Tender-Offer Solicitation/Recommendation Statement — Schedule 14D-9
Filing Table of Contents
Document/Exhibit Description Pages Size
1: SC 14D9 Tender-Offer Solicitation/Recommendation Statement 33 168K
2: EX-1 Agreement & Plan of Merger & Reorganization 54 219K
3: EX-2 Press Release Issued by the Co. & Parent 2 10K
4: EX-3 Letter Agreement Dated 6/16/97 20 73K
5: EX-4 Memorandum of Agreement Dated 6/16/97 30 92K
6: EX-5 Option Agreement Dated as of 6/16/97 8 32K
7: EX-6 Incentive Option Agreement - Dated 6/16/97 11 35K
8: EX-7 Non-Competition Agreement - Dated 6/16/97 9 32K
9: EX-8 Qualification & Listing of Shares Agreement 6 21K
10: EX-9 Stockholder Letter Dated 6/23/97 1 8K
11: EX-10 Opinion of Crowell, Weedon & Co. 2 16K
EX-7 — Non-Competition Agreement – Dated 6/16/97
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EXHIBIT 7
NON-COMPETITION AGREEMENT made as of the 16th day of June, 1997.
B E T W E E N:
SHAPOUR SEDAGHAT,
of the City of Los Angeles,
in the State of California,
(hereinafter called the "Founder"),
OF THE FIRST PART,
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SEDA SPECIALTY PACKAGING CORP.,
a corporation reincorporated under the
laws of Delaware,
(hereinafter called the "Corporation")
OF THE SECOND PART.
WHEREAS:
1. The Founder is the founder, principal shareholder and a consultant to the
Corporation.
2. Pursuant to an Agreement and Plan of Merger and Reorganization dated the
date hereof, Seawolf Acquisition Corporation ("Seawolf"), a wholly-owned
indirect subsidiary of CCL Industries Inc. ("CCL"), has agreed to make, and CCL
has agreed to cause Seawolf to make, as soon as reasonably practicable but on or
before June 23, 1997 a tender offer in accordance with applicable laws in the
United States of America (the "Offer") for substantially all of the outstanding
shares of common stock (the "Common Shares") of the Corporation and thereafter
on successful completion of the Offer, Seawolf will merge with and into the
Corporation (the "Merger"), with the Corporation being the corporation surviving
the Merger.
3. Pursuant to a Lock-Up Agreement (the "Lock-Up Agreement") dated June 16th,
1997 with CCL, and Seawolf the Founder, amongst others, has agreed, subject to
certain conditions, to tender and not withdraw all of his Common Shares into the
Offer.
4. The aggregate value of the consideration paid or payable by Seawolf to the
Founder for the Common Shares of the Corporation to be acquired by Seawolf
pursuant to the Offer will be at least $24 million.
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5. The Corporation was founded in 1984 by the Founder who had extensive prior
experience in the specialty plastics packaging industry. Since 1984 the
Corporation has carried on the businesses of developing, manufacturing and
marketing specialty plastic packaging products to the personal care and
cosmetics, food and beverage, household and industrial chemical, and
pharmaceutical industries (the "Business") and has sold such products throughout
the United States and in Canada and Mexico from plants located in California and
New York.
6. The Founder, in the course of carrying out his responsibilities to the
Corporation in the past, has had, and will continue to have, fiduciary
responsibilities to the Corporation and has had and will continue to have access
to and has been and will continue to be entrusted with the confidential and
proprietary information and trade secrets of the Corporation including, without
limitation, information not previously disclosed to the public regarding the
names, addresses, terms of contracts and other arrangements with customers,
suppliers, agents and employees of the Corporation; revenues, expenses, costs,
mark-ups, profit margins and other financial and budgeting information;
marketing and distribution plans and practices; manufacturing processes,
formulae, methods and facilities; research and development; manuals;
confidential reports; business plans, opportunities and projects; product
information including information entrusted to the Corporation by its customers
in confidence; and other information not generally known regarding the business,
affairs and plans of the Corporation (herein "Confidential Information"), the
unauthorized use or disclosure of which would be detrimental to the Corporation
and the Business and would reasonably be anticipated to materially impair the
value of the Corporation and the Business.
7. The Founder has been an important representative of the Corporation to
customers and suppliers of the Business and has been responsible for maintaining
those relations and the Corporation's goodwill and has been responsible for the
Corporation's business success and profitability.
8. The right to maintain the Confidential Information and to preserve the
Corporation's goodwill constitute proprietary rights that the Corporation is
entitled to protect; failure to do so would result in irreparable harm to the
Corporation which could not be compensated for by monetary damages alone.
9. The entering into of this Agreement by the Founder is a fundamental and
material inducement to Seawolf making the Offer and completing the Merger.
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10. This Agreement shall take effect upon the completion of the Offer in
accordance with its terms (the "Effective Time").
