EXHIBIT 4
February 16, 1998
PERSONAL AND CONFIDENTIAL
Anthony DiNovi, Managing Director
Thomas H. Lee Company
75 State Street
Boston, MA 02109
Dear Mr. DiNovi:
We have requested information from First Alert, Inc. (the "Company") in
connection with our consideration of possibly acquiring the Company and/or the
business (the "Business") of the Company (the "Transaction"). As a condition to
furnishing such information to us, the Company requires that we agree, as set
forth below, to treat confidentially any information that the Company or its
officers, directors, agents, advisors or controlling persons, furnish to us or
our Representatives (which term shall include our directors, officers,
employees, agents, advisors, attorneys and accountants) (such information being
collectively referred to herein as the "Evaluation Material").
The term "Evaluation Material" does not include any information that
(i) at the time of disclosure or thereafter is in or comes into the public
domain other than as a result of a disclosure by us or our representatives, (ii)
is already in our position or becomes available to us on a non-confidential
basis from a source other than the Company or its agents or advisors, provided
that such source is not and was not (to our knowledge after reasonable inquiry)
bound by an obligation of secrecy to the Company or another party or (iii) has
been independently developed by us without violation of the agreements contained
in this letter.
We hereby agree that the Evaluation Material will be used by us and our
Representatives solely for the purpose of evaluating a possible Transaction
between the Company and us, will not be used in any way detrimental to the
Company, and will be kept confidential by us and our representatives; provided,
however, that (i) the existence of a possible Transaction and any such
information may be disclosed to those of our Representatives who need to know
such information for the purpose of
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evaluating any such possible Transaction between the Company and us, provided,
further, however, that (a) such Representatives will be informed by us on a
confiden tial nature of such information and will be required by us to treat
such information confidentially as if such Representative were a party to this
agreement and we shall be responsible for any disclosure by our Representatives,
and (ii) any disclosure of such information may be made to which the Company
consents in writing.
In addition, without the prior written consent of the Company except as
may be required by law, and then only after prior written notice to the Company,
we will not, and will cause our Representatives not to, disclose to any person
either the fact that discussions or negotiations are taking place concerning a
possible Transaction between the Company and us or any of the terms, conditions
or other facts with respect to any such possible Transaction, including the
existence or status thereof. The term "person" as used in this letter shall be
broadly interpreted to include, without limitation, any corporation, company,
partnership or other entity or individual. It is our understanding that the
Company and Thomas H. Lee Company similarly will not disclose to any person
either the fact that discussions or negotiations are taking place concerning a
possible Transaction or other facts with respect to any such possible
Transaction.
In the event that we or our Representative are requested or required to
disclose all or any part of the information contained in the Evaluation
Material, we agree (i) to notify the Company of the existence, terms and
circumstances surround ing such a request or requirement as promptly as the
circumstances permit so that it may seek an appropriate protective order and/or
waive our compliance with the provisions of the agreements contained in this
letter. If in the absence of a protective order, we or any of our
Representatives are nonetheless in the opinion of our counsel compelled to
disclose Evaluation Material or any other information concerning the
Transaction, we or any such representative may disclose only that portion of the
Evaluation or other material which we are advised by counsel is so
legally compelled, and we will exercise our best efforts to obtain assurance
that confidential treatment will be accorded such Evaluation Material.
Until the earlier of (i) the acquisition of the Business by us and (ii)
two years from the date of this letter, we agree not to initiate or maintain
contact (except for contacts in the ordinary course of business) with any
officer, director, employee, supplier, distributor, broker or customer of the
Business concerning its operations, assets, prospects or finances, except with
the express written permission of the Company. It is understood that the Thomas
H. Lee Company will arrange for
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appropriate contacts for any due diligence we may require and will handle all
inquiries regarding the company.
We hereby agree that for the period two years from the date of this
letter, we will not without the Company written consent, directly or indirectly
solicit for employment or hire any person who is currently employed in a senior
management position by the Company, except as such employment may be
accomplished pursuant to the consummation of a Transaction with the Company as
contemplated by this letter or pursuant to general solicitations of employment
through advertisements or similar means not directed towards employees of the
Company or towards a class of persons who only could be employed by the Company.
We are aware and will advise our Representatives who are informed of
the matters that are subject to this letter agreement, of the restrictions
imposed by the United States Securities laws on the purchase or sale of
securities by any person who has received material, non-public information from
the issuer of such securities and on the communication of such information to
any other person when it is reasonably foreseeable that such person is likely to
purchase or sell such securities in reliance upon such information.
In consideration of the Evaluation Material being furnished to us, for
a period of two years from the date of this letter, we will not (nor will we
assist, provide or arrange financing to or for others or encourage others to),
directly or indirectly, acting alone or in concert with others, unless
specifically requested in writing in advance by the Board of Directors of the
Company; (i) acquire or agree, offer, seek or purpose to acquire (or request
permission to do so) ownership (including but not limited to, beneficial
ownership as defined in Rule 13d-3 under the Securities Exchange Act of 1934
(the "Exchange Act") or any securities issued by the Company or any rights or
options to acquire such ownership (including from a third party) or make any
public announcement or submit any proposal (or request permission to make such
announcement or proposal) with respect to any of the foregoing, or for or with
request to any extraordinary transaction or merger, consolidation, sale of
substantial assets or business combination involving the Company, (ii) except as
pursuant to a consulated Transaction, seek or propose to influence or control
the management or the policies of the Company or to obtain representation on the
Company's Board of Directors, or solicit, or participate in the "solicitation"
of any "proxies" (as such terms are defined or used in Regulation 14A under the
Exchange Act) with respect to any securities of the Company, or become a
"participant" in any "election contest" (as such terms are defined or used in
Rule 14a-11 under the
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Exchange Act) to vote, or seek to advise or influence any person or entity with
respect to the voting of any voting securities of the Company or make any public
announcement with respect to any of the foregoing or request permission to do
any of the foregoing, or (iii) enter into any discussions, negotiations,
arrangements or understandings with any third party with respect to any of the
foregoing.
