Exhibit 99(e)(3)
TRANSITIONAL SERVICES AGREEMENT
THIS TRANSITIONAL SERVICES AGREEMENT (this "AGREEMENT") is entered into as
of April 24, 2001, between UtiliCorp United Inc., a Delaware corporation
("UtiliCorp"), and Aquila, Inc., a Delaware corporation ("AQUILA").
WHEREAS, UtiliCorp and Aquila have entered into the Master Separation
Agreement, pursuant to which UtiliCorp and Aquila have agreed to take certain
actions to effect the Separation; and
WHEREAS, in furtherance of the transactions contemplated by the Master
Separation Agreement, UtiliCorp and Aquila have agreed to enter into this
Agreement, under which UtiliCorp will provide certain transitional services to
Aquila;
NOW, THEREFORE, in consideration of the foregoing and the covenants and
agreements set forth below, the parties hereto agree as follows:
ARTICLE I
DEFINITIONS
Capitalized terms used but not defined herein shall have the meanings
ascribed to them in the Master Separation Agreement. In this Agreement, the
following capitalized terms shall have the following meanings:
"ADDITIONAL SERVICES" means services that UtiliCorp agrees to provide or cause
to be provided under a Transitional Service Schedule executed and delivered
after the date hereof.
"FORCE MAJEURE" means any event or circumstance beyond the reasonable control of
the party relying upon such event or circumstance, including, without
limitation: any act of God; any accident, explosion, fire, ice, earthquake,
lightning, tornado, hurricane, or other severe weather condition or calamity;
any civil disturbance, labor dispute, or labor or material shortage; any
sabotage or acts of terrorism; any acts of a public enemy, uprising,
insurrection, civil unrest, war, or rebellion; or any action or restraint by
court order or public or Governmental Authority or lawfully established civilian
authorities.
"MASTER SEPARATION AGREEMENT" means the Master Separation Agreement, dated April
24, 2001, between UtiliCorp and Aquila.
"SERVICE REPRESENTATIVES" means the individuals appointed by UtiliCorp and
Aquila under Section 2.7 hereof to coordinate the provision of the Services
hereunder.
"SERVICES" means, collectively, the transitional services provided hereunder by
UtiliCorp to Aquila in connection with the Separation, including the Additional
Services.
"SUBCONTRACTOR" means any Person engaged by UtiliCorp, in its sole discretion,
to perform all or any part or aspect of the Services hereunder.
"TRANSITIONAL SERVICE SCHEDULE" means (a) individually, a schedule in the form
attached hereto, which, upon execution and delivery, will, together with this
Agreement, govern the provision of a particular Service or group of related
Services by UtiliCorp to Aquila, and (b) collectively, all such schedules.
ARTICLE II
THE SERVICES
Section 2.1 THE SERVICES. UtiliCorp shall provide or cause to be provided
to Aquila the Services described in the Transitional Service Schedules attached
hereto.
Section 2.2 TRANSITIONAL SERVICE SCHEDULES. Each Service (or group of
related Services) shall be governed by a Transitional Service Schedule, which,
together with this Agreement, shall set forth the terms under which the Services
will be provided. In the event of a discrepancy between a provision in this
Agreement and a provision in any particular Transitional Service Schedule, the
provision in the Transitional Service Schedule shall prevail. Obligations under
a particular Transitional Service Schedule shall be effective on the later of
the execution of this Agreement or the execution of the Transitional Service
Schedule.
Section 2.3 SERVICE PARAMETERS. UtiliCorp shall provide the Services only
to the extent and under the personnel availability conditions that such Services
are provided by UtiliCorp for Aquila immediately prior to the Separation Date.
Furthermore, the Services will be available only for purposes of supporting the
conduct of the Aquila Business substantially in the manner it was conducted
immediately prior to the Separation Date.
Section 2.4 IMPRACTICABILITY. UtiliCorp shall not be required to provide
any Service to the extent the performance of such Service (a) becomes
impracticable as a result of a cause or causes outside the reasonable control of
UtiliCorp, (b) would require UtiliCorp to violate any applicable laws, rules or
regulations, or (c) would result in the breach of any agreement or other
applicable contract.
