Exhibit A to Merger Agreement
Form of Distribution Agreement
------------------------------
FORM OF
DISTRIBUTION AGREEMENT
by and among
X. X. XXXXX & CO.
X. X. XXXXX & CO.-CONN,
and
GRACE SPECIALTY CHEMICALS, INC.
(to be renamed "X. X. Xxxxx & Co.")
Dated as of [ ], 1997
TABLE OF CONTENTS
Page
----
I. Definitions................................................ 2
1.01 General........................................ 2
1.02 References to Time............................. 17
II. Certain Transactions Prior to the
Distribution Date....................................... 18
2.01 Transfer of Packco Assets; Assumption
of Packco Liabilities........................ 18
2.02 Certain Foreign Transfers...................... 20
2.03 Certificate of Incorporation;
By-laws; Rights Plan......................... 23
2.04 Issuance of Stock.............................. 23
2.05 Other Agreements; Shared Facilities............ 23
2.06 Financing...................................... 24
2.07 Grace Recapitalization......................... 26
2.08 Registration and Listing....................... 27
2.09 Grace and New Grace Boards..................... 28
2.10 Transfers Not Effected Prior to the
Distribution; Transfers Deemed
Effective as of the Distribution
Date......................................... 28
2.11 Intercompany Accounts and
Distribution Payments........................ 29
III. The Distribution........................................... 29
3.01 Record Date and Distribution Date.............. 29
3.02 The Agent...................................... 29
3.03 Delivery of Share Certificates to the
Agent........................................ 29
3.04 The Distribution............................... 30
IV. Survival and Indemnification............................... 30
4.01 Survival of Agreements......................... 30
4.02 Indemnification................................ 30
4.03 Procedures for Indemnification for
Third-Party Claims........................... 31
4.04 Remedies Cumulative............................ 33
V. Certain Additional Covenants............................... 34
5.01 Notices to Third Parties....................... 34
5.02 Licenses and Permits........................... 34
5.03 Intercompany Agreements........................ 34
5.04 Guarantee Obligations.......................... 35
5.05 Further Assurances............................. 36
5.06 Environmental Claims Cooperation............... 36
VI. Access to Information...................................... 36
6.01 Provision of Corporate Records................. 36
6.02 Access to Information.......................... 37
6.03 Production of Witnesses........................ 39
6.04 Retention of Records........................... 39
6.05 Confidentiality................................ 40
6.06 Cooperation with Respect to
Government Reports and Filings............... 40
VII. No Representations or Warranties........................... 41
7.01 No Representations or Warranties............... 41
VIII. Miscellaneous.............................................. 42
8.01 Conditions to Obligations...................... 42
8.02 Use of Grace Name and Xxxx..................... 43
8.03 Complete Agreement............................. 44
8.04 Expenses....................................... 44
8.05 Governing Law.................................. 45
8.06 Notices........................................ 45
8.07 Amendment and Modification..................... 46
8.08 Successors and Assigns; No Third-Party
Beneficiaries................................ 46
8.09 Counterparts................................... 46
8.10 Interpretation................................. 46
8.11 Severability................................... 47
8.12 References; Construction....................... 47
8.13 Termination.................................... 47
8.14 SAC Reasonable Consent......................... 47
SIGNATURES 48
Schedules to Distribution Agreement
Exhibit A Form of Employee Benefits Allocation Agreement
Exhibit B Form of Tax Sharing Agreement
Exhibit C Form of New Grace Certificate of Incorporation [to be
provided prior to signing of this Agreement]
Exhibit D Form of New Grace Bylaws [to be provided prior to signing of
this Agreement]
Exhibit E Form of New Grace Preferred Share Purchase Rights Plan [to
be provided prior to signing of this Agreement]
DISTRIBUTION AGREEMENT
This DISTRIBUTION AGREEMENT (this "Agreement"), dated as of [
], 1997, by and among X. X. Xxxxx & Co., a Delaware corporation ("Grace"),
X. X. Xxxxx & Co.-Xxxx., a Connecticut corporation and a wholly owned
subsidiary of Grace ("Grace-Conn.") and Grace Specialty Chemicals, Inc., a
Delaware corporation and a wholly owned subsidiary of Grace ("New Grace").
RECITALS
--------
A. The Merger Agreement. Grace and Sealed Air Corporation, a
Delaware corporation ("SAC"), have entered into an Agreement and Plan of
Merger, dated as of August 14, 1997 (the "Merger Agreement"), pursuant to
which, at the Effective Time (as defined therein), a wholly owned subsidiary
of Grace will merge with and into SAC, with SAC being the surviving
corporation (the "Merger"), and Grace being renamed "Sealed Air Corporation".
B. The Distribution Agreement. This Agreement and the Other
Agreements (as defined herein) set forth certain transactions that SAC has
required as a condition to its willingness to consummate the Merger, and the
purpose of this Agreement is to make possible the Merger by divesting Grace of
the businesses and operations to be conducted by New Grace and its
subsidiaries, including Grace-Conn.
C. The Contribution. Prior to the Effective Time, and subject to
the terms and conditions set forth in this Agreement, Grace intends to cause
the transfer to a wholly owned subsidiary of Grace-Conn. ("Packco") of certain
assets and liabilities of Grace and its subsidiaries predominantly related to
the Packaging Business (the "Contribution"), as contemplated by this Agreement
and the Other Agreements.
D. Financing. It is the intention of the parties hereto that,
prior to the Distribution: (i) Grace and/or Packco shall enter into new
financing arrangements and shall make, or cause to be made, the New Grace
Capital Contribution (as defined herein); and (ii) the parties shall cooperate
with one another with respect to the foregoing.
E. The Distribution. Following the Contribution and prior to the
Effective Time, subject to the conditions set forth in this Agreement, (i) the
capital stock of Packco will be distributed to Grace (the "Intragroup
Spinoff"), (ii) the capital stock of Grace-Conn. will be contributed to New
Grace and (iii) all of the issued and outstanding shares of the common stock
of New Grace (together with the New Grace Rights, "New Grace Common Stock")
will be distributed on a pro rata basis (the "Distribution") to the holders as
of the Record Date of the common stock of Grace, par value $.01 per share
("Grace Common Stock"), other than shares held in the treasury of Grace.
F. The Recapitalization. Following the Distribution and
immediately prior to the Effective Time, Grace intends to consummate the
Recapitalization in which each holder of a share of Grace Common Stock shall
hold, immediately thereafter, the Per Share Common Consideration and the Per
Share Preferred Consideration.
G. Intention of the Parties. It is the intention of the parties
(i) to this Agreement that, for United States federal income tax purposes, the
Contribution and associated transactions shall qualify as a tax-free
transaction under Section 351 of the Internal Revenue Code of 1986, as amended
(the "Code"), the Contribution and the Intragroup Spinoff (and associated
transactions) shall qualify as a tax-free transaction under Sections 355 and
368 of the Code, the Distribution and associated transactions shall qualify as
a tax-free transaction under Sections 355 and 368 of the Code, and the
Recapitalization shall be tax-free to Grace and its shareholders under the
Code, and (ii) to this Agreement and the Merger Agreement that 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, SAC and their
respective shareholders.
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
DEFINITIONS
SECTION 1.01 General. As used in this Agreement, the following
terms shall have the following meanings (such meanings to be equally
applicable to both the singular and plural forms of the terms defined):
Adjusted Foreign Transfer Taxes: as defined in Section 2.02(c)
hereof.
Affiliate: with respect to any specified Person, a Person that
directly, or indirectly through one or more intermediaries, controls, is
controlled by, or is under common control with, such specified Person;
provided, however, that, for purposes of this Agreement, no member of either
Group shall be deemed to be an Affiliate of any member of the other Group.
Agent: the distribution agent to be appointed by Grace to
distribute the shares of New Grace Common Stock pursuant to the Distribution.
Agreement: as defined in the preamble to this Agreement.
Asset: any and all assets and properties, tangible or intangible,
including, without limitation, the following: (i) cash, notes and accounts
and notes receivable (whether current or non-current); (ii) certificates of
deposit, banker's acceptances, stock, debentures, evidences of indebtedness,
certificates of interest or participation in profit-sharing agreements,
collateral-trust certificates, preorganization certificates or subscriptions,
transferable shares, investment contracts, voting-trust certificates,
fractional undivided interests in oil, gas or other mineral rights, puts,
calls, straddles, options and other securities of any kind; (iii) intangible
property rights, inventions, discoveries, know-how, United States and foreign
patents and patent applications, trade secrets, confidential information,
registered and unregistered trademarks, service marks, service names, trade
styles and trade names and associated goodwill; statutory, common law and
registered copyrights; applications for any of the foregoing, rights to use
the foregoing and other rights in, to and under the foregoing; (iv) rights
under leases, contracts, licenses, permits, distribution arrangements, sales
and purchase agreements, other agreements and business arrangements; (v) real
estate and buildings and other improvements thereon; (vi) leasehold
improvements, fixtures, trade fixtures, machinery, equipment (including
transportation and office equipment), tools, dies and furniture; (vii) office
supplies, production supplies, spare parts, other miscellaneous supplies and
other tangible property of any kind; (viii) computer equipment and software;
(ix) raw materials, work-in-process, finished goods, consigned goods and other
inventories; (x) prepayments or prepaid expenses; (xi) claims, causes of
action, choses in action, rights under express or implied warranties, rights
of recovery and rights of setoff of any kind; (xii) the right to receive mail,
payments on accounts receivable and other communications; (xiii) lists of
customers, records pertaining to customers and accounts, personnel records,
lists and records pertaining to customers, suppliers and agents, and books,
ledgers, files and business records of every kind; (xiv) advertising
materials and other printed or written materials; (xv) goodwill as a going
concern and other intangible properties; (xvi) employee contracts, including
any rights thereunder to restrict an employee from competing in certain
respects; and (xvii) licenses and authorizations issued by any governmental
authority.
Benefits Agreement: the Employee Benefits Allocation Agreement to
be entered into prior to the Distribution between Grace and New Grace,
substantially in the form of Exhibit A hereto, with such changes as are
acceptable to Grace, New Grace, Grace-Conn. and SAC.
Business: the New Grace Business or the Packaging Business.
Code: as defined in the Recitals to this Agreement.
Contribution: as defined in the Recitals to this Agreement.
Debt Costs: as defined in Section 2.06(b) hereof.
Deemed Foreign Tax Credits: as defined in Section 2.02(c) hereof.
Deemed Repatriations: as defined in Section 2.02(c) hereof.
Distribution: as defined in the Recitals to this Agreement.
Distribution Date: the date as of which the Distribution shall be
effected, to be determined by, or under the authority of, the Board of
Directors of Grace consistent with this Agreement and the Merger Agreement.
Effective Time: as defined in the Merger Agreement.
Environmental Law: as defined in the Merger Agreement.
Excess Short-Term Payables: as defined in Section 2.02(c) hereof.
Excess Shares: as defined in Section 2.07(b) hereof.
Exchange Act: the Securities Exchange Act of 1934, as amended,
together with the rules and regulations promulgated thereunder.
Exchange Agent: the exchange agent to be retained in connection
with effecting the Recapitalization (which may also be the Exchange Agent with
respect to the Merger and/or the Agent).
Foreign Exchange Rate: with respect to any currency other than
United States dollars as of any date, the rate on such date at which such
currency may be exchanged for United States dollars as quoted in The Wall
Street Journal.
Foreign New Grace Subsidiaries: as defined in the Tax Sharing
Agreement.
Foreign NOLs: as defined in Section 2.02(c) hereof.
Foreign Packco Subsidiaries: as defined in the Tax Sharing
Agreement.
Foreign Tax Credits: as defined in Section 2.02(c) hereof.
Foreign Transfer Taxes: as defined in Section 2.02(c) hereof.
Foreign Transfers: as defined in Section 2.02(a) hereof.
Grace: as defined in the preamble to this Agreement.
Grace Certificate of Incorporation: as defined in the Merger
Agreement.
Grace Common Stock: as defined in the Recitals to this Agreement.
Grace-Conn.: as defined in the preamble to this Agreement.
Grace-Conn. Assets: all of the Assets owned by Grace or its
Subsidiaries immediately prior to the Distribution, other than any Packco
Assets.
Grace-Conn. Liabilities: all of the Liabilities of Grace or its
Subsidiaries immediately prior to the Distribution, other than Packco
Liabilities.
