Schedule
1
Services
Schedule
2
Historical Reimbursable Costs
TRANSITION SERVICES AGREEMENT
THIS TRANSITION SERVICES AGREEMENT (this “
Agreement
”), dated as of January 12, 2008, is by and among Public
Service Company of New Mexico, a New Mexico corporation (“
Seller
”), PNMR Services Company, a New Mexico corporation (“
PNMRSC ”
and, together with Seller, “ Seller Service
Providers ”), and New Mexico Gas Company, Inc., a
Delaware corporation (“ Buyer
”).
Recitals
WHEREAS, Seller, Buyer and Parent have entered into the
Asset Purchase Agreement, dated the date hereof (the “
Purchase
Agreement ”), under which Seller has agreed to sell
the assets of Seller’s regulated gas operations identified in
the Purchase Agreement (the “ Purchased
Assets ”) and Buyer has agreed to purchase from Seller
the Purchased Assets identified in the Purchase
Agreement;
WHEREAS, Seller is a wholly-owned subsidiary of PNM
Resources, Inc., a New Mexico corporation (“ PNMR ”),
and is an affiliate of PNMRSC, which is also wholly-owned by
PNMR;
WHEREAS, PNMRSC provides and has provided certain of the
Services to PNMR and its Affiliates including Seller;
and
WHEREAS, the Parties are entering into this Agreement to
provide for certain transition services following the Closing under
the Purchase Agreement and as otherwise provided
herein.
NOW, THEREFORE, the Parties hereto agree as
follows:
SECTION 1.
Definitions.
Capitalized
terms used, but not otherwise defined, herein shall have the
meanings given to them in the Purchase Agreement or as
follows:
“
AAA
” is defined in Section 19.
“
Accessories
” shall mean, collectively, all tools, special tools,
equipment, machines, spare parts and other materials required
for the performance by Seller Service Providers of the
Services.
“
Affiliate
” has the meaning set forth in Rule 12b-2 of the General
Rules and Regulations under the Securities Exchange Act of
1934.
“
Albuquerque
Meter Readers ” means the Designated Employees
corresponding to the 28 FTE on Schedule
1 for “ABQ metro Meter
Reading”.
“
Applicable Laws
and Regulations ” shall mean all applicable
federal, state, tribal and local laws, ordinances, rules and
regulations, and all duly promulgated orders and other duly
authorized actions of any Governmental Entity having
jurisdiction over the Parties, their respective Affiliates or
facilities and/or the respective Services they
provide.
“
Business
” means the business of owning, managing and/or
operating the Purchased Assets.
“
Buyer
Representatives ” means, collectively, the
officers, employees, counsel, accountants, financial advisors,
consultants and authorized representatives of
Buyer.
“
Buyer
Indemnified Party ” is defined in Section
10(a).
“
Closing Date
Designated Employees ” is defined in Section
5(c)(i).
“
Contract
Administration Officers ” is defined in Section
7.
“
Departed
Designated Employee ” is defined in Section
5(c)(iii).
“
Designated
Employees ” is defined in Section
5(b).
“
FERC
” means the Federal Energy Regulatory Commission and any
Governmental Entity that succeeds to the jurisdiction now or
hereafter vested in the FERC by Applicable Laws and
Regulations.
“
Force Majeure
Event ” means an act of God; fire, flood,
earthquake, storm, lightning, weather event or similar
disaster or happenstance; a strike, lockout or other
industrial disturbance; an act of the public enemy, sabotage,
war, act of terrorism, insurrection or blockade; riot or other
civil disturbance; epidemic; explosions; or any other similar
event that, in each such case, prevents, in whole or in part,
the performance of a Party’s obligations under this
Agreement, is not reasonably within the control of the
affected Party and which by the exercise of commercially
reasonable efforts the affected Party is unable to overcome or
prevent, provided however that no Party will be required to
settle any labor dispute.
“
Getz
Team ” means Gordon Getz and each of the
following persons: Michele Curry, Dorothy Elza, Dorothy
Hanttula, Hojat (Jeff) Jafari, Betty Stacey-Leaton, Annie
Malone, Stacey McPherson and Peter Taichert.
