Document:

Exhibit 10(b)

ANDRES RUBIO FLORES
     Notary Public
     8th Notary Public's Office
     Santiago de Chile

March 27, 2001                                              Record No. 1081/2001

STOCK PURCHASE AGREEMENT ON SOCIEDAD MATRIZ BANCO DE CHILE S.A. AND BANCO DE
CHILE, JOINT AND SEVERAL BAIL AND COMMERCIAL PLEDGE

                      LQ INVERSIONES FINANCIERAS S.A. ET AL

                                       AND

                            EMPRESAS PENTA S.A. ET AL

The parties individualized hereinbelow have appeared in my presence, ANDRES
RUBIO FLORES, attorney at law, Acting Notary Public of the 8th Notary Public's
Office in Santiago of RENE BENAVENTE CASH, domiciled at # 354 Morande Street,
floor 7, District of Santiago, on March 27, 2001: 1) Mr. CARLOS EUGENIO LAVIN
GARCIA-HUIDOBRO, a Chilean citizen, married, commercial engineer, National Id.
Card No. 4.334.605-9, hereby acting in his name and on behalf of, as it shall be
evidenced, EMPRESAS PENTA S.A., Tax Id. No. 87.107.000-8; INVERSIONES PENTA III
LIMITADA, Tax Id. No. 78.776.990-K; ISE-LAS AMERICAS COMPANIA DE SEGUROS DE VIDA
S.A., Tax Id. No. 96.534.950-2; COMPANIA DE SEGUROS GENERALES LAS AMERICAS S.A.,
Tax Id. No. 96.683.120-0; INMOBILIARIA CHOSHUENCO LIMITADA; Tax Id. No.
88.749.400-2; Mr. CARLOS ALBERTO DELANO ABBOTT; National Id. Card No.
4.773.758-3; Ms. GRACIELA DEL CARMEN ABBOTT MARIN, National Id. Card No.
2.286.235-9; Ms. VERONICA MENDEZ URETA, National Id. Card No. 6.964.597-6; Ms.
MARIA DE LA LUZ CHADWICK HURTADO, National Id. Card No. 5.669.689-K; Ms.
PATRICIA MARIA CHADWICK CLARO, National Id. Card No. 7.011.445-3; Ms. ANNA LUISA
GIRARDI GIORDANO, National Id. Card No. 3.115.233-K; Ms. PAULINA RESTOVIC
MONTERO, National Id. Card No. 7.811.141-0; Mr. SERGIO DELANO CONCHA, National
Id. Card No. 1.369.823-6; INVERSIONES SANTA VERONICA S.A., Tax Id. No.
86.570.700-2;

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ADMINISTRACION E INVERSIONES CONVENTO VIEJO S.A., Tax Id. No. 88.864.900-K; Mr.
HECTOR FERNANDO CONCHA MARAMBIO, National Id. Card No. 4.436.207-4; CONCHA Y
COMPANIA, SOCIEDAD DE INVERSIONES LIMITADA, Tax Id. No. 79.716.310-4; Mr. HUGO
BRAVO LOPEZ, National Id. Card No. 4.709.421-6; ADMINISTRACION E INVERSIONES
SANTA SARELLA S.A., Tax Id. No. 96.531.470-9; Mr. LUIS ERNESTO SILVA BAFALLUY,
National Id. Card No. 5.126.588-2; Mr. CARLOS PEDRO GIRARDI GIORDANO, National
Id. Card No. 3.115.225-9; Mr. MAXIMO SILVA BAFALLUY, National Id. Card No.
5.124.062-6; INVERSIONES SANTA SOFIA LIMITADA, Tax Id. No. 88.088.450-9; and
ADMINISTRACIONES E INVERSIONES LORENA LIMITADA, Tax Id. No. 78.736.750-K; for
these purposes, all the aforementioned parties domiciled at # 222 Miraflores
Street, floor 20, on the one hand, in their capacity of sellers, hereinafter
collectively and indistinctly designated the "Sellers"; and on the other, as
buyer: 2) Mr. ANDRONICO LUKSIC CRAIG; a Chilean citizen, married, entrepreneur,
National Id. Card No. 6.062.786-K, hereby acting on behalf of LQ INVERSIONES
FINANCIERAS S.A., an investment company, Tax Id. No. 96.929.880-5, hereinafter
also indistinctly designated the "Buyer"; QUINENCO S.A., an investment company,
Tax Id. No. 91.705.000-7, hereinafter also designated the "Joint and Several
Debtor", and INVERSIONES HIDROSUR LIMITADA, an investment company, Tax Id. No.
79.871.250-0, hereinafter also designated "Hidrosur", all the aforementioned of
legal age and domiciled at # 20 Enrique Foster Sur Street, Floor 14, Las Condes
District, who have evidenced their relevant identities by means of the identity
cards already specified hereinabove and represent as follows:

That they have subscribed and entered into this Stock Purchase Agreement on
Sociedad Matriz Banco de Chile S.A., hereinafter designated "SM Chile" and Banco
de Chile, and Joint and Several Bail and Pledge, hereinafter referred to as the
"Purchasing Contract", which shall be ruled as per the legal regulations
currently in force and, particularly by the clauses and provisions specified
hereinbelow:

ONE: STOCKS AND PROMISE TO SELL

1.1)  For all the purposes of this Purchasing Contract, Sellers are members of a
      group of shareholders of SM-Chile and Banco de Chile, the name and
      composition of which is as follows: Grupo Penta: Empresas Penta S.A.;
      Inversiones Penta III Limitada; ISE-Las Americas Compania de Seguros de
      Vida S.A.; Compania de Seguros

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      Generales Las Americas S.A.; Inmobiliaria Choshuenco Limitada; Carlos
      Eugenio Lavin Garcia Huidobro; Carlos Alberto Delano Abbott; Graciela Del
      Carmen Abbott Marin; Veronica Mendez Ureta; Maria de la Luz Chadwick
      Hurtado; Patricia Maria Chadwick Claro; Anna Luisa Girardi Giordano;
      Paulina Restovic Montero; Sergio Delano Concha; Inversiones Santa Veronica
      S.A.; Administracion e Inversiones Convento Viejo S.A.; Hector Fernando
      Concha Marambio; Concha y Compania, Sociedad de Inversiones Limitada; Hugo
      Bravo Lopez; Administracion e Inversiones Santa Sarella S.A.; Luis Ernesto
      Silva Bafalluy; Carlos Pedro Girardi Giordano; Maximo Silva Bafalluy;
      Inversiones Santa Sofia Limitada; y Administraciones e Inversiones Lorena
      Limitada. The origin of this group of shareholders stems from the
      definitions of the Shareholders Agreement subscribed by the so-called
      Penta, Familia Cuneo/Solari, Moreno, Consorcio and Larrain Groups with
      respect to the shares owned by them in SM Chile and Banco de Chile, as
      evidenced in a private deed dated November 22, 1999.

1.2)  The stocks subject matter of this Purchasing Contract, hereinafter
      referred to as the "Shares" are as follows:

      Grupo Penta: 74,916,382 shares of SM Chile - Series A; 1,757,937,839
      shares of SM Chile - Series B; 58,763,920 shares of SM Chile - Series D;
      457,456 shares of SM Chile - Series E; and 840,556,757 shares of Banco de
      Chile, as evidenced in the titles specified under Exhibit A herein.
      Exhibit A shows a breakdown of shareholders, shares and their relevant
      title numbers, which has been duly signed by the parties and accounts for
      an integral part of this Purchasing Contract and is formalized at the end
      of the records corresponding to the current month under number 109.

1.3)  Sellers hereby represent that Shares are free from all encumbrances,
      pledges, usufruct, charges, restrictions, seizures, complaints,
      resolutory, third-party preemptive rights, prohibitions or limitations to
      property of any nature or character whatsoever, that might affect the
      selling or transfer thereof to Buyer; likewise, Shares are fully paid and
      shall grant Buyer the economic and political rights provided under the
      articles of incorporation of SM Chile and Banco de Chile and Law 18.041,
      whereby Sellers become liable for clearing title in compliance with the
      applicable legal framework.

1.4)  On January 31, 2001, the members of Banco de Chile's and SM Chile's
      controlling shareholders agreement, which Sellers are part of, subscribed
      a promise

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      agreement with Buyer, which is entitled "Promise to Sell Stock Contract
      from Sociedad Matriz Banco de Chile S.A. and Banco de Chile, Joint and
      Several Bail and Commercial Pledge", hereinafter designated "Promise to
      Sell", by virtue of which the parties undertook to subscribe this
      Purchasing Contract regarding the shares of SM Chile and Banco de Chile,
      which the shares specified under paragraph 1.2) hereinabove are part of.
      The aforementioned Promise to Sell was formalized at this Notary Public's
      Office on February 1, 2001, under record number 7.

TWO: Purchasing Contract

2.1)  Sellers, on their own behalf or duly represented herein as specified in
      the preamble hereof, hereby sell, assign and transfer to LQ Inversiones
      Financieras S.A., the representative of which - Mr. Andronico Luksic Craig
      - in turn hereby buys, accepts and acquires the shares individualized in
      paragraph one in the foregoing clause.

2.2)  This purchase and transfer of Shares and their relevant prices shall
      encompass all holdings and rights related to net worth; revaluations;
      accumulated earnings; retained earnings and other reserve or corporate
      funds of any nature, purpose or denomination whatsoever, including those
      retained in any undistributed fund and even though there are agreements
      yet to be fulfilled for distribution thereof or belong in any manner
      whatsoever to shares' holders, either resulting from the current or
      previous years, with the exception of the dividends distribution to
      bagreed upon as part of shareholders meetings of SM Chile and Banco de
      Chile, to be held on March 29, 2001, which as specified under paragraph
      3.9) hereinbelow, are owned by Sellers. Furthermore, the parties hereby
      acknowledge that the agreed price for Shares includes pending or future
      options that Sellers might exercise for any reason whatsoever, even for
      the purposes of underwriting pay shares and all and every pay-free shares
      the distribution of which and charge to build-up funds is agreed upon,
      whichever their nature and denomination may be.

2.3)  The parties hereto place on record that, on a joint basis with the
      subscription of this Purchasing Contract, Buyer has also subscribed a
      number of purchasing contracts for shares of Banco de Chile and SM Chile,
      joint and several bail and commercial pledge agreements, hereinafter
      designated "Shareholder Agreement Contracts" with further groups of
      shareholders being part of the current major shareholders agreement of
      Banco de Chile, also referred to as Grupo Familia Cuneo/Solari;

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       Grupo Consorcio; Grupo Moreno and Grupo Larrain, by virtue of which, said
       groups of shareholders have sold the shares of SM Chile and Banco de
       Chile owned thereby to Buyer, as per terms and conditions essentially
       identical to those provided under this Purchasing Contract.

2.4)   Transfer of ownership of the Shares is hereby granted on a symbolic basis
       by means of the handing over by Sellers to Buyer of the titles
       representing the Shares specified under Exhibit A, by virtue of which
       Sellers are entitled and willing to transfer the aforementioned property
       and Buyer intends and is willing to acquire such property.

THREE: PRICE

3.1    The unit price of each of the shares subject matter of this contract, as
       expressed in Chilean pesos, is as follows: SM Chile - Series A: CLP
       19.242316; SM Chile - Series B: CLP58.940025; SM Chile - Series D: CLP
       56.670464; SM Chile - Series E: CLP35.786619; and Banco de Chile:
       35.819619.

3.2    Consequently, the total price of the shares subject matter of this
       Purchasing Contract amounts to CLP 138,509,789,464, equivalent - to the
       subscription date of this document - to UF(1) 8,755,802.41, a sum that
       Buyer hereby pays and shall pay as follows:

3.2.1. By means of CLP 49,001,422,984, equivalent to date to UF 3,097,591.72,
       which Buyer hereby pays in cash to Sellers, who in turn, hereby
       acknowledge receipt to their entire satisfaction and hence issue the
       relevant receipt therefor.

3.2.2. By means of the equivalent in Chilean pesos of UF 5,658,210.69, which
       Buyer hereby undertakes to pay within a maximum term of twenty-four (24)
       months as of the date herein, that is to say, on March 27, 2003 at the
       latest.

