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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT PURSUANT TO SECTION 13 OR 15(D) OF
THE SECURITIES EXCHANGE ACT OF 1934
Date of Report: MARCH 6, 1997
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VISTA TECHNOLOGIES INC.
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(Exact name of registrant as specified in its charter)
Nevada 0-23142 13-3687830
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(State or other jurisdiction (Commission (I.R.S. Employer
of incorporation File No.) Identification No.)
or organization)
167 S. San Antonio Road, Suite 9, Los Altos, California 94022
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (415) 947-1750
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(Not Applicable)
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(Former name or former address, if changed since last report)
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VISTA TECHNOLOGIES INC.
ITEM 5. OTHER EVENTS
CHANGES IN MANAGEMENT
On March 6, 1997, the Board of Directors of Vista Technologies Inc.
(the "Company") determined to reduce the level of the Company's corporate
expenses in order to reduce negative cash flows in its North American
operations. As part of that program, the Board terminated the employment
of Thomas A. Schultz, formerly President and Chief Executive Officer, and
terminated the employment of Allen J. Simon, formerly Executive Vice
President and Chief Operating Officer. Mr. Schultz voluntarily resigned
as a director of the Company on March 6, 1997 following the termination
of his employment.
Murray D. Watson, Vice Chairman of the Board, was elected to serve
as acting Chief Executive Officer of the Company to succeed Mr. Schultz.
The Board authorized Mr. Watson to review the Company's business
strategies for expansion of laser vision correction services in North
America for further recommendations to, and review by, the Board at a
later date. Mr. Watson also serves as Chairman of the Board and Chief
Executive Officer of Atlantic Central Enterprises, Ltd., which owns
approximately 53.9% of the Company's outstanding common stock. (Atlantic
Central Enterprises, Ltd., publicly-traded in the over-the-counter market
under the trading symbol "ALCNF", is the successor-in-interest to Pharma
Patch PLC as the result of a recent reorganization.)
OTHER MATERIAL EVENTS
Each of Messrs. Schultz and Simon have notified the Company that
they intend to assert claims for severance pay obligations under their
previous employment agreements with the Company. The Company intends to
negotiate the settlement of such claims, but there can be no assurance
that compromises acceptable to the parties will be reached.
On January 8, 1997, the Company previously announced it intended,
with the assistance of a placement agent and subject to market and other
conditions, to seek additional capital in a proposed private placement
of convertible preferred stock. As of March 14, 1997, the Company was
advised by its placement agent that this proposed financing has been
withdrawn. The Company intends to continue its efforts to raise
additional equity capital through other third parties, but no commitments
have been obtained at present.
In view of limited cash resources to finance the Company's North
American working capital requirements, the Board of Directors has
authorized additional short-term borrowings by the Company from Atlantic
Central Enterprises, Ltd. on terms to be negotiated. As of March 6,
1996, the Company was indebted to Atlantic Central Enterprises for
approximately $700,000 of prior advances. Any such future advances
requested by the Company will be at the exclusive discretion of, and
subject to approval by, the Atlantic Central Enterprises board of
directors. As noted above, Murray D. Watson, Vice Chairman and Chief
Executive Officer of the Company, is a director, Chairman of the Board
and Chief Executive Officer of Atlantic Central Enterprises. Kenneth G.
Howling, the Company's Treasurer and Chief Executive Officer, also serves
as Chief Financial Officer for Atlantic Central Enterprises.
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In consideration of past and future advances to the Company by
Atlantic Central Enterprises Ltd., the Board of Directors authorized the
Company to pledge outstanding shares of the Company's European operating
subsidiaries to secure all past and future indebtedness of the Company
to Atlantic Central Enterprises. The grant of that security interest
will be junior to a security interest in 51% of the issued and
outstanding share capital of Vista Vision Scandinavia AB previously
pledged to secure $277,777 in principal amount of Company indebtedness
due third parties on 12% promissory notes due June 15, 1998, and may also
be subordinate to a security interest in all of the Company's assets
granted to secure $300,000 of the Company's 12% promissory notes due June
30, 1997 issued to a third party for a bridge loan in December 1996.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS.
