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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 13D
UNDER THE SECURITIES EXCHANGE ACT OF 1934
VISIONAMERICA INCORPORATED
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(Name of Issuer)
Common Stock
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(Title of Class of Securities)
681931101000
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(CUSIP Number)
Kenneth Wightman, Vice President of Finance
and Chief Financial Officer
ICON Laser Eye Centers, Inc.
1 Yonge Street
Toronto, Ontario, Canada M5E 1E5
(416) 364-0012
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(Name, Address and Telephone Number of Person
Authorized to Receive Notices and Communications)
February 28, 2000
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(Date of Event which Requires Filing of this Statement)
If the filing person has previously filed a statement on Schedule 13G
to report the acquisition that is the subject of this Schedule 13D, and
is filing this schedule because of ss. ss. 240.13d-l(e), 240.13d-l(f)
or 240.13d-l(g), check the following box. [ ]
NOTE: Schedules filed in paper format shall include a signed original
and five copies of the schedule, including all exhibits. See ss.
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240.13d-7 for other parties to whom copies are to be sent.
* The remainder of this cover page shall be filled out for a reporting
person's initial filing on this form with respect to the subject class
of securities, and for any subsequent amendment containing information
which would alter disclosures provided in a prior cover page.
The information required on the remainder of this cover page shall not
be deemed to be "filed" for the purpose of Section 18 of the Securities
Exchange Act of 1934 ("Act") or otherwise subject to the liabilities of
that section of the Act but shall be subject to all other provisions of
the Act (however, see the Notes).
CUSIP No. 68193110100
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1. Names of Reporting Persons. I.R.S. Identification Nos. of above persons
(entities only).
ICON Laser Eye Centers, Inc., a corporation organized and existing under
the laws of the Province of Ontario
1 Yonge Street
Toronto, Ontario, Canada M5E 1E5
Tax Id. No. N/A
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2. Check the Appropriate Box if a Member of a Group (See Instructions)
(a) .............................................................
(b) .............................................................
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3. SEC Use Only .....................................................
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4. Source of Funds (See Instructions)....WC;.OO.........................
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5. Check if Disclosure of Legal Proceedings Is Required Pursuant to
Items 2(d) or 2(e) .........
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6. Citizenship or Place of Organization........Ontario, Canada..............
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7. Sole Voting Power --1,440,000--
Number of
Shares
Beneficially 8. Shared Voting Power --0--
Owned by
Each
Reporting 9. Sole Dispositive Power --1,440,000--
Person
With
10. Shared Dispositive Power --0--
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11. Aggregate Amount Beneficially Owned by Each Reporting Person
--1,440,000 shares--
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12. Check if the Aggregate Amount in Row (1l) Excludes Certain Shares (See
Instructions) .........................................................
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13. Percent of Class Represented by Amount in Row (11)
--14.1%--
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14. Type of Reporting Person (See Instructions)
CO
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ITEM 1. SECURITY AND ISSUER
This Statement on Schedule 13D relates to the common stock, par value $.06 per
share (the "Common Stock") of VisionAmerica Incorporated, a Delaware corporation
(the "Company"), whose principal and executive office is located at 5350 Poplar
Avenue, Suite 900, Memphis, TN 38119.
ITEM 2. IDENTITY AND BACKGROUND
This Statement on Schedule 13D is being filed by ICON Laser Eye Centers, Inc.,
an Ontario corporation, whose address is 1 Yonge Street, Toronto, Ontario,
Canada M5E 1E5 ("ICON"). ICON is engaged in the business of owning and
operating laser vision correction centers in Canada, the United States and
Europe. In the last five (5) years neither ICON nor any officer, director or
controlling shareholder of ICON has been convicted in a criminal proceeding
(excluding traffic violations or similar misdemeanors) or been a party to a
civil proceeding of a judicial or administrative body of competent jurisdiction
and as a result of such proceeding was or is subject to a judgment, decree or
final order enjoining future violations of, or prohibiting or mandating
activities subject to, federal or state securities laws or finding any violation
with respect to such laws.
ITEM 3. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION
ICON has purchased 440,000 shares of the Company's common stock in the open
market on various occasions from December 31, 1999 through January 13, 2000,
using internal working capital. The Company purchased 1,000,000 shares of the
Company's common stock on February 28, 2000 directly from the Company in a
private transaction. The source of funds for the 1,000,000 share purchase was a
loan in the principal amount of $4,000,000 from Quest Ventures Ltd. (the "Loan
"). The Loan was made pursuant to a Loan Agreement dated February 15, 2000
between ICON and Quest Ventures Ltd. ("Quest"). The Loan bears interest at the
rate of 12% per annum and matures on the earlier of August 31, 2000 or the date
of any takeover of ICON, is evidenced by a promissory note in the principal
amount of $4,000,000 and is secured by a security interest in substantially all
the assets of ICON pursuant to a Commercial Security Agreement dated February
15, 2000 with Quest as the Secured Party. Under the Loan Agreement, Quest
received a bonus payment of 120,000 shares of freely tradeable ICON common
stock.
ITEM 4. PURPOSE OF TRANSACTION
ICON has acquired the Common Stock of the Company as a strategic investment and
intends to pursue a corporate combination consisting of a merger, consolidation,
share exchange or other extraordinary transaction with the Company or its
shareholders (an "Extraordinary Transaction"). ICON and the Company have
entered into an Agreement dated February 24, 2000 pursuant to which ICON has
acquired the 1,000,000 share block and the parties have agreed to attempt to
negotiate such an Extraordinary Transaction and, in the interim, to explore
cooperation in joint marketing efforts related to laser vision correction (the
"Agreement"). Pursuant to the Agreement, ICON and the Company have agreed not
to purchase any equity interests in the other prior to July 1, 2000, except
pursuant to the terms of the Agreement or, in the case of ICON acquiring
additional shares of the Company, in the event (i) that the Company breaches the
Agreement, (ii) in the event that any party not related to ICON acquires or
publicly announces its intention to acquire over 5% of the common stock of the
Company, or (iii) the Company sells or agrees to sell over 5% of its common
stock to any entity. If the Company and ICON have not reached a definitive
agreement on or prior to July 1, 2000 to effect an Extraordinary Transaction,
the standstill provisions expire and ICON may elect to make further purchases of
the Company's common stock in the open market, in negotiated transactions or in
any combination thereof.
ITEM 5. INTEREST IN SECURITIES OF THE ISSUER
In the aggregate, ICON's beneficial ownership of Common Stock of the Company at
the date of this Schedule 13D filing is 1,440,000 shares, or 14.1%, of the
issued and outstanding shares of the Company's common stock, based on the most
recently available information. The Acquirer has sole voting power and
disposition power over all 1,440,000 shares.
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ICON has purchased 440,000 shares of the Company's common stock in the open
market on various occasions from December 31, 1999 through January 13, 2000 at
prices ranging from $3.01 to $5.10 per share and 1,000,000 shares at a purchase
price of $4.00 per share directly from the Company on February 28, 2000 in a
private transaction pursuant to the Agreement.
ITEM 6. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS WITH RESPECT
TO SECURITIES OF THE ISSUER
Pursuant to the Agreement, ICON and the Company have agreed not to purchase any
equity interests in the other except pursuant to the terms of the Agreement or,
in the case of ICON acquiring additional shares of the Company, in the event (i)
that the Company breaches the Agreement, (ii) in the event that any party not
related to ICON acquires or publicly announces its intention to acquire over 5%
of the common stock of the Company, or (iii) the Company sells or agrees to sell
over 5% of its common stock to any entity. Under the Agreement, if ICON has
concluded that the parties cannot proceed with an Extraordinary Transaction,
ICON may, within 10 days from May 1, 2000, request that the Company register the
1,000,000 shares with the Commission on Form S-1. The Company has agreed that,
upon receipt of such a request, it will use its reasonable best efforts to cause
such registration statement to become effective on or before June 30, 2000. In
the event that the 1,000,000 shares have not been registered on or prior to June
30, or if earlier, the date on which the Company announces an intention to be
purchased by or to enter into an Extraordinary Transaction with any third party,
the Company has agreed to issue to ICON warrants to acquire up to 1,000,000
shares of the Company's common stock, with an exercise price equal to the market
price of such common stock at the time of issuance, based on an average price
calculation. The warrants are to expire at the earlier of the date that is two
years from their date of issuance and the date of the consummation of an
Extraordinary Transaction between ICON and the Company.
Under the Loan Agreement, ICON must hold the shares of the Company's common
stock in a brokerage account at Thomson Kernaghan, and may only sell or buy
shares of the Company's common stock, but may not withdraw cash from the
proceeds of any sale until the loan is repaid in full. Under the Loan Agreement
and the Commercial Security Agreement the 1,000,000 shares are part of the
collateral securing ICON's obligations under the Loan. As such, the shares are
subject to usual and customary provisions regarding control of those shares in
the case of any event of default under the Loan Agreement and the Commercial
Security Agreement.
ITEM 7. MATERIAL TO BE FILED AS EXHIBITS
The following agreements are filed as Exhibits to this Schedule 13D.
Agreement dated February 24, 2000 between ICON Laser Eye Centers, Inc.
and VisionAmerica Incorporated
Loan Agreement dated February 15, 2000 between ICON Laser Eye Centers,
Inc. and Quest Ventures Ltd.
Security Agreement dated February 15, 2000 between ICON Laser Eye
Centers, Inc. and Quest Ventures Ltd.
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SIGNATURE
After reasonable inquiry and to the best of my knowledge and belief, I certify
that the information set forth in this statement is true, complete and correct.
March 9, 2000
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Date
ICON Laser Eye Centers, Inc.
By:___________________________
Kenneth Wightman
Vice President of Finance
and Chief Financial Officer
The original statement shall be signed by each person on whose behalf the
statement is filed or his authorized representative. If the statement is signed
on behalf of a person by his authorized representative (other than an executive
officer or general partner of the filing person), evidence of the
representative's authority to sign on behalf of such person shall be filed with
the statement: provided, however, that a power of attorney for this purpose
which is already on file with the Commission may be incorporated by reference.
The name and any title of each person who signs the statement shall be typed or
printed beneath his signature.
ATTENTION: INTENTIONAL MISSTATEMENTS OR OMISSIONS OF FACT CONSTITUTE FEDERAL
CRIMINAL VIOLATIONS (SEE 18 U.S.C. 1001)
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EXHIBIT 99.1
AGREEMENT
This Agreement made and entered into this 24/th/ day of February, 2000, by
and between VisionAmerica Incorporated, a corporation organized and existing
under the laws of the State of Delaware with its principal offices in Memphis,
Tennessee ("VisionAmerica"), and ICON Laser Eye Centers, Inc., a corporation
organized and existing under the laws of Ontario, with its principal offices in
Toronto, Canada ("ICON").
RECITALS
WHEREAS, the parties have previously entered into a Joint Venture Agreement
dated February 14, 2000 (the "Prior Agreement");
WHEREAS, the parties have not consummated several of the material elements
anticipated by the Prior Agreement and wish to terminate the Prior Agreement;
WHEREAS, ICON desires to purchase and VisionAmerica desires to sell
1,000,000 shares of common stock of VisionAmerica, subject to the terms and
conditions contained herein; and
WHEREAS, the parties intend by this Agreement to set forth in writing their
full agreement relating to these matters.
NOW THEREFORE, in consideration of the mutual covenants and agreements set
forth herein and other good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged by the parties, it is agreed as
follows:
1. Termination of Prior Agreement. The parties have not consummated
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several material elements of the Prior Agreement, and the parties believe it is
in their best interest to terminate the Prior Agreement. The Prior Agreement is
hereby terminated. The parties acknowledge and agree that the Prior Agreement
is void and of no further force or effect, and that neither party has any
obligation to the other party in regard to the Prior Agreement or any claims for
damages, losses or liabilities in connection therewith.
2. Confidentiality Agreement. On January 12, 2000, the parties entered
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into a Confidentiality Agreement, which is attached hereto and incorporated
herein as Exhibit A (the "Confidentiality Agreement"). The parties hereby
ratify and confirm the Confidentiality Agreement.
