EXHIBIT 2.1
PLAN AND AGREEMENT OF REORGANIZATION
This PLAN AND AGREEMENT OF REORGANIZATION (the "Agreement") is entered
into as of this 28th day of October, 1997, by and among Onsite Energy
Corporation, a Delaware corporation ("Onsite"), Westar Business Services,
Inc., a Kansas corporation ("WBS"), Westar Energy, Inc. ("Westar Energy"),
a Kansas corporation and the sole shareholder of WBS), and Westar Capital,
Inc., a Kansas corporation ("Westar Capital").
PLAN OF REORGANIZATION
The transaction contemplated by this Agreement is intended to be a
"tax free" exchange (the "Reorganization") as contemplated by the
provisions of Section 368(a)(1)(B) of the Internal Revenue Code of 1986, as
amended. However, no representation is made nor has an opinion been
obtained that the transaction qualifies for Section 368(a)(1)(B) treatment.
Onsite will offer to acquire 100% of WBS's issued and outstanding capital
stock, consisting solely of Common Stock, no par value (the "WBS Shares"),
in exchange for shares of Onsite's voting common stock, par value $0.001
per share. Upon the consummation of the transfer of WBS Shares and the
issuance of the Exchange Stock to Westar Capital as set forth in Sections 1
and 2 herein below, WBS will be a wholly-owned subsidiary of Onsite.
AGREEMENT
SECTION 1
TRANSFER OF WBS SHARES
1.1 DELIVERY OF WBS SHARES. Westar Energy, the sole shareholder of
WBS as of the closing date as such term is defined in Section 3.1 hereof
(the "Closing Date"), shall transfer, assign, convey and deliver to Onsite,
at the Closing, as such term is defined in Section 3.1 hereof (the
"Closing"), certificates representing 100% of the WBS Shares. The transfer
of all WBS Shares shall be made free and clear of all liens, mortgages,
pledges, encumbrances or charges, whether disclosed or undisclosed, except
as Westar Energy and Onsite shall have otherwise agreed in writing prior to
the Closing.
SECTION 2
ISSUANCE OF ONSITE STOCK
TO WESTAR CAPITAL
2.1 ISSUANCE AND DELIVERY OF EXCHANGE STOCK. As consideration for
the transfer, assignment, conveyance and delivery of the WBS Shares
hereunder, on the Closing Date, Onsite shall deliver the "Exchange Stock"
as follows:
(a) to Westar Capital, 1.7 million shares of Onsite voting common
stock, in exchange for all shares of WBS Common Stock outstanding
immediately prior to the Closing Date; and
(b) to ▇▇▇▇▇▇ Eng ▇▇▇▇ & ▇▇▇▇▇▇▇▇ as Escrow Agent, 800,000 shares
of Onsite voting common stock to be delivered to Westar Capital
in the event that WBS has executed a contract with (i) the Kansas
City, Kansas School District (KCK) for a minimum of $3 million,
or (ii) Health Midwest for a minimum of $2 million, before March
1, 1998, pursuant to the Escrow Agreement and Instructions
attached hereto as Exhibit A.
2.2 NO LIEN OR ENCUMBRANCES ON EXCHANGE STOCK. The issuance of the
Exchange Stock shall be made free and clear of all liens, mortgages,
pledges, encumbrances or charges, whether disclosed or undisclosed, except
as Westar Energy and Onsite shall have otherwise agreed in writing. As
provided herein and immediately prior to the Closing Date, WBS shall have
issued and outstanding one thousand (1,000) shares of WBS Common Stock.
2.3 RESTRICTIONS ON THE EXCHANGE STOCK. None of the Exchange Stock
issued to Westar Capital shall, at the time of Closing, be registered under
federal or state securities laws but, rather, the Exchange Stock shall be
issued pursuant to an exemption therefrom. All of such shares shall bear a
legend worded substantially as follows:
"THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES
ACT OF 1933 OR ANY STATE SECURITIES LAWS. THEY MAY NOT BE SOLD
OR OFFERED FOR SALE IN THE ABSENCE OF AN EFFECTIVE REGISTRATION
STATEMENT AS TO THE SECURITIES UNDER SAID ACT AND ANY APPLICABLE
STATE SECURITIES LAW OR AN OPINION OF COUNSEL SATISFACTORY TO THE
COMPANY THAT SUCH REGISTRATION IS NOT REQUIRED."
Onsite's transfer agent shall annotate its records to reflect the
restrictions on transfer embodied in the legend set forth above. There
shall be no requirement that Onsite register the Exchange Stock under the
Securities Act of 1933, as amended (the "Securities Act"), except as set
forth in the Registration Rights Agreement between Westar Capital and
Onsite of even date herewith, nor shall WBS, Westar Energy or Westar
Capital be required to register any WBS Shares under the Securities Act.
2.4 STOCKHOLDERS' AGREEMENT. The Exchange Stock shall also be
subject to certain restrictions as set forth in the Stockholders Agreement
dated October 28, 1997, between certain Onsite Shareholders and Westar
Capital, and shall contain a legend to that effect.
SECTION 3
CLOSING
3.1 CLOSING OF TRANSACTION; CLOSING DATE. The Closing of the
Reorganization (the "Closing") shall take place on October 31, 1997, (the
"Closing Date") provided all of the conditions precedent provided for in
Section 7 shall have been satisfied or waived and all deliveries provided
for in Sections 3.2 and 3.3 have been made. The Closing shall take place
simultaneously at the offices of ▇▇▇▇▇▇ Eng Linn & ▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇, at the offices of WBS, ▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇▇, and at the offices of Onsite, ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇.
3.2 DELIVERIES ON THE CLOSING DATE BY WBS AND WESTAR ENERGY. WBS and
Westar Energy shall deliver or cause to be delivered to Onsite the
following on or before the Closing Date:
(a) a copy of the minutes and/or consent of WBS's Board of
Directors authorizing WBS to close the transaction described by this
Agreement;
(b) a Certificate of Good Standing for WBS issued not more than
thirty days prior to the Closing by the Kansas Secretary of State;
(c) certified copies of WBS's Articles and Bylaws, as amended to
the Closing Date;
(d) copies of WBS's unaudited financial statements for the years
ended December 31, 1995 and December 31, 1996, and unaudited financial
statements for the period ended September 30, 1997, certified to be
true and complete copies;
(e) share certificates representing all of the shares of WBS
Common Stock, sufficiently endorsed by stock powers for transfer to
Onsite pursuant to the terms and conditions of this Agreement;
(f) a certified resolution of Westar Energy forgiving that
portion of that certain note by and between WBS and Westar Energy for
which WBS has responsibility for repayment or liability;
(g) copies of the resignation letters of the directors and
officers of WBS;
(h) a certificate signed by WBS's President dated as of the
Closing Date stating that all of WBS's representations and warranties
set forth in this Agreement are true and correct and that all of the
conditions of this Agreement applicable to the Closing Date have been
satisfied or waived;
(i) a certificate signed by the President of Westar Energy dated
as of the Closing Date stating that all of the representations and
warranties by WBS and/or Westar Energy set forth in this Agreement are
true and correct and that all of the conditions of this Agreement
applicable to the Closing Date have been satisfied or waived;
(j) a certificate signed by the President of Westar Capital
dated as of the Closing Date stating that all of the representations
and warranties by Westar Capital set forth in this Agreement are true
and correct and that all of the conditions of this Agreement
applicable to the Closing Date have been satisfied or waived; and
(k) a copy of the Non-Compete Agreement between Western
Resources, Inc. and Onsite, attached hereto as Exhibit B, executed by
Western Resources, Inc.
