As Filed with the Securities and Exchange Commission on July 1, 1996
Registration No. 333-
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM S-3
REGISTRATION STATEMENT UNDER
THE SECURITIES ACT OF 1933
SEALED AIR CORPORATION
(Exact Name of Issuer as Specified in its Charter)
Delaware 22-1682767
(State or Other Jurisdiction (I.R.S. Employer
of Incorporation or Organization Identification Number)
Park 80 East, Saddle Brook, New Jersey 07663-5291
(201) 791-7600
(Address and Telephone Number of Principal Executive Offices)
H. Katherine White, Esq.
Assistant General Counsel and Secretary
Sealed Air Corporation
Park 80 East, Saddle Brook, New Jersey 07663-5291
(201) 791-7600
(Name, Address and Telephone Number of Agent for Service)
Approximate date of proposed sale to the public: From time to
time after this Registration Statement becomes effective.
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
Title of each Proposed Proposed
class of Amount maximum maximum Amount of
securities to be to be offering price aggregate registration
registered registered per unit* offering price fee
Common Stock-par 20,691 $33.31 $689,217.21 $237.66
value $0.01 per shares
share
* Estimated solely for the purpose of determining the amount of
the registration fee in accordance with Rule 457(c) and based on
the average of the high and low sale prices of the Registrant's
Common Stock as reported in the New York Stock Exchange
consolidated reporting system on June 27, 1996.
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 THIS REGISTRATION STATEMENT
SHALL BECOME EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING
PURSUANT TO SECTION 8(A), MAY DETERMINE.
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Prospectus
20,691 SHARES
SEALED AIR CORPORATION
COMMON STOCK
(PAR VALUE $0.01 PER SHARE)
This Prospectus relates to 20,691 outstanding shares
(the "Shares") of Common Stock, par value $0.01 per share (the
"Common Stock"), of Sealed Air Corporation, a Delaware
corporation ("Sealed Air"), that are being sold for the account
of certain stockholders (the "Selling Stockholders") of Sealed
Air. See "Plan of Distribution" for a brief description of the
plan of distribution of the Shares. Sealed Air will not receive
any proceeds from the sale of the Shares.
The Common Stock is traded on the New York Stock
Exchange. The last reported sale price of Sealed Air Common
Stock on the New York Stock Exchange-Composite Transaction Index
on ,1996 was $ per share.
Neither delivery of this Prospectus nor any disposition
or acquisition of Common Stock made pursuant to this Prospectus
shall, under any circumstances, create any implication that there
has been no change in the information set forth herein or
incorporated by reference herein since the date of this
Prospectus or since the dates as of which information is set
forth herein or incorporated by reference herein. No person is
authorized to give any information or to make any representations
other than as contained herein, and if given or made, such
information or representations must not be relied upon as having
been authorized by Sealed Air. This Prospectus does not
constitute an offer to sell or a solicitation of an offer to buy
shares of the Common Stock in any state to any person to whom it
is unlawful to make such offer or solicitation in such state.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION NOR HAS THE COMMISSION OR ANY STATE SECURITIES
COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS
PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL
OFFENSE.
The date of this Prospectus is ,1996.
SUBJECT TO COMPLETION, JULY 1, 1996
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 THIS
REGISTRATION STATEMENT SHALL BECOME EFFECTIVE ON SUCH DATE AS THE
COMMISSION, ACTING PURSUANT TO SECTION 8(A0, MAY DETERMINE.
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STATEMENT OF AVAILABLE INFORMATION
Sealed Air is subject to the informational requirements
of the Securities Exchange Act of 1934, as amended (the "Exchange
Act"), and in accordance therewith files reports, proxy
statements and other information with the Securities and Exchange
Commission ("SEC"). Such reports, proxy statements and other
information filed by Sealed Air can be inspected and copied at
the Public Reference Section of the SEC located at 450 Fifth
Street, N.W., Room 1024, Washington, D.C. 20549, and at regional
public reference facilities maintained by the SEC located at 500
West Madison Street, Suite 1400, Chicago, Illinois 60661, and at
7 World Trade Center, Suite 1300, New York, New York 10048.
Certain of such materials are also available through the SEC's
Electronic Data Gathering and Retrieval System ("EDGAR"). Copies
of such material can be obtained from the Public Reference
Section of the SEC by mail at prescribed rates. Requests should
be directed to the SEC's Public Reference Section, Room 1024,
Judiciary Plaza, 450 Fifth Street, N.W., Washington, D.C. 20549.
Sealed Air's reports, proxy statements and other information
concerning Sealed Air can also be inspected at the offices of the
New York Stock Exchange, 20 Broad Street, New York, New York
10005.
Sealed Air has filed with the SEC a Registration
Statement (together with all amendments and exhibits thereto,
"Registration Statement") under the Securities Act of 1933, as
amended (the "Securities Act"), covering the securities offered
hereby. This Prospectus does not contain all of the information
set forth in the Registration Statement, certain parts of which
are omitted from this Prospectus in accordance with the rules and
regulations of the SEC. For further information, reference is
made to the Registration Statement.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents filed by Sealed Air (File No.
1-7834) with the SEC are hereby incorporated by reference into
this Prospectus:
(a) Sealed Air's Annual Report on Form 10-K for the
year ended December 31, 1995, which incorporates by reference
audited consolidated financial statements of Sealed Air for the
three years ended December 31, 1995 that appear in Sealed Air's
1995 Annual Report to Stockholders;
(b) Sealed Air's Quarterly Report on Form 10-Q for the
quarter ended March 31, 1996; and
(c) the description of Sealed Air's capital stock
which is contained in Item 1 of Sealed Air's Registration
Statement on Form 8-A dated May 1, 1979.
All documents filed by Sealed Air with the SEC pursuant
to Section 13(a), 13(c), 14 or 15(d) of the Exchange Act
subsequent to the date of this Prospectus and prior to the
termination of the offering of the securities covered by this
Prospectus shall be deemed to be
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incorporated by reference in this Prospectus and to be a part hereof
from the respective date of filing of each such document.
Any statement contained herein or in a document
incorporated or deemed to be incorporated by reference herein
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 documents which also is or is deemed
to be incorporated by reference herein or in any prospectus
supplement modifies or supersedes such statement. Any such
statement so modified or superseded shall not be deemed, except
as so modified or superseded, to constitute a part of this
Prospectus.
COPIES OF THE ABOVE DOCUMENTS (EXCLUDING EXHIBITS TO
SUCH DOCUMENTS, UNLESS SUCH EXHIBITS HAVE BEEN SPECIFICALLY
INCORPORATED BY REFERENCE THEREIN) MAY BE OBTAINED UPON ORAL OR
WRITTEN REQUEST WITHOUT CHARGE FROM THE SECRETARY, SEALED AIR
CORPORATION, PARK 80 EAST, SADDLE BROOK, NEW JERSEY 07663-5291
(TELEPHONE NUMBER 201-791-7600).
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THE COMPANY
Sealed Air Corporation and its subsidiaries are engaged
primarily in the manufacture and marketing of protective and
specialty packaging materials and systems.
Originally formed in 1960, Sealed Air is incorporated
in the State of Delaware, and its principal executive office is
located at Park 80 East, Saddle Brook, New Jersey 07663-5291
(Telephone: 201-791-7600).
SELLING STOCKHOLDERS
The shares subject to this offering (the "Shares"), as
listed below, may be offered hereunder from time to time by the
Selling Stockholders named below so long as the Registration
Statement of which this Prospectus forms a part remains
effective. Sealed Air has agreed with the Selling Stockholders
to use its reasonable commercial efforts to keep the Registration
Statement of which this Prospectus forms a part effective until
March 31, 1999.
Number of Shares Number of Shares
Name of Selling Held Prior Subject to
Stockholder to This Offering This Offering
Arthur Philip Paton 5,177 5,177
Olive Margaret Paton 5,173 5,173
Colin Philip Paton 3,447 3.447
Keith Malcolm Paton 3,447 3,447
Estate of Graham Michael 3,447 3,447
Paton
All of the Shares were issued by Sealed Air pursuant to a Share
Purchase Agreement dated as of July 14, 1994 (the "Agreement") among
Sealed Air Limited, a company organized under the laws of England and
a wholly-owned subsidiary of Sealed Air ("SAL"), Arthur Philip Paton, Olive
Margaret Paton, Colin Philip Paton, Keith Malcolm Paton, and
Estate of Graham Michael Paton (such persons being individually
referred to herein as a "Selling Stockholder" and collectively
referred to as the "Selling Stockholders"), and Sealed Air,
pursuant to which SAL acquired all of the stock of Hereford Paper
and Allied Products Limited, a company incorporated under the
laws of England ("Hereford"), and all of the issued and
outstanding shares of Europads SARL, a French company with
limited liability, on July 14, 1994 (the "Hereford Acquisition").
Section 8(d) of the Agreement contains indemnification provisions under
which Sealed Air indemnified the Selling Stockholders and the Selling
Stockholders indemnified Sealed Air and SAL in connection with this
registration and offering.
None of the Selling Stockholders held any position or had a
material relationship with Sealed Air, SAL or any other affiliate
of Sealed Air during the three years preceding the
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consummation of the Hereford Acquisition. Since the Hereford Acquisition,
Colin Paton and Keith Paton, both Selling Stockholders, have been
employed by Hereford, and Colin Paton has served as managing
director of Hereford, the name of which has been changed to
Sealed Air (FPD) Limited.
Based on information furnished to Sealed Air by the Selling
Stockholders, the only shares of Sealed Air Common Stock owned by
them at the commencement of this offering were the shares that
they acquired in the Hereford Acquisition.
PLAN OF DISTRIBUTION
Sealed Air has been advised that the Shares may be sold
from time to time by the Selling Stockholders or by their
respective pledgees, donees, transferees or other successors in
interest. Such sales may be made in one or more transactions on
the New York Stock Exchange, including ordinary brokers'
transactions, block transactions, privately negotiated
transactions effected on that Exchange, or through sales to one
or more brokers or dealers for resale of such Shares as
principals on or off such Exchange, at market prices prevailing
at the time of sale, at prices related to such prevailing market
prices or at negotiated prices. Sealed Air has also been advised
that usual and customary or specially negotiated brokerage fees
or commissions may be paid by the Selling Stockholders in
connection with such sales, where appropriate, and that no
agreements, arrangements or understandings have been entered into
with brokers or dealers pertaining to the distribution of the
Shares. The Selling Stockholders and any brokers or dealers that
participate with the Selling Stockholders in effecting
transactions in the Shares may be deemed, without so admitting,
to be underwriters. Any profits received by the Selling
Stockholders and any discounts, fees or commissions received by
such brokers or dealers might be deemed to be underwriting
discounts or commissions under the Securities Act. In addition,
any of the Shares that qualify for sale pursuant to Rule 144
under the Securities Act may be sold under Rule 144 rather than
pursuant to this Prospectus. Sealed Air will not receive any
proceeds from the sale of the Shares.
LEGAL OPINION
The validity of the shares of Common Stock offered
hereby has been passed upon for Sealed Air by H. Katherine White,
Esq., Assistant General Counsel and Secretary of Sealed Air. As
of the date of this Prospectus, Ms. White was employed by Sealed
Air and was the beneficial owner of approximately 24,980 shares
of Sealed Air Common Stock.
EXPERTS
The consolidated financial statements and financial
statement schedule of Sealed Air and its subsidiaries as of
December 31, 1995 and 1994 and for each of the years in the
three-year period ended December 31, 1995 incorporated by
reference in this Prospectus and in the Registration Statement
have been incorporated by reference herein and in the
Registration Statement in reliance upon the reports of KPMG Peat
Marwick LLP, independent certified public accountants, and upon
the authority of such firm as experts in auditing and accounting.
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PART II
INFORMATION NOT REQUIRED IN THE PROSPECTUS
Item 14. Other Expenses of Issuance and Distribution.
The fees and expenses to be paid by the Registrant in
connection with the distribution of the securities being
registered hereby are estimated as follows:
Registration Fee.................. $ 237.66
Accounting Fees and Expenses...... 7,500.00
Miscellaneous..................... 1,000.00
Total................... $ 8,737.66
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 THIRTEENTH of the Registrant's
Certificate of Incorporation and Article VIII of the Registrant's
By-Laws, indemnification of directors and officers is provided
for to the fullest extent permitted under the General Corporation
Law. Article EIGHTEENTH of the Registrant's Certificate of
Incorporation eliminates the liability of directors for monetary
damages for breach of fiduciary duty as directors, except to the
extent such exemption from liability is not permitted under the
General Corporation Law. The General Corporation Law, the
Registrant's Certificate of Incorporation and the By-Laws of the
Registrant permit the purchase
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by the Registrant of insurance for indemnification of directors and
officers. The Registrant currently maintains directors and officers
liability insurance.
The foregoing summary of Section 145 of the General
Corporation Law, Articles THIRTEENTH and EIGHTEENTH of the
Certificate of Incorporation of the Registrant and Article VIII
of the By-Laws of the Registrant is qualified in its entirety by
reference to the relevant provisions of Section 145, the relevant
provisions of the Registrant's Certificate of Incorporation,
which are incorporated herein by reference to Exhibit 3.2 to the
Registrant's Quarterly Report on Form 10-Q for the quarter ended
June 30, 1995, File No. 1-7834, and the relevant provisions of
the Registrant's By-Laws, which are incorporated herein by
reference to Exhibit 3.3 to the Registrant's Annual Report on
Form 10-K for the year ended December 31, 1993, File No. 1-7834.
The Registrant has agreed to indemnify the Selling
Stockholders named in the Prospectus and the Selling Stockholders
have agreed to indemnify the Registrant and its affiliates
against certain liabilities including certain liabilities under
the Securities Act of 1933, as amended, as set forth in Section
8(d) of the Share Purchase Agreement constituting Exhibit 2 to
this Registration Statement.
Item 16. Exhibits.
Exhibit Number Description
2 Share Purchase Agreement dated as of July 14, 1994
among Sealed Air Limited, Arthur Philip Paton,
Olive Margaret Paton, Colin Philip Paton, Keith
Malcolm Paton and Estate of Graham Michael Paton
and the Registrant.
