<PAGE>
As filed with the Securities and Exchange Commission on November 15, 1999
Registration No. 333-______
================================================================================
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
-------------------------
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
-------------------------
QUANTA SERVICES, INC.
(Exact name of registrant as specified in its charter)
-------------------------
<TABLE>
<CAPTION>
<S> <C> <C>
Delaware 1731 74-2851603
(State or other jurisdiction (Primary Standard Industrial (I.R.S. Employer
of incorporation or organization) Classification Code Number) Identification No.)
</TABLE>
-------------------------
Brad Eastman
Vice President, Secretary and General Counsel
1360 Post Oak Boulevard, Suite 2100
Houston, Texas 77056
(713) 629-7600
(Name, address, including zip code, and telephone number, including area code,
of registrant's principal executive offices and agent for service)
-------------------------
Approximate date of commencement of proposed sale to the public: From time
to time after this registration statement becomes effective.
If the only securities being registered on this form are being offered
pursuant to dividend or interest reinvestment plans, check the following box.[ ]
If any of the securities being registered on this form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or interest
reinvestment plans, check the following box.[X]
If this form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, check the following box and
list the Securities Act registration statement number of the earlier effective
registration statement for the same offering.[ ]
If this form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering.[ ]
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box.[ ]
-------------------------
<PAGE>
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
==============================================================================================================================
PROPOSED PROPOSED AMOUNT
AMOUNT MAXIMUM MAXIMUM OF
TITLE OF EACH CLASS OF TO BE OFFERING PRICE AGGREGATE REGISTRATION
SECURITIES TO BE REGISTERED REGISTERED PER SHARE (1) OFFERING PRICE FEE
- ------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Stock 2,034,849shares $31 $63,080,314 $17,536.33
=============================================================================================================================
</TABLE>
(1) Pursuant to Rule 457(c), the offering price and registration fee are
computed on the basis of the average of the high and low prices of the
Common Stock, as reported by the New York Stock Exchange on November 11,
1999.
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL
FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF
THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(A),
MAY DETERMINE.
================================================================================
<PAGE>
********************************************************************************
* The information in this prospectus is not complete and may be changed. *
* The selling stockholders may not sell these securities until the *
* registration statement filed with the Securities and Exchange *
* Commission is effective. This prospectus is not an offer to sell these *
* securities and it is not soliciting an offer to buy these securities *
* in any state where the offer or sale is not permitted. *
********************************************************************************
Subject to Completion
November 15, 1999
2,034,849 Shares
[Logo of Quanta appears here]
Common Stock
The 2,034,849 shares of our common stock being offered by this prospectus
are being offered by the selling stockholder listed under the heading "Selling
Stockholder" on page 12. The shares of common stock will be sold by the selling
stockholder from time to time.
We will not receive any of the proceeds from the sale of the common stock
by the selling stockholder. Our common stock is traded on the New York Stock
Exchange under the symbol "PWR." On November 11, 1999, the last reported sale
price for the common stock on the New York Stock Exchange was $30.9375 per
share.
INVESTING IN OUR COMMON STOCK INVOLVES RISKS WHICH ARE DESCRIBED IN THE SECTION
ENTITLED "RISK FACTORS" BEGINNING ON PAGE 5.
Neither the Securities and Exchange Commission nor any state securities
commission has approved or disapproved of these securities or passed upon the
accuracy or adequacy of this prospectus. Any representation to the contrary is a
criminal offense.
______________________________
The date of this prospectus is ____________, 1999
<PAGE>
You should rely only on the information contained in this prospectus. We
have not authorized any other person to provide you with different information.
If anyone provides you with different or inconsistent information, you should
not rely on it. We are not making an offer to sell these securities in any
jurisdiction where the offer or sale is not permitted. You should assume that
the information appearing in this prospectus is accurate as of the date on the
front cover of this prospectus only. Our business, financial condition, results
of operations and prospects may have changed since that date.
2
<PAGE>
WHERE YOU CAN FIND MORE INFORMATION
We file annual, quarterly and special reports, proxy statements, and
other information with the Securities and Exchange Commission. You may read and
copy any reports, statements, or other information we file with the SEC at its
public reference rooms in Washington, D.C., New York, New York and Chicago,
Illinois. Please call the SEC at 1-800-SEC-0330 for further information on the
public reference rooms. Our SEC filings are also available to the public at the
SEC's web site at http://www.sec.gov. In addition, you can inspect and copy our
reports, proxy statements and other information at the offices of the New York
Stock Exchange, 20 Broad Street, New York, New York 10005, on which our common
stock is listed.
We filed a registration statement on Form S-3 to register with the SEC
our common stock offered by the selling stockholder. This prospectus is part of
that registration statement. As permitted by SEC rules, this prospectus does
not contain all of the information you can find in the registration statement or
the exhibits to the registration statement.
The SEC allows us to "incorporate by reference" the information we filed
with them, which means that we can disclose important information to you by
referring to another document filed separately with the SEC. The information
incorporated by reference is considered to be a part of this prospectus, and
information later filed with the SEC will update and supersede this information.
We incorporate by reference the documents listed below:
1. Annual Report on Form 10-K for the fiscal year ended December 31, 1998;
2. Quarterly Report on Form 10-Q for the three months ended March 31, 1999;
3. Quarterly Report on Form 10-Q for the three months ended June 30, 1999;
4. Quarterly Report on Form 10-Q for the three months ended September 30, 1999;
5. Current Report on Form 8-K filed February 26, 1999, as amended by Form 8-K/A
filed April 23, 1999;
6. Current Report on Form 8-K filed June 17, 1999;
7. Current Report on Form 8-K filed on November 15, 1999.
You may request a copy of these filings, at no cost, by writing or
telephoning:
Quanta Services, Inc.
Attn: Corporate Secretary
1360 Post Oak Blvd., Suite 2100
Houston, Texas 77056
(713) 629-7600
You should rely only on the information incorporated by reference or
provided in this prospectus. We have not authorized anyone to provide you with
different information. We are not making an offer of these securities in any
state where the offer is not permitted. You should not assume that the
information in this prospectus is accurate as of any date other than the date on
the front of the document.
3
<PAGE>
ABOUT QUANTA SERVICES, INC.
We are a leading provider of specialized contracting services to electric
utilities, telecommunication and cable television operators, and governmental
entities. We also install transportation control and lighting systems and
provide specialty electric power and communication services for industrial and
commercial customers.
We are a Delaware corporation and our executive offices are located at
1360 Post Oak Blvd., Suite 2100, Houston, Texas 77056. Our telephone number at
that address is (713) 629-7600.
4
<PAGE>
RISK FACTORS
An investment in our common stock involves a high degree of risk. You
should carefully consider the risks described below and the other information
contained in this prospectus before deciding to invest in our common stock. We
believe the following risks represent the known, material risks facing our
company, in addition to the risks which typically face any company in our
industry. If any of the following risks actually occur, our business, financial
condition and operating results could be materially adversely affected. In that
case, the trading price of our common stock could decline, and you could lose a
part or all of your investment.
WE HAVE A LIMITED HISTORY OF OPERATING AND INTEGRATING OUR ACQUIRED BUSINESSES
If we are unable to integrate or successfully manage the companies we have
acquired or may acquire in the future, our business, financial condition and
results of operations could be materially and adversely affected. We were
founded in August 1997 but conducted no operations and generated no revenues
prior to acquiring four businesses in February 1998. These four businesses and
the other businesses we have acquired since February 1998 have been operating as
separate entities and we expect that many of these businesses and many others we
acquire will continue to operate as separate entities with a large degree of
operating autonomy. To manage the combined enterprise on a profitable basis, we
must institute certain necessary common systems and procedures. We intend to
integrate the computer, accounting and financial reporting systems, and certain
of the operational, administrative, banking and insurance procedures of the
businesses we acquire. However, we cannot be certain that we will successfully
institute these common systems and procedures. In addition, we cannot be
certain that our recently assembled management group will be able to
successfully manage the businesses we acquire as a combined entity and
effectively implement our operating or growth strategies.
THERE ARE RISKS RELATED TO OUR OPERATING AND INTERNAL GROWTH STRATEGIES
A key element of our strategy is to increase the profitability and revenues
of the businesses we acquire. Although we have begun to implement this strategy
by various means, we cannot be certain that we will be able to continue to do so
successfully. Another key component of our strategy is to operate the
businesses we acquire on a decentralized basis, with local management retaining
responsibility for day-to-day operations, profitability and the internal growth
of the individual business. If we do not implement proper overall business
controls, this decentralized operating strategy could result in inconsistent
operating and financial practices at the businesses we acquire, and our overall
profitability could be adversely affected. Our ability to generate internal
growth will be affected by, among other factors, our ability to:
. expand the range of services we offer to customers;
. attract new customers;
. increase the number of projects performed for existing customers;
. hire and retain employees;
5
<PAGE>
. open additional facilities; and
. reduce operating and overhead expenses.
Many of the factors affecting our ability to generate internal growth may
be beyond our control, and we cannot be certain that our strategies will be
successful or that we will be able to generate cash flow sufficient to fund our
operations and to support internal growth. Our inability to achieve internal
growth could materially and adversely affect our business, financial condition
and results of operations.
WE MAY BE UNSUCCESSFUL IN IDENTIFYING OR INTEGRATING ACQUIRED COMPANIES
We have grown rapidly through the acquisition of 55 businesses. A
principal part of our business growth strategy will be to make additional
acquisitions on a selective basis as opportunities arise. One of our principal
growth strategies is to increase our revenues and the markets we serve through
the acquisition of additional electric and telecommunications infrastructure
contracting companies. We expect to face competition for acquisition
candidates, which may limit the number of acquisition opportunities and may lead
to higher acquisition prices. We cannot be sure that we will be able to
identify, acquire or profitably manage additional businesses. We also cannot be
sure that we can integrate successfully any acquired businesses with our other
operations without substantial costs, delays or other operational or financial
problems. Further, acquisitions involve a number of special risks which could
materially and adversely affect our business, financial condition and results of
operations. These special risks include:
. failure of the acquired businesses to achieve the results we expect;
. diversion of our management's attention from operational matters;
. our inability to retain key personnel of the acquired businesses;
. risks associated with unanticipated events or liabilities;
. difficulties integrating the operations and personnel of acquired companies;
. the potential disruption of our business;
. the difficulty of maintaining uniform standards, controls, procedures and
policies; and
. customer dissatisfaction or performance problems at the acquired business may
materially and adversely affect the reputation of our company.
WE MAY NOT HAVE ACCESS TO SUFFICIENT FUNDING TO FINANCE FUTURE ACQUISITIONS
If we cannot secure additional financing on acceptable terms, we may
be unable to pursue our acquisition strategy successfully and we may be unable
to support our growth strategy. We cannot readily predict the timing, size and
success of our acquisition efforts or the capital we will need for these
efforts. We intend to continue to use our common stock for all or a portion of
the consideration for future acquisitions. These issuances could have a
dilutive effect on our then existing
6
<PAGE>
stockholders. If our common stock does not maintain a sufficient market value or
potential acquisition candidates are unwilling to accept our common stock as
part of the consideration for the sale of their businesses, we may be required
to utilize more of our cash resources to pursue our acquisition program. Using
cash for acquisitions limits our financial flexibility and makes us more likely
to seek additional capital through future debt or equity financings. If we seek
more debt, we may have to agree to financial covenants that limit our
operational and financial flexibility. If we seek more equity, we may dilute the
ownership interests of our then existing stockholders. When we seek additional
debt or equity financings, we cannot be certain that additional debt or equity
will be available to us at all or on terms acceptable to us. Our $350 million
revolving credit facility contains a requirement to obtain the consent of the
lenders for acquisitions exceeding a certain level of cash consideration.
OUR BUSINESS GROWTH COULD OUTPACE THE CAPABILITY OF OUR CORPORATE MANAGEMENT AND
SYSTEMS
We expect to grow both internally and through acquisitions. We expect
to expend significant time and effort in evaluating, completing and integrating
acquisitions and opening new facilities. We cannot be certain that our systems,
procedures and controls will be adequate to support our operations as they
expand. Any future growth also will impose significant additional
responsibilities on members of our senior management, including the need to
recruit and integrate new senior level managers and executives. We cannot be
certain that we can recruit and retain such additional managers and executives.
To the extent that we are unable to manage our growth effectively, or are unable
to attract and retain additional qualified management, our financial condition
and results of operations could be materially and adversely affected.
WE MAY BE UNABLE TO ATTRACT AND RETAIN QUALIFIED EMPLOYEES
Our ability to provide high-quality services on a timely basis
requires that we employ an adequate number of skilled electricians, journeymen
linemen and project managers. Accordingly, our ability to increase our
productivity and profitability will be limited by our ability to employ, train
and retain skilled personnel necessary to meet our requirements. We, like many
of our competitors, are currently experiencing shortages of qualified personnel.
We cannot be certain that we will be able to maintain an adequate skilled labor
force necessary to operate efficiently and to support our growth strategy or
that our labor expenses will not increase as a result of a shortage in the
supply of skilled personnel.
THE EXTENT OF OUR UNIONIZED WORKFORCE COULD ADVERSELY AFFECT OUR OPERATIONS OR
ACQUISITION STRATEGY
As of September 30, 1999, approximately 36% of our employees were
covered by collective bargaining agreements. Although the majority of these
agreements prohibit strikes and work stoppages, we cannot be certain that
strikes or work stoppages will not occur in the future. Strikes or work
stoppages would adversely impact our relationship with our customers and could
materially and adversely affect our business, financial condition and results of
operations. In addition, our acquisition strategy could be adversely affected
because of our union status for a variety of reasons. For instance, our union
agreements may be incompatible with the union agreements of a business we want
to acquire and some businesses may not want to become affiliated with a union
based company.
7
<PAGE>
WE MAY BE UNABLE TO SUCCESSFULLY COMPETE WITH OTHER COMPANIES IN THE INDUSTRY
The electric and telecommunications infrastructure contracting
industry is highly competitive and is served by numerous small, owner-operated
private companies, public companies and several large regional companies. In
addition, relatively few barriers prevent entry into our industry As a result,
any organization that has adequate financial resources and access to technical
expertise may become one of our competitors. Competition in the industry
depends on a number of factors, including price. Certain of our competitors may
have lower overhead cost structures and may, therefore, be able to provide their
services at lower rates than we can provide such services. In addition, some of
our competitors are larger and have greater resources than us. We cannot be
certain that our competitors will not develop the expertise, experience and
resources to provide services that are superior in both price and quality to our
services. Similarly, we cannot be certain that we will be able to maintain or
enhance our competitive position.
We may also face competition from the in-house service organizations
of our existing or prospective customers. Electric utility and
telecommunications service providers usually employ personnel who perform some
of the same types of services as we do. We cannot be certain that our existing
or prospective customers will continue to outsource services in the future.
OUR DEPENDENCE UPON FIXED PRICE CONTRACTS AND MASTER SERVICE AGREEMENTS COULD
ADVERSELY AFFECT OUR BUSINESS
We currently generate, and expect to continue to generate, a
significant portion of our revenues under fixed price contracts. We must
estimate the costs of completing a particular project to bid for such fixed
price contracts. The cost of labor and materials, however, may vary from the
costs we originally estimated. These variations, along with other risks
inherent in performing fixed price contracts, may result in actual revenue and
gross profits for a project differing from those we originally estimated and
could result in reduced profitability and losses on projects. Depending upon
the size of a particular project, variations from estimated contract costs can
have a significant impact on our operating results for any fiscal quarter or
year.
Certain of our customers assign work to us on a project by project
basis under master service agreements. Under master service agreements, our
customer generally has no obligation to assign work to us. We cannot be certain
that customers with whom we have master service agreements will continue to
assign work to us. A significant decline in work assigned to us under these
contracts could materially and adversely affect our results of operations.
OUR OPERATING RESULTS MAY VARY SIGNIFICANTLY QUARTER-TO-QUARTER
The electric and telecommunications infrastructure contracting
business can be subject to seasonal variations. During the winter months,
demand for new projects and maintenance services may be lower due to inclement
weather. Additionally, the industry can be highly cyclical. As a result, our
volume of business may be adversely affected by declines in new projects in
various geographic regions of the U.S. Our quarterly results may also be
materially affected by:
. the timing of acquisitions;
. variations in the margins of projects performed during any particular
quarter;
8
<PAGE>
. the timing and magnitude of acquisition assimilation costs;
. the timing and volume of work under new agreements;
. the budgetary spending patterns of customers;
. the termination of existing agreements;
. costs we incur to support growth internally or through acquisitions or
otherwise;
. the change in mix of our customers, contracts and business;
. increases in construction and design costs; and
. regional or general economic conditions.
Accordingly, our operating results in any particular quarter may not
be indicative of the results that you can expect for any other quarter or for
the entire year.
WE COULD HAVE POTENTIAL EXPOSURE TO ENVIRONMENTAL LIABILITIES
Our operations are subject to various environmental laws and regulations,
including those dealing with the handling and disposal of waste products, PCBs,
fuel storage and air quality. As a result of past and future operations at our
facilities, we may be required to incur environmental remediation costs and
other cleanup expenses. In addition, we cannot be certain that we will be able
to identify or be indemnified for all potential environmental liabilities
relating to any acquired business.
THE DEPARTURE OF KEY PERSONNEL COULD DISRUPT OUR BUSINESS
We depend on the continued efforts of our executive officers and on
senior management of the businesses we acquire. Although we intend to enter
into an employment agreement with each of our executive officers and other key
employees, we cannot be certain that any individual will continue in such
capacity for any particular period of time. The loss of key personnel, or the
inability to hire and retain qualified employees, could adversely effect our
business, financial condition and results of operations. We do not intend to
carry key-person life insurance on any of our employees.
SHARES ELIGIBLE FOR FUTURE SALE BY OUR CURRENT STOCKHOLDERS MAY ADVERSELY AFFECT
OUR STOCK PRICE
If our stockholders sell substantial amounts of our common stock
(including shares issued upon the exercise of outstanding options) in the public
market following this offering, the market price of our common stock could fall.
Such sales might make it more difficult for us to sell equity or equity-related
securities in the future at a time and price that we deem appropriate. We have
outstanding 36,461,949 shares of common stock and Limited Vote Common Stock,
assuming no exercise of outstanding options after October 30, 1999 and no
conversion of our convertible subordinated notes or Series A Preferred Stock.
Of these shares, the 2,034,849 shares offered by this prospectus, together with
26,220,670 additional shares are freely tradable or tradable pursuant to
Rule 144.
9
<PAGE>
CERTAIN PROVISIONS OF OUR ARTICLES OF INCORPORATION AND BYLAWS COULD MAKE AN
ACQUISITION OF OUR COMPANY MORE DIFFICULT
The following provisions of our certificate of incorporation and
bylaws, as currently in effect, as well as Delaware law, could discourage
potential acquisition proposals, delay or prevent a change in our control or
limit the price that investors may be willing to pay in the future for shares of
our common stock. Our certificate of incorporation permits our Board of
Directors to issue ''blank check'' preferred stock and to adopt amendments to
our bylaws. Our bylaws contain restrictions regarding the right of stockholders
to nominate directors and to submit proposals to be considered at stockholder
meetings. Also, our certificate of incorporation and bylaws restrict the right
of stockholders to call a special meeting of stockholders and to act by written
consent. We are also subject to provisions of Delaware law which prohibit us
from engaging in any of a broad range of business transactions with an
"interested stockholder" for a period of three years following the date such
stockholder became classified as an interested stockholder.
WE DO NOT EXPECT TO PAY DIVIDENDS IN THE NEAR FUTURE
We have never paid any cash dividends and do not anticipate paying
cash dividends on our common stock in the immediate future.
THE BOOK VALUE OF YOUR COMMON STOCK MAY BE SUBSTANTIALLY DILUTED
In the event that we issue additional common stock in the future, including
shares that may be issued in connection with future acquisitions or other public
or private financings, purchasers of common stock in this offering may
experience dilution.
THE YEAR 2000 PROBLEM COULD DISRUPT OUR BUSINESS
Many currently installed computer systems and software products are
coded to accept only two-digit entries in the date code field. Beginning in the
year 2000, these date code fields will need to accept four-digit entries to
distinguish 21st century dates from 20th century dates. As a result, computer
system and software used by many companies may need to be upgraded to comply
with such ''Year 2000'' requirements. We cannot be certain that unexpected Year
2000 compliance problems of our systems or of our vendors, customers and service
providers will not materially and adversely affect our business, financial
condition or operating results. The unanticipated failure of one of these
systems to properly recognize date information beyond the year 1999 could have a
significant adverse impact on our ability to deliver services to customers and
to manage our continuing operations.
OUR FORWARD-LOOKING STATEMENTS MAY PROVE TO BE INACCURATE
A number of statements in this prospectus address activities, events
or developments which we anticipate may occur in the future, including our
strategy for internal growth and improved profitability, the nature and amount
of additional capital expenditures, acquisitions of assets and businesses and
industry trends. These statements are based on certain assumptions and analyses
we make in light of our perception of historical trends, current business and
economic conditions and expected future developments, as well as other factors
we believe are reasonable or appropriate. However, whether actual results and
developments will conform with our expectations is subject to a number of risks
and uncertainties, including:
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. the risk factors discussed in this prospectus;
. general economic, market or business conditions;
. the business opportunities (or lack thereof) that may be presented to and
pursued by us; and
. changes in laws or regulations and other factors.
Many of these risks and uncertainties are beyond our control.
Consequently, we cannot be certain that the actual results or developments that
we anticipate will be realized or, even if substantially realized, that they
will have the expected effects on our business or operations.
USE OF PROCEEDS
We will not receive any proceeds from the sale of shares by the
selling stockholder.
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<PAGE>
SELLING STOCKHOLDER
The following table sets forth certain information regarding the ownership
of our common stock as of November 1, 1999. The shares offered by this
prospectus may be offered and sold from time to time by the selling
stockholder, or by pledgees, donees or transferees of, or certain other
successors in interest to, the selling stockholder.
<TABLE>
<CAPTION>
-----------------------------------------------------------
Number
Shares Owned Prior of Shares Shares Owned If All
to Offering Being Shares Are Sold
------------------------ Registered --------------------
Number Percent For Sale Number Percent
--------- ------------ --------- ---------- -------
<S> <C> <C> <C> <C> <C>
SELLING STOCKHOLDER:
Billy R. Jones....... 2,051,436 6.1% 2,034,849 16,587 *
Total........... 2,051,436 6.1% 2,034,849 16,587 *
========= =========== ========= ========== =======
</TABLE>
- ----------------------------
* Represents less than 1.0%
Mr. Jones has contractually agreed with us not to sell 1,017,425
shares of our common stock until August 13, 2000, and 508,712 shares of our
common stock until August 13, 2001.
PLAN OF DISTRIBUTION
The common stock may be sold or distributed from time to time by the
selling stockholder, or by pledgees, donees or transferees of, or other
successors in interest to, the selling stockholder, directly to one or more
purchasers, including pledgees, or through brokers, dealers or underwriters who
may act solely as agents or may acquire shares as principals, at market prices
prevailing at the time of sale, at prices related to such prevailing market
prices, at negotiated prices, or at fixed prices, which may be changed. The
distribution of the common stock may be effected by one or more of the following
methods:
. ordinary brokers' transactions, which may include long or short sales;
. transactions involving cross or block trades or otherwise on the New York
stock Exchange or other stock exchange on which the common stock may be
listed from time to time;
. purchases by brokers, dealers or underwriters as principals and resale by
such purchasers for their own accounts pursuant to this prospectus;
. "at the market" to or through market makers or into an existing market for
the common stock;
. in other ways not involving market makers or established trading markets,
including direct sales to purchasers or sales effected through agents;
. through transactions in options, swaps or other derivatives (whether
exchange-listed or otherwise); or
. any combination of the foregoing, or by any other legally available means.
12
<PAGE>
In addition, the selling stockholder or his successors in interest may
enter into hedging transactions with broker-dealers who may engage in short
sales of common stock in the course of hedging the positions they assume with
the selling stockholder. The selling stockholder or his successors in interest
may also enter into option or other transactions with broker-dealers that
require the delivery to such broker-dealers of the shares, which shares may be
resold thereafter pursuant to this prospectus.
Brokers, dealers, underwriters or agents participating in the
distribution of the shares as agent may receive compensation in the form of
discounts, concessions or commissions from the selling stockholder (and, if they
act as agent for the purchaser of such shares, from such purchaser). Such
discounts concessions or commissions as to a particular broker, dealer,
underwriter or agent might be greater or less than those customary in the type
of transaction involved.
Any underwriter may engage in stabilizing transactions in accordance
with Rule 104 under the Exchange Act. Rule 104 permits stabilizing bids to
purchase the underlying security so long as the stabilizing bids do not exceed a
specified maximum. The underwriters may over-allot shares of the common stock
in connection with an offering of common stock, thereby creating a short
position in the underwriters' account. These transactions, if commenced, may be
discontinued at any time.
The selling stockholder and any brokers, dealers, underwriters or
agents that participate in the distribution of the shares may be deemed to be
"underwriters" within the meaning of the Securities Act, and any discounts,
commissions or concessions received by any such persons might be deemed to be
underwriting discounts and commissions under the Securities Act. Neither we nor
the selling stockholder can presently estimate the amount of such compensation.
We know of no existing arrangements between the selling stockholder and may
other stockholder, broker, dealer, underwriter or agent relating to the sale or
distribution of the shares.
To the extent required, we will file, during any period in which
offers or sales are being made, a supplement to this prospectus which sets
forth, with respect to a particular offering, the specific number of shares to
be sold, the sales price, the name of any participating broker, dealer,
underwriter or agent, any applicable commission or discount and any other
material information with respect to the plan of distribution not previously
disclosed.
We will not receive any of the proceeds from the sale of the shares
offered by the selling stockholder. We will pay substantially all of the
expenses incident to this offering of the shares by the selling stockholder to
the public other than commissions and discounts of brokers, dealers,
underwriters or agents.
In order to comply with certain states' securities laws, if
applicable, the shares will be sold in such jurisdictions only through
registered or licensed brokers or dealers. In addition, in certain states the
common stock may not be sold unless the common stock has been registered or
qualified for sale in such state or an exemption from registration or
qualification is available and is satisfied.
LEGAL MATTERS
The validity of the shares of common stock offered hereby will be
passed upon for Quanta by Brad Eastman, Quanta's Vice President, Secretary and
General Counsel.
13
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 14. Other Expenses of Issuance and Distribution.
The following table sets forth the expenses to be paid by the Company
(other than underwriting compensation expected to be incurred) in connection
with the offering described in this Registration Statement. All amounts are
estimates, except the SEC Registration Fee.
<TABLE>
<CAPTION>
<S> <C>
SEC Registration Fee $17,536.33
Printing Costs............................................... 5,000.00
Accounting Fees and Expenses................................. 1,000.00
Miscellaneous................................................ 1,463.67
---------
Total..................................................... $25,000.00
==========
</TABLE>
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Delaware General Corporation Law
Section 145(a) of the General Corporation Law of the State of Delaware (the
"DGCL") provides that a corporation may indemnify any person who was or is a
party or is threatened to be made a party to any threatened, pending or
completed action, suit or proceeding, whether civil, criminal, administrative or
investigative (other than an action by or in the right of the corporation) by
reason of the fact that he or she is or was a director, officer, employee or
agent of the corporation, or is or was serving at the request of the corporation
as a director, officer, employee or agent of another corporation, partnership,
joint venture, trust or other enterprise, against expenses (including attorneys'
fees), judgments, fines and amounts paid in settlement actually and reasonably
incurred by the person in connection with such action, suit or proceeding if the
person acted in good faith and in a manner the person reasonably believed to be
in or not opposed to the best interests of the corporation, and, with respect to
any criminal action or proceeding, had no reasonable cause to believe the
person's conduct was unlawful. The termination of any action, suit or
proceeding by judgment, order, settlement, conviction, or upon a plea of nolo
contendere or its equivalent, shall not, of itself, create a presumption that
the person did not act in good faith and in a manner which he or she reasonably
believed to be in or not opposed to the best interests of the corporation, and,
with respect to any criminal action or proceeding, had reasonable cause to
believe that the person's conduct was unlawful.
Section 145(b) of the DGCL states that a corporation may indemnify any
person who was or is a party or is threatened to be made a party to any
threatened, pending or completed action or suit or in the right of the
corporation to procure a judgment in its favor by reason of the fact that the
person is or was a director, officer, employee or agent of the corporation, or
is or was serving at the request of the corporation as a director, officer,
employee or agent of another corporation, partnership, joint venture, trust or
other enterprise against expenses (including attorneys' fees) actually and
reasonably incurred by the person in connection with the defense or settlement
of such action or suit if the person acted in good faith and in a manner the
person reasonably believed to be in or not opposed to the best interests of the
corporation and except that no indemnification shall be made in respect of any
claim, issue or matter as to which such person shall have been adjudged to be
liable to the corporation unless and only to the extent that the Court of
Chancery or the court in which such action or suit was brought shall determine
upon application that, despite the adjudication of liability but in
II-1
<PAGE>
view of all the circumstances of the case, such person is fairly and reasonably
entitled to indemnity for such expenses which the Court of Chancery or such
other court shall deem proper.
Section 145(c) of the DGCL provides that to the extent that a present or
former director or officer of a corporation has been successful on the merits or
otherwise in defense of any action, suit or proceeding referred to in
subsections (a) and (b) of Section 145, or in defense of any claim, issue or
matter therein, he or she shall be indemnified against expenses (including
attorneys' fees) actually and reasonably incurred by such person in connection
therewith.
Section 145(d) of the DGCL states that any indemnification under
subsections (a) and (b) of Section 145 (unless ordered by a court) shall be made
by the corporation only as authorized in the specific case upon a determination
that indemnification of the present or former director, officer, employee or
agent is proper in the circumstances because he has met the applicable standard
of conduct set forth in subsections (a) and (b). Such determination shall be
made with respect to a person who is a director or officer at the time of such
determination (1) by a majority vote of the directors who are not parties to
such action, suit or proceeding, or (2) by a committee of such directors
designated by majority vote of such directors, even though less than a quorum,
or (3) if there are no such directors, or if such directors so direct, by
independent legal counsel in a written opinion, or (4) by the stockholders.
Section 145(e) of the DGCL provides that expenses (including attorneys'
fees) incurred by an officer or director in defending any civil, criminal,
administrative or investigative action, suit or proceeding may be paid by the
corporation in advance of the final disposition of such action, suit or
proceeding upon receipt of an undertaking by or on behalf of such director or
officer to repay such amount if it shall ultimately be determined that he or she
is not entitled to be indemnified by the corporation as authorized in Section
145. Such expenses (including attorneys' fees) incurred by other employees and
agents may be so paid upon such terms and conditions, if any, as the corporation
deems appropriate.
Section 145(f) of the DGCL provides that the indemnification and
advancement of expenses provided by, or granted pursuant to, the other
subsections of Section 145 shall not be deemed exclusive of any other rights to
which those seeking indemnification or advancement of expenses may be entitled
under any bylaw, agreement, vote of stockholders or disinterested directors or
otherwise, both as to action in such person's official capacity and as to action
in another capacity while holding such office.
Section 145(g) of the DGCL provides that a corporation shall have the power
to purchase and maintain insurance on behalf of any person who is or was a
director, officer, employee or agent of the corporation, or is or was serving at
the request of the corporation as a director, officer, employee or agent of
another corporation, partnership, joint venture, trust or other enterprise,
against any liability asserted against such person and incurred by such person
in any such capacity, or arising out of his or her status as such, whether or
not the corporation would have the power to indemnify such person against such
liability under the provisions of Section 145.
Section 145(j) of the DGCL provides that the indemnification and
advancement of expenses provided by, or granted pursuant to, Section 145 shall,
unless otherwise provided when authorized or ratified, continue as to a person
who has ceased to be a director, officer, employee or agent and shall inure to
the benefit of the heirs, executors and administrators of such a person.
II-2
<PAGE>
CERTIFICATE OF INCORPORATION
The Certificate of Incorporation provides that a director of the Company
shall not be personally liable to the Company or its stockholders for monetary
damages for breach of fiduciary duty as a director, except for liability for
unlawful payments of dividends or unlawful stock repurchases or redemptions as
provided for in Section 174 of the DGCL. If the DGCL is amended to authorize
the further elimination or limitation of the liability of directors, then the
liability of a director of the Company, in addition to the limitation on
personal liability described above, shall be limited to the fullest extent
permitted by the amended DGCL. Further, any repeal or modification of such
provision of the Certificate of Incorporation by the stockholders of the Company
shall be prospective only, and shall not adversely affect any limitation on the
personal liability of a director of the Company existing at the time of such
repeal or modification.
BYLAWS
The Bylaws of the Company provide that the Company will indemnify and hold
harmless any director or officer of the Company to the fullest extent permitted
by applicable law, as in effect as of the date of the adoption of the Bylaws or
to such greater extent as applicable law may thereafter permit, from and against
all losses, liabilities, claims, damages, judgments, penalties, fines, amounts
paid in settlement and expenses (including attorneys' fees) whatsoever arising
out of any event or occurrence related to the fact that such person is or was a
director or officer of the Company and further provide that the Company may, but
is not required to, indemnify and hold harmless any employee or agent of the
Company or a director, officer, employee or agent of any other corporation,
partnership, joint venture, trust, employee benefit plan or other enterprise who
is or was serving in such capacity at the written request of the Company;
provided, however, that the Company is only required to indemnify persons
serving as directors, officers, employees or agents of the Company for the
expenses incurred in a proceeding if such person has met the standards of
conduct that make it permissible under the laws of the State of Delaware for the
Company to indemnify the claimant for the amount claimed, but the burden of
proving such defense will be on the Company. The Bylaws further provide that,
in the event of any threatened, or pending action, suit or proceeding in which
any of the persons referred to above is a party or is involved and that may give
rise to a right of indemnification under the Bylaws, following written request
by such person, the Company will promptly pay to such person amounts to cover
expenses reasonably incurred by such person in such proceeding in advance of its
final disposition upon the receipt by the Company of (i) a written undertaking
executed by or on behalf of such person providing that such person will repay
the advance if it is ultimately determined that such person is not entitled to
be indemnified by the Company as provided in the Bylaws and (ii)satisfactory
evidence as to the amount of such expenses.
INSURANCE
The Company maintains liability insurance for the benefit of its directors
and officers.
Item 16. Exhibits and Financial Statement Schedules.
(a) Exhibits.
<TABLE>
<CAPTION>
Number Description
- ------ -----------
<C> <S>
2.1 -- Amended and Restated Agreement and Plan of Organization dated as of December 11, 1997
by and among Quanta Services, Inc. and PAR Electrical Contractors, Inc. and its
stockholders**
</TABLE>
II-3
<PAGE>
<TABLE>
<CAPTION>
<C> <S>
2.2 -- Amended and Restated Agreement and Plan of Organization dated as of December 11, 1997
by and among Quanta Services, Inc. and Union Power Construction Company and its
stockholders**
2.3 -- Amended and Restated Agreement and Plan of Organization dated as of December 11, 1997
by and among Quanta Services, Inc. and TRANS TECH Electric, Inc. and its
stockholders**
2.4 -- Amended and Restated Agreement and Plan of Organization dated as of December 11, 1997
by and among Quanta Services, Inc. and Potelco, Inc. and its stockholders**
3.1 -- Amended and Restated Certificate of Incorporation**
3.2 -- Amended and Restated Bylaws**
3.3 -- Certificate of Amendment to the Amended and Restated Certificate of Incorporation*
3.4 -- Certificate of Designation, Rights, and Limitations of the Series A Convertible
Preferred Stock of Quanta Services, Inc.
4.1 -- Form of Common Stock Certificates**
5.1 -- Opinion of Brad Eastman
10.1 -- Form of Employment Agreement**
10.2 -- 1997 Stock Option Plan**
10.3 -- Acquisition Agreement and Plan of Reorganization dated as of May 5, 1998, by and
among Quanta Services, Inc., Spalj Acquisition, Inc. and Spalj Construction Company
and its stockholders***
10.4 -- Acquisition Agreement and Plan of Reorganization dated as of August 4, 1998, by and
among Quanta Services, Inc., Underground Construction Co., Inc., Five Points
Construction Company and their stockholders+
10.5 -- Third Amended and Restated Secured Credit Agreement dated as of June 14, 1999 among
Quanta Services, Inc. as Borrower and the financial institutions parties thereto, as
Lenders*
10.6 -- Securities Purchase Agreement among Quanta Services, Inc. and Enron Capital & Trade
Resources Corp. ("Enron Capital") and Joint Energy Development Investments II Limited
Partnership ("JEDI") dated as of September 29, 1998***
10.7 -- Registration Rights Agreement dated as of September 29, 1998 by and among Quanta
Services, Inc., JEDI and Enron Capital***
10.8 -- Form of Convertible Promissory Note issued to Enron Capital and JEDI***
10.9 -- Acquisition Agreement and Plan of Reorganization dated February 12, 1999, by and
among Quanta Services, Inc., Quanta I Acquisition, Inc., The Ryan Company, Inc., John
P. Ryan, John P. Ryan 1998 Retained Annuity Trust, Kathleen M. Ryan and Leo S.
McNamara, Trustees, David C. Varisco, Varisco Family Irrevocable Trust of 1998, John
P. Ryan, Trustee, and David C. Varisco 1998 Retained Annuity Trust, John P. Ryan and
Mary L. Varisco, Trustee+++
</TABLE>
II-4
<PAGE>
<TABLE>
<CAPTION>
<C> <S>
10.10 -- Acquisition Agreement and Plan of Reorganization dated February 16, 1999, by and
among Quanta Services, Inc., Quanta II Acquisition, Inc., Northern Line Layers, Inc.,
Donald G. Bottrell, Teresa L. Bottrell, James R. Bennett and Marine M. Bennett+++
10.11 -- Quanta Services, Inc. Management Incentive Bonus Plan for Fiscal Year Ending December
31, 1999++++
10.12 -- Securities Purchase Agreement between Quanta Services, Inc. and UtiliCorp United Inc.
dated as of September 21, 1999
10.13 -- Investor's Rights Agreement by and between Quanta Services, Inc. and UtiliCorp United
Inc. dated September 21, 1999
10.14 -- Management Services Agreement by and between Quanta Services, Inc. and UtiliCorp
United Inc.
10.15 -- Letter Agreement by and between Quanta Services, Inc. and UtiliCorp United Inc. dated
September 21, 1999
10.16 -- Strategic Alliance Agreement by and between Quanta Services, Inc. and UtiliCorp
United Inc. dated as of September 21, 1999
10.17 -- Form of Stockholders Voting Agreement
10.18 -- First Amendment to Third Amended and Restated Secured Credit Agreement
10.19 -- Letter Agreement by and among ECT Merchant Investments Corp., Joint Energy
Development Investments II Limited Partnership, Quanta Services, Inc. and UtiliCorp
United Inc. dated Septembert 21, 1999
10.20 -- First Amendment to Securities Purchase Agreement and Registration Rights Agreement
21.1 -- Subsidiaries
23.1 -- Consent of Arthur Andersen LLP
23.2 -- Consent of Brad Eastman (contained in Exhibit 5.1)
23.3 -- Consent of Arthur Andersen LLP
23.4 -- Consent of S. J. Gallina & Co., LLP
23.5 -- Consent of Jerry T. Paul, CPA
23.6 -- Consent of McGladrey & Pullen, LLP
23.7 -- Consent of Paul B. Leathers, Inc.