(a) EXHIBITS: The following exhibits are filed with this Report or are
incorporated herein by reference:
# Indicates exhibit filed with this Report
<TABLE>
<CAPTION>
Exhibit
Number Description
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<S> <C>
# 10.43.2 Security Agreement dated November 11, 1996 granted by
Registrant as collateral security for 12% Promissory
Note due June 30, 1997.
# 10.46 Resolution adopted by Registrant's Board of Directors
on March 6, 1997 authorizing grant of security interest
in capital stock of European subsidiaries to secure
advances from Atlantic Central Enterprises., Ltd.
</TABLE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this report to be signed on its behalf by
the undersigned thereunto duly authorized.
Date: March 10, 1997
VISTA TECHNOLOGIES INC.
(Registrant)
By: /s/ William M. Curtis
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William M. Curtis,
Secretary
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SECURITY AGREEMENT
THIS SECURITY AGREEMENT is made and dated this 11th day of November,
1996, for the benefit of the registered holders of those certain 12%
Secured Promissory Notes (herein collectively called the "Secured
Parties" and individually a "Secured Party") in an aggregate principal
amount not exceeding one million dollars issued by VISTA TECHNOLOGIES
INC., a Nevada corporation ("Debtor") with its principal offices at 167
S. San Antonio Road, Suite 9, Los Altos, California 94022.
A. Debtor has issued and sold 12% Secured Promissory Notes due
June 30, 1997 or earlier upon the occurrence of certain events as set
forth therein (herein called the "Bridge Notes"), pursuant to which
Secured Parties have advanced loans to the Debtor on the terms and
subject to the conditions set forth therein. All terms not otherwise
defined herein are used with the same meaning as set forth in the Bridge
Notes.
B. As security for the payment and performance of its obligations
to the Secured Parties under the Bridge Notes and under this Security
Agreement, it is the intent of Debtor to pledge and to grant to Secured
Party and create a security interest in all of the assets of the Debtor,
as hereinafter provided, subject only to a first priority security
interest of Pharma Patch Plc in certain shares of Technical and Chemical
Products Inc. common stock so long as the same, or any portion thereof,
are owned as an asset by the Debtor and subject to purchase money
equipment lease and installment note obligations for the acquisition of
laser vision correction equipment.
NOW, THEREFORE, in consideration of the above Recitals and for other
good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, Debtor hereby agrees as follows:
1. GRANT OF SECURITY INTEREST. Debtor hereby pledges and grants
to Secured Parties a security interest in the property described in
Paragraph 2 below (collectively and severally, the "Collateral") to
secure payment and performance of the obligations of Debtor to the
Secured Parties described in Paragraph 3 below (collectively and
severally, the "Obligations").
2. COLLATERAL. The Collateral shall consist of the following
assets of the Debtor:
(a) All inventory of Debtor, now owned or hereafter acquired,
including, without limitation, all raw materials, work in process,
materials used or consumed in Debtor's business and finished goods, and
merchandise, parts and supplies of every kind, including inventory
temporarily out of Debtor's custody or possession, and all additions,
accessions, improvements, replacements and substitutions thereto and
products thereof, together with all returns on accounts;
(b) All goods and equipment of Debtor, now owned or hereafter
acquired, or in which Debtor now has or may hereafter acquire any
interest, including, without limitation, all machinery, supplies, tools,
dies, blueprints, catalogs, computer hardware and software, furniture,
furnishings and fixtures, motor vehicles of every kind and description,
and all additions, accessions, improvements, replacements and
substitutions thereto and products thereof;
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(c) All accounts, contract rights and general intangibles now
owned or hereafter created or acquired by Debtor, including, without
limitation, all receivables, goodwill, trademarks, trade styles, trade
names, patents, patent applications, software, customer lists and
business records;
(d) All documents, instruments and chattel paper now owned or
hereafter acquired by Debtor;
(e) All monies, deposit accounts, certificates of deposit and
securities of Debtor now or hereafter in Secured Parties's or its agents'
possession including, without limitation, shares of Technical Chemicals
and Products Inc. common stock owned by the Debtor subject only to a
first priority security interest of Pharma Patch Plc in such shares of
Technical and Chemical Products Inc. common stock so long as the same,
or any portion thereof, are owned as an asset by the Debtor.
