Exhibit 10.3.1
REPERTORY NO.
INDENTURE AGREEMENT
BY AND BETWEEN
HQI TRANSELEC CHILE S.A. AND BANCO DE CHILE
In Santiago, Chile, on February 12, 2001, before me, Xxxxxxxx Xxxxxx Claro,
attorney, Notary Public, alternate to Xxx. Xxxxxxxxx Xxxxxxx Escalas, titular of
the 16th Notarial Office and Mines Registrar of Santiago, with offices in this
city at San Sebastian 2750, Las Condes, there appeared:
Xxxxxxxxx Xxxxxxxx Ihnen, Chilean, married, civil engineer, national identity
card No. 4.606.916-1, as the General Manager, on behalf of, as shall be
evidenced, HQI TRANSELEC CHILE S.A., taxpayer identification number
77.498.870-K, both domiciled at Santa Xxxx 00, 0xx xxxxx, xxxxxxx xx Xxxxxxxx,
hereinafter also indistinctly Transelec, the Issuer or the Company, and Xx. Xxxx
Xxxxxxxxx Xxxxxx, Chilean, married, civil engineer, identity card No.
5.543.500-6, and Xx. Xxxx Xxxx Pefaur, Chilean, married, bank employee, identity
card No. 7.338.994-5, both on behalf of, as shall be evidenced, Banco de Chile,
taxpayer identification No. 00.000.000-0, hereinafter also indistinctly the
"Bondholders Representative" or the "Representative"; all domiciled in this city
at Xxxxxxx 251, borough of Santiago. Notwithstanding the foregoing, whenever
reference is made jointly to the parties, they shall also be called the Parties
and individually they may be called a Party; who are of age, evidenced their
identity by the aforesaid identity cards and stated:
Pursuant to the resolution of the Board of Directors of HQI Transelec Chile S.A.
adopted at a meeting held February 2, 2001, the Minutes of which were executed
to public deed on February 5, 2001 in the Santiago Notarial Office of Xx.
Xxxxxxxx Xxxxx Xxxxxxx, the Parties hereby enter into an Indenture Agreement for
bonds that will be issued by HQI Transelec Chile SA., Banco de Chile acting as
the representative of the individuals or bodies corporate who acquire such Bonds
and as Paying Bank, all pursuant to the
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stipulations contained herein and the provisions in the Securities Market Law
and the Companies Law and other regulations applicable to this matter.
DEFINITIONS: For all purposes hereof, unless otherwise inferred from the
context, all terms set out below shall be understood according to the definition
set opposite for each thereof, always provided they are capitalized or the first
letter thereof is capitalized, whether they are used in singular or plural and
notwithstanding other definitions contained in the text of this agreement:
Essential Assets : The primary lines and equipment for electric
transmission of a voltage greater than or equal to
220,000 volts, including the concessions
associated to such electric transmission lines and
excluding: (i) the primary lines and equipments
that are dedicated principally to specific users,
whether they are power plants or industrial or
mining customers; and (ii) facilities of any
voltage level that interconnect two or more
electric systems in the country or abroad.
Total Assets : Corresponds to the value appearing under code
5.10.00.00 of the FECU (equal to item 10.000 of
the FECU existing as of December 31, 2000).
Paying Bank : The bank indicated in number 1 of letter (a) of
Clause Second hereof.
Bond, Bonds or BONDS : One or more of the Bonds issued hereunder in any
of the series or subseries thereof.
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Business Day : Any day other than a Saturday or holiday.
Issuer or ISSUER : HQI Transelec Chile S.A.
Financial Statements : Means the general balance sheet, statement of
income, statement of cash flow and other
information of the Issuer contained in the FECU
established in Circular No. 239 of the
Superintendency, as amended, or the rule
superseding it.
FECU : Means the Uniform Codified Statistical Record that
must be presented from time to time to the
Superintendency or such other instrument replacing
it.
Liens : The liens to which numeral (iv) of Clause
Thirteenth hereof refers.
Value-Added Tax or VAT : Means the tax governed by Decree Law 825 of 1976.
Minority Interest : Means the interest corresponding to item
5.23.00.00 of the Consolidated FECU of the Issuer
(equal to item 24.000 of the FECU existing through
December 31, 2000).
Bondholders Meetings : The meetings of Bondholders to which Clause
Twenty-Second hereof refers.
Securities Market Law : Law No. 18,045, as subsequently amended.
The Companies Law : Law No. 18,046, as subsequently amended.
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Equity : Corresponds to the value appearing in Code
5.24.00.00 of the FECU (equal to item 23.000
of the FECU existing through December 31,
2000).
Pesos : The legal tender of Chile.
Representative or : The bank identified in the preamble and in
Bondholders Representative clause second hereof and the legal successor
thereof.
Superintendency : Means the Superintendency of Securities and
Insurance, an autonomous government agency
with legal capacity and its own equity,
created by Decree Law No. 3,538 of December
23, 1980, or the agency that succeeds or
assumes the functions thereof.
Holder, Holders or : The holder or holders of one or more of the
Bondholders Bonds stipulated herein.
Unidad de Fomento : Means the adjustable unit set by the Central
Bank of Chile under Law 18,840.
SECTION I
INFORMATION ON THE ISSUER AND THE BONDHOLDERS
REPRESENTATIVE
CLAUSE FIRST: INFORMATION ON THE ISSUER
A. Legal Information
1. Name: HQI Transelec Chile S.A.
2. Legal Domicile and Business Headquarters: The legal domicile thereof
is the city of Santiago, borough of the same name, notwithstanding
the agencies, offices and branches that it may establish in other
points of the country or abroad. Its headquarters are located in the
city of Santiago at Santa Xxxx 00, 0xx xxxxx, xxxxxxx xx Xxxxxxxx.
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3. Taxpayer Identification No. 77.498.870-K.
4. Legal Incorporation: Transelec is a corporation that is currently in
the process of registration in the Securities Registry kept by the
Superintendency of Securities and Insurance. The company was
incorporated under the corporate name "Inversiones HQ Chile
Limitada" by public deed dated September 15, 2000, notarized by Xx.
Xxxx Xxxxxxxxx Xxxxxxx of Santiago. An abstract thereof was
registered on page 24,911 No. 19,733 of the Registry of Commerce of
the Santiago Real Estate Registrar and was published in the Official
Gazette on September 26, 2000. The company changed its name to
Inversiones HQI Transelec Limitada by public deed notarized by Xx.
Xxxx Xxxxxxxxx Xxxxxxx on October 3, 2000. An abstract thereof was
registered on page 26177 No. 20721 of the Registry of Commerce of
the Santiago Real Estate Registrar and was published in the Official
Gazette on October 6, 2000. The equity capital was increased by
public deed notarized by Xx. Xxxx Xxxxxxxxx Xxxxxxx of Xxxxxxxx on
October 16, 2000. An abstract of said deed was registered on page
28057 No. 22311 of the Registry of Commerce of the Santiago Real
Estate Registrar and was published in the Official Gazette on
October 24, 2000. Finally, by public deed dated November 23, 2000,
notarized by Xx. Xxxx Xxxxxxxxx Xxxxxxx, the Company was transformed
into a corporation under its actual corporate name. An abstract of
such deed was published in the Official Gazette on December 22, 2000
and was registered in the 2000 Santiago Registry of Commerce on page
33,843, number 27083.
