As Filed with the Securities and Exchange Commission on January 22, 1996
Registration No. 33-
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 No. 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)
Robert M. Grace, Jr., Esq.
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 Amount to be Proposed maximum Proposed maximum Amount of
class of registered offering price aggregate registration
securities to per unit* offering price fee
be registered
Common Stock- 69,333 $27.25 $1,889,324 $651.49
par value shares
$0.01 per 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 January 17,
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
69,333 SHARES
SEALED AIR CORPORATION
COMMON STOCK
(PAR VALUE $0.01 PER SHARE)
This Prospectus relates to 69,333 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, JANUARY 22, 1996
INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A
REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH
THE SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE
SOLD NOR MAY OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION
STATEMENT BECOMES EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN
OFFER TO SELL OR THE SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE
BE ANY SALE OF THESE SECURITIES IN ANY STATE IN WHICH SUCH OFFER,
SOLICITATION OR SALE WOULD BE UNLAWFUL PRIOR TO REGISTRATION OR
QUALIFICATION UNDER THE SECURITIES LAWS OF ANY SUCH STATE.
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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, 1994, which incorporates by reference
audited consolidated financial statements of Sealed Air for the
three years ended December 31, 1994 that appear in Sealed Air's
1994 Annual Report to Stockholders, as amended by Amendment No. 1
on Form 10-K/A to such Annual Report on Form 10-K filed May 16,
1995;
(b) Sealed Air's Current Report on Form 8-K, Date of
Report January 10, 1995, reporting the acquisition by Sealed Air
of Trigon Industries Limited and including certain consolidated
financial statements of Trigon Industries Limited and certain
unaudited and pro forma financial information of Sealed Air as
and for the year ended December 31, 1994, as amended by Amendment
No. 1 on Form 8-K/A to such Current Report on Form 8-K filed
August 10, 1995;
(c) Sealed Air's Quarterly Reports on Form 10-Q for
the quarters ended March 31, 1995, June 30, 1995 and September
30, 1995; and
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(d) 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 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
November 21, 1998.
Number of Shares Number of Shares
Name of Selling Held Prior Subject to
Stockholder to This Offering This Offering
Vernon R. Kelley 3,467 3,467
Keith B. Kennedy 9,707 9,707
M. B. Kennedy 9,707 9,707
Benny T. S. Lee 13,520 13,520
Bradley K. Owen 2,773 2,773
Curtis B. Owen 2,773 2,773
Jim Owen 13,866 13,866
Rodney Pennington 13,520 13,520
All of the shares covered by this Prospectus were
issued by Sealed Air pursuant to an Acquisition Agreement dated
as of November 21, 1995 (the "Acquisition Agreement"), between
Poly-Cell, Inc., a Mississippi corporation ("Poly-Cell"), Jim
Owen, Rodney Pennington and Benny T. S. Lee (collectively
referred to as the "Controlling Stockholders"), Polypride, Inc.,
a Delaware corporation and a wholly-owned subsidiary of Sealed
Air ("Polypride"), and Sealed Air, pursuant to which Polypride
acquired substantially all of the business and assets of Poly-
Cell, except for certain excluded assets, on November 21, 1995
(the "Poly-Cell Acquisition"). The Acquisition Agreement
contains indemnification provisions under which Sealed Air
indemnifies the Selling Stockholders (who include the Controlling
Stockholders) and Poly-Cell
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and the Controlling Stockholders indemnify Sealed Air in connection
with this registration and offering.
None of the Selling Stockholders held any position or
had a material relationship with Sealed Air or any affiliate of
Sealed Air during the three years preceding the consummation of
the Poly-Cell Acquisition. Since the Poly-Cell Acquisition, Benny
S. T. Lee and Rodney Pennington, two of the Selling Stockholders,
have become employees of Polypride, and a company owned by Jim
Owen, another of the Selling Stockholders, has entered into a
distribution agreement with Polypride.
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 Poly-Cell 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 Robert M. Grace,
Jr., Esq., General Counsel and Secretary of Sealed Air. As of
the date of this Prospectus, Mr. Grace was employed by Sealed Air
and was the beneficial owner of approximately 98,317 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, 1994 and 1993 and for each of the years in the
three-year period ended December 31, 1994 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.
The 1994 report of KPMG Peat Marwick LLP covering the
aforementioned consolidated financial statements refers to a
change in Sealed Air's method of accounting for income taxes
during 1993.
The consolidated financial statements of Trigon
Industries Limited prepared in accordance with New Zealand
generally accepted accounting principles as of June 30, 1994 and
for the year then ended have been incorporated by reference
herein and in the Registration Statement by reference to Sealed
Air's Current Report on Form 8-K reporting an event that occurred
on January 10, 1995, as amended by Sealed Air's Amendment No. 1
on Form 8-K/A to such Current Report on Form 8-K filed August 10,
1995, in reliance upon the report of Ernst & Young, independent
chartered accountants, given upon the authority of such firm as
experts in auditing and accounting.
6
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................... $ 651.49
Accounting Fees and Expenses....... 9,000.00
Miscellaneous...................... 1,000.00
Total......................$10,651.49
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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<PAGE>
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 certain of the selling
stockholders have agreed to indemnify the Registrant as well as
any person who controls the Registrant against certain
liabilities under the Securities Act of 1933, as amended, as set
forth in Section 11 of the Acquisition Agreement constituting
Exhibit 2 to this Registration Statement.
Item 16. Exhibits.
Exhibit Number Description
2 Acquisition Agreement dated as of November 21,
1995 between Poly-Cell, Inc., Jim Owen, Rodney
Pennington and Benny T. S. Lee, Polypride, Inc.,
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 Robert M. Grace, Jr., General Counsel
and Secretary, Sealed Air Corporation, as to the
legality of the securities registered.
23.1 Consent of Robert M. Grace, Jr., General Counsel
and Secretary, Sealed Air Corporation (Contained
in opinion filed as Exhibit 5).
23.2 Consent of KPMG Peat Marwick LLP.
23.3 Consent of Ernst & Young.
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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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<PAGE>
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 19th
day of January, 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 January 19, 1996
T.J. Dermot Dunphy (Principal Executive
Officer)
s/ WARREN H. MCCANDLESS Senior Vice President- January 19, 1996
Warren H. McCandless Finance(Principal
Financial and
Accounting Officer)
s/JOHN K. CASTLE Director January 19, 1996
John K. Castle
s/LAWRENCE R. CODEY Director January 19, 1996
Lawrence R. Codey
s/CHARLES F. FARRELL, JR. Director January 19, 1996
Charles F. Farrell, Jr.
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s/DAVID FREEMAN Director January 19, 1996
David Freeman
s/ALAN H. MILLER Director January 19, 1996
Alan H. Miller
s/R. L. SAN SOUCIE Director January 19, 1996
R.L. San Soucie
II-6
ACQUISITION AGREEMENT
AGREEMENT dated as of November 21, 1995 among
POLY-CELL, INC., a Mississippi corporation ("Poly-Cell"), JIM
OWEN, RODNEY PENNINGTON and BENNY TAI-SHOU LEE, each of whom is
an individual (each a "Controlling Stockholder" and collectively
the "Controlling Stockholders"), POLYPRIDE, INC., a Delaware
corporation ("Polypride"), and SEALED AIR CORPORATION, a Delaware
corporation ("Sealed Air").
W I T N E S S E T H:
WHEREAS, Poly-Cell is engaged in, among other things,
the manufacture and sale of air cellular and other packaging and
wrapping materials (the "Acquired Business"); and
WHEREAS, Poly-Cell desires to sell to Polypride, and
Polypride desires to purchase from Poly-Cell, the Acquired
Business on the terms and subject to the conditions set forth in
this Agreement;
NOW, THEREFORE, in consideration of the mutual
covenants contained in this Agreement and other good and valuable
consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties agree as follows:
Section 1. Purchase and Sale of Assets.
(a) Acquired Business. At the Closing (as defined in
Section 4(a)), Poly-Cell shall sell and convey to Polypride, and
Polypride shall purchase and acquire from Poly-Cell, all of the
business and assets of Poly-Cell other than the Excluded Assets
(as hereinafter defined) (the "Acquired Assets"), which Acquired
Assets shall include without limitation:
(i) Poly-Cell's cash, cash equivalents, bank
deposits and marketable securities other than such as
maybe retained by Poly-Cell pursuant to Section
4(b)(vi) (the "Cash");
(ii) all of Poly-Cell's accounts receivable
(the "Receivables");
(iii) all of Poly-Cell's inventories of raw
materials, work in process, finished goods, supplies
and other personal property held for sale, lease or
consumption in Poly-Cell's business (the "Inventory");
(iv) all furniture, furnishings, fixtures,
leasehold improvements, equipment, parts, machinery,
transportation equipment and vehicles, and other
tangible personal property (other than Inventory) of
Poly-Cell (the "Equipment"), including without
limitation the items of Equipment described in Exhibit
A to this Agreement and any additions or accessions
thereto or substitutions therefor or proceeds thereof;
(v) all rights of Poly-Cell under all contracts
and agreements pertaining to Poly-Cell's business (the
"Contracts"), including without limitation Poly-Cell's
rights existing on the Closing Date under the Contracts
described or referred to in Exhibit B to this
Agreement;
(vi) all of Poly-Cell's right, title and interest
in and to all real property and interests in real
property and buildings, structures and improvements
thereon (including all easements, rights-of-way, water
rights, tenements, hereditaments, appurtenances,
fixtures and other real property rights appertaining
thereto) owned or leased by Poly-Cell (the "Real
Property"), including without limitation the Real
Property located at 504 Waterway Drive, Amory,
Mississippi (the "Amory Facility") except for such Real
Property as is covered by the Amory Facility Lease (as
defined in Section 5(c));
(vii) (A) all rights of Poly-Cell in the name
"Poly-Cell, Inc." (as such name is used to identify a
business) and any trademarks or service marks in
connection therewith and the goodwill of the business
in connection therewith (the "Name"), (B) all rights of
Poly-Cell in the other trade names, trademarks, service
marks and copyrights, and registrations thereof and
applications therefor, and the goodwill of the business
in connection therewith, described in Exhibit C to this
Agreement (the "Marks"), (C) all rights of Poly-Cell in
the patents, patent registrations and applications,
inventions, trade secrets, secret processes, formulae,
know-how and other proprietary data and information and
licenses thereof described in Exhibit C (the
"Technology"), (D) all rights of Poly-Cell in all other
trade names, trademarks, service marks, copyrights,
patents, and registrations thereof or applications
therefor, and trade secrets, secret processes, customer
lists, supplier lists, inventions, formulae, know-how
and other intellectual property belonging to, used in
or pertaining to Poly-Cell's business, and the goodwill
of the business in connection therewith (together with
the Name, the Marks and the Technology, the
"Intellectual Property"), and (E) all other goodwill
and going concern value of Poly-Cell's business;
(viii) all of Poly-Cell's business records
(including without limitation customer and supplier
records) other than Excluded Assets (the "Records");
(ix) all of Poly-Cell's unemployment tax reserves
and ratings to the extent assignment thereof to
Polypride is permitted by applicable law and Polypride
requests that they be assigned (the "Tax Reserves");
(x) all of Poly-Cell's Federal, State and local
licenses required for the conduct of Poly-Cell's
business to the extent assignment thereof to Polypride
is permitted by applicable law (the "Licenses");
(xi) organizational costs, deposits, bond fees,
loan fees and start-up costs reflected in the Financial
Statements (as defined in Section 7(d)), net of
amortization related thereto (the "Other Assets"); and
(xii) all other assets of Poly-Cell, other
than Excluded Assets, used or useful in Poly-Cell's
business.
(b) Excluded Assets. The Acquired Assets to be
purchased and sold hereunder, and the term "Acquired Assets" as
used in this Agreement, shall not include the following assets of
Poly-Cell existing on the Closing Date (the "Excluded Assets"):
(i) all claims and rights of Poly-Cell to
Federal, state and local income tax refunds, credits
and benefits;
(ii) Poly-Cell's rights to any prepaid insurance
and taxes;
(iii) the right to any refunds or rebates with
respect to insurance maintained by Poly-Cell prior to
the Closing;
(iv) the right to a refund of letter of credit
fees paid by Poly-Cell prior to the Closing;
(v) the right to pursue, execute, levy and
enforce (x) any claims, demands, liens or judgments
with respect to any Excluded Assets and any Receivables
returned to Poly-Cell pursuant to Section 7(h) and (y)
any claims of Poly-Cell arising under this Agreement or
any Ancillary Agreement (as defined in Section 7(b));
and
(vi) Poly-Cell's corporate minute books, stock
records, or income tax records, and other records of
Poly-Cell relating exclusively to other Excluded
Assets.
Section 2. Purchase Price.
(a) Amount. The purchase price to paid by
Polypride for the Acquired Business and for the Non-Competition
Agreement (as defined in Section 4(b)(vii))(such price, as
adjusted pursuant to Section 4(b)(vi), being referred to in this
Agreement as the "Purchase Price") shall be an amount equal to
$3,900,000, subject to adjustment as provided in Section
4(b)(vi), which Purchase Price shall be payable as provided in
Section 3. In addition, subject to Section 4(b)(vi), Polypride
shall assume the liabilities of Poly-Cell listed and identified
in the second proviso to Section 5, and Sealed Air shall pursuant
to Section 6 transfer to Poly-Cell the Pontotoc Facility (as
defined in Section 6).
(b) Closing Date Inventory Statement. The net book
value of the Inventory to be acquired by Polypride at the Closing
shall be determined from a physical count (the "Closing Date
Inventory Statement") of Poly-Cell's inventory of raw materials,
work in process, finished goods, supplies and other items taken
or observed by Polypride not more than five (5) days before the
Closing Date, which Closing Date Inventory Statement shall be
prepared in accordance with generally accepted accounting
principles applied in a manner consistent with Poly-Cell's
standard accounting practices as set forth in Section 7(g) and
shall set forth the book value and location of the Inventory in
reasonable detail. The Closing Date Inventory Statement shall be
adjusted to the Closing Date by deducting from the Closing Date
Inventory Statement the cost, determined in a manner consistent
with Poly-Cell's standard accounting practices as set forth in
Section 7(g), of any raw materials used in producing work-in-
process or finished goods produced by Poly-Cell after the date on
which the physical count is made and by adding to the Closing
Date Inventory Statement an amount equal to the invoice cost of
any raw materials received after such physical count is taken.