23.8 -- Consent of Babush, Neiman, Kornman & Johnson, LLP
23.9 -- Consent of McDaniel & Associates, P.C.
23.10 -- Consent of J. H. Cohn LLP
23.11 -- Consent of Kirkland Albrecht and Company
23.12 -- Consent of Joseph Decosimo and Company, LLP
23.13 -- Consent of Nathan Wechsler & Company
23.14 -- Consent of Ganim, Meder, Childers & Hoering, P.C.
24.1 -- Power of Attorney (included on the signature page)
</TABLE>
- --------------
* Previously filed as an exhibit to the Company's Registration Statement
on Form S-3 (No. 333-81419).
II-5
<PAGE>
** Previously filed as an exhibit to the Company's Registration Statement
on Form S-1 (No. 333-42957) and incorporated herein by reference.
*** Previously filed as an exhibit to the Company's Registration Statement
on Form S-4 (No. 333-47083) and incorporated herein by reference.
+ Previously filed as an exhibit to the Company's Quarterly Report on
Form 10-Q for the period ended June 30, 1998 and incorporated herein
by reference.
++ Previously filed as an exhibit to the Company's Quarterly Report on
Form 10-Q for the period ended September 30, 1998 and incorporated
herein by reference.
+++ Previously filed as an exhibit to the Company's Report on Form 8-K
filed February 26, 1999 and incorporated herein by reference.
++++ Previously filed as an exhibit to the Company's Quarterly Report on
Form 10-Q for the period ended March 31, 1999 and incorporated herein
by reference.
(b) Financial Statement Schedules.
All schedules are omitted because they are not applicable or because the
required information is contained in the Financial Statements or Notes thereto.
Item 17. Undertakings
The undersigned Registrant hereby undertakes:
(1) to file, during any period in which offers or sales are being made, a
post-effective amendment to this registration statement:
(i) to include any prospectus required by Section 10(a)(3) of the
Securities Act of 1933;
(ii) to reflect in the prospectus any facts or events arising after
the effective date of this registration statement (or the most
recent post-effective amendment thereof) which, individually or
in the aggregate, represent a fundamental change in the
information set forth in the registration statement.
Notwithstanding the foregoing, any increase or decrease in volume
of securities offered (if the total dollar value of securities
offered would not exceed that which was registered) and any
deviation from the low or high end of the estimated maximum
offering range may be reflected in the form of prospectus filed
with the Securities and Exchange Commission pursuant to Rule
424(b) if, in the aggregate, the changes in volume and price
represent no more than a 20% change in the maximum aggregate
offering price set forth in the "Calculation of Registration Fee"
table in the effective registration statement; and
(iii) to include any material information with respect to the plan of
distribution not previously disclosed in the registration
statement or any material change to such information in the
registration statement;
II-6
<PAGE>
provided, however, that the undertakings set forth in clauses (i) and (ii) above
do not apply if the registration statement is on Form S-3, Form S-8 or Form F-3,
and the information required to be included in a post-effective amendment by
those paragraphs is contained in periodic reports filed with or furnished to the
Commission by Quanta Services, Inc. pursuant to Section 13 or 15(d) of the
Securities and Exchange Act of 1934 that are incorporated by reference in this
registration statement.
(2) That, for the purpose of determining any liability under the Securities
Act of 1933, each such post-effective amendment shall be deemed to be a new
registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
(3) To remove from registration by means of a post-effective amendment any
of the securities being registered which remain unsold at the termination of the
offering; and
(4) The undersigned Registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of the
Registrant's annual report pursuant to Section 13(a) or Section 15(d) of the
Securities Exchange Act of 1934 (and, where applicable, each filing of an
employee benefit plan's annual report pursuant to Section 15(d) of the
Securities Exchange Act of 1934) that is incorporated by reference in the
Registration Statement shall be deemed to be a new registration statement
relating to the securities offered herein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof.
(5) Insofar as indemnification for liabilities arising under the Securities
Act of 1933 may be permitted to directors, officers and controlling persons of
the Registrant pursuant to the foregoing provisions, or otherwise, the
Registrant has been advised that in the opinion of the Securities and Exchange
Commission such indemnification is against public policy as expressed in the Act
and is, therefore, unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by the Registrant of expenses
incurred or paid by a director, officer, or controlling person of the Registrant
in the successful defense of any action, suit, or proceeding) is asserted by
such director, officer, or controlling person in connection with the securities
being registered, the Registrant will, unless in the opinion of its counsel the
matter has been settled by controlling precedent, submit to a court of
appropriate jurisdiction the question whether such indemnification by it is
against public policy as expressed in the Act and will be governed by the final
adjudication of such issue.
(6) The undersigned Registrant hereby undertakes that:
(i) For the purposes of determining any liability under the
Securities Act of 1933, the information omitted from the form of
prospectus filed as part of this Registration Statement in
reliance upon Rule 430A and contained in a form of prospectus
filed by the Registrant pursuant to Rule 424(b)(1) or (4) or
497(h) under the Securities Act shall be deemed to be part of
this Registration Statement as of the time it was declared
effective.
(ii) For the purpose of determining any liability under the Securities
Act of 1933, each post-effective amendment that contains a form
of prospectus shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of
such new securities at that time shall be deemed to be the
initial bona fide offering thereof.
II-7
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act, Quanta Services, Inc.
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-3 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Houston, State of Texas, on November 15, 1999.
Quanta Services, Inc.
By: /s/ John R. Colson
-------------------------------------------
John R. Colson, Chief Executive Officer
POWER OF ATTORNEY
Each person whose signature appears below authorizes John R. Colson and
Derrick A. Jensen, and each of them, each of whom may act without joinder of the
other to execute in the name of each such person who is then an officer or
director of the Registrant to file any amendments to this Registration Statement
necessary or advisable to enable the Registrant to comply with the Securities
Act and any rules, regulations and requirements of the Securities and Exchange
Commission, in respect thereof, in connection with the registration of the
securities which are the subject of this Registration Statement, which
amendments may make such changes to such Registration Statement as such attorney
may deem appropriate (and to file any Registration Statement pursuant to Rule
462(b) of the Securities Act).
Pursuant to the requirements of the Securities Act, as amended, this
Registration Statement has been signed by the following persons in the
capacities indicated and on November 15, 1999.
<TABLE>
<CAPTION>
SIGNATURE TITLE
--------- -----
<S> <C>
/s/ John R. Colson Chief Executive Officer, Director
- ---------------------------------------------- (Principal Executive Officer)
John R. Colson
/s/ Derrick A. Jensen Vice President and Controller
- ---------------------------------------------- (Principal Accounting Officer)
Derrick A. Jensen
/s/ Vincent D. Foster Director
- ----------------------------------------------
Vincent D. Foster
/s/ John R. Wilson Director
- ----------------------------------------------
John R. Wilson
/s/ John A. Martell Director
- ----------------------------------------------
John A. Martell
/s/ Gary A. Tucci Director
- ----------------------------------------------
Gary A. Tucci
/s/ James R. Ball Director
- ----------------------------------------------
James R. Ball
/s/ Rodney R. Proto Director
- ----------------------------------------------
Rodney R. Proto
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
<S> <C>
/s/ Michael T. Willis Director
- ----------------------------------------------
Michael T. Willis
Director
- ----------------------------------------------
Robert K. Green
/s/ James G. Miller Director
- ----------------------------------------------
James G. Miller
</TABLE>
<PAGE>
EXHIBIT 3.4
CERTIFICATE OF DESIGNATION, RIGHTS, AND LIMITATIONS
OF THE SERIES A CONVERTIBLE PREFERRED STOCK
OF QUANTA SERVICES, INC.
Pursuant to Section 151(g), The General Corporation Law of the State of
Delaware, Quanta Services, Inc., a Delaware corporation (the "Corporation"),
DOES HEREBY CERTIFY:
That, pursuant to authority conferred upon the Board of Directors by
Article Fourth of the Amended and Restated Certificate of Incorporation, and
pursuant to the provisions of The General Corporation Law of the State of
Delaware, the Board of Directors on September 21, 1999, duly adopted a
resolution providing for the issuance of series A convertible preferred stock,
which resolution is as follows:
RESOLVED, that, pursuant to the authority expressly granted and vested in
the Board of Directors of the Corporation, and effective upon filing of this
Certificate of Designation, Rights, and Limitations (the "Certificate of
Designation"), there shall be designated a "Series A Convertible Preferred
Stock" (the "Series A Preferred Stock"), consisting of 1,860,000 shares of
preferred stock of the Corporation, $0.00001 par value per share.
FURTHER RESOLVED, that the Board of Directors be, and the same hereby is,
authorized to issue such shares of Series A Preferred Stock from time to time
and for such consideration and on such terms as the Board of Directors shall
determine; and
FURTHER RESOLVED, that, subject to the limitations provided by law and by
the Corporation's Amended and Restated Certificate of Incorporation, the powers,
designations, preferences and relative, participating, optional or other special
rights, powers or priorities of, and the qualifications, limitations or
restrictions upon, the Series A Preferred Stock shall be as follows:
1. Designation. One million eight hundred sixty thousand (1,860,000) shares of
the authorized and unissued preferred stock of the Corporation, $0.00001 par
value per share, are hereby designated "Series A Convertible Preferred Stock"
(the "Series A Preferred Stock").
2. Dividends.
(a) Preferred. Subject to Sections 2(c) and (d) below, the holders of Series A
Preferred Stock shall be entitled to receive dividends in cash at the rate
of 0.5% per annum on an amount equal to $100.00 (the "Purchase Price"),
plus all unpaid dividends accrued, on each outstanding share of Series A
Preferred Stock (as adjusted pursuant to Section 5 hereof with respect to
such share), when and as declared by the Board of Directors out of the
funds legally available for that purpose (the "Preferred Dividend"). The
Preferred Dividend on each share of Series A Preferred Stock shall be
cumulative from the date of issuance of such share, whether or not earned,
whether or not funds of the Corporation are legally available for the
payment of
<PAGE>
dividends and whether or not declared by the Board of Directors,
but such dividend shall be payable only when, as, and if declared by the
Board of Directors. So long as any shares of Series A Preferred Stock
shall be outstanding, (i) no dividend, whether in cash, stock or property,
shall be paid or declared, nor shall any other distribution be made, on any
shares of the common stock of the Corporation, par value $0.00001 per share
(the "Common Stock"), or any other class or series of capital stock of the
Corporation, (ii) nor shall any class or series of capital stock of the
Corporation be redeemed, purchased or otherwise acquired for value by the
Corporation (except for acquisitions of Common Stock by the Corporation
pursuant to (A) agreements which permit the Corporation to repurchase such
shares upon termination of services to the Corporation entered into on or
before the date on which the shares of Series A Preferred Stock were first
issued (the "Original Issue Date") or (B) in satisfaction of an
indemnification obligation to the Corporation upon a breach by the holder
of Common Stock of a representation, warranty or covenant in any agreement
for the acquisition by the Corporation of a business (as defined in Rule
11-01(d) of Regulation S-X adopted by the Securities and Exchange
Commission) pursuant to the Corporation's acquisition program (an
"Acquisition")), in each case, until all dividends set forth in this
Section (2)(a) on the Series A Preferred Stock shall have been paid or
declared and set apart.
(b) Participating. In addition to the Preferred Dividend payable on the Series
A Preferred Stock, the shares of Series A Preferred Stock shall be entitled
to receive, out of any funds legally available therefor, the amount of any
cash or non-cash dividends or distributions declared and paid on the shares
of Common Stock, as if the shares of Series A Preferred Stock had been
converted immediately prior to the record date for payment of such
dividends or distributions.
(c) Corporation's Right to Terminate Preferred Dividend. At the option of the
Corporation (exercisable by delivery to the holder of notice thereof), at
any time after the sixth anniversary of the Original Issue Date, if on the
date of exercise by the Corporation, the Closing Price (as defined in
Section 4(b)(i) below) of the Corporation's Common Stock is greater than
$30.00 (subject to adjustment for any stock split, combination, and the
like), then the Corporation may terminate the Preferred Dividend, effective
on the date of receipt by the holder of the relevant notice.
(d) Adjustment of Preferred Dividend. At the option of UtiliCorp United Inc.,
a Delaware corporation, or one or more of its "affiliates" (as defined in
Rule 12b-2 under the Securities Exchange Act of 1934, as amended) or all
such persons together (collectively, "UtiliCorp"), at any time after the
sixth anniversary of the Original Issue Date, if on the date of exercise by
UtiliCorp the Closing Price (as defined in Section 4(b)(i) below) of the
Corporation's Common Stock is $30.00 or less (subject to adjustment for any
stock split, combination, and the like), then the Preferred Dividend will
be adjusted to the then "market coupon rate" (as defined below). The
"market coupon rate" shall be the Corporation's after-tax cost of obtaining
financing, excluding common stock, to replace UtiliCorp's investment in the
Corporation, as determined by mutual agreement of the parties; provided,
however, that if the parties are unable to agree upon the market coupon
rate within 10 days after the date of the sixth anniversary of the Original
Issue Date, then the parties shall mutually agree upon a nationally
recognized investment banking firm skilled in the business aspects of the
subject to determine the market coupon rate, such determination shall be
made by the investment banking firm within a 30 days
2
<PAGE>
of being selected. If the parties are unable to agree upon a nationally
recognized investment banking firm within 30 days after the date of the
sixth anniversary of the Original Issue Date, then the determination shall
be made by a panel of three nationally recognized investment banking firms
skilled in the business aspects of the subject. Each of the Corporation and
the holder of a majority of the shares of Series A Preferred Stock shall
select one such firm within five days after the expiration of above-
mentioned 30-day period (the "Initial Selection Period"), and the third
such firm shall be selected by the two investment banking firms within five
days after the expiration the Initial Selection Period. Within 15 days
after the selection of the third investment banking firm, the initial two
firms shall submit to the third firm their proposals of the market coupon
rate and, within five days after receipt thereof, the third firm shall
adopt in its entirety one of the proposals and shall not adopt a compromise
between the proposals of the initial two firms. The market coupon rate
determined in accordance with the above procedure shall, retroactive to the
date immediately following the sixth anniversary of the Original Issue Date
and thereafter, be the Preferred Dividend.
3. Voting Rights.
(a) General. Each holder of shares of Series A Preferred Stock shall be
entitled to the number of votes equal to the number of shares of Common
Stock into which the shares of Series A Preferred Stock held by such holder
are then convertible, at each meeting of stockholders of the Corporation
(and written actions of stockholders in lieu of meetings), with respect to
any and all matters presented to the stockholders of the Corporation for
their action or consideration. Except as provided by law or as otherwise
expressly provided herein, such holder shall have voting rights and powers
equal to the voting rights and powers of the Common Stock, and holders of
Series A Preferred Stock shall vote together with the holders of Common
Stock as a single class and be entitled to notice of any stockholders'
meeting in accordance with the By-laws of the Corporation. Fractional
votes shall not, however, be permitted and any fractional voting rights
resulting from the above formula (after aggregating all shares into which
shares of Series A Preferred Stock held by each holder could be converted)
shall be rounded to the nearest whole number (with one-half being rounded
upward).
(b) Election of Directors. The Board of Directors of the Corporation shall
consist of 10 directors. The directors of the Corporation shall be elected
as follows:
(i) A majority of the outstanding shares of Series A Preferred Stock and the
shares of Common Stock issued upon conversion thereof (the "Conversion
Shares") (to the extent permitted by applicable law) held by UtiliCorp,
voting exclusively and as a separate class, shall be entitled to elect two
of the total number of directors of the Corporation, subject to the
limitations set forth in subsections 3(b)(ii), (iv) and (v) below.
(ii) In the event that the ratio of the total number of shares of Common Stock
owned by UtiliCorp (on an as-converted basis) to the total number of shares
of Common Stock outstanding, assuming full conversion of all securities and
full exercise of all outstanding rights, options and warrants to acquire
Common Stock (such ratio, "UtiliCorp's Fully Diluted Ownership Ratio") is
equal to or greater than 30%, then a majority of the outstanding shares of
Series A Preferred Stock and the Conversion Shares (to the extent permitted
by applicable law)
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held by UtiliCorp, voting exclusively and as a separate class, shall be
entitled to elect three of the total number of directors of the
Corporation.
(iii) To the extent any nominee of the holders of the Series A Preferred Stock
is not an officer of UtiliCorp, the Board of Directors of the Corporation
shall have the right to approve such nominee, such approval not to be
unreasonably withheld. Only the holders of the Series A Preferred Stock
and the Conversion Shares (to the extent permitted by applicable law)
shall be entitled to remove from office such directors nominated by the
holders of the Series A Preferred Stock and the Conversion Shares (to the
extent permitted by applicable law) or to fill any vacancy caused by the
resignation, death or removal of such directors.
(iv) In the event that UtiliCorp's Fully Diluted Ownership Ratio (A) is less
than 10% or (B) UtiliCorp sells or otherwise disposes of at least 50%, but
less than 75%, of the total number of shares of Common Stock owned by it
on the Original Issue Date (on an as-converted basis), then a majority of
the outstanding shares of Series A Preferred Stock and the Conversion
Shares (to the extent permitted by applicable law) held by UtiliCorp shall
only be entitled (voting exclusively and as a separate class) to elect one
of the total number of directors of the Corporation.
(v) In the event that (A) UtiliCorp's Fully Diluted Ownership Ratio is less
than 5% or (B) UtiliCorp sells or otherwise disposes of 75% or more of the
total number of shares of Common Stock owned by it (on an as-converted
basis), then a majority of the outstanding shares of Series A Preferred
Stock and the Conversion Shares (to the extent permitted by applicable
law) held by UtiliCorp shall have no right (voting exclusively and as a
separate class) to elect any directors to the Board of Directors.
(vi) The holders of Limited Vote Common Stock, voting together as a single
class, shall be entitled to elect one member of the Board of Directors,
but shall not otherwise be entitled to vote in the election of directors
of the Corporation. Only holders of Limited Vote Common Stock shall have
the right to remove from office such director or to fill any vacancy
caused by the resignation, death or removal of such director.
(vii) Except as provided in Sections 3(b)(i), (ii), (iii) and (iv) above, the
holders of Common Stock and the holders of Series A Preferred Stock,
voting together as a single class, shall be entitled to elect all members
of the Board of Directors.
(c) Veto Rights. So long as the outstanding shares of Series A Preferred Stock
represent 10% or more of the outstanding shares of Common Stock (on an as-
converted basis), the approval by the vote or written consent of the
holders of at least two-thirds of the then outstanding shares of Series A
Preferred Stock, voting together as a single class, shall be necessary
before the Corporation may:
(i) Authorize, issue or enter into any agreement providing for the issuance
(contingent or otherwise) of (A) any authorized but unissued shares of
Series A Preferred Stock or any other class or series of capital stock
senior to or on par with the Series A Preferred Stock as to dividend
rights or (B) any notes or debt securities containing equity features,
including, without limitation, any notes or debt securities convertible
into or
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exchangeable for equity securities, having dividend rights on par with or
senior to the Series A Preferred Stock;
(ii) Redeem or purchase or otherwise acquire any of its capital stock, now or
hereafter issued, of any class, except for (A) any repurchase of shares of
capital stock pursuant to any employee benefit plan adopted by the
Corporation, (B) any payment or redemption of certain convertible
subordinated notes issued by the Corporation on October 5, 1998 to Enron
Capital & Trade Resources Corp. and Joint Energy Development Investments
II Limited Partnership, and (C) any acquisition of shares of capital stock
by the Corporation pursuant to agreements which permit the Corporation to
repurchase such shares (1) upon termination of services to the Corporation
entered into on or before the Original Issue Date or (2) in satisfaction
of an indemnification obligation to the Corporation upon a breach by the
holder of Common Stock of a representation, warranty or covenant in any
agreement for an Acquisition;
(iii) Enter into a transaction or series of transactions resulting in the sale,
lease, transfer or other disposition of all or substantially all of the
assets of the Corporation in which the holders of the Series A Preferred
Stock would receive less than the Common Stock for each share of Series A
Preferred Stock held by them;
(iv) Liquidate, dissolve or wind up the Corporation in any form of transaction;
or
(v) Amend the Corporation's Certificate of Incorporation or Bylaws or the
organizational documents of a subsidiary of the Corporation (including the
filing of a certificate of designation), in each case as amended, or file
with any governmental authority any resolution of the Board of Directors
containing in each case any provisions which would adversely affect or
otherwise impair the voting powers, preferences or other special rights or
privileges, qualifications, limitations or restrictions of the Series A
Preferred Stock (including, without limitation, an amendment or resolution
to increase the number of directors of the Corporation to a number greater
than 10).
4. Conversion. The Corporation and holders of the Series A Preferred Stock
shall have, and be subject to, the conversion rights as follows (the "Conversion
Rights"):
(a) Holder's Right to Convert. Subject to and in compliance with the
provisions of this Section 4, any shares of Series A Preferred Stock may,
at the option of the holder, be converted at any time into fully paid and
nonassessable shares of Common Stock. The number of shares of Common Stock
to which a holder of Series A Preferred Stock shall be entitled upon
conversion by the holder shall be the product obtained by multiplying the
Series A Preferred Stock Rate then in effect (determined as provided in
Section 4(b)(ii)) times the number of shares of Series A Preferred Stock
being converted by such holder.
(b) Certain Definitions and Determinations. As used in Sections 4 and 5, the
following terms shall have the following meanings:
(i) "Closing Price" means on any particular date (A) the last sale price per
share of the Common Stock on such date on the principal stock exchange on
which the Common Stock has been listed or, if there is no such price on
such date, then the last sale price
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on such exchange on the date nearest preceding such date, (B) if the
Common Stock is not listed on any stock exchange, the final bid price for
a share of Common Stock in the over-the-counter market, as reported by the
National Association of Securities Dealers Automated Quotation System
("NASDAQ") at the close of business on such date, or the last sales price
if such price is reported and final bid prices are not available, (C) if
the Common Stock is not quoted on the NASDAQ, the bid price for a share of
Common Stock in the over-the-counter market as reported by the National
Quotation Bureau Incorporated (or any similar organization or agency
succeeding to its functions of reporting prices), or (D) if the Common
Stock is no longer publicly traded, as determined by an investment banking
firm selected in good faith by the Board of Directors based upon the price
that would be paid by a willing buyer of the shares at issue, in a sale
process designed to maximize value and attract a reasonable number of
participants to provide a fair determination of such value, provided, that
none of the transactions related to the foregoing shall include purchases
by any "affiliate" (as defined in Rule 12b-2 under the Securities Act of
1933) of the Corporation.
(ii) The conversion rate in effect at any time for conversion of the Series A
Preferred Stock (the "Preferred Stock Rate") shall be the quotient
obtained by dividing the Original Issue Price (as defined below) by the
Conversion Price, calculated as provided in Section 4(b)(iv).
(iii) The "Original Issue Price" of the Series A Preferred Stock shall equal the
Purchase Price with respect to each share (as adjusted for any stock
dividends, combinations, splits and the like with respect to such shares).
(iv) The conversion price shall initially be $30.00 (the "Conversion Price").
The initial Conversion Price shall be adjusted from time to time in
accordance with the provisions of Section 5. All references to the
Conversion Price herein shall mean the Conversion Price as so adjusted.
(c) Automatic Conversion Prior to Liquidation. In the event of a liquidation
of the Corporation, the Conversion Rights shall be automatically exercised
at the close of business on the first full business day preceding the date
fixed for the payment of any amounts distributable on liquidation to the
holders of Common Stock.
(d) Fractional Shares. No fractional shares of Common Stock shall be issued
upon conversion of the Series A Preferred Stock. All shares of Common
Stock (including fractions thereof) issuable upon conversion of more than
one share of Series A Preferred Stock by a holder shall be aggregated for
purposes of determining whether the conversion would result in the
issuance of any fractional share. In lieu of any fractional shares to
which the holder would otherwise be entitled, the Corporation shall pay
cash equal to such fractional share of Common Stock multiplied by the
Closing Price of the Common Stock on the business day immediately prior to
the date on which conversion is deemed to occur (as determined in
subsection 4(e)(ii) below).
(e) Mechanics of Conversion.
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(i) In order for a holder of Series A Preferred Stock to convert shares of
Series A Preferred Stock into shares of Common Stock, such holder shall
surrender the certificate or certificates for such shares of Series A
Preferred Stock, at the office of the transfer agent for the Series A
Preferred Stock (or at the principal office of the Corporation if the
Corporation serves as its own transfer agent), together with written
notice that such holder elects to convert all or any number of the shares
of the Series A Preferred Stock represented by such certificate or
certificates. Such notice shall state such holder's name or the names of
the nominees in which such holder wishes the certificate or certificates
for shares of Common Stock to be issued.
(ii) If required by the Corporation, certificates surrendered for conversion
shall be endorsed or accompanied by a written instrument or instruments of
transfer, in form satisfactory to the Corporation, duly executed by the
registered holder or his, her or its attorney duly authorized in writing.
Provided that the certificates of the Series A Preferred Stock have been
surrendered as provided above, the Corporation shall, as soon as
practicable, issue and deliver at such office to such holder of Series A
Preferred Stock, or to his, her or its nominees, a certificate or
certificates for the number of shares of Common Stock to which such holder
shall be entitled, together with cash in lieu of any fraction of a share.
In the event less than all shares represented by such certificate are
converted, a new certificate shall be issued by the Corporation
representing the unconverted shares. Such conversion shall be deemed to
have been made at the close of business on the date of such surrender of
the certificates representing the shares of Series A Preferred Stock to be
converted, and the person entitled to receive the shares of Common Stock
issuable upon such conversion shall be treated for all purposes as the
record holder of such shares of Common Stock on such date.
(f) Reservation of Common Stock. The Corporation shall at all times when the
Series A Preferred Stock shall be outstanding reserve and keep available
(free from preemptive rights) out of its authorized but unissued stock,
for the purpose of issuing upon conversion of the Series A Preferred
Stock, such number of shares of Common Stock as shall then be issuable
upon the conversion of all outstanding Series A Preferred Stock. All
shares of Common Stock so issuable shall, upon issuance, be duly and
validly issued and fully paid and nonassessable. Before taking any action
which would cause an adjustment reducing the Conversion Price below the
then par value of the shares of Common Stock issuable upon conversion of
the Series A Preferred Stock, the Corporation will take any corporate
action which may, in the opinion of its counsel, be necessary in order
that the Corporation may validly and legally issue fully paid and
nonassessable shares of Common Stock at such adjusted Conversion Price.
(g) Notices. Any notice required by the provisions of Sections 2(c), 4 and 5
shall be in writing and shall be deemed effectively given: (i) upon
personal delivery to the party to be notified, (ii) when sent by confirmed
telex or facsimile if sent during normal business hours of the recipient;
if not, then on the next business day, (iii) five business days after
having been sent by registered or certified mail, return receipt
requested, postage prepaid, or (iv) one business day after deposit with a
nationally recognized overnight courier, specifying next day delivery,
with written verification of receipt. All notices shall be addressed to
each holder of record at the address of such holder appearing on the books
of the Corporation.
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(h) Payment of Taxes. The Corporation will pay all taxes (other than taxes
based upon income or gross receipts) and other governmental charges that
may be imposed with respect to the issue or delivery of shares of Common
Stock upon conversion of shares of Series A Preferred Stock, excluding any
tax or other charge imposed in connection with any transfer involved in
the issue and delivery of shares of Common Stock in a name other than that
in which the shares of Series A Preferred Stock so converted were
registered.
5. Antidilution Adjustments. The number and kind of securities issuable upon
the conversion of the Series A Preferred Stock shall be subject to adjustment,
without duplication, from time to time upon the happening of certain events
occurring on or after the Original Issue Date as follows:
(a) Adjustment for Stock Splits and Combinations. In case the Corporation
shall (i) subdivide its outstanding Common Stock into a greater number of
shares, (ii) combine its outstanding Common Stock into a smaller number of
shares, (iii) pay a dividend or make a distribution on its outstanding
Common Stock in shares of its capital stock or (iv) issue by
reclassification of its outstanding Common Stock (whether pursuant to a
merger or consolidation or otherwise) any other shares of capital stock of
the Corporation, the Series A Preferred Stock surrendered for conversion
after the record date fixed by the Board of Directors for such subdivision,
combination, dividend, distribution or reclassification shall be entitled
to receive the aggregate number and kind of shares of capital stock of the
Corporation which, if this Series A Preferred Stock had been converted
immediately prior to such record date at the Conversion Price then in
effect, such holder would have been entitled to receive by virtue of such
subdivision, combination, dividend, distribution or reclassification; and
the Conversion Price shall be deemed to have been adjusted after such
record date to apply to such aggregate number and kind of shares. Such
adjustment shall be made successively whenever any of the events listed
above shall occur.
(b) Adjustment for Common Stock Dividends and Distributions. In case the
Corporation shall pay a dividend or make a distribution on any class of
capital stock of the Corporation in shares of Common Stock, the Conversion
Price in effect immediately prior to the record date for the determination
of stockholders entitled to receive such dividend or distribution shall be
reduced by multiplying such Conversion Price by a fraction of which (i) the
numerator shall be the number of shares of Common Stock outstanding at the
close of business on the day immediately prior to such record date and (ii)
the denominator shall be the sum of such number of shares and the total
number of shares issued in such dividend or other distribution.
(c) Adjustment for Rights to Acquire Common Stock Below Market Price. Subject
to Section 5(m) below, in case the Corporation shall issue to all holders
of Common Stock rights or warrants entitling them to subscribe for or
purchase Common Stock at a price per share less than the current market
price per share (as determined pursuant to Section 5(h) below), the
Conversion Price in effect from and after the record date therefor shall be
reduced so that it shall equal the price determined by multiplying the
Conversion Price in effect immediately prior to such record date by a
fraction, of which (i) the numerator shall be the number of shares of
Common Stock outstanding on such record date plus the number of shares of
Common Stock which the aggregate offering price of the total number of
shares of Common Stock so offered for subscription or purchase would
purchase at such current market price and (ii) the denominator
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shall be the number of shares of Common Stock outstanding on such record
date plus the number of additional shares of Common Stock so offered for
subscription or purchase. For the purpose of this Section 5(c), the
issuance of rights or warrants to subscribe for or purchase securities
convertible into Common Stock shall be deemed to be the issuance of rights
or warrants to purchase the Common Stock into which such securities are
convertible (without regard to any antidilution provision contained therein
for a subsequent adjustment of such number) at an aggregate offering price
equal to the aggregate offering price of such securities plus the minimum
aggregate amount (if any) payable upon (or in connection with) the exercise
of such securities for Common Stock. Such adjustment shall be made
successively whenever such a record date is fixed. In case such rights or
warrants are not issued after such a record date has been fixed, the
Conversion Price shall be readjusted to the Conversion Price which would
have been in effect if such record date had not been fixed.
(d) Adjustment for Distribution of Debt or Assets. In case the Corporation
shall distribute to all holders of Common Stock (whether pursuant to a
merger or consolidation or otherwise) evidences of its indebtedness or
assets (excluding shares of capital stock of the Corporation and cash
dividends out of retained earnings), or rights to subscribe for Common
Stock at a price less than the current market price per share (excluding
those referred to in Section 5(c) above), then in each such case the
Conversion Price in effect from and after the record date therefor shall be
adjusted so that it shall equal the price determined by multiplying the
Conversion Price in effect immediately prior to such record date by a
fraction, of which (i) the numerator shall be the current market price per
share (determined as provided in Section 5(h) below) of the Common Stock on
such record date less the fair market value (as determined by the Board of
Directors, whose determination in good faith shall be conclusive) of the
portion of the evidences of indebtedness or assets so distributed or of
such rights to subscribe applicable to one share of Common Stock and (ii)
the denominator shall be such current market price per share of Common
Stock. Such adjustment shall be made successively whenever any such a
record date is fixed. In case such distribution is not made after such a
record date has been fixed, the Conversion Price shall be readjusted to the
Conversion Price which would have been in effect if such record date had
not been fixed.
(e) Adjustment for Sales of Common Stock Below Market Price (But Above
Conversion Price). If the Corporation shall issue any additional shares of
Common Stock (other than as provided in Sections 5(a) through 5(d) above)
at a price per share less than the current market price per share of Common
Stock but above the Conversion Price in respect of the Series A Preferred
Stock, then the Conversion Price shall be adjusted to the price determined
by multiplying the Conversion Price by a fraction of which (i) the
numerator shall be (A) the sum of (1) the number of shares of Common Stock
outstanding immediately prior to the issuance of such additional shares of
Common Stock multiplied by the current market price and (2) the
consideration, if any, received and deemed received by the Corporation upon
the issuance of such additional shares of Common Stock (B) divided by the
total number of shares of Common Stock outstanding immediately after the
issuance of such additional shares of Common Stock, and (ii) the
denominator shall be the current market price.
(f) Adjustment for Sales of Common Stock Below Conversion Price. If the
Corporation shall issue any additional shares of Common Stock (other than
as provided in Sections 5(a) through 5(e) above) at a price per share less
than the Conversion Price, then the
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Conversion Price shall be adjusted to the price determined by multiplying
the Conversion Price times a fraction of which (i) the numerator shall be
(A) the sum of (1) the number of shares of Common Stock outstanding
immediately prior to the issuance of such additional shares of Common Stock
multiplied by the Conversion Price and (2) the consideration, if any,
received and deemed received by the Corporation upon the issuance of such
additional shares of Common Stock (B) divided by the total number of shares
of Common Stock outstanding immediately after the issuance of such
additional shares of Common Stock, and (ii) the denominator shall be the
Conversion Price.
(g) Certain Determinations.
(i) In case the Corporation shall issue any security or evidence of
indebtedness which is convertible into or exchangeable for Common Stock
("Convertible Security"), or any warrant, option or other rights to
subscribe for or purchase Common Stock or any Convertible Security
(together with Convertible Securities, "Common Stock Equivalent"), or if,
after any such issuance, the price per share for which such additional
shares of Common Stock may be issuable thereunder is amended, then, for
purposes of Sections 5(e) and (f), (A) the maximum number of additional
shares of Common Stock issuable pursuant to all such Common Stock
Equivalents (without regard to any antidilution provision contained therein
for a subsequent adjustment of such number) shall be deemed to have been
issued as of the earlier of (1) the date on which the Corporation shall
enter into a firm contract for the issuance of such Common Stock Equivalent
or (2) the date of actual issuance of such Common Stock Equivalent, and (B)
the aggregate consideration for such maximum number of additional shares of
Common Stock shall be deemed to be the minimum consideration received and
receivable by the Corporation for the issuance of such additional shares of
Common Stock pursuant to such Common Stock Equivalent. No adjustment of
the Conversion Price shall be made under this paragraph upon the issuance
or deemed issuance of any shares of Common Stock pursuant to the exercise
of any conversion or exchange rights of any Convertible Security or
pursuant to the exercise of any warrants, options, or other subscription or
purchase rights, if any adjustments shall previously have been made in the
Conversion Price then in effect upon the issuance of such Convertible
Securities, warrants, options or other rights pursuant hereto.
(ii) The following provisions shall be applicable to making of adjustments in
the Conversion Price hereinbefore provided in Sections 5(c), (d), (e) and
(f):
(A) The consideration received by the Corporation shall be deemed to be the
following:
(1) (x) To the extent that any additional shares of Common Stock or any Common
Stock Equivalents shall be issued for cash consideration, the consideration
received by the Corporation therefor, or, (y) if such additional shares of
Common Stock or Common Stock Equivalents are offered by the Corporation for
subscription, the subscription price, or, (z) if such additional shares of
Common Stock or Common Stock Equivalents are sold to underwriters or
dealers for public offering without a subscription offering, the initial
public offering price, in any such case excluding any amounts paid or
receivable for accrued interest or accrued dividends and without deduction
of any compensation,
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discounts, commissions or expenses paid or incurred by the Corporation for
and in the underwriting of, or otherwise in connection with, the issue
thereof;
(2) To the extent that such issuance shall be for a consideration other than
cash, then, except as herein otherwise expressly provided, the fair market
value of such consideration at the time of such issuance as determined in
good faith by the Board of Directors. In any case in which the
consideration to be received or paid shall be other than cash, the Board of
Directors of the Corporation shall notify promptly each holder of the
Series A Preferred Stock of its determination of the fair market value of
such consideration;
(3) The consideration for any additional shares of Common Stock issuable
pursuant to any Common Stock Equivalents shall be the consideration
received by the Corporation for issuing such Common Stock Equivalents, plus
the additional consideration payable to the Corporation upon the exercise,
conversion or exchange of such Common Stock Equivalents; and
(4) In case of the issuance at any time of any additional shares of Common
Stock or Common Stock Equivalents in payment or satisfaction of any
dividend upon any class of stock other than Common Stock, the Corporation
shall be deemed to have received for such additional shares of Common Stock
or Common Stock Equivalents a consideration equal to the amount of such
dividend so paid or satisfied.
(B) Upon the expiration of the right to convert, exchange or exercise any
Common Stock Equivalent the issuance of which effected an adjustment in the
Conversion Price, if any such Common Stock Equivalent shall not have been
converted, exercised or exchanged, (1) the number of shares of Common Stock
deemed to be issued and outstanding by reason of the fact that they were
issuable upon conversion, exchange or exercise of any such Common Stock
Equivalent shall no longer be computed as set forth above, (2) the
Conversion Price shall forthwith be readjusted and thereafter be the price
which it would have been (but reflecting any other adjustments in the
Conversion Price made pursuant to the provisions of this Section 5 after
the issuance of such Common Stock Equivalent) had the adjustment of the
Conversion Price made upon the issuance or sale of such Common Stock
Equivalent been made on the basis of the issuance only of the number of
additional shares of Common Stock actually issued upon exercise, conversion
or exchange of such Common Stock Equivalent, and (3) thereupon only the
number of additional shares of Common Stock actually so issued shall be
deemed to have been issued and only the consideration actually received by
the Corporation (computed as in clause (A) above) shall be deemed to have
been received by the Corporation.
(iii) The number of shares of Common Stock at any time outstanding shall not
include any shares thereof then directly or indirectly owned or held by or
for the account of the Corporation or its subsidiaries.
(iv) No adjustments of the Conversion Price shall be made pursuant to Sections
5(c), (e), and (f) upon the issuance of shares of Common Stock that are
issued pursuant to (x) any employee benefit plan, program or policy
approved by the Board of Directors of the Corporation, including thrift
plans, stock purchase plans, stock bonus plans, stock options plans,
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employee stock ownership plans or other incentive or profit sharing
arrangements, for the benefit of employees, officers or directors of the
Corporation or its "affiliates" (as defined in Rule 12b-2 under the
Securities Exchange Act of 1934, as amended) or (y) Acquisitions made by
the Corporation.
(h) Current Market Price. For the purpose of any computation under Sections
5(c), (d) and (e) above, the current market price shall be deemed to be the
following:
(i) With respect to a bonafide underwritten public offering, the offering price
agreed to by the underwriter;
(ii) With respect to binding agreements made by the Corporation to issue shares
of Common Stock for a price that is (A) determined as of the date of the
agreement with reference to a market price contemporaneous with the date of
the binding agreement and (B) without full adjustment to the Closing Price
on the day of issuance, the price as determined by such binding agreement;
or
(iii) With respect to all other situations, the average of the daily Closing
Prices for 30 consecutive trading days commencing 45 trading days before
the date in question.