Although the Company has endeavored to include in the Evaluation
Material information known to it which it believes to be relevant for the
purpose of our investigation, we understand that neither the Company nor any of
its agents, advisors or controlling persons, has made or makes any
representation or warranty as to the accuracy or completeness of the Evaluation
Material. We agree that neither the Company, nor its agents, advisors or
controlling persons, shall have any liability to us or any of our
Representatives resulting from the use or content of the Evaluation Material.
Only those representations, warranties and covenants contained in a definitive
agreement with respect to a consummated transaction shall have any legal effect.
At the request of the Company or in the event we decide not to proceed
with the transaction which is the subject of this letter, we and our
Representatives shall promptly redeliver to the Company all written Evaluation
Material provided by the Company and will not retain copies, extracts or other
reproductions in whole or in part or such written material. All documents,
spreadsheets, memoranda, notes or other writings prepared by us shall be
permanently deleted or erased, and we shall certify in writing to the Company
that we have complied with the provisions of this paragraph.
It is further understood and agreed that no failure or delay by the
Company in exercising any right power or privilege under this letter shall
operate as a waiver thereof, nor shall any single or partial exercise thereof
preclude any other or further exercise thereof.
We agree that unless and until a definitive agreement between the
Company and us with respect to any transaction referred to in this letter has
been executed and delivered, neither the Company nor we will be under any legal
obligation of any kind whatsoever with respect to any Transaction by virtue of
this or any written or oral expression with respect to such a Transaction by any
of its or our directors, officers, employees, agents or advisors except for the
matters specifically agreed to by us in this letter. We acknowledge and agree
that the Company and its advisors are free to conduct the process relating to
any possible Transaction as the Company in its sole
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discretion determines (including, without limitation, by negotiating with any
pro spective buyer and entering into a preliminary or definitive agreement
without prior notice to us or any other person), (b) you reserve the right in
your sole discretion to change the procedures relating to your consideration of
the Transaction at any time without prior notice to us or any other person, to
reject any and all proposals by us or any of our Representatives with regards to
a Transaction, and to terminate discus sions and negotiations with us at any
time and for any reason. The agreements set forth in this letter may be modified
or waived only by a separate written executed by the Company and us expressly so
modifying or waiving such agreements. We further acknowledged and agree that the
Company reserves the right, in its sole and absolute discretion, to reject any
and all proposals and to terminate discussions and negotiations with us at any
time.
It is further understood and agreed that money damages would not be a
sufficient remedy for any breach by us of the agreements contained in this
letter and that the Company shall be entitled to specific performance and
injunctive or other equitable relief as a remedy for any such breach, and we
further agree to waive any requirements for the securing posting of any bond in
connection with such remedy for our breach of this letter agreement. The
foregoing remedies shall not be exclu sive but shall be in addition to all other
remedies available at law or in equity to the Company. We agree to indemnify the
Company for any loss for account of our breach or noncompliance with the terms
of this letter agreement, including without limitation attorneys fees incurred
by the Company in connection with enforcement of this agreement.
This letter shall be governed by, and construed in accordance with, the
internal laws of the Commonwealth of Massachusetts, without giving effect to the
principles of conflict of laws thereof. We irrevocably consent to jurisdiction
of the state or federal courts located in the City of Boston, Massachusetts and
waive any objection to such venue and agree not to object to any proceeding
regarding this letter agreement as being brought in an inconvenient form.
The Company acknowledges that Sunbeam may from time to time engage in
the same or similar lines of business as the Company and that the information
provided to Sunbeam by the Company and its Representatives and any due diligence
conducted by Sunbeam may serve to enhance Sunbeam's understanding of its own
business and the markets in which it competes (or businesses in which it may
engage or markets in which it may compete in the future). Nothing contained in
this letter agreement shall serve to prohibit Sunbeam (or its subsidiaries or
affiliates) from
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engaging in any particular line of business or from developing its own product
lines or pursuing other acquisition opportunities in the same or similar lines
of business or engaging in any particular line of business now or in the future;
provided that we hereby agree not to violate the provisions of the third
literary paragraph of this letter agreement.
If you are in agreement with the foregoing, please so indicate by
signing and returning one copy of this letter which will constitute our
agreement with respect to the matters set forth herein.
Very truly yours,
Sunbeam Corporation
By: /s/ David C. Fannin
-------------------------------------
David C. Fannin
Executive Vice President &
General Counsel
Confirmed and agreed to as of
the date first written above:
THOMAS H. LEE COMPANY
By: /s/ Anthony DiNovi
--------------------------
Anthony DiNovi
Managing Director
cc Robert Kitts, Morgan Stanley
Blaine V. Fogg, Skadden, Arps, Slate, Meagher & Flom LLP
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