<PAGE>
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
__________
SCHEDULE 14D-1
TENDER OFFER STATEMENT PURSUANT TO SECTION 14(d)(1)
OF THE SECURITIES EXCHANGE ACT OF 1934
(AMENDMENT NO. )/1/
AMERICAN CONSUMER PRODUCTS, INC.
-------------------------------------------
(Name of subject company [issuer])
VISTA 2000, INC.
-------------------------------------------
(Bidder)
Common Stock, $.10 Par Value Per Share
--------------------------------------------------
(Title of class of securities)
025236-10-0
-------------------------------------
(CUSIP Number of Class of Securities)
Richard P. Smyth, 11660 Alpharetta Highway, Suite 330,
Roswell, Georgia 30076
(707) 751-3776
-------------------------------------
(Name, address and telephone number of person authorized to
receive notices and communications on behalf of bidder)
Copies to: Steven A. Cunningham,
400 Colony Square, Suite 2200,
1201 Peachtree Street, N.E.
Atlanta, GA 30361
Calculation of Filing Fee
Transaction Valuation /2/ Amount of Filing Fee
--------------------- --------------------
$13,771,673.70 $2,754.34
* Pursuant to, and as provided by, Rule 0-11(d), this amount is based on the
purchase of 2,598,429 shares of Common Stock at $5.30 per share in cash.
[_] Check box if any part of the fee is offset as provided by Rule 0-11 (a)(2)
and identify the filing with which the offsetting fee was previously paid.
Identify the previous filing by registration statement number, or the form
or schedule and the date of its filing.
Amount previously paid: _______________ Filing Party:_______________
Form or Registration No.:_______________ Date Filed: ________________
__________________________
/1/ 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 the disclosure provided in a prior cover page.
The information required in 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 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).
- -----
/2/ Set forth the amount on which the filing fee is calculated and state how it
was determined.
<PAGE>
NOTE: The remainder of this cover page is only to be completed if this
Schedule 14D-1 (or amendment thereto) is being filed, inter alia, to satisfy the
reporting requirements of Section 13(d) of the Securities Exchange Act of 1934.
See General Instructions D, E and F to Schedule 14D-1.
- ---
<PAGE>
3116 Schedule 14D-1
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CUSIP No. 025236-10-0 14D-1
---------------
- --------------------------------------------------------------------------------
1. Name of Reporting Persons
S.S. or I.R.S. Identification No. of Above Persons
VISTA 2000, Inc. 58-1972066
- --------------------------------------------------------------------------------
2. Check the Appropriate Box if a Member of a Group*
(a) [_]
(b) [_]
- --------------------------------------------------------------------------------
3. SEC Use Only
- --------------------------------------------------------------------------------
4. Sources of Funds*
WC
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5. Check Box if Disclosure of Legal Proceedings is
Required Pursuant to Items 2(e) or 2(f) [_]
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6. Citizenship or Place of Organization
Delaware
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7. Aggregate Amount Beneficially Owned by Each Reporting Person
22,000
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8. Check if the Aggregate Amount in Row (7) Excludes
Certain Shares* [_]
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9. Percent of Class Represented by Amount in Row (7)
0.9%
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10. Type of Reporting Person*
CO
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*SEE INSTRUCTIONS BEFORE FILLING OUT!
<PAGE>
Item 1. Security and Subject Company.
- ------- -----------------------------
(a) The name of the subject company is American Consumer Products,
Inc., a Delaware corporation (the "Company"), which has its principal executive
offices at 31100 Solon Road, Solon, Ohio 44139.
(b) This Statement on Schedule 14D-1 relates to the offer by Vista
2000, Inc., a Delaware corporation (the "Purchaser") to purchase all outstanding
shares of Common Stock, par value $.10 per share (the "Shares"), of the Company
not owned by the Purchaser at $5.30 per Share, net to the seller in cash, upon
the terms and subject to the conditions set forth in the Offer to Purchase dated
August 30, 1995, and the related Letter of Transmittal (which together
constitute the "Offer"), copies of which are attached hereto as Exhibits (a)(1)
and (a)(2) respectively. The information set forth in the Introduction to the
Offer to Purchase is incorporated herein by reference.
(c) The information concerning the principal market for, and the
prices of, the Shares set forth in Section 9 "Price Range of Shares;
Distributions" of the Offer to Purchase is incorporated herein by reference.
Item 2. Identity and Background.
- ------- ------------------------
The Purchaser's name, state of organization, its principal business,
and its principal office are set forth in the Introduction and Section 13
"Certain Information Concerning the Purchaser" of the Offer to Purchase which is
incorporated herein by reference.
(e)-(f) Neither the Purchaser nor, to the best of Purchaser's
knowledge, any of the persons listed on Schedule I to the Offer to Purchase have
during the last five years (i) been convicted in a criminal proceeding
(excluding traffic violations or similar misdemeanors) or (ii) been a party to a
civil proceeding of a judicial or administrative
<PAGE>
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 activities subject to, federal or state securities laws or finding
any violation of such laws.
Item 3. Past Contacts, Transactions or Negotiations with the Subject Company.
- ------- ---------------------------------------------------------------------
(a) None.
(b) The information set forth in Section 11 "Background of the Offer;
Past Contacts, Transactions or Negotiations with the Company" of the Offer to
Purchase is incorporated herein by reference.
Item 4. Source and Amount of Funds or Other Consideration.
- ------- --------------------------------------------------
(a) The information set forth in Section 7 "Source of Funds" of the
Offer to Purchase is incorporated herein by reference.
(b) Not applicable.
(c) Not applicable.
Item 5. Purpose of the Tender Offer and Plans or Proposals of the Bidder.
- ------- -----------------------------------------------------------------
(a)-(e) The information set forth in the Introduction and Section 10
"Purpose of the Offer; Plans for the Company" of the Offer to Purchase is
incorporated herein by reference.
(f)-(g) The information set forth in Section 6 "Effect of the Offer on
the Market for the Shares, NASDAQ/NMS Quotation, Exchange Act Registration and
Margin Regulations" of the Offer to Purchase is incorporated herein by
reference.
Item 6. Interest in Securities of the Subject Company.
- ------- ----------------------------------------------
(a)-(b) The information set forth in the Introduction and Section 11
"Background of the Offer; Past Contacts, Transactions or
<PAGE>
Negotiations with the Company" of the Offer to Purchase is incorporated herein
by reference.
Item 7. Contracts, Arrangements, Understandings or Relationships with Respect
- ------- ---------------------------------------------------------------------
to the Subject Company's Securities.
------------------------------------
The information set forth in the Introduction and Section 11
"Background of the Offer; Past Contacts, Transactions or Negotiations with the
Company" of the Offer to Purchase is incorporated herein by reference.
Item 8. Persons Retained, Employed or To Be Compensated.
- ------- ------------------------------------------------
The information set forth in Section 15 "Fees and Expenses" of the
Offer to Purchase is incorporated herein by reference.
Item 9. Financial Statements of Certain Bidders.
- ------- ----------------------------------------
Purchaser does not believe that its financial condition is material to
a decision by a security holder of the Company whether to sell, tender or hold
Shares. As supplemental material not required to be included in the Offer to
Purchase or this Statement, however, the information set forth in Section 13
"Certain Information Concerning the Purchaser" of the Offer to Purchase is
incorporated herein by reference.
Item 10. Additional Information.
- -------- -----------------------
(a) The information set forth in Section 10 "Purpose of the Offer;
Plans for the Company" and Section 11 "Background of the Offer; Past Contacts,
Transactions, or Negotiations with the Company" of the Offer to Purchase is
incorporated herein by reference.
(b)-(c) The information set forth in Section 14 "Certain Legal
Matters" of the Offer to Purchase is incorporated herein by reference.
(d) The information set forth in Section 6 "Effect of the Offer on the
Market for Shares, NASDAQ/NMS Quotation, Exchange Act Registration
<PAGE>
and Margin Regulations" and Section 7 "Source of Funds" of the Offer to Purchase
is incorporated herein by reference.
(e) None.
(f) The information set forth in the Offer to Purchase and the Letter
of Transmittal, copies of which are attached hereto as Exhibits (a)(1) and
(a)(2) respectively, is incorporated herein by reference in its entirety.
Item 11. Material To Be Filed as Exhibits.
- -------- ---------------------------------
(a)(1) Offer to Purchase dated August 30, 1995.
(a)(2) Letter of Transmittal.
(a)(3) Notice of Guaranteed Delivery.
(a)(4) Letter to Brokers, Dealers, Banks, Trust Companies and
Other Nominees.
(a)(5) Letter from Brokers, Dealers, Banks, Trust Companies and
Other Nominees to their Clients.
(a)(6) Guidelines for Certification of Taxpayer Identification Number
on Substitute Form W-9.
(a)(7) Text of Press Release issued by Vista 2000, Inc. dated August
29, 1995.
(a)(8) Form of Summary Advertisement dated August 30, 1995.
(b) None.
(c)(1) Confidentiality Agreement between the Company and the Purchaser
dated August 2, 1995 and waiver of the Company dated August 29, 1995.
(c)(2) Escrow Agreement among the Company, the Purchaser and the
Escrow Agent dated as of August 29, 1995.
(c)(3) Employment Agreement between the Company and Stephan W. Cole
dated August 29, 1995.
<PAGE>
(c)(4) Employment Agreement between the Company and Richard Bern
dated August 29, 1995.
(c)(5) Indemnification Agreement between the Purchaser and the
Company dated August 29, 1995.
(c)(6) Agreement for the Sale and Purchase of Real Estate between the
Purchaser and 31100 Solon Road, Inc. dated August 29, 1995.
(c)(7) Agreement for the Sale and Purchase of Real Estate between the
Purchaser and CRS Limited Partnership dated August 29, 1995.
(c)(8) Letter Agreement between the Purchaser and Kissel-Blake, Inc.
dated August 17, 1995.
(c)(9) Letter Agreement between the Purchaser and Harris Trust Company
of New York dated August 29, 1995.
(d) None.
(e) Not applicable.
(f) None.
SIGNATURE
After due 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.
Dated: August 30, 1995
VISTA 2000, INC.
By /s/ RICHARD P. SMYTH
------------------------------------------
Richard P. Smyth
Chief Executive Officer
<PAGE>
EXHIBIT INDEX
<TABLE>
<CAPTION>
Page No.
Exhibit in Sequentially
No. Description Numbered Schedule
- ------- ----------- -----------------
<S> <C> <C>
(a)(1) Offer to Purchase dated
August 30, 1995.
(a)(2) Letter of Transmittal.
(a)(3) Notice of Guaranteed Delivery.
(a)(4) Letter to Brokers, Dealers,
Banks, Trust Companies and
Other Nominees.
(a)(5) Letter from Brokers, Dealers,
Banks, Trust Companies and
Other Nominees
to their Clients.
(a)(6) Guidelines for Certification
of Taxpayer Identification
Number on Substitute Form W-9.
(a)(7) Text of Press Release issued
by Vista 2000, Inc. dated
August 29, 1995.
(a)(8) Form of Summary Advertisement
dated August 30, 1995.
(c)(1) Confidentiality Agreement
between the Company and the
Purchaser dated August 2,
1995, and waiver of the Company
dated August 29, 1995.
(c)(2) Escrow Agreement among the
Purchaser, the Company and the
Escrow Agent dated as of
August 29, 1995.
(c)(3) Employment Agreement between the Company
and Stephan W. Cole dated August 29, 1995.
(c)(4) Employment Agreement between the Company
and Richard Bern dated August 29, 1995.
</TABLE>
<PAGE>
<TABLE>
<S> <C>
(c)(5) Indemnification Agreement
between the Purchaser and the
Company dated August 29, 1995.
(c)(6) Agreement for the Sale and Purchase of
Real Estate between the Purchaser and
31100 Solon Road, Inc. dated August 29, 1995
(c)(7) Agreement for the Sale and Purchase of
Real Estate between the Purchaser and
CRS Limited Partnership dated August 29, 1995.
(c)(8) Letter Agreement between the
Purchaser and Kissel-Blake,
Inc. dated August 17, 1995.
(c)(9) Letter Agreement between the
Purchaser and Harris Trust
Company of New York dated August 29, 1995.
</TABLE>
<PAGE>
OFFER TO PURCHASE FOR CASH
ALL OUTSTANDING SHARES OF COMMON STOCK
OF
AMERICAN CONSUMER PRODUCTS, INC.
BY
VISTA 2000, INC.
AT
$5.30 NET PER SHARE
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00
MIDNIGHT, NEW YORK CITY TIME, ON THURSDAY, SEPTEMBER
28, 1995, UNLESS THE OFFER IS EXTENDED.
Vista 2000, Inc., a Delaware corporation (the "Purchaser"), hereby offers to
purchase all outstanding shares of common stock, $.10 par value per share (the
"Shares"), of American Consumer Products, Inc., a Delaware corporation (the
"Company"), that are not owned by the Purchaser, at $5.30 per Share, net to
the seller in cash, upon the terms and subject to the conditions set forth in
this Offer to Purchase and in the related Letter of Transmittal (which
together constitute the "Offer"). The Shares sought pursuant to this Offer
represent not less than fifty-one percent (51%) and up to one hundred percent
(100%) of the 2,598,429 Shares outstanding on a fully diluted basis as of
August 15, 1995 that are not owned by the Purchaser.
THE OFFER IS CONDITIONED UPON, AMONG OTHER THINGS, (1) THERE BEING VALIDLY
TENDERED PRIOR TO THE EXPIRATION OF THE OFFER AND NOT WITHDRAWN A NUMBER OF
SHARES WHICH, TOGETHER WITH ANY SHARES BENEFICIALLY OWNED BY THE PURCHASER,
REPRESENTS AT LEAST FIFTY-ONE PERCENT OF THE SHARES OUTSTANDING ON A FULLY
DILUTED BASIS, AND (2) SATISFACTION OF CERTAIN OTHER CONDITIONS. SEE SECTION
8.
----------------
IMPORTANT
Any Shareholder desiring to tender all or any portion of his Shares should
either (1) complete and sign the Letter of Transmittal or a facsimile thereof
in accordance with the instructions in the Letter of Transmittal, mail or
deliver it and any other required documents to the Depositary and either
deliver the certificates for such Shares to the Depositary along with the
Letter of Transmittal or tender such Shares pursuant to the procedure for
book-entry transfer set forth in Section 3 hereof, or (2) request his broker,
dealer, commercial bank, trust company or other nominee to effect the
transaction for him. A Shareholder having Shares registered in the name of a
broker, dealer, commercial bank, trust company or other nominee must contact
such broker, dealer, commercial bank, trust company or other nominee if he
desires to tender such Shares.
Any Shareholder who desires to tender Shares, and whose certificates for
such Shares are not immediately available, or who cannot complete the
procedure for book-entry transfer on a timely basis, should tender such Shares
by following the procedures for guaranteed delivery set forth in Section 3
hereof.
Questions and requests for assistance may be directed to the Information
Agent at the address and telephone number set forth on the back cover of this
Offer to Purchase. Requests for additional copies of this Offer to Purchase,
the Letter of Transmittal and the Notice of Guaranteed Delivery may be
directed to the Information Agent or to brokers, dealers, commercial banks or
trust companies.
----------------
August 30, 1995
The Information Agent for the Offer is:
LOGO
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Introduction.............................................................. 1
1. Terms of the Offer.................................................. 2
2. Acceptance for Payment and Payment.................................. 3
3. Procedures for Tendering Shares..................................... 4
4. Withdrawal Rights................................................... 6
5. Certain Federal Income Tax Consequences............................. 6
6. Effect of the Offer on the Market for the Shares, NASDAQ/NMS
Quotation, Exchange Act Registration and Margin Regulations......... 7
7. Source of Funds..................................................... 8
8. Certain Conditions of the Offer..................................... 8
9. Price Range of Shares; Distributions................................ 9
10. Purpose of the Offer; Plans for the Company......................... 10
11. Background of the Offer; Past Contacts, Transactions or Negotiations
with the Company.................................................... 11
12. Certain Information Concerning the Company.......................... 12
13. Certain Information Concerning the Purchaser........................ 14
14. Certain Legal Matters............................................... 15
15. Fees and Expenses................................................... 16
16. Miscellaneous....................................................... 17
Schedule I--Directors and Executives Officers of the Purchaser............ S-1
</TABLE>
i
<PAGE>
To the Holders of Shares of Common Stock of American Consumer Products, Inc.
INTRODUCTION
Vista 2000, Inc., a Delaware corporation ("the Purchaser"), hereby offers to
purchase all outstanding shares of common stock, $.10 par value per share (the
"Shares"), of American Consumer Products, Inc., a Delaware corporation ("the
Company"), other than Shares owned by the Purchaser, at $5.30 per Share, net
to the seller in cash, upon the terms and subject to the conditions set forth
in this Offer to Purchase and in the related Letter of Transmittal (which
together constitute the "Offer"). Tendering shareholders will not be obligated
to pay brokerage commissions, solicitation fees, or, except as set forth in
Instruction 6 of the Letter of Transmittal, stock transfer taxes on the
purchase of Shares by the Purchaser. The Purchaser will pay all charges and
expenses of Harris Trust Company of New York (the "Depositary") and Kissel-
Blake Inc. (the "Information Agent") in connection with the Offer.
The Offer is conditioned upon, among other things, there being validly
tendered prior to the expiration of the Offer and not withdrawn, a number of
Shares which, together with any Shares beneficially owned by the Purchaser,
represents at least fifty-one percent (51%) of the Shares outstanding on a
fully diluted basis (the "Percentage Amount"), and the satisfaction of certain
other conditions. See Section 8.
The purpose of the Offer is to acquire outstanding Shares sufficient to give
the Purchaser a controlling interest in the Company. The Purchaser believes
that by controlling the Company, the Purchaser can use its products and
technical expertise to improve the long-term profitability of the Company for
the benefit of the Company and its shareholders (the "Shareholders"). To do
this, the Purchaser plans to expand the product offerings of the Company to
include the Purchaser's product lines, expand the Purchaser's product
development activities to include projects key to the Company's future, and
consolidate certain operations of the Company to reach this increased
profitability objective. If the Purchaser is successful in acquiring control
of the Company, the Purchaser intends to seek to have its representatives or
nominees elected or designated to fill a majority of the seats on the
Company's Board of Directors, but the Purchaser has no plans to make any
changes in the executive officers of the Company in the foreseeable future.
Moreover, if the Purchaser acquires control of the Company and if certain
conditions are satisfied, it is the Purchaser's intention to seek the merger
(the "Merger") of the Company with a corporation wholly owned by the Purchaser
in a transaction in which each then issued and outstanding Share (other than
Shares owned by the Purchaser or Shares with respect to which dissenter's
rights are properly exercised under Delaware law) is converted into the right
to receive $5.30. In the event the Purchaser acquires 90% or more of the
Shares in the Offer, the Purchaser intends to effect the Merger as a "short
form" merger under Delaware law. The Merger would be proposed as soon as
practicable but within twelve months after completion of the Offer if all
conditions have been met. See Section 10.
According to information supplied by the Company, as of August 25, 1995,
there were 2,471,179 Shares currently issued and outstanding, and outstanding
and exercisable employee and director options to purchase an aggregate of
149,250 Shares. Therefore, at August 25, 1995, the aggregate number of Shares
of the Company on a fully diluted basis was 2,620,429 Shares. The Purchaser
seeks to acquire not less than 1,336,419 (51%) and up to 100% of such Shares.
The Purchaser beneficially owns 22,000 Shares which it acquired through open
market purchases. See Section 11.
Shareholders are urged to read carefully this Offer to Purchase and the
Letter of Transmittal before making any decision with respect to the Offer.
Stephan W. Cole, President and a Director of the Company, Richard F. Bern,
Executive Vice President and a Director of the Company and Jeffrey A. Cole, a
Director of the Company and Stephan W. Cole's brother, beneficially own in the
aggregate 1,325,796 Shares (51.04% of currently issued and outstanding
Shares). See Section 12 regarding certain contracts, agreements or
arrangements entered into by the Purchaser and/or the Company and affiliates
of the Company including the foregoing persons.
The Offer is open to all Shareholders.
1
<PAGE>
This Offer to Purchase and the related Letter of Transmittal are being
mailed at the expense of the Purchaser to record holders of Shares and will be
furnished to brokers, banks and similar persons whose names, or the names of
whose nominees, appear on the Shareholder list, or, if applicable, who are
listed as participants in a clearing agency's security position listing for
subsequent transmittal to beneficial owners of Shares.
The Shares are listed for trading on the NASDAQ/NMS ("NASDAQ") under the
symbol "ACPI". On August 23, 1995, the last trading day on which a reported
sale of the Shares occurred before the Purchaser announced its intention to
commence the Offer, the closing sales price per Share as reported on
NASDAQ/NMS was $3.75. Shareholders are urged to obtain a current market price
for the Shares.
1. TERMS OF THE OFFER.
Upon the terms and subject to the conditions set forth herein and in the
Letter of Transmittal, the Purchaser will accept for payment and pay for
Shares which are validly tendered prior to the Expiration Date and not
theretofore withdrawn as permitted by Section 4 of this Offer to Purchase. The
term "Expiration Date" means 12:00 Midnight, New York City time, on Thursday,
September 28, 1995, unless and until the Purchaser shall have extended the
period of time for which the Offer is open, in which event the term
"Expiration Date" shall mean the latest time and date at which the Offer, as
so extended by the Purchaser, shall expire. Subject to applicable rules and
regulations of the Securities and Exchange Commission (the "Commission"), the
Purchaser expressly reserves the right, in its sole discretion, at any time or
from time to time, to extend the period of time during which the Offer is open
by giving oral or written notice of such extension to the Depositary and
making a public announcement thereof no later than 9:00 A.M., New York City
time, on the next business day after the previously scheduled Expiration Date.
During any such extension, all Shares previously tendered and not accepted for
payment or withdrawn will remain subject to the Offer and may be accepted for
payment by the Purchaser, except to the extent the Shares may be withdrawn as
set forth in Section 4 of this Offer to Purchase. There can be no assurance
that the Purchaser will exercise its right to extend the Offer. The Purchaser
also reserves the right, in its sole discretion, at any time or from time to
time, to decrease the number of Shares it is seeking under this Offer. If the
Purchaser decides, in its sole discretion, to decrease the number of shares
being sought or to increase or decrease the consideration offered in the Offer
to Shareholders and, at the time notice of such change is first published,
sent or given to Shareholders in the manner specified below, the Offer is
scheduled to expire at any time earlier than the expiration of a period ending
on the tenth business day from, and including, the date that such notice is
first so published, sent or given, then the Offer will be extended until the
expiration of such period of ten business days. For purposes of the Offer, a
"business day" has the meaning set forth in Rule 14d-1 under the Securities
Exchange Act of 1934, as amended (the "Exchange Act").
The Purchaser also expressly reserves the right (i) to terminate the Offer
and not accept for payment any Shares not theretofore accepted for payment or
paid for, or to delay the acceptance for payment of, or payment for, any
Shares not theretofore accepted for payment or paid for, upon the occurrence
of any of the conditions specified in Section 8, by giving oral or written
notice of the termination or delay to the Depositary, and (ii) at any time, or
from time to time, to amend the Offer in any respect. Any extension, delay in
payment, termination or amendment will be followed as promptly as practicable
by public announcement thereof, such announcement in the case of an extension
to be issued no later than 9:00 A.M., New York City time, on the next business
day after the previously scheduled Expiration Date. Without limiting the
manner in which the Purchaser may choose to make any public announcement,
except as provided by applicable law (including Rule 14d-4(c) under the
Exchange Act), the Purchaser will have no obligation to publish, advertise or
otherwise communicate any such public announcement, other than by issuing a
press release to a news service. The Purchaser may also be required by
applicable law to disseminate to Shareholders certain information concerning
the extension of the Offer and any material changes in the terms of the Offer.
If the Purchaser makes a material change in the terms of the Offer or the
information concerning the Offer, or if it waives a material condition of the
Offer, the Purchaser will disclose such changes to the extent required by
Rules 14d-4(c), 14d-6(d), and 14e-1 under the Exchange Act, which indicate
that the minimum period during which an offer must remain open (to allow for
adequate dissemination to Shareholders and investor response)
2
<PAGE>
following material changes in the terms of the Offer or information concerning
the Offer (other than a change in price of securities sought, which is
discussed above), will depend upon the facts and circumstances, including the
relative materiality of the terms of information. The ability of the Purchaser
to delay payment for Shares which it has accepted for payment is limited by
Rule 14e-1(c) under the Exchange Act, which requires that a tender offeror pay
the consideration offered or return the tendered securities promptly after the
termination or withdrawal of a tender offer.
If Shares are validly tendered prior to the Expiration Date and not properly
withdrawn pursuant to this Offer (the "Tendered Shares") representing more
than an amount which, together with any Shares beneficially owned by the
Purchaser, exceeds the Percentage Amount, the Purchaser, upon the terms and
subject to the conditions of the Offer, intends to accept for payment all
Tendered Shares up to one hundred percent (100%) of the total number of
outstanding Shares not owned by the Purchaser.
2. ACCEPTANCE FOR PAYMENT AND PAYMENT.
Upon the terms and subject to the conditions of the Offer (including, if the
Offer is extended or amended, the terms and conditions of any such extension
or amendment), the Purchaser will purchase by accepting for payment and will
pay for Shares, as promptly as practicable after the Expiration Date. In all
cases, payment for Shares purchased pursuant to the Offer will be made only
after timely receipt by the Depositary of (i) certificates for such Shares, or
timely confirmation (a "Book-Entry Confirmation") of a book-entry transfer of
such Shares into the Depositary's account maintained at The Depository Trust
Company, the Midwest Securities Trust Company or the Philadelphia Depository
Trust Company (each a "Book-Entry Transfer Facility" and collectively, "Book-
Entry Transfer Facilities") pursuant to the procedure set forth in Section 3,
(ii) a properly completed and duly executed Letter of Transmittal or facsimile
thereof, or an Agent's Message (as defined below), and (iii) any other
documents required by the Letter of Transmittal.
For purposes of the Offer, the Purchaser shall be deemed to have accepted
for payment (and thereby purchased) Tendered Shares when, as and if the
Purchaser gives oral or written notice to the Depositary of its acceptance of
such Shares for payment pursuant to the Offer. Payment for Shares purchased
pursuant to the Offer will in all cases be made by deposit of the purchase
price with the Depositary, which will act as agent for the tendering
Shareholders for the purpose of receiving payment from the Purchaser and
transmitting payments to tendering Shareholders.
Payment for Shares accepted for payment pursuant to the Offer may be delayed
in the event of difficulty of determining the number of Shares validly
tendered and not withdrawn. Under no circumstances will interest be paid by
the Purchaser by reason of any delay in making such payment. Furthermore, if
certain conditions occur, the Purchaser may not be obligated to accept for
payment or pay for Shares pursuant to the Offer. See Section 8.
If, for any reason whatsoever, acceptance for payment or payment for any
Shares tendered pursuant to the Offer is delayed or the Purchaser is unable to
accept for payment or pay for tendered Shares, then, without prejudice to the
Purchaser's rights under the Offer, the Depositary may, subject to applicable
law, retain Tendered Shares on behalf of the Purchaser and such Shares may not
be withdrawn except to the extent tendering Shareholders are entitled to
withdrawal rights as described in Section 4.
If any Tendered Shares are not purchased for any reason, or if certificates
submitted represent more Shares than are tendered, certificates for such
Shares not purchased or tendered will be returned, without expense to the
tendering Shareholder (or, in the case of Shares tendered by book-entry
transfer within a Book-Entry Transfer Facility pursuant to the procedures set
forth in Section 3, such Shares will be credited to an account maintained at
the Book-Entry Transfer Facility), as promptly as practicable after the
expiration or termination of the Offer.
If, prior to the Expiration Date, the Purchaser increases the consideration
offered to holders pursuant to the Offer, the Purchaser will pay to all
Shareholders whose Shares are purchased pursuant to the Offer the highest
consideration paid to any Shareholder whose Shares are purchased pursuant to
the Offer.
3
<PAGE>
Tendering Shareholders will not be required to pay brokerage commissions,
fees, or, except under the circumstances described in Instruction 5 of the
Letter of Transmittal, transfer taxes, if any, payable on the transfer to the
Purchaser of Shares purchased pursuant to the Offer.
Any tendering Shareholder who fails to complete and sign the substitute Form
W-9 included in the Letter of Transmittal may be subject to required federal
income tax backup withholding of 31% of the gross proceeds paid to such
Shareholder or any other payee pursuant to the Offer. See Section 3.
3. PROCEDURES FOR TENDERING SHARES.
Valid Tender. For Shares to be validly tendered pursuant to the Offer, a
properly completed and duly executed Letter of Transmittal (or facsimile
thereof), with required signature guarantees or an Agent's Message, and any
other documents required by the Letter of Transmittal, must be received by the
Depositary prior to the Expiration Date at its address indicated on the back
cover of this Offer to Purchase, and either the certificates for such Shares
must be received by the Depositary along with the Letter of Transmittal, or
such Shares must be tendered pursuant to the procedure for book-entry transfer
described below and a Book-Entry Confirmation must be received by the
Depositary, in each case prior to the Expiration Date. Shareholders who are
unable to comply with the foregoing procedures prior to the Expiration Date
may tender Shares pursuant to the guaranteed delivery procedure described
below.
In order for a tendering Shareholder to participate in the Offer, Shares
must be validly tendered prior to the Expiration Date, which is currently
12:00 Midnight, New York City time, on Thursday, September 28, 1995.
The method of delivery of all documents, including certificates for Shares,
is at the election and risk of the tendering Shareholder. If delivery is by
mail, registered mail with return receipt requested, properly insured, is
recommended and sufficient time should be allowed to ensure timely delivery to
the Depositary.
Book-Entry Transfer. The Depositary will establish an account with respect
to the Shares at each of the Book-Entry Transfer Facilities for purposes of
the Offer within two (2) business days after the date of this Offer to
Purchase and any financial institution that is a participant in the Book-Entry
Transfer Facilities system may make book-entry delivery of Shares by causing a
Book-Entry Transfer Facility to transfer such Shares into the Depositary's
account at a Book-Entry Transfer Facility in accordance with the Book-Entry
Transfer Facility's procedures for such transfer. Although delivery of Shares
may be effected through book-entry at a Book-Entry Transfer Facility, the
Letter of Transmittal (or facsimile thereof), with required signature
guarantees and any other required documents, must, in any case, be transmitted
to and received by the Depositary at its address set forth on the back cover
of this Offer to Purchase prior to the Expiration Date, or the guaranteed
delivery procedures described below must be complied with. Delivery of
documents to a Book-Entry Transfer Facility in accordance with the Book-Entry
Transfer Facility's procedures does not constitute delivery to the Depositary.
The term "Agent's Message" means a message, transmitted by a Book-Entry
Transfer Facility to, and received by, the Depositary and forming a part of a
Book-Entry Confirmation, which states that such Book-Entry Transfer Facility
has received an express acknowledgement from the participant in such Book-
Entry Transfer Facility tendering the Shares that are the subject of such
Book-Entry Confirmation that such participant has received and agrees to be
bound by the terms of the Letter of Transmittal and that the Purchaser may
enforce such agreement against such participant.
Signature Guarantees. Except as otherwise provided below, all signatures on
this Letter of Transmittal must be guaranteed by an eligible institution in a
recognized Medallion Guarantee Program (an "Eligible Institution"). An
Eligible Institution means a firm or any other entity identified in Rule 17Ad-
15 under the Securities Exchange Act of 1934, as amended, including (as such
terms are defined therein), (i) a bank; (ii) a broker, dealer, municipal
securities dealer; municipal securities broker, government securities dealer
or government securities broker; (iii) a credit union; (iv) a national
securities exchange, registered securities association or clearing agency; or
(v) a savings association. A verification by a notary public is not
acceptable. Signatures on this Letter of Transmittal need not be guaranteed if
this Letter of Transmittal is signed by the registered holder(s) of the Share
Certificates submitted herewith and such holder(s) have not completed the
instruction entitled "Special Payment and Delivery Instructions" on this
Letter of Transmittal. See Instruction 7.
4
<PAGE>
Guaranteed Delivery. If a Shareholder desires to tender Shares pursuant to
the Offer and the Shareholder's certificates for Shares are not immediately
available or time will not permit all required documents to reach the
Depositary prior to the Expiration Date, or the procedure for book-entry
transfer cannot be completed on a timely basis, the Shares may nevertheless be
tendered if all of the following conditions are met:
(a) the tender is made by or through an Eligible Institution;
(b) A Notice of Guaranteed Delivery, substantially in the form provided
by the Purchaser to the Information Agent, is obtained from the Information
Agent or a broker, dealer, bank or trust company, properly completed and
duly executed and delivered to the Depositary as provided below before the
Expiration Date; and
(c) the certificates for all Shares tendered, in proper from for transfer
(or a Book-Entry Confirmation), together with a properly completed and duly
executed Letter of Transmittal (or facsimile thereof) and any other
documents required by the Letter of Transmittal, are received by the
Depositary within three NASDAQ/NMS trading days after the date of execution
of such Notice of Guaranteed Delivery.
The Notice of Guaranteed Delivery may be delivered by hand or transmitted by
telegram, telex, facsimile transmission or mailed to the Depositary.
In all cases, payment for Shares purchased pursuant to the Offer will be
made only after timely receipt by the Depositary of certificates for such
Shares (or a Book-Entry Confirmation), a properly completed and duly executed
Letter of Transmittal (or facsimile thereof) or an Agent's Message and any
other documents required by the Letter of Transmittal.
Other Requirements. By executing a Letter of Transmittal as set forth above,
a tendering Shareholder irrevocably appoints the Purchaser or its designees as
the Shareholder's proxy, in the manner set forth in the Letter of Transmittal,
each with full power of substitution, to the full extent of such Shareholder's
rights with respect to the Shares tendered by such Shareholder and accepted
for payment by the Purchaser (and any and all other Shares or other securities
issued or issuable with respect to such Shares on or after August 25, 1995).
Such appointment will be effective when and only to the extent that, the
Purchaser accepts the Shares for payment. Upon acceptance for payment, all
prior proxies given by a Shareholder with respect to the Shares will, without
further action, be revoked, and no subsequent proxies may be given (and if
given will not be effective). The Purchaser or the designees of the Purchaser
will, with respect to such Shares, be empowered to exercise all voting and
other rights of a Shareholder as they, in their sole discretion, may deem
proper at any meeting of the Company's Shareholders, by written consent, or
otherwise. The Purchaser reserves the right to require that, in order for
Shares to be deemed validly tendered, immediately upon the Purchaser's
acceptance for payment of such Shares, the Purchaser must be able to exercise
full voting rights with respect to such Shares, including voting at any
meeting of Shareholders then scheduled.
Backup Federal Income Tax Withholding. Under the federal income tax backup
withholding rules, unless an exception applies under the applicable law and
regulations, the Depositary may be required to withhold and to remit to the
United States Treasury, thirty-one percent (31%) of the gross proceeds paid to
a Shareholder or other payee pursuant to the Offer, unless the Shareholder or
other payee provides his taxpayer identification number (employer
identification number or social security number) and certifies that such
number is correct. Therefore, unless such an exception exists and is proved in
a manner satisfactory to the Depositary, each tendering Shareholder must
complete and sign the Substitute Form W-9 included as part of the Letter of
Transmittal, to provide the information and certification necessary to avoid
backup withholding. Certain Shareholders (including, without limitation, all
corporations and certain foreign individuals) are not subject to these backup
withholding and reporting requirements. In order for a foreign individual to
qualify as an exempt recipient, that Shareholder must submit a statement,
signed under penalties of perjury, attesting to that individual's exempt
status. This statement can be obtained from the Depositary. See Instruction 9
and the information under the caption "Important Tax Information" in the
Letter of Transmittal.
5
<PAGE>
Determination of Validity; Rejection of Shares; Waiver of Defects; No
Obligations to Give Notice of Defects. All questions as to the validity, form,
eligibility (including time of receipt) and acceptance for payment of any
Tendered Shares pursuant to any of the procedures described above will be
determined in the sole discretion of the Purchaser, whose determination will
be final and binding. The Purchaser reserves the absolute right to reject any
or all tenders of Shares if such tenders are determined by it not to be in
proper form or if the acceptance of or payment of such Shares may, in the
opinion of the Purchaser, be unlawful. The Purchaser also reserves the
absolute right to waive any of the conditions of the Offer or any defect or
irregularity in any tender with respect to Shares of any particular
Shareholder, and the Purchaser's interpretation of the terms and conditions of
the Offer (including the Letter of Transmittal and the Instructions thereto)
will be final and binding. No tender of Shares will be deemed to have been
validly made until all defects and irregularities relating thereto have been
cured or waived. None of the Purchaser, the Company, the Depositary, the
Information Agent or any other person will be under any duty to give
notification of any defects or irregularities in tenders or incur any
liability for failure to give any such notification.
4. WITHDRAWAL RIGHTS.
Except as otherwise provided in this Section 4, tenders of Shares made
pursuant to the Offer are irrevocable. Shares tendered pursuant to the Offer
may be withdrawn at any time prior to the Expiration Date and, unless such
Shares are accepted for payment as provided herein, may also be withdrawn at
any time after October 29, 1995.
For a withdrawal to be effective, a written, telegraphic, telex or facsimile
transmission notice of withdrawal must be timely received by the Depositary at
its address set forth on the back cover of this Offer to Purchase. Any such
notice of withdrawal must specify the name of the person who tendered the
Shares to be withdrawn, the number of Shares to be withdrawn, and the name(s)
in which the certificates representing the Shares are registered, if different
from that of the person tendering the Shares. If certificates for Shares have
been delivered or otherwise identified to the Depositary, then, prior to the
release of such certificates, the serial numbers of the particular
certificates evidencing the shares to be withdrawn must be submitted to the
Depositary and the signature on the notice of withdrawal must be guaranteed by
an Eligible Institution, unless the Shares have been tendered for the account
of an Eligible Institution. If Shares have been tendered pursuant to the
procedures for book-entry transfer as set forth in Section 3, any notice of
withdrawal must identify and specify the name and number of the account at the
appropriate Book-Entry Transfer Facility to be credited with the withdrawn
Shares.
All questions as to the form and validity (including time of receipt) of
notices of withdrawal will be determined by the Purchaser, in its sole
discretion, which determination will be final and binding. None of the
Purchaser, the Company, the Depositary, the Information Agent or any other
person will be under any duty to give notification of any defects or
irregularities in any notice of withdrawal or incur any liability for failure
to give any such notification.
Any Shares properly withdrawn will be deemed not to have been validly
tendered for purposes of the Offer. Withdrawn Shares may be retendered,
however, at any time before the Expiration Date by again following the
procedure set forth in Section 3.
5. CERTAIN FEDERAL INCOME TAX CONSEQUENCES.
The Federal income tax discussion set forth below is included herein for
general information only, and does not purport to consider all aspects of
Federal income taxation that may be relevant to a particular Shareholder. The
summary is based on the provisions of the Internal Revenue Code of 1986, as
amended (the "Code"), the Treasury regulations promulgated thereunder, and
administrative and judicial interpretations thereof, all as in effect as of
the date hereof. Such laws and interpretations may differ on the date of
consummation of the Offer or at the Expiration Date, and relevant facts may
differ. Certain Shareholders (including insurance companies, tax-exempt
organizations, foreign persons, and persons who acquired their Shares upon the
exercise of employee stock options or otherwise as compensation) may be
subject to special rules not discussed below. The discussion
6
<PAGE>
does not consider the effect of any applicable foreign, state, local or other
tax laws. The tax treatment of each Shareholder will depend in part on his
particular situation. Each Shareholder is urged to consult his tax advisor
concerning the particular tax consequences of the Offer to such Shareholder,
including the application of state, local, foreign and other tax laws.