(i) Deferral of Share Issuance. In any case in which this Section 5 shall
require that an adjustment as a result of any event becomes effective from
and after a record date, the Corporation my elect to defer until after the
occurrence of such event (i) issuing to the holder of Series A Preferred
Stock converted after such record date and before the occurrence of such
event the additional shares of Common Stock issuable upon such conversion
over and above the shares issuable on the basis of the Conversion Price in
effect immediately prior to adjustment and (ii) paying to such holder any
amount in cash in lieu of a fractional share of Common Stock pursuant to
Section 4(d) above. In lieu of the shares the issuance of which is
deferred pursuant to this Section 5(i), the Corporation shall issue or
cause a transfer agent to issue due bills or other appropriate evidence of
the right to receive such shares promptly after the occurrence of such
event.
(j) De Minimis Adjustments. Any adjustment in the Conversion Price otherwise
required by this Section 5 to be made may be postponed until the date of
the next adjustment otherwise required to be made if such adjustment
(together with any other adjustments postponed pursuant to this Section 5
and not theretofore made) would not require an increase or decrease of more
than 1% in such price, but in the case of an adjustment required as a
result of a dividend or distribution on any class of capital stock of the
Corporation in shares of Common Stock, such adjustment must be made no
later than the earlier of (a) 3 years after the date of the stock dividend
or distribution or (b) the date as of which the aggregate stock dividends
or distributions for which adjustment of the Conversion Price has not
previously been made total at least 3% of the issued and outstanding
capital stock of the Corporation with respect to which such stock dividends
or distributions were made. All calculations under this Section 5 shall be
made to the nearest cent or to the nearest 1/100th of a share, as the case
may be.
(k) Applicability to Other Shares. In case at any time, as a result of an
adjustment made pursuant to Section 5(a)(iii) or (iv) above, the holders of
the Series A Preferred
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Stock thereafter surrendered for conversion shall become entitled to
receive any shares of capital stock of the Corporation other than Common
Stock, the number and kind of such other shares so receivable upon
conversion of Series A Preferred Stock shall thereafter be subject to
adjustment from time to time in a manner and on terms as nearly equivalent
as practicable to the provisions with respect to the Common Stock contained
in clauses (a) to (g), inclusive, above, and the other provisions of this
Section 5 with respect to the Common Stock shall apply on like terms to any
such other shares.
(l) Board Determinations. The Board of Directors may make such reductions in
the Conversion Price, in addition to those required by this Section 5, as
shall be determined by the Board of Directors to be advisable in order to
avoid taxation so far as practicable of any dividend of stock or stock
rights or any event treated as such for federal income tax purposes to the
recipients. The Board of Directors shall have the power to resolve any
ambiguity or correct any error in this Section 5, and (absent manifest
error by the Board of Directors) its action in so doing shall be final and
conclusive.
(m) Rights Plan. With respect to any stockholder rights plan (the "Rights
Plan") pursuant to which "rights" would be issued or issuable to
stockholders of the Corporation, no adjustment shall be made to the
Conversion Price as a result of such Rights Plan in the event that an
appropriate amount of "rights" are either (i) reserved for issuance in
connection with the issuance of Conversion Shares to the holders of Series
A Preferred Stock or (ii) are issued to holders of Series A Preferred Stock
on an as converted basis. Unless rights are so issued pursuant to clause
(ii) of this Section 5(m), if and when the rights become exercisable, an
appropriate adjustment to the Conversion Price in accordance with the terms
of the Rights Plan shall be made pursuant to this Section 5.
(n) Notices of Adjustment. In each case of an adjustment or readjustment of
the Conversion Price for the number of shares of Common Stock or other
securities issuable upon conversion of shares of Series A Preferred Stock,
if the Series A Preferred Stock is then convertible pursuant to Section 4,
the Corporation, at its expense, shall compute such adjustment or
readjustment in accordance with the provisions hereof and prepare a
certificate showing such adjustment or readjustment, and shall deliver such
certificate to each registered holder of Series A Preferred Stock. The
certificate shall set forth such adjustment or readjustment, showing in
detail the facts upon which such adjustment or readjustment is based,
including (without limitation) a statement of (i) the consideration
received or deemed to be received by the Corporation for any additional
securities issued or sold or deemed to have been issued or sold, (ii) the
Conversion Price at the time in effect, (iii) the number of additional
securities and (iv) the type and amount, if any, of other property which at
the time would be received upon conversion of the Series A Preferred Stock.
(o) Notices of Record Date. Upon (i) any taking by the Corporation of a record
of the holders of any class of securities for the purpose of determining
the holders thereof who are entitled to receive any dividend or other
distribution or (ii) other capital reorganization of the Corporation, any
reclassification or recapitalization of the capital stock of the
Corporation, any merger or consolidation of the Corporation with or into
any other corporation, or any voluntary or involuntary dissolution,
liquidation or winding up of the Corporation, the Corporation shall send to
each holder of the Series A Preferred Stock at least 20 calendar days
13
<PAGE>
prior to the record date specified therein a notice specifying (A) the date
on which any such record is to be taken for the purpose of such dividend or
distribution and a description of such dividend or distribution, (B) the
date on which any such reorganization, reclassification, transfer,
consolidation, merger, dissolution, liquidation or winding up is expected
to become effective, and (C) the date, if any, that is to be fixed as to
when the holders of record of Common Stock (or other securities) shall be
entitled to exchange their shares of Common Stock (or other securities) for
securities or other property deliverable upon such reorganization,
reclassification, transfer, consolidation, merger, dissolution, liquidation
or winding up.
THE REMAINDER OF THIS PAGE INTENTIONALLY BLANK.
14
<PAGE>
IN WITNESS WHEREOF, QUANTA SERVICES, INC. has caused its corporate seal to
be affixed and this Certificate to be signed by its President and its Secretary
this 21st day of September, 1999.
QUANTA SERVICES, INC.
By: /s/ John R. Colson
------------------
John R. Colson, President
By: /s/ Brad Eastman
----------------
Brad Eastman, Secretary
SIGNATURE PAGE TO
CERTIFICATE OF DESIGNATION
15
<PAGE>
EXHIBIT 5.1
November 12, 1999
Quanta Services, Inc.
1360 Post Oak Blvd., Suite 2100
Houston, Texas 77056
Ladies and Gentlemen:
The undersigned is Vice President, Secretary and General Counsl at
Quanta Services, Inc., a Delaware corporation (the "COMPANY"), in connection
with the Company's registration under the Securities Act of 1933, as amended
(the "ACT"), of 2,034,849 shares of common stock, par value $0.00001 per share
(the "SHARES"), of the Company which may be offered from time to time under the
Company's Registration Statement on Form S-3 (the "REGISTRATION STATEMENT") to
be filed with the Securities and Exchange Commission on or about November 12,
1999, by the stockholder named in such Registration Statement (the "SELLING
STOCKHOLDER").
In reaching the opinions set forth herein, the undersigned has examined and
is familiar with originals or copies, certified or otherwise identified to my
satisfaction, of such documents and records of the Company and such statutes,
regulations and other instruments as I deemed necessary or advisable for
purposes of this opinion, including (i) the Registration Statement, (ii) the
Amended and Restated Certificate of Incorporation of the Company, as filed with
the Secretary of State of the State of Delaware, (iii) the Bylaws of the
Company, and (iv) certain minutes of meetings of, and resolutions adopted by,
the Board of Directors of the Company.
The undersigned has assumed that (i) all signatures on all documents
I reviewed are genuine, (ii) all documents submitted to me as originals are
true and complete, (iii) all documents submitted to me as copies are true and
complete copies of the originals thereof, and (iv) all persons executing and
delivering the documents I examined were competent to execute and deliver such
documents.
Based on the foregoing, and having due regard for the legal considerations
the undersigned deems relevant, I am of the opinion that the Shares which are to
be sold and delivered by the Selling Stockholder, when delivered by the Selling
Stockholder, will be duly authorized, validly issued, fully paid and non-
assessable.
This opinion is limited in all respects to the laws of the State of
Texas, the Delaware General Corporation Law and the federal laws of the United
States of America.
This opinion letter may be filed as an exhibit to the Registration
Statement. In giving this consent, the undersigned does not thereby admit that
he comes within the category of persons whose consent is required under Section
7 of the Act or the rules and regulations of the Commission promulgated
thereunder.
Very truly yours,
/s/ Brad Eastman
Brad Eastman
Vice President, Secretary and General Counsel
<PAGE>
EXHIBIT 10.12
================================================================================
SECURITIES PURCHASE AGREEMENT
BETWEEN
QUANTA SERVICES, INC.
AND
UTILICORP UNITED INC.
DATED AS OF SEPTEMBER 21, 1999
================================================================================
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page No.
<S> <C> <C>
ARTICLE I DEFINITIONS............................................. 1
Section 1.01 Definitions............................................. 1
Section 1.02 Accounting Procedures and Interpretation................ 8
ARTICLE II AGREEMENT TO SELL AND PURCHASE............................... 8
Section 2.01 Authorization of Shares................................. 9
Section 2.02 Sale and Purchase....................................... 9
Section 2.03 Closing................................................. 9
Section 2.04 Delivery................................................ 9
Section 2.05 Conversion.............................................. 9
ARTICLE III REPRESENTATIONS AND WARRANTIES OF THE COMPANY........... 9
Section 3.01 Corporate Existence..................................... 9
Section 3.02 Company SEC Documents................................... 10
Section 3.03 No Material Adverse Change.............................. 10
Section 3.04 Litigation.............................................. 11
Section 3.05 No Breach............................................... 11
Section 3.06 Authority............................................... 11
Section 3.07 Approvals............................................... 12
Section 3.08 Employee Benefit Matters................................ 12
Section 3.09 Taxes................................................... 12
Section 3.10 Assets.................................................. 12
Section 3.11 No Material Misstatements............................... 12
Section 3.12 Investment Company Act.................................. 13
Section 3.13 Public Utility Holding Company Act...................... 13
Section 3.14 No Violation............................................ 13
Section 3.15 Environmental Matters................................... 13
Section 3.16 Insurance............................................... 14
Section 3.17 Capitalization.......................................... 14
Section 3.18 Conversion Shares....................................... 14
Section 3.19 Certain Fees............................................ 15
Section 3.20 Licenses................................................ 15
</TABLE>
i
<PAGE>
<TABLE>
<S> <C> <C>
Section 3.21 Undisclosed Liabilities................................. 15
Section 3.22 Labor Relations......................................... 15
Section 3.23 Year 2000 Compliance.................................... 15
ARTICLE IV REPRESENTATIONS AND WARRANTIES OF THE PURCHASER......... 16
Section 4.01 Investment.............................................. 16
Section 4.02 Nature of Purchaser..................................... 16
Section 4.03 Receipt of Information; Authorization................... 17
Section 4.04 Anti-Hedging............................................ 17
Section 4.05 Restricted Securities................................... 17
Section 4.06 Certain Fees............................................ 17
Section 4.07 No Implied Representations.............................. 17
ARTICLE V CONDITIONS TO CLOSING................................... 17
Section 5.01 Conditions to the Purchaser's Obligation to Purchase
the Shares.............................................. 18
Section 5.02 Conditions to Obligations of the Company................ 20
ARTICLE VI COVENANTS............................................... 20
Section 6.01 Financial Statements and Reports........................ 20
Section 6.02 Maintenance, Etc........................................ 22
Section 6.03 Further Assurances...................................... 22
Section 6.04 Efforts; Performance of Obligations..................... 22
Section 6.05 Shares.................................................. 22
Section 6.06 Insurance............................................... 22
Section 6.07 Use of Proceeds......................................... 23
Section 6.08 Notification of Certain Matters......................... 23
Section 6.09 Co-operation upon Purchaser's Exit...................... 23
Section 6.10 Co-operation Upon Purchaser's Acquisition of Common
Stock................................................... 23
Section 6.11 Assistance in Purchasing Common Stock................... 23
Section 6.12 Extent of Permitted Dilution............................ 23
Section 6.13 Termination of Certain Covenants........................ 23
Section 6.14 Enforceability of Basic Documents....................... 24
Section 6.15 Nomination of UtiliCorp Director Designee(s)............ 24
</TABLE>
ii
<PAGE>
<TABLE>
<S> <C> <C>
ARTICLE VII MISCELLANEOUS........................................... 24
Section 7.01 Interpretation and Survival of Provisions............... 24
Section 7.02 Indemnification, Costs and Expenses..................... 24
Section 7.03 No Waiver; Modifications in Writing..................... 27
Section 7.04 Binding Effect; Assignment.............................. 27
Section 7.05 Replacement Securities.................................. 28
Section 7.06 Communications.......................................... 28
Section 7.07 Governing Law........................................... 29
Section 7.08 Arbitration............................................. 29
Section 7.09 Execution in Counterparts............................... 29
Exhibits:
Exhibit A - Certificate of Designation
Exhibit B - Form of Opinions of Counsel to the Company
Exhibit C - Investor's Rights Agreement
Exhibit D - Fee Letter Agreement
Exhibit E - Strategic Alliance Agreement
Exhibit F - Stockholder's Voting Agreement
Schedules:
Schedule 3.01 - Subsidiaries
Schedule 3.03 - Material Adverse Change
Schedule 3.04 - Litigation
Schedule 3.05 - No Breach
Schedule 3.07 - Approvals
Schedule 3.09 - Taxes
Schedule 3.15 - Environmental Matters
Schedule 3.16 - Insurance
Schedule 3.17 - Capitalization
Schedule 3.20 - Licenses
Schedule 3.21 - Undisclosed Liabilities
Schedule 3.22 - Labor Relations
</TABLE>
iii
<PAGE>
SECURITIES PURCHASE AGREEMENT
-----------------------------
SECURITIES PURCHASE AGREEMENT, dated as of September 21, 1999 (this
"Agreement"), by and between QUANTA SERVICES, INC., a Delaware corporation (the
"Company"), and UTILICORP UNITED INC., a Delaware corporation ("Purchaser").
In consideration of the mutual covenants and agreements set forth herein
and for good and valuable consideration, the receipt of which is hereby
acknowledged, the parties agree as follows:
ARTICLE I.
DEFINITIONS
Section 1.01 Definitions. As used in this Agreement, and unless the context
requires a different meaning, the following terms have the meanings indicated:
"AAA" shall have the meaning specified in Section 7.08.
"Action" against a Person means any lawsuit, action, proceeding,
investigation or complaint before any Governmental Authority, mediator or
arbitrator.
"Affiliate" of any Person shall mean (i) any Person directly or indirectly
controlled by, controlling or under common control with such first Person, (ii)
any director or officer of such first Person or of any Person referred to in
clause (i) above and (iii) if any Person in clause (i) above is an individual,
any member of the immediate family (including parents, spouse and children) of
such individual and any trust whose principal beneficiary is such individual or
one or more members of such immediate family and any Person who is controlled by
any such member or trust. For purposes of this definition, any Person which
owns directly or indirectly 20% or more of the securities having ordinary voting
power for the election of directors or other governing body of a corporation or
20% or more of the partnership or other ownership interests of any other Person
(other than as a limited partner of such other Person) will be deemed to
"control" (including, with its correlative meanings, "controlled by" and "under
common control with") such corporation or other Person.
"Arbitrators" shall have the meaning specified in Section 7.08.
"Basic Documents" means, collectively, this Agreement, the Investor's
Rights Agreement, the Strategic Alliance Agreement, the Certificate of
Designation, the Stockholder's Voting Agreement and any and all other agreements
or instruments executed and delivered to Purchaser by the Company or any
Subsidiary or Affiliate of the Company on even date herewith, or any amendments,
supplements, continuations or modifications thereto.
1
<PAGE>
"Beneficial Ownership," "Beneficial Owner" and "Beneficially Own" shall
have the meanings ascribed to them in Rule 13d-3 under the Exchange Act in
effect on the date hereof.
"Board of Directors" means the Board of Directors of the Company.
"Business Day" means any day other than a Saturday, Sunday, or a legal
holiday for commercial banks in Houston, Texas, or New York, New York.
"Capital Stock" of any Person means any and all shares, interests,
participations, or other equivalents (however designated) of, or rights,
warrants, or options to purchase, corporate stock or any other equity interest
(however designated) of or in such Person.
"CERCLA" shall have the meaning specified in the definition of
Environmental Laws in this Section 1.01.
"Certificate of Designation" shall have the meaning specified in Section
2.01.
"Change in Control" shall be deemed to have occurred if (i) any Person
acquires, directly or indirectly, the Beneficial Ownership of any voting
security of the Company and immediately after such acquisition such Person is,
directly or indirectly, the Beneficial Owner of voting securities representing
50% or more of the total voting power of all the then outstanding voting
securities of Company entitled to vote generally in the election of directors;
or (ii) individuals who on the Closing Date constitute the Company's Board of
Directors, or their successors approved in accordance with the terms below,
cease for any reason to constitute at least a majority thereof, unless the
election or nomination for the election by the Company's stockholders of each
new director was approved by vote of at least 2/3rds of the directors then still
in office who were directors on the Closing Date or their successors approved in
accordance with the terms hereof.
"Claims" shall have the meaning specified in the definition of
Environmental Claims in this Section 1.01.
"Closing" shall have the meaning specified in Section 2.03.
"Closing Date" means the date upon which a Closing occurs as provided in
Section 2.03.
"Code" means the Internal Revenue Code of 1986, as amended from time to
time, and any successor statute.
"Commission" means the United States Securities and Exchange Commission.
"Common Stock" means the common stock, par value $0.00001 per share, of the
Company or such other class of securities as shall, after the date of this
Agreement, constitute the common equity of the Company.
"Company" shall have the meaning specified in the introductory paragraph.
"Company SEC Documents" shall have the meaning specified in Section 3.02.
2
<PAGE>
"Consolidated Net Income" means, for any period, the net income (or loss),
after provision for taxes, of the Company and its Subsidiaries on a consolidated
basis for such period, determined in accordance with GAAP.
"Consolidated Subsidiaries" shall mean each Subsidiary of the Company
(whether now existing or hereafter created or acquired), the financial
statements of which shall be (or should have been) consolidated with the
financial statements of the Company in accordance with GAAP.
"Conversion Shares" shall mean those shares of Capital Stock as such term
is defined in Section 2.01.
"Delist" or "Delisted" shall mean the delisting of the shares of stock of a
corporation from the exchange such shares are traded on.
"Dispute" shall have the meaning specified in Section 7.08.
"Effective Date" means the date this Agreement is executed by all the
parties hereto.
"Employee Plan" means any employee benefit plan, program or policy
including thrift plans, stock purchase plans, stock bonus plans, stock options
plans, employee stock ownership plans or other incentive or profit sharing
arrangements for the benefit of employees, officers or directors of the Company
or its Affiliates, with respect to which the Company or any ERISA Affiliate may
have any liability or any obligation to contribute, including a Plan or a
Multiemployer Plan.
"Enron Affiliates" means Enron Capital & Trade Resources Corp., a Delaware
corporation, Joint Energy Development Investments II Limited Partnership, a
Delaware limited partnership, and ECT Merchant Investment Corp., a Delaware
corporation, or other persons succeeding to an interest in the Enron Notes.
"Enron Notes" means those certain Convertible Subordinated Notes issued by
the Company to Enron Capital & Trade Resources Corp. in the amount of
$12,337,500 and Joint Energy Development Investments II Limited Partnership in
the amount of $37,012,500, dated in each case as of October 5, 1998, pursuant to
that certain Securities Purchase Agreement, dated September 29, 1998, among
certain of the Enron Affiliates and the Company (the "Enron Purchase
Agreement").
"Enron Purchase Agreement" shall have the meaning specified in the
definition of Enron Notes in this Section 1.01.
"Environmental Claims" means any and all administrative, regulatory or
judicial actions, suits, demands, demand letters, claims, liens, notices of non-
compliance or violations, formal investigations or proceedings relating to any
Environmental Law ("Claims") or any permit issued under any Environmental Law,
including, without limitation, (i) any and all Claims by governmental or
regulatory authorities for enforcement, cleanup, removal, response, remedial or
other actions or damages pursuant to any applicable Environmental Law and (ii)
any and all Claims by any third party seeking damages, contribution,
indemnification, cost recovery,
3
<PAGE>
compensation or injunctive relief resulting from a release or threatened release
of Hazardous Materials.
"Environmental Laws" means any and all Government Requirements pertaining
to the environment in effect in any and all jurisdictions in which the Company
or any Subsidiary is conducting or at any time has conducted business, or where
any Property of the Company or any Subsidiary is located, including, without
limitation, the Oil Pollution Act of 1990 ("OPA"), as amended, the Clean Air
Act, as amended, the Comprehensive Environmental, Response, Compensation, and
Liability Act of 1980 ("CERCLA"), as amended, the Federal Water Pollution
Control Act, as amended, the Occupational Safety and Health Act of 1970, as
amended, the Resource Conservation and Recovery Act of 1976 ("RCRA"), as
amended, the Safe Drinking Water Act, as amended, the Toxic Substances Control
Act, as amended, the Superfund Amendments and Reauthorization Act of 1986, as
amended, the Hazardous Materials Transportation Act, as amended, and other
environmental conservation or protection laws. As used in the provisions hereof
relating to Environmental Laws, the term "oil" has the meaning specified in OPA;
the terms "hazardous substance" and "release" (or "threatened release") have the
meanings specified in CERCLA, and the terms "solid waste" and "disposal" (or
"disposed") have the meanings specified in RCRA; provided, however, that (i) in
the event either OPA, CERCLA or RCRA is amended so as to broaden the meaning of
any term defined thereby, such broader meaning shall apply subsequent to the
effective date of such amendment, and (ii) to the extent the laws of the state
in which any Property of the Company or any Subsidiary is located establish a
meaning for "oil," "hazardous substance," "release," "solid waste" or "disposal"
which is broader than that specified in either OPA, CERCLA or RCRA, such broader
meaning shall apply.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended from time to time, and any successor statute.
"ERISA Affiliate" shall mean each trade or business (whether or not
incorporated) which together with the Company or any Subsidiary of the Company
would be deemed to be a "single employer" within the meaning of Section
4001(b)(1) of ERISA or subsections (b), (c), (m) or (o) of section 414 of the
Code.
"Exchange Act" means the Securities Exchange Act of 1934, as amended from
time to time, and the rules and regulations of the Commission promulgated
thereunder.
"Exchangeable Securities" shall mean a security of any type, including but
not limited to debt, warrants or other rights, issued by the Company and
representing the right to acquire shares of Common Stock from the Company upon
exchange, conversion or exercise thereof.
"Fee" shall have the meaning specified in Section 5.01(h).
"Financial Statements" means the financial statement or statements
described or referred to in Section 3.02.
"GAAP" means generally accepted accounting principles in the United States
of America in effect from time to time.
4
<PAGE>
"Governmental Authority" shall include the country, the state, county, city
and political subdivisions in which any Person or such Person's Property is
located or which exercises valid jurisdiction over any such Person or such
Person's Property, and any court, agency, department, commission, board, bureau
or instrumentality of any of them including monetary authorities which exercises
valid jurisdiction over any such Person or such Person's Property. Unless
otherwise specified, all references to Governmental Authority herein shall mean
a Governmental Authority having jurisdiction over, where applicable, the
Company, the Subsidiaries or any of their Property or any Purchaser.
"Government Requirement" means any law, statute, code, ordinance, order,
determination, rule, regulation, judgment, decree, injunction, franchise,
permit, certificate, license, authorization or other directive or requirement
(in the case of banking regulatory authorities whether or not having the force
of law), including without limitation, Environmental Laws, energy regulations
and occupational, safety and health standards or controls of any Governmental
Authority.
"Hazardous Material" shall have the meaning assigned to the term Hazardous
Substance in the Comprehensive Environmental Response Compensation and Liability
Act of 1980, as amended by the Superfund Amendments and Reauthorization Acts of
1986, and shall include any substance defined as "hazardous" or "toxic" or words
used in place thereof under any Environmental Law applicable to the Company or
any of its Subsidiaries.
"HSR Fees" shall have the meaning specified in Section 5.01(h).
"Indemnified Party" shall have the meaning specified in Section 7.02(d).
"Indemnity Matters" shall have the meaning specified in Section 7.02(a).
"Investor's Rights Agreement" means the Investor's Rights Agreement, to be
entered into on the Closing Date, between the Company and Purchaser relating to
the registration of the Conversion Shares for public distribution, among other
things.
"Legal Fees" shall have the meaning specified in Section 5.01(h).
"Licenses" shall have the meaning specified in Section 3.20.
"Lien" means any interest in Property securing an obligation owed to, or a
claim by, a Person other than the owner of the Property, whether such interest
is based on the common law, statute or contract, and whether such obligation or
claim is fixed or contingent, and including but not limited to the lien or
security interest arising from a mortgage, encumbrance, pledge, security
agreement, conditional sale or trust receipt or a lease, consignment or bailment
for security purposes. The term "Lien" shall include reservations, exceptions,
encroachments, easements, rights of way, covenants, conditions, restrictions,
leases and other title exceptions and encumbrances affecting Property. For the
purpose of this Agreement, a Person shall be deemed to be the owner of any
Property which it has acquired or holds subject to a conditional sale agreement,
or leases under a financing lease or other arrangement pursuant to which title
to the Property has been retained by or vested in some other Person in a
transaction intended to create a financing.
5
<PAGE>
"Material Adverse Effect" means any material and adverse effect on (i) the
assets, liabilities, financial condition, business, operations or affairs of the
Company and its Subsidiaries taken as a whole, from those reflected in the
Financial Statements or from the facts represented or warranted in any Basic
Document, (ii) the ability of the Company and its Subsidiaries taken as a whole
to carry out their business as of the Closing Date or as proposed as of the
Closing Date to be conducted to meet their obligations under the Basic Documents
on a timely basis or (iii) the ability of the Company to consummate the
transactions under this Agreement and the other Basic Documents.
"Multiemployer Plan" means a Plan defined as such in Section 3(37) or
4001(a)(3) of ERISA.
"NYSE" shall have the meaning specified in Section 3.06.
"Obligations" means any and all amounts, liabilities and obligations owing
from time to time by Company to Purchaser, pursuant to any of the Basic
Documents and all renewals, extensions and/or rearrangements thereof, whether
such amounts, liabilities or obligations be liquidated or unliquidated, now
existing or hereafter arising, absolute or contingent.
"OPA" shall have the meaning specified in the definition of Environmental
Laws in this Section 1.01.
"Person" means any individual, corporation, company, voluntary association,
partnership, joint venture, trust, limited liability company, unincorporated
organization or government or any agency, instrumentality or political
subdivision thereof, or any other form of entity.
"Plan" means any employee pension benefit plan, as defined in Section 3(2)
of ERISA, which (i) is currently or hereafter sponsored, maintained or
contributed to by the Company, any Subsidiary or an ERISA Affiliate or (ii) was
at any time during the preceding six calendar years sponsored, maintained or
contributed to, by the Company, any Subsidiary or an ERISA Affiliate.
"Property" means any interest in any kind of property or asset, whether
real, personal or mixed, or tangible or intangible.
"Public Offering" shall mean a firm commitment underwritten public offering
registered under the Securities Act pursuant to a registration statement which
has been declared effective by the Commission under the Securities Act.
"Purchaser" has the meaning set forth in the introductory paragraph.
"RCRA" shall have the meaning specified in the definition of Environmental
Laws in this Section 1.01.
"Related Parties" shall have the meaning specified in Section 7.02(a).
"Responsible Officer" means, as to any Person, the Chief Executive Officer,
the President or any Vice President of such Person and the Chief Financial
Officer of such Person.
6
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Unless otherwise specified, all references to a Responsible Officer herein shall
mean a Responsible Officer of the Company.
"Securities" means the Series A Preferred Stock and, when issued, the
Conversion Shares.
"Securities Act" means the Securities Act of 1933, as amended from time to
time, and the rules and regulations of the Commission promulgated thereunder.
"Senior Credit Agreement" means the Credit Agreement dated as of June 14,
1999, among the Company, the Senior Loan Agent, and the Senior Lenders, as it
may from time to time be amended, modified, supplemented or increased from time
to time, and any Credit Agreement or similar agreement executed in connection
with any refinancing of the Senior Loan.
"Senior Indebtedness" shall mean all obligations, including the obligation
to pay principal and accrued interest, arising under the Senior Loan Documents.
"Senior Lenders" means each of the lenders from time to time under the
Senior Credit Agreement.
"Senior Loan" shall mean, collectively, any advance or advances of
principal made by the Senior Lenders to the Company under the Senior Credit
Agreement and the other Senior Loan Documents and all accrued but unpaid
interest thereon.
"Senior Loan Agent" means NationsBank, N.A. doing business as Bank of
America, N.A., and any substitute agent, as agent under the Senior Credit
Agreement, and any agent, if any, under any refinancing arrangement of the
Senior Loan.
"Senior Loan Documents" means the Senior Credit Agreement and all
promissory notes, collateral documents and other agreements, documents and
instruments executed or delivered in connection therewith, as such agreements
may be amended, modified or supplemented from time to time.
"Series A Preferred Stock" means the Series A convertible preferred stock,
par value $0.00001 per share, of the Company to be issued to Purchaser pursuant
to Article II of this Agreement.
"Share Calculation Date" shall have the meaning specified in Section 3.17.
"Share Issuance Obligations" shall have the meaning specified in Section
3.17.
"Shares" shall have the meaning specified in Section 2.01.
"Special Entity" means any joint venture, limited liability company or
partnership, general or limited partnership or any other type of partnership or
company other than a corporation, in which a Person or one or more of its other
Subsidiaries is a member, owner, partner or joint venturer and owns, directly or
indirectly, at least a majority of the equity of such entity or controls such
entity, but excluding any tax partnerships that are not classified as
7
<PAGE>
partnerships under state law. For purposes of this definition, any Person which
owns directly or indirectly an equity investment in another Person which allows
the first Person to manage or elect managers who manage the normal activities of
such second Person will be deemed to "control" such second Person (e.g., a sole
general partner controls a limited partnership).
"Stockholders Rights Plan" means any plan adopted by the Company which (a)
(i) grants to the Company's then-current stockholders the right (in whatever
form) to purchase or otherwise obtain additional stock in the Company, or (ii)
otherwise deters or thwarts (or attempts to deter or thwart) an unsolicited
offer by a third party to acquire control of the Company and (b) could have the
effect of diluting the Purchaser's then-existing percentage interest in the
Company.
"Stockholder's Voting Agreement" means the Stockholder's Voting Agreement,
to be entered into on the Closing Date, among Purchaser, the Company, and
certain stockholders of the Company relating to the vote by such stockholders at
meetings of stockholders.
"Strategic Alliance Agreement" means the Strategic Alliance Agreement, to
be entered into on the Closing Date, between the Company and Purchaser regarding
the provision by the Company of services to Purchaser, among other things.
"Subsidiary" means (i) any corporation of which at least a majority of the
outstanding shares of stock having by the terms thereof ordinary voting power to
elect a majority of the board of directors of such corporation (irrespective of
whether or not at the time stock of any other class or classes of such
corporation shall have or might have voting power by reason of the happening of
any contingency) is at the time directly or indirectly owned or controlled by a
Person or one or more of its Subsidiaries or by a Person and one or more of its
Subsidiaries and (ii) any Special Entity. Unless otherwise indicated herein,
each reference to the term "Subsidiary" shall mean a Subsidiary of the Company.
"UtiliCorp's Fully Diluted Ownership Ratio" shall have the meaning
specified in subsection 3(b)(ii) of the Certificate of Designation.
"Year 2000 Compliant" shall have the meaning specified in Section 3.23.
Section 1.02 Accounting Procedures and Interpretation. Unless otherwise
specified herein, all accounting terms used herein shall be interpreted, all
determinations with respect to accounting matters hereunder shall be made, and
all Financial Statements and certificates and reports as to financial matters
required to be furnished to Purchaser hereunder shall be prepared, in accordance
with GAAP applied on a consistent basis during the periods involved (except as
may be indicated in the Certificate of Designation or, in the case of unaudited
statements, as permitted by Form 10-Q promulgated by the Commission) and in
compliance as to form in all material respects with applicable accounting
requirements and with the published rules and regulations of the Commission with
respect thereto.
ARTICLE II.
AGREEMENT TO SELL AND PURCHASE
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Section 2.01 Authorization of Shares. On or prior to the Closing, the
Company shall have authorized (a) the initial sale and issuance to Purchaser of
1,860,000 shares of Series A Preferred Stock (the "Shares") and (b) the issuance
of shares of Common Stock upon conversion of the Shares (the "Conversion
Shares"). The Shares and the Conversion Shares shall have the rights,
preferences, privileges and restrictions set forth in the Certificate of
Designation, Rights, and Limitations of the Series A Preferred Stock of the
Company in the form attached hereto as Exhibit A (the "Certificate of
Designation").
Section 2.02 Sale and Purchase. Subject to the terms and conditions hereof,
at the Closing (as defined in Section 2.03 below) the Company hereby agrees to
issue and sell to Purchaser, and Purchaser agrees to purchase from the Company,
the Shares having a total purchase price of $186,000,000 at a purchase price of
$100.00 per Share.
Section 2.03 Closing. The execution of the Basic Documents, delivery of the
certificate(s) representing the Shares, payment by Purchaser of the required
consideration and all other instruments required by this Agreement (the
"Closing") shall take place at 10:00 a.m. on the date of execution at the
offices of the Company, 1360 Post Oak Boulevard, Suite 2100, Houston, Texas
77056, or at such other time or place as the Company and Purchaser may mutually
agree (such date is hereinafter referred to as the "Closing Date").
Section 2.04 Delivery. At the Closing, subject to the terms and conditions
hereof, the Company will deliver to Purchaser all of the Shares by delivery of a
certificate or certificates evidencing the Shares to be purchased at the
Closing, free and clear of any liens, encumbrances or interests of any other
party other than those incurred by action or inaction of the Purchaser or its
Affiliates, and Purchaser will make payment to the Company of the purchase price
therefor by wire transfer of immediately available funds to an account
designated by the Company.
Section 2.05 Conversion. Purchaser shall have the right, at its option, to
convert shares of Series A Preferred Stock into shares of Common Stock upon the
terms and conditions (including antidilution adjustments) as more fully
specified in the Certificate of Designation.
ARTICLE III.
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
The Company represents and warrants to Purchaser which representations and
warranties shall survive the Closing for a period of two years, as follows:
Section 3.01 Corporate Existence. The Company: (i) is a corporation duly
organized, legally existing and in good standing under the laws of the State of
Delaware; (ii) has all requisite power, and has all material governmental
licenses, authorizations, consents and approvals necessary to own its assets and
carry on its business as its business is now being or as its business is
proposed to be conducted; and (iii) is qualified to do business in all
jurisdictions in which the nature of the business conducted by it makes such
qualifications necessary and where failure so to qualify would have a Material
Adverse Effect. Neither the Company nor any of its Subsidiaries is in default in
the performance, observance or fulfillment of any provision of, in the case of
the Company, its Certificate of Incorporation, as amended and restated, or
Bylaws, or, in
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the case of any Subsidiary, its Certificate of Incorporation, Bylaws or other
organizational documents. Schedule 3.01 identifies each Subsidiary of the
Company and the ownership of all outstanding Capital Stock of each such
Subsidiary. Each of the Company's Subsidiaries that is a corporation is a
corporation duly organized, validly existing and in good standing under the laws
of the State or other jurisdiction of its incorporation and has all requisite
power, and has all material governmental licenses, authorizations, consents and
approvals necessary to own its assets and carry on its business as now being or
as proposed to be conducted. Each of the Company and each of its Subsidiaries
that is a corporation is duly qualified or licensed and in good standing as a
foreign corporation, and is authorized to do business, in each jurisdiction in
which the ownership or leasing of its respective properties or the character of
its respective operations makes such qualification necessary, except where the
failure to obtain such qualification, license, authorization or good standing
would not have a Material Adverse Effect. Each Subsidiary of the Company that is
not a corporation has been duly formed and is duly qualified or licensed and
authorized to do business in each jurisdiction in which the ownership or leasing
of its respective properties or the character of its respective operations makes
such qualification necessary, except where the failure to obtain such
qualification, license or authorization would not have a Material Adverse
Effect.
Section 3.02 Company SEC Documents. Company has timely filed with the
Commission all forms, registrations and proxy statements, reports, schedules and
statements required to be filed by it since December 31, 1997 under the Exchange
Act or the Securities Act (all documents filed since such date, collectively
"Company SEC Documents"). The Company SEC Documents, including, without
limitation, any financial statements or schedules included therein, at the time
filed (in the case of registration statements and proxy statements, solely on
the dates of effectiveness and the dates of mailing, respectively) (except to
the extent corrected by a subsequently filed Company SEC Document filed prior to
the Closing Date) (i) did not contain any untrue statement of a material fact or
omit to state a material fact required to be stated therein or necessary in
order to make the statements therein, in light of the circumstances under which
they were made, not misleading, and (ii) complied in all material respects with
the applicable requirements of the Exchange Act and the Securities Act, as the
case may be, (iii) complied as to form in all material respects with applicable
accounting requirements and with the published rules and regulations of the
Commission with respect thereto, were prepared in accordance with GAAP applied
on a consistent basis during the periods involved (except as may be indicated in
the notes thereto or, in the case of unaudited statements, as permitted by Form
10-Q of the Commission), and (iv) fairly present (subject in the case of
unaudited statements to normal, recurring and year-end audit adjustments) in all
material respects the consolidated financial position of Company as at the dates
thereof and the consolidated results of its operations and cash flows for the
periods then ended.
Section 3.03 No Material Adverse Change. Except as set forth in or
contemplated by the Company SEC Documents filed with the Commission as of the
date hereof or in Schedule 3.03, since June 30, 1999, each of Company and its
Subsidiaries has conducted its business in the ordinary course, consistent with
past practice, and there has been no (i) change that could reasonably be
expected to have a Material Adverse Effect in the business or financial
condition of Company and its Subsidiaries taken as a whole, other than those
occurring as a result of general economic or financial conditions or other
developments which are not unique to Company and its Subsidiaries but also
affect other Persons who participate or are engaged in the
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lines of business of which Company and its subsidiaries participate or are
engaged, (ii) Material Adverse Effect on the ability of Company to consummate
the transactions contemplated hereby, (iii) declaration, setting aside or
payment of any dividend or other distribution with respect to the Company's
Capital Stock, (iv) acquisition or disposition of any material asset by the
Company or any of its Subsidiaries or any contract or arrangement therefore,
otherwise than for fair value in the ordinary course of business or as disclosed
in the Company SEC Documents, or (v) material change in the Company's accounting
principles, practices or methods.
Section 3.04 Litigation. Except as set forth in the Company SEC Documents
or as disclosed to Purchaser in Schedule 3.04, there is no Action pending or, to
the knowledge of the Company, contemplated or threatened against or affecting
the Company, any of its Subsidiaries or any of their respective officers,
directors, properties or assets, which relates to or challenges the legality,
validity or enforceability of this Agreement, any of the Basic Documents or any
other documents or agreements executed or to be executed by the Company pursuant
hereto or thereto or in connection herewith or therewith, or which (individually
or in the aggregate) reasonably could be expected to have a Material Adverse
Effect.
