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EXHIBIT 10.1
AGREEMENT AND PLAN OF MERGER
Among
EUROSTAR PERFUMES, INC.,
TRANSVIT MANUFACTURING CORPORATION
and
TRISTAR CORPORATION
July 1, 1995
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TABLE OF CONTENTS
I
THE MERGER . . . . . . . . . . . . . . . . . . . . . . . . . 1
1.1 The Merger . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
1.2 Closing Date . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
1.3 Consummation of the Merger . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
1.4 Effects of the Merger . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
1.5 Certificate of Incorporation; Bylaws . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
1.6 Directors and Officers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
1.7 Conversion of Securities; Exchange; Fractional Shares . . . . . . . . . . . . . . . . . . . . . . . 2
1.8 Taking of Necessary Action; Further Action . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
II
REPRESENTATIONS AND WARRANTIES . . . . . . . . . . . . . . . . . . . . 3
2.1 Certain Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
2.2 Representations and Warranties of Eurostar and Parent . . . . . . . . . . . . . . . . . . . . . . . 3
(a) Organization and Compliance with Law . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
(b) Capitalization . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
(c) Authorization and Validity of Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . 4
(d) No Approvals or Notices Required; No Conflict with Instruments to which Eurostar or
Parent is a Party . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
(e) Eurostar Financial Statements; Material Agreements . . . . . . . . . . . . . . . . . . . . 5
(f) Conduct of Business in the Ordinary Course; Absence of Certain Changes and Events . . . . . 5
(g) Certain Fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
(h) Litigation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
(i) Employee Benefit Plans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
(j) Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
(k) Environmental . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
(l) No Severance Payments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
(m) Voting Requirements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
(n) Insurance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
(o) Title to Property . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
2.3 Representations and Warranties of Tristar . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
(a) Organization and Compliance with Law . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
(b) Capitalization . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
(c) Authorization and Validity of Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . 10
(d) No Approvals or Notices Required; No Conflict with Instruments to which Tristar or any
of the Tristar Subsidiaries is a Party . . . . . . . . . . . . . . . . . . . . . . . . . . 11
(e) Commission Filings; Financial Statements . . . . . . . . . . . . . . . . . . . . . . . . . 11
(f) Conduct of Business in the Ordinary Course; Absence of Certain Changes and Events . . . . . 12
(g) Certain Fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
(h) Litigation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
(i) Employee Benefit Plans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
(j) Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
(k) Environmental . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
(l) No Severance Payments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
(m) Voting Requirements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
(n) Insurance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
(o) Title to Property . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
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III
COVENANTS OF EUROSTAR PRIOR TO THE EFFECTIVE TIME . . . . . . . . . . . . . . . 16
3.1 Conduct of Business by Eurostar Pending the Merger . . . . . . . . . . . . . . . . . . . . . . . . . 16
3.2 Access to Information; Confidentiality . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
IV
COVENANTS OF TRISTAR PRIOR TO THE EFFECTIVE TIME . . . . . . . . . . . . . . . . 18
4.1 Conduct of Business by Tristar Pending the Merger . . . . . . . . . . . . . . . . . . . . . . . . . 18
4.2 Access to Information; Confidentiality . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
4.3 NASDAQ/NMS Listing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
V
ADDITIONAL AGREEMENTS . . . . . . . . . . . . . . . . . . . . . . 19
5.1 Proxy Statement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
5.2 Approval of Stockholders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
5.3 Filings; Consents; Reasonable Efforts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
5.4 Notification of Certain Matters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
5.5 Agreement to Defend . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
5.6 Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
5.7 Indemnity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
5.8 Termination of Distribution Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
VI
CONDITIONS . . . . . . . . . . . . . . . . . . . . . . . . . 21
6.1 Conditions to Obligation of Each Party to Effect the Merger . . . . . . . . . . . . . . . . . . . . 21
6.2 Additional Conditions to Obligations of Tristar . . . . . . . . . . . . . . . . . . . . . . . . . . 22
6.3 Additional Conditions to Obligations of Eurostar . . . . . . . . . . . . . . . . . . . . . . . . . . 22
VII
MISCELLANEOUS . . . . . . . . . . . . . . . . . . . . . . . . 23
7.1 Termination . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
7.2 Effect of Termination . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
7.3 Waiver and Amendment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
7.4 Survival of Representations, Warranties, Covenants and Agreements . . . . . . . . . . . . . . . . . 24
7.5 Public Statements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
7.6 Assignment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
7.7 Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
7.8 Governing Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
7.9 Severability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
7.10 Counterparts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
7.11 Headings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
7.12 Entire Agreement; Third Party Beneficiaries . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
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AGREEMENT AND PLAN OF MERGER
This Agreement and Plan of Merger (the "Agreement"), executed the 31st
day of July, 1995 (the "Date Hereof"), to be effective July 1, 1995 (the
"Effective Date"), is among Eurostar Perfumes, Inc., a Texas corporation
("Eurostar"), Transvit Manufacturing Corporation, a British Virgin Islands
corporation and the sole stockholder of Eurostar ("Parent"), and TRISTAR
CORPORATION, a Delaware corporation ("Tristar").
WHEREAS, subject to and in accordance with the terms and conditions of
this Agreement, as of the Date Hereof, the respective Boards of Directors of
Eurostar and Tristar, and Parent as sole stockholder of Eurostar, have approved
the merger of Eurostar with and into Tristar (the "Merger"), whereby each
issued and outstanding share of common stock, par value $.001 per share, of
Eurostar ("Eurostar Common Stock") not owned directly or indirectly by Eurostar
will be converted into the right to receive common stock, par value $.01 per
share, of Tristar ("Tristar Common Stock"), as provided herein;
WHEREAS, for federal income tax purposes, it is intended that the
Merger shall qualify as a reorganization within the meaning of Section 368(a)
of the Internal Revenue Code of 1986, as amended (the "Code");
WHEREAS, the Merger is intended to be accounted for in a manner
similar to a "pooling of interests" for accounting purposes; and
WHEREAS, the parties hereto desire to set forth certain
representations, warranties and covenants made by each to the other as an
inducement to the consummation of the Merger;
NOW, THEREFORE, in consideration of the premises and of the mutual
representations, warranties and covenants herein contained, the parties hereto
hereby agree as follows:
ARTICLE I
THE MERGER
1.1 The Merger. Subject to and in accordance with the terms and
conditions of this Agreement and in accordance with the Delaware General
Corporation Law (the "DGCL"), and the Texas Business Corporation Act (the
"TBCA"), at the Effective Time (as defined in Section 1.3) Eurostar shall be
merged with and into Tristar. As a result of the Merger, the separate
corporate existence of Eurostar shall cease and Tristar shall continue as the
surviving corporation (sometimes referred to herein as the "Surviving
Corporation") and shall succeed to and assume all of the rights and obligations
of Eurostar in accordance with the DGCL and the TBCA.
1.2 Closing Date. The closing of the transactions contemplated by
this Agreement (the "Closing") shall take place at the offices of Fulbright &
Jaworski L.L.P., 300 Convent Street, Suite 2200, San Antonio, Texas, as soon as
practicable after the satisfaction or waiver of the conditions set forth in
Article VI or at such other time and place and on such other date as Eurostar
and Tristar shall agree; provided, that the closing conditions set forth in
Article VI shall have been satisfied or waived at or prior to such time. The
date on which the Closing occurs is herein referred to as the "Closing Date".
1.3 Consummation of the Merger. As soon as practicable on the
Closing Date, the parties hereto will cause the Merger to be consummated by
filing with the Secretary of State of the State of Delaware a certificate of
merger in such form as required by, and executed in accordance with, the
relevant provisions of the DGCL, and by filing with the Secretary of State of
the State of Texas articles of merger in such form as required by, and executed
in accordance with, the Texas Business Corporation Act (the "TBCA"). The
"Effective Time" of the Merger as that term is used in this Agreement shall
mean the later to occur of the filing of such certificate of merger or articles
of merger.
1.4 Effects of the Merger. The Merger shall have the effects set
forth in the applicable provisions of the DGCL and the TBCA and as set forth
herein.
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1.5 Certificate of Incorporation; Bylaws. The Certificate of
Incorporation and bylaws of Tristar, as in effect immediately prior to the
Effective Time and as amended as described in the Preliminary Proxy Statement
(hereinafter defined), shall be the Certificate of Incorporation and bylaws of
the Surviving Corporation and thereafter shall continue to be its Certificate
of Incorporation and bylaws until amended as provided therein and under the
DGCL.
1.6 Directors and Officers. The directors of Tristar immediately
prior to the Effective Time shall be the initial directors of the Surviving
Corporation, each to hold office in accordance with the Certificate of
Incorporation and bylaws of the Surviving Corporation, and the officers of
Tristar immediately prior to the Effective Time shall be the initial officers
of the Surviving Corporation, in each case until their respective successors
are duly elected or appointed and qualified.
1.7 Conversion of Securities; Exchange; Fractional Shares.
Subject to the terms and conditions of this Agreement, at the Effective Time,
by virtue of the Merger and without any action on the part of Eurostar, Tristar
or their respective stockholders:
(a) Each share of Eurostar Common Stock issued and
outstanding immediately prior to the Effective Time (the "Shares"),
other than any Shares to be canceled pursuant to Section 1.7(b), shall
be converted, subject to the provisions of this Section 1.7, into the
right to receive 9.97781 shares of Tristar Common Stock; provided,
however, that no fractional shares of Eurostar Common Stock shall be
issued, and, in lieu thereof, the number of shares shall be rounded
downward to the next whole number.
(b) Each share of Eurostar Common Stock held in the
treasury of Eurostar immediately prior to the Effective Time shall be
canceled and extinguished at the Effective Time without any conversion
thereof and no payment shall be made with respect thereto.
(c) As soon as practicable after the Effective Time, each
holder of an outstanding certificate that prior thereto represented
Shares shall be entitled, upon surrender thereof to the transfer agent
for the Tristar Common Stock, to receive in exchange therefor a
certificate or certificates representing the number of whole shares of
Tristar Common Stock into which the Shares so surrendered shall have
been converted as aforesaid, of such denominations and registered in
such names as such holder may request. Until so surrendered, each
outstanding certificate that, prior to the Effective Time, represented
Shares shall be deemed from and after the Effective Time, for all
corporate purposes, other than the payment of earlier dividends and
distributions, to evidence the ownership of the number of full shares
of Tristar Common Stock into which such Shares shall have been
converted pursuant to this Section 1.7. Unless and until any such
outstanding certificates shall be surrendered, no dividends or other
distributions payable to the holders of Tristar Common Stock, as of
any time on or after the Effective Time, shall be paid to the holders
of such outstanding certificates which prior to the Effective Time
represented Shares; provided, however, that, upon surrender and
exchange of such outstanding certificates, there shall be paid to the
record holders of the certificates issued and exchanged therefor the
amount, without interest thereon, of dividends and other
distributions, if any, that theretofore were declared and became
payable since the Effective Time with respect to the number of full
shares of Tristar Common Stock issued to such holders.
(d) All shares of Tristar Common Stock into which the
Shares shall have been converted pursuant to this Section 1.7 shall be
issued in full satisfaction of all rights pertaining to such converted
Shares.
