
herein) will acquire the medical and optometry practice management business and
all of the Nonmedical

<PAGE> 2

Assets (as herein defined) of the Company associated with such business to the
extent permitted by law and assume all of Company's obligations under the
Business Management Agreement.

NOW, THEREFORE, in consideration of the mutual representations,
warranties and covenants contained herein, and on the terms and subject to the
conditions herein set forth, the parties hereto hereby agree as follows:

1. DEFINITIONS. As used in this Agreement, the following terms shall
have the meanings set forth below:

1.1. AAA. The term "AAA" shall mean the American Arbitration
Association.

1.2. Accountants. The term "Accountants" shall mean the accounting
firm for Vision 21.

1.3. Accounts Receivable. The term "Accounts Receivable" shall have
the meaning set forth in Section 3.39.

1.4. Acquisition Proposal. The term "Acquisition Proposal" shall
have the meaning set forth in Section 3.34.

1.5. Affiliate. The term "Affiliate" with respect to any person or
entity shall mean a person or entity that directly or indirectly through one or
more intermediaries, controls, or is controlled by or is under common control
with, such person or entity.

1.6. Applicable Laws. The term "Applicable Laws" shall have the
meaning set forth in Section 20.5.

1.7. Audit. The term "Audit" shall have the meaning set forth in
Section 3.9.

1.8. Business Management Agreement. The term "Business Management
Agreement" shall mean the Business Management Agreement entered into between the
Company and New P.C. prior to the Closing.

1.9. Cash Compensation. The term "Cash Compensation" shall have the
meaning set forth in Section 3.11(a).

1.10. Claim Notice. The term "Claim Notice" shall have the meaning
set forth in Section 15.3(a).

1.11. Closing. The term "Closing" shall mean the consummation of the
transactions contemplated by this Agreement.

<PAGE> 3

1.12. Closing Date. The term "Closing Date" shall mean May 30, 1997
or such other date as mutually agreed upon by the parties.

1.13. Code. The term "Code" shall mean the Internal Revenue Code of
1986, as amended.

1.14. Commitments. The term "Commitments" shall have the meaning set
forth in Section 3.15(a).

1.15. Common Stock. The term "Common Stock" or "Vision 21 Common
Stock" shall mean the common stock, par value $.01 per share, of Vision 21.

1.16. Company Balance Sheet. The term "Company Balance Sheet" shall
have the meaning set forth in Section 3.9.

1.17. Company Balance Sheet Date. The term "Company Balance Sheet
Date" shall have the meaning set forth in Section 3.9.

1.18. Company Common Stock. The term "Company Common Stock" shall
mean the common stock, par value $1.00 per share, of the Company.

1.19. Compensation Plans. The term "Compensation Plans" shall have
the meaning set forth in Section 3.11(b)(ii).

1.20. Competing Management Business. The term "Competing Management
Business" shall have the meaning set forth in Section 18.1(b).

1.21. Competitor. The term "Competitor" shall mean any person or
entity which, individually or jointly with others, whether for its own account
or for that of any other person or entity, owns, or holds any ownership or
voting interest in any person or entity engaged in, the practice of
ophthalmology, the practice of optometry, the operation of out patient eye
surgical facilities, the operation of refractive surgery centers and the
operation of optical shops; provided, however, that such term shall not include
any Affiliate of Vision 21 or any entity with which Vision 21 has an agreement
similar to the Business Management Agreement in effect.

1.22. Confidential Information Memorandum. The term "Confidential
Information Memorandum" shall mean that certain disclosure memorandum
distributed by Vision 21 to the Company and Physician dated as of December 1996,
as supplemented on February 28, 1997, and any further amendments or revisions
thereto.

1.23. Controlled Group. The term "Controlled Group" shall have the
meaning set forth in Section 3.12(g).

<PAGE> 4

1.24. Corporation Law. The term "Corporation Law" shall mean the
statutes, regulations and laws governing business corporations and professional
corporations in the State.

1.25. Damages. The term "Damages" shall have the meaning set forth
in Section 16.1.

1.26. Effective Time. The term "Effective Time" shall have the
meaning set forth in Section 2.3.

1.27. Election Period. The term "Election Period" shall have the
meaning set forth in Section 15.3(a).

1.28. Employee Benefit Plans. The term "Employee Benefit Plans"
shall have the meaning set forth in Section 3.12(a).

1.29. Employee Policies and Procedures. The term "Employee Policies
and Procedures" shall have the meaning set forth in Section 3.11(d).

1.30. Employment Agreements. The term "Employment Agreements" shall
have the meaning set forth in Section 3.11(c).

1.31. Environmental Laws. The term "Environmental Laws" shall have
the meaning set forth in Section 3.27(a).

1.32. ERISA. The term "ERISA" shall mean the Employee Retirement
Income Security Act of 1974, as amended.

1.33. Exchange Act. The term "Exchange Act" shall mean the
Securities Exchange Act of 1934, as amended.

1.34. Excluded Liabilities. The term "Excluded Liabilities" shall
mean (i) any and all obligations and liabilities in connection with accrued
shareholder expenses, long-term debt associated with previous liabilities of the
Company and contributions to retirement plans; and (ii) any and all obligations
or liabilities relating to any fees or expenses of Seller's or Physician's
counsel, accountants or other experts incident to the negotiation and
preparation of any of the documents contemplated herein and consummation of the
transactions contemplated thereby.

1.35. FBCA. The term "FBCA" shall mean the Florida Business
Corporation Act.

1.36. Financial Statements. The term "Financial Statements" shall
have the meaning set forth in Section 3.9.

<PAGE> 5

1.37. GAAP. The term "GAAP" shall mean generally accepted accounting
principles, applied on a consistent basis with prior periods, set forth in the
opinions and pronouncements of the Accounting Principles Board of the American
Institute of Certified Public Accountants and statements and pronouncements of
the Financial Accounting Standards Board or in such other statements by such
other entity or other practices and procedures as may be approved by a
significant segment of the accounting profession, which are applicable to the
circumstances as of the date of the determination.

1.38. Governmental Authority. The term "Governmental Authority"
shall mean any national, state, provincial, local or tribunal governmental,
judicial or administrative authority or agency.

1.39. Indemnified Party. The term "Indemnified Party" shall have the
meaning set forth in Section 15.3(a).

1.40. Indemnifying Party. The term "Indemnifying Party" shall have
the meaning set forth in Section 15.3(a).

1.41. Indemnity Notice. The term "Indemnity Notice" shall have the
meaning set forth in Section 15.3(d).

1.42. Initial Public Offering. The term "Initial Public Offering"
shall mean the potential initial underwritten public offering of Vision 21
Common Stock contemplated by Vision 21.

1.43. Insurance Policies. The term "Insurance Policies" shall have
the meaning set forth in Section 3.16.

1.44. IRS. The term "IRS" shall mean the Internal Revenue Service.

1.45. Management Business. The term "Management Business" shall have
the meaning set forth in Section 18.1(b)(i).

1.46. Material Adverse Effect. The term "Material Adverse Effect"
shall mean a material adverse effect on the Nonmedical Assets and the Company's
business, operations, condition (financial or otherwise) or results of
operations, taken as a whole, considering all relevant facts and circumstances.

1.47. Medical Assets. The term "Medical Assets" shall mean the
Company's right, title and interest in any assets as set forth on Schedule 1.47A
which shall also be deemed to include (a) life insurance policies covering the
life of any employee of the Company, and (b) personal effects listed on Schedule
1.47B.

<PAGE> 6

1.48. Merger. The term "Merger" shall have the meaning set forth in
the Recitals hereto.

1.49. Merger Consideration. The term "Merger Consideration" shall
mean the consideration set forth in Sections 2.8, 2.9 and 2.11 of this
Agreement.

1.50. 1997 Acquisitions. The term "1997 Acquisitions" shall mean the
acquisitions by Vision 21 of third parties which were completed in March 1997.

1.51. Nonmedical Assets. The term "Nonmedical Assets" shall mean all
of the assets of the Company except for the Medical Assets.

1.52. Optometrist Employee. The term "Optometrist Employee" shall
mean those licensed optometrists who are employees of the Company, but are not
shareholders.

1.53. Optometrist Employment Agreement. The term "Optometrist
Employment Agreement" shall mean the Optometrist Employment Agreement to be
executed between any Optometrist Employee and New P.C.

1.54. Payors. The term "Payors" shall have the meaning set forth in
Section 3.30.

1.55. Permitted Encumbrances. The term "Permitted Encumbrances"
shall have the meaning set forth in Section 3.14(b).

1.56. Physician Employee. The term "Physician Employee" shall mean
those licensed physicians who are employees of the Company, but are not
shareholders.

1.57. Physician Employment Agreement. The term "Physician Employment
Agreement" shall mean the Physician Employment Agreement to be executed between
Physician and New P.C., and between any Physician Employee and New P.C.

1.58. Practice. The term "Practice" shall mean the ophthalmology,
optometry and all other vision related health-care practices conducted from time
to time by the Company prior to and on the Closing Date and by the New P.C.
after the Closing Date.

1.59. Professional Employee. The term "Professional Employee" shall
mean any Physician Employee or Optometrist Employee.

1.60. Proposed Merger Consideration Adjustment. The term "Proposed
Merger Consideration Adjustment" shall have the meaning set forth in Section
2.11(b).

1.61. Proprietary Rights. The term "Proprietary Rights" shall have
the meaning set forth in Section 3.17.

<PAGE> 7

1.62. Recent Acquisitions. The term "Recent Acquisitions" shall mean
the acquisitions by Vision 21 of third parties which were completed in December
1996 and the 1997 Acquisitions.

1.63. Registration Statement. The term "Registration Statement"
shall have the meaning set forth in Section 10.1.

1.64. Reorganization. The term "Reorganization" shall have the
meaning set forth in Section 14.3(a).

1.65. SEC. The term "SEC" shall mean the Securities and Exchange
Commission.

1.66. Securities. The term "Securities" shall mean the shares of
Vision 21 Common Stock to be delivered to Physician at the Closing.

1.67. Securities Act. The term "Securities Act" shall mean the
Securities Act of 1933, as amended.

1.68. State. The term "State" shall mean the State in which the
Company is incorporated.

1.69. Surviving Corporation. The term "Surviving Corporation" shall
have the meaning set forth in Section 2.1.

1.70. Tax Returns. The term "Tax Returns" shall have the meaning set
forth in Section 3.18(a).

1.71. Third Party Claim. The term "Third Party Claim" shall have the
meaning set forth in Section 15.3(a).

1.72. Vision 21 Financial Statements. The term "Vision 21 Financial
Statements" shall have the meaning set forth in Section 5.10.

2. THE MERGER.

2.1. The Merger. Subject to the terms and conditions of this
Agreement, at the Effective Time, the Company shall be merged with and into the
Subsidiary in accordance with this Agreement and the separate corporate
existence of the Company shall thereupon cease. The Subsidiary shall be the
surviving corporation in the Merger (in such capacity, hereinafter referred to
as the "Surviving Corporation") and shall continue to be governed by the laws of
the State of Florida, and the separate corporate existence of the Subsidiary
with all its rights, privileges, powers, immunities, purposes and franchises
shall continue unaffected by the Merger,

<PAGE> 8

except as set forth herein. The Merger shall have the effects specified in the
FBCA and the Corporation Law.

2.2. The Closing. The Closing shall take place on the Closing Date
at the offices of Shumaker, Loop & Kendrick, 101 E. Kennedy Boulevard, Suite
2800, Tampa, Florida 33602 or at such other location in the State as the parties
shall mutually agree.

2.3. Effective Time. If all the conditions precedent to the Merger
set forth in this Agreement shall have been fulfilled or waived in accordance
herewith and this Agreement shall not have been terminated in accordance with
the terms set forth herein, the parties hereto shall cause to be properly
executed and filed on the Closing Date, a Certificate of Merger meeting the
requirements of the FBCA and the Corporation Law. The Certificate of Merger
shall be filed with the Secretary of State of the State of Florida and of the
State in accordance with the FBCA and the Corporation Law and the Merger shall
become effective on the Closing Date, to be designated in such filings as the
effective time of the Merger (the "Effective Time").

2.4. Articles of Incorporation of Surviving Corporation. Effective
at the Effective Time, the Articles of Incorporation of the Subsidiary shall be
the Articles of Incorporation of the Surviving Corporation unless and until duly
amended in accordance with its terms.

2.5. Bylaws of Surviving Corporation. The Bylaws of the Subsidiary
in effect immediately prior to the Effective Time shall be the Bylaws of the
Surviving Corporation, unless and until duly amended in accordance with their
terms.

2.6. Directors of the Surviving Corporation. The persons who are
directors of the Subsidiary immediately prior to the Effective Time shall, from
and after the Effective Time, be the directors of the Surviving Corporation
until their successors have been elected or appointed and qualified or until
their earlier death, resignation or removal in accordance with the Surviving
Corporation's Articles of Incorporation and Bylaws.

2.7. Officers of the Surviving Corporation. The persons who are
officers of the Subsidiary immediately prior to the Effective Time shall, from
and after the Effective Time, be the officers of the Surviving Corporation and
shall hold their same respective offices until their successors have been duly
elected or appointed and qualified or until their earlier death, resignation or
removal.

2.8. Conversion of Company Common Stock. The manner of converting
shares of Company Common Stock in the Merger shall be as follows:

a. As a result of the Merger and without any action on the part
of the holder thereof, all shares of Company Common Stock issued and outstanding
at the Effective Time shall cease to exist, and each holder of a certificate
representing any such shares of Company Common Stock shall thereafter cease to
have any rights with respect to such shares

<PAGE> 9

of Company Common Stock, except the right to receive upon the surrender of such
certificate, on the Closing Date, validly issued, fully paid and nonassessable
shares of Vision 21 Common Stock determined in accordance with the provisions of
Exhibit 2.8(a) attached hereto.

b. Each share of Company Common Stock held in the Company's
treasury at the Effective Time, by virtue of the Merger, shall cease to be
outstanding and shall be cancelled and retired without payment of any
consideration therefor and shall cease to exist.

c. At the Effective Time, each share of the Subsidiary's common
stock issued and outstanding as of the Effective Time shall, by virtue of the
Merger and without any action on the part of the holder thereto, continue
unchanged and remain outstanding as a validly issued, fully paid, nonassessable
share of the Subsidiary's common stock.

2.9. Exchange of Certificates Representing Shares of Company Common
Stock.

a. On the Closing Date (i) the Physician, as the holder of a
certificate or certificates representing shares of Company Common Stock, upon
surrender of such certificate or certificates, shall receive, as part of the
Merger Consideration, the number of shares of Vision 21 Common Stock determined
in accordance with the provisions of Exhibit 2.8(a) attached hereto; and (ii)
until the certificate or certificates representing Company Common Stock have
been surrendered by the Physician and replaced by a certificate or certificates
representing Vision 21 Common Stock, the certificate or certificates
representing Company Common Stock shall, for all purposes be deemed to evidence
ownership of the number of shares of Vision 21 Common Stock determined in
accordance with the provisions of Exhibit 2.8(a) attached hereto. All shares of
Vision 21 Common Stock issuable to the Physician in the Merger shall be deemed
for all purposes to have been issued by Vision 21 at the Effective Time,
although the Merger Consideration shall not actually be paid by Vision 21 to the
Physician until the Closing Date.

b. The Physician shall deliver to Vision 21 at Closing the
certificate or certificates representing Company Common Stock owned by him, duly
endorsed in blank by the Physician, or accompanied by duly endorsed stock powers
in blank, and with all necessary transfer tax and other revenue stamps, acquired
at the Physician's expense, affixed and cancelled. The Physician agrees to cure
any deficiencies with respect to the endorsement of the certificates or other
documents of conveyance with respect to such Company Common Stock or with
respect to the stock powers accompanying any Company Common Stock. Upon such a
delivery, the Physician shall receive in exchange therefor, a certificate
representing that number of shares of Vision 21 Common Stock that the Physician
is entitled to receive pursuant to Section 2.8 hereof.

<PAGE> 10

2.10. Fractional Shares. Notwithstanding any other provision herein,
no fractional shares of Vision 21 Common Stock will be issued. Fractional shares
shall be rounded up to the nearest whole number of shares.

2.11. Merger Consideration Adjustments. (a) The Merger Consideration
shall be subject to adjustment to the extent that Current Assets (as defined
herein) or Current Liabilities Assumed (as defined herein) materially differ
from the amounts customarily arising in the ordinary course of business of the
Company as of April 30, 1997. The term "Current Assets" shall mean petty cash,
Accounts Receivable, prepaid expenses, Inventory, supplies and other current
assets (excluding cash in banks, certificates of deposit, other cash
equivalents, current portion of capital leases and prepaid Income Taxes). The
term "Current Liabilities Assumed" shall mean the balances (on an accrual basis)
as of April 30, 1997 of trade accounts payable, accrued payroll, accrued payroll
taxes, accrued benefits, and other current liabilities (excluding notes payable,
current portion of capital leases and long-term debt and income and franchise
taxes and accrued shareholder expenses). The Merger Consideration shall be
increased or reduced to reflect the difference between the Current Assets and
Current Liabilities and the customary amounts referred to hereinabove. The
adjustment shall be settled in cash (which shall be set-off from moneys due New
P.C. pursuant to the Business Management Agreement) or Vision 21 Common Stock at
Vision 21's option. The parties also agree that to the extent the adjustments
materially impact the goodwill created by the transaction, there shall be an
adjustment for the related impact upon net income created by the change in
amortization of such goodwill and the Merger Consideration shall be increased or
reduced to reflect the impact on net income, settled in cash or Vision 21 Common
Stock at Vision 21's option.

(b) Within sixty (60) days following the Closing Date, Vision
21 shall present to the Physician its Merger Consideration Adjustment (the
"Proposed Merger Consideration Adjustment") calculated in accordance with
Section 2.11(a) hereof. The Physician shall, within thirty (30) days after the
delivery by Vision 21 of the Proposed Merger Consideration Adjustment, complete
his review thereof. In the event that the Physician believes that the Proposed
Merger Consideration Adjustment has not been prepared on the basis set forth in
Section 2.11(a) or otherwise contests any item set forth therein, the Physician
shall, on or before the last day of such 30 day period, so object to Vision 21
in writing, setting forth a specific description of the nature of the objection
and the corresponding adjustments the Physician believes should be made. If no
objection is received by Vision 21 on or before the last day of such 30 day
period, then the Proposed Merger Consideration Adjustment delivered by Vision 21
shall be final. If an objection has been made and Vision 21 and the Physician
are unable to resolve all of their disagreements with respect to the proposed
adjustments within 15 days following the delivery of the Physician's objection,
the dispute shall be submitted to arbitration as provided in Section 19.1 except
that the arbitrator shall be instructed to deliver his determination of the
dispute to the parties no later than 30 days after the arbitration hearing.
Vision 21 shall provide to the Physician and his accountants full access to all
relevant books, records and work papers utilized in preparing the Proposed
Merger Consideration Adjustment.

<PAGE> 11

2.12. Subsequent Actions. If, at any time after the Effective Time,
the Surviving Corporation shall determine or be advised that any deeds, bills of
sale, assignments, assurances or any other actions or things are necessary or
desirable to vest, perfect or confirm of record or otherwise in the Surviving
Corporation its right, title or interest in, to or under any of the rights,
properties or assets of the Company acquired or to be acquired by the Surviving
Corporation as a result of, or in connection with, the Merger or otherwise to
carry out this Agreement, and to effect the cancellation of all outstanding
shares of Company Common Stock in return for the consideration set forth in this
Agreement, the officers and directors of the Surviving Corporation shall, at the
sole cost and expense of the Surviving Corporation, be authorized to execute and
deliver, in the name and on behalf of the Company, such deeds, bills of sale,
assignments and assurances, and to take and do, in the name and on behalf of the
Company, all such other actions and things as may be necessary or desirable to
vest, perfect or confirm any and all right, title and interest in, to and under
such rights, properties or assets in the Surviving Corporation or otherwise to
carry out this Agreement.

3. REPRESENTATIONS AND WARRANTIES OF THE COMPANY AND THE PHYSICIAN. The
Company and the Physician, jointly and severally, represent and warrant to
Vision 21 and the Subsidiary that the following are true and correct as of the
date hereof, and shall be true and correct through the Closing Date as if made
on that date; when used in this Section 3, the term "best knowledge" shall mean
in the case of the Company the best knowledge of those individuals listed on
Schedule 3:

3.1. Organization and Good Standing; Qualification. The Company is a
professional corporation duly organized, validly existing and in good standing
under the laws of the State, with all requisite corporate power and authority to
carry on the business in which it is engaged, to own the properties it owns, to
execute and deliver this Agreement and to consummate the transactions
contemplated hereby, but it is acknowledged and understood by the Parties that
upon consummation of Merger, the Company will no longer be qualified as a
professional corporation under the Corporation Law. The Company is not duly
qualified and licensed to do business in any other jurisdiction. The Company
does not have any assets, employees or offices in any state other than the
State. Except as set forth on Schedule 3.1, neither the Company, the Physician
nor any Professional Employee owns, directly or indirectly, any of the capital
stock of any other corporation or any equity, profit sharing, participation or
other interest in any corporation, partnership, joint venture or other entity
that is engaged in a business that is a Competitor.

3.2. Capitalization. The authorized capital stock of the Company
consists of 50,000 shares of Company Common Stock, of which 1,225 shares are
issued and outstanding. The Physician owns all of the issued and outstanding
Company Common Stock, free and clear of all security interests, liens, adverse
claims, encumbrances, equities, proxies and shareholder agreements, except to
the extent disclosed on Schedule 3.2. Each outstanding share of Company Common
Stock has been legally and validly issued and is fully paid and nonassessable.
No shares of Company Common Stock are owned by the Company in treasury. No
shares of Company Common Stock of the Company have been issued or disposed of in
violation of the

<PAGE> 12

preemptive rights, rights of first refusal or similar rights of any of the
Company's stockholders. The Company has no bonds, debentures, notes or other
obligations the holders of which have the right to vote (or are convertible into
or exercisable for securities having the right to vote) with the stockholders of
the Company on any matter.

3.3. Transactions in Capital Stock. The Company has not acquired any
capital stock of the Company within the two (2) year period preceding the
execution of this Agreement. Except as set forth on Schedule 3.3, there exist no
options, warrants, subscriptions or other rights to purchase, or securities
convertible into or exchangeable for, any of the authorized or outstanding
securities of the Company, and no option, warrant, call, conversion right or
commitment of any kind exists which obligates the Company to issue any of its
authorized but unissued capital stock. Except as set forth on Schedule 3.3, the
Company has no obligation (contingent or otherwise) to purchase, redeem or
otherwise acquire any of its equity securities or any interests therein or to
pay any dividend or make any distribution in respect thereof. Neither the equity
structure of the Company nor the relative ownership of shares among any of its
stockholders has been altered or changed within the two (2) year period
preceding the date of this Agreement.

3.4. Continuity of Business Enterprise. Except as set forth on
Schedule 3.4, and except as contemplated by this Agreement, there has not been
any sale, distribution or spin-off of significant assets of the Company or any
of its Affiliates other than in the ordinary course of business within the two
(2) year period preceding the date of this Agreement.

3.5. Corporate Records. The copies of the Articles or Certificate of
Incorporation and Bylaws, and all amendments thereto, of the Company that have
been delivered or made available to Vision 21 are true, correct and complete
copies thereof, as in effect on the date hereof. The minute books of the
Company, copies of which have been delivered or made available to Vision 21,
contain accurate minutes of all meetings of, and accurate consents to all
actions taken without meetings by, the Board of Directors (and any committees
thereof) and the stockholders of the Company in the three (3) years prior to the
Closing Date, and contain all other material minutes and consents of the
directors and stockholders of the Company since its formation.

3.6. Authorization and Validity. The execution, delivery and
performance by the Company of this Agreement and the other agreements
contemplated hereby, and the consummation of the transactions contemplated
hereby and thereby to be performed by the Company, have been duly authorized by
the Company. This Agreement has been duly executed and delivered by the Company
and constitutes the legal, valid and binding obligation of the Company
enforceable against the Company in accordance with its terms, except as may be
limited by applicable bankruptcy, insolvency or similar laws affecting
creditors' rights generally or the availability of equitable remedies. The
Company has obtained, in accordance with applicable law and its Articles or
Certificate of Incorporation and Bylaws, the approval of its stockholders
necessary for the consummation of the transactions contemplated hereby.

<PAGE> 13

3.7. Compliance. Except as disclosed on Schedule 3.7, the execution
and delivery of the documents contemplated hereunder and the consummation of the
transactions contemplated thereby by the Company will not (i) violate any
provision of the Company's organizational documents, (ii) violate any material
provision of or result in the breach of or entitle any party to accelerate
(whether after the giving of notice or lapse of time or both) any material
obligation under, any mortgage, lien, lease, contract, license, instrument or
any other agreement to which the Company is a party, (iii) result in the
creation or imposition of any material lien, charge, pledge, security interest
or other material encumbrance upon any property of the Company or (iv) violate
or conflict with any order, award, judgment or decree or other material
restriction or to the best of the Company's knowledge violate or conflict with
any law, ordinance or regulation to which the Company or its property is
subject.

3.8. Consents. No consent, approval, order or authorization of or
registration, declaration, or filing with, any Governmental Authority or other
person is required in connection with the execution and delivery of the
documents contemplated herein by the Company or the consummation by such party
of the transactions contemplated thereby, except for those consents or approvals
set forth on Schedule 3.8.

3.9. Financial Statements. The Company has furnished to Vision 21
its unaudited balance sheet and related unaudited statements of income, retained
earnings and cash flows for its prior three (3) full fiscal years, and its
unaudited interim balance sheet for year to date period ended December 31, 1996
(the "Company Balance Sheet", and the date thereof shall be referred to as the
"Company Balance Sheet Date") and related unaudited statements of income,
retained earnings and cash flows for the period then ended (all collectively,
with the related notes thereto, the "Financial Statements"). The Financial
Statements fairly present the financial condition and results of operations of
the Company as of the dates and for the periods indicated except as otherwise
indicated in the Financial Statements. The Company and the Physician expressly
warrant that they will have prior to the Closing fairly, accurately and
completely provided all necessary information requested in or relevant to the
preparation of the audit to be conducted by the Accountants or their designees
prior to Closing (the "Audit"). The cost of the Audit shall be paid by Vision 21
and all materials prepared by Vision 21's Accountants in connection with the
Audit shall be solely the property of Vision 21. The Company shall pay for all
expenses incurred in connection with the conversion of the Company from cash
basis accounting to accrual accounting and all expenses in connection with the
preparation by the Company's accountants of the audit package for Vision 21's
Accountants.

3.10. Liabilities and Obligations. Except as set forth on Schedule
3.10, the Financial Statements reflect all liabilities of the Company, accrued,
contingent or otherwise that would be required to be reflected thereon, or in
the notes thereto, prepared in accordance with GAAP, except for liabilities and
obligations incurred in the ordinary course of business since the Company
Balance Sheet Date. Except as set forth in the Financial Statements or on
Schedule 3.10, the Company is not liable upon or with respect to, or obligated
in any other way to provide funds in respect of or to guarantee or assume in any
manner, any debt, obligation or dividend of any person, corporation,
association, partnership, joint venture, trust or other entity,

<PAGE> 14

and the Company does not know of any valid basis for the assertion of any other
claims or liabilities of any nature or in any amount.

3.11. Employee Matters.

a. Cash Compensation. Schedule 3.11(a) contains a complete and
accurate list of the names, titles and annual cash compensation as of the
Closing Date, including without limitation wages, salaries, bonuses
(discretionary and formula) and other cash compensation (the "Cash
Compensation") of all employees of the Company. In addition, Schedule 3.11(a)
contains a complete and accurate description of (i) all increases in Cash
Compensation of employees of the Company during the current fiscal year and the
immediately preceding fiscal year and (ii) any promised increases in Cash
Compensation of employees of the Company that have not yet been effected.

b. Compensation Plans. Schedule 3.11(b) contains a complete
and accurate list of all compensation plans, arrangements or practices (the
"Compensation Plans") sponsored by the Company or to which the Company
contributes on behalf of its employees, other than Employment Agreements listed
on Schedule 3.11(c) and Employee Benefit Plans listed on Schedule 3.12(a). The
Compensation Plans include without limitation plans, arrangements or practices
that provide for performance awards, and stock ownership or stock options. The
Company has provided or made available to Vision 21 a copy of each written
Compensation Plan and a written description of each unwritten Compensation Plan.
Except as set forth on Schedule 3.11(b), each of the Compensation Plans can be
terminated or amended at will by the Company.

c. Employment Agreements. Except as set forth on Schedule
3.11(c), the Company is not a party to any employment agreement ("Employment
Agreements") with respect to any of its employees. Employment Agreements include
without limitation employee leasing agreements, employee services agreements and
non-competition agreements.

d. Employee Policies and Procedures. Schedule 3.11(d) contains
a complete and accurate list of all employee manuals and all material policies,
procedures and work-related rules (the "Employee Policies and Procedures") that
apply to employees of the Company. The Company has provided or made available to
Vision 21 a copy of all written Employee Policies and Procedures and a written
description of all material unwritten Employee Policies and Procedures.

e. Unwritten Amendments. Except as described on Schedule
3.11(b), 3.11(c), or 3.11(d), no material unwritten amendments have been made,
whether by oral communication, pattern of conduct or otherwise, with respect to
any Compensation Plans or Employee Policies and Procedures.

<PAGE> 15

f. Labor Compliance. The Company has been and is in compliance
with all applicable laws, rules, regulations and ordinances respecting
employment and employment practices, terms and conditions of employment and
wages and hours, except for any such failures to be in compliance that,
individually or in the aggregate, would not result in a Material Adverse Effect,
and the Company is not liable for any arrearages of wages or penalties for
failure to comply with any of the foregoing. The Company has not engaged in any
unfair labor practices or discriminated on the basis of race, color, religion,
sex, national origin, age, disability or handicap in its employment conditions
or practices that would, individually or in the aggregate, result in a Material
Adverse Effect. Except as set forth on Schedule 3.11(f), there are no (i) unfair
labor practice charges or complaints or racial, color, religious, sex, national
origin, age, disability or handicap discrimination charges or complaints pending
or, to the actual knowledge of the Company and the Physician, threatened against
the Company before any federal, state or local court, board, department,
commission or agency (nor, to the knowledge of the Company and the Physician,
does any valid basis therefor exist) or (ii) existing or, to the actual
knowledge of the Company and the Physician, threatened labor strikes, disputes,
grievances, controversies or other labor troubles affecting the Company (nor, to
the best knowledge of the Company and the Physician, does any valid basis
therefor exist).

g. Unions. The Company has never been a party to any agreement
with any union, labor organization or collective bargaining unit. No employees
of the Company are represented by any union, labor organization or collective
bargaining unit. Except as set forth on Schedule 3.11(g), to the actual
knowledge of the Company, none of the employees of the Company has threatened to
organize or join a union, labor organization or collective bargaining unit.

h. Aliens. All employees of the Company are, to the best
knowledge of the Company, citizens of, or are authorized in accordance with
federal immigration laws to be employed in, the United States.

3.12. Employee Benefit Plans.

a. Identification. Schedule 3.12(a) contains a complete and
accurate list of all employee benefit plans (within the meaning of Section 3(3)
of ERISA sponsored by the Company or to which the Company contributes on behalf
of its employees and all employee benefit plans previously sponsored or
contributed to on behalf of its employees within the three (3) years preceding
the date hereof (the "Employee Benefit Plans"). The Company has provided or made
available to Vision 21 copies of all plan documents, determination letters,
pending determination letter applications, trust instruments, insurance
contracts, administrative services contracts, annual reports, actuarial
valuations, summary plan descriptions, summaries of material modifications,
administrative forms and other documents that constitute a part of or are
incident to the administration of the Employee Benefit Plans. In addition, the
Company has provided or made available to Vision 21 a written description of all
existing practices engaged in by the Company that constitute Employee Benefit
Plans. Except as set forth on Schedule 3.12(a) and subject to the requirements
of the Code and ERISA, each

<PAGE> 16

of the Employee Benefit Plans can be terminated or amended at will by the
Company. Except as set forth on Schedule 3.12(a), no unwritten amendment exists
with respect to any Employee Benefit Plan. Except as set forth on Schedules
3.12(b)-(l), each of the following paragraphs is true and correct.

b. Administration. Each Employee Benefit Plan has been
administered and maintained in compliance with all applicable laws, rules and
regulations, except where the failure to be in compliance would not,
individually or in the aggregate, result in a Material Adverse Effect. The
Company and the Physician have (i) made all necessary filings with respect to
such Employee Benefit Plans, including the timely filing of Form 5500 if
applicable, and (ii) made all necessary filings, reports and disclosures
pursuant to and have complied with all requirements of the IRS Voluntary
Compliance Resolution Program, if applicable, with respect to all profit sharing
retirement plans and pension plans in which employees of the Company
participate.

c. Examinations. Except as set forth on Schedule 3.12(c), the
Company has not received any notice that any Employee Benefit Plan is currently
the subject of an audit, investigation, enforcement action or other similar
proceeding conducted by any state or federal agency.

d. Prohibited Transactions. No prohibited transactions (within
the meaning of Section 4975 of the Code or Sections 406 and 407 of ERISA) have
occurred with respect to any Employee Benefit Plans.

e. Claims and Litigation. No pending or, to the actual
knowledge of the Company and the Physician, threatened claims, suits, or other
proceedings exist with respect to any Employee Benefit Plan other than normal
benefit claims filed by participants or beneficiaries.

f. Qualification. As set forth in more detail on Schedule
3.12(f), the Company has received a favorable determination letter or ruling
from the IRS for each of the Employee Benefit Plans intended to be qualified
within the meaning of Section 401(a) of the Code and/or tax-exempt within the
meaning of Section 501(a) of the Code. Except as set forth on Schedule 3.12(f),
no proceedings exist or, to the actual knowledge of the Company have been
threatened that could result in the revocation of any such favorable
determination letter or ruling.

g. Funding Status. No accumulated funding deficiency (within
the meaning of Section 412 of the Code), whether or not waived, exists with
respect to any Employee Benefit Plan or any plan sponsored by any member of a
controlled group (within the meaning of Section 412(n)(6)(B) of the Code) in
which the Company is a member ("Controlled Group"). With respect to each
Employee Benefit Plan subject to Title IV of ERISA, the assets of each such plan
are at least equal in value to the present value of accrued benefits determined
on an ongoing basis as of the date hereof. The Company does not sponsor any
Employee

<PAGE> 17

Benefit Plan described in Section 501(c)(9) of the Code. None of the Employee
Benefit Plans are subject to actuarial assumptions.

h. Excise Taxes. Neither the Company nor any member of a
Controlled Group has any liability to pay excise taxes with respect to any
Employee Benefit Plan under applicable provisions of the Code or ERISA.

i. Multiemployer Plans. Neither the Company nor any member of
a Controlled Group is or ever has been obligated to contribute to a
multiemployer plan within the meaning of Section 3(37) of ERISA.

j. Pension Benefit Guaranty Corporation. None of the Employee
Benefit Plans are subject to the requirements of Title IV of ERISA.

k. Retirees. The Company has no obligation or commitment to
provide medical, dental or life insurance benefits to or on behalf of any of its
employees who may retire or any of its former employees who have retired except
as may be required pursuant to the continuation of coverage provisions of
Section 4980B of the Code and Sections 501 through 508 of ERISA.

l. Other Compensation. Except as set forth on Schedules
3.11(a), 3.11(b), 3.11(c), 3.11(d) and 3.12(a), neither the Company, the
Physician nor any Professional Employee is a party to any compensation or debt
arrangement with any person relating to the provision of healthcare related
services other than arrangements with the Company or the Physician.

3.13. Absence of Certain Changes. Except as set forth on Schedule
3.13 or as contemplated in this Agreement, since the Company Balance Sheet Date,
the Company has not:

a. suffered a Material Adverse Effect, whether or not caused
by any deliberate act or omission of the Company or the Physician;

b. contracted for the purpose of acquiring any capital asset
having a cost in excess of $5,000 or made any single expenditure in excess of
$5,000;

c. incurred any indebtedness for borrowed money (other than
short-term borrowings in the ordinary course of business), or issued or sold any
debt securities;

d. incurred or discharged any material liabilities or
obligations except in the ordinary course of business;

<PAGE> 18

e. paid any amount on any indebtedness prior to the due date,
forgiven or cancelled any claims or any debt in excess of $5,000, or released or
waived any rights or claims except in the ordinary course of business;

f. mortgaged, pledged or subjected to any security interest,
lien, lease or other charge or encumbrance any of its properties or assets
(other than statutory liens arising in the ordinary course of business or other
liens that do not materially detract from the value or interfere with the use of
such properties or assets);

g. suffered any damage or destruction to or loss of any assets
(whether or not covered by insurance) that has, individually or in the
aggregate, resulted in a Material Adverse Effect;

h. acquired or disposed of any assets having an aggregate
value in excess of $5,000, except in the ordinary course of business;

i. written up or written down the carrying value of any of its
assets, other than accounts receivable in the ordinary course of business;

j. changed the costing system or depreciation methods of
accounting for its assets in any material respect;

k. lost or terminated any employee, patient, customer or
supplier that has, individually or in the aggregate, resulted in a Material
Adverse Effect;

l. increased the compensation of any director, officer, key
employee or consultant, except as disclosed on Schedule 3.11(a);

m. increased the compensation of any employee (except for
increases in the ordinary course of business consistent with past practice) or
hired any new employee who is expected to receive annualized compensation of at
least $15,000;

n. made any payments to or loaned any money to any person or
entity referred to in Section 3.25;

o. formed or acquired or disposed of any interest in any
corporation, partnership, joint venture or other entity;

p. redeemed, purchased or otherwise acquired, or sold, granted
or otherwise disposed of, directly or indirectly, any of its capital stock or
securities, or agreed to change the terms and conditions of any such capital
stock, securities or rights;

q. entered into any agreement providing for total payments in
excess of $5,000 in any twelve (12) month period with any person or group, or
modified or

<PAGE> 19

amended in any material respect the terms of any such existing agreement, except
in the ordinary course of business;

r. entered into, adopted or amended any Employee Benefit Plan,
except as contemplated hereby or the other agreements contemplated hereby; or

s. entered into any other commitment or transaction or
experienced any other event that would materially interfere with its performance
under this Agreement or any other agreement or document executed or to be
executed pursuant to this Agreement, or otherwise has, individually or in the
aggregate, resulted in a Material Adverse Effect.

3.14. Title; Leased Assets.

a. Real Property. Except as set forth on Schedule 3.14(a), the
Company does not own any interest (other than leasehold interests referred to on
Schedule 3.14(c)) in real property. The leased real property referred to on
Schedule 3.14(c) constitutes the only real property necessary for the conduct of
the Company's business.

b. Personal Property. Except as set forth on Schedule 3.14(b),
the Company and/or the Physician has good, valid and marketable title to all the
personal property constituting the Nonmedical Assets. The personal property
constituting the Nonmedical Assets constitute the only personal property
necessary for the conduct of the Company's business (except for the Medical
Assets). Upon consummation of the transactions contemplated hereby, such
interest in the Nonmedical Assets shall be free and clear of all security
interests, liens, claims and encumbrances, other than those set forth on
Schedule 3.14(b) (the "Permitted Encumbrances") and statutory liens arising in
the ordinary course of business or other liens that do not materially detract
from the value or interfere with the use of such properties or assets.

c. Leases. A list and brief description of (i) all leases of
real property and (ii) leases of personal property involving rental payments
within any twelve (12) month period in excess of $12,000, in either case to
which the Company is a party, either as lessor or lessee, are set forth on
Schedule 3.14(c). All such leases are valid and, to the knowledge of the
Company, enforceable 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.

3.15. Commitments.

a. Commitments; Defaults. Except as set forth on Schedule 3.15
or as otherwise disclosed pursuant to this Agreement, the Company is not a party
to nor bound by, nor are any of the shares of Company Common Stock subject to,
nor are the Nonmedical Assets or the assets or the business of the Company bound
by, whether or not in writing, any of the following (collectively,
"Commitments"):

<PAGE> 20

i) partnership or joint venture agreement;

ii) guaranty or suretyship, indemnification or
contribution agreement or performance bond;

iii) debt instrument, loan agreement or other obligation
relating to indebtedness for borrowed money or money lent or to be lent to
another;

iv) contract to purchase real property;

v) agreement with dealers or sales or commission agents,
public relations or advertising agencies, accountants or attorneys (other than
in connection with this Agreement and the transactions contemplated hereby)
involving total payments within any twelve (12) month period in excess of $2,000
and which is not terminable on thirty (30) days' notice or without penalty;

vi) agreement relating to any material matter or
transaction in which an interest is held by a person or entity that is an
Affiliate of the Company or the Physician;

vii) agreement for the acquisition of services, supplies,
equipment, inventory, fixtures or other property involving more than $2,000 in
the aggregate;

viii) powers of attorney;

ix) contracts containing non-competition covenants;

x) agreement providing for the purchase from a supplier
of all or substantially all of the requirements of the Company of a particular
product or services;

xi) agreements regarding clinical research;

xii) agreements with Payors and contracts to provide
medical or health care services; or

xiii) any other agreement or commitment not made in the
ordinary course of business or that is material to the business, operations,
condition (financial or otherwise) or results of operations of the Company.

<PAGE> 21

occurrences, acts or omissions that, with the giving of notice or lapse of time
or both, would constitute defaults by the Company or, to the best knowledge of
the Company, any other party to a material Commitment, and no penalties have
been incurred nor are amendments pending, with respect to the material
Commitments, except as described on Schedule 3.15. The Commitments are in full
force and effect and are valid and enforceable obligations of the Company, and
to the best knowledge of the Company, are valid and enforceable obligations of
the other parties thereto, in accordance with their respective terms, and no
defenses, off-sets or counterclaims have been asserted or, to the best knowledge
of the Company, may be made by any party thereto (other than the Company), nor
has the Company waived any rights thereunder, except as described on Schedule
3.15. Except as set forth on Schedule 3.15, no consents or approvals are
required under the terms of any agreement listed on Schedule 3.15 in connection
with the transactions contemplated herein; including without limitation the
Merger.

b. No Cancellation or Termination of Commitment. Except as
disclosed pursuant to this Agreement or contemplated hereby, and except where
such default would not have a Material Adverse Effect on the business, (i)
neither the Company nor the Physician has received notice of any plan or
intention of any other party to any Commitment to exercise any right to cancel
or terminate any Commitment, and the Company does not know of any fact that
would justify the exercise of such a right; and (ii) neither the Company nor the
Physician currently contemplates, or has reason to believe any other person
currently contemplates, any amendment or change to any Commitment.

3.16. Insurance. The Company, the Physician and each Professional
Employee carries property, liability, malpractice, workers' compensation and
such other types of insurance pursuant to the insurance policies listed and
briefly described on Schedule 3.16 (the "Insurance Policies"). The Insurance
Policies are all of the insurance policies of the Company, the Physician and
each Professional Employee relating to the business of the Company and the
Nonmedical Assets. All of the Insurance Policies are issued by insurers of
recognized responsibility, and, to the best knowledge of the Company, are valid
and enforceable policies, except as may be limited by applicable bankruptcy,
insolvency or similar laws affecting creditors' rights generally or the
availability of equitable remedies. All Insurance Policies shall be maintained
in force without interruption up to and including the Closing Date. True,
complete and correct copies of all Insurance Policies have been provided or made
available to Vision 21. Except as set forth on Schedule 3.16, neither the
Company nor the Physician has received any notice or other communication from
any issuer of any Insurance Policy cancelling such policy, materially increasing
any deductibles or retained amounts thereunder, and to the actual knowledge of
the Company, no such cancellation or increase of deductibles, retainages or
premiums is threatened. Except as set forth on Schedule 3.16, neither the
Company, the Physician nor any Professional Employee has any outstanding claims,
settlements or premiums owed against any Insurance Policy, and the Company, the
Physician and each Professional Employee has given all notices or has presented
all potential or actual claims under any Insurance Policy in due and timely
fashion. Except as set forth on Schedule 3.16, since January 1, 1994, neither
the Company, the Physician nor any Professional Employee has filed a written
application for any professional liability insurance coverage which has been
denied by an

<PAGE> 22

insurance agency or carrier, and the Company, the Physician and each
Professional Employee has been continuously insured for professional malpractice
claims for at least the past seven (7) years (or such shorter periods of time
that any Professional Employee has been licensed to practice medicine). Schedule
3.16 also sets forth a list of all claims under any Insurance Policy in excess
of $10,000 per occurrence filed by the Company, the Physician and each
Professional Employee since January 1, 1994.

3.17. Proprietary Rights and Information. Set forth on Schedule 3.17
is a true and correct description of the following ("Proprietary Rights"):

a. all trademarks, trade-names, service marks and other trade
designations, including common law rights, registrations and applications
therefor, and all patents and applications therefor currently owned, in whole or
in part, by the Company, and all licenses, royalties, assignments and other
similar agreements relating to the foregoing to which the Company is a party
(including the expiration date thereof if applicable); and

b. all agreements relating to technology, know-how or
processes that the Company is licensed or authorized to use by others (other
than technology, know-how or processes generally available to other healthcare
providers), or which it licenses or authorizes others to use.

The Company owns or has the legal right to use the Proprietary Rights, and to
the knowledge of the Company, such ownership or use does not conflict, infringe
or violate the rights of any other person. Except as disclosed on Schedule 3.17,
no consent of any person will be required for the use thereof by Vision 21 upon
consummation of the transactions contemplated hereby and the Proprietary Rights
are freely transferable. No claim has been asserted by any person to the
ownership of or for infringement by the Company of the proprietary right of any
other person, and the Company does not know of any valid basis for any such
claim. To the best knowledge of the Company and the Physician, the Company has
the right to use, free and clear of any adverse claims or rights of others, all
trade secrets, customer lists and proprietary information required for the
marketing of all merchandise and services formerly or presently sold or marketed
by it.

3.18. Taxes.

a. Filing of Tax Returns. The Company has duly and timely
filed (in accordance with any extensions duly granted by the appropriate
governmental agency, if applicable) with the appropriate governmental agencies
all federal, state, local or foreign income, excise, corporate, franchise,
property, sales, use, payroll, withholding, provider, value added and other tax
returns and reports (collectively the "Tax Returns") required to be filed by the
United States or any state or any political subdivision thereof or any foreign
jurisdiction. All such Tax Returns or reports are complete and accurate in all
material respects and properly reflect the taxes of the Company for the periods
covered thereby.

<PAGE> 23

b. Payment of Taxes. Except for such items as the Company may
be disputing in good faith by proceedings in compliance with applicable law,
which are described on Schedule 3.18, (i) the Company has paid all taxes,
penalties, assessments and interest that have become due with respect to any Tax
Returns that it has filed and has properly accrued on its books and records for
all of the same that have not yet become due, and (ii) the Company is not
delinquent in the payment of any tax, assessment or governmental charge.

c. No Pending Deficiencies, Delinquencies, Assessments or
Audits. Except as set forth on Schedule 3.18, the Company has not received any
notice that any tax deficiency or delinquency has been asserted against the
Company. There is no unpaid assessment, proposal for additional taxes,
deficiency or delinquency in the payment of any of the taxes of the Company that
could be asserted by any taxing authority. There is no taxing authority audit of
the Company pending, or to the actual knowledge of the Company, threatened, and
the results of any completed audits are properly reflected in the Financial
Statements. The Company has not, to its best knowledge, violated any federal,
state, local or foreign tax law.

d. No Extension of Limitation Period. The Company has not
granted an extension to any taxing authority of the limitation period during
which any tax liability may be assessed or collected.

e. All Withholding Requirements Satisfied. All monies required
to be withheld by the Company and paid to governmental agencies for all income,
social security, unemployment insurance, sales, excise, use, and other taxes
have been collected or withheld and paid to the respective governmental
agencies.

f. Foreign Person. Neither the Company nor the Physician is a
foreign person, as such term is referred to in Section 1445(f)(3) of the Code.

g. Safe Harbor Lease. None of the Nonmedical Assets
constitutes property that the Company, Vision 21, or any Affiliate of Vision 21,
will be required to treat as being owned by another person pursuant to the "Safe
Harbor Lease" provisions of Section 168(f)(8) of the Code prior to repeal by the
Tax Equity and Fiscal Responsibility Act of 1982.

h. Tax Exempt Entity. None of the assets of the Company and
none of the Nonmedical Assets are subject to a lease to a "tax exempt entity" as
such term is defined in Section 168(h)(2) of the Code.

i. Collapsible Corporation. The Company has not at any time
consented, and the Physician will not permit the Company to elect, to have the
provisions of Section 341(f)(2) of the Code apply to it.

j. Boycotts. The Company has not at any time participated in
or cooperated with any international boycott as defined in Section 999 of the
Code.

<PAGE> 24

k. Parachute Payments. No payment required or contemplated to
be made by the Company will be characterized as an "excess parachute payment"
within the meaning of Section 280G(b)(1) of the Code.

l. S Corporation. The Company has not made an election to be
taxed as an "S" corporation under Section 1362(a) of the Code.

m. Personal Service Corporation. The Company is not a personal
service corporation subject to the provisions of Section 269A of the Code.

n. Personal Holding Company. The Company is not or has not
been a personal holding company within the meaning of Section 542 of the Code.

3.19. Compliance with Laws. The Company has not failed, and neither
the Company nor the Physician is aware of any failure by the Physician or any
Professional Employee to comply with all applicable laws, regulations and
licensing requirements relating to the operation of the Practice or failure to
file with the proper authorities all necessary statements and reports except
where the failure to so comply or file would not, individually or in the
aggregate, result in a Material Adverse Effect. There are no existing violations
by the Company, and neither the Company nor the Physician is aware of any
existing violations by the Physician or any Professional Employee of any
federal, state or local law or regulation that could, individually or in the
aggregate, result in a Material Adverse Effect. The Company, the Physician and
each Professional Employee possesses all necessary licenses, franchises, permits
and governmental authorizations for the conduct of the Company's business as now
conducted, all of which are listed (with expiration dates, if applicable) on
Schedule 3.19. Except as set forth on Schedule 3.19, the transactions
contemplated by this Agreement will not result in a default under or a breach or
violation of, or adversely affect the rights and benefits afforded by any such
licenses, franchises, permits or government authorizations, except for any such
default, breach or violation that would not, individually or in the aggregate,
have a Material Adverse Effect. Except as set forth on Schedule 3.19, since
January 1, 1993, neither the Company, the Physician nor, to the knowledge of the
Company based on a certificate in writing obtained from each Professional
Employee, any Professional Employee has received any notice from any federal,
state or other governmental authority or agency having jurisdiction over its,
his or her properties or activities, or any insurance or inspection body, that
its, his or her operations or any of its, his or her properties, facilities,
equipment, or business practices fail to comply with any applicable law,
ordinance, regulation, building or zoning law, or requirement of any public or
quasi-public authority or body, except where failure to so comply would not,
individually or in the aggregate, have a Material Adverse Effect.

3.20. Finder's Fee. Except as set forth on Schedule 3.20, the
Company has not incurred any obligation for any finder's, brokers or agent's fee
in connection with the transactions contemplated hereby.

<PAGE> 25

3.21. Litigation. Except as described on Section 3.21 or otherwise
disclosed pursuant to this Agreement, there are no legal actions or
administrative proceedings or investigations instituted or, to the actual
knowledge of the Company or the Physician, threatened, which affect or could
affect the outstanding shares of Company Common Stock, the Nonmedical Assets or
the operation, business, condition (financial or otherwise), or results of
operations of the Company which (i) if successful could, individually or in the
aggregate, have a Material Adverse Effect or (ii) could adversely affect the
ability of the Company or the Physician to effect the transactions contemplated
hereby. Neither the Company nor the Physician is (a) subject to any continuing
court or administrative order, judgment, writ, injunction or decree applicable
specifically to the Nonmedical Assets, the Company or to its business, assets,
operations or employees or (b) in default with respect to any such order,
judgment, writ, injunction or decree. The Company has no knowledge of any valid
basis for any such action, proceeding or investigation. Except as set forth on
Schedule 3.21, all medical malpractice claims asserted, general liability
incidents and incident reports have been submitted to the Company's insurer
therefor. All claims made or threatened against the Company in excess of its
deductible are covered under its Insurance Policies.

3.22. Condition of Fixed Assets. All of the fixtures, structures and
equipment reflected in the Financial Statements and used by the Company in its
business, are in good condition and repair, subject to normal wear and tear, and
conform in all material respects with all applicable ordinances, regulations and
other laws, and the Company has no actual knowledge of any latent defects
therein.

3.23. 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 Company 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.

3.24. Banking Relations. Set forth on Schedule 3.24 is a complete
and accurate list of all borrowing and investing arrangements that the Company
has with any bank or other financial institution, indicating with respect to
each relationship the type of arrangement maintained (such as checking account,
borrowing arrangements, safe deposit box, etc.) and the person or persons
authorized in respect thereof.

3.25. Ownership Interests of Interested Persons; Affiliations.
Except as set forth on Schedule 3.25, no officer, supervisory employee or
director of the Company, or their respective spouses, children or Affiliates,
owns directly or indirectly, on an individual or joint basis, any interest in,
has a compensation or other financial arrangement with, or serves as an officer
or director of, any customer or supplier of the Company or any organization that
has a material contract or arrangement with the Company. Except as may be
disclosed pursuant to this Agreement, neither the Company, nor any of its
directors, officers, employees or consultants, nor any Affiliate of such person
is, or within the last three (3) years was, a party to any contract, lease,
agreement or arrangement, including, but not limited to, any joint venture or
consulting agreement with any physician, hospital, pharmacy, home health agency
or other

<PAGE> 26

person which is in a position to make or influence referrals to, or otherwise
generate business for, the Company.

3.26. Investments in Competitors. Except as disclosed on Schedule
3.26, neither the Company nor the Physician owns directly or indirectly any
interests or has any investment in any person that is a Competitor of the
Company.

3.27. Environmental Matters.

a. Environmental Laws. To the best knowledge of the Company
and the Physician, neither the Company nor any of the Non-medical assets
(including the leased real property described on Schedule 3.14(c)) are currently
in violation of, or subject to any existing, pending or, to the actual knowledge
of the Company threatened, investigation or inquiry by any governmental
authority or to any remedial obligations under, any federal, state or local laws
or regulations pertaining to health or the environment ("Environmental Laws"),
except for any such violations, investigations or inquiries that would not,
individually or in the aggregate, result in a Material Adverse Effect.

b. Permits. The Company is not required to obtain, and has no
knowledge of any reason Vision 21 or the Surviving Corporation will be required
to obtain, any permits, licenses or similar authorizations to occupy, operate or
use any buildings, improvements, fixtures and equipment owned or leased by the
Company by reason of any Environmental Laws.

c. Superfund List. To the best knowledge of the Company, none
of the Nonmedical Assets (including the Company's leased real property described
on Schedule 3.14(c)) are on any federal or state "Superfund" list or subject to
any environmentally related liens, except such liens as would not, individually
or in the aggregate, result in a Material Adverse Effect.

3.28. Certain Payments. Neither the Company nor any director,
officer or employee of the Company acting for or on behalf of the Company, has
paid or caused to be paid, directly or indirectly, in connection with the
business of the Company:

a. to any government or agency thereof or any agent of any
supplier or customer any bribe, kick-back or other similar payment; or

b. any contribution to any political party or candidate (other
than from personal funds of directors, officers or employees not reimbursed by
their respective employers or as otherwise permitted by applicable law).

3.29. Medical Waste. With respect to the generation, transportation,
treatment, storage, and disposal, or other handling of medical waste, to the
best knowledge of

<PAGE> 27

the Company and the Physician, the Company has complied with all material
federal, state or local laws or regulations pertaining to medical waste.

3.30. Medicare and Medicaid Programs. The Company, the Physician and
each Professional Employee is qualified for participation in the Medicare and
Medicare programs and is party to provider agreements for such programs which
are in full force and effect with no events of default having occurred
thereunder. The Company, the Physician and each Professional Employee has timely
filed all claims or other reports required to be filed prior to the Closing Date
with respect to the purchase of services by third-party payors ("Payors"),
including but not limited to Medicare and Medicaid programs, except where the
failure to file would not, individually or in the aggregate, result in a
Material Adverse Effect. All such claims or reports are complete and accurate in
all material respects. The Company, the Physician and each Professional Employee
has paid or has properly recorded on the Financial Statements all actually known
and undisputed refunds, discounts or adjustments which have become due pursuant
to such claims, and neither the Company, the Physician nor any Professional
Employee has any material liability to any Payor with respect thereto, except as
has been reserved for in the Company Balance Sheet. There are no pending
appeals, overpayment determinations, adjustments, challenges, audits,
litigation, or notices of intent to reopen Medicare and/or Medicaid claims
determinations or other reports required to be filed by the Company, the
Physician or any Professional Employee in order to be paid by a Payor for
services rendered. Neither the Company, nor any of its directors, officers,
employees, consultants or the Physician has been convicted of, or pled guilty or
nolo contendere to, patient abuse or neglect, or any other Medicare or Medicaid
program-related offense. Neither the Company, nor its directors, officers, the
Physician, or to the best of the Company's knowledge, its employees or
consultants, has committed any offense which may serve as the basis for
suspension or exclusion from the Medicare and Medicaid programs, including but
not limited to, defrauding a government program, loss of a license to provide
health services, and failure to provide quality care.

3.31. Fraud and Abuse. To the best knowledge of the Company and the
Physician, the Company, its officers and directors, the Professional Employees,
and the other persons and entities providing professional services for the
Company, have not engaged in any activities which are prohibited under 42 U.S.C.
ss.ss. 1320-7, 7a or 7b or 42 U.S.C. ss.1395nn (subject to the exceptions set
forth in such legislation), or the regulations promulgated thereunder or
pursuant to similar 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 a
false statement or representation of a material fact for use in determining
rights to any benefit or payment;

<PAGE> 28

c. failure to disclose knowledge by a Medicare or Medicaid
claimant 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 intent
to fraudulently secure such benefit or payment;

d. knowingly and willfully offering, paying, soliciting or
receiving any remuneration (including any kickback, bribe, or rebate), directly
or indirectly, overtly or covertly, in cash or in kind (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 Medicaid; and

e. referring a patient for designated health services (as
defined in 42 U.S.C. ss.1395nn) to or providing designated health services to a
patient upon a referral from an entity or person with which the Physician or the
Professional Employee or an immediate family member has a financial
relationship, and to which no exception under 42 U.S.C. ss.1395nn applies.

3.32. Payors. Schedule 3.32 sets forth a true, correct and complete
list of the names and addresses of each Payor, including any private pay patient
as a single payor, of the Company's services which accounted for more than 10%
of the revenues of the Company in the three (3) previous fiscal years. Except as
set forth on Schedule 3.32, the Company has good relations with such Payors and
none of such Payors has notified the Company that it intends to discontinue its
relationship with the Company or to deny any claims submitted to such Payor for
payment.

3.33. Prohibitions on the Corporate Practice of Medicine. To the
best of the Company's and the Physician's knowledge, the actions, transactions
or relationships arising from, and contemplated by this Agreement, do not
violate any law, rule or regulation relating to the corporate practice of
medicine. The Company and the Physician accordingly agree that the Company, the
Physician and New P.C. will not, in an attempt to void or nullify any document
contemplated herein or any relationship involving Vision 21, the Subsidiary or
the Company or the Physician or New P.C., sue, claim, aver, allege or assert
that any such document contemplated herein or any such relationship violates any
law, rule or regulation relating to the corporate practice of medicine and
expressly warrant that this Section is valid and enforceable by Vision 21 and
the Subsidiary, and recognize that Vision 21 and the Subsidiary have relied upon
the statements herein in closing the transaction.

3.34. Acquisition Proposals. Except for the negotiations, offers and
agreements with Vision 21 and its representatives, the Company has not received
during the twelve (12) month period preceding the date of this Agreement any
proposal or offer (including, without limitation, any proposal or offer of its
stockholders) with respect to a merger,

<PAGE> 29

acquisition, consolidation or similar transaction involving, or any purchase of
all or any significant portion of the assets or any equity securities of, the
Company (any such proposal or offer being hereinafter referred to as an
"Acquisition Proposal") nor has the Company or any of its employees, agents,
representatives or stockholders engaged in any negotiations concerning, or
provided any confidential information or data to, or had any discussions with,
any person relating to an Acquisition Proposal, or otherwise facilitated any
effort or attempted to make or implement an Acquisition Proposal.

3.35. Investment Company Status. The Company is not currently, nor
has it ever been, an "investment company" as that term is defined in Section
368(a)(2)(F)(iii) and (iv) of the Code.

3.36. Equal Exchange; Consistent Treatment of Expenses. Physician
and the Company believe that the fair market value of all the Company Common
Stock shall be approximately equal to the fair market value of the Merger
Consideration at the Effective Time. The Company has, in presenting information
concerning the Company's and New P.C.'s expenses to Vision 21 for the purpose of
determining the Company's value, separated out those expenses which shall be
borne by New P.C. in a manner which is consistent with the treatment of expenses
which shall be the responsibility of New P.C. pursuant to the Business
Management Agreement.

3.37. Insolvency Proceedings. The Company is not currently under the
jurisdiction of a Federal or state court in a Title 11 or similar case within
the meaning of Section 368(a)(3)(A) of the Code.

3.38. Positive Net Worth. On the Closing Date the fair market value
of the assets of the Company will equal or exceed the sum of the liabilities of
the Company plus the amount of any other liabilities to which the assets of the
Company are subject.

3.39. Accounts Receivable/Payable. The accounts receivable of the
Company relating to the ownership and operation of the Practice reflected on the
Company Balance Sheet, to the extent uncollected on the date hereof, are, and
the accounts receivable of the Company relating to the ownership and operation
of the Practice to be reflected on the books of the Company on the Closing Date
(the "Accounts Receivable") will be, valid, existing and collectible within six
months from the Closing Date (taking into consideration the allowance for
doubtful accounts set forth in the Financial Statements) using reasonably
diligent collection methods taking into account the size and nature of the
receivable, and represent amounts due for goods sold and delivered or services
performed. There are not, and on the date of Closing there will not be, any
refunds, discounts, set-offs, defenses, counterclaims or other adjustments
payable or assessable with respect to the Accounts Receivable. The Company has
collected Accounts Receivable only in the ordinary course and has not changed
collection procedures or methods nor accelerated the pace of such collection
efforts in anticipation of the transactions contemplated in this Agreement. The
Company has paid accounts payable in the ordinary course

<PAGE> 30

and has not changed payment procedures or methods nor delayed the timing of such
payments in anticipation of the transactions contemplated in this Agreement.

3.40. Projections. There is no fact, development or threatened
development with respect to the markets, products, services, clients, patients,
facilities, personnel, vendors, suppliers, operations, assets or prospects of
the Practice which are known to the Company or the Physician which would
materially adversely affect the projected fiscal year 1997 earnings of New P.C.
disclosed to Vision 21 by Physician, other than such conditions as may affect as
a whole the economy or the practice of medicine generally.

3.41. Disclosure. To the best of the Company's and the Physician's
knowledge, no representation, warranty or statement made by the Company or the
Physician in this Agreement or any of the exhibits or schedules hereto, or any
agreements, certificates, documents or instruments delivered or to be delivered
to Vision 21 and the Subsidiary in accordance with this Agreement or the other
documents contemplated herein, 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 contained herein or therein, in light of the circumstances under
which they were made, not misleading. The Company and the Physician do not know
of any fact or condition (other than general economic conditions or legislative
or administrative changes in health-care delivery) which materially adversely
affects, or in the future may materially affect, the condition, properties,
assets, liabilities, business, operations or prospects of the Practice which has
not been set forth herein or in the Schedules provided herewith.

4. REPRESENTATIONS AND WARRANTIES OF THE PHYSICIAN. The Physician
represents and warrants to Vision 21 and the Subsidiary that the following are
true and correct as of the date hereof, and shall be true and correct through
the Closing Date as if made on that date:

4.1. Validity; Physician Capacity. This Agreement, the Physician
Employment Agreement, and each other agreement contemplated hereby or thereby
have been, or will be as of the Closing Date, duly executed and delivered by the
Physician and constitute or will constitute legal, valid and binding obligations
of the Physician, enforceable against the Physician 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 Physician has legal capacity to enter into and perform
this Agreement and his Physician Employment Agreement.

<PAGE> 31

charge or encumbrance upon any of his property or the shares of Company Common
Stock or (b) to the best knowledge of the Physician, violate or conflict with
any judgment, decree, order, statute, rule or regulation of any court or any
public, governmental or regulatory agency or body.

4.3. Personal Holding Company. The Physician does not own the shares
of Company Common Stock, directly or indirectly, beneficially or of record,
through a personal holding company.

4.4. Transfers of the Company Common Stock. Set forth on Schedule
4.4 is a list of all transfers or other transactions involving capital stock of
the Company since January 1, 1994. All transfers of Company Common Stock by the
Physician have been made for valid business reasons and not in anticipation or
contemplation of the consummation of the transactions contemplated by this
Agreement.

4.5. Consents. Except as set forth on Schedule 4.5 or as may be
required under the Exchange Act, the Securities Act, the Corporation Law and
state securities laws, or otherwise disclosed pursuant to this Agreement, no
consent, authorization, approval, permit or license of, or filing with, any
governmental or public body or authority, or any other person is required to
authorize, or is required in connection with, the execution, delivery and
performance of this Agreement or the agreements contemplated hereby on the part
of the Physician.

4.6. Certain Payments. The Physician has not paid or caused to be
paid, directly or indirectly, in connection with the business of the Company:

a. to any government or agency thereof or any agent of any
supplier or customer any bribe, kick-back or other similar payment; or

b. any contribution to any political party or candidate (other
than from personal funds not reimbursed by the Company or as otherwise permitted
by applicable law).

4.7. Finder's Fee. Except as set forth on Schedule 4.7, the
Physician has not incurred any obligation for any finder's, broker's or agent's
fee in connection with the transactions contemplated hereby.

4.8. Ownership of Interested Persons; Affiliations. Except as set
forth on Schedule 4.8, neither the Physician nor his spouse, children or
Affiliates, owns directly or indirectly, on an individual or joint basis, any
interest in, has a compensation or other financial arrangement with, or serves
as an officer or director of, any customer or supplier of the Company or any
organization that has a material contact or arrangement with the Company.
Neither the Physician nor any of his Affiliates is, or with the last three (3)
years was, a party to any contract, lease, agreement or arrangement, including,
but not limited to, any joint venture or consulting agreement with any
physician, hospital, pharmacy, home health agency or other

<PAGE> 32

person which is in a position to make or influence referrals to, or otherwise
generate business for, the Company.

4.9. Investments in Competitors. Except as disclosed on Schedule
4.9, the Physician does not own directly or indirectly any interests or have any
investment in any person that is a Competitor of the Company.

4.10. Litigation. Except as disclosed on Schedule 4.10, there are no
claims, actions, suits, proceedings (arbitration or otherwise) or investigations
pending or, to the Physician's knowledge, threatened against the Physician at
law or at equity in any court or before or by any Governmental Authority, and,
to the Physician's knowledge, there are no, and have not been any, facts,
conditions or incidents that may result in any such actions, suits, proceedings
(arbitration or otherwise) or investigations. Except as set forth on Schedule
4.10, there have been no disciplinary, revocation or suspension proceedings or
similar types of claims, actions or proceedings, hearings or investigations
against the Physician or the Company.

4.11. Permits. To the best of the Physician's knowledge, the
Physician has all permits, licenses, orders and approvals of all Governmental
Authorities necessary to perform the services performed by the Physician in
connection with the conduct of the Practice. All such permits, licenses, orders
and approvals are in full force and effect and no suspension or cancellation of
any of them is pending or threatened. To the best of the Physician's knowledge,
none of such permits, licenses, orders or approvals will be adversely affected
by the consummation of the transactions contemplated herein. The Physician is a
participating physician, as such term is defined by the Medicare and Medicaid
programs, and the Physician has not been disciplined, sanctioned or excluded
from either the Medicare or Medicaid programs and has not been subject to any
plan of correction imposed by any professional review body.

4.12. Staff Privileges. Schedule 4.12 lists all hospitals at which
the Physician has full staff privileges. Such staff privileges have not been
revoked, surrendered, suspended or terminated, and to the Physician's knowledge,
there are no, and have not been any, facts, conditions or incidents that may
result in any such revocation, surrender, suspension or termination.

4.13. Intentions. Except as set forth on Schedule 4.13, the
Physician intends to continue practicing medicine on a full-time basis for at
least the next five (5) years with the Company and does not know of any fact or
condition that materially adversely affects, or in the future may materially
adversely affect, his ability or intention to practice medicine on a full-time
basis for the next five (5) years with the Company.

5. REPRESENTATIONS AND WARRANTIES OF VISION 21 AND THE SUBSIDIARY.
Vision 21 and the Subsidiary, jointly and severally, represent and warrant to
the Company and the Physician that the following are true and correct as of the
date hereof and shall be true and correct as of the Closing Date; when used in
this Section 5, the term "best knowledge" shall mean the best knowledge of those
individuals listed on Schedule 5:

<PAGE> 33

5.1. Organization and Good Standing. Vision 21 and the Subsidiary
are corporations duly organized, validly existing and in good standing under the
laws of the State of Florida, with all requisite corporation power and authority
to carry on the business in which they are engaged, to own the properties they
own, to execute and deliver this Agreement and to consummate the transactions
contemplated hereby. At or prior to Closing, Vision 21 and the Subsidiary will
be qualified to do business as a foreign corporation in the jurisdictions listed
on Schedule 5.1.

5.2. Capitalization. The authorized capital stock of Vision 21
consists of 50,000,000 shares of Vision 21 Common Stock, of which 8,123,065
shares are issued and outstanding. Immediately prior to the Closing, the
authorized capital stock of Vision 21 will consist of 50,000,000 shares of
Vision 21 Common Stock, of which 8,123,065 shares will be issued and
outstanding.

5.3. Corporate Records. The copies of the Articles of Incorporation
and Bylaws, and all amendments thereto, of Vision 21 and the Subsidiary that
have been delivered or made available to the Company and the Physician are true,
correct and complete copies thereof, as in effect on the date hereof (provided,
however, that the Articles of Incorporation and Bylaws of the Subsidiary shall
be in effect on the Closing Date). The minute books of Vision 21 and the
Subsidiary, copies of which have been delivered or made available to the Company
and the Physician, contain accurate minutes of all meetings of, and accurate
consents to all actions taken without meetings by, the Board of Directors (and
any committees thereof) and the stockholders of Vision 21 and the Subsidiary,
since their formation.

5.4. Authorization and Validity. The execution, delivery and
performance by Vision 21 and the Subsidiary of this Agreement and the other
agreements contemplated hereby, and the consummation of the transactions
contemplated hereby and thereby, have been duly authorized by Vision 21 and the
Subsidiary. This Agreement and each other agreement contemplated hereby to be
executed by Vision 21 and the Subsidiary have been or will be as of the Closing
Date duly executed and delivered by Vision 21 and the Subsidiary and constitute
or will constitute legal, valid and binding obligations of Vision 21 and the
Subsidiary, enforceable against Vision 21 and the Subsidiary 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.

5.5. Compliance. The execution and delivery of the documents
contemplated hereunder and the consummation of the transactions contemplated
thereby by Vision 21 and the Subsidiary shall not (i) violate any provision of
Vision 21's or the Subsidiary's organizational documents, (ii) violate any
material provision of or result in the breach of or entitle any party to
accelerate (whether after the giving of notice or lapse of time or both) any
material obligation under, any mortgage, lien, lease, contract, license,
instrument or any other agreement to which Vision 21 or the Subsidiary is a
party, (iii) result in the creation or imposition of any material lien, charge,
pledge, security interest or other material encumbrance upon any property of
Vision 21 or the Subsidiary, or (iv) violate or conflict with any order,

<PAGE> 34

award, judgment or decree or other material restriction or to the best of Vision
21's and the Subsidiary's knowledge violate or conflict with any law, ordinance
or regulation to which Vision 21 or the Subsidiary or their respective property
is subject.

5.6. Consents. No consent, approval, order or authorization of or
registration, declaration, or filing with, any Governmental Authority or other
person is required in connection with the execution and delivery of the
documents contemplated herein by Vision 21 and the Subsidiary or the
consummation by such parties of the transactions contemplated hereby, except for
those consents or approvals set forth on Schedule 5.6.