“
Governmental
Approval ” means any consent, authorization,
registration, license, certificate, permit, grant or approval
of any Governmental Entity that is necessary for the operation
of the Purchased Assets in accordance with Applicable Laws and
Regulations.
“
Governmental
Entity ” means the United States of America and
any other federal, state, tribal, local, or foreign
governmental or regulatory authority, department, agency,
commission, body, court, or other governmental
entity.
“
Interest
Rate ” means, for any date, the lesser of
(a) the per annum rate of interest equal to the prime
lending rate as may from time to time be published in
The Wall
Street Journal under “Money Rates” on such
day (or if not published on such day on the most recent
preceding day on which published), plus two percent (2%) and
(b) the maximum rate permitted by Applicable Law and
Regulations.
“
IT
Assets ” means those applications, hardware and
related systems identified as the “Impacted
Systems/Business Areas” to be set forth in the Migration
Plan.
“
Loss
” is defined in Section 10(a).
“
Management
Transition Team ” is defined in Section
5(a).
“
Migration
Plan ” means that detailed plan for migration of
IT Assets to the Buyer to be developed by the Parties pursuant
to Section 3(a)(iv).
“
Notice of
Claim ” has the meaning set forth in Section
10(a)(iii)(A).
“
Party
” means Seller, PNMRSC, Buyer or their respective
permitted successors or assigns, as the context
requires.
“
Person
” means an individual, partnership, joint venture,
corporation, limited liability company, trust, association or
unincorporated organization, or any Governmental
Entity.
“
Qualifying
Offer ” means an offer of employment by Buyer to
each Designated Employee that complies with Section 7.9(d) of
the Purchase Agreement and is for employment at a location
within 50 miles of the location of such Designated
Employee’s principal place of employment with the
applicable Seller Service Provider on the date on which such
offer of employment is made.
“
Reimbursable
Costs ” means, with respect to the Services, any
and all costs calculated by use of accounting and allocation
methods currently used by Seller Service Providers in
accounting for and allocating service costs to its Affiliates,
incurred or charged by Seller Service Providers with respect
to the provision of Services pursuant to this Agreement plus
Set-Up Costs to the extent contemplated in Section 3(a)(v);
for the avoidance of doubt, such costs shall include any price
increase or change in terms or conditions imposed by any third
party vendors under their contracts with Seller Service
Providers (or their respective Affiliates). The
Reimbursable Costs for each Service may not include any
officer or management oversight costs that exceed 24% of the
non-oversight costs associated with such
Service. Reimbursable Costs shall not include any
Set-Up Costs other than as contemplated by Section 3(a)(v) or
any costs and expenses incurred in connection with the
development and implementation of the Migration Plan,
including the provision and extraction of data as contemplated
by Section 3(a)(iv)(B). Buyer shall be entitled to
see Seller Service Providers’ itemized invoices of costs
prior to payment due dates. Reimbursable Costs
shall not include costs for Services that are not provided to
Buyer for any reason, including any Force Majeure Event, other
than Buyer’s refusal to receive such Services not in
compliance with the provisions of this
Agreement. With respect to the Services and subject
to the prior consent of Buyer, up to $3,500,000 of costs
incurred by Seller Service Providers with respect to obtaining
any applicable license rights may be included as Reimbursable
Costs, and any costs above $3,500,000 will be shared equally
between Buyer and Seller Service
Providers. Further, Buyer will reimburse Seller for
New Mexico gross receipts tax incurred by the Seller Service
Providers with respect to the Services. By way of
example, Schedule
2 sets forth the historical amount of Reimbursable
Costs for the Services for the period from January 1,
2007 through August 31, 2007. These costs are
presented in Schedule
2 for informational purposes only and will change
subsequent to the date of this Agreement to reflect actual
Reimbursable Costs incurred by Seller Service Providers in
connection with the provisions of the Services under this
Agreement as of subsequent invoice dates.
“
Seller
Representatives ” means, collectively, the
officers, employees, counsel, accountants, financial advisors,
consultants and authorized representatives of Seller Service
Providers or their Affiliates.
