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Exhibit 10.1    
    

Conformed Copy  

************************************************************ 

VTR
GLOBALCOM S.A. 

and

SUBSIDIARY
GUARANTORS 

AMENDED
AND RESTATED CREDIT AGREEMENT 

Dated
as of April 29, 2003 

BANKBOSTON
N.A.,

CITIBANK, N.A.,

and

JPMORGAN CHASE BANK

as Arrangers, 

and

TD
SECURITIES (USA) INC.,

as Lead Arranger 

************************************************************ 

  

 
 

Table of Contents    
    

        This Table of Contents is not part of the Agreement to which it is attached but is inserted for convenience of reference only. 

	 
	 	 
	 	Page

	SECTION 1.	 	DEFINITIONS AND ACCOUNTING MATTERS	 	1
	 	1.01	 	Certain Defined Terms	 	1
	 	1.02	 	Accounting Terms and Determinations	 	14
	SECTION 2.	 	LOANS, NOTES AND PREPAYMENTS	 	14
	 	2.01	 	Outstanding Loans	 	14
	 	2.02	 	Fees	 	15
	 	2.03	 	Lending Offices	 	15
	 	2.04	 	Remedies Independent	 	15
	 	2.05	 	Notes	 	15
	 	2.06	 	Optional Prepayments	 	15
	 	2.07	 	Mandatory Prepayments	 	15
	SECTION 3.	 	PAYMENTS OF PRINCIPAL AND INTEREST	 	16
	 	3.01	 	Repayment of Loans	 	16
	 	3.02	 	Interest	 	16
	SECTION 4.	 	PAYMENTS; PRO RATA TREATMENT; COMPUTATIONS; ETC	 	17
	 	4.01	 	Payments	 	17
	 	4.02	 	Pro Rata Treatment	 	17
	 	4.03	 	Computations	 	17
	 	4.04	 	Minimum Amounts	 	17
	 	4.05	 	Certain Notices	 	18
	 	4.06	 	Non-Receipt of Funds by the Administrative Agent	 	18
	 	4.07	 	Sharing of Payments, Etc	 	18
	SECTION 5.	 	YIELD PROTECTION, ETC	 	19
	 	5.01	 	Additional Costs	 	19
	 	5.02	 	Alternative Interest Rate	 	21
	 	5.03	 	Illegality	 	22
	 	5.04	 	Chilean Taxes	 	22
	 	5.05	 	Compensation	 	23
	SECTION 6.	 	GUARANTEE	 	23
	 	6.01	 	The Guarantee	 	23
	 	6.02	 	Obligations Unconditional	 	23
	 	6.03	 	Reinstatement	 	24
	 	6.04	 	Subrogation	 	25
	 	6.05	 	Remedies	 	25
	 	6.06	 	Continuing Guarantee	 	25
	 	6.07	 	Rights of Contribution	 	25
	 	6.08	 	General Limitation on Guarantee Obligations	 	26
	SECTION 7.	 	CONDITIONS PRECEDENT AND CONDITION SUBSEQUENT	 	26
	 	7.01	 	Conditions Precedent to Effectiveness of this Agreement	 	26
	 	7.02	 	Condition Subsequent	 	29
	SECTION 8.	 	REPRESENTATIONS AND WARRANTIES	 	29
	 	8.01	 	Corporate Existence	 	29
	 	8.02	 	Financial Condition	 	29
	 	8.03	 	Litigation	 	29
	 	8.04	 	No Breach	 	30
	 	 	 	 	 

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	 	8.05	 	Action	 	30
	 	8.06	 	Approvals	 	30
	 	8.07	 	Legal Form	 	30
	 	8.08	 	Ranking	 	30
	 	8.09	 	Taxes	 	31
	 	8.10	 	Commercial Activity; Absence of Immunity	 	31
	 	8.11	 	Material Agreements and Liens	 	31
	 	8.12	 	Environmental Matters	 	31
	 	8.13	 	Capitalization	 	31
	 	8.14	 	Subsidiaries, Etc	 	32
	 	8.15	 	Properties and Assets	 	32
	 	8.16	 	True and Complete Disclosure	 	32
	 	8.17	 	Investment Holding Company Act	 	33
	 	8.18	 	Use of Credit	 	33
	 	8.19	 	Solvency	 	33
	 	8.20	 	Ownership of Collateral	 	33
	 	8.21	 	Liens, etc	 	33
	SECTION 9.	 	COVENANTS OF THE OBLIGORS	 	33
	 	9.01	 	Financial Statements, Etc	 	33
	 	9.02	 	Litigation	 	35
	 	9.03	 	Existence, Etc	 	35
	 	9.04	 	Insurance	 	36
	 	9.05	 	Prohibition of Fundamental Changes	 	36
	 	9.06	 	Limitation on Liens	 	37
	 	9.07	 	Indebtedness	 	37
	 	9.08	 	Investments	 	38
	 	9.09	 	Restricted Payments	 	38
	 	9.10	 	Capital Expenditures	 	39
	 	9.11	 	Total Debt to EBITDA Ratio	 	39
	 	9.12	 	CADS to Adjusted Debt Service Ratio	 	39
	 	9.13	 	Interest Coverage Ratio	 	40
	 	9.14	 	Governmental Approvals	 	40
	 	9.15	 	Hedge Agreements	 	40
	 	9.16	 	Lines of Business	 	40
	 	9.17	 	Transactions with Affiliates	 	40
	 	9.18	 	Certain Obligations in Respect of Subsidiaries	 	41
	 	9.19	 	Insurance	 	41
	 	9.20	 	Post-Closing Collateral Matters	 	41
	 	9.21	 	Qualified Local Financing	 	43
	 	9.22	 	Limitation on Amendments to QLF Documentation	 	45
	SECTION 10.	 	EVENTS OF DEFAULT	 	45
	SECTION 11.	 	THE ADMINISTRATIVE AGENT	 	48
	 	11.01	 	Appointment, Powers and Immunities	 	48
	 	11.02	 	Reliance by Administrative Agent	 	49
	 	11.03	 	Defaults	 	49
	 	11.04	 	Rights as a Lender	 	49
	 	11.05	 	Indemnification	 	50
	 	11.06	 	Non-Reliance on Administrative Agent and Other Lenders	 	50
	 	11.07	 	Failure to Act	 	50
	 	11.08	 	Resignation or Removal of Administrative Agent	 	50
	 	 	 	 	 

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	 	11.09	 	Consents under Other Basic Documents	 	51
	SECTION 12.	 	MISCELLANEOUS	 	51
	 	12.01	 	Waiver	 	51
	 	12.02	 	Notices	 	51
	 	12.03	 	Expenses	 	51
	 	12.04	 	Indemnification	 	52
	 	12.05	 	Amendments, Etc	 	52
	 	12.06	 	Successors and Assigns	 	52
	 	12.07	 	Assignments and Participations	 	52
	 	12.08	 	Survival	 	54
	 	12.09	 	Captions; Integration	 	55
	 	12.10	 	Counterparts	 	55
	 	12.11	 	Judgment Currency	 	55
	 	12.12	 	Governing Law	 	55
	 	12.13	 	Jurisdiction; Service of Process; Venue	 	55
	 	12.14	 	No Immunity	 	56
	 	12.15	 	Waiver of Jury Trial	 	56
	 	12.16	 	Use of English Language	 	57
	 	12.17	 	Confidentiality	 	57
	

SCHEDULE I	
 	

— Material Agreements and Liens	
 	

 
	SCHEDULE II	 	— Subsidiaries and Investments	 	 
	SCHEDULE III	 	— Material Litigation	 	 
	SCHEDULE IV	 	— Properties and Assets	 	 
	SCHEDULE V	 	— Equity Rights	 	 
	

EXHIBIT A	
 	

— Existing Security Documents	
 	

 
	

EXHIBIT B-1	
 	

— Form of Opinion of Chilean Counsel to the Obligors	
 	

 
	EXHIBIT B-2	 	— Form of Opinion of New York Counsel to the Administrative Agent	 	 
	EXHIBIT B-3	 	— Form of Opinion of Chilean Counsel to the Administrative Agent	 	 
	EXHIBIT B-4	 	— Form of Opinion of Cayman Islands Counsel to the Obligors	 	 
	

EXHIBIT C	
 	

— Form of Compliance Certificate	
 	

 
	

EXHIBIT D	
 	

— Form of UGC Comfort Letter	
 	

 

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        AMENDED AND RESTATED CREDIT AGREEMENT dated as of April 29, 2003 among: 

        (a)   VTR
GLOBALCOM S.A., a corporation duly organized and validly existing under the laws of the Republic of Chile (the
"Company"); 

        (b)   the
subsidiaries of the Company listed on the signature pages hereto (the "Subsidiary Guarantors" and, collectively with
the Company, the "Obligors"); 

        (c)   each
of the lenders listed on the signature pages hereto or that, pursuant to Section 12.07(b) hereof, shall become a "Lender" hereunder (individually, a
"Lender" and, collectively, the "Lenders"); and 

        (d)   TORONTO
DOMINION (TEXAS), INC., as administrative agent for the Lenders (in such capacity, together with its successors in such capacity, the
"Administrative Agent"). 

        The
Administrative Agent, the Company, the Lenders and the Subsidiary Guarantors are parties to a Credit Agreement, dated as of April 29, 1999 (as amended pursuant to an Amendment
No. 1, dated as of July 29, 1999, an Amendment No. 2, dated as of August 27, 1999, an Amendment No. 3, dated as of October 6, 1999, an Amendment No. 4,
dated as of October 22, 1999, an Amendment No. 5, dated as of June 29, 2000, an Amendment No. 6, dated as of April 29, 2001, an Amendment No. 7, dated as of
April 29, 2002, an Extension Agreement, dated as of April 29, 2003 and as otherwise amended and modified prior to the date hereof, the "Original Credit
Agreement"). The parties to the Original Credit Agreement wish to amend and restate the terms thereof and, accordingly, the parties agree that, effective as of the Closing
Date, the Original Credit Agreement shall be amended and restated in its entirety to read as follows: 

        Section 1.    Definitions and Accounting Matters.    

        1.01    Certain Defined Terms.    As used herein, the following terms shall have the following meanings (all terms
defined in this Section 1.01 or in other provisions of this Agreement in the singular to have the same meanings when used in the plural and vice versa): 

        "Acceptable Terms" shall mean a Qualified Local Financing that: 

        (a)   the
Administrative Agent, acting with the consent of the Required Lenders, shall have notified the Company that the Administrative Agent and the Required Lenders have
determined, in their reasonable judgment, has terms and conditions consistent with similar financing in the Chilean bank markets or the Chilean bond markets (as the case may be) for similarly situated
companies with a Debt Rating of 'A-', 

        (b)   has
an interest rate such that the amount of interest payable on the first interest payment date of such Qualified Local Financing (if the principal amount thereof were
denominated in Dollars and if such amount of interest were payable in Dollars, in each case calculated at such exchange rate as the Administrative Agent may reasonably select), would be an amount less
than or equal to the amount of interest that would have accrued on such Qualified Local Financing during the period ending on such first interest payment date if the interest rate thereon was equal to
the three-month London inter-bank offered rate plus 600 basis points, 

        (c)   does
not require a guaranty, security interest grant (other than a stock pledge from the Stock Pledgors) or other credit support from any direct or indirect shareholder
of the Company, 

        (d)   provides
for binding commitments in an amount not less than the applicable amount required by Section 9.21(f) hereof (or if the Majority Lenders have consented
pursuant to Section 9.21(c)(iii) and Section 9.21(c)(vii)(x) hereof to a lesser amount, such lesser amount), and 

 

        (e)   does
not require or contemplate the issuance or granting of any equity or ownership interests in the Company, or rights (contingent or other) to purchase or otherwise
acquire any equity or ownership rights in the Company. 

        "Accepted QLF" shall have the meaning assigned to such term in Section 9.21(c)(vi) hereof. 

        "Adjusted Debt Service" shall mean, for any period, the sum of the following: 

        (a)   all
scheduled payments of principal of Indebtedness (including, without limitation, the principal component of any payments in respect of Capital Lease Obligations) made
during such period and all interest in respect of Indebtedness paid during such period, plus

        (b)   the
aggregate amount of fees paid to the Lenders pursuant to Section 2.02 hereof during such period, minus

        (c)   the
aggregate amount of Equity Contributions made during such period, but only to the extent such Equity Contributions are used to repay outstanding Indebtedness during
such period. 

        "Additional Costs" shall have the meaning assigned to such term in Section 5.01(a) hereof. 

        "Administrative Agent" shall have the meaning assigned to such term in the preamble. 

        "Administrative Agent's Account" shall mean account no. 6550-6-53000 (for the account of Toronto Dominion
(Texas), Inc., reference: VTR GlobalCom S.A.) of the Administrative Agent maintained at Bank of America, N.A. (ABA No. 026009593), or such other account at such other bank in New York
City as the Administrative Agent shall specify from time to time to the Company and the Lenders. 

        "Advance Date" shall have the meaning assigned to such term in Section 4.06 hereof. 

        "Affiliate" shall mean any Person (other than any Wholly Owned Subsidiary of the Company) that directly or indirectly controls, or is
under common control with, or is controlled by, the Company and, if such Person is an individual, any member of the immediate family (including parents, spouse, children and siblings) of such
individual and any trust whose principal beneficiary is such individual or one or more members of such immediate family and any Person who is controlled by any such member or trust. As used in this
definition, "control" (including, with its correlative meanings, "controlled by" and
"under common control with") shall mean possession, directly or indirectly, of power to direct or cause the direction of management or policies (whether
through ownership of securities or partnership or other ownership interests, by contract or otherwise). 

        "Agreement to Grant a Pledge Without Conveyance" shall mean an Agreement to Grant a Pledge Without Conveyance described on
Exhibit A hereto. 

        "Applicable Fee Percentage" shall mean: 

        (a)   on
the first Closing Date Anniversary, 1/4 of 1.0%; and 

        (b)   on
each Closing Date Anniversary thereafter, the Applicable Fee Percentage for the immediately preceding Closing Date Anniversary,  plus 1/4 of 1.0%. 

        "Applicable Margin" shall mean 5.50% per annum; provided that the "Applicable Margin" is
subject to increase as provided in Section 9.21(e) hereof. 

        "Application Date" shall mean, with respect to any Net Disposition Proceeds, Net Equity Proceeds or Net Debt Proceeds, the earlier of
(x) the date the Company is permitted by the Central Bank of Chile or the regulations thereof to effect mandatory prepayments pursuant to paragraph (b), (c) or (d), respectively, of
Section 2.07 hereof and (y) ten Business Days after 

2

 

receipt
by the Company or any of its Subsidiaries of such Net Disposition Proceeds, Net Equity Proceeds or Net Debt Proceeds, respectively. 

        "Basic Documents" shall mean, collectively, this Agreement, the Notes and the Security Documents. 

        "Basle Accord" shall have the meaning assigned to such term in Section 5.01(b) hereof. 

        "Business Day" shall mean (a) any day on which commercial banks are not authorized or required to close in New York City or
Santiago, Chile and (b) if such day relates to a payment or prepayment of principal of or interest on, or an Interest Period for, a Loan or a notice by the Company with respect to any such
payment or prepayment, any day on which dealings in Dollar deposits are carried out in the London interbank market. 

        "Cable Operations" shall have the meaning assigned to such term in Section 9.01(a)(y) hereof. 

        "CADS" shall mean, for any period, the sum of the following: 

        (a)   EBITDA
for such period, plus 

        (b)   any
decrease (or minus any increase) in Working Capital during such period, minus

        (c)   cash
Taxes paid, minus

        (d)   the
aggregate amount of Capital Expenditures made during such period, plus

        (e)   the
following: 

        (i)    for
each such period ended prior to December 31, 2004, the aggregate amount of cash and cash equivalents held by the Company (as set forth on the Company's cash
flow statement for such period furnished pursuant to Section 9.01 hereof) as at the first day of such period, and 

        (ii)   for
each such period ended on or after December 31, 2004, the aggregate amount of cash (as set forth on the Company's balance sheet for such date furnished
pursuant to Section 9.01 hereof) as at the first day of such period, up to a maximum amount equal to U.S.$5,000,000, plus

        (f)    the
aggregate amount of Equity Contributions made during such period to the extent used to finance Capital Expenditures made during such period, to the extent permitted
by Section 9.10 hereof. 

        "CADS to Adjusted Debt Service Ratio" shall mean, as at any date, the ratio of the following: 

        (a)   CADS
for the period of four consecutive fiscal quarters ended on, or most recently ended prior to, such date, to

        (b)   Adjusted
Debt Service for such period. 

        "Cable Subscribers" shall mean subscribers to the multi-channel television services (including wireline, wireless and DBS television
services) provided by the Obligors. 

        "Capital Expenditures" shall mean, for any period, expenditures made by the Company or any of its Subsidiaries to acquire or construct
fixed assets, plant and equipment (including renewals, improvements and replacements, but excluding repairs) during such period computed in accordance with GAAP. 

        "Capital Lease Obligations" shall mean, for any Person, all obligations of such Person to pay rent or other amounts under a lease of (or
other agreement conveying the right to use) Property to the extent such obligations are required to be classified and accounted for as a capital lease on 

3

 

a
balance sheet of such Person under GAAP, and, for purposes of this Agreement, the amount of such obligations shall be the capitalized amount thereof, determined in accordance with GAAP. 

        "Chile" shall mean the Republic of Chile. 

        "Chilean Rating Agency" shall mean a Chilean rating agency (that is an affiliate of either Standard & Poor's Rating Services,
Moody's Investors Services, Inc. or Duff & Phelps Credit Rating Co.). 

        "Chilean Taxes" shall mean all present and future income, stamp, registration and other taxes and levies, imposts, deductions, charges,
compulsory loans and withholdings whatsoever, and all interest, penalties or similar amounts with respect thereto, now or hereafter imposed, assessed, levied or collected by (a) Chile or any
political subdivision or taxing authority thereof or therein, or by any federation or association of or with which Chile may be a member or associated, on or in respect of this Agreement, the Loans,
the Notes, the other Basic Documents, the recording, registration, notarization or other formalization of any thereof, the enforcement thereof or the introduction thereof in any judicial proceedings,
or on or in respect of any payments of principal, interest, premiums, charges, fees or other amounts made on, under or in respect of any thereof, or (b) any other jurisdiction from or through
which payments to or for account of any Lenders hereunder are made as a result or consequence of such payments (excluding, however, income or franchise taxes imposed on a Lender by a jurisdiction as a
result of such Lender being organized under the laws of such jurisdiction or of its Lending Office being located in such jurisdiction). 

