TRISTAR CORP, DEFM14A, 1995-08-04

TRISTAR CORP
DEFM14A, 1995-08-04
DRUGS, PROPRIETARIES & DRUGGISTS' SUNDRIES

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<PAGE> 1

SCHEDULE 14A
(RULE 14a-101)

INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE SECURITIES
EXCHANGE ACT OF 1934 (AMENDMENT NO. 2)

Filed by the Registrant /X/
Filed by a Party other than the Registrant / /
Check the appropriate box:
/ / Preliminary Proxy Statement
/ / Confidential, for Use of the Commission Only (as permitted by
Rule 14a-6(e)(2))
/X/ Definitive Proxy Statement
/ / Definitive Additional Materials
/ / Soliciting Material Pursuant to Section 240.14a-11(c) or
Section 240.14a-12

TRISTAR CORPORATION
(Name of Registrant as Specified in its Charter)
N/A
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)

Payment of Filing Fee (Check the appropriate box):

/ / $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), 14a-6(i)(2)
or Item 22(a)(2) of Schedule 14A.
/ / $500 per each party to the controversy pursuant to Exchange Act Rule
14a-6(i)(3).
/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and
0-11.

(1) Title of each class of securities to which transaction applies:

- --------------------------------------------------------------------------------
(2) Aggregate number of securities to which transaction applies:

- --------------------------------------------------------------------------------
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the filing fee
is calculated and state how it was determined):

- --------------------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:

- --------------------------------------------------------------------------------
(5) Total fee paid:

- --------------------------------------------------------------------------------

/X/ Fee paid previously with preliminary materials.

/ / Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number, or
the Form or Schedule and the date of its filing.

(1) Amount Previously Paid:
N/A
- --------------------------------------------------------------------------------
(2) Form, Schedule or Registration Statement No.:
N/A
- --------------------------------------------------------------------------------
(3) Filing Party:
N/A
- --------------------------------------------------------------------------------
(4) Date Filed:
N/A
- --------------------------------------------------------------------------------
<PAGE> 2

TRISTAR CORPORATION

12500 San Pedro Avenue, Suite 500
San Antonio, Texas 78216

August 4, 1995

Dear Stockholder:

You are cordially invited to attend the Special Meeting of Stockholders of
TRISTAR CORPORATION ("Tristar") to be held on August 30, 1995, at 2:00 p.m., San
Antonio time, at Tristar's corporate offices at 12500 San Pedro Avenue, Suite
500, San Antonio, Texas.

At the Special Meeting you will be asked to consider and vote upon the
approval and adoption of an Agreement and Plan of Merger (the "Merger
Agreement") which would merge Eurostar Perfumes, Inc. ("Eurostar") with and into
Tristar (the "Merger").

In the Merger, Eurostar's sole stockholder will receive an aggregate of
9,977,810 shares of Tristar Common Stock in exchange for all the issued and
outstanding shares of Eurostar Common Stock. The number of shares to be received
by Eurostar is based on a valuation of Eurostar and Tristar at approximately 60%
and 40%, respectively, of the value of the combined entities. In addition, the
exercise price of certain warrants held by an affiliate of the Core Sheth
Families may be reduced in connection with the Merger. See "The Merger --
Description of the Merger -- Repricing of Certain Warrants". On May 31, 1995,
the date on which the Merger was announced, the aggregate market value of
Tristar Common Stock to be received by Eurostar was $52,383,503 (based on a
closing price of $5.25 per share on May 31, 1995), and the aggregate market
value of the outstanding Tristar Common Stock on such date was $34,922,333
(based on a closing price of $5.25 per share on May 31, 1995).

Tristar currently engages in numerous transactions with Eurostar and other
entities owned by the Core Sheth Families. See "The Merger -- Description of the
Merger -- Interests of Certain Persons in the Merger". The Core Sheth Families
beneficially own 60.5% of the outstanding shares of Tristar Common Stock (71%
assuming the exercise of all outstanding warrants) and all of the outstanding
shares of Eurostar Common Stock. If the Merger is consummated, the Core Sheth
Families will beneficially own approximately 84% of the outstanding shares of
Tristar Common Stock (86% assuming the exercise of all outstanding warrants).

An additional subject proposed for action at the Special Meeting in
connection with the Merger and subject to consummation of the Merger is the
approval of an amendment of the Certificate of Incorporation of Tristar to
increase the authorized number of shares of Tristar Common Stock from 10,000,000
shares to 30,000,000 shares.

A SPECIAL COMMITTEE OF INDEPENDENT DIRECTORS OF TRISTAR (THE "ACQUISITION
COMMITTEE") REVIEWED AND CONSIDERED THE TERMS AND CONDITIONS OF THE MERGER AND
UNANIMOUSLY RECOMMENDED TO THE TRISTAR BOARD OF DIRECTORS THAT THE MERGER
AGREEMENT BE APPROVED. The Acquisition Committee considered, among other
factors, (i) that Tristar's ability to continue as a going concern could be
jeopardized at some point in the future if Tristar's current net losses and
negative cash flow continued without improvement, (ii) the impact of expanding
Tristar's market base to include South and Central America, (iii) the
elimination of certain potential conflicts of interest with Eurostar, (iv) the
increased flexibility that the Merger might afford Tristar in future financings
and acquisitions and (v) that Tristar's ability to overcome its current
noncompliance with certain NASDAQ listing requirements will be enhanced if the
Merger is consummated. In addition, the Acquisition Committee has received an
opinion from its financial advisor, Howard Frazier Barker Elliott, Inc., that
the consideration to be paid by Tristar pursuant to the Merger is fair from a
financial point of view to Tristar and its stockholders other than the Core
Sheth Families and their affiliates. See "The Merger -- Description of the
Merger -- Opinion of the Acquisition Committee's Financial Advisor" in the
attached Proxy Statement.

<PAGE> 3

IN LIGHT OF THE RECOMMENDATION OF THE ACQUISITION COMMITTEE, YOUR BOARD OF
DIRECTORS, INCLUDING THE MEMBERS OF THE ACQUISITION COMMITTEE, HAS UNANIMOUSLY
APPROVED THE MERGER AGREEMENT AND THE TRANSACTIONS CONTEMPLATED THEREBY. YOUR
BOARD RECOMMENDS THAT YOU VOTE FOR THE MERGER AGREEMENT AND THE TRANSACTIONS
CONTEMPLATED THEREBY AND FOR THE AMENDMENT TO THE CERTIFICATE OF INCORPORATION
OF TRISTAR. In considering this recommendation, you should review carefully all
the information contained in the attached Proxy Statement, particularly the
information appearing in the "Special Considerations" section.

It is a condition to the consummation of the Merger that the proposal to
amend the Certificate of Incorporation be approved and, likewise, it is a
condition of the approval of the amendment to the Certificate of Incorporation
that the Merger be approved. Therefore, unless both proposals are approved by
the stockholders, the Merger will not be consummated.

YOUR VOTE AT THE SPECIAL MEETING IS EXTREMELY IMPORTANT. WHETHER OR NOT
YOU INTEND TO BE PRESENT AT THE SPECIAL MEETING, YOU ARE URGED TO ACT PROMPTLY
IN COMPLETING, SIGNING AND DATING THE ENCLOSED PROXY SOLICITED BY YOUR BOARD OF
DIRECTORS AND RETURNING IT IN THE ENVELOPE PROVIDED. IF YOU ATTEND THE SPECIAL
MEETING, YOU MAY VOTE YOUR SHARES IN PERSON, WHETHER OR NOT YOU HAVE PREVIOUSLY
SUBMITTED A PROXY.

We look forward to greeting personally those stockholders who are able to
be present at the meeting.

On behalf of the Board of Directors,

/s/ Viren S. Sheth

Viren S. Sheth
President and Chief Executive Officer

/s/ Richard P. Rifenburgh

Richard P. Rifenburgh
Chairman of the Board of Directors

/s/ Robert R. Sparacino

Robert R. Sparacino
Chairman of the Acquisition Committee

<PAGE> 4

TRISTAR CORPORATION

12500 San Pedro Avenue, Suite 500
San Antonio, Texas

NOTICE OF SPECIAL MEETING OF STOCKHOLDERS
TO BE HELD
AUGUST 30, 1995 AT 2:00 P.M.

You are hereby notified that a Special Meeting of Stockholders of TRISTAR
CORPORATION, a Delaware corporation ("Tristar"), will be held at Tristar's
corporate offices at 12500 San Pedro Avenue, Suite 500, San Antonio, Texas on
August 30, 1995, at 2:00 p.m., San Antonio time, for the following purposes:

1. To consider and vote upon a proposal to approve and adopt an Agreement
and Plan of Merger dated as of July 1, 1995 (the "Merger Agreement"),
among Tristar, Eurostar Perfumes, Inc., a Texas corporation ("Eurostar"),
and Transvit Manufacturing Corporation, a British Virgin Islands
corporation ("Transvit"), pursuant to which (i) Eurostar will be merged
with and into Tristar, following which Tristar will be the surviving
corporation, and (ii) all the issued and outstanding shares of Eurostar
Common Stock will be converted into the right to receive an aggregate of
9,977,810 shares of Tristar Common Stock, as more fully described in the
accompanying Proxy Statement.

2. In connection with the Merger and subject to the approval of the
Merger, to consider and vote upon a proposal to amend Tristar's
Certificate of Incorporation to increase the number of shares of Tristar
Common Stock from 10,000,000 shares to 30,000,000.

3. To transact such other business incident to the conduct of the Special
Meeting that may properly come before the Special Meeting or any
adjournments or postponements thereof.

A copy of the Merger Agreement is set forth as Appendix A to the Proxy
Statement and is incorporated herein by reference. THE BOARD OF DIRECTORS OF
TRISTAR, INCLUDING THE MEMBERS OF A SPECIAL COMMITTEE OF INDEPENDENT DIRECTORS,
HAS UNANIMOUSLY APPROVED THE MERGER AGREEMENT. THE BOARD RECOMMENDS THAT YOU
VOTE FOR THE MERGER AND FOR THE AMENDMENT TO TRISTAR'S CERTIFICATE OF
INCORPORATION.

Stockholders of record at the close of business on July 12, 1995, will be
entitled to notice of and to vote at the Special Meeting or any adjournment
thereof. The affirmative vote of 66 2/3% of the outstanding shares of Tristar
Common Stock is required for approval of the Merger and the Merger Agreement,
and the affirmative vote of a majority of the outstanding shares of Tristar
Common Stock is required for approval of the amendment to Tristar's Certificate
of Incorporation. The Core Sheth Families, who beneficially own 60.5% of the
outstanding shares of Tristar Common Stock (71% assuming the exercise of all
outstanding warrants) and all of the outstanding shares of Eurostar Common
Stock, have indicated to Tristar that they intend to vote all of their shares in
favor of the Merger Agreement and the amendment of Tristar's Certificate of
Incorporation. It is not a condition to the consummation of the Merger that a
majority of shares of Tristar Common Stock, other than shares held by the Core
Sheth Families, vote to approve the Merger and the Merger Agreement. It is a
condition to the consummation of the Merger that the proposal to amend the
Certificate of Incorporation be approved and, likewise, it is a condition of the
approval of the amendment to the Certificate of Incorporation that the Merger be
approved. Therefore, unless both proposals are approved by the stockholders, the
Merger will not be consummated.

WHETHER OR NOT YOU PLAN TO ATTEND THE SPECIAL MEETING, PLEASE SIGN, DATE
AND RETURN THE ENCLOSED PROXY IN THE REPLY ENVELOPE PROVIDED. NO POSTAGE IS
NECESSARY IF MAILED WITHIN THE UNITED STATES. THE

<PAGE> 5

PROMPT RETURN OF YOUR PROXY WILL ASSIST US IN PREPARING FOR THE SPECIAL MEETING.
STOCKHOLDERS WHO ATTEND THE SPECIAL MEETING MAY REVOKE THEIR PROXY AND VOTE
THEIR SHARES IN PERSON.

BY ORDER OF THE BOARD OF DIRECTORS

Viren S. Sheth
President and Chief Executive Officer

San Antonio, Texas
August 4, 1995

<PAGE> 6

TRISTAR CORPORATION

12500 San Pedro Avenue, Suite 500
San Antonio, Texas 78216

This Proxy Statement is being furnished to holders of Common Stock of
TRISTAR CORPORATION, a Delaware corporation ("Tristar"), in connection with the
solicitation by the Board of Directors of Tristar (the "Tristar Board") of
proxies for use at its special meeting of stockholders (the "Special Meeting"),
to be held on August 30, 1995, at 2:00 p.m., San Antonio time, at Tristar's
corporate offices at 12500 San Pedro Avenue, Suite 500, San Antonio, Texas, and
any adjournments or postponements thereof. This Proxy Statement is first being
mailed to stockholders on or about August 4, 1995.

At the Special Meeting, stockholders are being asked to vote on a proposal
to approve the combination of Tristar and Eurostar Perfumes, Inc., a Texas
corporation ("Eurostar"), through the proposed merger (the "Merger") of Eurostar
with and into Tristar pursuant to an Agreement and Plan of Merger dated
effective as of July 1, 1995 (the "Merger Agreement") among Tristar, Eurostar
and Transvit Manufacturing Corporation, a British Virgin Islands corporation
("Transvit"), and the issuance of Tristar Common Stock (as herein defined) in
connection therewith. If the Merger is consummated, Tristar will be the
surviving corporation, and all issued and outstanding shares of Eurostar Common
Stock, $.001 par value ("Eurostar Common Stock"), will be converted into the
right to receive an aggregate of 9,977,810 shares of Tristar common stock, $0.01
par value ("Tristar Common Stock"). The number of shares to be received by
Eurostar is based on a valuation of Eurostar and Tristar at approximately 60%
and 40%, respectively, of the value of the combined entities. On May 31, 1995,
the date on which the Merger was announced, the aggregate market value of
Tristar Common Stock to be received by Eurostar was $52,383,503 (based on a
closing price of $5.25 per share on May 31, 1995), and the aggregate market
value of the outstanding Tristar Common Stock on such date was $34,922,333
(based on a closing price of $5.25 per share on May 31, 1995).

In addition, in connection with the Merger and subject to the consummation
of the Merger, stockholders are being asked to vote on a proposal to amend the
Certificate of Incorporation of Tristar to increase the number of authorized
shares of Tristar Common Stock from 10,000,000 shares to 30,000,000 shares.

A copy of the Merger Agreement is set forth as Appendix A to the Proxy
Statement and is incorporated herein by reference. THE BOARD OF DIRECTORS OF
TRISTAR, INCLUDING THE MEMBERS OF A SPECIAL COMMITTEE OF INDEPENDENT DIRECTORS,
HAS UNANIMOUSLY APPROVED THE MERGER AND THE MERGER AGREEMENT AND THE AMENDMENT
TO TRISTAR'S CERTIFICATE OF INCORPORATION. THE BOARD RECOMMENDS THAT YOU VOTE
FOR THE MERGER AND FOR THE AMENDMENT TO TRISTAR'S CERTIFICATE OF INCORPORATION.

Stockholders of record at the close of business on July 12, 1995, will be
entitled to notice of and to vote at the Special Meeting or any adjournment
thereof. The affirmative vote of 66 2/3% of the outstanding shares of Tristar
Common Stock is required for approval of the Merger and the Merger Agreement,
and the affirmative vote of a majority of the outstanding shares of Tristar
Common Stock is required for approval of the amendment to Tristar's Certificate
of Incorporation. The Core Sheth Families, who beneficially own 60.5% of the
outstanding shares of Tristar Common Stock (71% assuming the exercise of all
outstanding warrants) and all of the outstanding shares of Eurostar Common
Stock, have indicated to Tristar that they intend to vote all of their shares in
favor of the Merger Agreement and the amendment of Tristar's Certificate of
Incorporation. It is a condition to the consummation of the Merger that the
proposal to amend the Certificate of Incorporation be approved and, likewise, it
is a condition of the approval of the amendment to the Certificate of
Incorporation that the Merger be consummated. Therefore, unless both proposals
are approved by the stockholders, the Merger will not be approved.

WHETHER OR NOT YOU PLAN TO ATTEND THE SPECIAL MEETING, PLEASE SIGN, DATE
AND RETURN THE ENCLOSED PROXY IN THE REPLY ENVELOPE PROVIDED. NO POSTAGE IS
NECESSARY IF MAILED WITHIN THE UNITED STATES. THE PROMPT RETURN OF YOUR PROXY
WILL ASSIST US IN PREPARING FOR THE SPECIAL MEETING. STOCKHOLDERS WHO ATTEND THE
SPECIAL MEETING MAY REVOKE THEIR PROXY AND VOTE THEIR SHARES IN PERSON.

The date of this Proxy Statement is August 4, 1995

<PAGE> 7

TABLE OF CONTENTS

<TABLE>
<S> <C>
SUMMARY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
THE PARTIES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Tristar . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Eurostar . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
The Core Sheth Families and Transvit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
THE SPECIAL MEETING . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Time, Date and Place . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Solicitation Agent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Record Date; Shares Entitled to Vote . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Vote Required . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
THE MERGER . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
General . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Background of the Merger . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Material Advantages and Disadvantages of the Merger . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Recommendations of the Acquisition Committee and the Tristar Board of Directors and Reasons for the Merger . . . 4
Special Considerations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Opinion of the Financial Advisor . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Interests of Certain Persons in the Merger . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Effective Time . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Conversion of Shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Exchange of Stock Certificates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Conditions to the Merger . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Tax Consequences . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Governmental and Regulatory Approvals . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Accounting Treatment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Rights of Dissenting Stockholders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
MARKET PRICE DATA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
SUMMARY FINANCIAL INFORMATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
COMPARATIVE PER SHARE DATA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9

SPECIAL CONSIDERATIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14

GENERAL INFORMATION ABOUT THE MEETING . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
General . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
Merger -- Consideration; Repricing of Warrants . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
Voting and Proxies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
Solicitation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17

THE MERGER . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17

DESCRIPTION OF THE MERGER . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
General . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
Background of the Merger . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
Material Advantages and Disadvantages of the Merger . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
Recommendation of the Acquisition Committee and the Tristar Board and Reasons for the Merger . . . . . . . . . . . . . 19
Opinion of the Acquisition Committee's Financial Advisor . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
Repricing of Certain Warrants . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
Accounting Treatment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
Governmental and Regulatory Approvals . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
Certain U.S. Federal Income Tax Consequences . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
Interests of Certain Persons in the Merger . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
Transactions Between Tristar and Entities Owned by the Core Sheth Families . . . . . . . . . . . . . . . . . . . . . . 25
</TABLE>

(i)
<PAGE> 8

<TABLE>
<S> <C>
Exchange of Stock Certificates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
Federal Securities Law Consequences . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
Dissenters' Rights . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26

THE MERGER AGREEMENT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
Effective Time of the Merger . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
Manner and Basis of Converting Shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
Conditions to the Merger . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
Representations and Warranties of Tristar and Eurostar . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
Conduct of Business of Tristar and Eurostar Prior to Merger . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
Management of the Combined Company Following Merger . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
Termination or Amendment of Merger Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30

PRO FORMA CONDENSED CONSOLIDATED COMBINED FINANCIAL STATEMENTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32

INFORMATION CONCERNING TRISTAR . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
BUSINESS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
TRISTAR SELECTED FINANCIAL DATA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54
TRISTAR MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS . . . . . . . . . . . . 55
TRISTAR MANAGEMENT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 64
TRISTAR EXECUTIVE COMPENSATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 68
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT . . . . . . . . . . . . . . . . . . . . . . . . . . . . 73
CERTAIN TRANSACTIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 74
MARKET PRICES OF TRISTAR COMMON STOCK; DIVIDENDS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 76
DESCRIPTION OF TRISTAR CAPITAL STOCK . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 77

INFORMATION CONCERNING EUROSTAR . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 78
BUSINESS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 78
EUROSTAR SELECTED FINANCIAL DATA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 82
EUROSTAR MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS . . . . . . . . . . . . 83
MARKET PRICES OF EUROSTAR COMMON STOCK; DIVIDENDS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 86

PROPOSAL NO. 2 -- AMENDMENT TO TRISTAR'S CERTIFICATE OF INCORPORATION . . . . . . . . . . . . . . . . . . . . . . . . . . . 86

INDEPENDENT PUBLIC ACCOUNTANTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 87

LEGAL OPINIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 88

STOCKHOLDER PROPOSALS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 88

OTHER MATTERS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 88

INDEX TO FINANCIAL STATEMENTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F-1

Appendix A Agreement and Plan of Merger A-1
Appendix B Opinion of Howard Frazier Barker Elliott, Inc. B-1
Appendix C Proposed Text of Article IV of Tristar's
Certificate of Incorporation C-1
</TABLE>

(ii)

<PAGE> 9

SUMMARY

The following is a summary of certain of the information included
elsewhere in this Proxy Statement. The summary does not purport to be complete
and is qualified in its entirety by the more detailed information contained in
this Proxy Statement and the appendices, all of which should be carefully
reviewed. See "Special Considerations" for certain information that should be
considered by the stockholders of Tristar.

THE PARTIES

TRISTAR

Tristar is a Delaware corporation headquartered in San Antonio, Texas.
Tristar is principally engaged in the marketing and distribution of designer
alternative fragrances, cosmetics and bath and body products in the United
States, Mexico, Canada and Puerto Rico. Tristar currently operates through its
distribution facilities in San Antonio, Texas and Mexico City, Mexico. The
principal executive offices of Tristar are located at 12500 San Pedro, Suite
500, San Antonio, Texas 78216, and its telephone number is (210) 402-2200. See
"Information Concerning Tristar -- Business".

EUROSTAR

Eurostar is a Texas corporation with corporate offices in San Antonio,
Texas and a plant and corporate offices in Pleasanton, Texas. Eurostar is
principally engaged in the development, manufacture, and marketing of designer
alternative fragrances, cosmetics and bath and body products. In addition to its
sales to Tristar, Eurostar actively markets its products to distributors
throughout South and Central America. Eurostar is a wholly-owned subsidiary of
Transvit, a British Virgin Islands company owned by the Core Sheth Families. The
principal executive offices of Eurostar are located at 1 Eurostar Drive,
Pleasanton, Texas 78064, and its telephone number is (210) 281-6000. See
"Information Concerning Eurostar -- Business".

THE CORE SHETH FAMILIES AND TRANSVIT

The Core Sheth Families is a group which is the beneficial owner of 60.5%
of Tristar's Common Stock (71% assuming the exercise of all outstanding
warrants) and all of Eurostar's Common Stock. The Core Sheth Families consist of
Shashikant S. Sheth, a director of Tristar, Jamnadas Sheth, Kirit Sheth and
Mahendra Sheth. The members of the Core Sheth Families share voting and
investment power with respect to all shares beneficially owned by the Core Sheth
Families. Transvit, a British Virgin Islands corporation owned by the Core Sheth
Families, owns all of Eurostar's Common Stock. Viren S. Sheth, a director of
Tristar and its President and Chief Executive Officer, is Shashikant S. Sheth's
brother. Although Viren S. Sheth is not a member of the Core Sheth Families, he
is related by blood to certain members of the Core Sheth Families. Viren S.
Sheth also serves as President, Chief Executive Officer and a director of
Eurostar. See "The Merger -- Description of the Merger -- Interests of Certain
Persons in the Merger".

At the present time, the Core Sheth Families indirectly control the
election of all the directors of Tristar, indirectly control the election of all
the directors of Eurostar and directly or indirectly control a majority of all
votes cast on matters submitted to stockholders of either corporation. See
"Information Concerning Tristar -- Security Ownership of Certain Beneficial
Owners and Management".

Immediately after the proposed merger transaction, the Core Sheth
Families, through their continuing ownership of approximately 84% of Tristar
Common Stock (86% assuming the exercise of all outstanding warrants), would
indirectly control the election of all of the directors of Tristar and all other
matters submitted to stockholders of Tristar.

<PAGE> 10

For a discussion of the transactions between Tristar and certain entities
owned by the Core Sheth Families, see "The Merger -- Description of the Merger
- -- Transactions Between Tristar and Entities Owned by the Core Sheth Families."

THE SPECIAL MEETING

INTRODUCTION

At the Special Meeting, Tristar stockholders will be asked to vote on a
proposal to approve the Merger Agreement and the combination of Tristar and
Eurostar through the Merger and the issuance of an aggregate of 9,977,810 shares
of Tristar Common Stock in the Merger in exchange for all the issued and
outstanding shares of Eurostar Common Stock. Further, Tristar stockholders will
be asked to vote on the amendment, subject to approval of the Merger, of
Tristar's Certificate of Incorporation to increase the number of authorized
shares of Tristar Common Stock from 10,000,000 shares to 30,000,000 shares.

See "General Information About the Meeting -- Voting and Proxies."

TIME, DATE AND PLACE

The Special Meeting will be held on August 30, 1995, at 2:00 p.m., San
Antonio time, at Tristar's corporate offices at 12500 San Pedro Avenue, Suite
500, San Antonio, Texas.

SOLICITATION AGENT

Tristar has retained Georgeson & Company Inc. ("Georgeson") to assist in
the solicitation of proxies. Georgeson will distribute on behalf of Tristar all
proxy soliciting material to brokers, banks and institutional holders. In
addition, Georgeson will solicit proxies on behalf of Tristar from brokers,
banks and institutions. Georgeson will receive from Tristar a fee of $5,000,
plus expenses, for such services. See "General Information About the Meeting --
Solicitation."

RECORD DATE; SHARES ENTITLED TO VOTE

Holders of record of Tristar Common Stock at the close of business on July
12, 1995 (the "Record Date"), will be entitled to notice of and to vote at the
Special Meeting. At the close of business on July 12, 1995, 6,651,873 shares of
Tristar Common Stock were issued and outstanding. Each outstanding share of
Tristar Common Stock is entitled to one vote at the Special Meeting.

See "General Information About the Meeting -- Voting and Proxies."

VOTE REQUIRED

The affirmative vote of 66 2/3% of the outstanding shares of Tristar
Common Stock is required for approval of the Merger Agreement, and the
affirmative vote of a majority of the outstanding shares of Tristar Common Stock
is required for approval of the amendment to Tristar's Certificate of
Incorporation. The Core Sheth Families, who beneficially own 60.5% of the
outstanding shares of Tristar Common Stock (71% assuming the exercise of all
outstanding warrants) and all of the outstanding shares of Eurostar Common
Stock, have indicated to Tristar that they intend to vote all of their shares in
favor of the Merger Agreement and the amendment to Tristar's Certificate of
Incorporation. The presence, either in person or by proxy, of the holders of at
least a majority of the outstanding shares of Tristar Common Stock entitled to
vote is necessary to constitute a quorum at the Special Meeting. See "General
Information About the Meeting -- Voting and Proxies".

2
<PAGE> 11

THE MERGER

GENERAL

At the Effective Time (as defined below), Eurostar will merge with and
into Tristar. Eurostar will no longer exist, and Tristar will be the surviving
corporation (the "Surviving Corporation").

BACKGROUND OF THE MERGER

After the independent directors of Tristar raised the possibility of a
merger, Viren S. Sheth, at Tristar's Executive Committee meeting on April 11,
1995, advised the Executive Committee that the Core Sheth Families were
interested in exploring a merger of Eurostar and Tristar. In anticipation of an
offer from Eurostar, the Tristar Board appointed a special committee comprised
of certain independent directors of Tristar (the "Acquisition Committee") to
consider how Tristar should respond to such an offer. The Acquisition Committee
engaged its own financial advisor to assist in the evaluation of a merger
proposal. The Acquisition Committee has been continuously engaged in
negotiations with representatives of Eurostar since its formation on April 11,
1995.

On May 26, 1995, Eurostar made a preliminary merger proposal (the
"Preliminary Merger Proposal") to the Acquisition Committee. The terms of the
Merger and related transactions have developed from a rejection of the
Preliminary Merger Proposal and the negotiation of a revised merger proposal
between representatives of Eurostar and the Acquisition Committee. For a more
complete description of the background of the Merger proposal, see "The Merger
- -- Description of the Merger -- Background of the Merger".

MATERIAL ADVANTAGES AND DISADVANTAGES OF THE MERGER

The material advantages of the Merger to Tristar stockholders are as
follows:

- Reduces the current net loss and negative cash flow problems being
experienced by Tristar that, if they were to continue without any improvement,
could jeopardize Tristar's ability to continue as a going concern at some point
in the future

- Expands Tristar's existing market base in the United States, Mexico,
Canada and Puerto Rico with Eurostar's market base in South and Central America
and thereby reduces the impact of regional problems existing in Tristar's
current market base, such as weak economic conditions in Mexico and the Mexican
currency devaluation

- Eliminates certain potential conflicts of interest between Tristar and
Eurostar

- Increases Tristar's flexibility in future financings and acquisitions

- Enhances Tristar's ability to overcome its current non-compliance with
certain NASDAQ listing requirements

The material disadvantages of the proposed Merger to the Tristar
stockholders are as follows:

- After giving effect to the Merger, the Core Sheth Families would
beneficially own approximately 84% of the outstanding shares of Tristar Common
Stock (86% assuming the exercise of all outstanding warrants); therefore,
current stockholders of Tristar will face further dilution of the voting power
of such stockholders

3
<PAGE> 12

- Following the Merger, matters requiring approval of 66 2/3% of the
outstanding shares of Tristar's capital stock, including in certain cases the
merger, consolidation or exchange of Tristar's capital stock in a transaction
involving a substantial stockholder or affiliate, or the sale, lease, exchange
or other disposition of all or substantially all of Tristar's assets, could be
effectuated solely by a vote of the shares owned by the Core Sheth Families

- To the extent that the repricing of certain warrants held by the Core
Sheth Families makes it more likely that such warrants would be exercised, the
exercise of such warrants would have a dilutive effect on the ownership position
of the current holders of Tristar Common Stock other than the Core Sheth
Families and their affiliates

See "The Merger - Description of the Merger - Material Advantages and
Disadvantages of the Merger," "The Merger - Description of the Merger -
Recommendation of the Acquisition Committee and the Tristar Board and Reasons
for the Merger," "Special Considerations - Further Dilution of Voting Power" and
"The Merger - Description of the Merger - Repricing of Certain Warrants".

RECOMMENDATIONS OF THE ACQUISITION COMMITTEE AND THE TRISTAR BOARD OF DIRECTORS
AND REASONS FOR THE MERGER

The Acquisition Committee, following negotiations relating to the terms of
the Merger, recommended that the Tristar Board approve the Merger Agreement. In
reaching its conclusion, the Acquisition Committee considered the past events
described under "The Merger -- Description of the Merger -- Background of the
Merger" and certain other factors, including, among others, those discussed
under "The Merger -- Description of the Merger -- Material Advantages and
Disadvantages of the Merger" and that the financial advisor to the Acquisition
Committee has rendered a favorable fairness opinion regarding the consideration
to be paid by Tristar in the Merger.

In light of the recommendation of the Acquisition Committee, and following
consideration of the Acquisition Committee's work and the basis for its
recommendation by the other Tristar directors, the Tristar Board, including the
members of the Acquisition Committee, unanimously approved the Merger Agreement.
THE TRISTAR BOARD RECOMMENDS THAT TRISTAR STOCKHOLDERS VOTE FOR APPROVAL AND
ADOPTION OF THE MERGER AGREEMENT AND FOR THE APPROVAL OF THE AMENDMENT TO
TRISTAR'S CERTIFICATE OF INCORPORATION.

See "The Merger -- Description of the Merger -- Material Advantages and
Disadvantages of the Merger" and "The Merger -- Description of the Merger --
Recommendation of the Acquisition Committee and the Tristar Board and Reasons
for the Merger".

SPECIAL CONSIDERATIONS

There are certain matters that should be considered by Tristar
stockholders in determining whether to vote in favor of the Merger and the
Merger Agreement. See "Special Considerations".

OPINION OF THE FINANCIAL ADVISOR

In connection with the Acquisition Committee's consideration of the Merger
Agreement, the Acquisition Committee's financial advisor, Howard Frazier Barker
Elliott, Inc. ("HFBE"), delivered its oral opinion on May 31, 1995, subsequently
confirmed in writing on August 3, 1995, to the effect that as of the date of
such opinion, based on its review and assumptions and subject to the limitations
described therein, the consideration to be paid by Tristar pursuant to the
Merger is fair from a financial point of view to Tristar and its stockholders
other than the Core Sheth Families and their affiliates. Tristar has paid HFBE
certain fees in connection with the rendering of its opinion. A copy of the HFBE
opinion is attached as Appendix B to this Proxy Statement and should be read in
its entirety. See "The Merger -- Description of the Merger -- Opinion of the
Acquisition Committee's Financial Advisor".

4
<PAGE> 13

INTERESTS OF CERTAIN PERSONS IN THE MERGER

The Core Sheth Families is a group which is the beneficial owner of 60.5%
of Tristar's Common Stock (71% assuming the exercise of all outstanding
warrants) and all of Eurostar's Common Stock. Viren S. Sheth is President, Chief
Executive Officer and a member of the Tristar Board, and also serves as the
President, Chief Executive Officer and a director of Eurostar. Although not a
member of the Core Sheth Families, Viren S. Sheth is related by blood to certain
members of the Core Sheth Families. Tristar engages in numerous transactions
with entities owned by the Core Sheth Families. For example, during fiscal 1994
and for the six months ended February 28, 1995, fragrance products supplied by
Eurostar represented approximately 79% and 78%, respectively, of Tristar's net
sales, and cosmetics supplied by another entity owned and controlled by the Core
Sheth Families, accounted for approximately 12% of Tristar's net sales.
Conversely, during fiscal 1994 and for the six months ended March 31, 1995,
approximately 85% and 66%, respectively, of Eurostar's sales were to Tristar.
See "The Merger -- Description of the Merger -- Transactions between Tristar and
Entities Owned by the Core Sheth Families." Shashikant S. Sheth, a member of the
Core Sheth Families, serves as a director of Tristar pursuant to a consensus
among the Core Sheth Families. After giving effect to the Merger, the Core Sheth
Families would beneficially own an aggregate of approximately 14 million shares
of Tristar Common Stock, or approximately 84% of Tristar's Common Stock (86%
assuming the exercise of all outstanding warrants). As a result, the Core Sheth
Families would control the election of the Tristar Board and would have control
of all other matters. In addition, the exercise price of certain warrants held
by an affiliate of the Core Sheth Families may be reduced in connection with the
Merger. See "The Merger -- Description of the Merger -- Repricing of Certain
Warrants".

The Core Sheth Families have interests in the production and worldwide
distribution of fragrance products, cosmetics and other health and beauty aids
("HBA Products"). It is anticipated that upon consummation of the Merger, the
Core Sheth Families will continue to distribute fragrance products in all
markets other than North and South America, except Argentina, in which an
affiliate of the Core Sheth Families will distribute the Surviving Corporation's
products, and that Tristar will distribute fragrance products only in North and
South America. Following the Merger, the Core Sheth Families will continue to
distribute cosmetics and HBA Products worldwide, and it is anticipated that the
Surviving Corporation will continue to distribute in North America cosmetics and
other HBA Product lines that Tristar currently distributes.

It is anticipated that after the Merger, the executive officers of
Eurostar will become comparable executive officers of Tristar.

See "The Merger -- Description of the Merger -- Interests of Certain
Persons in the Merger" and "The Merger -- Description of the Merger --
Transactions Between Tristar and Entities Owned by the Core Sheth Families".

EFFECTIVE TIME

The Merger will become effective when the Certificate of Merger is duly
filed with the Secretary of State of the State of Delaware and Articles of
Merger are filed with the Secretary of State of the State of Texas (the
"Effective Time"). The filing of the Certificate and Articles of Merger will be
made as soon as practicable after all conditions set forth in the Merger
Agreement have been satisfied or waived, including approval of the Merger by the
stockholders of Tristar. See "The Merger -- The Merger Agreement -- Effective
Time."

CONVERSION OF SHARES

At the Effective Time of the Merger, all the issued and outstanding shares
of Eurostar Common Stock immediately prior to the Effective Time will be
converted into the right to receive an aggregate of 9,977,810 shares of Tristar
Common Stock.

5
<PAGE> 14

EXCHANGE OF STOCK CERTIFICATES

On or before the Effective Time, Tristar will deliver to the sole
stockholder of Eurostar, instructions for surrendering its certificates
representing Eurostar Common Stock in exchange for a certificate or certificates
representing Tristar Common Stock. See "The Merger -- Exchange of Stock
Certificates".

CONDITIONS TO THE MERGER

The respective obligations of Tristar and Eurostar to consummate the
Merger are each subject to various conditions which are set forth under "The
Merger -- The Merger Agreement -- Conditions to the Merger." These include,
among others: (a) requisite stockholder approval; (b) the continued listing of
Tristar's Common Stock on the National Association of Securities Dealers, Inc.
Automated Quotation System ("NASDAQ") National Market System ("NASDAQ/NMS"); (c)
receipt by each party of various legal opinions, certificates and consents; and
(d) the truth in all material respects, as of the Effective Time, of the
representations and warranties of Tristar and Eurostar set forth in the Merger
Agreement. See "The Merger -- The Merger Agreement -- Conditions to the Merger."

TAX CONSEQUENCES

Tristar has received an opinion of Coopers & Lybrand L.L.P. to the effect
that the Merger will be treated for United States federal income tax purposes as
a reorganization within the meaning of Section 368(a) of the Internal Revenue
Code of 1986, as amended (the "Code"), that Tristar and Eurostar will each be a
party to the reorganization within the meaning of Section 368(b) of the Code and
that no gain or loss will be recognized by Tristar and Eurostar as a result of
the Merger. Eurostar has received an opinion of KPMG Peat Marwick LLP to the
effect that the Merger will be treated for United States federal income tax
purposes as a reorganization within the meaning of Section 368(a) of the Code,
that Tristar and Eurostar will each be a party to the reorganization within the
meaning of Section 368(b) of the Code and that no gain or loss will be
recognized by the sole stockholder of Eurostar as a result of the Merger. See
"The Merger -- Description of the Merger -- Certain U.S. Federal Income Tax
Consequences".

GOVERNMENTAL AND REGULATORY APPROVALS

Tristar and Eurostar are aware of no governmental or regulatory approvals
required for consummation of the Merger other than the filing of the Certificate
of Merger in Delaware and Articles of Merger in Texas.

ACCOUNTING TREATMENT

Tristar and Eurostar have each been advised by its respective independent
public accountants that the Merger will be accounted for in a manner similar to
a "pooling of interests" in accordance with generally accepted accounting
principles. See "Merger -- Description of Merger -- Accounting Treatment".

RIGHTS OF DISSENTING STOCKHOLDERS

Delaware Law does not require that holders of Tristar Common Stock who
object to the Merger and who vote against or abstain from voting in favor of the
Merger be afforded any appraisal rights or the right to receive cash for their
shares of Tristar Common Stock, and Tristar does not intend to make available
any such rights to its stockholders.

<PAGE> 15

MARKET PRICE DATA

Tristar's Common Stock is traded over-the-counter on the NASDAQ/NMS under
the symbol "TSAR". On May 30, 1995, the last trading day prior to the
announcement by Tristar that Eurostar had proposed the Merger, the closing bid
price for Tristar's Common Stock, as reported by NASDAQ, was $5.25. On July 28,
1995, the closing bid price for Tristar's Common Stock, as reported by NASDAQ,
was $5.3125. There is not and never has been any trading market for Eurostar
Common Stock.

Tristar has been notified by The Nasdaq Stock Market, Inc. that it may no
longer satisfy the requirements for continued listing on NASDAQ due to a
deficiency in its net tangible assets. Tristar has requested a waiver of such
requirement on the basis that Tristar will satisfy the net tangible asset
requirement if the Merger is consummated. Tristar anticipates that such waiver
will be granted and that Tristar will continue to be listed on the NASDAQ
following the Merger under the symbol "TSAR". If the Merger is not consummated,
Tristar will again request a waiver of the net tangible asset requirement from
The Nasdaq Stock Market, Inc., but there is no assurance that a waiver will be
granted.

7
<PAGE> 16

SUMMARY FINANCIAL INFORMATION

The following summary historical financial information for Tristar and Eurostar
has been derived from their respective historical consolidated financial
statements and should be read in conjunction with such financial statements and
the notes thereto included herein. The summary historical financial information
for Eurostar as of September 30, 1992 and for the period from March 5, 1992
(date of inception) through September 30, 1992, along with the summary
historical financial information for Tristar and Eurostar as of May 31, 1995 and
March 31, 1995, respectively, and for the nine month periods ended May 31, 1995
and 1994 and March 31, 1995 and 1994, respectively, has been derived from the
unaudited consolidated financial statements of Tristar and Eurostar,
respectively. The summary pro forma combined financial information is derived
from the unaudited pro forma consolidated combined financial statements
appearing elsewhere herein, which give effect to the Merger, in a manner similar
to that in a pooling of interests, and should be read in conjunction with such
pro forma statements and notes thereto.

The pro forma information is presented for illustrative purposes only and is not
necessarily indicative of the operating results or financial position that would
have occurred if the Merger had been consummated, nor is it necessarily
indicative of the future operating results or financial position of Tristar or
Eurostar.

8
<PAGE> 17

SUMMARY HISTORICAL FINANCIAL INFORMATION
(IN THOUSANDS EXCEPT PER SHARE DATA)

TRISTAR CORPORATION

<TABLE>
<CAPTION>
Years Ended August 31, Nine Months Ended
-------------------------------------------------------------- -------------------
May 31, May 31,
1994 1993 1992 1991 1990 1995 1994
--------- --------- -------- -------- -------- ------- -------
<S> <C> <C> <C> <C> <C> <C> <C>
Historical statement of (Unaudited)
income data:
Net sales $ 46,488 $ 51,409 $ 47,519 $ 30,865 $ 18,185 $24,091 $35,861
Net income (loss) (4,291) (8,159) 3,287 1,977 387 (1,621) (2,574)
Net income (loss) per
common share:
Primary (.65) (1.23) .46 .30 .06 (.24) (.39)
Fully diluted (.65) (1.23) .46 .28 .06 (.24) (.39)

Historical balance sheet data:
Total assets $ 21,021 $ 23,218 $ 19,700 $ 13,745 $ 11,504 $18,464
Short-term borrowings 4,511 2,505 3,630 1,706 2,027 3,964
Long-term debt 9,554 9,515 1,088 1,282 1,502 8,031
Cash dividends declared
per common share 0 0 0 0 0 0
</TABLE>

The Company recorded a shareholder litigation settlement of $9.5 million in
fiscal 1993 in connection with a class action stockholder lawsuit. See Note 12
of the Notes to Consolidated Financial Statements.

The Company recorded legal and professional expenses of $208,000, $2,758,000 and
$1,650,000 in fiscal 1994, 1993 and 1992, respectively, associated with the
stockholder litigation and other events that were subject of an internal
investigation by the Special Committee of the Board. See Note 13 of the Notes to
Consolidated Financial Statements.

The Company recorded a $2,065,000 insurance reimbursement in the nine month
period ended May 31, 1995. See Note 16 of the Notes to Consolidated Financial
Statements.

The Company has significant related party transactions. See Note 6 of the Notes
to Consolidated Financial Statements.

The Company adopted Statement of Financial Accounting Standards No. 109 ("SFAS
No. 109"), "Accounting for Income Taxes," in fiscal 1992. The adoption of SFAS
No. 109 had no impact on the Company's results of operations in fiscal 1992.

All per share amounts have been adjusted to reflect a 2-for-1 common stock split
in the form of a dividend effected on February 21, 1992.

9
<PAGE> 18

SUMMARY HISTORICAL FINANCIAL INFORMATION
(IN THOUSANDS EXCEPT PER SHARE DATA)

EUROSTAR PERFUMES, INC.

<TABLE>
<CAPTION>
Nine Months Ended
Years Ended September 30, ---------------------
------------------------- March 5, 1992 through March 31, March 31,
1994 1993 September 30, 1992 1995 1994
------- ------- --------------------- --------- ---------
(Unaudited) (Unaudited)
<S> <C> <C> <C> <C> <C>
Historical statement of income
data:
Net sales $31,481 $28,145 $ 216 $25,708 $24,605
Net income (loss) 3,162 3,839 (499) 1,533 3,346
Net income (loss) per common share 3.16 3.83 (.49) 1.53 3.34

Historical balance sheet data:
Total assets $19,636 $19,914 $ 8,071 $17,745
Short-term borrowings 0 0 0 0
Long-term debt 4,166 6,469 5,909 5,016
Cash dividends declared per
common share 0 0 0 0
</TABLE>

The Company was incorporated on March 5, 1992. Fiscal 1992 statement of income
data is for the period from March 5, 1992 through September 30, 1992.

The Company changed its method of costing inventory from the first-in, first-out
(FIFO) method to the last-in, first-out (LIFO) method in fiscal 1994. There was
no cumulative effect adjustment related to this accounting change. See Note 1 of
the Notes to Consolidated Financial Statements.

10
<PAGE> 19

UNAUDITED SUMMARY PRO FORMA COMBINED FINANCIAL INFORMATION
(IN THOUSANDS EXCEPT PER SHARE DATA)

<TABLE>
<CAPTION>
Nine Months Ended
Years Ended August 31, -------------------
----------------------------- May 31, May 31,
1994 1993 1992 1995 1994
------- ------- ------- ------- --------
<S> <C> <C> <C> <C> <C>
Pro forma combined statement
of income data:
Net sales $50,687 $54,450 $47,735 $32,163 $37,599
Net income (loss) 1,010 (5,107) 2,788 608 1,586
Net income (loss) per common
share:
Primary .06 (.31) .22 .04 .09
Fully diluted .06 (.31) .22 .04 .09

<CAPTION>
May 31,
1995
-------
<S> <C>
Pro forma combined balance
sheet data:
Total assets $35,234
Short-term borrowings 4,348
Long-term debt 13,047
Cash dividends declared per
common share 0
</TABLE>

The pro forma combined statement of income data for all periods presented give
effect to the Merger, in a manner similar to that in a pooling of interests, as
if it occurred as of March 5, 1992 (Eurostar's date of inception).

The pro forma combined balance sheet data give effect to the Merger, in a manner
similar to that in a pooling of interests, as if it occurred as of May 31, 1995.

The pro forma combined statement of income data reflect the combination of the
consolidated financial statements of Tristar for the years ended August 31,
1994, 1993 and 1992 and the nine month periods ended May 31, 1995 and 1994 with
the consolidated financial statements of Eurostar for the years ended September
30, 1994 and 1993, the period from March 5, 1992 (date of inception) through
September 30, 1992 and the nine month periods ended March 31, 1995 and 1994.

11
<PAGE> 20
COMPARATIVE PER SHARE DATA

The following tables set forth certain historical per share data of Tristar and
Eurostar and combined per share data on an unaudited pro forma basis after
giving effect to the Merger, in a manner similar to that in a pooling of
interests, and after giving effect to the issuance of 9,977,810 shares of
Tristar Common Stock in the Merger. This data should be read in conjunction with
the selected historical and pro forma financial data, the unaudited pro forma
consolidated combined financial statements and notes thereto included elsewhere
in this Proxy Statement, and the separate consolidated historical financial
statements and notes thereto of Tristar and Eurostar included elsewhere in this
Proxy Statement. The unaudited pro forma combined financial data are not
necessarily indicative of the operating results that would have been achieved
had the Merger been in effect as of the beginning of the periods presented and
should not be construed as representative of future operations. Neither Tristar
nor Eurostar has ever declared or paid cash dividends on its respective shares
of common stock.