(f) All now existing and hereafter acquired books and records
relating to the foregoing Collateral and all now owned and hereafter
acquired equipment containing such books and records; and
(g) All proceeds of the foregoing Collateral. For purposes of
this Security Agreement, the term "proceeds" includes whatever is
receivable or received when Collateral or proceeds is sold, collected,
exchanged or otherwise disposed of, whether such disposition is voluntary
or involuntary, and includes, without limitation, all rights to payment,
including return premiums, with respect to any insurance relating
thereto.
3. OBLIGATIONS. The Obligations of Debtor secured by this
Security Agreement shall consist of any and all debts, obligations and
liabilities of Debtor to Secured Parties under the terms and conditions
of the Bridge Notes including, without limitation, all rights to payment
of principal, interest and costs of collection set forth in the Bridge
Notes and all obligations of the Debtor in this Security Agreement and
all amendments or extensions or renewals of the Bridge Notes, and/or this
Security Agreement, whether now existing or hereafter and howsoever
arising, voluntary or involuntary, whether or not jointly owed with
others, direct or indirect, absolute or contingent, due or to become due,
liquidated or unliquidated, and whether or not from time to time
decreased or extinguished and later increased, created or incurred.
4. SECURED PARTIES ACTION BY MAJORITY CONSENT. Any action
permitted to be taken by the Securities Parties under this Agreement, and
any notices given by Securities Parties, shall require the written
consent or approval of at least a majority-in-interest of the unpaid
principal represented by the Bridge Notes evidenced by a writing executed
by the registered holders thereof. Upon the request of any Secured
Party, Debtor shall promptly furnish to all Secured Parties a current
listing of the names and addresses of the registered holders of all of
the Bridge Notes and the amount of outstanding and principal represented
by each of the same.
5. ADDITIONAL REPRESENTATIONS AND WARRANTIES. Debtor hereby
represents and warrants that: (a) except as heretofore disclosed to
Secured Parties in writing, Debtor is the owner of the Collateral (or,
in the case of after-acquired Collateral, at the time Debtor acquires
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rights in the Collateral, will be the owner thereof) and that no other
person has (or, in the case of after-acquired Collateral, at the time
Debtor acquires rights therein, will have) any right, title, claim or
interest (by way of security interest or other lien or charge or
otherwise) in, against or to the Collateral, except for purchase
equipment money lease and installment purchase financing as to laser
vision correction equipment and except for the security interest of
Pharma Patch Plc in shares of Technical Chemicals and Products Inc., (b)
all information heretofore, herein or hereafter supplied to Secured
Parties by or on behalf of Debtor with respect to the Collateral when
supplied was, is or will be true and correct, respectively; (c) each
account, contract right, item of chattel paper, instrument or any other
right to the payment of money constituting Collateral is genuine and
enforceable in accordance with its terms against the party obligated to
pay the same (an "Account Debtor"), which terms have not been modified
or waived in any respect or to any extent; (d) the amount represented
by Debtor to Secured Parties as owing by any Account Debtor is the
correct amount actually and unconditionally owing by such Account Debtor,
except for normal discounts where applicable; and (e) no Account Debtor
has any defense, set off, claim or counterclaim against Debtor which can
be asserted against Secured Parties, whether in any proceeding to enforce
Secured Parties's rights in the Collateral, or otherwise.