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3. Sale of Stock. VisionAmerica hereby sells to ICON, and ICON hereby
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purchases from VisionAmerica one million (1,000,000) shares of $.06 par value
common stock of VisionAmerica (the "Common Stock"), subject to the terms and
conditions contained herein. The Common Stock is being purchased at $4.00 per
share, for an aggregate total of $4,000,000 in U.S. Dollars. The parties
acknowledge that the Common Stock has not been registered pursuant to any
securities laws, including but not limited to those of Canada, the United
States, or any state or province thereof, and that the Common Stock constitutes
restricted securities as more fully described in Paragraph 7 hereof. Payment of
the purchase price shall be in cash by wire transfer within 24 hours after
execution and proper corporate approval of this Agreement and obtaining the
consent provided for in Paragraph 9 hereof. After such payment, VisionAmerica
shall promptly cause to be delivered to ICON a certificate or certificates
representing the Common Stock, which stock certificates VisionAmerica has
previously delivered to Thomson Kernaghan, which firm is holding such stock
certificates, subject to the instructions of VisionAmerica. ICON acknowledges
that in purchasing such Common Stock ICON is relying upon the representations
and warranties of VisionAmerica contained herein. VisionAmerica acknowledges
that in issuing and selling such Common Stock, and in authorizing the issuance
of the Warrant described in Paragraph 8 herein, VisionAmerica is relying upon
the representations and warranties of ICON contained herein.
4. Registration Rights. Upon the written request of ICON within ten (10)
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days after May 1, 2000, or sooner if it becomes clear to ICON that the parties
cannot proceed with a business combination, VisionAmerica agrees in good faith
to use its reasonable best efforts to cause the registration and effectiveness
by June 30, 2000, of the 1,000,000 shares of Common Stock with the United States
Securities and Exchange Commission (the "SEC"), pursuant to a Form S-1
Registration Statement in accordance with the requirements of the Securities Act
of 1933. At its sole option VisionAmerica may, by a cash payment of $30,000 to
ICON, extend for 30 days the deadline for registration contained in this
paragraph (the "Extended Date"). Such registration shall be at the cost and
expense of VisionAmerica, except that any underwriting fees or discounts, and
any fees of ICON's counsel shall be the obligations of ICON. VisionAmerica
agrees to provide to ICON and its counsel copies of any such registration
filings and copies of any communications made to or received from the SEC. In
addition to such federal registration, the parties shall jointly agree upon any
blue sky registration that may be necessary or appropriate in connection with
such proposed resales by ICON, provided that in any event such blue sky costs
and expenses will not exceed $7,500. In the event that the parties have
executed a definitive agreement in connection with a business combination by
April 30, 2000, and are proceeding with such transaction, then the obligation of
VisionAmerica to proceed with and obtain effectiveness of such registration may
be deferred by VisionAmerica until the proposed business combination is
consummated, or until such proposed business combination is terminated. In the
event that VisionAmerica determines that the registration or the proposed
business combination cannot be accomplished, or such registration or proposed
business combination is denied by any federal or state authority, then
VisionAmerica shall promptly notify ICON. In the event that a business
combination between the parties is not consummated,
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then VisionAmerica's registration obligation under this Paragraph 4 shall
continue until June 30, 2001, and VisionAmerica shall use its reasonable best
efforts to provide ICON, on a timely basis upon request, a one time registration
of the 1,000,000 shares of Common Stock, and, if applicable, any VisionAmerica
common stock issued or issuable pursuant to the Warrant described in Paragraph 8
herein.
5. VisionAmerica's Representations and Warranties. This Agreement has
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been duly and properly approved by the Board of Directors of VisionAmerica.
Subject to the consent required by Paragraph 9 herein, VisionAmerica has the
full right, power and capacity, and all authority and approval required to enter
into, execute and deliver this Agreement and to perform and observe fully its
obligations hereunder and to authorize, sell and issue the Common Stock and to
authorize the contingent warrant as contemplated hereby. This Agreement has
been fully executed and delivered by VisionAmerica and is the valid and binding
obligation of VisionAmerica enforceable in accordance with its terms (except
insofar as such enforceability may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium or similar laws affecting creditors'
rights generally and except as to the availability of equitable remedies).
Subject to the provisions of Paragraph 9 hereof, VisionAmerica has the full
legal right, power and capacity, and all authority and approval required to
issue the Common Stock, which stock shall be fully paid and non-assessable, and
to authorize the issuance of the Warrant. The financial statements of
VisionAmerica contained in its Form 10-K for the year ended December 31, 1998
and its Form 10-Q for the nine months ended September 30, 1999 present fairly
the financial position of VisionAmerica as of the dates indicated and the
results of its operations and cash flows for the periods specified, all in
conformity with generally accepted accounting principles consistently applied.
Since September 30, 1999, VisionAmerica has not sustained any material adverse
change in its properties, assets, results of operations or financial condition.
As a part of ICON's due diligence and review of information regarding
VisionAmerica, ICON has reviewed certain non-public information regarding
VisionAmerica, including projections, budgets, financial and other information,
and the representations of VisionAmerica contained in the preceding sentence are
subject to and qualified by such disclosures.
6. ICON's Representations and Warranties. This Agreement has been duly
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and properly approved by the Board of Directors of ICON. ICON has the full
right, power and capacity, and all authority and approval required to enter
into, execute and deliver this Agreement and to perform and observe fully its
obligations hereunder and to perform the transactions contemplated hereby. This
Agreement has been fully executed and delivered by ICON and is the valid and
binding obligation of ICON enforceable in accordance with its terms (except
insofar as such enforceability may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium or similar laws affecting creditors'
rights generally and except as to the availability of equitable remedies).
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7. Investment Intent. ICON acknowledges that the Common Stock has not
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been registered under the Securities Act of 1933, as amended (the "Securities
Act"), or under any state or Canadian securities act, and that the Common Stock
may not be sold or otherwise transferred by any person, including a pledgee,
absent such registration, and the certificate representing such Common Stock
shall bear a legend to such effect. ICON is acquiring the Common Stock for its
own account, for investment purposes only and not with a view to distribution of
such Common Stock within the meaning of Section 2(11) of the Securities Act,
subject to sales by ICON upon registration of the Common Stock in the events
described by Paragraph 4 hereof. ICON qualifies as an "accredited investor", as
defined in Rule 501(a) pursuant to the Securities Act. ICON has received from
VisionAmerica a copy of VisionAmerica's Form 10-K for 1998, VisionAmerica's Form
10-Q for the nine months ended September 30, 1999, VisionAmerica's 1998 Annual
Report to Shareholders, and budgets, projections and other financial data
relating to periods after September 30, 1999, and other non-public information.
ICON has had the opportunity to ask questions of and receive answers from
VisionAmerica senior management concerning VisionAmerica and the terms and
conditions of this investment by ICON. ICON has had the opportunity to obtain
such information as it desires and deems necessary concerning VisionAmerica from
VisionAmerica senior management. ICON understands and acknowledges that
VisionAmerica, in issuing and selling the Common Stock hereunder, and in
agreeing to issue the Warrant described in Paragraph 8 hereof, is relying on the
representations, warranties and undertakings of ICON contained herein, and ICON
agrees to indemnify VisionAmerica with respect to the sale of the Common Stock
and the Warrant and to hold VisionAmerica harmless against all liabilities,
costs or expenses (including attorney fees) arising by reason of or in
connection with any misrepresentation or any breach of such warranties by ICON.
8. Contingent Warrant. In the event that: (i) the Common Stock has not
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been registered by the earlier of (a) June 30, 2000 or the Extended Date, if
applicable, or (b) the date of a public announcement prior to June 30, 2000 or
the Extended Date, if applicable, of a proposed purchase of VisionAmerica by or
business combination of VisionAmerica with a third party other than ICON; and
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(ii) ICON has proceeded in good faith with VisionAmerica to pursue a proposed
business combination with VisionAmerica; and (iii) the parties have been unable
---
to consummate such business combination by June 30, 2000 or the Extended Date,
if applicable, then in such events VisionAmerica agrees to issue in the name of
ICON and within five (5) business days to deliver to ICON a warrant (the
"Warrant") to purchase 1,000,000 shares of VisionAmerica Common Stock. The
exercise price of the Warrant shall be equal to: (x) in the event of an issuance
pursuant to (i)(a) above, a price equal to the average closing price of
VisionAmerica common stock, as reported on NASDAQ, for the trading days from
March 1, 2000 through June 30, 2000 or the Extended Date, if applicable; and (y)
in the event of an issuance pursuant to (i)(b) above, a price equal to the
average closing price of VisionAmerica common stock, as reported on NASDAQ, for
the trading days beginning March 1, 2000 and ending ten (10) days prior to any
announcement made before June 30, 2000, of a transaction described in (i)(a) or
(i)(b) of this Paragraph. This Warrant shall expire (i) two years after its
issuance, and (ii) at any time that a business combination between ICON and
VisionAmerica is
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consummated. This Warrant may not be sold or assigned by ICON. The Warrant shall
be in the form of and shall have the terms and conditions as contained in the
form of warrant attached hereto as Exhibit B, and incorporated herein by
reference.
9. Third-Party Consent. The parties acknowledge that VisionAmerica has a
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credit facility with Banc of America Commercial Finance Corporation and other
participating lenders, in the approximate principal amount of $31,600,000, and
that this Agreement and the transactions anticipated hereby are specifically
conditioned upon the written consent of such lending group to the sale and
issuance of the Common Stock and to the authorization of the contingent Warrant,
as contemplated herein. In the event that such written consent is not obtained
by February 29, 2000, then this Agreement shall terminate and shall be of no
further force or effect, except for the provisions of Paragraphs 1 and 2 hereof,
which shall in any event be effective and binding on the parties. In the event
of such termination, the VisionAmerica stock certificates referred to in
Paragraph 3 hereof shall be immediately returned to VisionAmerica by Thomson
Kernaghan. ICON acknowledges that its execution and performance of this
Agreement are not subject to the approval of any third party, and will not
violate the provision of any law, judgment, order, rule, regulation or contract
to which ICON is a party or by which it may be bound.
10. Standstill Provisions. ICON currently owns 440,000 shares of common
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stock of VisionAmerica, which shares were purchased by ICON in the open market
prior to January 12, 2000. VisionAmerica does not own any common stock of ICON.
Each of the parties agrees that it will not, directly or indirectly, from the
date hereof until July 1, 2000, purchase or acquire the right to purchase any
equity interest in the other party, except (i) as specifically provided herein,
or (ii) if VisionAmerica breaches any of its obligations in this Agreement, or
(iii) in the event that any third party not directly or indirectly affiliated
with ICON acquires, or publicly announces its intent to acquire, over five
percent (5%) of the common stock of VisionAmerica, or (iv) VisionAmerica sells,
or agrees to sell over 5% of its common stock to any third party.
11. Undertakings. ICON acknowledges that, as a result of its purchase of
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the Common Stock hereunder, it is required to file with the SEC a Form 13D, and
it will promptly make such filing. VisionAmerica acknowledges that it will
promptly file with the SEC a Form 8-K concerning this Agreement.
12. Proposed Laser Program Cooperation. VisionAmerica has an established
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presence in various markets which includes laser facilities, staff and working
relationships with local ophthalmologists and optometrists. ICON has value-
Lasik marketing experience, excimer lasers and a telephone/internet call center
to support its marketing programs. The parties intend to work together in a
cooperative manner such that in any approved market, each party will perform in
its areas of expertise in a coordinated manner with the other party so as to
produce a combined effort that is a comprehensive laser vision correction
program for the general public and patients of referring optometrists. By March
31, 2000, VisionAmerica and ICON intend,
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<PAGE>
subject to any required approval of VisionAmerica's lending group, to create and
execute an appropriate agreement that establishes such proposed arrangement.
13. Benefit. The Agreement shall be binding upon and shall inure to the
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benefit of the parties hereto and their respective successors. The parties
hereby acknowledge that they may not assign any of their rights or obligations
hereunder without the prior written consent of the other party. The parties
hereby acknowledge that no other person is a third-party beneficiary hereunder.
14. Brokers. The parties hereby acknowledge that neither has utilized or
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been obligated for the services of any broker or finder in connection with this
transaction, and that neither party is obligated for any such fee or cost.
