As filed with the Securities and Exchange Commission on December 22, 2003
Registration No. 333-108544
================================================================================
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
---------------
AMENDMENT NO. 3
TO
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
---------------
SEALED AIR CORPORATION
(Exact Name of Registrant as Specified in Its Charter)
Delaware 65-0654331
(State or other jurisdiction of incorporation or (I.R.S. Employer Identification No.)
organization)
H. Katherine White
Sealed Air Corporation
Park 80 East Park 80 East
Saddle Brook, New Jersey 07663 Saddle Brook, New Jersey 07663
(201) 791-7600 (201) 791-7600
(Address, including zip code, and telephone (Name, address, including zip code, and telephone
number, including area code, of registrant's principal number, including area code, of agent for service)
executive offices)
copy to:
Robert M. Chilstrom, Esq.
Skadden, Arps, Slate, Meagher & Flom LLP
Four Times Square
New York, New York 10036-6522
(212) 735-3000
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: As
soon as practicable after the effective date of this Registration Statement.
If the only securities being registered on this Form are being
offered pursuant to dividend or interest reinvestment plans, please check the
following box. [_]
If any of the securities being registered on this Form are to be
offered on a delayed or continuous basis pursuant to Rule 415 under the
Securities Act of 1933, other than securities offered only in connection with
dividend or interest reinvestment plans, check the following box. [X]
If this Form is filed to register additional securities for an
offering pursuant to Rule 462(b) under the Securities Act, please check the
following box and list the Securities Act registration statement number of the
earlier effective registration statement for the same offering. [_]
If this Form is a post-effective amendment filed pursuant to Rule
462(c) under the Securities Act, check the following box and list the
Securities Act registration statement number of the earlier effective
registration statement for the same offering. [_]
If delivery of the prospectus is expected to be made pursuant to Rule
434, please check the following box. [_]
---------------
CALCULATION OF REGISTRATION FEE
Proposed Maximum Proposed Maximum Amount of
Title of Each Class of Amount to be Offering Price per Aggregate Registration
Securities to be Registered Registered(1) Unit(2) Offering Price Fee(3)
- ---------------------------------------- ----------------------- ------------------- ------------------ ----------------
Common Stock, $0.10 par value per share 6,160,708 $48.40 $298,178,267.20 $24,122.62
(1) Pursuant to Rule 416 under the Securities Act, this registration
statement also covers such additional shares as may hereafter be
offered or issued to prevent dilution resulting from stock splits,
stock dividends, recapitalizations or certain other capital
adjustments.
(2) Estimated solely for the purpose of computing the amount of the
registration fee pursuant to Rule 457(c) under the Securities Act of
1933, as amended, based on the average ($48.40) of the high and low
prices ($48.75 and $48.05, respectively) for a share of common stock as
reported on the New York Stock Exchange on August 28, 2003.
(3) Fee previously paid.
The Registrant hereby amends this Registration Statement on such date or dates
as may be necessary to delay its effective date until the Registrant shall file
a further amendment which specifically states that this Registration Statement
shall thereafter become effective in accordance with Section 8(a) of the
Securities Act of 1933 or until the Registration Statement shall become
effective on such date as the Commission, acting pursuant to said Section 8(a),
may determine.
[flag]
This preliminary prospectus is not complete and may be changed. These shares
may not be sold until the registration statement filed with the U.S.
Securities and Exchange Commission is effective. This preliminary prospectus
is not an offer to sell nor does it seek an offer to buy these shares in any
jurisdiction where the offer or sale is not permitted.
SUBJECT TO COMPLETION, DATED DECEMBER 22, 2003
PRELIMINARY PROSPECTUS
[LOGO]
SEALED AIR CORPORATION
6,160,708 Shares of Common Stock
This prospectus relates to the offer and sale from time to time of up
to 6,160,708 shares of common stock, $0.10 par value per share, of Sealed Air
Corporation, a Delaware corporation, by the selling stockholders named herein,
plus such additional shares of common stock as may be issuable pursuant to
anti-dilution adjustments, in the manner and under the circumstances described
under "Plan of Distribution." Such shares of common stock are issuable upon the
conversion of our 3% Convertible Senior Notes due 2033 (the "Notes"). We have
agreed with the selling stockholders that we will pay all expenses incident to
the registration of such shares of common stock under the Securities Act of
1933, as amended (the "Securities Act").
The selling stockholders may sell the shares of common stock described
in this prospectus in a number of different ways and at varying prices. For
additional information on the methods of sale, you should refer to the section
entitled "Plan of Distribution" beginning on page 14.
Our common stock is listed for trading on the New York Stock Exchange
under the symbol "SEE." On December 19, 2003, the last reported sale price of
the common stock was $52.87 per share.
Our corporate offices are located at Park 80 East, Saddle Brook, New
Jersey 07663. Our telephone number is (201) 791-7600.
---------------
Investing in our common stock involves risks. See the section entitled
"Risk Factors" beginning on page 3.
Neither the Securities and Exchange Commission nor any state securities
commission has approved or disapproved of these securities or passed upon the
adequacy or accuracy of this prospectus. Any representation to the contrary is a
criminal offense.
---------------
The date of this prospectus is , 2003.
TABLE OF CONTENTS
Page
Section Title Number
SUMMARY....................................................................1
RISK FACTORS...............................................................3
CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS..................5
USE OF PROCEEDS............................................................6
SELLING STOCKHOLDERS.......................................................7
PLAN OF DISTRIBUTION......................................................14
LEGAL MATTERS.............................................................15
EXPERTS...................................................................15
INCORPORATION OF DOCUMENTS BY REFERENCE...................................15
WHERE YOU CAN FIND MORE INFORMATION.......................................16
---------------
You should rely only on the information incorporated by reference or
provided in this prospectus and its supplement(s). We have not authorized anyone
to provide you with different information. You should not assume that the
information in this prospectus or any supplement is accurate as of any date
other than the date on the front of those documents. This prospectus does not
constitute an offer to sell or a solicitation of an offer to buy the securities
in any jurisdiction to any person to whom it is unlawful to make such offer or
solicitation in such jurisdiction.
i
SUMMARY
Company Overview
Sealed Air Corporation is a holding company that, operating through its
subsidiaries, is a leading global manufacturer of a wide range of food,
protective and specialty packaging products.
Our principal food packaging products include a wide range of
high-performance materials including shrink film and shrink bag products,
non-shrink laminate products and packaging systems marketed primarily under the
Cryovac(R) trademark for packaging a broad range of perishable foods. These
products also include polystyrene foam and solid plastic trays and containers,
and absorbent pads used for the packaging, protection and display of meat,
poultry, produce and other food products.
Our protective and specialty packaging products include Bubble Wrap(R)
and AirCap(R) air cellular cushioning materials, Instapak(R) polyurethane foam
packaging systems, extruded and laminated plank polyethylene foams sold under
the Stratocell(R) and other trademarks, Cell-Aire(R) polyethylene foam, a wide
range of protective and durable mailers and bags sold under a variety of
tradenames including the widely recognized Jiffy(R) trademark, shrink and
non-shrink films, Korrvu(R) suspension packaging, and certain paper based
protective packaging materials and packaging systems.
The Offering
The purpose of this offering is to enable stockholders who obtain
shares of our common stock issued upon the conversion of the Notes to resell
such shares. Holders of the Notes may, subject to certain conditions, convert
the Notes into 6,160,708 shares of our common stock at a conversion rate of
14.2857 shares per $1,000 principal amount of the Notes, subject to
anti-dilution adjustments in certain circumstances. The shares of common stock
issuable upon the conversion of the Notes may be sold by the selling
stockholders from time to time directly by the selling stockholders or,
alternatively, through underwriters, broker-dealers or agents. See "Plan of
Distribution."
The shares of common stock offered hereby are being registered for
resale by the selling stockholders identified in this prospectus. See "Selling
Stockholders." We will not receive any proceeds from the sale of such shares by
the selling stockholders.
Because the selling stockholders may be deemed to be "underwriters"
within the meaning of Section 2(11) of the Securities Act, the selling
stockholders will be subject to the prospectus delivery requirements of the
Securities Act, which may include delivery through the facilities of the New
York Stock Exchange pursuant to Rule 153 under the Securities Act. Also, the
selling stockholders may resell all or a portion of the shares in open market
transactions in reliance upon and in compliance with Rule 144 under the
Securities Act. In no event will any distribution of the shares of common stock
covered by this prospectus take the form of an underwritten offering without our
prior agreement.
Asbestos Settlement
On November 27, 2002, we reached an agreement in principle with the
appropriate parties to resolve all current and future asbestos-related claims
made against the Company and its affiliates in connection with the Cryovac
Transaction. The settlement will also resolve the fraudulent transfer claims, as
well as indemnification claims by Fresenius that had been made against us in
connection with the Cryovac Transaction. On December 3, 2002, our Board of
Directors approved the agreement in principle. We were advised that both of the
Committees had approved the agreement in principle as of December 5, 2002. As of
1
November 10, 2003, the parties signed a definitive settlement agreement
consistent with the terms of the agreement in principle. On November 26, 2003,
the definitive settlement agreement was presented to the court for approval and
will eventually be incorporated into W. R. Grace & Co.'s ("New Grace") plan of
reorganization and, assuming approval by New Grace's creditors as part of the
approval of the plan of reorganization, will then be implemented. For a
description of the Cryovac Transaction, the asbestos-related and other claims
and the parties involved, as well as the charges recorded by us in connection
with the settlement, see "Asbestos Settlement and Related Costs," "Cryovac
Transaction" and "Contingencies Related to the Cryovac Transaction" contained in
our quarterly report filed on Form 10-Q for the quarterly period ended September
30, 2003, which is incorporated by reference into this prospectus, and the
discussion below under "Risk Factors."
Recapitalization
On July 18, 2003, we completed the redemption of all of our Series A
convertible preferred stock, which was financed by the issuance through private
offerings in July 2003 of $400 million principal amount of 5.625% senior notes
due July 15, 2013, $450 million principal amount of 6.875% senior notes due July
15, 2033, and $431.25 million principal amount of 3% convertible senior notes
due June 30, 2033.
Headquarters
Our principal executive offices are located at Park 80 East, Saddle
Brook, New Jersey 07663, and our telephone number is (201) 791-7600.
2
RISK FACTORS
You should carefully consider the risks described below, in addition to
the other information contained in this prospectus and the documents
incorporated by reference in this prospectus, before making an investment
decision. See also the "Cautionary Statement Regarding Forward-Looking
Statements" below.
Our business, financial condition or results of operations could be
materially adversely affected by any of these risks. The trading price of our
common stock could decline due to any of these risks, and you may lose all or
part of your investment.
This prospectus also contains or incorporates by reference
forward-looking statements that involve risks and uncertainties. Our actual
results could differ materially from those anticipated in these forward-looking
statements as a result of certain factors, including the risks faced by us
described below and elsewhere in this prospectus or in documents incorporated by
reference in this prospectus.
If the settlement of the asbestos litigation that we have agreed to is
not approved and implemented we will not be released from the various
asbestos-related, fraudulent transfer and indemnification claims made against
us. Further, we have been served with a complaint in a lawsuit seeking class
action status against us concerning our public disclosures regarding the
asbestos litigation.
On November 27, 2002, we reached an agreement in principle with the
Official Committee of Asbestos Personal Injury Claimants and the Official
Committee of Asbestos Property Damage Claimants (the "Committees") prosecuting
the claims against us and our wholly owned subsidiary Cryovac, Inc. to resolve
all current and future asbestos related claims arising from the Cryovac
Transaction. The "Cryovac Transaction" was a multi-step transaction, completed
on March 31, 1998, which brought the Cryovac packaging business and the former
Sealed Air Corporation under the common ownership of the Company. The settlement
will also resolve all fraudulent transfer claims, as well as indemnification
claims by Fresenius Medical Care Holdings, Inc. and affiliated companies, that
had been made against us in connection with the Cryovac Transaction. On the same
day, the court entered an order confirming that an amicable resolution of the
disputes among the parties had been reached and that counsel for the Company and
the Committees had agreed and bound the parties to the terms of this agreement
in principle. Our Board of Directors approved this agreement in principle on
December 3, 2002, and we were advised that the Committees approved this
agreement in principle as of December 5, 2002. We recorded a charge of $850.1
million reflecting our liability for this settlement and related expenses in our
consolidated statement of operations for the year ended December 31, 2002. As of
November 10, 2003, the parties signed a definitive settlement agreement
consistent with the terms of the agreement in principle. On November 26, 2003,
the definitive settlement agreement was presented to the court for approval and
will eventually be incorporated into W. R. Grace & Co.'s ("New Grace") plan of
reorganization and, assuming approval by New Grace's creditors as part of the
approval of the plan of reorganization, will then be implemented. We expect the
order approving the settlement agreement will also extend the stay of all
proceedings brought against us outside the bankruptcy court for any asbestos
related claims through the effective date of New Grace's plan of reorganization.
The definitive settlement agreement, upon approval and implementation
in the New Grace bankruptcy, will provide that, upon the effective date of New
Grace's plan of reorganization and our payment of the settlement amount, which
includes nine million shares of our common stock (subject to adjustment) and
$512.5 million in cash plus interest on the cash payment at a 5.5% annual rate
from December 21, 2002 until the date the settlement amount is paid, all present
and future asbestos related claims against us and our affiliates that arise from
3
alleged asbestos liabilities of New Grace and its affiliates (including former
affiliates that became our affiliates through the Cryovac Transaction) will be
channeled to and become the responsibility of one or more trusts to be
established under Section 524(g) of the Bankruptcy Code as part of New Grace's
plan of reorganization. The settlement will provide that we and our affiliates
will receive releases from all asbestos-related claims, including fraudulent
transfer claims, brought against us by the Committees, as well as various
indemnification claims made against us. We will not be obligated to pay the
settlement amount unless, among other things, New Grace's plan of reorganization
is consistent with the terms of the settlement, including provisions for the
trusts and liability releases referred to above, and including an injunction
barring the future prosecution of any asbestos related claims against us and our
affiliates. We do not know when New Grace's plan of reorganization will be
presented to the court for approval, nor do we know at this time whether the
plan of reorganization will be consistent with the terms of the settlement or if
the other conditions on our obligation to pay the settlement amount will be met.
If these conditions are not satisfied or not waived by us, we will not be
obligated to pay the settlement amount. However, if we do not pay the settlement
amount, we will not be released from the various asbestos-related, fraudulent
transfer, and indemnification claims made against us noted above, and all of
these claims would remain pending and would have to be resolved through other
means, such as through agreement on alternative settlement terms or trials.
On September 15, 2003, a plaintiff filed the case of Senn v. Hickey, et
al. (Case No. 03-CV-4372) in the U.S. District Court for the District of New
Jersey (Newark). This lawsuit seeks class action status on behalf of all persons
who purchased or otherwise acquired our securities during the period from March
27, 2000 through July 30, 2002 (the "Class Period"). The lawsuit names us and
certain of our current and former officers and directors as defendants. The
lawsuit makes a number of allegations against the defendants, including
allegations that during the Class Period the defendants materially misled the
investing public, artificially inflated the price of our common stock by
publicly issuing false and misleading statements and violated Generally Accepted
Accounting Principles by failing to accrue for our contingent liability for
asbestos claims arising from past operations of New Grace. The lawsuit seeks
compensatory damages and other relief. We intend to defend the lawsuit
vigorously, since we believe that we properly disclosed our contingent liability
for New Grace's asbestos claims. Although we believe that we should have no
liability in this lawsuit, at this time we cannot estimate the likelihood or
potential costs of an unfavorable outcome.
Our subsidiaries hold substantially all of our assets and liabilities
and conduct substantially all of our operations, which could restrict our
ability to pay dividends.
We conduct substantially all of our business through two direct
wholly-owned subsidiaries, Cryovac, Inc. and Sealed Air Corporation (US). These
two subsidiaries directly and indirectly own substantially all of the assets of
our business and conduct operations themselves and through other subsidiaries
around the globe. Therefore, we depend on distributions or advances from our
subsidiaries to meet our debt service and other obligations and to pay
dividends, if any, with respect to shares of our common stock. Contractual
provisions, laws or regulations to which we or any of our subsidiaries may
become subject, as well as any subsidiary's financial condition and operating
requirements, may reduce funds available for dividends, service of our
indebtedness and general corporate purposes.
4
The price of our common stock historically has experienced significant
price and volume fluctuations, which may make it difficult for you to resell the
common stock, and the sale of substantial amounts of our common stock could
adversely affect the price of our common stock.
The market price of our common stock historically has experienced and
may continue to experience significant price and volume fluctuations similar to
those experienced by the broader stock market in recent years. In addition, our
announcements of our quarterly operating results, future developments in the
settlement of the asbestos litigation against us, the effects of animal and
food-related health issues, spikes in raw material and energy-related costs,
changes in general conditions in the economy or the financial markets and other
developments affecting us, our affiliates or our competitors could cause the
market price of our common stock to fluctuate substantially.
In addition, the sale of substantial amounts of our common stock could
adversely affect its price. As of September 30, 2003, 1,061,956 shares of common
stock were reserved for issuance under our contingent stock plan and directors'
stock plan and options to purchase 278,572 shares of our common stock were
outstanding (all of which were exercisable). In addition, as of September 30,
2003, 9 million shares of our common stock were reserved for issuance pursuant
to the settlement of the asbestos litigation upon the effectiveness of a plan of
reorganization in the bankruptcy of New Grace. The sale or the availability for
sale of a large number of shares of our common stock in the public market could
adversely affect the price of our common stock.
CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS
Certain statements that we have made in this prospectus and in the
documents incorporated by reference herein, and in future oral and written
statements that we make may be forward-looking. These statements include
comments as to our beliefs and expectations as to future events and trends
affecting our business, our results of operations and our financial condition.
These forward-looking statements are based upon our management's current
expectations concerning future events and discuss, among other things,
anticipated future performance and future business plans. Forward-looking
statements are identified by such words and phrases as "expects," "intends,"
"believes," "will continue," "plans to," "could be," "estimates" and similar
expressions. Forward-looking statements are necessarily subject to risks and
uncertainties, many of which are outside our control, which could cause actual
results to differ materially from such statements.
Except as required by the federal securities laws, we do not undertake
any obligation to update publicly or revise any forward-looking statement,
whether as a result of new information, future events or otherwise.
5
USE OF PROCEEDS
The shares of common stock offered hereby are being registered for
resale by the selling stockholders identified in this prospectus. See "Selling
Stockholders." We will not receive any proceeds from the sale of such shares by
the selling stockholders. All net proceeds from the sale of such shares will go
to the stockholders that offer and sell their shares.
The shares of common stock offered hereby are issuable upon the
conversion of the Notes. The Notes were issued in July 2003, at which time we
issued a total of $1,281.25 million of senior notes, including $431.25 million
of the Notes, in transactions that were exempt from registration under Rule 144A
and other available exemptions under the Securities Act. On July 18, 2003, the
net proceeds from these offerings and additional cash on hand were used to
redeem our Series A convertible preferred stock at the redemption price of
$51.00 per share for which we used $1,298.1 million of cash plus an amount equal
to dividends accrued from July 1, 2003 through July 17, 2003 for which we used
$2.4 million of cash.
6
SELLING STOCKHOLDERS
We issued the Notes in the aggregate principal amount of $431.25
million in July 2003 in transactions carried out pursuant to Rule 144A under the
Securities Act. The Notes are restricted securities that are not covered by this
prospectus and are not otherwise registered under the Securities Act.
Accordingly, the Notes may not be offered or sold except in compliance with the
registration requirements of the Securities Act and all other applicable
securities laws, or pursuant to an exemption from, or in a transaction not
subject to, the registration requirements of the Securities Act and any other
applicable securities laws.
Holders of the Notes may convert the Notes into 6,160,708 shares of our
common stock at a conversion rate of 14.2857 shares per $1,000 principal amount
of the Notes (which is equal to a conversion price of $70.00 per share), subject
to anti-dilution adjustments in certain circumstances (the "Conversion Rate").
The 6,160,708 shares of common stock covered by this Prospectus, plus such
additional shares of common stock as may be issuable pursuant to anti-dilution
adjustments, are issuable upon the conversion of the Notes by the selling
stockholders and, following their issuance, may be sold by the selling
stockholders in the manner and under the circumstances described under "Plan of
Distribution."
At the time the Notes were issued, we entered into a registration
rights agreement with the initial purchasers of the Notes that provided that we
would file the registration statement, of which this prospectus forms a part, to
register for resale by holders of the Notes all the underlying shares of our
common stock that they would acquire upon conversion of the Notes if they have
requested to be shown as selling stockholders covered by the registration
statement. To the extent that holders of Notes have not requested us to include
in such registration statement shares of common stock issuable upon conversion
of Notes that they hold, we are obligated to do so promptly following their
request to do so. Under the registration rights agreement, we agreed to
indemnify the selling stockholders and each person, if any, who controls the
selling stockholders against certain liabilities, including liabilities under
the Securities Act, and the selling stockholders have agreed to indemnify us,
our directors, our officers and each person, if any, who controls us against
certain liabilities, including liabilities under the Securities Act.
The Notes are convertible before the close of business on June 30, 2033
only under the following circumstances:
o during any calendar quarter commencing after September 30, 2003,
if the closing sale price of our common stock exceeds 120% of the
conversion price for at least 20 trading days in the 30
consecutive trading days ending on the last trading day of the
preceding calendar quarter;
o during any period in which (i) the long-term credit rating
assigned to the Notes by Standard & Poor's Rating Services, a
division of the McGraw-Hill Companies ("Standard and Poor's") or
Moody's Investors Services, Inc. ("Moody's") is lower than BB+ or
Ba2, respectively, (ii) either Standard & Poor's or Moody's no
longer rates the Notes or has withdrawn or suspended such rating,
or (iii) the Notes are not assigned a rating by both Standard &
Poor's and Moody's;
o during the five business day period immediately after any five
consecutive trading day period in which the trading price per
$1,000 principal amount of Notes for each day of that period was
less than 98% of the product of the closing sale price of our
common stock and the Conversion Rate;
7
o if the Notes have been called for redemption; or
o upon the occurrence of certain corporate events.
We have the option to redeem the Notes beginning July 2, 2007 at a
price equal to 101.286% of their aggregate principal amount declining ratably to
100% of their aggregate principal amount on June 30, 2010.
The holders of the Notes have the option to require us to repurchase
the Notes on June 30 of 2010, 2013, 2018, 2023 and 2028 or upon the occurrence
of a fundamental change in or a termination of trading of our common stock at a
price equal to 100% of their principal amount, plus accrued and unpaid interest.
This prospectus also covers any additional shares of common stock that
become issuable in connection with any of the foregoing events.
The following table is based on information furnished to us by or on
behalf of the selling stockholders as of December 19, 2003. For purposes of
presenting beneficial ownership data in the table, we have assumed that the
selling stockholders will convert all of the Notes that they beneficially own
and sell all of the shares of common stock issued upon conversion of such Notes
and that no selling stockholder will acquire additional Notes or shares of
common stock issuable upon the conversion thereof after the date on the cover
page of this prospectus.
As of the date set forth on the cover of this prospectus, none of the
Notes has been converted into our common stock. We do not know if, when, or in
what amount the selling stockholders may convert any Note into common stock or
offer such common stock for resale. There can be no assurance that any of the
conditions that would permit conversion of the Notes will be satisfied or that,
if such conditions are satisfied, the selling stockholders will convert any of
the Notes that they beneficially own or sell any or all of the shares of common
stock acquired upon conversion of such Notes that are covered by this
prospectus.
Since December 19, 2003, each selling stockholder identified below may
have sold, transferred or otherwise disposed of all or a portion of the Notes
that such selling stockholder beneficially owns in a transaction exempt from the
registration requirements of the Securities Act. Information concerning the
selling stockholders may change from time to time, and any changed information
will be set forth in supplements to this prospectus to the extent required by
the rules and regulations under the Securities Act. In addition, as discussed
above, the Conversion Rate, and therefore the number of shares of our common
stock issuable upon conversion of the Notes, is subject to adjustment.
Accordingly, the number of shares of common stock issuable upon such conversion
may increase or decrease.
The following table sets forth as of December 19, 2003:
o the names of the selling stockholders who have requested that
their shares be included in this registration statement by
completing the questionnaire required under the registration
rights agreement (we will update this table following receipt of
further notification by the selling stockholders);
o the number of shares of common stock issuable upon the
conversion of the Notes that are beneficially owned by each of
the selling stockholders;
8
o the number of shares of common stock issuable upon the
conversion of the Notes that are being offered by the selling
stockholders in this prospectus; and
o the number of shares of common stock held by the selling
stockholders as a group.
Unless set forth in the following table or the footnotes thereto, to
our knowledge, none of the selling stockholders has or since December 19, 2000
has had, any material relationship with us or any of our predecessors or
affiliates, and none of the selling stockholders beneficially owns, as of
December 19, 2003, in excess of 1% of our outstanding common stock.
As of November 30, 2003 there were 85,079,384 shares of our common
stock issued and outstanding.
COMMON STOCK COMMON STOCK TO
BENEFICIALLY BE BENEFICIALLY
OWNED AS OF COMMON STOCK OWNED AFTER PERCENTAGE OF
December 19, OFFERED IN THIS THIS ALL COMMON
NAME 2003 (1) PROSPECTUS (1) OFFERING (1) STOCK (2)
---- -------- -------------- ------------ ---------
Advisory Convertible Arbitrage Fund (I) L.P.
(3) 14,285 14,285 -- --
Allstate Insurance Company (4) 14,285 14,285 -- --
Allstate Life Insurance Company (4) 14,285 14,285 -- --
American Investors Life Insurance Co. (5) 8,571 8,571 -- --
AmerUs Life Insurance Co. (5) 78,571 78,571 -- --
Arbitex Master Fund, L.P. (6) 399,999 399,999 -- --
Aviva Life Insurance Co. (7) 31,428 31,428 -- --
Banc of America Securities LLC (8) 185,714 185,714 -- --
Bank of America Pension Plan (9) 42,857 42,857 -- --
Bankers Life Insurance Company of New York (5) 1,428 1,428 -- --
Barclays Global Investors Limited (9) 3,571 3,571 -- --
Bear, Stearns & Co. Inc. (10) 166,071 166,071 -- --
Black Diamond Convertible Offshore
LDC (11) 31,114 31,114 -- --
Black Diamond Offshore Ltd. (11) 17,357 17,357 -- --
BP Amoco PLC Master Trust (12) 5,871 5,871 -- --
CGNU Life Fund (7) 11,428 11,428 -- --
Chrysler Corporation Master Retirement Trust
(13) 50,142 50,142 -- --
Citigroup Global Markets Inc. 18,642 18,642 -- --
Commercial Union Life Fund (7) 14,285 14,285 -- --
Consulting Group Capital Markets Fund (9) 14,285 14,285 -- --
Convertible Securities Fund (14) 857 857 -- --
Credit Suisse First Boston Europe Limited 996 996 -- --
D.E. Shaw Investment Group, L.P. (15) 42,857 42,857 -- --
D.E. Shaw Valence Portfolios, L.P. (15) 171,428 171,428 -- --
Daimler Chrysler Corp Emp. #1 Pension Trust
dtd 4/1/89 (16) 41,428 41,428 -- --
Davidson Kempner Institutional
Partners (17) 78,142 78,142 -- --
Davidson Kempner International
Limited (17) 89,428 89,428 -- --
Davidson Kempner Partners (17) 43,285 43,285 -- --
9
DB Equity Opportunities Master Portfolio 71,428 71,428 -- --
Deam Convertible Arbitrage 35,714 35,714 -- --
Deephaven Domestic Convertible
Trading Ltd. 105,642 105,642 -- --
Deep Rock & Co. (9) 52,857 52,857 -- --
Delta Air Lines Master Trust - CV (13) 20,642 20,642 -- --
Delta Pilots Disability and Survivorship Trust
- CV (13) 9,999 9,999 -- --
Dodeca Fund, L.P. (5) 25,142 25,142 -- --
Double Black Diamond Offshore LDC (11) 91,071 91,071 -- --
Family Service Life Insurance Co. (18) 4,285 4,285 -- --
Franklin and Marshall College (16) 3,114 3,114 -- --
FrontPoint Convertible Arbitrage Fund L.P. (19) 28,571 28,571 -- --
Gaia Offshore Master Fund Ltd. 17,142 17,142 -- --
General Motors Welfare Benefit Trust (9) 17,142 17,142 -- --
GLG Market Neutral Fund 107,142 107,142 -- --
GMAM Group Pension Trust (9) 61,428 61,428 -- --
Guardian Life Insurance Co. (18) 122,857 122,857 -- --
Guardian Pension Trust (18) 14,285 14,285 -- --
Guggenheim Portfolio Co. XV, LLC (20) 7,142 7,142 -- --
Hotel Union and Hotel Industry of Hawaii
Pension Plan (12) 2,285 2,285 -- --
IL Annuity and Insurance Co. (5) 382,928 382,928 -- --
Inflective Convertible Opportunity Fund I,
L.P. (13) 571 571 -- --
JMG Capital Partners LP (21) 139,285 139,285 -- --
JMG Triton Offshore Fund LTD (22) 139,285 139,285 -- --
John Deere Pension Trust (9) 33,571 33,571 -- --
Lyxor Master Fund 28,571 28,571 -- --
Lyxor/Gaia II Fund Ltd 5,714 5,714 -- --
M.H. Davidson & Co. (17) 3,428 3,428 -- --
Microsoft Corporation (13) 32,785 32,785 -- --
MLQA Convertible Securities Arbitrage (23) 107,142 107,142 -- --
Morgan Stanley Convertible Securities Trust 28,571 28,571 -- --
Motion Picture Industry Health Plan - Active
Member Fund (13) 5,142 5,142 -- --
Motion Picture Industry Health Plan - Retiree
Member Fund (13) 3,428 3,428 -- --
Nations Convertible Securities Fund (14) 141,999 141,999 -- --
NMS Services (Cayman), Inc. (24) 142,857 142,857 -- --
Nomura Securities Intl Inc. 28,571 28,571 -- --
Norwich Union Life and Pensions (7) 21,428 21,428 -- --
OCM Convertible Trust (13) 40,357 40,357 -- --
OCM Global Convertible Securities Fund - DC
(13) 2,571 2,571 -- --
Oppenheimer Convertible Securities Fund 42,857 42,857 -- --
Park Avenue Life Insurance Co. (18) 1,428 1,428 -- --
Partner Reinsurance Company Ltd. (13) 17,499 17,499 -- --
People Benefit Life Insurance Company
Teamsters (9) 77,142 77,142 -- --
Privilege Portfolio SICAV (7) 42,857 42,857 -- --
Pyramid Equity Strategies Fund 17,857 17,857 -- --
10
Quattro Fund Limited 31,999 31,999 -- --
Qwest Occupational Health Trust (13) 5,714 5,714 -- --
Ramius Capital Group (20) 7,142 7,142 -- --
Ramius Master Fund, LTD (20) 46,428 46,428 -- --
Ramius Partners II, LP (20) 3,571 3,571 -- --
Ramius, LP (20) 1,428 1,428 -- --
RBC Alternative Assets LP (25) 2,857 2,857 -- --
RCG Baldwing, LP (20) 5,714 5,714 -- --
RCG Latitude Master Fund, LTD (20) 46,428 46,428 -- --
RCG Multi Strategy Master Fund, LTD (20) 14,285 14,285 -- --
Retail Clerics Pension Trust (9) 58,571 58,571 -- --
Retail Clerics Pension Trust #2 (9) 50,714 50,714 -- --
Sage Capital 55,714 55,714 -- --
Sphinx Convertible Arb Fund SPC (12) 3,613 3,613 -- --
SSI Blended Market Neutral L.P. (12) 3,671 3,671 -- --
St. Albans Partners LTD. (9) 93,571 93,571 -- --
State Employees' Retirement Fund of the State
of Delaware (13) 23,285 23,285 -- --
State Street Bank Custodian For GE Pension
Trust (16) 26,885 26,885 -- --
The Coast Fund, L.P. (26) 107,142 107,142 -- --
Thrivent Financial for Lutherans 35,714 35,714 -- --
Topanga XI (24) 5,714 5,714 -- --
Travelers Indemnity Company - Commercial Lines
(13) 4,428 4,428 -- --
Travelers Indemnity Company - Personal Lines
(13) 2,928 2,928 -- --
UBS O'Connor LLC F/B/O O'Connor Global
Convertible Arbitrage Master Limited 307,142 307,142 -- --
UBS O'Connor LLC F/B/O O'Connor Global
Convertible Portfolio 7,142 7,142 -- --
Van Kampen Harbor Fund (27) 28,571 28,571 -- --
Vanguard Convertible Securities Fund, Inc. (13) 134,499 134,499 -- --
Viacom Inc. Pension Plan Master Trust (12) 199 199 -- --
White River Securities L.L.C. (28) 166,071 166,071 -- --
Worldwide Transactions Ltd (11) 3,314 3,314 -- --
WPG Convertible Arbitrage Overseas Master Fund
(29) 11,428 11,428 -- --
WPG MSA Convertible Arbitrage
Fund (29) 2,857 2,857 -- --
Xavex Convertible Arbitrage 5 Fund (20) 10,714 10,714 -- --
Yield Strategies Fund I, L.P. (9) 24,285 24,285 -- --
Zurich Institutional Benchmark Management 7,999 7,999 -- --
Zurich Institutional Benchmarks Master Fund
Ltd. (12) 14,428 14,428 -- --
TOTAL 5,341,793 5,341,793 -- --
- ----------------
1. For each selling stockholder, this number represents the number of
shares of common stock that would be beneficially owned by such selling
stockholder after the conversion of the Notes beneficially owned by
such selling stockholder as of December 19, 2003, assumes that the
selling stockholders will sell all shares of common stock offered by
11
them under this prospectus, and further assumes that all of the Notes
have been converted.