3.3 DELIVERIES ON THE CLOSING DATE BY ONSITE TO WESTAR ENERGY.
Onsite shall deliver, or cause to be delivered, to Westar Energy the
following on or before the Closing Date:
(a) Share certificates evidencing the appropriate number of
shares of Onsite Common Stock in accordance with the provisions of
Section issued in the name of Westar Capital;
(b) a copy of the minutes and/or consents of Onsite's Board of
Directors authorizing Onsite to take the necessary steps toward
Closing the transaction described by this Agreement;
(c) a copy of a Certificate of Good Standing for Onsite issued
not more than thirty days prior to the Closing by the Delaware
Secretary of State;
(d) a certificate signed by Onsite's Chief Executive Officer
dated as of the Closing Date stating that all of Onsite's
representations and warranties set forth in this Agreement are true
and correct and that all of the conditions of this Agreement
applicable to the Closing Date have been satisfied or waived; and
(e) an opinion of counsel in the form attached hereto as Exhibit
C.
(f) a copy of the Purchase Agreement between Onsite and Westar
Energy in the form attached hereto as Exhibit D.
3.4 FILINGS; COOPERATION. WBS, Westar Energy, Westar Capital and
Onsite shall, on request and without further consideration, cooperate with
one another by furnishing or using their best efforts to cause others to
furnish any additional information and/or executing and delivering or using
their best efforts to cause others to execute and deliver any additional
documents and/or instruments, and doing or using their best efforts to
cause others to do any and all such other things as may be reasonably
required by the parties or their counsel to consummate or otherwise
implement the transactions contemplated by this Agreement.
SECTION 4
REPRESENTATIONS AND WARRANTIES BY WBS, WESTAR ENERGY,
AND WESTAR CAPITAL
4.1 REPRESENTATIONS AND WARRANTIES OF WBS AND WESTAR ENERGY. Subject
to the schedules attached hereto and incorporated herein by this reference
(which schedules shall be acceptable to Onsite), WBS and Westar Energy,
jointly and severally, represent and warrant to Onsite as follows:
(a) ORGANIZATION AND GOOD STANDING. WBS is a corporation duly
organized, validly existing and in good standing under the laws of Kansas,
and has all requisite power and authority to own or lease properties and to
carry on business as now being conducted and as proposed to be conducted.
WBS is duly qualified and in good standing in each jurisdiction in which
the nature of its properties, assets or business requires such
qualification.
(b) CAPITALIZATION. WBS's authorized capital stock consists of
1,000 shares, all of which are Common Stock, no par value, of which all are
issued and currently outstanding or will be issued and outstanding as of
the Closing Date. All of such outstanding shares are validly issued,
fully paid and non-assessable. WBS does not have any other equity
securities or instruments convertible into equity securities authorized,
issued or outstanding.
(c) WBS AUTHORITY TO EXECUTE AGREEMENT. The shareholders of
WBS, if required, and WBS's board of directors, pursuant to the power and
authority legally vested in them, have duly authorized the execution and
delivery by WBS of this Agreement, and have duly agreed to each of the
transactions hereby contemplated. WBS has the power and authority to
execute and deliver this Agreement, to approve the transactions hereby
contemplated and to take all other actions required to be taken by it
pursuant to the provisions hereof. WBS has taken all actions required by
law, its Articles of Incorporation, as amended, or otherwise to authorize
the execution and delivery of this Agreement. This Agreement is valid and
binding upon WBS in accordance with its terms. Neither the execution and
delivery of this Agreement nor the consummation of the transactions
contemplated hereby will constitute a violation or breach of the Articles
of Incorporation, as amended, or the Bylaws, as amended, of WBS, or any
agreement, stipulation, order, writ, injunction, decree, law, rule or
regulation applicable to WBS.
(d) WESTAR ENERGY AUTHORITY TO EXECUTE AGREEMENT. The
shareholders of Westar Energy, if required, and Westar Energy's board of
directors, pursuant to the power and authority legally vested in them, have
duly authorized the execution and delivery of this Agreement, and have duly
agreed to each of the transactions hereby contemplated. Westar Energy has
the power and authority to execute and deliver this Agreement, to approve
the transactions hereby contemplated and to take all other actions required
to be taken by it pursuant to the provisions hereof. Westar Energy has
taken all actions required by law, its Articles of Incorporation, as
amended, or otherwise to authorize the execution and delivery of this
Agreement. This Agreement is valid and binding upon Westar Energy in
accordance with its terms. Neither the execution and delivery of this
Agreement nor the consummation of the transactions contemplated hereby will
constitute a violation or breach of the Articles of Incorporation, as
amended, or the Bylaws, as amended, of Westar Energy, or any agreement,
stipulation, order, writ, injunction, decree, law, rule or regulation
applicable to Westar Energy.
(e) SUBSIDIARIES. WBS has no subsidiaries and no other material
investments, directly or indirectly, or other material financial interest
in any other corporation or business organization, joint venture or
partnership of any kind whatsoever.
(f) STOCK FREE FROM ENCUMBRANCES. Westar Energy is the legal
and beneficial owner of the WBS Shares, free of any liens and encumbrances,
and no other party has any right to assert an interest, inchoate or
otherwise, in any of the WBS Shares.
(g) FINANCIAL STATEMENTS. WBS's financial statements are true,
complete and correct in all material respects and have been prepared in
accordance with past practices, applied on a basis consistent with prior
accounting periods, present fairly the financial position and the results
of operations and changes in financial positions for the periods indicated
and have accurately recorded all material revenues and expenses of WBS on
an accrual basis as reflected in the books and records of WBS. The books
of account of WBS fully and fairly reflect all of the material transactions
of WBS.
(h) MARKETABLE TITLE. WBS has good and marketable title to all
of its material properties and assets, free and clear of any material
imperfection of title, security interest, lien, claim or encumbrance of any
kind except for the lien of taxes not yet due and payable, and assets or
properties held under valid and subsisting leases which are in full force
and effect and with which WBS is not in default with or without notice or
lapse of time.
(i) USE OF WESTAR NAME. On the Closing Date, WBS shall change
its name to a name of Onsite's choosing which does not include the word
"Westar." After Closing, WBS's right to use the names "Westar," "Westar
Business Services," "Westar Business Services, Inc." or any service name or
▇▇▇▇ related to Westar Energy or Western Resources, Inc. shall be
controlled by the Transition Agreement between Onsite, WBS, Westar Energy,
Westar Capital and Western Resources, Inc., attached hereto as Exhibit E.