        "Closing Date" shall mean the date on which the conditions precedent set forth in Section 7.01 hereof shall have been satisfied. 

        "Closing Date Anniversary" shall mean each anniversary of the Closing Date on which any Loans are outstanding or any other amounts are
payable by the Company hereunder. 

        "Closing Date Balance" shall mean the aggregate principal amount of the Loans outstanding under this Agreement on the Closing Date, after
giving effect to the prepayment by the Company of the Loans under the Original Credit Agreement pursuant to Section 7.01(a)(i) hereof. 

        "Collateral" shall mean all of the Property of the Obligors covered by the Security Documents. 

        "Commencement Date" shall mean each QLF Rating Date and each anniversary of any QLF Rating Date (but only if the Debt Rating on such
anniversary continues to be 'A-' or better), 

        "Commitment" shall have the meaning assigned to such term in Section 9.21(c)(v) hereof. 

        "Company" is defined in the preamble. 

        "Conditional Assignment" shall mean a Conditional Assignment described on Exhibit A hereto. 

        "Debt Rating" shall have the meaning assigned to such term in Section 9.21(a) hereof. 

        "Default" shall mean an Event of Default or an event that with notice or lapse of time or both would become an Event of Default. 

        "Default Interest Period" shall mean, during any period while any principal of a Loan, interest thereon or any other amount owing
hereunder is in default, each successive period as the Administrative Agent shall from time to time (with the consent of the Majority Lenders) choose;  provided that (a) no such period shall exceed
three months, (b) the first such period shall commence as of the date on which such
principal, interest or other amount became due and each succeeding such period shall commence upon the expiry of the immediately preceding such period, and (c) in the absence of or pending such
consent from the Majority Lenders, each Default Interest Period shall have a duration of one week. 

4

 

        "Disposition" shall mean any disposition of any Property of the Company or any of its Subsidiaries made after the date hereof, other than
the following: 

        (a)   a
disposition made in the ordinary course of business, and 

        (b)   a
disposition made pursuant to Section 9.05(d)(ii) hereof. 

        "Dividend Payment" shall mean dividends (in cash, Property or obligations) on, or other payments or distributions on account of, or the
setting apart of money for a sinking or other analogous fund for, or the purchase, redemption, retirement or other acquisition of, any shares of any class of stock of the Company or of any warrants,
options or other rights to acquire the same, but excluding dividends payable solely in shares of common stock of the Company. 

        "Dollars" and "U.S.$" shall mean lawful money of the United States of America. 

        "EBITDA" shall mean, for any period, the sum, for the Company and its Subsidiaries (determined on a consolidated basis, without
duplication, in accordance with GAAP), of the following: 

        (a)   net
operating income for such period (calculated before income taxes, Interest Expense, extraordinary and unusual items and income or loss attributable to equity in
Affiliates), plus

        (b)   depreciation
and amortization (to the extent deducted in determining net operating income) for such period, plus

        (c)   the
portion of management and other similar fees accrued to be paid, but unpaid, in respect of the Management Agreements (to the extent deducted in determining net
operating income) for such period. 

        "Eligible Assignee" shall mean, at any time, (a) a Lender, (b) an affiliate of a Lender, (c) a Person that is a bank,
or a qualified financial institution for the purpose of Article 59 No 1 of the income tax law of Chile or (d) any other Person approved by the Company and the
Administrative Agent (which approval shall not be unreasonably withheld or delayed). 

        "Entitled Person" shall have the meaning assigned to such term in Section 12.11 hereof. 

        "Environmental Claim" shall mean, with respect to any Person, any written or oral notice, claim, demand or other communication
(collectively, a "claim") by any other Person alleging or asserting such Person's liability for investigatory costs, cleanup costs, governmental
response costs, damages to natural resources or other Property, personal injuries, fines or penalties arising out of, based on or resulting from (a) the presence, or Release into the
environment, of any Hazardous Material at any location, whether or not owned by such Person, or (b) circumstances forming the basis of any violation, or alleged violation, by such Person of any
Environmental Law. 

        "Environmental Laws" shall mean any and all present and future Chilean laws, rules or regulations, and any orders or decrees, in each case
as now or hereafter in effect, relating to the regulation or protection of the environment or human health or to emissions, discharges, releases or threatened releases of pollutants, contaminants,
chemicals or toxic or hazardous substances or wastes into the indoor or outdoor environment. 

        "Equity Contribution" shall mean a cash contribution made by UGC or one of its Affiliates (other than any Obligor) to the common equity
capital of the Company. 

        "Equity Rights" shall mean, with respect to any Person, any subscriptions, options, warrants, commitments, preemptive rights or agreements
of any kind (including, without limitation, any stockholders' agreements) for the issuance, sale, registration or voting of, or securities convertible 

5

 

into,
any additional shares of capital stock of any class, or partnership or other ownership interests of any type in, such Person. 

        "Eurodollar Rate" shall mean, with respect to any Loan for any Interest Period or Default Interest Period therefor, the rate per annum
(rounded upwards, if necessary, to the nearest 1/16 of 1%) reported, at approximately 11:00 a.m. London time (or as soon thereafter as practicable) on the date two Business Days
prior to the first day of such Interest Period or Default Interest Period, on Telerate Access Service Page 3750 (British Bankers Association Settlement Rate) as the London interbank offered
rate for Dollar deposits having a term comparable to the duration of such Interest Period and in an amount equal to or greater than U.S.$1,000,000. 

        "Event of Default" shall have the meaning assigned to such term in Section 10 hereof. 

        "Excess Cash Flow" shall mean, for any fiscal year, the sum of the following for the Company and its Subsidiaries (determined on a
consolidated basis, without duplication, in accordance with GAAP): 

        (a)   EBITDA
for such period, minus

        (b)   extraordinary
cash losses for such period, plus

        (c)   extraordinary
cash gains for such period, minus

        (d)   Capital
Expenditures made during such period to the extent permitted by Section 9.10 hereof, minus

        (e)   all
scheduled payments of principal of Indebtedness of the Company (including, without limitation, the principal component of any payments in respect of Capital Lease
Obligations) made during such period and all interest in respect of Indebtedness of the Company paid during such period, minus

        (f)    corporate
taxes actually paid by the Company or any of its Subsidiaries during such period, plus

        (g)   the
amount of the net decrease in Working Capital (or minus the net increase in Working Capital) of the Company and its
Subsidiaries for such period. 

        "Excess Funding Subsidiary Guarantor" shall have the meaning assigned to such term in Section 6.07 hereof. 

        "Excess Payment" shall have the meaning assigned to such term in Section 6.07 hereof. 

        "Federal Funds Rate" shall mean, for any day, the rate per annum (rounded upwards, if necessary, to the nearest 1/100 of
1%) equal to the weighted average of the rates on overnight Federal funds transactions with members of the Federal Reserve System arranged by Federal funds brokers on such day, as published by the
Federal Reserve Bank of New York on the Business Day next succeeding such day, provided that (a) if the day for which such rate is to be
determined is not a Business Day, the Federal Funds Rate for such day shall be such rate on such transactions on the next preceding Business Day as so published on the next succeeding Business Day and
(b) if such rate is not so published for any Business Day, the Federal Funds Rate for such Business Day shall be the average rate charged on such Business Day on such transactions as determined
by the Administrative Agent. 

        "First Request Date" shall have the meaning assigned to such term in Section 9.21(b) hereof. 

        "GAAP" shall mean generally accepted accounting principles in Chile as in effect from time to time as set forth in Section 1.02(a)
hereof. 

6

 

        "Guarantee" shall mean a guarantee, 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. 

        "Guaranteed Obligations" shall have the meaning assigned to such term in Section 6.01 hereof. 

        "Hazardous Material" shall mean, collectively, (a) any petroleum or petroleum products, flammable explosives, radioactive
materials, asbestos in any form that is or could become friable, urea formaldehyde foam insulation and transformers or other equipment that contain dielectric fluid containing polychlorinated
biphenyls, (b) any chemicals or other materials or substances which are now or hereafter become defined as or included in the definition of "hazardous substances", "hazardous wastes",
"hazardous materials", "extremely hazardous wastes", "restricted hazardous wastes", "toxic substances", "toxic pollutants", "contaminants", "pollutants" or words of similar import under any
Environmental Law and (c) any other chemical or other material or substance, exposure to which is now or hereafter prohibited, limited or regulated under any Environmental Law. 

        "Hedge Agreement" shall mean, for any Person, an interest rate swap, cap or collar agreement, currency swap agreement, currency hedge
agreement or similar arrangement between such Person and one or more financial institutions providing for the transfer or mitigation of interest risks or currency risks either generally or under
specific contingencies. 

        "Indebtedness" shall mean, for any Person: (a) obligations created, issued or incurred by such Person for borrowed money (whether
by loan, 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
other 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, in the ordinary course of business so long as such trade accounts payable are payable within 90 days of the date the respective goods are delivered or
the respective services are rendered); (c) 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; (d) obligations of such Person in respect of letters of credit or similar instruments issued or accepted by banks and other financial institutions for account of such Person;
(e) Capital Lease Obligations of such Person; and (f) Indebtedness of others Guaranteed by such Person. "Indebtedness" shall not include obligations in respect of Hedge Agreements. 

        "Interest Coverage Ratio" shall mean, as at any date, the ratio of the following: 

        (a)   EBITDA
for the fiscal quarter ending on, or most recently ended prior to, such date, divided by

        (b)   Interest
Expense for such fiscal quarter. 

        "Interest Expense" shall mean, for any period, the sum, for the Company and its Subsidiaries (determined on a consolidated basis, without
duplication, in accordance with GAAP) of the following: (a) all interest in respect of Indebtedness accrued or capitalized during such period 

7

 

(whether
or not actually paid during such period), plus (b) the net amounts payable (or minus the
net amounts receivable) under Hedge Agreements (to the extent hedging interest rate risks) accrued during such period (whether or not actually paid or received during such period). 

        "Interest Period" shall mean, with respect to any Loan, each period commencing on the date such Loan was made or the last day of the next
preceding Interest Period for such Loan and ending on the numerically corresponding day in the first or third calendar month thereafter (as selected by the Company by notice to the Administrative
Agent at least three Business Days prior to the first day of such Interest Period (and (x) if the Company fails to so provide such notice, the third calendar month thereafter, and
(y) the Company shall make such selection so that no Interest Period shall commence before and end after a Principal Payment Date unless the aggregate principal amount of Loans that have
Interest Periods that end after such Principal Payment Date shall be equal to or less than the aggregate principal amount of Loans scheduled to be outstanding after giving effect to the payments of
principal of the Loans required to be made on such Principal Payment Date)), except that each Interest Period that commences on the last Business Day of a calendar month (or on any day for which there
is no numerically corresponding day in the appropriate subsequent calendar month) shall end on the last
Business Day of the appropriate subsequent calendar month. Notwithstanding the foregoing, each Interest Period that would otherwise end on a day that is not a Business Day shall end on the next
succeeding Business Day (or, if such next succeeding Business Day falls in the next succeeding calendar month, on the next preceding Business Day). 

        "Internet Operations" shall have the meaning assigned to such term in Section 9.01(a)(y) hereof. 

        "Internet Subscribers" shall mean subscribers to the internet services provided by the Obligors. 

        "Investment" shall mean, for any Person: (a) the acquisition (whether for cash, Property, services or securities or otherwise) of
capital stock, bonds, notes, debentures, partnership or other ownership interests or other securities of any other Person or any agreement to make any such acquisition (unless such agreement is
conditioned on such acquisition being permitted under this Agreement), (including, without limitation, any "short sale" or any sale of any securities at a time when such securities are not owned by
the Person entering into such sale); (b) the making of any deposit with, or advance, loan or other extension of credit to, any other Person (including the purchase of Property from another
Person subject to an understanding or agreement, contingent or otherwise, to resell such Property to such other Person), but excluding any such advance, loan or extension of credit having a term not
exceeding 90 days representing the purchase price of inventory, services or supplies sold by such Person in the ordinary course of business); (c) the entering into any Guarantee of, or
other contingent obligation with respect to, Indebtedness or other liability of any other Person and (without duplication) any amount committed to be advanced, lent or extended to such other Person;
or (d) the entering into of any Hedge Agreement. 

        "Judgment Currency" shall have the meaning assigned to such term in Section 12.11 hereof. 

        "Leased Switch Property" shall have the meaning assigned to such term in Section 9.20(b)(i) hereof. 

        "Lender" shall have the meaning assigned to such term in the preamble. 

        "Lenders' Share" shall mean, for any date, a fraction where: 

        (a)   the
numerator is the aggregate outstanding principal amount of the Loans on such date, and 

8

 

        (b)   the
denominator is the sum of the aggregate outstanding principal amount of the Loans on such date plus the aggregate
outstanding principal amount of all QLFs on such date. 

        "Lending Office" shall mean, for each Lender, the "Lending Office" of such Lender (or of an affiliate of such Lender) designated on the
signature pages hereof or such other office of such Lender (or of an affiliate of such Lender) as such Lender may from time to time specify to the Administrative Agent and the Company as the office at
which its Loans are to be maintained. 

        "Lien" shall mean, with respect to any Property, any mortgage, lien, pledge, charge, security interest or encumbrance of any kind in
respect of such Property. For purposes of this Agreement and the other Basic Documents, a Person shall be deemed to own subject to a Lien any Property that it has acquired or holds subject to the
interest of a vendor or lessor under any conditional sale agreement, capital lease or other title retention agreement (other than an operating lease) relating to such Property. 

        "Loans" shall have the meaning assigned to such term in Section 2.01 hereof. 

        "Majority Lenders" shall mean Lenders holding at least 51% of the aggregate outstanding principal amount of the Loans. 

        "Management Agreements" shall mean (a) the Management Services Agreement, dated January 1, 2001, between the Company and
United Latin America Management, Inc. and (b) the Master Seconded Employee Services Agreement, dated January 1, 2001, between the Company and UnitedGlobalCom, Inc. 

        "Margin Stock" shall mean "margin stock" within the meaning of Regulations U and X. 

        "Market Change" shall mean either (i) the Company shall cease to have a Debt Rating of 'A-' or better, or (ii) a
change shall have occurred in the relevant financing markets in Chile such that (a) the relevant Accepted QLF cannot be consummated substantially on the terms and conditions described in the
Commitment therefor, and (b) such Accepted QLF, if consummated, would not constitute a Qualified Local Financing. 

        "Material Adverse Effect" shall mean a material adverse effect on (a) the Property, business, operations, financial condition,
liabilities or capitalization of the Obligors (taken as a whole), (b) the ability of the Obligors and the Stock Pledgors (taken as a whole) to perform their respective material obligations
under such of the Basic Documents to which they are parties, (c) the validity or enforceability of any of
the Basic Documents, (d) the rights and remedies of the Lenders and the Administrative Agent under any of the Basic Documents or (e) the timely payment of the principal of or interest on
the Loans or other amounts payable in connection therewith. 

        "Negotiation Period" shall have the meaning assigned to such term in Section 5.02(b)(i) hereof. 

        "Net Debt Proceeds" shall mean, with respect to any incurrence of Indebtedness by the Company or any of its Subsidiaries (including any
QLF), other than any Indebtedness incurred pursuant to Section 9.07(d) hereof or Section 9.07(f) hereof, the sum of: 

        (a)   the
gross cash proceeds received by the Company or any of its Subsidiaries from such incurrence (including any cash payments received by way of deferred payment of
principal pursuant to a permitted promissory note or installment receivable or otherwise, but only as and when received); minus

        (b)   all
(i) reasonable and customary fees and expenses actually paid by the Company or its Subsidiaries in connection therewith and (ii) underwriters'
discounts and commissions in connection therewith not payable to the Company, any of its Subsidiaries or any of their Affiliates. 

9

 

        "Net Disposition Proceeds" shall mean the sum of: 

        (a)   the
gross cash proceeds received by the Company or any of its Subsidiaries from any Disposition; minus

        (b)   (i) all
reasonable and customary legal, investment banking, brokerage, accounting, financial advisory, title, recording, and other fees and expenses actually
incurred by the Company and its Subsidiaries in connection with such Disposition, (ii) all taxes actually paid or estimated by the Company (in good faith) to be payable in cash in connection
with such Disposition; provided, however, that if, after the payment of all taxes with respect to such Disposition, the amount of estimated taxes, if
any, pursuant to clause (ii) above exceeded the amount of taxes actually paid in cash in respect of such Disposition, the aggregate amount of such excess shall be immediately payable, pursuant
to clause (b) of Section 2.07, as Net Disposition Proceeds, (iii) without duplication of the taxes referred to in clause (ii) above, the amount of income taxes payable
(assuming the taxpayer is subject to taxation at the highest applicable marginal rate and determined without regard to any other tax items of the Company or the taxpayer) by the taxpayers arising from
such Disposition (provided that a certificate is delivered to the Administrative Agent, satisfactory in form and substance to the Administrative Agent, by
PricewaterhouseCoopers LLC (or other independent public accountants of nationally recognized standing, with the prior written approval of the Administrative Agent) at the time of such
Disposition setting forth in detail the calculation of such amount, (iv) if permitted hereunder or otherwise by the Majority Lenders, the aggregate amount of any Indebtedness which is secured
by such asset and required to be repaid from such gross cash proceeds and (v) the amount of any reserve or escrow established in respect of any claims or liabilities of or payable by the
Company or its Subsidiaries in respect of such Disposition. 

