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REGISTRATION RIGHTS AGREEMENT
This Registration Rights Agreement (this "Agreement") is made and
entered into as of September 29, 1998 by and among Quanta Services, Inc., a
Delaware corporation (the "Company"), Joint Energy Development Investments II
Limited Partnership, a Delaware limited partnership ("JEDI"), and Enron Capital
& Trade Resources Corp., a Delaware corporation ("ECT").
This Agreement is made pursuant to the Securities Purchase Agreement
(the "Securities Purchase Agreement") dated as of even date herewith, by and
among the Company, ECT and JEDI. In order to induce ECT and JEDI 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, ECT and JEDI will acquire the Convertible
Promissory Notes (the "Notes") which will entitle ECT and JEDI to convert the
Notes into shares of Common Stock, par value $.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).
The parties agree as follows:
ARTICLE I
Section 1.01. 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:
"Commission" has the meaning specified therefor in Section 1.02 of this
Agreement.
"Common Stock" means the common stock, par value $.00001 per share of
the Company.
"Conversion Shares" means the shares of Common Stock issuable on
conversion of the Notes.
"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.
"Inspector" has the meaning specified therefor in Section 2.03 of this
Agreement.
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"Losses" has the meaning specified therefor in Section 2.08 of this
Agreement.
"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.
"Records" has the meaning specified therefor in Section 2.03 this
Agreement.
"Registrable Securities" means the Conversion Shares and any other
shares of Common Stock acquired by ECT and JEDI pursuant to Section 2.06 of the
Securities Purchase Agreement until such time as such securities cease to be
Registrable Securities pursuant to Section 1.02 hereof.
"Requesting Holder(s)" has the meaning specified therefor in Section
2.01 this Agreement.
"Request Notice" has the meaning specified therefor in Section 2.01
this Agreement.
"Registration Statement" has the meaning specified therefor in Section
2.01 of this Agreement.
"Securities Act" has the meaning specified therefor in Section 1.02
this Agreement.
"Selling Holder" means a Holder who is selling Registrable Securities
pursuant to a Registration Statement (as defined herein).
"Voting Securities" has the meaning specified therefor in Section 2.01
this Agreement.
Section 1.02. Registrable Securities. Any Registrable Security will
cease to be a Registrable Security when (i) a Registration Statement (as defined
in Section 2.01(b)) covering such Registrable Security has been declared
effective by the Securities and Exchange Commission (the "Commission") and such
Registrable Security has been sold or disposed of pursuant to such effective
Registration Statement; (ii) such Registrable Security is disposed of pursuant
to Rule 144 (or any similar provision then in force) under the Securities Act of
1933, as amended (the "Securities Act"); (iii) 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 (iv) such Registrable Security is held by the Company or one
of its subsidiaries.
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ARTICLE II
Section 2.01. Demand Registration. (a) After the expiration of 180 days
after the Closing Date, any Holder or Holders who collectively Beneficially Own
at least 20% 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) Promptly following receipt of a Request Notice, the Company shall
notify each Holder (except the Requesting Holder) of the receipt of a Request
Notice and shall use its commercially reasonable efforts to file a registration
statement under the Securities Act (each such registration statement is
hereinafter referred to as 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 day after receipt of the
notice sent by the Company) (such other Holders and the Requesting Holder are
hereinafter referred to as 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, which approval shall not be withheld unreasonably. The Company shall
be obligated to register Registrable Securities pursuant to this Section 2.01 on
two occasions only.
(c) If the Company has received a Request Notice, whether or not a
Registration Statement with respect thereto has been filed or has become
effective, and 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 (A) to be filed on or before the date such filing would otherwise be
required hereunder, or (B) to become effective because such action (x) would
materially interfere with a significant acquisition, corporate reorganization or
other similar transaction involving the Company, (y) would require premature
disclosure of material information that the Company has a bona fide business
purpose for preserving as confidential, or (z) the Company is unable to comply
with requirements of the Commission, the Company shall have the right, but not
more than once in any calendar year 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 ninety days from the date the
response period for Holders pursuant to Section 2.01(b) expires).
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(d) The Company shall be entitled to include in any Registration
Statement filed pursuant to this Section 2.01, 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 2.01 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 2.05, 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, 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.
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 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 with respect to which, 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 2.02. Piggy-Back Registration. 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
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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 days prior to the anticipated filing date. Upon the written request of any
Holder received by the Company no later than the 15th 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. 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 first to the
Other Holders demanding such registration, then to the Holders, 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 to (x) the Other Holders
(exercising their piggy back registration rights) and (y) the Holders.