15. Governing Law. This Agreement shall be governed by and shall be
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construed in accordance with the provisions of the laws of the State of
Delaware.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement on the
day and year first above written.
VISIONAMERICA INCORPORATED
By:________________________________
Thomas P. Lewis, President
ICON LASER EYE CENTERS, INC.
By:________________________________
Ghassan Barazi, President
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<PAGE>
EXHIBIT 99.2
LOAN AGREEMENT
THIS AGREEMENT dated February 15, 2000 is among:
QUEST VENTURES LTD., a British Columbia company having an office at
Suite 850, 1095 West Pender Street, Vancouver, BC V6E 2M6
(the "Lender")
AND:
ICON LASER EYE CENTERS, INC., an Ontario corporation having its chief
executive office at 1 Yonge Street, Suite 1014, Toronto, Ontario M5E
1E5
(the "Borrower")
WHEREAS the Lender has agreed to lend to the Borrower the principal amount of
$4,000,000 (the "Loan") on the terms and subject to the conditions of this
Agreement.
AGREEMENTS
For good and valuable consideration, the receipt and sufficiency of which each
party acknowledges, the parties agree as follows:
1. LOAN ADVANCE. Subject to the fulfilment of the conditions precedent
contained in paragraph 8 of this Agreement, the Lender shall advance up to
the principal amount of the Loan to the Borrower, in increments of not less
than $1,000,000 each, upon written notice from the Borrower. Each notice
shall include an accounting of all trading activity within the Account (as
defined below) up to the date of such notice.
2. USE OF PROCEEDS. The Borrower covenants and agrees with the Lender that
the Loan funds will be used by the Borrower solely for the purpose of
acquiring common shares in the capital of VisionAmerica Incorporated
("Targetco"), and for no other purpose without the prior written consent of
the Lender.
3. THOMSON KERNAGHAN ACCOUNT. To facilitate the acquisition of Targetco
securities in the market or from treasury, the Lender shall advance the
Loan pursuant to the terms of this Agreement into the Borrower's brokerage
account (the "Account") with Thomson Kernaghan (the "Broker"). The
Borrower shall be given limited trading authority over the Account, solely
to permit the Borrower to use the cash in the Account to purchase Targetco
shares or Targetco convertible debt or such other Targetco securities as
may be approved by the Lender (in its sole and absolute discretion) and to
sell such securities. The Borrower shall not be authorized to withdraw
cash or securities from the Account. All such trading restrictions shall
be confirmed in a written acknowledgement from the Broker (the
"Acknowledgement").
<PAGE>
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4. Term. Any outstanding balance of the Loan, including accrued interest,
shall be immediately due and payable by the Borrower to the Lender on the
earlier of:
(a) August 31, 2000;
(b) the date of closing of a takeover of the Borrower; or
(c) the occurrence of an Event of Default, as defined in paragraph 12
hereof.
If prior to the maturity of the Loan as determined above, the Borrower
closes one or more equity or convertible debt financings, or if at any time
the Borrower should dispose of any of its assets out of the ordinary course
of business, or any of the securities in the Account, all net proceeds
received by the Borrower, up to the full amount outstanding hereunder,
shall be paid to the Lender within 72 hours of receipt of same, to be
applied on account of the Loan, first to interest and any other costs then
owing, then to principal.
The Borrower may repay the Loan at any time before maturity, without
penalty.
5. Interest. Interest shall accrue on the principal amount of the Loan
advanced to the Account, calculated from the date of advance, at the rate
of twelve (12%) percent per annum (net of any applicable withholding
taxes), compounded monthly (effective rate of 12.68% per annum) as well as
after default and judgment, and be payable by the Borrower to the Lender on
the last business day of every month.
6. Legal Fees. The Borrower shall pay to the Lender all of its legal fees and
other costs, charges and expenses of and incidental to the preparation,
execution and carrying out of this Agreement and the security thereunder as
may be required by the Lender to complete this transaction, up to a maximum
of Cdn$7,500.
7. Bonus. As additional consideration for the Loan, the Borrower shall cause
to be delivered to Lender a bonus in the form of 120,000 free-trading
common shares in the capital the Borrower, at a deemed price of $5.00 per
share (the "Bonus Shares"). A certificate representing the Bonus Shares
are delivered to the Lender on or before the advance of the Loan to the
Borrower.
8. Conditions Precedent. As conditions precedent to any advance:
(a) the Borrower will:
(i) execute and deliver to the Lender a promissory note in the
principal amount of $4,000,000, in form and terms set forth in
Schedule "A" hereto (the "Loan Note");
(ii) cause to be executed and delivered to the Lender a security
agreement providing for the grant of a first security interest
(subject to Permitted Encumbrances) in favour of the Lender over
all present and after acquired personal property of the Borrower,
including but not limited to all assets in the Account, in form
and terms set forth in Schedule "B" hereto (the "Security
Agreement");
<PAGE>
-3-
(iii) cause to be executed and delivered by the Broker the
Acknowledgement referred to in paragraph 3 above;
(iv) deposit into the Account the sum of $2,000,000;
(v) cause to be delivered to the Lender and its counsel legal
opinions in the form and terms satisfactory to the Lender and
its counsel, acting reasonably; and
(vi) execute and deliver to the Lender a certified copy of the
Borrower's resolution authorizing the transaction and the
execution and delivery of all documents contemplated herein, in
form satisfactory to the Lender and its counsel;
(b) the representations and warranties of the Borrower contained in
paragraph 9 shall be true and correct in all material respects and the
Borrower shall have complied with all covenants required to be
complied with at or prior to the advance of the Loan by the Lender;
and
(c) the Lender shall, in its sole and absolute discretion have determined
to proceed with the advance of the Loan to the Borrower. For greater
certainty, the Lender shall be under no obligation to advance the Loan
hereunder, and may for any reason whatsoever, decide not to advance
the Loan to the Borrower.
9. Representations and Warranties. The Borrower represents and warrants to the
Lender as follows:
(a) the Borrower is a body corporate incorporated under the under the
Business Corporations Act (Ontario) and has not discontinued or been
dissolved under that Act;
(b) the Borrower has the power and authority to carry on its business as
now being conducted, in the jurisdictions it carries on business, and
has the full power to acquire, own, hold, lease and mortgage its
assets, real and personal;
(c) this Agreement has been, and the Loan Note and all ancillary
instruments or documents issued and delivered hereunder when executed,
will have been duly authorized by all necessary action of the Borrower
and each constitutes or will constitute a legal, valid and binding
obligation of the Borrower, enforceable against it in accordance with
its terms;
(d) the Borrower is not in breach of or in default under any material
obligation in respect of borrowed money and the execution and delivery
of this Agreement, and the Loan Note and all ancillary instruments or
documents issued and delivered hereunder, and performance of the terms
hereof and thereof will not be, or result in, a violation or breach
of, or default under, any law, agreement or instrument to which it is
party or may be bound;
(e) no litigation or administrative proceedings before any court or
governmental authority are presently ongoing, or have been threatened
in writing, or to the best of its knowledge are pending, against the
Borrower or any of its assets or affecting any of its assets which
could have a material adverse effect on its business or assets;
<PAGE>
-4-
(f) the Borrower's interim financial statements for the nine month period
ended September 30, 1999 (the "Financial Statements") fairly present
the financial affairs of the Borrower as of the date to which they are
made up and they have been prepared in accordance with generally
accepted accounting principles consistently applied, in conformity
with the applicable guidelines of the Canadian Institute of Chartered
Accountants and except as publicly disclosed, there have not been any
adverse material changes in the business, operations or assets of the
Borrower since the date of the Financial Statements
(g) there has been no adverse material change (actual, contemplated or
threatened) in the property, assets or business of the Borrower since
the date of release of the Financial Statements, other than as
publicly disclosed by Borrower prior to the date of this Agreement;
(h) the Borrower is a reporting issuer under the Securities Acts of
Alberta and Ontario, and is in compliance with its material
obligations under those Acts and under the rules, regulations and
policies of the Canadian Dealing Network ("CDN") and will maintain
such status, without default, from the date hereof until repayment in
full of the Loan to the Lender;
(i) the Borrower is in compliance, in all material respects, with its
timely disclosure obligations under applicable securities laws and,
without limiting the generality of the foregoing, there has not
occurred any material adverse change since September 30, 1999 and no
material adverse fact exists in relation to the Borrower which has not
been publicly disclosed;
(j) the Bonus Shares have been validly issued as fully-paid, non-
assessable common shares in the capital of the Borrower and are quoted
on CDN, free from resale restrictions under applicable securities
laws;
(k) as at the date of this Agreement, except as disclosed in the Financial
Statements and options granted under the Borrower's stock option plan
and convertible securities described in Schedule C, no holder of
outstanding shares in the capital of the Borrower will be entitled to
any pre-emptive or any similar rights to subscribe for any of the
shares in the capital of the Borrower, or other securities of the
Borrower and no rights, warrants or options to acquire, or instruments
convertible into or exchangeable for any shares in the capital of the
Borrower are outstanding;
(l) the Borrower's chief executive office is located at 1 Yonge Street,
Suite 1014, Toronto, Ontario M5E 1E5; and
(m) except as disclosed in the Financial Statements, the Borrower own its
business, operations and assets, and holds good title thereto, free
and clear of all liens, claims or encumbrances whatsoever, except
Permitted Encumbrances;
10. POSITIVE COVENANTS. The Borrower covenants and agrees that so long as any
monies or other obligations shall be outstanding under this Agreement, it
will:
(a) at all times maintain its corporate existence and the corporate
existence of all other corporations owned or controlled by it;
<PAGE>
-5-
(b) duly perform this Agreement;
(c) comply with and will cause each of its subsidiaries to comply with all
applicable securities laws in connection with the acquisition of all
Targetco shares contemplated under this Agreement;
(d) carry on and conduct its business in a proper business-like manner in
accordance with good business practice and will keep or cause to be
kept proper books of account in accordance with generally accepted
accounting principles;
(e) maintain in good standing the Borrower's status as a reporting issuer
under laws of Ontario and Alberta and the listing of its shares on
each stock exchange on which its shares are listed;
(f) furnish and give to the Lender within seven (7) days of delivery of a
written demand from the Lender such reports, certificates, financial
statements, including monthly internal financial and operational
reports and documents and such other information with respect to the
Borrower as the Lender may reasonably request;
(g) provide the Lender with written notice of any proposed financing or
offer to finance made by or to the Borrower;
(h) furnish and give to the Lender (if such is the case) notice that there
has occurred and is continuing an Event of Default under this
Agreement or any event which would constitute an Event of Default
hereunder or thereunder and specifying the same; and
(i) perform and do all such acts and things as are necessary to perfect
and maintain the security provided to the Lender pursuant to this
Agreement.
11. Negative Covenants. The Borrower covenants with the Lender that the
Borrower will not, without first obtaining the written consent of the
Lender:
(a) make, give, create or permit or attempt to make, give or create any
mortgage, charge, lien or encumbrance (other than Permitted
Encumbrances) that ranks in priority to the security interest of the
Lender over all or any part of the business, assets or undertaking of
the Borrower or any other corporation directly or indirectly owned in
whole or in part by the Borrower, other than in the ordinary course of
business;
(b) allot and issue any new shares or sell, assign or otherwise dispose
of, pledge or encumber any of its shares or any shares of any
subsidiary corporation, except that it may grant stock options, carry
out private or public offerings of debt or equity and allot or issue
shares or other security in connection with the proposed transaction
with Targetco, all in accordance with the policies and rules and
subject to the approval of the CDN and issue shares in its capital in
connection with the completion of acquisitions or the exercise of
stock options or warrants or conversion of convertible securities
which have previously been publicly disclosed;
(c) make or cause to be made any sale or disposition of any substantial
part of its or its subsidiaries' business, assets or undertaking at
less than market value and then only in the ordinary course of
business and if the Borrower disposes of the whole or any substantial
<PAGE>
-6-
part of such business, assets or undertaking, it will apply the net
proceeds thereof to the repayment of the Loan provided, for greater
certainty, however that the Borrower may enter into sale and lease
back transactions in respect of its equipment in its ordinary course
of business;
(d) in any way vary or alter its share capital structure except as
permitted in paragraph 11(b);
(e) declare or provide for any dividends or other payments based on share
capital;
(f) redeem or purchase any of its shares or the shares of any subsidiary
corporation;
(g) borrow or cause any subsidiary to borrow money from any person other
than the Lender without first obtaining and delivering to the Lender a
duly signed assignment and postponement of claim by such person in
favour of the Lender, in form and terms satisfactory to the Lender; or
(h) guarantee the obligations of any other person, directly or indirectly.
