Conformed Copy
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AGREEMENT AND PLAN OF MERGER
dated as of August 14, 1997
by and among
▇. ▇. ▇▇▇▇▇ & CO.,
PACKCO ACQUISITION CORP.
and
SEALED AIR CORPORATION
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TABLE OF CONTENTS
Page
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RECITALS
A. Defined Terms 1
B. The Contribution 1
C. The Distribution 1
D. The Recapitalization 1
E. The Merger 1
F. Intention of the Parties 2
G. Approvals 2
ARTICLE I
THE REORGANIZATION; CLOSING; EFFECTIVE TIME
Section 1.1. The Contribution, the Distribution, and the
Recapitalization 2
Section 1.2. The Merger 2
Section 1.3. Effective Time 2
Section 1.4. Closing 3
ARTICLE II
CERTIFICATE OF INCORPORATION AND BY-LAWS
Section 2.1. Certificates of Incorporation 3
Section 2.2. Surviving Corporation By-laws 3
ARTICLE III
DIRECTORS AND OFFICERS
Section 3.1. Newco Directors 3
Section 3.2. Newco Officers 3
Section 3.3. Surviving Corporation Directors 4
Section 3.4. Surviving Corporation Officers 4
ARTICLE IV.
MERGER CONSIDERATION; CONVERSION OR
CANCELLATION OF SHARES IN THE MERGER
Section 4.1. Merger Consideration; Conversion or
Cancellation of Capital Stock of Sealed
Air and Merger Sub.................................. 4
Section 4.2. Exchange of Old Certificates for New
Certificates........................................ 4
(a) Appointment of Exchange Agent.................... 4
(b) Exchange Procedures.............................. 5
(c) No Transfers..................................... 6
(d) No Liability..................................... 6
(e) Withholding Rights............................... 6
(f) Sealed Air Contingent Stock and Restricted
Stock Plans.................................... 6
ARTICLE V
REPRESENTATIONS AND WARRANTIES
Section 5.1. Representations and Warranties of Grace............... 7
(a) Capital Stock.................................... 7
(b) Corporate Organization and Qualification......... 9
(c) Corporate Authority.............................. 9
(d) Governmental Filings; No Violations.............. 10
(e) SEC Documents; Financial Statements;
No Undisclosed Liabilities..................... 11
(f) Absence of Certain Events and Changes............ 11
(g) Takeover Statutes; Rights Plan................... 12
(h) Brokers and Finders.............................. 12
(i) Contribution..................................... 12
(j) Tax Matters...................................... 12
(k) Disclosure....................................... 13
Section 5.2. Representations and Warranties for the
Packaging Business.................................. 13
(a) Corporate Organization and Qualification......... 13
(b) Corporate Authority.............................. 13
(c) Capitalization................................... 14
(d) Financial Statements; No Undisclosed
Liabilities.................................... 14
(e) Absence of Certain Events and Changes............ 15
(f) Compliance with Laws............................. 15
(g) Title to Assets.................................. 16
(h) Litigation....................................... 16
(i) Taxes............................................ 17
(j) Environmental Matters............................ 17
(k) Contracts and Commitments........................ 18
(l) Employee Benefit Plans........................... 19
(m) Trademarks, Patents and Copyrights............... 22
Section 5.3. Representations and Warranties of Sealed Air.......... 23
(a) Capital Stock.................................... 23
(b) Corporate Organization and
Qualification.................................. 24
(c) Corporate Authority.............................. 24
(d) Governmental Filings; No Violations.............. 25
(e) SEC Documents; Financial Statements; No
Undisclosed Liabilities........................ 26
(f) Absence of Certain Events and Changes............ 26
(g) Compliance with Laws............................. 27
(h) Title to Assets.................................. 27
(i) Litigation....................................... 28
(j) Taxes............................................ 28
(k) Contracts and Commitments........................ 29
(l) Employee Benefits................................ 29
(m) Environmental Matters............................ 32
(n) Takeover Statutes; Rights Plans.................. 32
(o) Brokers and Finders.............................. 32
(p) Trademarks, Patents and Copyrights............... 33
(q) Tax Matters...................................... 33
(r) Disclosure....................................... 33
ARTICLE VI
COVENANTS
Section 6.1. Interim Operations 34
Section 6.2. Certain Transactions 36
Section 6.3. Acquisition Proposals 36
Section 6.4. Information Supplied 38
Section 6.5. Shareholder Approvals 38
Section 6.6. Filings; Other Actions 39
Section 6.7. Audited Financial Statements; Comfort
Letters 40
Section 6.8. Access 40
Section 6.9. Notification of Certain Matters 41
Section 6.10. Publicity 41
Section 6.11. Employee Benefits; Headquarters Employees 41
Section 6.12. Expenses 42
Section 6.13. Antitakeover Statutes 45
Section 6.14. Securities Act Compliance 45
Section 6.15. Transaction Agreements 45
Section 6.16. Tax Matters 45
ARTICLE VII
CONDITIONS
Section 7.1. Conditions to Each Party's Obligation 46
(a) Shareholder Approval 46
(b) Governmental and Regulatory Consents 46
(c) Third-Party Consents 46
(d) Governmental Matters 47
(e) Tax Opinions 47
(f) Registration Statements 47
(g) The Contribution, the Distribution and
the Recapitalization 47
(h) Stock Exchange Listing 47
Section 7.2. Conditions to Obligation of Grace 48
(a) Representations and Warranties 48
(b) Performance of Obligations 48
Section 7.3. Conditions to Obligation of Sealed Air 48
(a) Representations and Warranties 48
(b) Performance of Obligations 49
(c) Letter of Credit 49
(d) Solvency Opinion 49
ARTICLE VIII
TERMINATION
Section 8.1. Termination by Mutual Consent......................... 49
Section 8.2. Termination by any Party Hereto....................... 49
Section 8.3. Termination by Grace.................................. 50
Section 8.4. Termination by Sealed Air............................. 50
Section 8.5. Effect of Termination and Abandonment................. 51
ARTICLE IX
MISCELLANEOUS AND GENERAL
Section 9.1. Survival 51
Section 9.2. Modification or Amendment 51
Section 9.3. Waiver of Conditions 51
Section 9.4. Counterparts 51
Section 9.5. Governing Law 52
Section 9.6. Notices 52
Section 9.7. Entire Agreement; Assignment. 52
Section 9.8. Definition of "Subsidiary" 53
Section 9.9. Captions 53
Section 9.10. Specific Performance 53
Section 9.11. Severability 53
Section 9.12. Third-Party Beneficiaries 54
Section 9.13. Further Assurances 54
Annex A Defined Terms
Exhibit A Form of Distribution Agreement
Exhibit B Forms of Tax Matters Certificates
Exhibit C Form of Grace Tax Opinion
Exhibit D Form of Sealed Air Tax Opinion
Exhibit E Terms of Newco Convertible Preferred Stock
Exhibit F Terms of Newco Amendment
Grace Disclosure Letter
Packaging Business Disclosure Letter
Sealed Air Disclosure Letter
AGREEMENT AND PLAN OF MERGER, dated as of August 14,
1997 (this "Agreement"), by and among ▇. ▇. ▇▇▇▇▇ & CO., a Delaware
corporation ("Grace"), Packco Acquisition Corp., a Delaware corporation and
a wholly-owned subsidiary of Grace ("Merger Sub"), and Sealed Air
Corporation, a Delaware corporation ("Sealed Air").
RECITALS
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A. Defined Terms. Certain capitalized terms used herein shall
have the meanings set forth in Annex A hereto.
B. The Contribution. Prior to the Effective Time, and pursuant
to the Distribution Agreement, a form of which is attached hereto as Exhibit A
(the "Distribution Agreement"), Grace intends to contribute (the
"Contribution") its worldwide packaging business (other than the container
business group) to an indirect, newly-formed Delaware subsidiary of Grace
("Packco").
C. The Distribution. Prior to the Effective Time, Grace, New
Grace (as defined in the Distribution Agreement) and ▇. ▇. ▇▇▇▇▇ & Co.-▇▇▇▇.
("▇▇▇▇▇-▇▇▇▇.") intend to consummate the transactions contemplated by the
Distribution Agreement, including the distribution by Grace to the holders of
Grace Common Shares all of the common stock of New Grace (the "Distribution").
D. The Recapitalization. Immediately prior to the Effective
Time, but following the Distribution, Grace shall be recapitalized (as defined
in the Distribution Agreement, the "Recapitalization") so that the holders of
Grace Common Shares shall thereafter hold Newco Common Shares and Newco
Convertible Preferred Shares, all as provided in the Distribution Agreement.
E. The Merger. At the Effective Time, the parties intend to
effect a merger of Merger Sub with and into Sealed Air, with Sealed Air being
the surviving corporation (the "Merger"), the Certificate of Incorporation of
Sealed Air shall be amended to change the name of Sealed Air to a different
name as determined by Sealed Air, and the Certificate of Incorporation of
Grace shall be amended (the "Newco Amendment") to change the name of Grace to
"Sealed Air Corporation" (such corporation, from and after the Effective Time,
is sometimes hereinafter referred to as "Newco") and to effect the other
amendments described in Exhibit F hereto.
F. Intention of the Parties. It is the intention of the parties
to this Agreement that, for United States federal income tax purposes, the
Distribution, Recapitalization and related transactions shall be tax-free to
Grace and its shareholders under the Code and the Merger shall qualify as a
"reorganization" within the meaning of Section 368 of the Code and the Merger
will be tax-free under the Code to Grace, Sealed Air and their respective
shareholders.
G. Approvals. The Board of Directors of each party hereto has
determined that this Agreement is in the best interests of such party and its
shareholders and has duly approved this Agreement and authorized its execution
and delivery.
NOW, THEREFORE, in consideration of the premises, and of the
representations, warranties, covenants and agreements set forth herein, the
parties hereto hereby agree as follows:
ARTICLE I
THE REORGANIZATION; CLOSING; EFFECTIVE TIME
1.1. The Contribution, the Distribution, and the
Recapitalization. Subject to the terms and conditions of the Distribution
Agreement, prior to the Effective Time, the parties thereto shall effect the
various transactions contemplated thereby, including the Contribution, the
Distribution and the Recapitalization.
1.2. The Merger. At the Effective Time, Sealed Air and Merger
Sub shall consummate the Merger in which Merger Sub shall be merged with and
into Sealed Air and the separate corporate existence of Merger Sub shall
thereupon cease. Sealed Air shall be the surviving corporation of the Merger
(the "Surviving Corporation") and shall continue to be governed by the laws of
the State of Delaware.
1.3. Effective Time. Provided that this Agreement shall not have
been terminated in accordance with its terms, as promptly as practicable after
all of the conditions to the Merger shall have been satisfied or waived (or on
such later date as the parties hereto may agree in writing), the parties
hereto shall cause the Merger to be consummated by filing a certificate of
merger (the "Merger Certificate") with the Secretary of State of the State of
Delaware in such form as required by, and executed in accordance with, Section
251 of the Delaware General Corporation Law (the "DGCL"). The Merger shall
become effective upon the date and at the time (the "Effective Time") on which
the Merger Certificate has been duly filed with the Secretary of State of the
State of Delaware, or at such later date and time as set forth therein.
1.4. Closing. The closing of the Reorganization (the "Closing")
shall take place at the offices of Wachtell, Lipton, ▇▇▇▇▇ & ▇▇▇▇, New York,
New York, at 10:00 A.M. on the first business day on which all the conditions
set forth in Article VII can be fulfilled or are waived, or at such other place
and/or time as the parties hereto may agree. The date upon which the Closing
shall occur is herein called the "Closing Date."
ARTICLE II
CERTIFICATE OF INCORPORATION AND BY-LAWS
2.1. Certificates of Incorporation. The certificate of
incorporation of Merger Sub, as in effect at the Effective Time, shall be the
certificate of incorporation of the Surviving Corporation (the "S.C.
Certificate of Incorporation"), until duly amended in accordance with the
terms thereof and the DGCL. At the Effective Time, the Certificate of
Incorporation of Grace (the "Grace Certificate of Incorporation") shall be
amended as set forth in the Newco Amendment.
2.2. Surviving Corporation By-laws. The By-laws of Merger Sub,
as in effect at the Effective Time, shall be the By-laws of the Surviving
Corporation until duly amended in accordance with the terms thereof, the S.C.
Certificate of Incorporation and the DGCL.
ARTICLE III
DIRECTORS AND OFFICERS
3.1. Newco Directors. Immediately after the Effective Time, the
directors of Newco shall be the seven directors of Sealed Air immediately
prior to the Effective Time and four independent directors selected by Grace
from the existing Grace Board.
3.2. Newco Officers. Immediately after the Effective Time, the
officers of Newco shall be the Chief Executive Officer of Sealed Air, the
Chief Operating Officer of Sealed Air, the current President of Grace
Packaging and such other officers as may be named in the Joint Proxy Statement
or duly appointed or elected by the Board of Directors of Newco.
3.3. Surviving Corporation Directors. Immediately after the
Effective Time, the directors of the Surviving Corporation shall be as
designated by Newco.
3.4. Surviving Corporation Officers. Immediately after the
Effective Time, the officers of Sealed Air shall be the officers of the
Surviving Corporation.
ARTICLE IV
MERGER CONSIDERATION; CONVERSION OR
CANCELLATION OF SHARES IN THE MERGER
4.1. Merger Consideration; Conversion or Cancellation of Capital
Stock of Sealed Air and Merger Sub. At the Effective Time, by virtue of the
Merger and without any action on the part of the holder of any capital stock
of Sealed Air or Merger Sub:
(a) Each Sealed Air Common Share issued and outstanding
immediately prior to the Effective Time (other than any Sealed Air
Common Share owned by Grace or its subsidiaries or any Sealed Air
subsidiary or held in Sealed Air's treasury) shall be converted into and
become at the Effective Time one Newco Common Share.
(b) Each Newco Common Share and each Newco Convertible Preferred
Share issued and outstanding immediately prior to the Effective Time
shall remain issued and outstanding and shall be unchanged by the Merger.
(c) All Sealed Air Common Shares shall cease to be outstanding,
shall be cancelled and retired and shall cease to exist.
(d) Each Sealed Air Common Share issued and outstanding
immediately prior to the Effective Time and owned by Grace or its
subsidiaries or any Sealed Air subsidiary or held in Sealed Air's
treasury shall cease to be outstanding, shall be cancelled and retired
without payment of any consideration therefor and shall cease to exist.
(e) Each share of Merger Sub Common Stock issued and outstanding
immediately prior to the Effective Time shall be converted into and
become one share of common stock of the Surviving Corporation.
4.2. Exchange of Old Certificates for New Certificates. (a)
Appointment of Exchange Agent. From and after the Effective Time until the
end of the six-month period following the Effective Time, Newco shall make
available or cause to be made available to an exchange agent appointed prior
to the Effective Time with the approval of each of Grace and Sealed Air (the
"Exchange Agent") Newco Certificates in amounts sufficient to allow the
Exchange Agent to make all deliveries of Newco Certificates that are requested
by holders of Old Sealed Air Certificates in exchange for Old Sealed Air
Certificates pursuant to this Article IV. In its discretion, Newco may elect
to evidence ownership of Newco Common Shares through a book-entry transfer
agent, in which case the Exchange Agent shall deliver, upon compliance by a
former Sealed Air shareholder with the provisions of Section 4.2(b), a
book-entry account statement evidencing the ownership of Newco Common Shares
(or, at the request of a former Sealed Air shareholder, a Newco Certificate
evidencing such ownership). In the event Newco so elects, references herein
to Newco Certificates shall be deemed to include references to the book-entry
account statements relating to the ownership of Newco Common Shares.