(c) Receivables Certificate. Poly-Cell shall prepare
and deliver to Polypride at the Closing a list, certified by the
President of Poly-Cell to be true and complete, of all of the
Receivables in sufficient detail to identify them by account
debtor, date, face amount and invoice description (the
"Receivables Certificate").
(d) Allocation. The Purchase Price shall be allocated
among the Acquired Assets as follows:
(i) The amount of the Purchase Price allocated to
(w) the Cash shall be the amount thereof transferred to
Polypride on the Closing Date, (x) the Receivables
shall be the amount thereof shown on the Receivables
Certificate, (y) the Inventory shall be its net book
value determined pursuant to Section 3(c), and (z) the
Other Assets shall be their net book value on the
Closing Date;
(ii) $1,400,000 shall be allocated to and
among the Equipment;
(iii) $100,000 shall be allocated to the Non-
Competition Agreement;
(iv) $1,000 shall be allocated to the Name;
and
(v) the balance of the Purchase Price shall
be allocated to the goodwill and going concern value of
Poly-Cell's business.
Polypride and Poly-Cell acknowledge that the foregoing allocation
of the Purchase Price is based upon the fair market values of the
Acquired Assets determined by arms'-length negotiations, and each
hereby agrees to adhere to such allocation in all tax and other
reports, returns and other documents filed with any governmental
authority.
Section 3. Payment of the Purchase Price.
(a) Manner of Payment. Polypride shall pay the
Purchase Price (i) by the issuance and delivery to Poly-Cell of a
number of shares (the "Sealed Air Shares") of Sealed Air's common
stock, par value $0.01 per share ("Sealed Air Common Stock"),
determined by dividing $1,950,000 by the Average Closing Market
Price (as hereinafter defined) and rounding the quotient to the
nearest whole share of Sealed Air Common Stock and (ii) by paying
to Poly-Cell an amount in cash, by bank cashiers' or certified
check or by wire transfer of immediately available funds to an
account designated by Poly-Cell equal to the difference between
the Purchase Price and the amount determined by multiplying the
number of Sealed Air Shares to be delivered to Poly-Cell by the
Average Closing Market Price, less the amount of the Sales Tax
Escrow as provided in Section 3(b). As used in this Agreement,
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 which is five Trading Days
before the Closing Date; provided that the number of Sealed Air
Shares to be issued to Poly-Cell shall be not more than 100,000.
(b) Sales Tax Escrow.
(i) All sales and use taxes assessed to Poly-
Cell, whether before or after the Closing Date, shall
be the responsibility of Poly-Cell. The sum of $20,000
shall be tendered by Polypride from out of the Purchase
Price to Phelps Dunbar, L.L.P. as the escrow agent, on
the Closing Date (the "Sales Tax Escrow"). This sum
shall be held by Phelps Dunbar, L.L.P., as escrow agent
of the Sales Tax Escrow, to cover the amount of any
sales taxes, damages and interest due on the Closing
Date from Poly-Cell to the Mississippi State Tax
Commission pursuant to Sections 27-65-1 et. seq. of the
Mississippi Code of 1972, as amended. This sum shall
be held by Phelps Dunbar, L.L.P., as the escrow agent
of the Sales Tax Escrow, until such time as Poly-Cell
delivers a certificate, acceptable to Phelps Dunbar,
L.L.P., as the escrow agent of the Sales Tax Escrow,
from the Mississippi State Tax Commission indicating
that there are not sales taxes, damages or interest due
from Poly-Cell. Upon the receipt of an acceptable
certificate, Phelps Dunbar, L.L.P., as the escrow agent
of the Sales Tax Escrow, shall transfer the balance
held in the Sales Tax Escrow to Poly-Cell.
(ii) Poly-Cell shall, within ten (10) days after
the Closing Date, prepare and file a properly completed
sales tax return with the Mississippi State Tax
Commission and pay all sales taxes, interest and
damages which Poly-Cell owes. Poly-Cell shall furnish
copies of the sales tax return and proof of payment to
Phelps Dunbar, L.L.P., as the escrow agent of the Sales
Tax Escrow. If Poly-Cell fails to timely prepare and
file a sales tax return and pay all required amounts,
Phelps Dunbar, L.L.P., as the escrow agent of the Sales
Tax Escrow, shall pay the sum held in escrow to the
Mississippi State Tax Commission, to be applied to
sales taxes, interest and damages which Poly-Cell owes.
(c) Fractional Shares. No fractional Sealed Air
Shares shall be issued or delivered to Poly-Cell. If a
fractional share of Sealed Air Common Stock would be issuable to
Poly-Cell pursuant to this Section 3, Poly-Cell shall be entitled
to receive in lieu thereof, without duplication, as part of the
Purchase Price, an amount in cash determined by multiplying the
Average Closing Market Price by the fraction of a share of Sealed
Air Common Stock to which Poly-Cell would otherwise have been
entitled.
(d) Certain Post-Closing Agreements With Respect to
Working Capital. Following the Closing, Polypride shall, as
promptly as practicable following the end of each calendar month
beginning December 31, 1995, compute the amount of Working
Capital (as defined in Section 4(b)(vi)) of the Acquired Business
as of the end of such month without regard to any dividends or
other distributions paid by Polypride to Sealed Air or any of its
affiliates. As promptly as practicable after such computation is
available, Polypride shall furnish a copy thereof to Poly-Cell
together with payment of the amount by which Working Capital as
of the end of such month exceeds $500,000; provided, however,
that the amount to be paid to Poly-Cell pursuant to this Section
3(d) shall not exceed in the aggregate $214,000 less the amount,
if any, of the Retained Cash (as defined in Section 4(b)(vi)).
(e) Certain Prorations. Charges for water, sewer and
other periodic charges relating to the Amory Facility shall be
prorated as of the Closing. If the amount of any item to be
prorated is unknown on the Closing Date, the parties shall
estimate the amount based on the best available evidence. When
the actual amount is known, the appropriate party shall be
reimbursed by the other party within ten (10) days after being
advised of such amount.
Section 4. Closing.
(a) Time and Place of Closing. The consummation of
the transactions contemplated by this Agreement (the "Closing")
shall be held at the offices of Phelps Dunbar, L.L.P., at One
Mississippi Plaza, Seventh Floor, Tupelo, Mississippi 38802-1220,
or at such other place as the parties shall mutually agree,
commencing at 8:00 A.M., local time, on such date (the "Closing
Date") or at such other time as shall be mutually agreed upon by
Sealed Air, Polypride and Poly-Cell as promptly as practicable
after the conditions set forth in Sections 4(b) and 4(c) shall
have been satisfied, which other date shall, unless otherwise
agreed, not be later than December 31, 1995. Except as may be
otherwise agreed between the parties, upon its consummation the
Closing shall be deemed to have occurred at 7:00 A.M. on the
Closing Date. In the event that no Closing is held on or before
December 31, 1995, this Agreement shall become void and of no
effect with no liability on the part of any party hereto except
that the provisions of Sections 9(f) and 12(b) shall survive any
such termination of this Agreement. Polypride, Sealed Air, Poly-
Cell and the Controlling Stockholders shall each use their
reasonable commercial efforts to cause the conditions set forth
in Sections 4(b) and 4(c) that are to be satisfied by them to be
satisfied as promptly as practicable and, in any event, on or
before December 31, 1995.
(b) Conditions to Polypride's and Sealed Air's
Obligations. The obligations of Polypride and Sealed Air to
purchase the Acquired Business and to effect the Closing are
subject to the satisfaction, on or before the Closing Date, of
the following conditions (any of which may be waived in whole or
in part by Polypride and Sealed Air in their sole discretion):
(i) Board Approvals. The Boards of
Directors of Sealed Air and Polypride shall have
approved the transactions contemplated by this
Agreement.
(ii) Due Diligence. Polypride and Sealed Air
shall have completed to their sole satisfaction such
due diligence relating to the condition of Poly-Cell,
legal, financial or otherwise, including environmental
due diligence, as Polypride and Sealed Air shall deem
necessary or appropriate. In connection with such due
diligence, Poly-Cell shall make available such
information regarding Poly-Cell and its business as
Polypride and Sealed Air may request in order to
complete the necessary due diligence.
(iii) Consents of Third Parties. Poly-Cell,
Polypride and Sealed Air shall have obtained such
consents from third parties as shall be required in
order to permit them to perform their obligations under
this Agreement and the Ancillary Agreements, including
without limitation the consents provided for in Section
5 to Polypride's assumption of the Loans (as defined in
Section 5(e)) and the Amory Facility Lease.
(iv) Listing of Sealed Air Shares. The
Sealed Air Shares shall have been authorized for
listing on the New York Stock Exchange upon official
notice of issuance.
(v) Number of Sealed Air Shares. The number of
Sealed Air Shares to be issued to Poly-Cell shall not
be more than 100,000.
(vi) Working Capital. The Working Capital (as
defined below) of the Acquired Business transferred to
Polypride shall be not less than $500,000, and Poly-
Cell shall deliver to Polypride at the Closing a
certificate, in form and substance satisfactory to
Polypride and Sealed Air, signed by the President of
Poly-Cell setting forth the amount of such Working
Capital. As used herein, the term "Working Capital"
shall mean the difference between (x) the sum of the
Cash, the Inventory and the Receivables and (y) the
Trade Payables (as defined in Section 5(a)). In the
event that the amount of Working Capital at the time of
the Closing is less than $500,000, Polypride shall
reduce the cash portion of the Purchase Price by an
amount necessary to eliminate such shortfall in Working
Capital, and, in the event that the amount of Working
Capital at the time of the Closing exceeds $500,000,
then, at Polypride's sole option, either (A) Poly-Cell
may either retain an amount of Cash such that Working
Capital will not be less than $500,000 or (B) Polypride
shall pay at the Closing an additional amount in cash
equal to the amount by which Working Capital exceeds
$500,000 (the "Retained Cash").
(vii) Non-Competition Agreement. Poly-Cell
and the Covenantors (as defined therein) shall have
executed and delivered to Polypride a Non-Competition
Agreement dated the Closing Date in substantially the
form of Exhibit D to this Agreement (the "Non-
Competition Agreement").
(viii) Employment Agreements. Rodney
Pennington and Benny Tai-Shou Lee shall each have
entered into an employment agreement with Polypride
dated the Closing Date in substantially the form of
Exhibit E to this Agreement (each an "Employment
Agreement").
(ix) Distributorship Agreement. Poly Packaging,
Inc., a Mississippi corporation shall have entered
into a Distributorship Agreement with Polypride dated
the Closing Date in substantially the form of Exhibit F
to this Agreement.
(x) Instruments of Transfer. Poly-Cell shall
have delivered to Polypride such assignments, bills of
sale, certificates of title and other instruments of
transfer, all in form and substance satisfactory to
Polypride, as are necessary to fully and effectively
convey to Polypride all of the Acquired Assets in
accordance with the terms of this Agreement.
(xi) Title Insurance. Polypride shall have
obtained a commitment for a policy of owner's title
insurance issued by a title insurance company
reasonably acceptable to Polypride for the Real
Property (other than the portion thereof covered by the
Amory Facility Lease) in such amount (not to exceed the
appraised value thereof) as Polypride shall have
reasonably requested, insuring that Polypride has
acquired marketable and indefeasible fee simple title
to such Real Property free and clear of all
Encumbrances other than Permitted Exceptions, and
Polypride shall have received evidence satisfactory to
it that all conditions to the issuance of such policy
(other than payment of the premium therefor) required
by such commitment have been met. As used in this
Agreement, the term "Permitted Exceptions" shall mean
(u) encroachments, overlaps, boundary line disputes, or
other matters which would be disclosed by an accurate
survey or inspection of the premises, (v) any prior
reservation or conveyance, together with release of
damages, of minerals of every kind and character,
including, but not limited to, oil, gas, sand, clay,
and gravel in, on, and under subject property, (w)
public utility easements and rights of way of record,
(x) any other restrictions, easements or other rights
of record, (y) zoning and building laws, building
lines, use and occupancy restrictions, and (z) the lien
of ad valorem, personal property, real estate or other
taxes not yet due and payable.
(xii) Permits, Approvals, Litigation, Etc.
All permits and approvals from any governmental body,
governmental agency or regulatory authority required,
in the opinion of Polypride and Sealed Air, for the
lawful consummation of the transactions contemplated by
this Agreement and the Ancillary Agreements shall have
been obtained and shall remain in full force and
effect. No legal proceeding shall be pending or
overtly threatened, or any basis for such a proceeding
asserted, before a court or by any governmental body,
governmental agency or regulatory authority of any
jurisdiction or before any arbitrator or any other
person directed against or seeking to restrain, prevent
or modify the transactions contemplated by this
Agreement and the Ancillary Agreements or questioning
the validity or legality of any of such transactions or
seeking damages in connection with any of such
transactions which, in the opinion of Polypride and
Sealed Air, makes it impracticable or inadvisable on
the part of Polypride or Sealed Air to proceed with the
transactions contemplated by this Agreement and the
Ancillary Agreements.
(xiii) Accuracy of Representations and
Warranties. The representations and warranties of
Poly-Cell and the Controlling Stockholders contained in
this Agreement and the Ancillary Agreements shall be
true and accurate on the Closing Date as if made on
such date (except as affected by the transactions
contemplated by this Agreement and the Ancillary
Agreements 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) without taking into account any matters
disclosed to Polypride or Sealed Air after the date of
this Agreement; and Poly-Cell shall have delivered to
Polypride and Sealed Air at the Closing a certificate,
signed by its President and the Controlling
Stockholders, dated the Closing Date, to such effect.