1.8 Taking of Necessary Action; Further Action. The parties
hereto shall take all such reasonable and lawful action as may be necessary or
appropriate in order to effectuate the Merger as promptly as possible. If, at
any time after the Effective Time, any such further action is necessary or
desirable to carry out the purposes of this Agreement and to vest the Surviving
Corporation with full right, title and possession to all assets, property,
rights, privileges, powers and franchises of Eurostar or Tristar, such
corporations shall direct their respective officers and directors to take all
such lawful and necessary action.
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ARTICLE II
REPRESENTATIONS AND WARRANTIES
Unless stated otherwise, all representations and warranties are as of
the Effective Date.
2.1 Certain Definitions. As used in this Agreement, the following
terms shall have the meanings ascribed to them below:
(a) "Environmental Laws" shall mean all federal, state,
local or municipal laws, rules, regulations, statutes, ordinances or
orders of any governmental entity relating to (i) the control of any
potential pollutant or protection of the air, water or land, (ii)
solid, gaseous or liquid waste generation, handling, treatment,
storage, disposal or transportation, and (iii) exposure to hazardous,
toxic or other substances alleged to be harmful. The term
"Environmental Laws" shall include, but not be limited to, the Clean
Air Act, 42 U.S.C. Section 7401 et seq., the Clean Water Act, 33
U.S.C. Section 1251 et seq., the Resource Conservation and Recovery
Act, 42 U.S.C. Section 6901, et seq., the Toxic Substances Control
Act, 15 U.S.C. Section 2601 et seq., the Safe Drinking Water Act, 42
U.S.C. Section 300f et seq. and the Comprehensive Environmental
Response, Compensation and Liability Act ("CERCLA"), 42 U.S.C. Section
9601 et seq.
(b) "Environmental Permit" shall mean any permit,
license, approval, registration, identification number or other
authorization with respect to any business or other operations
conducted by Eurostar or any Eurostar Subsidiary (as defined in
Section 2.2(a)) or Tristar or any Tristar subsidiary (as defined in
Section 2.3(a)).
(c) "Hazardous Materials" shall mean any (i) petroleum or
petroleum products, (ii) hazardous substances as defined by Section
101(14) of CERCLA or (iii) any other chemical, substance or waste that
is regulated under any Environmental Law.
(d) "Knowledge" of any party shall mean the collective
knowledge of such party's officers, directors and key employees.
(e) "Material Adverse Change" with respect to any party
shall mean a material adverse change in the business, financial
condition or results of operations of such party and its subsidiaries,
taken as a whole; provided, however, that in no event shall the term
"Material Adverse Change" be deemed to include (a) changes in national
economic conditions or industry conditions generally, (b) changes, or
possible changes, in federal, state or local statutes and regulations
applicable to Eurostar, Tristar or the Surviving Corporation.
(f) "Material Adverse Effect" on any party shall mean any
material adverse effect on the business, financial condition or
results of operations of such party and its subsidiaries, taken as a
whole or on such party's ability to consummate the Merger;
(g) "Permitted Liens" shall mean (A) liens for taxes not
due and payable or which are being contested in good faith, (B)
mechanics', warehousemen's and other statutory liens incurred in the
ordinary course of business, and (C) defects and irregularities in
title and encumbrances which are not substantial in character or
amount and do not materially impair the use of the property or asset
in question.
2.2 Representations and Warranties of Eurostar and Parent.
Eurostar and Parent hereby, jointly and severally, represent and warrant to
Tristar that, except as set forth in the Preliminary Proxy Statement or in the
disclosure letter delivered by Eurostar to Tristar on the Date Hereof (the
"Eurostar Disclosure Letter") that as of the Effective Date:
(a) Organization and Compliance with Law. Eurostar and
each of its corporate subsidiaries (the "Eurostar Subsidiaries") is a
corporation duly organized, validly existing and in good standing
under the laws of the jurisdiction in which it is organized and has
all requisite corporate power and authority and all necessary
governmental authorizations to own, lease and
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operate all of its properties and assets and to carry on its business
as now being conducted, except where the failure to have such
governmental authority would not, either individually or in the
aggregate, have a Material Adverse Effect. Eurostar and each of the
Eurostar Subsidiaries is duly qualified as a foreign corporation to do
business, and is in good standing, in each jurisdiction in which the
property owned, leased or operated by it or the nature of the business
conducted by it makes such qualification necessary, except in such
jurisdictions where the failure to be duly qualified does not and
would not, either individually or in the aggregate, have a Material
Adverse Effect. Neither Eurostar nor any of the Eurostar
Subsidiaries, nor any employee or, to the Knowledge of Eurostar, any
agent of Eurostar or any of the Eurostar Subsidiaries, has made any
payment or transfer of funds or assets to any person or conferred any
benefit on any person or received any funds, assets or personal
benefit in violation of any applicable law, rule or regulation.
Eurostar and each of the Eurostar Subsidiaries is in compliance with
all applicable laws, judgments, orders, rules and regulations,
domestic and foreign, except where failure to be in such compliance
would not, either individually or in the aggregate, have a Material
Adverse Effect. Eurostar has heretofore delivered to Tristar true and
complete copies of the articles of incorporation and bylaws of
Eurostar. The Eurostar Disclosure Letter sets forth each of the
Eurostar Subsidiaries and their respective jurisdictions of
incorporation.
(b) Capitalization.
(i) The authorized capital stock of Eurostar
consists of 1,000,000 shares of Eurostar Common Stock, par
value $.001 per share, all of which are issued and
outstanding. All issued shares of Eurostar Common Stock are
validly issued, fully paid and nonassessable and were not
issued in violation of the preemptive rights of any person.
Eurostar is not a party to, and has no Knowledge of, any
agreement or arrangement providing for registration rights
with respect to any capital stock or other securities of
Eurostar. All issued shares of Eurostar Common Stock are
owned by Parent free and clear of all liens, charges,
encumbrances, adverse claims and options of any nature. All
outstanding shares of capital stock of Eurostar Subsidiaries
are owned by Eurostar free and clear of all liens, charges,
encumbrances, adverse claims and options of any nature.
(ii) Other than as set forth in this Section
2.2(b), there are not as of the Effective Date, and at the
Effective Time there will not be, any (A) shares of capital
stock or other equity securities of Eurostar outstanding or
(B) outstanding options, warrants, scrip, rights to subscribe
for, calls or commitments of any character whatsoever relating
to, or securities or rights convertible into or exchangeable
for, shares of any class of capital stock of Eurostar, or
contracts, understandings or arrangements to which Eurostar is
a party, or by which it is or may be bound, to issue
additional shares of its capital stock or options, warrants,
scrip or rights to subscribe for, or securities or rights
convertible into or exchangeable for, any additional shares of
its capital stock.
(c) Authorization and Validity of Agreement. Eurostar
and Parent have all requisite corporate power and authority to enter
into this Agreement and to perform their respective obligations
hereunder. As of the Date hereof, the execution and delivery by
Eurostar and Parent of this Agreement and the consummation by each of
them of the transactions contemplated hereby have been duly authorized
by all necessary corporate action. As of the Date hereof, this
Agreement has been duly executed and delivered by Eurostar and Parent
and is the valid and binding obligation of Eurostar and Parent,
enforceable against Eurostar and Parent in accordance with its terms,
except as such enforceability may be limited or affected by (i)
bankruptcy, insolvency, reorganization, moratorium, liquidation,
arrangement, fraudulent transfer, fraudulent conveyance and other
similar laws (including court decisions) now or hereafter in effect
and affecting the rights and remedies of creditors generally or
providing for the relief of debtors, (ii) the refusal of a particular
court to grant equitable remedies, including, without limitation,
specific performance and injunctive relief, and (iii) general
principles of equity (regardless of whether such remedies are sought
in a proceeding in equity or at law) and except as the
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enforceability of any indemnification provision contained in this
Agreement may be limited by applicable federal or state securities
laws.
(d) No Approvals or Notices Required; No Conflict with
Instruments to which Eurostar or Parent is a Party. Neither the
execution and delivery of this Agreement nor the performance by
Eurostar or Parent of its obligations hereunder, nor the consummation
of the transactions contemplated hereby by Eurostar or Parent, will
(i) conflict with the charter or bylaws of Eurostar or Parent; (ii)
assuming satisfaction of the requirements set forth in clause (iii)
below, violate any provision of law applicable to Eurostar or Parent;
(iii) except for (A) requirements of Federal and state securities law,
and (B) the filing of articles of merger by Eurostar in accordance
with the TBCA, require any consent or approval of, or filing with or
notice to, any public body or authority, domestic or foreign, under
any provision of law applicable to Eurostar or Parent; or (iv) require
any consent, approval or notice under, or violate, breach, be in
conflict with or constitute a default (or an event that, with notice
or lapse of time or both, would constitute a default) under, or permit
the termination of any provision of, or result in the creation or
imposition of any lien upon any properties, assets or business of
Eurostar or Parent under, any note, bond, indenture, mortgage, deed of
trust, lease, franchise, permit, authorization, license, contract,
instrument or other agreement or commitment or any order, judgment or
decree to which Eurostar or Parent is a party or by which Eurostar or
Parent or any of their respective assets or properties are bound or
encumbered, except those that have already been given, obtained or
filed and except in any of the cases enumerated in clauses (ii)
through (iv), those that, in the aggregate, would not have a Material
Adverse Effect.
(e) Eurostar Financial Statements; Material Agreements.
Eurostar has delivered to Tristar copies of the consolidated balance
sheet of Eurostar and the Eurostar Subsidiaries as of September 30,
1992, 1993 and 1994, and March 31, 1995, and consolidated statements
of income and consolidated statements of shareholders' equity of
Eurostar and the Eurostar Subsidiaries for the fiscal periods then
ended. The financial statements delivered by Eurostar pursuant to
this Section 2.2(e) are collectively referred to herein as the
"Eurostar Consolidated Financial Statements." The Eurostar
Consolidated Financial Statements do not include the pro forma
financial statements of Tristar and Eurostar included in the
Preliminary Proxy Statement or to be included in the Proxy Statement
(hereinafter defined).
Each of the Eurostar Consolidated Financial Statements
(including any related notes or schedules) was, and each of the
Eurostar Consolidated Financial Statements to be included in the Proxy
Statement will be, prepared in accordance with generally accepted
accounting principles applied on a consistent basis (except as may be
noted therein or in the notes or schedules thereto), and fairly
presents or will fairly present, as the case may be, the consolidated
financial position of Eurostar and the Eurostar Subsidiaries as of the
dates thereof and the statements of income, cash flows (or changes in
financial position prior to the approval of Statement of Financial
Accounting Standards Number 95) and stockholders' equity for the
periods then ended (subject, in the case of the unaudited interim
financial statements, to normal year-end audit adjustments on a basis
comparable with past periods in accordance with generally accepted
accounting principles). As of the Effective Date, neither Eurostar
nor any of the Eurostar Subsidiaries has any material liabilities,
absolute or contingent, not reflected in the Eurostar Consolidated
Financial Statements, except for (i) liabilities not required under
generally accepted accounting principles to be reflected on such
financial statements or the notes thereto and (ii) liabilities
incurred in the ordinary course of business since March 31, 1995,
consistent with past operations and not relating to the borrowing of
money. The Eurostar Disclosure Letter contains a list of all material
contracts of Eurostar and the Eurostar Subsidiaries, true and correct
copies of which have been made available to Tristar.