4.1 Unofficial Composite Certificate of Incorporation
of the Registrant as currently in effect.
(Exhibit 3.2 to the Registrant's Quarterly Report
on Form 10-Q for the quarter ended June 30, 1995,
File No. 1-7834, is incorporated herein by
reference.)
4.2 By-Laws of the Registrant as currently in effect.
(Exhibit 3.3 to the Registrant's Annual Report on
Form 10-K for the year ended December 31, 1993,
File No. 1-7834, is incorporated herein by
reference.)
5 Opinion of H. Katherine White, Assistant General
Counsel and Secretary, Sealed Air Corporation, as
to the legality of the securities being registered
in this Registration Statement.
23.1 Consent of KPMG Peat Marwick LLP.
23.2 Consent of counsel (Contained in opinion filed as
Exhibit 5 to this Registration Statement).
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24 Powers of Attorney (Contained in signature pages
of this Registration Statement).
Item 17. Undertakings.
The undersigned Registrant hereby undertakes:
(1) To file, during any period in which offers or
sales are being made of the securities registered hereby, 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 this
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 this 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% 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 this Registration Statement or any
material change to such information in this
Registration Statement;
provided, however, that the undertakings set forth in 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 Securities Exchange Act of 1934 that are
incorporated by reference in this 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 herein, 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 which
remain unsold at the termination of the offering.
(4) 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) or Section 15(d) of
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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 this Registration Statement shall be
deemed to be a new Registration Statement relating to the
securities offered herein, and the offering of such securities at
that time shall be deemed to be the initial bona fide offering
thereof.
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.
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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 Registration Statement to be signed
on its behalf by the undersigned, thereunto duly authorized, in
the Town of Saddle Brook and the State of New Jersey, on the 1st
day of July, 1996.
SEALED AIR CORPORATION
By s/T. J. DERMOT DUNPHY
T. J. Dermot Dunphy
President
Pursuant to the requirements of the Securities Act of
1933, this Registration Statement has been signed below by the
following persons in the capacities and on the dates indicated.
Each person whose individual signature appears below hereby
authorizes T. J. Dermot Dunphy, William V. Hickey and Robert M.
Grace, Jr., and each of them, as attorneys-in-fact, with full power
of substitution, to execute, in the name and on behalf of each such
person and in each capacity stated below, and to file any amendment
to this Registration Statement, including any and all post-
effective amendments.
Signature Title Date
s/T. J. DERMOT DUNPHY President and Director July 1, 1996
T.J. Dermot Dunphy (Principal Executive
Officer)
s/ WARREN H. MCCANDLESS Senior Vice President- July 1, 1996
Warren H. McCandless Finance (Principal
Financial and
Accounting Officer)
s/JOHN K. CASTLE Director July 1, 1996
John K. Castle
s/LAWRENCE R. CODEY Director July 1, 1996
Lawrence R. Codey
s/CHARLES F. FARRELL, JR. Director July 1, 1996
Charles F. Farrell, Jr.
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s/DAVID FREEMAN Director July 1, 1996
David Freeman
s/ALAN H. MILLER Director July 1, 1996
Alan H. Miller
s/R. L. SAN SOUCIE Director July 1, 1996
R.L. San Soucie
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SEALED AIR CORPORATION
PARK 80 EAST/SADDLE BROOK, NEW JERSEY 07663-5291/
(201) 791-7600/FAX (201) 703-4205
EXHIBIT 5
July 1, 1996
Sealed Air Corporation
Park 80 East
Saddle Brook, NJ 07663
Dear Sirs:
I am the Assistant General Counsel and Secretary of Sealed
Air Corporation, a Delaware corporation (the "Corporation"), and
as such have represented the Corporation in connection with a
Registration Statement on Form S-3 (the "Registration Statement")
of the Corporation providing for the registration under the
Securities Act of 1933, as amended, of 20,691 shares (the
"Shares") of the Corporation's Common Stock, par value $0.01 per
share (the "Common Stock") that are being sold for the account of
certain selling stockholders (the "Selling Stockholders"). All
of the shares covered by the Registration Statement were issued
by the Corporation pursuant to a Share Purchase Agreement dated
as of July 14, 1994 (the "Agreement") among Sealed Air Limited,
a company organized under the laws of England and a wholly-owned
subsidiary of the Corporation ("SAL"), the Selling Stockholders
and the Corporation. Pursuant to the Agreement, SAL acquired
all of the stock of Hereford Paper and Allied Products Limited, a
company incorporated under the laws of England ("Hereford"), and
all of the issued and outstanding shares of Europads SARL, a
French company with limited liability, on July 14, 1994 (the "Hereford
Acquisition").
As counsel for the Corporation, in addition to participating
in the preparation of the Registration Statement, I have reviewed
the resolutions adopted by the Board of Directors of the
Corporation that approved the execution, delivery and performance
of the Agreement and authorized the issuance of the Shares. I
have also reviewed such corporate records, documents, instruments
and certificates and have made such other inquiries as I have
considered necessary in order to furnish a basis for rendering
this opinion.
Based on the foregoing, I am of the opinion that:
1. The Corporation is duly incorporated and validly existing
as a corporation in good standing under the laws of the State of
Delaware.
2. The Shares are and, when sold pursuant to the
Registration Statement will be, legally issued, fully paid and
nonassessable shares of Common Stock of the Corporation.
I hereby consent to the filing of this opinion with the
Securities and Exchange Commission as Exhibit 5 to the
Registration Statement and to the reference to me under the
caption "Legal Opinion" in the Prospectus forming a part thereof.
Very truly yours,
S/H. Katherine White
Assistant General Counsel
and Secretary
Exhibit 23.1
Independent Auditors' Consent
The Board of Directors
Sealed Air Corporation:
We consent to the use of our reports dated January 17, 1996 on the
consolidated financial statements and related schedule of Sealed Air
Corporation and subsidiaries as of December 31, 1995 and 1994, and
for each of the years in the three-year period ended December 31,
1995 incorporated herein by reference and to the reference to our
firm under the heading "Experts" in the prospectus. Our report on
the aforementioned consolidated financial statements refers to a
change in the Company's method of accounting for income taxes in
1993.
KPMG Peat Marwick LLP
Short Hills, New Jersey
June 28, 1996
SHARE PURCHASE AGREEMENT
AGREEMENT dated as of July 14th, 1994 among SEALED AIR
LIMITED, a company organized and existing under the laws of
England ("SAL"), and the individuals listed on Exhibit A hereto
(such persons being herein individually referred to herein as a
"Selling Shareholder" and collectively referred to herein as the
"Selling Shareholders"), joined in for the purposes set forth in
this Agreement by SEALED AIR CORPORATION, a Delaware corporation
("Sealed Air").
WITNESSETH:
WHEREAS, HEREFORD PAPER AND ALLIED PRODUCTS LIMITED, a
company incorporated under the laws of England ("Hereford"), with
its registered office at Netherwood Road, Rotherwas Industrial
Estate, Hereford HR2 6JU, England, has authorized capitalization
of 5,000 ordinary shares, with a nominal value of Ll.00 each
("Hereford Capital Stock"), all of which shares are issued and
fully paid;
WHEREAS, the Selling Shareholders own all of the issued
and fully paid shares of Hereford Capital Stock (the "Fully Paid
Hereford Shares");
WHEREAS, EUROPADS SARL, a company with limited
liability organized and existing under the laws of France
("Europads"), with its registered address at Zone A de la
Madeleine, 53410 Port Brillet, France, has authorized
capitalization of 50,000 common shares with a nominal value of FF
2.00 each ("Europads Capital Stock"), all of which shares are
issued and outstanding;
WHEREAS, prior to the date of this Agreement, certain
of the Selling Shareholders owned all of the issued and
outstanding shares of Europads Capital Stock (the "Outstanding
Europads Shares"); and
WHEREAS, on the terms and subject to the conditions set
forth in this Agreement, the Selling Shareholders have agreed to
cause Hereford to acquire the Outstanding Europads Shares and
thereafter to sell the Fully Paid Hereford Shares to SAL, and SAL
desires to purchase all of the Fully Paid Hereford Shares from
the Selling Shareholders;
NOW, THEREFORE, the parties agree as follows:
1. Purchase and Sale.
(a) Purchase Price. Subject to the terms and
conditions contained in this Agreement, on the Signing Date (as
hereinafter defined), SAL shall purchase from the Selling
Shareholders, and the Selling Shareholders shall sell to SAL, the
Fully Paid Hereford Shares, which shares shall, on the Signing
Date, constitute all of the issued and fully paid shares of
Hereford Capital Stock, in exchange for L1,990,000 (the "Purchase
Price").
(b) Payment of the Purchase Price. The Purchase Price
shall be paid on the Signing Date in cash, by wire transfer to
the account of the Selling Shareholders or by delivery to the
Selling Shareholders of a bank check, in each case for the
portion of the Purchase Price payable to each Selling
Shareholder. Without limiting the generality of the foregoing,
the Selling Shareholders agree that the amount of the Purchase
Price due upon the Signing shall be deemed to have been paid upon
the deposit thereof with their solicitors, Messrs. Lambe Corner &
Co., 36/37 Bridge Street, Hereford HR4 9DJ, England and
acknowledge by their execution and delivery of this Agreement
that such funds have been so deposited.
(c) Performance Consideration. The Selling
Shareholders have delivered to Sealed Air and SAL certain
projections of the gross sales and gross profit of Current
Products (as defined below) of Hereford and Europads for their
fiscal years ending November 30, 1994 and 1995 (the "Performance
Years"). Based upon such projections, SAL agrees to pay as part
of the Purchase Price for the Fully Paid Hereford Shares certain
additional consideration to the Selling Shareholders (the
"Performance Consideration"). The amount of the Performance
Consideration shall be payable to the Selling Shareholders in
proportion to the Fully Paid Hereford Shares they owned at the
time of the Signing either, at SAL's option, in cash or by the
delivery of a whole number of Sealed Air Shares determined in the
manner set forth in Section l(e) not later than thirty (30) days
after the completion of the audit referred to below. Subject to
adjustment as provided below, the amount of the Performance
Consideration shall be determined based upon the attainment by
Hereford and Europads of Total Gross Profit (as defined below) of
Current Products for the Performance Years as follows:
Total Performance
Gross Profit Consideration
L 3,172,000 L 300,000
3,872,000 1,000,000
4,172,000 1,300,000
The amount of the Performance Consideration shall be reduced or
increased Pound Sterling for Pound Sterling, as the case may be,
proportionately for each Pound Sterling of Total Gross Profit
below or above L3,872,000; provided that, except as provided
below, the aggregate amount of the Performance Consideration
shall not be less than L300,000 nor more than L1,300,000. As
used herein,
(i) the term "Current Products" shall mean paper
products for use when packaging meat, poultry, fish or
other foods, super absorbent papers for use in food
transportation and other purposes, wet laid and non-
woven filtration papers, sterilizable or peelable wet
laid or non-woven medical papers, and air freshener and
general products heretofore manufactured and sold by
Hereford and Europads or that are developed by Hereford
or Europads during the Performance Years, but not
including for purposes of this Section 1(c) any product
developed, manufactured or sold by SAL or its
affiliates; and
(ii) the term "Total Gross Profit" shall mean the
aggregate for the Performance Years (including for
purposes of such calculation the period prior to the
Closing) of the consolidated gross sales by Hereford
and Europads of Current Products less, for each such
fiscal year, (x) the cost of raw materials acquired
during such fiscal year, (y) the difference at the end
of such fiscal year between opening and closing
inventories of raw materials, work-in-process and
finished Current Products at the beginning of such
fiscal year, and (z) direct labor costs incurred in
connection therewith during such fiscal year computed
in a manner consistent with the accounting principles
used by Hereford and Europads in their fiscal years
ended November 30, 1993.
The amount of the Performance Consideration shall be determined
based upon an audit of the gross sales and gross profits of the
Current Products for the Performance Years performed by KPMG Peat
Marwick or such other firm of public accountants as shall be
reasonably acceptable to Sealed Air, SAL and the Selling
Shareholders provided that, notwithstanding any other provision
of this Agreement, the amount of the Performance Consideration
shall be reduced by the amount of any payment falling to be made
in relation to the matters referred to in clause 6.5 of the
Taxation Deed (as defined in clause 3(a)(vi)). Nothing contained
in this Section l(c) shall require SAL or its affiliates to
retain the separate corporate existence of Hereford or Europads
during the Performance Years; provided that SAL shall maintain or
cause to be maintained such accounting records as shall be
necessary to determine the amount of the Performance
Consideration; provided further that SAL agrees to use, and to
cause its affiliates to use, reasonable commercial efforts during
the Performance Years to promote the manufacture and sale of
Current Products.
(d) Payment of the Performance Consideration. SAL
shall have the option to pay all or any portion of the
Performance Consideration either in cash in the manner set forth
in Section 1(b) or by delivering to the Selling Shareholders in
payment of such portion of the Performance Consideration as SAL
shall determine in its sole discretion a number of whole shares
of Sealed Air's Common Stock, par value $0.01 (U.S.) per share
("Sealed Air Common Stock"), determined pursuant to Section l(e)
of this Agreement.
(e) Determination of Sealed Air Shares.
(i) The aggregate number of whole shares (the
"Sealed Air Shares") of Sealed Air Common Stock to be
delivered to the Selling Shareholders in payment, at
SAL's option, of all or a portion of the Performance
Consideration shall be determined by dividing the
portion of such payment to be paid in Sealed Air Shares
by the Average Closing Market Price (as hereinafter
defined) expressed in Pounds Sterling and rounding the
quotient to the next lowest whole share. The term
"Average Closing Market Price" shall mean the average
of the closing market prices for Sealed Air Common
Stock as reported in The Wall Street Journal for each
of the five days on which such shares are traded on the
New York Stock Exchange ("Trading Days") immediately
preceding the date (the "Determination Date") which is
ten Trading Days before the date on which such shares
are to be delivered to the Selling Shareholders. The
exchange rate that shall be applied to express the
Average Closing Market Price in Pounds Sterling shall
be the spot rate of exchange for the conversion of U.S.
