Exhibt (c)(1)
November 18, 1996
Personal and Confidential
-------------------------
Xx. Xxxxxxx Xxxxxxxx
Director of Mergers & Acquisitions
Tyco International Ltd.
One Tyco Park
Exeter, New Hampshire 03033-1106
Dear Xxxx:
This letter is in reference to the continuing discussions that we have
had regarding a possible transaction (the "Transaction") between
ElectroStar, Inc. ("ElectroStar") and Tyco International Ltd. ("Tyco").
In consideration of Tyco's efforts in evaluating the proposed
Transaction, ElectroStar hereby agrees that until the Termination Date (as
hereinafter defined), it will not, and will cause its officers, directors,
employees and other agents not to, directly or indirectly (x) take any action
to solicit or initiate any Acquisition Proposal (as hereinafter defined), or
(y) continue, initiate or engage in negotiations concerning any Acqusitition
Proposal with, or disclose any non-public information relating to
ElectroStar, or afford access to the properties, books or records of
ElectroStar to, any corporation, partnership, person or other entity (except
Tyco and its representatives) that may be considering or has heretofore made
an Acquisition Proposal. The term "Acquisition Proposal" as used herein
means any offer or proposal for, or indication of interest in, any
acquisition of ElectroStar, whether by way of a merger, consolidation or other
business combination involving any equity interest in, or a substantial
portion of the assets of, ElectroStar, or the acquisition of more than 5% of
the capital stock of ElectroStar (other than the proposed Transaction with
Tyco). As used herein, the term "Termination Date" means 5:00 p.m. (E.S.T.)
on Friday, November 22, 1996, which date and time shall automatically be
extended until 5:00 p.m. (E.S.T.) on Wednesday, November 27, 1996 if (i) Tyco
and ElectroStar have reached an agreement in principle with respect to the
structure and form of definitive agreement for the proposed Transaction, and
(ii) in ElectroStar's reasonable opinion, Tyco has diligently and in good
faith pursued its investigation and evaluation of ElectroStar. In no event
shall the Termination Date be extended beyond November 27, 1996.
In consideration of ElectroStar's covenants in the preceding paragraph,
Electrostar's provision to Tyco of access to certain ElectroStar "Evaluation
Material" and other good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, Tyco hereby agrees that for a
period of three years from the date hereof, neither Tyco nor any of its
affiliates will (nor shall Tyco or its affiliates assist or encourage any
other person to) directly or indirectly, unless specifically requested in
writing in advance by ElectroStar's Board of Directors: (i) acquire or offer,
seek, propose (either publicly or otherwise) or agree to acquire ownership
(including, but not limited to, beneficial ownership as defined in
Xx. Xxxxxxx Xxxxxxxx
November 18, 1996
Page 2
Rule 13d-3 under the Securities Exchange Act of 1934, as amended) of any of
ElectroStar's securities or any rights or options to acquire such ownership,
(ii) seek or propose to influence or control ElectroStar's management or
policies, or (iii) make any public disclosure with respect to any of the
foregoing; PROVIDED, HOWEVER, that the foregoing prohibitions shall
automatically terminate and be of no further effect if (a) a tender offer or
exchange offer commences for ElectroStar's securities, or (b) ElectroStar
enters into a merger agreement pursuant to which ElectroStar's shareholders
would own less than two-thirds of the surviving corporation's stock. Tyco
further covenants that for a period of two (2) years following the date of
this agreement, Tyco will not, directly or indirectly, solicit for employment
or hire any employee of ElectroStar or any of ElectroStar's subsidiaries with
whom such Tyco has had contact or who became known to Tyco in connection with
its consideration of the Transaction.
If you are in agreement with the foregoing, please sign and return one
copy of this letter, whereupon this letter will constitue our agreement with
respect to the subject matter hereof. This agreement may be executed in
several counterparts, all of which together shall constitute one and the same
agreement.
Very truly yours,
ELECTROSTAR, INC.
By: /s/ Xxxxxx X. Xxxxx
_________________________________
AGREED AND ACCEPTED THIS
18TH DAY OF NOVEMBER, 1996:
TYCO INTERNATIONAL Ltd.
By: /s/ Xxxxxxx X. Xxxxxxxx
_____________________________________
Xxxxxxx Xxxxxxxx
Director of Mergers & Acquisitions