(xiv) Performance of Agreements. Poly-Cell
and the Controlling Stockholders shall have duly
performed, on or before the Closing Date, all covenants
and obligations to be performed by them under this
Agreement; and Poly-Cell shall have delivered to
Polypride and Sealed Air at the Closing a certificate
signed by its President and the Controlling
Stockholders, dated the Closing Date, to such effect.
(xv) Current Financial Statements. Poly-Cell
shall have delivered to Polypride and Sealed Air an
unaudited balance sheet of Poly-Cell as of the most
recent month-end preceding the Closing Date for which
financial statements of Poly-Cell are available (in
accordance with the ordinary practices of Poly-Cell)
and an unaudited statement of income of Poly-Cell for
the month then ended and for the year-to-date
accounting period then ended, accompanied by the
comparable unaudited income statements of Poly-Cell for
the comparable periods for the preceding fiscal year,
all of which financial statements shall be prepared in
accordance with generally accepted accounting
principles on a basis consistent with prior periods and
shall be certified by the President of Poly-Cell.
(xvi) Legal Opinion. There shall have been
delivered to Polypride and Sealed Air the written legal
opinion of Mitchell, McNutt, Threadgill, Smith & Sams,
P.A., counsel to Poly-Cell and the Controlling
Stockholders, dated the Closing Date, in substantially
the form and to substantially the effect set forth in
Exhibit G hereto and as to such other matters as
Polypride and Sealed Air may reasonably request.
(xvii) Other Assurances. Poly-Cell shall have
delivered to Polypride and Sealed Air such other and
further certificates, instruments and other documents
as Polypride or Sealed Air may require in connection
with the transactions contemplated by this Agreement,
including without limitation such certificates,
instruments and other documents as Sealed Air shall
determine to be necessary or appropriate in connection
with compliance with applicable securities laws, rules
and regulations, all of which certificates, instruments
and documents shall be in form and substance reasonably
satisfactory to Polypride and Sealed Air.
(xviii) Satisfaction of Polypride's and Sealed
Air's Counsel. All legal aspects of the transactions
contemplated by this Agreement shall be accomplished in
a manner satisfactory to Polypride's and Sealed Air's
counsel, in its reasonable opinion.
(c) Conditions to Poly-Cell's Obligations. The
obligations of Poly-Cell to sell the Acquired Business and to
effect the Closing are subject to the satisfaction, on or before
the Closing Date, of the following conditions (any of which may
be waived in whole or in part by Poly-Cell in its sole
discretion):
(i) Number of Sealed Air Shares. The number of
Sealed Air Shares to be issued to Poly-Cell shall not
be more than 100,000.
(ii) Release of Personal Guarantees. Poly-Cell
shall have obtained the release of the personal
guarantees and related collateral given to The Peoples
Bank and Trust Company of Amory, Mississippi, given in
connection with the Loans (as such term is defined in
Section 5(e)).
(iii) Conveyance of Pontotoc Facility. Sealed
Air shall have delivered to Poly-Cell (x) the Pontotoc
Deed (as defined in Section 6(a)), duly executed and
acknowledged, and (y) duly executed releases, in
recordable form, of all Encumbrances (other than
Permitted Exceptions) (as the terms Encumbrances and
Permitted Exceptions are defined in Sections 7(f) and
4(b)(xi), respectively) with respect to the Pontotoc
Facility.
(iv) No Damage, Destruction, Etc. There shall not
have occurred any material damage to or destruction of
the Pontotoc Facility or any taking of the Pontotoc
Facility by eminent domain or commencement of any
proceedings for such purpose.
(v) Title Insurance. Poly-Cell shall have
obtained a commitment for a policy of owner's title
insurance issued by a title insurance company
reasonably acceptable to Poly-Cell for the Pontotoc
Facility in such amount (not to exceed the appraised
value of the Pontotoc Facility) as Poly-Cell shall have
reasonably requested, insuring that Poly-Cell has
acquired marketable and indefeasible fee simple title
to the Pontotoc Facility free and clear of all
Encumbrances other than Permitted Exceptions, and Poly-
Cell shall have received evidence satisfactory to it
that all conditions to the issuance of such policy
(other than payment of the premium therefor) required
by such commitment have been met.
(vi) Environmental Review. Poly-Cell shall
have completed an environmental review of the Pontotoc
Facility, and the results thereof shall be satisfactory
to Poly-Cell in its sole discretion.
(vii) Consents of Third Parties. Poly-Cell,
Polypride and Sealed Air shall have obtained such
consents from third parties as shall be required in
order to permit them to perform their obligations under
this Agreement and the Ancillary Agreements, including
without limitation the consents provided for in Section
5 to Polypride's assumption of the Loans and the Amory
Facility Lease.
(viii) Certain Ancillary Agreements. Polypride
shall have executed and delivered the Non-Competition
Agreement, the Employment Agreements and the
Distributorship Agreement.
(ix) Permits, Approvals, Litigation, Etc. All
permits and approvals from any governmental body,
governmental agency or regulatory authority required,
in the opinion of Poly-Cell, for the lawful
consummation of the transactions contemplated by this
Agreement and the Ancillary Agreements shall have been
obtained and shall remain in full force and effect. No
legal proceeding shall be pending or overtly
threatened, or any basis for such a proceeding
asserted, before a court or by any governmental body,
governmental agency or regulatory authority of any
jurisdiction or before any arbitrator or any other
person directed against or seeking to restrain, prevent
or modify the transactions contemplated by this
Agreement and the Ancillary Agreements or questioning
the validity or legality of any of such transactions or
seeking damages in connection with any of such
transactions which, in the opinion of Poly-Cell, makes
it impracticable or inadvisable on the part of Poly-
Cell to proceed with the transactions contemplated by
this Agreement and the Ancillary Agreements.
(x) Accuracy of Representations and
Warranties. The representations and warranties of
Polypride and Sealed Air contained in this Agreement
and the Ancillary Agreements shall be true and accurate
on the Closing Date as if made on such date (except as
affected by the transactions contemplated by this
Agreement and the Ancillary Agreements 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) without
taking into account any matters disclosed to Poly-Cell
or the Controlling Stockholders after the date of this
Agreement; and Polypride and Sealed Air shall have
delivered to Poly-Cell and the Controlling Stockholders
at the Closing a certificate, signed by their
Presidents or by a Vice President, dated the Closing
Date to such effect.
(xi) Performance of Agreements. Polypride
and Sealed Air shall have duly performed, on or before
the Closing Date, all covenants and obligations to be
performed by them under this Agreement; and Polypride
and Sealed Air shall have delivered to Poly-Cell and
the Controlling Stockholders at the Closing a
certificate, signed by their Presidents or by a Vice
President, dated the Closing Date to such effect.
(xii) Other Assurances. Polypride and Sealed
Air shall have delivered to Poly-Cell such other and
further certificates, assurances and documents as Poly-
Cell may reasonably request in order to evidence the
accuracy of Polypride's and Sealed Air's
representations and warranties, the performance of
their respective covenants and agreements to be
performed at or prior to the Closing, and the fulfill-
ment of the conditions to Poly-Cell's obligations.
(xiii) Legal Opinion. There shall have been
delivered to Poly-Cell and the Controlling Stockholders
the written legal opinion of Robert M. Grace, Jr.,
General Counsel and Secretary of Sealed Air, dated the
Closing Date, in substantially the form and to
substantially the effect set forth in Exhibit J hereto
and as to such other matters as Poly-Cell may
reasonably request.
(xiv) Satisfaction of Poly-Cell's Counsel. All
legal aspects of the transactions contemplated by this
Agreement shall be accomplished in a manner
satisfactory to Poly-Cell's counsel, in its reasonable
opinion.
Section 5. No Liabilities Assumed; Liabilities of
Polypride After Closing. Except as otherwise expressly provided
in this Section 5, neither Sealed Air nor Polypride shall be
deemed by virtue of any of the transactions contemplated by this
Agreement to have assumed or otherwise to have become liable for
any liabilities or obligations, whether known or unknown,
accrued, contingent or otherwise of Poly-Cell or the Acquired
Business that shall have accrued or arisen prior to the Closing
Date; provided that all liabilities and obligations incurred
after the Closing in connection with Polypride's operation after
the Closing of the Acquired Business shall be liabilities of
Polypride; provided further that, except as otherwise agreed,
Polypride hereby agrees that after the Closing it will assume and
duly perform the obligations of Poly-Cell arising after the
Closing under such of the Contracts described or referred to in
Exhibit B, to the extent such obligations are disclosed in
Exhibit B, as Polypride shall elect to assume; provided further
that, upon the Closing, Polypride shall assume:
(a) the obligation to pay all trade accounts
payable of the Acquired Business which were incurred in
the ordinary course of Poly-Cell's business prior to
the Closing (and not in contravention of Section 9(a)
of this Agreement), which are unpaid on the Closing
Date and which are reflected on a certificate to be
prepared by Poly-Cell and delivered to Polypride at the
Closing (such certificate being herein referred to as
the "Payables Certificate" and such obligations being
herein referred to as the "Trade Payables");
(b) subject to Poly-Cell's obtaining prior to the
Closing all necessary consents to Polypride's
assumption of such obligations, which consents shall be
in form and substance satisfactory to Polypride and
Sealed Air, Poly-Cell's obligations under that certain
Loan Agreement dated as of November 1, 1991 among the
Mississippi Business Finance Corporation ("MBFC"), the
Bank of Mississippi, as Servicing Trustee (the
"Trustee"), and Poly-Cell (the "1991 Equipment Loan");
(c) subject to Poly-Cell's obtaining prior to the
Closing all necessary consents to Polypride's
assumption of such obligations, which consents shall be
in form and substance satisfactory to Polypride and
Sealed Air, Poly-Cell's obligations under that certain
Lease dated June 29, 1992 between Monroe County,
Mississippi, and Poly-Cell relating to the Amory
Facility (the "Amory Facility Lease");
(d) subject to Poly-Cell's obtaining prior to the
Closing all necessary consents to Polypride's
assumption of such obligations, which consents shall be
in form and substance satisfactory to Polypride and
Sealed Air, Poly-Cell's obligations under that certain
Loan Agreement dated as of March 1, 1994 among MBFC,
the Trustee and Poly-Cell (the "1994 Loan"); and
(e) subject to Poly-Cell's obtaining prior to the
Closing all necessary consents to Polypride's
assumption of such obligations, which consents shall be
in form and substance satisfactory to Polypride and
Sealed Air, Poly-Cell's obligations under that certain
working capital loan in the maximum aggregate principal
amount of $100,000 between Poly-Cell and the Peoples
Bank & Trust Company evidenced by a Promissory Note
dated as of May 17, 1995 (the "Operating Loan"; the
1991 Equipment Loan, the 1994 Loan and the Operating
Loan being herein collectively referred to as the
"Loans").
The Payables Certificate shall list all of the Trade Payables in
sufficient detail to identify them by trade creditor, date, face
amount and invoice description, shall indicate any payment
discounts available thereunder, and shall be certified by the
President of Poly-Cell as being true and complete.
Section 6. Pontotoc Facility.
(a) Conveyance of Pontotoc Facility. At the Closing,
Sealed Air shall transfer and convey to Poly-Cell, and Poly-Cell
shall acquire, the real property located at 303A Stafford
Boulevard, Pontotoc, Mississippi (the "Pontotoc Facility"), more
particularly described in the form of Warranty Deed attached
hereto as Exhibit H (the "Pontotoc Deed").
(b) Certain Representations and Warranties. Sealed
Air represents and warrants to Poly-Cell and the Controlling
Stockholders that:
(i) Title. Sealed Air has marketable,
indefeasible fee simple title to the Pontotoc Facility
free and clear of all Encumbrances other than Permitted
Exceptions; has the right to convey the Pontotoc
Facility to Poly-Cell, and at the Closing shall have
conveyed to Poly-Cell marketable, indefeasible fee
simple title to the Pontotoc Facility free and clear of
all Encumbrances other than Permitted Exceptions.
(ii) Domestic Corporation Status. Sealed Air is
not a foreign corporation or "foreign person" as that
term is defined in Section 1445(f)(3) of the Internal
Revenue Code (the "Code"), and Sealed Air shall provide
to Poly-Cell at the Closing a non-foreign affidavit
sufficient for the purposes of establishing and
documenting to the satisfaction of Poly-Cell's counsel
the non-foreign affidavits exemption described in
Section 1445(f)(3) of the Code.
(iii) Condition of the Pontotoc Facility. To
the best of Sealed Air's knowledge, there are no
environmental matters relating to the Pontotoc Facility
that would materially affect such Facility after the
Closing except for such as are disclosed in those
certain reports prepared for Sealed Air with respect to
the Pontotoc Facility by CH2M Hill in May 1987 and June
1992, true and complete copies of such reports having
been provided to Poly-Cell.
(iv) Qualification to do Business. It is
qualified to transact business in the State of
Mississippi.
(c) Closing Costs and Prorations.
(i) Certain Taxes. Poly-Cell shall pay any
sales, use, stamp or similar transfer taxes, if any,
imposed with respect to the acquisition of the Pontotoc
Facility.
(ii) Real Estate and Personal Property Taxes.
Sealed Air shall be responsible for any personal
property, ad valorem, real estate or similar taxes
imposed on the Pontotoc Facility for the period prior
to the Closing, and Poly-Cell shall be responsible for
such taxes as are imposed or accrue from and after the
Closing.
(iii) Other Prorations. Charges for water,
sewer and other periodic charges relating to the
Pontotoc Facility shall be prorated as of the Closing.
If the amount of any item to be prorated is unknown on
the Closing Date, the parties shall estimate the amount
based on the best available evidence. When the actual
amount is known, the appropriate party shall be
reimbursed by the other party within ten (10) days
after being advised of such amount.