        "Net Equity Proceeds" shall mean, in the case of the issuance, placement or sale of equity securities or other ownership interests
(whether pursuant to a public or private offering, but excluding (x) any issuance of securities or other ownership interests to employees of the Company or any of its Subsidiaries and
(y) any Equity Contribution) from and after the date hereof, the sum of: 

        (a)   the
gross cash proceeds received by the Company or any of its Subsidiaries from such issuance, placement or sale of equity securities or other ownership interests
(including any cash payments received by way of deferred payment of principal pursuant to a permitted promissory note or installment receivable or otherwise, but only as and when received);  minus

        (b)   all
(i) reasonable and customary legal, investment banking, brokerage, accounting, financial advisory, title, recording, and other fees and expenses actually paid
by the Company or its Subsidiaries in connection therewith and (ii) underwriters' discounts and commissions in connection therewith not payable to the Company, any of its Subsidiaries or any of
their Affiliates. 

        "Notes" shall mean the promissory notes described in Section 2.05 hereof. 

        "Obligors" shall have the meaning assigned to such term in the preamble. 

        "Original Credit Agreement" shall have the meaning assigned to such term in the preamble. 

        "Owned Switch Property" shall have the meaning assigned to such term in Section 9.20(b)(i) hereof. 

        "Participant" shall have the meaning assigned to such term in Section 12.07(c) hereof. 

10

  

        "Permitted Investments" shall mean: (a) direct obligations of the United States of America, or of any agency thereof, or
obligations guaranteed as to principal and interest by the United States of America, or of any agency thereof, in either case maturing not more than 90 days from the date of acquisition
thereof; (b) deposits maintained with any banking institution and certificates of deposit issued by any other bank or trust company organized under the laws of the United States of America or
any state thereof and having capital, surplus and undivided profits of at least U.S.$500,000,000, maturing not more than 90 days from the date of acquisition thereof; and (c) commercial
paper rated A1 or better or P1 by Standard & Poor's Corporation or Moody's Investors Services, Inc., respectively, maturing not more than 90 days from the date of acquisition
thereof. 

        "Person" shall mean any individual, corporation, company, voluntary association, partnership, joint venture, trust, unincorporated
organization or government (or any agency, instrumentality or political subdivision thereof). 

        "Pesos" shall mean the lawful money of Chile. 

        "Post-Default Rate" shall mean, in respect of any principal of any Loan, interest thereon or any other amount owing hereunder
that is not paid when due (whether at stated maturity, by acceleration, by optional or mandatory prepayment or otherwise), a rate per annum for each Default Interest Period equal to (a) 3%  plus
(b) the Applicable Margin plus (c) the Eurodollar Rate for such Default Interest
Period. 

        "Principal Payment Dates" shall mean the last Business Day of each March, June, September and December in each year, commencing with the
last Business Day of March 2004. 

        "Process Agent" shall have the meaning assigned to such term in Section 12.13(b) hereof. 

        "Property" shall mean any right or interest in or to property of any kind whatsoever, whether real, personal or mixed and whether tangible
or intangible. 

        "ProRata Share" shall have the meaning assigned to such term in Section 6.07(iii) hereof. 

        "QLF" shall mean any Qualified Local Financings entered into pursuant to Section 9.21 hereof. 

        "QLF Lenders" shall mean the holders from time to time of any QLF. 

        "QLF Rating Date" shall have the meaning assigned to that term in Section 9.21(b)(iii) hereof. 

        "Qualified Local Financing" shall mean Indebtedness of the Company that: 

        (a)   is
either secured on a pari passu and pro-rata basis with the Lenders hereunder or is unsecured, 

        (b)   has
covenants that do not materially impair the rights of the Administrative Agent or the Lenders hereunder or under any of the other Basic Documents and that are not
materially more restrictive than the covenants set forth in Section 9 hereof, provided that there may be an additional financial covenant testing
the ratio of the total liabilities of the Company to the equity of the Company, 

        (c)   has
a repayment schedule that is no more accelerated than the repayment schedule set forth in Section 3.01 hereof, 

        (d)   any
Net Debt Proceeds of which are used to prepay the Loans pursuant to Section 2.07(d) hereof, and 

        (e)   has
a maturity of no earlier than December 31, 2006. 

11

 

        "Regulations A, U and X" shall mean, respectively, Regulations A, U and X of the Board of Governors of the Federal Reserve System of the
United States of America (or any successor), as the same may be modified and supplemented and in effect from time to time. 

        "Regulatory Change" shall mean, with respect to any Lender (or any Lending Office or bank holding company of which such Lender is a
subsidiary), any change after the date of this Agreement in law or regulations or the adoption or making after such date of any interpretation, directive or request applying to a class of financial
institutions including such Lender (or such Lending Office or such bank holding company) of or under any law or regulations (whether or not having the force of law and whether or not failure to comply
therewith would be unlawful) by any court or governmental or monetary authority charged with the interpretation or administration thereof. 

        "Release" shall mean any release, spill, emission, leaking, pumping, injection, deposit, disposal, discharge, dispersal, leaching or
migration of Hazardous Materials into the indoor or outdoor environment, including, without limitation, the movement of Hazardous Materials through ambient air, soil, surface water, ground water,
wetlands, land or subsurface strata. 

        "Relevant Date" shall have the meaning assigned to such term in Section 9.21(d) hereof. 

        "Relevant Parties" shall mean the Company, any Subsidiary Guarantor and any Stock Pledgor. 

        "Required Lenders" shall mean Lenders holding at least 66?% of the aggregate outstanding principal amount of the Loans. 

        "Required Modifications" shall have the meaning assigned to such term in Section 9.21(c)(vii) hereof. 

        "Required Payment" shall have the meaning assigned to such term in Section 4.06 hereof. 

        "Security Documents" shall mean, collectively, each of the agreements described on Exhibit A hereto, together with any other
agreement, instrument or other document creating, governing, perfecting or evidencing a Lien securing obligations of Obligors hereunder that is entered into pursuant to any of the Security Documents
or this Agreement, as the same may be modified and supplemented and in effect from time to time. 

        "Stock Pledge Agreement" shall mean the Stock Pledge Agreements described on Exhibit A hereto. 

        "Stock Pledgors" shall mean each Person owning any capital stock of the Company, which, on the Closing Date, consists of United
Chile, Inc., a Colorado corporation, and United Chile Ventures, Inc., a Cayman Islands company. 

        "Subordinated Debt" shall mean the Indebtedness of the Company described on Schedule I hereto under the heading "Subordinated
Debt." 

        "Subsequent Request" shall have the meaning assigned to such term in Section 9.21(b)(ii) hereof. 

        "Subsidiary" shall mean, with respect to any Person, any corporation, partnership or other entity of which at least a majority of the
securities or other ownership interests having by the terms thereof ordinary voting power to elect a majority of the board of directors or other persons performing similar functions of such
corporation, partnership or other entity (irrespective of whether or not at the time securities or other ownership interests of any other class or classes of such corporation, partnership or other
entity shall have or might have voting power by reason of the happening of any contingency) is at the time directly or indirectly owned or controlled by such 

12

 

Person
or one or more Subsidiaries of such Person or by such Person and one or more Subsidiaries of such Person. 

        "Subsidiary Guarantors" shall have the meaning assigned to such term in the preamble. 

        "Substitute Basis" shall have the meaning assigned to such term in Section 5.02(b)(i) hereof. 

        "TD" shall mean Toronto Dominion (Texas), Inc. 

        "Telecommunications License" shall mean the licenses granted to the Company or any of its Subsidiaries by the Chilean Under Secretary of
Telecommunications (Subsecretaría de Telecomunicaciones) for the provision of telecommunications services. 

        "Telephony Operations" shall have the meaning assigned to such term in Section 9.01(a)(y) hereof. 

        "Telephony Subscribers" shall mean subscribers to telephony services provided by the Obligors. 

        "Total Debt to EBITDA Ratio" shall mean, as at any date, the ratio of the following: 

        (a)   the
aggregate amount of all Indebtedness of the Company and its Subsidiaries on such date to

        (b)   the
product of (x) EBITDA for the period of two fiscal quarters ending on, or most recently ended prior to, such date  times (y) two. 

        "UGC" shall mean UGC Holdings, Inc., a Delaware corporation, and its legal successors. 

        "VTR Larga Distancia Lease Agreements" shall mean: 

        (a)   the
lease agreement No 9609007, dated as of February 1, 1997, between VTR Telefónica S.A. and Comunicaciones Mundiales S.A., 

        (b)   the
lease agreement No 97003008, dated as of February 1, 1997, between VTR Telefónica S.A. and VTR Larga Distancia S.A., 

        (c)   the
agreement No 01071998 for the provision of telecommunication services, dated as of July 1, 1998, between VTR Cablexpress (Chile) S.A. and
VTR Larga Distancia S.A., and 

        (d)   the
agreement No 02071998 for the provision of telecommunication services, dated as of July 1, 1998, between VTR Cablexpress (Chile) S.A. and
VTR Larga Distancia S.A. 

        "Wholly Owned Subsidiary" shall mean, with respect to any Person, any corporation, partnership or other entity of which all of the equity
securities or other ownership interests are directly or indirectly owned or controlled by such Person or one or more Wholly Owned Subsidiaries of such Person or by such Person and one or more Wholly
Owned Subsidiaries of such Person. 

        "Working Capital" shall mean, at any time of determination, the sum of: 

        (a)   the
consolidated current assets of the Company and its Subsidiaries at such time (other than cash and cash equivalents held by the Company and its Subsidiaries, and
other than any assets arising under Hedge Agreements), minus

        (b)   the
consolidated current liabilities of the Company and its Subsidiaries at such time (other than the current portion of outstanding Loans, and other than liabilities
under Hedge Agreements). 

13

 

        1.02    Accounting Terms and Determinations.    

        (a)   Except
as otherwise expressly provided herein, all financial statements required to be delivered to the Administrative Agent or the Lenders hereunder shall be prepared
in accordance with generally accepted accounting principles in Chile, as in effect from time to time, subject to Section 1.02(b) below. Except as otherwise expressly provided herein, all
accounting terms used herein shall be interpreted, and all certificates and reports as to financial matters required to be delivered to the Administrative Agent or the Lenders hereunder shall (unless
otherwise disclosed to the Administrative Agent or the Lenders in writing at the time of delivery thereof in the manner described in subsection (b) below) be prepared, in accordance with
generally accepted accounting principles in Chile applied on a basis consistent with those used in the preparation of the latest financial statements furnished to the Lenders hereunder. All
calculations made for the purposes of determining compliance with this Agreement shall (except as otherwise expressly provided herein) be made by application of generally accepted accounting
principles in Chile applied on a basis consistent with those used in the preparation of the latest financial statements furnished to the Lenders hereunder unless (i) the Company shall have
objected to determining such compliance on such basis at the time of delivery of such financial statements or (ii) the Majority Lenders shall so object in writing within 30 days after
delivery of such financial statements, in either of which events such calculations shall be made on a basis consistent with those used in the preparation of the latest financial statements as to which
such objection shall not have been made (which, if objection is made in respect of the first financial statements delivered under Section 9.01 hereof, shall mean the financial statements
referred to in Section 8.02 hereof). 

        (b)   The
Company shall deliver to the Administrative Agent or the Lenders at the same time as the delivery of any annual or quarterly financial statement under
Section 9.01 hereof (i) a description in reasonable detail of any material variation between the application of accounting principles employed in the preparation of such statement and
the application of accounting principles employed in the preparation of the next preceding annual or quarterly financial statements as to which no objection has been made in accordance with the last
sentence of subsection (a) above and (ii) reasonable estimates of the difference between such statements arising as a consequence thereof. 

        (c)   Notwithstanding
any contrary provision of GAAP, for purposes of converting amounts in Pesos into amounts in Dollars in connection with (x) the determination of
EBITDA for purposes of Section 9.11 hereof (Total Debt to EBITDA Ratio) for any period, the exchange rate that shall be used shall be the average exchange rate for two fiscal quarters ending on
the last day of such period (and otherwise determined in accordance with GAAP), (y) the determination of EBITDA for purposes of Section 9.12 hereof (CADS to Adjusted Debt Service Ratio)
for any period, the exchange rate that shall be used shall be the average daily exchange rate referred to as Dólar Observado published in
the Chilean Official Gazette by the Central Bank of Chile (or, if the Central Bank of Chile ceases to publish the Dólar Observado, the
exchange rate replacing Dólar Observado) for the four fiscal quarters ending on the last day of such period (and otherwise determined in
accordance with GAAP) and (z) the determination of EBITDA for purposes of Section 9.13 hereof (Interest Coverage Ratio) for any period, the exchange rate that shall be used shall be the
exchange rate for the fiscal quarter ending on the last day of such period (and otherwise determined in accordance with GAAP). 

        Section 2.    Loans, Certain Fees, Notes and Prepayments.    

        2.01    Outstanding Loans.    Pursuant to the Original Credit Agreement, each of the Lenders made "Tranche A Loans"
(as that term is defined in the Original Credit Agreement) and "Tranche B Loans" (as so defined) in Dollars to the Company (collectively, the "Loans").
The outstanding principal amount of each Lender's Loans on the date of this Agreement, after giving effect to the prepayments required by Section 7.01(a)(i) hereof, is set forth opposite
the name of such Lender on the signature pages hereto. 

14

 

        2.02    Fees.    The Company shall pay to the Administrative Agent for account of each Lender the following fees: 

        (a)   on
the Closing Date, a fee in an amount equal to 1.0% of the aggregate outstanding principal amount of Loans held by such Lender on such date, as set forth opposite such
Lender's name on the signature pages hereto; 

        (b)   on
each Closing Date Anniversary, a fee in an amount equal to the Applicable Fee Percentage of the aggregate outstanding principal amount of Loans held by such Lender on
such date; and 

        (c)   on
the third Closing Date Anniversary, in addition to the fee described in clause (b) above, a fee in an amount equal to 0.75%. 

        2.03    Lending Offices.    The Loans made by each Lender are maintained at such Lender's Lending Office. 

        2.04    Remedies Independent.    Without prejudice to the provisions of Section 10 hereof, to the extent they
require action on the part of the Majority Lenders to accelerate the maturity of the Loans, the amounts payable by the Company at any time hereunder and under the Notes to each Lender shall be a
separate and independent debt and each Lender shall be entitled to protect and enforce its rights arising out of this Agreement and the Notes, and it shall not be necessary for any other Lender or the
Administrative Agent to consent to, or be joined as an additional party in, any proceedings for such purposes. 

        2.05    Notes.    Each of the Loans is evidenced by one or more promissory notes
(pagarés) issued pursuant to the Original Credit Agreement. As provided in Section 7.01(c)(iii) hereof, on the Closing Date
each of said promissory notes shall be amended to reflect the modifications to the terms of the Loans provided for by this Agreement. 

        2.06    Optional Prepayments.    Subject to Section 4.04 hereof, the Company shall have the right to prepay
Loans at any time, provided that the Company shall give the Administrative Agent notice of each such prepayment as provided in Section 4.05
hereof (and, upon the date specified in any such notice of prepayment, the amount to be prepaid shall become due and payable hereunder). Each prepayment of Loans under this Section shall be without
any penalty or premium, except as may be required under Section 5.05 hereof, and shall be applied to the remaining installments of the Loans ratably in accordance with the respective amounts
thereof. 

        2.07    Mandatory Prepayments.    

        (a)    From Excess Cash Flow.    On the last day of the first Interest Period ending after the earlier of
(i) the receipt by the Lenders of the annual financial statements of the Company referred to in Section 9.01(b) hereof and (ii) the date by which such annual financial statements
are required to be furnished to the Lenders pursuant to said Section, commencing with the annual financial statements for the fiscal year of the Company ending on December 31, 2003, the Company
shall prepay the Loans in an aggregate amount equal to the Lenders' Share, on the date of such prepayment, of 100% of Excess Cash Flow for such fiscal year,  provided that no such prepayment in respect
of Excess Cash Flow is required to be made (x) if the Company's cash balance as at the last day of
such fiscal year (as set forth in said financial statements) is less than U.S.$5,000,000, or (y) to the extent that, had such prepayment, together with any prepayment required to be made with
respect to all QLF's in respect of Excess Cash Flow, been made on the last day of such fiscal year, the Company's cash balance as at the last day of such fiscal year would have been less than
U.S.$5,000,000. Each such prepayment shall be applied to the installments of the Loans in the inverse order of the maturity thereof. To the extent necessary under Chilean Law, the Company agrees to
apply to the Central Bank of Chile, as promptly as practicable prior to the last day of such Interest Period, for approval to make such prepayment. 

15

 

        (b)    From Net Disposition Proceeds.    On or before the tenth Business Day following the Application Date relating
to any Net Disposition Proceeds, the Company shall prepay the Loans in an aggregate amount equal to the Lenders' Share, on the date of such prepayment, of 100% of such Net Disposition Proceeds. Each
such prepayment shall be applied to the installments of the Loans in the inverse order of the maturity thereof. To the extent necessary under Chilean Law, the Company agrees to apply to the Central
Bank of Chile, no later than the Business Day following receipt of such Net Disposition Proceeds, for approval to make such prepayment. 

        (c)    From Net Equity Proceeds.    On or before the tenth Business Day following the Application Date relating to any
Net Equity Proceeds, the Company shall prepay the Loans in an aggregate amount equal to the Lenders' Share, on the date of such prepayment, of 100% of such Net Equity Proceeds. Each such prepayment
shall be applied to the installments of the Loans in the inverse order of the maturity thereof. To the extent necessary under Chilean Law, the Company agrees to apply to the Central Bank of Chile, no
later than the Business Day following receipt of such Net Equity Proceeds, for approval to make such prepayment. 

        (d)    From Net Debt Proceeds.    On or before the tenth Business Day following the Application Date relating to any
Net Debt Proceeds, the Company shall prepay the Loans in an aggregate amount equal to the Lenders' Share, on the date of such prepayment, of 100% of such Net Debt Proceeds. Each such prepayment shall
be applied to the installments of the Loans in the inverse order of the maturity thereof; provided that each such prepayment made with Net Debt Proceeds
from any QLF shall be applied pro rata to the remaining installments of the Loans. To the extent necessary under Chilean Law, the Company agrees to
apply to the Central Bank of Chile, no later than the Business Day following receipt of such Net Debt Proceeds, for approval to make such prepayment. 

        Section 3.    Payments of Principal and Interest.    

