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EXHIBIT 4
[DEAN WITTER REYNOLDS INC. LETTERHEAD]
December 10, 1996
Hedstrom Corp.
300 Corporate Center Drive
Suite 100
Coraopolis, PA 15108
Attn: Mr. Arnold Ditri
Gentlemen:
In connection with your consideration of a possible transaction involving
Hedstrom Corporation ("you") and ERO, Inc., a Delaware corporation
(collectively with its subsidiaries, the "Company"), you have requested certain
oral and written information concerning the Company from officers, directors,
employees and/or agents of the Company (all such information collectively
referred to as the "Evaluation Material"). In consideration of furnishing you
with the Evaluation Material the Company requests your agreement to the
following (it being understood that you are also agreeing to cause all of your
affiliates to comply with the provisions hereof):
1. Except as hereinafter set forth, the Evaluation Material for a period
of two years from the date of this agreement will be used only by you
and solely for the purpose of evaluating or implementing the possible
transaction with the Company, which may include the acquisition of all
of the Common Stock or all of the assets of the Company (the
"Transaction"), and not in any way directly or indirectly detrimental
to the Company and such information will be kept confidential by you
and your advisors and not disclosed to any third parties, except that
you may disclose the Evaluation Material or portions thereof to those
of your directors, officers, employees, advisors, lenders and
representatives of your advisors (the persons to whom such disclosure
is permissible being collectively called "Representatives") who need
to know such information for the purpose of evaluating the Transaction
(it being understood that, before disclosing the Evaluation Material
or any portion thereof to such Representatives, those Representatives
will be informed of the confidential nature of the Evaluation Material
and will agree to be bound by this agreement and not to disclose the
information to any other individual or entity). A failure by your
Representatives to abide by the terms of this agreement will be deemed
a breach of the agreement by you and you agree to be responsible for
any breach of this agreement by your Representatives, provided that your
affiliates and their Representatives shall not be deemed your
Representatives unless (but solely to the extent that) you have
furnished Evaluation Material to them. Evaluation Material may also be
disclosed to any management firm which assists you in evaluating or
implementing a transaction. Notwithstanding anything to the contrary
in this letter, you shall not be responsible for any breach by any
person (including any such management firm) that
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DEAN WITTER REYNOLDS INC.
has, with the Company's reasonable consent, entered into a separate
confidentiality agreement with the Company (either directly or
through its Representatives). In the event that you or any or your
Representatives become legally compelled (by deposition, interrogatory,
request for documents, subpoena, civil investigative demand, judicial,
governmental or similar process) to disclose any of the Evaluation
Material, you shall provide the Company with prompt prior written
notice of such requirement, which notice shall be given prior to
disclosing any of the Evaluation material so that the Company may seek
a protective order or other appropriate remedy. You or your
representative shall not be liable for disclosure pursuant to such
requests or requirement made in accordance with the terms of this
Agreement. In the event that such protective order or other remedy is
not obtained, you agree to furnish only that portion of the Evaluation
Material which you are advised by counsel is legally required to be
furnished and to exercise best efforts to obtain assurance that
confidential treatment will be afforded such Evaluation Material.
2. The term "Evaluation Material" does not include any information which
(i) at the time of disclosure or thereafter is generally available to
and known by the public (other than as a result of a disclosure
directly or indirectly by you or your Representatives in violation of
this agreement), (ii) was available to you or your Representatives on a
nonconfidential basis from a source other than the Company or its
advisors, provided that such source is not and was not bound by a
confidentiality agreement with the Company or (iii) has been
independently acquired or developed by you or your Representatives
without violating any of your obligations under this agreement.
3. If the Transaction is not consummated by you or if the Company so
requests, you promptly will return to the Company all copies of the
Evaluation Material in your possession or in the possession of your
Representatives, and you will destroy all copies of any analyses,
compilations, studies or other documents prepared by you or for your
use containing or reflecting any Evaluation Material.
4. Without the prior written consent of the Company, neither you nor your
Representatives will disclose to any person (i) the fact that any
investigations, discussions or negotiations are taking place concerning
the Transaction, (ii) that you have requested or received Evaluation
Material from the company or (iii) any of the terms, conditions or
other facts with respect to any Transaction, including the status
thereof. The term "person" in this agreement will be interpreted
broadly to include, without limitation, any corporation, company,
partnership or individual.
