AGREEMENT
THIS AGREEMENT executed as of the 6th day of January, 1997 BETWEEN:
VISTA TECHNOLOGIES, INC., PHARMAPATCH,
plc and RS-800, INC.
(hereinafter collectively referred to as "Vista")
- AND -
VISTA LASER CENTRES OF THE NORTHEAST INC.
(hereinafter referred to as "Northeast")
- AND -
CHERRY DEVELOPMENT CORPORATION, XXXXXX
XXXXXXX AND XX. XXXXXXX XXXXXX
(hereinafter collectively referred to as the
"Northeast Parties")
WHEREAS Northeast and the Northeast Parties desire and Vista
desires to terminate their relationship;
AND WHEREAS Northeast desires to transfer Vista Stock to Vista in
accordance with this agreement;
AND WHEREAS Vista desires to relinquish its interest in Northeast
and forgive any and all indebtedness;
NOW THEREFORE IN CONSIDERATION OF the mutual covenants contained
herein, (the receipt and sufficiency whereof being hereby mutually
acknowledged by all parties hereto) the parties agree as follows:
1. In consideration of Northeast releasing Vista of the operation
funding guarantee, Vista hereby transfers, conveys and assigns all right,
title and interest to its stock or ownership in Northeast. Vista does hereby
forever releases and hold Vista harmless from any liability or claim of
ownership. Northeast and the Northeast Parties similarly hereby jointly and
severally release and hold Vista and Vista's directors, officers, employees
and shareholders harmless from any liability or claim arising from Vista's
involvement with Northeast. Northeast will purchase Vista's equity interest
in Northeast in consideration of one dollar (the receipt and sufficiency of
which is hereby acknowledged). Vista shall forthwith cause its nominees to
resign from the Board of Directors and as officers of Northeast. Northeast
and its
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management shareholders shall provide these individuals with releases and
indemnities from personal liability in connection with such positions.
Northeast shall forthwith change its corporate name to delete "Vista" from its
corporate name.
2. Vista hereby assigns to Cherry Development Corporation on behalf
of such nominee as it may designate all of its outstanding capital
contributions, advances and loans made by Vista to Northeast and/or its
subsidiary, in consideration of one dollar (the receipt and sufficiency of
which is hereby acknowledged).
3. Upon execution hereof, Vista agrees to pay to Northeast the entire
principal amount outstanding under the 12% collateralized notes, together with
interest (the "Notes") issued to private investors, by Northeast (the "Note
Investors"), being $75,000, plus interest, against the receipt from each
investor of a full and final release of each of Vista and their respective
officers, directors, employees and shareholders from any and all liability in
connection therewith and the release by the Note Investors of all claims to
the Vista Shares (as defined in section 8) held as collateral for the Notes.
Northeast agrees to register any and all discharges under the PPSA necessary
in order to reflect the foregoing.
4. Upon execution hereof, Vista agrees to pay a lump sum payment in
the amount of $50,000 to Northeast to assist it in carrying on its business
activities. In addition to the foregoing, Vista agrees to pay $75,000 to
Northeast and $200,000 (the "Escrow Funds") to Grubner, Krauss, Barristers and
Solicitors (the "Escrow Agents") upon Vista completing its financing with
Paramount Capital or any other investor or lender, in a minimum aggregate
gross amount of $2 million dollars, which it contemplates doing on or before
January 20, 1997. (The parties acknowledge and agree that any equipment
leasing will not be considered part of any such Vista financing for purposes
of calculating the minimum aggregate gross amount of $2 million dollars). The
$200,000 being remitted to the Escrow Agents shall be held by the Escrow
Agents and remitted by the Escrow Agents upon the following terms and
conditions:
a. The Escrow Agents shall remit directly to Northeast's premises
lessor and equipment lessors to the extent that Escrow Funds are available, on
the first day of each month commencing in February, the amount of $25,000 to
assist Northeast in defraying the aforesaid expenses. The Escrow Agents agree
to provide confirmation of such payment to Vista forthwith following
remittance thereof.
b. The Escrow Agents shall release $50,000 to Northeast upon
Northeast delivering to the Escrow Agents, a final release of Northeast's
license of the Vista name as contemplated by paragraph 5 hereof.