2. For each selling stockholder, this number represents the percentage of
common stock that would be owned by such selling stockholder after
completion of the offering, based on the number of shares of common
stock outstanding as of December 19, 2003 and assuming all the Notes
beneficially owned by such selling stockholder as of December 19, 2003,
have been converted.
3. We have been advised that Advisory Convertible Arbitrage L.L.C. general
partner of Advisory Convertible Arbitrage Fund (I) L.P. is an indirect
subsidiary of American Express Company.
4. We have been advised that these companies are subsidiaries of The
Allstate Corporation.
5. We have been advised that Mr. Thomas J. Ray may be deemed the
beneficial owner of these shares by virtue of his voting control and
investment discretion with respect to these shares.
6. We have been advised that Mr. Clark Hunt and Mr. Jonathan Bren may be
deemed the beneficial owners of these shares by virtue of their voting
control and investment discretion with respect to these shares.
7. We have been advised that Mr. David Clott may be deemed the beneficial
owner of these shares by virtue of his voting control and investment
discretion with respect to these shares.
8. We have been advised that Banc of America Securities LLC is a
subsidiary of Banc of America Corporation.
9. We have been advised that Camden Asset Management may be deemed the
beneficial owner of these shares by virtue of its voting control and
investment discretion with respect to these shares.
10. We have been advised that Bear, Stearns & Co. Inc. is a subsidiary of
The Bear Stearns Companies Inc.
11. We have been advised that Mr. Clint D. Carlson may be deemed the
beneficial owner of these shares by virtue of his control of Carlson
Capital, L.P., which has voting control and investment discretion with
respect to these shares.
12. We have been advised that Mr. John Gottfurcht, Mr. George Douglas and
Ms. Amy Jo Gottfurcht may be deemed the beneficial owners of these
shares by virtue of their control of SSI Investment Management, which
has voting control and investment discretion with respect to these
shares.
13. We have been advised that Mr. Lawrence Keele may be deemed the
beneficial owner of these shares by virtue of his voting control and
investment discretion.
14. We have been advised that Mr. Ed Cassens and Mr. Yanfang C. Yan may be
deemed the beneficial owner of these shares by virtue of its voting
control and investment discretion.
15. We have been advised that Mr. Julius Gaudio, Mr. Eric Wepsic and Ms.
Anne Dinning may be deemed the beneficial owner of these shares by
virtue of their voting control and investment discretion.
16. We have been advised that Palisade Capital Management, L.L.C. may be
deemed the beneficial owner of these shares by virtue of its voting
control and investment discretion.
17. We have been advised that Messrs. Marvin H. Davidson, Scott E.
Davidson, Robert J. Brivio, Thomas L. Kempner, Michael J. Leffel,
Stephen M. Dowicz, and Timothy I. Levart may be deemed the beneficial
owner of these shares by virtue of their voting control and investment
discretion.
12
18. We have been advised that Mr. John Murphy may be deemed the beneficial
owner of these shares by virtue of his voting control and investment
discretion.
19. We have been advised that FrontPoint Partners LLC may be deemed the
beneficial owner of these shares by virtue of its voting control and
investment discretion with respect to these shares. FrontPoint Partners
LLC is the managing member of FrontPoint Convertible Arbitrage Fund GP,
LLC, which is the general partner of FrontPoint Convertible Arbitrage
Fund, L.P.
20. We have been advised that Mr. Alex Adair may be deemed the beneficial
owner of these shares by virtue of his voting control and investment
discretion with respect to these shares.
21. We have been advised that JMG Capital Partners, L.P. is a California
limited partnership and of the following additional information: Its
general partner is JMG Capital Management, LLC, a Delaware limited
liability company and an investment adviser registered with the
Securities and Exchange Commission. JMG Capital Partners, L.P. has
voting and dispositive power over JMG Capital Partners, L.P.'s
investments, including the registrable securities. The equity interests
of JMG Capital Management, LLC are owned by JMG Capital Management,
Inc., a Delaware corporation, and Asset Alliance Holding Corp., a
Delaware corporation. Jonathan M. Glaser is the executive officer and
director of JMG Capital Management Inc. and has sole investment
discretion over JMG Capital Partners, L.P.'s portfolio holdings.
22. We have been advised that JMG Triton Offshore Fund, LTD is an
international business company under the laws of the British Virgin
Islands and of the following additional information: The fund's
investment manager is Pacific Assets Management LLC, a Delaware
limited liability company. Pacific Assets Management LLC is an
investment adviser registered with the Securities and Exchange
Commission and has voting and dispositive power over the fund's
investments, including the registrable securities. The equity
interest of the Pacific Assets Management LLC are owned by Pacific
Capital Management, Inc., a Delaware corporation, and Asset Alliance
Holding Corp., a Delaware corporation. The equity interests of
Pacific Capital Management, Inc. are owned by Messrs. Roger Richter,
Jonathan M. Glaser and Daniel A. David and Messrs. Glaser and Richter
have sole investment discretion over the fund's portfolio holdings.
23. We have been advised that Merrill Lynch & Co. Inc. may be deemed the
beneficial owner of these shares by virtue of its voting control and
investment discretion.
24. We have been advised that NMS Services (Cayman) Inc. is an indirect
wholly owned subsidiary of Bank of America Corporation. Topanga XI is a
wholly-owned subsidiary of NMS Services (Cayman) Inc.
25. We have been advised that RBC Alternative Assets LP is a wholly owned
subsidiary of RBC Alternative Assets Inc., which is an indirect wholly
owned subsidiary of the Royal Bank of Canada.
26. We have been advised that David E. Smith and Christopher D. Petitt may
be deemed the beneficial owners of these shares by virtue of their
control of Coast Offshore (Cayman) Management LTD, which has voting
control and investing discretion with respect to these shares.
27. We have been advised that Van Kampen Asset Management Inc. is Van
Kampen Harbor Fund's investment advisor and it has discretionary
authority over the fund's portfolio and that Van Kampen Asset
Management is affiliated with Morgan Stanley & Co.
28. We have been advised that Messrs. Yan Erlikh and David Liebowitz may be
deemed the beneficial owners of these shares by virtue of their voting
control and investment discretion with respect to these shares.
29. We have been advised that Ms. Sheri Kaplan may be deemed the beneficial
owner of these shares by virtue of her voting control and investment
discretion with respect to these shares.
13
PLAN OF DISTRIBUTION
We are registering the shares of common stock covered by this
prospectus for resale by the selling stockholders. The term "selling
stockholders" as used in this section of the prospectus refers to the selling
stockholders listed above, or their pledgees, donees, transferees, or any of
their successors in interest.
Following conversion of the Notes, such shares of common stock may be
sold from time to time directly by the selling stockholders or, alternatively,
through underwriters, broker-dealers or agents. If shares of the common stock
obtained upon conversion are sold through underwriters, broker-dealers or
agents, the selling stockholders will be responsible for underwriting discounts
or commissions or agent's commissions. Such common stock may be sold in one or
more transactions at fixed prices, at prevailing market prices at the time of
sale, at varying prices determined at the time of sale or at negotiated prices.
Such sales may be effected in transactions (which may involve block
transactions) (i) on any national securities exchange or quotation service on
which the common stock may be listed or quoted at the time of sale, (ii) in the
over-the-counter market, (iii) in transactions otherwise than on such exchanges
or services or in the over-the-counter market, or (iv) through the writing of
options. In connection with sales of the common stock or otherwise, the selling
stockholders may enter into hedging transactions with broker-dealers, which may
in turn engage in short sales of the common stock in the course of hedging
positions they assume. The selling stockholders may also sell common stock short
and deliver common stock to close out short positions, or loan or pledge common
stock to broker-dealers that in turn may sell such securities.
In no event will any distribution of the shares of common stock covered
by this prospectus take the form of an underwritten offering without the prior
agreement of the Company.
Because the selling stockholders may be deemed to be "underwriters"
within the meaning of Section 2(11) of the Securities Act, the selling
stockholders will be subject to the prospectus delivery requirements of the
Securities Act, which may include delivery through the facilities of the New
York Stock Exchange pursuant to Rule 153 under the Securities Act. We have
informed the selling stockholders that the anti-manipulative provisions of
Regulation M promulgated under the Exchange Act may apply to their sales in the
market.
The selling stockholders also may resell all or a portion of the shares
in open market transactions in reliance upon and in compliance with Rule 144
under the Securities Act.
Upon being notified by a selling stockholder that any material
arrangement has been entered into with a broker-dealer for the sale of shares
through a block trade, special offering, exchange distribution or secondary
distribution or a purchase by a broker or dealer, we will file a supplement to
this prospectus, if required, pursuant to Rule 424(b) under the Securities Act,
disclosing:
o the name of such selling stockholder and of the participating broker-
dealer(s);
o the number of shares involved;
o the price at which such shares were sold;
o the commissions paid or discounts or concessions allowed to such
broker-dealer(s), where applicable;
14
o that such broker-dealer(s) did not conduct any investigation to verify
the information set out or incorporated by reference in this
prospectus; and
o any other facts material to the transaction.
LEGAL MATTERS
The validity of the common stock to be offered by this prospectus is
being passed on for us by Skadden, Arps, Slate, Meagher & Flom LLP.
EXPERTS
The consolidated financial statements and the related financial
statement schedule of Sealed Air Corporation as of December 31, 2002 and 2001,
and for each of the years in the three-year period ended December 31, 2002, have
been incorporated by reference herein in reliance upon the report of KPMG LLP,
independent accountants, incorporated by reference herein, and upon the
authority of said firm as experts in accounting and auditing. The audit report
covering the December 31, 2002, consolidated financial statements refers to the
Company's adoption of Statement of Financial Accounting Standards No. 142,
"Goodwill and Other Intangible Assets," as of January 1, 2002.
INCORPORATION OF DOCUMENTS BY REFERENCE
The Securities and Exchange Commission (the "SEC") allows us to
"incorporate by reference" certain of our publicly filed documents into this
prospectus, which means that information included in these documents is
considered part of this prospectus. The following documents filed by us with the
SEC are incorporated by reference into this prospectus:
o our annual report on Form 10-K for the year ended December 31, 2002;
o our quarterly reports on Form 10-Q for the quarters ended March 31,
2003, June 30, 2003 and September 30, 2003;
o our Proxy Statement on Schedule 14A for our 2003 annual meeting of
stockholders;
o our current reports on Form 8-K filed on April 9, 2003, April 14,
2003, April 23, 2003, June 27, 2003, July 3, 2003, July 23, 2003
and November 4, 2003; and
o the description of our common stock contained in our Joint Proxy
Statement/Prospectus filed as part of our Registration Statement
on Form S-4, declared effective on February 13, 1998.
All documents filed by us with the SEC pursuant to Section 13(a),
13(c), 14 or 15(d) of the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), after the date of this prospectus and prior to the termination
of the offering covered by this prospectus will be deemed to be incorporated by
reference into this prospectus and to be a part of the prospectus from the date
of filing of such documents. Any statement contained in this prospectus or in
any document incorporated or deemed to be incorporated by reference into this
prospectus shall be deemed to be modified or superseded for purposes of this
prospectus to the extent that a statement contained herein or in any other
subsequently filed document which also is or is deemed to be incorporated by
reference herein modifies or supersedes such statement. Any statement so
modified or superseded shall not be deemed, except as so modified or superseded,
to constitute a part of this prospectus.
15
WHERE YOU CAN FIND MORE INFORMATION
We file annual, quarterly and special reports, proxy statements and
other information with the SEC under the Exchange Act. The registration
statement of which this prospectus forms a part and these reports, proxy
statements and other information can be inspected and copied at the Public
Reference Room maintained by the SEC at Room 1024, Judiciary Plaza, 450 Fifth
Street, N.W., Washington, D.C. 20549. Copies of these materials may also be
obtained from the SEC at prescribed rates by writing to the Public Reference
Room maintained by the SEC at Room 1024, Judiciary Plaza, 450 Fifth Street,
N.W., Washington, D.C. 20549. You may obtain information on the operation of the
Public Reference Room by calling the SEC at 1-800-SEC-0330.
We have filed with the SEC a registration statement on Form S-3 under
the Securities Act with respect to this offering. This prospectus, which forms a
part of the registration statement, does not contain all the information
included in the registration statement and the attached exhibits.
The SEC maintains an Internet site at http://www.sec.gov that contains
reports, proxy and information statements, and other information regarding us.
The reports, proxy and information statements, and other information about us
can be downloaded from the SEC's website and can also be inspected and copied at
the offices of the New York Stock Exchange, Inc., 11 Wall Street, New York, New
York 10005.
We will provide, without charge to each person, including any
beneficial owner, to whom this prospectus is delivered, upon written or oral
request of such person, a copy of any and all of the information that has been
or may be incorporated by reference in this prospectus, other than exhibits to
such documents (unless such exhibits are specifically incorporated by reference
into such documents). Such requests should be directed to Director of Corporate
Communications, Sealed Air Corporation, Park 80 East, Saddle Brook, New Jersey
07663, telephone number (201) 791-7600.
16
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
The following table sets forth the costs and expenses payable by the
registrant in connection with the sale of the shares of common stock being
registered. All amounts are estimates except the Securities and Exchange
Commission registration fee.
Legal fees and expenses $ 50,000.00
Accounting fees and expenses $ 25,000.00
SEC registration fee $ 24,122.62
Miscellaneous expenses $ 5,000.00
------------
Total $104,122.62
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS
Section 145 of the General Corporation Law of the State of Delaware
(the "General Corporation Law") provides that: (1) under certain circumstances a
corporation may indemnify a director or officer made party to, or threatened to
be made party to, any civil, criminal, administrative or investigative action,
suit or proceeding (other than an action by or in the right of the corporation)
because such person is or was a director, officer, employee or agent of the
corporation, or because such person is or was so serving another enterprise at
the request of the corporation, against expenses, judgments, fines and amounts
paid in settlement reasonably incurred by such person in connection with such
action, suit or proceeding, if such person acted in good faith and in a manner
such person reasonably believed to be in or not opposed to the best interests of
the corporation, and, with respect to criminal cases, had no reasonable cause to
believe such person's conduct was unlawful; (2) under certain circumstances a
corporation may indemnify a director or officer made party to, or threatened to
be made party to, any action or suit by or in the right of the corporation for
judgment in favor of the corporation because such person is or was a director,
officer, employee or agent of the corporation, or because such person is or was
so serving another enterprise at the request of the corporation, against
expenses reasonably incurred by such person in connection with the defense or
settlement of such action or suit if such person acted in good faith and in a
manner such person reasonably believed to be in or not opposed to the best
interests of the corporation; and (3) a director or officer shall be indemnified
by the corporation against expenses reasonably incurred by such person in
connection with and to the extent that such person has been successful on the
merits or otherwise in defense of any action, suit or proceeding referred to in
the preceding clauses, or in defense of any claim, issue or matter therein.
Under Article ELEVENTH of the Company's Amended and Restated
Certificate of Incorporation and Article 8 of the Company's By-Laws,
indemnification of directors and officers is provided for to the fullest extent
permitted under the General Corporation Law. Article TWELFTH of the Company's
Amended and Restated Certificate of Incorporation eliminates the liability of
directors for monetary damages for breach of fiduciary duty as directors, except
for liability (1) for any breach of the director's duty of loyalty to the
Corporation or its stockholders, (2) for acts or omissions not in good faith or
which involve intentional misconduct or a knowing violation of law, (3) under
Section 174 of the General Corporation Law, or (4) for any transaction from
which the director derived an improper personal benefit. The General Corporation
Law, the Company's Amended and Restated Certificate of Incorporation and the
By-Laws of the Company permit the purchase by the Company of insurance for
indemnification of directors and officers. The Company currently maintains
directors and officers liability insurance.
Part II-1
The foregoing summary of Section 145 of the General Corporation Law,
Articles ELEVENTH and TWELFTH of the Amended and Restated Certificate of
Incorporation of the Company and Article 8 of the By-Laws of the Company is
qualified in its entirety by reference to the relevant provisions of Section
145, the relevant provisions of the Company's Unofficial Composite Amended and
Restated Certificate of Incorporation, which is attached hereto as Exhibit 3.1,
and the relevant provisions of the Company's By-Laws, which are incorporated
herein by reference to Exhibit 3.3 to the Company's Annual Report on Form 10-K
for the year ended December 31, 2000, File No. 1-12139.
Under the Registration Rights Agreement (Exhibit 4.2 hereto), the
Company has agreed to indemnify the selling security holders and each person, if
any, who controls each selling security holder against certain liabilities,
including liabilities under the Securities Act of 1933, and the selling security
holders have agreed to indemnify the Company, its directors, its officers and
each person, if any, who controls the Company against certain liabilities,
including liabilities under the Securities Act of 1933.
ITEM 16. EXHIBITS
The following is a list of all exhibits filed as part of this
Registration Statement, including those incorporated by reference.
EXHIBIT NUMBER DESCRIPTION
- -------------- -----------
3.1 Unofficial Composite Amended and Restated Certificate of
Incorporation of the Company, effective August 27, 2003. *
3.2 Amendment to the Certificate of Incorporation of the Company,
filed with the Secretary of State of the State of Delaware on
August 27, 2003. *
3.3 Amended and Restated By-Laws of the Company as currently in
effect. (Exhibit 3.3 to the Company's Annual Report on Form 10-K
for the year ended December 31, 2000, File No. 1-12139, is
incorporated herein by reference.)
4.1 Indenture, dated as of July 1, 2003, of the Company, as Issuer,
to SunTrust Bank, as Trustee, regarding the Notes. (Exhibit 4.2
to the Company's Quarterly Report on Form 10-Q for the quarterly
period ended June 30, 2003, File No. 1-12139, is incorporated
herein by reference.)
4.2 Registration Rights Agreement, dated as of July 1, 2003, between
the Company, as Issuer, and the initial purchasers of the Notes.
(Exhibit 4.3 to the Company's Quarterly Report on Form 10-Q for
the quarterly period ended June 30, 2003, File No. 1-12139, is
incorporated herein by reference.)
5.1 Opinion of Skadden, Arps, Slate, Meagher & Flom LLP. *
10.1 Settlement Agreement and Release, dated November 10, 2003, by
and among the Official Committee of Asbestos Personal Injury
Claimants, the Official Committee of Asbestos Property Damage
Claimants, Sealed Air Corporation and Cryovac, Inc.
23.1 Consent of KPMG LLP.
23.2 Consent of Skadden, Arps, Slate, Meagher & Flom LLP (included in
Exhibit 5.1).
24.1 Powers of Attorney. *
- ---------------
* Previously filed.
Part II-2
ITEM 17. UNDERTAKINGS
The undersigned registrant hereby undertakes that, for purposes of determining
any liability under the Securities Act of 1933, each filing of the registrant's
annual report pursuant to Section 13(a) of 15(d) of the Securities Exchange Act
of 1934 (and, where applicable, each filing of an employee benefit plan's annual
report pursuant to Section 15(d) of the Securities Exchange Act of 1934) that is
incorporated by reference in the registration statement shall be deemed to be a
new registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
The undersigned registrant hereby undertakes:
1. To file, during any period in which offers or sales are being
made, a post-effective amendment to this Registration Statement:
(i) To include any prospectus required by Section 10(a)(3) of the
Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events arising after
the effective date of the registration statement (or the most
recent post-effective amendment thereof) which, individually or
in the aggregate, represent a fundamental change in the
information set forth in the registration statement.
Notwithstanding the foregoing, any increase or decrease in
volume of securities offered (if the total dollar value of
securities offered would not exceed that which was registered)
and any deviation from the low or high end of the estimated
maximum offering range may be reflected in the form of
prospectus filed with the Commission pursuant to Rule 424(b) if,
in the aggregate, the changes in volume and price represent no
more than a 20 percent change in the maximum aggregate offering
price set forth in the "Calculation of Registration Fee" table
in the effective registration statement;
(iii) To include any material information with respect to the plan of
distribution not previously disclosed in the registration
statement or any material change to such information in the
registration statement;
provided, however, that paragraphs (i) and (ii) above do not
apply if the information required to be included in a
post-effective amendment by those paragraphs is contained in
periodic reports filed with or furnished to the Commission by
the registrant pursuant to Section 13 or Section 15(d) of the
Exchange Act of 1934 that are incorporated by reference in the
registration statement.
2. That, for the purpose of determining any liability under the Securities
Act of 1933, each such post-effective amendment shall be deemed to be a
new registration statement relating to the securities offered therein,
and the offering of such securities at that time shall be deemed to be
the initial bona fide offering thereof.
3. To remove from registration by means of a post-effective amendment any
of the securities being registered that remain unsold at the
termination of the offering.
Part II-3
Insofar as indemnification for liabilities arising under the Securities Act of
1933 may be permitted to directors, officers and controlling persons of the
registrant pursuant to the foregoing provisions, or otherwise, the registrant
has been advised that in the opinion of the Securities and Exchange Commission
such indemnification is against public policy as expressed in the Act and is,
therefore, unenforceable. In the event that a claim for indemnification against
such liabilities (other than the payment by the registrant of expenses incurred
or paid by a director, officer or controlling person of the registrant in the
successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Act and will be governed by the final adjudication of
such issue.
Part II-4
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
Registrant certifies that it has reasonable grounds to believe that it meets all
of the requirements for filing on Form S-3 and has duly caused this Amendment
No. 3 to the Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the Township of Saddle Brook, State
of New Jersey, on the 22nd day of December 2003.
Sealed Air Corporation
(Registrant)
By: /s/ William V. Hickey
-------------------------------
Name: William V. Hickey
Title: President and Chief Executive Officer
Pursuant to the requirements of the Securities Act of 1933 this
Amendment No. 3 to the Registration Statement has been signed by the following
persons in the capacities and on the dates indicated.
Signature Title Date
By: /s/ William V. Hickey President, Chief Executive Officer December 22, 2003
-------------------------------- And Director
Name: William V. Hickey (Principal Executive Officer)
By: /s/ David H. Kelsey Vice President and Chief Financial December 22, 2003
--------------------------------- Officer
Name: David H. Kelsey (Principal Financial Officer)
By: /s/ Jeffrey S. Warren Controller December 22, 2003
--------------------------------- (Principal Accounting Officer)
Name: Jeffrey S. Warren Director
By: /s/ Hank Brown* December 22, 2003
--------------------------------
Name: Hank Brown
By: /s/ Michael Chu* Director December 22, 2003
--------------------------------
Name: Michael Chu
By: /s/ Lawrence R. Codey* Director December 22, 2003
--------------------------------
Name: Lawrence R. Codey
By: /s/ T.J. Dermot Dunphy* Director December 22, 2003
--------------------------------
Name: T.J. Dermot Dunphy
By: /s/ Charles F. Farrell, Jr.* Director December 22, 2003
--------------------------------
Name: Charles F. Farrell, Jr.
By: /s/ Shirley Ann Jackson* Director December 22, 2003
--------------------------------
Name: Shirley Ann Jackson
By: /s/ Kenneth P. Manning* Director December 22, 2003
--------------------------------
Name: Kenneth P. Manning
By: /s/ William J. Marino* Director December 22, 2003
--------------------------------
Name: William J. Marino
* By: /s/ Sean E. Dempsey
----------------------
Sean E. Dempsey
Attorney-in-Fact
Index to Exhibits
EXHIBIT
NUMBER DESCRIPTION
3.1 Unofficial Composite Amended and Restated Certificate of
Incorporation of the Company, effective August 27, 2003. *
3.2 Amendment to the Certificate of Incorporation of the Company,
filed with the Secretary of State of the State of Delaware on
August 27, 2003. *
3.3 Amended and Restated By-Laws of the Company as currently in
effect. (Exhibit 3.3 to the Company's Annual Report on Form
10-K for the year ended December 31, 2000, File No. 1-12139, is
incorporated herein by reference.)
4.1 Indenture, dated as of July 1, 2003, of the Company, as Issuer,
to SunTrust Bank, as Trustee, regarding the Notes. (Exhibit 4.2
to the Company's Quarterly Report on Form 10-Q for the
quarterly period ended June 30, 2003, File No. 1-12139, is
incorporated herein by reference.)
4.2 Registration Rights Agreement, dated as of July 1, 2003,
between the Company, as Issuer, and the initial purchasers of
the Notes. (Exhibit 4.3 to the Company's Quarterly Report on
Form 10-Q for the quarterly period ended June 30, 2003, File
No. 1-12139, is incorporated herein by reference.)
5.1 Opinion of Skadden, Arps, Slate, Meagher & Flom LLP. *
10.1 Settlement Agreement and Release, dated November 10, 2003, by
and among the Official Committee of Asbestos Personal Injury
Claimants, the Official Committee of Asbestos Property Damage
Claimants, Sealed Air Corporation and Cryovac, Inc.
23.1 Consent of KPMG LLP.
23.2 Consent of Skadden, Arps, Slate, Meagher & Flom LLP (included
in Exhibit 5.1).
24.1 Powers of Attorney. *
- ---------------
* Previously filed.
Exhibit 10.1
------------
IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF DELAWARE
In re: ) Chapter 11
) Case Nos. 01-1139 through 01-1200
W.R. GRACE & CO., et al., )
)
Debtors. )
________________________________________ )
OFFICIAL COMMITTEE OF )
ASBESTOS PERSONAL INJURY )
CLAIMANTS, et al., )
)
Plaintiffs, )
)
-against- ) Adv. No. 02-2210
) [LEAD DOCKET]
SEALED AIR CORPORATION )
and CRYOVAC, INC., )
)
Defendants. )
_________________________________________)
OFFICIAL COMMITTEE OF )
ASBESTOS PERSONAL INJURY )
CLAIMANTS, et al., )
) Adv. No. 02-2211 Plaintiffs, )
)
-against- )
)
FRESENIUS MEDICAL CARE, )
HOLDINGS, INC., et al., ) This Document Pertains to Adv. No.
) ----------------------------------
Defendants. ) 02-2210 )
_________________________________________) ---------
SETTLEMENT AGREEMENT AND RELEASE
--------------------------------
This Settlement Agreement and Release, dated November 10, 2003, is
made by and among the Official Committee of Asbestos Personal Injury
Claimants, the Official Committee of Asbestos Property Damage Claimants,
Sealed Air Corporation, a Delaware corporation, and Cryovac, Inc., a Delaware
corporation.
I. Definitions
-----------
As used in this Agreement, the following capitalized terms shall
have the following meanings (such meanings to be equally applicable to the
singular and plural forms of the terms defined), unless a paragraph or
subparagraph of this Agreement expressly provides otherwise:
a. "Action" means the suit styled Official Committee of Asbestos
Personal Injury Claimants and Official Committee of Asbestos Property Damage
Claimants of W.R. Grace & Co., suing in behalf of the Chapter 11 Bankruptcy
Estate of W.R. Grace & Co., et al. v. Sealed Air Corporation and Cryovac,
Inc., Adv. No. 02-2210 (D. Del.).
b. "Actually Realized" shall have the meaning set forth in paragraph
VI(h) of this Agreement.
c. "Affiliate" means with respect to any Person, any other Person
that directly or indirectly, through one or more intermediaries, controls, is
controlled by, or is under common control with, such Person.
d. "Agreement" means this Settlement Agreement and Release and any
exhibits, schedules, and annexes thereto, including, without limitation, the
Registration Rights Agreement attached hereto as Exhibit 1 (the "Registration
Rights Agreement").
e. "Announcement" means an "Announcement" (including any successor
name to an Announcement) published in the Internal Revenue Bulletin (including
any successor publication).
f. "Anti-Dilution" means the provisions set forth in Article III of
this Agreement.
g. "Asbestos Claims" means, collectively, Asbestos Personal Injury
Claims, Asbestos Property Damage Claims, and any 'demand' related thereto as
the term is defined in section 524(g)(5) of the Bankruptcy Code.
h. "Asbestos Personal Injury Claims" means any and all Claims, Debts,
and Damages for death, bodily injury, sickness, disease, medical monitoring,
or other personal injuries (whether physical or not) caused or allegedly
caused by, based on, arising out of, or attributable to, directly or
indirectly, in whole or in part, the presence of or exposure at any time to
asbestos or asbestos- containing material or products, mined, processed,
consumed, used, stored, manufactured, designed, sold, assembled, distributed,
disposed of, or installed by or on behalf of any Debtor or any of its
predecessors, successors, or assigns, or any current or former Affiliate of
any of the foregoing, including, without limitation, any Claims, Debts, and
Damages for reimbursement, indemnification, subrogation, or contribution.
i. "Asbestos Property Damage Claims" means any and all Claims, Debts,
and Damages for or arising out of property damage, including, without
limitation, the cost of inspecting, maintaining, encapsulating, abating,
repairing, decontaminating, removing, or disposing of asbestos or asbestos
containing materials or products in buildings or other structures, or other
property caused or allegedly caused by, based on, arising out of, or
attributable to, directly or indirectly, in whole or in part, the installation
in, presence in, or removal of asbestos or asbestos-containing material or
products mined, processed, consumed, used, stored, manufactured, designed,
sold, assembled, distributed, disposed of, or installed by or on behalf of any
Debtor or any of its predecessors, successors, or assigns, or any current or
former Affiliate of any of the foregoing, including, without limitation, any
Claims, Debts, or Damages for reimbursement, indemnification, subrogation, or
contribution.
j. "Asbestos-Related Claims" means any and all Claims, Debts, or
Damages based on or arising from, in whole or in part, directly or indirectly:
(i) Asbestos Claims or (ii) Successor Claims based on or arising from, in
whole or in part, directly or indirectly, the Cryovac Transaction.
k. "Bankruptcy Code" means title 11 of the United States Code as in
effect on the date of this Agreement.
l. "Bankruptcy Court" means the United States Bankruptcy Court for
the District of Delaware.
m. "Bankruptcy Termination Event" means, in the case of either of
Sealed Air Corporation or Cryovac, Inc., (a) the filing by such entity of a
voluntary petition for relief under the Bankruptcy Code or (b) the pendency
against such entity of an involuntary petition for relief under the Bankruptcy
Code (i) that has not been dismissed within ninety days of the filing or (ii)
upon which an order for relief granting the involuntary petition has been
entered.
n. "CFO Annual Statement" shall have the meaning set forth in
paragraph VI(j)(ii) of this Agreement.
o. "Change in Circumstances" means (i) for U.S. federal income tax
purposes, (x) any amendment to the Internal Revenue Code or the final or
temporary regulations promulgated under the Internal Revenue Code, (y) a
decision by any federal court, or (z) a Revenue Ruling, Notice, Revenue
Procedure, or Announcement, which amendment is enacted, promulgated, issued,
or announced, or which decision, Revenue Ruling, Notice, Revenue Procedure, or
Announcement is issued or announced, in each case, after the Execution Date,
and (ii) for financial accounting purposes, any amendment to or change in
generally accepted accounting principles, which amendment is issued or
announced or, which change occurs, in each case, after the Execution Date.
p. "Chapter 11 Plan" means a confirmed plan or plans of
reorganization of the Debtors.
