FIRST AMENDMENT TO STOCK PURCHASE AGREEMENT
Exhibit 10.1
FIRST AMENDMENT TO STOCK PURCHASE AGREEMENT
This First Amendment to Stock Purchase Agreement (“Amendment”) is made as of December 2, 2008,
by and among MasTec North America, Inc., a Florida corporation (“Buyer”), MasTec, Inc., a Florida
corporation (the “Guarantor”), Xxxxxx Construction, Inc., a North Dakota corporation (the
“Company”), Trust B under the Amended and Restated Living Trust of Xxx Xxxxxx dated February 2,
2000, a North Dakota trust (“QTIP”), Xxxxx X. Xxxxxx, a North Dakota resident (“Xxxxx”), Xxxxxx
Construction 2008 Irrevocable Trust, a North Dakota trust (“IDIT”), Xxx X. Xxxxxx, a North Dakota
resident (“Xxx”) and Xxx X. Xxxxxx 2008 Two-Year Irrevocable Annuity Trust, a North Dakota trust
(“GRAT”) (QTIP, Janet, IDIT, Xxx and GRAT taken together are the “Sellers”), and Xxx, as Sellers’
Representative (the “Sellers’ Representative”). Each of Buyer, Guarantor, Company, Sellers, and
Sellers’ Representative is a “Party” and together, the “Parties.”
R E C I T A L S
A. The Parties entered into a Stock Purchase Agreement dated as of October 4, 2008 (the
“Agreement”).
B. The Parties wish to amend the Agreement as set forth herein.
AGREEMENT
NOW, THEREFORE, in consideration of the premises and of the mutual covenants contained herein,
the Parties agree as follows:
1. Capitalized terms used but not defined in this Amendment have the respective meanings set
forth in the Agreement.
2. Section 1.1 of the Agreement is hereby amended as follows:
a. ““Actual Excess Indebtedness” means the amount, if any, by which Actual Indebtedness
exceeds Fifteen Million and NO/100ths Dollars ($15,000,000); provided that should Actual
Indebtedness be less than Fifteen Million and NO/100ths Dollars ($15,000,000), then
Actual Excess Indebtedness shall for all purposes be deemed to be zero.” shall be inserted before
the definition of “Adverse Consequence”.
b. The definition of “Base Purchase Price” is deleted in its entirety.
c. ““Cash Consideration” means Fifty Million and NO/100ths Dollars ($50,000,000).”
shall be inserted between the definition of “Cash” and the definition of “Cash Equivalents”.
d. ““Closing Value” means the sum of (a) the Cash Consideration, as adjusted pursuant to
Section 2.2(a); plus (b) Fifty Five Million and NO/100ths Dollars ($55,000,000);
plus (c) the product of (i) Seven Million Five Hundred Thousand (7,500,000) multiplied
by (ii) the Reference Price; plus (d) the Estimated Indebtedness.” shall be inserted between
the definition of “Closing Date” and the definition of “Consent”.
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e. ““Convertible Note” means that certain negotiable subordinated convertible note,
substantially in the form of Exhibit I, made by Buyer and payable to the Sellers’
Representative on behalf of Sellers in a principal amount of Fifty Five Million and
NO/100ths Dollars ($55,000,000).” shall be inserted between the definition of “Consent”
and the definition of “Contemplated Transactions”.
f. ““Earnout Consideration” means the amount, if any, payable by Buyer to Sellers determined
in accordance with Section 2.9.” shall be inserted between the definition of “Disclosure Schedules”
and the definition of “Xxxx Xxxxxx Expenses”.
g. The following definitions shall be inserted between the definition of “ERISA” and the
definition of “Excluded Accounts Receivable”:
i. ““Estimated Excess Indebtedness” means the amount, if any, by which Estimated Indebtedness
exceeds Fifteen Million and NO/100ths Dollars ($15,000,000); provided that should
Estimated Indebtedness be less than Fifteen Million and NO/100ths Dollars ($15,000,000),
then Estimated Excess Indebtedness shall for all purposes be deemed to be zero.”
ii. ““Exchange Act” means the Securities Exchange Act of 1934, as amended, or any successor
law, and regulations and rules promulgated thereunder or any successor law.”
h. ““MasTec Shares” means Seven Million Five Hundred Thousand (7,500,000) shares of
Guarantor’s common stock, $.10 par value per share.” shall be inserted between the definition of
“Maintenance Facility Purchase Agreement” and the definition of “Material Adverse Effect”.