Grace-Conn. Public Debt: (i) the outstanding indebtedness of
Grace-Conn. under its 8.0% Notes Due 2004, 7.4% Notes Due 2000 and 7.75% Notes
Due 2002 (other than any such indebtedness owned by Grace-Conn. or another
member of the New Grace Group) and (ii) with respect to any indebtedness
described in clause (i), any amendments, modifications, refinancings,
extensions, renewals, refundings or replacements of, or indebtedness exchanged
for, such indebtedness which in each case is guaranteed by Grace (other than
any such indebtedness owned by Grace-Conn. or another member of the New Grace
Group).
Grace Credit Agreement: the credit agreement or other financing
agreements or arrangements to be entered into by Grace and/or Packco prior to
the Distribution Date to fund the New Grace Capital Contribution and fees and
expenses of Packco (or Grace) in connection with the transactions contemplated
hereby and to provide Packco with working capital.
Group: the Packco Group or the New Grace Group.
Indemnifiable Losses: all losses, Liabilities, damages, claims,
demands, judgments or settlements of any nature or kind, including all
reasonable costs and expenses (legal, accounting or otherwise as such costs
are incurred) relating thereto, suffered (and not actually reimbursed by
insurance proceeds) by an Indemnitee, including any reasonable costs or
expenses of enforcing any indemnity hereunder.
Indemnifying Party: a Person who or which is obligated under this
Agreement to provide indemnification.
Indemnitee: a Person who or which may seek indemnification under
this Agreement.
Indemnity Payment: an amount that an Indemnifying Party is
required to pay to or in respect of an Indemnitee pursuant to Article IV.
Information: all records, books, contracts, instruments, computer
data and other data and information.
Intragroup Spinoff: as defined in Recital E to this Agreement.
Joint Proxy Statement: as defined in the Merger Agreement.
Liabilities: all debts, liabilities and obligations, whether
absolute or contingent, matured or unmatured, liquidated or unliquidated,
accrued or unaccrued, known or unknown, whenever arising, and whether or not
the same would properly be reflected on a balance sheet.
Litigation Matters: actual, threatened or future litigations,
investigations, claims or other legal matters that have been or may be
asserted against, or otherwise adversely affect, Grace and/or New Grace (or
members of either Group).
Merger: as defined in the Recitals to this Agreement.
Merger Agreement: as defined in the Recitals to this Agreement.
Net Benefit Amount: the amount (whether positive or negative)
equal to (i) minus (ii), where (i) is the sum of the U.S. Plan Assets and the
Foreign Plan Assets (each as defined below) and (ii) is the sum of the U.S.
Benefit Plan Liabilities and the Foreign Benefit Plan Liabilities (each as
defined below).
"U.S. Plan Assets" means the aggregate fair market value, as of
the Distribution Date, of the assets of the Union Retirement Plan (as
defined in the Benefits Agreement) and the assets that will be
transferred to the Packco Hourly Non-Union Retirement Plan (as defined in
the Benefits Agreement) pursuant to Section 4.01(d) of the Benefits
Agreement, in each case as reasonably determined by Actuarial Sciences
Associates ("ASA"). "Foreign Plan Assets" means the aggregate fair
market value, as of the Distribution Date, of the assets that will be,
pursuant to the Foreign Plans Agreement (as defined in the Benefits
Agreement), transferred from a Noninsured Foreign Pension Plan (as
defined in the Benefits Agreement) that is a New Grace Benefit Plan (as
defined in the Benefits Agreement) (a "Transferring New Grace Foreign
Plan") to a Packco Benefit Plan or retained by a Noninsured Foreign
Pension Plan that is a Packco Benefit Plan (a "Retained Grace Foreign
Plan"), in each case as reasonably determined by the Local Actuary (as
defined in the Benefits Agreement) for the relevant Transferring New
Grace Foreign Plan or Retained Grace Foreign Plan.
"U.S. Benefit Plan Liabilities" means the sum of the Accrued
Benefit Obligation, calculated in accordance with FAS 87 ("ABO"), for
(i) benefits of Packco Participants (as defined in the Benefits
Agreement) under the Union Retirement Plan and (ii) benefits of Packco
Participants under the Hourly Non-Union Retirement Plan (as defined in
the Benefits Agreement) that are assumed by the Packco Hourly Non-Union
Retirement Plan pursuant to Section 4.01(d) of the Benefits Agreement.
"Foreign Benefit Plan Liabilities" means the greater of (i) the sum of
the ABOs for the Assumed Foreign Benefits (as defined below) plus $10
million and (ii) the sum of the Projected Benefit Obligations,
calculated in accordance with FAS 87 ("PBO"), for the Assumed Foreign
Benefits. The "Assumed Foreign Benefits" means the aggregate amount of
the retirement benefits of Packco Participants under each Noninsured
Foreign Pension Plan that are, pursuant to the Foreign Benefits
Agreement, either assumed by a Packco Benefit Plan from a Transferring
New Grace Foreign Plan or retained by a Retained Grace Foreign Plan.
The determination of U.S. Benefit Plan Liabilities shall be made
by ASA in accordance with the actuarial and other assumptions set forth on
Schedule 1.01(f). The determination of the ABOs and PBOs for the Assumed
Foreign Benefits shall in each case be made by AON Consulting ("AON") as of
the Distribution Date based upon the actuarial and other assumptions used by
AON to determine the ABO or PBO (as applicable) of the relevant Transferring
New Grace Foreign Plan or Retained Grace Foreign Plan for purposes of Grace's
fiscal 1996 year-end financial disclosures, if such ABO or PBO is reported
thereon, which actuarial and other assumptions are set forth on Schedule
1.01(f), provided, in the case of the assumptions relating to each Noninsured
Foreign Pension Plan, that such assumptions are reasonable. To the extent
that the ABO or PBO for a particular Transferring New Grace Foreign Plan or
Retained Grace Foreign Plan was not so reported, such assumptions shall be
reasonable assumptions developed by AON in the manner most typically used by
AON to develop assumptions for determining ABO or PBO for FAS 87 purposes for
substantially similar plans in the applicable jurisdiction.
ASA, the Local Actuaries and AON (collectively, the "Actuaries")
shall initially make the determinations called for by this definition on a
good-faith estimated basis not later than December 31, 1997 or such other date
as the parties hereto shall request. In making such initial determinations,
the local Actuaries shall be entitled to rely upon the advice of Grace and New
Grace with respect to the anticipated terms and conditions of the Foreign
Plans Agreement (if it has not yet been signed) and the manner in which its
terms and conditions will be implemented. Final determinations shall be made
by the Actuaries as and when the asset transfers and assumptions of
liabilities contemplated by the Foreign Plans Agreement and Section 4.01(d) of
the Benefits Agreement are completed, and the New Grace Capital Contribution
shall be adjusted as necessary to reflect the Net Benefit Amount as so finally
determined. Grace and New Grace agree to cooperate in supplying the Actuaries
with all information reasonably requested by them in connection with making
such determinations, including, without limitation, information concerning
Plan participants, assets and benefits. Grace, New Grace and SAC shall be
entitled to review and comment on the Actuaries' analyses as the Actuaries are
in the process of making their determinations.
New Grace: as defined in the preamble to this Agreement.
New Grace Business: all of the businesses and operations
conducted by Grace and its Subsidiaries at any time, whether prior to, on or
after the Distribution Date, other than the Packaging Business.
New Grace Capital Contribution: the capital contribution,
distribution or other transfer to be received by Grace-Conn. at or shortly
prior to the Distribution, in the aggregate amount of:
(a) $1,200,000,000;
plus (b) the aggregate amount of cash held by Packco or any Packco
Subsidiaries immediately prior to the Distribution;
minus (c) the amount by which
(i) the aggregate amount of (x) withholding Taxes
that would be imposed by foreign jurisdictions
on a deemed distribution to Packco by each
Foreign Packco Subsidiary immediately following
the Distribution, of an amount of cash equal to
the excess of (I) the amount of cash held by such
Foreign Packco Subsidiary immediately prior to
the Distribution over (II) the sum of (A) the
amount of debt that may be repaid without penalty
plus current accrued but unpaid Taxes of such
Subsidiary as of the Distribution Date and (B)
Excess Short-Term Payables of such Subsidiary;
provided, however, that such amount of cash
shall be determined taking into account the
principles, as applied to Packco, set forth in
the proviso in Section 2.02(c)(v), and (y) Taxes
that would be imposed by the United States or
any political subdivision thereof in excess of
the Foreign Tax Credits of Packco in respect of
Taxes paid by Packco or deemed paid by Packco as
a result of such deemed distributions of such
cash;
exceeds (ii) the aggregate amount of Packco Repatriation Tax Costs;
plus (d) the Net Benefit Amount; and
plus (e) the aggregate amount of Transaction Costs, if any, payable
by Grace to New Grace pursuant to Section 8.04 of this
Agreement, as of the Distribution Date.
New Grace Common Stock: as defined in the Recitals to this
Agreement.
New Grace Group: New Grace, Grace-Conn. and the other New Grace
Subsidiaries.
New Grace Group Excess Cash: as defined in Section 2.02(c) hereof.
New Grace Indemnitees: New Grace, each Affiliate of Grace-Conn.
(other than members of the Packco Group) and each of their respective
Representatives and each of the heirs, executors, successors and assigns of
any of the foregoing.
New Grace Repatriation Tax Costs: as defined in Section 2.02(c)
hereof.
New Grace Rights: the preferred share purchase rights of New
Grace.
New Grace Subsidiaries: all direct and indirect Subsidiaries of
Grace, including foreign subsidiaries of Grace-Conn. to be formed pursuant to
the Tax Sharing Agreement or Section 2.02 hereof, other than Packco and any
Packco Subsidiary.
Newco Common Stock: the shares of common stock, par value $.10
per share, of Grace.
Newco Convertible Preferred Stock: the Series A Convertible
Preferred Stock of Grace, par value $.10 per share, the terms of which are
described in Exhibit E to the Merger Agreement.
NYSE: New York Stock Exchange, Inc.
Other Agreements: the Benefits Agreement, the Tax Sharing
Agreement, an insurance procedures agreement, an intellectual property license
agreement, an interim services agreement, the shared facilities agreements and
the other agreements entered into or to be entered into in connection with
the Distribution as contemplated by Article II of this Agreement.
Packaging Business: all of the worldwide packaging businesses,
operations and investments conducted or owned by Grace and its Subsidiaries
at any time, whether prior to, on or after the Distribution Date, including
Cryovac([Registered])flexible plastic packaging systems, Omicron
([Registered]) rigid plastic cups and tubs for dairy foods and
Formpac([Registered]) foam trays for supermarket and institutional food
service, provided that the Packaging Business shall not include the
worldwide businesses, operations and investments at or prior to the
Distribution Date conducted or owned by Grace and its Subsidiaries of its
container business group (which was, until 1996, operated as a separate
business unit known as Grace Container Products and any extensions of such
former business unit since such time and through the Distribution Date),
including, without limitation, Darex([Registered]) container sealants and
coatings.
Packco: as defined in the Recitals to this Agreement.
Packco Assets: collectively and except as otherwise provided in
any of the Other Agreements, (i) all of the right, title and interest
immediately prior to the time of the Distribution of Grace and its
Subsidiaries in all Assets that are predominantly used or held for use in or
predominantly relating to or to the extent arising from the Packaging
Business; (ii) the rights to use shared Assets as provided in Article II;
(iii) all other Assets of Grace and its Subsidiaries to the extent
specifically assigned to or retained by any member of the Packco Group
pursuant to this Agreement or any Other Agreement; (iv) the capital stock of
Packco and all Packco Subsidiaries; and (v) the Assets set forth on Schedule
1.01(a) hereto; provided that
(a) all cash and marketable securities held by any member
of the Packco Group immediately prior to the Distribution shall be
Grace-Conn. Assets;
(b) intellectual property rights shall be Packco Assets in
the form and to the extent provided in Section 2.01(d);
(c) with respect to leased or owned real property included
in the Packco Assets that is not used exclusively by the Packaging
Business, Packco Assets shall include only real property used or
held for use in the Packaging Business as of the Distribution Date
and shall not include any vacant or unoccupied property otherwise
owned or leased by Grace or any of its Subsidiaries (except in the
case of vacant or unoccupied property (I) on a site that is engaged
predominantly in the Packaging Business, to provide a reasonable
buffer area for such operations, to the extent practicable or (II)
that is used or held for use in the Packaging Business);
(d) other than as provided herein or in the Other
Agreements, Packco Assets shall not include any general corporate
or corporate service operations of Grace conducted in its Boca
Raton, Florida headquarters and the other locations set forth on
Schedule 1.01(b) hereto;
(e) all right, title and interest of Grace and its
Subsidiaries in the real property identified on Schedule 1.01(a)
shall be Packco Assets; and
(f) Packco Assets shall not include (I) the Woburn, MA
Grace facility or the Scuffletown Rd., South Carolina facility
previously used by the Packaging Business (or any Assets located
at or relating to such facilities); (II) Assets relating to any
divested business or product line of Grace or any of its
Subsidiaries (including rights to payment and indemnification
thereunder, but Packco Assets shall include rights to
indemnification relating to amounts paid by the Packco Group
pursuant to clause (a)(II) of the definition of Packco
Liabilities); (III) any interim service or tolling agreements
entered into in connection with any divestiture by Grace or any of
its Subsidiaries prior to the Distribution Date; and (IV) the
Assets set forth on Schedule 1.01(c).