q. "Claims" means any and all claims, whether direct, indirect,
derivative or otherwise, including, without limitation, 'claim' as the term is
defined in section 101(5) of the Bankruptcy Code (except that a right to an
equitable remedy shall also be considered a claim whether or not the breach
gives rise to a right to payment), remedies, or causes of actions, liability,
Debts, or Damages, known or unknown, now existing or hereafter arising, that
have been, could have been, may be, or could be alleged or asserted now or in
the future by any Person against the Debtors, their predecessors, successors,
assigns, or any current or former Affiliate of any of the foregoing, or the
Released Parties, of whatsoever kind or nature, whether alleged or asserted or
not, whether founded in law, equity, admiralty, tort, contract, statute, or
otherwise, and includes, without limitation, demands, liability, suits,
judgments, and all legal or equitable theories of recovery whether arising
under the common law or any statute, ordinance, or regulation. Without
limiting the generality of the foregoing, Claims shall include any and all
claims, causes of action, Debts, or Damages under or attributable to: (i)
chapter 5 of the Bankruptcy Code; (ii) successor liability, piercing the
corporate veil, alter ego liability, agency liability, transferee liability,
or other similar claims or causes of action seeking to hold a Person liable
for the debts or obligations of another Person; (iii) chapter 176 of title 28
of the United States Code or any other similar statutes; (iv) any
debtor-creditor, fraudulent transfer or fraudulent conveyance statutes; or (v)
any other similar claims or causes of action (all such Claims, causes of
action, Debts, or Damages under or attributable to (i) through (v),
collectively, "Successor Claims").
r. "Confirmation Order" means an order or orders confirming the
Chapter 11 Plan.
s. "Contrary Opinion" means (i) a written opinion from a nationally
recognized law firm experienced in Tax matters that states that, as a result
of a Change in Circumstances, there is no "reasonable basis", as defined under
section 6662 of the Internal Revenue Code (or successor provision thereof),
for the taking of, or the failure to take, a Defined Action referred to in
paragraph II(c)(ix), (x), or (xi), VI(b) or VI(g), of this Agreement, as the
case may be, by such Plaintiff, 524(g) Trust, Debtor or Non-Debtor Affiliate,
as the case may be, or (ii) a written opinion from nationally recognized
accounting firm that states that, as a result of a Change in Circumstances,
the taking, or the failure to take, a Defined Action referred to in paragraph
II(c)(ix), (x), or (xi), VI(b) or VI(g), of this Agreement, as the case may
be, by such Plaintiff, 524(g) Trust, Debtor or Non-Debtor Affiliate, as the
case may be, will be inconsistent with generally accepted accounting
principles.
t. "Court" means the court in which the Action is pending or, if no
longer pending, the Bankruptcy Court.
u. "Cryovac Cash Amount" shall have the meaning set forth in
paragraph II(a) of this Agreement.
v. "Cryovac Remaining Amount" means an amount of cash and the number
of shares of Sealed Air Common Stock equal to the excess, if any, of (i) the
Cryovac Total Amount over (ii) the Cryovac 524(g) Trust Amount.
w. "Cryovac Total Amount" means the sum of the Cryovac Cash Amount
and the Fair Market Value of the Settlement Shares, provided, however, that
this sum shall be subject to any setoff or reduction pursuant to paragraph
II(j) of this Agreement.
x. "Cryovac 524(g) Trust Amount" means an amount of cash and the
number of shares of Sealed Air Common Stock equal in the aggregate to the
lesser of (i) the Cryovac Total Amount and (ii) the 524(g) Trust Total Amount
less the Grace Specialty Initial Contribution.
y. "Cryovac 524(g) Trust" means any 524(g) Trust to which all or a
portion of the Cryovac Cash Amount or the Settlement Shares will be directly
transferred by Cryovac, Inc. pursuant to paragraph II(a) of this Agreement.
z. "Cryovac Transaction" means the transfers of assets, the
distributions of stock, the merger, and all predecessor, related, and
ancillary transactions, agreements, transfers, and distributions relating to
the transactions described in, referred to, or contemplated by Form S-4
Registration Statement filed by W.R. Grace & Co. with the Securities and
Exchange Commission under the Securities Act of 1933, as amended, on or about
February 13, 1998, SEC File No. 333- 46281, including all attachments,
exhibits, and schedules thereto.
aa. "Damages" means any and all potential elements of recovery or
relief, including, without limitation, those that are known, unknown, certain,
uncertain, anticipated, or unanticipated, that have been, could have been, may
be, or could be alleged or asserted now or in the future against the Released
Parties, whether alleged, unalleged, asserted, or unasserted by Plaintiffs or
by any other Person under any legal, regulatory, administrative, or equitable
theory against the Released Parties, and includes, without limitation,
equitable relief, declaratory relief, actual damages (whether for successor
liability, fraudulent transfer, fraudulent conveyance, alter ego liability,
agency liability, property damage, environmental liability, Tax liability,
economic loss, loss of profits, medical expenses, medical monitoring, personal
injury, loss of consortium, wrongful death, survivorship, or compensatory,
proximate, consequential, general, incidental, or special damages, or any
other liability, loss, or injury), statutory or treble, or multiple or penal
or punitive or exemplary damages, attorneys' fees, interest, expenses, and
costs of court.
bb. "Debtors" means W.R. Grace & Co., W.R. Grace & Co.-Conn., and
related entities that have filed voluntary petitions for relief under chapter
11 of the Bankruptcy Code in the Bankruptcy Court, each of their estates, any
trustee or examiner that may be appointed in any of the Debtors' cases under
the Bankruptcy Code, and the reorganized Debtors and includes, without
limitation, any new corporation or other entity to which the stock or the
assets of any of the Debtors, or any combination thereof, are transferred
pursuant to the Chapter 11 Plan (other than a 524(g) Trust, or an unrelated
third-party that has purchased assets from a Debtor pursuant to section 363 of
the Bankruptcy Code).
cc. "Debts" means any liability or obligation arising from, based on,
or attributable to any Claim.
dd. "Defined Action" means any action, including the filing of any
Tax Return, a Protective Claim or other information with respect to Taxes,
making any statement in any public or regulatory filing or press release or
otherwise, relating to any obligation of a Person set forth or referred to in
paragraph II(c)(ix), (x), or (xi), VI(b) or VI(g), of this Agreement,
provided, however, that a Defined Action shall not include the making of a
statement by any of the Plaintiffs or the Debtors in a court document filed in
the Debtors' chapter 11 cases or in an oral statement to the court
in the Debtors' chapter 11 cases if, with respect to such Defined Action, such
Plaintiff or Debtor has used its best efforts to satisfy its obligations set
forth or referred to in paragraphs II(c)(ix), (x), and (xi), VI(b) or VI(g),
of this Agreement, and provided, further, that a Defined Action shall not
include (x) the preparation and execution of a Grace Protective Claim by the
Debtors pursuant to and in accordance with paragraph VI(h) of this Agreement
and (y) the pursuit by the Debtors of a Grace Protective Claim pursuant to and
in accordance with the third sentence of paragraph VI(i) of this Agreement.
ee. "Effective Date" means the date that is ten business days after
the Confirmation Order becomes a Final Order or, if later, the date by which
transfers to the 524(g) Trusts must be made pursuant to the Chapter 11 Plan
and Confirmation Order.
ff. "Excluded Fees" means costs and expenses (including lawyer's
fees, expert's fees, and accountant's fees) incurred by the Released Parties
in defending the Action or any other proceedings or controversies arising out
of or based upon Asbestos-Related Claims prior to the Effective Date.
gg. "Execution Date" means November 10, 2003.
hh. "Fair Market Value" means (i) with respect to each of the
Settlement Shares the last sale price on the New York Stock Exchange of a
share of Sealed Air Common Stock, regular way, one business day before the
Effective Date, and (ii) with respect to other property, the value assigned to
such property in the disclosure statement approved by a Final Order of the
Bankruptcy Court pursuant to section 1125(b) of the Bankruptcy Code with
respect to the Chapter 11 Plan.
ii. "Final Determination" means any assessment or resolution of
liability for any Tax for any taxable period with respect to a Tax Claim
against such Person required to take, or prohibited from taking, a Defined
Action pursuant to the provisions set forth or referred to in this Agreement
(i) by a decision, decree or other order by a court of competent jurisdiction,
which has become final and unappealable or (ii) by any other means (including
a closing agreement or accepted offer in compromise under section 7121 or 7122
of the Internal Revenue Code) if Cryovac, Inc. has consented to such other
means, which consent shall not be unreasonably withheld or delayed.
jj. "Final Order" means an order or judgment, the operation or effect
of which has not been stayed, reversed, or amended and as to which order or
judgment (or any revision, modification, or amendment thereof) the time to
appeal or to seek review or rehearing has expired and as to which no appeal or
petition for review or rehearing was filed, or if filed, remains pending.
kk. "Fresenius" means Fresenius Medical Care Holdings, Inc., its
Affiliates, and any and all of their predecessors, successors, and assigns.
ll. "Fresenius Release" means a duly executed release in the form
annexed hereto as Exhibit 5, with appropriate insertions thereto.
mm. "Fresenius Transaction" means the transfer of assets, the
distributions of stock, and the merger and all predecessor related and
ancillary transactions, agreements, transfers, and distributions relating to
the transactions described in, referred to, or contemplated by Form S-4
Registration Statement filed by W.R. Grace & Co. with the Securities and
Exchange Commission under the Securities Act of 1933, as amended, on or about
August 2, 1996, SEC File No. 333-09497, including all attachments, exhibits
and schedules thereto.
nn. "Government Plaintiff" means the United States of America, acting
for and on behalf of the United States Environmental Protection Agency.
oo. "Government Release" means a release in the form annexed hereto
as Exhibit 2, with appropriate insertions therein.
pp. "Grace New York" means W.R. Grace & Co., a New York corporation
(now known as Fresenius Medical Care Holdings, Inc.) (Taxpayer Identification
Number 13-3461988).
qq. "Grace New York Group" means that group of corporations,
including, without limitation, W.R. Grace & Co.-Conn., Cryovac, Inc., and
Sealed Air Corporation, that were members through (and including) September
28, 1996 or December 31, 1996, as applicable, of the affiliated group of
corporations within the meaning of section 1504 of the Internal Revenue Code,
and the Treasury Regulations, of which Grace New York was the common parent,
and, with respect to Taxes of other jurisdictions (domestic or foreign), that
group of corporations that included Grace New York or one or more members of
the Grace New York Group with respect to any combined, consolidated, joint, or
similar Tax Return under the laws of any jurisdiction (domestic or foreign).
rr. "Grace Protective Claim" shall have the meaning set forth in
paragraph VI(h) of this Agreement.
ss. "Grace Specialty" means W.R. Grace & Co. (formerly known as Grace
Specialty Chemicals, Inc.) (Taxpayer Identification Number 65-0773649), or its
successor.
tt. "Grace Specialty Initial Contribution" means, with respect to the
524(g) Trusts in the aggregate, the "voting shares of" and "rights" in (as
those terms are used in section 524(g)(2)(B)(i)(III) of the Bankruptcy Code)
Grace Specialty or one or more other Debtors to be received by such 524(g)
Trusts pursuant to section 524(g)(2)(B)(i)(III)(aa), (bb), or (cc), as the
case may be, which voting shares and rights, if exercised, would entitle such
524(g) Trusts to own the lesser of (i) 50.1% of the voting shares of such
entity or entities or (ii) the percentage of voting shares of such entity or
entities that are to be received by the 524(g) Trusts.
uu. "Grace Taxes" means all Taxes imposed on or with respect to, or
related or attributable to, the Grace New York Group or any member thereof for
or attributable to any taxable period (or any portion thereof) ending on or
before December 31, 1996.
vv. "Indemnified Taxes" means all Taxes and other amounts that W.R.
Grace & Co.- Conn. or any other Debtor is responsible for or required to pay,
or is required to indemnify any Released Party for or in respect thereto,
pursuant to the 1998 Tax Sharing Agreement and including, without limitation,
all Grace Taxes.
ww. "Internal Revenue Code" means the Internal Revenue Code of 1986.
xx. "IRS" means the Internal Revenue Service.
yy. "Material Draft" means each of (i) the first draft of a Trust
Document circulated to any Person who is not in an attorney-client
relationship with the draftsman, (ii) the first draft of a Trust Document
circulated following the draft of such Trust Document that Cryovac, Inc. or
its representatives provided comments with respect thereto, pursuant to and in
accordance with the last sentence of paragraph VI(a) of this Agreement (such
comments, the "Cryovac Language"), (iii) the first draft of a Trust Document
that contains the Cryovac Language (or any variation thereof), (iv) any draft
of a Trust Document which contains changes to the Cryovac Language (as the
same may be amended or modified), or language inconsistent with the Cryovac
Language or paragraphs II(c)(ix), (x), and (xi) of this Agreement, (v) the
draft of a Trust Document that the Plaintiffs or the Debtors, as the case may
be, reasonably believe is the penultimate draft of such document and (vi) the
final draft of a Trust Document.
zz. "Non-Debtor Affiliates" means the Affiliates of the Debtors that
are not debtors or debtors in possession under the Bankruptcy Code.
aaa. "Notice" means a "Notice" (including any successor name to a
Notice) published in the Internal Revenue Bulletin (or successor publication).
bbb. "Paragraph II(a) Proviso" shall have the meaning set forth in
paragraph II(a) of this Agreement.
ccc. "Paragraph VI(f) Issue" shall have the meaning set forth in
paragraph VI(f) of this Agreement.
ddd. "Person" means any individual, corporation, company,
partnership, limited liability company, firm, association, joint venture,
joint stock company, trust, estate, business trust, unincorporated
organization, any other entity, and any 'governmental unit' (as that term is
defined in section 101(27) of the Bankruptcy Code).
eee. "Plaintiffs" means the Official Committee of Asbestos Personal
Injury Claimants and the Official Committee of Asbestos Property Damage
Claimants of W.R. Grace & Co., suing in behalf of the Chapter 11 Bankruptcy
Estate of W.R. Grace & Co.
fff. "Preliminary Injunction" means the preliminary injunction issued
by the Bankruptcy Court on May 3, 2001, as modified on January 22, 2002, in
W.R. Grace & Co. v. Chakarian, Adversary No. A-01-771 (Bankr. D. Del.),
staying all actions arising from alleged exposure to asbestos indirectly or
directly allegedly caused by Debtors or alleging fraudulent transfer or
fraudulent conveyance claims that were filed or pending against Sealed Air
Corporation, Cryovac, Inc., or certain of their Affiliates and staying all
such future actions upon filing and service against Sealed Air Corporation,
Cryovac, Inc., or certain of their Affiliates.
ggg. "Protective Claim" means a Form 1120X (Amended U.S. Corporation
Income Tax Return) or similar state or local tax form, which is prominently
and clearly labeled on every page thereof with the words "Protective Claim
Only" and which clearly and prominently states that the Person filing such
form asserts its right to the claimed Tax benefits conditionally or
contingently, and only in the event that such Tax benefits are denied in full
to Cryovac, Inc. (or the consolidated, combined, unitary or similar group of
which Sealed Air Corporation is the common parent) by a decision, decree or
other order by a court of competent jurisdiction, which has become final and
unappealable, or by a closing agreement or accepted offer in compromise under
section 7121 or 7122 of the Internal Revenue Code entered into by Sealed Air
Corporation and the Internal Revenue Service.
hhh. "Qualified Settlement Fund" shall have the meaning set forth in
paragraph II(c)(ix) of this Agreement.
iii. "Release" means a release, in the form annexed hereto as Exhibit
3, with appropriate insertions therein.
jjj. "Released Parties" means Sealed Air Corporation, Cryovac, Inc.,
and all of their parent corporations, subsidiary corporations, joint
venturers, Affiliates, and sister corporations, and any and all of their past,
present, and future agents, servants, officers, directors, employees,
successors, assigns, heirs, executors, administrators, legal representatives,
beneficiaries, insurers (but solely to the extent of coverage procured by
Sealed Air Corporation (after March 31, 1998) or Cryovac, Inc. (after such
date) of any liabilities of Sealed Air Corporation or Cryovac, Inc. for
Asbestos-Related Claims), or any of them, including any Person acting on
behalf of or at the direction of any of them, but specifically excluding (i)
the Debtors, (ii) all Non-Debtor Affiliates, (iii) Fresenius (to the extent of
any and all Claims, Damages, or Debts arising out of the Fresenius
Transaction), and (iv) any and all insurers of the Debtors or the Non-Debtor
Affiliates to the extent that they have provided coverage for Asbestos-Related
Claims now or hereafter asserted or which could have been asserted at any time
against the Debtors or the Non-Debtor Affiliates.
kkk. "Relevant Tax Year" shall have the meaning set forth in
paragraph VI(h) of this Agreement.
lll. "Revenue Procedure" means a "Revenue Procedure" (including any
successor name to a Revenue Procedure) published in the Internal Revenue
Bulletin (or successor publication).
mmm. "Revenue Ruling" means a "Revenue Ruling" (including any
successor name to a Revenue Ruling) published in the Internal Revenue Bulletin
(or successor publication).
nnn. "Sealed Air Common Stock" means the voting common stock, par
value $0.10 per share, of Sealed Air Corporation.
ooo. "Sealed Air Opinion" means, with respect to any Contrary Opinion
obtained by any Plaintiff, Cryovac 524(g) Trust, Debtor, or Non-Debtor
Affiliate, as the case may be, with respect to a Defined Action (i) if such
Contrary Opinion is with respect to a Tax issue, a written opinion addressed
to such Plaintiff, Cryovac 524(g) Trust, Debtor or Non-Debtor Affiliate, as
the case may be, from a nationally recognized law firm experienced in Tax
matters that states that there is "substantial authority", as defined under
section 6662 of the Internal Revenue Code (or successor provision thereof),
for the taking of, or the failure to take, such Defined Action or, (ii) if
such Contrary Opinion is with respect to an accounting issue, a written
opinion addressed to such Plaintiff, Cryovac 524(g) Trust, Debtor or
Non-Debtor Affiliate, as the case may be, from nationally recognized
accounting firm that states that the taking, or the failure to take, such
Defined Action will not be inconsistent with generally accepted accounting
principles.
ppp. "Settlement Shares" shall have the meaning set forth in
paragraph II(a) of this Agreement.
qqq. "SOL" shall have the meaning set forth in paragraph VI(h) of
this Agreement.
rrr. "Successor Claims" shall have the meaning set forth in the
definition of Claims.
sss. "Tax" or "Taxes" means all taxes, customs, duties, levies, fees,
tariffs, imports, deficiencies, or other charges or assessments of any kind
whatsoever, including all net income, gross income, capital gains, gross
receipt, property, franchise, sales, use, excise, withholding, payroll,
employment, social security, worker's compensation, unemployment, occupation,
severance, capital stock, ad valorem, value added, transfer, gains, profits,
net worth, asset, transaction, business consumption or other taxes, and any
interest, penalties, fines, additions to tax or additional amounts with
respect thereto, imposed by any governmental authority (whether domestic or
foreign).
ttt. "Tax Benefit" shall have the meaning set forth in paragraph
VI(h) of this Agreement.
uuu. "Tax Benefit Accountant" shall have the meaning set forth in
paragraph VI(j) of this Agreement.
vvv. "Tax Benefit Dispute Notice" shall have the meaning set forth in
paragraph VI(j) of this Agreement.
www. "Tax Benefit Report" shall have the meaning set forth in
paragraph VI(j) of this Agreement.
xxx. "Tax Benefit Start Date" shall have the meaning set forth in
paragraph VI(j)(ii) of this Agreement.
yyy. "Tax Benefit Statement" shall have the meaning set forth in
paragraph VI(j) of this Agreement.
zzz. "Tax Claim" shall have the meaning set forth in paragraph VI(c)
of this Agreement.
aaaa. "Tax Return" means all returns, reports and information
(including elections, declarations, disclosures, schedules, estimates and
information returns) required to be supplied to a Tax Authority relating to
Taxes.
bbbb. "Transfer" shall have the meaning set forth in paragraph VI(h)
of this Agreement.
cccc. "Transferor" shall have the meaning set forth in paragraph
II(c)(ix) of this Agreement.
dddd. "Treasury Regulations" means the treasury regulations
(including temporary regulations) promulgated pursuant to the Internal Revenue
Code.
eeee. "Trust Document" means, for each trust to which all or any
portion of the Cryovac Cash Amount or the Settlement Shares is directly
transferred by Cryovac, Inc. pursuant to paragraph II(a) of this Agreement,
each of the plan of reorganization of the Debtors, and any document pursuant
to which such trust is organized or created (and any amendments thereto).
ffff. "524(g) Trust" means any trust established pursuant to 11
U.S.C. ss. 524(g), as provided in the Chapter 11 Plan and the Confirmation
Order.
gggg. "524(g) Trust Total Amount" means the sum of the aggregate
amount of cash and the Fair Market Value of all property to be contributed to
all of the 524(g) Trusts, as provided in the Chapter 11 Plan and the
Confirmation Order.
hhhh. "1998 Tax Sharing Agreement" means the Tax Sharing Agreement by
and among W.R. Grace & Co., W.R. Grace & Co.-Conn., and Sealed Air
Corporation, dated as of March 30, 1998.
II. Settlement Agreement and Release of All Claims
----------------------------------------------
a. On the Effective Date, Cryovac, Inc. shall, subject to paragraph
II(j) of this Agreement, transfer in the aggregate (i) the sum of $512.5
million in cash, plus interest thereon from December 21, 2002 until the
Effective Date, at a rate of 5.5% per annum compounded annually (the "Cryovac
Cash Amount"), and (ii) nine million shares of Sealed Air Common Stock, as
adjusted for Anti-Dilution (the "Settlement Shares"). Such transfer shall be
made as directed in the Confirmation Order; provided, however, that each of
the Plaintiffs shall use its best efforts to require the Chapter 11 Plan
(whether confirmed under section 1129(a) or (b) of the Bankruptcy Code) to
provide that the Cryovac Cash Amount and the Settlement Shares shall be
transferred by Cryovac, Inc. directly to one or more of the 524(g) Trusts for
Asbestos Claims, unless the 524(g) Trust Total Amount reduced by the Grace
Specialty Initial Contribution is less than the Cryovac Total Amount, in which
case, the Chapter 11 Plan shall provide that Cryovac, Inc. shall transfer (x)
in the aggregate directly to one or more of the 524(g) Trusts for Asbestos
Claims, an amount of cash and shares of Sealed Air Common Stock equal, in the
aggregate, to the Cryovac 524(g) Trust Amount, in the same proportion that the
Cryovac Cash Amount and the Fair Market Value of the Settlement Shares,
respectively, bears to the sum of both, and (y) directly to Grace Specialty,
an amount of cash and shares of Sealed Air Common Stock equal, in the
aggregate, to the Cryovac Remaining Amount, in such same proportions (this
proviso, the "Paragraph II(a) Proviso"). The provisions of paragraph II(b) of
this Agreement shall apply first with respect to the Plaintiffs' obligations
set forth in the Paragraph II(a) Proviso. If the Chapter 11 Plan cannot be
confirmed in accordance with both the Paragraph II(a) Proviso and paragraph
II(b) of this Agreement, then each of the Plaintiffs shall use its best
efforts to require that the Chapter 11 Plan (whether confirmed under section
1129(a) or (b) of the Bankruptcy Code) (x) maximize the initial funding of one
or more of the 524(g) Trusts from the Cryovac Cash Amount and the Settlement
Shares, and provide for the transfer of such funding by Cryovac Inc. directly
to such 524(g) Trusts for Asbestos Claims and (y) provide that such amounts
not transferred by Cryovac Inc. directly to such 524(g) Trusts will be
transferred by Cryovac Inc. directly to Grace Specialty, and paragraph II(b)
of this Agreement shall apply anew to these obligations. If the transfers made
pursuant to this paragraph II(a) are directed to more than one 524(g) Trust,
then the portion of the entire amount to be transferred to such 524(g) Trusts
shall be allocated among each of such 524(g) Trusts pursuant to and in
accordance with the Confirmation Order. Under no circumstances shall any
fractional shares of Sealed Air Common Stock be transferred pursuant to this
Agreement or any Person be the transferee of less than one thousand shares of
Sealed Air Common Stock pursuant to this Agreement, provided, however, that in
no event shall the Cryovac 524(g) Trusts incur any costs or expenses
associated with such one thousand share limitation, nor shall such limitation
affect the apportionment, if any, of the Settlement Shares and the Cryovac
Cash Amount that may be allocated between the Cryovac 524(g) Trusts, on the
one hand, and Grace Specialty, on the other hand. Sealed Air Corporation
irrevocably, absolutely and unconditionally guarantees the performance of the
obligations of Cryovac, Inc. set forth in this paragraph II(a) and the right
of the Plaintiffs to enforce this guaranty shall not require the Plaintiffs
first to proceed against Cryovac, Inc.
b. In furtherance of the Plaintiffs' obligations pursuant to
paragraph II(a) of this Agreement, each of the Plaintiffs shall: (i) support
the approval of a disclosure statement(s) that relates to a Chapter 11 Plan
that satisfies the provisions set forth in paragraph II(a) of this Agreement
(such a Chapter 11 Plan, the "Conforming Plan"), as long as the Conforming
Plan meets the requirements for confirmation set forth in sections 524 and
1129 of the Bankruptcy Code, regardless of whether confirmation may be
obtained under section 1129(a) or (b) of the Bankruptcy Code; (ii) recommend
to the creditors and parties in interest the interests of which are
represented by it to vote in favor of the confirmation of the Conforming Plan;
(iii) oppose the approval of any disclosure statement that relates to a
non-Conforming Plan; (iv) recommend to the creditors and parties in interest
the interests of which are represented by it to vote against the confirmation
of a non- Conforming Plan; (v) not take any action, of whatever kind and
nature, to oppose, or designed to prevent confirmation of, the Conforming
Plan; and (vi) take any action, of whatever kind and nature, that is
necessary, required or appropriate in order to confirm the Conforming Plan,
provided, however, that the Plaintiffs shall not be required to support or
recommend a Conforming Plan which, in the exercise of Plaintiffs' respective
fiduciary obligations, is determined to be unacceptable (other than as to
provisions required by the terms of this Agreement), and provided, further,
that the Plaintiffs shall not be bound by the provisions of paragraphs
II(b)(i) through (vi) of this Agreement if (x) the Bankruptcy Court determines
in a Final Order, on a motion brought by a party in interest, and on notice to
Sealed Air Corporation and Cryovac, Inc., seeking an order excusing their
performance under the provisions contained in paragraphs II(b)(i) through (vi)
of this Agreement, that the Conforming Plan cannot meet the confirmation
requirements set forth in sections 524 and 1129 of the Bankruptcy Code, or (y)
the Bankruptcy Court refuses to confirm the Conforming Plan, except if such
refusal relates to issues unrelated to the requirements contained in paragraph
II(a) of this Agreement. The provisions of this paragraph II(b) shall apply as
set forth in paragraph II(a) of this Agreement.
c. As a condition to the obligations of Cryovac, Inc. set forth in
paragraph II(a) of this Agreement, each of the Confirmation Order and the
Chapter 11 Plan shall expressly provide that:
(i) each of the Plaintiffs and the Debtors shall execute and deliver
the Release, and the Government Plaintiff shall execute and deliver
the Government Release;
(ii) in consideration of the transfers made pursuant to paragraph
II(a) of this Agreement, each of the Non-Debtor Affiliates
irrevocably releases, acquits, and forever discharges the Released
Parties from any and all Asbestos-Related Claims, and any and all
Claims, Debts, and Damages on the basis of, arising from, or
attributable to (in whole or in part, directly or
indirectly) the Fresenius Transaction, that have accrued or been
asserted or that hereafter might accrue or be asserted against the
Released Parties, and that each Non-Debtor Affiliate shall not
institute, participate in, maintain, maintain a right to or assert
against the Released Parties, either directly or indirectly, on its
own behalf, derivatively, or on behalf of any other Person any and
all Asbestos-Related Claims, and any and all Claims, Debts, and
Damages on the basis of, arising from, or attributable to (in whole
or in part, directly or indirectly) the Fresenius Transaction;
(iii) the Action shall be dismissed with prejudice;
(iv) each of the Release and the Government Release is approved;
(v) the Plaintiffs shall deliver the Fresenius Release;
(vi) the Released Parties shall receive the full benefit of an
injunction under sections 524(g) and 105(a) of the Bankruptcy Code,
which injunction shall be in form and substance reasonably acceptable
to Sealed Air Corporation and Cryovac, Inc. and which injunction
shall include, without limitation, provisions enjoining any and all
Persons from taking any and all legal or other actions (including,
without limitation, the continued prosecution of pending 'Actions' or
the commencement of future 'Actions' as such term is defined in the
Preliminary Injunction) or making any demand (as such term is defined
in section 524(g)(5) of the Bankruptcy Code) for the purpose of,
directly or indirectly, claiming, collecting, recovering, or
receiving any payment, recovery or any other relief whatsoever from
any of the Released Parties with respect to any and all
Asbestos-Related Claims;
(vii) (A) the Debtors shall, jointly and severally, at their sole
expense, indemnify, defend, and hold-harmless the Released Parties
from and against (1) any and all Asbestos-Related Claims and all
Indemnified Taxes, (2) any and all losses, costs, and expenses
incurred as a result of any breach of any of the Debtors' or
Non-Debtor Affiliates' obligations, covenants, and agreements set
forth or referred to in this Agreement, including, without
limitation, any such obligation, covenant, or agreement of any Debtor
or Non-Debtor Affiliate set forth in the Chapter 11 Plan or
Confirmation Order, (3) if any Non-Debtor Affiliate has not executed
and delivered a Release, any and all Asbestos-Related Claims based
on, arising out of, or attributable to, directly or indirectly, in
whole or in part, such Non-Debtor Affiliate and (4) any and all
attorneys' fees or costs and expenses attributable to any Indemnity
Claim, provided, however, that in each case such indemnification shall
not apply to Excluded Fees (such indemnity obligations, collectively,
the "Debtors' Indemnity Obligation"; any and all Claims, Debts, or
Damages that could be asserted by any of the Released Parties under
Debtors' Indemnity Obligation, the "Indemnity Claims"), and provided,
further, that nothing in this Agreement shall adversely affect any
rights of any Person to file and pursue, or object to, a proof of
claim for Excluded Fees in the Debtors' chapter 11 cases, (B) each
Debtor shall execute and deliver an indemnity agreement in favor of
the Released Parties in the form annexed hereto as Exhibit 6 (the
"Indemnification Agreement"), (C) the Debtors' Indemnity Obligation
(and the obligations, covenants, and agreements of each of the
Debtors and Non- Debtor Affiliates set forth or referred to in this
Agreement, including, without limitation, any such obligation,
covenant, or agreement of any Debtor or Non-Debtor Affiliate set
forth in the Chapter 11 Plan or Confirmation Order) shall not be
discharged, expunged, estimated, or otherwise adversely affected in
the Debtors' bankruptcy cases or by the confirmation of the Chapter
11 Plan, and (D) the Debtors' Indemnity Obligation (and the
obligations, covenants, and agreements of each of the Debtors and
Non-Debtor Affiliates set forth or referred to in this Agreement,
including, without limitation, any such obligation, covenant, or
agreement of any Debtor or Non-Debtor Affiliate set forth in the
Chapter 11 Plan or Confirmation Order) shall continue unaffected as a
post-confirmation obligation of each of the reorganized Debtors;
(viii) there shall be established under state law the 524(g) Trusts,
each of which shall be subject to the continuing jurisdiction of the
Bankruptcy Court;
(ix) if one or more Cryovac 524(g) Trusts is established, then each
Cryovac 524(g) Trust shall be established to qualify as a "qualified
settlement fund" for federal income tax purposes within the meaning
of Treasury Regulations section 1.468B (each, a "Qualified Settlement
Fund"), and, unless otherwise required by a Final Determination, the
Plaintiffs and the Cryovac 524(g) Trusts (A) shall file all Tax
Returns required to be filed by such Person, if any, consistent with
the provisions of this paragraph II(c)(ix) and shall take all other
Defined Actions that are reasonably requested by Sealed Air
Corporation and consistent with the provisions of this paragraph
II(c)(ix) and (B) shall be prohibited from taking any Defined Action
that may result in the disqualification of any Cryovac 524(g) Trust
as a Qualified Settlement Fund or be inconsistent with Cryovac, Inc.