NOW THEREFORE THIS AGREEMENT WITNESSES that in consideration of the
covenants and agreements herein contained, the payments and inducements provided
by the Corporation to the Founder and for other good and valuable consideration
it is hereby agreed as follows:
1. ACKNOWLEDGMENT - The Founder acknowledges that the recitals to this
Agreement are true and correct. In addition, the Founder acknowledges that the
Corporation, its subsidiaries and affiliates have heretofore carried on and will
hereafter carry on the Business and that in the course of carrying out,
performing and fulfilling his responsibilities to the Corporation in the past he
has had and will continue to have access to and has been and will continue to be
entrusted with the Confidential Information relating to the Business, and to any
other businesses now, or during the Period of Restriction (as hereafter
defined), carried on by the Corporation, its subsidiaries and affiliates, the
disclosure of any of which Confidential Information to competitors of the
Corporation or to the general public may be detrimental to the best interests of
the Corporation. The Founder further acknowledges that in the course of
performing his obligations to the Corporation he has been an important
representative of the Corporation and as such has been responsible for
maintaining or enhancing the goodwill of the Corporation. The Founder
acknowledges and agrees that the right to maintain the confidentiality of such
Confidential Information, and the right to preserve its goodwill, constitute
proprietary rights which the Corporation is entitled to protect.
2. CONFIDENTIALITY - Accordingly, the Founder covenants and agrees with the
Corporation that he will not, during the Period of Restriction (as hereafter
defined) or at any time thereafter disclose any of such Confidential Information
to any person other than to the officers of the Corporation and the Board of the
Directors of the Corporation (the "Board"), nor shall he use the same for any
purpose other than those of the Corporation; provided, however, that the
foregoing shall not apply to any Confidential Information which is or becomes
known to the public or to the competitors of the Corporation otherwise than by a
breach of this Agreement by the Founder or which the Founder is required by law
to disclose pursuant to the order of any court of competent jurisdiction or a
governmental regulatory agency or body, in which case he will provide the
Corporation with prompt notice of such circumstance so that the Corporation may
seek a protective order or other appropriate remedy and/or waive compliance with
the provisions of this Agreement. In the event that such protective order or
other remedy is not
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obtained, or that the Corporation waives compliance with the provisions of this
Agreement, he will furnish only that portion of the Confidential Information
which he is advised by written opinion of counsel is legally required. The
Founder will exercise his reasonable best efforts to obtain a protective order
or other reasonable assurance that confidential treatment will be accorded the
Confidential Information.
3. NON-COMPETITION - Accordingly, the Founder covenants and agrees with the
Corporation that he will not, for a period of two (2) years from the Effective
Time (the "Period of Restriction") either individually or in partnership or
jointly or in conjunction with any person or persons as principal, agent,
shareholder, trustee, beneficiary, or in any other manner whatsoever whether
directly or indirectly, carry on or be engaged in or concerned with or
interested in, or advise, lend money to, guarantee the debts or obligations of,
or permit his name or any part thereof to be used or employed by or associated
with, any person or persons, firm, association, syndicate, trust, company or
corporation engaged in or concerned with or interested in any business which is
competitive with the Business in any of the 58 counties in the State of
California or in any of the thousands of cities, counties and other political
subdivisions of the largest of the following geographical areas:
(a) Canada, the United States and Mexico; or
(b) Canada and the United States; or
(c) the United States; or
(d) the States of the United States west of the Mississippi River; or
(e) the State of California.
And for greater certainty subsections (a) through (e) are each separate
and distinct covenants, severable one from the other and the most restrictive of
subsections (a) through (e) shall apply unless such covenant is determined to be
invalid or unenforceable, in which event the next most restrictive shall apply,
and so on.
4. PERMITTED INVESTMENTS - Nothing herein shall restrict or prevent the
Founder from owning as a passive investor less than 10% of any class of
securities of a corporation which is a competitor of the Corporation whose
securities are trading in the public market.
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5. NON-SOLICITATION - The Founder hereby covenants and agrees with the
Corporation that he will not at any time during the Period of Restriction,
directly or indirectly, solicit or attempt to induce, procure, encourage or
direct away from the Corporation any customer, supplier or employee of the
Corporation.
6. REMEDIAL RIGHTS - Nothing contained in this Agreement shall be deemed to
affect or impair the otherwise lawful rights of the Corporation to enforce its
legal remedies against the Founder at any time hereafter to prevent the Founder
from approaching or soliciting any customer, supplier or employee of the
Corporation with a view towards inducing such customer, supplier or employee to
breach a contract between the Corporation and such customer, supplier or
employee and to recover any damages resulting therefrom. Time shall not toll
during any breach of the provisions of Agreement.