(iv) Certain Costs to be Paid. Poly-Cell shall
pay the cost of its title examination of the Pontotoc
Facility, the recording fees with respect to the Deed
for the Pontotoc Facility, and the premium for its
title insurance with respect to the Pontotoc Facility.
(d) Inspections, Tests, Surveys, Etc. Poly-Cell or
its designees may enter the Pontotoc Facility at all reasonable
times prior to the Closing for the purpose of conducting such
inspections, measurements, surveys, engineering studies,
architectural studies and reports, zoning, traffic and air
quality studies and reports, utilities investigations (including,
but not limited to, availability and capacity), soil and sub-
surface tests and analyses, environmental assessments,
environmental audits and other reports as Poly-Cell deems
appropriate at its sole cost and expense (collectively, the
"Tests"). Sealed Air shall furnish to Poly-Cell, to the extent
such exist and are able to be produced without unreasonable
expense for review, inspection and copying all of Sealed Air's
available documents, books and records relating to the Pontotoc
Facility including without limitation records relating to
environmental matters and the subjects of the Tests.
Section 7. Representations and Warranties of Poly-Cell
and the Controlling Stockholders. Poly-Cell and the Controlling
Stockholders, jointly and severally, represent and warrant to and
covenant with Polypride and Sealed Air that:
(a) Corporate Organization and Authority;
Subsidiaries; Qualification to do Business. Poly-Cell is a
corporation duly organized and validly existing in good standing
under the laws of the State of Mississippi, with full corporate
power and authority to conduct its business (including the
Acquired Business) as now conducted, own its assets (including
the Acquired Assets) and enter into and perform its obligations
under this Agreement and the Non-Competition Agreement. Poly-
Cell's execution, delivery and performance of this Agreement and
the Non-Competition Agreement and the sale to Polypride of the
Acquired Business pursuant to this Agreement have been duly
authorized by all requisite corporate action on the part of Poly-
Cell. Poly-Cell has no subsidiaries and no equity investments in
any other corporation, partnership or other business entity that
are engaged or have any participation in the Acquired Business.
Poly-Cell is not required to be qualified as a foreign
corporation in any jurisdiction, and Poly-Cell neither owns,
leases nor operates property in any jurisdiction other than
Mississippi in which the failure to so qualify could have any
material adverse effect on the business, condition or properties
of Poly-Cell or the Acquired Business.
(b) Binding Effect. This Agreement constitutes, and
all deeds, bills of sale, assignments, agreements and other
instruments and documents to be executed and delivered by Poly-
Cell or any of the Controlling Stockholders hereunder (the Non-
Competition Agreement, the Employment Agreements and all such
other instruments and documents being herein collectively
referred to as the "Ancillary Agreements") will when delivered by
Poly-Cell or any of the Controlling Stockholders constitute,
Poly-Cell's and such Controlling Stockholders' legal, valid and
binding obligations enforceable against them in accordance with
their respective terms.
(c) Absence of Conflicts and Consent Requirements.
The execution and delivery of this Agreement and the Ancillary
Agreements by Poly-Cell and the Controlling Stockholders and the
performance of their respective obligations hereunder and
thereunder, including the sale of the Acquired Assets pursuant to
this Agreement, do not and will not conflict with, violate or
result in any default under Poly-Cell's charter documents or
bylaws or any mortgage, indenture, agreement, instrument or other
contract to which Poly-Cell or any of the Controlling
Stockholders is a party or by which Poly-Cell or any of the
Controlling Stockholders or any of their respective properties or
assets are bound, nor will they cause Poly-Cell or the
Controlling Stockholders to violate any judgment, order, decree,
law, statute, regulation or other judicial or governmental
restriction to which Poly-Cell or any of the Controlling
Stockholders or their respective properties or assets are
subject. Except for the consents required to be obtained with
respect to the Loans and the Amory Facility Lease as contemplated
by Section 5, which consents shall have been obtained at or prior
to the Closing, the execution and delivery of this Agreement and
the Ancillary Agreements by Poly-Cell and the Controlling
Stockholders and the performance of their respective obligations
hereunder and thereunder, including the sale of the Acquired
Assets pursuant to this Agreement, do not and will not require
Poly-Cell or the Controlling Stockholders to obtain the consent
of, or to make any prior filing with or to give any notice to,
any governmental authority or other third party.
(d) Financial Statements. Poly-Cell's unaudited
balance sheet as of June 30, 1995 and the unaudited income
statements of Poly-Cell for the twelve months ended December 31,
1994 and the six months ended June 30, 1995, accompanied by the
comparable unaudited statements of income for the year ended
December 31, 1993 and the six months ended June 30, 1994, which
Financial Statements have been furnished to Polypride, and the
financial statements furnished to Polypride and Sealed Air for
any subsequent period (collectively, the "Financial Statements"),
and the financial information furnished to Polypride for filing
as part of Sealed Air's listing application to the New York Stock
Exchange present fairly the financial position of Poly-Cell at
the dates indicated and the results of its operations for the
periods then ended in accordance with Poly-Cell's standard
accounting practices, which practices are in accordance with
generally accepted accounting principles applied on a consistent
basis.
(e) Absence of Certain Changes. Since December 31,
1994, there has not been:
(i) any material adverse change in the financial
position of Poly-Cell or in the results of its
operations;
(ii) any change in the condition of the
properties, business or liabilities of Poly-Cell except
normal and usual changes in the ordinary course of
business which have not been materially adverse;
(iii) any damage, destruction or loss (whether
or not covered by insurance) materially and adversely
affecting the properties or business of Poly-Cell;
(iv) any sale, lease, abandonment or other
disposition by Poly-Cell of any machinery, equipment or
other operating tangible personal property other than
dispositions of such tangible personal property used or
useful in the Acquired Business which was replaced by
tangible personal property of equal or greater value;
(v) any change in the accounting methods or
practices followed, or in depreciation, amortization or
inventory valuation policies theretofore used or
adopted by Poly-Cell with respect to the Acquired
Business;
(vi) any material liability incurred by Poly-Cell,
contingent or otherwise, with respect to the Acquired
Business other than trade accounts, operating expenses,
obligations under executory contracts incurred for fair
consideration, taxes accrued with respect to operations
during such period, and indebtedness for money borrowed
or for the deferred purchase price of property
purchased for fair consideration, all incurred in the
ordinary course of the Acquired Business;
(vii) except as has been disclosed in writing
to Sealed Air and Polypride, any increase in the rate
of compensation paid or to be paid, directly or
indirectly, to any employee, contractor or agent of
Poly-Cell;
(viii) except as disclosed in writing to Sealed
Air and Polypride, any resignation or threatened
resignation of any key employee of Poly-Cell;
(ix) except for distributions declared and paid
prior to June 30, 1995 with respect to earnings for
1994 and for distributions of up to $321,077.89
declared and paid with respect to earnings for the
first six months of 1995, any dividend or other
distribution declared or paid in respect of the
outstanding capital stock of Poly-Cell; provided that
prior to the Closing Poly-Cell may declare an
additional dividend of up to $214,000 with respect to
the period from July 1, 1995 to the Closing Date and
may, subject to Section 4(b)(vi), at the Closing
distribute a portion of such dividend to the extent of
any Retained Cash with the balance of such dividend to
be paid as provided in Section 3(d); or
(x) any other material adverse change in the
business or prospects, financial or otherwise, of Poly-
Cell or the Acquired Business.
(f) Title to and Condition of Assets. Poly-Cell
has good and marketable fee simple title to the Equipment
described in Exhibit A hereto, free and clear of all liens,
charges, security interests, reservations, restrictions, adverse
claims, encumbrances and other defects in or limitations on title
other than liens for taxes not yet due and payable (collectively
"Encumbrances") and other than Encumbrances existing under the
Loans, has the right to convey such Equipment to Polypride, upon
the Closing will have conveyed to Polypride good and marketable
fee simple title to such Equipment free and clear of all
Encumbrances (other than Encumbrances existing under the Loans,
provided that the Loans are assumed by Polypride without
modification) and will warrant and defend the title to such
Equipment in Polypride against the lawful claims of all persons
whomsoever that shall have accrued or arisen at or prior to the
Closing. All of the Equipment is in good condition and repair,
ordinary wear and tear excepted, and except as described in
Exhibit A all of the Equipment is located at the Amory Facility.
(g) Inventory. The Inventory at the Closing will be
owned by Poly-Cell in fee simple, free and clear of all
Encumbrances, and Poly-Cell will upon the Closing have conveyed
to Polypride good and marketable fee simple title thereto free
and clear of all Encumbrances. All of the Inventory shown on the
Closing Date Inventory Statement will consist of items of a
quality and quantity usable in the ordinary course of Poly-Cell's
business and will be presented at a value which reflects Poly-
Cell's customary inventory valuation policy of stating inventory
at the lower of cost (on a first-in, first-out basis) or market,
in accordance with generally accepted accounting principles. The
level of Inventory reflected on the Financial Statements does
not, and at the Closing the level of Inventory reflected on the
Closing Date Inventory Statement will not, exceed normal
inventory levels necessary to conduct the Acquired Business in
the ordinary course. Poly-Cell does not hold any Inventory on
consignment or have title to any Inventory in the possession of
others. On the Closing Date, all of the Inventory will be
located at the Amory Facility or at such other locations as shall
be identified on the Closing Date Inventory Statement.
(h) Receivables. The Receivables existing on the
Closing Date will constitute valid and enforceable claims of
Poly-Cell (subject to no offsets or counterclaims), enforceable
by Poly-Cell in accordance with the terms of the instruments or
documents creating them and collectible in the face amounts
thereof as shown on the Receivables Certificate. A Receivable
shall be conclusively deemed uncollectible if not collected
within 180 days after the invoice date therefor, and all
uncollectible Receivables outstanding after the end of such 180-
day period shall be repurchased by Poly-Cell for a purchase price
equal to the face amounts thereof shown on the Receivables
Certificate less any payments received thereon. At the Closing,
Poly-Cell shall have assigned to Polypride all of its rights to
the Receivables free and clear of all Encumbrances.
(i) Intellectual Property. Poly-Cell's rights in the
Name and the other Intellectual Property will be effectively
assigned to Polypride at the Closing. Exhibit C sets forth a
list of the following intangible assets: (i) patents, computer
software programs, trademarks, trade names, service marks, logos,
copyrights, applications therefor and registrations thereof and
license rights used, exclusively or non-exclusively as specified,
in the conduct of the business of Poly-Cell and the
jurisdiction, if any, in or by which such Intellectual Property
has been registered, filed or issued and (ii) licenses,
contracts, agreements or understandings pursuant to which any
person has been authorized to use or has the right to use such
Intellectual Property, including the name of the licensor,
licensee or other party thereto, a description of the subject
matter thereof, the royalty rate, the termination date and any
applicable renewal option. The Intellectual Property identified
in Exhibit C is all of the Intellectual Property used in or
useful to the Acquired Business. Except as indicated on such
list all such Intellectual Property has been properly registered,
filed or issued in the respective offices and jurisdictions
indicated in such Exhibit C, which offices and jurisdictions
constitute all offices and jurisdictions in which such
registration, filing or issuance is necessary to protect the
rights therein of Poly-Cell for the conduct of Poly-Cell's
business and all applicable fees due and payable have been paid.
Except as otherwise indicated in Exhibit C, Poly-Cell is the sole
and exclusive owner of the Intellectual Property listed or
described in Exhibit C, and Poly-Cell has the sole and exclusive
right, except to the extent indicated therein, to the use thereof
in connection with the services or products in respect of which
they have been or are now being used, and Poly-Cell is the sole
and exclusive owner and has the sole and exclusive right to such
use of the Intellectual Property listed or described in Exhibit
C. In the case of copyrights, logos and applications therefor or
registrations thereof, Poly-Cell does not use any material
covered by said copyrights or logos by consent of any other
rightful owner thereof. Except as indicated in Exhibit C, there
are not any claims or demands of any person pertaining to such
Intellectual Property or, as the case may be, the rights of Poly-
Cell under the Intellectual Property identified on Exhibit C. No
proceedings have been instituted or are pending or, to the best
knowledge of Poly-Cell and the Controlling Stockholders,
threatened, which challenge the rights of Poly-Cell in respect of
such Intellectual Property, and none of such Intellectual
Property or, as the case may be, the rights granted to Poly-Cell
in respect thereof is, to the best knowledge of Poly-Cell and
except as disclosed in such Exhibit C, being infringed upon or
diluted by those of others and none is subject to any outstanding
order, decree, judgment, stipulation, injunction, written
restriction or agreement restricting the scope of use thereof by
Poly-Cell. Poly-Cell is not infringing or violating, and Poly-
Cell has not infringed or violated, any intangible property
rights of third parties, nor adversely used any confidential
information, trade secrets or known patentable inventions of any
person relating to the Acquired Business and, to the best
knowledge of Poly-Cell and the Controlling Stockholders, the
Acquired Business does not have any product which, if
commercially developed and sold, would so infringe or violate any
intellectual property rights of third parties, or adversely use
any such confidential information, trade secrets or inventions.
(j) Contract Rights. The rights of Poly-Cell under
the Contracts described or referred to in Exhibit B are valid and
enforceable by Poly-Cell, will at the Closing be validly assigned
to and thereupon enforceable by Polypride, in each case
enforceable in accordance with their respective terms. Neither
Poly-Cell nor, to the best of the knowledge of Poly-Cell and the
Controlling Stockholders, the other parties thereto are in
default (nor does any circumstance exist which, with notice or
the passage of time or both, would result in such a default)
under such Contracts, and the assignment by Poly-Cell of its
rights thereunder to Polypride will not violate the terms thereof
nor require the obtaining of any consents with respect thereto.