3.3    The balance of the price specified under paragraph 3.2.2 shall accrue, as
       of the date of this Purchasing Contract, an interest amounting to an
       annual 8.5% rate / on a 360-day base, payable on a bi-annual basis,
       according to the payment schedule detailed hereinbelow: a) Installment
       No. 1: falling due on September 27, 2001; b) Installment No. 2: falling
       due on March 27, 2002; c) Installment No. 3: falling due on September 27,
       2002; d) Installment No. 4: falling due on March 27, 2003.

3.4    In the event of a default situation or simple delay in the payment of any
       interest installment whatsoever, either partial or total, Sellers shall
       be entitled to accelerate

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(1)   Translator's note: UF - Unidad de Fomento, a Chilean, non-physical indexed
      monetary unit.

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      and request Buyer payment of the entire outstanding price balance as of
      the date of default or delay and accordingly, as of such date and until
      actual payment, the maximum regular rate of interest on adjustable
      operations shall accrue, as calculated over the basis of the total amount
      of outstanding price balance plus the interests accrued to the date of the
      default situation or simple delay, all of which shall be subject to
      compounding. The same default rate of interest shall accrue in the event
      of a default situation or simple delay in the payment of the price balance
      principal.

3.5   Buyer is hereby entitled to make a voluntary advanced payment or partial
      payments on the price balance whenever it deems so appropriate and as long
      as the obligation to pay the price balance and the relevant interests have
      not fallen due. Once due, Sellers shall not be obligated to receive
      partial advanced payments for amounts lower than twenty-five (25%) of the
      relevant outstanding obligation. Partial advanced payments, of any nature
      whatsoever, shall be allocated to regular or interest on arrears, as the
      case may be, and as accrued to payment date and the balance, if any, shall
      be allocated to the principal. At all events, Buyer hereby undertakes to
      make any voluntary advanced payment or partial payments on the price
      balance on a prorated and simultaneous basis regarding all and every
      Shareholder Agreement Contracts.

3.6   Should the voluntary advanced payment or partial payments on the price
      balance be carried out within an 18-month term as of subscription date of
      this Purchasing Contract, Buyer shall also pay Sellers a further charge on
      the advanced payment amount equivalent to applying an annual 8.5% rate of
      interest over its value in Unidades de Fomento for the remaining period
      until the 24-month term agreed upon for payment of the price balance falls
      due, less its current value according to an annual 7.4% rate, based upon
      the formula and example provided under Exhibit B, which, duly signed by
      the parties hereto, is an integral part of this instrument and is
      formalized at the end of these records under number 109. Any voluntary
      advanced payments or partial payments carried out after the last day in
      month 18 as of subscription of this Purchasing Contract shall not be
      subject to the aforementioned further charge, regardless of the allocation
      thereof provided by the law.

3.7   Payment of the amounts expressed in Unidades de Fomento shall be carried
      out in Chilean Pesos according to the rate of exchange for such monetary
      unit reported

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      by the Chilean Central Bank, effective on actual payment date.

3.8   Should the Unidad de Fomento be eliminated or rendered null and void, the
      price balance shall be adjusted as per the rate superseding it or,
      otherwise, as per the variation shown by the Consumer Price Index, as
      reported by Instituto Nacional de Estadisticas (National Statistics
      Bureau) between the last day of the month prior to the event or act
      abrogating or rendering Unidad de Fomento null and void and the last day
      of the month prior to price balance payment, calculated according to the
      principal thereof based upon its equivalent in Chilean pesos as per Unidad
      de Fomento last known value.

3.9   The parties hereby place on record as follows:

3.9.1 As a result of the subscription of this Purchasing Contract on today's
      date, moment at which the relevant rights of the shareholders of SM Chile
      and Banco de Chile are already established for the following meetings of
      shareholders of both companies, as summoned for Mach 29, 2001 and as part
      of which agreements shall be reached on the adoption of the balance sheets
      and financial statements corresponding to the fiscal year ended on
      December 31, 2000 and whereby the dividends of the Shares agreed to be
      distributed during such meetings shall be collected by Sellers, the amount
      of such dividends yet to be paid to Sellers was deducted from the price
      and first allocated to the interests referred to under item 3.9.2
      hereinbelow.

3.9.2 Based upon what provided under paragraph 3.3 in the Promise to Sell, the
      price of the Shares subject matter of this Purchasing Contract has been
      adjusted and the amount accounting for annual 5% interests / 360-day base
      accrued between January 25, 2001 and the date herein has been compounded.
      The aforementioned amount, as specified in the item hereinabove, has been
      allocated to the dividends yet to be paid to Sellers and the price
      installment paid in cash herein has been adjusted accordingly. The value
      resulting from the adjustments referred to under paragraphs 3.9.1 and
      3.9.2 is evidenced by the Shares unit price provided under paragraph 3.1
      hereinabove.

FOUR: MANDATORY ADVANCED PAYMENT

4.1   Quinenco S.A. affiliate, namely Inversiones Hidrosur Limitada, owns
      32,365,881 shares evidenced by title No. 221,409, currently equivalent to
      approximately to a 13.68% stake of the shares issued by Empresa Nacional
      de Telecomunicaciones

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      S.A., hereinafter also designated "ENTEL Shares".

4.2   Provided that Hidrosur actually sells ENTEL Shares to an unrelated third
      party, Buyer hereby undertakes to make an advanced payment to Sellers,
      amounting to the total net price (gross price less fees and expenses
      directly stemming from the sale) of the sale of ENTEL Shares, as provided
      under a purchasing contract for all or part of the ENTEL Shares subscribed
      between Hidrosur and an unrelated third party, irrespectively of the time,
      manner, terms and conditions provided for paying the price established
      under the aforesaid contract. Should the sale prince of ENTEL Shares be
      paid in cash, the relevant advanced payment shall be carried out in cash
      within the 3-banking working days following the subscription date of the
      ENTEL Shares Purchasing Contract and, should the price payment be made in
      installments, the advanced payment shall be performed within the 5-banking
      working days following said date and the aforesaid advanced payment shall
      be credited to the price balance referred to under paragraph 3.2.2. In the
      aforementioned cases, the special charge provided under paragraph 3.6
      hereinabove shall not be applicable, and advanced payment shall be
      allocated to the interests accrued as of the date of said advanced payment
      and the balance thereof shall be allocated to the principal. At all
      events, Buyer hereby undertakes to make any advanced payments on the price
      balance by virtue of this provision on a prorated and simultaneous basis
      regarding all and every Shareholder Agreement Contracts.

FIVE: SURETIES. All and every obligations undertaken by Buyer by virtue of this
document shall be secured as follows:

5.1   Bail and Joint and Several Debt by Quinenco S.A.

5.1.1 Quinenco S.A., hereby represented by Mr. Andronico Luksic Craig, already
      individualized in the preamble hereof and duly authorized by the Board of
      Directors of the company he acts on behalf of, hereby grants a bail and
      joint and several debt in favor of Sellers, regarding all and every main
      and accessory obligations undertaken by its affiliate, LQ Inversiones
      Financieras S.A. in its capacity as Buyer by virtue of this Purchasing
      Contract, thereby becoming subject to the terms and conditions its bailee
      is bound to and acting on a joint and several basis as to obligations as
      if it were the debtor itself, which shall particularly encompass payment
      of the price balance and accessory payments.

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5.1.2 Joint and several debtor hereby accepts all extensions, renewals,
      increases or modifications that might affect the obligations of Buyer as a
      consequence of this instrument, with no observations or exclusions
      whatsoever and keeping its joint and several liability until all and every
      secured obligations, irrespective of the nature thereof, are fulfilled by
      the original party hereto.

5.1.3 The amounts actually paid by Quinenco S.A. in its capacity of guarantor
      and joint and several debtor shall entitle it to subrogate against Buyer,
      yet subordinating and postponing its rights until all Sellers receive full
      payment, both as a result of pledged shares exercise and regarding the
      general pledge right of Sellers.

5.2   Commercial pledge and prohibition to encumber and transfer of shares.

5.2.1 In order to secure all and every principal and accessory obligations
      undertaken by Buyer by virtue of this contract, particularly concerning
      payment of the price balance agreed upon under paragraph 3.2.2,
      adjustments, regular interests, interest on arrears and costs thereof, if
      any, Buyer hereby grants a commercial pledge in favor of Sellers, who in
      turn accept this pledge, as per Title 15, Second Book of the Code of
      Commerce, on all and every Shares as individualized under paragraph 1.2,
      as well as a prohibition to encumber and transfer said Shares without the
      prior authorization in writing from Sellers.

5.2.2 Buyer hereby makes available to Sellers, through its representative, who
      in turn accepts on behalf thereof, titles No. 16317-01 accounting for
      840,556,757 shares of Banco de Chile; and titles No. 1009496-08 accounting
      for 74,916,382 shares of SM Chile - Series A; No. 1056009-08 accounting
      for 1,757,937,839 shares of SM Chile - Series B; No. 38974-09 accounting
      for 58,763,920 shares of SM Chile - Series D; and No. 30042-10 accounting
      for 457,456 shares of SM Chile - Series E of SM Chile, which represents
      Buyer's and joint and several debtor's intention and capacity to transfer
      the ownership of the shares and Sellers' and creditors' willingness and
      capacity to receive them as a surety for all and every principal and
      accessory obligations of Buyer stemming from this document, particularly
      to secure price balance, adjustments and regular and interest on arrears,
      including costs of any nature whatsoever, if any, all the aforementioned
      as per the terms and conditions provided in this contract. Likewise, it is
      expressly placed on record that on this date, the authenticating Notary
      Public has notified SM Chile and Banco de Chile general managers on the
      commercial pledge granted herein and has further registered it in the
      relevant Stockholder Registers.

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5.2.3 As a result of Shareholder Agreement Contracts by virtue of which Buyer
      has granted a commercial pledge in favor of the other member groups of
      Banco de Chile's major shareholders agreement, on the shares sold by every
      of these shareholders, in order to secure all Buyer's obligations and
      particularly the payment of the relevant price balances and accessory
      payments and, taking into consideration that in Sellers' interest, an
      adequate surety should be made available so as to secure faithful and
      timely payment of all and every price balances owed by Buyer, the parties
      hereby agree that in the event all the shares pledged by Buyer in favor of
      the shareholder groups mentioned hereinabove and of Sellers as a
      consequence of this contract and shareholders agreement contracts account
      for a percentage lower than 35% of all the political and voting rights of
      Banco de Chile, or a percentage below the number of shares it holds at the
      company resulting from any merger or arising out of a capital increase of
      Banco de Chile, the amount equivalent to the current 35% of all the
      political and voting rights of Banco de Chile, Buyer shall supplement the
      relevant surety at Sellers' request so that a debt - surety ratio
      amounting to 1:1 is kept. Consequently, a commercial pledge shall be
      granted on a prorated and simultaneous basis concerning this Purchasing
      Contract and all and every Shareholders agreement contracts, on other
      shares of corporations based upon their market value, so that the
      outstanding balance of the debt resulting from the price balance is always
      secured by a stock pledge whereby the market value of the shares subject
      matter of this stock pledge is not lower than the total outstanding price
      balance. Pledged shares "Market value"o shall be construed as the average
      weighed stock exchange transaction value thereof over the last 60-day
      period. As to the shares required to supplement this surety, they should
      preferably correspond to SM Chile and/or Banco de Chile, or to other
      corporations, in the latter case, at Sellers' satisfaction. Surety should
      be supplemented within a 60-day term as of requirement from Sellers.

5.2.4 Concerning the dividends of pledged shares, they shall belong to their
      relevant owners, however, the following exceptions shall be applicable: a)
      Whenever the price balance and/or the interests thereof as provided under
      clause three in this instrument and secured by means of the pledge fall
      due and, regardless of the collection procedures related to price balance
      and/or its interests that joint and several creditors might undertake,
      dividends shall belong to Sellers. Consequently, Sellers shall charge and
      collect them directly from issuer company and then credit

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      and allot them as per general norms; and b) Should all the shares pledged
      by Buyer in favor of the shareholder groups individualized under paragraph
      2.3 and in favor of Sellers by virtue of this contract and shareholders
      agreement contracts account - at any time - for a percentage lower than
      35% of all the political and voting rights of Banco de Chile, or a
      percentage below the number of shares it holds at the company resulting
      from any merger or arising out of a capital increase of Banco de Chile,
      the amount equivalent to the current 35% of all the political and voting
      rights of Banco de Chile, and should the debt - surety ratio be lower than
      1:1, then dividends shall only be collected by Buyer if duly authorized by
      Seller. Should no authorization be available, the relevant dividends shall
      belong to Sellers, who shall be entitled to charge and collect them
      directly from issuer company, in which case, they shall take a renewable
      30-day term deposit at Banco de Chile until the debt - surety ratio
      regains the 1:1 level. Furthermore, should this 1:1 debt - surety ratio
      fails to be regained within the aforementioned 60-day term as of
      requirement to Buyer from Sellers, the latter shall be entitled to and
      shall collect, credit and allocate the amount of the aforesaid deposit to
      the price balance, according to general rules of business. Should the
      surety be supplemented within the term mentioned hereinabove, the term
      deposit shall be rendered to Buyer.