<TABLE>
<CAPTION>
Nine Months Ended
Years Ended August 31, ----------------------------
------------------------------------------- May 31, May 31,
1994 1993 1992 1995 1994
------------ ----------- -------------- ------------ -------------
<S> <C> <C> <C> <C> <C>
Tristar Historical:
Net income (loss) $ (0.65) $ (1.23) $ 0.46 $ (0.24) $ (0.39)
Book value $ 0.39 $ 0.23
</TABLE>

<TABLE>
<CAPTION>
March 5, 1992 Nine Months Ended
Years Ended September 30, through ---------------------------
---------------------------- September 30, March 31, March 31,
1994 1993 1992 1995 1994
------------- ------------- ------------- ------------- ------------
<S> <C> <C> <C> <C> <C>
Eurostar
Historical:
Net income (loss) $ 3.16 $ 3.83 $ (0.49) $ 1.53 $ 3.34
Book value $ 6.60 $ 7.72
</TABLE>

<PAGE> 21

<TABLE>
<CAPTION>
Nine Months Ended
Years Ended August 31, ----------------------------
------------------------------------------- May 31, May 31,
1994 1993 1992 1995 1994
------------- ------------ ------------- ------------- -------------
<S> <C> <C> <C> <C> <C>
Pro forma combined--Tristar
and Eurostar:
Net income (loss) (1) $ 0.06 $ (0.31) $ 0.22 $ 0.04 $ 0.09
Book value (1) $ 0.62

Equivalent Pro Forma
combined--Eurostar
Perfumes, Inc.:
Net income (loss) (2) $ 0.60 $ (3.09) $ 2.20 $ 0.40 $ 0.90
Book value (2) $ 6.19
</TABLE>

(1) Pro forma combined net income (loss) per share is computed by dividing
pro forma net income by the Tristar weighted average number of common and
common equivalent shares after giving effect to the 9,977,810 shares of
Tristar Common Stock to be issued in connection with the Merger. Pro
forma combined book value per share is computed by dividing pro forma
combined shareholders' equity by the number of shares of Tristar Common
Stock after giving effect to the 9,977,810 shares of Tristar Common Stock
to be issued in connection with the Merger. Pro forma book value per
share does not reflect the exercise of outstanding stock options or
warrants.

(2) Equivalent pro forma combined net income (loss) and book value per share
are computed by multiplying the pro forma combined net income per share
and book value per share by the conversion ratio in the Merger of 9.98.

13
<PAGE> 22

SPECIAL CONSIDERATIONS

PRIOR TO VOTING UPON THE MERGER PROPOSAL, STOCKHOLDERS OF TRISTAR SHOULD
CONSIDER CAREFULLY THE FOLLOWING SPECIAL CONSIDERATIONS RELATING SPECIFICALLY TO
THE PROPOSAL TO MERGE, AS WELL AS THE OTHER INFORMATION SET FORTH ELSEWHERE IN
THIS PROXY STATEMENT.

Further Dilution of Voting Power. The Core Sheth Families currently
beneficially own 60.5% of the outstanding shares of Tristar Common Stock (71%
assuming the exercise of all outstanding warrants). After giving effect to the
Merger, the Core Sheth Families would beneficially own approximately 84% of the
outstanding shares of Tristar Common Stock (86% assuming the exercise of all
outstanding warrants). Therefore, current stockholders of Tristar will face
further dilution of the voting power of the Tristar Common Stock presently held
by such stockholders. As a result, the Core Sheth Families will continue to have
control over the election of Tristar's Board and other matters pertaining to
corporate governance. In addition, following the Merger, matters requiring
approval of 66 2/3% of the outstanding shares of Tristar's capital stock,
including the merger, consolidation or exchange of Tristar's capital stock in a
transaction involving a substantial stockholder or affiliate, or the sale,
lease, exchange or other disposition of all or substantially all of Tristar's
assets, could be effectuated solely by a vote of the shares owned by the Core
Sheth Families. To the extent that the repricing of certain warrants held by the
Core Sheth Families makes it more likely that such warrants would be exercised,
the exercise of such warrants would have a dilutive effect on the ownership
position of the current holders of Tristar Common Stock other than the Core
Sheth Families and their affiliates.

Conflicts of Interest. The Core Sheth Families is a group which is the
beneficial owner of 60.5% of the Tristar Common Stock (71% assuming the exercise
of all outstanding warrants) and all of the Eurostar Common Stock. Viren S.
Sheth is President, Chief Executive Officer and a member of the Tristar Board,
and also serves as the President, Chief Executive Officer and a director of
Eurostar. Although not a member of the Core Sheth Families, Viren S. Sheth is
related by blood to certain members of the Core Sheth Families. Shashikant S.
Sheth, a member of the Core Sheth Families, serves as a director of Tristar
pursuant to a consensus among the Core Sheth Families. Tristar engages in
numerous transactions with entities owned by the Core Sheth Families. For
example, during fiscal 1994 and for the six months ended February 28, 1995,
fragrance products supplied by Eurostar represented approximately 79% and 78%,
respectively, of Tristar's net sales, and cosmetics supplied by another entity
owned and controlled by the Core Sheth Families, accounted for approximately 12%
of Tristar's net sales. Conversely, during fiscal 1994 and for the six months
ended March 31, 1995, approximately 85% and 66%, respectively, of Eurostar's
sales were to Tristar. See "The Merger -- Description of the Merger --
Transactions between Tristar and Entities Owned by the Core Sheth Families." In
addition, the exercise price of certain warrants held by an affiliate of the
Core Sheth Families may be reduced in connection with the Merger. See "The
Merger -- Description of the Merger -- Repricing of Certain Warrants".

Certain potential conflicts of interest in connection with the
Distribution Agreement (as defined herein), including issues with respect to the
pricing of products purchased from Tristar by Eurostar and the territories in
which Tristar is permitted to distribute such products, will be eliminated as a
result of the Merger. Following the Merger, other potential conflicts of
interest between the Surviving Corporation and affiliates of the Core Sheth
Families may arise. It is anticipated that, following the Merger, sales by
Tristar of cosmetic pencils to affiliates of the Core Sheth Families will
continue. It is also expected that sales formerly made by Eurostar to
foreign-based affiliates of the Core Sheth Families located principally in
Argentina (approximately $641,000 for the year ended September 30, 1994) and
inventory purchases from affiliates (approximately $5,788,000 for the year ended
September 30, 1994) will continue following the Merger. In addition, it is
anticipated that upon consummation of the Merger, the Core Sheth Families, who
have interests in the production and worldwide distribution of fragrance
products, cosmetics and other HBA Products, will continue to distribute
fragrance products in all markets other than North and South America, except
Argentina, in which an affiliate of the Core Sheth Families will distribute the
Surviving Corporation's products, and that Tristar will distribute fragrance
products only in North and South America. The Core Sheth Families will continue
to distribute cosmetics and HBA Products worldwide, and it is anticipated that
the Surviving Corporation will continue to distribute in North America cosmetics
and HBA Product lines that Tristar currently distributes.

<PAGE> 23

The Economy. Weak economic conditions in Tristar's markets in Mexico, the
United States and Canada in the past have resulted in decreased sales of
Tristar's products. The residual effects of the earlier economic weakness are
expected to continue to have adverse effects on sales.

Devaluation of the Peso. In late December 1994, the Mexican government
devalued the Mexican Nuevo Peso by allowing the Peso to float freely against the
U.S. dollar. This devaluation has resulted in a general increase of 80% or more
in the cost of imported products to the Mexican consumer. The increase and the
resultant instability has caused a sharp decline in purchases of Tristar's
products by the Mexican consumer. It is not known when and if the Peso will
stabilize and somewhat normal purchasing will resume. Prior to the recent
economic and political instability, sales directly and indirectly to Mexico
accounted for a significant portion of Tristar's total sales. Management of
Tristar believes that weak economic conditions in Mexico combined with the
devaluation of the Mexican currency will continue to adversely impact sales.

The Mexican Market. A significant portion of Tristar's products are sold,
directly or indirectly, into the Mexican market, and these sales are dependent
upon passage of Tristar's products through the border between the United States
and Mexico. There have been general disruptions in the passage of products
through this border, some of which have affected the passage of Tristar's
products. Such disruptions have had and could continue to have an adverse effect
on Tristar's sales. Moreover, Tristar believes that some of its customers based
in the United States sell Tristar's products (as well as the products of other
companies) to purchasers who, in turn, may attempt to import goods into Mexico
without full payment of applicable Mexican taxes and customs duties. Enhanced
enforcement efforts by Mexican authorities may have an adverse effect on
Tristar's sales to such customers.

Tristar has been unable to determine the effect, if any, that the
implementation of the North American Free Trade Agreement (the "NAFTA") has had
or subsequently will have on Tristar's business.

Loss of Foreign-Based Customers. Under the distribution agreement
concluded in October 1992 between Tristar and its fragrance suppliers, Tristar
agreed not to sell or cause to be sold any products of those suppliers in any
countries other than the United States, Mexico, Canada and Puerto Rico. In
fiscal 1993, direct sales of products outside the named countries were
approximately 7% of total net sales while in fiscal 1994 such sales were
negligible. Indirect sales to those countries outside of Tristar's marketing
territories through U.S.-based customers continued into the latter part of
fiscal 1994 with indications that such sales were declining. While management
believes that the amount of these lost sales can be replaced by additional sales
in the named countries, to date, due to economic conditions and slower than
anticipated growth in the mass merchandising channel, Tristar has not been
successful in doing so.

No Assurance That Tristar or Its Stockholders Will Realize Anticipated
Benefits from the Merger. The Acquisition Committee and the Tristar Board have
given careful consideration to the Merger and believe it to be in the best
interest of Tristar's stockholders. However, the Merger involves the combination
of certain aspects of two companies that have operated independently.
Accordingly, there can be no assurance that Eurostar can be successfully
integrated into Tristar or that Tristar and its stockholders will ultimately
realize any of the anticipated benefits of the Merger.

GENERAL INFORMATION ABOUT THE MEETING

GENERAL

This Proxy Statement is being furnished to the stockholders of Tristar in
connection with the solicitation of proxies by the Tristar Board from holders of
outstanding shares of Tristar Common Stock for use at the Special Meeting. At
the Special Meeting, Tristar stockholders will be asked to consider and vote
upon the approval of the Merger, the Merger Agreement and the issuance of shares
of Tristar Common Stock in connection with the Merger. Further, Tristar
stockholders will be asked to vote on the amendment, subject to the approval of
the Merger, of Tristar's Certificate of Incorporation to increase the number of
authorized shares of Tristar Common Stock from 10,000,000 shares to 30,000,000
shares.

<PAGE> 24

The principal executive offices of Tristar are located at 12500 San Pedro
Avenue, Suite 500, San Antonio, Texas 78216, and its telephone number is (210)
402-2200. The principal executive offices of Eurostar are located at 1 Eurostar
Drive, Pleasanton, Texas 78064, and its telephone number is (210) 281-6000.

MERGER -- CONSIDERATION; REPRICING OF WARRANTS

Upon consummation of the Merger, all issued and outstanding shares of
Eurostar Common Stock will be converted into the right to receive an aggregate
of 9,977,810 shares of Tristar Common Stock. The number of shares to be received
by Eurostar is based on a valuation of Eurostar and Tristar at approximately 60%
and 40%, respectively, of the value of the combined entities. On May 31, 1995,
the date on which the Merger was announced, the aggregate market value of
Tristar Common Stock to be received by Eurostar was $52,383,503 (based on a
closing price of $5.25 per share on May 31, 1995), and the aggregate market
value of the outstanding Tristar Common Stock on such date was $34,922,333
(based on a closing price of $5.25 per share on May 31, 1995). In addition, the
exercise price of certain warrants held by an affiliate of the Core Sheth
Families may be reduced in connection with the Merger. See "The Merger --
Description of the Merger -- Repricing of Certain Warrants".

VOTING AND PROXIES

Holders of record of shares of Tristar Common Stock at the close of
business on the Record Date, will be entitled to vote at the Special Meeting and
at any adjournment or postponement thereof. At the close of business on the
Record Date, there were 6,651,873 shares of Tristar Common Stock outstanding.

The affirmative vote of the holders of 66 2/3% of the outstanding shares
of Tristar Common Stock is required for approval and adoption of the Merger
Agreement, and the affirmative vote of a majority of the outstanding shares of
Tristar Common Stock is required for approval of the amendment to Tristar's
Certificate of Incorporation. The Core Sheth Families, who beneficially own
60.5% of the outstanding shares of Tristar Common Stock (71% assuming the
exercise of all outstanding warrants) and all of the outstanding shares of
Eurostar Common Stock, have indicated to Tristar that they intend to vote all of
their shares in favor of the Merger Agreement and the amendment to Tristar's
Certificate of Incorporation. The presence, either in person or by proxy, of the
holders of at least a majority of the outstanding shares of Tristar Common Stock
entitled to vote is necessary to constitute a quorum at the Special Meeting.

The holder of each outstanding share of Tristar Common Stock is entitled
to one vote per share on all proposals considered at the Special Meeting. On all
matters considered at the Special Meeting, broker non-votes will be treated as
neither a vote "for" nor "against" the matter, although they will be counted in
determining if a quorum is present. However, abstentions are considered in
determining the number of votes required to attain a majority of the shares
present or represented at the Special Meeting and entitled to vote. Accordingly,
an abstention from voting on a matter by a stockholder present in person or
represented by proxy at the meeting has the same legal effect as a vote
"against" the matter because it represents a share present or represented at the
Special Meeting and entitled to vote, thereby increasing the number of
affirmative votes required to approve the matter under consideration, but is not
considered an affirmative vote for the matter, even though the stockholder or
interested parties analyzing the results of the voting may interpret such a vote
differently, believing that an abstention expresses neither an affirmative or
negative position on the matter. In addition, because the vote required for the
Merger is 66 2/3% of all outstanding shares entitled to vote thereon, the
failure to vote, by proxy or in person, will have the same effect as a vote
against the Merger.

ALL SHARES OF TRISTAR COMMON STOCK REPRESENTED BY PROPERLY EXECUTED
PROXIES WILL BE VOTED AT THE SPECIAL MEETING IN ACCORDANCE WITH THE DIRECTIONS
INDICATED ON THE RESPECTIVE PROXIES UNLESS THE PROXIES HAVE BEEN PREVIOUSLY
REVOKED. UNLESS CONTRARY DIRECTION IS GIVEN, ALL TRISTAR SHARES REPRESENTED BY
SUCH PROXIES WILL BE VOTED FOR THE MERGER, FOR THE AMENDMENT TO TRISTAR'S
CERTIFICATE OF INCORPORATION AND IN THE PROXY HOLDER'S DISCRETION AS TO SUCH
OTHER MATTERS INCIDENT TO THE CONDUCT OF THE SPECIAL MEETING AS MAY PROPERLY
COME BEFORE STOCKHOLDERS AT THE SPECIAL MEETING.

<PAGE> 25

If any other matters are properly presented at the Special Meeting for
action, including a question of adjourning the meeting from time to time, the
persons named in the proxies and acting thereunder will have discretion to vote
on those matters in accordance with their best judgment. The Special Meeting may
be adjourned, and additional proxies solicited if, at the time of the Special
Meeting, the vote necessary to approve the proposals has not been obtained.

A Tristar stockholder executing and returning a proxy has the power to
revoke the proxy at any time before it is voted. A stockholder who wishes to
revoke a proxy can do so by executing a later-dated proxy relating to the same
shares and delivering it to the Secretary of Tristar prior to the vote at the
Special Meeting, by giving written notice of revocation to the Secretary prior
to the vote at the Special Meeting or by appearing in person at the Special
Meeting and voting in person the shares to which the proxy relates. Any written
notice revoking a Tristar proxy should be sent to Tristar Corporation, 12500 San
Pedro Avenue, Suite 500, San Antonio, Texas 78216, Attention: Secretary.

SOLICITATION

Tristar will bear its own expenses in connection with this solicitation,
including the cost of preparing and mailing this Proxy Statement. In addition to
solicitation by use of the mails, proxies may be solicited by directors,
officers and employees of Tristar, in person or by telephone, telegram or other
means of communication. Such directors, officers and employees will not be
additionally compensated, but may be reimbursed for reasonable out-of-pocket
expenses in connection with such solicitation. Arrangements will also be made
with custodians, nominees and fiduciaries for forwarding of proxy solicitation
materials to beneficial owners of shares held of record by such custodian,
nominees and fiduciaries, and Tristar will reimburse such custodians, nominees
and fiduciaries for reasonable expenses incurred in connection therewith.

Tristar has retained Georgeson to assist in the solicitation of proxies.
Georgeson will distribute on behalf of Tristar all proxy soliciting material to
brokers, banks and institutional holders. In addition, Georgeson will solicit
proxies on behalf of Tristar from brokers, banks and institutions. Georgeson
will receive from Tristar a fee of $5,000, plus expenses, for such services.

PROPOSAL NO. 1 -- THE MERGER

THE DESCRIPTION OF THE MERGER CONTAINED IN THIS PROXY STATEMENT IS
QUALIFIED IN ITS ENTIRETY BY REFERENCE TO THE MERGER AGREEMENT, THE FULL TEXT OF
WHICH IS CONTAINED IN APPENDIX A HERETO AND IS INCORPORATED HEREIN BY REFERENCE
AND TO WHICH REFERENCE IS HEREBY MADE FOR THE TERMS THEREOF.

DESCRIPTION OF THE MERGER

GENERAL

Upon consummation of the Merger, Eurostar will merge with and into
Tristar, and Tristar will be the Surviving Corporation. Transvit, the sole
stockholder of Eurostar, will receive 9,977,810 shares of Tristar Common Stock
in exchange for all the issued and outstanding shares of Eurostar Common Stock.
In connection with the Merger, the exercise price of certain warrants held by an
affiliate of the Core Sheth Families may be reduced. See "-- Repricing of
Certain Warrants". The number of shares to be received by Eurostar is based on a
valuation of Eurostar and Tristar at approximately 60% and 40%, respectively, of
the value of the combined entities. On May 31, 1995, the date on which the
Merger was announced, the aggregate market value of Tristar Common stock to be
received by Eurostar was $52,383,503 (based on a closing price of $5.25 per
share on May 31, 1995), and the aggregate market value of the outstanding
Tristar Common Stock on such date was $34,922,333 (based on a closing price of
$5.25 per share on May 31, 1995). The Merger will be effective after
satisfaction (absent waivers) of all conditions contained in the Merger
Agreement, including the approval of the Merger by the stockholders of Tristar.

After the Merger, approximately 16.6 million shares of Tristar Common
Stock will be outstanding, of which approximately 14 million shares,
representing approximately 84% of the total, will be held directly or indirectly
by the Core Sheth Families. The Core Sheth Families also hold warrants to
acquire an additional 2,400,000 shares of Tristar Common Stock, which, if
exercised, would increase their beneficial ownership to approximately 86% of the
outstanding shares of Tristar Common Stock.

<PAGE> 26

BACKGROUND OF THE MERGER

After the independent members of the Tristar Board raised the possibility
of a merger, Viren S. Sheth, at Tristar's Executive Committee meeting on April
11, 1995, advised the Executive Committee that the Core Sheth Families were
interested in exploring a merger of Eurostar and Tristar. In anticipation of an
offer from Eurostar, the Tristar Board appointed Messrs. Richard P. Rifenburgh
and Robert R. Sparacino to serve as the Acquisition Committee to consider how
Tristar should respond to such an offer. Messrs. Rifenburgh and Sparacino are
non-employee directors of Tristar and independent of the Core Sheth Families.
The Acquisition Committee selected HFBE as its financial advisor. Since its
formation on April 11, 1995, the Acquisition Committee has been continuously
engaged in discussions with representatives of Eurostar and has had frequent
discussions with the Acquisition Committee's advisors.

On May 26, 1995, after ongoing discussions and negotiations between the
Acquisition Committee and representatives of Eurostar, Eurostar submitted to the
Acquisition Committee a preliminary merger proposal (the "Preliminary Merger
Proposal"), which involved the issuance of an aggregate of approximately 37.7
million shares of Tristar Common Stock in exchange for all the issued and
outstanding shares of Eurostar Common Stock, whereby the Core Sheth Families
would beneficially own approximately 94% of the outstanding shares of Tristar
Common Stock following the Merger. After an extensive review of the Preliminary
Merger Proposal by the Acquisition Committee and its advisors, the Acquisition
Committee informed Eurostar that it would not accept the terms proposed and such
proposal was rejected. The Acquisition Committee continued to discuss the
possibility of a Merger of Tristar and Eurostar over the next few days.

On May 31, 1995, Eurostar submitted a revised merger proposal (the
"Revised Merger Proposal"), which involved the issuance of an aggregate of
9,977,810 shares of Tristar Common Stock in exchange for all of the issued and
outstanding shares of Eurostar Common Stock, whereby the Core Sheth Families
would own approximately 84% of the outstanding shares of Tristar Common Stock
following the Merger (approximately 86% assuming the exercise of all outstanding
warrants). After actively engaging in an analysis of the Revised Merger
Proposal, the Acquisition Committee unanimously adopted a resolution
recommending that the Tristar Board approve the Revised Merger Proposal, subject
to the receipt of a fairness opinion from HFBE and the negotiation of a
definitive agreement and plan of merger. Following that meeting, the Tristar
Board considered the Revised Merger Proposal. Following a report by the chairman
of the Acquisition Committee that the Acquisition Committee recommend the
approval of the Revised Merger Proposal, the Tristar Board, with Viren S. Sheth
abstaining and Shashikant S. Sheth absent, approved the Revised Merger Proposal,
subject to the receipt of a fairness opinion from HFBE and the negotiation of a
definitive agreement and plan of merger. On June 16, 1995, after receiving the
Merger Agreement and a fairness opinion from HFBE, the Acquisition Committee
adopted a resolution recommending that the Tristar Board approve the Merger
Agreement submitted, and the Tristar Board, including members of the Acquisition
Committee, unanimously approved the Merger Agreement.

Following the Tristar Board's approval, the Merger Agreement was signed by
Tristar, Transvit and Eurostar.

MATERIAL ADVANTAGES AND DISADVANTAGES OF THE MERGER

The Acquisition Committee has taken into account the advantages of the
proposed Merger to the holders of Tristar Common Stock. Such advantages include:

Elimination of a Potential Going Concern Issue. Tristar has experienced
severe business reversals during fiscal 1995. In particular, the devaluation of
the Mexican peso significantly reduced sales in Mexico, Tristar's largest
market. This has created a situation which, if it were to continue without any
improvement in profitability or cash flow, could jeopardize Tristar's ability to
continue as a going concern at some time in the future. Although Eurostar was
also affected by the Mexican economic upheaval, Eurostar's relative financial
strength is expected to remedy this situation.

Broadening of the Market Base. Eurostar has initiated a rapid expansion
marketing program in South and Central America. The Merger will result in the
Surviving Corporation's having a hemisphere-

<PAGE> 27

wide market. Efficiencies in product design, common distribution facilities,
integrated inventories and combined marketing strategies should reduce costs,
increase market recognition and improve product introduction time. The expanded
markets resulting from the Merger would give greater protection against regional
economic problems, such as weak economic conditions in Mexico and the Mexican
currency devaluation. While the Surviving Corporation would still be susceptible
to a broad economic downturn in North and South America, it could better
withstand more regionalized problems.

Elimination of Certain Potential Conflicts with Eurostar. Various
potential conflicts of interest of the Core Sheth Families arise as a result of
its being the majority stockholder of both Tristar and Eurostar. Upon
consummation of the Merger, potential conflicts of interest with respect to
operations under the distribution agreement concluded in 1992 between Tristar
and its fragrance suppliers will be eliminated, including pricing of products
purchased by Tristar from Eurostar, and territories in which Tristar is
permitted to distribute such products. However, following the Merger, the
Surviving Corporation will continue to have potential conflicts of interest with
affiliates of the Core Sheth Families. It is anticipated that, following the
Merger, sales by the Surviving Corporation of cosmetic pencils to affiliates of
the Core Sheth Families will continue. It is also expected that sales formerly
made by Eurostar to foreign-based affiliates of the Core Sheth Families located
principally in Argentina (approximately $641,000 for the year ended September
30, 1994) and inventory purchases from affiliates (approximately $5,788,000 for
the year ended September 30, 1994) will continue following the Merger. In
addition, it is anticipated that upon consummation of the Merger, the Core Sheth
Families, who have interests in the production and worldwide distribution of
fragrance products, cosmetics and other HBA Products, will continue to
distribute fragrance products in all markets other than North and South America,
except Argentina, in which an affiliate of the Core Sheth Families will
distribute the Surviving Corporation's products, and that Tristar will
distribute fragrance products only in North and South America. The Core Sheth
Families will continue to distribute cosmetics and HBA Products worldwide, and
it is anticipated that the Surviving Corporation will continue to distribute in
North America cosmetics and HBA Product lines that Tristar currently
distributes.

Current Non-Compliance with Certain NASDAQ Listing Requirements. Tristar
has been notified by The Nasdaq Stock Market, Inc. that it may no longer satisfy
the requirements for continued listing on NASDAQ due to a deficiency in its net
tangible assets. Tristar has requested a waiver of such requirement on the basis
that the consummation of the Merger will allow Tristar to rectify such
noncompliance. Tristar anticipates that it will receive such waiver and continue
to be listed on NASDAQ following the Merger. If the Merger is not consummated,
Tristar will again request a waiver of the net tangible asset requirement from
The Nasdaq Stock Market, Inc., but there is no assurance that a waiver will be
granted.

Merger Agreement Terms. The Acquisition Committee has taken into account
the terms of the Merger Agreement, including Eurostar's representations and
warranties and the conditions to closing.

The Acquisition Committee has also taken into account the disadvantages of
the proposed Merger to the holders of Tristar Common Stock. Such disadvantages
include:

Dilution of Voting Power. After giving effect to the Merger, the Core
Sheth Families would beneficially own approximately 84% of the outstanding
shares of Tristar Common Stock (86% assuming the exercise of all outstanding
warrants). Therefore, current stockholders of Tristar will face further dilution
of the voting power of Tristar's Common Stock presently held by such
stockholders.

Increase of Voting Power to Greater than 66 2/3%. Matters requiring
approval of 66 2/3% of the outstanding shares of Tristar's capital stock,
including in certain cases the merger, consolidation or exchange of Tristar's
capital stock in a transaction involving a substantial stockholder or affiliate,
or the sale, lease, exchange or other disposition of all or substantially all of
Tristar's assets, could be effectuated solely by a vote of the shares owned by
the Core Sheth Families, following the Merger.

Possible Future Dilution from Repricing of Certain Warrants. To the extent
that the repricing of certain warrants held by the Core Sheth Families makes it
more likely that such warrants would be exercised, the exercise of such warrants
would have a dilutive effect on the ownership position of the current holders of
Tristar Common Stock other than the Core Sheth Families and their affiliates.
See "The Merger - Description of the Merger - Repricing of Certain Warrants."

RECOMMENDATION OF THE ACQUISITION COMMITTEE AND THE TRISTAR BOARD AND REASONS
FOR THE MERGER

For the reasons set forth under "-- Background of the Merger" and "--
Material Advantages and Disadvantages of the Merger", and considering that HFBE
rendered a favorable fairness opinion regarding the financial terms of the
Merger, the Acquisition Committee arrived at its conclusion to

<PAGE> 28

recommend approval of the Merger Agreement to the Tristar Board. See "The Merger
- -- Description of the Merger -- Opinion of the Acquisition Committee's Financial
Advisor".

In view of the variety of factors considered by the Acquisition Committee
and the Tristar Board in connection with their respective evaluations of the
Merger, the Acquisition Committee and Tristar Board did not find it practicable
to, and did not, quantify or otherwise assign relative weights to the specific
factors considered in reaching their respective determinations.

In light of the recommendation of the Acquisition Committee, and following
consideration by the Tristar Board of the effects of the transactions and the
review of the Acquisition Committee's work and the basis for its recommendation,
the Tristar Board, including the members of the Acquisition Committee,
unanimously approved the Merger Agreement. The Tristar Board recommends that
Tristar stockholders vote FOR approval and adoption of the Merger Agreement.

OPINION OF THE ACQUISITION COMMITTEE'S FINANCIAL ADVISOR

The Acquisition Committee retained HFBE to render an opinion as to the
fairness from a financial point of view to Tristar and its stockholders, other
than the Core Sheth Families and their affiliates, of the consideration to be
paid by Tristar in the Merger. HFBE was selected by the Acquisition Committee to
serve as the Acquisition Committee's financial advisor based on HFBE's
qualifications, expertise and reputation. HFBE was not requested to and did not
make any recommendation to the Acquisition Committee as to the form or amount of
the consideration to be paid to stockholders of Eurostar in the Merger, which
was determined through arm's-length negotiation between Tristar and Eurostar.

HFBE has delivered to the Acquisition Committee its written opinion to the
effect that, as of August 3, 1995, and based on the matters described therein,
the consideration to be paid by Tristar pursuant to the Merger is fair to
Tristar and its stockholders, other than the Core Sheth Families and their
affiliates, from a financial point of view. HFBE's opinion does not constitute a
recommendation to any stockholder of Tristar as to how such stockholder should
vote with respect to the Merger. The complete text of that opinion is attached
to this Proxy Statement as Appendix B and the summary of the opinion set forth
in this Proxy Statement is qualified in its entirety by reference to the
opinion. Tristar stockholders are urged to read such opinion carefully and in
its entirety for a description of the procedures followed and the factors
considered by HFBE.

In rendering its written opinion, HFBE: (i) reviewed Tristar's Annual
Report, Form 10-K and related financial information for the fiscal year ended
August 31, 1994, and Form 10-Q and related financial information for the fiscal
quarters ended November 30, 1994, and February 28, 1995; (ii) reviewed
Eurostar's financial information for the fiscal year ended September 30, 1994,
and related financial information for the fiscal quarters ended December 31,
1994, and March 31, 1995; (iii) reviewed certain information, including
financial forecasts, relating to the business, earnings, cash flow, assets and
prospects of Eurostar and Tristar furnished to HFBE by Eurostar and Tristar;
(iv) conducted discussions with members of senior management of Eurostar and
Tristar concerning their respective businesses and prospects; (v) reviewed the
historical market prices and trading activity for Tristar's Common Stock and
compared them with that of certain companies which HFBE deemed to be reasonably
similar to Tristar; (vi) compared the results of operations of Eurostar and
Tristar with that of certain companies which it deemed to be reasonably similar
to Eurostar and Tristar, respectively; (vii) considered the pro forma effect of
the Merger on certain of Tristar's income statement and balance sheet items;
(viii) reviewed the Merger Agreement; and (ix) reviewed such other matters as
HFBE deemed necessary, including an assessment of general economic, market and
monetary conditions.

In preparing its opinion, HFBE relied on the accuracy and completeness of
all information supplied or otherwise made available to HFBE by Tristar and
Eurostar and assumed that financial forecasts had been reasonably prepared on
bases reflecting the best currently available estimates and judgments of the
managements of Tristar and Eurostar as to the expected future financial
performance of their respective companies. HFBE did not independently verify
such information or assumptions, including financial forecasts, or undertake an
independent appraisal of the assets of Tristar or Eurostar. HFBE's opinion is
based upon market, economic, financial and other conditions as they exist and
can be evaluated as of the date of the opinion. HFBE's opinion does not
constitute a recommendation to any stockholder of Tristar as to how any such
stockholder should vote on the Merger. The opinion does not address the relative
merits of the Merger and any other transactions or business strategies discussed
by

<PAGE> 29

the Acquisition Committee as alternatives to the Merger or the decision of the
Tristar Board to proceed with the Merger. No opinion is expressed by HFBE as to
the price at which the securities to be issued in the Merger to the stockholder
of Eurostar may trade at any time.

HFBE assumed that there had been no material change in Tristar's or
Eurostar's assets, financial condition, results of operations, business or
prospects since the date of the last financial statements made available to
HFBE. HFBE relied on advice of counsel to Tristar as to all legal matters with
respect to Tristar, the Merger and the Merger Agreement and upon Tristar with
respect to the accounting treatment to be accorded in the transaction. In
addition, HFBE did not make an independent evaluation, appraisal or physical
inspection of the assets or individual properties of Tristar or Eurostar, nor
was it furnished with any such appraisals.

The preparation of a fairness opinion involves various determinations as
to the most appropriate and relevant quantitative and qualitative methods of
financial analyses and the application of those methods to the particular
circumstances and, therefore, such an opinion is not readily susceptible to
partial analysis or summary description. Furthermore, in arriving at its
fairness opinion, HFBE did not attribute any particular weight to any analysis
or factor considered by it, but rather made qualitative judgments as to the
significance and relevance of each analysis or factor. Accordingly, HFBE
believes that its analysis must be considered as a whole and that considering
any portion of such analysis and of the factors considered, without considering
all analyses and factors, could create a misleading or incomplete view of the
process underlying its opinion. In its analyses, HFBE made numerous assumptions
with respect to industry performance, general business and economic conditions
and other matters, many of which are beyond the control of Tristar and Eurostar.
Any estimates contained in these analyses are not necessarily indicative of
actual values or predictive of future results or values, which may be
significantly more or less favorable than as set forth therein. In addition,
analyses relating to the value of the businesses do not purport to be appraisals
or to reflect the prices at which businesses may actually be sold.

The following paragraphs summarize the significant qualitative and
quantitative analyses performed by HFBE in arriving at the oral opinion
presented to the Acquisition Committee. HFBE did not provide the Acquisition
Committee any written materials supporting its opinion. In connection with its
written opinion dated August 3, 1995, HFBE confirmed the appropriateness of its
reliance on the analyses by reviewing the assumptions on which such analyses
were based and the factors considered in connection therewith.

Relative Contribution Analysis. HFBE reviewed Tristar and Eurostar
historical financial information for their latest fiscal year ends and the pro
forma nine months ended May 31, 1995, and analyzed the contributions of each of
Tristar and Eurostar to pro forma revenues, gross profit, earnings before
interest and tax ("EBIT") and net income. This analysis indicated that: (i) for
the latest fiscal year ends for the companies Tristar would contribute, on a pro
forma basis, 59.6% of revenue, 41.0% of gross profit, 0.0% of EBIT and 0.0% of
net income, of the combined companies; and (ii) for the nine months ended May
31, 1995, Tristar would contribute, on a pro forma basis, 48.4% of revenue,
34.7% of gross profit, 0.0% of EBIT and 0.0% of net income, of the combined
companies. In addition, HFBE also considered the commercial relationship of
Tristar and Eurostar, as well as the relative size and financial strengths of
Tristar and Eurostar. As there was no consistency in the relative contribution
ratios of the companies to pro forma results, this approach was not
significantly probative of an appropriate allocation of value.

Selected Comparable Public Company Analysis. Using public information,
HFBE compared selected historical and projected financial and operating results
of Tristar and Eurostar and the merged company to the corresponding data of
certain publicly-traded companies which were deemed to be similar with regard to
their business and operations. The comparable companies which, in the opinion of
HFBE, were the most appropriate consisted of Jean Philippe Fragrances, Inc.,
BeautiControl Cosmetics, Inc., Parlux Fragrances, Inc., CCA Industries, Inc.,
and Allou Health & Beauty Care, Inc.

In order to measure Tristar's and Eurostar's current operating performance
with those of certain comparable publicly-traded companies, HFBE considered,
among other factors, Tristar's and Eurostar's (i) gross profit margins, (ii)
operating expense levels, (iii) operating earnings (i.e., earnings before
interest and taxes) margins, (iv) operating cash flow (i.e., cash flow before
interest and taxes) margins, (v) profit margins on before and after tax net
income and (vi) cash flow, compared to similar data for the comparable public
companies. Such information was considered for fiscal years ended September 30,
1993 and 1994 for Eurostar; and fiscal years ended August 31, 1993 and 1994, and
latest twelve months ended February 28, 1995, for Tristar.

<PAGE> 30

In order to measure Tristar's and Eurostar's capital structures against
those of the comparable public companies, HFBE considered, among other factors,
Tristar's and Eurostar's (i) ratio of total debt to total capital and (ii) ratio
of total debt to total assets compared to similar data for the comparable public
companies. Such information was considered for fiscal years ended September 30,
1993 and 1994 for Eurostar; and fiscal years ended August 31, 1993 and 1994, and
latest twelve months ended February 28, 1995, for Tristar.

HFBE also compared certain information and valuation ratios relating to
Tristar and Eurostar to corresponding data and ratios of the selected
publicly-traded companies. Total market capitalization/latest twelve months'
EBIT was determined to be the most meaningful for which relevant comparative
data was available. This multiple ranged from 4.8x to 9.7x for the five
comparable companies, with a mean of 8.4x and a median of 9.0x. The multiple was
applied to Tristar and Eurostar latest twelve months and projected results. In
utilizing projected EBIT, the results were discounted to the present at the
discount rates determined in the discounted cash flow analysis.

Selected Comparable Transaction Analysis. HFBE was unaware of any mergers
and acquisitions which were considered to be comparable to the Merger.

Discounted Cash Flow Analysis. HFBE analyzed Tristar and Eurostar based on
an unleveraged discounted cash flow analysis of the projected financial
performance of Tristar and Eurostar. This analysis was based upon information
including certain projected financial information provided by Tristar and
Eurostar. The projections were based on assumptions that were made at the time
such projections were prepared and have not been updated to reflect Tristar and
Eurostar managements' current assumptions or financial expectations.

After-tax, debt-free cash flows were calculated as net income plus
depreciation and amortization, minus capital expenditures. To arrive at a
valuation of each Tristar and Eurostar, HFBE discounted the after-tax, debt-free
cash flows that resulted from the financial forecasts. The cash flows were
discounted using a range of discounts of 18% to 23% for Tristar and 22% to 29%
for Eurostar which were based on HFBE's assessment of the cost of capital for
investments of comparable risk. This range also reflects the risk assumptions
applied by HFBE to the financial forecasts. HFBE added to the present value of
the cash flows the terminal value in the year 2000 discounted back at the same
rates. The terminal value was computed by dividing EBIT in the year 2000 by a
capitalization rate reflecting the cost of capital less expected growth of EBIT.
To derive an equity value, HFBE deducted the companies' total outstanding debt.
This analysis yielded a range of estimated present values of Tristar equity of
$8.9 million to $18.9 million and $20.0 million to $33.9 million for Eurostar.

Tristar paid HFBE a fee of $30,000 and has agreed to reimburse it for its
reasonable out-of-pocket expenses incurred in connection with rendering its
opinion and to indemnify it against certain liabilities and expenses in
connection with its services as financial advisor to Tristar, including certain
liabilities under the U.S. federal securities laws.

HFBE is a prominent valuation and financial advisory firm with experience
in the evaluation of businesses and their securities in connection with mergers
and acquisitions, and valuations for corporate and other purposes.

REPRICING OF CERTAIN WARRANTS

In connection with the Merger, Tristar has agreed with the Core Sheth
Families that the exercise price of outstanding 10-year warrants held by an
affiliate of the Core Sheth Families to purchase an aggregate of 2,000,000
shares of Tristar Common Stock will be repriced at an amount, if lower than the
current exercise price, equal to the lowest average Closing Sales Price (as
defined below) of the Tristar Common Stock for any twenty (20) consecutive
trading days during the period beginning the day after the Effective Time and
ending on August 31, 1996. The current exercise price of such warrants is $5.34
per share and such price is scheduled to increase 10% per year beginning
December 15, 2001. To the extent that the repricing of such warrants makes it
more likely that such warrants would be exercised, the exercise of such warrants
would have a dilutive effect on the ownership position of the current holders of
Tristar Common Stock other than the Core Sheth Families and their affiliates.

The "Closing Sales Price" as of a certain date will mean the average of
the closing bid and asked prices, in the over-the-counter market as reported by
the National Association of Securities Dealers Automated Quotation System, or,
if not so reported, as reported by the National Quotation Bureau,

<PAGE> 31

Incorporated, or any successor thereof, or if not so reported, the average of
the closing bid and asked prices as furnished by any member of the National
Association of Securities Dealers, Inc., selected from time to time by Tristar
for that purpose, or, if the Tristar Common Stock is listed or admitted to
trading on a national securities exchange, the average of the reported closing
bid and asked prices, regular way, on the principal national securities exchange
on which Tristar Common Stock is listed or admitted to trading.

Members of the Core Sheth Families or their affiliates hold warrants to
purchase 2,400,000 shares of Tristar Common Stock. The decision to reprice
certain warrants held by an affiliate of the Core Sheth Families was made
following negotiations between members of the Core Sheth Families and the
Acquisition Committee. In these negotiations, the Core Sheth Families believed
that because the number of shares issuable to the sole stockholder of Eurostar
would be equal to approximately 60% of the total outstanding shares of Tristar
Common Stock immediately following the Merger, the number of shares issuable
upon exercise of outstanding warrants held by members of the Core Sheth Families
or their affiliates should be increased by 60% as well to prevent dilution of
the Core Sheth Families aggregate beneficial ownership position following the
Merger. The Acquisition Committee did not desire to increase the number of
shares of Tristar Common Stock issuable upon exercise of these warrants and
thereby further dilute the interest of the minority stockholders following the
Merger, and, in lieu thereof, agreed with the Core Sheth Families to reprice the
outstanding ten-year warrants to purchase an aggregate of 2,000,000 shares of
Tristar Common Stock pursuant to the terms discussed above.

ACCOUNTING TREATMENT

The Merger will be accounted for in a manner similar to a "pooling of
interests" as the companies are considered entities under common control. See
"The Merger -- Description of the Merger -- Interests of Certain Persons in the
Merger" for a description of the relationship between Eurostar and Tristar. The
"pooling of interests" method of accounting assumes that the combining companies
have been merged from inception, and the historical financial statements for
periods prior to consummation of the Merger are restated as though the companies
had been combined from inception. The restated financial statements are adjusted
to conform the accounting policies of the separate companies.

Tristar has been advised by its independent public accountants, Coopers &
Lybrand L.L.P., that the Merger will be accounted for in a manner similar to a
"pooling of interests" in accordance with generally accepted accounting
principles. Eurostar has been advised by its independent certified public
accountants, KPMG Peat Marwick LLP, that the Merger will be accounted for in a
manner similar to a "pooling of interests" in accordance with generally accepted
accounting principles.

GOVERNMENTAL AND REGULATORY APPROVALS

Tristar and Eurostar are aware of no governmental or regulatory approvals
required for consummation of the Merger other than filing the Certificate of
Merger in Delaware and Articles of Merger in Texas.

CERTAIN U.S. FEDERAL INCOME TAX CONSEQUENCES

The following discussion summarizes certain United States federal income
tax consequences of the Merger to holders of Tristar Common Stock under the
Code, but does not deal with all tax consequences of the Merger that may be
relevant to particular Tristar stockholders, such as dealers in securities,
foreign persons or those who acquired their Tristar Common Stock in a
compensation transaction.

THIS SUMMARY SHOULD NOT BE REGARDED AS A SUBSTITUTE FOR AN INDIVIDUAL
ANALYSIS OF THE TAX CONSEQUENCES OF THE MERGER TO A TRISTAR STOCKHOLDER. EACH
TRISTAR STOCKHOLDER SHOULD CONSULT A TAX ADVISOR REGARDING THE PARTICULAR TAX
CONSEQUENCES OF THE MERGER TO SUCH STOCKHOLDER'S OWN SITUATION.

Neither Tristar nor Eurostar has requested a ruling from the Internal
Revenue Service (the "IRS") in connection with the Merger. Tristar has received
from its independent certified public accountants, Coopers & Lybrand L.L.P., an
opinion to the effect that the Merger will be treated for United States

<PAGE> 32

federal income tax purposes as a reorganization within the meaning of Section
368(a) of the Code, that Tristar and Eurostar will each be a party to the
reorganization within the meaning of Section 368(b) of the Code, and that
Tristar and Eurostar will not recognize any gain or loss as a result of the
Merger. It is a condition to the obligation of Tristar to consummate the Merger
that such opinion shall not have been withdrawn or modified in any material
respect. Eurostar has received from its independent certified public
accountants, KPMG Peat Marwick LLP, an opinion to the effect that the Merger
will be treated for United States federal income tax purposes as a
reorganization within the meaning of Section 368(a) of the Code, that Tristar
and Eurostar will each be a party to the reorganization within the meaning of
Section 368(b) of the Code, and that the sole stockholder of Eurostar will not
recognize any gain or loss as a result of the Merger. See "The Merger --
Description of the Merger -- Repricing of Certain Warrants". It is a condition
to the obligation of Eurostar to consummate the Merger that such opinion shall
not have been withdrawn or modified in any material respect. Such opinions will
be based on certain representations of Tristar and Eurostar.

INTERESTS OF CERTAIN PERSONS IN THE MERGER

The Core Sheth Families

The Core Sheth Families is a group which is the beneficial owner of 60.5%
of Tristar's Common Stock (71% assuming the exercise of all outstanding
warrants) and all of Eurostar's Common Stock. Viren S. Sheth is President, Chief
Executive Officer and a member of the Tristar Board, and also serves as the
President, Chief Executive Officer and a director of Eurostar. Tristar engages
in numerous transactions with entities owned by the Core Sheth Families. For
example, during fiscal 1994 and for the six months ended February 28, 1995,
fragrance products supplied by Eurostar represented approximately 79% and 78%,
respectively, of Tristar's net sales, and cosmetics supplied by Emicos, an
entity owned and controlled by the Core Sheth Families, accounted for
approximately 12% and 12%, respectively, of Tristar's net sales. Conversely,
during fiscal 1994 and for the six months ended March 31, 1995, approximately
85% and 66%, respectively, of Eurostar's sales were to Tristar. See "Merger --
Description of the Merger -- Transactions between Tristar and Entities Owned by
the Core Sheth Families." Although not a member of the Core Sheth Families,
Viren S. Sheth is related by blood to certain members of the Core Sheth
Families. Shashikant S. Sheth, a member of the Core Sheth Families, serves as a
director of Tristar pursuant to a consensus among the Core Sheth Families. After
giving effect to the Merger, the Core Sheth Families would beneficially own an
aggregate of approximately 16.4 million shares of Tristar Common Stock, or
approximately 86% of those outstanding (assuming the exercise of all outstanding
warrants). As a result, the Core Sheth Families would control the election of
the Tristar Board and control all other matters. In addition, the exercise price
of certain warrants held by an affiliate of the Core Sheth Families may be
reduced in connection with the Merger. See "-- Repricing of Certain Warrants".

The Core Sheth Families have interests in the production and worldwide
distribution of fragrance products, cosmetics and other HBA Products. It is
anticipated that upon consummation of the Merger, the Core Sheth Families will
continue to distribute fragrance products in all markets other than North and
South America, except Argentina, in which an affiliate of the Core Sheth
Families will distribute the Surviving Corporation's products, and that Tristar
will distribute fragrance products only in North and South America. Following
the Merger, the Core Sheth Families will continue to distribute cosmetics and
HBA Products worldwide, and it is anticipated that the Surviving Corporation
will continue to distribute in North America cosmetics and other HBA Product
lines that Tristar currently distributes.

Others

The Merger Agreement provides that, following the Merger, Tristar will
indemnify, defend and hold harmless, to the full extent permitted by the
Delaware Law, each officer, director and agent of Eurostar against all losses,
claims, damages and actions resulting from their service as directors, officers
or agents of Eurostar prior to the Merger, including, without limitation all
losses, claims, damages and actions arising out of the negotiation, execution
and delivery of the Merger Agreement and the consummation of the Merger.