Packco Group: Grace, Packco and the Packco Subsidiaries.
Packco Group Excess Cash: as defined in Section 2.02(c) hereof.
Packco Indemnitees: Grace, Packco, each Affiliate of Packco and
each of their respective Representatives and each of the heirs, executors,
successors and assigns of any of the foregoing.
Packco Liabilities: collectively, and in each case except to the
extent otherwise provided in any Other Agreement, (i) all Liabilities of Grace
and its Subsidiaries to the extent relating to or arising from the Packaging
Business or the Packco Assets; (ii) all Liabilities of Grace and its
Subsidiaries to the extent assigned to or assumed by Grace and Packco under
this Agreement or any Other Agreement; (iii) all Liabilities of Grace and/or
Packco under the Grace Credit Agreement; and (iv) all Liabilities set forth on
Schedule 1.01(d) hereto, provided that Packco Liabilities shall not, in any
event, include:
(a) Liabilities of Grace and its Subsidiaries (I) arising
under any Environmental Law relating to any facility or Asset that
was used or held for use in the Packaging Business prior to but
not on or after the Distribution Date (including formerly owned
or leased facilities and former offsite disposal facilities) or
(II) relating to any business or product line that was part of, or
any facility or Asset that was used or held for use in, the
Packaging Business that, in each case, has been divested prior to
the Distribution Date; provided that, except as otherwise provided
below, 25% of such Liabilities described in this clause not to
exceed $10 million in the aggregate shall be Packco Liabilities;
(b) Liabilities arising under any Environmental Law
relating to or arising from the Woburn, MA Grace facility or the
Scuffletown Road, SC facility;
(c) Liabilities for any indebtedness, other than
indebtedness under the Grace Credit Agreement and indebtedness to
unaffiliated persons outstanding on the date hereof;
(d) Liabilities of Grace or any of its Subsidiaries
relating to or arising from any interim service or tolling
agreements entered into in connection with any divestiture by
Grace or any of its Subsidiaries;
(e) Liabilities, whether such Liabilities relate to
events, occurrences or circumstances occurring or existing, or
whether such Liabilities arise, before, on or after the
Distribution Date, relating to asbestos or asbestos-containing
materials manufactured and/or sold (collectively, "Asbestos
Activities") by Grace, Grace-Conn. or any of their respective
Subsidiaries, affiliates or predecessors (but this clause shall
not include such Liabilities to the extent relating to Asbestos
Activities, if any, conducted after the Distribution Date of any
member of the Packco Group or any of their Affiliates after the
Distribution Date);
(f) Liabilities relating to or arising from any violation
or alleged violation on or prior to the Distribution Date by
Grace, Grace-Conn. or any of their respective Subsidiaries,
affiliates or predecessors of any federal, state or foreign
securities laws; and
(g) Liabilities relating to or arising from any breach or
alleged breach of fiduciary duties by any director or executive
officer of Grace, Grace-Conn. or any of their respective
Subsidiaries, affiliates or predecessors prior to the Distribution
Date.
Packco Repatriation Tax Costs: as defined in Section 2.02(c)
hereof.
Packco Subsidiaries: all direct and indirect Subsidiaries of
Grace to be transferred to or formed by Packco in connection with the
Contribution or the Foreign Transfers (including any such Subsidiary to be
formed pursuant to the Tax Sharing Agreement or Section 2.02).
Per Share Common Consideration: the shares (or fraction of a
share) of Newco Common Stock issuable in the Recapitalization per share of
Grace Common Stock outstanding as of the Record Date, such amount to be
determined by dividing (a) the amount equal to (I) 40,895,000, increased by
the product, if any, of (x) 1.7027 and (y) the net increase in outstanding
Sealed Air Common Shares between August 14, 1997 and the Distribution Date,
minus (II) the Net Option Number, by (b) the aggregate number of shares of
Grace Common Stock outstanding as of the Record Date, the result being rounded
to the nearest one-thousandth (or, in the event there is no nearest number,
rounded up to the next one-thousandth). "Net Option Number" means
(i) the aggregate number of shares of Newco Common Stock
into which all outstanding options to purchase shares
of Grace Common Stock outstanding as of the
Distribution Date and held by Packco Employees are or
may be exercisable (whether or not then exercisable)
immediately after the Effective Time (such number
calculated as provided in the Benefits Agreement, the
"Newco Options"), multiplied by the amount by which:
(I) the average of the arithmetic mean between the
highest and lowest sales prices of a share of
Newco Common Stock on the New York Stock Exchange
Composite Tape on each of the five trading days
beginning on the ex-dividend date for the
Distribution (the "SAC Stock Price")
exceeds (II) the weighted average per-share exercise price
for the Newco Options, calculated as provided in
the Benefits Agreement;
divided by (ii) the SAC Stock Price.
Fractional shares otherwise issuable to a Grace shareholder shall be treated
as provided in Section 2.07(b). In the event that shares of Grace Common
Stock are issued between the Record Date and the Effective Time, including
pursuant to the exercise of stock options granted by Grace (but not including
issuances in the Recapitalization), such Consideration shall be appropriately
adjusted.
Per Share Preferred Consideration: the shares (or fraction of a
share) of Newco Convertible Preferred Stock issuable in the Recapitalization
per share of Grace Common Stock outstanding as of the Record Date, such amount
to be calculated by dividing 36,000,000 by the aggregate number of shares of
Grace Common Stock outstanding as of the Record Date, the result being rounded
to the nearest one-thousandth (or, in the event there is no nearest number,
rounded up to the next one-thousandth). Fractional shares otherwise issuable
to a Grace shareholder shall be treated as provided in Section 2.07(b). In
the event that shares of Grace Common Stock are issued between the Record Date
and the Effective Time, including pursuant to the exercise of stock options
granted by Grace (but not including issuances in the Recapitalization), such
Consideration shall be appropriately adjusted.
Person: an individual, a partnership, a joint venture, a
corporation, a limited liability company, a trust, an unincorporated
organization or a government or any department or agency thereof.
Pre-Distribution Period: as defined in the Tax Sharing Agreement.
Privileged Information: with respect to either Group, Information
regarding a member of such Group, or any of its operations, Assets or
Liabilities (whether in documents or stored in any other form or known to its
employees or agents) that is or may be protected from disclosure pursuant to
the attorney-client privilege, the work product doctrine or other applicable
privileges, that a member of the other Group may come into possession of or
obtain access to pursuant to this Agreement or otherwise.
Recapitalization: as defined in Section 2.07 hereof.
Record Date: the close of business on the date to be determined
by the Board of Directors of Grace as the record date for determining
shareholders of Grace entitled to receive the Distribution and the
Recapitalization, which date shall be the day of, or the business day
immediately preceding the day of, the Effective Time.
Registration Statements: a registration statement on Form 10 (or,
if such form is not appropriate, the appropriate form pursuant to the
Securities Act) to be filed by New Grace with the SEC to effect the
registration of the New Grace Common Stock and the New Grace Rights pursuant to
the Exchange Act (or, if applicable, pursuant to the Securities Act) and the
registration statement to be filed by Grace with the SEC in connection with
the Recapitalization and the Merger pursuant to the Securities Act.
Representative: with respect to any Person, any of such Person's
directors, officers, employees, agents, consultants, advisors, accountants,
attorneys and representatives.
SAC: as defined in the Recitals to this Agreement.
SEC: the Securities and Exchange Commission.
Securities Act: the Securities Act of 1933, as amended, together
with the rules and regulations promulgated thereunder.
Severance Costs: as defined in Section 8.04 hereof.
Shared Facilities: other than Shared Regional Headquarters, any
production, manufacturing, sales office or other facility (whether owned or
leased) of Grace or any of its subsidiaries in which operations of both the
Packaging Business and the New Grace Business are conducted as of the
Distribution Date, including the facilities listed on Schedule 1.01(e) hereto.
Shared Regional Headquarters: regional headquarters of Grace in
which services are provided, as of the Distribution Date, to both the
Packaging Business and the New Grace Business.
Subsidiary: with respect to any specified Person, any corporation
or other legal entity of which such Person or any of its subsidiaries controls
or owns, directly or indirectly, more than 50% of the stock or other equity
interest entitled to vote on the election of members to the board of directors
or similar governing body.
Subsidiary Excess Cash: as defined in Section 2.02(c) hereof.
Tax: as defined in the Tax Sharing Agreement.
Tax Benefit: as defined in the Tax Sharing Agreement.
Tax Sharing Agreement: the Tax Sharing Agreement to be entered
into prior to the Distribution between Grace and New Grace, substantially in
the form of Exhibit B hereto, with such changes as are acceptable to Grace,
New Grace, Grace-Conn. and SAC.
Third-Party Claim: any claim, suit, derivative suit, arbitration,
inquiry, proceeding or investigation by or before any court, any governmental
or other regulatory or administrative agency or commission or any arbitration
tribunal asserted by a Person who or which is neither a party hereto nor an
Affiliate of a party hereto.
Transaction Agreements: as defined in the Merger Agreement.
Transaction Costs: as defined in Section 8.04 hereof.
Withholding Taxes: as defined in Section 2.02(c) hereof.
SECTION 1.02 References to Time. All references in this Agreement
to times of the day shall be to New York City time.
ARTICLE II
CERTAIN TRANSACTIONS PRIOR TO THE DISTRIBUTION DATE
SECTION 2.01 Transfer of Packco Assets; Assumption of Packco
Liabilities. (a) Prior to the Distribution Date but subject to Section 2.02,
Grace shall transfer, or cause to be transferred to Packco or, at Packco's
option, to a Packco Subsidiary effective as of the Distribution Date all of the
Packco Assets. Immediately prior to the Distribution, the capital stock of
Packco shall be distributed to Grace. Grace shall also transfer, or cause to
be transferred, the capital stock of any Subsidiary such that, as of the
Distribution Date, the Packco Subsidiaries shall be wholly owned (except for
shares held by directors or officers to comply with applicable law) by a
member of the Packco Group and the New Grace Subsidiaries shall be wholly
owned (except for shares held by directors or officers to comply with
applicable law) by a member of the New Grace Group. Effective as of the
Distribution Date, the transfers described in this Section will result in
Packco or another member of the Packco Group obtaining all of the rights,
title and interests of Grace and its Subsidiaries in the Packco Assets,
subject to Sections 2.05 and 2.10.
(b) Effective as of the Distribution Date and subject to Section
2.02, Packco shall, or shall cause a Packco Subsidiary to, assume, pay,
perform, and discharge in due course all of the Packco Liabilities.
(c) Separation of Assets. The Packco Assets and Grace-Conn.
Assets (including Assets that are, or are contained in, the Shared Facilities)
shall, to the extent reasonably practicable (including taking into account the
costs of any actions taken), be severed, divided or otherwise separated from
each other so that a member of the respective Group will own and control their
respective Assets as of the Distribution Date, provided that neither Grace nor
New Grace shall be obligated to make significant expenditures to effect such
separation prior to the Distribution Date. Actions taken and expenditures
incurred to separate the Shared Facilities shall be subject to the agreement
of Grace, New Grace and SAC. Such separation may include subdivision of real
property, subleasing or other division of shared buildings or premises and
allocation of shared working capital, equipment and other Assets. Such
separation shall be effected in a manner that does not unreasonably disrupt
either the Packaging Business or the New Grace Business and minimizes, to the
extent practicable, current and future costs (and losses of tax or other
economic benefits) of the respective Businesses. With respect to any Asset
that cannot reasonably be separated or otherwise allocated as provided above,
(i) all right, title and interest of Grace and its Subsidiaries shall be
allocated to the Group as to which such Asset is predominantly used or held
for use or predominantly relates and (ii) the other Group shall have a right
to use such Assets in its Business in a manner consistent with past practice
for a period which is coterminous with the life of the Asset described in (i)
(and the coextensive obligation to pay its allocable share of any costs or
expenses related to such Asset pursuant to the last sentence of this Section
2.01(c)). To the extent the separation of Assets cannot be achieved in a
reasonably practicable manner, the parties will enter into appropriate
arrangements regarding the shared Asset. Any costs related to the use of a
shared Asset that is not separated as of the Distribution Date shall be
allocated, with respect to the two-year period beginning immediately after the
Distribution Date, based on the methodology historically used by Grace, and,
for any period thereafter, using such reasonable manner as agreed by New Grace
and Grace.