Dollars into Pounds Sterling as reported in The Wall
Street Journal at the close of business on the
Determination Date.
(ii) No fractional Sealed Air Shares shall be
delivered to the Selling Shareholders. If a fractional
share of Sealed Air Common Stock would be issuable to
any Selling Shareholder pursuant to Section l(d), such
Selling Shareholder shall be entitled to receive in
lieu thereof, without duplication, as part of the
Performance Consideration, an amount in cash determined
by multiplying the Average Closing Market Price
(expressed in Pounds Sterling) by the fraction of a
share of Sealed Air Common Stock to which such Selling
Shareholder would otherwise have been entitled.
2. Signing.
(a) Time and Place of Signing. The Signing under
this Agreement (the "Signing") shall take place, unless SAL,
Sealed Air and the Selling Shareholders agree upon another date
or place, at the offices of Wragge & Co., 55 Colmore Row,
Birmingham B3 2AS, England, at 10:00 A.M., local time, on a date
(the "Signing Date") to be mutually agreed upon after the
conditions set forth in Sections 3(a) and 3(b) shall have been
satisfied, which date shall, unless otherwise agreed, not be
later than September 30, 1994. The parties each agree to use all
reasonable commercial efforts to cause the conditions set forth
in Sections 3(a) and 3(b) to be satisfied. Notwithstanding the
foregoing, in the event that the Signing does not occur on or
before September 30, 1994, either SAL or the Selling Shareholders
may, upon written notice to the other, terminate this Agreement
without liability to any of the other parties hereto.
(b) Exchange of Stock Certificates; Method of Payment.
At the Signing, subject to the satisfaction on or
before the Signing Date of the conditions set forth in Section 3:
(i) the Selling Shareholders shall deliver to SAL
certificates for the Fully Paid Hereford Shares, duly
endorsed for transfer to SAL, which certificates shall
represent all of the then issued and fully paid shares
of Hereford Capital Stock; and
(ii) SAL shall deliver to the Selling
Shareholders, proportionately to their ownership of the
Fully Paid Hereford Shares, an amount in cash equal to
the Purchase Price in the manner provided for in
Section 1(b).
(c) Delivery Constitutes Affirmation. The delivery to
SAL pursuant to Section 2(b) of the certificates for the Fully
Paid Hereford Shares shall constitute an affirmation by the
Selling Shareholders (i) that the representations and warranties
of the Selling Shareholders contained in this Agreement are true
and accurate on the Signing Date and (ii) that the Selling
Shareholders have duly performed or caused to be performed all
covenants, conditions and obligations to be performed or
satisfied on or before such date under this Agreement by the
Selling Shareholders or Hereford.
3. Conditions to the Signing.
(a) Conditions to Sealed Air's and SAL's Obligations.
The obligations of SAL to effect the Signing and to purchase the
Fully Paid Hereford Shares are subject to the satisfaction, on or
before the Signing Date, of the following conditions:
(i) Board Approval. The Boards of Directors of
Sealed Air and SAL shall have approved the transactions
contemplated by this Agreement.
(ii) Listing of the Sealed Air Shares. The Sealed
Air Shares shall have been authorized for listing on
the New York Stock Exchange upon official notice of
issuance.
(iii) Acquisition and Capitalization of Europads.
Hereford shall have acquired all of the Outstanding
Europads Shares at an aggregate price not to exceed
l10,000, shall be the sole beneficial owner thereof,
Hereford shall have contributed to the capital of
Europads the outstanding amount of the receivables and
other obligations owing from Europads to Hereford
(provided that at the time of such contribution and of
the Signing the amount of such receivables and other
obligations shall not exceed L498,000); and Europads
shall be solvent and not subject to liquidation under
the laws of France as a consequence of its heretofore
accumulated losses.
(iv) Renegotiation of Europads' Lease. The lease
of Europads manufacturing facility in Port Brillet,
France shall have been modified in a manner
satisfactory to SAL and Sealed Air.
(v) Employment Matters. Mr. Colin P. Paton shall
have entered into an Employment Agreement dated the
Signing Date on substantially the terms and conditions
set forth in Exhibit B, and such other employees as SAL
shall have determined to be key employees of Hereford
or Europads shall have entered into service agreements
providing for their continued employment by Hereford or
Europads after the Signing in form and substance
satisfactory to SAL.
(vi) Execution of Taxation Deed. The Selling
Shareholders shall have executed and delivered to SAL
and Sealed Air a Taxation Deed in the form of Exhibit C
(the "Taxation Deed").
(vii) Advances and Loans. No advances or loans
by Hereford to any Selling Shareholder or to employees,
affiliates or agents of Hereford or any Selling
Shareholder shall be outstanding.
(viii) Outstanding Indebtedness. The amount of the
outstanding Indebtedness (as hereinafter defined) of
Hereford and Europads on the Signing Date shall not
exceed Ll,500,000. As used in this Agreement in
capitalized form, the term "Indebtedness" shall include
indebtedness for borrowed money, including without
limitation capitalized lease obligations and bank
overdrafts, but shall exclude obligations to trade
creditors maintained in the ordinary course of
business.
(ix) Due Diligence. Sealed Air and SAL shall have
completed a due diligence review of Hereford including
without limitation a financial review or audit by KPMG
Peat Marwick of Hereford's and Europads financial
condition and tax situation and environmental reviews
of the facilities and operations of Hereford and
Europads, which reviews and audits shall be
satisfactory to SAL and Sealed Air in their sole
discretion.
(x) Permits, Approvals, Litigation, Etc. All
permits and approvals from any governmental agency or
regulatory authority required for the lawful
consummation of the transactions contemplated by this
Agreement shall have been obtained and shall remain in
full force and effect (including without limitation the
notification to and approval by the French Ministry of
Economy of the acquisition by Hereford of the
Outstanding Europads Shares). No legal proceeding
shall be pending or overtly threatened, or any basis
for such a proceeding asserted, before any court or by
any governmental agency or regulatory authority of any
jurisdiction directed against the consummation of any
of the transactions contemplated by this Agreement
which, in the opinion of counsel to and in the judgment
of SAL or Sealed Air, makes it impracticable or
inadvisable on the part of SAL to proceed with the
transactions contemplated by this Agreement. SAL,
Sealed Air and the Selling Shareholders shall have
obtained all consents and permits, if any are required,
from third parties in connection with the performance
of this Agreement (including without limitation any
consents of Hereford's lenders or other creditors).
(xi) Current Financial Statements. Hereford shall
have delivered to SAL and Sealed Air (A) unaudited
balance sheets of Hereford and Europads as of March 31,
1994 and their related unaudited statements of income
and changes in financial position for the cumulative
accounting period then ended, in form and substance
satisfactory to Sealed Air and SAL, certified by the
Managing Director of Hereford, and (B) unaudited
balance sheets of Hereford and Europads as of the most
recent month-end preceding the Signing Date for which
such statements are available (in accordance with the
ordinary practices of Hereford and Europads) and the
related unaudited statements of income and changes in
financial position of each of them for the quarter and
month, respectively, then ended and for the cumulative
accounting period then ended, which financial
statements shall be certified by the Managing Director
of Hereford.
(xii) No Material Adverse Change. There shall have
been no material adverse change in the business, assets
or prospects, financial or otherwise, of Hereford or
Europads since November 30, 1993.
(xiii) Accuracy of Representations and Warranties.
The representations and warranties of the Selling
Shareholders contained in this Agreement shall be true
and accurate on the Signing Date as if made on such
date (except as affected by the transactions
contemplated by this Agreement and except to the extent
that any such representations and warranties have been
made as of a specified date, in which case such
representations and warranties shall have been true and
accurate as of such specified date).
(xiv) Performance of Agreements. The Selling
Shareholders shall have duly performed, and shall have
caused Hereford and Europads to duly perform, on or
before the Signing Date all covenants and obligations
to be performed by them under this Agreement.
(xv) Brokerage Commission. The Selling
Shareholders shall have paid, or shall have made
arrangements satisfactory to Sealed Air and SAL for the
payment of all, fees and commissions to which Henry
Butcher & Co., who has acted as their broker in
connection with the sale of Hereford and Europads, is
entitled.
(xvi) Satisfaction of Sealed Air's Counsel. All
legal aspects of the transactions contemplated by this
Agreement shall be accomplished in a manner
satisfactory to Sealed Air's counsel.
(b) Conditions to the Selling Shareholders'
Obligations. The obligations of the Selling Shareholders to sell
the Fully Paid Hereford Shares and to effect the Signing are
subject to the satisfaction, on or before the Signing Date, of
the condition that SAL and Sealed Air shall have duly performed
all covenants and obligations to be performed by them under this
Agreement on or before the Signing Date.
4. Representations, Warranties and Covenants of each
Selling Shareholder.
Each Selling Shareholder represents and warrants to and
covenants with SAL and Sealed Air as follows:
(a) Such Selling Shareholder has the full legal right,
power and authority to sell, assign and transfer the Fully Paid
Hereford Shares owned by such Selling Shareholder.
(b) The Fully Paid Hereford Shares owned by such
Selling Shareholder are, and at the time of their transfer to SAL
will be, free and clear of all restrictions on transfer, liens,
claims, equities, security interests and encumbrances of any kind
or nature whatsoever, and delivery of such shares to SAL as
provided in Section 2(b) will transfer to SAL good and marketable
title thereto free and clear of all restrictions on transfer,
claims, liens, equities, security interests and encumbrances of
any kind or nature whatsoever.
(c) This Agreement is such Selling Shareholder's
legal, valid and binding obligation, enforceable against such
Selling Shareholder in accordance with its terms.
(d) The execution, delivery and performance of this
Agreement by such Selling Shareholder will not conflict with,
result in any breach of, or constitute a default under or cause
the acceleration of, or require any consent, approval or other
action of any third party, court or governmental authority
pursuant to, any mortgage, indenture, or other agreement or
instrument, lien, license, permit, judgment, decree, statute,
ordinance, rule, regulation, proceeding or order or any other
restriction of any kind or character to which such Selling
Shareholder is a party or by which such Selling Shareholder is
bound or affected.
(e) Such Selling Shareholder has received a copy of
Sealed Air's Annual Report on Form 10-K as filed with the
Securities and Exchange Commission (without the exhibits
thereto), and of Sealed Air's Annual Report to Shareholders, each
for the year ended December 31, 1993, a copy of Sealed Air's
Proxy Statement dated March 30, 1994 for the Annual Meeting of
Sealed Air's Shareholders to be held on May 20, 1994, and a copy
of each Quarterly Report on Form 10-Q for each calendar quarter
ending after January 1, 1994 through the Signing Date, and Sealed
Air has afforded to such Selling Shareholder access to such other
public information regarding the business and financial affairs
of Sealed Air as such Selling Shareholder has deemed necessary to
enable such Selling Shareholder to make an informed investment
decision with respect to the acquisition of Sealed Air Shares by
such Selling Shareholder.
(f) Such Selling Shareholder has such experience in
business and financial matters or has obtained advice from a
person with such experience so as to be able to evaluate
independently the merits and risks of an investment in the Sealed
Air Shares that may be issued to such Selling Shareholder, and
such Selling Shareholder is able to bear the economic risk of an
investment in the Sealed Air Shares that may be issued to such
Selling Shareholder including, without limiting the generality of
the foregoing, the risk of losing all or any part of such Selling
Shareholder's investment in the Sealed Air Shares that may be
issued to such Selling Shareholder and the inability of selling
or otherwise transferring or disposing of such Sealed Air Shares
for an indefinite period of time.
(g) Such Selling Shareholder has been afforded an
opportunity to ask questions about and receive answers in
response concerning the business and financial affairs of Sealed
Air from representatives of Sealed Air and the opportunity to
obtain any additional publicly available information that such
Selling Shareholder desired with respect to Sealed Air.
(h) If such Selling Stockholder is a personal
representative of the estate of Graham Michael Paton (the
"Estate"), such Selling Stockholder (the "Personal
Representative") represents and warrants, both in such Personal
Representative's individual capacity and in such person's
capacity as personal representative of the Estate, that:
(i) such Personal Representative has been duly
appointed and is currently serving as a personal
representative of the Estate and there are no personal
representatives of such estate except for such as have
been identified to Sealed Air and SAL;
(ii) such Personal Representative has delivered to
Sealed Air and SAL a complete and correct copy of all
documents and other instruments evidencing the
authority of such Personal Representative to act for
the Estate;
(iii) such Personal Representative has all
necessary power and authority to enter into this
Agreement and all other related agreements to which
such Personal Representative is a party (as personal
representative of the Estate) and to perform such
Personal Representative's obligations hereunder and
thereunder;
(iv) except for such as have been obtained, no
consent, approval, authorization or other action on the
part of (A) any of the beneficiaries of the Estate or
any other person or entity or (B) any court,
governmental body or authority, is necessary to permit
the Personal Representative to enter into this
Agreement and all other related agreements to which
such Personal Representative is a party (as personal
representative of the Estate) and to perform any of his
or her obligations hereunder or thereunder; and
(v) the execution and delivery of this Agreement
and all other related agreements to which such Personal
Representative is a party (as personal representative
of such estate) will not, and the consummation of the
transactions contemplated hereby and thereby will not,
result (with or without notice, lapse of time or both)
in (A) any breach or violation of any of such Personal
Representative's duties or obligations as Personal
Representative or otherwise, (B) any breach or
violation of such Personal Representative's authority
as such or of any agreement or understanding to which
such Personal Representative is a party or by which
such Personal Representative or any of the assets of
the Estate is bound, or (C) any breach or violation of
any judgment, order, decree, law, rule or regulation by
which such Personal Representative or any of the assets
of the Estate is bound or to which such Personal
Representative or any of the assets of the Estate are
otherwise subject.
5. Additional Representations, Warranties and
Covenants of the Selling Shareholders.