<PAGE> 33

It is anticipated that after the Merger the current directors of Tristar,
Richard P. Rifenburgh, Robert R. Sparacino, Viren S. Sheth, Daniel R. Carter and
Shashikant S. Sheth, will continue to serve as directors of the Surviving
Corporation. It is further anticipated that after the Merger the executive
officers of Tristar and the executive officers of Eurostar will become
comparable executive officers of the Surviving Corporation.

TRANSACTIONS BETWEEN TRISTAR AND ENTITIES OWNED BY THE CORE SHETH FAMILIES

A majority of Tristar's outstanding stock (approximately 60.5%
disregarding outstanding warrants) is controlled by the Core Sheth Families,
principally through their ownership and control of Starion International
Limited, a British Virgin Islands company ("Starion B.V.I."). The Core Sheth
Families also own and control Eurostar and Emicos, two major suppliers of
fragrance products and cosmetics to Tristar. At present Tristar is purchasing
virtually all of its fragrance products from Eurostar. From 1989 until September
1992, Tristar purchased virtually all of its fragrance products from another
single supplier, S&J Perfume Company, Ltd. ("S&J Perfume"), which, since January
1991, has also been controlled by the Core Sheth Families. During fiscal 1994
and for the six months ended February 28, 1995, fragrance products supplied by
Eurostar represented approximately 79% and 78%, respectively, of Tristar's net
sales, and cosmetics supplied by Emicos accounted for approximately 12% and 12%,
respectively, of Tristar's net sales. For fiscal 1994 and for the six months
ended February 28, 1995, purchases from Eurostar amounted to $27,282,000 and
$13,200,000, respectively, and purchases from Emicos amounted to $4,254,000 and
$1,238,000, respectively. At August 31, 1994 and at February 28, 1995, Tristar
owed outstanding payables to Eurostar in the amounts of $1,162,000 and
$1,167,000, respectively, and owed outstanding payables to Emicos in the amounts
of $726,000 and $792,000, respectively. During fiscal 1994 and for the six
months ended March 31, 1995, approximately 85% and 66%, respectively, of
Eurostar's sales were to Tristar.

In October 1992, Tristar entered into a three-year distribution agreement
with Eurostar and S&J Perfume, also an entity owned and controlled by the Core
Sheth Families, for the purchase of fragrance products. Under the terms of the
agreement, during fiscal 1994, Eurostar supplied virtually all of Tristar's
requirements for fragrance products for exclusive distribution by Tristar in the
United States, Mexico, Canada and Puerto Rico. This agreement was amended in
August 1993 such that Tristar is assured of a supply of fragrance products from
Eurostar through August 1999. No purchases have been made by Tristar from S&J
Perfume or its successor company, Starion International Limited, a United
Kingdom corporation ("Starion U.K."), since fiscal 1993.

During fiscal 1994, Tristar sold cosmetic pencils to Emicos in the amount
of $343,000. At August 31, 1994, Tristar had a receivable outstanding from
Emicos of $126,000.

Eurostar purchases various products from Tristar for resale to Eurostar's
customers in Central and South America. These purchases were $114,000 in fiscal
1994. At August 31, 1994, Tristar had a receivable outstanding from Eurostar of
$248,000.

In October 1993, Tristar became a party to a one-year design and
consulting agreement with Eurostar pursuant to which Eurostar and other entities
of the Core Sheth Families provide marketing concepts and design services to
Tristar for the production of marketing and advertising material. The agreement,
renewable each calendar year, provides for a fixed annual fee to be renegotiated
at the end of each calendar year. The agreement was renewed for calendar 1995.
The fee for calendar 1995 is $150,000.

Tristar has entered into a Computer Services and Support Agreement with
Eurostar pursuant to which Tristar pays Eurostar approximately $132,000 per year
for access to hardware and software which is used to maintain Tristar's
inventory and accounting systems.

In May 1995, Tristar sold its cosmetic pencil manufacturing business,
including all related equipment and inventory, to Eurostar in consideration for
the cost of inventories payable upon utilization of such inventories and a
seven-year note for approximately $600,000. In connection with the sale,
Eurostar agreed to supply all of Tristar's requirements for cosmetic pencils at
contractual prices such that, under fiscal 1994 volume levels and selling
prices, Tristar would achieve in future periods the same

<PAGE> 34

contribution from cosmetic pencil sales as was achieved in fiscal 1994. Tristar
intends to sell or lease its manufacturing plant facilities in South Carolina.

As mentioned above, Eurostar and Emicos are owned and controlled by the
Core Sheth Families. Shashikant S. Sheth, a director of Tristar, is a member of
the Core Sheth Families. Viren S. Sheth, a director of Tristar and its President
and Chief Executive Officer, is Shashikant S. Sheth's brother. Although Viren S.
Sheth is not a member of the Core Sheth Families, he is related by blood to
certain members of the Core Sheth Families. Viren S. Sheth also serves as the
President, Chief Executive Officer and a director of Eurostar.

Financing of Settlement Agreement. On December 17, 1993, Tristar announced
court approval of a settlement agreement, on behalf of Tristar and certain other
parties, of the previously disclosed stockholder class action litigation for a
cash payment of $9.5 million. To finance the settlement agreement, the Core
Sheth Families loaned Tristar $9 million and purchased and extended common stock
warrants for a price of $500,000. The last portion of the settlement amount was
paid by Tristar on December 16, 1994.

The loans from the Core Sheth Families mature in ten years, with interest
payable annually and principal payable 20% at the end of year eight, 20% at the
end of year nine and the remaining 60% at the end of year ten, with the
exception of $1 million which was paid in December 1994 with a court approved
distribution of the proceeds of an executive liability and indemnification
policy owned by Tristar. These loans bear interest at the long-term federal rate
and are subordinated to indebtedness of Tristar owed to its senior lenders.

The common stock warrants were purchased by the Core Sheth Families on
December 14, 1994, pursuant to an agreement entered into in connection with the
settlement agreement. The warrants grant the Core Sheth Families the right to
purchase up to 2,000,000 shares of Tristar's Common Stock within ten years of
the date of issuance. The initial per-share price of the common stock under the
warrants is $5.34 and it increases by 10% per year beginning December 15, 2001.
The exercise price of such warrants may be reduced in connection with the
Merger. See "-- Repricing of Certain Warrants".

In connection with the settlement agreement, Tristar also extended until
August 31, 2003, the exercise date of previously issued common stock warrants
held by Starion B.V.I., an entity controlled by the Core Sheth Families, to
purchase 400,000 shares of Tristar Common Stock at an exercise price of $2.75
per share. These warrants would have expired on May 31, 1995 absent an
extension.

EXCHANGE OF STOCK CERTIFICATES

On or before the Effective Time, Tristar will deliver to the sole
stockholder of Eurostar, instructions for surrendering its certificates
representing shares of Eurostar Common Stock in exchange for a certificate or
certificates representing Tristar Common Stock.

FEDERAL SECURITIES LAW CONSEQUENCES

Shares of Tristar Common Stock issued to the sole stockholder of Eurostar
in connection with the Merger will not be freely transferable under the
Securities Act of 1933, as amended (the "Securities Act"), because such shares
are being issued in a private placement pursuant to an exemption from
registration under Section 4(2) of the Securities Act. Transfer of the Tristar
Common Stock by the sole stockholder of Eurostar will be restricted by Rule 144
under the Securities Act.

DISSENTERS' RIGHTS

<PAGE> 35

THE MERGER AGREEMENT

EFFECTIVE TIME OF THE MERGER

The Merger Agreement provides that the Merger will become effective at the
Effective Time set forth in the certified copy of the Certificate of Merger
issued by the Secretary of State of the State of Delaware and Certificate of
Merger issued by the Secretary of State of the State of Texas with respect to
the Merger. It is anticipated that, if the Merger Agreement is approved at the
Special Meeting and all other conditions to the Merger have been satisfied or
waived, the Effective Time will occur on the date of the Special Meeting, or as
soon thereafter as is practicable.

MANNER AND BASIS OF CONVERTING SHARES

The Merger Agreement provides that at the Effective Time, the outstanding
shares of Eurostar Common Stock, other than shares held in the treasury of
Eurostar, which shares will be canceled, will be converted into the right to
receive an aggregate of 9,977,810 shares of Tristar Common Stock.

As soon as is practicable following the Merger, Tristar will register the
issuance of Tristar Common Stock to Transvit on the stock transfer books of
Tristar and exchange a Tristar Common Stock certificate for the Eurostar Common
Stock certificates.

No fractional shares of Tristar Common Stock will be issued in the Merger.

Until such time as Transvit surrenders its outstanding stock certificates
to Tristar, the shares of Eurostar Common Stock represented thereby will 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 shares of Tristar Common Stock into which such shares shall have
been converted. Unless and until such outstanding certificates are surrendered,
no dividends or other distributions payable to the holders of Tristar Common
Stock, as of any time on or after the Effective Time, will be paid to Transvit.
Upon surrender of the certificates previously representing Eurostar Common
Stock, Transvit will receive certificates representing the number of shares of
Tristar Common Stock to which it is entitled and the amount of any dividends or
other distributions payable to holders of Tristar Common Stock on or after the
Effective Time with respect to such shares, without interest thereon.

CONDITIONS TO THE MERGER

The Merger Agreement provides that the respective obligations of Tristar
and Eurostar to effect the Merger are subject to the satisfaction of the
following conditions: (a) that the Merger and the Merger Agreement shall have
been approved and adopted by the requisite vote of the stockholders of Tristar
as may be provided by law and any applicable provision of the charter or bylaws
of Tristar; (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 the business, financial condition or
results of operations of Tristar or the Surviving Corporation and their
subsidiaries, taken as a whole or after consummation of the Merger; (d) all
approvals of private persons, financial institutions or corporations, the
granting of which is necessary for the consummation of the Merger or the
transactions contemplated in connection therewith or the non-receipt of which
would have a material adverse effect on the business, financial condition or
results of operations of Tristar or the Surviving Corporation and their
subsidiaries, taken as a whole after the consummation of the Merger, shall have
been obtained; (e) Tristar and Eurostar shall have been advised in writing on
the Closing Date by Coopers & Lybrand L.L.P. that the Merger should be accounted
for in a manner similar to a "pooling of interests" for accounting purposes, in
accordance with generally accepted accounting principles and applicable rules
and regulations of the Commission; and (f) Tristar shall have received from HFBE
a

<PAGE> 36

written opinion, dated as of the date of the Merger Agreement, to the effect
that the terms of the Merger are fair to the minority stockholders of Tristar
from a financial point of view, and such opinion shall have been confirmed in
writing to Tristar as of the date that this Proxy Statement is first mailed to
the stockholders of Tristar and as of the Closing Date.

The Merger Agreement provides that the obligation of Tristar to effect the
Merger is, at the option of Tristar, further subject to the fulfillment or
waiver of the following conditions: (a) the representations and warranties of
Eurostar and Transvit contained in the Merger Agreement 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),
and that all of the terms, covenants and conditions of the Merger 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; (b) no
material adverse change (which does not include changes in national economic
conditions or industry conditions generally) in the business, operations or
financial condition of Eurostar and its subsidiaries, taken as a whole, shall
have occurred, and Eurostar and its 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 its subsidiaries,
taken as a whole; (c) Tristar shall have received from Akin, Gump, Strauss,
Hauer & Feld, L.L.P., counsel to Eurostar, an opinion as to certain corporate
matters; and (d) Tristar shall have received from Coopers & Lybrand L.L.P.,
independent accountants to Tristar, an opinion to the effect that (1) the Merger
will be treated for federal income tax purposes as a reorganization within the
meaning of Section 368(a) of the Code, (2) Tristar and Eurostar will each be a
party to that reorganization within the meaning of Section 368(b) of the Code,
and (3) Tristar and Eurostar will 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.

The Merger Agreement provides that the obligation of Eurostar to effect
the Merger is, at the option of Eurostar, further subject to the fulfillment or
waiver of the following conditions: (a) the representations and warranties of
Tristar contained in the Merger Agreement 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), and that all of
the terms, covenants and conditions of the Merger 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; (b) no material adverse
change (which does not include changes in national economic conditions or
industry conditions generally) in the business, operations or financial
condition of Tristar and its subsidiaries, taken as a whole, shall have
occurred; (c) the shares of Tristar Common Stock issuable upon consummation of
the Merger shall have been approved for listing on the NASDAQ/NMS, subject to
official notice of issuance; (d) Eurostar shall have received from Fulbright and
Jaworski L.L.P., counsel to Tristar, an opinion as to certain corporate matters;
and (e) Eurostar shall have received from KPMG Peat Marwick LLP, independent
accountants to Eurostar, an opinion to the effect that (1) the Merger will be
treated for federal income tax purposes as a reorganization within the meaning
of Section 368(b) of the Code; (2) Tristar and Eurostar will each be a party to
that reorganization within the meaning of Section 368(b) of the Code; and (3)
the stockholder of 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.

REPRESENTATIONS AND WARRANTIES OF TRISTAR AND EUROSTAR

In the Merger Agreement, Tristar and Eurostar have made various
representations and warranties relating to, among other things, their respective
businesses and financial condition, the satisfaction of certain legal
requirements for the Merger and the existence of certain litigation, employee
benefit and environmental matters. The representations and warranties of each of
the parties to the Merger Agreement survive for one year following the Closing
Date.

CONDUCT OF BUSINESS OF TRISTAR AND EUROSTAR PRIOR TO MERGER

Pursuant to the Merger Agreement, Tristar has agreed that, prior to the
Effective Time, unless Eurostar shall otherwise consent in writing or as
otherwise disclosed to Eurostar, (a) the business of

<PAGE> 37

Tristar and its subsidiaries will be conducted only in, and Tristar and its
subsidiaries will not take any action except in, the ordinary course of business
and consistent with past practice; (b) Tristar will not, and will not permit any
of its subsidiaries to: (i) split, combine or reclassify any outstanding capital
stock of Tristar, or authorize, declare, set aside or pay any dividend payable
in cash, stock, property or otherwise in respect of the capital stock of
Tristar; (ii) authorize or pay any extraordinary bonuses to employees; (iii)
grant any stock options or rights to acquire Tristar Common Stock 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 except pursuant to stock option or other employee benefit plans
of Tristar and other than as contemplated by the Merger 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
of its assets or those of its subsidiaries; (vi) redeem, purchase, acquire or
offer to acquire any shares of Tristar Common Stock, other than as disclosed to
Eurostar; (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, other than a subsidiary of Tristar; (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) in excess of $250,000 in the aggregate; (xi) amend or propose to amend
any charter or bylaws of Tristar; or (xii) take and use its reasonable efforts
to prevent any affiliate of Tristar from taking any action that would prevent
the Merger from being treated for federal income tax purposes as a
reorganization within the meaning of Section 368(a) of the Code; and (c) Tristar
will use all reasonable efforts to (i) preserve intact its business organization
and that of its subsidiaries, (ii) maintain in effect its franchises,
authorizations or similar rights and those of its subsidiaries, (iii) keep
available the services of its current officers and key employees and those of
its subsidiaries, (iv) preserve its goodwill with those having business
relationships with Tristar and its subsidiaries, (v) maintain and keep its
properties and those of its subsidiaries in as good a repair and condition as
presently exists, except for deterioration due to ordinary wear and tear and
damage due to casualty, and (vi) maintain in full force and effect insurance
comparable in amount and scope of coverage to that currently maintained by it
and its subsidiaries; (d) Tristar will, and will cause its 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 the
business, financial condition or results of operations of Tristar and its
subsidiaries taken as a whole, and except for such obligations as Tristar or its
subsidiaries in good faith may dispute; and (e) Tristar will not, and will not
permit any of its subsidiaries to, take any action that would, or that
reasonably could be expected to, result in any of its representations and
warranties set forth in the Merger Agreement becoming untrue and 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
the business, financial condition or results of operations of Tristar and its
subsidiaries, taken as a whole.

Pursuant to the Merger Agreement, Eurostar has agreed that, prior to the
Effective Time, unless Tristar shall otherwise consent in writing or as
otherwise disclosed to Tristar, (a) the business of Eurostar and its
subsidiaries will be conducted only in, and Eurostar and its subsidiaries will
not take any action except in, the ordinary course of business and consistent
with past practice; (b) Eurostar will not, and will not permit any of its
subsidiaries to: (i) split, combine or reclassify any outstanding capital stock
of Eurostar or any of its 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 its 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 its subsidiaries to any
person or entity; (iv) authorize or issue, sell, pledge, dispose of or encumber
any shares of its capital stock or that of its 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 of
its assets or those of its subsidiaries; (vi) redeem, purchase, acquire or offer
to acquire any shares of Eurostar Common Stock or common stock of any of its
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

<PAGE> 38

business organization or division thereof, other than a subsidiary of Eurostar;
(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) in excess of $250,000 in the aggregate; (xi) amend or propose to
amend the charter or bylaws of Eurostar or any of its subsidiaries; or (xii)
take and use its reasonable efforts to prevent any affiliate of Eurostar from
taking any action that would 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 will use all reasonable efforts to (i) preserve intact
its business organization and that of its subsidiaries, (ii) maintain in effect
its franchises, authorizations or similar rights and those of its subsidiaries,
(iii) keep available the services of its current officers and key employees and
those of its subsidiaries, (iv) preserve its goodwill with those having business
relationships with Eurostar and its subsidiaries, (v) maintain and keep its
properties and those of its subsidiaries in as good a repair and condition as
presently exists, except for deterioration due to ordinary wear and tear and
damage due to casualty, and (vi) maintain in full force and effect insurance
comparable in amount and scope of coverage to that currently maintained by it
and its subsidiaries; (d) Eurostar will, and will cause its 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 the
business, financial condition or results of operations of Eurostar and its
subsidiaries taken as a whole, and except for such obligations as Eurostar or
its subsidiaries in good faith may dispute; and (e) Eurostar will not, and will
not permit any of its subsidiaries to, take any action that would, or that
reasonably could be expected to, result in any of its representations and
warranties set forth in the Merger Agreement becoming untrue or any of the
conditions of the Merger not being satisfied, and 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 the
business, financial condition or results of operations of Eurostar and its
subsidiaries, taken as a whole.

MANAGEMENT OF THE COMBINED COMPANY FOLLOWING MERGER

The directors of Tristar immediately prior to the Effective Time shall be
the initial directors of the Surviving Corporation, each to serve in accordance
with the Certificate of Incorporation and bylaws of the Surviving Corporation
until their respective successors are duly elected or appointed and qualified.
As of the date of this Proxy Statement, Shashikant S. Sheth, Viren S. Sheth,
Daniel R. Carter, Richard P. Rifenburgh and Robert R. Sparacino are directors of
Tristar. In addition, the executive officers of Tristar and Eurostar will become
comparable executive officers of the Surviving Corporation.

TERMINATION OR AMENDMENT OF MERGER AGREEMENT

The Merger Agreement provides that it may be terminated at any time prior
to the Effective Time, whether prior to or after approval by the stockholder of
Eurostar: (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 the Merger Agreement or the transactions contemplated in the
Merger Agreement 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 the Merger Agreement is not received; (e) by Tristar if (i)
since the date of the Merger 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 date of the Merger
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 the Merger 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 their 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 their respective minority
stockholders or stockholders under applicable law; or (h) by

<PAGE> 39

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, 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.

The Merger Agreement provides that it may be amended or supplemented by an
instrument in writing signed on behalf of each party thereto, provided that
after the Merger Agreement has been approved and adopted by the stockholders of
Eurostar, it may be amended only as may be permitted by applicable provisions of
applicable law.

<PAGE> 40

UNAUDITED PRO FORMA CONSOLIDATED COMBINED FINANCIAL STATEMENTS

The following unaudited pro forma consolidated combined financial statements
give effect to the proposed merger of Tristar and Eurostar accounted for in a
manner similar to that in a pooling of interests as the companies are considered
entities under common control. See "The Merger - Description of the Merger -
Interests of Certain Persons in the Merger". The pro forma consolidated combined
balance sheet as of May 31, 1995 is presented as though the Merger had occurred
on May 31, 1995 using Tristar's consolidated balance sheet as of May 31, 1995
and Eurostar's consolidated balance sheet as of March 31, 1995. The pro forma
consolidated combined statements of income for the fiscal years ended August 31,
1994, 1993 and 1992 and for the nine month periods ended May 31, 1995 and 1994
are presented as though the acquisition had occurred as of March 5, 1992
(Eurostar's date of inception) using Tristar's consolidated statements of income
for the fiscal years ended August 31, 1994, 1993, and 1992 and the nine month
periods ended May 31, 1995 and 1994, and Eurostar's consolidated statements of
income for the fiscal years ended September 30, 1994 and 1993, the period from
March 5, 1992 (date of inception) through September 30, 1992 and the nine month
periods ended March 31, 1995 and 1994. The pro forma combined financial
statements should be read in conjunction with the historical consolidated
financial information of Tristar and Eurostar appearing elsewhere in this Proxy
Statement. The pro forma consolidated combined financial statements have been
prepared for illustrative purposes only and do not purport to be indicative of
the results that actually would have been obtained if the Merger had been
effected on the dates indicated or of the results which may be obtained in the
future.

-32-
<PAGE> 41
TRISTAR CORPORATION AND EUROSTAR PERFUMES, INC.
UNAUDITED PRO FORMA CONSOLIDATED
COMBINED BALANCE SHEET
<TABLE>
<CAPTION>
Historical
-------------------------
Eurostar
Tristar Perfumes, Pro Forma
Corporation Inc. Combined
May 31, March 31, Pro Forma May 31,
ASSETS 1995 1995 Adjustments 1995
----------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
Current assets:
Cash and cash equivalents $ 249,000 $ 740,000 $ 989,000
Accounts receivable 4,952,000 1,676,000 6,628,000
Accounts receivable - related parties, net - 1,893,000 $(1,629,000) (A) 264,000
Current portion note receivable - related party 50,000 - (50,000) (G)
Accounts receivable - insurance reimbursement 815,000 - 815,000
Inventories 8,549,000 4,987,000 (2,063,000) (C) 11,473,000
Prepaid expenses and other current assets 297,000 153,000 450,000
Refundable income taxes 52,000 - 52,000
Deferred income taxes - 294,000 701,000 (E) 995,000
----------- ----------- ----------- -----------
Total current assets 14,964,000 9,743,000 (3,041,000) 21,666,000
----------- ----------- ----------- -----------

Note receivable - related party 550,000 - (550,000) (G)
Assets held for sale 648,000 - 648,000
Property, plant and equipment 714,000 8,002,000 600,000 (G) 9,316,000
----------- ----------- ----------- -----------

Other assets:
Warrant valuation 1,532,000 (698,000) (D) 834,000
Other assets 56,000 56,000
Deferred income taxes - 2,714,000 (E) 2,714,000
----------- ----------- ----------- -----------
Total other assets 1,588,000 - 2,016,000 3,604,000
----------- ----------- ----------- -----------
Total assets $18,464,000 $17,745,000 $ (975,000) $35,234,000
=========== =========== =========== ===========
</TABLE>

See accompanying notes to Unaudited Pro Forma Consolidated Combined Financial
Statements.

-33-
<PAGE> 42
TRISTAR CORPORATION AND EUROSTAR PERFUMES, INC.
UNAUDITED PRO FORMA CONSOLIDATED
COMBINED BALANCE SHEET, Continued

<TABLE>
<CAPTION>
Historical
--------------------------
Eurostar
Tristar Perfumes, Pro Forma
Corporation Inc. Combined
May 31, March 31, Pro Forma May 31,
LIABILITIES AND SHAREHOLDERS' EQUITY 1995 1995 Adjustments 1995
----------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
Current liabilities:
Short-term borrowings $ 3,964,000 $ - $ 3,964,000
Accounts payable--trade 474,000 1,044,000 1,518,000
Accounts payable--related parties, net 2,857,000 147,000 $(1,629,000) (A) 1,375,000
Accrued expenses 1,592,000 1,081,000 2,673,000
Income taxes payable - 603,000 603,000
Current portion of long-term obligations 35,000 1,500,000 1,535,000
----------- ----------- ----------- -----------
Total current liabilities 8,922,000 4,375,000 (1,629,000) 11,668,000
----------- ----------- ----------- -----------

Obligations under capital leases, less current portion 31,000 - 31,000
Subordinated long term debt, related parties 8,000,000 - 8,000,000
Net payable to parent company - 5,016,000 5,016,000
Deferred income taxes - 409,000 (409,000) (E) -
Other liabilities - 223,000 223,000
----------- ----------- ----------- -----------
Total liabilities 16,953,000 10,023,000 (2,038,000) 24,938,000
----------- ----------- ----------- -----------

Commitments and contingencies

Shareholders' equity:
Preferred stock - - -
Common stock 67,000 1,000 99,000 (F) 167,000
Additional paid-in-capital 10,281,000 99,000 (99,000) (F) 10,281,000
Retained earnings (accumulated deficit) (8,837,000) 7,622,000 (698,000) (D)
(2,063,000) (C)
3,824,000 (E) (152,000)
----------- ----------- ----------- -----------
Total shareholders' equity 1,511,000 7,722,000 1,063,000 10,296,000
----------- ----------- ----------- -----------
Total liabilities and shareholders' equity $18,464,000 $17,745,000 $ (975,000) $35,234,000
=========== =========== =========== ===========
</TABLE>

See accompanying notes to Unaudited Pro Forma Consolidated Combined Financial
Statements.

-34-
<PAGE> 43
TRISTAR CORPORATION AND EUROSTAR PERFUMES, INC.
UNAUDITED PRO FORMA CONSOLIDATED
COMBINED STATEMENT OF INCOME

<TABLE>
<CAPTION>
Historical
--------------------------------
Tristar Eurostar Pro Forma
Corporation Perfumes, Inc. Combined
Nine Months Nine Months Nine Months
Ended Ended Ended
May 31, March 31, Pro Forma May 31,
1995 1995 Adjustments 1995
----------- ------------- ------------ -----------
<S> <C> <C> <C> <C>
Net sales $24,091,000 $25,708,000 $(17,636,000) (B) $32,163,000

(17,636,000) (B)
Cost of sales 19,821,000 17,670,000 (131,000) (C) 19,724,000
----------- ----------- ------------ -----------

Gross profit 4,270,000 8,038,000 131,000 12,439,000

Selling, general and administrative expenses 6,576,000 5,323,000 11,899,000
----------- ----------- ------------ -----------

(Loss) income from operations (2,306,000) 2,715,000 131,000 540,000

Other income (expense):
Interest expense (961,000) (249,000) (1,210,000)
Interest and other (expense) income (419,000) 36,000 123,000 (D) (260,000)
Insurance reimbursement 2,065,000 - 2,065,000
----------- ----------- ------------ -----------

(Loss) income before (benefit) provision for
income taxes (1,621,000) 2,502,000 254,000 1,135,000

(Benefit) provision for income taxes - 969,000 (442,000) (E) 527,000
----------- ----------- ------------ -----------

Net (loss) income $(1,621,000) $ 1,533,000 $ 696,000 $ 608,000
=========== =========== ============ ===========

Net (loss) income per common share:
Primary $ (.24) $ 1.53 $ .04
=========== =========== ===========

Fully diluted $ (.24) $ 1.53 $ .04
=========== =========== ===========

Weighted average number of shares outstanding:
(1,000,000) (F)
9,977,810 (F)
Primary 6,646,067 1,000,000 235,418 (F) 16,859,295
=========== =========== ============ ===========
(1,000,000) (F)
9,977,810 (F)
Fully diluted 6,646,067 1,000,000 244,643 (F) 16,868,520
=========== =========== ============ ===========

</TABLE>

See accompanying notes to Unaudited Pro Forma Consolidated Combined Financial
Statements.

-35-

<PAGE> 44

TRISTAR CORPORATION AND EUROSTAR PERFUMES, INC.
UNAUDITED PRO FORMA CONSOLIDATED
COMBINED STATEMENT OF INCOME

<TABLE>
<CAPTION>
Historical
--------------------------------
Tristar Eurostar Pro Forma
Corporation Perfumes, Inc. Combined
Nine Months Nine Months Nine Months
Ended Ended Ended
May 31, March 31, Pro Forma May 31,
1994 1994 Adjustments 1994
----------- ------------- ------------ -----------
<S> <C> <C> <C> <C>
Net sales $35,861,000 $24,605,000 $(22,867,000) (B) $37,599,000

(22,867,000) (B)
Cost of sales 29,290,000 14,907,000 (155,000) (C) 21,175,000
----------- ----------- ------------ -----------

Gross profit 6,571,000 9,698,000 155,000 16,424,000

Selling, general and administrative expenses 8,298,000 3,840,000 12,138,000
----------- ----------- ------------ -----------

(Loss) income from operations (1,727,000) 5,858,000 155,000 4,286,000

Other income (expense):
Interest expense (859,000) (248,000) (1,107,000)
Interest and other income 12,000 4,000 16,000
----------- ----------- ------------ -----------

(Loss) income before (benefit) provision for
income taxes (2,574,000) 5,614,000 155,000 3,195,000

(Benefit) provision for income taxes - 2,268,000 (659,000) (E) 1,609,000
----------- ----------- ------------ -----------

Net (loss) income (2,574,000) $ 3,346,000 $ 814,000 $ 1,586,000
=========== =========== ============ ===========

Net (loss) income per common share:
Primary $ (.39) $ 3.34 $ .09
=========== =========== ===========

Fully diluted $ (.39) $ 3.34 $ .09
=========== =========== ===========

Weighted average number of shares outstanding:
(1,000,000) (F)
9,977,810 (F)
Primary 6,629,837 1,000,000 259,780 (F) 16,867,427
=========== =========== ============ ===========

(1,000,000) (F)
9,977,810 (F)
Fully diluted 6,629,837 1,000,000 259,780 (F) 16,867,427
=========== =========== ============ ===========

</TABLE>

See accompanying notes to Unaudited Pro Forma Consolidated Combined Financial
Statements.

-36-

<PAGE> 45

TRISTAR CORPORATION AND EUROSTAR PERFUMES, INC.
UNAUDITED PRO FORMA CONSOLIDATED
COMBINED STATEMENT OF INCOME

Historical
-------------------------------
Tristar Eurostar Pro Forma
Corporation Perfumes, Inc. Combined
Year Year Year
Ended Ended Ended
August 31, September 30, Pro Forma August 31,
1994 1994 Adjustments 1994
----------- -------------- ---------------- -----------
<S> <C> <C> <C> <C>
Net sales $46,488,000 $31,481,000 $(27,282,000)(B) $50,687,000
(27,282,000)(B)
Cost of sales 38,457,000 19,933,000 (1,155,000)(C) 29,953,000
----------- ----------- ------------ -----------
Gross profit 8,031,000 11,548,000 1,155,000 20,734,000

Selling, general and administrative expenses 10,662,000 5,944,000 16,606,000
----------- ----------- ------------ -----------
(Loss) income from operations (2,631,000) 5,604,000 1,155,000 4,128,000

Other income (expense):
Interest expense (1,195,000) (338,000) (1,533,000)
Interest and other (expense) income (352,000) 41,000 164,000 (D) (147,000)
Litigation expenses (208,000) - (208,000)
----------- ----------- ------------ -----------
(Loss) income before (benefit) provision for
income taxes (4,386,000) 5,307,000 1,319,000 2,240,000

(Benefit) provision for income taxes (95,000) 2,145,000 (820,000)(E) 1,230,000
----------- ----------- ------------ -----------
Net (loss) income $(4,291,000) $ 3,162,000 $ 2,139,000 $ 1,010,000
=========== =========== ============ ===========

Net (loss) income per common share:
Primary $ (.65) $ 3.16 $ .06
=========== =========== ===========
Fully diluted $ (.65) $ 3.16 $ .06
=========== =========== ===========

Weighted average number of shares outstanding:
(1,000,000)(F)
9,977,810 (F)
Primary 6,631,948 1,000,000 241,886 (F) 16,851,664
=========== =========== ============ ===========
(1,000,000)(F)
9,977,810 (F)
Fully diluted 6,631,948 1,000,000 241,886 (F) 16,851,664
=========== =========== ============ ===========

</TABLE>

See accompanying notes to Unaudited Pro Forma Consolidated Combined Financial
Statements.

-37-

<PAGE> 46
TRISTAR CORPORATION AND EUROSTAR PERFUMES, INC.
UNAUDITED PRO FORMA CONSOLIDATED
COMBINED STATEMENT OF INCOME

<TABLE>
<CAPTION>
Historical
---------------------------------
Tristar Eurostar Pro Forma
Corporation Perfumes, Inc. Combined
Year Year Year
Ended Ended Ended
August 31, September 30, Pro Forma August 31,
1993 1993 Adjustments 1993
------------- -------------- ------------- --------------

<S> <C> <C> <C> <C>
Net sales $ 51,409,000 $ 28,145,000 $ (25,104,000)(B) $ 54,450,000

(25,104,000)(B)
Cost of sales 40,367,000 17,688,000 3,349,000 (C) 36,300,000
------------- ------------ ------------- -------------
Gross profit 11,042,000 10,457,000 (3,349,000) 18,150,000

Selling, general and administrative expenses 8,753,000 3,935,000 12,688,000
------------- ------------ ------------- -------------
(Loss) income from operations 2,289,000 6,522,000 (3,349,000) 5,462,000

Other income (expense):
Interest expense (248,000) (342,000) (590,000)
Interest and other (expense) income 25,000 8,000 33,000
Litigation expenses (2,758,000) - (2,758,000)
Shareholders litigation settlement (9,500,000) - (9,500,000)
------------- ------------ ------------- -------------
(Loss) income before (benefit) provision for
income taxes (10,192,000) 6,188,000 (3,349,000) (7,353,000)

(Benefit) provision for income taxes (2,033,000) 2,349,000 (2,562,000)(E) (2,246,000)
------------- ------------ ------------- -------------
Net (loss) income $ (8,159,000) $ 3,839,000 $ (787,000) $ (5,107,000)
============= ============ ============= =============

Net (loss) income per common share:
Primary $ (1.23) $ 3.83 $ (.31)
============= ============ =============
Fully diluted $ (1.23) $ 3.83 $ (.31)
============= ============ =============

Weighted average number of shares outstanding:
(1,000,000)(F)
Primary 6,623,238 1,000,000 9,977,810 (F) 16,601,048
============= ============ ============= =============

(1,000,000)(F)
Fully diluted 6,623,238 1,000,000 9,977,810 (F) 16,601,048
============= ============ ============= =============

</TABLE>

See accompanying notes to Unaudited Pro Forma Consolidated Combined Financial
Statements.

-38-
<PAGE> 47
TRISTAR CORPORATION AND EUROSTAR PERFUMES, INC.
UNAUDITED PRO FORMA CONSOLIDATED
COMBINED STATEMENT OF INCOME

<TABLE>
<CAPTION>
Historical
----------------------------------
Tristar Eurostar Pro Forma
Corporation Perfumes, Inc. Combined
Year Period Year
Ended Ended Ended
August 31, September 30, Pro Forma August 31,
1992 1992 Adjustments 1992
------------ -------------- ----------- ------------
<S> <C> <C> <C>
Net sales $ 47,519,000 $ 216,000 $47,735,000

Cost of sales 35,129,000 199,000 35,328,000
------------ ---------- ----------- -----------

Gross profit 12,390,000 17,000 12,407,000

Selling, general and administrative expenses 5,492,000 743,000 6,235,000
------------ ---------- ----------- -----------

Income (loss) from operations 6,898,000 (726,000) 6,172,000

Other income (expense):
Interest expense (236,000) (38,000) (274,000)
Interest and other income 36,000 36,000
Litigation expenses (1,650,000) - (1,650,000)
------------ ---------- ----------- -----------

Income (loss) before provision (benefit) for
income taxes 5,048,000 (764,000) 4,284,000

Provision (benefit) for income taxes 1,761,000 (265,000) 1,496,000
------------ ---------- ----------- -----------

Net income (loss) $ 3,287,000 $ (499,000) $ 2,788,000
============ ========== =========== ===========

Net income (loss) per common share:
Primary $ .46 $ (.49) $ .22
============ ========== ===========

Fully diluted $ .46 $ (.49) $ .22
============ ========== ===========

Weighted average number of shares outstanding:
(1,000,000)(F)
Primary 7,072,844 1,000,000 5,820,389 (F) 12,893,233
============ ========== =========== ===========

(1,000,000)(F)
Fully diluted 7,072,844 1,000,000 5,820,389 (F) 12,893,233
============ ========== =========== ===========

See accompanying notes to Unaudited Pro Forma Consolidated Combined Financial
Statements.
</TABLE>

-39-
<PAGE> 48

TRISTAR CORPORATION

Notes to Unaudited Pro Forma Consolidated Combined Financial Statements

The following pro forma adjustments are reflected in the accompanying unaudited
pro forma consolidated combined balance sheet and statements of income.

(A) To eliminate intercompany balances between Tristar and Eurostar.

(B) To eliminate intercompany sales between Tristar and Eurostar.

(D) To reflect the write-off of the unamortized portion of the value
assigned to the distribution agreement between Tristar and
Eurostar in connection with the valuation of warrants issued to
the Core Sheth Families and the extension of the expiration date
of warrants previously issued to the Core Sheth Families (see
Note 6 of Notes to Consolidated Financial Statements) and to
reflect the resultant reduction in amortization expense. At the
Merger date, the unamortized portion of this value will be
written off as a charge through the statement of operations. This
charge, which should approximate $657,000 if the merger is
consummated in August 1995 as currently planned, is not reflected
in the accompanying pro forma statements of operations.

(E) To eliminate Tristar's deferred tax asset valuation and to tax
effect the pro forma adjustments at 34%. Based upon the combined
Tristar and Eurostar's level of historical taxable income and
projections for future taxable income, including the reversal of
existing taxable temporary differences, over the periods which
the deferred tax assets are deductible, management believes it is
more likely than not the Company will realize the benefits of
these deductible differences.

(F) To reflect the issuance of 9,977,810 shares of Tristar Common
Stock in exchange for Eurostar's outstanding shares and to
reflect the impact of Tristar's common equivalent shares from
dilutive stock options and warrants.

The pro forma consolidated combined balance sheet does not
reflect the possible future accounting impact of the potential
reduction in the exercise price of the warrants held by the Core
Sheth Families to purchase an aggregate of 2,000,000 shares of
Tristar Common Stock as the effect of repricing is currently
unknown. A valuation of the repricing provisions will be
completed at the date of consummation of the merger utilizing the
Black Scholes Method. The value related to the repricing
provisions, if any, will be accounted for through a reduction in
Retained Earnings in a manner similar to that for a dividend,
with a corresponding increase in Additional Paid-In Capital to
reflect the corresponding increase in warrant value. See "The
Merger -- Description of the Merger -- Repricing of Certain
Warrants."

(G) To reclassify the note receivable from Eurostar related to the
May 1995 pencil plant sale to property, plant and equipment.

Substantial charges will be incurred by the combined company in connection with
the Merger. The investment banking, legal, accounting, printing, mailing and
similar expenses are expected to approximate $1,000,000. Such costs will be
reflected in the combined company's fiscal 1995 statement of operations yet are
not reflected in the pro forma consolidated combined financial statements except
for the approximately $92,000 which has been accrued for as of May 31, 1995.

<PAGE> 49
INFORMATION CONCERNING TRISTAR

BUSINESS

GENERAL DEVELOPMENT OF BUSINESS

Tristar was incorporated in New York in 1982 and made an initial public
offering of its common stock in 1984. In 1987, Tristar was reincorporated in
Delaware. Tristar changed its name from Ross Cosmetics Distribution Centers,
Inc. to TRISTAR CORPORATION in 1993.

Until 1985, Tristar was principally engaged in the wholesale distribution
of nationally-branded fragrances, cosmetics and beauty aids and, to a lesser
extent, in the marketing and sale of proprietary products under the brand name
"Apple Cosmetics." Tristar operated primarily out of facilities in Staten
Island, New York. In 1985, Tristar established a distribution center in San
Antonio, Texas. During this period, Tristar was highly dependent upon prevailing
prices and product availability, and ultimately found itself operating in an
increasingly competitive environment where its profit margins were eroding.

As a result, in 1985, Tristar began a transition out of the wholesale
distribution of nationally-branded merchandise and began focusing on the
development and sale of its own proprietary lines of products. These products
were produced primarily by S&J Perfume.

Between 1985 and 1992, Tristar purchased S&J Perfume's products through a
Liechtenstein entity, the Amuli Export Company. By means of this entity, a group
that became known as the "Core Sheth Families" assumed the credit risk involved
in S&J Perfume's sales to Tristar. The principals of S&J Perfume were related by
blood to the members of the Core Sheth Families. The Core Sheth Families also
acquired S&J Perfume's bottling facilities in 1985. These facts were not
publicly disclosed until after June 1992.

In 1986 and 1987, to alleviate cash flow problems, Tristar convinced the
Core Sheth Families to enter into a series of transactions in which the Core
Sheth Families accepted stock in lieu of cash for Tristar's outstanding accounts
payable. As a result of these transactions, which involved a number of
affiliated Panamanian corporations, the Core Sheth Families came to control
approximately 35.5% of the outstanding common stock of Tristar. This fact,
however, was not disclosed to the public until after June 1992. During the
period in which these transactions took place, an adviser to the Core Sheth
Families, Eugene D. Derry, was appointed to the Tristar Board.

In May 1989, Tristar's founder, Ross A. Freitas, along with another major
stockholder, Carolyn S. Kenner, sold approximately 80% of their shares of
Tristar's Common Stock to Starion B.V.I., a company controlled by the Core Sheth
Families. The terms of this transaction provided for the transfer of shares and
payment for the shares to occur over a 36-month period ending in May 1992.
However, this schedule was accelerated by the Core Sheth Families and all such
shares were transferred to them by November 1991. As a result of this
transaction, the transactions in 1986 and 1987, and minor open-market purchases,
the Core Sheth Families came to control approximately 63% of Tristar's then
outstanding Common Stock. As with the previous transactions, however, this was
not publicly disclosed until after June 1992.

Following this transaction in 1989, Mr. Derry was appointed Chairman of
the Board and President of Tristar, replacing Mr. Freitas. A principal of the
Core Sheth Families, Shashikant S. Sheth, was appointed as a director of
Tristar. Tristar began to market a new line of designer alternative fragrances,
known as Classic European Fragrances (now known as Euro Collections). The
success of this line of products, which was produced by S&J Perfume, led to
significantly increased sales by Tristar. In January 1991, the Core Sheth
Families acquired S&J Perfume.

<PAGE> 50

On June 12, 1992, Tristar disclosed that it had learned of a possible
relationship, not previously disclosed, between Tristar and parties affiliated
with its principal supplier, S&J Perfume, which might involve direct or indirect
ownership of up to 60% of Tristar's outstanding Common Stock. Tristar also
disclosed that it had learned that the Securities and Exchange Commission was
conducting an investigation of this matter, as well as potential accounting
irregularities at Tristar. See "-- Legal Proceedings -- Securities and Exchange
Commission Investigation". Following this disclosure, Tristar, a number of its
then-current and former officers and directors, individual members of the Core
Sheth Families, and the officers of S&J Perfume were named as defendants in a
number of class action lawsuits relating to these matters. See "-- Legal
Proceedings -- Stockholder Class Action Litigation".

Tristar also announced on June 12, 1992, that it intended to appoint two
new directors, previously unaffiliated with Tristar, to review these and related
matters and report to the Board. On June 22, 1992, Tristar announced the
appointment of Richard P. Rifenburgh and Dr. Robert R. Sparacino to the Tristar
Board, and the formation of a Special Committee of the Tristar Board (the
"Special Committee") to conduct the review previously announced.

The Special Committee's review continued for the next four months. In
August 1992, during the course of the Special Committee's work, Tristar's
Chairman and President, Mr. Derry, resigned as a director and officer of
Tristar, as did Tristar's Chief Operating Officer, Michael E. Emery. Tristar's
Chief Financial Officer, John M. Waters, was reassigned as Director of
Accounting. Eugene H. Karam was promoted to Executive Vice President and Chief
Operating Officer. At the same time, Mr. Rifenburgh was appointed Chairman of
the Board, Dr. Sparacino was appointed Vice Chairman, and Daniel R. Carter was
elected to the Board and appointed President and Chief Executive Officer. In
October 1992, Tristar appointed Loren M. Eltiste as Vice President and Chief
Financial Officer.

On September 4, 1992, the Core Sheth Families filed a Schedule 13D
disclosing the facts relating to their ownership of Tristar's common stock.

On October 23, 1992, Tristar entered into a formal distribution agreement
(the "Distribution Agreement") with S&J Perfume and Eurostar . See "-- Narrative
Description of Business -- Suppliers". Under the terms of the Distribution
Agreement, Eurostar supplies virtually all of Tristar's requirements for
fragrance products at the same cost to Tristar as products previously purchased
through the Amuli Export Company.

On October 26 and 27, 1992, the Special Committee reported the results of
its review and evaluation and presented its recommendations to the Tristar
Board. In addition to confirming the ownership interest of the Core Sheth
Families and the failure to disclose this matter, the Special Committee also
noted several accounting and other irregularities. The Special Committee
assigned primary responsibility for these matters to certain former directors
and officers of Tristar. A number of recommendations were made by the Special
Committee to improve Tristar's disclosure procedures, internal controls and
corporate governance system, and to prevent a recurrence of the conduct
identified by the Special Committee. A summary of the Special Committee's report
to the Tristar Board was filed with the Securities and Exchange Commission in a
Current Report on Form 8-K dated October 28, 1992, and reference is made to that
summary for additional details relating to these matters.

On October 29, 1992, Tristar announced that it would be relocating its
corporate headquarters to San Antonio, Texas and that its San Antonio
distribution facilities would be expanded. Tristar's distribution center and
cosmetic pencil manufacturing facility in South Carolina would continue
operating at their existing locations.

On November 4, 1992, the Core Sheth Families filed an amendment to its
Schedule 13D disclosing that all shares of Tristar Common Stock then
beneficially owned by the Core Sheth Families had been consolidated on that date
in Starion B.V.I., a company controlled by the Core Sheth Families. Starion
B.V.I. now owns approximately 58.9% of Tristar's outstanding Common Stock (69.8%
assuming the exercise of all outstanding warrants).

On December 3, 1992, Viren S. Sheth was elected a director of Tristar and
appointed as President and Chief Executive Officer of Tristar, replacing Mr.
Carter, who had served Tristar in that capacity

<PAGE> 51

since August 1992. Mr. Sheth continues to serve as President and Chief
Executive Officer of Eurostar as well as Tristar. Mr. Carter continues to serve
as a director of Tristar.

At the same time, in light of the relationship between Viren S. Sheth and
the Core Sheth Families and his roles in both Eurostar and Tristar, the Tristar
Board created an Executive Committee, with all the powers and authority of the
Tristar Board to the extent permitted by Delaware Law, to monitor the management
of Tristar and to consider all related party transactions. The Executive
Committee is comprised of Mr. Rifenburgh and Dr. Sparacino, who had been the
members of the Special Committee, as well as Mr. Sheth. Voting by members of the
Executive Committee is weighted to assure that the independent directors control
the committee.

Tristar, in January 1993, moved its corporate headquarters to San Antonio,
Texas, from Duncan, South Carolina.

In January 1993, Tristar merged its Texas subsidiary, Ross Cosmetics
Distribution Center, S.W., Inc. into the parent company, Ross Cosmetics
Distribution Centers, Inc.

On March 17, 1993, the stockholders at their annual meeting approved
changing the name of the company to TRISTAR CORPORATION.