“
Seller Service
Provider ” means each of Seller and
PNMRSC.
“
Seller Service
Providers Indemnified Party ” is defined in
Section 10(a).
“
Seller
System ” means the systems and equipment owned or
leased by Seller and used by Seller from December 1, 2007
through the Closing Date in the conduct of the
Business.
“
Service
Period ” means the term beginning immediately
following the Closing on the Closing Date and ending at 12:00
midnight prevailing Mountain Time twelve (12) months from the
Closing Date, subject to early termination, in whole or in
part, in accordance with Section 4; provided
, that such term shall, unless earlier terminated in
accordance with Section 4, be automatically extended for
successive six month renewal terms until such time as Buyer or
Seller Service Providers, as the case may be, provides to such
other Party or Parties written notice of non-renewal no less
than thirty (30) days prior to the expiration of the initial
or then-current term of this Agreement.
“
Services
” has the meaning set forth in Section
3(a)(i).
“
Service
Termination ” means the termination of, or Buyer
ceasing to receive, a Service for any reason during the
Service Period, whether by means of early termination of a
Service pursuant to Section 4, the expiration and non-renewal
of a Service Term, the expiration and non-renewal of the
Service Period, or otherwise.
“
Service
Termination Date Designated Employees ” is
defined in Section 5(c)(ii).
“
Set-Up
Costs ” is defined in Section
3(a)(v).
“
Taxes
” means all taxes, charges, fees, levies, penalties, or
other assessments imposed by any foreign or United States
federal, state, tribal or local Governmental Entity, including
income, excise, property, sales, gross receipts, compensating,
transfer, franchise, license, payroll, withholding, social
security, or other taxes (including any escheat or
unclaimed property obligations), including any interest,
penalties, or additions attributable thereto.
“
Unwind
Costs ” shall be Termination Costs plus any
applicable severance costs relating to termination of
employees contemplated to be paid pursuant to Section
5(c)(iv). “ Termination
Costs ” means all of Seller Service
Providers’ reasonable costs associated with closing out
its performance of the Service or Services under this
Agreement upon termination or non-renewal of any Service Term
or any reduction in the Services pursuant to Section 4,
contractually required termination payments to subcontractors,
rents and lease termination costs associated with facilities
and leased property of Seller Service Providers and their
subcontractors used to support their performance under this
Agreement, termination fees for utilities and data services,
the costs of Accessories and other capital expenditures or
items of Seller Service Providers and their subcontractors
dedicated to performance under this Agreement (which costs to
be paid as Unwind Costs shall be decreased by the amount of
such costs without duplication previously recovered through
Buyer’s payment of Reimbursable Cost under this
Agreement and by the assumed remaining value allocable to such
Accessories, capital expenditures or items, insofar as not
transferred to Buyer), and termination or modification of
software license and maintenance arrangements with respect to
software and office equipment used in providing the Services
under this Agreement, in all cases excluding severance costs
relating to termination of employees. Aggregate Termination
Costs shall be no greater than $500,000.
SECTION 2.
Interpretation.
In
this Agreement, unless a clear contrary intention
appears:
(a)
reference
to a Party includes such Party’s successors and assigns but,
if applicable, only if such successors and assigns are permitted by
this Agreement, and reference to a Party in a particular capacity
excludes such Party in any other capacity;
(b)
reference
to any gender includes the other gender;
(c)
reference
to any agreement (including this Agreement), document or
instrument means such agreement, document or instrument as amended
or modified and in effect from time to time in accordance with the
terms thereof and, if applicable, the terms hereof;
(d)
reference
to any Article, Section or Schedule means such Article, Section or
Schedule to this Agreement, and references in any Article, Section,
Schedule or definition to any clause means such clause of such
Article, Section, Schedule or definition;
(e)
“hereunder”,
“hereof”, “hereto” and words of similar
import are references to this Agreement as a whole and not to any
particular Section or other provision hereof or
thereof;
(f)
“including” (and
with correlative meaning “include”) means including
without limiting the generality of any description preceding such
term; and
(g)
relative
to the determination of any period of time, “from”
means “from and including,” “to” means
“to but excluding,” and “through” means
“through and including.”
