Exhibit 10.5
FORM OF SERVICE AGREEMENT
between
Westar Industries, Inc.,
a Kansas corporation
and
Western Resources, Inc.,
a Kansas corporation
Dated as of [ ], 200_
SERVICE AGREEMENT
WESTERN RESOURCES, INC.
and
WESTAR INDUSTRIES, INC.
THIS SERVICE AGREEMENT (together with one or more Exhibits which may be
incorporated into this agreement from time to time, the "Agreement") is made and
entered into as of this [ ] day of [ ], 200__ by and between WESTERN RESOURCES,
INC., a Kansas corporation ("Western"), and WESTAR INDUSTRIES, INC., a Kansas
corporation ("Westar").
WHEREAS, HVOLT Enterprises, Inc., a Delaware corporation ("Parent"),
Western, Public Service Company of New Mexico, a New Mexico corporation ("PNM"),
HVK, Inc., a Kansas corporation and a wholly owned subsidiary of the Parent and
HVNM, Inc., a New Mexico corporation and wholly owned subsidiary of Parent have
entered into an Agreement and Plan of Restructuring and Merger, dated as of
November 8, 2000, (as the same may be amended from time to time, the "Merger
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Agreement"); and
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WHEREAS, Westar has requested that Western assist it by providing to
Westar and certain of its subsidiaries and affiliates identified in the
respective individual Exhibits which may, from time to time, be attached hereto
(each such entity a "Client Group Member", and collectively the "Client Group")
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the services described in the Exhibits hereto (the "Services"), and Western has
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agreed to provide such Services to Client Group Members, subject to the terms
and conditions of this Agreement:
NOW THEREFORE, for and in consideration of the mutual covenants set
forth herein, as well as other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties agree as follows:
1. Services. (a) Westar hereby retains Western to cause the Services
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described in Section 1 of each Exhibit to this Agreement to be provided to each
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Client Group Member (as defined in Section 3 of such respective Exhibit), and
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Western agrees to cause such Services to be provided, subject to the terms and
conditions of this Agreement.
(b) Westar and Western hereby agree for the benefit
of PNM and Parent that no Services will be supplied
by Western to Westar or any Distribution Subsidiary
(as defined in the Merger Agreement) except pursuant
to, and in accordance with, a properly completed
Exhibit hereto.
(c) Each Exhibit to be entered into hereto shall
describe Services to be provided hereunder, and shall
provide the same services or other services performed
by Western at the date of this Agreement, at the same
rates (adjusted as provided therein and as
contemplated by Section 2 below), as set forth in the
Exhibits pursuant to the P1 Agreement (as defined
below). None of the Exhibits entered into pursuant to
this Agreement will require Western to perform
Services requiring materially greater resources or
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personnel than those required for the Services
performed by Western at the date of this Agreement.
(d) Not later than 30 days prior to the date on which
a notice of intent not to renew may be given under
the P1 Agreement or any Exhibit thereto, Westar will
give notice thereof to Western. Unless Western shall
agree in writing otherwise, Westar shall, not later
than the last day a notice of intent not of renew may
be given, give notice of its intent not to renew such
Exhibit.
2. Payment for Services. (a) In exchange for the Services, Westar shall
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cause Western to be paid in accordance with the terms set forth in Section 3 of
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each respective Exhibit to this Agreement as may be amended in order to comply
with the requirements of the Public Utility Holding Company Act of 1935. Westar
shall be solely responsible, without right of reimbursement, for the
satisfaction of any tax, other than income tax, imposed by a state or local
taxing authority with respect to, or arising out of, the Services provided under
this Agreement or payment thereof ("Transaction Taxes")
(b) Notwithstanding the provisions of any Exhibit
hereto or of the P1 Agreement, (i) payments for
Services will not be due or paid for Services which,
in Western's usual and customary practices for
Services in effect at June 30, 2000 (the "Benchmark
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Practices"), would not have been charged, and (ii)
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charges for Services will be in accordance with the
Benchmark Practices (including practices relating to
escalation) if they result in charges different from
those set forth in any Exhibit or the P1 Agreement.
3. Term and Termination. Services under this Agreement shall be
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provided until this Agreement is terminated. This Agreement may be terminated
with one year's prior notice, given by the party desiring to terminate this
Agreement, on the anniversary of this Agreement, but such notice shall not be
given before the first anniversary of the Closing (as defined in the Merger
Agreement).