In September 1993, Tristar filed, in federal district court, a formal
settlement of the stockholders' class action litigation on behalf of Tristar and
certain parties. The settlement specified cash payments totaling $9.5 million to
the plaintiffs. Under a financing agreement with the Core Sheth Families, the
Core Sheth Families loaned to Tristar sufficient funds to pay the settlement
amounts. Of these loans, $1,000,000 was repaid in December 1994 from the
proceeds of the Directors and Officers Insurance policy in existence between
January 1992 and January 1993. See "-- Legal Proceedings -- Insurance Policy
Reimbursement" and Note 16 of the Notes to Tristar's Consolidated Financial
Statements. The balance of the loan has a term of 10 years with no principal
payments required until the seventh year. As part of the agreements with the
Core Sheth Families, the existing Distribution Agreement between Eurostar and
Tristar was amended so that Tristar will be assured a supply of product through
August 1999. In connection with the settlement agreement of the stockholder
class action litigation, 10-year warrants to purchase 2,000,000 shares of
Tristar's Common Stock at a per share price of $5.34 were granted to the Core
Sheth Families in consideration for $500,000. The exercise price under the
warrants is scheduled to increase by 10% per year beginning December 15, 2001.
See "-- Legal Proceedings -- Stockholder Class Action Litigation" for further
discussion of the settlement. The warrant exercise price may be reduced in
connection with the Merger. See "The Merger -- Description of the Merger --
Repricing of Certain Warrants". Tristar also extended to August 31, 2003, the
exercise date of a warrant held by Starion B.V.I., a Core Sheth Family
affiliate, to purchase 400,000 shares of Tristar Common Stock at an exercise
price of $2.75 per share. That warrant would have expired on May 31, 1995,
absent such extension.

In October 1993, Tristar became a party to a one-year design and
consulting agreement with Eurostar whereby Eurostar and other Core Sheth
Families affiliates will provide marketing concepts and design services to
Tristar for the production of marketing and advertising material. The agreement,
renewable annually, provides for an annual fixed fee which will be renegotiated
at the end of each year. The agreement was renewed for calendar 1995. The fee
for calendar year 1995 is $150,000.

In May 1994, Tristar closed its distribution center in Duncan, South
Carolina and consolidated all distribution activities into the San Antonio,
Texas warehouse facility.

<PAGE> 52

that, under fiscal 1994 volume levels and selling prices, Tristar would achieve
in future periods the same contribution from cosmetic pencil sales as was
achieved in fiscal 1994. Tristar intends to sell or lease its manufacturing
plant facilities in South Carolina.

SIGNIFICANT DEVELOPMENTS

The Mexican Market. In late December 1994, the Mexican government devalued
the Mexican Nuevo Peso by allowing the Peso to float freely against the U. S.
dollar. This devaluation has resulted in a general increase of 80% or more in
the cost of imported products to the Mexican consumer. The increase and the
resultant instability, including significant business failures and resultant
unemployment, has caused a sharp decline in purchases of Tristar's products by
the Mexican consumer. It is not known if and when the Peso will stabilize at a
level where somewhat normal purchasing will resume. Prior to the above-mentioned
economic and political instability, sales directly and indirectly into Mexico
accounted for a significant portion of Tristar's total sales. Management of
Tristar believes that weak economic conditions in Mexico combined with the
devaluation of the Mexican currency will continue to adversely impact sales.

Loss of Foreign-Based Customers. Under the Distribution Agreement, Tristar
has agreed not to sell or cause to be sold any products of its fragrance
suppliers in any country other than the United States, Mexico, Canada and Puerto
Rico. In fiscal 1994 and 1995, direct sales outside of the named countries were
negligible.

However, through the first three quarters of fiscal 1994, certain of
Tristar's U.S.-based customers continued to export a significant portion of
their purchases to countries outside Tristar's exclusive marketing territories.
In the latter part of fiscal 1994 and in the first nine months of fiscal 1995,
as expected, sales to such customers decreased significantly due to the
Distribution Agreement. While management believed that the amount of these lost
sales would be replaced by additional sales within the exclusive marketing
territories, to date, due to economic conditions and slower than anticipated
growth in the mass merchandising channel, Tristar has not been successful in
doing so, and it is not expected that this will occur in the remainder of fiscal
1995.

FINANCIAL INFORMATION ABOUT INDUSTRY SEGMENTS

During the three fiscal years ended August 31, 1994, Tristar has been, and
expects to continue to be, engaged in a single line of business and/or industry
segment, i.e., the marketing and distribution of designer alternative
fragrances, cosmetics and bath and body products in the United States, Mexico,
Canada and Puerto Rico.

NARRATIVE DESCRIPTION OF BUSINESS

Tristar is engaged in the business of the marketing and distribution of
designer alternative fragrances, cosmetics and bath and body products in the
United States, Mexico, Canada and Puerto Rico. Apple Cosmetics, Inc., a New York
corporation, and Tristar de Mexico de C.V., a Mexican corporation, are
wholly-owned subsidiaries of Tristar, which are utilized for marketing purposes.
See "-- Financial Information about Foreign and Domestic Operations and Export
Sales". It is anticipated that Apple Cosmetics, Inc. will be merged with and
into Tristar prior to the Merger.

Distribution

Tristar distributes its products from its San Antonio, Texas, and Mexico
City, Mexico, warehouse facilities. Tristar has approximately 1,500 customers,
including wholesalers, independent distributors, mass merchandising chains and
specialty chain stores. These customers represent over 28,000 outlets for
Tristar's products. See "-- Narrative Description of Business -- Customers," and
"-- Narrative Description of Business -- Suppliers". Tristar markets its
products through Tristar sales personnel located in major markets throughout the
United States and through a network of independent sales representatives who are
compensated on a commission basis.

<PAGE> 53

Customers

Tristar's customers are located primarily in the United States, Mexico and
Canada. Total direct export sales, including Mexico and Canada, for the years
ended August 31, 1994, 1993 and 1992 were approximately $8,301,000, $11,080,000,
and $8,773,000, respectively, amounting to 18, 22, and 18 percent of total net
sales for those years. Such sales for the six months ended February 28, 1995 and
1994 were approximately $2,477,000 and $5,155,000, respectively, amounting to
14% and 18.5% of total net sales. Export sales in 1994, 1993 and 1992 included
$91,000, $3,571,000 and $2,608,000, respectively, of foreign sales outside of
Mexico and Canada. Export sales in the six months ended February 28, 1995 and
1994 included $427,000 and $505,000, respectively, of foreign sales outside of
Mexico and Canada.

As discussed earlier, on October 23, 1992, Tristar entered into the
Distribution Agreement with Eurostar. As part of that agreement, Tristar
relinquished marketing rights for products supplied by Eurostar and S&J Perfume
to countries outside of the exclusive territories of the United States, Canada,
Mexico and Puerto Rico. See "-- Narrative Description of Business -- Suppliers".
With the consent of Eurostar, Tristar continued to sell products to those
countries outside Tristar's exclusive territories through fiscal 1993. Effective
September 1, 1994, Eurostar assumed all responsibility for those sales resulting
in a loss of sales to Tristar (See "Tristar Management's Discussion and Analysis
of Financial Condition and Results of Operations -- Results of Operations for
the Years Ended August 31, 1992, 1993 and 1994 -- 1994 compared to 1993" for
further discussion). Indirectly, Tristar also realized sales as some of its U.S.
based customers sold into countries outside Tristar's marketing territories.
While these indirect sales continued well into fiscal 1994, by the end of fiscal
1994 there were indications that such sales were declining. The amount of sales
lost due to the cessation of indirect shipments cannot be determined.

During fiscal 1994, a high concentration of Tristar's sales were made
through its San Antonio warehouse facility to customers located in Mexico and to
customers in the United States located near the United States-Mexico border,
who, Tristar understands, resold the product to Mexican customers. For the same
reasons as discussed above, the precise volume of these indirect sales into
Mexico also cannot be determined because customers do not provide such
information to Tristar. Such sales have been materially adversely affected by
weak economic conditions in Mexico and a recent devaluation of the Mexican
currency. See "-- Significant Developments -- The Mexican Market".

Tristar is not dependent upon a single or a few customers, and the loss of
any single or a few customers would not have a material adverse effect on
Tristar's business. In fiscal 1994, no single customer accounted for more than
seven percent of Tristar's total sales.

Suppliers

At present, Tristar is purchasing virtually all of its fragrance products
from Eurostar. From 1989 until September 1992, Tristar purchased virtually all
of its fragrance products from another single supplier, S&J Perfume, which since
January 1991 has also been controlled by the Core Sheth Families, and which was
previously controlled by Viren Sheth and Jay Sheth, who are related to members
of the Core Sheth Families. On October 23, 1992, Tristar entered into the
Distribution Agreement. See "-- General Development of Business". Under the
terms of the Distribution Agreement, Tristar agreed to purchase virtually all of
its fragrance products from Eurostar.

The Distribution Agreement also provides that Tristar is the exclusive
distributor of several lines of product for Eurostar and S&J Perfume (now
Starion U.K.) in the United States, Mexico, Canada and Puerto Rico. The
Distribution Agreement establishes prices for products of Eurostar and S&J
Perfume. The agreement contains a clause that requires ninety days' notice for
any price increase and limits such percentage increase to the greater of the
percentage increase in the consumer price index since the agreement date minus
any previous price increase since the date of the agreement or the percentage
increase in the cost of goods and/or cost of production to the manufacturer
since the previous price increase. The clauses establishing the ninety-day
notification and the increase limitation are intended to give Tristar sufficient
time to adjust its marketing strategies and determine if market conditions
warrant passing on the increase to Tristar's customers or whether existing
margins are adequate to absorb such an increase.

<PAGE> 54

The cost to Tristar of the products originally purchased from S&J Perfume
through Amuli Export Company has remained the same under the Distribution
Agreement; Eurostar has not increased its prices as it has had the right to do,
in spite of inflationary increases in its costs. See "-- General Development of
Business". The financing arrangement through the Amuli Export Company terminated
with the last purchase from S&J Perfume in December 1992.

The Distribution Agreement acknowledges Eurostar's and S&J Perfume's
trademark and patent rights in any products and product names developed by them,
and gives Tristar the exclusive right to use such names and trademarks on
products being distributed by Tristar during the term of the agreement. The
Distribution Agreement has a term of three years; provided, however, that under
no circumstances may the agreement be terminated without two years' prior notice
to Tristar or, if terminated by Tristar, without one year's prior notice to
Eurostar. In August 1993, the Distribution Agreement was amended such that the
supplier cannot provide notice of termination prior to August 30, 1997. Since,
as mentioned above, two years' notice is required for any termination, the
effect of this amendment will be to assure continuation of the relationship
between Tristar and Eurostar through at least the end of fiscal 1999. This
amendment was approved by the court in connection with the settlement of the
Stockholder Class Action Litigation. See "-- Legal Proceedings -- Stockholder
Class Action Litigation".

Under the Distribution Agreement, Tristar agreed not to sell or cause to
be sold any products of Eurostar or S&J Perfume in any countries other than the
United States, Mexico, Canada and Puerto Rico. With the consent of Eurostar and
S&J Perfume, Tristar continued to sell its products outside its territories
during fiscal 1993. In fiscal 1993, sales of such products combined with
cosmetic pencils and other cosmetic products outside the named countries
approximated 7% of total net sales. Effective September 1993, Eurostar and S&J
Perfume assumed the responsibility for sales to a majority of the customers
outside the named countries. Indirectly Tristar realized limited sales outside
Tristar's exclusive marketing territory in fiscal 1994 as some of its U. S.
based customers sold into those countries. While these indirect sales continued
well into fiscal 1994, by the end of fiscal 1994 there were indications that
such sales were declining. While management believes that the amount of these
lost sales can be replaced by additional sales in the named countries, to date
Tristar has not been successful in doing so. Approximately 79% of Tristar's
sales for fiscal year 1994 were comprised of fragrance products purchased by
Tristar from Eurostar. These fragrance products, which are designed and
developed by Eurostar or other affiliates of the Core Sheth Families, have
certain characteristics that Tristar believes may provide an advantage in the
marketplace and which are not generally available from other suppliers.

Tristar's ability to satisfy sales orders of its fragrance products is
directly dependent on the supply of products from Eurostar. If Eurostar were
unable to provide product, the effect on Tristar would be minimal since S&J
Perfumes and other related parties have similar manufacturing facilities
available to support Tristar.

Tristar is dependent on the supply of cosmetic products from related
parties controlled by the Core Sheth Families. If such parties were to cease or
be unable to supply these cosmetic products, the lack of these products would
have an adverse effect on Tristar until a secondary supplier could be located.

Products

Tristar's principal product categories are designer alternative
fragrances, cosmetics and bath and body products. The following table reflects
the approximate contributions to net sales for the last three fiscal years and
the six months ended February 28, 1995 for the major product categories sold by
Tristar:

<TABLE>
<CAPTION>
SIX
PRODUCT CATEGORY MONTHS FISCAL 1994 FISCAL 1993 FISCAL 1992
- ----------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
FRAGRANCES 78% 79% 82% 82%
- -----------------------------------------------------------------------------------------------
COSMETIC PENCILS 8% 9% 11% 11%
- -----------------------------------------------------------------------------------------------
OTHER PRODUCTS 14% 12% 7% 7%
===============================================================================================
</TABLE>

<PAGE> 55

The above table reflects a decline in fragrance and cosmetic pencil sales
from fiscal 1993 to fiscal 1995. The growth of other cosmetic products reflects
a market acceptance of new product lines introduced in fiscal 1994 and 1993 and
the expansion of sales of other lines.

Tristar is almost completely dependent on its suppliers, primarily
Eurostar, to develop new and replacement products for introduction into the
marketplace. The success of new or replacement products in the marketplace is
dependent on the identification of the best market niche and then, ultimately,
on the consumers' acceptance of the product. Life cycles of products vary
significantly, with some products successfully marketed over a five-year period,
whereas other products may fail to gain consumer acceptance and are discontinued
within a short time.

Fragrances. Within the fragrances product category Tristar primarily
markets four different product lines: "Euro Collections" (formerly referred to
as the "Classic European Fragrances"), "Club Exclusif Fragrances," "Premiere
Fragrances" (previously marketed as "Budget Fragrances") and "Euro Elegance".
All lines feature a wide variety of premium-look bottle shapes and packages
containing fragrances which provide an alternative to some of the most popular
nationally-branded designer fragrances at a fraction of their retail price.

The Euro Collections line, which was first introduced in 1989, is the
primary product line in the fragrance category and is the major revenue
contributor. Included in this line are companion products, which are discussed
further under "-- Other Products" below.

The fragrance product lines other than the Euro Collections line
constitute a smaller portion of Tristar's revenue with the revenue contribution
of the Club Exclusif line expected to continue to increase in 1995 as a result
of increased marketing efforts and consumer recognition and acceptance.

Other Products. Tristar markets, under the Apple Cosmetics brand name,
proprietary lines of nail, lip and eye products and other cosmetic accessories,
including cosmetic pencils in assorted sizes and colors. It also sells the "Gina
Cosmetics" line of products, which was introduced in late 1992, and another line
of cosmetic products under the name "Roxy Cosmetics" which it introduced in
fiscal 1993.

In addition to the fragrance lines and cosmetic products, Tristar markets
companion products to its Euro Collections line such as eau de parfum sprays,
body sprays, body oils, deodorant sticks and other products such as lotions,
dusting powders, and gift sets. Such companion products are also marketed as
designer alternatives and priced at a fraction of the price of the original
designer products.

New Products

As noted previously (See "-- General Development of Business"), Tristar
depends upon Eurostar for the design and development of new products for
distribution by Tristar. Tristar has not previously devoted a material amount of
funds to activities relating to the development of new products. In fiscal 1994,
Tristar introduced new companion products under the Euro Collections line
consisting of hand and body lotions, shower gels, soaps and deodorant sticks --
all of which are purchased from Eurostar and other related parties. In addition,
Tristar added new products to other existing lines including line extensions in
the Apple Cosmetics line. In fiscal 1995, Tristar introduced a new fragrance
line, Euro Elegance, and a new deodorant stick line, Everscent, both of which
were developed by Eurostar.

Tristar anticipates introduction of a limited number of new products
during the balance of 1995.

Patents and Trademarks

Except for the "Apple Cosmetics" trademark, Tristar does not own any
patents, trademarks, licenses, franchises or concessions that are material to
the conduct of its business. Eurostar and its affiliates own substantially all
of the product name trademarks for the products sold by Tristar. Tristar's
rights to the utilization of the suppliers' product name trademarks are set
forth in the Distribution Agreement. See "-- Narrative Description of Business
- -- Suppliers". Tristar is dependent on the continued use of these trademarks,
and the cessation of Tristar's rights to use the trademarks of Eurostar and its
affiliates would have a material adverse effect on Tristar.

<PAGE> 56

Backlog of Orders

At the end of fiscal years 1994, 1993 and 1992, Tristar had, and currently
has, no substantial backlog of orders.

Raw Materials

Since the sale of its cosmetic pencil manufacturing operation in May 1995,
Tristar has had no substantial raw material inventory requirements.

Environmental Laws

In the opinion of management, compliance by Tristar with federal, state
and local laws relating to the protection of the environment has no material
effect upon Tristar's capital expenditures, earnings or competitive condition.

Competition in the Fragrance and Cosmetics Industry

The fragrance and cosmetics industry is characterized by intense
competition. While pricing and terms are the principal methods of competition,
product quality and customer service (incorporating prompt delivery through the
maintenance of sufficient inventory) are ancillary competitive considerations in
the overall cosmetics industry.

Principal competitors in designer alternative fragrances include Jean
Philippe Fragrances, Inc., Paris Designs, Inc., and Parfums de Ceour, and in
budget cosmetics, Artmatic USA Cosmetics, Wet-N-Wild and Jordana Cosmetics
Corporation. Tristar believes it is one of the largest marketers of designer
alternative fragrances in the United States.

When viewing the fragrance and cosmetics industry as a whole, Tristar is
relatively small and, consequently, is not a significant factor in the industry.
Many of the other companies in the industry, including virtually all large
product manufacturers such as Revlon and Proctor and Gamble, are well
established and have been in existence for a significantly longer period of time
than Tristar. Each of such companies has product inventory, financial,
marketing, research and other personnel, as well as other resources,
substantially greater than Tristar's, and has more extensive facilities than
those which are now or in the foreseeable future will become available to
Tristar. Historically, however, these large manufacturers have not sought to
compete in the same budget-oriented markets in which Tristar participates.

Companies with resources greater than those of Tristar may enter such
areas of business in the future. Tristar may not be able to compete successfully
with such companies because of its limited competitive position, limited
capital, limited staff and facilities. Accordingly, Tristar's competitive
position may continue to be limited within the overall cosmetic, fragrance, and
bath and body product industry.

Inventory

Tristar maintains finished goods inventory at its San Antonio, Texas and
Mexico City, Mexico warehouse facilities.

The finished goods inventory level was lower as of February 28, 1995 and
at the end of fiscal 1994 than at the end of the prior fiscal year ($8,514,000
and $7,406,000, respectively, compared to $11,185,000), due to improved
inventory controls, close outs of discontinued products, and timing of inventory
receipts. See Note 3 of Tristar's Notes to Consolidated Financial Statements.

<PAGE> 57

Seasonality

Tristar's business has historically been subject to seasonal factors
relating to calendar-year-end holidays, which has resulted in increased net
sales in the first and fourth quarters of Tristar's fiscal year. Management
expects this characteristic to continue.

Employees

As of May 31, 1995, Tristar employed 81 people as compared to 119 at the
same time in fiscal 1994. The decline in the number of people employed was
primarily due to closings of the South Carolina distribution center and the
South Carolina cosmetic pencil manufacturing plant, combined with other staff
reductions in response to changing business conditions. None of Tristar's
employees are covered by a collective bargaining agreement, and management
believes that Tristar's relationship with its employees is satisfactory.

FINANCIAL INFORMATION ABOUT FOREIGN AND DOMESTIC OPERATIONS AND EXPORT SALES

Other than a sales office and distribution facility in Mexico City,
Mexico, Tristar has no significant operations outside the continental United
States. Under the terms of the Distribution Agreement (see "-- Narrative
Description of Business -- Suppliers"), Tristar agreed not to sell Eurostar or
S&J Perfume products in countries other than the United States, Mexico, Canada
and Puerto Rico, where Tristar has sole and exclusive distribution rights to
such products. With Eurostar's consent, Tristar continued to sell outside of its
territory until late fiscal 1993, at which time Tristar began to phase out its
sales to customers outside Tristar's exclusive distribution territory. As of
September 1, 1993, Eurostar had assumed a majority of such distribution
activity. Limited shipments were made during fiscal 1994 to customers that had
been doing business with Tristar prior to the Distribution Agreement; however,
these remaining customers have since been transferred to Eurostar. Certain of
Tristar's U. S.- based customers continued to ship outside of Tristar's
exclusive marketing area in fiscal 1994. These sales, although they continued
well into fiscal 1994, have declined indirectly as a result of the Distribution
Agreement.

Tristar exports a significant portion of its sales directly to foreign
customers. In 1994, these customers were predominantly in Mexico and Canada. In
prior years, sales were not restricted just to Mexico and Canada. For the years
ended August 31, 1994, 1993, and 1992, and the six months ended February 28,
1995, $8,301,000 (18% of net sales), $11,080,000 (22% of net sales), $8,773,000
(18% of net sales), and $2,477,000 (14% of net sales), respectively, were
exported directly to foreign customers. While management believes that in
addition some products are sold to United States customers for ultimate resale
outside the United States, the amount of these indirect export sales cannot be
determined as Tristar does not have access to its customers' sales information.
See "-- Narrative Description of Business -- Customers". A significant portion
of Tristar's products are sold directly or indirectly into the Mexican market.
In fiscal 1995, such sales have been materially adversely affected by weak
economic conditions in Mexico and a recent devaluation of the Mexican currency.
See "-- Significant Developments -- The Mexican Market". See also "Tristar
Management's Discussion and Analysis of Financial Condition and Results of
Operations -- The Mexican Market".

PROPERTIES

In January 1993, Tristar relocated its corporate headquarters from South
Carolina to San Antonio, Texas, and in February 1993, established a bulk
warehouse in San Antonio, Texas. During fiscal 1994, the Texas distribution
center was consolidated with the bulk warehouse and relocated to a new facility.
In May 1994, Tristar closed its distribution center in South Carolina and
consolidated all distribution activities into the San Antonio warehouse
facility.

Tristar is currently leasing approximately 72,000 square feet of storage,
shipping and office space for its San Antonio warehouse facility. The lease has
an annual rate of $194,000, subject to adjustments, and expires on January 31,
1998.

<PAGE> 58

The corporate headquarters in San Antonio occupies approximately 14,000
square feet of office space. The lease has a current annual rate of $158,000,
subject to adjustments and expires on January 1, 1998. The lease terms allow,
effective January 1996, the cancellation of the lease for a penalty equivalent
to three months' rent.

In May 1990, Tristar completed construction of a 21,000 square foot
manufacturing plant in Duncan, South Carolina, which, prior to the sale of
Tristar's cosmetic pencil manufacturing operations in May 1995, was devoted
exclusively to the manufacture of cosmetic pencils. This facility is located on
sixteen acres of property. Tristar is currently attempting to sell or lease the
property.

Tristar is currently leasing minimal warehouse and office space for its
Mexico City, Mexico operations. In May 1995 lease expense was approximately
$3,000.

LEGAL PROCEEDINGS

Freitas and Kenner

Tristar brought an action in United States District Court for the Eastern
District of New York seeking to recover from Ross Freitas and Carolyn Kenner
short-swing profits resulting from the purchase and subsequent sale of Tristar
stock in 1989, while both were officers and directors of Tristar. On November 9,
1994, the Court awarded Tristar partial summary judgment with respect to these
claims, for approximately $101,000 against Mr. Freitas and $80,000 against Ms.
Kenner, plus interest running from May 1989. The time for Mr. Freitas and Ms.
Kenner to appeal has not yet expired.

On October 20, 1994, a suit was filed in Florida state court against
Tristar, as well as two of its directors, Richard P. Rifenburgh and Robert R.
Sparacino. The plaintiffs in the action are Ross Freitas and Carolyn Kenner,
along with two other individuals, Rose Freitas and Melissa Freitas. The
complaint alleges causes of action by Mr. Freitas and Ms. Kenner for libel and
seeks indemnification in connection with the work of the Special Committee of
the Tristar Board that investigated, among other things, the failure to disclose
the Core Sheth Families' holdings of Tristar Common Stock. The complaint also
alleges, on behalf of all four plaintiffs, that Tristar's disclosures relating
to these and other matters were fraudulent or negligently misrepresented. In
April 1995, the court dismissed the complaint without prejudice, in part due to
plaintiffs' failure to state a claim for relief. On or about May 12, 1995, the
plaintiffs refiled the complaint, asserting many of the same claims. Tristar
intends to dispute these allegations vigorously and believes that its ultimate
disposition will not have a material adverse effect on its financial condition.

As previously disclosed, Mr. Freitas had sought to interpose similar
claims in the context of the stockholder class action described below in 1993,
but his motion was dismissed.

On June 4, 1994, Mr. Freitas and Ms. Kenner served a demand for
arbitration against Starion B.V.I., Shashikant S. Sheth and Jay Sheth alleging,
among other things, fraud, breach of contract and negligent misrepresentation
relating to a loan agreement dated May 31, 1989, between Starion B.V.I., Mr.
Freitas and Ms. Kenner. Starion B.V.I. believes that the claims brought by Mr.
Freitas and Ms. Kenner are procedurally barred and without merit. Starion B.V.I.
intends to dispute these allegations vigorously.

Stockholder Class Action Litigation

As previously disclosed, between June 15 and July 1, 1992, thirteen
lawsuits were filed against Tristar and others in United States District Court
for the District of South Carolina. These actions were consolidated by order of
the court, and a consolidated and amended complaint in these actions was filed
on October 8, 1992.

The complaint, which purported to be a class action on behalf of all
persons (with certain exceptions) who purchased shares of Tristar's common stock
between June 25, 1991 and June 11, 1992, alleged violations of the federal
securities laws, as well as common law fraud and negligence in connection with,
among other things, the non-disclosure of the ownership interest of the Core
Sheth Families prior

<PAGE> 59

to 1992. The complaint named as defendants Tristar, certain former and current
directors and officers of Tristar, several persons and entities associated with
the Core Sheth Families, including Starion B.V.I., which currently holds
approximately 58.9% of Tristar's Common Stock (approximately 69.8% assuming the
exercise of all outstanding warrants), and S&J Perfume. The complaint sought
actual and punitive damages in unspecified amounts. On January 11, 1993, Tristar
filed its response to the Consolidated and Amended Complaint.

On December 17, 1993, Tristar announced court approval of a settlement
agreement regarding these actions, on behalf of Tristar and certain parties, for
a cash payment of $9.5 million. The settlement resulted in a release of claims
by the plaintiff class against Tristar, the Sheths and their associates, and
Messrs. Bloomfield, Emery, Karam and Waters (the "Settling Defendants"). The
settlement does not include three former directors of Tristar, Messrs. Derry,
Freitas or Rosenberg. From proceeds of notes payable based on an agreement with
the Core Sheth Families, discussed below, Tristar has paid all installments of
the total settlement. The installment payments made were $1.5 million on August
31, 1993, $900,000 on January 20, 1994, $2.6 million on May 31, 1994 and $4.5
million on December 20, 1994.

Tristar entered into an agreement with the Core Sheth Families to borrow
$9 million to pay the settlement amounts. With the exception of $1 million,
these borrowings have a term of ten years, with principal payable 20% at the end
of the eighth year, 20% at the end of the ninth year, and the remaining 60%
payable at the end of the tenth year. Payment of the $1 million was made in
December 1994, following receipt of the proceeds of a Directors and Officers
liability insurance policy. See Note 16 to the Notes to the Consolidated
Financial Statements. These borrowings bear interest at the Long-Term Federal
Rate and are subordinated to senior lenders. The settlement includes a provision
that protects Tristar and the settling defendants against further liability to
the class for damages in connection with related ongoing litigation.

In connection with these transactions, Eurostar (see "-- Narrative
Description of Business -- Suppliers"), has agreed that it will not provide any
notice of termination of its Distribution Agreement with Tristar for a period of
four years from August 30, 1993. Since two years notice is required for any
termination, the effect of this will be to assure continuation of the
relationship between Tristar and Eurostar through at least the end of fiscal
1999.

In connection with the settlement agreement of the stockholder class
action litigation, 10-year warrants to purchase 2,000,000 shares of Tristar's
Common Stock at a per-share price of $5.34 were granted to the Core Sheth
Families in consideration for a non-interest-bearing receivable in the amount of
$500,000. The per-share exercise price under the warrants will increase by 10%
per year beginning December 15, 2001. The exercise price under such warrants may
be reduced in connection with the Merger. See "The Merger -- Description of the
Merger -- Repricing of Certain Warrants". Tristar has also extended to August
31, 2003 the exercise date of a warrant held by Starion B.V.I., a Core Sheth
affiliate, to purchase 400,000 shares of Tristar Common Stock at an exercise
price of $2.75 per share. That warrant would have expired on May 31, 1995,
absent such extension.

In recognition that value was received by Tristar in return for extending
the expiration date of the warrants to purchase the 400,000 shares and the
granting of the new warrants to purchase 2,000,000 shares as described above,
Tristar utilized the Black Scholes Method to compute the value. The computation
resulted in the assignment of a value of $2,089,000 (net of the purchase price
of the warrants of $500,000). This net value has been recorded as part of "Other
assets" and as an addition to "Additional paid-in capital" in the accompanying
financial statements.

Additionally, Tristar anticipates that it may incur litigation expenses
related to ongoing litigation involving the non-settling defendants and a
lawsuit against Tristar's former auditors separate from, but related to, the
stockholder class action against Tristar.

Securities and Exchange Commission Investigation

On June 11, 1992, Tristar learned that it was the subject of an informal
investigation by the staff of the United States Securities and Exchange
Commission regarding the non-disclosure of the

<PAGE> 60

shareholdings of the Core Sheth Families, as well as potential accounting
irregularities and other matters. In August 1992, the Securities and Exchange
Commission issued a formal order of investigation relating to these matters.
Among other things, the formal order provides the Securities and Exchange
Commission staff with the power to subpoena documents and to compel testimony
from witnesses.

Tristar has reported the results of the Special Committee's investigation
to the Securities and Exchange Commission, and both Tristar and the Core Sheth
Families are cooperating with the Securities and Exchange Commission's
investigation, which is continuing. Tristar does not anticipate that the
resolution of this matter will have a material adverse effect on Tristar's
financial condition.

Federal Grand Jury Investigation

As previously disclosed, a federal grand jury in Greenville, South
Carolina had been examining the events relating to the previously undisclosed
ownership interest of the Core Sheth Families and other issues. On March 31,
1994, Tristar entered into an agreement with federal authorities pursuant to
which Tristar will not be prosecuted in connection with the matters under
investigation by the grand jury.

Tristar and the Core Sheth Families, who hold approximately 60.5% of
Tristar's outstanding Common Stock (71% assuming the exercise of all outstanding
warrants) principally through Starion B.V.I., have actively cooperated with the
federal inquiry. Tristar's agreement with federal authorities is contingent upon
continued cooperation by Tristar and companies affiliated with the Core Sheth
Families.

Under the terms of the agreement, Shashikant S. Sheth, an individual
member of the Core Sheth Families and a director of Tristar, pled guilty to a
technical infraction based on his failure to disclose fully the group's
ownership of Tristar stock. Tristar's President, Viren S. Sheth, pled guilty to
an infraction in connection with aiding and abetting the disclosure violation.
The agreement with federal authorities acknowledges that these individuals were
unaware of the legal requirement that was violated. These infractions are the
lowest possible level of federal charge, and do not subject them to any term of
incarceration.

Starion B.V.I. pled guilty to a felony in connection with the failure to
disclose that ownership interest. In connection with its plea, Starion B.V.I.
will remit to the United States $5.5 million over a period of five years.

The United States Attorney's office has advised that Starion B.V.I., Jay
Sheth, Viren S. Sheth, Tristar and seven other entities affiliated with the Core
Sheth Families had, prior to the agreement with federal authorities, been the
subject of a sealed indictment by a federal grand jury in connection with these
matters. The agreement provided for the dismissal of the indictment with regard
to these parties. Other former Tristar officials named in the indictment have
also entered into settlements with the United States Attorney's office.

Insurance Policy Reimbursement

Tristar is the owner of an executive liability and indemnification policy
issued by Federal Insurance Company ("Federal") that provides coverage for
certain claims made against Tristar and its officers and directors during the
period January 20, 1992 to January 20, 1993. Federal initiated an interpleader
action in the United States District Court for the District of South Carolina
when, in connection with the class action litigation described above, multiple
and competing claims were made against the policy that were reasonably
anticipated to exhaust the $2 million limits of liability under the policy.

In November 1993, Tristar and certain of the settling defendants in the
class action reached a settlement with Federal providing for the payment of
$1.25 million of the policy proceeds to Tristar to reimburse it for funds
previously expended as settlement payments and litigation costs in the class
action. The settlement was approved by the District Court on December 29, 1993.
In January 1994, two former directors of Tristar, Ross Freitas and Carolyn
Kenner, appealed the District Court's action. That appeal was ultimately
dismissed, and in December 1994, a disbursement of $1.25 million was made to
Tristar.

<PAGE> 61

On March 14, 1995, Tristar filed a motion for disbursement of the
remaining proceeds of the policy, $750,000, and of all interest accrued on the
proceeds of the policy. Tristar's motion was opposed by Ross Freitas and Carolyn
Kenner, who filed a motion of their own seeking disbursement of $434,956.48 of
the policy proceeds. On June 21, 1995, the Court ordered that all remaining
proceeds of the policy ($815,232.65) be disbursed to Tristar. On June 26, 1995,
the Court terminated the action and dismissed it with prejudice. On June 29,
1995, Ross Freitas and Carolyn Kenner filed a motion to alter or amend the
Court's decision and to hold an evidentiary hearing. On July 13, 1995, Tristar
filed its opposition to the motion, which is currently pending before the Court.

Since January 1, 1995, Tristar's personal fragrance products have not been
in compliance with regulations of the California Air Resources Board (the
"CARB") with respect to volatile organic compounds ("VOCs"). Tristar anticipates
that a reformulation of its products will be required to achieve compliance with
the VOC regulations. Tristar intends to file with the CARB required
registrations of its products and an application for a temporary variance from
VOC regulations in August 1995. Based on preliminary discussions with
representatives of the CARB, Tristar anticipates that it will be allowed to
continue to sell its products in California during consideration of its variance
application and that its variance will be granted. Any interruption of Tristar's
sales in California would have a material adverse effect on the Company's
financial condition.

Other

Tristar is subject to ordinary and routine litigation arising out of the
conduct of its business. Management believes that the ultimate disposition of
these proceedings will not have a material adverse effect on Tristar's financial
condition.

<PAGE> 62
TRISTAR CORPORATION
SELECTED FINANCIAL DATA
(IN THOUSANDS EXCEPT PER SHARE DATA)

The following selected financial data of Tristar has been derived from its
historical consolidated financial statements and should be read in conjunction
with such financial statements and the notes thereto included herein. The
selected financial data of Tristar as of May 31, 1995 and for the nine month
periods ended May 31, 1995 and 1994 has been derived from the unaudited
consolidated financial statements of Tristar.

<TABLE>
<CAPTION>
Years Ended August 31, Nine Months Ended
-------------------------------------------------------------- ------------------
May 31, May 31,
1994 1993 1992 1991 1990 1995 1994
-------- -------- -------- -------- -------- -------- -------
<S> <C> <C> <C> <C> <C> <C> <C>
Historical statement of (Unaudited)
income data:
Net sales $ 46,488 $ 51,409 $ 47,519 $ 30,865 $ 18,185 $ 24,091 $35,861
Net income (loss) (4,291) (8,159) 3,287 1,977 387 (1,621) (2,574)
Net income (loss) per
common share:
Primary (.65) (1.23) .46 .30 .06 (.24) (.39)
Fully diluted (.65) (1.23) .46 .28 .06 (.24) (.39)

Historical balance sheet data:
Total assets $ 21,021 $ 23,218 $ 19,700 $ 13,745 $ 11,504 $ 18,464
Short-term borrowings 4,511 2,505 3,630 1,706 2,027 3,964
Long-term debt 9,554 9,515 1,088 1,282 1,502 8,031
Cash dividends declared
per common share 0 0 0 0 0 0
</TABLE>

The Company recorded a $2,065,000 insurance reimbursement in the nine month
period ended May 31, 1995. See Note 16 of the Notes to Consolidated Financial
Statements.

The Company has significant related party transactions. See Note 6 of the Notes
to Consolidated Financial Statements.

All per share amounts have been adjusted to reflect a 2-for-1 common stock split
in the form of a dividend effected on February 21, 1992.

<PAGE> 63

TRISTAR MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS

RESULTS OF OPERATIONS FOR THREE AND NINE-MONTH PERIODS ENDED MAY 31, 1995 AND
MAY 31, 1994

For the three months ended May 31, 1995, Tristar recorded a net loss of
$1,196,000 or $0.18 per share, bringing the results for the nine months ended
May 31, 1995 to a loss of $1,621,000 or $0.24 per share.

NET SALES

Net sales for the third quarter of fiscal 1995 were $6,672,000, a decrease
of 30.2% compared to net sales of $9,557,000 in the same quarter of fiscal 1994.
Net sales of $24,091,000 for the nine-month period ended May 31, 1995, decreased
32.8% compared to net sales of $35,861,000 for the same period in fiscal 1994.
The decrease in sales in the fiscal 1995 periods compared to the same periods in
fiscal 1994 was primarily attributable to weak economic conditions in Mexico in
the first quarter and the subsequent devaluation of the Mexican Peso in the
latter half of December 1994. Also contributing to decreased sales were lower
sales to certain U.S.-based customers who sell outside Tristar's exclusive
marketing territories and a general decrease in demand in the wholesale channel
of distribution.

NET SALES -- CHANNELS OF DISTRIBUTION

Tristar markets and distributes products to the wholesale, independent
retail and chain/mass merchandiser channels. For the quarter and nine months
ended May 31, 1995, Tristar experienced a decrease in sales to the wholesale
channel when compared to the same periods ended May 31, 1994. The decrease in
sales to the wholesale channel is primarily attributable to the factors
described in the preceding paragraph. Although slower and less than originally
anticipated, Tristar has experienced growth in the independent retail and
chain/mass merchandiser channel. Tristar is continuing to devote resources to
all channels of distribution, with emphasis placed on promotional programs and
limited advertising. The impact of these marketing efforts on the balance of
fiscal 1995 is not known at this time.

NET SALES -- FOREIGN-BASED CUSTOMERS

Tristar's customers are located primarily in the United States, Mexico and
Canada. Sales made directly to foreign-based customers as a group, which
includes those in Mexico and Canada, decreased in the three-month and nine-month
periods ended May 31, 1995, when compared to the same period ended May 31, 1994.
These direct sales decreased to $3,042,000 (12.6% of net sales) from $6,278,000
(17.5% of net sales) when comparing the respective nine-month periods ended May
31, 1995, and 1994. A major component of this continuing decline was sales to
Mexico where economic conditions, including the Peso devaluation, and political
conditions severely affected the purchasing power of a majority of the Mexican
population. The conditions in Mexico also had a material adverse effect on
indirect sales, by certain of Tristar's U.S.-based customers, into Mexico.

In the first three quarters of fiscal 1994, certain of Tristar's
U.S.-based customers continued to export a significant portion of their
purchases to countries outside Tristar's exclusive marketing territories. In the
latter part of fiscal 1994 and in the first nine months of fiscal 1995, as
expected, sales to such customers decreased significantly, due to the
Distribution Agreement concluded in October 1992 between Tristar and its
fragrance suppliers, wherein Tristar agreed not to sell or cause to be sold any
products of those suppliers in any country other than the United States, Mexico,
Canada and Puerto Rico. The amount of any sales lost cannot be determined as
Tristar does not have access to such customer information.

NET SALES -- PRODUCTS PURCHASED FROM RELATED PARTIES

Of the net sales for the three and nine months ended May 31, 1995,
approximately 88.3% ($5,889,000) and 90.0% ($21,686,000), respectively, resulted
from the sale of products purchased from related parties. For the comparable
periods ended May 31, 1994, sales of products purchased from related

<PAGE> 64

parties accounted for 92% of total net sales. The balance of the net sales in
those periods was generated primarily from products produced by Tristar's
cosmetic pencil factory. Sales of cosmetic pencils included sales of $220,000
and $630,000, respectively, for the three and nine months ended May 31, 1995, to
an affiliate of the Core Sheth Families. For the comparable three- and
nine-month periods in fiscal 1994, sales to the same related party were $79,000
and $191,000, respectively.

GROSS PROFIT

Tristar's gross profit for the three and nine months ended May 31, 1995,
was $894,000, or 13.4% of net sales and $4,270,000 or 17.7% of net sales,
respectively, compared to $1,648,000, or 17.2% of net sales and $6,571,000 or
18.3% of net sales, respectively, for the same periods in fiscal 1994. The
decrease in gross profit percentage when comparing both periods was principally
due to increasing inventory reserves by $261,000 to re-value certain inventories
discontinued in the third quarter of fiscal 1995 to anticipated market prices.
In addition, in fiscal 1995, Tristar has experienced increased freight costs (1%
of sales) offset somewhat by selective pricing policy changes that were
instituted in the last quarter of fiscal 1994.

Tristar anticipates that gross profits, as a percentage of sales, for the
balance of the year are expected to remain at or will be slightly lower than
those of the previous quarters of fiscal 1995 as Tristar pares its inventory
levels.

EXPENSES

Tristar's selling, general and administrative ("SG&A") expenses decreased
for the three and nine months ended May 31, 1995 by 16.8% to $2,300,000 and by
20.8% to $6,576,000, respectively. As a percentage of net sales for the three-
and nine-month periods ended May 31, 1995, Tristar's SG&A increased to 34.5% and
27.3%, respectively, from 28.9% and 23.1%, respectively, for the same periods in
fiscal 1994. These increases in SG&A expenses as a percentage of sales were
attributable to lower sales in the fiscal 1995 periods as compared to the same
periods in fiscal 1994. The decrease of SG&A expenses in the fiscal 1995 periods
were largely attributable to restructuring and reduced marketing promotions and
advertising production costs occurring in the first nine months of fiscal 1995,
closure of the South Carolina distribution center in May 1994 and the effect of
selective headcount reductions in fiscal 1994. Included in the three- and
nine-month amounts for fiscal 1995 are expenses of $149,000 incurred in the sale
and closing of the pencil plant manufacturing operations in May 1995. Also
included is an expense of $150,000 to write the pencil manufacturing facility
and land down to estimated net realizable value. See Note 11 to the financial
statements for further discussion of the sale of Tristar's cosmetic pencil
manufacturing business.

Management expects that for the remainder of fiscal 1995, SG&A expenses
will remain below the 1994 levels as Tristar continues to realize benefits
associated with the lower advertising expenses, closure of the South Carolina
distribution center and the selective headcount reductions that occurred in
fiscal 1994, plus continued efforts to control expenses in fiscal 1995. However,
as sales continue to be impacted by instability in Tristar's markets, SG&A
expenses as a percentage of sales may remain above levels of fiscal 1994.

INTEREST EXPENSE

Interest expense increased in the first nine months of fiscal 1995 to
$961,000, compared to $859,000 for the comparable period of fiscal 1994,
primarily as a result of a higher rate of interest due to prime rate increases
under the $10,000,000 revolving credit facility.

OTHER (EXPENSE) INCOME

The third quarter included expenses of $87,000 incurred in preparing for
the Merger, $177,000 of litigation expenses arising from events related to the
shareholder litigation, and $63,000 from the amortization of the valuation of
warrants offset partially by miscellaneous income items.

<PAGE> 65

In addition, the nine months of fiscal 1995 included $127,000 of warrant
valuation amortization for the first six months of fiscal 1995.

Tristar anticipates that expenses related to the Merger will be materially
higher in the fourth quarter of fiscal 1995.

INSURANCE REIMBURSEMENT

On December 6, 1994, Tristar received a court approved distribution of
$1,250,000 from the proceeds of an executive liability and indemnification
policy owned by Tristar, which was recorded as other income in the financial
statements of Tristar for the quarter ended November 30, 1994.

On June 23, 1995, Tristar received a court approved distribution of the
balance ($750,000) of the proceeds of an executive liability and indemnification
policy owned by Tristar. In addition, Tristar received a distribution of $65,000
of interest earned during the period the court held the proceeds. This court
approved distribution has been contested by other claimants under the policy.
See "Information Concerning Tristar -- Business -- Litigation -- Insurance
Policy Reimbursement."

NET LOSS

Tristar recorded a net loss for the third quarter of fiscal 1995 of
$1,196,000, or $.18 per share compared to a net loss of $1,413,000 or $.21 per
share for the same period in fiscal 1994. The net loss for the nine months ended
May 31, 1995, was $1,621,000 or $.24 per share, compared to a net loss of
$2,574,000, or $.39 per share, in the same period of fiscal 1994.

POTENTIAL ADVERSE EFFECTS ON RESULTS OF OPERATIONS FOR FUTURE PERIODS

Each or all of the following factors could have an adverse effect on
anticipated results for the balance of fiscal 1995.

1. The Mexican Market. In late December 1994, the Mexican government
devalued the Mexican Nuevo Peso by allowing the Peso to float freely against the
U.S. dollar. This devaluation has resulted in a general increase of 80% or more
in the cost of imported products to the Mexican consumer. The increase and the
resultant instability, including significant business failures and resultant
unemployment, has caused a sharp decline in purchases of Tristar's products by
the Mexican consumer. It is not known if and when the Peso will stabilize at a
level where somewhat normal purchasing will resume. Prior to the above-mentioned
economic and political instability, sales directly and indirectly into Mexico
accounted for a significant portion of Tristar's total sales.

Tristar's products have been and are sold, directly or indirectly, into
the Mexican market. Tristar believes that some of its customers based in the
United States sell Tristar's products (as well as the products of other
companies) to purchasers who, in turn, may attempt to import goods into Mexico
without full payment of applicable Mexican taxes and customs duties. Enhanced
enforcement efforts by Mexican authorities may have an adverse effect on
Tristar's sales to such customers.

Tristar has been unable to determine the effect, if any, that the
implementation of NAFTA has had or will have on Tristar's business.

2. The Economy. Weak economic conditions in Mexico combined with the
devaluation of the Mexican currency, noted above, will continue to adversely
impact sales.

3. The Distribution Channels. Although Tristar is making extensive
efforts to market products into the chain/mass merchandiser marketplace, Tristar
remains heavily dependent on its original markets, the wholesale and independent
retail distribution channels. The maturation of these original markets, combined
with the continued economic conditions and competitive pressures, have resulted
in a slowing of the general growth of the market. These factors are expected by
management to have some effect on the remainder of fiscal 1995.

<PAGE> 66

4. Loss of Foreign-Based Customers. Under the Distribution Agreement
concluded in October 1992 between Tristar and its fragrance suppliers, Tristar
agreed not to sell or cause to be sold any products of those suppliers in any
country other than the United States, Mexico, Canada and Puerto Rico. In fiscal
1994 and 1995, direct sales outside of the named countries were negligible.