5. Duration: The duration of the Issuer is indefinite.
6. Business Purpose: The principal purpose of the Issuer is to exploit
and develop electric systems owned thereby or by third parties used
to transport or transmit electric energy and it may, for such
purposes, obtain, acquire and enjoy the respective concessions and
permits and exercise all rights and powers conferred upon
electricity companies by governing law. The business purpose
includes commercialization of the transportation capacity of the
lines and transformation capacity of the substations and associated
equipment in order for power plants, both national as well as
foreign, to be able to transmit
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electric energy they produce and reach centers of demand thereof;
the rendering of consulting services in the disciplines of
engineering and business management in relation to its principal
purpose; and the development of other commercial and industrial
activities relating to the use of the infrastructure used for
electricity transmission. The company may, in performance of its
business purpose, act directly or through subsidiaries or affiliates
both in the country as well as abroad.
B. Economic Information on the Issuer
1. Subscribed and Paid-in Capital: The subscribed and paid-in capital
on the date hereof is five hundred and thirty-seven million four
hundred and seven thousand seven hundred and sixty United States of
America dollars and four cents.
2. Outstanding Bond Issues: The Issuer has no outstanding bond issues.
3. Preferred or Privileged Debt: The Issuer has no other preferred or
privileged debt except as established by common law.
CLAUSE SECOND: INFORMATION ON THE BONDHOLDERS REPRESENTATIVE.
A. Legal Information
1. Name: Banco de Chile.
2. Legal Domicile and Headquarters: The legal domicile of Banco de
Chile is the city of Xxxxxxxx, Chile, borough of the same name, and
the address of its main office is Xxxxxxx 251.
3. Taxpayer Identification No. 97.004.000-5.
4. Legal Incorporation: Banco de Chile is a bank with legal capacity
and its own equity established by the merger of Banco Nacional de
Chile, Banco de Valparaiso and Banco Agricola pursuant to a public
deed dated October 28,
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1893, notarized by Xx. Xxxxxxx Xxxxx Xxxxxxx of Xxxxxxxx and
authorized by Executive Decree dated November 28, 1893, registered
on page 125 No. 150 of the 1893 Registry of Commerce of the Santiago
Real Estate Registrar. Banco de Chile, the legal continuer of the
previous Banco de Chile pursuant to Article 25 of Law 19,396, was
established by public deed dated July 19, 1996, notarized by Xx.
Xxxx Xxxxxxxxx Cash of Santiago and authorized by Resolution No. 132
of September 17, 1996, rectified by resolution of September 20,
1996, both issued by the Superintendency of Banks and Financial
Institutions, registered on page 23,859 No. 18,638 of the 1996
Registry of Commerce of the Santiago Real Estate Registrar and
published in the Official Gazette on September 26, 1996.
5. Duration: Banco de Chile is a continuing corporation.
6. Business Purpose: Banco de Chile engages in all businesses permitted
for banks by the General Banking Law.
B. Economic Information on the Representative: The most recent financial
statements of Banco de Chile presented to the Superintendency of Banks and
Financial Institutions are dated December 31, 2000 and the actual equity
as of that same date was 377,209,067,523 pesos.
CLAUSE THIRD: BONDHOLDERS REPRESENTATIVE FEE
The Issuer shall pay Banco de Chile the following fees for its work as the
Bondholders Representative in the equivalent in pesos, legal tender:
a) fifty Unidades de Fomento plus Value-Added Tax, payable one-time only
simultaneous to subscription hereof;
b) an annual fee of two hundred Unidades de Fomento plus Value-Added Tax. The
first payment shall be made when the underwriting begins and thereafter
within the first ten days of each year during the entire term the issuance
is outstanding; and
c) fifty Unidades de Fomento plus Value-Added Tax whenever the Issuer
requests convocation of a Bondholders Meeting. All expenses reasonably
incurred by the
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Bondholders Representative to perform the functions contemplated by law
and this agreement, including those originating in the convocation and
holding of a Bondholders Meeting, which encompass the professional fees
involved, publication of notices of convocation and other related notices,
shall be payable by the Issuer, who should supply the funds for such
purposes in due course to the Bondholders Representative. The expenses
shall be justified by the corresponding budgets and receipts. The
aforesaid professional fees shall be paid on the basis of the time
actually used according to the prevailing market compensation.
SECTION II. GENERAL CONDITIONS OF THE ISSUE
CLAUSE FOURTH: HISTORY, AMOUNT, CHARACTERISTICS AND CONDITIONS OF THE ISSUE
One. Amount, Series, Number of Bonds and Par Value of the Bonds: The issue of
the Bonds stipulated herein shall be for an aggregate amount equal to ten
million Unidades de Fomento, divided into two series of Bonds, called series A,
for a nominal principal amount equal to seven million Unidades de Fomento; and
series B, for a principal amount equal to four million Unidades de Fomento. In
no case shall the sum total of the principal amounts of both series exceed ten
million Unidades de Fomento. The series A is subdivided in turn into two
subseries, namely: subseries A-1, for a nominal principal amount equal to three
million Unidades de Fomento, corresponding to 3,000 Bonds at a par value of
1,000 Unidades de Fomento each; and subseries A-2, for as much as a nominal
principal amount equal to four million Unidades de Fomento, corresponding to 400
Bonds, with a par value of 10,000 Unidades de Fomento each. The series B is
subdivided in turn into two subseries, namely: subseries B-1, for up to a
nominal principal amount equal to one million Unidades de Fomento corresponding
to 1,000 Bonds with a par value of 1,000 Unidades de Fomento each; and subseries
B-2, for up to a nominal principal amount equal to three million Unidades de
Fomento corresponding to 300 Bonds with a par value of 10,000 Unidades de
Fomento each.
Two. Term for Underwriting: The term for underwriting both series of Bonds will
expire in 36 months, in both cases as of the date of registration of this issue
in the Superintendency's Registry.
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Three. Expiration Date: The series A Bonds will expire on March 1, 2007 and the
series B Bonds will expire on March 1, 2022.
Four. Characteristics and Transfer of Certificates: The Bonds in both series
shall be bearer Bonds and the transfer thereof shall be made by material
delivery of the same pursuant to general rules. Coupons shall not be
transferable separate from the certificate to which they accede.
Five. Numeration of the Certificates: The certificates shall be numbered
correlatively within each subseries starting with number 000001, and each
certificate shall represent one Bond.