(d) Intellectual Property. Notwithstanding the foregoing or
anything else contained herein, any intellectual property rights of Grace or
any of its Subsidiaries that are Packco Assets shall be licensed to or
transferred to Packco, as the case may be, as follows. With respect to
intellectual property rights used or held for use solely in connection with
the Packaging Business, Packco shall have full ownership (to the extent of
Grace's rights therein) of such rights. Except as otherwise provided in
Schedule 2.01(d), with respect to intellectual property rights that are used
or held for use in both the Packaging Business and the New Grace Business,
title to such rights shall be owned by the New Grace Group and the Packco
Group shall have an exclusive, worldwide, fully paid, perpetual, royalty-free
license to use the intellectual property rights for the field of use described
in the next sentence hereof. The field of use shall be (i) the businesses
engaged in by Packco and the Packco Group as of the Distribution Date and the
businesses of SAC as of the Distribution Date, including, in each case,
reasonable extensions thereof, provided, however, that such field of use shall
not include the field described in the proviso to the definition of "Packaging
Business" as well as (to the extent not described in such proviso) the
business of (A) closures, closure sealant compositions and multifunctional can
ends which are used on or with rigid containers and (B) coatings, sealants,
compositions and equipment used or held for use in the manufacture of cans and
other rigid containers, in each case including reasonable extensions thereof;
and (ii) notwithstanding (i), with respect to reasonable extensions referred
to in the first part of clause (i) that overlap with the reasonable extensions
described in the proviso in clause (i), the field of use shall include such
overlap but the license therefor shall be non-exclusive and the New Grace
Group shall also have title to use such intellectual property in the area of
overlap. Such licenses shall not unduly restrict the subsequent transfer or
license (within the applicable field of use) of the intellectual property.
Such arrangements shall not restrict or limit in any way the rights of SAC to
use any intellectual property that is not a Packco Asset.
(e) The costs (and other out-of-pocket losses) attributable to
the separation of the Assets, including, without limitation, the Shared
Facilities, shall be allocated pursuant to Section 8.04.
SECTION 2.02 Certain Foreign Transfers. (a) Prior to the
Distribution Date, Grace shall use its reasonable best efforts to effect the
legal separation of the Packco Assets and Packco Liabilities, on the one hand,
from the Grace-Conn. Assets and Grace-Conn. Liabilities, on the other hand,
that are located in jurisdictions outside the United States. Such separation
may include asset transfers, stock transfers, spin-offs, mergers,
reorganizations, consolidations or other transfers which may be effected
before, simultaneously with or after the Distribution (collectively, the
"Foreign Transfers"). Any Foreign Transfer that occurs after the Distribution
shall be effected pursuant to a binding commitment in existence prior to the
Distribution Date.
(b) The Adjusted Foreign Transfer Taxes shall be allocated
between the New Grace Group and the Packco Group as provided in Section 8.04.
Each party shall reimburse the other to the extent that such other party pays
Foreign Transfer Taxes in excess of the amount of Adjusted Foreign Transfer
Taxes allocable to such other party pursuant to Section 8.04. Such payment
shall, for Tax purposes, be characterized as an adjustment of the New Grace
Capital Contribution.
(c) (i) "Adjusted Foreign Transfer Taxes" shall mean the excess,
if any, of (I) the sum of the Foreign Transfer Taxes, Packco Repatriation Tax
Costs and New Grace Repatriation Tax Costs over (II) the present value using a
discount rate of 5% (or, in the case of value added taxes, the gross value) of
any Tax Benefits (including foreign tax credits for United States federal
income tax purposes ("Foreign Tax Credits") other than Foreign Tax Credits
attributable to Foreign Transfer Taxes or Withholding Taxes that in the
aggregate do not exceed the Tax imposed by the United States and any political
subdivision thereof on the Deemed Repatriation) that may or would arise as a
result of the Foreign Transfers, the payment of the Foreign Transfer Taxes or
the Deemed Repatriations. Such Tax Benefits shall be presumed to be utilized
in the first year in which they arise (or are deemed to arise). All amounts
relating to the calculation of Adjusted Foreign Transfer Taxes and the amount
calculated pursuant to clause (c) of the definition of "New Grace Capital
Contribution" shall be calculated in local currency and translated into U.S.
Dollars at the Foreign Exchange Rate for such currency as of the Distribution
Date.
(ii) "Foreign Transfer Taxes" shall mean net Taxes that may be
imposed by any jurisdiction other than the United States or any political
subdivision thereof in connection with the Foreign Transfers (and any Tax net
of associated foreign tax credits imposed by the United States or a political
subdivision thereof on the Foreign Transfer in Venezuela) on any member of the
New Grace Group or the Packco Group; provided, however, that the Foreign NOLs
shall be taken into account in calculating the amount of Foreign Transfer
Taxes.
(iii) "Packco Repatriation Tax Costs" and "New Grace Repatriation
Tax Costs", respectively, shall mean the sum of the (I) withholding Taxes that
would be imposed by a foreign jurisdiction on a deemed distribution of Packco
Group Excess Cash to Packco or of New Grace Group Excess Cash to New Grace,
respectively (the "Deemed Repatriations"), on the day immediately following
the Distribution ("Withholding Taxes") and (II) Taxes that would be imposed by
the United States or any political subdivision thereof on a Deemed Repatriation
(without taking into account any net operating loss or other deduction) in
excess of the Foreign Tax Credits of Packco or Grace-Conn., respectively, in
respect of Taxes paid or deemed paid by Packco or Grace-Conn., respectively,
as a result of such Deemed Repatriation ("Deemed Foreign Tax Credits").
(iv) "Packco Group Excess Cash" and "New Grace Group Excess
Cash", respectively, shall mean the sum of the amount of Subsidiary Excess
Cash for all Foreign Packco Subsidiaries or Foreign New Grace Subsidiaries.
(v) "Subsidiary Excess Cash" shall mean the cash transferred to
a Foreign Packco Subsidiary or Foreign New Grace Subsidiary pursuant to a
Foreign Transfer in excess of the sum of (I) the amount of debt that may be
repaid without penalty plus current accrued unpaid Taxes of such Subsidiary
as of the Distribution Date and (II) the excess of trade and other short-term
payables over trade and other short-term receivables of such Subsidiary
("Excess Short-Term Payables"); provided, however, that each party shall take
steps (including causing the Subsidiary to loan cash to an Affiliate organized
in a foreign jurisdiction to the extent that such Affiliate can use such cash
to repay its debt or to pay current accrued unpaid Taxes and Excess
Short-Term Payables) and cooperate in good faith to minimize the amount of
Subsidiary Excess Cash, taking into account Tax and financial considerations
as if each party were bearing the full amount of its respective Repatriation
Tax Cost.
(vi) The "Foreign NOLs" shall mean net operating losses for
German income tax purposes of Grace GmbH and Grace Multiflex GmbH, and net
operating losses for other foreign income tax purposes of any other Foreign
Packco Subsidiary, attributable to the Pre-Distribution Period to the extent,
in either case, that such net operating losses would be an Overall Tax Benefit
(or Hypothetical Pre-Distribution Overall Tax Benefit), calculated without
regard to any Tax Item arising on the Foreign Transfer involving such
Subsidiary, that does not exceed the amount of income or gain arising, for
purposes of the applicable foreign income tax, on the Foreign Transfer
involving such Subsidiary.
(d) In connection with the Foreign Transfers, certain Assets
(including cash) or Liabilities that, without the agreement of the parties as
required by this Section 2.02(d), would be Grace-Conn. Assets or Grace-Conn.
Liabilities, as the case may be, may be retained by Packco or a Packco
Subsidiary (or Assets or Liabilities that, without the agreement of the
parties as required by this Section 2.02(d), would be Packco Assets or Packco
Liabilities, may be retained by New Grace or a New Grace Subsidiary) if agreed
between Grace and New Grace and reasonably satisfactory to SAC.
(e) Neither SAC nor any member of the Packco Group or the New
Grace Group shall take any action, or fail or omit to take any action where
the taking of such action or the failure or omission to take such action would
disturb the tax treatment assumed by the parties in calculating the Foreign
Transfer Taxes and cause any Indemnifiable Loss to a member of the other
Group, including an increase in the amount of Adjusted Foreign Transfer Taxes
borne by the other Group. Grace agrees to indemnify and hold the Grace-Conn.
Indemnitees harmless, and Grace-Conn. agrees to indemnify and hold the Packco
Indemnitees harmless, from and against any such Indemnifiable Loss without
regard to any limitation contained in Section 8.04.
(f) Adjusted Foreign Transfer Taxes shall be recalculated upon
any audit adjustment, Final Determination or any other change (i) of a Foreign
Transfer Tax or another foreign Tax or Tax Item that would change the amount
of Deemed Foreign Tax Credit or otherwise alter Packco Repatriation Tax Costs
or New Grace Repatriation Tax Costs or (ii) that changes the amount of a
Foreign NOL. Appropriate payment shall be made between the parties such that
Foreign Transfer Taxes, as so redetermined, and Adjusted Foreign Transfer
Taxes, as so recalculated, are shared according to the principles of Section
2.02(b).
SECTION 2.03 Certificate of Incorporation; By-laws; Rights Plan.
(a) Prior to the Distribution Date, Grace shall contribute the capital stock
of Grace-Conn. to New Grace, as well as the capital stock of any other
Subsidiary of Grace formed in connection with the Foreign Transfers that is
not a Packco Subsidiary. In addition, prior to the Distribution Date, the
parties hereto shall take all action necessary so that, at the Distribution
Date, New Grace's name shall be "X. X. Xxxxx & Co."
(b) Prior to the Distribution Date, Grace and New Grace shall
take all action necessary so that the certificate of incorporation and by-laws
of New Grace and the preferred share purchase rights plan of New Grace shall
be in effect as specified by New Grace, each in the form of Exhibits C, D and
E hereto, respectively (with such changes as Grace and New Grace may find
appropriate).
(c) Prior to the Distribution Date, Grace and Packco shall take
all action necessary so that the certificate of incorporation and by-laws of
Packco shall be substantially similar to the customary form of certificate of
incorporation and by-laws for a wholly owned Delaware subsidiary and
reasonably acceptable to SAC.
SECTION 2.04 Issuance of Stock. Prior to the Distribution Date,
the parties hereto shall take all steps necessary so that the number of shares
of New Grace Common Stock outstanding and held by Grace shall equal the number
of shares of Grace Common Stock outstanding on the Record Date.
SECTION 2.05 Other Agreements; Shared Facilities. (a) Each of
Grace and New Grace shall, prior to the Distribution Date, enter into, or
cause the appropriate members of the Group of which it is a member to enter
into, the Other Agreements in connection with the Distribution, including,
without limitation, agreements with respect to (i) insurance procedures, (ii)
interim services (including, without limitation, services to be provided by
the Shared Regional Headquarters consistent with current operations of the
respective Businesses, and services to be provided by country organizations
to operations of the other Business consistent with past practice), which
shall be charged at allocated cost based on Grace's historical methodology,
subject to applicable tax laws in any jurisdiction, (iii) intellectual
property licenses as contemplated by Section 2.01, (iv) and other matters as
may be advisable. The Other Agreements (or, in the case of the forms of
agreement attached hereto, any amendments thereto) shall be on terms
reasonably acceptable to Grace, New Grace and SAC. Agreements regarding
interim services (including country services) shall generally have a term not
to exceed 24 months (subject to earlier termination on six months' notice (or
such shorter period as does not impose additional costs on the providing
party) by the party receiving the services) and will provide, in the case of
agreements pursuant to which Packco is to provide services to New Grace, for
services at least as extensive as any obligations contained in interim service
and tolling agreements entered into prior to the Distribution Date between
Grace and a third party. Such Agreements regarding interim services
(including country services) will also provide that any value added taxes
imposed on such services shall be paid and borne, as between the parties, by
the party receiving such services. The parties shall use reasonable efforts
to conclude the Other Agreements prior to the time the other conditions to the
Distribution have been satisfied.