5.2.5 For the purposes of charging and collecting Shares dividends, in the cases
      and under the terms and conditions provided under items a) and b) in
      paragraph 5.2.4 hereinabove, Buyer hereby grants a special and irrevocable
      power of attorney to Empresas Penta S.A., which shall be entitled to
      proceed by means of any of the representatives thereof, entitling it to
      charge, collect and perceive the dividends of issuer company shares, as
      well as to credit and allocate them to the price balance owed by Buyer, if
      applicable. This power of attorney has an irrevocable character, as per
      the terms and conditions provided under article 241 in the Code of
      Commerce and is granted for the benefit of the grantor, consequently, it
      shall remain in full force for the entire period along which the pledge
      referred to under paragraph 5.2 is effective. Furthermore, this power is
      totally free, as a result of which, the representative shall not receive
      any compensations whatsoever when acting in such capacity. Should Buyer
      revoke the power granted in the paragraph hereinabove or should it be
      terminated for any other causes attributable to Buyer, Sellers shall be
      then entitled to exercise, either individually or on a joint basis, all
      those rights and actions granted thereto so as to claim compensation for
      any loss

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      resulting from the aforementioned situation and affecting Sellers. Neither
      the granting of this power, nor the termination thereof shall terminate or
      restrict the pledge subject matter of this document in any manner
      whatsoever, which shall remain in full force for as long as any portion of
      the secured price balance remains unpaid, all of which, notwithstanding
      what provided under article 2.401 in the Civil Code.

5.2.6 Should partial advanced payments of the price balance take place, either
      voluntary or mandatory, Sellers shall release the pledge and prohibition
      to encumber and transfer on a pro rata basis with the advanced payment
      amount, unless the situation specified under paragraph 5.2.3 occurs.

5.3   Inversiones Hidrosur Limitada's Bail.

5.3.1 Hidrosur, hereby duly represented by Mr. Andronico Luksic Craig, hereby
      grants a joint and several bail in favor of Sellers, who in turn hereby
      accept this bail, for the purposes of securing the advanced payment
      obligation undertaken by Buyer by virtue of clause four of this contract,
      a surety that shall be limited to the net sales value of ENTEL Shares to
      an unrelated third party.

5.3.2 Hidrosur's joint and several bail shall be enforced in the event that,
      once ENTEL Shares have been sold to an unrelated third party, Buyer fails
      to pay Sellers an amount equivalent to the entire net sales price of said
      shares. Accordingly, Seller shall be entitled to request payment of the
      price balance on an equally advanced basis as per the provision under
      paragraph 7.3 hereinbelow.

5.3.3 Should Hidrosur sell or transfer ENTEL Shares in any manner whatsoever to
      a related party or company, on a joint basis with transfer, it shall
      undertake the obligation of becoming joint and several guarantor under the
      same terms and conditions as specified hereunder. Failure to do so under
      the aforementioned terms and conditions shall be construed as transfer
      being done to an unrelated third party and, hence, the advanced payment
      obligation provided under clause four hereinabove shall be executed.

SIX: OTHER OBLIGATIONS OF BUYER AND JOINT AND SEVERAL DEBTOR

As long as the price balance payment remains outstanding, Buyer and Joint and
Several Debtor undertake before Sellers strict compliance of the obligations
specified hereinbelow:

6.1   Providing Sellers' representative, as appointed under clause sixteen
      herein, hereinafter designated the "Representative" with quarterly
      consolidated financial

                                       12
<PAGE>

      statements as per the FECU format, within a 30-consecutive day term as of
      the end of the relevant quarter in the case of Buyer and within the same
      term established for such purposes by the Superintendence of Securities
      and Insurance. On the other hand, Buyer and joint and several debtor shall
      provide Representative with their general balance sheet and consolidated
      financial statements on December 31 every year, including their
      corresponding comments. The aforementioned documents shall be duly audited
      and shall encompass the comments of their external auditors, all of which
      shall be made available within a 120-day term as of the end of the fiscal
      year subject to audit.

6.2   Keeping an individual indebtedness level as part of which the Financial
      Debt/Total Capitalization ratio shall not exceed 0.45 times. For the
      purposes of calculating this ratio, Financial Debt shall be understood as
      the addition of lots 21,010; 21,015; 21,020; 21,025; 21,030; 21,060;
      21,075; 22,010; 22,020; 22,030; 22,040 & 22,045 of each individual
      debtor's FECU. In turn, Total Capitalization shall be understood as the
      addition of individual Net Worth and Financial Indebtedness.

6.3   At all moments, keeping a minimum individual net worth amounting to UF 33
      million.

6.4   By the end of every fiscal quarter, keeping a consolidated indebtedness
      level whereby the Financial Debt/Total Capitalization ratio does not
      exceed 0.6 times. To calculate this ratio, Financial Debt shall be
      understood as the addition of lots 21,010; 21,015; 21,020; 21,025; 21,030;
      21,060; 21,075; 22,010; 22,020; 22,030; 22,040 & 22,045 of debtor's
      consolidated FECU, plus the credit resulting from the price balance
      arising from this Purchasing Contract, unless such credit were included in
      previous lots. In turn, Total Capitalization shall be construed as the
      addition of consolidated Net Worth and individual Financial Indebtedness,
      plus Minority Interest. Should Quinenco S.A. be forced to consolidate its
      financial statements - consolidated FECU - with Banks or Financial
      Institutions as per the definition provided on that regard under articles
      40 and 112, respectively in the General Bank Law (Decree with the Force of
      a Law No. 3.997) and/or with SM Chile or the Company managing the
      subordinated debt of Banco de Chile S.A. (SAOS), calculation of the
      aforementioned ratio shall not encompass any liability or obligation made
      part of the consolidated FECU originating in a Bank or Financial
      Institution and/or SM Chile and SAOS, with which the Joint and several
      Debtor is forced to undertake consolidation. Failure to comply with this
      commitment shall not

                                       13
<PAGE>

      result in a right to require advanced payment of the credit subject matter
      of this document, but shall prevent Buyer and Joint and Several Debtor,
      from getting into further indebtedness, acquiring shares issued thereby,
      distributing dividends in excess of the amount provided under the dividend
      policy in force during such fiscal year and from carrying out further
      investments with other companies as long as failure to comply remained by
      the end of the following fiscal quarter (two consecutive FECU).

6.5   Obtaining from Sellers their prior authorization in writing, should Buyer
      and/or Joint and Several Debtor intend to merge, in any manner whatsoever,
      divide or dissolve, an authorization that shall not be denied without due
      justification, in which case Buyer and Joint and Several Debtor shall
      resort to an arbitrator.

6.6   Obtaining the subordination of all the credits corresponding to parties
      related to the entrepreneurial group to which Buyer and Joint and Several
      Debtor belong, so that the credit accounting for the price balance as
      specified under paragraph 3.2.2 hereinabove, the adjustments, regular
      interests, interest on arrears and costs thereof, if any, is billed and
      paid on a preferred basis to any of such related credits. The obligations
      referred to under paragraphs 6.2, 6.3, 6.4 hereinabove shall only be
      applicable to Joint and Several Debtor.

SEVEN: CAUSES FOR ACCELERATION

Should any of the causes for credit acceleration related to Shares' sales price
balance and term expiry specified hereinbelow take place, Sellers shall be
entitled to request, at their sole discretion, advanced payment of the entire
credit and, hence, the relevant obligation shall be deemed as due:

7.1   Should Buyer fail to pay any of the biannual interest installments
      provided under paragraph 3.3 hereinabove accruing from the price balance.

7.2   Should Buyer breach the obligation of not encumbering or transferring all
      or part of the Shares being pledged herein and/or the shares used for
      supplementing the surety in case the 1:1 debt - surety ratio be reduced of
      fail to furnish a further surety on a timely and due basis so that the
      debt - surety ratio is regained.

7.3   Should Buyer or Hidrosur fail to pay Sellers an amount equal to the total
      net sales price of ENTEL Shares in advance as per the terms, conditions,
      manner and timeframe provided under paragraph 4.2 hereinabove, concerning
      paragraphs 5.3.2 and 5.3.3 herein.

                                       14
<PAGE>

7.4   Should Buyer, Joint and Several Debtor and/or Hidrosur file for bankruptcy
      or take the steps for a judicial or extrajudicial settlement.

7.5   Should, concerning Buyer, Joint and Several Debtor and/or Hidrosur, a
      legal action be filed for judicial collection purposes based upon the
      executive procedure, the amount of which is in excess of 5% of the total
      net worth of the relevant company and should this company fail to
      challenge the origin and/or truthfulness of such claim for collection or
      the filing for bankruptcy, by means of written and supported background
      before the relevant courts of justice, within the corresponding legal
      timeframe for challenging purposes.

7.6   Should the entrepreneurial group known as Grupo Luksic, current major
      stockholder of Buyer's, Joint and Several Debtor's and Hidrosur's loose
      control of Buyer or Banco de Chile or the exclusive control of the Joint
      and Several Debtor or Hidrosur for any reason whatsoever that is either
      attributable to such entrepreneurial group or not, without prior
      authorization in writing from Sellers.

7.7   Should, as per the Bond Issuance Contract subscribed by Quinenco S.A. and
      Banco Bice by means of a public deed granted before Santiago Notary Public
      Mr. Felix Jara Cadot on May 9, 2000, modified by means of a public deed
      dated June 9, 2000, granted before the same Notary Public, advanced
      payment of such bonds be requested as a result of any cause whatsoever.

7.8   Should Buyer or Joint and Several Debtor fail to comply with any of the
      obligations provided under clause six hereinabove and fail to overcome
      such breach within the 90 days following such occurrence, unless such
      situation results from a cause attributable to Buyer or Joint and Several
      Debtor, in which case the aforementioned term shall be reduced to 60 days.
      Whenever Sellers exercise the right to accelerate payment of the price
      balance, according to what agreed in this clause, they shall be entitled
      to collect and perceive the interest on arrears referred to under
      paragraph 3.4 herein, as per the terms and conditions specified herein.

EIGHT: STATEMENTS AND OTHER OBLIGATIONS OF SELLERS

Sellers hereby make the following representations and undertake obligations as
follows:

8.1   That there are no other contracts, agreements, options, rights or any
      other titles of any nature whatsoever aimed at acquiring the shares
      subject matter of this contract and that there is no agreement pending to
      be executed regarding the issuance of pay-free shares or effective options
      aimed at underwriting any cash shares.

                                       15
<PAGE>

8.2   That this Purchasing Contract does not violate any particular or public
      agreements or contracts among the current shareholders of the companies
      issuing the Shares.

8.3   Grupo Penta shall be subject to a prohibition to acquire shares accounting
      for over 0.6% of the shares issued by Sociedad Matriz Banco de Chile
      and/or 0.6% of the political or voting rights of Banco de Chile for a
      period of two years as of subscription of this contract. Likewise, the
      aforesaid group shall be subject to a prohibition to acquire shares
      accounting for over 0.5% of the shares issued by Banco de A. Edwards for a
      period of two years as of subscription of this contract.

NINE: STATEMENT OF BUYER

Buyer hereby places on record that it has subscribed this contract by taking
into consideration, among other background, the financial statements of Sociedad
Matriz Banco de Chile S.A. and Banco de Chile, prepared as of September 30,
2000.

TEN: AUTHORIZATION FROM THE SUPERINTENDENCE OF BANKS AND FINANCIAL INSTITUTIONS

10.1  It is hereby placed on record that by means of letter No. 09-1592 dated
      December 14, 2000, the Superintendence of Banks and Financial Institutions
      authorized Quinenco S.A. and its affiliate, LQ Inversiones Financieras
      S.A. to acquire as much as 51% of the stocks of Banco de Chile by
      acquiring the shares of Sociedad Matriz Banco de Chile S.A. and Banco de
      Chile, as per what provided under article thirty-six of the General Bank
      Law.