Six. Coupons for the Payment of Interest and Amortizations: The certificates
shall bear the number of coupons indicated below according to the relevant
subseries:
Subseries A-1 and subseries A-2 of series A shall each have 12 coupons for
interest payments. The last of the Bond coupons corresponding to each of these
subseries shall bear the value corresponding to the total amortization of the
Bond in addition to the value corresponding to interest payment since the
principal shall be paid in one single installment upon maturity. Subseries B-1
and subseries B-2 of series B shall each have 42 coupons for the payment of
interest and the payment of interest and amortization, as applicable. The first
12 coupons of each of these subseries shall bear the value corresponding solely
to the payment of interest while the remaining 30 coupons shall bear the value
both of interest as well as amortizations. Each coupon will indicate its value,
the expiration date and the series and subseries of the Bond to which it
belongs. The interest and amortizations will be paid upon exhibition of the
respective certificate and against delivery of the corresponding coupon.
Seven. Interest: Series A Bonds shall accrue an interest of 6.2% annually on the
unpaid principal expressed in Unidades de Fomento, calculated on the basis of a
360-day year, in arrears, compounded semi-annually on equal semesters of 180
days. The series B Bonds shall accrue interest of 6.2% annually on the unpaid
principal expressed in Unidades de Fomento, calculated on the basis of a 360-day
year, in arrears, compounded semi-annually on equal semesters of 180 days. The
interest for both series shall accrue as of March 1, 2001 and shall be payable
as of September 1, 2001, on the dates specified in number nine of this Clause.
The interest and principal not collected on the corresponding
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dates shall not accrue new interest or adjustments. Nor shall interest accrue on
the Bonds collected subsequent to their expiry date or their early redemption
date, if applicable, unless the Issuer becomes delinquent, in which case the
Bonds shall accrue interest equal to the interest contained in article 16 of Law
18010 through actual payment of the debt. Furthermore, it is stipulated that a
delay in collection incurred by the Bondholder shall not constitute a
delinquency or simple delay in the payment of principal, interest or
adjustments.
Eight. Adjustment: The Bonds in both series shall be denominated in Unidades de
Fomento and, therefore, the unpaid balance of principal shall be adjusted by the
change in the value of the Unidad de Fomento from the day of issue to the day of
the respective maturities as indicated in point nine below. For these purposes,
the value of the Unidad de Fomento in effect on the day payment must be made
shall be used and the publications of the Unidad de Fomento shall be deemed
valid as made by the Central Bank of Chile in the Official Gazette pursuant to
number 9 of article 35 of Law 18840, the Constitutional Charter of the Central
Bank of Chile. If for any reason the Unidad de Fomento ceases to exist or the
form of calculation thereof is changed, the change in the Consumer Price Index
in the same period shall apply in substitution with a gap of one month, as
calculated by the National Statistics Bureau or the successor or substitute
thereof.
Nine. Interest payment dates and principal amortization and interest payment
dates: The payment schedules containing the interest payment dates and principal
amortization and interest payment dates of the Bonds in this Issue are filed
under number _______ at the end of the Registry kept by the certifying notary
and are deemed an integral part of this public deed.
Ten. Currency of Payment: The Bonds shall be payable in pesos, legal tender, at
the value of the Unidad de Fomento on the day of actual payment.
Eleven. Early Redemption: There shall be no early redemption regarding the
series A Bonds. The Issuer may redeem all or part of the series B Bonds early as
of September 1, 2009 on any of the interest payment dates or principal
amortization and interest payment dates. The Bonds shall be redeemed at the
value equal to the amount of unpaid principal plus the interest accrued through
the day when early payment is made. If only part of the series B Bonds are
redeemed in advance, the Issuer shall conduct a drawing of lots before a Notary
to determine which will be redeemed. For these purposes, the Issuer shall
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publish a notice in the newspaper El Xxxxxxxx of Santiago and notify the
Bondholders Representative through a minister of faith at least 15 days in
advance of the date when the drawing of lots shall be held before a Notary. Such
notice shall indicate the amount to be redeemed early in Unidades de Fomento.
The Notary before whom the drawing will be made shall be indicated as well as
the day, time and place where it will be conducted. The Issuer, the
Representative and the Bondholders who wish may attend the drawing of lots. The
early redemption procedure shall not be invalidated if none of such persons
attends the drawing of lots. Minutes of the proceedings shall be prepared by the
respective notary on the day of the drawing of lots that shall record the number
and series of Bonds awarded. The minutes will be filed in the public deed
registries of the Notary before whom the drawing of lots is conducted. The
drawing of lots should take place at least 30 days in advance of the interest
payment date or principal amortization and interest payment date when the early
redemption is to be made. The list of the Bonds that will be redeemed in advance
according to the drawing of lots will be published one-time only in the
newspaper El Xxxxxxxx of Santiago within 5 days after the drawing of lots and
should state the number and series of each thereof. If the early redemption
contemplates all of the Bonds of any of the series in circulation, a notice will
be published one-time only in the aforesaid newspaper indicating such fact. This
notice should be published at least 30 days in advance of the early payment
date. If the interest or principal amortization and interest payment date when
the early redemption will be made is a non-Business Day, the early redemption
shall be made on the next succeeding Business Day. The interest on the Bonds
awarded will accrue only through the day of prepayment.
CLAUSE FIFTH: MENTIONS IN THE BOND CERTIFICATES
The Bond certificates shall contain at least the following mentions:
1. Name and address of the Issuer and juridical specifications on the legal
incorporation thereof.
2. City, date and notarial office in which the Indenture Agreement was
executed and the number and date of its registration in the
Superintendency.
3. An indication of the series and the correlative number of the certificate.
4. The par value of the Bond and the number of Bonds represented by the
certificate.
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5. An indication that the Bonds are to the bearer.
6. The face amount of the issue and the term for placement.
7. A statement that the issue is unsecured except for the general right of
pledge pursuant to law.
8. The adjustment procedure, interest rate, a description of the procedure
for calculation thereof, the date and time of amortization and the dates
and place of payment of interest and amortizations.
9. The date from which the Bonds accrue interest and adjustments and as of
which the period of amortization begins.
10. The name of the Bondholders Representative and the way in which the
replacement thereof will be informed.
11. A statement that only the holders who have been registered in the
respective meeting five business days in advance of the date of such
meeting in the special registry to be kept by the Issuer will be able to
participate at Bondholders Meetings.
12. The date of the certificate, seal of the Issuer and signature of one of
the persons authorized by the Issuer and one of the persons authorized by
the Bondholders Representative.
13. The way in which early redemption of Bonds shall proceed.
14. The following legend on liability:
"ONLY THE ISSUER AND ANY FUTURE OBLIGORS ARE RESEPONSIBLE FOR PAYMENT OF
THIS BOND. THE FACT THAT THE SUPERINTENDENCY OF SECURITIES AND INSURANCE
HAS REGISTERED THE ISSUE DOES NOT MEAN THAT IT SECURES PAYMENT THEREOF OR
THE SOLVENCY OF THE ISSUER. ACCORDINGLY, THE
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RISK OF ACQUISITION THEREOF IS THE EXCLUSIVE RESPONSIBILITY OF THE
PURCHASER."
CLAUSE SIXTH: GUARANTEES
This Bond Issue is unsecured, notwithstanding the general right of pledge on the
Issuer's assets pursuant to articles 2457 and 2469 of the Civil Code.