(b) Exchange Procedures. Promptly after the Effective Time,
Newco shall cause the Exchange Agent to mail or deliver to each person who
was, at the Effective Time, a holder of record of Sealed Air Common Shares a
letter of transmittal (the terms of which shall be mutually agreed upon by the
parties hereto prior to the Effective Time) containing instructions for use by
holders of Sealed Air Common Shares who may, in their discretion, desire to
surrender their Old Sealed Air Certificates in exchange for Newco Certificates
pursuant to this Article IV. Upon surrender to the Exchange Agent of an Old
Sealed Air Certificate for cancellation together with such letter of
transmittal, duly executed and completed in accordance with the instructions
thereto, the holder of such Old Sealed Air Certificate shall be entitled to
receive in exchange therefor a Newco Certificate representing the Newco Common
Shares and the Old Sealed Air Certificate so surrendered shall forthwith be
cancelled. If any Newco Certificate is to be issued in a name other than that
in which the Old Sealed Air Certificate surrendered in exchange therefor is
registered, it shall be a condition of such exchange that the person
requesting such exchange shall pay any transfer or other taxes required by
reason of the issuance of such in a name other than that of the registered
holder of the Old Sealed Air Certificate surrendered, or shall establish to
the satisfaction of Newco that any such taxes have been paid or are not
applicable. Six months after the Effective Time, Newco shall be entitled to
cause the Exchange Agent to deliver to it any applicable Newco Certificates
made available to the Exchange Agent that are unclaimed by the former
shareholders of Sealed Air. Any such former shareholders who have not
theretofore exchanged their Old Sealed Air Certificates for Newco
Certificates pursuant to this Article IV who desires to do so shall thereafter
be entitled to look exclusively to Newco and only as general creditors thereof
to obtain Newco Certificates to which they become entitled upon exchange of
their Old Sealed Air Certificates pursuant to this Article IV. Newco shall
pay all applicable charges and expenses in connection with the exchange of
Newco Certificates for Old Sealed Air Certificates as contemplated hereby.
(c) No Transfers. At or after the Effective Time, there shall be
no transfers on the stock transfer books of the Surviving Corporation of
Sealed Air Common Shares which were outstanding immediately prior to the
Effective Time.
(d) No Liability. If any Old Sealed Air Certificate shall have
been lost, stolen or destroyed, upon the making of an affidavit of that fact
by the person claiming such Certificate to be lost, stolen or destroyed and,
if required by Newco, the posting by such person of a bond in such reasonable
amount as Newco may direct as indemnity against any claim that may be made
against it with respect to such Old Sealed Air Certificate, Newco shall, in
exchange for such lost, stolen or destroyed Old Sealed Air Certificates, issue
or cause to be issued the Newco Certificate deliverable in respect thereof
pursuant to this Article IV. No party hereto, nor the Exchange Agent, shall be
liable to any holder of former Sealed Air Common Shares for any cash delivered
to a public official pursuant to any applicable abandoned property, escheat or
similar law.
(e) Withholding Rights. Newco shall be entitled to deduct and
withhold from the consideration otherwise payable pursuant to this Agreement
to any holder of former Sealed Air Common Shares such amounts as may be
required to be deducted and withheld with respect to the making of such
payment under the Code, or under any provision of state, local or foreign tax
law. To the extent that amounts are so withheld and paid over to the
appropriate taxing authority, such withheld amounts shall be treated for all
purposes of this Agreement as having been paid to the holder of the former
Sealed Air Common Shares in respect of which such deduction and withholding
was made.
(f) Sealed Air Contingent Stock and Restricted Stock Plans. The
Sealed Air Stock Plans shall be amended in accordance with their terms and
applicable law, with the effect that as of the Effective Time, among other
things, (i) all of the rights and obligations of Sealed Air under the Sealed
Air Stock Plans, including with respect to awards outstanding at the Effective
Time, shall be rights and obligations of Newco following the Effective Time
and (ii) each unexercised right granted under the Sealed Air Stock Plans to
purchase a Sealed Air Common Share shall constitute a right to purchase a
Newco Common Share in accordance with the terms and conditions of the
applicable Sealed Air Stock Plans, as amended from time to time.
ARTICLE V
REPRESENTATIONS AND WARRANTIES
5.1. Representations and Warranties of Grace. Grace hereby
represents and warrants to Sealed Air that, except as set forth in a letter
delivered to Sealed Air simultaneously with the execution and delivery of this
Agreement (the "Grace Disclosure Letter"):
(a) Capital Stock. (i) Grace. The authorized capital stock of
Grace consists of 300,010,165 Grace Common Shares, par value $.01 per
share, of which 73,409,932 were outstanding as of August 1, 1997, and
53,000,000 Grace Preferred Shares, par value $.01 per share, of which,
as of August 1, 1997, none was outstanding. As of August 1, 1997,
6,224,234 Grace Common Shares were held in the treasury of Grace. As of
the Effective Time, there will be no Grace Common Shares held in the
treasury of Grace. As of August 1, 1997, there were outstanding under
the Grace 1996 Stock Incentive Plan, the Grace 1994 Stock Incentive Plan,
the Grace 1989 Stock Incentive Plan, the Grace 1986 Stock Incentive
Plan, the Grace 1981 Stock Incentive Plan, and the Grace 1997 Stock
Retainer Plan for Nonemployee Directors and any other plan for employees
or directors of Grace (collectively, the "Grace Stock Plans") options to
acquire an aggregate of 5,655,954 Grace Common Shares (subject to
adjustment on the terms set forth in the Grace Stock Plans) at an
average exercise price of $34.65 per share (the "Grace Options"). Such
Grace Options include options to acquire an aggregate of 669,887 Grace
Common Shares at an average exercise price of $40.81 per share held by
Packco Employees (based on information regarding the identity of such
employees as of the date hereof and as defined in the Benefits
Agreement). As of August 1, 1997, there were no shares of capital stock
of Grace reserved for issuance, other than 3,000,000 Grace Preferred
Shares reserved for issuance in connection with the Grace Rights and
12,189,285 Grace Common Shares reserved for issuance under the Grace
Stock Plans. All outstanding Grace Common Shares have been duly
authorized and validly issued and are fully paid and nonassessable, and
all Grace Common Shares issuable under the Grace Stock Plans have been
duly authorized and will, upon issuance in accordance with the Grace
Stock Plans and any agreements thereunder, be validly issued, fully paid
and nonassessable. Except for the Grace Common Shares, Grace has
outstanding no bonds, debentures, notes or other obligations or
securities the holders of which have the right to vote (or are
convertible or exchangeable into or exercisable for securities having the
right to vote) with the shareholders of Grace on any matter. Except as
set forth above, except for Grace Common Shares issued after August 1,
1997 pursuant to the terms of options, securities or plans referred to
above and except in connection with the Transaction Agreements, there
are no shares of capital stock of Grace authorized, issued or
outstanding and there are no preemptive rights or any outstanding
subscriptions, options, puts, calls, warrants, rights, convertible or
exchangeable securities or other agreements or commitments of Grace or
any of its subsidiaries of any character relating to the issued or
unissued capital stock or other securities of Grace or any of its
subsidiaries (including, without limitation, the issuance, sale,
purchase, redemption, conversion, exchange, redemption, voting or
transfer thereof). The Newco Common Shares to be issued in the
Recapitalization and the Merger or upon exercise of the Grace Options
after the Recapitalization and the Newco Preferred Shares to be issued
in the Recapitalization will, upon such issuance, be duly authorized,
fully paid, validly issued and nonassessable.
(ii) Merger Sub. The authorized capital stock of Merger Sub
consists of 1,000 shares of common stock, par value $.01 per share,
of Merger Sub (the "Merger Sub Common Stock"). As of the date of
this Agreement, 1,000 shares of Merger Sub Common Stock are issued
and outstanding, all of which are duly authorized, validly issued,
fully paid and nonassessable. Each issued and outstanding share of
Merger Sub Common Stock is owned by Grace, free and clear of all
liens, pledges, security interests, claims, proxies, preemptive or
subscriptive rights and or other encumbrances or restrictions of any
kind. No shares of Merger Sub Common Stock are held in the treasury
of Merger Sub. There are no options, warrants or other rights,
agreements, arrangements or commitments of any character relating to
the issued or unissued capital stock of Merger Sub or obligating
Grace or any of its subsidiaries to issue or sell any shares of
capital stock, or other equity interest in, Merger Sub. As of the
Effective Time, all of the outstanding shares of capital stock of the
Surviving Corporation will be duly authorized, validly issued, fully
paid and nonassessable, and will be owned by Grace, free and clear of
all liens, pledges, security interests, claims, proxies, preemptive
or subscriptive rights and or other encumbrances or restrictions of
any kind. Merger Sub was formed for the purpose of effecting the
Merger and has no other business activity.
(b) Corporate Organization and Qualification. Each of Grace and
Merger Sub is a corporation duly organized, validly existing and in good
standing under the laws of Delaware and is in good standing (if
recognized in such jurisdiction, or, if not, duly qualified) as a foreign
corporation in each jurisdiction where the properties owned, leased or
operated, or the business conducted, by it or its subsidiaries require
such qualification, except for any such failure so to qualify or be in
good standing which, when taken together with all other such failures, is
not reasonably likely to have a Material Adverse Effect with respect to
Grace. Each of Grace and Merger Sub has the requisite corporate power
and authority and all material governmental licenses and approvals to
carry on its businesses as they are now being conducted. Grace has made
available to Sealed Air a complete and correct copy of the Certificate
of Incorporation and By-laws of Grace and Merger Sub, each as amended to
date and currently in full force and effect.
(c) Corporate Authority. Subject only to the receipt of the
requisite approval of its shareholders necessary to consummate the
Reorganization, each of Grace, Merger Sub and each other subsidiary of
Grace that is or will be a party to a Transaction Agreement has the
requisite corporate power and authority and has taken all corporate
action necessary in order to execute, deliver and perform each
Transaction Agreement to which it is a party and to consummate the
transactions contemplated hereby and thereby, including, without
limitation, the approval of the Grace Board and the resolution of the
Grace Board to recommend, subject to their fiduciary duties, the
transactions contemplated hereby and thereby for approval by Grace
shareholders. Each Transaction Agreement to which Grace, Merger Sub or
any of Grace's subsidiaries is a party is, or when executed and
delivered shall be, a valid and binding agreement of such person
enforceable in accordance with its terms. The affirmative votes of the
holders of a majority of the outstanding Grace Common Shares in favor of
the Merger and related transactions (including the amendments to the
Grace Certificate of Incorporation) and the Distribution are the only
votes of the holders of Grace's capital stock necessary in connection
with the consummation of the Reorganization.
(d) Governmental Filings; No Violations. (i) Other than as may
be required under the HSR Act and similar statutes in other countries,
the Exchange Act, the Securities Act, state securities laws, no notices,
reports or other filings are required to be made by Grace or any Grace
subsidiary with, nor are any consents, registrations, approvals, permits
or authorizations required to be obtained by it or any such subsidiary
from, any governmental or regulatory authority, agency, court,
commission or other entity, domestic or foreign ("Governmental Entity"),
in connection with the execution, delivery or performance of each
Transaction Agreement to which it or any such subsidiary is a party and
the consummation by it or any such subsidiary of the transactions
contemplated hereby and thereby, except for such matters as would not,
individually or in the aggregate, have a Material Adverse Effect with
respect to the New Grace Group or the Packco Group or prevent or
materially delay or enable any person to enjoin consummation of the
transactions contemplated hereby and thereby.
(ii) The execution, delivery and performance by Grace or any
Grace subsidiary of each Transaction Agreement to which it is a party
does not or will not, and the consummation by it of any of the
transactions contemplated hereby and thereby will not, constitute or
result in (with or without the giving of notice, the lapse of time or
both) (A) a breach or violation of, or a default under, its certificate
of incorporation or by-laws or comparable governing instruments, or (B)
a breach or violation of, or a default under, or an acceleration or
termination of or change in the rights or obligations of any party
under, or the creation of a lien, pledge, security interest or other
encumbrance on any assets pursuant to, any provision of any agreement,
lease, contract, note, mortgage, indenture, arrangement or other
obligation or commitment ("Contracts") of it or any of its subsidiaries
or any law, rule, ordinance or regulation or judgment, decree, order,
award or governmental or non-governmental permit or license to which it
or any of its subsidiaries is subject, except, in the case of clause (B)
above, for such breaches, violations, defaults, accelerations or changes
that are disclosed in the Grace Disclosure Letter or, individually or
in the aggregate, are not reasonably likely to have a Material Adverse
Effect with respect to the New Grace Group or the Packco Group or
prevent or materially delay or enable any person to enjoin consummation
of the Reorganization.
(e) SEC Documents; Financial Statements; No Undisclosed
Liabilities. (i) Grace has filed all forms, reports and documents
required to be filed by it under the Exchange Act or the Securities Act
since December 31, 1994. As of its filing date, each SEC Document
filed, and each SEC Document that will be filed by it or its subsidiaries
prior to the Effective Time, as amended or supplemented, if applicable,
pursuant to the Exchange Act or the Securities Act (A) complied or will
comply in all material respects with the applicable requirements of the
Exchange Act or the Securities Act and (B) did not or will not contain
any untrue statement of a material fact or omit to state any material
fact necessary in order to make the statements made therein, in the
light of the circumstances under which they were made, not misleading.
Each of Grace's consolidated balance sheets included in or incorporated
by reference into its SEC Documents (including the related notes and
schedules) fairly presents in all material respects the consolidated
financial position of it and its subsidiaries as of the dates set forth
therein and each of the consolidated statements of operations, cash
flows and shareholders' equity included in or incorporated by reference
into its SEC Documents (including any related notes and schedules)
fairly presents in all material respects the consolidated results of
operations, cash flows and retained earnings, as the case may be, of it
and its subsidiaries for the periods set forth therein (subject, in the
case of unaudited statements, to normal year-end audit adjustments), in
each case in accordance with US GAAP (applied on a consistent basis).
(ii) Except as disclosed in its SEC Documents filed with the SEC
prior to the date hereof, neither Grace nor any of its subsidiaries has
any liabilities of any kind whatsoever, whether or not accrued,
contingent or otherwise, that, individually or in the aggregate, are
reasonably likely to have a Material Adverse Effect with respect to the
Packco Group or the New Grace Group.
(f) Absence of Certain Events and Changes. Except (i) as
disclosed in its SEC Documents filed with the SEC prior to the date
hereof, and (ii) as contemplated by the Transaction Agreements, since
December 31, 1996, Grace and its subsidiaries have conducted their
respective businesses only in the ordinary and usual course of such
businesses, and there has not been any change or development or
combination of changes or developments (including any worsening of any
condition currently existing) which, individually or in the aggregate,
is reasonably likely to result in a Material Adverse Effect with
respect to the New Grace Group.
(g) Takeover Statutes; Rights Plan. The execution, delivery and
performance of this Agreement and consummation of the transactions
contemplated hereby will not cause to be applicable to Grace, Section
203 of the DGCL or any similar provision (a "Takeover Statute") (after
giving effect to any actions that will be taken prior to the Effective
Time). The Grace Board has taken, or prior to the Effective Time will
take, all requisite action in order to amend the Grace Rights Agreement
so as to render the Grace Rights inapplicable to the Merger, the
Recapitalization, and the Distribution and to terminate or redeem the
Grace Rights at or prior to the Effective Time.
(h) Brokers and Finders. Neither Grace nor any of its
subsidiaries or any of their respective officers, directors or employees
has employed any broker or finder or incurred any liability for any
brokerage fees, commissions or finders' fees in connection with the
transactions contemplated herein, except pursuant to arrangements
disclosed in writing to the other parties hereto prior to the date
hereof.
(i) Contribution. The Packco Assets represent the worldwide
Packaging Business of Grace and its subsidiaries and all of their assets
used or held for use in the conduct of Grace's worldwide Packaging
Business as presently conducted or as conducted at the Effective Time,
as the case may be.