5.7. Finder's Fee. Except as disclosed on Schedule 5.7, neither
Vision 21 nor the Subsidiary has incurred any obligation for any finder's,
broker's or agent's fee in connection with the transactions contemplated hereby.

5.8. Capital Stock. The issuance and delivery by Vision 21 of
shares of Vision 21 Common Stock in connection with the Merger have been duly
and validly authorized by all necessary corporate action on the part of Vision
21. The shares of Vision 21 Common Stock to be issued in connection with the
Merger, when issued in accordance with the terms of this Agreement, will be
validly issued, fully paid and nonassessable and will not have been issued in
violation of any preemptive rights, rights of first refusal or similar rights of
any of Vision 21's stockholders, or any federal or state law, including, without
limitation, the registration requirements of applicable federal and state
securities laws.

5.9. Continuity of Business Enterprise. It is the present intention
of the Subsidiary to continue at least one significant historic business line of
the Company, or to use at least a significant portion of the Company's historic
business assets in a business, in each case within the meaning of Treasury
Regulation Section 1.368-1(d).

5.10. Vision 21 Financial Statements. The audited consolidated
balance sheet and related statements of income and cash flows of Vision 21 for
its prior three (3) full fiscal years, and its unaudited interim balance sheet
for the fiscal quarter ended March 31, 1997 and the related unaudited statement
of income of Vision 21 for the period then ended, including the costs incurred
during such periods associated with any Registration Statement (collectively,
with the related notes thereto, the "Vision 21 Financial Statements"), (a)
fairly present the financial condition and results of operations of Vision 21 as
of the dates and for the periods indicated; and (b) have been prepared in
conformity with GAAP (subject to normal year-end adjustments and the absence of
notes for any unaudited interim financial statement), except as otherwise
indicated in the Vision 21 Financial Statements.

5.11. Liabilities and Obligations. Except as disclosed on Schedule
5.11, the Vision 21 Financial Statements reflect all material liabilities of
Vision 21, accrued, contingent or otherwise, that would be required to be
reflected on a balance sheet, or in the notes thereto, prepared in accordance
with GAAP. Except as set forth on Schedule 5.11 or in the Vision 21 Financial
Statements, Vision 21 is not liable upon or with respect to, or obligated in any
other

<PAGE> 35

way to provide funds in respect of or to guarantee or assume in any manner, any
debt, obligation or dividend of any person, corporation, association,
partnership, joint venture, trust or other entity, and Vision 21 does not know
of any valid basis for the assertion of any other claims or liabilities of any
nature or in any amount.

5.12. Compliance with Laws. Vision 21 and the Subsidiary have not
failed to comply with any applicable laws, regulations and licensing
requirements or failed to file with the proper authorities any necessary
statements and reports except where the failure to so comply or file would not,
individually or in the aggregate, result in a Material Adverse Effect. There are
no existing violations by Vision 21 or the Subsidiary of any federal, state or
local law or regulation that could, individually or in the aggregate, result in
a Material Adverse Effect. Vision 21 and the Subsidiary possess all necessary
licenses, franchises, permits and governmental authorizations for the conduct of
Vision 21's and the Subsidiary's respective businesses as now conducted and
after the Closing, as contemplated by this Agreement. The transactions
contemplated by this Agreement will not result in a default under or a breach or
violation of, or adversely affect the rights and benefits afforded by any such
licenses, franchises, permits or government authorizations, except for any such
default, breach or violation that would not, individually or in the aggregate,
have a Material Adverse Effect. Since January 1, 1993, Vision 21 and the
Subsidiary have not received any notice from any federal, state or other
governmental authority or agency having jurisdiction over their respective
properties or activities, or any insurance or inspection body, that their
respective operations or any of their respective properties, facilities,
equipment, or business practices fail to comply with any applicable law,
ordinance, regulation, building or zoning law, or requirement of any public or
quasi-public authority or body, except where failure to so comply would not,
individually or in the aggregate, have a Material Adverse Effect.

5.13. Insolvency Proceedings. Neither Vision 21 nor the Subsidiary
are currently under the jurisdiction of a Federal or state court in a Title 11
or similar case within the meaning of Section 368(a)(3)(A) of the Code.

5.14. Equal Exchange. Vision 21 and the Subsidiary believe that the
fair market value of all the Company Common Stock shall be approximately equal
to the fair market value of the Merger Consideration at the Effective Time.

5.15. Employment of Company's Employees. Neither Vision 21 nor the
Subsidiary currently intends to change the existing composition or employment
terms of any of the non-professional personnel which have employment
arrangements with the Company on the effective date of this Agreement (except as
is necessary for the Subsidiary and/or Vision 21 to employ such individuals
pursuant to the Business Management Agreement). The Subsidiary and Vision 21
reserve the right, however, to change the number, composition or employment
terms of such non-professional personnel in the future.

<PAGE> 36

6. CLOSING DATE REPRESENTATIONS AND WARRANTIES OF THE PHYSICIAN. The
Physician represents and warrants that, except as disclosed in the Schedules,
the following will be true and correct on the Closing Date as if made on that
date:

6.1. Organization and Good Standing; Qualification. New P.C. is a
professional corporation duly organized, validly existing and in good standing
under the laws of the State, with all requisite corporate power and authority to
carry on the business in which it intends to engage, to own the properties it
intends to own, and to execute and deliver the Business Management Agreement and
the Physician Employment Agreements and consummate the transactions and perform
the services contemplated thereby. New P.C. is duly qualified and licensed to do
business and is in good standing in all jurisdictions where the nature of its
intended business makes such qualification necessary.

6.2. Capitalization. The authorized capital stock of New P.C.
consists of _____ shares of New P.C. Common Stock, of which ______ shares are
issued and outstanding, and no shares of capital stock of New P.C. are held in
treasury. The Physician owns all of the issued and outstanding shares of New
P.C.'s common stock, free and clear of all security interests, liens, adverse
claims, encumbrances, equities, proxies and shareholders' agreements. Each
outstanding share of New P.C.'s common stock has been legally and validly issued
and is fully paid and nonassessable. There exist no options, warrants,
subscriptions or other rights to purchase, or securities convertible into or
exchangeable for, any of the authorized or outstanding securities of New P.C. No
shares of capital stock of New P.C. have been issued or disposed of in violation
of the preemptive rights, rights of first refusal or similar rights of any of
New P.C.'s stockholders.

6.3. Corporate Records. The copies of the Articles or Certificate of
Incorporation and Bylaws, and all amendments thereto, of New P.C. that have been
delivered or made available to Vision 21 and the Subsidiary are true, correct
and complete copies thereof, as in effect on the Closing Date. The minute books
of New P.C., copies of which have been delivered or made available to Vision 21
and the Subsidiary, contain accurate minutes of all meetings of, and accurate
consents to all actions taken without meetings by, the Board of Directors (and
any committees thereof) and the stockholders of New P.C. since its formation.

6.4. Authorization and Validity. The execution, delivery and
performance by New P.C. of the Business Management Agreement, the Physician
Employment Agreements, the Optometrist Employment Agreements and the other
agreements contemplated thereby, and the consummation of the transactions and
provisions of services contemplated thereby, have been duly authorized by New
P.C. The Business Management Agreement, the Physician Employment Agreements, the
Optometrist Employment Agreements and each other agreement contemplated thereby
will be as of the Closing Date duly executed and delivered by New P.C. and will
constitute legal, valid and binding obligations of New P.C. enforceable against
New P.C. 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.

<PAGE> 37

6.5. No Violation. Neither the execution, delivery or performance of
the Business Management Agreement, the Physician Employment Agreements, the
Optometrist Employment Agreements or the other agreements contemplated thereby
nor the consummation of the transactions or provision of services contemplated
thereby will (a) conflict with, or result in a violation or breach of the terms,
conditions or provisions of, or constitute a default under, the Articles or
Certificate of Incorporation or Bylaws of New P.C., or (b) to the actual
knowledge of the Physician, violate or conflict with any judgment, decree,
order, statute, rule or regulation of any court or any public, governmental or
regulatory agency or body.

6.6. No Business, Agreements, Assets or Liabilities. New P.C. has
not commenced business since its incorporation. Other than its Articles or
Certificate of Incorporation and Bylaws, and as of the Closing Date, the
Business Management Agreement, the Physician Employment Agreements, the
Optometrist Employment Agreements, the Employee Benefit Plans and the other
contracts or agreements listed on Schedule 6.6, New P.C. is not a party to or
subject to any agreement, indenture or other instrument. New P.C. does not own
any assets (tangible or intangible) other than the consideration received upon
the issuance of shares of capital stock and New P.C. does not have any
liabilities, accrued, contingent or otherwise (known or unknown and asserted or
unasserted).

6.7. Compliance with Laws. New P.C. has complied with all applicable
laws, regulations and licensing requirements and has filed with the proper
authorities all necessary statements and reports, except where failure to so
comply or file would not, individually or in the aggregate, have a material
adverse effect on the business, operations or financial condition of New P.C.

7. SECURITIES LAW MATTERS.

7.1. Investment Representations and Covenants of Physician.

a. Physician understands that the Securities will not be
registered under the Securities Act or any state securities laws on the grounds
that the issuance of the Securities is exempt from registration pursuant to
Section 4(2) of the Securities Act under the Securities Act and applicable state
securities laws, and that the reliance of Vision 21 on such exemptions is
predicated in part on the Physician's representations, warranties, covenants and
acknowledgements set forth in this Section.

b. Except as disclosed on Schedule 7.1(b) attached hereto,
Physician represents and warrants that Physician is an "accredited investor" or
"sophisticated investor" as defined under the Securities Act and state "Blue
Sky" laws, or that Physician has utilized, to the extent necessary to be deemed
a sophisticated investor under the Securities Act and State "Blue Sky" laws, the
assistance of a professional advisor.

c. Physician represents and warrants that the Securities to be
acquired by Physician upon consummation of the transactions described in this
Agreement will

<PAGE> 38

be acquired by Physician for Physician's own account, not as a nominee or agent,
and without a view to resale or other distribution within the meaning of the
Securities Act and the rules and regulations thereunder, except as contemplated
in this Agreement, and that Physician will not distribute any of the Securities
in violation of the Securities Act. All Securities shall bear a restrictive
legend in substantially the following form:

"THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933 (THE "ACT") AND MAY ONLY BE SOLD OR OTHERWISE
TRANSFERRED IF THE HOLDER HEREOF COMPLIES WITH THE ACT AND APPLICABLE
SECURITIES LAWS."

In addition, the Securities shall bear any legend required by the
securities or "Blue Sky" laws of any state where Physician resides as well as
any other legend deemed appropriate by Vision 21 or its counsel.

d. Physician represents and warrants that the address set forth
below Physician's name on Schedule 7.1(d) is Physician's principal residence.

e. Physician (i) acknowledges that the Securities issued to
Physician at the Closing must be held indefinitely by Physician unless
subsequently registered under the Securities Act or an exemption from
registration is available, (ii) is aware that any routine sales of Securities
made pursuant to Rule 144 under the Securities Act may be made only in limited
amounts and in accordance with the terms and conditions of that Rule and that in
such cases where the Rule is not applicable, compliance with some other
registration exemption will be required, (iii) is aware that Rule 144 is not
currently available for use by Physician for resale of any of the Securities to
be acquired by Physician upon consummation of the transactions described in this
Agreement, and (iv) acknowledges and agrees that the transfer of the Securities
shall be further restricted by the "lock-up" provisions contained in the
Registration Rights Agreement in the form of Exhibit 13.1(o), whereby Physician
shall be treated as an "affiliate" of Vision 21 under Rule 144.

f. Physician represents and warrants to Vision 21 that
Physician, either alone or together with the assistance of Physician's own
professional advisor, has such knowledge and experience in financial and
business matters such that Physician is capable of evaluating the merits and
risks of Physician's investment in any of the Securities to be acquired by
Physician upon consummation of the transactions described in this Agreement.

g. Physician confirms that Physician has received and read the
Confidential Information Memorandum of Vision 21 dated December 17, 1996, as
supplemented on February 28, 1997, and any further amendments or revisions
thereto. Physician also confirms that Physician has had the opportunity to ask
questions of and receive answers from Vision 21 concerning the terms and
conditions of Physician's investment in the Securities, and the Physician has
received to Physician's satisfaction, such additional information, in addition

<PAGE> 39

to that set forth herein, about Vision 21's operations and the terms and
conditions of the offering as Physician has requested.

h. In order to ensure compliance with the provisions of
paragraph (c) hereof, Physician agrees that after the Closing Physician will not
sell or otherwise transfer or dispose of Securities or any interest therein
(unless such shares have been registered under the Securities Act) without first
complying with either of the following conditions, the expenses and costs of
satisfaction of which shall be fully borne and paid for by Physician:

i) Vision 21 shall have received a written legal opinion
from legal counsel, which opinion and counsel shall be satisfactory to Vision 21
in the exercise of its reasonable judgment, or a copy of a "no-action" or
interpretive letter of the Securities and Exchange Commission specifying the
nature and circumstances of the proposed transfer and indicating that the
proposed transfer will not be in violation of any of the registration provisions
of the Securities Act and the rules and regulations promulgated thereunder; or

ii) Vision 21 shall have received an opinion from its own
counsel to the effect that the proposed transfer will not be in violation of any
of the registration provisions of the Securities Act and the rules and
regulations promulgated thereunder.

Physician also agrees that the certificates or instruments representing the
Securities to be issued to Physician pursuant to this Agreement may contain a
restrictive legend noting the restrictions on transfer described in this Section
and required by federal and applicable state securities laws, and that
appropriate "stop-transfer" instructions will be given to Vision 21's transfer
agent, if any, provided that this Section 7.1(h) shall no longer be applicable
to any Securities following their transfer pursuant to a registration statement
effective under the Securities Act or in compliance with Rule 144 or if the
opinion of counsel referred to above is to the further effect that transfer
restrictions and the legend referred to herein are no longer required in order
to establish compliance with any provisions of the Securities Act.

i. Physician understands that although an Initial Public
Offering is contemplated by Vision 21, there are no assurances that an Initial
Public Offering will occur or if it does occur that it will be successful.

j. Physician agrees that he shall be considered an "affiliate"
of Vision 21 for purposes of Rule 144 and agrees to the restrictions and
limitations imposed by Rule 144 on affiliates. Physician further agrees that he
shall be considered an affiliate of Vision 21 for Rule 144 purposes even if he
does not meet the technical definition of "affiliate" under Rule 144.

7.2. Current Public Information. At all times following the
registration of any of Vision 21's securities under the Securities Act or
Exchange Act pursuant to which Vision 21 becomes subject to the reporting
requirements of the Exchange Act, Vision 21 shall use

<PAGE> 40

commercially reasonable efforts to comply with the requirements of Rule 144
under the Securities Act, as such Rule may be amended from time to time (or any
similar rule or regulation hereafter adopted by the SEC) regarding the
availability of current public information to the extent required to enable any
holder of shares of Common Stock to sell such shares without registration under
the Securities Act pursuant to Rule 144 (or any similar rule or regulation).

8. COVENANTS OF THE COMPANY AND THE PHYSICIAN. The Company and the
Physician, jointly and severally, agree that between the date hereof and the
Closing (with respect to the Company's covenants, the Physician agrees to use
his best efforts to cause the Company to perform):

8.1. Consummation of Agreement. The Company and the Physician shall
use their best efforts to cause the consummation of the transactions
contemplated hereby in accordance with their terms and conditions; provided,
however, that this covenant shall not require the Company or the Physician to
make any expenditures that are not expressly set forth in this Agreement or
otherwise contemplated herein.

8.2. Business Operations. The Company shall operate its business in
the ordinary course. The Company and the Physician shall use their best efforts
to preserve the business of the Company intact. Neither the Company nor the
Physician shall take any action that would, individually or in the aggregate,
result in a Material Adverse Effect.

8.3. Access. The Company and the Physician shall, at reasonable
times during normal business hours and on reasonable notice, permit Vision 21
and its authorized representatives, including without limitation, the
Accountants, reasonable access to, and make available for inspection, all of the
assets and business of the Company, including its employees, customers and
suppliers, and permit Vision 21 and its authorized representatives to inspect
and, at Vision 21's sole cost and expense, make copies of all documents, records
(other than patient medical records) and information with respect to the affairs
of the Company, including, without limitation, the Financial Statements, as
Vision 21 and its representatives may request, all for the sole purpose of
permitting Vision 21 to become familiar with the business and assets and
liabilities of the Company.

8.4. Notification of Certain Matters. The Company and the Physician
shall promptly inform Vision 21 in writing of (a) any notice of, or other
communication relating to, a default or event that, with notice or lapse of time
or both, would become a default, received by the Company or the Physician
subsequent to the date of this Agreement and prior to the Effective Time under
any Commitment material to the Company's condition (financial or otherwise),
operations, assets, liabilities or business and to which it is subject; or (b)
any material adverse change in the Company's condition (financial or otherwise),
operations, assets, liabilities or business.

<PAGE> 41

8.5. Approvals of Third Parties. As soon as practicable after the
date hereof, the Company and the Physician shall secure all necessary approvals
and consents of landlords to the consummation of the transactions contemplated
hereby and shall use their best efforts to secure all necessary approvals and
consents of other third parties to the consummation of the transactions
contemplated hereby; provided, however, that this covenant shall not require the
Company or the Physician to make any material expenditures that are not
expressly set forth in this Agreement or otherwise contemplated herein.

8.6. Employee Matters. Except as set forth in Schedule 3.13 or as
otherwise contemplated by this Agreement, the Company shall not, without the
prior written approval of Vision 21, except as required by law:

a. increase the cash compensation of the Physician or any other
employees of the Company (other than in the ordinary course of business and
consistent with past practice);

b. adopt, amend or terminate any Compensation Plan;

c. adopt, amend or terminate any Employment Agreement;

d. adopt, amend or terminate any Employee Policies and
Procedures;

e. adopt, amend or terminate any Employee Benefit Plan;

f. take any action that could deplete the assets of any
Employee Benefit Plan, other than payment of benefits in the ordinary course to
participants and beneficiaries;

g. fail to pay any premium or contribution due or with respect
to any Employee Benefit Plan;

h. fail to file any return or report with respect to any
Employee Benefit Plan;

i. institute, settle or dismiss any employment litigation
except as could not, individually or in the aggregate, result in a Material
Adverse Effect;

j. enter into, modify, amend or terminate any agreement with
any union, labor organization or collective bargaining unit; or

k. take or fail to take any action with respect to any past or
present employee of the Company that would, individually or in the aggregate,
result in a Material Adverse Effect.

<PAGE> 42

8.7. Contracts. Except with Vision 21's prior written consent, the
Company shall not assume or enter into any contract, lease, license, obligation,
indebtedness, commitment, purchase or sale except in the ordinary course of
business that is material to the Company's business, nor will it waive any
material right or cancel any material contract, debt or claim.

8.8. Capital Assets; Payments of Liabilities. The Company shall not,
without the prior written approval of Vision 21 (a) acquire or dispose of any
capital asset having a fair market value of $5,000 or more, or acquire or
dispose of any capital asset outside of the ordinary course of business or (b)
discharge or satisfy any lien or encumbrance or pay or perform any obligation or
liability other than (i) liabilities and obligations reflected in the Financial
Statements or (ii) current liabilities and obligations incurred in the usual and
ordinary course of business since the Company Balance Sheet Date and, in either
case (i) or (ii) above, only as required by the express terms of the agreement
or other instrument pursuant to which the liability or obligation was incurred.

8.9. Mortgages, Liens and Guaranties. The Company shall not, without
the prior written approval of Vision 21, enter into or assume any mortgage,
pledge, conditional sale or other title retention agreement, permit any security
interest, lien, encumbrance or claim of any kind to attach to any of its assets
(other than statutory liens arising in the ordinary course of business and other
liens that do not materially detract from the value or interfere with the use of
such assets), whether now owned or hereafter acquired, or guarantee or otherwise
become contingently liable for any obligation of another, except obligations
arising by reason of endorsement for collection and other similar transactions
in the ordinary course of business, or make any capital contribution or
investment in any person.

8.10. Acquisition Proposals. The Company and the Physician agree
that from the date of this Agreement through the earlier of the Closing Date or
January 1, 1997, (a) neither the Physician nor the Company nor any of its
officers and directors shall, and the Physician and the Company shall direct and
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 Acquisition Proposal or
engage in any negotiations concerning, or provide any confidential information
or data to, or have any discussions with, any person relating to an Acquisition
Proposal, or otherwise facilitate any effort or attempt to make or implement an
Acquisition Proposal; (b) the Physician and the Company will immediately cease
and cause to be terminated any existing activities, discussions or negotiations
with any parties conducted heretofore with respect to any of the foregoing and
each will take the necessary steps to inform the individuals or entities
referred to in the first sentence hereof of the obligations undertaken in this
Section 8.10; and (c) the Physician and the Company will notify Vision 21
immediately if any such inquiries or proposals are received by, any such
information is requested from, or any such negotiations or discussions are
sought to be initiated or continued with, the Company or the Physician.

<PAGE> 43

8.11. Distributions and Repurchases. Except as contemplated in this
Agreement, no distribution, payment or dividend of any kind will be declared or
paid by the Company with respect of its capital stock, nor will any repurchase
of any of the Company's capital stock be approved or effected.

8.12. Requirements to Effect the Merger. The Company and the
Physician shall use their best efforts to take, or cause to be taken, all
actions necessary to effect the Merger 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.

8.13. Physician Accounts Payable and Physician Retained Equity. The
Company shall, and the Physician shall cause the Company to, pay in a timely
manner the accounts payable of the Physician. Except as contemplated in this
Agreement, the Company shall not, and the Physician shall not permit the Company
to, make payment of all or any portion of any retained equity of the Company at
any time prior to Closing.

8.14. New P.C. Spinoff. The Company shall form, organize and
incorporate New P.C. in the State and the Articles or Certificate of
Incorporation and Bylaws of New P.C. shall be in form and substance reasonably
satisfactory to Vision 21. The Company shall not permit New P.C. to commence
business until the Closing Date. On or prior to the Closing, Company shall take
all actions and execute all documents, agreements or instruments necessary to
transfer to New P.C. the Company's medical business and to transfer good,
valuable, and marketable title to all of the Company's Medical Assets in
exchange for the assumption by New P.C. of the Excluded Liabilities and the
issuance by the New P.C. to the Company of all of the issued and outstanding
shares of New P.C. common stock. Prior to the Closing, the Company shall declare
and make a distribution to Physician of all of the issued and outstanding shares
of New P.C. common stock.

8.15. Licenses and Permits. The Company and the Physician shall
cooperate fully with Vision 21 to obtain all licenses, permits, approvals or
other authorizations required under any law, statute, rule, regulation or
ordinance, or otherwise necessary or desirable to provide the services of New
P.C., the Physician and the Professional Employees contemplated by the Business
Management Agreement and the Physician Employment Agreements, and to conduct the
intended business of New P.C.

8.16. Physician Employment Agreements. The Company and the Physician
shall cause, at or immediately prior to Closing, each Physician Employee (except
for those non-shareholder Physician Employees identified on Schedule 8.16) who
is then an employee of the Company and Physician agrees at or immediately prior
to Closing (i) to terminate his employment agreement, if any, with the Company
by mutual consent without any liability therefor on the part of the Company and
(ii) to enter into a new Physician Employment Agreement with New P.C. in
accordance with the terms of the Business Management Agreement.

<PAGE> 44

8.17. Optometrist Employment Agreements. The Company and the
Physician shall cause, at or immediately prior to Closing, each Optometrist
Employee (except for those Optometrist Employees identified on Schedule 8.17)
who is then an employee of the Company (i) to terminate his employment
agreement, if any, with the Company by mutual consent without any liability
therefor on the part of the Company and (ii) to enter into a new Optometrist
Employment Agreement with New P.C. in accordance with the Business Management
Agreement.

8.18. Termination of Retirement Plans. Prior to Closing, the
Physician shall cause the Company to take all steps necessary to discontinue
benefits accruals under any Employee Benefit Plan that is intended to be a
qualified employee retirement plan under Section 401(a) of the Code (a
"Retirement Plan") effective as of Closing or as soon thereafter as may be
practical. Effective at the time of Closing, the Company shall cause New P.C. to
assume all of the obligations of the Company as the sponsoring employer and/or
plan administrator of the Retirement Plan in compliance with applicable law.

Subsequent to Closing, New P.C. and Vision 21 shall review the
extent to which New P.C. can resume contributions to the Retirement Plan without
violating the qualification requirements of Sections 410(b) and 401(a)(4) of the
Code taking into account any employees of Vision 21 or the Subsidiary who would
be "leased employees" of New P.C. under Section 414(n) of the Code. If Vision 21
and New P.C. mutually agree that such qualification requirements can be
satisfied, New P.C. may elect to continue the Retirement Plan and make
contributions in accordance with its terms, provided that New P.C. shall agree
to cover at its own expense any Vision 21 or Subsidiary employees who are leased
employees if such coverage is required to maintain the tax-qualified status of
the Retirement Plan.

8.19. Delivery of Schedules. The Company and the Physician shall
deliver to Vision 21 and the Subsidiary all Schedules required to be delivered
by them prior to the Closing.

8.20. Conversion of Company. After the transfer of the Medical
Assets of the Company to New P.C. and the assumption of the Excluded Liabilities
by New P.C. and prior to Closing, Physician shall cause the Company to take such
action and file such documents or instruments as may be necessary to convert the
Company into a general business corporation in accordance with applicable law.

8.21. Assignment of Fees for Medical and Optometry Services. On or
prior to the Closing Date, the Company shall obtain an irrevocable assignment
from all Professional Employees of any and all of their rights to receive
payment for the provision of ophthalmology or optometry services which are part
of the Accounts Receivable to the Company existing on the Closing Date, except
for those fees specified and set forth on Schedule 8.21. Each Professional
Employee shall undertake to endorse any payments received on account of such
services to the order of the Company and to take such other action as may be
necessary to confirm to the Company the rights to collect and retain for its own
account such Accounts Receivable. The

<PAGE> 45

Company shall cause its Professional Employees to agree that such security
interest of such lender(s) is intended to be a first priority security interest
and is superior to any right, title or interest which may be asserted by such
Professional Employees with respect to the Accounts Receivable or the proceeds
thereof. In the event that the assignment of rights described in this Section
shall be deemed, for any reason, to be ineffective as an outright assignment,
the Company shall cause each Professional Employee to agree that such
Professional Employee shall be deemed, effective as of the Closing Date, to have
granted to the Company a first priority lien on and security interest in and to
any and all interests of such Professional Employee in any of the Accounts
Receivable, and all proceeds with respect thereto, to secure the collection by
the Company of all Accounts Receivable, and this Agreement shall be deemed to be
a security agreement to the extent necessary to give effect to the foregoing.
The Company shall cause each Professional Employee to execute and deliver, all
such financing statements as the Company or Vision 21 may request in order to
perfect such security interest. The Company shall not suffer any Professional
Employee to grant any other lien on or security interest in or to such Accounts
Receivable or any proceeds thereof.

9. COVENANTS OF VISION 21 AND THE SUBSIDIARY. Vision 21 and the
Subsidiary agree that between the date hereof and the Closing:

9.1. Consummation of Agreement. Vision 21 and the Subsidiary shall
use their best efforts to cause the consummation of the transactions
contemplated hereby in accordance with their terms and conditions and take all
corporate and other actions necessary to approve the Merger; provided, however,
that this covenant shall not require Vision 21 or the Subsidiary to make any
expenditures that are not expressly set forth in this Agreement or otherwise
contemplated herein.

9.2. Efforts to Effect. Vision 21 and the Subsidiary will use their
best efforts to take, or cause to be taken, all actions necessary to effect the
Merger 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.

9.3. Notification of Certain Matters. Vision 21 and the Subsidiary
shall promptly inform the Company and the Physician in writing of (a) any notice
of, or other communication relating to, a default or event that, with notice or
lapse of time or both, would become a default, received by Vision 21 or the
Subsidiary subsequent to the date of this Agreement and prior to the Effective
Time under any agreement or commitment entered into by Vision 21 material to
Vision 21's condition (financial or otherwise), operations, assets, liabilities
or business and to which it is subject; or (b) any material adverse change in
Vision 21's condition (financial or otherwise), operations, assets, liabilities
or business.

9.4. Approvals of Third Parties. Vision 21 and the Subsidiary shall
use their best efforts to secure, as soon as practicable after the date hereof,
all necessary approvals and consents of third parties to the consummation of the
transactions contemplated hereby.

<PAGE> 46

9.5. Licenses and Permits. Vision 21 and the Subsidiary shall use
their best efforts to obtain all licenses, permits, approvals or other
authorizations required under any law, statute, rule, regulation or ordinance,
or otherwise necessary or desirable to consummate the transactions or provide
the services contemplated by the Business Management Agreement and to conduct
the intended business of Vision 21 and the Subsidiary.

9.6. Release of Physician From Practice Liabilities. Vision 21 and
the Subsidiary shall use their best efforts to obtain from third party creditors
the release of Physician from any personal liabilities relating to the Practice
which are identified on Schedule 9.6 and assumed by the Subsidiary pursuant to
the terms of this Agreement.

10. COVENANTS OF VISION 21, THE SUBSIDIARY, THE COMPANY AND THE
PHYSICIAN. Vision 21, the Subsidiary, the Company and the Physician agree as
follows (with respect to New P.C.'s covenants, the Physician agrees to cause New
P.C. to perform):

10.1. Filings; Other Action.

a. Vision 21, the Subsidiary and the Physician shall
cooperate to promptly prepare and file at Vision 21's expense with the SEC, a
Registration Statement on Form S-1 (or other appropriate form) to be filed by
Vision 21 in connection with any Initial Public Offering of Vision 21 (including
the prospectus constituting a part thereof, the "Registration Statement").
Vision 21 and the Subsidiary shall obtain all necessary state securities law or
"Blue Sky" permits and approvals required to carry out the transactions
contemplated by this Agreement, and the Company and the Physician shall furnish
all information concerning the Company, the New P.C., the Nonmedical Assets and
the Physician as may be reasonably requested in connection with any such action.

b. Each of the Company, the Physician, Vision 21 and the
Subsidiary represents and warrants that none of the information or documents
supplied or to be supplied by it specifically for inclusion in a Registration
Statement, by exhibit or otherwise, will, at the time the Registration Statement
and each amendment and supplement thereof, if any, becomes effective under the
Securities Act, contain any untrue statement of a material fact or omit to state
any material fact required to be stated therein or necessary to make the
statements therein, in the light of the circumstances under which they were
made, not misleading. The Company, the Physician, Vision 21 and the Subsidiary
shall agree as to the information and documents supplied by the Company and the
Physician for inclusion in the Registration Statement and shall indicate such
information and documents in a letter to be delivered at least ten (10) days
prior to the initial filing of the Registration Statement with the SEC. The
Company and the Physician shall be entitled to review the Registration Statement
and each amendment thereto, if any, prior to the time each becomes effective
under the Securities Act.

c. The Physician and the Company shall, upon request,
furnish Vision 21 and the Subsidiary with all information concerning himself,
itself, their respective partners, the Company's subsidiaries, directors,
officers, and stockholders, and including

<PAGE> 47

financial statements with respect to the same, any consents (and information
necessary to obtain such consents) and such other matters as may be reasonably
requested by Vision 21 in connection with the preparation of the Registration
Statement and each amendment or supplement thereto, or any other statement,
filing, notice or application made by or on behalf of each such party or any of
the Company's subsidiaries to any governmental entity in connection with the
Merger, any Initial Public Offering and the other transactions contemplated by
this Agreement.

10.2. Amendment of Schedules. Each party hereto agrees that,
with respect to the representations and warranties of such party contained in
this Agreement, such party shall have the continuing obligation until the
Closing to attach, supplement or amend promptly the Schedules with respect to
any matter that would have been or would be required to be set forth or
described in the Schedules in order to not materially breach any representation,
warranty or covenant of such party contained herein; provided that no amendment
or supplement to a Schedule that constitutes or reflects a material adverse
change to the Company or the Nonmedical Assets may be made unless Vision 21
consents to such amendment or supplement, and no amendment or supplement to a
Schedule that constitutes or reflects a material adverse change to Vision 21 may
be made unless the Company and the Physician consent to such amendment or
supplement. For all purposes of this Agreement, including without limitation for
purposes of determining whether the conditions set forth in Sections 11.1 and
12.1 have been fulfilled, the Schedules hereto shall be deemed to be the
Schedules as amended or supplemented pursuant to this Section 10.2. In the event
that the Company is required to amend or supplement a Schedule in accordance
with this Section 10.2 and Vision 21 does not consent to such amendment or
supplement, or Vision 21 is required to amend or supplement a Schedule in
accordance with this Section 10.2 and the Company and the Physician do not
consent, this Agreement shall be deemed terminated by mutual consent as set
forth in Section 16.1(d) or Section 16.1(e) as appropriate.

10.3. Business Management Agreement. The Company and the
Physician shall use their best efforts to cause the Business Management
Agreement to be executed and delivered by New P.C. on or prior to the Closing
Date, which shall be considered a Nonmedical Asset of the Company and shall be
acquired by the Subsidiary in the Merger.

10.4. Fees and Expenses.

a. If the Merger closes, Vision 21 shall pay all costs of
the Audit of the Company's Financial Statements and financial records by Vision
21's auditors (or auditors designated by Vision 21's auditors). All items
prepared by Vision 21's auditors in connection with the Audit ("Prepared Audit
Materials") shall be for use solely by Vision 21; provided, however, that the
Company may utilize the Prepared Audit Materials solely in connection with its
review of Vision 21's calculation of the Merger Consideration. The Prepared
Audit Materials shall not be deemed to include those items which customarily
remain the property of auditors such as their working papers and memos. If the
Merger does not close, the Company shall pay for or reimburse Vision 21 for all
expenses of Vision 21's auditors in connection with the audit.

<PAGE> 48

b. In the event the Merger is not consummated, the
Company and Physician shall not be entitled to copies or originals of the
Prepared Audit Materials unless the Company or Physician pays for or reimburses
Vision 21 for all expenses of the auditor in connection with the Audit in
advance of receiving the Prepared Audit Materials (either from Vision 21 or its
auditor). For purposes of this Agreement, Audit expenses shall include all
expenses related to the Audit as well as all expenses incurred to present the
financial statements in accordance with GAAP and all schedules related thereto.

c. Vision 21 shall pay all cost of a medicare audit of
the Company. The Company shall agree in writing that all information obtained in
connection with the Medicare audit shall be made available to Vision 21. The
Company and Physician shall not be entitled to copies or originals of the
Medicare audit material unless the Company or Physician pays for or reimburses
Vision 21 for such audit expenses in advance of receiving the Medicare audit
materials (either from Vision 21 or its auditor).

d. Each of the Company, Physician and Vision 21 shall pay
the costs and expenses of their own legal counsel with respect to legal services
rendered in connection with the preparation and negotiation of this Agreement
and the Merger contemplated hereby.

e. In the event that an Initial Public Offering does not
take place for any reason whatsoever, Vision 21 (but not the Company or the
Physician) shall have sole responsibility for the payment of all legal fees
(except as set forth in Section 11.4(c)), accounting fees (except as set forth
in Section 10.4(a)), underwriters' expenses and other fees, costs and expenses
associated solely in connection with the preparation of any Registration
Statement relating to such Initial Public Offering.

f. If any Initial Public Offering is consummated as
contemplated by this Agreement, all legal fees, audit fees, printing costs,
filing fees, blue sky fees and underwriters' discounts and fees associated
solely with the Initial Public Offering shall be paid by Vision 21 from the
proceeds of the Initial Public Offering, except for those expenses, fees and
underwriters' discounts related to any shares sold by the Physician.

11. CONDITIONS PRECEDENT OF VISION 21 AND THE SUBSIDIARY. Except as may
be waived in writing by Vision 21 and the Subsidiary, the obligations of Vision
21 and the Subsidiary hereunder are subject to the fulfillment at or prior to
the Closing Date of each of the following conditions precedent:

11.1. Representations and Warranties. The representations and
warranties of the Company and the Physician contained herein shall have been
true and correct in all material respects when initially made and shall be true
and correct in all material respects as of the Closing Date.

<PAGE> 49

11.2. Covenants. The Company and the Physician shall have
performed and complied in all material respects with all covenants required by
this Agreement to be performed and complied with by the Company or the Physician
prior to the Closing Date.

11.3. Legal Opinion. Counsel to the Company and the Physician
shall have delivered to Vision 21 and the Subsidiary their opinions, dated as of
the Closing Date, in form and substance substantially similar to Exhibit 11.3
which Vision 21, the Subsidiary, Vision 21's and the Subsidiary's counsel, the
underwriters of the Initial Public Offering and their counsel shall be permitted
to rely upon.

11.4. Proceedings. No action, proceeding or order by any court or
governmental body or agency shall have been threatened orally or in writing,
asserted, instituted or entered to restrain or prohibit the carrying out of the
transactions contemplated hereby.

11.5. No Material Adverse Change. No material adverse change in
the condition (financial or otherwise), operations, assets, liabilities or
business of the Company shall have occurred since the Company Balance Sheet
Date, whether or not such change shall have been caused by the deliberate act or
omission of the Company or the Physician.

11.6. Government Approvals and Required Consents. The Company, the
Physician, New P.C., Vision 21 and the Subsidiary shall have obtained all
necessary government and other third-party approvals and consents (other than
consents technically required as a result of the transactions contemplated
hereby under the terms of managed care contracts to which the Company or any of
its employees are a party).

11.7. Certification. None of the Company, the Physician or New
P.C. shall have received any notice of or been made a party to any judicial or
administrative proceeding, or threatened to so be made a party, in any action or
proceeding that seeks to deny the continued use or receipt of any necessary
permit, license, authorization, certification or approval under the Medicare and
Medicaid programs to provide ophthalmology or optometry services.

11.8. Closing Deliveries. Vision 21 and the Subsidiary shall have
received all documents and agreements, duly executed and delivered in form
reasonably satisfactory to Vision 21 and the Subsidiary, referred to in Section
13.1.

11.9. Due Diligence. Vision 21 shall have completed to its
satisfaction a due diligence review of the Company and the Physician.

11.10. Financial Audit. Vision 21 shall have approved in Vision
21's sole discretion an audit of the Company and the Practice which audit shall
have been performed by an accounting firm designated by Vision 21 at the sole
expense of Vision 21.

<PAGE> 50

11.11. Medicare Audit. Vision 21 shall have approved in Vision 21's
sole discretion a Medicare audit of the Company and the Practice which audit
shall be at the sole expense of Vision 21.

11.12. Exemption Under State Securities Laws. The transfer of
Vision 21's Securities to the Physician as contemplated in this Agreement shall
qualify for one or more exemptions from registration under the State's
securities laws. Vision 21 shall pay all filing fees in connection with any
filing required to qualify the transfer of the Securities for such exemption(s).

11.13. Assignment of Professional Employees' Rights in Accounts
Receivable. The Company shall have caused the Professional Employees to assign
any and all of their rights with respect to Accounts Receivable to the Company
and shall cause such Professional Employees to execute such other agreements and
instruments as contemplated in Section 8.21.

12. CONDITIONS PRECEDENT OF THE COMPANY AND THE PHYSICIAN. Except as
may be waived in writing by the Company and the Physician, the obligations of
the Company and the Physician hereunder are subject to fulfillment at or prior
to the Closing Date of each of the following conditions precedent:

12.1. Representations and Warranties. The representations and
warranties of Vision 21 and the Subsidiary contained herein shall be true and
correct in all respects when initially made and shall be true and correct in all
material respects as of the Closing Date.

12.2. Covenants. Vision 21 and the Subsidiary shall have performed
and complied in all material respects with all covenants and conditions required
by this Agreement to be performed and complied with by them prior to the Closing
Date.

12.3. Legal Opinions. Counsel to Vision 21 and the Subsidiary shall
have delivered to the Company and the Physician their opinion, dated as of the
Closing Date, in form and substance substantially similar to Exhibit 12.3.

12.4. Proceedings. No action, proceeding or order by any court or
governmental body or agency shall have been threatened in writing, asserted,
instituted or entered to restrain or prohibit the carrying out of the
transactions contemplated hereby.

12.5. Government Approvals and Required Consents. The Company, the
Physician, New P.C., Vision 21 and the Subsidiary shall have obtained all
necessary government and other third-party approvals and consents (other than
consents technically required as a result of the transactions contemplated
hereby under the terms of managed care contracts to which the Company or any of
its employees are a party).

<PAGE> 51

12.6. Closing Deliveries. The Company, New P.C. and the Physician
shall have received all documents, instruments and agreements, duly executed and
delivered in form reasonably satisfactory to the Company, referred to in Section
13.2.

12.7. No Change in Voting or Ownership Control. There shall have
been no changes in the voting or ownership control of Vision 21 from the date
first above written to the Closing Date.

12.8. No Material Adverse Change. No material adverse change in the
condition (financial or otherwise), operations, assets, liabilities or business
of Vision 21 shall have occurred since the end of the last fiscal period
reported in the Vision 21 Financial Statements, whether or not such change shall
have been caused by the deliberate act or omission of Vision 21.

13. CLOSING DELIVERIES; ESCROW OF DOCUMENTS.

13.1. Deliveries of the Company, New P.C. and the Physician. At or
prior to May 30, 1997, the Company, New P.C. and the Physician shall deliver to
Vision 21 and the Subsidiary, c/o Shumaker, Loop & Kendrick, LLP, counsel to
Vision 21 and the Subsidiary, the following, all of which shall be in a form
reasonably satisfactory to Vision 21 and the Subsidiary and shall be held by
Shumaker, Loop & Kendrick, LLP in escrow pending Closing, pursuant to an escrow
agreement or letter in form and substance mutually acceptable to the parties
hereto:

a. a copy of resolutions of the Board of Directors of the
Company authorizing (i) the execution, delivery and performance of this
Agreement and all related documents and agreements, and (ii) the consummation of
the Merger, certified by the Secretary of the Company as being true and correct
copies of the originals thereof subject to no modifications or amendments;

b. a copy of resolutions of the Board of Directors of New
P.C. authorizing the execution, delivery and performance of the Business
Management Agreement, the Physician Employment Agreements, and all other
documents to be executed and delivered by New P.C. as contemplated by this
Agreement, certified by the Secretary of New P.C. as being true and correct
copies of the originals thereof subject to no modifications or amendments;

c. a certificate of the President of the Company, and of the
Physician, dated the Closing Date, as to the truth and correctness of the
representations and warranties of the Company and the Physician contained
herein, on and as of the Closing Date;

d. a certificate of the President of the Company, and of the
Physician, dated the Closing Date, (i) as to the performance of and compliance
in all material respects by the Company and the Physician with all covenants
contained herein on and as of the Closing Date and (ii) certifying that all
conditions precedent of the Company and the Physician to the Closing have been
satisfied;

<PAGE> 52

e. a certificate of the Secretary of the Company and the
Secretary of New P.C. certifying as to the incumbency of the directors and
officers of each such corporation and as to the signatures of such directors and
officers who have executed documents delivered pursuant to the Agreement on
behalf of each such corporation;

f. a certificate, dated within ten (10) days prior to the
Closing Date, of the Secretary of State of the respective states of
incorporation for the Company and New P.C. establishing that each such
corporation is in existence, has paid all franchise or similar taxes, if any,
and, if applicable, otherwise is in good standing to transact business in its
state of organization;

g. certificates, dated within ten (10) days prior to the
Closing Date, of the Secretaries of State of the states in which the Company and
New P.C. are qualified to do business, to the effect that each such corporation
is qualified to do business and, if applicable, is in good standing as a foreign
corporation in each of such states;

h. an opinion of counsel to the Company and Physicians dated
as of the Closing Date, in form and substance satisfactory to Vision 21 and the
Subsidiary, which Vision 21, the Subsidiary, Vision 21's and the Subsidiary's
counsel and the underwriters of any Initial Public Offering and their counsel
are permitted to rely upon and which shall include an opinion, subject to normal
and customary exceptions, that to the best of their knowledge the transactions
and arrangements contemplated by this Agreement are in conformity with State
laws, rules and regulations governing the practice of medicine.

i. all authorizations, consents, permits and licenses
referenced in Section 3.8;

j. the resignations of the directors and officers of the
Company as requested by Vision 21;

k. the executed Business Management Agreement in
substantially the form attached hereto as Exhibit 13.1(k), as revised in
accordance with changes reasonably deemed necessary or advisable by legal
counsel retained by Vision 21 and the Subsidiary in the State to address
regulatory and compliance issues;

l. an executed Physician Employment Agreement between New
P.C. and the Physician in substantially the form attached hereto as Exhibit
13.1(l);

m. an executed Physician Employment Agreement between New
P.C. and each Physician Employee who is then an employee of the Company in
substantially the form attached hereto as Exhibit 13.1(m);

<PAGE> 53

n. an executed Optometrist Employment Agreement between New
P.C. and each Optometrist Employee who is then an employee of the Company in
substantially the form attached hereto as Exhibit 13.1(n);

o. an executed Registration Rights Agreement between Vision
21 and the Physician in substantially the form attached hereto as Exhibit
13.1(o) (the "Registration Rights Agreement");

p. an executed Certificate of Merger necessary to effect the
Merger;

q. a non-foreign affidavit, as such affidavit is referred to
in Section 1445 (b) (2) of the Code, of the Physician, signed under a penalty of
perjury and dated as of the Closing Date, to the effect that the Physician is a
United States citizen or a resident alien (and thus not a foreign person) and
providing the Physician's United States taxpayer identification number;

r. if desired by Vision 21, a new lease or leases between the
landlords under each lease for real property described on Schedule 3.14(c) and
Vision 21 or the Subsidiary in form and substance reasonably satisfactory to
Vision 21 and the Subsidiary;

s. the Shares of Company Common Stock to be delivered
pursuant to Section 2.9(b); and

t. such other instrument or instruments of transfer prepared
by Vision 21 as shall be necessary or appropriate, as Vision 21 or its counsel
shall reasonably request, to carry out and effect the purpose and intent of this
Agreement.

13.2. Deliveries of Vision 21 and the Subsidiary. At or prior to
May 30, 1997, Vision 21 and the Subsidiary shall deliver to the Company and the
Physician, c/o Shumaker, Loop & Kendrick, LLP, counsel to Vision 21, the
following, all of which shall be in a form reasonably satisfactory to the
Company and the Physician and shall be held by Shumaker, Loop & Kendrick, LLP
in escrow pending Closing, pursuant to an escrow agreement or letter in form
and substance mutually acceptable to the parties hereto:

a. a copy of the resolutions of the Board of Directors of
Vision 21 authorizing (i) the execution, delivery and performance of this
Agreement, and all related documents and agreements, and (ii) the consummation
of the Merger, certified by Vision 21's Secretary as being true and correct
copies of the originals thereof subject to no modifications or amendments;

b. a copy of the resolutions of the Board of Directors of the
Subsidiary authorizing (i) the execution, delivery and performance of this
Agreement, and all related documents and agreements, and (ii) the consummation
of the Merger, certified by the

<PAGE> 54

Subsidiary's Secretary as being true and correct copies of the originals
thereof subject to no modifications or amendments;

c. a certificate of an officer of Vision 21 dated the Closing
Date as to the truth and correctness of the representations and warranties of
Vision 21 contained herein, on and as of the Closing Date;

d. a certificate of an officer of the Subsidiary dated the
Closing Date as to the truth and correctness of the representations and
warranties of the Subsidiary contained herein, on and as of the Closing Date;

e. a certificate of an officer of Vision 21 dated the Closing
Date, (i) as to the performance and compliance of Vision 21 with all covenants
contained herein on and as of the Closing Date and (ii) certifying that all
conditions precedent of Vision 21 to the Closing have been satisfied;

f. a certificate of an officer of the Subsidiary dated the
Closing Date, (i) as to the performance and compliance of the Subsidiary with
all covenants contained herein on and as of the Closing Date and (ii) certifying
that all conditions precedent of the Subsidiary to the Closing have been
satisfied;

g. certificates, dated within ten (10) days prior to the
Closing Date, of the Secretary of State of the State of Florida establishing
that Vision 21 and the Subsidiary are in existence, have paid all franchise or
similar taxes, if any, and, if applicable, otherwise are in good standing to
transact business in such state;

h. certificates (or photocopies thereof), dated within ten
(10) days prior to the Closing Date, of the Secretary of State of each state in
which Vision 21 and the Subsidiary are qualified to do business, to the effect
that Vision 21 and the Subsidiary are qualified to do business and, if
applicable, are in good standing as a foreign corporation in each of such
states;

i. an opinion of Shumaker, Loop & Kendrick, LLP, counsel to
Vision 21, dated as of the Closing Date, pursuant to Section 12.3;

j. the executed Registration Rights Agreement;

k. the executed Lease Assignments;

l. the Shares of Vision 21 Common Stock to be delivered
pursuant to Section 2.9(a); and

m. such other instrument or instruments of transfer, prepared
by the Company or the Physician as shall be necessary or appropriate, as the
Company, the

<PAGE> 55

Physician or their counsel shall reasonable request, to carry out and effect the
purpose and intent of this Agreement.

13.3. Release of Escrow Materials. Shumaker, Loop & Kendrick, LLP
shall release the agreements, certificates, instruments, documents and other
materials described in Sections 13.1 and 13.2 to the appropriate parties to
effectuate the transactions contemplated in this Agreement only after all such
materials have been delivered by all applicable parties (or the parties
receiving such documents have waived in writing such delivery requirement). In
the event that all of the Practice, Vision 21, the Subsidiary and the Physician
have not notified the Escrow Agent in writing that they are satisfied with or
have waived all of the foregoing documents and issues by 5:00 p.m. on June 5,
1997, the Escrow Agent shall immediately return any consideration by Vision 21
held by it to Vision 21 and shall destroy all of the other Escrowed Materials
held by it.

14. POST CLOSING MATTERS.

14.1. Further Instruments of Transfer. From and after the Closing
Date, at the request of Vision 21 and at Vision 21's sole cost and expense, the
Physician and the Company shall deliver any further instruments of transfer and
take all reasonable action as may be necessary or appropriate to carry out the
purpose and intent of this Agreement.

14.2. Practice Advisory Council; Local Advisory Council; National
Appeals Council. Vision 21 and New P.A. shall establish a practice advisory
council composed of delegates from Vision 21 and New P.A. which shall advise
Vision 21 and New P.A. and determine certain issues as more fully described in
the Business Management Agreement. Vision 21 shall also establish a local
advisory council composed of delegates from certain practice groups acquired by
Vision 21 in connection with Recent Acquisitions. Such delegates shall be
appointed from practice groups which are located in a market area to be
identified by Vision 21 and in which New P.A. is located. The local advisory
council board shall advise Vision 21 and the practice groups within the market
area as to policy and strategy issues and shall determine certain types of
issues and disputes between Vision 21 and such practice groups which issues and
disputes are identified in the Business Management Agreement and other
management agreements entered into between Vision 21 and practice groups. New
P.A. shall have the right to appoint one (1) member to a local advisory council
who shall serve an initial two (2) year term. After the initial two-year term,
election of members to the local advisory council shall be in accordance with
by-laws which shall be adopted and amended by the local advisory council. Vision
21 shall also establish a national appeals council which shall have, among other
duties and responsibilities, the power to adopt and amend its by-laws, to review
and approve as limited herein certain decisions of the local advisory councils,
and to resolve deadlocks among the members of such local advisory councils.

<PAGE> 56

15. REMEDIES.

15.1. Indemnification by the Physician. Subject to the terms and
conditions of this Agreement, the Physician agrees to indemnify, defend and hold
Vision 21, the Surviving Corporation and their respective directors, officers,
members, managers, employees, agents, attorneys and affiliates harmless from and
against all losses, claims, obligations, demands, assessments, penalties,
liabilities, costs, damages, reasonable attorneys' fees and expenses
(collectively, "Damages") asserted against or incurred by such entities and
individuals (including, but not limited to, any reduction in payments to or
revenues of New P.C.), arising out of or resulting from:

a. a breach of any representation, warranty or covenant of
the Company or the Physician contained herein or in any schedule or certificate
delivered hereunder;

b. any liability under the Securities Act, the Exchange Act
or any other federal or state "Blue Sky" or securities law or regulation, at
common law or otherwise, (i) arising out of or based upon any untrue statement
or alleged untrue statement of a material fact relating to the Physician, the
Company (including its subsidiaries, if any) or New P.C., and provided to Vision
21 or its counsel by the Company or the Physician, specifically for inclusion in
a Registration Statement or any prospectus forming a part thereof, or any
amendment thereof or supplement thereto, (ii) arising out of or based upon any
omission or alleged omission to state therein a material fact relating to the
Physician, the Company (including its subsidiaries, if any) or New P.C. required
to be stated therein or necessary to make the statements therein not misleading,
and not provided to Vision 21 or its counsel by the Company or the Physician,
provided, however, that such indemnity shall not inure to the benefit of Vision
21 to the extent that such untrue statement (or alleged untrue statement) was
made, in, or omission (or alleged omission) occurred in, any preliminary
prospectus, and such information was not so included by Vision 21 and properly
delivered to shareholders of Vision 21 who acquire Vision 21 Common Stock in any
Initial Public Offering;

c. any and all liability for any actions, suits, claims,
proceedings or investigations that relate to Physician or the Practice in which
the event giving rise thereto occurred prior to the Closing Date or which result
from or arise out of any action of Physician or any director, officer, employee,
agent or representative of the Practice prior to the Closing Date; or

d. any filings, reports or disclosures made pursuant to the
IRS Voluntary Compliance Resolution Program, if applicable;

e. any failure of the Merger to qualify as a reorganization
within the meaning of Section 368(a)(1)(A) or Section 368(a)(2)(D) of the Code;

f. any liability arising from the spin off of the Company's
medical business and Medical Assets;

<PAGE> 57

g. any liability arising from any alleged unlawful sale or
offer to sell or transfer any of the Common Stock by Physician; and

h. any liability of Physician or the Practice of any nature
whatsoever not disclosed in this Agreement and expressly assumed by Vision 21 or
the Subsidiary.

15.2. Indemnification by Vision 21 and the Subsidiary. Subject to
the terms and conditions of this Agreement, Vision 21 and the Subsidiary,
jointly and severally, hereby agree to indemnify, defend and hold the Physician
harmless from and against all damages asserted against or incurred by him
arising out of or resulting from:

a. a breach by Vision 21 or the Subsidiary of any
representation, warranty or covenant of Vision 21 or the Subsidiary contained
therein or in any schedule or certificate delivered hereunder;

b. any liability under the Securities Act, the Exchange Act
or any other federal or state "Blue Sky" or securities law or regulation, at
common law or otherwise, arising out of or based upon any untrue statement or
alleged untrue statement of a material fact relating to Vision 21 or the
Subsidiary, contained in any preliminary prospectus, Registration Statement or
any prospectus forming a part thereof, or any amendment thereof or supplement
thereto, arising out of or based upon any omission or alleged omission to state
therein a material fact relating to Vision 21 (including the Subsidiary and
Vision 21's other subsidiaries), required to be stated therein or necessary to
make the statements therein not misleading; and

c. any filings, reports or disclosures made pursuant to the
IRS Voluntary Compliance Resolution Program, if applicable.

Notwithstanding anything in this Section 15.2, Vision 21 and the
Subsidiary shall not be liable for any Damages resulting from any matter not
disclosed to Vision 21 by any of the third parties acquired by Vision 21 in
connection with the Recent Acquisitions.

15.3. Conditions of Indemnification. All claims for indemnification
under this Agreement shall be asserted and resolved as follows:

<PAGE> 58

attributable to the Third Party Claim and the basis of the Indemnified Party's
request for indemnification under this Agreement. Except as set forth in Section
15.6, the failure to promptly deliver a Claim Notice shall not relieve the
Indemnifying Party of its obligations to the Indemnified Party with respect to
the related Third Party Claim except to the extent that the resulting delay is
materially prejudicial to the defense of such claim. Within thirty (30) days
after receipt of any Claim Notice (the "Election Period"), the Indemnifying
Party shall notify the Indemnified Party (i) whether the Indemnifying Party
disputes its potential liability to the Indemnified Party under this Article 16
with respect to such Third Party Claim and (ii) whether the Indemnifying Party
desires, at the sole cost and expense of the Indemnifying Party, to defend the
Indemnified Party against such Third Party Claim.

If the Indemnifying Party notifies the Indemnified Party
within the Election Period that the Indemnifying Party elects to assume the
defense of the Third Party Claim, then the Indemnifying Party shall have the
right to defend, at its sole cost and expense, such Third Party Claim by all
appropriate proceedings, which proceedings shall be prosecuted diligently by the
Indemnifying Party to a final conclusion or settled at the discretion of the
Indemnifying Party in accordance with this Section 15.3(b). The Indemnifying
Party shall have full control of such defense and proceedings, including any
compromise or settlement thereof. The Indemnified Party is hereby authorized, at
the sole cost and expense of the Indemnifying Party (but only if the Indemnified
Party is entitled to indemnification hereunder), to file, during the Election
Period, any motion, answer or other pleadings that the Indemnified Party shall
deem necessary or appropriate to protect its interests or those of the
Indemnifying Party and not prejudicial to the Indemnifying Party (it being
understood and agreed that if an Indemnified Party takes any such action that is
prejudicial and causes a final adjudication that is adverse to the Indemnifying
Party, the Indemnifying Party shall be relieved of its obligations hereunder
with respect to such Third Party Claim). If requested by the Indemnifying Party,
the Indemnified Party agrees, at the sole cost and expense of the Indemnifying
Party, to cooperate with the Indemnifying Party and its counsel in contesting
any Third Party Claim that the Indemnifying Party elects to contest, including,
without limitation, the making of any related counterclaim against the person
asserting the Third Party Claim or any cross-complaint against any person. The
Indemnified Party may participate in, but not control, any defense or settlement
of any Third Party Claim controlled by the Indemnifying Party pursuant to
Section 15.3(b) and shall bear its own costs and expenses with respect to such
participation; provided, however, that if the named parties to any such action
(including any impleaded parties) include both the Indemnifying Party and the
Indemnified Party, and the Indemnified Party has been advised by counsel that
there may be one or more legal defenses available to it that are different from
or additional to those available to the Indemnifying Party, then the Indemnified
Party may employ separate counsel at the expense of the Indemnifying Party, and
upon written notification thereof, the Indemnifying Party shall not have the
right to assume the defense of such action on behalf of the Indemnified Party;
provided further that the Indemnifying Party shall not, in connection with any
one such action or separate but substantially similar or related actions in the
same jurisdiction arising out of the same general allegations or circumstances,
be liable for the reasonable fees and expenses of more than one separate firm of
attorneys at any time for the Indemnified Party, which firm shall be designated
in writing by the Indemnified Party.

<PAGE> 59

b. If the Indemnifying Party fails to notify the Indemnified
Party within the Election Period that the Indemnifying Party elects to defend
the Indemnified Party pursuant to Section 15.3(b), or if the Indemnifying Party
elects to defend the Indemnified Party pursuant to Section 15.3(b) but fails
diligently and promptly to prosecute or settle the Third Party Claim, then the
Indemnified Party shall have the right to defend, at the sole cost and expense
of the Indemnifying Party (if the Indemnified Party is entitled to
indemnification hereunder), the Third Party Claim by all appropriate
proceedings, which proceedings shall be promptly and vigorously prosecuted by
the Indemnified Party to a final conclusion or settled. The Indemnified Party
shall have full control of such defense and proceedings, provided, however, that
the Indemnified Party may not enter into, without the Indemnifying Party's
consent, which shall not be unreasonably withheld, any compromise or settlement
of such Third Party Claim. Notwithstanding the foregoing, if the Indemnifying
Party has delivered a written notice to the Indemnified Party to the effect that
the Indemnifying Party disputes its potential liability to the Indemnified Party
under this Article 16 and if such dispute is resolved in favor of the
Indemnifying Party, the Indemnifying Party shall not be required to bear the
costs and expenses of the Indemnifying Party's defense pursuant to this Section
or of the Indemnifying Party's participation therein at the Indemnified Party's
request, and the Indemnified Party shall reimburse the Indemnifying Party in
full for all costs and expenses of such litigation. The Indemnifying Party may
participate in, but not control any defense or settlement controlled by the
Indemnified Party pursuant to this Section 15.3(c), and the Indemnifying Party
shall bear its own costs and expenses with respect to such participation;
provided, however, that if the named parties to any such action (including any
impleaded parties) include both the Indemnifying Party and the Indemnified
Party, and the Indemnifying Party has been advised by counsel that there may be
one or more legal defenses available to the Indemnified Party, then the
Indemnifying Party may employ separate counsel and upon written notification
thereof, the Indemnified Party shall not have the right to assume the defense of
such action on behalf of the Indemnifying Party.

c. In the event any Indemnified Party should have a claim
against any Indemnifying Party hereunder that does not involve a Third Party
Claim, the Indemnified Party shall transmit to the Indemnifying Party a written
notice (the "Indemnity Notice") describing in reasonable detail the nature of
the claim, an estimate of the amount of damages attributable to such claim and
the basis of the Indemnified Party's request for indemnification under this
Agreement. If the Indemnifying Party does not notify the Indemnified Party
within sixty (60) days from its receipt of the Indemnity Notice that the
Indemnifying Party disputes such claim, the claim specified by the Indemnified
Party in the Indemnity Notice shall be deemed a liability of the Indemnifying
Party hereunder. If the Indemnifying Party has timely disputed such claim, as
provided above, such dispute shall be resolved by mediation or arbitration as
provided in Section 19.1 if the parties do not reach a settlement of such
dispute within thirty (30) days after notice of a dispute is given.

d. Payments of all amounts owing by an Indemnifying Party
pursuant to this Article 16 relating to a Third Party Claim shall be made within
thirty (30) days after the latest of (i) the settlement of such Third Party
Claim, (ii) the expiration of the period

<PAGE> 60

for appeal of a final adjudication of such Third Party Claim or (iii) the
expiration of the period for appeal of a final adjudication of the Indemnifying
Party's liability to the Indemnified Party under this Agreement. Payments of all
amounts owing by an Indemnifying Party pursuant to Section 15.3(d) shall be made
within thirty (30) days after the later of (i) the expiration of the sixty (60)
day Indemnity Notice period or (ii) the expiration of the period for appeal, if
any, of a final adjudication or arbitration of the Indemnifying Party's
liability to the Indemnified Party under this Agreement.

15.4. Remedies Not Exclusive. The remedies provided in this
Agreement shall not be exclusive of any other rights or remedies available to
one party against the other, either at law or in equity. This Article 16
regarding indemnification shall survive Closing.

15.5. Costs, Expenses and Legal Fees. Each party hereto agrees to
pay the costs and expenses (including attorneys' fees and expenses) incurred by
the other parties in successfully (a) enforcing any of the terms of this
Agreement, or (b) proving that another party breached any of the terms of this
Agreement.

15.6. Indemnification Limitations. Notwithstanding the provisions
of Sections 15.1 and 15.2, (a) no party shall be required to indemnify another
party with respect to a breach of a representation, warranty or covenant unless
the claim for indemnification is brought within two (2) years after the Closing
Date, except that a claim for indemnification for a breach of the
representations and warranties contained in Sections 3.1, 3.2, 3.3., 3.4, 3.5,
3.6, 3.14, 3.17, 3.20, 3.23, 4.1, 4.3, 4.4, 4.8, 5.1, 5.2, 5.3, 5.4, 5.6, 5.7,
6.1, 6.2, 6.3 and 6.4 may be made at any time, and a claim for indemnification
for a breach of the representations and warranties contained in Sections 3.12,
3.18, 3.21, 3.27, 3.28, 3.29, 3.30, 3.31, 3.33, 4.5, 4.7, 4.11, 5.8 and 7.1 may
be made at any time within the applicable statute of limitations; (b)
indemnification based upon Sections 15.1(b) through (f) and 15.2(b) may be made
at any time within the applicable statute of limitations; and (c) the Physician
shall not be required to indemnify Vision 21 and the Subsidiary pursuant to
Section 15.1 unless, and to the extent that, the aggregate amount of Damages
incurred by Vision 21 shall exceed an amount equal to two percent (2%) of the
total Merger Consideration; and (d) the Physician shall not be required to
indemnify Vision 21 and the Subsidiary with respect to a breach of a
representation, warranty or covenant for Damages in excess of the aggregate
Merger Consideration received by the Physician (other than pursuant to a
requirement to indemnify Vision 21 and the Subsidiary under Sections 3.30 and
3.31, or unless the breach involves an intentional breach or fraud by the
Physician or the Company, which shall be unlimited).

15.7. Tax Benefits; Insurance Proceeds. The total amount of any
indemnity payments owed by one party to another party to this Agreement shall be
reduced by any correlative tax benefit received by the party to be indemnified
or the net proceeds received by the party to be indemnified with respect to
recovery from third parties or insurance proceeds and such correlative insurance
benefit shall be net of the insurance premium, if any, that becomes due as a
result of such claim.

<PAGE> 61

15.8. Payment of Indemnification Obligation. In the event that the
Physician has an indemnification obligation to Vision 21 or the Subsidiary
hereunder, subject to Vision 21's approval as set forth below, the Physician may
satisfy such obligation by transferring to Vision 21 or the Subsidiary (as the
case may be) such number of shares of Vision 21 Common Stock owned by the
Physician having an aggregate fair market value (which is prior to any Initial
Public Offering based upon the valuation given at Closing hereof or after an
Initial Public Offering the fair market value at such time based on the last
reported sale price of Vision 21 Common Stock on a principal national securities
exchange or other exchange on which the Vision 21 Common Stock is then listed or
the last quoted ask price on any over-the-counter market through which the
Vision 21 Common Stock is then quoted on the last trading day immediately
preceding the day on which the Physician transfers shares of Vision 21 Common
Stock to Vision 21 or the Subsidiary hereunder) equal to the indemnification
obligation, provided that each of the following conditions are satisfied:

a. The Physician shall transfer to Vision 21 or the Subsidiary
good, valid and marketable title to the shares of Vision 21 Common Stock, free
and clear of all adverse claims, security interests, liens, claims, proxies,
options, stockholders' agreements and encumbrances;

b. The Physician shall make such representation and
warranties as to title to the stock, absences of security interests, liens,
claims, proxies, stockholders' agreements and other encumbrances and other
matters as reasonably requested by Vision 21 or the Subsidiary; and

c. The other terms and conditions of any transaction
contemplated pursuant to this Section and the effects thereof, including any
legal or tax consequences, shall be reasonably satisfactory to Vision 21 and the
Subsidiary.

16. TERMINATION.

16.1. Termination. This Agreement may be terminated and the Merger
may be abandoned:

a. at any time prior to the Closing Date by mutual agreement
of all parties;

b. at any time prior to the Closing Date by Vision 21 if any
representation or warranty of the Company or the Physician contained in this
Agreement or in any certificate or other document executed and delivered by the
Company or the Physician pursuant to this Agreement is or becomes untrue or
breached in any material respect or if the Company or the Physician 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;

<PAGE> 62

c. at any time prior to the Closing Date by the Company if
any representation or warranty of Vision 21 or the Subsidiary contained in this
Agreement is or becomes untrue in any material respect or if Vision 21 or the
Subsidiary 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
or written notice thereof;

d. at any time prior to the Closing Date by the Company in
the event of the failure of any of the conditions precedent set forth in Article
13 of this Agreement;

e. at any time prior to the Closing Date by Vision 21 in the
event of the failure of any of the conditions precedent set forth in Article 12
of this Agreement;

f. by Vision 21 if at any time prior to the Closing Date,
Vision 21 deems termination to be advisable, provided, however, that if Vision
21 exercises its right to terminate this Agreement under this subsection, Vision
21 shall reimburse the Company and the Physician for all reasonable attorneys'
and accountants' fees incurred by the Company and the Physician in connection
with this Agreement; provided that Vision 21 shall only reimburse the Company
and the Physician up to an aggregate maximum amount of One Hundred Thousand and
No/100 Dollars ($100,000.00) for such fees; or

g. by Vision 21 or the Company if the Merger shall not have
been consummated by June 5, 1997.

16.2. Effect of Termination. In the event this Agreement is
terminated pursuant to Section 16.1, Vision 21, the Subsidiary, the Company and
the Physician, shall each be entitled to pursue, exercise and enforce any and
all remedies, rights, powers and privileges available at law or in equity,
subject to the limitations set forth in Section 16.1. In the event of a
termination of this Agreement under the provisions of this Article 17, a party
not then in material breach of this Agreement shall stand fully released and
discharged of any and all obligations under this Agreement.

17. PHYSICIAN EMPLOYMENT AGREEMENT.

17.1. Physician Employment Agreement. The parties acknowledge that
in accordance with the terms of this Agreement, Physician, as employee, and New
P.C., as employer, have entered into the Physician Employment Agreement and that
the Subsidiary and Vision 21 are entitled to enforce such Physician Employment
Agreement as intended third party beneficiaries. Physician, Vision 21 and the
Subsidiary acknowledge that Vision 21 and the Subsidiary would suffer severe
harm in the event of Physician's resignation prior to the expiration of the five
(5) year term of such Physician Employment Agreement (without first obtaining
the written consent of Vision 21 and the Subsidiary) or a breach or default of
Physician's obligations under such Physician Employment Agreement, and
Physician, the Company, the Subisidary and Vision 21 agree that Vision 21 and
the Subsidiary shall be entitled

<PAGE> 63

to recover from Physician any and all damages incurred by Vision 21 and the
Subsidiary caused by such resignation, breach or default. Notwithstanding the
foregoing, neither Vision 21 nor the Subsidiary shall not be entitled to recover
its damages caused by such resignation, breach or default if such resignation,
breach or default was caused by: (i) the death or disability of Physician, (ii)
circumstances not caused by an act or omission of Physician and which
circumstances are beyond his control, or (iii) loss of Physician's license to
practice as an ophthalmologist, unless such loss of license is due to an act or
omission of Physician. Notwithstanding the foregoing, Physician shall have no
obligation to pay the damages contemplated in this Section 17.1 if (a) the
Business Management Agreement has been terminated pursuant to a material breach
by the Subsidiary, or (b) Physician cures any such breach or default of the
Physician Employment Agreement within a period of thirty (30) days after notice
from Vision 21 or the Subsidiary of such breach or default.

17.2. Survival. The parties acknowledge and agree that this Article
18 shall survive the Closing of the transactions contemplated herein.