CLAUSE SEVENTH: NO CONVERSION
The Bonds issued pursuant to this agreement cannot be converted to shares.
CLAUSE EIGHTH: USE OF FUNDS.
The funds from the underwriting of the Bonds shall be allocated preferentially
to payment of financial obligations of the Issuer currently outstanding and,
once they are extinguished, to the granting of credits to its parent company for
the prepayment of debt assumed by the latter.
CLAUSE NINTH: DELIVERY AND ACQUISITION OF THE BONDS
A. Delivery of Certificates. The certificates of the Bonds shall be delivered
to the holders at the time of subscription and payment thereof.
B. Subscription or Acquisition. The subscription or acquisition of Bonds
implies that the subscriber or purchaser accepts and ratifies all
stipulations, rules and conditions established herein.
C. Exchange. The Issuer shall have no obligation to exchange any certificate
for another of lower par value nor to include a lower amount of Bonds.
CLAUSE TENTH: PRESUMPTION OF OWNERSHIP AND TRANSFER OF BONDS.
For purposes hereof and the obligations assumed herein, the possessor of the
corresponding certificate shall be presumed to be the owner of the Bonds.
Transfer of the
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Bonds shall be accomplished by the material delivery of the corresponding
certificate according to general rules.
CLAUSE ELEVENTH: MISPLACEMENT, DESTRUCTION AND RUIN OF CERTIFICATES OR COUPONS;
ROBBERY OR THEFT.
A. The misplacement, loss, destruction or ruin of a certificate or one or
more coupons will be the exclusive responsibility of the holder thereof.
The holder should communicate any misplacement, destruction, loss or ruin
of a certificate or coupon in writing to the representative, the Issuer
and the stock exchanges, all in order to avoid any transactions regarding
such document. The Issuer shall require, prior to issuing any duplicate in
replacement of the misplaced or destroyed certificate and/or coupon:
1. That interested party publish three notices in a nationally and
widely circulated newspaper reporting to the public that a duplicate
of the certificate and/or coupon will be issued, together with the
series and number thereof, unless the holder of the respective
certificate or coupon appears within 10 business days to enforce his
rights; and
2. That the interested party establish a guarantee in favor and to the
satisfaction of the Issuer for a sum equal to the amount of the
certificate and/or coupon for which a duplicate is requested, which
shall remain in effect for a period of 5 years as from the date of
the last coupon replaced.
B. If a certificate and/or coupon is damaged but the essential indications
therein are not ruined or destroyed, the Issuer may issue a duplicate
after publication by the interested party of a notice in a widely and
nationally circulated newspaper informing the public that the original
certificate is void. In this case, the requester shall deliver the
certificate and the respective ruined coupon to the Issuer before a
duplicate is issued thereto. The Issuer reserves the right to enforce the
provisions in number 2 of letter A of this clause.
C. A stipulation shall be made in all the situations discussed in letters A
and B above of compliance with their respective formalities in the
duplicate certificate.
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D. Furthermore, the publication of the notices indicated in number 1 of
letter A of this clause and the cost of issuance of a replacement
certificate shall be the expense of the requester.
E. A new certificate shall not be issued in the case of theft or robbery but
rather the procedure established in Law 18,552 and in Law 18,092 shall be
followed.
SECTION III. RULES ON BONDHOLDER PROTECTION
CLAUSE TWELFTH: REPRESENTATIONS AND AFFIRMATIONS BY THE ISSUER
The Issuer represents and affirms that on the date of execution of this
agreement:
i) It is a corporation legally incorporated and validly existing under
the laws of the Republic of Chile.
ii) The subscription and performance of this Agreement do not violate
any statutory or contractual restrictions of the Issuer.
iii) The obligations it assumes under this agreement have been validly
and legally assumed and performance thereof may be required of the
Issuer according to the terms of the same except when such
performance is affected by the provisions contained in the
Bankruptcy Law or another applicable law.
iv) There is no judicial, administrative or any type of action filed
thereagainst or known thereto that may materially and adversely
affect the business thereof, its financial situation or operating
results or might affect the legality, validity or performance of the
obligations it assumes hereunder.
v) To its best knowledge and understanding, it has all approvals,
authorizations and permits required by governing law and applicable
regulations for operation and exploitation of its business without
which its business, financial situation or operating results could
be adversely and materially affected.
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vi) The audited Financial Statements of the Issuer as of December 31,
2000 and the Financial Statements as of January 31, 2001 have been
prepared according to generally accepted accounting principles of
Chile, are complete and reliable, and fairly reflect the financial
position of the Issuer on such dates. Furthermore, to its best
knowledge and understanding, the Issuer has no liabilities, losses
or obligations, whether or not contingent, that are not reflected in
its Financial Statements and might adversely and materially affect
its ability and capacity to fulfill its obligations assumed under
this Indenture Agreement.
CLAUSE THIRTEENTH: OBLIGATIONS, LIMITATIONS AND PROHIBITIONS
Until the Issuer has paid all principal and interest to the Bondholders, it
shall be subject to the following obligations, limitations and prohibitions,
notwithstanding those applicable thereto pursuant to the general rules of the
pertinent laws:
i) To comply with the laws, regulations and other legal provisions applicable
thereto, as well as the tax or tribute laws applicable to the Issuer or
its chattel and real estate provided, however, that the Issuer will not be
obligated to comply with such laws, regulations and legal provisions when
application or validity thereof is contested in good faith by the Issuer
through the pertinent judicial and/or administrative procedures or when
the default of such rule has no material and adverse effect, on an
aggregate basis, on the capacity and ability of the Issuer to fulfill its
obligations assumed under this Agreement, including, but not limited to,
the payment of principal and interest owed thereunder.
ii) To establish and maintain appropriate accounting systems based on
generally accepted accounting principles of Chile and to contract and
maintain an independent auditing firm of renowned national or
international prestige to examine and analyze its Financial Statements
regarding which such firm should issue an opinion as of December 31st of
each year. The Issuer shall furthermore contract and maintain on a
continuous and uninterrupted basis two risk rating agencies registered
with the Superintendency of Securities and Insurance as long as this issue
is outstanding. Such risk rating
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agencies may be replaced provided the obligation to maintain two thereof
on a continuous and uninterrupted basis is fulfilled as long as this issue
is outstanding.
iii) To send a copy of all information to the Representative in the same period
in which it should be delivered to the Superintendency by Chilean law
provided it is not confidential information. The Issuer should also send a
copy of its quarterly and annual individual and consolidated Financial
Statements to the Representative in the same period in which they must be
delivered to the Superintendency. The Issuer shall also send copies to the
Representative of the risk rating reports on the issue no later than 5
business days after receipt from its private rating agencies. Finally, the
Issuer undertakes to send the Representative all information relative to
default on any of its obligations assumed herein, particularly in this
clause, and any other material information required by the Superintendency
thereon that must be informed to creditors and/or shareholders.
