EXHIBIT 5
STOCK SALE AGREEMENT
STOCK SALE AGREEMENT, dated as of February 28, 1998 (the
"Agreement"), among Sunbeam Corporation, a Delaware corporation (the "Parent"),
and each person or entity named in Schedule A to this Agreement (the "Stockhold
ers"). Capitalized terms used herein and not otherwise defined shall have the
meanings ascribed to them in the Merger Agreement (as defined below).
WHEREAS, the Parent, Sentinel Acquisition Corp., a Delaware
corporation and a wholly owned subsidiary of Parent (the "Purchaser"), and First
Alert, Inc., a Delaware corporation (the "Company"), are entering into an
Agreement and Plan of Merger (the "Merger Agreement") simultaneously with the
entry into this Agreement, which provides, among other things, that the
Purchaser, upon the terms and subject to the conditions thereof, make a cash
tender offer (the "Offer") for all issued and outstanding shares of common
stock, par value $.01 per share, of the Company (the "Shares") at a price of
$5.25 per share, and following consummation of the Offer the Purchaser will
merge with and into the Company with the Company as the surviving corporation
(the "Merger") and each then outstanding Share (other than Shares held by (i)
the Parent or any of its wholly owned subsidiaries, (ii) the Company or any of
its wholly owned subsidiaries or (iii) any holder who perfects dissenters'
rights under Delaware law) would be converted into the right to receive $5.25 in
cash, or any higher price paid per Share in the Offer; and
WHEREAS, the Parent has required, as a condition to its
entering into the Merger Agreement and commencing the Offer, that each of the
Stockholders enter into, and each of the Stockholders have agreed to enter into,
this Agreement.
NOW, THEREFORE, the parties hereto agree as follows:
1. Stockholders' Representations. Each of the Stockholders
severally represents and warrants to the Parent (a) that such Stockholder has
the power and authority (or the capacity if an individual) to execute and
deliver this Agreement, (b) that, if a corporation, partnership or other entity,
this Agreement has been duly authorized by all requisite action on the part of
the Stockholder, (c) that the Stockholder has duly executed and delivered this
Agreement and this Agreement is a valid and binding agreement, enforceable
against such Stockholder in accordance with its terms, (d) that neither the
execution of this Agreement nor the consummation by such Stockholder of the
transactions contemplated hereby will
1
constitute a violation of, or conflict with, or default under, any contract,
commitment, agreement, understanding, arrangement or restriction of any kind to
which such Stockholder is a party or by which such Stockholder is bound and,
if the Stockholder is a corporation, partnership or other entity, the
organizational documents thereof, (e) that on the date hereof such Stockholder
has good and valid title to the number of Shares set forth opposite such
Stockholder's name on Schedule A hereto (the "Stockholder's Shares"), free and
lear of all claims, liens, charges, encumbrances and security interests,
without any restrictions on the voting rights of such Stockholder's Shares,
(f) that there are no options or rights to purchase or acquire, or agreements
relating to, any of such Stockholder's Shares except pursuant to this
Agreement, and (g) that the number of Shares set forth in Schedule A hereto
opposite the name of such Stockholder constitutes all of the Shares owned
beneficially or of record by such Stockholder.
2. Parent's Representations. The Parent represents and
warrants to each of the Stockholders that the Parent has duly authorized,
executed and delivered this Agreement and this Agreement is a valid and binding
agreement, enforceable against the Parent in accordance with its terms.
3. Sale of Shares. In the event that within 9 months following
the date hereof and the Parent shall be entitled to the Termination Fee pursuant
to Section 8.1(b) of the Merger Agreement, the Stockholder shall sell, transfer
or otherwise commit to dispose any or all of such Shares to any party other than
the Parent or an affiliate of the Parent (a "Sale") and realize a Profit (as
defined below) from such Sale, then the Stockholder shall pay to the Parent an
amount equal to the Profit. Such amount shall be paid to the Parent promptly
following the receipt of proceeds by the Stockholder or its affiliates from such
Sale. The term "Profit" shall mean the excess, if any, of (a) the aggregate
consideration received by the Stock holder or its affiliates in connection with
the Sale over (b) the number of Shares sold, transferred or disposed of in
connection with the Sale multiplied by the Offer Price.
4. Changes in Shares. In the event of a stock dividend or
distribution, or any change in the Company's Common Stock by reason of any stock
dividend, split-up, recapitalization, combination, exchange of shares or the
like, the term "Shares" shall refer to and include the Shares as well as all
such stock dividends and distributions and any shares into which or for which
any or all of the Shares may be changed or exchanged. Each Stockholder's Shares
shall include all Shares
2
acquired after the date hereof by such Stockholder and all dividends or
distributions in respect of the Stockholder's Shares.