Section 3.05 No Breach. The execution, delivery and performance by the
Company of this Agreement, the Basic Documents and all other agreements and
instruments to be executed and delivered by the Company pursuant hereto or
thereto or in connection herewith or therewith, compliance by the Company with
the terms and provisions hereof and thereof, the issuance of the Series A
Preferred Stock by the Company and the application of the proceeds thereof in
compliance herewith do not and will not (a) violate any provision of any law,
statute, rule or regulation, order, writ, judgment, injunction, decree,
governmental permit, determination or award having applicability to the Company
or any of its Subsidiaries or any of their respective properties or assets, (b)
conflict with or result in a violation of any provision of the charter or bylaws
of the Company or its Subsidiaries, (c) require any consent (other than consents
set forth on Schedule 3.05), approval or notice under or result in a violation
or breach of or constitute (with or without due notice or lapse of time or both)
a default (or give rise to any right of termination, cancellation or
acceleration) under (i) any note, bond, mortgage, license, or loan or credit
agreement to which the Company or any of its Subsidiaries is a party or by which
the Company or any of its Subsidiaries or any of their respective properties may
be bound or (ii) any other such agreement, instrument or obligation, or (d)
result in or require the creation or imposition of any Lien upon or with respect
to any of the properties now owned or hereafter acquired by the Company or any
of its Subsidiaries; with the exception of the conflicts stated in clause (b) of
this Section 3.05, except where such conflict, violation, default, breach,
termination, cancellation, failure to receive consent or approval, or
acceleration with respect to the foregoing provisions of this Section 3.05 would
not, individually or in the aggregate, reasonably be likely to have a Material
Adverse Effect.
Section 3.06 Authority. The Company has all necessary power and authority
to execute, deliver and perform its obligations under the Basic Documents to
which it is a party; and the execution, delivery and performance by the Company
of the Basic Documents to which it is a party, have been duly authorized by all
necessary action on its part; and the Basic Documents constitute the legal,
valid and binding obligations of the Company, enforceable in accordance with
their terms, except as such enforceability may be limited by bankruptcy,
insolvency, fraudulent transfer and similar laws affecting creditors' rights
generally or by general
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principles of equity. No approval from the stockholders of the Company is
required as a result of the Company's issuance of the Shares or the Conversion
Shares or the listing of the Conversion Shares with the New York Stock Exchange
(the "NYSE").
Section 3.07 Approvals. Except as set forth in Schedule 3.07, no
authorization, consent, approval, waiver, license, qualification or written
exemption from, nor any filing, declaration, qualification or registration with,
any Governmental Authority or any other Person is required in connection with
the execution, delivery or performance by the Company of this Agreement or any
of the Basic Documents or the issuance by the Company of the Series A Preferred
Stock or the Conversion Shares, except where the failure to receive such
authorization, consent, approval, waiver, license, qualification or written
exemption from, or to make such filing, declaration, qualification or
registration would not, individually or in the aggregate, reasonably be likely
to have a Material Adverse Effect.
Section 3.08 Employee Benefit Matters. The Company and its Subsidiaries and
each ERISA Affiliate are in compliance in all material respects with all
applicable provisions of ERISA or the Code and published interpretations
thereunder with respect to all Employee Plans which are subject to ERISA or the
Code, except where the failure to be in compliance would not reasonably be
likely to have a Material Adverse Effect. No breach or violation of or default
by the Company or any ERISA Affiliate under any Employee Plan has occurred which
is reasonably likely to have a Material Adverse Effect.
Section 3.09 Taxes. Except as set forth in Schedule 3.09, the Company and
each of its Subsidiaries have timely and properly prepared and filed all
necessary federal, state, local and foreign tax returns with respect to the
Company and its Subsidiaries which are required to be filed (taking into
consideration any extension periods) and have paid when due all taxes shown to
be due thereon and have paid, or made adequate provision (in accordance with
GAAP) for the payment of, all other taxes and assessments with respect to the
Company and its Subsidiaries to the extent that the same shall have become due
(taking into consideration any extension periods), except where the failure to
file such returns or to pay, or make provision for the payment of, such taxes
and assessments would not have a Material Adverse Effect on the Company and its
Subsidiaries, taken as a whole. Except as set forth in Schedule 3.09, the
Company has no knowledge of any tax deficiency which has been asserted against
the Company or any Subsidiary which the Company reasonably expects to have a
Material Adverse Effect.
Section 3.10 Assets. Neither the Company nor any of its Affiliates is a
party to any contract, agreement, arrangement or understanding (other than this
Agreement and the agreements entered into hereunder) that by its terms purports
to obligate, restrict or otherwise bind Purchaser (as Affiliates of the Company
or otherwise) including any area of mutual interest, exclusivity, non-
competition or other similar agreement.
Section 3.11 No Material Misstatements. None of the representations or
warranties made by Company herein or in any Schedule hereto, or certificate
furnished by Company pursuant to this Agreement, when all such documents are
read together in their entirety, contains any untrue statement of a material
fact, or omits to state any material fact necessary in order to make the
statements contained herein or therein, in light of the circumstances under
which made, not misleading.
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Section 3.12 Investment Company Act. Neither the Company nor any
Subsidiary is an "investment company" or a company "controlled" by an
"investment company," within the meaning of the Investment Company Act of 1940,
as amended.
Section 3.13 Public Utility Holding Company Act. Neither the Company nor
any Subsidiary is a "holding company," or a "subsidiary company" of a "holding
company," or an "affiliate" of a "holding company" or of a "subsidiary company"
of a "holding company," or a "public utility" within the meaning of the Public
Utility Holding Company Act of 1935, as amended.
Section 3.14 No Violation. Neither the Company nor any of its Subsidiaries
is (a) in violation of its charter or bylaws, (b) in default (nor has an event
occurred which, with notice or passage of time or both, would constitute such a
default) under or in violation of any provision of any loan or credit agreement
or any other agreement or instrument to which it is a party or by which it or
any of its properties may be bound, (c) a party to any order of any Governmental
Authority arising out of any Action, which such violation, default or action in
clauses (b) and (c) could reasonably be expected to have a Material Adverse
Effect, (d) in violation of any statute, rule or regulation of any Governmental
Authority or any governmental permit, which violation could reasonably be
expected to (individually or in the aggregate) (x) affect the legality, validity
or enforceability by Purchaser of this Agreement or any of the Basic Documents
or (y) have a Material Adverse Effect.
Section 3.15 Environmental Matters.
(a) Environmental Laws. The Company and its Subsidiaries have complied
with, and will be in compliance with, all applicable Environmental Laws and
the requirements of any permits issued under such Environmental Laws except
where failure to so comply could not reasonably be expected to have a
Material Adverse Effect. Except as set forth in Schedule 3.15, to the
knowledge of the Company, there are no pending, past or threatened
Environmental Claims against the Company or any of its Subsidiaries or any
property owned or operated by the Company or any of its Subsidiaries which
could reasonably be expected to have a Material Adverse Effect. Except as
set forth on Schedule 3.15, to the knowledge of the Company, there are no
conditions or occurrences on or emanating from any property owned or
operated by the Company or any of its Subsidiaries or on any property
adjoining or in the vicinity of any such property that could reasonably be
expected (i) to form the basis of an Environmental Claim against the
Company or any of its Subsidiaries or any property owned or operated by the
Company or any of its Subsidiaries or (ii) to cause any property owned or
operated by the Company or any of its Subsidiaries to be subject to any
material restrictions on the ownership, occupancy, the current or intended
use or transferability of such property by the Company or any of its
Subsidiaries under any applicable Environmental Law, except for any such
condition or occurrence described in clauses (i) or (ii) which could not
reasonably be expected to have a Material Adverse Effect.
(b) Hazardous Materials. Except as set forth on Schedule 3.15, to the
knowledge of the Company (i) Hazardous Materials have not at any time been
generated, used, treated or stored on, or transported to or from, any
property owned or operated by the Company or any of its Subsidiaries in a
manner that has violated or could reasonably be expected to violate
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any Environmental Law, except for such violation which could not reasonably
be expected to have a Material Adverse Effect, and (ii) Hazardous Materials
have not at any time been released on or from any property owned or
operated by the Company or any of its Subsidiaries in a manner that has
violated or could reasonably be expected to violate any Environmental Law,
except for such violation which could not reasonably be expected to have a
Material Adverse Effect.
Section 3.16 Insurance. Except as set forth in Schedule 3.16, Company and
its Subsidiaries (for such time period after an entity became a Subsidiary of
the Company) have policies of property and casualty insurance and bonds of the
type and in amounts customarily carried by persons conducting business or owning
assets similar to those of the Company and its Subsidiaries. There is no
material claim pending under any of such policies or bonds as to which coverage
has been, nor any basis for Company to reasonably believe that a material claim
will be, questioned, denied or disputed by the underwriters of such policies or
bonds. All premiums due and payable under all such policies and bonds have been
paid and Company and its Subsidiaries are otherwise in compliance with the terms
of such policies and bonds. Company has no knowledge of any threatened
termination of, or material premium increase with respect to, any of such
policies. Schedule 3.16 identifies all risks, if any, of the Company or any of
its Subsidiaries which are self-insured which might have a Material Adverse
Effect.
Section 3.17 Capitalization. The authorized Capital Stock of the Company
consists of (a) 100,000,000 shares of Common Stock, par value $0.00001 per
share, of which 31,679,990 shares are issued and outstanding as of the end of
the day immediately preceding the Closing Date (the "Share Calculation Date");
(b) 3,345,333 shares of Limited Vote Common Stock, par value $0.00001 per share,
of which 3,331,451 shares are issued and outstanding as of the Share Calculation
Date; and (c) 10,000,000 shares of preferred stock, $0.00001 per share, of which
1,860,000 shares have been designated Series A Preferred Stock and, prior to the
issuance of the Shares pursuant to this Agreement, no shares are issued and
outstanding. All outstanding shares of Common Stock are validly issued, fully
paid and nonassessable and were issued free of preemptive rights. Except as set
forth on Schedule 3.17 or pursuant to the Company's 1997 Stock Option Plan, the
Company is not a party to any voting trust or other agreement with respect to
the voting of its Capital Stock. Except as set forth in Schedule 3.17 or under
the Company's 1997 Stock Option Plan for which there are 4,289,534 shares
issuable under currently outstanding options as of the Share Calculation Date,
there are as of the Share Calculation Date no (i) outstanding securities
convertible into or exchangeable for Capital Stock of the Company or (ii)
contracts, commitments, agreements, understandings or arrangements of any kind
to which the Company is a party obligating the Company under any circumstance to
issue any Capital Stock, or any securities convertible into or exchangeable for
or rights to purchase or subscribe for Capital Stock of the Company, other than
this Agreement (the "Share Issuance Obligations"). Schedule 3.17 reasonably
sets forth information regarding the Share Issuance Obligations. Except as set
forth on Schedule 3.17 neither the Company nor any of its Subsidiaries is a
party to or bound by any agreement with respect to any of its securities which
grants registration rights to any Person.
Section 3.18 Conversion Shares. The Conversion Shares, when issued and
delivered in accordance with the terms of the Certificate of Designation, will
be duly and validly issued, fully paid, non-assessable, free of preemptive
rights of other stockholders and free from all Liens
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(except any Liens created or suffered to be created by Purchaser or its
Affiliates) and will not be subject to any restriction on the voting or transfer
thereof created by the Company, other than the restrictions set forth in Section
4.01 and Section 4.05 of this Agreement and pursuant to the Investor's Rights
Agreement. The Company has duly and validly reserved the Conversion Shares for
issuance upon conversion of the Shares.
Section 3.19 Certain Fees. Except for the fees payable to Purchaser
pursuant to this Agreement, no fees or commissions will be payable by the
Company to brokers, finders, investment bankers, or Purchaser with respect to
the issuance and sale of any of the Shares or the consummation of the
transaction contemplated by this Agreement. The Company agrees that it will
indemnify and hold harmless Purchaser from and against any and all claims,
demands, or liabilities for broker's, finders, placement, or other similar fees
or commissions incurred by the Company or alleged to have been incurred by the
Company in connection with the issuance or sale of the Shares or the
consummation of the transaction contemplated by this Agreement.
Section 3.20 Licenses. Except as set forth in Schedule 3.20, each of the
Company and its Subsidiaries holds all licenses, franchises, permits, consents,
registrations, certificates and other approvals (including, without limitation,
those relating to environmental matters and worker health and safety)
(individually, a "License" and, collectively, "Licenses") required for the
conduct of its business as now being conducted, except where the failure to hold
any such License would not have a Material Adverse Effect.
Section 3.21 Undisclosed Liabilities. Except (a) as and to the extent
disclosed or reserved against on the consolidated balance sheet of Company as of
June 30, 1999 or the notes thereto included in the Company SEC Documents or
otherwise disclosed in the Company SEC Documents filed with the Commission as of
the date hereof (b) those incurred in connection with the execution of the Basic
Documents (c) obligations incurred in the ordinary course of business subsequent
to June 30, 1999 or (d) as set forth in Schedule 3.21, neither Company nor any
of its subsidiaries have any liabilities or obligations of any nature, whether
known or unknown, absolute, accrued, contingent or otherwise and whether due or
to become due, and that would be required by GAAP to be disclosed and that,
individually or in the aggregate, have or would reasonably be expected to have a
Material Adverse Effect.
Section 3.22 Labor Relations. Except as disclosed on Schedule 3.22, there
is no unfair labor practice litigation involving the Company or any of its
subsidiaries either pending before the National Labor Relations Board or a court
or, to the knowledge of Company, threatened against Company or any of its
subsidiaries. Except as disclosed on Schedule 3.22, there is no labor strike,
dispute, slowdown or stoppage, either pending or, to the knowledge of Company,
threatened against Company or any of its subsidiaries, nor has the Company
experienced any such labor interruptions over the past two years. The Company
considers its relationship with its employees to be good.
Section 3.23 Year 2000 Compliance. All devices, systems, machinery,
information technology, computer software and hardware, and other date sensitive
technology (jointly and severally its "systems") necessary for the Company and
its Subsidiaries to carry on their business as presently contemplated to be
conducted will be Year 2000 Compliant within a period of time calculated to
result in no material disruption of any of their business operations. For
purposes
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hereof, "Year 2000 Compliant" means that such systems are designed to be used
prior to, during and after the Gregorian calendar year 2000 A.D. and will
operate during each such time period without error relating to date data,
specifically including any error relating to, or the product of, date data which
represents or references different centuries or more than one century. The
Company and its Subsidiaries will (a) undertake an inventory, review and
assessment of all areas within their businesses and operations that could be
adversely affected by the failure of the Company and its Subsidiaries to be Year
2000 Compliant on a timely basis and (b) develop a plan and time line for
becoming Year 2000 Compliant on a timely basis. The Company, when it reasonably
determines such action necessary, will make written inquiry of each of its and
its Subsidiaries' key suppliers, vendors, and customers, and will obtain in
writing confirmations from all such Persons, as to whether such Persons have
initiated programs to become Year 2000 Compliant. For purposes hereof, "key
suppliers, vendors, and customers" refers to those suppliers, vendors, and
customers of the Company and its Subsidiaries whose business failure could
reasonably be expected to have a Material Adverse Effect. The Company does not
control third party hardware or software systems that may interfere or exchange
data with the Company's material hardware and software systems and the foregoing
representation specifically excludes any representation that such third party
hardware and software systems are Year 2000 Compliant.
ARTICLE IV.
REPRESENTATIONS AND WARRANTIES OF THE PURCHASER
Purchaser represents and warrants to the Company, which representations and
warranties shall survive the execution of any Basic Document, that as of the
date of this Agreement:
Section 4.01 Investment. Purchaser represents and warrants to, and
covenants and agrees with, the Company that the Shares are being acquired for
its own account, not as a nominee or agent, and with no intention of
distributing or reselling the Shares or the Conversion Shares or any part
thereof and that Purchaser has no present intention of selling or granting any
participation in or otherwise distributing the same in any transaction which
would be in violation of the securities laws of the United States of America or
any State, without prejudice, however, to Purchaser's right at all times to sell
or otherwise dispose of all or any part of the Shares or the Conversion Shares
under a registration statement under the Securities Act and applicable state
securities laws or under an exemption from such registration available
thereunder (including, without limitation, if available, Rule 144 promulgated
thereunder). If Purchaser should in the future decide to dispose of any of the
Shares or the Conversion Shares, Purchaser understands and agrees (a) that it
may do so only (i) in compliance with the Securities Act and applicable state
securities law, as then in effect, and (ii) in the manner contemplated by any
registration statement pursuant to which such securities are being offered, and
(b) that stop-transfer instructions to that effect will be in effect with
respect to such securities. Purchaser agrees to the imprinting, so long as
appropriate, of a legend on each certificate representing the Securities to the
effect as set forth above.
Section 4.02 Nature of Purchaser. Purchaser represents and warrants to, and
covenants and agrees with, the Company that, (a) it is an "accredited investor"
within the meaning of Rule 501 of Regulation D promulgated by the Securities and
Exchange Commission pursuant to the
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Securities Act and (b) by reason of its business and financial experience it has
such knowledge, sophistication and experience in business and financial matters
so as to be capable of evaluating the merits and risks of the prospective
investment in the Securities, is able to bear the economic risk of such
investment and, at the present time, would be able to afford a complete loss of
such investment.
Section 4.03 Receipt of Information; Authorization. Purchaser acknowledges
that it has had access to information regarding the business, assets,
operations, financial condition and results of operations of the Company and has
been provided a reasonable opportunity to ask questions of and receive answers
from representatives of the Company regarding such matters. Purchaser further
acknowledges that it is experienced in investing in corporations and businesses.
Purchaser represents and warrants that the purchase of the Shares by it has been
duly and properly authorized and this Agreement and each other Basic Document to
which Purchaser is (or will at the Closing be) a signatory have been (or, with
respect to the other Basic Documents, at the Closing will be) duly executed and
delivered by it or on its behalf.
Section 4.04 Anti-Hedging. Purchaser represents and warrants to, and
covenants and agrees with, the Company that it will not at any time prior to the
tenth anniversary of the Closing Date engage in any put, call, short-sale,
hedge, straddle or similar transactions in Company's Capital Stock intended to
reduce Purchaser's risk of owning the Company's Capital Stock, excluding index
options or similar basket hedges.
Section 4.05 Restricted Securities. Purchaser understands that the
Securities it is purchasing are characterized as "restricted securities" under
the federal securities laws inasmuch as they are being acquired from the Company
in a transaction not involving a public offering and that under such laws and
applicable regulations such securities may be resold without registration under
the Securities Act, only in certain limited circumstances. In this connection,
such Purchaser represents that it is familiar with Rule 144 of the Commission
promulgated under the Securities Act.
Section 4.06 Certain Fee. No fees or commissions will be payable by
Purchaser to brokers, finders, or investment bankers with respect to the
purchase of any of the Securities or the consummation of the transaction
contemplated by this Agreement. Purchaser agrees that it will, jointly and
severally, indemnify and hold harmless the Company from and against any and all
claims, demands, or liabilities for broker's, finders, placement, or other
similar fees or commissions incurred by Purchaser or alleged to have been
incurred by Purchaser in connection with the purchase of the Securities or the
consummation of the transaction contemplated by this Agreement.
Section 4.07 No Implied Representations. Notwithstanding anything to the
contrary contained in this Agreement, it is the express understanding of
Purchaser that the Company is not making any representation or warranty
whatsoever, express or implied, other than those representations and warranties
of Company expressly set forth in this Agreement.
ARTICLE V.
CONDITIONS TO CLOSING
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Section 5.01 Conditions to the Purchaser's Obligation to Purchase the
Shares. In addition to any other applicable conditions set forth herein,
Purchaser's obligation to purchase the Shares at the Closing is subject to the
satisfaction of the following conditions, each of which may be waived in the
sole discretion of Purchaser:
(a) Representations and Warranties True; Performance of Obligations. The
representations and warranties made by the Company in Article III hereof
shall be true and correct in all material respects as of the Closing Date,
except (A) for changes contemplated by this Agreement and (B) for those
representations and warranties that address matters only as of a particular
date (which representations and warranties which address matters only as of
a particular date shall be true and correct in all material respects as of
such particular date). The Company shall have performed all obligations and
conditions herein required to be performed or observed by it on or prior to
the Closing Date.
(b) Legal Investment. On the Closing Date, the sale and issuance of the
Shares shall be legally permitted by all laws, regulations and NYSE listing
rules to which Purchaser and the Company are subject.
(c) Consents, Permits, and Waivers. The Company shall have obtained any
and all consents, permits and waivers necessary or appropriate for
consummation of the transactions contemplated by the Agreement and the
other Basic Documents (except for such as Purchaser determines may be
properly obtained subsequent to the Closing Date).
(d) Corporate Documents. The Company shall have delivered to Purchaser
or its counsel, copies of all corporate documents of the Company as
Purchaser shall reasonably request.
(e) Secretary's Certificate; Good Standing Certificate. The Company
shall have delivered to Purchaser a certificate executed by the Secretary
of the Company, dated the Closing Date, certifying as to (A) the
resolutions of the Board of Directors evidencing approval of the
transactions contemplated by and from this Agreement and the Basic
Documents and the authorization of the named officer or officers to execute
and deliver this Agreement and the Basic Documents, (B) the Certificate of
Incorporation and the Bylaws of the Company, in each case, as amended, and
(C) certain of the officers of the Company, their titles and examples of
their signatures. The Company shall have delivered to Purchaser a
certificate of the Secretary of State of the State of Delaware, dated a
recent date in relation to the Closing Date, that the Company is in good
standing.
(f) No Material Adverse Effect. No event or change has occurred which
has had, or could reasonably be expected to have, a Material Adverse
Effect.
(g) All Consents. All other consents, including without limitation any
required stockholder approval, and waivers necessary to complete the
transactions under this Agreement and the other Basic Documents shall have
been obtained by the Company.
(h) Fees. The Company shall pay (A) the reasonable legal fees and costs
of counsel to Purchaser incurred by Purchaser in the evaluation and
negotiation of the proposed transaction, but in no event shall the Company
be required to pay in excess of $50,000 for such
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fees and costs (the "Legal Fees"), (B) all filing fees associated with all
filings required under the Hart-Scott-Rodino Act and any other notification
or request for consent, approval or permission that may be required by
statute, regulation or judicial decrees in connection with the proposed
transaction (the "HSR Fees") and (C) the fee ("Fee") pursuant to the Fee
Letter Agreement in the form attached hereto as Exhibit D.
(i) Legal Opinion. Purchaser shall have received from legal counsel to
the Company opinions addressed to it, dated as of the Closing Date, in the
form substantially similar in substance to the forms of opinion attached
hereto as Exhibits B-1 and B-2.
(j) Certificate of Designation. The Certificate of Designation, in the
form set forth in Exhibit A, shall have been adopted and executed by the
Company and filed with and certified by the Secretary of State of the State
of Delaware.
(k) Investor's Rights Agreement. The Investor's Rights Agreement, in the
form attached hereto as Exhibit C, shall have been executed and delivered
by the Company.
(l) Fee Letter Agreement. The Fee Letter Agreement, in the form attached
hereto as Exhibit D, shall have been executed and delivered by the Company.
(m) Strategic Alliance Agreement. The Strategic Alliance Agreement, in
the form attached hereto as Exhibit E, shall have been executed and
delivered by the Company.
(n) Stockholder's Voting Agreement. A Stockholder's Voting Agreement, in
the form attached hereto as Exhibit H, shall have been executed and
delivered by the Company and the stockholders as set forth in Schedule
5.01(p).
(o) HSR Compliance. Any waiting period applicable to the purchase of the
Shares under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as
amended, shall have terminated or expired.
(p) Waiver of Preemptive Rights. The holders of the Company's
outstanding equity securities having preemptive rights in connection with
the issuance of the Shares to be issued to Purchaser pursuant to this
Agreement shall have waived all such rights.
(q) Waiver to Issuance of Dividends. The Enron Affiliates and a majority
of the Senior Lenders must waive (A) the prohibitions on the Company's
ability or authority to pay dividends on the Series A Preferred Stock and
(B) any other restrictions or negative covenants in the Enron Purchase
Agreement and the Senior Credit Agreement, respectively, which, but for
such waiver, would result in the failure of Purchaser to realize the full
benefits and rights issued, granted or transferred to it under the Basic
Documents.
(r) Board of Directors. Upon the Closing, the authorized size of the
Board of Directors of the Company shall consist of 10 members, and such
members shall include Purchaser's two designees.
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(s) Audit Committee. Upon the Closing, the authorized size of the Audit
Committee of the Board of Directors of the Company shall consist of 3
members, and such members shall include one designee of Purchaser.
(t) NYSE Listing of Shares. The Company shall have filed a listing
application and obtained the authorization of the NYSE for the issuance of
the Shares and the underlying Conversion Shares.
Section 5.02 Conditions to Obligations of the Company. In addition to any
other applicable conditions set forth herein, the Company's obligation to issue
and sell the Shares at the Closing is subject to the satisfaction, on or prior
to the Closing, of the following conditions, each of which may be waived in the
sole discretion of the Company:
(a) Representations and Warranties True. The representations and
warranties made by Purchaser in Article IV hereof shall be true and correct
in all material respects at the Closing Date with the same force and effect
as if they had been made on and as the Closing Date, and Purchaser shall
have performed all obligations and conditions herein required to be
performed or complied with by it on or before the Closing Date.
(b) Consents, Permits, and Waivers. The Company shall have obtained any
and all consents, permits and waivers necessary or appropriate for
consummation of the transactions contemplated by the Agreement and the
other Basic Documents (except for such as may be properly obtained
subsequent to the Closing Date).
(c) Strategic Alliance Agreement. The Strategic Alliance Agreement, in
the form attached hereto as Exhibit E, shall have been executed and
delivered by Purchaser.
(d) Investor's Rights Agreement. The Investor's Rights Agreement, in the
form attached hereto as Exhibit C, shall have been executed and delivered
by Purchaser.
(e) HSR Compliance. Any waiting period applicable to the purchase of the
Shares under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as
amended, shall have terminated or expired.
ARTICLE VI.
COVENANTS
Unless Purchaser's prior written consent to the contrary is obtained, the
Company will, for the benefit of Purchaser, at all times comply with the
covenants contained in this Article VI (or cause each Subsidiary's compliance
with the applicable covenants), from the date hereof and for so long as
Purchaser owns any Series A Preferred Stock or Conversion Shares.
Section 6.01 Financial Statements and Reports. The Company shall deliver,
or shall cause to be delivered, to Purchaser:
(a) Annual Financial Statements. As soon as available and in any event
within 90 days after the end of each fiscal year of the Company, the
audited consolidated
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statements of income, stockholders' equity, changes in financial position
and cash flow of the Company and its Consolidated Subsidiaries for such
fiscal year, and the related consolidated balance sheets of the Company and
its Consolidated Subsidiaries as at the end of such fiscal year, and
setting forth in each case in comparative form the corresponding figures
for the preceding fiscal year, and accompanied by the related opinion of
independent public accountants of recognized national standing acceptable
to the Senior Loan Agents (or in the absence of a Senior Loan, Purchaser)
which opinion shall state that said financial statements fairly present the
consolidated financial condition and results of operations of the Company
and its Consolidated Subsidiaries as at the end of, and for, such fiscal
year and that such financial statements have been prepared in accordance
with GAAP except for such changes in such principles with which the
independent public accountants shall have concurred and such opinion shall
not contain a "going concern" or like qualification or exception. The
provisions of this Section 6.01(a) shall be deemed satisfied as long as the
Company timely files financial statements in accordance with, and meeting
the requirements of, the Exchange Act, without extension.
(b) Quarterly Financial Statements. As soon as available and in any
event within 45 days after the end of each of the first three fiscal
quarterly periods of each fiscal year of the Company, consolidated
statements of income, stockholder's equity, changes in financial position
and cash flow of the Company and its Consolidated Subsidiaries for such
period and for the period from the beginning of the respective fiscal year
to the end of such period, and the related consolidated balance sheets as
of the end of the prior fiscal year and at the end of such period,
accompanied by the certificate of a Responsible Officer, which certificate
shall state that said financial statements fairly present the consolidated
financial condition and results of operations of the Company and its
Consolidated Subsidiaries in accordance with GAAP, as at the end of, and
for, such period (subject to normal year-end audit adjustments). The
provisions of this Section 6.01(b) shall be deemed satisfied as long as the
Company timely files financial statements in accordance with, and meeting
the requirements of, the Exchange Act, without extension.
(c) SEC Filings, Etc. Promptly upon its becoming available, each
financial statement, report, notice or proxy statement sent by the Company
to stockholders generally and each regular or periodic report and any
registration statement or prospectus in respect thereof filed by the
Company with any securities exchange or the Commission or any successor
agency. The requirements of this Section 6.01(c) shall be deemed to be
satisfied as to those documents which are filed with the Commission,
available generally to the public and distributed to the stockholders upon
the timely filing of such documents with the Commission.
(d) Other Matters. Subject to any applicable restrictions on disclosure,
from time to time such other information regarding the business, affairs or
financial condition of the Company (including, without limitation, any Plan
or Multiemployer Plan and any reports or other information required to be
filed under ERISA) as Purchaser may reasonably request; provided, however,
that the Company shall not be obligated pursuant to this Section 6.01 to
provide access to any information which it reasonably considers to be a
trade secret or similar confidential information.
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Section 6.02 Maintenance, Etc. The Company shall and shall cause each
Subsidiary to: (a) upon reasonable notice, permit representatives of Purchaser,
during normal business hours, to examine, copy and make extracts from its
financial books and records, to inspect its Properties, and to discuss its
business and affairs with its officers, all to the extent reasonably required by
Purchaser; provided, however, that the Company shall not be obligated pursuant
to this Section 6.02 to provide access to any information which it reasonably
considers to be a trade secret or similar confidential information; (b) preserve
and maintain its corporate existence and all of its material attendant rights,
privileges and franchises, keep appropriate books of record and account in
relation to its business and activities; provided, however, that the Company may
purchase or otherwise acquire all or substantially all of the stock or assets
of, or otherwise acquire by merger or consolidation, any of its Subsidiaries,
and any such Subsidiary may merge into, or consolidate with, or purchase or
otherwise acquire all or substantially all of the assets or stock of, or sell
all or substantially all of its assets or stock to, any other Subsidiary of the
Company or the Company, in each case so long as (i) if the transaction is with
the Company, the Company shall be the surviving entity to any such merger or
consolidation or (ii) if the transaction is not with the Company, a Subsidiary
shall be the surviving entity to any such merger or consolidation; (c) comply
with all Governmental Requirements, including, without limitation, any
Environmental Laws, except where the failure to comply would not reasonably be
expected to have a Material Adverse Effect; and (d) pay and discharge all taxes,
assessments and governmental charges or levies imposed on it or on its income or
profits or on any of its Property, except for any such tax, assessment, charge
or levy the payment of which is being contested in good faith and by proper
proceedings and against which adequate reserves are being maintained.
Section 6.03 Further Assurances. The Company will cure promptly any defects
in the creation and issuance of the Shares and the Conversion Shares and the
execution and delivery of the Basic Documents. The Company at its expense will
promptly execute and deliver to Purchaser, upon request, all such other
documents, agreements and instruments to correct any omissions in the Basic
Documents or to make any recordings, to file any notices or obtain any consents,
all as may reasonably be necessary or appropriate in connection therewith.
Section 6.04 Efforts; Performance of Obligations. Each party agrees to use
commercially reasonable efforts to take any and all actions required in order to
consummate the transactions contemplated in this Agreement and the other Basic
Documents. Each party will do and perform every act and discharge all of the
obligations to be performed and discharged by it under the Certificate of
Designation and the other Basic Documents, at the time and times and in the
manner specified.
Section 6.05 Shares. Company shall at all times during the term of the
Series A Preferred Stock maintain a sufficient number of shares of Common Stock
of the Company to be issued as Conversion Shares upon the conversion of all or
part of the Shares.
Section 6.06 Insurance. Company shall maintain such insurance as to comply
with all requirements of law and agreements to which the Company or any
subsidiary is a party and otherwise sufficient to adequately insure against such
risks as are usually insured against in the same general area by companies
engaged in the same or similar business for the assets and operations of the
Company and each Subsidiary.
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Section 6.07 Use of Proceeds. The net purchase price of the Shares shall be
used by the Company solely (a) for the Company's acquisition program, (b) for
general working capital, and (c) to reduce senior debt.
Section 6.08 Notification of Certain Matters. The Company shall give prompt
notice to Purchaser of the occurrence or non-occurrence of any event the
occurrence or non-occurrence of which would be likely to cause the failure of
the Company to comply with or satisfy any covenant or agreement under this
Agreement.
Section 6.09 Co-operation upon Purchaser's Exit. Purchaser and Company
mutually agree to use their best efforts (subject to the Company's fiduciary
duties to its stockholders) to take such actions that will enable Purchaser to
exit its investment in the Capital Stock of the Company in the most tax
efficient manner (as determined by Purchaser in the reasonable exercise of its
discretion) including, but not limited to, a redemption or a series of
redemption's at fair market value or a recapitalization of Purchaser's interest
in the Company and its operations on a pretax basis (and calling a stockholders'
meeting, if required, and recommending the approval of said exit, subject, in
all cases, to the Company's fiduciary duties to its stockholders). The Company
will use commercially reasonable efforts to secure the agreement of certain
mutually agreed upon stockholders of the Company to vote for such action,
consistent with the stockholders' fiduciary duties (if any) to the Company or
its stockholders.
Section 6.10 Co-operation Upon Purchaser's Acquisition of Common Stock.
If Purchaser acquires shares of Common Stock from stockholders of the Company in
privately negotiated or open market transactions, Purchaser and Company mutually
agree to use their best efforts (subject to the Company's fiduciary duties to
its stockholders) to take such actions that will enable Purchaser to hold such
shares in the most tax efficient manner (as determined by Purchaser in the
reasonable exercise of its discretion), including, but not limited to, the grant
of a right to convert or exchange such shares of Common Stock into or for a new
series of preferred stock or a different class of common stock, in each case,
having similar attributes as the Series A Preferred Stock (and calling a
stockholders' meeting at the earliest opportunity after a request by Purchaser
and recommending the approval of such actions, subject, in all cases, to the
Company's fiduciary duties to its stockholders). The Company will use
commercially reasonable efforts to secure the agreement of certain Stockholders
of the Company to vote for such action, consistent with the stockholders'
fiduciary duties (if any) to the Company or its stockholders.
Section 6.11 Assistance in Purchasing Common Stock. To assist Purchaser in
its efforts to acquire, in one or more privately negotiated transactions, Common
Stock currently outstanding, the Company shall identify current stockholders
that may potentially desire to sell their Common Stock and will provide contact
information regarding such holders.
Section 6.12 Extent of Permitted Dilution. The Company shall not adopt
any Stockholders Rights Plan that could have the effect of reducing UtiliCorp's
Fully Diluted Ownership Ratio below 49.9%.
Section 6.13 Termination of Certain Covenants. The covenants set forth in
Sections 6.01, 6.02, 6.06, 6.09, and 6.10 shall terminate and be of no further
force and effect if UtiliCorp's
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Fully Diluted Ownership Ratio is less than 5%. The covenant set forth in Section
6.12 shall terminate and be of no further force and effect if UtiliCorp's Fully
Diluted Ownership Ratio is less than 10%.
Section 6.14 Enforceability of Basic Documents. In the event a party
becomes aware of an actual or potential threat to the enforceability, legality
or validity of the Basic Documents, such party shall immediately notify the
other party of such threat, and the parties shall, through lawfully and
commercially reasonable efforts, defend the Basic Documents against such threat.
Section 6.15 Nomination of UtiliCorp Director Designee(s). If at any time
UtiliCorp would be entitled to elect one or more directors to the Company's
Board of Directors pursuant to the terms of Section 3(b) of the Certificate of
Designation, but for the unenforceability of such provision under applicable
law, the Company agrees to cause the person(s) that would have been designated
by UtiliCorp under such section to be nominated as directors to the Company's
Board of Directors.
ARTICLE VII.
MISCELLANEOUS
Section 7.01 Interpretation and Survival of Provisions. Article, Section,
Schedule, and Exhibit references are to this Agreement, unless otherwise
specified. All references to instruments, documents, contracts, and agreements
are references to such instruments, documents, contracts, and agreements as the
same may be amended, supplemented, and otherwise modified from time to time,
unless otherwise specified. The word "including" shall mean "including but not
limited to." Whenever the Company has an obligation under the Basic Documents,
the expense of complying with that obligation shall be an expense of the Company
unless otherwise specified. Whenever any determination, consent, or approval is
to be made or given by Purchaser, such action shall be in Purchaser's sole
discretion unless otherwise specified in this Agreement. If any provision in the
Basic Documents is held to be illegal, invalid, not binding, or unenforceable,
such provision shall be fully severable and the Basic Documents shall be
construed and enforced as if such illegal, invalid, not binding, or
unenforceable provision had never comprised a part of the Basic Documents, and
the remaining provisions shall remain in full force and effect. The Basic
Documents have been reviewed and negotiated by sophisticated parties with access
to legal counsel and shall not be construed against the drafter. The
representation and warranties shall survive for the applicable two-year periods
identified in the first paragraph of Article III above, and the covenants made
in this Agreement, or any other Basic Document shall survive the closing of the
transactions described herein and remain operative and in full force and effect
regardless of (a) any investigation made by or on behalf of the Company or
Purchaser or (b) acceptance of any of the Securities and payment therefor and
repayment or repurchase thereof. All indemnification obligations of the Company
and the provisions of Section 7.02 shall remain operative and in full force and
effect unless such obligations are expressly terminated in a writing referencing
those individual Sections, regardless of any purported general termination of
this Agreement.
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Section 7.02 Indemnification, Costs and Expenses.
(a) Indemnification Regarding Company Activities. The Company agrees to
indemnify Purchaser, and its officers, directors, employees,
representatives, agents, attorneys, and Affiliates (collectively, "Related
Parties") from, hold each of them harmless against and promptly upon demand
pay or reimburse each of them for, any and all actions, suits, proceedings
(including any investigations, litigation, or inquiries), claims, demands,
and causes of action, and, in connection therewith, all reasonable costs,
losses, liabilities, damages, or expenses of any kind or nature whatsoever,
net of any insurance paid to Purchaser under Company's insurance
arrangements, (collectively, the "Indemnity Matters") which may be incurred
by them or asserted against or involve any of them as a result of a claim
by a Person that is not an Affiliate of Purchaser or any Related Parties
under clauses (i), (ii), (iii) and (v) below (whether or not any of them is
designated a party thereto) as a result of, arising out of, or in any way
related to (i) any actual or proposed use by the Company of the proceeds of
any sale of the Securities, (ii) the operations of the business of the
Company or any of its Affiliates, (iii) the failure of the Company or any
of its Affiliates to comply with any Governmental Requirement, (iv) the
breach of the representations, warranties and covenants of the Company
contained herein, provided such claim for indemnification relating to a
breach of the representations and warranties is made prior to the
expiration of such representations and warranties, or (v) any other aspect
of this Agreement and the other Basic Documents, including, without
limitation, the reasonable fees and disbursements of counsel and all other
reasonable expenses incurred in connection with investigating, defending or
preparing to defend any such action, suit, proceeding (including any
investigations, litigation, or inquiries), or claim and INCLUDING ALL
INDEMNITY MATTERS ARISING BY REASON OF THE NEGLIGENCE OF ANY INDEMNITEE
(but not Indemnity Matters related solely to the gross negligence or
willful misconduct of any Indemnitee).