        3.01    Repayment of Loans.    The Company hereby promises to pay to the Administrative Agent for account of each
Lender the principal of such Lender's Loans in installments on the Principal Payment Dates in the following respective percentages of the Closing Date Balance: 

	Principal Payment Date falling on or closest to
 
	 	Percentage of

Closing Date Balance
	 
	March 31, 2004	 	3.75	%
	June 30, 2004	 	3.75	%
	September 30, 2004	 	3.75	%
	December 31, 2004	 	3.75	%
	March 31, 2005	 	8.75	%
	June 30, 2005	 	8.75	%
	September 30, 2005	 	8.75	%
	December 31, 2005	 	8.75	%
	March 31, 2006	 	12.50	%
	June 30, 2006	 	12.50	%
	September 30, 2006	 	12.50	%
	December 31, 2006	 	12.50	%

        Each
of the foregoing installments will be reduced to the extent provided by Sections 2.06 and 2.07 hereof. 

        3.02    Interest.    The Company hereby promises to pay to the Administrative Agent for account of each Lender
interest on the unpaid principal amount of each Loan made by such Lender for the period from and including the date of such Loan to but excluding the date such Loan shall be paid in full, at a rate
per annum, for each Interest Period relating thereto, equal to the Eurodollar Rate for such Loan for such Interest Period plus the Applicable Margin. Notwithstanding the foregoing, the 

16

 

Company
hereby promises to pay to the Administrative Agent for account of each Lender interest at the applicable Post-Default Rate on any principal of any Loan made by such Lender and on
any other amount payable by the Company hereunder or under the Notes held by such Lender to or for account of such Lender, that shall not be paid in full when due (whether at stated maturity, by
acceleration, by mandatory prepayment or otherwise), for the period from and including the due date thereof to but excluding the date the same is paid in full. Accrued interest on each Loan shall be
payable in arrears on the last day of each Interest Period therefor and upon the payment or prepayment thereof (but only on the principal amount so paid or prepaid), except that interest payable at
the Post-Default Rate shall be payable from time to time on demand. Promptly after the determination of any interest rate provided for herein or any change therein, the Administrative
Agent shall give notice thereof to the Lenders to which such interest is payable and to the Company. 

        Section 4.    Payments; Pro Rata Treatment; Computations; Etc.    

        4.01    Payments.    

        (a)   Except
to the extent otherwise provided herein, all payments of principal, interest and other amounts to be made by any Obligor under this Agreement and the Notes, and,
except to the extent otherwise provided therein, all payments to be made by the Obligors under any other Basic Document, shall be made in Dollars, in immediately available funds, without deduction,
setoff or counterclaim, to the Administrative Agent at the Administrative Agent's Account, not later than 1:00 p.m. New York time on the date on which such payment shall become due (each such
payment made after such time on such due date to be deemed to have been made on the next succeeding Business Day). 

        (b)   The
Company shall, subject to Section 4.02 hereof, at the time of making each payment under this Agreement or any Note for account of any Lender, specify to the
Administrative Agent (which shall so notify the intended recipient(s) thereof) the Loans or other amounts payable by the Company hereunder to which such payment is to be applied (and in the event that
the Company fails to so specify, or if an Event of Default has occurred and is continuing, the Administrative Agent may distribute such payment to the Lenders for application in such manner as it or
the Majority Lenders, subject to Section 4.02 hereof, may determine to be appropriate). 

        (c)   Each
payment received by the Administrative Agent under this Agreement or any Note for account of any Lender shall be paid by the Administrative Agent promptly to such
Lender, in immediately available funds, for account of such Lender's Lending Office for the Loan or other obligation in respect of which such payment is made. 

        (d)   If
the due date of any payment under this Agreement or any Note would otherwise fall on a day that is not a Business Day, such date shall be extended to the next
succeeding Business Day, and interest shall be payable for any principal so extended for the period of such extension. 

        4.02    Pro Rata Treatment.    Except to the extent otherwise provided herein: (a) each payment or prepayment
(whether optional or mandatory) of principal of Loans by the Company shall be made for account of the Lenders pro rata in accordance with the respective
unpaid principal amounts of such Loans held by them; and (b) each payment of interest on Loans by the Company shall be made for account of the Lenders pro
rata in accordance with the amounts of interest on such Loans then due and payable to the respective Lenders. 

        4.03    Computations.    Interest on Loans and commitment fees shall be computed on the basis of a year of
360 days and actual days elapsed (including the first day but excluding the last day) occurring in the period for which payable. 

        4.04    Minimum Amounts.    Except for mandatory prepayments made pursuant to Section 2.07 hereof, each partial
prepayment of principal of Loans shall be in an aggregate amount at least equal to U.S.$5,000,000 or a larger multiple of U.S.$1,000,000. 

17

 

        4.05    Certain Notices.    Notices by the Company to the Administrative Agent of optional prepayments of Loans shall
be irrevocable and shall be effective only if received by the Administrative Agent not later than 10:00 a.m. New York time on the third Business Day prior to the date of such prepayment. Each
such notice of optional prepayment shall specify the amount (subject to Sections 4.02 and 4.04 hereof) of each Loan to be prepaid and the date of prepayment (which shall be a Business Day). The
Administrative Agent shall promptly (and, if the Administrative Agent receives such notice by 10:00 a.m. on any Business Day, on the same Business Day) notify the Lenders of the contents of
each such notice. 

        4.06    Non-Receipt of Funds by the Administrative Agent.    Unless the Administrative Agent shall have
been notified by the Company prior to the date on which the Company is to make payment to the Administrative Agent of a payment to the Administrative Agent for account of one or more of the Lenders
hereunder (such payment being herein called the "Required Payment"), which notice shall
be effective upon receipt, that the Company does not intend to make the Required Payment to the Administrative Agent, the Administrative Agent may assume that the Required Payment has been made and
may, in reliance upon such assumption (but shall not be required to), make the amount thereof available to the intended recipient(s) on such date; and, if the Company has not in fact made the Required
Payment to the Administrative Agent, the recipient(s) of such payment shall, on demand, repay to the Administrative Agent the amount so made available together with interest thereon in respect of each
day during the period commencing on the date (the "Advance Date") such amount was so made available by the Administrative Agent until the date the
Administrative Agent recovers such amount at a rate per annum equal to the Federal Funds Rate for such day and, if such recipient(s) shall fail promptly to make such payment, the Administrative Agent
shall be entitled to recover such amount, on demand, from the Company, together with interest as aforesaid, provided that if neither the recipient(s)
nor the Company shall return the Required Payment to the Administrative Agent within three Business Days of the Advance Date, then, retroactively to the Advance Date, the Company and the recipient(s)
shall each be obligated to pay interest on the Required Payment. If the Required Payment shall represent a payment to be made by the Company to the Lenders, the Company and the recipient(s) shall each
be obligated retroactively to the Advance Date to pay interest in respect of the Required Payment at the Post Default Rate (and, in case the recipient(s) shall return the Required Payment to the
Administrative Agent, without limiting the obligation of the Company under Section 3.02 hereof to pay interest to such recipient(s) at the Post Default Rate in respect of the Required Payment). 

        4.07    Sharing of Payments, Etc.    

        (a)   The
Company and each Subsidiary Guarantor agrees that, in addition to (and without limitation of) any right of setoff, banker's lien or counterclaim a Lender and its
Affiliates may otherwise have, each Lender and its Affiliates shall be entitled, at its option, to offset balances held by it (including any deposits, whether general or special, time or demand, or
provisional or final, and including certificates of deposit) for account of the Company or any Subsidiary Guarantor, or other Indebtedness of such Lender held by the Company or any Subsidiary
Guarantor, at any of its offices, in Dollars or in any other currency, against any principal of or interest on any of such Lender's Loans, to the extent due and payable, or any other amount then due
and payable to such Lender hereunder (regardless of whether such balances are then due to the Company or such Subsidiary Guarantor), in which case it shall promptly notify the Company and the
Administrative Agent thereof, provided that such Lender's failure to give such notice shall not affect the validity thereof. 

        (b)   If
any Lender shall obtain from any Obligor payment of any principal of or interest on any Loan owing to it or payment of any other amount under this Agreement or any
other Basic Document through the exercise of any right of setoff, banker's lien or counterclaim or similar right or otherwise (other than from the Administrative Agent as provided herein), and, as a
result of such payment, such Lender shall have received a greater percentage of the principal of or interest on the Loans or such 

18

 

other
amounts then due hereunder or thereunder by such Obligor to such Lender than the percentage received by any other Lender, it shall promptly purchase from such other Lenders participations in
(or, if and to the extent specified by such Lender, direct interests in) the Loans or such other amounts, respectively, owing to such other Lenders (or in interest due thereon, as the case may be) in
such amounts, and make such other adjustments from time to time as shall be equitable, to the end that all the Lenders shall share the benefit of such excess payment (net of any expenses that may be
incurred by such Lender in obtaining or preserving such excess payment) pro rata in accordance with the unpaid principal of and/or interest on the Loans
or such other amounts, respectively, owing to each of the Lenders. To such end all the Lenders shall make appropriate adjustments among themselves (by the resale of participations sold or otherwise)
if such payment is rescinded or must otherwise be restored. 

        (c)   The
Company agrees that any Lender so purchasing such a participation (or direct interest) may exercise all rights of setoff, banker's lien, counterclaim or similar
rights with respect to such participation as fully as if such Lender were a direct holder of Loans or other amounts (as the case may be) owing to such Lender in the amount of such participation. 

        (d)   Nothing
contained herein shall require any Lender to exercise any such right or shall affect the right of any Lender to exercise, and retain the benefits of exercising,
any such right with respect to any other Indebtedness or obligation of any Obligor. If, under any applicable bankruptcy, insolvency or other similar law, any Lender receives a secured claim in lieu of
a setoff to which this Section 4.07 applies, such Lender shall, to the extent practicable, exercise its rights in respect of such secured claim in a manner consistent with the rights of the
Lender entitled under this Section 4.07 to share in the benefits of any recovery on such secured claim. 

        Section 5.    Yield Protection, Etc.    

        5.01    Additional Costs.    

        (a)   The
Company shall pay directly to each Lender from time to time such amounts as such Lender may reasonably determine to be necessary to compensate such Lender for any
costs that such Lender determines are attributable to its maintaining of any Loans, or any reduction in any amount receivable by such Lender hereunder in respect of any Loans or such obligation (such
increases in costs and reductions in amounts receivable being herein called "Additional Costs"), resulting from any Regulatory Change that: 

        (i)    shall
subject any Lender (or its Lending Office or the bank holding company of which it is a subsidiary) to any tax, duty or other charge in respect of such Loans or its
Notes or changes the basis of taxation of any amounts payable to such Lender under this Agreement or its Notes in respect of Loans (excluding changes in the rate of tax on the overall net income of
such Lender or of such Lending Office by the jurisdiction in which such Lender has its principal office or such Lending Office or such bank holding company); or 

        (ii)   imposes
or modifies any reserve, special deposit or similar requirements relating to any extensions of credit or other assets of, or any deposits with or other
liabilities of, such Lender (including, without limitation, any of such Loans or any deposits referred to in the definition of "Eurodollar Rate" in Section 1.01 hereof), or any commitment of
such Lender. 

        (b)   Without
limiting the effect of the foregoing provisions of this Section 5.01 (but without duplication), the Company shall pay directly to each Lender from time to
time on request such amounts as such Lender may reasonably determine to be necessary to compensate such Lender (or, without duplication, the bank holding company of which such Lender is a subsidiary)
for any costs that it determines are attributable to the maintenance by such Lender (or any Lending Office or such bank holding company), pursuant to any law or regulation or any interpretation,
directive or request (whether or not having the force of law and whether or not failure to comply therewith would be unlawful) of any court or governmental or monetary authority (i) following
any Regulatory Change or 

19

 

(ii) implementing
any riskbased capital guideline or other requirement (whether or not having the force of law and whether or not the failure to comply therewith would be unlawful) heretofore
or hereafter issued by any government or governmental or supervisory authority implementing at the national level the Basle Accord, of capital in respect of its Loans (such compensation to include,
without limitation, an amount equal to any reduction of the rate of return on assets or equity of such Lender (or any Lending Office or such bank holding company) to a level below that which such
Lender (or any Lending Office or such bank holding company) could have achieved but for such law, regulation, interpretation, directive or request). For purposes of this Section 5.01(b),
"Basle Accord" shall mean the proposals for riskbased capital framework described by the Basle Committee on Banking Regulations and Supervisory
Practices in its paper entitled "International Convergence of Capital Measurement and Capital Standards" dated July 1988, as amended, modified and supplemented and in effect from time to time
or any replacement thereof. 

        (c)   Each
Lender shall notify the Company of any event occurring after the date of this Agreement entitling such Lender to compensation under paragraph (a) or
(b) of this Section 5.01 as promptly as practicable, but in any event within 45 days, after such Lender obtains actual knowledge thereof;  provided that (i) if any Lender fails to
give such notice within 45 days after it obtains actual knowledge of such an event, such Lender
shall, with respect to compensation payable pursuant to this Section 5.01 in respect of any costs resulting from such event, only be entitled to payment under this Section 5.01 for costs
incurred from and after the date 45 days prior to the date that such Lender does give such notice, (ii) no Lender shall be entitled to compensation under paragraph (a) or
(b) of this Section 5.01 for any period in excess of 120 days prior to the date of notice from such Lender to the Company (irrespective of the date on which such Lender had actual
knowledge of the event giving rise to the request for compensation), (iii) any such Lender shall be entitled to compensation under paragraphs (a) and (b) of this
Section 5.01 only if such Lender is requesting similar compensation from other borrowers similarly situated, and (iv) each Lender will designate a different Lending Office for the Loans
of such Lender if such designation will avoid the need for, or reduce the amount of, such compensation and will not, in the sole opinion of such Lender, be disadvantageous to such Lender, except that
such Lender shall have no obligation to designate a Lending Office located in the United States of America. Each Lender will furnish to the Company a certificate setting forth the basis and amount of
each request by such Lender for compensation under paragraph (a) or (b) of this Section 5.01. Determinations and allocations by any Lender for purposes of this Section 5.01
of the effect of any Regulatory Change pursuant to paragraph (a) or (b) of this Section 5.01, or of the effect of capital maintained pursuant to paragraph (b) of this
Section 5.01, on its costs or rate of return of maintaining Loans or on amounts receivable by it in respect of Loans, and of the amounts required to compensate such Lender under this
Section 5.01, shall be conclusive, provided that such determinations and allocations are made on a reasonable basis. 

        (d)   Provided
that no Default shall have occurred and be continuing, the Company may, at any time, replace any Lender (x) as to which the Company is obligated to make
payments under this Section 5.01 (unless such Lender has since changed its Lending Office so as to eliminate the obligation of the Company to make such payments), or (y) which has given
the Company the notice contemplated by Section 5.03 hereof, by giving not less than ten Business Days' prior notice to the Administrative Agent (who shall promptly notify such Lender), that it
intends to replace such Lender with one or more lenders (including but not limited to one or more Lenders under this Agreement) selected by the Company that (i) have agreed to replace such
Lender as provided in this Section 5.01(d), (ii) are reasonably acceptable to the Administrative Agent and (iii) enter into an assignment agreement with such Lender (in form
reasonably acceptable to such Lender). Upon the effective date of any replacement under this paragraph and as a condition to such replacement, the replacement lender or lenders shall pay to the Lender
being replaced the principal of the Loans held by such Lender and the Company shall pay to such Lender all accrued interest on such Loans and all other amounts owing to such Lender hereunder
(including any amounts payable under Section 5.05 hereof as if such Loans 

20

 

were
being prepaid by the Company) whereupon each such replacement lender (if not already a Lender) shall become a "Lender" for all purposes of this Agreement. Each Lender agrees to execute and
deliver such instruments, and take such other actions, as may be required by the Central Bank of Chile in order to effect the replacement of such Lender pursuant to this Section 5.01(d). 

        5.02    Alternative Interest Rate.    Anything herein to the contrary notwithstanding, if, on or prior to the
determination of any Eurodollar Rate for any Interest Period or Default Interest Period: 

        (a)   the
Administrative Agent reasonably determines (so long as the Administrative Agent is making substantially the same determination with respect to other borrowers
(situated similarly to the Company) to which it has made loans), which determination shall be conclusive, that interest rate reported for the relevant deposits referred to in the definition of
"Eurodollar Rate" in Section 1.01 hereof are not being provided in the relevant amounts or for the relevant maturities for purposes of determining rates of interest for Loans as provided
herein; or 

        (b)   the
Majority Lenders reasonably determine (so long as they are making substantially the same determination with respect to other borrowers (situated similarly to the
Company) to which they respectively have made loans), which determination shall be conclusive, and notify the Administrative Agent that the relevant rates of interest referred to in the definition of
"Eurodollar Rate" in Section 1.01 hereof upon the basis of which the rate of interest for Loans for such Interest Period or Default Interest Period is to be determined are not likely to
adequately cover the cost to such Lenders of maintaining Loans for such Interest Period or Default Interest Period; 

then
the Administrative Agent shall give the Company and each Lender prompt notice thereof and: 

        (i)    During
the 15-day period next succeeding the date of any such notice (the "Negotiation Period"), the
Administrative Agent (in consultation with such Lenders) and the Company will negotiate in good faith for the purpose of agreeing upon an alternative, mutually acceptable basis (the
"Substitute Basis") for determining the rate of interest to be applicable to the Loans for such Interest Period or Default Interest Period; 

        (ii)   If
at the expiry of the Negotiation Period, the Majority Lenders and the Company have agreed upon a Substitute Basis and the Administrative Agent has received
confirmation from its Chilean counsel that such Substitute Basis has received all necessary governmental approvals and consents, the Substitute Basis shall be retroactive to, and take effect from, the
beginning of such Interest Period or Default Interest Period; 

        (iii)  If
at the expiry of the Negotiation Period, a Substitute Basis shall not have been agreed upon as aforesaid or the Administrative Agent shall not have received the
above mentioned confirmation as to requisite governmental approvals or consents, the Administrative Agent shall forthwith notify each Lender of such failure to agree to receive such confirmation and,
within five Business Days after receipt of such notice (or as soon thereafter as may be practicable), each such Lender shall notify the Company (through the Administrative Agent) of the cost to such
Lender (as determined by it in good faith and on commercially reasonable terms) of funding and maintaining such Loan for such Interest Period or Default Interest Period (which shall be substantially
the same cost that such Lender quotes to other borrowers (similarly situated to the Company in similar situations) to which it has made loans); and the interest payable to such Lender on such Loan for
such Interest Period shall be interest at a rate per annum equal to the Applicable Margin above the cost to such Lender of funding and maintaining such Loan for such Interest Period or Default
Interest Period as so notified by such Lender (or, as to any principal of such Loan or other amount payable to such Lender on or in respect of such Loan which is then past due, 3%  plus the Applicable
Margin above such cost); and 

21

 

        (iv)  The
procedures specified in clauses (i), (ii) and (iii) above shall apply to each Interest Period or Default Interest Period succeeding the first Interest
Period or Default Interest Period to which they were applied unless and until the Administrative Agent shall determine in consultation with the Majority Lenders that the conditions referred to in
clause (a) or clause (b) above no longer exist and so notifies the Company and the Lenders, whereupon interest on such Loans shall again be determined in accordance with the provisions
of Section 3.02 hereof commencing on the first day of the Interest Period or Default Interest Period next succeeding the date of such notice. 