iv) To inform the Superintendency of the number of Bonds in each subseries
actually underwritten within a period of 4 Business Days following: (i)
the underwriting of Bonds for a par value of ten million Unidades de
Fomento or (ii) expiration of the term for underwriting.
v) To notify the Representative of notices of regular or special shareholders
meetings in compliance with the formalities and in the periods inherent to
notice of shareholders meetings established in the by-laws or in the
Companies Law and the regulations thereto.
vi) To maintain throughout the term of this Issue goods and assets free of any
type of Lien, the book value of which is greater than or equal to 1.2
times the book value of the aggregate of obligations and debts of the
Issuer that are not secured by real guarantees on goods and assets owned
by this latter (the "Obligations"), including among such Obligations the
debts arising from this Bond Issue. For these purposes, "Liens" shall be
understood to be any mortgage, pledge or privilege or preference of those
established in articles 2474 and 2477 of the Civil Code and, in general,
any preemptive right established in favor of third parties on assets and
goods owned by the Issuer, including, without limitation, sales with title
retention,
17
financial leasing, lease-backs or any act or contract that has essentially
the same effects as the acts mentioned above but excluding (a) Liens
established to secure the payment of taxes, assessments and other charges
in favor of the Government or other public entities provided they do not
refer at the time of their constitution to the payment or performance of
obligations past due or delinquent; (b) Liens established under a judicial
resolution in guarantee of obligations that are being contested by means
of appropriate legal procedures; (c) Liens imposed by mere operation of
the law such as those imposed in favor of carriers, depositaries of
physical goods, lessors and the like, created because of operations within
the normal course of the Issuer's business; and (d) easements and rights
of way or other title retention regarding goods and transmission
facilities required to conduct the Issuer's business.
vii) Not to sell, assign, transfer, contribute or convey in any way, either for
or without valuable consideration, the Essential Assets of the Issuer as
defined herein. The prohibitions and commitments to which this numeral
refers shall not apply when the sale, assignment, transfer, contribution
or conveyance is made to a subsidiary of the Issuer. In this case, the
Issuer should maintain the status of parent company of such company to
which it transfers the Essential Assets and such subsidiary may not in
turn sell, assign, transfer, contribute or convey in any way, either for
or without valuable consideration, the Essential Assets unless such
transaction is made with a subsidiary of the Issuer or of the company, of
which it should continue to be the parent. The subsidiary of the Issuer to
which the Essential Assets are transferred or the subsidiary of thereof
that may acquire them in turn shall become - either simultaneous or prior
to the transfer of such assets - jointly and severally obligated to
payment of the Bonds issued hereunder. Furthermore, the prohibitions and
commitments to which this numeral refers shall not apply in the case of
Essential Assets that are sold or disposed of because of technical
failures, the end of their useful life, wear and tear, technology
improvements, obsolescence or any other reason reasonable and necessary
for the correct operation of the company, as determined by the management
of the Issuer, and which are replaced as necessary for correct operation
of the Company within a period of 90 days by others that meet the same
functions or serve the same purpose as the foregoing.
18
viii) Not to make investment in instruments issued by related persons, as
defined in article 100 of the Securities Market Law, nor perform other
transactions with these persons outside of its usual business under
conditions that are less favorable to the Issuer in relation to those
reigning on the market, as provided in article 89 of the Companies Law.
The Representative may request and the Issuer shall send thereto the
information on the transactions with related persons as necessary to
confirm compliance with the stipulations in this number.
ix) To make provisions for any adverse contingency that may adversely affect
its business, financial situation or operating results, which should be
reflected in the financial statements of the Issuer, if relevant,
according to generally accepted accounting criteria of Chile.
x) To maintain a level of debt individually and on a consolidated basis where
the ratio of Total Current Liabilities to Total Equity is no greater than
0.7 For purposes of calculating this ratio, Total Current Liabilities
shall be understood as the sum of items 5.21.00.00 and 5.22.00.00 of the
individual and consolidated FECU of the Issuer (or, on an equivalent
basis, the sum of items 21.000 and 22.000 in the case of the FECU format
in effect through December 31, 2000), plus all debt or obligations with
third parties of any nature that are secured by real and/or personal
guarantees of any type granted by the Issuer or by any of its
subsidiaries, including, but not limited to, collateral signatures,
sureties, joint and several debt, pledges and mortgages. Total Equity
shall be understood, on a consolidated basis, as the sum of (i) items
5.21.00.00 and 5.22.00.00 of the consolidated FECU of the Issuer (or, on
an equivalent basis, the sum of items 21.000 and 22.000, in the case of
the FECU format in effect through December 31, 2000), plus (ii) items
5.23.00.00 (Minority Interest or, on an equivalent basis, item 24.000
according to the FECU format in effect as of December 31, 2000) and
5.24.00.00 (Total Equity, or an equivalent basis, item 23.000 according to
the FECU format in effect as of December 31, 2000) of the consolidated
FECU of the Issuer from the result of which the balance of the accounts
receivable held by the Issuer against its parent company, Inversiones HQI
Chile Holding Limitada, should be subtracted. Total Equity shall be
understood to be, on an individual basis, the sum of (i) items 5.21.00.00
and 5.22.00.00 of the individual FECU of the Issuer (or, on an equivalent
basis, the sum of items 21.000 and 22.000, in the case of the FECU format
in effect through December 31, 2000), plus (ii) item
19
5.24.00.00 (Total Equity or, on an equivalent basis, item 23.000 according
to the FECU format in effect as of December 31, 2000) of the individual
FECU of the Issuer from the result of which the balance of accounts
receivable held by the Issuer against its parent company, Inversiones HQI
Holding Limitada, should be subtracted. The Issuer should send the
Representative the information that will confirm compliance with the
financial ratio to which this clause refers provided the Representative so
requests.
xi) To maintain at all times during the term of this Bond issue a minimum
individual and consolidated Equity of 15,000,000 Unidades de Fomento.
Equity is understood to be item 5.24.00.00 (Total Equity or, on an
equivalent basis, item 23.000 according to the FECU format in effect as of
December 31, 2000) of the individual and consolidated FECU of the Issuer.
xii) To contract and carry insurance that reasonably protects the operating
assets of the Issuer according to usual practices of the industry in which
the Issuer does business provided the respective insurance is available on
domestic or international insurance markets under commercial conditions
reasonable to the Issuer.
xiii) The Issuer may not conduct any other business other than the one contained
in article fourth, Section I of its bylaws unless previously approved by
the Representative.
CLAUSE FOURTEENTH: EVENTUAL MERGER, DIVISION AND TRANSFORMATION, CREATION OF
DIRECT SUBSIDIARIES
i) Merger. In the event of a merger of the Issuer with one or more companies,
either by creation or by incorporation, the new company that is
incorporated or the absorbing company, as the case may be, shall assume
each and every one of the obligations imposed upon the Issuer by this
agreement while the Issuer promises to make its best efforts not to injure
the risk rating of the Bonds issued hereunder as a result of the merger.