The sale of Shares of Shareholders pursuant to the Offer will be a taxable
transaction for Federal income tax purposes and may also be a taxable
transaction for state, local, foreign and other tax law purposes. In general,
a tendering Shareholder will recognize gain or loss equal to the difference
between the cash received by the Shareholder pursuant to the Offer and the
Shareholder's tax basis in the Shares sold. This gain or loss will be capital
gain or loss, if the Shares sold were held as capital assets, and will be
long-term capital gain or loss, if the Shares sold were held as capital assets
for more than twelve months, as of the date of the sale.
6. EFFECT OF THE OFFER ON THE MARKET FOR THE SHARES, NASDAQ/NMS QUOTATION,
EXCHANGE ACT REGISTRATION AND MARGIN REGULATIONS.
The purchase of Shares pursuant to the Offer will reduce the number of
holders of Shares and the number of Shares that might otherwise trade publicly
and could adversely affect the liquidity and market value of the remaining
Shares, if any, held by the public.
The Shares are currently traded on NASDAQ/NMS, which constitutes the
principal trading market for the Shares. Depending upon the number of Shares
purchased pursuant to the Offer, the Shares may no longer meet the standards
for continued inclusion in NASDAQ/NMS, which require that an issuer have at
least 200,000 publicly held shares, held by at least 400 shareholders or 300
shareholders of round lots, with a market value of $1,000,000, and have net
tangible assets of least either $2,000,000 or $4,000,000, depending on
profitability levels during the issuer's four most recent fiscal years. If
these standards are not met, the Shares might nevertheless continue to be
included in the National Association of Securities Dealers Automated Quotation
System ("NASDAQ") with quotations published in the NASDAQ "additional list" or
in one of the "local lists," but if the number of holders of the Shares were
to fall below 300, or if the number of publicly held Shares were to fall below
100,000 or there were not at least two registered and active market makers for
the Shares, the rules of the National Association of Securities Dealers, Inc.
("NASD") provide that the Shares would no longer be "qualified" for NASDAQ
reporting and NASDAQ would cease to provide any quotations. Shares held
directly or indirectly by directors, officers or beneficial owners of more
than 10% of the Shares are not considered as being publicly held for this
purpose. According to information provided by the Company, as of August 25,
1995 there were approximately 105 holders of record of Shares and 2,620,429
Shares were outstanding on a fully diluted basis. If, as a result of the
purchase of Shares pursuant to the Offer, the Shares no longer meet the
requirements of the NASD for continued inclusion in NASDAQ/NMS or NASDAQ, as
the case may be, the market for Shares could be adversely affected.
In the event that the Shares no longer meet the requirements of the NASD for
quotation through NASDAQ, it is possible that the Shares would continue to
trade in the over-the-counter market and that price quotations would be
reported by other sources. The extent of the public market for the Shares and
the availability of such quotations would, however, depend upon the number of
holders of Shares remaining at such time, the interests in maintaining a
market in Shares on the part of securities firms, the possible termination of
registration of the Shares under the Exchange Act, as described below, and
other factors.
The Shares are currently registered under the Exchange Act. Registration of
the Shares under the Exchange Act may be terminated upon application of the
Company to the Commission if the Shares are neither listed on a national
securities exchange nor held by 300 or more holders of record. Termination of
registration of the Shares under the Exchange Act would substantially reduce
the information required to be furnished by the Company to its stockholders
and the Commission and would make certain provisions of the Exchange Act no
longer applicable to the Company, such as the short-swing profit recovery
provisions of Section 16(b) of the Exchange Act, the requirement of furnishing
a proxy statement pursuant to Section 14(a) of the Exchange Act in connection
with stockholders' meetings and the related requirement of furnishing an
annual report to stockholders and the requirements of Rule 13e-3 under the
Exchange Act with respect to "going private" transactions. Furthermore,
7
<PAGE>
the ability of "affiliates" of the Company and persons holding "restricted
securities" of the Company to dispose of such securities pursuant to Rule 144
or 144A promulgated under the Securities Act of 1993, as amended (the
"Securities Act"), may be impaired or eliminated.
The Shares are currently "margin securities" under the regulations of the
Board of Governors of the Federal Reserve System (the "Federal Reserve
Board"), which has the effect, among other things, of allowing brokers to
extend credit on the collateral of the Shares. Depending upon factors similar
to those described above regarding listing and market quotations, it is
possible that, following the Offer, the Shares would no longer constitute
"margin securities" for the purposes of the margin regulations of the Federal
Reserve Board and therefore could no longer be used as collateral for loans
made by brokers. If registration of Shares under the Exchange Act were
terminated, the Shares would no longer be "margin securities" or be eligible
for NASDAQ reporting.
7. SOURCE OF FUNDS.
If the Purchaser purchases all of the Shares pursuant to the Offer at $5.30
per Share, the aggregate cost to the Purchaser (including fees and expenses
relating to the Offer) is expected to be approximately $13,772,000. All of the
funds required by the Purchaser to purchase Shares will be available from its
general corporate funds.
8. CERTAIN CONDITIONS OF THE OFFER.
Notwithstanding any other provision of the Offer, the Purchaser shall not be
required to accept for payment, or to pay for, any Shares tendered, and may
terminate or amend the Offer, and may delay the acceptance for payment of, or
payment for, Shares pursuant to the Offer if, at any time before the
acceptance for payment of any such Shares of the payment therefor (whether or
not any Shares have theretofore been accepted for payment or paid for pursuant
to the Offer):
(a) the applicable waiting period under the HSR Act (as defined below) shall
not have expired or been terminated; or
(b) there shall not have been validly tendered and not withdrawn pursuant to
the Offer, Shares sufficient to satisfy the Percentage Amount; or
(c) there shall have occurred (i) any general suspension of, or general
limitation on prices for, or trading in, securities on any national securities
exchange or in the over-the-counter markets, (ii) a declaration of a banking
moratorium or any suspension of payments in respect of banks in the United
States or any limitation (whether or not mandatory) by any governmental agency
or authority on, or any other event that adversely affects, the extension of
credit by banks or other financial institutions, (iii) a material change in
United States or any other currency exchange rates or a suspension of or
limitation on the markets therefore, (iv) the commencement of a war, armed
hostilities or other similar international calamity directly or indirectly
involving the United States, or (v) in the case of any of the foregoing
existing at the time of the commencement of the Offer, a material acceleration
or worsening thereof; or
(d) any change (or development involving a prospective change) shall have
occurred or been threatened in the business, properties, assets, liabilities,
financial condition, operations, results of operations or prospects of the
Company that, in the sole judgment of the Purchaser, does or may have a
materially adverse effect on the Company, or the Purchaser shall have become
aware of any fact that, in its sole judgment of the Purchaser, does or may
have a material adverse affect on the value of the Shares, or the Purchaser
determines, in its sole discretion, that it is not in the Purchaser's best
interests to acquire the Shares subject to the Offer; or
(e) there shall have been threatened or instituted or there shall be pending
any action, proceeding, hearing or investigation by or before any court,
government or governmental agency or other regulatory or administrative
authority, domestic or foreign, or any such court, agency or authority shall
have indicated that it may institute any such action, proceeding, hearing or
investigation, that, in the sole judgment of the Purchaser, (i) challenges the
acquisition of Shares pursuant to the Offer or indicates that any approval or
other action of any such court,
8
<PAGE>
agency or authority may be required in connection with the Offer or the
purchase of Shares thereunder, or otherwise relates in any manner to the offer
or the contemplated benefits to the Purchaser thereof, (ii) otherwise could
materially adversely affect the business, properties, assets, liabilities,
financial condition, operations, results of operations or prospects of the
Company, (iii) imposes material limitations on the abilities of the Purchaser
effectively to acquire or hold or to exercise full rights of ownership of the
Shares acquired by it, including, but not limited to, the right to vote the
Shares purchased by it on all matters properly presented to the Shareholders
of the Company, (iv) effects certain legal matters as discussed in Section 14,
or (v) in the case of any of the foregoing existing at the time of the
commencement of the Offer, any development shall have occurred that is
adverse; or
(f) any action shall have been taken or any statute, rule, regulation,
judgment, decree, injunction or other (preliminary, permanent or otherwise)
shall have been proposed, sought, enacted, entered, promulgated, enforced or
deemed to be applicable to the Offer or the Company or the Purchaser or any
affiliate thereof by any court, government or governmental agency or other
regulatory or administrative authority, domestic or foreign which, in the sole
judgment of the Purchaser, (i) indicates that any approval or other action of
any such court, agency or authority may be required in connection with the
Offer or the purchase of Shares thereunder, or would or might prohibit,
restrict or delay consummation of the Offer or materially impair the
contemplated benefits to the Purchaser thereof, including the exercise of
voting or other Shareholder rights with respect to the Shares purchased
pursuant to the Offer or the receipt of any distribution of other benefits of
ownership of the purchased Shares to which owners of Shares are entitled
generally, or (ii) otherwise could materially adversely affect the business,
properties, assets, Share ownership, liabilities, financial condition,
operations, results of operations or prospects of the Purchaser or the Company
or any of their affiliates.
All the foregoing conditions are for the sole benefit of the Purchaser and
may be asserted by the Purchaser regardless of the circumstances giving rise
to such conditions (including any action or inaction by the Company or the
Purchaser) or may be waived by the Purchaser in whole or in part at any time
and from time to time in its sole discretion. The failure by the Purchaser at
any time to exercise any of the foregoing rights shall not be deemed a waiver
of any such right and each such right shall be deemed an ongoing right which
may be asserted at any time and from time to time. Any determination by the
Purchaser concerning the events described herein will be final and binding.
9. PRICE RANGE OF SHARES; DISTRIBUTIONS.
The Shares are traded on NASDAQ/NMS. The following table sets forth for the
periods indicated the high and low closing sales prices per Share, as reported
on NASDAQ/NMS. No cash distributions were paid during such periods.
<TABLE>
<CAPTION>
CALENDAR YEAR HIGH LOW
- ------------- ----- -----
<S> <C> <C>
1993(1)
Third Quarter.................................................... $5.25 $3.00
Fourth Quarter................................................... $4.00 $2.38
1994(1)
First Quarter.................................................... $5.00 $3.00
Second Quarter................................................... $4.25 $2.77
Third Quarter.................................................... $4.00 $2.00
Fourth Quarter................................................... $3.50 $2.25
1995(2)
First Quarter.................................................... $3.50 $2.00
Second Quarter................................................... $3.25 $2.25
</TABLE>
- --------
(1) These sales prices were disclosed in the Company's Annual Report on Form
10-K from the fiscal year ended December 31, 1994.
(2) These sales prices were derived from price quotes provided by the Dow
Jones News Service, Inc.
9
<PAGE>
On August 23, 1995, the last trading day on which a reported sale of the
Shares occurred prior to the public announcement and commencement of the
Offer, the reported closing price of the Shares on NASDAQ/NMS was $3.75 per
Share on trading volume of 200 Shares. SHAREHOLDERS ARE URGED TO OBTAIN A
CURRENT MARKET PRICE FOR THE SHARES.
10. PURPOSE OF THE OFFER; PLANS FOR THE COMPANY.
The Purchaser is making the Offer to acquire control of the Company through
the ownership of at least the Percentage Amount. The Purchaser's goal is to
acquire at least the Percentage Amount.
If Shares are validly tendered prior to the Expiration Date and not properly
withdrawn pursuant to this Offer (the "Tendered Shares") representing more
than an amount which, together with any Shares beneficially owned by the
Purchaser, exceeds fifty-one percent (51%) of the total number of outstanding
Shares (the "Percentage Amount"), the Purchaser, upon the terms and subject to
the conditions of the Offer, intends to accept for payment all Tendered
Shares.
The Purchaser believes that by controlling the Company, the Purchaser can
use its product line and expertise in technology to improve the long-term
profitability of the Company for the benefit of the Company and its
Shareholders. To do this, the Purchaser plans to effect certain changes at the
Company to reach this increased profitability objective, including expanding
the product offerings of the Company to embrace the Purchaser's product lines,
expanding the Purchaser's product development to include projects key to the
Company's future, and consolidating certain operations of the Company.
The Purchaser intends for the Offer to provide Shareholders with liquidity
for the investment, so that those who may wish to sell a significant portion
of their Shares at this time may do so at a price in excess of the market
price prior to announcement of the Offer and without the usual transaction
costs associated with market sales.
If the Company's Board of Directors recommends to the Company's shareholders
acceptance of this Offer and thereafter the Purchaser acquires at least the
Percentage Amount through consummation of the Offer, then it is the
Purchaser's intent to seek a merger (the "Merger") between a wholly-owned
subsidiary of the Purchaser and the Company for cash in the amount of $5.30
per Share upon a vote of the shareholders of the Company as soon as
practicable but within one year after completion of this Offer, subject to all
of the following conditions being satisfied: (i) all members of the Company's
Board of Directors who were not nominated or designated by the Purchaser shall
have voted to recommend to the Company's shareholders approval of the Merger,
(ii) there shall have been no material change in the Company's capital
structure as it existed on June 30, 1995 without the Purchaser's prior written
consent, including, without limitation any increase above 2,620,000 Shares
outstanding on a fully-diluted basis, (iii) there shall have been no material
adverse change in the Company's financial condition, results of operations,
business prospects, liabilities (including contingent liabilities associated
with litigation and claims) or management from that existing on June 30, 1995
or disclosed to the Purchaser prior to commencement of this Offer except to
the extent that any such change has been approved or ratified expressly by the
Purchaser in writing, and (iv) the Company shall not have entered into,
terminated or amended any material contract without the express prior written
approval of the Purchaser.
Should the Purchaser's ownership of the Shares reach or exceed 90% of the
outstanding Shares upon completion of the Offer, the Purchaser's intention
would be to conduct the Merger as a "short form" merger for cash. If such a
merger occurred within twelve months after completion of this Offer, the
Purchaser's intent would be to pay $5.30 per Share in cash as the sole merger
consideration.
After expiration or termination of the Offer, if 100% of the Shares are not
tendered and if the Merger has not been consummated, the Purchaser may attempt
to acquire additional Shares. Any such acquisition may be made through open-
market or private purchases, through one or more future tender offers or by
any other means deemed advisable. Any such acquisition may be at a price
higher or lower than the price to be paid for Shares purchased pursuant to the
Offer.
10
<PAGE>
If the Purchaser is successful in acquiring control of the Company, the
Purchaser intends to seek to have its representatives or nominees elected or
designated to fill a majority of the seats on the Company's Board of
Directors, but the Purchaser has no plans to make any changes in the executive
officers of the Company in the foreseeable future.
The Commission has adopted Rule 13e-3 under the Exchange Act which is
applicable to certain "going private" transactions and which may under certain
circumstances be applicable to any merger or another business combination
following the purchase of Shares pursuant to the Offer or otherwise in which
the Purchaser seeks to acquire the remaining Shares not held by it. The
Purchaser believes, however, that Rule 13e-3 will not be applicable if the
Merger is consummated within one year after the Expiration Date at the same
per Share price as paid in the Offer. If applicable, Rule 13e-3 requires,
among other things, that certain financial information concerning the Company
and certain information relating to the fairness of the proposed transaction
and the consideration offered to minority stockholders in such transaction, be
filed with the Commission and disclosed to stockholders prior to consummation
of the transaction.
The Purchaser has no plans or proposals which relate to or would result in
any material change in the Company's present capitalization or dividend policy
or that would result in a sale or transfer of a material amount of assets of
the Company. Moreover, except as disclosed in this Offer, the Purchaser has no
plans or proposals which relate to or would result in an extraordinary
corporate transaction, such as a merger, reorganization or liquidation,
involving the Company.
11. BACKGROUND OF THE OFFER; PAST CONTACTS, TRANSACTIONS OR NEGOTIATIONS WITH
THE COMPANY.
In late June 1995, Richard Smyth, Chairman of the Board of Directors and CEO
of the Purchaser, met with Stephen Cole and Richard Bern, the President and
Executive Vice President of the Company, respectively, to disclose the
Purchaser's interest in a transaction for a business combination or other
joining of the businesses of the Purchaser and the Company. Several days
later, a brief follow-up meeting among Messrs. Smyth, Cole and Bern occurred
to discuss various possible structures and approaches to joining the
businesses of the Purchaser and the Company. On July 10, 1995, a follow-up
meeting of Mr. Smyth and Arnold Johns, President of the Purchaser, with
Messrs. Cole and Bern, occurred to further discuss potential methods for
joining the businesses of the Purchaser and the Company. During this meeting,
these managers explored merger and tender offer approaches and discussed joint
distribution opportunities. On August 2, 1995, the Company and the Purchaser
entered into a Confidentiality Agreement pursuant to which the Purchaser
agreed to keep certain information furnished to it by the Company confidential
and to abide by certain "standstill" provisions. (Subsequently, on August 29,
1995, the Company waived certain provisions of the Confidentiality Agreement
in order to allow the Purchaser to undertake this Offer.) On August 7, 1995, a
meeting among Messrs. Smyth, Cole and Bern discussed the possibility of an
equity infusion by the Purchaser into the Company as well as further
exploration of joint distribution opportunities. During the next few days, the
Purchaser's representatives began conducting initial due diligence regarding
the Company and on August 9, 1995, Mr. Smyth was introduced to the Company's
Board of Directors, at which time he noted the possible synergies of the two
businesses and discussed the possible range of approaches to joining the two
businesses. On August 17, 1995, Mr. Smyth met with Mr. Cole and various staff
members of the Company. At these meetings, representatives of the Company
reviewed proposed employment agreements for Messrs. Cole and Bern, proposed
real estate purchase agreements for certain facilities used by the Company,
and a proposed escrow agreement. All of the foregoing proposed agreements were
drafted by the Purchaser and presented to the Company's representatives for
their consideration. At these meetings there was also a discussion of the
impact of the Hart-Scott-Rodino Antitrust Improvements Act of 1976 and a
review of certain accounting issues and the respective management information
systems of the Purchaser and the Company. Moreover, on this same date, Messrs.
Smyth and Cole met with a representative of an investment banking firm to
provide information for the investment banker's use should it be engaged to
provide a fairness opinion to the Company regarding a transaction with the
Purchaser.
On August 29, 1995, the Company and the Purchaser entered into an Escrow
Agreement whereby the Purchaser placed into an escrow account $500,000 that
will be transferred to the Company should this Offer fail to conclude solely
due to the failure of the Purchaser to successfully fund the purchase of stock
under this Offer.
11
<PAGE>
Since the Purchaser has ready funds on hand in an amount which should allow it
to complete this Offer, it believes the transfer of these funds to the Company
to be unlikely. Included in the consideration for this arrangement is a "no-
shop" agreement of the Company. This provision calls for the Company to cease
active marketing of the Company to other parties for a period of 45 days. The
Escrow Agreement also provides for the payment to the Company from the
escrowed funds of up to $200,000 of fees and expenses of the Company's outside
counsel, independent certified public accountants and outside consultants
should this Offer not be consummated for any reason other than (i) less than
the Percentage Amount being tendered or (ii) the Purchaser determining not to
proceed with this Offer due to a written statement or disclosure of the
Company containing an untrue statement of a material fact which may have an
adverse effect on the Company.
On August 29, 1995, the Company and the Purchaser entered into an
Indemnification Agreement whereby the Purchaser has agreed, upon successful
completion of this Offer, to use its best efforts to cause the Company to
indemnify, defend and hold harmless to the fullest extent permitted or
required by law, the present and former directors and officers of the Company
and its subsidiaries against all losses, expenses, claims, damages or
liabilities arising out of actions or omissions occurring on or prior to
successful completion of this Offer, including acts or omissions relating to
the transactions contemplated by this Offer. This agreement further provides
for a direct indemnity of the Company's officers and directors by the
Purchaser to the extent losses sustained by such officers and directors are
not paid by the Company or its insurers.
Upon successful completion of this Offer, Employment Agreements between the
Company and two key members of the Company's current management team, Stephan
W. Cole and Richard F. Bern, who are also significant shareholders of the
Company, will become effective. Each of these Employment Agreements provides
for an initial term of three years, annual minimum compensation of $270,000,
employment benefits (including life, disability and medical insurance, a $600
monthly vehicle allowance, and directors' and officers' liability insurance)
and the grant of stock options to purchase 100,000 shares of the Purchaser's
Common Stock at an exercise price of $5.58 per share pursuant to the
Purchaser's 1993 Incentive Stock Option Plan. Each of these Employment
Agreements also contains a covenant not to compete for a period of one year
following termination of the agreement.
Further, upon successful completion of this Offer, the Purchaser intends to
purchase two facilities currently leased by the Company from their respective
owners, 31100 Solon Road, Inc., a corporation owned by Stephan W. Cole,
Richard F. Bern and Stephan W. Cole as custodian for Joseph E. Cole II, the
son of Jeffrey A. Cole, under the Ohio Transfers to Minors Act ("31100 Solon
Road"), and CRS Limited Partnership ("CRS"). 31100 Solon Road is a limited
partner in CRS, having a 65% interest in the partnership's profits and losses.
The purchase price for the facility owned by 31100 Solon Road shall be the
lesser of $5,000,000 or the fair market value as determined by the average of
two independent appraisals; provided, however, that if the average of the two
appraisals is less than $4,750,000, the seller shall have the right not to
sell the facility to the Purchaser. The purchase price for the facility owned
by CRS shall be the fair market value as determined by the average of two
independent appraisals; provided, however, that the seller shall have the
right not to sell the facility to the Purchaser should the average of the two
appraisals be less than $1,700,000.
The Purchaser owns 22,000 Shares, all of which were acquired in open market
transactions, including approximately 4,500 Shares acquired in the past 60
days. These 4,500 Shares were acquired by the Purchaser in two open market
transactions on July 17 and July 18, 1995, at $3.25 and $3.50 per Share,
respectively.
12. CERTAIN INFORMATION CONCERNING THE COMPANY.
According to information filed with the Commission, the Company was
incorporated in November 1982 under the laws of the State of Ohio, and on July
26, 1993, changed its state of incorporation from Ohio to Delaware. It has its
principal executive offices at 31100 Solon Road, Solon, Ohio 44139. The
Company, with its subsidiaries, provides a wide range of products to consumers
through retail distribution worldwide.
12
<PAGE>
Additional Information. The Company is currently subject to the reporting
requirements of the Exchange Act and, in accordance therewith, is required to
file periodic reports, proxy statement and other information with the
Commission relating to its business, financial condition and other matters.
Information, as of particular dates, concerning the Company's operating
results, financial condition, directors and officers of the Company, their
remuneration, the principal holders of the Company's securities, and material
interest of such persons in transactions with the Company and other matters
are required to be disclosed in proxy statements and annual reports
distributed to the Company's Shareholders and filed with the Commission. Such
reports, proxy statements and other information may be inspected at the public
reference facilities maintained by the Commission at 450 Fifth Street, N.W.,
Washington, D.C. 20549 and should also be available for inspection and copying
at the regional offices of the Commission located in the Northwestern Atrium
Center, 500 West Madison Street (Suite 1400), Chicago, Illinois 60661, and
Seven World Trade Center, 13th Floor, New York, New York 10048. Copies of such
material may also be obtained by mail, upon payment of the Commission's
customary fees, from the Public Reference Section of the Commission at 450
Fifth Street, N.W., Washington, D.C. 20549. Such material may also be
available from the National Association of Securities Dealers, Inc., Reports
Section, 1735 K Street, N.W., Washington, D.C. 20006.
Selected Financial Information. The following selected financial information
relating to the Company and its subsidiaries has been taken or derived from
the Company's financial statements as set forth in the Company's Annual Report
on Form 10-K for the fiscal year ended December 31, 1994, and its Quarterly
Report on Form 10-Q for the quarter ended June 30, 1995, filed with the
Commission. Such selected financial information should be read in conjunction
with such financial statements and related notes and is qualified in its
entirety by reference to such financial statements and related notes. The
consolidated financial statements of the Company may be examined and copies
may be obtained at the same places and in the same manner as set forth above.
13
<PAGE>
ACPI
SELECTED FINANCIAL DATA
(AMOUNTS IN THOUSANDS EXCEPT PER SHARE DATA)
<TABLE>
<CAPTION>
6 MONTHS
ENDED JULY 1 YEAR ENDED DECEMBER 31
------------------ --------------------------------------------
1995 1994 1994 1993 1992 1991 1990
OPERATING DATA -------- -------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C> <C>
Net Sales.............. $ 51,402 $ 50,837 $106,748 $102,734 $ 99,189 $ 95,361 $ 92,911
Gross Profit........... 13,220 12,786 27,180 26,476 26,137 25,026 25,875
Operating Expenses..... 11,822 11,283 23,551 23,696 22,335 21,566 21,422
Loss on Sale of Sharon
Finance Division...... (2,428) --
Income (Loss) from
Operations............ (1,030) 1,603 3,629 2,780 3,802 3,460 4,453
Cost Associated With
Abandoned Business
Combination........... -- 370 370 220 -- -- --
Interest Expense....... 1,416 1,106 2,492 2,049 1,972 2,801 2,701
Income (Loss) Before
Income Taxes.......... (2,446) 27 767 511 1,830 659 1,752
Provision for Income
Taxes................. (105) 10 346 194 613 142 512
Net Income (Loss)...... (2,341) 17 421 317 1,217 517 1,240
Net Income (Loss) Per
Common Share.......... (.94) .01 .17 .13 .50 .21 .50
Weighted Average Shares
Outstanding........... 2,471 2,471 2,473 2,474 2,450 2,432 2,480
Working Capital........ 31,622 37,693 35,207 35,247 33,736 33,878 33,347
Total Assets........... 51,550 61,098 59,929 58,469 57,760 55,399 54,117
Long-Term Obligations.. 24,713 33,155 30,130 29,783 28,360 28,266 27,555
Stockholders' Equity... 16,425 18,356 18,745 18,378 18,140 16,903 16,305
</TABLE>
The Company's Banking Relationship. The Company currently has a credit
facility with a regional bank. The Purchaser has been advised by the Company
that the bank has the right to require repayment of outstanding amounts under
the credit facility in the event of a merger of the Company. Upon successful
completion of this Offer, subject to certain conditions, the Purchaser intends
to seek the Merger, which would allow the bank to exercise its right to call
the loan. The Purchaser believes such a call to be unlikely, but nevertheless
has begun discussions with a number of banking and commercial finance entities
regarding the possible replacement of this credit facility.
13. CERTAIN INFORMATION CONCERNING THE PURCHASER.
The Purchaser, successor by merger to Firearm Safety Products, Inc.
("Firearm") was organized to design, develop, manufacture and market consumer
products. Firearm was organized on December 19, 1991 as Triggerguard, Inc., a
Georgia corporation. Effective August 10, 1992, the name of the Purchaser was
changed to Firearm Safety Products, Inc. Pursuant to a Plan and Agreement of
Merger entered into October 20, 1993, Firearm was merged into the Purchaser, a
newly formed Delaware corporation. In conjunction with the plan of merger,
Family Safety Products, Inc. ("FSPI"), a Georgia corporation was formed as a
wholly-owned subsidiary of the Purchaser, and the assets and operations of
Firearm were transferred to FSPI. On October 24, 1994, the Purchaser completed
an initial public offering on the NASDAQ exchange. The Purchaser's common
stock trades under the symbol "VIST". Its principal executive offices are
located at 11660 Alpharetta Highway, #330, Roswell, Georgia 30076, and its
telephone number is (404) 751-3776.
14
<PAGE>
In order to meet the financial requirements of this Offer, the Purchaser has
completed the sale of a series of Convertible Preferred securities of the
Purchaser. The amount of funds on hand for completion of this Offer,
$13,772,000, was generated primarily from the sale of such Convertible
Preferred securities, and is on deposit in a bank demand deposit account of
the Purchaser.
For the name, citizenship, present principal occupation or employment of
each of the directors and executive officers of the Purchaser, see Schedule 1
attached hereto.
Financial Information. The Purchaser does not believe that its financial
condition is material to the decision of a Shareholder in determining whether
to sell, tender or hold the Shares in this all cash Offer.
14. CERTAIN LEGAL MATTERS.
General. Except as described in this Section 15, based on information
provided in the Company, the Purchaser is not aware of any license or
regulatory permit that appears to be material to the business of the Company
that it believes would be adversely affected by the acquisition of Shares by
the Purchaser pursuant to the Offer, or, except as set forth below, of any
filings, approvals or other actions by any governmental, administrative or
regulatory agency or authority that would be required prior to the acquisition
of Shares by the Purchaser pursuant to the Offer. Should any such approval or
other action be required, the Purchaser currently contemplates such additional
approval or action will be sought. While the Purchaser does not currently
intend to delay the acceptance for payment of Shares tendered pursuant to the
Offer pending the outcome of any such matters, there can be no assurance that
any such approval or other action, if needed, would be obtained or would be
obtained without substantial conditions or that the Company's business would
not be adversely affected or that certain parts of the Company's business
would not have to be disposed of or held separately in the event that such
approval were not obtained or any such other action were not taken, any of
which could cause the Purchaser to elect to terminate the Offer without the
purchase of Shares thereunder. The Purchaser's obligation under the Offer to
accept for payment and pay for Shares is subject to certain conditions,
including conditions relating to the legal matters discussed in this Section
15.
State Takeover Statutes. A number of states have adopted laws and
regulations which are applicable to offers to acquire securities of
corporations which are incorporated in such states, or have substantial
assets, security holders, principal executive offices or principal places of
business therein. In Edgar v. MITE Corporation, the Supreme Court of the
Untied States invalidated on constitutional grounds the Illinois Business
Takeover Act, which, as a matter of state securities law, made takeovers of
certain corporations more difficult. However, in CTS Corp. v. Dynamics Corp.
of America, the Supreme Court of the United States held, that as a matter of
corporate law, and, in particular law concerning corporate governance, a state
may constitutionally disqualify a potential acquiror of control shares of a
corporation incorporated in such state and meeting other jurisdictional
requirements from voting on corporate matters without the prior approval of
disinterested shareholders.
The Company's principal executive offices are located in Ohio but is
incorporated under the laws of the State of Delaware, neither of which
currently have takeover statutes that would apply to the Offer. There can be
no assurance, however, that these states will not, prior to the completion of
the Offer, adopt such statutes.
The Purchaser does not believe that any other state takeover laws are
applicable to the Offer. If any person should seek to apply any state takeover
statute, the Purchaser would take such action as then appears desirable, which
action may include challenging the validity or applicability of any such
statute in appropriate court proceedings.
Section 203 of the Delaware General Corporation Law ("DGCL") limits the
ability of a Delaware corporation to engage in business combinations with
"interested stockholders" (defined as any beneficial owner of 15% or more of
the outstanding voting stock of the corporation) unless, among other things,
the corporation's board of directors has given its prior approval to either
the business combination or the transaction which resulted in the stockholder
becoming an "interested stockholder" or upon consummation of the transaction
which
15
<PAGE>
resulted in such stockholder becoming an "interested stockholder," the
"interested stockholder" held 85% or more of the voting stock of the
corporation held (immediately prior to the commencement of the offer) by
stockholders other than, among others, persons who are directors and also
officers of the corporation. Unless one of these conditions is satisfied, the
Purchaser will be restricted in its ability to consummate the Merger or any
other business combination involving the Company after the Offer unless such
subsequent business combination is approved by the holders of 66 2/3% of the
outstanding stock of the Company not held by the Purchaser.
Antitrust. Under the provisions of the Hart-Scott-Rodino Antitrust
Improvements Act of 1976 (the "HSR Act") applicable to the Offer, the purchase
of Shares under the Offer may be consummated following the expiration of a 15-
calendar day waiting period following the filing by the Purchaser of a
Notification and Report Form with respect to the Offer, unless the Purchaser
receives a request for additional information or documentary material from the
Antitrust Division of the Department of Justice (the "Antitrust Division") or
the Federal Trade Commission (the "FTC") or unless early termination of the
waiting period is granted. The Purchaser intends to make such filing on or
before September 1, 1995. If, within the initial 15-day waiting period, either
the Antitrust Division or the FTC requests additional information or material
from the Purchaser concerning the Offer, the waiting period will be extended
and would expire at 11:59 p.m., New York City time, on the tenth calendar day
after the date of substantial compliance by the Purchaser with such request.
Only one extension of the waiting period pursuant to a request for additional
information is authorized by the HSR Act. Thereafter, such waiting period may
be extended only by court order or with the consent of the Purchaser. In
practice, complying with a request for additional information or material can
take a significant amount of time. In addition, if the Antitrust Division or
the FTC raises substantive issues in connection with a proposed transaction,
the parties frequently engage in negotiations with the relevant governmental
agency concerning possible means of addressing those issues and may agree to
delay consummation of the transaction while such negotiations continue.
In the event the Purchaser proposes a merger to which the Company would be a
party, such merger would not require an additional filing under the HSR Act if
the Purchaser owns 50% or more of the outstanding Shares at the time of the
merger or if the merger occurs within one year after the HSR Act waiting
period applicable to the Offer expires or is terminated.
The FTC and the Antitrust Division frequently scrutinize the legality under
the antitrust laws of the transactions such as the Purchaser's proposed
acquisition of the Company. At any time before or after the Purchaser's
purchase of Shares pursuant to the Offer, the Antitrust Division or FTC could
take such action under the antitrust laws as it deems necessary or desirable
in the public interest, including seeking to enjoin the purchase of Shares
pursuant to the Offer or seeking the divestiture of Shares acquired by the
Purchaser or the divestiture of substantial assets of the Purchaser or the
Company. Private parties may also bring legal action under the antitrust laws
under certain circumstances. There can be no assurance that a challenge to the
Offer on antitrust grounds will not be made or, if such challenge is made, of
the results thereof.
Federal Reserve Board Regulations. Federal Reserve Board Regulations G, U
and X (collectively, the "Margin Regulations") restrict the extension or
maintenance of credit for the purpose of purchasing or carrying margin stock,
including the Shares, if the credit is secured directly or indirectly by
margin stock. The acquisition of the Shares described in Section 11 hereof
will not be directly or indirectly secured by the Shares subject to this
Offer.
Litigation. The Company has informed the Purchaser that it is engaged in
certain litigation regarding alleged patent infringement by the Company. The
validity of this action has not yet been assessed by the Company
15. FEES AND EXPENSES.
Kissel-Blake Inc. has been retained by the Purchaser as Information Agent in
connection with the Offer. The Information Agent may contact holders of Shares
by mail, telephone, telex, telegraph and personal interview and may request
brokers, dealers and other nominee shareholders to forward materials relating
to the Offer to beneficial owners.
16
<PAGE>
Harris Trust Company of New York has been retained by the Purchaser as the
Depositary in connection with the Offer.
The Information Agent and the Depositary will receive reasonable and
customary compensation for their services in connection with the Offer, will
be reimbursed for certain reasonable out-of-pocket expense and will be
indemnified against certain liabilities and expenses in connection with the
Offer, including liabilities under the federal securities laws.
The Purchaser will not pay any fees or commissions to any broker or other
person for soliciting tenders of Shares pursuant to the Offer. Brokers,
dealers, commercial banks and trust companies will be reimbursed by the
Purchaser for reasonable expenses incurred by them in forwarding the Offer
materials to their customers.
Except as set forth above, no fees or commissions will be payable to
brokers, dealers or other persons for soliciting tenders of Shares pursuant to
the Offer.
16. MISCELLANEOUS.
The Offer is not being made to (nor will tender of Shares be accepted from
or on behalf of) holders of Shares in any jurisdiction in which the Offer or
the acceptance thereof would not be in compliance with the securities, blue
sky or other laws of such jurisdiction. NO PERSON HAS BEEN AUTHORIZED TO GIVE
ANY INFORMATION OR MAKE ANY REPRESENTATION ON BEHALF OF THE PURCHASER NOT
CONTAINED IN THIS OFFER AND, IF GIVEN OR MADE, SUCH INFORMATION OR
REPRESENTATION MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY THE
PURCHASER.
The Purchaser has filed with the Commission a Tender Offer Statement on
Schedule 14D-1, together with exhibits, pursuant to Rule 14d-3 of the General
Rules and Regulations under the Exchange Act, furnishing certain additional
with respect to the Offer. Such Statement and any amendments thereto,
including exhibits, may be examined and copies may be obtained at the same
places and in the same manner as set forth under the caption "CERTAIN
INFORMATION CONCERNING THE COMPANY" in Section 12 of this Offer to Purchase
(except that such materials will not be available at the regional offices of
the Commission).
VISTA 2000, INC.
August 30, 1995
17
<PAGE>
SCHEDULE I
DIRECTORS AND EXECUTIVE OFFICERS OF THE PURCHASER
This Schedule I lists the name, age, present principal occupation or
employment and the name, principal business and address of any corporation or
other organization in which such employment or occupation is conducted for
each of the directors and executive officers of the Purchaser. Each of the
directors and executive officers of the Purchaser is a citizen of the United
States of America.
During the last five years, none of the persons identified pursuant to this
Schedule I to Section 13 of the Offer to Purchase has been convicted in a
criminal proceeding (excluding traffic violations or similar misdemeanors) or
has been a party to a civil proceeding of a judicial or administrative body of
competent jurisdiction or as a result of such proceeding has been or is
subject to a judgment, decree or final order enjoining future violations of,
or prohibiting activities subject to, federal or state securities laws or any
violation of such laws.
<TABLE>
<CAPTION>
NAME, AGE, POSITION PRINCIPAL OCCUPATIONS AND OTHER
AND BUSINESS ADDRESS DIRECTORSHIPS DURING THE PAST 5 YEARS
--------------------- -------------------------------------
<C> <S>
Richard Smyth (38).......... Chairman and CEO of the Purchaser, February 1995 to
present; President of the Purchaser, 1992-1995;
President, The Technology & Services Group, Inc.,
1989-1992.
Arnold Johns (52)........... President of the Purchaser, February 1995 to present;
Senior Managing Director, Buckhead Financial
Corporation, June 1993 to February 1995; Executive
Vice President, Argent Securities Inc., 1992-1993;
President, RTS, Inc., 1991-1992.
Michael Becker (40)......... Vice President-Finance of the Purchaser, 1995 to
present; Vice President and Controller, Interstate
Distributors, Inc., 1991-1995; Regional Controller,
Burger King, 1988-1991.
</TABLE>
S-1
<PAGE>
The Depositary for the Offer is:
HARRIS TRUST COMPANY OF NEW YORK
By Mail: By Overnight Courier: By Hand:
Wall Street Station 77 Water Street, 4th Floor Receive Window
P.O. Box 1010 New York, NY 10005 77 Water Street, 5th Floor
New York, NY 10268-1010 New York, NY 10005
Facsimile Transmission Copy Numbers:
212/701-7636
Confirm by Telephone:
212/701-7663
Any questions or requests for assistance or additional copies of the Offer
to Purchase, the Letter of Transmittal and copies of the Notice of Guaranteed
Delivery may be directed to the Information Agent at the telephone numbers and
location listed below. A Shareholder may also contact his local broker,
dealer, commercial bank, trust company or other nominee for assistance
concerning the Offer.
The Information Agent for the Offer is:
LOGO
110 Wall Street
New York, New York 10005
Call Toll Free (800) 554-7733
Brokers and Banks please call (212) 344-6733
<PAGE>
LETTER OF TRANSMITTAL
TO TENDER SHARES OF COMMON STOCK
OF
AMERICAN CONSUMER PRODUCTS, INC.
PURSUANT TO THE OFFER TO PURCHASE DATED AUGUST 30, 1995
BY
VISTA 2000, INC.
