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JARDEN
CORPORATION
555 Theodore Fremd
Avenue
Rye, New York
10580
January 9, 2004
The
Board of Directors
Dixon
Ticonderoga Company
195
International Parkway
Heathrow
FL
32746
Attention:
Gino N. Pala
Dear
Sirs:
In order to induce Jarden Corporation, a
Delaware corporation ("Buyer"), to
commit
the resources, forego other potential opportunities, and incur the legal,
accounting
and other incidental expenses necessary to properly evaluate a
potential
transaction (the "Transaction") among the Buyer, a wholly owned
subsidiary
of Buyer to be formed ("Newco"), and Dixon Ticonderoga Company, a
Delaware
corporation (the "Company") in which Buyer and/or Newco would acquire
all of
the issued and outstanding shares of common stock (the "Shares") of
the
Company,
and to negotiate the terms of definitive documentation with respect
thereto,
the Company and the Buyer agree that:
1. Public Disclosure. Notwithstanding
anything to the contrary herein
(other
than as provided in the last sentence of this Section 1) or in the
Confidentiality
Agreement (defined below), promptly after the execution of this
letter
agreement, the Company will make public disclosure of this letter
agreement
in a form and manner mutually agreed upon by the parties. Except as
otherwise
provided herein, neither the Company nor Buyer (subject to
requirements
of law) shall make any disclosure to any other person or make any
public
announcement regarding the Transaction or the matters disclosed by any
party
to the other in connection with the Transaction without the prior written
approval
of both the Company and Buyer. Nothing in this letter agreement or the
Confidentiality
Agreement shall preclude the
<PAGE>
The
Board of Directors
Dixon
Ticonderoga Company
Page 2
Buyer
or the Company from making any public announcement required, in the
reasonable
opinion of their respective counsel, in connection with any federal
or
state securities laws, rules or regulations, including the rules of a
national
securities exchange.
2. Exclusivity. Pursuant to this letter
agreement and subject to Section 3
hereof,
the Buyer shall have the exclusive right to negotiate with the Company
on the
terms and conditions of, and definitive documentation for, the
Transaction,
which right shall expire on the earlier of (i) February 10, 2004,
at 5:00
p.m. or, in the event such date is extended by the mutual written
agreement
of the Buyer and the Company, such later date, (ii) the execution by
Buyer,
Newco and the Company of a definitive merger agreement providing for the
merger
of the Company with and into Newco, or (iii) the time at which the
discussions
and negotiations with respect to the possible acquisition of the
Shares
have been finally terminated by the Buyer (the "Termination Date").
3. Nonsolicitation. Prior to any
Termination Date, the Company will not,
nor
will the Company permit any of its subsidiaries to, nor will the Company
authorize
or permit any of its directors, officers, employees, representatives,
agents,
or affiliates, including any investment banker, advisor, attorney or
accountant
retained or formerly retained by it or any of its subsidiaries
("Representatives")
to directly or indirectly through another person, (i)
solicit,
initiate, resume, or encourage (including by way of furnishing or
disclosing
non-public information), or take any other action to facilitate, any
inquiries
or the making of any proposal that constitutes, or may reasonably be
expected
to lead to, any Takeover Proposal (as defined below), (ii) participate
in any
discussions or negotiations regarding any Takeover Proposal, or (iii)
enter
into any Acquisition Agreement (as defined below); provided, that if the
Company's
board of directors determines in its good faith business judgment,
after
consultation with outside legal counsel, that the failure to furnish such
information
or to participate in such discussions or such negotiations is
reasonably
likely to result in a breach of the directors' fiduciary duties to
the
Company's stockholders under applicable law, then the Company and its
Representatives
may, in response to a Takeover Proposal that was not solicited
by the
Company after the date of this letter agreement and that did not
otherwise
arise out of a breach of this letter agreement, and subject to the
Company's
compliance with the terms of this letter agreement and providing Buyer
with at
least two days' prior written notice of its decision to take such action
(including,
subject to consent of the person making such Takeover Proposal,
specifying
the material terms of such Takeover Proposal and the identity of the
person
making such Takeover Proposal), (x) furnish information with respect to
the Company and its subsidiaries to any person makin