(b) The parties acknowledge and agree that operation by members
of the Packco Group or New Grace Group of the Shared Facilities after the
Distribution Date may continue to require the joint occupation or use by the
parties of certain related premises or facilities (such as waste disposal,
utilities, security and other matters). The parties shall enter into
appropriate arrangements regarding cost allocation and service provision with
respect to these matters, which allocation shall be as described in Section
2.01(c) and 2.05(a), as applicable. The agreements described in this
paragraph (b) shall be included in the Other Agreements.
SECTION 2.06 Financing. (a) Prior to the Distribution Date,
Grace and/or Packco shall enter into the Grace Credit Agreement, which shall
be on terms reasonably acceptable to Grace and SAC, and Grace and/or Packco
shall contribute, or cause to be contributed, the New Grace Capital
Contribution to Grace-Conn., all as described in this Section. No member of
the New Grace Group shall have any Liability or obligation with respect to the
Grace Credit Agreement. At the election of New Grace and subject to the
consent of Grace and SAC, which will not be unreasonably withheld, a portion
of the New Grace Capital Contribution may be contributed to foreign
Subsidiaries of New Grace. It is contemplated that the New Grace Capital
Contribution shall be effected as follows; provided, however, that Packco
shall not borrow an amount in excess of the tax basis, for U.S. federal income
tax purposes, of Grace-Conn. in the stock of Packco: (i) each of Grace and
Packco shall borrow agreed-upon amounts; (ii) Packco distributes a portion of
the New Grace Capital Contribution to Grace-Conn. which uses such funds to pay
creditors; (iii) the Intragroup Spinoff occurs; (iv) Grace contributes the
remaining amount of the New Grace Capital Contribution to New Grace as well as
the capital stock of Grace-Conn.; and (v) New Grace loans the amount described
in clause (iv) to Grace-Conn. in the form of a security.
(b) Prior to the Distribution, Grace-Conn. may consummate a cash
tender offer in accordance with applicable securities laws for any and all
Grace-Conn. Public Debt. Grace-Conn. may also elect, in its discretion, to
defease or otherwise acquire any portion of the Grace-Conn. Public Debt. To
the extent that upon consummation of the Distribution, there remains
outstanding (other than to the extent owned by Grace-Conn. or New Grace) in
excess of $50 million in principal amount of the Grace-Conn. Public Debt, New
Grace or Grace-Conn. shall obtain an "evergreen" letter of credit, with an
initial expiration date no sooner than 364 days after the Effective Time, from
a financial institution or group of financial institutions reasonably
acceptable to Grace and SAC for the benefit of Grace with respect to such
outstanding amount from time to time in excess of $50 million.
The letter of credit shall be in form and substance reasonably
acceptable to SAC and shall entitle Grace to draw thereunder if Grace shall be
required to make (and makes) any payment pursuant to the terms of its
guarantee of any Grace-Conn. Public Debt. The expiration date of such letter
of credit shall be automatically extended for successive 364-day periods, with
an absolute expiration date on the date that is the 91st day after the date on
which the outstanding principal amount of the Grace-Conn. Public Debt shall
have been reduced to no more than $50 million, unless, prior to such 91st day,
any payments shall have been made that are subject to avoidance pursuant to a
bankruptcy or similar proceeding, in which case such letter of credit shall be
extended (with respect to the applicable payments) until such payments are no
longer subject to such avoidance, unless notice of termination is given by the
issuing bank or banks, in which case Grace shall be entitled to draw
thereunder (whether or not any demand for payment in respect of its guarantee
shall have been made), provided that, to the extent such funds are not used to
make payments on the Grace-Conn. Public Debt, Grace shall hold such proceeds
separate in an interest-bearing escrow account with a financial institution
and pursuant to escrow arrangements reasonably acceptable to Grace-Conn. To
the extent that the amount held in such escrow account is greater than (i) the
outstanding Grace-Conn. Public Debt minus (ii) $50 million, Grace shall remit
such excess amount to Grace-Conn. The amount of the letter of credit may be
reduced from time to time, but shall not at any time be less than the amount
by which the outstanding principal amount of the Grace-Conn. Public Debt
(other than such debt owned by a member of the New Grace Group) exceeds $50
million.
"Debt Costs" shall mean the costs incurred by Grace or Grace-Conn.
in connection with a tender offer, defeasance, retirement or other acquisition
of Grace-Conn. Public Debt, which costs shall consist of (i) any incremental
costs, fees, expenses and payments incurred in connection with such action,
and in the case of a tender offer shall include all costs, fees, expenses and
payments incurred in connection with a tender offer that are, in the
aggregate, in excess of the outstanding principal amount and accrued interest
of the Grace-Conn. Public Debt so acquired; plus (ii) any costs associated
with terminating or re-negotiating any related interest rate swap agreements
with respect to the amount of Grace-Conn. Public Debt acquired, defeased or
retired; and plus (iii) the costs of the letter of credit described above.
SECTION 2.07 Grace Recapitalization. (a) Immediately prior to
the Effective Time, Grace shall consummate a recapitalization of the Grace
Common Stock, such that each share of Grace Common Stock outstanding as of the
Record Date shall be exchanged for the Per Share Common Consideration and the
Per Share Preferred Consideration (the "Recapitalization"). Options to
purchase shares of Grace Common Stock previously granted by Grace or a
predecessor and outstanding as of the time of the Recapitalization shall be
treated as provided in the Benefits Agreement. In connection with the
Recapitalization and the Merger, the Grace Certificate of Incorporation shall
be amended so that the par value of the Newco Common Stock will be $.10 per
share, as well as otherwise provided in the Merger Agreement. Grace shall
retain an Exchange Agent or transfer agent as appropriate and take other
appropriate actions to effect the Recapitalization, including customary
procedures with respect to the exchange of share certificates.
(b) No fractional shares of Newco Common Stock or Newco
Convertible Preferred Stock shall be issued in the Recapitalization. In lieu
of any such fractional shares, each person who would otherwise have been
entitled to a fraction of a share of Newco Common Stock or Newco Convertible
Preferred Stock upon surrender of former shares of Grace Common Stock for
exchange pursuant to the Recapitalization shall be paid an amount in cash
(without interest) equal to such holder's proportionate interest in the net
proceeds from the sale or sales in the open market by the Exchange Agent, on
behalf of all such holders, of the aggregate fractional shares of Newco Common
Stock or Newco Convertible Preferred Stock issued pursuant to this paragraph.
As soon as practicable following the Distribution Date, the Exchange Agent
shall determine the excess of (i) the number of full shares of Newco Common
Stock or Newco Convertible Preferred Stock, as the case may be, delivered to
the Exchange Agent over (ii) the aggregate number of full shares of Newco
Common Stock or Newco Convertible Preferred Stock to be distributed in respect
of Grace Common Shares (such excess, the "Excess Shares"), and the Exchange
Agent, as agent for the former holders of such Grace Common Shares, shall sell
the Excess Shares at the prevailing prices on the open market. The sale of
the Excess Shares by the Exchange Agent shall be executed on a public exchange
through one or more firms and shall be executed in round lots to the extent
practicable. Grace shall pay all commissions, transfer taxes and other
out-of-pocket transaction costs, including the expenses and compensation of
the Exchange Agent, incurred in connection with such sale of Excess Shares.
Until the net proceeds of such sale or sales have been distributed, the
Exchange Agent shall hold such proceeds in trust for such former stockholders.
As soon as practicable after the determination of the amount of cash to be
paid in lieu of any fractional interests, the Exchange Agent shall make
available in accordance with this Agreement such amounts to such former
stockholders.
SECTION 2.08 Registration and Listing. Prior to the Distribution
Date:
(a) The parties shall take such efforts regarding the
Registration Statements and the Joint Proxy Statement as is provided in the
Merger Agreement. After such Registration Statements become effective, Grace
shall cause the Joint Proxy Statement and the information statement (or
prospectus, as the case may be) for the New Grace Common Stock forming a part
of the Registration Statement for New Grace to be delivered to all holders of
record of Grace Common Stock as of the record date for the meeting of Grace
shareholders to which the Joint Proxy Statement relates.
(b) The parties hereto shall use reasonable efforts to take all
such action as may be necessary or appropriate under state securities and blue
sky laws in connection with the transactions contemplated by this Agreement.
(c) New Grace and Grace shall prepare, and New Grace and Grace
shall file and seek to make effective, an application for the listing of the
New Grace Common Stock on the NYSE, and an application for the listing on the
NYSE of the Newco Common Stock and the Newco Convertible Preferred Stock to be
issued in connection with the Recapitalization and the Merger, in each case
subject to official notice of issuance.
(d) The parties hereto shall cooperate in preparing, filing with
the SEC and causing to become effective any registration statements or
amendments thereto which are necessary or appropriate in order to effect the
transactions contemplated hereby or to reflect the establishment of, or
amendments to, any employee benefit plans contemplated hereby or by the
Employee Benefits Agreement requiring registration under the Securities Act.
SECTION 2.09 Grace and New Grace Boards. The parties hereto shall
take all steps necessary so that, effective immediately after the
Distribution, the Board of Directors of each of Grace and New Grace, so long
as the common stock of such company is registered under Section 12 of the
Exchange Act, shall at all times be comprised of a majority of independent
directors (other than due to temporary vacancies).
SECTION 2.10 Transfers Not Effected Prior to the Distribution;
Transfers Deemed Effective as of the Distribution Date. To the extent that
any transfers contemplated by this Article II shall not have been consummated
on the Distribution Date, including, without limitation, any Foreign
Transfers, the parties shall cooperate to effect such transfers as promptly
following the Distribution Date as shall be practicable. Nothing herein shall
be deemed to require the transfer of any Assets or the assumption of any
Liabilities which by their terms or operation of law cannot be transferred or
assumed; provided, however, that Grace and New Grace and their respective
Subsidiaries shall cooperate to obtain any necessary consents or approvals for
the transfer of all Assets and Liabilities contemplated to be transferred
pursuant to this Article II. In the event that any such transfer of Assets or
Liabilities has not been consummated, effective as of and after the
Distribution Date, the party retaining such Asset or Liability shall
thereafter hold such Asset in trust for the use and benefit of the party
entitled thereto (at the expense of the party entitled thereto) and retain
such Liability for the account of the party by whom such Liability is to be
assumed pursuant hereto, and take such other action as may be reasonably
requested by the party to which such Asset is to be transferred, or by whom
such Liability is to be assumed, as the case may be, in order to place such
party, insofar as reasonably possible, in the same position as would have
existed had such Asset or Liability been transferred as contemplated hereby.
As and when any such Asset or Liability becomes transferable, such transfer
shall be effected forthwith. The parties agree that, as of the Distribution
Date, each party hereto shall be deemed to have acquired complete and sole
beneficial ownership over all of the Assets, together with all rights, powers
and privileges incident thereto, and shall be deemed to have assumed in
accordance with the terms of this Agreement all of the Liabilities, and all
duties, obligations and responsibilities incident thereto, which such party is
entitled to acquire or required to assume pursuant to the terms of this
Agreement.
SECTION 2.11 Intercompany Accounts and Distribution Payments.
After the Distribution Date, the parties shall be obligated to pay only those
intercompany accounts between members of the New Grace Group and members of
the Packco Group that arose in connection with transfers of goods and services
in the ordinary course of business, consistent with past practices (which the
parties shall use reasonable efforts to settle prior to the Distribution Date),
and all other intercompany accounts shall be settled without transfer of
non-financial assets as of the Distribution Date.
ARTICLE III
THE DISTRIBUTION
SECTION 3.01 Record Date and Distribution Date. Subject to the
satisfaction of the conditions set forth in Section 8.01(a), the Board of
Directors of Grace, in its sole discretion and consistent with the Merger
Agreement, shall establish the Record Date and the Distribution Date and any
appropriate procedures in connection with the Distribution.
SECTION 3.02 The Agent. Prior to the Distribution Date, New Grace
shall enter into an agreement with the Agent providing for, among other
things, the payment of the Distribution to the holders of Grace Common Stock
in accordance with this Article III.
