_____________________________________________________________
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
_______________________
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
October 28, 1997
(Date of Report)
ONSITE ENERGY CORPORATION
(Exact name of registrant as specified in its charter)
STATE OF DELAWARE [1-12738] [33-0576371]
(State or other (Commission (IRS Employer
jurisdiction of File Number) Identification Number)
incorporation)
701 Palomar Airport Road, Suite 200, Carlsbad, California 92009
Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: 760-931-2400
1
Item 2. ACQUISITION OR DISPOSITION OF ASSETS.
Item 5. OTHER EVENTS.
On October 28, 1997, Onsite Energy Corporation, a Delaware corporation
("Onsite" or the "Company"), entered into a "Plan And Agreement of
Reorganization" (the "Reorganization Agreement") with Westar Business
Services, Inc., a Kansas corporation ("WBS"), Westar Energy, Inc. ("Westar
Energy"), a Kansas corporation and sole shareholder of WBS and Westar
Capital, Inc., a Kansas corporation ("Westar Capital").
Pursuant to the Reorganization Agreement, the parties effected a "tax
free" exchange under Section 368(a)(1)(B) of the Internal Revenue Code of
1986, as amended (the "Reorganization"). Specifically, Onsite acquired
100% of WBS's issued and outstanding capital stock, consisting solely of
Common Stock, no par value, in exchange for One Million Seven Hundred
Thousand (1,700,000) shares of Onsite's Class A Common Stock, par value
$0.001 per share. An additional 800,000 shares of Onsite Class A Common
Stock will be delivered to Westar Capital in the event that WBS has
executed certain additional business contracts. The number of shares
issued was determined through negotiations between the parties. As a
result of the Reorganization, WBS is now a wholly-owned subsidiary of
Onsite.
WBS provides performance contracting services, utility services and
industrial water services in the states of Kansas, Missouri and Oklahoma.
The acquisition provides Onsite with the ability to develop new markets in
the mid-west and other areas.
In connection with the Reorganization, Western Resources, Inc., and
its subsidiaries have agreed not to compete with Onsite in certain business
services for five years in fifteen states.
The foregoing description of the Reorganization Agreement is a summary
of certain of its provisions and reference is made to a copy of the
Reorganization Agreement which is attached hereto as Exhibit 2.1 and
incorporated herein by reference for all of its terms and conditions.
In a related transaction, on October 28, 1997, Onsite entered into a
Stock Subscription Agreement (the "Stock Agreement") with Westar Capital.
Pursuant to the Stock Agreement, Onsite has made a private placement of Two
Million (2,000,000) shares of Onsite's Class A Common Stock at Fifty Cents
($.50) per share and Two Hundred Thousand (200,000) shares of Onsite's
newly created Series C Convertible Preferred Stock at Five Dollars ($5.00)
per share. Each share of Onsite's Series C Convertible Preferred Stock is
convertible into five shares on Onsite's Class A Common Stock and earns a
dividend of 9.75% per annum.
Under the Stock Agreement, between June 30, 1998 and December 31,
1998, Westar Capital will also have the right to purchase up to two million
(2,000,000) additional shares of Onsite's Class A Common Stock at market
3
price, but not below $1.00 or above $2.00 per share. Further, Onsite may
require further investment in Series C Convertible Preferred Stock by
Westar Capital of up to two million dollars ($2,000,000) before the end of
1998.
Further, as part of the Stock Agreement, Westar Capital will limit its
equity ownership to 45% of the outstanding shares of the Class A Common
Stock on a fully diluted basis for a period of five years, unless it
receives the Company's permission to exceed such limit.
Pursuant to the terms of the Stock Agreement, Westar Capital also has
preemptive rights to purchase its pro rata share of any equity offerings of
the Company on the same terms, limited to the 45% limit set forth above.
In the case of certain acquisitions by the Company of another corporation
or substantially all of its assets, the exercise price for the pre-emption
rights shall be the average trading price of Onsite's Class A Common Stock.
For any such acquisitions prior to December 31, 1998, the exercise price
shall be at least $1.00, but not more than $2.00.
Additionally, Westar Capital has the right to initially elect one
director to Onsite's board and has selected Rita A. Sharpe as director.
Ms. Sharpe is President of Westar Capital and Westar Business Services, and
has twenty years of experience in the electric utility and related
industries.
The foregoing description of the Stock Subscription Agreement is a
summary of certain of its provisions and reference is made to a copy of the
Stock Subscription Agreement which is attached hereto as Exhibit 10.1 and
incorporated herein by reference for all of its terms and conditions.
Further, certain principal Onsite shareholders have entered into an
agreement with Westar Capital (the "Stockholders Agreement") to ensure that
Westar Capital will receive representation on Onsite's board of directors
in proportion to its ownership.
The Class A Common Stock purchased by Westar Capital (including the
Class A Common Stock underlying the Series C Preferred Stock) is not
registered under the Securities Act of 1933, as amended. The Company and
Westar Capital have entered into a Registration Rights Agreement granting
Westar Capital three demand registrations and unlimited piggy-back
registration rights with respects to the Class A Common Stock (including
the Class A Common Stock underlying the Series C Preferred Stock).
Pursuant to the Certificate of Designations for the Series C Preferred
Stock, if, at any time four or more quarterly dividends, whether or not
consecutive, on the Series C Convertible Preferred Stock shall be in
default, in whole or in part, the holders of the Series C Convertible
Preferred Stock shall be entitled to elect the smallest number of Directors
as would constitute a majority of the Board of Directors, and the holders
4
of the Class A Common Stock as a class shall be entitled to elect the
remaining Directors. Such voting rights shall continue until all dividends
accrued on the Series C Convertible Preferred Stock shall have been paid or
set apart for payment, at which time such voting power shall cease until a
like default in payment recurs.
Each share of Preferred Stock is convertible at any time at the option
of the holder into five (5) fully paid and nonassessable share of Class A
Common Stock. The Company may require conversion if, at any time after six
months from the date of issuance but before two years from the date of
issuance of the Preferred Stock, the Average Closing Price of the Class A
Common Stock of the Company exceeds $2.00 per share. However, in that
event, the Company will be required to pay that amount which the Preferred
Stock would have earned in dividends had the conversion not been forced.
The foregoing description of the Registration Rights Agreement and
Certificate of Designation are a summary of certain of their provisions and
reference is made to a copy of such Agreements which are attached hereto as
Exhibit 10.2 and 4.1, respectively.
Westar Capital now beneficially owns approximately thirty percent
(30%) of the outstanding shares of Onsite.
Item 7. FINANCIAL STATEMENTS AND EXHIBITS.
a. FINANCIAL STATEMENTS OF BUSINESSES ACQUIRED.
(1) Financial statements of Westar Business Services, Inc. will
be filed by amendment within 60 days.
b. EXHIBITS.
2.1 Copy of the Plan and Agreement of Reorganization
4.1 Copy of the Certificate of Designation of the Rights,
Privileges and Preferences of the Series C Convertible
Preferred Stock of Onsite Energy Corporation
10.1 Copy of the Stock Subscription Agreement
10.2 Copy of the Registration Rights Agreement
5
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of
1934, the registrant has duly caused this report to be signed on its behalf
by the undersigned hereunto duly authorized.
Dated: November 11, 1997
ONSITE ENERGY CORPORATION
By: RICHARD T. SPERBERG
Richard T. Sperberg
President