i. The definition of “Permitted Encumbrances” is hereby amended to delete “and” before
subsection (g) thereof and add “or “h” Encumbrances related to the Scheduled Debt” after subsection
(g) and before the period at the end of such definition.
j. The following definitions shall be inserted between the definition of “Proceeding” and the
definition of “Related Person”:
i. ““Reference Price” means the closing price of Guarantor’s common stock, $.10 par value per
share, on the New York Stock Exchange on the last trading day immediately prior to the Closing
Date.”
ii. ““Registration Rights Agreement” means that certain Registration Rights Agreement,
substantially in the form of Exhibit J, by and among the Sellers, the Sellers’
Representative and the Guarantor.”
3. Section 1.2 of the Agreement is hereby amended as follows:
a. The term “Acquired Securities” is added to the glossary of defined terms between the term
“Accounts Receivable” and the term “Actual Cash, Cash Equivalents and Equipment Deposits” and the
location of such term is Section 4.33(a).
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b. The following terms are added to the glossary of defined terms between the term “Customer
Assets” and the term “Effective Date”.
i. the term “Earn-Out Payments” which is defined in Section 2.9(a);
ii. the term “Earn-Out Review Period” which is defined in Section 2.9(e); and
iii. the term “EBITDA” which is defined in Section 2.9(b).
c. The term “Escrow Amount” is deleted in its entirety from the glossary of defined terms.
d. The term “Escrow Shares” is added to the glossary of defined terms between the term “Escrow
Period” and the term “Estimated Closing Balance Sheet” and the location of such term is Section
2.3(a)(ii).
e. The term “Existing Operations” is added to the glossary of defined terms between the term
“Estimated Tax Obligations” and the term “Final Closing Adjustment” and the location of such term
is Section 2.9(b).
f. The term “Guarantor SEC Reports” is added to the glossary of defined terms between the term
“GRAT” and the term “Guarantor” and the location of such term is Section 5.8.
g. The term “SEC” is added to the glossary of defined terms between the term “Scheduled Debt”
and the term “Section 409A Plan” and the location of such term is Section 4.33(c).
4. Section 2.2 of the Agreement is deleted in its entirety and replaced with the following:
“2.2. Purchase Price. The aggregate consideration for the Shares (the
“Purchase Price”) is equal to:
(a) The Cash Consideration; minus the Estimated Excess Indebtedness;
minus the Estimated Employee Obligations; minus the Estimated Tax
Obligations; subject to adjustment as provided in Sections 2.4 and 2.5 below;
plus
(b) The MasTec Shares; plus
(c) The Convertible Note; plus
(d) The Earnout Consideration.”
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5. Section 2.3(a) of the Agreement is deleted in its entirety and replaced with the following:
“(a) Purchase Price. At the Closing, Buyer shall
(i) pay to Sellers the Cash Consideration as adjusted pursuant to Section
2.2(a), in cash;
(ii) cause Guarantor to issue the MasTec Shares to Sellers, less that
number of shares (if a fraction, rounded up to the next whole number) equal to (I)
the product of (A) 10% multiplied by (B) the Closing Value, divided
by (II) the Reference Price, which Sellers authorize Buyer to issue in the name
of the Sellers’ Representative and deposit in the Escrow Account on behalf of
Sellers pursuant to Section 2.3(b) below (the “Escrow Shares”); and
(iii) issue the Convertible Note to Sellers.
The Earnout Consideration shall be paid in accordance with Section 2.9.”
6. Section 2.3(b) of the Agreement is deleted in its entirety and replaced with the following:
“(b) Escrow. To secure the indemnification obligations of Sellers under
this Agreement, Buyer, Sellers and XX Xxxxxx Chase Bank, National Association, as
Escrow Agent, or any other Person willing to act as escrow agent mutually agreeable
to the Sellers’ Representative and Buyer (the “Escrow Agent”), at Closing shall
enter into an Escrow Agreement substantially in the form attached hereto as Exhibit
A (the “Escrow Agreement”). At the Closing, Buyer shall deposit the Escrow Shares
with the Escrow Agent to be held in an account (the “Escrow Account”) pursuant to
the terms of the Escrow Agreement. Except with respect to amounts that have been
previously paid from the Escrow Account to Buyer pursuant to the joint written
instruction of Sellers and Buyer, and except with respect to indemnity claims duly
made in accordance with ARTICLE 11 on or before March 31, 2010 (the “Escrow
Period”), all Escrow Shares shall be distributed to Sellers in accordance with the
Escrow Agreement within ten (10) Business Days after the expiration of the Escrow
Period. If any indemnification claim pursuant to ARTICLE 11 is satisfied from the
Escrow Account, the Escrow Shares shall be valued at the average closing price of
such shares on the New York Stock Exchange for the ten trading days immediately
prior to the disbursal of such Escrow Shares by the Escrow Agent to any Buyer
Indemnified Person.”