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT NEW YORK CITY
TIME ON THURSDAY, SEPTEMBER 28, 1995, UNLESS EXTENDED
The Depositary:
HARRIS TRUST COMPANY OF NEW YORK
By Mail: By Overnight Courier: By Hand:
Wall Street Station 77 Water Street, 4th Floor Receive Window
P.O. Box 1010 New York, NY 10005 77 Water Street, 5th Floor
New York, NY 10268-1010 New York, NY 10005
By Facsimile Transmission:
(for Eligible Institutions Only)
(212) 701-7636
Confirm by Telephone:
(212) 701-7663
---------------
DELIVERY OF THIS LETTER OF TRANSMITTAL TO AN ADDRESS, OR TRANSMISSION OF
INSTRUCTIONS VIA A FACSIMILE NUMBER, OTHER THAN AS SET FORTH ABOVE WILL NOT
CONSTITUTE A VALID DELIVERY.
THE INSTRUCTIONS SET FORTH IN THIS LETTER OF TRANSMITTAL SHOULD BE READ
CAREFULLY BEFORE THIS LETTER OF TRANSMITTAL IS COMPLETED.
This Letter of Transmittal is to be used either if certificates are to be
forwarded herewith or, unless an Agent's Message (as defined in Section 3 of
the Offer to Purchase) is utilized, if delivery of Shares (as defined below)
is to be made by book-entry transfer to an account maintained by the
Depositary at The Depository Trust Company, Midwest Securities Trust Company
or Philadelphia Depository Trust Company (each, a "Book-Entry Transfer
Facility") pursuant to the procedures set forth in Section 3 of the Offer to
Purchase. Stockholders who deliver Shares by book-entry transfer are referred
to herein as "Book-Entry Stockholders" and other stockholders are referred to
herein as "Certificate Stockholders." Stockholders whose certificates for
Shares are not immediately available or who cannot deliver either the
certificates for, or a Book-Entry Confirmation (as defined in Section 3 of the
Offer to Purchase) with respect to, their Shares and all other documents
required hereby to the Depositary prior to the Expiration Date (as defined in
Section 1 of the Offer to Purchase) must tender their Shares in accordance
with the guaranteed delivery procedures set forth in Section 3 of the Offer to
Purchase. See Instruction 2.
<PAGE>
[_]CHECK HERE IF TENDERED SHARES ARE BEING DELIVERED BY BOOK-ENTRY TRANSFER
MADE TO AN ACCOUNT MAINTAINED BY THE DEPOSITARY WITH A BOOK-ENTRY TRANSFER
FACILITY AND COMPLETE THE FOLLOWING (ONLY PARTICIPANTS IN A BOOK-ENTRY
TRANSFER FACILITY MAY DELIVER SHARES BY BOOK-ENTRY TRANSFER):
Name of Tendering Institution ___________________________________________
Check Box of Book-Entry Transfer Facility:
[_]The Depository Trust Company
[_]Midwest Securities Trust Company
[_]Philadelphia Depository Trust Company
Account Number __________________________________________________________
Transaction Code Number _________________________________________________
[_]CHECK HERE IF TENDERED SHARES ARE BEING DELIVERED PURSUANT TO A NOTICE OF
GUARANTEED DELIVERY PREVIOUSLY SENT TO THE DEPOSITARY AND COMPLETE THE
FOLLOWING:
Name(s) of Registered Owner(s) __________________________________________
Window Ticket Number (if any) ___________________________________________
Date of Execution of Notice of Guaranteed Delivery ______________________
Name of Institution That Guaranteed Delivery ____________________________
If delivered by Book-Entry Transfer check box of Book-Entry Transfer
Facility:
[_]The Depository Trust Company
[_]Midwest Securities Trust Company
[_]Philadelphia Depository Trust Company
Account Number __________________________________________________________
Transaction Code Number _________________________________________________
<PAGE>
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------------------------
DESCRIPTION OF SHARES TENDERED
- -----------------------------------------------------------------------------------------------------------------------------------
NAME(S) AND ADDRESS(ES) OF REGISTERED HOLDER(S) SHARES TENDERED
(PLEASE FILL IN, IF BLANK, EXACTLY AS NAME(S) APPEAR(S) ON CERTIFICATE(S)) (ATTACH ADDITIONAL SIGNED LIST IF NECESSARY)
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
TOTAL NUMBER
OF SHARES NUMBER OF
CERTIFICATE REPRESENTED BY SHARES
NUMBER(S)(1) CERTIFICATE(S)(1) TENDERED(2)
--------------------------------------------------
--------------------------------------------------
--------------------------------------------------
--------------------------------------------------
--------------------------------------------------
--------------------------------------------------
TOTAL SHARES
- -----------------------------------------------------------------------------------------------------------------------------------
(1) Need not be completed by Book-Entry Stockholders.
(2) Unless otherwise indicated, it will be assumed that all Shares described
above are being tendered. See Instruction 4.
- -----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
NOTE: SIGNATURES MUST BE PROVIDED BELOW
PLEASE READ THE ACCOMPANYING INSTRUCTIONS CAREFULLY
Ladies and Gentlemen:
The undersigned hereby tenders to Vista 2000, Inc., a Delaware corporation
(the "Purchaser"), the above-described shares of common stock, par value $.10
per share (collectively, the "Shares"), of American Consumer Products, Inc., a
Delaware corporation (the "Company"), pursuant to the Purchaser's offer to
purchase all outstanding Shares at a price of $5.30 per Share, net to the
seller in cash, without interest, in accordance with the terms and conditions
of the Purchaser's Offer to Purchase dated August 30, 1995 (the "Offer to
Purchase"), and this Letter of Transmittal (which, together with any
amendments or supplements thereto or hereto, collectively constitute the
"Offer"), receipt of which is hereby acknowledged.
<PAGE>
Upon the terms of the Offer, subject to, and effective upon, acceptance for
payment of, and payment for, the Shares tendered herewith in accordance with
the terms of the Offer (including, if the Offer is extended or amended, the
terms or conditions of any such extension or amendment), the undersigned
hereby sells, assigns and transfers to, or upon the order of, the Purchaser
all right, title and interest in and to all the Shares that are being tendered
hereby (and any and all other Shares or other securities or rights issued or
issuable in respect of such Shares on or after August 25, 1995) and
irrevocably constitutes and appoints the Depositary the true and lawful agent
and attorney-in-fact of the undersigned with respect to such Shares (and any
such other Shares or securities or rights), with full power of substitution
(such power of attorney being deemed to be an irrevocable power coupled with
an interest), to (a) deliver certificates for such Shares (and any such other
Shares or securities or rights) or transfer ownership of such Shares (and any
such other Shares or securities or rights) on the account books maintained by
a Book-Entry Transfer Facility together, in any such case, with all
accompanying evidences of transfer and authenticity to, or upon the order of,
the Purchaser, (b) present such Shares (and any such other Shares or
securities or rights) for transfer on the Company's books and (c) receive all
benefits and otherwise exercise all rights of beneficial ownership of such
Shares (and any such other Shares or securities or rights), all in accordance
with the terms of the Offer.
The undersigned hereby represents and warrants that the undersigned has full
power and authority to tender, sell, assign and transfer the tendered Shares
(and any and all Shares or other securities or rights issued or issuable in
respect of such Shares on or after August 25, 1995), and, when the same are
accepted for payment by the Purchaser, the Purchaser will acquire good title
thereto, free and clear of all liens, restrictions, claims and encumbrances.
The undersigned will, upon request, execute any additional documents deemed by
the Depositary or the Purchaser to be necessary or desirable to complete the
sale, assignment and transfer of the tendered Shares (and any such other
Shares or other securities or rights).
All authority conferred or agreed to be conferred pursuant to this Letter of
Transmittal shall be binding upon the successors, assigns, heirs, executors,
administrators, trustees in bankruptcy and legal representatives of the
undersigned and shall not be affected by, and shall survive, the death or
incapacity of the undersigned. Except as stated in the Offer to Purchase, this
tender is irrevocable.
The undersigned hereby irrevocably appoints Richard P. Smyth and Arnold
Johns, in their respective capacities as officers of the Purchaser, and any
individual who shall hereafter succeed to any such office of the Purchaser,
and each of them, and any other designees of the Purchaser, the attorneys-in-
fact and proxies of the undersigned, each with full power of substitution, to
vote at any annual, special or adjourned meeting of the Company's stockholders
or otherwise in such manner as each such attorney and proxy or his substitute
shall in his sole discretion deem proper with respect to, to execute any
written consent concerning any matter as each such attorney and proxy or his
substitute shall in his sole discretion deem proper with respect to, and to
otherwise act as each such attorney and proxy or his substitute shall in his
sole discretion deem proper with respect to, all the Shares tendered hereby
that have been accepted for payment by the Purchaser prior to the time any
such action is taken and with respect to which the undersigned is entitled to
vote (and with respect to any and all other Shares or other securities or
rights issued or issuable in respect of such Shares on or after August 25,
1995). This appointment is effective when, and only to the extent that, the
Purchaser accepts for payment such Shares as provided in the Offer to
Purchase. This power of attorney and proxy are irrevocable and are granted in
consideration of the acceptance for payment of such Shares in accordance with
the terms of the offer. Such acceptance for payment shall, without further
action, revoke all prior powers of attorney and proxies appointed by the
undersigned at any time with respect to such Shares (and any such other Shares
or securities or rights) and no subsequent powers of attorney or proxies will
be appointed by the undersigned, or be effective, with respect thereto.
The undersigned understands that the valid tender of Shares pursuant to any
one of the procedures described in Section 3 of the Offer to Purchase and in
the Instructions hereto will constitute a binding agreement between the
undersigned and the Purchaser upon the terms and subject to the conditions of
the Offer.
Unless otherwise indicated herein under "Special Payment Instructions,"
please issue the check for the purchase price and/or return any certificates
for Shares not tendered or accepted for payment in the name(s) of the
registered holder(s) appearing under "Description of Shares Tendered."
Similarly, unless otherwise indicated under "Special Delivery Instructions,"
please mail the check for the purchase price and/or return any certificates
for Shares not tendered or accepted for payment (and accompanying documents,
as appropriate) to the address(es) of the registered holder(s) appearing under
"Description of Shares Tendered." In the event that both the Special Delivery
Instructions and the Special Payment Instructions are completed, please issue
the check for the purchase price and/or return any certificates for Shares not
tendered or accepted for payment (and any accompanying documents, as
appropriate) in the name of, and deliver such check and/or return such
certificates (and any accompanying documents, as appropriate) to, the person
or persons so indicated. The undersigned recognizes that the Purchaser has no
obligation pursuant to the Special Payment Instructions to transfer any Shares
from the name of the registered holder thereof if the Purchaser does not
accept for payment any of the Shares so tendered.
<PAGE>
SPECIAL PAYMENT INSTRUCTIONS (SEE SPECIAL DELIVERY INSTRUCTIONS
INSTRUCTIONS 1, 5, 6 AND 7) (SEE INSTRUCTIONS 1, 5, 6 AND 7)
To be completed ONLY if certifi- To be completed ONLY if certifi-
cates for Shares not tendered or cates for Shares not tendered or
not accepted for payment and/or not accepted for payment and/or
the check for the purchase price the check for the purchase price
of Shares accepted for payment of Shares accepted for payment
are to be issued in the name of are to be sent to someone OTHER
someone OTHER THAN the under- THAN the undersigned or to the
signed. undersigned at an address other
than that indicated above.
Issue check and/or certificate(s)
to:
Mail check and/or certificate(s)
to:
Name _____________________________ Name _____________________________
(PLEASE PRINT) (PLEASE PRINT)
Address __________________________ Address __________________________
__________________________________ __________________________________
(INCLUDE ZIP CODE) (INCLUDE ZIP CODE)
__________________________________ __________________________________
Tax Identification or Social Tax Identification or Social
Security No. Security No.
SIGN HERE SIGN HERE
SIGN HERE
(ALSO COMPLETE SUBSTITUTE FORM W-9 BELOW)
................................................................
................................................................
(SIGNATURE(S) OF STOCKHOLDER(S))
Dated: .................................................. , 1995
(Must be signed by registered holder(s) as name(s) appear(s)
on the certificate(s) for the Shares or on a security position
listing or by person(s) authorized to become registered
holder(s) by certificates and documents transmitted herewith.
If signature is by trustees, executors, administrators,
guardians, attorneys-in-fact, officers of corporations or
others acting in a fiduciary or representative capacity, please
provide the following information and see Instruction 5.)
Name(s).........................................................
.........................................................
(PLEASE PRINT)
Capacity (full title)...........................................
Address.........................................................
.........................................................
(INCLUDE ZIP CODE)
Area Code and Telephone No......................................
Tax Identification or Social Security No........................
GUARANTEE OF SIGNATURE(S) (IF REQUIRED--SEE INSTRUCTIONS 1 AND 5)
Authorized Signature............................................
Name:...........................................................
(PLEASE PRINT)
Name of Firm....................................................
Address.........................................................
.........................................................
(INCLUDE ZIP CODE)
Area Code and Telephone No......................................
Dated: .................................................. , 1995
<PAGE>
INSTRUCTIONS
FORMING PART OF THE TERMS AND CONDITIONS OF THE OFFER
1. GUARANTEE OF SIGNATURE. Except as otherwise provided below, all
signatures on this Letter of Transmittal must be guaranteed by an eligible
institution in a recognized Medallion Guarantee Program (an "Eligible
Institution"). An Eligible Institution means a firm or any other entity
identified in Rule 17Ad-15 under the Securities Exchange Act of 1934, as
amended, including (as such terms are defined therein) (i) a bank; (ii) a
broker, dealer, municipal securities dealer, municipal securities broker,
government securities dealer or government securities broker; (iii) a credit
union; (iv) a national securities exchange, registered securities association
or clearing agency; or (v) a savings association. A verification by a notary
public is not acceptable. Signatures on this Letter of Transmittal need not be
guaranteed if this Letter of Transmittal is signed by the registered holder(s)
of the Share certificates submitted herewith and such holder(s) have not
completed the instructions entitled "Special Payment Instructions" or "Special
Delivery Instructions" on this Letter of Transmittal. See Instruction 7.
2. REQUIREMENTS OF TENDER. This Letter of Transmittal is to be completed by
stockholders either if certificates are to be forwarded herewith or, unless an
Agent's Message is utilized, if delivery of Shares is to be made pursuant to
the procedures for book-entry transfer set forth in Section 3 of the Offer to
Purchase. For a stockholder validly to tender Shares pursuant to the Offer,
either (a) a properly completed and duly executed Letter of Transmittal (or
facsimile thereof), together with any required signature guarantees (or an
Agent's Message) and any other required documents, must be received by the
Depositary at one of its addresses set forth herein prior to the Expiration
Date and either (i) certificates for tendered Shares must be received by the
Depositary at one of such addresses prior to the Expiration Date or (ii)
Shares must be delivered pursuant to the procedures for book-entry transfer
set forth herein and a Book-Entry Confirmation must be received by the
Depositary prior to the Expiration Date or (b) the tendering stockholder must
comply with the guaranteed delivery procedures set forth below and in Section
3 of the Offer to Purchase.
Stockholders whose certificates for Shares are not immediately available or
who cannot deliver their certificates and all other required documents to the
Depositary or complete the procedures for book-entry transfer prior to the
Expiration Date may tender their Shares by properly completing and duly
executing the Notice of Guaranteed Delivery pursuant to the guaranteed
delivery procedures set forth in Section 3 of the Offer to Purchase. Pursuant
to such procedures, (a) such tender must be made by or through an Eligible
Institution, (b) a properly completed and duly executed Notice of Guaranteed
Delivery substantially in the form provided by the Purchaser must be received
by the Depositary prior to the Expiration Date and (c) the certificates for
all physically delivered Shares or a Book-Entry Confirmation with respect to
all tendered Shares, as well as a properly completed and duly executed Letter
of Transmittal (or facsimile thereof) with any required signature guarantees
(or, in the case of a book-entry transfer, an Agent's Message) and any other
documents required by this Letter of Transmittal, must be received by the
Depositary within three NASDAQ/NMS trading days after the date of execution of
the Notice of Guaranteed Delivery.
THE METHOD OF DELIVERY OF SHARES, THIS LETTER OF TRANSMITTAL AND ALL OTHER
REQUIRED DOCUMENTS IS AT THE ELECTION AND RISK OF THE TENDERING STOCKHOLDER.
IF DELIVERY IS BY MAIL, REGISTERED MAIL WITH RETURN RECEIPT REQUESTED,
PROPERLY INSURED, IS RECOMMENDED. IN ALL CASES, SUFFICIENT TIME SHOULD BE
ALLOWED TO ENSURE TIMELY DELIVERY.
No alternative, conditional or contingent tenders will be accepted and no
fractional Shares will be purchased. All tendering stockholders, by execution
of this Letter of Transmittal (or facsimile thereof), waive any right to
receive any notice of the acceptance of their Shares for payment.
3. INADEQUATE SPACE. If the space provided herein is inadequate, the
certificate numbers and/or the number of Shares should be listed on a separate
schedule attached hereto.
4. PARTIAL TENDERS (APPLICABLE TO CERTIFICATE STOCKHOLDERS ONLY). If fewer
than all the Shares evidenced by any certificate submitted are to be tendered,
fill in the number of Shares that are to be tendered in the box entitled
"Number of Shares Tendered." In any such case, new certificate(s) for the
remainder of the Shares that were evidenced by the old certificate(s) will be
sent to the registered holder, unless otherwise provided in the appropriate
box on this Letter of Transmittal as soon as practicable after the expiration
of the Offer. All Shares represented by certificates delivered to the
Depositary will be deemed to have been tendered unless otherwise indicated.
5. SIGNATURES ON LETTERS OF TRANSMITTAL; STOCK POWERS AND ENDORSEMENTS. If
this Letter of Transmittal is signed by the registered holder of the Shares
tendered hereby, the signature must correspond with the name as written on the
face of the certificate(s) without any change whatsoever.
<PAGE>
If any of the Shares tendered hereby are owned of record by two or more
joint owners, all such owners must sign this Letter of Transmittal.
If any tendered Shares are registered in different names on several
certificates, it will be necessary to complete, sign and submit as many
separate Letters of Transmittal as there are different registrations of
certificates.
If this Letter of Transmittal or any certificates or stock powers are signed
by trustees, executors, administrators, guardians, attorneys-in-fact, officers
of corporations or others acting in a fiduciary or representative capacity,
such persons should so indicate when signing, and proper evidence satisfactory
to the Purchaser of their authority so to act must be submitted.
When this Letter of Transmittal is signed by the registered holder(s) of the
Shares listed and transmitted hereby, no endorsements of certificates or
separate stock powers are required unless payment is to be made to or
certificates for Shares not tendered or accepted for payment are to be issued
to a person other than the registered holder(s). Signatures on such
certificates or stock powers must be guaranteed by an Eligible Institution.
If this Letter of Transmittal is signed by a person other than the
registered holder(s) of certificates listed, the certificates must be endorsed
or accompanied by appropriate stock powers, in either case signed exactly as
the name or names of the registered owner or owners appear on the
certificates. Signatures on such certificates or stock powers must be
guaranteed by an Eligible Institution.
6. STOCK TRANSFER TAXES. The Purchaser will pay any stock transfer taxes
with respect to the transfer and sale of Shares to it or its order pursuant to
the Offer. If, however, payment of the purchase price is to be made to, or if
certificates for Shares not tendered or accepted for payment are to be
registered in the name of, any persons other than the registered holder(s), or
if tendered certificates are registered in the name of any person other than
the person(s) signing this Letter of Transmittal, the amount of any stock
transfer taxes (whether imposed on the registered holder(s) or such person)
payable on account of the transfer to such person will be deducted from the
purchase price unless satisfactory evidence of the payment of such taxes or
exemption therefrom is submitted.
EXCEPT AS PROVIDED IN THIS INSTRUCTION 6, IT WILL NOT BE NECESSARY FOR
TRANSFER TAX STAMPS TO BE AFFIXED TO THE CERTIFICATES LISTED IN THIS LETTER OF
TRANSMITTAL.
7. SPECIAL PAYMENT AND DELIVERY INSTRUCTIONS. If a check is to be issued in
the name of, and/or certificates for Shares not tendered or not accepted for
payment are to be returned to, a person other than the signer of this Letter
of Transmittal or if a check is to be sent and/or such certificates are to be
returned to a person other than the signer of this Letter of Transmittal or to
an address other than that shown above, the appropriate boxes on this Letter
of Transmittal should be completed.
8. WAIVER OF CONDITIONS. Subject to the terms of the Offer, the Purchaser
reserves the absolute right in its sole discretion to waive any of the
specified conditions of the Offer, in whole or in part, in the case of any
Shares tendered.
9. 31% BACKUP WITHHOLDING. Under U.S. Federal income tax law, a stockholder
whose tendered Shares are accepted for payment is required to provide the
Depositary with such stockholder's correct taxpayer identification number
("TIN") on Substitute Form W-9 below. If the Depositary is not provided with
the correct TIN, the Internal Revenue Service may subject the stockholder or
other payee to a $50 penalty. In addition, payments that are made to such
stockholder or other payee with respect to Shares purchased pursuant to the
Offer may be subject to a 31% backup withholding.
Certain stockholders (including, among others, all corporations and certain
foreign individuals) are not subject to these backup withholding and reporting
requirements. In order for a foreign individual to qualify as an exempt
recipient, the stockholder must submit a Form W-8, signed under penalties of
perjury, attesting to that individual's exempt status. A Form W-8 can be
obtained from the Depositary. See the enclosed "Guidelines for Certification
of Taxpayer Identification Number on Substitute Form W-9" for more
instructions.
If backup withholding applies, the Depositary is required to withhold 31% of
any such payments made to the stockholder or other payee. Backup withholding
is not an additional tax. Rather, the tax liability of persons subject to
backup withholding will be reduced by the amount of tax withheld, provided
that the required information is given to the Internal Revenue Service. If
withholding results in an overpayment of taxes, a refund may be obtained from
the Internal Revenue Service.
<PAGE>
The box in Part 3 of the Substitute Form W-9 may be checked if the tendering
stockholder has not been issued a TIN and has applied for a TIN or intends to
apply for a TIN in the near future. If the box in Part 3 is checked, the
stockholder or other payee must also complete the Certificate of Awaiting
Taxpayer Identification Number below in order to avoid backup withholding.
Even if the box in Part 3 is checked and the Certificate of Awaiting Taxpayer
Identification Number is completed, the Depositary will withhold 31% on all
payments made prior to the time a properly certified TIN is provided to the
Depositary. However, such amounts will be refunded to such stockholder if a
TIN is provided to the Depositary within 60 days.
The stockholder is required to give the Depositary the TIN (i.e., social
security number or employer identification number) of the record owner of the
Shares or of the last transferee appearing on the transfers attached to, or
endorsed on, the Shares. If the Shares are in more than one name or are not in
the name of the actual owner, consult the enclosed "Guidelines for
Certification of Taxpayer Identification Number on Substitute Form W-9" for
additional guidance on which number to report.
10. REQUESTS FOR ASSISTANCE OR ADDITIONAL COPIES. Requests for additional
copies of the Offer to Purchase, this Letter of Transmittal, the Notice of
Guaranteed Delivery and the Guidelines for Certification of Taxpayer
Identification Number on Substitute Form W-9 should be directed to the
Information Agent at its address set forth below. Questions or requests for
assistance may also be directed to the Information Agent.
IMPORTANT: THIS LETTER OF TRANSMITTAL OR A FACSIMILE COPY THEREOF (TOGETHER
WITH CERTIFICATES FOR, OR A BOOK-ENTRY CONFIRMATION WITH RESPECT TO, TENDERED
SHARES WITH ANY REQUIRED SIGNATURE GUARANTEES AND ALL OTHER REQUIRED
DOCUMENTS) MUST BE RECEIVED BY THE DEPOSITARY, OR THE NOTICE OF GUARANTEED
DELIVERY MUST BE RECEIVED BY THE DEPOSITARY, PRIOR TO THE EXPIRATION DATE.
PAYER'S NAME: HARRIS TRUST COMPANY OF NEW YORK
- -------------------------------------------------------------------------------
PART 1--PLEASE PROVIDE YOUR Social Security Number
TIN IN THE BOX AT RIGHT AND OR Employer
SUBSTITUTE CERTIFY BY SIGNING AND Identification Number
FORM W-9 DATING BELOW.
DEPARTMENT OF THE --------------------------------------------------------
TREASURY INTERNAL PART 2--CERTIFICATION--Under penalties of perjury, I
REVENUE SERVICE certify that:
PAYER'S REQUEST FOR
TAXPAYER IDENTIFICATION (1) The number shown on this form is my correct
NUMBER (TIN) Taxpayer Identification Number (or I am waiting
for a number to be issued for me) and
(2) I am not subject to backup withholding either
because: (a) I am exempt from backup withholding,
or (b) I have not been notified by the Internal
Revenue Service (the "IRS") that I am subject to
backup withholding as a result of a failure to
report all interest or dividends or (c) the IRS
has notified me that I am no longer subject to
backup withholding.
--------------------------------------------------------
CERTIFICATION INSTRUCTIONS--You must PART 3 --
cross out item (2) above if you have Awaiting
been notified by the IRS that you are TIN [_]
currently subject to backup withhold-
ing because of underreporting inter-
est or dividends on your tax return.
However, if after being notified by
the IRS that you are subject to
backup withholding, you received an-
other notification from the IRS that
you are no longer subject to backup
withholding, do not cross out such
item (2).
SIGNATURE ______________ DATE _______
- --------------------------------------------------------------------------------
NOTE: FAILURE TO COMPLETE AND RETURN THIS FORM MAY RESULT IN BACKUP
WITHHOLDING OF 31% OF ANY PAYMENTS MADE TO YOU PURSUANT TO THE OFFER.
PLEASE REVIEW THE ENCLOSED GUIDELINES FOR CERTIFICATION OF TAXPAYER
IDENTIFICATION NUMBER ON SUBSTITUTE FORM W-9 FOR ADDITIONAL DETAILS.
YOU MUST COMPLETE THE FOLLOWING CERTIFICATE IF YOU CHECKED THE BOX IN
PART 3 OF SUBSTITUTE FORM W-9.
<PAGE>
CERTIFICATE OF AWAITING TAXPAYER IDENTIFICATION NUMBER
I certify under penalties of perjury that a taxpayer identification number
has not been issued to me, and either (1) I have mailed or delivered an
application to receive a taxpayer identification number to the appropriate
Internal Revenue Service Center or Social Security Administration Office or
(2) I intend to mail or deliver an application in the near future. I
understand that if I do not provide a taxpayer identification number by the
time of payment, 31% of all reportable payments made to me will be withheld,
but that such amounts will be refunded to me if I then provide a Taxpayer
Identification Number within sixty (60) days.
Signature ____________________________ Date _________________________________
Questions and requests for assistance or additional copies of the Offer to
Purchase, this Letter of Transmittal and other tender offer materials may be
directed to the Information Agent as set forth below.
The Information Agent for this Offer is:
LOGO
110 Wall Street
New York, N.Y. 10005
Call Toll Free 1-800-554-7733 Brokers and Banks Please Call (212) 344-6733
<PAGE>
NOTICE OF GUARANTEED DELIVERY
FOR
TENDER OF SHARES OF COMMON STOCK
OF
AMERICAN CONSUMER PRODUCTS, INC.
(NOT TO BE USED FOR SIGNATURE GUARANTEES)
As set forth in Section 3 of the Offer to Purchase (as defined below), this
form or one substantially equivalent hereto must be used to accept the Offer
(as defined below) if certificates representing shares of common stock, par
value $.10 per share (the "Shares"), of American Consumer Products, Inc., a
Delaware corporation (the "Company"), are not immediately available or if the
procedures for book-entry transfer cannot be completed on a timely basis or
time will not permit all required documents to reach the Depositary prior to
the Expiration Date (as defined in Section 1 of the Offer to Purchase). Such
form may be delivered by hand or transmitted by telegram or facsimile
transmission or mailed to the Depositary and must include a guarantee by an
Eligible Institution (as defined in Section 3 of the Offer to Purchase). See
Section 3 of the Offer to Purchase.
The Depositary:
HARRIS TRUST COMPANY OF NEW YORK
By Mail: By Overnight Courier: By Hand:
Wall Street Station 77 Water Street, 4th Receive Window
P.O. Box 1010 Floor 77 Water Street
New York, NY 10268-1010 New York, NY 10005 5th Floor
New York, NY 10005
By Facsimile
Transmission:
(for Eligible
Institutions Only)
(212) 701-7636
Confirm Receipt of Notice
of Guaranteed Delivery
by Telephone:
(212) 701-7663
DELIVERY OF THIS INSTRUMENT TO AN ADDRESS, OR TRANSMISSION OF INSTRUCTIONS
VIA A FACSIMILE NUMBER, OTHER THAN AS SET FORTH ABOVE WILL NOT CONSTITUTE A
VALID DELIVERY.
This form is not to be used to guarantee signatures. If a signature on a
Letter of Transmittal is required to be guaranteed by an Eligible Institution
under the instructions thereto, such signature guarantee must appear in the
applicable space provided in the signature box on the Letter of Transmittal.
<PAGE>
Ladies and Gentlemen:
The undersigned hereby tenders to Vista 2000, Inc., a Delaware corporation
(the "Purchaser"), upon the terms and subject to the conditions set forth in
the Purchaser's Offer to Purchase, dated August 30, 1995 (the "Offer to
Purchase"), and in the related Letter of Transmittal (which, together with any
amendments or supplements thereto, collectively constitute the "Offer"),
receipt of which is hereby acknowledged, Shares pursuant to the guaranteed
delivery procedures set forth in Section 3 of the Offer to Purchase.
Number of Shares: ___________________ (Check one box if Shares will be
tendered by book-entry transfer)
Names(s) of Record Holder(s): _______
[_] The Depository Trust Company
_____________________________________ [_] Midwest Securities Trust Company
(Please Print) [_] Philadelphia Depository Trust
Company
Certificate Nos. (if available):
Account Number: _____________________
_____________________________________
Signature(s): _______________________
_____________________________________
_____________________________________
Address(es): ________________________
Dated: ________________________, 1995
_____________________________________
Zip Code
Area Code and Tel. No.: _____________
GUARANTEE
(NOT TO BE USED FOR SIGNATURE GUARANTEE)
The undersigned, a firm or other entity identified in Rule 17Ad-15 under the
Securities Exchange Act of 1934, as amended, hereby guarantees to deliver to
the Depositary either the certificates representing the Shares tendered
hereby, in proper form for transfer, or a Book-Entry Confirmation (as defined
in Section 3 of the Offer to Purchase) of a transfer of such Shares, in any
such case together with a properly completed and duly executed Letter of
Transmittal, or a manually signed facsimile thereof, with any required
signature guarantees or an Agent's Message, and any other documents required
by the Letter of Transmittal within three NASDAQ/NMS trading days after the
date hereof.
Name of Firm: _______________________ _____________________________________
(Authorized Signature)
Address: ____________________________
Title: ______________________________
_____________________________________
Zip Code Dated: ______________________________
Area Code and Tel. No.: _____________
NOTE: DO NOT SEND CERTIFICATES FOR SHARES WITH THIS NOTICE. SHARE CERTIFICATES
SHOULD BE SENT WITH YOUR LETTER OF TRANSMITTAL.
2
<PAGE>
OFFER TO PURCHASE FOR CASH
ALL OUTSTANDING SHARES OF COMMON STOCK
OF
AMERICAN CONSUMER PRODUCTS, INC.
AT
$5.30 NET PER SHARE
BY
VISTA 2000, INC.
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE
AT 12:00 MIDNIGHT, NEW YORK CITY TIME, ON
THURSDAY, SEPTEMBER 28, 1995, UNLESS EXTENDED.
August 30, 1995
To Brokers, Dealers, Banks,
Trust Companies and Other Nominees:
We are enclosing the materials listed below in connection with the offer by
Vista 2000, Inc., a Delaware corporation (the "Purchaser"), to purchase all
outstanding shares of common stock, par value $.10 per share (the "Shares"),
of American Consumer Products, Inc., a Delaware corporation (the "Company"),
at $5.30 per Share, net to the Seller in cash, without interest, upon the
terms and subject to the conditions set forth in the Purchaser's Offer to
Purchase dated August 30, 1995 (the "Offer to Purchase"), and the related
Letter of Transmittal (which, together with any supplements or amendments
thereto, collectively constitute the "Offer").
Please furnish copies of the enclosed materials to those of your clients for
whom you hold Shares registered in your name or in the name of your nominee.
Enclosed herewith are copies of the following documents:
1. Offer to Purchase;
2. Letter of Transmittal to be used by stockholders of the Company
accepting the Offer;
3. A printed form of letter that may be sent to your clients for whose
account you hold Shares in your name or in the name of a nominee, with
space provided for obtaining such client's instructions with regard to the
Offer;
4. Notice of Guaranteed Delivery;
5. Guidelines for Certification of Taxpayer Identification Number on
Substitute Form W-9; and
6. Return envelope addressed to the Depositary.
WE URGE YOU TO CONTACT YOUR CLIENTS PROMPTLY. PLEASE NOTE THAT THE OFFER AND
WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT, NEW YORK CITY TIME, ON
THURSDAY, SEPTEMBER 28, 1995, UNLESS EXTENDED.
<PAGE>
The Offer is conditioned upon, among other things, there being validly
tendered and not withdrawn prior to the expiration of the Offer that number of
Shares which would represent at least fifty-one percent (51%) of all
outstanding shares on a fully diluted basis.
In order to accept the Offer, a duly executed and properly completed Letter
of Transmittal with any required signature guarantees, or an Agent's Message
(as defined in the Offer to Purchase) in connection with a book-entry delivery
of shares, and any other required documents should be sent to the Depositary
and either Share certificates representing the tendered Shares should be
delivered to the Depositary, or such Shares should be tendered by book-entry
transfer into the Depositary's account maintained at one of the Book-Entry
Transfer Facilities (as described in Section 3 of the Offer to Purchase), all
in accordance with the instructions set forth in the Letter of Transmittal and
the Offer to Purchase.
If holders of Shares wish to tender, but it is impracticable for them to
forward their Share certificates or other required documents on or prior to
the Expiration Date or comply with the book-entry transfer procedures on a
timely basis, a tender may be effected by following the guaranteed delivery
procedures specified in Section 3 of the Offer to Purchase.
The Purchaser will not pay any fees or commissions to any broker or dealer
or other person (other than the Information Agent as described in the Offer to
Purchase) in connection with the solicitation of tenders of Shares pursuant to
the Offer. You will be reimbursed upon request for customary mailing and
handling expenses incurred by you in forwarding the enclosed offering
materials to your customers.
Questions and requests for additional copies of the enclosed material may be
directed to the Information Agent at the addresses and telephone numbers set
forth on the back cover of the enclosed Offer to Purchase.
Very truly yours,
Vista 2000, Inc.
NOTHING CONTAINED HEREIN OR IN THE ENCLOSED DOCUMENTS SHALL RENDER YOU OR
ANY OTHER PERSON THE AGENT OF THE PURCHASER, THE DEPOSITARY OR THE INFORMATION
AGENT OR ANY AFFILIATE OF ANY OF THEM, OR AUTHORIZE YOU OR ANY OTHER PERSON TO
GIVE ANY INFORMATION OR USE ANY DOCUMENT OR MAKE ANY STATEMENTS ON BEHALF OF
ANY OF THEM WITH RESPECT TO THE OFFER OTHER THAN THE ENCLOSED DOCUMENTS AND
THE STATEMENTS CONTAINED THEREIN.
2
<PAGE>
OFFER TO PURCHASE FOR CASH
ALL OUTSTANDING SHARES OF COMMON STOCK
OF
AMERICAN CONSUMER PRODUCTS, INC.
AT
$5.30 NET PER SHARE
BY
VISTA 2000, INC.
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE
AT 12:00 MIDNIGHT, NEW YORK CITY TIME, ON
THURSDAY SEPTEMBER 28, 1995, UNLESS EXTENDED.
To Our Clients:
Enclosed for your consideration is an Offer to Purchase dated August 30,
1995 (the "Offer to Purchase"), and a related Letter of Transmittal (which,
together with any amendments or supplements thereto, collectively constitute
the "Offer") relating to an offer by Vista 2000, Inc., a Delaware corporation
(the "Purchaser") to purchase shares of Common Stock, par value $.10 per share
(the "Shares") of American Consumer Products Inc., a Delaware corporation (the
"Company"), at $5.30 per Share, net to the seller in cash, without interest,
upon the terms and subject to the conditions set forth in the Offer.
WE ARE THE HOLDER OF RECORD OF SHARES HELD BY US FOR YOUR ACCOUNT. A TENDER
OF SUCH SHARES CAN BE MADE ONLY BY US AS THE HOLDER OF RECORD AND PURSUANT TO
YOUR INSTRUCTIONS. THE LETTER OF TRANSMITTAL IS FURNISHED TO YOU FOR YOUR
INFORMATION ONLY AND CANNOT BE USED TO TENDER SHARES HELD BY US FOR YOUR
ACCOUNT.
We request instructions as to whether you wish to tender any or all the
Shares held by us for your account, pursuant to the terms and conditions set
forth in the Offer.
Your attention is invited to the following:
1. The tender price is $5.30 per Share, net to the seller in cash,
without interest, upon the terms and subject to the conditions set forth in
the Offer.
2. The Offer is being made for all outstanding Shares not owned by the
Purchaser.
3. The Offer is conditioned upon, among other things, there being validly
tendered and not withdrawn prior to the expiration of the Offer that number
of Shares which would represent at least 51% of all outstanding Shares on a
fully diluted basis.
4. The Offer and withdrawal rights will expire at 12:00 Midnight, New
York City time, on Thursday, September 28, 1995, unless the Offer is
extended by the Purchaser. In all cases, payment for Shares accepted for
payment pursuant to the Offer will be made only after timely receipt by the
Depositary of certificates for such Shares (or timely Book-Entry
Confirmation of a transfer of such Shares as described in Section 3 of the
Offer to Purchase), a properly completed and duly executed Letter of
Transmittal (or facsimile thereof) or an Agent's Message (as defined in the
Offer to Purchase) in connection with a book-entry delivery and any other
documents required by the Letter of Transmittal.
<PAGE>
5. The Purchaser will pay any stock transfer taxes with respect to the
transfer and sale of Shares to it or its order pursuant to the Offer,
except as otherwise provided in Instruction 6 of the Letter of Transmittal.
If you wish to have us tender any of or all your Shares, please so instruct
us by completing, executing, detaching and returning to us the instruction
form attached hereto. An envelope to return your instructions to us is
enclosed. If you authorize tender of your Shares, all such Shares will be
tendered unless otherwise specified below. Your instructions to us should be
forwarded promptly to permit us to submit a tender on your behalf prior to the
expiration of the Offer.
The Offer is not being made to, nor will tenders be accepted from or on
behalf of, holders of Shares in any jurisdiction in which the making or
acceptance of the Offer would not be in compliance with the laws of such
jurisdiction.
2
<PAGE>
(DETACH PAGE)
INSTRUCTIONS WITH RESPECT TO THE OFFER TO PURCHASE
ALL OUTSTANDING SHARES OF COMMON STOCK
OF
AMERICAN CONSUMER PRODUCTS, INC.
The undersigned acknowledges receipt of your letter enclosing the Offer to
Purchase dated August 30, 1995, of Vista 2000, Inc., a Delaware corporation,
and the related Letter of Transmittal, relating to shares of Common Stock, par
value $.10 per share (the "Shares"), of American Consumer Products, Inc., a
Delaware corporation.