10.2  It is hereby placed on record that by means of letter No. 00-240 dated
      January 11, 2001, the Superintendence of Banks and Financial Institutions
      authorized LQ Inversiones Financieras S.A. to acquire as much as 55% of
      the stocks of Banco de Chile, as per what provided under article
      thirty-six of the General Bank Law.

10.3  It is hereby placed on record that by means of letter No. 00-241 dated
      January 11, 2001, December 14, 2000, the Superintendence of Banks and
      Financial Institutions authorized LQ Inversiones Financieras S.A. to keep
      a simultaneous majority stake in Banco de Chile and Banco de A. Edwards,
      as per what provided under article thirty-five of the General Bank Law.

ELEVEN: COMMITMENT OF THE PARTIES

The parties hereto hereby undertake to perform the necessary steps and to
subscribe the

                                       16
<PAGE>

private and public deeds required after the subscription of this Purchasing
Contract, aimed at complying with the provisions therein, that is to say,
transferring the shares subject matter of this contract and Buyer acquiring a
majority stake in Banco de Chile.

TWELVE: FULFILLMENT OF PROMISE TO SELL

12.1  The parties hereby place on record fulfillment, within the term falling
      due on April 20, 2001 according to the promise to Sell, of the condition
      the execution of this Purchasing Contract was subject to, consisting in
      the adoption of an agreement reached by the absolute majority of
      shareholders on occasion of a special shareholders meeting of SM Chile and
      Banco de Chile, by virtue of which the current major stockholders shall be
      subject to the special situation established under transitory article ten
      in Law 19.705 allowing them to freely transfer their shares rather than
      being restricted by provisions under article 199 in Law 18.045. These two
      agreements were adopted on occasion of special meeting of shareholders
      held on March 20, 2001, the minutes of which were duly abridged to public
      deeds dated March 22 and 23, 2001 at the Notary Public's office of Mr.
      Rene Benavente Cash.

12.2  Likewise, the parties hereto hereby warrant and represent that all and
      every suspensive condition in the purchasing contract as provided under
      the Promise to Sell have been duly complied with. Moreover, the parties
      hereby represent that the Promise to Sell has been entirely fulfilled
      through subscription of this Purchasing Contract; the parties also declare
      the widest reciprocal termination to the negotiations between the parties,
      the closing and Promise to Sell, both contractually and
      extra-contractually.

THIRTEEN: JOINT AND SEVERAL LIABILITY

For the purposes of ensuring and securing the obligations arising out of this
contract, the parties specified hereinbelow undertake a joint and several
liability regarding the fulfillment of such obligations: Empresas Penta S.A.;
Inversiones Penta III Limitada; Carlos Eugenio Lavin Garcia Huidobro and Carlos
Alberto Delano Abbott hereby undertake the capacity of joint and several debtors
among themselves and joint and several debtors of the following parties being
members of the so-called Grupo Penta: Graciela Del Carmen Abbott Marin; Veronica
Mendez Ureta; Maria de la Luz Chadwick Hurtado; Patricia Maria Chadwick Claro;
Anna Luisa Girardi Giordano; Paulina Restovic Montero; Sergio Delano Concha;

                                       17
<PAGE>

Inversiones Santa Veronica S.A.; Administracion e Inversiones Convento Viejo
S.A.; Hector Fernando Concha Marambio; Concha y Compania, Sociedad de
Inversiones Limitada; Hugo Bravo Lopez; Administracion e Inversiones Santa
Sarella S.A.; Luis Ernesto Silva Bafalluy; Carlos Pedro Girardi Giordano; Maximo
Silva Bafalluy; ISE-Las Americas Compania de Seguros S.A.; Compania de Seguros
Generales Las Americas S.A.; Inmobiliaria Choshuenco Limitada; Inversiones Santa
Sofia Limitada; and Administraciones e Inversiones Lorena Limitada. This act has
been attended by Mr. HUGO BRAVO LOPEZ, a Chilean citizen, married, commercial
engineer, National Id. Card No. 4.709.421-6, hereby acting on behalf of EMPRESAS
PENTA S.A. and INVERSIONES PENTA III LIMITADA and Mr. JOSE GANDARILLAS CHADWICK,
a Chilean citizen, married, commercial engineer, National Id. Card No.
4.889.363-5, hereby acting on behalf of INVERSIONES PENTA III LIMITADA; both of
them of legal age and who have evidenced their corresponding identities by means
of the identity cards individualized hereinabove and hereby represent as
follows: That they have appeared herein in order to grant the aforementioned
joint and several pledge.

FOURTEEN: SEVERABILITY

The nullity, ineffectiveness or unenforceability of any of the clauses or
provisions herein or portion thereof shall not affect this contract or further
clauses or provisions, all of which shall remain in full force and being
enforced as provided, unless dealing with one of the critical elements of this
contract, in which case what provided by the law shall become applicable.

FIFTEEN: EXPENSES

All and every notarial expenses required for the purposes of the execution of
this document and registrations, records and notifications thereof shall be born
by the parties on identical proportions.

SIXTEEN: NOTIFICATIONS

16.1  Every notification or communication that should take place between the
      parties as a result of this Purchasing Contract shall be construed as
      completed once representatives receive a written communication, either
      personally or through registered mail, in both cases, regardless of a
      further fax communication, at their domicile and fax number:

                                       18
<PAGE>

      Selling party: Mr. Hugo Bravo Lopez, domiciled at # 222 Miraflores Street,
      floor 20, Santiago, Fax No. 639-6000; cc to Alcaino, Rodriguez & Sahli
      Limitada, a legal firm, Attn.: Mr. Alfredo Alcaino de Esteve and Mr.
      Eduardo Rodriguez del Rio, domiciled at # 206 Bandera Street, floor 7,
      Santiago, fax No. 699-0217.

      Buying party: Mr. Francisco Lopez Mackenna and/or Mr. Luis Fernando
      Antunez Bories, both of them domiciled at # 20 Enrique Foster Sur, floor
      14, Las Condes district, Fax No. 245-6240; cc to Edmundo Eluchans y
      Compania, a legal firm, Attn.: Mr. Edmundo Eluchans and Mr. Felipe Cruzat,
      domiciled at # 178 Miraflores Street, floor 16, Santiago, fax No.
      638-8571; and Quinenco S.A.'s counsel, Mr. Manuel Jose Noguera, domiciled
      at # 20 Enrique Foster Sur, floor 16, Las Condes district, fax No.
      245-6240.

16.2  Notifications shall be deemed as completed, if delivered personally, on
      the day of actual delivery and, in case of registered mail, five days as
      of actual dispatch.

SEVENTEEN: ARBITRATION

17.1  Any doubt or disagreement arising between the parties as a result of this
      contract, regarding construction, fulfillment, effectiveness, termination
      thereof or any other cause related thereto shall be settled by means of an
      arbitration, as provided under the Arbitration Center Regulation of the
      Santiago Chamber of Commerce, the provisions of which are evidenced in a
      public deed dated December 10, 1992, granted at the Santiago Notary
      Public's office of Mr. Sergio Rodriguez Garces, modified by means of a
      public deed published on August 18, 1995, granted at the Notary Public's
      office of Mr. Raul Undurraga Lazo and modifications thereto, which are an
      integral part of this clause, and which the parties hereby declare to know
      and accept.

17.2  The parties hereby appoint Mr. Patricio Figueroa Velasco as the relevant
      arbitrator, in absence of which shall act Mr. Claudio Illanes Rios.

17.3  In the event neither of the aforementioned arbiters is willing or shall
      undertake such responsibility, the parties hereby grant a special and
      irrevocable power of attorney to the Santiago Chamber of Commerce to
      appoint the relevant arbiter. In this case, either party shall be entitled
      to challenge, with no justification whatsoever, up to three (3) persons
      who are eligible as arbiters according to the Santiago Chamber of
      Commerce.

17.4  No recourse shall be applicable against the resolutions issued by the
      arbitrator, as

                                       19
<PAGE>

      a result of which both parties hereby expressly waive such actions, except
      for the motions for clarification, modification or amendment and appeal
      (queja). The arbitrator shall be specially entitled to settle any matters
      related to its jurisdiction and/or competence.

17.5  At all events, Sellers shall have the right to opt, at their own
      discretion, for undertake the actions for collecting the price balance and
      executing the collateral and personal securities securing it before the
      arbitration court or the ordinary courts of law and Buyer hereby expressly
      waives any proceeding or action or judicial motion aimed at restricting or
      acting as a deterrent for the exercise of this right from Sellers.

EIGHTEEN: APPLICABLE LAW AND DOMICILE

This contract shall be ruled and construed as per the laws of the Republic of
Chile. For all the purposes related thereto, the parties hereby establish their
special domicile in the city and district of Santiago and, except for what
provided under paragraph 17.5, they shall be subject to the arbitration
jurisdiction agreed herein.

NINETEEN: STATEMENT OF ABILITY AND REPRESENTATIONS

All and every appearing party hereby warrant and represent to count on the
necessary powers to subscribe this Purchasing Contract, agree upon the several
provisions and clauses thereof and to undertake the rights and obligations
arising hereof for the parties they act on behalf of. Furthermore, they
represent that this contract counts on the necessary corporate authorizations,
if required.

TWENTY: SPECIAL POWER OF ATTORNEY

The bearer of an authenticated duplicate of this deed shall be entitled to
request the relevant inscriptions, annotations, registrations and
subregistrations that may be required.

TWENTY-ONE: REPRESENTATIONS

It is hereby placed on record that: a) The power of Mr. Carlos Eugenio Lavin
Garcia Huidobro to act on behalf of Mr. CARLOS ALBERTO DELANO ABBOTT; GRACIELA
DEL CARMEN ABBOTT MARIN; VERONICA MENDEZ URETA; MARIA DE LA LUZ CHADWICK
HURTADO; PATRICIA MARIA CHADWICK CLARO; ANNA LUISA GIRARDI GIORDANO; PAULINA
RESTOVIC MONTERO; SERGIO DELANO CONCHA;

                                       20
<PAGE>

INVERSIONES SANTA VERONICA S.A.; ADMINISTRACION E INVERSIONES CONVENTO VIEJO
S.A.; HECTOR FERNANDO CONCHA MARAMBIO; CONCHA Y COMPANIA, SOCIEDAD DE
INVERSIONES LIMITADA; HUGO BRAVO LOPEZ; ADMINISTRACION E INVERSIONES SANTA
SARELLA S.A.; LUIS ERNESTO SILVA BAFALLUY; CARLOS PEDRO GIRARDI GIORDANO; MAXIMO
SILVA BAFALLUY; ISE-LAS AMERICAS COMPANIA DE SEGUROS S.A.; COMPANIA DE SEGUROS
GENERALES LAS AMERICAS S.A.; INMOBILIARIA CHOSHUENCO LIMITADA; INVERSIONES SANTA
SOFIA LIMITADA; AND ADMINISTRACIONES E INVERSIONES LORENA LIMITADA is evidenced
in public deeds granted on January 15, 2001 and March 12 and March 22, 2001
granted at the Santiago Notary Public's Office of Mr. Patricio Raby Benavente;
b) The power of Mr. Hugo Bravo Lopez to act on behalf of EMPRESAS PENTA S.A. is
evidenced in a public deed granted on March 12, 2001 at the Santiago Notary
Public's Office of Mr. Patricio Raby Benavente; c) The power of Mr. Jose
Gandarillas Chadwick to act on behalf of INVERSIONES PENTA III LIMITADA is
evidenced in public deeds granted on March 21, 1996 and November 3. 1995, at the
Santiago Notary Public's Office of Mr. Patricio Raby Benavente; and d) The power
of Mr. Andronico Luksic Craig to act on behalf of LQ INVERSIONES FINANCIERAS
S.A., QUINENCO S.A. and INVERSIONES HIDROSUR LIMITADA is evidenced in public
deeds granted on January 26, 2001 and January 31, 2001 respectively, at the
Santiago Notary Public's Office of Mr. Rene Benavente Cash. The aforementioned
powers of attorney are not attached hereto for the parties and the
authenticating Notary Public are well acquainted therewith and at the express
request thereof.

In witness whereof, the parties read and the authenticating Notary Public sign
this instrument with one single effect on the date of the preamble hereof.
Counterparts are made available.

In witness whereof I have hereunto affixed my hand and seal.

Carlos Eugenio Lavin Garcia Huidobro - Andronico Luksic Craig - Hugo Bravo Lopez
- Jose Gandarillas Chadwick - Andres Rubio Flores - Notary Public.