being treated as a "transferor" (as defined under Treasury
Regulations section 1.468B-1(d)) ("Transferor") to each Cryovac
524(g) Trust of the cash and Settlement Shares transferred by
Cryovac, Inc. directly to such Cryovac 524(g) Trust or each Cryovac
524(g) Trust constituting a Qualified Settlement Fund, provided,
however, that a Person shall not be required to take, or be
prohibited from taking, as the case may be, a Defined Action as
required pursuant to this paragraph II(c)(ix) if each of the
following four requirements has been previously satisfied (I) such
Person has fully performed all of its obligations set forth in
paragraph VI(f) of this Agreement, (II) such Person has received a
Contrary Opinion with respect to such Defined Action required
or prohibited pursuant to this paragraph II(c)(ix), (III) such
Person has provided a copy of such Contrary Opinion to Sealed
Air Corporation, and (IV) within forty- five days of the receipt
by Sealed Air Corporation of such Contrary Opinion, Sealed Air
Corporation has not provided such Person with a Sealed Air Opinion;
(x) if one or more Cryovac 524(g) Trusts is established, then unless
otherwise required by a Final Determination, the Cryovac 524(g)
Trusts shall treat for all Tax purposes any and all payments by
Cryovac, Inc. directly to the Cryovac 524(g) Trusts pursuant to
paragraph II(a) of this Agreement as a direct payment by Cryovac,
Inc. to the Cryovac 524(g) Trusts for Asbestos Claims that
constitutes an ordinary and necessary expense of Cryovac, Inc., and
the Plaintiffs and the Cryovac 524(g) Trusts (A) shall be prohibited
from taking any Defined Action that is inconsistent with the
foregoing provisions of this paragraph II(c)(x), and (B) shall take
all Defined Actions that are reasonably requested by Sealed Air
Corporation and consistent with the provisions of this paragraph
II(c)(x); provided, however, that a Person shall not be required to
take, or be prohibited from taking, as the case may be, a Defined
Action as required pursuant to this paragraph II(c)(x) if each of the
following four requirements has been previously satisfied (I) such
Person has fully performed all of its obligations set forth in
paragraph VI(f) of this Agreement, (II) such Person has received a
Contrary Opinion with respect to such Defined Action required or
prohibited pursuant to this paragraph II(c)(x), (III) such Person has
provided a copy of such Contrary Opinion to Sealed Air Corporation,
and (IV) within forty-five days of the receipt by Sealed Air
Corporation of such Contrary Opinion, Sealed Air Corporation has not
provided such Person with a Sealed Air Opinion;
(xi) if one of more Cryovac 524(g) Trusts is established, then unless
otherwise required by a Final Determination, the Cryovac 524(g)
Trusts shall treat for all Tax purposes all payments, if any, by
Cryovac, Inc. to Grace Specialty pursuant to paragraph II(a) of this
Agreement as ordinary income of Grace Specialty, and the Plaintiffs
and the Cryovac 524(g) Trusts (A) shall file all Tax Returns required
to be filed by such Person, if any, consistent with the provisions of
this paragraph II(c)(xi) and shall take all other Defined Actions
that are reasonably requested by Sealed Air Corporation and
consistent with the provisions of this paragraph II(c)(xi) and (B)
shall be prohibited from taking any Defined Action that is
inconsistent with the foregoing provisions of this paragraph
II(c)(xi) or that is inconsistent with any such payment being treated
as an ordinary and necessary expense incurred by Cryovac, Inc.;
provided, however, that a Person shall not be required to take, or be
prohibited from taking, as the case may be, a Defined Action as
required pursuant to this paragraph II(c)(xi) if each of the
following four requirements has been previously satisfied (I) such
Person has fully performed all of its obligations set forth in
paragraph VI(f) of this Agreement, (II) such Person has received a
Contrary Opinion with respect to such Defined Action required or
prohibited pursuant to this paragraph II(c)(xi), (III) such Person
has provided a copy of such Contrary Opinion to Sealed Air
Corporation, and (IV) within forty- five days of the receipt by
Sealed Air Corporation of such Contrary Opinion, Sealed Air
Corporation has not provided such Person with a Sealed Air Opinion;
and
(xii) the 1998 Tax Sharing Agreement is an assumed agreement of each
of the Debtors (including, without limitation, Grace Specialty and
W.R. Grace & Co.-Conn.) pursuant to section 365 of the Bankruptcy
Code, and nothing contained in or contemplated by this Agreement, the
Chapter 11 Plan, or the Confirmation Order shall adversely affect the
rights of Sealed Air Corporation or any of its Affiliates under the
1998 Tax Sharing Agreement.
d. Simultaneously with and in exchange for the transfers contemplated
by paragraph II(a) of this Agreement, the Plaintiffs shall deliver to
Cryovac, Inc. and Sealed Air Corporation: (i) the Release duly
executed by each of the Plaintiffs and the Debtors; (ii) a copy of
the Chapter 11 Plan; (iii) a copy of the Confirmation Order; (iv) a
duly executed Stipulation of Dismissal With Prejudice of the Action,
in the form annexed hereto as Exhibit 4, denying any other recovery
against the Released Parties; and (v) the Registration Rights
Agreement, in the form annexed hereto as Exhibit 1, with appropriate
insertions therein, duly executed by the Initial Holders.
e. The Released Parties shall not seek indemnity, contribution, or
reimbursement for any payments made under paragraph II(a) of this
Agreement from any source, including, without limitation, the
insurers of the Debtors (but solely to the extent of coverage
procured by the Debtors or any of its predecessors).
f. The transfers made pursuant to paragraph II(a) of this Agreement
shall be made in full compromise and settlement of any and all
Asbestos-Related Claims against any and all of the Released Parties.
g. Any order of the Court approving this Agreement shall provide that
the Preliminary Injunction shall remain in full force and effect through and
including the Effective Date.
h. Neither this Agreement nor any of the transactions contemplated
hereby is, or shall be construed as, an admission of liability, fault or
wrongdoing by the Released Parties, who have denied and continue to deny any
liability, fault, or wrongdoing, but, instead, is a compromise settlement of
disputed claims, made in order to avoid the further substantial expense,
burden, and inconvenience of protracted litigation and appeal that may occur
in further proceedings relating to these actions or any future actions, by
which the Released Parties have forever bought their peace.
i. The Plaintiffs do hereby and the Confirmation Order shall
expressly provide that the Debtors, the Plaintiffs, and the Non-Debtor
Affiliates fully understand and agree that Cryovac, Inc. and Sealed Air
Corporation have entered into this Agreement in order to settle, release,
extinguish, and terminate fully, finally, and forever any and all further
controversy respecting any and all Asbestos-Related Claims against any and all
of the Released Parties. The Plaintiffs do hereby and the Confirmation Order
shall expressly provide that the Debtors, the Plaintiffs, and the Non-Debtor
Affiliates acknowledge and agree that this provision is an essential and
material term of this Agreement and the compromise settlement leading to this
Agreement, and that, without such provision, neither Cryovac, Inc. nor Sealed
Air Corporation would have executed this Agreement and the compromise
settlement would not have been accomplished.
j. Notwithstanding anything in this Agreement to the contrary,
Cryovac, Inc., and Sealed Air Corporation as guarantor, shall have a right of
setoff or reduction against, the payments and transfers required by paragraph
II(a) of this Agreement or otherwise for, and upon the payment by any of the
Released Parties of, the amount of any Indemnified Taxes or any obligation of
any of the Debtors or the 524(g) Trusts set forth or referred to in this
Agreement, including, without limitation, any Indemnity Obligation required to
be provided in the Confirmation Order and Chapter 11 Plan that any of the
Debtors has failed to pay to the Released Parties.
k. Each of Sealed Air Corporation, Cryovac, Inc., and the Plaintiffs
(upon court approval) represents and warrants, as to itself, that this
Agreement has been duly authorized, and executed and delivered, constitutes
the valid and binding obligation of such party, enforceable in accordance with
its terms, except as the enforcement thereof may be limited by bankruptcy,
insolvency (including, without limitation, all laws relating to fraudulent
transfers), reorganization, moratorium or other similar laws relating to or
affecting enforcement of creditors' rights generally, or by general principles
of equity (regardless of whether enforcement is considered in a proceeding in
equity).
III. Anti-Dilution
-------------
a. In the event Sealed Air Corporation should at any time after the
date of this Agreement but prior to the Effective Date fix a record date for
(i) the effectuation of a split or subdivision of the outstanding shares of
Sealed Air Common Stock, or (ii) the payment of a dividend or making of a
distribution on Sealed Air Common Stock in additional shares of Sealed Air
Common Stock, then as of such record date, the number of Settlement Shares to
be transferred by Cryovac, Inc. on the Effective Date shall be increased in
proportion to the increase in the aggregate number of shares of Sealed Air
Common Stock outstanding immediately following such action.
b. If the number of shares of Sealed Air Common Stock outstanding
after the date of this Agreement but prior to the Effective Date is decreased
by a combination of the outstanding shares of Sealed Air Common Stock or a
reverse stock split, then following the record date for such combination or
reverse stock split, the number of Settlement Shares transferable by Cryovac,
Inc. upon the Effective Date shall be decreased in proportion to the decrease
in the aggregate number of shares of Sealed Air Common Stock outstanding
immediately following such action.
c. In the event Sealed Air Corporation, after the date of this
Agreement but prior to the Effective Date, declares a distribution payable to
all holders of Sealed Air Common Stock in shares of capital stock of Sealed
Air Corporation or its subsidiaries (other than Sealed Air Common Stock), or
evidences of its indebtedness or other assets (excluding quarterly cash
dividends) or options or rights not referred to in paragraph III(a) above,
then in each such case, on the Effective Date, holders of Settlement Shares
shall be entitled to any such distribution as if the Effective Date had
occurred immediately prior to the record date fixed for the determination of
the holders of Sealed Air Common Stock entitled to such distribution.
d. In case of any reclassification of the Sealed Air Common Stock,
any consolidation of Sealed Air Corporation with another entity, or merger of
another entity into Sealed Air Corporation (other than a merger that does not
result in any reclassification, conversion, exchange, or cancellation of
outstanding shares of Sealed Air Common Stock), or Sealed Air Corporation into
another entity, any sale or transfer of all or substantially all of the assets
of Sealed Air Corporation or any compulsory share exchange pursuant to such
share exchange, the Sealed Air Common Stock is converted into other
securities, cash, or property, then lawful provision shall be made as part of
the terms of such transaction, whereby on the Effective Date, holders of
Settlement Shares shall be entitled to receive from Cryovac, Inc. the kind and
amount of securities, cash, and other property receivable upon the
reclassification, consolidation, merger, sale, transfer, or share exchange as
if the Effective Date had occurred immediately prior to the reclassification,
consolidation, merger, sale, transfer or exchange. The provisions of this
paragraph III(d) shall similarly apply to successive reclassifications,
consolidations, mergers, sales, transfers, or share exchanges.
IV. Investment Representations
--------------------------
a. Each of the Plaintiffs, and the Confirmation Order shall expressly
provide that each of the Debtors, acknowledges and agrees with Sealed Air
Corporation that the Settlement Shares have not been and, upon delivery as
provided in (ii) of the first sentence of paragraph II(a) of this Agreement,
will not be registered under the Securities Act of 1933, as amended (the
"Securities Act"), and that the certificates for the Settlement Shares will
bear a legend to that effect. Each of the Plaintiffs, and the Confirmation
Order shall expressly provide that each of the Debtors, also understands that
any transfer of Settlement Shares to the 524(g) Trusts or Grace Specialty is
being made pursuant to an exemption from registration contained in the
Securities Act, based in part upon their respective representations contained
in this Agreement.
b. The Confirmation Order shall expressly provide that, upon any
transfer of the Settlement Shares to the 524(g) Trusts or Grace Specialty, the
trustee(s) of each such 524(g) Trust or Grace Specialty, as applicable, shall
represent and warrant, and agree on behalf of the 524(g) Trust or Grace
Specialty with Sealed Air Corporation, that: (i) the 524(g) Trust or Grace
Specialty, as applicable, is acquiring the Settlement Shares for its own
account for investment and not with a view toward distribution in a manner
which would violate the Securities Act; and (ii) the 524(g) Trust or Grace
Specialty, as applicable, and its respective transferees will comply with all
filing and other reporting obligations under all applicable laws which shall
be applicable to such 524(g) Trust or Grace Specialty with respect to the
Settlement Shares.
c. Upon delivery of the Settlement Shares, Cryovac, Inc. and Sealed
Air Corporation shall represent and warrant to the Plaintiffs and the Debtors
(and deliver a certification to that effect upon the transfer of the
Settlement Shares to the 524(g) Trusts or Grace Specialty) that all
adjustments to the Settlement Shares have been made in compliance with the
Anti-Dilution provisions of this Agreement.
V. Covenant Not to Sue and Tolling
-------------------------------
a. Subject to paragraph V(c) of this Agreement, unless ordered
otherwise by this Court, none of the Plaintiffs, and any order of the Court
approving this Agreement shall provide that none of the Debtors, shall sue or
prosecute, institute or cooperate in the institution, commencement, filing, or
prosecution of any suit, administrative proceeding, demand, claim or cause of
action, whether asserted individually or derivatively against any of the
Released Parties for any Asbestos-Related Claims, pending confirmation of a
Chapter 11 Plan consistent with the terms of this Agreement. The Final Order
approving this Agreement shall provide that the Debtors are bound by the terms
of this paragraph.
b. (i) In the event that the payment and transfer obligations of
Cryovac, Inc. set forth in paragraph II(a) of this Agreement are not
satisfied, the Plaintiffs (but not Sealed Air Corporation or Cryovac, Inc.)
shall have the option jointly to terminate this Agreement by providing written
notice thereof to Sealed Air Corporation and Cryovac, Inc. (ii) Upon the
occurrence of a Bankruptcy Termination Event, before the payment and transfer
obligations of Cryovac, Inc. set forth in paragraph II(a) of this Agreement
have been completely performed, the Plaintiffs may seek relief from the
automatic stay to reinstitute the Action in the Court and neither Cryovac,
Inc. nor Sealed Air Corporation shall (x) object to such relief being granted,
or (y) seek to enforce the terms of this Agreement against the Debtors'
estate. (iii) In the event the Plaintiffs' obligations set forth in paragraph
II(a) or the provisions of paragraph II(b), (c), or (d), or VI, of this
Agreement are not satisfied, Sealed Air Corporation and Cryovac, Inc. shall
have the option jointly to terminate this Agreement by providing written
notice thereof to the Plaintiffs. (iv) Any termination right exercised
pursuant to this Agreement, other than upon the occurrence of a Bankruptcy
Termination Event, shall become effective on the date (the "Termination Date")
ten days following receipt of a notice of intention to terminate by the party
exercising such termination right to the other parties to this Agreement,
which notice shall specify the reasons for termination; provided, however,
that such notice provided by the Plaintiffs shall not become effective if the
payment and transfer obligations of Cryovac, Inc. set forth in paragraph II(a)
of this Agreement shall have been satisfied prior to the Termination Date.
c. If this Agreement is terminated by any party, then within 120 days
from the Termination Date a proper representative of the Debtors' estate may
seek to have the Court reinstate the Action on the active docket, it being
expressly agreed that the Court is the appropriate venue in all instances,
including, without limitation, upon the occurrence of a Bankruptcy Termination
Event. For purposes of statutes of limitation, statutes of repose, and any
procedural bars to the prosecution of claims, as long as the Court reinstates
the Action, all claims, counterclaims, cross-claims and claims for
contribution or indemnity will be deemed to have been tolled during the time
period between the date of this Agreement and the Termination Date.
VI. Tax Matters
-----------
a. Each of the Plaintiffs shall use its best efforts to, and shall
use its best efforts to cause the Confirmation Order and Chapter 11 Plan
expressly to provide that each of the Debtors shall use its best efforts to,
(i) cause each of the trusts to which all or any portion of the Cryovac Cash
Amount or the Settlement Shares is directly transferred by Cryovac, Inc.
pursuant to paragraph II(a) of this Agreement to qualify, and to maintain its
status, as a Qualified Settlement Fund, and (ii) structure the transactions
contemplated by this Agreement to achieve favorable tax treatment to Cryovac,
Inc. and its Affiliates, as set forth in paragraphs II(a) and (b) of this
Agreement, provided, however, that nothing herein shall in any way be
construed as a representation, warranty, or covenant concerning the treatment
for federal income tax purposes of any transfer by Cryovac, Inc. pursuant to
paragraph II(a) of this Agreement. Without limiting the foregoing, each of the
Plaintiffs shall use its best efforts to, and shall use its best efforts to
cause the Confirmation Order and Chapter 11 Plan expressly to provide that
each of the Debtors shall use its best efforts to, cause the constitutive
document(s) of each of the trusts to which all or any portion of the Cryovac
Cash Amount or the Settlement Shares is directly transferred pursuant to
paragraph II(a) of this Agreement to contain provisions, reasonably
satisfactory to Cryovac, Inc., qualifying and maintaining its status as a
Qualified Settlement Fund, and providing that Cryovac, Inc. or its designee
shall be a Transferor to each such trust. Each of the Plaintiffs shall, and
shall use its best efforts to cause the Confirmation Order and Chapter 11 Plan
expressly to provide that each of the Debtors shall (i) promptly provide to
Cryovac, Inc. all Material Drafts of each Trust Document (but excluding or
redacting the claims resolution procedures), provided, however, that any
Plaintiff or Debtor shall not be required to provide any draft of a Trust
Document that such Plaintiff or Debtor, as the case may be, does not have in
its possession, custody, or control, and provided, further, that Cryovac, Inc.
shall keep any such Material Draft confidential and shall disclose any such
Material Draft only to Sealed Air Corporation, and officers, employees, and
advisors of Cryovac, Inc., Sealed Air Corporation, or its Affiliates, and only
after such Person agrees to keep such Material Draft confidential, and (ii)
incorporate promptly (if such party is the party drafting such Trust
Document), or if otherwise, urge the party drafting such Trust Document
promptly to incorporate, into any such document each provision with respect to
the subject matter set forth or referred to in paragraphs II(c)(ix), (x), and
(xi), and VI(g), and clauses (i)(A) through (D) of paragraph VI(c), of this
Agreement that are reasonably requested by Cryovac, Inc. Notwithstanding
anything to the contrary contained in the immediately preceding sentence,
Cryovac, Inc. and officers, employees, advisors and other agents of Cryovac,
Inc., Sealed Air Corporation, or its Affiliates may disclose to any and all
Persons, without limitation of any kind, the tax treatment and any facts that
may be relevant to the tax structure of the transactions contemplated by this
Agreement.
b. Each of the Plaintiffs shall, and shall use its best efforts to
require the Confirmation Order and Chapter 11 Plan expressly to provide that
each of the Debtors and the Non-Debtor Affiliates shall, (i) take all Defined
Actions required to be taken pursuant to, or that are reasonably requested by
Sealed Air Corporation and consistent with the provisions of, paragraphs
II(c)(ix), (x), or (xi), or VI(g), of this Agreement and (ii) be prohibited
from taking any Defined Action prohibited from being taken pursuant to, or
that is inconsistent with the provisions of, paragraphs II(c)(ix), (x), or
(xi), or VI(g), of this Agreement, provided, however, that a Person shall not
be required to take, or be prohibited from taking, as the case may be, a
Defined Action as required pursuant to this sentence if each of the following
four requirements has been previously satisfied (I) such Person has fully
performed all of its obligations set forth in paragraph VI(f) of this
Agreement, (II) such Person has received a Contrary Opinion with respect to
such Defined Action required or prohibited pursuant to this paragraph VI(b),
(III) such Person has provided a copy of such Contrary Opinion to Sealed Air
Corporation, and (IV) within forty-five days of the receipt by Sealed Air
Corporation of such Contrary Opinion, Sealed Air Corporation has not provided
such Person with a Sealed Air Opinion. Each of the Plaintiffs shall use its
best efforts, and shall use its best efforts to cause the Confirmation Order
and Chapter 11 Plan expressly to provide that each of the Debtors shall use
its best efforts, not to make any statement in a court document filed in the
Debtors' chapter 11 cases or in any oral statement to the court in the
Debtors' chapter 11 cases that is prohibited by, or inconsistent with the
provisions of, paragraphs II(c)(ix), (x), or (xi), or VI(g), of this
Agreement, provided, however, that a Person shall not be required to take, or
be prohibited from taking, as the case may be, a Defined Action as required
pursuant to this sentence if each of the following four requirements has been
previously satisfied (I) such Person has fully performed all of its
obligations set forth in paragraph VI(f) of this Agreement, (II) such Person
has received a Contrary Opinion with respect to such Defined Action required
or prohibited pursuant to this sentence, (III) such Person has provided a copy
of such Contrary Opinion to Sealed Air Corporation, and (IV) within forty-five
days of the receipt by Sealed Air Corporation of such Contrary Opinion, Sealed
Air Corporation has not provided such Person with a Sealed Air Opinion. Each
of the Plaintiffs shall use its best efforts to require the Confirmation Order
and Chapter 11 Plan expressly to provide that each of the Debtors shall cause
each of the Non-Debtor Affiliates to perform and satisfy fully all
obligations, covenants, and agreements of such Non-Debtor Affiliate set forth
or referred to in this Agreement, including, without limitation, any such
obligation, covenant, or agreement of any Non-Debtor Affiliate set forth in
the Chapter 11 Plan or Confirmation Order.
c. Each of the Plaintiffs shall use its best efforts to require the
Confirmation Order and Chapter 11 Plan expressly to provide that (i) each of
the Debtors and their Affiliates shall promptly notify Cryovac, Inc. and
Sealed Air Corporation upon receipt by any Debtor or any Affiliate of any
Debtor of any notice of any pending or threatened audit or assessment, suit,
litigation, proposed adjustment, deficiency, dispute, administrative or
judicial proceeding or other similar Claim involving any Debtor or any
Affiliate of any Debtor from any Tax authority or any other Person challenging
(A) the qualification of any Cryovac 524(g) Trust as a Qualified Settlement
Fund, (B) the qualification of Cryovac, Inc. as a Transferor to any Cryovac
524(g) Trust, (C) the payment by Cryovac, Inc. to one or more 524(g) Trusts
pursuant to paragraph II(a) of this Agreement as a direct payment by Cryovac,
Inc. to such 524(g) Trusts for Asbestos Claims that constitutes an ordinary
and necessary expense of Cryovac, Inc., and (D) the payment, if any, by
Cryovac, Inc. to Grace Specialty pursuant to paragraph II(a) of this Agreement
as an ordinary and necessary expense of Cryovac, Inc. or as income of Grace
Specialty (any such audit or assessment, suit, litigation, proposed
adjustment, deficiency, dispute, administrative or judicial proceeding or
other similar Claim, a "Tax Claim"), (ii) Cryovac, Inc. and Sealed Air
Corporation shall be entitled to participate at their expense in the defense
or prosecution of any Tax Claim (including to participate in all discussions
with the Tax authorities regarding such Tax Claims and to be allowed to
provide affirmative suggestions or comments with respect to any written
submissions or communications to the Tax authorities regarding such Tax
Claims, which comments and suggestions shall be incorporated into such written
submissions or communications with the consent of the Debtors, such consent
not to be unreasonably withheld), and the Debtors and their Affiliates shall
consult with Cryovac, Inc. and Sealed Air Corporation in connection with the
defense or prosecution of any such Tax Claim and provide such cooperation and
information as Cryovac, Inc. and Sealed Air Corporation shall reasonably
request with respect to any such Tax Claim, (iii) each of the Debtors and its
Affiliates shall agree to use its best efforts to attempt to sever any Tax
Claim from other issues raised in any audit or assessment, suit, litigation,
proposed adjustment, deficiency, dispute, administrative or judicial
proceeding or other similar Claim, (iv) in furtherance of the obligations of
the Debtors set forth in this paragraph VI(d), W.R. Grace & Co.-Conn. and W.R.
Grace & Co. shall, and shall instruct their respective Chief Executive
Officer, Chief Financial Officer, and Director of Taxes, and shall cause each
of their Affiliates, to (A) deliver, promptly after the receipt of any
document received from the IRS relating to a Tax Claim, a copy of such
document to Cryovac, Inc. and Sealed Air Corporation, (B) deliver to Cryovac,
Inc. and Sealed Air Corporation any document delivered to the IRS with respect
to a Tax Claim promptly after such document is delivered to the IRS, provided,
however, that, if such document was prepared in response to a request by the
IRS, then prior to the delivery of such document to the IRS, Cryovac, Inc. and
Sealed Air Corporation shall be allowed to provide affirmative suggestions or
comments with respect to any such document, as provided in paragraph VI(c)(ii)
of this Agreement, (C) provide Cryovac, Inc. and Sealed Air Corporation, at
least five days prior to any meeting or conference (whether in person or by
teleconference) scheduled with the IRS during which a Tax Claim may be
discussed, with written notice of such scheduled meeting or conference, and an
opportunity to attend the portions of such meeting or conference during which
any Tax Claim is discussed, and (D) provide Cryovac, Inc. and Sealed Air
Corporation with cooperation and information reasonably requested by Cryovac,
Inc. or Sealed Air Corporation in connection with any Tax Claim, including, at
Cryovac, Inc.'s or Sealed Air Corporation's request, status updates with
respect to all Tax Claims, (v) any document to be provided by the Debtors to
Cryovac, Inc. or Sealed Air Corporation in furtherance of the obligations set
forth in this paragraph VI(c) may be redacted by the Debtors to exclude
information not pertinent to the Tax Claim and (vi) unless otherwise required
by a Final Determination, none of the Debtors or any of their Affiliates shall
settle or otherwise dispose of any Tax Claim.
d. The obligations of each Plaintiff contained in paragraphs
II(c)(ix), (x), and (xi), and VI(a) and (b) of this Agreement shall survive
until such Plaintiff has ceased to exist.
e. Each of the Plaintiffs shall use its best efforts to cause the
Confirmation Order and Chapter 11 Plan expressly to provide an acknowledgment
and agreement of each of the Debtors that (i) to the extent that any of the
Debtors are required, pursuant to generally accepted accounting principles, to
accrue a liability for asbestos which liabilities are satisfied by Cryovac,
Inc. by a transfer made by Cryovac, Inc. directly to the Cryovac 524(g) Trusts
pursuant to this Agreement and such Debtor is required pursuant to generally
accepted accounting principles to reverse such accrual, to the extent that
there is more than one methodology under generally accepted accounting
principles pursuant to which the Debtors are allowed to reverse any such
accrual, such Debtor shall adopt the methodology, if any, not inconsistent
with the provisions of paragraphs VI(b) and VI(g) of this Agreement, (ii) any
payment or transfer by Cryovac, Inc. directly to a 524(g) Trust shall not be
treated, for financial accounting purposes, as resulting in an expense or
deduction of any Debtor or Non-Debtor Affiliate and (iii) to the extent that
any payment or transfer by Cryovac, Inc. directly to a Cryovac 524(g) Trust
results, for financial accounting purposes, in income to any Debtor, Debtors
shall treat such income as income from the cancellation of indebtedness or
liabilities of the Debtors. Sealed Air Corporation and Cryovac, Inc.
acknowledge and agree that the obligation of the Debtors to reverse any
accrual referred to in paragraph VI(e)(i) of this Agreement shall not be a
breach of such Debtor's obligations set forth or referred to in this
Agreement.
f. If any of the Plaintiffs, and each of the Plaintiffs shall use its
best efforts to require the Confirmation Order and Chapter 11 Plan expressly
to provide that if, any of the Debtors, the Non-Debtor Affiliates, or the
Cryovac 524(g) Trusts, has determined that an issue (a "Paragraph VI(f)
Issue") may exist with respect to its taking, or the failure to take, a
Defined Action as required pursuant to paragraph II(c)(ix), (x), or (xi), or
VI(b) or VI(g), of this Agreement, then, prior to delivering a Contrary
Opinion to Sealed Air Corporation with respect to such Defined Action in
accordance with the provisos set forth in paragraph II(c)(ix), (x), or (xi),
VI(b) or VI(g) of this Agreement, as the case may be, (i) such Person shall
provide to Sealed Air Corporation, as promptly as practicable, a written
notice identifying such Defined Action and describing in detail the Paragraph
VI(f) Issue and (ii) such Person shall, and shall cause its advisors
(including accountants and tax attorneys, as the case may be) to, and Sealed
Air Corporation shall, consult and act in good faith to determine and resolve
(A) if such issue relates to a Tax issue, whether, as a result of a Change in
Circumstances, there is no "reasonable basis", as defined in section 6662 of
the Internal Revenue Code (or successor provision thereof ), for the taking
of, or the failure to take, such Defined Action by such Person or (B) if such
issue relates to an accounting issue, whether, as a result of a Change in
Circumstances, the taking, or the failure to take, such Defined Action is
inconsistent with generally accepted accounting principles.
g. Each of the Plaintiffs shall use its best efforts to require the
Confirmation Order and Chapter 11 Plan expressly to provide that:
(i) unless otherwise required by a Final Determination, the Debtors
and the Non-Debtor Affiliates (A) shall file all Tax Returns required
to be filed by such Person, if any, consistent with the provisions of
paragraph II(c)(ix) of this Agreement and shall take all other
Defined Actions that are reasonably requested by Sealed Air
Corporation and consistent with the provisions of paragraph II(c)(ix)
of this Agreement and (B) shall be prohibited from taking any Defined
Action that may result in the disqualification of any Cryovac 524(g)
Trust as a Qualified Settlement Fund or be inconsistent with Cryovac,
Inc. being treated as a Transferor to each Cryovac 524(g) Trust of
the cash and Settlement Shares transferred by Cryovac, Inc. directly
to such Cryovac 524(g) Trust or each Cryovac 524(g) Trust
constituting a Qualified Settlement Fund, provided, however, that a
Person shall not be required to take, or be prohibited from taking,
as the case may be, a Defined Action as required pursuant to this
paragraph VI(g)(i) if each of the following four requirements has
been previously satisfied (I) such Person has fully performed all of
its obligations set forth in paragraph VI(f) of this Agreement, (II)
such Person has received a Contrary Opinion with respect to such
Defined Action required or prohibited pursuant to this paragraph
VI(g)(i), (III) such Person has provided a copy of such Contrary
Opinion to Sealed Air Corporation, and (IV) within forty- five days
of the receipt by Sealed Air Corporation of such Contrary Opinion,
Sealed Air Corporation has not provided such Person with a Sealed Air
Opinion;
(ii) if one or more Cryovac 524(g) Trusts is established, then unless
otherwise required by a Final Determination, the Debtors and the
Non-Debtor Affiliates shall treat for all Tax purposes any and all
payments by Cryovac, Inc. directly to the Cryovac 524(g) Trusts
pursuant to paragraph II(a) of this Agreement as a direct payment by
Cryovac, Inc. to the Cryovac 524(g) Trusts for Asbestos Claims that
constitutes an ordinary and necessary expense of Cryovac, Inc., and
the Debtors and Non-Debtor Affiliates (A) for financial accounting or
any other regulatory purpose, shall be prohibited from treating any
payment by Cryovac, Inc. directly to a Cryovac 524(g) Trust as a
payment by Cryovac, Inc. to any of the Debtors or Non-Debtor
Affiliates, or as a payment by any Debtor or Non-Debtor Affiliate to
any Person (including any 524(g) Trust) (or treating such payment as,
or resulting in, an expense or deduction of any Debtor or Non-Debtor
Affiliate), (B) for Tax purposes, shall be prohibited from claiming
that any payment by Cryovac, Inc. directly to a Cryovac 524(g) Trust
results in or gives rise (directly or indirectly) to the accrual or
allowance of a deduction or expense, or income to, or any other
transfer of any type to, any Debtor or Non-Debtor Affiliate, (C)
shall take all Defined Actions that are reasonably requested by
Sealed Air Corporation and consistent with the provisions of this
paragraph VI(g)(ii), (D) shall not take any position inconsistent
with the foregoing on any Tax Return or with any Tax authority, and
(E) shall not make any statement in any public or regulatory filing
or release or otherwise, or take any other Defined Action, that is
inconsistent with the obligations of such Person pursuant to this
paragraph VI(g)(ii); provided, however, that a Person shall not be
required to take, or be prohibited from taking, as the case may be, a
Defined Action as required pursuant to this paragraph VI(g)(ii) if
each of the following four requirements has been previously satisfied
(I) such Person has fully performed all of its obligations set forth
in paragraph VI(f) of this Agreement, (II) such Person has received a
Contrary Opinion with respect to such Defined Action required or
prohibited pursuant to this paragraph VI(g)(ii), (III) such Person
has provided a copy of such Contrary Opinion to Sealed Air
Corporation, and (IV) within forty-five days of the receipt by Sealed
Air Corporation of such Contrary Opinion, Sealed Air Corporation has
not provided such Person with a Sealed Air Opinion; and
(iii) unless otherwise required by a Final Determination, the Debtors
and the Non-Debtor Affiliates shall treat for all Tax purposes all
payments, if any, by Cryovac, Inc. to Grace Specialty pursuant to
paragraph II(a) of this Agreement as ordinary income of Grace
Specialty, and the Debtors and the Non-Debtor Affiliates (A) shall
file all Tax Returns required to be filed by such Person, if any,
consistent with the provisions of this paragraph VI(g)(iii) and shall
take all other Defined Actions that are reasonably requested by
Sealed Air Corporation and consistent with the provisions of this
paragraph VI(g)(iii) and (B) shall be prohibited from taking any
Defined Action that is inconsistent with the foregoing provisions of
this paragraph VI(g)(iii) or that is inconsistent with any such
payment being treated as an ordinary and necessary expense incurred
by Cryovac, Inc.; provided, however, that a Person shall not be
required to take, or be prohibited from taking, as the case may be, a
Defined Action as required pursuant to this paragraph VI(g)(iii) if
each of the following four requirements has been previously satisfied
(I) such Person has fully performed all of its obligations set forth
in paragraph VI(f) of this Agreement, (II) such Person has received a
Contrary Opinion with respect to such Defined Action required or
prohibited pursuant to this paragraph VI(g)(iii), (III) such Person
has provided a copy of such Contrary Opinion to Sealed Air
Corporation, and (IV) within forty-five days of the receipt by Sealed
Air Corporation of such Contrary Opinion, Sealed Air Corporation has
not provided such Person with a Sealed Air Opinion.