(j) Tax Matters. Except as reflected in its SEC Documents filed
with the SEC prior to the date hereof and except for such matters that,
individually or in the aggregate, are not reasonably likely to have a
Material Adverse Effect with respect to the Packco Group or the New
Grace Group: (i) all federal, state, local and foreign tax returns
required to be filed by or on behalf of Grace or any of its subsidiaries
have been timely filed, or requests for extensions have been timely
filed and have been granted and have not expired, and all such filed
returns are complete and accurate in all respects; (ii) all taxes shown
as due and payable on returns filed by Grace or any of its subsidiaries
have been paid in full; (iii) there is no outstanding audit examination,
deficiency or refund litigation with respect to any taxes of Grace; (iv)
all taxes, interest, additions, and penalties due with respect to
completed and settled examinations or concluded litigation relating to
Grace have been paid in full or have been recorded as a liability on
its balance sheet (in accordance with US GAAP); (v) neither Grace nor
any of its subsidiaries is a party to any tax sharing or similar
agreement pursuant to which it or any of its subsidiaries has
indemnified another party with respect to taxes; and (vi) neither Grace
nor any of its subsidiaries has waived any applicable statute of
limitations with respect to any taxes. At the Effective Time, the
representations set forth in the Tax Matters Certificates of Grace-Conn.,
substantially in the form of Exhibit B (the "Grace Tax Matters
Certificate"), will be true and correct in all respects, and such
representations are hereby incorporated herein by reference with the
same effect as if set forth herein in their entirety.
(k) Disclosure. The representations and warranties of Grace
contained in this Agreement or in any written instrument, exhibit or
certificate furnished or to be furnished by Grace to Sealed Air pursuant
hereto or in connection herewith, do not contain any untrue statement of
a material fact or omit to state a material fact necessary in order to
make the statements contained therein not misleading.
5.2. Representations and Warranties for the Packaging Business.
Grace hereby represents and warrants to Sealed Air that, except as set forth
in a letter delivered to Sealed Air simultaneously with the execution and
delivery of this Agreement (the "Packaging Business Disclosure Letter"):
(a) Corporate Organization and Qualification. At the Effective
Time, Packco and each Packco Subsidiary will be duly organized, validly
existing and in good standing under the laws of its jurisdiction of
organization and will be in good standing (if recognized in such
jurisdiction, or, if not, duly qualified) as a foreign corporation in
each jurisdiction where the properties owned, leased or operated, or the
business conducted, by Packco or such Packco Subsidiary require such
qualification, except for any such failure so to qualify or be in good
standing which, when taken together with all other such failures, is not
reasonably likely to have a Material Adverse Effect with respect to the
Packco Group or the Packaging Business. At the Effective Time, Packco
and each Packco Subsidiary will have the requisite corporate power and
authority and all material governmental licenses and approvals to carry
on its business as now being conducted.
(b) Corporate Authority. At the Effective Time, Packco and each
Packco Subsidiary will have the requisite corporate power and authority
and will have taken all corporate action necessary in order to
consummate the transactions contemplated hereby and by the other
Transaction Agreements.
(c) Capitalization. All issued and outstanding shares of capital
stock of Packco and each Packco Subsidiary (except for an immaterial
number of shares held by officers and directors of Grace and its
subsidiaries as required by applicable law) will, as of the Effective
Time, be owned of record and beneficially by Grace, Packco or another
Packco Subsidiary, free and clear of all liens, pledges, security
interests, claims, proxies, preemptive or subscriptive rights or other
encumbrances or restrictions of any kind. There are no options,
warrants or other rights, agreements, arrangements or commitments of any
character relating to the issued or unissued capital stock of Packco or
any Packco Subsidiary or obligating Packco or any Packco Subsidiary to
issue or sell any shares of capital stock of, or other equity interests
in, Packco or any Packco Subsidiary. There are no outstanding
contractual obligations of Packco or any Packco Subsidiary to
repurchase, redeem or otherwise acquire any capital stock of Packco or
any Packco Subsidiary or to provide funds to make any investment (in the
form of a loan, capital contribution or otherwise) in Packco or any
Packco Subsidiary or any other entity. As of the Effective Time, each
of the outstanding shares of capital stock of Packco, and each Packco
Subsidiary will be duly authorized, validly issued, fully paid and
nonassessable.
(d) Financial Statements; No Undisclosed Liabilities. (i)
Included in the Packaging Business Disclosure Letter are unaudited
special purpose consolidated and combined balance sheets as of December
31, 1995 and 1996 and June 30, 1997, and special purpose consolidated
and combined statements of earnings before interest and taxes for the
three years ended December 31, 1996 and the six months ended June 30,
1997 for the Packaging Business (such financial statements, the
"Packaging Business Disclosure Letter Financial Statements," and the
balance sheet as of December 31, 1996 included therein, the "Packaging
Business Disclosure Letter Balance Sheet"). The balance sheets included
in the Packaging Business Disclosure Letter Financial Statements
(including and subject to the Basis of Presentation) fairly present in
all material respects, and the special purpose consolidated and combined
balance sheet to be included in the Packaging Business Financial
Statements (including any related notes and schedules) shall fairly
present in all material respects, the consolidated financial position
of the Packaging Business, in each case as of the dates set forth
therein; and each of the special purpose consolidated and combined
statements of earnings before interest and taxes included in the
Packaging Business Disclosure Letter Financial Statements (including and
subject to the Basis of Presentation) fairly presents in all material
respects, and each consolidated statement of operations, cash flows and
shareholders' equity to be included in the Packaging Business Financial
Statements (including any related notes and schedules) shall fairly
present in all material respects, the consolidated results of
operations, cash flows and retained earnings, as the case may be, of the
Packaging Business for the periods set forth therein, in each case in
accordance with US GAAP applied on a consistent basis (subject, in the
case of interim financial statements, to normal year-end adjustments).
(ii) Except as disclosed on the Packaging Business Disclosure
Letter Balance Sheet or in the Basis of Presentation thereto, the
Packco Group does not have any liabilities of any kind whatsoever,
whether or not accrued, contingent or otherwise, that, individually
or in the aggregate, are reasonably likely to have a Material Adverse
Effect with respect to the Packco Group or the Packaging Business
(other than liabilities to be incurred in connection with the Grace
Credit Agreement).
(e) Absence of Certain Events and Changes. Except (i) as
disclosed in the Packaging Business Disclosure Letter, and (ii) as
contemplated by the Transaction Agreements, since December 31, 1996, the
Packaging Business has been conducted only in the ordinary and usual
course of business and there has not been any change or development or
combination of changes or developments (including any worsening of any
condition currently existing) which, individually or in the aggregate,
is reasonably likely to result in a Material Adverse Effect with respect
to the Packco Group or the Packaging Business.
(f) Compliance with Laws. Grace and its subsidiaries (with
respect to the Packaging Business) have complied with all applicable
federal, state, local and foreign statutes, laws, regulations,
ordinances, rules, judgments, orders or decrees applicable thereto,
except where the failure to comply is not reasonably likely,
individually and in the aggregate, to have a Material Adverse Effect
with respect to the Packco Group or the Packaging Business. Grace and
its subsidiaries (with respect to the Packaging Business) have, and
immediately after the Contribution will have, all permits, licenses,
certificates of authority, orders, and approvals of, and has and will
have made all filings, applications, and registrations with, federal,
state, local, and foreign Governmental Entities that are required in
order to permit the Packco Group to carry on the Packaging Business as
it is presently conducted by Grace and its subsidiaries, except for such
permits, licenses, certificates, orders, filings, applications and
registrations, the failure to have or make which, individually or in the
aggregate, are not reasonably likely to have a Material Adverse Effect
with respect to the Packco Group or the Packaging Business.
(g) Title to Assets. Effective as of the Distribution Date and
subject to the provisions of Article II of the Distribution Agreement or
as disclosed in the Packaging Business Disclosure Letter, one or more
members of the Packco Group will:
(i) have good and valid title to the Packco Assets (as
defined in the Distribution Agreement) (including, without
limitation, all assets reflected on the Packaging Business
Disclosure Letter Balance Sheet or Packco Assets acquired after
December 31, 1996, except for such assets as were sold since
December 31, 1996 in the ordinary course of business and not in
violation of this Agreement), free and clear of any Liens; and
(ii) own or have adequate rights to use all assets used or
held for use in the Packaging Business as conducted by Grace and
its subsidiaries as of the Distribution Date, and such rights are
sufficient to permit the Packco Group to continue to operate the
Packaging Business as conducted by Grace and its subsidiaries as
of the Distribution Date;
in each case except for such matters as would not, individually or in
the aggregate, have a Material Adverse Effect on the Packaging Business
or the Packco Group. As used herein, "Lien" shall mean, with respect to
any asset, any mortgage, lien, pledge, charge, security interest,
encumbrance or other adverse claim of any kind in respect of such asset.
(h) Litigation. There are no civil, criminal or
administrative actions, suits, claims, hearings or proceedings
pending or, to the knowledge of its executive officers, threatened,
or investigations pending, against Grace or its subsidiaries with
respect to the Packaging Business, Packco or any Packco Subsidiary
that, individually or in the aggregate, are reasonably likely to have
a Material Adverse Effect with respect to the Packco Group or the
Packaging Business. There are no judgments or outstanding orders,
writs, injunctions, decrees, stipulations or awards (whether rendered
or issued by a court or Governmental Entity, or by arbitration)
against Grace or its subsidiaries with respect to the Packaging
Business, Packco or any Packco Subsidiary, or any of their respective
properties or businesses, which are reasonably likely, individually
or in the aggregate, to have a Material Adverse Effect with respect
to the Packco Group or the Packaging Business.
(i) Taxes. Except as reflected in Grace's SEC Documents filed
with the SEC prior to the date hereof and except for such matters that,
individually or in the aggregate, are not reasonably likely to have a
Material Adverse Effect with respect to the Packco Group or the Packaging
Business: (i) all federal, state, local and foreign tax returns required
to be filed with respect to the Packaging Business, Packco or any Packco
Subsidiary have been timely filed or requests for extensions have been
timely filed and any such extension shall have been granted and not
expired, and all such filed returns are complete and accurate in all
material respects; (ii) all taxes shown as due and payable on returns
filed with respect to the Packaging Business, Packco or any Packco
Subsidiary have been paid in full; (iii) there is no outstanding audit
examination, deficiency or refund litigation with respect to any taxes
with respect to the Packaging Business, Packco or any Packco Subsidiary;
(iv) all taxes, interest, additions, and penalties due with respect to
completed and settled examinations or concluded litigation with respect
to the Packaging Business, Packco or any Packco Subsidiary have been
paid in full or have been recorded as a liability on the Packaging
Business Disclosure Letter Balance Sheet (in accordance with the Basis
of Presentation set forth therein); (v) neither Grace, Packco nor any
Packco Subsidiary is a party to any tax sharing or similar agreement
pursuant to which the Packaging Business has indemnified another party
with respect to taxes; and (vi) neither Grace (with respect to the
Packaging Business), Packco nor any of the Packco Subsidiaries has
waived any applicable statute of limitations with respect to any taxes.
(j) Environmental Matters. Except as disclosed in the Grace SEC
Documents filed prior to the date hereof and except for such matters
that, individually and in the aggregate, are not reasonably likely to
have a Material Adverse Effect with respect to the Packco Group or the
Packaging Business, (i) Grace and its subsidiaries, with respect to the
Packaging Business, Packco and the Packco Subsidiaries are and have been
in compliance with all applicable Environmental Laws; (ii) Grace and its
subsidiaries, with respect to the Packaging Business, Packco and the
Packco Subsidiaries hold and have held all permits under any
Environmental Law required for the operation of the Packaging Business
as presently conducted and are in compliance with the terms of such
permits; and (iii) neither Grace nor any of its subsidiaries, with
respect to the Packaging Business, Packco, nor any of the Packco
Subsidiaries has received any outstanding written notices, demand
letters, claims or requests for information, nor has any complaint been
filed, penalty assessed, nor is any investigation, action, claim, suit,
proceeding or review pending (with respect to which Grace has been
provided notice), or, to the knowledge of the executive officers of
Grace, threatened by any Governmental Entity or any third party that
assert that Grace or any of its subsidiaries, with respect to the
Packaging Business, Packco, or any of the Packco Subsidiaries may be in
violation of, or liable under, any Environmental Law (including as an
indemnitor in connection with any threatened or asserted claim by any
third party indemnitee, which indemnity claim may be a Packco Liability
(as defined in the Distribution Agreement)), and none of Grace or any of
its subsidiaries, with respect to the Packaging Business, Packco, the
Packco Subsidiaries or its properties is subject to any citation, court
order, administrative order or decree arising under any Environmental
Law. None of the real property owned or leased by Grace (with respect
to the Packaging Business) or any of its subsidiaries (with respect to
any Packco Asset), Packco or any Packco Subsidiary is listed on, or, to
the knowledge of the executive officers of Grace, proposed for listing
on the "National Priorities List" under CERCLA, or any similar state,
local or foreign list of sites requiring investigation or cleanup.
(k) Contracts and Commitments. Except as set forth in the
Packaging Business Disclosure Letter, and except for matters that would
not, individually or in the aggregate, have a Material Adverse Effect
with respect to the Packaging Business or the Packco Group, (i) Grace,
Packco and the Packco Subsidiaries will not, as of the Effective Time,
be parties to or bound by any Contract that materially limits the
ability of Grace after the Merger, Packco, the Surviving Corporation or
any of their respective subsidiaries to compete in any line of business
or with any person or in any geographic area, in each case with respect
to the Packaging Business or the business of Sealed Air as presently
conducted; (ii) neither Grace nor any of its subsidiaries is (with or
without the lapse of time or the giving of notice, or both) in breach or
default in any material respect under any Contract that is material to
the operation of the Packaging Business; (iii) to the knowledge of the
executive officers of Grace, none of the other parties to any Contract
that is material to the operation of the Packaging Business is (with or
without the lapse of time or the giving of notice, or both) in breach or
default in any material respect thereunder and (iv) neither Grace nor
any of its subsidiaries has received any written notice of the intention
of any party to terminate any Contract whether as a termination for
convenience or for default of Grace or any of its subsidiaries
thereunder.
(l) Employee Benefit Plans. (i) The Packaging Business
Disclosure Letter includes a complete list of all material employee
benefit plans, programs, policies, practices and other arrangements
(regardless of whether they are funded or unfunded or foreign or
domestic, but excluding any such plans, programs, policies, practices
and arrangements mandated or sponsored by a Governmental Entity with
respect to foreign Packco Employees) providing benefits to any current
or former Packco Employee or beneficiary or dependent thereof, sponsored
or maintained by Grace or any of its subsidiaries, with respect to the
Packaging Business, Packco or any of the Packco Subsidiaries, or to
which Grace or any of its subsidiaries, with respect to the Packaging
Business, Packco or any of the Packco Subsidiaries contributes or is
obligated to contribute (the "Packaging Business Plans"). Without
limiting the generality of the foregoing, the term "Packaging Business
Plans" includes all employee welfare benefit plans within the meaning of
Section 3(1) of ERISA and all employee pension benefit plans within the
meaning of Section 3(2) of ERISA; provided, that such list may not be
complete as of the date hereof as to Packaging Business Plans providing
benefits to foreign Packco Employees, but such list shall be updated so
as to be complete as to such Packaging Business Plans promptly following
the date hereof. The Packaging Business Disclosure Letter also
specifically identifies those Packaging Business Plans that are
sponsored, maintained or contributed to exclusively by Packco or any of
the Packco Subsidiaries exclusively for the benefit of Packco Employees
(the "Packaging Business-Only Plans").