(Signature Illegible)
---------------------

This counterpart is a faithful copy of the original document

Santiago, March 27, 2001

                                       21
<PAGE>

                                    EXHIBIT A

          BANCO DE CHILE STOCK PURCHASING CONTRACT - LQ TO GRUPO PENTA

<TABLE>
<CAPTION>
--------------------------------------------------------------------------------------------------------------------------------
TAX ID                           SERIES          SERIES                                                     BANCO
  No.         SHAREHOLDER          A     TITLE      B     TITLE   SERIES D   TITLE   SERIES E     TITLE   DE CHILE   TITLE
--------------------------------------------------------------------------------------------------------------------------------
<S>      <C>                     <C>     <C>      <C>     <C>     <C>        <C>     <C>          <C>     <C>        <C>
         Empresas Penta S.A..
--------------------------------------------------------------------------------------------------------------------------------
         Inversiones Penta III
         Limitada
--------------------------------------------------------------------------------------------------------------------------------
         Ise-Las Americas
         Cia de Seguros de
         Vida S.A.
--------------------------------------------------------------------------------------------------------------------------------
         Cia. De Seg.
         Grales Las Americas S.A.
--------------------------------------------------------------------------------------------------------------------------------
         Inversiones Santa
         Veronica S.A.
--------------------------------------------------------------------------------------------------------------------------------
         Adm. E Inversiones
         Convento Viejo S.A.
--------------------------------------------------------------------------------------------------------------------------------
         Carlos Delano Abbott
--------------------------------------------------------------------------------------------------------------------------------
         Carlos Lavin Garcia
         Huidobro
--------------------------------------------------------------------------------------------------------------------------------
         Hugo Bravo Lopez
--------------------------------------------------------------------------------------------------------------------------------
         Veronica Mendez Ureta
--------------------------------------------------------------------------------------------------------------------------------
         Graciela Abbott Marin
--------------------------------------------------------------------------------------------------------------------------------
         Sergio Delano Concha
--------------------------------------------------------------------------------------------------------------------------------
         Luis Ernesto Silva
         Bafalluy
--------------------------------------------------------------------------------------------------------------------------------
         Paulina Restovic
         Montero
--------------------------------------------------------------------------------------------------------------------------------
         Inmobiliaria
         Choshuenco Ltda.
--------------------------------------------------------------------------------------------------------------------------------
         Hector Concha
         Marambio
--------------------------------------------------------------------------------------------------------------------------------
         Anna Luisa Girardi
         Giordano
--------------------------------------------------------------------------------------------------------------------------------
         Adm. E Inversiones
         Lorena Ltda.
--------------------------------------------------------------------------------------------------------------------------------
         Carlos Girardi Giordano
--------------------------------------------------------------------------------------------------------------------------------
         Concha y Cia. Soc de
         Inv. Ltda.
--------------------------------------------------------------------------------------------------------------------------------
         Maria de la Luz
         Chadwick Hurtado
--------------------------------------------------------------------------------------------------------------------------------
         Maximo Silva Bafalluy
--------------------------------------------------------------------------------------------------------------------------------
         Patricia Chadwick
         Claro
--------------------------------------------------------------------------------------------------------------------------------
         Inversiones Santa
         Sofia Ltda.
--------------------------------------------------------------------------------------------------------------------------------
Total shares
--------------------------------------------------------------------------------------------------------------------------------
Total to be acquired
--------------------------------------------------------------------------------------------------------------------------------
</TABLE>

                                       22
<PAGE>

                                    EXHIBIT B

Definitions

P = principal owed in UF as of advanced payment date

i = price balance interest (8.5 per year, based on a 360-day year)

ip = advanced payment interest (7.4 per year, based on a 360-day year)

q = P portion paid on an advanced basis

z = number of days elapsed as of last payment of interests

ID = accrued and unpaid interests until advanced payment date corresponding to
the principal portion paid on an advanced basis

y = number of days elapsed from advanced payment date until day 720

CP = advanced payment penalty

CT = total amount paid expressed in UF

P' = new principal owed in UF

Formulas

ID = P x q [(1 + i)(z/360) - 1]

CP = P x q (1 + i)(y/360) - (P x q)
     -------------------
       (1 + ip)(y/360)

CT = P x q + ID + CP (should advanced payment occurs 18 months prior to Promise
to sell)

CT = P x q + ID (should advanced payment occurs 18 months after Promise to sell)

P' = P x (1 - q)

[Signatures illegible]

                                       23
<PAGE>

EXAMPLE:

Should UF 100,000 be paid in advance on day 60 of the contract and
P = UF 250,000

Then q = 100,000 0.4
         -------
         250,000

ID = 250,000 x 0.4 x (1.085)(60/360) - 100,000

ID = UF 1,369

CP = 100,000 x (1.085)(660/360) - 100,000
     --------------------------
          (1.074)(660/36)

CP = UF 1.886

CT = 100,000 + 1,369 + 1,886

CT = UF 103,255

P' = 250,000 x (1 - 0.4)

P' = 150,000

[Signatures illegible]

                                       24
<PAGE>

                                   CERTIFICATE

I hereby certify that the document hereinabove contains 4 pages only written on
the front and is a faithful duplicate of the document attached to the end of the
records kept by this Notary's Office under No. 109, corresponding to March 2001
and that is formalized by virtue of what provided under the public deed
accounting to the Stock Purchasing Contract of Sociedad Matriz Banco de Chile
S.A. and Banco de Chile, Joint and Several Bail and Stock Pledge, LQ Inversiones
Financieras S.A. et al and Empresas Penta S.A. et al, granted on March 27, 2001,
Record No. 1081 / 2001.

Santiago de Chile, March 27, 2001.

[Stamp: ANDRES RUBIO FLORES
NOTARY PUBLIC
8th NOTARY PUBLIC'S OFFICE OF
SANTIAGO - Signature Illegible].

                                       25
<PAGE>

                 PLEDGE AND PROHIBITION NOTICE AND REGISTRATION

The authenticating Notary Public hereby notifies and registers the pledge and
prohibition provided by means of a public deed granted in his presence on March
27, 2001, Record No. 1081 / 2001, whereby it is certified that LQ INVERSIONES
FINANCIERAS S.A. bought the shares specified hereinbelow from the parties
detailed hereinafter: Empresas Penta S.A.; Inversiones Penta III Limitada;
ISE-Las Americas Compania de Seguros de Vida S.A.; Compania de Seguros Generales
Las Americas S.A.; Inmobiliaria Choshuenco Limitada; Carlos Eugenio Lavin Garcia
Huidobro; Carlos Alberto Delano Abbott; Graciela del Carmen Abbott Marin;
Veronica Mendez Ureta; Maria de la Luz Chadwick Hurtado; Patricia Maria Chadwick
Claro; Anna Luisa Girardi Giordano; Paulina Restovic Montero; Sergio Delano
Concha; Inversiones Santa Veronica S.A.; Administracion e Inversiones Convento
Viejo S.A.; Hector Fernando Concha Marambio; Concha y Compania, Sociedad de
Inversiones Limitada; Hugo Bravo Lopez; Administracion e Inversiones Santa
Sarella S.A.; Luis Ernesto Silva Bafalluy; Carlos Pedro Girardi Giordano; Maximo
Silva Bafalluy; Inversiones Santa Sofia Limitada; and Administraciones e
Inversiones Lorena Limitada. Shares: 74,916,382 shares of SM Chile - Series A;
1,757,937,839 shares of SM Chile - Series B; 58,763,920 shares of SM Chile -
Series D; 457,456 shares of SM Chile - Series E; which are evidenced under
titles No.: 1009496-08; 1056009-08; 38974-09; 30042-10. Likewise, Buyer hereby
grants a commercial pledge on the aforementioned shares and a prohibition to
encumber and transfer them without the prior authorization in writing from
Sellers for the purposes of securing all and every principal and accessory
obligations undertaken by Buyer by virtue of the aforementioned contract,
particularly, payment of the price balance, the adjustments, regular interests,
interests on arrears and costs, as per the terms and conditions and modalities
specified under such deed.

Notary Public hereby places on record that he hereby makes available an
authenticated counterpart of the deed specified hereinabove

This act has been carried out at the request of the secured creditor.

Santiago de Chile, March 27, 2001

[Stamp and Signature]
Notary Public's Office of Andres Rubio Flores

                                       26
<PAGE>

                                   CERTIFICATE

I hereby certify that on today's date, March 27, 2001, I made available at the
premises of Banco de Chile, located at # 251 Ahumada Street, Santiago, at the
Shares Department, an authenticated photocopy of the document called Termination
and Liquidation of SM Chile Shareholders Agreement, dated Santiago de Chile,
March 27, 2001, which was attached to Book 2, Sheet 359, with my notarial stamp.
Following, I provided the Head of the Shares Department, Mr. Walter Kaufmann
Cabiol with an authenticated counterpart of the Public Deed hereinabove, dated
March 27, 2001, record No. 1081, certifying the stock purchase carried out by
the group referred to as Grupo Penta to LQ Inversiones Financieras S.A., for the
purposes of undertaking the corresponding transfer and issue of the new titles
to the name of Buyers.

Following, I notified and registered the Pledge and Prohibition evidenced in the
aforesaid Public Deed, as per the terms specified at the back of such document,
Pledge and Prohibition, the inscription of which was performed on Book 2, sheet
422 of the Attached book where record is placed on this type of encumbrances.

I hereby place on record that the aforementioned actions were carried out at the
request of attorneys Messrs. Edmundo Eluchans Urenda and Alfredo Alcaino De
Esteve.

Santiago de Chile, March 27, 2001.

[Stamp: ANDRES RUBIO FLORES
NOTARY PUBLIC
8th NOTARY PUBLIC'S OFFICE OF
SANTIAGO - Signature Illegible].

[Stamp: BANCO DE Chile
MARCH 27, 2001
Signature Illegible].

                                       27EXHIBIT 4.1

                             SECURED PROMISSORY NOTE

 $___________                                          SAN FRANCISCO, CALIFORNIA
                                                               DECEMBER 31, 2002

         FOR VALUE RECEIVED, the undersigned SUTTER HOLDING COMPANY, INC., a
Delaware corporation ("Maker"), promises to pay to the order of
____________________________ ("Holder"), c/o Timothy Birch, Finn Dixon &
Herling, One Landmark Square, Suite 1400, Stamford, CT. 06901, or at such other
place as any holder hereof may designate in writing, the principal sum of
$__________, as may be adjusted below, together with interest thereon from the
date hereof at the rate of 4% per annum, until paid in full; provided, however,
that during any period in which an Event of Default is continuing the Maker
shall pay interest on the unpaid principal balance outstanding from time to time
at a rate per annum equal to equal to 5% in excess of the Prime Rate per annum.
The term "Prime Rate" shall mean a fluctuating interest rate per annum equal to
the rate of interest announced publicly from time to time (whether or not
charged in each instance) by Citibank, N.A., as that bank's base rate or general
reference rate for its most creditworthy borrowers. The balance of outstanding
principal and accrued but unpaid interest will be paid in full on July 31, 2007
(the "Maturity Date"). Certain terms are defined in Annex II attached hereto and
hereby made a part hereof. Capitalized terms used in this Note, but not
otherwise defined herein or on Annex II attached hereto, will have the
respective meanings set forth in that certain Stock Purchase Agreement dated as
of the date hereof among Maker, Easton Mortgage Corporation, a California
corporation ("Easton"), Holder, Timothy A. Birch, Stone Williams, LLC, Craig R.
Bush, Diana Mead, and Lawrence Anspach (the "Purchase Agreement").

         This Note is one of the Notes issued by the Maker pursuant to Section
2.2(c) of the Purchase Agreement (collectively, the "Notes"). The Notes rank
equally and ratably without priority over one another. No payment, including any
prepayment, may be made hereunder unless payment, including any prepayment, is
made with respect to the other Notes in an amount which bears the same ratio to
the then unpaid balance on such other Notes as the payment made hereon bears to
the then unpaid balance under this Note.

