EXHIBIT 2.1
PLAN OF MERGER AND ACQUISITION AGREEMENT
DATED EFFECTIVE NOVEMBER 1, 1999
BY AND AMONG
TRISTAR CORPORATION,
TRISTAR USA, INC., AND
FRAGRANCE IMPRESSIONS LIMITED
TABLE OF CONTENTS
1. GENERAL DEFINITIONS..................................................-1-
1.1 "ACCOUNTS RECEIVABLE"..........................................-1-
1.2 "AFFILIATE"....................................................-1-
1.3 "ARTICLE" .....................................................-2-
1.4 "ASSETS".......................................................-2-
1.5 "ASSOCIATE"....................................................-2-
1.6 "ATTORNEYS' FEES"..............................................-2-
1.7 "AUTHORIZATION"................................................-2-
1.8 "BALANCE SHEET DATE"...........................................-2-
1.9 "BEST KNOWLEDGE"...............................................-2-
1.10 "BRIDGEPORT LEASE AMENDMENT"...................................-2-
1.11 "BUSINESS".....................................................-2-
1.12 "BUSINESS DAY".................................................-2-
1.13 "CALCULATION DATE".............................................-2-
1.14 "CASH CONSIDERATION"...........................................-2-
1.15 "CATAPANO".....................................................-2-
1.16 "CATAPANO OBLIGATIONS".........................................-2-
1.17 "CERCLA".......................................................-3-
1.18 "CLOSING"......................................................-3-
1.19 "CLOSING DATE".................................................-3-
1.20 "CODE".........................................................-3-
1.21 "COMPENSATION AGREEMENTS"......................................-3-
1.22 "CONTRACTS"....................................................-3-
1.23 "CONTROL"......................................................-3-
1.24 "DAMAGES"......................................................-3-
1.25 "DAVIS"........................................................-3-
1.26 "DAVIS NOTE"...................................................-3-
1.27 "DAVIS RELEASE"................................................-3-
1.28 "DISCLOSURE SCHEDULE"..........................................-3-
1.29 "EARN-OUT".....................................................-3-
1.30 "EARN-OUT PERIOD"..............................................-3-
1.31 "ECKERD".......................................................-3-
1.32 "ECKERD GROSS SALES"...........................................-3-
1.33 "EFFECTIVE TIME"...............................................-4-
1.34 "ENCUMBRANCE"..................................................-4-
1.35 "ENVIRONMENTAL LAWS"...........................................-4-
1.36 "ERISA"........................................................-4-
1.37 "EXCHANGE ACT".................................................-4-
1.38 "FALKOWSKI"....................................................-4-
1.39 "FALKOWSKI OBLIGATIONS"........................................-4-
1.40 "FINANCIAL STATEMENTS".........................................-4-
1.41 "FIRST PERIOD GROSS SALES".....................................-5-
1.42 "FRIEDMAN".....................................................-5-
1.43 "FRIEDMAN NOTE"................................................-5-
1.44 "FRIEDMAN OBLIGATIONS".........................................-5-
1.45 "FRIEDMAN RELEASE".............................................-5-
1.46 "GEORGE LUBY"..................................................-5-
1.47 "GOVERNMENTAL AUTHORITY".......................................-5-
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1.48 "GOVERNMENTAL REQUIREMENT".....................................-5-
1.49 "GROSS SALES"..................................................-5-
1.50 "INDUCEMENT AGREEMENTS"........................................-5-
1.51 "INTELLECTUAL PROPERTY"........................................-5-
1.52 "IRS"..........................................................-6-
1.53 "KEY EMPLOYEES"................................................-6-
1.54 "LUBY".........................................................-6-
1.55 "LUBY OBLIGATIONS".............................................-6-
1.56 "MATERIAL ADVERSE EFFECT"......................................-6-
1.57 "MCCANN".......................................................-6-
1.58 "MERGER CONSIDERATION".........................................-6-
1.59 "MERGER DOCUMENTS".............................................-6-
1.60 "NON-OFFSET PROMISSORY NOTE" and "NON-OFFSET PROMISSORY NOTES".-7-
1.61 "OFFSET PROMISSORY NOTE" and "OFFSET PROMISSORY NOTES".........-7-
1.62 "PBGC".........................................................-7-
1.63 "PEOPLE'S BANK"................................................-7-
1.64 "PEOPLE'S BANK LOAN AGREEMENT".................................-7-
1.65 "PEOPLE'S BANK NOTES"..........................................-7-
1.66 "PEOPLE'S BANK RELEASE"........................................-7-
1.67 "PERMITTED ENCUMBRANCES".......................................-7-
1.68 "PERSON".......................................................-7-
1.69 "PROMISSORY NOTE" and "PROMISSORY NOTES".......................-7-
1.70 "PURCHASER STOCK"..............................................-7-
1.71 "RCRA".........................................................-8-
1.72 "REDUCTION"....................................................-8-
1.73 "REFERENCE BALANCE SHEET"......................................-8-
1.74 "SCHEDULE".....................................................-8-
1.75 "SEC"..........................................................-8-
1.76 "SEC DOCUMENTS"................................................-8-
1.77 "SECOND PERIOD GROSS SALES" ...................................-8-
1.78 "SECTION"......................................................-8-
1.79 "SECURITIES"...................................................-8-
1.80 "SECURITIES ACT"...............................................-8-
1.81 "SECURITIES LAWS"..............................................-8-
1.82 "SELLER STOCK".................................................-8-
1.83 "SELLER STOCK CERTIFICATE".....................................-8-
1.84 "SKU"..........................................................-8-
1.85 "SKU SALES"....................................................-8-
1.86 "STOCK OPTION" and "STOCK OPTIONS".............................-8-
1.87 "SUBSIDIARY"...................................................-8-
1.88 "SURVIVING CORPORATION"........................................-9-
1.89 "TAXES"........................................................-9-
1.90 "TAX RETURNS"..................................................-9-
1.91 "TRISTAR MEMBER"...............................................-9-
1.92 "TRISTAR STOCK"................................................-9-
1.93 "WALSWORTH"....................................................-9-
1.94 "WALSWORTH OBLIGATIONS"........................................-9-
1.95 "WALSWORTH RELEASE"............................................-9-
1.96 "WASTE MATERIALS"..............................................-9-
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2. MERGER...............................................................-9-
2.1 THE MERGER.....................................................-9-
2.2 SURVIVING CORPORATION.........................................-10-
2.3 LIABILITIES...................................................-10-
2.4 CERTIFICATE OF INCORPORATION AND BYLAWS.......................-10-
2.5 DIRECTORS AND OFFICERS........................................-10-
2.6 CONVERSION OR CANCELLATION OF STOCK UPON MERGER...............-10-
2.7 EARN-OUT......................................................-11-
2.8 EXCHANGE PROCEDURES...........................................-14-
2.9 AGREEMENTS REGARDING CERTAIN EXISTING LIABILITIES OF SELLER...-14-
2.10 STAY INCENTIVE BONUS..........................................-15-
2.11 PURCHASE PRICE ADJUSTMENT.....................................-16-
2.12 PROMISSORY NOTE TO GEORGE LUBY................................-17-
3. CLOSING; CLOSING DATE...............................................-17-
4. REPRESENTATIONS AND WARRANTIES OF SELLER............................-17-
4.1 INCORPORATION.................................................-18-
4.2 SHARE CAPITAL.................................................-18-
4.3 FINANCIAL STATEMENTS..........................................-19-
4.4 EVENTS SINCE THE BALANCE SHEET DATE...........................-20-
4.5 COMPETING INTERESTS...........................................-20-
4.6 TAXES.........................................................-21-
4.7 EMPLOYEE MATTERS..............................................-22-
4.8 CONTRACTS AND AGREEMENTS......................................-22-
4.9 EFFECT OF AGREEMENT...........................................-25-
4.10 PROPERTIES, ASSETS AND LEASEHOLD ESTATES......................-26-
4.11 INTELLECTUAL PROPERTY.........................................-27-
4.12 SUITS, ACTIONS AND CLAIMS.....................................-28-
4.13 LICENSES AND PERMITS; COMPLIANCE WITH GOVERNMENTAL REQUIREMENTS.-28-
4.14 AUTHORIZATION.................................................-28-
4.15 RECORDS.......................................................-29-
4.16 ENVIRONMENTAL PROTECTION LAWS.................................-29-
4.17 ACCOUNTS RECEIVABLE...........................................-30-
4.18 BROKERS AND FINDERS...........................................-30-
4.19 DEPOSITS......................................................-31-
4.20 WORK ORDERS...................................................-31-
4.21 CUSTOMER LIST.................................................-31-
4.22 SUPPLIER LIST.................................................-31-
4.23 NO ROYALTIES..................................................-31-
4.24 BANK ACCOUNTS.................................................-31-
4.25 INSURANCE.....................................................-31-
4.26 EMPLOYEE BENEFIT MATTERS......................................-32-
4.27 WARRANTIES AND PRODUCT LIABILITY..............................-34-
4.28 SECURITIES LAWS MATTERS.......................................-34-
4.29 MONETARY OBLIGATIONS TO CERTAIN INDIVIDUALS...................-36-
4.30 NAMES USED IN BUSINESS........................................-36-
4.31 NO UNTRUE STATEMENTS..........................................-36-
5. REPRESENTATIONS AND WARRANTIES OF THE TRISTAR PARTIES...............-37-
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5.1 PURCHASER INCORPORATION.......................................-37-
5.2 AUTHORIZATION.................................................-37-
5.3 BROKERS AND FINDERS...........................................-37-
5.4 SEC DOCUMENTS.................................................-37-
5.5 RULE 144 REPORTING............................................-38-
6. NATURE OF STATEMENTS AND SURVIVAL OF GUARANTEES, REPRESENTATIONS AND
WARRANTIES OF SELLER AND THE TRISTAR PARTIES........................-38-
7. TAX TREATMENT.......................................................-39-
8. COVENANTS OF SELLER PRIOR TO CLOSING................................-39-
8.1 GENERAL AFFIRMATIVE COVENANTS.................................-39-
8.2 GENERAL NEGATIVE COVENANTS....................................-40-
8.3 ACCESS TO INFORMATION AND INSPECTION OF PROPERTIES............-41-
8.4 PUBLICITY.....................................................-41-
8.5 GOVERNMENT FILINGS............................................-41-
8.6 CONSENT OF OTHERS.............................................-42-
8.7 NO TRANSFER OF ASSETS.........................................-42-
8.8 NOTICE OF DEVELOPMENTS........................................-42-
9. COVENANTS OF THE TRISTAR PARTIES PRIOR TO CLOSING...................-42-
9.1 GENERAL AFFIRMATIVE COVENANTS.................................-42-
9.2 PUBLICITY.....................................................-43-
9.3 GOVERNMENT FILINGS............................................-43-
9.4 CONSENT OF OTHERS.............................................-43-
9.5 NOTICE OF DEVELOPMENTS........................................-43-
10. CONDITIONS PRECEDENT TO OBLIGATIONS OF THE TRISTAR PARTIES..........-43-
10.1 OPINION OF COUNSEL FOR SELLER.................................-43-
10.2 RESOLUTIONS...................................................-44-
10.3 ACCURACY OF REPRESENTATIONS AND WARRANTIES AND FULFILLMENT
OF COVENANTS..................................................-44-
10.4 MERGER DOCUMENTS..............................................-44-
10.5 EMPLOYMENT ARRANGEMENTS.......................................-44-
10.6 NO GOVERNMENTAL ACTIONS.......................................-44-
10.7 NO ADVERSE CHANGE.............................................-44-
10.8 NOTICES AND CONSENTS..........................................-44-
10.9 INDUCEMENT AGREEMENTS.........................................-45-
10.10 TERMINATION OF CONTRACTS......................................-45-
10.11 RELEASES......................................................-45-
10.12 BRIDGEPORT FACILITY...........................................-45-
10.13 INVESTOR QUESTIONNAIRE........................................-45-
10.14 OTHER DOCUMENTS...............................................-45-
10.15 WALSWORTH AGREEMENT...........................................-46-
10.16 OUTSTANDING PROMISSORY NOTE...................................-46-
11. CONDITIONS PRECEDENT TO OBLIGATIONS OF SELLER.......................-46-
11.1 OPINION OF COUNSEL............................................-46-
11.2 RESOLUTIONS...................................................-46-
11.3 ACCURACY OF REPRESENTATIONS AND WARRANTIES AND FULFILLMENT
OF COVENANTS..................................................-46-
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11.4 MERGER DOCUMENTS..............................................-46-
11.5 CASH CONSIDERATION, PROMISSORY NOTES AND MONETARY OBLIGATIONS.-46-
11.6 COMPENSATION AGREEMENTS.......................................-47-
11.7 BRIDGEPORT LEASE AMENDMENT....................................-47-
11.8 PEOPLE'S BANK DEBT............................................-47-
11.9 WALSWORTH OPTION..............................................-47-
11.10 OTHER DOCUMENTS...............................................-47-
12. SPECIAL CLOSING AND POST-CLOSING COVENANTS..........................-47-
12.1 TERMINATION OF AGREEMENTS.....................................-47-
12.2 FURTHER ASSURANCES............................................-47-
13. OFFSET PROVISIONS...................................................-47-
14. TERMINATION.........................................................-48-
14.1 MUTUAL CONSENT................................................-48-
14.2 FAILURE OF CONDITIONS.........................................-48-
14.3 FAILURE TO CLOSE..............................................-49-
15. NOTICES.............................................................-49-
16. GENERAL PROVISIONS..................................................-50-
16.1 GOVERNING LAW; INTERPRETATION; SECTION HEADINGS...............-50-
16.2 SEVERABILITY..................................................-50-
16.3 ENTIRE AGREEMENT..............................................-50-
16.4 BINDING EFFECT................................................-50-
16.5 THIRD-PARTY BENEFICIARIES.....................................-51-
16.6 ASSIGNMENT....................................................-51-
16.7 AMENDMENT; WAIVER.............................................-51-
16.8 GENDER; NUMBERS...............................................-51-
16.9 COUNTERPARTS..................................................-51-
16.10 TELECOPY EXECUTION AND DELIVERY...............................-51-
16.11 EXPENSES......................................................-52-
16.12 ARBITRATION...................................................-52-
16.13 REVIEW OF COUNSEL.............................................-53-
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PLAN OF MERGER AND ACQUISITION AGREEMENT
THIS PLAN OF MERGER AND ACQUISITION AGREEMENT (this "AGREEMENT") is made
and entered into this 10 day of November, 1999, to be effective November 1,
1999, by and among (i) Fragrance Impressions Limited, a Connecticut corporation
("Seller"), (ii) Tristar Corporation, a Delaware corporation ("TRISTAR"), and
(iii) Tristar USA, Inc., a Delaware corporation and a subsidiary of Tristar
("PURCHASER", and together with Tristar, the "TRISTAR PARTIES").
W I T N E S S E T H :
WHEREAS, Tristar is primarily in the business of marketing and
distributing designer alternative fragrances, cosmetics and bath and body
products;
WHEREAS, in connection with the transactions contemplated by this
Agreement, Tristar previously caused Purchaser to be organized and to issue to
Tristar all of the issued and outstanding shares of capital stock of Purchaser;
WHEREAS, Seller is in the business of marketing and distributing designer
alternative fragrances, cosmetics and bath and body products (the "BUSINESS");
WHEREAS, the respective boards of directors of Purchaser and Seller and
the shareholders of Seller and Purchaser have voted to approve the merger of
Seller with and into Purchaser (the "MERGER") pursuant to the terms and subject
to the conditions of this Agreement; and
WHEREAS, this Agreement is intended to qualify under Section 368 of the
Internal Revenue Code of 1986, as amended (the "CODE");
NOW, THEREFORE, in consideration of the mutual covenants hereinafter
contained, the parties hereto agree that Seller shall be merged with and into
Purchaser and that the terms and conditions of the Merger, the method of
carrying the Merger into effect and certain other provisions relating thereto
shall be as hereinafter set forth:
1. GENERAL DEFINITIONS. For purposes of this Agreement, the following
terms shall have the respective meanings set forth below:
1.1 "ACCOUNTS RECEIVABLE" has the meaning assigned thereto in SECTION
4.17.
1.2 "AFFILIATE" of any Person means any Person Controlling, Controlled by
or under common Control with such Person.
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1.3 "ARTICLE" and all references to an Article means an Article of this
Agreement unless otherwise stated.
1.4 "ASSETS" means the assets, properties and rights of a Person of every
nature, kind and description, wherever located, tangible and intangible, real,
personal and mixed, whether or not reflected in the books and records of such
Person as owned by such Person.
1.5 "ASSOCIATE" has the meaning assigned thereto in SECTION 4.5.
1.6 "ATTORNEYS' FEES" means an amount of the Cash Consideration not to
exceed $73,000.00.
1.7 "AUTHORIZATION" means any consent, approval or authorization of,
expiration or termination of any waiting period requirement (including pursuant
to the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended) by, or
filing, registration, qualification, declaration or designation with, any
Governmental Authority.
1.8 "BALANCE SHEET DATE" has the meaning assigned thereto in SECTION 4.3.
1.9 "BEST KNOWLEDGE" means both what a Person knew as well as what the
Person should have known had the person exercised reasonable diligence
appropriate under existing circumstances. When used with respect to a Person
other than a natural person, the term "Best Knowledge" shall include matters
that are known to the directors and officers of the Person.
1.10 "BRIDGEPORT LEASE AMENDMENT" has the meaning assigned thereto in
SECTION 10.12.
1.11 "BUSINESS" has the meaning assigned thereto in the recitals hereto.
1.12 "BUSINESS DAY" means any day other than Saturday, Sunday or other day
on which federally chartered commercial banks in San Antonio, Texas are
authorized or required by law to close.
1.13 "CALCULATION DATE" has the meaning assigned thereto in SECTION 2.7.
1.14 "CASH CONSIDERATION" has the meaning assigned thereto in SECTION 2.6.
1.15 "CATAPANO" means Robert Catapano, an individual, currently Vice
President and Chief Financial Officer of Seller.
1.16 "CATAPANO OBLIGATIONS" means the monetary obligations described in
SECTION 2.9(A) that are due to Catapano.
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1.17 "CERCLA" means the Comprehensive Environmental, Response,
Compensation, and Liability Act of 1980, as amended.
1.18 "CLOSING" has the meaning assigned thereto in ARTICLE 3.
1.19 "CLOSING DATE" has the meaning assigned thereto in ARTICLE 3.
1.20 "CODE" means the Internal Revenue Code of 1986, as amended.
1.21 "COMPENSATION AGREEMENTS" has the meaning assigned thereto in SECTION
10.5.
1.22 "CONTRACTS" has the meaning assigned thereto in SECTION 4.8(C).
1.23 "CONTROL" and all derivations thereof means the ability to either (a)
vote (or direct the vote of) 50% or more of the voting interests in any Person
or (b) direct the affairs of another, whether through voting power, contract or
otherwise.
1.24 "DAMAGES" means any and all liabilities, losses, damages, demands,
assessments, punitive damages, loss of profits, refund obligations (including,
without limitation, interest and penalties thereon) claims of any and every kind
whatsoever, costs and expenses (including interest, awards, judgments,
penalties, settlements, fines, costs of remediation, diminutions in value, costs
and expenses incurred in connection with investigating, prosecuting and
defending any claims or causes of action (including, without limitation,
reasonable attorneys' fees and reasonable expenses and all reasonable fees and
reasonable expenses of consultants and other professionals)).