7. Section 2.5(b)(iii) of the Agreement is deleted in its entirety and replaced with the
following:
“(iii) (1) the Estimated Excess Indebtedness minus (2) the Actual Excess
Indebtedness; plus”
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8. Immediately following Section 2.8 of the Agreement the following Section 2.9 is added:
“2.9 Earn-out.
(a) As additional consideration for the purchase of the Shares, Buyer shall pay
Sellers contingent payments (the “Earn-Out Payments”) as determined pursuant to this
Section 2.9 at the times, in the manner and to the extent Earn-Out Payments are
earned pursuant to the following terms:
(i) with respect to the Company’s 2009 EBITDA, 50% of such EBITDA in excess of
Forty Million and NO/100ths Dollars ($40,000,000) will be paid to
Sellers; and
(ii) with respect to the Company’s 2010 EBITDA, 50% of such EBITDA in excess of
Forty Million and NO/100ths Dollars ($40,000,000) will be paid to
Sellers.
(iii) Notwithstanding the foregoing, if the Company’s EBITDA for 2009 is
negative (i.e. less than zero), for purposes of determining the 2010 Earn-Out
Payment, the Company’s 2010 EBITDA shall be reduced by the amount by which the
Company’s 2009 EBITDA was less than zero.
(b) For purposes of this Section 2.9, “EBITDA” means for calendar year 2009 or
calendar year 2010 the sum of (A) the net income or loss generated by the Company’s
operations as they exist on the Effective Date and as they may grow or contract
after the Effective Date in the normal course of business through internal growth
and not through acquisitions or other extraordinary or non-recurring transactions
(the “Existing Operations”), after deduction of all costs, expenses, interest,
taxes, depreciation, amortization, and other proper charges (including without
limitation (i) the cost of any bonuses or incentive payments earned with respect to
the applicable period (excluding any Earn-Out Payment), (ii) the cost of any equity
granted to employees (other than equity granted to the employees pursuant to the
employment agreements to be entered into pursuant to Section 8.9 hereof), or other
derivative securities granted during the applicable period, valued in accordance
with the Xxxxx-Xxxxxx model and amortized over the vesting period of any equity
granted, (iii) the cost of capitalized leases, amortized over the lease term,
calculated in accordance with GAAP and (iv) all interest and amortization with
respect to the Company’s Indebtedness) plus (B) (i) total interest expense with
respect to all outstanding Indebtedness of the Company, but only to the extent that
such interest was deducted in determining the Company’s net income or loss, (ii)
federal, state, or local income taxes and state franchise taxes to the extent
calculated based upon net income and not revenue, in each case of income and
franchise taxes attributable to the Existing Operations for such period and
determined in accordance with GAAP, but only to the extent that such taxes were
deducted in determining the Company’s net income or loss, (iii) all depreciation
with respect to the Company’s assets, but only to the extent that such depreciation
was deducted in determining the Company’s net income or loss, (iv) all amortization,
but only to the extent that such amortization was deducted in determining the
Company’s net income or loss, and (v) any retention bonus
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payments paid to employees of the Company pursuant to those retention bonus
agreements set forth in Section 4.14(i) of the Sellers’ Disclosure Schedule to the
extent that such bonuses were deducted in determining the Company’s net income or
loss; provided that no deduction shall be made for overhead expenses of Buyer or its
Affiliates other than for services and other expenses provided by Buyer and its
Affiliates to the Existing Operations such as group insurance policies which cover
the Existing Operations, legal, human resources, accounting or other services
provided to the Existing Operations.
(c) Except if there is a disagreement as described in subsection (e), Buyer
will pay to Sellers the Earn-Out Payments with respect to 2009 and 2010, if any
Earn-Out Payments are owed, no later than April 15th of the next
succeeding year in cash in immediately available funds.
