AGREEMENT
This AGREEMENT is entered by and between:
MASTEC, INC., a company organized and existing under the laws of the
State of Florida, United States of America, with head office at 0000
X.X. 00xx Xxxxxx, in the city of Miami, State of Florida, United States
of America, and/or any of its affiliated companies (hereinafter
referred to as "MasTec"), and
INEPAR, S.A. - INDUSTRIA E CONSTRUCOES, a company organized and
existing under the laws of Brazil, with head office at Av. Jusceline X.
Xx Xxxxxxxx, no. 11.400, Cidade Industrial, in the city of Curitiba,
State of Parana, Brazil (hereinafter referred to as "Inepar"),
(hereinafter jointly referred to as "Parties"@).
WHEREAS
This Agreement is based on the following:
A. MasTec and Inepar executed an Agreement of Intent, dated May 17, 1997
(hereinafter referred to as "Agreement"), providing for the terms and
conditions to organize a Brazilian corporation, with the purpose of
operating in the Brazilian market of rendering of services for the
introduction of telecommunication systems, and which stocks would be
100% (one hundred per cent) held by the Parties.
B. Inepar, organized on June 26, 1997, a corporation under its control,
named MasTec Inepar, S.A.- Sistemas de Telecomunicacoes, with head
office at Avenida Jusceline X. Xx Xxxxxxxx, no. 11.400-CIC, in the city
of Curitiba, State of Parana, Brazil, with acts of incorporation filed
with the Most Worthy Commercial Registry of the State of Parana,
Brazil, under no. 41300045739, in session held on July 01, 1997
(hereinafter referred to as ("Corporation"), in order that, in the
future and in accordance with the Agreement, the Corporation carried
out a capital increase to allow the admittance of the new stockholder
MasTec (hereinafter referred to as "Capital Increase"), and as of the
Capital Increase, referred to as "Newco"
Taking into consideration the terms of the Agreement of Intent and its mutual
commitments stipulated herein, the Parties agree to execute this Agreement to be
governed by the following clauses and conditions:
I - THE CORPORATION
1. The corporation capital is currently composed of 100,000 (one hundred)
common nominative stocks, in that Inepar holds 99.50% of its total
capital:
1.1 Newco shall be a corporation governed by the provisions of
its articles of organization (hereinafter referred to as "Articles of
Organization") and by the applicable laws, in that all of its existing
stocks and each and every stock to be issued in the future shall be
subject to the terms and conditions of this Agreement.
2. Inepar transferred the Corporation all backlog - with the respective
accounting on June 30, 1997 - of its agreement:
(i) - PI 5148 with Telrj, dated June 30, 1996;
(ii) - PI 5152 with Equitel, dated February 17, 1997;
(iii) - PI 5153 with Telepar, dated March 11, 1997;
(iv) - PI 5154 with Telepar, dated January 31, 1997;
(v) - PI 5155 with Telesp, dated December 31, 1996;
(vi) - PI 5156 with Telesp, dated December 31, 1996;
(vii) - PI 5157 with Motorola, dated March 11, 1997;
(viii) - PI 5158 with Telesp, dated May 30, 1997;
(ix) - PI 5159 with Telesp, dated June 23, 1997;
(x) - PI 5160 with Telepar, dated April 01, 1997, and
(xi) - PI 5161 with Alcoa, dated June 20, 1997, (hereinafter jointly
referred to as "Transferred Agreements").
Inepar shall also transfer the Corporation the Agreements which on the occasion
of this Agreement are under negotiation with the customers:
(i) Motorola - Telepar - South Region, valued estimated at
US $32,000,000.00 (thirty two million US dollars);
(ii) Consorcio Globaltelecom - Band E. Value estimated at
US $100,000,000.00 (one hundred million US dollars)and
(iii) Telepar - infrastructure for the conventional telephony, value
estimated at US $9,000,000.00 (nine million US dollars), (hereinafter
jointly referred to as "Agreements to be Transferred").
The Transferred Agreements together with the Agreements to be Transferred
represent a total backlog of approximately the equivalent in Brazilian currency
to US $370,000,000.00 (three hundred seventy million US dollars), in that the
Agreements to be Transferred shall be automatically incorporated to Newco by
Inepar on the occasion of their definite execution.
2.1 Inepar shall gear its best efforts with its customers to
approve the transfer of the Transferred Agreements and of the
Agreements to be Transferred to Newco. In the event the status
of minority of Inepar in Newco causes any impediment for the
presentation of the Agreements at Newco, the Parties shall
consider, among others, the alternative to subcontract the
purpose of the Transferred Agreements and of the Agreements to
be Transferred to Newco and/or present Newco the Backlog -
with the respective accounting - of other agreements or
services for Inepar and/or of any of its subsidiary companies
in order to perform the amount of the invoicing and respective
margins of profitability which arise out of the agreements
herein referred to above.
