Document:

Prepared by R.R. Donnelley Financial -- Amendment No. 1 to Membrane Testing Agreement

 EXHIBIT 10.25 
  
 [ * ] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN OMITTED AND FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 406 OF THE SECURITIES ACT OF 1933, AS AMENDED. 
  

 AMENDMENT NO. 1 TO 
 MEMBRANE TESTING AGREEMENT 
  
 This Amendment No. 1 to Membrane Testing Agreement (“Amendment”) is effective this 17th day of May,
2004, by and between Hoku Scientific, Inc., a Hawaii corporation located at 2153 North King Street, Suite 300, Honolulu, Hawaii 96819 USA (“HOKU”), and Nissan Motor Co., Ltd. located at 2 Takara-cho, Kanagawa-ku, Yokohama,
Kanagawa 220-8623 Japan (“NISSAN” and, together with HOKU, the “Parties”). 
  
 BACKGROUND & PURPOSE 
  
 HOKU and NISSAN are parties to that certain Membrane Testing Agreement dated as of March 19, 2004 (the “Agreement”). 

 
 NISSAN desires HOKU to perform additional testing of HOKU MEA at the HOKU
Facility as set forth herein. 
  
 For good and valuable
consideration, the receipt and adequacy of which is hereby acknowledged, the Parties agree as follows: 
  
 AGREEMENT 
  
 1. Definitions. All capitalized terms in this Amendment that are not otherwise defined herein shall be defined as set forth in the Agreement. 
  
 2. Completion of HOKU Testing. The Parties acknowledge and agree that each Party’s respective obligations set
forth in Sections 2 and 3 of the Agreement have been substantially performed and satisfied as of the date of this Amendment. 
  
 3. Confidentiality. Without limiting the terms of the Confidentiality Agreement, the terms of this Amendment, the testing to be performed pursuant
to this Amendment, and the results of any such testing, shall be deemed Confidential Information as defined in the Confidentiality Agreement. 
  
 4. Additional HOKU Testing. HOKU shall perform the additional tests of HOKU MEA that are described on Appendix A (“Additional
HOKU Testing”). All Additional HOKU Testing shall be performed at the HOKU Facility. 
  
 4.1. HOKU Testing Results. Upon completion of the Additional HOKU Testing, HOKU shall provide NISSAN with a written summary of the results of the
HOKU Testing (the “Additional Testing Report”). The Additional Testing Report shall be provided in hard copy and electronic formats. Such results shall be considered Confidential Information pursuant to the Confidentiality
Agreement. NISSAN may ask questions regarding the Additional Testing Report for a period of 2 months following completion of the Additional HOKU Testing. 
  
 5. Costs. NISSAN agrees to subsidize the costs for HOKU to perform the Additional HOKU Testing in the amount of [ * ] (the
“Additional Testing Cost”). HOKU shall deliver to NISSAN the Additional Testing Report immediately after the completion of the Additional HOKU Testing, and NISSAN shall, immediately upon receipt thereof, inspect the same to
verify whether the Additional HOKU Testing is performed in accordance with the description in Appendix A. In the event that the Additional Testing Report proves that the Additional HOKU Testing is completed in accordance with the 
  

							
	 HOKU Initials & Date
	 	 /s/ D.S. May 19, 2004

	 	 NISSAN Initials & Date
	 	 /s/ H.T. May 17, 2004

  
 Page 1 

 [ * ] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN
OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 406 OF THE SECURITIES ACT OF 1933, AS AMENDED. 
  

 description in Appendix A, NISSAN shall notify HOKU in writing of the inspection clearance. HOKU, after receiving
such inspection clearance, shall deliver to NISSAN an invoice and NISSAN shall, within [ * ] after receipt of such invoice from HOKU, pay HOKU for the Additional Testing Cost up to the amount specified in the invoice. [ * ] shall bear
[ * ] costs and expenses incurred in connection with the Additional HOKU Testing, including but not limited to travel costs if applicable. 
  
 6. Survival of Agreement; Extension of Term. Except as otherwise set forth herein, the terms of the Agreement survive the execution of this
Amendment; provided, however, that the term of the Agreement and this Amendment shall be extended until the earlier of (a) when HOKU delivers the Additional Testing Report and NISSAN pays any unpaid amount of the Testing Cost and the Additional
Testing Cost; and (b) January 15th, 2005 (the expiration date of the Confidentiality Agreement), but may be further extended by mutual written agreement of the Parties. Sections 5 through 7, inclusive, of the Agreement are incorporated herein by
reference. To the extent of any inconsistency between this Amendment and the Agreement, the terms of this Amendment shall be binding upon the Parties. 
  
 (Signature Page Immediately Follows) 
  

							
	 HOKU Initials & Date
	 	 /s/ D.S. May 19, 2004

	 	 NISSAN Initials & Date
	 	 /s/ H.T. May 17, 2004

  
 Page 2 

 [ * ] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN
OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 406 OF THE SECURITIES ACT OF 1933, AS AMENDED. 
  

 IN WITNESS WHEREOF, the Parties have executed this Amendment No. 1 to Membrane Testing Agreement as of the date first
set forth above. 
  

							
	 NISSAN:
  
 NISSAN MOTOR CO., LTD.
	 	 HOKU:
  
 HOKU SCIENTIFIC, INC.

				
	 By:.
	 	 /s/ Hideyuki Tamura

	 	 By:
	 	 /s/ Dustin M. Shindo

	 Name:
	 	 Hideyuki Tamura
	 	 Name:
	 	 Dustin M. Shindo

	 Title:
	 	 General Manager,
 Technology Research Laboratory No.2
	 	 Title:   Hoku Scientific, Inc.
 Chairman & CEO

	 Nissan Motor Co., Ltd.
 Authorized Signatory
	 	 Authorized Signatory

  

 SIGNATURE PAGE TO AMENDMENT
NO. 1 TO MEMBRANE TESTING AGREEMENT 

 [ * ] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN
OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 406 OF THE SECURITIES ACT OF 1933, AS AMENDED. 
  