(k) Real Property. Poly-Cell has a valid and
subsisting leasehold interest in the Real Property, Poly-Cell
has performed all of the obligations required to be performed by
it under the Amory Facility Lease, and there is no default or
event which with notice or lapse of time or both would constitute
a default under the Amory Facility Lease. All buildings,
structures and improvements upon the Real Property and all
electric, telephone, gas, water, sewer and other utilities
serving such Real Property are, to the best of the knowledge of
Poly-Cell and the Controlling Stockholders, in good condition and
repair, ordinary wear and tear excepted. To the best of the
knowledge of Poly-Cell and the Controlling Stockholders, there
are no zoning or similar land use restrictions presently in
effect or proposed by any governmental authority, which would
impair Polypride's use of the Amory Facility to conduct the
Acquired Business after the Closing, the Amory Facility and
Poly-Cell's use thereof are in compliance in all material
respects with all applicable zoning or similar land use
restrictions of all governmental authorities having jurisdiction
thereof and with all recorded restrictions, covenants and
conditions affecting the Amory Facility, and Poly-Cell has
performed all affirmative covenants as to the Real Property to be
performed by it. To the best of the knowledge of Poly-Cell and
the Controlling Stockholders, except in material compliance with
applicable law, (x) no hazardous substances (as defined in the
Comprehensive Environmental Response, Compensation and Liability
Act, 41 U.S.C., Section 9601) and no polychlorinated biphenyls
("PCB's") are being or heretofore have been generated, dispersed,
released, treated, used, stored, disposed of or deposited in or
on, or otherwise exist in or on, such real property, (y) no
asbestos or asbestos-bearing materials remain installed, used,
incorporated into or disposed of on such Real Property, and (z),
except as has been disclosed to Polypride and Sealed Air, no
underground storage tanks ("USTs") are located on such Real
Property or were located on the real property and subsequently
removed or filled. To the best of the knowledge of Poly-Cell and
the Controlling Stockholders, the condition of the Real Property
does not violate, or give rise to any liability of the owner or
any operator thereof under, any applicable federal, state or
local environmental laws, ordinances or regulations.
(l) No Other Leases. None of the Equipment is, except
as described in Exhibit A, leased or otherwise provided by Poly-
Cell to any other party, and none of the real or tangible person-
al property used in the Acquired Business is leased by Poly-Cell
from any other party except as described in Exhibit B.
(m) Adequacy of Assets. The Acquired Assets include
all property, contract rights, leases, intangibles and other
assets of Poly-Cell that are used or required for use in the
Acquired Business. For Polypride's continuation of the Acquired
Business as conducted by Poly-Cell prior to the Closing Date, to
the best of the knowledge of Poly-Cell and the Controlling
Stockholders, there are no material capital expenditures which
Poly-Cell now plans to make or anticipates will be required to be
made during the three years following the Closing Date.
(n) Pending or Threatened Litigation. Except as has
been disclosed in writing to Polypride and Sealed Air, there are
no claims, actions, suits or other proceedings pending or, to the
best of the knowledge of Poly-Cell and the Controlling
Stockholders, threatened against Poly-Cell, the Acquired Business
or any of the Acquired Assets before any court, agency or other
judicial, administrative or other governmental body or
arbitrator.
(o) Other Loss Contingencies. There are no other
material "loss contingencies" (as defined in Statement of
Financial Accounting Standards No. 5 issued by the Financial
Accounting Standards Board in March 1975 ("FASB 5")) relating to
Poly-Cell or the Acquired Business, which would be required by
FASB 5 to be disclosed or accrued in financial statements of
Poly-Cell were such statements prepared at the time this warranty
is made or deemed made.
(p) Compliance with Law. To the best of the knowledge
of Poly-Cell and the Controlling Stockholders, Poly-Cell has
conducted the Acquired Business so as to comply with, and Poly-
Cell and the Acquired Business are in material compliance with,
all laws, statutes, regulations, rules and other requirements of
any governmental authority applicable to it, the noncompliance
with which or curing thereof could have a material adverse effect
on Poly-Cell, the Acquired Business or the Acquired Assets.
Without limiting the generality of the foregoing, Poly-Cell is,
and the conduct of the Acquired Business up to the Closing is and
heretofore has been, in material compliance with all laws,
statutes, regulations, rules and other governmental requirements
relating to protection of the environment, disposal of waste
materials and similar matters. There are no investigations of
Poly-Cell or the Acquired Business pending or, to the best of the
knowledge of Poly-Cell and the Controlling Stockholders,
threatened by any administrative agency or other governmental
authority. There have been no claims of violations or of
noncompliance with law received by Poly-Cell from any
governmental authority, and there are no outstanding judgments,
orders, writs or decrees of any judicial or other governmental
authority binding specifically upon Poly-Cell, the Acquired
Business or the Acquired Assets and not of general application,
other than judgments, orders, writs and decrees with which Poly-
Cell has complied and which have no future applicability.
(q) Capital Expenditures. There are no material
capital expenditures which Poly-Cell now anticipates will be
required to be made in connection with the continuation of
Acquired Business as now conducted in order to comply with any
existing laws, regulations or other governmental requirements
applicable to Acquired Business, including without limitation
requirements relating to occupational health and safety and
protection of the environment; provided that no representation or
warranty is made as to the effect of the Americans with
Disabilities Act or the rules and regulations thereunder on the
Amory Facility.
(r) Licenses. Exhibit I hereto sets forth all of the
licenses, permits and other governmental franchises held by Poly-
Cell and required for the conduct of Acquired Business as now
conducted, which constitute all material licenses required of
Poly-Cell for the conduct of such business. Poly-Cell is not in
default under any such license or permit, nor does any
circumstance exist which with notice or the passage of time or
both would result in such a default.
(s) Taxes, Etc.
(i) Payment of Taxes. At or prior to the
Closing, (x) Poly-Cell shall have paid all taxes,
duties and other governmental charges that have become
due and payable by it through the Closing Date and
that, if not so paid, would constitute or may hereafter
constitute a lien on any of the Acquired Assets or for
which Polypride could become liable as transferee of
the Acquired Assets, and (y) Poly-Cell shall have
withheld or collected from each payment made to each
employee of Poly-Cell the amount of all taxes required
to be withheld or collected therefrom and the same, to
the extent due and payable, shall have been paid to the
proper tax depositories or collecting authorities.
(ii) Ad Valorem Taxes. All ad valorem property
taxes or similar taxes for years prior to 1995 imposed
on Poly-Cell with respect to, or which may become a
lien upon, the Acquired Assets have been paid in full.
Poly-Cell has provided to Polypride and Sealed Air a
true and correct schedule of the amounts (or, if
indicated, estimated amounts) of all ad valorem
property taxes or similar taxes for the year 1995
payable or which will become payable with respect to
the Acquired Assets or which may become a lien upon the
Acquired Assets, and the basis of calculation thereof.
The prorata part of said 1995 ad valorem property taxes
or similar taxes with respect to the Acquired Assets
for the period from January 1, 1995 through the Closing
Date shall be remitted by Poly-Cell to Polypride at the
Closing or credited against the Purchase Price, and
Polypride shall thereafter be responsible for payment
of said 1995 ad valorem property taxes or similar taxes
imposed with respect to the Acquired Assets acquired by
it, but Poly-Cell shall be responsible for, and shall
duly pay as and when due, any other ad valorem property
taxes or similar taxes imposed on it with respect to
property other than the Acquired Assets.
(t) Employee Matters.
(i) List of Agreements. Exhibit B hereto sets
forth all agreements between Poly-Cell and any of its
employees, consultants, agents, officers and directors,
and all other persons performing services for Poly-
Cell, relating to their employment by or performance of
services for Poly-Cell or their compensation therefor,
other than oral employment agreements with employees
terminable at will.
(ii) Other Information as to Compensation and
Benefits.
(x) Poly-Cell has furnished to Polypride and
Sealed Air a true and complete list of the
respective name, years of service and current
annual salaries and other compensation of each of
the employees of the Acquired Business.
(y) Except for such as have been disclosed
to Polypride and Sealed Air, there are no bonus,
pension, profit-sharing, deferred compensation,
retirement, hospitalization, medical or dental
reimbursement, severance pay, vacation pay,
disability, death benefit, insurance, and other
similar plans, programs or arrangements of Poly-
Cell providing benefits to employees of Poly-Cell
(including without limitation any "welfare plans"
within the meaning of Section 3(l) of the Employee
Retirement Income Security Act of 1974, as amended
("ERISA"), sponsored or maintained by Poly-Cell
("Welfare Plans")).
(iii) Labor Organizations. Poly-Cell is not
party to any collective bargaining agreement with any
labor union or similar organization, nor do Poly-Cell
or any of the Controlling Stockholders know of any such
organization, which represents or claims to represent
any of Poly-Cell's employees or intends to organize any
of Poly-Cell's employees.
(iv) Restrictions on Employees. To the best of
the knowledge of Poly-Cell and the Controlling
Stockholders, no employee of Poly-Cell is subject to
any agreement with any other person or entity which
requires such employee to assign any interest in
inventions or other intellectual property or keep
confidential any trade secrets, proprietary data,
customer lists or other business information or which
restricts such employee from engaging in competitive
activities or solicitation of customers.
(u) Certain Contracts and Transactions.
(i) Contracts. Exhibit B sets forth all existing
contracts, agreements, options, accepted purchase
orders and other contractual commitments in excess of
$25,000, and all outstanding offers and proposals in
excess of $25,000 which may bind Poly-Cell upon their
acceptance, to which Poly-Cell is (or would, upon their
acceptance, become) a party or under which it has (or
would, upon their acceptance, have) any rights or
obligations.
(ii) Interested Transactions. Except as listed on
Exhibit B, Poly-Cell is not, and has not in the past
five years been, party to any contract, agreement or
transaction with any of the following persons, or in
which any of the following persons have any direct or
indirect interest (other than as a shareholder or
employee of Poly-Cell):
(x) any director or officer of Poly-Cell, or
of any Affiliate of Poly-Cell or any of its
shareholders;
(y) any of the spouse, parents, siblings and
children of any of the persons described in clause
(x); or
(z) any corporation, trust, partnership or
other entity in which any of the persons described
in clauses (x) and (y) have a beneficial interest
(other than a corporation whose shares are
publicly traded and in which such persons own
beneficially in the aggregate no more than 2% of
the equity interests).
As used in this Agreement, the term "Affiliate" of a
person or entity means another person or entity which,
directly or indirectly, controls, is controlled by or
is under common control with such person or entity.
(v) Insurance. Exhibit B hereto lists all policies of
insurance owned by Poly-Cell and now in effect insuring the
business, assets and personnel of Poly-Cell and sets forth for
each such policy the name of the insurer, the type of coverage,
the amount of coverage, the term thereof and the annual premium.
(w) Prospective Changes. Neither Poly-Cell nor any of
the Controlling Stockholders know of any pending changes in the
business, assets, liabilities, relations with employees, competi-
tive situation or relations with the suppliers or customers of
Poly-Cell, or in any governmental actions or regulations
affecting the Acquired Business, which, if they occur, could have
a material adverse effect on the Acquired Business or the
Acquired Assets.
(x) Product Warranties and Liabilities. Except as set
forth in Exhibit B, Poly-Cell makes no express warranties to
customers of the Acquired Business as to the products which the
Acquired Business sells in its business. Poly-Cell has not
received any claim, nor has it made any acknowledgement, that the
use of any of its products has caused or may cause personal
injuries or health hazards or that they are not merchantable or
fit for the purposes for which they were or are sold.
(y) Bulk Transfers. It is not necessary under the
Mississippi Uniform Commercial Code or otherwise for Poly-Cell to
comply with the provisions of Article 6 of the Uniform Commercial
Code, and no creditor of Poly-Cell at the time of the Closing
shall have any lawful right at or after the Closing to assert a
claim against Sealed Air or Polypride with respect to any
obligations of Poly-Cell to such creditor except for such as are
expressly assumed by Polypride pursuant to Section 5.
(z) No Material Misstatements or Omissions. The
representations and warranties of Poly-Cell and the Controlling
Stockholders in this Agreement and the Ancillary Agreements do
not contain any untrue statement of a material fact or omit to
state any material fact necessary to make the statements made
therein not misleading.
Section 8. Representations and Warranties of Polypride
and Sealed Air. Polypride and Sealed Air represent and warrant
to Poly-Cell and the Controlling Stockholders that:
(a) Corporate Organization and Authority. Each of
Polypride and Sealed Air is a corporation duly organized and
validly existing in good standing under the laws of Delaware,
with full corporate power and authority to conduct its business
as now conducted and enter into and perform its obligations under
this Agreement and the Ancillary Agreements. The execution,
delivery and performance of this Agreement and the Ancillary
Agreements to which each of them is a party and Polypride's
acquisition of and payment for the Acquired Assets hereunder have
been duly authorized by all requisite corporate action on the
part of Polypride and Sealed Air, and this Agreement constitutes,
and all other agreements and other instruments and documents to
be executed and delivered by Polypride or Sealed Air hereunder,
will upon their execution and delivery constitute, legal, valid
and binding obligation of Polypride or Sealed Air, as the case
may be, enforceable against them in accordance with their
respective terms.
(b) Due Authorization, Etc. The execution, delivery
and performance of this Agreement and the Ancillary Agreements to
which each of them is a party and the issuance of the Sealed Air
Shares have been duly authorized by all necessary corporate
action of Polypride and Sealed Air and, upon their delivery to
Poly-Cell pursuant to Section 3(a)(i) of this Agreement, the
Sealed Air Shares will be validly issued, fully paid and non-
assessable with no personal liability attaching to the ownership
thereof.
(c) No Violation. The execution, delivery and
performance of this Agreement and the Ancillary Agreements to
which each of them is a party does not conflict with or
constitute a breach by Polypride or Sealed Air of any of the
terms or provisions of, or a default under, any charter document
or by-law of Polypride or Sealed Air, or any mortgage, indenture
or other agreement or instrument, judgment, decree, ordinance,
regulation or order to which Polypride or Sealed Air is a party
or by which Polypride or Sealed Air is bound, nor will they cause
Sealed Air or Polypride to violate any judgment, order, decree,
law, statute, regulation or other judicial or governmental
restriction to which Sealed Air or Polypride or their respective
properties or assets are subject. Except for such consents as
shall have been obtained at or prior to the Closing, the
execution and delivery of this Agreement and the Ancillary
Agreements by Sealed Air and Polypride and the performance of
their respective obligations hereunder and
thereunder do not and will not require Sealed Air or Polypride to
obtain the consent of, or to make any prior filing with or to
give any notice to, any governmental authority or other third
party.