II. CAPITAL INCREASE
3. The Parties agree that at July 31, 1997 (hereinafter referred to as
"capital increase date") Inepar, company's majority stockholder, will
carry out a Special Stockholders' Meeting, recording its respective
Minutes with the purpose of: (i) increasing the corporate's capital so
as to allow the admittance of the new stockholder MasTec,
(ii) transferring the head office of Newco from Curitiba (State of
Parana) to Sao Paulo (State of Sao Paulo) and (iii) issuing new common
stocks of Newco (the "Stocks"), which shall be subscribed and paid in
by MasTec representing fifty-one per cent (51%) of Newco's total
capital (hereinafter referred to as "Subscription"). The Subscription
shall be preceded by the guarantee statements issued by Inepar pursuant
to item iv hereof.
3.1 MasTec shall transfer, in cash the amount in Brazilian
currency equivalent to us$ 29,400,000.00 (twenty-nine million
four hundred thousand US dollars) in order to pay up the
Stocks. Such value shall be paid in eleven (11) installments
in that the first installment shall be paid, at the Capital
increase Date, in the value, in Brazilian currency, equivalent
to US$ 5,000,000.00 (five million US dollars), followed by ten
(10) equal monthly installments in the value, in Brazilian
currency, equivalent to US$ 2,440,000.00 (two million four
hundred forty thousand US dollars).
4. MasTec will pay Inepar, at the Capital Increase Date, a goodwill
equivalent to two hundred fifty thousand (250,000) common stocks of
MasTec and an option to acquire fifty thousand (50,000) additional
common stocks of MasTec at the NYSE closing market price on May 16,
1997, for a term of up to ten (10) years.
5. Newco's stock composition, once the Subscription is carried out, will
be fifty-one per cent (51%) of the stocks to MasTec and forty-nine
percent (49%) of the stocks to Inepar, in order to allow the
consolidation and merger of Newco results, in Brazil, in the
accounting-financial structure of MasTec in the United States of
America.
III - OPERATION CONDITIONS
6. On the Capital Increase Date, Inepar will provide and transfer to the
Company all documents needed for the operation of the Corporation in
the field of rendering of services of introduction of
telecommunications systems.
7. After the Capital Increase Date, possible acquisitions of regional
companies will be analyzed aiming for the best Brazilian market share;
in that the first company to be analyzed for such purposes will be CIDE
ENGEHARIA LTDA., with head office in the city of Curitiba, State of
Parana, Brazil.
IV - GUARANTEES AND REPRESENTATIONS
8. Inepar states the following:
(A) the legal existence and regular operation and functioning of the
Controlled Corporation;
(B) the validity and effectiveness of transferred Agreements and
Agreements to be Transferred;
(C) the nonexistence of any labor, fiscal or social security demand
against the Controlled Corporation, and the nonexistence of any
liens regarding the properties and assets of the Controlled
Corporation;
(D) the net equity position of Controlled Company is reflected in
the balance sheet of the Capital increase Date, attached
hereto as Annex 8 (D); and
(E) the nonexistence of any liabilities or contingencies not
disclosed in said Annex 8 (D).
V - NEWCO'S MANAGEMENT
9. After the Capital Increase date, the Parties agree that Newco shall
have a Management Committee formed by up to five (5) members, among
those it will necessarily be the President Director of Newco. The
Management Committee shall be formed as follows: (i) one (1) member
named Chairman, appointed by mutual agreement between the Parties; (ii)
two (2) members simply named Committee Members appointed by MasTec; and
(iii) other two (2) members simply named Committee Members appointed by
Inepar. The powers of said Committee Members will be defined in the
Articles of Organization.
9.1 In case of temporary impediment, the Chairman himself may
appoint another Member to substitute for him, and in case of
definitive vacancy the Parities will choose, by common
agreement, another Chairman who will be in office until the
end of the tenure.
9.2 In case of vacancy or definitive impediment of nay Committee
Member, the Party which has appointed said Member shall
appoint a substitute who will complete the performance of the
tenure of the substituted Member.
10. Newco shall have a Board of Directors formed by up to five (5) members
as follows; (i) one (1) member named President Director appointed by
mutual agreement of the Parties, who will also be necessarily appointed
for one of the office of the Company's Management Committee; (ii) tow
(2) members named individually Executive Vice-President Director and
Commercial Director appointed by President Director; (iii) one (1)
member named Financial Managing Director appointed by MasTec; and (iv)
one (1) member named Technical Director appointed by Inepar. The powers
of said Directors will be defined in the Articles of Organization.
10.1 In case of vacancy or definitive impediment of any Director,
the party or the President Director who appointed him, as the
case may be, shall appoint a substitute who will end the
tenure of the substituted Director.
10.2 Newco's President Director shall have all the necessary powers
to carry out the Company's management.
10.3 In Newco's President Director absence, Executive
Vice-President Director, jointly with any other Director, may
perform the President Director's duties.
10.4 The Parties agree that, as stockholders of Newco, MasTec
and/or Inepar, as the case may be, they may grant and assign a
sole stock held by them to natural individuals who come to
form the Management Committee of Newco, in order to comply
with the legal demand related to the member of such board. The
stocks then disposed of shall be encumbered in favor of the
respective assignor stockholders. It is also agreed that,
should any of said natural individuals fail to participate in
Newco's Management Committee, the stocks shall be immediately
assigned to the respective assignor stockholder, who will be
fully in charge of such obligation fulfillment.