 APPENDIX A 
  
 ADDITIONAL HOKU TESTING 
 [ * ] 
  
 Time Period: 
  
 Testing and work related
to this agreement will take place a period of [ * ] after the effective date stated above. 
  

							
	 HOKU Initials & Date
	 	 /s/ D.S. May 19, 2004

	 	 NISSAN Initials & Date
	 	 /s/ H.T. May 17, 2004

  
 APPENDIX
A-1Share Purchase Agreement

 Exhibit 4.6 
  

JOURNAL No. 4151 – 2004 
  
 SHARE PURCHASE AGREEMENT 
  
 BY AND BETWEEN 
  
 COMPAÑIA DE TELECOMUNICACIONES DE CHILE S.A. ET AL. 
  
 AND 
  
 INVERSIONES TELEFONICA MOVILES HOLDING LIMITADA ET AL. 
  
 In Santiago, Chile, on July 23, 2004, before me, RAUL UNDURRAGA LASO, attorney, notary public of Santiago, of this domicile, MacIver 225, Suite 302,
Regular Notary of Notarial Office No. 29, there appeared: 
  
 COMPAÑÍA DE TELECOMUNICACIONES DE CHILE S.A., a Chilean stock corporation, taxpayer identification No. 90.635.000-9, validly incorporated by public deed executed November 18, 1930, before Mr. Javier Etcheverría, Notary,
registered on page 426, No. 158, of the 1931 Commercial Registry of the Santiago Real Estate Registrar, represented, as shall be evidenced at the end, by Mr. CLAUDIO MUÑOZ ZUÑIGA, Chilean, married, civil industrial engineer, identity
card No. 9.618.122-1, both domiciled, for these purposes, at. Providencia 111, 29th floor, borough of Providencia, Santiago (hereinafter “CTC”), and COMPAÑIA DE TELECOMUNICACIONES DE CHILE-EQUIPOS Y SERVICIOS S.A., a Chilean stock
corporation, taxpayer identification No. 96.545.500-0, validly incorporated by public deed executed December 1, 1998 before Mr. Mario Baros, Notary, registered on page 964, No. 461 of the 1989 Commercial Registry of the Santiago Real Estate
Registrar, represented, as shall be evidenced at the end, by Mr. Cristián Aninat Salas, Chilean, attorney, married, identity card No. 6.284.875-8, both domiciled, for these purposes, at Providencia 111, 7th floor, borough of Providencia,
Santiago (hereinafter “CTC Equipos” and collectively with CTC, the “Sellers”); and 
  
 Mr. JORGE ABADIA POZUELO, Spaniard, married, economist, passport No. Q179250, and Mr. MIGUEL GARRIDO DE LAS HERAS, Spaniard, single, attorney, passport
No. P350698, both domiciled at Goya 24, 28001, Madrid, Spain, and transitorily in this city, both in the name and on behalf of, as shall be evidenced, INVERSIONES TELEFONICA MOVILES HOLDING LIMITADA (hereinafter “Holding”), a limited
liability company, taxpayer identification No. 76.124.890-1, and of TEM INVERSIONES CHILE LIMITADA, a limited liability company, taxpayer identification No. 76.124.920-7, hereinafter “TEM INVERSIONES” and collectively with Holding the
“Purchasers,” all domiciled, for these purposes, at Gertrudis Echeñique 30, 12th floor, borough of Las Condes, Santiago, among whom the following Share Purchase Agreement has been agreed: 
  
 WHEREAS: 
  
 1. CTC is the owner of 2,660,991,949 shares issued by Telefónica Móvil de Chile S.A. (hereinafter the
“Company”) that are set down in certificate No. 16 for 99.999997% of the share capital of the Company, free of any pledge, lien, usufruct, attachment, prohibition, litigation, third-party priority right, resolutory conditions, options and
any other right or interest in respect thereof (the “CTC Shares”). 
  

 1 

 2. CTC Equipos owns 8,051 shares issued by the Company, set out in Certificate No. 15, representing
0.000003% of the share capital of the Company, free of any pledge, lien, usufruct, attachment, prohibition, litigation, third-party priority right, resolutory conditions, options and any other right or interest in respect thereof (the “CTC
Equipos Shares”). 
  
 3. The Company is a closed stock
corporation validly incorporated by public deed executed March 8, 1996, before Mr. Raúl Undurraga, Notary, registered on page 6,301, No. 5,197, of the 1996 Commercial Registry of the Santiago Real Estate Registrar, an abstract of which was
published in the Official Gazette on March 16, 1996, and it is currently in good standing pursuant to Chilean law and engages in “the establishment, installation, administration, marketing and development of telecommunication facilities,
equipment, systems and terminals for the rendering and exploitation of telecommunication services. It shall render service preferentially for telecommunications of business and social centers of development; rural and remote localities and, in
general, for all telecommunication needs of the community.” 
  
 4. The equity capital of the Company as of December 31, 2003 totaled 201,991,478,572 pesos, divided into 2,661,000,000 shares in one same series with no par value, free of any pledge, lien, usufruct, attachment, prohibition, litigation,
third-party priority right, resolutory conditions, options and any other right or interest in respect thereof. 
  