(j) ABSENCE OF CERTAIN CHANGES. Since the date of the most
recent available unaudited financial statements specified in Section 4.1(g)
above, to WBS's knowledge there has been no material change in WBS's
financial condition, assets or liabilities.
(k) ABSENCE OF UNDISCLOSED LIABILITIES. Except as disclosed on
WBS's most recent available balance sheet and, to WBS's knowledge, WBS has
no other liabilities, other than those incurred in the ordinary course of
business, secured or unsecured and whether accrued, absolute, contingent,
direct, indirect or otherwise, which would be individually, or in the
aggregate, material to the results of operations or financial condition of
WBS as of the Closing Date.
(l) EMPLOYEE OBLIGATIONS. Except as provided for in Section
8.1(g), WBS has no liabilities to any of its employees or any governmental
authority or private insurer, in connection with employee compensation and
benefits, including but not limited to: (i) unpaid wages/salary, including
unpaid overtime compensation whether accrued, absolute, contingent, direct,
indirect or otherwise, (ii) participation in WBS's medical and dental
plans, (iii) long-term disability plan payments, and (iv) workers'
compensation expenses, including settlement amounts.
(m) LITIGATION. There are no outstanding orders, judgments,
injunctions, awards or decrees of any court, governmental or regulatory
body or arbitration tribunal against WBS or its properties. There are no
actions, suits or proceedings pending, or, to the knowledge of WBS,
threatened against or affecting WBS, any of its officers or directors
relating to their positions as such, or any of its properties, at law or in
equity, or before or by any federal, state, municipal or other governmental
department, commission, board, bureau, agency or instrumentality, domestic
or foreign, in connection with the business, operations or affairs of WBS
which might result in any material adverse change in the operations or
financial condition of WBS, or which might prevent or materially impede the
consummation of the transactions under this Agreement.
(n) TAX MATTERS. All federal, foreign, state and local tax
returns, reports and information statements required to be filed by or with
respect to the activities of WBS have been filed for all the years and
periods for which such returns and statements were due, including
extensions thereof. WBS has not incurred any liability with respect to any
federal, foreign, state or local taxes except in the ordinary and regular
course of business. WBS is not delinquent in the payment of any such tax
or assessment, and no deficiencies for any amount of such tax have been
proposed or assessed.
(o) COMPLIANCE WITH LAWS. To WBS's knowledge, the operations
and affairs of WBS do not violate any law, ordinance, rule or regulation
currently in effect, or any order, writ, injunction or decree of any court
or governmental agency, the violation of which would substantially and
adversely affect the business, financial condition or operations of WBS.
(p) OPERATING AUTHORITIES. To WBS's knowledge, WBS has all
material operating authorities, governmental certificates and licenses,
permits, authorizations and approvals ("Permits") required to conduct its
business as presently conducted. Except as otherwise disclosed in this
Agreement, during the last two years, there has not been any notice or
adverse development regarding such Permits; such Permits are in full force
and effect; no material violations are or have been recorded in respect of
any Permit; and no proceeding is pending or, to WBS's knowledge, threatened
to revoke or limit any Permit.
(q) BOOKS AND RECORDS. The books and records of WBS are
complete and correct, are maintained in accordance with good business
practice and accurately present and reflect, in all material respects, all
of the transactions therein described, and there have been no transactions
involving WBS which properly should have been set forth therein and which
have not been accurately so set forth.
(r) MINUTE BOOK. The Minute Book of WBS as delivered to Onsite
contains complete and correct records of all meetings and other corporate
actions of the Boards of Directors (including any committee established by
the Directors) and the shareholders of WBS, as maintained by it, and is
maintained pursuant to the requirements of the jurisdictions of its
incorporation.
(s) CONTRACTS. A true, correct, and complete copy of each of
WBS's active contracts (the "Contracts") is included in the business
records located at WBS's business. WBS has duly performed in all material
respects all obligations to be performed by it under the Contracts at or
prior to the Closing Date and has received no notice from any other party
thereto that it is in default in any material respect under any of its
obligations thereunder. No other party to any Contract is in default in
any material respect under any of its obligations thereunder. To WBS's
knowledge, no condition or state of facts exists that with notice or the
passage of time, or both, would constitute a default by WBS under any
Contract, and each Contract is in full force and effect and enforceable by
WBS against all other parties thereto in all material respects.
(t) FINDER'S FEE. WBS and Westar Energy are not liable or
obligated to pay any finder's, agent's, broker's or consultant's fee
arising out of or in connection with this Agreement or the transactions
contemplated by this Agreement, and WBS and Westar Energy have done nothing
to cause Onsite to incur any liability to any party for any finder's,
agent's, broker's or consultant's fee arising out of or in connection with
this Agreement or the transactions contemplated by this Agreement.
4.2 REPRESENTATIONS AND WARRANTIES OF WESTAR CAPITAL. Westar Capital
represents and warrants to Onsite as follows:
(a) WESTAR CAPITAL AUTHORITY TO EXECUTE AGREEMENT. The
shareholders of Westar Capital, if required, and Westar Capital's board of
directors, pursuant to the power and authority legally vested in them, have
duly authorized the execution and delivery of this Agreement, and have duly
agreed to each of the transactions hereby contemplated. Westar Capital has
the power and authority to execute and deliver this Agreement, to approve
the transactions hereby contemplated and to take all other actions required
to be taken by it pursuant to the provisions hereof. Westar Capital has
taken all actions required by law, its Articles of Incorporation, as
amended, or otherwise to authorize the execution and delivery of this
Agreement. This Agreement is valid and binding upon Westar Capital in
accordance with its terms. Neither the execution and delivery of this
Agreement nor the consummation of the transactions contemplated hereby will
constitute a violation or breach of the Articles of Incorporation, as
amended, or the Bylaws, as amended, of Westar Capital, or any agreement,
stipulation, order, writ, injunction, decree, law, rule or regulation
applicable to Westar Capital.
(b) PURCHASE ENTIRELY FOR OWN ACCOUNT. This Agreement is made
by Onsite in reliance upon Westar Capital's representation to Onsite, which
by Westar Capital's execution of this Agreement Westar Capital hereby
confirms, that the Exchange Stock to be issued to Westar Capital hereunder
will be acquired for investment purposes for Westar Capital's own account,
not as a nominee or agent, and not with a view to the resale or
distribution of any part thereof in violation of applicable federal and
state securities laws. By executing this Agreement, Westar Capital further
represents that Westar Capital does not have any contract, undertaking,
agreement or arrangement with any person to sell, transfer or grant
participations to such person or to any third person, with respect to any
of the Exchange Stock. A transfer of the Exchange Stock to an Affiliate by
Westar Capital shall not be deemed to be a violation of this provision. As
used herein, the term "Affiliate" shall mean, with respect to any person,
any other person that directly or indirectly through one or more
intermediaries controls or is controlled by or is under common control with
such person.