4. Notices. All notices which are required or may be given pursuant to
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the terms of this Agreement shall be in writing and shall be sufficient in all
respects if given in writing and delivered personally or by registered or
certified mail, return receipt requested, and such notice shall be deemed to be
given on the date hand-delivered or on the third day after the date deposited in
the United States mail, or other comparable commercial delivery system, with
postage or delivery charges thereon prepaid, addressed as follows:
if to Parent or PNM
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HVOLT Enterprises, Inc. and
Public Service Company of New Mexico
Xxxxxxxx Xxxxxx,
Xxxxxxxxxxx, XX 00000
Attention: Chief Financial Office
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Fax: (000) 000-0000
with a copy to
Winthrop, Stimson, Xxxxxx & Xxxxxxx
Xxx Xxxxxxx Xxxx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxxx Xxxxxxx Xxx, Esq.
Xxxxxxx X. Xxxxxxxx, Esq.
Fax: (000) 000-0000
if to Westar or Western
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Westar Industries, Inc. and
Western Resources, Inc.
000 Xxxxx Xxxxxx Xxxxxx
Xxxxxx, XX 00000
Western Resources, Inc.:
Attention: Xxxxxxx X. Xxxxxxx, Esq.
Executive Vice President and
General Counsel
Westar Industries, Inc.:
Attention: President
Fax: (000) 000-0000
with a copy to
LeBoeuf, Lamb, Xxxxxx & XxxXxx, L.L.P.
000 Xxxx 00xx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxxx X. Xxxx, Esq.
Xxxxxxxx X. Xxxxx, Esq.
Fax: (000) 000-0000
5. Governing Law. This Agreement shall be governed by and construed
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according to the internal laws of, and without regard to conflicts of law
provisions, the State of Kansas.
6. Amendment. This Agreement may be amended only by a writing
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executed with the same formality as this Agreement
7. Contractual Arrangement. It is expressly acknowledged by the parties
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hereto that Western is an independent contractor. Nothing contained herein is
intended or shall be construed to create an employer-employee relationship,
joint venture or partnership between Western and Westar and/or any Client Group
Member. The parties acknowledge and agree that Westar will not withhold from the
compensation payable to Western hereunder any sums for income tax,
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employment insurance, workers compensation, Social Security, or any other
withholding pursuant to any state or federal law or requirement of any
governmental agency.
8. Limitations on Liability for Work Performed. Western agrees to
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perform the work in a good and workmanlike manner consistent with the customs
and practices of the industry providing services substantially similar to the
Services. WESTERN EXPRESSLY EXCLUDES ALL OTHER GUARANTEES WARRANTIES OR
REPRESENTATIONS OF ANY KIND WHATSOEVER. WESTERN WILL NOT BE RESPONSIBLE FOR ANY
INDIRECT, SPECIAL, PUNITIVE, CONSEQUENTIAL OR OTHER DAMAGES WITH WESTERN'S SOLE
LIABILITY BEING LIMITED TO THE REPAIR AND REASONABLE COSTS OF CORRECTING ANY
ERRORS WHICH ARE ATTRIBUTABLE TO THE WORK OF WESTERN, NOT TO EXCEED IN THE
AGGREGATE THE AMOUNTS PAID TO WESTERN WITH RESPECT TO THE APPLICABLE EXHIBIT.
9. Indemnification. Westar shall indemnify and hold Western, its
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members, directors, officers, employees, parents, affiliates, subsidiaries and
independent contractors ("Indemnitees") harmless against any and all claims,
losses, costs, damages, and expenses, including, but not limited to Transaction
Taxes and attorney fees, arising out of or in connection with the services
provided to each Client Group Member by Western hereunder or from any breach by
Western of any provision of this Agreement, or any act, omission or neglect by
Western, or any Indemnitee. For purposes of this Section 9, the term "Client
Group Member" shall mean and include both Client Group Members hereunder and
under the P1 Agreement.
10. Confidential Information. Western and Westar, on behalf of itself
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and of each Client Group Member agree that any information received by either in
connection with this contract, which concerns the confidential personal,
financial or other affairs of the other will be treated in full confidence and
will not be revealed to any other persons, firms or organizations except as may
be required by judicial process, applicable law or regulation.