The Selling Shareholders (including, with respect to
the Estate, each Personal Representative solely in his or her
capacity as such), jointly and severally, represent and warrant
to and covenant with Sealed Air and SAL as follows:
(a) Organization, Standing, Etc. Hereford is a
company in good standing incorporated under the laws of England
and has all requisite corporate power and authority to own, lease
and operate its properties and assets and to carry on its
business as now conducted. Europads is a duly organized and
validly existing corporation in good standing under the laws of
France and has all requisite corporate power and authority to
own, lease and operate its properties and assets and to carry on
its business as now conducted.
(b) Capitalization. Hereford has an authorized
capitalization of 5,000 ordinary shares of Hereford Capital
Stock, nominal value Ll.00 per share, all of which are issued and
fully paid with no personal liability attaching to the ownership
thereof. Europads has an authorized capitalization of 50,000
shares of Europads Capital Stock, nominal value FF 2.00 per
share, all of which are issued and outstanding. No shares of
Europads Capital Stock are held in treasury. The outstanding
shares of Hereford Capital Stock and Europads Capital Stock are
free of any usufruct, pledge, charge, security or claim of any
third party whatsoever.
(c) Charter Documents. The Selling Shareholders have
delivered to Sealed Air and SAL a true, correct and complete copy
of the charter documents of Hereford and Europads (including all
amendments thereto). No action or proceeding is pending or
contemplated for the amendment of the charter documents of
Hereford or Europads or for the dissolution or liquidation of
Hereford or Europads.
(d) Outstanding Options, Warrants or Other Rights.
Neither Hereford nor Europads has outstanding any options,
warrants or other rights permitting or requiring it or others to
purchase or convert any obligation into shares of Hereford
Capital Stock or Europads Capital Stock, has agreed to issue any
shares of Hereford Capital Stock or Europads Capital Stock, nor
has made any commitment to increase the capital stock of Hereford
or Europads except, with respect to Europads, as contemplated by
this Agreement. Either (i) there are no voting trusts or other
agreements or understandings with respect to the voting or
transfer of shares of Hereford Capital Stock or Europads Capital
Stock and shares of Hereford Capital Stock and Europads Capital
Stock are not subject to any pre-emptive rights, rights of first
refusal or similar rights, or (ii) each of the Selling
Shareholders hereby unconditionally and irrevocably waives all
rights of pre-emption or similar rights over any of the Fully
Paid Hereford Shares or the Outstanding Europads Shares conferred
on such Selling Shareholder by the charter documents of Hereford
or Europads or in any other way.
(e) Subsidiaries. Except that, as of the Signing
Date, Hereford will own good and marketable title to all of the
Outstanding Europads Shares free and clear of all restrictions on
transfer, liens, claims, equities, security interests and
encumbrances of any kind or nature whatsoever, Hereford has no
subsidiaries, nor does Hereford have any investment in any other
company or other entity.
(f) Record Ownership. The Selling Shareholders are
the registered holders and beneficial owners of all of the
outstanding shares of Hereford Capital Stock, and the number of
shares held by them in Hereford are as set forth in Exhibit A.
(g) Financial Statements. The Selling Shareholders
have delivered to Sealed Air and SAL (i) audited financial
statements of Hereford and Europads including any related notes
thereto and any reports thereon for each of their three fiscal
years ended November 30, 1993, and (ii) unaudited financial
statements of Hereford and Europads for the fiscal period ended
March 31, 1994. Except as has been disclosed to Sealed Air and
SAL in writing, such financial statements have been prepared in
accordance with generally accepted accounting principles
consistently applied and fairly present the financial position,
income and changes in financial position of Hereford and Europads
as of the dates and for the respective periods indicated. Such
balance sheets in all material respects make full and adequate
provision for all fixed and contingent obligations and
liabilities of Hereford and Europads as of the dates and for the
periods indicated required by generally accepted accounting
principles consistently applied to be therein provided for, and
as of the respective dates of such financial statements Hereford
and Europads had no obligations or liabilities of any nature not
reflected in and adequately reserved against on such balance
sheets as required by generally accepted accounting principles
consistently applied to be so reflected or reserved against. To
the best of the knowledge of the Selling Shareholders, there is
no basis for the assertion against Hereford and Europads of any
material liability or obligation not adequately reflected in or
reserved against in such financial statements.
(h) Certain Changes or Events. Since November 30,
1993, neither Hereford nor Europads has:
(i) experienced any material change in its
condition (financial or otherwise), properties, assets,
liabilities, business, operations or prospects other
than changes in the ordinary course of business which
have not been materially adverse;
(ii) declared, made or paid any dividend or other
distribution in respect of its capital stock or
purchased or redeemed, directly or indirectly, any
shares of its capital stock, or made any other payment
to any Selling Shareholder except for normal
emoluments, reimbursements of business expenses, and
amounts payable to a Selling Shareholder pursuant to
written agreements in effect prior to November 30, 1993
disclosed in the Disclosure Schedule to this Agreement
(the "Disclosure Schedule");
(iii) except, with respect to Europads, as
contemplated by this Agreement, issued or committed to
issue any shares of its capital stock of any class or
any options, warrants or conversion or other rights to
purchase any such shares or interests or any securities
convertible into or exchangeable for such shares or
interests;
(iv) incurred any additional Indebtedness for
borrowed money, except pursuant to lines of credit
existing at November 30, 1993, or issued or sold any
debt securities;
(v) mortgaged, pledged or subjected to any lien,
lease, security interest or other charge or
encumbrance, or granted any option with respect to any
of its properties or assets, tangible or intangible;
(vi) acquired or disposed of any assets or
properties of material value;
(vii) forgiven or cancelled any debts or claims or
waived any material rights;
(viii) entered into any material transaction other
than in the ordinary course of business;
(ix) granted to any director, officer or salaried
employee or any class of other employees any increase
in compensation in any form in excess of the amount
thereof in effect as of November 30, 1993 (other than
normal periodic salary reviews in amounts consistent
with past practices) or any severance or termination
pay (other than in minor amounts consistent with past
practices), or entered into any written employment
agreement or arrangement with any person;
(x) entered into, adopted or amended in any
respect any collective bargaining agreement or adopted
or amended any fringe benefit, bonus, profit-sharing,
compensation, stock option, pension, retirement,
deferred compensation, insurance or other similar plan,
agreement, trust, fund or arrangement for the benefit
of employees (whether or not legally binding);
(xi) suffered any damage, destruction or loss
(whether or not covered by insurance) which materially
and adversely affects or could materially and adversely
affect its condition (financial or otherwise),
properties, assets, business, operations or prospects
envisioned by it;
(xii) suffered any loss of employees or customers
that materially and adversely affects or could
materially and adversely affect it; or
(xiii) incurred any material liability or obligation
(fixed or contingent) except (A) liabilities and
obligations in the ordinary course of business and (B)
other liabilities and obligations not exceeding L20,000
in the aggregate.
(i) Title to Properties; Liens. Each of Hereford and
Europads has good and marketable title to, or valid and
subsisting leasehold interests in, all of its properties and
assets, real and personal, tangible and intangible. Such
properties and assets constitute all of the properties and assets
necessary or currently being used to conduct the business of
Hereford and Europads as now being conducted, and there has been
no loss or casualty with respect to such properties or assets
whether or not covered by the proceeds of insurance. Except as
described in the Disclosure Schedule, such properties and assets
are subject to no mortgage, option, pledge, lien, charge,
encumbrance, security interest, conditional sale or other title
retention agreement or to any easements, rights of way, building
or use restrictions, exceptions, reservations or limitations
which in any material respect interfere with or impair the
present and continued use thereof in the usual and normal conduct
of the business of Hereford and Europads, and each of Hereford
and Europads is in exclusive and undisputed occupation of the
whole of its real properties. There is not under any lease of
real or personal property to which Hereford and Europads is a
party any existing default or event of default or event which
with notice or lapse of time or both would constitute a default,
nor is there any actual or contingent liability under any lease
of real or personal property except for such liabilities as are
disclosed in the Disclosure Schedule. The Disclosure Schedule
contains a true and complete list and brief description of all
real and material personal properties owned or leased by Hereford
or Europads, including any significant structures located on any
of such real properties. All improvements on such real
properties have been made and all operations thereof have been
conducted so as to comply with and conform to, and to the best
knowledge of the Selling Shareholders do not fail to comply with
and conform to, any and all applicable health, fire,
environmental (including without limitation air and water
pollution laws and regulations and other laws and regulations
relating to the discharge of materials into the environment and
to the disposal of solid, toxic, hazardous and other wastes),
safety, and building laws and other applicable statutes, rules
and regulations, except for violations which (or the curing of
which) would not have a materially adverse effect on the conduct
of the present business activities of Hereford or Europads. All
such improvements and operations comply with all zoning laws,
ordinances and regulations applicable to such real properties.
The buildings, structures, fixtures, machinery and equipment used
by Hereford and Europads in the conduct of their business are in
good operating condition and repair. Neither Hereford nor
Europads has, since deduction of title to SAL's solicitors,
entered into any transaction affecting the title to any of the
real properties owned by Hereford or Europads.
(j) Patents and Other Rights. There are no:
(i) patents, patent applications, inventions as
to which either Hereford or Europads has commenced
action to apply for patents, trademarks (either
registered or registration applied for), trade names
and copyrights that are as of the date of this
Agreement (A) owned or otherwise held in the name of
Hereford or Europads or (B) owned by or otherwise held
in the name of third parties in which Hereford or
Europads has any interest by license or otherwise; or
(ii) licenses, assignments and agreements to which
Hereford or Europads is a party relating to any patent,
patent application, trademark (either registered or
registration applied for), trade name, copyright,
process, design, trade secret, know-how or technology
owned by or otherwise held in the name of Hereford or
Europads.
To the best of the knowledge of the Selling Shareholders, neither
Hereford nor Europads has infringed, is infringing, or has
engaged or is engaging in any unauthorized use or
misappropriation of, any patent, trademark, trade name, copyright
(including any copyright relating to software), process, design,
invention, trade secret, know-how or technology owned by or
belonging to any third party and used in the business of Hereford
or Europads, and there is no basis nor would there be any basis
for the assertion of any claim against Hereford or Europads of
such infringement, unauthorized use or misappropriation. There
is no pending or threatened claim of such nature against Hereford
or Europads. There are no items of the type described in clauses
(i) and (ii) that are required or are being used to carry on the
business of Hereford or Europads substantially as now conducted.
(k) Litigation, Etc. Except as disclosed in the
Disclosure Schedule, there are no actions, suits, proceedings or
investigations pending or, to the best of the knowledge of the
Selling Shareholders, threatened against or affecting Hereford or
Europads, at law or in equity, before any court, commission,
board, bureau, agency, instrumentality or other governmental
authority. To the best of the knowledge of the Selling
Shareholders, there are no claims that have not been asserted
against Hereford or Europads that are probable of assertion.
(l) Accounts Receivable. The accounts receivable of
Hereford and Europads as shown on their balance sheets at
November 30, 1993 and March 31, 1994, or thereafter acquired by
them, are usual and normal receivables and, through the
continuation of existing collection procedures, are and on the
Signing Date will be collectible in the case of Hereford within
thirty (30) days and in the case of Europads within sixty (60)
days after the end of the calendar month in which they arose in
the aggregate amounts thereof, after allowance for doubtful
accounts in the amount of the reserves established therefor as
reflected in such balance sheets.
(m) Inventory. Except as has been disclosed to and
accepted by Sealed Air, the inventories of Hereford and Europads
shown on their balance sheets at November 30, 1993 and March 31,
1994, or thereafter acquired by them, consist of items of a
quality and quantity usable or saleable in the normal course of
the businesses of Hereford and Europads; the value of all items
of obsolete materials and of materials of below standard quality
has been written down to realizable market value or adequate
reserves have been provided therefor; and the value at which such
inventory is carried reflects the normal inventory valuation
policies of Hereford and Europads.
(n) Governmental Consents, Etc. Except for such as
are disclosed in this Agreement or the Disclosure Schedule, all
of which will be obtained on or before the Signing Date, neither
Hereford, Europads nor any of the Selling Shareholders is
required to obtain any consent, approval or authorization of any
governmental authority in connection with the execution, delivery
and performance of this Agreement or the consummation of the
transactions contemplated by this Agreement.
(o) Disclosure. Neither this Agreement, nor the
financial statements referred to in Section 5(g), nor any other
document, certificate, schedule or written statement furnished to
Sealed Air or SAL by or on behalf of Hereford, Europads or any
Selling Shareholder in connection with this Agreement or the
consummation of the transactions contemplated by this Agreement,
contains or will contain any untrue statement of a material fact
or omits or will omit to state a material fact known or which in
the exercise of reasonable care should be known by any Selling
Shareholder to be necessary in order to make the statements
contained herein or therein not misleading.
(p) Compliance With Other Instruments, Etc. Except
for the consents described in the Disclosure Schedule, which
consents will be obtained prior to the Signing, the execution,
delivery and performance of this Agreement by the Selling
Shareholders and the performance by Hereford and Europads of the
obligations that the Selling Shareholders have agreed hereunder
to cause them to perform under this Agreement will not conflict
with, result in any breach of, or constitute a default under or
cause the acceleration of, or require any permit, approval,
consent or other action by any other person pursuant to any
provision of any charter, bylaw, mortgage, indenture, lien,
license, permit, lease, option or other material agreement or
instrument, judgment, decree, ordinance, regulation, proceeding
or order or any other restriction of any other kind or character
to which Hereford or Europads is a party or by which Hereford or
Europads or any of their respective properties may be bound or
affected.
(q) Compliance With Law. Each of Hereford and
Europads holds all registrations, licenses, franchises, permits
and authorizations necessary for the lawful conduct of its
business and has conducted its business so as to comply, and to
the best knowledge of the Selling Shareholders has complied and
is complying in all material respects, with all applicable
statutes, laws, ordinances, rules and regulations (including
without limitation all such statutes, laws, ordinances, rules and
regulations that relate to the environment, occupational safety,
employment opportunity or other terms of employment, product
safety or the testing, licensing or registration of their
respective products) of all governmental agencies or other bodies
with jurisdiction over it or over any part of its operations and
is not in violation of any thereof, except for such
registrations, licenses, franchises, permits and authorizations,
the lack of which, and for such statutes, laws, ordinances, rules
and regulations, non-compliance with or violations of which (or
the curing thereof), in any one case or in the aggregate, would
not have a materially adverse effect on the assets, liabilities,
earnings, business, prospects or condition (financial or
otherwise) of Hereford or Europads or impair the Selling
Shareholders ability or the ability of Hereford or Europads to
consummate the transactions contemplated by this Agreement.