(ii) With respect to each Packaging Business Plan providing
benefits to U.S. Packco Employees, Grace has delivered or made
available to Sealed Air and, with respect to each Packaging Business
Plan providing benefits to foreign Packco Employees, promptly
following the date hereof, Grace will deliver or make available to
Sealed Air, a true, correct and complete copy of each of the
following: (A) all plan documents and the current summary plan
descriptions (if any); (B) all benefit schedules, trust agreements
and insurance contracts and other funding vehicles, if any; (C) the
most recent Annual Report (Form 5500 Series) and accompanying
schedule, if any, or any similar filing made with any foreign
authority; (D) the most recent annual financial report, if any; (E)
the most recent actuarial report, if any; and (F) the most recent
determination letter from the IRS or similar document issued by any
other taxing authority, if any. Except as specifically provided in
the foregoing documents delivered or made available to Sealed Air,
there are no amendments to any Packaging Business Plan that have been
adopted or approved, nor has Grace or Packco undertaken to make any
such amendments.
(iii) The Packaging Business Disclosure Letter identifies each
Packaging Business Plan that is intended to be a "qualified plan"
within the meaning of Section 401(a) of the Code (the "Packco
Qualified Plans"). The IRS has issued a favorable determination
letter with respect to each Packco Qualified Plan, in each case that
has not been revoked, or an application for such a letter has been or
will be filed before the expiration of the remedial amendment period,
and Grace knows of no existing circumstances nor any events that have
occurred that could adversely affect the qualified status of any such
plan or the related trust. No Packaging Business-Only Plan is
intended to meet the requirements of Section 501(c)(9) of the Code.
(iv) Grace and its subsidiaries and Packco and the Packco
Subsidiaries have complied, and are now in compliance, in all
material respects, with all provisions of ERISA, the Code and all
other laws and regulations applicable to the Packaging Business-Only
Plans. There is not now, nor do any circumstances exist that could
give rise to, any requirement for the posting of security with
respect to any Packaging Business-Only Plan or the imposition of any
lien on the assets of Packco or a Packco Subsidiary under ERISA or
the Code. No prohibited transaction (as defined in ERISA) has
occurred with respect to any Packaging Business-Only Plan.
(v) No Packaging Business-Only Plan is a "multi-employer plan"
within the meaning of Section 4001(a)(3) of ERISA (a "Multiemployer
Plan") or a plan that has two or more contributing sponsors at least
two of whom are not under common control within the meaning of
Section 4063 of ERISA (a "Multiple Employer Plan"). There does not
now exist, nor do any circumstances exist that could result in, any
liability under (A) Title IV of ERISA, (B) Section 302 of ERISA,
(C) Sections 412 and 4971 of the Code, (D) the continuation coverage
requirements of Section 601 et seq. of ERISA and Section 4980B of the
Code, or (E) corresponding or similar provisions of foreign laws or
regulations, that would be a liability of Newco, Packco or a Packco
Subsidiary following the Effective Time, other than such liabilities
that arise solely out of, or relate solely to, the Packaging
Business-Only Plans.
(vi) All contributions required to be made to any Packaging
Business Plan by applicable law or regulation or by any plan document
or other contractual undertaking, and all premiums due or payable
with respect to insurance policies funding any Packaging Business
Plan, have been timely made or paid in full. Without limiting the
generality of the foregoing, all contributions to the Hourly SIP and
the Salaried SIP (each as defined in the Benefits Agreement) have
been timely made in accordance with past practice.
(vii) All Packaging Business Plans covering foreign Packco
Employees comply with applicable local law, except when the failure
to so comply, individually or in the aggregate, would not have a
Material Adverse Effect with respect to the Packco Group or the
Packaging Business.
(viii) Neither the execution and delivery of this Agreement nor
the consummation of the transactions contemplated hereby will (either
alone or in conjunction with any other event) result in, cause the
accelerated vesting or delivery of, or increase the amount or value
of, any payment or benefit to any Packco Employee. Without limiting
the generality of the foregoing, no amount paid or payable in
connection with the transactions contemplated hereby (either solely
as a result thereof or as a result of such transactions in
conjunction with any other event) will be an "excess parachute
payment" within the meaning of Section 280G of the Code.
(ix) To the knowledge of the executive officers of Grace, Grace
has, and, after the Effective Time, Packco will have, the right to
amend or terminate any Packaging Business Plan to the extent it
provides post-retirement medical and life insurance benefits under
U.S. Welfare Plans (as defined in the Benefits Agreement), other
than such benefits that the New Grace Group is responsible for
providing pursuant to the Benefits Agreement, and except as may be
required by any applicable collective bargaining agreement.
(m) Trademarks, Patents and Copyrights. Grace, Packco or a
Packco Subsidiary owns or possesses adequate licenses or other rights to
use all patents, trademarks, trade names, service marks, copyrights,
licenses and product licenses or registrations (including applications
for any of the foregoing), technology, know-how, tangible or intangible
proprietary intellectual property rights, information or material
(whether conceived, reduced to practice or under development), formulae,
inventions and new and investigational applications (including all
options or other rights to acquire any of the foregoing) as are
necessary, used or held for use in connection with the Packaging
Business (the "Packaging Business Intellectual Property"), the lack of
which would reasonably be expected to have a Material Adverse Effect
with respect to the Packco Group or the Packaging Business. None of
Grace, Packco or any of its subsidiaries has received any adverse claim
by any other person with respect to the Packaging Business Intellectual
Property or is aware, to the knowledge of the executive officers of
Grace, Packco and the Packco Subsidiaries, of any infringements with
respect thereto, and there is no infringement by Grace, Packco or any
Packco Subsidiary of the intellectual property rights of others, which,
in each case, would, individually or in the aggregate, reasonably be
expected to have a Material Adverse Effect with respect to the Packco
Group or the Packco Business. Except for matters that would not,
individually or in the aggregate, have a Material Adverse Effect with
respect to the Packaging Business, immediately after the Contribution,
Grace, Packco or a Packco Subsidiary will own or possess adequate
licenses or other rights to use (subject to the terms of the
Distribution Agreement, on substantially the same basis as currently
owned or possessed by Grace and its Subsidiaries) all of the Packaging
Business Intellectual Property. Except as contemplated by Section
2.01(d) of the Distribution Agreement, there are no Contracts,
agreements or licenses pursuant to which Grace or any subsidiaries of
Grace which are not a member of the Packco Group will retain rights or
interests of any kind in or affecting the Packaging Business
Intellectual Property.
5.3. Representations and Warranties of Sealed Air. Sealed Air
hereby represents and warrants to Grace that, except as set forth in a letter
delivered to Grace simultaneously with the execution and delivery of this
Agreement (the "Sealed Air Disclosure Letter"):
(a) Capital Stock. The authorized capital stock of Sealed Air
consists of 125,000,000 Sealed Air Common Shares, par value $.01 per
share, of which 42,624,246 were outstanding as of August 14, 1997, and
1,000,000 Sealed Air Preferred Shares, no par value, none of which was
outstanding as of such date. 157,858 Sealed Air Common Shares were held
in treasury by Sealed Air and its subsidiaries as of August 14, 1997.
As of August 14, 1997, there were outstanding under the Sealed Air
Amended Contingent Stock Plan and the Sealed Air Amended Restricted
Stock Plan for Non-Employee Directors and any other plan for employees or
directors of Sealed Air (collectively, the "Sealed Air Stock Plans") no
awards granting rights to acquire Sealed Air Common Shares (subject to
adjustment on the terms set forth in the Sealed Air Stock Plans). As of
August 14, 1997, there are no shares of capital stock of Sealed Air
reserved for issuance, other than 547,050 Sealed Air Common Shares
reserved for issuance pursuant to the Sealed Air Stock Plans. All
outstanding Sealed Air Common Shares have been duly authorized and
validly issued and are fully paid and nonassessable. Except for the
Sealed Air Common Shares, Sealed Air has outstanding no bonds,
debentures, notes or other obligations the holders of which have the
right to vote (or are convertible or exchangeable into or exercisable
for securities having the right to vote) with the shareholders of Sealed
Air on any matter. Each of the outstanding shares of capital stock of
each of Sealed Air's subsidiaries has been duly authorized and validly
issued and is fully paid and nonassessable and, except for an immaterial
number of shares held by officers and directors of Sealed Air and its
subsidiaries as required by applicable law, is owned, either directly or
indirectly, by Sealed Air free and clear of all liens, pledges, security
interests, claims, proxies, preemptive or subscriptive rights or other
encumbrances or restrictions of any kind. Except as set forth above and
except for awards and Sealed Air Common Shares issued after August 14,
1997 pursuant to the terms of the Sealed Air Profit Sharing Plan in
accordance with Section 6.1(c), there are no shares of capital stock of
Sealed Air authorized, issued or outstanding and there are no preemptive
rights or any outstanding subscriptions, options, puts, calls, warrants,
rights, convertible or exchangeable securities or other agreements or
commitments of Sealed Air or any of its subsidiaries of any character
relating to the issued or unissued capital stock or other securities of
Sealed Air (including, without limitation, the issuance, sale, purchase,
redemption, conversion, exchange, redemption, voting or transfer
thereof). As of the Effective Time, the number of Sealed Air Common
Shares outstanding (including any awards pursuant to the Sealed Air
Stock Plans) shall not exceed the number outstanding as of August 14,
1997, except to the extent that such excess is reflected in an
adjustment to the Per Share Common Consideration (as defined in the
Distribution Agreement) as provided in the definition thereof.
(b) Corporate Organization and Qualification. Each of Sealed Air
and its subsidiaries is a corporation duly organized, validly existing
and in good standing under the laws of its or such subsidiary's
jurisdiction of organization and is in good standing (if recognized in
such jurisdiction, or, if not, duly qualified) as a foreign corporation
in each jurisdiction where the properties owned, leased or operated, or
the business conducted, by it or such subsidiary require such
qualification, except for any such failure so to qualify or be in good
standing which, when taken together with all other such failures, is not
reasonably likely to have a Material Adverse Effect with respect to
Sealed Air. Each of Sealed Air and its subsidiaries has the requisite
corporate power and authority and all material governmental licenses and
approvals to carry on its businesses as they are now being conducted.
Sealed Air has made available to the other parties hereto a complete and
correct copy of its Certificate of Incorporation and By-laws, each as
amended to date and currently in full force and effect.
(c) Corporate Authority. Subject only to the receipt of the
requisite approval of its shareholders to consummate the Merger, Sealed
Air has the requisite corporate power and authority and has taken all
corporate action necessary in order to execute, deliver and perform each
Transaction Agreement to which it is a party and to consummate the
transactions contemplated hereby and thereby, including, without
limitation, the approval of the Sealed Air Board and the resolution of
the Sealed Air Board to recommend, subject to their fiduciary duties,
the transactions contemplated hereby and thereby for approval by Sealed
Air shareholders. Each Transaction Agreement to which Sealed Air is a
party is, or when executed and delivered shall be, a valid and binding
agreement of Sealed Air enforceable in accordance with its terms. The
affirmative vote of the holders of a majority of outstanding Sealed Air
Common Shares in favor of the Merger is the only vote of the holders of
Sealed Air's capital stock necessary in connection with the consummation
of the Merger.
(d) Governmental Filings; No Violations. (i) Other than as may
be required under the HSR Act and similar statutes in other countries,
the Exchange Act, the Securities Act, and state securities laws, no
notices, reports or other filings are required to be made by Sealed Air
or any of its subsidiaries with, nor are any consents, registrations,
approvals, permits or authorizations required to be obtained by it or
any such subsidiary from, any Governmental Entity in connection with the
execution, delivery or performance of each Transaction Agreement to
which Sealed Air is a party and the consummation by Sealed Air of the
transactions contemplated hereby and thereby, except for such matters as
would not, individually or in the aggregate, have a Material Adverse
Effect with respect to Sealed Air or prevent or materially delay or
enable any person to enjoin consummation of the transactions
contemplated hereby and thereby.
(ii) The execution, delivery and performance by Sealed Air of
each Transaction Agreement to which it is a party does not or will not,
and the consummation by it of any of the transactions contemplated
hereby and thereby will not, constitute or result in (with or without the
giving of notice, the lapse of time or both) (A) a breach or violation
of, or a default under, its Certificate of Incorporation or By-laws, or
(B) a breach or violation of, or a default under, or an acceleration or
termination of or change in the rights or obligations of any party
under, or the creation of a lien, pledge, security interest or other
encumbrance on any assets pursuant to, any provision of any Contracts of
it or any of its subsidiaries or any law, rule, ordinance or regulation
or judgment, decree, order, award or governmental or non-governmental
permit or license to which it or any of its subsidiaries is subject,
except, in the case of clause (B) above, for such breaches, violations,
defaults, accelerations or changes that are disclosed in the Sealed Air
Disclosure Letter or, individually and in the aggregate, are not
reasonably likely to have a Material Adverse Effect with respect to
Sealed Air or prevent or materially delay or enable any person to enjoin
consummation of the Reorganization.
(e) SEC Documents; Financial Statements; No Undisclosed
Liabilities. (i) Sealed Air has filed all forms, reports and documents
required to be filed by it under the Exchange Act or the Securities Act
since December 31, 1994. As of its filing date, each such SEC Document
filed, and each SEC Document that will be filed by Sealed Air or its
subsidiaries prior to the Effective Time, as amended or supplemented, if
applicable, pursuant to the Exchange Act or the Securities Act (A)
complied or will comply in all material respects with the applicable
requirements of the Exchange Act or the Securities Act and (B) did not
or will not contain any untrue statement of a material fact or omit to
state any material fact necessary in order to make the statements made
therein, in the light of the circumstances under which they were made,
not misleading. Each of Sealed Air's consolidated balance sheets
included in or incorporated by reference into its SEC Documents fairly
presents in all material respects the consolidated financial position of
it and its subsidiaries as of the dates set forth therein, and each of
the consolidated statements of earnings, cash flows and shareholders'
equity included in or incorporated by reference into its SEC Documents
(including any related notes and schedules) fairly presents in all
material respects the consolidated results of operations, cash flows and
shareholders' equity, as the case may be, of Sealed Air and its
subsidiaries for the periods set forth therein (subject, in the case of
unaudited statements, to normal year-end audit adjustments), in each
case in accordance with US GAAP (applied on a consistent basis).
(ii) Except as disclosed in its SEC Documents filed with the SEC
prior to the date hereof, neither Sealed Air nor any of its subsidiaries
has any liabilities of any kind whatsoever, whether or not accrued,
contingent or otherwise, that, individually or in the aggregate, are
reasonably likely to have a Material Adverse Effect with respect to
Sealed Air.
(f) Absence of Certain Events and Changes. Except as disclosed
in its SEC Documents filed with the SEC prior to the date hereof, since
December 31, 1996, Sealed Air and its subsidiaries have conducted their
respective businesses only in the ordinary course of such businesses,
and there has not been any change or development or combination of
changes or developments (including any worsening of any condition
currently existing) which, individually or in the aggregate, is
reasonably likely to result in a Material Adverse Effect with respect to
Sealed Air.
(g) Compliance with Laws. Except as disclosed in its SEC
Documents filed with the SEC prior to the date hereof, Sealed Air and
its subsidiaries have complied with all applicable federal, state, local
and foreign statutes, laws, regulations, ordinances, rules, judgments,
orders or decrees applicable thereto, except where the failure to comply
is not reasonably likely, individually and in the aggregate, to have a
Material Adverse Effect with respect to Sealed Air. Sealed Air and its
subsidiaries have, and, immediately after the Merger, will have, all
permits, licenses, certificates of authority, orders, and approvals of,
and has and will have made all filings, applications, and registrations
with, federal, state, local, and foreign Governmental Entities that are
required in order to permit it or such subsidiary to carry on its
business as it is presently conducted, except for such permits, licenses,
certificates, orders, filings, applications and registrations, the
failure to have or make which, individually or in the aggregate, are not
reasonably likely to have a Material Adverse Effect with respect to
Sealed Air.