7. ACKNOWLEDGMENTS BY FOUNDER - The Founder hereby acknowledges and agrees
that: (a) based on the Corporation's Business, business plans and prospects,
the provision and restrictions in this Agreement are reasonable in the
circumstances and, in particular, the duration, area and types of activities
referred to therein are necessary for the protection of legitimate proprietary
interests of the Corporation; (b) the Corporation presently carries on business,
directly or indirectly, in the United States, Canada and Mexico; (c) without
prejudice to and in addition to any other recourse or remedy which the
Corporation may have, the Corporation has the right to obtain an injunction
enjoining any violation of any provision of this Agreement; (d) any violation of
any provision of this Agreement will cause the Corporation irreparable harm for
which monetary damages are not an adequate remedy and that an interim,
interlocutory and permanent injunction restraining any breach of his obligations
hereunder will be necessary to protect the Corporation from irreparable harm to
its legitimate business interests. In the event of any such breach, the Founder
hereby waives any defences to such an injunction and consents to the immediate
issuance of such an injunction to restrain such breach; and (e) nothing in this
Agreement releases the Founder from any fiduciary or other obligation, duty or
responsibility he may have to the Corporation under any other agreement or
implied at law.
8. TERMS - The terms "customer" and "supplier" as used in this Agreement means
those persons, who supplied or were supplied by or whose business was actively
sought by the Corporation in the eighteen (18) months immediately prior to the
date hereof or during the Period of Restriction. The term "employee" means a
person employed by the Corporation or otherwise
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in a management position at the Corporation in the eighteen (18) months
immediately prior to the date hereof or during the Period of Restriction.
9. SEVERABILITY - If any covenant or provision of this Agreement is determined
to be invalid, void or unenforceable in whole or in part, it shall not nor be
deemed to affect or impair the validity of any other covenant or provision
hereof and each of such covenants and provisions is hereby declared to be
separate and distinct and severable from each of the others for the purpose of
this Agreement. The Founder hereby agrees that all covenants and provisions
contained in this Agreement are reasonable, valid and necessary both as to area
and duration for the protection of the Corporation's proprietary interests and
the parties intend this Agreement to be enforced as written. However, if any
provision, or part thereof is held to be unenforceable because of the duration
thereof, the area covered thereby, or the types of activities restricted
thereby, the parties agree that a Court of competent jurisdiction making such
determination shall have the power to reduce the duration and/or area of such
provision or types of activities restricted to the maximum duration and/or area
permitted by applicable law and/or to delete specific words or phrases and in
its reduced form such provision shall then be enforceable.
10. NOTICES - Any notice, direction or other instrument required or permitted
to be given or made hereunder shall be in writing and shall be sufficiently
given or made if delivered in person to the address set forth below, or
telecopied or sent by other means of recorded electronic communication and
confirmed by delivery as soon as practicable thereafter. Notices shall be
addressed to the parties as follows:
If to the Founder:
Mr. Shapour Sedaghat
2501 West Rosecrans Avenue
Los Angeles, CA
90059-3510
Telecopier: (310) 635-4133
If to the Corporation
105 Gordon Baker Road
Willowdale, Ontario
M2H 3P8
Attention: President
Telecopier: (416) 256-8555
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Any notice, direction or other communication so given or made shall be
deemed to have been given or made and to have been received on the day of
delivery, if delivered, or on the day of sending if sent by telecopier or other
means of recorded electronic communication. Either party hereto may change its
address for notice by giving written notice thereof to the other parties hereto.
Delivery of courtesy copies of notice shall not be a condition to the valid
delivery of any notice, direction or other communication.
11.0 GENERAL
11.1 PREVIOUS AGREEMENTS - Any and all previous agreements, written or oral,
between the parties hereto or on their behalf relating to the subject matter of
this Agreement, are hereby terminated and canceled effective the completion of
the Offer in accordance with its terms and each of the parties hereto hereby
releases and forever discharges the other of and from all manner of actions,
causes of action, claims and demands whatsoever under or in respect of such
previous agreements effective the completion of the Offer in accordance with its
terms.