        5.03    Illegality.    Notwithstanding any other provision of this Agreement, in the event that it becomes unlawful
for any Lender or its Lending Office to honor its obligation to maintain any of its Loans hereunder (and, in the reasonable opinion of such Lender, the designation of a different Lending Office would
either not avoid such unlawfulness or would be disadvantageous to the Lender), then such Lender shall promptly notify the Company thereof (through the Administrative Agent) and such Lender's
obligation to maintain Loans shall be suspended until such time as such Lender may again maintain Loans and, if any of such Lender's Loans are then outstanding, the Company shall, upon the request of
such Lender, promptly prepay the principal of such Loans together with accrued interest thereon. 

        5.04    Chilean Taxes.    

        (a)   All
payments on account of the principal of and interest on the Loans, fees and all other amounts payable hereunder by the Obligors to or for the account of the
Administrative Agent or any Lender, including, without limitation, amounts payable under clause (b) of this Section 5.04, shall be made free and clear of and without reduction or
liability for Chilean Taxes. The Obligors will pay all Chilean Taxes for their own respective accounts, prior to the date on which penalties attach thereto, except for any Chilean Taxes (other than
Chilean Taxes imposed on or in respect of any amount payable hereunder, under the Notes or under any other Basic Document) the payment of which is being contested in good faith and by proper
proceedings and against which adequate reserves are being maintained, so long as no claim for such Chilean Taxes is made on the Administrative Agent or any Lender. 

        (b)   Each
of the Obligors shall indemnify the Administrative Agent and each Lender against, and reimburse the Administrative Agent and each Lender on demand for, any Chilean
Taxes and any loss, liability, claim or expense, including interest, penalties and legal fees, which the Administrative Agent or such Lender (as the case may be) may incur at any time arising out of
or in connection with any failure of the Company or any Subsidiary Guarantor to make any payment of Chilean Taxes when due. 

        (c)   In
the event that any Obligor is required by applicable law, decree or regulation to deduct or withhold Chilean Taxes from any amounts payable on, under or in respect of
this Agreement or the Loans (including, without limitation, the Chilean income taxes referred to in clause (e) of this Section 5.04), such Obligor shall promptly pay the Person entitled
to such amount such additional amounts as may be required, after the deduction or withholding of Chilean Taxes to enable such Person to receive from such Obligor, on the due date thereof, an amount
equal to the full amount stated to be payable to such Person under this Agreement. 

        (d)   Each
Obligor shall furnish to the Administrative Agent, upon the request of any Lender (through the Administrative Agent), together with sufficient certified copies for
distribution to each Lender requesting the same original official tax receipts in respect of each payment of Chilean Taxes required under this Section 5.04, within 30 days after the date
such payment is made, and the Obligors shall promptly furnish to the Administrative Agent at its request or at the request of any Lender (through the Administrative Agent) any other information,
documents and receipts that the Administrative Agent or such Lender may reasonably require to establish to its satisfaction that full and timely payment has been made of all Chilean Taxes required to
be paid under this Section 5.04. 

22

 

        (e)   Each
Obligor represents and warrants to the Lenders and the Administrative Agent that, on and as of the date of this Agreement, none of this Agreement, any other Basic
Document, or the execution or delivery by any Obligor of this Agreement or any other Basic Document, is subject to any Chilean Taxes, and no payment to be made by any Obligor under this Agreement is
subject to any Chilean Taxes, except for Chilean income taxes at the rate of 4% on interest payable by the Company hereunder, certain other Chilean income taxes of up to a rate of 35% on amounts
payable by the Company hereunder (other than interest on and principal of the Loans) and, if applicable, Chilean stamp taxes at the rate of 1.2% on the amount of each Loan, in each case required to be
withheld and paid by the Company. 

        5.05    Compensation.    The Company shall pay to the Administrative Agent for account of each Lender, upon the
request of such Lender through the Administrative Agent, such amount or amounts as shall be sufficient (in the reasonable opinion of such Lender) to compensate it for any loss, cost or expense that
such Lender reasonably determines is attributable to: 

        (a)   any
payment or mandatory or optional prepayment of a Loan made by such Lender for any reason (including, without limitation, the acceleration of the Loans pursuant to
Section 10 hereof) on a date other than the last day of an Interest Period for such Loan; or 

        (b)   any
failure by the Company for any reason to prepay a Loan from such Lender on the date specified in the relevant notice of prepayment given pursuant to
Section 2.06 hereof. 

Without
limiting the effect of the preceding sentence, such compensation shall include an amount equal to the excess, if any, of (i) the amount of interest that otherwise would have accrued on
the principal amount so paid, prepaid, or not borrowed (other than the portion thereof that represents the Applicable Margin) for the period from the date of such payment, prepayment, or failure to
borrow to the last day of the then current Interest Period for such Loan (or, in the case of a failure to borrow, the Interest Period for such Loan that would have commenced on the date specified for
such borrowing) at the applicable rate of interest for such Loan provided for herein over (ii) the amount of interest that otherwise would have accrued on such principal amount at a rate per
annum equal to the interest component of the amount such Lender would have bid in the London interbank market for Dollar deposits of leading banks in amounts comparable to such principal amount and
with maturities comparable to such period (as reasonably determined by such Lender). 

        Section 6.    Guarantee.    

        6.01    The Guarantee.    The Subsidiary Guarantors hereby irrevocably jointly and severally guarantee to each Lender
and the Administrative Agent and their respective successors and assigns the prompt payment in full when due (whether at stated maturity, by acceleration or otherwise) of the principal of and interest
on the Loans made by the Lenders to, and the Notes held by each Lender of, the Company and all other amounts from time to time owing to the Lenders or the Administrative Agent by the Company under
this Agreement and under the Notes and by any Obligor under any of the other Basic
Documents, in each case strictly in accordance with the terms thereof (and giving effect to any amendment or modification of such terms) (such obligations being herein collectively called the
"Guaranteed Obligations"). The Subsidiary Guarantors hereby further jointly and severally agree that if the Company shall fail to pay in full when due
(whether at stated maturity, by acceleration or otherwise) any of the Guaranteed Obligations, the Subsidiary Guarantors will promptly pay the same, without any demand or notice whatsoever, and that in
the case of any extension of time of payment or renewal of any of the Guaranteed Obligations, the same will be promptly paid in full when due (whether at extended maturity, by acceleration or
otherwise) in accordance with the terms of such extension or renewal. 

        6.02    Obligations Unconditional.    The obligations of the Subsidiary Guarantors under Section 6.01 hereof
are absolute and unconditional, joint and several, irrespective of the value, genuineness, validity, 

23

 

regularity
or enforceability of the obligations of the Company under this Agreement, the Notes or any other agreement or instrument referred to herein or therein, or any substitution, release or
exchange of any other guarantee of or security for any of the Guaranteed Obligations, and, to the fullest extent permitted by applicable law, irrespective of any other circumstance whatsoever that
might otherwise constitute a legal or equitable discharge or defense of a surety or guarantor, it being the intent of this Section 6.02 that the obligations of the Subsidiary Guarantors
hereunder shall be absolute and unconditional, joint and several, under any and all circumstances. Without limiting the generality of the foregoing, it is agreed that the occurrence of any one or more
of the following shall not alter or impair the liability of the Subsidiary Guarantors hereunder which shall remain absolute and unconditional as described above: 

        (i)    at
any time or from time to time, without notice to the Subsidiary Guarantors, the time for any performance of or compliance with any of the Guaranteed Obligations shall
be extended, or such performance or compliance shall be waived; 

        (ii)   any
of the acts mentioned in any of the provisions of this Agreement or the Notes or any other agreement or instrument referred to herein or therein shall be done or
omitted; 

        (iii)  the
maturity of any of the Guaranteed Obligations shall be accelerated, or any of the Guaranteed Obligations shall be modified, supplemented or amended in any respect,
or any right under this Agreement or the Notes or any other agreement or instrument referred to herein or therein shall be waived or any other guarantee of any of the Guaranteed Obligations or any
security therefor shall be released or exchanged in whole or in part or otherwise dealt with; 

        (iv)  any
lien or security interest granted to, or in favor of, the Administrative Agent or any Lender or Lenders as security for any of the Guaranteed Obligations shall fail
to be perfected; or 

        (v)   any
law regulation or order of any jurisdiction, or any other event, affecting any term of any Guaranteed Obligation or the Administrative Agent's or any Lender's rights
with respect thereto, including, without limitation: (A) the application of any such law, regulation, decree or order, including any prior approval, which would prevent the exchange of a
currency or the remittance of funds outside of such jurisdiction or the unavailability of Dollars in any legal exchange market in such jurisdiction in accordance with normal commercial practice; or
(B) a declaration of banking moratorium or any suspension of payments by banks in such jurisdiction or the imposition by such jurisdiction or any governmental authority thereof of any
moratorium on, the required rescheduling or restructuring of, or required approval of payments on, any indebtedness in such jurisdiction; or (C) any expropriation, confiscation, nationalization
or requisition by such country or any governmental authority that directly or indirectly deprives the companies in such jurisdiction of any payment obligation under any Guaranteed Obligations; or
(D) any war (whether or not declared), insurrection, revolution, hostile act, civil strife or similar events occurring in such jurisdiction which has the same effect as the events described in
clause (A), (B) or (C) above (in each of the cases contemplated in clauses (A) through (D) above, to the extent occurring or existing on or at any time after the
date of this Agreement). 

        The
Subsidiary Guarantors hereby expressly waive diligence, presentment, demand of payment, protest and all notices whatsoever, and any requirement that the Administrative Agent or any
Lender exhaust any right, power or remedy or proceed against the Company under this Agreement or the Notes or any other agreement or instrument referred to herein or therein, or against any other
Person under any other guarantee of, or security for, any of the Guaranteed Obligations. 

        6.03    Reinstatement.    The obligations of the Subsidiary Guarantors under this Section 6 shall be
automatically reinstated if and to the extent that for any reason any payment by or on behalf of the Company in respect of the Guaranteed Obligations is rescinded or must be otherwise restored by any
holder of any of the Guaranteed Obligations, whether as a result of any proceedings in bankruptcy or 

24

 

reorganization
or otherwise and the Guarantors jointly and severally agree that they will indemnify the Administrative Agent and each Lender on demand for all reasonable costs and expenses (including,
without limitation, fees of counsel) incurred by the Administrative Agent or such Lender in connection with such rescission or restoration, including any such costs and expenses incurred in defending
against any claim alleging that such payment constituted a preference, fraudulent transfer or similar payment under any bankruptcy, insolvency or similar law. 

        6.04    Subrogation.    The Subsidiary Guarantors hereby jointly and severally agree that until the payment and
satisfaction in full of all Guaranteed Obligations under this Agreement they shall not exercise any right or remedy arising by reason of any performance by them of their guarantee in
Section 6.01 hereof, whether by subrogation or otherwise, against the Company or any other guarantor of any of the Guaranteed Obligations or any security for any of the Guaranteed Obligations.
Any amount paid to any Subsidiary Guarantor on account of any such subrogation rights prior to the payment in full of all Guaranteed Obligations shall be held in trust for the benefit of the
Administrative Agent and the Lenders and each holder of a Note and, forthwith upon receipt by any Subsidiary Guarantor, be turned
over to the Administrative Agent in the exact form received by such Subsidiary Guarantor (duly indorsed by such Subsidiary Guarantor to the Administrative Agent, if required) and credited and applied
against the Guaranteed Obligations, whether matured or unmatured, in accordance with the terms of this Agreement. 

        6.05    Remedies.    The Subsidiary Guarantors jointly and severally agree that, as between the Subsidiary Guarantors
and the Lenders, the obligations of the Company under this Agreement and the Notes may be declared to be forthwith due and payable as provided in Section 10 hereof (and shall be deemed to have
become automatically due and payable in the circumstances provided in said Section 10) for purposes of Section 6.01 hereof notwithstanding any stay, injunction or other prohibition
preventing such declaration (or such obligations from becoming automatically due and payable) as against the Company and that, in the event of such declaration (or such obligations being deemed to
have become automatically due and payable), such obligations (whether or not due and payable by the Company) shall forthwith become due and payable by the Subsidiary Guarantors for purposes of said
Section 6.01. 

        6.06    Continuing Guarantee.    The guarantee in this Section 6 is a continuing guarantee, and shall apply to
all Guaranteed Obligations whenever arising. 

        6.07    Rights of Contribution.    The Subsidiary Guarantors hereby agree, as between themselves, that if any
Subsidiary Guarantor shall become an Excess Funding Subsidiary Guarantor (as defined below) by reason of the payment by such Subsidiary Guarantor of any Guaranteed Obligations, each other Subsidiary
Guarantor shall, on demand of such Excess Funding Subsidiary Guarantor (but subject to the next sentence), pay to such Excess Funding Subsidiary Guarantor an amount equal to such Subsidiary
Guarantor's Pro Rata Share (as defined below and determined, for this purpose, without reference to the Properties, debts and liabilities of such Excess Funding Subsidiary Guarantor) of the Excess
Payment (as defined below) in respect of such Guaranteed Obligations. The payment obligation of a Subsidiary Guarantor to any Excess Funding Subsidiary Guarantor under this Section 6.07 shall
be subordinate and subject in right of payment to the prior payment in full of the obligations of such Subsidiary Guarantor under the other provisions of this Section 6 and such Excess Funding
Subsidiary Guarantor shall not exercise any right or remedy with respect to such excess until payment and satisfaction in full of all of such obligations. 

        For
purposes of this Section 6.07, (i) "Excess Funding Subsidiary Guarantor" shall mean, in respect of any Guaranteed
Obligations, a Subsidiary Guarantor that has paid an amount in excess of its Pro Rata Share of such Guaranteed Obligations, (ii) "Excess Payment"
shall mean, in respect of any Guaranteed Obligations, the amount paid by an Excess Funding Subsidiary Guarantor in excess of its Pro Rata Share of such Guaranteed Obligations and
(iii) "Pro Rata Share" shall mean, for any 

25

 

Subsidiary
Guarantor, the ratio (expressed as a percentage) of (x) the amount by which the aggregate present fair saleable value of all Properties of such Subsidiary Guarantor (excluding any
shares of stock of any other Subsidiary Guarantor) exceeds the amount of all the debts and liabilities of such Subsidiary Guarantor (including contingent, subordinated, unmatured and unliquidated
liabilities, but excluding the obligations of such Subsidiary Guarantor hereunder and any obligations of any other Subsidiary Guarantor that have been Guaranteed by such Subsidiary Guarantor) to
(y) the amount by which the aggregate fair saleable value of all Properties of the Company and all of the Subsidiary Guarantors exceeds the amount of all the debts and liabilities (including
contingent, subordinated, unmatured and unliquidated liabilities, but excluding the obligations of the Company and the Subsidiary Guarantors hereunder) of the Company and all of the Subsidiary
Guarantors, all as of the Closing Date. If any Subsidiary becomes a Subsidiary Guarantor hereunder subsequent to the Closing Date, then for purposes of this Section 6.07 such subsequent
Subsidiary Guarantor shall be deemed to have been a Subsidiary Guarantor as of the Closing Date and the aggregate present fair saleable value of the Properties, and the amount of the debts and
liabilities, of such Subsidiary Guarantor as of the Closing Date shall be deemed to be equal to such value and amount on the date such Subsidiary Guarantor becomes a Subsidiary Guarantor hereunder. 

        6.08    General Limitation on Guarantee Obligations.    In any action or proceeding involving any state corporate law,
or any state or Federal bankruptcy, insolvency, reorganization or other law affecting the rights of creditors generally, if the obligations of any Subsidiary Guarantor under Section 6.01 hereof
would otherwise, taking into account the provisions of Section 6.07 hereof, be held or determined to be void, invalid or unenforceable, or subordinated to the claims of any other creditors, on
account of the amount of its liability under said Section 6.01, then, notwithstanding any other provision hereof to the contrary, the amount of such liability shall, without any further action
by such Subsidiary Guarantor, any Lender, the Administrative Agent or any other Person, be automatically limited and reduced to the highest amount that is valid and enforceable and not subordinated to
the claims of other creditors as determined in such action or proceeding. 

        Section 7.    Conditions Precedent and Condition Subsequent.    

        7.01    Conditions Precedent to the Effectiveness of this Agreement.    This Agreement shall become effective, and the
Original Credit Agreement shall be amended and restated in its entirety to read as this Agreement, effective as of the date hereof, upon the satisfaction of the following conditions precedent: 

        (a)    Equity Contributions and Certain Prepayments.    

        (i)    the
Company shall have received proceeds of Equity Contributions in an aggregate amount at least equal to U.S.$15,000,000 (and the Administrative Agent shall have
received a certificate of the President, the General Manager (Gerente General) or other senior officer of the Company to that effect) and on or prior to
the Closing Date, the Company shall have used the proceeds of such Equity Contribution to repay the principal of "Loans" under the Original Credit Agreement in an aggregate amount at least equal to
U.S.$15,000,000. 

