LOAN AGREEMENT
This Loan Agreement is entered into on this 14th day of July,
1995, by and between Devono Company Limited, a British Virgin
Islands corporation (the "Borrower"), and MasTec, Inc. , a
Delaware corporation with its principal place of business located
at 8600 N.W. 36th Street, 8th Floor, Miami, Florida 33166 (the
"Lender")
WITNESSETH:
WHEREAS, the Borrower owns all of the issued and outstanding
capital stock of Cempresa, S.A., an Ecuadorian corporation
("Cempresa");
WHEREAS, Cempresa owns 13,157,942 shares or approximately fifty-
two and six-tenths percent (52.6%) of the issued and outstanding
shares of the common stock of Consorcio Ecuatoriano de
Telecomunicaciones S.A. ("Conecell"), an Ecuadorian corporation
licensed to operate a mobile cellular telecommunications system
and an international teleport system in the Republic of Ecuador;
WHEREAS, the Borrower wishes to obtain a loan from the Lender; and
WHEREAS, the Lender is willing to provide a loan to the Borrower,
subject to the terms and conditions set forth in this Agreement;
NOW, THEREFORE, for and in consideration of the above premises,
the mutual covenants and agreements contained herein and other
good and valuable consideration, the receipt of which is hereby
acknowledged by the parties, the Borrower and the Lender agree as
follows:
ARTICLE I
DEFINITIONS AND ACCOUNTING TERMS
Section 1.1 Defined Terms. As used in this Agreement, the
following terms have the following meanings (terms defined in the
singular shall have the same meaning when used in the plural and
vice versa):
"Agreement" means this Loan Agreement, as amended, supplemented,
or modified from time to time.
"Cempresa Shares" means two-thousand (2,000) shares representing
forty percent (40%) of the issued and outstanding common stock
of Cempresa.
"Conecell Shares" means thirteen million one hundred fifty
seven thousand nine hundred forty-two (13,157,942) shares
representing fifty-two and six tenths percent (52.6%) of the
issued and outstanding common stock of Conecell.
"Fideicomiso" means that certain trust agreement to be
entered into simultaneously herewith by and between the Borrower
and the Lender, whereby the Borrower shall place the Cempresa
Shares in an Ecuadorian trust for the benefit of Lender.
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"Lender" means MasTec, Inc.
"Loan" means the Twenty-Five Million Dollars ($25,000,000)
being provided by Lender to Borrower under this Agreement.
"Loan Documents" means this Loan Agreement, the Note, and
all other documents evidencing this transaction.
"Non-Recourse Promissory Note" shall have the meaning
assigned to such term in Section 2.4.
"Dollars" or "$" means the lawful currency of the United
States of America.
"Person" means an individual, partnership, corporation,
business trust, joint stock company, trust, unincorporated
association, joint venture, governmental authority, or other
entity of whatever nature.
ARTICLE II
AMOUNT AND TERMS OF THE LOAN
Section 2.1 Loan; Funding. The Lender agrees on the terms
and conditions hereinafter set forth, to make a Loan to the
Borrower on the date of this Agreement in the amount of Twenty-
Five Million Dollars ($25,000,000). The funding of the Loan by
the Lender shall occur upon the execution- of this Agreement in
the following manner:
(i) delivery of a check or wire transfer payable to the Borrower
in the amount of Five Million Dollars ($5,000,000); and
(ii) delivery of a Letter of Credit issued by Shawmut Bank
Connecticut, N.A. for the benefit of the Borrower in the
amount of Twenty Million Dollars ($20,000,000) and in the
form of Exhibit "All attached hereto and made a part hereof
(the "Letter of Credit").
The Lender acknowledges and agrees that the amount payable under
Letter of Credit represents a portion of the Loan which has been
funded as of the date of this Agreement and that the Lender shall
not have the right, under any circumstances, to interfere in any
way with the payment of the Letter of Credit pursuant to its
terms. The Lender hereby waives and relinquishes any and all
rights of any kind to exercise set-off or pose counterclaims with
regard to the Letter of Credit and shall not obstruct the payment
under the Letter of Credit even if an Event of Default (as
defined below) were to occur under this Agreement.