(f) Conduct of Business in the Ordinary Course; Absence
of Certain Changes and Events. Since March 31, 1995, except as
contemplated by this Agreement, Eurostar and the Eurostar Subsidiaries
have conducted their business only in the ordinary and usual course,
and there has not been (i) any Material Adverse Change in Eurostar or
any condition, event or development that reasonably may be expected to
result in any such Material Adverse Change; (ii) any change by
Eurostar in its accounting methods, principles or practices; or (iii)
any
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declaration, setting aside or payment of any dividends or
distributions in respect of the Eurostar Common Stock or any
redemption, purchase or other acquisition of any of its securities or
any securities of any of the Eurostar Subsidiaries.
(g) Certain Fees. With the exception of the engagement
of Principal Financial Services, Inc. and Duncan-Smith Co., by
Eurostar, neither Eurostar nor any of its officers, directors or
employees, on behalf of Eurostar or any of the Eurostar Subsidiaries
or its or their respective Boards of Directors (or any committee
thereof), has employed any financial advisor, broker or finder or
incurred any liability for any financial advisory, brokerage or
finders' fees or commissions in connection with the transactions
contemplated hereby.
(h) Litigation. There are no claims, actions, suits,
investigations or proceedings pending or, to the knowledge of Eurostar
or any of the Eurostar Subsidiaries, threatened against or affecting
Eurostar or any of the Eurostar Subsidiaries or any of their
respective properties at law or in equity, or any of their respective
employee benefit plans or fiduciaries of such plans, or before or by
any federal, state, municipal or other governmental agency or
authority, or before any arbitration board or panel, wherever located,
that individually or in the aggregate if adversely determined would
have a Material Adverse Effect, or that involve the risk of criminal
liability.
(i) Employee Benefit Plans. The Eurostar Disclosure
Letter sets forth a complete and accurate list of:
(i) each "employee welfare benefit plan" (as such
term is defined in Section 3(1) of the Employee Retirement
Income Security Act of 1974, as amended ("ERISA")) (the
"Eurostar Welfare Plans");
(ii) each "employee pension benefit plan" (as such
term is defined in Section 3(2) of ERISA) (the "Eurostar
Pension Plans"); and
(iii) 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 (collectively, with the
Eurostar Welfare Plans and the Eurostar Pension Plans, the
"Eurostar Benefit Plans"),
that were in effect as of the Effective Date or were maintained within
three years of the Closing Date, or were approved before the Effective
Date but are not yet effective, for the benefit of directors,
officers, employees or former employees (or their beneficiaries) of
Eurostar, any of the Eurostar Subsidiaries incorporated in the United
States (the "Eurostar U.S. Subsidiaries") or any member of a
controlled group or affiliated service group (as defined in Section
414(b), (c) or (m) of the Code) that is incorporated or domiciled in
the United States of which Eurostar or any of the Eurostar U.S.
Subsidiaries is a member (collectively, the "Eurostar Group").
Eurostar and the Eurostar U.S. Subsidiaries have provided to Tristar,
as to each Eurostar Benefit Plan, as applicable, access to a complete
and accurate copy of (i) such plan, agreement or arrangement; (ii) the
trust, group annuity contract or other document that provides the
funding for such plan; (iii) the 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 any summary of material
modifications prepared after each such summary plan description; (vi)
the most recent Internal Revenue Service ("IRS") determination letter
and all rulings or determinations requested from the IRS subsequent to
the date of such determination letter; and (vii) all other pending
correspondence from the IRS or the Department of Labor that relates to
such plan received by Eurostar.
Each Eurostar Welfare Plan and each Eurostar Pension Plan (i)
is in compliance with ERISA, including, but not limited to, all
reporting and disclosure requirements of Part 1 of Subtitle B of Title
I of ERISA, except where the failure to be in compliance would not,
either
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individually or in the aggregate, have a Material Adverse Effect; (ii)
is in compliance with the Code, except where the failure to be in
compliance would not, either individually or in the aggregate, have a
Material Adverse Effect; (iii) has had the appropriate Form 5500
timely filed for any Eurostar Pension Plan for each year of its
existence and for any Eurostar Welfare Plan for each year of its
existence after 1987; (iv) has not engaged in any transaction
described in Section 406 or 407 of ERISA or Section 4975 of the Code
unless it received an exemption under Section 408 of ERISA or Section
4975 of the Code, as applicable, or unless such transaction has been
corrected and all applicable excise taxes paid or waived; (v) has at
all times complied with the bonding requirements of Section 412 of
ERISA; (vi) has no issue pending (other than the payment of benefits
in the normal course or the qualification of the plan pursuant to an
application pending before the IRS) nor any issue resolved adversely
to the Eurostar Group that may subject the Eurostar Group to the
payment of a penalty, interest, tax or other amount; and (vii) can be
unilaterally terminated or amended on no more than 90 days' notice.
No notice has been received by the Eurostar Group of an increase or
proposed increase in any premium relative to any Eurostar Benefit
Plan, and no amendment to any Eurostar Benefit Plan within the last
twelve months has increased the rate of employer contributions
thereunder.
Each Eurostar Benefit Plan that is intended to be a voluntary
employee benefit association has been submitted to and approved by the
IRS as exempt from federal income tax under Section 501(c)(9) of the
Code, or the applicable submission period relating to any such plan
will not have ended prior to the Closing. No Eurostar Benefit Plan
will cause the Eurostar Group to have liability for severance pay as a
result of this Agreement. The Eurostar Group does not provide
employee post-retirement medical or health coverage or contribute to
or maintain any employee welfare benefit plan that provides for health
benefit coverage following termination of employment except as
required by Section 4980B(f) of the Code or other applicable statute,
nor has the Eurostar Group made any representations, agreements,
covenants or commitments to provide that coverage. All group health
plans maintained by the Eurostar Group have been operated in
compliance with Section 4980B(f) of the Code.
Each Eurostar Pension Plan has been submitted to and approved
as qualifying under Section 401(a) of the Code by the IRS or the
applicable remedial amendment period relating to such plan will not
have ended prior to the Closing. No facts have occurred which, if
known by the IRS, could cause disqualification of any Eurostar Pension
Plan. Each Eurostar Pension Plan to which Section 412 of the Code is
applicable fully complies 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 such plan.
The Eurostar Group has paid all premiums (including interest, charges
and penalties for late payment) due the Pension Benefit Guaranty
Corporation (the "PBGC") with respect to each Eurostar Pension Plan
for which premiums are required. No Eurostar Pension Plan has been
terminated under circumstances that would result in liability to the
PBGC or the Eurostar Group. There has been no "reportable event" (as
defined in Section 4043(b) of ERISA and the regulations under that
Section) with respect to any Eurostar Pension Plan subject to Title IV
of ERISA. With respect to each Eurostar Pension Plan, the Eurostar
Group has not (i) ceased operations at a facility so as to become
subject to the provisions of Section 4062(e) of ERISA, (ii) withdrawn
as a substantial employer so as to become subject to the provisions of
Section 4063 of ERISA or (iii) ceased making contributions on or
before the Closing Date to any such plan subject to Section 4064(a) of
ERISA to which the Eurostar Group made contributions at any time
during the six years prior to the Closing Date. Neither the Eurostar
Group nor any member thereof has 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.
Eurostar's subsidiaries incorporated outside of the United
States and any benefit plans maintained by any of them for the benefit
of their directors, officers, employees or former employees (or any of
their beneficiaries) are in compliance with applicable laws pertaining
to such plans in the jurisdictions of such subsidiaries, except where
such failure to be in compliance would not, either individually or in
the aggregate, have a Material Adverse Effect.
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(j) Taxes. All returns and reports, including, without
limitation, information and withholding returns and reports ("Tax
Returns") of or relating to any foreign, federal, state or local tax,
assessment or other governmental charge ("Taxes" or a "Tax") that are
required to be filed on or before the Closing Date by or with respect
to Eurostar or any of the Eurostar Subsidiaries, or any other
corporation that is or was a member of an affiliated group (within the
meaning of Section 1504(a) of the Code) of corporations of which
Eurostar was a member for any period ending on or prior to the Closing
Date, have been or will be duly and timely filed (including any
applicable extensions), and all Taxes, including interest and
penalties, due and payable pursuant to such Tax Returns have been paid
or adequately provided for in reserves established by Eurostar, except
where the failure to file, pay or provide for would not, either
individually or in the aggregate, have a Material Adverse Effect. No
Tax Returns of or with respect to Eurostar or any of the Eurostar
Subsidiaries have been audited by the applicable governmental
authority. There is no material claim against Eurostar or any of the
Eurostar Subsidiaries with respect to any Taxes, and no material
assessment, deficiency or adjustment has been asserted or proposed
with respect to any Tax Return of or with respect to Eurostar or any
of the Eurostar Subsidiaries that has not been adequately provided for
in reserves established by Eurostar. The total amounts set up as
liabilities for current and deferred Taxes in the balance sheet dated
March 31, 1995, included in the Eurostar Consolidated Financial
Statements have been prepared in accordance with generally accepted
accounting principles and are sufficient to cover the payment of all
material Taxes, including any penalties or interest thereon and
whether or not assessed or disputed, that are, or are hereafter found
to be, or to have been, due with respect to the operations of Eurostar
and the Eurostar Subsidiaries through the periods covered thereby.
(k) Environmental. Except such matters which would not,
either individually or in the aggregate, have a Material Adverse
Effect:
(i) Neither Eurostar nor any Eurostar Subsidiary
has caused or, to the Knowledge of Eurostar, permitted the
release or disposal of Hazardous Materials onto, at or near
any property owned or operated by Eurostar or any Eurostar
Subsidiary.
(ii) To the Knowledge of Eurostar, neither
Eurostar nor any Eurostar Subsidiary has caused or allowed the
generation, use, treatment, storage or disposal of Hazardous
Materials in connection with any business or other operations
conducted by Eurostar or any Eurostar Subsidiary except in
accordance with all applicable Environmental Laws.
(iii) To the Knowledge of Eurostar, Eurostar and
the Eurostar Subsidiaries have obtained and are in substantial
compliance with all Environmental Permits required with
respect to the business or other operations conducted by
Eurostar or any Eurostar Subsidiary.
(iv) To the Knowledge of Eurostar, Eurostar and
the Eurostar Subsidiaries have filed all reports required by
Environmental Laws.
(v) Eurostar and the Eurostar Subsidiaries have
provided Tristar access to all environmental audits or
assessments prepared by or for, or received by, Eurostar or
any Eurostar Subsidiary with respect to any business or other
operations conducted by Eurostar or any Eurostar Subsidiary.
(vi) Eurostar has no Knowledge of any facts,
conditions or circumstances that could cause Eurostar or any
Eurostar Subsidiary to incur any loss, liability, damage,
costs or expenses, with respect to any individual event in
excess of $50,000, or in the aggregate in excess of $250,000,
over Eurostar's accrued liabilities related to environmental
matters reflected on Eurostar's most recent consolidated
balance sheet contained in the Eurostar Consolidated Financial
Statements, for (A) violations of United States or foreign
Environmental Laws, (B) failure to obtain a United States or
foreign Environmental Permit, (C) response or remedial costs
under any Environmental Law or (D) personal
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12
injury or property damage resulting from exposure to or
releases of Hazardous Materials under United States or foreign
Environmental Laws.