         1. The Maker will make monthly payments commencing on the last day of
January 2003, and on the last day of each month thereafter up to and including
the Maturity Date until this Note is paid in full (the "Regularly Scheduled
Payment Dates"). Prior to the time when the determination of any adjustment to
the face amount of this Note is made pursuant to Section 2.3.1 of the Purchase
Agreement (expected to be April 2005), the amount of each such monthly payment
will be equal to one-third (1/3) of the Quarterly Payment Amount. "Quarterly
Payment Amount" means, for any fiscal quarter, the lesser of the Cash Flow
Payment or the Payment Ceiling. "Cash Flow Payment" means 77.091% of Easton's
EBITDA during the fiscal quarter preceding the fiscal quarter for which the Cash
Flow Payment is measured; provided, however, that for the first three Regularly
Scheduled Payment Dates the Cash Flow Payment means 77.091% of three times
Easton's EBITDA during the month preceding the Regularly Scheduled Payment Date.
"Payment Ceiling" means the Note Payment, provided that (1) if the Cash Flow
Payment was used to determine a Quarterly Payment Amount, the Payment Ceiling
for subsequent Quarterly Payment Amount determinations will be increased by the
amount, if any, that the Note Payment exceeded the Cash Flow Payment for such
Quarterly Payment Amount, but only if there is a positive balance of the Unused
EBITDA and (2) the Payment Ceiling will be decreased by the amount of any Used
EBITDA. "Note Payment" means $_________ per fiscal quarter. "Unused EBITDA"
means 96.364% of (a) the sum of the EBITDA for all complete fiscal quarters
since January 1, 2003; minus (b) the number of complete fiscal quarters since
January 1, 2003 multiplied by $208,992; minus (c) any Used EBITDA. "Used EBITDA"
means sum of the amounts, if any, by which any Quarterly Payment Amount exceeds
the Note Payment. On and after the first Regularly Scheduled Payment date after
any adjustment to the face value of this Note pursuant to Section 2.3.1 of the
Purchase Agreement, the remaining

SECURED PROMISSORY NOTE--PAGE 1 0F 14
<PAGE>
outstanding  principal of this Note (after giving effect to such adjustment) and
accrued   interest   thereon  will  be  amortized  and  paid  in  equal  monthly
installments over a 30 month period commencing on the date of such adjustment.

EXAMPLE:

         FOR FIRST QUARTER 2003: Assume that during December, 2002, the
Company's EBITDA is $75,000. This will result in a Cash Flow Payment as
calculated in January, 2003, of $173,454.75 ($75,000 multiplied by 3 multiplied
by 77.091%). Meanwhile, the Payment Ceiling will not increase because there have
not been any payments where the Cash Flow Payment was less than the Note Payment
and because Unused EBITDA only includes complete fiscal quarters after January
1, 2003. Because the Payment Ceiling (which will be equal to the Note Payment)
is less than the Cash Flow Payment, the payment for January, 2003, will be
one-third of the Payment Ceiling. (If instead the Cash Flow Payment were less
than the Note Payment, the payment for January, 2003, would be equal to
one-third of the Cash Flow Payment, but there would be no adjustment to Unused
EBITDA or the Payment Ceiling). The calculation of the payments due in February
and March, 2003, would be equal to the lesser of the Cash Flow Payment (based
upon EBITDA from January and February, 2003, respectively) or the Note Payment,
with no effect on Unused or Used EBITDA or the Payment Ceiling.

         FOR SECOND QUARTER 2003: Assume that during the first quarter of 2003,
the Company's EBITDA is $250,000. This will result in a Cash Flow Payment of
$192,727.50 for the second quarter of 2003 ($250,000 multiplied by 77.091%). The
Payment Ceiling will not have increased because the Note Payment is less than
the Cash Flow Payment, and the Quarterly Payment Amount will be equal to the
Payment Ceiling (which is equal to the Note Payment). Thus, the monthly payments
during third quarter of 2003 are $53,704.69 (the Payment Ceiling divided by 3).
Unused EBITDA will be $39,516.95 (96.364% of the difference between $250,000 and
$208,992).

         FOR THIRD QUARTER 2003: Assume that second quarter EBITDA is $200,000,
resulting in a Cash Flow Payment of $154,182.00 ($200,000 multiplied by
77.091%). The Cash Flow Payment is less than the Payment Ceiling (still equal to
the Note Payment), so monthly payments during the third quarter of 2003 are
$51,394.00 (the Cash Flow Payment divided by 3). Meanwhile, "Unused EBITDA" is
$30,207.74 (96.364% of (a) $250,000 plus $200,000, minus (b) $208,992 multiplied
by 2, minus (c) $0.00. There will be no Used EBITDA.

         FOR FOURTH QUARTER 2003: Assume that third quarter 2003 EBITDA is
$230,000, resulting in a Cash Flow Payment of $177,309.30 for the fourth quarter
2003 ($230,000 multiplied by 77.091%). Meanwhile, "Unused EBITDA" is $51,096.04
(96.364% of (a) $250,000 plus $200,000 plus $230,000, minus (b) $208,992
multiplied by 3, minus (c) $0.00). The Payment Ceiling will be equal to
$168.046.14 ($161,114.07 plus $6,932.07, the latter of which is the amount that
the Note Payment exceeded the Cash Flow Payment for the third quarter 2003,
which is less than the Unused EBITDA). The Payment Ceiling is less than the Cash
Flow Payment, so monthly payments during the third quarter of 2003 are
$56,015.38 ($168,046.14 divided by 3). This will cause "Used EBITDA" at the end
of the fourth quarter to be $6,932.07 ($168,046.14 minus $161,114.07), which
will cause the Payment Ceiling to drop by $6,932.07 back down to the Note
Payment amount of $161,114.07, and the Unused EBITDA will be reduced
correspondingly for the next quarter.

         2. Holder acknowledges and agrees that the Maker will have no
obligation to pay this Note if and to the extent that (i) the Maker has the
right, under the Purchase Agreement, to offset amounts determined by Section 9.4
of the Purchase Agreement against amounts payable under this Note and/or (ii)
the principal amount of this Note is reduced in accordance with Section 2.3.1 of
the Purchase Agreement. The provisions of the Purchase Agreement will control
the provisions of this Note with respect to such

SECURED PROMISSORY NOTE--PAGE 2 0F 14
<PAGE>
offset rights or reductions in principal. The amount of any offset arising under
clause (i) above shall be applied against the monthly payments becoming due
under Section 1 of this Note commencing on the next Regularly Scheduled Payment
Date and continuing thereafter until the offset right is extinguished.

         3. The Maker hereby agrees, until full payment and performance by the
Maker of this Note, the other Notes and the other Financing Documents, to fully
comply with all of the covenants and agreements set forth in Annex I attached
hereto and hereby made a part hereof.

         4. This Note shall be subject to prepayment as follows:

                  (a) The Maker will have the right to prepay this Note, in
whole or in part, at any time with no prepayment penalties.

                  (b) As soon as possible, and in any event within twenty (20)
Business Days prior to the occurrence of a Mandatory Prepayment Event, the Maker
shall furnish to the Holder written notice setting forth in reasonable detail
the facts and circumstances underlying such Mandatory Prepayment Event. The
occurrence of any such Mandatory Prepayment Event shall constitute an
irrevocable offer by the Maker to prepay all, but not less than all, of this
Note (and the other Notes) at an amount equal to the then unpaid principal
amount thereof (and of them in the aggregate) together with all accrued and
unpaid interest through the date of prepayment (plus any unpaid costs and
expenses owed to Holder (and the holders of the other Notes) under the Financing
Documents), on the closing date of the Mandatory Prepayment Event. Following
receipt of any offer to prepay this Note under this paragraph, the Holder shall
advise the Maker, by written notice within ten (10) days after receipt of such
offer, as to whether the Holder desires to have this Note so prepaid. If the
Holder fails to respond to such offer by the Maker within the ten (10) day
acceptance period, such offer shall be deemed to be accepted. The Maker will not
enter into any agreement relating to a Mandatory Prepayment Event unless such
agreement is conditioned upon compliance with this paragraph.

                  (c) Any prepayments hereunder shall be applied first to
interest accrued but unpaid as of the date of payment and then to outstanding
principal. Any prepayments made by Maker shall be allocted among all of the
Notes pro-rata based on the outstanding principal balances of each of them.

         5. This Note is secured by a pledge of 3,000 shares held by Maker in
Easton pursuant to that certain Securities Pledge Agreement dated as of the date
of this Note (the "Pledge Agreement"). The liability of the Maker for the
repayment of the indebtedness evidenced by this Note shall be nonrecourse and
will be limited to the security given by the Maker for this Note under the
Pledge Agreement.

         6. An "Event of Default" shall exist under this Note if any of the
following occurs and regardless of the reason for such occurrence:

                  (a) The Maker shall fail to make any payment of any principal
or interest, when any of the same shall become due under this Note (whether due
at maturity or by reason of acceleration or demand or as part of any prepayment
or otherwise) and such failure shall continue for a period of ten (10) calendar
days.

                  (b) The Maker shall fail to make any payment of any other
amount payable under this Note or any other Financing Document and such failure
shall continue for a period of ten (10) calendar days after written notice of
such failure shall have been given to the Maker by the Holder.

                  (c) The occurrence of any "Event of Default" as defined in any
other Financing Document.

SECURED PROMISSORY NOTE--PAGE 3 0F 14
<PAGE>
                  (d) The Maker shall default in the due performance or
observance of:

                           (i) any material agreement or covenant contained in
         Articles 1 or 2 of Annex I hereto; or

                           (ii) any other material agreement or covenant
         contained in this Note (other than a covenant or agreement a default in
         the performance or observance of which is specifically dealt with in
         any part of this Section 6 other than this clause (ii));

and such default shall have continued unremedied for a period of fifteen (15)
calendar days after the earlier to occur of (A) the Maker becoming aware of such
default or (B) Holder notifying the Maker of such default; provided, that, there
shall be no such continuation period for a default in the performance or
observance of its obligations under Sections 1.1 or 1.4 of Article 1 of Annex I
hereto.

                  (e) Any representation or warranty made or furnished to the
Holder by or on behalf of the Maker under any Financing Document or any document
relating thereto or delivered in connection therewith or pursuant thereto proves
to have been false or misleading in any material respect when made or furnished.

                  (f)

                           (i) The Maker shall fail to make any payment when
         due, after any applicable grace and/or notice period (if any), in
         respect of any Indebtedness under the Senior Loan Documents or any
         event or condition shall occur which (i) results in the acceleration or
         other early required payment or maturity of such Indebtedness, or (ii)
         enables or entitles the holder of any such Indebtedness to accelerate
         the maturity thereof (or otherwise require the early payment thereof).

                           (ii) The Maker or Easton shall fail to make any
         payment when due, after any applicable grace period (if any), in
         respect of any Indebtedness (other than Indebtedness under the
         Financing Documents) or any event or condition shall occur which (i)
         results in the acceleration or other early required payment of the
         maturity of such Indebtedness, or (ii) enables or entitles the holder
         of any such Indebtedness to accelerate the maturity thereof (or
         otherwise require the early payment thereof).

                  (g)      Bankruptcy; Liquidation

                           (i) The Maker shall commence a voluntary case or
         other proceeding seeking liquidation, reorganization or other relief
         with respect to itself or its debts under any bankruptcy, insolvency or
         other similar law now or hereafter in effect or seeking the appointment
         of a trustee, receiver, liquidator, custodian or other similar official
         of it or any substantial part of its property, or shall consent to any
         such relief or to the appointment of or taking possession by any such
         official in an involuntary case or other proceeding commenced against
         it, or shall make a general assignment for the benefit of creditors, or
         shall fail generally to pay its debts as they become due (or shall
         admit in writing such inability), or shall take any corporate or
         limited liability the Maker action to authorize any of the foregoing;
         or

                           (ii) An involuntary case or other proceeding shall be
         commenced against the Maker or Easton seeking liquidation,
         reorganization or other relief with respect to it or its debts under
         any bankruptcy, insolvency or other similar law now or hereafter in
         effect or seeking the appointment of a trustee, receiver, liquidator,
         custodian or other similar official to it or any

SECURED PROMISSORY NOTE--PAGE 4 0F 14
<PAGE>
         substantial part of its property, and such involuntary case or other
         proceeding shall remain undismissed and unstayed for a period of 60
         days; or an order for relief shall be entered against the Maker under
         the federal bankruptcy laws as now or hereafter in effect.

                  (h) Any Lien created by any of the Financing Documents shall
at any time fail (except by reason of Holder's failure to take any actions
required to preserve or perfect such Lien) to constitute a valid and perfected
Lien on any material collateral purported to be secured thereby, subject to no
other Lien except as may be permitted by the Financing Documents.

