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 ▇▇▇▇▇ ▇▇▇, ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇ ▇▇▇
(the "Secured Party")
AND:
ICON LASER EYE CENTERS, INC., an Ontario corporation having its chief
executive office at ▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇
▇▇▇
(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
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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
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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
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(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:
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(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
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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;
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(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
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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.
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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;
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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;
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(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;
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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
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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.
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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.
▇▇▇▇▇ ▇▇▇, ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇ ▇▇▇
Attention: A. ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Fax No.: (▇▇▇) ▇▇▇-▇▇▇▇
(ii) if to Debtor:
ICON Laser Eye Centers, Inc.
▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇
Attention: ▇▇▇ ▇▇▇▇▇▇▇▇
Fax No.: (▇▇▇) ▇▇▇-▇▇▇▇
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
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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, ▇▇▇▇ 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.
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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 ▇▇▇ or anti-deficiency statute or any similar provisions
of any other statute.
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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.
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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
SCHEDULE 1
Prior Security Interests
. None.