Provided however that the Escrow Agents shall remit to Vista any amounts not
already advanced to Northeast pursuant to the terms hereof (with any interest
earned on such Escrow Funds which has not already been advanced to Northeast
pursuant to the terms hereof) at such time as Northeast has completed one or
more
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financings in the aggregate gross minimum amount of $500,000 by way of debt or
equity. Northeast agrees to use reasonable best efforts to complete such
financings as soon as possible. In addition, the Escrow Agents shall remit to
Vista any Escrow Funds not already advanced to Northeast pursuant to the terms
hereof, upon:
(i) a direct or indirect change in control of Northeast; or
(ii) the bankruptcy or commercial insolvency of Northeast;
(iii) Xx. Xxxxxx opening, operating, being involved with, affiliated
with, lending his name to or becoming otherwise related to any of the
Corporations or firms listed on Schedule "A" attached or their successors,
save and except for Xx. Xxxxxx continuing any previously established patient
referral relationships with 20/20 (now owned by TLC Laser Centers) and Clear
Vision.
Provided further, that the Escrow Agents shall return to Vista the $50,000
referred to in paragraph (b) hereof (without set-off), if Northeast fails to
deliver a release to the license agreement by the 1st day of July, 1997.
Provided further that upon execution hereof Vista shall deliver an irrevocable
direction to Paramount Capital directing Paramount Capital to remit to the
Escrow Agents and to Northeast the amounts payable pursuant to this paragraph
forthwith following it or its nominee having available the moneys it
contemplates raising on behalf of, or in connection with its offering or its
investment or its financing of Vista, in the aggregate minimum amount of $2
million dollars. Vista shall forthwith cause Paramount Capital to acknowledge
receipt of the aforesaid irrevocable direction and Paramount Capital's
agreement to be bound for by the terms thereof.
5. Northeast will agree to cease using the "Vista" name and
associated trademarks in connection with its business operations and shall
take the necessary steps to change the signage at its Toronto clinic on or
before July 1, 1997 and acknowledges that such name and trademark are the sole
property of Vista to utilize the name and trademarks as aforesaid. Northeast
acknowledges that in the event of bankruptcy or a material breach of the
provisions hereof the license shall terminate. Vista will be permitted to
advise creditors of Northeast, other than the equipment lessor and the
premises lessor, that it is no longer associated with Northeast.
6. Vista will agree to forthwith cease using the name of Xx. Xxxxxxx
Xxxxxx and the reference to the Toronto clinic in its advertisements and
investor materials. Vista will allow Northeast's representatives to speak
with a representative of Paramount Capital to ensure that it is understood
that neither Northeast nor Xx. Xxxxxx is associated with Vista. Northeast
agrees that a representative of Vista may participate in such meeting or
discussion.
7. Vista will remain as guarantor under the premises lease respecting
the Xxxxxxxxx Xxxxxxx clinic located at the Collonade and under the equipment
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lease for the equipment located at that clinic, provided that Northeast shall
use reasonable best efforts to amend such leases to provide that at such time
as Northeast raises capital in the amount of $2 million or more or in the
event of a direct or indirect change in control of Northeast, Vista's
guarantee on such leases shall be unconditionally released (For purposes of
this agreement "control" shall have the meaning set out in section 1(5) of the
Ontario Business Corporations Act. Xxxxxx Xxxxxxx, Xx. Xxxxxxx Xxxxxx and
Cherry Development Corporation represent and warrant that Northeast is
presently jointly controlled by Cherry Development Corporation and Shefa
Enterprises Limited and the parties agree that a direct or indirect change in
control of either Cherry Development Corporation or Shefa Enterprises Limited,
other than a change in favour of Xxxxxx Xxxxxxx or Xxxxxxx Xxxxxx, shall be
considered a change in control of Northeast. In the event that despite the
exercise of such reasonable best efforts, the lessors under such leases are
unwilling to make such amendments, Northeast will provide a secured indemnity
to hold Vista harmless under such guarantees at such time as it raises capital
in the amount of $2 million or more or in the event of a direct or indirect
change in control of Northeast. Northeast shall also agree to provide Vista
with the right to assume the leases in the event of an unremedied default, and
following 15 days written notice thereof to Northeast, and shall agree to
provide immediate written notice of any defaults thereunder and shall agree
not to move such equipment outside the Metropolitan Toronto clinic without the
prior consent of Vista. Vista's guarantee hereunder shall only operate for
the initial term of such leases and shall not continue upon renewal.