5. Supply of Products. Tristar's ability to satisfy sales orders for its
fragrance products is directly dependent on the supply of products from
Eurostar. As part of the settlement of the stockholders' class action
litigation, Eurostar and Tristar reached an agreement whereby the relationship
between the two entities will continue through at least fiscal 1999. If Eurostar
was physically unable to provide product, the effect on Tristar would be minimal
as other affiliates of the Core Sheth Families have similar manufacturing
facilities available to support Tristar.

Tristar is dependent on the supply of cosmetic products and cosmetic
pencils from related parties. If such related parties were to cease or to be
unable to supply these products, the lack of such products would have an adverse
effect on Tristar until a secondary supplier could be located.

At this time, it is not known whether, or to what degree, the above
factors will have a material adverse impact on future results.

LIQUIDITY AND CAPITAL RESOURCES

Tristar had available at May 31, 1995, a revolving line of credit that
permits borrowings of up to $10 million at prime rate plus five percentage
points per annum, with additional fees approximating a percentage point per
annum. Borrowings under this credit agreement are limited to 70% of eligible
accounts receivable and 30% of eligible inventories as defined in the agreement.
Collateral for the credit agreement consists of all assets of Tristar. The
agreement contains a material adverse change provision as well as certain
restrictions and conditions, among which are limitations on cash dividends and
capital expenditures.

As of July 7, 1995, Tristar and its lender amended the existing credit
agreement and extended the maturity date to July 7, 1997 from the original
maturity date of October 7, 1995. Under the terms of the amendment, borrowing
availability was increased to 75% of eligible accounts receivable and 50% of
eligible inventories as defined in the original agreement. In addition, the
interest expense was reduced to prime rate plus three percentage points per
annum with additional fees approximating a percentage point per annum.

During the nine months ended May 31, 1995, net borrowings decreased by
$547,000 to $3,964,000 under the revolving line of credit. Additional borrowings
of $875,000 were available as of May 31, 1995, under the revolving line of
credit based on the formulas used to determine availability. See Note 5 of
Tristar's Notes to Consolidated Financial Statements for additional information
on the line of credit.

Operations in the nine months ended May 31, 1995, utilized $2,827,000 in
cash primarily due to increased inventories ($830,000), decreased accrued
expenses ($420,000) and the final payment into escrow of the stockholders'
litigation settlement ($4,500,000) and net loss adjusted for non-cash items
($202,000) which included an executive liability and indemnification insurance
policy reimbursement of $2,000,000, plus $65,000 in accumulated interest. This
item was the major factor in reducing the net loss for the nine months ended May
31, 1995. Offsetting these were a refund of federal income taxes of $1,722,000,
decreased trade accounts receivable ($1,268,000), and increased accounts payable
($1,004,000).

<PAGE> 67

Maturity of the varying financing terms offered to customers due to
seasonality and competitive pressures and lower sales levels were the major
contributors to the $1,268,000 decrease in accounts receivable balances for the
first nine months of fiscal 1995.

Inventories increased in the first six months of fiscal 1995 primarily as
a result of ordering product in anticipation of the historical seasonal upsurge
in sales, which did not occur. See "-- Results of Operations". Also contributing
to the increase in inventory in the third quarter was the acquisition of
inventory ($925,000) for a new fragrance line designed primarily to meet the
Mexican consumer requirements in a post-devaluation period. Offsetting the
increases noted above was the sale of the cosmetic pencil manufacturing
inventories ($420,000) as part of the sale of the cosmetic pencil plant
operations to Eurostar. The net increase in inventory ($830,000) has resulted in
an increase in accounts payable to Tristar's primary supplier, Eurostar.

Accrued expenses were reduced as payments were made of bonuses ($90,000)
and sales promotions ($353,000) that had been accrued during fiscal 1994.

Capital expenditures during the nine months ended May 31, 1995 were
$129,000, consisting primarily of investments in machinery and equipment
($115,000). Capital expenditures in the remainder of fiscal 1995 are expected to
be primarily for computer equipment and software with minimal amounts being
invested in equipment for distribution activities. These amounts are not
expected to be material to the cash flow of Tristar.

Additional subordinated debt borrowings of $4,000,000 plus $500,000
received from the purchase of warrants for two million shares of Tristar's
Common Stock by the Core Sheth Families were used to fund the final payment on
the stockholders' litigation settlement. Offsetting the increase in subordinated
debt was utilization of $1,000,000 of the $1,250,000 insurance proceeds received
in December 1994 for repayment of subordinated debt.

Management believes that Tristar's revolving line of credit and the
continued ability to extend credit terms as necessary with Tristar's primary
supplier, Eurostar, should be sufficient to meet the cash requirements of
Tristar for the remainder of fiscal 1995.

Management anticipates that with (1) projected increased sales under
existing and new marketing programs, (2) continued controls over expenses and
improved management of inventory, (3) increased borrowing capability under the
July 7, 1995 amendment to the loan agreement with its lender and (4) expected
continued ability of related-party vendors to extend credit beyond contractual
limits as required, Tristar will also remain viable in future fiscal years. If,
however, management's plans were not realized and the current level of operating
losses plus interest expense were to continue through the fiscal year ending
August 31, 1996, shareholders' equity would become negative and the financial
position of Tristar would be adversely affected. In fiscal 1996, Tristar would
not have the benefit of any further income tax refunds nor would it receive any
further proceeds from insurance policies. Under such circumstances, there can be
no assurance that Tristar's related-party vendors would continue to extend
credit beyond normal contractual terms nor that Tristar's commercial lender
would be willing to continue to extend credit. If not, Tristar's viability would
be questionable.

INFLATION

During the nine months ended May 31, 1995, and consistent with the nine
months ended May 31, 1994, inflation did not have a material adverse impact
either on Tristar's net sales or results from operations.

RESULTS OF OPERATIONS FOR THE YEARS ENDED AUGUST 31, 1992, 1993 AND 1994

RESULTS OF OPERATIONS -- FISCAL 1994 COMPARED TO FISCAL 1993

Net sales for the fiscal year ended August 31, 1994 were $46,488,000, a
decrease of 9.6% compared to net sales of $51,409,000 in the fiscal year ended
August 31, 1993.

<PAGE> 68

Geographically the decrease in net sales in fiscal 1994 was primarily
attributable to Tristar's no longer marketing to countries outside of its
exclusive marketing territories. In fiscal 1993, Tristar realized sales of
approximately $3,571,000 to those outside countries, whereas, in fiscal 1994,
these sales were approximately $92,000. Some of Tristar's U.S.-based customers
also sold into countries outside Tristar's marketing territories resulting in
Tristar's indirectly obtaining additional sales in those countries. These
indirect sales continued into fiscal 1994, but by the end of fiscal 1994 there
were indications that such sales were declining. The amount of any sales lost
due to the cessation of indirect shipments cannot be determined as Tristar does
not have access to such customer information.

In fiscal 1994, the Mexico market continued to be a key market for Tristar
in spite of the economic and political conditions which affected the purchasing
power of the Mexican population, and disruptions in the passage of products
through the United States-Mexico border. Direct exports to Mexico in fiscal 1994
increased over fiscal 1993, $6,639,000 compared to $4,269,000. Management
believes that indirect sales (product distributed into Mexico by U.S.-based
customers) decreased in fiscal 1994 when compared to fiscal 1993 as a result of
the factors noted above. Although the precise volume of indirect sales cannot be
determined because customers do not provide such information to Tristar,
management believes that any decrease in indirect sales could possibly have
offset any increase in direct sales.

Export sales of cosmetic pencils to an affiliate of the Core Sheth
Families decreased from $1,359,000 in fiscal 1993 to $343,000 in fiscal 1994.
See "Information Concerning Tristar -- Business -- Narrative Description of
Business -- Suppliers" and Note 6 of Tristar's Notes to Consolidated Financial
Statements. Of the total sales of cosmetic pencils for fiscal years 1994 and
1993, approximately 8% and 25%, respectively, were sold to such affiliate. The
sharp decline in pencil sales to such affiliate can be attributed to increased
competitive activity in their markets.

Total direct export sales in fiscal 1994 were approximately $8,301,000
(18%) compared to approximately $11,080,000 (22%) in fiscal 1993.

Distribution in the U.S. markets is believed to have remained relatively
constant between fiscal 1994 and fiscal 1993. As sales to U.S. customers include
product which is ultimately destined for countries outside of the U.S., as noted
above, it is not possible to determine precisely the amount of sales which
ultimately end up in the U.S. marketplace.

On a product line basis, in fiscal 1994 the Euro Collections Fragrances
line was adversely affected by the discontinuance of sales to countries outside
Tristar's exclusive marketing territories, as this was the primary product line
purchased by customers in those countries. In addition, in fiscal 1994, lower
sales were realized in the (1) cosmetic pencil line primarily due to a decrease
in sales to affiliates of the Core Sheth Families (see discussion above), (2)
Premiere Fragrance line and (3) Eurolux Fragrance line which was discontinued in
fiscal 1993. Partially offsetting these decreases was a growth in the Club
Exclusif Fragrances, Gina Cosmetics, dusting powders, and in the recently
introduced bath and body products.

Sales declines discussed above due to the discontinuance of sales outside
Tristar's exclusive marketing territories, lower cosmetic pencil sales and lower
sales into Canada contributed to a decrease in the wholesale channel of
distribution in fiscal 1994 as compared to fiscal 1993. The wholesale channel is
also the most mature channel of distribution for the type of products sold by
Tristar and therefore has the most competitive pressures. Steady growth in sales
in fiscal 1994 in the chain and mass merchandising channel, including specialty
chains, represented a positive step forward for Tristar. This growth however,
was not sufficient to overcome the sales decrease in the wholesale channel.

Of the net sales of $46,488,000 in fiscal 1994 and $51,409,000 in fiscal
1993, approximately 91% and 89%, respectively, resulted from the sale of
products purchased from affiliates of the Core Sheth Families. A majority of
these products are purchased under the Distribution Agreement. The balance of
the net sales in both fiscal 1994 and fiscal 1993 was generated primarily from
products produced by Tristar's cosmetic pencil factory.

Tristar's gross profit for the fiscal year ended August 31, 1994, was
$8,031,000, or 17.3% of net sales, compared to $11,042,000 or 21.5% of net sales
in fiscal 1993. The decrease in gross profit was

<PAGE> 69

principally attributable to promotions offered to meet competitive offerings,
dependence on sales in the competitive lower margin wholesale channel, and the
sale of discontinued or slow moving products at minimal gross profit or at a
loss.

Tristar's selling, general, and administrative ("SG&A") expenses increased
21.8% to $10,662,000 for the fiscal year ended August 31, 1994 from $8,753,000
in the prior fiscal year. As a percentage of net sales, Tristar's SG&A increased
to 22.9% in fiscal year 1994 from 17% in fiscal year 1993. The additional
expenses were primarily the result of advertising, new marketing promotions,
costs associated with closure of the South Carolina Distribution Center
($121,000), and increased business taxes and insurance expense ($326,000).

Interest expense increased in fiscal year 1994 to $1,195,000, compared to
$248,000 in fiscal year 1993 as a result of (1) interest expense associated with
the stockholder litigation settlement ($481,000), (2) higher average borrowings
under the revolving line of credit ($231,000), and (3) a higher rate of interest
(prime plus five percentage points per annum, with additional fees approximating
a percentage point per annum) ($209,000)under the $10,000,000 revolving credit
facility established in fiscal 1994.

Tristar recorded $208,000 in fiscal 1994 and $2,758,000 in fiscal 1993 of
legal and professional expenses related to the stockholder litigation settlement
and to other events that were the subject of the internal investigation by a
Special Committee of the Tristar Board. See "Information Concerning Tristar --
Business -- General Development of Business".

Fiscal year 1994 "Other Income -- Expense" included $367,000 of
amortization of the $2,089,000 value assigned to the extension of the expiration
date of existing warrants to purchase 400,000 shares of Tristar Common Stock and
the granting of new warrants to purchase 2,000,000 shares of Tristar Common
Stock in connection with the stockholder litigation settlement. See "Information
Concerning Tristar -- Business -- Legal Proceedings -- Stockholder Class Action
Litigation" for further information. The remaining portion of the value assigned
will be amortized monthly through fiscal year 2006.

In fiscal 1993, Tristar recorded a $9,500,000 charge related to the
settlement of the stockholder litigation. See "Information Concerning Tristar -
Business -- General Development of Business". This recorded settlement combined
with litigation expenses above (a total of $12,258,000) caused Tristar to record
a pre-tax loss of $10,192,000 in fiscal 1993. Excluding these expenses,
Tristar's fiscal 1993 pre-tax income would have been $2,066,000. Comparably in
fiscal 1994, excluding the litigation and settlement-related expenses of legal
and professional fees ($208,000), interest on debt related to the settlement
($481,000), and amortization expense associated with the warrants valuation
($367,000), Tristar's pre-tax loss would have been approximately $3,330,000.

Tristar recorded an income tax benefit of $95,000 in fiscal 1994 and
$2,033,000 in fiscal 1993, based on anticipated current and deferred benefits to
be received from the recording of the stockholder litigation settlement and the
litigation expenses.

Tristar incurred a net loss of $4,291,000 or $.65 per share, in fiscal
1994 as compared to a net loss of $8,159,000, or $1.23 per share, in fiscal
1993.

RESULTS OF OPERATIONS -- FISCAL 1993 COMPARED TO FISCAL 1992

Net sales for the fiscal year ended August 31, 1993 were $51,409,000, an
increase of 8% compared to net sales of $47,519,000 in the fiscal year ended
August 31, 1992. The major contributors to the increase were the "Premiere
Fragrances" and "Gina Cosmetics" lines of products which were being sold for the
first time in 1993. Less significant contributions were made by other fragrance
lines and products such as dusting powders, bath oils, gift sets, and cosmetic
pencils. Offsetting these increases was a decrease in the older "Carnivale" line
of fragrances, which was discontinued in 1993.

The sales growth was achieved in all channels of distribution.
Geographically, growth was achieved both in the domestic market and in the
foreign markets which include Canada and Mexico. Direct export sales totaled
approximately $11,080,000 (22%) in fiscal 1993 compared to $8,773,000 (18%) in
fiscal 1992. Included in the preceding amounts were direct sales to Mexico of
approximately

<PAGE> 70
$4,269,000 in fiscal 1993 and $4,250,000 in fiscal 1992. In late 1993, Tristar
began phasing out sales to export markets outside of Canada and Mexico since
Tristar was excluded from those markets in accordance with the Distribution
Agreement.

The Mexico market continued to be a key market for Tristar, in spite of
the general disruptions in the passage of products through the United
States-Mexico border. Direct exports to Mexico in 1993 remained at the same
level as they were in fiscal 1992. However, management believes that indirect
exports (product distributed into Mexico by U.S.-based customers) decreased due
to the border disruptions in fiscal 1993 as compared to fiscal 1992. The precise
volume of these indirect sales cannot be determined as Tristar does not have
access to its customers' sales information.

Of the net sales of $51,409,000 in fiscal 1993 and $47,519,000 in
fiscal 1992, approximately 89% and 88%, respectively, resulted from the sale of
products purchased from affiliates of Tristar. See Note 6 of Tristar's Notes to
Consolidated Financial Statements for additional information. The balance of the
net sales in both 1993 and 1992 was generated primarily from products produced
by Tristar's cosmetic pencil factory. The cosmetic pencil factory sales for 1993
and 1992 include sales of $1,359,000 and $579,000, respectively, to affiliates
of Tristar. See Note 6 of Tristar's Notes to Consolidated Financial Statements.
Of the total sales of cosmetic pencils for fiscal years 1993 and 1992,
approximately 25% and 11%, respectively, were sold to affiliates of Tristar.

Tristar's gross profit for the fiscal year ended August 31, 1993, was
$11,042,000, or 21.5% of net sales, compared to $12,390,000 or 26.1% of net
sales in fiscal 1992. The decrease in gross profit was principally attributable
to (1) promotions offered to meet competitive offerings and to generate
additional cash, (2) dependence on sales in the competitive lower margin
wholesale channel, and (3) the sale of discontinued product lines at minimal
gross profit.

Tristar's selling, general, and administrative ("SG&A") expenses
increased 59.4% to $8,753,000 for the fiscal year ended August 31, 1993 from
$5,492,000 in the prior fiscal year. As a percentage of net sales, Tristar's
SG&A increased to 17% in fiscal year 1993 from 11.6% in fiscal year 1992. The
additional expenses were primarily the result of increased legal and
professional expenses in the normal course of business, the relocation of
corporate headquarters and related personnel, developing new marketing programs
and hiring supporting sales personnel and launching of new products.

Interest expense increased slightly in fiscal year 1993 to $248,000,
compared to $236,000 in fiscal year 1992, as a result of increased average
short-term borrowings. This increase was partially offset by the repayment in
full of Tristar's industrial revenue bond in July 1993.

Tristar recorded in fiscal 1993, $2,758,000 of legal and professional
expenses related to the stockholder litigation settlement and to other events
that were the subject of the internal investigation by a Special Committee of
Tristar's Board. See "Information Concerning Tristar -- Business -- General
Development of Business". This amount included $500,000 as estimated expenses to
conclude both the settlement and the remaining open events.

In fiscal 1992, a total of $1,650,000 was recorded to reflect the costs
of the Special Committee itself, and related legal and accounting costs. This
amount, which is shown in "Litigation Expenses" included an estimated amount of
$717,000 to complete the work of the Special Committee. See "Information
Concerning Tristar -- Business -- Legal Proceedings" and Note 13 of Tristar's
Notes to Consolidated Financial Statements.

The most significant expense item in fiscal 1993 was the recording of
$9,500,000 for the settlement of the stockholder litigation. See "Information
Concerning Tristar -- Business -- General Development of Business". This
recorded settlement combined with litigation expenses above (a total of
$12,258,000) caused Tristar to record a loss before provision for income taxes
of $10,192,000. Excluding such expenses, Tristar's income before taxes on a pro
forma basis would have been approximately $2,066,000. Comparatively, in 1992,
Tristar had income before taxes of $5,048,000. Excluding the expenses of
$1,650,000 related to the Special Committee investigation recorded in fiscal
1992, on a pro forma basis, Tristar's income before taxes would have been
approximately $6,698,000.

62
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In fiscal 1993, Tristar recorded an income tax benefit of $2,033,000
based on anticipated current and deferred benefits to be received from the
recording of the stockholder litigation settlement and the litigation expenses.
Tristar's effective tax rate for fiscal 1992 was 34.9%.

LIQUIDITY AND CAPITAL RESOURCES

Tristar obtains working capital from three primary sources: revolving
line of credit, cash generated by operations, and Eurostar in the form of
extended credit terms.

During fiscal 1994, net short-term borrowings increased by $2,006,000
to $4,511,000 at August 31, 1994 under Tristar's revolving line of credit.
Additional borrowings of $1,617,000 were available as of August 31, 1994 under
the credit facility based on the formula used to determine availability. See
Note 4 of Tristar's Notes to Consolidated Financial Statements for additional
information on the current line of credit.

Operating activities in fiscal 1994 utilized $4,935,000 in cash. The
cash utilized was primarily the result of payments under the stockholder
litigation settlement ($3,500,000), a significant decrease in accounts payable,
both to related parties ($2,039,000) and to other vendors ($933,000), an
increase in accounts receivable ($1,531,000), and a net loss of $874,000
adjusted for non-cash items. Offsetting the uses of cash were decreases in
inventory ($3,463,000), refundable income taxes ($354,000), and increases in
accrued expenses ($851,000).

Two payments ($900,000 in January 1994, and $2.6 million in May 1994)
were made under the stockholder litigation settlement. The financing of these
payments was through the issuance of long-term subordinated debt with Nevell
Investments as further discussed below.

With the cash provided by the new revolving line of credit, accounts
payable were reduced by $2,972,000 during fiscal 1994 in order to bring payables
closer to customary terms. Prior to the line of credit, vendor payables had been
extended beyond customary terms due to the restraints of the previous line of
credit. With the new line of credit, non-related party vendors were generally
brought back within customary terms, whereas payables to related parties, with
their consent, were periodically extended on a short-term basis beyond customary
terms. Varying financing terms offered to customers due to seasonality and
competitive pressures were the major contributor to the $1,531,000 increase in
accounts receivable balances during fiscal 1994. Inventories decreased through
improved inventory management, close-outs of discontinued products and timing of
inventory receipts at year end. Refundable income taxes decreased as a result of
the receipt of a refund of estimated taxes paid in 1993 and the carryback of
fiscal 1993 losses against taxes paid in prior years. This decrease was
partially offset by the refund receivable recorded in fiscal 1994 as a result of
the carryback of the fiscal 1994 loss against taxes paid in prior years. Accrued
expenses increased primarily as a result of promotions offered during fiscal
1994 ($445,000) and interest accruals related to the settlement of the
stockholder litigation ($386,000).

Capital expenditures during fiscal 1994 totaled $440,000, primarily for
distribution equipment, computer equipment and software and furniture and office
equipment. Capital expenditures in fiscal 1993 and 1992 were $604,000 and
$381,000, respectively.

The settlement of the stockholder class action litigation recorded in
May 1993 resulted in a material change to Tristar's long-term debt-to-equity
ratio. Tristar recorded $5 million, of which $3.5 million was incurred in fiscal
1994, as subordinated long-term debt. See "Information Concerning Tristar --
Business -- Legal Proceedings -- Stockholder Class Action Litigation". These
borrowings bear interest at the Long-Term Federal Rate. Other than the
$1,000,000 repayment of the subordinated debt out of proceeds from Tristar's
executive liability and indemnification policy, the remaining repayments will
begin in the year 2001.

INFLATION

During the fiscal year ended August 31, 1994, and consistent with
Tristar's 1993 and 1992 fiscal years, inflation did not have a material adverse
impact either on Tristar's net sales or income from continuing operations.

63
<PAGE> 72
TRISTAR MANAGEMENT

DIRECTORS

The following table contains certain information with respect to the
members of the Tristar Board as of July 12, 1995:

Served as a
Name Age Positions and Offices with the Company Director Since
- ---- --- -------------------------------------- --------------
<S> <C> <C> <C>
Richard P. Rifenburgh(1) 63 Chairman of the Board of Directors 1992

Robert R. Sparacino(2) 67 Vice Chairman of the Board of Directors 1992

Viren S. Sheth 46 President and Chief Executive Officer and 1992
Director

Daniel R. Carter(3) 61 Director 1992

Shashikant S. Sheth 48 Director 1989
</TABLE>

(1) Mr. Rifenburgh became Chairman of the Board in August 1992. The
Chairman of the Board is not an officer of Tristar.

(2) Dr. Sparacino became Vice Chairman of the Board in August 1992. The
Vice Chairman of the Board is not an officer of Tristar.

(3) Mr. Carter served as President and Chief Executive Officer of Tristar
from August 3, 1992 through December 3, 1992.

None of the persons set forth in the table above was selected as a
director pursuant to any arrangement or understanding between him and any other
person (other than directors or officers of the Company acting solely in their
capacities as such) except for Shashikant S. Sheth, who agreed to serve as a
director of Tristar pursuant to a consensus among the Core Sheth Families as set
forth in the Core Sheth Schedule 13D filed September 4, 1992 furnished to
Tristar (the "Core Sheth Schedule 13D"). The Core Sheth Families is a group
which is the beneficial owner of 60.5% of the Tristar Common Stock (71% assuming
the exercise of all outstanding warrants) as more particularly set forth below
and in the Core Sheth Schedule 13D and amendments thereto. For a discussion of
the relationships among Viren S. Sheth, Shashikant S. Sheth and entities
controlled by the Core Sheth Families, including Eurostar, see "-- Certain
Transactions".

INFORMATION WITH RESPECT TO DIRECTORS

RICHARD P. RIFENBURGH has served as Chairman of the Board of Moval
Management Corporation since 1968. Moval Management Corporation is a management
consulting firm which specializes in restoring companies in financial distress.
From February 1989 until May 1991, Mr. Rifenburgh served as Chairman of the
Board and Chief Executive Officer of MiniScribe Corporation, a publicly-held
company and manufacturer of computer disk drives. From 1987 to 1990, he was a
General Partner at Hambrecht and Quist Venture Partners, a venture capital
organization. From 1988 to 1990, he was Chairman of the Board and Chief
Executive Officer of Ironstone Group, Inc., a publicly-held holding company. Mr.
Rifenburgh currently serves as a director of Library Bureau, Inc. and Concurrent
Computer Corporation, both of which file reports with the Securities and
Exchange Commission (the "Commission") pursuant to

64
<PAGE> 73
the Securities Exchange Act of 1934, as amended (the "Exchange Act"). None of
the companies set forth above with which Mr. Rifenburgh has been affiliated are,
or have been, affiliates of Tristar.

ROBERT R. SPARACINO has served as President and Director of Sparacino
Associates, Inc. since 1981, a management consulting firm specializing in
business consulting. Prior to forming Sparacino Associates, Inc., Dr. Sparacino
was a senior officer of various groups of Xerox Corporation. Dr. Sparacino has
also served as a director of several privately-held companies, principally in
connection with services rendered by Sparacino Associates, Inc. During 1989 and
1990, Dr. Sparacino served as a director and chairman of the Independent
Evaluation Committee of the board of directors of MiniScribe Corporation. Dr.
Sparacino currently serves as a director of Concurrent Computer Corporation,
which files reports with the Commission pursuant to the Exchange Act. None of
the companies with which Dr. Sparacino has been affiliated are, or have been,
affiliates of Tristar.

DANIEL R. CARTER has served as a Director since August 1992. Mr. Carter
also served as President and Chief Executive Officer of Tristar from August 3,
1992 through December 3, 1992. From 1987 to August 1992 and from December 1992
to present, Mr. Carter has served as President of Carter & Associates, a
business consulting firm specializing in on-site consulting in marketing and
general management. Carter & Associates is not affiliated with Tristar. In
August 1994, Mr. Carter became one of the principals with the Moval Management
Corporation. He also serves as a director and Vice Chairman of AG Corporation.

SHASHIKANT S. SHETH, a member of the Core Sheth Families, is based in
Dubai, United Arab Emirates. He has been employed with Jaywir Trading Company,
L.L.C. ("Jaywir") in various positions since 1974, including his present
position as director and stockholder. Jaywir is a diversified import/export
company based in Dubai, United Arab Emirates, owned by the Core Sheth Families
and involved in the distribution of fragrances and cosmetic products in the
Middle East. Since 1983, Mr. Sheth has also been involved with Jamsun Trading
Company, L.L.C. ("Jamsun"), presently as a director and stockholder. Jamsun is
also an import/export company, owned by the Core Sheth Families and involved in
the distribution of fragrances and cosmetic products in the Middle East. Jamsun
is also the beneficial owner of less than 1% of Tristar's Common Stock. Since
1993, Mr. Sheth has been a director of Unistar International, L.L.C.
("Unistar"), a company involved in the trading of perfumes and other cosmetics.
Mr. Sheth is also a director of Nevell Investments, S.A. ("Nevell"), an
investment company. Jaywir, Jamsun, Unistar and Nevell may be deemed to be
affiliates of Tristar. Mr. Sheth is also a director of Starion B.V.I., the
beneficial owner of 58.9% of Tristar's Common Stock (69.8% assuming the exercise
of all outstanding warrants). Starion B.V.I. is controlled by the Core Sheth
Families. For a discussion of the relationships among Shashikant S. Sheth,
Viren S. Sheth and entities controlled by the Core Sheth Families, see
"Information Concerning Tristar -- Certain Transactions".

VIREN S. SHETH became a director, as well as President and Chief
Executive Officer of Tristar on December 3, 1992. Since August 1992, Mr. Sheth
has served as President, Chief Executive Officer and a director of Eurostar, a
Texas-based manufacturer and supplier of fragrance products which is owned and
controlled by the Core Sheth Families. From 1983 to August 1992, Mr. Sheth was a
director of S&J Perfume, a supplier of fragrance products based in the United
Kingdom which sold principally to distributors in the Middle East and to
Tristar. S&J Perfume is also an entity owned and controlled by the Core Sheth
Families. For a discussion of the relationships among Viren S. Sheth, Shashikant
S. Sheth and entities controlled by the Core Sheth Families, see "Information
Concerning Tristar -- Certain Transactions".

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<PAGE> 74
EXECUTIVE OFFICERS

The following is a list of the executive officers of Tristar as of July
12, 1995, their ages, positions and offices with Tristar, and periods during
which they have served in such positions and offices:

Name Age Positions or Offices with Tristar Officer Since
- ---- --- --------------------------------- -------------
<S> <C> <C> <C>
Viren S. Sheth 46 Director, President and Chief Executive Officer December 1992

Eugene H. Karam 48 Executive Vice President and Chief Operating 1988
Officer

Loren M. Eltiste 55 Corporate Vice President, Chief Financial October 1992
Officer, Treasurer and Assistant Secretary
</TABLE>

INFORMATION WITH RESPECT TO EXECUTIVE OFFICERS

Viren S. Sheth's business background is set forth above.

Eugene H. Karam has served as Executive Vice President and Chief
Operating Officer of Tristar since August 1992. Mr. Karam served as a Vice
President of Tristar from 1988 until August 1992. Mr. Karam was first employed
with Tristar as president of Ross Cosmetics Distribution Center, S.W., Inc., a
subsidiary of Tristar which distributed Tristar products principally in the
Southwestern United States and Mexico. From 1977 to 1985, Mr. Karam was employed
by Solo Serve Corporation, a publicly-owned company located in San Antonio,
Texas, where he was responsible for the product purchasing and operation of the
cosmetic departments of that company's 12 retail stores which were located in
various cities in Texas, Alabama and Louisiana.

Loren M. Eltiste has served in his present capacity with Tristar since
October 1992. From October 1988 to October 1992, Mr. Eltiste served as Chief
Accounting Officer, Vice President and Corporate Controller for Tandon
Corporation, a publicly-owned company which manufactured and marketed personal
computers.

FAMILY RELATIONSHIPS AMONG DIRECTORS AND EXECUTIVE OFFICERS

Shashikant S. Sheth, a director of Tristar, and Viren S. Sheth,
President, Chief Executive Officer and a director of Tristar, are brothers.

INVOLVEMENT IN CERTAIN LEGAL PROCEEDINGS

As previously disclosed, a federal grand jury in Greenville, South
Carolina has examined the events relating to the previously undisclosed
ownership interest of the Core Sheth Families and other issues. On March 31,
1994, Tristar entered into an agreement with federal authorities pursuant to
which Tristar will not be prosecuted in connection with the matters under
investigation by the grand jury.

Tristar and the Core Sheth Families, who hold beneficial ownership of
60.5% of Tristar's Common Stock (71% assuming the exercise of all outstanding
warrants), principally through their ownership of Starion B.V.I., have actively
cooperated with the federal inquiry. Tristar's agreement with the federal
authorities is contingent upon continued cooperation by Tristar and companies
affiliated with the Core Sheth Families.

Under the terms of the agreement, Shashikant S. Sheth, an individual
member of the Core Sheth Families and a director of Tristar, pled guilty to a
technical infraction based on his failure, prior to September 1992, to disclose
fully the group's ownership of Tristar's Common Stock. Tristar's President,
Viren S. Sheth, pled guilty to an infraction in connection with aiding and
abetting the disclosure violation. The agreement with federal authorities
acknowledges that these individuals were unaware of the legal

66
<PAGE> 75
requirement that was violated. These infractions are the lowest possible level
of federal charge, and do not subject them to any term of incarceration.

Starion B.V.I., an entity owned by the Core Sheth Families that holds
beneficial ownership of 58.9% of Tristar's Common Stock (69.8% assuming the
exercise of all outstanding warrants), pled guilty to a felony in connection
with the failure to disclose that ownership interest.

On November 22, 1994, Starion B.V.I. was sentenced to five years of
probation and required to pay to the U.S. Government $5.5 million in lieu of a
forfeiture of 2,013,174 of its holdings of shares of common stock of Tristar. On
November 22, 1994, Starion B.V.I. made an initial payment of $2 million to the
Government and executed a non-interest-bearing promissory note for the remaining
$3.5 million. The promissory note is to be paid according to the following
schedule: (a) $700,000 by November 22, 1995; (b) $700,000 by November 22, 1996;
(c) $700,000 by November 22, 1997; (d) $700,000 by November 22, 1998; and (e)
$700,000 by November 22, 1999. The promissory note also requires Starion B.V.I.
to place in escrow one million shares of Tristar Common Stock to secure these
five payments totalling $3.5 million. Starion B.V.I. will retain all rights to
vote and dispose of the shares placed in escrow and the right to receive
dividends on those shares.

On November 22, 1994, Shashikant S. Sheth was sentenced to one year of
probation. The sentence imposed is based upon an infraction for violating
(without knowledge thereof) 17 C.F.R. Section 240.13d-1 and 15 U.S.C. Section
78ff by failing to disclose, prior to September 1992, the Core Sheth Families'
ownership of more than 5% of the outstanding common stock of Tristar.

On November 22, 1994, Viren S. Sheth was sentenced to one year of
probation. The sentence imposed is based on an infraction for violating (without
knowledge thereof) 17 C.F.R. Section 240.13d-1 and 15 U.S.C. Section 78ff by
aiding, abetting and causing the Core Sheth Families' failure to disclose, prior
to September 1992, their ownership of more than 5% of the outstanding common
stock of Tristar.

The U.S. Attorney's Information charging Shashikant S. Sheth and Viren
S. Sheth with these violations expressly alleges that they did not have
knowledge of either of these regulations. The court imposed the following
conditions of probation: (1) complying with all federal and state securities
laws; and (2) directing and insuring that Starion B.V.I. make all required
forfeiture payments under the promissory note and plea agreement.

The sentencing concludes all outstanding criminal proceedings with
respect to the above named persons.

The United States Attorney's office has advised that Starion B.V.I.,
Viren Sheth and certain other persons affiliated with the Core Sheth Families
had, prior to the agreement with federal authorities, been the subject of a
sealed indictment by a federal grand jury in connection with these matters. The
plea agreement provides for the dismissal of the indictment with regard to these
parties.

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<PAGE> 76
Mr. Freitas and Ms. Kenner. Starion B.V.I. believes that the claims brought by
Mr. Freitas and Ms. Kenner are procedurally barred and without merit. Starion
B.V.I. intends to dispute these allegations vigorously.

Except for the matters discussed above, none of Tristar's directors,
officers or affiliates, nor any owner of record or beneficially of more than 5%
of Tristar's Common Stock, nor any associate of any such directors, officers,
affiliates or 5% stockholders, is a party adverse to Tristar or has a material
interest adverse to Tristar in any material legal proceeding.

COMPLIANCE WITH SECTION 16(a) OF THE SECURITIES EXCHANGE ACT OF 1934

Section 16(a) of the Exchange Act requires Tristar's directors,
executive officers and persons who own more than 10% of Tristar's Common Stock
to file with the Commission initial reports of ownership and reports of changes
in ownership of Common Stock and other equity securities of Tristar. Directors,
executive officers and greater than 10% stockholders are required by Commission
regulations to furnish Tristar with copies of all Section 16(a) forms they file.
To Tristar's knowledge, based solely upon a review of Section 16(a) reports
furnished to Tristar and written representations that no other reports were
required, Tristar believes that its officers, directors and holders of more than
10% of Tristar's Common Stock complied with all Section 16(a) filing
requirements during the 1994 fiscal year.

TRISTAR EXECUTIVE COMPENSATION

The following table shows, for the fiscal years ended August 31, 1994,
1993 and 1992, the cash compensation awarded to, earned by or paid to Tristar's
Chief Executive Officer and the remaining most highly compensated executive
officers of Tristar whose total annual salary and bonus was at least $100,000.

Long-Term Compensation
Awards
----------------------------
Annual Compensation Other
Fiscal ---------------------- Annual All Other
Name and Principal Position Year Salary($) Bonus($) Compensation(4) Options(#) Compensation($)
- --------------------------- ---- --------- -------- --------------- ---------- ---------------
<S> <C> <C> <C> <C> <C> <C>
Viren S. Sheth(1) 1994 $150,000 -- -- -- $ 1,298 (5)
President and 1993 106,731 -- -- -- --
Chief Executive 1992 -- -- -- -- --
Officer

Eugene H. Karam
Exec. Vice 1994 150,000 $ 24,375 -- 99,420 12,198 (6)
President 1993 113,146 130,000 -- -- 9,615 (6)
1992 102,739 146,626(3) -- 20,000 5,051 (6)

Loren M. Eltiste(2) 1994 130,241 18,047 -- -- 62,495 (7)
Chief Financial 1993 104,327 15,000 -- 66,206 3,223 (7)
Officer 1992 -- -- -- -- --
</TABLE>

- -------------------------

(1) Viren S. Sheth was elected as President and Chief Executive Officer
effective December 3, 1992. It is anticipated that upon consummation of
the Merger, Mr. Sheth's annual base salary will be the aggregate of his
annual base salaries at Tristar and Eurostar.

(2) Loren M. Eltiste joined Tristar in October 1992.

(3) Such bonus was calculated and paid pursuant to the terms of Mr.
Karam's employment contract with Tristar, which provides that Mr.
Karam shall receive an annual bonus based on Tristar's adjusted
pre-tax profit. Mr. Karam's employment contract provides that if
Tristar's adjusted pre-tax profits are over $3,000,000, his bonus
shall be $120,000 plus 2% of the amount of adjusted pre-tax profits
over $3,000,000. For fiscal year 1992, Tristar had an adjusted pre-tax
profit of $4,331,307, resulting in a bonus of $146,626. See "Tristar
Executive Compensation -- Employment Contracts".

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<PAGE> 77
(4) Excludes perquisites and other benefits if the aggregate amount of such
compensation is the lesser of $50,000 or 10% of the annual salary and
bonus reported for the named executive officer.

(5) The fiscal 1994 amount is comprised of $1,298 contributed to Tristar's
401(k)Plan by Tristar on behalf of Mr. Sheth to match fiscal 1994
pre-tax deferral contributions.

(6) The fiscal 1994, 1993 and 1992 amounts are comprised of (i)
contributions to Tristar's 401(k) Plan by Tristar on behalf of Mr.
Karam to match pre-tax deferral contributions in the amounts of $6,826,
$5,542 and $4,003 in fiscal 1994, 1993 and 1992, respectively; and (ii)
premiums paid by Tristar on behalf of Mr. Karam with respect to
insurance not generally available to all Tristar employees in the
amounts of $5,372, $4,073 and $1,048 in fiscal 1994, 1993 and 1992,
respectively.

(7) The fiscal 1994 amount is comprised of (i) $4,291 contributed to
Tristar's 401(k) Plan by Tristar on behalf of Mr. Eltiste to match
pre-tax deferral contributions in fiscal 1994; (ii) $2,859 in premiums
paid by Tristar on behalf of Mr. Eltiste with respect to insurance not
generally available to all Tristar employees; and (iii) relocation
expenses of $55,345 paid on behalf of Mr. Eltiste by Tristar to
relocate his household from California to Texas. The fiscal 1993 amount
is comprised of $3,223 in premiums paid by Tristar on behalf of Mr.
Eltiste with respect to insurance not generally available to all
Tristar employees.

OPTION GRANTS IN 1994 FISCAL YEAR

The following table provides information concerning grants of stock
options by Tristar to the named executive officers in the fiscal year 1994.
Tristar has not granted any stock appreciation rights.

Potential Realizable Value
at Assumed Annual Rates of
Stock Price Appreciation for
Individual Grants the Option Term
----------------- ---------------
Percentage of Total
Options Granted to
Options Granted Employees in Exercise Price Expiration
Name (#)(1) Fiscal Year ($/Share) Date 5% ($) 10% ($)
- ---- ------ ----------- --------- ---- ------ -------
<S> <C> <C> <C> <C> <C> <C>
Viren S. Sheth -- -- -- -- -- --
Eugene H. Karam 99,420 100% $5.375 2/14/99 $147,640 $326,246
Loren M. Eltiste -- -- -- -- -- --
</TABLE>

(1) Mr. Karam's options, granted on February 14, 1994, were granted under
Tristar's 1991 Stock Option Plan and are exercisable at a rate of 33
1/3% on September 1, 1994, 1995 and 1996. None of these options were
exercisable in fiscal 1994.

OPTION EXERCISES IN 1994 FISCAL YEAR AND YEAR-END OPTION VALUE

The following table provides information concerning option exercises in
the fiscal year 1994 by the named executive officers and the value of such
officer's exercised options at August 31, 1994.

<TABLE>
<CAPTION>
Number of Unexercised Value of Unexercised
Shares Options at In-the-Money Options
Acquired Fiscal Year End (#) at Fiscal Year End($)(1)
on Value ------------------------------- ---------------------------
Name Exercise (#) Realized ($) Exercisable Unexercisable Exercisable Unexercisable
- ---- ------------ ------------ ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Viren S. Sheth -- -- -- -- -- --
Eugene H. Karam -- -- 80,000 99,420 $116,250 -0-
Loren M. Eltiste -- -- 22,070 44,136 -0- -0-
</TABLE>

- ------------------------
(1) The "value" of any option set forth in the table above is determined by
subtracting the amount which must be paid upon exercise of the options
from the market value of the underlying Common Stock as of August 31,
1994 (based on the closing sales price as reported by the Nasdaq Stock
Market).

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<PAGE> 78
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION

The Executive Committee of Tristar performs, among other functions, the
functions normally performed by a compensation committee. During fiscal 1994,
the following persons served on the Executive Committee: Richard P. Rifenburgh,
Robert R. Sparacino and Viren S. Sheth. Viren S. Sheth also served as the Chief
Executive Officer and President of Tristar during fiscal 1994.

The Core Sheth Families are the beneficial owners of 60.5% of Tristar's
Common Stock (71% assuming the exercise of all outstanding warrants),
principally through their ownership and control of Starion B.V.I. Viren S. Sheth
is a brother of Shashikant S. Sheth, a director of Tristar, and, although not a
member of the Core Sheth Families, is related by blood to certain members of the
Core Sheth Families. Viren S. Sheth also serves as the President, Chief
Executive Officer and a director of Eurostar, an entity which is owned and
controlled by the Core Sheth Families and which supplied virtually all of
Tristar's requirements for fragrance products in fiscal 1994.

COMPENSATION COMMITTEE REPORT

In accordance with the executive compensation rules established by the
Commission, the following report regarding executive compensation is provided at
the direction of the Tristar Board.

During fiscal 1994, Tristar had no formal compensation policies with
respect to executive officers.

Prior to December 1992, compensation was determined by a special
committee (the "Special Committee") of the Tristar Board composed of Messrs.
Rifenburgh and Sparacino. Subsequent to that date, the Executive Committee
assumed those functions. Because there were no formal compensation policies in
place, the compensation of newly-hired executive officers was determined based
generally on the qualifications and prior experience of the executive officers.
The following paragraphs set forth the basis of the compensation paid in fiscal
1994 to Viren S. Sheth, Eugene H. Karam and Loren M. Eltiste.

On December 3, 1992, the Tristar Board elected Viren S. Sheth as
President and Chief Executive Officer. At that time, the Executive Committee
established Mr. Sheth's salary at $150,000 per annum in recognition of the same
position, with comparable compensation, Mr. Sheth held with Tristar's major
supplier, Eurostar. Mr. Sheth's salary continued to be $150,000 per annum during
fiscal 1994.

The compensation package of Eugene H. Karam, Chief Operating Officer,
was initially established effective as of September 1, 1993 as part of a
three-year employment agreement pursuant to which Mr. Karam received an initial
base salary of $150,000 per annum and an annual bonus opportunity up to 25
percent of his base salary. Mr. Karam's base salary was $150,000 per annum for
fiscal 1994. Pursuant to the agreement, on February 14, 1994, Mr. Karam also
received an option to purchase 99,420 shares of Tristar's Common Stock which
vests over a three-year period. The Executive Committee set Mr. Karam's
compensation package based on the key role he held within Tristar and in view of
competitive compensation packages offered to his peer group in the industry. The
stock option was granted to provide a long-term incentive to Mr. Karam.

The compensation package of Loren M. Eltiste, Chief Financial Officer,
was initially established on October 6, 1992 as part of a three-year employment
agreement pursuant to which Mr. Eltiste received an initial base salary of
$125,000 per annum and an annual bonus opportunity up to 25 percent of his base
salary. In October 1993, Mr. Eltiste's base salary was increased to $131,250 per
annum. On October 6, 1992, Mr. Eltiste also received an option to purchase
66,206 shares of Tristar's Common Stock which vests over a three-year period.
The Executive Committee set Mr. Eltiste's compensation package based on his
experience as a financial executive and in view of competitive compensation
packages offered to his peer group in the industry. The stock option was granted
to provide a long-term incentive to Mr. Eltiste.

EXECUTIVE COMMITTEE
Richard P. Rifenburgh
Robert R. Sparacino
Viren S. Sheth

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<PAGE> 79
COMPENSATION OF DIRECTORS

Tristar provides reimbursement for travel and other expenses incurred
by all directors in connection with their service as directors of Tristar.
Tristar also provides compensation to its three non-employee directors, Robert
R. Sparacino, Richard P. Rifenburgh and Daniel R. Carter, for their services as
directors and members of various committees of the Tristar Board.

Dr. Sparacino and Mr. Rifenburgh each receive $2,500 per day per
Tristar Board or committee meeting attended. In addition, for the first three
quarters of fiscal 1994, Dr. Sparacino and Mr. Rifenburgh were each paid $325
per hour for their services in capacities outside of such meetings, subject to a
maximum total compensation (including compensation for attendance at meetings)
of $2,500 per day. Effective June 1, 1994, Dr. Sparacino's and Mr. Rifenburgh's
hourly billing for services was discontinued and a quarterly fee of $10,000 was
established to reimburse Dr. Sparacino and Mr. Rifenburgh for services outside
of Tristar Board and Committee meetings. During fiscal 1994, Mr. Rifenburgh and
Dr. Sparacino (through his company, Sparacino Associates, Inc.) earned $75,519
and $71,482, respectively, in connection with their service as directors and
members of committees of the Tristar Board.

Daniel R. Carter received $22,500 during fiscal 1994 for his service as
a director. This compensation was based on an understanding between Tristar and
Mr. Carter that he should be compensated with respect to his attendance at
Tristar Board meetings at the rate of $2,500 per day per meeting.

EMPLOYMENT CONTRACTS

EUGENE H. KARAM. Mr. Karam has an employment agreement with Tristar
dated January 14, 1994, which provides, among other things, that Mr. Karam's
employment is terminable only for cause through August 31, 1996. Under the
agreement, Mr. Karam receives an annual salary of $150,000 plus a discretionary
bonus. The agreement also requires Tristar to maintain a $250,000 life insurance
policy on Mr. Karam, payable to the beneficiary of his choice, to furnish
long-term disability insurance coverage for Mr. Karam and to provide Mr. Karam
with a monthly car allowance. Pursuant to the agreement, Mr. Karam also received
an option to purchase 99,420 shares of Common Stock at $5.375 per share, which
option vests over a three-year period.

LOREN M. ELTISTE. Mr. Eltiste has an employment agreement with Tristar
dated October 6, 1992, which provides, among other things, that Mr. Eltiste's
employment is terminable only for cause through August 31, 1995. Under the
agreement, Mr. Eltiste receives an annual salary of $125,000 plus a
discretionary bonus. Mr. Eltiste's annual salary was increased in October 1993
to $131,250. The agreement also requires Tristar to maintain a $250,000 life
insurance policy on Mr. Eltiste, payable to the beneficiary of his choice, and
to provide him with a monthly car allowance. Pursuant to the agreement, Mr.
Eltiste also received an option to purchase 66,206 shares of Common Stock at
$6.875 per share, which option vests over a three-year period.