(d) Sellers will be entitled to the Earn-Out Payments, if earned, whether or
not the Sellers’ Representative remains employed by Buyer or the Company; provided
that nothing in this Section 2.9 constitutes an agreement or understanding to employ
the Sellers’ Representative for a term of years or otherwise to guarantee the
Sellers’ Representative employment with Buyer or the Company.
(e) On or prior to March 15th of 2010 and 2011, Buyer will calculate
the Earn-Out Payment, if any, for the prior calendar year and provide the Sellers’
Representative with Buyer’s calculation of the Earn-Out Payment together with
reasonable supporting documentation. For thirty (30) days following the delivery of
the Earn-Out Payment calculation to the Sellers’ Representative (the “Earn-Out
Review Period”), the Sellers’ Representative may review the Earn-Out Payment
calculation and other documentation. The Sellers’ Representative must notify Buyer,
in writing, of any disagreement with the Earn-Out Payment calculation or
documentation and the basis for the disagreement no later than the end of the
Earn-Out Review Period. If Sellers’ Representative does not notify Buyer of a
disagreement by the end of the Earn-Out Review Period, the Earn-Out Payment
calculation prepared by Buyer will be conclusive. If the Sellers’ Representative
timely notifies Buyer of a disagreement regarding the Earn-Out calculation and the
parties are unable, through good faith negotiation, to resolve the disagreement
within thirty (30) days after the end of the Earn-Out Review Period, Buyer and the
Sellers’ Representative shall submit the items in dispute to the Neutral Accountant
(which shall act as experts and not as arbitrators) for resolution. Buyer and the
Sellers’ Representative shall instruct the Neutral Accountant to deliver its written
determination to Buyer and the Sellers’ Representative no later than 30 days after
the dispute is referred to the Neutral Accountant. The Neutral Accountant’s
determination shall be conclusive and binding upon Buyer and the Sellers’
Representative. In resolving any disputed item, the CPA Firm may not assign a value
to the disputed item that is greater than the greatest value claimed by either party
or less than the smallest value claimed by either party for the item. The fees and
disbursements of the Neutral Accountant shall be borne (i) by the Sellers’
Representative in the proportion that
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the aggregate dollar amount of the disputed items that are unsuccessfully
disputed by the Sellers’ Representative (as finally determined by the Neutral
Accountant) bears to the aggregate dollar amount of all disputed items and (ii) by
Buyer in the proportion that the aggregate dollar amount of the disputed items that
are successfully disputed by the Sellers’ Representative (as finally determined by
the Neutral Accountant) bears to the aggregate dollar amount of all disputed items.
For example, if the parties dispute $1,000,000 of an Earn-Out Payment, the Neutral
Accountant determines that $400,000 should be included in the Earn-Out Payment and
$600,000 should be excluded and the Neutral Accountant’s fees are $50,000, then (i)
the Sellers’ Representative shall pay $30,000 (60%) of such fees and (ii) Buyer
shall pay $20,000 (40%) of such fees. Buyer and the Sellers’ Representative shall
make readily available to the Neutral Accountant all relevant books and records and
any work papers (including those of the parties’ respective accountants, to the
extent permitted by such accountants) relating to the determination of the Earn-Out
Payment and all other items reasonably requested by the Neutral Accountant in
connection therewith.
(f) Following the Closing Date, Buyer will continue to operate the Company
during the period for which the Sellers are entitled to Earn-Out Payments
substantially as previously operated, subject to the business requirements of Buyer
and its Affiliates taken as a whole. Buyer will be permitted, following the Closing
Date, to make changes in its sole discretion to the operations, corporate
organization, personnel, accounting practices, and other aspects of the Company and
the Business so long as such changes are made in good faith, in the best interests
of the Company, Buyer, and their respective Affiliates or to conform to standard
practices applicable generally to Guarantor and its Affiliates, and not with the
specific intent of reducing amounts that otherwise would be payable to Sellers.
(g) No Earn-Out Payments will accrue or be payable for any time period
commencing on the earliest date that the Sellers’ Representative violates any of the
provisions of Sections 7.1 or 7.2.”
9. Section 3.1 of the Agreement is deleted in its entirety and replaced with the following:
“3.1. Closing. The purchase and sale (the “Closing”) provided for in this
Agreement will take place at 9:00 a.m. local time at Buyer’s offices at 000 X.
