[LETTERHEAD OF WACHTELL, LIPTON, ROSEN & KATZ]
______________, 19__
W. R. Grace & Co.
W. R. Grace & Co.-Conn.
One Town Center Road
Boca Raton, Florida 33486-1010
Ladies and Gentlemen:
We have acted as special counsel to W. R. Grace & Co.
("Grace"), a Delaware corporation, in connection with:
A. the distributions (the "Distributions") (a) to Grace by W.
R. Grace & Co.-Conn. ("Grace-Conn."), a Connecticut corporation and a
wholly-owned subsidiary of Grace, of all of the outstanding stock of
Cryovac, Inc. ("Packco"), a Delaware corporation and a wholly owned
subsidiary of Grace-Conn. following the contribution (the "Packco
Contribution") of the assets and liabilities of Grace-Conn.'s packaging
business to Packco, and (b) by Grace pro rata to the holders of its
common stock of all the issued and outstanding common stock of Grace
Specialty Chemicals, Inc., a Delaware corporation ("New Grace") (the
"Grace Distribution"), following the contribution (the "New Grace
Contribution") by Grace to New Grace of all of the outstanding stock of
Grace-Conn.; and
B. the merger of Packco Acquisition Corp. ("Merger Sub"), a
Delaware corporation and a wholly-owned subsidiary of Grace, with and
into Sealed Air Corporation, a Delaware Corporation ("Sealed Air") (the
"Merger");and
(iii) the recapitalization of Grace common stock
immediately prior to the Merger;
all of the foregoing upon the terms and conditions as set forth in the
Distribution Agreement by and among Grace, Grace-Conn. and New Grace dated as of
_________________ (the "Distribution Agreement"), and the Agreement and Plan of
Merger by and among Grace, Merger Sub and Sealed Air dated as of August 14, 1997
(the "Merger Agreement", and together with the Distribution Agreement, the
"Agreements"). Reference is hereby made to Section 7.1(c) of the Merger
Agreement.
Any capitalized term used and not defined herein has the
meaning given to it in the Tax Sharing Agreement by and among Grace, Grace-Conn.
and Sealed Air dated as of ______________ (the "TSA").
In this connection, we have reviewed: (i) the Cer tificate of
Incorporation and By-laws of each of Grace, Grace Conn., New Grace, Packco, and
Merger Sub, as currently in effect and as they are proposed to be amended prior
to the Distribution; (ii) the Agreements; (iii) certain resolutions adopted by
the Board of Directors of each of Grace, New Grace, Grace-Conn. and Sealed Air;
and (iv) such other documents, records and papers as we have deemed necessary or
appropriate in order to give the opinions set forth herein. For purposes of the
opinion set forth below, we have relied, with the consent of Grace and
Grace-Conn. and with the consent of Sealed Air, upon the accuracy and
completeness of the statements and representations (which statements and
representations we have neither investigated nor verified) contained,
respectively, in the Tax Matters Certificates of the officers of Grace,
Grace-Conn., Packco and Sealed Air (copies of which are attached hereto and
which are incorporated herein by reference), which certificates we have assumed
will be complete and accurate as of the Effective Time. We have assumed the
authenticity of all documents submitted to us as originals and the conformity to
original documents of all documents submitted to us as copies.
We have also assumed that the transactions contemplated by the
Agreements will be consummated in accordance with the provisions of the
Agreements and the exhibits thereto and that the Merger will qualify as a
statutory merger under the applicable laws of the State of Delaware. We have
also assumed that no "5-percent shareholder", within the meaning of Section
1.367(e)-1T of the Treasury Regulations, will receive shares of New Grace in the
Distribution of New Grace by Grace.
Based upon such examination and review and subject to the
foregoing, it is our opinion that, under presently applicable provisions of the
Internal Revenue Code of 1986, as amended (the "Code"), and the rules and
regulations promulgated thereunder:
1. Each of the Distributions will be a transaction described
in Section 355(a), and the Packco and New Grace Contributions will each be a
reorganization described in Section 368(a)(1)(D) of the Code, and accordingly:
(a) No gain or loss will be recognized by the
shareholders of Grace solely by reason of the Distributions; and
(b) Pursuant to Section 355(c) and Section
361(c), no gain or loss will be recognized by either Grace or Grace-Conn.
pursuant to Section 311 of the Code solely by reason of the Distributions, the
New Grace Contribution or the Packco Contribution.
2. No gain or loss will be recognized by Grace or its
shareholders, solely as a result of Grace's issuance of preferred stock pursuant
to the recapitalization of Grace immediately prior to the Merger.
We render no opinion as to the federal income tax consequences
to the shareholders of Grace of the recapitalization of Grace immediately prior
to the Grace Merger nor as to the consequences of the Distributions, the New
Grace Contribution and the Merger under any other provisions of the Code
(including Section 482) or state, local or foreign income tax laws.
This opinion may not be applicable to Grace shareholders who
received their Grace Common Stock pursuant to the exercise of employee stock
options or otherwise as compensation or who are not citizens or residents of the
United States.
We are furnishing this opinion solely in connection with the
transactions contemplated by the Agreements, and it is not to be relied upon,
used, circulated, quoted, or otherwise referred to for any other purpose or by
any other party without our consent.
We hereby consent to the filing of this opinion as an exhibit
to the Registration Statement on Form S-4, including any post-effective
amendments thereof, of Grace relating to the Merger. In addition, we consent to
the reference to us under the captions "The Reorganization and Merger," "The
Distribution and Merger Agreements" and "Legal Matters" in the Joint Proxy
Statement/Prospectus, dated as of February __, 1998. In giving such consent, we
do not admit that we are in the category of persons whose consent is required
under Section 7 of the Securities Act of 1933, as amended.
Very truly yours,
WACHTELL, LIPTON, ROSEN & KATZ