5. Legend. As soon as practicable after the execution of this
Agreement, each Stockholder shall surrender the certificates representing such
Stockholder's Shares to the Parent so that the following legend may be placed on
such certificates:
"The shares of capital stock represented by this certificate
are subject to a Stock Sale Agreement, dated as of February 28, 1998,
between Sunbeam Corporation and [the Stockholder]."
6. Specific Enforcement. The parties hereto acknowledge that
damages would be an inadequate remedy for a breach of this Agreement and that
the obligations of the parties hereto shall be specifically enforceable, in
addition to any other remedy which may be available at law or in equity.
7. Brokerage Fees. Each of the Stockholders and the Parent, in
connection with the transaction contemplated herein, severally agree to
indemnify and hold the other harmless from and against any and all claims,
liabilities or obligations with respect to any brokerage fees, commissions or
finders' fees asserted by any person on the basis of any act or statement
alleged to have been made by such party or its affiliate.
8. Expenses. Each party hereto shall pay its own expenses
incurred in connection with this Agreement.
9. Survival. Notwithstanding anything contained herein to the
contrary, all representations, warranties and agreements made by each of the
Stock holders in this Agreement shall survive the termination of this Agreement
and any investigation at any time made by or on behalf of any party hereto.
10. Stop Transfer. Each of the Stockholders shall not request
that the Company register the transfer (book-entry or otherwise) of any
certificate or uncertificated interest representing any of the Shares, unless
such transfer is made in compliance with this Agreement.
11. Further Assurances. From time to time, at the other
party's request and without further consideration, each party hereto shall
execute and deliver
3
such additional documents and take all such further lawful action as may be
neces sary or desirable to consummate and make effective, in the most
expeditious manner practicable, the transactions contemplated by this Agreement.
12. Miscellaneous.
(a) Amendment, Etc. This Agreement may not be
modified, altered or supplemented except upon the execution and delivery of a
written agreement executed by the parties hereto.
(b) Assignment. No party to this Agreement may
assign any of its rights or obligations under this Agreement without the prior
consent of the other parties except that the rights and obligations of the
Parent may be assigned by the Parent to Purchaser or any of its other wholly
owned subsidiaries but no such transfer shall relieve the Parent of its
obligations hereunder if such transferee does not perform such obligations.
(c) Binding Effect. This Agreement and the
obligations hereunder shall attach to the Shares and shall be binding upon any
person or entity to which legal or beneficial ownership of such Shares shall
pass, whether by operation of law or otherwise. Notwithstanding any transfer of
Shares, the transferor shall remain liable for the performance of all
obligations under this Agreement of the transferor.
(d) Notices. All notices, claims, requests,
demands and other communications hereunder will be in writing and will be deemed
to have been duly given upon receipt as follows:
(a) If to the Parent, to:
Sunbeam Corporation
1615 South Congress Avenue
Suite 200
Delray Beach, FL 33445
Attention: General Counsel
with a copy to:
Skadden, Arps, Slate, Meagher & Flom LLP
4
919 Third Avenue
New York, New York 10022
Attention: Blaine V. Fogg, Esq.
(b) If to the Stockholder, to such Stock holder at the
address set forth under his name in Schedule A.
or to such other address as the person to whom notice is to be given may have
previously furnished to the others in writing in the manner set forth above.
(e) Counterparts. This Agreement may be
executed in two or more counterparts, each of which will be deemed to be an
original but all of which together will constitute one and the same instrument.
(f) Governing Law. This Agreement shall be
governed by and construed in accordance with the laws of the State of Delaware,
regardless of the laws that might otherwise govern under applicable Delaware
principles of conflicts of law.
(g) Termination. Except for Sections 7, 8 and 9
hereof, this Agreement shall terminate on the earlier of (i) the purchase of
each Stockholder's Shares pursuant to the Offer or through the Merger and (ii)
three years from the date hereof.
(h) Remedies Cumulative. All rights, powers and
remedies provided under this Agreement or otherwise available in respect hereof
at law or in equity shall be cumulative and not alternative, and the exercise of
any thereof by any party shall not preclude the simultaneous or later exercise
of any other such right, power or remedy by such party.
(i) No Waiver. The failure of any party hereto
to exercise any right, power or remedy provided under this Agreement or
otherwise available in respect hereof at law or in equity, or to insist upon
compliance by any other party hereto with its obligations hereunder, and any
custom or practice of the parties at variance with the terms hereof, shall not
constitute a waiver by such party of its right to exercise any such or other
right, power or remedy or to demand such compliance.