h. The Debtors may prepare and execute (but not file with the IRS or
other governmental authority, which filing shall be effected only by
Cryovac, Inc. pursuant to and in accordance with this Agreement) a
Protective Claim (a "Grace Protective Claim") for the taxable year of
the Debtors in which the payments and transfers provided in paragraph
II(a) of this Agreement (the "Transfer") are made, or for any other
prior (solely with respect to a carryback from the taxable year of
the Transfer) or subsequent taxable year in which the Tax Benefits
realized as a result of such Transfer may be claimed by the Debtors
(any such taxable year, a "Relevant Tax Year"), and require Cryovac,
Inc. to file such Grace Protective Claim with the IRS or other
governmental authority for and on behalf of the Debtors, provided,
however, that a Grace Protective Claim shall not be required to be
filed by Cryovac, Inc. at any time prior to 15 days before the
expiration (taking into account all extensions thereof) of the
applicable statute of limitations for the Debtors to file an amended
return ("SOL") for the Relevant Tax Year, and provided, further,
that, notwithstanding anything to the contrary set forth in this
paragraph VI(h), the Debtors may prepare and execute a Grace
Protective Claim, and require Cryovac, Inc. to file such Grace
Protective Claim with the IRS or other governmental authority for a
Relevant Tax Year, only if each of the following requirements has
been previously satisfied:
(i) (A) the Debtors have granted each extension (and each further
extension) to the applicable SOL for such Relevant Tax Year that has
been requested by the IRS; (B) at the time of each such request by
the IRS referred to in this paragraph VI(h)(i), above, to extend (or
further extend) the applicable SOL for such Relevant Tax Year, the
Debtors shall have used their best efforts to extend (and cause the
IRS to agree to extend) such SOL for a period of two (2) years or
longer; (C) in the event that the IRS has not requested the Debtors
to extend (or further extend) the applicable SOL for such Relevant
Tax Year prior to 180 days prior to the end of such SOL, the Debtors
shall have used their best efforts to extend (and cause the IRS
to agree to extend) such SOL for a period of two (2) years or longer,
and (D) the Debtors shall have provided to Cryovac, Inc. a written
statement by their Chief Financial Officer that each of the
requirements set forth immediately above in paragraphs VI(h)(i)(A),
(B) and (C) of this Agreement has been satisfied in all respects; and
(ii) each of the Confirmation Order and the Chapter 11 Plan expressly
provide the provisions of this paragraph VI(h) in its entirety, the
provisions of paragraphs VI(i) through VI(l) set forth below in their
entirety, and that: (A) in addition to the obligation of Cryovac,
Inc. to file a Grace Protective Claim if required by the Debtors in
accordance with and subject to the conditions set forth in this
paragraph VI(h), Sealed Air Corporation may file a Grace Protective
Claim with the IRS or other taxing authority for a Relevant Tax Year
at its election, and in connection therewith, the Debtors shall
prepare and execute such Grace Protective Claim; (B) the Debtors
shall pay to Cryovac, Inc. in immediately available funds fifty (50)
percent of the amount of any Tax Benefit realized as a result of the
Transfer no later than ten (10) days after such Tax Benefit has been
deemed to have been Actually Realized pursuant to this paragraph
VI(h); (C) if requested by Sealed Air Corporation, the Debtors shall
use their best efforts to extend (and cause the IRS to agree to
extend) the applicable SOL for any Relevant Tax Year; (D) other than
any obligation of Cryovac, Inc. expressly set forth in paragraphs
VI(h) through VI(l) of this Agreement, no obligations relating to the
subject matter set forth in paragraphs VI(h) through (l) shall be
undertaken or deemed to be undertaken by Cryovac, Inc. or any of its
affiliates pursuant to paragraphs VI(h) through VI(l) of this
Agreement or otherwise, and (E) the language to be included in Part
II of Form 1120X (or applicable section of any similar state or local
tax form) of a Grace Protective Claim shall include the language set
forth on Exhibit 7 and only such other language as may be mutually
agreed to by the Debtors and Cryovac, Inc.
For purposes of this Agreement, "Tax Benefit" shall mean the amount of any
reduction of the actual Tax liability (after giving effect to any alternative
minimum or similar Tax) of the Debtors to the appropriate governmental
authority for a taxable year as a result of the Transfer (including, without
limitation, as a result of a deduction, loss, credit, or exclusion, whether
available in the current taxable year, as an adjustment to the taxable income
in any other taxable year or as a carryforward or carryback, as applicable, or
as an offset or reduction to any assessment), increased by any interest (on an
after-Tax basis) received from such governmental authority relating to such
reduction in Tax liability; it being understood that the amount of such
reduction of the actual Tax liability of the Debtors to the appropriate
governmental authority for a taxable year shall take into account, without
duplication, the amount of any correlative increase in Tax liability of the
Debtors (including as a result of any correlative inclusion, gain, reduction
in a credit, or as an increase to any assessment) for such taxable year as a
result of the Transfer. For purposes of this Agreement, a Tax Benefit shall be
deemed to have been "Actually Realized" at the time any refund of Taxes is
actually received or applied against other Taxes due (including all
assessments by any governmental authority), or at the time of the filing of a
Tax Return (including any Tax Return relating to estimated Taxes) on which a
deduction, loss or other Tax item is applied to reduce the amount of Taxes
which would otherwise be payable. The determination of any Tax Benefit
Actually Realized as a result of the Transfer shall be deemed to have been
utilized based on the order that the deductions, losses, credits, exclusions
or other Tax items realized as a result of the Transfer are considered to be
utilized by the Debtors pursuant to the ordering rules set forth in the
Internal Revenue Code and the Treasury Regulations.
i. The Debtors shall withdraw all Grace Protective Claims upon a
Cryovac Final Determination that the Transfer results in a Tax Benefit to
Cryovac, Inc. (or the affiliated group filing a consolidated Tax Return of
which Sealed Air Corporation is the common parent), and the Debtors shall
provide a written statement to Cryovac, Inc. signed by the Chief Financial
Officer of the Debtors stating that all Grace Protective Claims have been
withdrawn. Cryovac, Inc. shall notify the Debtors to pursue all Grace
Protective Claims upon a Cryovac Final Determination that the Transfer results
in no Tax Benefit to Cryovac, Inc. (or the affiliated group filing a
consolidated Tax Return of which Sealed Air Corporation is the common parent).
Upon receipt of such notice referred to in the preceding sentence or if
otherwise requested in writing by Cryovac, Inc., the Debtors shall use
reasonable best efforts to pursue all Grace Protective Claims, and the Debtors
shall keep Cryovac, Inc. fully informed of, and Cryovac, Inc. shall be
entitled to participate in, all developments with respect to all such Grace
Protective Claims in a manner consistent with the provisions set forth in
paragraphs VI(c)(ii) through (vi) of this Agreement. For purposes of this
Agreement, "Cryovac Final Determination" means the later of (i) sixty days
after the expiration of the statute of limitations (taking into account all
extensions thereof) of the Sealed Air Corporation affiliated group filing a
consolidated Tax Return for the taxable year in which Cryovac, Inc. makes the
Transfer and (ii) if the IRS has challenged the ability of the Sealed Air
Corporation affiliated group filing a consolidated Tax Return to claim any
deduction or loss as a result of the transactions set forth in or contemplated
by this Agreement, sixty days after the final resolution of the last of all
such issues by a decision or other order of a court of competent jurisdiction,
which has become final and unappealable, or the execution by Sealed Air
Corporation of a closing agreement or accepted offer in compromise under
section 7121 or 7122 of the Internal Revenue Code.
j. For purposes of determining any Tax Benefit that is Actually
Realized by the Debtors as a result of the Transfer:
(i) No later than ten (10) days after the Debtors shall have
Actually Realized a Tax Benefit as a result of the Transfer, the Debtors shall
provide Cryovac, Inc. with a detailed statement (the "Tax Benefit Statement")
specifying (A) the amount of the Tax Benefit that was Actually Realized by the
Debtors and any information relevant to the computation thereof (including
full access to any applicable Tax Return, non-proprietary work papers and
other materials and information of the Debtors and their accountants), (B) the
date that such Tax Benefit was Actually Realized, (C) the amount of deduction,
loss, credit or exclusion initially claimed by the Debtors as a result of the
Transfer (the "Initial Tax Benefit Item"), (D) the amount of the Initial Tax
Benefit Item that is utilized by the Debtors to create such Tax Benefit
Actually Realized (including as a result of all or a portion of the Initial
Tax Benefit Item being carried back or forward), and (E) the amount of the
Initial Tax Benefit Item not yet utilized by the Debtors (to create a Tax
Benefit Actually Realized) that will be carried forward.
(ii) No later than 30 days after the Debtors have filed their U.S.
federal consolidated income Tax Return for each year beginning the year that
includes the Tax Benefit Start Date, the Debtors shall deliver to Cryovac,
Inc. an annual statement (the "CFO Annual Statement"), signed by their Chief
Financial Officer under penalties of perjury, that sets forth (A) the amount
of the Tax Benefits Actually Realized, if any, by the Debtors as a result of
the Transfer during the preceding taxable year (including, without limitation,
as a result of an amended return for any taxable year, a loss or deduction
being utilized for such preceding taxable year, a loss or credit carryback
from such preceding taxable year, or a loss or credit carryforward to such
preceding taxable year), (B) the date (or dates) such Tax Benefits were
Actually Realized during such taxable year, (C) the amount of the Initial Tax
Benefit Item, (D) the amount of the Initial Tax Benefit Item that is utilized
by the Debtors to create such Tax Benefit Actually Realized, and (E) the
amount of the Initial Tax Benefit Item not yet utilized by the Debtors (to
create a Tax Benefit Actually Realized) that will be carried forward. The
Debtors shall also provide Cryovac, Inc. with all information relevant to the
computation of such Tax Benefits Actually Realized by the Debtors set forth in
paragraph VI(j)(ii)(A) of this Agreement (including full access to any
applicable Tax Return, the non- proprietary work papers, and other materials
and information of the Debtors and their accountants). For purposes of this
Agreement, "Tax Benefit Start Date" means the date on which the Debtors are
required to pursue all Protective Claims pursuant to the third sentence of
paragraph VI(i) of this Agreement.
(iii) If Cryovac, Inc. disagrees in any respect with the Debtors'
computation of the amount of the Tax Benefit Actually Realized that is set
forth on the Tax Benefit Statement or the CFO Annual Statement, Cryovac, Inc.
may, on or prior to forty-five (45) days after the receipt of either such
statement from the Debtors, deliver a notice to the Debtors setting forth in
reasonable detail the basis for Cryovac, Inc.'s disagreement therewith ("Tax
Benefit Dispute Notice"). If no Tax Benefit Dispute Notice is received by the
Debtors on or prior to the forty-fifth (45th) day after Cryovac, Inc.'s
receipt of the Tax Benefit Statement or the CFO Annual Statement, as the case
may be, from the Debtors, the Tax Benefit Statement or the CFO Annual
Statement, as the case may be, shall be deemed accepted by Cryovac, Inc.
(iv) Within fifteen (15) days after the Debtors' receipt of a Tax
Benefit Dispute Notice, unless the matters in the Tax Benefit Dispute Notice
have otherwise been resolved by mutual agreement of the parties, the Debtors
and Cryovac, Inc. shall jointly select a nationally-recognized independent
certified public accountant (the "Tax Benefit Accountant"); provided, however,
if the Debtors and Cryovac, Inc. are unable to agree upon the Tax Benefit
Accountant within such fifteen (15) day period, then the Debtors and Cryovac,
Inc. shall each select a nationally-recognized independent certified public
accountant which shall then jointly choose the Tax Benefit Accountant within
fifteen (15) days thereafter. The Tax Benefit Accountant shall conduct such
review of the work papers and such other materials and information, and the
Tax Benefit Dispute Notice, and any supporting documentation as the Tax
Benefit Accountant in its sole discretion deems necessary, and the Tax Benefit
Accountant shall conduct such hearings or hear such presentations by the
parties or obtain such other information as the Tax Benefit Accountant in its
sole discretion deems necessary. The Tax Benefit Accountant shall, as promptly
as practicable and in no event later than forty-five (45) days following the
date of its retention, deliver to the Debtors and Cryovac, Inc. a report (the
"Tax Benefit Report") in which the Tax Benefit Accountant shall, after
reviewing disputed items set forth in the Tax Benefit Dispute Notice,
determine what adjustments, if any, should be made to the amount of the Tax
Benefit Actually Realized. The Tax Benefit Report shall set forth, in
reasonable detail, the Tax Benefit Accountant's determination with respect to
the disputed items or amounts specified in the Tax Benefit Dispute Notice, and
the revisions, if any, to be made to the amount of the Tax Benefit Actually
Realized, together with supporting calculations. All fees and expenses
relating to this work of the Tax Benefit Accountant shall be borne equally by
the Debtors and Cryovac, Inc. Absent manifest error, the Tax Benefit Report
shall be final and binding upon the Debtors and Cryovac, Inc., and no party
shall seek further recourse to courts, other arbitral tribunals or otherwise.
The Debtors shall pay to Cryovac, Inc. in immediately available funds no later
than five (5) days after delivery of the Tax Benefit Report to the Debtors and
Cryovac, Inc. the sum of (x) the excess, if any, of fifty (50) percent of the
amount of the Tax Benefit Actually Realized set forth in the Tax Benefit
Report over the amount previously paid, if any, by the Debtors to Cryovac,
Inc. with respect thereto and (y) interest with respect to any such excess, as
provided for in paragraph VI(k) of this Agreement.
(v) If a loss, deduction, credit or exclusion that resulted in Tax
Benefit that was Actually Realized by the Debtors is later denied by a Taxing
authority by (x) a decision, decree or other order by a court of competent
jurisdiction, which has become final and unappealable or (y) any other means
(including a closing agreement or accepted offer in compromise under section
7121 or 7122 of the Internal Revenue Code) if Cryovac, Inc. has consented to
such other means, which consent shall not be unreasonably withheld or delayed,
the Debtors shall provide a written statement, signed under penalties of
perjury by the Chief Financial Officer of the Debtors, that states (A) the
amount of such loss, deduction, credit or exclusion that was denied, (B) the
amount of the Tax Benefits Actually Realized that was initially determined and
paid by the Debtors to Cryovac, Inc. for such taxable period, and (C) the
revised amount of the Tax Benefit Actually Realized for such taxable period
taking into account the denial of such loss, deduction, credit or exclusion.
The Debtors shall also provide to Cryovac, Inc. any information relevant to
the computation of such initial and revised amount of the Tax Benefits
Actually Realized by the Debtors (including full access to any applicable Tax
Return, the non-proprietary work papers, and other materials and information
of the Debtors and their accountants). If Cryovac, Inc. disagrees in any
respect with the Debtors' computation of such revised amount of the Tax
Benefit Actually Realized by the Debtors for such taxable period, the
principles of the dispute resolution mechanism set forth in paragraphs
VI(j)(iii) and VI(j)(iv) shall apply. No later than five (5) days after final
resolution of the amount of the revised Tax Benefits Actually Realized for
such taxable period, Cryovac, Inc. shall pay to the Debtors in immediately
available funds fifty (50) percent of the excess, if any, of the amount of Tax
Benefits Actually Realized that was initially determined for such taxable
period and paid by the Debtors to Cryovac, Inc. over the amount of the Tax
Benefit Actually Realized for such taxable period as revised. Any amount that
is not paid within the period set forth in this paragraph VI(j)(v) shall
accrue interest in accordance with paragraph VI(k) of this Agreement.
k. Notwithstanding anything to the contrary set forth in this
Agreement, any amount of Tax Benefit Actually Realized that is required to be
paid by the Debtors to Cryovac, Inc. pursuant to this Agreement and that is
not paid within the period set forth in paragraph VI(h) of this Agreement
shall accrue interest at the prime rate announced from time to time by Bank of
America, N.A., compounded annually.
l. In the event of a conflict between this Agreement and the 1998 Tax
Sharing Agreement, this Agreement shall govern and control.
VII. General Matters and Reservations
--------------------------------
a. In addition to other conditions set forth in this Agreement, the
obligation of the parties to conclude the proposed settlement set forth in
this Agreement is subject to and contingent upon the entry of a Final Order by
this Court approving this Agreement, pursuant to Rules 2002 and 9019 of the
Federal Rules of Bankruptcy Procedure.
b. This Agreement (as amended, modified, or supplemented) sets forth
the sole and entire agreement among the parties with respect to its subject
matter, and may not be waived, amended, modified, or supplemented except by
written instrument executed by duly authorized representatives of each of the
parties and entitled "Modification of Settlement Agreement and Release." This
Agreement supercedes any prior agreement, understanding, or undertaking
(written or oral) by and among the parties regarding the subject matter of
this Agreement.
c. All parties agree that the terms of this Agreement were drafted
jointly by counsel for the parties following extensive arm's length
negotiations. In the event there arises an ambiguity or question of intent or
interpretation of this Agreement or any provision thereof, the Agreement (and
each of its provisions) shall be construed as if drafted jointly by the
parties and no presumption or burden of proof shall arise favoring or
disfavoring any party by virtue of the authorship of any provision of this
Agreement.
d. 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, and shall not, in any way, define, limit, extend, or otherwise affect
the scope, meaning, intent, or interpretation of this Agreement or any
provision thereof.
e. Without affecting any determination as to the law applicable to
the Action, this Agreement and the rights and obligations of the parties
hereunder shall be governed by and construed in accordance with the laws of
the State of Delaware (without giving effect to its provisions on conflict of
laws).
f. Nothing in this Agreement shall preclude any action to enforce any
of the terms of this Agreement; provided, however, that any such action shall
be brought exclusively in this Court, which shall retain jurisdiction of this
matter and of the parties to this Agreement for the purposes of
enforcing and implementing the terms and conditions of this Agreement and
resolving disputes as to the rights and obligations of the parties under this
Agreement; provided, further, that section 524(g)(2) shall govern jurisdiction
over any proceeding that involves any injunction issued in accordance with
this Agreement under section 524(g) of the Bankruptcy Code. The parties to
this Agreement submit to the jurisdiction of this Court for these purposes.
g. This Agreement may be executed in any number of identical
counterparts, any of which may contain the signatures of less than all parties
and all of which together shall constitute a single agreement.
h. All parties to this Agreement shall jointly move this Court within
thirty days of its execution for full and complete approval of this Agreement,
and as applicable agree to enter into the Registration Rights Agreement, the
Release, the Indemnity Agreement, and the ancillary documents when and as
contemplated in this Agreement.
i. This Agreement shall be binding upon and inure to the benefit of
each of the Plaintiffs, each of the Released Parties, and any and all of their
respective heirs, legal representatives, administrators, successors and
assigns, provided that (i) neither this Agreement nor any substantial right or
obligation hereunder may be assigned by Sealed Air Corporation or Cryovac,
Inc. without the written consent of the other parties that have signed this
Agreement, which consent shall not be unreasonably withheld and (ii) none of
the Debtors shall transfer or agree to transfer a substantial part of its
assets (in one or a series of transactions, whether or not related) to any
Person or Persons without a prior determination of the Court by Final Order
that at the time of each such transaction such Debtors, collectively with any
such successors who will be jointly and severally liable for the obligations
of such Debtors, will have the ability to pay and satisfy in the ordinary
course of business their respective obligations and liabilities, including,
without limitation, all Indemnified Taxes and all obligations set forth or
referred to in this Agreement, including, without limitation, all such
obligations set forth in the Chapter 11 Plan or Confirmation Order, and
provided, further, that paragraph VII(i)(ii) of this Agreement shall not apply
at any time when the following two conditions in paragraphs VII(i)(ii)(A) and
(B) of this Agreement are both satisfied: (A)(1) as a result of the expiration
of the applicable statutes of limitation, assessment against and collection of
Indemnified Taxes from each of the Released Parties (including assessment and
collection pursuant to section 6901 of the Internal Revenue Code) is barred by
such statutes of limitation and (2) all Indemnified Taxes have been paid by
the Debtors in accordance with the 1998 Tax Sharing Agreement and the Released
Parties have received from the Debtors (or adequate provision satisfactory to
the Released Parties has been made for the payment of) all indemnification and
other payments claimed by the Released Parties against any of the Debtors in
respect of Indemnified Taxes and related matters in accordance with the 1998
Tax Sharing Agreement; and (B) the injunctions required pursuant to paragraph
II(c)(vi) of this Agreement shall be in effect and there shall not be pending
any lawsuit, action or other judicial or administrative proceeding (1)
alleging an Asbestos-Related Claim and seeking to impose liability on one or
more of the Released Parties notwithstanding the existence and continuing
operative effect of such injunctions or (2) challenging in any manner the
continuance and operative effect of such injunctions in respect of the
Released Parties.
j. Without prejudice to any rights or remedies otherwise available to
any party to this Agreement, each party to this Agreement acknowledges that
damages would be an inadequate remedy for any breach of the provisions of this
Agreement and agrees that the obligations under this Agreement shall be
specifically enforceable.
k. All notices and other communication hereunder shall be in writing
and shall be deemed to have been duly given upon receipt if: (i) mailed by
certified or registered mail, return receipt requested, (ii) sent by Federal
Express or other express courier, fee prepaid, (iii) sent via facsimile with
receipt confirmed, or (iv) delivered personally, addressed as follows or to
such other address or addresses of which the respective party shall have
notified the other.
A. If to the Plaintiffs, to:
Official Committee of Asbestos Property Damage Claimants
c/o Bilzin Sumberg Baena Price & Axelrod LLP
200 South Biscayne Boulevard
Suite 2500
Miami, Florida 33131
Attention: Scott L. Baena
Telephone: (305) 350-2403
Facsimile: (305) 374-7593
-and-
Official Committee of Asbestos Personal Injury Claimants
c/o Caplin & Drysdale, Chartered
One Thomas Circle, NW
Washington, D.C. 20005
Attention: Peter V. Lockwood
Telephone: (202) 862-5000
Facsimile: (202) 429-3301
B. If to the Released Parties, to:
Sealed Air Corporation/Cryovac, Inc.
Park 80 East
Saddle Brook, New Jersey 07663
Attention: General Counsel and Secretary
Facsimile: (201) 703-4113
with copies to:
Skadden, Arps, Slate, Meagher & Flom LLP
Four Times Square
New York, New York 10036-6522
Attention: Sheila L. Birnbaum
Telephone: (212) 735-3000
Facsimile: (212) 735-2000
IN WITNESS WHEREOF, the parties have executed this Agreement as of
the date written above.
OFFICIAL COMMITTEE OF ASBESTOS
PERSONAL INJURY CLAIMANTS
By: /s/ Perry Weitz
----------------------------
Print Name: Perry Weitz
Title: Co-Chairman
OFFICIAL COMMITTEE OF ASBESTOS
PROPERTY DAMAGE CLAIMANTS
By: /s/ Daniel A Speights
----------------------------
Print Name: Daniel A Speights
Title: Co-Chairman
SEALED AIR CORPORATION
By: /s/ David H. Kelsey
----------------------------
Print Name: David H. Kelsey
Title: Vice President and Chief
Financial Officer
CRYOVAC, INC.
By: /s/ David H. Kelsey
----------------------------
Print Name: David H. Kelsey
Title: Vice President and Chief
Financial Officer
Exhibit 1: REGISTRATION RIGHTS AGREEMENT
(The remainder of this page has been intentionally left blank.)
REGISTRATION RIGHTS AGREEMENT
-----------------------------
This REGISTRATION RIGHTS AGREEMENT (the "Registration Rights
Agreement") is made and entered into as of __________________, 200__, by and
between SEALED AIR CORPORATION, a Delaware corporation, the Initial Holders
(as defined below), and any other Person who later becomes a party to this
Registration Rights Agreement by executing and delivering a Joinder Agreement
in the form attached as Exhibit A hereto (the "Joinder Agreement"), in
connection with the issuance of 9,000,000 shares of Sealed Air Common Stock
(as defined below), as more fully set forth in the Settlement Agreement (as
defined below).
ARTICLE I
Certain Definitions
-------------------
All capitalized terms not otherwise defined in this Registration
Rights Agreement shall have the meanings ascribed thereto in the Settlement
Agreement. As used in this Registration Rights Agreement, the following terms
shall have the meanings ascribed to them below:
1.1 "Acquisition Blackout Period" shall have the meaning set forth in
Section 2.1(e).
1.2 "Blackout Period" shall have the meaning set forth in Section
2.1(e).
1.3 "Commission" shall mean the Securities and Exchange Commission or
any federal agency at the time administering the Securities Act.
1.4 "Exchange Act" shall mean the Securities Exchange Act of 1934, as
amended, or any federal statute then in effect which has replaced such
statute.
1.5 "Holder" shall mean any Person, including any Initial Holder, who
is a holder of record or beneficial owner of Registrable Securities for so
long as such Person is a holder of record or beneficial owner of any
Registrable Securities.
1.6 "Holder Post-Effective Amendment" shall have the meaning set
forth in Section 2.1(d).
1.7 "Initial Holder" shall mean any Person to whom Cryovac, Inc.
transfers the Settlement Shares on or after the Effective Date.
1.8 "Maximum Blackout Period" shall have the meaning set forth in
Section 2.1(e).
1.9 "Piggyback Registration" shall have the meaning set forth in
Section 2.2(a).
1.10 "Registrable Securities" shall mean the Settlement Shares and
any other securities described in Section 8.1(ii); provided that such
securities shall cease to be Registrable Securities (i) when a registration
statement registering such Registrable Securities under the Securities Act has
been declared or becomes effective and such Registrable Securities have been
sold or otherwise transferred by the Holder thereof pursuant to such effective
registration statement, (ii) when such Registrable Securities are sold
pursuant to Rule 144 or such Registrable Securities are eligible to be sold
pursuant to paragraph (k) of Rule 144, (iii) on and after the date that is two
years after the date that Cryovac, Inc. transfers the Settlement Shares to the
Initial Holders, or (iv) when such Registrable Securities shall cease to be
outstanding.
1.11 "Rule 144" shall mean Rule 144 promulgated under the Securities
Act.
1.12 "Sealed Air Common Stock" shall mean the common stock, par value
$0.10 per share, of Sealed Air Corporation.
1.13 "Securities Act" shall mean the Securities Act of 1933, as
amended, or any federal statute then in effect which has replaced such
statute.
1.14 "Senior Notes" shall have the meaning set forth in Section
2.2(a).
1.15 "Shelf Amendment" shall have the meaning set forth in Section
2.1(e).
1.16 "Shelf Registration Statement" shall have the meaning set forth
in Section 2.1(a).
1.17 "Settlement Agreement" shall mean the Settlement Agreement and
Release, dated as of November 10, 2003, of which this Registration Rights
Agreement is an exhibit.
1.18 "Settlement Shares" shall mean the shares of Sealed Air Common
Stock issued pursuant to the Settlement Agreement, including any additional
securities or securities issued in place of Sealed Air Common Stock upon an
anti-dilution or other adjustment made pursuant to Section III of the
Settlement Agreement.
1.19 "Underwritten Holders" shall have the meaning set forth in
Section 2.1(f).
ARTICLE II
Registration Rights
-------------------
2.1 Shelf Registration.
(a) Subject to Section 2.1(e), following the Effective Date,
Sealed Air Corporation will use reasonable best efforts to prepare and file
with the Commission as soon as reasonably practicable but not later than the
date that is 60 days after the Effective Date, a shelf registration statement
on Form S-3 or any other appropriate form under Rule 415 of the Securities
Act, or any similar rule that may be adopted by the Commission relating to the
offer and sale of all of the Registrable Securities by Holders from time to
time in accordance with the methods of distribution elected by such Holders
and set forth in such shelf registration statement (together with all
amendments and supplements to such registration statement, including
post-effective amendments, in each case including the prospectus contained
therein, all exhibits thereto, and all material incorporated by reference
therein (the "Shelf Registration Statement").
(b) Sealed Air Corporation is obligated to effect one (1) Shelf
Registration Statement. A registration shall not count as the Shelf
Registration Statement until the Commission has declared the registration
statement filed pursuant to Section 2.1(a) effective.
(c) Subject to Section 2.1(e), Sealed Air Corporation will use
reasonable best efforts to file all documents as may be required to cause and
to cause the Shelf Registration Statement to be declared effective by the
Commission as soon as reasonably practicable in order to permit and facilitate
the sale and distribution of the Registrable Securities and to remain
effective for a period ending on the date on which there cease to be any
Registrable Securities, as contemplated by Section 1.10.
(d) Each Holder of Registrable Securities that wishes to sell
Registrable Securities pursuant to the Shelf Registration Statement and the
related prospectus agrees to deliver a notice and questionnaire in the form
attached hereto as Exhibit B (a "Notice and Questionnaire") and such other
information as Sealed Air Corporation may reasonably require, at least ten
(10) business days prior to the intended distribution of such Holder's
Registrable Securities under the Shelf Registration Statement. Notwithstanding
the foregoing, Holders will use reasonable best efforts to deliver a Notice
and Questionnaire to Sealed Air Corporation within 15 days following the
Effective Date or the date that such Holder enters into a Joinder Agreement,
as the case may be. Provided that the Shelf Registration Statement has been
declared effective, Sealed Air Corporation shall, after a Holder has delivered
a Notice and Questionnaire and such other information as Sealed Air
Corporation may reasonably require, (i) if required by applicable law, file
with the Commission a post-effective amendment to the Shelf Registration
Statement (a "Holder Post-Effective Amendment") and/or prepare and, if
required by applicable law, file a supplement to the related prospectus or
amendment to any document incorporated therein by reference or file any other
required document so that such Holder is named as a selling security holder in
the Shelf Registration Statement and the related prospectus in such a manner
as to permit such Holder to deliver such prospectus to the purchaser of the
Registrable Securities in accordance with applicable law and, if Sealed Air
Corporation shall file a Holder Post-Effective Amendment, use reasonable best
efforts to cause such Holder Post-Effective Amendment to be declared effective
under the Act, (ii) provide such Holder with such number of copies of any
documents filed pursuant to the foregoing as the Holder shall reasonably
request, and (iii) notify such Holder after the effectiveness of any post-
effective amendment filed hereunder; provided, however, that, if the Notice
and Questionnaire is delivered during a Blackout Period, Sealed Air
Corporation shall so inform the Holder delivering such Notice and
Questionnaire and shall take the actions set forth in clauses (i), (ii) and
(iii) above upon expiration of the Blackout Period.
(e) Notwithstanding anything to the contrary contained in this
Registration Rights Agreement, Sealed Air Corporation shall have the right to
delay the filing or the effectiveness of the Shelf Registration Statement or
to suspend the right of a Holder to sell Registrable Securities under an
effective Shelf Registration Statement for a period or periods (each, a
"Blackout Period") which in the aggregate do not exceed 120 days in any 12
month period (the "Maximum Blackout Period") in the event that (i) Sealed Air
Corporation would, in accordance with the reasonable written advice of its
counsel, be required to disclose in the prospectus, information not otherwise
required by law to be publicly disclosed, or (ii) in the judgment of the Chief
Executive Officer of Sealed Air Corporation, there is a reasonable likelihood
that such disclosure, or any other action required to be taken in connection
with the prospectus, would materially and adversely affect or interfere with
any material financing, acquisition, merger, joint venture, disposition of
assets (not in the ordinary course of business), corporate reorganization or
other similar material transaction involving Sealed Air Corporation, or (iii)
a change to the Shelf Registration Statement is required so that, as of such
date, the Shelf Registration Statement and prospectus do not contain an untrue
statement of a material fact or omit to state a material fact required to be
stated therein or necessary to make the statements therein not misleading (a
"Shelf Amendment"). Sealed Air Corporation shall give the Holders of
Registrable Securities included in the Shelf Registration Statement written
notice of such determination containing a general statement of the reasons for
such postponement and an approximation of the anticipated delay, which delay
Sealed Air Corporation shall use its reasonable best efforts acting in good
faith to limit to the shortest time practicable; and provided, however, that
the implementation of any Blackout Period shall be done in good faith, and not
for the purpose or intention of impeding any rights of the Holders. Sealed Air
Corporation shall promptly provide written notice to the Holders included in
the Shelf Registration Statement when the Blackout Period has ended.