18. NON-COMPETITION AND CONFIDENTIALITY COVENANTS.

18.1. Physician Non-Competition Covenant.

a. The Physician recognizes that the covenants of the
Physician contained in this Section 18.1 are an essential part of this Agreement
and that, but for the agreement of the Physician to comply with such covenants,
Vision 21 and the Subsidiary would not have entered into this Agreement. The
Physician acknowledges and agrees that the Physician's covenant not to compete
is necessary to ensure the continuation of the Management Business (as defined
below) and is necessary to protect the reputation of Vision 21 and the
Subsidiary, and that irreparable and irrevocable harm and damage will be done to
Vision 21 and the Subsidiary if the Physician competes with the Management
Business, Vision 21 or the Subsidiary. The Physician accordingly agrees that for
the periods set forth in the Business Management Agreement, the Physician shall
not:

i) directly or indirectly, either as principal, agent,
independent contractor, consultant, director, officer, employee, employer,
advisor, stockholder, partner or in any other individual or representative
capacity whatsoever, either for the Physician's own benefit or for the benefit
of any other person or entity knowingly (A) hire, attempt to hire, contact or
solicit with respect to hiring any employee of Vision 21 (or of the Subsidiary
or any of Vision 21's other direct or indirect subsidiaries) or (B) induce or
otherwise counsel, advise or encourage any employee of Vision 21 (or of the
Subsidiary or any of Vision 21's other direct or indirect subsidiaries) to leave
the employment of Vision 21 or the Subsidiary;

<PAGE> 64

in or otherwise conduct (whether as stockholder, partner, investor, joint
venturer, or as owner of any other type of interest), any Competing Management
Business as such term is defined herein; provided, however, that this clause
(ii) shall not prohibit the Physician from being the owner of up to 1% of any
class of outstanding securities of any company or entity if such class of
securities is publicly traded; or

iii) directly or indirectly, either as principal, agent,
independent, contractor, consultant, director, officer, employee, employer,
advisor, stockholder, partner or in any other individual or representative
capacity whatsoever, either for the Physician's own benefit or for the benefit
of any other person or entity, call upon or solicit any customers or clients of
the Management Business; provided however, that the Physician may send out a
general notice to the customers or clients of the Management Business announcing
the termination of his arrangement with the Subsidiary and Vision 21 and may
advertise in a general manner without violating this covenant. The parties
hereto acknowledge and agree that for purposes of this Section, patients which
have in the past received medical or optometric care from the Company and/or
shall in the future receive medical or optometric care from the New P.C. are not
deemed to be customers or clients of the Management Business.

b. For the purposes of this Section 18.1, the following terms
shall have the meaning set forth below:

i) "Management Business" shall mean management and
administration of the non-medical aspects of medical, ophthalmology and
optometry practices.

ii) "Competing Management Business" shall mean an
individual, business, corporation, association, firm, undertaking, company,
partnership, joint venture, organization or other entity that either (A)
conducts a business substantially similar to the Management Business within the
State, or (B) provides or sells a service which is the same or substantially
similar to, or otherwise competitive with the services provided by the
Management Business within the State; provided, however, that "Competing
Management Business" shall not include Vision 21, the Subsidiary, or the
Physician's internal management and administration of the Physician's medical
practice or participation in the management and administration of a physician
group in which the Physician devotes a significant amount of time to the
practice of medicine.

c. Should any portion of this Section 18.1 be deemed
unenforceable because of the scope, duration or territory encompassed by the
undertakings of the Physician hereunder, and only in such event, then the
Physician, Vision 21 and the Subsidiary consent and agree to such limitation on
scope, duration or territory as may be finally adjudicated as enforceable by a
court of competent jurisdiction after the exhaustion of all appeals.

d. This covenant shall be construed as an agreement ancillary
to the other provisions of this Agreement, and the existence of any claim or
cause of action of

<PAGE> 65

the Physician against the Subsidiary or Vision 21, whether predicated on this
Agreement or otherwise, shall not constitute a defense to the enforcement by the
Subsidiary and Vision 21 of this covenant; provided, however, that the Physician
shall not be bound by this covenant and shall not be obligated to pay the
liquidated damages contemplated in this Section 18.1 if at the time of a breach
of this covenant the Business Management Agreement has already been terminated
pursuant to Section 6.2(a) thereof. Without limiting other possible remedies to
the Subsidiary and Vision 21 for breach of this covenant, the Physician agrees
that injunctive or other equitable relief will be available to enforce the
covenants of this provision, such relief to be without the necessity of posting
a bond, cash or otherwise. The Physician, the Subsidiary and Vision 21 further
expressly acknowledge that the damages that would result from a violation of
this non-competition covenant would be impossible to predict with any degree of
certainty, and agree that liquidated damages in the amount of the aggregate
consideration received by the Physician pursuant to this Agreement is reasonable
in light of the severe harm to the Management Business, the Subsidiary and
Vision 21 which would result in the event that a violation of this
non-competition covenant were to occur. For purposes of calculation of the
liquidated damages contemplated in this Section and for purposes of calculation
of the liquidated damages contemplated in the Business Management Agreement and
the Physician Employment Agreement between the Physician and New P.C., the
aggregate consideration received by Physician pursuant to this Agreement shall
be in those amounts and in such form as set forth in Schedule 18.1. If the
Physician violates this non-competition covenant, Vision 21 shall, in addition
to all other rights and remedies available at law or equity, be entitled to (a)
cancel the number of shares of Common Stock held by the Physician or, with
respect to shares of Common Stock entitled to be received by the Physician,
terminate its obligation to deliver such number of shares of Common Stock,
valued as set forth in Section 6.6(a) of the Business Management Agreement, and
(b) repayment by Physician to Vision 21 of any and all sums received in
connection with any shares of Vision 21 Common Stock sold by Physician; but in
no event shall Vision 21 be entitled to offset amounts in excess of the
liquidated damages sum pursuant to this Section 18.1. The Physician agrees to
deliver to Vision 21 the certificates representing any such shares canceled by
Vision 21. Payment and satisfaction by Physician shall be made within sixty (60)
days of notification to Physician by Vision 21 that Physician has violated this
non-competition covenant.

e. Notwithstanding anything contained herein, this Section
18.1 shall not be construed to (i) limit the freedom of any patient of the
Physician to choose the facility or physician from whom such patient shall
receive health-care services or (ii) limit or interfere with the Physician's
ability to exercise his professional medical judgment in treating his patients
or his ability to provide medical services to his patients.

18.2. Physician Confidentiality Covenant. From the date hereof, the
Physician shall not, directly or indirectly, use for any purpose, other than in
connection with the performance of the Physician's duties under the Physician
Employment Agreement with New P.C., or disclose to any third party, any
information of the Subsidiary, Vision 21 or the Company, as appropriate (whether
written or oral), including any business management or economic studies, patient
lists, proprietary forms, proprietary business or management methods,

<PAGE> 66

marketing data, fee schedules, or trade secrets of the Subsidiary, Vision 21 or
of the Company, as applicable, and including the terms and provisions of this
Agreement and any transaction or document executed by the parties pursuant to
this Agreement. Notwithstanding the foregoing, the Physician may disclose
information that the Physician can establish (a) is or becomes generally
available to and known by the public or medical community (other than as a
result of an unpermitted disclosure directly or indirectly by the Physician or
his Affiliates, advisors, or representatives); (b) is or becomes available to
the Physician on a nonconfidential basis from a source other than the Subsidiary
or Vision 21, the Company or their respective Affiliates, advisors or
representatives, provided that such source is not and was not bound by a
confidentiality agreement with or other obligation of secrecy to the Subsidiary
or Vision 21, the Company or their respective Affiliates, advisors or
representatives of which the Physician has knowledge; or (c) has already been or
is hereafter independently acquired or developed by the Physician without
violating any confidentiality agreement with or other obligation of secrecy to
the Subsidiary, Vision 21, the Company or their respective Affiliates, advisors
or representatives. Without limiting the other possible remedies to the
Subsidiary and Vision 21 for the breach of this covenant, the Physician agrees
that injunctive or other equitable relief shall be available to enforce this
covenant, such relief to be without the necessity of posting a bond, cash or
otherwise. The Physician further agrees that if any restriction contained in
this Section 18.2 is held by any court to be unenforceable or unreasonable, a
lesser restriction shall be enforced in its place and the remaining restrictions
contained herein shall be enforced independently of each other.

18.3. Survival. The parties acknowledge and agree that this Article
19 shall survive the Closing of the transactions contemplated herein.

19. DISPUTES.

19.1. Mediation and Arbitration. Any dispute, controversy or claim
(excluding claims arising out of an alleged breach of Article 19 of this
Agreement) arising out of this Agreement, or the breach thereof, that cannot be
settled through negotiation shall be settled (a) first, by the parties trying in
good faith to settle the dispute by mediation under the Commercial Mediation
Rules of the AAA (such mediation session to be held in Tampa, Florida, if the
amount in dispute is equal to or in excess of $200,000 or if the dispute is
solely of a non-monetary nature, and in Sierra Vista, Arizona if the amount in
dispute is lower than $200,000, and in either case to commence within 15 days of
the appointment of the mediator by the AAA), and (b) if the controversy, claim
or dispute cannot be settled by mediation, then by arbitration administered by
the AAA under its Commercial Arbitration Rules (such arbitration to be held in
Tampa, Florida, if the amount in dispute is equal to or in excess of $200,000 or
if the dispute is solely of a non-monetary nature, and in Sierra Vista, Arizona
if the amount in dispute is lower than $200,000, and in either case before a
single arbitrator and to commence within 15 days of the appointment of the
arbitrator by the AAA), and judgment on the award rendered by the arbitrator may
be entered in any court having jurisdiction thereof.

<PAGE> 67

20. MISCELLANEOUS

20.1. Taxes. Physician shall pay all transfer taxes, sales and
other taxes and charges imposed by the State, if any, which may become payable
in connection with the transactions and documents contemplated hereunder
(excluding any of such taxes which may be attributable to services to be
provided by Vision 21 under the Business Management Agreement). Vision 21 shall
pay all transfer taxes, sales and other taxes and charges imposed by the State
of Florida, if any, which may become payable in connection with the transactions
and documents contemplated hereunder (excluding any of such taxes which may be
attributable to services to be provided by Vision 21 under the Business
Management Agreement).

20.2. Remedies Not Exclusive. No remedy conferred by any of the
specific provisions of this Agreement or any document contemplated by this
Agreement is intended to be exclusive of any other remedy, and each and every
remedy shall be cumulative and shall be in addition to every other remedy given
hereunder or now or hereafter existing at law or in equity or by statute or
otherwise. The election of any one or more remedies by any party hereto shall
not constitute a waiver of the right to pursue other available remedies.

20.3. Parties Bound. Except to the extent otherwise expressly
provided herein, this Agreement shall be binding upon and inure to the benefit
of the parties hereto and their respective heirs, representatives,
administrators, guardians, successors and assigns; and no other person shall
have any right, benefit or obligation hereunder.

20.4. Notices. All notices, reports, records or other
communications that are required or permitted to be given to the parties under
this Agreement shall be sufficient in all respects if given in writing and
delivered in person, by telecopy, by overnight courier or by registered or
certified mail, postage prepaid, return receipt requested, to the receiving
party at the following address:

If to Vision 21 and the Subsidiary addressed to:

Vision 21, Inc.
7209 Bryan Dairy Road
Largo, Florida 34777
Attn: Richard T. Welch, Chief Financial Officer

With copies to:

Shumaker, Loop & Kendrick
Post Office Box 172609
101 E. Kennedy Boulevard, Suite 2800
Tampa, Florida 33672-0609
Facsimile No. (813) 229-1660
Attn: Darrell C. Smith, Esquire

<PAGE> 68

If to the Company and the Physician addressed to:

Cochise Eye & Laser, P.C.
2445 E. Wilcox Drive
Sierra Vista, Arizona 85635
Attn: Thomas E. Rodcay, M.D.

With copies to:

Sacks Tierney, P.A.
2929 North Central Avenue
Fourteenth Floor
Phoenix, Arizona 85012-2742
Attn: Steven M. Goldstein, Esquire

or to such other address as such party may have given to the other parties by
notice pursuant to this Section 20.4. Notice shall be deemed given on the date
of delivery, in the case of personal delivery or telecopy, or on the delivery or
refusal date, as specified on the return receipt, in the case of overnight
courier or registered or certified mail.

20.5. Choice of Law. This Agreement shall be construed,
interpreted, and the rights of the parties determined in accordance with, the
laws of the State of Florida except with respect to matters of law concerning
the internal affairs of any corporate or partnership entity which is a party to
or the subject of this Agreement, and as to those matters the law of the state
of incorporation or organization of the respective entity shall govern.

20.6. Entire Agreement; Amendments and Waivers. This Agreement,
together with the documents contemplated by this Agreement and all Exhibits and
Schedules hereto and thereto, constitutes the entire agreement between the
parties pertaining to the subject matter hereof and supersedes all prior and
contemporaneous agreements, understandings, negotiations and discussions,
whether oral or written, of the parties, and there are no warranties,
representations or other agreements between the parties in connection with the
subject matter hereof. No supplement, modification or waiver of any of the
provisions of this Agreement shall be binding unless it shall be specifically
designated to be a supplement, modification or waiver of this Agreement and
shall be executed in writing by the party to be bound thereby. No waiver of any
of the provisions of this Agreement shall be deemed or shall constitute a waiver
of any other provision hereof (whether or not similar), nor shall such waiver
constitute a continuing waiver unless otherwise expressly provided.

20.7. Confidentiality Agreements. The provisions of any prior
confidentiality agreements and letters of intent between or among Vision 21, the
Company and the Physician, as amended, shall terminate and cease to be of any
force or effect at and upon the Closing.

<PAGE> 69

20.8. Reformation Clause. It is the intention of the parties
hereto to conform strictly to applicable laws regarding the practice and
regulation of medicine, whether such laws are now or hereafter in effect,
including the laws of the United States of America, the State or any other
applicable jurisdiction, and including any subsequent revisions to, or judicial
interpretations of, those laws, in each case to the extent they are applicable
to this Agreement (the "Applicable Laws"). Accordingly, if the ownership of any
Nonmedical Asset by the Subsidiary violates any Applicable Law, then the parties
hereto agree as follows: (a) the provisions of this section 20.8 shall govern
and control; (b) if none of the parties hereto are materially economically
disadvantaged, then any Nonmedical Asset, the ownership of which violates any
Applicable Law, shall be deemed to have never been owned by the Subsidiary; (c)
if one or more of the parties hereto is materially economically disadvantaged,
then the parties hereto agree to negotiate in good faith such changes to the
structure and terms of the transactions provided for in this Agreement as may be
necessary to make these transactions, as restructured, lawful under applicable
laws and regulations, without materially disadvantaging either party; (d) this
Agreement shall be deemed reformed; and (e) the parties to this Agreement shall
execute and deliver all documents or instruments necessary to effect or evidence
the provisions of this Section 20.8.

20.9. Assignment. The Agreement may not be assigned by operation
of law or otherwise except that Vision 21 and the Subsidiary shall have the
right to assign this Agreement, at any time, to any Affiliate or direct or
indirect wholly-owned subsidiary. In the event of such assignment, Vision 21 and
the Subsidiary shall remain liable hereunder.

20.10. Attorneys' Fees. Except as otherwise specifically provided
herein, if any action or proceeding is brought by any party with respect to this
Agreement or the other documents contemplated with respect to the
interpretation, enforcement or breach hereof, the prevailing party in such
action shall be entitled to an award of all reasonable costs of litigation or
arbitration, including, without limitation, attorneys' fees, to be paid by the
losing party, in such amounts as may be determined by the court having
jurisdiction of such action or proceeding or by the arbitrators deciding such
action or proceeding.

20.11. Further Assurances. From time to time hereafter and without
further consideration, each of the parties hereto shall execute and deliver such
additional or further instruments of conveyance, assignment and transfer and
take such other actions as any of the other parties hereto may reasonably
request in order to more effectively consummate the transactions contemplated
hereunder or as shall be reasonably necessary or appropriate in connection with
the carrying out of the parties' respective obligations hereunder for the
purposes of this Agreement.

20.12. Announcements and Press Releases. Any press releases or any
other public announcements concerning this Agreement or the transactions
contemplated hereunder shall be approved in advance by Vision 21, New P.C. and
the Company; provided, however, that such approval shall not be unreasonably
withheld and if any party reasonably believes that

<PAGE> 70

it has a legal obligation to make a press release and the consent of the other
party cannot be obtained, then the release may be made without such approval.

20.13. No Tax Representations. Each party acknowledges that it is
relying solely on its advisors to determine the tax consequences of the
transactions contemplated hereunder and that no representation or warranty has
been made by any party as to the tax consequences of such transactions except as
otherwise specifically set forth in this Agreement.

20.14. No Rights as Stockholder. The Physician shall have no rights
as a stockholder with respect to any shares of Common Stock until the issuance
of a stock certificate evidencing such shares. Except as otherwise provided in
the Agreement, no adjustment shall be made for dividends or distributions or
other rights for which the record date is prior to such date any stock
certificate is issued.

20.15. Multiple Counterparts. This Agreement may be executed in one
or more counterparts, each of which shall be deemed an original, but all of
which together shall constitute one and the same instrument.

20.16. Headings. The headings of the several articles and sections
herein are inserted for convenience of reference only and are not intended to be
part of or to affect the meaning or interpretation of this Agreement.

20.17. Severability. Each article, section and subsection of this
Agreement constitutes a separate and distinct undertaking, covenant or provision
of this Agreement. If any such provision shall finally be determined to be
unlawful, such provision shall be deemed severed from this Agreement, but every
other provision of this Agreement shall remain in full force and effect.

20.18. Form of Transaction. If after the execution hereof, Vision
21 determines that the ownership of the Nonmedical Assets of the Company can be
better achieved through a different form of transaction without economic injury
to the Company or the Physician, or delay of the consummation of the
transaction, the Company and the Physician shall cooperate in revising the
structure of the transaction and shall negotiate in good faith to so amend this
Agreement; provided, that Vision 21 shall reimburse the Company and the
Physician at Closing for all reasonable additional expenses incurred by the
Company and the Physician as a result of such change in form.

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

<PAGE> 71

IN WITNESS WHEREOF, the parties hereto have duly executed this
Agreement as of the date first written above.

"COMPANY"
COCHISE EYE & LASER, P.C.

By:
- -------------------------- -------------------------------------
Witness Thomas E. Rodcay, M.D., President

- --------------------------
Witness

"PHYSICIAN"

- -------------------------- -------------------------------------
Witness Thomas E. Rodcay, M.D.

- --------------------------
Witness

- -------------------------- -------------------------------------
Witness Jeffrey S. Felter, M.D.

- --------------------------
Witness
"VISION 21"
VISION TWENTY-ONE, INC.

By:
-----------------------------------
Theodore N. Gillette, President

"SUBSIDIARY'
VISION 21 OF SIERRA VISTA, INC.

By:

- -------------------------- -------------------------------------
Witness Theodore N. Gillette, President

- --------------------------
Witness

<PAGE> 1
EXHIBIT 2.8

ASSET PURCHASE AGREEMENT

This Asset Purchase Agreement (this "Agreement"), dated effective as
of June 1, 1997, is by and among SWAGEL-WOOTTON EYE CENTER, LTD., an Arizona
professional corporation (the "Company"), WENDY WOOTTON, M.D., JAMES C.
WOOTTON, M.D. and LORIN M. SWAGEL, M.D. (collectively, the "Physician"), and
VISION TWENTY-ONE, INC., a Florida corporation ("Vision 21").

R E C I T A L S

A. Physician is a physician licensed to practice medicine in the
State (as defined herein) and currently conducts an ophthalmology practice
through the Company and through optometrist employees currently conducts an
optometry practice through the Company.

B. Physician owns all of the issued and outstanding shares of
capital stock of the Company.

C. Vision 21 provides business management services and facilities
for eye care professionals and related businesses.

D. The Company desires to sell, assign and transfer all of its
assets to the extent permitted by law and Vision 21 desires to purchase, assume
and acquire such assets and assume certain liabilities of the Company in
exchange for capital stock of Vision 21 and other consideration, all as more
specifically provided herein.

1. DEFINITIONS. As used in this Agreement, the following terms shall
have the meanings set forth below:

1.1. AAA. The term "AAA" shall mean the American Arbitration
Association.

1.2. Accountants. The term "Accountants" shall mean the accounting
firm for Vision 21.

1.3. Accounts Receivable. The term "Accounts Receivable" shall have
the meaning set forth in Section 2.1(b).

1.4. Acquisition Proposal. The term "Acquisition Proposal" shall have
the meaning set forth in Section 3.31.

<PAGE> 2

1.6. Applicable Laws. The term "Applicable Laws" shall have the
meaning set forth in Section 19.8.

1.7. Assumed Contracts. The term "Assumed Contracts" shall have the
meaning set forth in Section 2.1(e).

1.8. Assumed Obligations. The term "Assumed Obligations" shall have
the meaning set forth in Section 2.3.

1.9. Audit. The term "Audit" shall have the meaning set forth in
Section 3.6.

1.10. Business Management Agreement. The term "Business Management
Agreement" shall mean the Business Management Agreement entered into between the
Company and Vision 21 at the Closing.

1.11. Business Records. The term "Business Records" shall have the
meaning set forth in Section 2.1(g).

1.12. Cash Compensation. The term "Cash Compensation" shall have the
meaning set forth in Section 3.8(a).

1.13. Claim Notice. The term "Claim Notice" shall have the meaning set
forth in Section 14.3(a).

1.14. Closing. The term "Closing" shall mean the consummation of the
transactions contemplated by this Agreement.

1.15. Closing Date. The term "Closing Date" shall mean June 30, 1997,
or such other date as mutually agreed upon by the parties.

1.16. Code. The term "Code" shall mean the Internal Revenue Code of
1986, as amended.

1.17. Commitments. The term "Commitments" shall have the meaning set
forth in Section 3.12(a).

1.18. Common Stock. The term "Common Stock" or "Vision 21 Common Stock"
shall mean the common stock, par value $.001 per share, of Vision 21.

-2-

<PAGE> 3

1.19. Company Balance Sheet. The term "Company Balance Sheet" shall
have the meaning set forth in Section 3.6.

1.20. Company Balance Sheet Date. The term "Company Balance Sheet Date"
shall have the meaning set forth in Section 3.6.

1.21. Compensation Plans. The term "Compensation Plans" shall have the
meaning set forth in Section 3.8(b).

1.22. Competing Management Business. The term "Competing Management
Business" shall have the meaning set forth in Section 17.1(b)(ii).

1.23. Competitor. The term "Competitor" shall mean any person or entity
which, individually or jointly with others, whether for its own account or for
that of any other person or entity, owns, or holds any ownership or voting
interest in any person or entity engaged in, the practice of ophthalmology, the
practice of optometry, the operation of out patient eye surgical facilities, the
operation of refractive surgery centers and the operation of optical shops;
provided, however, that such term shall not include any Affiliate of Vision 21
or any entity with which Vision 21 has an agreement similar to the Business
Management Agreement in effect.

1.24. Controlled Group. The term "Controlled Group" shall have the
meaning set forth in Section 3.9(g).

1.25. Corporation Law. The term "Corporation Law" shall mean the
statutes, regulations and laws governing business corporations and professional
associations in the State.

1.26. Damages. The term "Damages" shall have the meaning set forth in
Section 14.1.

1.27. Election Period. The term "Election Period" shall have the
meaning set forth in Section 14.3(a).

1.28. Employee Benefit Plans. The term "Employee Benefit Plans" shall
have the meaning set forth in Section 3.9(a).

1.29. Employee Policies and Procedures. The term "Employee Policies and
Procedures" shall have the meaning set forth in Section 3.8(d).

1.30. Employment Agreements. The term "Employment Agreements" shall
have the meaning set forth in Section 3.8(c).

1.31. Environmental Laws. The term "Environmental Laws" shall have the
meaning set forth in Section 3.24(a).

-3-

<PAGE> 4

1.32. ERISA. The term "ERISA" shall mean the Employee Retirement Income
Security Act of 1974, as amended.

1.33. Exchange Act. The term "Exchange Act" shall mean the Securities
Exchange Act of 1934, as amended.

1.34. FBCA. The term "FBCA" shall mean the Florida Business Corporation
Act.

1.35. Financial Statements. The term "Financial Statements" shall have
the meaning set forth in Section 3.6.

1.36. GAAP. The term "GAAP" shall mean generally accepted accounting
principles, applied on a consistent basis with prior periods, set forth in the
opinions and pronouncements of the Accounting Principles Board of the American
Institute of Certified Public Accountants and statements and pronouncements of
the Financial Accounting Standards Board or in such other statements by such
other entity or other practices and procedures as may be approved by a
significant segment of the accounting profession, which are applicable to the
circumstances as of the date of the determination.

1.37. Governmental Authority. The term "Governmental Authority" shall
mean any national, state, provincial, local or tribunal governmental, judicial
or administrative authority or agency.

1.38. Indemnified Party. The term "Indemnified Party" shall have the
meaning set forth in Section 14.3(a).

1.39. Indemnifying Party. The term "Indemnifying Party" shall have the
meaning set forth in Section 14.3(a).

1.40. Indemnity Notice. The term "Indemnity Notice" shall have the
meaning set forth in Section 14.3(d).

1.41. Insurance Policies. The term "Insurance Policies" shall have the
meaning set forth in Section 3.13.

1.42. Inventory. The term "Inventory" shall have the meaning set forth
in Section 2.1(a).

1.43. Lease Assignments. The term "Lease Assignments" shall have the
meaning set forth in Section 12.1(r).

1.44. Leased Property. The term "Leased Property" shall have the
meaning set forth in Section 2.1(d).

-4-
<PAGE> 5

1.45. IRS. The term "IRS" shall mean the Internal Revenue Service.

1.46. Management Business. The term "Management Business" shall have
the meaning set forth in Section 17.1(b)(i).

1.47. Material Adverse Effect. The term "Material Adverse Effect" shall
mean a material adverse effect on the Nonmedical Assets and the Company's
business, operations, condition (financial or otherwise) or results of
operations, taken as a whole, considering all relevant facts and circumstances.

1.48. Medical Assets. The term "Medical Assets" shall have the meaning
set forth in Section 2.2.

1.49. Nonmedical Assets. The term "Nonmedical Assets" shall mean all of
the assets of the Company except for the Medical Assets, as such assets are more
fully described in Section 2.1.

1.50. Optometrist Employee. The term "Optometrist Employee" shall mean
those licensed optometrists who are employees of the Company, but are not
shareholders.

1.51. Optometrist Employment Agreement. The term "Optometrist
Employment Agreement" shall mean the Optometrist Employment Agreement to be
executed between any Optometrist Employee and the Company.

1.52. Payors. The term "Payors" shall have the meaning set forth in
Section 3.27.

1.53. Permitted Encumbrances. The term "Permitted Encumbrances" shall
have the meaning set forth in Section 3.11(b).

1.54. Personal Property Leases. The term "Personal Property Leases"
shall have the meaning set forth in Section 2.1(c).

1.55. Physician Employee. The term "Physician Employee" shall mean
those licensed physicians who are employees of the Company, but are not
shareholders.

1.56. Physician Employment Agreement. The term "Physician Employment
Agreement" shall mean the Physician Employment Agreement to be executed between
Physician and the Company, and between any Physician Employee and the Company.

1.57. Practice. The term "Practice" shall mean the ophthalmology,
optometry and all other vision related health-care practices conducted from time
to time by the Company prior to and after the Closing Date.

-5-

<PAGE> 6

1.58. Prepaid Items. The term "Prepaid Items" shall have the meaning
set forth in Section 2.1(n).

1.59. Professional Employee. The term "Professional Employee" shall
mean any Physician Employee or Optometrist Employee.

1.60. Proposed Purchase Price Adjustment. The term "Proposed Purchase
Price Adjustment" shall have the meaning set forth in Section 2.6(b).

1.61. Proprietary Rights. The term "Proprietary Rights" shall have the
meaning set forth in Section 3.14.

1.62. Public Offering. The term "Public Offering" shall mean any
underwritten public offering of Vision 21 Common Stock, including initial and
secondary offerings.

1.63. Purchase Price. The term "Purchase Price" shall mean the
consideration set forth in Section 2.4 of this Agreement.

1.64. Real Property Leases. The term "Real Property Leases" shall have
the meaning set forth in Section 2.1(d).

1.65. Recent Acquisitions. The term "Recent Acquisitions" shall mean
the acquisitions by Vision 21 with third parties which were completed in
December 1996, March 1997 and May 1997.

1.66. Registration Statement. The term "Registration Statement" shall
mean any S-1 Registration Statement filed by Vision 21 in connection with a
Public Offering.

1.67. SEC. The term "SEC" shall mean the Securities and Exchange
Commission.

1.68. Securities. The term "Securities" shall mean the shares of Vision
21 Common Stock which shall be delivered to the Company under the terms of this
Agreement.

1.69. Securities Act. The term "Securities Act" shall mean the
Securities Act of 1933, as amended.

1.70. State. The term "State" shall mean the State of Arizona.

1.71. Tangible Personal Property. The term "Tangible Personal Property"
shall have the meaning set forth in Section 2.1(f).

1.72. Tax Returns. The term "Tax Returns" shall have the meaning set
forth in Section 3.15(a).

-6-

<PAGE> 7

1.73. Third Party Claim. The term "Third Party Claim" shall have the
meaning set forth in Section 14.3(a).

1.74. Transaction. The term "Transaction" shall mean the purchase and
sale of the Nonmedical Assets and the assumption of the Assumed Obligations
pursuant to this Agreement.

1.75. Vision 21 Financial Statements. The term "Vision 21 Financial
Statements" shall have the meaning set forth in Section 5.9.

2. PURCHASE AND SALE OF NONMEDICAL ASSETS.

2.1. Purchase and Sale of Nonmedical Assets. Subject to the terms and
conditions herein set forth, and in reliance upon the representations and
warranties set forth herein, the Company agrees to sell, convey, assign,
transfer and deliver to Vision 21, and Vision 21 agrees to purchase, assume,
accept and acquire, the assets consisting of all the assets (other than the
Medical Assets specified in Section 2.2 hereof) owned by the Company as of the
Closing Date, of every kind, character and description, whether tangible, real,
personal, or mixed, and wheresoever located, whether carried on the books of the
Company or not carried on the books of the Company due to having been expended,
fully depreciated, or otherwise (the "Nonmedical Assets"), including without
limitation the following (except to the extent that any of the following are
specifically enumerated as Medical Assets in Section 2.2 hereof) to the extent
permitted by applicable law:

a. All of the inventory owned by the Company ("Inventory");

b. All of the accounts receivable or other rights to receive
payment owing to the Company ("Accounts Receivable");

c. All of the Company's rights in, to and under all leases of
supplies, instruments, equipment, furniture, machinery and other items of
tangible personal property ("Personal Property Leases"), including, without
limitation, the Personal Property Leases described on Schedule 2.1(c);

d. All of the Company's rights as a lessee in, to and under all
real property lease agreements (such real property lease agreements are
hereinafter referred to as "Real Property Leases" and the parcels of real
property in which the Company has a leasehold interest and that are subject to
the Real Property Leases are hereinafter referred to as "Leased Property"),
including, without limitation, estates created by, and rights conferred under,
the Real Property Leases described on Schedule 2.1(d), and any and all estates,
rights, titles and interests in, to and under all warehouses, storage
facilities, buildings, works, structures, fixtures, landings, constructions in
progress, improvements, betterments, installations, and additions constructed or
located on or affixed to the Leased Property;

-7-

<PAGE> 8

e. All of the Company's rights in, to and under all contracts,
agreements, insurance policies, purchase orders and commitments (the "Assumed
Contracts"), including, without limitation, the Assumed Contracts described on
Schedule 2.1(e);

f. All tangible personal property (including supplies,
instruments, equipment, furniture and machinery) owned by the Company ("Tangible
Personal Property"), including, without limitation, the Tangible Personal
Property described on Schedule 2.1(f);

g. All books and records of the Company, including, without
limitation, all credit records, payroll records, computer records, computer
programs, contracts, agreements, operating manuals, schedules of assets,
correspondence, books of account, files, papers, books and all other public and
confidential business records (together the "Business Records"), whether such
Business Records are in hard copy form or are electronically or magnetically
stored;

h. All franchises, licenses, permits, certificates, approvals and
other governmental authorizations necessary to own and operate any of the other
Nonmedical Assets, a complete and correct list of which is set forth on Schedule
2.1(h);

i. All (i) United States and foreign patents, patent
applications, trademarks, trademark applications and registrations, service
marks, service mark applications and registrations, copyrights, copyright
applications and registrations and trade names of the Company; (ii) proprietary
data and technical, manufacturing know-how and information (and all materials
embodying such information) of the Company; (iii) developments, discoveries,
inventions, ideas and trade secrets of the Company; and (iv) rights to sue for
past infringement;

j. All of the Company's right, title and interest in, to and
under all telephone numbers used in connection with the Practice, including all
extensions thereto;

k. All rights in, to and under all representations, warranties,
covenants and guaranties made or provided by third parties to or for the benefit
of the Company with respect to any of the other Nonmedical Assets;

m. All cash in registers or petty cash drawers (which shall on
the Closing Date be at least ninety percent (90%) of the average daily cash
balance held in such locations in the twelve (12) month period preceding the
Closing Date); and

n. All of the Company's prepaid expenses, prepaid insurance,
deposits and other similar items ("Prepaid Items").

-8-

<PAGE> 9

Property Lease, Real Property Lease, Assumed Contract or License, as the case
may be, only upon and subject to receipt of such consent; (ii) such personal
property lease, contract, agreement, purchase order, work order, commitment,
license, permit, certificate or approval shall not be a Personal Property Lease,
Real Property Lease, Assumed Contract or License, as the case may be, if and for
so long as the attempted assignment would constitute a breach thereof; and (iii)
the Company shall cooperate fully with Vision 21 (or Vision 21's
successor-in-interest) in seeking such consent or reasonable arrangement
designed to provide to Vision 21 (or such successor-in-interest) the benefits,
claim or rights arising thereunder.

2.2. No Sale of Medical Assets; Other Excluded Assets. The Company
shall not sell, convey, assign, transfer or deliver to Vision 21, and Vision 21
shall not be obligated to purchase, accept or acquire (or make any payments or
otherwise discharge any liability or obligation of the Company with respect to),
the Medical Assets of the Company as set forth on Schedule 2.2 and those other
assets listed on the other Schedules attached hereto which by law cannot be
acquired by Vision 21 which shall also be deemed to include (a) life insurance
policies covering the life of any employee of the Company, and (b) personal
effects listed on Schedule 2.2(b); and (c) cash and cash equivalents in banks,
certificates of deposit, commercial paper and securities owned by the Company
(but excluding cash held in registers or petty cash drawers on the Closing
Date); and (d) those assets of which the entire costs of maintenance are deemed
to be "Practice Expenses" as defined in the Business Management Agreement.

2.3. Assumption of Obligations and Liabilities. At the Closing, Vision
21 shall assume and agree to pay or perform, promptly as they become due, only
those obligations and liabilities of the Company expressly set forth on Schedule
2.3 (the "Assumed Obligations") which shall exclude the Business Management
Agreement. Except for the Assumed Obligations, Vision 21 shall not assume or be
deemed to have assumed and shall not be responsible for any other obligation or
liability of the Company, direct or indirect, known or unknown, absolute or
contingent, including without limitation (i) any and all obligations regarding
any foreign, Federal, state or local income, sales, use, franchise or other tax
liabilities, (ii) any and all obligations or liabilities relating to any fees or
expenses of the Company's or Physicians' counsel, accountants or other experts
incident to the negotiation and preparation of any of the documents contemplated
herein and consummation of the transactions contemplated thereby, and (iii) any
and all liabilities relating to or arising from the provision of professional
medical or optometric services (or failure to provide professional medical or
optometric services) prior to the Closing Date.

2.4. Purchase Price. Vision 21 agrees that, subject to the terms and
conditions of this Agreement, and in full consideration for the aforesaid sale,
transfer, conveyance, assignment and delivery of the Nonmedical Assets of the
Company to Vision 21, and the acceptance by Vision 21 of such Nonmedical Assets
and the assumption of the Assumed Obligations of the Company by Vision 21,
Vision 21 shall deliver to the Company at the Closing the consideration (the
"Purchase Price") set forth in Schedule 2.4A.

-9-

<PAGE> 10

2.5. The Closing. The Closing shall take place on the Closing Date at
the offices of Shumaker, Loop & Kendrick, 101 E. Kennedy Boulevard, Suite 2800,
Tampa, Florida 33602 or at such other location in the State as the parties shall
mutually agree.

2.6. Purchase Price Adjustments.

a. The Purchase Price shall be subject to adjustment to the extent
that Current Assets (as defined herein) or Current Liabilities Assumed (as
defined herein) materially differ from the amounts customarily arising in the
ordinary course of business of the Company as of May 31, 1997. The term "Current
Assets" shall mean petty cash, Accounts Receivable, prepaid expenses, Inventory,
supplies and other current assets (excluding cash in banks, certificates of
deposit, other cash equivalents, current portion of capital leases and prepaid
Income Taxes). The term "Current Liabilities Assumed" shall mean the audited
balances as of May 31, 1997 of trade accounts payable, accrued payroll, accrued
payroll taxes, accrued benefits, and other current liabilities (excluding notes
payable, current portion of capital leases and long-term debt and income and
franchise taxes and accrued shareholder expenses). The adjustment shall be
settled in cash (which shall be set-off from moneys due the Company pursuant to
the Business Management Agreement) or Vision 21 Common Stock at Vision 21's
option. The parties also agree that to the extent the adjustments materially
impact the goodwill created by the transaction, there shall be an adjustment for
the related impact of net income created by the change in amortization of such
goodwill and the Purchase Price shall be increased or reduced to reflect the
impact on net income settled in cash or Vision 21 Common Stock at Vision 21's
option.

b. Within sixty (60) days following the Closing Date, Vision 21
shall present to the Physician its Purchase Price adjustment (the "Proposed
Purchase Price Adjustment") calculated in accordance with Section 2.6(a) hereof.
The Physician shall, within thirty (30) days after the delivery by Vision 21 of
the Proposed Purchase Price Adjustment, complete his review thereof. In the
event that the Physician believes that the Proposed Purchase Price Adjustment
has not been prepared on the basis set forth in Section 2.6(a) or otherwise
contests any item set forth therein, the Physician shall, on or before the last
day of such 30 day period, so object to Vision 21 in writing, setting forth a
specific description of the nature of the objection and the corresponding
adjustments the Physician believes should be made. If no objection is received
by Vision 21 on or before the last day of such 30 day period, then the Proposed
Purchase Price Adjustment delivered by Vision 21 shall be final. If an objection
has been made and Vision 21 and the Physician are unable to resolve all of their
disagreements with respect to the proposed adjustments within 15 days following
the delivery of the Physician's objection, the dispute shall be submitted to
arbitration as provided in Section 18.1 except that the arbitrator shall be
instructed to deliver his determination of the dispute to the parties no later
than 30 days after the arbitration hearing. Vision 21 shall provide to the
Physician and his accountants full access to all relevant books, records and
work papers utilized in preparing the Proposed Purchase Price Adjustment.

2.7. Subsequent Actions. If, at any time after the Closing Date, Vision
21 shall determine or be advised that any deeds, bills of sale, assignments,
assurances or any other

-10-

<PAGE> 11

actions or things are necessary or desirable to vest, perfect or confirm of
record or otherwise in Vision 21 its right, title or interest in, to or under
any of the rights, properties or assets of the Company acquired or to be
acquired by Vision 21 as a result of, or in connection with, the Transaction, or
otherwise to carry out this Agreement, the officers and directors of Vision 21
shall, at the sole cost and expense of Vision 21, be authorized to execute and
deliver, in the name and on behalf of the Company, such deeds, bills of sale,
assignments and assurances, and to take and do, in the name and on behalf of the
Company, all such other actions and things as may be necessary or desirable to
vest, perfect or confirm any and all right, title and interest in, to and under
such rights, properties or assets in Vision 21 or otherwise to carry out this
Agreement.

2.8. Allocation of Purchase Price. The Purchase Price shall be
allocated among the Nonmedical Assets as set forth on Schedule 2.8. Each of
Vision 21, the Company and the Physician covenants and agrees that he or it
shall not take a position that is in any way inconsistent with the terms of this
Section 2.8 on any income tax return, before any governmental agency charged
with the collection of any income tax or in any judicial proceeding.

3. REPRESENTATIONS AND WARRANTIES OF THE COMPANY AND THE PHYSICIAN.
The Company and the Physician, jointly and severally, represent and warrant to
Vision 21 that the following are true and correct as of the date hereof, and
shall be true and correct through the Closing Date as if made on that date; when
used in this Section 3, the term "best knowledge" shall mean in the case of the
Company the best knowledge of those individuals listed on Schedule 3:

3.1. Organization and Good Standing; Qualification. The Company is a
professional association duly organized, validly existing and in good standing
under the laws of the State, with all requisite corporate power and authority to
carry on the business in which it is engaged, to own the properties it owns, to
execute and deliver this Agreement and to consummate the transactions
contemplated hereby. The Company is not duly qualified and licensed to do
business in any other jurisdiction. The Company does not have any assets,
employees or offices in any state other than the State. Except as set forth on
Schedule 3.1, neither the Company, the Physician nor any Professional Employee
owns, directly or indirectly, any of the capital stock of any other corporation
or any equity, profit sharing, participation or other interest in any
corporation, partnership, joint venture or other entity that is engaged in a
business that is a Competitor.

3.2. Continuity of Business Enterprise. Except as set forth on Schedule
3.2, and except as contemplated by this Agreement, there has not been any sale,
distribution or spin-off of significant assets of the Company or any of its
Affiliates other than in the ordinary course of business within the two (2) year
period preceding the date of this Agreement.

3.3. Authorization and Validity. The execution, delivery and
performance by the Company of this Agreement and the other agreements
contemplated hereby, and the

-11-

<PAGE> 12

consummation of the transactions contemplated hereby and thereby to be performed
by the Company, have been duly authorized by the Company. This Agreement has
been or will be by the Closing Date, duly executed by the Company and, upon
delivery, will constitute the legal, valid and binding obligation of the Company
enforceable against the Company in accordance with its terms, except as may be
limited by applicable bankruptcy, insolvency or similar laws affecting
creditors' rights generally or the availability of equitable remedies. The
Company has obtained, in accordance with applicable law and its Articles or
Certificate of Incorporation and Bylaws, the approval of its stockholders
necessary for the consummation of the transactions contemplated hereby.

3.4. Compliance. Except as disclosed on Schedule 3.4, the execution and
delivery of the documents contemplated hereunder and the consummation of the
transactions contemplated thereby by the Company will not (i) violate any
provision of the Company's organizational documents, (ii) violate any material
provision of or result in the breach of or entitle any party to accelerate
(whether after the giving of notice or lapse of time or both) any material
obligation under, any mortgage, lien, lease, contract, license, instrument or
any other agreement to which the Company is a party, (iii) result in the
creation or imposition of any material lien, charge, pledge, security interest
or other material encumbrance upon any property of the Company or (iv) violate
or conflict with any order, award, judgment or decree or other material
restriction or to the best of the Company's knowledge violate or conflict with
any law, ordinance or regulation to which the Company or its property is
subject.

3.5. Consents. No consent, approval, order or authorization of or
registration, declaration, or filing with, any Governmental Authority or other
person is required in connection with the execution and delivery of the
documents contemplated herein by the Company or the consummation by such party
of the transactions contemplated thereby, except for those consents or approvals
set forth on Schedule 3.5.

3.6. Financial Statements. The Company has furnished to Vision 21 its
unaudited balance sheet and related unaudited statements of income, retained
earnings and cash flows for its prior three (3) full fiscal years, and its
unaudited interim balance sheet for the fiscal period ended April 30, 1997 (the
"Company Balance Sheet", and the date thereof shall be referred to as the
"Company Balance Sheet Date") and related unaudited statements of income,
retained earnings and cash flows for the twelve months then ended (all
collectively, with the related notes thereto, the "Financial Statements"). The
Financial Statements fairly present the financial condition and results of
operations of the Company as of the dates and for the periods indicated except
as otherwise indicated in the Financial Statements. The Company and the
Physician expressly warrant that they will have prior to the Closing fairly,
accurately and completely provided all necessary information requested in or
relevant to the preparation of the audit to be conducted by the Accountants or
their designees prior to Closing (the "Audit").

3.7. Liabilities and Obligations. Except as set forth on Schedule 3.7,
the Financial Statements reflect all liabilities of the Company, accrued,
contingent or otherwise that would be required to be reflected thereon, or in
the notes thereto, prepared in accordance with GAAP,

-12-

<PAGE> 13

except for liabilities and obligations incurred in the ordinary course of
business since the Company Balance Sheet Date. Except as set forth in the
Financial Statements or on Schedule 3.7, the Company is not liable upon or with
respect to, or obligated in any other way to provide funds in respect of or to
guarantee or assume in any manner, any debt, obligation or dividend of any
person, corporation, association, partnership, joint venture, trust or other
entity, and the Company does not know of any valid basis for the assertion of
any other claims or liabilities of any nature or in any amount.

3.8. Employee Matters.

a. Cash Compensation. Schedule 3.8(a) contains a complete and
accurate list of the names, titles and annual cash compensation as of the
Closing Date, including without limitation wages, salaries, bonuses
(discretionary and formula) and other cash compensation (the "Cash
Compensation") of all employees of the Company. In addition, Schedule 3.8(a)
contains a complete and accurate description of (i) all increases in Cash
Compensation of employees of the Company during the current fiscal year and the
immediately preceding fiscal year and (ii) any promised increases in Cash
Compensation of employees of the Company that have not yet been effected.

b. Compensation Plans. Schedule 3.8(b) contains a complete and
accurate list of all compensation plans, arrangements or practices (the
"Compensation Plans") sponsored by the Company or to which the Company
contributes on behalf of its employees, other than Employment Agreements listed
on Schedule 3.8(c) and Employee Benefit Plans listed on Schedule 3.9(a). The
Compensation Plans include without limitation plans, arrangements or practices
that provide for performance awards, and stock ownership or stock options. The
Company has provided or made available to Vision 21 a copy of each written
Compensation Plan and a written description of each unwritten Compensation Plan.
Except as set forth on Schedule 3.8(b), each of the Compensation Plans can be
terminated or amended at will by the Company.

c. Employment Agreements. Except as set forth on Schedule 3.8(c),
the Company is not a party to any employment agreement ("Employment Agreements")
with respect to any of its employees. Employment Agreements include without
limitation employee leasing agreements, employee services agreements and
non-competition agreements.

d. Employee Policies and Procedures. Schedule 3.8(d) contains a
complete and accurate list of all employee manuals and all material policies,
procedures and work-related rules (the "Employee Policies and Procedures") that
apply to employees of the Company. The Company has provided or made available to
Vision 21 a copy of all written Employee Policies and Procedures and a written
description of all material unwritten Employee Policies and Procedures.

e. Unwritten Amendments. Except as described on Schedule 3.8(b),
3.8(c), or 3.8(d), no material unwritten amendments have been made, whether by
oral

-13-

<PAGE> 14

communication, pattern of conduct or otherwise, with respect to any Compensation
Plans or Employee Policies and Procedures.

f. Labor Compliance. To the best knowledge of the Company and the
Physician, the Company has been and is in compliance with all applicable laws,
rules, regulations and ordinances respecting employment and employment
practices, terms and conditions of employment and wages and hours, except for
any such failures to be in compliance that, individually or in the aggregate,
would not result in a Material Adverse Effect, and the Company is not liable for
any arrearages of wages or penalties for failure to comply with any of the
foregoing. The Company has not, to the best of Physician's and the Company's
knowledge, engaged in any unfair labor practices or discriminated on the basis
of race, color, religion, sex, national origin, age, disability or handicap in
its employment conditions or practices that would, individually or in the
aggregate, result in a Material Adverse Effect. Except as set forth on Schedule
3.10(f), there are no (i) unfair labor practice charges or complaints or racial,
color, religious, sex, national origin, age, disability or handicap
discrimination charges or complaints pending or, to the actual knowledge of the
Company and the Physician, threatened against the Company before any federal,
state or local court, board, department, commission or agency (nor, to the best
knowledge of the Company and the Physician, does any valid basis therefor exist)
or (ii) existing or, to the actual knowledge of the Company, threatened labor
strikes, disputes, grievances, controversies or other labor troubles affecting
the Company (nor, to the best knowledge of the Company and the Physician, does
any valid basis therefor exist).

g. Unions. The Company has never been a party to any agreement
with any union, labor organization or collective bargaining unit. No employees
of the Company are represented by any union, labor organization or collective
bargaining unit. Except as set forth on Schedule 3.8(g), to the actual knowledge
of the Company, none of the employees of the Company has threatened to organize
or join a union, labor organization or collective bargaining unit.

h. Aliens. All employees of the Company are, to the best knowledge
of the Company, citizens of, or are authorized in accordance with federal
immigration laws to be employed in, the United States.

3.9. Employee Benefit Plans.

a. Identification. Schedule 3.9(a) contains a complete and
accurate list of all employee benefit plans (within the meaning of Section 3(3)
of ERISA sponsored by the Company or to which the Company contributes on behalf
of its employees and all employee benefit plans previously sponsored or
contributed to on behalf of its employees within the three (3) years preceding
the date hereof (the "Employee Benefit Plans"). The Company has provided or made
available to Vision 21 copies of all plan documents, determination letters,
pending determination letter applications, trust instruments, insurance
contracts, administrative services contracts, annual reports, actuarial
valuations, summary plan descriptions, summaries of material

-14-

<PAGE> 15

modifications, administrative forms and other documents that constitute a part
of or are incident to the administration of the Employee Benefit Plans. In
addition, the Company has provided or made available to Vision 21 a written
description of all existing practices engaged in by the Company that constitute
Employee Benefit Plans. Except as set forth on Schedule 3.9(a) and subject to
the requirements of the Code and ERISA, each of the Employee Benefit Plans can
be terminated or amended at will by the Company. Except as set forth on Schedule
3.9(a), no unwritten amendment exists with respect to any Employee Benefit Plan.
Except as set forth on Schedules 3.9(b)-(l), each of the following paragraphs is
true and correct.

b. Administration. To the best knowledge of the Company and the
Physician, each Employee Benefit Plan has been administered and maintained in
compliance with all applicable laws, rules and regulations, except where the
failure to be in compliance would not, individually or in the aggregate, result
in a Material Adverse Effect. The Company and the Physician have (i) made all
necessary filings with respect to such Employee Benefit Plans, including the
timely filing of Form 5500 if applicable, and (ii) made all necessary filings,
reports and disclosures pursuant to and have complied with all requirements of
the IRS Voluntary Compliance Resolution Program, if applicable, with respect to
all profit sharing retirement plans and pension plans in which employees of the
Company participate.

c. Examinations. Except as set forth on Schedule 3.9(c), the
Company has not received any notice that any Employee Benefit Plan is currently
the subject of an audit, investigation, enforcement action or other similar
proceeding conducted by any state or federal agency.

d. Prohibited Transactions. To the best knowledge of the Company
and the Physician, no prohibited transactions (within the meaning of Section
4975 of the Code or Sections 406 and 407 of ERISA) have occurred with respect to
any Employee Benefit Plans.

e. Claims and Litigation. No pending or, to the actual knowledge
of the Company and the Physician, threatened, claims, suits, or other
proceedings exist with respect to any Employee Benefit Plan other than normal
benefit claims filed by participants or beneficiaries.

f. Qualification. As set forth in more detail on Schedule 3.9(f),
the Company has received a favorable determination letter or ruling from the IRS
for each of the Employee Benefit Plans intended to be qualified within the
meaning of Section 401(a) of the Code and/or tax-exempt within the meaning of
Section 501(a) of the Code. Except as set forth on Schedule 3.9(e), no
proceedings exist or, to the actual knowledge of the Company have been
threatened that could result in the revocation of any such favorable
determination letter or ruling.

g. Funding Status. To the best knowledge of the Company and the
Physician, no accumulated funding deficiency (within the meaning of Section 412
of the Code), whether or not waived, exists with respect to any Employee Benefit
Plan or any plan sponsored by any member of a controlled group (within the
meaning of Section 412(n)(6)(B) of the Code)

-15-

<PAGE> 16

in which the Company is a member ("Controlled Group"). With respect to each
Employee Benefit Plan subject to Title IV of ERISA, the assets of each such plan
are at least equal in value to the present value of accrued benefits determined
on an ongoing basis as of the date hereof. The Company does not sponsor any
Employee Benefit Plan described in Section 501(c)(9) of the Code. None of the
Employee Benefit Plans are subject to actuarial assumptions.

i. Multiemployer Plans. Neither the Company nor any member of a
Controlled Group is or ever has been obligated to contribute to a multiemployer
plan within the meaning of Section 3(37) of ERISA.

j. Pension Benefit Guaranty Corporation. None of the Employee
Benefit Plans are subject to the requirements of Title IV of ERISA.

l. Other Compensation. Except as set forth on Schedules 3.8(a),
3.8(b), 3.8(c), 3.8(d) and 3.9(a), neither the Company, the Physician nor any
Professional Employee is a party to any compensation or debt arrangement with
any person relating to the provision of health care related services other than
arrangements with the Company or the Physician.

3.10. Absence of Certain Changes. Except as set forth on Schedule 3.10
or as contemplated by this Agreement, since the Company Balance Sheet Date, the
Company has not:

a. suffered a Material Adverse Effect, whether or not caused by
any deliberate act or omission of the Company or the Physician;

b. contracted for the purpose of acquiring any capital asset
having a cost in excess of $5,000 or made any single expenditure in excess of
$5,000;

c. incurred any indebtedness for borrowed money (other than
short-term borrowings in the ordinary course of business), or issued or sold any
debt securities;

d. incurred or discharged any material liabilities or obligations
except in the ordinary course of business;

-16-

<PAGE> 17

e. paid any amount on any indebtedness prior to the due date,
forgiven or canceled any claims or any debt in excess of $5,000, or released or
waived any rights or claims except in the ordinary course of business;

f. mortgaged, pledged or subjected to any security interest, lien,
lease or other charge or encumbrance any of its properties or assets (other than
statutory liens arising in the ordinary course of business or other liens that
do not materially detract from the value or interfere with the use of such
properties or assets);

g. suffered any damage or destruction to or loss of any assets
(whether or not covered by insurance) that has, individually or in the
aggregate, resulted in a Material Adverse Effect;

h. acquired or disposed of any assets having an aggregate value in
excess of $5,000, except in the ordinary course of business;

i. written up or written down the carrying value of any of its
assets, other than accounts receivable in the ordinary course of business;

j. changed the costing system or depreciation methods of
accounting for its assets in any material respect;

k. lost or terminated any employee, patient, customer or supplier
that has, individually or in the aggregate, resulted in a Material Adverse
Effect;

l. increased the compensation of any director, officer, key
employee or consultant, except as disclosed on Schedule 3.8(a);

n. made any payments to or loaned any money to any person or
entity referred to in Section 3.22;

o. formed or acquired or disposed of any interest in any
corporation, partnership, joint venture or other entity;

p. redeemed, purchased or otherwise acquired, or sold, granted or
otherwise disposed of, directly or indirectly, any of its capital stock or
securities, or agreed to change the terms and conditions of any such capital
stock, securities or rights;

q. entered into any agreement providing for total payments in
excess of $5,000 in any twelve (12) month period with any person or group, or
modified or amended in

-17-

<PAGE> 18

any material respect the terms of any such existing agreement, except in the
ordinary course of business;

r. entered into, adopted or amended any Employee Benefit Plan,
except as contemplated hereby or the other agreements contemplated hereby; or

s. entered into any other commitment or transaction or experienced
any other event that would materially interfere with its performance under this
Agreement or any other agreement or document executed or to be executed pursuant
to this Agreement, or otherwise has, individually or in the aggregate, resulted
in a Material Adverse Effect.

3.11. Title; Leased Assets.

a. Real Property. Except as set forth on Schedule 3.11(a), the
Company does not own any interest (other than leasehold interests referred to on
Schedule 3.11(c)) in real property. The owned and leased real property referred
to on Schedule 3.11(a) and Schedule 3.11(c), respectively, constitutes the only
real property necessary for the conduct of the Company's business.

b. Personal Property. Except as set forth on Schedule 3.11(b), the
Company and/or the Physician has good, valid and marketable title to all the
personal property constituting the Nonmedical Assets. The personal property
constituting the Nonmedical Assets constitute the only personal property
necessary for the conduct of the Company's business (except for the Medical
Assets). Upon consummation of the transactions contemplated hereby, such
interest in the Nonmedical Assets shall be free and clear of all security
interests, liens, claims and encumbrances, other than those set forth on
Schedule 3.11(b) (the "Permitted Encumbrances") and statutory liens arising in
the ordinary course of business or other liens that do not materially detract
from the value or interfere with the use of such properties or assets.

c. Leases. A list and brief description of (i) all Real Property
Leases and (ii) Personal Property Leases involving rental payments within any
twelve (12) month period in excess of $12,000, in either case to which the
Company is a party, either as lessor or lessee, are set forth on Schedule
3.11(c). All such leases are valid and, to the knowledge of the Company,
enforceable 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.

3.12. Commitments.

a. Commitments; Defaults. Except as set forth on Schedule 3.12 or
as otherwise disclosed pursuant to this Agreement, the Company is not a party to
nor bound by, nor are the Nonmedical Assets or the assets or the business of the
Company bound by, whether or not in writing, any of the following (collectively,
"Commitments"):

-18-

<PAGE> 19

i) partnership or joint venture agreement;

ii) guaranty or suretyship, indemnification or contribution
agreement or performance bond;

iii) debt instrument, loan agreement or other obligation
relating to indebtedness for borrowed money or money lent or to be lent to
another;

iv) contract to purchase real property;

vi) agreement relating to any material matter or transaction
in which an interest is held by a person or entity that is an Affiliate of the
Company or the Physician;

vii) agreement for the acquisition of services, supplies,
equipment, inventory, fixtures or other property involving more than $2,000 in
the aggregate;

viii) powers of attorney;

ix) contracts containing non-competition covenants;

x) agreement providing for the purchase from a supplier of
all or substantially all of the requirements of the Company of a particular
product or services;

xi) agreements regarding clinical research;

xii) agreements with Payors and contracts to provide medical
or health care services; or

-19-

<PAGE> 20

Company or, to the best knowledge of the Company, any other party to a material
Commitment, and no penalties have been incurred nor are amendments pending, with
respect to the material Commitments, except as described on Schedule 3.12. The
Commitments are in full force and effect and are valid and enforceable
obligations of the Company, and to the best knowledge of the Company, are valid
and enforceable obligations of the other parties thereto, in accordance with
their respective terms, and no defenses, off-sets or counterclaims have been
asserted or, to the best knowledge of the Company, may be made by any party
thereto (other than the Company), nor has the Company waived any rights
thereunder, except as described on Schedule 3.12. Except as set forth on
Schedule 3.12, no consents or approvals are required under the terms of any
agreement listed on Schedule 3.12 in connection with the transactions
contemplated herein, including, without limitation, the transfer of any such
agreement pursuant to this Agreement.

b. No Cancellation or Termination of Commitment. Except as
disclosed pursuant to this Agreement or contemplated hereby and except where
such action would not have a Material Adverse Effect on the Practice, (i)
neither the Company nor the Physician has received notice of any plan or
intention of any other party to any Commitment to exercise any right to cancel
or terminate any Commitment, and the Company does not know of any fact that
would justify the exercise of such a right; and (ii) neither the Company nor the
Physician currently contemplates, or has reason to believe any other person
currently contemplates, any amendment or change to any Commitment.

3.13. Insurance. The Company, the Physician and each Professional
Employee carries property, liability, malpractice, workers' compensation and
such other types of insurance pursuant to the insurance policies listed and
briefly described on Schedule 3.13 (the "Insurance Policies"). The Insurance
Policies are all of the insurance policies of the Company, the Physician and
each Professional Employee relating to the business of the Company and the
Nonmedical Assets. All of the Insurance Policies are issued by insurers of
recognized responsibility, and, to the best knowledge of the Company, are valid
and enforceable policies, except as may be limited by applicable bankruptcy,
insolvency or similar laws affecting creditors' rights generally or the
availability of equitable remedies. Except as set forth in Schedule 3.13, no
consent or approval is required for, and no other impediment or restriction
exists that will prohibit or limit, the transfer of any such Insurance Policies
included within the Nonmedical Assets in accordance with the terms of this
Agreement. All Insurance Policies shall be maintained in force without
interruption up to and including the Closing Date. True, complete and correct
copies of all Insurance Policies have been provided or made available to Vision
21. Except as set forth on Schedule 3.13, neither the Company nor the Physician
has received any notice or other communication from any issuer of any Insurance
Policy canceling such policy, materially increasing any deductibles or retained
amounts thereunder, and to the actual knowledge of the Company, no such
cancellation or increase of deductibles, retainages or premiums is threatened.
Except as set forth on Schedule 3.13, neither the Company, the Physician nor any
Professional Employee has any outstanding claims, settlements or premiums owed
against any Insurance Policy, and the Company, the Physician and each
Professional Employee has given all notices or has presented all potential or
actual claims under any

-20-

<PAGE> 21

Insurance Policy in due and timely fashion. Except as set forth on Schedule
3.13, since January 1, 1994, neither the Company, the Physician nor any
Professional Employee has filed a written application for any professional
liability insurance coverage which has been denied by an insurance agency or
carrier, and the Company, the Physician and each Professional Employee has been
continuously insured for professional malpractice claims for at least the past
seven (7) years (or such shorter periods of time that any Professional Employee
has been licensed to practice medicine). Schedule 3.13 also sets forth a list of
all claims under any Insurance Policy in excess of $10,000 per occurrence filed
by the Company, the Physician and each Professional Employee since January 1,
1994.

3.14. Proprietary Rights and Information. Set forth on Schedule 3.14 is
a true and correct description of the following ("Proprietary Rights"):

b. all agreements relating to technology, know-how or processes
that the Company is licensed or authorized to use by others (other than
technology, know-how or processes generally available to other health care
providers), or which it licenses or authorizes others to use.

The Company owns or has the legal right to use the Proprietary Rights, and to
the knowledge of the Company, such ownership or use does not conflict, infringe
or violate the rights of any other person. Except as disclosed on Schedule 3.14,
no consent of any person will be required for the use thereof by Vision 21 upon
consummation of the transactions contemplated hereby and the Proprietary Rights
are freely transferable. No claim has been asserted by any person to the
ownership of or for infringement by the Company of the proprietary right of any
other person, and the Company does not know of any valid basis for any such
claim. To the best knowledge of the Company and the Physician, the Company has
the right to use, free and clear of any adverse claims or rights of others, all
trade secrets, customer lists and proprietary information required for the
marketing of all merchandise and services formerly or presently sold or marketed
by it.

3.15. Taxes.

a. Filing of Tax Returns. The Company has duly and timely filed
(in accordance with any extensions duly granted by the appropriate governmental
agency, if applicable) with the appropriate governmental agencies all federal,
state, local or foreign income, excise, corporate, franchise, property, sales,
use, payroll, withholding, provider, value added and other tax returns and
reports (collectively the "Tax Returns") required to be filed by the United
States or any state or any political subdivision thereof or any foreign
jurisdiction. All

-21-

<PAGE> 22

such Tax Returns or reports are complete and accurate in all material respects
and properly reflect the taxes of the Company for the periods covered thereby.

b. Payment of Taxes. Except for such items as the Company may be
disputing in good faith by proceedings in compliance with applicable law, which
are described on Schedule 3.15, (i) the Company has paid all taxes, penalties,
assessments and interest that have become due with respect to any Tax Returns
that it has filed and has properly accrued on its books and records for all of
the same that have not yet become due, and (ii) the Company is not delinquent in
the payment of any tax, assessment or governmental charge.

c. No Pending Deficiencies, Delinquencies, Assessments or Audits.
Except as set forth on Schedule 3.15, the Company has not received any notice
that any tax deficiency or delinquency has been asserted against the Company.
There is no unpaid assessment, proposal for additional taxes, deficiency or
delinquency in the payment of any of the taxes of the Company that could be
asserted by any taxing authority. There is no taxing authority audit of the
Company pending, or to the actual knowledge of the Company, threatened, and the
results of any completed audits are properly reflected in the Financial
Statements. The Company has not, to its best knowledge, violated any federal,
state, local or foreign tax law.

d. No Extension of Limitation Period. The Company has not granted
an extension to any taxing authority of the limitation period during which any
tax liability may be assessed or collected.

e. All Withholding Requirements Satisfied. All monies required to
be withheld by the Company and paid to governmental agencies for all income,
social security, unemployment insurance, sales, excise, use, and other taxes
have been collected or withheld and paid to the respective governmental
agencies.

f. Foreign Person. Neither the Company nor the Physician is a
foreign person, as such term is referred to in Section 1445(f)(3) of the Code.

3.16. Compliance with Laws. The Company has not failed, and neither the
Company nor the Physician is aware of any failure by the Physician or any
Professional Employee to comply with all applicable laws, regulations and
licensing requirements relating to the operation of the Practice or failure to
file with the proper authorities all necessary statements and reports except
where the failure to so comply or file would not, individually or in the
aggregate, result in a Material Adverse Effect. There are no existing violations
by the Company, and neither the Company nor the Physician is aware of any
existing violations by the Physician or any Professional Employee of any
federal, state or local law or regulation that could, individually or in the
aggregate, result in a Material Adverse Effect. The Company, the Physician and
each Professional Employee possesses all necessary licenses, franchises, permits
and governmental authorizations for the conduct of the Company's business as now
conducted, all of which are listed (with expiration dates, if applicable) on
Schedule 3.16. Except as set forth on Schedule 3.16, the transactions
contemplated by this Agreement will not result in a default under

-22-

<PAGE> 23

or a breach or violation of, or adversely affect the rights and benefits
afforded by any such licenses, franchises, permits or government authorizations,
except for any such default, breach or violation that would not, individually or
in the aggregate, have a Material Adverse Effect. Except as set forth on
Schedule 3.16, since January 1, 1993, neither the Company nor the Physician has
received any notice from any federal, state or other governmental authority or
agency having jurisdiction over its, his or her properties or activities, or any
insurance or inspection body, that its, his or her operations or any of its, his
or her properties, facilities, equipment, or business practices fail to comply
with any applicable law, ordinance, regulation, building or zoning law, or
requirement of any public or quasi-public authority or body, except where
failure to so comply would not, individually or in the aggregate, have a
Material Adverse Effect. Except as set forth on Schedule 3.16, since January 1,
1993, to the knowledge of the Company based on a certificate in writing obtained
from each Professional Employee, no Professional Employee has received any
notice from any federal, state or other governmental authority or agency having
jurisdiction over his or her properties or activities, or any insurance or
inspection body, that his or her properties, facilities, equipment, or business
practices relating to, or used in connection with, the conduct of the Company's
business fail to comply with any applicable law, ordinance, regulation, or
requirement of any public or quasi-public authority or body, except where
failure to so comply would not, individually or in the aggregate, have a
Material Adverse Effect.

3.17. Finder's Fee. Except as set forth on Schedule 3.17, the Company
has not incurred any obligation for any finder's, brokers or agent's fee in
connection with the transactions contemplated hereby.

3.18. Litigation. Except as described on Schedule 3.18 or otherwise
disclosed pursuant to this Agreement, there are no legal actions or
administrative proceedings or investigations instituted, to the actual knowledge
of the Company or the Physician, which affect or could affect the Practice, the
Nonmedical Assets or the operation, business, condition (financial or
otherwise), or results of operations of the Company which (i) if successful
could, individually or in the aggregate, have a Material Adverse Effect or (ii)
could adversely affect the ability of the Company or the Physician to effect the
transactions contemplated hereby. Neither the Company nor the Physician is (a)
subject to any continuing court or administrative order, judgment, writ,
injunction or decree applicable specifically to the Nonmedical Assets, the
Company or to its business, assets, operations or employees or (b) in default
with respect to any such order, judgment, writ, injunction or decree. The
Company has no knowledge of any valid basis for any such action, proceeding or
investigation. Except as set forth on Schedule 3.18, all medical malpractice
claims asserted, general liability incidents and incident reports have been
submitted to the Company's insurer therefor. All claims made or threatened
against the Company in excess of its deductible are covered under its Insurance
Policies.

3.19. Condition of Fixed Assets. All of the fixtures, structures and
equipment reflected in the Financial Statements and used by the Company in its
business, are in good condition and repair, subject to normal wear and tear, and
conform in all material respects with

-23-

<PAGE> 24

all applicable ordinances, regulations and other laws, and the Company has no
actual knowledge of any latent defects therein.

3.20. 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 Company 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.

3.21. Banking Relations. Set forth on Schedule 3.21 is a complete and
accurate list of all borrowing and investing arrangements that the Company has
with any bank or other financial institution, indicating with respect to each
relationship the type of arrangement maintained (such as checking account,
borrowing arrangements, safe deposit box, etc.) and the person or persons
authorized in respect thereof.

3.22. Ownership Interests of Interested Persons; Affiliations. Except as
set forth on Schedule 3.22, no officer, supervisory employee or director of the
Company, or their respective spouses, children or Affiliates, owns directly or
indirectly, on an individual or joint basis, any interest in, has a compensation
or other financial arrangement with, or serves as an officer or director of, any
customer or supplier of the Company or any organization that has a material
contract or arrangement with the Company. Except as may be disclosed pursuant to
this Agreement, neither the Company, nor any of its directors, officers,
employees or consultants, nor any Affiliate of such person is, or within the
last three (3) years was, a party to any contract, lease, agreement or
arrangement, including, but not limited to, any joint venture or consulting
agreement with any physician, hospital, pharmacy, home health agency or other
person which is in a position to make or influence referrals to, or otherwise
generate business for, the Company.

3.23. Investments in Competitors. Except as disclosed on Schedule 3.23
and except for ownership of not more than 1% of any class of outstanding
securities of any company or entity if such class of securities is publicly
traded, neither the Company nor the Physician owns directly or indirectly any
interests or has any investment in any person that is a Competitor of the
Company.

3.24. Environmental Matters.

a. Environmental Laws. To the best knowledge of the Company and
the Physician, neither the Company nor any of the Nonmedical Assets (including
the leased real property described on Schedule 3.11(c)) are currently in
violation of, or subject to any existing, pending or, to the actual knowledge of
the Company threatened, investigation or inquiry by any governmental authority
or to any remedial obligations under, any federal, state or local laws or
regulations pertaining to health or the environment ("Environmental Laws"),
except for any such violations, investigations or inquiries that would not,
individually or in the aggregate, result in a Material Adverse Effect.

-24-

<PAGE> 25

b. Permits. The Company is not required to obtain, and has no
knowledge of any reason Vision 21 will be required to obtain, any permits,
licenses or similar authorizations to occupy, operate or use any buildings,
improvements, fixtures and equipment owned or leased by the Company by reason of
any Environmental Laws.

c. Superfund List. To the best knowledge of the Company, none of
the Nonmedical Assets (including the Company's leased real property described on
Schedule 3.11(c)) are on any federal or state "Superfund" list or subject to any
environmentally related liens, except such liens as would not, individually or
in the aggregate, result in a Material Adverse Effect.

3.25. Certain Payments. Neither the Company nor any director, officer or
employee of the Company acting for or on behalf of the Company, has paid or
caused to be paid, directly or indirectly, in connection with the business of
the Company:

a. to any government or agency thereof or any agent of any
supplier or customer any bribe, kick-back or other similar payment; or

3.26. Medical Waste. With respect to the generation, transportation,
treatment, storage, and disposal, or other handling of medical waste, to the
best knowledge of the Company and the Physician, the Company has complied with
all material federal, state or local laws or regulations pertaining to medical
waste.

3.27. Medicare and Medicaid Programs. The Company, the Physician and
each Professional Employee is qualified for participation in the Medicare and
Medicare programs and is party to provider agreements for such programs which
are in full force and effect with no events of default having occurred
thereunder. The Company, the Physician and each Professional Employee has timely
filed all claims or other reports required to be filed prior to the Closing Date
with respect to the purchase of services by third-party payors ("Payors"),
including but not limited to Medicare and Medicaid programs, except where the
failure to file would not, individually or in the aggregate, result in a
Material Adverse Effect. All such claims or reports are complete and accurate in
all material respects. The Company, the Physician and each Professional Employee
has paid or has properly recorded on the Financial Statements all actually known
and undisputed refunds, discounts or adjustments which have become due pursuant
to such claims, and neither the Company, the Physician nor any Professional
Employee has any material liability to any Payor with respect thereto, except as
has been reserved for in the Company Balance Sheet. There are no pending
appeals, overpayment determinations, adjustments, challenges, audits,
litigation, or notices of intent to reopen Medicare and/or Medicaid claims
determinations or other reports required to be filed by the Company, the
Physician or any Professional Employee in order to be paid by a Payor for
services rendered.

-25-

<PAGE> 26

Neither the Company, nor any of its directors, officers, employees, consultants
or the Physician has been convicted of, or pled guilty or nolo contendere to,
patient abuse or neglect, or any other Medicare or Medicaid program-related
offense. Neither the Company, nor its directors, officers, the Physician, or to
the best of the Company's knowledge, its employees or consultants, has committed
any offense which may serve as the basis for suspension or exclusion from the
Medicare and Medicaid programs, including but not limited to, defrauding a
government program, loss of a license to provide health services, and failure to
provide quality care.

3.28. Fraud and Abuse. To the best knowledge of the Company and the
Physician, the Company, its officers and directors, the Professional Employees,
and the other persons and entities providing professional services for the
Company, have not engaged in any activities which are prohibited under 42 U.S.C.
ss.ss. 1320-7, 7a or 7b or 42 U.S.C. ss.1395nn (subject to the exceptions set
forth in such legislation), or the regulations promulgated thereunder or
pursuant to similar 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 a false
statement or representation of a material fact for use in determining rights to
any benefit or payment;

e. referring a patient for designated health services (as defined
in 42 U.S.C. ss.1395nn) to or providing designated health services to a patient
upon a referral from an entity or person with which the Physician or the
Professional Employee or an immediate family member has a financial
relationship, and to which no exception under 42 U.S.C. ss.1395nn applies.

3.29. Payors. Schedule 3.29 sets forth a true, correct and complete
list of the names and addresses of each Payor, including any private pay
patient as a single payor, of the

-26-

<PAGE> 27

Company's services which accounted for more than 10% of the revenues of the
Company in the three (3) previous fiscal years. Except as set forth on Schedule
3.29, the Company has good relations with such Payors and none of such Payors
has notified the Company that it intends to discontinue its relationship with
the Company or to deny any claims submitted to such Payor for payment.