(vii) Neither Eurostar nor any Eurostar Subsidiary
has received any inquiry or notice, nor does Eurostar have any
reason to suspect or believe any of them will receive any
inquiry or notice, of any actual or potential proceeding,
claim, lawsuit or loss that arises under or relates to any
Environmental Law.
(viii) Neither Eurostar nor any Eurostar Subsidiary
is currently operating or required to be operating under any
compliance order, schedule, decree or agreement, any consent
decree, order or agreement, or any corrective action decree,
order or agreement issued or entered into under any
Environmental Law.
(ix) No underground storage tanks are present on
the properties owned or operated by either Eurostar or any
Eurostar U.S. Subsidiary and, to the Knowledge of Eurostar,
any underground storage tanks previously removed from any
properties owned or operated by either Eurostar or any
Eurostar U.S. Subsidiary were removed in accordance with
applicable Environmental Laws.
(x) To the Knowledge of Eurostar, all prior
operations conducted by Eurostar or any Eurostar Subsidiary
have been conducted in compliance with all applicable
limitations, restrictions, conditions, standards,
prohibitions, requirements and obligations established under
applicable Environmental Laws.
(l) No Severance Payments. None of Eurostar or the
Eurostar Subsidiaries will owe a severance payment or similar
obligation to any of their respective employees, officers or directors
as a result of the Merger or the transactions contemplated by this
Agreement, nor will any of such persons be entitled to an increase in
severance payments or other benefits as a result of the Merger or the
transactions contemplated by this Agreement in the event of the
subsequent termination of their employment.
(m) Voting Requirements. The consent of the holders of
at least a majority of the outstanding shares of Eurostar Common Stock
is the only action of the holders of any class or series of the
capital stock of Eurostar necessary to approve this Agreement and the
Merger.
(n) Insurance. The Eurostar Disclosure Letter sets forth
all policies of insurance in effect as of the Effective Date relating
to the business or operations of Eurostar and the Eurostar
Subsidiaries.
(o) Title to Property. Eurostar and each of the Eurostar
Subsidiaries have good and indefeasible title to all of their
respective real properties purported to be owned in fee and good title
to all their respective other material assets, free and clear of all
mortgages, liens, charges and encumbrances other than Permitted Liens.
2.3 Representations and Warranties of Tristar. Tristar hereby
represents and warrants to Eurostar that, except as set forth in the
Preliminary Proxy Statement or in the disclosure letter delivered by Tristar to
Eurostar on the Date Hereof (the "Tristar Disclosure Letter") that as of the
Effective Date:
(a) Organization and Compliance with Law. Tristar and
each of its subsidiaries (the "Tristar Subsidiaries") is a corporation
duly organized, validly existing and in good standing under the laws
of the jurisdiction in which it is organized and has all requisite
corporate power and authority and all necessary governmental
authorizations to own, lease and operate all of its properties and
assets and to carry on its business as now being conducted, except
where the failure to have such governmental authority would not,
either individually or in the aggregate, have a Material Adverse
Effect. Tristar and each of the Tristar Subsidiaries is duly
qualified as a foreign corporation to do business, and is in good
standing, in each jurisdiction in which the property owned, leased or
operated by it or the nature of the business conducted by it makes
such qualification necessary, except in such jurisdictions where the
failure to be duly qualified does not
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and would not, either individually or in the aggregate, have a
Material Adverse Effect. Tristar and each of the Tristar Subsidiaries
is in compliance with all applicable laws, judgments, orders, rules
and regulations, domestic and foreign, except where failure to be in
such compliance would not, either individually or in the aggregate,
have a Material Adverse Effect. Neither Tristar nor any of the
Tristar Subsidiaries, nor any employee or, to the Knowledge of
Tristar, any agent of Tristar or any of the Tristar Subsidiaries, has
made any payment or transfer of funds or assets to any person or
conferred any benefit on any person or received any funds, assets or
personal benefit in violation of any applicable law, rule or
regulation. Tristar has heretofore delivered to Eurostar true and
complete copies of the certificate or articles of incorporation and
bylaws of Tristar and each Tristar Subsidiary. The Tristar Disclosure
Letter sets forth each of the Tristar Subsidiaries and their
respective jurisdictions of incorporation.
(b) Capitalization.
(i) The authorized capital stock of Tristar
consists of 10,000,000 shares of Tristar Common Stock, par
value $.01 per share, and 1,000,000 shares of preferred stock,
par value $.05 per share. As of June 15, 1995, there were
issued and outstanding 6,648,996 shares of Tristar Common
Stock and no shares of preferred stock, and no shares of
Tristar Common Stock were held as treasury shares. As of June
15, 1995, there were reserved for issuance 2,666,634 shares of
Tristar Common Stock pursuant to the stock option plan and
warrants described in Section 2.3(b)(ii). All issued shares
of Tristar Common Stock are validly issued, fully paid and
nonassessable and no holder thereof is entitled to preemptive
rights. Tristar is not a party to, and has no Knowledge of,
any voting agreement, voting trust or similar agreement or
arrangement relating to any class or series of its capital
stock, or any agreement or arrangement providing for
registration rights with respect to any capital stock or other
securities of Tristar. All outstanding shares of capital
stock of the Tristar Subsidiaries are owned by Tristar free
and clear of all liens, charges, encumbrances, adverse claims
and options of any nature.
(ii) As of the Effective Date, there are
outstanding options (the "Tristar Options") issued to
employees and directors to purchase an aggregate of 200,428
shares of Tristar Common Stock under Tristar's 1991 Stock
Option Plan; 66,206 shares of Tristar Common Stock under a
Nonqualified Stock Option Agreement and outstanding warrants
issued to affiliates of Eurostar to purchase an aggregate of
2,400,000 shares of Tristar Common Stock (the "Tristar
Warrants"). Other than as set forth in this Section 2.3(b),
there are not as of the Effective Date, and at the Effective
Time there will not be, any (A) shares of capital stock or
other equity securities of Tristar outstanding (other than
Tristar Common Stock issued pursuant to the exercise of
Tristar Options or Tristar Warrants as described herein) or
(B) outstanding options, warrants, scrip, rights to subscribe
for, calls or commitments of any character whatsoever relating
to, or securities or rights convertible into or exchangeable
for, shares of any class of capital stock of Tristar, or
contracts, understandings or arrangements to which Tristar is
a party, or by which it is or may be bound, to issue
additional shares of its capital stock or options, warrants,
scrip or rights to subscribe for, or securities or rights
convertible into or exchangeable for, any additional shares of
its capital stock.
(c) Authorization and Validity of Agreement. Tristar has
all requisite corporate power and authority to enter into this
Agreement and to perform its obligations hereunder. The execution and
delivery by Tristar of this Agreement and the consummation by it of
the transactions contemplated hereby have been duly authorized by all
necessary corporate action (subject only, with respect to the Merger,
to adoption of this Agreement by its stockholders as provided for in
Section 5.2). On or prior to the Date Hereof, the Board of Directors
of Tristar and the Acquisition Committee of the Board of Directors of
Tristar have determined to recommend approval of the Merger to the
stockholders of Tristar, and such determination is in effect as of the
Date Hereof. This Agreement has been duly executed and delivered by
Tristar and is the valid and binding obligation of Tristar,
enforceable against Tristar in accordance with its terms, except as
such enforceability may be limited or affected by (i) bankruptcy,
insolvency, reorganization, moratorium, liquidation, arrangement,
fraudulent transfer, fraudulent conveyance
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and other similar laws (including court decisions) now or hereafter in
effect and affecting the rights and remedies of creditors generally or
providing for the relief of debtors, (ii) the refusal of a particular
court to grant equitable remedies, including, without limitation,
specific performance and injunctive relief, and (iii) general
principles of equity (regardless of whether such remedies are sought
in a proceeding in equity or at law) and except as the enforceability
of any indemnification provision contained in this Agreement may be
limited by applicable federal or state securities laws.
(d) No Approvals or Notices Required; No Conflict with
Instruments to which Tristar or any of the Tristar Subsidiaries is a
Party. Neither the execution and delivery of this Agreement nor the
performance by Tristar of its obligations hereunder, nor the
consummation of the transactions contemplated hereby by Tristar, will
(i) conflict with the Certificate of Incorporation or bylaws of
Tristar or the charter or bylaws of any of the Tristar Subsidiaries;
(ii) assuming satisfaction of the requirements set forth in clause
(iii) below, violate any provision of law applicable to Tristar or any
of the Tristar Subsidiaries; (iii) except for (A) requirements of
Federal and state securities law, and (B) the filing of a certificate
of merger in accordance with the DGCL, require any consent or approval
of, or filing with or notice to, any public body or authority,
domestic or foreign, under any provision of law applicable to Tristar
or any of the Tristar Subsidiaries; or (iv) require any consent,
approval or notice under, or violate, breach, be in conflict with or
constitute a default (or an event that, with notice or lapse of time
or both, would constitute a default) under, or permit the termination
of any provision of, or result in the creation or imposition of any
lien upon any properties, assets or business of Tristar or any of the
Tristar Subsidiaries under, any note, bond, indenture, mortgage, deed
of trust, lease, franchise, permit, authorization, license, contract,
instrument or other agreement or commitment or any order, judgment or
decree to which Tristar or any of the Tristar Subsidiaries is a party
or by which Tristar or any of the Tristar Subsidiaries or any of its
or their respective assets or properties are bound or encumbered,
except those that have already been given, obtained or filed and
except in any of the cases enumerated in clauses (ii) through (iv),
those that, in the aggregate, would not have a Material Adverse
Effect.
(e) Commission Filings; Financial Statements. Since
August 31, 1991, Tristar and each of the Tristar Subsidiaries have
filed all reports, registration statements and other filings, together
with any amendments required to be made with respect thereto, that
they have been required to file with the Commission under the
Securities Act and the Exchange Act. All reports, registration
statements and other filings (including all notes, exhibits and
schedules thereto and documents incorporated by reference therein)
filed by Tristar with the Commission since August 31, 1991 through the
Date Hereof, together with any amendments thereto, are sometimes
collectively referred to as the "Tristar Commission Filings". Tristar
has heretofore delivered to Eurostar copies of the Tristar Commission
Filings. As of the respective dates of their filing with the
Commission, except as otherwise disclosed in later filings with the
Commission, the Tristar Commission Filings complied, and the Proxy
Statement (as defined in Section 5.1) (except with respect to
information concerning Eurostar and the Eurostar Subsidiaries
furnished by or on behalf of Eurostar to Tristar specifically for use
therein) will comply, in all material respects with the Securities
Act, the Exchange Act and the rules and regulations of the Commission
promulgated thereunder, and did not or will not, as the case may be,
contain any untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary to make the
statements made therein, in light of the circumstances under which
they were made, not misleading.
All material contracts of Tristar and the Tristar Subsidiaries
have been included in the Tristar Commission Filings, except for those
contracts not required to be filed pursuant to the rules and
regulations of the Commission, and copies of all such contracts have
been made available to Eurostar.