Other than as set forth above, there are no compensatory plans or
arrangements with respect to any individual named in the Summary Compensation
Table above or otherwise which would result from the resignation, retirement or
any other termination of such individual's employment with Tristar or a change
in the individual's responsibilities following a change in control.

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<PAGE> 80
PERFORMANCE GRAPH

Tristar has utilized the Center for Research in Security Prices
("CRSP") Total Return Index for The Nasdaq Stock Market. The following
performance graph compares the performance of Tristar's Common Stock to CRSP
Total Return Index for The Nasdaq Stock Market and to a Cosmetics/Sundries Index
(for the five year period from August 31, 1989 through August 31, 1994). The
Cosmetics/Sundries Index is comprised of all NASDAQ-listed companies having the
three digit standard industry classification code 284, which relates to
perfumes, cosmetics and toilet preparation products. A list of all the companies
comprising the Cosmetics/Sundries Index is available upon written request to
Tristar at 12500 San Pedro Avenue, Suite 500, San Antonio, Texas 78216,
Attention: Corporate Secretary, or upon the oral request directed to the
Corporate Secretary at (210) 402-2200. The graph assumes that the value of the
investment in Tristar's Common Stock and each Index was 100 at August 31, 1989
and that all dividends were reinvested.

COMPARISON OF FIVE-YEAR CUMULATIVE TOTAL RETURN
AMONG THE COMPANY INDEX, NASDAQ INDEX,
AND COSMETIC/SUNDRIES INDEX

[PERFORMANCE GRAPH]

<TABLE>
<CAPTION>
=========================================================================================================
Year (Aug. start date) 1989 1990 1991 1992 1993 1994
=========================================================================================================
<S> <C> <C> <C> <C> <C> <C>
Company Index 100.0 116.0 568.0 440.0 352.0 252.0
NASDAQ Index 100.0 83.0 117.7 127.6 168.3 174.2
Cosmetics/Sundries Index 100.0 101.3 162.1 146.2 138.4 156.8
=========================================================================================================
</TABLE>

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<PAGE> 81
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

The following table sets forth information, as of July 12, 1995,
regarding the beneficial ownership (as defined by Rule 13d-3 of the Securities
Exchange Act of 1934) of Tristar's Common Stock by (i) each person who is known
by Tristar to own beneficially more than 5% of the outstanding shares of Common
Stock, (ii) each director and nominee for director of Tristar, (iii) by each of
the executive officers named in the Summary Compensation Table, and (iv) by all
directors and executive officers of Tristar as a group. Unless otherwise noted,
each director has sole voting power and sole investment power with respect to
his shares owned.

<TABLE>
<CAPTION>
AMOUNT AND NATURE OF
NAME AND ADDRESS OF BENEFICIAL PERCENT OF
BENEFICIAL OWNER OWNERSHIP CLASS
- ------------------- -------------------- ----------
<S> <C> <C>
Core Sheth Families(1) 6,420,174 71.0%
Post Office Box 5551
Dubai, United Arab Emirates

Starion International Limited(2) 6,313,174 69.8%
Woodbourne Hall, P. O. Box 3162
Road Town, Tortola
British Virgin Islands

Shashikant S. Sheth(3) 6,420,174 71.0%
Post Office Box 5551
Dubai, United Arab Emirates

Viren S. Sheth(4) -0- -0-
12001 Network, Bldg. E, Suite 110
San Antonio, TX 78249-3355

Daniel R. Carter -0- -0-
628 Kendale Lane
Thousand Oaks, CA 91360

Richard P. Rifenburgh -0- -0-
133 N. Pompano Beach Blvd.
Pompano Beach, FL 33062

Robert R. Sparacino -0- -0-
Sparacino Associates, Inc.
175 Blackberry Drive
Stamford, CT 06903

Eugene H. Karam(5) 209,780 3.1%
12500 San Pedro Ave., Suite 500
San Antonio, TX 78216

Loren M. Eltiste(6) 44,138 0.7%
12500 San Pedro Ave., Suite 500
San Antonio, TX 78216

All directors and executive officers as a 6,674,092 72.2%
group (7 persons)(7)
</TABLE>

- ---------------------------------------

Footnotes on next page

73
<PAGE> 82
The information set forth in the footnotes (1), (2) and (3) below is based on
written representations to Tristar by Mr. Shashikant S. Sheth and on the Core
Sheth Schedule 13D and amendments thereto.

(1) Shashikant S. Sheth, Jamnadas Sheth, Kirit Sheth and Mahendra Sheth
comprise the Core Sheth Families. The Core Sheth Families own and
control Starion B.V.I. The 6,420,174 shares includes 6,313,174 shares
beneficially owned by Starion B.V.I. (which includes 2,400,000 shares
issuable upon the exercise of currently exercisable common stock
warrants held by Starion B.V.I.) and 107,000 shares otherwise owned or
controlled by the Core Sheth Families. The members of the Core Sheth
Families share voting and investment power with respect to all of these
shares.

(2) The 6,313,174 shares includes 2,400,000 shares issuable upon the
exercise of currently exercisable common stock warrants held by Starion
B.V.I. Starion B.V.I. shares voting and investment power with the
members of the Core Sheth Families with respect to all of these shares.

(3) Shashikant S. Sheth, a director of Tristar, owns no shares in his
individual capacity. He is a director of Starion B.V.I. and he is a
member of the Core Sheth Families, which control Starion B.V.I. The
6,420,174 shares includes 6,313,174 shares beneficially owned by
Starion B.V.I. (which includes 2,400,000 shares issuable upon the
exercise of currently exercisable common stock warrants held by Starion
B.V.I.) and 107,000 shares otherwise owned or controlled by the Core
Sheth Families. Shashikant S. Sheth and the other members of the Core
Sheth Families share voting and investment power with respect to all of
these shares.

(4) Viren S. Sheth, a director of Tristar and its President and Chief
Executive Officer, is the brother of Shashikant S. Sheth and, although
not a member of the Core Sheth Families, is related by blood to certain
members of the Core Sheth Families. Viren S. Sheth disclaims beneficial
ownership of shares beneficially owned by the Core Sheth Families.

(5) The 209,780 shares includes 146,280 shares which Mr. Karam has the
right to acquire pursuant to stock options issued pursuant to Tristar's
stock option plan.

(6) The 44,138 shares consists of shares which Mr. Eltiste has the right to
acquire pursuant to stock options issued pursuant to Tristar's stock
option plan.

(7) Includes 6,420,174 shares beneficially owned by the Core Sheth
Families, of which Shashikant S. Sheth is a member, 209,780 shares
beneficially owned by Mr. Karam and 44,138 shares beneficially owned by
Mr. Eltiste.

CERTAIN TRANSACTIONS

CORE SHETH FAMILIES

During fiscal 1994, a majority of Tristar's outstanding stock
(approximately 60.5%) continued to be controlled by the Core Sheth Families,
principally through their ownership and control of Starion B.V.I.

TRANSACTIONS WITH EUROSTAR AND OTHER AFFILIATES

During fiscal 1994, the Core Sheth Families also owned and controlled
Eurostar and Emicos, two major suppliers of fragrance products and cosmetics to
Tristar. During fiscal 1994, fragrance products supplied by Eurostar represented
approximately 79% of Tristar's net sales, and cosmetics supplied by Emicos
accounted for approximately 12% of Tristar's net sales. For fiscal 1994,
purchases from Eurostar and Emicos amounted to $27,282,000 and $4,254,000,
respectively. At August 31, 1994, Tristar owed outstanding payables to Eurostar
and Emicos in the amounts of $1,162,000 and $726,000, respectively.

In October 1992, Tristar entered into the three-year Distribution
Agreement with Eurostar and S&J Perfume, also an entity owned and controlled by
the Core Sheth Families, for the purchase of

74
<PAGE> 83
fragrance products. Under the terms of the agreement, during fiscal 1994,
Eurostar supplied virtually all of Tristar's requirements for fragrance products
for exclusive distribution by Tristar in the United States, Mexico, Canada and
Puerto Rico. This agreement was amended in August 1993 such that Tristar is
assured of a supply of fragrance products from Eurostar through August 1999. No
purchases have been made by Tristar from S&J Perfume since fiscal 1993.

During fiscal 1994, Tristar sold cosmetic pencils to Emicos in the
amount of $343,000. At August 31, 1994, Tristar had a receivable outstanding
from Emicos of $126,000.

Eurostar purchases various products from Tristar for resale to
Eurostar's customers in Central and South America. These purchases were $114,000
in fiscal 1994. At August 31, 1994, Tristar had a receivable outstanding from
Eurostar of $248,000.

DIRECTOR FEES

For fiscal 1994, Tristar incurred approximately $173,000 in fees to
Robert R. Sparacino, Richard P. Rifenburgh and Daniel Carter, directors of
Tristar. These fees were paid directly to the directors, with the exception of
$71,482 which was paid to Mr. Sparacino through his company, Sparacino
Associates, Inc. These fees relate to participation in meetings of the Tristar
Board and committees thereof and events associated with the investigation
performed by the Special Committee of the Tristar Board, formed in October 1992
to conduct a review of matters associated with the previously disclosed
stockholder class action litigation, investigation by the Securities and
Exchange Commission and investigation of the United States Attorney for the
District of South Carolina. At August 31, 1994, $12,000 of these fees had not
yet been paid.

FINANCING OF SETTLEMENT AGREEMENT

On December 17, 1993, Tristar announced court approval of a settlement
agreement, on behalf of Tristar and certain other parties, of the previously
disclosed stockholder class action litigation for a cash payment of $9.5
million. To finance the settlement agreement, the Core Sheth Families loaned
Tristar $9 million and purchased and extended common stock warrants for a price
of $500,000. The last portion of the settlement amount was paid by Tristar on
December 16, 1994.

The loans from the Core Sheth Families mature in ten years, with
interest payable annually and principal payable 20% at the end of year eight,
20% at the end of year nine and the remaining 60% at the end of year ten, with
the exception of $1 million which was paid in December 1994 with a court
approved distribution of the proceeds of an executive liability and
indemnification policy owned by Tristar. These loans bear interest at the
Long-Term Federal Rate and are subordinated to indebtedness of Tristar owed to
its commercial bank lenders.

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<PAGE> 84
The common stock warrants were purchased by the Core Sheth Families on
December 14, 1994, pursuant to an agreement entered into in connection with the
settlement agreement. The warrants grant the Core Sheth Families the right to
purchase up to 2,000,000 shares of Tristar's common stock within ten years of
the date of issuance. The initial per share price of the common stock under the
warrants is $5.34 and it increases by 10% per year beginning December 15, 2001.
The exercise price of these warrants may be reduced pursuant to the terms of the
Merger Agreement. See "The Merger -- Description of the Merger -- Repricing of
Certain Warrants".

In connection with the settlement agreement, Tristar also extended
until August 31, 2003, the exercise date of previously issued common stock
warrants held by Starion B.V.I., an entity controlled by the Core Sheth
Families, to purchase 400,000 shares of Tristar common stock at an exercise
price of $2.75 per share. These warrants would have expired on May 31, 1995
absent an extension.

MARKET PRICES OF TRISTAR COMMON STOCK; DIVIDENDS

MARKET INFORMATION

Tristar has a single class of equity securities outstanding, its Common
Stock, $.01 par value. The Tristar Common Stock is traded over-the-counter on
the NASDAQ/NMS under the symbol "TSAR". The following table presents for the
periods indicated the quarterly high and low bid quotations in the
over-the-counter market, as quoted by NASDAQ. These quotations reflect the
inter-dealer prices, without retail mark-up, mark-down or commission and may not
necessarily represent actual transactions.

<TABLE>
<CAPTION>
High Low
---- ---
<S> <C> <C>
1993
First Quarter $13 $4 3/8
Second Quarter $13 $4 7/8
Third Quarter $8 1/8 $4 7/8
Fourth Quarter $7 5/8 $3 5/8

1994
First Quarter $7 7/8 $4 1/8
Second Quarter $7 7/8 $5 3/8
Third Quarter $6 1/4 $3 7/8
Fourth Quarter $4 1/8 $3 7/8

1995
First Quarter $5 7/8 $3 7/8
Second Quarter $5 5/8 $5 1/8
Third Quarter $6 $5
Fourth Quarter (through July 28) $5 5/16 $5
</TABLE>

On May 30, 1995, the last trading day prior to the announcement by
Tristar and Eurostar that they had reached an agreement concerning the Merger,
the closing price for the Tristar Common Stock, as reported by NASDAQ/NMS, was
$5.25. On July 28, 1995, the closing price for the Tristar Common Stock, as
reported by NASDAQ/NMS, was $5.3125. There is not and never has been any trading
market for Eurostar Common Stock.

Tristar has been notified by The Nasdaq Stock Market, Inc. that it may
no longer satisfy the requirements for continued listing on NASDAQ due to a
deficiency in its net tangible assets. Tristar has requested a waiver of such
requirement on the basis that Tristar will satisfy the net tangible asset
requirement if the Merger is consummated. Tristar anticipates that such waiver
will be granted and that Tristar will continue to be listed on the NASDAQ
following the Merger under the symbol "TSAR". If the Merger is not consummated,
Tristar will again request a waiver of the net tangible asset requirement from
The Nasdaq Stock Market, Inc., but there is no assurance that a waiver will be
granted.

HOLDERS

As of July 12, 1995, the approximate number of holders of record of
Tristar's Common Stock, as reported by Tristar's transfer agent, was 223.

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<PAGE> 85
DIVIDENDS

Tristar has paid no cash dividends on the Tristar Common Stock since
its inception. The payment by Tristar of cash dividends, if any, in the future
rests within the discretion of the Tristar Board and will depend, among other
things, upon Tristar's earnings, its capital requirements and its financial
condition, as well as other relevant factors. In addition, Tristar's ability to
pay cash dividends is subject to restrictions imposed by Tristar's principal
lender in connection with the $10,000,000 revolving credit line. See Note 4 of
Tristar's Notes to Consolidated Financial Statements. By reason of Tristar's
present financial status and its contemplated financial requirements, Tristar
has no plans to pay any cash dividends on the Tristar Common Stock in the
foreseeable future.

Other than the requirements of the Delaware Law that dividends be paid
out of capital surplus only and that the declaration and payment of a dividend
not render Tristar insolvent, and the limitations imposed by Tristar's principal
commercial lender referred to above, there are no restrictions on Tristar's
present or future ability to pay dividends.

DESCRIPTION OF TRISTAR CAPITAL STOCK

Tristar is authorized to issue 10,000,000 shares of Common Stock, $.01
par value, and 1,000,000 shares of Preferred Stock, $.05 par value. As of July
12, 1995, there were 6,651,873 shares of Tristar Common Stock outstanding. The
following brief description of the capital stock of Tristar is qualified in its
entirety by reference to Tristar's Certificate of Incorporation, as amended,
copies of which are on file with the Commission.

COMMON STOCK

Holders of Tristar Common Stock are entitled to one vote per share on
all matters to be voted upon by the stockholders generally, including the
election of directors. Subject to the rights of holders of Preferred Stock, the
holders of Tristar Common Stock are entitled to receive such dividends as may be
declared from time to time by the Tristar Board out of funds legally available
therefor, and in the event of liquidation, dissolution or winding up of Tristar,
to share ratably in all assets remaining after payment of liabilities. The
holders of Tristar Common Stock have no preemptive or conversion rights and are
not subject to further calls or assessments by Tristar.

The Transfer Agent and Registrar for Tristar Common Stock is The Trust
Company of New Jersey, Jersey City, New Jersey.

PREFERRED STOCK

The Tristar Board has authority to issue the Preferred Stock from time
to time without stockholder approval, in one or more series. The Tristar Board
is authorized with respect to any series of Preferred Stock to fix the
designation, the number of shares, the voting powers, the conditions of the
conversion privilege, if any, the terms and conditions of the redemption rights,
if any, the rights upon liquidation, merger, consolidation, distribution or sale
of assets, and dissolution or winding-up, the dividend rate and whether
dividends shall be cumulative, and any other powers, preferences and relative,
participating, optional and other rights and the qualifications, limitations and
restrictions of such series. No shares of Preferred Stock are currently
outstanding.

WARRANTS

At July 12, 1995, Tristar had outstanding warrants to purchase an
aggregate of 2,000,000 shares of Tristar Common Stock at an exercise price of
$5.34 per share and warrants to purchase an aggregate of 400,000 shares of
Tristar Common Stock at an exercise price of $2.75 per share. The exercise price
of the 2,000,000 warrants held by an affiliate of the Core Sheth Families may be
reduced in connection with the Merger. See "The Merger -- Description of the
Merger -- Repricing of Certain Warrants".

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<PAGE> 86
DELAWARE ANTI-TAKEOVER LAW

Under Section 203 of the Delaware Law (the "Delaware anti-takeover
law"), certain "business combinations" between a Delaware corporation, whose
stock generally is publicly traded or held of record by more than 2,000
stockholders, and an "interested stockholder" are prohibited for a three-year
period following the date that such stockholder became an interested
stockholder, unless (i) the corporation has elected in its certificate of
incorporation or bylaws not to be governed by the Delaware anti-takeover law
(Tristar has not made such an election), (ii) the business combination was
approved by the board of directors of the corporation before the other party to
the business combination became an interested stockholder, (iii) upon
consummation of the transaction that made it an interested stockholder, the
interested stockholder owned at least 85% of the voting stock of the corporation
outstanding at the commencement of the transaction (excluding voting stock owned
by directors who are also officers or held in employee stock plans in which the
employees do not have a right to determine confidentially whether to tender or
vote stock held by the plan), or (iv) the business combination was approved by
the board of directors of the corporation and ratified by 66 2/3% of the voting
stock which the interested stockholder did not own. The three-year prohibition
does not apply to certain business combinations proposed by an interested
stockholder following the announcement or notification of certain extraordinary
transactions involving the corporation and a person who had not been an
interested stockholder during the previous three years or who became an
interested stockholder with the approval of a majority of the corporation's
directors. The term "business combination" is defined generally to include
mergers or consolidations between a Delaware corporation and an interested
stockholder, transactions with an interested stockholder involving the assets or
stock of the corporation or its majority-owned subsidiaries and transactions
which increase an interested stockholder's percentage ownership of stock. The
term "interested stockholder" is defined generally as a stockholder who becomes
beneficial owner of 15% or more of a Delaware corporation's voting stock.
Section 203 could have the effect of delaying, deferring or preventing a change
in control of Tristar.

LIMITATION OF LIABILITY AND INDEMNIFICATION MATTERS

Tristar's Certificate of Incorporation provides that directors of
Tristar shall not be personally liable to Tristar or its stockholders for
monetary damages for breach of fiduciary duty as a director, except for
liability (i) for any breach of the director's duty of loyalty to Tristar or its
stockholders, (ii) for acts or omissions not in good faith or which involve
intentional misconduct or a knowing violation of law, (iii) under Section 174 of
the Delaware Law, relating to prohibited dividends or distributions or the
repurchase or redemption of stock, or (iv) for any transaction from which the
director derives an improper personal benefit. The provisions, however, do not
apply to claims against a director for violations of certain laws, including
federal securities laws. If the Delaware Law is amended to authorize the further
elimination or limitation of directors' liability, then the liability of
directors of Tristar shall automatically be limited to the fullest extent
provided by the Delaware Law, as amended. Tristar's Certificate of Incorporation
and Bylaws also contain provisions to indemnify the directors, officers,
employees or other agents to the fullest extent permitted by the Delaware Law.
These provisions may have the practical effect in certain cases of eliminating
the ability of stockholders to collect monetary damages from directors. Tristar
believes that the provisions in its Certificate of Incorporation and Bylaws are
necessary to attract and retain qualified persons as directors and officers.

INFORMATION CONCERNING EUROSTAR

BUSINESS

GENERAL

Eurostar is a wholly-owned subsidiary of Transvit, a foreign company
owned by the Core Sheth Families. A Texas corporation with operations in San
Antonio and Pleasanton, Texas, it was incorporated on March 5, 1992 and
commenced operations in September of 1992. Eurostar is principally engaged in
the development, manufacture, and marketing of designer alternative and other
fragrances. Eurostar actively markets its products to distributors throughout
South and Central America. Eurostar markets

78
<PAGE> 87
its products in the United States, Mexico, Canada and Puerto Rico through
Tristar pursuant to the Distribution Agreement.

CUSTOMERS AND EXPORT SALES

Pursuant to the Distribution Agreement, Eurostar's primary customer for
its fragrance products in the United States, Mexico, Canada and Puerto Rico has
been Tristar. For the fiscal year ended September 30, 1994, total product sales
to Tristar were approximately $26,950,000 or 85% of Eurostar's total sales. In
addition, total export sales of Eurostar, primarily to South and Central
America, for the year ended September 30, 1994 were approximately $4,756,000.
Export sales for the year ended September 30, 1993 were not significant. Sales
of Eurostar's products in South and Central America have increased from 34% of
total sales for the six months ended March 31, 1995 from 7% for the six months
ended March 31, 1994. While there can be no assurances that such sales increases
will continue in the future, Eurostar currently intends to continue to
aggressively pursue opportunities in this region. Outside of Tristar's marketing
region, Eurostar's customers are primarily distributors. Apart from Tristar,
Eurostar is not dependent upon a single or a few customers, and the loss of any
single or a few customers would not have a material adverse effect on Eurostar's
business.

Eurostar currently has no manufacturing facilities or marketing
operations outside the Western Hemisphere, and it has no plans to pursue such
activities. However, occasionally, there are sales to affiliates and third
parties outside the Western Hemisphere, which sales are not now material. Other
affiliates have manufacturing facilities and marketing operations for fragrance
and other products outside the Western Hemisphere.

SUPPLIERS

At present, Eurostar purchases a significant amount of glass products
for its fragrance and other products from a European glass manufacturer. In the
event this supply is interrupted, Eurostar believes it could procure replacement
glass products without a material interruption of its business.

In addition, Eurostar purchases its fragrance supplies principally from
two companies, one of which is an affiliate. In the event Eurostar is unable to
purchase these products from one of these suppliers, Eurostar believes that it
could purchase such products from the other supplier without any significant
delays. In the event that Eurostar is unable to purchase these supplies from
either of its current suppliers, Eurostar could suffer manufacturing delays in
producing its products until a new supplier is found.

PRODUCTS

Eurostar's principal product category is fragrance products. Eurostar
conducts all market testing and develops all new and replacement products for
introduction into the marketplace. The success of these products is dependent on
Eurostar's identifying the best market niche and then, ultimately, on the
customers' acceptance of the product. Life cycles of products vary
significantly, with some products successfully marketed for more than five
years, whereas other products may fail to gain consumer acceptance and be
discontinued within a short period of time. In addition, success of new and
replacement products is impacted by the markets in the countries for which such
products are intended. Eurostar must accurately gauge local acceptance for its
products.

Fragrances. As noted above, within the fragrance product category, and
in fiscal 1994 as in fiscal 1993, Eurostar produced four different product
lines: "Euro Collections", "Club Exclusif Fragrances", "Roxy Fragrances" and
"Premiere Fragrances". All lines are produced with a wide variety of
premium-look bottle shapes and packages containing fragrances which provide an
alternative to some of the most popular nationally-branded designer fragrances
at a fraction of the retail price.

Cosmetic Pencils. As of May, 1995, Eurostar began production of
cosmetic pencils. Besides sales in Eurostar's South and Central American
markets, it will sell pencils to Tristar for its marketing area and to certain
affiliates.

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<PAGE> 88
Other Products. In addition to the fragrance lines and cosmetic
pencils, Eurostar produces or purchases from affiliates companion products to
its Euro Collection lines such as eau de parfum sprays, body sprays and gift
sets.

New Products. As noted previously, Eurostar designs and develops new
products for any or all of its customers.

Patents and Trademarks. Eurostar or its affiliates own substantially
all of the product-named trademarks for the products produced and sold by
Eurostar or Tristar.

Backlog of Orders. Eurostar had no substantial backlog of orders at
the end of fiscal year 1994 and 1993.

Raw Materials. Eurostar has substantial raw material purchase
requirements, and its inventories consist largely of such raw materials. See
"Suppliers".

Environmental Laws. Compliance by Eurostar with Federal, State and
local laws relating to the protection of the environment has no material effect
upon Eurostar's capital expenditures, earnings or competitive condition.

Competition in the Fragrance and Cosmetic Industries. The fragrance and
cosmetics industry is characterized by intense competition. While pricing and
terms are the principal methods of competition, product quality and customer
service (incorporating prompt delivery through the maintenance of sufficient
inventory) are ancillary competitive considerations in the overall cosmetics
industry.

Principal competitors in designer alterative fragrances include Jean
Philippe Fragrances, Inc., Paris Designs, Inc. and Parfums de Ceour. Eurostar
believes it is one of the largest producers of designer alternative fragrances
in the United States.

When viewing the fragrance and cosmetics industry as a whole, Eurostar
is relatively small and, consequently, is not a significant factor in the
industry. Many of the other companies in the industry, including virtually all
large product manufacturers such as Revlon and Proctor and Gamble, are well
established and have been in existence for a significantly longer period of time
than Eurostar. Each of such companies has product inventory, financial,
marketing, research and other personnel, as well as other resources,
substantially greater than Eurostar, and has more extensive facilities than
those which are now or in the foreseeable future will become available to
Eurostar. Historically, however, these large manufacturers have not sought to
compete in the same budget-oriented markets which Eurostar targets.

Companies with resources greater than those of Eurostar may enter such
areas of business in the future. Eurostar may not be able to compete
successfully with such companies because of its limited competitive position,
limited capital, limited staff and facilities. Accordingly, Eurostar's
competitive position may continue to be limited, within the overall cosmetic,
fragrance, and bath and body product industry.

Seasonality. Eurostar's business has historically been subject to
seasonal factors relating to calendar-year-end holidays, which has resulted in
increased net sales in the first and fourth quarters of Eurostar's fiscal year.
Management expects this characteristic to continue.

Employees. As of May 31, 1995, Eurostar employed 265 people as compared
to 246 at the same time in fiscal 1994. None of Eurostar's employees are covered
by a collective bargaining agreement, and management believes that Eurostar's
relationship with its employees is satisfactory.

Properties. Eurostar owns a manufacturing plant at 1 Eurostar Drive,
Pleasanton, Texas, consisting of a 132,000-square-foot facility on a 14-acre
site. Eurostar's principal corporate offices are located at this facility. In
addition, Eurostar leases offices in San Antonio, Texas (12001 Network Drive,
Suite 110, consisting of 7,975 square feet) as well as sales offices in Costa
Rica, Colombia and Brazil.

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<PAGE> 89
Legal Proceedings. John Genung ("Genung"), formerly in-house legal
counsel for Eurostar, was terminated by Eurostar approximately 45 days after his
employment commenced and within the probationary period of his employment
arrangement. Genung has filed suit against Eurostar making certain allegations,
including breach of contract, violations of various state and federal laws,
retaliatory termination and misrepresentations. This case is in the early stage
of discovery. Eurostar denies each and every allegation and believes that all of
the claims are without merit and intends to vigorously defend such case. In
addition, Eurostar has filed counterclaims against Genung for actions that he
took during the course of his limited employment with Eurostar. Eurostar is also
a defendant in various lawsuits and proceedings arising out of the conduct of
its business. The amounts sought by plaintiffs in such cases can be substantial
and, if such cases were decided adversely to Eurostar, its aggregate liability
might be material. However, Eurostar does not expect such an aggregate result
based on an assessment that such actions will be successfully defended or
settled or concluded for amounts not material to Eurostar.

MANAGEMENT OF EUROSTAR

The Board of Directors currently consists of two members, Viren Sheth
and Aaron Zutler. The Bylaws of Eurostar provide for the indemnification of the
directors and employees of Eurostar to the extent permitted by the Texas
Business Corporation Act.

Directors and Executive Officers. The persons serving as directors and
officers of Eurostar, their ages and the positions they hold in Eurostar are as
follows:

<TABLE>
<CAPTION>
Name Age Position and Office
- ---- --- -------------------
<S> <C> <C>
Viren S. Sheth 46 President, Chief Executive Officer and Director

Aaron Zutler 60 Director

Paul R. Kimmel 47 Chief Financial Officer, Vice
President, Treasurer and
Secretary

John N. Sarantakis 48 Vice President and General Manager
</TABLE>

VIREN S. SHETH has been a director and President of Eurostar since
inception. Since December 3, 1992, Mr. Sheth has served as President and a
director of Tristar. From 1983 to August 1992, Mr. Sheth was a director of S&J
Perfume (now Starion U.K.), a supplier of fragrance products based in the United
Kingdom which sold principally to distributors in the Middle East and to
Tristar. S&J Perfume is also an entity owned and controlled by the Core Sheth
Families. For a discussion of the relationships among Viren S. Sheth, Shashikant
S. Sheth and entities controlled by the Core Sheth Families, see "Certain
Transactions".

AARON ZUTLER was elected to the Board of Directors in June 1995. Mr.
Zutler is President and founder of Marketing Congress Inc., an international
marketing, consulting and development firm. He is also Chairman of MCI
Advertising and on the Board of Directors of Saint George Crystal Ltd. and Royal
Monarch China Company.

PAUL R. KIMMEL has been Chief Financial Officer, Vice President,
Treasurer and Secretary of Eurostar since August of 1994. From 1989 to 1994, Mr.
Kimmel was associated with Reckitt & Colman Inc., a major subsidiary of a large
U. K.-based household products and food packaged goods company. He served as its
Director, Accounting Development and as Controller for Airwick Industries, its
division specializing in household products.

JOHN N. SARANTAKIS has been Vice President and General Manager of the
Company since 1992. From 1989 to 1991, Mr. Sarantakis was the Executive Director
of Operations for Tiro Industries, a contract manufacturer of personal care
products.

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<PAGE> 90

EUROSTAR PERFUMES, INC.
SELECTED FINANCIAL DATA
(IN THOUSANDS EXCEPT PER SHARE DATA)

The following selected financial data of Eurostar has been derived from its
historical consolidated financial statements and should be read in conjunction
with such financial statements and notes thereto included herein. The selected
financial data of Eurostar as of March 31, 1995 and September 30, 1992 and for
the nine month periods ended March 31, 1995 and 1994 and the period from March
5, 1992 (date of inception) through September 30, 1992 has been derived from the
unaudited financial statements of Eurostar.

<TABLE>
<CAPTION>
NINE MONTHS ENDED
-------------------------
YEARS ENDED SEPTEMBER 30, MARCH 31, MARCH 31,
------------------------- MARCH 5, 1992 THROUGH --------- ---------
1994 1993 SEPTEMBER 30, 1992 1995 1994
-------- ---------- --------------------- --------- ---------
(UNAUDITED) (UNAUDITED)
<S> <C> <C> <C> <C> <C>
Historical statement of income
data:
Net sales $ 31,481 $ 28,145 $ 216 $ 25,708 $ 24,605
Net income (loss) 3,162 3,839 (499) 1,533 3,346
Net income (loss) per common
share 3.16 3.83 (.49) 1.53 3.34

Historical balance sheet data:
Total assets $ 19,636 $ 19,914 $ 8,071 $ 17,745
Short-term borrowings 0 0 0 0
Long-term debt 4,166 6,469 5,909 5,016
Cash dividends declared per
common share 0 0 0 0

</TABLE>

The Company was incorporated on March 5, 1992. Fiscal 1992 statement of income
data is for the period from March 5, 1992 through September 30, 1992.

<PAGE> 91
EUROSTAR MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS

EUROSTAR PERFUMES, INC. HISTORICAL

The following is management's discussion and analysis of the financial
condition and results of operations for the two years ended September 30, 1994
and the six months ended March 31, 1995 and 1994. This discussion should be
read in connection with the Consolidated Financial Statements of Eurostar and
the notes thereto which are presented elsewhere in this Proxy Statement.

RESULTS OF OPERATIONS FOR THE SIX-MONTH PERIOD ENDED MARCH 31, 1995 COMPARED TO
THE SIX-MONTH PERIOD ENDED MARCH 31, 1994

Net sales through the second quarter of fiscal 1995 were $17,410,000,
an increase of 6.3% compared to net sales of $16,371,000 in the comparable
period of fiscal 1994. This increase in sales was due primarily due to
increased sales to South and Central America in the first and second quarter of
fiscal 1995 compared to the comparable period in fiscal 1994. This increase
was offset by a decrease in sales to Tristar, which it attributes to weak
economic conditions in Mexico coupled with the devaluation of the Mexican Peso
in the latter half of December 1994.

Of the net sales for the six months ended March 31, 1995,
approximately 66% ($11,537,000) resulted from the sale of products to Tristar,
as compared to approximately 94% ($15,364,000) for the comparable period in
fiscal 1994. The balance of the net sales in those periods were principally to
various distributors in most of the countries of South and Central America.

Eurostar's gross profit for the six months ended March 31, 1995, was
$5,271,000 or 30.3% of net sales compared to $6,973,000 or 42.6% of net sales
for the same period in fiscal 1994. The decrease in the gross profit
percentage when comparing the six months periods was principally due to prices
being held unchanged while direct product costs experienced increases above the
rate of inflation (partly from unfavorable foreign exchange rate changes on
purchased components) and indirect product costs were increased in anticipation
of volume growth that did not occur, as well as a product mix change away from
high margin fragrances.

Eurostar anticipates that gross profits, as a percentage of sales, for
the balance of the year will improve from those of the six months ended March
31, 1995 because of the higher sales volumes normally experienced in the second
half for the year-end holidays.

Eurostar's SG&A expenses increased for the six months ended March 31,
1995 by 22.5% to $3,370,000. As a percentage of net sales for the six month
period ended March 31, 1995, Eurostar's SG&A increased to 19.4% from 16.8% for
the same period in fiscal 1994. These increases in SG&A expenses as a
percentage of sales primarily reflect fully staffing departments which were
established the prior year, especially the staffing to support the South and
Central American sales effort. Management expects that for the remainder of
fiscal 1995, SG&A expenses will increase from those in the comparable period
for 1994 due primarily to the same reasons mentioned above.

Interest expense decreased in the first six months of fiscal 1995 to
$145,000, compared to $161,000 for the comparable period of fiscal 1994,
primarily as a result of lower borrowings under its credit facility.

Eurostar had net income for the six months ended March 31, 1995 of
$1,119,000, or $1.11 per share compared to net income of $2,433,000 or $2.43
per share for the same period in fiscal 1994.

Potential Adverse Effects on Results of Operations for Future Periods

Each or all of the following factors could have an adverse effect on
anticipated results for the balance of fiscal 1995.

<PAGE> 92

1. The Mexican Market. In late December 1994, the Mexican
government devalued the Mexican Nuevo Peso by allowing the Peso to float freely
against the U.S. dollar. This devaluation has resulted in a general increase
of 80% or more in the cost of imported products to the Mexican consumer. The
increase and the resultant instability, including significant business failures
and resultant unemployment, has caused a sharp decline in purchases of
Eurostar's products by the Mexican consumer. It is not known if and when the
Nuevo Peso will stabilize at a level where somewhat normal purchasing will
resume. Prior to the above-mentioned economic and political instability, sales
by Tristar into Mexico accounted for a significant portion of Eurostar's total
sales.

Eurostar has been unable to determine the effect, if any, that the
implementation of NAFTA has had or will have on Eurostar's business.

2. The Economy. Weak economic conditions in Mexico combined with
the devaluation of the Mexican currency, noted above, will continue to
adversely impact sales.

3 The Distribution Channels. Tristar, Eurostar's distributor in
the United States, Mexico, Canada and Puerto Rico, is making extensive efforts
to market products into the chain/mass merchandiser marketplace. Tristar
remains dependent on its original markets, the wholesale and independent retail
distribution channels. The maturation of these original markets, combined with
the continued economic conditions and competitive pressures, have resulted in a
slowing of the general growth of the market. These factors are expected by
Eurostar management to have some effect on the remainder of fiscal 1995.

4. New Markets. Eurostar has only recently begun sales and
marketing operations in South and Central America. At the initial stages of
developing a new market, Eurostar must incur significant expenses in order to
establish a marketing presence and an economically viable amount of sales.
There is no assurance that Eurostar will be successful in these new markets or
that it will recover its initial expenses and start up costs.

RESULTS OF OPERATIONS FOR THE YEARS ENDED SEPTEMBER 30, 1994, 1993 AND FOR THE
PERIOD FROM MARCH 5, 1992 THROUGH SEPTEMBER 30, 1992

RESULTS OF OPERATIONS -- FISCAL 1994 COMPARED TO FISCAL 1993

Net sales for the fiscal year ended September 30, 1994 were
$31,481,000, an increase of 11.9% compared to net sales of $28,145,000 in the
fiscal year ended September 30, 1993. Sales in fiscal year 1994 included
$4,756,000 (15%) to customers in South and Central America. Comparable sales
in fiscal year 1993 were not significant. Sales to Tristar during this period
declined, in dollars, by 14% from fiscal 1993.

With such a dependence on Tristar, the economic and political factors
affecting Tristar's sales to customers also affect Eurostar. In fiscal 1994,
the Mexico market continued to be a key market for Tristar. There, economic
and political conditions affected the purchasing power of the Mexican
population and also there were disruptions in the passage of products through
the United States-Mexico border. Sales by Tristar in its U.S. markets were
believed to have remained relatively constant between fiscal 1994 and fiscal
1993.

Eurostar's gross profit for the fiscal year ended September 30, 1994,
was $11,548,000, or 36.7% of net sales, compared to $10,457,000 or 37.2% of net
sales in fiscal 1993. The decrease in gross profit percentage is not
considered significant.

Eurostar's SG&A expenses increased 51.0% to $5,944,000 for the fiscal
year ended September 30, 1994 from $3,936,000 in the prior fiscal year. As a
percentage of net sales, Eurostar's SG&A increased to 18.9% in fiscal year 1994
from 14.0% in fiscal year 1993. In 1993, many departments had just begun
operation, and their growth toward a normal level of operation caused expenses
to increase faster than sales growth. The most significant of these was the
department supporting the South and Central American sales effort. Management
believes that in fiscal 1995, SG&A expenses will increase further as these
departments become fully staffed and other support departments are established.

<PAGE> 93

Interest expense decreased in fiscal year 1994 to $338,000, compared
to $342,000 in fiscal year 1993 as a result of lower average borrowings under
its revolving line of credit. In fiscal 1995, Eurostar anticipates that
interest expense will be higher due to higher interest rates on its new credit
facility and total increased borrowings.

Eurostar achieved net income of $3,163,000 or $3.16 per share, in
fiscal 1994, as compared to net income of $3,839,000, or $3.84 per share, in
fiscal 1993.

RESULTS OF OPERATIONS -- FISCAL 1993 COMPARED TO THE PERIOD FROM MARCH
5, 1992 THROUGH SEPTEMBER 30, 1992

Eurostar had negligible operations in fiscal 1992 and thus most
comparisons to fiscal 1992 are not meaningful.

Net sales for the fiscal year ended September 30, 1993 were
$28,145,000, compared to net sales of $216,000 in the fiscal year ended
September 30, 1992. Essentially all of these sales were to Tristar.

With such a dependence on Tristar, the economic and political factors
affecting Tristar's sales to customers also affect Eurostar. In fiscal 1993,
the Mexico market was a key market for Tristar.

Eurostar's gross profit for the fiscal year ended September 30, 1993,
was $10,457,000, or 37.2% of net sales. For the fiscal year ended September
30, 1992, gross profit was $17,000, though the percentage to net sales (8.0%)
is not meaningful since operations had just begun.

Eurostar's SG&A expenses were $3,936,000 for the fiscal year ended
September 30, 1993 compared to $743,000 for the fiscal year ended September 30,
1992. As a percentage of net sales, Eurostar's SG&A for fiscal 1993 was 14.0%
in fiscal year 1993. These expenses were primarily attributable to Eurostar's
newly-established manufacturing and administrative support departments.
Eurostar's SG&A expenses of $743,000 for fiscal year 1992 were attributable
primarily to start up costs associated with Eurostar's initial operations,
especially professional fees and other hiring costs.

Interest expense in fiscal year 1993 was $342,000, compared to $38,000
in fiscal year 1992, primarily as a result of higher average borrowings under
its revolving line of credit.

Eurostar achieved net income of $3,839,000 or $3.83 per share, in
fiscal 1993 as compared to a net loss of $499,000, or $.49 per share, in fiscal
1992.

Liquidity and Capital Resources

Eurostar obtains working capital from two primary sources: its credit
facilities and cash generated by operations.

On June 27, 1995, Eurostar entered into a $5,200,000 credit facility
which consists of term loans totaling $3,700,000 and a revolving credit
commitment of $1,500,000 bearing interest at the prime rate plus 1.75% (9% at
June 27, 1995) per annum and additional fees. In early July 1995, a $3,500,000
term loan was drawn down. The term loan calls for equal monthly installments
and matures in 2002. Borrowings under the revolving line of credit are limited
to forty percent (40%) of eligible inventory as defined therein. The revolving
line of credit expires in June 1997 with options to renew annually thereafter.
The credit facility is secured by substantially all the assets of Eurostar.
The agreement contains a material adverse change provision, as well as certain
restrictions and conditions among which are limitations on cash dividends,
capital expenditures and repayments to Transvit under Eurostar's other line of
credit.

Eurostar also maintains a line of credit with Transvit, its parent
company. As of June 30, 1995, approximately $7.0 million was outstanding under
this line of credit. Repayment of the Transvit line of credit is restricted by
the terms of the new credit facility to no more than the greater of (i)
$3,500,000 in the first fiscal year or $1,500,000 per fiscal year thereafter,
or (ii) fifty percent (50%) of Eurostar's

85
<PAGE> 94

cash flow for fiscal years after the first fiscal year. The Transvit line of
credit bears interest at 4.5% per annum.

During the six months ended March 31, 1995, borrowings from Transvit
increased by $300,000 to $6,516,000 at March 31, 1995. During fiscal 1994,
borrowings from Transvit decreased by $2,753,000 to $6,216,000 at September 30,
1994. Additional borrowings of $2,484,000 and $2,784,000 were available as of
March 31, 1995 and September 30, 1994, respectively, under the Transvit line of
credit. See Note 6 of the notes to Eurostar's Consolidated Financial
Statements for additional information on the previous line of credit.

Operating activities in for the six months ended March 31, 1995
utilized $898,000 in cash. The cash utilized was primarily the result of
decreased income taxes payable ($1,425,000) and decreased trade accounts
payable ($2,234,000). Partially offsetting these usages were decreased
inventories ($1,657,000) and net income adjusted for non-cash items
($2,052,000). Operating activities in fiscal 1994 generated $5,119,000 in
cash. Cash was provided primarily from net income adjusted for non-cash items
($4,490,000) and decreased trade accounts receivable ($3,137,000). Partially
offsetting these were usages from increased inventories ($1,369,000) and
reduced trade accounts payable ($1,316,000).

Capital expenditures during fiscal 1994 totaled approximately
$1,456,000, primarily for production equipment and a mini- computer and related
software. Capital expenditures in fiscal 1993 were $3,212,000, primarily for
production equipment and completion of the production facility. Capital
expenditures in fiscal 1995 are currently anticipated to be approximately
$1,519,000, including amounts related to the acquisition of cosmetic pencils
manufacturing capability. This amount is not expected to be material to the
cash flow of Eurostar.

Management believes that Eurostar's credit facilities and cash from
operations should be sufficient to meet the cash requirements of Eurostar for
fiscal 1995, including payments on Transvit's line of credit as permitted by
the new credit facility.

Eurostar does not have any plans to pay any cash dividends on its
common stock in the foreseeable future. Further, payments of such dividends
are subject to restrictions imposed by Eurostar's lender in connection with its
new credit facility.

Inflation

During the fiscal year ended September 30, 1994, and consistent with
prior years, inflation did not have a material adverse impact either on
Eurostar's net sales or income from continuing operations.

MARKET PRICES OF EUROSTAR COMMON STOCK; DIVIDENDS

MARKET INFORMATION

Eurostar is a wholly-owned subsidiary of Transvit. There is not and
never has been any trading market for Eurostar Common Stock.

Eurostar has paid no dividends on Eurostar Common Stock since its
inception and has no plans to pay any dividends on Eurostar Common Stock in the
future.

PROPOSAL NO. 2

AMENDMENT TO TRISTAR'S CERTIFICATE OF INCORPORATION

The Tristar Board has unanimously approved and recommends that the
stockholders adopt an amendment to Tristar's Certificate of Incorporation in
order to increase the number of shares of Tristar Common Stock which Tristar is
authorized to issue from 10,000,000 shares to 30,000,000 shares. The text of
Article IV of Tristar's Certificate of Incorporation, as the same will read if
the amendment to

<PAGE> 95

Tristar's Certificate of Incorporation is approved at the Special Meeting, is
set forth in Appendix C to this Proxy Statement.

Proposal No. 2 consists of a proposed amendment to the Tristar
Certificate of Incorporation that would increase the number of authorized
shares of Tristar Common Stock from 10,000,000 to 30,000,000 (the "Authorized
Shares Amendment"). The additional shares of Tristar Common Stock would
constitute additional shares of Tristar Common Stock that, if and when issued,
would have the same rights and privileges as the shares of Tristar Common Stock
presently authorized. See "Description of Tristar Capital Stock".

Tristar's Certificate of Incorporation currently authorizes the
issuance of 10,000,000 shares of Tristar Common Stock. Of such shares, as of
July 12, 1995, 6,651,873 shares were outstanding, 478,200 shares were reserved
for issuance pursuant to the Tristar 1991 Stock Option Plan and 2,400,000 were
reserved for issuance pursuant to certain warrants indirectly held by the Core
Sheth Families. Consequently, the authorization of the additional shares of
Tristar Common Stock is necessary for the issuance of 9,977,810 shares of
Tristar Common Stock upon consummation of the Merger. In addition, if the
Merger is consummated, the remaining shares of Tristar Common Stock being
authorized will be available for issuance at the direction of Tristar's Board
from time to time for any proper corporate purpose, including, without
limitation, the acquisition of other businesses, the raising of additional
capital for use in Tristar's business, a split of or dividend on the then
outstanding shares or in connection with any employee stock option plan or
program. Except for shares of Tristar Common Stock that would be issued upon
approval of the Merger or that are currently reserved for issuance, the Tristar
Board has no current plans to issue additional shares of Tristar Common Stock.

The holders of shares of Tristar Common Stock do not presently have
preemptive rights to subscribe for any shares of Tristar Common Stock and will
not have any such rights to subscribe for additional shares of Tristar Common
Stock proposed to be authorized. Any further issuance of authorized shares of
Tristar Common Stock may be authorized by the Tristar Board without any further
action by the stockholders, except as required by law or the rules of any
national securities exchange or quotation system, such as the NASDAQ/NMS, on
which shares of Tristar are listed or quoted.

Stockholders of Tristar should recognize that, although the Tristar
Board will issue Tristar Common Stock only when it considers such issuance to
be in the best interests of Tristar, the issuance of additional Tristar Common
Stock may, among other things, have a dilutive effect on the earnings per share
of Tristar Common Stock. Such an issuance could deter the types of
transactions that may be proposed with respect to any acquisition of Tristar or
could discourage or limit the stockholders' participation in certain types of
transactions that might be proposed (such as a tender offer), whether or not
such transactions were favored by a majority of the stockholders, and could
enhance the ability of officers and directors to retain their positions.

THE TRISTAR BOARD DEEMS PROPOSAL NO. 2 TO BE IN THE BEST INTERESTS OF
TRISTAR AND ITS STOCKHOLDERS AND RECOMMENDS A VOTE "FOR" APPROVAL THEREOF.