12. Events of Default. Each and every of the events set forth in this
paragraph shall be an event of default ("Event of Default"):
(a) if the Borrower fails to make any payment of principal, interest or
Bonus when due hereunder, and such failure continues for two (2)
business days thereafter;
(b) if the Borrower defaults in observing or performing any term, covenant
or condition of this Agreement, other than the payment of monies as
provided for in subparagraph (a) hereof, on its part to be observed or
performed and such failure continues for five (5) business days
thereafter;
(c) if any of the Borrower's covenants or representations in this
Agreement were at the time given false or misleading in any material
respect;
(d) if the Borrower defaults in observing or performing any material term,
covenant or condition of any debt instrument or obligation by which it
is bound, makes an assignment for the benefit of creditors, or admits
in writing its inability to pay its debts as they become due, or is
adjudicated bankrupt or insolvent;
(e) if the Borrower permits any sum which has been admitted as due by the
Borrower, or is not disputed to be due by it, and which forms or is
capable of being made a charge upon any of the assets or undertaking
of the Borrower to remain unpaid or not challenged for thirty (30)
days after proceedings have been taken to enforce the same;
(f) if the Borrower, either directly or indirectly through any material
subsidiary, cease or threaten to cease to carry on business;
(g) if any order is made or issued by a competent regulatory authority
prohibiting the trading in shares of the Borrower or if the Borrower's
shares are suspended or delisted from trading on any recognized stock
exchange;
<PAGE>
-7-
(h) if the Borrower petitions or applies to any tribunal for the
appointment of a trustee, re ceiver or liquidator or commences any
proceedings under any bankruptcy, insolvency, readjustment of debt or
liquidation law of any jurisdiction, whether now or hereafter in
effect; and
(i) if any petition or application for appointment of a trustee, receiver
or liquidator is filed, or any proceedings under any bankruptcy,
insolvency, readjustment of debt or liquidation law are commenced,
against either the Borrower or an order, judgment or de cree is
entered appointing any such trustee, receiver, or liquidator, or
approving the petition in any such proceeding.
13. Effect of Event of Default. If any one or more of the Events of Default
occurs or occur and is or are continuing, the Lender may without limitation
in respect of any other rights they may have in law or hereunder, demand
immediate payment of all monies owing hereunder. To facilitate the orderly
repayment of the Loan after an Event of Default, the Borrower hereby
irrevocably authorizes the Lender to liquidate all securities in the
Account, withdraw all proceeds and apply same on account of the Loan, first
to interest, costs and Bonus, then to principal.
14. Confidentiality. The Lender agrees to keep confidential all material
information provided to it by the Borrower on a confidential basis pending
the Borrower's public disclosure of such information and thereafter, to the
extent the Borrower reasonably requires such information to be kept
confidential.
15. Indemnity. The Borrower agrees to indemnify and save harmless the Lender
and each of its directors, officers, employees and agents from and against
all liabilities, claims, losses, damages and reasonable costs and expenses
in any way caused by or arising directly or indirectly from or in
consequence of the occurrence of any Event of Default under this Agreement.
16. Notices under this Agreement. Any notice, direction or other document
required or permitted to be given pursuant to this Agreement shall, unless
otherwise specifically provided, be given in writing and may be mailed,
postage prepaid by registered mail, sent by facsimile transmission or
personally served upon the appropriate party at the following addresses:
if to the Borrower:
ICON Laser Eye Centers Inc.
1 Yonge Street, Suite 1014
Toronto, Ontario M5E 1E5
Attention: Ken Wightman, Chief Financial Officer
Fax No.: (416) 364-7636
<PAGE>
-8-
to the Lender:
Quest Ventures Ltd.
Suite 850, 1095 West Pender Street
Vancouver, BC V6E 2M6
Attention: A. Murray Sinclair
Fax No.: (604) 681-4692
Any notice, direction or other document given:
(a) by registered mail as set out above shall be deemed to have been given
on the date of actual receipt by the addressee;
(b) by personal delivery as set out above shall be deemed to have been
given and received on the date on which it was so delivered or on the
first business day thereafter if the date of delivery is not a
business day in the place of delivery; and
(c) by facsimile transmission as set out above shall be deemed to have
been given and received on the date on which it was so transmitted or
on the first business day thereafter if the date of transmission is
not a business day in the place of receipt or if the time of
transmission is after 4:00 p.m. at the place of receipt.
Any party may change its address for notice by notifying the other parties
to this Agreement in accordance with the provisions of this paragraph. If
for any reason the method of giving notice selected by a party is
impracticable, then such party shall be obliged to select an alternate
method of giving notice.
17. Assignment, Successors and Assigns. The Borrower acknowledges the Lender's
right to assign all or part of its rights under this Agreement to one or
more assignees, subject only to the Lender's notification of such
assignment or assignments being given in writing to the Borrower. This
Agreement shall enure to the benefit of and be binding upon the parties
hereto and their respective successors and permitted assigns.
If the Lender assigns all or any portion of its rights under this
Agreement, the Borrower covenants and agrees, subject to all applicable
withholding taxes, to make all payments of interest, principal and bonus
due under this Agreement to the Lender and each assignee, pro rata in
accordance with their respective proportionate interests in the Loan.
18. Waivers. No failure or delay on the Lender's part in exercising any power
or right hereunder shall operate as a waiver thereof. The Lender's rights
and remedies hereunder are cumulative and not exclusive of any rights or
remedies provided by law. Time is of the essence hereunder.
19. Permitted Encumbrances. "Permitted Encumbrances" shall mean:
(a) liens in favour of the Lender;
(b) liens for taxes, assessments or other governmental charges not
delinquent, or, being contested in good faith and by appropriate
proceedings and with respect to which proper
<PAGE>
-9-
reserves have been taken by the Borrower, and provided that a stay of
enforcement of such lien is in effect;
(c) purchase money security interests placed upon fixed assets hereafter
acquired to secure a portion of the purchase price thereof, provided
that:
(i) any such lien shall not encumber any property of the Borrower
except the purchased asset, and
(ii) the aggregate amount of indebtedness secured by such liens
incurred as a result of such purchases during the term of the
Loan shall not exceed $50,000;
(d) unregistered, undetermined or inchoate liens and charges under the
Construction Lien Act (Ontario), or the similar act of an other
jurisdiction for amounts not overdue or delinquent, incidental to
construction, maintenance, use or operation, a claim for which shall
not at the time have been registered against the property and of which
notice in writing shall not at the time have been given to the obligor
or the Lender pursuant to the Construction Lien Act (Ontario) or the
similar act of any other jurisdiction;
(e) cash or governmental obligations not in an amount in excess of $50,000
in the aggregate deposited in the ordinary course of business to a
public utility or any municipality or governmental or other public
authority when required by such utility or municipality or
governmental or other authority in connection with the operations of
the obligor;
(f) permits, reservations, covenants, servitudes, watercourse, right of
water, right of access or user licenses, easements, rights-of-way and
rights in the nature of easements (including, without in any limiting
the generality of the foregoing, licenses, easements, rights-of-way
and rights in the nature of easements for railways, sidewalks, public
ways, sewers, drains, gas and oil pipelines, steam and water mains or
electric light or power, or telephone and telegraph conduits, poles,
wires and cables) and minor irregularities in title in any case
affecting real property and in reasonable judgement of the Lender in
the aggregate will not materially and adversely affect the use of the
property concerned for the purpose of which it is held or used by the
obligor or the value of the property;
(g) all rights reserved to or vested in any government body by the terms
of any lease, license, franchise, grant or permit held by the obligor
or affecting the property or by any statutory provision to terminate
any such lease, license, franchise, grant or permit or to require
annual or periodic payments as a condition of the continuance thereof
or to distrain against or to obtain a lien on any property or assets
of any obligor in the event of failure to make such annual or other
periodic payments, provided that no obligations in connection
therewith are overdue or delinquent;
(h) all unregistered rights, interest and privileges in favour of a public
authority under or pursuant to any applicable statute or regulation
provided same do not arise as a result of some failure to comply with
a governmental requirement and that same will not in the reasonable
judgement of the lender in the aggregate materially and adversely
affect the use of the property for the purposes for which such
property is held or used by any obligor or value the property
affected;
<PAGE>
-10-
(i) any subsisting restrictions, exceptions, reservations, limitations,
provisos and conditions (including, without limitation, royalties,
reservation of mines, mineral rights and timber rights, access to
navigable waters and similar rights) affecting any real property
expressed in any original grants from a public authority and any
statutory limitations, exceptions, reservations and qualifications
provided that same will not in the reasonable judgement of the lender
in the aggregate materially and adversely affect the use of the
property for the purposes of which such property is held or used by
any obligor or value the property affected; and
(j) zoning, land use and building restrictions, bylaws, regulations and
ordinances of federal, provincial, state, municipal or other
governmental bodies or regulatory authorities, including municipal
bylaws and regulations, airport zoning regulations, restrictive
covenants and other land use limitations, public or private, bylaws
and regulations, and other restrictions as to the use of real property
provided that same will not in the reasonable judgement of the lender
in the aggregate materially and adversely affect the use of the
property affected for the purposes for which such property is held or
used by any obligor or value of such property.
20. Invalidity. If at any time any one or more of the provisions hereof is or
becomes invalid, illegal or unenforceable in any respect under any law, the
validity, legality and enforceability of the remaining provisions hereof
shall not in any way be affected or impaired thereby.
21. Maximum Return. The Borrower and the Lender acknowledge and agree that it
is their express intention and desire that in no event will the total
payment to the Lender whether for interest, fees, bonus, commitment, stand-
by or processing fees, or service charges or otherwise (collectively, the
"Sum") result in an effective annual rate which exceeds the maximum rate
permitted by law (the "Maximum Rate"). If the effective annual rate but
for this paragraph exceeds the Maximum Rate, then the Sum will be reduced
to an effective annual rate which is one percent less than the Maximum
Rate, calculated using generally accepted actuarial practices and
principles, by:
(a) firstly, reducing the amount of the fees and charges payable; and
(b) secondly, reducing the interest rate.
Any overpayment by the Borrower after recalculation under this paragraph
will immediately be returned by the Lender to the Borrower.
22. Governing Laws. This Agreement shall be governed by and interpreted in
accordance with the laws of the Province of Ontario and the laws of Canada
applicable therein. The Borrower submits to the jurisdiction of the Courts
of the Province of Ontario and agrees to be bound by any suit, action or
proceeding commenced in such Courts and by any order or judgment resulting
from such suit, action or proceeding, but the foregoing will in no way
limit the right of the Lender to commence suits, actions or proceedings
based on this Agreement in any jurisdiction it may deem appropriate.
23. Amendment. This Agreement may be changed only by or pursuant to an
agreement in writing signed by the parties hereto.
<PAGE>
-11-
24. Precedence. In the event that any provisions of any documents other than
this Agreement, (the "Conflicted Agreements"), contradict and are otherwise
incapable of being construed in conjunction with the provisions of this
Agreement, the provisions of this Agreement shall take precedence over
those contained in the Conflicted Agreements and, in particular, if any act
of the Borrower is expressly permitted under this Agreement but is
prohibited under the Conflicted Agreements, any such act shall be permitted
under this Agreement and shall be deemed to be permitted under the
Conflicted Agreements.
25. Schedules. All Schedules attached hereto shall be deemed fully a part of
this Agreement.
26. Currency. All references herein to "dollars" or "$" are to United States
dollars, unless otherwise indicated.
<PAGE>
-12-
27. Counterparts. This Agreement may be signed in one or more counterparts,
originally or by facsimile, each such counterpart taken together shall form
one and the same agreement.
TO EVIDENCE THEIR AGREEMENT each of the parties has executed this Agreement on
the date first above written.
QUEST VENTURES LTD.
Per: ___________________________
Authorized Signatory
Print name:
ICON LASER EYE CENTERS, INC.
