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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;
(b) Recommendations for improvement and cost reduction between UtiliCorp,
its Affiliates and the Company; and
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(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,
"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
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
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
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,
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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
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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
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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/ Xxxx Xxxxxxx
Name: Xxxx Xxxxxxx
Title: Vice President and General Counsel
UTILICORP UNITED INC.
By: /s/ Xxxxxx X. Xxxxx
Name: Xxxxxx X. Xxxxx
Title: President
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