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Non-Tech : 1-800 CONTACTS, Inc. (CTAC)
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To: Ron D. who wrote (5)6/19/2000 2:58:00 PM
From: Sir Auric Goldfinger   of 25
 
Yes I do read prospecti and CTAC's is a real doozy: "A significant portion of our sales do not comply with applicable state laws and regulations governing the delivery and sale of contact lenses. laws and regulations. We sell to customers in all 50 states and each sale is likely to be subject to the laws of the state where the customer is located.
The laws and regulations relating to the delivery and sale of contact lenses
vary from state to state, but can generally be classified into five categories:

(1) laws that require contact lenses to be dispensed only pursuant to a
valid prescription;

(2) laws that require the dispenser to be licensed by the state as an
optometrist, ophthalmologist or other professional authorized to
dispense lenses;

(3) laws that require lenses be dispensed only in a face-to-face
transaction;

(4) laws with requirements that are unclear or do not specifically
address the sale and delivery of contact lenses; and

(5) laws that we believe place no restrictions on the dispensing of
replacement contact lenses.
meetings or by a person licensed by such state to dispense lenses also require
that lenses only be dispensed pursuant to a valid prescription. Neither we nor
any of our employees is a licensed or registered dispenser of contact lenses in
any state other than California and Texas.

Our operating practice is to attempt to obtain a valid prescription from
each customer or his/her eye care practitioner. If we are unable to obtain a
copy of or verify the customer's prescription, it is our practice to ship the
lenses to the customer based on the information that the customer has provided.

We retained legal counsel to identify and summarize the applicable laws of
each of the states in which we generate material sales. We compared our
operations to the applicable requirements of the laws contained in such
summaries. Based on such comparison, we estimate that approximately one-third
of our

8
<PAGE>

net sales in 1998 appeared to conform to the requirements of applicable state
laws and regulations. Any action brought against us based on our failure to
comply with applicable state laws and regulations could result in us being
subject to significant fines, being prohibited from making sales in a
particular state, being required to comply with such laws or could constitute a
misdemeanor. Such required compliance could result in:

. increased costs to us;

. the loss of a substantial portion of our customers for whom we are
unable to obtain or verify a prescription;

. the inability to sell to customers at all in a particular state if we
cannot comply with such state's laws; and

. misdemeanor penalties and civil fines.

The occurrence of any of the above results could harm our ability to sell
contact lenses and to operate profitably. Furthermore, states may not enact or
may impose laws or regulations that prohibit mail order dispensing of contact
lenses or otherwise impair our ability to sell contact lenses and continue to
operate profitably. We have not obtained an opinion of counsel with regard to
our compliance with applicable state laws and regulations or the enforceability
of such state laws and regulations, and information contained in this
prospectus regarding our compliance with applicable state laws and regulations"

Me thinks something like they described is bound to happen and one never knows when that might occur...
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