1.25 "DAVIS" means Mel Davis, an individual, currently a consultant to the
Seller.
1.26 "DAVIS NOTE" means that certain promissory note dated June 30, 1997,
in the stated principal amount of $87,500, issued by Seller to Mel Davis.
1.27 "DAVIS RELEASE" has the meaning assigned thereto in SECTION 10.11.
1.28 "DISCLOSURE SCHEDULE" has the meaning assigned thereto in ARTICLE 4.
1.29 "EARN-OUT" has the meaning assigned thereto in SECTION 2.7.
1.30 "EARN-OUT PERIOD" has the meaning assigned thereto in SECTION 2.7.
1.31 "ECKERD"means Eckerd Corporation, a Delaware corporation.
1.32 "ECKERD GROSS SALES"means the total gross revenues earned by the
Seller and the Surviving Corporation by selling product to Eckerd from January
1, 1999 through December 31,
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1999, as determined in accordance with generally accepted accounting principles
and historical accounting practices of Seller, consistently applied.
1.33 "EFFECTIVE TIME" means the time at which a properly executed
certificate of merger in substantially the form attached hereto as EXHIBIT
1.33(A) (together with other documents required by law to effect the Merger) has
been filed with the Secretary of State of Delaware, properly executed Articles
of Merger in substantially the form attached hereto as EXHIBIT 1.33(B) (together
with other documents required by law to effect the Merger) has been filed with
the Secretary of State of Connecticut and such other documents and instruments
have been filed in any other jurisdiction where such an article or certificate
of merger is required.
1.34 "ENCUMBRANCE" means any security interest, mortgage, pledge, trust,
claim, lien, charge, option, defect, restriction, encumbrance or other right or
interest of any third Person of any nature whatsoever.
1.35 "ENVIRONMENTAL LAWS" means any and all applicable laws, statutes,
ordinances, rules, regulations, orders, or determinations of any Governmental
Authority pertaining to the environment heretofore or currently in effect in any
and all jurisdictions in which Seller is conducting or at any time has conducted
business, or where any of the Assets are located, or where any hazardous
substances generated by or disposed of by Seller are located. "Environmental
Laws" shall include, but not be limited to, the Clean Air Act, as amended,
CERCLA, the Federal Water Pollution Control Act, as amended, RCRA, the Safe
Drinking Water Act, as amended, the Toxic Substances Control Act, as amended,
and all other applicable laws, statutes, ordinances, rules, regulations, orders
and determinations of any Governmental Authority relating to (a) the control of
any potential pollutant or protection of the air, water or land, (b) solid,
gaseous or liquid waste generation, handling, treatment, storage, disposal or
transportation and (c) exposure to hazardous, toxic or other substances alleged
to be harmful. The terms "hazardous substance", "release" and "threatened
release" has the meanings specified in CERCLA, and the terms "solid waste" and
"disposal" (or "disposed") has the meanings specified in RCRA.
1.36 "ERISA" means the Employee Retirement Income Security Act of 1974, as
amended.
1.37 "EXCHANGE ACT" means the Securities Exchange Act of 1934, as amended.
1.38 "FALKOWSKI" means Robert Falkowski, an individual, currently the
Regional Sales Manager of Seller.
1.39 "FALKOWSKI OBLIGATIONS" means the monetary obligations described in
SECTION 2.9(A) that are due to Falkowski.
1.40 "FINANCIAL STATEMENTS" has the meaning assigned thereto in SECTION
4.3.
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1.41 "FIRST PERIOD GROSS SALES" has the meaning assigned thereto in
SECTION 2.7.
1.42 "FRIEDMAN" means Jack Friedman, an individual, currently a creditor
of Seller.
1.43 "FRIEDMAN NOTE" means that certain promissory note dated September
27, 1995, in the stated principal amount of $1,000,000, issued by Seller to
Friedman.
1.44 "FRIEDMAN OBLIGATIONS" means the monetary obligations described in
SECTION 2.9(C) that are due to Friedman.
1.45 "FRIEDMAN RELEASE" has the meaning assigned thereto in SECTION 10.11.
1.46 "GEORGE LUBY" means George Luby, an individual, currently Chairman of
the Board of Directors of Seller.
1.47 "GOVERNMENTAL AUTHORITY" means any and all foreign, federal, state or
local governments, governmental institutions, public authorities and
governmental entities of any nature whatsoever, and any subdivisions or
instrumentalities thereof, including, but not limited to, departments, boards,
bureaus, commissions, agencies, courts, administrations and panels, and any
divisions or instrumentalities thereof, whether permanent or ad hoc and whether
now or hereafter constituted or existing.
1.48 "GOVERNMENTAL REQUIREMENT" means any and all applicable laws
(including, but not limited to, applicable common law principles), statutes,
ordinances, codes, rules, regulations, interpretations, guidelines, directions,
orders, judgments, writs, injunctions, decrees, decisions or similar items or
pronouncements, promulgated, issued, passed or set forth by any Governmental
Authority in effect as of the Effective Time.
1.49 "GROSS SALES" means the total gross revenues earned by the Surviving
Corporation by selling product during the applicable Earn-Out Period, as
determined in accordance with generally accepted accounting principles and
historical accounting practices of Seller, consistently applied with periods
prior to the Effective Time, which shall include SKU Sales.
1.50 "INDUCEMENT AGREEMENTS" has the meaning assigned thereto in SECTION
10.9.
1.51 "INTELLECTUAL PROPERTY" means:
(a) all of Seller's patents and applications therefor, including,
but not limited to, all divisions, reissues, substitutions, reexaminations,
continuations, continuations-in-part and extensions thereof;
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(b) all of Seller's inventions, whether or not patentable,
including, but not limited to, all new developments and inventions, as well as
all improvements on prior inventions regardless of prior inventorship; and
(c) all of Seller's know-how and work product, regardless of form
and whether tangible or intangible, including, but not limited to, (i) invention
and laboratory notebooks, (ii) source codes and object codes, (iii) system
designs, system specifications, flow charts, test data, records and journals,
(iv) blueprints, drawings and photographs, (v) research and engineering reports,
including any models or other hardware, (vi) licensing, marketing or development
analysis, and (vii) customer or prospective customer lists;
(d) all of Seller's copyright interests regardless of actual or
potential registrability, and including moral rights, rights of publication and
rights of attribution and integrity;
(e) all of Seller's trademark or service mark interests, together
with all of the goodwill of the business associated therewith and represented
thereby;
(f) all of Seller's trade secrets; and
(g) all of Seller's other intellectual property and other
proprietary interests, whether or not identifiable as of the date of execution
hereof, relating to, or used in connection with, the Business.
1.52 "IRS" means the Internal Revenue Service.
1.53 "KEY EMPLOYEES" has the meaning assigned thereto in SECTION 2.9.
1.54 "LUBY" means Robert Luby, an individual, currently a Vice President
of Seller.
1.55 "LUBY OBLIGATIONS" means the monetary obligations described in
SECTION 2.9(A) that are due to Luby.
1.56 "MATERIAL ADVERSE EFFECT" means a material adverse effect on the
Business, Assets, properties, operations, condition (financial or otherwise) or
results of operations of Seller, the Surviving Corporation, the Tristar Parties
or Tristar's Subsidiaries, as applicable.
1.57 "MCCANN" means Thomas E. McCann, an individual, currently the
President of Seller.
1.58 "MERGER CONSIDERATION" has the meaning assigned thereto in SECTION
2.6.
1.59 "MERGER DOCUMENTS" has the meaning assigned thereto in SECTION 2.1.
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1.60 "NON-OFFSET PROMISSORY NOTE" and "NON-OFFSET PROMISSORY NOTES" each
has the meaning assigned thereto in SECTION 2.6.
1.61 "OFFSET PROMISSORY NOTE" and "OFFSET PROMISSORY NOTES" each has the
meaning assigned thereto in SECTION 2.6.
1.62 "PBGC" has the meaning assigned thereto in SECTION 4.26(D).
1.63 "PEOPLE'S BANK" means People's Bank whose address is 850 Main Street,
Bridgeport Center, Bridgeport, Connecticut 06604.
1.64 "PEOPLE'S BANK LOAN AGREEMENT" means that certain First Amended and
Restated Loan and Security Agreement dated February 4, 1999, amending and
restating that certain Revolving Loan and Security Agreement dated July 29,
1995, each by and between People's Bank and Seller.
1.65 "PEOPLE'S BANK NOTES" means that certain First Amended and Restated
Revolving Promissory Note dated February 4, 1999, in the stated principal amount
of $5,693,000, issued by Seller to People's Bank and that certain Promissory
Note dated May 28, 1996, in the stated principal amount of $45,000, issued by
Seller to People's Bank.
1.66 "PEOPLE'S BANK RELEASE" has the meaning assigned thereto in SECTION
10.11.
1.67 "PERMITTED ENCUMBRANCES" means (a) Encumbrances for current taxes and
assessments not yet past due or which are being contested in good faith by
appropriate proceedings and with respect to which adequate reserves are
reflected in the Financial Statements, all of which Encumbrances are set forth
on SCHEDULE 1.67, (b) mechanics and materialmen Encumbrances for construction in
progress whether or not perfected by filing, recording, giving of notice or
other appropriate action in the relevant jurisdiction, (c) workmen, repairmen,
warehousemen, carriers, lessors and operators Encumbrances arising in the
ordinary course of business whether or not perfected by filing, recording,
giving of notice or other appropriate action in the relevant jurisdiction, and
(d) easements, including agreements and deeds of easement, and other minor
imperfections of title which could not have a Material Adverse Effect.
1.68 "PERSON" means any natural person, any Governmental Authority and any
entity, the separate existence of which is recognized by any Governmental
Authority or Governmental Requirement, including, but not limited to,
corporations, partnerships, joint ventures, joint stock companies, trusts,
estates, companies and associations, whether organized for profit or otherwise.
1.69 "PROMISSORY NOTE" and "PROMISSORY NOTES" each has the meaning
assigned thereto in SECTION 2.6.
1.70 "PURCHASER STOCK" means the common stock, $.01 par value, of
Purchaser.
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1.71 "RCRA" means the Resource Conservation and Recovery Act of 1976, as
amended.
1.72 "REDUCTION" has the meaning assigned thereto in SECTION 2.7.
1.73 "REFERENCE BALANCE SHEET" has the meaning assigned thereto in SECTION
4.3.
1.74 "SCHEDULE" and all references to Schedules means the Schedules to
this Agreement unless otherwise stated and includes the Disclosure Schedule. The
Schedules to this Agreement may be attached to this Agreement or may be set
forth in a separate document denoted as the Schedules to this Agreement, or
both.
1.75 "SEC" means the United States Securities and Exchange Commission.
1.76 "SEC DOCUMENTS" has the meaning assigned thereto in SECTION 5.4.
1.77 "SECOND PERIOD GROSS SALES" has the meaning assigned thereto in
SECTION 2.7.
1.78 "SECTION" and all references to a Section means the Section of this
Agreement unless otherwise stated.
1.79 "SECURITIES" has the meaning assigned thereto in SECTION 4.28(A).
1.80 "SECURITIES ACT" means the Securities Act of 1933, as amended.
1.81 "SECURITIES LAWS" has the meaning assigned thereto in SECTION
4.28(A).
1.82 "SELLER STOCK" means the common stock, par value $1.00, of Seller.
1.83 "SELLER STOCK CERTIFICATE" means each stock certificate representing
shares of Seller Stock.
1.84 "SKU" stands for "stock keeping unit" and means each separate size
and formulation of single products and multi-product packages offered for sale
to customers.
1.85 "SKU SALES" means all sales by Tristar or an Affiliate of Tristar to
existing customers of existing SKUs of Seller and any new customers in the chain
drug, mass merchants, supermarket chains and speciality chain markets with
respect to existing or new SKUs of Seller.
1.86 "STOCK OPTION" and "STOCK OPTIONS" each has the meaning assigned
thereto in SECTION 2.6.
1.87 "SUBSIDIARY" means, with respect to any Person (the "PARENT"), (a)
any corporation, association, joint venture, partnership or other business
entity of which securities or other ownership
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interests representing more than 50% of the ordinary voting power or beneficial
interest are, at the time as of which any determination is being made, owned or
controlled by the parent or one or more subsidiaries of the parent or by the
parent and one or more subsidiaries of the parent and (b) any joint venture or
partnership of which the parent or any Subsidiary of the parent is a general
partner or has responsibility for its management.
1.88 "SURVIVING CORPORATION" means the corporation existing at and after
the Effective Time as a result of the Merger.
1.89 "TAXES" means any foreign, federal, state or local tax, assessment,
levy, impost, duty, withholding, estimated payment or other similar governmental
charge, together with any penalties, additions to tax, fines, interest and
similar charges thereon or related thereto.
1.90 "TAX RETURNS" means all Tax returns and reports (including, without
limitation, income, franchise, sales and use, unemployment compensation, excise,
severance, property, gross receipts, profits, payroll and withholding Tax
returns and information returns).
1.91 "TRISTAR MEMBER" means the Tristar Parties and the Surviving
Corporation.
1.92 "TRISTAR STOCK" means the common stock, $.01 par value, of Tristar.
1.93 "WALSWORTH" means Ron Walsworth, an individual, currently a
consultant to the Seller.
1.94 "WALSWORTH OBLIGATIONS" means the monetary obligations described in
SECTION 2.9(B) that are due to Walsworth.
1.95 "WALSWORTH RELEASE" has the meaning assigned thereto in SECTION
10.11.
1.96 "WASTE MATERIALS" means any toxic or hazardous materials or
substances, or solid wastes, including asbestos, buried contaminants, chemicals,
flammable or explosive materials, radioactive materials, petroleum and petroleum
products, and any other chemical, pollutant, contaminant, substance or waste
that is regulated by any Governmental Authority under any Environmental Law.
2. MERGER.
2.1 THE MERGER. Subject to the terms and conditions of this Agreement,
Seller shall be merged with and into Purchaser in accordance with all applicable
laws, with Purchaser being the Surviving Corporation. Purchaser and Seller shall
cause a certificate of merger to be filed with the Secretary of State of
Delaware, articles of merger to be filed with the Secretary of State of
Connecticut and such other documents and instruments to be filed in any other
jurisdiction where
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such a certificate or articles of merger is required, within two Business Days
after the Closing Date, unless legally prohibited from doing so (the certificate
of merger, the articles of merger and all other such documents and instruments
referenced in this Section, the "MERGER DOCUMENTS"). The Merger shall be
effective at the Effective Time.
2.2 SURVIVING CORPORATION. From and after the Effective Time, the
Surviving Corporation shall have the name Tristar USA, Inc. and shall possess
all Assets and every interest in the Assets, and the rights, privileges,
immunities, powers, franchises and authority, of a public as well as of a
private nature, of each of Seller and Purchaser, and all debts and all other
things in action or belonging or due to each of Seller and Purchaser, all of
which shall be vested in the Surviving Corporation without further act or deed,
and title to any real estate or any interest in the real estate vested in either
Seller or Purchaser shall not revert or in any way be impaired.
2.3 LIABILITIES. The Surviving Corporation shall be liable for all the
debts, liabilities and duties of each of Seller and Purchaser. Any action or
proceeding pending, by or against either Seller or Purchaser, may be prosecuted
to judgment, with right of appeal, as if the Merger had not taken place, or the
Surviving Corporation may be substituted in its place, and all the rights of
creditors of each of Seller and Purchaser shall be preserved unimpaired, and all
liens upon the property of each of Seller and Purchaser shall be preserved
unimpaired, on only the property affected by the liens immediately prior to the
Effective Time.
2.4 CERTIFICATE OF INCORPORATION AND BYLAWS. The certificate of
incorporation and bylaws of Purchaser in effect immediately prior to the
Effective Time shall be the certificate of incorporation and bylaws of the
Surviving Corporation following the Merger until otherwise amended or repealed.
2.5 DIRECTORS AND OFFICERS. The directors and officers of Purchaser
immediately prior to the Effective Time shall be the directors and officers of
the Surviving Corporation until their successors are duly elected or appointed
and qualified in the manner provided in the bylaws of the Surviving Corporation,
or as otherwise provided by law.
2.6 CONVERSION OR CANCELLATION OF STOCK UPON MERGER. In consideration for
the Merger and the non-competition, non-solicitation and non-disclosure
agreements in the Inducement Agreements and the other covenants and agreements
of the shareholders of Seller in the Inducement Agreements, as of the Effective
Time, by virtue of the Merger and without any action on the part of the holders
of any shares of Seller Stock, or the holder of the shares of Purchaser Stock,
(a) the aggregate Seller Stock outstanding immediately before the Effective Time
shall be converted into the right to receive (i) cash in the aggregate amount of
$350,000 (the "CASH CONSIDERATION"), (ii) promissory notes (each a "PROMISSORY
NOTE" and collectively, the "PROMISSORY NOTES") in the aggregate principal
amount of $3,050,000 issued by Purchaser and Tristar, as joint and several co-
makers, and (iii) options (each a "STOCK OPTION" and collectively, the "STOCK
OPTIONS") to purchase in the aggregate 100,000 shares of Tristar Stock at an
exercise price equal to $5.82, each in substantially the form attached hereto as
EXHIBIT 2.6(A) (the Cash Consideration, the Promissory
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Notes, the Stock Options and the Earn-Out are collectively referred to herein as
the "MERGER CONSIDERATION"), and (b) each share of Purchaser Stock outstanding
immediately before the Effective Time shall be converted into one share of
common stock of the Surviving Corporation. At the Closing, the Cash
Consideration less the Attorneys' Fees shall be paid to the shareholders of
Seller as set forth in SCHEDULE 2.6 by wire transfer of immediately available
funds to the account designated on SCHEDULE 2.6 for the shareholder entitled
thereto, Purchaser shall issue a Promissory Note (such Promissory Note
hereinafter referred to as an "OFFSET PROMISSORY NOTE") to each shareholder of
Seller identified on SCHEDULE 2.6 as receiving an Offset Promissory Note, each
such Offset Promissory Note to be in substantially the form attached hereto as
EXHIBIT 2.6(B) and in the stated principal amount as set forth in SCHEDULE 2.6,
Purchaser shall issue a Promissory Note (such Promissory Note hereinafter
referred to as a "NON-OFFSET PROMISSORY NOTE") to each shareholder of Seller
identified on SCHEDULE 2.6 as receiving a Non-Offset Promissory Note, each such
Non-Offset Promissory Note to be in substantially the form attached hereto as
EXHIBIT 2.6(C) and in the stated principal amount as set forth in SCHEDULE 2.6,
Tristar shall issue a Stock Option to each shareholder of Seller exercisable for
the amount of Tristar Stock as set forth in SCHEDULE 2.6, and the Attorneys'
Fees shall be paid as set forth on SCHEDULE 2.6.