This will instruct you to tender the number of Shares indicated below held
by you for the account of the undersigned on the terms and conditions set
forth in such Offer to Purchase and the related Letter of Transmittal.
Dated: , 1995
NUMBER OF SHARES TO BE TENDERED*
Shares
-------------------------------------
-------------------------------------
Signature(s)
-------------------------------------
-------------------------------------
Please print name(s)
-------------------------------------
-------------------------------------
Address (Include Zip Code)
-------------------------------------
-------------------------------------
Area Code and Telephone No.
-------------------------------------
-------------------------------------
Taxpayer Identification or Social
Security No.
- --------
*Unless otherwise indicated, it will be assumed that all your Shares are to
be tendered.
3
<PAGE>
GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION
NUMBER ON SUBSTITUTE FORM W-9
GUIDELINES FOR DETERMINING THE PROPER IDENTIFICATION NUMBER TO GIVE THE
PAYER.--Social Security numbers have nine digits separated by two hyphens:
i.e. 000-00-0000. Employer identification numbers have nine digits separated
by only one hyphen: i.e. 00-0000000. The table below will help determine the
number to give the payer.
<TABLE>
<CAPTION>
- -----------------------------------------------
GIVE THE
FOR THIS TYPE OF ACCOUNT: SOCIAL SECURITY
NUMBER OF--
- -----------------------------------------------
<S> <C>
1. An individual's account The individual
2. Two or more individuals The actual owner
(joint account) of the account
or, if combined
funds, any one of
the
individuals(1)
3. Husband and wife (joint The actual owner
account) of the account
or, if
joint funds,
either person(1)
4. Custodian account of a The minor(2)
minor (Uniform Gift to
Minors Act)
5. Adult and minor (joint The adult or, if
account) the minor is the
only contributor,
the minor(1)
6. Account in the name of The ward, minor,
guardian or committee for or incompetent
a designated ward, minor, person(3)
or incompetent person
7. a. The usual revocable The grantor-
savings trust account trustee(1)
(grantor is also
trustee)
b. So-called trust account The actual
that is not a legal or owner(1)
valid trust under State
law
8. Sole proprietorship The owner(4)
account
</TABLE>
- ----------------------------------------------------
<TABLE>
<CAPTION>
- ----------------------------------------------------
GIVE THE EMPLOYER
FOR THIS TYPE OF ACCOUNT: IDENTIFICATION
NUMBER OF --
- ----------------------------------------------------
<S> <C>
9. A valid trust, estate, or The legal entity
pension trust (Do not furnish
the identifying
number of personal
representative or
trustee unless
the legal entity
itself is not
designated in the
account title.)(5)
10. Corporate account The corporation
11. Religious, charitable, or The organization
educational organization
account
12. Partnership account held The partnership
in the name of the
business
13. Association, club, or The organization
other tax-exempt
organization
14. A broker or registered The broker or
nominee nominee
15. Account with the The public entity
Department of Agriculture
in the name of a public
entity (such as a State or
local government, school
district, or prison) that
receives agricultural
program payments
</TABLE>
- ---------------------------------------
(1) List first and circle the name of the person whose number you furnish.
(2) Circle the minor's name and furnish the minor's social security number.
(3) Circle the ward's, minor's or incompetent person's name and furnish such
person's social security number.
(4) Show the name of the owner.
(5) List first and circle the name of the legal trust, estate, or pension
trust.
NOTE: If no name is circled when there is more than one name, the number will
be considered to be that of the first name listed.
<PAGE>
GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION
NUMBER OF SUBSTITUTE FORM W-9
PAGE 2
OBTAINING A NUMBER
If you don't have a taxpayer identification number or you don't know your
number, obtain Form SS-5 (Application for a Social Security Number Card) or
Form SS-4 (Application for Employer Identification Number) from your local
office of the Social Security Administration or the Internal Revenue Service
and apply for a number.
PAYEES AND PAYMENTS EXEMPT FROM BACKUP WITHHOLDING
Payees specifically exempted from backup withholding on ALL payments include
the following:
. A corporation.
. A financial institution.
. An organization exempt from tax under section 501(a) of the Internal Rev-
enue Code of 1986, as amended (the "Code"), or an individual retirement
plan.
. The United States or any agency or instrumentality thereof.
. A state, the District of Columbia, a possession of the United States, or
any subdivision or instrumentality thereof.
. A foreign government, a political subdivision of a foreign government, or
any agency or instrumentality thereof.
. An international organization or any agency, or instrumentality thereof.
. A registered dealer in securities or commodities registered in the United
States or a possession of the United States.
. A real estate investment trust.
. A common trust fund operated by a bank under section 584(a) of the Code.
. An exempt charitable remainder trust, or a non-exempt trust described in
section 4947(a)(1) of the Code.
. An entity registered at all times under the Investment Company Act of
1940.
. A foreign central bank of issue.
Payments of dividends and patronage dividends not generally subject to backup
withholding include the following:
. Payments to nonresident aliens subject to withholding under section 1441
of the Code.
. Payments to partnerships not engaged in a trade or business in the United
States and which have at least one nonresident partner.
. Payments of patronage dividends where the amount received is not paid in
money.
. Payments made by certain foreign organizations.
. Payments made to a nominee.
Payments of interest not generally subject to backup withholding include the
following:
. Payments of interest on obligations issued by individuals. Note: You may
be subject to backup withholding if this interest is $600 or more and is
paid in the course of the payer's trade or business and you have not pro-
vided your correct taxpayer identification number to the payer.
. Payments of tax-exempt interest (including exempt-interest dividends un-
der section 852 of the Code).
. Payments described in section 6049(b)(5) of the Code to non-resident al-
iens.
. Payments on tax-free covenant bonds under section 1451 of the Code.
. Payments made by certain foreign organizations.
. Payments made to a nominee.
Exempt payees described above should file Substitute Form W-9 to avoid
possible erroneous backup withholding. FILE THIS FORM WITH THE PAYER, FURNISH
YOUR TAXPAYER IDENTIFICATION NUMBER, WRITE "EXEMPT" ON THE FACE OF THE FORM,
AND RETURN IT TO THE PAYER. IF THE PAYMENTS ARE INTEREST, DIVIDENDS, OR
PATRONAGE DIVIDENDS, ALSO SIGN AND DATE THE FORM. IF YOU ARE A NONRESIDENT
ALIEN OR A FOREIGN ENTITY NOT SUBJECT TO BACKUP WITHHOLDING, FILE WITH PAYER A
COMPLETED INTERNAL REVENUE FORM W-8 (CERTIFICATE OF FOREIGN STATUS).
Certain payments other than interest, dividends, and patronage dividends,
that are not subject to information reporting are also not subject to backup
withholding. For details, see Sections 6041, 6041A(a), 6045, and 6050A of the
Code.
PRIVACY ACT NOTICE.--Section 5109 of the Code requires most recipients of div-
idend, interest, or other payments to give taxpayer identification numbers to
payers who must report the payments to the Internal Revenue Service. The In-
ternal Revenue Service uses the numbers for identification purposes. Payers
must be given the numbers whether or not recipients are required to file tax
returns. Beginning January 1, 1993, payers must generally withhold 31% of tax-
able interest, dividend, and certain other payments to a payee who does not
furnish a taxpayer identification number to a payer. Certain penalties may
also apply.
PENALTIES
(1) PENALTY FOR FAILURE TO FURNISH TAXPAYER IDENTIFICATION NUMBER.--If you
fail to furnish your taxpayer identification number to a payer, you are sub-
ject to a penalty of $50 for each such failure unless your failure is due to
reasonable cause and not to willful neglect.
(2) FAILURE TO REPORT CERTAIN DIVIDEND AND INTEREST PAYMENTS.--If you fail to
properly include any portion of an includible payment for interest, dividends,
or patronage dividends in gross income, such failure will be treated as being
due to negligence and will be subject to a penalty of 5% on any portion of an
under-payment attributable to that failure unless there is clear and convinc-
ing evidence to the contrary.
(3) CIVIL PENALTY FOR FALSE INFORMATION WITH RESPECT TO WITHHOLDING.--If you
make a false statement with no reasonable basis which results in no imposition
of backup withholding, you are subject to a penalty of $500.
(4) CRIMINAL PENALTY FOR FALSIFYING INFORMATION.--Falsifying certifications or
affirmations may subject you to criminal penalties including fines and/or im-
prisonment.
FOR ADDITIONAL INFORMATION CONTACT YOUR TAX CONSULTANT OR THE INTERNAL REVENUE
SERVICE
<PAGE>
[LETTERHEAD OF L.G. ZANGANI, INC. APPEARS HERE]
PRESS RELEASE
- --------------------------------------------------------------------------------
VISTA 2000, INC. ANNOUNCES CASH TENDER OFFER FOR
AMERICAN CONSUMER PRODUCTS, INC.
ATLANTA, GEORGIA, AUGUST 29, 1995... VISTA 2000, INC. (NASDAQ: VIST, VISTA)
announced today a friendly cash tender offer for all outstanding shares of
American Consumer Products, Inc. (NASDAQ: ACPI) at $5.30 per share, not already
owned by VISTA 2000, INC. American Consumer Products, Inc. has approximately 2.5
million shares outstanding, resulting in a total potential value for the
transaction of about $13.5 million. VISTA 2000, INC. has on hand cash funds
needed to complete the transaction as a result of a recently completed preferred
convertible stock offering.
The offer is conditional on a tender of at least 51% of outstanding shares on a
fully diluted basis, as well as certain other conditions. The offer will be
filed with the Securities and Exchange Commission not later than Wednesday
August 30, 1995, and is expected to be completed within 30 days. Shareholders
may contact the information agent: Kissel Blake, Inc., 110 Wall Street, New
York, New York; 212-344-6733 or 800-554-7733.
AMERICAN CONSUMER PRODUCTS, INC. manufactures and distributes consumer hardware
products, including key blanks, key related accessories, knives, letters,
numbers and signs, driveway markers, snow shovels and pet products, as well as
gloves and other items through its Boss Manufacturing subsidiary, which are sold
by the Company's national field sales force to hardware, mass merchandise and
DIY retailers across the United States. In addition, the Company's national
field sales organization represents Pawtucket Fasteners for the sale of Sharon
Fastener products (nuts, bolts and screws).
VISTA 2000, INC.'s product line includes a wide range of consumer products
including appliances for personal safety, home security and family health, as
well as housewares and convenience items for general consumer use and in
advertising promotion activities. The products are sold through retailers
nationwide and direct to consumers on television and in magazines.
<PAGE>
This announcement is not an offer to purchase or a solicitation of an offer to
- -----------------------------------------------------------------------------
sell these securities. The offer is made only by the Offer to Purchase dated
- ----------------------------------------------------------------------------
August 30, 1995 and the related Letter of Transmittal which are being mailed to
- -------------------------------------------------------------------------------
shareholders of the Company. The offer is not being made to, nor will tenders
-----------------------------------------------------------------------------
be accepted from, holders of shares of American Consumer Products, Inc. in any
- ------------------------------------------------------------------------------
jurisdiction in which the making or acceptance thereof would not be in
----------------------------------------------------------------------
compliance with the securities or blue sky laws of such jurisdiction.
---------------------------------------------------------------------
NOTICE OF OFFER TO PURCHASE FOR CASH
ALL OUTSTANDING SHARES OF COMMON STOCK OF
AMERICAN CONSUMER PRODUCTS, INC.
AT $5.30 NET PER SHARE BY
VISTA 2000, INC.
Vista 2000, Inc. (NASDAQ:VISTA), a Delaware Corporation (the
"Purchaser"), is offering to purchase all outstanding shares of common stock,
$.10 per value per share (the "Shares"), of American Consumer Products, Inc.
(NASDAQ: ACPI), a Delaware Corporation (the "Company"), that are not owned by
the Purchaser for $5.30 per Share, net to the seller in cash, upon the terms and
subject to the conditions set forth in the Offer to Purchase and in the related
Letter of Transmittal (which together constitute the "Offer"). Tendering
shareholders will not be obligated to pay brokerage commissions or, subject to
Instruction 6 of the Letter of Transmittal, transfer taxes on the purchase of
Shares by the Purchaser.
The Offer is conditioned upon at least 51% of the outstanding shares on
a fully diluted basis of the Company being properly tendered, and not withdrawn,
by midnight, New York City Time, on September 28, 1995.
The Offer expires at midnight, New York City Time, on September 28,
1995, unless extended. The Purchaser may extend the expiration date or the date
by which Shares must be tendered at any time (or from time to time) by giving
oral or written notice to the Depositary.
Subject to the terms of the Offer, the Purchaser will purchase all
Shares properly tendered (and not withdrawn) prior to the expiration of the
Offer, and will purchase such shares by the deposit of the purchase price with
the Depositary on behalf of the tendering shareholder.
Tenders of Shares will be irrevocable, except that Shares may be
withdrawn (by written notice received by the Depositary) at any time prior to
midnight, New York city Time, on September 28, 1995 and, unless theretofore
purchased by the Purchaser, may also be withdrawn after October 29, 1995. For a
withdrawal to be effective, a written, telegraphic,telex or facsimile
transmission notice of withdrawal must be timely received by the Depositary at
its address set forth on the back cover of the Offer to Purchase. Any such
notice of withdrawal must specify the name of the person who tendered the Shares
to be withdrawn, the number of Shares to be withdrawn and the name of the
registered holder if different from the name of the person who tendered the
Shares. If certificates for Shares to be withdrawn have been delivered or
otherwise identified to the Depositary, then prior to the physical release of
such certificates, the serial numbers shown on such certificates must be
submitted to the Depositary and, unless such Shares have been tendered for the
account of an Eligible Institution (as defined in the Offer to Purchase), the
signatures on the notice of withdrawal must be guaranteed by an Eligible
Institution. If Shares have been tendered pursuant to the procedures for book-
entry transfer set forth in Section 3 of the Offer to Purchase, the notice of
withdrawal must also specify the name and number of the account at the
applicable Book-Entry Transfer Facility (as defined in the Offer to Purchase) to
be credited with the withdrawn Shares. All questions as to the form and validity
(including time of receipt) of a notice of withdrawal will be determined by the
Purchaser, in its sole discretion, and its determination shall be final and
binding on all parties.
The Purchaser will not pay any fee or commission to any broker, dealer
or other person in connection with the solicitation of tenders of Shares
pursuant to the Offer.
THE OFFER TO PURCHASE AND THE LETTER OF TRANSMITTAL CONTAIN IMPORTANT
INFORMATION WHICH SHOULD BE READ BEFORE ANY DECISION IS MADE WITH RESPECT TO THE
OFFER.
Tenders may be made only by a duly executed Letter of Transmittal. The
Purchaser has requested the Company to provide its lists of stockholders and
security position listings for the purpose of the Purchaser's dissemination of
the Offer to Purchaser and the related Letter of Transmittal to holders of
Shares. The Purchaser intends to ensure that the Offer to Purchase and Letter of
Transmittal, containing information including that required by Rule 14d-
6(e)(1)(vii) under the Securities Exchange Act of 1934 (which is incorporated
herein by this reference), will be mailed to the record holders of Shares and
will be furnished to brokers, banks and similar persons whose name appears, or
whose nominee appears on the shareholder list or, if applicable, who are listed
as participants in a clearing agency's security position listing for subsequent
transmittal to beneficial owners of Shares.
Copies of the Offer to Purchase and the Letter of Transmittal may be
obtained, at the Purchaser's expense, from the Depositary or Information Agent
as set forth below.
The Depositary for the Offer is: The Information Agent for the Offer is:
- -------------------------------- ---------------------------------------
HARRIS TRUST COMPANY OF NEW YORK KISSEL BLAKE INC.
77 Water Street, 4th Floor 110 Wall Street
New York, New York 10005 New York, New York 10005
(212) 701-7624 Brokers and Banks, please call (212) 344-6733
Call toll free: 1 (800) 554-7733
August 30, 1995
<PAGE>
ACPI AMERICAN CONSUMER PRODUCTS, INC.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
August 22, 1995
Mr. Richard P. Smyth, Chairman & CEO
VISTA 2000 Inc.
11660 Alpharetta Highway, #340
Roswell, GA 30076
Dear Mr. Smyth:
In connection with your consideration of the possible merger or
purchase transaction (the "Acquisition Transaction") involving
American Consumer Products, Inc. and its subsidiaries (the
"Company"), you have requested access to certain information. In
consideration for and as a condition to our furnishing such
information to you, you acknowledge the confidential and
proprietary nature of the Evaluation Material (as defined below)
and agree to hold and keep the same as provided in this letter
agreement. As used herein, the term "Evaluation Material" shall
mean any and all financial, technical, commercial or other
information concerning the business operations, assets of, or
relating to, the Company that has been or may hereafter be
provided or shown to you or your officers, directors, employees,
attorneys, accountants, auditors, advisors or agents
(collectively, "your Representatives"), irrespective of the form
of the communication, by the Company or its representatives or
agents (including attorneys and financial advisors), and also
includes all notes, analyses, abstracts, compilations, studies or
other material prepared by you or your Representatives containing
or based, in whole or in part, on any information provided or
shown by the Company or by its representatives or agents, and all
nonpublic information obtained by visiting the facilities of the
Company or discussing the Acquisition Transaction with the
Company.
The term "Evaluation Material" does not include information which
(i) was or becomes generally available to the public other than as
a result of a disclosure by you or your Representatives, (ii) was
available to you on a non-confidential basis prior to its
disclosure to you by the Company or its representatives or agents,
provided that the source of such information is not bound by a
confidentiality agreement with the Company or its representatives
or agents or otherwise prohibited from transmitting the
information to you or your Representatives by a contractual, legal
or fiduciary obligation, or (iii) becomes available to you on a
non-confidential basis from a source other than the Company or its
representatives or agents, provided that the source is not bound
by a confidentiality agreement with the Company or its
representatives or agents or otherwise prohibited from
transmitting the information to you or your Representatives by a
contractual, legal or fiduciary obligation.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE>
Mr. Richard P. Smyth
Page Two
August 2, 1995
As a condition to your being furnished with the Evaluation
Material, you agree that you will use the Evaluation Material
solely for evaluating the Acquisition Transaction and that you
will keep the Evaluation Material confidential. It is understood
that you may disclose any of the Evaluation Material to those of
your Representatives who require such material for the purposes of
evaluating the Acquisition Transaction (provided that you shall
maintain records of the persons to whom the Evaluation Material is
distributed, that such Representatives shall be informed by you of
the confidential nature of the Evaluation Material, shall be
provided with a copy of this letter agreement and be bound by the
terms and conditions hereof as if they were a party hereto, and
you shall be responsible for any violation thereof by any of
them.) You agree that the Evaluation Material shall not be used by
you or your Representatives in any way detrimental to the Company,
as solely determined by the management of the Company.
Without the prior written consent of the Company or as otherwise
provided herein, neither you nor your Representatives shall
disclose to any person (i) the fact that the Evaluation Material
has been made available to you or that you have inspected any
portion of the Evaluation Material, (ii) the fact that any
discussions or negotiations are taking place concerning a possible
Acquisition Transaction, (ii) that you have or have not made a
proposal, bid or offer to acquire the Company or (iv) any of the
terms, conditions or other facts with respect to any of the
foregoing. The term "person" as used in this letter
agreement shall be broadly interpreted to include, without
limitation, any corporation, company, partnership or other entity
or any individual.
In the event that you or any of your Representatives are requested
or become legally compelled (by oral questions, interrogatories,
requests for information or documents, subpoena, civil
investigative demand or similar process) to make any disclosure
which is prohibited or otherwise constrained by this letter
agreement, you agree that you or such Representative, as the case
may be, will provide the Company with prompt oral and written
notice of such request(s) so that it may seek an appropriate
protective order or other appropriate remedy. You agree to
cooperate with the Company, at its expense, in any efforts to
obtain such remedies, but this provision shall not be construed to
require you to undertake litigation or other legal proceedings on
your own behalf. In the event that such protective order or other
remedy is not obtained, or that the Company grants a waiver
hereunder, you or such Representative may furnish that portion
(and only that portion) of the Evaluation Material which, in the
written opinion of counsel addressed to the Company and reasonably
acceptable to the Company, you are legally compelled to disclose;
provided, however, that you may disclose only that portion of
-----------------
such information or matter that is legally required to be disclosed
and you shall use your best effort to obtain reliable assurance that
confidential treatment will be accorded any Evaluation Material so
disclosed.
<PAGE>
Mr. Richard P. Smyth
Page Three
August 2, 1995
Without the prior written consent of the Company (i) neither you
nor those of your Representatives who are aware of the Evaluation
Material and/or the possibility of an Acquisition Transaction will
initiate or cause to be initiated (other than through the Company)
any communications with any customer, supplier, employee,
director, officer, agent or shareholder of the Company concerning
the Evaluation Material or any possible transaction, and (ii) you
will not, for a period of three (3) years from the date of this
letter agreement, (A) solicit, or cause to be solicited, the
employment of or employ any person who is now employed by the
Company, (B) solicit business from any customer or supplier of the
Company that you had not contacted prior to obtaining Evaluation
Material, or (C) solicit, entertain discussions with respect to,
or participate in a transaction involving an investment in, or an
acquisition or, the stock or assets of the Company.
If you determine that you do not wish to proceed with an
Acquisition Transaction, you shall promptly notify the Company of
such decision. At such time, or at any time upon the written
request of the Company, you shall promptly deliver to the Company
all documents or other matter furnished by the Company or its
representatives or agents to you or your Representatives
constituting Evaluation Material, together with all copies thereof
in the possession of you or your Representatives without retaining
a copy of any such material. In the event of such request, all
other documents or other matter constituting Evaluation Material
in the possession of you or your Representatives shall be
destroyed, with any such destruction confirmed by you in writing
to the Company.
You understand that neither the Company nor its representatives or agents
makes any representation or warranty (express or implied) as to the accuracy
or completeness of the Evaluation Material. You agree that neither the
Company nor its representatives or agents shall have any liability to you or
any of your Representatives resulting from the use of the Evaluation
Material by you or such Representatives. Only these representations and
warranties that may be made to you in a definitive written agreement for an
Acquisition Transaction, when, as and if executed and subject to such
limitations and restrictions as may be specified herein, shall have any
legal effect, and you agree that, if you determine to engage in an
Acquisition Transaction, such determination will be based solely on the
terms of such written agreement and on your own investigation, analysis and
assessment of the business to be acquired. The agreements set forth herein
may be modified or waived only by a separate writing signed by the Company
and you expressly so modifying or waiving such agreements.
You hereby agree to indemnify and hold harmless the Company from
any damages, loss, cost or liability (including legal fees and the
cost of enforcing this indemnity) arising out of or resulting from
any unauthorized use or disclosure by you or your Representatives
of the Evaluation Material. You also acknowledge that money
damages would be an insufficient remedy for any breach of this
letter agreement by you or your Representatives and any
<PAGE>
Mr. Richard P. Smyth
Page Four
August 2, 1995
such breach would cause the Company irreparable harm. Accordingly,
you also agree that in the event of any breach of threatened
breach of this letter agreement, the Company shall be entitled,
without the requirement of posting a bond or other security, to
equitable relief, including injunctive relief and specific
performance. such remedy shall not be the exclusive remedy for any
breach of this letter agreement but shall be in addition to all
other remedies available at law or equity to the Company.
It is understood and agreed that no failure or delay by the
Company in exercising any right, power or privilege hereunder
shall operate as a waiver thereof, nor shall any single or partial
exercise thereof preclude any other or further exercise thereof or
the exercise of any right, power or privilege hereunder.
The invalidity or unenforceability of any provision of this letter agreement
shall not affect the validity or enforceability of any other provisions of
this letter agreement, which shall remain in full force and effect. If any
of the covenants or provisions of this agreement shall be deemed to be
unenforceable by reason of its extent, duration, scope or otherwise, then
the parties contemplate that the court making such determination shall
reduce such extent, duration, scope or other provision, and enforce them in
their reduced form for all purposes contemplated by this Agreement. This
Agreement may be executed in counterparts, each of which shall be deemed an
original, but all of which together shall constitute one and the same
instrument.
This Agreement embodies the entire understanding and agreement
between the parties with respect to the Evaluation Material and
the Acquisition Transaction and supersedes any prior
understandings and agreements relating thereto. No other contract
or agreement among the parties hereto relating to the Acquisition
Transaction exists. No contract or agreement providing for the
Acquisition Transaction, and no legal obligation of any kind
whatsoever relating to the Acquisition Transaction, except as to
the matters specifically agreed to herein, will be deemed to exist
and either you or the Company may terminate discussions or
negotiations regarding a possible Acquisition Transaction at any
time without any liability except as agreed to herein, unless and
until a binding commitment agreement or an Acquisition Transaction
Agreement has been executed and delivered.
The Company reserves the right to assign all rights under this
letter agreement, including, without limitation, their right to
enforce all of the terms contained herein. You agree and consent to
personal jurisdiction and service and value in any federal or
state court within the State of Ohio having subject matter
jurisdiction, for the purposes of any action, suit or proceeding
arising out of or relating to this letter agreement. This letter
agreement shall be governed by and construed in accordance with
the laws of the State of Ohio.
<PAGE>
Mr. Richard P. Smyth
Page Five
August 2, 1995
If you are in agreement with the foregoing, please sign and return one
copy of this letter agreement, which thereupon will constitute our
agreement with respect to the subject matter hereof.
Very truly yours,
AMERICAN CONSUMER PRODUCTS, INC.
Stephan W. Cole
President
ACCEPTED and AGREED to as of the day and year first above written:
VISTA 2000 Inc.
Richard P. Smyth
Chairman & CEO
<PAGE>
[LETTERHEAD OF AMERICAN CONSUMER PRODUCTS, INC. APPEARS HERE]
ACPI hereby waives the provisions of the fourth and sixth paragraphs of
that certain confidentiality letter agreement dated August 2, 1995 by and
between American Consumer Products, Inc. and Vista 2000, Inc., so that Vista may
initiate a cash tender offer for the common stock of ACPI at $5.30 per share and
make all filings and announcements that may be necessary or desirable in
connection therewith.
The foregoing shall not, however, constitute approval by ACPI or its
board of directors of the purchase and acceptance by Vista of the shares which
are the subject of the tender offer.
AMERICAN CONSUMER PRODUCTS, INC.
By: /s/ S.W. Cole
----------------------------
Title: President
-------------------------
Date: August 29, 1995
--------------------------
<PAGE>
ESCROW AGREEMENT
----------------
THIS ESCROW AGREEMENT (the "Agreement") is made and entered into as of the
____ day of August, 1995 by and among VISTA 2000, INC., a Delaware corporation
("VISTA"), AMERICAN CONSUMER PRODUCTS, INC., a Delaware corporation ("ACPI"),
and the ESCROW AGENT named herein.
WHEREAS, VISTA and ACPI have engaged in preliminary discussions regarding a
possible acquisition of ACPI by VISTA through the vehicle of a cash tender offer
at $5.30 per share (the "Tender Offer"); and
WHEREAS, VISTA is willing to demonstrate to ACPI its ability to fund the
Tender Offer and its ability to undertake to file all necessary Tender Offer
documents with appropriate governmental agencies within a reasonable period of
time; and
WHEREAS, the parties have agreed that the Escrowed Funds (as hereinafter
defined) shall be held in escrow by the Escrow Agent (as hereinafter defined) in
accordance with the terms and conditions of this Agreement.
NOW, THEREFORE, in consideration of Ten Dollars ($10.00) paid in hand, the
promises and the mutual covenants, agreements, representations and warranties
contained herein, and other good and valuable consideration, the receipt,
adequacy and sufficiency of which are hereby acknowledged, the parties hereto
hereby agree as follows:
SECTION 1
DEFINITIONS
-----------
For purposes of this Agreement, the following terms shall have the
following meanings:
1.1 "ACPI Dispute Notice" shall have the meaning ascribed in Section 6.4
hereof.
1.2 "Notice of Claim for Disbursement" shall have the meaning ascribed in
Section 6.1 hereof.
1.3 "Escrow Agent" shall mean Grier Newlin, a resident of the State of
Georgia.
1.4 "Escrowed Funds" shall mean the sum of Five Hundred Thousand and
No/100 Dollars ($500,000.00), deposited by VISTA with Escrow Agent.
1.5 "VISTA Dispute Notice" shall have the meaning ascribed in Section 6.2
hereof.
<PAGE>
SECTION 2
ESCROW DEPOSIT AND FEE
----------------------
2.1 Contemporaneously herewith, Purchaser has delivered to the Escrow
Agent the Escrowed Funds.
2.2 The Escrow Agent hereby accepts the Escrowed Funds in escrow and
agrees to hold and keep same in accordance with the terms and conditions hereof
and for the uses and purposes stated herein, and to disburse the Escrowed Funds
subject to the terms of this Agreement.
2.3 The fee of the Escrow Agent of its services hereunder shall be One
Thousand and No/100 Dollars ($1,000.00), which amount is due and payable in cash
upon execution hereof and shall be paid by VISTA.
SECTION 3
CONDITIONS FOR DISBURSEMENT OF ESCROWED FUNDS
---------------------------------------------
3.1 The Escrowed Funds (together with all interest earned thereon) or, in
the event of clause (iii) below, a portion of the Escrowed Funds, shall be
disbursed to ACPI if (i) a Tender Offer Statement on Schedule 14D-1 for the
purchase of the shares of Common Stock of ACPI is not filed by VISTA with the
Securities and Exchange Commission (the "SEC") within forty-five (45) days from
the date hereof; (ii) VISTA is unable to purchase shares tendered by ACPI
shareholders pursuant to the Tender Offer solely due to VISTA's having
insufficient cash funds on hand for such purchases; or (iii) ACPI becomes
entitled to reimbursement of certain expenses pursuant to Section 8 hereof.
3.2 The Escrowed Funds (together with all interest earned thereon) shall
be disbursed to VISTA, if not earlier disbursed to ACPI pursuant to Section 3.1
hereof, in the event of a breach of Section 4 hereof by ACPI or upon termination
of this Agreement.
SECTION 4
"NO SHOP" COVENANT
------------------
4.1 During the forty-five (45) day period following the execution of this
Agreement (the "No Shop Period"), ACPI shall not, and shall use its best efforts
to ensure that its officers, directors, employees, agents and representatives
(including, without limitation, any investment banker, attorney or accountant
retained by it) do not, initiate or solicit, directly or indirectly, any
inquiries or the making or implementation of any proposal or offer (including,
without limitation, any proposal or offer to ACPI's stockholders) with respect
to a merger, acquisition, consolidation, business combination, or similar
transaction involving ACPI, or any purchase of all or any significant portion of
the assets or equity of ACPI.
2
<PAGE>
4.2 During the No Shop Period, ACPI will promptly advise VISTA orally and
in writing of any Alternate Proposal (as hereinafter defined).
4.3 Nothing in this Section 4 shall be construed to prevent or hinder ACPI
from acting to fully and fairly evaluate and analyze the Tender Offer or in
making any recommendation concerning the Tender Offer to ACPI's shareholders or
prevent ACPI or its officers, directors, employees, agents and representatives
(including, without limitation, any investment banker, attorney or accountant
retained by it) from furnishing information to or entering into discussions or
negotiations with any person or entity that makes an unsolicited proposal (or
expresses an unsolicited indication of interest in making a proposal) to acquire
the Company pursuant to a merger, consolidation, share exchange, purchase of a
substantial portion of the assets, business combination or other similar
transaction, so long as such proposal (an "Alternate Proposal") (or unsolicited
indication of interest in making a proposal) did not arise through a breach of
Section 4.1 of this Agreement.
SECTION 5
ESCROWED FUNDS
--------------
5.1 Upon execution hereof, VISTA will transfer and deliver to the Escrow
Agent for holding pursuant hereto the Escrowed Funds, in immediately available
funds.
5.2 Pending disbursement in accordance with the terms hereof, the Escrowed
Funds shall be held by the Escrow Agent and invested in an interest-bearing
trust account.
5.3 The Escrowed Funds shall be held by the Escrow Agent in his possession
until directed hereunder to disburse such Escrowed Funds in accordance with
Section 6 hereof or until termination of this Agreement.
5.4 All payments made from the Escrowed Funds pursuant to this Agreement
shall be made by wire transfer in immediately available funds to an account
designated by the party to whom such payments are to be made, and shall be paid
within two (2) business days following the date on which the rights to receive
such amounts shall be established pursuant to the terms of this Agreement.
SECTION 6
NOTICE TO DISBURSE
------------------
6.1 In the event one of the conditions set forth in Section 3.1 hereof
occurs, pursuant to which Escrow Agent is required to disburse the Escrowed
Funds to ACPI, ACPI may deliver a Notice of Claim for Disbursement to Escrow
Agent setting forth in reasonable detail the nature of the claim, together with
proof that it has mailed a copy of such Notice to VISTA no later than the date
such Notice was mailed to Escrow Agent. The copy of the Notice of Claim for
Disbursement to VISTA must be sent by registered mail or certified mail, return
receipt requested, with a copy sent by facsimile.
3
<PAGE>
6.2 If Escrow Agent has not received a written notice from VISTA (the
"VISTA Dispute Notice") stating that it disputes the validity of the claim set
forth in ACPI's Notice of Claim for Disbursement, within ten (10) days after
receipt by Escrow Agent of the Notice of Claim for Disbursement, Escrow Agent
shall disburse the Escrowed Funds to ACPI.
6.3 In the event there is a breach of Section 4 of this Agreement by
ACPI, pursuant to which Escrow Agent is required, pursuant to Section 3.2
hereof, to disburse the Escrowed Funds to VISTA, VISTA may deliver a Notice of
Claim for Disbursement to Escrow Agent setting forth in reasonable detail the
nature of the claim, together with proof that it has mailed a copy of such
Notice to VISTA no later than the date such Notice was mailed to Escrow Agent.
The copy of the Notice of Claim for Disbursement to VISTA must be sent by
registered mail or certified mail, return receipt requested, with a copy sent by
facsimile.
6.4 If Escrow Agent has not received a written notice from ACPI (the "ACPI
Dispute Notice") stating that it disputes the validity of VISTA's claim, within
ten (10) days after receipt by Escrow Agent of the Notice of Claim for
Disbursement, Escrow Agent shall disburse the Escrowed Funds to VISTA.
6.5 If Escrow Agent receives an ACPI Dispute Notice or VISTA Dispute
Notice, the Escrow Agent shall retain the Escrowed Funds (in the interest-
bearing account) pending final resolution of the dispute either by mutual
written agreement of ACPI and Vista or by a final unappealable court
determination or, upon receipt of joint written instructions from ACPI and Vista
or pursuant to a valid court order, be entitled to tender into the registry or
custody of any court of competent jurisdiction the Escrowed Funds.
SECTION 7
ESCROW AGENT MATTERS
--------------------
7.1 VISTA and ACPI, jointly and severally, agree to indemnify and hold
harmless the Escrow Agent against any and all costs, losses, claims, damages,
liabilities, expenses (including reasonable costs of investigation, court costs
and attorneys' fees and disbursements) which may be imposed upon the Escrow
Agent in connection with its acceptance of appointment as Escrow Agent
hereunder, including any litigation arising from this Agreement or involving the
subject matter hereof, unless such costs, losses, claims, damages, liabilities
or expenses are caused by the gross negligence or willful default of the Escrow
Agent, and all such costs, expenses and disbursements will be for the account of
and will be borne and paid by VISTA and ACPI as a condition to the termination
of this Agreement. As between themselves, VISTA and ACPI agree that the cost of
this indemnification shall be borne equally by them.
7.2 The Escrow Agent will be liable only to hold and disburse the Escrowed
Funds in accordance with the provisions of this Agreement; it being expressly
understood that by acceptance of this Agreement the Escrow Agent is acting in
the capacity of a depository only, and will not be liable or responsible to
anyone for any claims, damages, losses, liabilities or expenses unless such
damages, losses or expenses are caused by the gross negligence or willful
default of the Escrow Agent.
4
<PAGE>
7.3 The Escrow Agent will not incur any liability with respect to (i) any
action taken or omitted in good faith upon the advice of its counsel with
respect to any questions relating to the duties and responsibilities of the
Escrow Agent under this Agreement or (ii) any action taken or omitted in
reliance upon any instrument, including any written instructions provided for
herein, not only concerning the due execution of such instrument, or the
identity or authority of any person executing such instrument, or the validity
and effectiveness of such instrument, but also concerning the truth and accuracy
of any information contained therein; provided that the Escrow Agent in good
faith believes such instrument to be genuine, to have been signed by a proper
person or persons, and to conform to the provisions of this Agreement.
7.4 The Escrow Agent will make his books and records with respect to the
Escrowed Funds available for examination by VISTA and ACPI, or their duly
authorized employees, agents and representatives, during normal business hours,
and will deliver to VISTA and ACPI all information reasonably requested by
either of them concerning the Escrowed Funds.
SECTION 8
FEES AND EXPENSES
-----------------
If a Tender Offer Statement is filed with the SEC but the Tender Offer is
not consummated for any reason other than (i) less than fifty-one percent (51%)
of ACPI's shares, on a fully-diluted basis, being tendered pursuant to the
Tender Offer; or (ii) VISTA determining not to proceed with the Tender Offer due
to a written statement or disclosure of ACPI containing an untrue statement of a
material fact which material fact may have an adverse effect on the
Company, VISTA shall reimburse ACPI for up to Two Hundred Thousand Dollars
($200,000) of fees and expenses of ACPI's outside legal counsel, independent
certified public accountants and outside consultants to the extent such fees and
expenses are actually incurred by ACPI for services specifically attributable to
the Tender Offer. VISTA shall not be required to make any reimbursement with
respect to any employee of ACPI (whether in-house legal counsel, in-house
accountants, or otherwise). VISTA shall make payments with respect to such
reimbursement within thirty (30) days of its receipt from such parties of
invoices setting forth and describing in detail all fees, expenses and other
charges of such parties.
SECTION 9
MISCELLANEOUS
-------------
9.1 All notices and other communications under this Agreement must be in
writing and shall be deemed to have been duly given or delivered if delivered
personally or sent by telex, telegram, or telecopy (receipt confirmed) or one
day after being sent by overnight delivery service or three days after being
mailed by certified or registered mail, return receipt requested, with first
class postage prepaid, to the following addresses or to any other address that a
party to this Agreement shall have last designated by notice to the other
parties:
5
<PAGE>
(a) To ACPI:
31100 Solon Road
Solon, Ohio 44139
Attention: Stephan W. Cole, President
Telecopy: (216) 248-8051
with a copy to:
Thompson, Hine & Flory
1100 National City Bank Building
Cleveland, Ohio 44141
Attention: Gregory A. Smith, Esq.
Telecopy: (216) 566-5583
(b) To VISTA:
11660 Alpharetta Highway, Suite 330
Roswell, Georgia 30076
Attention: Mr. Arnold Johns, President
Telecopy: (404) 751-8808
with a copy to:
Nelson, Mullins, Riley & Scarborough, L.L.P.
400 Colony Square
Suite 2200
1201 Peachtree Street
Atlanta, Georgia 30361
Attention: Steven A. Cunningham, Esq.
Telecopy: (404) 817-6050
(c) To Escrow Agent:
Grier Newlin, Esq.
Tower Place - Suite 2000
3340 Peachtree Road, N.E.
Atlanta, Georgia 30326
Telecopy: (404) 233-9060
Any party may change its address for Notices by giving written Notice
setting forth such new address.
