1045309--2/25/2010--W_R_GRACE_&

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{interest, director, officer}

{cost, regulation, environmental}

{cost, operation, labor}

{operation, international, foreign}

{gas, price, oil}

{cost, contract, operation}

{customer, product, revenue}

{debt, indebtedness, cash}

{tax, income, asset}

{property, intellectual, protect}

{loss, insurance, financial}

{system, service, information}

{financial, litigation, operation}

Our proposed joint plan of reorganization, if confirmed and effective, may substantially impact the value of currently outstanding shares of Grace common stock. If our proposed joint plan of reorganization is not confirmed or does not become effective, the outcome of our Chapter 11 cases could result in the substantial dilution or cancellation of Grace's currently outstanding common stock. If objections to the Joint Plan are resolved adversely to Grace and the other proponents of the Joint Plan or if rulings resolving objections favorably to the proponents of the Joint Plan are appealed, conditions to the effectiveness of the Joint Plan may not be satisfied and the timing and terms of our emergence from Chapter 11 could be materially affected. The bankruptcy process may disrupt our business. Chapter 11 limits the flexibility of our management team in running our business. Our financial statements do not reflect the terms of the proposed Joint Plan. The proforma and prospective financial information that we filed with the bankruptcy court as an exhibit to the Joint Plan has not been and may not be fully updated to reflect events that occur after that filing and is subject to numerous assumptions. We may not be able to collect all asbestos-related insurance payments that may be due to us. We are subject to environmental clean-up fines, penalties and damage claims that have been and continue to be costly. We are subject to liabilities with respect to businesses that we have divested in the past. We have unfunded and underfunded pension plan liabilities. We will likely require current and future operating cash flow to fund the shortfall. We have no assurance that we will generate sufficient cash flow to satisfy these obligations. The global scope of our operations subjects us to the risks of doing business in foreign countries, which could adversely affect our business, financial condition and results of operations. We are exposed to currency exchange rate changes that impact our profitability. Our ability to use tax deductions to reduce future tax payments may be limited if there is a change in ownership of Grace or if Grace does not generate sufficient U.S. taxable income. We may be subject to claims of infringement of the intellectual property rights of others, which could hurt our business. While Grace is in bankruptcy, we are not permitted to pay dividends on Grace common stock. The length and depth of product and industry business cycles in our segments may result in periods of reduced sales, operating margins and operating losses. Prices for certain raw materials and energy are volatile; we may not be able to pass through increases in costs and expenses for raw materials and energy or maintain our current pricing levels which may hurt our profitability. A substantial portion of our raw materials are commodities whose prices fluctuate as market supply and demand fundamentals change. We spend large amounts of money for environmental compliance in connection with our current and former operations. We work with dangerous materials that can injure our employees, damage our facilities and disrupt our operations. Some of our employees are unionized, represented by workers' councils or employed subject to local laws that are less favorable to employers than the laws in the United States.

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1045309--2/25/2010--W_R_GRACE_&_CO