SECTION 3.
Services to be Provided.
(a)
Services
(i)
Services . Subject to Applicable Laws and
Regulations and the terms and conditions of this Agreement, Seller
Service Providers shall provide or cause to be provided to Buyer
during the Service Period certain services (as described on
Schedule
1 attached hereto which is incorporated herein by reference)
(collectively, the “ Services
” and individually a “ Service
”). In addition to identifying the Services which shall be
provided to Buyer, Schedule 1
sets forth, among other items, (A) the initial term for the
provision of each of the Services (with respect to each Service, a
“ Service Term
”) and (B) the number of employees designated by Seller
Service Providers to perform each Service. Seller Service Providers
will provide the applicable Service for one Service Term, unless
Buyer provides thirty (30) days advance notice requesting an
additional Service Term; provided ,
that any additional Service Term may not extend beyond the Service
Period and shall be subject to Seller Service Providers’
ability to terminate Services in accordance with Section 4(c).
Buyer will pay Seller’s Reimbursable Costs with respect to
the Services actually delivered to Buyer.
(ii)
Performance of Services . In connection with the
performance of Services, Seller Service Providers may:
(A) subcontract with a non-Affiliate and/or personnel of a
non-Affiliate to perform any portion of the Services to be
performed hereunder; and (B) utilize personnel who are
employees of Affiliates of Seller Service Providers or may
subcontract work to Affiliates of Seller Service Providers;
provided ,
that all such personnel and subcontractors utilized by Seller
Service Providers shall (1) be fully qualified to perform the
applicable Services under this Agreement in accordance with all
Applicable Laws and Regulations, and the other terms and conditions
of this Agreement, and (2) perform or provide such Services
pursuant to the same standard of care and timeliness and consistent
with the other material terms and conditions applicable to Seller
Service Providers under the provisions of this
Agreement. Seller Service Providers shall include in
their Reimbursable Costs no more than the actual costs Seller
Service Providers incur in connection with such subcontracted or
utilized personnel performing the Services
hereunder. Seller Service Providers shall not include in
their Reimbursable Costs charges for any Services that are carried
out by Buyer’s subcontractor or Affiliates to the extent such
Persons are acting in a subcontracting capacity for
Buyer.
(iii)
Scope of Services . During the Service Period,
Seller Service Providers and Buyer agree to consult with each other
at regular intervals and at such times as may be reasonably
requested by the other Party with respect to the performance by
Seller Service Providers of the Services, the continued
desirability of Seller Service Providers providing specific
Services, the timing of the early termination of any Service, the
occurrence of any events or circumstances negatively affecting
Seller Service Providers’ continued ability to provide any
specific Service and other matters specifically relating to, or
impacting, the provision of the Services.
(iv)
Migration Plan . Seller Service Providers and
Buyer shall perform their respective obligations as set forth in
the Migration Plan. The Parties shall cooperate with
each other to develop a mutually acceptable Migration Plan no later
than six (6) months following the date of this Agreement as
follows:
A.
Buyer
and Seller Service Providers will provide the appropriate personnel
for, and will start, the development of the Migration Plan within
thirty (30) days following the date of this
Agreement. In connection therewith, Seller Service
Providers will demonstrate and discuss, and Buyer will review and
select, systems, processes and software applications to replace any
of the foregoing that are used by Seller in connection with the
Business but which do not constitute Purchased Assets.
B.
The
Migration Plan will state that Seller Service Providers will
provide Buyer with (1) test data for the migration of human
resources systems, accounting systems, customer information and
billing systems, and work management systems not later than thirty
(30) days prior to Closing, (2) a complete set of such foregoing
data in connection with the Business for human resources systems
and accounting systems within two (2) Business Days following
Closing and (3) a complete set of such data in connection with the
Business for customer information and billing systems and work
management systems within thirty (30) days following
Closing.
C.