9.2 This Agreement may be amended only by an instrument in writing
executed by VISTA, ACPI and the Escrow Agent. Any officer of VISTA or ACPI may
by a signed writing
6
<PAGE>
give any consent, take any action, waive any inaccuracies in representations or
other compliance by any other party to any of the covenants or conditions
herein, modify the terms of this Agreement or take any other action deemed by
him to be necessary or appropriate to consummate the transactions contemplated
by this Agreement.
9.3 This Agreement may be executed in any number of counterparts, each of
which shall be deemed an original, but all of which shall constitute one and the
same instrument. The headings herein set out are for convenience of reference
only and shall not be deemed a part of this Agreement.
9.4 This Agreement shall be binding upon and shall inure to the benefit of
the parties hereto and their respective heirs, successors and assigns.
9.5 The parties to this Agreement agree to execute and deliver any and all
additional documents requested by any party hereto to effectuate the purposes of
this Agreement.
9.6 This Agreement (other than Section 8, which shall continue in favor
until satisfaction of the parties' respective obligations therein contained)
shall terminate at such time as all of the Escrowed Funds are distributed by the
Escrow Agent, or November 30, 1995, whichever first occurs.
9.7 The validity and effect of this Agreement shall be governed by and
construed and enforced in accordance with the laws of the State of Georgia
(without regard to its rules of conflicts of laws).
IN WITNESS WHEREOF, the parties have executed this Agreement as of the day
and year first above written.
AMERICAN CONSUMER PRODUCTS, INC.
ATTEST: By: /s/ Stephan W. Cole
_____________________________
___________________________________________
[CORPORATE SEAL]
7
<PAGE>
VISTA 2000, INC.
ATTEST: By: /s/ RICHARD P. SMYTH
___________________________________________
_________________________________
[CORPORATE SEAL]
ESCROW AGENT
/s/ GRIER NEWLIN
_______________________________________________
8
<PAGE>
EMPLOYMENT AGREEMENT
This Employment Agreement (the "Agreement") by and between AMERICAN
CONSUMER PRODUCTS, INC., a Delaware corporation (the "Company"), and STEPHAN W.
COLE (the "Executive") is made and entered into in Cleveland, Ohio on the 29th
day of August, 1995 and shall become effective only upon the purchase by Vista
2000, Inc. ("Vista") of the common stock of the Company pursuant to the tender
offer to be commenced by Vista within twenty (20) days form the date hereof (the
"Effective Date").
SECTION 1
TERMS OF EMPLOYMENT
1.1 Employment. The Company hereby employs the Executive as the Chief
Executive Officer of the Company for and during the term hereof, subject to the
direction of the Board of Directors of the Company and the terms and conditions
hereof. The Executive hereby accepts employment under the terms and conditions
set forth in this Agreement.
1.2 Duties of Executive. The Executive shall perform in the capacity
described in Section 1.1 hereof and shall have such duties, responsibilities,
and authorities as are designated for such offices pursuant to the Bylaws, as
amended and restated, of the Company, and as may be reasonably assigned to him
from time to time by the Board of Directors of the Company; provided, however,
the Executive shall, during the term hereof, continuously have and retain such
duties, responsibilities, and authorities at least as significant in scope and
substance as the duties, responsibilities, and authorities required of the
Executive's offices and position with the Company as of the Effective Date. The
Executive agrees to devote his full time during normal business hours, best
efforts, abilities, knowledge and experience to the faithful performance of the
duties, responsibilities, and authorities which may be reasonably assigned to
him and which are consistent with his executive offices under Section 1.1 of
this Agreement. Notwithstanding the preceding, the Executive may, without being
in violation of his obligations hereunder, serve on corporate, civic or
charitable boards or committees and manage personal investments as of the date
hereof, provided the Executive shall use his best efforts to pursue such
activities in such a manner so that such activities shall not prevent the
Executive from fulfilling his obligations to the Company hereunder.
1.3 Term. This Agreement shall become effective as of the Effective Date
and shall continue in force and effect for three (3) years from the effective
date of this Agreement, unless sooner terminated as provided in Section 1.6
hereof or renewed or extended by written agreement between the Company and the
Executive pursuant to terms and conditions mutually acceptable to each.
1.4 Compensation. The Company shall pay the Executive compensation for
services rendered by the Executive under the Agreement as follows:
(a) Minimum Compensation. On a bi-monthly basis, the Executive will
receive from the Company at least $11,458.34 less local, state and federal taxes
and other applicable
EMPLOYMENT AGREEMENT Page 1 of 10
<PAGE>
withholdings. This minimum compensation shall be made up of Base Salary,
advances on Additional Compensation and advances on Bonus Compensation as
defined below.
(b) Base Salary. The Executive's salary ("Base Salary") shall be
$150,000.00 and it will be adjusted annually to take into account increases in
the cost of living.
(c) Additional Compensation. The Executive shall receive additional
compensation ("Additional Compensation") by participating in an annual bonus
pool for executives of the Company in an amount equal to ten percent (10%) of
pre-tax profits of the Company for each fiscal year during the term of this
Agreement. The Executive's percentage shall be determined by the Board of
Directors or the Compensation Committee, if there is one.
(d) Bonus Compensation. The Company may also provide to the Executive a
bonus ("Bonus Compensation") in an amount determined by the Board of Directors
of the Company or its Compensation Committee, if one exists.
(e) Annual Adjustment. Should the advances made to the Executive, during
the course of the fiscal year, on Additional Compensation and Bonus Compensation
be less than that which he is entitled to under the Additional Compensation
program and/or the Bonus Compensation program, the Company shall, within fifteen
(15) days after the completion of the audit of the Company's financial
statements for said fiscal year, remit the difference to the Executive. Should
the advances exceed that to which the Executive is entitled, the Executive shall
keep the excess and no set-off by the Company will be made.
(f) Stock Options. The Executive shall be eligible to participate in the
Company's 1993 Incentive Stock Option Plan, a copy of which is attached hereto
as Exhibit "A" and by this reference made a part hereof. Furthermore,
-----------
concurrently with execution of this Agreement by both parties, the Executive
will be delivered a stock option in the form attached hereto as Exhibit "B" and
-----------
by this reference made a part hereof.
1.5 Employment Benefits. In addition to the Salary and any Bonus
Compensation payable to the Executive hereunder, the Executive shall be entitled
to the following benefits upon satisfaction by the Executive of the eligibility
requirements therefor, subject to the following limitations:
(a) Sick Leave Benefits and Disability Insurance. Unless this Agreement is
terminated pursuant to the provisions of Section 1.6(b) hereof, the Executive
shall be paid sick leave benefits at his then prevailing salary rate during his
absence due to illness or other incapacity, reduced by the amount, if any, of
worker's compensation, social security entitlement, or disability benefits, if
any, under the Company's group disability insurance plan, if any.
(b) Life Insurance. The Company, at its expense, shall provide the
Executive, life insurance benefits under and consistent with any group term life
insurance plan, as provided by the Company prior to June 30, 1995, or improved
coverages which the Company, at its election, may adopt. Notwithstanding the
preceding sentence, it is understood and agreed that the Company will obtain and
maintain during the term of this Agreement, at its expense, a life
EMPLOYMENT AGREEMENT Page 2 of 10
<PAGE>
insurance policy, in the face amount of $1,000,000 (the Company and the
Executive or a designee of the Executive to be equal co-beneficiaries
thereunder).
(c) Hospitalization, Accident, Major Medical and Dental Insurance. The
Company, at its own expense, shall provide the Executive and all dependents of
the Executive with group hospitalization, group accident, major medical, group
disability, and dental insurance in amounts of coverage comparable to the
coverage provided to the Executive on June 30, 1995. The Executive shall be
responsible for any health insurance premium with respect to himself over $600
per month. The Company agrees to provide a Medical and Dental Reimbursement
Plan substantially in the form attached hereto as Exhibit "C" and by this
-----------
reference made a part hereof.
(d) Vacations. The Executive shall be entitled to a reasonable paid
vacation equal to that provided to other Executives, according to Company
policy, as determined by the Board of Directors of the Company, exclusive of
holidays and weekends, which vacation shall be taken by the Executive in
accordance with the business requirements of the Company at the time and its
personnel policies then in effect relative to this subject. The Executive shall
also be entitled to all paid holidays given by the Company to its executive
employees.
(e) Disability. The Company shall continue paying disability premiums (up
to $6,000 per year) during the term hereof for any disability policy covering
the Executive in force on June 30, 1995.
(f) Working Facilities. During the term of this Agreement, the Company
shall provide, at its expense, adequate office space, furniture, equipment,
supplies and personnel (including professional, clerical, support and other
personnel) consistent with the past practices of the Company as shall be
suitable in the opinion of the Board of Directors of the Company to the
Executive's position and adequate for the Executive's use in performing his
duties and responsibilities under this Agreement.
(g) Personal Vehicle. The Company shall pay to the Employee a monthly
vehicle allowance of Six Hundred and No/100 Dollars ($600.00), plus all expenses
incurred by the Employee in connection with the operation of the automobile for
the conduct of the affairs of the Company, including the cost of a cellular
telephone.
(h) Directors' and Officers' Liability Insurance. The Executive shall be
entitled to the protection of any directors' and officers' liability insurance
policies the Company may elect to maintain generally for the benefit of its
directors and officers (to the extent the Executive is eligible for such
coverage) in an amount and with such coverage as provided to directors and
executives of VISTA 2000, Inc., a Delaware corporation ("VISTA")
(i) Other Employment Benefits. As an employee of the Company, the
Executive shall participate in and receive such other fringe benefits as may be
in effect from time to time for employees of the Company, whether or not
specifically enumerated herein and whether or
EMPLOYMENT AGREEMENT Page 3 of 10
<PAGE>
not through any written plan or arrangement, upon satisfaction by the Executive
of the eligibility requirements therefor.
1.6 Termination. This Agreement and the Executive's employment hereunder
may be terminated without any breach of this Agreement at any time during the
term hereof only by reason of and in accordance with the following provisions:
(a) Death. If the Executive dies during the term of this Agreement and
while in the employ of the Company, this Agreement shall automatically terminate
as of the date of the Executive's death, and the Company shall have no further
liability hereunder to the Executive or his estate except to the extent set
forth in Section 1.7 hereof.
(b) Disability. If, during the term of this Agreement, the Executive
shall be prevented from performing his duties hereunder by reason of becoming
totally disabled as hereinafter defined, then the Company may terminate this
Agreement immediately upon written notice to the Executive without any further
liability hereunder to the Executive except as set forth in Section 1.7(b)
hereof. For purposes of this Agreement, the Executive shall be deemed to have
become totally disabled upon the earlier of: (i) he either receives "total
disability benefits" under (a) Social Security, or (b) the Company's disability
plan, if any (whether funded with insurance or self-funded by the Company), or
(ii) the Board of Directors of the Company, upon the written report of a
qualified physician (after complete examination of the Executive) designated by
the Board of Directors of the Company or its insurers, shall have determined
that the Executive has become physically and/or mentally incapable of performing
his duties under this Agreement for a period of one hundred eighty (180) days or
more and it is unlikely that the Executive will recover within the remaining
term of employment hereunder.
(c) Termination by the Company for Cause. Prior to the expiration of the
term of this Agreement, the Company may discharge the Executive for cause and
terminate this Agreement immediately upon written notice to the Executive
without any further liability hereunder to the Executive or his estate, except
to the extent set forth in Section 1.7(c) hereof. For purposes of this
Agreement, a "discharge for cause" shall mean termination of the Executive upon
written notice to the Executive limited, however, to one or more of the
following reasons:
(1) Fraud, misappropriation or embezzlement by the Executive in connection
with the Company as determined by the affirmative vote of at least a majority of
the Board of Directors of the Company (provided, however, should the Executive
dispute such determination by the Board, then the Company and the Executive
shall enter immediately into binding arbitration pursuant to the Commercial
Arbitration Rules of the American Arbitration Association, each party to be
responsible for its own costs and expenses, including attorneys' fees;
(2) Gross misconduct or willful gross neglect of the Executive's duties as
determined by the affirmative vote of at least a majority of the Board of
Directors of the Company after notice to the Executive of the particular details
thereof and a period of thirty (30) days thereafter within which to cure such
act or acts of gross misconduct or willful gross neglect, and the failure of the
Executive to cure such act or acts within such thirty (30) day period. For
purposes of this paragraph, no act or failure to act on the part of Executive
shall be deemed "willful"
EMPLOYMENT AGREEMENT Page 4 of 10
<PAGE>
unless done, or omitted to be done, by Executive not in good faith and without
reasonable belief that the act or omission of Executive was in the best
interests of the Company;
(3) Conviction for a felony or a crime involving moral turpitude;
(4) Willful and unauthorized disclosure of Trade Secrets (as defined in
Section 1.9 hereof) of the Company;
(d) Termination by the Company with Notice. The Company may terminate this
Agreement for a reason other than as set forth in Subparagraphs (a), (b) or (c)
of this Section 1.6 at any time upon ninety (90) days written notice to the
Executive in which event the Company shall have no further obligations to the
Executive except as set forth in Section 1.7(b) hereof.
(e) Termination by the Executive for Good Reason. The Executive may
terminate this Agreement at any time for Good Reason (as hereinafter defined) in
which event the Company shall have no further liability hereunder to the
Executive except to the extent set forth in Section 1.7(b) hereof. For purposes
of this Agreement, the term "Good Reason" shall mean, without the Executive's
express written consent, the occurrence of any of the following circumstances
(which changes shall constitute a "Change"):
(1) The assignment to the Executive of any duties inconsistent in any
material respect (unless in the nature of a promotion) with the Executive's
position in the Company immediately prior to such Change (including, but not
limited to, the Executive's status, offices and titles), or a significant
adverse alteration or diminution in the nature or status of the Executive's
authority, duties or responsibilities from those in effect immediately prior to
such Change, other than an isolated, insubstantial and inadvertent action that
is fully corrected within five (5) days after receipt of written notice from the
Executive;
(2) Any failure by the Company to comply with any of the provisions of
Sections 1.4 or 1.5 of this Agreement, other than an isolated, insubstantial and
inadvertent action that is fully corrected within five (5) days after receipt of
written notice from the Executive;
(3) Any failure by the Company to comply with any material provision of
this Agreement that has not been cured within ten (10) days after notice of such
noncompliance has been given by the Executive to the Company;
(4) The relocation of the Executive's office outside of a 75-mile radius
of Cleveland, Ohio.
(f) Termination by the Executive with Notice. The Executive may terminate
this Agreement at any time upon ninety (90) days written notice to the Company.
EMPLOYMENT AGREEMENT Page 5 of 10
<PAGE>
1.7 Compensation upon Termination.
(a) Death. In the event the Executive's employment hereunder is
terminated pursuant to the provisions of Section 1.6(a) hereof due to the death
of the Executive, the Company will continue to pay the Executive's estate all
compensation as set forth in Section 1.4 of this Agreement through the remainder
of the calendar year in which the Executive dies. In other words, the Executive
will be treated as if he worked up to and including December 31, following the
date of the Executive's death. In addition, the Company will continue to provide
health insurance, dental insurance, and major medical insurance to the
Executive's family, under the same terms and conditions as it had just prior to
the Executive's death through December 31 of the year in which the Executive
dies after which time the Executive will be entitled to such insurance benefits
as required by law (for example, COBRA benefits).
(b) Disability, Termination by the Company with Notice, and Termination by
the Executive for Good Reason. In the event the Executive's employment
hereunder is terminated pursuant to the provisions of Section 1.6(b), (d) or
(e), the Executive shall be entitled to receive all compensation and benefits
under this Agreement as if his employment had not terminated prior to the
completion of the Agreement's original thirty-six (36) month term.
(c) Cause and Termination by Executive with Notice. In the event that this
Agreement is terminated by the Company pursuant to the provisions of Section
1.6(c) or by the Executive pursuant to the provisions of Section 1.6(f), the
Executive shall be entitled to receive (i) any salary accrued as of the date of
termination of employment, but unpaid pursuant to section 1.4(a) hereof, (ii)
any vacation or sick leave benefits which have accrued as of the date of
termination of employment, but were then unpaid or unused, (iii) any Additional
Compensation earned as of the date of termination of employment, but unpaid, and
(iv) any Bonus Compensation pursuant to a Bonus declared as of the date of
termination, but unpaid. For purposes hereof, the amount of Additional
Compensation considered "earned" shall be determined based upon the reported
pre-tax profits of the Company for the quarter(s) during which the Executive was
actually employed during the year in which termination of employment occurs.
1.8 Protective Covenants. The Executive recognizes that his employment by
the Company is one of the highest trust and confidence because (i) the Executive
will become fully familiar with all aspects of the Company's business and that
of its subsidiaries during the period of his employment with the Company, (ii)
certain information of which the Executive will gain knowledge during his
employment is proprietary and confidential information which is of special and
peculiar value to the Company or its subsidiaries, and (iii) if any such
proprietary and confidential information were imparted to or became known by any
person, including the Executive, engaging in a business in competition with that
of the Company or its subsidiaries, hardship, loss and irreparable injury and
damage could result to the Company or its subsidiaries, the measurement of which
would be difficult if not impossible to ascertain. The Executive further
acknowledges that the Company or its subsidiaries has developed and will
continue to develop unique consumer products and attendant component parts
(collectively, along with any trade secret information of the Company, the
"Trade Secrets"). Therefore, the Executive agrees that it is necessary for the
Company to protect its business and that of its subsidiaries from such
EMPLOYMENT AGREEMENT Page 6 of 10
<PAGE>
damage, and the Executive further agrees that the following covenants constitute
a reasonable and appropriate means, consistent with the best interest of both
the Executive and the Company, to protect the Company or its subsidiaries
against such damage and shall apply to and be binding upon the Executive as
provided herein:
(a) Trade Secrets. The Executive recognizes that his position with the
Company is one of the highest trust and confidence by reason of the Executive's
access to and contact with the Trade Secrets of the Company and its
subsidiaries. The Executive agrees and covenants to use his best efforts and
exercise utmost diligence to protect and safeguard the Trade Secrets of the
Company and its subsidiaries. The Executive further agrees and covenants that,
except as may be required by the Company in connection with this Agreement, or
with the prior written consent of the Company, the Executive shall not, either
during the term of this Agreement or thereafter, directly or indirectly, use for
the Executive's own benefit or for the benefit of another, or disclose,
disseminate, or distribute to another, the Trade Secrets (whether or not
acquired, learned, obtained, or developed by the Executive alone or in
conjunction with others) of the Company or its subsidiaries or of others with
whom the Company or its subsidiaries has a business relationship. All
memoranda, notes, records, documents, or other writings whatsoever made,
compiled, acquired, or received by the Executive during the term of this
Agreement, arising out of, in connection with, or related to the production of
the Company's products and component parts attendant thereto or those of its
subsidiaries are, and shall continue to be, the sole and exclusive property of
the Company or its subsidiaries, as applicable, and shall, together with all
copies thereof and all advertising literature, be returned and delivered to the
Company by the Executive immediately, without demand, upon the termination of
this Agreement, or at any time upon the Company's demand. It is understood and
agreed that the term "Trade Secrets" shall not be deemed to include information
which (i) is public knowledge or become generally available to the public other
than as a result of a disclosure by you; (ii) becomes available to the
Executive, on a non-confidential basis, from a source (other than from the
Company or its agents) who is not bound by a confidentiality agreement with the
Company; or (iii) is in the Executive's possession prior to disclosure to the
Executive by the Company.
(b) Covenant Not to Compete. In the event this Agreement is terminated
pursuant to the provisions of Section 1.6 hereof, or as the result of the
voluntary resignation of the Executive, the Executive hereby covenants and
agrees that for a period of one (1) year following the termination of his
employment hereunder, he will not directly or indirectly, either as an employee,
employer, consultant, agent, principal, partner, stockholder (other than through
ownership of publicly-traded capital stock of a corporation which represents
less than one percent (1%) of the outstanding capital stock of such
corporation), corporate officer, director, investor, financier or in any other
individual or representative capacity, engage or participate in any business
involving the sale or distribution of home, business or personal security or
safety products marketed by the Company on the date this Agreement becomes
effective, including, but not limited to, the sale or distribution of locks and
keys.
(c) Survival of Covenants. Each covenant of the Executive set forth in
this Section 1.8 shall survive the termination of this Agreement and shall be
construed as an agreement
EMPLOYMENT AGREEMENT Page 7 of 10
<PAGE>
independent of any other provision of this Agreement, and the existence of any
claim or cause of action of the Executive against the Company whether predicated
on this Agreement or otherwise shall not constitute a defense to the enforcement
by the Company of said covenant.
(d) Remedies. In the event of breach or threatened breach by the
Executive of any provision of this Section 1.8, the Company shall be entitled to
relief by temporary restraining order, temporary injunction, or permanent
injunction or otherwise, in addition to other legal and equitable relief to
which it may be entitled, including any and all monetary damages which the
Company may incur as a result of said breach, violation or threatened breach or
violation. The Company may pursue any remedy available to it concurrently or
consecutively in any order as to any breach, violation, or threatened breach or
violation, and the pursuit of one of such remedies at any time will not be
deemed an election of remedies or waiver of the right to pursue any other of
such remedies as to such breach, violation, or threatened breach or violation,
or as to any other breach, violation, or threatened breach or violation.
The Executive hereby acknowledges that the Executive's agreement to be
bound by the protective covenants set forth in this Section 1.8 was a material
inducement for the Company entering into this Agreement and agreeing to pay the
Executive the compensation and benefits set forth herein.
SECTION 2. GENERAL PROVISIONS
2.1 Notices. All notices, requests, consents, and other communications
under this Agreement shall be in writing and shall be deemed to have been
delivered on the date personally delivered or on the date deposited in a
receptacle maintained by the United States Postal Service for such purpose,
postage prepaid, by certified mail, return receipt requested, addressed to the
respective parties as follows:
If to the Executive:
_____________________________
_____________________________
_____________________________
If to the Company:
Vista 2000, Inc.
11660 Alpharetta Highway, Suite 330
Roswell, Georgia 30076
Attention: Chief Executive Officer
Either party hereto may designate a different address by providing written
notice of such new address to the other party hereto.
EMPLOYMENT AGREEMENT Page 8 of 10
<PAGE>
2.2 Severability. If any provision contained in this Agreement is
determined to be void, illegal or unenforceable, in whole or in part, then the
other provisions contained herein shall remain in full force and effect as if
the provision which was determined to be void, illegal, or unenforceable had not
been contained herein.
2.3 Waiver, Modification, and Integration. The waiver by any party hereto
of a breach of any provision of this Agreement shall not operate or be construed
as a waiver of any subsequent breach by any party. This instrument contains the
entire agreement of the parties concerning employment and supersedes all prior
and contemporaneous representations, understandings and agreements, either oral
or in writing, between the parties hereto with respect to the employment of the
Executive by the Company and all such prior or contemporaneous representations,
understandings and agreements, both oral and written, are hereby terminated.
This Agreement may not be modified, altered or amended except by written
agreement of the Executive and the Company, subject to the prior approval of the
Board of Directors of the Company.
2.4 Binding Effect. This Agreement shall be binding and effective upon
the Company and its successors and permitted assigns, and upon the Executive,
his heirs and representatives; provided, however, that the Company shall not
assign this Agreement without the written consent of the Executive.
2.5 Choice of Law and Venue. The parties agree that this Agreement is
made and entered into in Cleveland, Ohio and shall be governed by and construed
in accordance with the laws of the State of Ohio, and that any litigation,
special proceeding or other proceeding as between the parties that may be
brought, or arise out of, in connection with or by reason of this Agreement
shall be brought in the applicable state court in and for Cleveland, Ohio which
Court shall be the exclusive courts of jurisdiction and venue.
2.6 Representation of Executive. The Executive hereby represents and
warrants to the Company that he has not previously assumed any obligations
inconsistent with those contained in this Agreement. The Executive further
represents and warrants to the Company that the Executive has entered into this
Agreement pursuant to his own initiative and that the Company did not induce the
Executive to execute this Agreement in contravention of any existing
commitments. The Executive acknowledges that the Company has entered into this
Agreement in reliance upon the foregoing representations of the Executive.
2.7 Counterpart Execution. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute but one and the same instrument.
2.8 Board of Directors. The Company and VISTA agree that, during the term
of this Agreement, VISTA will nominate either the Executive or Richard Bern for
election as a director of VISTA and will use its best efforts to have such
nominee elected as a director of VISTA.
EMPLOYMENT AGREEMENT Page 9 of 10
<PAGE>
2.9 VISTA hereby guarantees all compensation and benefits provided to the
Executive under this Agreement, should the Company ever default on its
obligations under this Agreement.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the day
and year first above written.
AMERICAN CONSUMER PRODUCTS, INC.
By: /s/ Richard Bern
-------------------------------------------
Title: President
---------------------------------------
EXECUTIVE:
/s/ Stephan W. Cole
--------------------------------------------------
STEPHAN W. COLE
Chief Executive Officer
VISTA 2000, INC.
(solely for purposes of Sections 2.8 and 2.9 hereof)
By: /s/ Richard P. Smith
------------------------------------------------
Title: Chairman & CEO
---------------------------------------------
EMPLOYMENT AGREEMENT Page 10 of 10
<PAGE>
IT IS UNLAWFUL TO CONSUMMATE A SALE OR TRANSFER OF THIS SECURITY OR ANY INTEREST
THEREIN, OR TO RECEIVE ANY CONSIDERATION THEREFOR, WITHOUT THE PRIOR WRITTEN
CONSENT OF THE SECURITIES COMMISSIONER OF THE STATE OF GEORGIA, EXCEPT AS
PERMITTED IN THE COMMISSIONER"S RULES.
THE SECURITY REPRESENTED BY THIS CERTIFICATE HAS BEEN ACQUIRED FOR INVESTMENT
AND NOT WITH A VIEW TO, OR IN CONNECTION WITH THE SALE OR DISTRIBUTION THEREOF.
NO SUCH SALE OR DISPOSITION MAY BE EFFECTED WITHOUT AN EFFECTIVE REGISTRATION
STATEMENT RELATED THERETO OR AN OPINION OF COUNSEL SATISFACTORY TO THE COMPANY
THAT SUCH REGISTRATION IS NOT REQUIRED UNDER THE SECURITIES ACT OF 1933.
NONSTATUTORY STOCK OPTION AGREEMENT
Vista 2000, Inc., a Delaware corporation (the "Company"), hereby grants to
Stephan W. Cole (the "Optionee") an Option to purchase a total of 100,000 shares
of Common Stock (the "Shares"), at the price determined as provided herein, and
in all respects subject to the terms, definitions and provisions of the 1993
Incentive Stock Option Plan, as amended (the "Plan") adopted by the Company,
which is incorporated herein by reference. Unless otherwise defined herein, the
terms defined in the Plan shall have the same defined meanings herein.
1. Nature of the Option. This Option is intended by the Company and the
--------------------
Optionee to be a Nonstatutory Stock Option, and does not qualify for any special
tax benefits to the Optionee. This Option is not an Incentive Stock Option and
is not subject to Section 5(b) of the Plan.
2. Exercise Price. The exercise price is $5.58 for each share of
--------------
Common Stock.
3. Exercise of Option. This Option shall be exercisable during its term
------------------
in accordance with the provisions of Section 8 of the Plan as follows:
(i) Right to Exercise; Vesting
--------------------------
(a) Subject to Subsections 3(i)(b), (c) and (d) below, this Option
shall vest and become exercisable in accordance with the vesting schedule and
vesting terms and conditions attached hereto as Exhibit "A" and incorporated
-----------
herein by this reference.
(b) This Option may not be exercised for a fraction of a Share.
(c) In the event of Optionee's death, disability or other termination
of employment, the exercisability of the Option shall be governed by Sections 7,
8 and 9 below, subject to the specific rights set forth in Exhibit "A" hereto
-----------
and the limitations contained in subsection 3(i)(d).
<PAGE>
(d) In no event may this Option be exercised after the date of
expiration of the term of this Option as set forth in Section 11 below.
(ii) Method of Exercise. This Option shall be exercisable by written
------------------
notice, in the form attached as Exhibit "B", which shall state the election to
-----------
exercise the Option, the number of Shares in respect of which the Option is
being exercised, and such other representations and agreements as to the
holder's investment intent with respect to such shares of Common Stock as may be
required by the Company pursuant to the provisions of the Plan. Such written
notice shall be signed by Optionee and shall be person or by certified mail to
the President, Secretary or Chief Financial Officer of the Company. The written
notice shall be accompanied by payment of the exercise price. This Option shall
be deemed to be exercised upon receipt by the Company of notice accompanied by
the exercise price. Until the issuance (as evidenced by the appropriate entry
on the books of the Company or of a duly authorized transfer agent of the
Company) of the stock certificate evidencing such Shares, no right to vote or
receive dividends or any other rights as a shareholder shall exist with respect
to the Optioned Stock, notwithstanding the exercise of the Option. The Company
shall issue (or cause to be issued) such stock certificate promptly upon
exercise of the Option.
No shares will be issued pursuant to the exercise of an option unless such
issuance and such exercise shall comply with all relevant provisions of law and
the requirements of any stock exchange upon which the Shares may then be listed.
Assuming such compliance, for income tax purposes the Shares shall be considered
transferred to the Optionee on the date on which the option is exercised with
respect to such Shares.
4. Investment Representations; Restrictions on Transfer.
----------------------------------------------------
(i) By receipt of this Option, by its execution and by its exercise
in whole or in part, Optionee represents to the Company the following:
(a) Optionee understands that this Option and any Shares purchased
upon its exercise are securities, the issuance of which requires compliance with
federal and state securities laws.
(b) Optionee is aware of the Company's business affairs and financial
condition and has acquired sufficient information about the Company to reach an
informed and knowledgeable decision to acquire the securities. Optionee is
acquiring these securities for investment for Optionee's own account only and
not with a view to, or for resale in connection with, any "distribution" thereof
within the meaning of the Securities Act of 1933, as amended (the "Securities
Act").
(c) Optionee acknowledges and understands that the securities are or
will be registered pursuant to Form S-8 under the Securities Act.
2
<PAGE>
5. Method of Payment. Payment of the purchase price shall be made by
-----------------
cash or check.
6. Restrictions on Exercise. This Option may not be exercised if the
------------------------
issuance of such Shares upon such exercise or the method of payment of
consideration for such shares would constitute a violation of any applicable
federal or state securities or other law or regulation, including any rule under
Part 207 of Title 12 of the Code of Federal Regulations (Regulation G) as
promulgated by the Federal Reserve Board. As a condition to the exercise of
this Option, the Company may require Optionee to make any representation and
warranty to the Company as may be required by any applicable law or regulation.
7. Termination of Status as an Employee or Consultant. In the event of
--------------------------------------------------
termination of Optionee's Continuous Status as an Employee for "cause" as
defined in Employee's Employment Agreement with the Company, this Option shall
immediately terminate, and Optionee shall not be entitled to purchase any Shares
pursuant to this Option. in the event of termination of Optionee's Continuous
Status as an Employee, which termination is not for "cause" as defined in
Employee's Employment Agreement with the Company , this Option shall continue in
full force and effect, subject to the other terms and conditions of this Option,
and this Option shall continue to vest and become exercisable as set forth in
Section 3 of this Agreement.
8. Disability of Optionee. Notwithstanding the provisions of Section 7
----------------------
above, in the event of termination of Optionee's Continuous Status as an
Employee or Consultant as a result of Optionee's permanent and total disability
(as defined in Section 22(e)(3) of the Code), the Option shall continue in full
force and effect, subject to the other terms and conditions of this Option, and
shall continue to vest and become exercisable as set forth in Section 3 of this
Agreement, and Optionee may (but in no event later than the date of expiration
of the term of this Option as set forth in Section 11 below), exercise this
Option. If Optionee does not exercise such Option (which Optionee was entitled
to exercise) within the time specified herein, this Option shall terminate.
9. Death of Optionee. In the event of the death of Optionee:
-----------------
(i) during the term of this Option while an Employee or Consultant of
the Company and having been in continuous Status as an Employee or Consultant
since the date of grant of this Option, this Option may be exercised, at any
time within thirty-six (36) months following the date of death (but in no event
later than the date of expiration of the term of this Option as set forth in
Section 11 below), by Optionee's estate or by a person who acquired the right to
exercise the Option by bequest or inheritance, but only to the extent of the
right to exercise that had accrued as of the date of death; or
3
<PAGE>
(ii) within thirty (30) days after the termination of Optionee's
Continuous Status as an Employee or Consultant, this Option may be exercised, at
any time within thirty-six (36) months following the date of death (but in no
event later than the date of expiration of the term of this Option as set forth
in Section 11 below), by Optionee's estate or by a person who acquired the right
to exercise this Option by bequest or inheritance, but only to the extent of the
right to exercise that had accrued at the date of termination.
10. Non-Transferability of Option. This Option may not be transferred in
-----------------------------
any manner otherwise than by will or by the laws of descent or distribution and
may be exercised during the lifetime of Optionee only by Optionee. The terms of
this Option shall be binding upon the executors, administrators, heirs,
successors and assigns of Optionee.
11. Term of Option. Notwithstanding Section 9, this Option may not be
--------------
exercised more than ten (10) years from the date of grant of this Option, and
may be exercised during such term only in accordance with the Plan and the terms
of this Option.
12. Taxation Upon Exercise of Option. Optionee understands that, upon
--------------------------------
exercise of this option, Optionee will recognize income for tax purposes in an
amount equal to the excess of the then fair market value of the shares over the
exercise price. The Company will be required to withhold tax from Optionee's
current compensation with respect to such income; to the extent that Optionee's
current compensation is insufficient to satisfy the withholding tax liability,
the Company may require the Optionee to make a cash payment to cover such
liability as a condition of exercise of this Option. Upon a resale of such
shares by the Optionee, any dif ference between the sale price and the fair
market value of the shares on the date of exercise of the Option will be treated
as capital gain or loss.
13. Tax Consequences. The Optionee understands that any of the foregoing
----------------
references to taxation are based on federal income tax laws and regulations now
in effect. The Optionee has reviewed with the Optionee's own tax advisors the
federal, state, local and foreign tax consequences of the transactions
contemplated by this Agreement. The Optionee is relying solely on such advisors
and not on any statements or representations of the Company or any of its
agents. The Optionee understands that the Optionee (and not the Company) shall
be responsible for the Optionee's own tax liability that may arise as a result
of the transactions contemplated by this Agreement.
DATE OF GRANT: August 29, 1995
VISTA 2000, INC.
By: /s/ Richard P. Smyth
-----------------------------------------
Title: Chairman & CEO
--------------------------------------
4
<PAGE>
OPTIONEE ACKNOWLEDGES RECEIPT OF A COPY OF THE PLAN, A COPY OF WHICH IS
ANNEXED HERETO, REPRESENTS THAT OPTIONEE IS FAMILIAR WITH THE TERMS AND
PROVISIONS THEREOF, AND HEREBY ACCEPTS THIS OPTION SUBJECT TO ALL OF THE TERMS
AND PROVISIONS THEREOF. OPTIONEE HAS REVIEWED THE PLAN AND THIS OPTION IN THEIR
ENTIRETY, HAS HAD AN OPPORTUNITY TO OBTAIN THE ADVICE OF COUNSEL PRIOR TO
EXECUTING THIS OPTION AND FULLY UNDERSTANDS ALL PROVISIONS OF THE OPTION.
OPTIONEE HEREBY AGREES TO ACCEPT AS BINDING, CONCLUSIVE AND FINAL ALL DECISIONS
OR INTERPRETATIONS OF THE BOARD OR OF THE COMMITTEE UPON ANY QUESTIONS ARISING
UNDER THE PLAN. OPTIONEE FURTHER AGREES TO NOTIFY THE COMPANY UPON ANY CHANGE
IN THE RESIDENCE ADDRESS INDICATED BELOW.
Dated:________________________
___________________________________________
Optionee
___________________________________________
Print or type name
Residence Address:
____________________________________________
____________________________________________
5
<PAGE>
EXHIBIT "A"
-----------
VESTING SCHEDULE AND VESTING TERMS AND CONDITIONS
-------------------------------------------------
The shares of stock subject to this Option shall vest and this Option shall
become exercisable with respect to such shares only upon satisfaction of and
only in accordance with the following terms and conditions:
(a) This Option shall vest and become immediately exercisable with respect
to 20,000 shares upon the date of execution of Optionee's employment agreement
with the Company.
(b) This Option shall vest and become exercisable with respect to 40,000
shares in eight (8) Five Thousand (5,000) share increments as follows: 5,000
shares on each of the last days of each of the eight calendar quarters
immediately subsequent hereto, commencing with the quarter beginning October 1,
1995 and ending December 31, 1995, and ending with the quarter beginning June 1,
1997 and ending September 30, 1997.
(c) This Option shall vest and become exercisable with respect to 40,000
shares at such times as the performance goals set forth on Appendix 1 hereto are
----------
achieved.
(d) This Option shall vest and become immediately exercisable with respect
to all shares not theretofore vested upon the acquisition by any person (as such
term is used in Sections 13(d) and 14(d) of the Securities Exchange Act of 1934,
as amended), other than by any person which includes the Executive, of more than
50% of the voting power of the Company's outstanding securities entitled to vote
in elections of directors of the Company.
(e) Anything herein to the contrary notwithstanding, this Option shall not
vest with respect to any shares unless, upon the date(s) the Option should
otherwise vest and become exercisable with respect to such shares, the Executive
is an employee of the Company; provided, however, the Option shall immediately
vest with respect to the 40,000 shares provided for in paragraph (b) above in
the event of the Executive's death or Disability (as defined in the Executive's
Employment Agreement) during his employment with the Company.
<PAGE>
EXHIBIT "B"
-----------
NOTICE OF EXERCISE OF
---------------------
STOCK OPTION
------------
TO:
FROM:
DATE:
RE: Exercise of Stock Option
I hereby exercise my option to purchase ____________ shares of Common
Stock at $_____ per share (total exercise price of $_______), effective today's
date. This notice is given in accordance with the terms of my Stock Option
Agreement dated _______________, 19___. The option price and vested amount is in
accordance with Sections 2 and 3 of the Stock Option Agreement.
Attached is a check payable to _____________________________
for the total exercise price of the shares being purchased. The undersigned
confirms the representations made in Section 4 of the Stock Option Agreement.
Please prepare the stock certificate in the following name(s):
_________________________________________________________
_________________________________________________________
If the stock is to be registered in a name other than your name, please so
advise the Company. The Stock Option Agreement requires the Company's approval
for registration in a name other than your name and requires certain agreements
from any joint owner.
Sincerely,
__________________________________________________________
(Signature)
__________________________________________________________
(Print or Type Name)
Letter and consideration
received on ____________, 19__.
By:___________________________
7
<PAGE>
EMPLOYMENT AGREEMENT
This Employment Agreement (the "Agreement") by and between AMERICAN
CONSUMER PRODUCTS, INC., a Delaware corporation (the "Company"), and RICHARD
BERN (the "Executive") is made and entered into in Cleveland, Ohio on the 29th
day of August, 1995 and shall become effective only upon the purchase by Vista
2000, Inc. ("Vista") of the common stock of the Company pursuant to the tender
offer to be commenced by Vista within twenty (20) days form the date hereof (the
"Effective Date").
SECTION 1
TERMS OF EMPLOYMENT
1.1 Employment. The Company hereby employs the Executive as the President
of the Company for and during the term hereof, subject to the direction of the
Board of Directors of the Company and the terms and conditions hereof. The
Executive hereby accepts employment under the terms and conditions set forth in
this Agreement.