 5. On May 18, 2004, CTC signed a binding letter of offer presented by Telefónica Móviles S.A. (hereinafter “TEM”) whereby the
Parties set down the essential terms and conditions under which TEM would acquire the Shares directly or indirectly (hereinafter the “Letter of Offer”), CTC agreeing that the price for the purchase of the CTC Shares included, by way of
consideration, the fulfillment of all obligations and/or prohibitions contained in the Letter of Offer in its regard. 
  
 6. On May 18, 2004, the Board of Directors of CTC approved the transfer of 100% of the CTC Shares to TEM under the required legal and by-law majorities.

  
 7. On July 15, 2004, the Special Shareholders Meeting of CTC
approved the direct or indirect transfer of 100% of the CTC Shares to TEM under the required legal and by-law majorities provided TEM increase the price of the purchase of the Shares so as to cover the capital gains tax accruing as a consequence of
the sale of the Shares under the conditions of the Letter of Offer, with a ceiling of 51 million U.S. Dollars, the amount estimated by the Board of Directors of CTC to pay such tax according to the data available thereto that was made available to
its shareholders prior to such meeting. TEM accepted the new conditions in accordance with the resolution of the CTC Shareholders Meeting held July 15, 2004, which it notified to CTC on July 23, 2004. 
  
 8. On June 30, 2004, the Board of Directors of CTC Equipos approved the
direct or indirect transfer of 100% of the CTC Equipos Shares to TEM. 
  
 9. The remaining conditions to which the consummation of the Share purchase was subject have been fulfilled prior to the signature of this Agreement. 
  

10. The Sellers are interested in selling and the Purchasers are interested in buying the Shares according to the terms and conditions contained in the
Letter of Offer and the resolution adopted at the Special Shareholders Meeting of CTC and the Board of Directors of CTC Equipos that have been incorporated to this share purchase agreement (hereinafter the “Agreement”), which they
implement in accordance with the following stipulations: 
  
 FIRST: DEFINITIONS

  
 For purposes hereof, the following terms shall have the
meaning given in the definitions set out below: 
  
 SHARES:
The CTC Shares and the CTC Equipos Shares. 
  
 CTC SHARES:
shall have the meaning indicated in the first recital of this Agreement. 
  
 CTC EQUIPOS SHARES: shall have the meaning indicated in the second recital of this Agreement. 
  

 2 

 PURCHASERS: Holding and TEM Inversiones. 
  
 SCHEDULES: All documents attached to the Agreement that form an
integral part of the same. 
  
 CTC: Compañía
de Telecomunicaciones de Chile S.A. 
  
 CTC Equipos:
Compañía de Telecomunicaciones de Chile – Equipos y Servicios S.A. 
  
 Letter of Offer: shall have the meaning indicated in the fifth recital of this Agreement. 
  
 Final Debt: shall have the meaning indicated in Section 3.3.c of Clause Third hereof. 
  
 Outstanding Clauses of the Letter of Offer: shall have the meaning indicated in Section 12.1 of Clause Twelfth
hereof. 
  
 CLP: Chilean pesos, legal tender in the
Republic of Chile. 
  
 Agreement: This Share Purchase
Agreement between the Sellers and the Purchasers, including all Schedules thereto. 
  
 Debt: The following obligations of the Company: 
  
 (a) Payment obligations resulting from a loan, credit or any other type of finance transaction; 
  
 (b) Payment obligations for bonds, promissory notes, convertible bonds or similar instruments; 
  
 (c) The mercantile current account with CTC; 
  
 (d) Debt acknowledgements made by the Company in favor of CTC; 
  
 (e) Payment obligations under financial leases, except for those indicated in
Note 19 of the Financial Statements of the Company as of March 31, 2004, corresponding to offices and vehicles of the Company; 
  
 (f) Payment obligations arising from time payment of the acquisition or lease of goods or services (excluding payment obligations arising in the ordinary
course of business but considering any time payment accruing interest to be Debt). 
  
 (g) Net payment obligations resulting from interest, exchange rate or similar derivative transactions; 
  
 (h) Payment obligations resulting from the repurchase of redeemable or convertible securities assumed by the Company; 
  
 (i) Any of the obligations indicated in letters (a) to (h) assumed by other
persons provided that such payment obligations have been secured in any way by the Company; and 
  
 (j) Any other obligation that may be considered debt according to generally accepted accounting principles in the Republic of Chile. 
  
 The debt of the Company’s subsidiaries shall be considered Debt of the
Company. 
  
 Debt Calculated by the Purchasers: shall have
the meaning indicated in Section 3.3.a of Clause Third hereof. 
  
 Maximum Debt: shall have the meaning indicated in Section 3.3 of Clause Third hereof. 
  
 Business Days: Those days other than Saturdays and Sundays on which banks generally do business in the cities of Santiago (Chile) and Madrid
(Spain). 
  
 Financial Statements: shall have the meaning
indicated in Clause Sixth hereof. 
  

 3 

 Holding: Inversiones Telefónica Móviles Holding Limitada. 
  
 Confidential Information: Any information relating hereto supplied in
writing or verbally by one of the Parties to the other. 
  
 LIBOR: (a) The annual rate appearing on the LIBOR 01 Reuters Screen for U.S. Dollar deposits of an amount that is equal or similar to the Estimated Price for one week, as published around 11:00 a.m. on the Business Day following the
date of signature of this Agreement or, if such page or service is no longer available, on such other screen page or service of this type selected by the Parties; or 
  
 (b) If no quotation for U.S. Dollars appears for the period in question and the Parties have not selected an alternative
service from which such a quotation can be seen, the arithmetic average (rounded upwards to ten-thousandths of a point) of the rates that three of the prime European Banks are offering for U.S. Dollar deposits to the prime banks on the European
Interbank Market for that period at 11:00 a.m. (London Time) on the Business Day following the date of signature hereof. A year of 360 days shall be used as the basis for calculation of the interest to be settled on the corresponding date, such
interest to be calculated for the exact number of days between this date and the date of actual payment of the Estimated Price. 
  