3.30. Prohibitions on the Corporate Practice of Medicine. To the best of
the Company's and the Physician's knowledge, the actions, transactions or
relationships arising from, and contemplated by this Agreement, do not violate
any law, rule or regulation relating to the corporate practice of medicine. The
Company and the Physician accordingly agree that the Company and the Physician
will not, in an attempt to void or nullify any document contemplated herein or
any relationship involving Vision 21, the Company or the Physician, sue, claim,
aver, allege or assert that any such document contemplated herein or any such
relationship violates any law, rule or regulation relating to the corporate
practice of medicine and expressly warrant that this Section is valid and
enforceable by Vision 21, and recognize that Vision 21 has relied upon the
statements herein in closing this Transaction.

3.31. Acquisition Proposals. Except for the negotiations, offers and
agreements with Vision 21 and its representatives, the Company is not bound by
any proposal or offer (including, without limitation, any proposal or offer of
its stockholders) with respect to a merger, acquisition, consolidation or
similar transaction involving, or any purchase of all or any significant portion
of the assets or any equity securities of, the Company (any such proposal or
offer being hereinafter referred to as an "Acquisition Proposal").

3.32. Consistent Treatment of Expenses. The Company has, in presenting
information concerning the Company's expenses to Vision 21 for the purpose of
determining the Company's value, separated out those expenses which shall be
borne by the Company in a manner which is consistent with the treatment of
expenses which shall be the responsibility of the Company pursuant to the
Business Management Agreement.

3.33. Accounts Receivable/Payable. The Accounts Receivable of the
Company relating to the ownership and operation of the Practice reflected on the
Company Balance Sheet, to the extent uncollected on the date hereof, are, and
the accounts receivable of the Company relating to the ownership and operation
of the Practice to be reflected on the books of the Company on the Closing Date
will be, valid, existing and collectible within six months from the Closing Date
(taking into consideration the allowance for doubtful accounts set forth in the
Financial Statements) using reasonably diligent collection methods taking into
account the size and nature of the receivable, and represent amounts due for
goods sold and delivered or services performed. There are not, and on the date
of Closing there will not be, any refunds, discounts, set-offs, defenses,
counterclaims or other adjustments payable or assessable with respect to the
Accounts Receivable. The Company has collected Accounts Receivable only in the
ordinary course and has not changed collection procedures or methods nor
accelerated the pace of such collection efforts in anticipation of the
transactions contemplated in this Agreement. The Company has paid accounts
payable in the ordinary course and has not changed payment

-27-

<PAGE> 28

procedures or methods nor delayed the timing of such payments in anticipation of
the transactions contemplated in this Agreement.

3.34. Projections. There is no fact, development or threatened
development with respect to the markets, products, services, clients, patients,
facilities, personnel, vendors, suppliers, operations, assets or prospects of
the Practice which are known to the Company or the Physician which would
materially adversely affect the projected fiscal year 1997 earnings of the
Company disclosed to Vision 21 by Physician, other than such conditions as may
affect as a whole the economy or the practice of medicine generally.

3.35. Inventory. Except as set forth on Schedule 3.35, to the best of
the Company's and the Physician's knowledge: (i) the Inventory is in its
originally manufactured condition, fit for the use for which it was intended,
free from any known defect and in a quantity and quality usable in the ordinary
course of business; (ii) the Inventory does not contain material amounts of
items that are slow-moving, obsolete or of below-standard quality; (iii) the
qualities and quantities of Inventory are reasonable and warranted in the
present and anticipated circumstances of the Practice; and (iv) there has been
no decrease in the physical Inventory since the Company Balance Sheet Date other
than in the ordinary course of business.

3.36. Tangible Personal Property. Except as set forth on Schedule 3.36,
the Company's Tangible Personal Property is in good operating condition, working
order and repair (normal wear and tear excepted) and is fully suitable for the
uses for which it is employed in the conduct of the Practice.

3.37. Leases. With respect to each of the Real Property Leases and
Personal Property Leases, except as set forth on Schedule 3.37:

a. such lease is legal, valid, binding, enforceable and in full
force and effect;

b. such lease will continue to be legal, valid, binding,
enforceable and in full force and effect on identical terms following the
Closing;

c. no party to such lease is in material breach or default, and no
event has occurred that, with notice or lapse of time, would constitute a
material breach or default or permit termination, modification or acceleration
thereunder;

d. no party to such lease has repudiated in writing any provision
thereof;

e. there are no disputes, oral agreements or forbearance programs
in effect as to such lease; and

f. The Company has performed and satisfied in full each material
obligation to be performed by the Company under such lease.

-28-

<PAGE> 29

3.38. Contract Rights. Except as set forth on Schedule 3.38, each of the
Assumed Contracts is valid and enforceable and is in full force and effect, and
there is no material default or existing condition that, with the giving of
notice or the passage of time, would constitute such a default by any parties
thereto. The Company has performed and satisfied in full each material
obligation required to be performed by the Company under each Assumed Contract.
If services are to be provided to the Company under any of such Assumed
Contracts, such services have been and are being performed satisfactorily and in
a timely manner, substantially in accordance with the terms of such Assumed
Contract.

3.39. Prepaid Items. Except as described on Schedule 3.13, Each of the
Prepaid Items may be transferred to Vision 21 without the necessity of obtaining
any consent or approval.

3.40. Completeness of Assets. Except for the real property owned and
utilized by the Company, the Nonmedical Assets, together with the Medical
Assets, include all the properties used to conduct the Practice as presently
conducted.

3.41. Disclosure. To the best of the Company's and the Physician's
knowledge, no representation, warranty or statement made by the Company or the
Physician in this Agreement or any of the exhibits or schedules hereto, or any
agreements, certificates, documents or instruments delivered or to be delivered
to Vision 21 in accordance with this Agreement or the other documents
contemplated herein, 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 contained herein or therein, in light of the circumstances under
which they were made, not misleading. The Company and the Physician do not know
of any fact or condition (other than general economic conditions or legislative
or administrative changes in health-care delivery) which materially adversely
affects, or in the future is reasonably likely to materially affect, the
condition, properties, assets, liabilities, business, operations or prospects of
the Practice which has not been set forth herein or in the Schedules provided
herewith.

4. REPRESENTATIONS AND WARRANTIES OF THE PHYSICIAN. The Physician
represents and warrants to Vision 21 that the following are true and correct as
of the date hereof, and shall be true and correct through the Closing Date as if
made on that date:

-29-

<PAGE> 30

4.2. No Violation. Except as set forth on Schedule 4.2, neither the
execution, delivery or performance of this Agreement, other agreements of the
Physician contemplated hereby or thereby, nor the consummation of the
transactions contemplated hereby or thereby, will (a) conflict with, or result
in a violation or breach of the terms, conditions or provisions of, or
constitute a default under, any agreement, indenture or other instrument under
which the Physician is bound or to which any of his property or the shares of
common stock of the Company are subject, or result in the creation or imposition
of any security interest, lien, charge or encumbrance upon any of his property
or the shares of common stock of the Company or (b) to the best knowledge of the
Physician, violate or conflict with any judgment, decree, order, statute, rule
or regulation of any court or any public, governmental or regulatory agency or
body.

4.3. Consents. Except as may be required under the Exchange Act, the
Securities Act, the Corporation Law and state securities laws, or otherwise
disclosed pursuant to this Agreement, no consent, authorization, approval,
permit or license of, or filing with, any governmental or public body or
authority, or any other person is required to authorize, or is required in
connection with, the execution, delivery and performance of this Agreement or
the agreements contemplated hereby on the part of the Physician.

4.4. Certain Payments. The Physician has not paid or caused to be paid,
directly or indirectly, in connection with the business of the Company:

a. to any government or agency thereof or any agent of any supplier
or customer any bribe, kick-back or other similar payment; or

b. any contribution to any political party or candidate (other than
from personal funds not reimbursed by the Company or as otherwise permitted by
applicable law).

4.5. Finder's Fee. Except as set forth on Schedule 4.5, the Physician
has not incurred any obligation for any finder's, broker's or agent's fee in
connection with the transactions contemplated hereby.

4.6. Ownership of Interested Persons; Affiliations. Except as set forth
on Schedule 4.6, neither the Physician nor his spouse, children or Affiliates,
owns directly or indirectly, on an individual or joint basis, any interest in,
has a compensation or other financial arrangement with, or serves as an officer
or director of, any customer or supplier of the Company or any organization that
has a material contact or arrangement with the Company. Neither the Physician
nor any of his Affiliates is, or with the last three (3) years was, a party to
any contract, lease, agreement or arrangement, including, but not limited to,
any joint venture or consulting agreement with any physician, hospital,
pharmacy, home health agency or other person which is in a position to make or
influence referrals to, or otherwise generate business for, the Company.

-30-

<PAGE> 31

4.7. Litigation. Except as disclosed on Schedule 4.7, there are no
claims, actions, suits, proceedings (arbitration or otherwise) or investigations
pending or, to the Physician's knowledge, threatened against the Physician at
law or at equity in any court or before or by any Governmental Authority, and,
to the Physician's knowledge, there are no, and have not been any, facts,
conditions or incidents that may result in any such actions, suits, proceedings
(arbitration or otherwise) or investigations. Except as set forth on Schedule
4.9, there have been no disciplinary, revocation or suspension proceedings or
similar types of claims, actions or proceedings, hearings or investigations
against the Physician or the Company.

4.8. Permits. To the best of the Physician's knowledge, the Physician
has all permits, licenses, orders and approvals of all Governmental Authorities
necessary to perform the services performed by the Physician in connection with
the conduct of the Practice. All such permits, licenses, orders and approvals
are in full force and effect and no suspension or cancellation of any of them is
pending or threatened. To the best of the Physician's knowledge, none of such
permits, licenses, orders or approvals will be adversely affected by the
consummation of the transactions contemplated herein. The Physician is a
participating physician, as such term is defined by the Medicare and Medicaid
programs, and the Physician has not been disciplined, sanctioned or excluded
from either the Medicare or Medicaid programs and has not been subject to any
plan of correction imposed by any professional review body.

4.9. Staff Privileges. Schedule 4.9 lists all hospitals at which the
Physician has full staff privileges. Such staff privileges have not been
revoked, surrendered, suspended or terminated, and to the Physician's knowledge,
there are no, and have not been any, facts, conditions or incidents that may
result in any such revocation, surrender, suspension or termination.

4.10. Intentions. Except as set forth on Schedule 4.10, the Physician
intends to continue practicing medicine on a full-time basis for at least the
next five (5) years with the Company and does not know of any fact or condition
that materially adversely affects, or in the future is reasonably likely to
materially adversely affect, his ability or intention to practice medicine on a
full-time basis for the next five (5) years with the Company.

5. REPRESENTATIONS AND WARRANTIES OF VISION 21. Vision 21 represents
and warrants to the Company and the Physician that the following are true and
correct as of the date hereof and shall be true and correct as of the Closing
Date; when used in this Section 5, the term "best knowledge" shall mean the best
knowledge of those individuals listed on Schedule 5:

5.1. Organization and Good Standing. Vision 21 is a corporation duly
organized, validly existing and in good standing under the laws of the State of
Florida, with all requisite corporation power and authority to carry on the
business in which it is engaged, to own the properties it owns, to execute and
deliver this Agreement and to consummate the transactions contemplated hereby.
At or prior to Closing, Vision 21 will be qualified to do business as a foreign
corporation in the jurisdictions listed on Schedule 5.1.

-31-

<PAGE> 32

5.2. Capitalization. The authorized capital stock of Vision 21 consists
of 50,000,000 shares of Vision 21 Common Stock, of which 5,516,124 shares are
issued and outstanding, and 10,000,000 shares of Vision 21 preferred stock,
$.001 par value per share ("Preferred Stock"), of which no shares are issued and
outstanding. Immediately prior to the Closing, the authorized capital stock of
Vision 21 will consist of 50,000,000 shares of Vision 21 Common Stock, of which
5,516,124 shares will be issued and outstanding, and 10,000,000 shares of Vision
21 Preferred Stock, of which no shares will be issued and outstanding.

5.3. Corporate Records. The copies of the Articles of Incorporation and
Bylaws, and all amendments thereto, of Vision 21 that have been delivered or
made available to the Company and the Physician are true, correct and complete
copies thereof, as in effect on the date hereof. The minute books of Vision 21,
copies of which have been delivered or made available to the Company and the
Physician, contain accurate minutes of all meetings of, and accurate consents to
all actions taken without meetings by, the Board of Directors (and any
committees thereof) and the stockholders of Vision 21, since its formation.

5.4. Authorization and Validity. The execution, delivery and
performance by Vision 21 of this Agreement and the other agreements contemplated
hereby, and the consummation of the transactions contemplated hereby and
thereby, have been duly authorized by Vision 21 in accordance with applicable
law, its Articles of Incorporation and Bylaws. This Agreement and each other
agreement contemplated hereby to be executed by Vision 21 have been or will be
as of the Closing Date duly executed and delivered by Vision 21 and constitute
or will constitute legal, valid and binding obligations of Vision 21,
enforceable against Vision 21 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.

5.5. Compliance. The execution and delivery of the documents
contemplated hereunder and the consummation of the transactions contemplated
thereby by Vision 21 shall not (i) violate any provision of Vision 21's
organizational documents, (ii) violate any material provision of or result in
the breach of or entitle any party to accelerate (whether after the giving of
notice or lapse of time or both) any material obligation under, any mortgage,
lien, lease, contract, license, instrument or any other agreement to which
Vision 21 is a party, (iii) result in the creation or imposition of any material
lien, charge, pledge, security interest or other material encumbrance upon any
property of Vision 21 or (iv) violate or conflict with any order, award,
judgment or decree or other material restriction or to the best of Vision 21's
knowledge violate or conflict with any law, ordinance or regulation to which
Vision 21 or its property is subject.

5.6. Consents. No consent, approval, order or authorization of or
registration, declaration, or filing with, any Governmental Authority or other
person is required in connection with the execution and delivery of the
documents contemplated herein by Vision 21 or the consummation by such party of
the transactions contemplated thereby, except for those consents or approvals
set forth on Schedule 5.6.

-32-

<PAGE> 33

5.7. Finder's Fee. Except as disclosed on Schedule 5.7, Vision 21 has
not incurred any obligation for any finder's, broker's or agent's fee in
connection with the transactions contemplated hereby.

5.8. Capital Stock. The issuance and delivery by Vision 21 of shares
of Vision 21 Common Stock in connection with this Agreement have been duly and
validly authorized by all necessary corporate action on the part of Vision 21 in
accordance with applicable law and its Articles of Incorporation and Bylaws. The
shares of Vision 21 Common Stock to be issued in connection with this Agreement,
when issued in accordance with the terms of this Agreement, will be validly
issued, fully paid and nonassessable and will not have been issued in violation
of any preemptive rights, rights of first refusal or similar rights of any of
Vision 21's stockholders, or any federal or state law, including, without
limitation, the registration requirements of applicable federal and state
securities laws.

5.9. Vision 21 Financial Statements. The audited consolidated balance
sheet and related statements of income and cash flows of Vision 21 for its prior
three (3) full fiscal years, and its unaudited interim balance sheet for the
fiscal quarter ended March 31, 1997 and the related unaudited statement of
income of Vision 21 for the period then ended (collectively, with the related
notes thereto, the "Vision 21 Financial Statements"), (a) fairly present the
financial condition and results of operations of Vision 21 as of the dates and
for the periods indicated; and (b) have been prepared in conformity with GAAP
(subject to normal year-end adjustments and the absence of notes for any
unaudited interim financial statement), except as otherwise indicated in the
Vision 21 Financial Statements.

5.10. Liabilities and Obligations. Except as disclosed on Schedule
5.10, the Vision 21 Financial Statements shall reflect all material liabilities
of Vision 21, accrued, contingent or otherwise, that would be required to be
reflected on a balance sheet, or in the notes thereto, prepared in accordance
with GAAP. Except as set forth on Schedule 5.10 or in the Vision 21 Financial
Statements, Vision 21 is not liable upon or with respect to, or obligated in any
other way to provide funds in respect of or to guarantee or assume in any
manner, any debt, obligation or dividend of any person, corporation,
association, partnership, joint venture, trust or other entity, and Vision 21
does not know of any valid basis for the assertion of any other claims or
liabilities of any nature or in any amount.

5.11. Compliance with Laws. Vision 21 has not failed to comply with any
applicable laws, regulations and licensing requirements or failed to file with
the proper authorities any necessary statements and reports except where the
failure to so comply or file would not, individually or in the aggregate, have a
material adverse effect on the Transaction. There are no existing violations by
Vision 21 of any federal, state or local law or regulation that could,
individually or in the aggregate, have a material adverse effect on the
Transaction. Vision 21 possesses all necessary licenses, franchises, permits and
governmental authorizations for the conduct of Vision 21's business as now
conducted and after the Closing, as contemplated in this Agreement and the
Business Management Agreement, except for such licenses, franchises, permits or
governmental authorizations which, if not possessed by Vision 21, would not have

-33-

<PAGE> 34

a material adverse effect on the business of Vision 21. The transactions
contemplated by this Agreement will not result in a default under or a breach or
violation of, or adversely affect the rights and benefits afforded by any such
licenses, franchises, permits or government authorizations, except for any such
default, breach or violation that would not, individually or in the aggregate,
have a material adverse effect on the Transaction or the performance of the
services contemplated under the Business Management Agreement. Since January 1,
1993, Vision 21 has not received any notice from any federal, state or other
governmental authority or agency having jurisdiction over its properties or
activities, or any insurance or inspection body, that its operations or any of
its properties, facilities, equipment, or business practices fail to comply with
any applicable law, ordinance, regulation, building or zoning law, or
requirement of any public or quasi-public authority or body, except where
failure to so comply would not, individually or in the aggregate, have a
material adverse effect on the Transaction.

5.12. Insolvency Proceedings. Vision 21 is not currently under the
jurisdiction of a Federal or state court in a Title 11 or similar case within
the meaning of Section 368(a)(3)(A) of the Code.

5.13. Employment of Company's Employees. Vision 21 does not currently
intend to change the existing composition or employment terms of any of the
non-professional personnel which have employment arrangements with the Company
on the effective date of this Agreement (except as is necessary for Vision 21 to
employ such individuals pursuant to the Business Management Agreement). Vision
21 reserves the right, however, to change the number, composition or employment
terms of such non-professional personnel in the future.

6. SECURITIES LAW MATTERS.

6.1. Investment Representations and Covenants of Physician.

b. Except as disclosed on Schedule 6.1(b) attached hereto,
Physician represents and warrants that Physician is an "accredited investor" or
"sophisticated investor" as defined under the Securities Act and state "Blue
Sky" laws, or that Physician has utilized, to the extent necessary to be deemed
a sophisticated investor under the Securities Act and State "Blue Sky" laws, the
assistance of a professional advisor.

c. Physician represents and warrants that the Securities to be
acquired by Physician upon consummation of the transactions described in this
Agreement will be acquired by Physician for Physician's own account, not as a
nominee or agent, and without a view to

-34-

<PAGE> 35

resale or other distribution within the meaning of the Securities Act and the
rules and regulations thereunder, except as contemplated in this Agreement, and
that Physician will not distribute any of the Securities in violation of the
Securities Act. All Securities shall bear a restrictive legend in substantially
the following form:

d. Physician represents and warrants that the address set forth
below Physician's name on Schedule 6.1(d) is Physician's principal residence.

e. Physician (i) acknowledges that the Securities issued to
Physician at the Closing must be held indefinitely by Physician unless
subsequently registered under the Securities Act or an exemption from
registration is available, (ii) is aware that any routine sales of Securities
made pursuant to Rule 144 under the Securities Act may be made only in limited
amounts and in accordance with the terms and conditions of that Rule and that in
such cases where the Rule is not applicable, compliance with some other
registration exemption will be required, (iii) is aware that Rule 144 is not
currently available for use by Physician for resale of any of the Securities to
be acquired by Physician upon consummation of the transactions described in this
Agreement, and (iv) acknowledges and agrees that the transfer of the Securities
shall be further restricted by the "lock-up" provisions contained in the
Registration Rights Agreement in the form of Exhibit 12.1(o), whereby the
Company shall be treated as an "affiliate" of Vision 21 under Rule 144.

f. Physician represents and warrants to Vision 21 that Physician,
either alone or together with the assistance of Physician's own professional
advisor, has such knowledge and experience in financial and business matters
such that Physician is capable of evaluating the merits and risks of Physician's
investment in any of the Securities to be acquired by Physician upon
consummation of the transactions described in this Agreement.

g. Physician confirms that Physician has had the opportunity to
ask questions of and receive answers from Vision 21 concerning the terms and
conditions of Physician's investment in the Securities, and the Physician has
received to Physician's satisfaction, such additional information, in addition
to that set forth herein, about Vision 21's operations and the terms and
conditions of the offering as Physician has requested.

-35-

<PAGE> 36

h. In order to ensure compliance with the provisions of paragraph
(c) hereof, Physician agrees that after the Closing Physician will not sell or
otherwise transfer or dispose of Securities or any interest therein (unless such
shares have been registered under the Securities Act) without first complying
with either of the following conditions, the expenses and costs of satisfaction
of which shall be fully borne and paid for by Physician:

i) Vision 21 shall have received a written legal opinion from
legal counsel, which opinion and counsel shall be satisfactory to Vision 21 in
the exercise of its reasonable judgment, or a copy of a "no-action" or
interpretive letter of the Securities and Exchange Commission specifying the
nature and circumstances of the proposed transfer and indicating that the
proposed transfer will not be in violation of any of the registration provisions
of the Securities Act and the rules and regulations promulgated thereunder; or

Physician also agrees that the certificates or instruments representing the
Securities to be issued to Physician pursuant to this Agreement may contain a
restrictive legend noting the restrictions on transfer described in this Section
and required by federal and applicable state securities laws, and that
appropriate "stop-transfer" instructions will be given to Vision 21's transfer
agent, if any, provided that this Section 6.1(h) shall no longer be applicable
to any Securities following their transfer pursuant to a registration statement
effective under the Securities Act or in compliance with Rule 144 or if the
opinion of counsel referred to above is to the further effect that transfer
restrictions and the legend referred to herein are no longer required in order
to establish compliance with any provisions of the Securities Act.

i. Physician understands that there can be no assurance that a
Public Offering by Vision 21 will ever occur or if it does occur that it will be
successful.

j. Physician agrees that he shall be considered an "affiliate" of
Vision 21 for purposes of Rule 144 and agrees to the restrictions and
limitations imposed by Rule 144 on affiliates. Physician further agrees that he
shall be considered an affiliate of Vision 21 for Rule 144 purposes even if he
does not meet the technical definition of "affiliate" under Rule 144.

6.2. Current Public Information. At all times following the
registration of any of Vision 21's securities under the Securities Act or
Exchange Act pursuant to which Vision 21 becomes subject to the reporting
requirements of the Exchange Act, Vision 21 shall use commercially reasonable
efforts to comply with the requirements of Rule 144 under the Securities Act, as
such Rule may be amended from time to time (or any similar rule or regulation
hereafter adopted by the SEC) regarding the availability of current public
information to the extent required to enable any holder of shares of Common
Stock to sell such shares

-36-

<PAGE> 37

without registration under the Securities Act pursuant to Rule 144 (or any
similar rule or regulation).

7. COVENANTS OF THE COMPANY AND THE PHYSICIAN. The Company and the
Physician, jointly and severally, agree that between the date hereof and the
Closing (with respect to the Company's covenants, the Physician agrees to use
his best efforts to cause the Company to perform):

7.1. Consummation of Agreement. The Company and the Physician shall use
their best efforts to cause the consummation of the transactions contemplated
hereby in accordance with their terms and conditions; provided, however, that
this covenant shall not require the Company or the Physician to make any
expenditures that are not expressly set forth in this Agreement or otherwise
contemplated herein.

7.2. Business Operations. The Company shall operate its business in the
ordinary course. The Company and the Physician shall use all reasonable efforts
to preserve the business of the Company intact. Neither the Company nor the
Physician shall take any action that would, individually or in the aggregate,
result in a Material Adverse Effect.

7.3. Access. The Company and the Physician shall, at reasonable times
during normal business hours and on reasonable notice, permit Vision 21 and its
authorized representatives, including without limitation, the Accountants,
reasonable access to, and make available for inspection, all of the assets and
business of the Company, including its employees, customers and suppliers, and
permit Vision 21 and its authorized representatives to inspect and, at Vision
21's sole cost and expense, make copies of all documents, records (other than
patient medical records) and information with respect to the affairs of the
Company, including, without limitation, the Financial Statements, as Vision 21
and its representatives may request, all for the sole purpose of permitting
Vision 21 to become familiar with the business and assets and liabilities of the
Company; provided, that in conducting such inspection or investigation, neither
Vision 21 nor its agents shall interfere with or disrupt the business activities
of the Company or the Physician.

7.4. Notification of Certain Matters. The Company and the Physician
shall promptly inform Vision 21 in writing of (a) any notice of, or other
communication relating to, a default or event that, with notice or lapse of time
or both, would become a default, received by the Company or the Physician
subsequent to the date of this Agreement and prior to the Closing Date under any
Commitment material to the Company's condition (financial or otherwise),
operations, assets, liabilities or business and to which it is subject; or (b)
any material adverse change in the Company's condition (financial or otherwise),
operations, assets, liabilities or business.

7.5. Approvals of Third Parties. As soon as practicable after the date
hereof, the Company and the Physician shall use all reasonable efforts to secure
all necessary approvals and consents of landlords with respect to the real
property described on Schedule 2.1(d) to the

-37-

<PAGE> 38

consummation of the transactions contemplated hereby and shall use their best
efforts to secure all necessary approvals and consents of other third parties to
the consummation of the transactions contemplated hereby; provided, however,
that this covenant shall not require the Company or the Physician to make any
material expenditures that are not expressly set forth in this Agreement or
otherwise contemplated herein.

7.6. Employee Matters. Except as set forth in Schedule 3.8(a) or as
otherwise contemplated by this Agreement, the Company shall not, without the
prior written approval of Vision 21, except as required by law:

a. increase the cash compensation of the Physician or any other
employees of the Company (other than in the ordinary course of business and
consistent with past practice);

b. adopt, amend or terminate any Compensation Plan;

c. adopt, amend or terminate any Employment Agreement;

d. adopt, amend or terminate any Employee Policies and Procedures;

e. adopt, amend or terminate any Employee Benefit Plan;

f. take any action that could deplete the assets of any Employee
Benefit Plan, other than payment of benefits in the ordinary course to
participants and beneficiaries;

g. fail to pay any premium or contribution due or with respect to
any Employee Benefit Plan;

h. fail to file any return or report with respect to any Employee
Benefit Plan;

i. institute, settle or dismiss any employment litigation except as
could not, individually or in the aggregate, result in a Material Adverse
Effect;

j. enter into, modify, amend or terminate any agreement with any
union, labor organization or collective bargaining unit; or

k. take or fail to take any action with respect to any past or
present employee of the Company that would, individually or in the aggregate,
result in a Material Adverse Effect.

7.7. Contracts. Except with Vision 21's prior written consent, the
Company shall not assume or enter into any contract, lease, license, obligation,
indebtedness, commitment,

-38-

<PAGE> 39

purchase or sale except in the ordinary course of business that is material to
the Company's business, nor will it waive any material right or cancel any
material contract, debt or claim.

7.8. Capital Assets; Payments of Liabilities. The Company shall not,
without the prior written approval of Vision 21 (a) acquire or dispose of any
capital asset having a fair market value of $5,000 or more, or acquire or
dispose of any capital asset outside of the ordinary course of business or (b)
discharge or satisfy any lien or encumbrance or pay or perform any obligation or
liability other than (i) liabilities and obligations reflected in the Financial
Statements or (ii) current liabilities and obligations incurred in the usual and
ordinary course of business since the Company Balance Sheet Date and, in either
case (i) or (ii) above, only as required by the express terms of the agreement
or other instrument pursuant to which the liability or obligation was incurred.

7.9. Mortgages, Liens and Guaranties. The Company shall not, without
the prior written approval of Vision 21, enter into or assume any mortgage,
pledge, conditional sale or other title retention agreement, permit any security
interest, lien, encumbrance or claim of any kind to attach to any of its assets
(other than statutory liens arising in the ordinary course of business and other
liens that do not materially detract from the value or interfere with the use of
such assets), whether now owned or hereafter acquired, or guarantee or otherwise
become contingently liable for any obligation of another, except obligations
arising by reason of endorsement for collection and other similar transactions
in the ordinary course of business, or make any capital contribution or
investment in any person.

7.10. Acquisition Proposals. The Company and the Physician agree that
from the date of this Agreement through the earlier of the Closing Date or
September 30, 1997, (a) neither the Physician nor the Company nor any of its
officers and directors shall, and the Physician and the Company shall direct and
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 Acquisition Proposal or
engage in any negotiations concerning, or provide any confidential information
or data to, or have any discussions with, any person relating to an Acquisition
Proposal, or otherwise facilitate any effort or attempt to make or implement an
Acquisition Proposal; (b) the Physician and the Company will immediately cease
and cause to be terminated any existing activities, discussions or negotiations
with any parties conducted heretofore with respect to any of the foregoing and
each will take the necessary steps to inform the individuals or entities
referred to in the first sentence hereof of the obligations undertaken in this
Section 7.10; and (c) the Physician and the Company will notify Vision 21
immediately if any such inquiries or proposals are received by, any such
information is requested from, or any such negotiations or discussions are
sought to be initiated or continued with, the Company or the Physician.

7.11. Distributions and Repurchases. No distribution, payment or
dividend of any kind will be declared or paid by the Company with respect of its
capital stock, nor will any repurchase of any of the Company's capital stock be
approved or effected.

-39-

<PAGE> 40

7.12. Requirements to Effect the Transaction. The Company and the
Physician shall use their best efforts to take, or cause to be taken, all
actions necessary to effect the Transaction under applicable law.

7.13. Physician Accounts Payable and Physician Retained Equity. The
Company shall, and the Physician shall cause the Company, to pay in a timely
manner the accounts payable of the Physician. Except as contemplated herein, the
Company shall not, and the Physician shall not permit the Company to, make
payment of all or any portion of any retained equity of the Company at any time
prior to Closing.

7.14. Physician Employment Agreements. The Company and the Physician
shall cause, at or immediately prior to Closing, each Physician Employee (except
for those non-shareholder Physician Employees identified on Schedule 7.14) who
is then an employee of the Company and Physician agrees at or immediately prior
to Closing (i) to terminate his employment agreement, if any, with the Company
by mutual consent without any liability therefor on the part of the Company and
(ii) to enter into a new Physician Employment Agreement with the Company in
accordance with the terms of the Business Management Agreement.

7.15. Optometrist Employment Agreements. The Company and the Physician
shall cause, at or immediately prior to Closing, each Optometrist Employee who
is then an employee of the Company (i) to terminate his existing employment
agreement, if any, with the Company by mutual consent without any liability
therefor on the part of the Company and (ii) to enter into a new Optometrist
Employment Agreement with the Company in accordance with the terms of the
Business Management Agreement.

7.16. Termination of Retirement Plans. Prior to Closing, the Physician
shall cause the Company to take all steps necessary to discontinue benefits
accruals under any Employee Benefit Plan that is intended to be a qualified
employee retirement plan under Section 401(a) of the Code (a "Retirement Plan")
effective as of Closing or as soon thereafter as may be practical.

Subsequent to Closing, the Company and Vision 21 shall review the
extent to which the Company can resume contributions to the Retirement Plan
without violating the qualification requirements of Sections 410(b) and
401(a)(4) of the Code, taking into account any employees of Vision 21 who would
be "leased employees" of the Company under Section 414(n) of the Code. If Vision
21 and the Company mutually agree that such qualification requirements can be
satisfied, the Company may elect to continue the Retirement Plan and make
contributions in accordance with its terms, provided that the Company shall
agree to cover at its own expense any Vision 21 employees who are leased
employees if such coverage is required to maintain the tax-qualified status of
the Retirement Plan.

7.17. Delivery of Schedules. The Company and the Physician shall deliver
to Vision 21 all schedules required to be delivered by them prior to the
Closing.

-40-

<PAGE> 41

7.18. Assignment of Fees for Medical and Optometry Services. On or prior
to the Closing Date, the Company shall obtain an irrevocable assignment from all
Professional Employees of any and all of their rights to receive payment for the
provision of ophthalmology or optometry services which are part of the Accounts
Receivable to Vision 21 existing on the Closing Date, except for those fees
specified and set forth on Schedule 7.18. Each Professional Employee shall
undertake to endorse any payments received on account of such services to the
order of Vision 21 and to take such other action as may be necessary to confirm
to Vision 21 the rights to collect and retain for its own account such Accounts
Receivable. The Company shall cause its Professional Employees to agree that
such security interest of such lender(s) is intended to be a first priority
security interest and is superior to any right, title or interest which may be
asserted by such Professional Employees with respect to the Accounts Receivable
or the proceeds thereof. In the event that the assignment of rights described in
this Section shall be deemed, for any reason, to be ineffective as an outright
assignment, the Company shall cause each Professional Employee to agree that
such Professional Employee shall be deemed, effective as of the Closing Date, to
have granted to Vision 21 a first priority lien on and security interest in and
to any and all interests of such Professional Employee in any of the Accounts
Receivable, and all proceeds with respect thereto, to secure the collection by
Vision 21 of all Accounts Receivable, and this Agreement shall be deemed to be a
security agreement to the extent necessary to give effect to the foregoing. The
Company shall cause each Professional Employee to execute and deliver, all such
financing statements as the Company or Vision 21 may request in order to perfect
such security interest. The Company shall not suffer any Professional Employee
to grant any other lien on or security interest in or to such Accounts
Receivable or any proceeds thereof.

8. COVENANTS OF VISION 21. Vision 21 agrees that between the date
hereof and the Closing:

8.1. Consummation of Agreement. Vision 21 shall use its best efforts to
cause the consummation of the transactions contemplated hereby in accordance
with their terms and conditions and take all corporate and other actions
necessary to approve the Transaction; provided, however, that this covenant
shall not require Vision 21 to make any expenditures that are not expressly set
forth in this Agreement or otherwise contemplated herein.

8.2. Notification of Certain Matters. Vision 21 shall promptly inform
the Company and the Physician in writing of (a) any notice of, or other
communication relating to, a default or event that, with notice or lapse of time
or both, would become a default, received by Vision 21 subsequent to the date of
this Agreement and prior to the Closing Date under any Vision 21 Commitment
material to Vision 21's condition (financial or otherwise), operations, assets,
liabilities or business and to which it is subject; or (b) any material adverse
change in Vision 21's condition (financial or otherwise), operations, assets,
liabilities or business.

8.3. Licenses and Permits. Vision 21 shall use its best efforts to
obtain all licenses, permits, approvals or other authorizations required under
any law, statute, rule, regulation or ordinance, or otherwise necessary or
desirable to consummate the Transaction or provide the

-41-

<PAGE> 42

services contemplated by the Business Management Agreement and to conduct the
intended business of Vision 21.

8.4. Release of Physician From Practice Liabilities. Vision 21 shall use
its best efforts to obtain from third party creditors the release of Physician
from any personal liabilities relating to the Practice which are identified on
Schedule 8.4 and assumed by Vision 21 pursuant to the terms of this Agreement.

9. COVENANTS OF VISION 21, THE COMPANY AND THE PHYSICIAN. Vision 21,
the Company and the Physician agree as follows:

9.1. Amendment of Schedules. Each party hereto agrees that, with respect
to the representations and warranties of such party contained in this Agreement,
such party shall have the continuing obligation until the Closing to attach,
supplement or amend promptly the Schedules with respect to any matter that would
have been or would be required to be set forth or described in the Schedules in
order to not materially breach any representation, warranty or covenant of such
party contained herein; provided that no amendment or supplement to a Schedule
that constitutes or reflects a material adverse change to the Company or the
Nonmedical Assets may be made unless Vision 21 consents to such amendment or
supplement, and no amendment or supplement to a Schedule that constitutes or
reflects a material adverse change to Vision 21 may be made unless the Company
and the Physician consent to such amendment or supplement. For all purposes of
this Agreement, including without limitation for purposes of determining whether
the conditions set forth in Sections 10.1 and 11.1 have been fulfilled, the
Schedules hereto shall be deemed to be the Schedules as amended or supplemented
pursuant to this Section 9.1. In the event that the Company is required to amend
or supplement a Schedule in accordance with this Section 9.1 and Vision 21 does
not consent to such amendment or supplement, or Vision 21 is required to amend
or supplement a Schedule in accordance with this Section 9.1 and the Company and
the Physician do not consent, this Agreement shall be deemed terminated by
mutual consent as set forth in Section 15.1(d) or Section 15.1(e) as
appropriate.

9.2. Fees and Expenses.

a. If the Transaction is consummated, Vision 21 shall pay all costs
of the Audit of the Company's Financial Statements and financial records by the
Accountants (or auditors designated by Vision 21's Accountants). All items
prepared by the Accountants in connection with the Audit ("Prepared Audit
Materials") shall be for use solely by Vision 21; provided, however, that the
Company may utilize the Prepared Audit Materials solely in connection with its
review of Vision 21's calculation of the Purchase Price. The Prepared Audit
Materials shall not be deemed to include those items which customarily remain
the property of auditors such as their working papers and memos.

b. In the event the Transaction is not consummated, the Company
shall pay for or reimburse Vision 21 for one-half (1/2) of all expenses of the
Accountants in

-42-

<PAGE> 43

connection with the Audit. The Company and Physician shall not be entitled to
copies or originals of the Prepared Audit Materials until the Company or
Physician pay for or reimburses Vision 21 for one-half (1/2) of the expenses of
the Accountants in connection with the Audit in advance of receiving the
Prepared Audit Materials (either from Vision 21 or its auditor). For purposes of
this Agreement, Audit expenses shall include all expenses related to the Audit
as well as expenses incurred to present the financial statements in accordance
with GAAP and all schedules related thereto.

c. The Company shall submit to a Medicare audit. Vision 21 shall
pay all costs of the Medicare audit of the Company by Vision 21's auditors (or
auditors designated by Vision 21's auditors). All information obtained in
connection with the Medicare audit shall be made available to Vision 21.

d. Each of the Company and Vision 21 shall pay the costs and
expenses of their own legal counsel with respect to legal services rendered in
connection with the preparation and negotiation of this Agreement and the
transactions contemplated hereby.

9.3. Release of Physician From Practice Liabilities. Vision 21 shall
use its best efforts to obtain the release of the Physician from any
liabilities relating to the Practice of which the Physician and the Company are
jointly obligated which are set forth on Schedule 9.3.

10. CONDITIONS PRECEDENT OF VISION 21. Except as may be waived in
writing by Vision 21, the obligations of Vision 21 hereunder are subject to the
fulfillment at or prior to the Closing Date of each of the following conditions
precedent:

10.1. Representations and Warranties. The representations and warranties
of the Company and the Physician contained herein shall have been true and
correct in all material respects when initially made and shall be true and
correct in all material respects as of the Closing Date.

10.2. Covenants. The Company and the Physician shall have performed and
complied in all material respects with all covenants required by this Agreement
to be performed and complied with by the Company or the Physician prior to the
Closing Date.

10.3. Legal Opinion. Counsel to the Company and the Physician shall have
delivered to Vision 21 their opinions, dated as of the Closing Date, in form and
substance substantially similar to Exhibit 10.3 which Vision 21 and its counsel
shall be permitted to rely upon.

10.4. Proceedings. No action, proceeding or order by any court or
governmental body or agency shall have been threatened orally or in writing,
asserted, instituted or entered to restrain or prohibit the carrying out of the
transactions contemplated hereby.

10.5. No Material Adverse Change. No material adverse change in the
condition (financial or otherwise), operations, assets, liabilities or business
of the Company shall have

-43-

<PAGE> 44

occurred since the Company Balance Sheet Date, whether or not such change shall
have been caused by the deliberate act or omission of the Company or the
Physician.

10.6. Government Approvals and Required Consents. The Company, the
Physician and Vision 21 shall have obtained all necessary government and other
third-party approvals and consents (other than consents technically required as
a result of the transactions contemplated hereby under the terms of managed care
contracts to which the Company or any of its employees are a party).

10.7. Certification. Neither the Company nor the Physician shall have
received any notice of or been made a party to any judicial or administrative
proceeding, or threatened to so be made a party, in any action or proceeding
that seeks to deny the continued use or receipt of any necessary permit,
license, authorization, certification or approval under the Medicare and
Medicaid programs to provide ophthalmology or optometry services.

10.8. Closing Deliveries. Vision 21 shall have received all documents
and agreements, duly executed and delivered in form reasonably satisfactory to
Vision 21, referred to in Section 12.1.

10.9. Due Diligence. Vision 21 shall have completed to its satisfaction
a due diligence review of the Company and the Physician.

10.10. Financial Audit. Vision 21 shall have approved in Vision 21's
sole discretion an audit of the Company and the Practice which audit shall have
been performed by an accounting firm designated by Vision 21.

10.11. Medicare Audit. Vision 21 shall have approved in Vision 21's sole
discretion a Medicare audit of the Company and the Practice.

10.12. Exemption Under State Securities Laws. The transfer of Vision
21's Securities to the Physician as contemplated in this Agreement shall qualify
for one or more exemptions from registration under the State's securities laws.
Vision 21 shall pay all filing fees in connection with any filing required to
qualify the transfer of the Securities for such exemption(s).

10.13. Assignment of Professional Employees' Rights in Accounts
Receivable. The Company shall have caused the Professional Employees to assign
any and all of their rights with respect to Accounts Receivable to Vision 21 and
shall cause such Professional Employees to execute such other agreements and
instruments as contemplated in Section 7.18.

11. CONDITIONS PRECEDENT OF THE COMPANY AND THE PHYSICIAN. Except as
may be waived in writing by the Company and the Physician, the obligations of
the Company and the Physician hereunder are subject to fulfillment at or prior
to the Closing Date of each of the following conditions precedent:

-44-

<PAGE> 45

11.1. Representations and Warranties. The representations and warranties
of Vision 21 contained herein shall be true and correct in all respects when
initially made and shall be true and correct in all material respects as of the
Closing Date.

11.2. Covenants. Vision 21 shall have performed and complied in all
material respects with all covenants and conditions required by this Agreement
to be performed and complied with by it prior to the Closing Date.

11.3. Legal Opinions. Counsel to Vision 21 shall have delivered to the
Company and the Physician their opinion, dated as of the Closing Date, in form
and substance substantially similar to Exhibit 11.3.

11.4. Proceedings. No action, proceeding or order by any court or
governmental body or agency shall have been threatened in writing, asserted,
instituted or entered to restrain or prohibit the carrying out of the
transactions contemplated hereby.

11.5. Government Approvals and Required Consents. The Company, the
Physician and Vision 21 shall have obtained all necessary government and other
third-party approvals and consents (other than consents technically required as
a result of the transactions contemplated hereby under the terms of managed care
contracts to which the Company or any of its employees are a party).

11.6. Closing Deliveries. The Company and the Physician shall have
received all documents, instruments and agreements, duly executed and delivered
in form reasonably satisfactory to the Company, referred to in Section 12.2.

11.7. No Change in Voting or Ownership Control. There shall have been no
changes in the voting or ownership control of Vision 21 from the date first
above written to the Closing Date.

11.8. No Material Adverse Change. No material adverse change in the
condition (financial or otherwise), operations, assets, liabilities or business
of Vision 21 shall have occurred since the end of the last fiscal period
reported in the Vision 21 Financial Statements, whether or not such change shall
have been caused by the deliberate act or omission of Vision 21.

12. CLOSING DELIVERIES; ESCROW OF DOCUMENTS.

12.1. Deliveries of the Company and the Physician. At or prior to June
30, 1997, the Company and the Physician shall deliver to Vision 21, c/o
Shumaker, Loop & Kendrick, LLP, counsel to Vision 21, the following, all of
which shall be in a form reasonably satisfactory to Vision 21 and shall be held
by Shumaker, Loop & Kendrick, LLP in escrow pending Closing, pursuant to an
escrow agreement or letter in form and substance mutually acceptable to the
parties hereto:

-45-

<PAGE> 46

a. a copy of resolutions of the Board of Directors of the Company
authorizing (i) the execution, delivery and performance of this Agreement and
all related documents and agreements, and (ii) the consummation of the
Transaction, certified by the Secretary of the Company as being true and correct
copies of the originals thereof subject to no modifications or amendments;

b. a certificate of the President of the Company, and of the
Physician, dated the Closing Date, as to the truth and correctness of the
representations and warranties of the Company and the Physician contained
herein, on and as of the Closing Date;

c. a certificate of the President of the Company, and of the
Physician, dated the Closing Date, (i) as to the performance of and compliance
in all material respects by the Company and the Physician with all covenants
contained herein on and as of the Closing Date and (ii) certifying that all
conditions precedent of the Company and the Physician to the Closing have been
satisfied;

d. a certificate of the Secretary of the Company certifying as to
the incumbency of the directors and officers of the Company and as to the
signatures of such directors and officers who have executed documents delivered
pursuant to the Agreement on behalf of the Company;

e. a certificate, dated within ten (10) days prior to the Closing
Date, of the Secretary of State of the state of incorporation for the Company
establishing that the Company is in existence, has paid all franchise or similar
taxes, if any, and, if applicable, otherwise is in good standing to transact
business in its state of organization;

f. the legal opinion of counsel to the Company and Physicians
dated as of the Closing Date in accordance with Section 10.3;

g. such appropriate documents of transfer, including bills of
sale, endorsements, assignments, drafts, checks or other instruments, as to all
of the Nonmedical Assets, and any other appropriate instruments in such
reasonable or customary form as shall be requested by Vision 21 and its counsel;

h. such instruments satisfactory to Vision 21 that all liens,
claims, pledges, security interests and other encumbrances on all of the
Nonmedical Assets have been released;

i. all authorizations, consents, permits and licenses referenced
in Section 3.5;

j. the executed Business Management Agreement in substantially the
form attached hereto as Exhibit 12.1(k), as revised in accordance with changes
reasonably deemed

-46-

<PAGE> 47

necessary or advisable by legal counsel retained by Vision 21 in the State to
address regulatory and compliance issues;

k. an executed Physician Employment Agreement between the Company
and the Physician in substantially the form attached hereto as Exhibit 12.1(l);

l. an executed Physician Employment Agreement between the Company
and each Physician Employee who is then an employee of the Company in
substantially the form attached hereto as Exhibit 12.1(m);

m. an executed Optometrist Employment Agreement between the
Company and each Optometrist Employee who is then an employee of the Company in
substantially the form attached hereto as Exhibit 12.1(n);

n. an executed Registration Rights Agreement between Vision 21 and
the Company in substantially the form attached hereto as Exhibit 12.1(o) (the
"Registration Rights Agreement");

o. a non-foreign affidavit, as such affidavit is referred to in
Section 1445(b)(2) of the Code, of the Physician, signed under a penalty of
perjury and dated as of the Closing Date, to the effect that the Physician is a
United States citizen or a resident alien (and thus not a foreign person) and
providing the Physician's United States taxpayer identification number;

p. executed Lease Agreements between Vision 21 and the Company in
substantially the form attached hereto as Exhibit 12.1(q) for the lease of the
buildings and improvements located at 220 S. 63rd Street, Mesa, Arizona and 636
W. Southern Avenue, Mesa, Arizona (the "Lease Agreements");

q. an assignment to and assumption by Vision 21 of each lease for
real property described on Schedule 2.1(d) (the "Lease Assignments"), or if
desired by Vision 21, a new lease or leases between the landlords under such
leases and Vision 21 in form and substance reasonably satisfactory to Vision 21;
and

r. such other instrument or instruments of transfer prepared by
Vision 21 as shall be necessary or appropriate, as Vision 21 or its counsel
shall reasonably request, to carry out and effect the purpose and intent of this
Agreement.

12.2. Deliveries of Vision 21. At or prior to June 30, 1997, Vision 21
shall deliver to the Company and the Physician, c/o Shumaker, Loop & Kendrick,
LLP, counsel to Vision 21, the following, all of which shall be in a form
reasonably satisfactory to the Company and the Physician and shall be held by
Shumaker, Loop & Kendrick, LLP in escrow pending Closing, pursuant to an escrow
agreement or letter in form and substance mutually acceptable to the parties
hereto:

-47-

<PAGE> 48

a. a copy of the resolutions of the Board of Directors of Vision
21 authorizing (i) the execution, delivery and performance of this Agreement,
and all related documents and agreements, and (ii) the consummation of the
Transaction, certified by Vision 21's Secretary as being true and correct copies
of the originals thereof subject to no modifications or amendments;

b. a certificate of an officer of Vision 21 dated the Closing Date
as to the truth and correctness of the representations and warranties of Vision
21 contained herein, on and as of the Closing Date;

c. a certificate of an officer of Vision 21 dated the Closing
Date, (i) as to the performance and compliance of Vision 21 with all covenants
contained herein on and as of the Closing Date and (ii) certifying that all
conditions precedent of Vision 21 to the Closing have been satisfied;

d. a certificate, dated within ten (10) days prior to the Closing
Date, of the Secretary of State of the State of Florida establishing that Vision
21 is in existence, has paid all franchise or similar taxes, if any, and, if
applicable, otherwise is in good standing to transact business in such state;

e. certificates (or photocopies thereof), dated within ten (10)
days prior to the Closing Date, of the Secretary of State of each state in which
Vision 21 is qualified to do business, to the effect that Vision 21 is qualified
to do business and, if applicable, is in good standing as a foreign corporation
in each of such states;

f. an opinion of Shumaker, Loop & Kendrick, LLP, counsel to Vision
21, dated as of the Closing Date, pursuant to Section 11.3;

g. the executed Registration Rights Agreement;

h. the executed Lease Agreements;

i. the executed Lease Assignments;

j. appropriate assumption agreements evidencing the assumption by
Vision 21 of the Assumed Obligations; and

k. such other instrument or instruments of transfer, prepared by
the Company or the Physician as shall be necessary or appropriate, as the
Company, the Physician or their counsel shall reasonable request, to carry out
and effect the purpose and intent of this Agreement.

-48-

<PAGE> 49

12.3. Release of Escrow Materials. Shumaker, Loop & Kendrick, LLP shall
release the agreements, certificates, instruments, documents and other materials
described in Sections 12.1 and 12.2 to the appropriate parties to effectuate the
transactions contemplated in this Agreement only after all such materials have
been delivered by all applicable parties (or the parties receiving such
documents have waived in writing such delivery requirement), the parties have
completed their due diligence, the Audit and the Medicare audit have been
completed, and each of Vision 21 and the Company shall have sent written notice
to Shumaker, Loop & Kendrick, LLP stating that the conditions to release of the
escrowed documents have been satisfied. In the event that the conditions to the
release of the escrowed documents are not satisfied, and each of Vision 21 and
the Company informs Shumaker, Loop & Kendrick, LLP in writing that such
conditions have not been satisfied, Shumaker, Loop & Kendrick, LLP shall
promptly return the foregoing materials to the parties sending such materials.

13. POST CLOSING MATTERS.

13.1. Further Instruments of Transfer. From and after the Closing Date,
at the request of Vision 21 and at Vision 21's sole cost and expense, the
Physician and the Company shall deliver any further instruments of transfer and
take all reasonable action as may be necessary or appropriate to carry out the
purpose and intent of this Agreement.

13.2. Practice Advisory Council; Local Advisory Council; National
Appeals Council. Vision 21 and the Company shall establish a practice advisory
council composed of delegates from Vision 21 and the Company which shall advise
Vision 21 and the Company and determine certain issues as more fully described
in the Business Management Agreement. Vision 21 shall also establish a local
advisory council composed of delegates from certain practice groups acquired by
Vision 21 in connection with the Recent Acquisitions and from the Company. Such
delegates shall be appointed from practice groups which are located in a market
area identified by Vision 21 and in which the Company is located. The local
advisory council board shall advise Vision 21 and the practice groups within the
market area as to policy and strategy issues and shall determine certain types
of issues and disputes between Vision 21 and such practice groups which issues
and disputes are identified in the Business Management Agreement and other
management agreements entered into between Vision 21 and practice groups. The
Company shall have the right to appoint one (1) member to a local advisory
council who shall serve an initial two (2) year term. After the initial two-year
term, election of members to the local advisory council shall be in accordance
with by-laws which shall be adopted and amended by the local advisory council.
Vision 21 shall also establish a national appeals council which shall have,
among other duties and responsibilities, the power to adopt and amend its
by-laws, to review and approve as limited herein certain decisions of the local
advisory councils, and to resolve deadlocks among the members of such local
advisory councils.

14. REMEDIES.

14.1. Indemnification by the Company and Physician. Subject to the terms
and conditions of this Agreement, the Company and the Physician, jointly and
severally, agree to

-49-

<PAGE> 50

indemnify, defend and hold Vision 21 and its directors, officers, employees and
agents harmless from and against all losses, claims, obligations, demands,
assessments, penalties, liabilities, costs, damages, reasonable attorneys' fees
and expenses (collectively, "Damages") asserted against or incurred by such
entities and individuals (including, but not limited to, any reduction in
payments to or revenues of the Company) arising out of or resulting from:

a. a breach of any representation, warranty or covenant of the
Company or the Physician contained herein or in any schedule or certificate
delivered hereunder;

b. any liability under the Securities Act, the Exchange Act or any
other federal or state "Blue Sky" or securities law or regulation, at common law
or otherwise, (i) arising out of or based upon any untrue statement or alleged
untrue statement of a material fact relating to the Physician or the Company
(including its subsidiaries, if any), and provided to Vision 21 or its counsel
by the Company or the Physician, specifically for inclusion in a Registration
Statement or any prospectus forming a part thereof, or any amendment thereof or
supplement thereto, (ii) arising out of or based upon any omission or alleged
omission to state therein a material fact relating to the Physician or the
Company (including its subsidiaries, if any) required to be stated therein or
necessary to make the statements therein not misleading, and not provided to
Vision 21 or its counsel by the Company or the Physician, provided, however,
that such indemnity shall not inure to the benefit of Vision 21 to the extent
that such untrue statement (or alleged untrue statement) was made in, or
omission (or alleged omission) occurred in, any preliminary prospectus, and such
information was not so included by Vision 21 and properly delivered to
shareholders of Vision 21 who acquire Vision 21 Common Stock in any Public
Offering;

c. any filings, reports or disclosures made pursuant to the IRS
Voluntary Compliance Resolution Program, if applicable; and

d. any liability arising from any alleged unlawful sale or offer
to sell or transfer any of the Common Stock by Physician.

14.2. Indemnification by Vision 21. Subject to the terms and conditions
of this Agreement, Vision 21 hereby agrees to indemnify, defend and hold the
Company and the Physician harmless from and against all damages asserted against
or incurred by it or him arising out of or resulting from:

a. a breach by Vision 21 of any representation, warranty or
covenant of Vision 21 contained therein or in any schedule or certificate
delivered hereunder;

-50-

<PAGE> 51

upon any omission or alleged omission to state therein a material fact relating
to Vision 21 (including its subsidiaries), required to be stated therein or
necessary to make the statements therein not misleading; and

c. any filings, reports or disclosures made pursuant to the IRS
Voluntary Compliance Resolution Program, if applicable.

Notwithstanding anything in this Section 14.2, Vision 21 shall not be
liable for any Damages resulting from any matter not disclosed to Vision 21 by
any of the third parties to be acquired by Vision 21 in connection with the
Recent Acquisitions.

14.3. Conditions of Indemnification. All claims for indemnification
under this Agreement shall be asserted and resolved as follows:

a. A party claiming indemnification under this Agreement (an
"Indemnified Party") shall promptly (and, in any event, at least ten (10) days
prior to the due date for any responsive pleadings, filings or other documents)
(i) notify the party from whom indemnification is sought (the "Indemnifying
Party") of any third-party claim or claims asserted against the Indemnified
Party ("Third Party Claim") that could give rise to a right of indemnification
under this Agreement and (ii) transmit to the Indemnifying Party a written
notice ("Claim Notice") describing in reasonable detail the nature of the Third
Party Claim, a copy of all papers served with respect to such claim (if any), an
estimate of the amount of damages attributable to the Third Party Claim and the
basis of the Indemnified Party's request for indemnification under this
Agreement. Except as set forth in Section 14.6, the failure to promptly deliver
a Claim Notice shall not relieve the Indemnifying Party of its obligations to
the Indemnified Party with respect to the related Third Party Claim except to
the extent that the resulting delay is materially prejudicial to the defense of
such claim. Within thirty (30) days after receipt of any Claim Notice (the
"Election Period"), the Indemnifying Party shall notify the Indemnified Party
(i) whether the Indemnifying Party disputes its potential liability to the
Indemnified Party under this Article 14 with respect to such Third Party Claim
and (ii) whether the Indemnifying Party desires, at the sole cost and expense of
the Indemnifying Party, to defend the Indemnified Party against such Third Party
Claim.

b. If the Indemnifying Party notifies the Indemnified Party within
the Election Period that the Indemnifying Party elects to assume the defense of
the Third Party Claim, then the Indemnifying Party shall have the right to
defend, at its sole cost and expense, such Third Party Claim by all appropriate
proceedings, which proceedings shall be prosecuted diligently by the
Indemnifying Party to a final conclusion or settled at the discretion of the
Indemnifying Party in accordance with this Section 14.3(b). The Indemnifying
Party shall have full control of such defense and proceedings, including any
compromise or settlement thereof. The Indemnified Party is hereby authorized, at
the sole cost and expense of the Indemnifying Party (but only if the Indemnified
Party is entitled to indemnification hereunder), to file, during the Election
Period, any motion, answer or other pleadings that the Indemnified Party shall
deem necessary or appropriate to protect its interests or those of the
Indemnifying Party and not

-51-

<PAGE> 52

prejudicial to the Indemnifying Party (it being understood and agreed that if an
Indemnified Party takes any such action that is prejudicial and causes a final
adjudication that is adverse to the Indemnifying Party, the Indemnifying Party
shall be relieved of its obligations hereunder with respect to such Third Party
Claim). If requested by the Indemnifying Party, the Indemnified Party agrees, at
the sole cost and expense of the Indemnifying Party, to cooperate with the
Indemnifying Party and its counsel in contesting any Third Party Claim that the
Indemnifying Party elects to contest, including, without limitation, the making
of any related counterclaim against the person asserting the Third Party Claim
or any cross-complaint against any person. The Indemnified Party may participate
in, but not control, any defense or settlement of any Third Party Claim
controlled by the Indemnifying Party pursuant to Section 14.3(b) and shall bear
its own costs and expenses with respect to such participation; provided,
however, that if the named parties to any such action (including any impleaded
parties) include both the Indemnifying Party and the Indemnified Party, and the
Indemnified Party has been advised by counsel that there may be one or more
legal defenses available to it that are different from or additional to those
available to the Indemnifying Party, then the Indemnified Party may employ
separate counsel at the expense of the Indemnifying Party, and upon written
notification thereof, the Indemnifying Party shall not have the right to assume
the defense of such action on behalf of the Indemnified Party; provided further
that the Indemnifying Party shall not, in connection with any one such action or
separate but substantially similar or related actions in the same jurisdiction
arising out of the same general allegations or circumstances, be liable for the
reasonable fees and expenses of more than one separate firm of attorneys at any
time for the Indemnified Party, which firm shall be designated in writing by the
Indemnified Party.

c. If the Indemnifying Party fails to notify the Indemnified Party
within the Election Period that the Indemnifying Party elects to defend the
Indemnified Party pursuant to Section 14.3(b), or if the Indemnifying Party
elects to defend the Indemnified Party pursuant to Section 14.3(b) but fails
diligently and promptly to prosecute or settle the Third Party Claim, then the
Indemnified Party shall have the right to defend, at the sole cost and expense
of the Indemnifying Party (if the Indemnified Party is entitled to
indemnification hereunder), the Third Party Claim by all appropriate
proceedings, which proceedings shall be promptly and vigorously prosecuted by
the Indemnified Party to a final conclusion or settled. The Indemnified Party
shall have full control of such defense and proceedings, provided, however, that
the Indemnified Party may not enter into, without the Indemnifying Party's
consent, which shall not be unreasonably withheld, any compromise or settlement
of such Third Party Claim. Notwithstanding the foregoing, if the Indemnifying
Party has delivered a written notice to the Indemnified Party to the effect that
the Indemnifying Party disputes its potential liability to the Indemnified Party
under this Article 14 and if such dispute is resolved in favor of the
Indemnifying Party, the Indemnifying Party shall not be required to bear the
costs and expenses of the Indemnifying Party's defense pursuant to this Section
or of the Indemnifying Party's participation therein at the Indemnified Party's
request, and the Indemnified Party shall reimburse the Indemnifying Party in
full for all costs and expenses of such litigation. The Indemnifying Party may
participate in, but not control any defense or settlement controlled by the
Indemnified Party pursuant to this Section 14.3(c), and the Indemnifying Party
shall bear its own costs and

-52-

<PAGE> 53

expenses with respect to such participation; provided, however, that if the
named parties to any such action (including any impleaded parties) include both
the Indemnifying Party and the Indemnified Party, and the Indemnifying Party has
been advised by counsel that there may be one or more legal defenses available
to the Indemnified Party, then the Indemnifying Party may employ separate
counsel and upon written notification thereof, the Indemnified Party shall not
have the right to assume the defense of such action on behalf of the
Indemnifying Party.

d. In the event any Indemnified Party should have a claim against
any Indemnifying Party hereunder that does not involve a Third Party Claim, the
Indemnified Party shall transmit to the Indemnifying Party a written notice (the
"Indemnity Notice") describing in reasonable detail the nature of the claim, an
estimate of the amount of damages attributable to such claim and the basis of
the Indemnified Party's request for indemnification under this Agreement. If the
Indemnifying Party does not notify the Indemnified Party within sixty (60) days
from its receipt of the Indemnity Notice that the Indemnifying Party disputes
such claim, the claim specified by the Indemnified Party in the Indemnity Notice
shall be deemed a liability of the Indemnifying Party hereunder. If the
Indemnifying Party has timely disputed such claim, as provided above, such
dispute shall be resolved by mediation or arbitration as provided in Section
18.1 if the parties do not reach a settlement of such dispute within thirty (30)
days after notice of a dispute is given.

e. Payments of all amounts owing by an Indemnifying Party pursuant
to this Article 14 relating to a Third Party Claim shall be made within thirty
(30) days after the latest of (i) the settlement of such Third Party Claim, (ii)
the expiration of the period for appeal of a final adjudication of such Third
Party Claim or (iii) the expiration of the period for appeal of a final
adjudication of the Indemnifying Party's liability to the Indemnified Party
under this Agreement. Payments of all amounts owing by an Indemnifying Party
pursuant to Section 14.3(d) shall be made within thirty (30) days after the
later of (i) the expiration of the sixty (60) day Indemnity Notice period or
(ii) the expiration of the period for appeal, if any, of a final adjudication or
arbitration of the Indemnifying Party's liability to the Indemnified Party under
this Agreement.

14.4. Remedies Not Exclusive. The remedies provided in this Agreement
shall not be exclusive of any other rights or remedies available to one party
against the other, either at law or in equity. This Article 14 regarding
indemnification shall survive Closing.

14.5. Costs, Expenses and Legal Fees. Each party hereto agrees to pay
the costs and expenses (including attorneys' fees and expenses) incurred by the
other parties in successfully (a) enforcing any of the terms of this Agreement,
or (b) proving that another party breached any of the terms of this Agreement.

-53-

<PAGE> 54

representations and warranties contained in Sections 3.1, 3.2., 3.3, 3.11, 3.14,
4.3, 4.5, 4.7, 5.1, 5.2, 5.3, 5.4 and 6.1 may be made at any time, and a claim
for indemnification for a breach of the representations and warranties contained
in Sections 3.9, 3.15, 3.17, 3.18, 3.24, 3.25, 3.26, 3.27, 3.28, 3.30, 4.1, 4.4,
4.6, 5.6 and 5.7 may be made at any time within the applicable statute of
limitations; (b) indemnification based upon Sections 14.1(b) through (d) and
14.2(b) may be made at any time within the applicable statute of limitations;
and (c) the Physician shall not be required to indemnify Vision 21 pursuant to
Section 16.1 unless, and to the extent that, the aggregate amount of Damages
incurred by Vision 21 shall exceed an amount equal to two percent (2%) of the
total Purchase Price; and (c) the Physician shall not be required to indemnify
Vision 21 with respect to a breach of a representation, warranty or covenant for
Damages in excess of the aggregate Purchase Price received by the Physician
(other than pursuant to a requirement to indemnify Vision 21 under Sections 3.27
or 3.28, or unless the breach involves an intentional breach or fraud by the
Physician or the Company which shall be unlimited).

14.7. Tax Benefits; Insurance Proceeds. The total amount of any
indemnity payments owed by one party to another party to this Agreement shall be
reduced by any correlative tax benefit received by the party to be indemnified
or the net proceeds received by the party to be indemnified with respect to
recovery from third parties or insurance proceeds and such correlative insurance
benefit shall be net of the insurance premium, if any, that becomes due as a
result of such claim.

14.8. Payment of Indemnification Obligation. In the event that the
Physician has an indemnification obligation to Vision 21 hereunder, subject to
Vision 21's approval as set forth below, the Physician may satisfy such
obligation by transferring to Vision 21 such number of shares of Vision 21
Common Stock owned by the Physician having an aggregate fair market value (which
is prior to an initial Public Offering based upon the valuation given at Closing
hereof or after any Public Offering the fair market value at such time based on
the last reported sale price of Vision 21 Common Stock on a principal national
securities exchange or other exchange on which the Vision 21 Common Stock is
then listed or the last quoted ask price on any over-the-counter market through
which the Vision 21 Common Stock is then quoted on the last trading day
immediately preceding the day on which the Physician transfers shares of Vision
21 Common Stock to Vision 21 hereunder) equal to the indemnification obligation,
provided that each of the following conditions are satisfied:

a. The Physician shall transfer to Vision 21 good, valid and
marketable title to the shares of Vision 21 Common Stock, free and clear of all
adverse claims, security interests, liens, claims, proxies, options,
stockholders' agreements and encumbrances;

b. The Physician shall make such representation and warranties as
to title to the stock, absences of security interests, liens, claims, proxies,
stockholders' agreements and other encumbrances and other matters as reasonably
requested by Vision 21; and

-54-

<PAGE> 55

c. The other terms and conditions of any transaction contemplated
pursuant to this Section and the effects thereof, including any legal or tax
consequences, shall be reasonably satisfactory to Vision 21.

15. TERMINATION.

15.1. Termination. This Agreement may be terminated and the Transaction
may be abandoned:

a. at any time prior to the Closing Date by mutual agreement of
all parties;

c. at any time prior to the Closing Date by the Company if any
representation or warranty of Vision 21 contained in this Agreement is or
becomes untrue in any material respect or if Vision 21 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 or written notice thereof;

d. at any time prior to the Closing Date by the Company in the
event of the failure of any of the conditions precedent set forth in Article 13
of this Agreement;

e. at any time prior to the Closing Date by Vision 21 in the event
of the failure of any of the conditions precedent set forth in Article 12 of
this Agreement;

f. by Vision 21 if at any time prior to the Closing Date, Vision
21 deems termination to be advisable, provided, however, that if Vision 21
exercises its right to terminate this Agreement under this subsection, Vision 21
shall reimburse the Company and the Physician for all reasonable attorneys' and
accountants' fees incurred by the Company and the Physician in connection with
this Agreement; provided that Vision 21 shall only reimburse the Company and the
Physician up to an aggregate maximum amount of One Hundred Thousand and No/100
Dollars ($100,000.00) for such fees; or

g. by Vision 21 or the Company if the Transaction shall not have
been consummated by September 30, 1997.

-55-

<PAGE> 56

15.2. Effect of Termination. In the event this Agreement is terminated
pursuant to Section 15.1, Vision 21, the Company and the Physician, shall each
be entitled to pursue, exercise and enforce any and all remedies, rights, powers
and privileges available at law or in equity, subject to the limitations set
forth in Section 15.1. In the event of a termination of this Agreement under the
provisions of this Article 15, a party not then in material breach of this
Agreement shall stand fully released and discharged of any and all obligations
under this Agreement.

16. PHYSICIAN EMPLOYMENT AGREEMENT.

16.1. Physician Employment Agreement. The parties acknowledge that in
accordance with the terms of this Agreement, Physician, as employee, and the
Company, as employer, have entered into the Physician Employment Agreement and
that Vision 21 is entitled to enforce such Physician Employment Agreement as an
intended third party beneficiary. Physician and Vision 21 acknowledge that
Vision 21 would suffer severe harm in the event of Physician's resignation prior
to the expiration of the five (5) year term of such Physician Employment
Agreement (without first obtaining the written consent of Vision 21) or a breach
or default of Physician's obligations under such Physician Employment Agreement,
and Physician, the Company and Vision 21 agree that Vision 21 shall be entitled
to recover from Physician any and all damages incurred by Vision 21 caused by
such resignation, breach or default. Notwithstanding the foregoing, Vision 21
shall not be entitled to recover its damages caused by such resignation, breach
or default if such resignation, breach or default was caused by: (i) the death
or disability of Physician, (ii) circumstances not caused by an act or omission
of Physician and which circumstances are beyond his control, or (iii) loss of
Physician's license to practice as an ophthalmologist, unless such loss of
license is due to an act or omission of Physician. Notwithstanding the
foregoing, Physician shall have no obligation to pay the damages contemplated in
this Section 16.1 if (a) the Business Management Agreement has been terminated
pursuant to a material breach by Vision 21, or (b) Physician cures any such
breach or default of the Physician Employment Agreement within a period of
thirty (30) days after notice from Vision 21 of such breach or default.

16.2. Survival. The parties acknowledge and agree that this Article 16
shall survive the Closing of the transactions contemplated herein.