11.2 GOVERNING LAW AND CONSENT TO JURISDICTION - THIS AGREEMENT SHALL BE
GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF DELAWARE
WITHOUT GIVING EFFECT TO CHOICE OF LAW PRINCIPLES THEREOF. ANY JUDICIAL
PROCEEDING BROUGHT AGAINST ANY PARTY HERETO WITH RESPECT TO THIS AGREEMENT, OR
THE TRANSACTION CONTEMPLATED HEREBY, MAY BE BROUGHT IN THE COURTS OF THE STATE
OF DELAWARE AND, BY EXECUTION AND DELIVERY OF THIS AGREEMENT, EACH OF THE
PARTIES HERETO (I) ACCEPTS, GENERALLY AND UNCONDITIONALLY, THE NON-EXCLUSIVE
JURISDICTION OF SUCH COURT AND ANY RELATED APPELLATE COURT, AND IRREVOCABLY
AGREES TO BE BOUND BY ANY JUDGMENT RENDERED THEREBY IN CONNECTION WITH THIS
AGREEMENT, SUBJECT, IN EACH CASE, TO ALL RIGHTS TO APPEAL SUCH DECISIONS TO THE
EXTENT AVAILABLE TO THE PARTIES AND (II) IRREVOCABLY WAIVES ANY OBJECTION IT MAY
NOW OR HEREAFTER HAVE AS TO THE VENUE OF ANY SUIT, ACTION OR PROCEEDING BROUGHT
IN SUCH COURT OR THAT SUCH COURT IS AN INCONVENIENT FORUM. EACH PARTY HERETO
HEREBY WAIVES PERSONAL SERVICE OF PROCESS AND CONSENTS THAT SERVICE OF PROCESS
UPON SUCH PARTY MAY BE MADE BY DELIVERY AT SUCH PARTY'S ADDRESS SPECIFIED OR
DETERMINED IN ACCORDANCE WITH THE PROVISIONS OF THIS AGREEMENT, AND SERVICE SO
MADE SHALL BE DEEMED COMPLETED ON THE DATE OF DELIVERY. NOTHING HEREIN SHALL
AFFECT THE RIGHT TO SERVE PROCESS IN ANY OTHER MANNER PERMITTED BY LAW. EACH
PARTY HEREBY WAIVES TRIAL BY JURY IN ANY JUDICIAL PROCEEDINGS INVOLVING,
DIRECTLY OR INDIRECTLY, ANY MATTER IN ANY WAY ARISING OUT OF, RELATED TO OR
CONNECTED WITH THIS AGREEMENT WHETHER SOUNDING IN CONTRACT, TORT OR OTHERWISE.
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11.3 ENUREMENT - The provisions hereof, where the context permits, shall
enure to the benefit of and be binding upon the Founder and his heirs,
executors, administrators and legal personal representatives and the Corporation
and its successors and assigns.
11.4 WAIVER - No provision of this Agreement shall be deemed to be waived as
a result of the failure of the Corporation to require the performance of any
term or condition of this Agreement or by other course of conduct. To be
effective, a waiver must be in writing, signed by each of the parties hereto and
state specifically that it is intended to constitute a waiver of a term or
breach of this Agreement. The waiver by the Corporation of any term or breach
of this Agreement shall not prevent a subsequent enforcement of such term or any
other term and shall not be deemed to be a waiver of any subsequent breach.
11.5 LEGAL ADVICE - The Founder hereby represents and warrants to the
Corporation that he has had sufficient opportunity to seek legal advice with
respect to this Agreement, that he fully understands the nature and effect of
this Agreement and that he is entering into it freely and voluntarily.
11.6 CURRENCY - Unless otherwise stated, all dollar amounts herein are in
U.S. Dollars.
11.7 FURTHER ASSURANCES - Each of the parties hereto hereby covenants and
agrees to execute or cause to be executed all such further and other documents
as may be necessary or desirable to give effect to the purposes and intent of
this Agreement. In particular, and without limiting the generality of the
foregoing, the Founder covenants and agrees to execute all such further and
other covenants as to non-competition, non-solicitation, confidentiality and
non-disclosure consistent into the terms of this Agreement as may be required by
the Corporation from time to time in order to protect, preserve and maintain the
Confidential Information, and goodwill of the Corporation, its subsidiaries and
affiliates, in each and every jurisdiction in which the Corporation, its
subsidiaries and affiliates carries on business.
11.8 ATTORNEY'S FEES - In the event that litigation shall be necessary to
enforce, interpret or rescind the provisions of this Agreement, the prevailing
party shall be entitled to recover from the other party, in addition to other
relief, all costs and reasonable attorney's fees incurred by the prevailing
party for service before trial, on trial and on any appeal therefrom.
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11.9 PERSONS - The term "person" as used in this Agreement includes an
individual, a firm, a corporation, a syndicate, a partnership, a trust, an
association, a joint venture, an incorporated organization, a government or a
regulatory authority, agency or commission or other entity.
IN WITNESS WHEREOF the Corporation has executed this agreement under its
corporate seal and the Founder has hereunto set his hand and seal.
SEDA SPECIALTY PACKAGING CORP.
By: /s/ SEDA SPECIALTY PACKAGING CORP.
----------------------------------
By: /s/ SEDA SPECIALTY PACKAGING CORP. c/s
----------------------------------
SIGNED, SEALED AND DELIVERED )
in the presence of )
)
)
___________________________ ) /s/ SHAPOUR SEDAGHAT l/s
) -----------------------------------
SHAPOUR SEDAGHAT
Dates Referenced Herein and Documents Incorporated by Reference
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