2.7 EARN-OUT.
(a) GENERALLY. As of January 1, 2001 and again as of January 1, 2002
(each such date, a "CALCULATION DATE"), the Surviving Corporation shall
determine its Gross Sales for the immediately preceding 12-month period (each
such period, an "EARN-OUT PERIOD"). If as of the Calculation Date, the Gross
Sales of the Surviving Corporation for such Earn-Out Period exceed the amounts
set forth below, then, as additional consideration for the Merger, Seller Stock
outstanding immediately before the Effective Time shall be deemed to have been
converted into the right to receive cash (the "EARN-OUT") in the amount set
forth below opposite the level of Gross Sales achieved for such Earn-Out Period.
The aggregate maximum Earn-Out for the two Earn-Out Periods shall be $645,000.
GROSS SALES EARN-OUT
Less than $13,200,000 $0
Greater than $13,200,000 but 12.5% of any excess amount over
less than $14,200,000 $13,200,000
Greater than $14,200,000 but $125,000 PLUS 14.5% of any excess
less than $15,200,000 amount over $14,200,000
Greater than $15,200,000 but $270,000 PLUS 17.5% of any excess
less than $16,200,000 amount over $15,200,000
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Greater than $16,200,000 $445,000 PLUS 20% of any excess
amount over $16,200,000, up
to a maximum of $645,000
If as of the Calculation Date, the Gross Sales of the Surviving
Corporation for such Earn-Out Period are less than the amounts set forth below,
then the Tristar Parties shall be entitled to reduce the principal and interest
payments due on the Offset Promissory Notes by the amount set forth below
opposite the level of Gross Sales achieved for such Earn-Out Period (the
"REDUCTION"). The aggregate maximum Reduction for the two Earn-Out Periods shall
be $645,000.
GROSS SALES REDUCTION
$13,200,000 or more $0
Less than $13,200,000 but 12.5% of any amount below
$12,200,000 or more $13,200,000
Less than $12,200,000 but $125,000 PLUS 14.5% of any amount
$11,200,000 or more below $12,200,000
Less than $11,200,000 but $270,000 PLUS 17.5% of any amount
$10,200,000 or more below $11,200,000
Less than $10,200,000 $445,000 PLUS 20% of any amount
below $10,200,000, up to a maximum
of $645,000
Within 90 days after each Calculation Date, the Surviving Corporation
shall provide McCann (as the representative of Seller and the shareholders of
Seller) a written report detailing the Gross Sales for the immediately preceding
12-month period prior to such Calculation Date, together with all supporting
documentation reasonably requested by McCann. Within 30 days of receipt of such
written report, McCann shall inform the Surviving Corporation in writing that
either the determination of Gross Sales is acceptable or object to such
determination in writing setting forth a specific description of his objections
(it being agreed that McCann's failure to deliver such written notice to the
Surviving Corporation within such 30-day period shall be deemed acceptance by
McCann). If McCann objects as provided above and if the Surviving Corporation
does not agree with such objections, if any (it being agreed that the Surviving
Corporation's failure to deliver written notice to McCann of the Surviving
Corporation's disagreement with such objections within 30 days of the Surviving
Corporation's receipt of such objections shall be deemed acceptance by the
Surviving Corporation), or such objections are not resolved on a mutually
agreeable basis within 30 days after the Surviving Corporation's receipt of such
objections, any such disagreement shall be promptly submitted to a mutually
acceptable "big-five" accounting firm that has no affiliation with
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any shareholder of Seller, Seller, the Surviving Corporation or Tristar (the
"UNAFFILIATED FIRM"). The Unaffiliated Firm shall resolve within 30 days after
said Unaffiliated Firm's engagement by the parties the differences regarding
Gross Sales in accordance with generally accepted accounting principles
consistently applied and this Agreement. The decision of such Unaffiliated Firm
shall be final and binding upon the Surviving Corporation and the shareholders
of Seller, and the fees, costs and expenses of the Unaffiliated Firm shall be
shared equally between the shareholders of Seller and the Surviving Corporation.
The shareholders of Seller and the Surviving Corporation shall each bear the
fees, costs and expenses of his or its own accountants. All actions and
determinations by McCann under this SECTION 2.7 shall be final and binding on
the shareholders of Seller.
(b) CALCULATION OF EARN-OUT WHEN GROSS SALES FOR FIRST EARN-OUT PERIOD
RESULT IN AN EARN-OUT. If Gross Sales for the first Earn-Out Period (the "FIRST
PERIOD GROSS SALES") result in a Earn-Out for such Earn-Out Period, the
shareholders of Seller shall be entitled to an Earn-Out for such Earn-Out
Period, and the Earn-Out or Reduction for the second Earn-Out Period shall be
calculated as follows: (i) if Gross Sales for the second Earn-Out Period (the
"SECOND PERIOD GROSS SALES") are greater than or equal to $13,200,000 but less
than or equal to the First Period Gross Sales, there shall not be any Earn-Out
or Reduction for the second Earn-Out Period; (ii) if Second Period Gross Sales
are greater than the First Period Gross Sales, the Earn-Out for the second
Earn-Out Period shall be equal to the Earn-Out for such Earn-Out Period
calculated pursuant to the charts set forth in SECTION 2.7(A) less the Earn-Out
for the first Earn-Out Period; and (iii) if Second Period Gross Sales are less
than $13,200,000, the Reduction for such Earn-Out Period shall be calculated
pursuant to the charts set forth in SECTION 2.7(A).
(c) CALCULATION OF EARN-OUT WHEN GROSS SALES FOR FIRST EARN-OUT PERIOD
RESULT IN A REDUCTION. If First Period Gross Sales result in a Reduction for
such Earn-Out Period, the Tristar Parties shall be entitled to a Reduction for
such Earn-Out Period, and the Earn-Out or Reduction for the second Earn-Out
Period shall be calculated as follows: (i) if Second Period Gross Sales are less
than or equal to $13,200,000 but greater than or equal to the First Period Gross
Sales, there shall not be any Earn-Out or Reduction for the second Earn-Out
Period; (ii) if Second Period Gross Sales are less than the First Period Gross
Sales, the Tristar Parties shall be entitled to a Reduction for such Earn-Out
Period calculated pursuant to the charts set forth in SECTION 2.7(A) less the
Reduction for the first Earn-Out Period, and (iii) if Second Period Gross Sales
are greater than $13,200,000, the Earn-Out for such Earn-Out Period shall be
calculated pursuant to the charts set forth in SECTION 2.7(A).
(d) PAYMENT OF EARN-OUT. The Earn-Out, if any, for each Earn-Out Period
shall be paid on or before the later of 90 days after the end of such Earn-Out
Period and the date the determination of Gross Sales is deemed final pursuant to
the provisions of SECTION 2.7(A) pro rata to the shareholders of Seller as set
forth in SCHEDULE 2.6 by wire transfer of immediately funds to accounts
designated on SCHEDULE 2.6 for each such shareholder.
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(e) PAYMENT OF REDUCTION. If the Tristar Parties are entitled to a
Reduction as a result of the Gross Sales for either of the Earn-Out Periods, the
Reduction shall be paid as follows: (i) if the the First Period Gross Sales
result in a Reduction, the principal and interest payments due in 2001 on the
Offset Promissory Notes shall be reduced pro-rata according to the stated
principal amount of each Offset Promissory Note, by the amount of the Reduction;
and (ii) if the Second Period Gross Sales result in a Reduction, the principal
and interest due in 2002 on the Offset Promissory Notes shall be reduced
pro-rata according to the stated principal amount of each Offset Promissory
Note, by the amount of the Reduction.
(f) LOSS OF ECKERD ACCOUNT. If during either Earn-Out Period, the amount
of Gross Sales to Eckerd is less than the amount of the Eckerd Gross Sales, then
for purposes of determining the Earn-Out or Reduction for such Earn-Out Period
(and the subsequent Earn-Out Period, if applicable), the Gross Sales
attributable to the sale of product to Eckerd by the Surviving Corporation for
such Earn-Out Period shall be deducted from the Gross Sales for such Earn-Out
Period and the Gross Sales for such Earn-Out Period shall be increased by the
amount of the Eckerd Gross Sales.
2.8 EXCHANGE PROCEDURES.
(a) After the Effective Time, each outstanding Seller Stock
Certificate shall, until duly surrendered to Purchaser as contemplated by this
SECTION 2.8, be deemed to represent only the right to receive a portion of the
Merger Consideration as contemplated by SECTION 2.6.
(b) After the Effective Time, there shall be no further transfer on
the records of Seller of Seller Stock Certificates, and each share of Seller
Stock presented or surrendered to Purchaser shall be canceled in exchange for a
portion of the Merger Consideration as contemplated by SECTION 2.6. Purchaser
shall not be obligated to deliver any Merger Consideration to any holder of a
Seller Stock Certificate until such holder surrenders such Seller Stock
Certificate as provided herein or delivers an affidavit of lost stock
certificate and provides indemnification acceptable to Purchaser.
2.9 AGREEMENTS REGARDING CERTAIN EXISTING LIABILITIES OF SELLER.
(a) KEY EMPLOYEES. Pursuant to change of control provisions in the
employment agreements between Seller and each of Falkowski, Luby and Catapano
(Falkowski, Luby and Catapano collectively, the "KEY EMPLOYEES"), upon the
closing of the transactions contemplated by this Agreement, Seller will have
certain monetary obligations to each of the Key Employees. In full satisfaction
of such monetary obligations, the Tristar Parties shall, at Closing, pay $30,000
to each of Falkowski and Luby and $180,000 to Catapano in cash by wire transfer
of immediately available funds to an account designated by such Key Employee
PLUS issue to each Key Employee (i) a promissory note in the stated principal
amount of the balance due such Key Employee on such monetary obligations
substantially in the form of the promissory note attached hereto as EXHIBIT
2.9(A) and (ii) an option in form acceptable to the parties thereto to purchase
10,000 shares of Tristar
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Stock at an exercise price of $5.82. The maximum liability of the Tristar as to
each Key Employee pursuant to this SECTION 2.9(A) shall be the amount
represented by Seller in SECTION 4.29 as the amount due such Key Employee. The
payments to and issuance of the notes to each Key Employee are being issued in
satisfaction of obligations to the Key Employee arising under an employment
agreement between the Key Employee and Seller. Therefore the cash payments to
the Key Employees under this SECTION 2.9(A) and the principal and interest
payments on the promissory notes to be issued pursuant to this SECTION 2.9(A)
will be reduced by all standard legal deductions such as, without limitation,
F.I.C.A. and income tax withholding.
(b) RON WALSWORTH. Seller has certain monetary obligations to
Walsworth arising from commissions earned but not paid. At Closing, in full
satisfaction of such monetary obligations, (i) Purchaser shall pay to Walsworth
$74,000 by wire transfer of immediately available funds to an account designated
by Walsworth, (ii) the Tristar Parties shall issue to Walsworth a promissory
note substantially in the form of the promissory note attached hereto as EXHIBIT
2.9(B)(1) in the stated principal amount of the balance due Walsworth on such
monetary obligations less $60,000, and (iii) the Tristar Parties shall issue
Walsworth a promissory note substantially in the form of the promissory note
attached hereto as EXHIBIT 2.9(B)(2). The maximum liability of the Tristar
Parties pursuant this SECTION 2.9(B) shall be the amount represented by Seller
in SECTION 4.29 as the maximum due Walsworth. Seller shall use its best efforts
to cause Walsworth at Closing to execute and deliver to the Tristar Parties the
Walsworth Release.
(c) JACK FRIEDMAN. Seller has certain monetary obligations to
Friedman arising in connection with the Friedman Note. In full satisfaction of
such monetary obligations, the Tristar Parties agree at Closing to issue to
Friedman a promissory note in the stated principal amount of the amount due
Friedman on such monetary obligations and substantially in the form of the
promissory note attached hereto as EXHIBIT 2.9(C). The maximum liability of the
Surviving Corporation pursuant this SECTION 2.9(C) shall be the amount
represented by Seller in SECTION 4.29 as the maximum due Friedman. Seller shall
use its best efforts to cause Friedman at Closing to execute and deliver to the
Tristar Parties the Friedman Release.
(d) MEL DAVIS. Seller has certain monetary obligations to Davis
arising in connection with the Davis Note. In full satisfaction of such monetary
obligations, the Tristar Parties agree at Closing to issue to Davis a promissory
note in the stated principal amount of $33,654.00 and substantially in the form
of the promissory note attached hereto as EXHIBIT 2.9(D). Seller shall use its
best efforts to cause Davis at Closing to execute and deliver to Purchaser the
Davis Release.
2.10 STAY INCENTIVE BONUS. In the event that the individual is an employee
of the Surviving Corporation on March 1, 2000 or is terminated by the Surviving
Corporation without cause prior to March 1, 2000, the Surviving Corporation
shall pay to such individual, in cash, on or before the earlier of March 3, 2000
and the date of termination without cause, the amount set forth opposite the
individual's name in the chart below, less standard legal deductions such as,
without limitation, F.I.C.A. and income tax withholding:
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Fred Ryan $15,000
Tracy Rondini $12,000
Sandra Violette $15,000
Richard Edwards $10,000
Doris Albanese $ 3,000
Fred Reinke $ 3,000
Stanley Seabrook $ 2,000
2.11 PURCHASE PRICE ADJUSTMENT.
(a) BAD INVENTORY. On or before April 30, 2000, the Surviving
Corporation shall determine the amount of Bad Inventory (hereinafter defined)
and provide to McCann (as the representative of Seller and the shareholders of
Seller) its determination of such amount and thereafter provide to McCann with
all supporting documentation reasonably requested by McCann in connection
therewith. In the event that the amount of Bad Inventory is more than
$645,000.00, the shareholders of Seller shall pay to the Surviving Corporation
the difference between the amount of Bad Inventory and $600,000 pursuant to the
provisions of SECTION 2.11(E) below. In the event that the amount of Bad
Inventory is less than $555,000.00, the Surviving Corporation shall pay to the
shareholders of Seller the difference between $600,000 and the amount of Bad
Inventory pursuant to the provisions of SECTION 2.11(E) below. "BAD INVENTORY"
means inventory included on the Reference Balance Sheet (including inventory
which has been written off or reserved against) which, as of April 1, 2000, has
not been used during the preceding 12 months or represents more than a 12- month
supply based on the sale or use thereof during the preceding 12 months.
(b) NET SALES. As of January 1, 2000, the Surviving Corporation
shall determine the Net Sales of the Surviving Corporation for the immediately
proceeding 3 month period. On or before March 31, 2000, the Surviving
Corporation shall provide to McCann (as the representative of Seller and the
shareholders of Seller) its determination of such Net Sales, together with all
supporting documentation reasonably requested by McCann to support such
determination. To the extent such Net Sales exceed $2,814,000, such excess shall
be multiplied by 32% and the resulting dollar amount paid to the shareholders of
Seller pursuant to the provisions of Section 2.11(E) below. To the extent such
Net Sales are less than $2,814,000, such amount shall be multiplied by 32% and
the resulting dollar amount paid to the Surviving Corporation pursuant to the
provisions of SECTION 2.11(E) below. "Net Sales" means Gross Sales less
allowance and returns.
(c) CUSTOMER ACCOUNTS RECEIVABLE. As of April 30, 2000, the
Surviving Corporation shall determine the customer charge-backs for the accounts
listed on SCHEDULE 2.11(C) for shipments prior to the Balance Sheet Date, and
provide to McCann (as the representative of Seller and the shareholders of
Seller) its determination of such customer charge-backs on or before May 31,
2000, together with all supporting documentation reasonably requested by McCann
to support such determination. To the extent the aggregate of such customer
charge-backs exceeds by more than 7.5% of the sum of $992,000 and the combined
reserve for returns and cooperative
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advertising allowances as of the Balance Sheet Date, such amount shall be paid
to the Surviving Corporation pursuant to the provisions of SECTION 2.11(E)
below, and to the extent such the aggregate of such customer charge-backs is
less by more than 7.5% of the sum of $992,000 and the combined reserve for
returns and cooperative advertising allowances as of the Balance Sheet Date, the
Surviving Corporation shall pay such amount to the shareholders of Seller
pursuant to the provisions of SECTION 2.11(E) below.
(d) DISPUTES. All objections to and all disputes relating to the
determination of Bad Inventory, Net Sales and customer charge-backs arising
under this SECTION 2.11 shall be resolved pursuant to, and all fees, costs and
expenses of each accountant used in connection with the resolution of each such
dispute shall be paid pursuant to, the procedures contained in SECTION 2.7(A)
hereof.
(e) PAYMENT OF AMOUNTS DUE. Any sums due to the shareholders of
Seller pursuant to this SECTION 2.11 shall be paid by the Surviving Corporation
pro rata to the shareholders in accordance with the percentages set forth on
SCHEDULE 2.6 in cash by wire transfer of immediately available funds to the
account designated on SCHEDULE 2.6 for the shareholder. Any sums due the
Surviving Corporation under this SECTION 2.11 shall be realized by the Tristar
Parties by offsetting payments due on the Offset Promissory Notes pro rata
against each Offset Promissory Note in accordance with the original stated
principal amount of the Offset Promissory Notes and any offset shall be spread
out in equal payments over the remaining payments due under such Offset
Promissory Notes.
(f) ACTIONS AND DETERMINATIONS BY MCCANN. All actions and
determinations by McCann under this SECTION 2.11 shall be final and binding on
the shareholders of Seller.
2.12 PROMISSORY NOTE TO GEORGE LUBY. As consideration for George Luby
executing the Inducement Agreement referenced in SECTION 10.9 hereof, the
Tristar Parties agree at Closing to issue to George Luby a promissory note in
the stated principal amount of $45,000.00 and substantially in the form of the
promissory note attached hereto as EXHIBIT 2.12.
3. CLOSING; CLOSING DATE. Subject to the terms and conditions herein
contained, the consummation of the transactions referenced above shall take
place (the "CLOSING") on November 10, 1999, at 10:00 a.m., local time, at the
offices of Tristar Parties Counsel, or at such other time, date and place as
Purchaser and Seller shall in writing designate. The date of the Closing is
referred to herein as the "CLOSING DATE".
4. REPRESENTATIONS AND WARRANTIES OF SELLER.
Seller represents and warrants to the Tristar Parties that the statements
contained in this ARTICLE 4 are correct and complete as of the date of this
Agreement and will be correct and complete as of the Closing Date with the same
effect as if made on and as of such date, except as set forth in
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the disclosure schedule delivered by Seller to the Tristar Parties on the date
hereof and initialed by Seller (the "DISCLOSURE SCHEDULE"). The Disclosure
Schedule will be arranged in paragraphs corresponding to the numbered paragraphs
contained in this ARTICLE 4, and any disclosure on any part of the Disclosure
Schedule shall be deemed a disclosure on all other parts of the Disclosure
Schedule provided the required disclosure is fully and accurately disclosed.