20
ii) Division. If the Issuer is divided, all companies arising from the
division shall be jointly and severally liable for the obligations
stipulated in this Agreement, even though it may be stipulated among them
that the obligations to pay the Bonds shall be proportional to the amount
of Equity of the Issuer allocated to each thereof under the division or
some other proportion and further notwithstanding the lawful agreements
they may make with the Representative.
iii) Transformation. If the Issuer changes its legal status, all obligations
arising under the Indenture Agreement shall be applicable to the
transformed company, without any exception.
iv) Creation of Subsidiaries. The Issuer shall communicate the creation of any
direct subsidiary thereof to the Representative in no more than 30 days as
from the date of incorporation of the subsidiary and the creation of such
subsidiary shall not affect the rights of the Bondholders nor the
obligations of the Issuer under the Indenture Agreement.
CLAUSE FIFTEENTH: DEFAULT BY THE ISSUER
The Issuer shall provide equal protection to all holders of Bonds issued
hereunder. Accordingly, in defense of the interests of Bondholders, the Issuer
expressly agrees that the Bondholders may, through the Representative under
prior resolution of the Bondholders Meeting adopted by the quorum established in
article 124 of the Securities Market Law, accelerate the unpaid balance and
interest accrued on all of the Bonds in full in advance as if it were a due
obligation should any one of the following events occur:
i) If the Issuer becomes delinquent or simply delays in the payment of
principal on the Bonds or the interest owed on the Bonds and such payments
are not made within three bank business days as from the date of the
respective maturities, notwithstanding the obligation to pay the pertinent
default interest pursuant to number seven of Clause Fourth hereof. A delay
in collection incurred by the Bondholders shall not constitute a
delinquency or simple delay.
ii) If any representation made by the Issuer in the instruments executed or
signed on occasion of the reporting obligation derived from this agreement
is or proves to be fraudulently false or incomplete.
21
iii) If the Issuer breaches any obligation acquired under Clause Thirteenth or
Clause Fourteenth and such breach is not cured within 60 days following
the date of written request for the same by the Representative by
certified mail.
iv) If the Issuer ceases payment or suspends payments or acknowledges in
writing the impossibility of paying its debts or makes a general
assignment or abandonment of assets to the benefit of its creditors or
petitions for its own bankruptcy; or if the Issuer is declared bankrupt by
firm or final and binding judicial decision; or if any procedure is filed
by or against the Issuer in order to declare it bankrupt or insolvent; or
if any procedure is filed by or against the Issuer seeking its
dissolution, liquidation, reorganization, a creditors meeting, proposals
for a judicial or extrajudicial composition or payment arrangement
pursuant to any bankruptcy or insolvency law; or if it petitions for the
appointment of a receiver, auditor or other similar officer regarding the
Issuer or a material part of the assets of any thereof, or if the Issuer
adopts any measure to allow any of such acts, provided, in the case of a
procedure against the Issuer, such procedure is not contested or disputed
legitimately by the Issuer by reasonable written information before the
courts of justice within 30 days following the commencement date of such
procedure.
v) If the Issuer becomes delinquent or simply delays in the payment of any
sum of money owed to banks or any other creditor under one or more
obligations due or accelerated that exceed individually the equivalent to
500,000 unidades de fomento on the date of the respective calculation
thereof and the Issuer fails to remedy this within 30 consecutive days
following the date of delinquency or simple delay and/or such obligation
has not been expressly extended on the date of payment thereof. A
delinquency or simple delay will be considered to exist in the payment of
any sum of money for these purposes when judicial collection actions have
been served against the Issuer and the Issuer has not contested the
pertinence and/or legitimacy of the collection by reasonable written
information before the courts of justice within 30 days following the date
it learns of the existence of the respective judicial action demanding
payment of the alleged unpaid obligation or in such shorter procedural
period that it has for the defense of its interests pursuant to law.
22
vi) If any obligation of the Issuer is accelerated (either by acceleration or
for any other reason), provided it is not a prepayment normally foreseen
prior to the stipulated expiration and provided, in any of the cases
mentioned in this number, it is a question of one or more obligations that
exceed individually 500,000 unidades de fomento on the date of the
respective calculation. An obligation shall be considered to have been
accelerated when judicial collection actions have been served against the
Issuer and the Issuer has not contested the pertinence and/or legitimacy
of the collection by reasonable written information before the courts of
justice within 30 days following the date it learns of the existence of
the respective judicial action demanding prepayment of the respective
obligation or in such shorter procedural period it has for the defense of
its interests pursuant to law.
vii) If the Issuer is dissolved or liquidated or it reduces its term of
duration to a period shorter than the ultimate period for amortization and
payment of the Bonds corresponding to this agreement.
SECTION IV
BONDHOLDERS REPRESENTATIVE
CLAUSE SIXTEENTH: WAIVER, REMOVAL AND REPLACEMENT OF THE BONDHOLDERS
REPRESENTATIVE.
The Bondholders Representative shall leave office by resignation or removal and
revocation of the mandates thereof by the Bondholders Meeting. The
representative may only resign before a Bondholders Meeting but such resignation
may not be presented before the issue to which this agreement refers has been
placed or, in default thereof, before expiration of the term for placement
thereof. The Bondholders Meeting may always remove the Representative by
revoking the mandate thereof without statement of cause. The same Bondholders
Meeting that decides on the removal and revocation or acceptance of the
resignation of the Representative should immediately appoint a replacement, who
may take office upon acceptance of such position. There shall be no need to
amend the Indenture Agreement in order to stipulate the substitution of the
Representative, but such substitution should be informed to the Securities
Registry and the Issuer on the business day following such substitution.
23
CLAUSE SEVENTEENTH: POWERS AND RIGHTS OF THE BONDHOLDERS REPRESENTATIVE
In addition to the powers corresponding thereto as attorney and those conferred
thereupon by the Bondholders Meeting, the Representative shall have all
attributions conferred thereupon by law and this agreement. The Representative
shall in particular exercise all judicial actions to defend the common interests
of the principals thereof. The Representative should express the majority intent
of his principals in the claims and other judicial proceedings he conducts but
shall not need to evidence such a fact; furthermore, there shall be no need to
indicate the name of each of such principals nor specify them individually,
sufficing therefore a statement of the capacity by which the Bondholders
Representative is acting in the corresponding instruments. The Representative
shall be empowered to examine the books and documents of the Issuer provided it
is necessary to protect the interests of his principal and may attend
shareholders meetings thereof without the right to vote. If the Bondholders
Representative must assume the individual or collective representation of all or
any of the Bondholders in the exercise of the actions applicable in defense of
the interests of the Bondholders, it should first be supplied with the funds
necessary to fulfill such assignment by the Bondholders themselves, including
among such funds the funds for payment of fees and other judicial expenses.
CLAUSE EIGHTEENTH: DUTIES AND OBLIGATIONS OF THE BONDHOLDERS REPRESENTATIVE.