(r) Existing Contracts. All material contracts,
agreements, leases, licenses and understandings to which Hereford
or Europads is a party (true, correct and complete copies of
which have been delivered or made available to SAL and Sealed
Air) are in full force and effect and no default, or event which
with notice or lapse of time or both would constitute a default,
exists in respect thereof on the part of Hereford or Europads or,
to the best of the knowledge of the Selling Shareholders, the
other parties thereto. Except as disclosed in the Disclosure
Schedule, neither Hereford nor Europads is a party to nor does it
have any material obligation, contingent or otherwise, under any
(i) written or oral contract not made in the ordinary course of
business, (ii) employment contract or other contract with or for
the benefit, directly or indirectly, of any officer, director,
shareholder or employee, (iii) collective bargaining agreement
with employees, (iv) bonus, pension, profit-sharing, retirement,
stock purchase, hospitalization, insurance or other plans
providing employee benefits, (v) lease with respect to any
property, real or personal, whether as lessor or lessee that may
not be cancelled by it on less than 90 days notice, (vi) contract
for the purchase or provision of goods or services by Hereford or
Europads for an aggregate price in excess of L20,000 per
contract, (vii) contract or commitment for capital expenditures
in excess of L20,000 in the aggregate, (viii) contract continuing
over a period of more than one year from its date, (ix) mortgage,
loan or credit agreement, (x) contract requiring consent to the
transactions contemplated by this Agreement, (xi) contract to act
as an agent of any person, (xii) guaranty of the obligations of
any other person, (xiii) contract for the distribution, sale or
marketing of its products by others, or (xiv) any other material
contract, agreement or understanding, written or oral, affecting
Hereford or Europads whether or not Hereford or Europads is a
party thereto.
(s) Outstanding Indebtedness. Except as reflected in
the financial statements referred to in Section 5(g), neither
Hereford nor Europads has any outstanding Indebtedness, other
than uncapitalized leases and trade or business obligations
subsequently incurred in the ordinary course of business, and
neither Hereford nor Europads is in default in respect of any
terms or conditions of any such Indebtedness or of any such
uncapitalized leases or trade or business obligations.
(t) Taxes, Etc.
(i) Europads. Europads has filed or will file within
the time prescribed by law (including extensions of time
approved by the appropriate taxing authority) all tax and
information returns and reports required to be filed with
each taxing jurisdiction in which Europads owns, leases or
operates property, or in which the failure to file such
returns or pay taxes could have any materially adverse
impact on the business, condition or properties of Europads,
and with all governmental units thereof, and has paid in
full or made adequate provision for the payment of all
taxes, interest, penalties, assessments or deficiencies
shown to be due or claimed to be due on or in respect of
such tax and information returns and reports. There is and
will be no material omission, deficiency, error,
misstatement or misrepresentation in any tax or information
return or report filed for any year or period ending on or
prior to the Signing Date. True and complete copies of all
such tax and information returns and reports and related
documents have been or will be made available, and when
requested have been or will be furnished, to SAL and Sealed
Air. The tax losses of Europads as November 30, 1993 amount
to FF 3,652,000 (the "French Tax Losses"), all of which
consist of deemed deferred depreciation ("amortissements
reputes differes"). Europads has not consented to the
extension of time of any applicable statute of limitations
in connection with the filing of tax and information returns
and reports of the payment of taxes, nor has it received any
notice of any failure to file a tax or information return or
report claimed to be required to be filed that has not been
filed. The financial statements of Europads referred to in
Section 5(g) contain adequate provisions, in accordance with
generally accepted accounting principles, for all taxes
(including without limitation Value Added Taxes) of
Europads, including interest and penalties in respect
thereof, required to have been accrued or for which Europads
may be liable as of the respective dates thereof. Europads
is not the subject of any pending or threatened tax
examination, nor is Europads a party to any proceeding or
inquiry by any governmental authority for the assessment or
the proposed assessment or for the collection of taxes, or
interest or penalties with respect thereto, nor has any
claim for the assessment or proposed assessment or for the
collection of taxes, or interest or penalties with respect
thereto, been asserted against Europads. There are no liens
for taxes that are due and unpaid on any of the properties
or assets of Europads. The tax returns of Europads for
fiscal years ending on or after November 30, 19__ are the
only fiscal years which are open and subject to audit or for
which the statutes of limitations for claims for tax
deficiencies have not yet expired. The results of all prior
audits are properly reflected in the foregoing financial
statements and any deficiencies proposed or assessed have
been paid.
(ii) UK Taxation Warranties. In this Section 5(t)(ii)
and in Section 6(b)(ii), the definitions set out in the
Taxation Deed shall apply.
Returns, Notices and Records
(A) All returns and computations required to be
made or submitted by Hereford to any fiscal authority
and all notices and information required to be given by
Hereford to any Fiscal Authority have been properly and
duly prepared and punctually made submitted or given by
Hereford are up-to-date, correct and are not the
subject of any dispute with or inquiry or investigation
by any Fiscal Authority and there are no facts or
circumstances likely to give rise to or be the subject
of any such dispute, inquiry or investigation.
(B) Formal notice has been duly and properly
given of all claims for or (as the case may be)
disclaimers, elections or surrenders in respect of
Reliefs assumed to have been made for the purposes of
the audited financial statements (and the related notes
and reports) for the financial year ended November 30,
1993 (the "Accounts"), and there are no claims,
disclaimers, elections or surrenders the time limit for
the making or doing of which expires on or before
December 31, 1994.
(C) All statements and disclosures made to any
Fiscal Authority in connection with any provision of
Fiscal Legislation were when made and remain complete
and accurate.
(D) Hereford has sufficient records relating to
past events to calculate the Taxation or the Relief
which would arise on any disposal or on the realization
of any assets owned at November 30, 1993 (the
"Accounting Date") or acquired since that date but
before the Siging.
Accounts
(E) The provision or reserve for Taxation in the
Accounts is sufficient to cover:
(1) all liabilities of Hereford for Taxation
as at the Accounting Date (whether or not Hereford
has or may have any right of reimbursement against
any other person); and
(2) all Taxation for which Hereford may
after the Accounting Date become or have become
liable in respect of or by reference to:
(aa) any income, profits or gains for
any period which ended on or before the
Accounting Date;
(ba) any distributions made on or
before the Accounting Date or provided for in
the Accounts; or
(ca) any Event occurring on or before
the Accounting Date.
(F) The values shown in the Accounts for assets
within the charge to corporation tax on chargeable
gains and the book values of such assets acquired after
the Accounting Date but before the Signing do not
differ materially from the amounts which would be
deductible under Section 38 of The Taxation of
Chargeable Gains Act 1992 (the "1992 Act")
(expenditure) on a disposal of those assets.
(G) The net values shown in the Accounts for
assets qualifying for capital allowances do not differ
materially from the aggregate amount of expenditure on
those asserts still unallowed but allowable in future
accounting periods for tax purposes.
(H) Proper and adequate provision has been made
and shown in the Accounts for deferred taxation in
accordance with accounting principles and practices
generally accepted in the United Kingdom and commonly
adopted by companies carrying on businesses similar to
those carried on by Hereford and in particular such
provision is in accordance with all applicable
Statements of Standard Accounting Practice.
Events Since the Accounting Date
(I) None of the following have occurred since the
Accounting Date:
(1) an Event giving rise to a liability
under Part VIII Taxes Management Act 1970 (charges
on non-residents);
(2) an Event giving rise to a liability
under Part XVII of The Income and Corporation
Taxes Act 1988 (the "Taxes Act") (tax avoidance);
(3) a distribution within the meaning given
by Part VI of the Taxes Act (company
distributions, tax credits, etc.) or within
Section 418 of the Taxes Act;
(4) an acquisition, disposal or supply or
deemed acquisition, disposal or supply of assets,
goods, services or business facilities of any kind
(including a loan of money or a letting, hiring or
licensing of any tangible or intangible property)
for a consideration which is treated for the
purposes of Taxation as different from the actual
consideration;
(5) an Event which results in Hereford being
liable for Taxation for which it is not primarily
liable;
(6) an Event in respect of which an Actual
Tax Liability arises as a result of a failure by
Hereford to deduct or account for Taxation;
(7) a disposal or deemed disposal of capital
assets;
(8) Hereford ceasing or being deemed to
cease to be a member of any group or associated
with any other company for the purposes of
Taxation; or
(9) any other Event which gives rise to a
Tax Liability on deemed (as opposed to actual)
income, profits or gains.
Payment of Taxation
(J) Hereford has duly and punctually paid all
Taxation to the extent that the same ought to have been
paid and has not paid or become liable to pay any
penalty or interest charged by virtue of the provisions
of any Fiscal Legislation.
Concessions
(K) The amount of Taxation chargeable on Hereford
during any accounting period ending on or within six
years before the Accounting Date has not, to any
material extent, depended on any concession, agreement
or other formal or informal arrangement with any Fiscal
Authority.
Continuity of Trade
(L) Within the period of three years ending with
the date hereof:
(1) Hereford has not discontinued any trade
or made a major change in the nature or conduct of
a trade or business carried on by it;
(2) the scale of activities in any trade
carried on by Hereford has not become small or
negligible; and
(3) no change of ownership of Hereford has
taken place.
Deductions and Withholdings
(M) Hereford has made all deductions in respect
of, or on account of, and Taxation from any payments
made by it which it is obliged or entitled to make and
has accounted in full to the relevant Fiscal Authority
for all amounts so deducted.
Distributions
(N) Since April 6, 1965 or, if later, the date of
incorporation of Hereford, Hereford has not:
(1) repaid or agreed to repay or redeemed or
agreed to redeem or purchased or agreed to
purchase any of its issued share capital or any
class thereof;
(2) made any repayment of share capital to
which Section 210(1) of the Taxes Act (bonus issue
following repayment of share capital) applies;
(3) issued any share capital as paid up
otherwise than by receipt of new consideration
within the meaning of Part VI of the Taxes Act
(company distributions, tax credits etc.); or
(4) made (nor is it deemed to have made) any
distribution within the meaning of the Taxes Act
except dividends properly authorized and disclosed
in its audited accounts.
Close Company
(O) The failure by Hereford to obtain from its
Inspector of Taxes confirmation in writing that no
apportionment of its income will be made under Sections
423 to 430 inclusive of, and Schedule 19 to, the Taxes
Act (apportionment of certain income deductions and
interest) in respect of any accounting period
commencing on or before March 31, 1989 and ending
within six years before the date of this Agreement will
not lead to the imposition of any additional Taxation,
or interest or penalties in respect thereof, on
Hereford.
(P) Hereford has not made any loan, advance or
payment or given any consideration falling within
Sections 419 to 420 or Section 422 of the Taxes Act
(charges to tax in connection with loans).
(Q) Hereford has not made any payment which falls
to be treated as a distribution under Section 418 of
the Taxes Act (distribution to include certain expenses
of close companies).
(R) Hereford is not and has not at any time been
a close investment holding company in respect of any
accounting period.
(S) Hereford has made no transfer of value such
as is specified in Section 94(1) of the Inheritance Tax
Act 1984 (charge on participators) and there has been
no variation in Hereford's share or loan capital within
Section 98 of that Act (effect of alterations of
capital, etc.).
Base and Written Down Values for Taxation Purposes
(T) No chargeable gain or profit (disregarding
the effect of any indexation allowance available) would
arise if any asset of Hereford (other than trading
stock) were to be realized on the date hereof for a
consideration equal to the book value thereof shown or
included in the Accounts (or, in the case of any asset
acquired since the Accounting Date, for a consideration
equal to the consideration given for the acquisition)
and in particular (but without limitation) the amount
or value of the consideration for the acquisition of
any asset included in the Accounts is not deemed for
the purposes of Taxation to have been reduced by reason
of any claim made under Sections 152 (roll-over
relief), 153 (assets only partly replaced) or 165
(relief for gifts of business assets) of the 1992 Act
or by reason of the operation of Section 17 (disposals
and acquisitions treated as made at market value), or
Sections 126 to 140 of the 1992 Act (re-organization of
share capital, conversion of securities, etc.).
(U) No balancing charge in respect of any capital
allowances claimed or given would arise if any assets
of Hereford were to be realized for a consideration
equal to the amount of the book value thereof as shown
or included in the Accounts (or, in the case of any
asset acquired since the Accounting Date, for a
consideration equal to the consideration given for the
acquisition) and all necessary conditions for all
capital allowances claimed by Hereford were at all
material times satisfied and remain satisfied and
Hereford has not since the Accounting Date become
liable for any balancing charge.
Secondary Liability
(V) No Event has occurred in consequence of which
Hereford is or may be held liable to pay or bear any
Taxation which is primarily chargeable against or
attributable to some person, firm or company other than
Hereford.
Stamp and Capital Duties
(W) Hereford has duly paid all capital duty,
stamp duty and stamp duty reserve tax for which it is
or has been or may be made liable and all documents in
the endorsement of which Hereford is or may be
interested have been duly stamped and there is no
liability to any penalty in respect of such duty or tax
nor are there any circumstances or transactions in
which Hereford is or has been a party which may result
in Hereford becoming liable to such penalty.
Anti-avoidance
(X) Hereford has not at any time entered into or
been a party to or otherwise been involved either in
any scheme or arrangement designed wholly or partly for
the purpose of avoiding or deferring Taxation or in any
non-arms' length transaction or other transaction or
arrangement in respect of which there may be
substituted for the actual consideration given or
received any different consideration for the purposes
of any Fiscal Legislation.