Xxxxxxx Xxxx, 00xx Xxxxx, Xxxxx Xxxxxx, Xxxxxxx 00000 on the date that is three (3)
Business Days following the satisfaction or waiver of the conditions set forth in
ARTICLE 8 and ARTICLE 9 (other than delivery of items to be delivered at the Closing
and other than satisfaction of those conditions that by their nature are to be
satisfied at the Closing, it being understood that the occurrence of the Closing
shall remain subject to the delivery of such items and satisfaction or waiver of
such conditions at the Closing) (the date of such satisfaction, the “Satisfaction
Date”); provided however; that such date shall not be prior to the earlier of (i)
the ninetieth day after the date hereof (the “Ninetieth Day”) or (ii) a
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date set by Buyer upon no less than five (5) Business Days prior written notice, or
at such other time as the Parties may agree in writing. For purposes of clarity, if
the Satisfaction Date has occurred at least three (3) Business Days prior to the
Ninetieth Day and the Buyer has not set a prior date for Closing pursuant to clause
(ii) set forth in the previous sentence, then all of the parties shall be obligated
to Close on the Ninetieth Day and any party which has not carried out its
obligations on such date shall be in breach of this Agreement. By agreement of the
parties the Closing may take place by delivery of this Agreement and the other
documents to be delivered at the Closing by facsimile or other electronic
transmission. Subject to the provisions of ARTICLE 10, failure to consummate the
purchase and sale provided for in this Agreement on the date and time and at the
place determined pursuant to this Section 3.1 will not result in the termination of
this Agreement and will not relieve any party of any obligation under this
Agreement.”
10. Section 3.2(a)(i) of the Agreement is deleted in its entirety and replaced with “(i) the
Escrow Agreement executed by Sellers together with stock powers executed in blank by Sellers
authorizing the Escrow Agent to transfer the Escrow Shares in accordance with the terms of the
Escrow Agreement;”.
11. Section 3.2(a)(iii) of the Agreement is deleted in its entirety and replaced with “(iii) a
receipt for the Purchase Price delivered at Closing less the Escrow Shares;”.
12. Section 3.2(a)(iv) of the Agreement is deleted in its entirety and replaced with “(iv) a
receipt from the Escrow Agent for the Escrow Shares;”.
13. Section 3.2(a)(xiii) is amended to delete the word “and” at the end of such section.
14. Section 3.2(a)(xiv) is deleted to replace the period at the end of such section with “;
and”.
15. The following subsection (xv) is added to the end of Section 3.2(a) of the Agreement:
“(xv) the Registration Rights Agreement executed by Sellers and the Sellers’
Representative.”
16. Section 3.2(b)(ii) of the Agreement is deleted in its entirety and replaced with “(ii) the
Purchase Price (as adjusted pursuant to Section 2.4) to be delivered at Closing less the Escrow
Shares;”.
17. Section 3.2(b)(iii) of the Agreement is deleted in its entirety and replaced with “(iii)
to the Escrow Agent, the Escrow Shares for deposit in the Escrow Account;”.
18. Section 3.2(b)(vi) is amended to delete the word “and” at the end of such section.
19. Section 3.2(b)(vii) is deleted to replace the period at the end of such section with “;
and”.
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20. The following subsection (viii) is added to the end of Section 3.2(b) of the Agreement:
“(xv) the Registration Rights Agreement executed by the Guarantor.”
21. Immediately following Section 4.32 of the Agreement the following Sections 4.33 and 4.34
are added:
“4.33 Securities Law Matters.
(a) Each Seller acknowledges that the MasTec Shares, the Convertible Note, any
shares of Guarantor common stock issued upon conversion of the Convertible Note and
any other shares of Guarantor’s common stock that may be acquired by Sellers
pursuant to this Agreement (the “Acquired Securities”) are restricted shares that
are not registered under the Securities Act or any applicable state securities laws
and are being issued by the Guarantor to the Sellers in reliance upon the Section
4(2) private placement exemption contained in the Securities Act.
(b) Each Seller acknowledges and agrees that the Acquired Securities are being
acquired for such Seller’s own account and not with a view to, or intention of,
distribution thereof in violation of the Securities Act, or any applicable state
securities laws, and the Acquired Securities will not be disposed of by Sellers in
contravention of the Securities Act or any applicable state securities laws.
(c) Each Seller is an “accredited investor” as defined in Rule 501(a) under the
Securities Act, and is, or in the case of any Seller which is a trust, is directed
by a person who is, sophisticated in financial matters and has such knowledge and
experience in financial and business matters that he or she is able to evaluate the
risks and benefits of the investment in the Acquired Securities and make an informed
investment decision.