In addition to the duties and obligations imposed upon the Representative
herein, the Bondholders Representative shall have all of the other obligations
established by law. The Representative shall advise the Bondholders, by notice
of meeting, of default on the obligations assumed by the Issuer hereunder within
45 Business Days as from the date it learns of such default. It shall also be
obligated, upon request by the Bondholders, to provide the information on the
essential antecedents of the Issuer that this latter must disclose pursuant to
law and that might directly affect the Bondholders always provided such
information has been sent previously thereto by the Issuer. The Representative
shall maintain the secrecy of the business, antecedents and information it
learns of in the exercise of its powers of inspection and shall be forbidden to
reveal or disclose the reports, circumstances and details of such transactions
except as strictly indispensable to performance of its functions. The
Representative may not delegate its functions. The foregoing notwithstanding,
the Representative shall not be obligated to incur expenses or
24
risk its own funds in performance of its duties or in the exercise of the rights
or powers that have been conferred thereupon except in the event of default on
the obligations imposed thereupon by the law or this agreement. The
Representative shall also verify at all times compliance by the Issuer with the
terms, clauses and obligations of this agreement according to the information
provided thereto. It is stipulated that the Bondholders Representative may
request reports from the Issuer or the external auditors thereof that are
required for an appropriate protection of the interests of the principals
thereof and shall be entitled to be fully informed through documents at any time
by the General Manager of the Issuer or the substitute thereof regarding
everything related to the course of the Company's business.
CLAUSE NINETEENTH: LIABILITY OF THE BONDHOLDERS REPRESENTATIVE.
The Representative should act exclusively in the best interests of the
principals thereof and shall be liable for ordinary negligence in performance of
its office, notwithstanding the administrative and criminal liability imputable
thereto. It is stipulated that the representations contained herein and in the
certificates of the Bonds, except with regard to specific information on the
Representative, must be considered representations made by the Issuer for which
the Representative assumes no liability with respect to their accuracy or
veracity.
CLAUSE TWENTIETH: REPORTING
As long as this issue is outstanding, the Bondholder shall be deemed informed of
the transactions and financial statements of the Issuer through the reports and
information that the Issuer shall provide to the Bondholders Representative and
to the Superintendency. Such reports and information shall be the reports and
information to be provided by the Issuer to the Superintendency pursuant to the
Securities Market Law and other administrative rules and regulations
complementing such law.
SECTION V. THE BONDHOLDERS MEETING
CLAUSE TWENTY-FIRST: THE BONDHOLDERS MEETING
25
A. The Bondholders shall meet in a Bondholders Meeting provided it is
convened by the Representative as stipulated in article 122 et seq. of the
Securities Market Law. For these purposes, the Representative may choose
to convene a Bondholders Meeting in which the Series A and B holders vote
separately, or to convene separate meetings to discuss matters that
differentiate them. The Representative shall be obligated to make the
convocation whenever it is requested in writing by Bondholders who
represent at least 20% of the par value of the Bonds in circulation; upon
request by the Issuer; and upon request by the Superintendency,
notwithstanding the powers thereof to a make a direct convocation at any
time; and when so warranted by the interests of the Bondholders, in the
exclusive opinion thereof. In order to determine the Bonds in circulation
and the par value thereof, the Issuer shall declare the number of Bonds
underwritten placed in circulation, together with the par value thereof,
by public deed that shall be annotated at the margin of the Indenture
Agreement within 10 business days following the date when all thereof have
been underwritten or on the expiration date of the term for placement.
Absent such a declaration, it may be done at any time by the
Representative with the information available thereto. In order to
determine the Bonds in circulation before the term for underwriting
thereof expires, the information shall be used that the Issuer should
provide to the Representative within five business days following date
when this latter requests such information. If said information is not
provided in the aforesaid period by the Issuer to the Representative, the
Representative shall use the information it has available for these
purposes.
B. Notice of a Bondholders Meeting shall be given by the Representative
through notices of convocation published on at least three different days
in the newspaper El Xxxxxxxx of Xxxxxxxx. The publication should be made
within 20 days prior to the date set for the meeting and the first notice
may not be published less than 15 days in advance of the meeting. In the
event of suspension or disappearance of the designated newspaper from
circulation, the publication shall be made in the Official Gazette.
C. The Bondholders Meeting shall be validly constituted under a first notice
by the presence of holders representing at least an absolute majority of
the Bonds in circulation, and under a second notice, by the Bondholders
present. In both cases, resolutions shall be adopted by an absolute
majority of the votes of those present,
26
save the cases when the law requires a higher quorum. In any case, if the
matter submitted to a decision of the meeting refers to the expiration
date of the Bonds, the interest rate, adjustments, the type of
amortization or conditions for redemption, the respective resolution
should be adopted by the series A holders and by the series B holders.
Each Bond in this issue shall confer upon the holder thereof the number of
votes in any voting resulting from dividing the par value of the
respective Bond by the maximum common divider existing between the
different values of the Bonds in the series A and series B. For these
purposes, the par values of the Bonds should be converted to pesos at the
value of the Unidad de Fomento on the fifth business day prior to the date
of the respective meeting, as applicable.
D. Bondholders Meetings may empower the Bondholders Representative to agree
to reforms hereto with the Issuer that are specifically authorized under
approval of two-thirds of the votes pertaining to the Bonds in this issue.
In any case, no reform may be approved to this agreement without unanimous
acceptance of the Bondholders if they refer to changes to the interest
rates or adjustments or the dates of payment or the amount and expiration
of the amortization of the debt.
E. The Bonds belonging to holders who are persons related to the Issuer, as
established in article 100 of the Securities Market Law, shall be not be
considered for purposes of the quorum and majorities required at meetings
in the formation of the resolutions indicated in letter D above as well as
in reference to articles 105, 112 and 120 of the Securities Market Law.
F. The election and/or re-election of the Representative, the revocation,
removal or substitution of appointees or elected persons, the
authorization for the acts required by law and in general all matters of
common interest to the Bondholder shall be the subject of deliberation and
resolution by a Bondholders Meetings.
G. The holders of bearer Bonds that have been registered in the special
registries of the Issuer at least 5 business days in advance of the date
of the respective meeting may participate in Bondholders Meetings. The
proxy of any attorney representing the Bondholder should be set down in
writing.
H. The deliberations and resolutions of the Bondholders Meeting shall be set
down in a special minutes book that shall be kept by the Representative
and each minutes
27
shall be signed by at least three of the Bondholders present at the
meeting and by all those present if less than three, in addition to the
signature of the Representative. Resolutions legally adopted at the
Bondholders Meeting shall be binding upon all the Bondholders in the
issue.
I. The expenses arising on occasion of a Bondholders Meeting, whether for the
rental of rooms, equipment, notices or publications, shall be paid by the
Issuer.
J. Bondholders may only exercise their rights individually in the cases and
ways expressly authorized by the law.
K. Bondholders who exhibit the corresponding certificate or certificates of
custody of such Bonds issued by a certified institution, provided the
latter state the series and number and the certificate or certificates,
the number of Bonds they include and the par value thereof, may be
registered in the registry in order to take part in Bondholders Meetings.