        (ii)   after
giving effect to the repayment of Loans under the Original Credit Agreement, contemplated by clause (i) above, the Closing Date Balance shall not exceed
U.S.$123,000,000. 

        (iii)  during
the period beginning on January 1, 2003 and ending on the Closing Date, UGC shall have made Equity Contributions in an amount at least equal to
U.S.$3,000,000 to finance Capital Expenditures (and the Administrative Agent shall have received a certificate of the President, the General Manager (Gerente
General) or other senior officer of the Company to that effect). 

        (b)    Support Letter.    The Administrative Agent shall have received a letter from UGC substantially in the form of
Exhibit D hereto. 

26

  

        (c)    Collateral Documents; Etc.    The Administrative Agent shall have received each of the following: 

        (i)    a
public deed evidencing the Subsidiary Guarantors' Guarantee pursuant to Section 6.01 hereof; 

        (ii)   a
copy of each policy of insurance covering tangible Property of the Obligors, together with a copy of a notice given to each insurer (and evidence that such notice has
been duly given) under such policies advising it of the assignment of such policy; 

        (iii)  modifications
to the Note or Notes held by the each of the Lenders reflecting the amendments in set forth in this Agreement and duly executed and delivered by the
Company; and 

        (iv)  an
amendment to each of the Conditional Assignments, reflecting the extension of the term of such Conditional Assignments to December 31, 2006. 

        (d)    Opinions of Counsel.    The Administrative Agent shall have received the following opinions: 

        (i)    an
opinion, dated the Closing Date, of Carey y Cia. Ltda., counsel to the Obligors, substantially in the form of Exhibit B-1 hereto (and each
Obligor hereby instructs such counsel to deliver such opinion to the Lenders and the Administrative Agent); 

        (ii)   an
opinion, dated the Closing Date, of Mayer, Brown, Rowe & Maw, special New York counsel to the Administrative Agent, substantially in the form of
Exhibit B-2 hereto (and the Administrative Agent hereby instructs such counsel to deliver such opinion to the Lenders); and 

        (iii)  an
opinion, dated the Closing Date, of Philippi, Yrarrázaval, Pulido y Brunner, special Chilean counsel to the Administrative Agent, substantially in
the form of Exhibit B-3 hereto (and the Administrative Agent hereby instructs such counsel to deliver such opinion to the Lenders). 

        (e)    Corporate Authorizations, Etc.    The Administrative Agent shall have received the following Corporate
Documents, each certified as indicated below: 

        (i)    for
each Obligor, a notarized copy of its organizational documents (estatutos sociales), as amended and in effect on the
Closing Date (or, in the alternative, a certification to the effect that none of such documents has been modified since delivery thereof pursuant to the Original Credit Agreement) and for each Stock
Pledgor, a copy of its certificate of incorporation and its by-laws (or other organizational documents), as amended and in effect on the Closing Date (or, in the alternative, a
certification to the effect that none of such documents has been modified since delivery thereof pursuant to the Original Credit Agreement), certified by the President or a senior officer of such
Stock Pledgor as true and complete copies thereof; 

        (ii)   for
each of the Obligors and each Stock Pledgor, a certificate of the President, the General Manager (Gerente General)
or other senior officer of such Obligor or such Stock Pledgor, as the case may be, dated the Closing Date and certifying (A) that attached thereto is a true and complete copy of resolutions
duly adopted by the board of directors of such Obligor or such Stock Pledgor, authorizing the execution, delivery and performance of such of the Basic Documents to which such Obligor or such Stock
Pledgor, is or is intended to be a party and the Loans hereunder, and that such resolutions have not been modified, rescinded or amended and are in full force and effect, and (B) as to the
incumbency and specimen signature of each officer of such Obligor or such Stock Pledgor, executing such of the Basic 

27

 

Documents
to which such Obligor or such Stock Pledgor, is intended to be a party and each other document to be delivered by such Obligor or such Stock Pledgor, from time to time in connection
therewith (and the Administrative Agent and each Lender may conclusively rely on such certificate until it receives notice in writing from such Obligor or such Stock Pledgor, to the contrary); 

        (iii)  for
each of the Obligors and each Stock Pledgor, a certificate of another officer or authorized representative of such Obligor or such Stock Pledgor, as to the
incumbency and specimen signature of the President, the General Manager (Gerente General) or senior officer of such Obligor or such Stock Pledgor,
signing the applicable certificate referred to in clause (ii) above; 

        (iv)  the
Administrative Agent shall have received a copy of an acceptance by the Process Agent of the continuation of its appointment until March 31, 2007, as the
agent for service of process of each Obligor, duly executed and delivered by the Process Agent; and 

        (v)   the
Administrative Agent shall have received such other documents as the Administrative Agent or any Lender or special New York counsel to the Administrative Agent may
reasonably request and are reasonably available to the Company. 

        (f)    Other Conditions.    The following conditions shall have been satisfied: 

        (i)    both
immediately prior to the consummation of the transactions contemplated by this Section 7.01, and after giving effect thereto, no Default shall be continuing; 

        (ii)   both
immediately prior to the consummation of the transactions contemplated by this Section 7.01, and after giving effect thereto, the representations and
warranties made by the Company in Section 5.04(e) hereof and in Section 8 hereof, and by each Obligor in each of the other Basic Documents to which it is a party, shall be true and
complete on and as of the Closing Date with the same force and effect as if made on and as of such date (or, if any such representation or warranty is expressly stated to have been made as of a
specific date, as of such specific date); 

        (iii)  there
shall have occurred no event that has caused a material adverse change in business, condition (financial or otherwise), operations, performance, properties or
prospects of the Company and its Subsidiaries (taken as a whole) since the date of the Company's last audited financial statements; 

        (iv)  the
Company shall have paid such fees as it shall have agreed to pay to any Lender or the Administrative Agent in connection herewith, including, without limitation,
the reasonable fees and expenses of Mayer, Brown, Rowe & Maw, special New York counsel to the Administrative Agent and Philippi, Yrarrázaval, Pulido & Brunner, Chilean
counsel to the Administrative Agent, in connection with the negotiation, preparation, execution and delivery of this Agreement, the Notes and the other Basic Documents (to the extent that statements
for such fees and expenses have been delivered to the Company); and 

        (v)   all
corporate and other proceedings, and all documents, instruments and other legal matters in connection with the transactions contemplated hereby shall be reasonably
satisfactory in form and substance to the Administrative Agent, and the Administrative Agent shall have received such other documents and legal opinions in respect of any aspect or consequence of the
transactions contemplated hereby as they shall reasonably request. 

28

 

        7.02    Conditions Subsequent.    If by the 30th Business Day after the Closing Date, any of the
following shall not have occurred: 

        (a)   the
Company shall have received Equity Contributions in an aggregate amount equal to U.S.$214,971,000 which shall have been used solely to repay in full, and shall have
resulted in the repayment in full of, all outstanding Subordinated Debt; and 

        (b)   each
holder of any Subordinated Debt shall have agreed in writing to forgive all accrued but unpaid interest (and any other amounts) owing in respect of all Subordinated
Debt held by it, such that after giving effect to the repayment of Subordinated Debt referred to in clause (a) above and such forgiveness, no principal of or interest on or other amount payable
in respect of any Subordinated Debt shall be outstanding; 

then this Agreement shall be deemed to have never been entered into by the parties hereto and shall be void ab
initio and all of the terms of the Original Credit Agreement shall be deemed to have been reinstated. For the avoidance of doubt, the voiding of this Agreement as provided in
the foregoing sentence shall not affect either the repayment of Loans under the Original Credit Agreement contemplated by Section 7.01(a) hereof or the fee paid pursuant to
Section 2.02(a) hereof. 

        Section 8.    Representations and Warranties.    Each Obligor represents and warrants to the Administrative
Agent and the Lenders that: 

        8.01    Corporate Existence.    Each of the Company and the other Obligors: (a) is a  sociedad anónima or other entity
duly organized, validly existing and in good standing under the laws of Chile; (b) has all
requisite corporate or other power necessary to own its assets and carry on its business as now being or as proposed to be conducted, (c) has all material governmental licenses, authorizations,
consents and approvals necessary to own its assets and carry on its business as now being or as proposed to be conducted (except where the failure to have the same could reasonably be expected to have
a Material Adverse Effect); and (d) is qualified to do business and is in good standing in all jurisdictions in which the nature of the business conducted by it makes such qualification
necessary and where failure so to qualify could (either individually or in the aggregate) have a Material Adverse Effect. 

        8.02    Financial Condition.    The Company has heretofore furnished to each of the Lenders the consolidated balance
sheets of the Company and its Subsidiaries as at December 31, 2002 and the related consolidated statements of income, retained earnings and cash flow of the Company and its Subsidiaries for the
fiscal year ended on said date, with the opinion thereon of PricewaterhouseCoopers LLC, or any other internationally recognized independent public accounting firm, certified public accountants to the
Company. All such financial statements are complete and correct in all material respects and fairly present the consolidated financial condition of the Company and its Subsidiaries in accordance with
GAAP applied on a consistent basis. None of the Company nor any of its Subsidiaries has on the date hereof any material contingent liabilities, liabilities for taxes, material forward or long term
commitments or unrealized or anticipated losses from any unfavorable commitments, except as referred to or reflected or provided for in said balance sheets as at said dates. Since December 31,
2002, there has been no material adverse change in the consolidated financial condition, operations, business or prospects taken as a whole of the Company and its Subsidiaries from that set forth in
said financial statements as at said date. 

        8.03    Litigation.    Except as set forth in Schedule III hereto, there are no legal or arbitral proceedings
or any proceedings, or, to the knowledge of any Obligor, any investigations, by or before any governmental or regulatory authority or agency, now pending or (to the knowledge of any Obligor)
threatened against any Obligor that, if adversely determined could (either individually or in the aggregate) have a Material Adverse Effect or purport to affect in any material respect the legality,
validity or enforceability of any Basic Document. 

29

 

        8.04    No Breach.    None of the execution and delivery of this Agreement, the Notes, the other Basic Documents, the
consummation of the transactions herein and therein contemplated or compliance with the terms and provisions hereof and thereof will conflict with or result in a breach of, or require any consent
under, the charter or estatutos sociales of any Obligor, or any applicable law or regulation, or any order, writ, injunction or decree of any court or
governmental authority or agency, or any agreement or instrument to which any Obligor is a party or by which any of them or any of their Property is bound or to which any of them is subject, or
constitute a default under any such agreement or instrument, or (except for the Liens created pursuant to the Security Documents) result in the creation or imposition of any Lien upon any Property of
any Obligor pursuant to the terms of any such agreement or instrument. 

        8.05    Action.    Each Obligor has all necessary corporate power, authority and legal right to execute, deliver and
perform its obligations under such of the Basic Documents to which it is a party; the execution, delivery and performance by each Obligor of such of the Basic Documents to which it is a party have
been duly authorized by all necessary corporate action on its part (including, without limitation, any required shareholder approvals); and this Agreement has been duly and validly executed and
delivered by each Obligor and constitutes, and each of the Notes and the other Basic Documents to which it is a party when executed and delivered by such Obligor (in the case of the Notes, for value)
will constitute, its legal, valid and binding obligation, enforceable against each Obligor in accordance with its terms, except as such enforceability may be limited by bankruptcy, insolvency,
reorganization, moratorium or similar laws of general applicability affecting the enforcement of creditors' rights. 

        8.06    Approvals.    Except for the actions required by Section 7.01 hereof (all of which have been duly made,
are in full force and effect and are not subject to appeal), no authorizations, approvals or consents of, and no filings or registrations with, any governmental or regulatory authority or agency, or
any securities exchange, or any other Person are necessary for the execution, delivery or performance by any Obligor of such of the Basic Documents to which it is a party or for the legality, validity
or enforceability hereof or thereof. 

        8.07    Legal Form.    This Agreement and each other Basic Document is in proper legal form under the law of Chile for
the enforcement thereof against each Obligor under such law, and if this Agreement and each other Basic Document were stated to be governed by such law, they would constitute legal, valid and binding
obligations of each Obligor under such law, enforceable in accordance with their respective
terms; provided, however, that in order to enforce this Agreement and each other Basic Document not in
the Spanish language in Chile, such documents must be accompanied with an official translation into Spanish. All formalities required in Chile for the validity and enforceability of this Agreement and
each other Basic Document (including, without limitation, any necessary registration, recording or filing with any court or other authority in Chile) have been accomplished, and no Chilean Taxes
(other than Chilean stamp taxes described in Section 5.04(e)) are required to be paid and except as required by Section 7.01 hereof, no notarization is required, for the validity and
enforceability thereof. 

        8.08    Ranking.    This Agreement and each other Basic Document and the obligations evidenced hereby and thereby are
and will at all times be direct and unconditional general obligations of the Company and the Subsidiary Guarantors, and will at all times rank (i) in right of payment at least  pari passu with all
other Indebtedness, and all obligations under Hedge Agreements, of the Obligors, and (ii) in right of collateral security
senior to all other Indebtedness (other than any QLF and any Hedge Agreements) of the Obligors, in each case whether now existing or hereafter outstanding, subject to statutorily preferred exceptions.
There exists no Lien (including any Lien arising out of any attachment, judgment or execution), security interest or other encumbrance, nor any segregation or other preferential arrangement of any
kind, on, in or with respect to any of the Property or revenues of any Obligor, except as expressly permitted by Section 9.06 hereof. 

30

 

        8.09    Taxes.    Each of the Company and the other Obligors has filed all income tax returns and all other material
tax returns that are required to be filed by it and has paid all taxes due pursuant to such returns or pursuant to any assessment received by the Company or such Obligor. The charges, accruals and
reserves on the books of each of the Company and the other Obligors in respect of taxes and other governmental charges are, in the opinion of the Company and such Obligor, adequate. 

        8.10    Commercial Activity; Absence of Immunity.    Each Obligor is subject to civil and commercial law with respect
to its obligations under each of the Basic Documents to which it is a party. The execution, delivery and performance by each Obligor of each Basic Document to which it is a party constitute private
and commercial acts rather than public or governmental acts. None of the Obligors, nor any of their respective Properties or revenues, is entitled to any right of immunity in any jurisdiction from
suit, court jurisdiction, judgment, attachment (whether before or after judgment), set-off or execution of a judgment or from any other legal process or remedy relating to the obligations
of such Obligor under any of the Basic Documents to which it is a party. 

        8.11    Material Agreements and Liens.    

        (a)   Part A
of Schedule I hereto is a complete and correct description of all outstanding Indebtedness or Hedge Agreements of any of the Obligors (specifying
which such Indebtedness is to be repaid on the Closing Date) and Part B of Schedule I hereto is a list, as of the date of this Agreement, of each credit agreement, loan agreement,
indenture, purchase agreement, guarantee, letter of credit or other arrangement providing for or otherwise relating to any Indebtedness, Hedge Agreements or any extension of credit (or commitment for
any extension of credit) to, or guarantee by, the Company or any other Obligor (other than any such Indebtedness, Hedge Agreements or other extensions of credit to be repaid in full on the Closing
Date), and the aggregate principal or face amount outstanding or that may become outstanding under each such arrangement is correctly described in Part A of said Schedule I. 

        (b)   Part C
of Schedule I hereto is a complete and correct list, as of the date of this Agreement, of each Lien securing Indebtedness or Hedge Agreements of any
Person and covering any Property of the Company or any other Obligor (other than any Liens to be released and discharged of record on the Closing Date), and the aggregate Indebtedness or Hedge
Agreements secured (or that may be secured) by each such Lien and the Property covered by each such Lien is correctly described in Part C of said Schedule I. 

        8.12    Environmental Matters.    Each of the Company and the other Obligors has obtained all environmental, health
and safety permits, licenses and other authorizations required under all Environmental Laws to carry on its business as now being or as proposed to be conducted, except to the extent failure to have
any such permit, license or authorization would not (either individually or in the aggregate) have a Material Adverse Effect. Each of such permits, licenses and authorizations is in full force and
effect and each of the Company and the other Obligors is in compliance with the terms and conditions thereof, and is also in compliance with all other limitations, restrictions, conditions, standards,
prohibitions, requirements, obligations, schedules and timetables contained in any applicable Environmental Law or in any regulation, code, plan, order, decree, judgment, injunction, notice or demand
letter issued, entered, promulgated or approved thereunder, except to the extent failure to comply therewith would not (either individually or in the aggregate) have a Material Adverse Effect. 

        8.13    Capitalization.    As of the date of this Agreement, the authorized capital stock of the Company consists of
shares of common stock, no par value, each of which shares is duly and validly issued and outstanding, is free and clear of any Liens (other than Liens created pursuant to the Basic Documents) and
will be fully paid and nonassessable. As of the date of this Agreement, approximately 67% of such issued and outstanding shares are owned beneficially and of record by United Chile
Ventures, Inc. (or such lesser percentage as shall represent the number of shares owned by United Chile Ventures, Inc. after giving effect to any Closing Date Equity made by a Person
acceptable to the 

31

 

Majority
Lenders) and approximately 33% of such issued and outstanding shares are owned beneficially and of record by United Chile, Inc. (or such lesser percentage as shall represent the number
of shares owned by United Chile, Inc. after giving effect to any Closing Date Equity made by a Person acceptable to the Majority Lenders). Except as set forth on Schedule V hereto,
(x) there are no outstanding Equity Rights with respect to the Company and (y) there are no outstanding obligations of the Company or any other Obligor to repurchase, redeem, or
otherwise acquire any shares of capital stock of the Company. 

        8.14    Subsidiaries, Etc.    

        (a)   Set
forth in Part A of Schedule II hereto is a complete and correct list, as of the date of this Agreement of all of the Subsidiaries of the Company,
together with, for each such Subsidiary, (i) the jurisdiction of organization of such Subsidiary, (ii) each Person holding ownership interests in such Subsidiary and (iii) the
nature of the ownership interests held by each such Person and the percentage of ownership of such Subsidiary represented by such ownership interests. Except as disclosed in Part A of
Schedule II hereto, (x) each of the Company and the other Obligors owns, free and clear of Liens, and has the unencumbered right to vote, all outstanding ownership interests in each
Person shown to be held by it in Part A of Schedule II hereto, (y) all of the issued and outstanding capital stock of each such Person organized as a corporation is validly
issued, fully paid and nonassessable and (z) there are no outstanding Equity Rights with respect to such Person. 