Notwithstanding anything to the contrary contained in this Section 2.1(e), one
or more Blackout Periods may exceed, in the aggregate, the Maximum Blackout
Period, if the Maximum Blackout Period is exceeded by a Blackout Period in
connection with, arising out of, or resulting from a significant merger,
acquisition or divestiture involving Sealed Air Corporation or any of its
subsidiaries (an "Acquisition Blackout Period"); provided, however, that, if
the Maximum Blackout Period is exceeded as permitted above, Sealed Air
Corporation agrees not to commence any further Blackout Periods during the
12-month period in which the Maximum Blackout Period was exceeded, except for
(1) a Holder Post-Effective Amendment, (2) an Acquisition Blackout Period,
which in no event will commence until the expiration of 60 days following the
last day of the last Blackout Period, or (3) a Blackout Period in reasonable
duration in order to effectuate a required Shelf Amendment.
(f) (i) Any Holder or Holders who together are the beneficial
owners of at least a majority of the then outstanding Registrable Securities
and the reasonably anticipated aggregate price to the public, before deducting
underwriting commissions, of such Registrable Securities would equal or exceed
$75.0 million in the aggregate, may elect to sell such Registrable Securities
under the Shelf Registration Statement in an underwritten offering in
accordance with the conditions set forth in this Section 2.1(f) (the
"Underwritten Holders"). The Underwritten Holders will provide Sealed Air
Corporation with written notice of such proposed underwritten offering and in
such notice designate a representative for the Underwritten Holders. In any
such underwritten offering, the investment banker or bankers and manager or
managers that will administer the offering will be selected by, and the
underwriting arrangements with respect thereto will be approved by the
Underwritten Holders, subject, in each case, to the consent of Sealed Air
Corporation, which consent will not be unreasonably withheld or delayed, and
the respective Holders will be responsible for all underwriting commissions
and discounts with respect to the Registrable Securities sold by such
respective Holders in connection therewith. Sealed Air Corporation shall not
be obligated to arrange for more than one underwritten offering pursuant to
the Shelf Registration Statement. No Holder may participate in such
underwritten offering hereunder unless such Holder (i) agrees to sell the
Holder's Registrable Securities on the basis provided in any underwriting
arrangements approved pursuant hereto, and (ii) completes and executes all
other questionnaires, powers of attorney, indemnities, underwriting agreements
and other documents, including, but not limited to, custody agreements and
lock-up agreements, required under the terms of such underwriting
arrangements, so long as all Holders participating in such underwritten
offering are required to enter into substantially similar custody agreements
or lock-up agreements, as the case may be. Except as otherwise set forth
herein, all decisions relating to such underwritten offering, including
without limitation, the selection of counsel, shall be made by the
Underwritten Holders.
(ii) Sealed Air Corporation shall as soon as reasonably
practical, after receipt of the written notice from the Underwritten Holders
pursuant to Section 2.1(f)(i), give written notice of the intended underwritten
offering to all other Holders that are beneficial owners of at least 1,000
Registrable Securities and, subject to Section 2.1(f)(iii), the Underwritten
Holders shall cause the managing underwriter(s) to include in such underwritten
offering all Registrable Securities requested to be included therein pursuant to
the written requests of such Holders and received by the representative for the
Underwritten Holders within fifteen (15) days after delivery of the written
notice from Sealed Air Corporation. Notwithstanding the foregoing, Sealed Air
Corporation shall not be required to provide the notice required by this Section
2.1(f)(ii) to beneficiaries of any trust, whether or not such beneficiaries are
beneficial owners of Registrable Securities, but only to the trustees of such
trust, as provided in Section 8.4.
(iii) If the managing underwriter(s) for such underwritten
offering advises Sealed Air Corporation and the representative for the
Underwritten Holders that the amount of Registrable Securities requested to be
included therein exceeds the amount of Registrable Securities that can be sold
in such underwritten offering or that the number of shares of Registrable
Securities proposed to be included in any such underwritten offering would
materially and adversely affect the price per share of Sealed Air Common Stock
to be sold in such underwritten offering, the number of Registrable Securities
to be included in such underwritten offering shall be the number of shares of
Registrable Securities which in the opinion of such managing underwriter(s)
can be sold. If the number of shares which can be sold is less than the number
of shares of Registrable Securities requested to be included in such
underwritten offering, the number of shares to be included for each Holder
(including the Underwritten Holders) shall be reduced pro rata on the basis of
the number of shares requested to be registered by such Holders or as such
Holders may otherwise agree.
2.2 Piggyback Registration.
(a) Following the Effective Date, if (i) the number of Registrable
Securities then outstanding is at least one percent (1%) of the outstanding
Sealed Air Common Stock or all of the outstanding Registrable Securities cannot
then be sold at one time under Rule 144, and (ii) Sealed Air Corporation shall
determine to register any shares of Sealed Air Common Stock for its own account
in a primary underwritten offering or for the account of other holders of Sealed
Air Common Stock in a secondary underwritten offering, on any registration form
(other than (i) Form S-4 or (ii) S-8 or (iii) other successor forms, or Form
S-3, or any successor form, with respect to the registration of shares of Sealed
Air Common Stock into which Sealed Air Corporation's 3% Convertible Senior Notes
due 2033 (the "Senior Notes") may be converted so long as no other Sealed Air
Common Stock is registered thereunder) which permits the inclusion of
Registrable Securities held by any Holder (a "Piggyback Registration"), then
Sealed Air Corporation will give each Holder that is a beneficial owner of at
least 1,000 Registrable Securities written notice thereof and, subject to
Section 2.2(c), shall include in such registration all Registrable Securities
requested to be included therein pursuant to the written requests of Holders
received within 15 days after delivery of Sealed Air Corporation's notice;
provided that each such Holder will also provide such additional information as
Sealed Air Corporation may reasonably require, including but not limited to a
Notice and Questionnaire. Notwithstanding the foregoing, Sealed Air Corporation
shall not be obligated to provide the notice required by this Section 2.2 to
beneficiaries of any trust, whether or not such beneficiaries are beneficial
owners of Registrable Securities, but only to the trustees of such trust, as
provided in Section 8.4. Notwithstanding the provisions of this Section 2.2(a),
Sealed Air Corporation shall not be required to include any Registrable
Securities (i) on a registration statement on Form S-3 if the registration
statement solely relates to the issuance and sale by Sealed Air Corporation from
time to time of securities of Sealed Air Corporation or any of its subsidiaries
pursuant to Rule 415 of the Securities Act, or (ii) on a registration statement
in connection with the reclassification, recapitalization, consolidation or an
exchange offer of any Sealed Air Corporation securities.
(b) The right of any Holder to participate in a Piggyback
Registration shall be conditioned upon such Holder's participation in such
underwriting in accordance with the terms and conditions thereof. Sealed Air
Corporation shall have the right to select the managing underwriter(s) for any
underwritten Piggyback Registration. All Holders proposing to distribute their
Registrable Securities through such underwriting shall (together with Sealed Air
Corporation) enter into an underwriting agreement in customary form, and such
other agreements, including, but not limited to, custody agreements and lock-up
agreements, requested by the managing underwriters, so long as all Holders
participating in such underwritten offering are required to enter into
substantially similar custody agreements or lock-up agreements, as the case may
be.
(c) If the managing underwriter(s) for such underwritten offering
advises Sealed Air Corporation that the amount of securities requested to be
included therein exceeds the amount of securities that can be sold in such
offering or that the number of shares of Registrable Securities proposed to be
included in any such registration would materially and adversely affect the
price per share of Sealed Air Common Stock to be sold in such offering, Sealed
Air Corporation shall include in such registration only the number of shares of
Registrable Securities which in the opinion of such managing underwriter(s) can
be sold. If the number of shares which can be sold is less than the number of
shares of Registrable Securities requested to be registered, any securities to
be sold by Sealed Air Corporation or other holders of Sealed Air Corporation's
securities which have initiated such offering shall have priority over any
Registrable Securities held by Holders, and the number of shares to be included
for each Holder and other holders of Sealed Air Corporation's securities that
did not initiate the offering shall be reduced pro rata on the basis of the
number of shares requested to be registered by such holders or as such holders
may otherwise agree.
(d) Notwithstanding the provisions of this Section 2.2, Sealed Air
Corporation shall have the right at any time after it shall have given written
notice to the Holders pursuant to Section 2.2 (irrespective of whether a written
request for inclusion of any such securities shall have been made) to elect not
to file any such proposed registration statement, to withdraw the same at any
time, or to suspend the right of a Holder to sell Registrable Securities under
an effective Piggyback Registration; provided, however, that it is suspending
the sale of all securities under such Piggyback Registration.
2.3 Registration Procedures. In the case of each registration effected
by Sealed Air Corporation pursuant to this Article II involving the registration
of Registrable Securities, Sealed Air Corporation will keep each Holder included
in such registration (provided, however, that Sealed Air Corporation shall not
be obligated to provide any notice required by this Section 2.3 to beneficiaries
of any trust, whether or not such beneficiaries are beneficial owners of
Registrable Securities, but only to the trustees of such trust, as provided in
Section 8.4, unless such beneficiary is specifically named in the registration
statement) advised as to the initiation of such registration and as to the
completion thereof. At its expense, Sealed Air Corporation will use reasonable
best efforts to:
(a) subject to Sections 2.1(e) and 2.2(d), prepare and file any
such registration statement and other documents with the Commission and cause
such registration statement to be declared effective as soon as reasonably
practicable by the Commission; provided, however, that, before filing such
registration statement, Sealed Air Corporation will furnish to one counsel
selected by the Holders of a majority of Registrable Securities included in such
registration statement copies of such registration statement, which registration
statement will be subject to the reasonable review and comment of such counsel;
(b) prepare and file with the Commission such amendments and
supplements to such registration statement and the prospectus included therein
(including post- effective amendments, prospectus supplements and pricing
supplements) as may be necessary, including, in the case of the Shelf
Registration Statement, such amendments and supplements as are necessary to
effect and maintain the effectiveness of such Shelf Registration Statement for
the period specified in Section 2.1(c) and to effectuate the underwritten
offering pursuant to Section 2.1(f); provided, however, that before filing such
amendments or supplements, Sealed Air Corporation will furnish to one counsel
selected by the Holders of a majority of Registrable Securities included in such
Shelf Registration Statement copies of such amendments and supplements (but not
including any documents incorporated by reference into the Shelf Registration
Statement) proposed to be filed, which amendments and supplements will be
subject to the reasonable review and comment of such counsel;
(c) (i) register or qualify the Registrable Securities to be
included in such registration statement under such state securities laws or blue
sky laws of such jurisdictions as any Holder of such Registrable Securities and
each placement or sales agent, if any, therefor and underwriter, if any, thereof
shall reasonably request; provided, however, that Sealed Air Corporation shall
not be required to take any action to have the Registrable Securities registered
with or approved by any governmental agency or authority outside of the United
States, and (ii) take any and all other actions as may be reasonably necessary
or advisable to enable each such Holder, agent, if any, and underwriter, if any,
to consummate the disposition in such jurisdictions of such Registrable
Securities; provided, however, that Sealed Air Corporation shall not be required
to (1) qualify as a foreign corporation in any jurisdiction wherein it would not
otherwise be required to qualify but for the requirements of this Section
2.3(c), or (2) consent to general service of process or taxation in any such
jurisdiction;
(d) furnish such number of prospectuses and other documents
incident thereto, including any amendment of or supplement to the prospectus, as
any Holder from time to time may reasonably request;
(e) notify the Holders of Registrable Securities included in the
registration statement, the sales or placement agent, if any, therefor and the
managing underwriter or underwriters, if any, thereof, (i) when such
registration statement or the prospectus included therein or any prospectus
amendment or supplement or post-effective amendment has been filed, and with
respect to such registration statement or any post-effective amendment, when the
same has become effective, (ii) of the issuance by the Commission of any stop
order suspending the effectiveness of such registration statement, (iii) of the
receipt by Sealed Air Corporation of any notification with respect to the
suspension of the qualification of the Registrable Securities for the sale in
any jurisdiction, (iv) at any time when a prospectus is required to be delivered
under the Securities Act, that such registration statement, prospectus,
prospectus amendment or supplement or post-effective amendment, or any document
incorporated by reference in any of the foregoing, contains an untrue statement
of a material fact or omits to state any material fact required to be stated
therein or necessary to make the statements therein not misleading in light of
the circumstances then existing, (v) of the occurrence of any Blackout Period;
or (vi) the withdrawal of any Piggyback Registration or the suspension of the
right of any Holder to sell Registrable Securities under an effective Piggyback
Registration;
(f) if requested by any managing underwriter or underwriters, any
placement or sales agent or any Holder of Registrable Securities included in the
registration statement, incorporate in a prospectus supplement or post-effective
amendment (i) such information as is required by the applicable rules and
regulations of the Commission and as such managing underwriter or underwriters,
such agent or such Holder specifies should be included therein relating to the
terms of the sale of such Registrable Securities, including, without limitation,
information with respect to the principal amount of Registrable Securities being
sold by such Holder or agent or to any underwriters, the name and description of
such Holder, agent or underwriter, the offering price of such Registrable
Securities and any discount, commission or other compensation payable in respect
thereof, the purchase price being paid therefor by such underwriters and with
respect to any other terms of the offering of the Registrable Securities to be
sold by such Holder or agent or to such underwriters, and (ii) such additional
information regarding Sealed Air Corporation that would be required if such
underwritten offering was made pursuant to a registration statement on Form S-1;
provided, however, that the inclusion of such information will only be made
following the reasonable request of the managing underwriter(s) of an
underwritten offering pursuant to Section 2.1(f);
(g) cause all Registrable Securities to be listed on the New York
Stock Exchange and each other securities exchange, if any, on which the Sealed
Air Common Stock is then listed or, if the Sealed Air Common Stock is not listed
on any such exchange, to be listed on the National Association of Securities
Dealers, Inc. ("NASD") automated quotation system and, if listed on the NASD
automated quotation system, use reasonable best efforts to secure designation of
all such Registrable Securities covered by the Shelf Registration Statement as a
NASDAQ "national market system security" within the meaning of Exchange Act Rule
11Aa2-1 of the Commission or, failing that, to secure NASDAQ authorization for
such Registrable Securities;
(h) in the case of an underwritten offering pursuant to Section
2.1(f) of the Registration Rights Agreement, (i) enter into such customary
agreements (including underwriting agreements in customary form) and take such
other actions as the underwriters reasonably request in order to expedite or
facilitate the disposition of the underwritten Registrable Securities
(including, making members of senior management of Sealed Air Corporation
available to participate in, and cause them to reasonably cooperate with the
underwriters in connection with "roadshow" and other customary marketing
activities), (ii) obtain opinions of counsel to Sealed Air Corporation addressed
to the underwriters in customary form, covering such matters as are customarily
covered by opinions requested in underwritten offerings, and (iii) obtain
"comfort" letters and updates thereof from Sealed Air Corporation's independent
certified public accountants addressed to the underwriters, such letters to be
in customary form and covering matters of the type customarily covered in
"comfort" letters to underwriters in underwritten offerings;
(i) make available for inspection by a representative of the
Underwritten Holders, any underwriter of such sale, and any attorney or
accountant retained by such Underwritten Holders or underwriters, at reasonable
times and places, all financial and other records, information and documents and
properties of Sealed Air Corporation, other than those subject to an attorney-
client or other privilege, that are pertinent to the registration statement
filed in connection with such sale; provided, however, that the foregoing
persons shall enter into a confidentiality agreement in form and substance
reasonably satisfactory to Sealed Air Corporation (it being agreed that such
confidentiality agreement will include an agreement not to buy or sell any
securities of Sealed Air Corporation while such person is in possession of
material non-public information) with respect to confidential records,
information and documents. Sealed Air Corporation will cause its officers and
relevant employees to be available at reasonable times and places for
discussions regarding the foregoing information and documents (subject to the
confidentiality agreement requirements described above) of Sealed Air
Corporation with any such representative, underwriter, attorney or accountant in
connection with such registration statement and to otherwise reasonably
cooperate in connection with the due diligence investigation undertaken by any
of them;
(j) not effect any distribution or public sale of Sealed Air Common
Stock during the 60 day period beginning on the date of the underwriting
agreement entered into in connection with an underwritten offering pursuant to
Section 2.1(f) of this Registration Rights Agreement (except, as part of such
underwritten offering if permitted by the managing underwriter(s) of such
offering, in their sole discretion, or pursuant to registrations on Form S-8 or
S-4 or any successor form thereto, upon the exercise of any convertible
securities of Sealed Air Corporation, or in connection with contributions to
profit sharing or similar plans, payment for services in shares of Sealed Air
Common Stock, or the sale of Sealed Air Common Stock issuable upon conversion of
the Senior Notes) unless the managing underwriter(s) for such offering otherwise
agree;
(k) pay all costs and expenses in connection with Sealed Air
Corporation's complying with the terms hereof, including, without limitation,
all registration and filing fees, exchange listing fees, printing expenses,
accounting fees, fees and expenses for listing the Registrable Securities on
each securities exchange on which similar securities issued by Sealed Air
Corporation are then listed or, if applicable, on the NASD automated quotation
system, the expenses of Sealed Air Corporation in providing the notice required
by Section 2.1(f)(ii), blue sky fees and expenses, and fees and disbursements of
counsel for Sealed Air Corporation, but excluding underwriting discounts and
selling commissions relating to the Registrable Securities, and excluding the
fees and expenses of any attorney, accountant or any other advisor retained by
any Holder or, in an underwritten offering pursuant to Section 2.1(f), by any
underwriter of such offering.
(l) otherwise comply with the Securities Act and all applicable
rules and regulations of the Commission and the securities exchange on which the
Registrable Securities are listed.
2.4 Delivery of Prospectus Supplement. In the event that (a) Sealed Air
Corporation would be required, pursuant to Section 2.3(e)(iv) above, to notify
the selling Holders of Registrable Securities, the placement or sales agent, if
any, therefor and the managing underwriters, if any, thereof, or (b) a Holder
would be required to notify Sealed Air Corporation and such Holder provides
Sealed Air Corporation with the information required by Section 2.5(b), Sealed
Air Corporation shall as promptly as practicable prepare and furnish to each
such Holder, to each placement or sales agent, if any, and to each underwriter,
if any, a reasonable number of copies of a prospectus supplemented or amended so
that, as thereafter delivered to initial purchasers of Registrable Securities,
such prospectus shall not contain an untrue statement of a material fact or omit
to state a material fact required to be stated therein or necessary to make the
statements therein not misleading in light of the circumstances then existing.
Each Holder of Registrable Securities agrees that upon receipt of any notice
from Sealed Air Corporation pursuant to Section 2.3(e), other than Section
2.3(e)(i), or if such Holder would be required to notify Sealed Air Corporation
pursuant to Section 2.5(b), such Holder shall forthwith discontinue the
disposition of Registrable Securities pursuant to the registration statement
applicable to such Registrable Securities until such Holder shall have received
copies of such amended or supplemented prospectus, or until such time as
otherwise advised by Sealed Air Corporation, and if so directed by Sealed Air
Corporation, such Holder shall deliver to Sealed Air Corporation, all copies,
other than permanent file copies, then in such Holder's possession of the
prospectus covering such Registrable Securities at the time of receipt of such
notice.
2.5 Furnishing Information by the Holders.
(a) Sealed Air Corporation may require each Holder of Registrable
Securities as to which any registration is being effected to furnish to Sealed
Air Corporation such information regarding such Holder and such Holder's
intended method of distribution of such Registrable Securities and such other
information as Sealed Air Corporation may from time to time reasonably request.
(b) Each such Holder agrees to promptly notify Sealed Air
Corporation of any inaccuracy or change in information previously furnished by
such Holder to Sealed Air Corporation or of the occurrence of any event as a
result of which any prospectus relating to such registration contains or would
contain an untrue statement of a material fact regarding such Holder or such
Holder's intended method of distribution of such Registrable Securities or omits
to state any material fact regarding such Holder or such Holder's intended
method of distribution of such Registrable Securities required to be stated
therein or necessary to make the statements therein not misleading in light of
the circumstances then existing, and promptly to furnish information so required
so that such prospectus shall not contain, with respect to such Holder or the
distribution of such Registrable Securities, an untrue statement of a material
fact or omit to state a material fact required to be stated therein or necessary
to make the statements therein not misleading in light of the circumstances then
existing.
2.6 Indemnification.
(a) Sealed Air Corporation will indemnify each Holder whose
Registrable Securities are to be included in a registration pursuant to this
Article II, each of such Holder's officers, directors, partners, trustees,
agents, employees and representatives and each person controlling such Holder
within the meaning of Section 15 of the Securities Act, and each underwriter, if
any, of such Registrable Securities and each person who controls such
underwriter with respect to each registration, qualification or compliance
effected pursuant to this Article II against all expenses, claims, losses,
damages and liabilities (or actions, proceedings or settlements in respect
thereof) arising out of or based on any untrue statement or alleged untrue
statement of a material fact contained in any registration statement, any
amendment thereto, or any other document incorporated by reference therein, or
any omission or alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein not misleading, or
arising out of any untrue statement or alleged untrue statement of a material
fact contained in any prospectus, or any amendment thereto, or any omission or
alleged omission to state therein a material fact required to be stated therein
or necessary to make the statements therein not misleading in light of the
circumstances in which they were made, and will reimburse such indemnified
persons for any reasonable legal and other expenses reasonably incurred in
connection with investigating, defending or settling any such claim, loss,
damage, liability or action; provided, however, that Sealed Air Corporation will
not be liable in any such case to a Holder to the extent that any such claim,
loss, damage, liability or expense arises out of or is based on any untrue
statement or alleged untrue statement or omission or alleged omission based upon
information furnished in writing to Sealed Air Corporation by a Holder and
provided for use in such registration statement, prospectus or any other
document or the Holder delivered a registration or prospectus in violation of
Section 2.4 hereof after written notice was provided by Sealed Air Corporation
as provided in Section 2.4. It is agreed that the indemnity agreement contained
in this Section 2.6(a) shall not apply to amounts paid in settlement of any such
loss, claim, damage, liability or action if such settlement is effected without
the consent of Sealed Air Corporation (which consent shall not be unreasonably
withheld or delayed).
(b) Each Holder whose Registrable Securities are included in any
registration effected pursuant to this Article II shall indemnify Sealed Air
Corporation, each of its directors, officers, agents, employees and
representatives, and each Person who controls Sealed Air Corporation within the
meaning of Section 15 of the Securities Act, each other such Holder and each of
their officers, directors, partners, agents, employees and representatives and
each person controlling such Holder, and each underwriter, if any, of such
Registrable Securities and each Person who controls any such underwriter,
against all expenses, claims, losses, damages and liabilities (or actions,
proceedings or settlements in respect thereof) arising out of or based on any
untrue statement or alleged untrue statement of a material fact contained in any
registration statement, any amendment thereto, or any other document
incorporated by reference therein, or any omission or alleged omission to state
therein a material fact required to be stated therein or necessary to make the
statements therein not misleading, or arising out of any untrue statement or
alleged untrue statement of a material fact contained in any prospectus, or any
amendment thereto, or any omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the statements
therein not misleading in light of the circumstances in which they were made,
and will reimburse such indemnified persons for any reasonable legal or other
expenses reasonably incurred in connection with investigating, defending or
settling any such claim, loss, damage, liability or action, in each case to the
extent, but only to the extent, that such untrue statement or omission is made
in such registration statement, prospectus or any other document in reliance
upon and in strict conformity with written information furnished to Sealed Air
Corporation by such Holder and provided specifically for use therein; provided,
that the obligations of such Holder hereunder shall not apply to amounts paid in
settlement of any such claims, losses, damages or liabilities (or actions in
respect thereof) if such settlement is effected without the consent of such
Holder (which consent shall not be unreasonably withheld or delayed); provided,
further and notwithstanding anything to the contrary contained herein, that a
Holder shall not be obligated to pay (i) any indemnification claims to the
extent and after the amount of such indemnification claims in the aggregate paid
by such Holder exceeds the gross proceeds in connection with the sale of such
Holder's Registrable Securities with respect to which the indemnification claims
arose or (ii) more than his, her or its pro rata share of any indemnification
claim based upon the gross proceeds in connection with the sale of such Holder's
Registrable Securities with respect to which the indemnification claim arose as
a percentage of the aggregate gross proceeds received by all of the Holders in
connection with such sale.
(c) Each party entitled to indemnification under this Section 2.6
(the "Indemnified Party") shall give prompt written notice to the party required
to provide indemnification (the "Indemnifying Party") after such Indemnified
Party has actual knowledge of any claim as to which indemnity may be sought and
shall permit the Indemnifying Party to assume the defense of any such claim or
any litigation resulting therefrom, provided that counsel for the Indemnifying
Party, who shall conduct the defense of such claim or any litigation resulting
therefrom, shall be approved by the Indemnified Party (whose approval shall not
unreasonably be withheld or delayed), and the Indemnified Party may participate
in such defense with counsel reasonably acceptable to the Indemnifying Party at
the Indemnified Party's expense, and provided, further, that the failure of any
Indemnified Party to give notice as provided herein shall not relieve the
Indemnifying Party of its obligations under this Section 2.6 to the extent such
failure is not materially prejudicial. No Indemnifying Party in the defense of
any such claim or litigation shall, except with the consent of each Indemnified
Party, consent to entry of any judgment or enter into any settlement which does
not include an unconditional release of such Indemnified Party from all
liability in respect of such claim or litigation. Each Indemnified Party shall
furnish such information regarding itself or the claim in question as an
Indemnifying Party may reasonably request in writing and as shall be reasonably
required in connection with the defense of such claim and litigation resulting
therefrom.
(d) If the indemnification provided for in this Section 2.6 is held
by a court of competent jurisdiction to be unavailable to an Indemnified Party
with respect to any loss, liability, claim, damage or expense referred to
therein, then the Indemnifying Party, in lieu of indemnifying such Indemnified
Party hereunder, shall contribute to the amount paid or payable by such
Indemnified Party as a result of such loss, liability, claim, damage or expense
in such proportion as is appropriate to reflect the relative fault of the
Indemnifying Party on the one hand and of the Indemnified Party on the other in
connection with the statements or omissions which resulted in such loss,
liability, claim, damage or expense as well as any other relevant equitable
considerations. The relative fault of the Indemnifying Party and of the
Indemnified Party shall be determined by reference to, among other things,
whether the untrue or alleged untrue statement of a material fact or the
omission to state a material fact relates to information supplied by the
Indemnifying Party or by the Indemnified Party and the parties' relative intent,
knowledge, access to information and opportunity to correct or prevent such
statement or omission. No person guilty of fraudulent misrepresentation (within
the meaning of section 11(f) of the Securities Act) shall be entitled to
contribution from any person who was not guilty of such fraudulent
misrepresentation. Notwithstanding the foregoing, a Holder shall not be
obligated to pay (i) any contribution claims to the extent and after the amount
of such contribution claims in the aggregate paid by such Holder exceeds the
gross proceeds in connection with the sale of such Holder's Registrable
Securities with respect to which the contribution claims arose or (ii) more than
his, her or its pro rata share of any contribution claim based upon the gross
proceeds in connection with the sale of such Holder's Registrable Securities
with respect to which the contribution claim arose as a percentage of the
aggregate gross proceeds received by all of the Holders in connection with such
sale.
(e) Notwithstanding the foregoing, to the extent that the
provisions on indemnification and contribution contained in an underwriting
agreement entered into in connection with an underwritten public offering are in
conflict with the foregoing provisions, the provisions in the underwriting
agreement shall control.
2.7 Non-Affiliate Status. As of the Effective Date and to the best
of Sealed Air Corporation's knowledge, including Sealed Air Corporation's
assumption, without any investigation, that no Holder beneficially owns as of
the Effective Date any securities of Sealed Air Corporation other than
Registrable Securities, Sealed Air Corporation hereby acknowledges and agrees
that the Holders' beneficial ownership of the Registrable Securities does not
and will not (as of the Effective Date) cause any of the Holders to be an
"affiliate" of Sealed Air Corporation as defined in Rule 144.
ARTICLE III
Representations, Warranties and Covenants
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3.1 Representations, Warranties and Covenants of Holders.
(a) Each Holder represents and warrants to, and agrees with Sealed
Air Corporation that such Holder, if not an individual, has the corporate,
limited liability, trust or partnership power and authority, as the case may be,
to enter into this Registration Rights Agreement and to perform its obligations
hereunder.
(b) Each Holder represents and warrants to, and agrees with Sealed
Air Corporation that all necessary corporate, limited liability, trust or
partnership action, as the case may be, has been taken by the such Holder with
respect to the execution and delivery of this Registration Rights Agreement and
the performance of its obligations hereunder, and this Registration Right
Agreement constitutes a valid and binding obligation of such Holder enforceable
against it in accordance with its terms, except as such enforceability may be
limited by (i) bankruptcy, insolvency, reorganization, moratorium or similar
laws now or hereafter in effect relating to creditors' rights generally, (ii)
the remedy of specific performance and injunctive and other forms of equitable
relief which may be subject to equitable defenses and to the discretion of the
court before which any proceeding therefor may be instituted, and (iii)
applicable law and public policy as to rights of indemnification and
contribution.
(c) Each Holder represents and warrants to and agrees with Sealed
Air Corporation that such Holder will (i) not offer to sell, sell or otherwise
dispose of any Registrable Securities except (A) pursuant to an effective
registration statement under the Securities Act that covers the Registrable
Securities being disposed of, (B) in compliance with Rule 144, or (C) in a
transaction that, in the opinion of counsel satisfactory to Sealed Air
Corporation, does not require registration of such Registrable Securities under
the Securities Act, (ii) during the time when such Holder is offering
Registrable Securities for sale, not engage in any stabilization activity in
connection with any of Sealed Air Corporation's securities, (iii) cause to be
furnished to any purchaser of the Registrable Securities and to the
broker-dealer, if any, through whom Registrable Securities may be offered, a
prospectus in compliance with and if then required by the Securities Act, (iv)
not bid for or purchase any Sealed Air Corporation securities or any rights to
acquire such securities, or attempt to induce any person to purchase any such
securities or any rights to acquire such securities, in each case, other than as
permitted under the Exchange Act, and (v) upon the reasonable request of Sealed
Air Corporation from time to time, advise Sealed Air Corporation from time to
time of the number of Registrable Securities that such Holder has sold or
otherwise disposed of.
(d) Each Holder represents and warrants to and agrees with Sealed
Air Corporation that such Holder is acquiring the Settlement Shares for its own
account for investment and not with a view toward distribution in a manner which
would violate the Securities Act.
(e) Each Holder represents and warrants to and agrees with Sealed
Air Corporation that such Holder and their respective transferees will comply
with all filing and other reporting obligations under all applicable laws which
shall be applicable to such Holder with respect to the Settlement Shares.
(f) In the event such Holder makes any disposition of Registrable
Securities other than pursuant to an effective registration statement or in
compliance with an exemption from registration under the Securities Act, such
Holder will indemnify and hold harmless Sealed Air Corporation and each of its
directors, officers, agents, employees and representatives, and each person who
controls Sealed Air Corporation within the meaning of Section 15 of the
Securities Act, from and against all expenses, claims, losses, damages and
liabilities (or actions, proceedings or settlements in respect thereof) for
which they, or any one of them, shall be or become liable under the Securities
Act or otherwise as a result of such disposition, and will reimburse such
indemnified persons for any legal or other expenses incurred in connection with
investigating or defending any such claim, loss, damage, liability or action
arising out of or based on any distribution or resale of such Registrable
Securities, or any part thereof, by such Holder in violation of the Securities
Act, or in breach of the representations set forth above (it being understood
that such Holder shall have the right to participate, at such Holder's expense,
in the defense of any such claim).
3.2 Representations, Warranties and Covenants of Sealed Air
Corporation.
(a) Sealed Air Corporation is a corporation duly organized, validly
existing and in good standing under the laws of the State of Delaware, and has
all requisite power and authority (corporate and other) to enter into this
Registration Rights Agreement and to perform its obligations hereunder.