(c) RELIANCE UPON WESTAR CAPITAL'S REPRESENTATIONS. Westar
Capital understands that the Exchange Stock has not been registered under
the Securities Act on the grounds that the transactions contemplated by
this Agreement and the issuance of the Exchange Stock is exempt from
registration under the Securities Act pursuant to Section 4(2) thereof, and
Regulation D promulgated thereunder, and that the Onsite's reliance on such
exemption is predicated on Westar Capital's representations set forth
herein.
(d) RECEIPT OF INFORMATION. Westar Capital has received
information and had the opportunity to ask questions of Onsite management
and has considered such information in evaluating the terms and conditions
of the offering of the Exchange Stock, and the business, properties,
prospects and financial condition of Onsite, and in deciding to accept the
Exchange Stock. The foregoing, however, does not limit or modify the
representations and warranties of Onsite in Section 5.1 hereof or the right
of Westar Capital to rely thereon.
(e) INVESTMENT EXPERIENCE. Westar Capital represents that it is
experienced in evaluating and investing in securities of companies and
acknowledges that it is able to fend for itself, can bear the economic risk
of the investment, and has such knowledge and experience in financial and
business matters that it is capable of evaluating the merits and risks of
the investment in the Exchange Stock. WBS, Westar Energy and Westar
Capital further represent that none of them has been organized solely for
the purpose of acquiring the Exchange Stock.
(f) ACCREDITED INVESTOR. Westar Capital represents that it is
an "accredited investor" as that term is defined in Regulation D, 17 C.F.R.
230.501(a).
(g) RESTRICTED SECURITIES. Westar Capital understands that the
Exchange Stock issued, or to be issued, hereunder may not be sold,
transferred, or otherwise disposed of without registration under the
Securities Act or an exemption therefrom, and that in the absence of an
effective registration statement covering the Exchange Stock, or an
available exemption from registration under the Securities Act, the
Exchange Stock must be held indefinitely. In particular, Westar Capital is
aware that the Exchange Stock may not be sold pursuant to Rule 144, 17
C.F.R. 230.144, unless all of the conditions of that Rule are met.
4.3 DISCLOSURE. WBS and Westar Energy, jointly and severally, have
disclosed all events, conditions and facts materially affecting the
business and prospects of WBS. No representation or warranty by WBS or
Westar Energy in this Agreement, nor any statement or certificate furnished
or to be furnished to Onsite by WBS or Westar Energy pursuant hereto, or in
connection with the transactions contemplated hereby, knowingly contains or
will contain any untrue statement of a material fact, or omits or will omit
to state a material fact necessary to make the statements contained therein
not misleading.
SECTION 5
REPRESENTATIONS AND WARRANTIES BY ONSITE
5.1 REPRESENTATIONS AND WARRANTIES OF ONSITE. Onsite represents and
warrants to WBS as follows:
(a) ORGANIZATION AND GOOD STANDING. Onsite is a corporation
duly organized, validly existing and in good standing under the laws of the
State of Delaware and has full corporate power and authority to own or
lease its properties and to carry on its business as now being conducted
and as proposed to be conducted.
(b) CAPITALIZATION. Onsite's authorized capital stock consists
of (a) 24 million shares of Common Stock, 0.001 par value, of which
23,999,000 are designated Class A Common Stock, of which 12,944,172 are
currently outstanding and held by approximately 217 shareholders of record,
and (b) one million shares of preferred stock, $0.001 par value, of which
two hundred thousand (200,000) are issued and currently outstanding.
(c) AUTHORITY TO EXECUTE AGREEMENT. The Board of Directors of
Onsite, pursuant to the power and authority legally vested in it, has duly
authorized the execution and delivery by Onsite of this Agreement, and has
duly agreed to each of the transactions hereby contemplated. Onsite has
the power and authority to execute and deliver this Agreement, to approve
the transactions hereby contemplated and to take all other actions required
to be taken by it pursuant to the provisions hereof. Onsite has taken all
actions required by law, its Articles of Incorporation, as amended, or
otherwise to authorize the execution and delivery of this Agreement. This
Agreement is valid and binding upon Onsite. Neither the execution and
delivery of this Agreement nor the consummation of the transactions
contemplated hereby will constitute a violation or breach of the Articles
of Incorporation, as amended, or the Bylaws, as amended, of Onsite, or any
agreement, stipulation, order, writ, injunction, decree, law, rule or
regulation applicable to Onsite.
(d) SUBSIDIARIES. Except as set forth in Schedule 5.1(d),
Onsite has no subsidiaries, no other investments, directly or indirectly,
and no other financial interest in any other corporation or business
organization, joint venture or partnership of any kind whatsoever.
(e) FINANCIAL STATEMENTS. Onsite has delivered to WBS, prior to
the Closing Date, copies of Onsite's audited financial statements for each
of the three years ended June 30, 1995, 1996 and 1997, which are true and
complete and have been prepared in accordance with generally accepted
accounting principles applied on a basis consistent with past practice.
(f) ABSENCE OF CERTAIN CHANGES. Since the audited financial
statements in Onsite's Form 10-KSB for the year ended June 30, 1997, to
Onsite's knowledge, there has been no material change in Onsite's financial
condition, assets or liabilities.
(g) ABSENCE OF UNDISCLOSED LIABILITIES. Except to the extent
reflected in Onsite's most recent financial statements in Onsite's Form 10-
KSB for the year ended June 30, 1997, and to Onsite's knowledge, Onsite has
no other liabilities, other than those incurred in the ordinary course of
business, secured or unsecured and whether accrued, absolute, contingent,
direct, indirect or otherwise except the expenses in connection with the
acquisition of WBS, which would be materially adverse, individually or in
the aggregate, to the results of operation or financial condition of
Onsite.
(h) LITIGATION. Other than as disclosed in the auditors
response letter dated September 25, 1997 and previously provided to Westar
Energy, there are no outstanding orders, judgments, injunctions, awards or
decrees of any court, governmental or regulatory body or arbitration
tribunal against Onsite or its properties. There are no actions, suits or
proceedings pending, or, to the knowledge of Onsite, threatened against or
relating to Onsite. Onsite is not in default under or with respect to any
judgment, order, writ, injunction or decree of any court or of any federal,
state, municipal or other governmental authority, department, commission,
board, agency or other instrumentality.
(i) TAX MATTERS. All federal, foreign, state and local tax
returns, reports and information statements required to be filed by or with
respect to the activities of Onsite have been filed for all the years and
periods for which such returns and statements were due, including
extensions thereof. Onsite has not incurred any liability with respect to
any federal, foreign, state or local taxes except in the ordinary and
regular course of business. Onsite is not delinquent in the payment of any
such tax or assessment, and no deficiencies for any amount of such tax have
been proposed or assessed.
(j) COMPLIANCE WITH LAWS. To Onsite's knowledge, the operations
and affairs of Onsite do not violate any law, ordinance, rule or regulation
currently in effect, or any order, writ, injunction or decree of any court
or governmental agency, the violation of which would substantially and
adversely affect the business, financial condition or operations of Onsite.