Buyer
and Seller Service Providers will each pay their costs and expenses
incurred in connection with the development and implementation of
the Migration Plan, including the provision and extraction of data
as contemplated by Section 3(a)(iv)(B).
(v)
Set-Up Costs . Within six (6) months following
the date of this Agreement, the Parties shall develop a mutually
acceptable budget that details the estimated preparation and set-up
costs and expenses that will be incurred by Seller Service
Providers in connection with ensuring that Seller Service Provider
systems will permit Seller Service Providers to perform the
Services as of the date the Service Period commences (the “
Set-Up
Costs ”). Set-Up Costs incurred by Seller
Service Providers shall be Reimbursable Costs to the extent such
Set-Up Costs do not exceed the levels set forth in the budget
contemplated in the foregoing sentence (as such amounts may be
adjusted by mutually approved change
orders). Set-Up Costs (A) shall not include any officer
or management oversight costs and (B) shall not include any costs
and expenses incurred in connection with the development and
implementation of the Migration Plan, including the provision and
extraction of data as contemplated by Section
3(a)(iv)(B).
(vi)
Management Obligation . To the extent
commercially reasonable, each Seller Service Provider shall manage
the provision of its Services in such a way as to minimize Unwind
Costs associated with the termination of such
Services.
(b)
Seller Service Provider Covenants .
(i)
Seller Service Providers’ Ability to Provide Services
. Seller Service Providers shall maintain sufficient
personnel and facilities to provide the Services at all times in
accordance with this Agreement.
(ii)
Standards for the Provision of Services . The
Services will be performed in a commercially reasonable manner and
with at least the same standard of care and timeliness that the
Services were provided to the Business during the period between
December 1, 2007 and the Closing Date. EXCEPT AS SET
FORTH IN THIS SECTION 3(b)(ii), SELLER SERVICE PROVIDERS MAKE NO
REPRESENTATION, WARRANTY OR GUARANTY, EXPRESS OR IMPLIED, OF ANY
KIND CONCERNING THE SERVICES AND ANY RESULTS OR WORK PRODUCT AND
SPECIFICALLY MAKE NO WARRANTY OF MERCHANTABILITY OR FITNESS FOR A
PARTICULAR PURPOSE, AND NONE SHALL BE IMPLIED. ALL OTHER
REPRESENTATIONS, WARRANTIES OR GUARANTEES, WRITTEN OR ORAL, EXPRESS
OR IMPLIED IN FACT OR IN LAW, AND WHETHER OR NOT BASED ON STATUTE
ARE EXCLUDED.
(c)
Certain Covenants . The Parties agree to the
following additional covenants:
(i)
General . Systems, personnel, infrastructure and
applications of Seller Service Providers used by and under the
control of Seller Service Providers to perform the Services
(excluding any of the foregoing that constitute Purchased Assets),
shall be managed by Seller Service Providers.
(ii)
Business Data . Seller Service Providers shall
have the right to move any data and processing, if necessary,
within functionally equivalent equipment owned or leased by Seller
Service Providers so long as such movement does not adversely
impact the performance of the Services.
(iii)
Consents . Seller Service Providers in
cooperation with Buyer shall use commercially reasonable efforts to
obtain appropriate vendor licenses or consents for Seller Service
Providers to use for the benefit of Buyer as part of the Services
any Seller System and software currently utilized and necessary to
conduct the Business.
(iv)
Access . Buyer shall grant Seller Service
Providers access to its computer and other equipment, hardware,
software, employees and premises, including parking space and
workspace, as reasonably necessary for Seller Service Providers to
provide the Services. Buyer will permit each Seller
Service Provider’s employees and contractors such access to
and egress from locations and facilities owned or controlled by
Buyer and records and materials located thereon or therein as are
reasonably necessary or appropriate to perform the Services as well
as a suitable work place at such locations to the extent so
necessary or appropriate.
(v)
Seller Service Providers’ Records . To the
extent allowed by Applicable Law and Regulations, Buyer and its
duly authorized representatives may inspect, review, copy and
utilize at reasonable times and during regular business hours,
Seller Service Providers’ files, books, records, accounts,
servicing practices, policies and procedures and quality control
policies and procedures relating to the Services. Seller
Service Providers will maintain complete and accurate records
relating to the Services in accordance with Seller Service
Providers’ standard practices and for so long as required for
tax and other regulatory purposes.