Northeast agrees to provide a quarterly statement to Vista to the effect that
there has been no direct or indirect change of control in Northeast or Cherry
Development Corporation or Shefa Enterprises Limited and that the lease is not
in default. Provided that following July 1, 1997, Northeast shall have no
obligation to provide any information other than in respect to the status of
the lease. Provided that Vista may confirm the status of the leases with the
lessors directly from time to time. So long as Vista has not been released
from such leases, Northeast shall not assign or sublet the equipment or the
premises under such leases without the consent of Vista, such consent not to
be unreasonably withheld or delayed.
8. The 450,000 shares of common stock in the capital of Vista (the
"Vista Shares") being the property of Northeast shall be assigned to Vista
forthwith following the deposit with the Escrow Agents of all funds
contemplated by paragraphs 4 and 9 hereof. The Vista Shares shall be assigned
to Vista free and clear of any encumbrances or liens. Upon the execution
hereof, Northeast agrees to deposit the Vista shares with the Escrow Agents to
ensure that they are not assigned or encumbered in contravention of this
agreement. Should Vista fail to advance the sums required pursuant to section
4 and 9 hereof, the Escrow Agents shall return the Vista Shares to Northeast.
9. Vista shall concurrently with the payments to the Escrow Agents of
the amounts referred to in paragraph 4 hereof, also remit to the Escrow Agents
the amount of $50,000 which shall be made available to Northeast, by the
Escrow Agents to assist Northeast in the preparation of documentation and the
raising of capital, whether by way of financing or equity.
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It is understood that $25,000 of the amount shall be advanced to third party
professionals assisting in the raising of capital, at the inception of that
process and the balance of which shall be advanced only at such time as the
Escrow Agents are reasonably satisfied that sufficient investors have been
procured to make completion of the financing in the aggregate gross amount of
$500,000 a reasonable likelihood. At such time, the Escrow Agents shall
provide notice to Vista of such disbursement.
Northeast shall be obligated to repay this $50,000, without interest (except
in the event of default), to Vista upon the raising of capital, in aggregate,
of the gross amount of $500,000. Northeast agrees to provide a general
security agreement and promissory note and general security agreement shall be
subordinate to any and all third party financing.
The Escrow Agents shall provide Vista with a quarterly accounting of the
disbursement of escrow funds. In the event that there is a legitimate
material dispute with respect to the provisions hereof or the disbursements of
the Escrow Funds, the Escrow Agents are hereby irrevocably directed to deposit
such Escrow Funds with a Court of competent jurisdiction pending the
resolution of the dispute. In such event, the Escrow Agents shall deliver
written notice to all parties.
10. Vista does hereby release and hold Northeast and its shareholders
and officers harmless and forever discharged from any liability in connection
with any funds advanced or contributed to Northeast on any other agreement.
Northeast does hereby release and hold Vista and its directors, officers,
employees and shareholders harmless and forever discharged from any liability
in connection with any agreement or instrument entered into in furtherance of
Northeast's business. All other agreements including without limitation the
Option Agreement and the Consulting Agreement entered into between the parties
hereto shall automatically terminate and be of no further force and effect.
The parties shall exchange full and final releases and shall agree to keep the
terms of this agreement confidential, except as set forth above.
All amounts stated in the agreement are stated in United States currency. In
addition, each of Northeast and Vista and their respective principals agree
that they will take no steps to interfere with or frustrate the financing
efforts of the other and shall take no steps and make no comments to third
parties which would reasonably have this result or disparage the reputation of
the other.
11. The parties hereto acknowledge that any promotional or marketing
material, logos, designs, brochures, trademarks, stationary, advertising, or
any other material of a related nature shall, remain the property of Vista but
shall be licensed to Northeast (on a non-assignable basis) for a period of 21
years (with an automatic renewal every 21 years) within the Xxxxxxx Xxxxxxx
Area (for purposes of this agreement Xxxxxxx Xxxxxxx Area means all Canadian
territory within a radius of 100 kilometres of the Vista Eye Institute at 000
Xxxxx Xxxxxx, Xxxxxxx. For greater certainty the parties acknowledge and
agree that the Xxxxxxx Xxxxxxx Area does not include Windsor, Ontario). Such
licence shall
Page 6
terminate upon the bankruptcy or insolvency of Northeast or upon a material
breach of this agreement by Northeast or the Northeast Parties. The parties
further acknowledge and agree that the copy and text of such promotional
materials may be used by both Vista and Northeast in their respective areas
provided that Vista's use of such copy and text will not include any reference
to Xx. Xxxxxx and, subject to the licence agreement set out in section 1
hereof, Northeast's use of such copy and text shall not use the word "Vista"
or associated logo). Notwithstanding the foregoing, Vista shall be entitled
to provide such promotional material to potential investors within the Xxxxxxx
Xxxxxxx Area as part of providing a prospectus or offering memorandum (and
associated materials) to such potential investors. In consideration of the
foregoing, Vista acknowledges that it shall not open or operate or be involved
with or affiliated with or otherwise related to a laser vision correction
center or any center that provides laser vision correction services under or
using the name "Vista" in any manner within the Xxxxxxx Xxxxxxx Area for a
period of at least two years following execution of this agreement.