(h) Title to Assets. Except as disclosed in its SEC Documents
filed with the SEC prior to the date hereof, Sealed Air or its
subsidiaries have and, immediately after the Merger, will:
(i) have good and valid title to its properties and assets
(including, without limitation, all assets reflected on the
audited 1996 balance sheet of Sealed Air, except for such assets
as were sold since December 31, 1996 in the ordinary course of
business and not in violation of this Agreement), free and clear of
any Liens; and
(ii) own or have adequate rights to use all assets
currently used or held for use by Sealed Air and its subsidiaries,
and such rights are sufficient to permit Sealed Air to continue to
operate Sealed Air's business as currently conducted by Sealed Air
and its subsidiaries;
in each case except for such matters as would not, individually or in
the aggregate, have a Material Adverse Effect on Sealed Air.
(i) Litigation. Except as disclosed in Sealed Air's SEC
Documents filed with the SEC prior to the date hereof, there are no
civil, criminal or administrative actions, suits, claims, hearings or
proceedings pending or, to the knowledge of its executive officers,
threatened, or investigations pending, against Sealed Air or any of its
subsidiaries that, individually or in the aggregate, are reasonably
likely to have a Material Adverse Effect with respect to Sealed Air.
There are no judgments or outstanding orders, writs, injunctions,
decrees, stipulations or awards (whether rendered or issued by a court
or Governmental Entity, or by arbitration) against Sealed Air or any of
its subsidiaries or their respective properties or businesses, which are
reasonably likely, individually or in the aggregate, to have a Material
Adverse Effect with respect to Sealed Air.
(j) Taxes. Except as reflected in Sealed Air's SEC Documents
filed with the SEC prior to the date hereof, and except for such matters
that, individually or in the aggregate, are not reasonably likely to
have a Material Adverse Effect with respect to Sealed Air, (i) all
federal, state, local and foreign tax returns required to be filed by or
on behalf of Sealed Air or any of its subsidiaries have been timely
filed, or requests for extensions have been timely filed and have been
granted and not expired, and all such filed returns are complete and
accurate; (ii) all taxes shown as due and payable on returns filed by
Sealed Air or any of its subsidiaries have been paid in full; (iii)
there is no outstanding audit examination, deficiency, or refund
litigation with respect to any taxes of Sealed Air or any of its
subsidiaries; (iv) all taxes, interest, additions and penalties due with
respect to completed and settled examinations or concluded litigation
relating to Sealed Air or any of its subsidiaries have been paid in full
or have been recorded as a liability on the balance sheet of Sealed Air
(in accordance with US GAAP); (v) neither Sealed Air nor any of its
subsidiaries is a party to a tax sharing or similar agreement or any
agreement pursuant to which it or any of its subsidiaries has
indemnified another party with respect to taxes; and (vi) neither Sealed
Air nor any of its subsidiaries has waived any applicable statute of
limitations with respect to any taxes.
(k) Contracts and Commitments. Except as set forth in the Sealed
Air Disclosure Letter, and except for matters that would not,
individually or in the aggregate, have a Material Adverse Effect with
respect to Sealed Air, (i) Sealed Air and its subsidiaries will not, as
of the Effective Time, be parties to or bound by any Contract that
materially limits the ability of Grace after the Merger, Packco, the
Surviving Corporation or any of their respective subsidiaries to compete
in any line of business or with any person or in any geographic area;
(ii) neither Sealed Air nor any of its subsidiaries is (with or without
the lapse of time or the giving of notice, or both) in breach or default
in any material respect under any Contract that is material to the
operation of Sealed Air; (iii) none of the other parties to any Contract
that is material to the operation of Sealed Air is (with or without the
lapse of time or the giving of notice, or both) in breach or default in
any material respect thereunder; and (iv) neither Sealed Air nor any of
its subsidiaries has received any written notice of the intention of any
party to terminate any such Contract whether as a termination for
convenience or for default of Sealed Air or any of its subsidiaries
thereunder.
(l) Employee Benefits. (i) The Sealed Air Disclosure Letter
includes a complete list of all material employee benefit plans,
programs, policies, practices and other arrangements (regardless of
whether they are funded or unfunded or foreign or domestic, but
excluding any such plans, programs, policies, practices and arrangements
mandated or sponsored by a Governmental Entity with respect to foreign
employees) providing benefits to any current or former employee of
Sealed Air or any of its subsidiaries (collectively, "Sealed Air
Employees") or beneficiary or dependent thereof, sponsored or maintained
by Sealed Air or any of its subsidiaries, or to which Sealed Air or any
of its subsidiaries contributes or is obligated to contribute (the
"Sealed Air Plans"); provided, that such list may not be complete as of
the date hereof as to Sealed Air Plans providing benefits to foreign
Sealed Air Employees, but such list shall be updated so as to be
complete as to such Sealed Air Plans promptly following the date hereof.
Without limiting the generality of the foregoing, the term "Sealed Air
Plans" includes all employee welfare benefit plans within the meaning of
Section 3(1) of ERISA and all employee pension benefit plans within the
meaning of Section 3(2) of ERISA.
(ii) With respect to each Sealed Air Plan providing benefits to
U.S. Sealed Air Employees, Sealed Air has delivered or made
available to Grace, and with respect to each Sealed Air Plan
providing benefits to foreign Sealed Air Employees, promptly
following the date hereof, Sealed Air will deliver or make available
to Grace, a true, correct and complete copy of each of the following:
(A) all plan documents, (B) all benefit schedules, trust agreements
and insurance contracts and other funding vehicles, and the current
summary plan descriptions (if any); (C) the most recent Annual
Report (Form 5500 Series) and accompanying schedule, if any, or any
similar filing made with any foreign authority; (D) the most recent
annual financial report, if any; (E) the most recent actuarial
report, if any; and (F) the most recent determination letter from the
IRS or similar document issued by any other taxing authority, if any.
Except as specifically provided in the foregoing documents delivered
or made available to each of the parties hereto, there are no
amendments to any Sealed Air Plan that have been adopted or approved,
nor has Sealed Air undertaken to make any such amendments.
(iii) The Sealed Air Disclosure Letter identifies each Sealed Air
Plan that is intended to be a "qualified plan" within the meaning of
Section 401(a) of the Code ("Sealed Air Qualified Plans"). The IRS
has issued a favorable determination letter with respect to each
Sealed Air Qualified Plan, in each case that has not been revoked, or
application for such a letter has been or will be filed before the
expiration of the remedial amendment period, and Sealed Air knows of
no existing circumstances nor any events that have occurred that
could adversely affect the qualified status of any such plan or the
related trust. No Sealed Air Plan is intended to meet the
requirements of Section 501(c)(9) of the Code.
(iv) Sealed Air and its subsidiaries have complied, and are now
in compliance, in all material respects with all provisions of ERISA,
the Code and all other laws and regulations applicable to the Sealed
Air Plans. There is not now, nor do any circumstances exist that
could give rise to, any requirement for the posting of security with
respect to any Sealed Air Plan or the imposition of any lien on the
assets of Sealed Air under ERISA or the Code. No prohibited
transaction (as defined in ERISA) has occurred with respect to any
Sealed Air Plan.
(v) All contributions required to be made to any Sealed Air
Plan by applicable law or regulation or by any plan document or other
contractual undertaking, and all premiums due or payable with respect
to insurance policies funding any Sealed Air Plan, have been timely
made or paid in full.
(vi) No Sealed Air Plan currently sponsored or maintained by
Sealed Air, any of its subsidiaries or any of their respective ERISA
Affiliates is subject to Title IV or Section 302 of ERISA or Section
412 or 4971 of the Code. Without limiting the generality of the
foregoing, no Sealed Air Plan is a Multiemployer Plan or a Multiple
Employer Plan, nor has Sealed Air or any ERISA Affiliate of Sealed
Air, at any time since September 2, 1974, contributed to or been
obligated to contribute to any Multiemployer Plan or Multiple
Employer Plan. There does not now exist, nor do any circumstances
exist that could result in, any liability under (A) Title IV of
ERISA, (B) Section 302 of ERISA, (C) Sections 412 and 4971 of the
Code, (D) the continuation coverage requirements of Section 601 et
seq. of ERISA and Section 4980B of the Code, or (E) corresponding or
similar provisions of foreign laws or regulations, that would be a
liability of Sealed Air or any of its subsidiaries following the
Effective Time, other than such liabilities that arise solely out of,
or relate solely to, the Sealed Air Plans.
(vii) Neither Sealed Air nor any of its subsidiaries has any
obligations for retiree health and life benefits under any Sealed Air
Plan.
(viii) All Sealed Air Plans covering foreign Sealed Air Employees
comply with applicable local law, except when the failure to so
comply, individually or in the aggregate, would not have a Material
Adverse Effect with respect to Sealed Air.
(ix) Neither the execution and delivery of this Agreement nor
the consummation of the transactions contemplated hereby will (either
alone or in conjunction with any other event) result in, cause the
accelerated vesting or delivery of, or increase the amount or value
of, any payment or benefit to any Sealed Air Employee. Without
limiting the generality of the foregoing, no amount paid or payable
in connection with the transactions contemplated hereby (either
solely as a result thereof or as a result of such transactions in
conjunction with any other event) will be an "excess parachute
payment" within the meaning of Section 280G of the Code. Sealed Air
and its subsidiaries have not entered into any change-of-control
agreements under which Sealed Air will be obligated to make change-
of-control payments following the Merger.
(m) Environmental Matters. Except as disclosed in its SEC
Documents filed prior to the date hereof and except for such matters
that, individually and in the aggregate, are not reasonably likely to
have a Material Adverse Effect with respect to Sealed Air, (i) Sealed
Air and its subsidiaries are and have been in compliance with all
applicable Environmental Laws; (ii) Sealed Air and its subsidiaries hold
and have held all permits under any Environmental Law required for the
operation of their respective businesses as presently conducted and are
in compliance with the terms of such permits; and (iii) neither Sealed
Air nor any of its subsidiaries has received any outstanding written
notices, demand letters, claims or requests for information, nor has any
complaint been filed, penalty assessed, nor is any investigation,
action, claim, suit, proceeding or review pending (with respect to which
Sealed Air has been provided notice), or, to the knowledge of the
executive officers of Sealed Air, threatened by any Governmental Entity
or any third party that assert that Sealed Air or any of its
subsidiaries may be in violation of, or liable under, any Environmental
Law (including as an indemnitor in connection with any threatened or
asserted claim by any third party indemnitee), and none of Sealed Air,
its subsidiaries or its properties is subject to any citation, court
order, administrative order or decree arising under any Environmental
Law. None of the real property owned or leased by Sealed Air or any of
its subsidiaries is listed on, or, to the knowledge of Sealed Air's
executive officers, proposed for listing on the "National Priorities
List" under CERCLA, or any similar state, local or foreign list of sites
requiring investigation or cleanup.
(n) Takeover Statutes; Rights Plans. The execution, delivery and
performance of this Agreement and consummation of the transactions
contemplated hereby will not cause to be applicable to Sealed Air any
Takeover Statute (after giving effect to any actions that will be taken
prior to the Effective Time). Sealed Air does not have any preferred
share purchase rights plan or similar rights plan in effect.
(o) Brokers and Finders. Neither Sealed Air nor any of its
subsidiaries or any of their respective officers, directors or employees
has employed any broker or finder or incurred any liability for any
brokerage fees, commissions or finders' fees in connection with the
transactions contemplated herein, except pursuant to arrangements
disclosed in writing to the other parties hereto prior to the date
hereof.
(p) Trademarks, Patents and Copyrights. Sealed Air and its
subsidiaries own or possess adequate licenses or other rights to use all
patents, trademarks, trade names, service marks, copyrights, licenses
and product licenses or registrations (including applications for any of
the foregoing), technology, know-how, tangible or intangible
proprietary intellectual property rights, information or material
(whether conceived, reduced to practice or under development), formulae,
inventions and new and investigational applications (including all
options or rights to acquire any of the foregoing) as are necessary,
used or held for use in connection with its business (the "Sealed Air
Intellectual Property"), the lack of which would reasonably be expected
to have a Material Adverse Effect with respect to Sealed Air. None of
Sealed Air or any of its subsidiaries has received any adverse claim by
any other person with respect to the Sealed Air Intellectual Property
or is aware, to the knowledge of the executive officers of Sealed Air
and its subsidiaries, of any infringement with respect thereto, and
there is no infringement by Sealed Air or its subsidiaries of the
intellectual property rights of others, which, in each case, would,
individually or in the aggregate, reasonably be expected to have a
Material Adverse Effect with respect to Sealed Air. Except for matters
that would not, individually or in the aggregate, have a Material
Adverse Effect with respect to Sealed Air, immediately after the Merger,
the Surviving Corporation and its subsidiaries will own or possess
adequate licenses or other rights to use (on substantially the same
basis as currently owned or possessed by Sealed Air and its
subsidiaries) all of the Sealed Air Intellectual Property.
(q) Tax Matters. At the Effective Time, the representations set
forth in the Tax Matters Certificates of Sealed Air, substantially in
the form of Exhibit B (the "Sealed Air Tax Matters Certificate"), will
be true and correct in all respects, and such representations are hereby
incorporated herein by reference with the same effect as if set forth
herein in their entirety.
(r) Disclosure. The representations and warranties of Sealed Air
contained in this Agreement or in any written instrument, exhibit or
certificate furnished or to be furnished by Sealed Air to Grace pursuant
hereto or in connection herewith do not contain any untrue statement of
a material fact or omit to state a material fact necessary in order to
make the statements contained therein not misleading.
ARTICLE VI
COVENANTS
6.1. Interim Operations. Each of Grace and Sealed Air covenants
and agrees as to itself and its subsidiaries that, from and after the date
hereof until the Effective Time, except insofar as the other parties shall
otherwise consent or except as otherwise contemplated by this Agreement, the
Transaction Agreements or its Disclosure Letters (provided that, as used in
this Section, all references to Grace (and/or its Affiliates) shall be deemed
to refer to Grace and all of the Subsidiaries of Grace (in each case only with
respect to the Packaging Business), the Packco Group and the Packaging
Business except as otherwise specifically provided):
(a) The business of it and its subsidiaries will be conducted
only in the ordinary and usual course and it and its subsidiaries will
use all reasonable efforts to preserve their business organization
intact and maintain their existing relations with customers, suppliers,
employees and business associates.
(b) It will not (i) sell or pledge or agree to sell or pledge any
stock owned, directly or indirectly, by it in any of its subsidiaries,
(ii) amend its Certificate of Incorporation or By-laws (or similar
organizational document); (iii) split, combine or reclassify any
outstanding capital stock; or (iv) declare, set aside or pay any
dividend payable in stock or property with respect to any of its capital
stock (other than, in the case of Grace, regular quarterly cash
dividends consistent with Grace's current practice, and intercompany
dividends).
(c) Neither it nor any of its subsidiaries will issue, sell,
pledge, dispose of or encumber, or authorize or propose the issuance,
sale, pledge, disposition or encumbrance of, any shares of, or
securities convertible or exchangeable for, or options, puts, warrants,
calls, commitments or rights of any kind to acquire, any shares of its
capital stock of any class other than common shares issuable pursuant to
options, awards, warrants and other convertible securities outstanding
on the date hereof and disclosed herein, provided that notwithstanding
the foregoing (A) Grace may grant options to acquire Grace Common Shares
so long as such options will not, after the Recapitalization, be or
become options to purchase capital stock or other securities of Newco or
any of its subsidiaries, and (B) in the ordinary course of business,
Sealed Air may grant awards to acquire Sealed Air Common Shares or make
all or part of its contribution to the Sealed Air Profit Sharing Plan in
the form of Sealed Air Common Shares.