5
IN WITNESS WHEREOF, this Agreement has been duly executed and
delivered by each Stockholder and a duly authorized officer of the Parent on the
day and year first written above.
SUNBEAM CORPORATION
By: /s/ David C. Fannin
---------------------------------
Executive Vice President & General
Counsel
THOMAS H. LEE EQUITY PARTNERS, L.P.
By: THL Equity Advisors
Limited Partnership
---------------------------------
By: THL Equity Trust
---------------------------------
Its General Partner
By /s/ Anthony J. DiNovi
-------------------------
Vice President
ML-LEE ACQUISITION FUND II, L.P.
By: Mezzanine Investments II, L.P.
---------------------------------
Its Managing General Partner
By: ML Mezzanine II Inc.
---------------------------------
Its General Partner
By /s/ James V. Caruso
-------------------------
Executive Vice President
ML-LEE ACQUISITION FUND (RETIRE
MENT ACCOUNTS) II, L.P.
By: Mezzanine Investments II, L.P.
---------------------------------
Its Managing General Partner
By: ML Mezzanine II Inc.
---------------------------------
Its General Partner
By /s/ James V. Caruso
-------------------------
Executive Vice President
STATE STREET BANK AND TRUST COMPANY OF
CONNECTICUT, NATIONAL ASSOCIATION,
as Successor Trustee of the 1989
THOMAS H. LEE NOMINEE TRUST
By /s/ Gerald R. Wheeler
---------------------------------
Senior Vice President
/s/ John W. Childs
-------------------------------------
John W. Childs
/s/ David W. Harkins
-------------------------------------
David W. Harkins
/s/ Thomas R. Shepherd
-------------------------------------
Thomas R. Shepherd
/s/ Thomas R. Shepherd - IRA
-------------------------------------
Thomas R. Shepherd - IRA
/s/ Glenn H. Hutchins
-------------------------------------
Glenn H. Hutchins
/s/ Scott A. Schoen
-------------------------------------
Scott A. Schoen
/s/ C. Hunter Boll
-------------------------------------
C. Hunter Boll
/s/ Steven G. Segal
-------------------------------------
Steven G. Segal
/s/ Anthony J. DiNovi
-------------------------------------
Anthony J. DiNovi
/s/ Thomas M. Hagerty
-------------------------------------
Thomas M. Hagerty
/s/ Joseph I. Incandela
-------------------------------------
Joseph I. Incandela
/s/ Warren C. Smith
-------------------------------------
Warren C. Smith
/s/ Glenn A. Hopkins
-------------------------------------
Glenn A. Hopkins
/s/ Charles W. Robins
-------------------------------------
Charles W. Robins
STEVEN ZACHARY LEE IRREVOCABLE
TRUST DATED 1988
By: /s/ Charles W. Robins
---------------------
Trustee
/s/ Adam L. Suttin
-------------------------------------
Adam L. Suttin
/s/ Wendy L. Masler
-------------------------------------
Wendy L. Masler
/s/ Andrew D. Flaster
-------------------------------------
Andrew D. Flaster
SGS Family Limited Partnership
By /s/ Steven G. Segal
----------------------------------
Its General Partner
SCHEDULE A
Number of Shares
Name and Address of Common Stock
of Stockholder1 of the Company
--------------- --------------
Thomas H. Lee Equity Partners, L.P. 8,324,492
ML-Lee Acquisition Fund II, L.P. 2,058,474
ML-Lee Acquisition Fund (Retirement
Accounts) II, L.P. 2,281,524
State Street Bank and Trust Company
Not Individually but as Trustee of the
1989 Thomas H. Lee Nominee Trust 985,706
John W. Childs 159,178
David V. Harkins 118,518
Thomas R. Shepherd 44,446
Thomas R. Shepherd - IRA 44,446
Glenn H. Hutchins 88,888
Scott A. Schoen 87,034
C. Hunter Boll 62,000
Steven G. Segal 35,550
- ------------------------
1 Address for all Stockholders, until notice of change is given, is:
c/o Thomas H. Lee Company
75 State Street
Boston, Massachusetts 02109
A-1
Anthony J. DiNovi 35,550
Thomas M. Hagerty 35,550
Joseph I. Incandela 15,500
Warren C. Smith, Jr. 11,160
Glenn A. Hopkins 6,200
Charles W. Robins 6,200
SZL Trust 6,200
Adam L. Suttin 6,200
Wendy L. Masler 1,240
Andrew D. Flaster 1,550
SGS Family Limited Partnership 6,200
A-2