17. NON-COMPETITION AND CONFIDENTIALITY COVENANTS.

17.1. Physician and Company Non-Competition Covenant.

a. The Physician and the Company recognize that the covenants of
the Physician and the Company contained in this Section 17.1 are an essential
part of this Agreement and that, but for the agreement of the Physician and the
Company to comply with such covenants, Vision 21 would not have entered into
this Agreement. The Physician and the Company acknowledge and agree that the
Physician's and the Company's covenants not to compete are necessary to ensure
the continuation of the Management Business (as defined below)

-56-

<PAGE> 57

and are necessary to protect the reputation of Vision 21, and that irreparable
and irrevocable harm and damage will be done to Vision 21 if the Physician or
the Company compete with the Management Business or Vision 21. The Physician and
the Company accordingly agree that for the periods set forth in the Business
Management Agreement the Physician and the Company shall not:

i) directly or indirectly, either as principal, agent,
independent contractor, consultant, director, officer, employee, employer,
advisor, stockholder, partner or in any other individual or representative
capacity whatsoever, either for the Physician's or the Company's own benefit or
for the benefit of any other person or entity knowingly (A) hire, attempt to
hire, contact or solicit with respect to hiring any employee of Vision 21 (or of
any of its direct or indirect subsidiaries) or (B) induce or otherwise counsel,
advise or encourage any employee of Vision 21 (or of any of its direct or
indirect subsidiaries) to leave the employment of Vision 21;

ii) act or serve, directly or indirectly, as a principal,
agent, independent contractor, consultant, director, officer, employee, employer
or advisor or in any other position or capacity with or for, or acquire a direct
or indirect ownership interest in or otherwise conduct (whether as stockholder,
partner, investor, joint venturer, or as owner of any other type of interest),
any Competing Management Business as such term is defined herein; provided,
however, that this clause (ii) shall not prohibit the Physician or the Company
from being the owner of up to 1% of any class of outstanding securities of any
company or entity if such class of securities is publicly traded; or

iii) directly or indirectly, either as principal, agent,
independent, contractor, consultant, director, officer, employee, employer,
advisor, stockholder, partner or in any other individual or representative
capacity whatsoever, either for the Physician's or the Company's own benefit or
for the benefit of any other person or entity, call upon or solicit any
customers or clients of the Management Business; provided however, that the
Physician may send out a general notice to the customers or clients of the
Management Business announcing the termination of his arrangement with Vision 21
and may advertise in a general manner without violating this covenant. The
parties hereto acknowledge and agree that for purposes of this Section, patients
which have in the past received medical or optometric care from the Company
and/or shall in the future receive medical or optometric care from the Company
are not deemed to be customers or clients of the Management Business.

b. For the purposes of this Section 17.1, the following terms
shall have the meaning set forth below:

i) "Management Business" shall mean management and
administration of the non-medical aspects of medical, ophthalmology and
optometry practices.

ii) "Competing Management Business" shall mean an individual,
business, corporation, association, firm, undertaking, company, partnership,
joint venture,

-57-

<PAGE> 58

organization or other entity that either (A) conducts a business substantially
similar to the Management Business within the State, or (B) provides or sells a
service which is the same or substantially similar to, or otherwise competitive
with the services provided by the Management Business within the State;
provided, however, that "Competing Management Business" shall not include Vision
21, or the Physician's internal management and administration of the Physician's
or the Company's medical practice or participation in the management and
administration of a physician group in which the Physician or the Company devote
a significant amount of time to the practice of medicine.

c. Should any portion of this Section 17.1 be deemed unenforceable
because of the scope, duration or territory encompassed by the undertakings of
the Physician or the Company hereunder, and only in such event, then the
Physician, the Company and Vision 21 consent and agree to such limitation on
scope, duration or territory as may be finally adjudicated as enforceable by a
court of competent jurisdiction after the exhaustion of all appeals.

d. This covenant shall be construed as an agreement ancillary to
the other provisions of this Agreement, and the existence of any claim or cause
of action of the Physician or the Company against Vision 21, whether predicated
on this Agreement or otherwise, shall not constitute a defense to the
enforcement by Vision 21 of this covenant; provided, however, that the Physician
and the Company shall not be bound by this covenant and shall not be obligated
to pay the liquidated damages contemplated in this Section 17.1 if at the time
of a breach of this covenant the Business Management Agreement has already been
terminated pursuant to Section 6.2(a) or 6.2(d) thereof. Without limiting other
possible remedies to Vision 21 for breach of this covenant, the Physician and
the Company agree that injunctive or other equitable relief will be available to
enforce the covenants of this provision, such relief to be without the necessity
of posting a bond, cash or otherwise. The Physician, the Company and Vision 21
further expressly acknowledge that the damages that would result from a
violation of this non-competition covenant would be impossible to predict with
any degree of certainty, and agree that liquidated damages in the aggregate
amount of the aggregate consideration received by the Physician pursuant to this
Agreement is reasonable in light of the severe harm to the Management Business
and Vision 21 which would result in the event that a violation of this
non-competition covenant were to occur. For purposes of calculation of the
liquidated damages contemplated in this Section and for purposes of calculation
of the liquidated damages contemplated in the Business Management Agreement and
the Physician Employment Agreement between the Physician and the Company, the
aggregate consideration received by Physician and the Company pursuant to this
Agreement shall be in those amounts and in such form as set forth in Schedule
17.1. If the Physician violates this non-competition covenant, Vision 21 shall,
in addition to all other rights and remedies available at law or equity, be
entitled to (a) cancel the number of shares of Common Stock held by the
Physician or the Company or, with respect to shares of Common Stock entitled to
be received by the Physician or the Company, terminate its obligation to deliver
such number of shares of Common Stock, and (b) repayment by Physician to Vision
21 of the fair market value as described above, of Vision 21 Common Stock sold
by Physician; but in no event shall Vision 21 be entitled to offset amounts in
excess of the liquidated damages sum pursuant to this Section 17.1. The
Physician and the Company agree

-58-

<PAGE> 59

to deliver to Vision 21 the certificates representing any such shares canceled
by Vision 21. Payment and satisfaction by Physician shall be made within sixty
(60) days of notification to Physician by Vision 21 that Physician has violated
this non-competition covenant.

e. Notwithstanding anything contained herein, this Section 17.1
shall not be construed to (i) limit the freedom of any patient of the Physician
or the Company to choose the facility or physician from whom such patient shall
receive health-care services or (ii) limit or interfere with the Physician's
ability to exercise his professional medical judgment in treating his patients
or his ability to provide medical services to his patients.

17.2. Physician and Company Confidentiality Covenant. From the date
hereof, the Physician and the Company shall not, directly or indirectly, use for
any purpose, other than in connection with the performance of the Physician's
duties under the Physician Employment Agreement with the Company, or disclose to
any third party, any information of Vision 21 or the Company, as appropriate
(whether written or oral), including any business management or economic
studies, patient lists, proprietary forms, proprietary business or management
methods, marketing data, fee schedules, or trade secrets of Vision 21 or of the
Company, as applicable, and including the terms and provisions of this Agreement
and any transaction or document executed by the parties pursuant to this
Agreement. Notwithstanding the foregoing, the Physician and the Company may
disclose information that the Physician or the Company can establish (a) is or
becomes generally available to and known by the public or medical community
(other than as a result of an unpermitted disclosure directly or indirectly by
the Physician or the Company or their respective Affiliates, advisors, or
representatives); (b) is or becomes available to the Physician or the Company on
a nonconfidential basis from a source other than Vision 21 or its Affiliates,
advisors or representatives, provided that such source is not and was not bound
by a confidentiality agreement with or other obligation of secrecy to Vision 21
or its Affiliates, advisors or representatives of which the Physician or the
Company has knowledge; or (c) has already been or is hereafter independently
acquired or developed by the Physician or the Company without violating any
confidentiality agreement with or other obligation of secrecy to Vision 21, the
Company or their respective Affiliates, advisors or representatives. Without
limiting the other possible remedies to Vision 21 for the breach of this
covenant, the Physician and the Company agree that injunctive or other equitable
relief shall be available to enforce this covenant, such relief to be without
the necessity of posting a bond, cash or otherwise. The Physician and the
Company further agree that if any restriction contained in this Section 17.2 is
held by any court to be unenforceable or unreasonable, a lesser restriction
shall be enforced in its place and the remaining restrictions contained herein
shall be enforced independently of each other.

17.3. Survival. The parties acknowledge and agree that this Article
17 shall survive the Closing of the transactions contemplated herein.

-59-

<PAGE> 60

18. DISPUTES.

18.1. Mediation and Arbitration. Any dispute, controversy or claim
(excluding claims arising out of an alleged breach of Article 17 of this
Agreement) arising out of this Agreement, or the breach thereof, that cannot be
settled through negotiation shall be settled (a) first, by the parties trying in
good faith to settle the dispute by mediation under the Commercial Mediation
Rules of the AAA (such mediation session to be held in Tampa, Florida, if the
amount in dispute is equal to or in excess of $200,000 or if the dispute is
solely of a non-monetary nature, and in Mesa, Arizona if the amount in dispute
is lower than $200,000, and in either case to commence within 15 days of the
appointment of the mediator by the AAA), and (b) if the controversy, claim or
dispute cannot be settled by mediation, then by arbitration administered by the
AAA under its Commercial Arbitration Rules (such arbitration to be held in
Tampa, Florida, if the amount in dispute is equal to or in excess of $200,000 or
if the dispute is solely of a non-monetary nature, and in Mesa, Arizona if the
amount in dispute is lower than $200,000, and in either case before a single
arbitrator and to commence within 15 days of the appointment of the arbitrator
by the AAA), and judgment on the award rendered by the arbitrator may be entered
in any court having jurisdiction thereof.

19. MISCELLANEOUS

19.1. Taxes. Physician and the Company shall pay all transfer taxes,
sales and other taxes and charges, imposed by the State, if any, which may
become payable in connection with the transactions and documents contemplated
hereunder (excluding any of such taxes which may be attributable to services to
be provided by Vision 21 under the Business Management Agreement). Vision 21
shall pay all transfer taxes, sales and other taxes and charges imposed by the
State of Florida, if any, which may become payable in connection with the
transactions and documents contemplated hereunder (excluding any of such taxes
which may be attributable to services to be provided by Vision 21 under the
Business Management Agreement).

19.2. Remedies Not Exclusive. No remedy conferred by any of the
specific provisions of this Agreement or any document contemplated by this
Agreement is intended to be exclusive of any other remedy, and each and every
remedy shall be cumulative and shall be in addition to every other remedy given
hereunder or now or hereafter existing at law or in equity or by statute or
otherwise. The election of any one or more remedies by any party hereto shall
not constitute a waiver of the right to pursue other available remedies.

19.3. Parties Bound. Except to the extent otherwise expressly
provided herein, this Agreement shall be binding upon and inure to the benefit
of the parties hereto and their respective heirs, representatives,
administrators, guardians, successors and assigns; and no other person shall
have any right, benefit or obligation hereunder.

19.4. Notices. All notices, reports, records or other communications
that are required or permitted to be given to the parties under this Agreement
shall be sufficient in all respects if given in writing and delivered in person,
by telecopy, by overnight courier or by registered

-60-

<PAGE> 61

or certified mail, postage prepaid, return receipt requested, to the receiving
party at the following address:

If to Vision 21 addressed to:

Vision Twenty-One, Inc.
7209 Bryan Dairy Road
Largo, Florida 34777
Attn: Richard T. Welch, Chief Financial Officer

With copies to:

Shumaker, Loop & Kendrick
Post Office Box 172609
101 E. Kennedy Boulevard, Suite 2800
Tampa, Florida 33672-0609
Facsimile No. (813) 229-1660
Attn: Darrell C. Smith, Esquire

If to the Company and the Physician addressed to:

Swagel-Wootton Eye Center, Ltd.
220 South 63rd Street
Mesa, Arizona 85206
Attn: Lorin M. Swagel, M.D.

With copies to:

Thomas H. Rutten
Suite 300
2198 East Camelback Road
Phoenix, Arizona 85016-4747
Facsimile No. (602)468-0909

or to such other address as such party may have given to the other parties by
notice pursuant to this Section 19.4. Notice shall be deemed given on the date
of delivery, in the case of personal delivery or telecopy, or on the delivery or
refusal date, as specified on the return receipt, in the case of overnight
courier or registered or certified mail.

19.5. Choice of Law. This Agreement shall be construed, interpreted,
and the rights of the parties determined in accordance with, the laws of the
State of Florida except with respect to matters of law concerning the internal
affairs of any corporate or partnership entity which is

-61-

<PAGE> 62

a party to or the subject of this Agreement, and as to those matters the law of
the state of incorporation or organization of the respective entity shall
govern.

19.6. Entire Agreement; Amendments and Waivers. This Agreement,
together with the documents contemplated by this Agreement and all Exhibits and
Schedules hereto and thereto, constitutes the entire agreement between the
parties pertaining to the subject matter hereof and supersedes all prior and
contemporaneous agreements, understandings, negotiations and discussions,
whether oral or written, of the parties, and there are no warranties,
representations or other agreements between the parties in connection with the
subject matter hereof. No supplement, modification or waiver of any of the
provisions of this Agreement shall be binding unless it shall be specifically
designated to be a supplement, modification or waiver of this Agreement and
shall be executed in writing by the party to be bound thereby. No waiver of any
of the provisions of this Agreement shall be deemed or shall constitute a waiver
of any other provision hereof (whether or not similar), nor shall such waiver
constitute a continuing waiver unless otherwise expressly provided.

19.7. Confidentiality Agreements. The provisions of any prior
confidentiality agreements and letters of intent between or among Vision 21, the
Company and the Physician, as amended, shall terminate and cease to be of any
force or effect at and upon the Closing.

19.8. Reformation Clause. It is the intention of the parties hereto
to conform strictly to applicable laws regarding the practice and regulation of
medicine, whether such laws are now or hereafter in effect, including the laws
of the United States of America, the State or any other applicable
jurisdiction, and including any subsequent revisions to, or judicial
interpretations of, those laws, in each case to the extent they are applicable
to this Agreement (the "Applicable Laws"). Accordingly, if the ownership of any
Nonmedical Asset by Vision 21 violates any Applicable Law, then the parties
hereto agree as follows: (a) the provisions of this Section 19.8 shall govern
and control; (b) if none of the parties hereto are materially economically
disadvantaged, then any Nonmedical Asset, the ownership of which violates any
Applicable Law, shall be deemed to have never been owned by Vision 21; (c) if
one or more of the parties hereto is materially economically disadvantaged,
then the parties hereto agree to negotiate in good faith such changes to the
structure and terms of the transactions provided for in this Agreement as may
be necessary to make these transactions, as restructured, lawful under
applicable laws and regulations, without materially disadvantaging either
party; (d) this Agreement shall be deemed reformed; and (e) the parties to this
Agreement shall execute and deliver all documents or instruments necessary to
effect or evidence the provisions of this Section 19.8.

19.9. Assignment. The Agreement may not be assigned by operation of
law or otherwise except that Vision 21 shall have the right to assign this
Agreement, at any time, to any Affiliate or direct or indirect wholly-owned
subsidiary. In the event of such assignment, Vision 21 shall remain liable
hereunder.

-62-

<PAGE> 63

19.10. Attorneys' Fees. Except as otherwise specifically provided
herein, if any action or proceeding is brought by any party with respect to this
Agreement or the other documents contemplated with respect to the
interpretation, enforcement or breach hereof, the prevailing party in such
action shall be entitled to an award of all reasonable costs of litigation or
arbitration, including, without limitation, attorneys' fees, to be paid by the
losing party, in such amounts as may be determined by the court having
jurisdiction of such action or proceeding or by the arbitrators deciding such
action or proceeding.

19.11. Further Assurances. From time to time hereafter and without
further consideration, each of the parties hereto shall execute and deliver such
additional or further instruments of conveyance, assignment and transfer and
take such other actions as any of the other parties hereto may reasonably
request in order to more effectively consummate the transactions contemplated
hereunder or as shall be reasonably necessary or appropriate in connection with
the carrying out of the parties' respective obligations hereunder for the
purposes of this Agreement.

19.12. Announcements and Press Releases. Any press releases or any
other public announcements concerning this Agreement or the transactions
contemplated hereunder shall be approved in advance by Vision 21 and the
Company; provided, however, that such approval shall not be unreasonably
withheld and if any party reasonably believes that it has a legal obligation to
make a press release and the consent of the other party cannot be obtained, then
the release may be made without such approval.

19.13. No Tax Representations. Each party acknowledges that it is
relying solely on its advisors to determine the tax consequences of the
transactions contemplated hereunder and that no representation or warranty has
been made by any party as to the tax consequences of such transactions except as
otherwise specifically set forth in this Agreement.

19.14. No Rights as Stockholder. The Physician shall have no rights as
a stockholder with respect to any shares of Common Stock until the issuance of a
stock certificate evidencing such shares. Except as otherwise provided in the
Agreement, no adjustment shall be made for dividends or distributions or other
rights for which the record date is prior to such date any stock certificate is
issued.

19.15. Multiple Counterparts. This Agreement may be executed in one or
more counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.

19.16. Headings. The headings of the several articles and sections
herein are inserted for convenience of reference only and are not intended to be
part of or to affect the meaning or interpretation of this Agreement.

19.17. Severability. Each article, section and subsection of this
Agreement constitutes a separate and distinct undertaking, covenant or provision
of this Agreement. If any such

-63-

<PAGE> 64

provision shall finally be determined to be unlawful, such provision shall be
deemed severed from this Agreement, but every other provision of this Agreement
shall remain in full force and effect.

19.18. Form of Transaction. If after the execution hereof, Vision 21
determines that the sale of the Nonmedical Assets of the Company can be better
achieved through a different form of transaction without economic injury to the
Company or the Physician, or delay of the consummation of the transaction, the
Company and the Physician shall cooperate in revising the structure of the
transaction and shall negotiate in good faith to so amend this Agreement;
provided, that Vision 21 shall reimburse the Company and the Physician at
Closing for all additional expenses incurred by the Company and the Physician as
a result of such change in form including, but not limited to any additional tax
liability incurred by the Company or Physician as a result of such change in
form.

[SIGNATURES ON FOLLOWING PAGE]

-64-

<PAGE> 65

IN WITNESS WHEREOF, the parties hereto have duly executed this
Agreement as of the date first written above.

"COMPANY"
SWAGEL-WOOTTON EYE CENTER, LTD.

By:
- --------------------------- ---------------------------------
Witness Lorin M. Swagel, M.D., President

- ---------------------------
Witness

"PHYSICIAN"

- --------------------------- ------------------------------------
Witness WENDY WOOTTON, M.D.

- --------------------------- ------------------------------------
Witness JAMES C. WOOTTON, M.D.

- --------------------------- ------------------------------------
Witness LORIN M. SWAGEL, M.D.

"VISION 21"
VISION TWENTY-ONE, INC.

By:
- --------------------------- ---------------------------------
Witness Theodore N. Gillette, President

- --------------------------
Witness

-65-

<PAGE> 1
OPTICAL ASSET PURCHASE AGREEMENT

This Optical Asset Purchase Agreement (this "Agreement"), dated as of
June 1, 1997, is by and among Aztec Optical Limited Partnership, an Arizona
limited partnership (the "Partnership"), Swagel-Wootton Eye Center, Ltd., an
Arizona professional corporation (the "Practice"), Wendy Wootton, M.D., James C.
Wootton, M.D., Lorin M. Swagel, M.D., and Daniel T. McGehee, O.D. (individually,
a "Partner" and collectively, the "Partners"), and Vision Twenty-One, Inc., a
Florida corporation ("Vision 21").

R E C I T A L S

A. The Partners currently conduct an Optical Business (as defined
herein) through the Partnership.

B. The Partners own all of the partnership interests of the
Partnership. Wendy Wootton, M.D., James C. Wootton, M.D. and Lorin M. Swagel,
M.D. own all of the capital stock of the Practice.

C. The Practice is a professional corporation engaged in the
provision of professional eye care services.

D. Vision 21 provides business management services and facilities
for eye care professionals and related businesses and has contemporaneously
herewith acquired all of the non-medical assets of the Practice.

E. The Partnership desires to sell, assign and transfer all of
its Optical Assets (as defined herein) to the Practice and all of its
Non-optical Assets (as defined herein) to Vision 21 and the Practice and Vision
21 desire to purchase, assume and acquire such assets and assume certain
liabilities of the Partnership in exchange for capital stock of Vision 21 and
other consideration, all as more specifically provided herein.

1. DEFINITIONS. As used in this Agreement, the following terms
shall have the meanings set forth below:

1.1. AAA. The term "AAA" shall mean the American
Arbitration Association.

1.2. Accountants. The term "Accountants" shall mean the
accounting firm for Vision 21.

<PAGE> 2

1.3. Accounts Receivable. The term "Accounts Receivable"
shall have the meaning set forth in Section 2.2(a).

1.4. Acquisition Proposal. The term "Acquisition Proposal"
shall have the meaning set forth in Section 3.28.

1.5. Affiliate. The term "Affiliate" with respect to any
person or entity shall mean a person or entity that directly or indirectly
through one or more intermediaries, controls, or is controlled by or is under
common control with, such person or entity.

1.6. Applicable Laws. The term "Applicable Laws" shall
have the meaning set forth in Section 18.8.

1.7. Assumed Contracts. The term "Assumed Contracts"
shall have the meaning set forth in Section 2.2(d).

1.8. Assumed Obligations. The term "Assumed Obligations"
shall have the meaning set forth in Section 2.4.

1.9. Audit. The term "Audit" shall have the meaning set
forth in Section 3.6.

1.10. Business Management Agreement. The term "Business
Management Agreement" shall mean the Business Management Agreement entered into
between the Practice and Vision 21 at the Closing.

1.11. Business Records. The term "Business Records" shall
have the meaning set forth in Section 2.2(f)

1.12. Cash Compensation. The term "Cash Compensation"
shall have the meaning set forth in Section 3.8(a).

1.13. Claim Notice. The term "Claim Notice" shall have the
meaning set forth in Section 14.3(a).

1.14. Closing. The term "Closing" shall mean the
consummation of the transactions contemplated by this Agreement.

1.15. Closing Date. The term "Closing Date" shall mean
June 30, 1997, or such other date as mutually agreed upon by the parties.

1.16. Code. The term "Code" shall mean the Internal
Revenue Code of 1986, as amended.

- 2 -

<PAGE> 3

1.17. Commitments. The term "Commitments" shall have the
meaning set forth in Section 3.12(a).

1.18. Common Stock. The term "Common Stock" or "Vision 21
Common Stock" shall mean the common stock, par value $.001 per share, of Vision
21.

1.19. Compensation Plans. The term "Compensation Plans"
shall have the meaning set forth in Section 3.8(b).

1.20. Competing Management Business. The term "Competing
Management Business" shall have the meaning set forth in Section 16.1(b).

1.21. Competitor. The term "Competitor" shall mean any
person or entity which, individually or jointly with others, whether for its own
account or for that of any other person or entity, owns, or holds any ownership
or voting interest in any person or entity engaged in an Optical Business;
provided, however, that such term shall not include any Affiliate of Vision 21
or any entity with which Vision 21 has an agreement similar to the Business
Management Agreement in effect.

1.22. Controlled Group. The term "Controlled Group" shall
have the meaning set forth in Section 3.9(g).

1.23. Damages. The term "Damages" shall have the meaning
set forth in Section 14.1.

1.24. Election Period. The term "Election Period" shall
have the meaning set forth in Section 14.3(a).

1.25. Employee Benefit Plans. The term "Employee Benefit
Plans" shall have the meaning set forth in Section 3.9(a).

1.26. Employee Policies and Procedures. The term "Employee
Policies and Procedures" shall have the meaning set forth in Section 3.8(d).

1.27. Employment Agreements. The term "Employment
Agreements" shall have the meaning set forth in Section 3.8(c).

1.28. Environmental Laws. The term "Environmental Laws"
shall have the meaning set forth in Section 3.23(a).

1.29. ERISA. The term "ERISA" shall mean the Employee
Retirement Income Security Act of 1974, as amended.

- 3 -
<PAGE> 4

1.30. Exchange Act. The term "Exchange Act" shall mean the
Securities Exchange Act of 1934, as amended.

1.31. Excluded Assets. The term "Excluded Assets" shall
have the meaning set forth in Section 2.3.

1.32. FBCA. The term "FBCA" shall mean the Florida
Business Corporation Act.

1.33. Financial Statements. The term "Financial
Statements" shall have the meaning set forth in Section 3.6.

1.34. GAAP. The term "GAAP" shall mean generally accepted
accounting principles, applied on a consistent basis with prior periods, set
forth in the opinions and pronouncements of the Accounting Principles Board of
the American Institute of Certified Public Accountants and statements and
pronouncements of the Financial Accounting Standards Board or in such other
statements by such other entity or other practices and procedures as may be
approved by a significant segment of the accounting profession, which are
applicable to the circumstances as of the date of the determination.

1.35. Governmental Authority. The term "Governmental
Authority" shall mean any national, state, provincial, local or tribunal
governmental, judicial or administrative authority or agency.

1.36. Indemnified Party. The term "Indemnified Party"
shall have the meaning set forth in Section 14.3(a).

1.37. Indemnifying Party. The term "Indemnifying Party"
shall have the meaning set forth in Section 14.3(a).

1.38. Indemnity Notice. The term "Indemnity Notice" shall
have the meaning set forth in Section 14.3(d).

1.39. Insurance Policies. The term "Insurance Policies"
shall have the meaning set forth in Section 3.13.

1.40. IRS. The term "IRS" shall mean the Internal Revenue
Service.

1.41. Lease Assignments. The term "Lease Assignments"
shall have the meaning set forth in Section 12.1(m).

1.42. Leased Property. The term "Leased Property" shall
have the meaning set forth in Section 2.2(c).

- 4 -

<PAGE> 5

1.43. Management Business. The term "Management Business"
shall have the meaning set forth in Section 16.1(b)(i).

1.44. Material Adverse Effect. The term "Material Adverse
Effect" shall mean a material adverse effect on the Non-optical Assets and the
Partnership's business, operations, condition (financial or otherwise) or
results of operations, taken as a whole, considering all relevant facts and
circumstances.

1.45. Non-optical Assets. The term "Non-optical Assets"
shall mean all of the assets of the Partnership, as such assets are more fully
described in Section 2.2, except for the Optical Assets and the Excluded Assets.

1.46. Optical Assets. The term "Optical Assets" shall mean
the Partnership's right, title and interest in those assets set forth on
Schedule 1.46.

1.47. Optical Business. The term "Optical Business" shall
mean the sale of lenses, eyeglasses and other prescription and non-prescription
eyewear.

1.48. Payors. The term "Payors" shall have the meaning set
forth in Section 3.27.

1.49. Partnership Balance Sheet. The term "Partnership
Balance Sheet" shall have the meaning set forth in Section 3.6.

1.50. Partnership Balance Sheet Date. The term
"Partnership Balance Sheet Date" shall have the meaning set forth in Section
3.6.

1.51. Partnership Law. The term "Partnership Law" shall
mean the statutes, regulations and laws governing limited partnerships in the
State.

1.52. Permitted Encumbrances. The term "Permitted
Encumbrances" shall have the meaning set forth in Section 3.11(b).

1.53. Personal Property Leases. The term "Personal
Property Leases" shall have the meaning set forth in Section 2.2(b).

1.54. Prepaid Items. The term "Prepaid Items" shall have
the meaning set forth in Section 2.2(l).

1.55. Proposed Purchase Price Adjustment. The term
"Proposed Purchase Price Adjustment" shall have the meaning set forth in Section
2.7(b).

- 5 -

<PAGE> 6

1.56. Proprietary Rights. The term "Proprietary Rights"
shall have the meaning set forth in Section 3.14.

1.57. Public Offering. The term "Public Offering" shall
mean any underwritten public offering of Vision 21 Common Stock, including
initial and secondary offerings.

1.58. Purchase Price. The term "Purchase Price" shall mean
the consideration set forth in Section 2.5 of this Agreement.

1.59. Real Property Leases. The term "Real Property
Leases" shall have the meaning set forth in Section 2.2(c).

1.60. Recent Acquisitions. The term "Recent Acquisitions"
shall mean the acquisitions by Vision 21 with third parties which were completed
in December 1996, March 1997 and May 1997.

1.61. SEC. The term "SEC" shall mean the Securities and
Exchange Commission.

1.62. Securities. The term "Securities" shall mean the
shares of Vision 21 Common Stock which shall be delivered to the Partnership
under the terms of this Agreement.

1.63. Securities Act. The term "Securities Act" shall mean
the Securities Act of 1933, as amended.

1.64. State. The term "State" shall mean the State of
Arizona.

1.65. Tangible Personal Property. The term "Tangible
Personal Property" shall have the meaning set forth in Section 2.2(e).

1.66. Tax Returns. The term "Tax Returns" shall have the
meaning set forth in Section 3.15(a).

1.67. Third Party Claim. The term "Third Party Claim"
shall have the meaning set forth in Section 14.3(a).

1.68. Transaction. The term "Transaction" shall mean the
purchase and sale of the Optical Assets and the Non-optical Assets and the
assumption of the Assumed Obligations pursuant to this Agreement.

1.69. Vision 21 Financial Statements. The term "Vision 21
Financial Statements" shall have the meaning set forth in Section 5.9.

- 6 -

<PAGE> 7

2. PURCHASE AND SALE OF OPTICAL ASSETS AND NON-OPTICAL ASSETS.

2.1. Purchase and Sale of Optical Assets. Subject to the
terms and conditions herein set forth, the Partnership agrees to sell, convey,
assign, transfer and deliver to the Practice, and the Practice agrees to
purchase, assume, accept and acquire, the Optical Assets owned by the
Partnership as of the Closing Date.

2.2. Purchase and Sale of Non-Optical Assets. Subject to
the terms and conditions herein set forth, and in reliance upon the
representations and warranties set forth herein, the Partnership agrees to sell,
convey, assign, transfer and deliver to Vision 21, and Vision 21 agrees to
purchase, assume, accept and acquire, the assets consisting of all the assets
(other than the Optical Assets specified in Section 2.1 hereof) owned by the
Partnership as of the Closing Date, of every kind, character and description,
whether tangible, real, personal, or mixed, and wheresoever located, whether
carried on the books of the Partnership or not carried on the books of the
Partnership due to having been expended, fully depreciated, or otherwise (the
"Non-Optical Assets"), including without limitation the following (except to the
extent that any of the following are specifically enumerated as Excluded Assets
in Section 2.3 hereof) to the extent permitted by applicable law:

a. All of the accounts receivable or other
rights to receive payment owing to the Partnership ("Accounts Receivable");

b. All of the Partnership's rights in, to and
under all leases of supplies, instruments, equipment, furniture, machinery and
other items of tangible personal property ("Personal Property Leases"),
including, without limitation, the Personal Property Leases described on
Schedule 2.2(b);

c. All of the Partnership's rights as a lessee
in, to and under all real property lease agreements (such real property lease
agreements are hereinafter referred to as "Real Property Leases" and the parcels
of real property in which the Partnership has a leasehold interest and that are
subject to the Real Property Leases are hereinafter referred to as "Leased
Property"), including, without limitation, estates created by, and rights
conferred under, the Real Property Leases described on Schedule 2.2(c), and any
and all estates, rights, titles and interests in, to and under all warehouses,
storage facilities, buildings, works, structures, fixtures, landings,
constructions in progress, improvements, betterments, installations, and
additions constructed or located on or affixed to the Leased Property;

d. All of the Partnership's rights in, to and
under all contracts, agreements, insurance policies, purchase orders and
commitments (the "Assumed Contracts"), including, without limitation, the
Assumed Contracts described on Schedule 2.2(d);

- 7 -

<PAGE> 8

e. All tangible personal property (including
supplies, instruments, equipment, furniture and machinery) owned by the
Partnership ("Tangible Personal Property"), including, without limitation, the
Tangible Personal Property described on Schedule 2.2(e);

f. All books and records of the Partnership,
including, without limitation, all credit records, payroll records, computer
records, computer programs, contracts, agreements, operating manuals, schedules
of assets, correspondence, books of account, files, papers, books and all other
public and confidential business records (together the "Business Records"),
whether such Business Records are in hard copy form or are electronically or
magnetically stored;

g. All franchises, licenses, permits,
certificates, approvals and other governmental authorizations necessary to own
and operate any of the other Non-optical Assets, a complete and correct list of
which is set forth on Schedule 2.2(g);

h. All (i) United States and foreign patents,
patent applications, trademarks, trademark applications and registrations,
service marks, service mark applications and registrations, copyrights,
copyright applications and registrations and trade names of the Partnership;
(ii) proprietary data and technical, manufacturing know-how and information (and
all materials embodying such information) of the Partnership; (iii)
developments, discoveries, inventions, ideas and trade secrets of the
Partnership; and (iv) rights to sue for past infringement;

i. All of the Partnership's right, title and
interest in, to and under all telephone numbers used by the Partnership,
including all extensions thereto;

j. All rights in, to and under all
representations, warranties, covenants and guaranties made or provided by third
parties to or for the benefit of the Partnership with respect to any of the
other Non-optical Assets;

k. All cash in registers or petty cash drawers
(which shall on the Closing Date be at least ninety percent (90%) of the average
daily cash balance held in such locations in the twelve (12) month period
preceding the Closing Date); and

l. All of the Partnership's prepaid expenses,
prepaid insurance, deposits and other similar items ("Prepaid Items").

If and to the extent the assignment of any personal property lease,
real property lease, contract, agreement, purchase order, work order,
commitment, license, permit, certificate or approval listed on the foregoing
Schedules shall require the consent of another party thereto, then (i) such
personal property lease, real property lease, contract, agreement, purchase
order, work order, commitment, license, permit, certificate or approval shall
constitute a Personal Property Lease, Real Property Lease, Assumed Contract or
License, as the case may be, only upon and subject to receipt of such consent;
(ii) such personal property lease, contract, agreement, purchase

- 8 -

<PAGE> 9

order, work order, commitment, license, permit, certificate or approval shall
not be a Personal Property Lease, Real Property Lease, Assumed Contract or
License, as the case may be, if and for so long as the attempted assignment
would constitute a breach thereof; and (iii) the Partnership shall cooperate
fully with Vision 21 (or Vision 21's successor-in-interest) in seeking
such consent or reasonable arrangement designed to provide to Vision 21 (or such
successor-in-interest) the benefits, claim or rights arising thereunder.

2.3. Excluded Assets. The Partnership shall not sell,
convey, assign, transfer or deliver to Vision 21, and Vision 21 shall not be
obligated to purchase, accept or acquire (or make any payments or otherwise
discharge any liability or obligation of the Partnership with respect to), (a)
life insurance policies covering the life of any employee of the Partnership,
(b) personal effects listed on Schedule 2.3; and (c) cash and cash equivalents
in banks, certificates of deposit, commercial paper and securities owned by the
Partnership (but excluding cash held in registers or petty cash drawers on the
Closing Date) (collectively, the "Excluded Assets").

2.4. Assumption of Obligations and Liabilities. At the
Closing, Vision 21 shall assume and agree to pay or perform, promptly as they
become due, only those obligations and liabilities of the Partnership expressly
set forth on Schedule 2.4 (the "Assumed Obligations"). Except for the Assumed
Obligations, Vision 21 shall not assume or be deemed to have assumed and shall
not be responsible for any other obligation or liability of the Partnership,
direct or indirect, known or unknown, absolute or contingent, including without
limitation (i) any and all obligations regarding any foreign, Federal, state or
local income, sales, use, franchise or other tax liabilities, (ii) any and all
obligations or liabilities relating to any fees or expenses of the Partnership's
or the Partners' counsel, accountants or other experts incident to the
negotiation and preparation of any of the documents contemplated herein and
consummation of the transactions contemplated thereby, and (iii) any and all
liabilities relating to or arising from personal injuries relating to Optical
Assets sold by the Partnership to the Partnership's customers prior to the
Closing Date.

2.5. Purchase Price. Vision 21 agrees that, subject to the
terms and conditions of this Agreement, and in full consideration for the
aforesaid sale, transfer, conveyance, assignment and delivery of the Non-optical
Assets of the Partnership to Vision 21, and the acceptance by Vision 21 of such
Non-optical Assets and the assumption of the Assumed Obligations of the
Partnership by Vision 21, Vision 21 shall deliver to the Partnership at the
Closing the consideration (the "Purchase Price") set forth in Schedule 2.5A. The
Practice agrees that, subject to the terms and conditions of this Agreement, and
in full consideration of the aforesaid sale, transfer, conveyance, assignment
and delivery of the Optical Assets, the Practice shall deliver to the
Partnership at the Closing the consideration set forth in Schedule 2.5B.

2.6. The Closing. The Closing shall take place on the
Closing Date at the offices of Shumaker, Loop & Kendrick, 101 E. Kennedy
Boulevard, Suite 2800, Tampa, Florida 33602 or at such other location in the
State as the parties shall mutually agree.

- 9 -

<PAGE> 10

2.7. Purchase Price Adjustments.

a. The Purchase Price shall be subject to adjustment
to the extent that Current Assets (as defined herein) or Current Liabilities
Assumed (as defined herein) materially differ from the amounts customarily
arising in the ordinary course of business of the Partnership as of May 31,
1997. The term "Current Assets" shall mean petty cash, Accounts Receivable,
prepaid expenses, supplies and other current assets (excluding cash in banks,
certificates of deposit, other cash equivalents, current portion of capital
leases and prepaid Income Taxes). The term "Current Liabilities Assumed" shall
mean the audited balances as of May 31, 1997, of trade accounts payable
(excluding any pertaining to the Optical Assets), accrued payroll, accrued
payroll taxes, accrued benefits, and other current liabilities (excluding notes
payable, current portion of capital leases and long-term debt and income and
franchise taxes and accrued shareholder expenses). The adjustment shall be
settled in cash (which shall be set-off from moneys due the Practice, pursuant
to the Business Management Agreement) or Vision 21 Common Stock at Vision 21's
option. The parties also agree that to the extent the adjustments materially
impact the goodwill created by the transaction, there shall be an adjustment for
the related impact of net income created by the change in amortization of such
goodwill and the Purchase Price shall be increased or reduced to reflect the
impact on net income settled in cash or Vision 21 Common Stock at Vision 21's
option.

b. Within sixty (60) days following the Closing
Date, Vision 21 shall present to the Partners its Purchase Price adjustment (the
"Proposed Purchase Price Adjustment") calculated in accordance with Section
2.7(a) hereof. The Partners shall, within thirty (30) days after the delivery by
Vision 21 of the Proposed Purchase Price Adjustment, complete their review
thereof. In the event that a majority of the Partners believe that the Proposed
Purchase Price Adjustment has not been prepared on the basis set forth in
Section 2.7(a) or otherwise contests any item set forth therein, the Partners
shall, on or before the last day of such 30 day period, so object to Vision 21
in writing, setting forth a specific description of the nature of the objection
and the corresponding adjustments the Partners believe should be made. If no
objection is received by Vision 21 on or before the last day of such 30 day
period, then the Proposed Purchase Price Adjustment delivered by Vision 21 shall
be final. If an objection has been made and Vision 21 and the Partners are
unable to resolve all of their disagreements with respect to the proposed
adjustments within 15 days following the delivery of the Partners' objection,
the dispute shall be submitted to arbitration as provided in Section 18.1 except
that the arbitrator shall be instructed to deliver his determination of the
dispute to the parties no later than 30 days after the arbitration hearing.
Vision 21 shall provide to the Partners and their accountants full access to all
relevant books, records and work papers utilized in preparing the Proposed
Purchase Price Adjustment.

2.8. Subsequent Actions. If, at any time after the
Closing Date, Vision 21 shall determine or be advised that any deeds, bills of
sale, assignments, assurances or any other actions or things are necessary or
desirable to vest, perfect or confirm of record or otherwise in Vision 21 its
right, title or interest in, to or under any of the rights, properties or assets
of the Partnership

- 10 -

<PAGE> 11

acquired or to be acquired by Vision 21 as a result of, or in connection with,
the Transaction, or otherwise to carry out this Agreement, the officers and
directors of Vision 21 shall, at the sole cost and expense of Vision 21, be
authorized to execute and deliver, in the name and on behalf of the Partnership,
such deeds, bills of sale, assignments and assurances, and to take and do, in
the name and on behalf of the Partnership, all such other actions and things as
may be necessary or desirable to vest, perfect or confirm any and all right,
title and interest in, to and under such rights, properties or assets in Vision
21 or otherwise to carry out this Agreement.

2.9. Allocation of Purchase Price. The Purchase Price
shall be allocated among the Non-optical Assets and the Optical Assets as set
forth on Schedule 2.9. Each of Vision 21, the Partnership and the Partners
covenants and agrees that he, she or it shall not take a position that is in any
way inconsistent with the terms of this Section 2.9 on any income tax return,
before any governmental agency charged with the collection of any income tax or
in any judicial proceeding.

3. REPRESENTATIONS AND WARRANTIES OF THE PARTNERSHIP AND THE
PARTNERS. The Partnership and each of the Partners, jointly and severally,
represent and warrant to Vision 21 that the following are true and correct as of
the date hereof, and shall be true and correct through the Closing Date as if
made on that date; when used in this Section 3, the term "best knowledge" shall
mean in the case of the Partnership the best knowledge of those individuals
listed on Schedule 3:

3.1. Organization and Qualification. The Partnership is
duly organized and validly existing under the laws of the State, with all
requisite power and authority to carry on the business in which it is engaged,
to own the properties it owns, to execute and deliver this Agreement and to
consummate the transactions contemplated hereby. The Partnership is not duly
qualified and licensed to do business in any other jurisdiction. The Partnership
does not have any assets, employees or offices in any state other than the
State. Except as set forth on Schedule 3.1, neither the Partnership nor the
Partners own, directly or indirectly, any of the capital stock of any
corporation or any equity, profit sharing, participation or other interest in
any corporation, other partnership, joint venture or other entity that is
engaged in a business that is a Competitor.

3.2. Continuity of Business Enterprise. Except as set
forth on Schedule 3.2, and except as contemplated by this Agreement, there has
not been any sale or distribution of significant assets of the Partnership or
any of its Affiliates other than in the ordinary course of business within the
two (2) year period preceding the date of this Agreement.

3.3. Authorization and Validity. The execution, delivery
and performance by the Partnership of this Agreement and the other agreements
contemplated hereby, and the consummation of the transactions contemplated
hereby and thereby to be performed by the Partnership, have been duly authorized
by the Partnership. This Agreement has been, or will be by the Closing Date,
duly executed by the Partnership and, upon delivery, will constitute the

- 11 -

<PAGE> 12

legal, valid and binding obligation of the Partnership enforceable against the
Partnership in accordance with its terms, except as may be limited by applicable
bankruptcy, insolvency or similar laws affecting creditors' rights generally or
the availability of equitable remedies. The Partnership has obtained, in
accordance with applicable law and its partnership agreement, the approval of
the Partners necessary for the consummation of the transactions contemplated
hereby.

3.4. Compliance. Except as disclosed on Schedule 3.4, the
execution and delivery of the documents contemplated hereunder and the
consummation of the transactions contemplated thereby by the Partnership will
not (i) violate any provision of the Partnership's partnership agreement, (ii)
violate any material provision of or result in the breach of or entitle any
party to accelerate (whether after the giving of notice or lapse of time or
both) any material obligation under, any mortgage, lien, lease, contract,
license, instrument or any other agreement to which the Partnership is a party,
(iii) result in the creation or imposition of any material lien, charge, pledge,
security interest or other material encumbrance upon any property of the
Partnership or (iv) violate or conflict with any order, award, judgment or
decree or other material restriction or to the best of the Partnership's
knowledge violate or conflict with any law, ordinance or regulation to which the
Partnership or its property is subject.

3.5. Consents. No consent, approval, order or
authorization of or registration, declaration, or filing with, any Governmental
Authority or other person is required in connection with the execution and
delivery of the documents contemplated herein by the Partnership or the
consummation by such party of the transactions contemplated thereby, except for
those consents or approvals set forth on Schedule 3.5.

3.6. Financial Statements. The Partnership has furnished
to Vision 21 its unaudited balance sheet and related unaudited statements of
income, retained earnings and cash flows for its prior three (3) full fiscal
years, and its unaudited interim balance sheet for the fiscal period ended April
30, 1997 (the "Partnership Balance Sheet," and the date thereof shall be
referred to as the "Partnership Balance Sheet Date") and related unaudited
statements of income, retained earnings and cash flows for the twelve months
then ended (all collectively, with the related notes thereto, the "Financial
Statements"). The Financial Statements fairly present the financial condition
and results of operations of the Partnership as of the dates and for the periods
indicated except as otherwise indicated in the Financial Statements. The
Partnership and the Partners expressly warrant that they will have prior to the
Closing fairly, accurately and completely provided all necessary information
requested in or relevant to the preparation of the audit to be conducted by the
Accountants or their designees prior to Closing (the "Audit").

3.7. Liabilities and Obligations. Except as set forth on
Schedule 3.7, the Financial Statements reflect all liabilities of the
Partnership, accrued, contingent or otherwise that would be required to be
reflected thereon, or in the notes thereto, prepared in accordance with GAAP,
except for liabilities and obligations incurred in the ordinary course of
business since the Partnership Balance Sheet Date. Except as set forth in the
Financial Statements or on Schedule 3.7, the Partnership is not liable upon or
with respect to, or obligated in any other way

- 12 -

<PAGE> 13

to provide funds in respect of or to guarantee or assume in any manner, any
debt, obligation or dividend of any person, corporation, association,
partnership, joint venture, trust or other entity, and the Partnership does not
know of any valid basis for the assertion of any other claims or liabilities of
any nature or in any amount.

3.8. Employee Matters.

a. Cash Compensation. Schedule 3.8(a) contains
a complete and accurate list of the names, titles and annual cash compensation
as of the Closing Date, including without limitation wages, salaries, bonuses
(discretionary and formula) and other cash compensation (the "Cash
Compensation") of all Partners and employees of the Partnership. In addition,
Schedule 3.8(a) contains a complete and accurate description of (i) all
increases in Cash Compensation of Partners and employees of the Partnership
during the current fiscal year and the immediately preceding fiscal year and
(ii) any promised increases in Cash Compensation of Partners and employees of
the Partnership that have not yet been effected.

b. Compensation Plans. Schedule 3.8(b)
contains a complete and accurate list of all compensation plans, arrangements or
practices (the "Compensation Plans") sponsored by the Partnership or to which
the Partnership contributes on behalf of its employees, other than Employment
Agreements listed on Schedule 3.8(c) and Employee Benefit Plans listed on
Schedule 3.9(a). The Compensation Plans include without limitation plans,
arrangements or practices that provide for performance awards, and stock
ownership or stock options. The Partnership has provided or made available to
Vision 21 a copy of each written Compensation Plan and a written description of
each unwritten Compensation Plan. Except as set forth on Schedule 3.8(b), each
of the Compensation Plans can be terminated or amended at will by the
Partnership.

c. Employment Agreements. Except as set forth
on Schedule 3.8(c), the Partnership is not a party to any employment agreement
("Employment Agreements") with respect to any of the Partners or the
Partnership's employees. Employment Agreements include without limitation
employee leasing agreements, employee services agreements and non-competition
agreements.

d. Employee Policies and Procedures. Schedule
3.8(d) contains a complete and accurate list of all employee manuals and all
material policies, procedures and work-related rules (the "Employee Policies and
Procedures") that apply to employees of the Partnership. The Partnership has
provided or made available to Vision 21 a copy of all written Employee Policies
and Procedures and a written description of all material unwritten Employee
Policies and Procedures.

e. Unwritten Amendments. Except as described
on Schedule 3.8(b), 3.8(c), or 3.8(d), no material unwritten amendments have
been made, whether by oral

- 13 -

<PAGE> 14

communication, pattern of conduct or otherwise, with respect to any Compensation
Plans or Employee Policies and Procedures.

f. Labor Compliance. To the best knowledge of
the Partnership and the Partners, the Partnership has been and is in compliance
with all applicable laws, rules, regulations and ordinances respecting
employment and employment practices, terms and conditions of employment and
wages and hours, except for any such failures to be in compliance that,
individually or in the aggregate, would not result in a Material Adverse Effect,
and the Partnership is not liable for any arrearages of wages or penalties for
failure to comply with any of the foregoing. The Partnership has not, to the
best of the Partners' and the Partnership's knowledge, engaged in any unfair
labor practices or discriminated on the basis of race, color, religion, sex,
national origin, age, disability or handicap in its employment conditions or
practices that would, individually or in the aggregate, result in a Material
Adverse Effect. Except as set forth on Schedule 3.8(f), there are no (i) unfair
labor practice charges or complaints or racial, color, religious, sex, national
origin, age, disability or handicap discrimination charges or complaints pending
or, to the actual knowledge of the Partnership and the Partners, threatened
against the Partnership before any federal, state or local court, board,
department, commission or agency (nor, to the best knowledge of the Partnership
and the Partners, does any valid basis therefor exist) or (ii) existing or, to
the actual knowledge of the Partnership, threatened labor strikes, disputes,
grievances, controversies or other labor troubles affecting the Partnership
(nor, to the best knowledge of the Partnership and the Partners, does any valid
basis therefor exist).

g. Unions. The Partnership has never been a
party to any agreement with any union, labor organization or collective
bargaining unit. No employees of the Partnership are represented by any union,
labor organization or collective bargaining unit. Except as set forth on
Schedule 3.8(g), to the actual knowledge of the Partnership, none of the
employees of the Partnership has threatened to organize or join a union, labor
organization or collective bargaining unit.

h. Aliens. All employees of the Partnership
are, to the best knowledge of the Partnership, citizens of, or are authorized in
accordance with federal immigration laws to be employed in, the United States.

3.9. Employee Benefit Plans.

a. Identification. Schedule 3.9(a) contains a
complete and accurate list of all employee benefit plans (within the meaning of
Section 3(3) of ERISA sponsored by the Partnership or to which the Partnership
contributes on behalf of its Partners or employees and all employee benefit
plans previously sponsored or contributed to on behalf of its Partners or
employees within the three (3) years preceding the date hereof (the "Employee
Benefit Plans"). The Partnership has provided or made available to Vision 21
copies of all plan documents, determination letters, pending determination
letter applications, trust instruments, insurance contracts, administrative
services contracts, annual reports, actuarial valuations, summary plan

- 14 -

<PAGE> 15

descriptions, summaries of material modifications, administrative forms and
other documents that constitute a part of or are incident to the administration
of the Employee Benefit Plans. In addition, the Partnership has provided or made
available to Vision 21 a written description of all existing practices engaged
in by the Partnership that constitute Employee Benefit Plans. Except as set
forth on Schedule 3.9(a) and subject to the requirements of the Code and ERISA,
each of the Employee Benefit Plans can be terminated or amended at will by the
Partnership. Except as set forth on Schedule 3.9(a), no unwritten amendment
exists with respect to any Employee Benefit Plan. Except as set forth on
Schedule 3.9(b)-(l), each of the following paragraphs is true and correct.

b. Administration. To the best knowledge of
the Partnership and the Partners, each Employee Benefit Plan has been
administered and maintained in compliance with all applicable laws, rules and
regulations, except where the failure to be in compliance would not,
individually or in the aggregate, result in a Material Adverse Effect. The
Partnership and the Partners have (i) made all necessary filings with respect to
such Employee Benefit Plans, including the timely filing of Form 5500 if
applicable, and (ii) made all necessary filings, reports and disclosures
pursuant to and have complied with all requirements of the IRS Voluntary
Compliance Resolution Program, if applicable, with respect to all profit sharing
retirement plans and pension plans in which employees of the Partnership
participate.

c. Examinations. Except as set forth on
Schedule 3.9(c), the Partnership has not received any notice that any Employee
Benefit Plan is currently the subject of an audit, investigation, enforcement
action or other similar proceeding conducted by any state or federal agency.

d. Prohibited Transactions. To the best
knowledge of the Partnership and the Partners, no prohibited transactions
(within the meaning of Section 4975 of the Code or Sections 406 and 407 of
ERISA) have occurred with respect to any Employee Benefit Plans.

e. Claims and Litigation. No pending or, to
the actual knowledge of the Partnership and the Partners, threatened, claims,
suits, or other proceedings exist with respect to any Employee Benefit Plan
other than normal benefit claims filed by participants or beneficiaries.

f. Qualification. As set forth in more detail
on Schedule 3.9(f), the Partnership has received a favorable determination
letter or ruling from the IRS for each of the Employee Benefit Plans intended to
be qualified within the meaning of Section 401(a) of the Code and/or tax-exempt
within the meaning of Section 501(a) of the Code. Except as set forth on
Schedule 3.9(e), no proceedings exist or, to the actual knowledge of the
Partnership have been threatened that could result in the revocation of any such
favorable determination letter or ruling.

g. Funding Status. To the best knowledge of
the Partnership and the Partners, no accumulated funding deficiency (within the
meaning of Section 412 of the Code),

- 15 -

<PAGE> 16

whether or not waived, exists with respect to any Employee Benefit Plan or any
plan sponsored by any member of a controlled group (within the meaning of
Section 412(n)(6)(B) of the Code) in which the Partnership is a member
("Controlled Group"). With respect to each Employee Benefit Plan subject to
Title IV of ERISA, the assets of each such plan are at least equal in value to
the present value of accrued benefits determined on an ongoing basis as of the
date hereof. The Partnership does not sponsor any Employee Benefit Plan
described in Section 501(c)(9) of the Code. None of the Employee Benefit Plans
are subject to actuarial assumptions.

h. Excise Taxes. Neither the Partnership nor
any member of a Controlled Group has any liability to pay excise taxes with
respect to any Employee Benefit Plan under applicable provisions of the Code or
ERISA.

i. Multiemployer Plans. Neither the
Partnership nor any member of a Controlled Group is or ever has been obligated
to contribute to a multiemployer plan within the meaning of Section 3(37) of
ERISA.

j. Pension Benefit Guaranty Corporation. None
of the Employee Benefit Plans are subject to the requirements of Title IV of
ERISA.

k. Retirees. The Partnership has no obligation
or commitment to provide medical, dental or life insurance benefits to or on
behalf of any of its employees who may retire or any of its former employees who
have retired except as may be required pursuant to the continuation of coverage
provisions of Section 4980B of the Code and Sections 501 through 508 of ERISA.

l. Other Compensation. Except as set forth on
Schedules 3.8(a), 3.8(b), 3.8(c), 3.8(d) and 3.9(a), none of the Partnership or
the Partners is a party to any compensation or debt arrangement with any person
relating to the provision of health care related services other than
arrangements with the Partnership or the Partners.

3.10. Absence of Certain Changes. Except as set forth on
Schedule 3.10 or as contemplated by this Agreement, since the Partnership
Balance Sheet Date, the Partnership has not:

a. suffered a Material Adverse Effect, whether
or not caused by any deliberate act or omission of the Partnership or any of the
Partners;

b. contracted for the purpose of acquiring any
capital asset having a cost in excess of $5,000 or made any single expenditure
in excess of $5,000;

c. incurred any indebtedness for borrowed money
(other than short-term borrowings in the ordinary course of business), or
issued or sold any debt securities;

- 16 -

<PAGE> 17

d. incurred or discharged any material
liabilities or obligations except in the ordinary course of business;

e. paid any amount on any indebtedness prior to
the due date, forgiven or canceled any claims or any debt in excess of $5,000,
or released or waived any rights or claims except in the ordinary course of
business;

f. mortgaged, pledged or subjected to any
security interest, lien, lease or other charge or encumbrance any of its
properties or assets (other than statutory liens arising in the ordinary course
of business or other liens that do not materially detract from the value or
interfere with the use of such properties or assets);

g. suffered any damage or destruction to or
loss of any assets (whether or not covered by insurance) that has, individually
or in the aggregate, resulted in a Material Adverse Effect;

h. acquired or disposed of any assets having an
aggregate value in excess of $5,000, except in the ordinary course of business;

i. written up or written down the carrying
value of any of its assets, other than accounts receivable in the ordinary
course of business;

j. changed the costing system or depreciation
methods of accounting for its assets in any material respect;

k. lost or terminated any employee, patient,
customer or supplier that has, individually or in the aggregate, resulted in a
Material Adverse Effect;

l. increased the compensation of any Partner,
officer, key employee or consultant, except as disclosed on Schedule 3.8(a);

m. increased the compensation of any employee
(except for increases in the ordinary course of business consistent with past
practice) or hired any new employee who is expected to receive annualized
compensation of at least $15,000;

n. made any payments to or loaned any money to
any person or entity referred to in Section 3.21;

o. formed or acquired or disposed of any
interest in any corporation, partnership, joint venture or other entity;

- 17 -

<PAGE> 18

p. redeemed, purchased or otherwise acquired,
or sold, granted or otherwise disposed of, directly or indirectly, any of its
partnership interests or securities, or agreed to change the terms and
conditions of any such partnership interests, securities or rights;

q. entered into any agreement providing for
total payments in excess of $5,000 in any twelve (12) month period with any
person or group, or modified or amended in any material respect the terms of any
such existing agreement, except in the ordinary course of business;

r. entered into, adopted or amended any
Employee Benefit Plan, except as contemplated hereby or the other agreements
contemplated hereby; or

s. entered into any other commitment or
transaction or experienced any other event that would materially interfere with
its performance under this Agreement or any other agreement or document executed
or to be executed pursuant to this Agreement, or otherwise has, individually or
in the aggregate, resulted in a Material Adverse Effect.

3.11. Title; Leased Assets.

a. Real Property. The Partnership does not own
any interest (other than leasehold interests referred to on Schedule 3.11(c)) in
real property. The leased real property referred to on Schedule 3.11(c)
constitutes the only real property necessary for the conduct of the
Partnership's business.

b. Personal Property. Except as set forth on
Schedule 3.11(b), the Partnership and/or the Partners have good, valid and
marketable title to all the personal property constituting the Non-optical
Assets. The personal property constituting the Non-optical Assets constitute the
only personal property necessary for the conduct of the Partnership's business
(except for the Optical Assets). Upon consummation of the transactions
contemplated hereby, such interest in the Non-optical Assets shall be free and
clear of all security interests, liens, claims and encumbrances, other than
those set forth on Schedule 3.11(b) (the "Permitted Encumbrances") and statutory
liens arising in the ordinary course of business or other liens that do not
materially detract from the value or interfere with the use of such properties
or assets.

c. Leases. A list and brief description of (i)
all Real Property Leases, and (ii) Personal Property Leases involving rental
payments within any twelve (12) month period in excess of $12,000, in either
case to which the Partnership is a party, either as lessor or lessee, are set
forth on Schedule 3.11(c). All such leases are valid and, to the knowledge of
the Partnership, enforceable 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.

- 18 -

<PAGE> 19

3.12. Commitments.

a. Commitments; Defaults. Except as set forth
on Schedule 3.12 or as otherwise disclosed pursuant to this Agreement, the
Partnership is not a party to nor bound by, nor are the Non-optical Assets or
the business of the Partnership bound by, whether or not in writing, any of the
following (collectively, "Commitments"):

i) partnership or joint venture
agreement;

ii) guaranty or suretyship,
indemnification or contribution agreement or performance bond;

iii) debt instrument, loan agreement or
other obligation relating to indebtedness for borrowed money or money lent or to
be lent to another;

iv) contract to purchase real property;

v) agreement with dealers or sales or
commission agents, public relations or advertising agencies, accountants or
attorneys (other than in connection with this Agreement and the transactions
contemplated hereby) involving total payments within any twelve (12) month
period in excess of $2,000 and which is not terminable on thirty (30) days'
notice or without penalty;

vi) agreement relating to any material
matter or transaction in which an interest is held by a person or entity that is
an Affiliate of the Partnership or any of the Partners;

vii) agreement for the acquisition of
services, supplies, equipment, inventory, fixtures or other property involving
more than $2,000 in the aggregate;

viii) powers of attorney;

ix) contracts containing non-competition
covenants;

x) agreement providing for the purchase
from a supplier of all substantially all of the requirements of the Partnership
of a particular product or services;

xi) agreements with Payors and contracts
to provide optical services and products; or

xii) any other agreement or commitment
not made in the ordinary course of business or that is material to the business,
operations, condition (financial or otherwise) or results of operations of the
Partnership.

- 19 -

<PAGE> 20

True, correct and complete copies of the written Commitments, and true, correct
and complete written descriptions of the oral Commitments, have heretofore been
delivered or made available to Vision 21. Except as set forth on Schedule 3.12
and to the Partnership's best knowledge, there are no existing or asserted
defaults, events of default or events, occurrences, acts or omissions that, with
the giving of notice or lapse of time or both, would constitute defaults by the
Partnership or, to the best knowledge of the Partnership, any other party to a
material Commitment, and no penalties have been incurred nor are amendments
pending, with respect to the material Commitments, except as described on
Schedule 3.12. The Commitments are in full force and effect and are valid and
enforceable obligations of the Partnership, and to the best knowledge of the
Partnership, are valid and enforceable obligations of the other parties thereto,
in accordance with their respective terms, and no defenses, off-sets or
counterclaims have been asserted or, to the best knowledge of the Partnership,
may be made by any party thereto (other than the Partnership), nor has the
Partnership waived any rights thereunder, except as described on Schedule 3.12.
Except as set forth on Schedule 3.12, no consents or approvals are required
under the terms of any agreement listed on Schedule 3.12 in connection with the
transactions contemplated herein, including, without limitation, the transfer of
any such agreement pursuant to this Agreement.

b. No Cancellation or Termination of
Commitment. Except as disclosed pursuant to this Agreement or contemplated
hereby and except where such default would not have a Material Adverse Effect on
the Optical Business, (i) neither the Partnership nor any of the Partners has
received notice of any plan or intention of any other party to any Commitment to
exercise any right to cancel or terminate any Commitment, and the Partnership
does not know of any fact that would justify the exercise of such a right; and
(ii) neither the Partnership nor any of the Partners currently contemplates, or
has reason to believe any other person currently contemplates, any amendment or
change to any Commitment.

3.13. Insurance. The Partnership carries property,
liability, malpractice, workers' compensation and such other types of insurance
pursuant to the insurance policies listed and briefly described on Schedule 3.13
(the "Insurance Policies"). The Insurance Policies are all of the insurance
policies of the Partnership relating to the business of the Partnership and the
Non-optical Assets. All of the Insurance Policies are issued by insurers of
recognized responsibility, and, to the best knowledge of the Partnership, are
valid and enforceable policies, except as may be limited by applicable
bankruptcy, insolvency or similar laws affecting creditors' rights generally or
the availability of equitable remedies. Except as set forth in Schedule 3.13,
no consent or approval is required for, and no other impediment or restriction
exists that will prohibit or limit, the transfer of any such Insurance Policies
included within the Non-optical Assets in accordance with the terms of this
Agreement. All Insurance Policies shall be maintained in force without
interruption up to and including the Closing Date. True, complete and correct
copies of all Insurance Policies have been provided or made available to Vision
21. Except as set forth on Schedule 3.13, neither the Partnership nor any of the
Partners has received any notice or other communication from any issuer of any
Insurance Policy canceling such policy, materially increasing any deductibles or
retained amounts thereunder, and to the actual

- 20 -

<PAGE> 21

knowledge of the Partnership, no such cancellation or increase of deductibles,
retainages or premiums is threatened. Except as set forth on Schedule 3.13, the
Partnership does not have any outstanding claims, settlements or premiums owed
against any Insurance Policy, and the Partnership has given all notices or has
presented all potential or actual claims under any Insurance Policy in due and
timely fashion. Schedule 3.13 also sets forth a list of all claims under any
Insurance Policy in excess of $10,000 per occurrence filed by the Partnership
since January 1, 1994.

3.14. Proprietary Rights and Information. Set forth on
Schedule 3.14 is a true and correct description of the following ("Proprietary
Rights"):

a. all trademarks, trade-names, service marks
and other trade designations, including common law rights, registrations and
applications therefor, and all patents and applications therefor currently
owned, in whole or in part, by the Partnership, and all licenses, royalties,
assignments and other similar agreements relating to the foregoing to which the
Partnership is a party (including the expiration date thereof if applicable);
and

b. all agreements relating to technology,
know-how or processes that the Partnership is licensed or authorized to use by
others (other than technology, know-how or processes generally available to
other organizations engaged in an Optical Business), or which it licenses or
authorizes others to use.

The Partnership owns or has the legal right to use the Proprietary Rights, and
to the knowledge of the Partnership, such ownership or use does not conflict,
infringe or violate the rights of any other person. Except as disclosed on
Schedule 3.14, no consent of any person will be required for the use thereof by
Vision 21 upon consummation of the transactions contemplated hereby and the
Proprietary Rights are freely transferable. No claim has been asserted by any
person to the ownership of or for infringement by the Partnership of the
proprietary right of any other person, and the Partnership does not know of any
valid basis for any such claim. To the best knowledge of the Partnership and the
Partners, the Partnership has the right to use, free and clear of any adverse
claims or rights of others, all trade secrets, customer lists and proprietary
information required for the marketing of all merchandise and services formerly
or presently sold or marketed by it.

3.15. Taxes.

a. Filing of Tax Returns. The Partnership has
duly and timely filed (in accordance with any extensions duly granted by the
appropriate governmental agency, if applicable) with the appropriate
governmental agencies all federal, state, local or foreign income, excise,
partnership, franchise, property, sales, use, payroll, withholding, provider,
value added and other tax returns and reports (collectively the "Tax Returns")
required to be filed by the United States or any state or any political
subdivision thereof or any foreign jurisdiction. All such Tax

- 21 -

<PAGE> 22

Returns or reports are complete and accurate in all material respects and
properly reflect the taxes of the Partnership for the periods covered thereby.

b. Payment of Taxes. Except for such items as
the Partnership may be disputing in good faith by proceedings in compliance with
applicable law, which are described on Schedule 3.15, (i) the Partnership has
paid all taxes, penalties, assessments and interest that have become due with
respect to any Tax Returns that it has filed and has properly accrued on its
books and records for all of the same that have not yet become due, and (ii) the
Partnership is not delinquent in the payment of any tax, assessment or
governmental charge.

c. No Pending Deficiencies, Delinquencies,
Assessments or Audits. Except as set forth on Schedule 3.15, the Partnership has
not received any notice that any tax deficiency or delinquency has been asserted
against the Partnership. There is no unpaid assessment, proposal for additional
taxes, deficiency or delinquency in the payment of any of the taxes of the
Partnership that could be asserted by any taxing authority. There is no taxing
authority audit of the Partnership pending, or to the actual knowledge of the
Partnership, threatened, and the results of any completed audits are properly
reflected in the Financial Statements. The Partnership has not, to its best
knowledge, violated any federal, state, local or foreign tax law.

d. No Extension of Limitation Period. The
Partnership has not granted an extension to any taxing authority of the
limitation period during which any tax liability may be assessed or collected.

e. All Withholding Requirements Satisfied. All
monies required to be withheld by the Partnership and paid to governmental
agencies for all income, social security, unemployment insurance, sales, excise,
use, and other taxes have been collected or withheld and paid to the respective
governmental agencies.

f. Foreign Person. None of the Partnership or
any of the Partners is a foreign person, as such term is referred to in Section
1445(f)(3) of the Code.

3.16. Compliance with Laws. The Partnership has complied
with all applicable laws, regulations and licensing requirements relating to the
operation of the Partnership and has filed with the proper authorities all
necessary statements and reports, except where the failure to so comply or file
would not, individually or in the aggregate, result in a Material Adverse
Effect. There are no existing violations by the Partnership, and neither the
Partnership nor any of the Partners is aware of any existing violations by any
of the Partners of any federal, state or local law or regulation that could,
individually or in the aggregate, result in a Material Adverse Effect. The
Partnership and the Partners possess all necessary licenses, franchises, permits
and governmental authorizations for the conduct of the Partnership's business as
now conducted, all of which are listed (with expiration dates, if applicable) on
Schedule 3.16. Except as set forth on Schedule 3.16, the transactions
contemplated by this Agreement will not result in a default

- 22 -

<PAGE> 23

under or a breach or violation of, or adversely affect the rights and benefits
afforded by any such licenses, franchises, permits or government authorizations,
except for any such default, breach or violation that would not, individually or
in the aggregate, have a Material Adverse Effect. Except as set forth on
Schedule 3.16, since January 1, 1993, the Partnership has not received any
notice from any federal, state or other governmental authority or agency having
jurisdiction over its properties or activities, or any insurance or inspection
body, that its operations or any of its properties, facilities, equipment, or
business practices fail to comply with any applicable law, ordinance,
regulation, building or zoning law, or requirement of any public or quasi-public
authority or body, except where failure to so comply would not, individually or
in the aggregate, have a Material Adverse Effect.

3.17. Finder's Fee. Except as set forth on Schedule 3.17,
the Partnership has not incurred any obligation for any finder's, broker's or
agent's fee in connection with the transactions contemplated hereby.

3.18. Litigation. Except as described on Schedule 3.18 or
otherwise disclosed pursuant to this Agreement, there are no legal actions or
administrative proceedings or investigations instituted, to the actual knowledge
of the Partnership or any of the Partners, which affect or could affect the
Non-optical Assets or the operation, business, condition (financial or
otherwise), or results of operations of the Partnership which (i) if successful
could, individually or in the aggregate, have a Material Adverse Effect or (ii)
could adversely affect the ability of the Partnership or the Partners to effect
the transactions contemplated hereby. None of the Partnership or the Partners
are (a) subject to any continuing court or administrative order, judgment, writ,
injunction or decree applicable specifically to the Non-optical Assets, the
Partnership or to its business, assets, operations or employees or (b) in
default with respect to any such order, judgment, writ, injunction or decree.
The Partnership has no knowledge of any valid basis for any such action,
proceeding or investigation. Except as set forth on Schedule 3.18, all medical
malpractice claims asserted, general liability incidents and incident reports
have been submitted to the Partnership's insurer therefor. All claims made or
threatened against the Partnership in excess of its deductible are covered under
its Insurance Policies.

3.19. Condition of Fixed Assets. All of the fixtures,
structures and equipment reflected in the Financial Statements and used by the
Partnership in its business, are in good condition and repair, subject to normal
wear and tear, and conform in all material respects with all applicable
ordinances, regulations and other laws, and the Partnership has no actual
knowledge of any latent defects therein.

3.20. Banking Relations. Set forth on Schedule 3.20 is a
complete and accurate list of all borrowing and investing arrangements that the
Partnership has with any bank or other financial institution, indicating with
respect to each relationship the type of arrangement maintained (such as
checking account, borrowing arrangements, safe deposit box, etc.) and the person
or persons authorized in respect thereof.

- 23 -

<PAGE> 24

3.21. Ownership Interests of Interested Persons;
Affiliations. Except as set forth on Schedule 3.21, no officer, supervisory
employee or Partner of the Partnership, or their respective spouses, children or
Affiliates, owns directly or indirectly, on an individual or joint basis, any
interest in, has a compensation or other financial arrangement with, or serves
as an officer or director of, any customer or supplier of the Partnership or any
organization that has a material contract or arrangement with the Partnership.
Except as may be disclosed pursuant to this Agreement, neither the Partnership,
nor any of its Partners, officers, employees or consultants, nor any Affiliate
of such person is, or within the last three (3) years was, a party to any
contract, lease, agreement or arrangement, including, but not limited to, any
joint venture or consulting agreement with any physician, hospital, pharmacy,
home health agency, organization engaged in an Optical Business, or other person
which is in a position to make or influence referrals to, or otherwise generate
business for, the Partnership.

3.22. Investments in Competitors. Except as disclosed on
Schedule 3.22 and except for ownership of not more than 1% of any class of
outstanding securities of any company or entity if such class of securities is
publicly traded, none of the Partnership or the Partners owns directly or
indirectly any interests or has any investment in any person that is a
Competitor of the Partnership.

3.23. Environmental Matters.

a. Environmental Laws. To the best knowledge
of the Partnership and the Partners, neither the Partnership nor any of the
Non-optical Assets (including the leased real property described on Schedule
3.11(c)) are currently in violation of, or subject to any existing, pending or,
to the actual knowledge of the Partnership threatened, investigation or inquiry
by any governmental authority or to any remedial obligations under, any federal,
state or local laws or regulations pertaining to health or the environment
("Environmental Laws"), except for any such violations, investigations or
inquiries that would not, individually or in the aggregate, result in a Material
Adverse Effect.

b. Permits. The Partnership is not required to
obtain, and has no knowledge of any reason Vision 21 will be required to obtain,
any permits, licenses or similar authorizations to occupy, operate or use any
buildings, improvements, fixtures and equipment owned or leased by the
Partnership by reason of any Environmental Laws.

c. Superfund List. To the best knowledge of
the Partnership, none of the Non-optical Assets (including the Partnership's
leased real property described on Schedule 3.11(c)) are on any federal or state
"Superfund" list or subject to any environmentally related liens, except such
liens as would not, individually or in the aggregate, result in a Material
Adverse Effect.

- 24 -

<PAGE> 25

3.24. Certain Payments. Neither the Partnership nor any
Partner, officer or employee of the Partnership acting for or on behalf of the
Partnership, has paid or caused to be paid, directly or indirectly, in
connection with the business of the Partnership:

a. to any government or agency thereof or any
agent of any supplier or customer any bribe, kick-back or other similar payment;
or

b. any contribution to any political party or
candidate (other than from personal funds of Partners, officers or employees not
reimbursed by their respective employers or as otherwise permitted by applicable
law).

3.25. Medicare and Medicaid Programs. The Partnership is
qualified for participation in the Medicare and Medicare programs and is party
to agreements for such programs which are in full force and effect with no
events of default having occurred thereunder. The Partnership has timely filed
all claims or other reports required to be filed prior to the Closing Date with
respect to the purchase of services by third-party payors ("Payors"), including
but not limited to Medicare and Medicaid programs, except where the failure to
file would not, individually or in the aggregate, result in a Material Adverse
Effect. All such claims or reports are complete and accurate in all material
respects. The Partnership and the Partners have paid or have properly recorded
on the Financial Statements all actually known and undisputed refunds, discounts
or adjustments which have become due pursuant to such claims, and none of the
Partnership or the Partners has any material liability to any Payor with respect
thereto, except as has been reserved for in the Partnership Balance Sheet. There
are no pending appeals, overpayment determinations, adjustments, challenges,
audits, litigation, or notices of intent to reopen Medicare and/or Medicaid
claims determinations or other reports required to be filed by the Partnership
in order to be paid by a Payor for optical services rendered or optical products
sold. Neither the Partnership, nor any of its Partners, officers, employees or
consultants has been convicted of, or pled guilty or nolo contendere to, patient
abuse or neglect, or any other Medicare or Medicaid program-related offense.
Neither the Partnership, nor its officers, the Partners, or to the best of the
Partnership's knowledge, its employees or consultants, has committed any offense
which may serve as the basis for suspension or exclusion from the Medicare and
Medicaid programs, including but not limited to, defrauding a government
program, loss of a license to provide optical services and sell optical
products, and failure to provide quality care or products.