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
with respect to which, 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. In the event that
the number of Registrable Securities to be included in a registration is to be
reduced as provided above, within 10 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, and if such Holders are
unable to agree among
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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.
Section 2.03. 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 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
subparagraph (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 subparagraph (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 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
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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 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
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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 ninety (90) 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) use its commercially reasonable efforts to keep effective and
maintain for the period specified in subparagraph (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;
(i) 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
(j) 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
2.03, 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 2.03 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 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 2.03 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 2.03 hereof or
the notice that they may resume use of the prospectus.
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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 2.04 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 2.05 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 days before, and during the 90-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; 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 2.06. 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 days before,
and during the 90-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 (i) 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 commitments
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to register the resale of securities issued to owners of a business acquired in
an Acquisition. This section applies to demand registration rights only.
Section 2.07. Expenses.
(a) "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) 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 2.08. Indemnification. (a) 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) ("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
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furnished by such Selling Holder, such underwriter or such controlling Person in
writing specifically for use in such Registration Statement or prospectus.
(b) 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) 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 2.08. In case any such
action shall be brought against any indemnified party and 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 2.08 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) If the indemnification provided for in this Section 2.08
is unavailable to the Company or the Selling Holders or is insufficient to hold
them harmless in respect of any Losses,
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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, claims, damages or liabilities, as well as any other relevant equitable
considerations. The relative fault of the Company on the one hand and each
Selling Holder on the other shall be determined by reference to, among other
things, whether the untrue or alleged untrue statements 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.
ARTICLE III
Section 3.01. 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 days after the filing of the Dispute
with the AAA, or the parties, arbitrators fail to designate a third arbitrator
within 30 days after the later of their appointments, such arbitrator shall be
appointed by the AAA. An arbitration proceeding hereunder shall be concluded
within 180 days of the filing of the Dispute with the AAA. Arbitration
proceedings shall be conducted in Houston, Texas. 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
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make specific written findings of fact and conclusions of law. The decision of
the arbitrators shall be final and binding on each party.
Section 3.02. 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 of Registrable Securities, at the most
current address given by such Holder to the Company in accordance with the
provisions of this Section 3.02, which address initially is, with respect to
JEDI or ECT, 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 3.02.
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; and when actually received if delivered to
an air courier guaranteeing overnight delivery.
Section 3.03. 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 3.12.
Section 3.04. 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 3.05. Headings. The headings in this Agreement are for
convenience of reference only and shall not limit or otherwise affect the
meaning hereof.
Section 3.06. Governing Law. The laws of the State of Texas shall
govern this Agreement without regard to principles of conflict of laws.
Section 3.07. 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.
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Section 3.08. Entire Agreement. This Agreement, together with the
Securities Purchase Agreement and the other Basic Documents (as defined in 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 registration rights granted by the Company with respect to the securities
sold pursuant to the Securities Purchase Agreement. This Agreement, the
Securities Purchase Agreement and the other Basic Documents, supersede all prior
agreements and understandings between the parties with respect to such subject
matter.
Section 3.09. Attorneys' Fees. In any action or proceeding brought to
enforce any provision of this Agreement, the successful party shall be entitled
to recover reasonable attorneys' fees in addition to its costs and expenses and
any other available remedy.
Section 3.10. Amendment. This Agreement may be amended only by means of
a written amendment signed by the Company and by the Holders of a majority of
the Registrable Securities.
Section 3.11. 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.
Section 3.12. Assignment of Rights. The rights of any Holder under this
Agreement may be assigned to any Person who acquires at least 10,000 shares of
Registrable Securities, which such number of shares shall be subject to
equitable adjustment for stock splits, stock dividends paid in shares of Common
Stock, or combinations of outstanding shares of Common Stock into a smaller
number of shares. Any assignment of registration rights pursuant to this Section
3.12 shall be effective only upon receipt by the Company of written notice from
such assigning Holder stating the name and address of any assignee. The rights
of an assignee under this Section 3.12 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.
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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
--------------------------------
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/ XXXXXX XXXXX
-----------------------------------
Name: Xxxxxx Xxxxx
---------------------------------
Title: Agent and Attorney-in-Fact
--------------------------------
ENRON CAPITAL & TRADE RESOURCES CORP.
By: /s/ XXXXXX XXXXX
-----------------------------------
Name: Xxxxxx Xxxxx
---------------------------------
Title: Vice President
--------------------------------
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