                  (i) Easton shall be prohibited or otherwise materially
restrained from conducting any material business theretofore conducted by it by
virtue of any determination, ruling, decision, decree or order of any court or
regulatory authority of competent jurisdiction and such determination, ruling,
decision, decree or order remains unstayed and in effect for any period of 10
days.

                  (j) Any of the Financing Documents to which Maker is a party
shall for any reason fail to constitute (or the Maker shall assert that any does
not constitute) the valid and binding agreement of the Maker in any material
respect.

                  (k) A writ of execution, attachment, garnishment, replevin or
any similar process shall be issued or levied with respect to any property of
the Maker the value of which individually or in the aggregate equals or exceeds
$250,000 or any order, judgment or decree shall be entered against the Maker by
a court of competent jurisdiction which, together with other outstanding orders,
judgments, and decrees against the Maker equals or exceeds $250,000 and any such
execution, attachment, garnishment, replevin, similar process, or judgment(s)
shall continue in effect for any period of thirty (30) calendar days or more
without being released or a stay of execution with respect thereto being
granted.

                  (l) Any material breach or material default by the Maker of
the terms of the Purchase Agreement, including without limitation the covenants
contained therein, continued unremedied for a period of fifteen (15) calendar
days after the earlier to occur of (A) the Maker becoming aware of such default
or (B) Holder notifying the Maker of such default.

         Upon the occurrence of any such Event of Default and at any time
thereafter during the continuance of any such Event of Default, the Holder, by
written notice to the Maker, may declare the entire unpaid principal balance of
this Note, and all accrued and unpaid interest under this Note, to be due and
payable immediately, and upon any such declaration the entire unpaid principal
balance of this Note and all accrued and unpaid interest under this Note shall
become and be immediately due and payable, without the need for presentment,
demand for payment, protest, notice of dishonor or protest or other notice of
any kind (except any notice, if any, expressly required under this Note) all of
which are expressly waived by the Maker; provided, however, that upon the
occurrence of any of the events specified in subparagraph (g) above, the entire
unpaid principal balance of this Note, and all unpaid and accrued interest under
the Note, shall be immediately due and payable without any notice whatsoever and
without presentment, demand for payment, protest, notice of dishonor or protest
or other notice of any kind, all of which are hereby expressly waived by the
Maker. Holder shall have, upon the occurrence and during the continuance of any
Event of Default, all other rights, remedies, and powers provided to the Holder
under the Financing Documents, any other applicable agreement, instrument or
other document or applicable law.

         7. Maker represents and covenants that the proceeds of this Note will
be used for business or commercial purposes, and not for personal, family, or
household purposes.

SECURED PROMISSORY NOTE--PAGE 5 0F 14
<PAGE>
         8. This Note is non-negotiable, and may not be transferred by
endorsement and delivery or by delivery alone, except that Holder may assign or
transfer the Note to any Affiliate if such Affiliate agrees in writing to be
bound by the terms of this Note, the Purchase Agreement and the Financing
Documents, including, without limitation, Section 2 of this Note.

         9. Maker waives, to the fullest extent permitted by applicable law,
presentment, diligence, protest, demand, notice of demand, notice of acceptance
or reliance, notice of non-payment, notice of dishonor, notice of protest and
all other notices (except notices expressly provided for in the Financing
Documents) to parties in connection with the delivery, acceptance, performance,
default or enforcement of this Note or any collateral or other security.

         10. THE MAKER, AND HOLDER BY ITS ACCEPTANCE OF THIS NOTE. EACH HEREBY
KNOWINGLY AND VOLUNTARILY WAIVES TRIAL BY JURY AND THE RIGHT THERETO IN ANY
ACTION OR PROCEEDING OF ANY KIND, ARISING UNDER OR OUT OF, OR OTHERWISE RELATED
TO OR OTHERWISE CONNECTED WITH THIS NOTE OR ANY OTHER FINANCING DOCUMENT.

         11. This Note will be governed by the laws of the State of California,
without regard to its conflicts of laws rules, it being the intent that the
substantive laws of the State of California will always apply.

         12. This Note shall bind the Maker and Maker's successors and assigns
and shall inure to the benefit of the Holder, its successors and assigns. The
Maker shall not, without the prior written consent of the Holder, assign any of
its rights or obligations under this Note or any of the other Financing
Documents.

         13. Any provision of this Note or other Financing Document which is
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof or thereof in such jurisdiction,
and any such prohibition or unenforceability in any jurisdiction shall not
invalidate or render unenforceable such provision in any other jurisdiction.

         14. The Holder shall not by any act (except by a written instrument
executed and delivered in accordance with the immediately following paragraph),
delay, indulgence, omission or otherwise be deemed to have waived any right,
remedy or other power hereunder or under any other Financing Document or to have
acquiesced in any Event of Default. No failure to exercise, nor any delay in
exercising, on the part of the Holder, any right, remedy or other power shall
preclude any other or further exercise thereof or the exercise of any other
right, remedy or other power. No single or partial exercise of any right,
remedy, or power hereunder or under any other Financing Document shall preclude
any other or further exercise thereof or the exercise of any other right, remedy
or power. A waiver by the Holder of any right, remedy or power hereunder or
under any other Financing Document on any one occasion shall not be construed
as, or constitute a bar to, any right, remedy or other power which the Holder
would otherwise have on any future occasion. The rights, remedies and powers
provided to the Holder herein or in any other Financing Document are cumulative,
may be exercised singly or concurrently and are not exclusive of and shall be in
addition to all other rights, remedies, or powers provided by applicable law or
any other agreement, instrument or other document. Holder may exercise any or
all such rights, remedies and powers at any time(s) in any order which Holder
chooses in its discretion.

         15. The terms and provisions of this Note may only be waived, amended,
supplemented or otherwise modified by a writing executed and delivered by the
Maker and the Holder.

SECURED PROMISSORY NOTE--PAGE 6 0F 14
<PAGE>
         16. This Note, the other Financing Documents and the Purchase Agreement
represent the agreement of the Maker and the Holder with respect to the subject
matter hereof and thereof and supersede all negotiations and prior writings with
respect to the subject matter hereof and thereof, and there are no promises,
undertakings, representations or warranties by the Holder relative to subject
matter hereof or thereof that are not expressly set forth or referred to herein,
in the other Financing Documents or in the Purchase Agreement.

         17. Whenever the context herein so requires, the neuter gender includes
the masculine or feminine, and the singular number includes the plural, and
vice-versa. Maker acknowledges that Maker and Maker's counsel have had an
opportunity to review and negotiate the terms and provisions of this Note and
the other Financing Documents, and no rule of strict construction shall be used
against the Holder with respect to this Note or any of the other Financing
Documents.

         18. All notices under this Note (or other Financing Documents) to the
Maker or the Holder, as the case may be, shall be in writing (including prepaid
overnight courier, facsimile transmission or similar writing) and shall be given
to other party at its address or telecopy number set forth on the signature
pages hereof or at such other address or telecopy number as the Maker or the
Holder, as the case may be, may hereafter specify for the purpose by notice to
the other party(ies). Each such notice shall be effective (i) if given by
telecopy, when such telecopy is transmitted to the telecopy number specified in
on the signature pages hereof and automatic or telephonic confirmation of
receipt thereof is obtained, or (ii) if given by mail, prepaid overnight courier
or any other means, when received at the address specified on the signature
pages hereof or when delivery at such address is refused.

         19. If this Note becomes mutilated and is surrendered by the Holder
with respect thereto to the Maker, of if Holder claims that this Note has been
lost, destroyed or wrongfully taken, the Maker shall execute and deliver to
Holder a replacement Note, in like tenor, upon the affidavit of Holder attesting
to such loss, destruction or wrongful taking with respect to this Note and such
lost, destroyed, mutilated, surrendered or wrongfully taken Note shall be deemed
to be replaced for all purposes hereof. Such affidavit shall be accepted as
satisfactory evidence of the loss, wrongful taking or destruction thereof and no
indemnity shall be required as a condition of the execution and delivery of a
replacement Note other than a customary indemnify of the Holder.

         20. Any controversy, dispute, or claim arising out of or relating to
this Note or the breach hereof that cannot be settled by mutual agreement
(except for actions by any party seeking equitable, injunctive or other relief)
will be finally settled by arbitration as follows: Any party who is aggrieved
will deliver a notice to the other parties hereto setting forth the specific
points in dispute. Any points remaining in dispute 20 days after the giving of
such notice will be submitted to arbitration in San Francisco, California, to
JAMS/Endispute, before a single arbitrator appointed in accordance with
JAMS/Endispute's Arbitration Rules, modified as expressly provided herein. The
Maker and Holder consent to conducting one arbitration for all similar
promissory notes issued by Maker pursuant to the Purchase Agreement to the
extent that there is any dispute with respect to such other notes at the time of
the arbitration. The arbitrator may enter a default decision against any party
who fails to participate in the arbitration proceedings. The decision of the
arbitrator on the points in dispute will be final, unappealable, and binding,
and judgment on the award may be entered in any court having jurisdiction. The
parties irrevocably consent to the jurisdiction and venue of the state and
federal courts located in San Francisco County, California, in connection with
any action relating to this Agreement. Notwithstanding any other provision of
this Note, the arbitrator will be authorized to apportion its fees and expenses
and the reasonable attorney fees and expenses of the parties as the arbitrator
deems appropriate. In the absence of any such apportionment, the fees and
expenses of the arbitrator will be borne 50% by the Maker, on the one hand, and
50% by the Holder, on the other hand, and each such party will bear the fees and
expenses of its own attorneys. The parties agree that this clause has been
included to rapidly and inexpensively

SECURED PROMISSORY NOTE--PAGE 7 0F 14
<PAGE>
resolve any disputes between them with respect to this Note, and that this
clause will be grounds for dismissal of any court action commenced by either
party with respect to this Note, other than post-arbitration actions seeking to
enforce an arbitration award and claims or controversy outside of this Note. The
parties will keep confidential, and will not disclose to any person, except as
may be required by law, the existence of any controversy hereunder, the referral
of any such controversy to arbitration or the status or resolution thereof.

         21. This Note may be executed in counterparts, each of which shall be
considered an original but all of which together shall be deemed a single
instrument.

                                  MAKER:

                                  Sutter Holding Company, Inc, a Delaware
                                  corporation

                                  --------------------------------------
                                  William G. Knuff, III, Chief Executive Officer

                                  Address:
                                  150 Post Street, Suite 320
                                  San Francisco, CA 94108
                                  (415) 788-1445
                                  (415) 788-1515
                                  (Facsimile)

SECURED PROMISSORY NOTE--PAGE 8 0F 14
<PAGE>

                                     ANNEX I

                        ARTICLE 1. AFFIRMATIVE COVENANTS

         The Maker covenants and agrees as follows:

         1.1 Corporate Existence; Operations of the Maker. The Maker will do or
cause to be done all things necessary to preserve and keep in full force and
effect its corporate existence and all of its other franchises, licenses and
rights.

         1.2 Records and Accounts. The Maker will (a) keep true and accurate
records and books of account in which full, true and correct entries will be
made in accordance with generally accepted accounting principles, and (b)
maintain adequate accounts and reserves for all Taxes (including income taxes),
depreciation, depletion, obsolescence and amortization of its properties,
contingencies, and other reserves.

         1.3 Insurance. The Maker at all times will maintain insurance, in such
amounts (including, without limitation, so-called "all-risk" coverage at
replacement value and "broad form" liability coverage), against such hazards and
liabilities and for such purposes as is reasonably prudent and in any event no
less than is customary in the industry for companies engaged in the same or
similar businesses and owning or operating similar properties.

         1.4 Taxes. The Maker will pay or cause to be paid all Taxes,
assessments or governmental charges on or against it or any of its properties
prior to such becoming delinquent; except for any Tax, assessment or charge
which is being contested in good faith by proper legal proceedings and with
respect to which adequate reserves have been established and are being
maintained.

         1.5      Notices.

                  1.5.1 Events of Default. The Maker will promptly notify the
Holder in writing of the occurrence of any Event of Default. If any Person shall
give any notice or take any other action in respect of a claimed default
(whether or not constituting an Event of Default) under this Note or any other
Indebtedness involving in excess of $10,000 to which or with respect to which
the Maker is a party or obligor, whether as principal, guarantor, surety or
otherwise, the Maker shall forthwith give written notice thereof to the Holder,
describing the notice or action and the nature of the claimed default.