3.26. Fraud and Abuse. To the best knowledge of the
Partnership and the Partners, the Partnership, and its Partners have not engaged
in any activities which are prohibited under 42 U.S.C. ss.ss. 1320-7, 7a or 7b
or 42 U.S.C. ss.1395nn (subject to the exceptions set forth in such
legislation), or the regulations promulgated thereunder or pursuant to similar
state or local statutes or regulations, or which are prohibited by rules of
professional conduct, including but not limited to the following:

- 25 -

<PAGE> 26

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 a false statement or representation of a material fact for use in
determining rights to any benefit or payment;

c. failure to disclose knowledge by a Medicare
or Medicaid claimant 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 intent to fraudulently secure such benefit or payment;

d. knowingly and willfully offering, paying,
soliciting or receiving any remuneration (including any kickback, bribe, or
rebate), directly or indirectly, overtly or covertly, in cash or in kind (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 Medicaid; and

e. referring a customer for designated optical
services (as defined in 42 U.S.C. ss.1395nn) to or providing designated optical
services to a customer upon a referral from an entity or person with which any
of the Partners or an immediate family member has a financial relationship, and
to which no exception under 42 U.S.C. ss.1395nn applies.

3.27. Payors. Schedule 3.27 sets forth a true, correct and
complete list of the names and addresses of each Payor of the Partnership's
services which accounted for more than 10% of the revenues of the Partnership in
the three (3) previous fiscal years. Except as set forth on Schedule 3.27, the
Partnership has good relations with such Payors and none of such Payors has
notified the Partnership that it intends to discontinue its relationship with
the Partnership or to deny any claims submitted to such Payor for payment.

3.28. Acquisition Proposals. Except for the negotiations,
offers and agreements with Vision 21 and its representatives, the Partnership is
not bound by any proposal or offer with respect to an acquisition, consolidation
or similar transaction involving, or any purchase of all or any significant
portion of the assets or any partnership interests of, the Partnership (any such
proposal or offer being hereinafter referred to as an "Acquisition Proposal").

3.29. Consistent Treatment of Expenses. The Partnership
has, in presenting information concerning the Partnership's expenses to Vision
21 for the purpose of determining the Partnership's value, separated out those
expenses which shall be borne by the Partnership in a manner which is consistent
with the treatment of expenses which shall be the responsibility of the
Partnership pursuant to the Business Management Agreement.

- 26 -

<PAGE> 27

3.30. Accounts Receivable/Payable. The Accounts Receivable
of the Partnership relating to the ownership and operation of the Practice
reflected on the Partnership Balance Sheet, to the extent uncollected on the
date hereof, are, and the accounts receivable of the Partnership relating to the
ownership and operation of the Practice to be reflected on the books of the
Partnership on the Closing Date will be, valid, existing and collectible within
six months from the Closing Date (taking into consideration the allowance for
doubtful accounts set forth in the Financial Statements) using reasonably
diligent collection methods taking into account the size and nature of the
receivable, and represent amounts due for goods sold and delivered or services
performed. There are not, and on the date of Closing there will not be, any
refunds, discounts, set-offs, defenses, counterclaims or other adjustments
payable or assessable with respect to the Accounts Receivable. The Partnership
has collected Accounts Receivable only in the ordinary course and has not
changed collection procedures or methods nor accelerated the pace of such
collection efforts in anticipation of the transactions contemplated in this
Agreement. The Partnership has paid accounts payable in the ordinary course and
has not changed payment procedures or methods nor delayed the timing of such
payments in anticipation of the transactions contemplated in this Agreement.

3.31. Projections. There is no fact, development or
threatened development with respect to the markets, products, services, clients,
patients, facilities, personnel, vendors, suppliers, operations, assets or
prospects of the Practice which are known to the Partnership or the Partners
which would materially adversely affect the projected fiscal year 1997 earnings
of the Partnership disclosed to Vision 21 by the Partners, other than such
conditions as may affect as a whole the economy or the optical industry
generally.

3.32. Tangible Personal Property. Except as set forth on
Schedule 3.32, the Partnership's Tangible Personal Property is in good operating
condition, working order and repair (normal wear and tear excepted) and is fully
suitable for the uses for which it is employed in the conduct of the Practice.

3.33. Leases. With respect to each of the Real Property
Leases and Personal Property Leases, except as set forth on Schedule 3.33:

a. such lease is legal, valid, binding,
enforceable and in full force and effect;

b. such lease will continue to be legal, valid,
binding, enforceable and in full force and effect on identical terms following
the Closing;

c. no party to such lease is in material breach
or default, and no event has occurred that, with notice or lapse of time, would
constitute a material breach or default or permit termination, modification or
acceleration thereunder;

- 27 -

<PAGE> 28

d. no party to such lease has repudiated in
writing any provision thereof;

e. there are no disputes, oral agreements or
forbearance programs in effect as to such lease; and

f. The Partnership has performed and satisfied
in full each material obligation to be performed by the Partnership under such
lease.

3.34. Contract Rights. Except as set forth on Schedule
3.34, each of the Assumed Contracts is valid and enforceable and is in full
force and effect, and there is no material default or existing condition that,
with the giving of notice or the passage of time, would constitute such a
default by any parties thereto. The Partnership has performed and satisfied in
full each material obligation required to be performed by the Partnership under
each Assumed Contract. If services are to be provided to the Partnership under
any of such Assumed Contracts, such services have been and are being performed
satisfactorily and in a timely manner, substantially in accordance with the
terms of such Assumed Contract.

3.35. Prepaid Items. Each of the Prepaid Items may be
transferred to Vision 21 without the necessity of obtaining any consent or
approval.

3.36. Completeness of Assets. The Non-optical Assets
together with the Optical Assets, include all the properties used to conduct the
business of the Partnership as presently conducted.

3.37. Disclosure. To the best of the Partnership's and each
of the Partners' knowledge, no representation, warranty or statement made by the
Partnership or the Partners in this Agreement or any of the exhibits or
schedules hereto, or any agreements, certificates, documents or instruments
delivered or to be delivered to Vision 21 in accordance with this Agreement or
the other documents contemplated herein, 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 contained herein or therein, in light of the
circumstances under which they were made, not misleading. The Partnership and
the Partners do not know of any fact or condition (other than general economic
conditions or legislative or administrative changes in health-care delivery)
which materially adversely affects, or in the future is reasonably likely to
affect, the condition, properties, assets, liabilities, business, operations or
prospects of the Partnership which has not been set forth herein or in the
Schedules provided herewith.

4. REPRESENTATIONS AND WARRANTIES OF THE PARTNERS. Each of the
Partners, jointly and severally, represents and warrants to Vision 21 that the
following are true and correct as of the date hereof, and shall be true and
correct through the Closing Date as if made on that date:

- 28 -

<PAGE> 29

4.1. Validity; Partners' Capacity. This Agreement and each
other agreement contemplated hereby or thereby have been, or will be as of the
Closing Date, duly executed and delivered by the Partner and constitute or will
constitute legal, valid and binding obligations of the Partner, enforceable
against the Partner 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
Partner has legal capacity to enter into and perform this Agreement.

4.2. No Violation. Except as set forth on Schedule 4.2,
neither the execution, delivery or performance of this Agreement, other
agreements of the Partner contemplated hereby or thereby, nor the consummation
of the transactions contemplated hereby or thereby, will (a) conflict with, or
result in a violation or breach of the terms, conditions or provisions of, or
constitute a default under, any agreement, indenture or other instrument under
which the Partner is bound or to which any of his or her property or the
partnership interests of the Partnership are subject, or result in the creation
or imposition of any security interest, lien, charge or encumbrance upon any of
his or her property or the partnership interests of the Partnership, or (b) to
the best knowledge of the Partner, violate or conflict with any judgment,
decree, order, statute, rule or regulation of any court or any public,
governmental or regulatory agency or body.

4.3. Consents. Except as may be required under the
Exchange Act, the Securities Act, the Partnership Law and state securities laws,
or otherwise disclosed pursuant to this Agreement, no consent, authorization,
approval, permit or license of, or filing with, any governmental or public body
or authority, or any other person is required to authorize, or is required in
connection with, the execution, delivery and performance of this Agreement or
the agreements contemplated hereby on the part of the Partners.

4.4. Certain Payments. None of the Partners have paid or
caused to be paid, directly or indirectly, in connection with the business of
the Partnership:

a. to any government or agency thereof or any
agent of any supplier or customer any bribe, kick-back or other similar payment;
or

b. any contribution to any political party or
candidate (other than from personal funds not reimbursed by the Partnership or
as otherwise permitted by applicable law).

4.5. Finder's Fee. Except as set forth on Schedule 4.5,
none of the Partners have incurred any obligation for any finder's, broker's or
agent's fee in connection with the transactions contemplated hereby.

4.6. Ownership of Interested Persons; Affiliations.
Except as set forth on Schedule 4.6, none of the Partners or their respective
spouses, children or Affiliates, owns directly or indirectly, on an individual
or joint basis, any interest in, has a compensation or other financial
arrangement with, or serves as an officer or director of, any customer or
supplier of the

- 29 -

<PAGE> 30

Partnership or any organization that has a material contract or arrangement with
the Partnership. None of the Partners or any of their respective Affiliates is,
or with the last three (3) years was, a party to any contract, lease, agreement
or arrangement, including, but not limited to, any joint venture or consulting
agreement with any physician, hospital, pharmacy, home health agency,
organization engaged in an Optical Business or other person which is in a
position to make or influence referrals to, or otherwise generate business for,
the Partnership.

4.7. Litigation. Except as disclosed on Schedule 4.7,
there are no claims, actions, suits, proceedings (arbitration or otherwise) or
investigations pending or, to the Partners' knowledge, threatened against any of
the Partners at law or at equity in any court or before or by any Governmental
Authority, and, to the Partners' knowledge, there are no, and have not been any,
facts, conditions or incidents that may result in any such actions, suits,
proceedings (arbitration or otherwise) or investigations. Except as set forth on
Schedule 4.7, there have been no disciplinary, revocation or suspension
proceedings or similar types of claims, actions or proceedings, hearings or
investigations against the Partners or the Partnership.

4.8. Permits. To the best of the Partners' knowledge, the
Partners have all permits, licenses, orders and approvals of all Governmental
Authorities necessary to perform the services performed by the Partnership in
connection with the conduct of the Practice. All such permits, licenses, orders
and approvals are in full force and effect and no suspension or cancellation of
any of them is pending or threatened. To the best of the Partners' knowledge,
none of such permits, licenses, orders or approvals will be adversely affected
by the consummation of the transactions contemplated herein.

5. REPRESENTATIONS AND WARRANTIES OF VISION 21. Vision 21
represents and warrants to the Partnership and the Partners that the following
are true and correct as of the date hereof and shall be true and correct as of
the Closing Date; when used in this Section 5, the term "best knowledge" shall
mean the best knowledge of those individuals listed on Schedule 5:

5.1. Organization and Good Standing. Vision 21 is a
corporation duly organized, validly existing and in good standing under the laws
of the State of Florida, with all requisite corporation power and authority to
carry on the business in which it is engaged, to own the properties it owns, to
execute and deliver this Agreement and to consummate the transactions
contemplated hereby. At or prior to Closing, Vision 21 will be qualified to do
business as a foreign corporation in the jurisdictions listed on Schedule 5.1.

5.2. Capitalization. The authorized capital stock of
Vision 21 consists of 50,000,000 shares of Vision 21 Common Stock, of which
5,516,124 shares are issued and outstanding, and 10,000,000 shares of Vision 21
preferred stock, $.001 par value per share ("Preferred Stock"), of which no
shares are issued and outstanding. Immediately prior to the Closing, the
authorized capital stock of Vision 21 will consist of 50,000,000 shares of
Vision 21

- 30 -

<PAGE> 31

Common Stock, of which 5,516,124 shares will be issued and outstanding, and
10,000,000 shares of Vision 21 Preferred Stock, of which no shares will be
issued and outstanding.

5.3. Corporate Records. The copies of the Articles of
Incorporation and Bylaws, and all amendments thereto, of Vision 21 that have
been delivered or made available to the Partnership and the Partners are true,
correct and complete copies thereof, as in effect on the date hereof. The minute
books of Vision 21, copies of which have been delivered or made available to the
Partnership and the Partners, contain accurate minutes of all meetings of, and
accurate consents to all actions taken without meetings by, the Board of
Directors (and any committees thereof) and the stockholders of Vision 21, since
its formation.

5.4. Authorization and Validity. The execution, delivery
and performance by Vision 21 of this Agreement and the other agreements
contemplated hereby, and the consummation of the transactions contemplated
hereby and thereby, have been duly authorized by Vision 21 in accordance with
applicable law and its Articles of Incorporation and Bylaws. This Agreement and
each other agreement contemplated hereby to be executed by Vision 21 have been
or will be as of the Closing Date duly executed and delivered by Vision 21 and
constitute or will constitute legal, valid and binding obligations of Vision 21,
enforceable against Vision 21 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.

5.5. Compliance. The execution and delivery of the
documents contemplated hereunder and the consummation of the transactions
contemplated thereby by Vision 21 shall not (i) violate any provision of Vision
21's organizational documents, (ii) violate any material provision of or result
in the breach of or entitle any party to accelerate (whether after the giving of
notice or lapse of time or both) any material obligation under, any mortgage,
lien, lease, contract, license, instrument or any other agreement to which
Vision 21 is a party, (iii) result in the creation or imposition of any material
lien, charge, pledge, security interest or other material encumbrance upon any
property of Vision 21 or (iv) violate or conflict with any order, award,
judgment or decree or other material restriction or to the best of Vision 21's
knowledge violate or conflict with any law, ordinance or regulation to which
Vision 21 or its property is subject.

5.6. Consents. No consent, approval, order or
authorization of or registration, declaration, or filing with, any Governmental
Authority or other person is required in connection with the execution and
delivery of the documents contemplated herein by Vision 21 or the consummation
by such party of the transactions contemplated thereby, except for those
consents or approvals set forth on Schedule 5.6.

5.7. Finder's Fee. Except as disclosed on Schedule 5.7,
Vision 21 has not incurred any obligation for any finder's, broker's or agent's
fee in connection with the transactions contemplated hereby.

- 31 -

<PAGE> 32

5.8. Capital Stock. The issuance and delivery by Vision
21 of shares of Vision 21 Common Stock in connection with this Agreement have
been duly and validly authorized by all necessary corporate action on the part
of Vision 21 in accordance with applicable law and its Articles of Incorporation
and Bylaws. The shares of Vision 21 Common Stock to be issued in connection with
this Agreement, when issued in accordance with the terms of this Agreement, will
be validly issued, fully paid and nonassessable and will not have been issued in
violation of any preemptive rights, rights of first refusal or similar rights of
any of Vision 21's stockholders, or any federal or state law, including, without
limitation, the registration requirements of applicable federal and state
securities laws.

5.9. Vision 21 Financial Statements. The audited
consolidated balance sheet and related statements of income and cash flows of
Vision 21 for its prior three (3) full fiscal years, and its unaudited interim
balance sheet for the fiscal quarter ended March 31, 1997, and the unaudited
statement of income of Vision 21 for the period then ended (collectively, with
the related notes thereto, the "Vision 21 Financial Statements"): (a) fairly
present the financial condition and results of operations of Vision 21, as of
the dates and for the periods indicated; and (b) have been prepared in
conformity with GAAP (subject to normal year-end adjustments and the absence of
notes for any unaudited interim financial statement), except as otherwise
indicated in the Vision 21 Financial Statements.

5.10. Liabilities and Obligations. Except as disclosed on
Schedule 5.10, the Vision 21 Financial Statements shall reflect all material
liabilities of Vision 21, accrued, contingent or otherwise, that would be
required to be reflected on a balance sheet, or in the notes thereto, prepared
in accordance with GAAP. Except as set forth on Schedule 5.10 or in the Vision
21 Financial Statements, Vision 21 is not liable upon or with respect to, or
obligated in any other way to provide funds in respect of or to guarantee or
assume in any manner, any debt, obligation or dividend of any person,
corporation, association, partnership, joint venture, trust or other entity, and
Vision 21 does not know of any valid basis for the assertion of any other claims
or liabilities of any nature or in any amount.

5.11. Compliance with Laws. Vision 21 has not failed to
comply with any applicable laws, regulations and licensing requirements or
failed to file with the proper authorities any necessary statements and reports
except where the failure to so comply or file would not, individually or in the
aggregate, have a material adverse effect on the Transaction. There are no
existing violations by Vision 21 of any federal, state or local law or
regulation that could, individually or in the aggregate, have a material adverse
effect on the Transaction. Vision 21 possesses all necessary licenses,
franchises, permits and governmental authorizations for the conduct of Vision
21's business as now conducted and after the Closing, as contemplated in this
Agreement. The transactions contemplated by this Agreement will not result in a
default under or a breach or violation of, or adversely affect the rights and
benefits afforded by any such licenses, franchises, permits or government
authorizations, except for any such default, breach or violation that would not,
individually or in the aggregate, have a material adverse effect on the
Transaction. Since January 1, 1993, Vision 21 has not received any notice from
any federal, state

- 32 -

<PAGE> 33

or other governmental authority or agency having jurisdiction over its
properties or activities, or any insurance or inspection body, that its
operations or any of its properties, facilities, equipment, or business
practices fail to comply with any applicable law, ordinance, regulation,
building or zoning law, or requirement of any public or quasi-public authority
or body, except where failure to so comply would not, individually or in the
aggregate, have a material adverse effect on the Transaction.

5.12. Insolvency Proceedings. Vision 21 is not currently
under the jurisdiction of a Federal or state court in a Title 11 or similar case
within the meaning of Section 368(a)(3)(A) of the Code.

5.13. Employment of Partnership's Employees. Vision 21 does
not currently intend to change the existing composition or employment terms of
any of the non-professional personnel which have employment arrangements with
the Partnership on the effective date of this Agreement (except as is necessary
for Vision 21 to employ such individuals pursuant to the Business Management
Agreement). Vision 21 reserves the right, however, to change the number,
composition or employment terms of such non-professional personnel in the
future.

6. SECURITIES LAW MATTERS.

6.1. Investment Representations and Covenants of the
Partners.

a. Each of the Partners understands that the
Securities will not be registered under the Securities Act or any state
securities laws on the grounds that the issuance of the Securities is exempt
from registration pursuant to Section 4(2) of the Securities Act under the
Securities Act and applicable state securities laws, and that the reliance of
Vision 21 on such exemptions is predicated in part on the Partners'
representations, warranties, covenants and acknowledgments set forth in this
Section.

b. Except as disclosed on Schedule 6.1(b)
attached hereto, each of the Partners represents and warrants that such Partner
is an "accredited investor" or "sophisticated investor" as defined under the
Securities Act and state "Blue Sky" laws, or that the Partner has utilized, to
the extent necessary to be deemed a sophisticated investor under the Securities
Act and State "Blue Sky" laws, the assistance of a professional advisor.

c. Each of the Partners represents and warrants
that the Securities to be acquired by such Partner upon consummation of the
transactions described in this Agreement will be acquired by the Partner for the
Partner's own account, not as a nominee or agent, and without a view to resale
or other distribution within the meaning of the Securities Act and the rules and
regulations thereunder, except as contemplated in this Agreement, and that the
Partner will not distribute any of the Securities in violation of the Securities
Act. All Securities shall bear a restrictive legend in substantially the
following form:

- 33 -

<PAGE> 34

In addition, the Securities shall bear any legend required by the
securities or "Blue Sky" laws of any state where the Partners reside as well as
any other legend deemed appropriate by Vision 21 or its counsel.

d. Each of the Partners represents and warrants
that the address set forth below the Partner's name on Schedule 6.1(d) is the
Partner's principal residence.

e. Each of the Partners (i) acknowledges that
the Securities issued to the Partners at the Closing must be held indefinitely
by the Partners unless subsequently registered under the Securities Act or an
exemption from registration is available, (ii) is aware that any routine sales
of Securities made pursuant to Rule 144 under the Securities Act may be made
only in limited amounts and in accordance with the terms and conditions of that
Rule and that in such cases where the Rule is not applicable, compliance with
some other registration exemption will be required, (iii) is aware that Rule 144
is not currently available for use by the Partners for resale of any of the
Securities to be acquired by the Partners upon consummation of the transactions
described in this Agreement, and (iv) acknowledges and agrees that the transfer
of the Securities shall be further restricted by the "lock-up" provisions
contained in the Registration Rights Agreement in the form of Exhibit 12.1(k),
whereby each of the Partners shall be treated as an "affiliate" of Vision 21
under Rule 144.

f. Each of the Partners represents and warrants
to Vision 21 that the Partner, either alone or together with the assistance of
the Partner's own professional advisor, has such knowledge and experience in
financial and business matters such that the Partner is capable of evaluating
the merits and risks of the Partner's investment in any of the Securities to be
acquired by the Partner upon consummation of the transactions described in this
Agreement.

g. Each of the Partners confirms that such
Partner has had the opportunity to ask questions of and receive answers from
Vision 21 concerning the terms and conditions of the Partner's investment in the
Securities, and the Partner has received to the Partner's satisfaction, such
additional information, in addition to that set forth herein, about Vision 21's
operations and the terms and conditions of the offering as the Partner has
requested.

h. In order to ensure compliance with the
provisions of paragraph (c) hereof, the Partners agree that after the Closing
the Partners will not sell or otherwise transfer or dispose of Securities or any
interest therein (unless such shares have been registered under the Securities
Act) without first complying with either of the following conditions, the
expenses and costs of satisfaction of which shall be fully borne and paid for by
the selling Partners:

- 34 -

<PAGE> 35

i) Vision 21 shall have received a
written legal opinion from legal counsel, which opinion and counsel shall be
satisfactory to Vision 21 in the exercise of its reasonable judgment, or a copy
of a "no-action" or interpretive letter of the Securities and Exchange
Commission specifying the nature and circumstances of the proposed transfer and
indicating that the proposed transfer will not be in violation of any of the
registration provisions of the Securities Act and the rules and regulations
promulgated thereunder; or

ii) Vision 21 shall have received an
opinion from its own counsel to the effect that the proposed transfer will not
be in violation of any of the registration provisions of the Securities Act and
the rules and regulations promulgated thereunder.

the Partners also agree that the certificates or instruments representing the
Securities to be issued to the Partners pursuant to this Agreement may contain a
restrictive legend noting the restrictions on transfer described in this Section
and required by federal and applicable state securities laws, and that
appropriate "stop-transfer" instructions will be given to Vision 21's transfer
agent, if any, provided that this Section 6.1(h) shall no longer be applicable
to any Securities following their transfer pursuant to a registration statement
effective under the Securities Act or in compliance with Rule 144 or if the
opinion of counsel referred to above is to the further effect that transfer
restrictions and the legend referred to herein are no longer required in order
to establish compliance with any provisions of the Securities Act.

i. Each of the Partners understands that there
can be no assurance that a Public Offering by Vision 21 will ever occur or if it
does occur that it will be successful.

j. Each of the Partners agrees that he or she
shall be considered an "affiliate" of Vision 21 for purposes of Rule 144 and
agrees to the restrictions and limitations imposed by Rule 144 on affiliates.
the Partners further agrees that he or she shall be considered an affiliate of
Vision 21 for Rule 144 purposes even if he or she does not meet the technical
definition of "affiliate" under Rule 144.

6.2. Current Public Information. At all times following
the registration of any of Vision 21's securities under the Securities Act or
Exchange Act pursuant to which Vision 21 becomes subject to the reporting
requirements of the Exchange Act, Vision 21 shall use commercially reasonable
efforts to comply with the requirements of Rule 144 under the Securities Act, as
such Rule may be amended from time to time (or any similar rule or regulation
hereafter adopted by the SEC) regarding the availability of current public
information to the extent required to enable any holder of shares of Common
Stock to sell such shares without registration under the Securities Act pursuant
to Rule 144 (or any similar rule or regulation).

7. COVENANTS OF THE PARTNERSHIP, THE PARTNERS AND THE PRACTICE.
The Partnership, each of the Partners, and the Practice, jointly and severally,
agree that between the date hereof and the Closing (with respect to the
Partnership's and the Practice's

- 35 -

<PAGE> 36

covenants, each of the Partners agrees to use his or her best efforts to cause
the Partnership and the Practice to perform):

7.1. Consummation of Agreement. The Partnership, each of
the Partners and the Practice shall use their best efforts to cause the
consummation of the transactions contemplated hereby in accordance with their
terms and conditions; provided, however, that this covenant shall not require
the Partnership, the Partners or the Practice to make any expenditures that are
not expressly set forth in this Agreement or otherwise contemplated herein.

7.2. Business Operations. The Partnership shall operate
its business in the ordinary course. The Partnership and each of the Partners
shall use their best efforts to preserve the business of the Partnership intact.
None of the Partnership, the Partners or the Practice shall take any action that
would, individually or in the aggregate, result in a Material Adverse Effect.

7.3. Access. The Partnership and the Partners shall, at
reasonable times during normal business hours and on reasonable notice, permit
Vision 21 and its authorized representatives, including without limitation, the
Accountants, reasonable access to, and make available for inspection, all of the
assets and business of the Partnership, including its employees, customers and
suppliers, and permit Vision 21 and its authorized representatives to inspect
and, at Vision 21's sole cost and expense, make copies of all documents, records
and information with respect to the affairs of the Partnership, including,
without limitation, the Financial Statements, as Vision 21 and its
representatives may request, all for the sole purpose of permitting Vision 21 to
become familiar with the business and assets and liabilities of the Partnership.

7.4. Notification of Certain Matters. The Partnership, the
Partners and the Practice shall promptly inform Vision 21 in writing of (a) any
notice of, or other communication relating to, a default or event that, with
notice or lapse of time or both, would become a default, received by the
Partnership, any of the Partners or the Practice subsequent to the date of this
Agreement and prior to the Closing Date under any Commitment material to the
Partnership's condition (financial or otherwise), operations, assets,
liabilities or business and to which it is subject; or (b) any material adverse
change in the Partnership's condition (financial or otherwise), operations,
assets, liabilities or business.

7.5. Approvals of Third Parties. As soon as practicable
after the date hereof, the Partnership, the Partners and the Practice shall use
all reasonable efforts to secure all necessary approvals and consents of
landlords with respect to the real property described on Schedule 2.2(c) to the
consummation of the transactions contemplated hereby and shall use their best
efforts to secure all necessary approvals and consents of other third parties to
the consummation of the transactions contemplated hereby; provided, however,
that this covenant shall not require the Partnership, the Partners or the
Practice to make any material expenditures that are not expressly set forth in
this Agreement or otherwise contemplated herein.

- 36 -

<PAGE> 37

7.6. Employee Matters. Except as set forth in Schedule
3.8(a) or as otherwise contemplated by this Agreement, the Partnership shall
not, without the prior written approval of Vision 21, except as required by law:

a. increase the cash compensation of any of the
Partners or any employees of the Partnership (other than in the ordinary course
of business and consistent with past practice);

b. adopt, amend or terminate any Compensation
Plan;

c. adopt, amend or terminate any Employment
Agreement;

d. adopt, amend or terminate any Employee
Policies and Procedures;

e. adopt, amend or terminate any Employee
Benefit Plan;

f. take any action that could deplete the
assets of any Employee Benefit Plan, other than payment of benefits in the
ordinary course to participants and beneficiaries;

g. fail to pay any premium or contribution due
or with respect to any Employee Benefit Plan;

h. fail to file any return or report with
respect to any Employee Benefit Plan;

i. institute, settle or dismiss any employment
litigation except as could not, individually or in the aggregate, result in a
Material Adverse Effect;

j. enter into, modify, amend or terminate any
agreement with any union, labor organization or collective bargaining unit; or

k. take or fail to take any action with respect
to any past or present employee of the Partnership that would, individually or
in the aggregate, result in a Material Adverse Effect.

7.7. Contracts. Except with Vision 21's prior written
consent, the Partnership shall not assume or enter into any contract, lease,
license, obligation, indebtedness, commitment, purchase or sale except in the
ordinary course of business that is material to the Partnership's business, nor
will it waive any material right or cancel any material contract, debt or claim.

7.8. Capital Assets; Payments of Liabilities. The
Partnership shall not, without the prior written approval of Vision 21 (a)
acquire or dispose of any capital asset having a fair

- 37 -

<PAGE> 38

market value of $5,000 or more, or acquire or dispose of any capital asset
outside of the ordinary course of business or (b) discharge or satisfy any lien
or encumbrance or pay or perform any obligation or liability other than (i)
liabilities and obligations reflected in the Financial Statements or (ii)
current liabilities and obligations incurred in the usual and ordinary course of
business since the Partnership Balance Sheet Date and, in either case (i) or
(ii) above, only as required by the express terms of the agreement or other
instrument pursuant to which the liability or obligation was incurred.

7.9. Mortgages, Liens and Guaranties. The Partnership
shall not, without the prior written approval of Vision 21, enter into or assume
any mortgage, pledge, conditional sale or other title retention agreement,
permit any security interest, lien, encumbrance or claim of any kind to attach
to any of its assets (other than statutory liens arising in the ordinary course
of business and other liens that do not materially detract from the value or
interfere with the use of such assets), whether now owned or hereafter acquired,
or guarantee or otherwise become contingently liable for any obligation of
another, except obligations arising by reason of endorsement for collection and
other similar transactions in the ordinary course of business, or make any
capital contribution or investment in any person.

7.10. Acquisition Proposals. The Partnership, the Partners
and the Practice agree that from the date of this Agreement through the earlier
of the Closing Date or September 30, 1997, (a) none of the Partners, the
Practice or the Partnership nor any of their respective officers and directors
shall, and the Partners, the Practice and the Partnership shall direct and use
their best efforts to cause the Partnership's and the Practice's respective
employees, agents, and representatives not to, initiate, solicit or encourage,
directly or indirectly, any inquiries or the making or implementation of any
Acquisition Proposal or engage in any negotiations concerning, or provide any
confidential information or data to, or have any discussions with, any person
relating to an Acquisition Proposal, or otherwise facilitate any effort or
attempt to make or implement an Acquisition Proposal; (b) the Partners, the
Practice and the Partnership will immediately cease and cause to be terminated
any existing activities, discussions or negotiations with any parties conducted
heretofore with respect to any of the foregoing and each will take the necessary
steps to inform the individuals or entities referred to in the first sentence
hereof of the obligations undertaken in this Section 7.10; and (c) the Partners,
the Practice and the Partnership will notify Vision 21 immediately if any such
inquiries or proposals are received by, any such information is requested from,
or any such negotiations or discussions are sought to be initiated or continued
with, the Partnership, the Practice or the Partners.

7.11. Distributions and Repurchases. No distribution or
payment of any kind will be declared or paid by the Partnership with respect to
its partnership interests.

7.12. Requirements to Effect the Transaction. The
Partnership, the Practice and each of the Partners shall use their best efforts
to take, or cause to be taken, all actions necessary to effect the Transaction
under applicable law.

- 38 -

<PAGE> 39

7.13. Termination of Retirement Plans. Prior to Closing,
the Partners shall cause the Partnership to take all steps necessary to
discontinue benefits accruals under any Employee Benefit Plan that is intended
to be a qualified employee retirement plan under Section 401(a) of the Code (a
"Retirement Plan") effective as of Closing or as soon thereafter as may be
practical. Effective at the Closing Date, the Partnership shall cause the
Practice to assume all of the obligations of the Partnership as the sponsoring
employer and/or plan administrator of the Retirement Plan in compliance with
applicable law.

Subsequent to Closing, the Partnership and Vision 21 shall
review the extent to which the Practice can resume contributions to the
Retirement Plan without violating the qualification requirements of Sections
410(b) and 401(a)(4) of the Code, taking into account any employees of Vision 21
who would be "leased employees" of the Practice under Section 414(n) of the
Code. If Vision 21 and the Practice mutually agree that such qualification
requirements can be satisfied, the Practice may elect to continue the Retirement
Plan and make contributions in accordance with its terms, provided that the
Practice shall agree to cover at its own expense any Vision 21 employees who are
leased employees if such coverage is required to maintain the tax-qualified
status of the Retirement Plan.

7.14. Delivery of Schedules. The Partnership, the Practice
and each of the Partners shall deliver to Vision 21 all Schedules required to be
delivered by them prior to the Closing.

8. COVENANTS OF VISION 21. Vision 21 agrees that between the
date hereof and the Closing:

8.1. Consummation of Agreement. Vision 21 shall use its
best efforts to cause the consummation of the transactions contemplated hereby
in accordance with their terms and conditions and take all corporate and other
actions necessary to approve the Transaction; provided, however, that this
covenant shall not require Vision 21 to make any expenditures that are not
expressly set forth in this Agreement or otherwise contemplated herein.

8.2. Notification of Certain Matters. Vision 21 shall
promptly inform the Partnership and the Partners in writing of (a) any notice
of, or other communication relating to, a default or event that, with notice or
lapse of time or both, would become a default, received by Vision 21 subsequent
to the date of this Agreement and prior to the Closing Date under any Vision 21
Commitment material to Vision 21's condition (financial or otherwise),
operations, assets, liabilities or business and to which it is subject; or (b)
any material adverse change in Vision 21's condition (financial or otherwise),
operations, assets, liabilities or business.

8.3. Licenses and Permits. Vision 21 shall use its best
efforts to obtain all licenses, permits, approvals or other authorizations
required under any law, statute, rule, regulation or ordinance, or otherwise
necessary or desirable to consummate the Transaction and to conduct the intended
business of Vision 21.

- 39 -

<PAGE> 40

8.4. Release of the Partners From Partnership Liabilities.
Vision 21 shall use its best efforts to obtain from third party creditors the
release of the Partners from any personal liabilities relating to the
Partnership which are identified on Schedule 8.4 and assumed by Vision 21
pursuant to the terms of this Agreement.

9. COVENANTS OF VISION 21, THE PARTNERSHIP, THE PRACTICE AND THE
PARTNERS. Vision 21, the Partnership, the Practice and the Partners agree as
follows:

9.1. Amendment of Schedules. Each party hereto agrees
that, with respect to the representations and warranties of such party contained
in this Agreement, such party shall have the continuing obligation until the
Closing to attach, supplement or amend promptly the Schedules with respect to
any matter that would have been or would be required to be set forth or
described in the Schedules in order to not materially breach any representation,
warranty or covenant of such party contained herein; provided that no amendment
or supplement to a Schedule that constitutes or reflects a material adverse
change to the Partnership or the Non-optical Assets may be made unless Vision 21
consents to such amendment or supplement, and no amendment or supplement to a
Schedule that constitutes or reflects a material adverse change to Vision 21 may
be made unless the Partnership and a majority of the Partners consent to such
amendment or supplement. For all purposes of this Agreement, including without
limitation for purposes of determining whether the conditions set forth in
Sections 10.1 and 11.1 have been fulfilled, the Schedules hereto shall be deemed
to be the Schedules as amended or supplemented pursuant to this Section 9.1. In
the event that the Partnership is required to amend or supplement a Schedule in
accordance with this Section 9.1 and Vision 21 does not consent to such
amendment or supplement, or Vision 21 is required to amend or supplement a
Schedule in accordance with this Section 9.1 and the Partnership and a majority
of the Partners do not consent, this Agreement shall be deemed terminated by
mutual consent as set forth in Section 15.1(d) or Section 15.1(e) as
appropriate.

9.2. Fees and Expenses.

a. If the Transaction is consummated, Vision 21
shall pay all costs of the Audit of the Partnership's Financial Statements and
financial records by Vision 21's auditors (or auditors designated by Vision 21's
auditors). All items prepared by Vision 21's auditors in connection with the
Audit ("Prepared Audit Materials") shall be for use solely by Vision 21;
provided, however, that the Partnership may utilize the Prepared Audit Materials
solely in connection with its review of Vision 21's calculation of the Purchase
Price. The Prepared Audit Materials shall not be deemed to include those items
which customarily remain the property of auditors such as their working papers
and memos.

b. In the event the Transaction is not
consummated, the Partnership shall pay for or reimburse Vision 21 for one-half
(1/2) of all expenses of Vision 21's auditors in connection with the Audit.
Neither the Partnership nor the Partners shall be entitled to copies or
originals of the Prepared Audit Materials unless the Partnership or the Partners
pay for or

- 40 -

<PAGE> 41

reimburse Vision 21 for one-half (1/2) of the expenses of the auditor in
connection with the Audit in advance of receiving the Prepared Audit Materials
(either from Vision 21 or its auditor). For purposes of this Agreement, Audit
expenses shall include all expenses related to the Audit as well as expenses
incurred to present the financial statements in accordance with GAAP and all
schedules related thereto.

c. Each of the Partnership and Vision 21 shall
pay the costs and expenses of their own legal counsel with respect to legal
services rendered in connection with the preparation and negotiation of this
Agreement and the transactions contemplated hereby.

10.1. Representations and Warranties. The representations
and warranties of the Partnership, the Practice and the Partners contained
herein shall have been true and correct in all material respects when initially
made and shall be true and correct in all material respects as of the Closing
Date.

10.2. Covenants. The Partnership, the Practice and the
Partners shall have performed and complied in all material respects with all
covenants required by this Agreement to be performed and complied with by the
Partnership, the Practice or the Partners prior to the Closing Date.

10.3. Legal Opinion. Counsel to the Partnership, the
Practice and the Partners shall have delivered to Vision 21 their opinion(s),
dated as of the Closing Date, in form and substance substantially similar to
Exhibit 10.3 which Vision 21, Vision 21's counsel, the underwriters of any
Public Offering and their counsel shall be permitted to rely upon.

10.4. Proceedings. No action, proceeding or order by any
court or governmental body or agency shall have been threatened orally or in
writing, asserted, instituted or entered to restrain or prohibit the carrying
out of the transactions contemplated hereby.

10.5. No Material Adverse Change. No material adverse
change in the condition (financial or otherwise), operations, assets,
liabilities or business of the Partnership shall have occurred since the
Partnership Balance Sheet Date, whether or not such change shall have been
caused by the deliberate act or omission of the Partnership, the Practice or the
Partners.

10.6. Government Approvals and Required Consents. The
Partnership, the Practice, the Partners and Vision 21 shall have obtained all
necessary government and other third-party approvals and consents (other than
consents technically required as a result of the transactions contemplated
hereby under the terms of managed care contracts to which the Partnership or any
of its Partners or employees are a party).

- 41 -

<PAGE> 42

10.7. Closing Deliveries. Vision 21 shall have received
all documents and agreements, duly executed and delivered in form reasonably
satisfactory to Vision 21, referred to in Section 12.1.

10.8. Due Diligence. Vision 21 shall have completed to its
satisfaction a due diligence review of the Partnership, the Practice and the
Partners.

10.9. Financial Audit. Vision 21 shall have approved in
Vision 21's sole discretion an audit of the Partnership and the Practice which
audit shall have been performed by an accounting firm designated by Vision 21.

10.10. Compliance Audit. At the option of Vision 21, Vision
21 shall have approved in Vision 21's sole discretion an audit of the
Partnership for regulatory compliance.

10.11. Exemption Under State Securities Laws. The transfer
of Vision 21's Securities to the Partnership as contemplated in this Agreement
shall qualify for one or more exemptions from registration under the State's
securities laws. Vision 21 shall pay all filing fees in connection with any
filing required to qualify the transfer of the Securities for such exemption(s).

11. CONDITIONS PRECEDENT OF THE PARTNERSHIP, THE PRACTICE AND THE
PARTNERS. Except as may be waived in writing by the Partnership, the Practice
and the Partners, the obligations of the Partnership, the Practice and the
Partners hereunder are subject to fulfillment at or prior to the Closing Date of
each of the following conditions precedent:

11.1. Representations and Warranties. The representations
and warranties of Vision 21 contained herein shall be true and correct in all
respects when initially made and shall be true and correct in all material
respects as of the Closing Date.

11.2. Covenants. Vision 21 shall have performed and
complied in all material respects with all covenants and conditions required by
this Agreement to be performed and complied with by it prior to the Closing
Date.

11.3. Legal Opinions. Counsel to Vision 21 shall have
delivered to the Partnership, the Practice and the Partners their opinion, dated
as of the Closing Date, in form and substance substantially similar to Exhibit
11.3.

11.4. Proceedings. No action, proceeding or order by any
court or governmental body or agency shall have been threatened in writing,
asserted, instituted or entered to restrain or prohibit the carrying out of the
transactions contemplated hereby.

- 42 -

<PAGE> 43

11.5. Government Approvals and Required Consents. The
Partnership, the Practice, the Partners and Vision 21 shall have obtained all
necessary government and other third-party approvals and consents (other than
consents technically required as a result of the transactions contemplated
hereby under the terms of managed care contracts to which the Partnership or any
of its Partners or employees are a party).

11.6. Closing Deliveries. The Partnership, the Practice
and the Partners shall have received all documents, instruments and agreements,
duly executed and delivered in form reasonably satisfactory to the Partnership
and the Practice, referred to in Section 12.2.

11.7. No Change in Voting or Ownership Control. There
shall have been no changes in the voting or ownership control of Vision 21 from
the date first above written to the Closing Date.

11.8. No Material Adverse Change. No material adverse
change in the condition (financial or otherwise), operations, assets,
liabilities or business of Vision 21 shall have occurred since the end of the
last fiscal period reported in the Vision 21 Financial Statements, whether or
not such change shall have been caused by the deliberate act or omission of
Vision 21.

12. CLOSING DELIVERIES; ESCROW OF DOCUMENTS.

12.1. Deliveries of the Partnership, the Practice and the
Partners. At or prior to June 30, 1997, the Partnership, the Practice and the
Partners shall deliver to Vision 21, c/o Shumaker, Loop & Kendrick, LLP, counsel
to Vision 21, the following, all of which shall be in a form reasonably
satisfactory to Vision 21 and shall be held by Shumaker, Loop & Kendrick, LLP in
escrow pending Closing, pursuant to an escrow agreement or letter in form and
substance mutually acceptable to the parties hereto:

a. copies of resolutions of the Partners of the
Partnership and the Board of Directors of the Practice authorizing (i) the
execution, delivery and performance of this Agreement and all related documents
and agreements, and (ii) the consummation of the Transaction, certified by a
Partner of the Partnership and the Secretary of the Practice as being true and
correct copies of the originals thereof subject to no modifications or
amendments;

b. a certificate of the President of the
Practice, and of the Partners, dated the Closing Date, as to the truth and
correctness of the representations and warranties of the Partnership, the
Practice and the Partners contained herein, on and as of the Closing Date;

c. a certificate of the President of the
Practice, and of the Partners, dated the Closing Date, (i) as to the performance
of and compliance in all material respects by the Partnership, the Practice and
the Partners with all covenants contained herein on and as of the Closing Date
and (ii) certifying that all conditions precedent of the Partnership, the
Practice and the Partners to the Closing have been satisfied;

- 43 -

<PAGE> 44

d. a certificate of the Secretary of the
Practice certifying as to the incumbency of the directors and officers of the
Practice and as to the signatures of such directors and officers who have
executed documents delivered pursuant to the Agreement on behalf of the
Practice;

e. a certificate, dated within ten (10) days
prior to the Closing Date, of the Secretary of State of the state of
incorporation for the Practice establishing that the Practice is in existence,
has paid all franchise or similar taxes, if any, and, if applicable, otherwise
is in good standing to transact business in its state of organization;

f. certificates, dated within ten (10) days
prior to the Closing Date, of the Secretary of State of the states in which the
Partnership and the Practice are qualified to do business, to the effect that
the Partnership and the Practice are qualified to do business and, if
applicable, are in good standing in each of such states;

g. an opinion of counsel to the Partnership,
the Practice and the Partners dated as of the Closing Date, in form and
substance satisfactory to Vision 21, which Vision 21, Vision 21's counsel and
the underwriters of any Public Offering and their counsel are permitted to rely
upon and which shall include an opinion, subject to normal and customary
exceptions that to the best of their knowledge the transactions and arrangements
contemplated by this Agreement are in conformity with State laws, rules and
regulations governing the Optical Business.

h. such appropriate documents of transfer,
including bills of sale, endorsements, assignments, drafts, checks or other
instruments, as to all of the Non-optical Assets and Optical Assets, and any
other appropriate instruments in such reasonable or customary form as shall be
requested by Vision 21 and its counsel;

i. such instruments satisfactory to Vision 21
that all liens, claims, pledges, security interests and other encumbrances on
all of the Non-optical Assets have been released;

j. all authorizations, consents, permits and
licenses referenced in Section 3.5;

k. an executed Registration Rights Agreement
between Vision 21 and the Partnership in substantially the form attached hereto
as Exhibit 12.1 (k) (the "Registration Rights Agreement");

l. a non-foreign affidavit, as such affidavit
is referred to in Section 1445(b)(2) of the Code, of each of the Partners,
signed under a penalty of perjury and dated as of the Closing Date, to the
effect that such Partner is a United States citizen or a resident

- 44 -

<PAGE> 45

alien (and thus not a foreign person) and providing the Partner's United States
taxpayer identification number;

m. an assignment to Vision 21 of each lease for
real property described on Schedule 2.1(c) (the "Lease Assignments"), or if
desired by Vision 21, a new lease or leases between the landlords under such
leases and Vision 21 in form and substance reasonably satisfactory to Vision 21;
and

n. such other instrument or instruments of
transfer prepared by Vision 21 as shall be necessary or appropriate, as Vision
21 or its counsel shall reasonably request, to carry out and effect the purpose
and intent of this Agreement.

12.2. Deliveries of Vision 21. At or prior to June 30,
1997, Vision 21 shall deliver to the Partnership, the Practice and the Partners,
c/o Shumaker, Loop & Kendrick, LLP, counsel to Vision 21, the following, all of
which shall be in a form reasonably satisfactory to the Partnership, the
Practice and a majority of the Partners and shall be held by Shumaker, Loop &
Kendrick, LLP in escrow pending Closing, pursuant to an escrow agreement or
letter in form and substance mutually acceptable to the parties hereto:

a. a copy of the resolutions of the Board of
Directors of Vision 21 authorizing (i) the execution, delivery and performance
of this Agreement, and all related documents and agreements, and (ii) the
consummation of the Transaction, certified by Vision 21's Secretary as being
true and correct copies of the originals thereof subject to no modifications or
amendments;

b. a certificate of an officer of Vision 21
dated the Closing Date as to the truth and correctness of the representations
and warranties of Vision 21 contained herein, on and as of the Closing Date;

c. a certificate of an officer of Vision 21
dated the Closing Date, (i) as to the performance and compliance of Vision 21
with all covenants contained herein on and as of the Closing Date and (ii)
certifying that all conditions precedent of Vision 21 to the Closing have been
satisfied;

d. a certificate, dated within ten (10) days
prior to the Closing Date, of the Secretary of State of the State of Florida
establishing that Vision 21 is in existence, has paid all franchise or similar
taxes, if any, and, if applicable, otherwise is in good standing to transact
business in such state;

e. certificates (or photocopies thereof), dated
within ten (10) days prior to the Closing Date, of the Secretary of State of
each state in which Vision 21 is qualified to do business, to the effect that
Vision 21 is qualified to do business and, if applicable, is in good standing as
a foreign corporation in each of such states;

- 45 -

<PAGE> 46

f. an opinion of Shumaker, Loop & Kendrick,
LLP, counsel to Vision 21, dated as of the Closing Date, pursuant to Section
11.3;

g. the executed Registration Rights Agreement;

h. the executed Lease Assignments; and

i. such other instrument or instruments of
transfer, prepared by the Partnership, the Practice or the Partners as shall be
necessary or appropriate, as the Partnership, the Practice the Partners or their
counsel shall reasonable request, to carry out and effect the purpose and intent
of this Agreement.

12.3. Release of Escrow Materials. Shumaker, Loop &
Kendrick, LLP shall release the agreements, certificates, instruments, documents
and other materials described in Sections 12.1 and 12.2 to the appropriate
parties to effectuate the transactions contemplated in this Agreement only after
all such materials have been delivered by all applicable parties (or the parties
receiving such documents have waived in writing such delivery requirement), the
parties have completed their due diligence, the Audit has been completed, and
each of Vision 21 and the Company shall have sent written notice to Shumaker,
Loop & Kendrick, LLP stating that the conditions to release of the escrowed
documents have been satisfied. In the event that the conditions to the release
of the escrowed documents are not satisfied, and each of Vision 21 and the
Company informs Shumaker, Loop & Kendrick, LLP in writing that such conditions
have not been satisfied, Shumaker, Loop & Kendrick, LLP shall promptly return
the foregoing materials to the parties sending such materials.

13. POST CLOSING MATTERS.

13.1. Further Instruments of Transfer. From and after the
Closing Date, at the request of Vision 21 and at Vision 21's sole cost and
expense, the Partners, the Practice and the Partnership shall deliver any
further instruments of transfer and take all reasonable action as may be
necessary or appropriate to carry out the purpose and intent of this Agreement.

14. REMEDIES.

14.1. Indemnification by the Partnership, the Practice and
the Partners. Subject to the terms and conditions of this Agreement, the
Partnership, the Practice and the Partners, jointly and severally, agree to
indemnify, defend and hold Vision 21 and its directors, officers, members,
managers, employees, agents, attorneys and affiliates harmless from and against
all losses, claims, obligations, demands, assessments, penalties, liabilities,
costs, damages, reasonable attorneys' fees and expenses (collectively,
"Damages") asserted against or incurred by such entities and individuals
(including, but not limited to, any reduction in payments to or revenues of the
Partnership) arising out of or resulting from:

- 46 -

<PAGE> 47

a. a breach of any representation, warranty or
covenant of the Partnership, the Practice or the Partners contained herein or in
any schedule or certificate delivered hereunder;

b. any liability under the Securities Act, the
Exchange Act or any other federal or state "Blue Sky" or securities law or
regulation, at common law or otherwise, (i) arising out of or based upon any
untrue statement or alleged untrue statement of a material fact relating to the
Partners, the Practice or the Partnership, and provided to Vision 21 or its
counsel by the Partnership, the Practice or the Partners, specifically for
inclusion in a registration statement or any prospectus forming a part thereof,
or any amendment thereof or supplement thereto, (ii) arising out of or based
upon any omission or alleged omission to state therein a material fact relating
to the Partners, the Practice or the Partnership required to be stated therein
or necessary to make the statements therein not misleading, and not provided to
Vision 21 or its counsel by the Partnership, the Practice or the Partners,
provided, however, that such indemnity shall not inure to the benefit of Vision
21 to the extent that such untrue statement (or alleged untrue statement) was
made, in, or omission (or alleged omission) occurred in, any preliminary
prospectus, and such information was not so included by Vision 21 and properly
delivered to shareholders of Vision 21 who acquire Vision 21 Common Stock in any
Public Offering;

c. any filings, reports or disclosures made
pursuant to the IRS Voluntary Compliance Resolution Program, if applicable; and

d. any liability arising from any alleged
unlawful sale or offer to sell or transfer any of the Common Stock by the
Partnership or any of the Partners.

14.2. Indemnification by Vision 21. Subject to the terms
and conditions of this Agreement, Vision 21 hereby agrees to indemnify, defend
and hold the Partnership, the Practice and the Partners harmless from and
against all damages asserted against or incurred by it, her or him arising out
of or resulting from:

a. a breach by Vision 21 of any representation,
warranty or covenant of Vision 21 contained therein or in any schedule or
certificate delivered hereunder;

b. any liability under the Securities Act, the
Exchange Act or any other federal or state "Blue Sky" or securities law or
regulation, at common law or otherwise, arising out of or based upon any untrue
statement or alleged untrue statement of a material fact relating to Vision 21,
contained in any preliminary prospectus, registration statement or any
prospectus forming a part thereof, or any amendment thereof or supplement
thereto, arising out of or based upon any omission or alleged omission to state
therein a material fact relating to Vision 21 (including its subsidiaries),
required to be stated therein or necessary to make the statements therein not
misleading; and

- 47 -

<PAGE> 48

c. any filings, reports or disclosures made
pursuant to the IRS Voluntary Compliance Resolution Program, if applicable.

14.3. Conditions of Indemnification. All claims for
indemnification under this Agreement shall be asserted and resolved as follows:

a. A party claiming indemnification under this
Agreement (an "Indemnified Party") shall promptly (and, in any event, at least
ten (10) days prior to the due date for any responsive pleadings, filings or
other documents) (i) notify the party from whom indemnification is sought (the
"Indemnifying Party") of any third-party claim or claims asserted against the
Indemnified Party ("Third Party Claim") that could give rise to a right of
indemnification under this Agreement and (ii) transmit to the Indemnifying Party
a written notice ("Claim Notice") describing in reasonable detail the nature of
the Third Party Claim, a copy of all papers served with respect to such claim
(if any), an estimate of the amount of damages attributable to the Third Party
Claim and the basis of the Indemnified Party's request for indemnification under
this Agreement. Except as set forth in Section 14.6, the failure to promptly
deliver a Claim Notice shall not relieve the Indemnifying Party of its
obligations to the Indemnified Party with respect to the related Third Party
Claim except to the extent that the resulting delay is materially prejudicial to
the defense of such claim. Within thirty (30) days after receipt of any Claim
Notice (the "Election Period"), the Indemnifying Party shall notify the
Indemnified Party (i) whether the Indemnifying Party disputes its potential
liability to the Indemnified Party under this Article 14 with respect to such
Third Party Claim and (ii) whether the Indemnifying Party desires, at the sole
cost and expense of the Indemnifying Party, to defend the Indemnified Party
against such Third Party Claim.

b. If the Indemnifying Party notifies the
Indemnified Party within the Election Period that the Indemnifying Party elects
to assume the defense of the Third Party Claim, then the Indemnifying Party
shall have the right to defend, at its sole cost and expense, such Third Party
Claim by all appropriate proceedings, which proceedings shall be prosecuted
diligently by the Indemnifying Party to a final conclusion or settled at the
discretion of the Indemnifying Party in accordance with this Section 14.3(b).
The Indemnifying Party shall have full control of such defense and proceedings,
including any compromise or settlement thereof. The Indemnified Party is hereby
authorized, at the sole cost and expense of the Indemnifying Party (but only if
the Indemnified Party is entitled to indemnification hereunder), to file, during
the Election Period, any motion, answer or other pleadings that the Indemnified
Party shall deem necessary or appropriate to protect its interests or those of
the Indemnifying Party and not prejudicial to the Indemnifying Party (it being
understood and agreed that if an Indemnified Party takes any such action that is
prejudicial and causes a final adjudication that is adverse to the Indemnifying
Party, the Indemnifying Party shall be relieved of its obligations hereunder
with

- 48 -

<PAGE> 49

respect to such Third Party Claim). If requested by the Indemnifying Party, the
Indemnified Party agrees, at the sole cost and expense of the Indemnifying
Party, to cooperate with the Indemnifying Party and its counsel in contesting
any Third Party Claim that the Indemnifying Party elects to contest, including,
without limitation, the making of any related counterclaim against the person
asserting the Third Party Claim or any cross-complaint against any person. The
Indemnified Party may participate in, but not control, any defense or settlement
of any Third Party Claim controlled by the Indemnifying Party pursuant to
Section 14.3(b) and shall bear its own costs and expenses with respect to such
participation; provided, however, that if the named parties to any such action
(including any impleaded parties) include both the Indemnifying Party and the
Indemnified Party, and the Indemnified Party has been advised by counsel that
there may be one or more legal defenses available to it that are different from
or additional to those available to the Indemnifying Party, then the Indemnified
Party may employ separate counsel at the expense of the Indemnifying Party, and
upon written notification thereof, the Indemnifying Party shall not have the
right to assume the defense of such action on behalf of the Indemnified Party;
provided further that the Indemnifying Party shall not, in connection with any
one such action or separate but substantially similar or related actions in the
same jurisdiction arising out of the same general allegations or circumstances,
be liable for the reasonable fees and expenses of more than one separate firm of
attorneys at any time for the Indemnified Party, which firm shall be designated
in writing by the Indemnified Party.

c. If the Indemnifying Party fails to notify
the Indemnified Party within the Election Period that the Indemnifying Party
elects to defend the Indemnified Party pursuant to Section 14.3(b), or if the
Indemnifying Party elects to defend the Indemnified Party pursuant to Section
14.3(b) but fails diligently and promptly to prosecute or settle the Third Party
Claim, then the Indemnified Party shall have the right to defend, at the sole
cost and expense of the Indemnifying Party (if the Indemnified Party is entitled
to indemnification hereunder), the Third Party Claim by all appropriate
proceedings, which proceedings shall be promptly and vigorously prosecuted by
the Indemnified Party to a final conclusion or settled. The Indemnified Party
shall have full control of such defense and proceedings, provided, however, that
the Indemnified Party may not enter into, without the Indemnifying Party's
consent, which shall not be unreasonably withheld, any compromise or settlement
of such Third Party Claim. Notwithstanding the foregoing, if the Indemnifying
Party has delivered a written notice to the Indemnified Party to the effect that
the Indemnifying Party disputes its potential liability to the Indemnified Party
under this Article 14 and if such dispute is resolved in favor of the
Indemnifying Party, the Indemnifying Party shall not be required to bear the
costs and expenses of the Indemnifying Party's defense pursuant to this Section
or of the Indemnifying Party's participation therein at the Indemnified Party's
request, and the Indemnified Party shall reimburse the Indemnifying Party in
full for all costs and expenses of such litigation. The Indemnifying Party may
participate in, but not control any defense or settlement controlled by the
Indemnified Party pursuant to this Section 14.3(c), and the Indemnifying Party
shall bear its own costs and expenses with respect to such participation;
provided, however, that if the named parties to any such action (including any
impleaded parties) include both the Indemnifying Party and the Indemnified
Party, and the Indemnifying Party has been advised by counsel that there may be
one

- 49 -

<PAGE> 50

or more legal defenses available to the Indemnified Party, then the Indemnifying
Party may employ separate counsel and upon written notification thereof, the
Indemnified Party shall not have the right to assume the defense of such action
on behalf of the Indemnifying Party.

d. In the event any Indemnified Party should
have a claim against any Indemnifying Party hereunder that does not involve a
Third Party Claim, the Indemnified Party shall transmit to the Indemnifying
Party a written notice (the "Indemnity Notice") describing in reasonable detail
the nature of the claim, an estimate of the amount of damages attributable to
such claim and the basis of the Indemnified Party's request for indemnification
under this Agreement. If the Indemnifying Party does not notify the Indemnified
Party within sixty (60) days from its receipt of the Indemnity Notice that the
Indemnifying Party disputes such claim, the claim specified by the Indemnified
Party in the Indemnity Notice shall be deemed a liability of the Indemnifying
Party hereunder. If the Indemnifying Party has timely disputed such claim, as
provided above, such dispute shall be resolved by mediation or arbitration as
provided in Section 17.1 if the parties do not reach a settlement of such
dispute within thirty (30) days after notice of a dispute is given.

e. Payments of all amounts owing by an
Indemnifying Party pursuant to this Article 14 relating to a Third Party Claim
shall be made within thirty (30) days after the latest of (i) the settlement of
such Third Party Claim, (ii) the expiration of the period for appeal of a final
adjudication of such Third Party Claim or (iii) the expiration of the period for
appeal of a final adjudication of the Indemnifying Party's liability to the
Indemnified Party under this Agreement. Payments of all amounts owing by an
Indemnifying Party pursuant to Section 14.3(d) shall be made within thirty (30)
days after the later of (i) the expiration of the sixty (60) day Indemnity
Notice period or (ii) the expiration of the period for appeal, if any, of a
final adjudication or arbitration of the Indemnifying Party's liability to the
Indemnified Party under this Agreement.

14.4. Remedies Not Exclusive. The remedies provided in
this Agreement shall not be exclusive of any other rights or remedies available
to one party against the other, either at law or in equity. This Article 14
regarding indemnification shall survive Closing.

14.5. Costs, Expenses and Legal Fees. Each party hereto
agrees to pay the costs and expenses (including attorneys' fees and expenses)
incurred by the other parties in successfully (a) enforcing any of the terms of
this Agreement, or (b) proving that another party breached any of the terms of
this Agreement.

14.6. Indemnification Limitations. Notwithstanding the
provisions of Sections 14.1 and 14.2, (a) no party shall be required to
indemnify another party with respect to a breach of a representation, warranty
or covenant unless the claim for indemnification is brought within two (2) years
after the Closing Date, except that a claim for indemnification for a breach of
the representations and warranties contained in Sections 3.1, 3.2., 3.3, 3.11,
3.14, 4.3, 5.1, 5.2, 5.3, 5.4, 5.8 and 6.1 may be made at any time, and a claim
for indemnification for a breach of

- 50 -

<PAGE> 51

the representations and warranties contained in Sections 3.9, 3.15, 3.17, 3.18,
3.23, 3.24, 3.25, 3.26, 4.1, 4.4, 4.5, 4.6, 4.7 and 5.7 may be made at any time
within the applicable statute of limitations; (b) indemnification based upon
Sections 14.1(b) through (d) and 14.2(b) through (c) may be made at any time
within the applicable statute of limitations; and (c) the Partners shall not be
required to indemnify Vision 21 pursuant to Section 14.1 unless, and to the
extent that, the aggregate amount of Damages incurred by Vision 21 shall exceed
an amount equal to two percent (2%) of the total Purchase Price; and (c) the
Partners shall not be required to indemnify Vision 21 with respect to a breach
of a representation, warranty or covenant for Damages in excess of the aggregate
Purchase Price received by the Partners (other than pursuant to a requirement to
indemnify Vision 21 under Sections 3.25 or 3.26, or unless the breach involves
an intentional breach or fraud by the Partners or the Partnership which shall be
unlimited).

14.7. Tax Benefits; Insurance Proceeds. The total amount
of any indemnity payments owed by one party to another party to this Agreement
shall be reduced by any correlative tax benefit received by the party to be
indemnified or the net proceeds received by the party to be indemnified with
respect to recovery from third parties or insurance proceeds and such
correlative insurance benefit shall be net of the insurance premium, if any,
that becomes due as a result of such claim.

14.8. Payment of Indemnification Obligation. In the event
that the Partnership or any of the Partners has an indemnification obligation to
Vision 21 hereunder, subject to Vision 21's approval as set forth below, the
Partnership or such Partner may satisfy such obligation by transferring to
Vision 21 such number of shares of Vision 21 Common Stock owned by the
Partnership or the Partner having an aggregate fair market value (which is prior
to an initial Public Offering based upon the valuation given at Closing hereof
or after any Public Offering the fair market value at such time based on the
last reported sale price of Vision 21 Common Stock on a principal national
securities exchange or other exchange on which the Vision 21 Common Stock is
then listed or the last quoted ask price on any over-the-counter market through
which the Vision 21 Common Stock is then quoted on the last trading day
immediately preceding the day on which the Partnership or the Partner transfers
shares of Vision 21 Common Stock to Vision 21 hereunder) equal to the
indemnification obligation, provided that each of the following conditions are
satisfied:

a. The Partnership or the Partner shall
transfer to Vision 21 good, valid and marketable title to the shares of Vision
21 Common Stock, free and clear of all adverse claims, security interests,
liens, claims, proxies, options, stockholders' agreements and encumbrances;

b. The Partnership or the Partner shall make
such representation and warranties as to title to the stock, absences of
security interests, liens, claims, proxies, stockholders' agreements and other
encumbrances and other matters as reasonably requested by Vision 21; and

- 51 -

<PAGE> 52

c. The other terms and conditions of any
transaction contemplated pursuant to this Section and the effects thereof,
including any legal or tax consequences, shall be reasonably satisfactory to
Vision 21.

15. TERMINATION.

15.1. Termination. This Agreement may be terminated and
the Transaction may be abandoned:

a. at any time prior to the Closing Date by
mutual agreement of all parties;

b. at any time prior to the Closing Date by
Vision 21 if any representation or warranty of the Partnership, the Practice or
the Partners contained in this Agreement or in any certificate or other document
executed and delivered by the Partnership, the Practice or any of the Partners
pursuant to this Agreement is or becomes untrue or breached in any material
respect or if the Partnership, the Practice or any of the Partners 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 Date by the
Partnership or the Practice if any representation or warranty of Vision 21
contained in this Agreement is or becomes untrue in any material respect or if
Vision 21 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 or written
notice thereof;

d. at any time prior to the Closing Date by the
Partnership or the Practice in the event of the failure of any of the conditions
precedent set forth in Article 11 of this Agreement;

e. at any time prior to the Closing Date by
Vision 21 in the event of the failure of any of the conditions precedent set
forth in Article 10 of this Agreement;

f. by Vision 21 if at any time prior to the
Closing Date, Vision 21 deems termination to be advisable, provided, however,
that if Vision 21 exercises its right to terminate this Agreement under this
subsection, Vision 21 shall reimburse the Partnership, the Practice and the
Partners for all reasonable attorneys' and accountants' fees incurred by the
Partnership, the Practice and the Partners in connection with this Agreement;
provided that Vision 21 shall only reimburse the Partnership, the Practice and
the Partners up to an aggregate maximum amount of One Hundred Thousand and
No/100 Dollars ($100,000.00) for such fees; or

- 52 -

<PAGE> 53

g. by Vision 21 or the Partnership if the
Transaction shall not have been consummated by September 30, 1997.

15.2. Effect of Termination. In the event this Agreement is
terminated pursuant to Section 15.1, Vision 21, the Practice, the Partnership
and the Partners, shall each be entitled to pursue, exercise and enforce any and
all remedies, rights, powers and privileges available at law or in equity,
subject to the limitations set forth in Section 15.1. In the event of a
termination of this Agreement under the provisions of this Article 15, a party
not then in material breach of this Agreement shall stand fully released and
discharged of any and all obligations under this Agreement.

16. NON-COMPETITION AND CONFIDENTIALITY COVENANTS.

16.1. The Partners, the Practice and Partnership
Non-Competition Covenant.

a. Each of Partners, the Practice and the
Partnership recognize that the covenants of the Partners, the Practice and the
Partnership contained in this Section 16.1 are an essential part of this
Agreement and that, but for the agreement of the Partners, the Practice and the
Partnership to comply with such covenants, Vision 21 would not have entered into
this Agreement. The Partners, the Practice and the Partnership acknowledge and
agree that the Partners', the Practice's and the Partnership's covenants not to
compete are necessary to ensure the continuation of the Management Business (as
defined below) and are necessary to protect the reputation of Vision 21, and
that irreparable and irrevocable harm and damage will be done to Vision 21 if
any of the Partners, the Practice or the Partnership compete with the Management
Business or Vision 21. The Partners, the Practice and the Partnership
accordingly agree that for the periods set forth in the Business Management
Agreement the Partners, the Practice and the Partnership shall not:

i) directly or indirectly, either as
principal, agent, independent contractor, consultant, director, officer,
employee, employer, advisor, stockholder, partner or in any other individual or
representative capacity whatsoever, either for the Partners', the Practice's or
the Partnership's own benefit or for the benefit of any other person or entity
knowingly (A) hire, attempt to hire, contact or solicit with respect to hiring
any employee of Vision 21 (or of any of its direct or indirect subsidiaries) or
(B) induce or otherwise counsel, advise or encourage any employee of Vision 21
(or of any of its direct or indirect subsidiaries) to leave the employment of
Vision 21;

ii) act or serve, directly or
indirectly, as a principal, agent, independent contractor, consultant, director,
officer, employee, employer or advisor or in any other position or capacity with
or for, or acquire a direct or indirect ownership interest in or otherwise
conduct (whether as stockholder, partner, investor, joint venturer, or as owner
of any other type of interest), any Competing Management Business as such term
is defined herein; provided, however, that this clause (ii) shall not prohibit
the Partners, the Practice or the

- 53 -

<PAGE> 54

Partnership from being the owner of up to 1% of any class of outstanding
securities of any company or entity if such class of securities is publicly
traded; or

iii) directly or indirectly, either as
principal, agent, independent, contractor, consultant, director, officer,
employee, employer, advisor, stockholder, partner or in any other individual or
representative capacity whatsoever, either for the Partners', the Practice's or
the Partnership's own benefit or for the benefit of any other person or entity,
call upon or solicit any customers or clients of the Management Business;
provided however, that the Partners may send out a general notice to the
customers or clients of the Management Business announcing the termination of
his or her arrangement with Vision 21 and may advertise in a general manner
without violating this covenant.

b. For the purposes of this Section 16.1, the
following terms shall have the meaning set forth below:

i) "Management Business" shall mean
management and administration of the non-medical aspects of medical,
ophthalmology and optometry practices, and Optical Business entities.

ii) "Competing Management Business"
shall mean an individual, business, corporation, association, firm, undertaking,
company, partnership, joint venture, organization or other entity that either
(A) conducts a business substantially similar to the Management Business within
the State, or (B) provides or sells a service which is the same or substantially
similar to, or otherwise competitive with the services provided by the
Management Business within the State; provided, however, that "Competing
Management Business" shall not include Vision 21, or the Partners' internal
management and administration of the Partners' medical practice or participation
in the management and administration of a physician group in which the Partners
devote a significant amount of time to the practice of medicine.

c. Should any portion of this Section 16.1 be
deemed unenforceable because of the scope, duration or territory encompassed by
the undertakings of the Partners, the Practice or the Partnership hereunder, and
only in such event, then the Partners, the Practice the Partnership and Vision
21 consent and agree to such limitation on scope, duration or territory as may
be finally adjudicated as enforceable by a court of competent jurisdiction after
the exhaustion of all appeals.

d. This covenant shall be construed as an
agreement ancillary to the other provisions of this Agreement, and the existence
of any claim or cause of action of the Partners, the Practice or the Partnership
against Vision 21, whether predicated on this Agreement or otherwise, shall not
constitute a defense to the enforcement by Vision 21 of this covenant; provided,
however, that the Partners, the Practice and the Partnership shall not be bound
by this covenant and shall not be obligated to pay the liquidated damages
contemplated in this Section 16.1 if at the time of a breach of this covenant
the Business Management Agreement has already

- 54 -

<PAGE> 55

been terminated pursuant to Section 6.2(a) thereof. Without limiting other
possible remedies to Vision 21 for breach of this covenant, the Partners, the
Practice and the Partnership agree that injunctive or other equitable relief
will be available to enforce the covenants of this provision, such relief to be
without the necessity of posting a bond, cash or otherwise. The Partners, the
Practice, the Partnership and Vision 21 further expressly acknowledge that the
damages that would result from a violation of this non-competition covenant
would be impossible to predict with any degree of certainty, and agree that
liquidated damages in the aggregate amount of the aggregate consideration
received by the Partnership pursuant to this Agreement is reasonable in light of
the severe harm to the Management Business and Vision 21 which would result in
the event that a violation of this non-competition covenant were to occur. For
purposes of calculation of the liquidated damages contemplated in this Section,
the aggregate consideration received by the Partners and the Partnership
pursuant to this Agreement shall be in those amounts and in such form as set
forth in Schedule 16.1. If the Partners or the Partnership violate this
non-competition covenant, Vision 21 shall, in addition to all other rights and
remedies available at law or equity, be entitled to (a) cancel the number of
shares of Common Stock held by the Partners or the Partnership or, with respect
to shares of Common Stock entitled to be received by the Partners or the
Partnership, terminate its obligation to deliver such number of shares of Common
Stock, and (b) repayment by the Partnership or the Partners to Vision 21 of the
fair market value as described above, of Vision 21 Common Stock sold by the
Partnership or the Partners; but in no event shall Vision 21 be entitled to
offset amounts in excess of the liquidated damages sum pursuant to this Section
16.1. The Partners and the Partnership agree to deliver to Vision 21 the
certificates representing any such shares canceled by Vision 21. Payment and
satisfaction by the Partnership or the Partners shall be made within sixty (60)
days of notification to the Partnership or the Partners by Vision 21 that the
Partnership or the Partners have violated this non-competition covenant.