SECTION 3.03 Delivery of Share Certificates to the Agent. Prior
to the Distribution Date, Grace shall deliver to the Agent a share certificate
representing (or authorize the related book-entry transfer of) all of the
outstanding shares of New Grace Common Stock to be distributed in connection
with the payment of the Distribution. After the Distribution Date, upon the
request of the Agent, New Grace shall provide all certificates for shares (or
book-entry transfer authorizations) of New Grace Common Stock that the Agent
shall require in order to effect the Distribution.
SECTION 3.04 The Distribution. Subject to the terms and
conditions of this Agreement, New Grace shall instruct the Agent to
distribute, as of the Distribution Date, one share of New Grace Common Stock
in respect of each share of Grace Common Stock held by holders of record of
Grace Common Stock on the Record Date.
ARTICLE IV
SURVIVAL AND INDEMNIFICATION
SECTION 4.01 Survival of Agreements. All covenants and agreements
of the parties hereto contained in this Agreement shall survive the
Distribution Date.
SECTION 4.02 Indemnification. (a) Except as specifically
otherwise provided in the Other Agreements, the New Grace Group shall
indemnify, defend and hold harmless the Packco Indemnitees from and against
(i) all Indemnifiable Losses arising out of or due to the failure or alleged
failure of any member of the New Grace Group (x) to pay any Grace-Conn.
Liabilities (including, without limitation, all Liabilities specifically
excluded from the definition of Packco Liabilities herein), whether such
Indemnifiable Losses relate to events, occurrences or circumstances occurring
or existing, or whether such Indemnifiable Losses are asserted, before or
after the Distribution Date, or (y) to perform any of its obligations under
this Agreement (including the obligation to effect the transfers as provided
in the last sentence of Section 2.01(a)); (ii) all Indemnifiable Losses
arising out of or based upon any untrue statement or alleged untrue statement
of a material fact, or omission or alleged omission to state a material fact
required to be stated, in the Registration Statements or the Joint Proxy
Statement or any preliminary or final form thereof or any amendment thereto,
or necessary to make the statements therein not misleading, except that such
indemnifications shall not apply to any Indemnifiable Losses that arise out of
or are based upon any statement or omission, or alleged statement or omission,
in any of the portions of the Registration Statements or the Joint Proxy
Statement, or any preliminary or final form thereof or any amendment thereto,
solely with respect to information relating to SAC supplied by SAC
specifically for use in the preparation thereof or relating to Newco after the
Merger; and (iii) all Indemnifiable Losses arising from or relating to all
existing litigation brought by pre-Merger shareholders of Grace acting in such
capacity and all litigation to be brought by pre-Merger shareholders of Grace
acting in such capacity and relating to any events or transactions occurring
prior to the Effective Time or to the transactions contemplated by the
Transaction Agreements.
(b) Except as specifically otherwise provided in the Other
Agreements, the Packco Group shall indemnify, defend and hold harmless the
New Grace Indemnitees from and against (i) all Indemnifiable Losses arising
out of or due to the failure or alleged failure of any member of the Packco
Group to pay any Packco Liabilities or to perform any of its obligations under
this Agreement after the Distribution Date; and (ii) all Indemnifiable Losses
arising out of or based upon any untrue statement or alleged untrue statement
of a material fact, or omission or alleged omission to state a material fact
required to be stated, in any portion of the Registration Statements or the
Joint Proxy Statement (or any preliminary or final form thereof or any
amendment thereto) solely with respect to information relating to SAC supplied
by SAC specifically for use in the preparation thereof or relating to Newco
after the Merger (including the pro forma financial information relating to
Newco contained in the Registration Statements (other than the historical
information relating to Grace and the Packaging Business)), or necessary to
make the statements therein not misleading.
(c) If any Indemnity Payment required to be made hereunder or
under any Other Agreement is denominated in a currency other than United
States dollars, such payment shall be made in United States dollars and the
amount thereof shall be computed using the Foreign Exchange Rate for such
currency determined as of the date on which such Indemnity Payment is made.
(d) Notwithstanding anything to the contrary set forth herein,
indemnification relating to any arrangements between any member of the Packco
Group and any member of the New Grace Group for the provision after the
Distribution of goods and services in the ordinary course shall be governed by
the terms of such arrangements and not by this Section or as otherwise set
forth in this Agreement and the Other Agreements.
SECTION 4.03 Procedures for Indemnification for Third-Party
Claims. (a) Grace shall, and shall cause the other Packco Indemnitees to,
notify New Grace in writing promptly after learning of any Third-Party Claim
for which any Packco Indemnitee intends to seek indemnification from New Grace
under this Agreement. New Grace shall, and shall cause the other New Grace
Indemnitees to, notify Grace in writing promptly after learning of any
Third-Party Claim for which any New Grace Indemnitee intends to seek
indemnification from Grace under this Agreement. The failure of any
Indemnitee to give such notice shall not relieve any Indemnifying Party of its
obligations under this Article except to the extent that such Indemnifying
Party or its Affiliate is actually prejudiced by such failure to give notice.
Such notice shall describe such Third-Party Claim in reasonable detail
considering the Information provided to the Indemnitee.
(b) Except as otherwise provided in paragraph (c) of this
Section, an Indemnifying Party may, by notice to the Indemnitee and to Grace,
if New Grace is the Indemnifying Party, or to the Indemnitee and New Grace, if
Grace is the Indemnifying Party, at any time after receipt by such
Indemnifying Party of such Indemnitee's notice of a Third-Party Claim,
undertake (itself or through another member of the Group of which the
Indemnifying Party is a member) the defense or settlement of such Third-Party
Claim. If an Indemnifying Party undertakes the defense of any Third-Party
Claim, such Indemnifying Party shall thereby admit its obligation to indemnify
the Indemnitee against such Third-Party Claim, and such Indemnifying Party
shall control the investigation and defense or settlement thereof, and the
Indemnitee may not settle or compromise such Third-Party Claim, except that
such Indemnifying Party shall not (i) require any Indemnitee, without its
prior written consent, to take or refrain from taking any action in connection
with such Third-Party Claim, or make any public statement, which such
Indemnitee reasonably considers to be against its interests, nor (ii) without
the prior written consent of the Indemnitee and of Grace, if the Indemnitee
is a Packco Indemnitee, or the Indemnitee and of New Grace, if the Indemnitee
is a New Grace Indemnitee, consent to any settlement that does not include as
a part thereof an unconditional release of the Indemnitees from liability with
respect to such Third-Party Claim or that requires the Indemnitee or any of
its Representatives or Affiliates to make any payment that is not fully
indemnified under this Agreement or to be subject to any non-monetary remedy;
and subject to the Indemnifying Party's control rights, as specified herein,
the Indemnitees may participate in such investigation and defense, at their
own expense. Following the provision of notices to the Indemnifying Party,
until such time as an Indemnifying Party has undertaken the defense of any
Third-Party Claim as provided herein, such Indemnitee shall control the
investigation and defense or settlement thereof, without prejudice to its
right to seek indemnification hereunder.
(c) If an Indemnitee reasonably determines that there may be
legal defenses available to it that are different from or in addition to those
available to its Indemnifying Party which make it inappropriate for the
Indemnifying Party to undertake the defense or settlement thereof, then such
Indemnifying Party shall not be entitled to undertake the defense or
settlement of such Third-Party Claim; and counsel for the Indemnifying Party
shall be entitled to conduct the defense of such Indemnifying Party and
counsel for the Indemnitee (selected by the Indemnitee) shall be entitled to
conduct the defense of such Indemnitee, it being understood that both such
counsel shall cooperate with each other to conduct the defense or settlement
of such action as efficiently as possible. The above provisions of this
paragraph (c) shall not apply to Third-Party Claims relating to asbestos
claims described in the proviso to the definition of Packco Liabilities.
Rather, with respect to such asbestos claims, with the consent of Grace-Conn.,
which shall not be unreasonably withheld, counsel for the Indemnifying Party
shall be entitled to conduct the defense of such Third-Party Claim to the
extent the legal defenses available to the Indemnifying Party and the
Indemnitee are substantially similar, but counsel for the Indemnitee shall be
entitled to assert and conduct its own defense to the extent, but only to the
extent, of any additional legal defenses available to it.
(d) In no event shall an Indemnifying Party be liable for the
fees and expenses of more than one counsel for all Indemnitees (in addition to
its own counsel, if any) in connection with any one action, or separate but
similar or related actions, in the same jurisdiction arising out of the same
general allegations or circumstances.
(e) New Grace shall, and shall cause the other New Grace
Indemnitees to, and Grace shall, and shall cause the other Packco Indemnitees
to, make available to each other, their counsel and other Representatives, all
information and documents reasonably available to them which relate to any
Third-Party Claim, and otherwise cooperate as may reasonably be required in
connection with the investigation, defense and settlement thereof, subject to
the terms and conditions of a mutually acceptable joint defense agreement.
Any joint defense agreement entered into by New Grace or Grace with any third
party relating to any Third-Party Claim shall provide that New Grace or Grace
may, if requested, provide information obtained through any such agreement to
the New Grace Indemnitees and/or the Packco Indemnitees.
SECTION 4.04 Remedies Cumulative. The remedies provided in this
Article IV shall be cumulative and shall not preclude assertion by any
Indemnitee of any other rights or the seeking of any other remedies against
any Indemnifying Party. However, the procedures set forth in Section 4.03
shall be the exclusive procedures governing any indemnity action brought under
this Agreement, except as otherwise specifically provided in any of the Other
Agreements.
ARTICLE V
CERTAIN ADDITIONAL COVENANTS
SECTION 5.01 Notices to Third Parties. In addition to the actions
described in Section 5.02, the members of the Packco Group and the members of
the New Grace Group shall cooperate to make all other filings and give notice
to and obtain consents from all third parties that may reasonably be required
to consummate the transactions contemplated by this Agreement, the Merger
Agreement and the Other Agreements.
SECTION 5.02 Licenses and Permits. Each party hereto shall cause
the appropriate members of its Group to prepare and file with the appropriate
licensing and permitting authorities applications for the transfer or
issuance, as may be necessary or advisable in connection with the transactions
contemplated by this Agreement, the Other Agreements and the Merger Agreement,
to its Group of all material governmental licenses and permits required for
the members of its Group to operate its Business after the Distribution Date.
The members of the New Grace Group and the members of the Packco Group shall
cooperate and use all reasonable efforts to secure the transfer or issuance of
the licenses and permits.
SECTION 5.03 Intercompany Agreements. All contracts, licenses,
agreements, commitments or other arrangements, formal or informal, between any
member of the Packco Group, on the one hand, and any member of the New Grace
Group, on the other hand, in existence as of the Distribution Date, pursuant
to which any member of either Group makes payments in respect of Taxes to any
member of the other Group or provides to any member of the other Group goods
or services (including, without limitation, management, administrative, legal,
financial, accounting, data processing, insurance or technical support), or
the use of any Assets of any member of the other Group, or the secondment of
any employee, or pursuant to which rights, privileges or benefits are afforded
to members of either Group as Affiliates of the other Group, shall terminate
as of the close of business on the day prior to the Distribution Date, except
as specifically provided herein or in the Other Agreements. From and after
the Distribution Date, no member of either Group shall have any rights under
any such contract, license, agreement, commitment or arrangement with any
member of the other Group, except as specifically provided herein or in the
Other Agreements.
SECTION 5.04 Guarantee Obligations. (a) Grace and New Grace
shall cooperate, and shall cause their respective Groups to cooperate, to
terminate, or to cause a member of the Packco Group to be substituted in all
respects for any member of the New Grace Group in respect of, all obligations
of any member of the New Grace Group under any Packco Liabilities for which
such member of the New Grace Group may be liable, as guarantor, original
tenant, primary obligor or otherwise. If such a termination or substitution
is not effected by the Distribution Date, (i) Grace shall indemnify and hold
harmless the New Grace Indemnitees for any Indemnifiable Loss arising from or
relating thereto, and (ii) without the prior written consent of the Chief
Financial Officer, Treasurer or any Assistant Treasurer of New Grace, from and
after the Distribution Date, Grace shall not, and shall not permit any member
of the Packco Group or any of its Affiliates to, renew or extend the term of,
increase its obligations under, or transfer to a third party, any loan, lease,
contract or other obligation for which any member of the New Grace Group is or
may be liable unless all obligations of the New Grace Group with respect
thereto are thereupon terminated by documentation reasonably satisfactory in
form and substance to the Chief Financial Officer, Treasurer or any Assistant
Treasurer of New Grace, provided that the limitations in clause (ii) shall not
apply in the event that a member of the Packco Group obtains a letter of
credit from a financial institution reasonably acceptable to New Grace and for
the benefit of New Grace with respect to such obligation of the New Grace
Group.