Value Added Tax
(Y) For the purposes of value added tax Hereford:
(1) is a taxable person and is registered in
the United Kingdom under Schedule 1 of the Value
Added Tax Act 1983 and is not registered (nor
required to be registered) for local VAT or its
equivalent in any other State;
(2) has complied with all the requirements
of the Value Added Tax Act 1983 and all applicable
regulations and orders, has fully maintained
complete, correct and up-to-date records, invoices
and other necessary documents and has not been
required by H.M. Commissioners of Customs and
Excise to give any security; and
(3) has never been treated as a member of a
group of companies and has not made any
application to be so treated.
(Z) All value added tax for which Hereford was
liable to account on or before the date hereof to H.M.
Commissioners of Customs and Excise has been paid to
them.
(AA) No circumstances exist whereby Hereford
would or might become liable for value added tax
pursuant to the provisions of Section 32 (agents, etc.)
32A (tax representatives) or 32B (overseas suppliers
accounting through their customers) of the Value Added
Tax Act 1983.
(AB) Hereford has not made any exempt supplies in
consequence of which it is or will be unable to obtain
credit for all input tax paid by it during any value
added tax quarter ending after the Accounting Date.
(AC) Hereford has not made and is not otherwise
bound by any election made pursuant to paragraph 2 of
schedule 6A of the Value Added Tax Act 1983.
(AD) Hereford has not been a party to a
transaction to which Article 12 of the Value Added Tax
(Special Provisions) Order 1981, or Article 5 of the
Value Added Tax (Special Provisions) Order 1992
(transfer of business as a going concern) has (or has
purported to have been) applied.
(AE) No asset of Hereford is a capital item the
input tax on which could be subject to adjustment in
accordance with the provisions of Part VA of the Value
Added Tax (General) Regulations 1985.
Duties
(AF) All value added tax payable upon the
importation of goods and all excise duties payable to
H.M. Customs & Excise payable in respect of any assets
(including trading stock) imported or owned by Hereford
have been paid in full.
Groups
(AG) Hereford is not, nor has it ever been, a
member of a group of companies for the purposes of
Chapter IV Part X of the Taxes Act or as defined in
Section 170 of the 1992 Act.
Deductions
(AH) Hereford has not made any payment or
incurred any liability to make any payment which could
be disallowed as a deduction in computing the taxable
profits of Hereford or as a charge on Hereford's
income.
Inheritance tax
(AI) Hereford is not and will not become liable
to be assessed to capital transfer tax or inheritance
tax as donor or donee of any gift or as transferor or
transferee of value (actual or deemed) nor as a result
of any disposition chargeable transfer or transfer of
value (actual or deemed) made by or deemed to be made
by any other person.
(AJ) There is no unsatisfied liability to capital
transfer tax or inheritance tax attached or
attributable to the assets of Hereford or the shares of
Hereford and neither such assets nor such shares are
subject to an Inland Revenue charge.
(AK) No person has the power under Section 212 of
the Inheritance Tax Act 1984 (powers to raise tax) to
raise any capital transfer tax or inheritance tax by
sale or mortgage of or by a terminable charge on any of
Hereford's assets or shares.
Foreign Connections
(AL) No transaction described in:
(1) Section 765(1) of the Taxes Act
(migration, etc. of companies);
(2) Section 765A of the Taxes Act (movements
of capital between Member States); or
(3) Sections 140, 140A or 140C of the 1992
Act (international asset transfers);
has been carried out or proposed by or in relation to
Hereford.
(AM) Hereford has never been resident outside the
United Kingdom, nor has it ever carried on any trade,
business or other activities outside the United
Kingdom.
(AN) No company over which Hereford had control
or which was a member of the same group of companies as
Hereford has ceased to be resident in the United
Kingdom.
(AO) Hereford does not have and never had:
(1) an interest in a controlled foreign
company within the meaning of Section 747 of the
Taxes Act (imputation of chargeable profits and
creditable tax of controlled foreign companies);
or
(2) a material interest in an offshore fund
within the meaning of Chapter V of Part XVII of
the Taxes Act.
(AP) Hereford has not entered into a transaction
to which the provisions of Section 770 of the Taxes Act
(sales, etc. at undervalue or overvalue) could apply.
(AQ) Hereford has not made any claim under
Section 584 Taxes Act or Section 29 of the 1992 Act
(delayed remittances).
Taxation Deed
(AR) No Event has occurred which would or might
give rise to claim under the Taxation Deed upon or
after the execution thereof.
(u) Insurance. The Disclosure Schedule contains a
true and complete list and a brief description of all insurance
policies currently in force with respect to the business and
assets of Hereford or Europads together with the premiums
currently paid thereon. Each of Hereford and Europads is in
compliance with all of the provisions of such insurance policies
and is not in default under any of the terms thereof. Such
insurance policies are of the kinds, in the amounts and against
the risks customarily maintained by corporations similarly
situated.
(v) No Brokers or Finders. Except for Henry Butcher &
Co., who has acted on behalf of the Selling Shareholders, no
person or entity is entitled to any brokerage commission,
finder's fee, advisory fee or other like payment from Hereford or
Europads or the Selling Shareholders in connection with the
transactions contemplated by this Agreement for which Sealed Air
or SAL may be liable.
(w) Employee Benefits.
(i) The Disclosure Schedule contains a true and
complete list of all employee benefit and welfare plans
of, or other fringe benefits provided by, Hereford or
Europads, including pension, profit-sharing, thrift,
savings, bonus, retirement, vacation, life insurance,
health insurance, sickness, disability, medical and
death benefit plans.
(ii) As to the Hereford Paper & Allied Products
Limited Retirement Benefits Scheme (the "Pension
Plan"),
(A) Full details of the Pension Plan have
been given to SAL in the form of:
(x) copies of all trust deeds and rules
governing or relating to the Pension Plan;
(y) copies of all explanatory booklets
issued to Hereford's employees or directors
or former employees or former directors
(together called for the purposes of this
Section 5(w)(ii) "Participating Employees")
who are members of the Plan; and
(z) copies of any announcement (whether
oral or written) to Participating Employees
relating to pension matters in respect of
benefit improvements or other amendments not
yet incorporated into the documentation of
the Pension Plan.
(B) There has been no breach of trusts of
the Pension Plan on the part of Hereford and there
are no actions, suits or claims (other than
routine claims for benefits) outstanding, pending
or threatened against Hereford as trustee or
administrator of the Pension Plan or against
Hereford in respect of any act, event, omission or
other matter arising out of or in connection with
the Pension Plan.
(C) There are not any contributions due to
the Pension Plan from or in respect of
Participating Employees or other payments which
have fallen due but are unpaid.
(D) The benefits payable under the Pension
Plan whether immediate, prospective or contingent,
are solely the benefits which can be provided by
the fund available for each Participating Employee
under the Pension Plan.
(E) The Pension Plan is either approved by
the Commissioners of Inland Revenue as an exempt
approved scheme for the purposes of Chapter I of
Part XIV of the Income and Corporation Taxes Act
1988 or is capable of receiving such approval,
and, to the best of the knowledge of the Selling
Shareholders, there are no circumstances which
might give the Inland Revenue reason to withdraw
or withhold such approval.
(F) The Pension Plan is not a contracted-out
scheme for the purposes of the Pension Schemes Act
1993.
(G) The Pension Plan is wholly invested in
insurance policies or contracts issued by Scottish
Amicable Life Assurance Society, and no loans have
been made out of the assets of the Pension Plan.
(H) The Pension Plan is registered with the
Registrar of Pension Schemes and such registration
is complete and up to date and any levy payable
has been paid.
(iii) With respect to Europads, the Disclosure
Schedule contains:
(A) the contracts of employment of
executives as well as a standard form offer of
employment for non-executive staff;
(B) information regarding the collective
bargaining agreement and the text of the internal
regulations applicable to the employees of
Europads;
(C) the text of the profit-sharing agreement
and employee participation in the business;
(D) information about pension or retirement
schemes or other social benefit systems applicable
to Europads; and
(E) any loans granted to executives, staff
and workers of Europads.
No service contract or particular benefit with the
exception of what is set out in the Disclosure Schedule
has been granted by Europads to any of its Directors,
Managing Directors or General Manager. Further, there
are no service contracts granted by Europads in favor
of employees which contain clauses more favorable than
those provided for by the Collective Bargaining
Agreement applicable to Europads. Europads is not in
breach of any clause of such contract. All salaries,
commissions and other remunerations and reimbursement
of expenses due to the beneficiaries of the said
contracts and commitments and to the staff as a whole
have been properly and fully paid or provision has been
made for them. Europads has not granted any employment
bonus and has not entered into any remuneration
agreement outside the usual scope of its activities,
except for those described in the Disclosure Schedule,
and no employees of Europads benefit from any
particular advantage which deviates from the general
provisions of the applicable contracts. Europads has
complied and, at all times up to the Closing Date will
comply, with all social security regulations. Europads
is up to date with the payment of its contributions in
respect of social security, family allowances and the
various retirement and unemployment organizations.
(x) Miscellaneous.
(i) The Disclosure Schedule contains a true and
complete list of the names and current emoluments of
all managerial employees of each of Hereford and
Europads.
(ii) The Disclosure Schedule contains a true and
complete list of (A) each bank and safety deposit
facility in which Hereford or Europads has an account
or a safety deposit box and (B) the names of all
persons authorized to draw on each such account or to
have access to any such safety deposit facility
together with a description of the authority (and
conditions thereof, if any) of each such person with
respect thereto.
(iii) Neither Hereford nor Europads has, since
November 30, 1993, permitted any option to renew any
material lease or any material option to purchase any
property to expire unexercised, in whole or in part.
(iv) The Disclosure Schedule includes a true and
complete list of all outstanding powers of attorney
granted by Hereford or Europads other than limited
powers of attorney solely in connection with tax
matters and appointments of statutory agents to receive
service of process.
(v) Except as set forth on the Disclosure
Schedule, neither Hereford nor Europads has any
obligation or liability, either actual, accrued,
accruing or contingent, as guarantor, surety, cosigner,
endorser, co-maker, indemnitor or otherwise in respect
of the obligation of any person, corporation,
partnership, joint venture, association, organization
or other entity, except as endorser or maker of checks
endorsed or made in the ordinary course of business.
(vi) The Disclosure Schedule contains a complete
and accurate list of (A) the ten largest customers by
volume, in both units and selling prices, of each of
Hereford and Europads for its most recent fiscal year,
indicating any existing contractual arrangements with
each such customer and whether the terms of purchases
by such customer differed from the ordinary and
customary trade terms of Hereford or Europads, and (B)
the products purchased by each such customer in such
fiscal year, indicating the amount of each such product
so purchased.
(vii) The Disclosure Schedule contains a complete
and accurate list of (A) the ten largest suppliers by
volume, in both units and purchase price, of each of
Hereford and Europads for its most recent fiscal year,
indicating any existing contractual arrangements with
each such supplier and whether the terms of purchases
from such supplier differed from ordinary and customary
trade terms, and (B) the products purchased from each
such supplier in such fiscal year, indicating the
amount of each such product so purchased.
6. Indemnification.
(a) Indemnification. The Selling Shareholders hereby
agree, jointly and severally, that they will indemnify and save
harmless Sealed Air and SAL and their respective affiliates (the
"Indemnitees") from and against any and all losses, liabilities,
fines, judgments, claims, damages and expenses (including
reasonable attorneys' fees actually incurred), including without
limitation any loss in value of Hereford or Europads
(collectively "Losses"), incurred by any of them by reason of or
arising out of (i) any false, misleading or inaccurate
representation or warranty by the Selling Shareholders contained
in this Agreement or in any other document, instrument,
certificate, schedule or written statement prepared for use and
delivered to Sealed Air or SAL in connection with the
transactions contemplated by this Agreement or any breach of any
such representation or warranty, (ii) any breach by the Selling
Shareholders of any provision of this Agreement, (iii) any matter
or event occurring or arising on or before the Signing Date
which, if known on the Signing Date, would, whether but for any
qualification as to materiality or the absence of actual
knowledge provided for in this Agreement or otherwise, have
constituted such a false, misleading or inaccurate representation
or warranty or such a breach, or (iv) in the case of Europads any
matter described in Section 6(c).
(b) Liability for Indemnification. Except in the case
of actual fraud, the Selling Shareholders shall not be liable for
indemnity under this Section 6 or the Taxation Deed:
(i) for any Losses (other than Losses arising out
of Section 6(c), the Taxation Deed or the
representations and warranties contained in Section
5(i) or 5(t) or otherwise relating to taxes) unless
notice of such Loss has been given to the Selling
Shareholders by Sealed Air or SAL on or prior to the
third anniversary of the Signing Date; or
(ii) for any Losses arising out of Section 6(c)
or the obligations of the Selling Shareholders under
the Taxation Deed or the representations and warranties
contained in Section 5(t) or otherwise relating to
taxes unless notice of such Loss has been given to the
Selling Shareholders by Sealed Air or SAL within six
(6) months after the expiration of the statute of
limitations applicable to the taxes in question (which,
for the French Tax Losses, shall be deemed to expire
when the relevant taxing authority shall have no right
to audit the last taxable year during which the French
Tax Losses were used for offset against taxable income
and which, in relation to UK fiscal legislation, shall
be deemed to expire when the relevant Fiscal Authority
shall have no further right to raise an assessment in
relation to the Taxation in question); or
(iii) after the Signing hereunder, for any Losses
arising out of any particular matter as to which the
nature and existence of such matter shall have been
fully and fairly disclosed in the Disclosure Schedule
prior to the Signing hereunder.
Notwithstanding the foregoing, except in the case of actual
fraud, the maximum liability of the Selling Shareholders for
Losses pursuant to this Section 6 or the Taxation Deed shall be
the aggregate amount of the Purchase Price and the Performance
Consideration; and the Selling Shareholders shall not be required
to indemnify the Indemnitees against any Losses (other than
Losses of the type referred to in clause 6.5 of the Taxation
Deed) which, in the aggregate, do not exceed L25,000; provided
that such amount shall not reduce the amount of any Loss in
excess of such amount for which the Selling Shareholders are
liable hereunder.