(d) Each Seller has had an opportunity to ask questions and receive answers
concerning Buyer, Guarantor and the Acquired Securities and has had full access to
such other information concerning Buyer, Guarantor and the Acquired Securities as
such Seller has requested or which has been filed by Guarantor with the Securities
and Exchange Commission (the “SEC”).
(e) Each Seller has discussed with and relied upon the advice of its
independent legal counsel, tax and financial advisors with regard to the meaning and
legal consequences of such Seller’s representations and warranties contained in this
Section 4.33 and the considerations involved in making an investment in the Acquired
Securities, and such Seller understands that Buyer and Guarantor are relying on the
information set forth herein.
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(f) Each Seller understands that he she or it must bear the economic risk of
his, her or its acquisition of the Acquired Securities for an indefinite period of
time because (i) the acquisition of Acquired Securities pursuant to this Agreement
has not been registered under the Securities Act and applicable state securities
laws; and (ii) the Acquired Securities may therefore not be sold, transferred,
pledged, or otherwise disposed of unless subsequently so registered or, in the
opinion (reasonably satisfactory to Buyer and Guarantor) of counsel (reasonably
satisfactory to Buyer and Guarantor) registration under the Securities Act or any
applicable state securities laws is not required.
(g) Each Seller understands that the Acquired Securities will bear a
restrictive legend prohibiting the transfer thereof except in compliance with the
applicable state and federal securities laws, this Agreement and the Escrow
Agreement, if applicable, and may not be transferred of record except in compliance
therewith.
“4.34 Legends. It is understood that the certificates evidencing the MasTec
Shares, the Convertible Note and any other shares of Guarantor common stock issued
upon conversion of the Convertible Note may bear one or all of the following
legends:
(a) “These securities have not been registered under the Securities Act of
1933, as amended. They may not be sold, offered for sale, pledged or hypothecated
in the absence of a registration statement in effect with respect to the securities
under such Act or an opinion of counsel satisfactory to the Company that such
registration is not required or unless sold pursuant to Rule 144 of such Act.”
(b) “The sale or other disposition of any of the securities represented by this
certificate is restricted by a certain Stock Purchase Agreement, as amended from
time to time, by and among this Company, MasTec North America, Inc., Xxxxxx
Construction, Inc., Trust B under the Amended and Restated Living Trust of Xxx
Xxxxxx dated February 2, 2000, Xxxxx X. Xxxxxx, Xxxxxx Construction 2008 Irrevocable
Trust, Xxx X. Xxxxxx, and Xxx X. Xxxxxx 2008 Two-Year Irrevocable Annuity Trust. A
copy of the Stock Purchase Agreement is available for inspection during normal
business hours at the principal executive office of this Company and will be
furnished to the record holder of this certificate without charge upon written
request to the Company at its principal place of business.”
(c) Any legend required by law or applicable securities laws, including,
without limitation, any legend required by the Business Corporation Act of the State
of Florida.”
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22. Immediately following Section 5.7 of the Agreement the following Sections 5.8 and 5.9 are
added:
“5.8 SEC Filings; Financial Statements. Guarantor has filed all forms,
reports and documents required to be filed with the SEC (including all amendments
and supplements thereto), including (i) its Annual Report on Form 10-K for the
fiscal year ended December 31, 2007, (ii) its Quarterly Report on Form 10-Q for the
quarter ended Xxxxx 00, 0000, (xxx) its Quarterly Report on Form 10-Q for the
quarter ended June 30, 2008, and (iv) its Quarterly Report on Form 10-Q for the
quarter ended September 30, 2008 ((i) through (iv) collectively, the “Guarantor SEC
Reports”). The Guarantor SEC Reports were prepared and complied in all material
respects when filed with the requirements of the Exchange Act.
5.9 Acquired Securities. The Acquired Securities when issued in accordance
with this Agreement, and, in the case of any shares of Guarantor common stock issued
upon conversion of the Convertible Note, the Convertible Note, will be duly
authorized, validly issued, fully paid and nonassessable, and free and clear from
any Encumbrances except restrictions on transfer thereof under federal and state
securities laws, this Agreement, the Escrow Agreement, if applicable, and any
Encumbrances created by or imposed thereupon by Sellers.”