(k) REPORTS AND OTHER INFORMATION. All material reports,
documents and information required to be filed with the Securities and
Exchange Commission with respect to Onsite have been filed. Since January
1, 1996, Onsite has made all filings required to be made in compliance with
the Securities Act, and, to Onsite's knowledge, such did not omit to state
any material fact necessary in order to make the statements contained
therein not misleading in light of the circumstances under which such
statements were made as of their respective dates of filing.
(l) OPERATING AUTHORITIES. To Onsite's knowledge, Onsite has
all material operating authorities, governmental certificates and licenses,
permits, authorizations and approvals ("Permits") required to conduct its
business as presently conducted. During the last 2 years, there has not
been any notice or adverse development regarding such Permits; such Permits
are in full force and effect; no material violations are or have been
recorded in respect of any Permit; and no proceeding is pending or, to
Onsite's knowledge, threatened to revoke or limit any Permit.
(m) BOOKS AND RECORDS. The books and records of Onsite are
complete and correct, are maintained in accordance with good business
practice and accurately present and reflect, in all material respects, all
of the transactions therein described, and there have been no transactions
involving Onsite which properly should have been set forth therein and
which have not been accurately so set forth.
(n) FINDER'S FEES. Onsite is not liable or obligated to pay any
finder's, agent's, broker's or consultant's fee arising out of or in
connection with this Agreement or the transactions contemplated by this
Agreement.
5.2 DISCLOSURE. Onsite has disclosed all events, conditions and
facts materially affecting the business and prospects of Onsite. No
representation or warranty by Onsite in this Agreement, nor any statement
or certificate furnished or to be furnished to WBS by Onsite pursuant
hereto, or in connection with the transactions contemplated hereby,
knowingly contains or will contain any untrue statement of a material fact,
or omits or will omit to state a material fact necessary to make the
statements contained therein not misleading.
SECTION 6
CONDUCT OF PARTIES PENDING CLOSING
6.1 CONDUCT OF WBS BUSINESS PENDING CLOSING. WBS covenants that,
pending the Closing Date:
(a) No change will be made in WBS's Articles of Incorporation or
bylaws other than such changes as may be first approved in writing by
Onsite.
(b) Subject to the protection provided by Section 8.8 herein,
WBS has given or will give to Onsite, its accountants and other
representatives full access during normal business hours throughout the
period prior to the Closing Date, to all of WBS's properties, books,
contracts, commitments, and records, and has furnished or will furnish
Onsite during such period with all such information concerning WBS's
affairs as Onsite may reasonably request.
(c) WBS's business will be conducted only in the ordinary
course, except as approved in writing by Onsite.
(d) WBS will not consider any inquiries or proposals relating to
the possible merger or reorganization of WBS or a purchase of its assets,
except to the extent that they may be legally obligated to do so in which
case Onsite shall be notified in writing.
(e) Except for the contracts related to KCK, Health Midwest, and
Mid-States referenced in Section and other than in the ordinary course of
business, unless such contract or commitment is less than $50,000, no
contract or commitment will be entered into by or on behalf of WBS or
indebtedness otherwise incurred, except with the prior consent of Onsite.
(f) No material increases in annual compensation to employees
shall be made and no employment agreements shall be entered into with any
employees of WBS.
(g) WBS shall not dispose of any of its assets, except in
connection with the "Appliances Business," or in the ordinary course of
business.
(h) WBS will use its best efforts to preserve WBS's business
intact; and to preserve the goodwill of those having business relations
with WBS.
6.2 CONDUCT OF ONSITE PENDING CLOSING. Onsite covenants that,
pending the Closing:
(a) Onsite's business will be conducted only in the ordinary
course.
(b) Except for the designation of the Series C Preferred Stock,
no change will be made in Onsite's Articles of Incorporation or bylaws
other than such changes as may be first approved in writing by WBS.
(c) Onsite will not consider any inquiries or proposals relating
to the possible merger or reorganization of Onsite or a purchase of its
assets, except to the extent that they may be legally obligated to do so in
which case Westar Energy shall be notified in writing.
(d) Onsite has given or will give to WBS and/or Westar Energy,
its accountants and other representatives, full access during normal
business hours throughout the period prior to the Closing Date, to all of
Onsite's properties, books, contracts, commitments, and records, and has
furnished or will furnish WBS during such period with all such information
concerning Onsite's affairs as WBS may reasonably request.
SECTION 7
CONDITIONS PRECEDENT TO CLOSING
7.1 CONDITIONS PRECEDENT TO CLOSING. All obligations of Onsite and
WBS under this Agreement are subject to the fulfillment, prior to or at the
Closing Date, of all conditions herein set forth, including, but not
limited to, receipt by the appropriate party of all deliveries required by
Sections 3.2 and 3.3 herein, and fulfillment, prior to the Closing Date, of
each of the following conditions:
(a) WBS's, Westar Energy's, and Onsite's representations,
warranties and covenants contained in this Agreement shall be true at the
time of the Closing Date as though such representations, warranties and
covenants were made at such time.
(b) WBS shall have performed and complied with all agreements
and conditions required by this Agreement to be performed or complied with
prior to or at the Closing Date.
(c) Westar Energy shall have performed and complied with all
agreements and conditions required by this Agreement to be performed or
complied with prior to or at the Closing Date.
(d) Onsite shall have performed and complied with all agreements
and conditions required by this Agreement to be performed or complied with
prior to or at the Closing Date.
(e) Effective as of the Closing Date, WBS's director(s) shall
have resigned from the board and appointed new director(s), as nominated by
letter from Onsite's Chief Executive Officer.
(f) The Stock Subscription Agreement, and related agreements,
between Onsite and Westar Capital shall have closed.
(g) Effective as of the Closing Date, WBS's officer(s) shall
have resigned from such positions.
(h) The Transition Agreement, attached hereto as Exhibit E,
between Onsite and Western Resources, Inc. shall have been executed and
delivered.
(i) The Separation Plan attached hereto as Exhibit F (the
"Separation Plan") shall have been adopted by Onsite.
SECTION 8
ADDITIONAL COVENANTS OF THE PARTIES
8.1 EMPLOYEES. Upon the Closing, all of WBS's employees shall be
terminated and Onsite shall offer employment to each of WBS's employees on
an "at will" basis with a severance package as set forth in the Separation
Plan.
(a) OFFER OF EMPLOYMENT. At least one calendar day prior to the
Closing Date, Onsite shall make an offer of "at will" employment to every
employee listed by WBS on Schedule 8.1(a) attached hereto, which offer
shall include cash compensation as indicated next to such employee's name
on Schedule 8.1(a) and inclusion of such employee in the employee benefit
plans of Onsite, including but not limited to government-mandated plans
("Offer of Employment").