                  1.5.2 Notice of Litigation and Judgments. The Maker will give
notice to the Holder in writing within fifteen (15) days of becoming aware of
any litigation or proceedings threatened in writing or any pending litigation
and proceedings affecting the Maker or to which the Maker is or becomes a party
involving an uninsured claim against the Maker that could reasonably be expected
to have a Material Adverse Effect and stating the nature and status of such
litigation or proceedings. The Maker will give notice to the Holder, in writing,
in reasonable detail, within ten (10) days of any judgment not covered by
insurance, final or otherwise, against the Maker in an amount in excess of
$10,000.

         1.6 Inspection of Properties and Books, etc. The Maker shall permit
Holder and its designated representatives, upon reasonable notice (provided,
that no such notice shall be required if an Event of Default has occurred and is
continuing and the Holder in its good faith discretion believes that having to
give such notice could impair the Holder's interests) to visit and inspect any
of the properties of the Maker, to examine the books of account of the Maker
(and to make copies thereof and extracts therefrom) and to discuss the affairs,
finances and accounts of the Maker with, and to be advised as to the same by,
its officers and managers, all at such reasonable times and intervals (during
normal business

SECURED PROMISSORY NOTE--PAGE 9 0F 14
<PAGE>
hours if no Event of Default has occurred and is continuing) as
Holder may reasonably request; provided that Holder and its designated
representatives shall agree in writing to keep any material, nonpublic
information obtained from Maker confidential until such information becomes
public and not to trade in the securities of Maker on the basis of any such
information.

         1.7 Compliance with Laws, Contracts, Licenses, and Permits. The Maker
will comply in all material respects with (a) all laws and regulations
applicable to the existence and operations of its business, wherever its
business is conducted, (b) the provisions of its organizational documents, (c)
all agreements and instruments by which it or any of its properties may be bound
and (d) all applicable material decrees, orders, and judgments, except where the
failure to do so has not had and could not reasonably be expected to have a
Material Adverse Effect.

         1.7 Board Member. In any election of directors of the Maker prior to
the payment in full of this Note, the board of directors of the Maker will
nominate one (1) director selected by RCH, LLC for election to the board of
directors of Maker.

         1.8 Further Assurances. The Maker will cooperate with the Holder and
execute such further instruments and documents as the Holder shall reasonably
request to carry out to its satisfaction the transactions contemplated by this
Note and the other Financing Documents.

         1.9 Compliance with Purchase Agreement. The Maker shall comply with the
covenants applicable to it contained in the Purchase Agreement.

                          ARTICLE 2. NEGATIVE COVENANTS

         The Maker further covenants and agrees that without the prior written
consent of the Holder:

         2.1 Redemptions. The Maker shall not purchase, redeem, retire or
otherwise acquire for value any of its capital stock or apply any of the assets
of the Maker to the purchase, redemption, retirement or other acquisition,
directly or indirectly, of any of its capital stock, whether now or hereafter
outstanding.

         2.2 Employment Agreements; Payments to Employees. The Maker shall cause
Easton to not, (i) enter into any employment, consulting or agency agreement
which will materially impact the profit and loss statement of Easton, or
increase the compensation and benefits payable or to become payable to the
employees of Easton, except with the express consent of the President and/or CEO
of Easton, or (ii) grant any severance or termination pay to any employee of
Easton, or establish, adopt, amend, discontinue, terminate or freeze any bonus,
profit sharing, ERISA Employee Plan applicable to Easton or any employee of
Easton.

         2.3 Accounting Practices. The Maker shall not take any action to
change, alter or amend any accounting policies and procedures pertaining to
Easton, including procedures with respect to accounts payable and collection of
accounts receivable, except as required by GAAP.

         2.4 Exchange Act. The Maker shall comply with its periodic reporting
obligations under the Securities Exchange Act of 1934, as amended, and the rules
promulgated thereunder (the "Exchange Act") and shall use its best efforts to
maintain its status as an issuer obligated to file periodic reports under the
Exchange Act.

         2.5      Special Covenants Relating to Easton.

SECURED PROMISSORY NOTE--PAGE 10 0F 14
<PAGE>
                  2.5.1 The Maker shall not cause a change in the senior
management of Easton during either Measurement Period (as defined in the
Purchase Agreement).

                  2.5.2    The Maker shall cause Easton to not:

                           (a) make any amendment, waiver or other modification
         to any terms or provisions of its certificate of incorporation, by-laws
         or other organizational documents;

                           (b) acquire (including without limitation, by merger,
         consolidation, or acquisition of stock or assets) or form any
         corporation, partnership, other business organization or division
         thereof, which will be merged with or own Easton or which will utilize
         the assets, personnel, credit facility or other operations capability
         of Easton;

                           (c) take any action to change, alter or amend any
         accounting policies and procedures, including procedures with respect
         to accounts payable and collection of accounts receivable, except as
         required by GAAP; or

                           (d) make any distributions to Maker in excess of (i)
         the amount due under the Notes plus (ii) an amount equal to the lesser
         of 20% of EBITDA or $160,000 per annum.

                           .

SECURED PROMISSORY NOTE--PAGE 11 0F 14
<PAGE>

                                    ANNEX II

                                   DEFINITIONS

         A. Certain Definitions. As used herein, the following terms shall have
the following meanings (unless otherwise stated, such meanings to be equally
applicable to both the singular and plural forms of the terms defined):

                  "Business Day" shall mean any day other than a Saturday,
Sunday, public holiday, or the equivalent for banks under the laws of the State
of California.

                  "Capital Lease Obligations" of any Person means the
obligations of such Person to pay rent or other amounts under any lease of (or
other arrangement conveying the right to use) real or personal property, or a
combination thereof, which obligations are required to be classified and
accounted for as capital leases on a balance sheet of such Person under GAAP,
and the amount of such obligations shall be the capitalized amount thereof
determined in accordance with GAAP.

                  "Financing Documents" shall mean this Note, the other Notes,
the Pledge Agreement, the Security Agreement, the Easton Guaranty or any other
guaranty hereof, any pledge agreement of the Maker relating to this Note or any
such guaranty, any assignment, other security agreement or mortgage at any time
securing this Note or any such guaranty, and all other agreements, instruments,
certificates, and other documents executed and/or delivered at any time by the
Maker and/or any other Person pursuant hereto or thereto or in connection
herewith or therewith, as any of same may be amended, supplemented or otherwise
modified from time to time.

                  "GAAP" or "generally accepted accounting principles" shall
mean U.S. generally accepted accounting principles.

                  "Gaines" means Ira Gains, an individual.

                  "Governmental Authority" shall mean the government of any
nation, state, province, city, locality or other political subdivision of any
thereof, any entity exercising executive, legislative, judicial, regulatory or
administrative functions of or pertaining to government, and any corporation or
other entity owned or controlled, through stock or capital ownership or
otherwise, by any of the foregoing.

                  "Guaranty" means a guaranty, an endorsement, a contingent
agreement to purchase or to furnish funds for the payment or maintenance of, or
otherwise to be or become contingently liable under or with respect to, the
Indebtedness, other obligations, net worth, working capital or earnings of any
Person, or a guarantee of the payment of dividends or other distributions upon
the stock or equity interests of any Person, or an agreement to purchase, sell
or lease (as lessee or lessor) property, products, materials, supplies or
services primarily for the purpose of enabling a debtor to make payment of such
debtor's obligations or an agreement to assure a creditor against loss, and
including, without limitation, causing a bank or other financial institution to
issue a letter of credit or other similar instrument for the benefit of another
Person, but excluding endorsements for collection or deposit in the ordinary
course of business. The terms "Guarantee" and "Guaranteed" used as a verb shall
have a correlative meaning. The amount of any Guarantee shall be deemed to be an
amount equal to the stated or determinable amount of the primary obligations in
respect of which such Guarantee is made or, if not stated or determinable, the
maximum reasonably anticipated liability in respect thereof (assuming such
Person is required to perform thereunder).

SECURED PROMISSORY NOTE--PAGE 12 0F 14
<PAGE>
                  "Indebtedness" means for any Person: (a) obligations created,
issued or incurred by such Person for borrowed money (whether by loan, advance,
the issuance and sale of debt securities or the sale of Property to another
Person subject to an understanding or agreement, contingent or otherwise, to
repurchase such Property from such Person); (b) obligations of such Person to
pay the deferred purchase or acquisition price of Property or services, other
than trade accounts payable (other than for borrowed money) arising, and accrued
expenses incurred and paid, in the ordinary course of business; (c) Capital
Lease Obligations of such Person and synthetic leases of such Person; (d)
obligations of such Person in respect of letters of credit or similar
instruments issued or accepted by banks and other financial institutions for the
account of such Person; (e) Indebtedness of others secured by a Lien on the
Property of such Person, whether or not the respective indebtedness so secured
has been assumed by such Person; (f) Indebtedness of others Guaranteed by such
Person; and (g) all hedging obligations. The Indebtedness of any Person shall
include the Indebtedness of any other entity (including any partnership in which
such Person is a general partner) to the extent such Person is liable therefor
as a result of such Person's ownership interest in or other relationship with
such entity, except to the extent the terms of such Indebtedness provide that
such Person is not liable therefor.

                  "Lien" means, with respect to any asset, (a) any mortgage,
deed of trust, lien, pledge, hypothecation, encumbrance, charge or security
interest in, on or of such asset, (b) the interest of a vendor or a lessor under
any conditional sale agreement, capital lease or title retention agreement (or
any financing lease having substantially the same economic effect as any of the
foregoing), other than an operating lease, relating to such asset and (c) in the
case of securities, any purchase option, call or similar right of a third party
with respect to such securities.

                  "Mandatory Prepayment Event" shall mean:

                  (a) the consummation of (i) any acquisition of Easton by means
of merger or other form of corporate reorganization in which the outstanding
shares of Easton are exchanged for securities or other consideration issued, or
caused to be issued, by the acquiring corporation or its subsidiary (other than
a mere reincorporation transaction), under circumstances in which the holders of
a majority in voting power of the outstanding capital stock of Easton
immediately prior to the transaction own less than a majority in voting power of
the outstanding capital stock of Easton or the surviving or resulting
corporation or acquired, as the case may be, immediately following such
transaction (a "Change in Control"), (ii) a sale of all or substantially all of
the assets of Easton, (iii) any other transaction which results in such a Change
in Control of Easton, or (iv) any series of transactions resulting in the
foregoing, or

                  (b) approval by Maker of a complete liquidation or dissolution
of Easton, or

                  (c) a change in the composition of the Board of Directors of
Maker so that Craig Bush (or his designee), Robert Dixon and William G. Knuff,
III fail to constitute a majority of the members of the Board; provided, that,
if Craig Bush approves such change, such change shall not constitute a Mandatory
Prepayment Event.

                  "Material Adverse Effect" shall mean a material adverse effect
on (i) the business, assets, properties condition (financial or otherwise) or
business prospects of Maker or Easton, as applicable, (ii) the ability of Maker
or Easton, as applicable, to pay or perform its obligations under this Note and
the other Financing Documents, (iii) the rights of or benefits available to the
Holder under this Note or any of the other Financing Documents.

SECURED PROMISSORY NOTE--PAGE 13 0F 14
<PAGE>
                  "Person" shall mean any individual, corporation, partnership,
limited liability company, trust, unincorporated association, business, or other
legal entity, and any government or any governmental agency or political
subdivision thereof.

                  "Property" means any interest of any kind in property or
assets, whether real, personal or mixed, and whether tangible or intangible.

                  "Senior Loan Documents" means all documents between Gaines and
the Maker and SOF-2 and the Maker which are entered into from time to time in
respect of the Indebtedness of the Maker to Gaines or SOF-2, as the case may be,
including, without limitation, any amendment, replacement or refinancing thereof
approved by Holder to the extent required in the Intercreditor Agreement or to
the extent of any increases the amount of debt, extends the term or otherwise
could adversely impact on Holder's rights or recovery under this Note.

                  "SOF-2" means Sutter Opportunity Fund 2, LLC, a California
limited liability company.

                  "Taxes" means any and all present or future taxes, levies,
imposts, duties, deductions, charges or withholdings imposed by any Governmental
Authority, including without limitation, stamp or documentary taxes or other
excise or property taxes, charges or levies.

         B. Accounting Terms. All accounting terms not specifically defined
herein shall be construed in accordance with GAAP, and all financial data
submitted pursuant to this Note shall be prepared and calculated in accordance
with GAAP.

SECURED PROMISSORY NOTE--PAGE 13 0F 14

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