Per: ___________________________
Authorized Signatory
Print name:
<PAGE>
SCHEDULE "A"
PROMISSORY NOTE
Due: Not later than
August 31, 2000
Principal Amount: US$4,000,000 at Vancouver, B.C.
For value received, ICON Laser Eye Centers, Inc. (the "Borrower") hereby
promises to pay to QUEST VENTURES LTD. (the "Lender") on August 31, 2000 or such
earlier date as is provided in that certain Loan Agreement between the Lender
and the Borrower, dated February 15, 2000, the sum of FOUR MILLION UNITED STATES
DOLLARS (US$4,000,000), with interest accruing from the date hereof at a rate of
TWELVE (12%) PERCENT per annum (net of any applicable withholding taxes),
compounded monthly (effective rate of 12.68% per annum), before and after each
of maturity, default and judgment, payable on the last business day of every
month by cheque, cash or bank draft and delivered to the Lender at 850 - 1095
West Pender Street, Vancouver, BC V6E 2M6.
The undersigned hereby waives notice of dishonour and presentment.
Dated at Toronto, Ontario this 15/th/ day of February, 2000.
SIGNED, SEALED AND DELIVERED
by ICON LASER EYE CENTERS, INC.
Per: ___________________________
Authorized Signatory
<PAGE>
SCHEDULE "D"
OUTSTANDING SECURITIES IN
ICON LASER EYE CENTERS, INC.
----------------------------
I. COMMON SHARES
A. ISSUED PRIOR TO AMALGAMATION
<TABLE>
<CAPTION>
Number of Common Shares
Underlying Pre- Post-
Date of Issue Holder Security Exercise Price Amalgamation Amalgamation
- ------------- ------ -------- -------------- ------------ ------------
<S> <C> <S> <C> <C> <C>
ICON Laser
Jun 17/98 Centres Inc. N/A N/A 50 225,000
Jun 17/98 Ghassan Barazi N/A N/A 50 225,000
Ocular
Developments
May 26/99 Limited N/A N/A 1040 4,680,000
May 26/99 Park Lane Trust N/A N/A 1040 4,680,000
Thomson
Aug 31/99 Kernaghan N/A N/A 21.8 98,100
Ocular N/A
Aug 31/99 /1/ Developments SA N/A 186.28844 838,298
Aug 31/99 /2/ Brenda Johnson N/A N/A 43.026 193,617
3293742 Canada
Aug 31/99 Inc. N/A N/A 287.943 1,295,745
Aug 31/99 /3/ Michael Johnson N/A N/A 13.332 60,000
Aug 31/99/4/ Nichole Johnson N/A N/A 8.889 40,000
----- ------
ISSUED PRIOR TO
AMALGAMATION: 2741.2784 12,335,760
B. Issued on Amalgamation
----------------------
Sept 01/99 Northern Gaming N/A N/A N/A 958,220
Shareholders
Sept 01/99 rounding up of N/A N/A N/A 96
fractional shares
TOTAL
OUTSTANDING ON
AMALGAMATION: N/A 13,294,076
----------
</TABLE>
___________________________
/1/ Purchase of Pan Pacific Laser Eye Institute Inc.
/2/ Purchase of London Place Eye Centre, Inc.
/3/ Purchase of London Place North Eye Centre, Inc.
/4/ Purchase of London Place North Eye Centre, Inc.
<PAGE>
-2-
<TABLE>
<CAPTION>
Number of Common Shares
Underlying Pre- Post-
Date of Issue Holder Security Exercise Price Amalgamation Amalgamation
- ------------- ----- -------- -------------- ------------ ------------
C. Issued Post-Amalgamation
------------------------
<S> <C> <C> <C> <C> <C>
Bright Technology
Sept 08/99/5/ Ltd. and others N/A N/A N/A 1,021,275
Sept 08/99 Private Placement N/A N/A N/A 252,500
Subscribers
Oct 15/99 Private Placement N/A N/A N/A 277,000
Subscribers
Nov 26/99 Private Placement N/A N/A N/A 40,000
Subscribers
Nov 18/99 BC and ON N/A N/A N/A 76,000
Employees
Nov 30/99 Rights Offerings N/A N/A N/A 1,494,735
Dec 17/99 Private Placement N/A N/A N/A 62,000
Subscribers
Jan 04/00 Bright Technology N/A N/A N/A 105,713
TOTAL 16,623,299
OUTSTANDING:
D. Future Issuances
----------------
II. U.S. RESIDENTS/6/
to be determined employees N/A N/A N/A 52,182
to be determined Jack Gunion N/A N/A N/A 6,383
to be determined Rick Lewis N/A N/A N/A 15,000
TOTAL: 73,565
III. ACE ACQUISITION/7/
to be determined Shareholders of N/A N/A N/A 2,094,027
Vista Southwest
to be determined Shareholders of N/A N/A N/A 2,547,630
ICON Laser Eye
Centers
to be determined Shareholders of N/A N/A N/A 42,553
ICON Vision Centers
TOTAL: 4,684,210
</TABLE>
____________________________________
/5/ Purchase of Eye Academy Limited
/6/ Awaiting advice of Martin Enright
/7/ Shares are subscribed for pursuant to Letters of Intent; shares to be
issued upon closing, date to be determined
<PAGE>
-3-
<TABLE>
<CAPTION>
Number of Common Shares
Underlying Pre- Post-
Date of Issue Holder Security Exercise Price Amalgamation Amalgamation
- ------------- ----- -------- -------------- ------------ ------------
<S> <C> <C> <C> <C> <C>
IV. STOCK OPTION PLAN
Sept 01/99 Management & Common Share US$2.35 N/A 1,607,000
Employees
V. WARRANTS
May 26/99/8/ CALP II L.P. Common Share US$2.35 108.7471 489,362
CALP II L.P. and
Dominion Capital
Jul 28/99/9/ Fund Ltd. Common Share US$2.35 174.9409 787,234
--------- ----------
TOTAL
WARRANTS: 283.688 1,276,596
VI. COMPENSATION OPTIONS
Thomson
May 26/99/10/ Kernaghan Common Share US$2.35 25.5556 115,000
Thomson
Jul 28/99/11/ Kernaghan Common Share US$2.35 41.111 185,000
Thomson
Jul 28/99/12/ Kernaghan Common Share Cdn.$3.03030 4.2678 19,205
Nov 30/99/13/ Thomson Common Share U.S.$4.00 N/A 149,474
Kernaghan ------------ ----------
TOTAL COMP.
OPTION: 70.9344 468,679
</TABLE>
_________________________________
/8/ Expires May 27, 2002
/9/ Expires May 27, 2002
/10/ Expires May 28, 2001
/11/ Expires May 28, 2001
/12/ Expires July 28, 2001
/13/ Expires November 30, 2001
<PAGE>
-4-
<TABLE>
<CAPTION>
Number of Common Shares
Underlying Pre- Post-
Date of Issue Holder Security Exercise Price Amalgamation Amalgamation
- ------------- ----- -------- -------------- ------------ ------------
<S> <C> <C> <C> <C> <C>
VII CONVERTIBLE PROMISSORY NOTE
Jul 28/99/14/ Striker Capital Ltd. a) Common a) Cdn. $2.9098787 14.6667 a) 66,000
Share
b) Cdn. $3.0303 14.6667 b) 66,000
b) Warrants --------- ------------
TOTAL NOTE: 29.3334 132,000
+ STOCK OPTION N/A 1,607,000
+WARRANTS: 283.688 1,276,596
+COMP. OPTIONS: 70.9344 468,679
--------- ----------
TOTAL
CONVERTIBLE 383.95558 3,484,275
+OUTSTANDING
COMMON SHARES N/A 16,623,299
U.S. RESIDENTS N/A 73,565
---
ACE ACQUISITION N/A 4,684,210
--- ----------
TOTAL (FULLY
DILUTED) N/A 24,865,349
=== ==========
</TABLE>
______________________________________
/14/ Expires July 31, 2000
<PAGE>
EXHIBIT 99.3
COMMERCIAL SECURITY AGREEMENT
THIS AGREEMENT dated February 15, 2000 is among:
QUEST VENTURES LTD., a British Columbia company having an
office at Suite 850, 1095 West Pender Street, Vancouver, BC V6E 2M6
(the "Secured Party")
AND:
ICON LASER EYE CENTERS, INC., an Ontario corporation having its chief
executive office at 1 Yonge Street, Suite 1014, Toronto, Ontario M5E
1E5
(the "Debtor")
PART 1 - SECURITY INTERESTS
1.1 Security Interests. For valuable consideration and as security for the
payment and performance of the Obligations (as later defined) the Debtor hereby
mortgages, charges, assigns and transfers to the Secured Party, and grants to
the Secured Party a security interest in, and the Secured Party hereby takes a
security interest in, all the Debtor's right, title and interest in and to all
of the Debtor's present and after-acquired property and all proceeds thereof
(except the property of the Debtor described in paragraphs 1.2 and 1.4) of
whatsoever nature and kind and wherever situate including, without limiting the
generality of the foregoing:
(a) Accounts. All debts, accounts, claims, monies and choses in action
which now are, or which may at any time hereafter be due or owing to
or owned by the Debtor, and all books, records, documents, papers and
electronically recorded data recording, evidencing, securing or
otherwise relating to such debts, accounts, claims, monies and choses
in action or any part or parts thereof (collectively "Accounts");
(b) Equipment. All present and future equipment now or hereafter owned by
the Debtor, including all machinery, fixtures, plants, tools,
furniture, vehicles of any kind or description, all spare parts,
accessions and accessories located at or installed in or affixed or
attached to any of the foregoing, and all drawings, specifications,
plans and manuals relating thereto and any other goods that are not
Inventory (collectively "Equipment");
(c) Inventory. All present and future inventory of whatever kind now or
hereafter owned by the Debtor, including all raw materials, materials
used or consumed in the business or profession of the Debtor, goods,
work in progress, finished goods, returned goods, repossessed goods,
goods used for packing, all packaging materials, supplies and
containers, materials used in the business of the Debtor whether or
not intended for sale and goods acquired or held for sale, lease or
resale or furnished or to be furnished under contracts of rental or
service (collectively "Inventory"); and
(d) Other Tangible Personal Property. All chattel paper, documents of
title, instruments, securities and other goods now or hereafter owned
by the Debtor that are not Accounts, Equipment or Inventory.
1.2 Intangibles. For valuable consideration and as security for the payment and
performance of the Obligations (as later defined) the Debtor grants to the
Secured
<PAGE>
-2-
Party a security interest in, and the Secured Party takes a security
interest in, all the Debtor's right, title and interest in and to all the
Debtor's present and after-acquired intangible property (save and except for
Accounts) wherever situate and now or hereafter owned by the Debtor including,
without limitation, all contractual rights, licenses, goodwill, patents,
trademarks, tradenames, copyrights, other industrial designs and other
industrial or intellectual property and undertaking of the Debtor and all other
choses in action of the Debtor of every kind which now are, or which may at any
time hereafter be, due or owing to or owned by the Debtor and all other
intangible property of the Debtor which is not Accounts, goods, chattel paper,
documents of title, instruments, money or securities.
1.3 Collateral. The term "Collateral" means collectively all of the Debtor's
right, title and interest in and to all of the Debtor's present and
after-acquired property and all proceeds thereof (except the property of the
Debtor described in paragraph 1.4) of whatsoever nature and kind and wherever
situate including without limiting the generality of the foregoing all of the
property described in paragraphs 1.1(a) to (d) inclusive and paragraph 1.2.
1.4 Exclusions. The security interests granted in this Agreement do not apply
or extend to:
(a) any real property or interests therein of the Debtor;
(b) the last day of any term created by any lease or agreement therefor
now held or hereafter acquired by the Debtor but the Debtor will stand
possessed of the reversion thereby remaining in the Debtor of any
leasehold premises upon trust for the Secured Party to assign and
dispose thereof as the Secured Party or any purchaser of such
leasehold premises directs;
(c) any lease or other agreement which contains a provision which provides
in effect that such lease or agreement may not be assigned, subleased,
charged or encumbered without the leave, licence, consent or approval
of the lessor, until such leave, licence, consent or approval is
obtained and the security interest created hereby will attach and
extend to such lease or agreement as soon as such leave, licence,
consent or approval is obtained;
(d) any consumer goods of the Debtor.