        (b)   Set
forth in Part B of Schedule II hereto is a complete and correct list, as of the date of this Agreement, of all Investments (other than Investments
disclosed in Part A of said Schedule II hereto) held by the Company or any other Obligor in any Person and, for each such Investment, (x) the identity of the Person or Persons
holding such Investment and (y) the nature of such Investment. Except as disclosed in Part B of Schedule II hereto, each of the Company and the other Obligors owns, free and clear
of all Liens, all such Investments. 

        (c)   None
of the Subsidiary Guarantors is subject to any indenture, agreement, instrument or other arrangement of the type described in Section 9.18(b) hereof. 

        (d)   On
the date hereof, each of the Stock Pledgors is a Wholly Owned Subsidiary of UGC. 

        8.15    Properties and Assets.    None of the Obligors has any interests in any real property except for the property
described in Part A of Schedule IV hereto. None of the Obligors owns any material personal property (including equipment, satellite dishes and wire networks) except for the property
described in Part B of Schedule IV hereto. None of the Obligors is party to any material contracts, agreements or other arrangements except for those described in Schedules I and II
hereto and those described in Part C of Schedule IV hereto, and none of the Obligors is in default of any of its material obligations under any of such contracts, agreements or other
arrangements. Each of the Obligors owns, free and clear of all Liens (other than the Liens permitted pursuant to Section 9.06), has good and marketable title to and enjoys peaceful and
undisturbed possession of, or holds pursuant to valid leaseholds, all material Properties that are necessary for the operation and conduct of their respective businesses as conducted on the date
hereof. 

        8.16    True and Complete Disclosure.    The information, reports, financial statements, exhibits and schedules
furnished in writing by or on behalf of the Obligors to the Administrative Agent or any Lender in connection with the negotiation, preparation or delivery of this Agreement and the other Basic
Documents or included herein or therein or delivered pursuant hereto or thereto, when taken as a whole do not contain any untrue statement of fact or omit to state any fact necessary to make the
statements herein or therein, in light of the circumstances under which they were made, not misleading in any material respects. All written information furnished after the date hereof by the Company
and the other Obligors to the Administrative Agent and the Lenders in connection with this Agreement and the other Basic Documents and the transactions contemplated hereby and thereby will be true, 

32

 

complete
and accurate in every material respect, or (in the case of projections) based on good faith estimates, on the date as of which such information is stated or certified. There is no fact known
to the Company or any other Obligor that could have a Material Adverse Effect that has not been disclosed herein, in the other Basic Documents or in a report, financial statement, exhibit, schedule,
disclosure letter or other writing furnished to the Lenders for use in connection with the transactions contemplated hereby or thereby. 

        8.17    Investment Holding Company Act.    None of the Obligors is an "investment company," or a company "controlled"
by an "investment company," within the meaning of the United States Investment Company Act of 1940, as amended. 

        8.18    Use of Credit.    None of the Obligors is engaged principally, or as one of its important activities, in the
business of extending credit for the purpose, whether immediate, incidental or ultimate, of buying or carrying Margin Stock, and no part of the proceeds of any extension of credit hereunder will be
used to buy or carry Margin Stock, as that term is used in Regulation U and Regulation X of the Board of Governors of the Federal Reserve System. 

        8.19    Solvency.    Each of the Obligors has sufficient cash flow to enable it to pay its debts as they mature and
has not defaulted in the payment of any of its obligations. 

        8.20    Ownership of Collateral.    Each of the Obligors is the sole and beneficial owner of the Collateral and no
Lien exists or will exist upon the Collateral at any time (and no right or option to acquire the same exists in favor of any Person), except for the Liens created in favor of the Administrative Agent,
any QLF Lenders and any counterparties to Hedge Agreements under the Security Documents, and except for Liens (junior, except as otherwise provided for by applicable law, to the Liens created under
the Security Documents) permitted by Section 9.06 hereof. 

        8.21    Liens, etc.    Each Lien created by the Security Documents constitutes a valid and perfected Lien on the
Property intended to be covered thereby (other than any immaterial items of Property) in favor of the Administrative Agent and any QLF Lenders, free and clear of all other Liens (other than Liens
permitted under Section 9.06 hereof); and none of the Basic Documents has been terminated or ceased to be in full force and effect, and none of the Obligors has contested the enforceability of
any thereof. 

        Section 9.    Covenants of the Obligors.    Each Obligor covenants and agrees with the Lenders and the
Administrative Agent that, so long as any Loan is outstanding and until payment in full of all amounts payable by the Company hereunder: 

        9.01    Financial Statements, Etc.    The Company shall deliver to each of the Lenders: 

        (a)   as
soon as available and in any event within 45 days after the end of each of the first three quarterly fiscal periods of each fiscal year of the Company, 

        (x)   a
consolidated statement of income, retained earnings and cash flow of the Company and its Subsidiaries for such period and for the period from the beginning of the
respective fiscal year to the end of such period, and the related consolidated balance sheets of the Company and its Subsidiaries as at the end of such period, setting forth in each case (A) a
reconciliation to generally accepted accounting principles in the United States of America, and (B) in comparative form (i) the corresponding figures for the corresponding periods in the
preceding fiscal year, and (ii) the corresponding figures for the corresponding periods from the financial projections previously delivered to the Administrative Agent, accompanied by a
certificate of a senior financial officer of the Company, which certificate shall state that said financial statements fairly present the financial condition and results of operations of the Company
and its Subsidiaries, in each case in accordance with generally accepted accounting 

33

 

principles
in Chile, consistently applied, as at the end of, and for, such period (subject to normal year end audit adjustments), 

        (y)   a
consolidated statement of revenue of each of the Company's internet operations ("Internet Operations"), the Company's
telephony operations ("Telephony Operations") and the Company's cable operations ("Cable Operations")
for such period, together with information setting forth gross margins, subscribers, churn, net additions, revenue per unit and Capital Expenditures for such period for Internet Operations, Telephony
Operations and Cable Operations, and 

        (z)   a
report setting forth, for each of the Northern, Southern, Santiago and Central Regions of Chile, for each Obligor, the number of Telephony Subscribers, the number
(reasonably approximated in accordance with industry standards) of homes and apartments passed by telephony systems, in each case as at the beginning of such period and as at the end of such period, 

        (b)   as
soon as available and in any event within 90 days after the end of each fiscal year of the Company, 

        (x)   a
consolidated statement of income, retained earnings and cash flow of the Company and its Subsidiaries for such fiscal year and the related consolidated balance sheets
of the Company and its Subsidiaries as at the end of such fiscal year, setting forth in each case (A) a reconciliation to generally accepted accounting principles in the United States of
America, and (B) in comparative form (i) the corresponding consolidated figures for the preceding fiscal year, and (ii) the corresponding figures from the financial projections
previously delivered to the Administrative Agent, and accompanied by an opinion thereon of independent certified public accountants of recognized international standing, which opinion shall state that
said consolidated financial statements fairly present the consolidated financial condition and results of operations of the Company and its Subsidiaries as at the end of, and for, such fiscal year in
accordance with generally accepted accounting principles in Chile, and a certificate of such accountants stating that, in making the examination necessary for their opinion, they obtained no
knowledge, except as specifically stated, of any Default, and 

        (y)   a
consolidated statement of revenue of each of the Company's Internet Operations, the Company's Telephony Operations and the Company's Cable Operations for such period,
together with information setting forth gross margins, subscribers, churn, net additions, revenue per unit and Capital Expenditures for such period for Internet Operations, Telephony Operations and
Cable Operations; 

        (c)   as
soon as available and in any event within 30 days after the end of each month, a report setting forth, separately for each Obligor, 

        (x)   the
number of Internet Subscribers, Cable Subscribers and Telephony Subscribers, the number (reasonably approximated in accordance with industry standards) of homes and
apartments passed by internet, cable and telephony systems, the number of such Cable Subscribers subscribing for basic service and the number subscribing for premium services, and the number of
Internet Subscribers and Telephony Subscribers, respectively, who are also Cable Subscribers, in each case as at the beginning of such period and as at the end of such period, 

        (y)   the
number of Internet Subscribers, Cable Subscribers and Telephony Subscribers installed, disconnected and reconnected during such month, and 

        (z)   a
consolidated statement of revenue of each of the Company's Internet Operations, the Company's Telephony Operations and the Company's Cable Operations for such period, 

34

 

together
with information setting forth gross margins, revenue per unit and Capital Expenditures for such period for Internet Operations, Telephony Operations and Cable Operations; 

        (d)   promptly
upon their becoming available, copies of all reports or other filings, if any, that the Company have filed or made with any governmental agency or securities
exchange; 

        (e)   promptly
after the Company knows or has reason to believe that any Default has occurred, a notice of such Default describing the same in reasonable detail and, together
with such notice or as soon thereafter as possible, a description of the action that the Company has taken or proposes to take with respect thereto; 

        (f)    as
soon as practicable and on the earlier of (x) 15 days after the commencement of each fiscal year and (y) approval by the board of directors of
UGC of the budget for such fiscal year, the budget for the Company and its Subsidiaries for such fiscal year prepared on a monthly basis in such detail as shall be satisfactory to the Required
Lenders; and 

        (g)   from
time to time such other information regarding the financial condition, operations, business or prospects of the Company or any of its Subsidiaries as any Lender or
the Administrative Agent may reasonably request. 

The
Company will furnish to each Lender, at the time it furnishes each set of financial statements pursuant to paragraph (a) or (b) above, a certificate of a senior financial officer of
the Company in substantially the form of Exhibit C hereto (i) to the effect that no Default has occurred and is continuing (or, if any Default has occurred and is continuing, describing
the same in reasonable detail and describing the action that the Company has taken or proposes to take with respect thereto) and (ii) setting forth in reasonable detail the computations
necessary to determine whether the Company is in compliance with Sections 9.07, 9.08, 9.10, 9.11, 9.12 and 9.13 hereof as of the end of the respective quarterly fiscal period or fiscal year. 

        9.02    Litigation.    The Company will promptly give to each Lender notice of all legal or arbitral proceedings, and
of all proceedings by or before any governmental or regulatory authority or agency, and any material development in respect of such legal or other proceedings, affecting the Company or any of its
Subsidiaries, except proceedings that, if adversely determined, would not (either individually or in the aggregate) have a Material Adverse Effect and would not purport to affect, to any material
extent, the legality, validity or enforceability of any of the Basic Documents. 

        9.03    Existence, Etc.    Each of the Company and the other Obligors will: 

        (a)   preserve
and maintain its legal existence and all of its material rights, privileges, licenses and franchises, including,
without limitation, the Telecommunications License and such other telecommunications and cable licenses and permits of the Obligors as necessary for them to engage in the business of providing cable
television and direct-to-home broadcasting services in Chile, but excluding any that are transferred to another Obligor or are
made redundant in connection with a merger permitted under Section 9.05 hereof; 

        (b)   comply
with the requirements of all applicable laws, rules, regulations and orders of governmental or regulatory authorities (including, without limitation, any laws or
regulations relating to employee pensions and employee other benefits and all Environmental Laws) if failure to comply with such requirements could (either individually or in the aggregate) have a
Material Adverse Effect; 

        (c)   pay
and discharge all taxes, assessments and governmental charges or levies imposed on it or on its income or profits or on any of its Property prior to the date on
which penalties attach thereto, except for any such tax, assessment, charge or levy the payment of which is being 

35

 

contested
in good faith and by proper proceedings and against which adequate reserves are being maintained; 

        (d)   maintain
all of its Properties used or useful in its business in good working order and condition, ordinary wear and tear excepted; 

        (e)   keep
adequate records and books of account, in which complete entries will be made in accordance with generally accepted accounting principles in Chile consistently
applied; and 

        (f)    permit
representatives of any Lender or the Administrative Agent, at its own cost and expense, during normal business hours, to examine, copy and make extracts from its
books and records (other than documents to which the Company or the relevant Subsidiary is required, pursuant to an agreement with a third party, to maintain confidential), to inspect any of its
Properties, and to discuss its business and affairs with its officers and with its independent public accountants, all to the extent reasonably requested by such Lender or the Administrative Agent (as
the case may be). 

        9.04    Insurance.    Each of the Company and the other Obligors will maintain insurance with financially sound and
reputable insurance companies, and with respect to Property and risks of a character usually maintained by corporations engaged in Chile in the same or similar business similarly situated, against
loss, damage and liability of the kinds and in the amounts customarily maintained by such corporations. The Obligors shall provide that all policies of insurance covering any tangible Property of any
of the Obligors entered into after the date hereof are promptly delivered to the Agent, duly endorsed to the Agent for the benefit of the Lenders. 

        9.05    Prohibition of Fundamental Changes.    

        (a)   Neither
the Company nor any other Obligor will enter into any transaction of merger or consolidation or amalgamation, or liquidate, wind up or dissolve itself (or suffer
any liquidation or dissolution). 

        (b)   Neither
the Company nor any other Obligor will acquire any material business or Property from, or capital stock of, or be a party to any acquisition of, any Person,
except for purchases of inventory and other Property to be sold or used in the ordinary course of business, Investments permitted under Section 9.08 hereof, and Capital Expenditures permitted
under Section 9.10 hereof. 

        (c)   Neither
the Company nor any other Obligor will convey, sell, lease, transfer or otherwise dispose of, in one transaction or a series of transactions, all or a
substantial part of its business or Property, whether now owned or hereafter acquired (including, without limitation, receivables and leasehold interests). Neither the Company nor any other Obligor
will make any Disposition of any of its Property, whether now owned or hereafter acquired, (x) for less than its fair market value (as determined in good faith by a senior financial officer of
the Company) and (y) unless the proceeds thereof are applied to prepay Loans to the extent required by Section 2.07(b) hereof. 

        (d)   Notwithstanding
the foregoing provisions of this Section 9.05: 

        (i)    any
Subsidiary of the Company may be merged or consolidated with or into: (i) the Company if the Company shall be the continuing or surviving corporation or
(ii) any other such Subsidiary; and 

        (ii)   any
Subsidiary of the Company may sell, lease, transfer or otherwise dispose of any or all of its Property (upon voluntary liquidation or otherwise and whether or not
for fair market value) to the Company or a Wholly Owned Subsidiary of the Company. 

36

   
        9.06    Limitation on Liens.    Neither the Company nor any other Obligor will create, incur, assume or suffer to
exist any Lien upon any of its Property, whether now owned or hereafter acquired, except: 

        (a)   Liens
created pursuant to the Security Documents; 

        (b)   Liens
securing any QLF or any Hedge Agreement, so long as each such Lien is subject to an intercreditor agreement as set forth in Section 9.20(c) hereof; 

        (c)   Liens
in existence on the date hereof and listed in Part B of Schedule I hereto; 

        (d)   Liens
imposed by any governmental authority for taxes, assessments, customs duties or charges not yet due or that are being contested in good faith and by appropriate
proceedings if adequate reserves with respect thereto are maintained on the books of the Company or the affected Subsidiaries, as the case may be, in accordance with GAAP; 

        (e)   carriers',
warehousemen's, mechanics', materialmen's, repairmen's or other like Liens arising in the ordinary course of business that are not overdue for a period of
more than 30 days or that are being contested in good faith and by appropriate proceedings and Liens securing judgments but only to the extent for an amount and for a period not resulting in an
Event of Default under Section 10(i) hereof; 

        (f)    pledges
or deposits under worker's compensation, unemployment insurance and other social security legislation; 

        (g)   deposits
to secure the performance of bids, trade contracts (other than for Indebtedness), leases, statutory obligations, surety and appeal bonds, performance bonds and
other obligations of a like nature incurred in the ordinary course of business; 

        (h)   easements,
rights-of-way, restrictions and other similar encumbrances incurred in the ordinary course of business and encumbrances consisting of
zoning restrictions,
easements, licenses, restrictions on the use of Property or minor imperfections in title thereto that, in the aggregate, are not material in amount, and that do not in any case materially detract from
the value of the Property subject thereto or interfere with the ordinary conduct of the business of the Company or any of its Subsidiaries; and 

        (i)    Liens
upon real and/or tangible personal Property acquired after the date hereof (by purchase, construction or otherwise) by the Company or any of its Subsidiaries, each
of which Liens either (A) existed on such Property before the time of its acquisition and was not created in anticipation thereof or (B) was created solely for the purpose of securing
Indebtedness representing, or incurred to finance, refinance or refund, the cost (including the cost of construction) of such Property; provided that
(i) no such Lien shall extend to or cover any Property of the Company or such Subsidiary other than the Property so acquired and improvements thereon and (ii) the principal amount of
Indebtedness secured by any such Lien shall at no time exceed 80% of the fair market value (as determined in good faith by a senior financial officer of the Company) of such Property at the time it
was acquired (by purchase, construction or otherwise); 

provided, that in no event shall the Company or any other Obligor create, incur, assume or suffer to exist any Lien upon the Telecommunications License
other than in favor of the Lenders, the QLF Lenders and counterparties under Hedge Agreements. 

        9.07    Indebtedness.    Neither the Company nor any other Obligor will, nor will it permit any of its Subsidiaries
to, create, incur or suffer to exist any Indebtedness except: 

        (a)   Indebtedness
to the Lenders hereunder; 

        (b)   Qualified
Local Financings that are either (i) entered into pursuant to Section 9.21 hereof, or (ii) otherwise approved by the Majority Lenders; 

37

 

        (c)   Indebtedness
outstanding on the date hereof and listed in Part A of Schedule I hereto; 

        (d)   additional
Indebtedness of the Company and its Subsidiaries in an aggregate amount not to exceed U.S.$5,000,000 outstanding at any time (or the equivalent in other
currencies); 

        (e)   Subordinated
Debt for no longer than 30 Business Days following the Closing Date; and 

        (f)    Indebtedness
of Subsidiaries of the Company to the Company or to other Subsidiaries of the Company and Indebtedness of the Company to any of its Subsidiaries. 