1.2 Duties of Executive. The Executive shall perform in the capacity
described in Section 1.1 hereof and shall have such duties, responsibilities,
and authorities as are designated for such offices pursuant to the Bylaws, as
amended and restated, of the Company, and as may be reasonably assigned to him
from time to time by the Board of Directors of the Company; provided, however,
the Executive shall, during the term hereof, continuously have and retain such
duties, responsibilities, and authorities at least as significant in scope and
substance as the duties, responsibilities, and authorities required of the
Executive's offices and position with the Company as of the Effective Date. The
Executive agrees to devote his full time during normal business hours, best
efforts, abilities, knowledge and experience to the faithful performance of the
duties, responsibilities, and authorities which may be reasonably assigned to
him and which are consistent with his executive offices under Section 1.1 of
this Agreement. Notwithstanding the preceding, the Executive may, without being
in violation of his obligations hereunder, serve on corporate, civic or
charitable boards or committees and manage personal investments as of the date
hereof, provided the Executive shall use his best efforts to pursue such
activities in such a manner so that such activities shall not prevent the
Executive from fulfilling his obligations to the Company hereunder.
1.3 Term. This Agreement shall become effective as of the Effective Date
and shall continue in force and effect for three (3) years from the effective
date of this Agreement, unless sooner terminated as provided in Section 1.6
hereof or renewed or extended by written agreement between the Company and the
Executive pursuant to terms and conditions mutually acceptable to each.
1.4 Compensation. The Company shall pay the Executive compensation for
services rendered by the Executive under the Agreement as follows:
(a) Minimum Compensation. On a bi-monthly basis, the Executive will
receive from the Company at least $11,458.34 less local, state and federal taxes
and other applicable
EMPLOYMENT AGREEMENT Page 1 of 10
<PAGE>
withholdings. This minimum compensation shall be made up of Base Salary,
advances on Additional Compensation and advances on Bonus Compensation as
defined below.
(b) Base Salary. The Executive's salary ("Base Salary") shall be
$150,000.00 and it will be adjusted annually to take into account increases in
the cost of living.
(c) Additional Compensation. The Executive shall receive additional
compensation ("Additional Compensation") by participating in an annual bonus
pool for executives of the Company in an amount equal to ten percent (10%) of
pre-tax profits of the Company for each fiscal year during the term of this
Agreement. The Executive's percentage shall be determined by the Board of
Directors or the Compensation Committee, if there is one.
(d) Bonus Compensation. The Company may also provide to the Executive a
bonus ("Bonus Compensation") in an amount determined by the Board of Directors
of the Company or its Compensation Committee, if one exists.
(e) Annual Adjustment. Should the advances made to the Executive, during
the course of the fiscal year, on Additional Compensation and Bonus Compensation
be less than that which he is entitled to under the Additional Compensation
program and/or the Bonus Compensation program, the Company shall, within fifteen
(15) days after the completion of the audit of the Company's financial
statements for said fiscal year, remit the difference to the Executive. Should
the advances exceed that to which the Executive is entitled, the Executive shall
keep the excess and no set-off by the Company will be made.
(f) Stock Options. The Executive shall be eligible to participate in the
Company's 1993 Incentive Stock Option Plan, a copy of which is attached hereto
as Exhibit "A" and by this reference made a part hereof. Furthermore,
-----------
concurrently with execution of this Agreement by both parties, the Executive
will be delivered a stock option in the form attached hereto as Exhibit "B" and
-----------
by this reference made a part hereof.
1.5 Employment Benefits. In addition to the Salary and any Bonus
Compensation payable to the Executive hereunder, the Executive shall be entitled
to the following benefits upon satisfaction by the Executive of the eligibility
requirements therefor, subject to the following limitations:
(a) Sick Leave Benefits and Disability Insurance. Unless this Agreement is
terminated pursuant to the provisions of Section 1.6(b) hereof, the Executive
shall be paid sick leave benefits at his then prevailing salary rate during his
absence due to illness or other incapacity, reduced by the amount, if any, of
worker's compensation, social security entitlement, or disability benefits, if
any, under the Company's group disability insurance plan, if any.
(b) Life Insurance. The Company, at its expense, shall provide the
Executive, life insurance benefits under and consistent with any group term life
insurance plan, as provided by the Company prior to June 30, 1995, or improved
coverages which the Company, at its election, may adopt. Notwithstanding the
preceding sentence, it is understood and agreed that the Company will obtain and
maintain during the term of this Agreement, at its expense, a life
EMPLOYMENT AGREEMENT Page 2 of 10
<PAGE>
insurance policy, in the face amount of $1,000,000 (the Company and the
Executive or a designee of the Executive to be equal co-beneficiaries
thereunder).
(c) Hospitalization, Accident, Major Medical and Dental Insurance. The
Company, at its own expense, shall provide the Executive and all dependents of
the Executive with group hospitalization, group accident, major medical, group
disability, and dental insurance in amounts of coverage comparable to the
coverage provided to the Executive on June 30, 1995. The Executive shall be
responsible for any health insurance premium with respect to himself over $600
per month. The Company agrees to provide a Medical and Dental Reimbursement
Plan substantially in the form attached hereto as Exhibit "C" and by this
-----------
reference made a part hereof.
(d) Vacations. The Executive shall be entitled to a reasonable paid
vacation equal to that provided to other Executives, according to Company
policy, as determined by the Board of Directors of the Company, exclusive of
holidays and weekends, which vacation shall be taken by the Executive in
accordance with the business requirements of the Company at the time and its
personnel policies then in effect relative to this subject. The Executive shall
also be entitled to all paid holidays given by the Company to its executive
employees.
(e) Disability. The Company shall continue paying disability premiums (up
to $6,000 per year) during the term hereof for any disability policy covering
the Executive in force on June 30, 1995.
(f) Working Facilities. During the term of this Agreement, the Company
shall provide, at its expense, adequate office space, furniture, equipment,
supplies and personnel (including professional, clerical, support and other
personnel) consistent with the past practices of the Company as shall be
suitable in the opinion of the Board of Directors of the Company to the
Executive's position and adequate for the Executive's use in performing his
duties and responsibilities under this Agreement.
(g) Personal Vehicle. The Company shall pay to the Employee a monthly
vehicle allowance of Six Hundred and No/100 Dollars ($600.00), plus all expenses
incurred by the Employee in connection with the operation of the automobile for
the conduct of the affairs of the Company, including the cost of a cellular
telephone.
(h) Directors' and Officers' Liability Insurance. The Executive shall be
entitled to the protection of any directors' and officers' liability insurance
policies the Company may elect to maintain generally for the benefit of its
directors and officers (to the extent the Executive is eligible for such
coverage) in an amount and with such coverage as provided to directors and
executives of VISTA 2000, Inc., a Delaware corporation ("VISTA")
(i) Other Employment Benefits. As an employee of the Company, the
Executive shall participate in and receive such other fringe benefits as may be
in effect from time to time for employees of the Company, whether or not
specifically enumerated herein and whether or
EMPLOYMENT AGREEMENT Page 3 of 10
<PAGE>
not through any written plan or arrangement, upon satisfaction by the Executive
of the eligibility requirements therefor.
1.6 Termination. This Agreement and the Executive's employment hereunder
may be terminated without any breach of this Agreement at any time during the
term hereof only by reason of and in accordance with the following provisions:
(a) Death. If the Executive dies during the term of this Agreement and
while in the employ of the Company, this Agreement shall automatically terminate
as of the date of the Executive's death, and the Company shall have no further
liability hereunder to the Executive or his estate except to the extent set
forth in Section 1.7 hereof.
(b) Disability. If, during the term of this Agreement, the Executive shall
be prevented from performing his duties hereunder by reason of becoming totally
disabled as hereinafter defined, then the Company may terminate this Agreement
immediately upon written notice to the Executive without any further liability
hereunder to the Executive except as set forth in Section 1.7(b) hereof. For
purposes of this Agreement, the Executive shall be deemed to have become totally
disabled upon the earlier of: (i) he either receives "total disability benefits"
under (a) Social Security, or (b) the Company's disability plan, if any (whether
funded with insurance or self-funded by the Company), or (ii) the Board of
Directors of the Company, upon the written report of a qualified physician
(after complete examination of the Executive) designated by the Board of
Directors of the Company or its insurers, shall have determined that the
Executive has become physically and/or mentally incapable of performing his
duties under this Agreement for a period of one hundred eighty (180) days or
more and it is unlikely that the Executive will recover within the remaining
term of employment hereunder.
(c) Termination by the Company for Cause. Prior to the expiration of the
term of this Agreement, the Company may discharge the Executive for cause and
terminate this Agreement immediately upon written notice to the Executive
without any further liability hereunder to the Executive or his estate, except
to the extent set forth in Section 1.7(c) hereof. For purposes of this
Agreement, a "discharge for cause" shall mean termination of the Executive upon
written notice to the Executive limited, however, to one or more of the
following reasons:
(1) Fraud, misappropriation or embezzlement by the Executive in connection
with the Company as determined by the affirmative vote of at least a majority of
the Board of Directors of the Company (provided, however, should the Executive
dispute such determination by the Board, then the Company and the Executive
shall enter immediately into binding arbitration pursuant to the Commercial
Arbitration Rules of the American Arbitration Association, each party to be
responsible for its own costs and expenses, including attorneys' fees;
(2) Gross misconduct or willful gross neglect of the Executive's duties as
determined by the affirmative vote of at least a majority of the Board of
Directors of the Company after notice to the Executive of the particular details
thereof and a period of thirty (30) days thereafter within which to cure such
act or acts of gross misconduct or willful gross neglect, and the failure of the
Executive to cure such act or acts within such thirty (30) day period. For
purposes of this paragraph, no act or failure to act on the part of Executive
shall be deemed "willful"
EMPLOYMENT AGREEMENT Page 4 of 10
<PAGE>
unless done, or omitted to be done, by Executive not in good faith and without
reasonable belief that the act or omission of Executive was in the best
interests of the Company;
(3) Conviction for a felony or a crime involving moral turpitude;
(4) Willful and unauthorized disclosure of Trade Secrets (as defined in
Section 1.9 hereof) of the Company;
(d) Termination by the Company with Notice. The Company may terminate this
Agreement for a reason other than as set forth in Subparagraphs (a), (b) or (c)
of this Section 1.6 at any time upon ninety (90) days written notice to the
Executive in which event the Company shall have no further obligations to the
Executive except as set forth in Section 1.7(b) hereof.
(e) Termination by the Executive for Good Reason. The Executive may
terminate this Agreement at any time for Good Reason (as hereinafter defined) in
which event the Company shall have no further liability hereunder to the
Executive except to the extent set forth in Section 1.7(b) hereof. For purposes
of this Agreement, the term "Good Reason" shall mean, without the Executive's
express written consent, the occurrence of any of the following circumstances
(which changes shall constitute a "Change"):
(1) The assignment to the Executive of any duties inconsistent in any
material respect (unless in the nature of a promotion) with the Executive's
position in the Company immediately prior to such Change (including, but not
limited to, the Executive's status, offices and titles), or a significant
adverse alteration or diminution in the nature or status of the Executive's
authority, duties or responsibilities from those in effect immediately prior to
such Change, other than an isolated, insubstantial and inadvertent action that
is fully corrected within five (5) days after receipt of written notice from the
Executive;
(2) Any failure by the Company to comply with any of the provisions of
Sections 1.4 or 1.5 of this Agreement, other than an isolated, insubstantial and
inadvertent action that is fully corrected within five (5) days after receipt of
written notice from the Executive;
(3) Any failure by the Company to comply with any material provision of
this Agreement that has not been cured within ten (10) days after notice of such
noncompliance has been given by the Executive to the Company;
(4) The relocation of the Executive's office outside of a 75-mile radius
of Cleveland, Ohio.
(f) Termination by the Executive with Notice. The Executive may terminate
this Agreement at any time upon ninety (90) days written notice to the Company.
EMPLOYMENT AGREEMENT Page 5 of 10
<PAGE>
1.7 Compensation upon Termination.
(a) Death. In the event the Executive's employment hereunder is
terminated pursuant to the provisions of Section 1.6(a) hereof due to the death
of the Executive, the Company will continue to pay the Executive's estate all
compensation as set forth in Section 1.4 of this Agreement through the remainder
of the calendar year in which the Executive dies. In other words, the Executive
will be treated as if he worked up to and including December 31, following the
date of the Executive's death. In addition, the Company will continue to provide
health insurance, dental insurance, and major medical insurance to the
Executive's family, under the same terms and conditions as it had just prior to
the Executive's death through December 31 of the year in which the Executive
dies after which time the Executive will be entitled to such insurance benefits
as required by law (for example, COBRA benefits).
(b) Disability, Termination by the Company with Notice, and Termination by
the Executive for Good Reason. In the event the Executive's employment
hereunder is terminated pursuant to the provisions of Section 1.6(b), (d) or
(e), the Executive shall be entitled to receive all compensation and benefits
under this Agreement as if his employment had not terminated prior to the
completion of the Agreement's original thirty-six (36) month term.
(c) Cause and Termination by Executive with Notice. In the event that this
Agreement is terminated by the Company pursuant to the provisions of Section
1.6(c) or by the Executive pursuant to the provisions of Section 1.6(f), the
Executive shall be entitled to receive (i) any salary accrued as of the date of
termination of employment, but unpaid pursuant to section 1.4(a) hereof, (ii)
any vacation or sick leave benefits which have accrued as of the date of
termination of employment, but were then unpaid or unused, (iii) any Additional
Compensation earned as of the date of termination of employment, but unpaid, and
(iv) any Bonus Compensation pursuant to a Bonus declared as of the date of
termination, but unpaid. For purposes hereof, the amount of Additional
Compensation considered "earned" shall be determined based upon the reported
pre-tax profits of the Company for the quarter(s) during which the Executive was
actually employed during the year in which termination of employment occurs.
1.8 Protective Covenants. The Executive recognizes that his employment by
the Company is one of the highest trust and confidence because (i) the Executive
will become fully familiar with all aspects of the Company's business and that
of its subsidiaries during the period of his employment with the Company, (ii)
certain information of which the Executive will gain knowledge during his
employment is proprietary and confidential information which is of special and
peculiar value to the Company or its subsidiaries, and (iii) if any such
proprietary and confidential information were imparted to or became known by any
person, including the Executive, engaging in a business in competition with that
of the Company or its subsidiaries, hardship, loss and irreparable injury and
damage could result to the Company or its subsidiaries, the measurement of which
would be difficult if not impossible to ascertain. The Executive further
acknowledges that the Company or its subsidiaries has developed and will
continue to develop unique consumer products and attendant component parts
(collectively, along with any trade secret information of the Company, the
"Trade Secrets"). Therefore, the Executive agrees that it is necessary for the
Company to protect its business and that of its subsidiaries from such
EMPLOYMENT AGREEMENT Page 6 of 10
<PAGE>
damage, and the Executive further agrees that the following covenants constitute
a reasonable and appropriate means, consistent with the best interest of both
the Executive and the Company, to protect the Company or its subsidiaries
against such damage and shall apply to and be binding upon the Executive as
provided herein:
(a) Trade Secrets. The Executive recognizes that his position with the
Company is one of the highest trust and confidence by reason of the Executive's
access to and contact with the Trade Secrets of the Company and its
subsidiaries. The Executive agrees and covenants to use his best efforts and
exercise utmost diligence to protect and safeguard the Trade Secrets of the
Company and its subsidiaries. The Executive further agrees and covenants that,
except as may be required by the Company in connection with this Agreement, or
with the prior written consent of the Company, the Executive shall not, either
during the term of this Agreement or thereafter, directly or indirectly, use for
the Executive's own benefit or for the benefit of another, or disclose,
disseminate, or distribute to another, the Trade Secrets (whether or not
acquired, learned, obtained, or developed by the Executive alone or in
conjunction with others) of the Company or its subsidiaries or of others with
whom the Company or its subsidiaries has a business relationship. All
memoranda, notes, records, documents, or other writings whatsoever made,
compiled, acquired, or received by the Executive during the term of this
Agreement, arising out of, in connection with, or related to the production of
the Company's products and component parts attendant thereto or those of its
subsidiaries are, and shall continue to be, the sole and exclusive property of
the Company or its subsidiaries, as applicable, and shall, together with all
copies thereof and all advertising literature, be returned and delivered to the
Company by the Executive immediately, without demand, upon the termination of
this Agreement, or at any time upon the Company's demand. It is understood and
agreed that the term "Trade Secrets" shall not be deemed to include information
which (i) is public knowledge or become generally available to the public other
than as a result of a disclosure by you; (ii) becomes available to the
Executive, on a non-confidential basis, from a source (other than from the
Company or its agents) who is not bound by a confidentiality agreement with the
Company; or (iii) is in the Executive's possession prior to disclosure to the
Executive by the Company.
(b) Covenant Not to Compete. In the event this Agreement is terminated
pursuant to the provisions of Section 1.6 hereof, or as the result of the
voluntary resignation of the Executive, the Executive hereby covenants and
agrees that for a period of one (1) year following the termination of his
employment hereunder, he will not directly or indirectly, either as an employee,
employer, consultant, agent, principal, partner, stockholder (other than through
ownership of publicly-traded capital stock of a corporation which represents
less than one percent (1%) of the outstanding capital stock of such
corporation), corporate officer, director, investor, financier or in any other
individual or representative capacity, engage or participate in any business
involving the sale or distribution of home, business or personal security or
safety products marketed by the Company on the date this Agreement becomes
effective, including, but not limited to, the sale or distribution of locks and
keys.
(c) Survival of Covenants. Each covenant of the Executive set forth in
this Section 1.8 shall survive the termination of this Agreement and shall be
construed as an agreement
EMPLOYMENT AGREEMENT Page 7 of 10
<PAGE>
independent of any other provision of this Agreement, and the existence of any
claim or cause of action of the Executive against the Company whether predicated
on this Agreement or otherwise shall not constitute a defense to the enforcement
by the Company of said covenant.
(d) Remedies. In the event of breach or threatened breach by the
Executive of any provision of this Section 1.8, the Company shall be entitled to
relief by temporary restraining order, temporary injunction, or permanent
injunction or otherwise, in addition to other legal and equitable relief to
which it may be entitled, including any and all monetary damages which the
Company may incur as a result of said breach, violation or threatened breach or
violation. The Company may pursue any remedy available to it concurrently or
consecutively in any order as to any breach, violation, or threatened breach or
violation, and the pursuit of one of such remedies at any time will not be
deemed an election of remedies or waiver of the right to pursue any other of
such remedies as to such breach, violation, or threatened breach or violation,
or as to any other breach, violation, or threatened breach or violation.
The Executive hereby acknowledges that the Executive's agreement to be
bound by the protective covenants set forth in this Section 1.8 was a material
inducement for the Company entering into this Agreement and agreeing to pay the
Executive the compensation and benefits set forth herein.
SECTION 2. GENERAL PROVISIONS
2.1 Notices. All notices, requests, consents, and other communications
under this Agreement shall be in writing and shall be deemed to have been
delivered on the date personally delivered or on the date deposited in a
receptacle maintained by the United States Postal Service for such purpose,
postage prepaid, by certified mail, return receipt requested, addressed to the
respective parties as follows:
If to the Executive:
_____________________________
_____________________________
_____________________________
If to the Company:
Vista 2000, Inc.
11660 Alpharetta Highway, Suite 330
Roswell, Georgia 30076
Attention: President
Either party hereto may designate a different address by providing written
notice of such new address to the other party hereto.
EMPLOYMENT AGREEMENT Page 8 of 10
<PAGE>
2.2 Severability. If any provision contained in this Agreement is
determined to be void, illegal or unenforceable, in whole or in part, then the
other provisions contained herein shall remain in full force and effect as if
the provision which was determined to be void, illegal, or unenforceable had not
been contained herein.
2.3 Waiver, Modification, and Integration. The waiver by any party hereto
of a breach of any provision of this Agreement shall not operate or be construed
as a waiver of any subsequent breach by any party. This instrument contains the
entire agreement of the parties concerning employment and supersedes all prior
and contemporaneous representations, understandings and agreements, either oral
or in writing, between the parties hereto with respect to the employment of the
Executive by the Company and all such prior or contemporaneous representations,
understandings and agreements, both oral and written, are hereby terminated.
This Agreement may not be modified, altered or amended except by written
agreement of the Executive and the Company, subject to the prior approval of the
Board of Directors of the Company.
2.4 Binding Effect. This Agreement shall be binding and effective upon
the Company and its successors and permitted assigns, and upon the Executive,
his heirs and representatives; provided, however, that the Company shall not
assign this Agreement without the written consent of the Executive.
2.5 Choice of Law and Venue. The parties agree that this Agreement is
made and entered into in Cleveland, Ohio and shall be governed by and construed
in accordance with the laws of the State of Ohio, and that any litigation,
special proceeding or other proceeding as between the parties that may be
brought, or arise out of, in connection with or by reason of this Agreement
shall be brought in the applicable state court in and for Cleveland, Ohio which
Court shall be the exclusive courts of jurisdiction and venue.
2.6 Representation of Executive. The Executive hereby represents and
warrants to the Company that he has not previously assumed any obligations
inconsistent with those contained in this Agreement. The Executive further
represents and warrants to the Company that the Executive has entered into this
Agreement pursuant to his own initiative and that the Company did not induce the
Executive to execute this Agreement in contravention of any existing
commitments. The Executive acknowledges that the Company has entered into this
Agreement in reliance upon the foregoing representations of the Executive.
2.7 Counterpart Execution. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute but one and the same instrument.
2.8 Board of Directors. The Company and VISTA agree that, during the term
of this Agreement, VISTA will nominate either the Executive or Stephan Cole for
election as a director of VISTA and will use its best efforts to have such
nominee elected as a director of VISTA.
EMPLOYMENT AGREEMENT Page 9 of 10
<PAGE>
2.9 VISTA hereby guarantees all compensation and benefits provided to the
Executive under this Agreement, should the Company ever default on its
obligations under this Agreement.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the day
and year first above written.
AMERICAN CONSUMER PRODUCTS, INC.
By: /s/ Stephan W. Cole
------------------------------------------------
Title: President
---------------------------------------------
EXECUTIVE:
/s/ Richard Bern
----------------------------------------------------
RICHARD BERN
President
VISTA 2000, INC.
(solely for purposes of Sections 2.8 and 2.9 hereof)
By: /s/ Richard P. Smyth
------------------------------------------------
Title: Chairman & CEO
---------------------------------------------
EMPLOYMENT AGREEMENT Page 10 of 10
<PAGE>
IT IS UNLAWFUL TO CONSUMMATE A SALE OR TRANSFER OF THIS SECURITY OR ANY INTEREST
THEREIN, OR TO RECEIVE ANY CONSIDERATION THEREFOR, WITHOUT THE PRIOR WRITTEN
CONSENT OF THE SECURITIES COMMISSIONER OF THE STATE OF GEORGIA, EXCEPT AS
PERMITTED IN THE COMMISSIONER"S RULES.
THE SECURITY REPRESENTED BY THIS CERTIFICATE HAS BEEN ACQUIRED FOR INVESTMENT
AND NOT WITH A VIEW TO, OR IN CONNECTION WITH THE SALE OR DISTRIBUTION THEREOF.
NO SUCH SALE OR DISPOSITION MAY BE EFFECTED WITHOUT AN EFFECTIVE REGISTRATION
STATEMENT RELATED THERETO OR AN OPINION OF COUNSEL SATISFACTORY TO THE COMPANY
THAT SUCH REGISTRATION IS NOT REQUIRED UNDER THE SECURITIES ACT OF 1933.
NONSTATUTORY STOCK OPTION AGREEMENT
Vista 2000, Inc., a Delaware corporation (the "Company"), hereby grants to
Richard Bern (the "Optionee") an Option to purchase a total of 100,000 shares of
Common Stock (the "Shares"), at the price determined as provided herein, and in
all respects subject to the terms, definitions and provisions of the 1993
Incentive Stock Option Plan, as amended (the "Plan") adopted by the Company,
which is incorporated herein by reference. Unless otherwise defined herein, the
terms defined in the Plan shall have the same defined meanings herein.
1. Nature of the Option. This Option is intended by the Company and the
--------------------
Optionee to be a Nonstatutory Stock Option, and does not qualify for any special
tax benefits to the Optionee. This Option is not an Incentive Stock Option and
is not subject to Section 5(b) of the Plan.
2. Exercise Price. The exercise price is $5.58 for each share of
--------------
Common Stock.
3. Exercise of Option. This Option shall be exercisable during its term
------------------
in accordance with the provisions of Section 8 of the Plan as follows:
(i) Right to Exercise; Vesting
--------------------------
(a) Subject to Subsections 3(i)(b), (c) and (d) below, this Option
shall vest and become exercisable in accordance with the vesting schedule and
vesting terms and conditions attached hereto as Exhibit "A" and incorporated
-----------
herein by this reference.
(b) This Option may not be exercised for a fraction of a Share.
(c) In the event of Optionee's death, disability or other
termination of employment, the exercisability of the Option shall be governed by
Sections 7, 8 and 9 below, subject to the specific rights set forth in Exhibit
"A" hereto and the limitations contained in subsection 3(i)(d).
- ----------
<PAGE>
(d) In no event may this Option be exercised after the date of
expiration of the term of this Option as set forth in Section 11 below.
(ii) Method of Exercise. This Option shall be exercisable by written
------------------
notice, in the form attached as Exhibit "B", which shall state the election to
-----------
exercise the Option, the number of Shares in respect of which the Option is
being exercised, and such other representations and agreements as to the
holder's investment intent with respect to such shares of Common Stock as may be
required by the Company pursuant to the provisions of the Plan. Such written
notice shall be signed by Optionee and shall be person or by certified mail to
the President, Secretary or Chief Financial Officer of the Company. The written
notice shall be accompanied by payment of the exercise price. This Option shall
be deemed to be exercised upon receipt by the Company of notice accompanied by
the exercise price. Until the issuance (as evidenced by the appropriate entry
on the books of the Company or of a duly authorized transfer agent of the
Company) of the stock certificate evidencing such Shares, no right to vote or
receive dividends or any other rights as a shareholder shall exist with respect
to the Optioned Stock, notwithstanding the exercise of the Option. The Company
shall issue (or cause to be issued) such stock certificate promptly upon
exercise of the Option.
No shares will be issued pursuant to the exercise of an option unless such
issuance and such exercise shall comply with all relevant provisions of law and
the requirements of any stock exchange upon which the Shares may then be listed.
Assuming such compliance, for income tax purposes the Shares shall be considered
transferred to the Optionee on the date on which the option is exercised with
respect to such Shares.
4. Investment Representations; Restrictions on Transfer.
----------------------------------------------------
(i) By receipt of this Option, by its execution and by its exercise
in whole or in part, Optionee represents to the Company the following:
(a) Optionee understands that this Option and any Shares purchased
upon its exercise are securities, the issuance of which requires compliance with
federal and state securities laws.
(b) Optionee is aware of the Company's business affairs and
financial condition and has acquired sufficient information about the Company to
reach an informed and knowledgeable decision to acquire the securities. Optionee
is acquiring these securities for investment for Optionee's own account only and
not with a view to, or for resale in connection with, any "distribution" thereof
within the meaning of the Securities Act of 1933, as amended (the "Securities
Act").
(c) Optionee acknowledges and understands that even though a
registration for the underlying shares has been filed, the securities constitute
"restricted securities" under the Securities Act and may, subject to Rule 144 or
other securities law, be held indefinitely. Optionee further acknowledges and
understands that the Company is under no obligation to
2
<PAGE>
register the securities. Optionee understands that the certificate evidencing
the securities will be imprinted with a legend which prohibits the transfer of
the securities unless they have been registered or such registration is not
required in the opinion of counsel satisfactory to the Company, a legend
prohibiting their transfer without the consent of the Securities Commissioner of
the State of Georgia and any other legend required under applicable state
securities laws.
(d) Optionee is familiar with the provisions of Rule 144,
promulgated under the Securities Act, which, in substance, permit limited public
resale of "restricted securities" acquired, directly or indirectly, from the
issuer thereof, in a non-public offering subject to the satisfaction of certain
conditions. Option understands and agrees that even though the securities are
registered under the Securities Act, the securities may only be resold in
certain limited circumstances subject to the provisions of Rule 144, which
requires among other things: (1) the availability of certain public information
about the Company; (2) the resale occurring not less than two years after the
party has purchased, and made full payment for, within the meaning of Rule 144,
the securities to be sold; and (3) in the case of an affiliate, or of a non-
affiliate who has held the securities less than three years, the sale being made
through a broker in an unsolicited "broker's transaction" or in transactions
directly with a market maker (as said term is defined under the Securities
Exchange Act of 1934) and the amount of securities being sold during any three
month period not exceeding the specified limitations stated therein, if
applicable.
5. Method of Payment. Payment of the purchase price shall be made by
-----------------
cash or check.
6. Restrictions on Exercise. This Option may not be exercised if the
------------------------
issuance of such Shares upon such exercise or the method of payment of
consideration for such shares would constitute a violation of any applicable
federal or state securities or other law or regulation, including any rule under
Part 207 of Title 12 of the Code of Federal Regulations (Regulation G) as
promulgated by the Federal Reserve Board. As a condition to the exercise of
this Option, the Company may require Optionee to make any representation and
warranty to the Company as may be required by any applicable law or regulation.
7. Termination of Status as an Employee or Consultant. In the event of
--------------------------------------------------
termination of Optionee's Continuous Status as an Employee for "cause" as
defined in Employee's Employment Agreement with the Company, this Option shall
immediately terminate, and Optionee shall not be entitled to purchase any Shares
pursuant to this Option. in the event of termination of Optionee's Continuous
Status as an Employee, which termination is not for "cause" as defined in
Employee's Employment Agreement with the Company , this Option shall continue in
full force and effect, subject to the other terms and conditions of this Option,
and this Option shall continue to vest and become exercisable as set forth in
Section 3 of this Agreement.
8. Disability of Optionee. Notwithstanding the provisions of Section 7
----------------------
above, in the event of termination of Optionee's Continuous Status as an
Employee or Consultant as a result
3
<PAGE>
of Optionee's permanent and total disability (as defined in Section 22(e)(3) of
the Code), Optionee may (but in no event later than the date of expiration of
the term of this Option as set forth in Section 11 below), exercise this Option
to the extent Optionee was entitled to exercise it at the date of such
termination. To the extent that Optionee was not entitled to exercise this
Option at the date of termination, or if Optionee does not exercise such Option
(which Optionee was entitled to exercise) within the time specified herein, this
Option shall terminate.
9. Death of Optionee. In the event of the death of Optionee:
-----------------
(i) during the term of this Option while an Employee or Consultant of
the Company and having been in continuous Status as an Employee or Consultant
since the date of grant of this Option, this Option may be exercised, at any
time following the date of death (but in no event later than the date of
expiration of the term of this Option as set forth in Section 11 below), by
Optionee's estate or by a person who acquired the right to exercise the Option
by bequest or inheritance, but only to the extent of the right to exercise that
had accrued as of the date of death; or
(ii) within thirty (30) days after the termination of Optionee's
Continuous Status as an Employee or Consultant, this Option may be exercised, at
any time within thirty-six (36) months following the date of death (but in no
event later than the date of expiration of the term of this Option as set forth
in Section 11 below), by Optionee's estate or by a person who acquired the right
to exercise this Option by bequest or inheritance, but only to the extent of the
right to exercise that had accrued at the date of termination.
10. Non-Transferability of Option. This Option may not be transferred in
-----------------------------
any manner otherwise than by will or by the laws of descent or distribution and
may be exercised during the lifetime of Optionee only by Optionee. The terms of
this Option shall be binding upon the executors, administrators, heirs,
successors and assigns of Optionee.
11. Term of Option. Notwithstanding Section 9, this Option may not be
--------------
exercised more than ten (10) years from the date of grant of this Option, and
may be exercised during such term only in accordance with the Plan and the terms
of this Option.
12. Taxation Upon Exercise of Option. Optionee understands that, upon
--------------------------------
exercise of this option, Optionee will recognize income for tax purposes in an
amount equal to the excess of the then fair market value of the shares over the
exercise price. The Company will be required to withhold tax from Optionee's
current compensation with respect to such income; to the extent that Optionee's
current compensation is insufficient to satisfy the withholding tax liability,
the Company may require the Optionee to make a cash payment to cover such
liability as a condition of exercise of this Option. Upon a resale of such
shares by the Optionee, any difference between the sale price and the fair
market value of the shares on the date of exercise of the Option will be treated
as capital gain or loss.
4
<PAGE>
13. Tax Consequences. The Optionee understands that any of the foregoing
----------------
references to taxation are based on federal income tax laws and regulations now
in effect. The Optionee has reviewed with the Optionee's own tax advisors the
federal, state, local and foreign tax consequences of the transactions
contemplated by this Agreement. The Optionee is relying solely on such advisors
and not on any statements or representations of the Company or any of its
agents. The Optionee understands that the Optionee (and not the Company) shall
be responsible for the Optionee's own tax liability that may arise as a result
of the transactions contemplated by this Agreement.
DATE OF GRANT: August 29, 1995
VISTA 2000, INC.
By: /s/ RICHARD P. SMYTH
________________________________________________________
Title: CEO
_____________________________________________________
5
<PAGE>
OPTIONEE ACKNOWLEDGES RECEIPT OF A COPY OF THE PLAN, A COPY OF WHICH IS
ANNEXED HERETO, REPRESENTS THAT OPTIONEE IS FAMILIAR WITH THE TERMS AND
PROVISIONS THEREOF, AND HEREBY ACCEPTS THIS OPTION SUBJECT TO ALL OF THE TERMS
AND PROVISIONS THEREOF. OPTIONEE HAS REVIEWED THE PLAN AND THIS OPTION IN THEIR
ENTIRETY, HAS HAD AN OPPORTUNITY TO OBTAIN THE ADVICE OF COUNSEL PRIOR TO
EXECUTING THIS OPTION AND FULLY UNDERSTANDS ALL PROVISIONS OF THE OPTION.
OPTIONEE HEREBY AGREES TO ACCEPT AS BINDING, CONCLUSIVE AND FINAL ALL DECISIONS
OR INTERPRETATIONS OF THE BOARD OR OF THE COMMITTEE UPON ANY QUESTIONS ARISING
UNDER THE PLAN. OPTIONEE FURTHER AGREES TO NOTIFY THE COMPANY UPON ANY CHANGE
IN THE RESIDENCE ADDRESS INDICATED BELOW.
Dated:________________________
________________________________________________
Optionee
________________________________________________
Print or type name
Residence Address:
________________________________________________
________________________________________________
6
<PAGE>
EXHIBIT "A"
-----------
VESTING SCHEDULE AND VESTING TERMS AND CONDITIONS
-------------------------------------------------
The shares of stock subject to this Option shall vest and this Option
shall become exercisable with respect to such shares only upon satisfaction of
and only in accordance with the following terms and conditions:
(a) This Option shall vest and become immediately exercisable with
respect to 20,000 shares upon the date of execution of Optionee's employment
agreement with the Company.
(b) This Option shall vest and become exercisable with respect to
40,000 shares in eight (8) Five Thousand (5,000) share increments as follows:
5,000 shares on each of the last days of each of the eight calendar quarters
immediately subsequent hereto, commencing with the quarter beginning October 1,
1995 and ending December 31, 1995, and ending with the quarter beginning June
1, 1997 and ending September 30, 1997.
(c) This Option shall vest and become exercisable with respect to
40,000 shares at such times as the performance goals set forth on Appendix 1
----------
hereto are achieved.
(d) This Option shall vest and become immediately exercisable with
respect to all shares not theretofore vested upon the acquisition by any person
(as such term is used in Sections 13(d) and 14(d) of the Securities Exchange Act
of 1934, as amended), other than by any person which includes the Executive, of
more than 50% of the voting power of the Company's outstanding securities
entitled to vote in elections of directors of the Company.
(e) Anything herein to the contrary notwithstanding, this Option shall
not vest with respect to any shares unless, upon the date(s) the Option should
otherwise vest and become exercisable with respect to such shares, the Executive
is an employee of the Company; provided, however, the Option shall immediately
vest with respect to the 40,000 shares provided for in paragraph (b) above in
the event of the Executive's death or Disability (as defined in the Executive's
Employment Agreement) during his employment with the Company.
<PAGE>
EXHIBIT "B"
-----------
NOTICE OF EXERCISE OF
---------------------
STOCK OPTION
------------
TO:
FROM:
DATE:
RE: Exercise of Stock Option
I hereby exercise my option to purchase ____________ shares of Common Stock
at $_____ per share (total exercise price of $_______), effective today's date.
This notice is given in accordance with the terms of my Stock Option Agreement
dated _______________, 19___. The option price and vested amount is in
accordance with Sections 2 and 3 of the Stock Option Agreement.
Attached is a check payable to _____________________________
for the total exercise price of the shares being purchased. The undersigned
confirms the representations made in Section 4 of the Stock Option Agreement.
Please prepare the stock certificate in the following name(s):
______________________________________________
______________________________________________
If the stock is to be registered in a name other than your name, please so
advise the Company. The Stock Option Agreement requires the Company's approval
for registration in a name other than your name and requires certain agreements
from any joint owner.
Sincerely,
______________________________________________
(Signature)
______________________________________________
(Print or Type Name)
Letter and consideration
received on _________________, 19__.
By:________________________________
8
<PAGE>
[INDEMNIFICATION AGREEMENT]
August 29, 1995
American Consumer Products, Inc.
31100 Solon Road
Solon, Ohio 44131
Gentlemen:
This letter sets forth Vista 2000, Inc.'s ("Vista") agreements with respect
to the indemnification of the current directors and officers of American
Consumer Products, Inc. ("ACPI") following the purchase and acceptance by Vista
of the shares of common stock of ACPI (the "Shares") which Vista will seek to
acquire pursuant to an Offer to Purchaser (the "Tender Offer") that Vista
expects to commence on or about August 29, 1995.
Indemnification. From and after the date Vista accepts and pays for the
---------------
Shares, (the "Effective Date"), Vista shall use its best efforts to cause ACPI
to indemnify, defend, and hold harmless to the fullest extent permitted or
required by applicable law the present and former directors and officers of ACPI
and any ACPI Subsidiaries and their respective heirs, executors, administrators
and legal representatives, including without limitation, each member of any
Special Committee of the Board of Directors of ACPI appointed in respect of the
transactions contemplated by the Tender Offer (the "Special committee")
(individually, an "Indemnified Party" and collectively, the "Indemnified
Parties") against all losses, expenses, claims, damages, or liabilities arising
out of actions or omissions occurring on or prior to the Effective Date,
(including, without limitation, acts or omissions relating to the transactions
contemplated by the Tender Offer (collectively, "Losses") to the fullest extent
permitted or required under applicable law). From and after the Effective Date,
Vista shall use its best efforts to cause ACPI to advance expenses incurred in
defending against any claim, action, suit, proceeding, or investigation arising
out of any alleged acts or omissions occurring on or prior to the Effective Date
(including, without limitation, acts or omissions relating to the transactions
contemplated by the Tender Offer, as incurred to the fullest extent permitted or
required under applicable law, provided that the person to whom expenses are
advanced provides an undertaking in form and to repay such advances if it is
ultimately determined that such person is not entitled to indemnification. All
rights to indemnification, including provisions relating to advances of
expenses, existing in favor of the Indemnified Parties as provided in ACPI's
Restated Certificate of Incorporation or Bylaws, as in effect as of the date of
this Letter Agreement, with respect to matters occurring through the Effective
Date, to the extent permitted by law, will survive the acceptance and purchase
by Vista of the Shares and will continue in full force and effect for a period
of not less than six years from the Effective Date. Vista shall use its best
efforts to cause ACPI to maintain in effect during the six-year period beginning
with the Effective Date (i) the current policy of directors' and officers'
liability insurance and fiduciary
<PAGE>
liability insurance with Federal Insurance Company (a Chubb Company), policy
number 8155-43-57G, and National Union Insurance Company of Pittsburgh,
Pennsylvania, policy number 444-26-14 (RIN 442-28-83), maintained by ACPI and
ACPI Subsidiaries with respect to matters occurring prior to the Effective Date,
or (ii) other policies (including without limitation, policies providing "tail
coverage" for the then remaining portion of the six-year period for a one-time
premium) with scope of coverage, policy limits, retention amounts, and other
material terms that are no less favorable to the Indemnified Parties than those
of the policy referred to in (i) above.