 Party: The Sellers or the Purchasers, individually. 
  
 Parties: The Sellers and the Purchasers, collectively. 
  
 Estimated Price: shall have the meaning indicated in Section 3.1 of clause third hereof. 
  
 Final Price: shall have the meaning indicated in Section 3.3 of Clause
Third hereof. 
  
 Company: shall have the meaning indicated
in the first recital of this Agreement. 
  
 TEM:
Telefónica Móviles S.A. 
  
 TEM INVERSIONES:
TEM Inversiones Chile Limitada. 
  
 Exchange Rate: The
average of the observed peso/dollar exchange rates in the five Business Days prior to the date of the shareholders meeting indicated in recital 7. 
  
 USD: Dollars of the United States of America, the legal tender of the United States of America. 
  
 Sellers: CTC and CTC EQUIPOS. 
  
 SECOND: TRANSFER OF THE SHARES IN THE COMPANY. 
  
 The Sellers, represented in the manner indicated in the preamble, hereby
sell, assign and transfer the Shares to the Buyers, who, duly represented in the manner indicated in the preamble, buy and acquire such Shares pro se, as follows: 
  
 (a) CTC sells, assigns and transfers the CTC Shares to TEM Inversiones, who, duly represented in the manner indicated in the
preamble, buys and acquires the CTC Shares pro se; and 
  
 (b) CTC
EQUIPOS sells, assigns and transfers the CTC EQUIPOS Shares to HOLDING who, duly represented in the manner indicated in the preamble, purchases and acquires the CTC EQUIPOS Shares pro se. 
  
 THIRD: PRICE 
  
 3.1 The price set by the Parties for the transmission of the Shares is 1,057,875,999 Dollars (hereinafter the “Estimated Price”), 99.999997% of
which shall be paid by TEM INVERSIONES to CTC and 0.000003% of which shall be paid by HOLDING to CTC EQUIPOS. The Parties agree that the Estimated Price may be subject to adjustment according to Section 3.3 of this Clause Third. 
  

 4 

 3.2 The Estimated Price will be paid in U.S. dollars by TEM INVERSIONES to CTC and by HOLDING to CTC
EQUIPOS no later than July 28, 2004, by wire transfer to current account No. 456061647841 of ABN AMRO Bank, New York, NY, via Fed Funds – Fed Routing 026-009-580, Via Chips 0958, for account of Compañía de Telecomunicaciones de
Chile S.A. de C.V., Santiago, Chile. The Estimated Price shall accrue interest from the date of signature hereof to the date of payment at an annual interest rate equal to LIBOR. Provided TEM has not paid the Estimated Price by July 28, 2004 for
reasons attributable to TEM or the intermediaries thereof, the Estimated Price shall begin to accrue default interest at an interest rate equal to 5% annually. 
  

3.3 The Purchasers and the Sellers represent that the Estimated Price has been calculated under the assumption that the Debt of the Company on the date
of the CTC shareholders meeting indicated in the seventh recital hereof is no greater than CLP 161,440,964,893 (hereinafter the “Maximum Debt”) and that, therefore, the Estimated Price will be reduced provided the Debt on this date is
greater than such amount, all according to the procedure described below: 
  
 (a) During the period of 30 days following the date of signature hereof, the Purchasers shall send the Sellers a certificate stating in sufficient detail their estimates of the amount of the Debt on the date of the
CTC shareholders meeting indicated in the seventh recital hereof (“Debt Calculated by the Purchasers”). Provided the Purchasers do not send the Sellers the amount of the Debt Calculated by the Purchasers in that period, they shall be
deemed for all purposes to waive their right to adjust the Estimated Price pursuant to Section 3.3.(b). During 10 days following receipt by the Sellers of the Debt Calculated by the Purchasers, the Sellers shall notify the Purchasers of their
agreement or disagreement with the same, it being understood, in absence of communication, that they agree with the Debt Calculated by the Purchasers. 
  
 (b) Provided the Sellers have stated their disagreement with the amount of the Debt Calculated by the Purchasers, the Parties shall try to negotiate in
good faith during a period of 10 days after receipt by the Purchasers of the notice by the Sellers stating their disagreement with the Debt Calculated by the Purchasers. If the Parties are unable to reach an agreement in such period of 10 days, any
thereof may submit the dispute to PricewaterhouseCoopers (hereinafter “PWC”), who, in the period of 30 days after appointment thereof, extendible for another period of 30 days, shall render a decision on the amount of the Debt on the date
of the CTC shareholders meeting indicated in the seventh recital hereof. The expenses of PWC shall be paid by the Party whose claim is furthest from the final decision of PWC. The decision thus rendered by PWC shall be deemed final and binding upon
both Parties and not subject to any remedy nor to arbitration pursuant to Section 15.2 of Clause Fifteenth. The Parties promise to deliver all information to PWC that it reasonably requests to be able to perform the entrusted task. The Debt on the
date of the CTC shareholders meeting indicated in the Seventh Recital hereof agreed upon by the Parties or determined by PWC shall be called the “Final Debt.” 
  
 (c) Provided the Final Debt is greater than the Maximum Debt, the Estimated Price shall be reduced by the amount of such
difference and the resulting sum shall be considered the Final Price. For such purposes, the difference between the Maximum Debt and the Final Debt shall be converted from CLP to USD using the Exchange Rate. Each Seller shall pay the respective
Purchaser the percentage corresponding thereto (based on the number of Shares transferred by each Seller hereunder) of the amount in US$ of the difference between the Estimated Price and the Final Price. Payment of the difference shall be made by
each Seller in same-day funds to the current account notified by each Purchaser to each Seller for such purpose in the non-extendible period of 5 Business Days following notice of the Final Debt by PWC or the date when the Parties have reached an
agreement on the Final Debt. 
  