(d) Reports and Financial Statements. Sealed Air has
delivered to Poly-Cell copies of (i) Sealed Air's Annual Report
on Form 10-K filed with the Securities and Exchange Commission
for the year ended December 31, 1994 (without the exhibits
thereto, it being understood by Poly-Cell that such exhibits are
identified on such copy and that such exhibits are available to
Poly-Cell upon written request) and a copy of Sealed Air's Annual
Report to Stockholders for the year ended on such date (each of
which contains a consolidated balance sheet of Sealed Air and its
subsidiaries as at December 31, 1994 and the related consolidated
statements of earnings, of shareholders' equity (deficit) and of
cash flows of Sealed Air and its subsidiaries for the year ended
on such date, all as reported upon by KPMG Peat Marwick LLP,
independent certified public accountants, (ii) Sealed Air's Proxy
Statement dated March 29, 1995 for its Annual Meeting of
Stockholders held on May 19, 1995, and (iii) Sealed Air's
Quarterly Reports on Form 10-Q filed with the Securities and
Exchange Commission since December 31, 1994 (without the exhibits
thereto, it being understood by Poly-Cell that such exhibits are
identified on such copy and that such exhibits are available upon
written request). Except as set forth therein, the foregoing
financial statements have been prepared in accordance with
generally accepted accounting principles. The balance sheets
(together with the related notes) present fairly the consolidated
financial position of Sealed Air and its subsidiaries as at the
respective dates indicated, and the statements of earnings,
shareholders' equity (deficit) and of cash flows (together with
the related notes) present fairly the consolidated results of
Sealed Air's operations and of consolidated changes in Sealed
Air's financial position for the respective periods
indicated.
(e) No Material Adverse Change. Since December 31,
1994, there has been no material adverse change in the
consolidated financial position of Sealed Air and Polypride or in
the results of their operations taken as a whole.
(f) No Material Misstatements or Omissions. The
representations and warranties of Sealed Air and Polypride in
this Agreement and the Ancillary Agreements do not contain any
untrue statement of a material fact or omit to state any material
fact necessary to make the statements made therein not
misleading.
Section 9. Certain Agreements.
(a) Conduct of the Acquired Business Prior to Closing.
From the date hereof through the Closing Date, unless Polypride
and Sealed Air consent otherwise, Poly-Cell will conduct the
Acquired Business only in the ordinary course, will not dispose
of any of the Acquired Assets, will not enter into any contract,
lease, agreement, transaction or arrangement other than in the
ordinary course of business, will not take any other action which
would cause any representation or warranty made by it in this
Agreement to be incorrect in any material respect if such
representation or warranty were made on any date from the date
hereof through the Closing Date, and will maintain the books and
records of the Acquired Business on a basis consistent with prior
periods and which will permit the preparation of the Closing Date
Inventory Statement, the Receivables Certificate and the Payables
Certificate in accordance with this Agreement.
(b) Insurance. Through the Closing Date, Poly-Cell
shall, unless Polypride and Sealed Air consent otherwise,
maintain in effect the insurance policies described in Exhibit B
hereto.
(c) Preservation of Business. Through the Closing
Date, Poly-Cell will use all reasonable commercial efforts to (i)
preserve the present business organization of Poly-Cell intact,
(ii) retain the services of the present officers and employees of
Poly-Cell, (iii) preserve the present relationships of Poly-Cell
with its customers, suppliers and other persons with whom it has
business dealings, and (iv) preserve the goodwill of the Acquired
Business.
(d) Maintenance of Records. Inasmuch as certain of
Poly-Cell's books, records and documents are to be included as
Acquired Assets and sold to Polypride under this Agreement, and
certain other of Poly-Cell's books, records and documents are
Excluded Assets to be retained by Poly-Cell hereunder, and
Polypride or Poly-Cell may have need to have access to the books,
records and documents held by the other after the Closing,
Polypride and Poly-Cell agree that they shall each maintain for
at least four years after the Closing Date (or for such longer
period as may be required by applicable law) the respective
books, records and documents sold or retained hereunder. During
such period, representatives of Polypride shall be permitted to
inspect and make copies of such books, records and documents
retained by Poly-Cell during normal business hours and upon
reasonable notice for purposes related to the continuation by
Polypride of the Acquired Business; and representatives of Poly-
Cell shall be permitted to inspect and make copies of such books,
records and documents sold to Polypride during normal business
hours and upon reasonable notice for purposes related to its
business (other than the Acquired Business).
(e) Employees of Poly-Cell.
(i) Polypride may, with Poly-Cell's prior
consent, which will not be unreasonably withheld,
contact such of Poly-Cell's employees engaged primarily
in the Acquired Business as Polypride may determine for
the purpose of considering the employment of such
employees by Polypride after the Closing, and Poly-Cell
will reasonably cooperate with Polypride in such
regard. Polypride shall have no obligation to employ
any of such employees, and shall have no obligations or
liability to any such employees arising out of the
termination by Poly-Cell of the employment of any such
employees as a result of the transactions contemplated
by this Agreement, all of which obligations and
liability, if any, shall be the sole responsibility of
Poly-Cell. Without limiting the generality of the
foregoing, Poly-Cell shall indemnify and save harmless
Polypride from and against any and all liabilities and
obligations of Poly-Cell to its current or former
employees, consultants, salesmen and others providing
services to Poly-Cell relating to their services prior
to the Closing or arising as a consequence of the
Closing, including without limitation (w) wages,
salaries, bonuses and any other direct compensation,
(x) Poly-Cell's obligations and liabilities under any
retirement, deferred compensation, pension, profit-
sharing or other employee benefit plan, (y) any
severance or termination pay or benefit arrangement or
agreement, any accrued vacation pay, any life, health,
or disability insurance or benefits, and any other
employee benefits or other liabilities relating to
Poly-Cell's current or former employees or other
service providers, and (z) any and all liabilities and
obligations arising out of the Worker Adjustment and
Retraining Notification Act, the Comprehensive Omnibus
Budget Reconciliation Act, and any other federal, state
or local statutes, laws or regulations.
(ii) On a date agreed to by Polypride, which is
prior to the Closing Date, Poly-Cell will terminate the
employment of all of its employees and independent
sales representatives, and give to such employees and
representatives any notices required, if any, under The
Consolidated Omnibus Budget Reconciliation Act of 1985,
as amended ("COBRA") and/or The Employer Retirement
Security Act of 1975, as amended ("ERISA"). On that
date, all Poly-Cell employees and independent sales
representatives shall be fully paid for all sums due
them from Poly-Cell including but not limited to all
commissions, bonuses, accrued vacation pay and other
employee benefits. On that date, Poly-Cell shall have
also fully paid all sums which are due as of that date
for state and federal income tax withholding, medical
insurance payments, social security and Medicare (both
employee and employer shares), workers' compensation
premiums, unemployment compensation payments, and any
and all other amounts which are due or which may become
due as a result of the terminations contemplated by
this section.
(f) Fees and Expenses. Poly-Cell and Polypride shall
each bear its own expenses in connection with the negotiation and
preparation of this Agreement and (except as otherwise provided
in Section 11(c)) the consummation of the transactions
contemplated hereby, including without limitation the fees and
expenses of their respective counsel, accountants and
consultants; provided that Polypride shall pay any sales, use or
similar transfer taxes, if any, imposed with respect to the
purchase and sale of the Acquired Assets hereunder; provided
further that each of Poly-Cell and Polypride shall bear fifty
percent (50%) of the fees and expenses of Holcomb, Dunbar,
Connell, Chaffin & Willard incurred in connection with
Polypride's assumption of the Loans.
(g) No Brokers. Poly-Cell, Polypride and Sealed Air
each represent and warrant to the other that no broker or finder
has been involved or engaged by it in connection with the
transactions contemplated hereby, and each hereby agrees to
indemnify and save harmless the other from and against any and
all broker's or finder's fees, commissions or similar charges
incurred or alleged to have been incurred by the indemnifying
party in connection with the transactions contemplated hereby and
any and all loss, liability, cost or expense (including
reasonable attorneys' fees) arising out of any claim that the
indemnifying party incurred any such fees, commissions or
charges.
(h) Personal Property and Similar Taxes. Poly-Cell
shall be responsible for, and shall duly pay as and when due, any
personal property or similar taxes imposed or that shall accrue
prior to the Closing on the Acquired Assets as well as with
respect to property of Poly-Cell other than the Acquired Assets.
Polypride shall be responsible for any such taxes as are imposed
or shall accrue on the Acquired Assets for the period from and
after the Closing Date.
(i) Change of Poly-Cell's Name. Promptly after the
Closing, Poly-Cell will take all actions necessary to change its
corporate name to another name which is not confusingly similar
to the Name and to enable Polypride to use the Name as a
corporate name, and at the Closing shall deliver to Polypride all
documents necessary to accomplish the foregoing.
(j) Sealed Air Guaranty. Sealed Air shall cause
Polypride to duly and timely pay or perform its obligations under
this Agreement and hereby unconditionally guarantees to Poly-Cell
the full and faithful payment and performance by Polypride of
each and every obligation of Polypride under this Agreement,
including without limitation the payments provided for in Section
3(d), any payments required to be made by Polypride pursuant to
Section 10(g) and any payments required to be made by Polypride
pursuant to Section 2 of the Non-Competition Agreement. In the
event of any failure by Polypride to perform any of such
obligations, Poly-Cell 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 Polypride to cure
such default, and, in the event that Polypride or Sealed Air
shall fail to cure such default within such twenty (20) day
period, Sealed Air shall, subject to Section 10(f), thereupon pay
or perform the obligation of Polypride specified in such notice.
(k) Collection of Receivables. Polypride shall use
its reasonable commercial efforts following the Closing to
collect the Receivables, and any payments received by Poly-Cell
after the Closing from customers or others listed on the
Receivables Certificate shall be promptly remitted to Polypride.
Except in the case of payments received by Polypride from
customers which specify an invoice to which such payment is to be
credited and except with respect to any dispute as to any
Receivable, payments received by Polypride from customers of the
Acquired Business after the Closing shall be credited first to
the Receivables due from such customers on a first-in-first-out
basis and thereafter to any invoices issued after the Closing by
Polypride to such customers. The parties will not seek to
influence which outstanding invoices any customer selects for
payment.
(l) Listing of the Sealed Air Shares. Sealed Air
shall submit to the New York Stock Exchange, prior to the
Closing, 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. Poly-Cell and the Controlling Stockholders will
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 7(d) hereof. After 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 Closing
Date.
Section 10. Indemnification.
(a) Indemnification by Poly-Cell and the
Controlling Stockholders. Subject to the procedures and
limitations set forth in this Section 10, Poly-Cell and the
Controlling Stockholders shall, jointly and severally, indemnify
and save harmless Polypride from and against any and all Loss (as
defined in Section 10(b)) incurred by Polypride or any of its
Affiliates arising out of any of the following:
(i) Breach of Warranty. The falsity or
incorrectness in any material respect of any
representation or warranty made by Poly-Cell or any
Controlling Stockholder in this Agreement, in any
Ancillary Agreement or in any other instrument or
document delivered by Poly-Cell or any Controlling
Stockholder to Polypride or Sealed Air pursuant to this
Agreement.
(ii) Breach of Covenants. The failure of
Poly-Cell or any Controlling Stockholder to duly
perform any covenant or agreement to be performed by it
under this Agreement, any Ancillary Agreement or any
other instrument or document delivered by Poly-Cell or
any Controlling Stockholder to Polypride or Sealed Air
pursuant to this Agreement.
(iii) Poly-Cell's Liabilities. Any liability
or obligation, or alleged liability or obligation, of
Poly-Cell to any third party, including without
limitation any such liability or obligation as shall
have accrued or relate to the period prior to the
Closing, except for such liabilities or obligations as
Polypride shall expressly assume pursuant to Section 5
of this Agreement.
(iv) Claims Against Acquired Assets. Any levy or
other claim by any third party against or with respect
to the Acquired Assets, or any other claim by any third
party against Polypride or any of its Affiliates,
arising out of any act or omission or alleged act or
omission of Poly-Cell or any Controlling Stockholder.
(v) Receivables Claims. Any claim against
Polypride or any of its Affiliates by any customer of
the Acquired Business involving a claim or assertion
that such customer is entitled to any credit or
deduction with respect to accounts receivable arising
from Polypride's conduct of the Acquired Business after
the Closing as a consequence of any dispute with
respect to any Receivable.
(b) "Loss" Defined. As used in this Section 10, the
term "Loss" means the amount of any loss, liability, damage, cost
or expense (including reasonable attorneys' fees) incurred by
Polypride or any of its Affiliates arising out of the matters or
circumstances referred to in Sections 10(a)(i) through 10(a)(v).
(c) Indemnity Claims by Polypride.
(i) Notice of Claim. If any matter shall arise
which, in the opinion of Polypride, constitutes or may
give rise to a Loss subject to indemnification by Poly-
Cell or the Controlling Stockholders as provided herein
(an "Indemnity Claim"), Polypride shall give prompt
written notice (a "Notice of Claim") of such Indemnity
Claim to Poly-Cell and to Jim Owen, as representative
of the Controlling Stockholders (the "Representative"),
setting forth the relevant facts and circumstances of
such Indemnity Claim in reasonable detail and the
amount of indemnity sought from Poly-Cell and the
Controlling Stockholders with respect thereto, and
shall give notice promptly thereafter as to
developments coming to Polypride's attention materially
affecting any matter relating to such Indemnity Claim.