(b) Grace and New Grace shall cooperate, and shall cause their
respective Groups to cooperate, to terminate, or to cause a member of the New
Grace Group to be substituted in all respects for any member of the Packco
Group in respect of, all obligations of any member of the Packco Group under
any Grace-Conn. Liabilities for which such member of the Packco Group may be
liable, as guarantor, original tenant, primary obligor or otherwise. The
foregoing sentence does not apply to the Grace-Conn. Public Debt, which is
governed by Section 2.06. If such a termination or substitution is not
effected by the Distribution Date, (i) New Grace shall indemnify and hold
harmless the Packco Indemnitees for any Indemnifiable Loss arising from or
relating thereto, and (ii) without the prior written consent of the Chief
Financial Officer, Treasurer or any Assistant Treasurer of Grace, from and
after the Distribution Date, New Grace shall not, and shall not permit any
member of the New Grace Group to, renew or extend the term of, increase its
obligations under, or transfer to a third party, any loan, lease, contract or
other obligation for which any member of the Packco Group is or may be liable
unless all obligations of the Packco Group with respect thereto are thereupon
terminated by documentation reasonably satisfactory in form and substance to
the Chief Financial Officer, Treasurer or any Assistant Treasurer of Grace,
provided that the limitations contained in clause (ii) shall not apply in the
event that a member of the New Grace Group obtains a letter of credit from a
financial institution reasonably acceptable to Grace and for the benefit of
Grace with respect to such obligation of the Packco Group.
SECTION 5.05 Further Assurances. In addition to the actions
specifically provided for elsewhere in this Agreement, 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.
Without limiting the foregoing, each party hereto shall cooperate with the
other party, and execute and deliver, or use reasonable efforts to cause to be
executed and delivered, all instruments, and to make all filings with, and to
obtain all consents, approvals or authorizations of, any governmental or
regulatory authority or any other Person under any permit, license, agreement,
indenture or other instrument, and take all such other actions as such party
may reasonably be requested to take by any other party hereto from time to
time, consistent with the terms of this Agreement, the Merger Agreement and
the Other Agreements, in order to effectuate the provisions and purposes of
this Agreement.
SECTION 5.06 Environmental Claims Cooperation. With respect to
claims relating to Environmental Laws described in clause (a) of the
definition of Packco Liabilities, the New Grace Group and the Packco Group
shall cooperate to minimize the costs incurred in connection with such claims
and shall generally cooperate and provide appropriate information to the other
party with respect to such claims. Notwithstanding any other provision of
this Agreement, including Article IV, Grace shall be entitled to participate
in the defense of any such claims but New Grace shall control the resolution
of any such claims; provided that New Grace shall not consent to entry of any
judgment or enter into any settlement without the approval of Grace, which
approval shall not be unreasonably withheld.
ARTICLE VI
ACCESS TO INFORMATION
SECTION 6.01 Provision of Corporate Records. Prior to or as
promptly as practicable after the Distribution Date, Grace shall retain
complete and accurate copies but shall deliver to New Grace all corporate
books and records of the New Grace Group in its possession and copies of the
relevant portions of all corporate books and records of the Packco Group
relating directly and predominantly to the Grace-Conn. Assets, the New Grace
Business, or the Liabilities of the New Grace Group, including, in each case,
all active agreements, active litigation files and government filings. Grace
shall also retain complete and accurate copies but deliver to New Grace all
corporate board and committee minute books of Grace. From and after the
Distribution Date, all such books, records and copies shall be the property of
New Grace. Prior to or as promptly as practicable after the Distribution
Date, New Grace shall deliver to Grace all corporate books and records of the
Packco Group in its possession and copies of the relevant portions of all
corporate books and records of the New Grace Group relating directly and
predominantly to the Packco Assets, the Packaging Business, or the Liabilities
of the Packco Group, including, in each case, all active agreements, active
litigation files and government filings. From and after the Distribution
Date, all such books, records and copies shall be the property of Grace. The
costs and expenses incurred in the provision of records or other information
to a party shall be paid for (including reimbursement of costs incurred by the
providing party) by the requesting party.
SECTION 6.02 Access to Information. From and after the
Distribution Date, each of Grace and New Grace shall afford to the other and
to the other's Representatives reasonable access and duplicating rights during
normal business hours to all Information within the possession or control of
such party's Group relating to the other party's Group's pre-Distribution
business, Assets or Liabilities or relating to or arising in connection with
the relationship between the Groups on or prior to the Distribution Date,
insofar as such access is reasonably required for a reasonable purpose,
subject to the provisions below regarding Privileged Information. Without
limiting the foregoing, Information may be requested under this Section 6.02
for audit, accounting, claims, litigation and Tax purposes, as well as for
purposes of fulfilling disclosure and reporting obligations.
In furtherance of the foregoing:
(a) Each party hereto acknowledges that: (i) Each of Grace and
New Grace (and the members of the Packco Group and the New Grace Group,
respectively) has or may obtain Privileged Information; (ii) there are a
number of Litigation Matters affecting each or both of Grace and New
Grace; (iii) both Grace and New Grace have a common legal interest in
Litigation Matters, in the Privileged Information and in the
preservation of the confidential status of the Privileged Information,
in each case relating to the pre-Distribution business of the Packco
Group or the New Grace Group or relating to or arising in connection
with the relationship between the Groups on or prior to the Distribution
Date; and (iv) both Grace and New Grace intend that the transactions
contemplated hereby and by the Merger Agreement and the Other Agreements
and any transfer of Privileged Information in connection therewith shall
not operate as a waiver of any potentially applicable privilege.
(b) Each of Grace and New Grace agrees, on behalf of itself and
each member of the Group of which it is a member, not to disclose or
otherwise waive any privilege attaching to any Privileged Information
relating to the pre-Distribution business of the New Grace Group or the
Packco Group, respectively, or relating to or arising in connection with
the relationship between the Groups on or prior to the Distribution
Date, without providing prompt written notice to and obtaining the prior
written consent of the other, which consent shall not be unreasonably
withheld and shall not be withheld if the other party certifies that
such disclosure is to be made in response to a likely threat of
suspension or debarment or similar action; provided, however, that Grace
and New Grace may make such disclosure or waiver with respect to
Privileged Information if such Privileged Information relates solely to
the pre-Distribution business of the Packco Group in the case of Grace
or the New Grace Group in the case of New Grace. In the event of a
disagreement between any member of the Packco Group and any member of
the New Grace Group concerning the reasonableness of withholding such
consent, no disclosure shall be made prior to a resolution of such
disagreement by a court of competent jurisdiction, provided that the
limitations in this sentence shall not apply in the case of disclosure
required by law and so certified as provided in the first sentence of
this paragraph.
(c) Upon any member of the Packco Group or any member of the New
Grace Group receiving any subpoena or other compulsory disclosure notice
from a court, other governmental agency or otherwise which requests
disclosure of Privileged Information, in each case relating to
pre-Distribution business of the New Grace Group or the Packco Group,
respectively, or relating to or arising in connection with the
relationship between the Groups on or prior to the Distribution Date,
the recipient of the notice shall promptly provide to the other Group
(following the notice provisions set forth herein) a copy of such
notice, the intended response, and all materials or information relating
to the other Group that might be disclosed. In the event of a
disagreement as to the intended response or disclosure, unless and until
the disagreement is resolved as provided in paragraph (b) of this
Section, the parties shall cooperate to assert all defenses to
disclosure claimed by either party's Group, and shall not disclose any
disputed documents or information until all legal defenses and claims of
privilege have been finally determined.
SECTION 6.03 Production of Witnesses. Subject to Section 6.02,
after the Distribution Date, each of Grace and New Grace shall, and shall
cause each member of the Packco Group and the New Grace Group, respectively,
to make available to New Grace or Grace or any member of the New Grace Group or
of the Packco Group, as the case may be, upon written request, such Group's
directors, officers, employees and agents as witnesses to the extent that any
such Person may reasonably be required in connection with any Litigation
Matters, administrative or other proceedings in which the requesting party may
from time to time be involved and relating to the pre-Distribution business of
the Packco Group or the New Grace Group or relating to or in connection with
the relationship between the Groups on or prior to the Distribution Date.
SECTION 6.04 Retention of Records. Except as otherwise agreed in
writing, or as otherwise provided in the Other Agreements, each of Grace and
New Grace shall, and shall cause the members of the Group of which it is a
member to, retain all Information in such party's Group's possession or under
its control relating directly and predominantly to the pre-Distribution
business, Assets or Liabilities of the other party's Group until such
Information is at least ten years old or until such later date as may be
required by law, except that if, prior to the expiration of such period, any
member of either party's Group wishes to destroy or dispose of any such
Information that is at least three years old, prior to destroying or disposing
of any of such Information, (a) the party whose Group is proposing to dispose
of or destroy any such Information shall provide no less than 30 days' prior
written notice to the other party, specifying the Information proposed to be
destroyed or disposed of, and (b) if, prior to the scheduled date for such
destruction or disposal, the other party requests in writing that any of the
Information proposed to be destroyed or disposed of be delivered to such other
party, the party whose Group is proposing to dispose of or destroy such
Information promptly shall arrange for the delivery of the requested
Information to a location specified by, and at the expense of, the requesting
party.
SECTION 6.05 Confidentiality. Subject to Section 6.02, which
shall govern Privileged Information, from and after the Distribution Date,
each of Grace and New Grace shall hold, and shall use reasonable efforts to
cause its Affiliates and Representatives to hold, in strict confidence all
Information concerning the other party's Group obtained by it prior to the
Distribution Date or furnished to it by such other party's Group pursuant to
this Agreement or the Other Agreements and shall not release or disclose such
Information to any other Person, except its Affiliates and Representatives,
who shall be bound by the provisions of this Section 6.05, and each party
shall be responsible for a breach by any of its Affiliates or Representatives;
provided, however, that any member of the Packco Group or the New Grace Group
may disclose such Information to the extent that (a) disclosure is compelled
by judicial or administrative process or, in the opinion of such Person's
counsel, by other requirements of law, or (b) such party can show that such
Information was (i) available to such Person on a nonconfidential basis (other
than from a member of the other party's Group) prior to its disclosure by the
other party's Group, (ii) in the public domain through no fault of such Person
or (iii) lawfully acquired by such Person from another source after the time
that it was furnished to such Person by the other party's Group, and not
acquired from such source subject to any confidentiality obligation on the
part of such source known to the acquiror. Notwithstanding the foregoing,
each of Grace and New Grace shall be deemed to have satisfied its obligations
under this Section 6.05 with respect to any Information (other than Privileged
Information) if it exercises the same care with regard to such Information as
it takes to preserve confidentiality for its own similar Information.
SECTION 6.06 Cooperation with Respect to Government Reports and
Filings. Grace, on behalf of itself and each member of the Packco Group,
agrees to provide any member of the New Grace Group, and New Grace, on behalf
of itself and each member of the New Grace Group, agrees to provide any member
of the Packco Group, with such cooperation and Information as may be
reasonably requested by the other in connection with the preparation or filing
of any government report or other government filing contemplated by this
Agreement or in conducting any other government proceeding relating to the
pre-Distribution business of the Packco Group or the New Grace Group, Assets
or Liabilities of either Group or relating to or in connection with the
relationship between the Groups on or prior to the Distribution Date. Such
cooperation and Information shall include, without limitation, promptly
forwarding copies of appropriate notices and forms or other communications
received from or sent to any government authority which relate to the Packco
Group, in the case of the New Grace Group, or the New Grace Group, in the
case of the Packco Group. Each party shall make its employees and facilities
available during normal business hours and on reasonable prior notice to
provide explanation of any documents or Information provided hereunder.