Each of the consolidated financial statements (including any
related notes or schedules) included in the Tristar Commission Filings
was, and each of the consolidated financial statements to be included
in the Proxy Statement (except for those financial statements of
Eurostar and the Eurostar Subsidiaries furnished by or on behalf of
Eurostar to Tristar specifically for use therein)
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will be, prepared in accordance with generally accepted accounting
principles applied on a consistent basis (except as may be noted
therein or in the notes or schedules thereto), and fairly presents or
will fairly present, as the case may be, the consolidated financial
position of Tristar and the Tristar Subsidiaries as of the dates
thereof and the statements of income, cash flows (or changes in
financial position prior to the approval of Statement of Financial
Accounting Standards Number 95) and stockholders' equity for the
periods then ended (subject, in the case of the unaudited interim
financial statements, to normal year-end audit adjustments on a basis
comparable with past periods in accordance with generally accepted
accounting principles). As of the Date Hereof, Tristar has no
material liabilities, absolute or contingent, not reflected in the
Tristar Commission Filings, except for (i) liabilities not required
under generally accepted accounting principles to be reflected on such
financial statements or the notes thereto and (ii) liabilities
incurred in the ordinary course of business since May 31, 1995,
consistent with past operations and not relating to the borrowing of
money.
(f) Conduct of Business in the Ordinary Course; Absence
of Certain Changes and Events. Since February 28, 1995, except as
contemplated by this Agreement or disclosed in the Tristar Commission
Filings filed with the Commission since that date, Tristar and the
Tristar Subsidiaries have conducted their business only in the
ordinary and usual course, and there has not been (i) any Material
Adverse Change in Tristar or any condition, event or development that
reasonably may be expected to result in any such Material Adverse
Change; (ii) any change by Tristar in its accounting methods,
principles or practices; (iii) any revaluation by Tristar or any of
the Tristar Subsidiaries of any of its or their assets, including,
without limitation, writing down the value of inventory or writing off
notes or accounts receivable other than in the ordinary course of
business; (iv) any entry by Tristar or any of the Tristar Subsidiaries
into any commitment or transaction material to Tristar and the Tristar
Subsidiaries, taken as a whole; (v) any declaration, setting aside or
payment of any dividends or distributions in respect of the Tristar
Common Stock or any redemption, purchase or other acquisition of any
of its securities or any securities of any of the Tristar
Subsidiaries; (vi) any damage, destruction or loss (whether or not
covered by insurance) materially adversely affecting the properties or
business of Tristar and the Tristar Subsidiaries, taken as a whole;
(vii) any increase in excess of $100,000 in indebtedness for borrowed
money; (viii) any granting of a security interest or lien on any
material property or assets of Tristar and the Tristar Subsidiaries,
taken as a whole, other than Permitted Liens; or (ix) any increase in
or establishment of any bonus, insurance, severance, deferred
compensation, pension, retirement, profit sharing, stock option
(including, without limitation, the granting of stock options, stock
appreciation rights, performance awards or restricted stock awards),
stock purchase or other employee benefit plan or any other increase in
the compensation payable or to become payable to any officers or key
employees of Tristar or any of the Tristar Subsidiaries.
(g) Certain Fees. With the exception of the engagement
of Howard Frazier Barker Elliott by Tristar, neither Tristar nor any
of its officers, directors or employees, on behalf of Tristar or any
of the Tristar Subsidiaries or its or their respective Boards of
Directors (or any committee thereof), has employed any financial
advisor, broker or finder or incurred any liability for any financial
advisory, brokerage or finders' fees or commissions in connection with
the transactions contemplated hereby.
(h) Litigation. Except as disclosed in the Tristar
Commission Filings, there are no claims, actions, suits,
investigations or proceedings pending or, to the Knowledge of Tristar
or any of the Tristar Subsidiaries, threatened against or affecting
Tristar or any of the Tristar Subsidiaries or any of their respective
properties at law or in equity, or any of their respective employee
benefit plans or fiduciaries of such plans, or before or by any
federal, state, municipal or other governmental agency or authority,
or before any arbitration board or panel, wherever located, that
individually or in the aggregate if adversely determined would have a
Material Adverse Effect, or that involve the risk of criminal
liability.
(i) Employee Benefit Plans. The Tristar Disclosure
Letter sets forth a complete and accurate list of:
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(i) each "employee welfare benefit plan" (as such
term is defined in Section 3(1) of ERISA) (the "Tristar
Welfare Plans");
(ii) each "employee pension benefit plan" (as such
term is defined in Section 3(2) of ERISA) (the "Tristar
Pension Plans"); and
(iii) 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 (collectively, with the
Tristar Welfare Plans and the Tristar Pension Plans, the
"Tristar Benefit Plans"),
that were in effect as of the Effective Date or were maintained within
three years of the Closing Date, or were approved before this date but
are not yet effective, for the benefit of directors, officers,
employees or former employees (or their beneficiaries) of Tristar, any
of the Tristar Subsidiaries or 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 Tristar or any of the Tristar Subsidiaries is a
member (collectively, the "Tristar Group"). Tristar has provided to
Eurostar, as to each Tristar Benefit Plan, as applicable, access to a
complete and accurate copy of (i) such plan, agreement or arrangement;
(ii) the trust, group annuity contract or other document that provides
the funding for such plan; (iii) the 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 any summary of material
modifications prepared after each such summary plan description; (vi)
the most recent IRS determination letter and all rulings or
determinations requested from the IRS subsequent to the date of such
determination letter; and (vii) all other pending correspondence from
the IRS or the Department of Labor received by any member of the
Tristar Group that relates to such plan.
Each Tristar Welfare Plan and each Tristar Pension Plan (i) is
in compliance with ERISA, including, but not limited to, all reporting
and disclosure requirements of Part 1 of Subtitle B of Title I of
ERISA, except where the failure to be in compliance would not, either
individually or in the aggregate, have a Material Adverse Effect; (ii)
is in compliance with the Code, except where the failure to be in
compliance would not, either individually or in the aggregate, have a
Material Adverse Effect; (iii) has had the appropriate Form 5500
timely filed for any Tristar Pension Plan for each year of its
existence and for any Tristar Welfare Plan for each year of its
existence after 1987; (iv) has not engaged in any transaction
described in Section 406 or 407 of ERISA or Section 4975 of the Code
unless it received an exemption under Section 408 of ERISA or Section
4975 of the Code, as applicable, or unless such transaction has been
corrected and all applicable excise taxes paid or waived; (v) has at
all times complied with the bonding requirements of Section 412 of
ERISA; (vi) has no issue pending (other than the payment of benefits
in the normal course or the qualification of the plan pursuant to an
application pending before the IRS) nor any issue resolved adversely
to the Tristar Group that may subject the Tristar Group to the payment
of a penalty, interest, tax or other amount; and (vii) can be
unilaterally terminated or amended on no more than 90 days' notice.
No notice has been received by the Tristar Group of an increase or
proposed increase in any premium relative to any Tristar Benefit Plan,
and no amendment to any Tristar Benefit Plan within the last twelve
months has increased the rate of employer contributions thereunder.
Each Tristar Benefit Plan that is intended to be a voluntary
employee benefit association has been submitted to and approved by the
IRS as exempt from federal income tax under Section 501(c)(9) of the
Code, or the applicable submission period relating to any such plan
will not have ended prior to the Closing. No Tristar Benefit Plan
will cause the Tristar Group to have liability for severance pay as a
result of this Agreement. The Tristar Group does not provide employee
post-retirement medical or health coverage or contribute to or
maintain any employee welfare benefit plan that provides for health
benefit coverage following termination of employment except as
required by Section 4980B(f) of the Code or other applicable statute,
nor
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has the Tristar Group made any representations, agreements, covenants
or commitments to provide that coverage. All group health plans
maintained by the Tristar Group have been operated in compliance with
Section 4980B(f) of the Code.
Except for each Tristar Pension Plan that is an ERISA top-hat
plan, each Tristar Pension Plan has been submitted to and approved as
qualifying under Section 401(a) of the Code by the IRS or the
applicable remedial amendment period relating to such plan will not
have ended prior to the Closing. No facts have occurred which, if
known by the IRS, could cause disqualification of any Tristar Pension
Plan. Each Tristar Pension Plan to which Section 412 of the Code is
applicable fully complies 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 such plan.
The Tristar Group has paid all premiums (including interest, charges
and penalties for late payment) due the PBGC with respect to each
Tristar Pension Plan for which premiums are required. No Tristar
Pension Plan has been terminated under circumstances that would result
in liability to the PBGC or the Tristar Group. There has been no
"reportable event" (as defined in Section 4043(b) of ERISA and the
regulations under that Section) with respect to any Tristar Pension
Plan subject to Title IV of ERISA. With respect to each Tristar
Pension Plan, the Tristar Group has not (i) ceased operations at a
facility so as to become subject to the provisions of Section 4062(e)
of ERISA, (ii) withdrawn as a substantial employer so as to become
subject to the provisions of Section 4063 of ERISA or (iii) ceased
making contributions on or before the Closing Date to any such plan
subject to Section 4064(a) of ERISA to which the Tristar Group made
contributions at any time during the six years prior to the Closing
Date. Neither the Tristar Group nor any member thereof has 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.
(j) Taxes. All Tax Returns of or relating to any Taxes
that are required to be filed on or before the Closing Date by or with
respect to Tristar or any of the Tristar Subsidiaries, or any other
corporation that is or was a member of an affiliated group (within the
meaning of Section 1504(a) of the Code) of corporations of which
Tristar was a member for any period ending on or prior to the Closing
Date, have been or will be duly and timely filed (including any
applicable extensions), and all Taxes, including interest and
penalties, due and payable pursuant to such Tax Returns have been paid
or adequately provided for in reserves established by Tristar, except
where the failure to file, pay or provide for would not, either
individually or in the aggregate, have a Material Adverse Effect. All
Tax Returns of or with respect to Tristar or any of the Tristar
Subsidiaries have been audited by the applicable governmental
authority, or the applicable statute of limitations has expired, for
all periods up to and including the tax year ended August 31, 1986.
There is no material claim against Tristar or any of the Tristar
Subsidiaries with respect to any Taxes, and no material assessment,
deficiency or adjustment has been asserted or proposed with respect to
any Tax Return of or with respect to Tristar or any of the Tristar
Subsidiaries that has not been adequately provided for in reserves
established by Tristar. The total amounts set up as liabilities for
current and deferred Taxes in the balance sheet dated February 28,
1995, included in the Tristar Commission Filings have been prepared in
accordance with generally accepted accounting principles and are
sufficient to cover the payment of all material Taxes, including any
penalties or interest thereon and whether or not assessed or disputed,
that are, or are hereafter found to be, or to have been, due with
respect to the operations of Tristar and the Tristar Subsidiaries
through the periods covered thereby.
(k) Environmental. Except for such matters which would
not, individually or in the aggregate, have a Material Adverse Effect:
(i) Neither Tristar nor any Tristar Subsidiary
has caused or, to the Knowledge of Tristar, permitted the
release or disposal of Hazardous Materials onto, at or near
any property owned or operated by Tristar or any Tristar
Subsidiary.
(ii) To the Knowledge of Tristar, neither Tristar
nor any Tristar Subsidiary has caused or allowed the
generation, use, treatment, storage or disposal of Hazardous
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Materials in connection with any business or other operations
conducted by Tristar or any Tristar Subsidiary except in
accordance with all applicable Environmental Laws.
(iii) To the Knowledge of Tristar, Tristar and the
Tristar Subsidiaries have obtained and are in substantial
compliance with all Environmental Permits required with
respect to the business or other operations conducted by
Tristar or any Tristar Subsidiary.
(iv) To the Knowledge of Tristar, Tristar and the
Tristar Subsidiaries have filed all reports required by
Environmental Laws.
(v) Tristar and the Tristar Subsidiaries have
provided Eurostar access to all environmental audits or
assessments prepared by or for, or received by, Tristar or any
Tristar Subsidiary with respect to any business or other
operations conducted by Tristar or any Tristar Subsidiary.
(vi) Tristar has no Knowledge of any facts,
conditions or circumstances that could cause Tristar or any
Tristar Subsidiary to incur any loss, liability, damage, costs
or expenses, with respect to any individual event, in excess
of $50,000, or in the aggregate in excess of $250,000, for (A)
violations of Environmental Laws, (B) failure to obtain an
Environmental Permit, (C) response or remedial costs under any
Environmental Law or (D) personal injury or property damage
resulting from exposure to or releases of Hazardous Materials.
(vii) Neither Tristar nor any Tristar Subsidiary
has received any inquiry or notice, nor does Tristar have any
reason to suspect or believe any of them will receive any
inquiry or notice, of any actual or potential proceeding,
claim, lawsuit or loss that arises under or relates to any
Environmental Law.
(viii) Neither Tristar nor any Tristar Subsidiary is
currently operating or required to be operating under any
compliance order, schedule, decree or agreement, any consent
decree, order or agreement, or any corrective action decree,
order or agreement issued or entered into under any
Environmental Law.
(ix) No underground storage tanks are present on
the properties owned or operated by either Tristar or any
Tristar Subsidiary and, to the Knowledge of Tristar, any
underground storage tanks previously removed from any
properties owned or operated by either Tristar or any Tristar
Subsidiary were removed in accordance with applicable
Environmental Laws.
(x) To the Knowledge of Tristar, all prior
operations conducted by Tristar or any Tristar Subsidiary have
been conducted in compliance with all applicable limitations,
restrictions, conditions, standards, prohibitions,
requirements and obligations established under applicable
Environmental Laws.
(l) No Severance Payments. None of Tristar or the
Tristar Subsidiaries will owe a severance payment or similar
obligation to any of their respective employees, officers or directors
as a result of the Merger or the transactions contemplated by this
Agreement, nor will any of such persons be entitled to an increase in
severance payments or other benefits as a result of the Merger or the
transactions contemplated by this Agreement in the event of the
subsequent termination of their employment.
(m) Voting Requirements. The consent of the holders of
at least 66 2/3% of the outstanding shares of Tristar Common Stock is
the only action of the holders of any class or series of the capital
stock of Tristar necessary to approve this Agreement and the Merger.
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(n) Insurance. The Tristar Disclosure Letter sets forth
all policies of insurance in effect as of the Effective Date relating
to the business or operations of Tristar and the Tristar Subsidiaries.
(o) Title to Property. As set forth in the Tristar
Commission Filings, Tristar and each of the Tristar Subsidiaries have
good and indefeasible title to all of their real properties purported
to be owned in fee and good title to all their other material assets,
free and clear of all mortgages, liens, charges and encumbrances other
than Permitted Liens.
ARTICLE III
COVENANTS OF EUROSTAR PRIOR TO THE EFFECTIVE TIME
3.1 Conduct of Business by Eurostar Pending the Merger. Eurostar
covenants and agrees that, from the Effective Date of this Agreement until the
Effective Time, unless Tristar shall otherwise provide its prior consent in
writing (which consent shall not be unreasonably withheld) or as disclosed in
the Eurostar Disclosure Letter or the Preliminary Proxy Statement or as
otherwise expressly contemplated by this Agreement:
(a) The business of Eurostar and the Eurostar
Subsidiaries shall be conducted only in, and Eurostar and the Eurostar
Subsidiaries shall not take any action except in, the ordinary course
of business and consistent with past practice;
(b) Eurostar shall not, and shall not permit any of the
Eurostar Subsidiaries to:
(i) split, combine or reclassify any outstanding
capital stock of Eurostar or any of the Eurostar Subsidiaries,
or authorize, declare, set aside or pay any dividend payable
in cash, stock, property or otherwise in respect of the
capital stock of Eurostar or any of the Eurostar Subsidiaries;
(ii) authorize or pay any extraordinary bonuses
to employees;
(iii) grant any stock options or rights to acquire
Eurostar Common Stock or common stock of any of the Eurostar
Subsidiaries to any person or entity;
(iv) authorize or issue, sell, pledge, dispose of
or encumber any shares of capital stock of Eurostar or any of
the Eurostar Subsidiaries;
(v) other than in the ordinary course of business
and consistent with past practice and not relating to the
borrowing of money, sell, pledge, dispose of or encumber any
assets of Eurostar or any of the Eurostar Subsidiaries;
(vi) redeem, purchase, acquire or offer to acquire
any shares of Eurostar Common Stock or common stock of any of
the Eurostar Subsidiaries;
(vii) enter into or grant any material change in
compensation, benefit, severance, consulting or stay-bonus
arrangements applicable to employees generally or applicable
to any employee with an annual salary in excess of $50,000;
(viii) acquire any corporation, partnership, other
business organization or division thereof;
(ix) enter into any contract, agreement,
commitment or arrangement other than in the ordinary course of
business and consistent with past practice;
(x) other than capital expenditures in the
ordinary course of business and consistent with past practice,
authorize any single capital expenditure (including any
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single capital lease) that is in excess of $25,000 or capital
expenditures (including capital leases) that are, in the
aggregate, in excess of $250,000;
(xi) amend or propose to amend the charter or
bylaws of Eurostar or any of the Eurostar Subsidiaries; or
(xii) take, and Eurostar shall use its reasonable
efforts to prevent any affiliate of Eurostar from taking, any
action that would prevent, with the passage of time, the
Merger's qualification for accounting treatment similar to
"pooling of interests" accounting treatment or prevent the
Merger from being treated for federal income tax purposes as a
reorganization within the meaning of Section 368(a) of the
Code.
(c) Eurostar shall use its reasonable efforts (i) to
preserve intact the business organization of Eurostar and each of the
Eurostar Subsidiaries, (ii) to maintain in effect any franchises,
authorizations or similar rights of Eurostar and each of the Eurostar
Subsidiaries, (iii) to keep available the services of the current
officers and key employees of Eurostar and each of the Eurostar
Subsidiaries, (iv) to preserve its goodwill with those having business
relationships with Eurostar and the Eurostar Subsidiaries, (v) to
maintain and keep the properties of Eurostar and each of the Eurostar
Subsidiaries in as good a repair and condition as exists on the
Effective Date, except for deterioration due to ordinary wear and tear
and damage due to casualty; and (vi) to maintain in full force and
effect insurance comparable in amount and scope of coverage to that
maintained on the Effective Date by Eurostar and each of the Eurostar
Subsidiaries;
(d) Eurostar shall, and shall cause the Eurostar
Subsidiaries to, perform their respective obligations under any
contracts and agreements to which any of them is a party or to which
any of their assets is subject, except to the extent such failure to
perform would not have a Material Adverse Effect on Eurostar, and
except for such obligations as Eurostar or the Eurostar Subsidiaries
in good faith may dispute; and
(e) Eurostar shall not, and shall not permit any of the
Eurostar Subsidiaries to, take any action that would, or that
reasonably could be expected to, result in any of the representations
and warranties set forth in this Agreement becoming untrue. Eurostar
promptly shall advise Tristar orally and in writing of any change or
event having, or which, insofar as reasonably can be foreseen, would
have, a Material Adverse Effect on Eurostar.
3.2 Access to Information; Confidentiality. From the Effective
Date to the Effective Time, Eurostar shall, and shall cause the Eurostar
Subsidiaries and its and their officers, directors, employees and
representatives to, afford the representatives of Tristar complete access
during normal business hours to its officers, employees, representatives,
properties, books and records, and shall furnish Tristar all financial,
operating and other data and information as Tristar, through its
representatives, reasonably may request.
Eurostar agrees to hold in confidence, and not to disclose to others
for any reason whatsoever, any non-public information received by it, any of
the Eurostar Subsidiaries or its or their representatives in connection with
the transactions contemplated hereby except (i) as required by law; (ii) for
disclosure to officers, directors, employees, representatives, shareholders and
affiliates of Eurostar and the Eurostar Subsidiaries as necessary in connection
with the transactions and filings contemplated hereby or as necessary to the
operation of Eurostar's business; and (iii) for information which becomes
publicly available other than through Eurostar. If the Merger is not
consummated, Eurostar will return all non-public documents and other material
obtained from Tristar, the Tristar Subsidiaries or its or their representatives
in connection with the transactions contemplated hereby, and all copies,
summaries and extracts thereof, or certify to Tristar that such information has
been destroyed.
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ARTICLE IV
COVENANTS OF TRISTAR PRIOR TO THE EFFECTIVE TIME
4.1 Conduct of Business by Tristar Pending the Merger. Tristar
covenants and agrees that, from the Effective Date of this Agreement until the
Effective Time, unless Eurostar shall otherwise provide its prior consent in
writing (which consent shall not be unreasonably withheld) or as disclosed in
the Tristar Disclosure Letter or the Preliminary Proxy Statement or as
otherwise expressly contemplated by this Agreement:
(a) The business of Tristar and the Tristar Subsidiaries
shall be conducted only in, and Tristar and the Tristar Subsidiaries
shall not take any action except in, the ordinary course of business
and consistent with past practice;
(b) Tristar shall not, and shall not permit any of the
Tristar Subsidiaries to:
(i) split, combine or reclassify any outstanding
capital stock of Tristar or Sub, or authorize, declare, set
aside or pay any dividend payable in cash, stock, property or
otherwise in respect of the capital stock of Tristar or any of
the Tristar Subsidiaries;
(ii) authorize or pay any extraordinary bonuses
to employees;
(iii) grant any stock options or rights to acquire
Tristar Common Stock or common stock of any of the Tristar
Subsidiaries to any person or entity, other than options to
purchase Tristar Common Stock issued pursuant to employee
stock option plans in amounts consistent with past practice;
(iv) authorize or issue, sell, pledge, dispose of
or encumber any shares of capital stock of Tristar or any of
the Tristar Subsidiaries except pursuant to the Tristar
Options and other than as contemplated by this Agreement;
(v) other than in the ordinary course of business
and consistent with past practice and not relating to the
borrowing of money, sell, pledge, dispose of or encumber any
assets of Tristar or any of the Tristar Subsidiaries;
(vi) redeem, purchase, acquire or offer to acquire
any shares of Tristar Common Stock or common stock of any of
the Tristar Subsidiaries;
(vii) enter into or grant any material change in
compensation, benefit, severance, consulting or stay-bonus
arrangements applicable to employees generally or applicable
to any employee with an annual salary in excess of $50,000;
(viii) acquire any corporation, partnership, other
business organization or division thereof;
(ix) enter into any contract, agreement,
commitment or arrangement other than in the ordinary course of
business and consistent with past practice;
(x) other than capital expenditures in the
ordinary course of business and consistent with past practice,
authorize any single capital expenditure (including any single
capital lease) that is in excess of $25,000 or capital
expenditures (including capital leases) that are, in the
aggregate, in excess of $250,000;
(xi) amend or propose to amend the charter or
bylaws of Tristar or Sub; or
(xii) take, and Tristar shall use its reasonable
efforts to prevent any affiliate of Tristar from taking, any
action that would prevent, with the passage of time, the
Merger's qualification for accounting treatment similar to
"pooling of interests"
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accounting treatment or prevent the Merger from being treated for
federal income tax purposes as a reorganization within the meaning of
Section 368(a) of the Code.