(vi)
Records Retention . Each Party shall retain all
records relating to this Agreement and for so long as required by
any Governmental Entity having jurisdiction.
(vii)
Cooperation . The Parties will cooperate in order
to facilitate the provision and receipt of the
Services. The Parties acknowledge that the Services are
dependent on such cooperation.
(d)
No Breach . Notwithstanding anything to the
contrary herein, no Party shall be deemed to be in breach of its
obligations hereunder by reason of any of the
following: (i) the failure of a Party or any third
party to grant its consent to any matter requiring such consent
prior to such other Party’s performance of its obligations
with respect to such matter; (ii) the failure of a Party to
provide funds which are necessary for such other Party to perform
its obligations with respect to such matter; (iii) any acts of
a Seller Service Provider based on reliance upon a direction of
Buyer or a Buyer Representative; or (iv) any acts of Buyer
based on reliance upon a direction of a Seller Service Provider or
a Seller Representative.
SECTION 4.
Term and Termination.
(a)
Term . The term of this Agreement shall begin on
the Closing Date and continue through the Service
Period.
(b)
Option to Terminate Services Provided by Other Party
. Unless otherwise provided for hereunder, Buyer may
elect, by giving written notice to a Seller Service Provider
forty-five (45) days in advance (“ Service Termination
Notice ”), to terminate the provision by such Seller
Service Provider of all or any of the Services that it provides to
Buyer hereunder, or to have all or any of such Services performed
by its own employees or any other third party retained by Buyer
prior to the expiration of the Service Period; provided ,
however , that
for Buyer to effect the termination of a Service by any means
(including any termination or nonrenewal of this Agreement), Buyer
must pay to Seller Service Provider providing such Service the
applicable Unwind Costs incurred by, or deemed to be incurred by,
such Seller Service Provider in respect of such termination as well
as any other amounts due under this Agreement, including
Reimbursable Costs with respect to such Service, with any accrued
interest at the Interest Rate; provided ,
however , that
Buyer has no obligation to pay Seller Service Provider providing
such Service the applicable Unwind Costs for the termination of
such Service that occurs as a result of Seller Service
Providers’ breach under this Agreement.
(c)
Seller Service Providers Option to Terminate Services
. Seller Service Providers may elect, by giving
sixty (60) days prior written notice to Buyer, to
terminate the provision by any Seller Service Provider of all or
any of Services effective as of the expiration of the initial term
or any renewal term of this Agreement. Upon such termination of
Services under this Section 4(c), Buyer shall pay to the Seller
Service Provider providing such terminated Service the applicable
Unwind Cost incurred by, or deemed to be incurred by, such Seller
Service Provider in respect of such termination as well as any
other amounts due under this Agreement, including Reimbursable
Costs with respect to such Service, with any accrued interest at
the Interest Rate.
(d)
Right to Suspend Performance or to Terminate the Agreement
. Each Seller Service Provider shall have the right to
suspend the performance of its obligations under this Agreement in
the event of Buyer’s failure to make payments due, owing and
not disputed in good faith pursuant to Section 6 hereof to
such Seller Service Provider as required under this Agreement, and
such failure has not been cured within five (5) days
after written notice of such failure to Buyer. If Buyer
cures such payment default within such five (5) day cure period,
such Seller Service Provider shall not be entitled to suspend
performance under this Agreement thereafter. The Seller
Service Provider shall have the right to terminate this Agreement
with respect to its provision of Services in the event such failure
to make payment has not been cured within
thirty (30) days after written notice of such failure to
Buyer and Buyer is not disputing the payment in good faith. In the
case of any advance termination by any Seller Service Provider due
to Buyer’s failure to make payments owed to such Seller
Service Provider under this Section 4(d), Buyer must pay to
such Seller Service Provider providing such Service the applicable
Unwind Costs incurred by, or deemed to be incurred by, such Seller
Service Provider in respect of such termination as well as any
other amounts due under this Agreement, including Reimbursable
Costs with respect to such Service, with any accrued interest at
the Interest Rate; provided ,
however , that
Buyer has no obligation to pay such Seller Service Provider
providing such Service the applicable Unwind Costs for the
termination of such Service that occurs as a result of Seller
Service Providers’ breach under this Agreement.