(b) Indemnification Regarding Taxes. The Company agrees to pay and hold
Purchaser harmless from and against any and all present and future stamp
and other similar taxes with respect to this Agreement and Basic Documents
and save Purchaser harmless from and against any and all liabilities with
respect to or resulting from any delay or omission to pay such taxes, and
will indemnify Purchaser for the full amount of taxes paid by Purchaser
(not to include income or gross receipt tax liability) in respect of
payments made or to be made under this Agreement or any other Basic
Document and any liability (including penalties, interest, and expenses)
arising therefrom or with respect thereto, whether or not such taxes were
correctly or legally asserted.
(c) Indemnification Regarding Environmental Matters. The Company agrees
to indemnify and hold harmless from time to time Purchaser, and their
respective Related Parties from and against any and all losses, claims,
cost recovery actions, administrative orders or proceedings, damages, and
liabilities to which Purchaser and their respective Related Parties may
incur, have asserted against them or involve any of them pursuant to a
claim by a Person that is not an Affiliate of Purchaser or any Related
Parties (i) under any Environmental Law applicable to the Company, any
Subsidiary, or any of their respective Properties, (ii) as a result of the
breach or non-compliance by the Company or any Subsidiary with any
Environmental Law applicable to the Company or any Subsidiary, or any of
their respective Properties, (iii) due to the ownership by the Company or
any Subsidiary of their respective Properties or any activity on any of
their respective Properties, or any past activity on any of their
respective Properties which, though lawful and fully permissible at the
time, could result in present liability under any
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Environmental Law, (iv) the presence, use, release, storage, treatment, or
disposal of hazardous substances on or at any of the properties owned or
operated by the Company or any Subsidiary, or (v) any other environmental,
health, or safety condition in connection with this Agreement or any other
Basic Document.
(d) Indemnification Procedure. Promptly after Purchaser or other Person
indemnified hereunder (hereinafter, the "Indemnified Party") has received
notice or has knowledge of any claim for indemnification hereunder, or the
commencement of any action or proceeding by a third person, which the
Indemnified Party believes in good faith is an indemnifiable claim under
this Agreement, the Indemnified Party shall give the Company written notice
of such claim or the commencement of such action or proceeding, but failure
so to notify the Company will not relieve the Company from any liability
which it may have to such Indemnified Party hereunder except to the extent
that the Company is materially prejudiced by such failure. Such notice
shall state the nature and the basis of such claim. The Company shall have
the right to defend and settle, at its own expense and by its own counsel,
any such matter as long as the Company pursues the same diligently and in
good faith. If the Company undertakes to defend or settle, it shall
promptly notify the Indemnified Party of its intention to do so, and the
Indemnified Party shall cooperate with the Company and its counsel in all
commercially reasonable respects in the defense thereof and the settlement
thereof. Such cooperation shall include, but shall not be limited to,
furnishing the Company with any books, records and other information
reasonably requested by the Company and in the Indemnified Party's
possession or control. Such cooperation of the Indemnified Party shall be
at the cost of the Company. After the Company has notified the Indemnified
Party of its intention to undertake to defend or settle any such asserted
liability, and for so long as the Company diligently pursues such defense,
the Company shall not be liable for any additional legal expenses incurred
by the Indemnified Party in connection with any defense or settlement of
such asserted liability; provided, however, that the Indemnified Party
shall be entitled (i) at its expense, to participate in the defense of such
asserted liability and the negotiations of the settlement thereof or (ii)
if (A) the Company has failed to assume the defense and employ counsel or
(B) if the defendants in any such action include both the Indemnified Party
and the Company and counsel to the Indemnified Party shall have concluded
that there may be reasonable defenses available to the Indemnified Party
that are different from or additional to those available to the Company or
if the interests of the Indemnified Party reasonably may be deemed to
conflict with the interests of the Company, then the Indemnified Party
shall have the right to select a separate counsel and to assume such legal
defense and otherwise to participate in the defense of such action, with
the expenses and fees of such separate counsel and other expenses related
to such participation to be reimbursed by the Company as incurred, and the
Company shall not settle any such claim without the consent of the
Indemnified Party unless the settlement thereof imposes no liability or
obligation on, and includes a complete release from liability of, the
Indemnified Party. If the Indemnified Party undertakes such a defense
through counsel of its choice, the Indemnified Party may settle such
matter, and the Company shall reimburse the Indemnified Party for the
amount paid in such settlement and any other liabilities or expenses
incurred by the Indemnified Party in connection therewith.
(e) Survival. The Company's obligations under this Section 7.02 shall
survive any termination of this Agreement and the payment of the
Obligations.
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(f) Acknowledgement. THE INDEMNIFICATION AND RELEASE PROVISIONS PROVIDED
FOR IN THIS AGREEMENT SHALL BE APPLICABLE WHETHER OR NOT THE LOSSES, COSTS,
EXPENSES AND DAMAGES IN QUESTION AROSE SOLELY OR IN PART FROM (i) THE
ACTIVE, PASSIVE OR CONCURRENT NEGLIGENCE, OR OTHER FAULT OF ANY INDEMNIFIED
PARTY OR (ii) ANY ACTION THAT SUBJECTS THE INDEMNIFIED PARTY TO CLAIMS
PREMISED IN WHOLE OR IN PART IN STRICT LIABILITY. COMPANY AND PURCHASER
ACKNOWLEDGE THAT THIS STATEMENT COMPLIES WITH THE EXPRESS NEGLIGENCE RULE
AND IS CONSPICUOUS.
Section 7.03 No Waiver; Modifications in Writing.
(a) Delay. No failure or delay on the part of either party in exercising
any right, power, or remedy hereunder shall operate as a waiver thereof,
nor shall any single or partial exercise of any such right, power, or
remedy preclude any other or further exercise thereof or the exercise of
any right, power, or remedy. The remedies provided for herein are
cumulative and are not exclusive of any remedies that may be available to a
party at law or in equity or otherwise.
(b) Specific Waiver. Except as otherwise provided herein, no amendment,
waiver, consent, modification, or termination of any provision of this
Agreement or any other Basic Document shall be effective unless signed by
the Company and Purchaser. Any amendment, supplement or modification of or
to any provision of this Agreement or any other Basic Document, any waiver
of any provision of this Agreement or any other Basic Document, and any
consent to any departure by the Company from the terms of any provision of
this Agreement or any other Basic Document shall be effective only in the
specific instance and for the specific purpose for which made or given.
Except where notice is specifically required by this Agreement, no notice
to or demand on the Company in any case shall entitle the Company to any
other or further notice or demand in similar or other circumstances.
Section 7.04 Binding Effect; Assignment.
(a) Binding Effect. This Agreement shall be binding upon the Company,
Purchaser, and their respective successors and permitted assigns. Except
as expressly provided in this Agreement, this Agreement shall not be
construed so as to confer any right or benefit upon any Person other than
the parties to this Agreement, and their respective successors and
permitted assigns.
(b) Assignment of Shares. All or any portion of Shares purchased
pursuant to this Agreement may be sold, assigned or pledged by Purchaser,
subject to compliance with applicable securities laws and the restrictions
on transfer set forth in the Investor's Rights Agreement. The Conversion
Shares may be sold, assigned or pledged by Purchaser, subject to compliance
with applicable securities laws and the Investor's Rights Agreement.
(c) Assignment of Rights. All or any portion of the rights and
obligations of Purchaser under this Agreement with respect to the Basic
Documents, except as set forth therein, may be transferred by Purchaser;
provided, however, that the rights set forth in the Investor's
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Rights Agreement may not be transferred to a transferee of the Shares or
Conversion Shares without the prior written consent of the Company, except
in the case of transfers to one or more Affiliates of Purchaser in
accordance with the terms and conditions of the Investor's Rights
Agreement. Upon any permitted assignment of the Basic Documents, the
assignee shall succeed to all of the assignor's rights and obligations
under the Basic Documents to the extent assigned and Purchaser shall be
automatically released from any such obligations hereunder with respect to
the Basic Documents to the extent assigned, except in the case of an
assignment to an Affiliate of Purchaser in which event Purchaser shall (i)
not be released from its obligations under the Strategic Alliance Agreement
and (ii) be secondarily liable in respect of its obligations under the
other Basic Documents. Upon the request of Purchaser in connection with any
transfer of the Shares or Conversion Shares, the Company shall execute and
deliver any amendment to this Agreement, and the other Basic Documents
reasonably requested by Purchaser to reflect the transfer and delineate the
rights of the transferor and the transferee provided that the Company shall
not be liable for the expenses incurred in documenting such amendment.
Section 7.05 Replacement Securities. Upon receipt of evidence satisfactory
to the Company of the loss, theft, destruction, or mutilation of any certificate
or certificates representing Shares or Conversion Shares and, in the case of any
such loss, theft, or destruction, upon delivery of any indemnity or other
obligation reasonably requested by the Company or its transfer agent to the
Company or, in the case of any such mutilation, upon surrender or cancellation
thereof, the Company will issue a new certificate.
Section 7.06 Communications. All notices and demands provided for hereunder
shall be in writing and shall be given by registered or certified mail, return
receipt requested, telecopy, air courier guaranteeing overnight delivery or
personal delivery to the following addresses:
If to Purchaser:
UtiliCorp United Inc.
20 West Ninth Street
Kansas City, Missouri 64105
Attention: Robert Green
Telecopier: (816) 467-3595
Email: [email protected]
If to the Company:
Quanta Services, Inc.
1360 Post Oak Boulevard, Suite 2100
Houston, Texas 77056
Attention: Vice President and General Counsel
Telecopier: (713) 629-7676
Email: [email protected]
or to such other address as the Company or any Purchaser may designate in
writing. All other communications may be by regular mail or Internet electronic
mail. All notices and
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communications shall be deemed to have been duly given: at the time delivered by
hand, if personally delivered; upon actual receipt if sent by certified mail,
return receipt requested, or regular mail, if mailed; when receipt acknowledged,
if telecopied or sent via Internet electronic mail; and upon actual receipt when
delivered to an air courier guaranteeing overnight delivery.
Section 7.07 Governing Law. This Agreement will be construed in accordance
with and governed by the laws of the State of Missouri without regard to
principles of conflicts of laws.
Section 7.08 Arbitration. Any action, dispute, claim or controversy of any
kind between the Company and a Purchaser arising out of, or pertaining to this
Agreement or the transactions contemplated hereby (a "Dispute") shall be
resolved by binding arbitration in accordance with the terms hereof. Any party
may, by summary proceedings, bring an action in court to compel arbitration of
any Dispute. Any arbitration shall be administered by the American Arbitration
Association (the "AAA") in accordance with the terms of this Section 7.08, the
Commercial Arbitration Rules of the AAA, and, to the maximum extent applicable,
the Federal Arbitration Act. Judgment on any award rendered by an arbitrator may
be entered in any court having jurisdiction. Any arbitration shall be conducted
before a three person panel of arbitrators. Such panel shall consist of one
person designated by the Company, one designated by Purchaser and one designated
by the designees of the Company and Purchaser (collectively, the "Arbitrators").
Such arbitrators designated by each of the Company and Purchaser do not have to
be neutral. If either of the Company or Purchaser fails to designate an
arbitrator within 10 days after the filing of the Dispute with the AAA, or
either of the Company or Purchaser's arbitrators fails to designate a third
arbitrator within 30 days after the later of their appointments, the third
arbitrator shall be appointed by the AAA. An arbitration proceeding hereunder
shall be conducted in Kansas City, Missouri, and shall be concluded within 180
days of the filing of the Dispute with the AAA. The Arbitrators shall be
empowered to award sanctions and to take such other actions as they deem
necessary, to the same extent a judge could impose sanctions or take such other
actions pursuant to the Federal Rules of Civil Procedure and applicable law. No
award by the Arbitrators shall assess consequential, punitive or exemplary
damages or damages for lost profits but may assess costs and expenses in a
manner deemed equitable. The arbitrator shall make specific written findings of
fact and conclusions of law. The decision of the arbitrator shall be final and
binding on each party. All fees of the Arbitrators and any engineer, accountant
or other consultant engaged by the Arbitrators shall be paid by the Company and
Purchaser as awarded by the Arbitrators.
Section 7.09 Execution in Counterparts. This Agreement may be executed in
any number of counterparts and by different parties hereto in separate
counterparts, each of which counterparts, when so executed and delivered, shall
be deemed to be an original and all of which counterparts, taken together, shall
constitute but one and the same Agreement.
REMAINDER OF PAGE INTENTIONALLY LEFT BLANK
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IN WITNESS WHEREOF, the parties hereto execute this Agreement, effective as
of the date first above written.
QUANTA SERVICES, INC.,
a Delaware corporation
By: /s/ Brad Eastman
-------------------------
Name: Brad Eastman
Title: Vice President, Secretary and General Counsel
UTILICORP UNITED INC.,
a Delaware corporation
By: /s/ Robert Green
-------------------------
Name: Robert Green
Title: President
SIGNATURE PAGE TO
SECURITIES PURCHASE AGREEMENT
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EXHIBIT 10.13
INVESTOR'S RIGHTS AGREEMENT
THIS INVESTOR'S RIGHTS AGREEMENT (this "Agreement") is made and entered
into as of September 21, 1999, by and between Quanta Services, Inc., a Delaware
corporation (the "Company"), and UtiliCorp United Inc., a Delaware corporation
("UtiliCorp").
RECITAL
This Agreement is made pursuant to the Securities Purchase Agreement, dated
as of September 21, 1999, by and between the Company and UtiliCorp (the
"Securities Purchase Agreement"). In order to induce UtiliCorp to enter into
the Securities Purchase Agreement, the Company has agreed to provide the
registration and other rights set forth in this Agreement. Pursuant to the
Securities Purchase Agreement, UtiliCorp will acquire shares of the Company's
Series A Convertible Preferred Stock (the "Preferred Stock") which will entitle
UtiliCorp to convert the Preferred Stock into shares of Common Stock, par value
$0.00001 per share, of the Company. The execution and delivery of this Agreement
shall occur contemporaneously with the Closing (as defined in the Securities
Purchase Agreement).
AGREEMENT
The parties agree as follows:
ARTICLE I
DEFINITIONS
SECTION 1.1 DEFINITIONS. Capitalized terms used herein without definition
shall have the meanings given to them in the Securities Purchase Agreement. The
terms set forth below are used herein as so defined:
"AAA" has the meaning specified therefor in Section 5.1 of this Agreement.
"Affiliate" of any Person shall mean:
(a) For purposes of Article II, (i) any Person directly or indirectly
controlled by, controlling or under common control with such first Person,
(ii) any director or officer of such first Person or of any Person referred
to in clause (i) above and (iii) if any Person in clause (i) above is an
individual, any member of the immediate family (including parents, spouse
and children) of such individual and any trust whose principal beneficiary
is such individual or one or more members of such immediate family and any
Person who is controlled by any such member or trust. For purposes of this
definition, any Person which owns directly or indirectly 20% or more of the
securities having ordinary voting power for the election of directors or
other governing body of a corporation or 20% or more of the partnership or
other ownership interests of any other Person (other than as a limited
partner of such other Person) will be deemed to
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"control" (including, with its correlative meanings, "controlled by" and
"under common control with") such corporation or other Person; and
(b) For purpose of Article III, (i) any Subsidiary of such Person or (ii) a
Parent of such Person.
"Beneficial Ownership," "Beneficial Owner," and "Beneficially Own" have the
meanings ascribed to such terms in Rule 13d-3 under the Exchange Act.
"Commission" means the United States Securities and Exchange Commission.
"Common Stock" means the common stock, par value $0.00001 per share, of the
Company.
"Company" has the meaning specified therefor in the introductory paragraph
of this Agreement.
"Competitor" means (a) a provider for third parties of specialized
contracting and maintenance services, primarily for electric,
telecommunications, cable television, natural gas, and transportation
infrastructure (and with respect to natural gas and transportation
infrastructure, only if and when such business lines are a significant part of
the Company's overall business) and (b) in the United States and in other
countries, but only in any of such other countries if and when the Company
develops a substantial market for its services in such country.
"Conversion Shares" means the shares of Common Stock issuable on conversion
of the Preferred Stock.
"Enron Holders" has the meaning specified therefor in Section 2.1(d) of
this Agreement.
"Enron Registration Rights Agreement" has the meaning specified therefor in
Section 2.1(d) of this Agreement.
"Dispute" has the meaning specified therefor in Section 5.1 of this
Agreement.
"Exchange Act" shall mean the Securities Exchange Act of 1934, as amended,
and the rules and regulations of the Commission promulgated thereunder.
"Holder" means the record holder of any Registrable Securities.
"Inspectors" has the meaning specified therefor in Section 2.3(g) of this
Agreement.
"Losses" has the meaning specified therefor in Section 2.8 of this
Agreement.
"New Securities" has the meaning specified therefor in Section 3.2(b) of
this Agreement.
"Other Holders" has the meaning specified therefor in Section 2.1(d) of
this Agreement.
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"Parent" means any corporation or other legal entity which at the time
directly or indirectly controls at least a majority of the equity of such entity
having by the terms thereof ordinary voting power to elect a majority of the
board of directors, managers, general partner(s), or other, equivalent governing
body of such entity (irrespective of whether or not at the time equity of any
other class or classes of such entity shall have or might have voting power by
reason of the happening of any contingency).
"Person" means any individual, corporation, company, voluntary association,
partnership, joint venture, trust, limited liability company, unincorporated
organization, government or any agency, instrumentality or political subdivision
thereof, or any other form of entity.
"Pre-Emptive Purchasers" has the meaning specified therefor in Section 3.1
of this Agreement.
"Pre-Emptive Right" has the meaning specified therefor in Section 3.1 of
this Agreement.
"Preferred Stock" has the meaning specified therefor in the Recital of this
Agreement.
"Proportionate Number" has the meaning specified therefor in Section 3.2(a)
of this Agreement.
"Records" has the meaning specified therefor in Section 2.3(g) of this
Agreement.
"Registrable Securities" means the Conversion Shares and any other shares
of Common Stock (or securities convertible into Common Stock) acquired by
UtiliCorp in privately-negotiated or open market transactions as contemplated by
the parties until such time as such securities cease to be Registrable
Securities pursuant to Section 1.2 hereof.
"Registration Expenses" has the meaning specified therefor in Section
2.7(a) of this Agreement.
"Registration Statement" has the meaning specified therefor in Section
2.1(b) of this Agreement.
"Requesting Holder(s)" has the meaning specified therefor in Section 2.1(a)
and (b), as applicable, of this Agreement.
"Request Notice" has the meaning specified therefor in Section 2.1(a) this
Agreement.
"Securities Act" means the Securities Act of 1933, as amended, and the
rules and regulations of the Commission promulgated thereunder.
"Securities Purchase Agreement" has the meaning specified therefor in the
Recital of this Agreement.
"Selling Expenses" has the meaning specified therefor in Section 2.7(a) of
this Agreement.
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"Selling Holder" means a Holder who is selling Registrable Securities
pursuant to a Registration Statement.
"Then Existing Shares" has the meaning specified therefor in Section 3.2(a)
of this Agreement.
"Transfer" has the meaning specified therefor in Section 4.1 of this
Agreement.
"UtiliCorp" has the meaning specified therefor in the introductory
paragraph of this Agreement.
"Voting Securities" has the meaning specified therefor in Section 2.1(d) of
this Agreement.
SECTION 1.2 REGISTRABLE SECURITIES. Any Registrable Security will cease to be
a Registrable Security when (a) a Registration Statement covering such
Registrable Security has been declared effective by the Commission and such
Registrable Security has been sold or disposed of pursuant to such effective
Registration Statement; (b) such Registrable Security is disposed of pursuant to
Rule 144 (or any similar provision then in force) under the Securities Act; (c)
such Registrable Security is eligible to be, and at the time of determination
can be, disposed of pursuant to paragraph (k) of Rule 144 (or any similar
provision then in force) under the Securities Act; or (d) such Registrable
Security is held by the Company or one of its subsidiaries.
ARTICLE II
REGISTRATION RIGHTS
SECTION 2.1 DEMAND REGISTRATION.
(a) Request for Registration. After the expiration of 180 calendar days after
the Closing Date, any Holder or Holders who collectively Beneficially Own
at least 50% of the Registrable Securities may request (a "Request Notice")
the Company to register under the Securities Act all or any portion of the
Registrable Securities that are held by such Holder or Holders
(collectively, the "Requesting Holder") for sale in the manner specified in
the Request Notice.
(b) Company's Obligations. Promptly following receipt of a Request Notice, the
Company shall (i) notify each Holder (except the Requesting Holder) of the
receipt of a Request Notice and (ii) shall use its commercially reasonable
efforts to effect such registration (including, without limitation,
preparing and filing a registration statement under the Securities Act
(each such registration statement, a "Registration Statement") effecting
the registration under the Securities Act, for public sale in accordance
with the method of disposition specified in such Request Notice) of the
Registrable Securities specified in the Request Notice (and in any notices
that the Company receives from other Holders no later than the 15th
calendar day after receipt of the notice sent by the Company) (such other
Holders and the Requesting Holders, the "Requesting Holders"). If such
method of disposition shall be an underwritten public offering, the Company
may designate the managing underwriter of such offering, subject to the
approval of the Requesting Holders holding a majority of the Registrable
Securities to be registered,
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which approval shall not be withheld unreasonably. The Company shall be
obligated to register Registrable Securities pursuant to this Section 2.1
on one occasion only.
(c) Deferral by Company. If the Company has received a Request Notice, whether
or not a Registration Statement with respect thereto has been filed or has
become effective, or an event referred to in Section 2.3(e) has occurred,
and the Company furnishes to the Requesting Holders a copy of a resolution
of the Board of Directors of the Company certified by the Secretary of the
Company stating that in the good faith judgment of the Board of Directors
it would not be in the best interest of the Company's stockholders for such
Registration Statement (i) to be filed on or before the date such filing
would otherwise be required hereunder, (ii) to become effective or (iii) to
be updated by post-effective amendment or prospectus supplement because (A)
such action would materially interfere with a significant acquisition,
corporate reorganization or other similar transaction involving the
Company, (B) such action would require premature disclosure of material
information that the Company has a bona fide business purpose for
preserving as confidential, or (C) the Company is unable to comply with
requirements of the Commission, the Company shall have the right, but not
more than once in any 365-day period with respect to any Request Notice, to
defer such filing or effectiveness for such period as may be reasonably
necessary (which period shall not, in any event, exceed 90 calendar days
from the date the response period for Holders pursuant to Section 2.1(b)
expires).
(d) Participation Rights of Company and Others. The Company shall be entitled
to include in any Registration Statement filed pursuant to this Section
2.1, for sale in accordance with the method of disposition specified by the
Requesting Holder, securities of the Company entitled to vote generally in
the election of directors (or any securities convertible into or
exchangeable for or exercisable for the purchase of securities so entitled
generally to vote in the election of directors) (collectively, "Voting
Securities") to be sold by the Company for its own account, except as and
to the extent that, in the opinion of the managing underwriter (if such
method of disposition shall be an underwritten public offering), such
inclusion would materially jeopardize the successful marketing of the
Registrable Securities to be sold. Any Person other than a Holder (the
"Other Holders") entitled to piggy-back registration rights with respect to
a Registration Statement filed pursuant to this Section 2.1 may include
Voting Securities of the Company with respect to which such rights apply in
such Registration Statement for sale in accordance with the method of
disposition specified by the Requesting Holder, except and to the extent
that, in the opinion of the managing underwriter (if such method of
disposition shall be an underwritten public offering), such inclusion would
materially jeopardize the successful marketing of the Registrable
Securities to be sold. Except as provided in this subsection (d) and in
Section 2.6 of this Agreement, the Company will not effect any other
registration of its Voting Securities (except with respect to Registration
Statements (i) on Form S-4 or S-8 or any forms succeeding thereto for
purposes permissible under such forms as of the date hereof or (ii) filed
in connection with an exchange offer or an offering of securities solely to
the Company's existing stockholders or such other Registration Statements
(A) for the resale of shares issued pursuant to an employee stock ownership
trust or other benefit plan of a business acquired in an acquisition by the
Company or (B) in connection with non-underwritten resales of securities
issued to owners of a business acquired in an acquisition by the Company),
whether for its own account or that of any Other Holder other than holders
of "Registerable Securties" (as such term is defined in that certain
Registration Rights Agreement, dated September 29, 1998, between Joint
Energy Development Investments II Limited Partnership, Enron Capital &
Trade Resources Corp. and
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the Company, as amended (the "Enron Registration Rights Agreement")) under
the Enron Registration Rights Agreement (the "Enron Holders"), from the
date of receipt of a Request Notice requesting the registration of an
underwritten public offering until the completion or abandonment of the
distribution by the underwriters of all securities thereunder; provided,
however, such restricted period shall not extend beyond the date 90
calendar days subsequent to the effective date of such Registration
Statement.
(e) Prohibition on Future Grants. From and after the date of this Agreement
and until no Registrable Securities remain outstanding, the Company shall
not grant any demand registration rights to any Person unless such rights
are expressly made subject to the right of the Holders to include an equal
number of shares of the Registrable Securities along with the other
Person's shares in any registration relating to an underwritten public
offering, except and to the extent that, in the opinion of the managing
underwriter, the inclusion of all shares requested to be registered by all
Persons holding registration rights, would materially jeopardize the
successful marketing of the securities (including the Registrable
Securities) to be sold.
SECTION 2.2 PIGGY-BACK REGISTRATION.
(a) Company Notice. If the Company proposes to register any Voting Securities
under the Securities Act for sale to the public for cash, whether for its
own account or for the account of Other Holders or both (except with
respect to Registration Statements on Forms S-4 or S-8 or any forms
succeeding thereto for purposes permissible under such forms as of the date
hereof or filed in connection with an exchange offer or an offering of
securities solely to the Company's existing stockholders), each such time
it will give written notice to all Holders of its intention to do so no
less than 20 calendar days prior to the anticipated filing date.
(b) Request. Upon the written request of any Holder received by the Company no
later than the 15th calendar day after receipt by such Holder of the notice
sent by the Company, to register, on the same terms and conditions as the
securities otherwise being sold pursuant to such registration, any of its
Registrable Securities (which request shall state the intended method of
disposition thereof), the Company will use its commercially reasonable
efforts to cause the Registrable Securities as to which registration shall
have been so requested to be included in the securities to be covered by
the Registration Statement proposed to be filed by the Company, on the same
terms and conditions as any similar securities included therein, all to the
extent requisite to permit the sale or other disposition by each Holder (in
accordance with its written request) of such Registrable Securities so
registered; provided, however, that the Company may at any time, in its
sole discretion and without the consent of any Holder, abandon the proposed
offering in which any Holder had requested to participate.
(c) Underwriter's Cut-Back. The number of Registrable Securities to be
included in such a registration may be reduced or eliminated if and to the
extent, in the case of an underwritten offering, the managing underwriter
shall render to the Company its opinion that such inclusion would
materially jeopardize the successful marketing of the securities (including
the Registrable Securities) proposed to be sold therein; provided, however,
that (a) in the case of a Registration Statement filed pursuant to the
exercise of demand registration rights of any Other Holders, priority shall
be given in the following manner of allocation: (i) first, to the Other
Holders demanding such registration; (ii) then equally (on a share-for-
share basis) to the Holders
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and Enron Holders; (iii) then to the Company; and (iv) then to Other
Holders or other stockholders of the Company desiring to participate with
the Company's consent (other than the Other Holders entitled to participate
under clause (i) or (ii)), and (b) in the case of a Registration Statement
the filing of which is initiated by the Company, priority shall be given in
the following order of allocation: (i) first to the Company and (ii) then
equally (on a share-for-share basis) to the Holders and Other Holders. In
the event that the number of Registrable Securities to be included in a
registration is to be reduced as provided above, within 10 business days
after receipt by each Holder proposing to sell Registrable Securities
pursuant to the registered offering of the opinion of such managing
underwriter, all such Selling Holders may allocate among themselves the
number of shares of such Registrable Securities which such opinion states
may be distributed without adversely affecting the distribution of the
securities covered by the Registration Statement or, if less, the number of
such shares allocable to Holders of Registrable Securities after reduction
for any allocations to the Company or Other Holders in accordance with the
priority provisions set forth in the preceding sentence, and if such
Holders are unable to agree among themselves with respect to such
allocation, such allocation shall be made in proportion to the respective
numbers of shares specified in their respective written requests.
(d) Prohibition on Future Grants. From and after the date of this Agreement
and until no Registrable Securities remain outstanding, the Company shall
not grant any piggy-back registration rights to any Person unless such
rights are expressly made subject to the prior right of Holders to include
their Registrable Securities on a pro-rata basis in any registration
relating to an underwritten public offering, except and to the extent that,
in the opinion of the managing underwriter, the inclusion in the offering
of all shares requested to be registered by all Persons holding
registration rights would materially jeopardize the successful marketing of
the securities (including the Registrable Securities) to be sold.
SECTION 2.3 REGISTRATION PROCEDURES. If and whenever the Company is required
pursuant to this Agreement to effect the registration of any of the Registrable
Securities under the Securities Act, the Company will, as expeditiously as
possible:
(a) prepare and file as promptly as reasonably possible with the Commission a
Registration Statement, on a form available to the Company, with respect to
such securities (which filing shall be made within 30 calendar days after
the receipt by the Company of a Request Notice) and use its commercially
reasonable efforts to cause such Registration Statement to become and
remain effective for the period of the distribution contemplated thereby
(determined pursuant to subsection (g) below);
(b) prepare and file with the Commission such amendments and supplements to
such Registration Statement and the prospectus used in connection therewith
as may be necessary to keep such Registration Statement effective for the
distribution period (determined pursuant to subsection (g) below) and as
may be necessary to comply with the provisions of the Securities Act with
respect to the disposition of all securities covered by such Registration
Statement;
(c) furnish to each Selling Holder and to each underwriter such number of
copies of the Registration Statement and the prospectus included therein
(including each preliminary prospectus and each document incorporated by
reference therein to the extent then
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required by the rules and regulations of the Commission) as such Persons
may reasonably request in order to facilitate the public sale or other
disposition of the Registrable Securities covered by such Registration
Statement;
(d) if applicable, use its commercially reasonable efforts to register or
qualify the Registrable Securities covered by such Registration Statement
under the securities or blue sky laws of such jurisdictions as the Selling
Holders or, in the case of an underwritten public offering, the managing
underwriter, shall reasonably request, provided that the Company will not
be required to qualify generally to transact business in any jurisdiction
where it is not then required to so qualify or to take any action which
would subject it to general service of process in any such jurisdiction
where it is not then so subject;
(e) immediately notify each Selling Holder and each underwriter, at any time
when a prospectus relating thereto is required to be delivered under the
Securities Act, of the happening of any event as a result of which the
prospectus contained in such Registration Statement, as then in effect,
includes an untrue statement of a material fact or omits to state any
material fact required to be stated therein or necessary to make the
statements therein not misleading in the light of the circumstances then
existing and as promptly as practicable amend or supplement the prospectus
or take other appropriate action so that the prospectus does not include an
untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements therein
not misleading in the light of the circumstances then existing;
(f) in the case of an underwritten public offering, furnish upon request, (i)
on the date that Registrable Securities are delivered to the underwriters
for sale pursuant to such Registration Statement, an opinion of counsel for
the Company dated as of such date and addressed to the underwriters and to
the Selling Holders, stating that such Registration Statement has become
effective under the Securities Act and that (A) to the best knowledge of
such counsel, no stop order suspending the effectiveness thereof has been
issued and no proceedings for that purpose have been instituted or are
pending or contemplated under the Securities Act, (B) the Registration
Statement, the related prospectus, and each amendment or supplement thereof
comply as to form in all material respects with the requirements of the
Securities Act and the applicable rules and regulations thereunder of the
Commission (except that such counsel need express no opinion as to the
financial statements, or any expertized schedule, report or information
contained or incorporated therein) and (C) to such other effects as may
reasonably be requested by counsel for the underwriters, and (ii) on the
effective date of the Registration Statement and on the date that
Registrable Securities are delivered to the underwriters for sale pursuant
to such Registration Statement, a letter dated such dates from the
independent accountants retained by the Company, addressed to the
underwriters and, if available, to the Selling Holders, stating that they
are independent public accountants within the meaning of the Securities Act
and that, in the opinion of such accountants, the financial statements of
the Company and the schedules thereto that are included or incorporated by
reference in the Registration Statement or the prospectus, or any amendment
or supplement thereof, comply as to form in all material respects with the
applicable requirements of the Securities Act and the published rules and
regulations thereunder, and such letter shall additionally address such
other financial matters (including information as to the period ending no
more than five business days
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prior to the date of such letter) included in the Registration Statement in
respect of which such letter is being given as the underwriters may
reasonably request;
(g) make available for inspection by one representative of the Selling Holders,
designated by a majority thereof, any underwriter participating in any
distribution pursuant to such Registration Statement, and any attorney,
accountant or other agent retained by such representative of the Selling
Holders or underwriter (the "Inspectors"), all financial and other
records, pertinent corporate documents and properties of the Company
(collectively, the "Records"), and cause the Company's officers, directors
and employees to supply all information reasonably requested by any such
Inspector in connection with such Registration Statement; provided,
however, that with respect to any Records that are confidential, the
Inspectors shall take such action as the Company may reasonably request in
order to maintain the confidentiality of the Records. For purposes of
subsections (a) and (b) above with respect to demand registration only, the
period of distribution of Registrable Securities in a firm commitment
underwritten public offering shall be deemed to extend until the earlier of
(a) the date each underwriter has completed the distribution of all
securities purchased by it or (b) the date 90 calendar days subsequent to
the effective date of such Registration Statement, and the period of
distribution of Registrable Securities in any other registration shall be
deemed to extend until the earlier of the sale of all Registrable
Securities covered thereby or one year;
(h) cause all such Registrable Securities registered pursuant to this Agreement
to be listed on each securities exchange on which similar securities issued
by the Company are then listed;
(i) use its commercially reasonable efforts to keep effective and maintain for
the period specified in subsection (g) a registration, qualification,
approval or listing obtained to cover the Registrable Securities as may be
necessary for the Selling Holders to dispose thereof and shall from time to
time amend or supplement any prospectus used in connection therewith to the
extent necessary in order to comply with applicable law;
(j) use its commercially reasonable efforts to cause the Registrable Securities
to be registered with or approved by such other governmental agencies or
authorities as may be necessary by virtue of the business and operations of
the Company to enable the Selling Holders to consummate the disposition of
such Registrable Securities; and
(k) enter into customary agreements and take such other actions as are
reasonably requested by the Selling Holders or the underwriters, if any, in
order to expedite or facilitate the disposition of such Registrable
Securities.
Each Selling Holder, upon receipt of notice from the Company of the
happening of any event of the kind described in subsection (e) of this Section
2.3, shall forthwith discontinue disposition of the Registrable Securities until
such Selling Holder's receipt of the copies of the supplemented or amended
prospectus contemplated by subsection (e) of this Section 2.3 or until it is
advised in writing by the Company that the use of the prospectus may be resumed,
and has received copies of any additional or supplemental filings which are
incorporated by reference in the prospectus, and, if so directed by the Company,
such Selling Holder will, or will request the managing underwriter or
underwriters, if any, to deliver to the Company (at the Company's
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expense) all copies in their possession or control, other than permanent file
copies then in such Selling Holder's possession, of the prospectus covering such
Registrable Securities current at the time of receipt of such notice. If the
Company shall give any such notice, the time periods mentioned in subsection (g)
of this Section 2.3 shall be extended by the number of days during the period
from and including the date of the giving of such notice to and including the
date when each Selling Holder shall have received the copies of the supplemented
or amended prospectus contemplated by subsection (e) of this Section 2.3 hereof
or the notice that they may resume use of the prospectus.
In connection with each registration hereunder with respect to an
underwritten public offering, the Company and each Selling Holder agrees to
enter into a written agreement with the managing underwriter or underwriters
selected in the manner herein provided in such form and containing such
provisions as are customary in the securities business for such an arrangement
between underwriters and companies of the Company's size and investment stature.
SECTION 2.4 COOPERATION BY SELLING HOLDERS. The Company shall have no
obligation to include in such Registration Statement shares of a Selling Holder
who has failed to timely furnish such information which, in the written opinion
of counsel to the Company, is reasonably required in order for the Registration
Statement to comply with the Securities Act.
SECTION 2.5 RESTRICTIONS ON PUBLIC SALE BY SELLING HOLDERS OF REGISTRABLE
SECURITIES. To the extent not inconsistent with applicable law, including
insurance codes, each Selling Holder of Registrable Securities that is included
in a Registration Statement which registers Registrable Securities pursuant to
this Agreement agrees not to effect any public sale or distribution of the issue
being registered (or any securities of the Company convertible into or
exchangeable or exercisable for securities of the same type as the issue being
registered) during the 14 business days before, and during the 90 calendar day
period beginning on, the effective date of a Registration Statement filed by the
Company (except as part of such registration), but only if and to the extent
requested in writing (with reasonable prior notice) by the managing underwriter
or underwriters in the case of an underwritten public offering by the Company of
securities of the same type as the Registrable Securities, provided that the
duration of the foregoing restrictions shall be no longer than the duration of
the shortest restriction imposed by the underwriters on the officers or
directors or any other stockholder of the Company on whom a restriction is
imposed; and, provided further that to the extent the Selling Holders do not
participate in the underwritten public offering, the period of time for which
the Company is required to keep any other Registration Statement which includes
Registrable Securities that is effective concurrently with the holdback period
described above continuously effective shall be increased by a period equal to
such requested holdback period.
SECTION 2.6 RESTRICTIONS ON PUBLIC SALE BY THE COMPANY. To the extent required
by an underwriter in an underwritten public offering, the Company agrees not to
effect on its own behalf any public sale or distribution of any securities
similar to those being registered, or any securities convertible into or
exchangeable or exercisable for such securities, during the 14 business days
before, and during the 90 calendar day period beginning on, the effective date
of any Registration Statement in which the Selling Holders of Registrable
Securities are participating except pursuant to such Registration Statement or a
Registration Statement on Form S-8 or Form S-4 or such other Registration
Statements for (a) the resale of shares issued pursuant
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to an employee stock ownership trust or other benefit plan of a business
acquired in an acquisition by the Company or (b) in connection with non-
underwritten commitments to register the resale of securities issued to owners
of a business acquired in an acquisition by the Company. This section applies to
the demand registration right only.
SECTION 2.7 EXPENSES.
(a) Certain Definitions. "Registration Expenses" means all expenses incident
to the Company's performance under or compliance with this Agreement,
including, without limitation, all registration and filing fees, blue sky
fees and expenses, printing expenses, listing fees, fees and disbursements
of counsel and independent public accountants for the Company, fees of the
National Association of Securities Dealers, Inc., transfer taxes, fees of
transfer agents and registrars, costs of insurance and reasonable out-of-
pocket expenses, including, without limitation, all reasonable expenses
incurred directly by the Selling Holders for one legal counsel, but
excluding any Selling Expenses. "Selling Expenses" means all underwriting
fees, discounts and selling commissions allocable to the sale of the
Registrable Securities.
(b) Parties' Obligations. The Company will pay all Registration Expenses in
connection with each Registration Statement filed pursuant to this
Agreement, whether or not the Registration Statement becomes effective, and
the Selling Holders shall pay all Selling Expenses in connection with any
Registrable Securities registered pursuant to this Agreement.
SECTION 2.8 INDEMNIFICATION.