The certificate of custody exhibited by an attorney on behalf of a
Bondholder together with a notarial power of attorney shall be deemed
sufficient authority for all purposes of the respective meeting.
SECTION VI
PAYING BANK
CLAUSE TWENTY-SECOND: APPOINTMENT
The Paying Bank shall be Banco de Chile or the replacement or successor thereof,
as stipulated hereinbelow, and the function thereof shall be to act as a deputy
in the payment of interest and principal on the Bonds and to effectuate the
other proceedings and actions necessary for such purpose. The Paying Bank may be
replaced by public deed executed by and between the Issuer, the Bondholders
Representative and the new Paying Bank. Such replacement shall take effect only
once said deed is notified to the Paying Bank and annotated at the margin of the
Indenture Agreement. The Paying Bank may not be replaced 30 days prior to an
interest payment and/or amortization payment date. Banco de Chile may not be
replaced as Paying Bank until it has been replaced as Bondholders
Representative. In the event of replacement of the Paying Bank, the place of
payment of the Bond shall be the place indicated in the deed of replacement or
the domicile of the Issuer, if nothing is stated therein. Any change or
substitution of the Paying Bank for any
28
cause shall be communicated to Bondholders by notice published on two different
days in a widely circulated newspaper in the country. If for any cause no
replacement has been appointed at the time of an expiration, the principal
and/or interest payments of the Bond shall be made at the main office of the
Issuer.
CLAUSE TWENTY-THIRD: THE PAYING BANK SHALL MAKE PAYMENTS BY ORDER AND ACCOUNT OF
THE ISSUER.
The Paying Bank shall make the payments by order and account of the Issuer, who
should have sufficient funds available for such purpose in its current account
opened in such bank two bank business days in advance of the date when the
respective payment should be made. For purposes of the relations between the
Issuer and the Paying Bank, whoever presents the Bonds for collection shall be
presumed to be the legitimate holder thereof. Payments shall be made in the
principal office of the Paying Bank, currently located in this city, during
normal bank hours for the public. If the payment date does not fall on a bank
business day, payment shall be made on the next succeeding bank business day
after such payment date. The paid certificates and coupons, which will be
separated and duly cancelled, shall remain in the offices of the Paying Bank
available to the Issuer. If the Paying Bank does not receive the funds for
payment of interest and principal on the Bonds when due, it shall not make
payment without any liability thereto. If the Paying Bank has not received
sufficient funds to make all of the aforesaid payments, it shall not make any
partial payments. The Issuer shall indemnify the Paying Bank for damages
suffered by such bank in the performance of its functions as such when such
damages are due to the negligence or fault of the Issuer itself. The Paying Bank
shall be liable to the Bondholders and to the Issuer for its guilt in the
damages suffered thereby.
SECTION VII
GENERAL PROVISIONS
CLAUSE TWENTY-FOURTH: PERSONS AUTHORIZED TO SIGN CERTIFICATES
For purposes of Clause Fifth, number 12 hereof, Bond certificates shall be
signed by:
(a) On behalf of the Issuer, any one of Messrs. Xxxxxxxxx Xxxxxxxx Ihnen, Real
Xxxx-Hus, Xxxxxxxx Xxxxx Xxxxx, Xxxxxx Xxxx xx Xxxxxx or Xxxxxxx Xxxxxxxx
Xxxxx.
29
(b) On behalf of the Bondholders Representative, any one of Messrs. Xxxx
Xxxxxxxxx Xxxxxx, Xxxxxx Xxxxxxxx Xxxxxx, Xxxxx Xxxx Pefaur, Xxxxx Xxxxx
Xxxx or Xxxxxx Xxxxxxxx Xxxxxxx.
CLAUSE TWENTY-FIFTH: ARBITRATION
The differences arising on occasion of the Bond issue to which this agreement
refers, the effectiveness or extinction hereof, whether arising among the
Bondholders or the representative thereof or between the latter and the Issuer,
shall be submitted to the decision of a mixed arbitrator. This arbitration may
be prosecuted by the Issuer or by the Bondholders Representative, this latter
acting by virtue of office or under resolution adopted by the Bondholders
Meeting pursuant to letter C of Clause Twenty-first hereof. The arbitration may
also be prosecuted individually by any of the Bondholders in the case of
objections to the validity of certain resolutions adopted by the Bondholders
Meeting, disputes arising between the Bondholders and the Representative or the
defense of such rights conferred upon them by law for individual exercise. The
respective arbitrator shall be appointed by the disputing parties and in absence
of agreement, the appointment thereof shall be made by the ordinary courts, in
which case the appointment should fall upon an attorney who has been a professor
in the subject of civil law or commercial law at the University of Chile or the
Pontifical Catholic University of Chile for at least three years. There shall be
no remedy whatsoever against the resolutions rendered by the arbitrator except
for the remedy of complaint. The foregoing is notwithstanding the
unrelinquishable right of the Bondholders to resort to the ordinary courts.
CLAUSE TWENTY-SIXTH: DOMICILE.
For all purposes hereof, the Parties elect their domicile as the city and
borough of Xxxxxxxx.
CLAUSE TWENTY-SEVENTH: STIPULATION
It is stipulated that no extraordinary trustee, custodian or rating experts need
to be appointed for this Bond issue in accordance with article 112 of the
Securities Market Law.
30
CLAUSE TWENTY-EIGHTH: SUBSIDIARY RULES AND INHERENT RIGHTS
The pertinent laws and regulations shall apply in subsidy to the stipulations
herein as well as the rules, rulings and instructions issued now or in the
future by the Superintendency.
AUTHORITY:
The authority of Xx. Xxxxxxxxx Xxxxxxxx Ihnen to act on behalf of HQI Transelec
Chile S.A. is evidenced in the resolution of the Board of Directors adopted at a
meeting held February 2, 2001, executed to public deed on that same date in the
Santiago Notarial Office of Xx. Xxxxxxxx Xxxxx Xxxxxxx.
The authority of Xx. Xxxx Xxxxxxxxx Xxxxxx to represent Banco de Chile is
evidenced in the public deed dated January 27, 1989, all extended before the
Santiago Notary Public Xx. Xxxx Xxxxxxxxx Cash.
Moreover, the authority of Xx. Xxxxx Xxxx Pefaur to act on behalf of Banco de
Chile is evidenced in the public deed dated September 13, 1991, notarized by Xx.
Xxxx Xxxxxxxxx Cash of Santiago.
In witness whereof, the parties sign after reading. This deed is annotated in my
repertory on even date under No. 4668. I attest.
/s/ Xxxxxxxxx Xxxxxxxx Ihnen
------------------------------
Xxxxxxxxx Xxxxxxxx Ihnen
for HQI TRANSELEC CHILE S.A.
/s/ Xxxx Xxxxxxxxx Xxxxxx
------------------------------
Xxxx Xxxxxxxxx Xxxxxx
for BANCO DE CHILE
31
/s/ Xxxxx Xxxx Pefaur
------------------------------
Xxxxx Xxxx Pefaur
for XXXXX XX XXXXX
00