6. COVENANTS OF DEBTOR. Debtor hereby agrees (a) to do all acts
that may be necessary to maintain, preserve and protect the Collateral;
(b) not to use or permit any Collateral to be used unlawfully; (c) to pay
promptly when due all taxes, assessments, charges, encumbrances and liens
now or hereafter imposed upon or affecting any Collateral; (d) to notify
Secured Parties promptly of any change in Debtor's name or place of
business, or, if Debtor has more than one place of business, its head
office, or office in which Debtor's records relating to the Collateral
are kept; (e) to procure, execute and deliver from time to time any
endorsements, assignments, financing statements and other writings deemed
necessary or appropriate by Secured Parties to perfect, maintain and pro-
tect their security interest hereunder and the priority thereof; (f) to
appear in and defend any action or proceeding which may affect its title
to or Secured Parties' interest in the Collateral; (g) to keep separate,
accurate and complete records of the Collateral and to provide Secured
Parties with such records and such other reports and information relating
to the Collateral as Secured Parties may request from time to time; (h)
not to surrender or lose possession of (other than to Secured Parties),
sell, encumber, lease, rent, or otherwise dispose of or transfer any
Collateral or right or interest therein except in the ordinary course of
Debtor's business and except that Debtor is authorized to sell the
Technical Chemical and Products Inc. common stock and to apply proceeds
thereof to payment of Debtor's obligations to Pharma Patch Plc and the
holders of the Bridge Notes as their interests shall appear, and to
otherwise keep the Collateral free of all levies and security interests
or other liens or charges except those contemplated by this Security
Agreement or approved in writing by Secured Parties; (i) to account fully
for and promptly deliver to Secured Parties, in the form received, all
proceeds of the Collateral received, endorsed to Secured Parties as
appropriate, and until so delivered all proceeds shall be held by Debtor
in trust for Secured Parties, separate from all other property of Debtor
and identified as the property of Secured Parties; (j) to keep the
Collateral in good condition and repair; (k) not to cause or permit any
waste or unusual or unreasonable depreciation of the Collateral; (l) at
any reasonable time, upon demand by Secured Parties, to exhibit to and
allow inspection by Secured Parties (or persons designated by Secured
Parties) of the Collateral; (m) to keep the records concerning the
Collateral at the principal office
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of the Debtor in the State of California; and (m) to insure the
Collateral, with Secured Parties named as loss payee, in form and
amounts, with companies, and against risks and liabilities satisfactory
to Secured Parties.
7. AUTHORIZED ACTION BY SECURED PARTIES. In the event of a
default under the Bridge Notes, Debtor hereby irrevocably appoints
Secured Parties as the Debtor's attorney-in-fact to do (but Secured
Parties shall not be obligated to and shall incur no liability to Debtor
or any third party for failure so to do) any act which Debtor is
obligated by this Security Agreement to do, and to exercise such rights
and powers as Debtor might exercise with respect to the Collateral,
including, without limitation, the right to (a) collect by legal
proceedings or otherwise and endorse, receive and receipt all dividends,
interest, payments, proceeds and other sums and property now or hereafter
payable on or on account of the Collateral; (b) enter into any extension
or other agreement pertaining to, or deposit, surrender, accept, hold or
apply other property in exchange for the Collateral; (c) insure, process
and preserve the Collateral; (d) transfer the Collateral to its own or
its nominee's name; and (e) make any compromise or settlement, and take
any action it deems advisable, with respect to the Collateral. Debtor
agrees to reimburse Secured Parties upon demand for any costs and
expenses, including, without limitation, attorneys' fees, Secured Parties
may incur while acting as Debtor's attorney-in-fact hereunder, all of
which costs and expenses are included in the Obligations secured hereby.
8. SALE OR LEASE OF COLLATERAL. Until otherwise notified by
Secured Parties, Debtor may sell or lease Collateral consisting of
inventory or equipment in the ordinary course of Debtor's business and
in the ordinary course of business of any subsidiary corporations in
which Debtor shall own an equity interest.
9. NOTIFICATION OF ACCOUNT DEBTORS; COLLECTION. In the event of
a default under the Bridge Notes, Debtor agrees that Secured Parties may
at any time, but shall not be obligated to, notify any Account Debtor on
any Collateral to make payment directly to Secured Parties. Until
otherwise notified by Secured Parties, Debtor shall collect, enforce and
receive delivery and payment of the Collateral.