(c) Certain Tax Indemnities. In the event that, with
respect to any taxable year or period of Europads ended on or
prior to the Signing Date, or as a consequence of any events
which have occurred during the taxable year in which the Signing
occurs, but on or before the Signing Date, a relevant taxing
authority shall disallow any item of deduction, loss or credit
claimed by Europads in a tax or information return filed with
such authority, the Selling Shareholders shall indemnify and hold
harmless Hereford, Europads, Sealed Air, SAL and their respective
affiliates from and against any additional tax as well as against
any interest, penalties or other charges levied in connection
therewith to which any of such companies may become subject as a
result of such disallowance; provided, however, that the Selling
Shareholders shall not be liable for such additional tax to the
extent that it is incurred as a direct result of a change in law
or that Hereford, Europads, Sealed Air, SAL, or their respective
affiliates, as the case may be, shall be permitted by such taxing
authority to claim for tax purposes a deduction or credit for
such disallowed deduction, loss or credit so as to completely
amortize for tax purposes such deduction, loss or credit within
the taxable period in respect of which such deduction, loss or
credit was claimed and the succeeding taxable years or periods
following such taxable year or period which end on or prior to
the third anniversary of the Signing Date; provided further that,
in the event that the relevant taxing authority requires such
disallowed deduction, loss or credit to be amortized for tax
purposes over a period extending beyond the last taxable year or
period ending on or prior to the third anniversary of the Signing
Date, the Selling Shareholders shall be liable for the additional
tax to which Hereford, Europads, Sealed Air, SAL or their
respective affiliates shall become subject to the extent that
such additional tax shall not be reduced by such deductions,
losses or credits permitted by such taxing authority to be
amortized for tax purposes prior to the end of the last taxable
year or period ending on or prior to the third anniversary of the
Signing Date.
(d) Survival of Representations and Warranties. The
representations and warranties of the Selling Shareholders shall
survive the Signing to the extent of the obligations of the
Selling Shareholders for indemnity under this Agreement and the
Taxation Deed.
(e) Right of Set-Off. SAL and Sealed Air shall be
entitled to deduct from the Performance Consideration and any
other amount due to the Selling Shareholders pursuant to this
Agreement the amount of any Losses for which the Selling
Shareholders may be liable under this Section 6 or the Taxation
Deed.
(f) Limitation of Liability of the Personal
Representatives. Notwithstanding any other provision of this
Agreement or the Taxation Deed, it is understood and agreed that,
except as otherwise expressly provided in this Agreement or in
the Taxation Deed, each Personal Representative is, as such,
acting only in his or her representative capacity such that in
such capacity such Personal Representative shall have no personal
liability under this Agreement or the Taxation Deed except for
breach of any representation or warranty or breach of any
obligation undertaken in his or her personal capacity; provided
that nothing contained herein or in the Taxation Deed shall limit
the liability of the Estate as a Selling Shareholder hereunder or
thereunder.
7. Certain Agreements.
(a) Conduct of Business of Hereford and Europads Prior
to the Signing, etc. Prior to the Signing, except as
contemplated by this Agreement or as may be expressly approved in
writing by Sealed Air and SAL, the Selling Shareholders:
(i) will cause each of Hereford and Europads to
operate its business only in the usual, regular and
ordinary manner;
(ii) will cause each of Hereford and Europads to
maintain all of its properties in customary repair,
order and condition and to maintain adequate insurance
upon all of its properties, at least in such amounts
and of such kinds comparable to that in effect on the
date of this Agreement;
(iii) will cause each of Hereford and Europads to
maintain books, accounts and records in the usual,
regular and ordinary manner, on a basis consistent with
prior years and periods and to comply with all laws
materially applicable to it and to the conduct of its
business;
(iv) will not permit any amendment to be made in
the charter documents of Hereford or Europads or
(except with respect to Europads as contemplated by
this Agreement) permit Hereford or Europads to merge or
consolidate with, or to sell all or substantially all
of its assets to, any other corporation or change the
character of its business;
(v) except with respect to Europads as
contemplated by this Agreement, will not permit any
change to be made in the number of shares of Hereford
Capital Stock or Europads Capital Stock issued and
outstanding or any option, warrant or any other right
to purchase of to convert any obligation into shares of
Hereford Capital Stock or Europads Capital Stock to be
granted or made by Hereford or Europads;
(vi) will not permit (A) any dividend or other
distribution or payment to be declared, paid or made by
Hereford or Europads in respect of its capital stock,
(B) any purchase, redemption or other acquisition of
any outstanding shares of its capital stock, or (C) any
payment to the Selling Shareholders (except for normal
compensation and payments under existing contracts
described in the Disclosure Schedule, as previously in
effect) in repayment of any loan, advance or otherwise;
(vii) will not permit Hereford or Europads to
encumber or mortgage any of its properties or assets or
to enter into amy transaction or to make or enter into
any contract or commitment which is not in the ordinary
course of business, nor will the Selling Shareholders
permit Hereford or Europads to incur any obligation
(contingent or otherwise) other than in the ordinary
course of business or to transfer, convey or acquire
any material assets or property, or to enter into any
arrangement, agreement or undertaking (including,
without limitaiton, employment agreements with
executives), or to pay or promise to pay any bonus or
special compensation to employees, except in accordance
with existing employment agreements, or to modify,
amend or terminate any bonus, pension, profit-sharing,
compensation, insurance or other similar plan,
agreement, trust, fund or arrangement for the benefit
of employees;
(viii) will promptly take, and shall cause each
of Hereford and Europads to take, such actions as shall
be necessary to satisfy the conditions set forth in
Section 3 requiring action on the part of the Selling
Shareholders or on the part of Hereford or Europads;
and
(ix) from and after the date of this Agreement,
unless the transactions contemplated by this Agreement
shall be terminated solely by action of Sealed Air and
SAL, neither the Selling Shareholders, Hereford nor
Europads shall solicit inquiries or proposals or
participate in any negotiations concerning, or provide
any person with any information in connection with, any
acquisition or purchase by merger, consolidation, sale
of stock or assets or otherwise of all or substantially
all of the assets or capital stock of Hereford or
Europads, and the Selling Shareholders will notify
Sealed Air and SAL immediately if any such inquiries or
proposals are received.
(b) Delivery of Minute Books and Corporate Records:
Resignation of Directors.
(i) Upon the Signing, the Selling Shareholders
shall cause the minute books and corporate records of
Hereford and Europads to be delivered to such person or
persons as may be designated by Sealed Air as the
custodian of such records in complete and up-to-date
condition. Such delivery shall be deemed to be a
representation on the part of the Selling Shareholders
that such minute books and corporate records are true,
correct and complete.
(ii) Upon the Signing Date, the directors of each
of Hereford and Europads shall resign and be replaced
by designees of SAL and Sealed Air.
(c) Listing of the Sealed Air Shares. Sealed Air
agrees to waive as a condition to the Signing the requirement
that the Sealed Air Shares be approved for listing on the New
York Stock Exchange on or before the Signing Date. Sealed Air
agrees to submit to the New York Stock Exchange, prior to the
date on which the Performance Consideration shall become due, an
application to list the Sealed Air Shares on such Exchange and
otherwise shall use its reasonable commercial efforts to have the
Sealed Air Shares authorized for listing on such Exchange. The
Selling Shareholders will, at the expense of Sealed Air and SAL,
cooperate with Sealed Air in the preparation and submission of
such listing application as Sealed Air may reasonably request,
and hereby consent to the inclusion therein of the financial
statements described in Section 5(g) hereof. In the event that
such Exchange authorizes the Sealed Air Shares for listing,
Sealed Air shall give or cause to be given official notice of the
issuance of the Sealed Air Shares to such Exchange promptly after
the delivery thereof to the Selling Shareholders.
(d) Certain Tax Obligations. The Selling Shareholders
will pay in a timely manner any and all taxes for which the
Selling Shareholders may be liable as a consequence of the
transactions contemplated by this Agreement and shall indemnify
and hold Sealed Air, Hereford, Europads, SAL and their respective
affiliates harmless from and against any claims that may be made
against any of them as a consequence of the Selling Shareholders
failure to perform their obligations under this Section 7(d).
(e) Non-Competition.
(i) Each of the Selling Shareholders (other than
Colin P. Paton and each Personal Representative to the
extent that such Personal Representative is acting
solely in his or her capacity as such and not otherwise
as a Selling Shareholder pursuant to this Agreement)
severally covenants with Sealed Air and SAL that he or
she shall not for a period of three years from the
Signing Date, and Colin P. Paton covenants with Sealed
Air and SAL that he shall not for a period of five
years from the Signing Date:
(A) either solely or jointly with or as
manager, agent or servant of any other person,
firm or company directly or indirectly carry on or
be engaged concerned or interested (except as the
holder for investment only of securities dealt in
on a recognized Stock Exchange and not exceeding
3% in nominal value of the securities of that
class) in or in any way assist the carrying on of
the business of:
(X) the manufacture of Current
Products;
(Y) the distribution and sale of
Current Products; or
(Z) any other trade or business which
is wholly or partly in competition with any
business activity carried on by Hereford or
Europads at the Signing Date or that was
carried on by either Hereford or Europads at
any time within a period of twelve (12)
months prior to the Signing Date;
insofar as such business is carried out in:
(1) The United Kingdom;
(2) Ireland;
(3) France;
(4) Spain;
(5) The European Economic Community;
(6) The United States of America; or
(7) any other country or smaller
geographical area in which business activity
is carried on by Hereford or Europads at the
Signing Date or at any time within a period
of twelve (12) months prior to the Signing
Date;
(B) either on their own account or otherwise
and whether directly or indirectly solicit or
entice the custom in relation to goods or services
dealt in or provided by Hereford or Europads of
any person, firm or company who was a customer of
Hereford or Europads within a period of twelve
(12) months prior to the Signing Date;
(C) except to the extent required by law or
for the purposes of promoting interests of
Hereford or Europads, none of such Selling
Shareholders shall at any time disclose or make
public any secret or confidential, professional,
financial or trade information which he or she has
learned by reason of his or her employment by
Hereford or Europads or his or her ownership of
shares of Hereford Capital Stock or Europads
Capital Stock and will not use to the detriment of
Hereford or Europads any information which he or
she has obtained in confidence in the course of or
as a result of such employment or ownership;
(D) without the prior written consent of
SAL, either on his or her own account or otherwise
and whether directly or indirectly solicit or
endeavor to entice away, or offer employment to,
any person who was an employee of Hereford or
Europads engaged in skilled or managerial work at
any time in the period of twelve (12) months
immediately prior to the Signing Date; and
(E) none of such Selling Shareholders will
represent himself or herself or permit himself or
herself to be held out as being in any way
connected with or interested in the business of
Hereford or Europads except that this clause (E)
shall not apply to Colin P. Paton during the
course of his employment by Hereford.
(ii) Each covenant contained in this Section 7(e)
shall be read and construed independently of the other
covenants contained herein so that, if one or more of
such covenants shall be held to be invalid as an
unreasonable restraint of trade or for any other reason
whatsoever, the remaining covenants shall be valid to
the extent that they are not held to be so invalid.
(iii) While the covenants in this Section 7(e) are
considered by the parties to be reasonable in all the
circumstances, if one or more should be held invalid as
an unreasonable restraint of trade or for any other
reason whatsoever but would have been held valid if
part of the wording thereof had been deleted or the
period hereof reduced or the range of activities or
area dealt with thereby reduced in scope, the said
covenants shall apply with such modifications as may be
necessary to make them valid and effective.
(iv) Each of the Selling Shareholders acknowledges
and agrees with SAL that damages may not be an adequate
remedy for SAL in the event of any breach of the
provisions of this Section 7(e).
(f) Sealed Air Guaranty. Sealed Air hereby
unconditionally guarantees from and after the Signing the full
and faithful performance by SAL of each and every obligation of
SAL under this Agreement. In the event of any failure by SAL to
perform any of such obligations, the Selling Shareholders shall
provide notice thereof to Sealed Air, specifying the nature of
the default and Sealed Air shall have a period of twenty (20)
days after the date of such notice within which to cure such
default or to cause SAL to cure such default, and, in the event
that SAL or Sealed Air shall fail to cure such default within
such twenty (20) day period, Sealed Air shall thereupon perform
the obligation of SAL specified in such notice.
8. Registration of the Sealed Air Shares and
Restrictions on Transfer.
(a) Registration Pursuant to Rule 415. As soon as
practicable after the date (the "Delivery Date") on which any
Sealed Air Shares are due to be delivered in payment of all or
any portion of the Performance Consideration, and in no event
later than thirty (30) days after the date by which the Selling
Shareholders shall have supplied Sealed Air with all information
and materials with respect to Hereford, Europads and the Selling
Shareholders required in connection with the filing by Sealed Air
of the registration statement referred to in this Section 8,
Sealed Air will file a registration statement pursuant to Rule
415 of the regulations under the U. S. Securities Act of 1933, as
amended (the "1933 Act"; such registration statement being herein
referred to as the "Registration Statement"), relating to the
Sealed Air Shares issued or delivered on such date to the Selling
Shareholders and use its reasonable commercial efforts to make
such Registration Statement become effective and qualify the same
under the Blue Sky laws of such states of the United States as
may be reasonably requested, as promptly as practicable after
such filing; provided, however, that Sealed Air shall not be
obligated to qualify as a foreign corporation or as a dealer in
securities or to execute or file any general consent to service
of process under the laws of any such state where it is not so
subject. Sealed Air agrees to use its reasonable commercial
efforts to keep such Registration Statement effective until the
third anniversary of the Delivery Date. The description of the
plan of distribution in such Registration Statement shall be in
substantially the form delivered to, and approved by, the Selling
Shareholders with such changes therein as may be required by the
U.S. Securities and Exchange Commission. The Selling
Shareholders will not be entitled to any other rights with
respect to registration of the Sealed Air Shares.
(b) Expenses. Subject to the limitations contained in
this Section 8(b) and except as otherwise specifically provided
in this Section 8, the entire costs and expenses of registration
and qualification pursuant to Section 8(a) shall be borne by
Sealed Air. Notwithstanding the foregoing, neither Sealed Air
nor SAL shall be required to pay any underwriting or brokerage
discounts, fees or commissions or any fees of counsel for the
Selling Shareholders in connection with the registration or any
sale of Sealed Air Shares.