Section 2.2 Payment. The Loan and all accrued and unpaid
interest thereon shall be due and payable in full upon the
expiration of the Term, as defined herein in Section 2.2;
provided however, that the Loan and all accrued and unpaid
interest thereon (i) shall be due and payable in full upon the
Sale of the Conecell Shares as described in Section 2.7; and (ii)
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shall be deemed paid in full upon the transfer to the Lender of
the Cempresa Shares. Provided that the Sale has not commenced as
contemplated in Section 2.7 herein, the Lender shall have the
option to accept the Cempresa Shares in satisfaction of the Loan
instead of payment in dollars in the amount set forth herein.
Section 2.3 No Prepayment. The Borrower shall not have the
right to prepay the Loan.
Section 2.4 Interest. The Lender shall be entitled to interest
on the unpaid principal amount of the Loan outstanding during the
initial Term of this Agreement and any extensions thereof, as
follows:
(i) During the initial Term, the first one hundred and eighty
(180) days of this Agreement, the Loan shall bear interest
at the annual rate of fifteen percent (15%).
(ii) In the event that this Agreement is extended for an
additional period of ninety (90) days by the Borrower, as
provided herein, the Loan shall bear interest at the annual
rate of seventeen and one half percent (17.5%)
(iii) In the event that this Agreement is extended for the
second period of ninety (90) days and the final period of
forty five (45) days by the Borrower, as provided herein,
the Loan shall bear interest at the annual rate of seventeen
and one half percent (17.5%).
Interest shall be calculated on the basis of a year of three
hundred sixty five (365) days for the actual number of days
elapsed. Interest shall be due and payable on the Maturity Date
(as defined in Section 2.5 below).
In no contingency or event whatsoever, whether by reason of
advancement of the Loan or otherwise, shall the amount paid or
agreed to be paid to Lender for the use, forbearance or detention
of money advanced hereunder exceed the highest lawful rate
permissible under any law which a court of competent jurisdiction
may deem applicable hereto. In the event that such a court
determines that Lender has charged or received interest hereunder
in excess of the highest applicable rate, such rate shall
automatically be reduced to the maximum rate permitted by law and
Lender shall promptly refund to Borrower any interest received by
it in excess of the maximum lawful rate. It is the intent hereof
that Borrower not pay or contract to pay, and that Lender not
receive or contract to receive, directly or indirectly in any
manner whatsoever, interest in excess of that which may be paid
by Borrower under applicable law.
Section 2.5 Term. This Agreement shall be for an initial
term of six (6) months; provided, however, that the initial term
may be extended by the Borrower for two (2) separate ninety (90)
day-periods by providing the Lender with five (5) days written
notice prior to the expiration of an applicable term; provided,
however, that the Borrower may extend this Agreement for an
additional forty five (45) days in the event that Cempresa shall
have entered into an agreement with a purchaser to sell the
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Conecell Shares prior to July 14, 1996 (collectively, the
"Term"). As used in this Agreement, the "Maturity Date" means
the last day of the Term.
Section 2.6 Note. The Loan made by the Lender under this
Agreement shall be evidenced by a Non-Recourse Promissory Note of
the Borrower (the "Note") in the principal amount of Twenty Five
Million Dollars ($25,000,000), dated as of the date of this
Agreement. As described in the Note, in the event of any default
by Borrower under this Agreement or the Note, the Lender's sole
recourse shall be the Cempresa Shares.
Section 2.7 Sale of Conecell Shares. The Lender
acknowledges and agrees that the Borrower, in its sole and
absolute discretion, may authorize and cause Cempresa to sell the
Conecell Shares, subject only to the conditions set forth in
Section 2.8 below. In the event that the Borrower decides to
sell the Conecell Shares, the Lender agrees to cooperate with
regard to such sale and to execute any documents reasonably
deemed necessary or appropriate by the Borrower to effectuate the
sale. If the Borrower sells the Conecell Shares during the Term
(the "Sale") , at the closing of the Sale the Borrower shall pay
the Lender, in satisfaction of any and all amounts owed by
Borrower under this Agreement, the following sum: (a) the
outstanding principal amount of the Loan plus accrued and unpaid
interest thereon; and (b) the net proceeds of the Sale
attributable to the Cempresa Shares after deducting (i) the
amount payable in (a) above, and (ii) fifty percent (50%) of the
difference between the amount payable in (a) above and the net
proceeds of the Sale attributable to the Cempresa Shares. As
used in this Agreement, "net proceeds" means the gross proceeds
received by Cempresa from the Sale of the Conecell Shares, less
all applicable fees, taxes, commissions and expenses relating to
the Sale.