 3.4 The Shares include all assets
and profits retained or accumulated in previous fiscal years, including those in the fiscal year ending December 31, 2003 that have not been distributed on this date, whether definitive or interim, as well as those from the actual fiscal year under
way and any declared dividends, whether final or interim, and that have not yet been distributed on this date in respect of the Shares. 
  
 FOURTH: DELIVERY OF DOCUMENTATION SIMULTANEOUS TO SIGNATURE OF THIS AGREEMENT. 
  
 The Sellers hereby deliver to the Purchasers: 
  
 1. Certificates representing the Shares. 
  

 5 

 2. All corporate books of the Company, including the Board Meeting Book; 
  
 3. Shareholders Meeting Book; 
  
 4. Shareholders Registry and the public registry stipulated in Article 135 of
the Companies Law. 
  
 5. Authenticated copies of the public deeds
to which the minutes of CTC and CTC EQUIPOS Boards of Directors Meetings were executed in which the signature and execution of this Agreement were authorized by the Sellers. 
  
 6. An authenticated copy of the public deed to which the minutes of the CTC Shareholders Meeting were executed in which the
signature and execution of this Agreement were authorized by CTC. 
  
 7. The letters of resignation of directors Bruno Philippi, Claudio Muñoz, Andrés Concha, Luis Cid and Julio Covarrubias. 
  
 8. Minutes of the Special Shareholders Meeting of the Company held on this date at which the new members of the Board of Directors of the Company were
appointed. 
  
 FIFTH: ACTS TO BE PERFORMED ON THE DATE OF PAYMENT OF THE
ESTIMATED PRICE. 
  
 5.1 Payment of the Debt. On the
date of payment of the Estimated Price, i.e. no later than July 28, 2004, Holding, under the knowledge and consent of the Company, shall pay CTC the total amount of the Debt maintained by the Company with CTC on such date by wire transfer to current
account No. 10184384 with Banco de Crédito e Inversiones in the name of Compañía de Telecomunicaciones de Chile S.A. As a consequence of such payment, CTC shall represent and warrant that the Company owes CTC no sum for the
following reasons: 
  
 (a) The mercantile current account
agreement made between CTC and the Company; 
  
 (b) Debt
acknowledgement for the credit granted to the Company by Chase; 
  
 (c) Debt acknowledgement for the credit granted to the Company by EKN-Citibank. 
  
 5.2 Delivery of Documentation. On the date of payment of the Estimated Price, i.e. no later than July 28, 2004, after payment of the Estimated Price pursuant to Section 3.2 of Clause Third above and after
payment of the Debt mentioned in section 5.1 above, CTC shall deliver to the Purchasers: 
  
 1. A letter issued by CTC and accepted by the Company stating that all Debt of the Company owed to CTC has been paid and specifying that after payment, the Company owes CTC no sum for the following reasons:

  
 (a) The mercantile current account agreement signed by CTC
and the Company on January 2, 1998; 
  
 (b) The debt
acknowledgement for the credit granted to the Company by Chase on May 30, 2001, terminating the relationship existing between the Parties; and 
  
 (c) The debt acknowledgement for the credit granted to the Company by EKN-Citibank on March 30, 2001, terminating the relationship existing between the
Parties. 
  
 Such letter is attached to this Agreement as Schedule
1; and 
  
 2. A letter of payment for the Estimated Price
according to the form attached hereto as Schedule 2. 
  
 SIXTH: REPRESENTATIONS
AND WARRANTIES OF THE SELLERS. 
  
 The Sellers make the
following representations and warranties that constitute an essential reason for consent by the Purchasers and a fundamental element of the different obligations set down herein. 
  

 6 

 6.1 Incorporation and Good Standing of the Sellers 
  
 CTC and CTC EQUIPOS are duly incorporated and registered in accordance with
the legislation of the Republic of Chile. They are in no legal situation of insolvency or suspension of payments and there is no reason for any type of declaration of insolvency, and they have the capacity to conduct their actual activities, own and
manage their properties and assets. 
  
 6.2 Incorporation and
Good Standing of the Company 
  
 The Company is duly
incorporated and registered in accordance with the legislation of the Republic of Chile. It is in no legal situation of insolvency or suspension of payments and there is no reason whatsoever for any type of declaration of insolvency, and it has the
capacity to conduct its actual activities, own and manage its properties and assets. 
  
 6.3 By-Law Requirements 
  
 CTC and CTC EQUIPOS have full capacity and are in compliance with all legal and by-law requirements necessary to formalize this Agreement, consummate the transfer of the Shares and fulfill the obligations imposed by this Agreement. CTC and
CTC EQUIPOS shall not, by formalization and performance of this Agreement, infringe any legal or administrative provision, agreement, contract or commitment by which they are bound. 
  