Section 2.5 ADDITIONAL RESOURCES. In providing the Services, UtiliCorp
shall not be obligated to (a) hire any additional employees, (b) maintain the
employment of any specific employee, (c) purchase, lease or license any
additional equipment or materials, or (d) pay any costs related to the transfer
or conversion of Aquila's data to Aquila or any alternate supplier of services.
Section 2.6 ADDITIONAL SERVICES. From time to time after the Separation
Date, Aquila may request Additional Services. If the requested Additional
Services (a) were provided by UtiliCorp to Aquila immediately prior to the
Separation Date and (b) are necessary, as reasonably determined by UtiliCorp, to
effect an orderly transition following the Separation, then UtiliCorp shall
negotiate in good faith the terms of one or more Transitional Service Schedules
in respect of the Additional Services.
Section 2.7 SERVICE REPRESENTATIVES. Each party shall (a) appoint a
Service Representative for each Service and (b) identify such Service
Representative on the applicable Transitional Service Schedule. The Service
Representatives for a particular Service shall coordinate the scheduling and
performance of that Service hereunder. Either party may replace any Service
Representative at any time by providing written notice of such replacement to
the other party.
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Section 2.8 INCREASED LEVEL OF SERVICES. Unless otherwise provided in the
applicable Transitional Service Schedule, if Aquila desires an increased level
of service for any particular Service or Additional Service provided by
UtiliCorp hereunder, Aquila must first request such increased level of service
from UtiliCorp. If UtiliCorp agrees to provide the increased level of service
under the same compensation methodology as used for the original Service or
Additional Service (whether as set forth in Section 4.1 below or in the
applicable Transitional Service Schedule), (a) Aquila agrees to accept UtiliCorp
as the provider of such increased level of service and (b) such increased level
of service shall be provided in accordance with the terms of this Agreement and
the applicable Transitional Service Schedule.
ARTICLE III
TERM AND TERMINATION
Unless otherwise provided in the applicable Transitional Service Schedule,
the Services shall commence on the Separation Date and continue for a period of
two years; provided that (a) either party may earlier terminate the provision of
any or all of the Services at any time after the Change of Control Date, upon
providing the other party with 60-days' prior written notice, (b) Aquila may
earlier terminate the provision of any or all of the Services at any time after
the first anniversary of the Separation Date, upon providing UtiliCorp with
60-days' prior written notice, and (c) either party may earlier terminate the
provision of any particular Service in the event that the other party materially
breaches this Agreement or the applicable Transitional Service Schedule and such
breach is not cured within 20 days after the breaching party receives notice
thereof. In the event of the expiration or termination of the provision of one
or more, but less than all, of the Services provided hereunder, this Agreement
shall continue in full force and effect with respect to the provision of
Services that have not expired or been terminated.
ARTICLE IV
COMPENSATION
Section 4.1 CHARGES FOR SERVICES. Unless otherwise provided in the
applicable Transitional Service Schedule, Aquila will reimburse UtiliCorp for
all direct and indirect costs, including out-of-pocket expenses, incurred by
UtiliCorp in providing the Services, plus an administration fee equal to 1% of
such costs. In no event shall the aggregate administration fee for all of the
Services provided hereunder exceed $200,000 in any calendar year.
Section 4.2 PAYMENT TERMS. UtiliCorp shall xxxx Xxxxxx monthly for all
charges pursuant to this Agreement. Such bills shall be accompanied by
reasonable documentation supporting such charges. Aquila shall pay UtiliCorp for
all Services provided hereunder within 15 days after receipt of an invoice
therefor. Late payments shall bear interest at the lesser of 18% per annum or
the maximum rate allowed by law.
Section 4.3 ERROR CORRECTION; TRUE-UPS; ACCOUNTING. The parties shall
reasonably make adjustments to charges payable hereunder as a result of the
discovery of errors or omissions in such charges. In no event shall such
adjustments occur for a particular Service six months or more after the
completion of that Service.
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Section 4.4 PRICING ADJUSTMENTS. In the event of a tax or regulatory audit
adjustment relating to the pricing of any or all Services provided pursuant to
this Agreement in which it is determined by a taxing or regulatory authority
that any of the charges, individually or in combination, did not result in an
arm's-length payment, as determined under applicable standards, then at
UtiliCorp's direction the parties, including any Subcontractor providing
Services hereunder, shall make corresponding adjustments to the charges in
question for such periods, past, present, and future, to the extent necessary to
achieve arm's-length pricing. Any adjustment made pursuant to this Section 4.4
at any time during the term of this Agreement or after termination of this
Agreement shall be reflected in the parties' books and records, and the
resulting underpayment or overpayment shall create a payment obligation subject
to Section 4.2 hereof.