(d) Neither it nor any of its subsidiaries will (i) other than in
the ordinary course of business, transfer, lease, license, guarantee,
sell, mortgage, pledge or dispose of any property or assets or encumber
any property or assets, or make any material acquisition of, or
investment in, assets, stock or other securities of any other person or
entity (other than its wholly-owned subsidiaries); or (ii) transfer,
license, sell, pledge or dispose of any material Intellectual Property
rights.
(e) Except as required or contemplated by agreements or
arrangements disclosed in its SEC Documents or its Disclosure Letter,
neither it nor any of its subsidiaries will grant any severance or
termination pay to, or enter into, extend or amend any employment,
consulting, severance or other compensation agreement with, any director
or officer or, other than in the ordinary course of business consistent
with past practice, other employees, except that the foregoing shall not
prohibit Grace from entering into any such agreement or arrangement that
will not be binding upon Newco or any of its subsidiaries after the
Reorganization.
(f) Except as may be required to satisfy contractual obligations
existing as of the date hereof (and disclosed in its Disclosure Letter)
and the requirements of applicable law, and except in the ordinary and
usual course of business, neither it nor any of its subsidiaries will
establish, adopt, enter into, make, amend or make any elections under
any collective bargaining, bonus, profit sharing, thrift, compensation,
stock option, restricted stock, pension, retirement, employee stock
ownership, deferred compensation, employment, termination, severance or
other plan, agreement, trust, fund, policy or arrangement for the
benefit of any directors, officers or employees that would be binding on
Newco or any of its subsidiaries after the Reorganization.
(g) It will not implement any change in its accounting
principles, practices or methods, other than as may be required by US
GAAP, and other than as may be necessary or advisable in connection with
the Reorganization.
(h) Neither Sealed Air nor Grace will adopt or propose any change
in its certificate of incorporation or bylaws.
(i) Grace agrees to use its reasonable best efforts to cause each
person that holds any shares of a Packco Subsidiary constituting
directors qualifying shares to deliver at the Effective Time such shares
at the direction of Sealed Air.
(j) Neither it nor any of its subsidiaries (including in the case
of Grace, all members of the New Grace Group) shall intentionally take
any action knowing that such action would cause a breach of a
representation or warranty herein.
(k) It and its subsidiaries will conduct cash management
operations (including the collection of accounts receivable and
realization of cash from other assets and the payment of trade payables
and other liabilities) only in the ordinary and usual course of
business, consistent with past practices, and, except as contemplated by
the Transaction Agreements, all transactions between the Packco Group or
the Packaging Business, on the one hand, and the New Grace Group or the
New Grace Business, on the other, shall only be in the ordinary and
usual course of business, consistent with the past practices.
(l) Neither it nor any of its subsidiaries will authorize or
enter into an agreement to take any of the actions referred to in
paragraphs (a) through (k) above.
6.2. Certain Transactions.
(a) It is understood and agreed by the parties hereto that,
pursuant to the Distribution Agreement, at the time of the Reorganization and
subject to Section 2.02 of the Distribution Agreement, neither Grace nor any
member of the Packco Group shall have cash or marketable securities, it being
contemplated that, in connection with the Reorganization, such cash and
marketable securities shall be provided to Grace-Conn.
(b) Prior to the Distribution, Grace shall cause each of the
parties to the Distribution Agreement, the Tax Sharing Agreement and the
Benefits Agreement to duly enter into such agreements, which agreements shall
not be amended without the consent of Sealed Air, which will not be
unreasonably withheld.
6.3. Acquisition Proposals. Each party hereto agrees that
neither it nor any of its subsidiaries nor any of its respective officers and
directors or the officers and directors of its subsidiaries shall, and it
shall each direct and use its best efforts to cause its employees, agents and
representatives (including, without limitation, any investment banker, attorney
or accountant retained by it or any of its subsidiaries) not to, initiate,
solicit or encourage, directly or indirectly, any inquiries or the making or
implementation of any proposal or offer with respect to a merger, acquisition,
consolidation, business combination, recapitalization or similar transaction
involving, or any purchase of all or any significant portion of the assets or
any equity securities of, it or any of its subsidiaries (any such proposal or
offer being hereinafter referred to as an "Acquisition Proposal") or provide
any confidential information or data to, or have any discussions or engage in
any negotiations with, any person relating to an Acquisition Proposal;
provided, however, that the Grace Board or the Sealed Air Board may furnish or
cause to be furnished information (pursuant to confidentiality arrangements)
and may participate in such discussions and negotiations directly or through
its representatives if (i) the failure to provide such information or
participate in such negotiations and discussions would, in the opinion of its
outside counsel, cause the members of the Grace Board or the Sealed Air Board,
as the case may be, to breach their fiduciary duties under applicable law or
(ii) another person makes a written offer or written proposal that was not
solicited and did not otherwise result from a breach of this Section 6.3 and
which, based upon the identity of the person making such offer or proposal,
the terms thereof and the availability of adequate financing therefor, the
Grace Board or the Sealed Air Board, as the case may be, believes, in the good
faith exercise of its business judgment and based upon advice of its outside
legal and financial advisors, could reasonably be expected to be consummated
and represents a transaction more favorable to its shareholders than the
Reorganization (a "Higher Offer"); provided further, however, that the term
"Acquisition Proposal" shall not include a proposal exclusively involving all
or part of the stock or assets of New Grace and the New Grace Business so long
as any such proposal (and the consummation thereof) will not adversely affect
the transactions contemplated hereby. Grace or Sealed Air, as the case may be,
shall notify the other party hereto as soon as practicable if any such
inquiries or proposals are received by, any such information is requested
from, or any such negotiations or discussions are sought to be initiated or
continued with it, which notice shall include the identity of the interested
person and the material terms and conditions of any inquiry, request for
information, offer or proposal. Thereafter, the party giving the notice shall
keep the other reasonably informed of the status and details of any such
inquiry, request for information, offer or proposal, discussion or
negotiations.
6.4. Information Supplied. Each of the parties hereto agrees
that none of the information supplied or to be supplied by it for inclusion or
incorporation by reference in any Registration Statement, the Joint Proxy
Statement or Schedule 14A, or any amendment or supplement thereto, will, in
the case of a Registration Statement, at the time such Registration Statement
and each amendment and supplement thereto becomes effective under the
Securities Act, or, in the case of a Joint Proxy Statement or Schedule 14A, at
the time such Joint Proxy Statement or Schedule 14A and each amendment and
supplement thereto is filed in definitive form with the SEC or mailed to
shareholders and at the time of the applicable Meeting, contain any untrue
statement of a material fact or omit to state any material fact required to be
stated therein or necessary in order to make the statements therein not
misleading. All documents that either party is responsible for filing with
the SEC in connection with the Reorganization will comply as to form and
substance in all material respects with the applicable requirements of the
Exchange Act.
6.5. Shareholder Approvals. Each of Grace and Sealed Air agrees
to take, in accordance with applicable law and its Certificate of
Incorporation and By-laws, all action necessary to convene a meeting of
holders of Grace Common Shares and Sealed Air Common Shares, respectively, as
promptly as practicable after the Registration Statements are declared
effective, and the Joint Proxy Statement is cleared, by the SEC, to consider
and vote upon the approval of the transactions contemplated by the Transaction
Agreements (including, without limitation, the Grace Amendment). Subject to
the remainder of this Section 6.5, each of the Grace Board and the Sealed Air
Board shall recommend such adoption and approval and shall take all lawful
action to solicit such approval by shareholders. The Grace Board or the
Sealed Air Board, as the case may be, may fail to make such a recommendation,
or withdraw, modify, or change any such recommendation, or recommend another
offer or proposal, if (i) the making of such recommendation or failing to
withdraw, modify or change its recommendation or to recommend another offer or
proposal would, in the opinion of its outside counsel, cause the members of
the Grace Board or the Sealed Air Board, as the case may be, to breach their
fiduciary duties under applicable law, or (ii) there is a Higher Offer. In
such event, notwithstanding anything contained in this Agreement to the
contrary, any such failure to recommend, withdrawal, modification or change of
recommendation or recommendation of such other offer or proposal, or the
entering by Grace or Sealed Air into an agreement with respect to a Higher
Offer (provided that Grace or Sealed Air, as the case may be, shall have
provided the other party with at least four days' prior notice of its
intention to enter into such agreement and the identity of the other party
thereto and the material terms and conditions of the agreement to be entered
into with such person), shall not constitute a breach of this Agreement by
Grace or Sealed Air, as the case may be.
6.6. Filings; Other Actions. (a) Subject to the obligations of
consultation contained herein, Grace and Sealed Air shall promptly prepare for
filing the Grace Registration Statement and the Joint Proxy Statement to be
mailed to their shareholders, and Grace shall prepare the New Grace
Registration Statement (and related prospectus forming a part thereof to be
mailed to the Grace shareholders), in each case in connection with the
Reorganization. In connection with the foregoing, Grace shall prepare audited
annual and unaudited interim financial statements prepared in accordance with
US GAAP and in compliance with Regulation S-K under the Securities Act for the
Packaging Business (including Grace after giving effect to the Distribution)
and for the New Grace Business, and such financial statements shall be
included in the Registration Statements and the Joint Proxy Statement as may
be appropriate. Each party hereto shall use its reasonable efforts, after
consultation with the other parties hereto, to respond promptly to any comments
made by the SEC with respect to such filings, to have such filings declared
effective or cleared, as the case may be, and cause such filings to be mailed
at the earliest reasonably practicable time. Each party hereto and its
counsel shall be given a reasonable opportunity to review and comment on each
version of such filings prior to the filing thereof with the SEC. Each party
hereto also shall use its reasonable efforts to obtain all necessary state
securities law or blue sky permits and approvals required to carry out the
transactions contemplated hereby and shall furnish all information as may be
reasonably requested in connection with any such action.
(b) Each party hereto shall cooperate with the other parties
hereto, subject to the terms and conditions set forth herein, use its
reasonable efforts promptly to prepare and file all necessary documentation,
to effect all necessary applications, notices, petitions, filings and other
documents, and to obtain as promptly as reasonably practicable all necessary
permits, consents, orders, approvals and authorizations of, or any exemption
by, all third parties and Governmental Entities necessary or advisable to
consummate the transactions contemplated hereby. Each party hereto shall
consult with the other parties hereto with respect to the obtaining of all
permits, consents, approvals and authorizations of all third parties and
Governmental Entities necessary or advisable to consummate the transactions
contemplated hereby, and each party shall keep the other parties hereto
apprised of the status of matters relating to completion of the transactions
contemplated hereby.
(c) Each party hereto shall, upon reasonable request and except
as otherwise may be required by applicable law, furnish the other parties
hereto with all information concerning itself, its subsidiaries, directors,
officers, shareholders and other Affiliates and such other matters as may be
reasonably necessary or advisable in connection any statement, filing, notice
or application made by or on behalf of such other party or any of its
Affiliates to any Governmental Entity in connection with any transactions
contemplated by this Agreement.
(d) Each party hereto shall, subject to applicable laws
relating to the disclosure and exchange of information, promptly furnish
the other parties hereto with copies of written communications received by
each such party or any of its subsidiaries, from, or delivered by any of
the foregoing to, any Governmental Entity in respect of the transactions
contemplated hereby.
(e) Each party hereto shall cooperate with each other party
hereto and shall use reasonable efforts to take or cause to be taken all
actions and do or cause to be done all things reasonably necessary, proper or
advisable to obtain favorable review of the proposed transaction under the HSR
Act and any foreign antitrust or competition laws.
6.7. Audited Financial Statements; Comfort Letters. (a) Grace
shall prepare, as promptly as practicable, audited annual and unaudited
interim financial statements with respect to each of the New Grace Group and
the Packco Group, as described in Section 6.6(a) hereto. Grace shall deliver
to Sealed Air copies of any such financial statements relating to the
Packaging Business, which shall be certified without qualification by Price
Waterhouse LLP or other nationally recognized accounting firm reasonably
acceptable to Sealed Air (the "Packaging Business Financial Statements").
(b) Each of Grace and Sealed Air shall use all reasonable efforts
to cause to be delivered to the other party, as appropriate, and its directors
letters of its independent accountants, dated (i) the date on which each
Registration Statement shall become effective and (ii) a date shortly prior to
the Effective Time, and addressed to such other party and its directors, in
form and substance customary for "comfort" letters delivered by independent
accountants in connection with registration statements.
6.8. Access. Upon reasonable notice, and except as may otherwise
be required by applicable law, each party hereto shall afford each other
party's Representatives access, during normal business hours throughout the
period until the Effective Time, to its properties, books, Contracts and
records and, during such period, shall (and shall cause each of its
subsidiaries to) furnish promptly to the other party all information
concerning its business, properties and personnel as may reasonably be
requested; provided that no investigation pursuant to this Section 6.8 shall
affect or be deemed to modify any representation or warranty made by the party
furnishing such information; provided further that with respect to the work
papers of independent accountants or any other contract, document, information
or other material the provision of which is not permitted without the consent
of a third party, the provision of access shall be subject to the permission
of such independent accountants or such third party, and each party hereto
shall use reasonable efforts to secure such permission for the other. Each
party hereto shall not, and shall cause its respective Representatives not to,
use any information obtained pursuant to this Section 6.8 for any purpose
unrelated to the consummation of the transactions contemplated by the
Transaction Agreements. All information obtained pursuant to this paragraph
shall be subject to the provisions of the written confidentiality arrangements
existing among the parties hereto.
6.9. Notification of Certain Matters. Each party shall give
prompt notice to the other party of (i) any material inaccuracy in any
representation or warranty made by it in this Agreement, (ii) any material
failure by it to comply with any of its covenants or agreements under this
Agreement and (iii) any change or event that is reasonably likely to result in
any Material Adverse Effect or to delay, in any substantial respect, or
prevent consummation of the Reorganization, in each case to the knowledge of
the executive officers.
6.10. Publicity. The initial press release relating hereto shall
be a joint press release and, thereafter, each party hereto shall consult with
each other party hereto prior to issuing any press releases or otherwise
making public statements with respect to the transactions contemplated hereby
and prior to making any filings with any Governmental Entity or stock exchange
with respect thereto; provided that, if a party shall be advised by counsel
that any such press release, statement or filing is required by applicable law
and it shall not be practicable to consult with the other parties prior to the
time such press release, statement or filing is required, a party may make
such press release, statement or filing and shall promptly notify the other
parties thereof.
6.11. Employee Benefits; Headquarters Employees. (a) Grace and
Sealed Air covenant and agree that from and after the Effective Time, Grace,
Packco and the Surviving Corporation, as the case may be, shall maintain
either employee benefits plans and programs that are, in the aggregate, at
least substantially comparable to the plans and programs in effect with
respect to Packco Employees at the Effective Time or other plans that are, in
the aggregate, at least substantially comparable to the plans and programs in
effect from time to time with respect to comparable Sealed Air employees.
(b) As a result of the Merger, Sealed Air acknowledges that it
will need to add employees to its corporate staff and related support
services, including in the areas of legal, tax, human resources, accounting,
risk management, cash management, investor relations, information systems and
internal audit. In seeking to fill these needs, Sealed Air shall work with
Grace to identify, prior to the Effective Time, appropriate people located at
Grace's Boca Raton headquarters and shall give such individuals preferential
consideration.
6.12. Expenses. (a) Except as set forth in paragraphs (b) and
(c) below, Section 8.04 of the Distribution Agreement and in the Other
Agreements, all costs and expenses, including without limitation, legal,
investment banking, financial, accounting and other professional fees and
expenses, incurred by Grace or its subsidiaries in connection with the
Transaction Agreements and the transactions contemplated thereby shall be paid
by New Grace (or if the Reorganization is not consummated, Grace) and all such
costs and expenses incurred by Sealed Air or its subsidiaries shall be paid by
Newco (or if the Reorganization is not consummated, Sealed Air); provided,
however, that the costs and expenses of printing and mailing the Joint Proxy
Statement and the Grace Registration Statement, and all filing fees paid to
the SEC in connection therewith, shall be evenly divided between New Grace (or
if the Reorganization is not consummated, Grace) and Sealed Air. The payments
under this Section 6.12 shall not be in limitation of the rights of the
parties hereto under Sections 8.5 and 9.10 hereof.