4.1 INCORPORATION. Seller is a corporation duly organized, validly
existing and in good standing under the laws of the State of Connecticut, and is
duly authorized, qualified and licensed under all applicable Governmental
Requirements to carry on its business in the places and in the manner as now
conducted and to own, operate and lease the Assets it now owns, operates or
leases. Seller is currently, and has been since Seller's original date of
incorporation, an S Corporation as that term is defined under Subchapter S of
the Code and the Regulations thereunder. Seller has no Subchapter C current or
accumulated earnings or profits. Seller has continuously met all the Subchapter
S requirements imposed by the Code and Regulations throughout its existence and
its S corporation status has not been revoked, suspended or otherwise
compromised. Seller is not qualified as a foreign corporation in any
jurisdiction, Seller is not required to qualify or otherwise be authorized to do
business as a foreign corporation in any jurisdiction in order to carry on any
of its businesses as now conducted or to own, lease or operate the Assets of
Seller, and there has not been any claim by any other jurisdiction to the effect
that Seller is required to qualify or otherwise be authorized to do business as
a foreign corporation therein in order to carry on any of its businesses as now
conducted or to own, lease or operate the Assets. Complete and correct copies of
the Articles of Incorporation of Seller and all amendments thereto, certified in
each case by the Secretary of State of the State of Connecticut, and of the
Bylaws of Seller and all amendments thereto, certified by the Secretary of
Seller, heretofore have been delivered to the Tristar Parties. The minute books
of Seller previously made available to the Tristar Parties are complete and
accurately reflect all action taken prior to the date of this Agreement by its
board of directors and shareholders, in their capacities as such. To the Best
Knowledge of Seller, neither Seller nor any shareholder of Seller has not taken
any action, or failed to take any action which action or failure will preclude
or prevent Seller's business from being conducted in substantially the same
manner in which Seller has heretofore conducted the same. Seller has no
Subsidiaries.
4.2 SHARE CAPITAL. Seller's authorized capital stock consists of 20,000
shares of Seller Stock, of which 16,795 shares are issued and outstanding. PART
4.2 of the Disclosure Schedule contains a list of all Persons owning of record
capital stock of Seller with an indication thereon of the class of capital stock
and the number of shares of each class owned by each such Person. All of the
outstanding shares of Seller Stock have been duly authorized and validly issued
and are fully paid and non-assessable. There are no outstanding options,
warrants, convertible securities, calls, rights, commitments, preemptive rights,
agreements, arrangements or understandings of any character obligating Seller
(a) to issue, deliver or sell, or cause to be issued, delivered or sold,
additional shares of capital stock of Seller or any securities or obligations
convertible into or exchangeable for such shares or (b) to grant, extend or
enter into any such option, warrant,
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convertible security, call, right, commitment, preemptive right, agreement,
arrangement or understanding described in clause (a) above.
4.3 FINANCIAL STATEMENTS. Seller has delivered to the Tristar Parties
copies of the following financial statements for Seller, all of which financial
statements are included in SCHEDULE 4.3 (collectively, the "FINANCIAL
STATEMENTS"):
(a) Unaudited Balance Sheet of Seller (the "REFERENCE BALANCE
SHEET") as of October 31, 1999 (the "BALANCE SHEET DATE") and Unaudited Income
Statement of Seller for the ten-month period ended on the Balance Sheet Date;
and
(b) Audited Balance Sheets, Income Statements and Statements of
Changes in Financial Position for each of Seller's three (3) most recent fiscal
years.
Notwithstanding the following, the aggregate net income of Seller for all of the
periods together represented by the Financial Statements is true and accurate in
all material respects. Except that certain accruals were made in Seller's 1997
fiscal year that should have made in Seller's 1996 fiscal year, certain accruals
were made in Seller's 1998 fiscal year that should have made in Seller's 1997
fiscal year and certain accruals were made in the first 9 months of Seller's
1999 fiscal year that should have made in Seller's 1998 fiscal year, all
financial statements supplied to the Tristar Parties by Seller which are
included in SCHEDULE 4.3, except as specifically set forth therein and herein,
are and will be true and accurate in all material respects, have been prepared
in accordance with generally accepted accounting principles applied on a
consistent basis throughout the periods indicated, and present fairly the
financial condition of Seller as of the dates and for the periods indicated
thereon. Any other financial statements or financial data relating to Seller
supplied to or otherwise obtained by the Tristar Parties may not be relied upon
by the Tristar Parties and Seller makes no representations or warranties
concerning the accuracy of any such statements or data. The Reference Balance
Sheet reflects, as of the Balance Sheet Date, all liabilities, debts and
obligations of any nature, kind or manner of Seller, whether direct, accrued,
absolute, contingent or otherwise, and whether due, or to become due, whether or
not such items are required to be reflected on such balance sheet under
generally accepted accounting principles consistently applied. Except as set
forth on the Reference Balance Sheet (including the notes thereto), Seller does
not have, and none of the Assets of Seller is subject to, any liabilities or
obligations (accrued, absolute, contingent or otherwise), except for liabilities
(i) incurred in the ordinary course of the Business or disclosed in the
Disclosure Schedule, or (ii) fully covered by Seller's insurance policies
(subject to deductibles and co-insurance requirements of said policies), none of
which have had a Material Adverse Effect.
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4.4 EVENTS SINCE THE BALANCE SHEET DATE. Since the Balance Sheet Date,
there has not been: (a) any change in the condition (financial or otherwise) or
in the properties, assets, liabilities, business or prospects of the Business,
except normal and usual changes in the ordinary course of business, none of
which has been materially adverse and all of which in the aggregate have not
been materially adverse; (b) any labor trouble, strike or any other occurrence,
event or condition affecting the employees of Seller that adversely affects the
condition (financial or otherwise) of the Assets of Seller or the Business; (c)
any material breach or default by Seller or, to the Best Knowledge of Seller, by
any other party, under any agreement or obligation included in the Assets of
Seller or by which any of the Assets of Seller are bound, except for (i)
violations of certain covenants in the People's Bank Loan Agreement, (ii)
violations of certain provisions of the Friedman Note, and (iii) failure to pay
when due certain commission obligations to Walsworth, all of which are fully and
accurately disclosed in PART 4.4 of the Disclosure Schedule; (d) any material
damage, destruction or loss (whether or not covered by insurance) adversely
affecting the Assets of Seller or the Business; (e) to the Best Knowledge of
Seller, any legislative or regulatory change adversely affecting the Assets of
Seller or the Business; (f) any material change in the types, nature,
composition or quality of the services or products of the Business, any material
adverse change in the contributions of any of the product lines of the Business
to the revenues or net income of such Business, or any material adverse change
in the sales, revenue or net income of the Business; (g) any material
transaction by Seller related to or affecting the Assets of Seller or the
Business other than transactions in the ordinary course of business of Seller;
(h) any other occurrence, event or condition that has materially adversely
affected (or can reasonably be expected to materially adversely affect) the
Assets of Seller or the Business; (i) any declaration, setting aside or payment
of any dividend (whether in cash, stock or property) with respect to any of
Seller's capital stock; (j) any granting by Seller to any executive officer of
Seller of any increase in compensation, any granting by Seller to any executive
officer of any increase in severance or termination pay, or any entry by Seller
into any employment, severance or termination agreement with any executive
officer; (k) any change in accounting methods, principles or practices by Seller
materially affecting its Assets, liabilities or business, except insofar as may
have been required or recommended by Seller's accountants, all of such changes
are fully and accurately disclosed in PART 4.4 of the Disclosure Schedule; (l)
any condition, event or occurrence through the date hereof which, individually
or in the aggregate, could reasonably be expected to prevent, hinder or delay in
any material respect the ability of Seller to consummate the transactions
contemplated by this Agreement; or (m) any agreement, in writing or otherwise,
by Seller or any corporate action by Seller with respect to the foregoing.
4.5 COMPETING INTERESTS. Seller does not, and to the Best Knowledge of
Seller, no director or officer of Seller, and no Associate (as hereinafter
defined) of Seller:
(a) owns, directly or indirectly, any equity interests in, or is a
director, officer or employee of, or consultant to, any entity which is a
competitor, supplier or customer of the Business, or, to the Best Knowledge of
Seller, a competitor, supplier or customer of Purchaser or Seller or an
Associate of Purchaser or Seller (except for ownership, if any, of less than one
percent of the
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outstanding capital stock of any corporation the capital stock of which is
traded on a nationally recognized securities exchange), or
(b) owns, directly or indirectly, in whole or in part, any property,
asset or right which is associated with the Assets of Seller or the Business or
which Seller is presently operating or using in connection with or the use of
which is necessary for or material to the operation of the Business.
For purposes of this Agreement, the term "ASSOCIATE" means:
(y) with respect to an individual:
(i) the spouse of the individual,
(ii) any trust in which the individual or any person described
in (i) above has a pecuniary interest or any trustee of such a trust, and
(iii) any business entity which is directly or indirectly
Controlled by any of the foregoing; and
(z) with respect to a Person other than a natural person, any Person
Controlling, Controlled by or under common Control with such Person, and any
director, officer, partner, trustee, administrator, beneficiary or executor of
such Person.
4.6 TAXES.
(a) All Tax Returns of or relating to any Taxes that are required to
be filed on or before the Effective Time, subject to any allowable extension
periods, for, by, on behalf of or with respect to Seller, including, but not
limited to, those relating to the income, business, operations or property of
Seller (whether on a separate, consolidated, affiliated, combined, unitary or
any other basis), have been timely filed with the appropriate foreign, federal,
state and local authorities, and all Taxes shown to be due and payable on such
Tax Returns or related to such Tax Returns have been paid in full on or before
the Effective Time, except Taxes which have not yet accrued or otherwise become
due, all of which are reflected on the Reference Balance Sheet.
(b) All such Tax Returns and the information and data contained
therein have been properly and accurately compiled and completed in all material
respects, fairly present the information purported to be shown therein, and
reflect all liabilities for Taxes for the periods covered by such Tax Returns,
net of any applicable reserves.
(c) None of such Tax Returns are under audit or examination by any
foreign, federal, state or local authority and there are no agreements, waivers
or other arrangements providing
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for an extension of time with respect to the assessment or collection of any Tax
or deficiency of any nature against Seller or with respect to any such Tax
Return, or any suits or other actions, proceedings, investigations or claims now
pending or, to the Best Knowledge of Seller, threatened against Seller with
respect to any Tax, or any matters under discussion with any foreign, federal,
state or local authority relating to any Tax, or any claims for any additional
Tax asserted by any such authority.
(d) All Taxes assessed and due and owing from or against Seller on
or before the Effective Time (including, but not limited to, ad valorem taxes
relating to any property of Seller) have been timely paid in full on or before
the Effective Time.
(e) All withholding Tax, Tax deposit and estimated Tax payment
requirements imposed on Seller for any and all periods ending on or before the
Effective Time, or through and including the Effective Time for periods that
have not ended on or before the Effective Time, have been timely satisfied in
full on or before the Effective Time or reserves adequate for the payment of
such withholding, deposit and estimated Taxes have been or will be established
in the financial statements of Seller on or before the Effective Time a copy of
which has been or will be provided to the Tristar Parties prior to Closing.
(f) The Financial Statements reflect and include adequate charges,
accruals, reserves and provisions for the payment in full of any and all Taxes
payable with respect to any and all periods ending on or before the respective
dates thereof.
4.7 EMPLOYEE MATTERS. SCHEDULE 4.7 sets forth a true and complete list of
the names of, and current annual compensation paid by Seller to each employee of
Seller utilized in connection with the operation of the Business. Seller is not
a party to or bound by any collective bargaining or other union agreements.
Seller has not, within the last five years, had or been threatened with any
union activities, work stoppages or other labor trouble with respect to its
employees. There are no disputes with employees in general to which Seller is a
party. There are no strikes, slowdowns or picketing against Seller (or, to the
Best Knowledge of Seller, against any material supplier of goods or services to
Seller) pending or, to the Best Knowledge of Seller, threatened. Seller has not
received notice from any union or employees setting forth demands for
representation, elections or for present or future changes in wages, terms of
employment or working conditions. Other than wage increases in the ordinary
course of business, since the Balance Sheet Date, Seller has not made any
commitment or agreement to increase the wages or modify the conditions or terms
of employment of any of the employees of Seller used in connection with the
Business.
4.8 CONTRACTS AND AGREEMENTS. (a) PART 4.8(A) of the Disclosure Schedule
sets forth a true and complete list of and briefly describes (including
termination date) all of the following contracts, agreements, leases, license
agreements, plans, arrangements or commitments, written or oral, that relate to
the Assets of Seller or the Business (including all amendments, supplements and
modifications thereto, whether written or oral); except those that are
terminable upon 30-days notice
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or less without penalty or any continuing obligations on the part of any party
thereto and that involve a sum of less than $5,000:
(i) any contract, agreement or commitment in respect of the sale of
products or services or the purchase of raw materials, supplies or other
products or utilities;
(ii) any offer, tender or the like outstanding and capable of being
converted into an obligation of Seller by the passage of time or by an
acceptance or other act of some other person or entity or both;
(iii) any sale, agency, distributorship agreement, franchise
agreement or legally enforceable commitment or obligation with respect thereto;
(iv) any collective bargaining agreement, union agreement,
employment agreement, consulting agreement, management service agreement,
agreement providing for the services of an independent contractor or any other
similar type of contract or agreement;
(v) any profit-sharing, pension, stock option, severance pay,
retirement, bonus, deferred compensation, group life and health insurance or
other employee benefit plan, agreement, arrangement or commitment of any nature
whatsoever, whether or not legally binding, or any agreement with any present or
former officer, director or shareholder of Seller;
(vi) any loan or credit agreement, indenture, guarantee (other than
endorsements made for collection), mortgage, pledge, conditional sale or other
title retention agreement, or any equipment financing obligation, lease and
lease-purchase agreement;
(vii) any lease related to the Assets of Seller or the Business, and
any other contract, agreement or legally enforceable commitment relating to or
affecting the Assets of Seller or the Business;
(viii)any performance bond, bid bond, surety bond or the like, any
contract or bid covered by such bond, or any letter of credit and guaranty;
(ix) any consent decree and other judgment, decree or order,
settlement agreement or agreement relating to competitive activities, requiring
or prohibiting any future action;
(x) any contract or agreement of any nature with any shareholder of
Seller, or any Associate of a shareholder of Seller or Affiliate of a
shareholder of Seller;
(xi) any contract, commitment or agreement entered into outside the
ordinary course of the operation of the Business;
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(xii) any agreement, indenture or other instrument which contains
restrictions with respect to the payment of dividends or any other distribution
in respect of its capital stock or the purchase, redemption or other acquisition
of capital stock;
(xiii)other than expenditures regularly made in the ordinary course
of business of Seller for items that are not property, plant or equipment, any
agreement, contract or commitment relating to any expenditure or a series of
related expenditures in excess of $10,000;
(xiv) any outstanding loan or advance by Seller to, or investment by
Seller in, any Person, or any agreement, contract, commitment or understanding
relating to the making of any such loan, advance or investment (excluding trade
receivables);
(xv) any contract, agreement, indenture, note or other instrument
relating to (A) the borrowing of money by Seller or the granting of any
Encumbrance or (B) any guarantee or other contingent liability (identifying the
primary contract or agreement to which such guarantee or contingent liability
relates or the agreement pursuant to which such guarantee was delivered) in
respect of any indebtedness, commitment, liability or obligation of any Person
(other than the endorsement of negotiable instruments for deposit or collection
in the ordinary course of business);
(xvi) any agreement, contract or commitment limiting the freedom of
Seller or any Affiliate of Seller to engage in any line of business, to own,
operate, sell, transfer, pledge or otherwise dispose of or encumber any Asset or
to compete with any Person or to engage in any business or activity in any
geographic area;
(xvii)any agreement, lease, contract or commitment or series of
related agreements, leases, contracts or commitments not entered into in the
ordinary course of business that is not cancelable under the terms of such
agreement, lease, contract or commitment without penalty to Seller within 30
days;
(xviiiany agreement, contract or commitment requiring (A) the
payment for goods or services whether or not such goods or services are actually
provided or (B) the furnishing of goods or services at a price less than
Seller's cost of producing such goods or providing such services;
(xix) any agreement or contract obligating Seller or that would
obligate or require any subsequent owner of the business currently conducted by
Seller or any of the Assets to provide for indemnification or contribution with
respect to any matter (other than customary indemnification provisions in leases
of property leased by Seller);
(xx) any license, royalty or similar agreement; or
(xxi) any agreement, contract or commitment that Seller expects to
have a Material Adverse Effect on Seller and/or Purchaser subsequent to Closing.
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PART 4.8(A) of the Disclosure Schedule sets forth with respect to each mortgage,
security agreement, letter of credit or guaranty, a cross-reference to the
principal agreement, instrument or document referred to in PART 4.8(A) of the
Disclosure Schedule pursuant to which such mortgage, security agreement, letter
of credit or guaranty was executed or to which such mortgage, security
agreement, letter of credit or guaranty relates.
(b) PART 4.8(B) of the Disclosure Schedule sets forth (i) the
aggregate outstanding principal amount as of October 31, 1999, with respect to
each loan, credit or other agreement, instrument or document listed in PART
4.8(A) of the Disclosure Schedule relating to the borrowing of money by Seller
and (ii) the amount of available borrowings as of October 31, 1999, with respect
to each such loan, credit or other agreement, instrument or document.
(c) All of such contracts, agreements, leases, licenses, plans,
arrangements, commitments and documents listed in PART 4.8(A) of the Disclosure
Schedule (collectively, the "CONTRACTS") are valid, binding and in full force
and effect in accordance with their terms and conditions, except as limited by
applicable bankruptcy, moratorium, insolvency or other similar laws affecting
generally the rights of creditors or by principles of equity, and there is no
existing default thereunder or material breach thereof by Seller, or, to the
Best Knowledge of Seller, by any other party to a Contract, or any conditions
which, with the passage of time or the giving of notice or both, might
constitute such a default by Seller, or, to the Best Knowledge of Seller, by any
other party to a Contract, and none of the Contracts will be breached in any
material respect by or give any other party a right of termination or any other
right solely as a result of the transactions contemplated by this Agreement.
There are no pending or, to the Best Knowledge of Seller, threatened disputes
with respect to the Contracts. Seller is not obligated to pay any liquidated
damages under any of the Contracts and to the Best Knowledge of Seller there are
no facts or circumstances that could reasonably be expected to result in an
obligation of Seller to pay any such liquidated damages. To the Best Knowledge
of Seller, based on the knowledge available to Seller on the date hereof, there
is no reason why any of the material Contracts (i) will result in a loss to the
Surviving Corporation on completion by performance or (ii) cannot readily be
fulfilled or performed by the Surviving Corporation on time without undue or
unusual expenditure of money or effort. Copies of all of the documents (or in
the case of oral commitments, descriptions of the material terms thereof)
relevant to the Contracts have been delivered by Seller to the Tristar Parties,
and such copies and/or descriptions are true, complete and accurate and include
all amendments, supplements or modifications thereto. All of the Contracts will
be fully vested in the Surviving Corporation as of the Effective Time of the
Merger, without the approval or consent of any Person, or, if such approval or
consent is required, it will be obtained by Seller and delivered to the Tristar
Parties at or prior to the Closing.