Section 4.5 RIGHT OF SET-OFF. UtiliCorp shall have the right at any time
and from time to time to set off and apply any and all deposits or amounts of
any member of the Aquila Group at any time held, and any and all indebtedness at
any time owing, by any member of the UtiliCorp Group to or for the credit or
account of any member of the Aquila Group against any and all obligations of
Aquila now or hereafter existing or arising under this Agreement, whether or not
UtiliCorp shall have made any demand therefor.
ARTICLE V
GENERAL OBLIGATIONS; STANDARD OF CARE
Section 5.1 PERFORMANCE METRICS: UTILICORP. Unless otherwise provided in
the applicable Transitional Service Schedule, and subject to Sections 2.3, 2.4,
2.5 and any other terms and conditions of this Agreement, UtiliCorp shall use
its reasonable commercial efforts to provide the Services in accordance with its
policies, procedures, and practices in effect immediately prior to the
Separation Date and to exercise the same degree of care and skill as it
exercises in performing similar services for itself.
Section 5.2 DISCLAIMER OF WARRANTIES. EXCEPT AS OTHERWISE SET FORTH
HEREIN, UTILICORP MAKES NO WARRANTIES, EXPRESS, IMPLIED OR STATUTORY, INCLUDING
BUT NOT LIMITED TO THE IMPLIED WARRANTIES OF MERCHANTABILITY OR FITNESS FOR A
PARTICULAR PURPOSE, WITH RESPECT TO THE SERVICES OR OTHER DELIVERABLES PROVIDED
BY IT HEREUNDER.
Section 5.3 PERFORMANCE METRICS: AQUILA. Aquila shall use its reasonable
commercial efforts, in connection with receiving Services, to follow the
policies, procedures, and practices of UtiliCorp in effect immediately prior to
the Separation Date, including by providing all information and documentation
necessary for UtiliCorp to perform the Services as performed by UtiliCorp
immediately prior to the Separation Date and by making available, as reasonably
requested by UtiliCorp, sufficient resources and timely decisions, approvals,
and acceptances in order that UtiliCorp may accomplish its obligations hereunder
in a timely manner. Aquila agrees to grant UtiliCorp personnel access to sites,
systems, and information as necessary for UtiliCorp to perform its obligations
hereunder.
Section 5.4 TRANSITIONAL NATURE OF SERVICES; CHANGES. The parties
acknowledge the transitional nature of the Services and agree that UtiliCorp may
make changes from time to time in the manner of performing the Services if
UtiliCorp makes similar changes in performing similar services for itself and
its Subsidiaries.
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Section 5.5 RESPONSIBILITY FOR ERRORS; DELAYS. UtiliCorp's sole
responsibility to Aquila:
(a) For any errors or omissions in providing the Services shall be
to correct the error or omission at no additional cost or expense to Aquila;
provided, Aquila must promptly advise UtiliCorp of any such error or omission of
which it becomes aware after having used reasonable efforts to detect any such
errors or omissions; and
(b) For any failure to deliver any Service because of
impracticability, shall be to use reasonable efforts, subject to Sections 2.3,
2.4, and 2.5, to resume performing the Services as promptly as reasonably
practicable.
Section 5.6 INDEMNIFICATION BY AQUILA. Aquila shall indemnify and hold
harmless the UtiliCorp Indemnitees from and against any and all Liabilities to
the extent that they relate to, arise out of, or result from the provision of
the Services by UtiliCorp in accordance with this Agreement. In the event of any
Third-Party Claim in respect of which UtiliCorp may be indemnified hereunder,
the parties agree to follow the claims procedures set forth in Section 6.4 of
the Master Separation Agreement.
Section 5.7 GOOD FAITH COOPERATION; CONSENTS. The parties will use good
faith efforts to cooperate with each other in all matters relating to the
provision and receipt of the Services. Such cooperation shall include exchanging
information, performing adjustments, and obtaining all third party consents,
licenses, sublicenses, or approvals necessary to permit each party to perform
its obligations hereunder. The costs of obtaining such third party consents,
licenses, sublicenses, or approvals shall be borne by Aquila.