(e)
Termination for Breach of Standards for Services
. If Buyer reasonably believes a Seller Service Provider
has materially failed to meet the standards for the provision of
Services as set forth in this Agreement, then Buyer shall give ten
(10) Business Days notice in writing to such Seller Service
Provider specifying the failure to meet the standards for the
provision of Services. If the deficient Service has not
been corrected after ten (10) Business Days, then Buyer shall
have the right to terminate, in good faith, any Services that are
performed below the standards for the provision of Services as
required hereunder. No Unwind Costs will be payable with
respect to any deficient Service terminated by Buyer under this
Section 4(e).
(f)
Service Termination . For the avoidance of doubt and except
as otherwise expressly agreed to by the Parties in this Agreement,
as of the effective date of the occurrence of any Service
Termination, Buyer shall pay to Seller Service Providers the
applicable Unwind Costs incurred by, or deemed to be incurred by,
such Seller Service Provider in respect of such Service Termination
as well as well as any other amounts due under this Agreement,
including Reimbursable Costs with respect to the applicable
terminated Service, with any accrued interest at the Interest
Rate.
(g)
Effect of Termination . Upon termination of the
provision of Services under this Agreement, Seller Service
Providers shall transfer to Buyer all materials and supplies
procured in connection with the provision of such Services, the
cost of which has been included in Reimbursable Costs already paid
by Buyer for such Services.
(h)
Access . Buyer shall grant Seller Service
Providers and their respective representatives access to the
facilities of Buyer or its subsidiaries, as the case may be, for a
period of thirty (30) days after the expiration or
termination of this Agreement so that each Seller Service Provider
may demobilize its work force, including the removal of its
personal property that was brought to such facilities by the Seller
Service Provider to provide Services.
(i)
Survival . The Parties’ obligations, other
than the obligation to provide Services, shall survive the
expiration, nonrenewal or termination of this Agreement and the
indemnification obligations shall survive as provided in under
Section 10.
SECTION 5.
Buyer Employment Obligations.
(a)
Within
ten (10) days following the date of this Agreement, Seller Service
Providers and Buyer shall work together in good faith to designate
a management transition team (the “ Management Transition
Team ”) comprised of (i) a “ Seller Service
Provider Group ” that will be headed by the Chief
Financial Officer of Seller (the “ Seller
Chairman ”) and will include certain personnel of
Seller Service Providers with relevant expertise and knowledge
regarding the scope of, and qualifications necessary to perform,
the Central or Shared Function services currently provided to the
Business which Buyer will provide itself following Closing or which
Buyer has designated on Schedule 1
that it will receive as Services under this Agreement and (ii) a
“ Buyer Group
” that will be headed by the Chief Executive Officer of Buyer
(the “ Buyer Chairman
”) and will include certain personnel of Buyer with
operational experience in the gas business.
(b)
During
the sixty (60) day period following the date of this Agreement, the
Management Transition Team shall work together in good faith to
update Schedule 1 (i)
to identify by name 275 Seller Service Provider employees who will
provide for effective Central or Shared Functions services to the
Business who are at such time engaged in providing the Central or
Shared Functions services to the Business specified on Schedule 1 and
(ii) to include for each such identified employee, the estimated
severance costs attributable to such employee. Subject
to the provisions of Section 5(c), Buyer, at its sole discretion,
will provide Qualifying Offers of employment to each of the
identified 275 Seller Service Provider employees identified on
Schedule
1 either at Closing or upon the occurrence of a Service
Termination, as applicable. In connection with the
update of Schedule 1 ,
Seller Service Provider Group will provide Buyer Group with
employment history, salary history and estimated severance costs
for each such employee. Schedule 1 as
updated in accordance with this Section 5(c) shall include each
member of the Getz Team. The 275 Seller Service Provider
employees so designated by the Management Transition Team on
updated Schedule 1
shall be referred to herein as the “ Designated
Employees .” The Parties agree that in
connection with any meeting of the Management Transition Team,
whether in person, via conference call or otherwise, prior written
notification of such meeting and the subject matter relating
thereto shall be provided to all members of the Management
Transition Team no later than (2) Business Days prior to the
occurrence of such meeting. Each of the Seller Chairman
and the Buyer Chairman and/or their respective designees shall have
the right to attend each Management Transition Team
meeting.