1.5 Attachment. The Debtor and the Secured Party do not intend to postpone the
attachment of the security interests hereby created save as provided in
paragraph 1.4(c) and except as provided therein the security interests hereby
created will attach when:
(a) this Security Agreement has been executed, or in the case of after-
acquired property, such property has been acquired by the Debtor;
(b) value has been given; and
(c) the Debtor has rights in the Collateral, or in the case of after-
acquired property, acquires rights in the Collateral.
1.6 Notification. If this Security Agreement grants a security interest in
Accounts, before or after an Event of Default (as later defined) has occurred,
the Secured Party may notify any debtor of the Debtor on an intangible, chattel
paper, or account, or any obligor on an instrument ("Account Debtor") to make
all payments on Collateral to the Secured Party and the Debtor acknowledges that
the proceeds of all sales, or any payments on or other proceeds of the
Collateral, including but not limited to payments on, or other
<PAGE>
-3-
proceeds of, the Collateral received by the Debtor from any Account Debtor,
whether before or after notification to such Account Debtor and whether before
or after default under this Agreement will be received and held by the Debtor in
trust for the Secured Party and will be turned over to the Secured Party upon
request and the Debtor will not commingle any proceeds of or payments on the
Collateral with any of the Debtor's funds or property, but will hold them
separate and apart.
1.7 Purchase Money Security Interests. The security interests created hereby
will constitute purchase money security interests to the extent that any of the
Obligations are monies advanced by the Secured Party to the Debtor for the
purpose of enabling the Debtor to purchase or acquire rights in any of the
Collateral and were so used by the Debtor and a certificate of an officer of the
Secured Party as to the extent that the Obligations are monies so advanced and
used will be prima facie proof of the purchase money security interests
constituted hereby.
PART 2 - OBLIGATIONS SECURED
2.1 Obligations. This Security Agreement and the security interests hereby
created will be continuing security for the payment of all and every
indebtedness, both present and future, and whether arising on current account or
otherwise, together with interest thereon and all and every liability, present
and future, direct or indirect, absolute or contingent of the Debtor to the
Secured Party under the loan agreement dated February 15, 2000 (the "Loan
Agreement") including, and without derogating from the generality of the
foregoing, any advance or readvance, including every unpaid balance thereof, by
the Secured Party to the Debtor, whenever made, and interest thereon to the same
extent as if the advance or readvance had been made at the time of creation of
this Security Agreement, and for performance of all obligations of the Debtor to
the Secured Party, whether or not contained in this Security Agreement (which
indebtedness, liabilities and obligations are collectively "Obligations").
PART 3 - REPRESENTATIONS AND WARRANTIES
3.1 Representations and Warranties. The Debtor represents and warrants to the
Secured Party the following:
(a) Corporate Requirements. If the Debtor is a corporation:
(i) the Debtor is duly incorporated and it is in good standing
under the laws of the Province of Ontario;
(ii) it has the power and authority to carry on the business now
being carried on by it and has the full power and authority to
execute and deliver this Security Agreement;
(iii) all necessary and requisite corporate proceedings, resolutions
and authorizations have been taken, passed, done and given by it
and by its directors to authorize, permit and enable it to
execute and deliver this Security Agreement; and
<PAGE>
-4-
(iv) the entering into this Security Agreement is not in contravention
of any statute, the organizational or constating documents of the
Debtor or any agreement or other document to which the Debtor is
a party;
(b) No Actions. There are no actions or proceedings pending or, to the
knowledge of the Debtor, threatened which challenge the validity of
this Security Agreement or which might result in a material adverse
change in the financial condition of the Debtor or which would
materially adversely affect the ability of the Debtor to perform its
obligations under this Security Agreement or any document evidencing
any indebtedness of the Debtor to the Secured Party;
(c) Owns Collateral. The Debtor owns and possesses all presently held
Collateral and has good title thereto, free from all security
interests, charges, encumbrances, liens and claims, save only those,
if any, shown in Schedule 1 and Permitted Encumbrances (as defined in
the Loan Agreement);
(d) Right and Authority. The Debtor has the right and authority to create
the security interests created in this Agreement;
(e) Financial Information. All financial information and financial
statements supplied to the Secured Party by or for the Debtor:
(i) are not untrue in any material respect;
(ii) have revealed all material facts the omission of which would
make such information or statements misleading;
(iii) disclose all facts which materially adversely affect, or so far
as the Debtor can reasonably foresee will materially adversely
affect, the Debtor's financial condition, the Collateral or the
Debtor's ability to perform its obligations hereunder; and
(iv) in the case of financial statements, have been prepared in
accordance with generally accepted accounting principles.
3.2 Reliance and Survival. All representations and warranties of the Debtor
made in this Agreement or in any certificate or other document delivered by or
on behalf of the Debtor for the benefit of the Secured Party are material, will
survive the execution and delivery of this Security Agreement and will continue
in full force and effect without time limit. The Secured Party will be
considered to have relied upon each such representation and warranty in spite of
any investigation made by or on behalf of the Secured Party at any time.
PART 4 - POSITIVE COVENANTS
4.1 Positive Covenants. The Debtor covenants with the Secured Party the
following:
<PAGE>
-5-
(a) Defend Collateral. It will defend the Collateral against all claims
and demands of all persons claiming the Collateral or an interest
therein at any time;
(b) Lists of Accounts. If the Collateral includes Accounts, the Debtor
will (unless the Secured Party otherwise agrees in writing) deliver to
the Secured Party within 30 days of each calendar month end an aged
list of the Accounts as at that particular month end in a form
acceptable to the Secured Party;
(c) Provide Information. Upon the demand by the Secured Party it will
furnish in writing to the Secured Party all information requested
concerning the Collateral and that it will promptly advise the Secured
Party of the serial number, year, make and model of each serial
numbered good at any time included in the Collateral;
(d) Insurance. It will insure and keep insured to their full insurable
value with a company or companies selected by the Debtor and approved
in writing by the Secured Party all the Collateral against such perils
as may be prudent having regard to the nature of the Collateral and
the business of the Debtor (including an extended coverage insurance
clause), and whenever and to the extent required in writing by the
Secured Party, the Debtor will:
(i) furnish a certificate by an independent appraiser or
insurance adjuster selected by the Debtor and
approved by the Secured Party as to the sufficiency
of such insurance, which certificate will be
conclusive as against the Debtor both as to the
amount of insurance required hereunder and the perils
against which coverage is required hereunder and the
Debtor will immediately insure in accordance with
such certificate;
(ii) cause to be included in such policy or policies a mortgage
clause in such form as may be approved by the Secured Party;
(iii) cause to be endorsed in such form as may be required by the
Secured Party on the policies evidencing such insurance a
notation that any amounts payable under such policies will be
paid to the Secured Party as its interest may appear; and
(iv) deposit with the Secured Party every policy and renewal
certificate for such insurance or a certified copy thereof;
(e) Repair. It will keep the Collateral in good condition and repair
according to the nature and description thereof respectively and if
the Debtor neglects to keep the Collateral or any part thereof in good
condition and repair then the Secured Party may from time to time,
without any notice to the Debtor in situations considered by the
Secured Party to be emergency situations and otherwise upon not less
than 15 days' notice, make such repairs as it in its sole discretion
considers necessary;
(f) Other Indebtedness. Other than in respect of Permitted Encumbrances
(as defined in the Loan Agreement), it will pay and discharge as they become due
all payments due and owing under or concerning any previous indebtedness created
or security given by the Debtor to
<PAGE>
-6-
any person or corporation and will observe, perform and carry out all the terms,
covenants, provisions and agreements relating thereto and any default in payment
of any monies due and payable under or relating to any previous indebtedness or
security or in the observance, performance or carrying out of any of the terms,
covenants, provisions and agreements relating thereto will be considered to be a
default hereunder at the option of the Secured Party and any and all remedies
available to the Secured Party hereunder by reason of any default hereunder or
by law or otherwise will be immediately available to the Secured Party upon any
default of the Debtor under the previous indebtedness created or security given
by the Debtor;
(g) Right of Inspection. The Secured Party will have the right whenever it
considers reasonably necessary either by its officers or authorized
agents to enter upon the Debtor's premises and to inspect the
Collateral, all books of account and records of the Debtor and copies
of all returns made from time to time by the Debtor to boards,
agencies or governmental departments and to make extracts therefrom
and generally to conduct such examinations as it may see fit and
without limiting the generality of the foregoing, the Secured Party
may request information from the solicitor, auditor and other advisors
and agents of the Debtor for the time being concerning the affairs and
the conduct of business of the Debtor and the Debtor hereby
irrevocably authorizes and directs and this will constitute the
sufficient authority and direction to any such solicitor, auditor or
other person to disclose to the Secured Party such information as to
any and all matters touching upon the affairs and conduct of the
business of the Debtor whether of a confidential nature or otherwise
and any costs, expenses and outlays which the Secured Party may incur
pursuant hereto will be payable immediately by the Debtor to the
Secured Party, will bear interest at the highest rate borne by any of
the other Obligations and will, together with such interest, form part
of the Obligations secured by this Security Agreement;
(h) Costs of Preparation & Enforcement. It will pay all costs, charges and
expenses of and incidental to the taking, preparation, execution and
registering notice (and any amendments and renewals of such notice) of
this Security Agreement and in taking, recovering, keeping possession
of or inspecting the Collateral and generally in any other proceedings
taken in enforcing the remedies in this Security Agreement or
otherwise in connection with this Security Agreement or by reason of
non-payment or procuring payment of the monies hereby secured;
(i) Costs Caused by Default. If the Debtor makes default in any covenant
to be performed by it hereunder, the Secured Party may perform any
covenant of the Debtor capable of being performed by the Secured Party
and if the Secured Party is put to any costs, charges, expenses or
outlays to perform any such covenant, the Debtor will indemnify the
Secured Party for such costs, charges, expenses or outlays and such
costs, charges, expenses or outlays (including solicitors' fees and
charges incurred by the Secured Party on an "own client" basis) will
be payable immediately by the Debtor to the Secured Party, will bear
interest at the highest rate borne by any of the other Obligations and
will, together with such interest, form part of the Obligations
secured by this Security Agreement;
<PAGE>
-7-
(j) Court Costs. In any judicial proceedings taken to cancel this Security
Agreement or to enforce this Security Agreement and the covenants of
the Debtor hereunder the Secured Party will be entitled to special
costs. Any costs so recovered will be credited against any solicitors'
fees and charges paid or incurred by the Secured Party relating to the
matters in respect of which the costs were awarded and which have been
added to the monies secured hereunder pursuant to the foregoing
clause;
(k) Notice of Litigation. It will give written notice to the Secured Party
of all litigation before any court, administrative board or other
tribunal affecting the Debtor or the Collateral or any part thereof;
(l) Corporate Existence etc. It will at all times maintain its corporate
existence; that it will carry on and conduct its business in a proper,
efficient and businesslike manner and in accordance with good business
practice; and that it will keep or cause to be kept proper books of
account in accordance with sound accounting practice;
(m) Taxes. It will pay all taxes, rates, levies, charges, assessments,
statute labour or other impo sition whatsoever now or hereafter rated,
charged, assessed, levied or imposed by any lawful authority or
otherwise howsoever on it, on the Collateral or on the Secured Party
in respect of the Collateral or any part or parts thereof, or any
other matter or thing in connection with this Security Agreement, save
and except when and so long as the validity of such taxes, rates,
levies, charges, assessments, statute labour or other imposition is in
good faith contested by it, and will, if and when required in writing
by the Secured Party, furnish for inspection the receipts for any such
payments;
(n) Payments. It will promptly pay or remit all amounts which if left
unpaid or unremitted might give rise to a lien or charge on any of the
Collateral ranking or purporting to rank in priority to any security
interest created by this Security Agreement;
(o) Further Assurances. It will do, execute, acknowledge and deliver or
cause to be done, exe cuted, acknowledged or delivered, such further
acts, deeds, mortgages, transfers and assurances as the Secured Party
will reasonably require for the better assuring, charging, assigning
and conferring unto the Secured Party the Collateral and the security
interests intended to be created hereunder, for the purpose of
accomplishing and effecting the intention of this Security Agreement;
(p) Purchase Monies. If the Secured Party advances money to the Debtor for
the purpose of enabling the Debtor to purchase or acquire rights in
any Collateral the Debtor will use such money only for that purpose
and will promptly provide the Secured Party with evidence that such
money was so applied;
(q) Securities. If the Collateral at any time includes a security, the
Debtor will if required by the Secured Party transfer the security
into the name of the Secured Party or the Secured Party's nominee and
until an Event of Default the Secured Party will provide the Debtor
with all notices and other communications received by it or its
nominee as registered owner of
<PAGE>
-8-
such security and will appoint, or cause its nominee to appoint, the
Debtor as proxy to vote concerning the security.