(b) All necessary and appropriate corporate action has been taken
by Sealed Air Corporation with respect to the execution and delivery of this
Registration Rights Agreement and the performance of its obligations hereunder,
and this Registration Rights Agreement constitutes a valid and binding
obligation of Sealed Air Corporation enforceable against it in accordance with
its terms, except as such enforceability may be limited by (i) bankruptcy,
insolvency, reorganization, moratorium or similar laws now or hereafter in
effect relating to creditor's rights generally, (ii) the remedy of specific
performance and injunctive and other forms of equitable relief which may be
subject to equitable defenses and to the discretion of the court before which
any proceeding therefor may be instituted, and (iii) applicable law and public
policy as to rights of indemnification and contribution.
(c) There is no claim, litigation, action, suit, proceeding,
investigation or inquiry, administrative or judicial, pending or, to the best
knowledge of Sealed Air Corporation, threatened against Sealed Air Corporation,
at law or in equity, before any federal, state or local court or regulatory
agency or other governmental authority which, individually or in the aggregate,
is reasonably likely to have, individually or in the aggregate, a material
adverse effect on Sealed Air Corporation's ability to perform fully and timely
its agreements and obligations hereunder, other than pursuant to, in connection
with, or arising out of, the Action or the Debtors' petitions for relief under
Chapter 11 of the United States Code in the United States Bankruptcy Court for
the District of Delaware.
(d) Neither the execution and delivery of this Registration Rights
Agreement by Sealed Air Corporation nor the performance by Sealed Air
Corporation of its obligations hereunder will (i) conflict with or result in a
breach of any provision of Sealed Air Corporation's certificate of incorporation
or bylaws or (ii) require any consent, approval, declaration, order or
authorization of, or registration or filing with, any third party, court or
governmental body or other agency, instrumentality or authority by or with
respect to Sealed Air Corporation, other than filings with the Commission, any
filing with or notice to any state securities regulator, and any filing with or
notice to the New York Stock Exchange or such other primary exchange or
quotations system on which the Sealed Air Common Stock is then listed or quoted,
and other than pursuant to, in connection with, or arising out of, the Action or
the Debtors' petitions for relief under Chapter 11 of the United States Code in
the United States Bankruptcy Court for the District of Delaware.
(e) Sealed Air Corporation has satisfied all the requirements
necessary and is eligible to register the Registrable Securities on Form S-3.
ARTICLE IV
Legends
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4.1 Legends.
(a) Unless (i) Sealed Air Corporation shall have obtained an
opinion of counsel reasonably satisfactory to it that such legend is not or is
no longer necessary under the Securities Act or to the effect that the
Registrable Securities may lawfully be disposed of without registration or
qualification or, in connection with the sale of such Registrable Securities,
such legend can be removed, or (ii) such Registrable Securities are sold in
compliance with Rule 144 and Sealed Air Corporation receives documentation
indicating such compliance, or (iii) such Registrable Securities are sold
pursuant to an effective registration statement, the certificates representing
the Registrable Securities shall bear a legend in substantially the following
form:
"The shares represented by this Certificate have not been registered
under the Securities Act of 1933, as amended, but have been issued or
transferred pursuant to an exemption from registration thereunder. No
transfer or assignment of such shares shall be valid or effective and
the issuer shall not be required to give any effect to any transfer
of attempted transfer or assignment of these shares, including,
without limitation, a transfer by operation of law unless (a) the
issuer shall first have obtained an opinion of counsel reasonably
satisfactory to it that the shares may be transferred without
registration under the Securities Act, (b) the shares are sold in
compliance with Rule 144 under such Act and the issuer is given
documentation indicating such compliance, or (c) the shares are
registered under such Act.
The shares represented by this Certificate are subject to a
Registration Rights Agreement dated as of ____________________,
200__. Pursuant to such Registration Rights Agreement, the shares
represented by this Certificate may not be transferred, distributed
or otherwise disposed of to any person or entity, other than pursuant
to an effective registration statement or Rule 144, unless the
aggregate amount of shares being transferred, distributed or
otherwise disposed of to such person or entity equals or exceeds
1,000 shares. Under no circumstances shall the shares represented by
this Certificate be divided into fractional shares."
(b) Each Holder agrees that Sealed Air Corporation may give stop
transfer orders as may be necessary or desirable to its transfer agent to
implement or reflect the provisions of this Section 4.1.
ARTICLE V
Joinder Agreement
-----------------
On or after the Effective Date, Cryovac, Inc. shall transfer the
Settlement Shares to the Initial Holders. If at any time thereafter a Holder,
including an Initial Holder, desires to sell, transfer, distribute, pledge,
encumber or otherwise dispose of such Holder's Registrable Securities other
than pursuant to the Shelf Registration Statement, the Piggyback Registration,
Rule 144 or such other exemption from registration pursuant to which, in the
opinion of counsel to Sealed Air Corporation, the restrictive legend on the
certificate representing the Registrable Securities may be removed, then as a
condition to such transaction, the recipient of the Registrable Securities
shall be required to become a party to this Registration Rights Agreement by
executing and delivering a Joinder Agreement to Sealed Air Corporation.
Notwithstanding any other provision contained in this Registration Rights
Agreement, (i) in no event will such Holders' Registrable Securities be
divided into fractional shares, and (ii) no Holder may transfer, distribute or
otherwise dispose of any Registrable Securities to any person or entity, other
than pursuant to the Shelf Registration Statement, the Piggyback Registration,
Rule 144 or such other exemption from registration pursuant to which, in the
opinion of counsel to Sealed Air Corporation, the restrictive legend on the
certificate representing the Registrable Securities may be removed, unless the
aggregate amount of Registrable Securities so transferred, distributed or
otherwise disposed to such person or entity equals or exceeds 1,000 shares.
ARTICLE VI
Termination
-----------
This Registration Rights Agreement shall terminate immediately
following the moment at which there exist no securities that constitute
Registrable Securities; provided, however, that Article III and Sections 2.6,
8.5, 8.9 and 8.12 shall survive indefinitely.
ARTICLE VII
Rule 144 Requirements
---------------------
For so long as there are any securities that constitute
Registrable Securities, Sealed Air Corporation agrees to: (a) make and keep
public information available, as those terms are understood and defined in
Rule 144; (b) use reasonable best efforts to file with the Commission in a
timely manner all reports and other documents required of Sealed Air
Corporation under the Exchange Act; and (c) furnish to any Holder upon its
written request, a written statement by Sealed Air Corporation as to its
compliance with the information requirements of Rule 144 and of the reporting
requirements of the Exchange Act, a copy of the most recent annual or
quarterly report of Sealed Air Corporation, and such other publicly available
reports and documents of Sealed Air Corporation as such Holder may reasonably
request to avail itself of any similar rule or regulation of the Commission
allowing it to sell any of the Registrable Securities without registration.
ARTICLE VIII
Miscellaneous
-------------
8.1 Recapitalization, Exchanges, etc. Affecting the Sealed Air Common
Stock. The provisions of this Registration Rights Agreement shall apply to the
full extent set forth herein with respect to (i) the Registrable Securities,
and (ii) any and all shares of capital stock of Sealed Air Corporation or any
successor or assign of Sealed Air Corporation (whether by merger,
consolidation, sale of assets or otherwise) which may be issued in respect of,
in exchange for, or in substitution for the Registrable Securities, by reason
of any stock dividend, split, reverse split, combination, recapitalization,
reclassification, merger, consolidation, subdivision, sale of assets or
otherwise. In the event of any change in the capitalization of Sealed Air
Corporation as a result of any stock dividend, split, reverse split,
combination, recapitalization, reclassification, merger, consolidation,
subdivision, sale of assets or otherwise, the provisions of this Registration
Rights Agreement shall be appropriately adjusted.
8.2 Joint Authorship; Construction. All parties agree that the terms
of this Registration Rights Agreement were drafted jointly by counsel for the
parties following extensive arm's length negotiations. In the event there
arises an ambiguity or question of intent or interpretation of this
Registration Rights Agreement or any provision thereof, the Registration
Rights Agreement (and each of its provisions) shall be construed as if drafted
jointly by the parties and no presumption or burden of proof shall arise
favoring or disfavoring any party by virtue of the authorship of any provision
of this Registration Rights Agreement.
8.3 Amendment; Waiver. No provision of this Registration Rights
Agreement may be amended, modified, terminated or supplemented, and waivers or
consents to departures from the provisions hereof may not be given without the
prior written consent of Holders of a majority of the then outstanding
Registrable Securities (as constituted on the date of such amendment,
modification, termination or supplement of, or waivers or consents to
departures from, the terms hereof); provided, however, that the consent or
agreement of Sealed Air Corporation shall be required with regard to any
amendment, modification, termination or supplement of, or waivers or consents
to departures from, the terms hereof, which affect Sealed Air Corporation's
obligations hereunder; and provided, further, that the consent or agreement of
the Cryovac 524(g) Trusts that are the beneficial owners of at least 1% of the
then outstanding Registrable Securities shall be required with regard to any
amendment, modification, termination or supplement of, or waivers or consents
to departures from, the terms hereof, if the Cryovac 524(g) Trusts that are
the beneficial owners of at least 1% of the then outstanding Registrable
Securities are also the beneficial owners, in the aggregate, of at least
one-third of the then outstanding Registrable Securities.
No failure or delay by any party in exercising any right, power or
privilege hereunder shall operate as a waiver thereof, nor shall any single or
partial exercise thereof preclude any other or further exercise thereof or the
exercise of any other right, power or privilege.
8.4 Notices. All notices and other communications hereunder shall be
in writing and shall be deemed to have been duly given upon receipt if (i)
mailed by certified or registered mail, return receipt requested, postage
paid, (ii) sent by Federal Express or other express courier, fee prepaid,
(iii) sent via facsimile with receipt confirmed, or (iv) delivered personally,
addressed as follows or to such other address or addresses of which the
respective party shall have notified the other pursuant to the terms of this
Section 8.4.
if to Sealed Air Corporation:
Sealed Air Corporation
Park 80 East
Saddle Brook, New Jersey 07663
Attention: General Counsel and Secretary
Facsimile: (201) 703-4113
with copies to:
Sealed Air Corporation
Park 80 East
Saddle Brook, New Jersey 07663
Attention: Chief Financial Officer
Facsimile: (201) 703-4171
- and -
Skadden, Arps, Slate, Meagher & Flom LLP
Four Times Square
New York, New York 10036
Attention: Robert M. Chilstrom
Facsimile: (212) 735-2000
if to an Initial Holder, at the address or facsimile set forth on the
signature page attached hereto with a copy to such Initial Holder's attorney
at the address or facsimile set forth on the signature page attached hereto,
and if to a subsequent Holder of Registrable Securities, at the address set
forth on such Holder's Joinder Agreement; provided, however, that in the case
of any Initial Holder or subsequent Holder that is a trust, such trust shall
designate one trustee to receive any and all notices.
8.5 Applicable Law. This Registration Rights Agreement and the rights
and obligations of the parties hereunder shall be governed by and construed in
accordance with the laws of the State of Delaware without giving effect to its
provisions on conflicts of laws principles thereof. Nothing in this
Registration Rights Agreement shall preclude any action to enforce any of the
terms of this Registration Rights Agreement; provided, however, that any such
action shall be brought exclusively in the court in which the Action is
pending or, if the Action is no longer pending, in the United States
Bankruptcy Court for the District of Delaware or, if the United States
Bankruptcy Court for the District of Delaware fails to submit to jurisdiction
in any such action, then exclusively in any federal or state court within the
State of Delaware, and each of the parties hereto agrees that process may be
served upon them in any manner authorized by the laws of the State of Delaware
for such persons and waives and covenants not to assert or plead any objection
which they might otherwise have to such jurisdiction and such process.
8.6 Headings. The article and section headings contained in this
Registration Rights Agreement are solely for the purpose of reference, are not
part of the agreement of the parties, and shall not, in any way, define,
limit, extend, or otherwise affect the scope, meaning, intent, or
interpretation of this Registration Rights Agreement or any provision thereof.
8.7 Entire Agreement. This Registration Rights Agreement (as amended,
modified, or supplemented) sets forth the sole and entire agreement among the
parties with respect to its subject matter. This Registration Rights Agreement
supersedes any prior agreement, understanding, or undertaking (written or
oral) by and between the parties regarding the subject matter of this
Registration Rights Agreement.
8.8 Counterparts. This Registration Rights Agreement may be executed
in any number of identical counterparts, any of which may contain the
signatures of less than all parties and all of which together shall constitute
a single agreement.
8.9 Attorneys' Fees. The prevailing party in any dispute shall be
entitled to recover from the other party all of its costs and expenses
incurred in connection with the enforcement of its rights hereunder or
thereunder, including reasonable attorneys' and paralegals' fees and costs
incurred before and at trial, at any other proceeding, at all tribunal levels
and whether or not suit or any other proceeding is brought.
8.10 Severability. If any term or provision of this Registration
Rights Agreement shall to any extent be invalid or unenforceable, the
remainder of this Registration Rights Agreement shall not be affected thereby,
and each term and provision of this Registration Rights Agreement shall be
valid and enforceable to the fullest extent permitted by law. Upon the
determination that any term or other provision is invalid, illegal or
incapable of being enforced, the parties shall negotiate in good faith to
modify this Registration Rights Agreement so as to effect their original
intent as closely as possible in an acceptable manner to the end that the
agreements and obligations contemplated hereby are fulfilled to the extent
possible.
8.11 Binding Effect. This Registration Rights Agreement shall be
binding upon, inure to the benefit of and be enforceable by the parties hereto
and their respective successors, legal representatives, heirs and permitted
assigns, including, without limitation, all successors and assigns of Sealed
Air Corporation, whether by merger, consolidation, reorganization, sale of
assets or otherwise.
8.12 Remedies. Any Person having rights under any provision of this
Registration Rights Agreement shall be entitled to enforce such rights
specifically, to recover damages caused by reason of any breach of any
provision of this Registration Rights Agreement and to exercise all other
rights granted by law or equity. The parties hereto agree and acknowledge that
money damages would not be an adequate remedy for any breach of the provisions
of this Registration Rights Agreement and that any party may in its sole
discretion apply to any court of law or equity of competent jurisdiction set
forth in Section 8.5 (without posting any bond or other security) for specific
performance and for other injunctive relief in order to enforce or prevent
violation of the provisions of this Registration Rights Agreement.
* * *
IN WITNESS WHEREOF, the undersigned have executed this Registration
Rights Agreement as of the date set forth above.
SEALED AIR CORPORATION
By: _________________________
Name:
Title:
INITIAL HOLDERS:
By: __________________________
Name:
Title:
Address: ____________________
____________________
____________________
Facsimile:____________________
Attorney: ____________________
____________________
____________________
By: __________________________
Name:
Title:
Address: ____________________
____________________
____________________
Facsimile:____________________
Attorney: ____________________
____________________
____________________
By: __________________________
Name:
Title:
Address: ____________________
____________________
____________________
Facsimile:____________________
Attorney: ____________________
____________________
____________________
EXHIBIT A
JOINDER AGREEMENT
__________, 200_
Sealed Air Corporation
Park 80 East
Saddle Brook, New Jersey 07663
Ladies and Gentlemen:
Reference is made to the registration rights agreement ("Registration
Rights Agreement") dated as of _____________________, 200__ (the "Registration
Rights Agreement"), by and between Sealed Air Corporation, a Delaware
corporation, the Initial Holders, and any other Person who later becomes a
party to the Registration Rights Agreement by executing this joinder agreement
(the "Joinder Agreement"), in connection with the issuance of 9,000,000 shares
of Sealed Air Common Stock, as more fully set forth in the Settlement
Agreement (as defined in the Registration Rights Agreement). All capitalized
terms not otherwise defined in this Joinder Agreement shall have the meanings
ascribed thereto in the Registration Rights Agreement.
1. Joinder. The undersigned Holder hereby (i) acknowledges that it
has received and reviewed a complete copy of the Registration Rights
Agreement, and (ii) agrees that, upon execution of this Joinder Agreement, it
shall become a party to the Registration Rights Agreement and shall be fully
bound by, and subject to, all of the terms, conditions, representations,
warranties and other provisions of the Registration Rights Agreement with all
attendant rights, duties and obligations stated therein, with the same force
and effect as if the undersigned Holder executed the Registration Rights
Agreement on the date thereof.
2. Representations, Warranties and Agreements of the Holder. The
undersigned Holder represents and warrants to, and agrees with Sealed Air
Corporation, on and as of the date hereof that such Holder, if not an
individual, has the corporate, limited liability, trust or partnership power
and authority, as the case may be, to execute and deliver this Joinder
Agreement and all corporate, limited liability, trust or partnership action,
as the case may be, required to be taken by it for the due and proper
authorization, execution, delivery and performance of this Joinder Agreement
and the consummation of the transactions contemplated hereby has been duly and
validly taken; this Joinder Agreement has been duly authorized, executed and
delivered by such Holder and constitutes a valid and legally binding agreement
of such Holder enforceable against such Holder in accordance with its terms.
3. Transfer Registrations. The undersigned Holder acknowledges and
agrees that (i) in no event will such Holder's Registrable Securities be
divided into fractional shares, and (ii) such Holder may not transfer,
distribute or otherwise dispose of any Registrable Securities to any person or
entity, other than pursuant to the Shelf Registration Statement, the Piggyback
Registration or Rule 144, unless the aggregate amount of such Registrable
Securities so transferred, distributed or otherwise disposed to such person or
entity, equals or exceeds 1,000 shares.
4. Successors and Assigns. Except as otherwise provided herein, this
Joinder Agreement shall bind and inure to the benefit and be enforceable by
Sealed Air Corporation and its successors, heirs and assigns and the
undersigned Holder and its successors, legal representatives, heirs and
assigns so long as they hold any Registrable Securities.
5. Applicable Law. This Joinder Agreement and the rights and
obligations of the parties hereunder shall be governed by and construed in
accordance with the laws of the State of Delaware without giving effect to its
provisions on conflicts of laws principles.
6. Counterparts. This Joinder Agreement may be executed in any number
of identical counterparts, any of which may contain the signatures of less
than all parties and all of which together shall constitute a single
agreement.
7. Amendments. No amendment or waiver of any provision of this
Joinder Agreement, nor any consent or approval to any departure therefrom,
shall in any event be effective unless the same shall be in writing and signed
by the parties hereto.
8. Headings. The section headings contained in this Joinder Agreement
are solely for the purpose of reference, are not part of the agreement of the
parties, and shall not, in any way, define, limit, extend, or otherwise affect
the scope, meaning, intent, or interpretation of this Joinder Agreement or any
provision hereof.
If the foregoing is in accordance with your understanding of our
agreement, kindly sign and return to us a counterpart hereof, whereupon this
Joinder Agreement will become a binding agreement between the undersigned
Holder and Sealed Air Corporation in accordance with its terms.
HOLDER
By: _________________________
Name:
Title:
Number of Registrable Securities:
By: __________________________
Name:
Title:
Address: ____________________
____________________
____________________
Facsimile:____________________
Attorney: ____________________
____________________
____________________
____________________
____________________
EXHIBIT B
Selling Securityholder Notice and Questionnaire
The undersigned Holder of shares of Sealed Air Common Stock (as
defined in the Registration Rights Agreement, dated as of ___________________,
200__ (the "Registration Rights Agreement"), by and between Sealed Air
Corporation, the Initial Holders (as defined in the Registration Rights
Agreement) and any other Person that becomes a party to the Registration Right
Agreement by executing and delivering a Joinder Agreement) that are
Registrable Securities understands that Sealed Air Corporation has or intends
to file with the Securities and Exchange Commission (the "Commission") a
registration statement for the registration and resale under the Securities
Act of 1933, as amended (the "Securities Act"), of the Registrable Securities.
All capitalized terms not otherwise defined herein shall have the meaning
ascribed thereto in the Registration Rights Agreement.
Each beneficial owner of Registrable Securities is entitled to the
benefits of the Registration Rights Agreement. In order to sell or otherwise
dispose of any Registrable Securities pursuant to the Shelf Registration
Statement or the Piggyback Registration, a beneficial owner of Registrable
Securities generally will be required to be named as a selling securityholder
in the related prospectus, deliver a prospectus to the purchaser of
Registrable Securities and be bound by those provisions of the Registration
Rights Agreement applicable to such beneficial owner (including certain
indemnification provisions, as described below). Beneficial owners, who
beneficially own Registrable Securities at the time of the filing of the Shelf
Registration Statement or the Piggyback Registration, as applicable, are
required to complete and deliver this Notice and Questionnaire prior to the
effectiveness of the Shelf Registration Statement or the Piggyback
Registration, as applicable, so that such beneficial owners may be named as
selling securityholders in the related prospectus at the time of
effectiveness. Upon receipt of a completed Notice and Questionnaire from a
Person that enters into a Joinder Agreement following the effectiveness of a
registration statement filed pursuant to Article II of the Registration Rights
Agreement, Sealed Air Corporation will file such amendments to such
registration statement or supplements to the related prospectus as are
necessary to name such beneficial owner as a selling securityholder and to
permit such Holder to deliver such prospectus to the purchaser of Registrable
Securities if such Registrable Securities were initially included in such
registration statement.
Certain legal consequences arise from being named as a selling
securityholder in the Shelf Registration Statement, the Piggyback Registration
and the related prospectus. Accordingly, holders and beneficial owners of
Registrable Securities are advised to consult their own securities law counsel
regarding the consequences of being named or not being named as a selling
securityholder in the Shelf Registration Statement or the Piggyback
Registration, as applicable, and the related prospectus.
Notice
The undersigned beneficial owner (the "Selling Securityholder") of
Registrable Securities hereby gives notice to Sealed Air Corporation of its
intention to sell or otherwise dispose of Registrable Securities beneficially
owned by it and listed below in Item 3 (unless otherwise specified under Item
3) pursuant to the Shelf Registration Statement or the Piggyback Registration,
as applicable. The undersigned, by signing and returning this Notice and
Questionnaire, understands that it will be bound by the terms and conditions
of this Notice and Questionnaire and the Registration Rights Agreement.
The undersigned hereby provides the following information to Sealed
Air Corporation and represents and warrants that such information is accurate
and complete:
Questionnaire
1. (a) Full legal name of Selling Securityholder:
_________________________________________________________________
(b) Full legal name of registered holder (if not the same as (a)
above) through which registrable securities listed in (3)
below are held:
_________________________________________________________________
(c) Full legal name of DTC participant (if applicable and if not
the same as (b) above) through which Registrable Securities
listed in (3) below are held:
_________________________________________________________________
2. Address for notices to Selling Securityholder:
______________________________________________________________________
______________________________________________________________________
Telephone: ______________________________________________________
Fax: ______________________________________________________
Contact Person: ______________________________________________________
3. Beneficial ownership of Registrable Securities:
(a) Type and principal amount of Registrable Securities beneficially
owned:
_________________________________________________________________
_________________________________________________________________
(b) CUSIP No(s). of such Registrable Securities beneficially owned:
_________________________________________________________________
_________________________________________________________________
_________________________________________________________________
4. Beneficial ownership of Sealed Air Corporation securities owned by
the Selling Securityholder:
Except as set forth below in this Item (4), the undersigned is not
the beneficial or registered owner of any securities of Sealed Air
Corporation other than the Registrable Securities listed above in
Item (3).
(a) Type and amount of other securities beneficially owned by
the Selling Securityholder:
_________________________________________________________________
_________________________________________________________________
(b) CUSIP No(s). of such other securities beneficially owned:
_________________________________________________________________
_________________________________________________________________
5. Relationship with Sealed Air Corporation:
Except as set forth below, neither the undersigned nor any of its
affiliates, officers, directors or principal equity holders (5% or
more) has held any position or office or has had any other material
relationship with Sealed Air Corporation (or their predecessors or
affiliates) during the past three years.
State any exceptions here:
______________________________________________________________________
______________________________________________________________________
6. Plan of distribution:
Except as set forth below, the undersigned (including its donees or
pledgees) intends to distribute the Registrable Securities listed above
in Item (3) pursuant to the Shelf Registration Statement or the
Piggyback Registration, as applicable, only as follows( if at all): such
Registrable Securities may be sold from time to time directly by the
undersigned or alternatively, through underwriters, broker-dealers or
agents. If the Registrable Securities are sold through underwriters or
broker-dealers, the Selling Securityholder will be responsible for
underwriting discounts or commissions or agent's commissions. Such
Registrable Securities may be sold in one or more transactions at fixed
prices, at prevailing market prices at the time of sale, at varying
prices determined at the time of sale, or at negotiated prices. Such
sales may be effected in transactions (which may involve block
transactions) (i) on any national securities exchange or quotation
service on which the Registrable Securities may be listed or quoted at
the time of sale, (ii) in the over-the-counter market, (iii) in
transactions otherwise than on such exchanges or services, or in the
over-the- counter market, such as privately negotiated transactions, or
(iv) through the writing of options. In connection with sales of
Registrable Securities or otherwise, the undersigned may enter into
hedging transactions with broker-dealers, which may in turn engage in
short sales of the Registrable Securities and deliver Registrable
Securities to close out such short positions, or loan or pledge
Registrable Securities to broker-dealers that in turn may sell such
securities.
State any exceptions here:
______________________________________________________________________
______________________________________________________________________
The undersigned acknowledges that it understands its obligation to
comply with the provisions of the Exchange Act and the rules thereunder
relating to stock manipulation, particularly Regulation M thereunder (or any
successor rules or regulations), in connection with any offering of
Registrable Securities pursuant to the Shelf Registration Statement or the
Piggyback Registration, as applicable. The undersigned agrees that neither it
nor any person acting on its behalf will engage in any transaction in
violation of such provisions.
The Selling Securityholder hereby acknowledges its representations,
warranties and obligations under the Registration Rights Agreement to
indemnify and hold harmless certain persons as set forth therein.
Pursuant to the Registration Rights Agreement, Sealed Air Corporation
has agreed under certain circumstances to indemnify the Selling Securityholder
against certain liabilities.
In accordance with the undersigned's obligation under the
Registration Rights Agreement to provide such information as may be required
by law for inclusion in the Shelf Registration Statement or the Piggyback
Registration, as applicable, the undersigned agrees to promptly notify Sealed
Air Corporation of any inaccuracies or changes in the information provided
herein, including but not limited to, if required by law, the identity of any
underwriter, broker-dealer or agent involved in the distribution of the
Registrable Securities, that may occur subsequent to the date hereof at
anytime while the Shelf Registration Statement or the Piggyback Registration,
as applicable, remains effective. All notices hereunder and pursuant to the
Registration Rights Agreement shall be made in writing at the address set
forth below.
By signing below, the undersigned consents to the disclosure of the
information contained herein in its answers to Items (1) through (6) above and
the inclusion of such information in the Shelf Registration Statement or the
Piggyback Registration, as applicable, and the related prospectus. The
undersigned understands that such information will be relied upon by Sealed
Air Corporation in connection with the preparation or amendment of the Shelf
Registration Statement or the Piggyback Registration, as applicable, and the
related prospectus.
IN WITNESS WHEREOF, the undersigned, by authority duly given, has
caused this Notice and Questionnaire to be executed and delivered either in
person or by its duly authorized agent.
Dated:
HOLDER
By: _________________________
Name:
Title:
PLEASE RETURN THE COMPLETED AND EXECUTED NOTICE AND QUESTIONNAIRE TO SEALED
AIR CORPORATION AT:
Sealed Air Corporation
Park 80 East
Saddle Brook, New Jersey 07663
Attention: General Counsel and Secretary
Facsimile: (201) 703-4113
with copies to:
Sealed Air Corporation
Park 80 East
Saddle Brook, New Jersey 07663
Attention: Chief Financial Officer
Facsimile: (201) 703-4171
- and -
Skadden, Arps, Slate, Meagher & Flom LLP
Four Times Square
New York, New York 10036
Attention: Robert M. Chilstrom
Facsimile: (212) 735-2000
Exhibit 2: GOVERNMENT RELEASE
All capitalized terms not otherwise defined in this Government
Release shall have the meaning ascribed thereto in the Settlement Agreement
and Release (the "Agreement") to which this Government Release is made a part.
In consideration of the transfers to be made pursuant to paragraph
II(a) of the Agreement, the United States of America hereby releases the
Released Parties from, and covenants not to sue the Released Parties with
respect to, any and all civil or administrative Claims, Demands, and Damages
arising under: (a) 28 U.S.C. ss.ss. 3304 and 3306 as asserted in the United
States' Complaint in Intervention filed in the Action; and (b) theories of
successor liability, piercing the corporate veil, or similar claims for which
the relief would be the avoidance of all or any part of the Cryovac
Transaction or a money judgment for all or any part of the value of the
Cryovac Transaction.
This Government Release is conditioned upon the satisfactory
performance by Cryovac, Inc. and Sealed Air Corporation of their obligations
under the Agreement and extends only to the Released Parties and does not
extend to any other person. This Government Release does not pertain to any
matters other than those expressly specified herein. The United States
reserves any and all claims and demands with respect to all other matters
(including the treatment of the Cryovac Cash Amount and the Settlement Shares
under the Internal Revenue Code), which it or any department or agency may
have against any of the Released Parties. Prior to or simultaneous with
the transfers contemplated by paragraph II(a) of the Agreement, the United
States will deliver to Cryovac, Inc. and Sealed Air Corporation a duly
executed Stipulation of Dismissal With Prejudice of the Action in the form
appended to the Agreement as Exhibit 4.
FOR THE UNITED STATES OF AMERICA:
Date: ____________
____________________________________
THOMAS L. SANSONETTI
Assistant Attorney General
Environment and Natural Resources Division
U.S. Department of Justice
950 Pennsylvania Ave., NW
Room 2143
Washington, D.C. 20530
Date: ____________ ____________________________________
JEREL L. ELLINGTON
Senior Counsel
Environmental Enforcement Section
U.S. Department of Justice
999 18th Street, Suite 945N
Denver, CO 80202
Telephone: (303) 312-7321
Exhibit 3: RELEASE
All capitalized terms not otherwise defined in this Release shall
have the meaning ascribed thereto in the Agreement.
In consideration of the transfers made pursuant to paragraph II(a) of
the Agreement, Plaintiffs and Debtors hereby irrevocably release, acquit, and
forever discharge the Released Parties from any and all Asbestos-Related
Claims, and any and all Claims, Debts, and Damages on the basis of, arising
from, or attributable to (in whole or in part, directly or indirectly) the
Fresenius Transaction, that have accrued or been asserted or that hereafter
might accrue or be asserted.
Plaintiffs and Debtors further agree that neither the Plaintiffs, the
Debtors, nor their bankruptcy estates shall institute, participate in,
maintain, maintain a right to or assert against the Released Parties, either
directly or indirectly, on its own behalf, derivatively, or on behalf of any
other Person any and all Asbestos-Related Claims, and any and all Claims,
Debts, and Damages on the basis of, arising from, or attributable to (in whole
or in part, directly or indirectly) the Fresenius Transaction.
OFFICIAL COMMITTEE OF ASBESTOS
PERSONAL INJURY CLAIMANTS
By: ______________________________
Print Name: ______________________
Sworn to before me
this ____ day of 200_.
_____________________________
Notary Public
OFFICIAL COMMITTEE OF ASBESTOS
PROPERTY DAMAGE CLAIMANTS
By: ______________________________
Print Name: ______________________
Sworn to before me
this ____ day of 200_.
_____________________________
Notary Public
[AS TO EACH OTHER DEBTOR]
By: ______________________________
Print Name: ______________________
[WILL ADD SIGNATURE LINE FOR EACH
DEBTOR]
Sworn to before me
this ____ day of 200_.
_____________________________
Notary Public
Exhibit 4:
STIPULATION OF DISMISSAL WITH PREJUDICE OF THE ACTION
(The remainder of this page has been intentionally left blank.)
In re: ) Chapter 11
) Case Nos. 01-1139 through01-1200
W.R. GRACE & CO., et al., )
)
Debtors. )
________________________________________ )
OFFICIAL COMMITTEE OF )
ASBESTOS PERSONAL INJURY )
CLAIMANTS, et al., )
)
Plaintiffs, )
)
-against- ) Adv. No. 02-2210
) [LEAD DOCKET]
SEALED AIR CORPORATION )
and CRYOVAC, INC., )
)
Defendants. )
_________________________________________)
OFFICIAL COMMITTEE OF )
ASBESTOS PERSONAL INJURY )
CLAIMANTS, et al., )
) Adv. No. 02-2211 Plaintiffs, )
)
-against- )
)
FRESENIUS MEDICAL CARE, )
HOLDINGS, INC., et al., ) This Document Pertains to Adv. No.