11. Entire Agreement; etc. (a) Except as set forth in Section 11(b)
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below, this Agreement contains the entire agreement and understanding between
Westar and Western and supersedes all prior agreements and understandings, if
any, relating to the subject matter hereof. Except for those set forth in this
Agreement, the parties hereby agree that no obligation or contractual commitment
of any kind, other than as specifically set out in this Agreement (or definitive
agreement(s) as may be entered into between the parties, if any, including
agreements with respect to Additional Services), shall be deemed to exist
between the parties with respect to subject matter hereof, and none of Westar,
and any Client Group Member, or Western shall be under any legal obligation of
any kind whatsoever to enter into any transaction or agreement by virtue of this
Agreement.
(b) Western and Westar hereby adopt each and every
amendment, exhibit, annex or other attachment to the
Services Agreement between Western and Protection
One, Inc., dated April 1, 1999, as assigned to, and
assumed by, Protection One Alarm Monitoring, Inc., on
May 19, 2000 (the "P1 Agreement"), in the form
attached hereto as Exhibit A, and this Agreement
shall be construed and interpreted as if all such
amendments, exhibits, annexes and other attachments
to the P1 Agreement have been made to,
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and have so modified, this Agreement, provided that
the term "Westar" shall be deemed to have replaced
the terms "Protection One, Inc." (and any
abbreviations thereof) and/or " Protection One Alarm
Monitoring, Inc." (and any abbreviations thereof) in
each such amendment, exhibit, annex or other
attachment as attached to the P1 Agreement.
(c) Western and Westar shall cooperate in seeking to
exclude from this Agreement and the Exhibits hereto
at the earliest commercially practicable time the
portion of services under the P1 Agreement which are
direct home security business services (i.e.,
monitoring and billing).
12. Third Party Beneficiaries. There are no third party
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beneficiaries, express or implied, intended or unintended, to this Agreement.
13. Binding Effect and Assignment. This Agreement and the rights and
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obligations under this Agreement shall not be assignable or transferable by the
parties (including by operation of law in connection with a merger,
consolidation or sale of all or substantially all the assets of a party) without
the prior written consent of the other party hereto, except that Western may
assign and transfer its rights and obligations under this Agreement to an
affiliate of Western without such written consent; provided any such assignment
or transfer shall not release Western Resources of its obligations hereunder.
Western will provide prompt notice to Westar of any such assignment and
transfer. All the terms and provisions of this Agreement shall be binding upon
and inure to the benefit of and be enforceable by the respective successors and
assigns of the parties hereto, whether so expressed or not.
14. Prior Negotiations. This Agreement supersedes all prior
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negotiations and agreements between the parties hereto relative to the
transaction contemplated by this Agreement, which contains the entire
understanding of the parties hereto.
15. Waiver of Breach. The waiver by any party hereto of a breach of
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any provision of this Agreement shall not operate as or be construed to be a
waiver of any subsequent breach by any party.
16. Dispute Resolution. (a) Each of Westar, for itself and each Client
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Group Member, and Western hereby agrees that (i) it shall, promptly upon its
dispute of a matter arising under this Agreement which may involve a claim(s)
against the other, or a Client Group Member, as the case may be, of more than
$5,000 or injunctive relief, provide appropriate written notification ("Notice")
of such dispute ("Dispute") to such other party(ies), (ii) it will attempt in
good faith to resolve the Dispute through meeting(s) and discussions
("Discussions") with the other party(ies) to the Dispute, such Discussions to be
held from time to time during the 30 calendar days immediately after the date of
the Notice, and (iii) it shall designate in the Notice appropriate senior
management to actively participate in the Discussions for the purpose of
resolving the Dispute, proposed alternative dates and locations of such
meetings, and the nature of the Dispute.
(b) Westar, for itself and each Client Group Member,
and Western each hereby agree that none of Westar,
Western, or any Client Group Member, shall bring a
legal action against any Client Group Member,
Western, or
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Westar, as the case may be, without first having
complied with the provisions set forth in this
Section 16.
17. Venue. Any dispute not resolved pursuant to paragraph 16 above, if
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raised in litigation, shall be brought in state or federal court having situs in
Shawnee County, Kansas, as the parties agree that venue for all such disputes
shall be in Shawnee County, Kansas.
18. Invalid Provision. The invalidity or unenforceability of any
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provision of this Agreement shall not affect the other provisions hereof, and
this Agreement shall be construed in all respects as if such invalid or
unenforceable provision were omitted.
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19. IN WITNESS WHEREOF, the parties have executed this Agreement on
the day and year first-above written.
WESTERN RESOURCES, INC. WESTAR INDUSTRIES, INC.
Signature: Signature:
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By: By:
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Title: Title:
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Date: Date:
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