(b) ACCEPTANCE OF AN OFFER OF EMPLOYMENT. Acceptance of the
Offer of Employment will be effective only upon the receipt by Onsite via
facsimile, or by written acceptance delivered to ▇▇▇▇ ▇. ▇▇▇▇▇▇, not later
than 8:00 a.m. Central Standard Time on November 3, 1997, ("Offer
Acceptance Deadline") on a form to be provided by Onsite with the Offer of
Employment. If the acceptance of the Offer of Employment is not received
by Onsite before 8:00 a.m. Central Standard Time on November 3, 1997, then
it shall be deemed rejected. An individual who rejects an Offer of
Employment shall not become a "Continuing Employee," and Onsite shall have
no obligation to such individual, except as provided in paragraph (c)
below. Each employee of WBS who accepts an Offer of Employment and
commences active full-time employment is referred to in this Agreement as a
"Continuing Employee."
(c) DECLINING EMPLOYEE. In the event that a WBS employee listed
in Schedule 8.1(a) is required by Onsite under the Offer of Employment and
as a condition of employment to report to work at a location more than 35
miles from such individual's work location prior to the Closing (provided
such new work location is not actually closer to the employee's residence)
and such individual does not accept the Offer of Employment (a "Declining
Employee"), Onsite agrees to pay Westar Energy and Westar Energy agrees to
pay the Declining Employee an amount equal to the amount Onsite would have
paid the Declining Employee under paragraphs 4(a), (b) or (c) of the
Separation Plan if the Declining Employee was eligible for benefits under
the Separation Plan. It is specifically recognized that no Declining
Employee shall be deemed an employee of Onsite by virtue of such payment,
nor shall any Declining Employee be eligible for the insurance benefits set
forth in paragraph 4(d) of the Separation Plan.
(d) SEVERANCE. Each Continuing Employee who is terminated from
employment by Onsite within one year after the Closing Date shall, if such
Continuing Employee is eligible for separation pay and benefits in
accordance with the Separation Plan, receive the separation pay and
benefits provided in the Separation Plan. Onsite shall adopt the
Separation Plan at Closing and keep such Separation Plan in effect for 12
months thereafter.
(e) EMPLOYMENT AT WILL. Nothing in this Agreement nor the
Separation Plan shall be construed to imply that Onsite has assumed any
obligation not expressly set forth herein or alter the fact that each
Continuing Employee shall be an employee at will.
(f) BENEFIT PLANS. Onsite shall make available to Continuing
Employees and their eligible dependents (i) Onsite's policies, programs,
and plans in effect, as of the date hereof, and (ii) workers' compensation,
unemployment compensation, and all other government-mandated plans.
Onsite's benefit plans shall not provide for ineligibility for benefits for
any Continuing Employee and their eligible dependents based on a
preexisting condition unless, immediately as of the Closing Date, such
conditions also resulted in ineligibility for benefits for such Continuing
Employee or their eligible dependent, as the case may be, under WBS's
benefit plans.
(g) WESTAR ENERGY'S OBLIGATIONS. After the Closing, Westar
Energy shall have responsibility for all wages and salaries accrued to the
Offer Acceptance Deadline, all payroll taxes incurred prior to the Offer
Acceptance Deadline, and the following benefit payments: (i) all medical or
dental expenses incurred prior to the Offer Acceptance Deadline by any WBS
employee and individuals covered under any employee's participation in
WBS's medical and dental plans in accordance with WBS's group insurance
policy extension provisions; (ii) all payments for sick leave taken by any
WBS employee prior to the Offer Acceptance Deadline (although this
Agreement shall not create or impose any right to payments which did not
otherwise exist); (iii) all long-term disability plan payments relating to
disabilities which commenced prior to the Offer Acceptance Deadline; (iv)
benefit expenses incurred by any WBS employee or eligible dependent, as the
case may be, prior to the Offer Acceptance Deadline under WBS's benefit
plans, (v) workers' compensation expenses, including settlement amounts,
arising from or related to events occurring prior to the Offer Acceptance
Deadline; (vi) all payments for accrued and unused vacation time, and (vii)
expenses, including settlement amounts, incurred with respect to WBS
employees for workers' compensation claims arising out of occurrences which
occurred prior to the Offer Acceptance Deadline.
(h) ONSITE'S OBLIGATIONS. Onsite shall be responsible for all
benefits of Continuing Employees and their eligible dependents which are
incurred after the Offer Acceptance Deadline and are payable under the
terms and conditions of Onsite's benefit plans. With respect to workers'
compensation and any other government-mandated plans, this Section shall
not be construed to violate applicable statutes or regulations. Where
permissible, any liabilities (other than those Westar Energy has agreed to
retain) under workers' compensation and other government-mandated plans
shall be transferred from Westar to Onsite as of the Offer Acceptance
Deadline. Where such transfer is prohibited by law, this provision is
intended to establish that primary responsibility as between Westar Energy
and Onsite for any liabilities, other than those liabilities which Westar
Energy has agreed to retain, shall be borne by Onsite.
(i) SEPARATION ARRANGEMENTS. Effective as of the Offer
Acceptance Deadline, Onsite shall establish and adopt the Separation Plan,
as set forth in Exhibit F attached hereto, for the benefit of all
Continuing Employees. Onsite shall maintain the Separation Plan for a
period of at least one year from the Closing Date. The costs incurred,
directly or indirectly, under the Separation Plan in connection with the
termination of any Continuing Employee after the Closing Date, shall be
borne exclusively by Onsite. "Years of Service" for each Continuing
Employee as such term is used in the Separation Plan is set forth in
Schedule 8.1(a). If, at any time within 12 calendar months after the date
of termination of employment of any Continuing Employee, Westar Energy
hires such Continuing Employee, then Westar Energy shall promptly pay to
Onsite an amount equal to the total amount paid by Onsite to such
terminated Continuing Employee under the Separation Plan.
8.2 OFFICES. Onsite shall cause WBS to maintain offices in Topeka
and Kansas City, Kansas as long as it makes good business sense.
8.3 COVENANT NOT TO COMPETE. To secure the interests of Onsite
hereunder, Westar Energy covenants and agrees that it will employ best
efforts to not, directly or indirectly, for the five years following the
Closing Date, anywhere in the states of Kansas, Missouri, Oklahoma,
California, New Jersey, New York, Massachusetts, Pennsylvania, Maryland,
Virginia, Florida, Washington, Arizona, Texas and Illinois, unless
otherwise authorized by Onsite in writing:
(a) solicit any customer of WBS or Onsite for services of the
Businesses, either directly or indirectly, or any current customer,
regardless of where located; or
(b) participate in the ownership, management, operation or
control of, or have any financial interest in or be connected with, or
engage in or aid or knowingly assist anyone else, in the conduct of the
following activities (collectively referred to as the "Businesses"):
(i) Reverse osmosis water treatment except for Western
Resources facilities not currently served by WBS;
(ii) construction and installation of electric substations
and other electrical equipment for use by industrial and
governmental entities within systems owned by them, other than
for emergency repairs and maintenance performed by Western
Resources and its regulated affiliates for such entities or for
its own system. This does not include services provided by
Western Resources and its regulated affiliates as part of its
electric and gas business as currently regulated; or
(iii) comprehensive design and installation of equipment
and services for the purpose of reducing energy costs.