VI NOTICES
11. Any notices shall be given, as provided for herein, in writing, and
will be effective upon its receipt, if sent by registered air mail, and
in case the notice is sent by fax it will be effective when confirmed
by the original copy sent via registered air mail, to the Party at the
address indicated hereinbelow or at another address, as said Party may
indicate, by means of written notice pursuant to the provisions of this
Section.
To MasTec: To Inepar:
Attention: Attention: Di Xxxxx Xxxxx
Fax No.: Fax No.: xx 00 00 000 0000
VII - MISCELLANEOUS
12. This Agreement shall be effective for a period of ten (10) years as of
the present date or, whenever observed that time limitation meanwhile
no changes in the original share of Newco's stockholders occur, and in
such case, if none of them delivers a notice informing about its
determination not to consent with its renewal before the end of the
ten-year term, this Agreement shall be renewed without any additional
measure for an indefinite term.
12.1 In case of decrease in Newco's original interests, the terms
of this Agreement shall be reviewed.
13. The Parties may validate the obligations hereunder by specific
performance or any other legal action, including claim for damages, to
which they have the right, under the applicable laws.
14. The terms of this Agreement shall bind the parties to their respective
successors or authorized assignees. No right or obligation shall be
granted or assigned hereunder, by any of the Parties, without prior
written consent of the other Party.
15. This Agreement represents the full agreement between the Parties
regarding the matters discussed and shall prevail on all other prior
related settlements, compromises, and documents. Any amendments,
cancellation or renounce shall require a written document duly executed
by the Parties.
16. This Agreement will be ruled by Brazilian laws. Any disputes which
result from this Agreement shall be (first settled by arbitration), and
then, if necessary, by the Courts of the city of Sao Paulo, State of
Sao Paulo, excluding any other, no matter how privileged it may be.
IN WITNESS WHEREOF, the Parties execute this Agreement in three (3) counterparts
before the two (2) undersigned witnesses.
Sao Paulo, July 21, 1997
MASTEC, INC.
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By: By:
Title: Title:
INEPAR S.A. INDUSTRIA E CONSTRUCOES
-------------------------- ----------------------------
By: Xxxxxxx De Oms Sobrinho By: Mario Xxxxx Xxxxxxxxx
Title: President Title: Vice-President
Witnesses:
-------------------------- ----------------------------
By: By:
RG: RG
"SIDE LETTER"
Without any detriment of the provisions of the AGREEMENT executed between:
MASTEC, INC., a company organized and existing under the laws of the
State of Florida, United States of America, with head office at 0000
X.X. 00xx Xxxxxx, in the City of Miami, State of Florida, United States
of America, and/or any of its affiliated companies (hereinafter
referred to as "MasTec"), and
INEPAR, S.A. - INDUSTRIA E CONSTRUCOES, a company organized and
existing under the laws of Brazil, with head office at Av. Xxxxxxxxx X.
Xx Xxxxxxxx, no. 11.400, Cidade Industrial, in the city of Curitiba,
State of Parana, Brazil (hereinafter referred to as "Inepar"),
the parties, shareholders of MASTEC INEPAR S/A - SISTEMAS DE
TELECOMUNICACOES, have established herewith that the decisions related
to the matters specified hereafter shall be invariably made by mutual
agreement:
a) Amendments to the Articles of Organization of MASTEC INEPAR S/A -SISTEMAS
DE TELECOMUNICACOES related to:
(i) changes to the corporate purposes which determine, directly or
indirectly, amendments to the corporate purpose of products
and services of the Corporation;
(ii) creation, amendment or extinction of types of shares or rights
related to the stocks;
(iii) creation of beneficiary parties or debentures convertibles
into stocks and/or that have interest in the profits, or of
other securities which represent the interest in the capital
and/or in the results of the Corporation or even securities
which guarantee any rights of vote in the administration of
the Corporation;
(iv) definition and/or amendment to the fiscal year of the
Corporation;
(v) amendments to the policy of dividends distribution of the
Corporation;
(vi) definition and/or amendment to the hypothesis of call of the
Statutory Audit Committee as well as of the number of its
members;
b) - The following operational decisions:
(i) dissolution, liquidation, bankruptcy, reorganization or
suspension of the liquidation;
(ii) reorganizations of corporations, such as mergers or
consolidations and others which cause the creation, amendment
and replacement of stocks or other securities which represent
the interest in the capital and/or in the results of the
Corporation;
(iii) sale, acquisition or taxation of interest in any company which
competes with the Corporation or which capital also pertains
to a competitor of the Corporation or that holds majority
interest in any company;
(iv) increase and/or reduction in the corporate capital of the
Corporation;
(v) manufacture of new products and/or beginning of new projects
unrelated to the rendering of services of introduction of
systems of telecommunications.