Defense. Any Indemnified Party will promptly notify ACPI of any claim,
-------
action, suit, proceeding, or investigation for which such party may seek
indemnification under this Letter Agreement. In the event of any such claim,
action, suit, proceeding, or investigation, (i) ACPI will have the right to
assume the defense thereof, and ACPI will not be liable to such Indemnified
Party for any legal expenses of other counsel or any other expenses subsequently
incurred thereafter by such Indemnified Party in connection with the defense
thereof, except that an Indemnified Party will have the right to retain separate
counsel, acceptable to the Indemnified Party and ACPI at the expense of ACPI if
the named parties to any such proceeding include both the Indemnified Party and
the ACPI and the representation of such parties by the same counsel would be
inappropriate due to a conflict of interest between them; provided that, ACPI
will not be responsible for the legal expenses of more than one law firm in
connection with any one matter unless there is, under applicable standards of
professional conduct, a conflict on any significant issue between the legal
positions of any two or more Indemnified Parties, (ii) the Indemnified Parties
will cooperate in the defense of any such matter, and (iii) ACPI will not be
liable for any settlement affected without its prior written consent.
Notwithstanding the foregoing, ACPI will not have any obligation to indemnify an
Indemnified Party when and if a court of competent jurisdiction ultimately
determines, and such determination becomes final, that the indemnification of
such Indemnified Party in the manner contemplated hereby is prohibited by
applicable. law.
Indemnification by Buyers. Vista shall indemnify each Indemnified Party
-------------------------
for and hold such party harmless against any Losses to the extent that such
Losses are not paid by ACPI or its insurer(s). Vista's obligations under this
paragraph shall be absolute and unconditional irrespective of any lack of
validity or enforceability of this Letter Agreement or any other instrument or
document related hereto.
Survival; Amendment. This Letter Agreement and the obligations of ACPI and
-------------------
Vista herein set forth will survive the consummation any merger, purchase or
sale, tender offer, or other transaction involving ACPI (whether or not ACPI is
the surviving corporation); is intended to benefit ACPI and the Indemnified
Parties; will be binding on all successors and assigns of ACPI; and may not be
amended, modified, terminated, or otherwise changed in any respect that would
adversely affect the rights and protections afforded the Indemnified Parties
hereunder, without the written consent of each Indemnified Party so affected.
2
<PAGE>
To acknowledge and accept the foregoing terms and conditions please execute
the enclosed two copies of this Letter Agreement in the space provided below and
return one copy to me, retaining the other copy for your records.
Very truly yours,
VISTA 2000, INC.
By: /s/ RICHARD P. SMYTH
________________________________________
Name: Richard P. Smyth
______________________________________
Title: Chairman & CEO
_____________________________________
The foregoing terms and conditions
are hereby acknowledged and accepted
by the undersigned on this 29th
day of August, 1995.
AMERICAN CONSUMER PRODUCTS, INC.
By: /s/ STEPHAN W. COLE
_________________________________
Name: Stephan W. Cole
_______________________________
Title: President
______________________________
3
<PAGE>
AGREEMENT FOR THE SALE
AND PURCHASE OF REAL ESTATE
---------------------------
THIS AGREEMENT, entered into this 29th day of August, 1995, by and among
31100 Solon Road, Inc. an Ohio Corporation (hereinafter referred to as
"Seller"); and Vista 2000, Inc., a Delaware Corporation (hereinafter referred to
as "Purchaser").
W I T N E S S E T H:
-------------------
FOR AND IN CONSIDERATION of the sum of TEN AND NO/100 DOLLARS ($10.00),
the mutual covenants contained herein, and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
parties hereto, intending to be legally bound, agree as follows:
1. PURCHASE AND SALE
-----------------
Upon the terms and conditions hereinafter set forth, Seller agrees to
sell and Purchaser agrees to purchase all that tract or parcel of land located
in the City of Solon, County of Cuyahoga and State of Ohio, and being more
particularly described in Exhibit "A" attached hereto and by this reference made
a part hereof together with the buildings and improvements thereon (hereinafter
referred to as the "Property").
2. SELLER'S COOPERATION
--------------------
Seller agrees to provide copies of any surveys, appraisals, studies,
title documents or other information reasonably requested by Purchaser or any of
Purchaser's Lenders, within ten days of the date of a written request for such
information from Purchaser.
3. PURCHASE PRICE
--------------
3.1 The Purchase Price for the Property to be paid by Purchaser to
Seller at the Closing and consummation of the purchase and sale of the Property
as contemplated herein (hereinafter referred to as the "Closing" and the date of
such Closing hereinafter referred to as the "Closing Date") shall be the lesser
of $5,000,000.00 or the fair market value of the Property as determined by the
average of two appraisals of the Property performed by qualified independent
appraisers; provided, however, that if the average of two (2) appraisals is less
than $4,750,000.00, then Seller shall have the right to terminate this
Agreement, which rights shall be exercised by written notice to Purchaser within
ten (10) days after receipt of such appraisals. Purchaser shall choose three
appraisers licensed in the State of Ohio with designations of ASA or MAI.
3.2 The Purchase Price shall be payable in cash at Closing.
4. SURVEY
------
Purchaser shall cause to be prepared, at Purchaser's expense, an
accurate survey of the Property by a surveyor registered under the laws of the
State of Ohio reasonably acceptable to Seller (hereinafter referred to as the
"Survey"). The Survey shall contain a computation of the acreage of the Property
to the nearest one-hundredth (1/100th) of an acre, less any portion of the
Property within (i) the right-of-way of any road way, and (ii) any transmission
easements (the number of acres contained in the Property is hereinafter referred
to as the "Surveyed Acres"). Purchaser shall deliver one (1) print of the
Survey, together with a legally sufficient description of the
<PAGE>
metes and bounds of the Property based on the Survey, to Seller no later than
one (1) day prior to the Closing, where-upon said description shall become a
part of this Agreement without the necessity of any further action by any of the
parties hereto, and said description shall replace and supersede the description
of the property attached hereto as Exhibit "A." Notwithstanding the foregoing,
however, to the extent that the revised legal description differs from that
contained in Exhibit "A", Seller shall only be required to deliver a Limited
Warranty Deed containing the legal description contained in Exhibit "A", and
Seller shall deliver a Quitclaim Deed containing the revised legal description.
5. CLOSING
-------
The Closing shall be held on or before fourty five (45) days after the
Date of the Completion of the Tender Offer, as hereinafter defined.The exact
time, the place of Closing and the Closing Date shall be selected by Purchaser
by notice to Seller not less than five (5) days prior to the Closing Date. If
no such selection is timely made, the Closing shall be held at 10:00 A.M. on the
last possible business date for closing under this Agreement at the offices of
Seller's counsel, or at such other place as Purchaser and Seller may agree upon
in writing.
6. CONVEYANCE OF TITLE
-------------------
6.1 At the Closing, Seller shall convey to Purchaser "good and
marketable fee simple title" to the Property by Limited Warranty Deed. "Good
and marketable, fee simple title" shall be such title as is acceptable to a
reasonable purchaser using Ohio title standards, as the criteria to
marketability of the title required hereby, and is insurable by a title
insurance company acceptable to Purchaser at standard rates and without
exception other than the Permitted Exceptions as defined herein.
6.2 Title to the Property shall be conveyed by Seller to Purchaser
free of all liens, leases and encumbrances with the following exceptions (which
exceptions are hereinafter referred to as the "Permitted Exceptions"):
(i) current city, state and county ad valorem property and
sanitary sewer taxes not yet due and payable;
(ii) general utility, sewerage and drainage easements affecting
the Property which do not materially interfere with Purchaser's intended
use of the Property; and that certain Sublease, dated February 24, 1988, by
and between Seller and American Consumer Products, Inc. ("ACPI"), a
memorandum of which was recorded in Volume 88-0763, at Page 35, et seq. of
-- ----
Cuyahoga County Records, as amended by that certain First Amendment to
Sublease, dated August 31, 1989, by and between Seller and ACPI, a
memorandum of which was recorded in Volume 89-4812 at Page 45, et seq. of
-- ----
Cuyahoga County Records (as so amended, the "ACPI Lease").
6.3 At the Closing, Seller shall execute and deliver to Purchaser a
certificate with respect to Seller's non-foreign status sufficient to comply
with the requirements of Section 1445 of the Internal Revenue Code, commonly
known as the Foreign Investment in Real Property Tax Act of 1980, and all
regulations applicable thereto (collectively referred to as "FIRPTA").
6.4 At the Closing, Seller shall execute and deliver such other
documents as Purchaser may reasonably require to effect or complete the
transaction contemplated by this Agreement and to obtain an owner's policy of
title insurance insuring Purchaser's
-2-
<PAGE>
title through the date of the indexing of the recording of Purchaser's deed. At
the Closing, Seller and Purchaser shall execute and deliver an Assignment and
Assumption of Lease Agreement, in form and substance reasonably satisfactory to
Seller and Purchaser, whereby Seller shall assign, and Purchaser shall assume,
all of Seller's rights and obligations under the ACPI Lease
7. TITLE EXAMINATION
-----------------
Purchaser shall have until Closing in which to search title to the
property and in which to furnish Seller with a written statement of any title
objections affecting the marketability of said title other than the Permitted
Exceptions. Seller shall have until Closing to satisfy all valid title
objections, and if Seller fails to satisfy such valid objections, then, at the
option of Purchaser, evidenced by written notice to Seller, Purchaser (i) may
choose to terminate this Agreement, or (ii) may elect to close and shall receive
the deed required herein from Seller irrespective of such title objections
without reduction of the Purchase Price, except that judgments of record,
existing mortgages and outstanding taxes may be paid by Purchaser at Closing out
of the Purchase Price. Purchaser shall also have the right to examine title to
the Property at any time up to Closing and object to any title matters affecting
the Property and arising or first discovered after the date of the examination
set forth above.
8. PRORATIONS
----------
At the Closing, all ad valorem property taxes, water and sewer charges
and assessments of any kind on the Property for the year of the Closing shall be
prorated between Purchaser and Seller as of midnight of the day prior to the
Closing; provided, however, there shall be no proration of any of the foregoing
items to the extent that ACPI is obligated to pay such items under the ACPI
Lease. Such proration shall be based upon the latest ad valorem property tax,
water, sewer charge and assessment bills available; and if such bills cover
other property than the Property, then such proration shall also be based on the
fraction obtained when the number of acres of the Property is divided by the
number of acres of property so covered by such bills. If, upon receipt of the
actual ad valorem property tax, water, sewer and assessment bills for the
Property, such proration is incorrect, then either Purchaser or Seller shall be
entitled, upon demand, to receive such amounts from the other as may be
necessary to correct such malapportionment; provided, however, there shall be no
proration of any of the foregoing items to the extent that ACPI is obligated to
pay such items under the ACPI Lease. This obligation so to correct such
malapportionment shall survive the Closing and not be merged into any documents
delivered pursuant to the Closing. The parties shall prorate all rents under
the ACPI Lease at the Closing.
9. INSPECTION
----------
9.1 Purchaser shall have the privilege at all reasonable times and
upon reasonable prior notice to seller, during the term of this Agreement to go
upon the Property with Purchaser's agents, representatives or designees to
inspect, examine and survey the Property. Purchaser indemnifies and holds
Seller harmless from and against loss or damage Seller may incur and any and all
liens that may arise as a result of Purchaser's activities or the activities of
Purchaser's agents, representatives or designees on the Property and against any
and all claims for death or injury to persons or properties arising out of or
connected with Purchaser's (or its agents, representatives or designees) going
upon the Property pursuant to the provisions of this Paragraph 9 or
-3-
<PAGE>
otherwise, and against all costs, expenses and liability occurring in or in
connection with any such claim or proceeding brought thereon, including, without
limitation, court costs and reasonable attorney's fees. This indemnity shall
survive the Closing or any termination of this Agreement.
9.2 Except as set forth in Section 17 hereof, Purchaser acknowledges
and agrees that neither Seller nor any officer, employee or agent of Seller has
made any representation or warranty, express or implied, as to the condition,
quantity, design, merchantability, fitness or quality of the Property or any
portion thereof. Purchaser agrees to accept the Property and all portions
thereof on the Closing Date "AS IS, WHERE IS", subject to ordinary wear and
tear and to Purchaser's right to terminate this Agreement as otherwise expressly
set forth herein. Purchaser further acknowledges that Seller has not been in
occupancy of the Property and that the Property has been exclusively occupied by
ACPI pursuant to the ACPI Lease. In the event of loss by fire or other
casualty, the provisions of Section 11 shall apply.
10. NOTICES
-------
All notices, demands, deliveries of surveys, and any and all other
communications that may be or are required to be given to or made by either
party to the other in connection with this Agreement shall be in writing and
shall be deemed to have been properly given if delivered in person or sent by
registered or certified mail, return receipt requested, to the addresses set out
below or at such other addresses as specified by written notice and delivered in
accordance herewith:
TO SELLER: 31100 Solon Road, Inc.
---------
31100 Solon Road
Solon, Ohio 44139
ATTN: Stephan W. Cole, President
With a Copy to: Thompson, Hine & Flory
110 National City Bank Building
Cleveland, Ohio 44114
ATTN: Patricia S. Sweeney, Esq.
TO PURCHASER: Vista 2000, Inc.
------------
11660 Alpharetta Highway
Suite 330
Roswell, Georgia 30076
With a Copy to: J. Brian O'Neil
Moore & Rogers, LLC
Attorneys at Law
192 Anderson Street
Marietta, Georgia 30060
For purposes of this Agreement, the time of actual delivery, as evidenced
by a signed receipt therefor, if made in person, or three (3) days after the
date of postmark, if by mail, shall be deemed the date of any notice, demand or
delivery.
11. CONDEMNATION/CASUALTY
---------------------
If prior to the Closing of the sale contemplated herein any material
portion of the Property is (i) damaged by fire, or other casualty, and such
damaged portion of the Property is not repaired or replaced prior to the
Closing, or (ii) subject to a bona fide threat of condemnation by a body having
the power of eminent domain or condemnation, or sale in lieu thereof, Purchaser
may elect to terminate this Agreement by giving the Seller notice to such effect
within ten (10) days after receipt of notice of such occurrence [with the
Closing Date to be postponed, if necessary, to give both parties the benefit of
the full ten (10)
-4-
<PAGE>
day period], and both parties shall be relieved and released of and from any and
all further liability hereunder (other than any liability or indemnity that by
the express terms hereof survives any termination of this Agreement), and the
Title Company shall forthwith return to Purchaser all amounts deposited by
Purchaser, whereupon this Agreement shall be terminated. If Purchaser elects
not to terminate, this Agreement shall remain in full force and effect and the
purchase contemplated herein, less any property taken by eminent domain or
condemnation or under threat of being so taken, shall be effected without
reduction in the Purchase Price, and Seller shall, at the Closing, assign,
transfer and set over unto Purchaser all of Seller's right, title and interest
in and to any insurance proceeds or any awards paid or payable for such taking.
12. NO BROKER
---------
Seller and Purchaser each warrant to the other than no real estate
broker or agent is entitled to a commission as a result of the transaction
contemplated herein. Each party hereby indemnifies and agrees to hold harmless
the other from any claim by any real estate agent or broker for any commission
as a result of this transaction, which claim is caused or produced by such
party.
13. ASSIGNMENT
----------
Purchaser shall have no right to assign this Agreement without the
written consent of Seller, which consent shall not be unreasonably withheld or
delayed; provided, however, that Purchaser shall have the right to assign this
Agreement to any person(s), partnership or corporation, controlling, controlled
by or under common control with Purchaser without the consent of Seller, and the
transaction contemplated by this Agreement shall be consummated in the name of
such assignee. In the event of such assignment, the assignee shall assume the
obligations of Purchaser under this Agreement, and Purchaser shall have no
further obligation or liability under this Agreement.
14. DEFAULT
-------
In the event the transaction contemplated hereby is not closed because
of default by either party hereto, the non-defaulting party shall have all
rights and remedies available at law or in equity for the other party's breach.
15. PURCHASER'S CONTINGENCIES
-------------------------
This Agreement shall be contingent upon Purchaser's completion of the
purchase of the stock of American Consumer Products, Inc. pursuant to the tender
offer to be commenced by Purchaser on or about August 29, 1995, as the same may
be amended from time to time (herein referred to as the "Completion of the
Tender Offer").
16. ZONING OF THE PROPERTY
----------------------
Seller warrants and represents that the Property is zoned for its
current use and will remain so zoned as of the date of the Closing.
17. SELLER'S AGREEMENTS
-------------------
17.1 From and after the date of this Agreement to the date and time
of Closing, Seller shall not, without the prior
-5-
<PAGE>
written consent of Purchaser, convey any portion of the Property or any rights
therein, nor enter into any conveyance, lease, security document, easement or
other agreement or amendment to agreement granting to any person or entity any
rights with respect to the Property or any part thereof, or any interest
whatsoever therein, or any option thereto, and any such conveyance or other
agreement entered into in violation of this shall be null and void and of no
force or effect.
17.2 Seller warrants, represents and agrees that:
(i) Seller is the owner of the Property as of the date of this
Agreement.
(ii) To Seller's knowledge, no condemnation proceeding is
pending or threatened with respect to any part of the Property.
(iii) To Seller's knowledge, the Property is not now used, and
has never been used, as a garbage or refuse dump site, a landfill, a waste
disposal facility, a transfer station, or any other type of facility for
the storage, processing, treatment or temporary or permanent disposal of
waste materials, including, without limitation, solid, industrial, toxic,
hazardous, radioactive, nuclear or putrescible waste, or sewage; and there
are no underground storage tanks of any kind or nature located on the
Property as defined in the Comprehensive Environmental Response
Compensation and Liability Act, as amended (42 U.S.C. (S)9601, et seq.).
Seller shall affirm these warranties, representations and agreements
at (and as of the date of) Closing.
18. SURVIVAL AND TERMINATION
------------------------
The provisions of this Agreement concerning Purchaser's entering upon
the Property and any other provisions expressly so indicated shall survive
termination of this Agreement.
19. POSSESSION
----------
Seller shall deliver possession of the Property to Purchaser at
Closing subject to the ACPI Lease.
20. MISCELLANEOUS
-------------
20.1 This Agreement shall be construed and interpreted under the Laws
of the State of Ohio.
20.2 Purchaser shall pay all closing costs incident to the
transaction contemplated herein; provided, however, that Seller shall pay
any transfer tax, documentary stamp tax or other such tax required by
governments in Ohio on the limited warranty deed and Seller's attorneys'
fees.
20.3 To the extent any rights, powers or privileges are expressly
stipulated herein, such rights, powers and privileges shall be restrictive
of those given by law.
20.4 No failure of Purchaser or Seller to exercise any power given
either party hereunder or to insist upon strict compliance by either party
or its obligations hereunder, and no custom or practice of the parties at
variance with the terms hereof shall constitute a waiver of either party's
right to demand exact compliance with the terms hereof. Any condition or
right of termination or rescission granted by
-6-
<PAGE>
this Agreement to either Purchaser or Seller may be waived in writing by
the party for whose benefit such condition or right was granted.
20.5 Time is of the essence in complying with the terms, conditions
and agreements of this Agreement.
20.6 This Agreement contains the entire agreement of the parties
hereto with respect to the subject matter hereof and no representations,
inducements, promises or agreements, oral or otherwise, between the parties
and not expressly stated herein, shall be of any force or effect.
20.7 This Agreement shall be binding upon and shall inure to the
benefit of the parties hereto, their respec-tive heirs, legal
representatives, successors and permitted assigns.
20.8 Except as expressly provided in Section 4 hereof, any amendment
to this Agreement shall not be binding upon Purchaser and Seller unless
such amendment is in writing duly executed by both Purchaser and Seller.
Escrow Agent need not be a party to amendments to this Agreement, provided
such amendments do not materially affect or impair its rights or duties
hereunder.
20.9 This Agreement may be executed in separate counterparts. It
shall be fully executed when each party whose signature is required has
signed at least one counterpart even though no one counterpart contains the
signatures of all the parties.
20.10 Upon Purchaser's execution and delivery of this Agreement to
Seller, this Agreement shall be deemed an offer by Purchaser to Seller open
for acceptance until 5:00 P.M. on the 5th day of September, 1995, by which
time a fully executed copy of this Agreement must be delivered by Seller to
Purchaser. Otherwise, this offer shall be terminated and of no further
force or effect.
IN WITNESS WHEREOF, Seller and Purchaser and have caused this instrument to
be executed under seal as of the day and year first above written.
Signed, Sealed and Delivered SELLER: 31100 SOLON ROAD, INC.
in the presence of: ------
/s/ CYNTHIA BURMEISTER
______________________________ /s/ STEPHAN W. COLE
___________________________________
Witness By:
/s/ CAROL ANN NOBLE Date executed by Seller:
______________________________ -----------------------------------
Notary Public
[Notary Seal]
Signed, Sealed and Delivered
in the presence of: PURCHASER: VISTA 2000, INC.
---------
/s/ KATHLEEN M. KAMOS
______________________________ /s/ RICHARD P. SMYTH
__________________________________
Witness By:
/s/ CAROL ANN NOBLE
______________________________ Date executed by Purchaser:
------------------------------
Notary Public
[Notary Seal]
-7-
<PAGE>
EXHIBIT A
---------------
PARCEL NO. 1:
Situated in the City of Solon, County of Cuyahoga and State of Ohio and known as
being part of Original Solon Township Lots Nos. thirteen (13) and fourteen (14),
Tract No. 2 and being more particularly bounded and described as follows:
Commencing at the intersection of the centerline of Solon Road (sixty (60) feet
wide) with the centerline of Cochran Road (sixty (60) feet wide), thence due
east two thousand two hundred thirty (2,230) feet along said centerline of Solon
Road to the northeasterly corner of parcel of land conveyed to Hoover Ball and
Bearing Company by deed recorded in Volume 121/4, Page 323, of Cuyahoga County
deed records, and being the point of beginning;
Thence along the easterly line of said Hoover Ball and Bearing Company land
south zero degrees, forty-five minutes, two seconds west (5 0\o\-45'-02"W) one
thousand two hundred ninety and ninety-five one-hundredths (1290.95) feet to an
iron pin;
Thence continuing along the easterly line of said Hoover Ball and Bearing
Company land south sixty degrees, eighteen minutes, thirty-two seconds east (S
60\o\-18'-32" E) two hundred ten and ninety-nine one-hundredths (210.99) feet to
an iron pin on the northerly line of a parcel of land conveyed to The Wheeling
and Lake Erie Railway Company by deed recorded in Volume 9037, Page 8 of
Cuyahoga County deed records;
Thence south eighty-nine degrees, fifty-four minutes, fifty seconds east (S
89\o\-54'-50" E) along said northerly line of The Wheeling and Lake Erie Railway
Company land four hundred fifty and zero one-hundredths (450.00) feet to a
point;
Thence north sixty degrees, eighteen minutes, thirty-two seconds west (N
60\o\-18'-32" W) two hundred ten and ninety-nine one-hundredths (210.99) feet to
a point;
Thence north zero degrees, forty-five minutes, two seconds east (N 0\o\-45'-02"
E) one thousand two hundred ninety-one and
<PAGE>
sixty-two one hundredths (1291.62) feet to a point in the centerline of said
Solon Road;
Thence due west four hundred fifty and zero one-hundredths (450.00) feet along
the centerline of said Solon Road to the point of beginning.
PARCEL NO. 2:
Situated in the City of Solon, County of Cuyahoga and State of Ohio, and known
as being part of Original Solon Township Lots No. thirteen (13) and fourteen
(14), Tract No. 2 and being more particularly bounded and described as follows:
Beginning at a point in the centerline of Solon Road, 60 feet wide, distant due
East, along the centerline of Solon Road, a distance of 2,680.00 feet from an
iron monument at its intersection with the centerline of Cochran Road, 60 feet
wide; thence due East along the centerline of Solon Road, 80.00 feet to a point
therein; thence South 0\o\ 45' 02" West and passing through an iron pin set in
the Southerly line of Solon Road, a distance of 1,336.90 feet to an iron pin
set; thence North 60\o\ 18' 32" West, a distance of 91.41 feet to an iron pin
found; thence North 00\o\ 45' 02" East and passing through an iron pin found in
the Southerly line of Solon Road, a distance of 1,291.62 feet to the place of
beginning.
<PAGE>
AGREEMENT FOR THE SALE
AND PURCHASE OF REAL ESTATE
---------------------------
THIS AGREEMENT, entered into this 29th day of August, 1995, by and among
CRS Limited Partnership, (hereinafter referred to as "Seller"); and Vista 2000,
Inc., a Delaware Corporation (hereinafter referred to as "Purchaser").
W I T N E S S E T H:
-------------------
FOR AND IN CONSIDERATION of the sum of TEN AND NO/100 DOLLARS ($10.00),
the mutual covenants contained herein, and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
parties hereto, intending to be legally bound, agree as follows:
1. PURCHASE AND SALE
-----------------
Upon the terms and conditions hereinafter set forth, Seller agrees to
sell and Purchaser agrees to purchase all that tract or parcel of land located
in the Northeast Quarter of the Northwest Quarter of Section 19, Township 16
North, Range 4 West of the Third Principal Meridian, Sangamon County, Illinois,
and being more particularly described in Exhibit "A" attached hereto and by this
reference made a part hereof together with the buildings and improvements
thereon (hereinafter referred to as the "Property").
2. SELLER'S COOPERATION
--------------------
Seller agrees to provide copies of any surveys, appraisals, studies,
title documents or other information reasonably requested by Purchaser or any of
Purchaser's Lenders, within ten days of the date of a written request for such
information from Purchaser.
3. PURCHASE PRICE
--------------
3.1 The Purchase Price for the Property to be paid by Purchaser to
Seller at the Closing and consummation of the purchase and sale of the Property
as contemplated herein (hereinafter referred to as the "Closing" and the date of
such Closing hereinafter referred to as the "Closing Date") shall be the fair
market value of the Property as determined by the average of two appraisals of
the Property performed by qualified independent appraisers; provided, however,
that if the average of the two (2) appraisals is less than $1,700,000, then
Seller shall have the right to terminate this Agreement, which rights shall be
exercised by written notice to purchaser within 10 days after receipt of such
appraisals. Purchaser shall choose three appraisers licensed in the State of
Illinois with designations of ASA or MAI.
3.2 The Purchase Price shall be payable in cash at Closing.
4. SURVEY
------
Purchaser shall cause to be prepared, at Purchaser's expense, an
accurate survey of the Property by a surveyor registered under the laws of the
State of Illinois reasonably acceptable to Seller (hereinafter referred to as
the "Survey"). The Survey shall contain a computation of the acreage of the
Property to the nearest one-hundredth (1/100th) of an acre, less any portion of
the Property within (i) the right-of-way of any road way, and (ii) any
transmission easements (the number of acres contained in the Property is
hereinafter referred to as the
<PAGE>
"Surveyed Acres"). Purchaser shall deliver one (1) print of the Survey,
together with a legally sufficient description of the metes and bounds of the
Property based on the Survey, to Seller no later than one (1) day prior to the
Closing, where-upon said description shall become a part of this Agreement
without the necessity of any further action by any of the parties hereto, and
said description shall replace and supersede the description of the property
attached hereto as Exhibit "A". Notwithstanding the foregoing, however, to the
extent that the revised legal description differs from that contained in Exhibit
"A", Seller shall only be required to deliver a Limited Warranty Deed containing
the legal description contained in Exhibit "A", and Seller shall deliver a
Quitclaim Deed containing the revised legal description.
5. CLOSING
-------
The Closing shall be held on or before forty five (45) days after the
Date of the Completion of the Tender Offer, as hereinafter defined. The exact
time, the place of Closing and the Closing Date shall be selected by Purchaser
by notice to Seller not less than five (5) days prior to the Closing Date. If
no such selection is timely made, the Closing shall be held at 10:00 A.M. on the
last possible business date for closing under this Agreement at the Seller's
office, or at such other place as Purchaser and Seller may agree upon in
writing.
6. CONVEYANCE OF TITLE
-------------------
6.1 At the Closing, Seller shall convey to Purchaser "good and
marketable fee simple title" to the Property by Limited Warranty Deed. "Good
and marketable, fee simple title" shall be such title as is acceptable to a
reasonable purchaser using Illinois title standards, as the criteria to
marketability of the title required hereby, and is insurable by a title
insurance company acceptable to Purchaser at standard rates and without
exception other than the Permitted Exceptions as defined herein.
6.2 Title to the Property shall be conveyed by Seller to Purchaser
free of all liens, leases and encumbrances with the following exceptions (which
exceptions are hereinafter referred to as the "Permitted Exceptions"):
(i) current city, state and county ad valorem property and
sanitary sewer taxes not yet due and payable;
(ii) general utility, sewerage and drainage easements affecting
the Property which do not materially interfere with Purchaser's intended
use of the Property; and
(iii) that certain Agreement of Lease dated June 27, 1989, by and
between Seller and Boss Manufacturing Company ("Boss"), a memorandum of
which was recorded in Volume _____ at Page ___,et seq. of _____________
-- ---
County Records (the "Boss Lease").
6.3 At the Closing, Seller shall execute and deliver to Purchaser a
certificate with respect to Seller's non-foreign status sufficient to comply
with the requirements of Section 1445 of the Internal Revenue Code, commonly
known as the Foreign Investment in Real Property Tax Act of 1980, and all
regulations applicable thereto (collectively referred to as "FIRPTA").
6.4 At the Closing, Seller shall execute and deliver such other
documents as Purchaser may reasonably require to effect or complete the
transaction contemplated by this Agreement and to obtain an owner's policy of
title insurance insuring Purchaser's
-2-
<PAGE>
title through the date of the indexing of the recording of Purchaser's deed.
6.5 At the Closing, Seller and Purchaser shall execute and deliver an
Assignment and Assumption of Lease Agreement, in form and substance reasonably
satisfactory to Seller and Purchaser, whereby Seller shall assign, and Purchaser
shall assume, all of Seller's rights and obligations under the Boss Lease.
7. TITLE EXAMINATION
-----------------
Purchaser shall have until Closing in which to search title to the
property and in which to furnish Seller with a written statement of any title
objections affecting the marketability of said title other than the Permitted
Exceptions. Seller shall have until Closing to satisfy all valid title
objections, and if Seller fails to satisfy such valid objections, then, at the
option of Purchaser, evidenced by written notice to Seller, Purchaser (i) may
choose to terminate this Agreement, or (ii) may elect to close and shall receive
the deed required herein from Seller irrespective of such title objections
without reduction of the Purchase Price, except that judgments of record,
existing mortgages and outstanding taxes may be paid by Purchaser at Closing out
of the Purchase Price. Purchaser shall also have the right to examine title to
the Property at any time up to Closing and object to any title matters affecting
the Property and arising or first discovered after the date of the examination
set forth above.
8. PRORATIONS
----------
At the Closing, all ad valorem property taxes, water and sewer charges
and assessments of any kind on the Property for the year of the Closing shall be
prorated between Purchaser and Seller as of midnight of the day prior to the
Closing; provided, however, there shall be no proration of any of the foregoing
items to the extent that Boss is obligated to pay such items under the Boss
Lease. Such proration shall be based upon the latest ad valorem property tax,
water, sewer charge and assessment bills available; and if such bills cover
other property than the Property, then such proration shall also be based on the
fraction obtained when the number of acres of the Property is divided by the
number of acres of property so covered by such bills. If, upon receipt of the
actual ad valorem property tax, water, sewer and assessment bills for the
Property, such proration is incorrect, then either Purchaser or Seller shall be
entitled, upon demand, to receive such amounts from the other as may be
necessary to correct such malapportionment; provided, however, there shall be no
proration of any of the foregoing items to the extent that Boss is obligated to
pay such items under the Boss Lease. This obligation so to correct such
malapportionment shall survive the Closing and not be merged into any documents
delivered pursuant to the Closing. The parties shall prorate all rents under
the Boss Lease at the Closing.
9. INSPECTION
----------
9.1 Purchaser shall have the privilege at all reasonable times and
upon reasonable prior notice to Seller, any time during the term of this
Agreement to go upon the Property with Purchaser's agents, representatives or
designees to inspect, examine and survey the Property. Purchaser indemnifies and
holds Seller harmless from and against loss or damage Seller may incur and any
and all liens that may arise as a result of Purchaser's activities or the
activities of Purchaser's agents, representatives or designees on the Property
and against any and
-3-
<PAGE>
all claims for death or injury to persons or properties arising out of or
connected with Purchaser's (or its agents, representatives or designees) going
upon the Property pursuant to the provisions of this Paragraph 9 or otherwise,
and against all costs, expenses and liability occurring in or in connection with
any such claim or proceeding brought thereon, including, without limitation,
court costs and reasonable attorney's fees. This indemnity shall survive the
Closing or any termination of this Agreement.
9.2 Except as set forth in Section 17 hereof, Purchaser acknowledges
and agrees that neither Seller nor any officer, employee or agent of Seller has
made any representation or warranty, express or implied, as to the condition,
quantity, design, merchantability, fitness or quality of the Property or any
portion thereof. Purchaser agrees to accept the Property "AS IS, WHERE IS",
subject to ordinary wear and tear and to Purchaser's right to terminate this
Agreement as otherwise expressly set forth herein. Purchaser further
acknowledges that Seller has not been in occupancy of the Property and that the
Property has been exclusively occupied by Boss pursuant to the Boss Lease. In
the event of loss by fire or other casualty, the provisions of Section 11 shall
apply.
10. NOTICES
-------
All notices, demands, deliveries of surveys, and any and all other
communications that may be or are required to be given to or made by either
party to the other in connection with this Agreement shall be in writing and
shall be deemed to have been properly given if delivered in person or sent by
registered or certified mail, return receipt requested, to the addresses set out
below or at such other addresses as specified by written notice and delivered in
accordance herewith:
TO SELLER: CRS Limited Partnership
---------
29001 Cedar Road
Cleveland, Ohio 44124
ATTN: Dan K. Silverberg
With a Copy to: Thompson, Hine & Flory
1100 National City Bank Building
Cleveland, Ohio 44114
ATTN: Patrick J. Sweeney, Esq.
TO PURCHASER: Vista 2000, Inc.
------------
11660 Alpharetta Highway
Suite 330
Roswell, Georgia 30076
With a Copy to: J. Brian O'Neil
Moore & Rogers, LLC
Attorneys at Law
192 Anderson Street
Marietta, Georgia 30060
For purposes of this Agreement, the time of actual delivery, as evidenced
by a signed receipt therefor, if made in person, or three (3) days after the
date of postmark, if by mail, shall be deemed the date of any notice, demand or
delivery.
-4-
<PAGE>
11. CONDEMNATION/CASUALTY
---------------------
If prior to the Closing of the sale contemplated herein any material
portion of the Property is (i) damaged by fire, or other casualty and such
damaged portion of the Property is not repaired or replaced prior to the
Closing, or (ii) subject to a bona fide threat of condemnation by a body having
the power of eminent domain or condemnation, or sale in lieu thereof, Purchaser
may elect to terminate this Agreement by giving the Seller notice to such effect
within ten (10) days after receipt of notice of such occurrence [with the
Closing Date to be postponed, if necessary, to give both parties the benefit of
the full ten (10) day period], and both parties shall be relieved and released
of and from any and all further liability hereunder (other than any liability or
indemnity that by the express terms hereof survives any termination of this
Agreement), and the title company shall forthwith return to Purchaser all
amounts deposited by Purchaser whereupon this Agreement shall be terminated. If
Purchaser elects not to terminate, this Agreement shall remain in full force and
effect and the purchase contemplated herein, less any property taken by eminent
domain or condemnation or under threat of being so taken, shall be effected
without reduction in the Purchase Price, and Seller shall, at the Closing,
assign, transfer and set over unto Purchaser all of Seller's right, title and
interest in and to any insurance proceeds or any awards paid or payable for such
taking.
12. NO BROKER
---------
Seller and Purchaser each warrant to the other than no real estate
broker or agent is entitled to a commission as a result of the transaction
contemplated herein. Each party hereby indemnifies and agrees to hold harmless
the other from any claim by any real estate agent or broker for any commission
as a result of this transaction, which claim is caused or produced by such
party.
13. ASSIGNMENT
----------
Purchaser shall have no right to assign this Agreement without the
written consent of Seller, which consent shall not be unreasonably withheld or
delayed; provided, however, that Purchaser shall have the right to assign this
Agreement to any person(s), partnership or corporation, controlling, controlled
by or under common control with Purchaser without the consent of Seller, and the
transaction contemplated by this Agreement shall be consummated in the name of
such assignee. In the event of such assignment, the assignee shall assume the
obligations of Purchaser under this Agreement, and Purchaser shall have no
further obligation or liability under this Agreement.
14. DEFAULT
-------
In the event the transaction contemplated hereby is not closed because
of default by either party hereto the non-defaulting party shall have all rights
and remedies available at law or in equity for the other party's breach.
15. PURCHASER'S CONTINGENCIES
-------------------------
This Agreement shall be contingent upon Purchaser's completion of the
purchase of the stock of American Consumer Products, Inc. pursuant to the tender
offer to be commenced by Purchaser on or about August 29, 1995 (herein referred
to as the "Completion of the Tender Offer"), as the same may be amended from
time to time.
-5-
<PAGE>
16. ZONING OF THE PROPERTY
----------------------
Seller warrants and represents that the Property is zoned for its
current use and will remain so zoned as of the date of the Closing.
17. SELLER'S AGREEMENTS
-------------------
17.1 From and after the date of this Agreement to the date and time
of Closing, Seller shall not, without the prior written consent of Purchaser,
convey any portion of the Property or any rights therein, nor enter into any
conveyance, lease, security document, easement or other agreement or amendment
to agreement granting to any person or entity any rights with respect to the
Property or any part thereof, or any interest whatsoever therein, or any option
thereto, and any such conveyance or other agreement entered into in violation of
this shall be null and void and of no force or effect.
17.2 Seller warrants, represents and agrees that:
(i) Seller is the owner of the Property as of the date of this
Agreement.
(ii) To Seller's knowledge, no condemnation proceeding is
pending or threatened with respect to any part of the Property.
(iii) To Seller's knowledge, the Property is not now used, and
has never been used, as a garbage or refuse dump site, a landfill, a waste
disposal facility, a transfer station, or any other type of facility for
the storage, processing, treatment or temporary or permanent disposal of
waste materials, including, without limitation, solid, industrial, toxic,
hazardous, radioactive, nuclear or putrescible waste, or sewage; and there
are no underground storage tanks of any kind or nature located on the
Property as defined in the Comprehensive Environmental Response
Compensation and Liability Act, as amended (42 U.S.C. (S)9601, et seq.).
Seller shall affirm these warranties, representations and agreements
at (and as of the date of) Closing.
18. SURVIVAL AND TERMINATION
------------------------
18.1 The provisions of this Agreement concerning Purchaser's entering
upon the Property and any other provisions expressly so indicated shall survive
termination of this Agreement.