ARTICLE VII
NO REPRESENTATIONS OR WARRANTIES
SECTION 7.01 No Representations or Warranties. Except as
expressly set forth herein or in any other Transaction Agreement (including
Article II and Sections 4.01, 4.02 and 5.05), New Grace and Grace-Conn.
understand and agree that no member of the Packco Group is, in this Agreement
or in any other agreement or document, representing or warranting to New Grace
or any member of the New Grace Group in any way as to the Grace-Conn. Assets,
the New Grace Business or the Grace-Conn. Liabilities, it being agreed and
understood that New Grace and each member of the New Grace Group shall take
all of the Grace-Conn. Assets "as is, where is." Except as expressly set
forth herein or in any other Transaction Agreement and subject to Sections
4.01, 4.02 and 5.05, New Grace and each member of the New Grace Group shall
bear the economic and legal risk that the Grace-Conn. Assets shall prove to be
insufficient or that the title of any member of the New Grace Group to any
Grace-Conn. Assets shall be other than good and marketable and free from
encumbrances. Except as expressly set forth herein or in any other
Transaction Agreement (including Article II and Sections 4.01, 4.02 and 5.05),
Grace understands and agrees that no member of the New Grace Group is, in this
Agreement or in any other agreement or document, representing or warranting to
Grace or any member of the Packco Group in any way as to the Packco Assets,
the Packaging Business or the Packco Liabilities, it being agreed and
understood that Grace, Packco and each other member of the Packco Group shall
take all of the Packco Assets "as is, where is." Except as expressly set
forth herein or in any other Transaction Agreement and subject to Sections
4.01, 4.02 and 5.05, Grace and each member of the Packco Group shall bear the
economic and legal risk that the Packco Assets shall prove to be insufficient
or that the title of any member of the Packco Group to any Packco Assets shall
be other than good and marketable and free from encumbrances. The foregoing
shall be without prejudice to any rights under Article II, Section 4.01,
Section 4.02 or Section 5.05 or to the covenants otherwise contained in this
Agreement or any other Transaction Agreement.
ARTICLE VIII
MISCELLANEOUS
SECTION 8.01 Conditions to Obligations. (a) The obligations of
the parties hereto to consummate the payment of the Distribution are subject
to the satisfaction of each of the following conditions:
(i) the transactions contemplated hereby (including the
Distribution, the Recapitalization, the Merger, the amendment to the
Grace Certificate of Incorporation and otherwise as required by
applicable law and stock exchange regulations) shall have been duly
approved by Grace shareholders;
(ii) all conditions to the Merger set forth in the Merger
Agreement (other than that the Distribution be consummated) shall have
been satisfied or waived;
(iii) all third-party consents and governmental approvals required
in connection with the transactions contemplated hereby shall have been
received, except where the failure to obtain such consents or approvals
would not have a material adverse effect on either (A) the ability of
the parties to consummate the transactions contemplated by this
Agreement, the Other Agreements or the Merger Agreement or (B) the
business, assets, liabilities, financial condition or results of
operations of Grace-Conn. or Packco and their respective subsidiaries,
taken as a whole;
(iv) the transactions contemplated by Article II shall have been
consummated in all material respects, to the extent required to be
consummated prior to the Distribution;
(v) the shares of New Grace Common Stock to be issued in the
Distribution, and the shares of Newco Common Stock and the Newco
Convertible Preferred Stock to be issued in the Recapitalization and the
Merger, as the case may be, shall have been authorized for listing on the
NYSE, in each case subject to official notice of issuance;
(vi) the Board of Directors of New Grace, composed as
contemplated by Section 2.09, shall have been duly elected;
(vii) the Registration Statements shall have been declared
effective under the Exchange Act or the Securities Act, as the case may
be, by the SEC and no stop order suspending the effectiveness of either
of the Registration Statements shall have been issued by the SEC and, to
the knowledge of Grace and New Grace, no proceeding for that purpose
shall have been instituted by the SEC;
(viii) the applicable parties shall have entered into each of the
Other Agreements;
(ix) (A) the Board of Directors of Grace shall have received
customary opinions of a nationally recognized investment banking or
appraisal firm in form and substance reasonably satisfactory to such
Board to the effect that, after giving effect to the transactions set
forth in Article II hereof, neither Grace nor New Grace and Grace-Conn.
will be insolvent (such opinions to be dated as of the date of the
Merger Agreement, the date the Board of Directors of Grace declares the
Distribution and the Distribution Date) and (B) the financial condition
of each of Grace and Grace-Conn. satisfies the requirements of Section
170 of the Delaware General Corporation Law and Section 33-687 of the
Connecticut Business Corporation Act, respectively, such that the
distribution of the common stock of Packco to Grace by Grace-Conn. and
the Distribution may be effected without violating such Sections, and
the Board of Directors of Grace and the Board of Directors of
Grace-Conn. shall in good faith have determined that such requirements
have been satisfied; and
(x) the transactions contemplated hereby shall be in compliance
with all applicable federal and state securities laws.
(b) Any determination made by the Board of Directors of Grace or
Grace-Conn. on behalf of such party hereto prior to the Distribution Date
concerning the satisfaction or waiver of any or all of the conditions set
forth in this Section shall be conclusive.
SECTION 8.02 Use of Grace Name and Xxxx. Xxxxx acknowledges that
Grace-Conn. shall own all rights in the "Grace" name and logo and related
tradenames and marks. Effective at the Distribution Date, Grace shall change
its name to a name that does not use the word "Grace" or any variation thereof
and shall itself, and shall cause each member of the Packco Group to, cease
all use of the "Grace" name as part of any corporate name. As promptly as
practicable after the Distribution Date, Grace shall, and shall cause each
member of the Packco Group to, cease all other use of the "Grace" name and
logo and related tradenames and marks, provided that Grace may use inventory
including any such name, logo, tradenames or marks in existence as of the
Distribution Date. Grace shall cause the Packco Group to use such names,
logos and marks during such transition period only to the extent consistent
with past practice and as Grace reasonably believes is appropriate, and during
the period of such usage Grace shall cause the Packco Group to maintain the
same standards of quality with respect to such names, logos and marks as
previously exercised. No such material shall be used by the Packco Group
after the six-month anniversary of the Distribution Date.
SECTION 8.03 Complete Agreement. This Agreement, the Exhibits and
Schedules hereto and the agreements and other documents referred to herein
shall constitute the entire agreement between the parties hereto with respect
to the subject matter hereof (other than the Merger Agreement and the
schedules and exhibits thereto) and shall supersede all previous negotiations,
commitments and writings with respect to such subject matter.
SECTION 8.04 Expenses. Except as otherwise specifically provided
herein or in any other Transaction Agreement, New Grace shall bear all costs
and expenses (including all Debt Costs, Adjusted Foreign Transfer Taxes,
Severance Costs and losses of benefits) incurred by Grace, New Grace and/or
any members of their respective Groups (collectively, the "Transaction Costs")
in connection with the transactions contemplated by this Agreement and the
Other Agreements (including the Contribution (and the related transfers,
separations and/or allocations of Assets and Liabilities), the Intragroup
Spinoff, the Distribution and the Recapitalization)); provided that Grace (for
the account of Newco after the Merger) agrees to bear: (i) the lesser of $50
million and 37% of the aggregate amount of all Debt Costs, Adjusted Foreign
Transfer Taxes and Severance Costs; (ii) the lesser of $10 million and 37% of
all other Transaction Costs (excluding any Debt Costs, Adjusted Foreign
Transfer Taxes, Severance Costs and costs and expenses payable by New Grace or
Grace pursuant to Section 6.12 of the Merger Agreement) and (iii) the fees and
costs incurred in connection with the Grace Credit Agreement. "Severance
Costs" means the costs associated with the termination in connection with the
transactions contemplated hereby (including the Merger) of employment of
employees of Grace and Grace-Conn. located at the Grace corporate
headquarters. To the extent Transaction Costs are not included in the New
Grace Capital Contribution, Newco or New Grace shall promptly pay its share of
any such costs upon receipt of reasonable documentation relating to such
costs. Appropriate payment shall be made between the parties in respect of
Adjusted Foreign Transfer Taxes on the Distribution Date so that Adjusted
Foreign Transfer Taxes are borne in the proportions described above in this
Section 8.04. Appropriate payment shall be made between the parties in respect
of Adjusted Foreign Transfer Taxes and the amount calculated pursuant to
clause (c) of the definition of "New Grace Capital Contribution" to the extent
that such amounts estimated as of the Distribution Date may be recalculated in
a more accurate manner. New Grace agrees that it shall pay, or cause
Grace-Conn. to pay, all amounts payable by New Grace pursuant to Section
6.12(a) of the Merger Agreement. Any amount paid by one party to the other
under this Agreement in respect of Transaction Costs shall be treated, for tax
purposes, as an adjustment to the portion of the New Grace Capital
Contribution contributed from Grace to New Grace.
SECTION 8.05 Governing Law. This Agreement shall be governed by
and construed in accordance with the laws of the State of Delaware (other than
the laws regarding choice of laws and conflicts of laws that would apply the
substantive laws of any other jurisdiction) as to all matters, including
matters of validity, construction, effect, performance and remedies.
SECTION 8.06 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 standard form of telecommunications, by courier, or by registered or
certified mail, postage prepaid, return receipt requested, addressed as
follows:
If to Grace or any member of the Packco Group:
Sealed Air Corporation
Park 00 Xxxx
Xxxxxx Xxxxx, Xxx Xxxxxx 00000
Attention: President
Fax: (000) 000-0000
and
Xxxxx Xxxx & Xxxxxxxx
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, XX 00000
Attention: Xxxxxxxxxxx Xxxxx, Esq.
Fax: (000) 000-0000
If to New Grace or any member of the New Grace Group:
X. X. Xxxxx & Co.
Xxx Xxxx Xxxxxx Xxxx
Xxxx Xxxxx, Xxxxxxx 00000
Attention: Secretary
Fax: (000) 000-0000
with a copy to:
Wachtell, Lipton, Xxxxx & Xxxx
00 Xxxx 00xx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxx X. Xxxxxxxxxx, Esq.
Fax: (000) 000-0000
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.
SECTION 8.07 Amendment and Modification. This Agreement may be
amended, modified or supplemented only by a written agreement signed by all of
the parties hereto and subject to the reasonable consent of SAC.
SECTION 8.08 Successors and Assigns; No Third-Party Beneficiaries.
This Agreement and all of the provisions hereof shall be binding upon and
inure to the benefit of the parties hereto and their successors and permitted
assigns, but neither this Agreement nor any of the rights, interests and
obligations hereunder shall be assigned by any party hereto without the prior
written consent of the other parties. Except for the provisions of Sections
4.02 and 4.03 relating to indemnities, which are also for the benefit of the
Indemnitees, this Agreement is solely for the benefit of the parties hereto
and their Subsidiaries and Affiliates and is not intended to confer upon any
other Persons any rights or remedies hereunder.
SECTION 8.09 Counterparts. This Agreement may be executed in
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
SECTION 8.10 Interpretation. (a) The Article and Section
headings contained in this Agreement are solely for the purpose of reference,
are not part of the agreement of the parties hereto and shall not in any way
affect the meaning or interpretation of this Agreement.
(b) The parties hereto intend that the Distribution shall be a
distribution pursuant to the provisions of Section 355 of the Code, so that no
gain or loss shall be recognized for federal income tax purposes as a result
of such transaction, and all provisions of this Agreement shall be so
interpreted. The parties hereto do not intend to submit the Distribution to
the Internal Revenue Service for a private letter ruling with respect to such
nonrecognition, and any ultimate ruling or decision that any gain or loss
should be recognized for federal income tax purposes shall not permit a
rescission or reformation of this Agreement or transactions contemplated
hereby.
SECTION 8.11 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.
SECTION 8.12 References; Construction. References to any
"Article," "Exhibit," "Schedule" or "Section," without more, are to Articles,
Exhibits, Schedules and Sections to or of this Agreement. Unless otherwise
expressly stated, clauses beginning with the term "including" set forth
examples only and in no way limit the generality of the matters thus
exemplified.
SECTION 8.13 Termination. Notwithstanding any provision hereof,
following termination of the Merger Agreement, this Agreement may be
terminated and the Distribution abandoned at any time prior to the
Distribution Date by and in the sole discretion of the Board of Directors of
Grace without the approval of any other party hereto or of Grace's
shareholders. In the event of such termination, no party hereto or to any
Other Agreement shall have any Liability to any Person by reason of this
Agreement or any Other Agreement.
SECTION 8.14 SAC Reasonable Consent. The parties hereto agree
that any actions to be taken by Grace or New Grace under this Agreement that
are not specifically required herein and that relate to Packco or the
Packaging Business (including, without limitation, the transactions described
in Article II) must be reasonably satisfactory to SAC.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement
to be duly executed as of the date first above written.
X. X. XXXXX & CO.
By:
------------------------------
Name:
Title:
X. X. XXXXX & CO.-CONN.
By:
------------------------------
Name:
Title:
GRACE SPECIALTY CHEMICALS, INC.
(to be renamed X. X. Xxxxx & Co.)
By:
------------------------------
Name:
Title:
