Asset Purchase Agreement - Pactiv Corp., Pactiv Business Services Inc. and Exult Inc.
ASSET PURCHASE AGREEMENT
ASSET PURCHASE AGREEMENT dated as of December 20, 1999, among PACTIV
CORPORATION, a Delaware corporation ("Pactiv"), PACTIV BUSINESS SERVICES INC., a
Delaware corporation formerly known as Tenneco Business Services, inc. ("PBS"),
and EXULT, INC., a Delaware corporation ("Exult").
PRELIMINARY STATEMENTS
A. PBS is an Affiliate of Pactiv, and operates as a business unit which
provides certain financial and administrative services (the "PBS Services") to
Pactiv, to certain Affiliates and former Affiliates of Pactiv (including Tenneco
Automotive Inc., a Delaware corporation ("TA")), to Packaging Corporation of
America, a Delaware corporation and divested Affiliate of Pactiv ("PCA"), and to
the folding carton division of Caraustar Industries Inc., which division was
formerly part of Pactiv ("Caraustar").
B. Upon the terms and subject to the conditions set forth more fully
herein, Pactiv and PBS desire to sell to Exult, and Exult desires to purchase
from Pactiv and PBS, certain of the assets used by PBS in providing such PBS
Services.
C. In connection with such sale, Exult will enter into (i) a service
agreement with Pactiv, pursuant to which Exult will provide certain services to
Pactiv and, pursuant to Pactiv's existing contracts with PCA and Caraustar, to
PCA and Caraustar, and (ii) a service agreement with TA
NOW, THEREFORE, the parties agree as follows:
ARTICLE I
DEFINITIONS AND TERMS
1.1 SPECIFIC DEFINITIONS. As used in this Agreement, the following
terms shall have the meanings set forth or as referenced below:
(a) "AFFILIATES" shall mean, with respect to any Person, any Persons
directly or indirectly controlling, controlled by or under common control with,
such other Person as of the date on which, or at any time during the period for
which, the determination of affiliation is being made. For the purpose of this
definition, "control" means (i) the ownership or control of 50% or more of the
equity interest in any Person, or (ii) the ability to direct or cause the
direction of the management or affairs of a Person, whether through the direct
or indirect ownership of voting interests, by contract or otherwise.
(b) "AGREEMENT" shall mean this Agreement (including the Preliminary
Statements and all Schedules), as the same may be amended or supplemented from
time to time in accordance with the terms hereof.
(c) "ANCILLARY AGREEMENTS" shall mean the Pactiv Services Agreement,
the TA Services Agreement, and each of the instruments of transfer and
assignment required to be delivered by the parties pursuant to Section 2.4 or
Section 2.5 of this Agreement.
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(d) "ASSUMED LIABILITIES" shall mean all liabilities, commitments, or
obligations of Pactiv or PBS accruing from and after the Effective Time under
the Transferred Contracts, provided that Exult is not assuming liabilities that
arise solely from the transfer of the Transferred Contracts to Exult.
(e) "BOOKS AND RECORDS" shall mean all books, records, files and
documents, in any medium relating to any of the Transferred Equipment, the
Transferred Licenses, or the Transferred Contracts.
(f) "CLAIM NOTICE" shall have the meaning set forth in Section 7.5.
(g) "CONSENT" shall mean any consent, approval, authorization, waiver,
permit, grant, franchise, concession, agreement, license, exemption or order of,
registration, certificate, declaration or filing with, or report or notice to
any Person, including any governmental authority necessary to effect the
transfer of the Purchased Assets from Pactiv or PBS to Exult.
(h) "EFFECTIVE TIME" shall mean 12:01 a.m. (Houston time) on January 1,
2000, or such later date or time as may be agreed to by the parties or as such
date or time may be extended in accordance with Section 6.1(d)..
(i) "EMPLOYEE BENEFIT PLAN" means any employee benefit plan as defined
in Section 3(3) of ERISA, including any pension plan, as defined in Section 3(2)
of ERISA, and any welfare plan, as defined in Section 3(1) of ERISA, and each
bonus or other incentive compensation, severance, reduction in force,
relocation, salary continuation for sickness or other disability, vacation or
education assistance program, or other employee benefit plan, policy or
arrangement.
(j) "EMPLOYEES" shall mean Persons who are employed by PBS or Pactiv at
the Woodlands Facility in providing the PBS Services as of the Effective Time,
including Inactive Employees. Employees shall include persons who are on the
active payroll of PBS or Pactiv immediately prior to the Effective Time and who,
although not performing direct services on such date, are deemed to be active
employees under PBS's or Pactiv's standard personnel policies, such as employees
on vacation, or employees who are on an unpaid leave of absence pursuant to the
Family and Medical Leave Act of 1993, as amended. Employees shall not include
persons who provide services to Pactiv or PBS pursuant to a contractual
relationship between PBS or Pactiv and a third party.
(k) "ENCUMBRANCES" shall mean liens, charges, encumbrances, security
interests, options or any other restrictions or third-party rights.
(l) "ENVIRONMENTAL LAWS" shall mean all statutes, ordinances, orders,
rules, regulations, plans, policies or decrees and the like relating to (i)
environmental matters, including those relating to fines, injunctions,
penalties, damages, contribution, cost recovery compensation, losses or injuries
resulting from the release or threatened release of Hazardous Substances, (ii)
the generation, use, storage, transportation or disposal of Hazardous
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Substances, or (iii) human safety and health and industrial hygiene in any
manner applicable to Pactiv, PBS, their respective Affiliates or the Woodlands
Facility, including the Comprehensive Environmental Response, Compensation, and
Liability Act "CERCLA" (42 U.S.C. Section 9601 et seq.), the Hazardous Materials
Transportation Act (49 U.S.C. Section 1801 et seq.), the Resource Conservation
and Recovery Act (42 U.S.C. Section 6901 et seq.), the Federal Water Pollution
Control Act (33 U.S.C. Section 1251 et seq.), the Clean Air Act (42 U.S.C.
Section 7401 et seq.), the Toxic Substances Control Act (15 U.S.C. Section 2601
et seq.), the Federal Insecticide, Fungicide and Rodenticide Act (7 U.S.C.
Section 136 et seq.), the Occupational Safety Planning and Community
Right-to-Know Act (42 U.S.C. Section 11001 et seq.), each as amended or
supplemented, and any analogous local, state and federal laws, ordinances, rules
and regulations promulgated pursuant thereto.
(m) "ERISA" shall mean the Employee Retirement Income Security Act of
1974, as amended.
(n) "EXULT INDEMNIFIED PARTIES" shall have the meaning set forth in
Section 7.3.
(o) "HAZARDOUS SUBSTANCES" means (i) any chemical, material or
substance of any quantity at any time defined as or included in the definition
of "hazardous substances", "hazardous wastes", "hazardous materials", "extremely
hazardous waste", "restricted hazardous waste", "infectious waste", "toxic
substances", "pollutant", "contaminant," special waste, medical waste, or any
formulations intended to define, list or classify substances by reason of
deleterious properties such as ignitability, corrosivity, reactivity,
carcinogenicity, toxicity, reproductive toxicity, "TCLP toxicity" or "EP
toxicity" or words of similar import under any applicable Environmental Laws or
publications promulgated pursuant thereto; (ii) an oil, petroleum, petroleum
fraction or petroleum derived substance; (iii) any drilling fluids, produced
waters and other wastes associated with the exploration, development or
production of crude oil, natural gas or geothermal resources; (iv) any
radioactive materials; (v) asbestos in any form; (vi) urea formaldehyde foam
insulation; (vii) electrical equipment which contains any oil dielectric fluid
containing polychlorinated byphenyls; (viii) pesticides; and (ix) any other
chemical, material or substance, exposure to which is prohibited, limited or
regulated by any Environmental Laws.
(p) "INACTIVE EMPLOYEES" shall mean persons who are employed by PBS or
Pactiv at the Woodlands Facility but who are temporarily absent as of the
Effective Time from active employment by reason of illness or injury and who are
receiving, eligible to receive, or have previously received, with respect to
such illness or injury, workers' compensation or disability payments.
(q) "INDEMNIFIED PARTIES" shall have the meaning set forth in Section
7.3.
(r) "INDEMNIFYING PARTY" shall have the meaning set forth in Section
7.5.
(s) "KNOWLEDGE" or any similar phrase means the actual knowledge of
those management employees of Pactiv or PBS identified on Schedule 1.1.1.
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(t) "LOSSES" shall have the meaning set forth in Section 7.2.
(u) "NOTICE PERIOD" shall have the meaning set forth in Section 7.5.
(v) "PACTIV INDEMNIFIED PARTIES" shall have the meaning set forth in
Section 7.2.
(w) "PACTIV SERVICES AGREEMENT" means the services agreement in
substantially the form of Exhibit A, to be entered into between Pactiv and
Exult.
(x) "PERSON" shall mean an individual, a corporation, a partnership, an
association, a trust or other entity or organization.
(y) "PURCHASED ASSETS" shall mean the following assets, properties and
rights of PBS or Pactiv, as the case may be, as they exist on the date hereof,
with such changes, deletions or additions thereto as may occur from the date
hereof to the Effective Time consistent with the terms and conditions of this
Agreement:
(i) the Transferred Equipment;
(ii) the Transferred Licenses;
(iii) the Transferred Contracts; and
(iv) the Books and Records.
The rights under the Transferred Contracts or Transferred Licenses accruing
prior to the Effective Time (including any claims for overpayments) are not
included in the Purchased Assets.
(z) "RETAINED ASSETS" shall mean all assets of Pactiv or PBS other than
the Purchased Assets.
(aa) "RETAINED LIABILITIES" shall mean all liabilities of Pactiv or PBS
other than the Assumed Liabilities. Without limiting the generality of the
foregoing, the Retained Liabilities include:
(i) Any liabilities or obligations under any Transferred
Contract or Transferred License required to be paid or performed on or
prior to the Effective Time;
(ii) Other than as set forth in Section 5.4(b) (regarding
Exult's obligation to employ certain Employees on Family Medical Leave
Act or Inactive Employees), Section 5.4(e) (regarding Exult's
obligation to grant Transferred Employees credit for their years of
service with Pactiv or PBS prior to the Effective Time) or Section 5.5
(regarding certain WARN Obligations), any accrued or other liability to
or with respect to any Employee relating to service prior to the
Effective Time or the transfer of the Transferred Employees to Exult,
including severance
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benefits, pension benefits, vacation benefits, sick leave benefits,
holiday pay and any accrued or other liability under any plan or
agreement of the type described in Section 3.8 with respect to any past
or present Employees of Pactiv, PBS or their current or former
Affiliates;
(iii) Any liabilities or obligations of Pactiv, PBS or their
respective Affiliates in respect of any Environmental Laws or any
Hazardous Substances;
(iv) Any liability of Pactiv, PBS or their current or former
Affiliates for any Taxes due before, on or after the date of this
Agreement, except as provided in Section 2.6;
(v) Any liabilities or obligations arising from any violation
by Pactiv, PBS or their respective current or former Affiliates of any
federal, state, local or foreign law, decree, order or regulation or
arising from their failure to obtain or maintain any federal, state,
local or foreign license, permit or other governmental authorization;
(vi) Any liability or obligation (contingent or otherwise)
arising out of any threatened or pending litigation against Pactiv or
PBS;
(vii) Any liability or obligation of Pactiv or PBS arising
prior to the Effective Time, including any liability or obligation
arising from any act, occurrence, event or omission which occurs (or
fails to occur) before the Effective Time; and
(viii) Any indebtedness of Pactiv, PBS or their respective
current or former Affiliates.
(bb) "TA SERVICES AGREEMENT" means the services agreement in
substantially the form of Exhibit B, to be entered into between TA and Exult.
(cc) "SERVICE AGREEMENTS" means the Pactiv Services Agreement and the
TA Services Agreement.
(dd) "TAXES" shall mean all federal, state, local or foreign taxes,
including but not limited to income, gross receipts, windfall profits, goods and
services, value added, severance, property, production, sales, use, license,
excise, franchise, employment, withholding or similar taxes, together with any
interest, additions or penalties with respect thereto and any interest in
respect of such additions or penalties.
(ee) "TRANSFERRED CONTRACTS" shall mean those contracts, leases and
other agreements listed on Schedule 1.1.2 hereof.
(ff) "TRANSFERRED EMPLOYEES" shall mean those Employees employed by
Exult pursuant to Section 5.4 hereof.
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(gg) "TRANSFERRED EQUIPMENT" shall mean all furniture, fixtures,
furnishings, leasehold improvements, machinery, equipment, computers and
computer peripheral, telecommunication devices, spare parts, and other tangible
personal property located at the Woodlands Facility (other than the items
identified on Schedule 1.1.3), and all express and implied warranties with
respect to any of the foregoing items. A list of certain items of Transferred
Equipment is attached hereto as Schedule 1.1.4.
(hh) "TRANSFERRED LICENSES" shall mean all permits, approvals,
certifications, and authorizations (to the extent transferrable to Exult) held
by Pactiv or PBS in connection with the other Purchased Assets, the Woodlands
Facility, or the services to be provided by Exult under the Service Agreements,
including those listed on Schedule 1.1.4 hereof.
(ii) "WOODLANDS FACILITY" shall mean the premises leased by PBS at 8401
New Trails Drive, The Woodlands, Texas.
1.2 OTHER TERMS. Other terms may be defined elsewhere in the text of
this Agreement, and unless otherwise indicated shall have such meanings
throughout this Agreement.
1.3 OTHER DEFINITIONAL PROVISIONS.
(a) The words "hereof", "herein", and "hereunder" and words of similar
import, when used in this Agreement, shall refer to this Agreement as a whole
and not to any particular provision of this Agreement. The word "including"
means "including without limitation."
(b) The terms defined in the singular shall have a comparable meaning
when used in the plural, and vice versa.
(c) The terms "dollars" and "$" shall mean United States dollars.
ARTICLE II
PURCHASE AND SALE OF ASSETS
II.1 PURCHASE AND SALE OF ASSETS. On the terms and subject to the
conditions set forth herein (a) Exult shall pay to Pactiv $3,500,000 as the
purchase price for the Purchased Assets, (b) Pactiv and PBS shall sell, convey,
transfer, assign and deliver to Exult all of Pactiv's and PBS's right, title and
interest in and to the Purchased Assets, and (c) Pactiv and PBS shall assign to
Exult, and Exult shall accept and assume, the Assumed Liabilities.
II.2 RETAINED ASSETS AND RETAINED LIABILITIES. Notwithstanding anything
herein to the contrary, (i) from and after the Effective Time each of Pactiv,
PBS, and their Affiliates shall retain all of its direct or indirect right,
title and interest in and to, and there shall be excluded from the sale,
conveyance, assignment or transfer to Exult hereunder, the Retained
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Assets, and (ii) the Retained Liabilities shall be retained by Pactiv and/or
PBS, as applicable, and shall not be assumed by Exult hereunder.
II.3 EFFECTIVE TIME. Subject to the satisfaction or waiver (by the
party entitled to waive the condition) of all conditions set forth in Article
VI, and the delivery by the parties of the items required by Section 2.4 and
Section 2.5 hereof, the transfer of the Purchased Assets, and the assignment and
assumption of the Assumed Liabilities, shall be deemed to occur at the Effective
Time.
II.4 DELIVERIES BY EXULT. Prior to the Effective Time Exult shall
deliver to Pactiv the following:
(a) PURCHASE PRICE. The purchase price, of which $500,000 plus
the interest earned thereon shall come from the escrow previously
established by the parties, and the balance of the purchase price paid
by Exult. All payments shall be in immediately available funds, and
paid by wire transfer to an account designated by Pactiv;
(b) ASSIGNMENT AND ASSUMPTION AGREEMENT. An Assignment and
Assumption Agreement, in form and substance reasonably acceptable to
Pactiv and Exult, pursuant to which Pactiv and PBS assign to Exult, and
Exult assumes from Pactiv and PBS, the Assumed Liabilities (the
"Assignment and Assumption Agreement"), duly executed by Exult;
(c) LEASE ASSIGNMENT. A duly executed copy of an Assignment
and Assumption of Lease, in form and substance reasonably acceptable to
Pactiv and Exult (the "Lease Assignment"), pursuant to which PBS
assigns to Exult, and Exult assumes, the rights and obligations of PBS
accruing from and after the Effective Time under the real estate lease
listed as item 1 on Schedule 1.1.2 (the "Lease").
(d) ANCILLARY AGREEMENTS. A duly executed copy of each other
Ancillary Agreement;
(e) REQUIRED CONSENTS. Evidence reasonably satisfactory to
Pactiv that Exult has obtained all Consents identified on Schedule 4.3.
(f) CLOSING CERTIFICATES. The certificate required to be
delivered pursuant to Section 6.2; and
(g) OTHER. Such other instruments or documents as Pactiv may
reasonably request to effect the transactions contemplated by this
Agreement
II.5 DELIVERIES BY PACTIV. Prior to the Effective Time, Pactiv shall
deliver to Exult the following:
(a) BILL OF SALE. A bill of sale, in form and substance
reasonably acceptable to Pactiv and Exult, transferring to Exult all of
the Purchased Assets (the "Bill of Sale"), duly executed by Pactiv and
PBS;
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(b) ASSIGNMENT AND ASSUMPTION AGREEMENT. A copy of the
Assignment and Assumption Agreement, duly executed by Pactiv and PBS;
(c) LEASE ASSIGNMENT. A copy of the Lease Assignment, duly
executed by PBS;
(d) LICENSE ASSIGNMENTS. Assignments assigning to Exult all
Transferred Licenses, duly executed by Pactiv and PBS, as applicable;
(e) ANCILLARY AGREEMENTS. A copy of each other Ancillary
Agreement, duly executed by Pactiv, PBS, or TA, as the case may be;
(f) REQUIRED CONSENTS. Evidence reasonably satisfactory to
Exult that Pactiv has obtained all Consents identified on Schedule 3.3.
(g) CLOSING CERTIFICATE. The certificate required to be
delivered pursuant to Section 6.1; and
(h) OTHER. Such other instruments or documents as Exult may
reasonably request to effect the transactions contemplated hereby.
II.6 TRANSFER TAXES AND RECORDING FEES. Any and all Taxes (other than
Taxes imposed on income or gains) or fees imposed or incurred by reason of the
transfer of the Purchased Assets hereunder and/or the filing or recording of any
instruments necessary to effect the transfer of the Purchased Assets hereunder,
regardless of when such Taxes or fees are levied or imposed, including sales,
use, value-added, excise, real estate transfer, lease assignment, stamp,
transfer gains, documentary and similar Taxes and fees (the "Transfer Costs")
shall be the responsibility of, and shall be paid by, Exult.
II.7 CERTAIN TRANSFERS. If prior to Effective Time the parties shall
have not received a Consent necessary for the transfer to Exult of any Purchased
Asset, the failure to obtain such Consent shall not prevent consummation of the
transactions contemplated hereby. In such case, the consummation of the
transactions contemplated by this Agreement shall not constitute a transfer, or
any attempted transfer thereof, and the asset affected thereby shall not be a
"Purchased Asset." Rather, following the Effective Time, the parties shall use
reasonable efforts, and cooperate with each other, to obtain promptly such
Consent, provided that neither Pactiv nor Exult shall be required to pay any
consideration therefor or incur any liability or obligation in connection
therewith, other than filing, recordation or similar fees payable to any
governmental authority, which fees shall be paid by Exult. To the extent that
any such Purchased Asset cannot be transferred because a Consent was not
obtained, until such Consent is obtained, Exult, Pactiv and PBS shall cooperate
with each other in any reasonable and lawful arrangements (including subleasing
or subcontracting if permitted) to provide to Exult the full economic (taking
into account Tax costs and benefits) and operational benefits and liabilities of
use of any such Purchased Asset. Once such Consent for the transfer of a
Purchased Asset not transferred at the Effective Time is obtained, Pactiv or PBS
shall
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promptly transfer or cause to be transferred, such Purchased Asset to Exult for
no additional consideration.
II.8 PURCHASE PRICE ALLOCATION. The purchase price for the Purchased
Assets shall be allocated in accordance with Schedule 2.8.
II.9 SALES AND USE TAXES. The parties will cooperate with each other in
the event of the imposition or claimed imposition of any sales or use tax audit
for any period covering the date of sale. Such assistance shall include
providing adequate documentation to support a claim of occasional sale regarding
the assets purchased in this Agreement.
II.10 PRORATIONS. Any real or personal property Taxes with respect to
the Purchased Assets and any charges for rent, operating expenses, utilities or
similar items of expense shall be prorated as of the Effective Time. All such
expenses due with respect to periods on or before the Effective Time shall be
paid or satisfied by Pactiv or PBS, and all obligations due with respect to
periods after the Effective Time shall be paid or satisfied by Exult.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF PACTIV AND PBS
Pactiv and PBS makes the following representations and warranties, each
of which (i) is true as of the date of this Agreement, and (ii) will be true at
the Effective Time:
III.1 ORGANIZATION AND QUALIFICATION. Each of Pactiv and PBS is a
corporation duly organized, validly existing and in good standing under the laws
of the state of Delaware and has all requisite corporate power and authority to
own and operate the Purchased Assets and to carry on the PBS Services as
currently conducted. Each of Pactiv and PBS is qualified and in good standing in
the state of Texas.
III.2 CORPORATE AUTHORIZATION. Pactiv and PBS each has full corporate
power and authority to execute and deliver this Agreement and each of the
Ancillary Agreements to which it is a party, and to perform its respective
obligations hereunder and thereunder. The execution, delivery and performance by
Pactiv and PBS of this Agreement and each of the Ancillary Agreements to which
it is a party have been duly and validly authorized and no additional corporate
or shareholder authorization or consent is required in connection with the
execution, delivery and performance by Pactiv or PBS of this Agreement and each
of the Ancillary Agreements. Pactiv is the sole shareholder of PBS.
III.3 CONSENTS AND APPROVALS. Except as specifically set forth in
Schedule 3.3, no Consent is required to be obtained by Pactiv or PBS from, and
no notice or filing is required to be given by Pactiv or PBS to or made by
Pactiv or PBS with, any governmental authority or other Person or under any
Transferred Contract, in connection with the execution, delivery and performance
by Pactiv and PBS of this Agreement and each of the Ancillary Agreements, other
than in all cases where the failure to obtain such Consent, or to give or make
such notice or filing, would not materially impair or delay the ability of
Pactiv or PBS to perform their obligations hereunder or materially impair the
ability of Exult to own and use
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the Purchased Assets, use the Woodlands Facility, or to provide the services
required to be provided by it under the Service Agreements.
III.4 NON-CONTRAVENTION. The execution, delivery and performance by
Pactiv and PBS of this Agreement and each of the Ancillary Agreements, and the
consummation of the transactions contemplated hereby and thereby, does not and
will not (i) violate any provision of the certificate of incorporation or bylaws
of Pactiv or PBS, (ii) subject to obtaining the Consents referred to in Section
3.3, conflict with, or result in the breach of, or constitute a default under,
or result in the termination, cancellation or acceleration (whether after the
filing of notice or the lapse of time or both) of any right or obligation of
Pactiv or PBS under, or to a loss of any benefit to which Pactiv or PBS is
entitled under, any Transferred Contract or result in the creation of any
Encumbrance upon any of the Purchased Assets; or (iii) assuming compliance with
the matters set forth in Section 3.3, violate, or result in a breach of or
constitute a default under any law, rule, regulation, judgment, injunction,
order, decree or other restriction of any court or governmental authority to
which Pactiv or PBS is subject, other than, in the cases of clauses (ii) and
(iii), any conflict, breach, termination, default, cancellation, acceleration,
loss, violation or Encumbrance which, individually or in the aggregate, would
not materially impair or delay the ability of Pactiv or PBS to perform its
obligations hereunder or materially impair the ability of Exult to own and use
the Purchased Assets, use the Woodlands Facility, or to provide the services
required to be provided by it under the Service Agreements.
III.5 BINDING EFFECT. This Agreement constitutes, and each of the
Ancillary Agreements when executed and delivered by the parties thereto will
constitute, a valid and legally binding obligation of Pactiv or PBS, as the case
may be, enforceable in accordance with their respective terms, subject to
bankruptcy, insolvency, reorganization, moratorium and similar laws of general
applicability relating to or affecting creditors, rights and to general equity
principles.
III.6 LITIGATION AND CLAIMS. There is no civil, criminal or
administrative action, suit, demand, claim, hearing, proceeding or investigation
pending or, to the Knowledge of Pactiv or PBS, threatened, involving the PBS
Services or any of the Purchased Assets. To the Knowledge of Pactiv or PBS,
there is no civil, criminal or administrative action, suit, demand, claim,
hearing, proceeding or investigation pending or threatened involving the
Woodlands Facility. None of the Purchased Assets is subject to any order, writ,
judgment, award, injunction, or decree of any court or governmental or
regulatory authority of competent jurisdiction or any arbitrator or arbitrators.
III.7 TAXES. Pactiv and PBS have duly and timely filed (or caused to be
duly and timely filed) each tax return required to be filed with any tax
authority which includes or is based upon the Purchased Assets, or the
operations, ownership or activities of the PBS Services, such tax returns were
accurate, complete, and in compliance with law, in each case in all material
respects, and all Taxes which were shown to be due on such tax returns have been
paid prior to their due dates; provided, however, that the representations and
warranties set forth in this paragraph are made only to the extent that (i) such
Taxes are or may become Encumbrances on the Purchased Assets, or (ii) Exult is
or may be liable for any such Taxes.
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III.8 EMPLOYEE BENEFITS.
(a) Schedule 3.8 lists all Employee Benefit Plans currently
maintained by Pactiv, PBS, or their Affiliates for the Employees or in
which the Employees have the right to participate (collectively, the
"Pactiv Plans"). None of the Pactiv Plans constitutes a "multiemployer
plan" (as defined in Section 4001(a)(3) of ERISA. Pactiv has delivered
true and complete copies of each such Employee Benefit Plan to Exult.
Pactiv and PBS are in compliance, in all material respect, with each
such Employee Benefit Plan. There are no actions, suits, or claims
(other that routine claims for benefits) pending or, to the Knowledge
of Pactiv and PBS, threatened, against such Pactiv Plans, and to the
Knowledge of Pactiv and PBS, no facts exist which they believe will
give rise to any actions, suits or claims (other than routine claims
for benefits) against such Pactiv Plans or the assets of the Pactiv
Plans.
(b) To the Knowledge of Pactiv and PBS, no Employee Benefit
Plan is currently subject to an audit or other investigation by the
IRS, the Department of Labor, the Pension Benefit Guaranty Corporation
or any other governmental entity. No "prohibited transaction," as
defined in Section 406 of ERISA or Section 4975 of the Code, resulting
in material liability has occurred with respect to any Employee Benefit
Plan. Pactiv and PBS have no Knowledge of any breach of fiduciary
responsibility under Part 4 of Title I of ERISA which has resulted in
or would result in any material liability to Pactiv, PBS, any trustee,
administrator or fiduciary of any Employee Benefit Plan. Pactiv and PBS
have delivered or made available to Exult, for each Employee Benefit
Plan that is a pension plan that is intended to be "qualified" within
the meaning of Section 401(a) of the Code, a copy of the most recent
determination letter issued by the IRS to the effect that each such
Plan is so qualified and that each trust created thereunder is tax
exempt under Section 501 of the Code, and Pactiv and PBS are unaware of
any fact or circumstances that would jeopardize the qualified status of
each such pension plan or the tax exempt status of each trust created
thereunder. No Pactiv Plan has an "unfunded benefit liability" (as such
term is defined in Section 4001(a)(18) of ERISA). No Pactiv Plans which
are subject to Section 302 of ERISA or Section 412 of the Code has an
"accumulated funding deficiency" (as such term is defined in Section
302 of ERISA or Section 412 of the Code), whether or not waived. No
Pactiv Plan has a "liquidity shortfall" as defined in Section 412(m)(5)
of the Code. No notice has been required under Section 4011 of ERISA
with respect to any Pactiv Plan. No event described in Section
401(a)(29)of the Code has occurred or can reasonably be expected to
occur with respect to Pactiv or any of its Affiliates. No unreported
"reportable event" (as that term is defined in Section 4043 of ERISA
and for which the 30-day notice requirement has not been waived) has
occurred with respect to any such Pactiv Plan within the last six years
prior to the Effective Time, other than as may arise as a result of the
consummation of the transactions contemplated by this Agreement. Other
than pursuant to the Severance Benefit Plan, none of the Pactiv Plans
provides for post-employment life or health insurance, benefits or
coverage for any participant or any beneficiary of a participant,
except as may be required under the Consolidated Omnibus Budget
Reconciliation Act of 1985, as amended, or as may be offered as
individual conversion rights. Neither Pactiv, PBS or Exult have or will
have any material liability or obligation for taxes, penalties,
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contributions, losses, claims, damages, judgments, settlement costs,
expenses, costs or any other liability or liabilities of any nature
whatsoever arising out of or in any manner relating to any Employee
Benefit Plan that has been, or is, contributed to by any entity,
whether or not incorporated, which is deemed to be under common control
(as defined in Section 414 of the Code), with Pactiv. Notwithstanding
anything herein to the contrary, the representations and warranties set
forth in this Section 3.8(b) are made only to the extent that (i) the
breach of such representations would or may give rise to Encumbrances
on the Purchased Assets, or (ii) Exult is or may be liable for any
amounts as a result of a breach of such representations or warranties.
III.9 LABOR MATTERS. Neither Pactiv nor PBS is a party to any labor or
collective bargaining agreement with respect to Employees, no Employees are
represented by any labor organization and, to the Knowledge of Pactiv and PBS,
there are no organizing activities (including any demand for recognition or
certification proceedings pending or threatened in writing to be brought or
filed with the National Labor Relations Board or other labor relations tribunal)
involving the Employees. There are no complaints, charges or claims against
Pactiv or PBS pending or, to the Knowledge of Pactiv or PBS, threatened to be
brought or filed with any governmental authority, arbitrator or court based on
or arising out of the employment by Pactiv or PBS of any Employee. There are no
employment agreements between Pactiv or PBS and any Transferred Employee, other
than retention agreements (which are Retained Liabilities). Pactiv and PBS are
in compliance, in all material respects, with respect to the Transferred
Employees with all laws relating to the employment of labor, including all such
laws and orders relating to wages, hours, collective bargaining, discrimination,
civil rights, safety and health, workers' compensation and the collection and
payment of withholding and/or social security and similar taxes.
III.10 TRANSFERRED CONTRACTS. Each Transferred Contract is a valid and
binding agreement of Pactiv or PBS, as the case may be, and, to the Knowledge of
Pactiv and PBS, is valid and binding agreement of the other party or parties
thereto, and is in full force and effect. Pactiv has provided a true and
complete copy of each Transferred Contract to Exult, including all amendments,
modifications, supplements, certificates, subordinations and other documents
relating thereto or incorporated therein. There has not occurred any default
under any Transferred Contract on the part of Pactiv or PBS (other than
non-material defaults, defaults which have been waived in writing by the other
party thereto or cured in accordance with the terms of such Transferred
Contracts) or, to the Knowledge of Pactiv and PBS, on the part of the other
parties thereto, and, to the Knowledge of Pactiv and PBS, no event has occurred
which with the giving of notice or the lapse of time, or both, would constitute
a default under any Transferred Contract. No past default has occurred which has
resulted in loss of any material rights under any of the Transferred Contracts.
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III.11 PURCHASED ASSETS.
(a) Pactiv or PBS has good and marketable title to the Purchased
Assets, free and clear of all Encumbrances , except as set forth in Schedule
3.11 and for liens for Taxes, assessments and other governmental charges not yet
due and payable (collectively, the "Permitted Encumbrances"). Pactiv and PBS
have the right to use the Purchased Assets and, subject to the Consents
specified in Schedule 3.3, to transfer the Purchased Assets to Exult. The
delivery to Exult of the Ancillary Agreements will vest good and marketable
title to the Purchased Assets in Exult, free and clear of all Encumbrances other
than the Permitted Encumbrances and other than Encumbrances arising through
Exult. The Purchased Assets and the other rights granted to Exult hereunder or
under the Ancillary Agreements include all assets, rights and interests used by
PBS to provide the services to be provided by Exult under the Services
Agreement, in all material respects.
(b) Each item of Transferred Equipment is in good operating condition
and repair in all material respects, subject to normal wear and tear which is
not material either individually or in the aggregate.
III.12 LEASE.
(a) Attached hereto as Schedule 3.12(a) is a true and complete copy of
the Lease, including all amendments, modifications, supplements related thereto,
including any waivers executed by PBS, and any other documents incorporated
therein. PBS is the lessee under the Lease. PBS has not assigned, transferred or
sublet all or any portion of the Woodlands Facility. The currently monthly Base
Rent (as defined in the Lease) is $36,624.17, and the current monthly Additional
Rent (as defined in the Lease) is $32,068.33. The landlord under the Lease does
not hold any security deposit under the Lease. All rent, charges and other
payments due to the landlord under the Lease have been paid in full through and
including December 31, 1999.
(b) To the Knowledge of Pactiv and PBS, (i) all of the buildings,
improvements, fixtures, mechanical systems (including elevators, plumbing,
heating, air conditioning, ventilation, and life safety), and electrical systems
and emergency power systems located at the Woodlands Facility are in good
operating condition and repair in all material respects, and (ii) the Woodlands
Facility and the conduct of the PBS Services at the Woodlands Facility does not
violate any applicable building code, zoning ordinance or other permit, law or
regulation.
(c) To the Knowledge of Pactiv and PBS, the Woodlands Facility is
supplied with all utility services necessary for the operation thereof as it is
currently operated. PBS has not experienced during the two years preceding the
date hereof any material interruption in the delivery of adequate quantities of
any utilities (including electricity, natural gas, potable water, water for
cooling or similar purposes and fuel oil) or other public services (including
sanitary and industrial sewer service).
(d) To the Knowledge of Pactiv and PBS, no part of the Facility is the
subject of any pending or threatened condemnation or eminent domain proceeding.
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(e) There are no Persons in possession of any portion of the Woodlands
Facility other than PBS and employees of Pactiv, Tenneco Management Company, and
TA, and to the Knowledge of Pactiv and PBS no other Persons have any rights to
occupy any portion of the Woodlands Facility.
III.13 ENVIRONMENTAL MATTERS.
(a) To the Knowledge of Pactiv and PBS, the Woodlands Facility and all
operations conducted at the Facility comply with all Environmental Laws.
(b) Pactiv or PBS have obtained all authorizations under Environmental
Laws necessary for their operations at the Woodlands Facility and all such
authorizations are in good standing, and Pactiv and PBS are in compliance with
all material terms and conditions of such authorizations.
(c) Neither Pactiv nor PBS nor, to the Knowledge of Pactiv and PBS, the
owner of the Woodlands Facility, has received (i) any notice or claim to the
effect that it is or may be liable to any person or entity as a result of or in
connection with any Hazardous Substance used, stored, generated or disposed of
at the Woodlands Facility; or (ii) any letter or request for information under
Section 104 of the Comprehensive Environmental Response, Compensation, and
Liability Act (41 U.S.C. Section 9604) or comparable state laws regarding the
use, storage, generation or disposal of Hazardous Substances at the Woodlands
Facility. To the Knowledge of Pactiv and PBS, none of the operations conducted
at the Woodlands Facility is the subject of any federal or state investigation
relating to or in connection with any Hazardous Materials at the Woodlands
Facility or at any other location.
(d) To the Knowledge of Pactiv and PBS, none of the operations
conducted at the Woodlands Facility is subject to any judicial or administrative
proceeding alleging the violation of or liability under any Environmental Laws.
(e) Neither Pactiv nor PBS nor, to the Knowledge of Pactiv and PBS, any
predecessor-in-interest of Pactiv or PBS with respect to the Woodlands Facility
has filed any notice under any Environmental Law indicating past or present
treatment or release of Hazardous Substances at the Woodlands Facility, and none
of the operations at the Facility involves the generation, transportation,
treatment, storage or disposal of hazardous waste, as defined under 40 C.F.R.
Parts 260-270 or any state equivalent, other than in compliance in all material
respects with all applicable Environmental Laws.
(f) No Hazardous Substances used in the operations of Pactiv or PBS at
the Woodlands Facility and, to their Knowledge, no other Hazardous Substances,
exist on, under or about the Woodlands Facility in a manner that has a
reasonable possibility of giving rise to a claim under Environmental Laws, and
neither Pactiv nor PBS or any of their respective Affiliates has filed any
notice or report of a release of any Hazardous Substance from the Woodlands
Facility.
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(g) Neither Pactiv nor PBS or their respective Affiliates, and, to the
Knowledge of Pactiv and PBS, none of their respective predecessors-in-interest
with respect to the Woodlands Facility, has disposed of any Hazardous Substances
generated on the Real Property in a manner that has a reasonable possibility of
giving rise to a claim under Environmental Laws.
(h) To the Knowledge of Pactiv and PBS, no underground storage tanks or
surface impoundments are at the Facility. Pactiv and PBS have disclosed to Exult
the existence of one aboveground storage tank at the Woodlands Facility, which
has all required permits.
(i) To the Knowledge of Pactiv and PBS, no lien claim or encumbrance in
favor of any person or entity relating to or in connection with any claims under
Environmental Laws has been filed or has been attached to the Woodlands
Facility.
(j) Neither Pactiv nor PBS or any of their respective Affiliates is
subject to any outstanding written order or agreement with any governmental
authority or private party relating to any Environmental Laws, or any claims
under Environmental Laws, which in any way relate to the Woodlands Facility.
III.14 COMPLIANCE WITH LAWS. To the Knowledge of Pactiv and PBS,
neither Pactiv, PBS nor the Woodlands Facility is in violation of any provision
of any law, decree, order or regulation (including the Americans with
Disabilities Act and those relating to employment practices, health and safety);
it being understood that nothing in this representation is intended to address
any compliance issue that is the subject of any other representation or warranty
set forth herein regarding compliance with specific laws. PBS has all Federal,
state and local licenses, permits and other governmental authorizations required
in the conduct of the PBS Services at the Woodlands Facility.
III.15 FINDERS' FEES. There is no investment banker, broker, finder or
other intermediary which has been retained by or is authorized to act on behalf
of Pactiv or PBS who might be entitled to any fee or commission from Exult in
connection with the transactions contemplated by this Agreement.
III.16 YEAR 2000 COMPLIANCE. Pactiv and PBS have taken the following
steps to addresses the "Year 2000" issue where existing systems and equipment
are expected to remain in place beyond 1999: (i) Pactiv and PBS have developed a
detailed process in place to identify and assess Year 2000 issues and to
remediate, replace or establish alternative procedures addressing non-Year 2000
compliant systems, hardware, and equipment; (ii) Pactiv and PBS have
substantially completed inventorying its systems and equipment, including
computer systems and business applications, as well as date-sensitive technology
embedded in its equipment and facilities; (iii) Pactiv and PBS continue to plan
for and undertake remediation, replacement, or establishment of alternative
procedures for non-compliant Year 2000 systems and equipment; and (iv) Pactiv
and PBS continue to test remediated, replaced or alternative procedures for
systems and equipment. Pactiv and PBS believe that approximately 99% of its
major business applications systems had achieved Year 2000 compliance as of the
date hereof. Remediation, replacement, or establishment of alternative
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procedures for systems and equipment have been and are being undertaken on a
business priority basis.
III.17 NO OTHER REPRESENTATIONS OR WARRANTIES. Except for the
representations and warranties contained in this Article III, neither Pactiv,
PBS, nor any other Person makes any other express or implied representation or
warranty on behalf of Pactiv or PBS.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF EXULT
Exult makes the following representations and warranties, each of which
(i) is true as of the date of this Agreement, and (ii) will be true at the
Effective Time:
IV.1 ORGANIZATION AND QUALIFICATION. Exult is a corporation duly
organized, validly existing and in good standing under the laws of the State of
Delaware and has all requisite corporate power and authority to own and operate
and to carry on its business as currently conducted.
IV.2 CORPORATE AUTHORIZATION. Exult has full corporate power and
authority to execute and deliver this Agreement and each of the Ancillary
Agreements, and to perform its obligations hereunder and thereunder. The
execution, delivery and performance by Exult of this Agreement and each of the
Ancillary Agreements have been duly and validly authorized and no additional
corporate authorization or consent is required in connection with the execution,
delivery and performance by Exult of this Agreement and each of the Ancillary
Agreements.
IV.3 CONSENTS AND APPROVALS. No Consent is required to be obtained by
Exult from, and no notice or filing is required to be given by Exult to, or made
by Exult with, any governmental authority or other Person in connection with the
execution, delivery and performance by Exult of this Agreement and each of the
Ancillary Agreements, other than in all cases where the failure to obtain such
Consent, or to give or make such notice or filing, would not materially impair
or delay the ability of Exult to perform its obligations hereunder.
IV.4 NON-CONTRAVENTION. The execution, delivery and performance by
Exult of this Agreement and each of the Ancillary Agreements, and the
consummation of the transactions contemplated hereby and thereby, does not and
will not (i) violate any provision of the Certificate of Incorporation or
By-laws of Exult or (ii) violate or result in a breach of or constitute a
default under any law, rule, regulation, judgment, injunction, order, decree or
other restriction of any court or governmental authority to which Exult is
subject, other than any conflict, breach, termination, default, cancellation,
acceleration, loss, violation or Encumbrance which, individually or in the
aggregate, would not materially impair or delay the ability of Exult to perform
its obligations hereunder.
IV.5 BINDING EFFECT. This Agreement constitutes, and each of the
Ancillary Agreements when executed and delivered by the parties thereto will
constitute, a valid and legally binding obligation of Exult enforceable in
accordance with their respective terms,
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subject to bankruptcy, insolvency, reorganization, moratorium and similar laws
of general applicability relating to or affecting creditors' rights and to
general equity principles.
IV.6 FINDERS' FEES. There is no investment banker, broker, finder or
other intermediary which has been retained by or is authorized to act on behalf
of Exult who might be entitled to any fee or commission from Pactiv or PBS in
connection with the transactions contemplated by this Agreement.
IV.7 FINANCIAL CAPABILITY. Exult has, and on the Effective Time will
have, sufficient funds available, from cash on hand or from committed lines of
credit, to pay the purchase price and otherwise to effect the consummation of
the transactions contemplated by this Agreement.
IV.8 EXULT'S BUSINESS. Exult is engaged in the business of providing
services of the nature to be provided under the Service Agreements, and is not
engaged in the design, development, manufacture, sale or distribution of
automotive parts, modules, or systems for automotive original equipment
manufacturers, or for the automotive resale and replacement market.
IV.9 NO OTHER REPRESENTATIONS OR WARRANTIES. Except for the
representations and warranties contained in this Article IV, neither Exult nor
any other Person makes any other express or implied representation or warranty
on behalf of Exult.
ARTICLE V
COVENANTS
V.1 ACCESS. Pactiv and PBS shall permit Exult and its representatives
to have access, during regular business hours and upon reasonable advance
notice, to the Woodlands Facility, the Purchased Assets and Pactiv's and PBS's
personnel, subject to reasonable rules and regulations of Pactiv, and shall
furnish, or cause to be furnished, to Exult, any financial and operating data
and other information that is available with respect to the services to be
provided by Exult under the Services Agreement, the Purchased Assets and the
Woodlands Facility as Exult shall from time to time reasonably request. Exult
shall keep any and information furnished to it or its representatives pursuant
to this Section 5.1 confidential until the Effective Time, subject to the
provisions of the Service Agreements.
V.2 CONDUCT OF BUSINESS. During the period from the date hereof to the
Effective Time, except as otherwise contemplated by this Agreement or as Exult
shall otherwise agree in writing in advance, PBS shall conduct the PBS Services
in the ordinary and usual course, and use its reasonable efforts to preserve
intact its business organization and its relationships with third parties.
Notwithstanding the foregoing, except as set forth in Section 5.4 nothing shall
require Pactiv or PBS to pay any retention or stay bonuses to any Employees.
Neither Pactiv nor PBS shall, without Exult's prior written consent (which shall
not be unreasonably withheld), (i) sell, lease or otherwise dispose of any of
the Purchased Assets, (ii) modify, amend, terminate or waive any rights under
any of the Transferred Contracts, (iii) increase the compensation or benefits
payable or otherwise available to any of the Transferred Employees, other than
increases effective as of January 1, 2000, as previously disclosed to
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Exult, (iv) terminate or allow to lapse any of the Transferred Licenses, or (v)
agree to do any of the foregoing.
V.3 REASONABLE EFFORTS. The parties will cooperate and use their
respective reasonable efforts to fulfill the conditions precedent to their and
the other party's obligations hereunder, including securing as promptly as
practicable all Consents, required in connection with the transactions
contemplated hereby, provided that neither party shall be required to pay any
consideration or otherwise incur any liability or obligation in connection with
obtaining such Consents except as specifically set forth herein.
5.4 COVENANTS REGARDING EMPLOYEES.
(a) Schedule 5.4 sets forth a list of certain Employees, which Pactiv
and PBS represent and warrant correctly lists the respective position, job
location and salary rate of each Employee listed thereon. Subject to the
provisions of this Section 5.4, as of the Effective Time Exult shall employ on
an at-will basis all Employees listed on such Schedule, on the terms and subject
to the conditions specified by Exult in its employment letters to such Employees
in substantially the form disclosed to Pactiv (the Employees who are actually
employed by Exult are referred to collectively as the "Transferred Employees").
(b) The transfer to Exult of an Employee listed on Schedule 5.4 shall
be conditioned upon the closing of the transactions contemplated by this
Agreement and the Service Agreements, and upon such reasonable conditions as
Exult may include in its employment letter to such Employee. Only upon the
satisfaction of all such conditions shall an Employee become a Transferred
Employee, and until such time (i) the Employee shall not be eligible for
compensation from, or to participate in any benefit plans of, Exult, and (ii)
Exult shall have no liability with respect to any Employee.
(c) Any Employee listed on Schedule 5.4 who is (A) on an unpaid leave
of absence at the Effective Time pursuant to the Family and Medical Leave Act of
1993, as amended, or (B) an Inactive Employee shall be treated as a Transferred
Employee for purposes of this Agreement as of 12:01 a.m. of the day immediately
following the last day of such leave or the condition which caused such Employee
to be an Inactive Employee ceases (the "Leave Expiration Date"); provided, that
(i) as of the Leave Expiration Date, such Employee has met all other conditions
precedent to employment by Exult, (ii) such employee has been medically released
to return to work, if applicable, (iii) the Leave Expiration Date is no longer
than 12 weeks after such leave commenced, and is reasonably capable of
performing his or her former position with or without reasonable accommodation,
(iv) such Employee returns to his or her job on the first work day after the
Leave Expiration Date, and (v) such Employee is identified to Exult by Pactiv or
PBS promptly after the Effective Time.
(d) Each employment letter to an Employee pursuant to this Section
shall provide that the Employee shall initially be paid at the same base
compensation rate, and initially shall have the same position and place of
employment, as is listed on Schedule 5.4. The total compensation package
provided to the Transferred Employees shall, in the aggregate, be approximately
comparable to the total compensation package applicable to such Transferred
Employees on the date hereof (excluding any retention bonuses for which any of
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the Transferred Employees may be eligible), as disclosed by Schedule 5.4 and
Schedule 3.8. The benefits initially available to the Transferred Employees
shall include those listed on Schedule 5.4 (d) except as disclosed. Exult shall
not be required to offer any benefits not available to other employees of Exult.
(e) For purposes of eligibility, vesting and benefit accrual under
Exult's vacation policy, severance policy and 401(k) plan, Exult shall grant all
Transferred Employees credit for their years of service with Pactiv or Pactiv's
Affiliates prior to the Effective Time, to the same extent such service had been
taken into account under the Pactiv Plans. Exult shall offer coverage for
medical benefits effective as of the Effective Time to all Transferred Employees
in accordance with the terms of Exult's medical plan, provided, however, that
(i) any pre-existing condition limitation shall not apply to such Transferred
Employee's participation in such plan and (ii) such medical plan shall grant
credit against the deductible amount under such plan for eligible medical
expenses previously paid by a Transferred Employee during the same plan year.
Except as otherwise set forth herein, Transferred Employees shall be subject to
the terms and conditions of Exult's plans, policies and programs.
(f) Pactiv shall retain sponsorship of the Pactiv Plans and Exult shall
not be entitled to any assets of the Pactiv Plans. If Exult maintains or
establishes a defined contribution plan, such plan shall, subject to applicable
law and receipt of written assurances reasonably acceptable to Exult as to the
tax-qualified status of the Pactiv qualified plan(s) from which the relevant
distributions would be made (the "Transferor Plans") and as to the eligibility
of such distributions for rollover, accept eligible rollovers by Transferred
Employees of such distributions; provided, however, that the distributions from
the Transferor Plans are permitted under Section 401(k)(2)(B) of the Code, and
that the Transferor Plans permit distributions upon the occurrence of an event
described under Section 401(k)(10) of the Code.
(g) Pactiv and PBS shall be responsible for all paid time off benefits,
including vacation pay, sick pay and any other payments for time off of normal
work hours ("Paid Time Off") accrued by Transferred Employees up to the
Effective Time. Pactiv or PBS will pay out all accrued but unused Paid Time Off
to Transferred Employees promptly after the Effective Time. During the six
months following the Effective Time, Exult shall, to the extent a Transferred
Employee has not accrued vacation time with Exult, allow such Transferred
Employee vacation time off without pay up to a maximum of two weeks, scheduled
according to Exult' s normal procedures.
(h) Pactiv and PBS shall be responsible for payment of all retention
bonuses for all Transferred Employees to whom Pactiv or PBS has agreed to pay
such retention bonuses, subject to the terms thereof. At Exult's option, Exult
may elect to pay such retention bonuses, after first obtaining written
confirmation from Pactiv of the amount of the retention bonuses and that the
retention bonuses are payable. If Exult makes such payment upon receipt of such
confirmation, Pactiv and PBS shall promptly reimburse Exult for the amounts so
paid.
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V.5 COMPLIANCE WITH WARN AND SIMILAR LAWS. The parties do not
anticipate that there will be any major employment losses as a consequence of
the transactions contemplated by this Agreement that might trigger obligations
under the Worker Adjustment and Retraining Notification ("WARN") Act, 29 U.S.C.
Section 2101 et seq., or under any similar provision of any federal, state,
regional, foreign, or local law, rule, or regulation (referred to collectively
as "WARN Obligations"). Nevertheless, to the extent that any WARN Obligations
might arise with respect to the Transferred Employees solely as a consequence of
the transfer of the Transferred Employees to Exult, it is agreed that Exult will
timely give all notices to such Transferred Employees required to be given under
WARN or other similar statutes or regulations of Texas relating to any plant
closing or mass layoff or as otherwise required by any such statute. For this
purpose, Exult shall be deemed to have caused a mass layoff if the mass layoff
would not have occurred but for Exult's failure to employ the Transferred
Employees in accordance with the terms of this Agreement, but Exult shall have
no WARN Obligations with respect to any person not a Transferred Employee
V.6 FURTHER ASSURANCES. At any time after the Effective Time, the
parties shall promptly execute, acknowledge and deliver any other assurances or
documents reasonably requested by another party, and necessary for them or it to
satisfy their or its respective obligations hereunder or obtain the benefits
contemplated hereby. Similarly, if after the Effective Time Pactiv or PBS
identifies any assets that should have been transferred to Exult as part of the
Purchased Assets, but were not, Pactiv or PBS, as the case may be, shall
transfer such assets to Exult without further consideration, provided that
Pactiv and PBS will, to the extent such failure to include an asset constituted
a breach of its representations and warranties under this Agreement, be liable
to Exult for any Losses that might arise from such breach, subject to the
conditions and limitations set forth herein.
V.7 CERTAIN MATTERS RELATED TO RETAINED AND ASSUMED LIABILITIES.
(a) With respect to all Retained Liabilities, Exult Indemnified Parties
shall cooperate with Pactiv and PBS, provide Pactiv and PBS as promptly as
possible with notices and other information received by such parties as well as
all relevant materials, information and data requested by Pactiv and PBS and
shall grant Pactiv and PBS, without charge, reasonable access to Exult's
employees.
(b) With respect to all Assumed Liabilities, Pactiv Indemnified Parties
shall cooperate with Exult, provide Exult as promptly as possible with notices
and other information received by such parties as well as all relevant
materials, information and data requested by Exult and shall grant Exult,
without charge, reasonable access to Pactiv's or PBS's employees.
V.8 RECORDS AND RETENTION AND ACCESS. Exult shall keep and preserve in
an organized and retrievable manner the Books and Records for at least five
years from the Effective Time. Exult shall neither dispose of nor destroy such
Books and Records without first offering to turn over possession thereof to by
written notice to Pactiv and PBS at least thirty (30) days prior to the proposed
date of such disposition or destruction. While such Books and Records remain in
existence, Exult shall allow Pactiv and PBS, its representatives, attorneys and
accountants, at the requesting party's expense, access to the Books and Records
upon reasonable request and during normal business hours for the purpose of
interviewing, examining and copying.
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5.9 CERTAIN RETAINED ASSETS. Exult shall have the right to continue to
use the Retained Assets listed on Schedule 5.9 hereof, until March 31, 2000,
provided that (a) with respect to the equipment that is leased by Pactiv or PBS
pursuant to items 1 and 2 on Schedule 5.9, Exult shall pay Pactiv an amount
equal to the pro rata lease costs of Pactiv with respect to such equipment, as
reasonably determined by Pactiv, and (b) with respect to the independent
contractors covered by the contract listed as item 3 on Schedule 5.9, Pactiv and
Exult will agree on which persons shall, after the Effective Time, provide
services to Exult, in which event Exult shall reimburse Pactiv for all costs
associated with such persons accruing from and after the Effective Time, and
shall indemnify Pactiv and PBS from and against any Losses accruing from and
after the Effective Time with respect to such persons.
ARTICLE VI
CONDITIONS
VI.1 CONDITIONS TO THE OBLIGATIONS OF EXULT. The obligation of Exult to
consummate the transactions contemplated by this Agreement is subject to the
satisfaction (or waiver in writing by Exult) prior to the Effective Time, of the
following conditions:
(a) REPRESENTATIONS AND WARRANTIES. The representations and warranties
of Pactiv and PBS contained herein shall have been true and correct in all
material respects when made and shall be true and correct in all material
respects as of the Effective Time, as if made as of the Effective Time, and
Exult shall have received a certificate to such effect dated the Effective Time
and executed by a duly authorized officer of Pactiv and PBS.
(b) COVENANTS. The covenants and agreements of Pactiv and PBS to be
performed on or prior to the Effective Time shall have been duly performed in
all material respects, and Exult shall have received a certificate to such
effect dated the Effective Time and executed by a duly authorized officer of
Pactiv and PBS.
(c) NO LEGAL BAR. (i) There shall not have been instituted or
threatened by any person, entity or authority (excluding Pactiv and its
Affiliates) any legal proceeding seeking to prohibit the consummation of the
transactions contemplated by this Agreement or to obtain damages with respect
thereto, (ii) none of the parties hereto shall be prohibited by any order, writ,
injunction or decree of any governmental body of competent jurisdiction from
consummating the transactions contemplated by this Agreement, and (iii) no
action or proceeding (excluding proceedings instituted by or at the request of
Pactiv or its Affiliates) shall then be pending which questions the validity of
this Agreement, any of the transactions contemplated hereby, or any action which
has been taken by any of the parties in connection herewith.
(d) NO MATERIAL ADVERSE CHANGE. Neither the Purchased Assets nor the
Woodlands Facility shall have experienced any material adverse damage or
destruction since the date hereof. If after the date hereof and prior to the
Effective Time there occurs any material damage to or destruction of the
Purchased Assets or the Woodlands Facility, Pactiv
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and PBS shall promptly notify Exult of such fact, furnish all relevant
information to Exult, and defer the Effective Time by such time as Exult may
reasonably request to allow it to inspect such damage or destruction and
determine the consequences thereof. If the cost to repair such damage or
destruction, as reasonably determined by the parties, is less than $250,000, and
the parties agree that the repair can be completed within a time that meets
Exult's business needs, Pactiv shall be required to make such repairs, and, at
Exult's request, the Effective Time may be delayed until such repairs are
substantially completed. If the parties are unable, within 60 days of the date
of such casualty event (during which period the Effective Time shall be
deferred), to agree upon the cost of such repairs or that the repairs can be
completed within a time that meets Exult's business needs, either party shall
have the right to terminate this Agreement. If the cost to repair such damage or
destruction, as reasonably determined by the parties, is $250,000 or more,
Pactiv shall not be required to make such repairs, but rather the parties shall
negotiate in good faith with respect to such damage and destruction and, if no
agreement can be reached with respect to such damage or destruction within 60
days of the date of such casualty event (during which period the Effective Time
shall be deferred), either party shall have the right to terminate this
Agreement.
VI.2 CONDITIONS TO THE OBLIGATIONS OF PACTIV AND PBS. The obligation of
Pactiv and PBS to consummate the transactions contemplated by this Agreement is
subject to the satisfaction (or waiver by in writing Pactiv and PBS) prior to
the Effective Time of the following conditions:
(a) REPRESENTATIONS AND WARRANTIES. The representations and warranties
of Exult contained herein shall have been true and correct in all material
respects when made and shall be true and correct in all material respects as of
the Effective Time, as if made as of the Effective Time, and Pactiv shall have
received a certificate to such effect dated the Effective Time and executed by a
duly authorized officer of Exult.
(b) COVENANTS. The covenants and agreements of Exult to be performed on
or prior to the Effective Time shall have been duly performed in all material
respects, and Pactiv shall have received a certificate to such effect dated the
Effective Time and executed by a duly authorized officer of Exult.
(c) NO LEGAL BAR. (i) There shall not have been instituted or
threatened by any person, entity or authority (excluding Exult and its
Affiliates) any legal proceeding seeking to prohibit the consummation of the
transactions contemplated by this Agreement or to obtain damages with respect
thereto, (ii) none of the parties hereto shall be prohibited by any order, writ,
injunction or decree of any governmental body of competent jurisdiction from
consummating the transactions contemplated by this Agreement, and (iii) no
action or proceeding (excluding proceedings instituted by or at the request of
Exult or its Affiliates) shall then be pending which questions the validity of
this Agreement, any of the transactions contemplated hereby, or any action which
has been taken by any of the parties in connection herewith.
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ARTICLE VII
SURVIVAL; INDEMNIFICATION
VII.1 SURVIVAL. The representations and warranties contained in this
Agreement shall survive the Effective Time for a period of 12 months after the
Effective Time, except that (i) the representations and warranties in Section
3.11(b) shall survive only until 11:59 p.m. (Houston Time) on January 30, 2000,
(ii) the representations and warranties in Section 3.13 and Section 3.16 shall
terminate at the Effective Time. Any claim for indemnification for breach of
this Agreement must be made during such survival period, if any, provided,
however, that any claim for indemnification with respect to any Retained
Liability or Assumed Liability (regardless of whether the Retained Liability or
Assumed Liability also constitutes a breach of a representation or warranty
under this Agreement) shall not be subject to any time limitation.
VII.2 INDEMNIFICATION BY EXULT. Exult shall indemnify, defend and hold
harmless Pactiv, PBS, their Affiliates and, if applicable, their respective
directors, officers, shareholders, partners, attorneys, accountants, agents and
employees and their heirs, successors and assigns (the "Pactiv Indemnified
Parties") from, against and in respect of any damages, claims, losses, charges,
actions, suits, proceedings, deficiencies, Taxes, interest, penalties, and
reasonable costs and expenses (including reasonable attorneys' fees)
(collectively, the "Losses") imposed on, sustained, incurred or suffered by or
asserted against any of the Pactiv Indemnified Parties, directly or indirectly,
relating to or arising out of (a) subject to Section 7.4 hereof, any breach of
any representation, warranty, covenant or agreement made by Exult contained in
this Agreement, the Assignment and Assumption Agreement, or the Lease
Assignment, and (b) the Assumed Liabilities. Pactiv and PBS acknowledge that
this Article VII constitutes Pactiv's and PBS's sole remedy with respect to any
of the matters referred to herein, provided that Pactiv or PBS shall be
permitted to seek equitable or declaratory relief, where appropriate, and
provided further that the parties' rights and obligations with respect to claims
related to the provision of services under the Service Agreements shall be
determined by such agreements.
VII.3 INDEMNIFICATION BY PACTIV AND PBS. Pactiv and PBS shall jointly
and severally indemnify, defend and hold harmless Exult, its Affiliates and, if
applicable, their respective directors, officers, shareholders, partners,
attorneys, accountants, agents and employees (other than the Transferred
Employees for acts they were responsible for while they were Employees of Pactiv
or its Affiliates) and their heirs, successors and assigns (the "Exult
Indemnified Parties" and, collectively with the Pactiv Indemnified Parties, the
"Indemnified Parties") from, against and in respect of any Losses imposed on,
sustained, incurred or suffered by or asserted against any of the Exult
Indemnified Parties, directly or indirectly, relating to or arising out of (a)
subject to Section 7.4 hereof, any breach of any representation, warranty,
covenant or agreement made by Pactiv or PBS contained in this Agreement, the
Bill of Sale, the Assignment and Assumption Agreement, the License Assignment,
or the Lease Assignment, (b) the Retained Liabilities, or (c) any failure by
Pactiv or PBS to obtain any Consent. Exult acknowledges that this Article VII
constitutes Exult's sole remedy with respect to any of the matters referred to
herein, provided that Exult shall be permitted to seek equitable or declaratory
relief, where appropriate, and provided further that the parties' rights and
obligations with respect to claims related to the provision of services under
the Service Agreements shall be determined by such agreements.
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VII.4 LIMITATIONS. Neither party shall have any liability for any
Losses with respect to the matters contained in Section 7.2(a) or Section 7.3(a)
except to the extent (and then only to the extent) all Losses therefrom exceed
an aggregate amount equal to $100,000, and then only for all such Losses in
excess thereof up to an aggregate amount equal to $3,300,000. The foregoing
deductible and cap shall not be applicable to Losses arising under Section
7.2(b) or Section 7.3(b) or (c), even if such Losses would also give rise to a
claim under Section 7.2(a) or Section 7.3(a).
VII.5 INDEMNIFICATION PROCEDURES. With respect to third-party claims,
all claims for indemnification by any Indemnified Party hereunder shall be
asserted and resolved as set forth in this Section 7.5. In the event that any
written claim or demand for which Exult or Pactiv or PBS, as the case may be (an
"Indemnifying Party"), would be liable to any Indemnified Party hereunder is
asserted against or sought to be collected from any Indemnified Party by a third
party, such Indemnified Party shall promptly, but in no event more than 20 days
following such Indemnified Party's receipt of such claim or demand, notify the
Indemnifying Party of such claim or demand and the amount or the estimated
amount thereof to the extent then feasible (which estimate shall not be
conclusive of the final amount of such claim or demand) (the "Claim Notice");
provided, however, that failure to give such notice shall not relieve the
Indemnifying Party of any liability hereunder, except to the extent that such
party is actually prejudiced thereby. The Indemnifying Party shall have 45 days
from the personal delivery or mailing of the Claim Notice (or, if earlier, until
the fifth day preceding the deadline for any responsive pleading to the claim or
demand) (the "Notice Period") to notify the Indemnified Party (a) whether or not
the Indemnifying Party disputes the liability of the Indemnifying Party to the
Indemnified Party hereunder with respect to such claim or demand and (b) whether
or not the Indemnifying Party desires to defend the Indemnified Party against
such claim or demand. If the Indemnifying Party disputes the liability of the
Indemnifying Party to the Indemnified Party hereunder with respect to such claim
or demand, but it nevertheless desires to defend the Indemnified Party against
such claim or demand, it may do so, specifically reserving its rights as against
the Indemnified Party with respect to such claim or demand, provided that the
Indemnifying Party may not settle such matter without the prior written consent
of the Indemnified Party, such consent to not be unreasonably withheld. Except
as hereinafter provided, in the event that the Indemnifying Party notifies the
Indemnified Party within the Notice Period that it desires to defend the
Indemnified Party against such claim or demand, the Indemnifying Party shall
have the right to defend the Indemnified Party by appropriate proceedings using
counsel reasonably satisfactory to the Indemnified Party and shall have the sole
power to direct and control such defense in a manner reasonably acceptable to
the Indemnified Party. If any Indemnified Party desires to participate in any
such defense, it may do so at its sole cost and expense. The Indemnified Party
shall not settle a claim or demand without the consent of the Indemnifying
Party, such consent to not be unreasonably withheld. All costs and expenses
incurred by the Indemnifying Party in defending such claim or demand shall be a
liability of, and shall be paid by, the Indemnifying Party without regard to the
limitation in Section 7.4. The Indemnifying Party shall not, without the prior
written consent of the Indemnified Party (which consent shall not be
unreasonably withheld, settle, compromise or offer to settle or compromise any
such claim or demand unless such settlement or compromise provides solely for
the payment of
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money damages by the Indemnifying Party. If the Indemnified Party elects to
defend against such claim or demand, then the amount of any such claim or demand
or that portion thereof as to which such defense is unsuccessful (and the
reasonable costs and expenses pertaining to such defense), shall be the
liability of the Indemnifying Party hereunder, subject to the limitations set
forth in Section 7.4, if applicable. To the extent the Indemnifying Party shall
direct, control or participate in the defense or settlement of any third-party
claim or demand, the Indemnified Party will cooperate with, and give the
Indemnifying Party and its counsel reasonable access to, during normal business
hours, the relevant business records and other documents, and shall permit them
to consult with the employees and counsel of the Indemnified Party. To the
extent the Indemnified Party shall direct, control or participate in the defense
or settlement of any third-party claim or demand, the Indemnifying Party will
cooperate with, and give the Indemnified Party and its counsel reasonable access
to, during normal business hours, the relevant business records and other
documents, and shall permit them to consult with the employees and counsel of
the Indemnifying Party.
VII.6 COMPUTATION OF LOSSES SUBJECT TO INDEMNIFICATION. the amount of
any Loss for which indemnification is provided under this Article VII shall be
computed net of any insurance proceeds or Tax benefits received by the
Indemnified Party in connection with such Loss. No Indemnified Party shall be
entitled to assert directly against an Indemnifying Party any claim for
consequential, punitive, exemplary or similar damages. The foregoing sentence
shall not limit an Indemnified Party's rights hereunder to be indemnified
against any Losses (including punitive or exemplary) arising out of a
third-party claim against it.
7.7 CHARACTERIZATION OF INDEMNIFICATION PAYMENTS. All amounts paid by
Exult or Pactiv, as the case may be, under this Article VII shall be treated as
adjustments to the purchase price for all Tax purposes.
7.8 YEAR 2000 COMPLIANCE. Notwithstanding any other provision of this
Agreement, if any of Purchased Assets that are used or intended to be used by
Exult in connection with the input, output, storage or retrieval of date-related
data are not Year 2000 Complaint, PBS will, at its expense, take all necessary
actions to remediate such non-compliance, in a commercially reasonable manner.
For purposes hereof "Year 2000 Complaint" means such assets will accept input,
produce output, store, retrieve and make computations based on dates and
date-related data such that (a) 19th, 20th and 21st century dates and
date-related data are processed, displayed and transmitted to all recipients of
such data correctly, regardless of the year and century in which the processing
occurs, (b) no processing anomalies occur when the calendar or processing year
changes, and (c) all algorithms, processes, methodologies, data formats and
other aspects of such Purchased Assets comply with all applicable governmental
guidelines, rules and regulations applicable to the processing of data-related
data. Any claim under this Section 7.8 must be made within 12 months from the
Effective Time, and PBS's obligation hereunder is subject to the cap, but not
the deductible, of Section 7.4.
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ARTICLE VIII
TERMINATION
VIII.1 TERMINATION. This Agreement may be terminated at any time prior
to the Effective Time:
(a) by agreement of the Parties; or
(b) by either party, in accordance with Section 6.1(d), if the
Purchased Assets or the Woodlands Facility shall have experienced any material
damage or destruction since the date hereof in excess of $250,000, and the
parties are unable to reach agreement with respect thereto; or
(c) subject to Section 6.1(d), by a party who is not then in breach of
its obligation under this Agreement if a condition precedent to its obligations
under this Agreement has not been satisfied or waived by the Effective Date.
VIII.2 EFFECT OF TERMINATION. In the event of the termination of this
Agreement in accordance with Section 8.1, this Agreement shall thereafter become
void and have no effect, and no party hereto shall have any liability to the
other party hereto or their respective Affiliates, directors, officers or
employees, except that (a) provisions contained in this Section 8.2 and in
Sections 9.1, 9.7, 9.8, 9.9 and 9.11 shall continue to be applicable
notwithstanding such termination, and (b) nothing herein will relieve any party
from liability for any breach of this Agreement prior to such termination. In
the event of a termination, the funds held in escrow, plus any interest thereon,
shall be released to Exult in accordance with the escrow agreement pursuant to
which such funds are held.
ARTICLE IX
MISCELLANEOUS
IX.1 NOTICES. All notices or other communications hereunder shall be
deemed to have been duly given and made if in writing and if served by personal
delivery upon the party for whom it is intended, if delivered by registered or
certified mail, return receipt requested, or by a national courier service, or
if sent by facsimile transmission (provided that the facsimile transmission is
followed (no later than the next business day) by notice delivered in one of the
other permitted manners) to the person at the address set forth below, or such
other address as may be designated in writing hereafter, in the same manner, by
such person:
To Exult: EXULT, INC.
Four Park Plaza
Suite 350
Irvine, California 92614
Telephone: (949) 250-8002
Fax: (949) 250-8086
Attn: Chief Financial Officer
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To Pactiv or PBS: PACTIV CORPORATION
1900 West Field Court
Lake Forest, Illinois 60044
Telephone: (847) 482-2430
Fax: (847) 482-4589
Attn: General Counsel
IX.2 AMENDMENT; WAIVER. Any provision of this Agreement may be amended
or waived if, and only if, such amendment or waiver is in writing and signed, in
the case of an amendment, by Exult and Pactiv, or in the case of a waiver, by
the party against whom the waiver is to be effective. No failure or delay by any
party in exercising any right, power or privilege hereunder shall operate as a
waiver thereof nor shall any single or partial exercise thereof preclude any
other or further exercise thereof or the exercise of any other right, power or
privilege.
IX.3 ASSIGNMENT. No party to this Agreement may assign any of its
rights or obligations under this Agreement without the prior written consent of
the other party hereto, provided, however, that Exult may assign its rights to
an Affiliate or to a lender as security for any financing arrangements, provided
that Exult shall remain liable for all of its obligations hereunder, including
its obligation to pay and perform the Assumed Liabilities.
IX.4 ENTIRE AGREEMENT. This Agreement (including the Preliminary
Statements, and all Schedules hereto) contains the entire agreement between the
parties hereto with respect to the subject matter hereof and supersedes all
prior agreements and understandings, oral or written, with respect to such
matters, except for any Confidentiality Agreement between the parties, which
will remain in full force and effect until the Effective Time, and shall then
expire.
IX.5 FULFILLMENT OF OBLIGATIONS. Any obligation of any party to any
other party under this Agreement or any of the Ancillary Agreements, which
obligation is performed, satisfied or fulfilled by an Affiliate of such party,
shall be deemed to have been performed, satisfied or fulfilled by such party.
IX.6 PARTIES IN INTEREST. This Agreement shall inure to the benefit of
and be binding upon the parties hereto and their respective successors and
permitted assigns. Nothing in this Agreement, express or implied, is intended to
confer upon any Person other than Exult, Pactiv, TA and the Indemnified Parties
(to the extent mentioned herein), or their respective successors or permitted
assigns, any rights or remedies under or by reason of this Agreement.
IX.7 PUBLIC DISCLOSURE. Notwithstanding anything herein to the
contrary, except as may be required to comply with the requirements of any
applicable Laws and the rules and regulations of each stock exchange upon which
the securities of one of the parties (or its Affiliate) is listed, no press
release or similar public announcement or communication shall ever, whether
prior to or subsequent to the Effective Time, be made or caused to be made
concerning the execution or performance of this Agreement unless specifically
approved in advance by the parties hereto. It is the parties expectation to
issue a jointly approved press
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release shortly following the Effective Time. Neither party may disclose the
existence of the Service Agreements in advertising or marketing materials,
including websites, without the prior written approval of the other party, such
approval not to be unreasonably withheld.
IX.8 RETURN OF INFORMATION. If for any reason whatsoever the
transactions contemplated by this Agreement are not consummated (a) Exult shall
(i) return immediately to Pactiv all documents, information, data, and all of
the originals or copies of the Purchased Assets (including the Books and
Records), (ii) destroy all other copies in its possession or in the possession
of its Affiliates, directors, officers, employees, agents and attorneys, and
(iii) hold, and cause each of said parties to hold, all of such materials and
the information contained therein or given to Exult by Pactiv and PBS, its
Affiliates, directors, officers, employees, agents and attorneys, in confidence,
and (b) Pactiv and PBS shall (i) return immediately to Exult all documents,
information, data provided by it by Exult, (ii) destroy all other copies in its
possession or in the possession of its Affiliates, directors, officers,
employees, agents and attorneys, and shall hold, and (iii) cause each of said
parties to hold, all of such materials and the information contained therein or
given to Pactiv or PBS by Exult, its Affiliates, directors, officers, employees,
agents and attorneys, in confidence.
IX.9 EXPENSES. Except as otherwise expressly provided in this
Agreement, whether or not the transactions contemplated by this Agreement are
consummated, all costs and expenses incurred in connection with this Agreement
and the transactions contemplated hereby shall be borne by the party incurring
such expenses.
IX.10 BULK TRANSFER LAWS. Exult acknowledges that Pactiv and PBS have
not taken, and does not intend to take, any action required to comply with any
applicable bulk sale or bulk transfer laws or similar laws and Exult waives the
right to any claim, suit or action with respect to, or Losses arising from, such
non-compliance. Pactiv and PBS will indemnify Exult against Losses in respect of
violations of any such laws.
IX.11 GOVERNING LAW; SUBMISSION TO JURISDICTION; SELECTION OF FORUM.
This Agreement shall be governed by, and construed in accordance with, the laws
of the State of Illinois. Each party hereto agrees that it shall bring any
action or proceeding in respect of any claim arising out of or related to this
agreement or the transactions contained in or contemplated by this agreement,
whether in tort or contract or at law or in equity, exclusively in the United
States District Court for the Northern District of Illinois or any state court
located in Cook County, Illinois (the "Chosen Courts") and (i) irrevocably
submits to the exclusive jurisdiction of the Chosen Courts, (ii) waives any
objection to laying venue in any such action or proceeding in the Chosen Courts,
(iii) waives any objection that the Chosen Courts are an inconvenient forum or
do not have jurisdiction over any party hereto, and (iv) agrees that service of
process upon such party in any such action or proceeding shall be effective if
notice is given in accordance with Section 9.1 of this Agreement.
IX.12 COUNTERPARTS. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original, and all of which shall
constitute one and the same Agreement.
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IX.13 HEADINGS. The heading references herein and the table of contents
hereto are for convenience purposes only, do not constitute a part of this
Agreement and shall not be deemed to limit or affect any of the provisions
hereof.
IX.14 SEVERABILITY. The provisions of this Agreement shall be deemed
severable and the invalidity or unenforceability of any provision shall not
affect the validity or enforceability of the other provisions hereof. If any
provision of this Agreement, or the application thereof to any Person or any
circumstance, is invalid or unenforceable, (a) a suitable and equitable
provision shall be substituted therefor in order to carry out, so far as may be
valid and enforceable, the intent and purpose of such invalid or unenforceable
provision and (b) the remainder of this Agreement and the application of such
provision to other Persons or circumstances shall not be affected by such
invalidity or unenforceability, nor shall such invalidity or unenforceability
affect the validity or enforceability of such provision, or the application
thereof, in any other jurisdiction.
IN WITNESS WHEREOF, the parties have executed this Asset Purchase
Agreement as of the date first written above.
PACTIV CORPORATION
By: /s/ James Faulkner
-----------------------------------------
Name: James Faulkner
Title: Vice President
PACTIV BUSINESS SERVICES INC.
By: /s/ James Faulkner
-----------------------------------------
Name: James Faulkner
Title: Vice President
EXULT, INC.
By: /s/ Stephen M. Unterberger
-----------------------------------------
Name: Stephen M. Unterberger
Title: COO
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SCHEDULES AND EXHIBITS
SCHEDULES
---------
Schedule 1.1.1 - Pactiv and PBS Employees with "Knowledge"
Schedule 1.1.2 - Transferred Contracts
Schedule 1.1.3 - Equipment located at the Woodlands Facility excluded from
the Transferred Equipment
Schedule 1.1.4 - Certain Transferred Equipment
Schedule 1.1.5 - Transferred Licenses
Schedule 2.8 - Allocation of Purchase Price
Schedule 3.3 - Pactiv Consent and Approvals
Schedule 3.8 - Pactiv Plans
Schedule 3.11 - Encumbrances
Schedule 5.4 - List of Transferred Employees
Schedule 5.4(d) - Exult Employee Benefit Plans
Schedule 5.9 - Certain Retained Assets
EXHIBITS
--------
Exhibit A - Pactiv Service Agreement
Exhibit B - TA Service Agreement
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