(a) By the Company. In the event of a registration of any Registrable
Securities under the Securities Act pursuant to this Agreement, the Company
will indemnify and hold harmless each Selling Holder thereunder and each
underwriter, pursuant to the applicable underwriting agreement with such
underwriter, of Registrable Securities thereunder and each Person, if any,
who controls such Selling Holder or underwriter within the meaning of the
Securities Act and the Exchange Act, against any losses, claims, damages or
liabilities (including reasonable attorneys' fees) (collectively,
"Losses"), joint or several, to which such Selling Holder or underwriter or
controlling Person may become subject under the Securities Act, the
Exchange Act or otherwise, insofar as such Losses (or actions in respect
thereof) arise out of or are based upon any untrue statement or alleged
untrue statement of any material fact contained in any Registration
Statement under which such Registrable Securities were registered under the
Securities Act pursuant to this Agreement, any preliminary prospectus or
final prospectus contained therein, or any amendment or supplement thereof,
or arise out of or are based upon the omission or alleged omission to state
therein a material fact required to be stated therein or necessary to make
the statements therein not misleading, and will reimburse each such Selling
Holder, each such underwriter and each such controlling Person for any
legal or other expenses reasonably incurred by them in connection with
investigating or defending any such Loss or actions; provided, however,
that the Company will not be liable in any such case if and to the extent
that any such loss, claim, damage or liability arises out of or is based
upon an untrue statement or alleged untrue statement or omission or alleged
omission so made in conformity with information furnished by such Selling
Holder, such underwriter or such controlling Person in writing specifically
for use in such Registration Statement or prospectus.
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(b) By the Selling Holder(s). Each Selling Holder agrees to indemnify and hold
harmless the Company, its directors, officers, employees and agents and
each Person, if any, who controls the Company within the meaning of the
Securities Act or of the Exchange Act to the same extent as the foregoing
indemnity from the Company to such Selling Holder, but only with respect to
information regarding such Selling Holder furnished in writing by or on
behalf of such Selling Holder expressly for inclusion in any Registration
Statement or prospectus relating to the Registrable Securities, or any
amendment or supplement thereto; provided, however, that the liability of
such Selling Holder shall not be greater in amount than the dollar amount
of the proceeds (net of any Selling Expenses) received by such Selling
Holder from the sale of the Registrable Securities giving rise to such
indemnification.
(c) Notice. Promptly after receipt by an indemnified party hereunder of notice
of the commencement of any action, such indemnified party shall, if a claim
in respect thereof is to be made against the indemnifying party hereunder,
notify the indemnifying party in writing thereof, but the omission so to
notify the indemnifying party shall not relieve it from any liability which
it may have to any indemnified party other than under this Section 2.8. In
any action brought against any indemnified party, it shall notify the
indemnifying party of the commencement thereof. The indemnifying party
shall be entitled to participate in and, to the extent it shall wish, to
assume and undertake the defense thereof with counsel reasonably
satisfactory to such indemnified party and, after notice from the
indemnifying party to such indemnified party of its election so to assume
and undertake the defense thereof, the indemnifying party shall not be
liable to such indemnified party under this Section 2.8 for any legal
expenses subsequently incurred by such indemnified party in connection with
the defense thereof other than reasonable costs of investigation and of
liaison with counsel so selected; provided, however, that, (i) if the
indemnifying party has failed to assume the defense and employ counsel or
(ii) if the defendants in any such action include both the indemnified
party and the indemnifying party and counsel to the indemnified party shall
have concluded that there may be reasonable defenses available to the
indemnified party that are different from or additional to those available
to the indemnifying party or if the interests of the indemnified party
reasonably may be deemed to conflict with the interests of the indemnifying
party, then the indemnified party shall have the right to select a separate
counsel and to assume such legal defense and otherwise to participate in
the defense of such action, with the reasonable expenses and fees of such
separate counsel and other reasonable expenses related to such
participation to be reimbursed by the indemnifying party as incurred.
(d) Contribution. If the indemnification provided for in this Section 2.8 is
held by a court or government agency of competent jurisdiction to be
unavailable to the Company or the Selling Holders or is insufficient to
hold them harmless in respect of any Losses, then each such indemnifying
party, in lieu of indemnifying such indemnified party, shall contribute to
the amount paid or payable by such indemnified party as a result of such
Losses as between the Company on the one hand and each Selling Holder on
the other, in such proportion as is appropriate to reflect the relative
fault of the Company on the one hand and of each Selling Holder on the
other in connection with the statements or omissions which resulted in such
Losses as well as any other relevant equitable considerations; provided,
however, that in no event shall a Selling Holder be required to contribute
an aggregate amount in excess of the dollar amount of proceeds (net of
Selling Expenses) received by such Selling Holder from the sale of
Registrable Securities giving rise to such indemnification. The relative
fault of the Company on the one
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hand and each Selling Holder on the other shall be determined by reference
to, among other things, whether the untrue or alleged untrue statement of a
material fact or the omission or alleged omission to state a material fact
has been made by, or relates to, information supplied by such party, and
the parties' relative intent, knowledge, access to information and
opportunity to correct or prevent such statement or omission. No person
guilty of fraudulent misrepresentation (within the meaning of Section 11(f)
of the Securities Act) shall be entitled to contribution from any Person
who is not guilty of such fraudulent misrepresentation.
SECTION 2.9 RULE 144 REPORTING. With a view to making available the benefits
of certain rules and regulations of the Commission that may permit the sale of
the Registrable Securities to the public without registration, the Company
agrees to use commercially reasonable efforts to:
(a) Make and keep public information regarding the Company available, as those
terms are understood and defined in Rule 144 of the Securities Act, at all
times from and after the Closing Date;
(b) File with the Commission in a timely manner all reports and other documents
required of the Company under the Securities Act and the Exchange Act at
all times from and after the Closing Date; and
(c) So long as a Holder owns any Registrable Securities, furnish to the Holder
forthwith upon written request a written statement by the Company as to its
compliance with the reporting requirements of Rule 144 and of the
Securities Act and the Exchange Act, a copy of the most recent annual or
quarterly report of the Company, and such other reports and documents so
filed as a Holder may reasonably request in availing itself of any rule or
regulation of the Commission allowing a Holder to sell any such securities
without registration.
SECTION 2.10 TRANSFER OR ASSIGNMENT OF REGISTRATION RIGHTS. The rights to
cause the Company to register Registrable Securities granted to UtiliCorp by the
Company under this Article II may be transferred or assigned by UtiliCorp to a
transferee or assignee of such Registrable Securities that is an Affiliate of
UtiliCorp, provided that the Company is given written notice prior to said
transfer or assignment, stating the name and address of such Affiliate and
identifying the securities with respect to which such registration rights are
being transferred or assigned, and, provided further, that the Affiliate assumes
in writing the obligations of UtiliCorp under this Agreement. Such registration
rights shall not otherwise be transferable.
SECTION 2.11 REGISTRABLE SECURITIES HELD BY THE COMPANY OR ITS AFFILIATES. In
determining whether the Holders of the required amount of Registrable Securities
have concurred in any direction, amendment, supplement, waiver or consent,
Registrable Securities owned by the Company or one of its Affiliates shall be
disregarded.
ARTICLE III
PRE-EMPTIVE RIGHT
SECTION 3.1 PRE-EMPTIVE RIGHT. Subject to Section 3.5 hereof, the Company
hereby grants to each Holder (the "Pre-Emptive Purchasers") an irrevocable right
to purchase a Proportionate Number (as defined in Section 3.2(a)) of shares of
Common Stock in respect of the
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issuance or sale (or deemed issuance or sale) by the Company, from time to time
during each fiscal quarter of the Company, of New Securities to third parties
(the "Pre-Emptive Right"). The Pre-Emptive Right shall be subject to the
following provisions of this Article III.
SECTION 3.2 CERTAIN DEFINITIONS AND DETERMINATIONS.
(a) Proportionate Number. The "Proportionate Number" of shares of Common Stock
that may be purchased by a Pre-Emptive Purchaser in respect of the
applicable fiscal quarter shall be determined by multiplying (as to each
issuance or sale to each third party) (i) the number of New Securities (as
defined in Section 3.2(b)) issued or sold (or deemed to be issued or sold)
by the Company to such third party during such applicable fiscal quarter of
the Company times (ii) a fraction of which (A) the numerator is the number
of Conversion Shares (on an as converted basis) owned by the Pre-Emptive
Purchaser on the date on which the shares of Preferred Stock were first
issued (collectively, the "Then Existing Shares") and (B) the denominator
is the total number of shares of Common Stock outstanding (assuming full
conversion of all outstanding securities and the full exercise of all
outstanding options, rights, and warrants to acquire Common Stock of the
Company) on the date on which the shares of Preferred Stock were first
issued. For purposes of this Article III, if the Pre-Emptive Purchaser is
not the original holder of the shares of Preferred Stock, then the number
of Conversion Shares (on an as converted basis) deemed owned by such Pre-
Emptive Purchaser on the date on which the shares of Preferred Stock were
first issued shall be the number of Conversion Shares (on an as converted
basis) it acquired from the original holder or other transferor at any time
(but without duplication for successive transfers and retransfers of the
same shares).
(b) "New Securities" shall mean (i) any Voting Capital Stock (as defined in
Section 3.2(c) below) of the Company whether now authorized or not and (ii)
in the case of the issuance or sale of rights, options, or warrants to
purchase such Voting Capital Stock, and securities of any type whatsoever
that are, or may become, convertible into Voting Capital Stock
(collectively, "Capital Stock Equivalents"), the Voting Capital Stock
issued upon the exercise or conversion of such Capital Stock Equivalents;
provided that the term "New Securities" does not include (i) securities
purchased under the Securities Purchase Agreement; (ii) securities issuable
upon conversion or exercise of the Preferred Stock; (iii) securities issued
in connection with any stock split, stock dividend or recapitalization of
the Company; (iv) securities issued upon conversion or exercise of any
currently outstanding Capital Stock Equivalents; or (v) securities issued
upon conversion or exercise of any Capital Stock Equivalents if the Pre-
Emptive Right was provided upon the issuance of such Capital Stock
Equivalent.
(c) "Voting Capital Stock" shall mean Common Stock or other capital stock which
is entitled to vote generally with the Common Stock upon the election of
directors and other matters submitted to a general vote of stockholders.
(d) "Closing Price" shall mean on any particular date (i) the last sale price
per share of the Common Stock on such date on the principal stock exchange
on which the Common Stock has been listed or, if there is no such price on
such date, then the last sale price on such exchange on the date nearest
preceding such date, (ii) if the Common Stock is not listed on any stock
exchange, the final bid price for a share of Common Stock in the over-the-
counter market, as reported by the National Association of Securities
Dealers Automated Quotation System
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("NASDAQ") at the close of business on such date, or the last sales price
if such price is reported and final bid prices are not available, (iii) if
the Common Stock is not quoted on the NASDAQ, the bid price for a share of
Common Stock in the over-the-counter market as reported by the National
Quotation Bureau Incorporated (or any similar organization or agency
succeeding to its functions of reporting prices), or (iv) if the Common
Stock is no longer publicly traded, as determined in good faith by the
Board of Directors of the Company based upon the price that would be paid
by a willing buyer of the shares at issue, in a sale process designed to
maximize value and attract a reasonable number of participants to provide a
fair determination of such value.
SECTION 3.3 MECHANICS. In the event the Company issues or sells (or is deemed
to issue or sell) New Securities, within two business days after the end of such
fiscal quarter in which the New Securities were issued or sold, the Company
shall give each Pre-Emptive Purchaser written notice of the issuance, describing
the type of New Securities issued or sold, the date of the issuance or sale (or
deemed issuance or sale), the Proportionate Number of shares of Common Stock
related to the New Securities that it may acquire and the aggregate purchase
price payable by it upon exercise of its Pre-Emptive Right (including relevant
details as to the calculation of such purchase price). The purchase price for
each such share of Common Stock shall be equal to the Closing Price of the
Common Stock on the date of issuance or sale (or deemed issuance or sale) of the
corresponding New Security. Each Pre-Emptive Purchaser shall exercise its Pre-
Emptive Right (if at all) by delivering, within 10 business days after the end
of such fiscal quarter in which the New Securities were issued or sold (or
deemed to be issued or sold, (a) notice to the Company stating therein the
quantity of its Proportionate Number of shares of Common Stock to be purchased
and (b) payment to the Company of the aggregate purchase price for such shares
in immediately available funds. Thereupon, the Company shall promptly issue and
deliver such Pre-Emptive Purchaser a certificate or certificates for the number
of shares of Common Stock related to the New Securities which the Pre-Emptive
Purchaser has elected to purchase.
SECTION 3.4 ADJUSTMENTS. The applicable purchase price and each component of
the definition of Proportionate Number shall be adjusted appropriately to
reflect stock dividends, combinations, splits, reclassifications, exchanges,
substitutions or other similar adjustments with respect to the New Securities
issued during the relevant fiscal quarter that occur prior to the exercise of
the applicable Pre-Emptive Right.
SECTION 3.5 TRANSFER OF PRE-EMPTIVE RIGHT. The Pre-Emptive Right set forth in
this Article III may be transferred or assigned by UtiliCorp only to a
transferee or assignee of the Then Existing Shares that is an Affiliate of
UtiliCorp, provided that the Company is given written notice prior to said
transfer or assignment, stating the name and address or the Affiliate and
identifying the securities with respect to which such Pre-Emptive Rights are
being transferred or assigned, and, provided further, that the Affiliate of such
rights assumes in writing the obligations of such Pre-Emptive Purchaser under
this Agreement.
SECTION 3.6 TERMINATION OF PRE-EMPTIVE RIGHT. The Pre-Emptive Right granted
under this Agreement shall terminate on the first to occur of (a) expiration of
the 10-day exercise period after a fiscal quarter in which the Pre-Emptive
Purchaser fails to exercise its Pre-Emptive Right in full or (b) the Pre-Emptive
Purchaser's voluntary or involuntary, direct or indirect
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transfer, sale, assignment, donation, pledge or other encumbrance of any shares
of Preferred Stock or Conversion Shares (except to an Affiliate).
ARTICLE IV
TRANSFERS OF SHARES
SECTION 4.1 TRANSFERS. Except as otherwise expressly provided herein and
subject to applicable law, a Holder may, voluntarily or involuntarily, directly
or indirectly, sell, transfer, assign, donate, pledge or otherwise encumber or
dispose of any interest in all or any portion of the shares of Preferred Stock
and the Conversion Shares (a "Transfer") without restriction.
SECTION 4.2 SECURITIES LAWS; ASSIGNMENT OF OBLIGATIONS. A Holder shall not
effect any Transfer until:
(a) There is then in effect a Registration Statement covering such proposed
disposition and such disposition is made in accordance with such
Registration Statement; or
(b) Such Holder shall have notified the Company of the proposed disposition and
shall have furnished the Company with a detailed statement of the
circumstances surrounding the proposed disposition, and if reasonably
requested by the Company, such Holder shall have furnished the Company with
an opinion of counsel, reasonably satisfactory to the Company, that such
disposition is exempt from registration under the Securities Act; provided
however, that it is agreed that the Company will not require opinions of
Holder's counsel for transactions made pursuant to Rule 144 except in
unusual circumstances.
SECTION 4.3 TRANSFERS TO COMPETITORS. A Holder may not Transfer any portion of
the Preferred Stock to any Competitor.
SECTION 4.4 LEGEND.
(a) Each certificate representing Preferred Stock shall (unless otherwise
permitted by the provisions of this Agreement) be stamped or otherwise
imprinted with a legend substantially similar to the following (in addition
to any legend required under applicable state securities laws):
THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED, OR ANY STATE SECURITIES LAWS. THEY MAY NOT BE SOLD OR OFFERED FOR
SALE, PLEDGED, HYPOTHECATED OR OTHERWISE TRANSFERRED IN THE ABSENCE OF AN
EFFECTIVE REGISTRATION STATEMENT AS TO THE SECURITIES UNDER SAID ACT AND ANY
APPLICABLE STATE SECURITIES LAW OR UNLESS THE COMPANY HAS RECEIVED AN OPINION OF
COUNSEL SATISFACTORY TO THE COMPANY THAT SUCH REGISTRATION IS NOT REQUIRED TO
EFFECTUATE SUCH TRANSACTION.
THE SALE, TRANSFER OR PLEDGE OF THIS CERTIFICATE IS SUBJECT TO THE TERMS AND
CONDITIONS OF A CERTAIN INVESTOR'S RIGHTS AGREEMENT BETWEEN THE COMPANY AND
CERTAIN HOLDERS OF ITS SECURITIES, AS THE SAME MAY BE AMENDED AND IN EFFECT FROM
TIME TO TIME. COPIES OF SUCH
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AGREEMENT MAY BE OBTAINED UPON WRITTEN REQUEST TO THE SECRETARY OF THE COMPANY.
THE SALE, TRANSFER OR PLEDGE OF THIS CERTIFICATE IS SUBJECT TO THE TERMS AND
CONDITIONS OF THE AMENDED AND RESTATED CERTIFICATE OF INCORPORATION OF THE
COMPANY, AS THE SAME MAY BE AMENDED AND IN EFFECT FROM TIME TO TIME. COPIES OF
SUCH CERTIFICATE MAY BE OBTAINED UPON WRITTEN REQUEST TO THE SECRETARY OF THE
COMPANY.
(b) The Company shall be obligated to reissue promptly unlegended certificates
at the request of any Holder if the Holder shall have obtained an opinion
of counsel at such Holder's expense (which counsel may be counsel to the
Company) reasonably acceptable to the Company to the effect that the
securities proposed to be disposed of may lawfully be so disposed of under
Rule 144(k) (or any successor thereto or substantially equivalent
exemption) without registration, qualification or legend.
SECTION 4.5 IMPROPER TRANSFER. Any attempt to Transfer any Preferred Stock
which is not in accordance with this Agreement shall be null and void, and the
Company shall not give any effect to such attempted Transfer in the records of
the Company.
ARTICLE V
MISCELLANEOUS
SECTION 5.1 DISPUTE RESOLUTION. Any action, dispute, claim or controversy of
any kind now existing or hereafter arising between the Company and a Holder
arising out of, pertaining to this Agreement or the transactions contemplated
hereby (a "Dispute") shall be resolved by binding arbitration in accordance with
the terms hereof. Any party may, by summary proceedings, bring an action in
court to compel arbitration of any Dispute. Any arbitration shall be
administered by the American Arbitration Association (the "AAA") in accordance
with the terms of this Section, the Commercial Arbitration Rules of the AAA,
and, to the maximum extent applicable, the Federal Arbitration Act. Judgment on
any award rendered by an arbitrator may be entered in any court having
jurisdiction. Any arbitration shall be conducted before a panel of three
arbitrators. Such panel shall consist of one person designated by the Company,
one designated by the Holder(s) and one designated by their designees. The
arbitrators designated by the parties are not required to be neutral. If a
party fails to designate an arbitrator within 10 calendar days after the filing
of the Dispute with the AAA, or the parties' arbitrators fail to designate a
third arbitrator within 30 calendar days after the later of their appointments,
such arbitrator shall be appointed by the AAA. An arbitration proceeding
hereunder shall be concluded within 180 calendar days of the filing of the
Dispute with the AAA. Arbitration proceedings shall be conducted in Kansas City,
Missouri. Arbitrators shall be empowered to award sanctions and to take such
other actions as they deem necessary, to the same extent a judge could impose
sanctions or take such other actions pursuant to the Federal Rules of Civil
Procedure and applicable law. No award by the arbitrators shall assess
consequential, punitive or exemplary damages but may assess costs and expenses
in a manner deemed equitable. The arbitrators shall make specific written
findings of fact and conclusions of law. The decision of the arbitrators shall
be final and binding on each party.
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SECTION 5.2 COMMUNICATIONS. All notices and other communications provided for
or permitted hereunder shall be made in writing by telecopy, courier service or
personal delivery:
(a) if to a Holder, at the most current address given by such Holder to the
Company in accordance with the provisions of this Section 5.2, which
address initially is, with respect to UtiliCorp, the address set forth in
the Securities Purchase Agreement, and
(b) if to the Company, initially at its address set forth in the Securities
Purchase Agreement and thereafter at such other address, notice of which is
given in accordance with the provisions of this Section 5.2.
All such notices and communications shall be deemed to have been received
at the time delivered by hand, if personally delivered; when receipt
acknowledged, if telecopied or sent via Internet electronic mail; and when
actually received, if sent by any other means.
SECTION 5.3 SUCCESSOR AND ASSIGNS. This Agreement shall inure to the benefit
of and be binding upon the successors and assigns of each of the parties,
including subsequent holders of Registrable Securities as set forth in Section
5.11.
SECTION 5.4 COUNTERPARTS. This Agreement may be executed in any number of
counterparts and by different parties hereto in separate counterparts, each of
which counterparts, when so executed and delivered, shall be deemed to be an
original and all of which counterparts, taken together, shall constitute but one
and the same Agreement.
SECTION 5.5 HEADINGS. The headings in this Agreement are for convenience of
reference only and shall not limit or otherwise affect the meaning hereof.
SECTION 5.6 GOVERNING LAW. The laws of the State of Missouri shall govern this
Agreement without regard to principles of conflict of laws.
SECTION 5.7 SEVERABILITY OF PROVISIONS. Any provision of this Agreement which
is prohibited or unenforceable in any jurisdiction shall, as to such
jurisdiction, be ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining provisions hereof or
affecting or impairing the validity or enforceability of such provision in any
other jurisdiction.
SECTION 5.8 ENTIRE AGREEMENT. This Agreement, the Strategic Alliance
Agreement, and the Securities Purchase Agreement are intended by the parties as
a final expression of their agreement and intended to be a complete and
exclusive statement of the agreement and understanding of the parties hereto in
respect of the subject matter contained herein. There are no restrictions,
promises, warranties or undertakings, other than those set forth or referred to
herein with respect to the rights granted by the Company set forth herein. This
Agreement, the Strategic Alliance Agreement, and the Securities Purchase
Agreement supersede all prior agreements and understandings between the parties
with respect to such subject matter.
SECTION 5.9 ATTORNEYS' FEES. In any action or proceeding brought to enforce
any provision of this Agreement or an arbitration award, the successful party
shall be entitled to
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recover reasonable attorneys' fees in addition to its costs and expenses and any
other available remedy.
SECTION 5.10 AMENDMENT. This Agreement may be amended only by means of a
written amendment signed by the Company and by a majority of the Holders.
SECTION 5.11 RIGHTS OF ASSIGNEE. Subject to the provisions of Sections 2.10,
3.5 and 4.4 hereof, the rights of an assignee under this Section 5.11 shall be
the same rights granted to the assigning Holder under this Agreement. In
connection with any such assignment, the term "Holder" as used herein shall,
where appropriate to assign the rights and obligations of the assigning Holder
hereunder to such assignee, be deemed to refer to the assignee.
SECTION 5.12 NO PRESUMPTION. In the event any claim is made by a party
relating to any conflict, omission, or ambiguity in this Agreement, no
presumption or burden of proof or persuasion shall be implied by virtue of the
fact that this Agreement was prepared by or at the request of a particular party
or its counsel.
SECTION 5.13 REFERENCES TO THIS AGREEMENT. References to numbered or lettered
articles, section, and subsections refer to articles, sections, and subsections,
respectively, of this Agreement unless otherwise expressly stated.
* * * *
THE REMAINDER OF THIS PAGE INTENTIONALLY BLANK
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IN WITNESS WHEREOF, the parties have executed this Agreement as of the date
first written above.
QUANTA SERVICES, INC.
By: /s/ Brad Eastman
----------------
Name: Brad Eastman
Title: Vice President, Secretary and General
Counsel
UTILICORP UNITED INC.
By: /s/ Robert K. Green
-------------------
Name: Robert K. Green
Title: President
SIGNATURE PAGE TO
INVESTOR'S RIGHTS AGREEMENT
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Exhibit 10.14
MANAGEMENT SERVICES AGREEMENT
This Management Services Agreement ("Agreement") is made and entered into
as of September 21, 1999, by and between Quanta Services, Inc., a Delaware
corporation ("Company") and UtiliCorp United Inc., a Delaware corporation
("UtiliCorp").
RECITALS
A. The Company desires to enter into this Agreement whereby UtiliCorp will
provide certain management advice and services to the Company.
B. UtiliCorp is willing to provide such advice and services to assist the
Company in achieving its business objectives on the terms and conditions set
forth herein.
AGREEMENT
The parties agree as follows:
Section 1. Management Services.
To the extent mutually agreed upon by the parties hereto, UtiliCorp will
provide the following advice and services as reasonably requested from time to
time by the Company's senior management and Board of Directors:
1. Advice regarding corporate strategic planning;
2. Advice regarding the restructuring of the U.S. electric and gas
industries;
3. Advice regarding the restructuring and privatization of the global
utility industry;
4. Advice regarding development, evaluation and marketing of the
Company's products, services and capabilities (particularly the
development of gas construction skills and capabilities);
5. Identification of and assistance in pursuing opportunities to realize
benefits through Aquila Energy Corporation's and UtiliCorp Energy
Management's current and future relationships in the global utility
industry. This would include opportunities to cross-sell products and
capabilities, "lead" generation, and mutually beneficial shared
services;
6. Identification and evaluation of potential U.S. acquisition candidates
for the Company;
7. Identification and evaluation of business development opportunities
outside the United States (particularly, Canada, Australia, New
Zealand, and Western
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Europe), including strategic, financial and risk analysis in the
acquisition of other business by the Company;
8. Identification of potential opportunities for the Company to realize
additional business advantages by partnering with UtiliCorp's existing
foreign owned or controlled utility companies' internal construction
divisions;
9. Identification, evaluation and implementation of opportunities to
provide incremental value to the Company in key synergy areas with
UtiliCorp. These would include (but are not limited to) joint
purchasing of trucks, tools and equipment, shared equipment and
resources, safety and other training, rubber goods and other testing,
shared maintenance of major work equipment, shared systems such as
work management and resource dispatch, and pole testing/treatment
techniques;
10. Development of plans for the Company to share in UtiliCorp's growth
activities in the areas of utility acquisitions, power plant and
related infrastructure development, and telecommunication business
development;
11. Other ancillary services relating to those contained in paragraphs 1
through 10 above; and
12. Such other services as the Company's Board of Directors may reasonably
request from time to time.
UtiliCorp will identify and dedicate a team comprising members of
UtiliCorp's and its subsidiaries' management to implement the above services.
Section 2. Quarterly Presentation.
UtiliCorp will make a quarterly presentation to the Company's senior
management regarding the services being provided under this Agreement, and
discussing activities to be undertaken and services to be provided in the
future.
Section 3. Fee for Management Services.
In consideration of the advice and services rendered by UtiliCorp to the
Company pursuant to Section 1 hereof, the Company shall pay to UtiliCorp on a
quarterly basis in arrears a fee of $2,325,000. UtiliCorp shall submit to the
Company a quarterly invoice for the services provided to the Company and the fee
due to UtiliCorp.
Section 4. Mutual Access and Cooperation.
The parties hereto desire and agree to use their respective reasonable
efforts to provide to the other party reasonable access from time-to-time to
their respective representatives: (i) to discuss service capabilities, goals and
informational requirements as outlined in Section 1 of this Agreement; (ii) to
present for consideration by the other party proposals and opportunities for the
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provision of services pursuant hereto, (iii) for consultation with the other
party regarding acquisition and investment opportunities within the scope of
this Agreement or which would have a material effect upon the provision of
services contemplated hereby, (iv) to discuss matters in which such party has,
or may have, general expertise (which areas of expertise may include, without
limitation, commodity trading, origination, engineering and the financial
analysis, modeling and structuring of proposed transactions) and (v) otherwise
to explore and evaluate ways in which the Company and UtiliCorp might work
together to enhance the Company's business.
In connection with the foregoing, the parties hereto shall, as appropriate,
use reasonable efforts (i) to arrange meetings from time-to-time between their
respective representatives to discuss such matters, (ii) to provide to the other
party from time-to-time reasonable access to information pertinent to the
objectives of this Agreement and (iii) to otherwise enhance cooperation and
communication between UtiliCorp and its affiliates on the one hand and the
Company on the other hand to facilitate access to information and personnel,
subject, however, to limitations imposed by applicable law and existing
confidentiality obligations as well as internal policies regarding the
maintenance of the confidentiality of proprietary data and other commercially
sensitive information.
Section 5. Term and Termination.
This Agreement shall have a term of six (6) years, which can be extended at
the mutual agreement of the parties. Each party hereto may during the existence
of the arrangements between the Company and UtiliCorp engage in or have business
relations with competitors of the other parties and/or their affiliates. The
Company shall have the right to terminate this Agreement at any time if in the
reasonable judgment of the Company's Board of Directors changes in the nature of
the relationship between the Company and UtiliCorp makes effective provision of
the services to be provided hereunder unlikely, provided that the Company
consults with UtiliCorp at least sixty (60) days prior to such termination
regarding the reasons therefor and affords UtiliCorp the opportunity to consult
with and take such actions as are reasonably necessary to remedy the Company's
Board of Director's reason(s) for terminating this Agreement. If upon the
conclusion of the sixty (60) day period referenced in the preceding sentence the
parties are in good faith unable to agree to continue this Agreement, then this
Agreement shall be terminated and UtiliCorp shall promptly refund to the Company
any amounts paid to it pursuant to Section 3 of this Agreement for management
services rendered during such sixty (60) day period.
Section 6. Protection of Employees.
From and after the date hereof until the date one (1) year after the term
of this Agreement has expired, each party hereto shall not, and shall cause its
respective wholly owned subsidiaries not to, solicit to employ any of the
employees of the other party or its affiliates with whom the soliciting party or
its affiliates had contact in connection with the transactions contemplated
hereby; provided, however, that any such solicitation shall not be a breach of
this Section if (i) the personnel who performed such solicitation have no
knowledge of this Agreement or the transactions contemplated hereby and (ii)
none of the soliciting party's (or any of its affiliates') personnel who have
knowledge of this Agreement or the transactions contemplated hereby have
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actual knowledge of any such solicitation. The term "solicit to employ" shall
not be deemed to include general solicitations of employment not specifically
directed towards employees of a party hereto or its affiliates.
Section 7. Confidentiality.
In connection with the matters described in this Agreement, each party may
provide to the other certain information that is confidential, proprietary or
otherwise not generally available to the public. As a condition to furnishing
such information the parties agree as follows:
(a) Nondisclosure of Confidential Information. From and after the date
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hereof, until the date two years after the disclosure of the
particular Confidential Information (as defined below), such
Confidential Information shall be used solely in connection with the
matters contemplated by this Agreement, and the recipient of the
Confidential Information shall not disclose the Confidential
Information to any person other than those of its directors, officers,
employees, lenders, counsel, representatives and Affiliates, if any
(those such persons who actually receive any confidential information
hereunder being collectively, the "Representatives") who need to know
the Confidential Information. It is understood that (i) the
Representatives shall be informed of the confidential nature of the
Confidential Information and the requirement that it not be used other
than for the purposes described herein and (ii) in any event, the
party receiving Confidential Information shall be responsible for any
breach of this Section by any of its Representatives. Each party may
also disclose the Confidential Information in order to comply with any
applicable law, order, regulation or ruling or stock exchange rule.
The term "person" as used in this Section 7 shall be broadly
interpreted to include, without limitation, any corporation, company,
partnership, individual or other entity.
(b) Definition of "Confidential Information". As used herein,
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"Confidential Information" means all information that is furnished
under this Agreement by a party hereto, and which is confidential,
proprietary or otherwise not generally available to the public.
Notwithstanding the foregoing, the following will not constitute
Confidential Information for purposes of this Section: (i) information
that is or becomes generally available to the public other than as a
result of a breach of this Section by the party receiving such
information or its Representatives; (ii) information that, prior to
being furnished pursuant hereto, was already in the files of the party
receiving such information or its Representatives from another source
not known to be subject to any prohibition against transmitting the
information; or (iii) information that becomes available to the party
receiving such information or its Representatives from another source
not known to be subject to any prohibition against transmitting the
information.
(c) Return of Information. The written Confidential Information, except
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for that portion of the Confidential Information that may be found in
analyses, compilations, studies or other documents prepared by or for
the party receiving the Confidential Information, will be returned
promptly upon any request made
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during the two year period referred to in Section 7(a) above, and no
copies shall be retained by the party receiving the Confidential
Information or its Representatives. That portion of the Confidential
Information that may be found in analyses, compilations, studies or
other documents prepared by or for the party receiving the
Confidential Information, oral Confidential Information and written
Confidential Information not so requested or returned will be held by
the party receiving the Confidential Information and kept subject to
the terms of this Section, or destroyed.
(d) Remedies. Both parties acknowledge that remedies at law may be
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inadequate to protect the disclosing party against any actual or
threatened breach of this Agreement by the recipient, and without
prejudice to any other rights and remedies otherwise available to the
disclosing party, agree to the granting of injunctive relief in favor
of the disclosing party without proof of actual damages. If the
disclosing party is required to post a bond to obtain injunctive
relief, the parties agree that such bond shall not exceed One Thousand
Dollars ($1,000).
Section 8. No Authority to Bind; No Fiduciary Relationship.
Neither party hereto shall have the authority to bind or to purport to bind
the other party hereto. The parties agree that no employment, agency, joint
venture, partnership, advisory or fiduciary relationship shall be deemed to
exist or arise between them with respect to the transactions contemplated by
this Agreement; any such relationship shall exist only as expressly stated in
any future definitive agreements.
Section 9. Publicity.
Any press release or other public announcement regarding or relating to the
existence of this Agreement and its contents shall be mutually agreed upon by
the parties.
Section 10. Miscellaneous.
(a) Dispute Resolution. Any action, dispute, claim or controversy of any
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kind now existing or hereafter arising between the Company and
UtiliCorp arising out of, pertaining to this Agreement or the
transactions contemplated hereby ("Dispute") shall be resolved by
binding arbitration in accordance with the terms hereof. Any party
may, by summary proceedings, bring an action in court to compel
arbitration of any Dispute. Any arbitration shall be administered by
the American Arbitration Association ("AAA") in accordance with the
terms of this Section 10, the Commercial Arbitration Rules of the AAA,
and, to the maximum extent applicable, the Federal Arbitration Act.
Judgment on any award rendered by an arbitrator may be entered in any
court having jurisdiction. Any arbitration shall be conducted before
a panel of three arbitrators. Such panel shall consist of one person
designated by the Company, one designated by UtiliCorp and one
designated by their designees. The arbitrators designated by the
parties are not required to be neutral. If a party fails to designate
an arbitrator within 10 calendar days after the filing of the Dispute
with the AAA, or the parties' arbitrators fail to
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designate a third arbitrator within 30 calendar days after the later
of their appointments, such arbitrator shall be appointed by the AAA.
An arbitration proceeding hereunder shall be concluded within 180
calendar days of the filing of the Dispute with the AAA. Arbitration
proceedings shall be conducted in Kansas City, Missouri. Arbitrators
shall be empowered to award sanctions and to take such other actions
as they deem necessary, to the same extent a judge could impose
sanctions or take such other actions pursuant to the Federal Rules of
Civil Procedure and applicable law. No award by the arbitrators shall
assess consequential, punitive or exemplary damages but may assess
costs and expenses in a manner deemed equitable. The arbitrators shall
make specific written findings of fact and conclusions of law. The
decision of the arbitrators shall be final and binding on each party.
(b) Communications. All notices and other communications provided for or
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permitted hereunder shall be made in writing by telecopy, courier
service or personal delivery:
i. if to UtiliCorp, initially at the address set forth on the
signature page of this Agreement, and
ii. if to the Company, initially at the address set forth on the
signature page of this Agreement,
and thereafter in each case at such other address, notice of which is
given in accordance with the provisions of this Section 10.
All such notices and communications shall be deemed to have been received
at the time delivered by hand, if personally delivered; when receipt
acknowledged, if telecopied or sent via Internet electronic mail; and when
actually received, if sent by any other means.
(c) Counterparts. This Agreement may be executed in any number of
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counterparts and by the parties hereto in separate counterparts, each
of which counterparts, when so executed and delivered, shall be deemed
to be an original and all of which counterparts, taken together, shall
constitute but one and the same Agreement.
(d) Headings. The headings in this Agreement are for convenience of
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reference only and shall not limit or otherwise affect the meaning
hereof.
(e) Governing Law. The laws of the State of Missouri shall govern this
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Agreement without regard to principles of conflict of laws.
(f) Severability of Provisions. Any provision of this Agreement which is
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prohibited or unenforceable in any jurisdiction shall, as to such
jurisdiction, be ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining provisions hereof
or affecting or impairing the validity or enforceability of such
provision in any other jurisdiction, and the parties shall
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thereafter adopt such other, enforceable provisions as are necessary
to ensure that the parties realize the benefit of their bargain that
would otherwise be adversely affected by any such prohibition or
unenforceability.
(g) Entire Agreement. This Agreement is intended by the parties as a
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final expression of their agreement and intended to be a complete and
exclusive statement of the agreement and understanding of the parties
hereto in respect of the subject matter contained herein. There are no
restrictions, promises, warranties or undertakings, other than those
set forth or referred to herein. This Agreement supersedes all prior
agreements and understandings between the parties with respect to such
subject matter, except for provisions in other agreements between the
parties dealing with confidentiality and the protection of employees,
which provisions shall continue in full force and effect independently
of this Agreement.
(h) Attorney's Fees. In any action or proceeding brought to enforce any
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provision of this Agreement or an arbitration award, the successful
party shall be entitled to recover reasonable attorneys' fees in
addition to its costs and expenses and any other available remedy.
(i) Amendment. This Agreement may be amended only by means of a written
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amendment signed by the Company and UtiliCorp.
(j) No Presumption. In the event any claim is made by a party relating to
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any conflict, omission, or ambiguity in this Agreement, no presumption
or burden of proof or persuasion shall be implied by virtue of the
fact that this Agreement was prepared by or at the request of a
particular party or its counsel.
(k) References to this Agreement. References to numbered or lettered
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articles, section, and subsections refer to articles, sections, and
subsections, respectively, of this Agreement unless otherwise
expressly stated.
SIGNATURE PAGE FOLLOWS
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IN WITNESS WHEREOF, the parties have executed this Agreement as of the date
first written above.
QUANTA SERVICES, INC.
1360 Post Oak Blvd., Suite 2100
Houston, Texas 77056
/s/ BRAD EASTMAN
By: ___________________________________________
Name: Brad Eastman
Title: Vice President and General Counsel
UTILICORP UNITED INC.
Twenty West Ninth Street
Kansas City, Missouri 64105
/s/ ROBERT K. GREEN
By: ___________________________________________
Name: Robert K. Green
Title: President
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Exhibit 10.15
Quanta Services, Inc.
1360 Post Oak Blvd., Suite 2100
Houston, Texas 77056
September 21, 1999
UtiliCorp United Inc.
Twenty West Ninth Street
Kansas City, Missouri 64105
Gentlemen:
Notwithstanding anything to the contrary contained in that certain
Management Services Agreement ("Agreement") dated as of September 21, 1999 by
and between Quanta Services, Inc. ("Company") and UtiliCorp United Inc.