4.9 EFFECT OF AGREEMENT. Except with respect to the People's Bank Loan
Agreement (such exceptions being fully and accurately disclosed on the
Disclosure Schedule), the execution and delivery of this Agreement and the
consummation of the transactions contemplated hereby will not (a) violate any
provision of the Articles of Incorporation or other charter documents or bylaws
of
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Seller; (b) result in any violation of any Governmental Requirement applicable
to Seller, the Assets of Seller or the Business; (c) conflict with, or result in
any breach of, or default or loss of any right under (or an event or
circumstance that, with notice or the lapse of time, or both, would result in a
default), or the creation of an Encumbrance pursuant to, or cause or permit the
acceleration prior to maturity or "put" right with respect to, any material
obligation under, any contract, indenture, mortgage, deed of trust, lease, loan
agreement or other agreement or instrument to which Seller is a party or to
which any of the Assets of Seller are subject; (d) relieve any Person of any
obligation (whether contractual or otherwise) or enable any Person to accelerate
or terminate any such obligation or any right or benefit enjoyed by Seller or to
exercise any right under any agreement in respect of the Assets of Seller or the
Business; or (e) require notice to or the consent, authorization, approval,
clearance, waiver or order of any Person (except as may be contemplated by the
last sentence of SECTION 4.8(C)). To the Best Knowledge of Seller, the business
relationships between Seller and the clients, customers and suppliers of the
Business will not be adversely affected by the execution and delivery of this
Agreement or the consummation of the transactions contemplated hereby, except to
the extent such relationships may be affected by the prior relationships of such
clients, customers and suppliers with Tristar or its officers and directors. The
execution, delivery and performance of this Agreement by Seller will not result
in the loss of any material governmental license, franchise or permit possessed
by Seller.
4.10 PROPERTIES, ASSETS AND LEASEHOLD ESTATES.
(a) PART 4.10(A) of the Disclosure Schedule sets forth a complete
and accurate detailed description of each item of personal property, excluding
inventory, owned by Seller that had a book value as of the Balance Sheet Date
greater than $2,500. For purposes of this Section, "personal property" excludes
Intellectual Property. Seller has good title to all of its personal property
that is material to the Business, results of operations, financial condition or
the Assets of Seller (including, without limitation, those items of personal
property set forth on PART 4.10 of the Disclosure Schedule), free and clear of
all Encumbrances, except for Permitted Encumbrances.
(b) PART 4.10(B) of the Disclosure Schedule sets forth a complete
and accurate detailed description of each item of personal property leased by
Seller for which the annual rent payable under the applicable lease or contract
exceeds $5,000, and all such leases are free and clear of all Encumbrances.
Seller has not breached any material provision of and is not in default (and no
event or circumstance exists that with notice, or the lapse of time or both,
would constitute a default by Seller) under the terms of any lease or other
agreement pursuant to which such personal property is leased. To the Best
Knowledge of Seller, all of such leases or other agreements are in full force
and effect. There are no pending or, to the Best Knowledge of Seller, threatened
disputes with respect to any lease or other agreement pursuant to which such
personal property is leased and, to the Best Knowledge of Seller, the lessor
thereunder has not breached any material provision of and is not in default (and
no event or circumstance exists that with notice, or the lapse or time or both,
would constitute a default by the lessor) under the terms of any such lease or
other agreement.
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(c) Seller does not own any real property.
(d) PART 4.8(A) of the Disclosure Schedule sets forth is a complete
and accurate list of all leases of Seller with respect to real property leased
by Seller for which the annual rent payable under the applicable lease or
contract exceeds $5,000 with an indication thereon that the lease is a lease of
real property, and all such leases are free and clear of all Encumbrances,
except for Permitted Encumbrances.
(e) To the Best Knowledge of Seller, there is no (i) change
contemplated in any applicable law, statute, ordinance, rule, regulation, order
or determination of any Governmental Authority, (ii) applicable law, statute,
ordinance, rule, regulation, order or determination of any Governmental
Authority or any restrictive covenant or deed restriction affecting the real
property described in SECTION 4.10(C) and (D) hereof, including without
limitation any zoning ordinances, building codes, flood disaster laws, wetlands
regulations, health laws or Environmental Laws, (iii) judicial or administrative
action, (iv) action by adjacent landowners, (v) administrative action, (vi)
natural or artificial conditions on or about the real property identified in
SECTION 4.10(C) and (D) hereof or (vii) significant adverse fact or condition
relating to such real property or its use that would, in each case, prevent,
limit, impede or render materially more costly the ownership, operation or
maintenance of such real property compared to the cost as the date hereof.
4.11 INTELLECTUAL PROPERTY.
(a) PART 4.11(A) of the Disclosure Schedule sets forth a complete
list of all Intellectual Property, including but not limited to (i) all
trademarks, service marks and trade names owned or claimed by Seller, together
with all U.S., state and foreign registrations thereof and/or applications
therefor, (ii) all U.S and foreign copyright registrations owned or claimed by
Seller and/or applications therefor, and (iii) all material U.S. and foreign
patents and applications therefor on inventions, discoveries, improvements,
ideas or know-how owned or claimed by Seller.
(b) Seller has developed all Intellectual Property through its own
efforts for its own account and has good and clear title thereto, and there is
no contract obligation, license, Encumbrance, alleged infringement, dispute,
potential dispute, claim or other cloud of title concerning such Intellectual
Property whatsoever. The Intellectual Property neither infringes nor, to the
Best Knowledge of Seller, is being infringed by any third party proprietary
interest, including (without limitation) any third party patent, copyright,
trademark, or trade secret interest. The Intellectual Property is fully eligible
for protection under applicable law and has not been forfeited, abandoned,
lapsed or donated in any way into the public domain. To Seller's Best Knowledge,
all of Seller's trade secrets, including source codes, and system specifications
have been maintained in confidence and are not known to any third party, except
pursuant to contract or agreement disclosed as such in PART 4.8(A) of the
Disclosure Schedule. All personnel, including employees, agents, consultants,
and contractors, who have contributed to or participated in the conception and
development of the Intellectual Property either (1) have been a party to a
work-for-hire relationship
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with Seller that has accorded Seller full, effective, and exclusive original
ownership of all tangible and intangible property arising with respect to the
Intellectual Property or (2) have executed appropriate instruments of assignment
in favor of Seller as assignee that have conveyed to Seller full, effective, and
exclusive ownership of all tangible and intangible property thereby arising with
respect to the Intellectual Property. No agreements or arrangements are in
effect with respect to the development, nondisclosure, marketing, distribution,
licensing, or promotion of the Intellectual Property by any independent
contractor, salesperson, distributor, sublicensor, or other remarketer or sales
organization.
4.12 SUITS, ACTIONS AND CLAIMS. There are no suits, actions, claims,
inquiries or investigations by any Person, or any legal, administrative or
arbitration proceedings in which Seller is engaged or which are pending or, to
the Best Knowledge of Seller, threatened against or affecting Seller or any of
its properties, assets or business, or to which Seller is or might become a
party, or which question the validity or legality of the transactions
contemplated hereby. To Seller's Best Knowledge, no reasonable basis or
reasonable grounds for any such suit, action, claim, inquiry, investigation or
proceeding exists, and there is no outstanding order, writ, injunction or decree
of any Governmental Authority against or affecting Seller or any of its
properties, assets or business. Without limiting the foregoing, to the Best
Knowledge of Seller, there is no state of facts or the occurrence of any event
which reasonably could be the basis of any present or potential claim against
Seller.
4.13 LICENSES AND PERMITS; COMPLIANCE WITH GOVERNMENTAL REQUIREMENTS.
Seller has all federal, state, local and foreign governmental licenses and
permits necessary to the conduct or operations of the Business as currently
conducted, such licenses and permits are in full force and effect, no material
violations currently exist in respect of any thereof and no proceeding is
pending or, to the Best Knowledge of Seller, threatened to revoke or limit any
thereof. PART 4.13 of the Disclosure Schedule sets forth a true, complete and
accurate list of (a) all such governmental licenses and permits, (b) all
consents, orders, decrees and other compliance agreements under which Seller is
operating or bound, copies of all of which have been furnished to the Tristar
Parties, and (c) all material governmental licenses and permits applied for but
not yet received by Seller. Seller has not received and is not aware of any
reports of inspections under the United States Occupational Safety and Health
Act, or under any other applicable federal, state or local health and safety
laws and regulations relating to Seller, the Assets of Seller or the operation
of the Business. There are no safety, health, anti-competitive or discrimination
claims that have been made or are pending or, to the Best Knowledge of Seller,
that are threatened relating to the Business or employment practices of Seller.
Seller has at all times complied in all material respects with all Governmental
Requirements applicable to its business and all Governmental Requirements with
respect to the distribution and sale of products and services by it.
4.14 AUTHORIZATION. Seller has full legal right, power and authority to
enter into and deliver this Agreement, to consummate the transactions set forth
herein and to perform all the terms and conditions hereof to be performed by it.
The execution and delivery of this Agreement by Seller and
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the performance by Seller of the transactions contemplated herein have been duly
and validly authorized by all requisite corporate actions of Seller, and this
Agreement has been duly and validly executed and delivered by Seller and is the
legal, valid and binding obligation of Seller, enforceable against it in
accordance with its terms, except as limited by applicable bankruptcy,
moratorium, insolvency or other similar laws affecting generally the rights of
creditors or by principles of equity.
4.15 RECORDS. Except for the Financial Statements, the books, records and
minutes kept by Seller with respect to the Assets of Seller and the Business,
including, but not limited to, all customer files, service agreements,
correspondence, and historic revenue data of Seller, may be incomplete and
therefore inaccurate and may not be relied upon by the Tristar Parties except to
the extent otherwise set forth in this Agreement.
4.16 ENVIRONMENTAL PROTECTION LAWS.
(a) To the Best Knowledge of Seller, it has at all times operated in
compliance with all applicable limitations, restrictions, conditions, standards,
prohibitions, requirements and obligations of Environmental Laws and related
orders of any court or other Governmental Authority.
(b) There are no existing, pending or, to the Best Knowledge of
Seller, threatened actions, suits, claims, investigations, inquiries or
proceedings by or before any court or any other Governmental Authority directed
against Seller or its Assets or the Business, which pertain or relate to (i) any
remedial obligations under any applicable Environmental Law, (ii) violations of
any Environmental Law, (iii) personal injury or property damage claims relating
to the release of chemicals or Waste Materials or (iv) response, removal or
remedial costs under CERCLA or any similar state law.
(c) To Seller's Best Knowledge, all notices, permits, licenses or
similar authorizations required to be obtained or filed by Seller under all
applicable Environmental Laws in connection with its current and previous
operation or use of the Assets, any other assets or properties currently or
previously leased or owned by Seller or the current and previous conduct of its
business have been duly obtained or filed and are in full force and effect.
(d) Seller has not received notice that any permit, license or
similar authorization required under any Environmental Law is to be revoked or
suspended by any Governmental Authority.
(e) Seller does not own or operate any underground storage tanks.
(f) No portion of the Assets of Seller or any other assets or
properties currently or previously leased or owned by Seller is part of a
Superfund site under CERCLA or any similar ranking or listing under any similar
state law.
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(g) All Waste Materials generated by Seller have been transported,
stored, treated and disposed of by carriers, storage, treatment and disposal
facilities authorized and maintaining valid permits under all applicable
Environmental Laws.
(h) To the Best Knowledge of Seller, no Person has disposed or
released any Waste Materials on or under the Assets of Seller or any other asset
or property currently or previously leased or owned by Seller and Seller has not
disposed or released Waste Materials on or under the Assets of Seller or any
other asset or property currently or previously leased or owned by Seller,
except in compliance with all Environmental Laws.
(i) To the Best Knowledge of Seller, no facts or circumstances exist
which could reasonably be expected to result in any liability to any Person with
respect to the current or past business and operations of Seller, the Assets of
Seller or any other assets or properties currently or previously leased or owned
by Seller in connection with (a) any release, transportation or disposal of any
Waste Materials, hazardous substance or solid waste or (b) action taken or
omitted that was not in full compliance with or was in violation of, any
applicable Environmental Law.
4.17 ACCOUNTS RECEIVABLE. All notes and accounts receivable of Seller that
are reflected on the Reference Balance Sheet or that have arisen since the
Balance Sheet Date ("ACCOUNTS RECEIVABLE") have arisen in the ordinary course of
business. All Accounts Receivable either (a) have been collected or (b) to the
Best Knowledge of Seller, are collectible on the respective due dates thereof,
or, if no due date is stated with respect thereto, within 90 days of their
creation in the ordinary course of business, in each case in the aggregate
recorded amounts thereof, less the applicable reserves with respect thereto
reflected on the Reference Balance Sheet. Seller has not factored or discounted
or agreed to factor or discount any Account Receivable. The values at which the
Accounts Receivable are carried on the Reference Balance Sheet reflect the
accounts receivable valuation policy of Seller which is consistent with Seller's
past practice and in accordance with generally accepted accounting principles
consistently applied. PART 4.17 of the Disclosure Schedule sets forth a true,
correct and complete list of all Accounts Receivable written off by Seller, in
whole or in part, as uncollectible since October 1, 1997. PART 4.17 of the
Disclosure Schedule also sets forth a true, correct and complete aging of the
Accounts Receivable of Seller as of the most recent practicable date.
4.18 BROKERS AND FINDERS. No broker or finder has acted for Seller or any
shareholder of Seller in connection with this Agreement or the transactions
contemplated by this Agreement and no broker or finder is entitled to any
brokerage or finder's fee or to any commission in respect thereof based in any
way on agreements, arrangements or understandings made by or on behalf of
Seller. All fees and commissions related to any arrangement between Seller
and/or any shareholder and any broker or finder, shall be paid by the
shareholder of Seller incurring same or, in the case of a broker or finder
acting on behalf of Seller, by the shareholders of Seller in proportion to the
percentage of the Cash Consideration each is entitled to receive pursuant to
SCHEDULE 2.6.
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4.19 DEPOSITS. Seller does not now hold any deposits or prepayments by
third parties with respect to any of the Assets of Seller or the Business.
4.20 WORK ORDERS. There are no outstanding work orders or contracts
relating to any portion of the Assets of Seller from or required by any policy
of insurance, fire department, sanitation department, health authority or other
Governmental Authority nor is there any matter under discussion with any such
parties or authorities relating to work orders or contracts.
4.21 CUSTOMER LIST. PART 4.21 of the Disclosure Schedule sets forth a
true, correct and complete list of all customers of the Business to which Seller
has sold or provided products or services during the two years immediately
preceding the date hereof. The list provides an accurate statement of the gross
revenues received from each such customer by the Business during the
twelve-month period ended December 31, 1998 and the nine-month period ended
September 30, 1999. The list also indicates by special designation all customers
on the list with respect to which the Business has not sold or provided products
or services during the three-month period immediately preceding September 30,
1999.
4.22 SUPPLIER LIST. PART 4.22 of the Disclosure Schedule sets forth a
true, correct and complete list of all suppliers of the Business from which
Seller has purchased or otherwise received an aggregate of $10,000 or more worth
of products or services during either of the two years immediately preceding the
date hereof. The list provides an accurate statement of the gross payments to
each such supplier by the Business during the twelve-month period ended December
31, 1998 and the nine-month period ended September 30, 1999. The list also
indicates by special designation all suppliers on the list with respect to which
the Business has not purchased or otherwise received products or services during
the three-month period immediately preceding September 30, 1999.
4.23 NO ROYALTIES. No royalty or similar item or amount is being paid or
is owing by Seller, nor is any such item accruing, with respect to the
operation, ownership or use of the Business or the Assets of Seller.
4.24 BANK ACCOUNTS. PART 4.24 of the Disclosure Schedule sets forth a true
and complete list of all bank or financial accounts and safe deposit boxes of
Seller and of the credit and debit balances of such bank and financial accounts
as of the most recent practicable date. Since the date of the balances set forth
on such list, there have been no payments out of or drafts against any of the
accounts included therein other than routine payments and drafts in the ordinary
course of business. PART 4.24 of the Disclosure Schedule also lists all persons
having signatory authority over or access to such bank and financial accounts
and safe deposit boxes.
4.25 INSURANCE. PART 4.25 of the Disclosure Schedule sets forth all
existing insurance policies held by Seller relating to the Business, the Assets
of Seller or the employees or the agents of Seller. Each such policy is in full
force and effect and is with insurance carriers believed by Seller
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to be responsible. There is no dispute with respect to such policies, and all
claims arising from events or circumstances occurring prior to the date hereof
have been paid in full or adequate reserves therefor are recorded in the
Reference Balance Sheet. All retroactive premium adjustments for any period
ended on or before October 30, 1999, under any worker's compensation policy or
any other insurance policies of Seller have been recorded in accordance with
generally accepted accounting principles and are reflected in the Reference
Balance Sheet. None of the policies set forth on PART 4.25 of the Disclosure
Schedule will terminate as a result of the transactions contemplated by this
Agreement.
4.26 EMPLOYEE BENEFIT MATTERS. As used in this Section, the "Seller" shall
include Seller and any member of a controlled group or affiliated service group
as defined in Sections 414(b), (c), (m) and (o) of the Code of which Seller is a
member.
(a) LIST OF ALL BENEFIT PLANS AND COMPENSATION AGREEMENTS. PART 4.26
of the Disclosure Schedule sets forth a complete and accurate list of all
employee welfare benefit and employee pension benefit plans as defined in
Sections 3(1), 3(2) and 3(3) of ERISA and all other employee benefit agreements
or arrangements, including but not limited to deferred compensation plans,
incentive plans, bonus plans or arrangements, stock option plans, stock purchase
plans, golden parachute agreements, severance pay plans, dependent care plans,
cafeteria plans, employee assistance programs, scholarship programs, employment
contracts and other similar plans, agreements and arrangements that are
currently in effect or were maintained within three years of the date hereof, or
have been approved before this date but are not yet effective, for the benefit
of directors, officers, employees, or former employees (or their beneficiaries)
of Seller. Seller is not aware of any commitment, whether legally binding or
not, to create any new plan, agreement or arrangement of Seller or modify any
now existing. Seller has delivered to the Tristar Parties, as to each plan,
agreement or arrangement listed in PART 4.26 of the Disclosure Schedule, as
applicable, a complete and accurate copy of (i) each plan, agreement or
arrangement listed, (ii) the trust, group annuity contract or other document
which provides the funding for the plan, agreement or arrangement, (iii) the
three most recent annual Form 5500, 990 and 1041 reports, (iv) the most recent
actuarial report or valuation statement, (v) the most current summary plan
description, booklet, or other descriptive written materials, and each summary
of material modifications prepared after the last summary plan description, (vi)
the most recent IRS determination letter and all rulings or determinations
requested from the IRS subsequent to the date of that exemption letter and (vii)
all other correspondence from the IRS or the Department of Labor received which
relates to one or more of the plans, agreements or arrangements. There are no
pending, or to the Best Knowledge of Seller, threatened or anticipated claims
(other than routine claims for benefits) by, on behalf of or against any of the
plans disclosed on PART 4.26 of the Disclosure Schedule or their related trusts.
(b) REPRESENTATIONS PERTAINING TO ALL EMPLOYEE BENEFIT PLANS. Each
employee welfare benefit plan and every employee pension benefit plan as defined
in Sections 3(1), 3(2) and 3(3) of ERISA which has been or is sponsored by,
participated in by or contributed to by Seller: (i) is in compliance with the
Code and ERISA, including but not limited to, all reporting and
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disclosure requirements of Part 1 of Subtitle B of Title I of ERISA; (ii) has
had the appropriate Form 5500 filed, timely, for each year of its existence;
(iii) has not engaged in any transaction described in Sections 406 or 407 of
ERISA or Section 4975 of the Code unless exempt under Section 408 of ERISA or
Section 4975 of the Code, as applicable; (iv) has at all times complied with the
bonding requirements of Section 412 of ERISA; (v) has no issue pending (other
than the payment of benefits in the normal course) nor any issue resolved
adversely to Seller which may subject Seller to the payment of a penalty,
interest, tax or other amount and (vi) can be unilaterally terminated or amended
on no more than 90 days notice, and (vii) all contributions or other amounts
payable by Seller as of the Closing Date with respect to each employee welfare
benefit plan and each employee pension benefit plan, other than an employee
pension benefit plan which is subject to Section 412 of the Code, have either
been paid or accrued in the Reference Balance Sheet, a copy of which has been
furnished to the Tristar Parties. No notice has been received by Seller of an
increase or proposed increase in the cost of any employee welfare benefit or
employee pension benefit plan or other employee benefit agreement or arrangement
listed in PART 4.26 of the Disclosure Schedule.