INDEPENDENT PUBLIC ACCOUNTANTS

Coopers & Lybrand L.L.P. have been the independent auditors for
Tristar since fiscal 1993 and will serve in that capacity for the 1995 fiscal
year. A representative of Coopers & Lybrand L.L.P. will be present at the
Special Meeting and will have an opportunity to make a statement if he desires
to do so, and will respond to appropriate questions from stockholders. Certain
federal income tax consequences of the Merger will be passed upon for Tristar
by Coopers & Lybrand L.L.P., 1999 Bryan Street, Suite 3000, Dallas, Texas
75201-3185, and for Eurostar by KPMG Peat Marwick LLP, 112 East Pecan Street,
Suite 2400, San Antonio, Texas 78205-1585.

<PAGE> 96

LEGAL OPINIONS

The legality of the shares of Tristar Common Stock to be issued in
connection with the Merger will be passed upon for Tristar by Fulbright &
Jaworski L.L.P., San Antonio, Texas 78205.

STOCKHOLDER PROPOSALS

Stockholder proposals, in order to be considered for presentation at
the Annual Meeting of Stockholders of Tristar to be held in 1996, must be
received by Tristar Corporation, 12500 San Pedro Avenue, Suite 500, San
Antonio, Texas 78216, not later than November 9, 1995.

OTHER MATTERS

The Tristar Board knows of no other business that will be presented at
the Special Meeting. If any other business is properly brought before the
Special Meeting, it is intended that proxies in the enclosed form will be voted
in respect thereof in accordance with the judgement of the persons voting the
proxies. WHETHER OR NOT YOU INTEND TO BE PRESENT AT THE SPECIAL MEETING, YOU
ARE URGED TO COMPLETE, SIGN AND RETURN YOUR PROXY PROMPTLY.

BY ORDER OF THE TRISTAR BOARD

Viren S. Sheth
President and Chief Executive Officer

August 4, 1995
San Antonio, Texas

<PAGE> 97

INDEX TO FINANCIAL STATEMENTS

<TABLE>
<CAPTION>
Page
----
<S> <C>
CONSOLIDATED FINANCIAL STATEMENTS OF TRISTAR CORPORATION
AND SUBSIDIARIES

Independent Auditors' Reports F-2, F-3, F-4
Consolidated Balance Sheets as of August 31, 1994 and 1993 and
May 31, 1995 (unaudited) F-5, F-6
Consolidated Statements of Income for the years ended August 31, 1994, 1993
and 1992 and for the nine month periods ended May 31, 1995 and
1994 (unaudited) F-7
Consolidated Statements of Cash Flows for the years ended August 31, 1994,
1993 and 1992 and for the nine month periods ended May 31, 1995 and
1994 (unaudited) F-8, F-9
Consolidated Statements of Shareholders' Equity for the years ended
August 31, 1994, 1993 and 1992 and for the nine month period ended
May 31, 1995 (unaudited) F-10
Notes to Consolidated Financial Statements F-11 to F-31

CONSOLIDATED FINANCIAL STATEMENTS OF EUROSTAR PERFUMES, INC.
AND SUBSIDIARIES

Independent Auditors' Reports F-32, F-33
Consolidated Balance Sheets as of September 30, 1994 and 1993 and
March 31, 1995 (unaudited) F-34
Consolidated Statements of Income and Retained Earnings for the years
ended September 30, 1994 and 1993, the period from March 5, 1992 (date of
inception) through September 30, 1992 (unaudited),
and the six month periods ended March 31, 1995 and 1994 (unaudited) F-35
Consolidated Statements of Cash Flows for the years ended September 30,
1994 and 1993, the period from March 5, 1992 (date of inception) through
September 30, 1992 (unaudited), and the six month periods ended
March 31, 1995 and 1994 (unaudited) F-36
Notes to Consolidated Financial Statements F-37 to F-42
</TABLE>

<PAGE> 98

INDEPENDENT AUDITORS' REPORT

To the Board of Directors and Shareholders
of Tristar Corporation:

We have audited the accompanying consolidated balance sheets of Tristar
Corporation and Subsidiaries as of August 31, 1994 and 1993 and the related
consolidated statements of income, shareholders' equity and cash flows for each
of the two years in the period ended August 31, 1994. These financial statements
are the responsibility of the Company's management. Our responsibility is to
express an opinion on these financial statements based on our audits.

We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in
all material respects, the consolidated financial position of Tristar
Corporation and Subsidiaries as of August 31, 1994 and 1993, and the
consolidated results of their operations and their cash flows for each of the
two years in the period ended August 31, 1994 in conformity with generally
accepted accounting principles.

COOPERS & LYBRAND L.L.P.

Dallas, Texas
November 11, 1994, except for Note 16,
as to which the date is November 22, 1994

F-2
<PAGE> 99

INDEPENDENT AUDITORS' REPORT

To the Board of Directors and Shareholders
of Tristar Corporation:

We have reviewed the accompanying consolidated balance sheet of Tristar
Corporation and Subsidiaries as of May 31, 1995 and the consolidated statements
of income and cash flows for the nine month periods ended May 31, 1995 and 1994.
These financial statements are the responsibility of the Company's management.

We conducted our review in accordance with standards established by the American
Institute of Certified Public Accountants. A review of interim financial
information consists principally of applying analytical review procedures to
financial data and making inquiries of persons responsible for financial and
accounting matters. It is substantially less in scope than an audit in
accordance with generally accepted auditing standards, the objective of which is
the expression of an opinion regarding the financial statements taken as a
whole. Accordingly, we do not express such an opinion.

Based on our review, we are not aware of any material modifications that should
be made to the accompanying consolidated financial statements of Tristar
Corporation and Subsidiaries for them to be in conformity with generally
accepted accounting principles.

COOPERS & LYBRAND L.L.P.

Dallas, Texas
July 7, 1995

F-3
<PAGE> 100

INDEPENDENT AUDITORS' REPORT

REPORT OF ERNST & YOUNG LLP, INDEPENDENT AUDITORS

Shareholders and Directors
Tristar Corporation and Subsidiaries

We have audited the accompanying consolidated statements of income,
shareholders' equity and cash flows of Tristar Corporation and Subsidiaries for
the year ended August 31, 1992. Our audit also included the financial
statement schedules listed in the Index at Item 14(a). These financial
statements and schedules are the responsibility of the Company's management.
Our responsibility is to express and opinion on these financial statements and
schedules based on our audit.

We conducted our audit in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audit provides a reasonable basis
for our opinion.

In our opinion, the consolidated financial statements referred to above present
fairly, in all material respects, the consolidated results of operations and
cash flows of Tristar Corporation and Subsidiaries for the year ended August
31, 1992, in conformity with generally accepted accounting principles. Also, in
our opinion, the related financial statement schedules, when considered in
relation to the basic financial statements taken as a whole, present fairly in
all material respects the information set forth therein.

/s/ ERNST & YOUNG LLP
---------------------------
ERNST & YOUNG LLP

October 16, 1992, except for the fourth paragraph of
Note 11, as to which the date is March 31, 1994, and
the third paragraph of Note 12, as to which the date is
December 17, 1993

F-4
<PAGE> 101

TRISTAR CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS

<TABLE>
<CAPTION>
August 31,
May 31, -----------------------------
1995 1994 1993
ASSETS ----------- ----------- -----------
------ (Unaudited)

<S> <C> <C> <C>
Current assets:
Cash and cash equivalents $ 249,000 $ 269,000 $ 235,000
Accounts receivable, less allowance for doubtful accounts of
$447,000, $589,000, and $314,000 4,952,000 6,430,000 5,290,000
Accounts receivable - related parties, net (Note 6) - - 109,000
Current portion note receivable - related party (Note 6) 50,000 - -
Accounts receivable - insurance reimbursement (Note 16) 815,000 - -
Inventories (Note 3) 8,549,000 8,127,000 11,950,000
Prepaid expenses 297,000 243,000 225,000
Refundable income taxes (Note 8) 52,000 1,774,000 1,420,000
Deferred income taxes (Note 8) - - 299,000
----------- ----------- -----------

Total current assets 14,964,000 16,843,000 19,528,000
----------- ----------- -----------

Note receivable - related party (Note 6) 550,000 - -
Assets held for sale (Note 6) 648,000 - -
Property, plant and equipment, less accumulated depreciation of
$734,000, $1,015,000, and $846,000 (Note 2) 714,000 2,372,000 2,313,000
----------- ----------- -----------

Other assets:
Warrant valuation, less accumulated amortization of $557,000 and
$367,000 (Notes 6 and 12) 1,532,000 1,722,000 -
Other assets 56,000 84,000 58,000
Deferred income taxes (Note 8) - - 1,319,000
----------- ----------- -----------

Total other assets 1,588,000 1,806,000 1,377,000
----------- ----------- -----------

Total assets $18,464,000 $21,021,000 $23,218,000
=========== =========== ===========
</TABLE>

The accompanying notes are an integral part of the
consolidated financial statements.

F-5
<PAGE> 102

TRISTAR CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS, CONTINUED

<TABLE>
<CAPTION>
August 31,
May 31, ----------------------------
LIABILITIES AND SHAREHOLDERS' EQUITY 1995 1994 1993
----------- ----------- -----------
(Unaudited)

<S> <C> <C> <C>
Current liabilities:
Short-term borrowings (Note 4) $ 3,964,000 $ 4,511,000 $ 2,505,000
Accounts payable--trade 474,000 865,000 1,750,000
Accounts payable--related parties, net (Note 6) 2,857,000 1,462,000 3,549,000
Accrued bonuses 212,000 302,000 319,000
Accrued litigation expense (Note 13) 177,000 175,000 342,000
Accrued interest expense 456,000 386,000 -
Accrued promotion expense 92,000 455,000 -
Other accrued expenses 655,000 694,000 500,000
Current portion of long-term obligations (Notes 5 and 7) 35,000 38,000 18,000
----------- ----------- -----------

Total current liabilities 8,922,000 8,888,000 8,983,000
----------- ----------- -----------

Shareholder litigation settlement (Note 12) - 4,500,000 8,000,000
Obligations under capital leases, less current portion (Note 7) 31,000 54,000 15,000
Subordinated long term debt, related parties (Notes 6 and 12) 8,000,000 5,000,000 1,500,000
----------- ----------- -----------

Total liabilities 16,953,000 18,442,000 18,498,000
----------- ----------- -----------

Commitments and contingencies (Note 11)

Shareholders' equity (Notes 6 and 9):
Preferred stock, $.05 par value; authorized 1,000,000 shares; no
shares issued - - -
Common stock, $.01 par value; authorized 10,000,000 shares; issued
and outstanding 6,648,966 shares in May 1995, 6,641,538
shares in 1994, and 6,627,903 shares in 1993 67,000 66,000 66,000
Additional paid-in-capital (Notes 6 and 12) 10,281,000 10,229,000 8,079,000
Receivable from shareholders, related parties (Notes 6 and 12) - (500,000) (500,000)
Accumulated deficit (8,837,000) (7,216,000) (2,925,000)
----------- ----------- -----------

Total shareholders' equity 1,511,000 2,579,000 4,720,000
----------- ----------- -----------

Total liabilities and shareholders' equity $18,464,000 $21,021,000 $23,218,000
=========== =========== ===========
</TABLE>

The accompanying notes are an integral part of the
consolidated financial statements.

F-6
<PAGE> 103

TRISTAR CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME

<TABLE>
<CAPTION>
Nine Months ended May 31, Years ended August 31,
---------------------------- ----------------------------------------------
1995 1994 1994 1993 1992
----------- ----------- ----------- ------------ -----------
(Unaudited)

<S> <C> <C> <C> <C> <C>
Net sales $24,091,000 $35,861,000 $46,488,000 $ 51,409,000 $47,519,000

Cost of sales (Note 6) 19,821,000 29,290,000 38,457,000 40,367,000 35,129,000
----------- ----------- ----------- ------------ -----------

Gross profit 4,270,000 6,571,000 8,031,000 11,042,000 12,390,000

Selling, general and administrative expenses 6,576,000 8,298,000 10,662,000 8,753,000 5,492,000
----------- ----------- ----------- ------------ -----------

(Loss) income from operations (2,306,000) (1,727,000) (2,631,000) 2,289,000 6,898,000

Other income (expense):
Interest expense (961,000) (859,000) (1,195,000) (248,000) (236,000)
Interest and other (expense) income (Note 6) (419,000) 12,000 (352,000) 25,000 36,000
Litigation expenses (Note 13) - - (208,000) (2,758,000) (1,650,000)
Insurance reimbursement (Note 16) 2,065,000 - - - -
Shareholders litigation settlement (Note 12) - - - (9,500,000) -
----------- ----------- ----------- ------------ -----------

(Loss) income before (benefit) provision for
income taxes (1,621,000) (2,574,000) (4,386,000) (10,192,000) 5,048,000

(Benefit) provision for income taxes (Note 8) - - (95,000) (2,033,000) 1,761,000
----------- ----------- ----------- ------------ -----------

Net (loss) income $(1,621,000) $(2,574,000) $(4,291,000) $ (8,159,000) $ 3,287,000
=========== =========== =========== ============ ===========

Net (loss) income per common share (Note 9):
Primary $ (.24) $ (.39) $ (.65) $ (1.23) $ .46
=========== =========== =========== ============ ===========

Fully diluted $ (.24) $ (.39) $ (.65) $ (1.23) $ .46
=========== =========== =========== ============ ===========

Weighted average number of shares
outstanding:
Primary 6,646,067 6,629,837 6,631,948 6,623,238 7,072,844
=========== =========== =========== ============ ===========

Fully diluted 6,646,067 6,629,837 6,631,948 6,623,238 7,072,844
=========== =========== =========== ============ ===========
</TABLE>

The accompanying notes are an integral part of the
consolidated financial statements.

F-7
<PAGE> 104

TRISTAR CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS

<TABLE>
<CAPTION>
Nine Months ended May 31, Years ended August 31,
---------------------------- -------------------------------------------
1995 1994 1994 1993 1992
------------ ------------ ------------ ------------ -----------
(Unaudited)

<S> <C> <C> <C> <C> <C>
Cash flows from (used in) operating activities:
Net (loss) income $(1,621,000) $(2,574,000) $(4,291,000) $(8,159,000) $ 3,287,000
Adjustments to reconcile net (loss)
income to net cash (used in)
provided by operating activities:
Shareholder litigation settlement - - - 9,500,000 -
Depreciation and amortization 386,000 332,000 443,000 319,000 273,000
Provision for losses on accounts
receivable 210,000 213,000 500,000 255,000 242,000
Provision for inventory 407,000 369,000 360,000 144,000 105,000
Impairment of assets reserve 150,000 - - - -
Deferred income tax expense (benefit) - - 1,618,000 (1,252,000) (246,000)
Loss on disposal of assets 23,000 71,000 71,000 98,000 -
Issuance of stock in connection with
401k plan 53,000 41,000 58,000 50,000 21,000
Amortization of warrant valuation 190,000 - 367,000 - -
Change in operating assets and liabilities:
Accounts receivable 1,268,000 (349,000) (1,531,000) (1,436,000) (1,226,000)
Accounts receivable - insurance
reimbursement (815,000) - - - -
Inventories (830,000) 376,000 3,463,000 (940,000) (4,099,000)
Prepaid expenses (54,000) (86,000) (18,000) (57,000) (114,000)
Refundable income taxes 1,722,000 559,000 (354,000) (1,228,000) (581,000)
Accounts payable 1,004,000 (1,093,000) (2,972,000) 5,021,000 554,000
Accrued expenses (420,000) 468,000 851,000 98,000 441,000
Shareholder litigation settlement liability (4,500,000) (3,500,000) (3,500,000) (1,500,000) -
----------- ----------- ----------- ----------- -----------

Net cash (used in) provided by
operating activities (2,827,000) (5,173,000) (4,935,000) 913,000 (1,343,000)
----------- ----------- ----------- ----------- -----------

Cash flows used in investing activities:
Capital expenditures (129,000) (195,000) (440,000) (604,000) (381,000)
Collections due from officers/shareholders - - - - 38,000
Proceeds from sale of assets 42,000 19,000 26,000 18,000 -
(Increase) decrease in other assets (33,000) (107,000) (96,000) 124,000 (2,000)
----------- ----------- ----------- ----------- -----------

Net cash used in investing
activities (120,000) (283,000) (510,000) (462,000) (345,000)
----------- ----------- ----------- ----------- -----------
</TABLE>

The accompanying notes are an integral part of the
consolidated financial statements.

F-8
<PAGE> 105

TRISTAR CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS,
CONTINUED

<TABLE>
<CAPTION>
Nine Months ended May 31, Years ended August 31,
--------------------------- -------------------------------------------
1995 1994 1994 1993 1992
------------ ----------- ------------ ------------ -----------
(Unaudited)

<S> <C> <C> <C> <C> <C>
Cash flows from (used in) financing activities:
Net increase (decrease) in short term
borrowings $ (547,000) $2,000,000 $ 2,006,000 $(1,125,000) $1,924,000
Proceeds from issuance of subordinated
long-term debt 4,000,000 3,500,000 3,500,000 1,500,000 -
Principal payments under debt obligations (1,000,000) - (30,000) (197,000) (201,000)
Other principal payments (26,000) (21,000) - (1,088,000) -
Proceeds from long-term debt - - - 15,000 22,000
Proceeds from issuance of common stock - - 3,000 3,000 215,000
Collection on receivable from shareholder 500,000 - - - -
----------- ---------- ----------- ----------- ----------

Net cash provided by (used in)
financing activities 2,927,000 5,479,000 5,479,000 (892,000) 1,960,000
----------- ---------- ----------- ----------- ----------

Net increase (decrease) in cash and cash
equivalents (20,000) 23,000 34,000 (441,000) 272,000

Cash and cash equivalents at
beginning of period 269,000 235,000 235,000 676,000 404,000
----------- ---------- ----------- ----------- ----------

Cash and cash equivalents at end of period $ 249,000 $ 258,000 $ 269,000 $ 235,000 $ 676,000
=========== ========== =========== =========== ==========

Supplemental disclosure of cash flow
information:
Cash paid (received) during the year for:
Interest $ 628,000 $ 263,000 $ 253,000
Income taxes $(1,338,000) $ 560,000 $2,596,000
</TABLE>

The accompanying notes are an integral part of the
consolidated financial statements.

F-9

<PAGE> 106

TRISTAR CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY
YEARS ENDED AUGUST 31, 1994, 1993 AND 1992 AND THE
NINE MONTHS ENDED MAY 31, 1995 (UNAUDITED)

<TABLE>
<CAPTION>
Common Stock
------------------------ Additional Retained Receivables
Number of Paid-In (Deficit) From
Shares Amount Capital Earnings Shareholders
------------ -------- ------------ ----------- ------------

<S> <C> <C> <C> <C> <C>
Balance August 31, 1991 3,199,331 $ 32,000 $ 6,637,000 $ 1,947,000 $ -
Two-for-one common stock split 3,199,331 32,000 (32,000)
Net income 3,287,000
Contribution to 401(k) Plan 2,379 - 21,000
Exercise of stock options 217,600 2,000 213,000
Tax benefit relating to exercise of stock
options 688,000
--------- -------- ----------- ----------- ---------

Balance August 31, 1992 6,618,641 $ 66,000 $ 7,527,000 $ 5,234,000 $ -
Net loss (8,159,000)
Contribution to 401(k) Plan 7,262 - 49,000
Exercise of stock options 2,000 - 3,000
Stock warrants (Notes 6 and 12) 500,000 (500,000)
--------- -------- ----------- ----------- ---------

Balance August 31, 1993 6,627,903 $ 66,000 $ 8,079,000 $(2,925,000) $(500,000)
Net loss (4,291,000)
Contribution to 401(k) Plan 11,635 - 58,000
Exercise of stock options 2,000 - 3,000
Stock warrants (Notes 6 and 12) 2,089,000
--------- -------- ----------- ----------- ---------

Balance August 31, 1994 6,641,538 $ 66,000 $10,229,000 $(7,216,000) $(500,000)
Net loss (unaudited) (1,621,000)
Contribution to 401(k) Plan (unaudited) 7,428 1,000 52,000 - -
Receipt of shareholder receivable
(unaudited) - - - - 500,000
--------- -------- ----------- ----------- ---------

Balance May 31, 1995 (unaudited) 6,648,966 $ 67,000 $10,281,000 $(8,837,000) $ -
========= ======== =========== =========== =========
</TABLE>

The accompanying notes are an integral part of the
consolidated financial statements.

F-10
<PAGE> 107

TRISTAR CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(DATA WITH RESPECT TO FEBRUARY 28, 1995 AND FOR
THE NINE MONTH PERIODS ENDED MAY 31,
1995 AND 1994 IS UNAUDITED)

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:

AFFILIATION

The Company became a subsidiary of Starion International, Ltd.
("Starion") on November 4, 1992, when Starion, which is controlled by
the Core Sheth Families, acquired majority control.

BUSINESS SEGMENT

The Company operates one business segment which is the marketing and
wholesale distribution of fragrances, cosmetics, and bath and body
products, and the manufacture, marketing and wholesale distribution of
cosmetic pencils. Substantially all of the Company's accounts
receivable are due from chain stores, wholesalers and independent
distributors located throughout the United States, Canada and Mexico.

PRINCIPLES OF CONSOLIDATION

The consolidated financial statements include the accounts of TRISTAR
CORPORATION and all subsidiaries (the "Company"). All significant
intercompany accounts and transactions have been eliminated in
consolidation.

INTERIM FINANCIAL STATEMENTS (UNAUDITED)

The consolidated financial statements as of May 31, 1995 and for the
nine month periods ended May 31, 1995 and 1994 are unaudited. In the
opinion of management, all adjustments (consisting of normal recurring
accruals) considered necessary for a fair presentation have been
included. Operating results for the nine month period ended May 31,
1995 are not necessarily indicative of the results that may be expected
for the year ending August 31, 1995.

The unaudited consolidated financial statements have been prepared in
accordance with generally accepted accounting principles for interim
financial information and with the instructions to Form 10-Q and Rule
10-01 of Regulation S-X. Accordingly, they do not include all of the
information and footnotes required by generally accepted accounting
principles for complete financial statements.

F-11
<PAGE> 108

TRISTAR CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, CONTINUED

CASH EQUIVALENTS

The Company considers all highly liquid investments with an original
maturity of three months or less to be cash equivalents.

INVENTORY

Inventory is stated at the lower of cost (determined by the weighted
average cost method) or market.

PROPERTY, PLANT AND EQUIPMENT

Property, plant and equipment are stated at cost. Depreciation is
determined by the straight-line method of depreciation over the
estimated useful lives of the assets.

REVENUE RECOGNITION

Revenue is recognized by the Company when goods are shipped and title
passes to the purchaser.

NET (LOSS) INCOME PER SHARE

Net (loss) income per share is computed based on the weighted average
number of common shares outstanding during each year and common
equivalent shares of dilutive stock options and warrants.

All share and per share amounts have been adjusted to reflect a 2-for-1
common stock split in the form of a dividend effected on February 21,
1992.

WARRANT VALUATION

Common stock purchase warrants related to the Stockholder Class Action
Litigation Settlement were valued using the Black Scholes Method.
Amortization of the value will be straight line into fiscal 2006.

RECLASSIFICATIONS

Certain data within the financial statements has been reclassified for
prior years to conform to the current year's presentation.

F-12
<PAGE> 109

TRISTAR CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, CONTINUED

2. PROPERTY, PLANT AND EQUIPMENT:

<TABLE>
<CAPTION>
August 31,
-------------------------
1994 1993
---------- ----------

<S> <C> <C>
Land $ 233,000 $ 233,000
Building 694,000 694,000
Machinery and equipment 1,898,000 1,648,000
Transportation equipment 54,000 71,000
Fixtures and equipment 404,000 415,000
Leasehold improvements 104,000 98,000
---------- ----------

Total cost 3,387,000 3,159,000

Less accumulated depreciation 1,015,000 846,000
---------- ----------

$2,372,000 $2,313,000
========== ==========
</TABLE>

3. INVENTORIES:

<TABLE>
<CAPTION>
May 31, August 31,
---------- ---------------------------
1995 1994 1993
---------- ---------- -----------
(Unaudited)

<S> <C> <C> <C>
Raw materials $ - $ 227,000 $ 294,000
Work-in-process 246,000 494,000 471,000
Finished goods 8,303,000 7,406,000 11,185,000
---------- ---------- -----------

$8,549,000 $8,127,000 $11,950,000
========== ========== ===========
</TABLE>

The inventory balances for May 31, 1995 and August 31, 1994 and 1993
are shown net of reserves for market valuation of $807,000, $400,000
and $312,000, respectively. Inventory reserves, which reduce the
carrying value of inventories to the lower of cost or market, are
based on balances of significant inventory items on hand and their
respective forcasted sales volumes and prices. Raw materials
inventories as of August 31, 1994 and 1993, relate to the cosmetic
pencil manufacturing operations. These operations and the related
inventories were sold to Eurostar, effective May 1995. Work-in-process
inventories as of August 31, 1994 and 1993, related partially to the
cosmetic pencil manufacturing and partially to the distribution
activity. The remaining work-in-process inventories relate only to the
distribution activity. See Note 6 for further discussion of the pencil
manufacturing operations sale.

F-13
<PAGE> 110

TRISTAR CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, CONTINUED

4. SHORT-TERM BORROWINGS:

The Company had available at May 31, 1995, a revolving credit agreement
which provided for maximum borrowings of $10,000,000 at the prime rate
(9% at May 31, 1995) plus five percentage points plus additional fees
approximating a percentage point per annum. Borrowings under this
credit agreement were limited to 70% of eligible accounts receivable
and 30% of eligible inventories as defined in the credit agreement
dated October 12, 1993. Collateral for the credit agreement consists of
all assets of the Company. The agreement contains a material adverse
change in business or financial condition provision as well as certain
restrictions and conditions among which are limitations on cash
dividends and capital expenditures. As of May 31, 1995 and August 31,
1994, based on the borrowing formula in the agreement, the maximum
borrowings available to the Company were $4,839,000 and $6,128,000,
respectively, of which $875,000 and $1,617,000, respectively, were not
utilized. The revolving line of credit agreement matures October 7,
1995.

The Company had available at August 31, 1993, a revolving credit
agreement which provided for maximum borrowings of $3,025,000 at prime
plus three percentage points. Borrowings under this credit agreement
were limited to 70% of eligible accounts receivable and 10% of eligible
inventories as defined in the Amended and Restated Loan and Security
Agreement dated January 29, 1993 and the first Amendment thereto dated
April 30, 1993. Collateral for the credit agreement consisted of all
receivables and inventories of the Company. Amounts outstanding under
the credit agreement were due upon demand. At August 31, 1993, the
unused portion of the revolving credit agreement was $520,000. On
August 31, 1993, the Company obtained a Second Amendment to the Amended
and Restated Loan and Security Agreement extending the arrangement to
February 15, 1994. On October 12, 1993, the Company secured the
existing line of credit which is described above.

As of July 7, 1995, the Company and its lender amended the existing
credit agreement and extended the maturity date to July 7, 1997 from
the original maturity date of October 7, 1995. Under the terms of the
amendment, borrowing availability was increased to 75% of eligible
accounts receivable and 50% of eligible inventories as defined in the
original agreement. In addition, the interest expense was reduced to
prime rate plus three percentage points per annum with additional fees
approximating a percentage point per annum.

F-14
<PAGE> 111

TRISTAR CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, CONTINUED

5. LONG-TERM DEBT:

<TABLE>
<CAPTION>
August 31,
May 31, -------------------------
1995 1994 1993
---------- ---------- ----------
(Unaudited)
<S> <C> <C> <C>
Various notes payable, at rates ranging from 7.75% to
12.5%, through November, 1993 $ - $ - $ 8,000
Subordinated long term debt representing loans made
by the Core Sheth Families, through their affiliate
Nevell Investments, S.A., to finance the Company's
payments under the shareholder litigation settlement.
Debt has a term of ten years with principal payable
20% at the end of the eighth and ninth year and the
remaining 60% payable at the end of the tenth year. 8,000,000 5,000,000 1,500,000
---------- ---------- ----------

Total 8,000,000 5,000,000 1,508,000

Current maturities of long-term debt - - 8,000
---------- ---------- ----------

$8,000,000 $5,000,000 $1,500,000
========== ========== ==========
</TABLE>

6. RELATED PARTY TRANSACTIONS:

As of August 31, 1994, a majority of the Company's stock (60.5%) was
owned by Starion, a British Virgin Islands company owned by the Core
Sheth Families. The acquisition of this ownership occurred in several
stages beginning in February 1986 and ending in November 1991.
Ownership of the Company's common stock by the Core Sheth Families at
both August 31, 1993 and August 31, 1992, was 60.7%.

The Core Sheth Families also owned or acquired ownership in three major
suppliers of fragrance and cosmetics to the Company during the three
years ended August 31, 1994. These three suppliers were Eurostar
Perfumes, Inc. ("Eurostar"), S&J Perfume Company, Ltd. ("S&J Perfume")
and Emicos International Ltd. ("Emicos"). For the fiscal years ended
August 31, 1994, 1993, and 1992 and for the nine month periods ended
May 31, 1995 and 1994, the fragrance products supplied by either
Eurostar or S&J Perfume represented approximately 79%, 82%, 82%, 78%,
and 81% of the Company's net sales, respectively. Cosmetics supplied by
Emicos accounted for approximately 12%, 7%, 7%, 12%, and 11% of the
Company's net sales, respectively, for the same periods. For the years
ended August 31, 1994, 1993 and 1992, purchases from Emicos amounted to
$4,254,000, $3,039,000, and $1,970,000, respectively. At August 31,
1994, the Company had a liability to Emicos in the amount of $726,000.
At August 31, 1993 and 1992, Company had $311,000 and $0, respectively,
in liabilities to Emicos. In September 1992, the Company began
purchasing fragrances from Eurostar, a U.S. affiliate of the Core Sheth
Families. In October 1992, the Company entered into a three-year
distribution agreement with S&J Perfume and Eurostar for purchases from
both parties.

F-15
<PAGE> 112

TRISTAR CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, CONTINUED

This agreement was amended in August 1993, such that the Company is
assured of a supply of product through August 1999. At the end of
fiscal 1994 the Company had a liability to Eurostar of $1,162,000. At
August 31, 1993 and 1992, the Company had $3,612,000 and $0,
respectively, in liabilities to Eurostar.

On December 3, 1992, Viren Sheth was elected a director of the Company
and appointed as President and Chief Executive Officer of the Company,
both positions which he held at August 31, 1994. Mr. Sheth also serves
as the President of Eurostar.

Purchases of fragrances from Eurostar in the fiscal years ended August
31, 1994 and 1993 and the nine month periods ended May 31, 1995 and
1994 were $27,282,000, $25,104,000, $17,636,000, and $22,867,000,
respectively. The fragrances supplied by S&J Perfume were purchased
through Amuli Export Company ("Amuli"), an entity which assumed the
credit risk involved in S&J Perfume's sales to the Company. Purchases
through Amuli for the years ended August 31, 1994, 1993 and 1992 were
$0, $6,631,000, and $29,797,000, respectively.

Mr. Eugene Derry, a director, Chairman of the Board and President of
the Company for the period July 1989 through July 1992, acted as a
representative of Amuli in connection with Amuli's dealings with the
Company. A business associate of Mr. Derry's is the owner of Amuli.
Final purchases through Amuli were made in December 1992. At August 31,
1994, 1993, and 1992, the Company's liabilities to Amuli were
approximately $0, $0, and $359,000, respectively.

During the years ended August 31, 1994, 1993 and 1992, the Company sold
cosmetic pencils to Emicos in the amounts of approximately $343,000,
$1,359,000 and $579,000, respectively. At the respective year ends, the
Company had receivables outstanding from Emicos of approximately
$126,000, $389,000, and $0, respectively.

Eurostar purchases various products from the Company for resale to its
customers in Central and South America. These purchases were $114,000
in fiscal 1994 and $142,000 in fiscal 1993. In addition, the Company
sells various inventory items, at cost, to Eurostar for packaging into
various combinations of products which are then repurchased by the
Company. Such inventory items, which are included in a packaged product
and related labor, are repurchased at the same price as originally sold
to Eurostar, plus the cost of packaging, and the cost of any other
items added by Eurostar. The Company had a receivable from Eurostar of
$248,000 at the end of fiscal 1994 and $123,000 at the end of fiscal
1993.

F-16
<PAGE> 113

TRISTAR CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, CONTINUED

In October 1993, the Company became a party to a one year design and
consulting agreement with Eurostar, whereby Eurostar and other Core
Sheth Families entities will provide marketing concepts and design
services to the Company for the production of marketing and advertising
material. The agreement, renewable annually, provides for an annual
fixed fee which will be renegotiated at the end of each year. The
agreement was renewed for calendar 1994. The fees for calendar 1993 and
1994 were $150,000 per calendar year.

For the years ended August 31, 1994, 1993 and 1992, the Company
incurred fees to three directors of $235,000, $402,000, and $130,000,
respectively, of which $12,000, $60,000 and $52,000 were unpaid at
August 31, 1994, 1993 and 1992, respectively, related to the Board of
Directors meetings, other committee meetings and events associated with
the investigation performed by the Special Committee of the Board of
Directors, formed in October 1992 to conduct a review of matters
associated with the Stockholder Class Action Litigation and the
Securities Commission Investigation. See Note 13 for further
discussion.

One of the Company's former directors was an attorney whose fees for
legal services provided were approximately $9,000 in 1992.

On May 31, 1989, the Company sold 200,000 shares of its common stock to
the Core Sheth Families for $2.50 per share. Consideration for the
200,000 shares was $50,000 plus a receivable for the balance. The
receivable was paid in full in 1990. As part of this transaction, the
Company issued common stock purchase warrants to the Core Sheth
Families for $50,000 to purchase 400,000 shares of the Company's common
stock at a per share price of $2.75. In connection with the settlement
of the shareholder litigation, the expiration date of these warrants
was extended to 2003. The warrants would have otherwise expired in
1995.

In connection with the settlement of the stockholder class action
litigation, common stock purchase warrants to purchase 2,000,000 shares
of the Company's common stock at a per share price of $5.34 were
granted to the Core Sheth Families. The warrants are exercisable for a
period of ten years from their issuance. A noninterest bearing
receivable in the amount of $500,000 (the cost of the warrants), was
recorded in Shareholder's equity in the fiscal 1993 financial
statements. See Note 12 for a description of the litigation settlement.

F-17
<PAGE> 114

TRISTAR CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, CONTINUED

In recognition that value was received by the Company in return for
extending the expiration date of the warrants to purchase 400,000
shares and the granting of the new warrants to purchase 2,000,000
shares as described above, the Company utilized the Black Scholes
Method to compute the value. The computation resulted in the assignment
of a value of $2,089,000 (net of the purchase price of the warrants of
$500,000). This net value has been recorded as part of "Other assets"
and as an addition to "Additional paid-in capital."

In fiscal 1994, $367,000 of the $2,089,000 was charged to Other income
(expense). The remainder of the balance, which is attributable to the
extension of the Company's distribution agreement with Eurostar and the
favorable terms of the subordinated long term financing of the
shareholder litigation settlement provided by the Core Sheth Families,
will be amortized to expense monthly into fiscal 2006, the expected
period that the Company will benefit from the value received.

The following summarizes related party payables and receivables at
May 31, 1995 and August 31, 1994 and 1993.

<TABLE>
<CAPTION>
May 31, August 31, August 31,
1995 1994 1993
---------- ---------- ----------
(UNAUDITED)

<S> <C> <C> <C>
Total accounts payable--related parties $3,579,000 $1,888,000 $3,924,000

Total accounts receivable--related parties 775,000 438,000 544,000
---------- ---------- ----------
Offset amount 771,000 438,000 435,000
---------- ---------- ----------
2,808,000 1,450,000 3,489,000
---------- ---------- ----------
Payables due members of the Company's
Board of Directors 49,000 12,000 60,000
---------- ---------- ----------
Net related parties payable $2,857,000 $1,462,000 $3,549,000
========== ========== ==========
</TABLE>

In May 1995, the Company sold its cosmetic pencil manufacturing
business, with the exception of the facility and surrounding land, to
Eurostar in consideration for the cost of inventories, payable upon
utilization of such inventories, and a seven-year note for
approximately $600,000. In connection with the sale, Eurostar agreed to
supply all of the Company's requirements for cosmetic pencils at
contractual prices such that, under fiscal 1994 volume levels and
selling prices, the Company would achieve in future periods the same
contribution from cosmetic pencil sales as was achieved in fiscal 1994.
Expenses of $149,000 related to the closing were recorded in May 1995.

F-18
<PAGE> 115

TRISTAR CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, CONTINUED

An impairment of assets reserve of $150,000 was recorded against the
land and facility held for sale in order to value the assets at
estimated net realizable value.

7. CAPITALIZED LEASES:

The Company leases certain equipment under three to five year lease
agreements. Leased property under capital leases at August 31, 1994 and
1993 is as follows:

<TABLE>
<CAPTION>
1994 1993
------- -------

<S> <C> <C>
Machinery and equipment $77,000 $ -
Telecommunications equipment 15,000 31,000
------- -------

92,000 31,000

Less accumulated depreciation 17,000 4,000
------- -------

$75,000 $27,000
======= =======
</TABLE>

Amortization of property classified as capitalized leases is included
with depreciation expense.

The schedule of capital lease payments for the next five years is:

<TABLE>
<CAPTION>
Year Ending
August 31, Amount
----------- --------

<S> <C> <C>
1995 $ 42,000
1996 34,000
1997 21,000
1998 8,000
1999 -
--------

105,000
Less interest at 8.25% to 10% (9,000)
--------

96,000
Less executory cost (4,000)
--------

92,000
Less current portion (38,000)
--------

Long term capital lease obligation $ 54,000
========
</TABLE>

F-19
<PAGE> 116

TRISTAR CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, CONTINUED

8. INCOME TAXES:

In February 1992, the Financial Accounting Standards Board issued
Statement of Financial Accounting Standards No. 109, "Accounting for
Income Taxes" ("SFAS No. 109"). The Company adopted the provisions of
SFAS No. 109 in its financial statements for the year ended August 31,
1992.

Under SFAS No. 109, the liability method is used in accounting for
income taxes. Deferred tax balances are determined based on differences
between financial reporting and tax bases of assets and liabilities and
are measured using the enacted marginal tax rates and laws that will be
in effect when the differences are expected to reverse.

Significant components of the Company's deferred tax assets and
liability as of August 31, 1994 and 1993, are as follows:

<TABLE>
<CAPTION>
1994 1993
----------- -----------

<S> <C> <C>
Deferred tax assets:
Shareholder litigation settlement $ 1,530,000 $ 2,720,000
Accrued litigation expenses 60,000 170,000
Allowances for doubtful accounts 166,000 107,000
Inventory valuation 136,000 106,000
NOL carryforward 695,000 -
AMT credit 107,000 -
All other reserves 102,000 172,000
Valuation allowance (2,636,000) (1,423,000)
----------- -----------

160,000 1,852,000

Deferred tax liability:
Tax over book depreciation 160,000 234,000
----------- -----------

Net deferred tax asset $ - $ 1,618,000
=========== ===========
</TABLE>

The valuation allowance increased by $1,213,000 and $1,423,000 during
fiscal years 1994 and 1993, respectively.

F-20
<PAGE> 117

TRISTAR CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, CONTINUED

The (benefit) provision for income taxes consists of the following for
fiscal years ended August 31, 1994, 1993 and 1992:

<TABLE>
<CAPTION>
1994 1993 1992
----------- ----------- ----------
<S> <C> <C> <C>
Current (benefit) provision:
Federal $(1,714,000) $ (782,000) $1,880,000
State and city - - 127,000
----------- ----------- ----------
(1,714,000) (782,000) 2,007,000

Deferred provision (benefit) 1,619,000 (1,251,000) (246,000)
----------- ----------- ----------

$ (95,000) $(2,033,000) $1,761,000
=========== =========== ==========
</TABLE>

The differences between the statutory federal tax rate and the
Company's effective tax rate are as follows:

<TABLE>
<CAPTION>
1994 1993 1992
----------- ----------- ----------
<S> <C> <C> <C>
Statutory federal tax rate 34.0% 34.0% 34.0%
Increases (decreases):
State taxes, net of federal benefit -- -- 1.5
Deferred tax asset valuation allowance (27.6) (13.9) --
Other (4.3) (.2) (.6)
----------- ----------- ----------

Effective tax rate 2.1% 19.9% 34.9%
=========== =========== ==========
</TABLE>

At August 31, 1994, the Company had a tax net operating loss
carryforward of approximately $1,860,000 which expires in 2009.
Additionally, the Company had alternative minimum tax credits of
approximately $107,000 which have no expiration date.

During the first quarter of fiscal 1995, the Company received tax
refunds of approximately $1,722,000 reducing the refundable taxes
recorded at August 31, 1994.

F-21
<PAGE> 118

TRISTAR CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, CONTINUED

9. SHAREHOLDERS' EQUITY:

On February 21, 1992, the Board of Directors authorized a two-for-one
stock split in the form of a stock dividend payable to shareholders of
record on February 7, 1992. All references in the financial statements
to average numbers of shares outstanding and related prices, per share
amounts and stock option plan data have been adjusted to reflect the
split.

In 1983, the Company adopted an incentive stock option plan (the "1983
Plan"). At its January 15, 1992 Annual Meeting, the Company's
shareholders voted to replace the 1983 Plan with the Amended and
Restated Option Plan (the "1991 Plan"). The 1991 Plan contains
provisions necessary to qualify the plan for exemption from the
six-month short swing profit rules, thus allowing plan participants the
ability to exercise and sell stock received immediately. The 1991 Plan
allows for granting both incentive and nonincentive options, totaling
800,000 shares to key employees.

Options under the 1991 Plan expire ten years from the date of grant. No
shares acquired upon exercise of an option may be sold within six
months from the date of grant of such option. The option price,
determined by the Board of Directors, shall not be less than fair
market value of the common stock at the time of grant, and not less
than 110% of such fair market value if granted to an individual owning
more than 10% of the then issued and outstanding shares of the
Company's common stock. To the extent that the aggregate fair market
value (determined as of the date an option is granted) of shares with
respect to which incentive stock options are exercisable for the first
time by an optionee in any calendar year exceeds $100,000, such options
shall be treated as nonincentive options.

F-22
<PAGE> 119

TRISTAR CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, CONTINUED

<TABLE>
<CAPTION>
Options Outstanding
Shares -----------------------------------
Available Number of Price
To Grant Shares Ranges
--------- --------- ------------------

<S> <C> <C> <C>
Balance at September 1, 1991 320,200 269,600* $0.50 to $3.50

Options granted (60,000) 60,000 $8.125 to $15.875
Options exercised - (107,600) $0.50 to $2.0625
Options canceled/terminated 93,000 (93,000) $1.0625 to $8.1250
-------- --------

Balance at August 31, 1992 353,200 129,000** $0.50 to $15.875

Options granted - -
Options exercised - (2,000) $1.4375
Options canceled/terminated 24,000 (24,000) $0.50 to $15.875
-------- --------

Balance at August 31, 1993 377,200 103,000** $0.50 to $8.125

Options granted (99,420) 99,420 $5.3750
Options exercised - (2,000) $1.4375
Options canceled/terminated - -
-------- --------

Balance at August 31, 1994 277,780 200,420*** $0.50 to $8.125
======== ========
</TABLE>

* 249,600 shares of the outstanding balance were exercisable as
of 9/1/91.

** All options outstanding were exercisable at the respective date.

*** 101,000 shares of the outstanding balance were exercisable as
of 8/31/94.

During 1992, a nonqualified stock option for 66,206 shares at $6.875
per share was granted pursuant to an employment contract with an
officer. The option is exercisable in three annual increments. This
option is not part of the 1991 Plan.

On November 1, 1991, the Company issued 110,000 shares of common stock
at a per share price of $1.125 in connection with the exercise of a
common stock purchase option issued in 1984 to a nonaffiliated company.

The Company has 2,944,406 capital shares reserved for future issuance
as stock options (277,780 available to grant and 266,626 granted, but
not exercised) and warrants (2,400,000) (Notes 6 and 12).

F-23
<PAGE> 120

TRISTAR CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, CONTINUED

10. BENEFIT PLAN:

On January 1, 1992, the Company established a 401(k) Plan for the
benefit of its employees meeting certain eligibility requirements. The
Plan specifies that one-half of the Company's matching contribution is
to be paid by the issuance of common stock at the closing price at the
end of each calendar quarter. During fiscal 1994, 1993 and 1992, a
total of 12,000, 7,000 and 2,000, respectively, of such shares were
issued to the Plan. Contributions to the Plan were $108,000 in 1994,
$88,000 in 1993 and $57,000 in 1992.

11. COMMITMENTS AND CONTINGENCIES:

LEASE COMMITMENTS

At August 31, 1994, the approximate aggregate minimum annual rental
payments under noncancelable operating leases for facilities, excluding
renewals, are as follows:

<TABLE>
<CAPTION>
Year ending
August 31, Amount
----------- ----------

<S> <C>
1995 $ 642,000
1996 434,000
1997 429,000
1998 267,000
1999 53,000
----------

$1,825,000
==========
</TABLE>

Certain of the above leases include escalation charges based on
increases in real estate taxes, utilities and common maintenance
charges.

Rental expense for the years ended August 31, 1994, 1993 and 1992,
amounted to approximately $663,000, $524,000, and $264,000,
respectively.

F-24
<PAGE> 121

TRISTAR CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, CONTINUED

FEDERAL GRAND JURY INVESTIGATION

As previously disclosed, a federal grand jury in Greenville, South
Carolina had been examining the events relating to the previously
undisclosed ownership interest of the Core Sheth Families and other
issues. On March 31, 1994, the Company entered into an agreement with
federal authorities pursuant to which the Company will not be
prosecuted in connection with the matters under investigation by the
grand jury.

The Company and the Core Sheth Families, who hold approximately 60.5%
of the Company's common stock through Starion, have actively cooperated
with the federal inquiry. The Company's agreement with federal
authorities is contingent upon continued cooperation by the Company and
companies affiliated with the Core Sheth Families.

Under the terms of the agreement, Shashikant Sheth, an individual
member of the Core Sheth Families and a director of the Company, pled
guilty to a technical infraction based on his failure to disclose fully
the group's ownership of Company stock. The Company's President, Viren
Sheth, pled guilty to an infraction in connection with aiding and
abetting the disclosure violation. The agreement with federal
authorities acknowledges that these individuals were unaware of the
legal requirement that was violated. These infractions are the lowest
possible level of federal charge, and do not subject them to any term
of incarceration.

Starion pled guilty to a felony in connection with the failure to
disclose its ownership interest. In connection with its plea, Starion
will remit to the United States $5.5 million over a period of five
years.

The United States Attorney's office has advised that Starion, Jay
Sheth, Viren Sheth, the Company and seven other entities affiliated
with the Core Sheth Families had, prior to the agreement with federal
authorities, been the subject of a sealed indictment by a federal grand
jury in connection with these matters. The agreement provided for the
dismissal of the indictment with regard to these parties. Other former
Company officials named in the indictment have also entered into
settlements with the United States Attorney's office.

F-25
<PAGE> 122

TRISTAR CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, CONTINUED

FREITAS AND KENNER

The Company brought an action in the United States District Court for
the Eastern District of New York seeking to recover from Ross Freitas
and Carolyn Kenner short-swing profits resulting from the purchase and
subsequent sale of Company stock in 1989, while both were officers and
directors of the Company. On November 9, 1994, the Court awarded the
Company partial summary judgment with respect to these claims, for
approximately $101,000 against Mr. Freitas and $80,000 against Ms.
Kenner, plus interest running from May 1989. The time for Mr. Freitas
and Ms. Kenner to appeal has not yet expired.