Section 2.8 Lender's Rights Regarding Sale. If the purchase
price offered to Cempresa (the "Offer") for the Conecell Shares
shall be less than Ninety Million Dollars ($90,000, 000), the
Lender shall have the right to either (i) match the Offer and
acquire the Conecell Shares on the exact terms and conditions of
the Offer; or (ii) veto the proposed Sale of the Conecell Shares;
provided, however, that Borrower shall have the right, in its
sole and absolute discretion, to accept the Offer and sell the
Conecell Shares, notwithstanding Lender' s veto rights, if the
Borrower shall agree to pay Lender Five Million Dollars ($5,000,000)
plus the Loan and any accrued and unpaid interest thereon
(the "Veto Payment"). The Veto Payment shall be in lieu of any
other payments or sums due to the Lender under Section 2.7 above
and the Lender shall have no rights to the Cempresa Shares after
receipt of the Veto Payment. The Veto Payment shall be due and
payable by Borrower at the closing of the Sale of the Conecell
Shares. If Borrower intends to sell the Conecell Shares for less
than Ninety Million Dollars ($90,000,000), Borrower agrees to
provide prior written notice to Lender twenty (20) days prior to
the proposed consummation of the Sale of the Conecell Shares.
Lender shall then have ten (10) days to either match the Offer
and acquire the Conecell Shares, as provide in (i) above, or to
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exercise its veto as provided in (ii) above subject to Borrower's
right to pay the Veto Payment. if Lender fails to notify Borrower
in writing within the prescribed ten-day (10) period, Lender
shall waive its rights to match the Offer, any veto over the
Offer and the Veto Payment.
Section 2.9 "Fideicomiso". In connection with the execution
and delivery of this Agreement, the Borrower has executed and
delivered to the Lender a Fideicomiso whereby the Borrower has
placed all of the Cempresa Shares as security for its obligations
under this Agreement and the Note.
ARTICLE III
CONDITIONS PRECEDENT TO THE LOAN
Section 3.1 By executing this Agreement, the Lender
acknowledges and agrees that the following conditions precedent
have been satisfied:
(i) Lender has received the Note, duly executed and delivered by
Borrower;
(ii) Lender has received the Convenio de Fideicomiso executed by
Borrower in favor of Lender, and such other documents, stock
powers and stock certificates that Lender has required in
connection with the Fideicomiso; and
(iii) Borrower has demonstrated that it is in good standing
in its place of incorporation and in any other jurisdiction
where such qualification is necessary or desirable.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
The Borrower represents and warrants to the Lender that:
Section 4.1 Incorporation, Good Standing, and Due Qualific-
cation. The Borrower is a corporation duly incorporated, validly
existing, and in good standing under the laws of the British
Virgin Islands; has the corporate power and authority to own its
assets and to transact the business in which it is now engaged or
proposes to be engaged in; and is duly qualified as a foreign
corporation and in good standing under the laws of such other
jurisdiction in which such qualification is required.
Section 4.2 Corporate Power and Authority. The execution,
delivery and performance by the Borrower of the Loan Documents
have been duly authorized by all necessary corporate action and
do not and will not (i) require any consent or approval of the
stockholders of such corporation; (ii) contravene such
corporation's charter or bylaws; (iii) violate any provision of
any law, rule or regulation, order, writ, judgement, injunction,
decree, determination, or award presently in effect having
applicability to such corporation; (iv) result in a breach of or
violation of any other agreement, lease, or instrument to which
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such corporation may be a party or by which it or its properties
may be bound or affected; (v) result in, or require the creation
or imposition of any lien upon or with respect to any of the
properties now owned or hereafter acquired by such corporation;
or (vi) cause such corporation to be in default under any such
law, rule, regulation, order, writ, judgement, injunction,
decree, determination, or award or any such indenture, agreement,
lease or instrument.