5. Until two years from the date of this agreement, you agree not to
initiate or maintain contact (except for contacts made in the ordinary
course of business consistent with past practice) with any officer,
director, member of management, employee or agent of the Company
regarding its business, operation, prospects or finances, or to solicit
the employment of any such individual, except after first requesting
and receiving the permission of the Company, provided, however, that
this agreement shall not prohibit any advertisement or general
solicitation (or employment as a result thereof) that is not
specifically targeted at such persons nor shall it prohibit the
solicitation or employment of any such person who is not employed by
the Company on the date you first solicit such person
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DEAN WITTER REYNOLDS INC.
Hedstrom Corp.
December 10, 1996
Page 3
6. You understand and acknowledge that the Company is not making any
representation or warranty, express or implied, as to the accuracy or
completeness of the Evaluation Material, and none of the Company or any
of its respective officers, directors, employees, stockholders, owners,
affiliates, agents or representatives will have any liability to you or
any other person resulting from your use of the Evaluation Material.
7. You also agree that unless and until a definitive contract or contracts
covering the Transaction shall have been executed and delivered, there
shall not be any legal obligation whatsoever on the Company to
facilitate, cooperate with you or any other party with respect to, or
participate in, any Transaction by virtue of this agreement or any
other written or oral expression with respect to such Transaction
except, in the case of this agreement, for the matters specifically
agreed to herein.
8. You agree that until the expiration of one year from the date of this
agreement, neither you (including any person or entity directly or
indirectly, through one or more intermediaries, controlling you or
controlled by you or under common control with you) nor your
Representatives shall, nor shall you permit any of your "associates"
or "affiliates" (as such terms are defined in Rule 12b-2 under the
Securities Exchange Act of 1934 (the "Exchange Act")) to, acting alone
or as part of any group except pursuant to the possible transaction
described in this agreement (a) in any manner acquire, agree to acquire
or make any proposal or offer to acquire, directly or indirectly, any
securities or property of the Company, (b) except at the specific
written request of the Company, propose to enter into, directly or
indirectly, any merger or business combination involving the Company or
to purchase, directly or indirectly, a material portion of the assets
of the Company, (c) make, or in any way participate, directly or
indirectly, in any "solicitation" of "proxies" or become a
"participant" in any "election contest" (as such terms are defined or
used in the proxy rules of the Securities and Exchange commission) with
respect to the Company, or execute or solicit any written consents in
lieu of a meeting of holders of the Company's voting securities or any
class thereof, or otherwise seek to advise or influence any person with
respect to the voting of, any voting securities of the Company,
including by public announcement or written statement broadly
disseminated, (d) form, join or in any way participate in a "group"
(within the meaning of Section 13(d)(3) of the Exchange Act) with
respect to any voting securities of the Company except with respect to
securities owned on December 10, 1996, (e) otherwise act, alone or in
concert with others, to seek to control or influence the management,
Board of Directors or policies or affairs of the Company, (f) disclose
any intention, plan or arrangement inconsistent with the foregoing or
(g) advise, assist or encourage any other persons in connection with
any of the foregoing. You also agree during such period not to (i)
request the Company (or its directors, officers, employees' or agents),
directly or indirectly, to amend or waive any provision of this
paragraph (including this sentence) unless another party has made a
proposal inconsistent with the foregoing, or (ii) take any action which
might require you or the Company to make a public announcement
regarding the possibility of any Transaction or any other business
combination or merger with the Company, without the consent of a duly
authorized representative of the Company.
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DEAN WITTER REYNOLDS INC.
Hedstrom Corp.
December 10, 1996
Page 4
9. You agree that, in the event of any breach of the provisions of
this agreement, the Company shall be entitled to seek equitable
relief upon proper showing, including injunction and specific
performance, in addition to all other remedies available to the Company
at law or in equity.
It is further understood and agreed that no failure or delay by the
Company in exercising any right, power or privilege hereunder will
operate as a waiver thereof, nor will any single or partial exercise
thereof preclude any other or further exercise thereof or the exercise
of any right, power or privilege hereunder.
This agreement is for the benefit of the Company, and will be governed by
and construed in accordance with the internal laws of the State of Delaware.
Your obligations under this agreement will expire on the earlier of two years
from the date of this agreement or the closing of the possible transaction by
you or any of your affiliates.
If you agree with the foregoing, please sign and return two copies of this
letter, which will constitute our agreement with respect to the subject matter
of this letter.
Very truly yours,
DEAN WITTER REYNOLDS INC.
As authorized Agent on behalf of ERO, Inc.
By:/s/ Russell K. Mayerfeld
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Name: Russell K. Mayerfeld
Title: Managing Director
CONFIRMED AND AGREED
as of the date written above:
Hedstrom Corp.
By:/s/ A.E. Ditri
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Name:
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