ARTICLE VI
RELATIONSHIP BETWEEN THE PARTIES
The relationship between the parties established under this Agreement is
that of independent contractors, and neither party shall be deemed an employee,
agent, partner, or joint venturer of or with the other. UtiliCorp will be solely
responsible for the payment of any employment-related taxes, insurance premiums,
or employment benefits in respect of the performance of the Services by
UtiliCorp personnel under this Agreement.
ARTICLE VII
SUBCONTRACTORS
UtiliCorp may engage one or more Subcontractors to perform all or any
portion of UtiliCorp's duties under this Agreement, provided that UtiliCorp
remains responsible for the performance of each such Subcontractor.
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ARTICLE VIII
INTELLECTUAL PROPERTY
Except as otherwise set forth herein, the terms of the Technology
Agreement shall govern the use and ownership of any Technology and Marks (as
defined therein) and any patents, trademarks, or other intellectual property
transferred, licensed, used, or created in connection with the Services or
otherwise under this Agreement.
ARTICLE IX
CONFIDENTIALITY
The terms of Section 4.8 of the Master Separation Agreement shall apply to
any Confidential Information directly or indirectly disclosed under or in
connection with the performance of this Agreement.
ARTICLE X
LIMITATION OF LIABILITY
IN NO EVENT SHALL ANY MEMBER OF THE UTILICORP GROUP OR THE AQUILA GROUP OR
ANY OF THEIR RESPECTIVE DIRECTORS, OFFICERS, EMPLOYEES, AND AGENTS BE LIABLE TO
ANY OTHER MEMBER OF THE UTILICORP GROUP OR THE AQUILA GROUP FOR ANY SPECIAL,
CONSEQUENTIAL, INDIRECT, INCIDENTAL, OR PUNITIVE DAMAGES OR LOST PROFITS,
HOWEVER CAUSED AND ON ANY THEORY OF LIABILITY (INCLUDING NEGLIGENCE) ARISING IN
ANY WAY OUT OF THIS AGREEMENT, IRRESPECTIVE OF WHETHER SUCH PARTY HAS BEEN
ADVISED OF THE POSSIBILITY OF SUCH DAMAGES; PROVIDED, HOWEVER, THAT THE
FOREGOING LIMITATIONS SHALL NOT LIMIT EACH PARTY'S INDEMNIFICATION OBLIGATIONS,
IF ANY, FOR LIABILITIES TO THIRD PARTIES AS SET FORTH IN THIS AGREEMENT.
ARTICLE XI
FORCE MAJEURE
Each party will be excused for any failure or delay in performing any of
its obligations under this Agreement, other than the obligations of Aquila to
make payments to UtiliCorp pursuant to Article IV hereof for Services rendered,
if such failure or delay is caused by Force Majeure.
ARTICLE XII
MISCELLANEOUS
Section 12.1 ENTIRE AGREEMENT. This Agreement, the Master Separation
Agreement, the other Ancillary Agreements, and the Exhibits and Schedules
referenced or attached hereto and thereto (including the Transitional Service
Schedules), constitute the entire agreement between the parties with respect to
the subject matter hereof and thereof and shall supersede all prior written and
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oral and all contemporaneous oral agreements and understandings with respect to
the subject matter hereof and thereof.
Section 12.2 GOVERNING LAW. This Agreement shall be governed and construed
and enforced in accordance with the laws of the State of Missouri as to all
matters, regardless of the laws that might otherwise govern under the principles
of conflicts of laws applicable thereto.
Section 12.3 INTERPRETATION. The headings contained in this Agreement and
the Transitional Service Schedules attached hereto are for reference purposes
only and shall not affect in any way the meaning or interpretation of this
Agreement. When a reference is made in this Agreement to an Article or a
Section, such reference shall be to an Article or Section of this Agreement
unless otherwise indicated.