23. Section 6.2(b)(vii)(A) of the Agreement is deleted in its entirety and replaced with
“(vii)(A) incur any Indebtedness other than in the Ordinary Course of Business (except additional
Indebtedness under existing or new Indebtedness from commercial lenders which (i) will cause the
Company’s total Indebtedness to be up to $15,000,000, (ii) will be unsecured or secured only by
equipment, (iii) the principal of which is payable no sooner than December 31, 2010, and (iv) the
interest rate of which is no higher than 8%) or make any payments on any Existing Indebtedness
other than in the Ordinary Course of Business,”.
24. Immediately following Section 7.5 of the Agreement the following Sections 7.6 and 7.7 are
added:
“7.6 Restrictions on Transfer. The MasTec Shares, the Convertible Note and
any shares of Guarantor common stock issued upon conversion of the Convertible Note
will not be sold, transferred, pledged, assigned or otherwise encumbered or disposed
until the later of (i) the six month anniversary of the Closing Date, or (ii) when,
in the opinion (reasonably acceptable to the Buyer and Guarantor) of counsel
(reasonably acceptable to the Buyer and Guarantor), such restrictions are no longer
required in order to assure compliance with the Securities Act. Notwithstanding the
foregoing, in addition to the foregoing restrictions, the Escrow Shares shall not be
sold, transferred, pledged, assigned or otherwise encumbered or disposed until
released from the Escrow Account at the end of the Escrow Period. Whenever such
restrictions shall cease and terminate as to any MasTec Shares, the Convertible Note
or any shares of Guarantor common stock issued upon conversion of the Convertible
Note, the holder thereof shall be entitled to receive from Buyer, without expense,
new certificates not bearing the legends set forth in Section 4.34.
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7.7 Compliance with Reporting Requirements. As of the Closing Date the
Guarantor will have complied during the twelve months ending on the Closing Date and
the Guarantor agrees to comply with the reporting requirements of Section 13 and
Section 15(d) of the Exchange Act until the later of (i) the five year anniversary
of the date hereof, or (ii) the date that the Convertible Note is no longer
outstanding.”
25. Section 11.4(a) of the Agreement is deleted in its entirety and replaced with the
following:
“(a) Indemnity Cap. Sellers’ liability for indemnification pursuant to
Section 11.2(a) of this Agreement, and Buyer’s liability for indemnification
pursuant to Section 11.3(a) shall be limited in total and in the aggregate to
fifteen percent (15%) of the Closing Value (the “Indemnity Cap”); provided, however,
that the Indemnity Cap shall not apply to (1) claims arising under the
representations and warranties of Sellers listed in Section 11.1(b)(i) or Section
11.1(b)(ii), (2) claims for indemnification with respect to the Disclosed Matters or
(3) claims for indemnification to the extent based on fraud or intentional
misrepresentation.”
26. Immediately following Section 11.9 of the Agreement the following Section 11.10 is added:
“11.10 Satisfaction of Indemnity Claims. To the extent any amount is owed
by Sellers to any Buyer Indemnified Person pursuant to Section 11.2(a), then such
amount will first be satisfied from the Escrow Account in accordance with the terms
of the Escrow Agreement. To the extent the Escrow Account is insufficient to
satisfy all such amounts owed, any excess shall be satisfied, at the election of the
Sellers’ Representative in one or more of the following: (i) from the MasTec Shares,
(ii) by reduction of the principal amount of the Convertible Note (to the extent
held by the Sellers’ Representative on behalf of the Sellers), or (iii) in cash (or
if no election is made by the Sellers’ Representative, in one or more of the
foregoing at the option of Buyer). Any amount satisfied in MasTec Shares shall be
valued at the average closing price of such shares on the New York Stock Exchange
for the ten trading days immediately prior to the delivery of such shares to the
Buyer Indemnified Person. Any amount satisfied by reduction of the principal amount
of the Convertible Note, shall be satisfied by a dollar for dollar reduction to the
principal amount of such note. Notwithstanding the foregoing and for purposes of
clarity, to the extent any Final Closing Adjustment is owed by Sellers to Buyer,
such Final Closing Adjustment may only be satisfied in cash in accordance with
Section 2.5(f).”
27. Immediately following Section 12.5(b) of the Agreement the following Section 12.5(c) is
added:
“(c) Convertible Note. For the convenience of the Parties the
Convertible Note shall be issued in the name of the Sellers’ Representative on
12
behalf of all of the Sellers. As the Holder of the Convertible Note, the
Sellers’ Representative shall have the power to take all actions on behalf of the
Sellers with respect to the Convertible Note and Buyer and Guarantor may rely upon
all actions taken by the Sellers’ Representative in connection with the Convertible
Note in accordance with this Section 12.5.”