16.2. The Partners, the Practice and Partnership
Confidentiality Covenant. From the date hereof, each of the Partners, the
Practice and the Partnership shall not, directly or indirectly, use for any
purpose, other than in connection with the performance of the Partners' duties
under the Partners' employment agreements with the Partnership, if any, or
disclose to any third party, any information of Vision 21, the Practice or the
Partnership, as appropriate (whether written or oral), including any business
management or economic studies, patient lists, proprietary forms, proprietary
business or management methods, marketing data, fee schedules, or trade secrets
of Vision 21 or of the Partnership, as applicable, and including the terms and
provisions of this Agreement and any transaction or document executed by the
parties pursuant to this Agreement. Notwithstanding the foregoing, the Partners,
the Practice and the Partnership may disclose information that the Partners, the
Practice or the Partnership can establish (a) is or becomes generally available
to and known by the public or optical community (other than as a result of an
unpermitted disclosure directly or indirectly by the Partners, the Practice or
the Partnership or their respective Affiliates, advisors, or representatives);
(b) is or becomes available to the Partners, the Practice or the Partnership on
a nonconfidential basis from a source other than Vision 21 or its Affiliates,
advisors or representatives, provided that such source is not and was not bound
by a confidentiality agreement with or other obligation of secrecy to Vision 21
or its

- 55 -

<PAGE> 56

Affiliates, advisors or representatives of which the Partners, the Practice or
the Partnership has knowledge; or (c) has already been or is hereafter
independently acquired or developed by the Partners, the Practice or the
Partnership without violating any confidentiality agreement with or other
obligation of secrecy to Vision 21, the Partnership or their respective
Affiliates, advisors or representatives. Without limiting the other possible
remedies to Vision 21 for the breach of this covenant, the Partners, the
Practice and the Partnership agree that injunctive or other equitable relief
shall be available to enforce this covenant, such relief to be without the
necessity of posting a bond, cash or otherwise. The Partners, the Practice and
the Partnership further agree that if any restriction contained in this Section
16.2 is held by any court to be unenforceable or unreasonable, a lesser
restriction shall be enforced in its place and the remaining restrictions
contained herein shall be enforced independently of each other.

16.3. Survival. The parties acknowledge and agree that
this Article 16 shall survive the Closing of the transactions contemplated
herein.

17. DISPUTES.

17.1. Mediation and Arbitration. Any dispute, controversy
or claim (excluding claims arising out of an alleged breach of Article 16 of
this Agreement) arising out of this Agreement, or the breach thereof, that
cannot be settled through negotiation shall be settled (a) first, by the parties
trying in good faith to settle the dispute by mediation under the Commercial
Mediation Rules of the AAA (such mediation session to be held in Tampa, Florida,
if the amount in dispute is equal to or in excess of $200,000 or if the dispute
is solely of a non-monetary nature, and in Mesa, Arizona if the amount in
dispute is lower than $200,000, and in either case to commence within 15 days of
the appointment of the mediator by the AAA), and (b) if the controversy, claim
or dispute cannot be settled by mediation, then by arbitration administered by
the AAA under its Commercial Arbitration Rules (such arbitration to be held in
Tampa, Florida, if the amount in dispute is equal to or in excess of $200,000 or
if the dispute is solely of a non-monetary nature, and in Mesa, Arizona if the
amount in dispute is lower than $200,000, and in either case before a single
arbitrator and to commence within 15 days of the appointment of the arbitrator
by the AAA), and judgment on the award rendered by the arbitrator may be entered
in any court having jurisdiction thereof.

18. MISCELLANEOUS

18.1. Taxes. the Partners, the Practice and the Partnership
shall pay all transfer taxes, sales and other taxes and charges, imposed by the
State, if any, which may become payable in connection with the transactions and
documents contemplated hereunder. Vision 21 shall pay all transfer taxes, sales
and other taxes and charges imposed by the State of Florida, if any, which may
become payable in connection with the transactions and documents contemplated
hereunder.

18.2. Remedies Not Exclusive. No remedy conferred by any
of the specific provisions of this Agreement or any document contemplated by
this Agreement is intended to be

- 56 -

<PAGE> 57

exclusive of any other remedy, and each and every remedy shall be cumulative and
shall be in addition to every other remedy given hereunder or now or hereafter
existing at law or in equity or by statute or otherwise. The election of any one
or more remedies by any party hereto shall not constitute a waiver of the right
to pursue other available remedies.

18.3. Parties Bound. Except to the extent otherwise
expressly provided herein, this Agreement shall be binding upon and inure to the
benefit of the parties hereto and their respective heirs, representatives,
administrators, guardians, successors and assigns; and no other person shall
have any right, benefit or obligation hereunder.

18.4. Notices. All notices, reports, records or other
communications that are required or permitted to be given to the parties under
this Agreement shall be sufficient in all respects if given in writing and
delivered in person, by telecopy, by overnight courier or by registered or
certified mail, postage prepaid, return receipt requested, to the receiving
party at the following address:

If to Vision 21 addressed to:

Vision Twenty-One, Inc.
7209 Bryan Dairy Road
Largo, Florida 34777
Attn: Richard T. Welch, Chief Financial Officer

With copies to:

Shumaker, Loop & Kendrick
Post Office Box 172609
101 E. Kennedy Boulevard, Suite 2800
Tampa, Florida 33672-0609
Facsimile No. (813) 229-1660
Attn: Darrell C. Smith, Esquire

If to the Partnership, the Practice and the Partners addressed to:

Aztec Optical Limited Partnership
220 South 63rd Street
Mesa, Arizona 85206
Attn: Lorin M. Swagel, M.D.

- 57 -

<PAGE> 58

With copies to:

Thomas H. Rutten, Esquire
Suite 300
2198 East Camelback Road
Phoenix, Arizona 84670

or to such other address as such party may have given to the other parties by
notice pursuant to this Section 18.4. Notice shall be deemed given on the date
of delivery, in the case of personal delivery or telecopy, or on the delivery or
refusal date, as specified on the return receipt, in the case of overnight
courier or registered or certified mail.

18.5. Choice of Law. This Agreement shall be construed,
interpreted, and the rights of the parties determined in accordance with, the
laws of the State of Florida except with respect to matters of law concerning
the internal affairs of any corporate or partnership entity which is a party to
or the subject of this Agreement, and as to those matters the law of the state
of incorporation or organization of the respective entity shall govern.

18.6. Entire Agreement; Amendments and Waivers. This
Agreement, together with the documents contemplated by this Agreement and all
Exhibits and Schedules hereto and thereto, constitutes the entire agreement
between the parties pertaining to the subject matter hereof and supersedes all
prior and contemporaneous agreements, understandings, negotiations and
discussions, whether oral or written, of the parties, and there are no
warranties, representations or other agreements between the parties in
connection with the subject matter hereof. No supplement, modification or waiver
of any of the provisions of this Agreement shall be binding unless it shall be
specifically designated to be a supplement, modification or waiver of this
Agreement and shall be executed in writing by the party to be bound thereby. No
waiver of any of the provisions of this Agreement shall be deemed or shall
constitute a waiver of any other provision hereof (whether or not similar), nor
shall such waiver constitute a continuing waiver unless otherwise expressly
provided.

18.7. Confidentiality Agreements. The provisions of any
prior confidentiality agreements and letters of intent between or among Vision
21, the Partnership and the Partners, as amended, shall terminate and cease to
be of any force or effect at and upon the Closing.

18.8. Reformation Clause. It is the intention of the
parties hereto to conform strictly to applicable laws regarding the practice and
regulation of medicine and the regulation of the Optical Business, whether such
laws are now or hereafter in effect, including the laws of the United States of
America, the State or any other applicable jurisdiction, and including any
subsequent revisions to, or judicial interpretations of, those laws, in each
case to the extent they are applicable to this Agreement (the "Applicable
Laws"). Accordingly, if the ownership of any Non-optical Asset by Vision 21
violates any Applicable Law, then the parties hereto agree as

- 58 -

<PAGE> 59

follows: (a) the provisions of this Section 18.8 shall govern and control; (b)
if none of the parties hereto are materially economically disadvantaged, then
any Non-optical Asset, the ownership of which violates any Applicable Law, shall
be deemed to have never been owned by Vision 21; (c) if one or more of the
parties hereto is materially economically disadvantaged, then the parties hereto
agree to negotiate in good faith such changes to the structure and terms of the
transactions provided for in this Agreement as may be necessary to make these
transactions, as restructured, lawful under applicable laws and regulations,
without materially disadvantaging either party; (d) this Agreement shall be
deemed reformed; and (e) the parties to this Agreement shall execute and deliver
all documents or instruments necessary to effect or evidence the provisions of
this Section 18.8.

18.9. Assignment. The Agreement may not be assigned by
operation of law or otherwise except that Vision 21 shall have the right to
assign this Agreement, at any time, to any Affiliate or direct or indirect
wholly-owned subsidiary. In the event of such assignment, Vision 21 shall remain
liable hereunder.

18.10. Attorneys' Fees. Except as otherwise specifically
provided herein, if any action or proceeding is brought by any party with
respect to this Agreement or the other documents contemplated with respect to
the interpretation, enforcement or breach hereof, the prevailing party in such
action shall be entitled to an award of all reasonable costs of litigation or
arbitration, including, without limitation, attorneys' fees, to be paid by the
losing party, in such amounts as may be determined by the court having
jurisdiction of such action or proceeding or by the arbitrators deciding such
action or proceeding.

18.11. Further Assurances. From time to time hereafter and
without further consideration, each of the parties hereto shall execute and
deliver such additional or further instruments of conveyance, assignment and
transfer and take such other actions as any of the other parties hereto may
reasonably request in order to more effectively consummate the transactions
contemplated hereunder or as shall be reasonably necessary or appropriate in
connection with the carrying out of the parties' respective obligations
hereunder for the purposes of this Agreement.

18.12. Announcements and Press Releases. Any press releases
or any other public announcements concerning this Agreement or the transactions
contemplated hereunder shall be approved in advance by Vision 21 and the
Partnership; provided, however, that such approval shall not be unreasonably
withheld and if any party reasonably believes that it has a legal obligation to
make a press release and the consent of the other party cannot be obtained, then
the release may be made without such approval.

18.13. No Tax Representations. Each party acknowledges that
it is relying solely on its advisors to determine the tax consequences of the
transactions contemplated hereunder and that no representation or warranty has
been made by any party as to the tax consequences of such transactions except as
otherwise specifically set forth in this Agreement.

- 59 -

<PAGE> 60

18.14. No Rights as Stockholder. The Partnership and the
Partners shall have no rights as a stockholder with respect to any shares of
Common Stock until the issuance of a stock certificate evidencing such shares.
Except as otherwise provided in the Agreement, no adjustment shall be made for
dividends or distributions or other rights for which the record date is prior to
such date any stock certificate is issued.

18.15. Multiple Counterparts. This Agreement may be
executed in one or more counterparts, each of which shall be deemed an original,
but all of which together shall constitute one and the same instrument.

18.16. Headings. The headings of the several articles and
sections herein are inserted for convenience of reference only and are not
intended to be part of or to affect the meaning or interpretation of this
Agreement.

18.17. Severability. Each article, section and subsection of
this Agreement constitutes a separate and distinct undertaking, covenant or
provision of this Agreement. If any such provision shall finally be determined
to be unlawful, such provision shall be deemed severed from this Agreement, but
every other provision of this Agreement shall remain in full force and effect.

18.18. Form of Transaction. If after the execution hereof,
Vision 21 determines that the sale of the Non-optical Assets of the Partnership
can be better achieved through a different form of transaction without economic
injury to the Partnership, the Practice or the Partners, or delay of the
consummation of the transaction, the Partnership, the Practice and the Partners
shall cooperate in revising the structure of the transaction and shall negotiate
in good faith to so amend this Agreement; provided, that Vision 21 shall
reimburse the Partnership, the Practice and the Partners at Closing for all
reasonable additional expenses incurred by the Partnership, the Practice and the
Partners as a result of such change in form.

- 60 -

<PAGE> 61

IN WITNESS WHEREOF, the parties hereto have duly executed this
Agreement as of the date first written above.

"PARTNERSHIP"

AZTEC OPTICAL LIMITED PARTNERSHIP

By: Swagel-Wootton Eye Center, Ltd.,
its General Partner

By:
- --------------------------------- -----------------------------------
Witness Lorin M. Swagel, M.D., President

- ---------------------------------
Witness

"PRACTICE"

SWAGEL-WOOTTON EYE CENTER, LTD.

By:
- --------------------------------- -----------------------------------
Witness Lorin M. Swagel, M.D., President

- --------------------------------
Witness
"PARTNERS"

SWAGEL-WOOTTON EYE CENTER, LTD.

By:
- --------------------------------- -----------------------------------
Witness Lorin M. Swagel, M.D., President

- ---------------------------------
Witness

- --------------------------------- -----------------------------------
Witness Wendy Wootton, M.D.

- ---------------------------------
Witness

<PAGE> 62

- --------------------------------- -----------------------------------
Witness James C. Wootton, M.D.

- ---------------------------------
Witness

- --------------------------------- -----------------------------------
Witness Lorin M. Swagel, M.D.

- ---------------------------------
Witness

- --------------------------------- -----------------------------------
Witness Daniel T. McGehee, O.D.

- ---------------------------------
Witness

"VISION 21"

VISION TWENTY-ONE, INC.

By:
- --------------------------------- -----------------------------------
Witness Theodore N. Gillette, President

- ---------------------------------
Witness

- 62 -

<PAGE> 1
EXHIBIT 4.10

PRUDENTIAL SECURITIES CREDIT CORPORATION
One Seaport Plaza
New York, New York 10292

As of November 3, 1997

VISION TWENTY-ONE, INC.
7209 Bryan Dairy Road
Largo, Florida 33777

NOTE AND WARRANT PURCHASE AGREEMENT

Gentlemen:

PRUDENTIAL SECURITIES INCORPORATED ("PRUDENTIAL") understands that
VISION TWENTY-ONE, INC., a Florida corporation (the "COMPANY"), has acquired
the business assets of certain optometry clinics, ophthalmology clinics,
optical dispensaries and ambulatory surgical centers (collectively, the
"PRACTICE ACQUISITIONS") for approximately $12,100,000 in aggregate
consideration, consisting of approximately $5,700,000 in cash, 575,328 shares
of the Company's common stock (the "COMMON STOCK"), and promissory notes in
$100,000 aggregate principal amount (excluding any contingent consideration).
It is also Prudential's understanding that the Company has entered into a Stock
Purchase Agreement, dated as of October 31, 1997 (the "ACQUISITION AGREEMENT"),
with BBG-COA, Inc. ("BLOCK") pursuant to which the Company has agreed to
purchase all of the stock of Block for approximately $35,000,000 (the "BLOCK
ACQUISITION"), consisting of approximately $26,400,000 in cash and
approximately 475,397 shares of Common Stock (subject to purchase adjustments
and excluding any contingent consideration). Further, it is Prudential's
understanding that the Practice Acquisitions have closed in escrow and that the
Company expects to consummate the Block Acquisition on or prior to November 30,
1997 (such date on which the Block Acquisition is actually consummated, the
"BLOCK CLOSING DATE").

Prudential further understands that the Company currently expects to
fund the cash portion of the Practice Acquisitions, and other similar
acquisitions, with borrowings under a credit facility provided by certain
financial institutions pursuant to which the Company will have aggregate
borrowing availability of up to $50,000,000 (the "CREDIT FACILITY"). Prudential
has been retained by the Company to act on its behalf in arranging for and
negotiating the terms of the Credit Facility. It is also Prudential's
understanding that the Company currently expects to fund the cash portion of
the Block Acquisition with the net proceeds from the public offering and sale
of approximately 2,800,000 shares of the Common Stock (the "EQUITY OFFERING"),
excluding the underwriter's over-allotment option. Prudential will act as the
lead manager of the Equity Offering.

<PAGE> 2

The Company and Prudential Securities Credit Corporation ("PRUCREDIT")
have entered into a commitment letter, dated October 10, 1997 the ("BRIDGE
COMMITMENT"), pursuant to which PruCredit has advised the Company that
PruCredit has approved a $37,000,000 senior secured credit facility (this
"BRIDGE CREDIT FACILITY"). The proceeds from this Bridge Credit Facility are to
be used to finance the cash portions of the Practice Acquisitions (as well as
other similar acquisitions) and the Block Acquisition, as set forth below. The
Bridge Commitment was executed and accepted by the Company on October 13, 1997.

1. AGREEMENT FOR PURCHASE AND SALE OF NOTES AND WARRANTS. PruCredit
agrees, on the terms and conditions set forth below, to purchase from the
Company, and the Company agrees to sell to PruCredit certain of the Company's
promissory notes and warrants.

(a) From time to time, during the period from the Closing
Date (as defined in Section 10 below) until the Note Termination Date
(as defined below) one or more senior secured notes of the Company, at
par, in an aggregate principal amount not to exceed at any time
outstanding $36,440,000 (such agreement to purchase such notes, as
modified from time to time pursuant to Section 5 below, being
hereinafter referred to as the "NOTE COMMITMENT") as follows:

(i) one or more senior secured notes in an aggregate
principal amount not to exceed $9,746,485, substantially in
the form of Exhibit A-1 hereto (each a "SERIES A NOTE" and
collectively, the "SERIES A NOTES") to fund the cash portion
of the Practice Acquisitions, as well as other similar
acquisitions; and

(ii) one or more notes in an aggregate principal amount
not to exceed $26,693,515, substantially in the form of
Exhibit A-2 hereto (each a "SERIES B NOTE" and collectively,
the "SERIES B NOTES", and together with the Series A Notes,
the "NOTES") to fund the cash portion of the Block Acquisition
solely in the event that the net proceeds from the Equity
Offering have not been received by the Company on or prior to
November 30, 1997 for any reason other than a breach or
default by the Company or failure by the Company to satisfy
any condition under any of the documents relating to the
Equity Offering, including, without limitation, the purchase
agreement relating to the Equity Offering.

The term "SERIES" shall mean either the Series A Notes or the Series B
Notes, as applicable. As used herein, "NOTE TERMINATION DATE" shall
mean the earliest to occur of (i) May 4, 1998, and (ii) the date of
termination of the Note Commitment pursuant to Section 5 or 15 below
or (iii) the date on which the then outstanding principal of the Notes
has been repaid in accordance with the terms hereof and thereof or
prepaid in accordance with Section 7. From and after the Note
Termination Date, PruCredit shall have no further obligation to
purchase Notes hereunder.

<PAGE> 3

(b) On the date of execution hereof, for an aggregate
purchase price of $140,000 a certificate evidencing warrants (each a
"COMMITMENT WARRANT") to purchase 50,000 shares of the Common Stock,
evidenced by a warrant certificate in substantially the form of
Exhibit B hereto.

(c) On the date of any purchase by PruCredit of a Note, for a
purchase price equal to $2.80 per warrant, a certificate evidencing
warrants (each, a "FUNDING WARRANT", and together with the Commitment
Warrants, the "WARRANTS") to purchase the number of shares of common
stock of the Company equal to the product of .004054054 and the sum of
the principal amount of such Note and the aggregate purchase price of
Warrants purchased on such date, provided, however, no fractional
shares shall be issued and the number of shares subject to each
Funding Warrant may be rounded up or down but in no event shall exceed
150,000 shares and shall be evidenced by a warrant certificate in
substantially the form of Exhibit B hereto.

2. PROCEDURES FOR PURCHASE OF NOTES. Each Note shall be purchased by
PruCredit on at least two (2) Business Days' (as defined in Section 9 below)
notice from the Company to PruCredit specifying (i) the date (which shall be
the date of purchase of such Note), (ii) the Series, and (iii) the principal
amount thereof (which shall be at least $500,000). Not later than 11:00 A.M.
(New York City time) on the date of such purchase and upon fulfillment of the
applicable conditions set forth in Sections 10 and 11 below, PruCredit will
make the purchase price of such Note available to the Company in same day funds
at such account as the Company shall designate in the notice from the Company
requesting such purchase. Each notice from the Company to PruCredit requesting
the purchase of a Note shall be irrevocable and binding on the Company.

3. COMMITMENT FEE. In consideration of PruCredit's agreements
hereunder, the Company agrees to pay to PruCredit on the date of the Company's
execution and delivery of this Agreement to PruCredit a commitment fee (the
"COMMITMENT FEE") of $370,000.

4. FUNDING FEE. In consideration of PruCredit's agreements hereunder,
the Company agrees to pay to PruCredit on the date of any purchase by PruCredit
of a Note a funding fee (each, a "FUNDING FEE") of 1.00% of the principal
amount of such Note.

5. REDUCTION OF THE NOTE COMMITMENT. The Company shall have the right,
upon at least two (2) Business Days' notice to PruCredit, to terminate in whole
or reduce in part the unused portion of the Note Commitment applicable to
either Series, provided, that each partial reduction shall be in the amount of
not less than $500,000.

6. INTEREST AND REPAYMENT. The Company shall repay, and shall pay
interest on, the aggregate unpaid principal amount of the Notes purchased by
PruCredit hereunder in accordance

<PAGE> 4

with the terms thereof. Amounts repaid or prepaid (as provided in Section 7)
may not be reborrowed.

7. PREPAYMENTS OF THE NOTES. The Notes must be prepaid by the Company
as specified in Section 7(a) and may, at the Company's option, be prepaid as
specified in Section 7(b).

(a) REQUIRED PREPAYMENTS. The Company shall make the
following prepayments of the Notes:

(i) subject to Section 7(a)(ii), the Company shall
prepay the Notes (or such lesser principal amount as shall
then be outstanding) in the amount of (A) any net proceeds
received by the Company in connection with any direct or
indirect public offering or private placement of the debt or
equity securities of the Company or any affiliate or direct
or indirect subsidiary of the Company (an "OFFERING") by a
financial institution other than Prudential or any of
Prudential's affiliates, or (B) any borrowings under any
credit facility made available to the Company or any
affiliate or indirect or direct subsidiary of the Company by
any financial institution if said credit facility has not
been arranged on behalf of the Company by Prudential or any
of its affiliates, on the date such net proceeds or
borrowings are received by the Company, on a pro rata basis
between the Series A Notes and the Series B Notes, in each
case, at 103.5% of the principal amount so prepaid, plus
accrued and unpaid interest thereon to the prepayment date
with respect to such principal amount; and such principal
amount of the Notes, together with interest thereon to the
prepayment date shall become due on such date;

(ii) notwithstanding anything to the contrary
contained in Section 7(a)(i), the Company shall prepay the
Notes (or such lesser principal amount as shall then be
outstanding) in the amount of (A) any net proceeds received
by the Company in connection with any Offering by Prudential
or any of Prudential's affiliates or (B) any borrowings under
any credit facility (other than this Agreement) arranged on
behalf of the Company or any affiliate or indirect or direct
subsidiary of the Company by Prudential or any of its
affiliates, on the date such net proceeds or borrowings are
received by the Company, on a pro rata basis between the
Series A Notes and the Series B Notes, in each case, at 100%
of the principal amount so prepaid, plus accrued and unpaid
interest thereon to the prepayment date with respect to such
principal amount; and such principal amount of the Notes,
together with interest thereon to the prepayment date shall
become due on such date; and

(iii) other than in the circumstances set forth in
Section 7(a)(i) or 7(a)(ii), in the event of a Change of
Control (as defined below), the Company shall prepay

<PAGE> 5

the entire outstanding principal of the Notes, at 101% of the
principal amount so prepaid, plus accrued and unpaid interest
thereon to the prepayment date with respect to such principal
amount on the date of such Change of Control; and such
principal amount of the Notes, together with interest thereon
to such prepayment date shall become due on such date.

(b) OPTIONAL PREPAYMENTS. The Company may, upon at least five
(5) Business Days' notice to PruCredit stating the proposed date and
principal amount of the prepayment, and if such notice is given, the
Company shall, prepay the principal of the Notes, in whole or in part,
on a pro rata basis between the Series A Notes and the Series B Notes,
in each case at 100% of the principal amount so prepaid, plus accrued
interest to the date of such prepayment on the amount prepaid,
provided, that each partial prepayment shall be in a principal amount
not less than $500,000.

As used herein, "CHANGE OF CONTROL" means the occurrence of any entity, Person
(as defined below, but specifically excluding Theodore N. Gillette and any
trust of which Theodore N. Gillette is the grantor), or group (within the
meaning of Section 13(d)(3) or 14(d)(2) of the Securities Exchange Act of 1934,
as amended (the "EXCHANGE ACT") which theretofore was beneficial owner (as
defined in Rule 13d-3 under the Exchange Act) of less than 20% of the Company's
then outstanding common stock either (x) acquiring shares of common stock of
the Company in a transaction or series of transactions that results in such
entity, Person or group directly or indirectly owning beneficially 20% or more
of the outstanding common stock of the Company, or (y) acquiring, by proxy or
otherwise the right to vote for the election of directors, for any merger,
combination or consolidation of the Company or any of its direct or indirect
subsidiaries, or for any other matter or question, more than 20% of the then
outstanding voting securities of the Company (except where such acquisition is
made by a person or persons appointed by at least a majority of the board of
directors of the Company to act as proxy for any purpose). As used herein,
"PERSON" has the meaning ascribed thereto in Section 14(d) of the Exchange Act.

8. PAYMENTS AND COMPUTATIONS. The Company shall make each payment
hereunder and under the Notes not later than 12:00 noon (New York City time) on
the day when due in U.S. dollars to PruCredit in same day funds in care of Bank
of New York, ABA 021000018, For the Account of Prudential Securities Credit
Corporation, Account Number: GLA 111 569 PPC, or such other address as
PruCredit may from time to time designate in writing to the Company. The
Company hereby authorize PruCredit, if and to the extent payment is not made
when due hereunder or under the Notes, to charge from time to time against any
or all of the Company's accounts with PruCredit any amount so due. All
computations of interest shall be made by PruCredit on the basis of a year of
360 days, for the actual number of days (including the first day but excluding
the last day) occurring in the period for which such interest is payable.

<PAGE> 6

9. PAYMENT ON NON-BUSINESS DAYS. Whenever any payment hereunder or
under any Note shall be stated to be due on a day of the year other than on a
Business Day, such payment shall be made on the next succeeding Business Day,
and such extension of time shall in such case be included in the computation of
payment of interest. As used herein, the term "BUSINESS DAY" means any day of
the year on which dealings are carried on in the London interbank market and
banks are open for business in London and are not required or authorized to
close in New York City.

10. CONDITIONS PRECEDENT TO PURCHASES. PruCredit's obligation to
purchase any Note and any related Warrant is subject to the following
conditions:

(a) CONDITIONS PRECEDENT TO INITIAL PURCHASE OF SERIES A
NOTES AND RELATED WARRANTS. PruCredit's obligation to purchase the
initial Series A Note and the related Warrants is subject to the
conditions precedent that PruCredit shall have received on or before
the date of the initial purchase the following, each dated such date
(the "CLOSING DATE"), which must occur no later than November 14,
1997, in form and substance satisfactory to PruCredit:

(i) a Series A Note, in the principal amount purchased,
duly completed (in accordance with the notice delivered by the
Company under Section 2 above) and executed by the Company,
and in form and substance satisfactory to PruCredit;

(ii) the Commitment Warrant, duly executed by the
Company;

(iii) a Funding Warrant, duly executed by the Company;

(iv) payment of the cash component of the Commitment Fee
and the applicable Funding Fee;

(v) separate security agreements, substantially in the
form of Exhibit C hereto (including the security agreements
referred to in Section 10(b)(iv) and Section 10(c)(vi), the
"SECURITY AGREEMENTS", and together with this Agreement, the
Notes and the Warrants, the "LOAN DOCUMENTS"), duly executed
by each of the Company, Vision 21 of Southern Arizona, Inc.
("VISION 21 OF SOUTHERN ARIZONA"), Vision 21 of Sierra Vista,
Inc. ("VISION 21 OF SIERRA VISTA"), Vision Twenty-One Managed
Eye Care IPA, Inc ("MANAGED EYE CARE"), and together with
Vision 21 of Southern Arizona, Vision 21 of Sierra Vista and
the Company, the "LOAN PARTIES");

(vi) appropriately completed and duly executed financing
statements (Form UCC-1) for filing under the Uniform
Commercial Code of all jurisdictions

<PAGE> 7

as may be necessary in PruCredit's reasonable opinion to
perfect the security interests and liens created by the
Security Agreements;

(vii) certified copies of the resolutions of the
Board of Directors of each Loan Party approving each Loan
Document to which it is, or is to become, a party, and of all
documents evidencing other necessary corporate action and
governmental approvals, if any, with respect to each Loan
Document to which it is, or is to become, a party;

(viii) a certificate of the Secretary or an
Assistant Secretary of each Loan Party certifying the names
and true signatures of the officers authorized to sign each
Loan Document to which it is, or is to become, a party and
the other documents to be delivered hereunder and thereunder;

(ix) true and complete copies, certified by the
Secretary or Assistant Secretary of each Loan Party, of the
articles of incorporation and by-laws of such Loan Party, as
in effect on the Closing Date;

(x) a favorable opinion or opinions of counsel to
the Loan Parties as to such matters as PruCredit may
reasonably request;

(xi) copies of the balance sheet of the Company and
its consolidated subsidiaries as at June 30, 1997 and the
related statement of income and retained earnings for the
nine-month period then ended, certified in a manner
acceptable to PruCredit;

(xii) a schedule of potential acquisitions of
ophthalmological and optometric practices to be made by the
Company during fiscal year 1997;

(xiii) copies of insurance policies or certificates
of insurance of the Loan Parties evidencing liability and
casualty insurance in full force and effect, in such amounts,
covering such risks and liabilities and with such deductibles
or self-insurance retentions as are in accordance with normal
industry practice and naming PruCredit as named insured and
loss payee thereon; and

(xiv) completion of favorable UCC, tax, judgment and
lien search reports with respect to each Loan Party and each
related ophthalmological or optometric practice in all
necessary or appropriate jurisdictions and under all legal
and appropriate trade names indicating that there are no
prior liens on the Collateral (as defined in each Security
Agreement) other than liens permitted by Section 14(c),
provided, however, that, in PruCredit's sole discretion, the
foregoing condition

<PAGE> 8

may be waived with respect to the purchase of up to
$3,419,134 aggregate principal amount of Series A Notes.

(b) CONDITIONS PRECEDENT TO SUBSEQUENT PURCHASES OF SERIES A
NOTES AND RELATED FUNDING WARRANTS. PruCredit's obligation to purchase
any Series A Note and the related Funding Warrants after the Closing
Date is subject to the conditions precedent that PruCredit shall have
received on or before the date of the purchase the following, each
dated such date, in form and substance satisfactory to PruCredit:

(ii) a Funding Warrant, duly executed by the
Company;

(iii) payment of the cash component of the
applicable Funding Fee;

(iv) in the event that the proceeds of such Series A
Note are used to purchase a controlling interest in the stock
or ownership interests in any Person or Persons (each, a
"SERIES A LOAN PARTY"):

(A) a Security Agreement, duly executed by
each such Series A Loan Party;

(B) appropriately completed and duly
executed financing statements (Form UCC-1) for
filing under the Uniform Commercial Code of all
jurisdictions as may be necessary in PruCredit's
reasonable opinion to perfect the security interests
and liens created by each such Security Agreement;

(C) completion of favorable UCC, tax,
judgment and lien search reports with respect to
each such Series A Loan Party and each related
ophthalmological or optometric practice in all
necessary or appropriate jurisdictions and under all
legal and appropriate trade names indicating that
there are no prior liens on the Collateral (as
defined in each such Security Agreement) other than
liens permitted by Section 14(c); and

(D) an opinion of counsel (which counsel
and the form and substance of such opinion shall be
reasonably satisfactory to PruCredit) addressed to
PruCredit relating to each such Series A Loan Party
and the enforceability of its obligations under each
such Security Agreement and

<PAGE> 9

such officer's certificates, financing statements,
lien searches, directors and shareholders
resolutions and other agreements, instruments and
documents as PruCredit may reasonably request. From
and after the date a Series A Loan Party executes a
Security Agreement, such Series A Loan Party shall
be deemed to be a Loan Party hereunder.

(c) CONDITIONS PRECEDENT TO INITIAL PURCHASE OF SERIES B
NOTES AND RELATED FUNDING WARRANTS. PruCredit's obligation to purchase
any Series B Note and the related Funding Warrants is subject to the
conditions set forth in subsection (a) above and the further
conditions precedent that, on or prior to November 30, 1997:

(i) PruCredit shall have received a Series B Note, in
the principal amount purchased, duly completed (in accordance
with the notice delivered by the Company under Section 2
above) and executed by the Company, and in form and substance
satisfactory to PruCredit;

(ii) PruCredit shall have received a Funding Warrant,
duly executed by the Company;

(iii) the Company shall have paid the applicable Funding
Fee;

(iv) the Block Acquisition shall have been consummated;

(v) the net proceeds of the Equity Offering shall not
have been received by the Company on or prior to November
30, 1997 for any reason other than a breach or default by
the Company or failure by the Company to satisfy any
condition under any of the documents relating to the Equity
Offering, including, without limitation, the purchase
agreement relating to the Equity Offering;

(vi) PruCredit shall have received a Security Agreement,
duly executed by Block (the "BLOCK SECURITY AGREEMENT");

(vii) PruCredit shall have received appropriately
completed and duly executed financing statements (Form UCC-1)
for filing under the Uniform Commercial Code of all
jurisdictions as may be necessary in PruCredit's reasonable
opinion to perfect the security interests and liens created by
the Block Security Agreement;

(viii)PruCredit shall have received favorable UCC, tax,
judgment and lien search reports with respect to Block and
each related ophthalmological or optometric practice in all
necessary or appropriate jurisdictions and under all legal

<PAGE> 10

and appropriate trade names indicating that there are no
prior liens on the Collateral (as defined in the Block
Security Agreement) other than liens permitted by Section
14(c); and

(ix) an opinion of counsel (which counsel and the
form and substance of such opinion shall be reasonably
satisfactory to PruCredit) addressed to PruCredit relating to
Block and the enforceability of its obligations under the
Block Security Agreement and such officer's certificates,
financing statements, lien searches, directors and
shareholders resolutions and other agreements, instruments
and documents as PruCredit may reasonably request. From and
after the date Block executes the Block Security Agreement,
Block shall be deemed to be a Loan Party hereunder.

11. CONDITIONS PRECEDENT TO ALL PURCHASES. PruCredit's obligation to
make each purchase (including the initial purchase) of Notes and Warrants
hereunder shall be subject to the further conditions precedent that on the date
of such purchase:

(a) the following statements shall be true and PruCredit shall have
received a certificate signed by the Company's duly authorized officer,
dated the date of such purchase, stating that:

(i) the representations and warranties contained in
Section 12 hereof and Section 4 of each Security Agreement
are correct on and as of the date of such purchase, before
and after giving effect to such purchase and to the
application of the proceeds therefrom, as though made on and
as of such date, and

(ii) no event has occurred and is continuing, or
would result from such purchase or from the application of
the proceeds therefrom, that constitutes an Event of Default
(as defined in Section 15) or would constitute an Event of
Default but for the requirement that notice be given or time
elapse or both; and

(b) PruCredit shall have received such other approvals, opinions or
documents as PruCredit may reasonably request.

12. REPRESENTATIONS AND WARRANTIES OF THE COMPANY. (a) The Company
represents and warrants to PruCredit as follows:

(i) The Company is the 100% owner of the
subsidiaries listed on Schedule 12(a)(i) hereto, and each of
the Company and each of its subsidiaries is duly organized
and validly existing and in good standing under the laws of
the jurisdiction of its incorporation, and each has the
requisite corporate power and

<PAGE> 11

authority to own and operate its properties and carry on its
business as now conducted.

(ii) The execution, delivery and performance by the
Company of each Loan Document to which the Company is, or is
to become, a party are within its corporate powers, have been
duly authorized by all necessary corporate action, and do not
contravene (A) the articles of incorporation or by-laws of
the Company or (B) law or any contractual restriction binding
on or affecting the Company.

(iii) No authorization or approval or other action
by, and no notice to or filing with, any governmental
authority or regulatory body is required for the due
execution, delivery and performance by the Company of any
Loan Document to which the Company is, or is to become, a
party.

(iv) This Agreement is, and each other Loan Document
to which the Company is to become a party, when delivered
hereunder will be, the legal, valid and binding obligation of
the Company enforceable against the Company in accordance
with its terms, subject to applicable bankruptcy, insolvency
and similar laws affecting creditors' rights generally and
subject, as to enforceability, to general principles of
equity (regardless of whether enforcement is sought in a
proceeding in equity or at law).

(v) The audited balance sheets of the Company and
its consolidated subsidiaries as at December 31, 1997, and
the related statements of income and retained earnings for
the fiscal year then ended and the unaudited balance sheets
of the Company and its consolidated subsidiaries as at June
30, 1997, and the related unaudited statements of income and
retained earnings for the nine-month period then ended,
fairly present (subject, in the case of such unaudited
financial statements to year-end adjustments), the financial
condition of the Company and its consolidated subsidiaries as
at such date and the results of operations of the Company and
its consolidated subsidiaries for the period ended on such
date, all in accordance with generally accepted accounting
principles consistently applied. Except as disclosed in such
balance sheet or statements, neither the Company nor any its
consolidated subsidiaries have on the Closing Date material
liabilities, contingent or otherwise, or material unrealized
or anticipated losses. Since December 31, 1996, there has
been no material adverse change in the financial condition or
operations of the Company or on its ability to perform its
obligations under any Loan Document to which the Company is,
or is to become, a party.

(vi) There is no pending or threatened action or
proceeding affecting the Company before any court,
governmental agency or arbitrator that may materially

<PAGE> 12

adversely affect the financial condition or operations of the
Company or which could reasonably be expected to affect the
legality, validity or enforceability of any Loan Document to
which the Company is, or is to become, a party.

(vii) No part of the proceeds of the sale of the
Notes will be used, directly or indirectly, for the purpose
of buying or carrying any margin stock within the meaning of
Regulation G of the Board of Governors of the Federal Reserve
System (12 CFR 207), or for the purpose of buying or carrying
or trading in any securities under such circumstances as to
involve any broker or dealer in a violation of Regulation T
of said Board (12 CFR 220). Margin stock does not constitute
more than 25% of the value of the assets of the Company and
its consolidated subsidiaries.

(viii) The authorized capital stock of the Company
consists of 50,000,000 shares of common stock (the "COMMON
STOCK") and 10,000,000 shares of preferred stock. On the
Closing Date, upon the issuance of the Commitment Warrant and
the Funding Warrant issued on such date pursuant to this
Agreement, and excluding those contingent shares more fully
described on Schedule 12(viii), there will be (A) in the
aggregate 9,187,389 shares of Common Stock outstanding, the
stockholders beneficially owning in excess of 5% of which
being identified on Schedule 12(viii) hereto and no shares of
preferred stock outstanding, and (B) 1,817,292 shares of
Common Stock issuable upon the exercise of options or
warrants, including the Commitment Warrant and the Funding
Warrant issued on the Closing Date, by the parties identified
in Schedule 12(a)(viii) hereto (assuming the maximum number
of shares are issuable under all such warrants). The 200,000
shares of Common Stock issuable upon the exercise of the
Commitment Warrant and the Funding Warrants issued on the
Closing Date have been duly reserved. All outstanding Common
Stock is, and the Common Stock that may be issued upon
exercise of the Commitment Warrants and the Funding Warrants
issued on the Closing Date will be, when so issued, duly
authorized and legally and validly issued, fully-paid and
non-assessable and free and clear of all pledges, liens,
encumbrances, security interests, equities, options, claims,
charges and restrictions, except as provided in such
Warrants, the articles of incorporation and the by-laws of
the Company and except for restrictions imposed by laws
relating to the sale of securities.

(ix) Except (A) those certain warrants issued in
connection with the Amended and Restated Note and Warrant
Purchase Agreement, dated as of June 13, 1997, between the
Company and Prudential, as amended August 15, 1997, (B) those
certain warrants issued in connection with the Company's 10%
Senior Subordinated Notes due December 19, 1999 issued under
the Note Purchase

<PAGE> 13

Agreement, dated December 20, 1996, (C) those certain
warrants issued in connection with the Company's 10% Senior
Subordinated Series 1997 Notes due December 19, 1999 issued
under the Note Purchase Agreement, dated February 27, 1997,
(D) the Commitment Warrants, (E) the Funding Warrants issued
on the Closing Date, (F) the Articles of Incorporation and
the By-Laws, (G) as contemplated by the registration
statement number 333-39031 filed with the Securities and
Exchange Commission in connection with the sale of 2,800,000
shares of Common Stock (excluding the underwriters'
over-allotment option), (H) the issuance of 458,365 shares of
Common Stock and the issuance of 219,633 share of Common
Stock on a contingent basis to the stockholders of Block in
connection with the Block Acquisition, or (I) otherwise set
forth in Schedule 12(a)(viii), there are no outstanding
rights, registration rights, subscriptions, convertible
securities, warrants, calls, puts, unsatisfied preemptive
rights, options, or other agreements of any kind to purchase
or otherwise receive from the Company any securities of the
Company.

(x) All sales of securities by the Company have been
made in compliance with all applicable laws relating to the
sale of securities, and the Company is in compliance with all
such laws except to the extent that any noncompliance could
not reasonably be expected to have a material adverse effect
on the financial condition or operations of the Company or on
its ability to perform its obligations under this Agreement,
the Notes or the Warrants.

(xi) Neither the Company nor anyone acting on its
behalf has offered the Notes or the Warrants for sale to, or
solicited any offer to buy any of the same from, or otherwise
approached or negotiated in respect thereof with, any Person
other than PruCredit. Neither the Company nor anyone acting
on its behalf has taken, or will take, any action that would
subject the issuance or sale of the Notes or the Warrants to
the registration requirements of Section 5 of the Securities
Act of 1933, as amended from time to time (the "SECURITIES
ACT"), other than pursuant to the terms of the Warrants.

(xii) The offer and sale of the Notes and Warrants
to PruCredit is, and the issuance of the Common Stock to
PruCredit upon the exercise of the Warrants will be, exempt
from the registration requirements of the Securities Act, and
in compliance with all applicable state securities laws.

(xiii) Neither any certificate nor any other
statement furnished to PruCredit in writing by or on behalf
of the Company in connection with the transactions
contemplated hereby contains any untrue statement of material
fact or omits to state a material fact necessary in order to
make the statements contained

<PAGE> 14

therein not misleading. There is no fact known to the Company
that materially and adversely affects or in the future may
(so far as the Company can now reasonably foresee) materially
and adversely affect the business, prospects, condition,
affairs or operations of the Company and its subsidiaries,
considered as a whole.

(xiv) Neither the Company nor any of its
subsidiaries is an "investment company" or a company
"controlled" by an "investment company" within the meaning of
the Investment Company Act of 1940, as amended.

(xv) As of and from and after the Closing Date, and
after giving effect to the initial purchase of a Note
hereunder, each Loan Party: (A) owns and will own assets the
fair saleable value of which are (x) greater than the total
amount of its liabilities (including contingent liabilities)
and (y) greater than the amount that will be required to pay
its then existing debts as they become absolute and matured
considering all financing alternatives and potential asset
sales reasonably available to it; (B) has capital that is not
unreasonably small in relation to its business as presently
conducted or undertaken transaction; and (C) does not intend
to incur and does not believe that it will incur debts beyond
its ability to pay such debts as they become due.

(xvi) No event has occurred, which has not been
remedied, cured or waived: (A) which constitutes an Event of
Default or with the passage of time, giving of notice, a
determination of materiality, the satisfaction of any
condition, or any combination of the foregoing, would
constitute, an Event of Default; or (B) which constitutes, or
which with the passage of time, the giving of notice, a
determination of materiality, the satisfaction of any
condition, or any combination of the foregoing, would
constitute, a default or event of default by the Company of
any material agreement (other than this Agreement) or
judgment, decree or order to which the Company or by which
the Company or any of its properties may be bound.

(xvii)All federal, state and other tax returns of
the Company required by applicable laws to be filed have been
duly filed (except where valid extension of time for filing
has been obtained), and all federal, state and other taxes,
assessments and other governmental charges or levies upon the
Company and its properties, income, profits and assets which
are due and payable have been paid, other than those
contested in good faith and for which adequate reserves have
been established in accordance with generally accepted
accounting principles consistently applied.

<PAGE> 15

(b) SURVIVAL OF REPRESENTATIONS AND WARRANTIES, ETC. All
representations and warranties made under this Agreement shall be
deemed to be made at and as of the Closing Date and at and as of the
date of purchasing any Note, except to the extent that such
representations and warranties expressly relate solely to an earlier
date (in which case such representations and warranties shall have
been true and correct in all material respects on and as of such
earlier date) and except for changes in factual circumstances
specifically permitted hereunder.

13. AFFIRMATIVE COVENANTS. So long as any Note shall remain unpaid or
PruCredit shall have any Note Commitment hereunder, the Company will, unless
PruCredit shall otherwise consent in writing:

(a) PRESERVATION OF EXISTENCE AND SIMILAR MATTERS. Subject to
Section 14(e) hereof, preserve and maintain, and cause each other Loan
Party to preserve and maintain, its respective existence, rights,
franchises, licenses and privileges in the jurisdiction of its
formation and qualify and remain qualified and authorized to do
business in each jurisdiction in which the character of its properties
or the nature of its business requires such qualification or
authorization.

(b) COMPLIANCE WITH LAWS. Comply, and cause each of the
Company's subsidiaries to comply, in all material respects with all
applicable laws, rules, regulations and orders, such compliance to
include, without limitation, paying before the same become delinquent
all taxes, assessments and governmental charges imposed upon the
Company or any such subsidiary or upon the Company's or any such
subsidiary's property except to the extent contested in good faith by
appropriate proceedings and except to the extent that any
noncompliance could not reasonably be expected to have a material
adverse effect on the financial condition or operations of the Company
or any such subsidiary or on the Company's or any such subsidiary's
ability to perform its obligations under any Loan Document to which it
is, or is to become, a party.

(c) GOVERNMENTAL APPROVALS. Obtain and maintain, and cause
each of the Company's subsidiaries to obtain and maintain, in effect
all licenses, certificates, permits, franchises and other governmental
authorizations necessary for the ownership of the Company's and their
respective properties and for the conduct of the Company's and their
respective businesses, in each case to the extent necessary to ensure
that any noncompliance could not reasonably be expected to have a
material adverse effect on the financial condition or operations of
the Company or on its ability to perform its obligations under any
Loan Document to which it is, or is to become, a party.

(d) INSURANCE. Maintain, and cause each of the Company's
subsidiaries to maintain, with financially sound and reputable
insurers, insurance, naming PruCredit as

<PAGE> 16

named insured and loss payee, with respect to the Company's and their
respective properties and businesses against such casualties and
contingencies, of such types, on such terms and in such amounts
(including deductibles, co-insurance and self-insurance, if adequate
reserves are maintained with respect thereto) as is customary in the
case of entities of established reputations engaged in the same or a
similar business and similarly situated.

(e) PAYMENT OF OBLIGATIONS. The Company, and each of its
subsidiaries shall, pay and discharge or otherwise satisfy at or
before maturity all their material obligations and liabilities,
including, without limitation, trade payables or tax liabilities,
except where the same may be contested in good faith by appropriate
proceedings and appropriate reserves for the accrual of the same shall
have been provided in accordance with GAAP and where nonfulfillment
could not reasonably be expected to have a material adverse effect and
would not subject any of their property to any Lien not permitted by
Section 14(c).

(f) USE OF PROCEEDS. Use the proceeds of each Series A Note
solely (i) to fund the cash portion of the Practice Acquisitions or
similar acquisitions of ophthalmological and optometric practices and
(ii) for the payment of professional fees (including advisory, legal,
accounting and appraisal fees) relating to such acquisitions,
provided, that solely in connection with a Series A Note purchased on
the date of any purchase of a Series B Note in accordance with the
terms hereof, the Company may use the proceeds of such Series A Note
to repay up to $6,000,000 existing indebtedness of Block and/or any of
its subsidiaries to NationsBank, N.A. Use the proceeds of each Series
B Note solely (x) to fund the cash portion of the Block Acquisition if
the net proceeds from the Equity Offering have not been received by
the Company on or prior to November 30, 1997 for any reason other than
a breach or default by the Company or failure by the Company to
satisfy any condition under any of the documents relating to the
Equity Offering, including, without limitation the purchase agreement
relating to the Equity Offering and (y) for the payment of
professional fees (including advisory, legal, accounting and appraisal
fees) relating to the Block Acquisition.

(g) PERMANENT FINANCING. (i) The Company will take all
actions which, in the reasonable judgment of Prudential, in
consultation with the Company, are necessary or desirable to obtain
permanent financing in an amount sufficient to redeem all the Notes as
soon as is reasonably practicable through the issuance of (A) debt
securities ("ISSUED DEBT") at such interest rates and terms as are, in
the opinion of Prudential, in consultation with the Company,
prevailing for new issues of securities of comparable size and credit
rating in the United States capital markets at the time such permanent
financing is consummated and obtained in comparable transactions made
on an arm's-length basis between unaffiliated parties, and/or (B)
through the issuance of Common Stock at such

<PAGE> 17

prices and terms as are, in the opinion of Prudential, in consultation
with the Company, prevailing for issues of equity by companies in
similar lines of business, of comparable size and at the time of such
issue. The terms of such Issued Debt shall provide for the issuance of
equity securities (which may include warrants to purchase such equity
securities), whether as part of a unit or separately, as is needed to
facilitate the issuance of Issued Debt. The Company shall issue and
make available to Prudential such equity securities for the foregoing
purpose in such amounts as Prudential shall reasonably determine in
consultation with the Company. The respective amounts to be financed
through Issued Debt, Common Stock or through the issuance of other
securities shall be as determined by the Company, but shall be in an
amount at least sufficient to repay or redeem the Notes in full in
accordance with their terms. The Company hereby covenants and agrees
that the net proceeds from any such permanent financing shall be used
to the extent required to repay in full the Notes in accordance with
their terms.

(ii) The Company shall enter into such agreements
as, in the reasonable judgment of Prudential, in consultation
with the Company, are customary in connection with any such
permanent financing, make such filings under the Act, the
Exchange Act, the Trust Indenture Act of 1939, as amended,
the state securities laws as, in the reasonable judgment of
Prudential, in consultation with the Company, shall be
required to permit consummation of such permanent financing
and take such steps as, in the reasonable judgment of
Prudential, in consultation with the Company, are necessary
to cause such filings to become effective or, in the
reasonable judgment of Prudential, in consultation with the
Company, are otherwise required to consummate such permanent
financing.

(h) CONDUCT OF BUSINESS. At all times carry on, and cause
each other Loan Party to carry on, its business in the same or
complimentary line of business as engaged in on the date hereof. The
Company will not, and will not permit any other Loan Party to, engage
to any substantial extent in any business other than the businesses in
which the Company and such Loan Party are engaged on the date of this
Agreement and businesses reasonably related or complimentary thereto
or in furtherance thereof.

(i) MAINTENANCE OF MATERIAL CONTRACTS. Shall comply, and
shall cause the Company's subsidiaries to comply, with its obligations
under each material contract to which the Company, or any subsidiary
of the Company is a party. The Company will not, and will not permit
its subsidiaries to, amend, supplement or modify any such material
contract in a manner which is adverse to the Company or such
subsidiary, as the case may be. The Company will not, and will not
permit its subsidiaries to, terminate or allow to lapse without
further action (including the failure to timely submit a competitive
bid relating to a managed care contract the renewal of which is by its
terms then subject to a

<PAGE> 18

competitive bid procedure) any material contract, the termination or
lapse of which would be adverse to the Company or such subsidiary, as
the case may be.

(j) REPORTING REQUIREMENTS. Furnish to PruCredit: (i) as soon
as possible and in any event within three days after the occurrence of
an Event of Default or within five Business Days after the occurrence
of an event, which, with the giving of notice or lapse of time, or
both, would constitute an Event of Default, the statement of the
Company's chief financial officer setting forth the details of such
Event of Default or such other event and the action which the Company
proposes to take with respect thereto; (ii) as soon as available and
in any event within 45 days after the end of each fiscal quarter
(other than the fiscal quarter ending December 31, 1997), the
Company's balance sheet as of the end of such quarter and a statement
of the Company's income and retained earnings for the period
commencing at the end of the previous fiscal year and ending with the
end of such quarter, certified by the Company's chief financial
officer; (iii) as soon as available and in any event within 90 days
after the end of the fiscal year ending December 31, 1997, a copy of
the Company's annual report for such year, containing financial
statements for such year certified in a manner reasonably acceptable
to PruCredit by independent public accountants reasonably acceptable
to PruCredit; (iv) as soon as available and in any event within 30
days after the end of each calendar month, a certificate of the
Company's chief financial officer as to (A) the Company's compliance
with the covenant set forth in Section 14(a) hereof, including a
reasonably detailed calculation of such compliance and (B) a
reasonably detailed calculation of EBITDA for the month most recently
ended; (v) as soon as available and in any event within 45 days after
the end of each fiscal quarter of each of the Company's fiscal years,
a certificate of the Company's chief financial officer as to the
Company's compliance with the covenant set forth in Section 14(b)
hereof, including a reasonably detailed calculation of such
compliance; and (vi) such other information respecting the Company's
condition or operations, financial or otherwise, as PruCredit may from
time to time reasonably request.

(k) INSPECTION OF PROPERTY, BOOKS AND RECORDS. Each of the
Company and each of its subsidiaries shall keep proper books of record
and account in which full, true and correct entries shall be made of
all material dealings and transactions in relation to its business and
activities, and shall permit representatives of PruCredit, at the
expense (which expenses shall have been reasonably incurred) of the
Company and upon reasonable notice to the Company to visit and inspect
any of their properties, to examine and make abstracts from any of
their books and records and to discuss their affairs, finances and
accounts with their executive officers and independent public
accountants, all at such reasonable times and as often as may
reasonably be desired.

(l) ADDITIONAL COLLATERAL. Within ten (10) days of the date
of the acquisition of any Person, other with the cash proceeds of any
Note, of a controlling interest in the

<PAGE> 19

stock or ownership interests in any Person (such Person, an
"ADDITIONAL LOAN PARTY"), cause such Additional Loan Party to (i)
execute and deliver in favor of PruCredit a Security Agreement, in
substantially the form attached hereto as Exhibit C, (ii) deliver in
connection with such Security Agreement an opinion of counsel (which
counsel and the form and substance of such opinion shall be reasonably
satisfactory to PruCredit) addressed to PruCredit relating to such
Additional Loan Party and the enforceability of its obligations under
such Security Agreement, and (iii) deliver to PruCredit such officer's
certificates, financing statements, lien searches, directors and
shareholders resolutions and other agreements, instruments and
documents as PruCredit may reasonably request. From and after the date
an Additional Loan Party executes a Security Agreement, such
Additional Loan Party shall be deemed to be a Loan Party hereunder.

14. NEGATIVE COVENANTS. So long as any Note shall remain unpaid or
PruCredit shall have any Note Commitment hereunder, the Company will not,
without PruCredit's written consent:

(a) SENIOR DEBT TO CAPITAL FUNDS RATIO. Permit as at the end
of each calendar month a ratio of Senior Debt to Capital Funds to
exceed 2.00 to 1.00. As used herein, "DEBT" shall be determined in
accordance with generally accepted accounting principles, consistent
with those applied in the preparation of the financial statements
described in Section 12(a)(v) hereof ("GAAP"). The term "SENIOR DEBT"
shall mean Debt of the Company and its subsidiaries which is not
expressly subordinated by written agreement to the Notes. The term
"SUBORDINATED DEBT" shall mean all Debt of the Company and its
subsidiaries that has been expressly subordinated by written agreement
to the Notes, in form and substance acceptable to PruCredit. The term
"CAPITAL FUNDS" shall mean Net Worth plus Subordinated Debt. The term
"NET WORTH" shall mean the Company's consolidated stockholders' equity
as determined in accordance with GAAP, less the receivables from and
loans to employees of the Company.

(b) EBITDA TO INTEREST CHARGES RATIO. Permit as at the end of
each fiscal quarter a ratio of EBITDA to Interest Charges to be less
than the number set forth below next to the applicable fiscal quarter
ending date:

December 31, 1997 1.50 to 1.00
March 31, 1998 2.00 to 1.00

As used herein, the term "EBITDA" shall mean, for any period, net
income of the Company and its subsidiaries (determined in accordance
with GAAP) for such period plus all amounts deducted in the
computation thereof on account of Interest Charges, taxes,
depreciation and amortization allowances and other non-cash expenses
for such period. The term "INTEREST CHARGES" shall mean, for any
period, the sum (without duplication)

<PAGE> 20

of the following (in each case, eliminating all offsetting debits and
credit between the Company and its subsidiaries and all other items
required to be eliminated in the course of the preparation of the
consolidated financial statements of the Company and its subsidiaries
in accordance with GAAP): (i) all interest in respect of Debt of the
Company and its subsidiaries deducted in determining net income of the
Company for such period and (ii) all debt discount and expense
amortized or required to be amortized in the determination of net
income of the Company and its subsidiaries for such period.

(c) LIENS. Create or suffer to exist, or cause or permit any
of the Company's subsidiaries to create or suffer to exist, any lien,
security interest or other charge or encumbrance, or any other type of
preferential arrangement, upon or with respect to any of the Company's
or such subsidiary's properties or assets, whether now owned or
hereafter acquired, or assign any right to receive revenues or income,
in each case to secure any Debt of any Person or entity, other than
(i) purchase money liens or purchase money security interests upon or
in any property acquired or held by the Company or such subsidiary in
the ordinary course of business to secure the purchase price of such
property or to secure indebtedness incurred solely for the purpose of
financing the acquisition of such property, (ii) liens or security
interests existing on such property at the time of its acquisition
(other than any such lien or security interest created in
contemplation of such acquisition), or (iii) liens securing the
indebtedness hereunder.

(d) SENIOR DEBT. Create or suffer to exist (i) any Debt that
ranks senior to the Debt evidenced by the Notes or, (ii) any Debt that
ranks pari passu (on a secured or unsecured basis) with the Debt
evidenced by the Notes, other than (x) Debt the proceeds of which are
subject to the provisions of Section 7(a) hereof and (y) from and
after the purchase of any Series B Note, standby letter of credit
reimbursement obligations of Block and/of any of its subsidiaries in
an aggregate amount not to exceed $3,000,000.

(e) CONSOLIDATIONS AND MERGERS. Merge or consolidate, or
cause or permit any of the Company's subsidiaries to merge or
consolidate, with or into, or convey, transfer, lease or otherwise
dispose of, or cause or permit any of the Company's subsidiaries to
convey, transfer, lease or otherwise dispose of, (whether in one
transaction or in a series of transactions) all or substantially all
of the Company's or such subsidiary's assets (whether now owned or
hereafter acquired) to any Person or entity, except that the Company
and/or any wholly-owned subsidiary of the Company may merge with any
wholly-owned subsidiary of the Company, provided that, immediately
after giving effect to such proposed transaction, no Event of Default
or event which, with the giving of notice or lapse of time, or both,
would constitute an Event of Default would exist and, in the case of
any merger involving the Company, the Company is the surviving
corporation.

<PAGE> 21

(f) CERTAIN AMENDMENTS. Amend or modify the articles of
incorporation or the by-laws of the Company so as to materially impair
any of the Company's rights under any Loan Document.

(g) INVESTMENTS. Make or purchase any Investment or, after
such date, permit any Investment to be outstanding other than (i)
Investments described on Schedule 14(g); (ii) Investments permitted
for the use of proceeds pursuant to Section 13(e); (iii) Investments
in existence as of the date hereof; or (iv) Investments made in the
ordinary course of business as conducted by the Company on the Closing
Date and not in excess of $250,000, individually or $500,000 in the
aggregate for any calendar year. As used herein, "INVESTMENT" means
the acquisition of any interest in any Person or property, a loan or
advance to any Person or other arrangement for the purpose of
providing funds or credit to any Person, a capital contribution in or
to any Person, or any other investment in any Person or property.

(h) DIVIDEND LIMITATION. (i) Pay or declare any cash dividend
on any class of its stock or make any other distribution on account of
any class of its stock; or (ii) redeem, purchase or otherwise acquire,
directly or indirectly, any shares of its stock; except for:

(A) dividends payable in common stock;

(B) any subsidiary of the Company may pay dividends
or any other such distribution to the Company;

(C) the Company may repurchase shares of common
stock and/or options to purchase such common stock held by
directors, executive officers, members of management or
employees of the Company or any of its subsidiaries upon the
death, disability, retirement or termination of employment of
such directors, executive officers, members of management or
employees so long as (x) no Event of Default, or event that
with the passing of time, giving of notice then exists or
would result in an Event of Default, would result therefrom
and (y) the aggregate amount of cash expended by the Borrower
pursuant to this clause (C) does not exceed $500,000 in any
fiscal year of the Borrower; and

(D) the Company may repurchase shares of its common
stock and/or options to purchase such common shares held by
any Person so long as (x) no Event of Default then exists, or
event exists which, with the giving of notice or lapse of
time, or both, would result in an Event of Default, or no
Event of Default or event exists which, with the giving of
notice or lapse of time, or both, would result in an Event of
Default, would result therefrom and (y) the aggregate amount

<PAGE> 22

of cash expended by the Borrower pursuant to this clause (D)
does not exceed $500,000 in any fiscal year of the Borrower.

The term "STOCK" as used in this Section 14(h) shall include
warrants or options to purchase stock and any preferred stock.

(i) TRANSACTIONS WITH AFFILIATES. Except as specified on
Schedule 14(i) hereto, enter into any transaction or series of related
transactions, whether or not in the ordinary course of business, with
any Affiliate (as defined below) of the Borrower, other than on terms
and conditions substantially as favorable to the Borrower as would be
obtainable by the Borrower at the time in a comparable arm's length
transaction with a Person not an Affiliate ("UNAFFILIATED
TRANSACTION") other than any transaction or series of transactions
with respect to assets or services of the Borrower or its Subsidiaries
having a value in an Unaffiliated Transaction equal to or less than
$250,000 individually or $500,000 in the aggregate. As used herein,
"AFFILIATE" means, with respect to any Person, any entity which
directly or indirectly controls, is controlled by, or is under common
control with, such Person or any subsidiary of such Person or any
Person who is a director, officer or partner of such Person or any
subsidiary of such Person and, with respect to each Loan Party, shall
include all other Loan Parties. For purposes hereof, "CONTROL" shall
mean the possession, directly or indirectly, of the power to (a) vote
ten percent (10%) or more of the securities having ordinary voting
power for the election of directors of such Person or (b) direct or
cause the direction of management and policies of a business, whether
through the ownership of voting securities, by contract or otherwise
and either alone or in conjunction with others or any group.

(j) SALE LEASEBACKS. The Company will not, nor will it permit
any of its subsidiaries to, directly or indirectly, become or remain
liable as lessee or as guarantor or other surety with respect to any
lease of any property (whether real or personal or mixed), whether now
owned or hereafter acquired, (i) which such Person has sold or
transferred or is to sell or transfer to any other Person other than a
Loan Party or (ii) which such Person intends to use for substantially
the same purpose as any other property which has been sold or is to be
sold or transferred by such Person to any other Person in connection
with such lease.

15. EVENTS OF DEFAULT. If any of the following events ("EVENTS OF
DEFAULT") shall occur and be continuing:

(a) The Company shall fail to pay any principal of any Note
when due, or the Company shall fail to pay any interest on any Note or
any other amount payable hereunder within three days of the date when
the same becomes due and payable; or

<PAGE> 23

(b) Any representation or warranty made by any Loan Party (or
any of its officers) under or in connection with any Loan Document
shall prove to have been incorrect in any material respect when made;
or

(c) Any Loan Party shall fail to perform or observe (i) any
term, covenant or agreement contained in Sections 13(a), (g), (j) and
(l) and Section 14 or (ii) any other term, covenant or agreement
contained in any Loan Document, in each case, on its part to be
performed or observed if such failure shall remain unremedied for 10
days after written notice thereof shall have been given to the Company
by PruCredit; or

(d) Any Loan Party shall fail to pay any principal of or
premium or interest on any Debt that is outstanding in an aggregate
principal amount of at least $250,000 (but excluding Debt evidenced by
the Notes) when the same becomes due and payable (whether by scheduled
maturity, required prepayment, acceleration, demand or otherwise), and
such failure shall continue after the applicable grace period, if any,
specified in the agreement or instrument relating to such Debt; or any
other event shall occur or condition shall exist under any agreement
or instrument relating to any such Debt and shall continue after the
applicable grace period, if any, specified in such agreement or
instrument, if the effect of such event or condition is to accelerate,
or to permit the acceleration of, the maturity of such Debt; or any
such Debt shall be declared to be due and payable, or required to be
prepaid (other than by a regularly scheduled required prepayment),
prior to the stated maturity thereof; or

(e) Any Loan Party or any corporate Affiliate of any Loan
Party shall generally not pay its debts as such debts become due, or
shall admit in writing its inability to pay debts generally, or shall
make a general assignment for the benefit of creditors; or any
proceeding shall be instituted by or against any Loan Party or any
Affiliate of any Loan Party seeking to adjudicate it a bankrupt or
insolvent, or seeking liquidation, winding up, reorganization,
arrangement, adjustment, protection, relief, or composition of it or
its debts under any law relating to bankruptcy, insolvency or
reorganization or relief of debtors, or seeking the entry of an order
for relief or the appointment of a receiver, trustee, custodian or
other similar official for it or for any substantial part of its
property and, in the case of any such proceeding instituted against it
(but not instituted by it), either such proceeding shall remain
undismissed or unstayed for a period of 30 days, or any of the actions
sought in such proceeding (including, without limitation, the entry of
an order for relief against, or the appointment of a receiver,
trustee, custodian or other similar official for, it or for any
substantial part of its property) shall occur; or shall take any
corporate action to authorize any of the actions set forth above in
this subsection (e); or

(f) Any judgment or order for the payment of money in excess
of $250,000 shall be rendered against any Loan Party and either (i)
enforcement proceedings shall have

<PAGE> 24

been commenced by any creditor upon such judgment or order or (ii)
there shall be any period of 10 consecutive days during which a stay
of enforcement of such judgment or order, by reason of a pending
appeal or otherwise, shall not be in effect; or

(g) Any provision of any Loan Document after delivery thereof
shall for any reason cease to be valid and binding on any Loan Party
that is a party thereto, or any Loan Party shall so state in writing;
or

(h) Any material adverse change shall occur in the financial
condition or operations of the Company and its consolidated
subsidiaries or on the ability of the Company to perform its
obligations under any Loan Document to which it is, or is to become, a
party; or

(i) Any Security Agreement shall for any reason, except to
the extent permitted by the terms hereof and thereof, cease to create
a valid and perfected first priority security interest (to the extent
purported to be granted by such Security Agreement) in all or any
portion of the Collateral (as defined in the Security Agreements); or

(j) (i) Any Termination Event with respect to a Plan shall
occur; (ii) any Plan shall incur an "accumulated funding deficiency"
(as defined in Section 412 of the Internal Revenue Code of 1986, as
amended (the "CODE") or Section 302 of ERISA) for which a waiver has
not been obtained in accordance with the applicable provisions of the
Code and ERISA; or (iii) the Company is in "default" (as defined in
Section 4219(c)(5) of ERISA) with respect to payments to a
"Multiemployer Plan" (as defined in Section 4001(a)(3) of ERISA)
resulting from the Company's complete or partial withdrawal (as
described in Section 4203 or 4205 of ERISA) from such Multiemployer
Plan. As used herein: "ERISA" means the Employee Retirement Income
Security Act of 1974, as in effect from time to time; "PLAN" means an
employee benefit plan maintained for employees of the Company or any
of its subsidiaries that is covered by Title IV of ERISA, including
such plans as may be established after the Closing Date; "REPORTABLE
EVENT" has the meaning set forth in Section 4043(b) of ERISA, but
shall not include a Reportable Event as to which the provision for 30
days' notice to the Pension Benefit Guaranty Corporation (or any
successor agency, the "PBGC") is waived under applicable regulations;
"TERMINATION EVENT" means (a) a Reportable Event; (b) the filing of a
notice of intent to terminate a Plan or the treatment of a Plan
amendment as a termination under Section 4041 of ERISA or (c) the
institution of proceedings to terminate a Plan by the PBGC under
Section 4042 of ERISA, or the appointment of a trustee to administer
any Plan;

then, and in any such event, PruCredit may, by notice to the Company, (i)
declare PruCredit's obligation to purchase the Notes to be terminated,
whereupon the same shall forthwith terminate; (ii) declare the Notes, all
interest thereon and all other amounts payable under this Agreement to

<PAGE> 25

be forthwith due and payable, whereupon the Notes, all such interest and all
such amounts shall become and be forthwith due and payable, without
presentment, demand, protest, or further notice of any kind, all of which are
hereby expressly waived by the Company; and (iii) exercise in respect of the
Collateral, in addition to the other rights and remedies provided for herein
and in the Security Agreements, all the rights and remedies of a secured party
on default under the Uniform Commercial Code in effect from time to time in the
State of New York and in effect in any other jurisdiction in which the
Collateral is located at that time; provided, however, that in the event of an
actual or deemed entry of an order for relief with respect to the Company under
the Federal Bankruptcy Code, (A) PruCredit's obligation to purchase the Notes
shall automatically be terminated and (B) the Notes, all such interest and all
such amounts shall automatically become and be due and payable, without
presentment, demand, protest or any notice of any kind, all of which are hereby
expressly waived by the Company.

16. REPRESENTATIONS AND WARRANTIES OF PRUDENTIAL SECURITIES CREDIT
CORPORATION. PruCredit represents and warrants that:

(a) PruCredit is acquiring the Notes and receiving as
consideration of PruCredit's agreements hereunder the Warrants and the
shares of the Common Stock issuable upon exchange of the Warrants
(collectively, the "SECURITIES") for the purpose of investment for
PruCredit's own account and not with a view to or for sale in
connection with any distribution thereof, provided, that the
disposition of PruCredit's property shall at all times be and remain
within PruCredit's control. PruCredit understands that the Securities
have not been registered under the Act, and may be resold only if
registered pursuant to the provisions of the Securities Act and any
applicable state "blue sky" laws or if an exemption from such
registration is available, and PruCredit will not distribute any of
the Securities in violation of the Act and such state "blue sky laws."

(b) The address set forth in Section 18 hereof is PruCredit's
principal business address.

(c) PruCredit (i) acknowledges that the Securities to be
issued to PruCredit at the Closing must be held indefinitely by
PruCredit unless such Securities are subsequently registered under the
Act or an exemption from registration is available, and (ii) is aware
that any routine sales of Securities made pursuant to Rule 144 under
the Act may be made only in limited amounts and in accordance with the
terms and conditions of that Rule and that in such cases where the
Rule is not applicable, compliance with some other registration or
exemption will be required.

(d) PruCredit has knowledge and experience in financial and
business matters such that PruCredit is capable of evaluating the
merits and risks of the Securities to be

<PAGE> 26

acquired by PruCredit upon consummation of the transactions described
in this Agreement and can afford a complete loss of PruCredit's
investment in the Securities.

(e) PruCredit has had the opportunity to ask questions of and
receive answers from the Company concerning the terms and conditions
of PruCredit's investment in the Securities, and PruCredit has
received, to PruCredit's satisfaction, information about the Company's
operations and the terms and conditions of PruCredit's investment in
the Securities as PruCredit has requested.

(f) PruCredit acknowledges and agrees that each of the
Securities issued by the Company or issued as a result of any
subsequent transfer thereof, shall be stamped or otherwise imprinted
with a legend in substantially the following form:

"The securities represented hereby have not been registered
under the Securities Act of 1933 or applicable state "blue
sky" laws. Such securities may not be sold or transferred in
the absence of such registration or an opinion of counsel
that an exemption therefrom under said Act and applicable
state "blue sky" laws is available. Any transfer of such
securities in violation of the foregoing shall be invalid."

PruCredit further acknowledges and agrees that appropriate
"stop-transfer" instructions will be given to the Company's transfer
agent, if any, in the event of any attempted transfer in violation of
such restriction.

(g) PruCredit is an "accredited investor" within the meaning
of Securities and Exchange Commission Rule 501 of Regulation D, as
presently in effect.

17. AMENDMENTS. No amendment or waiver of any provision of this
Agreement or the Notes, nor consent to any departure by the Company therefrom,
shall in any event be effective unless the same shall be in writing and signed
by PruCredit, and then such waiver or consent shall be effective only in the
specific instance and for the specific purpose for which given.

18. NOTICES. All notices and other communications provided for
hereunder shall be in writing (including telecopier communication) and mailed,
telecopied or delivered, if to the Company, at the Company's address at 7209
Bryan Dairy Road, Largo, Florida 33777, Attention: Richard T. Welch (fax
813-547-4371); and if to PruCredit, One New York Plaza, 12th Floor, New York,
New York 10242, Attention: Richard K. Gupta (fax 212-778-4586) with copies to
Prudential Securities Incorporated, One Seaport Plaza, New York, New York
10292, Attention: George D. Morgan, III and Erika P. Walters-Engemann (fax
212-214-7678); or, as to each party, at such other address as shall be
designated by such party in a written notice to the other party.

<PAGE> 27

All such notices and communications shall, when mailed or telecopied, be
effective when deposited in the mails or telecopied, respectively.