(c) Tristar shall use its reasonable efforts (i) to
preserve intact the business organization of Tristar and each of the
Tristar Subsidiaries, (ii) to maintain in effect any franchises,
authorizations or similar rights of Tristar and each of the Tristar
Subsidiaries, (iii) to keep available the services of the current
officers and key employees of Tristar and each of the Tristar
Subsidiaries, (iv) to preserve its goodwill with those having business
relationships with Tristar and the Tristar Subsidiaries, (v) to
maintain and keep the properties of Tristar and each of the Tristar
Subsidiaries in as good a repair and condition as exists on the
Effective Date, except for deterioration due to ordinary wear and tear
and damage due to casualty; and (vi) to maintain in full force and
effect insurance comparable in amount and scope of coverage to that
maintained on the Effective Date by Tristar and each of the Tristar
Subsidiaries;
(d) Tristar shall, and shall cause the Tristar
Subsidiaries to, perform their respective obligations under any
contracts and agreements to which any of them is a party or to which
any of their assets is subject, except to the extent such failure to
perform would not have a Material Adverse Effect on Tristar, and
except for such obligations as Tristar or the Tristar Subsidiaries in
good faith may dispute; and
(e) Tristar shall not, and shall not permit any of the
Tristar Subsidiaries to, take any action that would, or that
reasonably could be expected to, result in any of the representations
and warranties set forth in this Agreement becoming untrue. Tristar
promptly shall advise Eurostar orally and in writing of any change or
event having, or which, insofar as reasonably can be foreseen, would
have, a Material Adverse Effect on Tristar.
4.2 Access to Information; Confidentiality. From the Effective
Date to the Effective Time, Tristar shall, and shall cause the Tristar
Subsidiaries and its and their officers, directors, employees and
representatives to, afford the representatives of Eurostar complete access
during normal business hours to its officers, employees, representatives,
properties, books and records, and shall furnish Eurostar all financial,
operating and other data and information as Eurostar, through its
representatives, reasonably may request.
Tristar agrees to hold in confidence all, and not to disclose to
others for any reason whatsoever, any non- public information received by it,
any of the Tristar Subsidiaries or its or their representatives in connection
with the transactions contemplated hereby except (i) as required by law; (ii)
for disclosure to officers, directors, employees and representatives of Tristar
and the Tristar Subsidiaries as necessary in connection with the transactions
and filings contemplated hereby or as necessary to the operation of Tristar's
business; and (iii) for information which becomes publicly available other than
through Tristar. If the Merger is not consummated, Tristar will return all
non- public documents and other material obtained from Eurostar, the Eurostar
Subsidiaries or its or their representatives in connection with the
transactions contemplated hereby, and all copies, summaries and extracts
thereof, or certify to Eurostar that such information has been destroyed.
4.3 NASDAQ/NMS Listing. Tristar shall use its reasonable efforts
to cause the shares of Tristar Common Stock to be issued upon consummation of
the Merger to be approved for listing on the NASDAQ/National Market System,
subject to official notice of issuance, prior to the Closing Date.
ARTICLE V
ADDITIONAL AGREEMENTS
5.1 Proxy Statement. Prior to execution of this Agreement,
Tristar prepared and filed with the Commission the preliminary proxy statement
(the "Preliminary Proxy Statement") of Tristar relating to the Merger, and as
promptly as practicable after the execution of this Agreement, Tristar shall
prepare and file with the Commission a definitive proxy statement (the "Proxy
Statement") of Tristar relating to the Merger. Subject to the terms and
conditions set forth in Article VI, the Proxy Statement shall contain
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a statement that the Board of Directors of Tristar and the Acquisition
Committee of the Board of Directors of Tristar recommended that the
stockholders of Tristar approve and adopt the Merger and this Agreement.
5.2 Approval of Stockholders. Tristar shall promptly take all
action reasonably necessary in accordance with the DGCL and its Certificate of
Incorporation and bylaws to obtain the approval and adoption of the Merger and
this Agreement from Tristar stockholders holding at least 66 2/3% of the
Tristar Common Stock. Subject to the terms and conditions set forth in Article
VI, the Board of Directors of Tristar (i) shall recommend to the stockholders
of Tristar to adopt and approve the Merger and this Agreement and (ii) shall
take all action reasonably necessary to obtain the approval and adoption of the
Merger and this Agreement from Tristar stockholders holding at least 66 2/3%
of the Tristar Common Stock.
5.3 Filings; Consents; Reasonable Efforts. Subject to the terms
and conditions of this Agreement, Tristar and Eurostar shall (i) make all
necessary filings with respect to the Merger and this Agreement under the
Securities Act, the Exchange Act and applicable blue sky or similar securities
laws and shall use its reasonable efforts to obtain required approvals and
clearances with respect thereto; (ii) use its reasonable efforts to obtain all
consents, waivers, approvals, authorizations and orders required in connection
with the authorization, execution and delivery of this Agreement and the
consummation of the Merger; and (iii) take, or use its reasonable efforts to
cause to be taken, all appropriate action, and do, or cause to be done, all
things necessary, proper or advisable to satisfy or cause to be satisfied all
conditions precedent under this Agreement and to consummate and make effective
as promptly as practicable the transactions contemplated by this Agreement.
5.4 Notification of Certain Matters. Tristar shall give prompt
notice to Eurostar, and Eurostar shall give prompt notice to Tristar, orally
and in writing, of (i) the occurrence, or failure to occur, of any event which
occurrence or failure would be likely to cause any representation or warranty
contained in this Agreement to be untrue or inaccurate at any time from the
Effective Date to the Effective Time, (ii) any material failure of Tristar or
Eurostar, as the case may be, or any officer, director, employee or agent
thereof, to comply with or satisfy any covenant, condition or agreement to be
complied with or satisfied by it hereunder, and (iii) any fact or event that
would make it necessary to amend the Proxy Statement or to render the
statements therein not misleading or to comply with applicable law.
5.5 Agreement to Defend. In the event any claim, action, suit,
investigation or other proceeding by any governmental body or other person or
other legal or administrative proceeding is commenced that questions the
validity or legality of the transactions contemplated hereby or seeks damages
in connection therewith, whether before or after the Effective Time, the
parties hereto agree to cooperate and use their reasonable efforts to defend
against and respond thereto.
5.6 Expenses. All costs and expenses incurred in connection with
this Agreement and the transactions contemplated hereby shall be paid by the
party incurring such expenses.
5.7 Indemnity. Parent shall indemnify and hold harmless Tristar
from and against all damages, costs and expenses (including reasonable
attorneys' fees and costs of investigation) arising out of any breach of any of
the representations, warranties or covenants of Eurostar or Parent in this
Agreement to the extent such damages, costs and expenses exceed in the
aggregate $1,000,000. Tristar shall indemnify and hold harmless Parent from
and against all damages, costs and expenses (including reasonable attorneys'
fees and costs of investigation) arising out of any breach of any of the
representations, warranties or covenants of Tristar in this Agreement to the
extent such damages, costs and expenses exceed in the aggregate $1,000,000.
In the event any claim is made, or any suit or action is commenced,
against any person in respect of which indemnification may be sought by such
person under this Section 5.7 (the "Indemnified Party"), the Indemnified Party
shall promptly give the party against whom indemnification is sought (the
"Indemnifying Party") notice thereof and the Indemnifying Party shall be
entitled to conduct or participate in the defense thereof at the Indemnifying
Party's expense; provided, however, that the failure to give such notice shall
not relieve the Indemnifying Party of its obligations hereunder, except to the
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extent the Indemnifying Party is prejudiced thereby. The Indemnifying Party
may, at its expense, participate in or assume the defense of any such action,
suit or proceeding involving a third party. In such case the Indemnified Party
shall have the right (but not the duty) to participate in the defense thereof,
and to employ counsel, at its own expense, separate from counsel employed by
the Indemnifying Party in any such action and to be liable for the fees and
expenses of one firm as counsel (and appropriate local counsel) employed by the
Indemnified Party if the Indemnifying Party has not assumed the defense
thereof. Whether or not the Indemnifying Party chooses to defend or prosecute
any claim involving a third party, all the parties hereto shall cooperate in
the defense or prosecution thereof and shall furnish such records, information
and testimony, and attend such conferences, discovery proceedings, hearings,
trials and appeals, as may be reasonably requested in connection therewith.
The Indemnifying Party shall not be liable for any settlement effected without
its consent of any claim, litigation or proceedings in respect of which
indemnity may be sought hereunder, unless the Indemnifying Party refuses to
acknowledge liability for indemnification under this Section 5.7 and/or
declines to defend the Indemnified Party in such claim, litigation or
proceeding.
5.8 Termination of Distribution Agreement. On or prior to the
Closing Date, each party shall execute and deliver an instrument sufficient to
terminate the Distribution Agreement dated October 23, 1992 (the "Distribution
Agreement"), among Eurostar, Tristar and Starion International Ltd.
ARTICLE VI
CONDITIONS
6.1 Conditions to Obligation of Each Party to Effect the Merger.
The respective obligations of each party to effect the Merger shall be subject
to the fulfillment or waiver at or prior to the Closing Date of the following
conditions:
(a) This Agreement and the Merger shall have been
approved and adopted by the requisite vote of the stockholders of
Tristar as may be required by law and by any applicable provisions of
its Certificate of Incorporation or bylaws;
(b) No order shall have been entered and remain in effect
in any action or proceeding before any foreign, federal or state court
or governmental agency or other foreign, federal or state regulatory
or administrative agency or commission that would prevent or make
illegal the consummation of the Merger;
(c) There shall have been obtained any and all material
permits, approvals and consents of securities or blue sky commissions
of any jurisdiction, and of any other governmental body or agency,
that reasonably may be deemed necessary so that the consummation of
the Merger and the transactions contemplated thereby will be in
compliance with applicable laws, the failure to comply with which
would have a Material Adverse Effect on Tristar or the Surviving
Corporation after the consummation of the Merger;
(d) All approvals of private persons, financial
institutions or corporations, (i) the granting of which is necessary
for the consummation of the Merger or the transactions contemplated in
connection therewith or (ii) the non-receipt of which would have a
Material Adverse Effect on Tristar or the Surviving Corporation after
the consummation of the Merger, shall have been obtained;
(e) Tristar shall have been advised in writing on the
Closing Date by Coopers & Lybrand L.L.P. that, in accordance with
generally accepted accounting principles and applicable rules and
regulations of the Commission, the Merger should be treated
substantially similarly to a "pooling of interests" for accounting
purposes;
(f) Tristar shall have received from Howard Frazier
Barker Elliott a written opinion, dated as of the date of this
Agreement, satisfactory in form and substance to the Board of
Directors of Tristar, to the effect that the terms of the Merger are
fair to the minority
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stockholders of Tristar from a financial point of view, which opinion
shall have been confirmed in writing to such Board of Directors (i)
as of the date the Proxy Statement is first mailed to the stockholders
of Tristar and (ii) as of the Closing Date; and
(g) The Distribution Agreement shall have been terminated.