) ----------------------------------
Defendants. ) 02-2210 )
_________________________________________) ---------
STIPULATION OF DISMISSAL WITH PREJUDICE
---------------------------------------
IT IS HEREBY STIPULATED AND AGREED, by, between, and among the
undersigned, the attorneys of record for the parties to the above-captioned
action, that the above- captioned action, including, without limitation, the
claims asserted by the plaintiffs in behalf of the Chapter 11 Bankruptcy
Estate of W.R. Grace & Co., et al., and the claims asserted by the United
States of America in its complaint in intervention, is discontinued and
dismissed with prejudice, without costs as to any party as against any other.
This stipulation may be filed without further notice with the Clerk of the
Court.
Dated: ________________, 200_
Skadden, Arps, Slate, Meagher & Flom LLP
_________________________
Four Times Square
New York, NY 10036-6522
COUNSEL FOR CRYOVAC, INC.
AND SEALED AIR CORPORATION
Caplin & Drysdale, Chartered
__________________________
One Thomas Circle, N.W.
Washington, D.C. 20005
COUNSEL FOR THE OFFICIAL COMMITTEE
OF ASBESTOS PERSONAL INJURY CLAIMANTS
Bilzin Sumberg Baena Price & Axelrod LLP
___________________________
200 South Biscayne Boulevard
Suite 2500
Miami, FL 33131
COUNSEL FOR THE OFFICIAL COMMITTEE
OF ASBESTOS PROPERTY DAMAGES CLAIMANTS
United States Department of Justice
__________________________
999 18th Street
Denver, CO 80202
COUNSEL FOR THE UNITED STATES OF AMERICA
Exhibit 5:
FRESENIUS RELEASE
(The remainder of this page has been intentionally left blank.)
SETTLEMENT AGREEMENT AND MUTUAL RELEASE
---------------------------------------
This Settlement Agreement and Mutual Release (the "Agreement") is
made as of the ____ day of _______, 200__, by and among Fresenius Medical Care
AG, Fresenius Medical Care Holdings, Inc. ("FMCH"), National Medical Care,
Inc. ("NMC"), Fresenius USA, Inc., Sealed Air Corporation ("Sealed Air") and
Cryovac, Inc. ("Cryovac") (collectively the "Parties").
Whereas, a dispute has arisen between the Parties and certain claims
have been asserted in a lawsuit captioned, Sealed Air Corporation vs.
Fresenius Medical Care AG, Fresenius Medical Care Holdings, Inc.; National
Medical Care, Inc.; and Fresenius USA, Inc. (No. 600300/02 N.Y. Sup. Ct.) (the
"Indemnity Litigation");
Whereas, certain of the Parties are involved in Adversary Proceedings
pending in the United States District Court for the District of Delaware (Adv.
Nos. 02-2210 and 02-2211) (the "Bankruptcy Litigation");
Whereas, the Parties desire to resolve the Indemnity Litigation as
part of a global settlement of the claims asserted against them in the
Bankruptcy Litigation, without any admission of liability.
Now, therefore, in consideration of the obligations and agreements
stated herein, the Parties agree as follows:
1. Definitions. When used in this Agreement, the following terms and
words shall be defined as follows (such meanings to be equally applicable to
both the singular and the plural forms of the terms defined):
A. "Asbestos-Related Claim" shall mean any claim (including but not
limited to personal injury, wrongful death, property damage or medical
monitoring) whether sounding in tort, contract, warranty, statute, admiralty,
or any other theory of law or equity, based on, relating to, or arising by
reason of direct or indirect damages caused or allegedly caused, in whole or
in part, by the mining, processing, consumption, use, storage, manufacture,
design, sale, assembly, distribution, disposal, installation, exposure to, or
the presence of asbestos or asbestos containing products or by-products, or
products which contain asbestos in any form, consumed, used, stored,
manufactured, assembled, distributed, disposed of, or installed by or on
behalf of any Grace-Conn. Business.
B. "Cryovac Transaction" shall mean the transfers of assets, the
distribution of stock, the merger, and all predecessor, related, and ancillary
transactions, agreements, transfers, and distributions relating to the
transactions described in, referred to, or contemplated by Form S-4
Registration Statement filed by W.R. Grace & Co. with the Securities and
Exchange Commission under Securities Act of 1933, as amended, on or about
February 13, 1998, SEC File No. 333-46281, including all attachments,
exhibits, and schedules thereto.
C. "Debtor" shall mean each of W. R. Grace & Co. (f/k/a Grace
Specialty Chemicals, Inc.), W. R. Grace & Co.-Conn., A-1 Bit & Tool Co., Inc.,
Alewife Boston Ltd., Alewife Land Corporation, Amicon, Inc., CB Biomedical,
Inc. (f/k/a Circe Biomedical, Inc.), CCHP, Inc., Coalgrace, Inc., Coalgrace
II, Inc., Creative Food 'N Fun Company, Darex Puerto Rico, Inc., Del Taco
Restaurants, Inc., Dewey and Almy, LLC (f/k/a Dewey and Almy Company), Ecarg,
Inc., Five Alewife Boston Ltd., GC Limited Partners I, Inc., (f/k/a Grace
Cocoa Limited Partners I, Inc.), GC Management, Inc. (f/k/a Grace Cocoa
Management, Inc.), GEC Management Corporation, GN Holdings, Inc. GPC
Thomasville Corp., Gloucester New Communities Company, Inc., Grace A-B Inc.,
Grace A-B II Inc., Grace Chemical Company of Cuba, Grace Culinary Systems,
Inc., Grace Drilling Company, Grace Energy Corporation, Grace Environmental,
Inc., Grace Europe, Inc., Grace H-G Inc., Grace H-G II Inc., Grace Hotel
Services Corporation, Grace International Holdings, Inc. (f/k/a Dearborn
International Holdings, Inc.), Grace Offshore Company, Grace PAR Corporation,
Grace Petroleum Libya Incorporated, Grace Tarpon Investors, Inc., Grace
Ventures Corp., Grace Washington, Inc., W. R. Grace Capital Corporation., W.
R. Grace Land Corporation, Gracoal, Inc., Gracoal II, Inc., Guanica-Caribe
Land Development Corporation, Hanover Square Corporation, Homco International,
Inc., Kootenai Development Company, L B Realty, Inc., Litigation Management,
Inc. (f/k/a GHSC Holding, Inc., Grace JVH, Inc., Asbestos Management, Inc.),
Monolith Enterprises, Incorporated, Monroe Street, Inc., MRA Holdings Corp.
(f/k/a Nestor-BNA Holdings Corporation), MRA Intermedco, Inc. (f/k/a
Nestor-BNA, Inc.), MRA Staffing Systems, Inc. (f/k/a British Nursing
Association, Inc.), Remedium Group, Inc. (f/k/a Environmental Liability
Management, Inc., E&C Liquidating Corp., Emerson & Cuming, Inc.), Southern
Oil, Resin & Fiberglass, Inc., Water Street Corporation, Axial Basin Ranch
Company, CC Partners (f/k/a Cross Country Staffing), Hayden-Gulch West Coal
Company, H-G Coal Company.
D. "Grace-Conn. Business" shall mean all of the businesses and
operations of Grace- Conn. and its parents or subsidiaries at any time, other
than the NMC Business.
E. "Grace New York" shall mean W.R. Grace & Co., a New York
corporation, now known as FMCH (taxpayer identification number 13-3461988).
F. "Grace-Related Claims" shall mean, collectively, all claims
(including unknown claims) demands, rights, liabilities and causes of action
of every nature and description whatsoever, known or unknown, direct or
indirect, whether concealed or hidden, from the beginning of time up to and
including the date of this Agreement, asserted or that might have been
asserted (including without limitation claims for fraudulent conveyance,
successor liability, piercing of corporate veil, negligence, gross negligence,
professional negligence, breach of duty of care, breach of duty of loyalty,
breach of duty of candor, fraud, breach of fiduciary duty, mismanagement,
corporate waste, breach of contract, negligent misrepresentation,
contribution, indemnification, any other common law or equitable claims, and
violations of any state or federal statutes, rules or regulations), which is
either an Asbestos-Related Claim or that is based upon, arises out of, or
relates in any way to the NMC Transaction, the Cryovac Transaction, or the
conduct or operations of any Grace-Conn. Business, including without
limitation, any liability or obligation of a Grace-Conn. Business under
environmental or tax law, but not including any claims relating to or arising
out of sales of goods or services occurring (i) directly between the NMC
Parties and the Sealed Air Parties (ii) on or after March 31, 1998.
G. "NMC Business" shall mean all of the worldwide healthcare business
and operations conducted by NMC and the NMC Subsidiaries at any time, whether
prior to or after September 29, 1996.
H. "NMC Parties" shall mean FMCH, NMC, Fresenius Medical Care AG,
Fresenius USA, Inc., and each of their respective present and former
subsidiaries, parents, affiliates, officers, directors, employees, partners,
trustees, shareholders, beneficiaries, agents, attorneys, predecessors,
successors, and assigns, including but not limited to Fresenius AG, but not
including the Debtors, Sealed Air, and Cryovac.
I. "NMC Subsidiaries" shall mean all direct and indirect subsidiaries
of NMC through which Grace New York or FMCH conducts or conducted the NMC
Business.
J. "NMC Transaction" shall mean the series of transactions that
became effective on September 27 - 30, 1996, whereby, inter alia, (i) NMC
distributed approximately $2.3 billion in cash and assumed debt to
Grace-Conn.; (ii) Grace-Conn. distributed 100% of the common shares of NMC
stock to Grace New York; (iii) Grace New York contributed 100% of the common
shares of Grace- Conn. stock to W.R. Grace & Co. (now known as Sealed Air);
(iv) Grace New York distributed 100% of the common shares of the stock of W.R.
Grace & Co. (now known as Sealed Air) to its shareholders; and (v) Grace New
York merged with a subsidiary of Fresenius Medical Care AG, all of which are
more fully described in that certain Distribution Agreement dated as of
February 4, 1996, among Grace New York, Grace-Conn. and Fresenius AG, and that
certain Contribution Agreement dated as of February 4, 1996, among Fresenius
AG, Sterilpharma GmbH, and Grace- Conn.
K. "Sealed Air Parties" shall mean Sealed Air, Cryovac, and each of
their respective present and former subsidiaries, parents, affiliates,
officers, directors, employees, partners, trustees, shareholders,
beneficiaries, agents, attorneys, predecessors, successors, and assigns, but
not including the Debtors and the NMC Parties.
2. Release of the Sealed Air Parties: In consideration for the
release described in Paragraph 3 of this Agreement, each of the NMC Parties
hereby irrevocably releases, acquits, and forever discharges each and every of
the Sealed Air Parties from any and all Grace-Related Claims that the NMC
Parties have asserted, could have asserted, or that hereafter might be
asserted in any forum.
3. Release of the NMC Parties: In consideration for the release
described in paragraph 2 of this Agreement, each of the Sealed Air Parties
hereby irrevocably releases, acquits, and forever discharges each and every of
the NMC Parties from any and all Grace-Related Claims that the Sealed Air
Parties have asserted, could have asserted, or that hereafter might be
asserted in any forum.
4. Within 10 days of the execution of this Agreement, the Sealed Air
Parties shall dismiss the Indemnity Litigation with prejudice, with each side
to pay its respective fees and costs, and shall not file in the future any
claims against the NMC Parties in any manner related to, arising out of or
based upon the Indemnity Litigation or the subject matter thereof.
5. No Admissions: No Party to this Agreement admits any liability of
any sort for any or all claims, controversies, actions, causes of action,
demands, debts, damages, costs, attorneys' fees, monies due on account,
obligations, judgments or liabilities of any nature whatsoever at law or in
equity, past or present, whether or not known or heretofore known or
suspected, or claims against them which is governed by this Agreement.
6. No Assignment: Each of the Parties to this Agreement respectively
warrants and represents that neither such Party nor such Party's subsidiaries
or parents has made any assignment or transfer of any of such person's
respective rights, claims, demand, and causes of action governed by this
Agreement and further represents and warrants that there are no liens, claims
for liens, or assignments in law or equity of or against the claims, demands
and causes of action governed by this Agreement.
7. Choice of Law: The Parties agree that the construction, operation
and enforcement of this Agreement shall be governed by the laws of the State
of Delaware (without giving effect to its provisions on conflict of laws).
8. Successors and Assigns: This Agreement shall be binding upon and
shall inure to the benefit of the successors and assigns of each of the NMC
Parties and the Sealed Air Parties, respectively.
This Agreement comprises seven pages, including the signature page,
and can be signed in any number of identical counterparts, any of which may
contain the signatures of less than all parties and all of which together
shall constitute a single agreement.
FRESENIUS MEDICAL CARE AG
By: _____________________________________
Print Name: ____________________________
Print Title: ___________________________
FRESENIUS MEDICAL CARE HOLDINGS, INC.
By: _____________________________________
Print Name: ____________________________
Print Title: ___________________________
NATIONAL MEDICAL CARE, INC.
By: _____________________________________
Print Name: ____________________________
Print Title: ___________________________
FRESENIUS USA, INC.
By: _____________________________________
Print Name: ____________________________
Print Title: ___________________________
SEALED AIR CORPORATION
By: _____________________________________
Print Name: ____________________________
Print Title: ___________________________
CRYOVAC, INC.
By: _____________________________________
Print Name: ____________________________
Print Title: ___________________________
Exhibit 6: INDEMNIFICATION AGREEMENT
(The remainder of this page has been intentionally left blank.)
INDEMNIFICATION AGREEMENT
This Indemnification Agreement is made as of _____________, 200__, by
and among Sealed Air Corporation, a Delaware corporation, and Cryovac, Inc., a
Delaware corporation, on behalf of themselves and the other Released Parties,
and W.R. Grace & Co., a Delaware corporation, W.R. Grace & Co.-Conn., a
Connecticut corporation, and the other related entities of W.R. Grace & Co.
set forth in Schedule 1.
1. Definitions.
-----------
All capitalized terms not otherwise defined in this Indemnification
Agreement shall have the meaning ascribed thereto in the Settlement Agreement
and Release (the "Settlement Agreement"), dated as of November 10, 2003, by
and among the Official Committee of Asbestos Personal Injury Claimants, the
Official Committee of Asbestos Property Damage Claimants, Sealed Air
Corporation, a Delaware corporation and Cryovac, Inc., a Delaware corporation
2. Indemnification; Survival.
-------------------------
a. Indemnification. Each of the Debtors shall jointly and severally,
at its own expense, indemnify, defend and hold harmless the
Released Parties from and against (i) any and all Asbestos-Related
Claims and Indemnified Taxes, (ii) any and all losses, costs, and
expenses incurred as a result of any breach of any of the
obligations, agreements, or covenants of any of the Debtors or
Non-Debtor Affiliates set forth or referred to in the Settlement
Agreement, including, without limitation, any such obligation,
covenant, or agreement of any Debtor and Non-Debtor Affiliate set
forth in the Chapter 11 Plan or Confirmation Order, (iii) if any
Non-Debtor Affiliate has not executed and delivered a Release, any
and all Asbestos-Related Claims based on, arising out of, or
attributable to, directly or indirectly, in whole or in part, such
Non- Debtor Affiliate, and (iv) all attorneys' fees or costs and
expenses attributable to any indemnification pursuant to this
section 2(a), provided, however, that in each case such
indemnification shall not apply to Excluded Fees.
b. Notice. Any Released Party entitled to indemnification under
section 2(a) of this Indemnification Agreement shall provide W.R.
Grace & Co. (formerly known as Grace Specialty Chemicals, Inc.) or
the then parent corporation of the reorganized Debtors ("Grace
Specialty") prompt written notice (the "Claim Notice") of any
Claim against such Released Party by any third party (a "Third
Party Claim") of which such Released Party has received notice to
which it may be entitled to indemnification hereunder, provided,
however, that no Claim Notice shall be required unless and until
the Person asserting the Third-Party Claim has advised the
Released Party that such Person intends to contest the application
of the injunction referred to in paragraph II(c)(vi) of the
Settlement Agreement, and provided, further, that the failure of a
Released Party to give the Claim Notice (i) will not relieve the
Debtors from any liability hereunder unless solely and to the
extent (A) all the Debtors were not otherwise aware of such Third
Party Claim (including by Claim Notice from any other Released
Party) and (B) such failure results in the forfeiture by the
Debtors of substantial rights and defenses, and (ii) will not in
any event relieve the Debtors from any obligations to any Released
Party other than with respect to the indemnification obligation
that is the subject of the Claim Notice. In the case of a Claim
other than a Third Party Claim, the Released Party shall promptly
provide to Grace Specialty a written notice (the "Indemnity
Notice") describing in reasonable detail the nature of the Claim
and the basis of the Released Party's request for indemnification
under this Indemnification Agreement, provided, however, that the
failure of the Released Party to provide the Indemnity Notice (i)
will not relieve the Debtors from liability hereunder, unless
solely and to the extent (A) all the Debtors were not otherwise
aware of such Claim (including by Indemnity Notice from any other
Released Party) and (B) such failure results in the forfeiture by
the Debtors of substantial rights and defenses, and (ii) will not
in any event relieve the Debtors from any obligations to the
Released Party other than with respect to the indemnification
obligation that is the subject of the Indemnity Notice.
c. Conduct of Defense.
i. The Debtors shall have the right, upon written notice to the
Released Party (the "Defense Notice") within five (5) days
of its receipt from the Released Party of the Claim Notice,
to conduct at its expense the defense against any Third
Party Claim in its own name, or, if necessary, in the name
of the Released Party. If the Debtors assume the defense of
a Third Party Claim in accordance with the preceding
sentence, (A) the Released Party shall have the right to
approve the defense counsel, which approval shall not be
unreasonably withheld, (B) the Released Party shall have the
right to participate in the defense of such Third Party
Claim assisted by its counsel, (C) the Released Party shall
at the Debtors' sole expense cooperate with and make
available to the Debtors such assistance, personnel,
witnesses, and materials as the Debtors may reasonably
request, and (D) the Debtors shall not compromise or settle
any such Third Party Claim without the prior written consent
of the Released Party, unless the sole relief provided is
monetary damages that are paid in full by the Debtors and
such compromise or settlement includes a release of each
Released Party from any Damages arising out of such Third
Party Claim that is reasonably satisfactory to such Released
Party.
ii. If the Debtors shall fail to provide the Defense Notice with
respect to a Claim Notice within the time prescribed by
section 2(c)(ii), (A) the Released Party shall have the sole
right to conduct the defense of any Third Party Claim that
is the subject matter of such Claim Notice and the Released
Party may pay, compromise or defend such Third Party Claim
and (B) the Debtors shall have the right to participate in
the defense of such Third Party Claim assisted by its
counsel.
iii. Procedures Relating to Taxes. Notwithstanding anything to
the contrary set forth in section 2(c) of this Agreement,
the procedures set forth in section 4.2 and 4.3 of the 1998
Tax Sharing Agreement shall govern and control the
procedures relating to indemnification for Indemnified
Taxes.
d. Indemnity Payments. Any amounts owed by the Debtors to a Released
Party pursuant to this Indemnification Agreement ("Indemnity
Payments") shall be paid by wire transfer in immediately available
funds within five business days after the receipt of a written
request from the Released Party entitled to such indemnification,
provided, however, that the Debtors shall pay to a Released Party
any payment (the "Settlement Payment") that such Released Party is
required to make (including as a result of any settlement,
compromise, judgment against the Released Party or otherwise) with
respect to a Third Party Claim upon notice by the Released Party
at least three business days prior to the date that such
Settlement Payment is due. All such Indemnity Payments shall be
made to the accounts and in the manner specified by the Released
Party. Any Indemnity Payments that are not paid within the period
set forth in this section 2(d) shall accrue interest at the prime
rate announced from time to time by Bank of America, N.A.,
compounded annually.
e. Survival. The obligations of each of the Debtors contained in this
Indemnification Agreement shall survive indefinitely and shall not
be discharged, expunged, estimated, or otherwise adversely
affected in the Debtors' bankruptcy cases or by confirmation of
the Chapter 11 Plan and the Debtors' indemnity obligations
pursuant to this Indemnification Agreement shall continue as a
post-confirmation obligation of each of the reorganized Debtors.
3. Notices.
-------
All notices and other communications hereunder shall be in writing
and shall be deemed to have been duly given upon receipt if: (i) mailed by
certified or registered mail, return receipt requested, (ii) sent by Federal
Express or other express courier, fee prepaid, (iii) sent via facsimile with
receipt confirmed, or (iv) delivered personally, addressed as follows or to
such other address or addresses of which the respective party shall have
notified the other.
If to the Released Parties, to:
Sealed Air Corporation/Cryovac, Inc.
Park 80 East
Saddle Brook, New Jersey 07663
Attention: General Counsel and Secretary
Facsimile: (201) 703-4113
with copies to:
Skadden, Arps, Slate, Meagher & Flom LLP
Four Times Square
New York, New York 10036-6522
Attention: Sheila L. Birnbaum
Telephone: (212) 735-3000
Facsimile: (212) 735-2000
If to Grace Specialty or the Debtors, to:
W.R. Grace & Co.
7500 Grace Drive
Columbia, Maryland 21044
Attention: Secretary
Telephone: (410) 531-4212
Facsimile: (410) 531-4783
with copies to:
Kirkland & Ellis
Aon Center
200 East Randolph Drive
Chicago, Illinois 60601-6636
Attention: David M. Bernick
Telephone: (312) 861-2000
Facsimile: (312) 861-2200
4. Miscellaneous.
--------------
a. Entire Agreement; Amendments. This Indemnification Agreement (as
amended, modified, or supplemented) sets forth the sole and entire
agreement among the parties with respect to its subject matter,
and may not be waived, amended, modified, or supplemented except
by written instrument executed by duly authorized representatives
of each of the parties and entitled "Modification of
Indemnification Agreement." This Indemnification Agreement
supercedes any prior agreement, understanding, or undertaking
(written or oral) by and among the parties regarding the subject
matter of this Indemnification Agreement.
b. All parties agree that the terms of this Indemnification Agreement
were drafted jointly by counsel for the parties following
extensive arm's length negotiations. If there arises an ambiguity
or question of intent or interpretation of this Indemnification
Agreement or any provision thereof, this Indemnification Agreement
(and each of its provisions) shall be construed as if drafted
jointly by the parties and no presumption or burden of proof shall
arise favoring or disfavoring any party by virtue of the
authorship of any provision of this Indemnification Agreement.
c. Successor and Assigns. This Indemnification Agreement shall be
binding upon and inure to the benefit of each of each of the
Debtors, the Released Parties, and any and all of their respective
heirs, legal representatives, administrators, successors and
assigns, provided, that (i) neither this Indemnification Agreement
nor any substantial right or obligation hereunder may be assigned
by any of the Debtors without the written consent of Sealed Air
Corporation and Cryovac, Inc. and (ii) none of the Debtors shall
transfer or agree to transfer a substantial part of its assets (in
one or a series of transactions, whether or not related) to any
Person or Persons without a prior determination of the Court by
Final Order that at the time of each such transaction such
Debtors, collectively with any such successors who will be jointly
and severally liable for the obligations of such Debtors, will
have the ability to pay and satisfy in the ordinary course of
business their respective obligations and liabilities, including,
without limitation, all Indemnified Taxes and all obligations set
forth or referred to in the Settlement Agreement or this
Indemnification Agreement (including, without limitation, all such
obligations set forth in the Confirmation Order or Chapter 11
Plan) and provided, further, that section 4(c)(ii) of this
Indemnification Agreement shall not apply at any time when the
following two conditions in sections 4(c)(ii)(A) and (B) of this
Indemnification Agreement are both satisfied: (A)(1) as a result
of the expiration of the applicable statutes of limitation,
assessment against and collection of Indemnified Taxes from each
of the Released Parties (including assessment and collection
pursuant to section 6901 of the Internal Revenue Code) is barred
by such statutes of limitation and (2) all Indemnified Taxes have
been paid by the Debtors in accordance with the 1998 Tax Sharing
Agreement and the Released Parties have received from the Debtors
(or adequate provision satisfactory to the Released Parties has
been made for the payment of) all indemnification and other
payments claimed by the Released Parties against any of the
Debtors in respect of Indemnified Taxes and related matters in
accordance with the 1998 Tax Sharing Agreement; and (B) the
injunctions required pursuant to paragraph II(c)(vi) of the
Settlement Agreement shall be in effect and there shall not be
pending any lawsuit, action or other judicial or administrative
proceeding (1) alleging an Asbestos-Related Claim and seeking to
impose liability on one or more of the Released Parties
notwithstanding the existence and continuing operative effect of
such injunctions or (2) challenging in any manner the continuance
and operative effect of such injunctions in respect of the
Released Parties.
d. Headings. The article and section headings contained in this
Indemnification Agreement are solely for the purpose of reference,
are not part of the agreement of the parties, and shall not, in
any way, define, limit, extend, or otherwise affect the scope,
meaning, intent, or interpretation of this Indemnification
Agreement or any provision thereof.
e. Applicable Law. This Indemnification Agreement and the rights and
obligations of the parties hereunder shall be governed by and
construed in accordance with the laws of the State of Delaware
(without giving effect to its provisions on conflict of laws).
f. Counterparts. This Indemnification Agreement may be executed in
any number of identical counterparts, any of which may contain the
signatures of less than all parties and all of which together
shall constitute a single agreement.
IN WITNESS WHEREOF, the parties have executed this Indemnification
Agreement as of the date first written above.
SEALED AIR CORPORATION
By: _____________________________________
Print Name: ____________________________
Print Title: ___________________________
CRYOVAC, INC.
By: _____________________________________
Print Name: ____________________________
Print Title: ___________________________
W.R. GRACE & CO.
By: _____________________________________
Print Name: ____________________________
Print Title: ___________________________
W.R. GRACE & CO.-CONN.
By: _____________________________________
Print Name: ____________________________
Print Title: ___________________________
[AS TO EACH OTHER DEBTOR]
By: _____________________________________
Print Name: ____________________________
Print Title: ___________________________
[WILL ADD SIGNATURE LINE FOR EACH
OTHER DEBTOR]
SCHEDULE 1
----------
W. R. Grace & Co. (f/k/a Grace Specialty Chemicals, Inc.)
W.R. Grace & Co.-Conn.
A-1 Bit & Tool Co., Inc.
Alewife Boston Ltd.
Alewife Land Corporation
Amicon, Inc.
CB Biomedical, Inc. (f/k/a Circe Biomedical, Inc.)
CCHP, Inc.
Coalgrace, Inc.
Coalgrace II, Inc.
Creative Food 'N Fun Company
Darex Puerto Rico, Inc.
Del Taco Restaurants, Inc.
Dewey and Almy, LLC (f/k/a Dewey and Almy Company)
Ecarg, Inc.
Five Alewife Boston Ltd.
G C Limited Partners I, Inc. (f/k/a Grace Cocoa Limited Partners I, Inc.)
G C Management, Inc. (f/k/a Grace Cocoa Management, Inc.)
GEC Management Corporation
GN Holdings, Inc.
GPC Thomasville Corp.
Gloucester New Communities Company, Inc.
Grace A-B Inc.
Grace A-B II Inc.
Grace Chemical Company of Cuba
Grace Culinary Systems, Inc.
Grace Drilling Company
Grace Energy Corporation
Grace Environmental, Inc.
Grace Europe, Inc.
Grace H-G Inc.
Grace H-G II Inc.
Grace Hotel Services Corporation
Grace International Holdings, Inc. (f/k/a Dearborn International Holdings, Inc.)
Grace Offshore Company
Grace PAR Corporation
Grace Petroleum Libya Incorporated
Grace Tarpon Investors, Inc.
Grace Ventures Corp.
Grace Washington, Inc.
W.R. Grace Capital Corporation
W.R. Grace Land Corporation
Gracoal, Inc.
Gracoal II, Inc.
Guanica-Caribe Land Development Corporation
Hanover Square Corporation
Hornco International, Inc.
Kootenai Development Company
LB Realty, Inc.
Litigation Management Inc. (f/k/a GHSC Holding, Inc, Grace JVH, Inc,
Asbestos Management, Inc.)
Monolith Enterprises, Incorporated
Monroe Street, Inc.
MRA Holdings Corp.. (f/k/a Nestor-BNA Holdings Corporation)
MRA Intermedco, Inc. (f/k/a Nestor-BNA, Inc.)
MRA Staffing Systems, Inc. (f/k/a/ British Nursing Association, Inc.)
Remedium Group, Inc. (f/k/a Environmental Liability Management, Inc.,
E&C Liquidating Corp.,
Emerson & Curning, Inc.)
Southern Oil, Resin & Fiberglass, Inc.
Water Street Corporation
Axial Basin Ranch Company
CC Partners (f/k/a Cross Country Staffing)
Hayden-Gulch West Coal Company
H-G Coal Company
Any other Debtor
Exhibit 7: LANGUAGE TO BE SET FORTH IN PART II OF FORM 1120X
(OR APPLICABLE SECTION OF ANY SIMILAR STATE OR LOCAL TAX FORM)
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PROTECTIVE CLAIM ONLY
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W.R. GRACE & CO. AND AFFILIATES ASSERT ITS RIGHTS TO THE CLAIMED TAX BENEFITS
CONDITIONALLY AND CONTINGENTLY, AND ONLY IN THE EVENT THAT SUCH TAX BENEFITS
ARE DENIED IN FULL TO CRYOVAC, INC. (OR THE AFFILIATED, COMBINED, UNITARY OR
SIMILAR GROUP OF WHICH SEALED AIR CORPORATION IS THE COMMON PARENT) BY A
DECISION, DECREE OR OTHER ORDER BY A COURT OF COMPETENT JURISDICTION, WHICH
HAS BECOME FINAL AND UNAPPEALABLE, OR BY A CLOSING AGREEMENT OR ACCEPTED OFFER
IN COMPROMISE UNDER SECTION 7121 OR 7122 OF THE INTERNAL REVENUE CODE ENTERED
INTO BY SEALED AIR CORPORATION AND THE INTERNAL REVENUE SERVICE.
This protective claim for refund is filed to preserve the taxpayer's right to
a refund for the calendar year [ ], including any statutory interest thereon,
which is contingent on certain tax benefits claimed on the consolidated return
filed by Sealed Air Corporation, Cryovac, Inc. and their affiliates for the
year ended 200[ ] being denied in full by a decision, decree, or other order
of a court of competent jurisdiction, which has become final and unappealable,
or by a closing agreement, or accepted offer in compromise under section 7121
or 7122 of the Internal Revenue Code of 1986 entered into by Sealed Air
Corporation and the Internal Revenue Service ("Final Determination").
Sealed Air Corporation (formerly, W.R. Grace & Co.) was formerly the parent of
an affiliated group of corporations filing a consolidated return, which group
included, among others, W.R. Grace & Co., and W.R. Grace & Co-Conn. This old
group effected a reorganization pursuant to which, among other things, W.R.
Grace & Co. and W.R. Grace & Co.-Conn. left the group. After this
reorganization, W.R. Grace & Co. and W.R. Grace & Co.-Conn. filed for
bankruptcy protection. In addition, after these events, Cryovac, Inc., Sealed
Air Corporation, and their affiliates became the subject of many lawsuits by
plaintiffs claiming asbestos-related injuries suffered by them during and
after the time that W.R. Grace & Co. and W.R. Grace & Co.-Conn. were members
of the Sealed Air Corporation affiliated group. Cryovac, Inc. and Sealed Air
Corporation subsequently entered into a settlement agreement with committees
representing these plaintiffs. Pursuant to this settlement agreement, Cryovac,
Inc. paid [9,000,000] shares of Sealed Air Corporation common stock and $[ ]
in cash to trusts established for the benefit of plaintiffs claiming
asbestos-related injuries.
Independent Auditors' Consent The Board of Directors Sealed Air Corporation: We consent to the use of our report dated January 24, 2003, with respect to the Consolidated Balance Sheets of Sealed Air Corporation and Subsidiaries as of December 31, 2002 and 2001, and the related Consolidated Statements of Operations, Shareholders' Equity, Cash Flows, and Comprehensive (Loss) Income for each of the years in the three-year period ended December 31, 2002, and the related schedule, incorporated herein by reference and to the reference to our firm under the heading "Experts" in the prospectus. Our report on such consolidated financial statements refers to the Company's adoption of Statement of Financial Accounting Standards No. 142, "Goodwill and Other Intangible Assets," as of January 1, 2002. /s/ KPMG LLP KPMG LLP Short Hills, New Jersey December 22, 2003