Section 12.4 NOTICES. Any notice, demand, offer, request, or other
communication required or permitted to be given by either party pursuant to the
terms of this Agreement shall be in writing and shall be deemed effectively
given the earlier of (a) when received, (b) when delivered personally, (c) one
Business Day after being delivered by facsimile (with receipt of appropriate
confirmation), (d) one Business Day after being deposited with a nationally
recognized overnight courier service or (e) four Business Days after being
deposited in the U.S. mail, First Class with postage prepaid, and in each case
addressed to the attention of the other party's General Counsel at the address
of its principal executive office or such other address as a party may request
by notifying the other in writing.
Section 12.5 NONASSIGNABILITY; THIRD-PARTY BENEFICIARIES. Aquila may not,
directly or indirectly, in whole or in part, whether by operation of law or
otherwise, assign or transfer this Agreement or any rights hereunder without
UtiliCorp's prior written consent, and any attempted assignment, transfer or
delegation without such prior written consent shall be voidable at the sole
option of UtiliCorp. This Agreement, including the Transitional Services
Schedules and the other documents referred to herein, shall be binding upon and
inure to the benefit of each party hereto and their respective legal
representatives and permitted successors and assigns, and nothing in this
Agreement, express or implied, is intended to confer upon any other Person any
rights or remedies of any nature whatsoever under or by reason of this
Agreement.
Section 12.6 SEVERABILITY. If any term or other provision of this
Agreement or any of the Transitional Service Schedules is determined by a
nonappealable decision by a court, administrative agency or arbitrator to be
invalid, illegal or incapable of being enforced by any rule of law or public
policy, all other conditions and provisions of this Agreement shall nevertheless
remain in full force and effect so long as the economic or legal substance of
the transactions contemplated hereby is not affected in any manner materially
adverse to either party. Upon such determination that any term or other
provision is invalid, illegal or incapable of being enforced, this Agreement
shall be deemed to be amended, and each party agrees to execute and deliver such
documents and instruments as are reasonably requested by the other party to
evidence such amendment, so as to effect the original intent of the parties as
closely as possible in an acceptable manner to the end that the transactions
contemplated hereby are fulfilled to the fullest extent possible.
Section 12.7 FAILURE OR INDULGENCE NOT WAIVER; REMEDIES CUMULATIVE. No
failure or delay on the part of either party hereto in the exercise of any right
hereunder shall impair such right or be construed to be a waiver of, or
acquiescence in, any breach of any representation, warranty or agreement herein,
nor shall any single or partial exercise of any such right preclude any other or
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further exercise thereof or of any other right. All rights and remedies existing
under this Agreement are cumulative to, and not exclusive of, any rights or
remedies otherwise available.
Section 12.8 AMENDMENT. No change or amendment will be made to this
Agreement (or any Transitional Service Schedule attached hereto) except by an
instrument in writing signed on behalf of each of the parties hereto.
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IN WITNESS WHEREOF, the parties have signed this Transitional Services
Agreement effective as of the date first set forth above.
UTILICORP UNITED INC.
/s/ Xxxxxx X. Xxxxx
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Xxxxxx X. Xxxxx
President and Chief Operating Officer
AQUILA, INC.
/s/ Xxxxx X. Xxxxx
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Xxxxx X. Xxxxx
Chief Executive Officer
SIGNATURE PAGE TO
TRANSITIONAL SERVICES AGREEMENT
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FORM OF TRANSITIONAL SERVICE SCHEDULE
TO
TRANSITIONAL SERVICES AGREEMENT
Upon execution and delivery by the parties, this Transitional Service
Schedule shall be incorporated into that certain Transitional Services
Agreement, dated April 24, 2001, between UtiliCorp and Aquila. All capitalized
terms used but not defined herein shall have the meanings ascribed to such terms
in the Transitional Services Agreement.
1. FUNCTIONAL AREA
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2. DESCRIPTION OF SERVICES
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3. SERVICE REPRESENTATIVES
UtiliCorp: _______________________________
Aquila: _______________________________
4. TERM
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5. COMPENSATION
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6. MISCELLANEOUS
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IN WITNESS WHEREOF, the parties have signed this Transitional Service
Schedule effective as of the latest date set forth below.
UTILICORP UNITED INC.
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Name:
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Title:
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Date:
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AQUILA, INC.
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Name:
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Title:
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Date:
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SIGNATURE PAGE TO
TRANSITIONAL SERVICE SCHEDULE NO. ____
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