10. DEFAULT AND REMEDIES. Debtor shall be deemed in default under
this Security Agreement upon the occurrence of any of the following (an
"Event of Default"): (i) any representation or warranty of Debtor
contained herein or otherwise made in connection with the transactions
contemplated hereby shall be false or misleading in any material respect
on the date as of which made, (ii) Debtor shall fail to perform any of
the terms, provisions, covenants, conditions, agreements or obligations
contained in this Security Agreement or (iii) an Event of Default shall
occur under (and as defined in) the Bridge Notes. Upon the occurrence
of any such Event of Default, Secured Parties may, at their option, and
without notice to or demand on Debtor and in addition to all rights and
remedies available to Secured Parties under the Bridge Notes, do any one
or more of the following: (a) foreclose or otherwise enforce Secured
Parties' security interest in any manner permitted by law, or provided
for in this Security Agreement; (b) sell, lease or otherwise dispose of
any Collateral at one or more public or private sales, whether or not
such Collateral is present at the place of sale, for cash or credit or
future delivery, on such commercially reasonable terms and in such manner
as Secured Parties may determine; (c) recover from Debtor all costs and
expenses, including, without limitation, reasonable attorneys' fees,
incurred or paid by Secured Parties in exercising any right, power
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or remedy provided by this Security Agreement or by law; (d) require
Debtor to assemble the Collateral and make it available to Secured
Parties at a place to be designated by Secured Parties; (e) enter onto
property where any Collateral is located and take possession thereof with
or without judicial process; (f) prior to the disposition of the Col-
lateral, store, process, repair or recondition it or otherwise prepare
it for disposition in any manner and to the extent Secured Parties deem
appropriate; and (g) exercise any and all other rights and remedies
available to a secured party under the California Uniform Commercial
Code.
11. WAIVER OF HEARING. Debtor expressly waives any constitutional
or other right to a judicial hearing prior to the time Secured Parties
takes possession or disposes of the Collateral upon default as provided
herein.
12. WAIVER. Any forbearance or delay by Secured Parties in
exercising any right, power or remedy shall not preclude the further
exercise thereof, and every right, power or remedy of Secured Parties
shall continue in full force and effect until such right, power or remedy
is specifically waived in a writing executed by Secured Parties. Debtor
waives any right to require Secured Parties to proceed against any person
or to exhaust any Collateral or to pursue any remedy in Secured Parties's
power.
13. BINDING UPON SUCCESSORS. All rights of Secured Parties under
this Security Agreement shall inure to the benefit of their respective
successors and assigns, and all obligations of Debtor shall bind its
heirs, executors, administrators, successors and assigns.
14. ENTIRE AGREEMENT; SEVERABILITY. The terms of this Security
Agreement are intended by the parties as a final expression of their
agreement with respect to such terms as are included in this Security
Agreement and may not be contradicted by evidence of any prior or
contemporaneous agreement. The parties' further intend that this
Security Agreement constitutes the complete and exclusive statement of
its terms and that no extrinsic evidence whatsoever may be introduced in
any judicial proceeding, if any, involving this Security Agreement. If
any of the provisions of this Security Agreement shall be held invalid
or unenforceable, this Security Agreement shall be construed as if not
containing those provisions and the rights and obligations of the parties
hereto shall be construed and enforced accordingly.
15. CHOICE OF LAW. This Security Agreement shall be construed in
accordance with and governed by the laws of the State of California, and,
where applicable and except as otherwise defined herein, terms used
herein shall have the meanings given them in the California Uniform
Commercial Code.
EXECUTED as of this 11th day of November, 1996 in the City of Los
Altos, State of California.
"Debtor" VISTA TECHNOLOGIES INC.
By: /s/ Thomas A. Schultz
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Thomas A. Schultz, President
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Resolution adopted by Vista Technologies Inc. Board of Directors on March
6, 1997 authorizing grant of security interest in capital stock of
European subsidiaries to secure advances from Atlantic Central
Enterprises., Ltd.:
AUTHORIZATION FOR GRANT OF SECURITY INTEREST TO ATLANTIC CENTRAL
ENTERPRISES, LTD.
RESOLVED, that this Corporation is authorized and empowered to
grant a security interest in, and to pledge, shares of capital stock
owned by this Corporation in its European subsidiary corporations
(to wit, Vista Vision S.p.A., Convista Vision B.V., and Vista Vision
Scandinavia A.B.), in favor of Atlantic Central Enterprises, Ltd.
for the purpose of securing all past and future advances by Atlantic
Central Enterprises, Ltd. to or for the account of this Corporation.