PART 5 - NEGATIVE COVENANTS
5.1 Negative Covenants. The Debtor covenants and agrees with the Secured Party
that it will not, without the prior written consent of the Secured Party:
(a) Change Name. Change its name;
(b) Amalgamate. Amalgamate or otherwise merge its business with the
business of any other person except in connection with a transaction
with VisionAmerica Incorporated;
(c) Continue. Continue from the jurisdiction which presently exercises
primary corporate governance over the affairs of the Debtor;
(d) Permit Charges. Permit the Collateral or any part or parts thereof to
become subject to any mortgage, charge, lien, encumbrance or security
interest, whether made, given or created by the Debtor or otherwise
except as permitted by Schedule 1, if any;
(e) Sell Collateral. Save as permitted in paragraph 5.2 sell, lease or
otherwise dispose of the Collateral or any part or parts thereof (and
in the event of any sale, lease or other disposition permitted or
consented to it will pay the proceeds to the Secured Party);
(f) Abandon Collateral. Release, surrender or abandon the Collateral or
any part or parts thereof;
(g) Move Collateral. Move the Collateral or any part or parts thereof from
its present location or locations (and will promptly advise the
Secured Party of the new location or locations);
(h) Accessions. Permit any of the Collateral to become an accession to any
property other than other Collateral.
5.2 Sale of Inventory. If this Security Agreement grants a security interest in
Inventory, until an Event of Default has occurred and the Secured Party has
determined to enforce the security interests hereby created, the Debtor may only
sell Inventory in the ordinary course of business and provided that:
(a) Terms. All sales will be on commercially reasonable terms;
(b) Proceeds Paid Over. All cash proceeds of sales will immediately be
paid over to the Secured Party; and
(c) Apply Proceeds. The proceeds of any such sales may, at the option of
the Secured Party, be applied to the Obligations.
<PAGE>
-9-
5.3 Sale of Equipment. If this Security Agreement grants a security interest in
Equipment, until an Event of Default has occurred and the Secured Party has
determined to enforce the security interests hereby created, the Debtor may sell
Equipment:
(a) which is replaced by Equipment of like or superior quality and
capacity ("Replacement Equipment"), or
(b) which is obsolete, worn out or otherwise no longer used or useful to
the Debtor in its business,
and the proceeds of which are either applied to the purchase price of
Replacement Equipment or paid to the Secured Party to be held as security for,
or applied to reduce, the Obligations, as the Secured Party sees fit.
PART 6 - DEFAULT AND ENFORCEMENT
6.1 Events of Default. The happening of any one of the following events or
conditions will constitute an event of default under this Agreement ("Event of
Default"):
(a) Default. If the Debtor makes default in the observance or performance
of something required to be done or some covenant or condition
required to be observed or performed in this Security Agreement or in
any other agreement or instrument between the Debtor and the Secured
Party;
(b) Misrepresentation. If any representation or warranty given by the
Debtor, or if the Debtor is a corporation by any director of officer
thereof, is untrue in any material respect;
(c) Winding Up. If the Debtor is a corporation and an order is made or a
resolution passed for the winding-up of the Debtor, or if a petition
is filed for the winding-up of the Debtor;
(d) Bankruptcy. If the Debtor commits or threatens to commit any act of
bankruptcy or becomes insolvent or makes an assignment or proposal
under the Bankruptcy and Insolvency Act or a general assignment in
favour of its creditors or a bulk sale of its assets, or if a
bankruptcy petition is filed or presented against the Debtor;
(e) Receiver, Etc. If any receiver, receiver-manager, trustee, custodian,
liquidator or similar agent is appointed for the Debtor or for any of
the Debtor's property;
(f) Arrangement. If the Debtor is a corporation and any proceedings
concerning the Debtor are commenced under the Companies Creditors
Arrangement Act;
(g) Execution etc. If any execution, sequestration, extent or any other
process of any Court becomes enforceable against the Debtor or if a
distress or analogous process is levied upon the Collateral or any
part thereof;
(h) Other Indebtedness. If the Debtor permits any sum which has been
admitted as due by the Debtor or is not disputed to be due by it and
which forms or is capable of being made a charge upon any of the
Collateral in priority to the security interests created by this
Security Agreement to remain unpaid for 30 days;
<PAGE>
-10-
charge upon any of the Collateral in priority to the security
interests created by this Security Agreement to remain unpaid
for 30 days;
(i) Cease Business. If the Debtor ceases or threatens to cease to
carry on its business;
(j) Default in Other Payment. If the Debtor makes default in
payment of any indebtedness or liability to the Secured Party
or any other person, whether secured hereby or not;
(k) Material Adverse Change. If, in the reasonable opinion of the
Secured Party, a material adverse change occurs in the
financial condition of the Debtor;
(l) Impaired Ability or Security. If the Secured Party in good
faith and on commercially reasonable grounds believes that the
ability of the Debtor to pay any of the Obligations to the
Secured Party or to perform any of the covenants contained in
this Agreement is impaired or any security granted by the
Debtor to the Secured Party is or is about to be impaired or
in jeopardy;
(m) Change of Control. If the Debtor is a corporation and if, in
the opinion of the Secured Party, effective control of the
Debtor changes.
6.2 Acceleration. If an Event of Default described in paragraph 6.1(f)
occurs all of the Obligations will immediately become due and payable without
any demand or any notice of any kind to the Debtor. If any other Event of
Default occurs the Secured Party, in its sole and absolute discretion, may
declare all or any part of the Obligations (whether or not by its terms payable
on demand) immediately due and payable, without any further demand or notice of
any kind.
6.3 Security Interests Enforceable. The occurrence of an Event of Default
will cause the security interests created hereby to become enforceable without
the need for any action or notice on the part of the Secured Party.
6.4 Remedies of the Secured Party. If the security interests hereby created
become enforceable, the Secured Party may enforce its rights by any one or more
of the following remedies:
(a) Take Possession. By taking possession of the Collateral or any
part thereof, and collecting, demanding, suing, enforcing,
recovering, receiving and otherwise getting in the same and
for that purpose entering into and upon any lands, tenements,
buildings, houses and premises wheresoever and whatsoever and
to do any act and take any proceedings in the name of the
Debtor, or otherwise, as the Secured Party will consider
necessary;
(b) Court Appointed Receiver. By proceedings in any court of
competent jurisdiction for the appointment of a receiver or
receiver-manager of all or any part of the Collateral;
(c) Court Ordered Sale. By proceedings in any court of competent
jurisdiction for the sale or foreclosure of all or any part of
the Collateral;
<PAGE>
-11-
(d) File Proofs of Claim. By filing of proofs of claim and other
documents to establish its claims in any proceeding or
proceedings relating to the Debtor;
(e) Appoint Receiver. By appointment by instrument in writing of a
receiver or receiver-manager of all or any part of the
Collateral;
(f) Sale or Lease. By sale or lease by the Secured Party of all or
any part of the Collateral (whether or not it has taken
possession of the same); and
(g) Voluntary Foreclosure. By retaining any of the Collateral in
satisfaction of all or part of the Obligations, in accordance
with paragraph 6.11;
(h) Other Remedies. By any other remedy or proceeding authorized
or permitted hereby or by law or equity (including all of the
rights and remedies of a secured party under the Personal
Property Security Act in effect from time to time);
and in exercising, delaying in exercising or failing to exercise, any such right
or remedy the Secured Party will not incur any liability to the Debtor.
6.5 Power of Sale. The provisions of paragraph 6.7(g) will apply, mutatis
mutandis, to a sale or lease of any of the Collateral by the Secured Party under
paragraph 6.5(f).
6.6 Receiver or Receiver-Manager. Any time after the security interests
hereby created have become enforceable, the Secured Party may from time to time
appoint in writing any qualified person to be a Receiver or Receiver and Manager
("Receiver") of the Collateral and may likewise remove any such person so
appointed and appoint another qualified person in his stead. Any such Receiver
appointed hereunder will have the following powers:
(a) Take Possession. To take possession of the Collateral or any
part thereof, and to collect and get in the same and for that
purpose to enter into and upon any lands, tenements,
buildings, houses and premises wheresoever and whatsoever and
to do any act and take any proceedings in the name of the
Debtor, or otherwise, as the Receiver will consider necessary;
(b) Carry On Business. If this Security Agreement creates security
interests in substantially all of the Debtor's present and
after-acquired personal property, to carry on or concur in
carrying on the business of the Debtor (including, without
limiting the generality of the powers contained in this
Agreement, the payment of the obligations of the Debtor
whether or not the same are due and the cancellation or
amendment of any contracts between the Debtor and any other
person) and the employment and discharge of such agents,
managers, clerks, accountants, servants, workmen and others
upon such terms and with such salaries, wages or remuneration
as the Receiver thinks proper;
(c) Repair. To repair and keep in repair the Collateral or any
part or parts thereof and to do all necessary acts and things
for the protection of the Collateral;
<PAGE>
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(d) Arrangements. To make any arrangement or compromise which the
Receiver thinks expedient in the interest of the Secured Party
or the Debtor and to assent to any modification or change in
or omission from the provisions of this Security Agreement;
(e) Exchange. To exchange any part or parts of the Collateral for
any other property suitable for the purposes of the Debtor
upon such terms as may seem expedient and either with or
without payment or exchange of money or equality of exchange
or otherwise;
(f) Borrow. To raise on the security of the Collateral or any part
or parts thereof, by mortgage, charge or otherwise any sum of
money required for the repair, insurance or protection
thereof, or any other purposes mentioned in this Agreement, or
as may be required to pay off or discharge any lien, charge or
encumbrance upon the Collateral or any part thereof, which
would or might have priority over the security interests
hereby created;
(g) Sell or Lease. Whether or not the Receiver has taken
possession, to sell or lease or concur in the sale or leasing
of any of the Collateral or any part or parts thereof after
giving the Debtor not less than 20 days' written notice of his
intention to sell or lease and to carry any such sale or lease
into effect by conveying, transferring, letting or assigning
in the name of or on behalf of the Debtor or otherwise; and
any such sale or lease may be made either at public auction or
privately as the Receiver will determine and any such sale or
lease may be made from time to time as to the whole or any
part or parts of the Collateral; and the Receiver may make any
stipulations as to title or conveyance or commencement of
title or otherwise which the Receiver considers proper; and
the Receiver may buy in or rescind or vary any contract for
the sale or lease of any of the Collateral or any part or
parts thereof, and may resell and release without being
answerable for any loss occasioned thereby; and the Receiver
may sell or lease any of the same as to cash or part cash and
part credit or otherwise as will appear to be most
advantageous and at such prices as can be reasonably obtained
therefor and in the event of a sale or lease on credit neither
he nor the Secured Party will be accountable or charged with
any monies until actually received.
6.7 Liability of Receiver. The Receiver appointed and exercising powers
under the provisions hereof will not be liable for any loss howsoever arising
unless the same will be caused by the Receiver's own negligence or wilful
default, and the Receiver will when so appointed be considered to be the agent
of the Debtor and the Debtor will be solely responsible for the Receiver's acts
and defaults and for the Receiver's remuneration.
6.8 Effect of Appointment of Receiver. As soon as the Secured Party takes
possession of any Collateral or appoints a Receiver, all powers, functions,
rights and privileges of the directors and officers of the Debtor concerning the
Collateral will cease, unless specifically continued by the written consent of
the Secured Party or the Receiver.