 6.4 Equity Capital and Shares 
  
 The equity capital of the Company is the sum of CLP 201,991,478,572, fully subscribed and paid-in, approved by the Regular
Shareholders Meeting of April of this year, and it is divided into 2,661,000,000 shares with no par value, in one same class and series, and CTC and CTC EQUIPOS are the sole and legitimate holders of the Shares that constitute 100% of the equity
capital of the Company. There are no options or commitments relative to Shares nor expansions, reductions or commitments of capital pending registration or in the process of being made, nor is there any contract or commitment that obligates any of
the Sellers or the Company to issue, exchange or otherwise convey or purchase, amortize or otherwise acquire Shares in the Company. The Shares are exempt from any restrictions in the exercise of the rights they represent as well as free of any
charge, lien, title retention, option, limitation or right in favor of any person as well as any options, agreements, commitments, claims, attachments, assessments or liens and there is no debt in relation thereto. The transfer of the Shares shall,
as of this date, confer upon Holding and TEM INVERSIONES full ownership and unconditional legal title to and possession of the Shares and the Sellers shall always guarantee such holding in respect of any persons who claim it, cooperating with the
Purchasers in the same and not performing any acts contrary to such purpose. All of the rights and obligations of the shareholders in the company for that reason are set down in the by-laws thereof that the Purchasers declare to know and accept in
their entirety, and there are no rights, obligations or commitments of any kind apart therefrom. 
  
 6.5 Distribution of Dividends 
  
 The Company does not owe its shareholders nor does it have the obligation to distribute thereto any sum for any reason, including, without limitation,
dividends, capital reductions or interim dividends. 
  
 6.6
Financial Statements 
  
 The financial statements of the
Company closed as of March 31, 2004, as of December 31, 2003 and as of December 31, 2002 (hereinafter the “Financial Statements”) that the Purchasers declare to know are complete, accurate, true and have been prepared in accordance with
the generally accepted accounting principles and standards of the Republic of Chile and applied uniformly by the Company in previous fiscal years. The Financial Statements accurately reflect in all material aspects the assets, liabilities and
financial and economic situation of the Company on their respective dates as well as the results of operations for the periods ending on those dates in accordance with the generally accepted accounting principles in the Republic of Chile applied
uniformly. 
  
 6.7 As of March 31, 2004, the Financial Statements
accurately reflect in all material aspects the assets, liabilities, financial and economic situation of the Company on that date, and the results of operations regarding the periods ending on those dates—that are furnished as Schedule
3—contain no liabilities that accrue interest except for those listed below: 
  
 (a) The mercantile current account with CTC. 
  

 7 

 (b) Debt acknowledgments made by the Company in favor of CTC indicated in Sections 4.1.(b) and (c) of
Clause Fifth hereof; and 
  
 (c) The statements in Note 19 of the
Financial Statements of the Company as of March 31, 2004, corresponding to the financial leases of the offices and vehicles of the Company. 
  
 The Company has no liabilities or contingencies outside of the balance sheets contained in the Financial Statements. 
  
 6.8 Directors and Representatives. 
  
 Schedule 4 contains details on the members of the Board and Management of
the Company. The only general powers of attorney of representation granted by the Company are those included in Schedule 5. 
  
 6.9 Compliance with the Law 
  
 The Company has complied strictly and continues to comply with the laws and other rules that are applicable thereto and has not committed any material
infringement in the last 5 years of the laws and regulations applicable thereto and to the conduct of its business. 
  
 6.10 Ongoing Concern 
  
 The business of the Company is self-sufficient and shall continue to be after perfection of this Agreement, independently and separately from any person
related to the Sellers, as it was being operated immediately prior to the date of this Agreement, which the Purchasers declare to know. 
  
 6.11 Taxes on the Purchase 
  
 Provided the Estimated Price totals US 1,006,875,999, the capital gains tax accruing as a consequence of the purchase of the Shares in the Company will
total at least US$51 million Dollars pursuant to recital seventh. 
  
 6.12 Conditions of the Purchase 
  
 All terms and
conditions of the purchase of the Shares contemplated herein comply with the conditions approved by the CTC Shareholders Meeting held July 15, 2004 for the sale of the Shares by CTC, including the amount of the Estimated Price. 
  
 SEVENTH: REPRESENTATIONS AND WARRANTIES BY THE PURCHASERS 
  
 The Purchasers make the following representations and warranties that
constitute an essential reason for the consent of the Sellers and a fundamental element of the different obligations set down herein: 
  
 7.1 Incorporation and Good Standing of the Purchasers. 
  
 The Purchasers are duly incorporated and registered in accordance with the legislation of the Republic of Chile. They are in no legal situation of
insolvency or suspension of payments and there is no reason for any type of declaration of insolvency, and they have the capacity to conduct their actual activities, own and manage their properties and assets. 
  
 7.2 By-Law Requirements 
  
 The Purchasers have full capacity and are in compliance with all legal and
by-law requirements necessary to formalize this Agreement, consummate the purchase of the Shares and fulfill the obligations imposed by this Agreement. The Purchasers are not in default on any legal or administrative provision, agreement, contract
or commitment by which they are bound because of the formalization and performance of this Agreement. 
  

 8 

 EIGHTH: NON-COMPETITION 
  

CTC undertakes, pro se and on behalf of its respective controlled persons, for a period of 2 years as from the date of signature hereof, on the Chilean
market: 
  
 (a) not to acquire and/or participate directly or
indirectly in the ownership or management of a company in the mobile telephone sector existing now on the Chilean market; and 
  
 (b) not to acquire in any way or participate in the management of a mobile telephone concession. 
  
 NINTH: INDEMNITY OBLIGATION 
  
 9.1 The Sellers shall be jointly and severally liable to the Purchasers
within the framework of this Agreement and unequivocally and unrenounceably undertake to indemnify and hold each Purchaser harmless for any loss, damage, injury or expense (including reasonable attorneys’ expenses) incurred by any Purchaser or
by the Company as a consequence of: 
  
 (1) Default on any of the
obligations assumed by any Seller under this Agreement or the Outstanding Clauses of the Letter of Offer, including the non-competition obligation contained in Clause Eighth above. 
  