("UtiliCorp"), to the extent that the Company is in default under the Credit
Agreement or the Notes (as such terms are hereinafter defined), or to the extent
that payment of any portion of the management services fee provided for in the
Agreement ("Management Services Fee") would cause the Company to be in violation
of the covenants (giving pro forma effect to the payment of such fee) set forth
in (i) the Third Amended and Restated Secured Credit Agreement dated as of June
14, 1999 among the Company and the several financial institutions named therein
as lenders ("Credit Agreement"), or (ii) the Convertible Subordinated Notes
issued by the Company to Enron Capital & Trade Resources Corp. and Joint Energy
Development Investments II Limited Partnership, respectively, and the Securities
Purchase Agreement dated as of September 29, 1998 related thereto (collectively,
the "Notes"), or as the Credit Agreement or the Notes may be amended, modified,
supplemented or increased from time to time and including any other agreements
executed in connection with any refinancing of the indebtedness incurred
thereunder, then the Company shall pay only such portion of the Management
Services Fee as will allow it to remain in compliance with the covenants of the
Credit Agreement and the Notes. In that event, any unpaid Management Services
Fee balance shall be added to the next regularly scheduled payment and shall be
due and payable therewith (but subject to the same limitations set forth in the
preceding sentence with respect to compliance with the Credit Agreement and the
Notes).
[Signature Page Follows]
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[Signature Page]
Very truly yours,
Quanta Services, Inc.
/s/ BRAD EASTMAN
By: _____________________________
Brad Eastman
Vice President and General Counsel
Accepted and Agreed:
UtiliCorp United Inc.
/s/ ROBERT K. GREEN
By: ___________________________
Robert K. Green
President
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Exhibit 10.16
STRATEGIC ALLIANCE AGREEMENT
This Strategic Alliance Agreement ("Agreement") is made and entered into as
of September 21, 1999, by and between Quanta Services, Inc., a Delaware
corporation ("Company") and UtiliCorp United Inc., a Delaware corporation
("UtiliCorp").
RECITAL
This Agreement is made pursuant to the Securities Purchase Agreement, dated
as of September 21, 1999, by and between the Company and UtiliCorp ("Securities
Purchase Agreement"). In order to provide mutual inducements to enter into the
Securities Purchase Agreement in addition to those expressly stated in the
Securities Purchase Agreement, the Company has agreed to use reasonable
commercial efforts to provide certain services to UtiliCorp and UtiliCorp has
agreed to use reasonable commercial efforts to contract with the Company for
such services on the terms and conditions set forth in this Agreement. Pursuant
to the Securities Purchase Agreement, UtiliCorp will acquire shares of the
Company's Convertible Preferred Stock ("Preferred Stock") which will entitle
UtiliCorp to convert the Preferred Stock into shares of Common Stock, par value
$0.00001 per share, of the Company. The execution and delivery of this
Agreement shall occur contemporaneously with the Closing (as defined in the
Securities Purchase Agreement). Capitalized terms used in this Agreement and
not otherwise defined herein shall have the meanings ascribed thereto in the
Securities Purchase Agreement.
AGREEMENT
The parties agree as follows:
Section 1. Services to be Performed by the Company.
UtiliCorp will use the Company, subject to the Company's ability to perform
services in designated locations, as a preferred contractor in outsourced
transmission and distribution infrastructure construction and maintenance and
natural gas distribution construction and maintenance in all areas serviced by
UtiliCorp, provided that the Company provides such services at a competitive
cost that is demonstrably equal to or better than current market rates for such
services when the quality of the Company's services is considered. UtiliCorp
and the Company will also discuss and explore the Company's potential purchase
of other electric transmission and distribution and natural gas contractors
owned by or affiliated with UtiliCorp and will negotiate in good faith with
respect to proposed terms of acquisition in the event that UtiliCorp determines
to dispose of any such contractors owned by or affiliated with UtiliCorp. In
furtherance of these objectives, the parties agree that UtiliCorp shall
regularly provide the Company the following to the extent pertinent to the
provision of services pursuant to this Agreement:
(a) Evaluation of "value engineering" proposals;
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(b) Recommendations for improvement and cost reduction between UtiliCorp,
its Affiliates and the Company; and
(c) Evaluations by UtiliCorp and its Affiliates of "value added" proposals
submitted by the Company and timely responses to inquiries or requests
for clarification or pertinent further documentation by the Company
related to any of the foregoing matters.
UtiliCorp and the Company acknowledge their mutual intent to facilitate
communications between them in furtherance of the design, construction,
maintenance, and timely and cost-effective completion of projects aimed at
ensuring the high quality of the transmission and distribution systems of
UtiliCorp and its Affiliates. In addition, UtiliCorp and the Company
acknowledge the need to meet from time-to-time to evaluate each party's
performance with respect to the objectives provided for in this Agreement.
Section 2. Mutual Access and Cooperation.
The parties hereto desire and agree to use their respective reasonable
efforts to provide to the other party reasonable access from time-to-time to
their respective representatives: (i) to discuss service capabilities, goals and
informational requirements as outlined in Section 1 of this Agreement; (ii) to
present for consideration by the other party proposals and opportunities for the
provision of services pursuant hereto, (iii) for consultation with the other
party regarding acquisition and investment opportunities within the scope of
this Agreement or which would have a material effect upon the provision of
services contemplated hereby, (iv) to discuss matters in which such party has,
or may have, general expertise (which areas of expertise may include, without
limitation, commodity trading, origination, engineering and the financial
analysis, modeling and structuring of proposed transactions) and (v) otherwise
to explore and evaluate ways in which the Company and UtiliCorp might work
together to enhance their respective businesses.
In connection with the foregoing, the parties hereto shall, as appropriate,
use reasonable efforts (i) to arrange meetings from time-to-time between their
respective representatives to discuss such matters, (ii) to provide to the other
party from time-to-time reasonable access to information pertinent to the
objectives of this Agreement and (iii) to otherwise enhance cooperation and
communication between UtiliCorp and its Affiliates on the one hand and the
Company on the other hand to facilitate access to information and personnel,
subject, however, to limitations imposed by applicable law and existing
confidentiality obligations as well as internal policies regarding the
maintenance of the confidentiality of proprietary data and other commercially
sensitive information.
It is the intent of the parties to work cooperatively in connection with
the foregoing towards the goal of mutually beneficial discussions, relations and
transactions.
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Section 3. Term.
This Agreement shall have a term of six (6) years, which can be extended at
the mutual agreement of the parties. Each party hereto may during the existence
of the arrangements between the Company and UtiliCorp engage in or have business
relations with competitors of the other parties and/or their Affiliates.
Section 4. Protection of Employees.
From and after the date hereof until the date one (1) year after the term
of this Agreement has expired, each party hereto shall not, and shall cause its
respective wholly owned subsidiaries not to, solicit to employ any of the
employees of the other party or its Affiliates with whom the soliciting party or
its Affiliates had contact in connection with the transactions contemplated
hereby; provided, however, that any such solicitation shall not be a breach of
this Section if (i) the personnel who performed such solicitation have no
knowledge of this Agreement or the transactions contemplated hereby and (ii)
none of the soliciting party's (or any of its Affiliates') personnel who have
knowledge of this Agreement or the transactions contemplated hereby have actual
knowledge of any such solicitation. The term "solicit to employ" shall not be
deemed to include general solicitations of employment not specifically directed
towards employees of a party hereto or its Affiliates.
Section 5. Confidentiality.
In connection with the matters described in this Agreement, each party may
provide to the other certain information that is confidential, proprietary or
otherwise not generally available to the public. As a condition to furnishing
such information the parties agree as follows:
(a) Nondisclosure of Confidential Information. From and after the date
-----------------------------------------
hereof, until the date two years after the disclosure of the
particular Confidential Information (as defined below), such
Confidential Information shall be used solely in connection with the
matters contemplated by this Agreement, and the recipient of the
Confidential Information shall not disclose the Confidential
Information to any person other than those of its directors, officers,
employees, lenders, counsel, representatives and Affiliates, if any
(those such persons who actually receive any confidential information
hereunder being collectively, the "Representatives") who need to know
the Confidential Information. It is understood that (i) the
Representatives shall be informed of the confidential nature of the
Confidential Information and the requirement that it not be used other
than for the purposes described herein and (ii) in any event, the
party receiving Confidential Information shall be responsible for any
breach of this Section by any of its Representatives. Each party may
also disclose the Confidential Information in order to comply with any
applicable law, order, regulation or ruling or stock exchange rule.
The term "person" as used in this Section 5 shall be broadly
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interpreted to include, without limitation, any corporation, company,
partnership, individual or other entity.
(b) Definition of "Confidential Information". As used herein,
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"Confidential Information" means all information that is furnished
under this Agreement by a party hereto, and which is confidential,
proprietary or otherwise not generally available to the public.
Notwithstanding the foregoing, the following will not constitute
Confidential Information for purposes of this Section: (i) information
that is or becomes generally available to the public other than as a
result of a breach of this Section by the party receiving such
information or its Representatives; (ii) information that, prior to
being furnished pursuant hereto, was already in the files of the party
receiving such information or its Representatives from another source
not known to be subject to any prohibition against transmitting the
information; or (iii) information that becomes available to the party
receiving such information or its Representatives from another source
not known to be subject to any prohibition against transmitting the
information.
(c) Return of Information. The written Confidential Information, except
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for that portion of the Confidential Information that may be found in
analyses, compilations, studies or other documents prepared by or for
the party receiving the Confidential Information, will be returned
promptly upon any request made during the two year period referred to
in Section 5(a) above, and no copies shall be retained by the party
receiving the Confidential Information or its Representatives. That
portion of the Confidential Information that may be found in analyses,
compilations, studies or other documents prepared by or for the party
receiving the Confidential Information, oral Confidential Information
and written Confidential Information not so requested or returned will
be held by the party receiving the Confidential Information and kept
subject to the terms of this Section, or destroyed.
(d) Remedies. Both parties acknowledge that remedies at law may be
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inadequate to protect the disclosing party against any actual or
threatened breach of this Agreement by the recipient, and without
prejudice to any other rights and remedies otherwise available to the
disclosing party, agree to the granting of injunctive relief in favor
of the disclosing party without proof of actual damages. If the
disclosing party is required to post a bond to obtain injunctive
relief, the parties agree that such bond shall not exceed One Thousand
Dollars ($1,000).
Section 6. No Authority to Bind; No Fiduciary Relationship.
Neither party hereto shall have the authority to bind or to purport to bind
the other party hereto. The parties agree that no employment, agency, joint
venture, partnership, advisory or fiduciary relationship shall be deemed to
exist or arise between them with respect to the transactions contemplated by
this Agreement; any such relationship shall exist only as expressly stated in
any future definitive agreements.
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Section 7. Publicity.
Any press release or other public announcement regarding or relating to the
existence of this Agreement and its contents shall be mutually agreed upon by
the parties.
Section 8. Miscellaneous.
(a) Dispute Resolution. Any action, dispute, claim or controversy of any
-------------------
kind now existing or hereafter arising between the Company and
UtiliCorp arising out of, pertaining to this Agreement or the
transactions contemplated hereby ("Dispute") shall be resolved by
binding arbitration in accordance with the terms hereof. Any party
may, by summary proceedings, bring an action in court to compel
arbitration of any Dispute. Any arbitration shall be administered by
the American Arbitration Association ("AAA") in accordance with the
terms of this Section 8, the Commercial Arbitration Rules of the AAA,
and, to the maximum extent applicable, the Federal Arbitration Act.
Judgment on any award rendered by an arbitrator may be entered in any
court having jurisdiction. Any arbitration shall be conducted before
a panel of three arbitrators. Such panel shall consist of one person
designated by the Company, one designated by UtiliCorp and one
designated by their designees. The arbitrators designated by the
parties are not required to be neutral. If a party fails to designate
an arbitrator within 10 calendar days after the filing of the Dispute
with the AAA, or the parties' arbitrators fail to designate a third
arbitrator within 30 calendar days after the later of their
appointments, such arbitrator shall be appointed by the AAA. An
arbitration proceeding hereunder shall be concluded within 180
calendar days of the filing of the Dispute with the AAA. Arbitration
proceedings shall be conducted in Kansas City, Missouri. Arbitrators
shall be empowered to award sanctions and to take such other actions
as they deem necessary, to the same extent a judge could impose
sanctions or take such other actions pursuant to the Federal Rules of
Civil Procedure and applicable law. No award by the arbitrators shall
assess consequential, punitive or exemplary damages but may assess
costs and expenses in a manner deemed equitable. The arbitrators
shall make specific written findings of fact and conclusions of law.
The decision of the arbitrators shall be final and binding on each
party.
(b) Communications. All notices and other communications provided for or
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permitted hereunder shall be made in writing by telecopy, courier
service or personal delivery:
i. if to UtiliCorp, initially at the address set forth in the
Securities Purchase Agreement, and
ii. if to the Company, initially at its address set forth in the
Securities Purchase Agreement,
5
<PAGE>
and thereafter in each case at such other address, notice of which is
given in accordance with the provisions of this Section 8.
All such notices and communications shall be deemed to have been received
at the time delivered by hand, if personally delivered; when receipt
acknowledged, if telecopied or sent via Internet electronic mail; and when
actually received, if sent by any other means.
(c) Counterparts. This Agreement may be executed in any number of
-------------
counterparts and by the parties hereto in separate counterparts, each
of which counterparts, when so executed and delivered, shall be deemed
to be an original and all of which counterparts, taken together, shall
constitute but one and the same Agreement.
(d) Headings. The headings in this Agreement are for convenience of
---------
reference only and shall not limit or otherwise affect the meaning
hereof.
(e) Governing Law. The laws of the State of Missouri shall govern this
--------------
Agreement without regard to principles of conflict of laws.
(f) Severability of Provisions. Any provision of this Agreement which is
---------------------------
prohibited or unenforceable in any jurisdiction shall, as to such
jurisdiction, be ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining provisions hereof
or affecting or impairing the validity or enforceability of such
provision in any other jurisdiction.
(g) Entire Agreement. This Agreement is intended by the parties as a
-----------------
final expression of their agreement and intended to be a complete and
exclusive statement of the agreement and understanding of the parties
hereto in respect of the subject matter contained herein. There are
no restrictions, promises, warranties or undertakings, other than
those set forth or referred to herein. This Agreement supersedes all
prior agreements and understandings between the parties with respect
to such subject matter, except for provisions in other agreements
between the parties dealing with confidentiality and the protection of
employees, which provisions shall continue in full force and effect
independently of this Agreement.
(h) Attorney's Fees. In any action or proceeding brought to enforce any
----------------
provision of this Agreement or an arbitration award, the successful
party shall be entitled to recover reasonable attorneys' fees in
addition to its costs and expenses and any other available remedy.
(i) Amendment. This Agreement may be amended only by means of a written
----------
amendment signed by the Company and UtiliCorp.
(j) No Presumption. In the event any claim is made by a party relating to
---------------
any conflict, omission, or ambiguity in this Agreement, no presumption
or burden of
6
<PAGE>
proof or persuasion shall be implied by virtue of the fact that this
Agreement was prepared by or at the request of a particular party or
its counsel.
(k) References to this Agreement. References to numbered or lettered
-----------------------------
articles, section, and subsections refer to articles, sections, and
subsections, respectively, of this Agreement unless otherwise
expressly stated.
SIGNATURE PAGE FOLLOWS
7
<PAGE>
IN WITNESS WHEREOF, the parties have executed this Agreement as of the date
first written above.
QUANTA SERVICES, INC.
/s/ BRAD EASTMAN
By:__________________________________________
Name: Brad Eastman
Title: Vice President and General Counsel
UTILICORP UNITED INC.
/s/ ROBERT K. GREEN
By:__________________________________________
Name: Robert K. Green
Title: President
8
<PAGE>
EXHIBIT 10.17
STOCKHOLDER'S VOTING AGREEMENT
THIS STOCKHOLDER'S VOTING AGREEMENT ("Agreement") is made as of this 21st
day of September 1999, by and among UtiliCorp United Inc., a Delaware
corporation ("UtiliCorp"), Quanta Services, Inc., a Delaware corporation
("Quanta"), and the undersigned stockholder of Quanta (the "Stockholder").
RECITALS
A. The Stockholder owns certain outstanding shares of the capital stock of
Quanta.
B. UtiliCorp is purchasing, concurrently herewith pursuant to that certain
Securities Purchase Agreement of even date herewith (the "Purchase Agreement"),
shares of Quanta's Series A convertible preferred stock (the "Purchased
Shares").
C. The Stockholder and UtiliCorp wish to ensure that UtiliCorp is able to hold
and exit its investment in a tax-efficient manner.
D. Capitalized terms used herein but not otherwise defined herein shall have
the meanings ascribed to them in the Purchase Agreement.
AGREEMENT
In consideration of the benefits to be received by the Stockholder from
UtiliCorp's investment in the Purchased Shares, the consummation of the sale and
purchase of the Purchased Shares, and for other valuable consideration, the
sufficiency and receipt of which is hereby acknowledged, the parties hereto
agree as follows:
1. Voting of Shares. At any and all meetings of stockholders (or in any written
consent action of stockholders) of Quanta, called or held (or submitted) for the
purpose of voting to approve any of the following proposals, the Stockholder
shall vote or cause to be voted all shares of Quanta's Capital Stock at any time
owned by him or over which he has voting control ("Shares"), and otherwise use
his best efforts while he owns or has voting control over such Shares, so as to
approve:
(a) any proposal recommended by the Quanta Board of Directors for the purpose
of enabling UtiliCorp to exit its investment in the Capital Stock of Quanta
in the most tax efficient manner (as determined by UtiliCorp in the
reasonable exercise of its discretion), including, but not limited to, a
redemption or a series of redemptions at fair market price or a
recapitalization of UtiliCorp's interest in Quanta and its operations on a
pretax basis;
(b) any proposal recommended by the Quanta Board of Directors for the purpose
of enabling UtiliCorp to hold shares of Common Stock acquired in open
market or privately negotiated transactions in the most tax efficient
manner (as determined by UtiliCorp in the reasonable exercise of its
discretion), including but not limited to, the grant of a right to
<PAGE>
convert or exchange such shares of Common Stock into or for a new series of
preferred stock or a different class of common stock, in each case, having
attributes similar to the Purchased Shares; and
(c) any ancillary actions that are necessary or appropriate to effectuate and
implement the foregoing proposals in paragraphs (a) and (b) of this
Section 1.
2. Binding Effect. This Agreement shall be binding upon the Stockholder and
his respective heirs, executors, administrators, legal representatives, and
successors.
3. Term and Termination. This Agreement will commence on the date first above
written and terminate automatically at any time that UtiliCorp's Fully Diluted
Ownership Ratio (as defined in Quanta's Certificate of Incorporation, as
amended) is less than 5%.
4. No Revocation. The voting agreements contained herein are coupled with an
interest and may not be revoked, except by written consent of UtiliCorp.
5. Deposit of Agreement. A counterpart of this Agreement will forthwith be
deposited with Quanta at its Secretary's office.
6. General.
(a) Severability. The provisions of this Agreement are severable, so that the
invalidity or unenforceability of any provision of this Agreement shall not
affect the validity or enforceability of any other term or provision of
this Agreement, which shall remain in full force and effect.
(b) Specific Performance. In addition to any and all other remedies that may
be available at law in the event of any breach of this Agreement, UtiliCorp will
be entitled to specific performance of the agreements and obligations of Quanta
and the Stockholder hereunder and to such other injunctive or other equitable
relief as may be granted by a court of competent jurisdiction.
(c) Governing Law. This Agreement shall be governed by, and construed and
enforced in accordance with, the laws of the State of Missouri.
(d) Notices. Any and all notices required to be made under this Agreement
shall be in writing, signed by the party giving such notice and will be
delivered personally, or sent by registered or certified mail, return
receipt requested, telecopy, or air courier guaranteeing overnight delivery
to UtiliCorp, Quanta and the Stockholder at their respective addresses as
follows:
If to UtiliCorp:
UtiliCorp United Inc.
20 West Ninth Street
Kansas City, Missouri 64105
Attention: Robert K. Green, President
Telecopier: (816) 467-3595
E-mail: [email protected]
2
<PAGE>
If to the Company:
Quanta Services, Inc.
1360 Post Oak Boulevard, Suite 2100
Houston, Texas 77056
Attention: Vice President and General Counsel
Telecopier: (713) 629-7676
E-mail: [email protected]
If to the Stockholder:
(See address shown on the signature page).
(e) Complete Agreement; Amendments. This Agreement constitutes the
full and complete agreement of the parties hereto with respect to the subject
matter hereof. No amendment, modification or termination of any provision of
this Agreement shall be valid unless in writing and signed by the parties
hereto.
(f) Pronouns. Whenever the context may require, any pronouns used in
this Agreement shall include the corresponding masculine, feminine or neuter
forms, and the singular form of nouns and pronouns shall include the plural, and
vice-versa.
(g) Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall constitute one Agreement binding on all the
parties hereto.
(h) Captions. Captions of sections have been added only for
convenience and shall not be deemed to be a part of this Agreement.
THE REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK.
3
<PAGE>
IN WITNESS WHEREOF, this Agreement has been executed by the parties hereto
as of the date first above written.
UILICORP UNITED INC.,
a Delaware corporation
By _______________________________
Name: Robert K. Green
Title: President
QUANTA SERVICES, INC.,
a Delaware corporation
By _______________________________
Name: ____________________________
Title: ____________________________
STOCKHOLDER
___________________________________
Name: ____________________________
Address: ____________________________
____________________________
Fax: ____________________________
E-mail: ____________________________
SIGNATURE PAGE TO
STOCKHOLDER'S VOTING AGREEMENT
4
<PAGE>
Exhibit 10.18
FIRST AMENDMENT TO
THIRD AMENDED AND RESTATED SECURED CREDIT AGREEMENT
THIS FIRST AMENDMENT TO THIRD AMENDED AND RESTATED SECURED CREDIT AGREEMENT
(this "Amendment") is entered into as of September 21, 1999, among Quanta
Services, Inc., a Delaware corporation ("Borrower"), the lenders from time to
time parties thereto (each a "Lender" and collectively "Lenders"), and BANK OF
AMERICA, N.A., f/k/a NationsBank, N.A., as administrative agent for the Lenders
(in such capacity, the "Agent"). Capitalized terms used but not defined in this
Amendment have the meaning given such terms in the Credit Agreement (defined
below).
RECITALS
--------
A. The Borrower and the Lenders entered into that certain Third Amended
and Restated Secured Credit Agreement dated as of June 14, 1999 (the "Credit
Agreement").
B. The Borrower proposes to issue to Utilicorp United Inc. ("Utilicorp")
perpetual preferred stock which, among other things, (i) will have a dividend at
a 0.5% annual coupon rate, (ii) will be convertible into common stock of the
Borrower at the option of Utilicorp, and (iii) is not subject to mandatory
redemption by the Borrower at the request of Utilicorp.
C. The Borrower and the Lenders have agreed to amend the Credit
Agreement, to accommodate the issuance of the preferred stock, subject to the
terms and conditions set out in the Amendment.
D. The Borrower has requested certain other modifications to the Credit
Agreement and the Lenders are willing to make such modifications, subject to the
terms and conditions set forth herein.
NOW THEREFORE, in consideration of the premises and other good and valuable
consideration, the receipt and sufficiency of which are acknowledged, the
undersigned agree as follows:
1. The definitions shall be added to Section 1.1 of the Credit Agreement:
2.
"Management Fee" means the management fee due from the Borrower to
Utilicorp under the terms of the management services agreement between
the Borrower and Utilicorp under which Utilicorp will provide to the
Borrower advice regarding (a) corporate and strategic planning, (b)
the development, evaluation, and marketing of the Borrower's products
and services, (c) identifying potential acquisition candidates and
additional business opportunities, and (d) other similar or related
services.
"Preferred Stock" means the perpetual preferred stock issued by the
Borrower to Utilicorp which (a) has a dividend at a 0.5% annual coupon
rate payable for 6 years after the date of issuance, (b) is
convertible into common stock of the Borrower at the option of
Utilicorp at a conversion price which is fixed (or the method of its
determination is fixed) on the date issued, (c) is not subject to
voluntary redemption by the Borrower or mandatory redemption by the
Borrower at the request of Utilicorp, (d) participates with the
Borrower's common stock in permitted distributions, (e) has voting
rights equal to the number of shares into which it could be converted
as of the applicable record date, (f) has preemptive rights to
maintain its proportionate equity ownership in the Borrower, and (g)
gives the Borrower the option to pay, defer, or pay in kind any
scheduled dividend. "Utilicorp" means Utilicorp United Inc., a
Delaware corporation.
<PAGE>
1. The definition of EBITDA in Section 1.1 of the Credit Agreement shall be
deleted in its entirety and replaced with the following:
2.
"EBITDA" means, for any period, on a trailing four fiscal quarter
basis (using the historical financial results of any business acquired
in an Acquisition through the Effective Date, to the extent
applicable, all on a pro forma basis, consistent with SEC
regulations), the sum of (i) Consolidated Net Income plus each of the
following to the extent actually deducted in determining Consolidated
Net Income, (a) Consolidated Interest Expense, and (b) provisions for
taxes based on income or revenues, plus (ii) the amount of the
Management Fee expensed during such period, (iii) the amount of all
depreciation and amortization expense deducted in determining
Consolidated Net Income, and adjusted for (iv) Non-Cash Charges, all
calculated on a consolidated basis for the Borrower and its
Subsidiaries and as determined in accordance with GAAP. Upon the
consummation of any Acquisition after the Effective Date, EBITDA may
be calculated, subject to the immediately following sentence, using a
calculation which (y) includes the historical financial results of the
acquired business on a pro forma trailing four fiscal quarter basis
(consistent with SEC regulations), and (z) assumes that the
consummation of such Acquisition (and the incurrence, refinancing, or
assumption of any Indebtedness in connection with such Acquisition)
occurred on the first day of the trailing four fiscal quarter period.
The foregoing adjustment to EBITDA to take into account an Acquisition
may only be made if the balance sheet and statements of income,
retained earnings, and cash flows of the acquired Person (or the
Person from whom the assets, securities or other equity interests were
acquired), are in compliance with SEC regulations and requirements
regarding the preparation and presentation of historical financial
information and pro forma financial information.
1. The definition of Minimum Interest Coverage Ratio in Section 1.1 of the
Credit Agreement shall be deleted in its entirety and replaced with the
following:
2.
"Minimum Interest Coverage Ratio" means, for any period, the ratio of
(a) EBIT plus the amount of the Management Fee expensed during such
period, to (b) the sum of Consolidated Interest Expense, plus the
amount of any dividend or distribution in respect of the Preferred
Stock paid or scheduled to be paid during such period, plus the amount
of the Management Fee paid during such period.
1. Section 6.10(a) of the Credit Agreement shall be deleted in its entirety
and replaced with the following:
2.
"(a) the Borrower may not pay any dividends or other distributions on
its capital stock, provided that, if no Default then exists or results
therefrom, the Borrower may pay scheduled dividends in respect of the
Preferred Stock."
1. Section 6.11(a) of the Credit Agreement shall be deleted in its entirety
and replaced with the following:
2.
"(a) the Borrower or any of its Subsidiaries may merge into or
consolidate with, make an Acquisition or otherwise purchase or acquire
all or substantially all of the assets or stock of any other Person,
if in respect of such merger, consolidation, purchase
2
<PAGE>
or Acquisition, (i) the Borrower is the surviving entity to any such
merger or consolidation to which the Borrower is a party, or, if the
Borrower is not a party to such transaction, a Subsidiary is the
surviving entity to any such merger or consolidation (or the other
Person will thereby become a Subsidiary), (ii) the nature of the
business of such acquired Person is a Permitted Business; (iii) no
Default or Event of Default shall have occurred and be continuing or
would otherwise be existing as a result of such merger, consolidation,
purchase or Acquisition, (iv) such merger, consolidation, purchase or
Acquisition is non-hostile in nature; and (v) either (y) the aggregate
amount of (without duplication) (1) the cash purchase price paid, (2)
the Borrowings under this Agreement in respect of such consolidation,
purchase or Acquisition, and (3) the Indebtedness of such acquired
Person assumed or otherwise refinanced by the Borrower or any of its
Subsidiaries, does not exceed, for any single Acquisition (after
deducting the amount of cash and Cash Equivalents held by such
acquired Person), an amount equal to 7.5% of Consolidated Net Worth as
of the end of the immediately preceding fiscal quarter, or (z) (1)
prior to the consummation of such merger, consolidation, purchase or
Acquisition, the Borrower shall have delivered to the Agent (which the
Agent shall promptly provide to each Lender) a report signed by an
executive officer of the Borrower which shall contain calculations
demonstrating the Borrower's compliance with Sections 6.20, 6.21,
6.22, and 6.23 (which calculation may use historical financial results
of the acquired business provided the calculation (A) is made on a
trailing four fiscal quarter pro forma basis (consistent with SEC
regulations), (B) assumes that the consummation of such merger,
consolidation, purchase or Acquisition (and the incurrence,
refinancing, or assumption of any Indebtedness in connection with such
Acquisition) occurred on the first day of the trailing four-quarter
fiscal period, and (C) is based on a balance sheet and statements of
income, retained earnings, and cash flows of the acquired Person (or
the Person from whom the assets, securities or other equity interests
were acquired), which are in compliance with SEC regulations and
requirements regarding the preparation and presentation of historical
financial information and pro forma financial information, and (2) the
Majority Lenders have given their prior written consent to such
merger, consolidation, purchase or Acquisition."
1. Section 6.15(f) of the Credit Agreement shall be deleted in its entirety
and replaced with the following:
2.
"(f) loans to employees of the Borrower or any of its
Subsidiaries, provided that all such loans shall not exceed
$10,000,000 at any one time;"
1. A new section, Section 6.25, will be added to the Credit Agreement and will
read as follows:
2.
Section 6.25 Management Fee. The Management Fee may not (a) be
--------------
paid if a Default exists or would result from such payment, or (b)
exceed, in any fiscal year of the Borrower, 5%, calculated on an
annual basis, of the outstanding amount of the Preferred Stock during
such period (taking into account the issuance of additional Preferred
Stock and the conversion of any Preferred Stock into common stock of
the Borrower).
1. Conditions. This Amendment shall not be effective until each of the
----------
following have been delivered to Agent:
3
<PAGE>
2.
(a) this Amendment signed by the Borrower, Guarantors, and Required
Lenders; and
(a) such other documents as Agent may reasonably request.
2. Fees and Expenses. The Borrower agrees to pay the reasonable fees and
-----------------
expenses of counsel to Agent for services rendered in connection with the
preparation, negotiation and execution of this Amendment.
3.
4. Representations and Warranties. The Borrower and Guarantors represent
------------------------------
and warrant to the Lenders that they possess all requisite power and authority
to execute, deliver and comply with the terms of this Amendment, which has been
duly authorized and approved by all requisite corporate action on the part of
the Borrower and Guarantors, for which no consent of any Person is required, and
which will not violate their respective organizational documents, and agree to
furnish the Lenders with evidence of such authorization and approval upon
request. The Borrower and Guarantors further represent and warrant to the
Lenders that (a) the representations and warranties in each Credit Document to
which they are a party are true and correct in all material respects on and as
of the date of this Amendment as though made on the date of this Amendment
(except to the extent that (i) such representations and warranties speak to a
specific date or (ii) the facts on which such representations and warranties are
based have been changed by transactions contemplated by the Credit Agreement),
(b) it is in full compliance with all covenants and agreements contained in each
Credit Document to which it is a party, and (c) no Default or Potential Default
has occurred and is continuing.
5.
6. Scope of Amendment; Reaffirmation; Release. Except as affected by this
------------------------------------------
Amendment, the Credit Documents are unchanged and continue in full force and
effect. However, in the event of any inconsistency between the terms of the
Credit Agreement as hereby amended and any other Credit Document, the terms of
the Credit Agreement shall control and such other document shall be deemed to be
amended hereby to conform to the terms of the Credit Agreement. All references
to the Credit Agreement shall refer to the Credit Agreement as amended by this
Amendment. The Borrower and Guarantors hereby reaffirm their respective
obligations under, and agree that, all Credit Documents to which they are a
party remain in full force and effect and continue to evidence their respective
legal, valid and binding obligations enforceable in accordance with their terms
(as the same are affected by this Amendment). The Borrower and Guarantors hereby
release the Lenders from any liability for actions or failures to act in
connection with the Credit Documents prior to the date hereof. This Amendment
shall be binding upon and inure to the benefit of each of the undersigned and
their respective successors and permitted assigns.
7.
8. Miscellaneous.
-------------
9.
(a) No Waiver of Defaults. This Amendment does not constitute a waiver of,
---------------------
or a consent to, any present or future violation of or default under, any
provision of the Credit Documents, or a waiver of the Lenders' right to
insist upon future compliance with each term, covenant, condition and
provision of the Credit Documents, and the Credit Documents shall continue
to be binding upon, and inure to the benefit of, the Borrower, Guarantors,
and the Lenders and their respective successors and assigns.
(a) Form. Each agreement, document, instrument or other writing to be
----
furnished Agent under any provision of this instrument must be in form and
substance satisfactory to Agent and its counsel.
4
<PAGE>
(a) Multiple Counterparts. This Amendment may be executed in any number of
---------------------
counterparts with the same effect as if all signatories have signed the
same document. All counterparts must be construed together to constitute
one and the same instrument.
(a) Governing Law. This Amendment and the other Credit Documents must be
-------------
construed-and their performance enforced-under Texas law.
1. Entirety. The Credit Documents Represent the Final Agreement Between the
--------
Borrower, Guarantors and the Lenders and May Not Be Contradicted by Evidence of
Prior, Contemporaneous, or Subsequent Oral Agreements by the Parties. There Are
No Unwritten Oral Agreements among the Parties.
2.
The Amendment is executed as of the date set out in the preamble to this
Amendment.
QUANTA SERVICES, INC.
By: /s/ James H. Haddox
____________________________
James H. Haddox
Chief Financial Officer
BANK OF AMERICA, N.A., as Administrative Agent
and as a Lender
By: /s/ Craig S. Wall
____________________________
Craig S. Wall
Senior Vice President
BANK ONE, TEXAS, NATIONAL ASSOCIATION,
as a Documentation Agent and as a Lender
By: /s/ Greg Smothers
____________________________
Name: Greg Smothers
Title: Vice President
5
<PAGE>
BANKBOSTON, N.A., as a Documentation Agent and
as
a Lender
By: /s/ Michael Kane
____________________________
Name: Michael Kane
Title: Managing Director
CREDIT LYONNAIS NEW YORK BRANCH, as a
Managing Agent and as a Lender
By: /s/ Robert Ivosevich
_______________________________
Name: Robert Ivosevich
________________________
Title: Senior Vice President
_______________________
THE BANK OF NOVA SCOTIA, as a Managing
Agent and as a Lender
By: /s/ ECH Ashby
_______________________________________
Name: ECH Ashby
________________________________
Title: Senior Manager Loan Operations
_______________________________
NATIONAL CITY BANK, as a Lender
By: /s/ Michael J. Durbin
___________________________
Name: Michael J. Durbin
Title: Vice President
LASALLE BANK NATIONAL ASSOCIATION, as a
Lender
By: /s/ Richard J. Kress
___________________________
Name: Richard J. Kress
Title: Vice President
FIRST UNION NATIONAL BANK, as a Lender
By: /s/ Mark B. Fellar
____________________________
6
<PAGE>
Name: Mark B. Fellar
Title: Senior Vice President
COMERICA BANK, as a Lender
By: /s/ MARK B. GROVER
-----------------------------
Name: Mark B. Grover
Title: Vice President
THE BANK OF TOKYO-MITSUBISHI, LTD., as a
Lender
By:
----------------------------
Name: John W. McGhee
Title: Vice President and Manager
CHASE BANK OF TEXAS, N.A., as a Lender
By: /s/ JAMES R. DOLPHIN
--------------------------------------
Name: James R. Dolphin
Title: Senior Vice President
GUARANTY FEDERAL BANK, F.S.B., as a Lender
By: /s/ KEVIN J. HANIGAN
----------------------------
Name: Kevin J. Hanigan
Title: Senior Vice President
SUNTRUST BANK, ATLANTA, as a Lender
By: /s/ DAVID EDGE
----------------------------
Name: David Edge
Title: Vice President
By: /s/ CAROLYNN S. McMEEKIN
-----------------------------
Name: Carolynn S. McMeekin
Title: Assistant Vice President
7
<PAGE>
BANKERS TRUST COMPANY, as a Lender
By: /s/ G. ANDREW KEITH
-----------------------------
Name: G. Andrew Keith
Title: Vice President
8
<PAGE>
GUARANTORS' CONSENT AND AGREEMENT
---------------------------------
As an inducement to the Lenders to execute, and in consideration of the
Lenders' execution of this Amendment, each of the undersigned hereby consents to
this Amendment and agrees that the same shall in no way release, diminish,
impair, reduce or otherwise adversely affect the obligations and liabilities of
the undersigned under their respective Guaranties described in the Credit
Agreement executed by the undersigned, or any agreements, documents or
instruments executed by any of the undersigned, all of which obligations and
liabilities are, and shall continue to be, in full force and effect. This
consent and agreement shall be binding upon the undersigned, and their
respective successors and assigns, and shall inure to the benefit of the
Lenders, and their respective successors and assigns.
Advanced Communication Technologies, Inc., an Oregon
corporation
Advanced Communication Technologies Inc., a Washington
corporation
Austin Trencher, Inc., a Delaware corporation
Dillard Smith Construction Company, a Delaware
corporation
Driftwood Electrical Contractors, Inc., a Delaware
corporation
Environmental Professional Associates, Limited, a
California
corporation
Fiber Technology, Inc., a Texas corporation
Five Points Construction Co., a Texas corporation
GEM Engineering Co., Inc., a Delaware corporation
Golden State Utility Co., a Delaware corporation
H.L. Chapman Pipeline Construction, Inc., a Delaware
corporation
Harker & Harker, Inc., a Nevada corporation
Interstate Equipment Corp., a Delaware corporation
Manuel Bros., Inc., a Delaware corporation
NorAm Telecommunications, Inc., an Oregon corporation
North Pacific Construction Co., Inc., a Delaware
corporation
Northern Line Layers, Inc.. a Delaware corporation
PAR Electrical Contractors, Inc., a Missouri
corporation
P.D.G. Electric Company, a Florida corporation
Potelco, Inc., a Washington corporation
QSI, Inc., a Delaware corporation
Quanta XVI Acquisition, Inc., a Delaware corporation
Quanta XVII Acquisition, Inc., a Delaware corporation
Quanta XVIII Acquisition, Inc., a Delaware corporation
Quanta XIX Acquisition, Inc., a Delaware corporation
Quanta XXI Acquisition, Inc., a Delaware corporation
Quanta XXII Acquisition, Inc., a Delaware corporation
Quanta XXIII Acquisition, Inc., a Delaware corporation
Quanta XXIV Acquisition, Inc., a Delaware corporation
Quanta XXV Acquisition, Inc., a Delaware corporation
Quanta XXVI Acquisition, Inc., a Delaware corporation
Quanta XXVII Acquisition, Inc., a Delaware corporation
Quanta XXVIII Acquisition, Inc., a Delaware corporation
Quanta XXIX Acquisition, Inc., a Delaware corporation
Quanta XXX Acquisition, Inc., a Delaware corporation
Quanta XXXI Acquisition, Inc., a Delaware corporation
Quanta XXXII Acquisition, Inc., a Delaware corporation
Quanta XXXIII Acquisition, Inc., a Delaware corporation
Quanta XXXIV Acquisition, Inc., a Delaware corporation
9
<PAGE>
Quanta XXXV Acquisition, Inc., a Delaware corporation
Quanta XXXVI Acquisition, Inc., a Delaware corporation
Quanta XXXVII Acquisition, Inc., a Delaware corporation
Quanta XXXVIII Acquisition, Inc., a Delaware
corporation
Quanta XXXIX Acquisition, Inc., a Delaware corporation
Quanta XL Acquisition, Inc., a Delaware corporation
Quanta XLI Acquisition, Inc., a Delaware corporation
Quanta Delaware, Inc., a Delaware corporation
Quanta Utility Installation Company, Inc., a Delaware
corporation
R. A. Waffensmith & Co., Inc., a Delaware corporation
Seaward Corporation, a Maine corporation
Spalj Construction Company, a Delaware corporation
Span-Con of Deerwood, Inc., a Minnesota corporation
Sullivan Welding, Inc., a Delaware corporation
Sumter Builders, Inc., a Delaware corporation
TTM, Inc., a North Carolina corporation
Telecom Network Specialists, Inc., a Delaware
corporation
The Ryan Company, Inc., a Massachusetts corporation
Tom Allen Construction Company, a Delaware corporation
TRANS TECH Electric, Inc., an Indiana corporation
Underground Construction Co., Inc., a Delaware
corporation
Union Power Construction Company, a Colorado
corporation
VCI Telcom, Inc., a Delaware corporation
W.C. Communications, Inc., a Delaware corporation
W.H.O.M. Corporation, a California corporation
Wilson Roadbores, Inc., a Delaware corporation
By: /s/ BRAD EASTMAN
---------------------------------
Brad Eastman, President or Vice President of
each Guarantor
Coast To Coast, LLC, a California limited liability
company
By: Environmental Professional Associates, Limited,
Its Member
By: /s/ BRAD EASTMAN
----------------------------
Brad Eastman, Vice President
By: Quanta Services, Inc., Its Member
By: /s/ BRAD EASTMAN
----------------------------
Brad Eastman, Vice President
Quanta Services Management Partnership, L.P., a Texas
limited partnership
By: QSI, Inc., Its General Partner
10
<PAGE>
By: /s/ BRAD EASTMAN
----------------------------------
Brad Eastman, Vice President
11
<PAGE>
EXHIBIT 10.19
September 21, 1999
ECT Merchant Investments Corp. ("EMIC")
(as successor to Enron Capital & Trade Resources Corp ("ECT"))
1400 Smith Street
Houston, Texas 77002
Joint Energy Development Investments II Limited Partnership ("JEDI-II")
c/o Enron Corp.