(c) ADDITIONAL REPRESENTATIONS PERTAINING TO CERTAIN EMPLOYEE
WELFARE BENEFIT PLANS. All voluntary employee benefit associations have been
submitted to and approved as exempt from federal income tax under Section
501(c)(9) of the Code by the IRS or the applicable submission period will not
have ended prior to the Closing. No plan, arrangement or agreement with any one
or more employees will cause Seller to have liability for severance pay as a
result of the Merger. Seller does not provide employee benefits, including
without limitation, death, post-retirement medical or health coverage (whether
or not insured) or contribute to or maintain any employee benefit plan which
provides for benefit coverage following termination of employment, nor has it
made any representations, agreements, covenants or commitments to provide that
coverage, except (i) as is required by Section 4980B(f) of the Code or other
applicable statute, (ii) death benefits or retirement benefits under any
employee pension benefit plan as defined in Section 3(2) of ERISA, (iii)
benefits the full cost of which is borne by the current or former employee (or
his beneficiary), or (iv) deferred compensation benefits which have been accrued
as liabilities on the books of Seller and disclosed on the Financial Statements.
All group health plans maintained by Seller have been operated in compliance
with Section 4980B(f) of the Code.
(d) ADDITIONAL REPRESENTATIONS PERTAINING TO CERTAIN EMPLOYEE
PENSION BENEFIT PLANS. All employee pension benefit plans as defined in Section
3(2) of ERISA which are intended to qualify under Section 401(a) of the Code
have been submitted to and approved as qualifying under Section 401(a) of the
Code by the IRS or the applicable remedial amendment period will not have ended
prior to the Closing. No facts have occurred which if known by the IRS could
cause disqualification of those plans. All employee pension benefit plans to
which Section 412 of the Code is applicable have fully complied with the funding
requirements of that Section and there is no accumulated funding deficiency as
defined in Section 302(a)(2) of ERISA (whether or not waived) in any one or more
of those plans. Seller has paid all premiums (any interest, charges and
penalties for late payment, if any applicable) due the Pension Benefit Guaranty
Corporation (the "PBGC") with respect to each employee pension benefit plan for
which premiums are required. No
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facts are known by Seller which will materially increase those premiums within
three years of the Closing Date. No employee pension benefit plan maintained by
Seller has been terminated under circumstances which would result in liability
to the PBGC. There has been no "reportable event" (as defined in Section 4043(b)
of ERISA and the regulations under that Section) with respect to any employee
pension benefit plan subject to Title IV of ERISA. Seller has not ceased
operations at a facility so as to become subject to the provisions of Section
4062(e) of ERISA, withdrawn as a substantial employer so as to become subject to
the provisions of Section 4063 of ERISA or ceased making contributions on or
before the date of the Closing to any employee pension benefit plan subject to
Section 4064(a) of ERISA to which Seller made contributions at any time during
the six years prior to the date of Closing. Seller has not made a complete or
partial withdrawal from a multiemployer plan (as defined in Section 3(37) of
ERISA) so as to incur withdrawal liability as defined in Section 4201 of ERISA.
The aggregate withdrawal liability of Seller, computed as if a complete
withdrawal by Seller had occurred under each multiemployer pension plan as of
the date hereof, would not exceed $10,000.
(e) The transactions contemplated by this Agreement will not
accelerate the time of payment or vesting, or increase the amount, of
compensation due any director, officer or employee or former director, officer
or employee (including any beneficiary) from Seller.
4.27 WARRANTIES AND PRODUCT LIABILITY.
(a) Except for warranties implied by law, Seller has not given or
made any warranties in connection with the sale, use or rental of goods or
services, including, without limitation, warranties covering the customer's
consequential damages. To the Best Knowledge of Seller, there is no state of
facts or occurrence of any event forming the basis of any present claim against
Seller with respect to warranties relating to products produced, manufactured,
marketed, sold, transported or distributed by Seller or services performed or
allegedly offered by or on behalf of Seller that could reasonably be expected to
materially exceed the reserves therefor.
(b) To the Best Knowledge of Seller, there is no state of facts or
any event forming the basis of any present claim against Seller not fully
covered by insurance, for personal injury or property damage alleged to be
caused by products produced, manufactured, sold, transported or distributed by
Seller or services performed or allegedly offered by or on behalf of Seller,
except for deductibles and self-insurance retentions.
4.28 SECURITIES LAWS MATTERS.
(a) Seller recognizes and understands that the Promissory Notes, the
Stock Options and the Tristar Stock to be issued upon the exercise of the Stock
Options (the "SECURITIES") will not be registered under the Securities Act or
under the securities laws of any state (the Securities Act and such securities
laws collectively, "SECURITIES LAWS"). The securities are not being so
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registered in reliance upon exemptions from the Securities Act and the
securities laws which are predicated, in part, on the representations,
warranties and agreements of Seller contained herein.
(b) Seller represents and warrants that (i) Seller has business
knowledge and experience, such experience being based on actual participation
therein, (ii) Seller is capable of evaluating the merits and risks of an
investment in the Securities and the suitability thereof as an investment
therefor, (iii) the Securities to be acquired by Seller will be acquired solely
for investment and not with a view toward resale or redistribution in violation
of the Securities Laws, (iv) in connection with the transactions contemplated
hereby, no assurances have been made concerning the future results of the
Tristar or the Surviving Corporation or any Affiliate thereof or as to the value
of the Securities and (vi) Seller is an "accredited investor" within the meaning
of Regulation D promulgated by the SEC pursuant to the Securities Act and
regulations promulgated thereunder. Except as set forth in SECTION 5.5, Seller
understands that none of the Tristar Parties is under any obligation to file a
registration statement or to take any other action under the Securities Laws
with respect to any such securities.
(c) Seller has consulted with Seller's own counsel in regard to the
Securities Laws and is fully aware (i) of the circumstances under which Seller
is required to hold the Securities, (ii) of the limitations on the transfer or
disposition of the Securities, (iii) that the Securities must be held
indefinitely unless the transfer thereof is registered under the Securities Laws
or an exemption from registration is available and (iv) that no exemption from
registration is likely to become available for at least one year from the date
of acquisition of the Securities. Seller has been advised by Seller's counsel as
to the provisions of Rules 144 and 145 as promulgated by the SEC under the
Securities Act and has been advised of the applicable limitations thereof.
Seller acknowledges that the Tristar Parties are relying upon the truth and
accuracy of the representations and warranties in this SECTION 4.28 by Seller in
consummating the transactions contemplated by this Agreement without registering
the Securities under the Securities Laws.
(d) Seller has been furnished with (i) the definitive proxy
statement filed with the SEC in connection with the annual meeting of
stockholders of Tristar held on February 10, 1999 and (ii) copies of Tristar's
Registration Statement on Form S-8, Annual Report on Form 10-K for the year
ended August 29, 1998, Quarterly Reports on Form 10-Q for the quarters ended
November 28, 1998, February 27, 1999 and May 29, 1999, Form 10-Q/A for the
quarter ended May 29, 1999 and Form 8-K dated March 15, 1999, filed with the SEC
under the Exchange Act. Seller has been furnished with the complete financial
statements of Tristar for the fiscal years ended August 1996, 1997 and 1998, and
the three, six and nine months periods ended November 1998, February 1999 and
May 1999, respectively. Seller has been furnished with a summary description of
the terms of the Tristar Stock and the Tristar Parties have made available to
Seller the opportunity to ask questions and receive answers concerning the terms
and conditions of the transactions contemplated by this Agreement and to obtain
any additional information which they possess or could reasonably acquire for
the purpose of verifying the accuracy of information furnished to Seller as set
forth herein or for the purpose of considering the transactions contemplated
hereby. Tristar has offered to make
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available to Seller upon request at any time all exhibits filed by Tristar with
the SEC as part of any of the reports filed therewith.
(e) Seller agrees that the certificates representing the Tristar
Stock to be issued upon the exercise of the Stock Options will be imprinted with
the following legend, the terms of which are specifically agreed to:
THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), OR UNDER ANY
APPLICABLE STATE SECURITIES LAWS AND ARE "RESTRICTED SECURITIES" AS THAT
TERM IS DEFINED IN RULE 144 UNDER THE ACT. NEITHER THE SHARES NOR ANY
INTEREST THEREIN MAY BE OFFERED FOR SALE, SOLD, TRANSFERRED, PLEDGED OR
OTHERWISE DISPOSED OF EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION
STATEMENT UNDER THE ACT AND SUCH STATE SECURITIES LAWS OR AN EXEMPTION
FROM REGISTRATION UNDER SUCH ACT AND SUCH LAWS WHICH, IN THE OPINION OF
COUNSEL FOR THE HOLDER, WHICH COUNSEL AND OPINION ARE REASONABLY
SATISFACTORY TO THE COUNSEL FOR THIS CORPORATION, IS AVAILABLE.
Seller understands and agrees that appropriate stop transfer notations will be
placed in the records of Tristar and with its transfer agent in respect of the
Securities.
4.29 MONETARY OBLIGATIONS TO CERTAIN INDIVIDUALS. The aggregate amount of
(a) the Falkowski Obligations does not exceed $150,000, (b) the Luby Obligations
does not exceed $200,000, (c) the Catapano Obligations does not exceed $300,000,
(d) the Walsworth Obligations does not exceed $484,274, and (v) the Friedman
Obligations does not exceed $598,969.84.
4.30 NAMES USED IN BUSINESS. The operation of the Business as now
conducted by Seller does not require the use of or consist of any rights under
any trademarks, trade names, brand names, service marks or copyrights other than
"Fragrance Impressions Limited".
4.31 NO UNTRUE STATEMENTS. The statements, representations and warranties
of Seller set forth in this Agreement and the Disclosure Schedule and in all
other documents and information furnished to the Tristar Parties, or either of
them, and their representatives in connection herewith do not include any untrue
statement of a material fact or omit to state any material fact necessary to
make the statements, representations and warranties made not misleading. To the
Best Knowledge of Seller, there is no fact or matter that is not disclosed to
the Tristar Parties in this Agreement or the Disclosure Schedule that materially
and adversely affects or, so far as Seller can now reasonably foresee, could
materially and adversely affect the condition (financial or otherwise) of the
Business
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or any of the Assets taken as a whole of Seller, the Assets or business of the
Surviving Corporation, or the ability of Seller to perform their respective
obligations under this Agreement.
5. REPRESENTATIONS AND WARRANTIES OF THE TRISTAR PARTIES. The
Tristar Parties jointly and severally represent and warrant to Seller and for
the benefit of the shareholders of Seller as of the date hereof as follows:
5.1 PURCHASER INCORPORATION. Purchaser and Tristar are each a corporation
duly organized, validly existing and in good standing under the laws of the
State of Delaware.
5.2 AUTHORIZATION. The Tristar Parties have full legal right, power and
authority, corporate and otherwise, to enter into this Agreement and to
consummate the transactions set forth herein and to perform all the terms and
conditions hereof to be performed by them. The execution and delivery of this
Agreement and the performance by the Tristar Parties of the transactions
contemplated herein have been duly authorized by all requisite corporate action
of the Tristar Parties and is the legal, valid and binding obligation of each of
them, enforceable against each of them in accordance with its terms, except as
limited by applicable bankruptcy, moratorium, insolvency or similar laws
affecting generally the rights of creditors or by principles of equity.
5.3 BROKERS AND FINDERS. No broker or finder has acted for the Tristar
Parties in connection with this Agreement or the transactions contemplated by
this Agreement and no broker or finder is entitled to any brokerage or finder's
fee or to any commission in respect thereof based in any way on agreements,
arrangements or understandings made by or on behalf of the Tristar Parties.
5.4 SEC DOCUMENTS. Tristar has provided to Seller its Registration
Statement on Form S-8, Annual Report on Form 10-K for the year ended August 29,
1998, Quarterly Reports on Form 10-Q for the quarters ended November 28, 1998,
February 27, 1999 and May 29, 1999, and its proxy statement with respect to the
Annual Meeting of Stockholders held on February 10, 1999, Form 10-Q/A for the
quarter ended May 29, 1999 and Form 8-K dated March 15, 1999 (such documents
collectively referred to herein as the "SEC DOCUMENTS"). As of their respective
dates, the SEC Documents complied in all material respects with the requirements
of the Exchange Act and the rules and regulations of the SEC promulgated
thereunder applicable to such SEC Documents, and none of the SEC Documents
contained any untrue statement of a material fact or omitted to state a material
fact required to be stated therein or necessary in order to make the statements
therein, in light of the circumstances under which they were made, not
misleading. No event has occurred since the filing of the SEC Documents not
disclosed in the SEC Documents that, to the Best Knowledge of the Tristar
Parties, could reasonably have a Material Adverse Effect on Tristar. The
consolidated financial statements of Tristar included in the SEC Documents
comply as to form in all material respects with applicable accounting
requirements and the published rules and regulations of the SEC with respect
thereto, have been prepared in accordance with generally accepted accounting
principles applied on a consistent basis during the periods involved (except as
may be indicated in the notes
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thereto) and fairly present the consolidated financial position of Tristar and
its consolidated Subsidiaries as of the dates thereof and the consolidated
results of their operations and cash flows for the periods then ended (except in
the case of interim period financial information, for normal year-end
adjustments).
5.5 RULE 144 REPORTING. From the date hereof until the seventh anniversary
of the Closing Date, Tristar (a) will make and keep public information
available, as those terms are understood and defined in Rule 144 under the
Securities Act, at all times while Tristar is subject to the reporting
requirements of the Securities Act or the Exchange Act; (b) will file with the
SEC in a timely manner all reports and other documents required of Tristar under
the Securities Act and the Exchange Act (at any time while it is subject to such
reporting requirements); and (c) will furnish to any shareholder of Seller
holding Tristar Stock resulting from the exercise of a Stock Option upon request
a written statement by Tristar as to its compliance with the reporting
requirements of Rule 144, and of the Securities Act and the Exchange Act (at any
time while it is subject to such reporting requirements), a copy of the most
recent annual or quarterly report of Tristar, and such other reports and
documents of Tristar and other information in the possession of or reasonably
obtainable by Tristar as such shareholder may reasonably request in availing
itself of any rule or regulation of the SEC allowing such shareholder to sell
any such securities without registration.
6. NATURE OF STATEMENTS AND SURVIVAL OF GUARANTEES,
REPRESENTATIONS AND WARRANTIES OF SELLER AND THE TRISTAR PARTIES. All
statements of fact contained in this Agreement or in any written statement
(including financial statements), certificate, schedule (including the
Disclosure Schedule) or other document delivered by or on behalf of Seller or
the Tristar Parties pursuant to this Agreement or in connection with the
transactions contemplated hereby shall be deemed representations and warranties
of Seller or the Tristar Parties hereunder, as applicable. All representations
and warranties made by the Tristar Parties hereunder or pursuant hereto or in
connection with the transactions contemplated hereby shall survive the Effective
Time regardless of any investigation at any time made by or on behalf of Seller;
provided that any claim for breach of any of the representations or warranties
made by the Tristar Parties must be brought within one year of the date hereof
or such claim shall be deemed to be waived. All representations and warranties
made by Seller hereunder or pursuant hereto or in connection with the
transactions contemplated hereby shall survive the Effective Time regardless of
any investigation at any time by or on behalf of the Tristar Parties; provided
that any claim for breach of any of the representations or warranties made by
Seller (other than the representations and warranties contained in SECTIONS 4.6,
4.27 and 4.28) must be brought within one year of the Effective Time or such
claim shall be deemed to be waived. Any claim for breach of the representations
and warranties made by Seller in SECTION 4.6 must be brought within one year
after the date of the filing of the Surviving Corporation's Federal Tax Return
for the first fiscal year following the Closing Date, and the representations
and warranties of Seller in SECTIONS 4.27 and 4.28 shall survive the Closing
indefinitely. The covenants and agreements made by Seller and the Tristar
Parties hereunder or pursuant hereto or in connection with the transactions
contemplated hereby shall continue until
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all obligations with respect thereto shall have been performed or satisfied or
shall have been terminated in accordance with their terms.
7. TAX TREATMENT. The parties hereto shall treat and report for federal
income tax purposes the Merger as a taxable acquisition of assets of the Seller
by Purchaser, followed immediately by the liquidation and dissolution of the
Seller. Any taxable gain resulting from the foregoing sale of assets by the
Purchaser shall be reported by Seller on its final Form 1120S Tax Return and
shall not be a liability assumed by the Surviving Corporation.
8. COVENANTS OF SELLER PRIOR TO CLOSING. Seller hereby covenants and
agrees:
8.1 GENERAL AFFIRMATIVE COVENANTS. From the date hereof to the Closing,
Seller agrees, unless Purchaser otherwise consents in writing, which consent
shall not be unreasonably withheld, Seller shall do and comply with each of the
following:
(a) use its best efforts to cause all of its representations and
warranties set forth in this Agreement to be true on and as of the Closing;
(b) use its best efforts to cause all of its obligations that are to be
fulfilled on or prior to the Closing to be so fulfilled;
(c) use its best efforts to cause all conditions to the Closing to be
satisfied by Seller set forth in this Agreement to be satisfied on or prior to
the Closing;
(d) deliver to the Tristar Parties at the Closing the documents required
of Seller under this Agreement;
(e) conduct the Business only in the usual and ordinary course;
(f) maintain the Assets of Seller in good working order and condition,
ordinary wear and tear excepted;
(g) perform all of its obligations under agreements relating to or
affecting the Assets of Seller or the Business;
(h) keep in full force and effect adequate insurance coverage on the
Assets of Seller and the Business;
(i) use its best efforts to maintain and preserve the Business and retain
its present employees, customers, suppliers and others having business relations
with it, subject to actions taken by Seller in the best interest of the
Business;
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(j) duly and timely file all reports or returns required to be filed with
any Governmental Authority, and timely pay all Taxes levied or assessed upon the
Assets of Seller or the Business or upon any part thereof;
(k) duly observe and conform to all material Governmental Requirements
relating to the Assets of Seller or to the operation and conduct of the Business
and all covenants, terms and conditions upon or under which any of the Assets of
Seller are held;
(l) remove and have released, by payment or otherwise, all Encumbrances of
any nature whatsoever on the Assets of Seller, other than Permitted
Encumbrances;
(m) duly and timely take all actions necessary to carry out the
transactions contemplated hereby;
(n) preserve and maintain the goodwill of the Business;
(o) deliver to the Tristar Parties on or before the 15th day of each month
true and correct unaudited monthly balance sheets and statements of income for
the Business for the immediately preceding month, commencing with the month
following the financial statement previously delivered by Seller to the Tristar
Parties, with such financial statements for the month of October 1999, to be
delivered at the time of execution of this Agreement; and
(p) deliver to the Tristar Parties on or before the Closing Date any
additional financial information reasonably requested by the Tristar Parties to
allow the Tristar Parties to timely comply with their reporting requirements
under the Exchange Act, all in form and substance sufficient to allow the
Tristar Parties to timely comply with such reporting requirements.