Notwithstanding the foregoing, such requirement that Vista not use the "Vista
" name within the Xxxxxxx Xxxxxxx Area shall cease immediately upon:
(a) a direct or indirect change in control of Northeast;
(b) the bankruptcy or commercial insolvency of Northeast;
(c) a material breach by Northeast, Xx. Xxxxxxx Xxxxxx, Xxxxxx Xxxxxxx
or Cherry Development Corporation of any of the terms of this
agreement;
(d) Xx. Xxxxxxx Xxxxxx opening, operating, becoming involved with,
affiliated with, lending his name to or becoming otherwise related
to or with any of the corporations or firms listed on Schedule "A"
attached or their successors save and except for Xx. Xxxxxx
continuing any previously established patient referral
relationships with 20/20 (now owned by TLC Laser Centers) and
Clear Vision; or
(e) Xx. Xxxxxx'x soliciting any physician, who as of the date of such
solicitation has entered into a written agreement with Vista for
some form of association with Vista, to leave or break his or her
association with Vista.
Notwithstanding a material breach of this agreement, Vista shall
continue to have the right to use the "Vista" name outside the Xxxxxxx Xxxxxxx
Area.
12. This agreement may be executed in one or more counterparts and by
facsimile transmission. Each counterpart shall be deemed an original and all
counterparts shall constitute one and the same instrument. It shall not be
necessary that any single counterpart be executed by all parties, as long as
at least one counterpart is executed by each party.
13. This agreement shall be governed by and interpreted in accordance
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with the laws of the province of Ontario, Canada.
14. The parties hereto agree to execute such further documents and
assurances as may be necessary to implement the terms and provisions of this
agreement. Time shall be of the essence of this agreement and of every part
hereof. This agreement shall be binding upon the parties hereto and any
successors, assigns, affiliated or related parties, and any subsidiaries
thereof (as all of those terms are defined in the Income Tax Act of Canada).
15. Should any party to this agreement be entitled to certain rights
or to take certain actions upon a "material breach" by one of the other
parties to this agreement, the party alleging such material breach shall not
be entitled to such rights or to take such actions until the issue has been
arbitrated and the arbitrator has determined that there has been a material
breach. The parties acknowledge and agree that should one party allege that
there has been a material breach by one of the other parties to this
agreement, the issue shall be determined by arbitration pursuant to the
Arbitration Act, Ontario. The arbitrator shall be appointed by a court of
competent jurisdiction. The costs of such arbitration shall be as awarded by
the arbitrator. The decision of the arbitrator shall be final and shall not
be subject to appeal.
16. Each party hereto acknowledges that he, she, or it understands the
provisions hereof and has been advised to obtain independent legal advice.
DATED as of the 7 day of January, 1997.
VISTA TECHNOLOGIES INC.
Per: /s/ Xxxxxx X. Xxxxxxx c/s
-------------------------
PHARMA PATCH plc
Per: /s/ Xxxxxx X. Xxxxxx c/s
-------------------------
RS-800, INC.
Per: /s/ Xxxxxx X. Xxxxxxx c/s
-------------------------
VISTA LASER CENTRES OF THE NORTHEAST
INC.
Per: /s/ Xxxxxx Xxxx Xxxxxxx c/s
-------------------------
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/s/ Xxxxxxx Xxxxxx
------------------------------
XX. XXXXXXX XXXXXX
/s/ Xxxxxx Xxxx Xxxxxxx
------------------------------
XXXXXX XXXXXXX
CHERRY DEVELOPMENT CORPORATION
Per: /s/ Xxxxxx Xxxx Xxxxxxx c/s
-------------------------
SCHEDULE "A"
1. TLC Laser Centers
2. Summit Technology
3. Laser Vision Centers inc.
4. Sight Resources
5. Global Vision
6. Clear Vision
7. Vision Sculpting
8. Shooting Star Inc.
9. Beacon Eye Centers Inc.
10. Sterling Vision
11. LCA Vision