(b) In the event that:
(i) this Agreement shall be terminated pursuant to:
(A) Section 8.2(iii) (due to a Higher Offer with respect to
Grace);
(B) Section 8.2(ii) if, after an Acquisition Proposal with
respect to Grace has been publicly disclosed or announced, the
Grace shareholders do not approve the matters required by Section
7.1(a) and, within one year after termination of this Agreement,
Grace consummates or enters into a written agreement to consummate
an Acquisition Proposal (except that, for this purpose, the
reference to "significant portion" in the definition thereof in
Section 6.3 shall mean 20%) or any person (other than an employee
stock or similar plan for the benefit of Grace employees) or group
of affiliated persons shall acquire beneficial ownership (as
defined in Rule 13d-3 under the Exchange Act) of at least 35% of
the outstanding Grace Common Shares;
(C) Section 8.4(ii) and, within one year after termination
of this Agreement, Grace consummates or enters into a written
agreement to consummate an Acquisition Proposal (except that, for
this purpose, the reference to "significant portion" in the
definition thereof in Section 6.3 shall mean 20%) or any person
(other than an employee stock or similar plan for the benefit of
Grace employees) or group of affiliated persons shall acquire
beneficial ownership (as defined in Rule 13d-3 under the Exchange
Act) of at least 35% of the outstanding Grace Common Shares; or
(D) Section 8.2(ii) (due to a failure to obtain Grace
shareholder approval at the Grace Meeting other than in the
circumstances described in clause (B)); and
(ii) at the time of such termination, Sealed Air shall not be in
material breach of its covenants or agreements contained in this
Agreement;
then, Grace shall pay to Sealed Air, in exchange for a complete release of any
liabilities of Grace hereunder, the amount of (1) $150 million plus actual out
of pocket expenses incurred to third parties in connection with the
transactions contemplated hereby after the date of this Agreement, in the case
of an event described in clauses (i)(A) or (i)(C) above, (2) in the case of
clause (i)(B), $25 million at the time of termination and $125 million plus
the expenses described above upon the occurrence of the additional event
described in clause (i)(B) or (3) $25 million, in the event of termination
described in clause (i)(D) above. The amounts payable under this Section
shall be paid by wire transfer of immediately available funds within 24 hours
to the account specified by Sealed Air in writing.
(c) In the event that:
(i) this Agreement shall be terminated pursuant to:
(A) Section 8.2(iii) (due to a Higher Offer with respect to
Sealed Air);
(B) Section 8.2(ii), if, after an Acquisition Proposal with
respect to Sealed Air has been publicly disclosed or announced,
the Sealed Air shareholders do not approve the matters required by
Section 7.1(a), and, within one year after termination of this
Agreement, Sealed Air consummates or enters into a written
agreement to consummate an Acquisition Proposal (except that, for
this purpose, the reference to "significant portion" in the
definition thereof in Section 6.3 shall mean 20%) or any person
(other than an employee stock or similar plan for the benefit of
Sealed Air employees) or group of affiliated persons shall acquire
beneficial ownership (as defined in Rule 13d-3 under the Exchange
Act) of at least 35% of the outstanding Sealed Air Common Shares;
(C) Section 8.3(ii) and, within one year after termination
of this Agreement, Sealed Air consummates or enters into a written
agreement to consummate an Acquisition Proposal (except that, for
this purpose, the reference to "significant portion" in the
definition thereof in Section 6.3 shall mean 20%) or any person
(other than an employee stock or similar plan for the benefit of
Sealed Air employees) or group of affiliated persons shall acquire
beneficial ownership (as defined in Rule 13d-3 under the Exchange
Act) of at least 35% of the outstanding Sealed Air Common Shares;
or
(D) Section 8.2(ii) (due to a failure to obtain Sealed Air
shareholder approval at the Sealed Air Meeting other than in the
circumstances described in clause (B)); and
(ii) at the time of such termination, Grace shall not be in
material breach of its covenants or agreements contained in this
Agreement;
then, Sealed Air shall pay to Grace, in exchange for a complete release of any
liabilities of Sealed Air hereunder, the amount of (1) $75 million plus actual
out of pocket expenses incurred to third parties in connection with the
transactions contemplated hereby after the date of this Agreement, in the case
of an event described in clauses (i)(A) or (i)(C) above, (2) in the case of
clause (i)(B), $25 million at the time of termination and $50 million plus the
expenses described above upon occurrence of the additional event described in
clause (i)(B) or (3) $25 million, in the event of termination described in
clause (i)(D) above. The amounts payable under this Section shall be paid by
wire transfer of immediately available funds within 24 hours to the account
specified by Grace in writing.
6.13. Antitakeover Statutes. If any Takeover Statute is or may
become applicable to the transactions contemplated hereby, each of the parties
hereto and the members of its Board of Directors shall grant such approvals
and take such actions as are necessary so that the transactions contemplated
by this Agreement may be consummated as promptly as practicable on the terms
contemplated hereby and otherwise act to eliminate or minimize the effects of
any Takeover Statute on any of the transactions contemplated by this Agreement.
6.14. Securities Act Compliance. As soon as practicable after
the date of the Meetings, each party hereto shall identify all persons who
were, at the time of the Meetings, possible Affiliates, shall use its
reasonable efforts to obtain a written agreement in the usual and customary
form from each person who is so identified as a possible Affiliate and shall
deliver such written agreements to Grace or Newco as soon as practicable after
the Meetings.
6.15. Transaction Agreements. (a) Prior to the Effective Time,
the parties shall consummate any transactions to be consummated prior to the
Effective Time pursuant to the Distribution Agreement or the Other Agreements.
(b) The parties shall not waive or amend any terms of the
Distribution Agreement or the Other Agreements without the consent of the
other parties hereto, which consent shall not be unreasonably withheld.
6.16. Tax Matters. Each party agrees to report the Distribution
as a tax-free distribution under the Code and the Merger as a tax-free
reorganization under the Code on all tax returns and other filings, and take
no position inconsistent therewith, except where, in the opinion of nationally
recognized tax counsel to such party, there is not "substantial authority,"
as defined in Section 6662 of the Code, to support such a position.
ARTICLE VII
CONDITIONS
7.1. Conditions to Each Party's Obligation. The respective
obligation of each party hereto to consummate the Reorganization is subject to
the fulfillment of each of the following conditions:
(a) Shareholder Approval. To the extent required by law or stock
exchange regulations, the transactions contemplated by the Transaction
Agreements shall have been duly approved by the shareholders of Sealed
Air and Grace in accordance with applicable law.
(b) Governmental and Regulatory Consents. The waiting periods
applicable to the consummation of the Merger under the HSR Act shall
have expired or been terminated; and all filings required to be made
prior to the Closing by any party hereto or any of its respective
subsidiaries with, and all consents, approvals and authorizations
required to be obtained prior to the Closing by any party hereto or any
of its respective subsidiaries from, any Governmental Entity in
connection with the execution, delivery and performance of this
Agreement, the Distribution Agreement and the Other Agreements and the
consummation of the transactions contemplated hereby and thereby (to the
extent such transactions are required to be consummated prior to the
Effective Time) shall have been made or obtained, except where the
failure to obtain such consents, approvals and authorizations (i) is not
reasonably likely to have a Material Adverse Effect on (A) the New Grace
Group (with respect to the condition for Grace) or (B) the Packco Group
or Sealed Air (with respect to the condition for Sealed Air), and (ii)
could not reasonably be expected to subject the parties hereto or their
Affiliates or any directors or officers of any of the foregoing to
criminal liability.
(c) Third-Party Consents. All consents or approvals of all
persons (other than Governmental Entities) required for or in connection
with the execution, delivery and performance of this Agreement, the
Distribution Agreement and the Other Agreements and the consummation of
the transactions contemplated hereby and thereby shall have been
obtained and shall be in full force and effect, except for those the
failure of which to obtain would not have a Material Adverse Effect with
respect to (i) the New Grace Group (with respect to the condition for
Grace), or (ii) the Packco Group or Sealed Air (with respect to the
condition for Sealed Air).
(d) Governmental Matters. No Governmental Entity of competent
jurisdiction shall have enacted, issued, promulgated, enforced or
entered any statute, rule, regulation, judgment, decree, injunction or
other order (whether temporary, preliminary or permanent) which is in
effect and prohibits consummation of the transactions contemplated
hereby or by the Distribution Agreement or the Other Agreements.
(e) Tax Opinions. Grace shall have received the opinion of
Wachtell, Lipton, ▇▇▇▇▇ & ▇▇▇▇, dated the date of the Effective Time,
substantially in the form of Exhibit C hereto. In rendering such
opinion, such firm may receive and rely upon representations contained
in certificates of Grace, Merger Sub and Sealed Air and others,
including, without limitation, the Grace Tax Matters Certificate and the
Sealed Air Tax Matters Certificate. Sealed Air shall have received the
opinion of ▇▇▇▇▇ ▇▇▇▇ & ▇▇▇▇▇▇▇▇, dated the date of the Effective Time,
substantially in the form of Exhibit D hereto. In rendering such
opinion, such firm may receive and rely upon representations contained in
certificates of Grace, Merger Sub and Sealed Air and others, including,
without limitation, the Grace Tax Matters Certificate and the Sealed Air
Tax Matters Certificate.
(f) Registration Statements. The Registration Statements shall
have become effective under the Securities Act or Exchange Act (as
applicable), and no stop order suspending the effectiveness of the
Registration Statements shall have been issued and no proceedings for
that purpose shall have been initiated or threatened by the SEC.
(g) The Contribution, the Distribution and the Recapitalization.
The Contribution, the Distribution and the Recapitalization shall have
been consummated as provided in the Distribution Agreement, and the
conditions to consummation of such transactions set forth in Section 8.01
of the Distribution Agreement shall have been satisfied or, to the
reasonable satisfaction of Sealed Air, shall have been waived.
(h) Stock Exchange Listing. The Newco Common Shares and Newco
Convertible Preferred Shares to be issued in the Recapitalization and
the Merger shall have been authorized for listing on the NYSE, subject
to official notice of issuance.
7.2. Conditions to Obligation of Grace. The obligation of Grace
to consummate the Reorganization is also subject to the fulfillment or waiver
by Grace prior to the Closing of each of the following conditions:
(a) Representations and Warranties. The representations and
warranties of Sealed Air set forth in this Agreement shall be true and
correct in all material respects as of the date of this Agreement, and
such representations and warranties shall be true and correct as of the
Closing Date as though made on and as of the Closing Date (except that
representations and warranties that by their terms speak as of the date
of this Agreement or some other date shall be true and correct in all
material respects as of such date) disregarding with respect to the
Closing Date all qualifications and exceptions contained therein
relating to materiality or Material Adverse Effect, except for such
matters as would not in the aggregate reasonably be expected to have a
Material Adverse Effect with respect to Sealed Air, and Grace shall have
received a certificate signed on behalf of Sealed Air by an officer to
such effect.
(b) Performance of Obligations. Sealed Air shall have performed
in all material respects all obligations required to be performed by it
under this Agreement or the other Transaction Agreements at or prior to
the Closing Date, and Grace shall have received a certificate signed on
behalf of Sealed Air by an officer to such effect.
7.3. Conditions to Obligation of Sealed Air. The obligation of
Sealed Air to consummate the Reorganization is also subject to the fulfillment
or waiver by Sealed Air prior to the Closing of each of the following
conditions:
(a) Representations and Warranties. The representations and
warranties of Grace set forth in this Agreement shall be true and
correct in all material respects as of the date of this Agreement, and
the representations and warranties set forth in Section 5.1 shall be
true and correct in all material respects as of the Closing Date as
though made on and as of the Closing Date (except that representations
and warranties that by their terms speak as of the date of this
Agreement or some other date shall be true and correct in all material
respects as of such date), and the representations and warranties set
forth in Section 5.2 shall be true and correct as of the Closing Date as
though made on and as of the Closing Date (or in the case of
representations and warranties that speak of some other date, as of such
date), disregarding all qualifications and exceptions contained therein
relating to materiality or Material Adverse Effect, except for such
matters as would not in the aggregate reasonably be expected to have a
Material Adverse Effect with respect to the Packaging Business or the
Packco Group, and Sealed Air shall have received a certificate signed on
behalf of Grace by an officer to such effect.
(b) Performance of Obligations. Grace shall have performed in
all material respects all obligations required to be performed by it
under this Agreement or the other Transaction Agreements at or prior to
the Closing Date, and Sealed Air shall have received a certificate
signed on behalf of Grace by an officer to such effect.
(c) Letter of Credit. New Grace or another member of the New
Grace Group shall have obtained the letter of credit contemplated by
Section 2.06(b) of the Distribution Agreement (to the extent required
thereby).
(d) Solvency Opinion. The Sealed Air Board shall have received
the opinion referred to in Section 8.01(a)(ix)(A) of the Distribution
Agreement regarding New Grace and Grace-Conn. and shall be entitled to
rely on such opinion as if it were addressed to it.
ARTICLE VIII
TERMINATION
8.1. Termination by Mutual Consent. This Agreement may be
terminated, and the Reorganization may be abandoned, at any time prior to the
Effective Time, before or after the approval by the shareholders of Grace
and/or Sealed Air, by the mutual consent of each party hereto, which consent
shall be effected by action of its Board of Directors.
8.2. Termination by any Party Hereto. This Agreement may be
terminated, and the Reorganization may be abandoned, by action of the Board of
Directors of any party hereto, if (i) the Reorganization shall not have been
consummated by April 30, 1998, provided that the right to terminate this
Agreement pursuant to this clause (i) shall not be available to any party
whose breach of any provision of this Agreement results in the failure of the
Reorganization to be consummated by such date, (ii) at the Grace Meeting or at
any adjournment thereof, the approval of Grace's shareholders required by
Section 7.1(a), or, at the Sealed Air Meeting or any adjournment thereof, the
approval of Sealed Air's shareholders required by Section 7.1(a) shall not
have been obtained, or (iii) Grace or Sealed Air shall have entered into an
agreement with respect to a Higher Offer in a manner permitted by Section 6.5.
8.3. Termination by Grace. This Agreement may be terminated and
the Reorganization may be abandoned at any time prior to the Effective Time,
before or after the adoption and approval by shareholders of Grace referred to
in Section 7.1(a), by action of the Grace Board, if (i) Sealed Air shall have
failed to comply in any material respect with any of the covenants or
agreements contained herein to be performed by it at or prior to the time of
termination, which failure (a) is not capable of being cured prior to April
30, 1998 and with respect to which Grace has provided 15 days' written notice;
or (b) is capable of being cured prior to such date but with respect to such
failure Sealed Air has not made, or has ceased to make, diligent efforts to
cure within 15 days of written notice from Grace; (ii) the Sealed Air Board
shall have failed to recommend to its shareholders the approval of the
transactions contemplated hereby or shall have withdrawn, modified or changed
in a manner materially adverse to Grace its approval or recommendation of this
Agreement; or (iii) the average closing sales price of one Sealed Air Common
Share for NYSE composite transactions, as reported in The Wall Street Journal,
for the twenty trading days ending on the last trading day immediately
preceding the day of the Effective Time (but for this clause) is less than
$37.00 per share.