8.2 GENERAL NEGATIVE COVENANTS. From the date hereof to the Closing,
Seller agrees, unless Purchaser otherwise consents in writing, which consent
shall not be unreasonably withheld, Seller shall not do any or permit any of the
following:
(a) enter into, amend or assume any mortgage, pledge, conditional sale or
other title retention agreement, lien, encumbrance or charge of any kind upon
any of the Assets of Seller, or sell, lease, assign, exchange, abandon or
otherwise dispose of any of the Assets of Seller, including, but not limited to,
real property, machinery, equipment or other operating properties, except
inventory in the ordinary course of business;
(b) engage in any activity or transaction that could reasonably be
expected to have a Material Adverse Affect on the Assets of Seller or the
Business;
(c) permit any Encumbrance to attach upon the Assets of Seller, except
Permitted Encumbrances;
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(d) make any material organizational or personnel change, including
entering into any employment agreement, modifying any existing employment
agreement or increasing the compensation of any officer, director, employee,
agent or consultant of the Business;
(e) grant any increase in rates of pay or benefits to any employee,
officer, director, consultant or agent of the Business;
(f) take any actions which would cause any of Seller's representations and
warranties set forth in this Agreement to be false as of the Closing; or
(g) enter into or assume (whether or not in the ordinary course of
business) any contract, agreement, obligation, lease, license or commitment
related to the Business or the Assets of Seller (or of a type included in the
Assets of Seller) that can be expected to (i) have a term of more than three
months or (ii) generate gross expenses or gross revenues in excess of $25,000
per year.
8.3 ACCESS TO INFORMATION AND INSPECTION OF PROPERTIES. Seller shall
afford to the officers and authorized representatives of the Tristar Parties
access to the premises, facilities and tangible Assets of Seller for the purpose
of inspecting such Assets in such a manner as the Tristar Parties shall
reasonably deem appropriate. Seller shall also afford to the officers and
authorized representatives of the Tristar Parties access to the plants,
properties, documents, books and records of Seller related to the Assets of
Seller and the Business and shall furnish the Tristar Parties with such
financial and operating data and other information regarding the Assets of
Seller and the Business as the Tristar Parties may from time to time reasonably
request. At the request of Seller, the officers and representatives of the
Tristar Parties shall be accompanied at all times during such access by a
representative of Seller reasonably acceptable to the Tristar Parties and all
information acquired pursuant to such inspection shall be subject to the
Confidentiality Agreement dated September 15, 1999, between Tristar and Seller.
8.4 PUBLICITY. From the date hereof to the Closing, without the prior
written consent of Purchaser, Seller shall not make or permit any disclosure
with respect to the transactions contemplated hereby, including, without
limitation, issuing any press release, making any other public announcement or
making any announcement to the employees, customers or suppliers of the
Business, unless required by law or judicial compulsion. If any disclosure of
the transactions contemplated hereby is required by law or judicial compulsion,
Seller and the Tristar Parties shall jointly formulate the contents of such
disclosure. Each party agrees to act reasonably and cooperate with the other
party in formulating such disclosure so that each party may timely comply with
such disclosure requirements.
8.5 GOVERNMENT FILINGS. Seller shall cooperate with the Tristar Parties
and their representatives in the preparation of any documents or other material
that may be required by any Governmental Authority in connection with the
transactions contemplated hereby.
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8.6 CONSENT OF OTHERS. As soon as reasonably practicable after the date
hereof, and in any event prior to the Closing, Seller shall use its reasonable
commercial efforts to obtain the consents required to be obtained by it
hereunder of all necessary Persons (including Governmental Authorities having
jurisdiction over this transaction) to the consummation of the transactions
contemplated hereunder.
8.7 NO TRANSFER OF ASSETS. From and after the date hereof until the
Closing or termination of this Agreement, Seller shall not, without the prior
written consent of Purchaser: (a) offer for sale or other disposition (whether
by lease, merger or otherwise) all or a portion of the Assets of Seller (other
than inventory in the ordinary course of business), (b) solicit offers or
consider unsolicited offers to acquire (whether by lease, merger or otherwise)
the Assets of Seller (or any portion thereof, other than inventory in the
ordinary course of business), (c) hold discussions with, or furnish any
information to, any Person (other than the Tristar Parties) looking toward such
an offer, or (d) enter into any agreement (including, but not limited to, any
confidentiality or similar agreement, letter of intent, memorandum or letter of
understanding or definitive agreement) with any Person (other than the Tristar
Parties) with respect to the sale or other disposition (whether by lease, merger
or otherwise) of the Assets of Seller (or any portion thereof).
8.8 NOTICE OF DEVELOPMENTS. From the date hereof until the Closing, (a)
Seller shall immediately notify the Tristar Parties in writing of any material
problems or developments with respect to the prospects, business or operations
of the Business or the condition of the Assets of Seller, and (b) Seller shall,
promptly upon becoming aware thereof, give detailed written notice to the
Tristar Parties of the occurrence of, or the threatened occurrence of, any event
which would cause or constitute a material breach, or would have caused or
constituted a material breach, had such event occurred or been known to Seller
prior to the date hereof, of any of its covenants, agreements, representations
or warranties contained or referred to in this Agreement; provided, however,
that no such notice shall be deemed to cure or waive any breach unless Purchaser
specifically agrees thereto in writing.
9. COVENANTS OF THE TRISTAR PARTIES PRIOR TO CLOSING. The Tristar Parties
hereby covenant and agree:
9.1 GENERAL AFFIRMATIVE COVENANTS. From the date hereof to the Closing,
the Tristar Parties agree, unless Seller otherwise consents in writing, the
Tristar Parties shall do or comply with each of the following:
(a) use their best efforts to cause all of their representations and
warranties set forth in this Agreement to be true on and as of the Closing;
(b) use their best efforts to cause all of their obligations that are to
be fulfilled on or prior to the Closing to be so fulfilled;
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(c) use their best efforts to cause all conditions to the Closing set
forth in this Agreement to be satisfied on or prior to the Closing; and
(d) deliver to Seller at the Closing the documents required of the Tristar
Parties under this Agreement.
9.2 PUBLICITY. From the date hereof to the Closing, without the prior
written consent of Seller, the Tristar Parties shall not make or permit any
disclosure with respect to the transactions contemplated hereby, including,
without limitation, issuing any press release, making any other public
announcement or making any announcement to the employees, customers or suppliers
of the Business, unless required by law or judicial compulsion. If any
disclosure of the transactions contemplated hereby is required by law or
judicial compulsion, the Tristar Parties and Seller shall jointly formulate the
contents of such disclosure. Each party agrees to act reasonably and cooperate
with the other party in formulating such disclosure so that each party may
timely comply with such disclosure requirements.
9.3 GOVERNMENT FILINGS. The Tristar Parties shall cooperate with Seller
and its representatives in the preparation of any documents or other material
that may be required by any Governmental Authority in connection with the
transactions contemplated hereby.
9.4 CONSENT OF OTHERS. As soon as reasonably practicable after the date
hereof, and in any event prior to the Closing, the Tristar Parties shall use
their reasonable commercial efforts to obtain the consents required to be
obtained by the Tristar Parties hereunder of all necessary Persons (including
Governmental Authorities having jurisdiction over this transaction) to the
consummation of the transactions contemplated hereunder.
9.5 NOTICE OF DEVELOPMENTS. From the date hereof until the Closing, the
Tristar Parties shall, promptly upon becoming aware thereof, give detailed
written notice to Seller of the occurrence of, or the threatened occurrence of,
any event which would cause or constitute a material breach, or would have
caused or constituted a material breach, had such event occurred or been known
to the Tristar Parties prior to the date hereof, of any of its covenants,
agreements, representations or warranties contained or referred to in this
Agreement; provided, however, that no such notice shall be deemed to cure or
waive any breach unless Seller specifically agrees thereto in writing.
10. CONDITIONS PRECEDENT TO OBLIGATIONS OF THE TRISTAR PARTIES.
The obligations of the Tristar Parties under this Agreement are, except as may
be waived in writing by Tristar, subject to the fulfillment by Seller of each of
the following additional conditions on or prior to the Closing:
10.1 OPINION OF COUNSEL FOR SELLER. The Tristar Parties shall have
received an opinion from Sweeney Lev & Blinkoff LLP, counsel to Seller, dated
the Closing Date, in form and substance reasonably satisfactory to the Tristar
Parties, covering the matters set forth in SCHEDULE 10.1.
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10.2 RESOLUTIONS. The Tristar Parties shall have received a certified copy
of resolutions duly adopted by the Board of Directors and a unanimous written
consent of the shareholders of Seller authorizing and approving the execution
and delivery of this Agreement and performance by Seller of its obligations
hereunder.
10.3 ACCURACY OF REPRESENTATIONS AND WARRANTIES AND FULFILLMENT OF
COVENANTS. Each of the representations and warranties of Seller set forth in
this Agreement and in the Schedules attached hereto shall be true and correct in
all material respects as of the date of this Agreement and as of the Closing
with the same force and effect as though such representations and warranties had
been made as of the Closing. Each and all of the agreements and covenants of
Seller to be performed on or before the Closing Date pursuant to the terms
hereof shall have been performed in all material respects. Seller shall have
delivered to the Tristar Parties a certificate dated the Closing Date and
executed by Seller to all such effects or disclosing any such representation or
warranty not so true and correct or any such agreement or covenant not so
performed.
10.4 MERGER DOCUMENTS. Seller shall executed and delivered the Merger
Documents to the Tristar Parties.
10.5 EMPLOYMENT ARRANGEMENTS. McCann shall have entered into an employment
agreement with Purchaser in substantially the form of the employment agreement
attached hereto as EXHIBIT 10.5(A), Falkowski shall have entered into an
employment agreement with Purchaser in substantially the form of the employment
agreement attached hereto as EXHIBIT 10.5(B), Catapano shall have entered into
an employment agreement with Purchaser in substantially the form of the
employment agreement attached hereto as EXHIBIT 10.5(C), and Luby shall entered
into an employment agreement with Purchaser in substantially the form of the
employment agreement attached hereto as EXHIBIT 10.5(D), (such employment
agreements collectively, the "COMPENSATION AGREEMENTS").
10.6 NO GOVERNMENTAL ACTIONS. No action or proceeding before any
Governmental Authority shall have been instituted or threatened to restrain or
prohibit the transactions contemplated by this Agreement. No Governmental
Authority shall have taken any other action as a result of which the management
of Purchaser reasonably deems it inadvisable to proceed with the transactions
contemplated by this Agreement.
10.7 NO ADVERSE CHANGE. No material adverse change in the Business shall
have occurred, and no loss or damage to any of the Assets of Seller which could
reasonably have a Material Adverse Effect, whether or not covered by insurance,
shall have occurred since the Balance Sheet Date, and Seller shall have
delivered to Purchaser a certificate dated the Closing Date and executed on
behalf of Seller by McCann to all such effects.
10.8 NOTICES AND CONSENTS. No notice to or consent, authorization,
approval or order of any Person shall be required for the consummation of the
transactions contemplated by this
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Agreement (except for notices that have been duly and timely given and consents,
authorizations and approvals that have been obtained). True and correct copies
of all required notices, consents, authorizations and approvals shall have been
delivered to Purchaser and shall be satisfactory in form and substance to
Purchaser and its counsel.
10.9 INDUCEMENT AGREEMENTS. Luby and McCann shall have executed an
agreement substantially in the form of the Inducement Agreement attached hereto
as EXHIBIT 10.9(A), and Walsworth shall have executed an agreement substantially
in the form of the Inducement Agreement attached hereto as EXHIBIT 10.9(B)
(collectively, the "INDUCEMENT AGREEMENTS").
10.10 TERMINATION OF CONTRACTS. The contracts, agreements and other
instruments listed on SCHEDULE 10.10 shall have been duly and validly terminated
without any liability on the part of Seller, and Seller shall have delivered to
the Tristar Parties at Closing a certificate dated the Closing Date to such
effect.
10.11 RELEASES. Each of Falkowski, Luby and Catapano shall have executed
and delivered to Purchaser a Release in substantially the form of the Release
attached hereto as EXHIBIT 10.11(A), Walsworth shall have executed and delivered
to Purchaser a Release in substantially the form of the Release attached hereto
as EXHIBIT 10.11(B) (the "WALSWORTH RELEASE"), Friedman shall have executed and
delivered to Purchaser a Release in substantially the form of the Release
attached hereto as EXHIBIT 10.11(C) (the "FRIEDMAN RELEASE"), Davis shall have
executed and delivered to Purchaser a Release in substantially the form of the
Release attached hereto as EXHIBIT 10.11(D) (the "DAVIS RELEASE"), People's Bank
shall have executed and delivered to Purchaser a Release in substantially the
form of the Release attached hereto as EXHIBIT 10.11(E) (the "PEOPLE'S BANK
RELEASE").
10.12 BRIDGEPORT FACILITY. Seller shall have executed and delivered to
Purchaser an amendment to the existing lease agreement relating to Seller's
Bridgeport, Connecticut facility in substantially the form of the First
Amendment to Lease attached hereto as EXHIBIT 10.12 (the "BRIDGEPORT LEASE
AMENDMENT").
10.13 INVESTOR QUESTIONNAIRE. Each shareholder of Seller shall have
executed and delivered to the Tristar Parties an Investor Questionnaire or shall
have caused such shareholder's purchaser representative to have executed and
delivered to the Tristar Parties a Purchaser Representative Questionnaire, each
in form and substance acceptable to the Tristar Parties and the information
contained therein shall be satisfactory to the Tristar Parties that the issuance
of the Stock Options and the Promissory Notes will not violate any Securities
Laws.
10.14 OTHER DOCUMENTS. Seller shall have delivered or caused to be
delivered all other documents, agreements, resolutions, certificates or
declarations as the Tristar Parties or their attorneys may reasonably request.
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10.15 WALSWORTH AGREEMENT. Walsworth shall have entered into an agreement
with the Surviving Corporation, on terms and conditions acceptable to the
Surviving Corporation, relating to his contractual commitments to Seller.
10.16 OUTSTANDING PROMISSORY NOTE. The Tristar Parties shall have received
the original of the Friedman Note, the Davis Note and the People's Bank Notes
each marked "Cancelled".
11. CONDITIONS PRECEDENT TO OBLIGATIONS OF SELLER. The obligations
of Seller under this Agreement are, except as may be waived in writing by
Seller, subject to the fulfillment by the Tristar Parties of each of the
following additional conditions on or prior to the Closing:
11.1 OPINION OF COUNSEL. Seller will have received an opinion from
Fulbright & Jaworski L.L.P., counsel to the Tristar Parties, dated the Closing
Date, in form and substance reasonably satisfactory to Seller, covering the
matters set forth in SCHEDULE 11.1 and such other matters as Seller shall
reasonably request.
11.2 RESOLUTIONS. Seller shall have received a certified copy of
resolutions duly adopted by the Board of Directors of each of the Tristar
Parties and the shareholders of Purchaser authorizing and approving the
execution and delivery of this Agreement and performance by the Tristar Parties
of their obligations hereunder.
11.3 ACCURACY OF REPRESENTATIONS AND WARRANTIES AND FULFILLMENT OF
COVENANTS. Each of the representations and warranties of the Tristar Parties set
forth in this Agreement and in the Schedules attached hereto shall be true and
correct in all material respects as of the date of this Agreement and as of the
Closing with the same force and effect as though such representations and
warranties had been made as of the Closing. Each and all of the agreements and
covenants of the Tristar Parties to be performed on or before the Closing Date
pursuant to the terms hereof shall have been performed in all material respects.
The Tristar Parties shall have delivered to McCann and George Luby a certificate
dated the Closing Date and executed by the Tristar Parties to all such effects
or disclosing any such representation or warranty not so true and correct or any
such agreement or covenant not so performed.
11.4 MERGER DOCUMENTS. Purchaser shall executed and delivered the Merger
Documents to Seller.
11.5 CASH CONSIDERATION, PROMISSORY NOTES AND MONETARY OBLIGATIONS.
Tristar or Purchaser, as applicable, shall have paid the Cash Consideration and
issued the Promissory Notes and Stock Options as contemplated by SECTION 2.6 and
paid the monetary obligations, issued the promissory notes and issued the stock
option agreements as contemplated by SECTIONS 2.9 and 2.12.
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11.6 COMPENSATION AGREEMENTS. Purchaser shall have entered into the
Compensation Agreements.
11.7 BRIDGEPORT LEASE AMENDMENT. Purchaser shall have executed and
delivered to Seller the Bridgeport Lease Amendment.
11.8 PEOPLE'S BANK DEBT. Purchaser shall have paid all indebtedness of
Seller to People's Bank, and People's Bank shall have executed and delivered the
People's Bank Release.
11.9 WALSWORTH OPTION. Tristar shall have issued to Walsworth an option
pursuant to which Walsworth may purchase 20,000 shares of Tristar Stock at an
exercise price equal to $5.82.
11.10 OTHER DOCUMENTS. The Tristar Parties shall have delivered or caused
to be delivered all other documents, agreements, resolutions, certificates or
declarations as Seller or its attorneys may reasonably request.
12. SPECIAL CLOSING AND POST-CLOSING COVENANTS.
12.1 TERMINATION OF AGREEMENTS. Seller shall take all necessary efforts to
ensure that the Agreements listed on SCHEDULE 10.10 are terminated prior to
Closing.
12.2 FURTHER ASSURANCES. If at any time after the Effective Time the
Surviving Corporation shall consider or be advised that any further assignments
or assurances in law or otherwise are necessary or desirable to vest, perfect or
confirm, of record or otherwise, in the Surviving Corporation, all rights, title
and interests in all the Assets and all privileges, powers and franchises of
Seller and Purchaser, the Surviving Corporation and its proper officers and
directors, in the name and on behalf of Seller and Purchaser, shall execute and
deliver all such proper deeds, assignments and assurances in law and do all
things necessary and proper to vest, perfect or confirm title to such property
or rights in the Surviving Corporation and otherwise to carry out the purpose of
this Agreement, and the proper officers and directors of the Surviving
Corporation are fully authorized in the name of Seller or otherwise to take any
and all such action. Seller hereby designates the Surviving Corporation and its
officers as Seller's true and lawful attorney-in-fact, with full power of
substitution, to execute and deliver for the benefit of the Surviving
Corporation any and all such proper deeds, assignments and assurances in law and
to do all things necessary and proper to vest, perfect or confirm title to such
property or rights in the Surviving Corporation and otherwise to carry out the
purpose of this Agreement. Seller hereby acknowledges and agrees that the power
of attorney set forth in the preceding sentence is coupled with an interest, and
further agrees to execute and deliver to the Surviving Corporation from time to
time any documents or instruments reasonably requested by the Surviving
Corporation to evidence such power of attorney.