 (2) The inaccuracy, mendacity or default on any of the representations, warranties or covenants acquired by any Seller
within the purview of this Agreement or its Schedules, including the warranties contained in Clause Sixth above or the Outstanding Clauses of the Letter of Offer; or 
  
 (3) The inaccuracy of the representation made by the Sellers in Section 6.11 of Clause Sixth above, in which case they
should indemnify the Purchasers for the difference between (y) 51 million U.S. Dollars and (z) the amount of the capital gains tax accrued on the sale of the Company if the Estimated Price would have totaled US$1,006,875,999. 
  
 9.2 The Purchasers shall be jointly and severally liable to the Sellers
within the framework of this Agreement and undertake unequivocally and irrenounceably to indemnify and hold each Seller harmless for any loss, damage, injury or expense (including reasonable attorneys’ expenses) incurred by any Seller as a
consequence of: 
  
 1. Default on any of the obligations assumed
by any Purchaser under this Agreement or the Outstanding Clauses of the Letter of Offer; or 
  
 2. The inaccuracy, mendacity or default on any of the representations, warranties or covenants acquired by any Purchaser within the purview of the stipulations in this Agreement or its Schedules, including the
warranties contained in Clause Seventh above or in the Outstanding Clauses of the Letter of Offer. 
  
 TENTH: CONFIDENTIALITY 
  
 10.1 The Sellers promise to keep confidential all information relative to the activities or businesses of the Company, including data on customers, suppliers, distributors, commissions, etc. 
  
 10.2 The Parties promise to keep confidential the contents of this Agreement.
If any of the Purchasers or the Sellers were required by the authorities or obligated by law to disclose the contents of the confidential information, they should give written notice thereof 24 hours in advance to the other Party, provided this is
materially possible given the period imposed for a response, in order for both Parties to be able to agree upon the information that will ultimately be disclosed. Save the exception stipulated in the preceding sentence, any public communication of
the Agreement shall be previously agreed upon by the Parties. 
  

 9 

 ELEVENTH: ASSIGNMENT 
  
 The Sellers may not assign all or part of the performance of the obligations hereunder to third parties unless they have prior specific written
authorization of the other Party. The Purchasers may assign to one or more third parties the rights and obligations of the Purchasers within the purview of this Agreement with no need for prior consent of the Sellers provided the assignee is an
affiliate of TEM. A company shall be deemed, for such purpose, to be an affiliate of TEM if it is controlled thereby, controls TEM or is under direct or indirect control of the controller of TEM. 
  
 TWELFTH: REPEAL OF THE LETTER OF OFFER. AMENDMENTS. 
  
 12.1 This Agreement repeals and voids the Letter of Offer mentioned in the
fifth recital of the Agreement except for the provisions in Sections A.4, A.7, G and H of such Letter of Offer (the Outstanding Clauses of the Letter of Offer) that will continue in force. 
  
 12.2 Any amendment to the stipulations in this Agreement shall be previously
agreed upon by the Parties and a document signed for such purpose. 
  
 THIRTEENTH: NOTICES 
  
 All notices,
communications or notifications that must be made by the Parties shall be in writing and sent to the addresses of the Parties contained herein by fax, e-mail, certified mail or through a notary public. 
  
 HOLDING and TEM INVERSIONES 
  
 Attn.:    Senior Counsel 
 Miraflores 130 
 Santiago, Chile 

Fax: (56-2) 661 7298 
 cc: TEM 

Coya 24 
 28001 Madrid 
  
 Attn: Antonio Hornedo Muguiro 
 Fax: (349) 1423 4016 
 e-mail:
hornedo_a@telefonicamoviles.com. 
 CTC and CTC EQUIPOS 
 Providencia 111, 24th floor 
 Santiago 
  
 Attn.: Cristián Aninat Salas 
 Fax: +56-2 – 691 3159 
 E-mail: caninat@ctc.cl. 
  
 FOURTEENTH: EXPENSES AND TAXES 
  
 The Purchasers and the Sellers shall pay their respective expenses incurred
in the preparation and negotiation of this Agreement. Each Party shall pay the taxes that may be assessed on this purchase. The expenses of the public deed of this Agreement shall be paid equally by both Parties. 
  
 FIFTEENTH: LEGISLATION AND ARBITRATION 
  
 15.1 The Parties expressly agree that this Agreement shall be governed by
Chilean law. 
  
 15.2 In any dispute or claim in relation hereto,
to the existence, validity, interpretation or voidance hereof, the Purchasers and the Sellers agree to arbitration-at-law to be conducted in New York City (USA) before an arbitrator appointed by the American Arbitration Association, which will be
conducted according to the rules thereof, with a specific waiver of any other applicable jurisdiction. 
  

 10 

 AUTHORITIES 
  
 The authority of Mr. Claudio Muñoz Zúñiga to represent Compañía de Telecomunicaciones de Chile S.A. is set down in the
public deed dated May 7, 1999, extended before Mr. Alvaro Bianchi Rosas, Notary Public. The authority of Mr. Cristián Aninat Salas to represent Compañía de Telecomunicaciones de Chile-Equipos y Servicios S.A. is set down in the
public deed dated July 22, 2004, extended before Mr. Raúl Undurraga L., Notary Public. The authorities of Mr. Jorge Abadía Pozuelo and Mr. Miguel Garrido de las Heras to represent Inversiones Telefónica Móviles Holding
Limitada and TEM Inversiones Chile Limitada are set down in the public deeds dated July 22, 2004, both extended before Mr. René Benavente Cash, Notary Public. The authenticating Notary Public of this city does certify that this public deed is
executed and extended in accordance with the provisions in Law 18,181 of October 27, 1982, published in Official Gazette No. 31,427 of November 26, 1982, which is duly annotated in the Journal Book under the respective number. 
  