Section 4.3 Legally Enforceable Agreement. This Agreement
and each of the other Loan Documents when delivered will be,
legal, valid, and binding obligations of the Borrower,
enforceable against the Borrower in accordance with their
respective terms.
Section 4.4 Valid Title to Cempresa Shares. Borrower has
good and valid title to the Cempresa Shares, free and clear of
any and all encumbrances, security interests and other adverse
claims whatsoever.
Section 4.5 Valid Title to Conecell Shares. Cempresa has
good and valid title to the Conecell Shares, free and clear of
any and all encumbrances, security interests and other adverse
claims whatsoever, including but not limited to applicable
creditor's remedies, pursuant to fraudulent and preferential
transfer laws.
Section 4.6 Cellular License. Conecell has a license to
operate a cellular phone service and an international teleport
system in the Republic of Ecuador.
ARTICLE V
CLOSING
The closing and funding of the Loan shall occur
simultaneously with the execution of this Agreement and the other
Loan Documents.
ARTICLE VI
EVENTS OF DEFAULT
Section 6.1 Events of Default. The entire unpaid principal
balance of the Loan, and all other sums owing under this
Agreement or any other instrument or document executed by the
Borrower in connection with the Loan, shall at the option of the
Lender become immediately due and payable upon the occurrence of
any one or more of the following events ("Events of Default") ,
regardless of the cause thereof and whether within or beyond the
control of the Borrower:
(i) If Borrower shall make any representations or warranties in
any of the Loan Documents or in any certificate furnished at
any time hereunder or in connection with any of the Loan
Documents which proves to have been untrue or misleading in
any material respect when made or furnished;
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(ii) If Borrower shall default in the observance or performance
of any agreement or covenant contained in this Agreement or
any of other Loan Document, unless such default is cured
within thirty (30) days thereafter;
(iii) If Borrower shall file a voluntary petition in
bankruptcy or a voluntary petition or answer seeking
liquidation, reorganization, arrangement, re-adjustment of
its debts, or for any other relief under the Bankruptcy
Code, or under any other act or law pertaining to
insolvency or debtor relief, whether state, federal, or
foreign, now or hereafter existing; Borrower shall enter
into any agreement indicating its consent to, approval of,
or acquiescence in, any such petition or proceeding;
Borrower shall apply for or permit the appointment by
consent or acquiescence of a receiver, custodian or trustee
of Borrower for all or a substantial part of its property;
Borrower shall make an assignment for the benefit of
creditors; or Borrower shall be unable or shall fail to pay
its debts generally as such debts become due, or Borrower
shall admit, in writing, its inability or failure to pay its
debts generally as such debts become due; or
(iv) If the Borrower shall make an assignment for the benefit of
creditors, file a petition in bankruptcy, apply to or
petition any tribunal for the appointment of a custodian,
receiver, intervenor or trustee for the Borrower or a
substantial part of Borrower's assets; or if the Borrower
shall commence any proceeding under any bankruptcy,
arrangement, readjustment of debt, dissolution or
liquidation law or statute of any jurisdiction, whether now
or hereafter in effect; or if any such petition or
application shall have been filed or proceeding commenced
against the Borrower or if any such custodian, receiver,
intervenor or trustee shall have been appointed and the same
shall have not been dismissed within sixty (60) days after
such filing, commencement or appointment.
ARTICLE VII
REMEDIES AND WAIVER OF ANY OTHER RIGHTS
Section 7.1 Remedies. Upon the occurrence or existence of
any Event of Default, Lender's sole and exclusive remedy shall be
to take possession of the Cempresa Shares pursuant to the
Fideicomiso. The Lender hereby acknowledges and agrees to waive
any and all other rights or remedies that Lender may have under
the laws of the Republic of Ecuador, the United States of America
and any other applicable jurisdiction to collect the proceeds of
the Loan, including principal and accrued interest thereon, or to
enforce any claim whatsoever against the Borrower due to
Borrower's Default. The parties hereto acknowledge and agree
that the foregoing waiver by Lender does not intend to limit any
rights which the Lender may acquire as a shareholder in the event
the Lender becomes a shareholder of Cempresa, including the
rights of first refusal described in Section 8.1.
