September 21, 1999
ECT Merchant Investments Corp. ('EMIC')
(as successor to Enron Capital & Trade Resources Corp ('ECT'))
1400 Smith Street
Houston, Texas 77002
Joint Energy Development Investments II Limited Partnership ('JEDI-II')
c/o Enron Corp.
1400 Smith Street
Houston, Texas 77002
Attention: Robert Greer
Re: Certain Waivers in connection with transactions between Quanta
Services, Inc. ('Quanta') and UtiliCorp United Inc. ('UtiliCorp')
Ladies and Gentlemen:
On this date, Quanta and UtiliCorp are entering into a Securities Purchase
Agreement and related transaction documents (collectively, the 'Transaction
Documents'), executed copies of which have been provided to EMIC and JEDI-II and
are attached in their final form hereto as Exhibit A. Pursuant to the
Transaction Documents, among other things, (i) UtiliCorp will acquire 1,860,000
shares of Quanta's Series A Convertible Preferred Stock (the 'Preferred Stock')
and (ii) UtiliCorp and Quanta will enter into a Management Services Agreement of
even date (the 'Management Agreement'). The Preferred Stock is convertible by
the holders thereof (the 'Preferred Holder') into Quanta's common stock ('Common
Stock') and pursuant to the Management Agreement, Quanta is obligated to pay to
UtiliCorp certain management fees (collectively, the 'Fees').
Quanta and UtiliCorp are jointly requesting that you grant the specific waivers
described below in order for Quanta and UtiliCorp to enter into and perform
certain aspects of the
ECT Merchant Investments Corp.
Joint Energy Development Investments II
Limited Partnership
September 21, 1999
Page 2
Transaction Documents. The terms of the waivers are set forth below, and each
waiver (i) shall be strictly construed in accordance with its express terms,
(ii) shall be effective only in the specific instance and for the specific
purpose described below and (iii) shall only be effective with respect to those
terms and provisions set forth in the attached Transaction Documents.
The requested waivers are as follows:
1. Preemptive Rights. You waive any and all rights pursuant to Section
-----------------
2.06(b) of that certain Securities Purchase Agreement dated September 29,
1998 among Quanta, JEDI-II and ECT, as amended on this date (the 'SPA'),
solely with respect to (i) Quanta's issuance to UtiliCorp of the Preferred
Stock and (ii) the Preferred Holder's conversion of the Preferred Stock
into Common Stock; both such issuance and any such conversions to be done
strictly in accordance with the terms of the Transaction Documents.
2. Regularly Scheduled Dividends. Notwithstanding Section 7.02 of the SPA,
-----------------------------
Quanta may pay the Preferred Holder each regularly scheduled dividend (and
any arrearage with respect to regularly scheduled dividends) provided for
in Section 2 of the Certificate of Designation, Rights, and Limitations of
the Preferred Stock included within the Transaction Documents if, but only
if, at the times of declaration and of payment of any such dividend (and/or
arrearage with respect to any such dividend), with or without notice or
lapse of time, or both, no 'Default'or 'Event of Default' exist, and no
'Default' or 'Event of Default' would result from or would exist
immediately after any such payment, as 'Default' and 'Event of Default' are
defined in the SPA.
3. Management Fees. Notwithstanding Section 7.06 of the SPA, Quanta and
---------------
UtiliCorp may enter into the Management Agreement and the other
transactions contemplated by the Transaction Documents; provided, however,
that Quanta may pay the regularly scheduled Fee thereunder in accordance
with the Management Agreement if, but only if, at the time of each payment,
with or without notice or lapse of time, or both, no Default or Event of
Default exists and no Default or Event of Default would result from or
would exist immediately after any such payment of any Fee.
ECT Merchant Investments Corp.
Joint Energy Development Investments II
Limited Partnership
September 21, 1999
Page 3
4. Certain Demand Registrations. Notwithstanding Section 2.01(d) of the
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Registration Rights Agreement dated as of September 29, 1998, as amended on
this date (the 'Rights Agreement'), among Quanta, JEDI-II and ECT, Quanta
may grant to UtiliCorp the demand registration rights specified in Section
2.1 of the Investor's Rights Agreement dated of even date herewith between
Quanta and UtiliCorp (the 'Investor's Rights Agreement') included within
the Transaction Documents; provided, however, that such consent is based on
the agreement of Quanta and UtiliCorp, which agreement will survive for so
long as the Purchasers, as such term is defined in the SPA, or their
successors and assigns hold Registrable Securities as such term is defined
in the Rights Agreement, that none of the provisions in Article II of the
Investor's Rights Agreement, including the third party beneficiary rights
granted to you and your successors, may hereafter be amended, modified,
expanded or waived without the consent of the Purchasers or their
successors and assigns; and
5. Certain Piggy-Back Registrations. Notwithstanding Section 2.02 of the
--------------------------------
Rights Agreement, Quanta may grant to UtiliCorp the piggy-back registration
rights specified in Section 2.2 of the Investor's Rights Agreement.
ECT Merchant Investments Corp.
Joint Energy Development Investments II
Limited Partnership
September 21, 1999
Page 4
The parties hereto expressly acknowledge that the terms of this letter agreement
may be contradictory or in addition to the terms and provisions of the
Transaction Documents and the Rights Agreement and that the terms of this letter
agreement shall control with respect to the subject matter contained herein.
Please acknowledge your consent to this waiver by executing this letter in the
space provided below and returning it to Quanta Services, Inc., 1360 Post Oak
Blvd., Suite 2100, Houston, Texas 77056, attention General Counsel.
Very truly yours,
QUANTA SERVICES, INC.
By: /s/ Brad Eastman
_________________________
Name: Brad Eastman
_______________________
Title: Vice President
______________________
UTILICORP UNITED INC.
By: /s/ Robert Green
_________________________________
Name:
_________________________________
Title:
________________________________
ECT Merchant Investments Corp.
Joint Energy Development Investments II
Limited Partnership
September 21, 1999
Page 5
ACKNOWLEDGED AND ACCEPTED:
ECT MERCHANT INVESTMENTS CORP.
By: /s/ Robert Greer
______________________________
Name: Robert Greer
____________________________
Title: Vice President
___________________________
JOINT ENERGY DEVELOPMENT INVESTMENTS II
LIMITED PARTNERSHIP
By: Enron Capital Management II Limited
Partnership, its General Partner
By: Enron Capital II Corp., its
General Partner
By: /s/ Raymond M. Bowen, Jr.
_________________________________
Name: Raymond M. Bowen, Jr.
_______________________________
Title: Vice President and Treasurer
______________________________
ECT Merchant Investments Corp.
Joint Energy Development Investments II
Limited Partnership
September 21, 1999
Page 6
Exhibit A
Execution Versions of Transaction Documents