6.9 Validity of Sale or Lease. No purchaser at any sale and no lessee under
any lease purporting to be made in pursuance of the power set out in paragraph
6.5(f) and paragraph 6.7(g) will be bound to see or enquire whether any default
has been made or continues or whether any notice required hereunder has been
given or as to the necessity or expediency of the stipulations subject to which
sale or lease will have been made or otherwise as to the propriety of such sale
or lease, or regularity of proceedings or be affected by
<PAGE>
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notice that such default has been made or continues or notice given as
aforesaid, or that the sale or lease is otherwise unnecessary, improper or
irregular; and in spite of any impropriety or irregularity or notice thereof to
such purchaser or lessee the sale or lease as regards such purchaser or lessee
will be considered to be within the aforesaid power and be valid accordingly and
the remedy (if any) of the Debtor in respect of any impropriety or irregularity
whatsoever in any such sale or lease will be in damages only.
6.10 Voluntary Foreclosure. The Secured Party may elect to retain any of the
Collateral in satisfaction of the Obligations or any of them. The Secured Party
may designate any part of the Obligations to be satisfied by the retention of
particular Collateral which the Secured Party considers to have a net realizable
value approximating the amount of the designated part of the Obligations, in
which case only the designated part of the Obligations will be considered to be
satisfied by the retention of the particular Collateral.
6.11 Proceeds of Disposition. The proceeds of the sale, lease or other
disposition of the whole or any part of the Collateral will be applied as
follows:
(a) FIRSTLY to pay and discharge all rents, taxes, rates,
insurance premiums and out-goings affecting the Collateral;
(b) SECONDLY to pay all costs and expenses of taking possession
and/or sale or lease or otherwise (including the Receiver's
remuneration, if any);
(c) THIRDLY to pay such amounts as are necessary to keep in good
standing all liens and charges on the Collateral prior to the
security interests hereby created;
(d) FOURTHLY to pay any principal, interest and other monies due
and payable hereunder (in such order as the Secured Party may
require); and
(e) should any surplus remain in the hands of the Receiver or the
Secured Party then the Debtor will be entitled to such surplus
but only upon demand in writing made therefor.
6.12 No Set-Off Etc. The Obligations will be paid by the Debtor without
regard to any equities between the Debtor and the Secured Party or any right of
set-off, combination of accounts or cross-claim. Any indebtedness owing by the
Secured Party to the Debtor may be set off or applied against, or combined with,
the Obligations by the Secured Party at any time, either before or after
maturity, without demand upon, or notice to, anyone.
6.13 Deficiency. If the proceeds of the realization of the Collateral are
insufficient to fully pay to the Secured Party the Obligations, the Debtor will
immediately pay such deficiency or cause it to be paid to the Secured Party.
6.14 Waiver. The Secured Party may waive any breach by the Debtor of any of
the provisions contained in this Security Agreement or any Event of Default,
provided always that no act or omission of the Secured Party will extend to or
be taken in any manner whatsoever to affect any subsequent breach or Event of
Default or the rights resulting therefrom.
<PAGE>
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6.15 Time for Payment. If the Secured Party demands payment of any
Obligations which are payable on demand or if any Obligations are otherwise due
by maturity or acceleration, it will be considered reasonable for the Secured
Party to exercise its remedies immediately if such payment is not made, and any
days of grace or any time for payment which might otherwise be required to be
afforded to the Debtor by applicable law is hereby irrevocably waived.
PART 7 - NOTICES
7.1 Notices. In this Agreement:
(a) Any notice or communication required or permitted to be given
under the Agreement will be in writing and will be considered
to have been given if delivered by hand, transmitted by
facsimile transmission or mailed by prepaid registered post in
Canada, to the address or facsimile transmission number of
each party set out below:
(i) if to Secured Party:
Quest Ventures Ltd.
Suite 850, 1095 West Pender Street
Vancouver, BC V6E 2M6
Attention: A. Murray Sinclair
Fax No.: (604) 681-4692
(ii) if to Debtor:
ICON Laser Eye Centers, Inc.
1 Yonge Street, Suite 1014
Toronto, Ontario M5E 1E5
Attention: Ken Wightman
Fax No.: (416) 364-7636
or to such other address or facsimile transmission number as
any party may designate in the manner set out above.
(b) Notice or communication will be considered to have been
received:
(i) if delivered by hand during business hours, upon receipt
by a responsible representative of the receiver, and if
not delivery during business hours, upon the
commencement of the next business day;
(ii) if sent by facsimile transmission during business hours,
upon the sender receiving confirmation of the
transmission, and if not transmitted during business
hours, upon the commencement of the next business day;
and
<PAGE>
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(iii) if mailed by prepaid registered post in Canada, upon the
fifth business day following posting; except that, in
the case of a disruption or an impending or threatened
disruption in postal services every notice or
communication will be delivered by hand or sent by
facsimile transmission.
(c) In this Agreement "business day" will mean a day which is not
a Saturday or defined as a "holiday" under the Interpretation
Act (British Columbia), as amended or replaced from time to
time.
PART 8 - GENERAL
8.1 Discharge. If at any time there are no Obligations then in existence
and the Debtor is not in default of any of the covenants, terms and provisos on
the Debtor's part contained in this Agreement, then, at the request and at the
expense of the Debtor and upon payment by the Debtor to the Secured Party of the
Secured Party's standard discharge fee for discharging a security agreement the
Secured Party will cancel and discharge this Security Agreement and the security
interests granted in this Agreement and the Secured Party will execute and
deliver to the Debtor all such documents as are required to effect such
discharge.
8.2 No Obligation to Advance. The Debtor acknowledges and agrees that none
of the preparation, execution or registration of notice of this Security
Agreement will bind the Secured Party to advance the monies hereby secured nor
will the advance of a part of the monies hereby secured bind the Secured Party
to advance any unadvanced portion thereof.
8.3 Security Additional. The Debtor agrees that the security interests
created by this Security Agreement are in addition to and not in substitution
for any other security now or hereafter held by the Secured Party.
8.4 Realization. The Debtor acknowledges and agrees that the Secured Party
may realize upon various securities securing the Obligations or any part thereof
in such order as it may be advised and any such realization by any means upon
any security or any part thereof will not bar realization upon any other
security or the security hereby constituted or parts thereof.
8.5 No Merger. This Security Agreement will not operate so as to create any
merger or discharge of any of the Obligations, or of any assignment, transfer,
guarantee, lien, contract, promissory note, bill of exchange or security
interest held or which may hereafter be held by the Secured Party from the
Debtor or from any other person whomsoever. The taking of a judgment concerning
any of the Obligations will not operate as a merger of any of the covenants
contained in this Security Agreement.
8.6 Extensions. The Secured Party may grant extensions of time and other
indulgences, take and give up security, accept compositions, compound,
compromise, settle, grant releases and discharges, refrain from perfecting or
maintaining perfection of security interests and otherwise deal with the Debtor,
Account Debtors, sureties and others and with the Collateral and other security
interests as the Secured Party may see fit without prejudice to the liability of
the Debtor or the Secured Party's right to hold and realize on the security
constituted by this Security Agreement.
<PAGE>
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8.7 Provisions Reasonable. The Debtor acknowledges that the provisions of this
Security Agreement and, in particular, those respecting rights, remedies and
powers of the Secured Party or any Receiver against the Debtor, its business and
any Collateral are commercially reasonable.
8.8 Assignment. The Secured Party may, without notice to the Debtor, at any
time assign, transfer or grant a security interest in this Security Agreement
and the security interests hereby granted. The Debtor expressly agrees that the
assignee, transferee or secured party, as the case may be, will have all of the
Secured Party's rights and remedies under this Security Agreement and the Debtor
will not assert any defence, counter-claim, right of set-off or otherwise any
claim which the Debtor now has or hereafter acquires against the Secured Party
in any action commenced by any such assignee, transferee or secured party, as
the case may be, and will pay the Obligations to the assignee, transferee or
secured party, as the case may be, as the Obligations become due.
8.9 Appropriation of Payments. Any and all payments made in respect of the
Obligations from time to time and monies realized from any security interests
held therefor (including monies collected in accordance with or realized on any
enforcement of this Security Agreement) may be applied to such part or parts of
the Obligations as the Secured Party may see fit and the Secured Party may at
all times and from time to time change any appropriation as the Secured Party
may see fit.
8.10 No Representations. The Debtor acknowledges and agrees that the Secured
Party has made no representations or warranties other than those contained in
this Security Agreement.
8.11 Use of Collateral by Debtor. Save as provided in paragraph 1.6, until an
Event of Default occurs the Debtor will be entitled to possess, operate,
collect, use and enjoy the Collateral in any manner not inconsistent with the
terms hereof.
8.12 Modifications, Etc. No modification or amendment of this Security
Agreement will be effective unless in writing and executed by the Debtor and the
Secured Party and no waiver of any of the provisions of this Security Agreement
will be effective unless in writing and signed by the party waiving the
provision.
8.13 Disclosure of Information. The Debtor hereby consents to the Secured
Party, in compliance or purported compliance with any statutory disclosure
requirements, disclosing information about the Debtor, this Security Agreement,
the Collateral and the Obligations to any person the Secured Party believes is
entitled to such information and the Debtor acknowledges and agrees that the
Secured Party may charge and retain a fee and its costs incurred in providing
such information.
8.14 Statutory Waivers. To the fullest extent permitted by law, the Debtor
waives all of the rights, benefits and protections given by the provisions of
any existing or future statute which imposes limitations upon the powers, rights
or remedies of a secured party or upon the methods of realization of security,
including any seize or sue or anti-deficiency statute or any similar provisions
of any other statute.
<PAGE>
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PART 9 - INTERPRETATION
9.1 Incorporated Definitions. In this Security Agreement words which are
defined in the Personal Property Security Act (British Columbia) which are not
defined in this Agreement will have the meaning set out in the Personal Property
Security Act.
9.2 Headings. The headings in this Security Agreement are inserted for
convenience of reference only and will not affect the construction or
interpretation of this Security Agreement.
9.3 Generally Accepted Accounting Principles. Where the Canadian Institute of
Chartered Accountants include a recommendation in its Handbook concerning the
treatment of any accounting matter, such recommendation will be regarded as the
only generally accepted accounting principle applicable to the circumstances
that it covers and references in this Agreement to generally accepted accounting
principles will be interpreted accordingly.
9.4 Severability. If any provision contained in this Security Agreement is
invalid or unenforceable the remainder of this Security Agreement will not be
affected thereby and each provision of this Security Agreement will separately
be valid and enforceable to the fullest extent permitted by law.
9.5 Laws of British Columbia. This Agreement is governed by, and construed in
accordance with, the laws of the Province of British Columbia and the Debtor
hereby submits to the non-exclusive jurisdiction of the Courts of British
Columbia concerning this Security Agreement.
9.6 Joint Obligations. If more than one person is the Debtor, the agreements
of, and all obligations and covenants to be performed and observed by, the
Debtor hereunder will be the joint and several agreements, obligations and
covenants of each of the persons comprising the Debtor and any request or
authorization given to the Secured Party by any of the persons comprising the
Debtor will be considered to be the joint and several requests or authorizations
of each of the persons comprising the Debtor.
9.7 Time of Essence. Time will be of the essence hereof.
9.8 Number and Gender. In this Security Agreement, words in the singular
include the plural and vice-versa and words in one gender include all genders.
9.9 Enurement. This Security Agreement will enure to the benefit of and be
binding upon the parties hereto and their respective heirs, executors,
administrators, successors and permitted assigns.
PART 10 - ACKNOWLEDGMENT AND WAIVER
10.1 Acknowledgment and Waiver. The Debtor hereby:
(a) acknowledges receiving a copy of this Security Agreement; and
(b) waives all rights to receive from the Secured Party a copy of any
financing statement, financing change statement or verification
statement filed or issued, as the case may be, at any time in respect
of this Security Agreement or any amendments hereto.
<PAGE>
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TO EVIDENCE ITS AGREEMENT the Debtor has executed this Security Agreement on the
date first above written.
QUEST VENTURES LTD.
By:
________________________________
Authorized Signatory
ICON LASER EYE CENTERS, INC.
By:
________________________________
Authorized Signatory
<PAGE>
SCHEDULE 1
Prior Security Interests
. None.