8.4. Termination by Sealed Air. This Agreement may be terminated
and the Reorganization may be abandoned at any time prior to the Effective
Time, before or after the adoption and approval by shareholders of Sealed Air
referred to in Section 7.1(a), by action of the Sealed Air Board, if (i) Grace
shall have failed to comply in any material respect with any of the covenants
or agreements contained herein to be performed by it at or prior to the time
of termination, which failure (a) is not capable of being cured prior to April
30, 1998 and with respect to which Sealed Air has provided 15 days' written
notice; or (b) is capable of being cured prior to such date but with respect
to such failure Grace has not made, or has ceased to make, diligent efforts to
cure within 15 days of written notice from Sealed Air; (ii) the Grace Board
shall have failed to recommend to its shareholders the approval of the
transactions contemplated hereby or shall have withdrawn, modified or changed
in a manner materially adverse to Sealed Air its approval or recommendation of
this Agreement; or (iii) the average closing sales price of one Grace Common
Share for NYSE composite transactions, as reported in The Wall Street Journal,
for the twenty trading days ending on the last trading day immediately
preceding the day of the Effective Time (but for this clause) is less than
$45.375 per share.
8.5. Effect of Termination and Abandonment. In the event of
termination of this Agreement and the abandonment of the Reorganization
pursuant to this Article VIII, no party hereto (or any of its directors or
officers) shall have any liability or further obligation to any other party,
except as set forth in Section 6.12 and except that nothing herein will
relieve any party from liability for any material and willful breach of any
covenant contained herein.
ARTICLE IX
MISCELLANEOUS AND GENERAL
9.1. Survival. Only those agreements and covenants of the
parties which by their express terms apply in whole or in part after the
Effective Time shall survive the Effective Time. All other representations,
warranties, agreements and covenants shall be deemed only to be conditions of
the Reorganization and shall not survive the Effective Time.
9.2. Modification or Amendment. Subject to the applicable
provisions of the DGCL, at any time prior to the Effective Time, the parties
hereto may modify or amend this Agreement, by written agreement executed and
delivered by duly authorized officers of the respective parties.
9.3. Waiver of Conditions. The conditions to each party's
obligation to consummate the Reorganization and the Merger are for the sole
benefit of such party and may be waived by such party in whole or in part to
the extent permitted by applicable law.
9.4. Counterparts. For the convenience of the parties hereto,
this Agreement may be executed in any number of separate counterparts signed
by one or more of the parties hereto, each such counterpart being deemed to be
an original instrument, and all such counterparts shall together constitute
the same agreement.
9.5. Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of Delaware.
9.6. Notices. All notices, requests, claims, demands and other
communications hereunder shall be in writing and shall be given (and shall be
deemed to have been duly given upon receipt) by delivery in person, by cable,
telegram, telex or other standard form of telecommunications, or by registered
or certified mail, postage prepaid, return receipt requested, addressed as
follows:
(a) If to Grace or Merger Sub:
▇. ▇. ▇▇▇▇▇ & Co.
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: Secretary
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to:
Wachtell, Lipton, ▇▇▇▇▇ & ▇▇▇▇
▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇, Esq.
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
(b) If to Sealed Air:
Sealed Air
Park ▇▇ ▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
Attention: President
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to:
▇▇▇▇▇ ▇▇▇▇ & ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇.
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Esq.
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
or to such other address as any party hereto may have furnished to the other
parties by a notice in writing in accordance with this Section.
9.7. Entire Agreement; Assignment. This Agreement (and the
Exhibits and Disclosure Letters hereto) (a) constitute the entire agreement,
and supersede all other prior agreements, understandings, representations and
warranties, both written and oral, among the parties, with respect to the
subject matter hereof other than the written confidentiality arrangements
existing among the parties hereto, which shall survive, and (b) shall not be
assignable by operation of law or otherwise.
9.8. Definition of "Subsidiary." When a reference is made in
this Agreement to a subsidiary of a party, the term "subsidiary" means any
corporation or other organization whether incorporated or unincorporated of
which at least a majority of the securities or interests having by the terms
thereof ordinary voting power to elect at least a majority of the board of
directors or others performing similar functions with respect to such
corporation or other organization is directly or indirectly owned or
controlled by such party or by any one or more of its subsidiaries, or by such
party and one or more of its subsidiaries.
9.9. Captions. The Article, Section and paragraph captions
herein are for convenience of reference only, do not constitute part of this
Agreement, and shall not be deemed to limit or otherwise affect any of the
provisions hereof.
9.10. Specific Performance. In the event of any actual or
threatened default in, or breach of, any of the terms, conditions and
provisions of this Agreement, the party or parties who are or are to be
thereby aggrieved shall have the right of specific performance and injunctive
relief giving effect to its or their rights under this Agreement, in addition
to any and all other rights and remedies at law or in equity, and all such
rights and remedies shall be cumulative. The parties agree that the remedies
at law for any breach or threatened breach, including monetary damages, are
inadequate compensation for any loss and that any defense in any action for
specific performance that a remedy at law would be adequate is waived.
9.11. Severability. If any provision of this Agreement or the
application thereof to any person or circumstance is determined by a court of
competent jurisdiction to be invalid, void or unenforceable, the remaining
provisions hereof, or the application of such provision to persons or
circumstances other than those as to which it has been held invalid or
unenforceable, shall remain in full force and effect and shall in no way be
affected, impaired or invalidated thereby, so long as the economic or legal
substance of the transactions contemplated hereby is not affected in any
manner adverse to any party.
9.12. Third-Party Beneficiaries. Nothing contained in this
Agreement, expressed or implied, is intended to confer upon any person or
entity, other than the parties hereto, any benefit, right or remedies.
9.13. Further Assurances. In addition to the actions
specifically provided for elsewhere in this Agreement, but subject to Section
9.1 hereof, each of the parties hereto shall use reasonable efforts to take,
or cause to be taken, all actions, and to do, or cause to be done, all things
reasonably necessary, proper or advisable under applicable laws, regulations
and agreements to consummate and make effective the transactions contemplated
by this Agreement.
IN WITNESS WHEREOF, this Agreement has been duly executed and
delivered by the duly authorized officers of the parties hereto on the date
first hereinabove written.
▇. ▇. ▇▇▇▇▇ & CO.
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
---------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: Chairman, President and
Chief Executive Officer
SEALED AIR CORPORATION
By: /s/ T.J. ▇▇▇▇▇▇ ▇▇▇▇▇▇
---------------------------------
Name: T.J. ▇▇▇▇▇▇ ▇▇▇▇▇▇
Title: Chairman of the Board
and Chief Executive Officer
PACKCO ACQUISITION CORP.
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
---------------------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Title: President
Annex A
DEFINED TERMS
Acquisition Proposal: as defined in Section 6.3 hereof.
Affiliate: as defined in Rule 12b-2 under the Exchange Act.
Agreement: as defined in the Preamble hereof.
Benefits Agreement: the executed agreement in the form of Exhibit
A to the Distribution Agreement.
CERCLA: the Comprehensive Environmental Response, Compensation
and Liability Act of 1980, as amended.
Closing: as defined in Section 1.4 hereof.
Closing Date: as defined in Section 1.4 hereof.
Code: the Internal Revenue Code of 1986, as amended.
Contracts: as defined in Section 5.1(d)(ii).
Contribution: as defined in Recital B hereof.
DGCL: as defined in Section 1.3 hereof.
Disclosure Letters: the Sealed Air Disclosure Letter and the
Grace Disclosure Letter.
Distribution: as defined in Recital C hereof.
Distribution Agreement: as defined in Recital B hereof.
Effective Time: as defined in Section 1.3 hereof.
Environmental Law: any federal, state, foreign or local law,
statute, ordinance, rule, regulation, code, license, permit, authorization,
approval, consent, common law, legal doctrine, order, judgment, decree,
injunction, requirement or agreement with any government entity or other third
party, (a) relating to the pollution, protection, preservation, investigation
or restoration of the environment (including, without limitation, air, water
vapor, surface water, groundwater, drinking water supply, surface land,
subsurface land, plant and animal life or any other natural resource), or to
human health or safety, or (b) the exposure to, or the use, storage,
recycling, treatment, generation, transportation, processing, handling,
labeling, production, release or disposal of Hazardous Substances.
ERISA: the Employee Retirement Income Security Act of 1974, as
amended, and the rules and regulations promulgated thereunder.
ERISA Affiliate: with respect to any entity, trade or business,
any other entity, trade or business that is a member of a group described in
Section 414(b), (c), (m) or (o) of the Code or Section 4001(b)(1) of ERISA
that includes the first entity, trade or business, or that is a member of the
same "controlled group" as the first entity, trade or business pursuant to
Section 4001(a)(14) of ERISA.
Exchange Act: the Securities Exchange Act of 1934, as amended,
and the rules and regulations promulgated thereunder.
Exchange Agent: as defined in Section 4.2(a) hereof.
Governmental Entity: as defined in Section 5.1(d)(i) hereof.
Grace: as defined in the Preamble hereof.
Grace Board: the Board of Directors of Grace.
Grace Certificate of Incorporation: as defined in Section 2.1
hereof.
Grace Common Shares: shares of common stock, par value $.01 per
share, of Grace (including the associated Grace Rights).
Grace-Conn.: as defined in Recital C hereof.
Grace Credit Agreement: as defined in the Distribution Agreement.
Grace Disclosure Letter: as defined in Section 5.1 hereof.
Grace Meeting: a duly convened meeting of holders of Grace Common
Shares called to vote on and approve the transactions contemplated hereby
(including the transactions contemplated by the Distribution Agreement).
Grace Options: as defined in Section 5.1(a)(i) hereof.
Grace Preferred Shares: shares of preferred stock, par value $.01
per share, of Grace.
Grace Registration Statement: the registration statement to be
filed by Grace with the SEC in connection with the issuance of Newco Common
Shares and Newco Convertible Preferred Shares in the Merger and the
Recapitalization, which shall include therein the Joint Proxy Statement.
Grace Rights: the preferred share purchase rights of Grace issued
pursuant to the Grace Rights Agreement.
Grace Rights Agreement: the Rights Agreement, dated as of
September 25, 1996, by and between Grace and The Chase Manhattan Bank, as
Rights Agent.
Grace Savings Plan: the ▇.▇. ▇▇▇▇▇ & Co. Salaried Employees
Savings and Investment Plan.
Grace Stock Plans: as defined in Section 5.1(a)(i) hereof.
Grace Tax Matters Certificate: as defined in Section 5.1(j)
hereof.
Hazardous Substance: any substance, waste or material listed,
defined, designated or classified as a pollutant or contaminant, or as
ignitable, corrosive, reactive or hazardous, toxic, radioactive or dangerous,
or otherwise regulated under any Environmental Law, whether by type or by
quantity, including any substance containing any such substance as a component.
Higher Offer: as defined in Section 6.3 hereof.
HSR Act: the ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ Antitrust Improvements Act of
1976, as amended.
IRS: the United States Internal Revenue Service.
Joint Proxy Statement: the joint proxy statement (including all
proxy solicitation materials constituting a part thereof) to be prepared by
the parties hereto and mailed to the Grace shareholders or Sealed Air
shareholders, as the case may be, in connection with the Reorganization.
knowledge of executive officers: shall mean, in the case of Grace
or Sealed Air, as the case may be, the knowledge of each officer of such party
subject to Section 16 of the Exchange Act pursuant to Rule 16a-2 under the
Exchange Act.
Lien: as defined in Section 5.2(g) hereof.
material: with respect to any party, material to such party and
its subsidiaries, taken as a whole.
Material Adverse Effect: with respect to any party, an effect
which would be materially adverse to the properties, business, financial
condition, results of operations or prospects of such party and its
subsidiaries taken as a whole.
Meetings: the Grace Meeting and the Sealed Air Meeting.
Merger: as defined in Recital E hereof.
Merger Certificate: as defined in Section 1.3 hereof.
Merger Sub: as defined in the Preamble hereof.
Merger Sub Common Stock: as defined in Section 5.1(a)(ii) hereof.
Multiemployer Plan: as defined in Section 5.2(l)(v) hereof.
Multiple Employer Plan: as defined in Section 5.2(l)(v) hereof.
Newco: as defined in Recital E hereto.
Newco Amendment: as defined in Recital E hereof, the terms of
which are attached hereto as Exhibit F.
Newco Certificate: a certificate evidencing Newco Common Shares.
Newco Common Shares: the shares of common stock of Newco, par
value $.10 per share.
Newco Convertible Preferred Shares: the shares of Series A
Convertible Preferred Stock of Newco, par value $.10 per share, the terms of
which are set forth in Exhibit E hereto.
New Grace: as defined in the Distribution Agreement.
New Grace Business: as defined in the Distribution Agreement.
New Grace Group: as defined in the Distribution Agreement.
New Grace Registration Statement: the registration statement to
be filed with the SEC by New Grace in connection with the Distribution.
NYSE: the New York Stock Exchange, Inc.
Old Sealed Air Certificate: a certificate evidencing Sealed Air
Common Shares.
Other Agreements: as defined in the Distribution Agreement.
Packaging Business: as defined in the Distribution Agreement.
Packaging Business Disclosure Letter: as defined in Section 5.2
hereof.
Packaging Business Disclosure Letter Balance Sheet: as disclosed
in Section 5.2(d)(i) hereof.
Packaging Business Disclosure Letter Financial Statements: as
defined in Section 5.2(d)(i) hereof.
Packaging Business Financial Statements: as defined in Section
6.7(a) hereof.
Packaging Business Intellectual Property: as defined in Section
5.2(m) hereof.
Packaging Business Plans: as defined in Section 5.2(l)(i) hereof.
Packaging Business-Only Plans: as defined in Section 5.2(l)(i)
hereof.
Packco: as defined in Recital B hereof.
Packco Assets: as defined in the Distribution Agreement.
Packco Employees: as defined in the Benefits Agreement.
Packco Group: as defined in the Distribution Agreement.
Packco Qualified Plans: as defined in Section 5.2(l)(iii) hereof.
Packco Subsidiary: as defined in the Distribution Agreement.
Recapitalization: as defined in the Distribution Agreement.
Registration Statements: the Grace Registration Statement and the
New Grace Registration Statement.
Reorganization: the Contribution, the Recapitalization, the
Distribution and the Merger and other transactions contemplated by the
Transaction Agreements.
Representatives: with respect to any party, such party's
officers, employees, counsel, accountants and other authorized representatives.
S.C. Certificate of Incorporation: as defined in Section 2.1
hereof.
Schedules 14A: the Schedule 14A to be filed by Grace or Sealed
Air, as the case may be, in connection with the Reorganization, including the
related Joint Proxy Statement.
Sealed Air: as defined in the Preamble hereof.
Sealed Air Board: the Board of Directors of Sealed Air.
Sealed Air Common Shares: shares of common stock, par value $.01
per share, of Sealed Air.
Sealed Air Disclosure Letter: as defined in Section 5.3 hereof.
Sealed Air Employees: as defined in Section 5.3(l)(i) hereof.
Sealed Air Intellectual Property: as defined in Section 5.3(p)
hereof.
Sealed Air Meeting: a duly convened meeting of holders of Sealed
Air Common Shares called to vote on and approve the transactions contemplated
hereby.
Sealed Air Plans: as defined in Section 5.3(l)(i) hereof.
Sealed Air Qualified Plans: as defined in Section 5.3(l)(iii).
Sealed Air Stock Plans: as defined in Section 5.3(a) hereof.
Sealed Air Tax Matters Certificate: as defined in Section 5.3(q)
hereof.
SEC: the Securities and Exchange Commission.
SEC Documents: with respect to any party, all filings made by
such party or its subsidiaries with the SEC since December 31, 1994, including
notes, schedules, amendments and exhibits thereto.
Securities Act: the Securities Act of 1933, as amended, and the
rules and regulations promulgated thereunder.
subsidiary: as defined in Section 9.8 hereof.
Surviving Corporation: as defined in Section 1.2 hereof.
Takeover Statute: as defined in Section 5.1(g) hereof.
Tax Sharing Agreement: the executed agreement in the form of
Exhibit B to the Distribution Agreement.
Transaction Agreements: this Agreement, the Distribution
Agreement and the Other Agreements.
US GAAP: United States generally accepted accounting principles
consistently applied.