28. Section 12.17 of the Agreement is deleted in its entirety and replaced with the following:
“12.17. Limited Guarantee. The Guarantor hereby unconditionally and
absolutely guarantees the full and punctual payment of all payment obligations of
Buyer before, after and at the Closing, including all obligations of Buyer under the
Convertible Note; provided, that if the Closing does not occur, under all
circumstances Guarantor’s Liability hereunder shall be limited to the Termination
Fee, to the extent unpaid by Buyer.”
29. The Table of Contents is amended to reflect the sections and subsections added to the
Agreement by this Amendment.
30. The Table of Exhibits is amended to add “Exhibit I,” “Form of Convertible Note” and
“Exhibit J,” “Form of Registration Rights Agreement”.
31. The form of Escrow Agreement attached to the Agreement as Exhibit A is replaced by the
Escrow Agreement attached hereto as Exhibit A.
32. The form of Closing Certificate attached to the Agreement as Exhibit B is replaced by the
form of Closing Certificate attached hereto as Exhibit B.
33. The form of Post-Closing Certificate attached to the Agreement as Exhibit C is replaced by
the form of Post-Closing Certificate attached hereto as Exhibit C.
34. The Form of Convertible Note attached hereto as Exhibit D is Exhibit I to the Agreement.
35. The form of Registration Rights Agreement attached hereto as Exhibit E is Exhibit J to the
Agreement.
29. Except as specifically amended hereby, the Agreement is and remains unmodified and in full
force and effect and is hereby ratified and confirmed.
30. Each of Sections 12.7 and 12.8 is by this reference incorporated into this Amendment as if
the text thereof was set forth in full herein and shall apply fully to this Amendment.
31. This Amendment may be executed in counterparts, each of which shall be deemed an original,
but all of which together shall constitute one and the same instrument.
[Remainder of page intentionally left blank]
13
IN WITNESS WHEREOF, the parties have executed and delivered this Amendment as of the date
first set forth above.
| Buyer: | MASTEC NORTH AMERICA, INC. | |||||
| By: | /s/ Xxxxx Xxxxxxx | |||||
| Name: | Xxxxx Xxxxxxx | |||||
| Title: | Executive Vice President Mergers and | |||||
| Acquisitions | ||||||
| Guarantor: | MASTEC, INC. | |||||
| By: | /s/ Xxxxx Xxxxxxx | |||||
| Name: | Xxxxx Xxxxxxx | |||||
| Title: | Executive Vice President Mergers and | |||||
| Acquisitions | ||||||
| Company: | XXXXXX CONSTRUCTION, INC. | |||||
| By: | /s/ Xxx X. Xxxxxx | |||||
| Name: | Xxx X. Xxxxxx | |||||
| Title: | President | |||||
| Sellers: | Trust B under the Amended and Restated Living Trust of Xxx Xxxxxx dated February 2, 2000 |
|||||
| By: | /s/ Xxx X. Xxxxxx | |||||
| Name: | Xxx Xxxxxx | |||||
| Its: | Trustee |
| Xxxxxx Construction 2008 Irrevocable Trust | ||||||
| By: | /s/ Xxx X. Xxxxxx | |||||
| Name: | Xxx Xxxxxx | |||||
| Its: | Administrative Trustee | |||||
| By: | /s/ Xxxxx Xxxxxx | |||||
| Name: | Xxxxx Xxxxxx | |||||
| Its: | Independent Trustee | |||||
| /s/ Xxxxx X. Xxxxxx | ||||||
| Xxxxx X. Xxxxxx, an individual | ||||||
| /s/ Xxx X. Xxxxxx | ||||||
| Xxx X. Xxxxxx, an individual | ||||||
| Xxx X. Xxxxxx Two-Year Irrevocable Annuity Trust | ||||||
| By: | /s/ Xxx X. Xxxxxx | |||||
| Name: | Xxx Xxxxxx | |||||
| Its: | Trustee | |||||
| By: | /s/ Xxxxx Xxxxxx | |||||
| Name: | Xxxxx Xxxxxx | |||||
| Its: | Independent Trustee | |||||
| Sellers’ Representative: | /s/ Xxx X. Xxxxxx | |||||
| Xxx X. Xxxxxx, as Sellers’ Representative | ||||||