Provided, however, that, during such five year period, if Westar
Energy or any of its affiliates should acquire a company which engages in
the Businesses, Westar Energy or such affiliate will offer to sell such
Businesses to Onsite, and Onsite and Westar Energy or such affiliate will
negotiate in good faith to consummate such sale. In the event Onsite and
Westar Energy or such affiliate are unable to agree to the terms of such
sale, the parties shall retain a third-party appraiser to set the sale
price. In the event Onsite and Westar Energy or such affiliate do not
consummate a sale based on the price recommended by the third-party
appraiser, Westar Energy or its affiliate may retain and operate such
Businesses and will not by virtue of such activities be deemed to be in
violation of this covenant not to compete.
It is not a violation of this Agreement for Western Resources or an
affiliate to acquire or hold a passive interest not in excess of 5% of the
outstanding equity in an entity engaged in the Businesses.
8.4 TAXES. Westar Energy shall pay, to Onsite or to the appropriate
taxing authority, any and all tax liability incurred by WBS prior to the
Closing Date, including taxes which have been incurred but are not yet
assessed, due and/or payable.
8.5 COOPERATION. WBS, Westar Energy, and Onsite will cooperate with
each other and their respective agents in carrying out the transactions
contemplated by this Agreement, and in delivering all documents and
instruments deemed reasonably necessary or useful by the other party.
8.6 EXPENSES. Each of the parties hereto shall pay all of its
respective costs and expenses (including attorneys' and accountants' fees,
finder's and consultant's fees, costs and expenses) incurred in connection
with this Agreement and the consummation of the transactions contemplated
herein.
8.7 PUBLICITY. Prior to the Closing Date, any written news releases
and/or other shareholder communication by any party pertaining to this
Agreement or the transactions contemplated herein shall be submitted to the
other parties for their review and approval prior to such news release
and/or other shareholder communication; provided, however, that (a) such
approval shall not be unreasonably withheld, and (b) such review and
approval shall not be required of disclosures required to comply, in the
judgment of counsel, with federal or state securities or corporate laws or
policies.
Each party shall provide the other reasonable opportunity, considering
the urgency of the disclosure of a particular matter, to review and comment
upon disclosures required to comply, in the judgment of counsel, with
federal or state securities or corporate laws or policies.
8.8 CONFIDENTIALITY. While each party is obligated to provide access
to and furnish information in accordance with this Agreement, it is
understood and agreed that such disclosure and information obtained as a
result of such disclosure are proprietary and confidential in nature. Each
party agrees to hold such information in confidence and not to reveal any
such information to any person who is not a party to this Agreement, or an
officer, director or key employee thereof, and not to use the information
obtained for any purpose other than assisting in its due diligence inquiry,
unless such information was obtained without restriction from an
alternative source or if the disclosure of such information is required by
law. This Section shall survive the execution and delivery of this
Agreement, the Closing and the consummation of the transaction called for
by this Agreement and shall not be limited to the time period otherwise set
forth in Section 10 below.
SECTION 9
TERMINATION
9.1 MUTUAL TERMINATION. WBS and Onsite may agree to mutually
terminate this Agreement prior to Closing without any liability to each
other.
9.2 TERMINATION UPON BREACH. Either party may terminate this
Agreement upon a material breach of this Agreement by the other.
SECTION 10
SURVIVAL OF REPRESENTATIONS AND
WARRANTIES
10.1 AS TO WBS. The representations and warranties of WBS contained
herein shall survive the execution and delivery of this Agreement, the
Closing and the consummation of the transactions called for by this
Agreement for a period of 2 years from the date of this Agreement unless a
lesser time period is specified.
10.2 AS TO WESTAR ENERGY. The representations and warranties of
Westar Energy contained herein shall survive the execution and delivery of
this Agreement, the Closing and the consummation of the transactions called
for by this Agreement for a period of 2 years from the date of this
Agreement unless a lesser time period is specified.
10.3 AS TO ONSITE. The representations and warranties of Onsite
contained herein shall survive the execution and delivery of this
Agreement, the Closing and the consummation of the transactions called for
by this Agreement for a period of 2 years from the date of this Agreement
unless a lesser time period is specified.
SECTION 11
MISCELLANEOUS
11.1 ENTIRE AGREEMENT, AMENDMENTS. This Agreement (including the
Exhibits and Schedules hereto) contains the entire agreement between the
parties with respect to the transactions contemplated hereby, and
supersedes all negotiations, representations, warranties, commitments,
offers, contracts, and writings prior to the date hereof.
11.2 BINDING AGREEMENT. This Agreement shall be binding upon and
inure to the benefit of the parties hereto and their respective assigns and
successors in interest; provided that neither this Agreement nor any right
hereunder shall be assignable by Onsite or WBS without the prior written
consent of the other parties.
11.3 INDEMNIFICATION.
(a) BY ONSITE. Onsite covenants and agrees to defend, indemnify
and hold harmless WBS and each of its officers, directors, employees,
agents, advisors and shareholders and affiliates, as such persons existed
prior to the Closing Date (collectively, the "WBS Indemnitees") from and
against, any loss, liability, damage or expense (including reasonable
attorneys' fees and costs) which any WBS Indemnitee may suffer, sustain or
become subject to as a result of a breach of any representation, warranty
or covenant by Onsite contained in this Agreement.
(b) BY WBS. WBS covenants and agrees to defend, indemnify and
hold harmless Onsite and each of its officers, directors, employees,
agents, advisors and shareholders and affiliates, as such persons existed
prior to the Closing Date (collectively, the "Onsite Indemnitees") from and
against any loss, liability, damage or expense (including reasonable
attorneys' fees and costs) which any Onsite Indemnitee may suffer, sustain
or become subject to, as a result of a breach of any representation,
warranty or covenant by WBS contained in this Agreement.
(c) BY WESTAR ENERGY. Westar Energy covenants and agrees to
defend, indemnify and hold harmless Onsite and each of its officers,
directors, employees, agents, advisors and shareholders and affiliates, as
such persons existed prior to the Closing Date (collectively, the "Onsite
Indemnitees") from and against any loss, liability, damage or expense
(including reasonable attorneys' fees and costs) which any Onsite
Indemnitee may suffer, sustain or become subject to, as a result of a
breach of any representation, warranty or covenant by WBS and/or Westar
Energy contained in this Agreement.
(d) BY WESTAR CAPITAL. Westar Capital covenants and agrees to
defend, indemnify and hold harmless Onsite and each of its officers,
directors, employees, agents, advisors and shareholders and affiliates, as
such persons existed prior to the Closing Date (collectively, the "Onsite
Indemnitees") from and against any loss, liability, damage or expense
(including reasonable attorneys' fees and costs) which any Onsite
Indemnitee may suffer, sustain or become subject to, as a result of a
breach of any representation, warranty or covenant by Westar Capital
contained in this Agreement.
11.4 DISPUTE RESOLUTION. No party to this Agreement shall be entitled
to take legal action with respect to any dispute relating hereto until it
has complied in good faith with the following alternative dispute
resolution procedures. This Section shall not apply to the extent it is
deemed necessary to take legal action immediately to preserve a party's
adequate remedy.