13. OFFSET PROVISIONS. The following provision is in addition to the
offset provisions set forth in SECTIONS 2.7 and 2.11. Notwithstanding any other
provision of this
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Agreement, in the event any Tristar Party shall pay, incur or suffer any Damage
arising out of or resulting from or relating to any misrepresentation, breach of
warranty or breach of any covenant, commitment or agreement made herein or
undertaken herein by Seller (including, without limitation, any certificate
delivered hereunder by Seller), the Tristar Parties and the Surviving
Corporation shall have the right to and shall be obligated to reduce or offset
payments due on the Offset Promissory Notes in such amount or amounts of such
Damages, and any such reduction or offset shall be deemed to be a payment under
the Offset Promissory Notes to the extent of such reduction or offset as of the
date of issuance of such Offset Promissory Note. Any reduction or offset under
this Article shall be pro rata against each Offset Promissory Note in accordance
with the original stated principal amount of the Offset Promissory Notes. The
Surviving Corporation shall deliver to each authorized holder of a Offset
Promissory Note, at the address provided to the Surviving Corporation by such
holder, prior written notice of a reduction or offset and a reasonably detailed
description of the matter giving rise to such reduction or offset prior to such
offset or reduction under this ARTICLE 13.
Notwithstanding any provision of this Agreement, the Tristar Parties and
the Surviving Corporation shall not have the offset rights set forth in this
Article until the aggregate amount of such Damages exceeds $100,000 and after
such threshold amount has been attained, all Damages, other than those
aggregated to reach the threshold, shall be subject to offset hereunder. The
foregoing provision shall not apply to a Reduction under SECTION 2.7 or the
offset provisions of SECTION 2.11.
The Tristar Parties hereby acknowledge and agree that their sole recourse
for any amounts due from the shareholders of Seller pursuant to this Plan of
Merger and the Inducement Agreements (other than the non-compete and
non-disclosure of confidential information provisions thereof), shall be by
offset against the Offset Promissory Notes pursuant to this SECTION 13, and they
shall have no other rights or remedies against the shareholders of Seller for
such amounts. The foregoing shall not prevent the Tristar Parties from
exercising their right to seek an injunction as authorized by the Inducement
Agreements.
14. TERMINATION. This Agreement may be terminated without further
obligation of the parties, as follows:
14.1 MUTUAL CONSENT. This Agreement may be terminated at any time prior to
Closing by mutual written consent of the parties hereto.
14.2 FAILURE OF CONDITIONS. This Agreement may be terminated by either
party hereto, if the conditions, as set forth in this Agreement, to such party's
obligations under this Agreement are not fulfilled on or prior to the Closing
Date; provided that any such termination shall not otherwise limit the remedies
otherwise available to such party as a result of misrepresentations of or
breaches by the other party.
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14.3 FAILURE TO CLOSE. This Agreement will automatically terminate on
January 15, 2000, if the Closing shall not have occurred on or before such date,
unless the parties shall have otherwise agreed in writing prior to such date. No
party will be liable in damages to any other party as a result of termination
pursuant to this ARTICLE 14 unless the failure of the Closing was due to the
failure of such party to comply with the terms of this Agreement.
15. NOTICES. All notices, requests, demands and other communications
required or permitted to be given hereunder shall be in writing and shall be
deemed to have been duly given if delivered personally, given by prepaid telex
or telegram or by facsimile or other similar instantaneous electronic
transmission device or mailed first class, postage prepaid, certified United
States mail, return receipt requested, as follows:
(a) If to the Surviving Corporation, Purchaser or Tristar, at:
Tristar Corporation
12500 San Pedro Avenue, Suite 500
San Antonio, Texas 78216
Attention: Chief Financial Officer
Facsimile No.: (210) 402-2239
With a copy to:
Fulbright & Jaworski L.L.P.
300 Convent Street, Suite 2200
San Antonio, Texas 78205
Attention: Phillip M. Renfro
Facsimile No.: (210) 270-7205
(b) If to Seller, at:
Fragrance Impressions Limited
116 Knowlton Street
Bridgeport, CT 06608
Attention: Thomas E. McCann
Facsimile No.: (212) 221-7128
With a copy to:
Sweeney Lev & Blinkoff LLP
708 Third Avenue
New York, NY 10017
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Attention: Leonard J. Lev
Facsimile No.: (212) 370-7336
provided that any party may change its address for notice by giving to the other
party written notice of such change. Any notice given under this Article shall
be effective (x) when delivered, if delivered personally, (y) 24 hours after
sending, if sent by telex or telegram or by facsimile or other similar
instantaneous electronic transmission device, and (z) 48 hours after mailing, if
mailed.
16. GENERAL PROVISIONS.
16.1 GOVERNING LAW; INTERPRETATION; SECTION HEADINGS. This Agreement shall
be governed by and construed and enforced in accordance with the laws of the
State of Texas, without regard to conflict-of-laws rules as applied in Texas.
The section headings contained herein are for purposes of convenience only, and
shall not be deemed to constitute a part of this Agreement or to affect the
meaning or interpretation of this Agreement in any way.
16.2 SEVERABILITY. Should any provision of this Agreement be held
unenforceable or invalid under the laws of the United States of America or the
State of Texas, or under any other applicable laws of any other jurisdiction,
then the parties hereto agree that such provision shall be deemed modified for
purposes of performance of this Agreement in such jurisdiction to the extent
necessary to render it lawful and enforceable, or if such a modification is not
possible without materially altering the intention of the parties hereto, then
such provision shall be severed herefrom for purposes of performance of this
Agreement in such jurisdiction. The validity of the remaining provisions of this
Agreement shall not be affected by any such modification or severance, except
that if any severance materially alters the intentions of the parties hereto as
expressed herein (a modification being permitted only if there is no material
alteration), then the parties hereto shall use commercially reasonable efforts
to agree to appropriate equitable amendments to this Agreement in light of such
severance, and if no such agreement can be reached within a reasonable time, any
party hereto may initiate arbitration pursuant to the provisions of SECTION
16.12 to determine and effect such appropriate equitable amendments.
16.3 ENTIRE AGREEMENT. This Agreement, the Schedules and the documents and
agreements referenced herein set forth the entire agreement and understanding of
the parties hereto with respect to the transactions contemplated hereby, and
supersede all prior agreements, arrangements and understandings related to the
subject matter hereof. No representation, promise, inducement or statement of
intention has been made by any party hereto which is not embodied or referenced
in this Agreement, the Schedules or the documents or agreements referenced
herein, and no party hereto shall be bound by or liable for any alleged
representation, promise, inducement or statement of intention not so set forth.
16.4 BINDING EFFECT. All the terms, provisions, covenants and conditions
of this Agreement shall be binding upon and inure to the benefit of and be
enforceable by the parties hereto
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and their respective heirs, executors, administrators, representatives,
successors and assigns; provided that this provision shall not permit and
assignment otherwise prohibited hereby.
16.5 THIRD-PARTY BENEFICIARIES. Nothing in this Agreement, expressed or
implied, is intended to confer upon any party other than the parties hereto or
their respective successors and assigns any rights, remedies, obligations or
liabilities under or by reason of this Agreement, except as set forth in ARTICLE
5 hereof.
16.6 ASSIGNMENT. This Agreement and the rights and obligations of the
parties hereto shall not be assigned or delegated by any party hereto without
the prior written consent of the other parties hereto.
16.7 AMENDMENT; WAIVER. This Agreement may be amended, modified,
superseded or canceled, and any of the terms, provisions, representations,
warranties, covenants or conditions hereof may be waived, only by a written
instrument executed by all parties hereto, or, in the case of a waiver, by the
party waiving compliance. The failure of any party at any time or times to
require performance of any provision hereof shall in no manner affect the right
to enforce the same. No waiver by any party of any condition contained in this
Agreement, or of the breach of any term, provision, representation, warranty or
covenant contained in this Agreement, in any one or more instances, shall be
deemed to be or construed as a further or continuing waiver of any such
condition or breach, or as a waiver of any other condition or of the breach of
any other term, provision, representation, warranty or covenant.
16.8 GENDER; NUMBERS. All references in this Agreement to the masculine,
feminine or neuter genders shall, where appropriate, be deemed to include all
other genders. All plurals used in this Agreement shall, where appropriate, be
deemed to be singular, and VICE VERSA.
16.9 COUNTERPARTS. This Agreement may be executed simultaneously in two or
more counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument. This Agreement shall be
binding when one or more counterparts hereof, individually or taken together,
shall bear the signatures of the parties reflected hereon as signatories.
16.10 TELECOPY EXECUTION AND DELIVERY. A facsimile, telecopy or other
reproduction of this Agreement may be executed by one or more parties hereto,
and an executed copy of this Agreement may be delivered by one or more parties
hereto by facsimile or similar instantaneous electronic transmission device
pursuant to which the signature of or on behalf of such party can be seen, and
such execution and delivery shall be considered valid, binding and effective for
all purposes. At the request of any party hereto, all parties hereto agree to
execute an original of this Agreement as well as any facsimile, telecopy or
other reproduction hereof.
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16.11 EXPENSES. Whether or not the transactions contemplated hereby are
consummated, each of the parties will pay its own costs and expenses in
connection with the preparation, execution and delivery of this Agreement and
all agreements executed in connection herewith.
16.12 ARBITRATION. Any controversy of any nature whatsoever, including but
not limited to tort claims or contract disputes, between the parties to this
Agreement or their respective heirs, executors, administrators, legal
representatives, successors and assigns, as applicable, arising out of or
related to this Agreement, including the implementation, applicability and
interpretation thereof, shall, upon the written request of one party served upon
the other, be submitted to and settled by arbitration in New York, New York in
accordance with the provisions of the Federal Arbitration Act, 9 U.S.C.
ss.ss.1-15, as amended. The terms of the commercial arbitration rules of the
American Arbitration Association shall apply except to the extent they conflict
with the provisions of this paragraph. If the amount in controversy in the
arbitration exceeds Two Hundred and Fifty Thousand Dollars ($250,000), exclusive
of interest, attorneys' fees and costs, the arbitration shall be conducted by a
panel of three independent arbitrators. Otherwise, the arbitration shall be
conducted by a single independent arbitrator. The parties shall endeavor to
select independent arbitrators by mutual agreement. If such agreement cannot be
reached within 30 calendar days after a dispute has arisen which is to be
decided by arbitration, the selection of the arbitrator(s) shall be made in
accordance with Rule 13 of the Rules as presently in effect. If three
arbitrators are selected, the arbitrators shall elect a chairperson to preside
at all meetings and hearings. If a dispute is to be resolved by a sole
arbitrator in accordance with the terms hereof, or if the dispute is to be
resolved by a panel of three arbitrators as provided hereinabove, then each such
arbitrator shall be a member of a state bar engaged in the practice of law in
the United States or a retired member of a state or the federal judiciary in the
United States. The award of the arbitrator(s) shall require a majority of the
arbitrators in the case of a panel of arbitrators, shall be based on the
evidence admitted and the substantive law of the State of Texas and shall
contain an award for each issue and counterclaim. The award shall be made 30
days following the close of the final hearing and the filing of any post hearing
briefs authorized by the arbitrator(s). The award of the arbitrator(s) shall be
final and binding on the parties hereto. Each party shall be entitled to inspect
and obtain a copy of non- privileged relevant documents in the possession or
control of the other party. All such discovery shall be in accordance with
procedures approved by the arbitrator(s). Unless otherwise provided in the
award, each party shall bear its own costs of discovery. Each party shall be
entitled to take one deposition. Each party shall be entitled to submit one set
of interrogatories which require no more than 30 answers. All discovery shall be
expedited, consistent with the nature and complexity of the claim or dispute and
consistent with fairness and justice. The arbitrator(s) shall have the power to
compel any party to comply with discovery requests of the other parties and to
issue binding orders relating to any discovery dispute which shall be
enforceable in the same manner as awards. The arbitrator(s) also shall have the
power to impose sanctions for abuse or frustration of the arbitration process,
including without limitation, the refusal to comply with orders of the
arbitrator(s) relating to discovery and compliance with subpoenas. Without
limiting the scope of the parties' obligation to arbitrate disputes pursuant to
this SECTION 16.12, the arbitrator(s) are not empowered to award damages
including, without limitation, punitive damages and multiple damages under
applicable
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Texas statutes, in excess of compensatory damages; provided that in no event
shall consequential damages be awarded. Each of Tristar, Purchaser and Seller
hereby irrevocably waives and releases any right to recover such damages in
excess of those damages authorized by this SECTION 16.12. The arbitrator(s) may
require the non-prevailing party to pay the prevailing party's attorneys' fees
and costs incurred in connection with the arbitration. It is further agreed that
any of the parties hereto may petition the United States District Court for the
Western District of Texas, San Antonio Division, or any court having
jurisdiction for a judgment to be entered upon any award entered through such
arbitration proceedings.
16.13 REVIEW OF COUNSEL. Each party hereto acknowledges that it and its
counsel have received, reviewed and been involved in the drafting of this
Agreement and the agreements referenced herein to be executed at Closing and
that normal rules of construction, to the effect that ambiguities are to be
resolved against the drafting party, shall not apply.
[SIGNATURES ON FOLLOWING PAGE]
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IN WITNESS WHEREOF, the parties have executed this Plan of Merger and
Acquisition Agreement as of the date first above written.
PURCHASER:
TRISTAR USA, INC.
By: ____________________________________
Robert M. Viola
Executive Vice President
TRISTAR:
TRISTAR CORPORATION
By: ____________________________________
Robert M. Viola
Executive Vice President
SELLER:
FRAGRANCE IMPRESSIONS LIMITED
By: ____________________________________
Name: __________________________________
Title: _________________________________
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SCHEDULE 1.67
PERMITTED ENCUMBRANCES
SCHEDULE 2.6
ALLOCATION OF STOCK CONSIDERATION AND CASH CONSIDERATION
SCHEDULE 2.11(C)
CHARGE-BACK ACCOUNTS
SCHEDULE 4.3
SELLER'S FINANCIAL STATEMENTS
SCHEDULE 4.7
EMPLOYEE NAMES AND COMPENSATION
SCHEDULE 10.1
OPINION OF COUNSEL FOR SELLER
SCHEDULE 10.10
TERMINATED CONTRACTS
SCHEDULE 11.1
OPINION OF FULBRIGHT & JAWORSKI L.L.P.
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EXHIBIT 1.33(A)
DELAWARE FORM OF CERTIFICATE OF MERGER
EXHIBIT 1.33(B)
CONNECTICUT FORM OF ARTICLES OF MERGER
EXHIBIT 2.6(A)
OPTION AGREEMENT
EXHIBIT 2.6(B)
OFFSET PROMISSORY NOTE
EXHIBIT 2.6(C)
NON-OFFSET PROMISSORY NOTE
EXHIBIT 2.9(A)
KEY EMPLOYEE PROMISSORY NOTE
EXHIBIT 2.9(B)(1)
WALSWORTH PROMISSORY NOTE
EXHIBIT 2.9(B)(2)
WALSWORTH $60,000 PROMISSORY NOTE
EXHIBIT 2.9(C)
FRIEDMAN PROMISSORY NOTE
EXHIBIT 2.9(D)
DAVIS PROMISSORY NOTE
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EXHIBIT 2.12(E)
GEORGE LUBY PROMISSORY NOTE
EXHIBIT 10.5(A)
McCANN EMPLOYMENT AGREEMENT
EXHIBIT 10.5(B)
FALKOWSKI EMPLOYMENT AGREEMENT
EXHIBIT 10.5(C)
CATAPANO EMPLOYMENT AGREEMENT
EXHIBIT 10.5(D)
ROBERT LUBY EMPLOYMENT AGREEMENT
EXHIBIT 10.9(A)
LUBY/McCANN INDUCEMENT AGREEMENT
EXHIBIT 10.9(B)
WALSWORTH INDUCEMENT AGREEMENT
EXHIBIT 10.11(A)
KEY EMPLOYEE RELEASE
EXHIBIT 10.11(B)
WALSWORTH RELEASE
EXHIBIT 10.11(C)
FRIEDMAN RELEASE
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EXHIBIT 10.11(D)
DAVIS RELEASE
EXHIBIT 10.11(E)
PEOPLE'S BANK RELEASE
EXHIBIT 10.12
BRIDGEPORT LEASE AMENDMENT
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Schedule 10.1
SELLER'S OPINION
1. Seller is a corporation duly incorporated, in existence and in good
standing under the Connecticut Stock Corporation Act. Seller has the corporate
power to own or lease its properties and to carry on its business as now
conducted, and to own its assets.
2. Seller has the corporate power and authority to execute, deliver and
perform its obligations under this Agreement. Seller's execution of, delivery of
and performance of its obligations under this Agreement has been duly authorized
by all requisite corporate action, and this Agreement has been duly executed and
delivered by Seller.
3. This Agreement and each of the Inducement Agreements constitutes valid
and binding obligations of Seller or a shareholder of Seller, as applicable,
enforceable against Seller or the shareholders of Seller, as applicable, in
accordance with its terms.
4. The execution and delivery of this Agreement by Seller and the
performance by Seller of its obligations hereunder and the consummation of the
transactions contemplated hereby do not (with or without the giving of notice or
the lapse of time or both) (i) conflict with or result in a violation of the
Articles of Incorporation or Bylaws of Seller or (ii) to our knowledge (a)
breach or violate any judicial or regulatory judgment, order, writ or decree to
which Seller is a party or is subject or (b) violate any provision of law or
statute, or any rule or regulation of any governmental agency or authority
applicable to Seller.
5. Upon the filing of the Certificate of Merger with the Secretary of
State of the State of Connecticut as contemplated by SECTION 2.1, the
appropriate filings will have been made with the Secretary of State of the State
of Connecticut by Seller with respect to the Merger to cause the Merger to
become effective under the Connecticut Stock Corporation Act.
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Schedule 11.1
TRISTAR PARTIES' OPINION
1. The Tristar Parties are corporations duly incorporated, in existence
and in good standing under the Delaware General Corporation Law. The Tristar
Parties have the corporate power to own or lease their properties and to carry
on their business as described in Tristar's Form 10-K for the year ended August
29,1998, and to own their assets.
2. The Tristar Parties have the corporate power and authority to execute,
deliver and perform their obligations under this Agreement. The Tristar Parties'
execution of, delivery of and performance of their obligations under this
Agreement have been duly authorized by all requisite corporate action, and this
Agreement has been duly executed and delivered by the Tristar Parties.
3. This Agreement constitutes valid and binding obligations of the Tristar
Parties enforceable against the Tristar Parties in accordance with its terms.
4. The execution and delivery of this Agreement by the Tristar Parties and
the performance by the Tristar Parties of their obligations hereunder and the
consummation of the transactions contemplated hereby do not (with or without the
giving of notice or the lapse of time or both) (i) conflict with or result in a
violation of the Certificate of Incorporation or Bylaws of the Tristar Parties
or (ii) to our knowledge (a) breach or violate any judicial or regulatory
judgment, order, writ or decree to which the Tristar Parties are a party or are
subject or (b) violate any provision of law or statute, or any rule or
regulation of any governmental agency or authority applicable to the Tristar
Parties.
5. Upon the filing of the Certificate of Merger with the Secretary of
State of the State of Delaware as contemplated by SECTION 2.1, the appropriate
filings will have been made with the Secretary of State of the State of Delaware
by the Tristar Parties with respect to the Merger to cause the Merger to become
effective under the Delaware General Corporation Law.
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