 In witness whereof, the Parties sign after reading. A copy is given. I
attest. 
  
 CLAUDIO MUÑOZ ZUÑIGA 
  
 for COMPAÑIA DE TELECOMUNICACIONES DE CHILE S.A. 
  
  
 CRISTIAN ANINAT SALAS 
  
 for COMPAÑIA DE
TELECOMUNICACIONES DE CHILE-EQUIPOS Y SERVICIOS S.A. 
  
  
 JORGE ABADIA POZUELO        MIGUEL GARRIDO DE LAS HERAS 
  
 for INVERSIONES TELEFONICA MOVILES HOLDINGS LTDA. 
  

 11 

 The Parties signed before me at Providencia 111, 29th floor. 
 This copy is a true record of the original. Santiago, July 26, 2004. 

 SCHEDULE I 
  

Santiago, July    , 2004 
  
 Messrs. 
 Telefónica Móvil de Chile S.A. 
 Hand Delivery 
  
 Gentlemen: 
  
 On this date, Compañía de Telecomunicaciones de Chile S.A. and Compañía de Telecomunicaciones de Chile Equipos y Servicios
S.A. and Inversiones Telefónica Móviles Holding Limitada and TEM Inversiones Chile Limitada have signed a purchase agreement whereby the first two have transferred to the latter all of the shares they held in Telefónica
Móvil de Chile S.A. under the conditions therein stipulated. 
  
 Pursuant to the aforesaid document, on behalf of Compañía de Telecomunicaciones de Chile S.A., I hereby declare that Telefónica Móvil de Chile S.A. does not owe my principal any sum for the following reasons:

  
 (i) The mercantile current account agreement; 
  
 (ii) The debt acknowledgement for the credit granted to Telefónica
Móvil de Chile S.A. by Chase in the amount of             ; and 
  
 (iii) The debt acknowledgement for the credit granted to Telefónica Móvil de Chile S.A. by EKN-Citibank in the amount of
             
  
 We grant Telefónica Móvil de Chile S.A. the most ample and complete discharge regarding such debts. 
  
 Very sincerely yours, 
  
                                        
     Claudio Muñoz Z. 
                                        
     General Manager 

 SCHEDULE II 
  
 Santiago, July    , 2004 
  
 Messrs. 
 Telefónica Móviles S.A. 
 Inversiones Telefónica Móviles Holding Limitada 
 Inversiones TEM Chile Limitada 
 Hand Delivery 
  
 Gentlemen: 
  
 On July 23, 2004, Compañía de Telecomunicaciones de Chile S.A. and Compañía de Telecomunicaciones de Chile Equipos y Servicios
S.A. and Inversiones Telefónica Móviles Holding Limitada and TEM Inversiones Chile Limitada signed a purchase agreement whereby the first two have transferred to the latter all of the shares they held in Telefónica Móvil
de Chile S.A. under the conditions indicated therein. 
  
 Today,
Compañía de Telecomunicaciones de Chile S.A. and Compañía de Telecomunicaciones de Chile Equipos y Servicios S.A. have received the sum of US$            
and US$            , respectively, in payment of the purchase price of the shares in Telefónica Móvil de Chile S.A., including interest accrued on such purchase price
pursuant to the document indicated in the preceding paragraph. 
  
 Compañía de Telecomunicaciones de Chile S.A. hereby declares that Telefónica Móviles S.A., Inversiones Telefónica Móviles Holding Limitada and Inversiones TEM Chile Limitada owe it no sum whatsoever
because of the purchase of shares in Telefónica Móvil de Chile S.A. and we grant Telefónica Móvil de Chile S.A. the most ample and complete discharge in respect of such amounts. 
  
 Sincerely yours, 
  
                                        
     Claudio Muñoz Z. 
                                        
     General Manager 

 SCHEDULE III 
  
 TELEFONICA MOVIL DE CHILE S.A. 
 Financial Statements for the three-month 
 period ending March 31, 2004 and 2003 
 and report by independent auditors. 

 REPORT BY THE INDEPENDENT AUDITORS 
  
 REVIEW OF INTERIM FINANCIAL STATEMENTS 
  
 Chairman of the Board of Directors and Directors of 
  
 Telefónica Móvil de Chile S.A. 
  
 We have reviewed the interim general balance sheets of Telefónica Móvil de Chile S.A. as of March 31, 2004 and 2003 and the corresponding
interim income and cash flow statements for the three-month periods ending on those dates. These interim financial statements and the corresponding notes are the responsibility of the management of Telefónica Móvil de Chile S.A.

  
 We have performed a review according to auditing standards
established in Chile for a review of interim financial information. A review of interim financial information consists principally of applying audit procedures to the financial statements and of making inquiries with the staff responsible for
financial and accounting matters. The scope of this review is substantially less than an audit performed according to generally accepted auditing standards of Chile where the objective is to express an opinion on the financial statements taken as a
whole. Consequently, the interim financial statements as of March 31, 2004 and 2003 have not been audited and, therefore, we are unable to express, nor do we express, such an opinion. 
  
 Based on our review of the interim financial statements of Telefónica Móvil de Chile S.A. as of March 31, 2004
and 2003, we have no knowledge of any significant adjustments that should be made to such statements in order for them to be in harmony with generally accepted accounting principles of Chile. 
  
 DELOITTE 
  
 April 16, 2004 
  
 Arturo Plat A. 

 This corresponds to a deed under Journal 
 No. 4151, page 23457, of July 2004. 
 Santiago, July 26, 2004 
  
 This copy is a true record of the original. 
 Santiago, July 26, 2004.

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