1400 Smith Street
Houston, Texas 77002
Attention: Robert Greer
Re: Certain Waivers in connection with transactions between Quanta
Services, Inc. ("Quanta") and UtiliCorp United Inc. ("UtiliCorp")
Ladies and Gentlemen:
On this date, Quanta and UtiliCorp are entering into a Securities Purchase
Agreement and related transaction documents (collectively, the "Transaction
Documents"), executed copies of which have been provided to EMIC and JEDI-II and
are attached in their final form hereto as Exhibit A. Pursuant to the
Transaction Documents, among other things, (i) UtiliCorp will acquire 1,860,000
shares of Quanta's Series A Convertible Preferred Stock (the "Preferred Stock")
and (ii) UtiliCorp and Quanta will enter into a Management Services Agreement of
even date (the "Management Agreement"). The Preferred Stock is convertible by
the holders thereof (the "Preferred Holder") into Quanta's common stock ("Common
Stock") and pursuant to the Management Agreement, Quanta is obligated to pay to
UtiliCorp certain management fees (collectively, the "Fees").
Quanta and UtiliCorp are jointly requesting that you grant the specific waivers
described below in order for Quanta and UtiliCorp to enter into and perform
certain aspects of the
<PAGE>
ECT Merchant Investments Corp.
Joint Energy Development Investments II
Limited Partnership
September 21, 1999
Page 2
Transaction Documents. The terms of the waivers are set forth below, and each
waiver (i) shall be strictly construed in accordance with its express terms,
(ii) shall be effective only in the specific instance and for the specific
purpose described below and (iii) shall only be effective with respect to those
terms and provisions set forth in the attached Transaction Documents.
The requested waivers are as follows:
1. Preemptive Rights. You waive any and all rights pursuant to Section
-----------------
2.06(b) of that certain Securities Purchase Agreement dated September 29,
1998 among Quanta, JEDI-II and ECT, as amended on this date (the "SPA"),
solely with respect to (i) Quanta's issuance to UtiliCorp of the Preferred
Stock and (ii) the Preferred Holder's conversion of the Preferred Stock
into Common Stock; both such issuance and any such conversions to be done
strictly in accordance with the terms of the Transaction Documents.
2. Regularly Scheduled Dividends. Notwithstanding Section 7.02 of the SPA,
-----------------------------
Quanta may pay the Preferred Holder each regularly scheduled dividend (and
any arrearage with respect to regularly scheduled dividends) provided for
in Section 2 of the Certificate of Designation, Rights, and Limitations of
the Preferred Stock included within the Transaction Documents if, but only
if, at the times of declaration and of payment of any such dividend (and/or
arrearage with respect to any such dividend), with or without notice or
lapse of time, or both, no "Default"or "Event of Default" exist, and no
"Default" or "Event of Default" would result from or would exist
immediately after any such payment, as "Default" and "Event of Default" are
defined in the SPA.
3. Management Fees. Notwithstanding Section 7.06 of the SPA, Quanta and
---------------
UtiliCorp may enter into the Management Agreement and the other
transactions contemplated by the Transaction Documents; provided, however,
that Quanta may pay the regularly scheduled Fee thereunder in accordance
with the Management Agreement if, but only if, at the time of each payment,
with or without notice or lapse of time, or both, no Default or Event of
Default exists and no Default or Event of Default would result from or
would exist immediately after any such payment of any Fee.
<PAGE>
ECT Merchant Investments Corp.
Joint Energy Development Investments II
Limited Partnership
September 21, 1999
Page 3
4. Certain Demand Registrations. Notwithstanding Section 2.01(d) of the
----------------------------
Registration Rights Agreement dated as of September 29, 1998, as amended on
this date (the "Rights Agreement"), among Quanta, JEDI-II and ECT, Quanta
may grant to UtiliCorp the demand registration rights specified in Section
2.1 of the Investor's Rights Agreement dated of even date herewith between
Quanta and UtiliCorp (the "Investor's Rights Agreement") included within
the Transaction Documents; provided, however, that such consent is based on
the agreement of Quanta and UtiliCorp, which agreement will survive for so
long as the Purchasers, as such term is defined in the SPA, or their
successors and assigns hold Registrable Securities as such term is defined
in the Rights Agreement, that none of the provisions in Article II of the
Investor's Rights Agreement, including the third party beneficiary rights
granted to you and your successors, may hereafter be amended, modified,
expanded or waived without the consent of the Purchasers or their
successors and assigns; and
5. Certain Piggy-Back Registrations. Notwithstanding Section 2.02 of the
--------------------------------
Rights Agreement, Quanta may grant to UtiliCorp the piggy-back registration
rights specified in Section 2.2 of the Investor's Rights Agreement.
<PAGE>
ECT Merchant Investments Corp.
Joint Energy Development Investments II
Limited Partnership
September 21, 1999
Page 4
The parties hereto expressly acknowledge that the terms of this letter agreement
may be contradictory or in addition to the terms and provisions of the
Transaction Documents and the Rights Agreement and that the terms of this letter
agreement shall control with respect to the subject matter contained herein.
Please acknowledge your consent to this waiver by executing this letter in the
space provided below and returning it to Quanta Services, Inc., 1360 Post Oak
Blvd., Suite 2100, Houston, Texas 77056, attention General Counsel.
Very truly yours,
QUANTA SERVICES, INC.
By: /s/ Brad Eastman
_________________________
Name: Brad Eastman
_______________________
Title: Vice President
______________________
UTILICORP UNITED INC.
By: /s/ Robert Green
_________________________________
Name:
_________________________________
Title:
________________________________
<PAGE>
ECT Merchant Investments Corp.
Joint Energy Development Investments II
Limited Partnership
September 21, 1999
Page 5
ACKNOWLEDGED AND ACCEPTED:
ECT MERCHANT INVESTMENTS CORP.
By: /s/ Robert Greer
______________________________
Name: Robert Greer
____________________________
Title: Vice President
___________________________
JOINT ENERGY DEVELOPMENT INVESTMENTS II
LIMITED PARTNERSHIP
By: Enron Capital Management II Limited
Partnership, its General Partner
By: Enron Capital II Corp., its
General Partner
By: /s/ Raymond M. Bowen, Jr.
_________________________________
Name: Raymond M. Bowen, Jr.
_______________________________
Title: Vice President and Treasurer
______________________________
<PAGE>
ECT Merchant Investments Corp.
Joint Energy Development Investments II
Limited Partnership
September 21, 1999
Page 6
Exhibit A
Execution Versions of Transaction Documents
<PAGE>
EXHIBIT 10.20
FIRST AMENDMENT TO SECURITIES PURCHASE AGREEMENT
AND REGISTRATION RIGHTS AGREEMENT
This FIRST AMENDMENT TO SECURITIES PURCHASE AGREEMENT AND REGISTRATION
RIGHTS AGREEMENT, dated as of September 21, 1999 (this "First Amendment"), is
among QUANTA SERVICES, INC., a corporation duly organized and existing under the
laws of the State of Delaware (the "Borrower"), ECT MERCHANT INVESTMENTS CORP.,
a corporation duly organized and existing under the laws of the State of
Delaware ("EMIC"), and JOINT ENERGY DEVELOPMENT INVESTMENTS II LIMITED
PARTNERSHIP, a limited partnership duly organized and existing under the laws of
the State of Delaware ("JEDI-II").
Recitals
A. The Borrower, Enron Capital & Trade Resources Corp., a Delaware
corporation ("ECT") and JEDI-II entered into that certain Securities Purchase
Agreement dated as of September 29, 1998 (the "Securities Agreement") pursuant
to which the Borrower has issued certain convertible subordinated notes to ECT
and JEDI-II, all upon the terms and conditions provided for in the Securities
Agreement. ECT assigned its interest in the Notes and the Securities Agreement
to EMIC and EMIC is successor to ECT with respect to the Notes and the
Securities Agreement.
B. The Borrower, ECT and JEDI-II are parties to that certain Registration
Rights Agreement dated as of September 29, 1998 (the "Registration Agreement")
pursuant to which the Borrower has agreed to provide certain registration and
other rights, all upon the terms and conditions provided for in the Registration
Agreement. ECT assigned its interest therein to EMIC and EMIC is successor to
ECT with respect to the Registration Agreement.
C. The Borrower, EMIC and JEDI-II have agreed to amend certain provisions
of the Securities Agreement and Registration Agreement and to take certain other
actions as described in this First Amendment.
D. Borrower has agreed to issue preferred stock to UtiliCorp United Inc.,
a Delaware corporation ("UtiliCorp.") and contemplate entering into the
Investor's Rights Agreement between UtiliCorp and Borrower (the "Investor's
Rights Agreement").
E. NOW, THEREFORE, in consideration of the premises and the mutual
covenants herein contained, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto agree as
follows:
Section 1. Defined Terms. Unless otherwise defined in this First
-------------
Amendment, each capitalized term used in this First Amendment which is defined
in the Securities Agreement has the meaning assigned to such term in the
Securities Agreement.
<PAGE>
Section 2. Amendments to Securities Agreement. The Securities
----------------------------------
Agreement is amended as follows:
A. New and Replaced Definitions. Section 1.01 of the Securities
----------------------------
Agreement is amended by inserting the following definitions as appropriate:
"EBIT" means, for any period, on a trailing four fiscal quarter basis,
the sum of Consolidated Net Income plus each of the following to the extent
actually deducted in determining Consolidated Net Income, (a) Consolidated
Interest Expense, and (b) provisions for taxes based on income or revenues, all
calculated on a consolidated basis for the Borrower and its Subsidiaries and as
determined in accordance with GAAP.
"Management Fee" means the management fee due from the Borrower to
UtiliCorp under the terms of the Management Services Agreement between the
Borrower and UtiliCorp under which UtiliCorp will provide to the Borrower advice
regarding (a) corporate and strategic planning, (b) the development, evaluation
and marketing of the Borrower's products and services, (c) identifying potential
acquisition candidates and additional business opportunities, and (d) other
similar or related services.
"Minimum Interest Coverage Ratio" means, for any period, the ratio of
(a) EBIT plus the amount of the Management Fee expensed during such period, to
(b) the sum of the Consolidated Interest Expense, plus the amount of any
dividend or distribution in respect of the Preferred Stock paid or scheduled to
be paid during such period, plus the amount of the Management Fee paid during
such period.
"Obligations" means any and all amounts, liabilities and obligations
owing from time to time by Borrower to the Purchasers or any Successors,
pursuant to any of the Basic Documents and all renewals, extensions and/or
rearrangements thereof, whether such amounts, liabilities or obligations be
liquidated or unliquidated, now existing or hereafter arising, absolute or
contingent.
"Participation" means, for each Purchaser or any Successor, such
Purchaser's or Successor's proportionate share pertaining to the Obligations. As
of the Effective Date, ECT's Participation shall be 25% and JEDI-II's
Participation shall be 75%.
"Purchasers" means EMIC and JEDI-II and any of their respective
Affiliates who may become the holders of any Securities, but does not include
any Person who becomes a holder of any Securities who is not an Affiliate of
EMIC or JEDI-II.
"Purchaser's Account" means for any Purchaser or Successor, the
account specified by such Purchaser or Successor as its Purchaser's Account by
notice in writing to the Borrower.
"Successors" means the successors and permitted assigns of the
Purchasers that are not Affiliates of Purchasers.
-2-
<PAGE>
B. Section 1.02, Article III, Sections 6.01 through 6.06, Section 6.08,
--------------------------------------------------------------------
Articles VIII and IX, and Sections 11.01, 11.02, 11.03 and 11.08. Section 1.02,
- ----------------------------------------------------------------
Article III, Sections 6.01 through 6.06, Section 6.08, Articles VIII and IX, and
Sections 11.01, 11.02, 11.03 and 11.08 are each amended by replacing all
references to "Purchaser" or "Purchasers" contained therein with respectively,
"Purchaser and/or any Successor" and "Purchasers and/or any Successors."
C. Sections 2.06 and 6.07. Sections 2.06 and 6.07 are amended by
----------------------
replacing (i) "ECT or JEDI-II" with "EMIC, JEDI-II or any of their respective
Affiliates" and (ii) "ECT and JEDI-II" with "EMIC, JEDI-II and any of their
respective Affiliates that become Purchasers."
D. Section 7.01. Section 7.01 is amended by deleting the first sentence
------------
and replacing it with the following:
The Borrower will not, and will not permit any Subsidiary to, create,
incur, assume, guarantee or in any other manner become directly or
indirectly liable (as to new Indebtedness) for the payment of (a) any
Prohibited Subordinated Indebtedness, as hereafter defined, or (b) any
other Indebtedness unless the Borrower's Minimum Interest Coverage
Ratio is greater than or equal to the Minimum Interest Coverage Ratio
permitted by the Senior Credit Agreement, but in no event shall such
ratio be less than 2.76 to 1.0.
E. Section 11.04. Section 11.04 is amended by replacing such section in
-------------
its entirety with the following:
This Agreement shall be binding upon the Borrower, the Purchasers, and
their respective Successors. Except as expressly provided in this
Agreement, this Agreement shall not be construed so as to confer any
right or benefit upon any Person other than the Borrower, the
Purchasers, and their respective Successors. All or any portion of the
rights and obligations of the Purchasers and their Successors under
this Agreement with respect to the Basic Documents may be sold,
assigned or pledged by any Purchaser or Successor. Notwithstanding the
foregoing, the Purchasers may transfer the rights provided in Sections
2.06, 6.07 or 10.09 only to other Purchasers. Upon any assignment of
the Basic Documents, the assignee shall succeed to all of the
assignor's rights and obligations under the Basic Documents to the
extent assigned and the assigning Purchaser or Successor, as
applicable, shall be automatically released from any such obligations
hereunder with respect to the Basic Documents to the extent assigned,
other than the obligations arising under Article X hereof. The
Conversion Shares may be sold, assigned or pledged and upon any
assignment complying with the terms of the Registration Rights
Agreement and upon any such assignment, the holders of the Conversion
Shares shall succeed to the Purchaser's or any Successor's rights and
-3-
<PAGE>
obligations under the Registration Rights Agreement. Upon request of
any Purchaser or any Successor in connection with any transfer of the
Notes, the Borrower shall execute and deliver any amendment to this
Agreement, the Notes, and the other Basic Documents reasonably
requested by the Purchaser or the Successor to reflect the transfer
and delineate the rights of the transferor and the transferee provided
that the Borrower shall not be liable for the expenses incurred in
documenting such amendment. In the event that a Purchaser or a
Successor grants participations in its Note to other Persons, each of
such other Persons shall have the rights of setoff against any amounts
due by the Borrower hereunder and similar rights or Liens to the same
extent as made available to the Purchasers or any Successors. The
Borrower acknowledges that the Purchasers or any Successors may
"syndicate" the loan evidenced by the Notes, and the other Basic
Documents and agree to execute any amendments, restatements and other
modifications to the Basic Documents in connection with such
syndication, provided that the Borrower shall not be liable for the
expenses incurred by Purchasers or any Successors in documenting such
syndication. The Borrower may deem and treat the original Purchasers
as the owner of the Notes for the purpose of receiving payment of
principal of and premium (if any) and interest on the Notes and for
all other purposes whatsoever until the Borrower is notified otherwise
in writing pursuant to Section 11.06 of this Agreement.
Section 3. Amendments to Registration Agreement. The Registration
------------------------------------
Agreement is amended as follows:
A. Defined Terms. For Section 3 only of this First Amendment, each
-------------
capitalized term used in this Section 3 of the First Amendment which is defined
in the Registration Agreement and not in the Securities Agreement has the
meaning assigned to such term in the Registration Agreement.
B. Amended Definition. Section 1.01 of the Registration Agreement is
------------------
amended by amending the definition of "Registrable Securities" to read, in its
entirety, as follows:
"Registrable Securities " means any of the following: (i) the
Conversion Shares (including shares of Common Stock actually issued
upon conversion of the Notes), (ii) other shares of Common Stock
acquired by EMIC and/or JEDI-II pursuant to Section 2.06 of the
Securities Purchase Agreement, and (iii) the Indenture Notes (as
defined below), the underlying Conversion Shares and any replacement
or substitute for, or reissuance of, any Indenture Notes, until such
time as any of such securities cease to be Registrable Securities
pursuant to Section 1.02 hereof. Since the term Registrable Securities
is being amended to include debt securities as well as equity
securities, the context of each provision of this Agreement will be
interpreted in a manner so as to give maximum
-4-
<PAGE>
effect to all provisions insofar as they are now applicable to debt
securities. When calculating a percentage of Registrable Securities,
the calculation shall be made using the amount of shares of Common
Stock beneficially owned as a result of owning Registrable Securities.
C. Demand Registration. Section 2.01(d) is amended by replacing the
-------------------
last sentence of the first paragraph with the following:
Except as provided in this subsection (d) and in Section 2.05, the
Company will not effect any other registration of its Voting
Securities (except with respect to Registration Statements on Form S-4
or S-8 or any forms succeeding thereto for purposes permissible under
such forms as of the date hereof or filed in connection with an
exchange offer or an offering of securities solely to the Company's
existing stockholders or such other registration statements (i) for
the resale of shares issued pursuant to an employee stock ownership
trust or other benefit plan of a business acquired in an Acquisition
or (ii) in connection with non-underwritten resales of securities
issued to owners of a business acquired in an Acquisition), whether
for its own account or that of any Other Holder other than holders of
"Registrable Securities" (as such term is defined in the Investor's
Rights Agreement) under the Investor's Rights Agreement, from the date
of receipt of a Request Notice requesting the registration of an
underwritten public offering (x) in the case of all underwritten
public offerings other than firm commitment, underwritten public
offerings, until the completion or abandonment of the distribution by
the underwriter of all securities thereunder, or (y) in the case of
firm commitment, underwritten public offerings, until the earlier of
(a) the date each underwriter has completed the distribution of all
securities purchased by it or (b) the date ninety (90) days subsequent
to the effective date of such registration statement.
D. Piggy-Back Registration. Section 2.02 is amended by replacing the
-----------------------
proviso at the end of the last sentence of the first paragraph with the
following:
provided, however, that (a) in the case of a Registration Statement
filed pursuant to the exercise of demand registration rights of any
Other Holders, priority shall be given first to the Other Holders
demanding such registration, then equally (on a share for share basis)
to the Holders and UtiliCorp, then to the Company and then to Other
Holders (other than the Other Holders demanding such registration);
and (b) in the case of a Registration Statement the filing of which is
initiated by the Company, priority shall be given (A) first to the
Company, then (B) such priority shall be given equally (on a share for
share basis) to (x) the Other Holders (exercising their piggy back
registration rights) and (y) the Holders.
-5-
<PAGE>
E. Assignees. Section 3.12 is amended by replacing the first sentence
---------
with the following:
The rights of any Holder under this Agreement may be assigned to any
Person who, in the aggregate, acquires or becomes the Beneficial Owner
of at least 10,000 shares of Common Stock either issued or issuable on
conversion of the Notes, which such number shall be subject to
equitable adjustment for stock splits, stock dividends or combinations
of shares.
F. Preparations for Registered Sales of Notes. In the event that any
------------------------------------------
Holder or Holders elect to exercise their demand registration rights with
respect to the Notes (the "Triggering Note Holder(s)"), then the following
actions shall be taken:
(a) The Triggering Note Holder(s) will notify the Borrower of
such determination;
(b) The Borrower shall (i) promptly notify all other Holders of
Notes of such determination and (ii) give such other Holders of Notes
7 days to elect to participate in the following procedures. Any Holder
of the Notes electing to participate within such 7 days shall
participate with Triggering Note Holder(s) on a pro-rata basis
(collectively, the "Participating Note Holder(s)"). Among the
Participating Note Holder(s), a simple majority on a dollar basis
shall control all decisions;
(c) The Borrower shall engage a nationally recognized indenture
trustee (the "Trustee") reasonably acceptable to the Participating
Note Holder(s);
(d) The Borrower and the Trustee shall enter into a customary
indenture (the "Indenture") acceptable to the Participating Note
Holder(s), which will cover all Notes (the "Indenture Notes"). The
Indenture shall require the vote of the Participating Note Holder(s)
holding Indenture Notes representing at least 66 2/3% of the principal
amount of outstanding Indenture Notes to either (i) amend or modify
the Indenture or (ii) remove or replace the Trustee; provided,
however, that, without the consent of each of the Holder(s) of the
Indenture Notes affected thereby, the Indenture and Indenture Notes
shall not be amended or modified to (a) extend the fixed maturity of
any Indenture Note, or reduce the rate or extend the time of payment
of interest thereon or reduce the principal amount thereof, or
premium, if any, thereon, or make the principal thereof or premium, if
any, or interest thereon payable in any currency other than U.S.
dollars, (b) modify the subordination or conversion provisions of the
Indenture or Indenture Notes in any manner adverse to the interests of
the Participating Note Holder(s), or (c) reduce the 66 2/3rd
percentage for Participating Note Holder(s) who are required to
consent (i) to other amendments to, or modifications of, the Indenture
and Indenture Notes or (ii) to removal or replacement of the Trustee.
The form of Indenture Note will be included within the text of the
Indenture;
-6-
<PAGE>
(e) The Indenture and the Indenture Notes, both of which must be
acceptable to the Participating Note Holder(s), shall contain the same
rights, terms and features, mutatis mutandis, as stated in the
Securities Agreement, the Registration Agreement and the underlying
Notes to be received in exchange; including, without limitation, the
right to convert into Conversion Shares, along with such other terms
as are required in order (i) for the Indenture Notes to be eligible
for sale pursuant to a Registration Statement and (ii) for the
Indenture to be eligible to be qualified under the Trust Indenture Act
of 1939, as amended (the "Trust Indenture Act"). The terms of any
provisions of the Securities Agreement, the Registration Agreement and
the Notes that are (x) to be retained by EMIC and/or JEDI-II and any
other specific Person and (y) not to be included in the Indenture, may
be contained in a separate agreement between EMIC and/or JEDI-II (or
such Person), on the one hand, and the Borrower, on the other hand;
(f) As of the date of the Indenture, the face amount of
underlying Notes of each Holder of a Note shall be exchanged with the
Borrower and the Trustee for Indenture Notes of an equal face amount.
Any accrued but unpaid interest on the Notes as of the date of the
exchange shall be carried forward and shall be payable to the Holders
of Indenture Notes;
(g) The Borrower shall use commercially reasonable efforts to
cause the creation of the Indenture and the exchange of Notes to be
accomplished within 30 days after a determination has been made of
those Participating Note Holders; and
(h) When Holder(s) of Indenture Notes exercise their rights to
sell Indenture Notes pursuant to a Registration Statement, the
Borrower shall use its commercially reasonable efforts to cause the
Indenture to be qualified with the Securities and Exchange Commission
under the Trust Indenture Act.
G. Out of Pocket Expenses. All of the Borrower's and the Participating
----------------------
Note Holders' reasonable out of pocket expenses incurred to (a) engage and
compensate a Trustee, (b) create the Indenture, (c) qualify the Indenture under
the Trust Indenture Act, and (d) effect the exchange of Notes for Indenture
Notes shall be paid or reimbursed by the Participating Note Holders, pro rata in
accordance with the face amounts of such Indenture Notes.
Section 4. Representations and Warranties. The Borrower represents that:
------------------------------
(i) as of the date hereof, no Default nor Material Adverse
Effect has occurred; and
(ii) the execution, delivery and performance by the Borrower of
this First Amendment: (a) is within the Borrower's corporate power;
(b) has been duly authorized by all necessary or proper corporate
action; (c) is not in contravention of any provision of the Borrower's
certificate of incorporation or
-7-
<PAGE>
bylaws; (d) will not violate (1) any law or regulation or (2) any
order or decree of any court or governmental instrumentality; (e) will
not conflict with or result in the breach or termination of,
constitute a default under or accelerate any performance required by,
any agreement or other instrument to which the Borrower is a party or
by which the Borrower or any of its respective property is bound; and
(f) does not require the consent or approval of any governmental body,
agency, authority or any other Person that has not been duly obtained,
made or complied with prior to the date hereof.
Section 5. Limitations. The amendments set forth herein are limited
-----------
precisely as written and shall not be deemed to (a) be a consent to, or waiver
or modification of, any other term or condition of the Securities Agreement or
Registration Agreement or any of the other Basic Documents, or (b) prejudice any
right or rights which the Purchasers may now have or may have in the future
under or in connection with the Securities Agreement or Registration Agreement
or any of the other Basic Documents. Except as expressly supplemented, amended
or modified hereby, the terms and provisions of the Securities Agreement or
Registration Agreement or any other Basic Documents are and shall remain in full
force and effect. In the event of a conflict between this First Amendment and
any of the foregoing documents, the terms of this First Amendment shall be
controlling.
Section 6. Governance. This First Amendment and the rights and
----------
obligations of the parties hereunder and under the Securities Agreement shall be
construed in accordance with and be governed by the laws of the State of Texas.
Any action, dispute, claim or controversy of any kind between the Borrower, on
the one hand, and EMIC and JEDI-II or any of their successors and assigns, on
the other hand, shall be arbitrated in accordance with the terms and provisions
of Section 11.08 of the Securities Agreement.
Section 7. Descriptive Headings, etc. The descriptive headings of the
--------------------------
several Sections of this First Amendment are inserted for convenience only and
shall not be deemed to affect the meaning or construction of any of the
provisions hereof.
Section 8. Counterparts. This First Amendment may be executed in any
------------
number of counterparts and by different parties on separate counterparts and all
of such counterparts shall together constitute one and the same instrument.
-8-
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be
executed as of the date first written above.
QUANTA SERVICES, INC.,
A Delaware corporation
By: /s/ Brad Eastman
____________________________
Name: Brad Eastman
___________________________
Title: Vice President
__________________________
JOINT ENERGY DEVELOPMENT INVESTMENTS II LIMITED
PARTNERSHIP, a Delaware limited partnership
By: Enron Capital Management II Limited
Partnership, its General Partner
By: Enron Capital II Corp., its
General Partner
By: /s/ Raymond M. Bowen, Jr.
________________________________
Name: Raymond M. Bowen, Jr.
_______________________________
Title: Vice President and Treasurer
______________________________
ECT MERCHANT INVESTMENTS CORP.,
a Delaware corporation
By: /s/ Robert Greer
_________________________
Name: Robert Greer
_______________________
Title: Vice President
______________________
-9-
<PAGE>
EXHIBIT 21
Advanced Communication Technologies, Inc.
Austin Trencher, Inc.
Coast to Coast, L.L.C.
Computapole, Inc.
Conti Communications, Inc.
Crown Fiber Communications, Inc.
Danford Technologies, Inc.
Dillard Smith Construction Company
Driftwood Electrical Contractors, Inc.
Edwards Pipeline Company, LLC
Environmental Professional Associates, Limited
Fiber Technology, Inc.
Five Points Construction Company
GEM Engineering Co., Inc.
Golden State Utility Co.
H.L. Chapman Pipeline Construction, Inc.
Haines Construction Company
Harker & Harker, Inc.
Hudson & Poncetta
Interstate Equipment Corporation
Kingston Constructors, Inc.
Manuel Bros., Inc.
Network Communications Services, Inc.
NorAm Telecommunications, Inc.
North Pacific Construction Company
North Sky Communications
Northern Line Layers, Inc.
Pac West Construction, Inc.
PAR Electrical Contractors, Inc.
PDG Electric Company
Potelco, Inc.
QSI, Inc.
Quanta Delaware, Inc.
Quanta Services Management Partnership, L.P.
Quanta Services of Canada, Ltd.
Quanta Utility Installation Co., Inc.
Quanta XL Acquisition, Inc.
<PAGE>
Quanta XLI Acquisition, Inc.
Quanta XVII Acquisition, Inc.
Quanta XXVI Acquisition, Inc.
Quanta XXVIII Acquisition, Inc.
Quanta XXX Acquisition, Inc.
Quanta XXXIX Acquisition, Inc.
Quanta XXXVI Acquisition, Inc.
Quanta XXXVII Acquisition, Inc.
Ranger Directional, Inc.
Seaward Corporation
Spalj Construction Company
Span-Con of Deerwood, Inc.
Specialty Drilling, Inc.
Sullivan Welding, Inc.
Sumter Builders, Inc.
T.H. Cable Construction, Inc.
Telecom Network Specialists, Inc.
The Ryan Company, Inc.
Tom Allen Construction Company
TRANS TECH Electric, Inc.
TTM, Inc.
Underground Construction Co., Inc.
Union Power Construction Company
Utilco, Inc.
VCI Telecom, Inc.
W.H.O.M. Corporation
R. A. Waffensmith & Co., Inc.
Wade D. Taylor
West Coast Communications, Inc.
Wilson Roadbores, Inc.
World CATV Communications Division
<PAGE>
EXHIBIT 23.1
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the
incorporation by reference in this registration statement of Quanta Services,
Inc., of our reports on the financial statements of the following businesses:
report dated October 8, 1999, on the financial statements of W.C.
Communications, Inc. for the year ended December 31, 1998; and our report dated
October 7, 1999, on the financial statements of Edwards Pipeline Company LLC for
the year ended December 31, 1998, both of which were filed on Form 8-K dated
on or about November 15, 1999; our report dated June 7, 1999, on the
consolidated financial statements of Quanta Services, Inc. and Subsidiaries for
the three years in the period ended December 31, 1998; our report dated May 7,
1999, on the combined financial statements of Driftwood Electrical Contractors,
Inc. for the year ended December 31, 1998; and our report dated June 3, 1999 on
the combined financial statements of the H.L. Chapman Construction Group for the
year ended October 31, 1998, all three of which were filed on Form 8-K dated
June 17, 1999; our report dated March 19, 1999 on the combined financial
statements of Northern Line Layers, Inc. for the year ended December 31, 1998,
as filed on Form 8-K/A dated April 23, 1999, and to the incorporation by
reference of said reports into Quanta Services, Inc.'s previously filed
Registration Statements on Form S-8 (File Nos. 333-47069, 333-56849 and 333-
86375) and Form S-3 (File Nos. 333-81419) and to all references to our Firm
included in this registration statement.
/s/ Arthur Andersen LLP
ARTHUR ANDERSEN LLP
Houston, Texas
November 15, 1999
<PAGE>
EXHIBIT 23.3
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the
incorporation by reference in this registration statement of Quanta Services,
Inc., of our report dated July 9, 1999, on the combined financial statements of
North Sky Communications and Affiliates for the year ended December 31, 1998
included in Quanta Services, Inc.'s Form 8-K dated on or about November 15, 1999
and to all references to our Firm included in this registration statement.
/s/ Arthur Andersen LLP
- -----------------------
Arthur Andersen LLP
Portland, OR
November 15, 1999
<PAGE>
EXHIBIT 23.4
[LETTERHEAD OF S. J. GALLINA & CO., LLP]
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the incorporation by
reference in this registration statement of Quanta Services, Inc., of our report
dated October 14, 1999, on the financial statements of Western Directional, Inc.
for the year ended December 31, 1998 included in Quanta Services, Inc.'s Form
8-K dated on or about November 15, 1999 and to all references to our Firm
included in this registration statement.
/s/ S. J. GALLINA, LLP
----------------------------------
S. J. GALLINA
S. J. Gallina & Co., LLP
Sacramento, California
November 15, 1999
<PAGE>
EXHIBIT 23.5
JERRY T. PAUL
CERTIFIED PUBLIC ACCOUNTANT 6420 TARNEF, SUITE 240 HOUSTON, TEXAS 77074-3798
713-777-0409 MEMBER A.I.C.P.A.
FAX #: 713-777-7632
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANT
As independent public accountants, we hereby consent to the
incorporation by reference in this registration statement of Quanta Services,
Inc., of our report dated April 28, 1999, on the financial statements of Gem
Engineering Co., Inc. for the year ended December 31, 1998 included in Quanta
Services, Inc.'s Form 8-K dated on or about November 15, 1999 and to all
references to our Firm included in this registration statement.
/s/ Jerry T. Paul
Jerry T. Paul
Certified Public Accountant
Houston, Texas
November 15, 1999
<PAGE>
EXHIBIT 23.6
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the incorporation by
reference in this registration statement of Quanta Services, Inc., of our report
dated February 5, 1999, on the financial statements of Bonneville Construction
Company, Inc. as of and for the year ended December 31, 1998 included in Quanta
Services, Inc.'s Form 8-K dated on or about November 15, 1999 and to all
references to our Firm included in this registration statement.
/s/ McGLADREY & PULLEN, LLP
Las Vegas, Nevada
November 15, 1999
<PAGE>
EXHIBIT 23.7
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the
incorporation by reference in this registration statement of Quanta Services,
Inc., of our report dated June 18, 1999, on the financial statements of Haines
Construction Co. for the year ended March 31, 1999 included in Quanta Services,
Inc.'s Form 8-K dated on or about November 15, 1999 and to all references to our
Firm included in this registration statement.
/s/ Paul B. Leathers, Inc.
- --------------------------
Paul B. Leathers, Inc.
Oklahoma City, Oklahoma
November 15, 1999
<PAGE>
EXHIBIT 23.8
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the incorporation by
reference in this registration statement of Quanta Services, Inc., of our report
dated July 30, 1999, on the financial statements of Crown Fiber Communications,
Inc. for the year ended December 31, 1998 included in Quanta Services, Inc.'s
Form 8-K dated on or about November 15, 1999 and to all references to our Firm
included in this registration statement.
/s/ Babush, Neiman, Kornman & Johnson, LLP
- ------------------------------------------
BABUSH, NEIMAN, KORNMAN & JOHNSON, LLP
Atlanta, Georgia
November 15, 1999
<PAGE>
EXHIBIT 23.9
[LETTERHEAD OF McDANIEL & ASSOCIATES, P.C.]
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the incorporation by
reference in this registration statement of Quanta Services, Inc., of our report
dated November 5, 1999, on the financial statements of Trawick Construction
Company Group for the year ended December 31, 1998, included in Quanta Services,
Inc.'s Form 8-K dated on or about November 15, 1999, and to all references to
our firm included in this registration statement.
/s/ McDaniel & Associates, P.C.
- -------------------------------
McDANIEL & ASSOCIATES, P.C.
Dothan, Alabama
November 15, 1999
<PAGE>
EXHIBIT 23.10
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the incorporation by
reference in this registration statement of Quanta Services, Inc., of our report
dated April 9, 1999, except for Note 5 as to which the date is October 1, 1999,
on the financial statements of the Telecommunications Division of Conti
Enterprises, Inc. as of and for the year ended December 31, 1998 included in
Quanta Services, Inc.'s Form 8-K dated on or about November 15, 1999 and to all
references to our Firm included in this registration statement.
/s/ J.H. Cohn LLP
-----------------
J.H. COHN LLP
Roseland, New Jersey
November 15, 1999
<PAGE>
EXHIBIT 23.11
[LETTERHEAD OF KIRKLAND ALBRECHT AND COMPANY P.C.]
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the incorporation by
reference in this registration statement of Quanta Services, Inc., of our
report dated February 3, 1999, on the financial statements of The Ryan Company,
Inc. for the year ended December 31, 1998 included in Quanta Services, Inc.'s
Form 8-K dated June 17, 1999 and to all references to our Firm included in this
registration statement.
/s/ KIRKLAND ALBRECHT AND COMPANY
- ----------------------------------------
Kirkland Albrecht and Company
Braintree, Massachusetts
November 12, 1999
<PAGE>
EXHIBIT 23.12
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the incorporation by
reference in this registration statement of Quanta Services, Inc., of our report
dated August 24, 1998, on the financial statements of Dillard Smith Construction
Company for the year ended June 30, 1998 included in Quanta Services, Inc.'s
Form 8-K dated June 17, 1999 and to all references to our Firm included in this
registration statement.
/s/ Joseph Decosimo and Company, LLP
- ------------------------------------
Joseph Decosimo and Company, LLP
Chattanooga, TN
November 12, 1999
<PAGE>
EXHIBIT 23.13
[LETTERHEAD OF NATHAN WECHSLER & COMPANY]
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the incorporation by
reference in this registration statement of Quanta Services, Inc., of our report
dated January 27, 1999, on the consolidated financial statements of Seaward
Corporation and subsidiaries for the year ended December 31, 1998 included in
Quanta Services, Inc.'s Form 8-K dated June 17, 1999 and to all references to
our Firm included in this registration statement.
/s/ Nathan Wechsler & Company
- -----------------------------
Nathan Wechsler & Company
Concord, New Hampshire
November 12, 1999
<PAGE>
EXHIBIT 23.14
[LETTERHEAD OF GANIM, MEDER, CHILDERS & HOERING, P.C.]
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the incorporation by
reference in this registration statement of Quanta Services, Inc., of our
report dated September 15, 1998, on the financial statements of Tom Allen
Construction Company for the year ended April 30, 1998 included in Quanta
Services, Inc.'s Form 8-K dated June 17, 1999 and to all references to our Firm
included in this registration statement.
/s/ Ganim, Meder, Childers & Hoering, P.C.
- ------------------------------------------
GANIM, MEDER, CHILDERS & HOERING, P.C.
Bellerville, Illinois
November 12, 1999