(ii) Third Party Claims. If any Indemnity
Claim is based upon any claim, demand, suit or action
of any third party against Polypride or the Acquired
Assets (a "Third Party Claim"), then Polypride, at the
time it gives Poly-Cell and the Representative the
Notice of Claim with respect to such Third Party Claim,
shall either (at Polypride's option):
(x) Offer to Poly-Cell and the
Representative the option to have Poly-Cell and
the Representative assume the defense of such
Third Party Claim, which option shall be exercised
by Poly-Cell and the Representative (if Poly-Cell
and the Representative elect to exercise it) by
written notice to Polypride within fifteen (15)
days after Polypride gives written notice to Poly-
Cell and the Representative thereof; or
(y) Undertake to defend such Third Party
Claim itself.
If Polypride so offers such option and Poly-Cell and
the Representative so exercise such option pursuant to
the foregoing clause (x), then Poly-Cell and the
Representative shall, at their own expense, assume the
defense of such Third Party Claim, shall upon the final
determination thereof fully discharge at their own
expense all liability of Polypride and its Affiliates
with respect to such Third Party Claim, and shall be
entitled, in its sole discretion and at their sole
expense but without any liability of Polypride or their
Affiliates therefor, to compromise or settle such Third
Party Claim upon terms acceptable to Poly-Cell and the
Representative. From the time Poly-Cell and the
Representative so assume such defense and while such
defense is pursued diligently and in good faith, Poly-
Cell and the Controlling Stockholders shall have no
further liability for attorneys' fees or other costs of
defense thereafter incurred by Polypride or its
Affiliates in connection with such Third Party Claim;
provided that Polypride and its Affiliates shall be
entitled to participate in such defense through counsel
retained by Polypride. If Polypride undertakes the
defense of the Third Party Claim pursuant to the
foregoing clause (y), it shall conduct such defense as
would a reasonable and prudent person to whom no
indemnity were available, shall permit Poly-Cell and
the Representative (at their sole expense) to
participate in (but not control) such defense, and
shall not settle or compromise such Third Party Claim
without the consent of Poly-Cell and the
Representative, which consent shall not be unreasonably
withheld. If Polypride fails to offer to Poly-Cell and
the Representative the option to assume the defense as
provided in clause (x) above, or if Polypride so offers
such option and Poly-Cell and the Representative do not
exercise such option within the time and in the manner
therein provided, then Polypride shall undertake such
defense in accordance with clause (y) set forth above.
(iii) The Controlling Stockholders hereby
irrevocable designate the Representative to act as
their representative for purposes of this Section 10
and irrevocably assign to the Representative all of
their rights to participate in any proceedings in
respect of which indemnity may be sought from each of
them pursuant to this Agreement or otherwise. The
Controlling Stockholders shall be bound by and liable
under this Section for any settlement effected with the
consent of the Representative of any claim, suit or
proceeding in respect of which indemnity may be sought
hereunder.
(d) Time Limit for Indemnity Claims. Notwithstanding
the foregoing provisions of this Section 10, Poly-Cell and the
Controlling Stockholders shall have no liability for any Loss
with respect to which a Notice of Claim has not been given to
Poly-Cell and the Representative prior to the fifth anniversary
of the Closing Date.
(e) Continued Liability for Indemnity Claims. The
liability of Poly-Cell and the Controlling Stockholders hereunder
with respect to Indemnity Claims shall continue for so long as
any Indemnity Claims may be made hereunder and, with respect to
any such Indemnity Claim duly and timely made, thereafter until
the liability of Poly-Cell and the Controlling Stockholders
therefor is finally determined and satisfied, notwithstanding any
prior liquidation or dissolution of Poly-Cell. If Poly-Cell
shall liquidate or dissolve at any time when any liability of
Poly-Cell with respect to Indemnity Claims may thereafter arise
or be determined, then at the time of such liquidation or
dissolution in addition to the liability of the Controlling
Stockholders pursuant to this Agreement or otherwise, Poly-Cell's
shareholders, or other distributees of Poly-Cell's assets after
the Closing, including any liquidating trust established by them,
shall assume Poly-Cell's liability with respect to Indemnity
Claims to the extent of the value of all such assets distributed
to them in such liquidation, and unless such shareholders or
distributees expressly or by operation of law assume such
liabilities, then Poly-Cell's liabilities and obligations to
Polypride shall not be deemed to have been paid, discharged or
provided for, and such distribution shall be void as against
Polypride to the extent of such liabilities.
(f) Right of Set-Off. Without limiting any rights
that Polypride, Sealed Air or any of their Affiliates may have at
law, in equity or otherwise, they shall be entitled to deduct
from any amount due and payable to Poly-Cell or any Controlling
Stockholder pursuant to this Agreement or otherwise the amount of
any loss, liability, damage, cost or expense for which Poly-Cell
or any Controlling Stockholder may be liable to Polypride, Sealed
Air or any of their Affiliates under this Agreement.
(g) Indemnification by Polypride. After the Closing,
Polypride agrees that it will indemnify and save harmless Poly-
Cell from and against any and all loss, liability, damages, cost
or expense (including reasonable and actual attorneys' fees)
incurred by Poly-Cell arising out of (i) Polypride's breach of
any of its representations, warranties, covenants and agreements
in this Agreement or (ii) Polypride's operation after the Closing
of the Acquired Business. If any claim is asserted by any third
party against Poly-Cell for which Polypride is liable pursuant to
this Section 10(g), Poly-Cell shall give prompt written notice of
such claim to Polypride, setting forth the relevant facts and
circumstances of such claim in reasonable detail and shall give
notice promptly thereafter as to developments coming to Poly-
Cell's attention materially affecting any matter relating to such
claim. Polypride shall, at its own expense, assume the defense
of such claim, shall upon the final determination thereof fully
discharge at its own expense all liability of Poly-Cell therefor,
and shall have all necessary power and authority to compromise or
settle such claim for such amount and on such terms and
conditions as Polypride shall deem appropriate; provided that
Poly-Cell shall be entitled at its own expense to participate in
(but not to control) such defense through counsel retained by
Poly-Cell.
Section 11. Representations, Warranties and Covenants
With Respect to the Sealed Air Shares; Registration of the Sealed
Air Shares; Restrictions on Transfer.
(a) Representations and Warranties. Poly-Cell and
each of the Controlling Stockholders represent and warrant to and
covenant with Polypride and Sealed Air as follows:
(i) Receipt of Certain Information. Poly-Cell
and the Controlling Stockholders have received a copy
of Sealed Air's Annual Report on Form 10-K for the year
ended December 31, 1994 as filed with the Securities
and Exchange Commission (without the exhibits thereto,
it being acknowledged that such exhibits are identified
on such copy and that Poly-Cell and the Controlling
Stockholders have been advised that such exhibits are
available upon written request), of Sealed Air's most
recently issued Annual Report to Stockholders, and of
Sealed Air's Proxy Statement dated March 29, 1995 for
the Annual Meeting of Sealed Air's stockholders held on
May 19, 1995 and of each of Sealed Air's Quarterly
Reports on Form 10-Q filed with the Securities and
Exchange Commission since December 31, 1994 (without
the exhibits thereto, it being acknowledged that such
exhibits are identified on such copy and that Poly-Cell
and the Controlling Stockholders have been advised that
such exhibits are available upon written request), and
Poly-Cell and the Controlling Stockholders have had
access to such other public information regarding the
business and financial affairs of Sealed Air as Poly-
Cell and the Controlling Stockholders have deemed
necessary to enable Poly-Cell and the Controlling
Stockholders to make an informed investment decision
with respect to the acquisition of the Sealed Air
Shares.
(ii) Business Sophistication. Poly-Cell and each
of the Controlling Stockholders have such experience in
business and financial matters so as to be able to
evaluate independently the merits and risks of an
investment in the Sealed Air Shares, and Poly-Cell and
each of the Controlling Stockholders are able to bear
the economic risk of such investment including, without
limiting the generality of the foregoing, the risk of
losing all or any part of Poly-Cell's or such
Controlling Stockholder's investment in the Sealed Air
Shares and the inability of selling or otherwise
transferring or disposing of the Sealed Air Shares for
an indefinite period of time.
(iii) Access to Information. Poly-Cell and
each of the Controlling Stockholders have 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
information which Sealed Air possesses or could
reasonably acquire without unreasonable effort or
expense that was necessary to verify the accuracy of
any of the information described in Section 11(a)(i)
that Poly-Cell and the Controlling Stockholders desired
with respect to Sealed Air.
(iv) Investment Representation; Certain
Undertakings. Poly-Cell represents and warrants to
Sealed Air that any acquisition of Sealed Air Shares by
it pursuant to this Agreement will be, at the time of
acquisition, for Poly-Cell's own account and for the
account of the Controlling Stockholders and of any
other stockholder of Poly-Cell to whom such shares may
be distributed or otherwise transferred in compliance
with the Securities Act and all other applicable
securities or blue-sky laws, including any such
transfer made in compliance with the exemption from
registration under the Securities Act afforded by
Section 4(2) thereunder (each a "Permitted
Transferee"). Poly-Cell represents, warrants and
agrees that it will hold, and will cause any Permitted
Transferee to hold, any Sealed Air Shares received by
Poly-Cell or such Permitted Transferee pursuant to this
Agreement for Poly-Cell's own account or for the
account of such Permitted Transferee and not with a
view to any resale or distribution thereof in any
manner not in compliance with the Securities Act and
the rules and regulations thereunder. Poly-Cell agrees
with Sealed Air that:
(A) there is no, and at the Closing Date
there will not be any, plan or intention on the
part of Poly-Cell to sell or otherwise dispose of
Sealed Air Shares, except for any such
distribution or transfer to a Permitted
Transferee; and
(B) Poly-Cell will not offer to sell, sell
or otherwise dispose of, nor will it permit any
Permitted Transferee to offer to sell, or
otherwise dispose of, any Sealed Air Shares except
(x) pursuant to an effective registration
statement under the Securities Act and, unless an
exemption from qualification is available, an
effective qualification under the Blue Sky laws of
such states of the United States in which such
Sealed Air Shares are offered, sold or disposed
of, (y) in compliance with Rule 144 under the
Securities Act and with any applicable exemptions
from qualification under the Blue Sky laws of any
states in the United States in which such Sealed
Air Shares are offered, sold or disposed of, or
(z) in a transaction that, in the opinion of
counsel satisfactory to Sealed Air, does not
require registration of such Sealed Air Shares
under the Securities Act and does not require
qualification under the Blue Sky laws of any
states in the United States in which such Sealed
Air Shares are offered, sold or disposed of.
(v) Legending of Certificates. Unless (x) Sealed
Air shall have obtained an opinion of counsel
satisfactory to it that such legend is not necessary
under the Securities Act or (y) such shares are sold by
Poly-Cell or a Permitted Transferee pursuant to an
effective registration statement in accordance with
Section 11(b) of this Agreement, any certificate
representing Sealed Air Shares issued pursuant to this
Agreement (and any certificate representing Sealed Air
Common Stock issued in exchange therefor or any
certificate representing Sealed Air Shares sold in
compliance herewith) 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 reasonable commercial
efforts to cause its transfer agent to issue
certificates without such legend or (B) notify the
person supplying such opinion 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. Poly-Cell and the
Controlling Stockholders agree, and they shall cause
any other Permitted Transferee to agree, 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
11(a)(v).
(vi) Legend on Certificates. Upon and at any time
during the effectiveness of the registration statement
referred to in Section 11(b) of this Agreement, Poly-
Cell or any Permitted Transferee may deliver the
certificates for such Sealed Air Shares as shall be
covered by the registration statement containing the
legend set forth in Section 11(a)(v) of this Agreement,
together with a request that new certificates not
bearing such legend and representing such Sealed Air
Shares be issued to Poly-Cell or such Permitted
Transferee in exchange for such legended certificates.
Such request shall set forth Poly-Cell's or such
Permitted Transferee's understanding and agreement that
delivery by Sealed Air of such unlegended certificates
shall not release Poly-Cell or such Permitted
Transferee from its obligations under this Agreement or
any certificate or agreement delivered pursuant to this
Agreement or under the Securities Act. Promptly (and
in any event within twelve (12) business days) after
receipt of such legended certificates and such request,
Sealed Air shall use reasonable commercial efforts to
cause its transfer agent to issue and deliver such new
certificates. Poly-Cell agrees, and shall cause each
Permitted Transferee to agree, that if, at any time
after receiving such unlegended certificates, the
registration statement is not effective, Poly-Cell or
such Permitted Transferee, as the case may be, will
thereafter sell such Sealed Air Shares in compliance
with Rule 144 under the Securities Act, and Poly-Cell
or such Permitted Transferee, as the case may be, will,
upon request by Sealed Air, surrender the certificates
for the Sealed Air Shares in order that new
certificates containing the legend set forth in Section
11(a)(v) may be issued to Poly-Cell or such Permitted
Transferee, as the case maybe, in exchange therefor.
(vii) Indemnification of Sealed Air. In the
event that Poly-Cell, any Controlling Stockholder or
any other Permitted Transferee makes any disposition of
Sealed Air Shares other than pursuant to an offering
registered under the Securities Act or other than in
compliance with Rule 144 under the Securities Act or
such other exemption as may, in the opinion of Sealed
Air's counsel, be available from time to time pursuant
to the Securities Act and applicable state securities
laws, Poly-Cell and the Controlling Stockholders will
indemnify and hold harmless, and will cause any other
Permitted Transferee to indemnify and hold harmless,
Sealed Air, its officers and directors and any other
person who controls Sealed Air within the meaning of
the Securities Act 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 Securities
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 Poly-Cell or such other person in violation
of the Securities Act or applicable state securities
laws, or in breach of the representations set forth
above.
(viii) Tax Information. The taxpayer
identification and social security numbers furnished
by Poly-Cell and the Controlling Stockholders to Sealed
Air on Form W-9 (at or before the Closing) are their
true and correct taxpayer identification and social
security numbers. Poly-Cell shall cause each Permitted
Transferee to furnish to Sealed Air, at or before the
time of the transfer of any Sealed Air Shares to such
Permitted Transferee, a Form W-9 setting forth the true
and correct taxpayer identification or social security
number of such Permitted Transferee.