(a) NEGOTIATION. The parties shall attempt promptly and in good
faith to resolve any dispute arising out of or relating to this Agreement,
through negotiations between representatives who have authority to settle
the controversy. Any party may give the other party written notice of any
such dispute not resolved in the normal course of business. Within 20 days
after delivery of the notice, representatives of both parties shall meet at
a mutually acceptable time and place, and thereafter as often as they
reasonably deem necessary, to exchange information and to attempt to
resolve the dispute, until the parties conclude that the dispute cannot be
resolved through unassisted negotiation. Negotiations extending sixty days
after notice shall be deemed at an impasse, unless otherwise agreed by the
parties.
If a negotiator intends to be accompanied at a meeting by an attorney,
the other negotiator(s) shall be given at least three working days' notice
of such intention and may also be accompanied by an attorney. All
negotiations pursuant to this clause are confidential and shall be treated
as compromise and settlement negotiations for purposes of the Federal and
state Rules of Evidence.
(b) ADR PROCEDURE. If a dispute with more than $20,000.00 at
issue has not been resolved within 60 days of the disputing party's notice,
a party wishing resolution of the dispute ("Claimant") shall initiate
assisted Alternative Dispute Resolution ("ADR") proceedings as described in
this Section. Once the Claimant has notified the other party
("Respondent") of a desire to initiate ADR proceedings, the proceedings
shall be governed as follows: By mutual agreement, the parties shall
select the ADR method they wish to use. That ADR method may include
arbitration, mediation, mini-trial, or any other method which best suits
the circumstances of the dispute. The parties shall agree in writing to
the chosen ADR method and the procedural rules to be followed within 30
days after receipt of notice of intent to initiate ADR proceedings. To the
extent the parties are unable to agree on procedural rules in whole or in
part, the current Center for Public Resources, Inc. ("CPR") Model Procedure
for Mediation of Business Disputes, CPR Model Mini-trial Procedure, or CPR
Commercial Arbitration Rules--whichever applies to the chosen ADR
method--shall control, to the extent such rules are consistent with the
provisions of this Section. If the parties are unable to agree on an ADR
method, the method shall be arbitration.
The parties shall select a single Neutral (as defined by CPR) third
party to preside over the ADR proceedings, by the following procedure:
Within 15 days after an ADR method is established, the Claimant shall
submit a list of 5 acceptable Neutrals to the Respondent. Each Neutral
listed shall be sufficiently qualified, including demonstrated neutrality,
experience and competence regarding the subject matter of the dispute. A
Neutral who is an attorney or former judge shall be deemed to have adequate
experience. None of the Neutrals may be present or former employees,
attorneys, or agents of either party. The list shall supply information
about each Neutral, including address, and relevant background and
experience (including education, employment history and prior ADR
assignments). Within 15 days after receiving the Claimant's list of
Neutrals, the Respondent shall select one Neutral from the list, if at
least one individual on the list is acceptable to the Respondent. If none
on the list are acceptable to the Respondent, the Respondent shall submit a
list of 5 Neutrals, together with the above background information, to the
Claimant. Each of the Neutrals shall meet the conditions stated above
regarding the Claimant's Neutrals. Within 15 days after receiving the
Respondent's list of Neutrals, the Claimant shall select one Neutral, if at
least one individual on the list is acceptable to the Respondent. If none
on the list are acceptable to the Claimant, then the parties shall request
assistance from the CPR to select a Neutral.
The ADR proceeding shall take place within 30 days after the Neutral
has been selected. The Neutral shall issue a written decision within 30
days after the ADR proceeding is complete. Each party shall be responsible
for an equal share of the costs of the ADR proceeding. The parties agree
that any applicable statute of limitations shall be tolled during the
pendency of the ADR proceedings, and no legal action may be brought in
connection with this Agreement during the pendency of an ADR proceeding.
The Neutral's written decision shall become final and binding on the
parties, unless a party objects in writing within 30 days of receipt of the
decision. The objecting party may then file a lawsuit in any court allowed
by this Agreement. The Neutral's written decision shall be admissible in
the objecting party's lawsuit.
11.5 AMENDMENTS AND WAIVERS. Any term of this Agreement may be
amended and the observance of any term of this Agreement may be waived
(either generally or in a particular instance and either retroactively or
prospectively), only with the written consent of the parties. Any
amendment or waiver effected in accordance with this paragraph shall be
binding upon all of the parties. A waiver by any party hereto of a default
in the performance of this Agreement shall not operate as a waiver of any
future or other default, whether of a like or different kind.
11.6 SEVERABILITY. If one or more provisions of this Agreement are
held to be unenforceable under applicable law, such provision shall be
excluded from this Agreement and the parties shall use their efforts to
substitute provisions of substantially the same effect. The balance of the
Agreement shall be interpreted as if such provision were so excluded and
shall be enforceable in accordance with its terms.
11.7 GOVERNING LAW. This Agreement shall be construed in accordance
with the laws of the State of California.
11.8 NOTICES. All notices or other communications required hereunder
shall be in writing and shall be sufficient in all respects and shall be
deemed delivered after 5 days if sent via registered or certified mail,
postage prepaid; the next day if sent by overnight courier service; or one
business day after transmission, if sent by facsimile to the following:
(i) If to Onsite: Onsite Energy Corporation
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇., ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
Attn: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
with a copy to: ▇▇▇▇▇▇ Eng Linn & ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
Attn: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Esq.
(ii) If to WBS, Westar Energy and/or Westar Capital:
Westar Energy, Inc.
▇▇ ▇▇▇ ▇▇▇
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
Attn: ▇▇▇▇ ▇. ▇▇▇▇▇▇
with a copy to: Westar Energy, Inc.
▇▇ ▇▇▇ ▇▇▇
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
Attn: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
Any party hereto may change its address for purposes hereof by notice to
all other parties hereto.
11.9 COUNTERPARTS; SIGNATURES. This Agreement may be executed in one
or more counterparts, each of which may be deemed an original, but all of
which together shall constitute one and the same instrument. This
Agreement may be executed by a party and sent to the other parties via
facsimile transmission and the facsimile transmitted copy shall have the
same integrity, force and effect as an original document.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date first written above.
ONSITE ENERGY CORPORATION, WESTAR BUSINESS SERVICES,
a Delaware corporation INC., a Kansas corporation
By: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ By: ▇▇▇▇ ▇. ▇▇▇▇▇▇
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇. ▇▇▇▇▇▇,
President President
WESTAR ENERGY, INC.,
a Kansas corporation
By: ▇▇▇▇ ▇. ▇▇▇▇▇▇
▇▇▇▇ ▇. ▇▇▇▇▇▇,
President
WESTAR CAPITAL, INC.,
a Kansas corporation
By: ▇▇▇▇ ▇. ▇▇▇▇▇▇
▇▇▇▇ ▇. ▇▇▇▇▇▇,
President