(c) Procedures. In the case of each registration or
qualification pursuant to Section 8(a), Sealed Air will keep the
Selling Shareholders advised as to the initiation of proceedings
for such registration and qualification and as to the completion
thereof, and will advise the Selling Shareholders, upon request,
of the progress of such proceedings.
(d) Indemnification. Sealed Air will indemnify and
hold harmless the Selling Shareholders against any losses,
claims, damages, or liabilities, joint or several, and expenses
(including reasonable costs of investigation) to which the
Selling Shareholders may be subject, under the 1933 Act or
otherwise, insofar as any thereof arise out of or are based upon
any untrue statement or alleged untrue statement of a material
fact contained in the Registration Statement, any prospectus
contained therein or any amendment or supplement thereto, or
arise out of or are based upon the omission or alleged omission
to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading, except
insofar as such losses, claims, damages, liabilities or expenses
arise out of or are based upon any untrue statement or alleged
untrue statement or omission or alleged omission based upon
information, including without limitation any information
provided as to Hereford or Europads for the period prior to the
Signing Date, or any other information furnished to Sealed Air in
writing by the Selling Shareholders (with respect to which
information the Selling Shareholders shall so indemnify and hold
harmless Sealed Air and each person, if any, who controls Sealed
Air within the meaning of the 1933 Act). In order to provide for
just and equitable contribution in circumstances in which the
indemnification provided for above in this Section 8(d) is due in
accordance with its terms but is unavailable, Sealed Air or the
Selling Shareholders, as the case may be, shall contribute to the
aggregate losses, claims, damages and liabilities incurred
(including legal or other expenses reasonably incurred in
connection with investigating or defending the same). In
determining the amount of contribution to which the respective
parties are entitled, there shall be considered the parties,
relative knowledge and access to information concerning the
matter with respect to which the claim was asserted, the
opportunity to correct and prevent any statement or omission, and
any other equitable considerations appropriate in the
circumstances; provided, however, that no person guilty of
fraudulent misrepresentations (within the meaning of Section
11(f) of the 1933 Act) shall be entitled to contribution from any
person who was not guilty of such fraudulent misrepresentations.
(e) Selling Shareholders' Representation. Each
Selling Shareholder represents and warrants to Sealed Air and SAL
that any acquisition of Sealed Air Shares by such Selling
Shareholder pursuant to this Agreement will be, at the time of
acquisition, for such Selling Shareholder's own account and that
such Selling Shareholder will hold any Sealed Air Shares received
by such Selling Shareholder pursuant to this Agreement for such
Selling Shareholder's own account and not with a view to any
resale or distribution thereof in any manner not in compliance
with the 1933 Act and the rules and regulations thereunder. Each
Selling Shareholder agrees with Sealed Air and SAL that:
(i) such Selling Shareholder is neither a citizen
nor a resident of the United States;
(ii) such Selling Shareholder will not offer to
sell, sell or otherwise dispose of any Sealed Air
Shares except (x) pursuant to an effective Registration
Statement under the 1933 Act that covers the Sealed Air
Shares being disposed of, (y) in compliance with Rule
144 under the 1933 Act, or (z) in a transaction that,
in the opinion of counsel reasonably satisfactory to
Sealed Air, does not require registration of such
Sealed Air Shares under the 1933 Act; and
(iii) in the event such Selling Shareholder makes
any disposition of Sealed Air Shares other than
pursuant to the Registration Statement or in compliance
with an exemption from registration under the 1933 Act,
such Selling Shareholder will indemnify and hold
harmless Sealed Air, SAL and their respective officers
and directors from and against any and all losses,
damages or liabilities for which they, or any one of
them, shall be or become liable under the 1933 Act or
otherwise as a result of such disposition, and will
reimburse each of them for any legal or other expenses
incurred by them in connection with defending against
any claim or suit for losses, damages or liabilities
arising out of or based on any distribution or resale
of such Sealed Air Shares, or any part thereof, by such
Selling Shareholder in violation of the 1933 Act, or in
breach of the representations set forth above (it being
understood that such Selling Shareholder shall have the
right to participate, at such Selling Shareholder's
expense, in the defense of any such claim).
(f) Legend on Certificates.
(i) The certificates representing the Sealed Air
Shares (and any certificate representing Sealed Air
Common Stock issued in exchange therefor or any
certificate representing Sealed Air Shares sold in
compliance herewith unless (x) Sealed Air shall have
obtained an opinion of counsel satisfactory to it that
such legend is not necessary under the 1933 Act or (y)
such shares are sold pursuant to an effective
Registration Statement) will bear a legend in
substantially the following form:
"The Shares represented by this
Certificate have not been registered
under the Securities Act of 1933, but
have been issued or transferred to the
registered owner pursuant to an
exemption from registration thereunder.
No transfer or assignment of any such
shares shall be valid or effective, and
the issuer of these shares shall not be
required to give any effect to any
transfer or attempted transfer or
assignment of these shares, including,
without limitation, a transfer by
operation of law, unless (a) the issuer
shall have first obtained an
opinion of counsel satisfactory to
it that the shares may be
transferred without registration
under such Act, (b) the shares are
sold in compliance with Rule 144
under such Act and the issuer has
been supplied with documentation
indicating compliance with Rule
144, or (c) the shares are
registered under such Act."
Sealed Air agrees that within twelve (12) business days
after receipt of any opinion referred to in the legend
described above, it will (A) use its reasonable
commercial efforts to cause its transfer agent to issue
certificates without such legend or (B) notify the
Selling Shareholder who is the registered owner of such
Sealed Air Shares that such opinion is not reasonably
satisfactory to Sealed Air. No such legend shall be
endorsed on any such certificates which, when issued,
are no longer subject to the restrictions described in
such legend. Each Selling Shareholder agrees that
Sealed Air may give such stop transfer orders as may be
necessary or desirable to its transfer agent to
implement or reflect the provisions of this Section
with respect to the Sealed Air Shares delivered to such
Selling Shareholder.
(ii) Upon and at any time during the
effectiveness of the Registration Statement, the
Selling Shareholders may deliver the certificates for
the Sealed Air Shares covered by such Registration
Statement containing the legend set forth in Section
8(f)(i), together with a request that new certificates
not bearing such legend and representing such Sealed
Air Shares be issued to the Selling Shareholders in
exchange for such legended certificates. Such request
shall set forth each Selling Shareholder's
understanding and agreement that delivery by Sealed Air
of such unlegended certificates shall not release such
Selling Shareholder from his or her obligations under
this Agreement or any certificate or agreement
delivered pursuant hereto or under the 1933 Act.
Promptly (and in any event within 12 business days)
after receipt of such legended certificates and such
request, Sealed Air shall use its reasonable commercial
efforts to cause its transfer agent to issue and
deliver such new certificates. Each Selling
Shareholder agrees that if, at any time after receiving
such unlegended certificates, the Registration
Statement covering such Sealed Air Shares is not
effective, such Selling Shareholder will thereafter
sell such Sealed Air Shares in compliance with Rule 144
under the 1933 Act, and such Selling Shareholder will
upon request by Sealed Air surrender the certificates
for such Sealed Air Shares in order that new
certificates containing the legend set forth in Section
8(f)(i) may be issued to such Selling Shareholder in
exchange therefor. Each Selling Shareholder shall
advise Sealed Air from time to time of the number of
Sealed Air Shares covered by the Registration Statement
that such Selling Shareholder has sold or otherwise
disposed of.
9. Expenses.
Whether or not the transactions contemplated by this
Agreement shall become effective, each party shall pay its own
expenses incidental to the negotiation and preparation for
Signing of this Agreement.
10. General.
(a) Corporate Examination; Investigations. From time
to time prior to the Signing Date, Sealed Air and SAL may,
through their officers, employees, attorneys, accountants, agents
and representatives, investigate the properties and assets,
examine the books, records and financial condition and consult
with officers, employees, attorneys, accountants, agents and
representatives (whether or not currently employed or retained)
of Hereford and Europads to the extent that Sealed Air or SAL
deem necessary or advisable to investigate the business or
affairs of Hereford and Europads. Sealed Air and SAL agree that,
unless and until the Signing has been consummated, they and their
representatives will hold in strict confidence all data and
information so obtained and that, if the transactions
contemplated by this Agreement are not consummated, they will
return to the Selling Shareholders or to Hereford or Europads all
such data and information as the Selling Shareholders shall
reasonably request.
(b) Execution in Counterparts. This Agreement may be
executed in one or more counterparts, each of which shall be
deemed an original, but all of which together shall constitute
one and the same document.
(c) Notices. All notices that are required or may be
given pursuant to this Agreement shall be given by personal
delivery, by facsimile transmission or by registered or recorded
delivery mail, return receipt requested, and any such notice
shall become effective when delivered in person, received by
facsimile or when deposited in the mails, to be sent via air
mail, postage prepaid, addressed as follows:
If to Sealed Air, to:
Sealed Air Corporation
Park 80 East
Saddle Brook, New Jersey 07663
Attention: William V. Hickey
Senior Vice President-Finance
Facsimile No.: (201) 703-4205
If to SAL, to:
Sealed Air Limited
Telford Way
Kettering, Northants,
England
Attention: Peter B. Ayrton
Chairman
Facsimile No.: (44) (536) 410576
If to the Selling Shareholders, to their respective
addresses set forth on Exhibit A.
The address of any party to this Agreement may be changed at any
time by written notice to the other parties to this Agreement.
(d) Waivers. No waiver of any term, covenant or
condition of this Agreement shall be effective unless made in a
written instrument duly executed by or on behalf of the party
against whom such waiver is enforceable.
(e) Amendments. The parties may agree to the
amendment or modification of this Agreement by an agreement in
writing executed in the same manner as this Agreement.
(f) Binding Effect. This Agreement shall be binding
upon and inure to the benefit of the respective heirs, legatees,
personal representatives, successors and assigns of the parties
hereto. For the purposes of the provisions of this Agreement or
the Disclosure Schedule which are expressed to be given for the
benefit of Europads and/or Hereford, SAL is contracting as
trustee for each of those companies in order to receive such
benefit on their behalf.
(g) Governing Law. The execution, validity,
construction and performance of this Agreement shall be governed
by and construed in accordance with the laws of England.
(h) Captions; Gender; Etc. The captions of this
Agreement are for convenience of reference only and shall not
affect in any manner any of the terms, covenants or conditions
hereof. words of the masculine gender shall mean and include
correlative words of the feminine and neuter genders and words
importing the singular number shall mean and include the plural
number and vice versa.
(i) Conduct of Business of Sealed Air and SAL.
Neither the entering into, nor any provision contained in, this
Agreement shall in any way be construed or deemed, either before
or after the Signing, to restrict Sealed Air or SAL in the
conduct of their businesses.
(j) Furnishing of Information. Prior to the Signing,
Sealed Air will afford to the Selling Shareholders, at such times
during normal business hours as may be reasonably requested, the
opportunity to ask questions, and to receive answers, concerning
the business and financial affairs of Sealed Air from persons
authorized to act on Sealed Air's behalf and the opportunity to
obtain any conditional publicly available information (to the
extent Sealed Air has such information or can acquire it without
unreasonably effort or expense) that the Selling Shareholders may
reasonably request concerning the Sealed Air Shares to be issued
pursuant to this Agreement.
(k) Restrictive Trade Practices Act. None of the
provisions of this Agreement (or of any agreement or arrangement
of which this Agreement forms part or of any agreement or
arrangement entered into pursuant to the provisions of this
Agreement) which are relevant restrictions as that term is
defined by the Restrictive Trade Practices Act 1976 shall come
into effect until the day following the day on which relevant
particulars of this Agreement (and all relevant documents) have
been furnished to the Office of Fair Trading in accordance with
the said Act and the parties hereto agree so to furnish such
particulars within a period of three months from the date of this
Agreement.
(l) References to Best Knowledge. The phrase "to the
best knowledge of such Selling Shareholder" or "to the best of
the knowledge of the Selling Shareholders", or phrases of similar
import, when used in this Agreement with respect to a statement,
representation or warranty, means that, at the time such
statement, representation or warranty was made, confirmed or
deemed to have been made or confirmed, such Selling Shareholder
had, after reasonable investigation, reasonable ground to believe
and no reasonable basis not to believe, and did in fact believe,
that such statement, representation or warranty was true and that
there was no omission to state therein a material fact required
to be stated therein in order to make such statement,
representation or warranty not misleading. In determining for
this purpose what constitutes reasonable investigation and
reasonable ground for belief, the standard of reasonableness
shall be that required of a prudent man in the management of his
own property.
<PAGE>
IN WITNESS WHEREOF, the parties have duly executed
this Agreement as a deed as of the date first set forth above.
SEALED AIR LIMITED
By Peter B. Ayrton
Name: Peter B. Ayrton
Title: Chairman
SEALED AIR CORPORATION
By William V. Hickey
Name: William V. Hickey
Title: Senior Vice President-
Finance
Selling Shareholders:
Arthur Philip Paton
Olive Margaret Paton
Colin Philip Paton
Keith Malcolm Paton
ESTATE OF GRAHAM MICHAEL PATON
By Arthur Philip Paton, personal
representative
By Beverly Margaret Paton,
personal representative
EXHIBIT A
Selling Shareholders
Fully Paid
Name and Address Hereford Shares
Arthur Philip Paton 1,251
Westholme,
Fownhope,
Hereford HR4 9DJ, England
Olive Margaret Paton 1,250
Westholme,
Fownhope,
Hereford HR4 9DJ, England
Colin Philip Paton 833
Homme Farm
Wyatt Road,
Withington,
Hereford HR1 3NP, England
Keith Malcolm Paton 833
River Lodge,
Grange Gardens,
Hampton Park,
Hereford HR4 9DJ, England
Estate of Graham 833
Michael Paton
c/o Lambe Corner & Co.
36/37 Bridge Street
Hereford HR4 9DJ, England
Total 5,000