6.2 Additional Conditions to Obligations of Tristar. The
obligation of Tristar to effect the Merger is, at the option of Tristar, also
subject to the fulfillment or waiver at or prior to the Closing Date of the
following conditions:
(a) The representations and warranties of Eurostar and
Parent contained in Section 2.2 shall be accurate in all material
respects as of the Closing Date as though such representations and
warranties had been made at and as of that time (except where any such
representation or warranty is made as of a date specifically set forth
therein); all of the terms, covenants and conditions of this Agreement
to be complied with and performed by Eurostar on or before the Closing
Date shall have been duly complied with and performed in all material
respects; and a certificate of Eurostar to the foregoing effect dated
the Closing Date and signed by the chief financial officer of Eurostar
shall have been delivered to Tristar;
(b) Since the Effective Date of this Agreement, no
Material Adverse Change of Eurostar shall have occurred, and Eurostar
and the Eurostar Subsidiaries shall not have suffered any damage,
destruction or loss (whether or not covered by insurance) materially
adversely affecting the properties or business of Eurostar and the
Eurostar Subsidiaries, taken as a whole, and Tristar shall have
received a certificate of Eurostar signed by the chief executive
officer of Eurostar dated the Closing Date to such effect;
(c) Tristar shall have received from Akin Gump, Strauss,
Hauer & Feld, L.L.P., counsel to Eurostar, an opinion dated the
Effective Time covering the matters set forth in Exhibit 6.2(d);
(d) Tristar shall have received from Coopers & Lybrand
L.L.P., a written opinion dated as of the date that the Proxy
Statement is first mailed to stockholders of Tristar to the effect
that (i) the Merger will be treated for federal income tax purposes as
a reorganization within the meaning of Section 368(a) of the Code,
(ii) Tristar and Eurostar will each be a party to that reorganization
within the meaning of Section 368(b) of the Code and (iii) Tristar and
Eurostar shall not recognize any gain or loss as a result of the
Merger, and such opinion shall not have been withdrawn or modified in
any material respect.
6.3 Additional Conditions to Obligations of Eurostar. The
obligation of Eurostar to effect the Merger is, at the option of Eurostar, also
subject to the fulfillment or waiver at or prior to the Closing Date of the
following conditions:
(a) The representations and warranties of Tristar
contained in Section 2.3 shall be accurate as of the Closing Date in
all material respects as though such representations and warranties
had been made at and as of that time (except where any such
representation or warranty is made as of a date specifically set forth
therein); all of the terms, covenants and conditions of this Agreement
to be complied with and performed by Tristar on or before the Closing
Date shall have been duly complied with and performed in all material
respects; and a certificate of Tristar to the foregoing effect dated
the Closing Date and signed by the chief financial officer of Tristar
shall have been delivered to Eurostar;
(b) Since the Effective Date of this Agreement, no
Material Adverse Change of Tristar shall have occurred, and Tristar
and the Tristar Subsidiaries shall not have suffered any damage,
destruction or loss (whether or not covered by insurance) materially
adversely affecting the properties or business of Tristar and the
Tristar Subsidiaries, taken as a whole, and Eurostar shall have
received a certificate of Tristar signed by the chief executive
officer of Tristar dated the Closing Date to such effect;
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(c) The shares of Tristar Common Stock issuable upon
consummation of the Merger shall have been approved for listing on the
NASDAQ/National Market System, subject to official notice of issuance;
(d) Eurostar shall have received from Fulbright &
Jaworski L.L.P., counsel to Tristar, an opinion dated the Effective
Time covering the matters set forth in Exhibit 6.3(d).
ARTICLE VII
MISCELLANEOUS
7.1 Termination. This Agreement may be terminated and the Merger
and the other transactions contemplated herein may be abandoned at any time
prior to the Effective Time, whether prior to or after approval by the
stockholders of Tristar:
(a) by mutual consent of Eurostar and Tristar;
(b) by either Eurostar or Tristar if the Merger has not
been effected on or before September 30, 1995;
(c) by either Tristar or Eurostar if a final,
unappealable order to restrain, enjoin or otherwise prevent, or
awarding substantial damages in connection with, a consummation of
this Agreement or the transactions contemplated in connection herewith
shall have been entered;
(d) by Tristar or Eurostar if the required approval of
the stockholders of Tristar for the adoption and approval of the
Merger and this Agreement is not received;
(e) by Tristar if (i) since the Effective Date of this
Agreement there has been a Material Adverse Change in Eurostar, taken
as a whole, or (ii) there has been a material breach of any
representation or warranty set forth in this Agreement by Eurostar
which breach has not been cured within ten business days following
receipt by Eurostar of notice of such breach;
(f) by Eurostar if (i) since the Effective Date of this
Agreement there has been a Material Adverse Change in Tristar, taken
as a whole, or (ii) there has been a material breach of any
representation or warranty set forth in this Agreement by Tristar
which breach has not been cured within ten business days following
receipt by Tristar of notice of such breach;
(g) By Tristar or Eurostar, if the Acquisition Committee
of the Board of Directors of Tristar or the Board of Directors of
Eurostar, in its discretion, determines that such termination is
necessary for the Acquisition Committee of the Board of Directors of
Tristar or the Board of Directors of Eurostar, as the case may be, to
comply with their respective fiduciary duties to minority stockholders
(in the case of Tristar) or stockholder (in the case of Eurostar)
under applicable law; or
(h) By Tristar or Eurostar, if there is pending or
threatened any litigation against Tristar or Eurostar, or any of their
respective stockholders, affiliates, directors, officers or employees
(other than litigation disclosed in the Tristar Commission Filings),
which is, in the view of the Board of Directors of Eurostar or the
Acquisition Committee of the Board of Directors of Tristar, reasonably
likely to have a Material Adverse Effect on Tristar or Eurostar,
either prior to or following the consummation of the Merger.
7.2 Effect of Termination. In the event of any termination of
this Agreement pursuant to Section 7.1, Tristar and Eurostar shall have no
obligation or liability to each other except that (i) the provisions of the
second paragraphs of Sections 3.2 and 4.2 and the provisions of Sections 5.6,
and this Article VII shall survive any such termination, and (ii) nothing
herein and no termination pursuant hereto will relieve any party from liability
for any breach of this Agreement.
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7.3 Waiver and Amendment. Any provision of this Agreement may be
waived at any time by the party that is, or whose stockholders are, entitled to
the benefits thereof. This Agreement may not be amended or supplemented at any
time, except by an instrument in writing signed on behalf of each party hereto;
provided that after this Agreement has been approved and adopted by the
stockholders of Tristar, this Agreement may be amended only as may be permitted
by applicable provisions of the DGCL and the TBCA. The waiver by any party
hereto of any condition or of a breach of another provision of this Agreement
shall not operate or be construed as a waiver of any other condition or
subsequent breach. The waiver by any party hereto of any of the conditions
precedent to its obligations under this Agreement shall not preclude it from
seeking redress for breach of this Agreement other than with respect to the
condition so waived.
7.4 Survival of Representations, Warranties, Covenants and
Agreements. The representations, warranties, covenants or agreements in this
Agreement or in any instrument delivered pursuant to this Agreement shall
survive for a period of one year following the Closing Date.
7.5 Public Statements. Tristar and Eurostar agree to consult with
each other prior to issuing any press release or otherwise making any public
statement with respect to the transactions contemplated hereby, and shall not
issue any such press release or make any such public statement prior to such
consultation, except as may be required by law or applicable stock exchange
policy.
7.6 Assignment. This Agreement shall inure to the benefit of and
will be binding upon the parties hereto and their respective legal
representatives, successors and permitted assigns. Except as set forth in this
Agreement, this Agreement shall not be assignable by the parties hereto.
7.7 Notices. All notices, requests, demands, claims and other
communications that are required to be or may be given under this Agreement
shall be in writing and shall be deemed to have been duly given if (i)
delivered in person or by courier, (ii) sent by telecopy or facsimile
transmission, answer back requested, or (iii) mailed, certified first class
mail, postage prepaid, return receipt requested, to the parties hereto at the
following addresses:
if to Tristar: Tristar Corporation
12500 San Pedro Avenue, Suite 500
San Antonio, Texas 78216
Attention: President
with a copy to: Fulbright & Jaworski L.L.P.
300 Convent Street, Suite 2200
San Antonio, Texas 78205
Attention: Phillip M. Renfro, Esq.
if to Eurostar Eurostar Perfumes, Inc.
or Parent: 12001 Network, Bldg. E, Suite 110
San Antonio, Texas 78249-3355
Attention: President
with a copy to: Akin, Gump, Strauss, Hauer & Feld, L.L.P.
300 Convent Street, Suite 1500
San Antonio, Texas 78205
Attention: Cecil Schenker, P.C.
or to such other address as any party shall have furnished to the other by
notice given in accordance with this Section 7.7. Such notices shall be
effective, (i) if delivered in person or by courier, upon actual receipt by the
intended recipient, (ii) if sent by telecopy or facsimile transmission, when
the transmission
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is confirmed, or (iii) if mailed, upon the earlier of five days after deposit
in the mail and the date of delivery as shown by the return receipt therefor.
7.8 Governing Law. This Agreement shall be governed by and
construed in accordance with the substantive law of the State of Delaware
without giving effect to the principles of conflicts of law thereof.
7.9 Severability. If any term, provision, covenant or restriction
of this Agreement is held by a court of competent jurisdiction to be invalid,
void or unenforceable, the remainder of the terms, provisions, covenants and
restrictions of this Agreement shall continue in full force and effect and
shall in no way be affected, impaired or invalidated.
7.10 Counterparts. This Agreement may be executed in counterparts,
each of which shall be an original, but all of which together shall constitute
one and the same agreement.
7.11 Headings. The Section headings herein are for convenience
only and shall not affect the construction hereof.
7.12 Entire Agreement; Third Party Beneficiaries. This Agreement
constitutes the entire agreement and supersedes all other prior agreements and
understandings, both oral and written, among the parties or any of them, with
respect to the subject matter hereof and neither this nor any documents
delivered in connection with this Agreement confers upon any person not a party
hereto any rights or remedies hereunder.
SIGNATURES ON FOLLOWING PAGE
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IN WITNESS WHEREOF, each of the parties has caused this Agreement to
be executed on its behalf by its officers thereunto duly authorized, all as of
the Date Hereof to be effective on the Effective Date.
EUROSTAR PERFUMES, INC.
By: /s/ Viren S. Sheth
------------------------------------------
Name: Viren S. Sheth
------------------------------------------
Title: President and Chief Executive Officer
------------------------------------------
TRANSVIT MANUFACTURING CORPORATION
By: /s/ Mahendra Sheth
------------------------------------------
Name:
------------------------------------------
Title:
------------------------------------------
TRISTAR CORPORATION
By: /s/ Loren Eltiste
------------------------------------------
Name: Loren Eltiste
------------------------------------------
Title: Vice President and Chief Financial Officer
------------------------------------------
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