19. POSSESSION
----------
Seller shall deliver possession of the Property to Purchaser at
Closing subject to the Boss Lease.
20. MISCELLANEOUS
-------------
20.1 This Agreement shall be construed and interpreted under the Laws
of the State of Illinois.
20.2 Purchaser shall pay all closing costs incident to the
transaction contemplated herein; provided, however, that Seller shall pay any
transfer tax, documentary stamp tax or other such tax required by governments in
Illinois on the limited warranty deed and Seller's attorneys' fees.
-6-
<PAGE>
20.3 To the extent any rights, powers or privileges are expressly
stipulated herein, such rights, powers and privileges shall be restrictive of
those given by law.
20.4 No failure of Purchaser or Seller to exercise any power given
either party hereunder or to insist upon strict compliance by either party or
its obligations hereunder, and no custom or practice of the parties at variance
with the terms hereof shall constitute a waiver of either party's right to
demand exact compliance with the terms hereof. Any condition or right of
termination or rescission granted by this Agreement to either Purchaser or
Seller may be waived in writing by the party for whose benefit such condition or
right was granted.
20.5 Time is of the essence in complying with the terms, conditions
and agreements of this Agreement.
20.6 This Agreement contains the entire agreement of the parties
hereto with respect to the subject matter hereof and no representations,
inducements, promises or agreements, oral or otherwise, between the parties and
not expressly stated herein, shall be of any force or effect.
20.7 This Agreement shall be binding upon and shall inure to the
benefit of the parties hereto, their respective heirs, legal representatives,
successors and permitted assigns.
20.8 Except as expressly provided in Section 4 hereof, any amendment
to this Agreement shall not be binding upon Purchaser and Seller unless such
amendment is in writing duly executed by both Purchaser and Seller. Escrow
Agent need not be a party to amendments to this Agreement, provided such
amendments do not materially affect or impair its rights or duties hereunder.
20.9 This Agreement may be executed in separate counterparts. It
shall be fully executed when each party whose signature is required has signed
at least one counterpart even though no one counterpart contains the signatures
of all the parties.
20.10 Upon Purchaser's execution and delivery of this Agreement to
Seller, this Agreement shall be deemed an offer by Purchaser to Seller open for
acceptance until 5:00 P.M. on the 5th day of September, 1995, by which time a
fully executed copy of this Agreement must be delivered by Seller to Purchaser.
Otherwise, this offer shall be terminated and of no further force or effect.
[Balance of page left intentionally blank]
-7-
<PAGE>
IN WITNESS WHEREOF, Seller and Purchaser and have caused this instrument to
be executed under seal as of the day and year first above written.
Signed, Sealed and Delivered SELLER: CRS LIMITED PARTNERSHIP
in the presence of: ------
_______________________________ __________________________________
By:
Witness
_______________________________ Date executed by Seller:
----------------------------------
Notary Public
[Notary Seal]
Signed, Sealed and Delivered PURCHASER: VISTA 2000, INC.
in the presence of: ---------
/s/ CYNTHIA BURMEISTER /s/ RICHARD P. SMYTH
_______________________________ __________________________________
By:
Witness
/s/ CAROL ANN NOBLE Date executed by Purchaser:
_______________________________ ----------------------------------
Notary Public
[Notary Seal]
-8-
<PAGE>
EXHIBIT A
Legal Description
Part of the Northeast Quarter of the Northwest Quarter of Section
19, Township 16 North, Range 4 West of the Third Principal Meridian, Sangamon
County, Illinois, described as follows:
From the intersection of the Quarter Section line and South right
of way line of Illinios S.A. Route 3, West on the aforesaid right of way line
212.39 feet; thence deflecting to the right 00\o\39'20" on aforesaid right of
way line 87.61 feet to the point of beginning, thence deflecting to the left
90\o\52'00", 794.26 feet; thence deflecting to the right 71\o\49'50", 109.56
feet to the point of curve of a curve to the right of radius of 60.00 feet;
thence Northwesterly on said curve for a chord distance of 58.53 feet; thence
deflecting to the right from the chord of the curve 29\o\11'31" 288.68 feet to
the point of curve of a curve to the right of radius of 20,00 feet; thence
Northwesterly on said curve a chord distance of 17.32 feet to the point of curve
of a curve to the left of radius of 60.00 feet; thence Northwesterly on
aforesaid curve a chord distance of 37.70 feet; thence North parallel to the
first line described 585.00 feet to the aforesaid right of way line; thence East
on the right of way line 400.00 feet to the point of beginning.
Except the coal and other minerals underlying the surface of said
land and all rights and easements in favor of the estate of said coal and
minerals.
<PAGE>
Information Agent Agreement
---------------------------
(the "Agreement")
[LOGO OF VISTA 2000 INC. APPEARS HERE]
To: Kissel-Blake Inc. CONFIDENTIAL
25 Broadway, 6th Floor ------------
New York, NY 10004
Date: August 17, 1995
Gentlemen:
Vista 2000, Inc., a Delaware corporation, proposes to purchase for cash up
to 2.5 million shares of common stock, $.01 par value (the "shares") of American
Consumer Products, Inc., a Delaware corporation, at $5.30 per share net to the
seller on the terms and subject to the conditions set forth in the Offer to
Purchase and related letter of Transmittal which together constitute the
("Offer") substantially in the form of the documents attached hereto as Exhibits
A and B, respectively.
We hereby confirm your appointment as our Information Agent in connection
with the Offer, and by your signature below you hereby confirm your acceptance
of such appointment. You hereby further agree that your authority and action as
Information Agent shall be governed by the terms of this Agreement, as follows:
1. Duties of Information Agent: It is understood and agreed that your
---------------------------
that your primary duties as our Information Agent will include (i) advice
to and confidential consultation with us and
1
<PAGE>
our authorized representative in connection with the Offer and our related
communications; (ii) disseminating printed materials relating to the Offer
(including all amendments and supplements thereto) to brokers, securities
dealers, banks, trust companies, nominees and any stockholder of the Company who
may request the same; (iii) responding promptly and accurately to every party
who contacts you as our Information Agent requesting information pertaining to
the Offer; and (iv) initiating calls to stockholders concerning the Offer
(should we so elect). In no event will you make any premature disclosure
concerning the Offer or any recommendation, either directly or indirectly,
regarding the advisability of tendering shares pursuant to the Offer. If any
such advice is requested of you, you shall respond that you are not authorized
to give such advice and shall recommend that the person requesting such advice
consult his or her own investment advisor or broker.
2. Compensation: In consideration of the services to be performed by you
------------
in connection with the Offer, we hereby agree to pay to you a fee of U.S. $6,500
plus your ordinary and customary charges for reasonable disbursements and
expenses incurred by you in connection with the Offer. It is further understood
and agreed that one half of your fee is payable herewith and the balance of your
fee plus your compensation for disbursements and expenses incurred by you on our
behalf will be paid upon receipt by us of your final statement, after
completion, expiration or termination of the Offer, provided however that should
the Offer be extended for more than forty-five (45) days, you reserve the
2
<PAGE>
right to charge an additional fee of not in excess of $3,500. We understand that
disbursements and expenses include, without limitation (i) all postage,
airfreight, trucking and other delivery costs relating to the forwarding of our
printed materials to brokerage firms, banks and any stockholder of the Company
who may request them; and (ii) $3.50 per collect or toll free telephone call
accepted (plus telephone line charges) from stockholders seeking assistance or
information. In the event we opt to have you do so, we understand that the cost
of initiating calls to stockholders of record at their homes or places of
business will be at the rate of $4.75 per call (plus telephone look up and line
charges).
We acknowledge that our obligations under this Section 2 are not
conditioned upon the successful consummation of the Offer or any number of
Shares being acquired pursuant to the Offer and that in the event of our failure
to make prompt payment of your invoices for any amounts which may become due to
you under this Agreement, you shall be entitled to recover interest compounded
at 1 1/2 percent per month and reasonable costs and expenses of collection
(including reasonable fees and expenses of counsel) on any overdue amounts from
ourselves or any affiliate which may guarantee our payment and performance at
your further request.
3. Indemnity and Failure: (a) We hereby covenant and agree to hold you
harmless and to indemnify you against any loss, claim, damage, liability or
expense (including reasonable fees and expenses of your legal counsel) arising
out of or resulting
3
<PAGE>
from the performance of your duties under this Agreement, except any such
loss, claim, damage, liability or expense arising out of or resulting from your
gross negligence or material breach of this Agreement.
(b) It is stipulated and agreed that the foregoing indemnification is
subject to the further condition that in no case shall we be liable with respect
to any claim against you unless we shall be notified by registered or certified
letter or by cable, telex, or telecopier message confirmed by letter, of the
written assertion of a claim against you or of your involvement in any action or
proceeding, promptly after you shall have been served with a written notice of
claim, summons or other first legal process giving information as to the nature
and basis of the claim. It is further understood and agreed that upon receipt of
such notice, we shall be entitled to participate at our own expense in the
defense of any suit brought to enforce any such claim, and, if we so elect, we
shall assume your defense of any such suit. In the event that we assume the
defense of any such suit, we shall not be liable for the fees and expenses of
any additional counsel thereafter retained by you, so long as we shall retain
counsel reasonably satisfactory to you to defend such suit. In addition, you
agree not to settle any litigation in connection with any claim of liability
with respect to which you may seek indemnification from us without our prior
written consent.
4. Assignment: This Agreement and the appointment as Information Agent
----------
hereunder shall inure to the benefit of, and
4
<PAGE>
the obligations created thereby shall be binding upon the successors and assigns
of the parties hereto, except that if we assign this Agreement, we shall remain
liable to you for the prompt and full payment of your fees and expenses, and you
may neither assign your rights nor delegate your duties hereunder without our
prior written consent.
5. Interpretation:
--------------
(a) This Agreement shall be construed and enforced in accordance with the
laws of the State of New York.
(b) If any provision of this Agreement shall be held illegal, invalid or
unenforceable by any court, this Agreement shall be construed and
enforced as if such provision had not been contained herein and shall
be deemed an agreement between us to the full extent permitted by
applicable law.
(c) Section headings have been inserted for convenience of reference only,
are not part of this Agreement and shall not be used in any way in the
interpretation of any of the provisions hereof.
Please acknowledge receipt of this Agreement and Exhibits hereto and
confirm the arrangements herein provided by signing and returning the enclosed
copy of the undersigned, whereupon this Agreement and the terms and conditions
herein provided shall constitute a binding agreement between us.
5
<PAGE>
Sincerely,
/s/ Richard D. Smyth
- ------------------- -------------------------------------
(Witness) (Authorized Representative)
/s/ Richard D. Smyth, Chairman & CEO
- --------------------------- -------------------------------------
(Type Full Name of Witness) (Type Full Name and Title of
Representative)
Accepted as of this
---------
day of , 19 .
- --------------------------- -------- --
(Witness) KISSEL-BLAKE INC.
By
-----------------------------
Joseph F. Spedale
Executive Vice President
- ---------------------------
(Type Full Name of Witness)
6
<PAGE>
Depositary Agreement
[LOGO OF VISTA CONFIDENTIAL
2000 INC. ------------
APPEARS HERE]
DATE: August 29, 1995
Harris Trust Company of New York
77 Water Street - 4th Floor
New York, NY 10005
Attention: Mark F. McLaughlin
Vice President
Re: Offer to Purchase
Gentlemen:
Vista 2000, Inc., a Delaware corporation (the "Purchaser"), is offering to
purchase all shares of American Consumer Products, Inc., Common Stock, $.01 par
value (the "Shares"), at $5.30 per Share net to the seller in cash, upon the
terms and conditions set forth in its Offer to Purchase dated August 18, 1995
(the "Offer to Purchase") and in the related Letter of Transmittal (which shall
include the Internal Revenue Service Form W-9), copies of which are attached
hereto as Exhibits A and B, respectively, and which together, as they may be
amended from time to time, constitute the "Offer". The "Expiration Date" for the
Offer shall be midnight, New York City Time, on September 22, 1995, unless and
until the Purchaser shall have extended the period of time for which the Offer
is open, in which event the term "Expiration Date" shall mean the latest time
and date at which the Offer, as so extended by the Purchaser from time to time
shall expire. All terms not defined herein shall have the same meaning as in the
Offer.
The Purchaser hereby agrees with you as follows:
1) Subject to the terms and conditions of this Agreement and the Offer to
Purchase, you will act as Depositary in connection with the Offer and in such
capacity are authorized and directed to accept tenders of Shares.
2)(a) Tenders of Shares may be made only as set forth in Section 2 of the
Offer to Purchase, and Shares shall be considered validly tendered to you only
if:
(i) you receive prior to the Expiration Date (X) certificates for
such Shares (or a Confirmation (as defined in paragraph (b) below) relating to
such Shares) and (Y) a properly completed and duly executed Letter of
Transmittal (or facsimile thereof) or an Agent's Message (as defined in
paragraph (b) below relating thereto, or
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<PAGE>
(ii) you receive (X) a Notice of Guaranteed Delivery (as defined in
paragraph (b) below) relating to such Shares from an Eligible Institution (as
defined in paragraph (b) below) prior to the Expiration Date and (Y)
certificates for such Shares (or a Confirmation relating to such Shares) and
either a properly completed and duly executed Letter of Transmittal (or
facsimile thereof) or an Agent's Message relating thereto within five trading
days after the date of execution of such Notice of Guaranteed Delivery. A
"trading day" is any day on which The New York Stock Exchange is open for
business.
(iii) in the case of either clause (i) or (ii) above, a final
determination of the adequacy of the items received, as provided in Section 4,
has been made by the Purchaser.
(b) For the purpose of this Agreement: (i) a "Confirmation" shall be a
confirmation of book-entry transfer of Shares into your account at The
Depository Trust Company, the Midwest Securities Trust Company or the
Philadelphia Depository Trust Company (hereinafter collectively referred to as
the "Book-Entry Transfer Facilities") to be established and maintained by you in
accordance with Section 3 hereof; (ii) a "Notice of Guaranteed Delivery" shall
be a notice of guaranteed delivery substantially in the form attached as Exhibit
C hereto or a telegram, telex, facsimile transmission or letter substantially in
such form, or if sent by a Book-Entry Transfer Facility, a message transmitted
through electronic means in accordance with the usual procedures of such Book-
Entry Transfer Facility and the Depositary, substantially in such form;
provided, however, that if such notice is sent by a Book-Entry Transfer Facility
through electronic means, it must state that such Book-Entry Transfer Facility
has received an express acknowledgment from the participant on whose behalf such
notice is given that such participant has received and agrees to become bound by
the form of such notice; (iii) an "Eligible Institution" is a participant in the
Security Transfer Agent Medallion Signature Program or the New York Stock
Exchange Medallion Signature Guarantee Program or the Stock Exchange Medallion
Program; and (iv) an "Agent's Message" shall be a message transmitted through
electronic means by a Book-Entry Transfer Facility, in accordance with the
normal procedures of such Book-Entry Transfer Facility and the Depositary, to
and received by the Depositary and forming part of a Confirmation, which states
that such Book-Entry Transfer Facility has received an express acknowledgment
from the participant in such Book-Entry Transfer Facility tendering the Shares
which are the subject of such Book-Entry Confirmation that such participant has
received and agrees to be bound by the terms of the Letter of Transmittal, and
that the Purchaser may enforce such agreement against such participant. The term
Agent's Message shall also include any hard copy printout evidencing such
message generated by a computer terminal maintained at the Depositary's office.
(c) We acknowledge that in connection with the Offer you may enter into
agreements or arrangements with a Book-Entry Transfer Facility which, among
other things, provide that (i) delivery of an Agent's Message will satisfy the
terms of the Offer with respect to the Letter of Transmittal, (ii) such
agreements or arrangements are enforceable against the Purchaser by such Book-
Entry Transfer Facility or participants therein and (iii) you, as Depositary,
are authorized to enter into such agreements or arrangements on behalf of the
Purchaser. Without limiting any other provision of this Agreement, you are
expressly authorized to enter into such agreements or arrangements on behalf of
the Purchaser and to make any necessary representations or warranties in
connection therewith, and any such agreements or arrangements shall be
enforceable against the Purchaser.
2
<PAGE>
account at each Book-Entry Transfer Facility for book-entry transfers of Shares,
as set forth in the Letter of Transmittal and Section 2 of the Offer to
Purchase, and you shall comply with the provisions of Rule 17Ad-14 under the
Securities Exchange Act of 1934, as amended.
4) (a) You are authorized and directed to examine any certificate
representing Shares, Letter of Transmittal (or facsimile thereof). Notice of
Guaranteed Delivery or Agent's Message and any other document required by the
Letter of Transmittal received by you to determine whether you believe any
tender may be defective. In the event you conclude that any Letter of
Transmittal, Notice of Guaranteed Delivery. Agent's Message or other document
has been improperly completed, executed or transmitted, any of the certificates
for Shares is not in proper form for transfer (as required by the aforesaid
instructions) or if some other irregularity in connection with the tender of
Shares exists, you are authorized subject to Section 4(b) hereof to advise the
tendering stockholder, or transmitting Book-Entry Transfer Facility, as the case
may be, of the existence of the irregularity, but you are not authorized to
accept any tender of fractional Shares, any tender not in accordance with the
terms and subject to the conditions set forth in the Offer, or any other tender
which you deem to be defective, unless you shall have received from the
Purchaser the Letter of Transmittal which was surrendered (or if the tender was
made by means of a Confirmation containing an Agent's Message, a written
notice), duly dated and signed by an authorized officer of the Purchaser,
indicating that any defect or irregularity in such tender has been cured or
waived and that such tender has been accepted by the Purchaser.
(b) Promptly upon your concluding that any tender is defective, you shall,
after consultation with and on the written instructions of the Purchaser, use
reasonable efforts in accordance with your regular procedures to notify the
person tendering such Shares, or Book-Entry Transfer Facility transmitting the
Agent's Message, as the case may be, of such determination and, when necessary,
return the certificates involved to such person in the manner described in
Section 11 hereof. The Purchaser shall have full discretion to determine whether
any tender is complete and proper and shall have the absolute right to reject
any or all tenders of any particular Shares determined by it not to be in proper
form and to determine whether the acceptance of or payment for such tenders may,
in the opinion of counsel for the Purchaser, be unlawful; it being specifically
agreed that you shall have neither discretion nor responsibility with respect to
these determinations. To the extent permitted by applicable law, the Purchaser
also reserves the absolute right to waive any of the conditions of the Offer or
any defect or irregularity in the tender of any particular Shares. The
interpretation by the Purchaser of the terms and conditions of the Offer to
Purchase, the Letter of Transmittal and the instructions thereto, a Notice of
Guaranteed Delivery or an Agent's Message (including without limitation the
determination of whether any tender is complete and proper) shall be final and
binding.
(c) All questions as to the validity, form, eligibility (including time of
receipt) and acceptance of any tender of Shares, including questions as to the
proper completion or execution of any Letter of Transmittal (or facsimile
thereof), Notice of Guaranteed Delivery or other required documents and as to
the proper form for transfer of any certificate of Shares, shall be resolved by
the Purchaser, whose determination shall be final and binding. The Purchaser
shall have the absolute right to determine whether to reject any or all tenders
not in proper or complete form or to waive any irregularities or conditions, and
the Purchaser's interpretation of the Offer to Purchase, the letter of
Transmittal and the instructions thereto and the Notice of Guaranteed Delivery
(including without limitation the determination of whether any tender is
complete and proper) shall be final and binding.
3
<PAGE>
(d) You agree to maintain accurate records as to all Shares tendered prior
to or on the Expiration Date.
5) You are authorized and directed to return to any person tendering
Shares, in the manner described in Section 11 hereof, any certificates
representing Shares tendered by such person but duly withdrawn pursuant to the
Offer to Purchase. To be effective, a written, telegraphic, telex, or facsimile
transmission notice of withdrawal must be received by you within the time period
specified for withdrawal in the Offer to Purchase at your address set forth on
the back-page of the Offer to Purchase. Any notice of withdrawal must specify
the name of the person having deposited the Shares to be withdrawn, the number
of Shares to be withdrawn and, if the certificates representing such Shares have
been delivered or otherwise identified to you, the name of the registered
holder(s) of such Shares as set forth in such certificates. If the certificates
have been delivered to you, then prior to the release of such certificates the
tendering stockholder must also submit the serial numbers shown on the
particular certificates evidencing such Shares and the signature on the notice
of withdrawal must be guaranteed by an Eligible Institution. If Shares have been
delivered pursuant to the procedure for book-entry transfer, any notice of
withdrawal must also specify the name and number of the account at the
appropriate Book-Entry Transfer Facility to be credited with the withdrawn
Shares and otherwise comply with such Book-Entry Transfer Facility's procedures.
You are authorized and directed to examine any notice of withdrawal to determine
whether you believe any such notice is defective. In the event you conclude that
any such notice may be defective you shall, after consultation with and on the
instructions of the Purchaser, use reasonable efforts in accordance with your
regular procedures to notify the person delivering such notice of such
determination. All questions as to the form and validity (including time of
receipt) of notices of withdrawal will be determined by the Purchaser in its
sole discretion, whose determination shall be final and binding. Any Shares so
withdrawn shall no longer be considered to be properly tendered unless such
Shares are re-tendered prior to the Expiration Date pursuant to the Offer to
Purchase.
6) Subject to Sections 17 and 26 hereof, any amendment to or extension of
the Offer, as the Purchaser shall from time to time determine, shall be
effective when made, provided that Purchaser will give you oral notice prior to
the time the Offer would otherwise have expired, which notice shall be promptly
confirmed by the Purchaser in writing; provided that you may rely on and shall
be authorized and protected in acting or failing to act upon any such notice
even if such notice is not confirmed in writing or such confirmation conflicts
with such notice. If at any time the Offer shall be terminated as permitted by
the terms thereof, the Purchaser shall promptly notify you of such termination.
If such termination shall occur, all Shares tendered to you prior to the time of
such termination (except such of the Shares as shall have been paid for by the
Purchaser prior to the effectiveness of such termination) and all items then or
thereafter in your possession which relate to such Shares shall be returned
promptly to, or upon the order of, the respective holders of such Shares.
7) At 11:00 a.m., New York City time, or as promptly as practicable
thereafter, on each business day or more frequently if reasonably requested as
to major tally figures, you shall advise each of the parties named below by
telephone as to, based upon your preliminary review (and at all times subject to
final determination by Purchaser), as of the close of business on the preceding
day or the most recent practicable time prior to such request, as the case may
be: (i) the number of Shares duly tendered on such day; (ii) the number of
Shares duly tendered represented by certificates physically held by you on such
day; (iii) the number of Shares represented by Notices of Guaranteed Delivery on
such day; (iv) the number of Shares withdrawn on such day; and (v) the
cumulative totals of Shares in categories (i) through (iv) above through 12:00
noon, New York City time, on such day:
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<PAGE>
(a) to the Purchaser.
Richard P. Smyth, CEO
VISTA 2000, Inc.
11660 Alpharetta Highway, Suite 330,
Roswell, GA 30076
Tel No. 404 751-3776
Fax No. 404 751-8808
(b) to the Purchaser's counsel:
Steven A. Cunningham
400 Colony Square, Suite 2200
1201 Peachtree Street
Atlanta, GA 30361
Tel No. 404 817-6000
Fax No. 404 817-6050
(c) to such other person(s), by such means, as any of the foregoing may
designate.
You shall also furnish to each of the above named persons a written report
confirming the above information which has been communicated orally on the day
following such oral communication. You shall furnish to the Information Agent
(as defined in the Offer to Purchase) and the Purchaser, such reasonable
information, to the extent such information has been furnished to you, on the
tendering stockholders as may be requested from time to time.
You shall furnish to the Purchaser, upon request, master lists of Shares
tendered for purchase, including an A-to-Z list of the tendering stockholders.
You are also authorized and directed to provide the persons listed above or
any other persons approved by the Purchaser which such other information
relating to the Shares, Offer to Purchase, Letters of Transmittal, Agent's
Messages or Notices of Guaranteed Delivery as the Purchaser may reasonably
request from time to time.
You shall not provide persons other than those mentioned in (or designated
in accordance with the provisions of) paragraphs (a), (b) and (c) above with any
information not contained in the Offer to purchase and the Letter of
Transmittal. In no event shall you make any recommendation, either directly or
-----------------------------------------------------------------
indirectly, regarding the advisability of tendering Shares pursuant to the
- --------------------------------------------------------------------------
Offer. If you receive requests for copies of the Offer to Purchase, Letter of
- -----
Transmittal, or other tender offer materials, you shall advise persons making
such requests that copies of such documents can be obtained from the information
Agent at the address set forth on the back cover of the Offer to Purchase.
You shall provide to the Purchaser, and such other persons as any of them
may designate, with access to your offices and to those persons on your staff
who are responsible for receiving tenders in order to ensure that, immediately
prior to any Expiration Date, the Purchaser shall receive sufficient information
to enable it to decide whether to extend the Offer.
5
<PAGE>
telegrams, telexes, facsimile transmissions, notices and letters submitted to
you pursuant to the Offer shall be stamped by you to indicate the date and time
of the receipt thereof and these documents, or copies thereof, shall be
preserved by you for a reasonable time not to exceed one year or the term of
this Agreement, whichever is longer, and thereafter shall be delivered by you to
the Purchaser. Thereafter, any inquiries relating to or requests for any of the
foregoing shall be directed solely to the Purchaser and not the Depositary.
9) (a) If under the terms and conditions set forth in the Offer to Purchase
the Purchaser becomes obligated to accept and pay for Shares tendered, upon
instruction by the Purchaser and as promptly as practicable but no later than
five business days after the latest of: (i) the Expiration of the period for the
delivery of Notices of Guarantee pursuant to the Offer to Purchase; (ii) the
physical receipt by you of a certificate or certificates representing tendered
Shares (in proper form for transfer by delivery), a properly completed and duly
executed Letter of Transmittal (or a facsimile thereof) or a Confirmation
including an Agent's Message and any other documents required by the Letter of
Transmittal; and (iii) the deposit by the Purchaser with you of sufficient
Federal or other immediately available funds to pay, subject to the terms and
conditions of the Offer, all stockholders for whom checks representing payment
for Shares are to be drawn, less any adjustments required by the terms of the
Offer, and all applicable tax withholdings, you shall, subject to Section 15
hereof, deliver or cause to be delivered to the tendering stockholders and
designated payees, consistent with this Agreement and the Letter of Transmittal,
official bank checks of the Depositary, payable through the Depositary, in the
amount of the applicable purchase price specified in the Offer (less any
applicable tax withholdings) for the Shares theretofore properly tendered and
purchased under the terms and conditions of the Offer. The Purchaser will also
deposit with you on your request federal or other immediately available funds in
an amount equal to the total stock transfer taxes or other governmental charges,
if any, payable in respect of the transfer or issuance to the Purchaser or its
nominee or nominees of all Shares so purchased. Upon request by the Purchaser
you will apply to the proper authorities for the refund of money paid on account
of such transfer taxes or other governmental charges. On receipt of such refund,
you will promptly pay over to the Purchaser all money refunded and no such funds
shall be used to set off any other amounts which may be due to you or your
affiliates.
10) (a) On or prior to the Expiration Date, the Purchaser shall instruct
you in writing whether payments for tendered shares should be reported on Forms
1099-B.
(b) On or before January 31st of the year following the year in which
the Purchaser accepts Shares for payment, you will prepare and mail to each
tendering stockholder whose Shares were accepted, other than Foreign
Stockholders, a Substitute Form 1099-B, as instructed in writing by the
Purchaser, in accordance with Treasury Regulations. If the Purchaser provides
you with a letter to be sent to tendering stockholders explaining the possible
tax consequences of the tender of Shares, you shall include a copy of such
letter with the Substitute Forms 1099-B sent to each stockholder. You will also
prepare and file copies of such Substitute Forms 1099-B by magnetic tape with
the Internal Revenue Service in accordance with Treasury Regulations on or
before February 28th of the year following the year in which Shares are accepted
for payment.
(c) You will deduct and withhold 31% backup withholding tax from the
purchase price payable with respect to Shares tendered by any stockholder, other
than a Foreign Stockholder, who has not properly provided you with his taxpayer
identification number, in accordance with Treasury Regulations.
(d) Should any issue arise regarding federal income tax reporting or
withholding, you will take such action as the Purchaser instructs you in
writing.
6
<PAGE>
11) If, pursuant to the terms and conditions of the Offer, the Purchaser
has notified you that it does not accept certain of the Shares tendered or
purported to be tendered or a stockholder withdraws any tendered Shares, you
shall promptly return the deposited certificates for such Shares, together with
any other documents received, to the persons who deposited the same, without
expense to such person. Certificates for such unpurchased Shares shall be
forwarded by you at your option by: (i) first class mail under a blanket surety
bond protecting you and the Purchaser from loss or liabilities arising out of
the non-receipt or nondelivery of such Shares; or (ii) registered mail insured
separately for the value of such Shares. If any such shares were tendered or
purported to be tendered by means of a Confirmation containing an Agent's
Message, you shall notify the Book-Entry Transfer Facility that transmitted said
Confirmation of the Purchaser's decision not to accept the Shares.
12) At such time as you shall be notified by the Purchaser, you shall
request the transfer agent for the Shares to effect the transfer of all Shares
purchased pursuant to the Offer and to issue certificates for such Shares so
transferred, in accordance with written instructions from the Purchaser, and
upon your receipt thereof notify the Purchaser. The Purchaser shall be
responsible to arrange for delivery of the certificates.
13) You shall take all reasonable action with respect to the Offer as may
from time to time be requested by the Purchaser, or the Information Agent. You
are authorized to cooperate with and furnish information to the Information
Agent, any of its representatives or any other organization (or its
representatives) designated, in writing, from time to time by the Purchaser, in
any manner reasonably requested by any of them in connection with the Offer and
tenders thereunder.
14) Whether or not any Shares are tendered or the Offer is consummated,
for your services as Depositary hereunder, we shall pay to you compensation in
accordance with the fee schedule attached as Schedule 1 hereto, together with
reimbursement for out-of-pocket expenses, including reasonable fees and
disbursements of your counsel. Fees shall be payable on the day the Shares are
purchased by the Purchaser.
15) As Depositary hereunder you:
(a) shall have no duties or obligations other than those specifically set
forth herein or in Exhibits A, B, and C hereto, or as may subsequently be agreed
to in writing by you and the Purchaser;
(b) shall have no obligation to make payment for any tendered Shares
unless the Purchaser shall have provided the necessary federal or other
immediately available funds to pay in full amounts due and payable with respect
thereto;
(c) shall be regarded as making no representations and having no
responsibilities as to the validity, sufficiency, value, or genuineness of any
certificate or the Shares represented thereby deposited with you or tendered
through an Agent's Message hereunder and will not be required to and will make
no representations as to or be responsible for the validity, sufficiency, value
or genuineness of the Offer;
(d) shall not take any legal action hereunder, without the prior written
approval of Purchaser, and where the taking of such action might in your
judgment subject or expose you to any expense or liability, you shall not be
required to act unless you shall have been furnished with an indemnity
satisfactory to you;
7
<PAGE>
(e) may rely on and shall be authorized and protected in acting or failing
to act upon any certificate, instrument, opinion, notice, letter, telegram,
telex, facsimile transmission, Agent's Message or other document or security
delivered to you and believed by you to be genuine and to have been signed by
the proper party or parties;
(f) may rely on and shall be authorized and protected in acting or failing
to act upon the written, telephonic, electronic and oral instructions, with
respect to any matter relating to your actions as Depositary covered by this
Agreement (or supplementing or qualifying any such actions) of officers of the
Purchaser;
(g) may consult counsel satisfactory to you and the written advice of such
counsel shall be full and complete authorization and protection in respect of
any action taken, suffered, or omitted by you hereunder in good faith and in
accordance with such advice of such counsel;
(h) shall not at any time advise any person tendering or considering
tendering pursuant to the Offer as to the wisdom of making such tender or as to
the market value of any security tendered thereunder.
(i) may perform any of your duties hereunder either directly or by or
through agents or attorneys and you shall not be responsible for any misconduct
or negligence on the part of any agent or attorney appointed with reasonable
care by you hereunder.
(j) shall not be liable or responsible for any recital or statement
contained in the Offer or any other documents relating thereto;
(k) shall not be liable or responsible for any failure of the Purchaser to
comply with any of its obligations relating to the Offer, including without
limitation obligations under applicable securities laws;
(l) are not authorized, and shall have no obligation, to pay any brokers,
dealers, or soliciting fees to any person, including without limitation the
Information Agent, and
(m) shall not be liable or responsible for any delay, failure, malfunction,
interruption or error in the transmission or receipt of communications or
messages through electronic means to or from a Book-Entry Transfer Facility, or
for the actions of any other person in connection with any such message of
communication.
16) The Purchaser covenants to indemnify and hold you and your officers,
directors, employees, agents, contractors, subsidiaries and affiliates harmless
from and against any loss, liability, damage or expense (including without
limitation any loss, liability, damage or expense incurred for submitting for
transfer Shares tendered without a signature guarantee pursuant to the Letter of
Transmittal, or in connection with any communication or message transmitted
through electronic means to or from a Book-Entry Transfer Facility, and the fees
and expenses of counsel) incurred (a) without negligence or bad faith or (b) as
a result of your acting or failing to act in accordance with the terms of this
Agreement or upon the instructions of the Purchaser, or the Information Agent
arising out of or in connection with the Offer, this Agreement or the
administration of your duties hereunder, including without limitation the costs
and expenses of defending and appealing against any action, proceeding, suit or
claim in the premises. In no case shall the Purchaser be liable under
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this indemnity with respect to any action, proceeding, suit or claim against you
unless the Purchaser shall be notified by you, by letter or by telex or
facsimile transmission confirmed by letter, of the written assertion of any
action, proceeding, suit or claim made or commenced against you promptly after
you shall have been served with the summons or other first legal process or have
received the first written assertion giving information as to the nature and
basis of the action, proceeding, suit or claim, but failure so to notify the
Purchaser shall not release the Purchaser of any liability which it may
otherwise have on account of this Agreement. The Purchaser shall be entitled to
participate at its own expense in the defense of any such action, proceeding,
suit or claim and if the Purchaser so elects, assume the defense of such claim.
In the event that the Purchaser assumes such defense, the Purchaser shall not
thereafter be liable for the fees and expenses of any additional counsel that
you retain, so long as the Purchaser shall retain counsel satisfactory to you,
in the exercise of your reasonable judgment, to defend such suit. You agree not
to settle any claim or litigation in connection with any claim or liability with
respect to which you may seek indemnification from the Purchaser without the
price consent of the Purchaser.
17) Unless terminated earlier by the parties hereto, this Agreement shall
terminate upon (a) Purchaser's termination or withdrawal of the Offer, or (b) if
Purchaser does not terminate or withdraw the Offer, the date which is six months
after the later of (i) your sending of checks to tendering Stockholders in
accordance with Section 9 (a) hereof and (ii) your delivery of Certificates to
the Purchaser in accordance with Section 12 hereof. Upon any termination of this
Agreement, you shall promptly deliver to the Purchaser any certificates, funds
or other property then held by you as Depositary under this Agreement, and after
such time any party entitled to such certificates, funds or property shall look
solely to the Purchaser and not the Depositary therefor, and all liability of
the Depositary with respect thereto other than liabilities relating to periods
prior to such termination shall cease, provided, however, that the Depositary,
before being required to make such delivery to the Purchaser, may at the expense
of the Purchaser cause to be published in a newspaper of general circulation in
the City of New York, or mail to each person who has tendered Shares but not
received payment, or both, notice that such certificates, funds or property
remain unclaimed and that after a date specified therein, which shall not be
less than 30 days from the date of publication or mailing, any unclaimed balance
of such certificates, funds or property will be repaid to the Purchaser.
Sections 10(b), 14, 15 and 16 shall survive any termination of this Agreement.
18) In the event that any claim of inconsistency between this Agreement and
the terms of the Offer arise, as they may from time to time be amended, the
terms of the Offer shall control, except with respect to the duties, liabilities
and rights, including without limitation compensation and indemnification, of
you as Depositary, which shall be controlled by the terms of this Agreement.
19) If any provision of this Agreement shall be held illegal, invalid, or
unenforceable by any court, this Agreement shall be construed and enforced as if
such provision had not been contained herein and shall be deemed an Agreement
among us to the full extent permitted by applicable law.
20) Purchaser represents and warrants that (a) it is duly incorporated,
validity existing and in good standing under the laws of its jurisdiction of
incorporation, (b) the making and consummation of the Offer and the execution,
delivery and performance of all transactions contemplated thereby (including
without limitation this Agreement) have been duly authorized by all necessary
corporate action and will not result in a breach of or constitute a default
under the certificate of incorporation or by-laws of the Purchaser or any
indenture, agreement, or instrument to which it is a party or by which it is
bound, and (c) this
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Agreement has been duly executed and delivered by the Purchaser and constitutes
a legal, valid and binding obligation of the Purchaser.
21) Except as expressly set forth elsewhere in this Agreement, all notices,
instructions and communication under this Agreement shall be in writing, shall
be effective upon receipt and shall be addressed, if to the Purchaser, to its
address set forth beneath its signature on this Agreement, or, if to the
Depositary, to Harris Trust Company of New York, 77 Water Street - 4th Floor,
New York, New York 10005, Attention: Vice President, or to such other address as
a party hereto shall notify the other parties.
22) This Agreement shall be governed by and construed in accordance with
the laws of the State of New York, without giving effect to conflict of laws,
rules or principles, and shall inure to the benefit of and be binding upon the
successors and assigns of the parties hereto; provided that this Agreement may
not be assigned by any party without the prior written consent of the other
party and any purported assignment without such consent shall be null and void.
23) It is understood and agreed that the securities, money or property to
be deposited with or received by you as Depositary (the "Property") constitute a
special, segregated account, held solely for the benefit of the Purchaser and
stockholders tendering Shares, as their interests may appear, and the Property
shall not be commingled with the money, assets or properties of you or any
other person, firm or corporation. You hereby waive any and all rights of lien,
attachment or set-off whatsoever, if any, against the Property so to be
deposited, whether such rights arise by reason of the statutory common law of
New York, contract or otherwise.
24) Set forth in Exhibit D hereto is a list of the names and specimen
signatures of the persons authorized to act for the Purchaser under this
Agreement. The Secretary of the Purchaser shall, from time to time, certify to
you the names and signatures of any other persons authorized to act for the
Purchaser under this Agreement.
25) No provision of this Agreement may be amended, modified and waived,
except in writing signed by all of the parties hereto.
26) Any instructions given to you orally, as permitted by any provision of
this Agreement, shall be confirmed in writing by the Purchaser, or the
Information Agent, as the case may be, as soon as practicable. You shall not be
liable or responsible and shall be fully protected for acting, or failing to
act, in accordance with any oral instructions which do not conform with the
written confirmation received in accordance with the Section.
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Transmittal, and the Notice of Guaranteed Delivery, and confirm the arrangements
herein provided by signing and returning the enclosed copy hereof, whereupon
this Agreement and your acceptance of the terms and conditions herein provided
shall constitute a binding Agreement between us.
Very truly yours,
/s/ Richard P. Smyth
--------------------
By: Richard P. Smyth
----------------
Name:
Title: Chairman & CEO
--------------
--------------
Accepted as of the date first above written:
HARRIS TRUST COMPANY OF NEW YORK
By
------------------------
Assistant Vice President
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Harris Trust Company of New York
Exhibit A Offer to Purchase
Exhibit B Letter of Transmittal
Exhibit C Notice of Guaranteed Delivery
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Exhibit D
(Company's Letterhead)
Name Specimen Signatures Position
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[TO COME]
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