(c)
Buyer
shall make written Qualifying Offers of employment to each
Designated Employee in accordance with this Section
5(c).
(i)
Subject
to the last two sentences of this Section 5(c)(i), thirty (30) days
prior to the Closing Date, Buyer shall make written Qualifying
Offers of employment to those Designated Employees (“
Closing
Date Designated Employees ”) to whom Buyer has
indicated on Schedule 1
that it will offer employment at the Closing; provided ,
that Buyer shall not be required to make an offer of employment to
any Designated Employee unless such Designated Employee is
continuing to perform the applicable function (including the
applicable Service) specified for such Designated Employee on
Schedule
1 as of the Closing Date; provided ,
further , that
Buyer may also condition an offer of employment to a Designated
Employee on such Designated Employee continuing to perform the
function (including the applicable Service) specified for such
Designated Employee on Schedule 1 as
of the Closing Date. Buyer shall be responsible for the
severance costs of any Closing Date Designated Employee to whom
Buyer does not make an offer of employment pursuant to this Section
5(c)(i); provided ,
however , that
Buyer shall not be responsible for the severance costs of any
Albuquerque Meter Reader to whom Buyer does not make an offer of
employment pursuant to this Section 5(c)(i) if as of the date such
offer of employment otherwise should have become effective, Buyer
and Seller Service Providers have entered into arrangements for the
provision by Seller Service Providers to Buyer of meter-reading
services for a term ending no earlier than the second anniversary
of the Closing Date. To the extent Buyer does not make
an offer of employment pursuant to this Section 5(c)(i), Buyer
shall (subject to the proviso in the preceding sentence) pay to the
applicable Seller Service Provider on the Closing Date the amount
of actual severance costs attributable to those Closing Date
Designated Employees who are not offered employment pursuant to
this Section 5(c)(i).
(ii)
Subject
to the last two sentences of this Section 5(c)(ii), at least thirty
(30) days prior to the occurrence of a Service Termination (or upon
the date of the occurrence of a Service Termination under Sections
4(d) or (e)), Buyer shall make written Qualifying Offers of
employment as of the effective date (“ Service Termination
Date ”) of such Service Termination to those
Designated Employees (“ Service Termination
Date Designated Employees ”) that Buyer has indicated
on Schedule 1
that it will offer employment to as of a particular Service
Termination Date; provided ,
that Buyer shall not be required to make an offer of employment to
any Designated Employee unless such Designated Employee is
continuing to perform the function (including the applicable
Service) specified for such Designated Employee on Schedule 1 as
of such
Service
Termination Date; provided ,
further , that
Buyer may also condition an offer of employment to a Designated
Employee on such Designated Employee continuing to perform the
function (including the applicable Service) specified for such
Designated Employee on Schedule 1 as
of such Service Termination Date. Buyer shall be
responsible for the severance costs of any Service Termination Date
Designated Employee to whom Buyer does not make an offer of
employment pursuant to this Section 5(c)(ii); provided ,
however , that
Buyer shall not be responsible for the severance costs of any
Albuquerque Meter Reader to whom Buyer does not make an offer of
employment pursuant to this Section 5(c)(ii) if as of the date such
offer of employment otherwise should have become effective, Buyer
and Seller Service Providers have entered into arrangements for the
provision by Seller Service Providers to Buyer of meter-reading
services for a term ending no earlier than the second anniversary
of the Closing Date. To the extent Buyer does not make
an offer of employment pursuant to this Section 5(c)(ii), Buyer
shall (sub