(b) Registration Pursuant to Rule 415. As soon as
practicable after the Closing Date and in no event later than
thirty (30) days after the date by which Poly-Cell shall have
supplied Sealed Air with all information and materials with
respect to Poly-Cell, the Controlling Stockholders and any other
Permitted Transferee required in connection with the filing by
Sealed Air of the registration statement referred to in this
Section 11, Sealed Air will file a registration statement
pursuant to Rule 415 of the regulations under the Securities Act
relating to the Sealed Air Shares issued to Poly-Cell and use its
reasonable commercial efforts to cause such registration
statement to become effective and to qualify the Sealed Air
Shares 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 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 Closing Date. The description of the
plan of distribution in such registration statement shall be in
substantially the form delivered to Poly-Cell prior to the filing
of such registration statement, with such changes therein as may
be required by the Securities and Exchange Commission, and Poly-
Cell shall sell, transfer or otherwise dispose of, and shall
cause any Permitted Transferee to sell, transfer or otherwise
dispose of, the Sealed Air Shares only in accordance with such
plan of distribution. Neither Poly-Cell, the Controlling
Stockholders nor any other Permitted Transferee of the Sealed Air
Shares will be entitled to any other rights with respect to
registration of the Sealed Air Shares.
(c) Registration Expenses. Subject to the limitations
contained in this Section 11(c) and except as otherwise
specifically provided in this Section 11, the entire costs and
expenses of the registration and qualification of the Sealed Air
Shares pursuant to Section 11(b) of this Agreement shall be borne
by Sealed Air. Such costs and expenses shall include the fees
and expenses of counsel for Sealed Air and of its accountants,
all other costs and expenses of Sealed Air incident to the
preparation, printing and filing under the Securities Act of the
registration statement and all amendments and supplements
thereto, the cost of furnishing copies of each preliminary
prospectus, each final prospectus and each amendment or
supplement thereto to underwriters, dealers and Poly-Cell and the
Permitted Transferees, and the costs and expenses (including fees
and disbursements of counsel, and National Association of
Securities Dealers, Inc. and listing fees) incurred by Sealed Air
in connection with the qualification of the Sealed Air Shares
under the Blue Sky laws of various jurisdictions.
Notwithstanding the above, Sealed Air shall not be required to
pay any underwriting or brokerage discounts, fees or commissions
or any fees or expenses of counsel for Poly-Cell or any Permitted
Transferee in connection with the registration or any sale of
Sealed Air Shares pursuant to Section 11(b) of this Agreement.
(d) Procedures. In the case of each registration or
qualification pursuant to Section 11(b) of this Agreement, Sealed
Air will keep Poly-Cell advised as to the initiation of
proceedings for such registration and qualification and as to the
completion thereof, and will advise Poly-Cell, upon request, of
the progress of such proceedings.
(e) Indemnification. Sealed Air will indemnify and
hold harmless Poly-Cell and the Permitted Transferees against any
losses, claims, damages or liabilities, joint or several, and
expenses (including reasonable costs of investigation) to which
Poly-Cell or the Permitted Transferees may be subject, under the
Securities 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 any registration
statement under which the Sealed Air Shares were registered under
the Securities Act pursuant to Section 11(b) of this Agreement,
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 Poly-Cell or any Permitted Transferee
for the period prior to the Closing Date or any other
information, furnished to Sealed Air in writing by Poly-Cell or
any Permitted Transferee (with respect to which information Poly-
Cell and the Permitted Transferees shall so indemnify and hold
harmless Sealed Air and each person, if any, who controls Sealed
Air within the meaning of the Securities Act). In order to
provide for just and equitable contribution in circumstances in
which the indemnification provided for above in this Section
11(e) is due in accordance with its terms but is unavailable,
Sealed Air or Poly-Cell and the Permitted Transferees, 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 misrepresentation (within the meaning
of Section 11(f) of the Securities Act) shall be entitled to
contribution from any person who was not guilty of such
fraudulent misrepresentation.
Section 12. Miscellaneous.
(a) Corporate Examination; Investigations. From time
to time prior to the Closing Date, Polypride and Sealed Air 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 Poly-Cell relating to the Acquired Business, and, subject to
the prior consent of Poly-Cell, which will not be unreasonably
withheld, with Poly-Cell's suppliers, licensees and customers, to
the extent that Polypride deems necessary or advisable to
investigate the business or affairs of Poly-Cell or to verify the
representations and warranties of Poly-Cell contained in this
Agreement, the information contained in other documents and
information provided to Polypride and Sealed Air by Poly-Cell,
and the compliance by Poly-Cell with its obligations contained in
this Agreement. Such investigation, examination and
consultation shall be done at reasonable times and under
reasonable circumstances, and Poly-Cell shall cause its
directors, officers, employees, independent public accountants,
counsel and other representatives to cooperate fully therewith.
No such investigation, examination or consultation shall limit or
qualify in any way any of the representations, warranties or
covenants of Poly-Cell or any other party under this Agreement.
(b) Confidentiality. Polypride and Sealed Air will,
prior to the Closing, hold, and will use their reasonable
commercial efforts to cause their officers, directors, advisors,
and agents to hold, in confidence, unless compelled to disclose
by judicial or administrative process or by other requirements of
law, all confidential documents and information concerning Poly-
Cell furnished to Polypride or Sealed Air in connection with the
transactions contemplated by this Agreement, except to the extent
that such information was (i) previously known on a
nonconfidential basis by Polypride or Sealed Air, (ii) in the
public domain through no fault of Polypride or Sealed Air, or
(iii) later lawfully acquired by Polypride or Sealed Air from
other sources; provided that Polypride and Sealed Air may
disclose such information to their officers, directors, advisors
and agents in connection with the transactions contemplated by
this Agreement so long as such persons are informed by Polypride
or Sealed Air of the confidential nature of such information and
are directed by Polypride or Sealed Air to treat such information
confidentially. Polypride's and Sealed Air's obligations to hold
any such information in confidence shall be satisfied if they
exercise the same care with respect to such information as they
would take to preserve the confidentiality of their own similar
information. If this Agreement is terminated prior to Closing,
such confidence shall be maintained, and Polypride and Sealed Air
will, and will use their reasonable commercial efforts to cause
their officers, directors, advisors and agents to, destroy or
deliver to Poly-Cell, upon request, all documents and other
materials, and all copies thereof, obtained by or on behalf of
Polypride or Sealed Air from Poly-Cell in connection with the
transactions contemplated by this Agreement that are subject to
such confidence.
(c) Merger Clause. This Agreement contains the final,
complete and exclusive statement of the agreement between the
parties with respect to the transactions contemplated herein and
all prior or contemporaneous written or oral agreements with
respect to the subject matter hereof (including without
limitation the letter agreement between Sealed Air and Poly-Cell
dated June 26, 1995) are merged herein.
(d) Amendments. No change, amendment, qualification
or cancellation hereof shall be effective unless in writing and
executed by each of the parties hereto by their duly authorized
officers.
(e) Binding Effect. This Agreement shall be binding
upon and shall inure to the benefit of the parties hereto and
their respective successors and assigns. This Agreement shall
not confer any rights or benefits upon any other person or entity
other than the parties hereto and their respective successors and
assigns.
(f) Notices. All notices, requests and demands and
other communications hereunder must be in writing and shall be
deemed to have been duly given when personally delivered or when
placed in the mails and forwarded by registered or certified
mail, return receipt requested, postage prepaid, or transmitted
by facsimile, addressed to the party to whom such notice is being
given, at the following addresses:
If to Poly-Cell, to: Bubble Out, Inc.
P. O. Box 2161
Tupelo, Mississippi 38803
Attention: Mr. Jim Owen
President
Facsimile No.: (601) 844-0403
with copy to: Albert G. Delgadillo
P. O. Box 7120
Tupelo, Mississippi 38802
Facsimile No.: (601) 842-8450
If to the Controlling
Stockholders, to: P. O. Box 2161
Tupelo, Mississippi 38803
If to Polypride
or to Sealed Air, to: Sealed Air Corporation
Park 80 East
Saddle Brook, New Jersey 07663-5291
Attention: Robert M. Grace, Jr.,
Esq., General Counsel and Secretary
Facsimile No.: (201) 703-4113
Any party may change the address to which notices to it are to be
sent by giving notice of such change to the other party in
accordance with this Section.
(g) Captions. The captions herein are for convenience
of reference only and shall not be construed as a part of this
Agreement.
(h) Governing Law. This Agreement shall be construed,
interpreted, enforced and governed by and under the laws of the
State of Mississippi (without giving effect to the principles of
conflicts of law).
(i) Exhibits. All of the Exhibits referred to in this
Agreement are hereby incorporated herein by reference and shall
be deemed and construed to be a part of this Agreement for all
purposes.
(j) Severability. The invalidity or unenforceability
of any one or more phrases, sentences, clauses or provisions of
this Agreement shall not affect the validity or enforceability of
the remaining portions of this Agreement or any part thereof.
(k) Counterparts. This Agreement may be executed in
any number of counterparts, all of which shall constitute one and
the same instrument.
(l) Conduct of Business of Polypride and Sealed Air.
Neither the entering into, nor any provision contained in, this
Agreement shall in any way be construed or deemed, either before
or after the Closing, to restrict Polypride or Sealed Air in the
conduct of its business.
(m) Furnishing of Information. Prior to the Closing,
Polypride and Sealed Air will afford to Poly-Cell, at such times
during normal business hours as may be reasonably requested by
it, the opportunity to ask questions, and to receive answers,
concerning the business and financial affairs of Polypride and
Sealed Air from persons authorized to act on Polypride's or
Sealed Air's behalf and the opportunity to obtain any additional
publicly available information (to the extent Polypride or Sealed
Air has such information or can acquire it without unreasonable
effort or expense) that Poly-Cell may reasonably request
concerning the Sealed Air Shares to be issued pursuant to this
Agreement.
(n) References to "Best Knowledge". The phrase "to
the best knowledge of Poly-Cell or the Controlling Stockholders",
or phrases of similar import with respect to any of the parties,
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 party 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.
(o) Announcements. Neither Poly-Cell nor any of the
Controlling Stockholders shall make, and shall not cause or
permit any person, entity, employee or agent associated with
Poly-Cell to make, any public announcement, written or oral, of
or relating to the transactions contemplated by this Agreement
without Sealed Air's prior written approval.
(p) Further Assurances and Cooperation. Poly-Cell and
the Controlling Stockholders shall, from time to time after the
Closing, execute and deliver such further instruments and
documents and take such further actions as Polypride or Sealed
Air may determine to be necessary or appropriate in order to vest
in Polypride good title to the Acquired Assets or in order to
evidence or facilitate any of the transactions referred to in
this Agreement or in any Ancillary Agreement.
IN WITNESS WHEREOF, the parties have caused this
Agreement to be duly executed pursuant to due authorization as of
the day and year first above written.
POLY-CELL, INC.
By s/ Jim Owen
Name: Jim Owen
Title: President
s/Jim Owen
Jim Owen
s/Rodney Pennington
Rodney Pennington
s/Benny Tai-Shou Lee
Benny Tai-Shou Lee
POLYPRIDE, INC.
By s/William V. Hickey
Name: William V. Hickey
Title: Vice President
SEALED AIR CORPORATION
By s/William V. Hickey
Name: William V. Hickey
Title: Executive Vice
President
EXHIBITS TO ACQUISITION AGREEMENT
Exhibit A Equipment
Exhibit B Contracts
Exhibit C Intellectual Property
Exhibit D Non-Competition Agreement
Exhibit E Employment Agreement
Exhibit F Distributorship Agreement
Exhibit G Poly-Cell Legal Opinion
Exhibit H Pontotoc Deed
Exhibit I Licenses
Exhibit J Sealed Air Legal Opinion
The Registrant agrees to furnish supplementally a copy of any of
the above exhibits to the Commission upon request.
SEALED AIR CORPORATION
PARK 80 EAST
SADDLE BROOK, NEW JERSEY 07663-5291
(201) 791-7600/FAX (201) 791-4205
EXHIBIT 5
January 19, 1996
Sealed Air Corporation
Park 80 East
Saddle Brook, N.J. 07663
Dear Sirs:
I am the 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 69,333 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 an Acquisition Agreement
dated as of November 21, 1995 (the "Acquisition Agreement"), among Poly-Cell,
Inc., a Mississippi corporation ("Poly-Cell"), certain of the Selling
Stockholders, the Corporation, and Polypride, Inc., a Delaware corporation and
wholly-owned subsidiary of the Corporation ("Polypride"). Pursuant to the
Agreement, Polypride acquired substantially all of the business and assets of
Poly-Cell, except for certain excluded assets, on November 21, 1995.
As General 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 Acquisition 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 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.
I wish to advise you that I am a member of the Bar of the State of
New York.
Very truly yours,
Robert M. Grace, Jr.
General Counsel and Secretary
RMG/sa
Exhibit 23.2
Independent Auditors' Consent
The Board of Directors
Sealed Air Corporation:
We consent to the use of our reports dated January 18, 1995 on
the consolidated financial statements and related schedule of
Sealed Air Corporation and subsidiaries as of December 31, 1994
and 1993, and for each of the years in the three-year period
ended December 31, 1994 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
January 19, 1996
Exhibit 23.3
Consent of Independent Auditors
We consent to the reference to our firm under the caption
"Experts" in the Registration Statement (Form S-3) and related
Prospectus of Sealed Air Corporation for the registration of
69,333 shares of its common stock and to the incorporation by
reference therein of our report dated 26 August 1994 (21 December
1994 as to certain information in Notes 16, 23 and 24), with
respect to the consolidated financial statements of Trigon
Industries Limited as of 30 June 1994 and for the year then
ended, included in Sealed Air Corporation's Current Report (Form
8-K) dated 24 January 1994, as amended August 10, 1995, filed
with the Securities and Exchange Commission.
ERNST & YOUNG
Chartered Accountants
Auckland, New Zealand
19 January 1996