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ARTICLE VIII
RIGHT OF FIRST REFUSAL
Section 8.1 Right of First Refusal. In the event that
the Lender shall become a shareholder of Cempresa pursuant
to Section 7.1 of this Agreement, the Borrower and the
Lender shall grant to each other a right of first refusal
with regard to their respective share interests in Cempresa.
The right of first refusal shall provide that either party
must provide the other with written notice at least twenty
(20) days prior to the sale of their respective shares to a
third party. The party receiving the notice shall have ten
(10) days to purchase the other party's shares on the same
terms as that being contemplated.
ARTICLE IX
MISCELLANEOUS
Section 9.1 Entirety. This Agreement, including the other
documents referred to herein, which form a part hereof, contains
the entire understanding of the parties hereto with respect to
the subject matter contained herein and therein. This Agreement
supersedes all prior oral or written agreements and
understandings between the parties with respect to such subject
matter.
Section 9.2 Amendments, Etc. No amendment, modification,
termination, or waiver of any provision of any Loan Document to
which the Borrower is a party, nor consent to any departure by
the Borrower from any Loan Document to which it is a party, shall
in any event be effective unless the same shall be in writing and
signed by the Lender, and then such waiver or consent shall be
effective only in the specific instance and for the specific
purpose for which given.
Section 9.3 Notices, Etc. All notices and other communications
provided for under this Agreement and under the other Loan
Documents to which the Borrower is a party shall be in writing
via telecopy with a confirmation by mail, or delivered, as to
each party, at such address as contained herein.
Section 9.4 Successors and Assigns. This Agreement shall be
binding upon and inure to the benefit of the Borrower and the
Lender and shall not be assignable or transferred by either
without the written consent of the other party hereto.
Section 9.5 Governing Law; Jurisdiction. This Agreement
and the Note shall be governed by, and construed in accordance
with, the laws of the State of Florida. To the fullest extent
permitted by law, the Borrower and the Lender submit to the
jurisdiction of the state and federal courts in the State of
Florida for the purposes of any action or proceeding relating to
this Agreement or any other Loan Document, and agree that the
venue of any such action or proceeding may be laid in Dade
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County, Florida, and waive any claim that the same is an
inconvenient forum. No provision of this Agreement shall limit
the Lender's right to serve legal process in any other manner
permitted by law or to bring any such action or proceeding in any
other competent jurisdiction.
Section 9.6 Service of Process. The Borrower hereby
irrevocably appoints C.T. Corporation (the "Process Agent"), with
an off ice on the date hereof at 1200 South Pine Island Road,
Plantation, Florida 33324, as its agent to receive on its behalf
service of copies of any summons and complaint and any other
process which may be served in any action or proceeding, provided
that a copy of such process is also mailed, to the Borrower at
its address specified herein. Such service may be made by
mailing or delivering a copy of such process to the Borrower in
care of the Process Agent at the Process Agent's above address,
and the Borrower hereby irrevocably authorizes and directs the
Process Agent to accept such service on its behalf.
Section 9.7 Severability of Provisions. Any provision
of any Loan Document 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 of such Loan Document or
affecting the validity or enforceability of such provision in any
other jurisdiction.
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be executed by their respective officers or legal
representatives thereunto duly authorized, as of the date first
above written.
DEVONO COMPANY LIMITED, the
Borrower.
By: /s/ Simon Parra
----------------------------------------------
SIMON PARRA, Legal Representative
Road Town
Post Office Box No. 71
Tortola, British Virgin Islands
MASTEC, INC., the Lender.
By: /s/ Jorge Mas
---------------------------------------------
8600 N.W 36th Street
8th Floor
Miami, FL 33166
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