On October 20, 1994, a suit was filed in Florida state court against
the Company, as well as two of its directors, Richard P. Rifenburgh and
Robert R. Sparacino. The plaintiffs in the action are Ross Freitas and
Carolyn Kenner, along with two other individuals, Rose Freitas and
Melissa Freitas. The complaint alleges causes of action by Mr. Freitas
and Ms. Kenner for libel and seeks indemnification in connection with
the work of the Special Committee of the Board of Directors that
investigated, among other things, the failure to disclose the Core
Sheth Families' holdings of Company stock. The complaint also alleges,
on behalf of all four plaintiffs, that the Company's disclosures
relating to these and other matters were fraudulent or negligently
misrepresented. The Company intends to dispute these allegations
vigorously and believes that its ultimate disposition will not have a
material adverse effect on its financial condition.

As previously disclosed, Mr. Freitas had sought to interpose similar
claims in the context of the stockholder class action described below
in 1993, but this motion was dismissed.

OTHER

The Company is subject to ordinary and routine litigation arising out
of the conduct of its business. Management believes that the ultimate
disposition of any of these proceedings will not have a material
adverse effect on the Company's financial condition.

12. CLASS ACTION LITIGATION:

As previously disclosed, between June 15 and July 1, 1992, thirteen
lawsuits were filed against the Company and others in United States
Court for the District of South Carolina. These actions were
consolidated by order of the court, and a consolidated and amended
complaint was filed on October 8, 1992.

F-26
<PAGE> 123

TRISTAR CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, CONTINUED

The complaint, which purported to be a class action on behalf of all
persons (with certain exceptions) who purchased shares of the Company's
common stock between June 25, 1991, and June 11, 1992, alleged
violations of the federal securities laws, as well as common law fraud
and negligence in connection with, among other things, the
nondisclosure of the ownership interest of the Core Sheth Families
prior to 1992. The complaint named as defendants the Company, certain
former and current directors and officers of the Company, several
persons and entities associated with the Core Sheth families, including
Starion, which currently holds approximately 60.5% of the Company's
common stock, and S&J Perfume. The complaint sought actual and punitive
damages in unspecified amounts. On January 11, 1993, the Company filed
its response to the Consolidated and Amended Complaint.

On December 17, 1993, the Company announced court approval of a
settlement agreement regarding these actions, on behalf of the Company
and certain parties, for a cash payment of $9.5 million. The settlement
resulted in a release of claims by the plaintiff class against the
Company, the Sheths and their associates, and Messrs. Bloomfield,
Emery, Karam, and Waters (the "Settling Defendants"). The settlement
does not include three former directors of the Company, Messrs. Derry,
Freitas, or Rosenberg. From proceeds of notes payable based on an
agreement with the Core Sheth Families discussed below, the Company has
paid the total settlement in four installments. The installment
payments made were $1.5 million on August 31,1993, $900,000 on January
20, 1994, $2.6 million on May 31, 1994, and $4.5 million on December
20, 1994.

The Company entered into an agreement with the Core Sheth Families to
borrow $9 million to pay the settlement amounts. With the exception of
$1 million, these borrowings will have a term of ten years, with
principal payable 20% at the end of the eighth year, 20% at the end of
the ninth year, and the remaining 60% payable at the end of the tenth
year. Payment of the $1 million was made in December 1994 with proceeds
from an executive liability and indemnification insurance policy. See
Note 16. These borrowings bear interest at the Long Term Federal rate
and are subordinated to senior lenders. The Core Sheth Families secured
the Company's obligations to pay the settlement amount of $9.5 million
by putting into escrow, as collateral, three million shares of Company
common stock owned by them. In the event that the Company does not meet
its obligation to pay the settlement amount, a portion of the shares in
escrow with a market value sufficient to satisfy the Company's
obligation, would be distributed to the class. The settlement includes
a provision that protects the Company and the settling defendants
against further liability to the class for damages in connection with
related ongoing litigation.

F-27
<PAGE> 124

TRISTAR CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, CONTINUED

In addition, in connection with these transactions, Eurostar, the
Company's primary supplier of fragrance products, which is owned by the
Core Sheth Families, has agreed that it will not provide any notice of
termination of its distribution agreement with the Company for a period
of four years from August 30, 1993. Since two years notice is required
for any termination, the effect of this will be to assure continuation
of the relationship between the Company and Eurostar through at least
the end of fiscal 1999.

In connection with the settlement agreement of the stockholder class
action litigation, common stock purchase warrants to purchase 2,000,000
shares of the Company's common stock at a per share price of $5.34 were
granted to the Core Sheth Families. The warrants are exercisable for a
period of ten years from their issuance. A noninterest bearing
receivable in the amount of $500,000 (the cost of the warrants), was
recorded in Shareholder's Equity in the fiscal 1993 financial
statements. The per share price of the common stock under the warrants
will increase by 10% per year after the first seven years. See Note 12
for a description of the litigation settlement. The Company has also
extended to August 31, 2003, the exercise date of a warrant held by
Starion, a Core Sheth affiliate, to purchase 400,000 shares of Company
common stock. That warrant would have expired on May 31, 1995, absent
such extension.

In recognition that value was received by the Company in return for
extending the expiration date of the warrants to purchase 400,000
shares and the granting of the new warrants to purchase 2,000,000
shares as described above, the Company utilized the Black Scholes
Method to compute the value. The computation resulted in the assignment
of a value of $2,089,000 (net of the purchase price of the warrants of
$500,000.) This net value has been recorded as part of "Other assets"
and as an addition to "Additional paid-in capital" in the accompanying
financial statements.

Additionally, the Company anticipates that it may incur litigation
expenses related to ongoing litigation involving the nonsettling
defendants and a lawsuit against the Company's former auditors separate
from, but related to, the stockholder class action against the Company.

F-28
<PAGE> 125

TRISTAR CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, CONTINUED

13. LITIGATION EXPENSES:

On June 22, 1992, the Board of Directors ("Board") of the Company
established a Special Committee ("Committee") to review, evaluate, and
make recommendations to the Board regarding the possible ownership of a
significant amount of the Company's common stock by persons affiliated
with its principal supplier, and other matters. The Committee reported
their findings and recommendations to the Board on October 26 and 27,
1992.

The Company has recorded legal and professional expenses associated
with the shareholder litigation settlement and other events that were
the subject of the internal investigation by the Committee of $208,000,
$2,758,000 and $1,650,000 in fiscal 1994, 1993, and 1992, respectively.

14. FOREIGN SALES:

The Company exports a significant portion of its sales directly to
foreign customers and also indirectly exports product through customers
based in the United States who ultimately distribute the products in
foreign countries. For the years ended August 31, 1994, 1993, and 1992
and the nine month periods ended May 31, 1995 and 1994, $8,301,000 (18%
of net sales), $11,080,000 (22% of net sales), $8,773,000 (18% of net
sales), $3,042,000 (12.6% of net sales), and $6,278,000 (17.5% of net
sales), respectively, were exported directly to foreign customers. In
fiscal 1994 these customers were primarily located in Mexico. The
volume of the indirect exports, which may be significant, can only be
estimated as customers do not provide that information to the Company.

F-29
<PAGE> 126

TRISTAR CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, CONTINUED

15. QUARTERLY RESULTS (UNAUDITED):

<TABLE>
<CAPTION>
1995 1994
--------------------------------------- --------------------------------------------------------
Quarter Ended Quarter Ended
--------------------------------------- --------------------------------------------------------
Nov. 30 Feb. 28 May 31 Nov. 30 Feb. 28 May 31 Aug. 31
----------- ---------- ----------- ----------- ----------- ----------- -----------

<S> <C> <C> <C> <C> <C> <C> <C>
Net sales $11,512,000 $5,907,000 $ 6,672,000 $15,049,000 $11,255,000 $ 9,557,000 $10,627,000
Gross profit 2,322,000 1,054,000 894,000 2,919,000 2,004,000 1,648,000 1,460,000
Net income (loss) 1,053,000 1,478,000 (1,196,000) (190,000) (971,000) (1,413,000) (1,717,000)
Net income (loss)
per share $ .15 $ (.22) $ (.18) $ (.03) $ (.15) $ (.21) $ (.26)
</TABLE>

<TABLE>
<CAPTION>
1993
-------------------------------------------------------
Quarter Ended
-------------------------------------------------------
Nov. 30 Feb. 28 May 31 Aug. 31
----------- ----------- ----------- ------------
<S> <C> <C> <C> <C>
Net sales $16,425,000 $12,838,000 $ 9,683,000 $ 12,463,000
Gross profit 4,427,000 2,912,000 1,703,000 2,000,000
Net income (loss) 1,521,000 239,000 (8,116,000) (1,803,000)
Net income (loss)
per share $ .22 $ .03 $ (1.23) $ (.27)
</TABLE>

The first and third quarters of fiscal 1995 include $1,250,000 and
$815,000 of insurance reimbursements, respectively.

The fourth quarter of fiscal 1994 includes inventory and allowance for
doubtful account reserve estimation revisions approximating $500,000.

Charged to earnings in the third quarter of fiscal 1993, was the impact
of the shareholder settlement of $9,500,000.

The summation of the quarterly earnings per share may not be equal to
the annual earnings per share due to rounding.

F-30
<PAGE> 127

TRISTAR CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, CONTINUED

16. PROCEEDS OF AN EXECUTIVE LIABILITY AND INDEMNIFICATION POLICY:

On November 22, 1994, the United States District Court for the District
of South Carolina approved the disbursement of $1.25 million to the
Company from the proceeds of an executive liability and indemnification
policy owned by the Company. The Company received the distribution
during the second quarter of fiscal 1995. In accordance with the
financing agreement with the Core Sheth Families, a related party,
$1,000,000 of the proceeds were utilized to repay a portion of the
existing long term subordinated debt. The $1,000,000 repayment was made
in December 1994.

On June 23, 1995, the Company received a court approved distribution of
the balance ($750,000) of the proceeds of the executive liability and
indemnification policy owned by the Company. In addition, the Company
received a distribution of approximately $65,000 of interest earned
during the period the court held the proceeds. This court approved
distribution is subject to appeal by other claimants under the policy.

17. PROPOSED MERGER:

Subject to stockholders' approval, the Company has entered into an
Agreement and Plan of Merger (the "Merger Agreement") dated as of July
1, 1995 under which Eurostar Perfumes, Inc., a Texas Corporation
("Eurostar"), will be merged with and into the Company, with the
Company being the surviving corporation. Eurostar, the Company's major
supplier and a related party, (see Note 6), is owned 100% by the Core
Sheth Families, who indirectly owned 60.5% of the Company's outstanding
common stock. If the merger is consummated, the Company will be the
surviving corporation and will issue approximately 10 million shares of
its common stock in exchange for all of the issued and outstanding
common stock of Eurostar. The merger will be accounted for in a manner
similar to a pooling of interests.

F-31
<PAGE> 128
Independent Auditors' Report

The Board of Directors and Stockholder
Eurostar Perfumes, Inc.:

We have audited the accompanying consolidated balance sheets of Eurostar
Perfumes, Inc. and subsidiaries as of September 30, 1994 and 1993, and the
related consolidated statements of income and retained earnings and cash flows
for the years then ended. These consolidated financial statements are the
responsibility of the Company's management. Our responsibility is to express
an opinion on these consolidated financial statements based on our audits.

We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for our opinion.

As discussed in note 3 to the consolidated financial statements, approximately
85% and 99% of the Company's 1994 and 1993 sales, respectively, are to Tristar
Corporation, a related party.

In our opinion, the consolidated financial statements referred to above present
fairly, in all material respects, the financial position of Eurostar Perfumes,
Inc. and subsidiaries as of September 30, 1994 and 1993, and the results of
their operations and their cash flows for the years then ended in conformity
with generally accepted accounting principles.

As discussed in note 1(c) to the consolidated financial statements, the Company
changed its method of accounting for inventories in 1994.

KPMG Peat Marwick LLP

San Antonio, Texas
November 18, 1994

<PAGE> 129
Independent Accountants' Review Report

The Board of Directors and Stockholder
Eurostar Perfumes, Inc.:

We have reviewed the accompanying consolidated balance sheet of Eurostar
Perfumes, Inc. and subsidiaries as of March 31, 1995, and the related
consolidated statements of income and retained earnings and cash flows for the
six-month periods ended March 31, 1995 and 1994, and for the period from March
5, 1992 (inception) through September 30, 1992. These consolidated financial
statements are the responsibility of the Company's management.

We conducted our review in accordance with standards established by the American
Institute of Certified Public Accountants. A review of interim financial
information consists principally of applying analytical procedures to financial
data and making inquires of persons responsible for financial and accounting
matters. It is substantially less in scope than an audit conducted in
accordance with generally accepted auditing standards, the objective of which is
the expression of an opinion regarding the financial statements taken as a
whole. Accordingly, we do not express such an opinion.

Based on our review, we are not aware of any material modifications that should
be made to the consolidated financial statements referred to above for them to
be in conformity with generally accepted accounting principles.

KPMG PEAT MARWICK LLP

San Antonio, Texas
July 14, 1995

F-33

<PAGE> 130

EUROSTAR PERFUMES, INC. AND SUBSIDIARIES

Consolidated Balance Sheets

<TABLE>
<CAPTION>
March 31, September 30, September 30,
1995 1994 1993
----------- ------------- -------------
(unaudited)
<S> <C> <C> <C>
Current assets:
Cash $ 740,058 $ 1,430,924 $ 420,523
U.S. treasury note, resticted (note 2) - - 100,156
Trade accounts receivable:
Affiliate (note 3) 1,893,490 1,881,614 5,856,190
Non-affiliate 1,675,858 868,560 31,450
Inventories (notes 3 and 4) 4,987,599 6,644,423 5,275,121
Deferred income taxes (note 7) 294,000 203,092 88,322
Other current assets 152,805 167,186 113,858
----------- ----------- -----------
Total current assets 9,743,810 11,195,799 11,885,620

Deferred income taxes (note 7) - - 75,255
Net property, plant and equipment (note 5) 8,001,663 8,440,174 7,952,906
----------- ----------- -----------
$17,745,473 $19,635,973 $19,913,781
=========== =========== ===========
Current liabilities:
Current installments of note payable
to parent company (note 6) $ 1,500,000 $ 2,050,000 $ 2,500,000
Trade accounts payable:
Non-affiliate accounts 1,044,227 2,288,209 2,970,136
Affiliate accounts (note 3) 147,408 1,137,156 1,771,144
Customer advances 192,765 83,169 122,589
Income taxes payable 602,737 2,027,666 2,247,244
Accrued expenses (note 6) 888,442 853,069 259,271
----------- ----------- -----------
Total current liabilities 4,375,579 8,439,269 9,870,384

Note payable to parent company, excluding
current installments (note 6) 5,015,701 4,165,701 6,468,684
Deferred income taxes (note 7) 409,000 159,092 -
Other liabilities 223,057 269,118 134,545
----------- ----------- -----------
Total liabilities 10,023,337 13,033,180 16,473,613
----------- ----------- -----------

Stockholder's equity:
Common stock, $.001 par value.
Authorized, issued and outstanding
1,000,000 shares 1,000 1,000 1,000
Additional paid-in capital 99,000 99,000 99,000
Retained earnings 7,622,136 6,502,793 3,340,168
----------- ----------- -----------
Total stockholder's equity 7,722,136 6,602,793 3,440,168

Commitments and contingencies (notes 3 and 8)
----------- ----------- -----------
$17,745,473 $19,635,973 $19,913,781
=========== =========== ===========
</TABLE>

F-34

See accompanying notes to consolidated financial statements.

<PAGE> 131

EUROSTAR PERFUMES, INC. AND SUBSIDIARIES

Consolidated Statements of Income and Retained Earnings

Six months ended March 31, Years ended September 30, Period from
---------------------------- ----------------------------- March 5, 1992 through
3/31/95 3/31/94 1994 1993 September 30, 1992
----------- ----------- ----------- ----------- ---------------------
(unaudited) (unaudited) (unaudited)
<S> <C> <C> <C> <C> <C>
Net sales (notes 3 and 9) $17,410,449 $16,371,092 $31,481,083 $28,144,851 $ 216,038

Cost of goods sold (note 3) 12,139,545 9,397,860 19,932,841 17,687,588 198,755
----------- ----------- ----------- ----------- ---------

Gross profit 5,270,904 6,973,232 11,548,242 10,457,263 17,283

Selling, general and administrative
expenses (note 3) 3,369,615 2,749,953 5,944,374 3,935,640 743,069
----------- ----------- ----------- ----------- ---------

Operating income (loss) 1,901,289 4,223,279 5,603,868 6,521,623 (725,786)

Other income (expense):
Interest expense (144,933) (161,199) (337,712) (341,630) (38,173)
Other income 33,257 1,846 41,046 7,801 -
----------- ----------- ----------- ----------- ---------

Income (loss) before income taxes 1,789,613 4,063,926 5,307,202 6,187,794 (763,959)

Income tax expense (benefit) (note 7) 670,270 1,631,227 2,144,577 2,349,011 (265,344)
----------- ----------- ----------- ----------- ---------

Net income (loss) 1,119,343 2,432,699 3,162,625 3,838,783 (498,615)

Retained earnings (deficit) at
beginning of period 6,502,793 3,340,168 3,340,168 (498,615) -
----------- ----------- ----------- ----------- ---------

Retained earnings (deficit) at
end of period $ 7,622,136 $ 5,772,867 $ 6,502,793 $ 3,340,168 (498,615)
=========== ============ =========== =========== =========

Net Income (loss) per common share $ 1.11 $ 2.43 $ 3.16 $ 3.83 (.49)
=========== ============ =========== =========== =========

Number of common shares outstanding 1,000,000 1,000,000 1,000,000 1,000,000 1,000,000
=========== ============ =========== =========== =========
</TABLE>

F-35

See accompanying notes to consolidated financial statements.

<PAGE> 132

EUROSTAR PERFUMES, INC. AND SUBSIDIARIES

Consolidated Statements of Cash Flows

<TABLE>
<CAPTION>
Period from
March 5, 1992
Six months ended March 31, Years ended September 30, through
1995 1994 1994 1993 September 30, 1992
(unaudited) (unaudited) (unaudited)
----------- ----------- ---------- ---------- -----------------
<S> <C> <C> <C> <C> <C>
Cash flows from operating activities:
Net income (loss) $ 1,119,343 $ 2,432,699 $ 3,162,625 $ 3,838,783 $ (498,615)
Adjustments to reconcilie net income (loss) to net
cash provided by (used in) operating activities:
Allowance for obsolescence and other adjustments 242,388 56,254 239,774 110,000 -
Deferred income tax expense 159,000 70,577 119,577 101,767 (265,344)
Depreciation 531,635 447,899 968,607 685,258 -
Changes in operating assets and liabilities:
Trade accounts receivable (819,174) 3,277,607 3,137,466 (5,671,110) (216,530)
Inventories 1,414,436 (241,698) (1,609,076) (3,870,813) (1,514,308)
Other current assets 14,381 (10,642) (53,328) (47,402) (66,456)
Trade accounts payable (2,233,730) (2,576,959) (1,315,915) 2,097,425 2,643,855
Customer advances 109,596 (122,589) (39,420) 122,589 -
Income taxes payable (1,424,929) (194,036) (219,578) 2,247,244 -
Accrued expenses 35,373 387,560 593,798 243,566 15,705
Other liabilities (46,061) 166,781 134,573 - -
----------- ----------- ----------- ----------- ------------

Net cash provided by (used in) operating
activities (897,742) 3,693,453 5,119,103 (142,693) 98,307
----------- ----------- ----------- ----------- ------------

Cash flows from investing activities:
Acquisition of property, plant and equipment (93,124) (953,937) (1,455,875) (3,211,640) (5,291,979)
Acquisition of U.S. Treasury note - - - (100,156)
Proceeds from sale of U.S. Treasury note - - 100,156 - -
----------- ----------- ----------- ----------- ------------
Net cash used in investing activities (93,124) (953,937) (1,355,719) (3,211,640) (5,392,135)
----------- ----------- ----------- ----------- ------------

Cash flows from financing activities:
Proceeds from note payable to bank - - - 2,000,000 4,500,000
Repayment of note payable to bank - - - (6,500,000) -
Proceeds from issuance of common stock - - - - 100,000
Proceeds from note payable to parent company 2,000,000 171,984 - 7,658,691 1,309,993
Payments of note payable to parent company (1,700,000) (2,500,000) (2,752,983) - -
----------- ----------- ----------- ----------- ------------

Net cash provided by (used in) financing
activities 300,000 (2,328,016) (2,752,983) 3,158,691 5,909,993
----------- ----------- ----------- ----------- ------------

Net increase (decrease) in cash (690,866) 411,500 1,010,401 (195,642) 616,165

Cash at beginning of year 1,430,924 420,523 420,523 616,165 -
----------- ----------- ----------- ----------- ------------
Cash at end of year $ 740,058 $ 832,023 $ 1,430,924 $ 420,523 $ 616,165
=========== =========== =========== =========== ============

Supplemental disclosure of cash flow information:
Income taxes paid $ 1,905,650 $ 1,465,000 $ 2,295,775 $ - $ -
=========== =========== =========== =========== ============
Interest paid $ 15,580 $ 37,870 $ 304,915 $ 237,493 $ -
=========== =========== =========== =========== ============
</TABLE>

F-36

See accompanying notes to consolidated financial statements.

<PAGE> 133

EUROSTAR PERFUMES, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements

(Data with respect to March 31, 1995 and for the six month periods ended March
31, 1995 and 1994, and for the period from March 5, 1992 (inception) to
September 30, 1992 is unaudited)

(1) Summary of Significant Accounting Policies

(a) Description of Business

Eurostar Perfumes, Inc. (the "Company"), is a wholly-owned
subsidiary of Transvit Manufacturing Corporation ("Transvit"), a
foreign company owned by the Core Sheth Families. The Company was
incorporated on March 5, 1992. The primary business of the Company
is to manufacture perfumes at its plant located in Pleasanton,
Texas. The Company purchases significant amounts of inventory
from various European companies, and the Company is not dependent
on a single supplier or only a few suppliers. As discussed in
note 3, the Company has significant transactions with related
parties.

(b) Principles of Consolidation

The consolidated financial statements include the financial
statements of Eurostar Perfumes, Inc. and its wholly-owned
subsidiaries, American Star Corporation, which in 1993 marketed
the Company's products to customers located primarily in South
America, and Southern Star Sales, Inc. (Southern Star), a foreign
sales corporation which markets the Company's products
internationally. American Star Corporation became dormant in
fiscal year 1994 as its sales activity was transferred to Southern
Star. All significant intercompany balances and transactions have
been eliminated in consolidation.

The consolidated financial statements as of March 31, 1995 and for
the six month periods ended March 31, 1995 and 1994 and for the
period from March 5, 1992 (inception) through September 30, 1992
are unaudited. In the opinion of management, all adjustments
(consisting of normal recurring accruals) considered necessary for
a fair presentation have been included. Operating results for the
six month period ended March 31, 1995 are not necessarily
indicative of the results that may be expected for the year ending
September 30, 1995.

The unaudited consolidated financial statements have been prepared
in accordance with generally accepted accounting principles for
interim financial information pursuant to the Securities and
Exchange Commission's Proxy Rules (Regulation 14A).

(d) Inventories

Inventories are valued at the lower of cost or market.

In 1994, the Company adopted the last in, first-out (LIFO) method
of costing inventory. Previously, the first-in, first-out (FIFO)
method of costing inventory was used. Management believes that
the LIFO method has the effect of minimizing the impact of price
level changes on inventory valuations and generally matches
current costs against current revenues in the consolidated
statement of income. The effect of the change was to reduce net
income by approximately $185,000, net of income taxes, from that
which would otherwise have been reported. There is no cumulative
effect on prior years since the ending inventory as previously
reported is the beginning inventory for LIFO purposes.
Accordingly, proforma results of operations for the prior year had
LIFO been followed is not determinable.

F-37
<PAGE> 134

EUROSTAR PERFUMES, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements

(1) Summary of Significant Accounting Policies (continued)

(e) Other Current Assets

Other current assets consist principally of deposits for Texas
worker's compensation insurance.

(f) Property, Plant and Equipment

Property, plant and equipment are stated at cost. Depreciation is
calculated on the straight-line method over the following
estimated useful lives:

Buildings and improvements 40 years
Computer equipment and software 5 years
Machinery and equipment 5 - 7 years
Office equipment, fixtures and vehicle 3 - 7 years

Maintenance and repairs are charged to operations

(g) Foreign Currency Transactions

The Company purchases significant amounts of inventory from
foreign suppliers. Such inventory is recorded using currency
exchange rates in effect on the date of purchase. Gains and
losses on the settlement of accounts payable for such purchases
are recorded based upon the currency exchange rates in effect on
the date of settlement. Gains and losses on accounts payable to
be settled subsequent to September 30, 1994 and 1993 have been
provided based upon the currency exchange rates in effect on
September 30, 1994 and 1993. The net gain (loss) on transactions
in foreign currencies for the years ended September 30, 1994 and
1993 was $(59,058) and $5,205.

(h) Revenue Recognition

Revenue is recognized at the time of shipment for all products.

(i) Income Taxes

Deferred tax assets and liabilities are recognized for the future
tax consequences attributable to differences between the financial
statement carrying amounts of existing assets and liabilities and
their respective tax bases. Deferred tax assets and liabilities
are measured using enacted tax rates expected to apply to taxable
income in the years in which those temporary differences are
expected to be recovered or settled. The effect on deferred tax
assets and liabilities of a change in tax rates is recognized in
income in the period that includes the enactment date.

(j) Net (Loss) Income Per Share

Net (loss) income per share is computed based on the number of
common shares outstanding during each period.

F-38 (Continued)
<PAGE> 135

EUROSTAR PERFUMES, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements

(2) U.S. Treasury Note

U.S. treasury note represented a deposit held by the Bureau of Alcohol,
Tobacco and Firearms for the permit maintained by the Company to store
and dispense the alcohol used in production. The security consisted of a
$100,000 face value U.S. treasury note bearing interest at 4.25% per
annum. The deposit was returned and sold in 1994.

(3) Related Party Transactions

In May 1995, the Company purchased Tristar Corporation's ("Tristar")
cosmetic pencil manufacturing business, including all related equipment
and inventory, in consideration for a seven year $600,000 note payable
and cash equal to the cost of inventories payable upon utilization of
such inventories.

Tristar, a major customer of the Company, is located in the United States
and is principally engaged in the marketing and wholesale distribution of
alternatives to designer fragrances in North America. Tristar is a
publicly traded company in which the Core Sheth Families have a majority
ownership interest. Additionally, Tristar and the Company have the same
president and chief executive officer. Included in affiliate trade
accounts receivable at September 30, 1994 and 1993 and March 31, 1995, is
$1,437,466, $5,380,990 and $1,629,164, respectively, due from Tristar.
For the years ended September 30, 1994 and 1993 and the six months ended
March 31, 1995 and 1994, approximately 85%, 99%, 66%, and 94%,
respectively, of the Company's sales were to Tristar.

Approximately 2% of the Company's sales for the year ended September 30,
1994 and the six months ended March 31, 1995 were to foreign based
affiliates located principally in South America. Such sales were not
significant for the year ended September 30, 1993 and the six months
ended March 31, 1994.

For the years ended September 30, 1994 and 1993 and the six months ended
March 31, 1995 and 1994, the Company purchased approximately $5,788,000,
$6,605,000, $3,241,000, and $3,290,000, respectively, of inventory and
other items from affiliates.

In accordance with a design/consultant fee contract with Tristar whereby
the Company provides certain graphics and design consulting services, the
Company charged Tristar $150,000, $112,500, $75,000, and $75,000, for the
years ended September 30, 1994 and 1993 and the six months ended March
31, 1995 and 1994, respectively. The Company entered into a computer
services and support agreement with Tristar whereby the Company provides
access to hardware and software. The company charged Tristar $55,000 and
$55,000 for the year ended September 30, 1994 and the six months ended
March 31, 1995, respectively. These amounts have been offset against
selling, general and administrative expenses in the accompanying
consolidated statements of income and retained earnings.

Included in trade accounts receivable at September 30, 1993 is $475,200
of net advances due from Eurostar Corporation ("Corp."), a wholly-owned
subsidiary of Transvit, which employed certain executives of the Company
and provided management services to the Company. Management fees paid to
Corp. for the year ended September 30, 1993 totaled $978,896 and are
included in selling, general and administrative expenses in the
accompanying consolidated statements of income and retained earnings.
Management fees were equal to the costs incurred by Corp., which include
primarily payroll and related items. Effective October 1, 1993, the
employees of Corp. were transferred to the Company.

F-39 (Continued)
<PAGE> 136

EUROSTAR PERFUMES, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements

(3) Related Party Transactions (continued)

On October 23, 1992, the Company and a certain affiliate entered into a
distribution agreement with Tristar under which the Company is obligated
to supply Tristar with fragrance products. The distribution agreement
extends two years beyond any notice of termination given by the Company.
In August 1993, the Company agreed that it will not provide any notice of
termination of its distribution agreement with Tristar for a period of
four years. The effect of this agreement is to assure the continuation
of the relationship between the Company and Tristar through at least
1999. As a major customer of the Company, Tristar's ability to meet its
obligations will significantly impact the level of operations of the
Company.

(4) Inventories

Inventories consist of the following:

<TABLE>
<CAPTION>
March 31, September 30,
------------- ----------------------
1995 1994 1993
------------- --------- ---------
(unaudited)
<S> <C> <C> <C>
Raw Materials $ 4,584,444 5,813,830 4,939,036
Finished Goods 1,493,102 1,144,802 99,444
Work-in-process 283,215 316,565 346,641
------------- --------- ---------
6,360,761 7,275,197 5,385,121
Less: Allowance for obsolescence
and other adjustments 592,162 349,774 110,000
Allowance for LIFO valuation 781,000 281,000 -
------------- --------- ---------

$ 4,987,599 6,644,423 5,275,121
============= ========= =========
</TABLE>

(5) Property, Plant and Equipment

Property, plant and equipment consists of the following:

<TABLE>
<CAPTION>
March 31, September 30,
------------- ----------------------
1995 1994 1993
------------- --------- ---------
(unaudited)
<S> <C> <C> <C>
Machinery and equipment $ 4,721,822 4,728,847 4,059,594
Building and improvements 3,783,373 3,783,373 3,755,198
Computer equipment and software 1,199,047 1,110,158 468,340
Office equipment, fixtures and vehicle 450,382 438,990 322,362
Land 32,670 32,670 32,670
------------- --------- ---------
10,187,294 10,094,038 8,638,164
Less: Accumulated depreciation 2,185,632 1,653,864 685,258
------------- --------- ---------

$ 8,001,662 8,440,174 7,952,906
============= ========= =========
</TABLE>

(6) Notes Payable

On August 1, 1993, the Company entered into a line of credit promissory
note agreement (the "LOC") with its parent company, Transvit, whereby
funds of up to $9,000,000 were made available to the Company. Proceeds
from the LOC in 1993 were used to pay certain bank debt and the
outstanding balance of a $2,000,000 line of credit demand promissory note
with Transvit. Interest is payable annually and bears interest at 4.5%
per annum. The total amount outstanding on the LOC at September 30, 1994
and 1993 is $6,215,701 and $8,968,684, respectively.

F-40 (Continued)
<PAGE> 137

EUROSTAR PERFUMES, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements

(6) Notes Payable- (continued)

The current installments of the LOC as of September 30, 1994 and 1993,
$2,050,000 and $2,500,000, respectively, are based on management's best
estimate of amounts to be paid during the next fiscal year. As discussed
below, the Company recently entered into a secured credit facility which
under its terms resticts the repayment of the Transvit line of credit to
payments no more than the greater of (i) $3,500,000 in the first fiscal
year or $1,500,000 per fiscal year thereafter, or (ii) fifty percent
(50%) of the Company's cash flow for fiscal years after the first year.
Accrued interest payable to Transvit of $48,471 and $58,312 as of
September 30 1994 and 1993, respectively, is included in accrued expenses
in the accompanying consolidated balance sheets.

On June 27, 1995, the Company entered into a $5,200,000 credit facility
which consists of term loans totaling $3,700,000 and a revolving credit
commitment of $1,500,000 bearing interest at the prime rate plus 1.75%
(9% at June 27, 1995) per annum and additional fees. In early July
1995, a $3,500,000 term loan was drawn down. The term loan calls for
equal monthly installments and matures in 2002. Borrowings under the
revolving line of credit are limited to forty (40%) of eligible inventory
as define therein. The revolving line of credit expires in June 1997
with options to renew annually thereafter. The credit facility is secured
by substantially all of the Company's assets. The agreement contains a
material adverse change provision, as well as certain restrictions and
conditions among which are limitations on cash dividends, capital
expenditures and repayments to Transvit under the Company's other line of
credit.

(7) Income Taxes

Income tax expense consists of the following:
<TABLE>
<CAPTION>
Current Deferred Total
------- -------- -----
<S> <C> <C> <C>
Year Ended September 30,
1994
U.S. Federal $1,776,000 110,955 1,886,955
State 249,000 8,622 257,622
---------- ------- ---------
$2,025,000 119,577 2,144,577
========== ======= =========
Year Ended September 30,
1993
U.S. Federal $1,987,642 94,430 2,082,072
State 259,602 7,337 266,939
---------- ------- ---------
$2,247,244 101,767 2,349,011
========== ======= =========
</TABLE>

Income tax expense for the years ended September 30, 1994 and 1993
differed from the amounts computed by applying the U.S. federal income
tax rate of 35 percent to income before income taxes as a result of the
following:

<TABLE>
<CAPTION>
1994 1993
---- ----
<S> <C> <C>
Computed expected tax expense $1,857,521 2,165,728
Increase (decrease) in income taxes
resulting from:
State income taxes, net of federal income
tax benefit 161,850 171,337
Penalty 60,000 68,374
Foreign sales corporation commissions
not subject to income taxes (37,000) -
Other, net 102,306 (563428)
---------- ---------
Total income tax expense $2,144,577 2,349,011
========== =========
</TABLE>

F-41 (Continued)
<PAGE> 138

EUROSTAR PERFUMES, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements

(7) Income Taxes - (continued)

The tax effects of temporary differences that give rise to significant
portions of the deferred tax assets and deferred tax liabilities at
September 30, 1993 and 1994 are presented below:

<TABLE>
<CAPTION>
1994 1993
---- ----
<S> <C> <C>
Deferred tax assets:
Inventories, principally due to allowance
for obsolescence $143,759 40,304
Start-up and organizational costs 162,257 214,428
Compensated absences, principally due
to accrual for financial reporting
purposes 41,573 -
Related party interest, principally due to
accrual for financial reporting purposes 17,760 48,018
Other 683 -
------- -------
Total deferred tax assets 366,032 302,750

Deferred tax liabilities:
Plant and equipment, principally due to
differences in deprecation and
capitalized interest 322,032 139,173
------- -------
Net deferred tax asset $44,000 163,577
======= =======
</TABLE>

Based upon the level of historical taxable income and projections for
future taxable income, including the reversal of existing taxable
temporary differences, over the periods which the deferred tax assets are
deductible, management believes it is more likely than not the Company
will realize the benefits of these deductible differences.

(8) Operating Leases

The Company has several noncancelable operating leases, primarily for
equipment, office space, and office furniture that expire over the next
three years. Rental expense for operating leases for the year ended
September 30, 1994 and 1993 was $97,838 and $69,653, respectively.
Future minimum lease payments under noncancellable operating leases (with
initial or remaining lease terms in excess of one year) as of September
30, 1994 are:

<TABLE>
<CAPTION>
<S> <C>
Year ending September 30:
1995 $ 75,020
1996 50,955
1997 8,973
----------
$ 134,948
==========
</TABLE>
(9) Export Sales and Related Receivables

Export sales, primarily to South America, for the year ended September
30, 1994 and for the six months ended March 31, 1995 and 1994 were
approximately $4,756,000, $6,000,000, and $500,000, respectively.
Included in trade accounts receivable at September 30, 1994 and for the
six months ended March 31, 1995 and 1994 is approximately $1,125,000,
$2,000,000, and $330,000, respectively, due from foreign customers.
Export sales for the year ended September 30, 1993 were not significant.

F-42
<PAGE> 139
APPENDIX A
AGREEMENT AND PLAN OF MERGER

Among

EUROSTAR PERFUMES, INC.,

TRANSVIT MANUFACTURING CORPORATION

and

TRISTAR CORPORATION

July 1, 1995
<PAGE> 140
TABLE OF CONTENTS

<TABLE>
<S> <C> <C> <C>
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

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
</TABLE>

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<PAGE> 141
<TABLE>
<S> <C> <C> <C>
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

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

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

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
</TABLE>

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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.

<PAGE> 143
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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<PAGE> 145
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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<PAGE> 146
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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<PAGE> 147
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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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;

(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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<PAGE> 164
(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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<PAGE> 165
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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<PAGE> 166
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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<PAGE> 167
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
--------------------------------------------

A-26

<PAGE> 168
[LETTERHEAD]

August 3, 1995

Mr. Richard P. Rifenburgh
Chairman of the Board of Directors
Mr. Robert R. Sparacino
Vice-Chairman of the Board of Directors
Acquisition Committee
TRISTAR CORPORATION
12500 San Pedro Avenue, Suite 500
San Antonio, TX 78216

Gentlemen:

You have requested Howard Frazier Barker Elliott, Inc. ("HFBE") to
render its opinion as to the fairness, from a financial point of view, to
TRISTAR CORPORATION, a Delaware corporation ("Tristar" or the "Company") and its
stockholders, other than the Core Sheth Families and their affiliates, of the
consideration to be paid by Tristar in the proposed merger (the "Merger") of
Eurostar Perfumes, Inc ("Eurostar") with and into Tristar pursuant to an
Agreement and Plan of Merger (the "Merger Agreement") among Tristar, Eurostar,
and Transvit Manufacturing Corporation. In the Merger, Tristar will be the
surviving corporation and all issued and outstanding common stock of Eurostar
will be converted into the right to receive an aggregate of approximately
9,977,810 shares of Tristar common stock.

As part of our financial advisory activities, HFBE engages in the
valuation of businesses and securities in connection with mergers and
acquisitions, private placements, and valuations for estate, corporate and other
purposes. We are experienced in these activities and have performed assignments
similar in nature to that requested by you on numerous occasions. The opinion of
HFBE is solely for the use of the acquisition committee and cannot be used for
any other purpose without our prior written consent.

In rendering its written opinion, HFBE: (i) reviewed Tristar's Annual
Report, Form 10-K and related financial information for the fiscal year ended
August 31, 1994, and Form 10-Q and related financial information for the fiscal
quarters ended November 30, 1994, February 28, 1995 and May 31, 1995; (ii)
reviewed Eurostar's financial information for the fiscal year ended September
30, 1994, and related financial information for the fiscal quarters ended
December 31, 1994, and March 31, 1995; (iii) reviewed certain information,
including financial forecasts, relating to the business, earnings, cash flow,
assets and prospects of Eurostar and Tristar furnished to HFBE by Eurostar and
Tristar; (v) conducted discussions with members of senior management of Eurostar
and Tristar concerning their respective business and prospects; (v) reviewed the
historical market prices and trading activity for Tristar's Common Stock and
compared them with that of certain companies which HFBE deemed to be reasonably
similar to Tristar; (vi) compared the results of operations of Eurostar and
Tristar with that of certain companies which it deemed to be reasonably similar
to Eurostar and Tristar, respectively; (vii) considered the pro forma effect of
the Merger on certain of Tristar's income statement and balance sheet items;
(vii) reviewed the Merger Agreement, and (ix) reviewed such other matters as
HFBE deemed necessary, including an assessment of general economic, market and
monetary conditions.

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<PAGE> 169

Acquisition Committee
TRISTAR CORPORATION
August 3, 1995
Page two

In preparing its opinion, HFBE relied on the accuracy and completeness
of all information supplied or otherwise made available to HFBE by Tristar and
Eurostar and assumed that financial forecasts had been reasonably prepared on
bases reflecting the best currently available estimates and judgements of the
managements of Tristar and Eurostar as to the expected future financial
performance of their respective companies. HFBE did not independently verify
such information or assumptions, including financial forecasts, or undertake an
independent appraisal of the assets of Tristar or Eurostar. HFBE's opinion is
based upon market, economic, financial and other conditions as they exist and
can be evaluated as of the date of the opinion. HFBE's opinion does not
constitute a recommendation to any stockholder of Tristar as to how any such
stockholder should vote on the Merger. The opinion does not address the relative
merits of the Merger and any other transaction or business strategies discussed
by the Independent Committee as alternatives to the Merger or the decision of
the Tristar Board to proceed with the Merger. No opinion is expressed by HFBE as
to the price at which the securities to be issued in the Merger to the
stockholder or Eurostar may trade at any time following the Merger.

HFBE assumed that there had been no material change in Tristar's or
Eurostar's financial condition, results of operations, business or prospects
since the date of the last financial statements made available to HFBE. HFBE
relied on advice of counsel to Tristar as to all legal matters with respect to
Tristar, the Merger and the Merger Agreement and upon Tristar with respect to
the accounting treatment to be accorded in the transaction. In addition, HFBE
did not make an independent evaluation appraisal or physical inspection of the
assets or individual properties of Tristar or Eurostar, nor was it furnished
with any such appraisals.

The preparation of a fairness opinion involves various determinations
as to the most appropriate and relevant quantitative and qualitative methods of
financial analyses and the application of those methods to the particular
circumstances and, therefore, such an opinion is not readily susceptible to
partial analysis or summary description. Furthermore, in arriving at its
fairness opinion, HFBE did not attribute any particular weight to any analysis
or factor considered by it, but rather made qualitative judgements as to the
significance and relevance of each analysis or factor. Accordingly, HFBE
believes that its analysis must be considered as a whole and that considering
any portion of such analysis and of the factors considered, without considering
all analyses and factors, could create a misleading or incomplete view of the
process underlying its opinion. In its analyses, HFBE made numerous assumptions
with respect to industry performance, general business and economic conditions
and other matters, many of which are beyond the control of Tristar and Eurostar.
Any estimates contained in these analyses are not necessarily indicative of
actual values or predictive of future results or values which may be
significantly more or less favorable than as set forth therein. In addition,
analyses relating to the value of the businesses do not purport to be appraisals
or to reflect the prices at which businesses may actually be sold.

Neither HFBE nor its employees have any present or contemplate future
interest in the company which might tend to prevent them from making a fair and
unbiased opinion.

Subject to and based upon the foregoing, it is our opinion that the
consideration to be paid by Tristar in the proposed Merger is fair, from a
financial point of view, to Tristar and its stockholders other than the Core
Sheth Families and their affiliates.

Sincerely,

HOWARD FRAZIER BARKER ELLIOTT, INC.

By: /s/Alex W. Howard By: /s/William H. Frazier, ASA
-------------------------- -----------------------------
Alex W. Howard, CFA, ASA William H. Frazier, ASA

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<PAGE> 170
APPENDIX C

ARTICLE IV

CAPITAL STOCK

Section 1. Classes and Shares Authorized. The authorized
capital stock of the Corporation shall consist of 30,000,000 shares of
Common Stock, $.01 par value per share (hereinafter referred to as
either the "Common Shares" or "Common Stock") and 1,000,000 shares of
Preferred Stock, $.05 par value per share (hereinafter referred to as
either the "Preferred Shares" or "Preferred Stock").

Section 2. Preferred Stock. The shares of Preferred Stock
shall be issuable from time to time in one or more series, with
respect to each of which series the Board of Directors shall be
authorized, without further approval from the shareholders of the
Corporation, to fix:

(a) the designation of the series;

(b) the number of shares of each series, which number the
Board of Directors may increase or decrease (but not below the number
of shares thereof then outstanding);

(d) the dates at which dividends, if declared, shall be
payable, and the dates from which the dividends shall be cumulative;

(e) the redemption rights, if any, for shares of the series;

(f) the terms and amount of any sinking fund provided for the
purchase or redemption of shares of the series;

(g) the amounts payable on shares of the series in the event
of any voluntary or involuntary liquidation, dissolution or winding up
of the affairs of the Corporation;

(h) whether the shares of the series shall be convertible
into Common Stock or other securities, and, if so, the conversion
price or prices, any adjustments thereof, and all other terms and
conditions upon which such conversion may be made;

(i) restrictions on the issuance of the shares of the same
series or of any other class or series; and

(j) the voting rights, if any, exercisable by the holders of
the shares of such series. Shareholders shall have no preemptive
rights.

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<PAGE> 171

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TRISTAR CORPORATION

PROXY -- SPECIAL MEETING OF STOCKHOLDERS -- AUGUST 30, 1995
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS

The undersigned stockholder of TRISTAR CORPORATION (the "Company")
hereby appoints Viren S. Sheth and Loren M. Eltiste, or either of
them, proxies of the undersigned with full power of substitution
to vote at the Special Meeting of Stockholders of the Company to
be held on August 30, 1995, at 2:00 p.m., San Antonio time, at
Tristar's corporate offices at 12500 San Pedro Avenue, Suite 500,
San Antonio, Texas, and at any adjournment thereof, the number of
votes which the undersigned would be entitled to cast if
personally present:

P (1) PROPOSAL TO APPROVE AND ADOPT AN AGREEMENT AND PLAN OF
MERGER, DATED AS OF JULY 1, 1995, AMONG THE COMPANY,
EUROSTAR PERFUMES, INC. ("EUROSTAR") AND TRANSVIT
R MANUFACTURING CORPORATION, PURSUANT TO WHICH (I) EUROSTAR
WILL BE MERGED WITH AND INTO THE COMPANY, AND
(II) ALL THE ISSUED AND OUTSTANDING SHARES OF EUROSTAR
O COMMON STOCK WILL BE CONVERTED INTO THE RIGHT TO RECEIVE
AN AGGREGATE OF 9,977,810 SHARES OF TRISTAR COMMON STOCK,
AS MORE FULLY DESCRIBED IN THE ACCOMPANYING PROXY STATEMENT.
X
/ / FOR / / AGAINST / / ABSTAIN

Y (2) PROPOSAL TO AMEND THE CERTIFICATE OF INCORPORATION OF THE
COMPANY TO INCREASE THE AUTHORIZED NUMBER OF SHARES OF
COMMON STOCK FROM 10,000,000 TO 30,000,000 SHARES.

/ / FOR / / AGAINST / / ABSTAIN

(3) To consider and act upon any other matter which may
properly come before the meeting or any adjournment
thereof; all as more particularly described in the
Proxy Statement dated August 4, 1995, relating to such
meeting, receipt of which is hereby acknowledged.

PLEASE MARK, SIGN, DATE AND RETURN IN THE ENCLOSED ENVELOPE.
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<PAGE> 172

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This proxy when properly executed will be voted in the
manner directed herein by the undersigned stockholder. If no
direction is made, this proxy will be voted FOR Proposal 1 and
FOR Proposal 2.

Dated ---------------, 1995

---------------------------

---------------------------
Signature of Stockholder(s)

Please sign your name
exactly as it appears
hereon. Joint owners must
each sign. When signing as
attorney, executor,
administrator, trustee or
guardian, please give your
full title as it appears
hereon.

- --------------------------------------------------------------------------------