19. NO WAIVER; REMEDIES; BENEFITS. No failure by either party to
exercise, and no delay in exercising, any right hereunder or under any Note or
the Warrants shall operate as a waiver thereof; nor shall any single or partial
exercise of any right hereunder or under any Note preclude any other or further
exercise thereof or the exercise of any other right. The remedies herein
provided are cumulative and not exclusive of any remedies provided by law. All
Notes at any time outstanding shall be equally and ratably entitled to the
benefits of this Agreement, without priority, preference or distinction on
account of the date or dates of issue thereof.

20. ACCOUNTING TERMS. All accounting terms not specifically defined
herein shall be construed in accordance with GAAP consistent with those applied
in the preparation of the financial statements referred to in Section 12(a)(v).

21. COSTS AND EXPENSES. The Company agrees to pay on demand all
reasonable costs and expenses in connection with the preparation, execution,
delivery, filing, recording, administration, modification and amendment of this
Agreement, the other Loan Documents and the other documents to be delivered
hereunder and thereunder, including, without limitation, the reasonable fees
and out-of-pocket expenses of PruCredit's counsel with respect thereto and with
respect to advising PruCredit as to PruCredit's rights and responsibilities
under this Agreement. The Company further agrees to pay on demand all costs and
expenses, if any (including counsel fees and expenses), in connection with the
enforcement (whether through negotiations, legal proceedings or otherwise) of
this Agreement, the other Loan Documents and the other documents to be
delivered hereunder and thereunder, including, without limitation, counsel fees
and expenses in connection with the enforcement of rights under this Section
21. In addition, the Company shall pay any and all stamp and other taxes
payable or determined to be payable in connection with the execution and
delivery of this Agreement, the other Loan Documents and the other documents to
be delivered hereunder and thereunder, and agree to save PruCredit harmless
from and against any and all liabilities with respect to or resulting from any
delay in paying or omission to pay such taxes.

22. BINDING EFFECT; ENTIRE AGREEMENT. This Agreement shall be binding
upon and inure to the benefit of the Company and PruCredit and the Company's
and PruCredit's respective successors and assigns, except that the Company
shall not have the right to assign the Company's rights hereunder or any
interest herein without PruCredit's prior written consent. This Agreement may
be executed in separate counterparts, each of which shall be an original, with
the same effect as if the signatures were upon the same instrument. This
Agreement and the other Loan Documents constitute the entire understanding
among the parties hereto with respect to the subject matter hereof and
supersede any prior agreements, written or oral, with respect thereto.

<PAGE> 28

23. GOVERNING LAW. THIS AGREEMENT AND THE NOTES SHALL BE CONSTRUED AND
ENFORCED IN ACCORDANCE WITH, AND THE RIGHTS OF THE PARTIES SHALL BE GOVERNED
BY, THE LAW OF THE STATE OF NEW YORK, EXCLUDING CHOICE-OF-LAW PRINCIPLES OF THE
LAW OF SUCH STATE THAT WOULD REQUIRE THE APPLICATION OF THE LAWS OF A
JURISDICTION OTHER THAN SUCH STATE.

24. WAIVER OF TRIAL BY JURY. THE PARTIES HERETO ACKNOWLEDGE THAT ANY
DISPUTE ARISING OUT OF THIS AGREEMENT OR THE NOTES WILL BE BASED ON DIFFICULT
AND COMPLEX FACTS. ACCORDINGLY, EACH OF THE PARTIES HERETO HEREBY WAIVES ITS
RIGHT TO TRIAL BY JURY IN ANY DISPUTE, CONTROVERSY, SUIT, HEARING OR OTHER
PROCEEDING ARISING OUT OF THIS AGREEMENT OR THE NOTES OR THE OBLIGATIONS,
DUTIES AND RIGHTS OF THE COMPANY OR OF THE HOLDER OF ANY NOTE AS SET FORTH
HEREIN OR IN THE NOTES.

<PAGE> 29

If the terms of this Agreement are satisfactory to the Company, please
indicate the Company's agreement and acceptance thereof by executing a
counterpart of this Agreement and returning it to PruCredit.

PRUDENTIAL SECURITIES CREDIT
CORPORATION

By /s/
----------------------------------------
Name:
Title:

Agreed and Accepted:

VISION TWENTY-ONE, INC.

By /s/ Richard T. Welch
-------------------------------------
Name: Richard T. Welch
Title: Chief Financial Officer

<PAGE> 30

EXHIBIT A-1

FORM OF

SERIES A PROMISSORY NOTE

The securities represented hereby have not been registered under the
Securities Act of 1933 or applicable state "blue sky" laws. Such
securities may not be sold or transferred in the absence of such
registration or an opinion of counsel that an exemption therefrom
under said Act and applicable state "blue sky" laws is available. Any
transfer of such securities in violation of the foregoing shall be
invalid.

$_______________ Dated: _________, 19__

FOR VALUE RECEIVED, the undersigned, VISION TWENTY-ONE, INC., a
Florida corporation (the "COMPANY"), HEREBY PROMISES TO PAY to the order of
PRUDENTIAL SECURITIES CREDIT CORPORATION (the "PURCHASER") the principal sum of
[AMOUNT IN WORDS] (U.S.$______________) or, if less, the aggregate principal
amount of this Note outstanding on the Note Termination Date (as defined in the
Purchase Agreement referred to below) together with interest on the unpaid
principal amount hereof and all other sums then due and payable to the
Purchaser under this Note, subject to the terms and conditions of this Note.

This Note is one of the Series A Notes issued pursuant to and entitled
to the benefits of the Note Purchase Agreement, dated as of November 3, 1997
(as from time to time amended, the "PURCHASE AGREEMENT"; capitalized terms used
but not defined herein having the meanings therein assigned), between the
Purchaser and the Company. The Company will make required prepayments of
principal on the dates and in the amounts specified in the Purchase Agreement.
This Note is also subject to optional prepayment, in whole or from time to time
in part, at the times and on the terms specified in the Purchase Agreement, but
not otherwise. If an Event of Default occurs and is continuing, the principal
of this Note may be declared or otherwise become due and payable in the manner,
at the price and with the effect provided in the Purchase Agreement.

The Company promises to pay interest on the unpaid principal amount
hereof from the date hereof until such principal amount is paid in full,
payable in arrears on the last day of each Interest Period (as hereinafter
defined) during the term hereof (each, a "PAYMENT DATE"), at an interest rate
per annum (the "INTEREST RATE") equal at all times during each Interest Period
to the

<PAGE> 31

sum of (i) the LIBOR Rate (as hereinafter defined) plus (ii) four percent (4%),
provided, however, that from and after the date ninety (90) days following the
Closing Date, the Interest Rate shall be equal at all times to the sum of (i)
the LIBOR Rate plus (iii) four and one-half percent (4.50%).

The "LIBOR RATE" for each Interest Period shall mean the London
interbank offered rate for United States of America Dollar deposits for a
period equal in length to such Interest Period that appears as of 11:00 A.M.
(London time) on the second Business Day (as hereinafter defined) next
preceding the first day of such Interest Period on the display page designated
as Page 3750 on the Telerate Monitor (or such other page or service as shall
replace the Telerate Monitor for the purposes of displaying the London
interbank offered rate for United States of America Dollar deposits). If (i) on
the date on which the Purchaser shall seek to determine the LIBOR Rate for an
Interest Period, no quotation is given on Telerate Monitor page 3750, or (ii)
the Company shall have failed to give the Purchaser at least two Business Days'
prior written notice to request the advance of funds hereunder, the LIBOR Rate
shall be equal to the Purchaser's cost of funds for United States Dollar
deposits for a period comparable to such Interest Period on the date of
determination for amounts approximately equal to the then-outstanding principal
balance of the Note.

The period between the date hereof and the date of payment in full of
the principal amount hereof shall be divided into successive periods of three
calendar months (each, an "INTEREST PERIOD"), with each such Interest Period
ending on the last day of a calendar month, except that the initial Interest
Period shall begin on the date hereof and end on [LAST CALENDAR DAY OF MONTH IN
WHICH NOTE IS DATED]. Each subsequent Interest Period shall begin on the last
day of the preceding Interest Period; provided, that, (i) any Interest Period
that would otherwise end on a day that is not a Business Day shall, subject to
clauses (ii) and (iii) below, be extended to the next succeeding Business Day
unless such Business Day falls in another calendar month, in which case such
Interest Period shall end on the next preceding Business Day; (ii) any Interest
Period that begins on the last Business Day of a calendar month (or on a day
for which there is no numerically corresponding day in the calendar month at
the end of such Interest Period) shall, subject to clause (iii), end on the
last Business Day of a calendar month; and (iii) any Interest Period that would
otherwise end after the Note Termination Date shall end on the Note Termination
Date.

Payments and computations shall be made as follows:

(a) The Company shall make each payment of principal and
interest hereunder in same day funds not later than 12:00 noon (New
York City time) on the date when due in U.S. Dollars to the Purchaser
in care of Bank of New York, ABA 021000018, For the Account of
Prudential Securities Credit Corporation, Account Number: GLA 111 569
PPC (or such other address as the Purchaser may from time to time
designate to the Company in writing), in same day funds. All payments
of principal hereunder shall be recorded by

<PAGE> 32

the Purchaser and, prior to the transfer hereof, endorsed on the grid
attached hereto which is part of this Note.

(b) The Company hereby authorizes the Purchaser, if and to
the extent payment is not made when due hereunder, to charge from time
to time against any or all of the Company's accounts with the
Purchaser any amount so due.

(c) All computations of interest shall be made by the
Purchaser on the basis of the actual number of days elapsed over a
year of 360 days (including the first day but excluding the last day)
occurring in the applicable Interest Period for which such interest is
payable.

The Company hereby agrees that the Purchaser shall be entitled to
receive and the Company shall pay interest on any overdue principal or any
other amounts under this Note due at a rate (the "DEFAULT RATE") equal to the
lesser of (i) the maximum rate permitted by applicable law, and (ii) two
percent (2%) above the otherwise applicable Interest Rate.

If, due to either (i) the introduction of or any change (including,
without limitation, any change by way of imposition or increase of reserve
requirements) in or in the interpretation of any law or regulation or (ii) the
compliance by the Purchaser with any guideline or request from any central bank
or other governmental authority (whether or not having the force of law), there
shall be any increase in the cost to the Purchaser of funding or maintaining
this Note, then the Company shall from time to time, upon demand by the
Purchaser, pay to the Purchaser additional amounts sufficient to indemnify the
Purchaser against such increased cost. A certificate as to the amount of such
increased cost, submitted to the Company by the Purchaser, shall be conclusive
and binding for all purposes, absent manifest error.

The Company shall pay to the Purchaser, if and for so long as the
Purchaser shall be required under regulations of the Board of Governors of the
Federal Reserve System to maintain reserves with respect to liabilities or
assets consisting of or including Eurocurrency Liabilities (as such term is
defined in Regulation D of the Board of Governors of the Federal Reserve
System, as in effect from time to time), additional interest on the unpaid
principal amount hereof, from the date hereof until such principal amount is
paid in full, at an interest rate per annum equal at all times to the remainder
obtained by subtracting (i) the LIBOR Rate for an Interest Period from (ii) the
rate obtained by dividing such LIBOR Rate by a percentage equal to 100% minus
the reserve percentage applicable during such Interest Period (or if more than
one such percentage shall be so applicable, the daily average of such
percentages for those days in such Interest Period during which any such
percentage shall be so applicable) under regulations issued from time to time
by the Board of Governors of the Federal Reserve System (or any successor) for
determining the maximum reserve requirement (including, without limitation, any
emergency, supplemental or other marginal reserve requirement) for the
Purchaser with respect to liabilities or assets consisting of or including
Eurocurrency

<PAGE> 33

Liabilities having a term equal to such Interest Period, payable on each date
on which interest is payable hereunder. Such additional interest shall be
determined by the Purchaser and notified to the Company.

If, for any reason, the Purchaser receives payments of principal of
this Note other than on the last day of an Interest Period, the Company shall,
upon demand, pay to the Purchaser any amounts required to compensate the
Purchaser for additional losses, costs or expenses which it may reasonably
incur as a result of such payment, including, without limitation, any loss,
cost or expense incurred by reason of the liquidation or reemployment of
deposits or other funds acquired by the Purchaser to maintain this Note.

Upon the failure by the Company to pay the Purchaser any amounts under
this Note when due, the Purchaser is hereby authorized at any time and from
time to time, to the fullest extent permitted by law, to set off and apply any
and all deposits (general or special, time or demand, provisional or final) at
any time held and other indebtedness at any time owing by the Purchaser to or
for the credit or the account of the Company against any and all of the
obligations of the Company now or hereafter existing under this Note, whether
or not the Purchaser shall have made any demand under this Note and although
such obligations may be unmatured. The Purchaser agrees promptly to notify the
Company after any such set-off and application, provided that the failure to
give such notice shall not affect the validity of such set-off and application.
The rights of the Purchaser under this Section are in addition to other rights
and remedies (including, without limitation, other rights of set-off) which the
Purchaser may have.

If the applicable law (state or federal) is ever judicially
interpreted so as to render usurious any amount called for under this Note, or
if any prepayment results in the Company having paid any interest in excess of
that permitted by applicable law, then, without further action by the Purchaser
or the Company and so as to comply with the applicable law and to permit the
recovery of the fullest amount otherwise called for hereunder, (i) all excess
amounts theretofore collected by the Purchaser shall be credited on the
principal balance of this Note and (ii) the provisions of this Note shall be
immediately deemed reformed and the amounts thereafter collectible hereunder
reduced.

<PAGE> 34

This Note shall be construed with and enforced in accordance with, and
the rights of the parties shall be governed by, the law of the State of New
York excluding choice-of-law principles of the law of such State that would
require the application of the laws of a jurisdiction other than such State.

VISION TWENTY-ONE, INC.

By
-------------------------------------
Name:
Title:

<PAGE> 35

ADVANCES AND PAYMENTS OF PRINCIPAL

- -------------------------------------------------------------------------------

Amount of Principal Unpaid Principal Notation
Date Paid or Prepaid Balance Made By

- -------------------------------------------------------------------------------

<PAGE> 36

EXHIBIT A-2

FORM OF

SERIES B PROMISSORY NOTE

$_______________ Dated: _________, 19__

This Note is one of the Series B Notes issued pursuant to and entitled
to the benefits of the Note Purchase Agreement, dated as of November 3, 1997
(as from time to time amended, the "PURCHASE AGREEMENT"; capitalized terms used
but not defined herein having the meanings therein assigned), between the
Purchaser and the Company. The Company will make required prepayments of
principal on the dates and in the amounts specified in the Purchase Agreement.
This Note is also subject to optional prepayment, in whole or from time to time
in part, at the times and on the terms specified in the Purchase Agreement, but
not otherwise. If an Event of Default occurs and is continuing, the principal
of this Note may be declared or otherwise become due and payable in the manner,
at the price and with the effect provided in the Purchase Agreement.

<PAGE> 37

to the sum of (i) the LIBOR Rate (as hereinafter defined) plus (ii) four
percent (4%), provided, however, that from and after the date ninety (90) days
following the Closing Date, the Interest Rate shall be equal at all times to
the sum of (i) the LIBOR Rate plus (iii) four and one-half percent (4.50%).

Payments and computations shall be made as follows:

<PAGE> 38

time designate to the Company in writing), in same day funds. All
payments of principal hereunder shall be recorded by the Purchaser
and, prior to the transfer hereof, endorsed on the grid attached
hereto which is part of this Note.

The Company shall pay to the Purchaser, if, and for so long as, the
Purchaser shall be required under regulations of the Board of Governors of the
Federal Reserve System to maintain reserves with respect to liabilities or
assets consisting of or including Eurocurrency Liabilities (as such term is
defined in Regulation D of the Board of Governors of the Federal Reserve
System, as in effect from time to time), additional interest on the unpaid
principal amount hereof, from the date hereof until such principal amount is
paid in full, at an interest rate per annum equal at all times to the remainder
obtained by subtracting (i) the LIBOR Rate for an Interest Period from (ii) the
rate obtained by dividing such LIBOR Rate by a percentage equal to 100% minus
the reserve percentage applicable during such Interest Period (or if more than
one such percentage shall be so applicable, the daily average of such
percentages for those days in such Interest Period during which any such
percentage shall be so applicable) under regulations issued from time to time
by the Board of Governors of the Federal Reserve System (or any successor) for
determining the maximum reserve requirement (including, without limitation, any
emergency, supplemental

<PAGE> 39

or other marginal reserve requirement) for the Purchaser with respect to
liabilities or assets consisting of or including Eurocurrency Liabilities
having a term equal to such Interest Period, payable on each date on which
interest is payable hereunder. Such additional interest shall be determined by
the Purchaser and notified to the Company.

<PAGE> 40

VISION TWENTY-ONE, INC.

By
--------------------------------------
Name:
Title:

<PAGE> 41

ADVANCES AND PAYMENTS OF PRINCIPAL

- -------------------------------------------------------------------------------

Amount of Principal Unpaid Principal Notation
Date Paid or Prepaid Balance Made By

- -------------------------------------------------------------------------------

<PAGE> 42

EXHIBIT B

[FORM OF WARRANT CERTIFICATE]

<PAGE> 43

EXHIBIT C

[FORM OF SECURITY AGREEMENTS]

<PAGE> 44
Schedule 12(a)(i)

VISION TWENTY-ONE, INC. AND SUBSIDIARIES

<TABLE>
<CAPTION>
% of Outstanding
Stock Owned by
State of Company Directly
Corporation Incorporation or
Through a
Subsidiary
- ------------------------------ ------------------- --------------------------
<S> <C> <C>
The Company Florida NA

Vision 21 Physician Practice Florida 100%
Management Company (practice
management company)

Vision 21 Managed Eye Care of Florida 100%
Tampa Bay, Inc. (managed care
organization)

Vision 21 Management Services, Florida 100%
Inc.

Vision 21 Sierra Vista, Inc Florida 100%

Vision 21 of Southern Arizona, Florida 100%
Inc.

Vision Twenty-One Managed New York 100%
Eye Care IPA, Inc.
</TABLE>
<PAGE> 45
SCHEDULE 12(A)(VIII)

STOCK, OPTION AND WARRANT OWNERSHIP SUMMARIES
---------------------------------------------

STOCK

<TABLE>
<CAPTION>
5% BENEFICIAL OWNER SHARES
- ------------------- ------
<S> <C>
Theodore N. Gillette 1,898,558
Richard Sanchez 593,329
Other Stockholders 6,695,502
---------
TOTAL COMMON STOCK OUTSTANDING(*) 9,187,389
=========
</TABLE>

- ---------------
(*) The Company has 9,187,389 shares of common stock issued and outstanding,
excluding (a) an aggregate of 383,041 shares held in escrow as contingent
consideration, the amount of which is contingent upon (i) certain revenue
projections being met by Dr. Turner's practice, (ii) certain revenue projections
being met as a result of the Swagel Wootton practice hiring a new
ophthalmologist, and (iii) Managed Health Services, Inc.'s medical loss ratio
relating to certain capitated vision care contracts for the period ending August
31, 1998, and (iv) certain post-closing performance targets being met by Block
Vision and (b) excludes contingent shares reserved for issuance to Drs. Joffee,
Carroll, and Schindler in the cash amount of $223,025; (the number of shares to
be issued shall be determined by the per share value of the stock on the
termination date of escrow) and 37,092 shares reserved for the First Eye Care,
P.C. acquisition scheduled to be completed in November 1997.

LIST OF OUTSTANDING OPTIONS

<TABLE>
<CAPTION>
NAME OPTION SHARES
- ---- -------------
<S> <C>
Theodore N. Gillette 0
Richard Sanchez 0
Richard T. Welch 150,000
Other Company Employees (excludes Florida Eye & Retina) 563,302
Outside Non-Management Directors 6,665
Non-Shareholder Affiliated Professionals
and Non-Employee Consultants 120,659
-------

TOTAL OPTION SHARES (**) 840,626
=======
</TABLE>

- ------------------
(**) Subject to adjustment pursuant to the terms of the Option Agreements and
grants of stock options for acquisitions closed in escrow in September and
October.

<PAGE> 46
LIST OF WARRANTS

In connection with the Note Purchase Agreement dated December 30, 1996, as
amended April 18, 1997, there are outstanding Warrants which are exchangeable
for up to a maximum of 208,333 shares of Common Stock of the Company, subject
to adjustment pursuant to the terms of the Warrants.

In connection with the Note Purchase Agreement dated February 28, 1997,
there are outstanding Warrants which are exchangeable for up to a maximum of
333,333 shares of Common Stock of the Company, subject to adjustment pursuant
to the terms of the Warrant.

In connection with the Amended and Restated Note and Warrant Purchase
Agreement dated June 13, 1997, there are outstanding Warrants which are
exchangeable for up to a maximum of 210,000 shares of Common Stock of the
Company, subject to adjustment pursuant to the terms of the Warrant.

Warrants issuable to Prudential Securities Credit Corporation in connection
with this Agreement include (i) 50,000 warrants, the Commitment Warrant, and
(ii) 150,000 warrants for a pro rata funding fee the Funding Warrant. In
addition, warrants issuable to Prudential Securities of (i) 25,000 Warrants for
M&A advisory services, (ii) 10,000 warrants for a bank credit facility finders
fee, and (iii) 40,000 warrants issuable upon closing of a bank credit facility.
<PAGE> 47
<TABLE>
<CAPTION>
VISION TWENTY-ONE REGISTRATION RIGHTS*
================================================================================
MAXIMUM % MAXIMUM
DATE OF SHARES NUMBER OF
SHARES NUMBER OF WITH SHARES
SHAREHOLDER WERE SHARES REGISTRATION ELIGIBLE FOR
ISSUED ISSUED RIGHTS REGISTRATION
================================================================================
<S> <C> <C> <C> <C>
Bruce S. Maller 05/10/96 135,166 20% 27,033

10/20/96 26,189 5,237
- -------------------------------------------------------------------------------
Richard L. Lindstrom, 09/09/96 123,554 20% 24,710
M.D.
- -------------------------------------------------------------------------------
John W. Lahr, O.D. 12/31/96 54,754 50% 27,377
- -------------------------------------------------------------------------------
John W. Lahr, O.D. 12/31/96 22,800 50% 11,400
and Mary Jo Lahr-
jtbte
- -------------------------------------------------------------------------------
Daniel B. Feller, M.D. 12/31/96 144,869 60% 86,921
- -------------------------------------------------------------------------------
Jeffrey I. Katz, M.D. 12/31/96 198,306 50% 99,153
- -------------------------------------------------------------------------------
Barry Kusman, M.D. 12/31/96 198,306 50% 99,153
- -------------------------------------------------------------------------------
Paul Smith, O.D. 12/31/96 32,808 60% 19,684
- -------------------------------------------------------------------------------
Paul Smith, O.D. 01/15/97 68,758 60% 41,254
- -------------------------------------------------------------------------------
Paul Smith, O.D. 01/15/97 68,758 60% 41,254
- -------------------------------------------------------------------------------
Gillette, Beiler & 01/15/97 9,077 60% 5,446
Associates, P.A.
- -------------------------------------------------------------------------------
Jerald B. Turner, M.D. 01/15/97 129,398 60% 77,638
- -------------------------------------------------------------------------------
Jerald B. Turner, M.D. 01/15/97 17,240 60% 10,344
to be held To be held
in escrow in escrow
- -------------------------------------------------------------------------------
William J. Fishkind, 01/15/97 171,723 60% 103,033
M.D.
- -------------------------------------------------------------------------------
Brock K. Bakewell, 01/15/97 155,993 60% 93,595
M.D.
- -------------------------------------------------------------------------------
Daniel B. Feller, M.D. 01/15/97 71,670 60% 43,002
- -------------------------------------------------------------------------------
</TABLE>
<PAGE> 48
<TABLE>
<CAPTION>
================================================================================
MAXIMUM % MAXIMUM
DATE OF SHARES NUMBER OF
SHARES NUMBER OF WITH SHARES
SHAREHOLDER WERE SHARES REGISTRATION ELIGIBLE FOR
ISSUED ISSUED RIGHTS REGISTRATION
================================================================================
<S> <C> <C> <C> <C>
Daniel B. Feller and 01/15/97 63,983 60% 38,389
Sharon Feller, jtwros
- --------------------------------------------------------------------------------
Robert Kennedy, O.D., 01/15/97 69,242 60% 41,545
- --------------------------------------------------------------------------------
Robert Kennedy, O.D. 01/15/97 6,209 60% 3,725
to be held To be held in
in escrow escrow
- --------------------------------------------------------------------------------
Robert Kennedy, O.D. 01/15/97 7,653 60% 4,591
- --------------------------------------------------------------------------------
Richard L. Lindstrom, 01/15/97 123,554 60% 91,039
M.D.
- --------------------------------------------------------------------------------
Thomas W. Samuelson, 01/15/97 41,185 60% 30,346
M.D.
- --------------------------------------------------------------------------------
David R. Hardten, 01/15/97 82,369 60% 60,692
M.D.
- --------------------------------------------------------------------------------
Gregory W. Kraupa, 01/15/97 31,572 60% 18,943
O.D.
- --------------------------------------------------------------------------------
Bradley D. Richter, 01/15/97 31,572 60% 18,943
O.D.
- --------------------------------------------------------------------------------
Mark Sarno, O.D. 01/20/97 12,346 60% 7,407

02/20/97 23,960 14,376
- --------------------------------------------------------------------------------
Mark Beiler, O.D. 01/20/97 12,728 60% 7,636

02/20/97 23,584 14,150
- --------------------------------------------------------------------------------
BSM Investments, Ltd. 01/27/97 108,976
- --------------------------------------------------------------------------------
Mark Salta, O.D. 02/20/97 23,971 60% 14,382
- --------------------------------------------------------------------------------
Dan Palmisano, O.D. 02/20/97 21,054 60% 12,632
- --------------------------------------------------------------------------------
Al Lappano, O.D. 02/20/97 21,049 60% 12,629
- --------------------------------------------------------------------------------
</TABLE>
<PAGE> 49
<TABLE>
<CAPTION>
MAXIMUM % MAXIMUM
DATE OF SHARES NUMBER OF
SHARES NUMBER OF WITH SHARES
SHAREHOLDER WERE SHARES REGISTRATION ELIGIBLE FOR
ISSUED ISSUED RIGHTS REGISTRATION
==================================================================================
<S> <C> <C> <C> <C>
Mona Henri, O.D. 02/20/97 15,252 60% 9,151
- ----------------------------------------------------------------------------------
Richard Hernadez, O.D. 02/20/97 11,980 60% 7,188
- ----------------------------------------------------------------------------------
Jennifer Stanely, O.D. 02/20/97 11,980 60% 7,188
- ----------------------------------------------------------------------------------
Richard L. Short, D.O. 03/31/97 128,541 60% 77,124
- ----------------------------------------------------------------------------------
Thomas Rodcay, M.D. 05/01/97 118,744 50% 59,372
- ----------------------------------------------------------------------------------
Jeffery Felter, M.D. 05/01/97 50,406 50% 25,203
- ----------------------------------------------------------------------------------
Paul Smith 05/01/97 11,411 30% 3,423
- ----------------------------------------------------------------------------------
Lorin M. Swagel 06/01/97 123,778 30% 37,133
- ----------------------------------------------------------------------------------
James Wootton 06/01/97 123,778 30% 37,133
- ----------------------------------------------------------------------------------
Wendy Wootton 06/01/97 72,444 30% 21,733
- ----------------------------------------------------------------------------------
Lorin M. Swagel 06/01/97 38,960 30% 11,688
to be held 30% to be held in
in escrow escrow
- ----------------------------------------------------------------------------------
James Wootton 06/01/97 38,959 30% 11,687
to be held to be held in
in escrow escrow
- ----------------------------------------------------------------------------------
Wendy Wootton 06/01/97 19,480 30% 5,844
to be held to be held in
in escrow escrow
- ----------------------------------------------------------------------------------
Craig R. Cassidy 06/01/97 49,901 30% 14,970
- ----------------------------------------------------------------------------------
Sanford R. Moretsky 06/01/97 59,183 30% 17,754
============ ============
TOTAL 3,085,619 1,554,250
</TABLE>

* All shareholders of BBG-COA, Inc. have received registration rights.

<PAGE> 1

EXHIBIT 5.1

SHUMAKER, LOOP & KENDRICK, LLP
101 East Kennedy Boulevard
Suite 2800
Tampa, Florida 33602

November 18, 1997

Vision Twenty-One, Inc.
7209 Bryan Dairy Road
Largo, Florida 34647

Attn: Mr. Theodore N. Gillette, CEO

Re: Vision Twenty-One, Inc. Securities and Exchange
Commission Registration Statement on Form S-1
(Registration No. 333-39031) 3,220,000 Shares of Common
Stock, $.001 Par Value Our File No.: V78057/84670

Ladies and Gentlemen:

We are legal counsel to Vision Twenty-One, Inc., a Florida
corporation (the "Company"), and have acted as such in the preparation and
filing of its Registration Statement on Form S-1 (Registration No. 333-39031)
with the Securities and Exchange Commission (the "SEC") pursuant to the
requirements of the Securities Act of 1933, as amended, and the General Rules
and Regulations of the SEC promulgated thereunder for the registration of
3,220,000 Shares (the "Shares") of the Common Stock, par value $.001 (the
"Common Stock"), of the Company. Of these Shares, 2,800,000 are to be issued
and sold by the Company and 420,000 Shares are to be issued and sold by the
Company if the underwriters exercise their option to purchase such Shares to
cover over-allotments. In connection with the following opinion, we have
examined and have relied upon such documents, records, certificates, statements
and instruments as we have deemed necessary and appropriate to render the
opinion herein set forth.

<PAGE> 2

Vision Twenty-One, Inc.
November 18, 1997
Page 2

Based on the foregoing, it is our opinion that the Shares,
when and if issued and sold in the manner set forth in the Registration
Statement, will be legally and validly issued, fully paid and non-assessable.

The undersigned hereby consents to (i) filing this opinion as
Exhibit 5.1 to the Registration Statement, and (ii) using its name in the
Registration Statement under the following caption of the Prospectus:
"LEGAL MATTERS".

Very truly yours,

/s/ Shumaker, Loop & Kendrick, LLP

SHUMAKER, LOOP & KENDRICK, LLP

<PAGE> 1
EXHIBIT 10

EMPLOYMENT AGREEMENT

THIS EMPLOYMENT AGREEMENT, dated as of the ____ day of
__________, 1997 (the "Agreement"), by and between VISION TWENTY-ONE, INC., a
Florida corporation (the "Company"), and Michael P. Block (the "Executive").

WHEREAS, the Company is presently engaged in the business of
providing managed eye care services and practice management services for
optometry, ophthalmology and related eye care practices.

WHEREAS, the Executive has many years of experience in the
optical industry as an executive officer and key employee of Block Vision, Inc.
("Block Vision").

WHEREAS, the Company has recently acquired Block Vision from
the Executive and its other owners effective as of October 31, 1997 and will
continue to operate Block Vision, Inc. as a separate subsidiary of the Company.

WHEREAS, the Company wishes to assure itself of the services
of the Executive for the period provided in this Agreement and the Executive is
willing to serve in the employ of the Company for such period upon the terms
and conditions hereinafter set forth.

NOW THEREFORE, in consideration of the mutual covenants
herein contained, the parties, intending to be legally bound, hereby agree as
follows:

1. EMPLOYMENT

The Company hereby agrees to employ the Executive upon the
terms and conditions herein contained, and the Executive hereby agrees to
accept such employment for the term described below. The Executive agrees to
serve as President of Block Vision. In such capacity, the Executive shall be
responsible for the management of Block Vision, shall report only to the
Company's Chief Executive Officer and the Board of Directors of Block Vision
and shall have such other powers and responsibilities consistent with his
position as the Chief Executive Officer and Board of Directors may assign to
him.

Throughout the term of this Agreement, the Executive shall
devote his best efforts and substantially all of his business time and services
to the business and affairs of the Company. This shall include business travel
by the Executive at a level consistent with the reasonable business needs of
Block Vision and the Executive's business travel obligations in the past.
Neither the principal place of business of Block Vision nor the Executive will
be relocated outside of the Boca Raton metropolitan area without the
Executive's consent. The Executive will be permitted to fulfill his obligations
under this Agreement from any location other than the principal place of
business of the Company or Block Vision for up to one (1) month per year,
provided that such location has a telephone and a facsimile machine and,
provided, further, that the Executive will return promptly as practicable in
the event that the business of the Company or its subsidiaries will be
materially adversely affected by his absence. The above provisions hereof shall
be in addition to the vacation days specified in Section 4(d) hereof.

2. TERM OF AGREEMENT

The initial term of employment under this Agreement shall
commence as of _______________, 1997 (the "Effective Date") and shall end on
December 31, 1999. After the expiration of such initial employment term, the
term of the Executive's employment hereunder may be extended by mutual consent
of the parties. The parties shall each endeavor to give the other at least 90
days' advance written notice of their intentions regarding renewal of the
Agreement, but any such renewal shall be conditioned upon the execution and
delivery of an appropriate amendment to this Agreement.
<PAGE> 2
Notwithstanding the foregoing, the Company shall be entitled
to terminate this Agreement immediately, subject to a continuing obligation to
make any payments required under Section 5 below, if the Executive (i) becomes
disabled as described in Section 5(b), (ii) is terminated for Cause, as defined
in Section 5(c), or (iii) voluntarily terminates his employment before the
current term of this Agreement expires, as described in Section 5(d).

3. SALARY AND BONUS

The Executive shall receive a base salary during the term of
this Agreement at a rate of not less than $250,000 per annum, payable in
installments consistent with the Company's normal payroll schedule, but in no
event less frequently than monthly. The Compensation Committee of the Company's
Board shall consult with the Chief Executive Officer of the Company and review
the Executive's base salary at intervals no less frequent than annually, and
may adjust the Executive's annual base salary for 1999 and future years as the
Committee deems to be appropriate.

The Executive shall also be eligible to receive an annual
Performance Bonus from the Company for each full fiscal year of the Company
during the term of this Agreement. The amount of the Performance Bonus earned
shall be based on the EBITDA of Block Vision for the fiscal year. If the EBITDA
of Block Vision for a fiscal year exceeds the Base EBITDA Target for the fiscal
year set forth below, the Executive shall earn a Performance Bonus for the
fiscal year equal to twelve and one-half percent (12.5%) of his annual base
salary (as in effect on the last day of the fiscal year). If Block Vision's
EBITDA for the fiscal year also exceeds the EBITDA Target for the year (after
taking into account payment of the Performance Bonus earned under the preceding
sentence), the Executive shall be paid an increased Performance Bonus equal to
an additional twelve and one-half percent (12.5%) of his annual base salary. If
Block Vision's EBITDA for the fiscal year also exceeds the Supplemental EBITDA
Target for the year set forth below (after taking into account payment of the
Performance Bonus earned under the preceding sentences), the Executive shall be
paid an increased Performance Bonus equal to an additional twenty-five percent
(25%) of his annual base salary. For this purpose, Block Vision's EBITDA shall
mean its earnings before interest, taxes, depreciation and amortization,
determined in accordance with generally accepted accounting principles, and
calculated in a manner consistent with the Company's audited financial
statements for the fiscal year, but adjusted to eliminate any allocation of
overhead from the Company or other intercompany revenue or expense items, and
also adjusted to disregard any managed care accounts assigned to Block Vision
by the Company. This calculation shall be prepared and certified by the
Company's independent public accountants, and the Company will maintain such
separate books and records for Block Vision as may be required to prepare this
calculation (taking into account only those operations which comprised Block
Vision at the Effective Date and any new lines added with the consent of the
Executive).

Unless revised by the Compensation Committee, with the Executive's
consent, the Base EBITDA, EBITDA and Supplemental EBITDA Targets for each
fiscal year during the term of this Agreement shall be as follows:

<TABLE>
<CAPTION>
===============================================================================
FISCAL YEAR ENDING BASE EBITDA EBITDA SUPPLEMENTAL EBITDA
TARGET TARGET TARGET
- -------------------------------------------------------------------------------
<S> <C> <C> <C>
December 31, 1998 $4,550,000 $4,800,000 $5,000,000
- -------------------------------------------------------------------------------
December 31, 1999 $5,800,000 $6,000,000 $6,200,000
===============================================================================
</TABLE>

If these EBITDA targets are not fully achieved for the fiscal
year, the portion of such bonus which shall be paid to the Executive shall be
such reduced amount as may be determined to be appropriate by the Compensation
Committee of the Company's Board, based on Block Vision's partial achievement
of the performance measures.

The Executive's Performance Bonus for a fiscal year shall be
paid within one hundred and twenty (120) days after the end of such fiscal year
unless deferred by the Executive pursuant to the terms of any deferred
compensation plan of the Company.

2
<PAGE> 3
4. ADDITIONAL COMPENSATION AND BENEFITS

The Executive shall receive the following additional compensation and
welfare and fringe benefits.

(a) Stock Options. Pursuant to a Stock Option Agreement of even date
herewith, the Executive is being granted stock options with respect to
40,000 shares of the Company's stock. During the term of this Agreement,
Executive shall be eligible for additional stock options under the
Company's Stock Incentive Plan to the extent that the Compensation
Committee of the Company's Board determines such awards to be appropriate.

(b) Medical Insurance. The Company shall provide the Executive and
his dependents at no cost to them with health, life and disability
insurance coverage on a basis substantially equivalent to that available to
key employees of Block Vision prior to its acquisition by the Company.

(c) Automobile. The Company shall continue provide the Executive
with the use of the same company automobile currently provided to him or a
comparable recent model vehicle, and shall pay for insurance at the level
provided by Block Vision on the Effective Date.

(d) Vacation. The Executive shall be entitled to at least four weeks
at paid vacation during such year during the term of this Agreement,
including any vacation for 1997 accrued but unused at the Effective Date.
Unused vacation of up to two (2) weeks per year may be carried over,
subject to the restrictions in the Company's policy on paid time off for
management employees.

(e) Business Expenses. The Company shall reimburse the Executive for
all reasonable expenses he incurs in promoting the Company's business,
including expenses for travel, entertainment of business associates,
service and usage charges for business use of cellular phones, and similar
items, upon presentation by the Executive from time to time of an itemized
account of such expenditures. The Executive shall be entitled to the use
of Company credit cards for charging business expenses, in accordance with
the Company's policy for management employees.

In addition to the benefits provided pursuant to the preceding
paragraphs of this Section 4, the Executive shall be eligible to participate in
such other executive compensation and retirement plans of the Company as are
applicable generally to other officers, and in such indemnification or
liability insurance arrangements, welfare benefit plans, programs, practices
and policies of the Company, as are generally applicable to other key employees.

5. PAYMENT UPON TERMINATION

(a) Involuntary Termination. If the Executive's employment is
terminated by the Company during the term of this Agreement, other than for
death, disability as described in paragraph (b), for Cause as described in
paragraph (c) or a voluntary termination by the Executive as described in
paragraph (d), the Company shall be obligated to make a series of monthly
payments to the Executive for each month during the remaining term of this
Agreement, but not less than twelve 912) months. Each monthly payment shall be
equal to one-twelfth (1/12th) of the sum of (i) Executive's highest annual base
salary in effect during the twelve (12) months preceding such termination and
(ii) the Performance Bonus earned under Section 3 during the term of this
Agreement, if any, earned for the prior fiscal year, provided, however, that
such payments shall be reduced and offset by any amounts the Executive is
entitled to receive from any other employer as compensation for services
performed during such month (including services performed as a consultant,
independent contractor, or a partner). The Executive shall also receive any
nonforfeitable benefits already earned and payable to him under the terms of any
deferred compensation, incentive or other benefit plan maintained by the
Company, payable in accordance with the terms of the applicable plan. Any
unvested Stock Options held by the Executive shall become vested and exercisable
for a period of sixty days following the date of termination.

(b) Disability. The Company shall be entitled to terminate this
Agreement, if the Board determines that the Executive has been unable to
perform a substantial portion of his duties for at least ninety (90)

3
<PAGE> 4
consecutive days because of a medically diagnosable physical or mental
condition, and has received a written opinion from an independent physician
acceptable to the Board that such condition prevents the Executive from
resuming full performance of his duties and is likely to continue for an
indefinite period. Upon such termination, the Company shall pay to Executive a
monthly disability benefit equal to one-twelfth (1/12th) of his current annual
base salary at the time he became permanently disabled during the first six
months following the dates of disability, and one-half of such amount
thereafter. Payment of such disability benefit shall commence on the last day
of the month following the date of the termination by reason of permanent
disability and cease with the earliest of (i) the month in which the Executive
returns to active employment, either with the Company or otherwise, (ii) the
end of the initial term of this Agreement, or the current renewal term, as the
case may be, or (iii) the twenty-fourth month after the date of the
termination. Any amounts payable under this Section 5(b) shall be reduced by
any amounts paid to the Executive under any long-term disability plan or other
disability program or insurance policies maintained or provided by the Company.

(c) Termination for Cause. If the Executive's employment is
terminated by the Company for Cause, the amount the Executive shall be
entitled to receive from the Company shall be limited to his base salary
accrued through the date of termination, and any vested, nonforfeitable
benefits already earned and payable to the Executive under the terms of
deferred compensation or incentive plans maintained by the Company.

For purposes of this Agreement, the term "Cause" shall be limited to
(i) willful disloyalty to the Company, including embezzlement, fraud,
misappropriation of material corporate assets or a breach of the covenants set
forth in Sections 9 and 10 below; or (ii) the Executive being convicted of a
felony; or (iii) the Executive being convicted of any lesser crime committed in
connection with the performance of his duties hereunder or involving moral
turpitude; or (iv) the willful, intentional and material failure by the
Executive to substantially satisfy his obligations under this Agreement as
directed by the Board (other than any such failure resulting from the
Executive's incapacity due to physical or mental disability). Notwithstanding
the foregoing, no termination pursuant to Subsection (iv) shall be treated as a
termination for Cause unless the Board has provided the Executive with at least
30 days prior written notice identifying the alleged breach of his obligations,
given the Executive a reason opportunity to meet with the Board of Directors
and argue that was no willful, intentional and material breach.

(d) Limited Payments Upon Breach by the Executive. If the Executive
breaches his obligations under this Agreement by resigning or otherwise
voluntarily terminating his employment before the end of the current term of
this Agreement, the amount the Executive shall be entitled to receive from the
Company shall be limited to his base salary accrued through the date of
termination, and any nonforfeitable benefits already earned and payable to the
Executive under the terms of any deferred compensation or incentive plans of
the Company.

For purposes of this paragraph, a resignation by the Executive shall
not be deemed to be voluntary if the Executive resigns during the period of
three months after the date (1) he is assigned to a position of lesser rank
(other than for Cause, or by reason of permanent disability), (2) he is
assigned duties materially inconsistent with his position as President of Block
Vision, (3) he is directed to report to anyone other than the Company's Chief
Executive Officer or the Board of Directors, or (4) if the Company has breached
any of its material obligations under this Agreement.

6. EFFECT OF CHANGE IN CORPORATE CONTROL

(a) In the event of a Change in Corporate Control, any stock options
granted to the Executive under the terms of the Company's Stock Incentive Plan
shall become immediately vested in full and exercisable in full.

(b) For purposes of this Agreement, a "Change in Corporate Control"
shall include any of the following events:

(1) The acquisition in one or more transactions of more than
thirty percent of the Company's outstanding Common Stock by any
corporation, or other person or group (within the meaning of Section
14(d)(3) of the Securities Exchange Act of 1934, as amended);

4
<PAGE> 5
(2) Any merger or consolidation of the Company into or
with another corporation in which the Company is not the surviving
entity, or any transfer or sale of substantially all of the assets
of the Company or any merger or consolidation of the Company into or
with another corporation in which the Company is the surviving entity
and, in connection with such merger of consolidation, all or part of
the outstanding shares of Common Stock shall be changed into or
exchanged for other stock or securities of any other person, or cash,
or any other property.

(3) Any election of persons to the Board of Directors
which causes a majority of the Board of Directors to consist of persons
other than (i) persons who were members of the Board of Directors on
November 1, 1997, and (ii) persons who were nominated for election as
members of the Board by the Board of Directors (or a Committee of the
Board) at a time when the majority of the Board (or of such Committee)
consisted of persons who were members of the Board of Directors on
November 1, 1997; provided, that any person nominated for election by
the Board of Directors composed entirely of persons described in (i)
or (ii), or of persons who were themselves nominated by such Board,
shall for this purpose be deemed to have been nominated by a Board
composed of persons described in (i).

(4) Any person, or group of person, announces a tender
offer for at least thirty percent (30%) of the Company's Common Stock.

provided that, no acquisition of stock by any person in a public offering or a
private placement of the Company's common stock or other transaction approved
by the Company's Board of Directors shall be considered a Change in Corporate
Control.

(c) Notwithstanding anything else in this Agreement, the amount of
severance compensation payable to the Executive as a result of a Change in
Corporate Control under this Section 6, or otherwise, shall be limited to the
maximum amount the Company would be entitled to deduct pursuant to Section 280G
of the Internal Revenue Code of 1986, as amended

7. DEATH

If the Executive dies during the term of this Agreement, the
Company shall pay to the Executive's estate a lump sum payment equal to the sum
of (i) the Executive's base salary accrued through the date of death plus (ii)
the total unpaid amount of any bonuses earned with respect to the fiscal year
of the Company most recently ended, plus (iii) an amount equal to six month's
base salary at the rate in effect on the date of death. In addition, the death
benefits payable by reason of the Executive's death under any retirement,
deferred compensation or other employee benefit plan maintained by the Company
shall be paid to the beneficiary designated by the Executive in accordance
with the terms of the applicable plan or plans.

8. WITHHOLDING

The Company shall withhold and deduct from any payment
hereunder any federal, state or local taxes of any kind required by law to be
withheld or deducted with respect to any such payment.

9. PROTECTION OF CONFIDENTIAL INFORMATION

The Executive agrees that he will keep all confidential and
proprietary information of the Company or Block Vision relating to its business
(including, but not limited to, information regarding the Company's customers,
pricing policies, methods of operation, proprietary computer programs and trade
secrets) confidential, and that he will not (except with the Company's prior
written consent), while in the employ of the Company or thereafter, disclose any
such confidential information to any person, firm, corporation, association or
other entity, other than in furtherance of his duties hereunder, and then only
to those with a "need to know." The Executive shall not make use of any such
confidential information for his own purposes or for the benefit of any person,
firm, corporation, association or other entity (except the Company) under any
circumstances during or after the term of his employment. The foregoing shall
not apply to any information which is already in the public domain, is generally
disclosed by the Company or is

5
<PAGE> 6
otherwise in the public domain at the time of disclosure or is information
rightfully in the possession of the Executive at the Effective Date of this
Agreement; provided that the provisions of this Section 9 shall not apply to
the Executive's know how to the extent utilized by him in any subsequent
employment that is not in violation of Section 10 of this Agreement.

The Executive recognizes that because his work for the
Company will bring him into contact with confidential and proprietary
information of the Company, the restrictions of this Section 9 are required for
the reasonable protection of the Company and its investments and for the
Company's reliance on and confidence in the Executive.

10. COVENANT NOT TO COMPETE

The Executive hereby agrees that he will not, either during
the Employment Term or during the period of thirty-six (36) months from the
time the Executive's employment under this Agreement is terminated, perform
services comprising Competitive Business Activities on behalf of any
corporation, health maintenance organization or other enterprise which is
engaged in such Competitive Business Activities at any location within thirty
(30) miles of an ophthalmology or optometry practice which has either entered
into a business management agreement with the Company or become a part of LADS
or other managed eye care network organized by the Company. For this purpose,
"Competitive Business Activities" shall mean (i) providing practice management
or similar business support services to ophthalmology, optometry practices or
related eye care facilities, (ii) organizing and operating managed eye care
networks, or (iii) any other line of business in which Block Vision, Inc. was
engaged during the term of this Agreement or the three-years preceding the
Effective Date. The Executive will be deemed to be engaged in such Competitive
Business Activities if he performs such Competitive Business Activities as an
employee, officer, director, consultant, agent, partner, proprietor, or other
participant. Notwithstanding the foregoing, the Executive will not be
considered to violate this convenant not to compete by reason of (i) employment
with a full-service health maintenance organization, (ii) employment with a
physician practice management firm that does not contract with ophthalmology
and/or optometry practices or only does so as an incidental part of a general
practice management business; or (iii) the ownership of no more than 5 percent
of the stock of a publicly traded corporation engaged in a Competitive Business
Activities.

The Executive also agrees that he shall not, at any time
during such period of thirty-six (36) months from the time his employment under
this Agreement ceases (for whatever reason).

(i) solicit any employee or full-time consultant of the Company for the
purposes of hiring or retaining such employee or consultant, or

(ii) contact any present or prospective contract provider of the Company
or any health maintenance organization or other payor presently under
contract with the Company to solicit such a person to enter into a
practice management agreement or managed eye care contract with any
organization other than the Company.

11. INJUNCTIVE RELIEF

The Executive acknowledges and agrees that it would be
difficult to fully compensate the Company for damages resulting from the breach
or threatened breach of the convenants set forth in Sections 9 and 10 of this
Agreement and accordingly agrees that the Company shall be entitled to
temporary and injunctive relief, including temporary restraining orders,
preliminary injunctions and permanent injunctions, to enforce such provisions
in any action or proceeding instituted in the United States District Court for
the Western District of Florida or in any court in the State of Florida having
subject matter jurisdiction. This provision with respect to injunctive relief
shall not, however, diminish the Company's right to claim and recover damages.

It is expressly understood and agreed that although the
parties consider the restrictions contained this Agreement to be reasonable, if
a court determines that the time or territory or any other restriction
contained in this Agreement is an unenforceable restriction on the activities
of the Executive, no such provision of this Agreement shall be rendered void
but shall be deemed amended to apply as to such maximum time and territory and
to such extent as such court may judicially determine or indicate to be
reasonable.

6
<PAGE> 7

12. SEPARABILITY

If any provision of this Agreement shall be declared to be
invalid or unenforceable, in whole or in part, such invalidity or
unenforceability shall not affect the remaining provisions hereof which shall
remain in full force and effect.

13. ASSIGNMENT

This Agreement shall be binding upon and inure to the benefit
of the heirs and representatives of the Executive and the assigns and successors
of the Company, but neither this Agreement nor any rights hereunder shall be
assignable or otherwise subject to hypothecation by the Executive.

14. NOTICE

For the purposes of this Agreement, notices and all other communications
provided for in the Agreement shall be in writing and shall be deemed to have
been duly given when personally delivered or sent by certified mail, return
receipt requested, postage prepaid, or by expedited (overnight) courier with an
established national reputation, shipping prepaid or billed to sender, in either
case addressed to the following addresses:

To the Company:

Vision Twenty-One, Inc.
7209 Bryan Dairy Road
Largo, FL 33777
Attn: T. Gillette

To the Executive:

Michael P. Block
621 NW 53rd Street
Suite 600
Boca Raton, FL 44387-8238

All notices and communication shall be deemed to have been received on the
date of delivery thereof, on the third business day after the mailing thereof,
or on the second day after deposit thereof with an expedited courier service,
except that notice of change of address shall be effective only upon receipt.

15. ARBITRATION

Subject to the Company's right to seek injunctive relief for
any violations of the convenants set forth in Sections 9 and 10 of this
Agreement, any controversy or claim arising out of or relating to this Agreement
or any transactions provided for herein, or the breach thereof, other than a
claim for injunctive relief shall be settled by arbitration in accordance with
the Rules of the American Arbitration Association (the "Rules") in effect at the
time demand for arbitration is made by any party. On arbitrator shall be named
by the Company, a second shall be named by Executive and the third arbitrator
shall be named by the two arbitrators so chosen. Arbitration shall occur in
Orlando, Florida or such other location as may be mutually agreed to by the
Company and Executive. The award made by all or a majority of the panel of
arbitrators shall be final and binding. The prevailing party shall be entitled
to an award of pre- and post-award interest as well as reasonable attorneys'
fees, costs and expenses incurred in connection with the arbitration and any
judicial proceedings related thereto.

16. ENTIRE AGREEMENT

This Agreement represents the entire agreement of the parties
and shall supersede any and all previous contracts, arrangements or
understandings between the Company and the Executive. The Agreement may be

7
<PAGE> 8
amended at any time by mutual written agreement of the parties hereto.

17. GOVERNING LAW

This Agreement shall be construed, interpreted, and governed in
accordance with the laws of the State of Florida, other than the conflict of
laws provisions of such laws.

IN WITNESS WHEREOF, the Company has caused this Agreement to be
duly executed, and the Executive has hereunto set his hand, as of the day and
year first above written.

Attest: VISION TWENTY-ONE, INC.

By
- ------------------------- ----------------------------
Title:

EXECUTIVE:

- ------------------------- -------------------------------
Michael P. Block

<PAGE> 1

EXHIBIT 10.55

SUBJECT TO APPROVAL
OF PRUDENTIAL SECURITIES
INCORPORATED'S BUSINESS
REVIEW COMMITTEE

October 2, 1997

Mr. Richard T. Welch
Chief Financial Officer and Treasurer
Vision Twenty-One, Inc.
7209 Bryan Dairy Road
Largo, Florida 33777

Dear Mr. Welch:

This will confirm the understanding and agreement (the "Agreement")
between Prudential Securities Incorporated ("Prudential Securities") and Vision
Twenty-One, Inc. (the "Company") as follows:

1. The Company hereby engages Prudential Securities as its exclusive
agent in arranging a bank credit facility of up to $50 million (the
"Facility") for , and acceptable to the Company with a limited number
of commercial banks and/or other financial institutions (the
"Investors").

2. Prudential Securities hereby accepts the engagement and in that
connection agrees to:

(a) assist the Company in the preparation of a Private Placement
Memorandum (the "Memorandum") describing the Company and the
Facility; which Memorandum shall not be made available to
potential Investors until such Memorandum and its use shall
be approved by the Company;

(b) use its best efforts to privately place the Facility; and

(c) prepare with the assistance and approval of the Company any
other communications to be used in arranging the Facility,
whether in the form of letter, circular, notice or otherwise.

3. In connection with Prudential Securities' engagement, the Company will
furnish Prudential Securities with any information concerning the
Company which Prudential Securities reasonably deems appropriate and
will provide Prudential Securities with access to the Company's
officers, directors, accountants, counsel, and other advisors. The
Company represents and warrants to Prudential Securities that all
such information concerning the Company (including, without
limitation, all information contained in the Memorandum and in
communications prepared pursuant to paragraph 2(c) hereof) will be
true and accurate in all material respects and will not contain any
untrue statement of a material fact or omit to state a material fact
necessary in order to make the statements therein not misleading in
light of the circumstances under which such statements are

<PAGE> 2

made. The Company represents and warrants to Prudential Securities
that any financial projections or forecasts provided to Prudential
Securities with respect to the Company represent the best currently
available estimates by the management of the Company of the future
financial performance by the company and are bases upon reasonable
assumptions. The Company acknowledges and agrees that Prudential
Securities will be using and relying upon such information supplied
by the Company and its officers, agents and others and any other
publicly available information concerning the Company without any
independent investigation or verification thereof or independent
appraisal by Prudential Securities of the Company or its business or
assets.

4. As compensation for the services to be rendered by Prudential
Securities hereunder, at closing, the Company shall pay Prudential
Securities a placement fee equivalent to: (a) the greater of (i)
$200,000 or (ii) one-percent (1.0%) of the total amount committed
under the Facility; plus (b) warrants to purchase 40,000 shares of
the Company's common stock with a strike price equivalent to the
closing price of the Company's common stock on the date of issuance
of the warrants. Such compensation shall be payable with respect to
any arrangement of the Facility or similar financing that occurs
either (a) during the term of Prudential Securities' engagement
hereunder regardless of whether the Investor was identified by
Prudential Securities or (b) at any time during a period of 12 months
following the effective date of termination of Prudential Securities'
engagement hereunder and the Facility involves an Investor identified
by Prudential Securities or with whom Prudential Securities
substanially discussed the Facility during the term of its engagement
hereunder.

The Company shall also pay Prudential Securities a non-refundable
retainer fee (the "Retainer Fee") upon the signing and execution of
this engagement letter. The Retainer Fee shall consist of warrants to
purchase 10,000 shares of the Company's common stock with a strike
price equivalent to the closing price of the Company's common stock
on the date of issuance of the warrants. The Retainer Fee shall
become an obligation of the Company upon the Company's execution of
this Agreement and said obligation shall remain in full force and
effect until paid in full, regardless of whether or not the Company
terminates the Agreement prior to the above execution date.

5. The Company shall reimburse Prudential Securities for its reasonable
and customary out-of-pocket and incidental expenses not to exceed
$20,000 withot the prior approval of the company, incurred during
term of its engagement hereunder, including the fees and expenses of
its legal counsel and those of any advisor retained by Prudential
Securities.

6. Since Prudential Securities will be acting on behalf of the Company
in connection with this engagement, the Company agrees to indemnify
Prudential Securities as set forth in a separate letter agreement,
dated the date hereof, between Prudential Securities and the Company.

7. The Company agrees that during the term of Prudential Securities'
engagement hereunder it will not contact or solicit institutions or
other entities other than the Investors as potential participants in
the Facility.

-2-
<PAGE> 3

8. The term of Prudential Securities' engagement hereunder as the
Company's exclusive agent shall extend from the date hereof through
March 31, 1997. Subject to the provisions of paragraphs 3 through 6,
the last sentence of paragraph 8, and paragraphs 9 through 14 which
shall survive any termination of this Agreement, either party may
terminate the Prudential Securities' engagement hereunder at any time,
with or without cause, by giving the other party at least 10 days'
prior written notice. Upon the termination of the Prudential
Securities' engagement, the Company shall send a letter to each
Investor in form and substance acceptable to Prudential Securities'
notifying them of such termination.

9. Any advice to be provided by Prudential Securities' under this
Agreement, and the Memorandum, shall not be publicly disclosed or made
available to third parties, other than the Investors, without
Prudential Securities; prior consent except as may otherwise be
required by (i) law or regulation, (ii) order of any court or (iii)
order of any governmental agency. In addition, Prudential Securities
may not be publicly referred to without its prior consent.

10. The Company represents and warrants to Prudential Securities that
there are no brokers, representative or other persons which have an
interest in compensation due to Prudential Securities from any
transaction contemplated herein.

11. The benefits of this Agreement shall, together with the separate
indemnity letter, inure to the benefit of respective successors and
assigns of the parties hereto and of the indemnified parties hereunder
and thereunder and their successors and assigns and representatives,
and the obligations and liabilities assumed in this Agreement by the
parties hereto shall be binding upon their respective successors and
assigns.

12. This Agreement may not be amended or modified except in writing and
shall be governed by and construed in accordance with the laws of the
State of New York, without regard to the principles of conflicts of
laws.

13. Prudential Securities and the Company warrant to each other that each
shall comply with all applicable state and federal securities laws in
connection with the offers each makes on behalf of the Company under
this agreement and Prudential Securities further warrants that it will
make sales only to Accredited Investors or Qualified Institutional
Buyers as defined under the rules and regulations of the Securities
Act of 1933, as amended.

14. EACH OF PRUDENTIAL SECURITIES AND THE COMPANY (ON ITS OWN BEHALF AND,
TO THE EXTENT PERMITTED BY APPLICABLE LAW, ON BEHALF OF ITS
SHAREHOLDERS) WAIVES ALL RIGHTS TO TRIAL BY JURY IN ANY ACTION,
PROCEEDING OR COUNTERCLAIM (WHETHER BASED UPON CONTRACT, TORT OR
OTHERWISE) RELATED TO OR ARISING OUT OF THE ENGAGEMENT OF THE AGENTS
PURSUANT TO, OR THE PERFORMANCE BY THE AGENTS OF THE SERVICES
CONTEMPLATED BY THIS AGREEMENT.

Prudential Securities is delighted to accept this engagement and looks forward
to working with you on this assignment. Please confirm that the foregoing
correctly sets forth our agreement by

-3-

<PAGE> 4

signing the enclosed duplicate of this letter in space provided and returning
it, whereupon this letter shall constitute a binding agreement as of the date
first above written.

PRUDENTIAL SECURITIES INCORPORATED

By: /s/ Jon Burkland
-------------------------------

Title: Jon Burkland, Director
----------------------------

AGREED:

VISION TWENTY-ONE, INC.

By:
-----------------------------
Title:
--------------------------

-4-

<PAGE> 1

EXHIBIT 10.56

Highly Confidential - October 14, 1997
Subject to BRC Approval
Page 1

Board of Directors
Vision Twenty-One, Inc.
7209 Bryan Diary Road
Largo, FL 34647

Attn: Theodore N. Gillette

Dear Sirs:

This will confirm the understanding and agreement (the "Agreement")
between Prudential Securities Incorporated ("Prudential Securities") and Vision
Twenty-One, Inc. (the "Company") as follows:

1. The Company hereby engages Prudential Securities, and
Prudential Securities hereby accepts such engagement, as the
Company's exclusive financial advisor in connection with the
Company's proposed acquisition of BBG-COA, Inc. d.b.a. Block
Vision (the "Acquiree").

2. For purposes of this Agreement:

(a) The "Acquisition" shall mean any transaction or
series or combination of transactions, other than in
the ordinary course of trade or business, whereby,
directly or indirectly, control of, or a material
interest in, the Acquiree or any of its businesses,
assets or properties is purchased, leased or
otherwise acquired, including, without limitation, a
sale or exchange of capital stock or assets, a lease
of assets with or without a purchase option, a merger
or consolidation, a tender or exchange offer, a
leveraged buy-out, the formation of a joint venture
or partnership, a minority investment or any other
similar transaction. In the case of a tender or
exchange offer or a multi-step transaction which
contemplates the acquisition of more than 50% of the
Acquiree's voting power, the acquisition shall be
deemed to have been consummated upon the acquisition
by the Company of 50% or more of the Acquiree's
outstanding voting power or the ability to elect a
majority of the Board of Directors or similar body or
entity.

(b) "Consideration" shall mean the total value of all
cash, securities, the repurchase or buy-out of any
options or warrants, any agreements or other
property and any other consideration, including,
without limitation, any contingent, earned or other
consideration, paid or payable, directly or
indirectly, in connection with the Acquisition. The
value of any such securities (whether debt, equity,
options or warrants) other property or

<PAGE> 2

Highly Confidential - October 14, 1997
Subject to BRC Approval
Page 2

agreements shall be determined as follows: (1) the
value of securities that are freely tradeable in an
established public market shall be the last closing
market price of such securities prior to the public
announcement of the Acquisition; and (2) the value
of securities which are not freely tradeable or
which have no established public market, or if the
consideration consists of property or agreements
other than securities, the value of such securities
or other property or agreements shall be the fair
market value thereof as mutually agreed by the
Company and Prudential Securities. Consideration
shall be deemed to include any indebtedness,
including, without limitation, pension liabilities,
guarantees and other obligations, directly or
indirectly, assumed in connection with, or which
survives the closing of, the Acquisition.

3. The term of Prudential Securities engagement hereunder shall
extend from the date hereof until terminated. Either party may
terminate Prudential Securities engagement hereunder at any
time, with or without cause, by giving the other party at
least 10 days' prior written notice, subject to the provisions
of paragraphs 4 through 13, which shall survive any
termination (hereinafter "Termination") of this Agreement.

4. As compensation for the services rendered by Prudential
Securities hereunder, the Company shall pay Prudential
Securities as follows:

(a) Upon execution of this Agreement, the Company shall
issue to Prudential Securities warrants to purchase
25,000 shares of common stock of the Company (the
"Retainer Warrants"). The Retainer Warrants shall
expire five years from the date of the Agreement and
shall have an exercise price equal to the closing
price of the Company's common stock on the date of
this Agreement.

(b) If the Company announces or enters into an agreement
with respect to the Acquisition either during the
term of Prudential Securities engagement hereunder
or at any time during a period of 24 months
following the effective date of Termination of
Prudential Securities engagement hereunder, and the
Acquisition is thereafter consummated, then the
Company shall pay to Prudential Securities a success
fee of 2% of the Consideration paid in the
Acquisition, provided that such success fee shall be
at least $500,000.

(c) Compensation which is payable to Prudential
Securities pursuant to subparagraph 4(b) shall be
paid in cash by the Company to Prudential Securities
upon the consummation of the Acquisition, provided
that compensation paid or payable to Prudential
Securities in respect of

<PAGE> 3

Highly Confidential - October 14, 1997
Subject to BRC Approval
Page 3

Consideration which is contingent upon the
occurrence of some future event (e.g., the
realization of earnings projections) or pursuant to
the agreement relating to the Acquisition is to be
paid following the closing of the Acquisition shall
be paid by the Company to Prudential Securities at
the earlier of (i) the payment of such Consideration
or (ii) the time that the amount of such
Consideration can be determined.

5. The Company shall reimburse Prudential Securities for its
out-of-pocket and incidental expenses incurred in connection
with its engagement hereunder, promptly as requested,
including the fees and expenses of its legal counsel and
those of any advisor retained by Prudential Securities.

6. Because Prudential Securities will be acting on behalf of the
Company in connection with its engagement hereunder, the
Company agrees to indemnify Prudential Securities as set
forth in a separate letter agreement dated the date hereof
between Prudential Securities and the Company.

7. Prudential Securities shall have the right to place
advertisements in financial and other newspapers and journals
at its own expense describing its services to the Company
hereunder.

8. The Company acknowledges and agrees that Prudential
Securities will be using and relying upon the accuracy and
completeness of (i) information supplied by the Company, (ii)
publicly available information concerning the Acquiree, as
well as (iii) any information concerning the Acquiree
supplied by the Acquiree, without any independent
investigation or verification thereof or independent
appraisal by Prudential Securities of the Acquiree or its
business or assets.

9. Any advice, either oral or written, provided to the Company
by Prudential Securities hereunder shall not be publicly
disclosed or made available to third parties without the
prior written consent of Prudential Securities. In addition,
Prudential Securities may not be otherwise publicly referred
to without its prior consent.

10. In the event that any bridge loan or interim financing is to
be used in connection with the Acquisition, Prudential
Securities and its affiliates shall have the right to provide
all or a portion of such financing. In addition, if the
Company determines to raise funds for the Acquisition by
means of a public offering or a private placement, Prudential
Securities shall have the right to act as lead underwriter or
placement agent for such financing. Any decision by
Prudential Securities or its affiliates to provide such
financing or act in such capacity would be contained in a
separate letter which would include, among other things,
customary fees, indemnification, the terms of such financing,
conditions precedent, including due

<PAGE> 4

Highly Confidential - October 14, 1997
Subject to BRC Approval
Page 4

diligence, current conditions and approval by the requisite
committees, as well as customary representations and
warranties.

11. The Company represents and warrants to Prudential Securities
that there are no brokers, representatives or other persons
which have an interest in compensation due to Prudential
Securities from any transaction contemplated herein.

12. The benefits of this Agreement, together with the separate
indemnity letter, shall inure to the respective successors
and assigns of the parties hereto and of the indemnified
parties hereunder and their successors, assigns and
representatives, and the obligations and liabilities assumed
in this Agreement by the parties hereto shall be binding upon
their respective successors and assigns.

13. (a) This Agreement may not be amended or modified
except in writing and shall be governed by and
construed in accordance with the laws of the State
of New York, without regard to principles of
conflicts of laws.

(c) EACH OF PRUDENTIAL SECURITIES AND THE COMPANY (ON
ITS OWN BEHALF AND, TO THE EXTENT PERMITTED BY
APPLICABLE LAW, ON BEHALF OF ITS SHAREHOLDERS)
WAIVES ALL RIGHT TO TRIAL BY JURY IN ANY ACTION,
PROCEEDING OR COUNTERCLAIM (WHETHER BASED UPON
CONTRACT, TORT OR OTHERWISE) RELATED TO OR ARISING
OUT OF THE ENGAGEMENT OF PRUDENTIAL SECURITIES
PURSUANT TO, OR THE PERFORMANCE BY PRUDENTIAL
SECURITIES OF THE SERVICES CONTEMPLATED BY THIS
AGREEMENT.

Prudential Securities is delighted to accept this engagement and looks
forward to working with you on this assignment. Please confirm that the
foregoing correctly sets forth our

<PAGE> 5

Highly Confidential - October 14, 1997
Subject to BRC Approval
Page 5

agreement by signing the enclosed duplicate of this letter in the space
provided and returning it, whereupon this letter shall constitute a binding
agreement as of the date first above written.

PRUDENTIAL SECURITIES INCORPORATED

By: /s/ Jon Burkland
--------------------------------
Director
AGREED:
VISION TWENTY-ONE, INC.

By: /s/ Theodore N. Gillette
--------------------------------
President/CEO

<PAGE> 1

EXHIBIT 21

VISION TWENTY-ONE, INC. AND SUBSIDIARIES

ENTITY JURISDICTION

Vision Twenty-One, Inc. Florida

Vision 21 Physician Florida
Practice Management Company

Vision 21 Managed Eye Care of
Tampa Bay, Inc. Florida

Vision 21 Management Services, Florida
Inc.

Vision 21 of Sierra Vista, Inc. Florida

Vision 21 of Southern Arizona, Florida
Inc.

Vision Twenty-One Managed New York
Eye Care IPA, Inc.

Vision Twenty-One Eye Laser Florida
Centers, Inc.

BBG-COA, Inc. Delaware

Block Vision, Inc. New Jersey

BVC Administrators, Inc. New Jersey

Block Vision of Texas, Inc. Texas

UVC Independent Practice New York
Association, Inc.

CHVC Independent Practice New York
Association, Inc.

<PAGE> 2

ENTITY JURISDICTION

MVC Independent Practice New York
Association, Inc.

WVC Independent Practice New York
Association, Inc.

FVC Independent Practice New York
Association, Inc.

BHVC Independent Practice New York
Association, Inc.

The Block Group of New New York
York, Inc.

BBG Independent Practice New York
Association, Inc.

VCA Independent Practice New York
Association, Inc.

<PAGE> 1
EXHIBIT 23.2

Consent of Independent Certified Public Accountants

We consent to the reference to our firm under the captions "Experts" and
"Selected Financial Data" and to the use of our reports as follows in the
Registration Statement (Form S-1 No. 333-39031) and the related
Prospectus of Vision Twenty-One, Inc. dated November 18, 1997.

<TABLE>
<CAPTION>
REPORT ON REPORT
FINANCIAL STATEMENTS DATE
- ------------------------------------------------------------- -------------------------------------------
<S> <C>
Vision Twenty-One, Inc. and Subsidiaries March 22, 1997, except for Note 11, as
to which the date is July 29, 1997
Schedule I--Valuation and Qualifying Accounts July 29, 1997
Gillette, Beiler & Associates, P.A. March 22, 1997
Northwest Eye Specialists, P.L.L.C. January 15, 1997
Cambridge Eye Clinic, P.A.--John W. Lahr, Optometrist, P.A. and
Eyeglass Express Optical Lab, Inc. January 10, 1997
J & R Kennedy, O.D., P.A. and Roseville
Opticians, Inc. March 21, 1997
Lindstrom, Samuelson & Hardten Ophthalmology Associates, P.A.
and Vision Correction Centers, Inc. January 14, 1997
Jerald B. Turner, M.D., P.A. February 26, 1997
Eye Institute of Southern Arizona, P.C. January 15, 1997
Optometric Eye Care Centers, P.A. January 17, 1997
Dr. Smith and Associates, P.A. #6950, Dr. Smith and Associates,
P.A. #6958, and Dr. Smith and Associates, P.A. #6966 January 17, 1997
Daniel B. Feller, M.D., P.C., d/b/a Paradise Valley Eye
Specialists; Eye Specialists of Arizona Network, P.C.; and
Sharona Optical, Inc. January 17, 1997
Cochise Eye & Laser, P.C. March 28, 1997, except for Note 6, as
to which the date is May 1, 1997.
Richard L. Short, D.O., P.A. March 14, 1997, except for Note 12, as
d/b/a Eye Associates of Pinellas to which the date is March 28, 1997
Swaget Wootton Eye Center, Ltd. and October 12, 1997
Aztec Optical Limited Partnership
</TABLE>

Tampa, Florida /s/ Ernst & Young LLP

November 18, 1997

<PAGE> 1

CONSENT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS

We hereby consent to the use in the Prospectus constituting part of this
Amendment No. 2 to the registration Statement on Form S-1 of our report dated
July 1, 1997, except as to Note 10, which is as of August 19, 1997, which
appears in such Prospectus. We also consent to the reference to us under the
heading "Experts" in such Prospectus.

/s/ Price Waterhouse LLP

PRICE WATERHOUSE LLP
Fort Lauderdale, Florida

November 17, 1997