        9.08    Investments.    Neither the Company nor any other Obligor will make or permit to remain outstanding any
Investments except: 

        (a)   Investments
outstanding on the date hereof and identified in Part B of Schedule II hereto; 

        (b)   operating
deposit accounts with banks; 

        (c)   Permitted
Investments; 

        (d)   Investments
by the Company in any Subsidiary Guarantor; 

        (e)   Investments
by the Company and its Subsidiaries in capital stock of Subsidiaries of the Company to the extent outstanding on the date of the financial statements of the
Company and its Subsidiaries referred to in Section 8.02 hereof and advances by the Company and its Subsidiaries to Subsidiaries of the Company in the ordinary course of business; 

        (f)    Hedge
Agreements entered into pursuant to Section 9.15 hereof; and 

        (g)   additional
Investments to the extent that the consideration therefor consists solely of capital stock of the Company or any of its Affiliates, so
long as (i) the market value of all such capital stock used for all such Investments shall not exceed, in the aggregate, U.S.$25,000,000, (ii) the net operating
income (calculated before taxes and interest expense) plus depreciation and amortization, of the Person in which such Investment is made for the most recently ended four-quarter period is
a positive number, (iii) such Investments are made in Chilean entities, (iv) such Investments are in the lines of business described in Section 9.16 hereof; (v) the Company
grants the Administrative Agent a first priority perfected Lien upon any equity interest held or acquired in respect of such Investments and (vi) after giving effect thereto, there would be no
Default under Section 10(j) hereof. 

Each
of the Obligors agrees that it shall, upon request from the Administrative Agent (at the direction of the Majority Lenders) during the continuance of any Event of Default, immediately remit all
of the funds in all deposit accounts that it maintains with banks to, or upon the order of, the Administrative Agent. 

        9.09    Restricted Payments.    

        (a)   None
of the Company's Subsidiaries, other than any Subsidiary Guarantor, will purchase or otherwise acquire any shares of any class of stock of the Company or any
warrants, options or other rights to acquire the same. 

        (b)   Neither
the Company nor any other Obligor will pay any management, advisory, consulting or other similar fees to any Affiliate,  provided that (i) management fees may be accrued (but not paid in cash) and
(ii) reimbursements for reasonable expenses required to be
made under the Management Agreements may be paid. Any such accrued and unpaid management fees shall be subordinated to the prior payment in full of the Loans under this Agreement. 

        (c)   Neither
the Company nor any other Obligor will make any payment in respect of any Subordinated Debt, except as contemplated by Section 7.02 hereof. 

38

 

        9.10    Capital Expenditures.    The Company will not permit the aggregate amount of Capital Expenditures by the
Company and its Subsidiaries to exceed, for each fiscal year ending on the respective dates set forth below, the sum of (a) the aggregate amount of Equity Contributions received during such
fiscal year to the extent that the proceeds thereof are used to finance Capital Expenditures, plus (b) the respective amounts set forth below
opposite such date: 

	Fiscal Year End
 
	 	Amount

	December 31, 2003	 	U.S.$	37,500,000
	December 31, 2004	 	U.S.$	42,800,000
	December 31, 2005	 	U.S.$	38,600,000
	December 31, 2006	 	U.S.$	32,400,000

The
Company agrees that, if in any fiscal year the Company makes Capital Expenditures pursuant to the foregoing clause (a) in an aggregate amount in excess of U.S.$20,000,000, the Company
shall, promptly after having received the corresponding Equity Contributions, furnish to each of the Lenders a reasonably detailed plan (using the "New CapEx Categories" set forth in the National
Cable & Telecommunications Association's Standard Reporting Categories or other reasonable categories) setting forth the Capital Expenditures that it has made and intends to make during such
fiscal year. 

        9.11    Total Debt to EBITDA Ratio.    The Company will not permit the Total Debt to EBITDA Ratio, as at the last day
of any fiscal quarter of the Company, to exceed the ratio set forth below opposite the period in which such day occurs: 

	Period
 
	 	Ratio

	Closing Date to June 29, 2003	 	3.50 to 1
	June 30, 2003 to September 29, 2003	 	3.00 to 1
	September 30, 2003 to December 30, 2003	 	2.75 to 1
	December 31, 2003 to March 30, 2004	 	2.50 to 1
	March 31, 2004 to June 29, 2004	 	2.25 to 1
	June 30, 2004 to September 29, 2004	 	2.00 to 1
	September 30, 2004 to December 30, 2004	 	1.75 to 1
	December 31, 2004 to March 30, 2005	 	1.50 to 1
	March 31, 2005 and at all times thereafter	 	1.00 to 1

        9.12    CADS to Adjusted Debt Service Ratio.    The Company will not permit the CADS to Adjusted Debt Service Ratio,
as at the last day of any fiscal quarter of the Company, to be less than the ratio set forth below opposite the period in which such day occurs: 

	Period
 
	 	Ratio

	Closing Date to December 30, 2003	 	1.45 to 1
	December 31, 2003 to March 30, 2004	 	1.65 to 1
	March 31, 2004 to March 30, 2006	 	1.10 to 1
	March 31, 2006 and thereafter	 	1.60 to 1

39

 

        9.13    Interest Coverage Ratio.    The Company will not permit the Interest Coverage Ratio, as at the last day of any
fiscal quarter of the Company, to be less than the ratio set forth below opposite the period in which such day occurs: 

	Period
 
	 	Ratio

	Closing Date to June 29, 2003	 	3.50 to 1
	June 30, 2003 to September 29, 2003	 	3.75 to 1
	September 30, 2003 to December 30, 2003	 	4.50 to 1
	December 31, 2003 to June 29, 2004	 	4.75 to 1
	June 30, 2004 to September 29, 2004	 	5.50 to 1
	September 30, 2004 and all periods thereafter	 	6.00 to 1

        9.14    Governmental Approvals.    Each Obligor agrees that it will promptly obtain from time to time at its own
expense all such governmental licenses, authorizations, consents, permits and approvals as may be required for such Obligor to (a) comply with its obligations, and preserve its rights under,
each Basic Document and (b) maintain the existence, priority and perfection of the Liens purported to be created under the Security Documents, in each case, except to the extent the same would
not have a Material Adverse Effect. Without in any way limiting the foregoing, the Obligors will cause each Pledge Without Conveyance delivered pursuant to the Agreement to Grant a Pledge Without
Conveyance to be duly published in the Diario Oficial de la Republica de Chile within 30 days after the execution and delivery thereof. 

        9.15    Hedge Agreements.    The Company may (but shall not be required to), at any time and from time to time, enter
into one or more Hedge Agreements, provided, however, that (a) at no time shall the aggregate notional principal amount of all Indebtedness of
the Company and its Subsidiaries covered by Hedge Agreements in respect of interest rate risks exceed 100% of the aggregate notional principal amount of the aggregate Indebtedness of the Company and
its Subsidiaries, (b) at no time shall the aggregate notional amount of all Indebtedness of the Company and its Subsidiaries covered by Hedge Agreements in respect of foreign exchange risks
exceed 100% of the aggregate notional principal amount of the aggregate Indebtedness, programming expenses and Capital Expenditures of the Company and its Subsidiaries denominated in a currency other
than Pesos (provided that the Company shall use commercially reasonable efforts to enter into foreign exchange Hedging Agreements that are unsecured),
and (c) prior to entering into any such Hedge Agreement the Company shall furnish to the Administrative Agent such documents as the Administrative Agent may reasonably request to create and
perfect a Lien in favor of the Lenders on the Company's rights thereunder. 

        9.16    Lines of Business.    Neither the Company nor any other Obligor will engage in any line or lines of business
activity other than the business of providing video, voice and data services. 

        9.17    Transactions with Affiliates.    Except as expressly permitted by this Agreement, neither the Company nor any
other Obligor will directly or indirectly: (a) make any Investment in an Affiliate; (b) transfer, sell, lease, assign or otherwise dispose of any Property to an Affiliate;
(c) merge into or consolidate with or purchase or acquire Property from an Affiliate; or (d) enter into any other transaction directly or indirectly with or for the benefit of an
Affiliate (including, without limitation, Guarantees and assumptions of obligations of an Affiliate); provided that (x) any Affiliate who is an
individual may serve as a director, officer or employee of the Company or any of its Subsidiaries and receive reasonable compensation for his or her services in such capacity and (y) the
Company and its Subsidiaries may enter into transactions with Affiliates if the monetary or business consideration arising therefrom and the other terms thereof would be substantially as advantageous
to the Company and its Subsidiaries as the monetary or business consideration and other terms that it would obtain in a comparable transaction with a Person not an Affiliate. 

40

 

        9.18    Certain Obligations in Respect of Subsidiaries.    

        (a)   Each
of the Company and any other Obligor will take such action from time to time as shall be necessary to ensure that each of its Subsidiaries is a Wholly Owned
Subsidiary (provided that up to 0.01% of the capital stock of any Subsidiary Guarantor may be held, directly or indirectly, by UGC). 

        (b)   Each
Obligor (other than the Company) will not, after the date of this Agreement, enter into any indenture, agreement, instrument or other arrangement that, directly or
indirectly, prohibits or restrains, or has the effect of prohibiting or restraining, or imposes materially adverse conditions upon, the incurrence or payment of Indebtedness, the granting of Liens,
the declaration or payment of dividends, the making of loans, advances or Investments or the sale, assignment, transfer or other disposition of Property. 

        (c)   Each
of the Company and the other Obligors will take such action from time to time as shall be necessary to ensure that all Subsidiaries of the Company are Subsidiary
Guarantors and, thereby, "Obligors" hereunder. Without limiting the generality of the foregoing, in the event that the Company or any other Obligor
shall form or acquire any new Subsidiary, the Company or the respective Obligor will cause such new Subsidiary to become a "Subsidiary Guarantor" (and, thereby, an "Obligor") hereunder pursuant to a
written instrument in form and substance satisfactory to each Lender and the Administrative Agent, to become a party to each Security Document (and to do such things as may be necessary so that its
Properties are subject to the Lien of the Security Documents and its capital stock is subject to the Lien of the Stock Pledge Agreement) and to deliver such proof of corporate action, incumbency of
officers, opinions of counsel and other documents as is consistent with those delivered by each Obligor pursuant to Section 7.01 hereof upon the Closing Date or as any Lender or the
Administrative Agent shall have requested. 

        (d)   Each
of the Obligors will take such action from time to time as shall be necessary to ensure that all of the capital stock of each Obligor shall be subject to the Lien
of the Stock Pledge Agreement. Without limiting the generality of the foregoing, in the event that any Person shall acquire any capital stock of the Company, the Company will cause such Person to
become a party to the Stock Pledge Agreement (and it will thereupon become a "Stock Pledgor" hereunder) pursuant to a written instrument in form and substance satisfactory to the Administrative Agent
and its Chilean counsel, and to deliver such proof of corporate action, incumbency of officers, opinions of counsel and other documents as is consistent with those delivered by each Stock Pledgor
pursuant to Section 7.01 hereof upon the Closing Date or as the Administrative Agent and its Chilean counsel shall have requested. 

        9.19    Insurance.    The Company and the other Obligors agree that, subject to the Lenders' rights with respect to
insurance proceeds during the continuance of any Default, they will use the proceeds of any policy of insurance covering tangible Property of the Obligors to repair or replace the property in respect
of which such proceeds were received reasonably promptly (but in no event later than six months) after receipt of such proceeds. 

        9.20    Post-Closing Collateral Matters.    

        (a)   Pole Lease Agreements—The Company agrees that at all times there shall be duly executed and delivered, duly
notarized by a notary public in Chile, and duly consented to by the applicable lessors, Conditional Assignments (duly executed and delivered and duly notarized and duly consented to by the applicable
lessors) covering leaseholds that represent pole rental agreements covering the services provided to at least 80% of the total number of Cable Subscribers. 

        (b)   Telephony Switch Property Leases and Fiber Optic Leases—The Company agrees that, 

        (i)    It
will maintain any telephony switches of the Company and its Subsidiaries, together with all equipment and other Property relating or necessary to operate such
telephony switches, on real property owned in fee by the Company or any such Subsidiary ("Owned Switch Property") or on 

41

 

real
property leased from a Person other than VTR Larga Distancia S.A. ("Leased Switch Property"). 

        (ii)   To
the extent that any Owned Switch Property is not subject to a Real Property Mortgage, the Company will (w) concurrently with the acquisition of such Owned
Switch Property, deliver to the Administrative Agent a Real Property Mortgage in respect of such Owned Switch Property, duly executed and delivered by the Company or such Subsidiary, and duly
notarized by a notary public in Chile, (x) by no later than 15 days after the date of such Real Property Mortgage, deliver such Real Property Mortgage to the applicable  conservador de bienes
raíces in Chile, (y) by no later than 30 days after the date of such Real Property Mortgage, furnish
to the Administrative Agent a certificate of such conservador de bienes raíces in Chile to the effect that the Liens created by such Real
Property Mortgage have been duly registered in each public registry in Chile in which such registration is necessary to perfect the security interest purported to be granted by such mortgage, and
(z) concurrently therewith, furnish to the Lenders opinions of Chilean counsel, in form and substance satisfactory to the Administrative Agent, as to the perfection and priority of the Liens
purported to be created thereby. 

        (iii)  To
the extent that any Leased Switch Property is not subject to a conditional assignment of rights (cesión condicional de
derechos), the Company will (x) concurrently with the execution of the lease agreement in respect of such Leased Switch Property, cause to be duly executed and
delivered, duly authorized by a notary public in Chile, and duly consented to by the applicable lessors, a conditional assignment of rights (cesión condicional
de derechos) covering such lease agreement, and (y) concurrently therewith, furnish to the Lenders opinions of Chilean counsel, in form and substance satisfactory to the
Administrative Agent, as to the perfection and priority of the Liens purported to be created thereby. 

        (iv)  Neither
the Company nor any of its Subsidiaries shall extend or renew the term of any of the VTR Larga Distancia Lease Agreements. If the Company or any Subsidiary
Guarantor is a party to or enters into any lease agreement in respect of fiber optic cables or other fiber optic equipment or services (other than a VTR Larga Distancia Lease Agreement), on and at all
times after the date of such lease agreement, it will have caused there to be duly executed and delivered, duly notarized by a notary public in Chile, and duly consented to by the applicable lessors,
a conditional assignment of rights (cesión condicional de derechos) covering such lease agreement. Concurrently therewith, the Company
shall furnish to the Lenders opinions of Chilean counsel, in form and substance satisfactory to the Administrative Agent, as to the perfection and priority of the Liens purported to be created
thereby. 

        (c)   Intercreditor Arrangements—The Lenders and the Administrative Agent agree that, in connection with any QLF
and any Hedge Agreement entered into by the Company, they shall, upon the request of the Company, enter into an intercreditor agreement, reasonably satisfactory to the Company, the Majority Lenders,
and the QLF Lenders and Hedge Agreement counterparties, as applicable, with the Company, the applicable QLF Lenders or the counterparty to such Hedge Agreement (as the case may be) to provide that, as
between the Lenders and the Administrative Agent, and such QLF Lenders or such Hedge Agreement counterparty, their respective Liens on the Collateral shall be pari
passu in all respects. Such intercreditor agreement shall provide that any realization with respect to any of the Collateral shall require a vote of the Lenders, any QLF
Lenders and Hedge Agreement counterparties, representing at least a majority of the aggregate principal amount of the loans, notes or bonds (and in the case of Hedge Agreement counterparties, the
amount of the applicable termination payment) held by them. 

        (d)   Further Assurances—The Company agrees that from time to time, at the expense of the Company, the Company
will, and will cause each of the other Obligors to, promptly execute and deliver all further instruments and documents, and take all further action, that may be reasonably necessary or 

42

 

desirable,
or that the Administrative Agent may reasonably request, in order to perfect and protect the assignments, security interests and Liens granted or purported to be granted under the Basic
Documents or to enable the Administrative Agent or any Lender to exercise and enforce its rights and remedies under this Agreement or any other Basic Document with respect to any Collateral. Without
limiting the generality of the foregoing, the Company will, and will cause each of the other Obligors to: 

        (i)    authorize
such financing or continuation statements, or amendments thereto, and such other instruments or notices, as may be reasonably necessary or desirable, or as the
Administrative Agent may reasonably request, in order to perfect and preserve the assignments, security interests and Liens granted or purported to be granted under the Basic Documents; and 

        (ii)   furnish
to the Administrative Agent, from time to time at the Administrative Agent's request, statements and schedules further identifying and describing the Collateral
and such other reports in connection with the Collateral as the Administrative Agent may reasonably request, all in reasonable detail. 

With
respect to the foregoing and the grant of the security interest under the Basic Documents, the Company and each of the other Obligors hereby authorize the Administrative Agent to file one or more
financing or continuation statements, and amendments thereto, relative to all or any part of the Collateral without the signature of the Company or any such Obligor where permitted by law. 

        9.21    Qualified Local Financing.    Each of the Company, the Administrative Agent and each of the Lenders agrees as
follows: 

        (a)    Engagement of Chilean Rating Agency.    Within 15 days after the Closing Date, the Company will engage a
Chilean Rating Agency for the purpose of rating senior secured debt obligations of the Company (any such rating by a Chilean Rating Agency, a "Debt
Rating") in accordance with clause (b) below. 

        (b)    Obtaining a Rating.    The Company will do each of the following: 

        (i)    upon
the earlier of the following (the "First Request Date"): 

        (A)  the
Company determining that is reasonably likely to obtain a Debt Rating of 'A-' or better, and promptly notifying the Administrative Agent, and 

        (B)  the
reasonable request of the Administrative Agent or the Majority Lenders, 

the
Company shall: 

        (x)   use
commercially reasonable efforts to obtain a Debt Rating no later than 60 days after the First Request Date, and 

        (y)   furnish
to the Administrative Agent, no later than 65 days after the First Request Date, a written report stating whether a Debt Rating was obtained and, if such
Debt Rating is less than 'A-', the reasons therefore (to the extent provided by the applicable Chilean Rating Agency); 

        (ii)   in
the event that the Company receives a Debt Rating that is lower than an 'A-' (or if the Company receives a Debt Rating of 'A-' or better that
is subsequently downgraded to lower than 'A-'), then at the reasonable request of the Administrative Agent or the Majority Lenders from time to time thereafter (each, a
"Subsequent Request"), the Company shall: 

        (x)   use
commercially reasonable efforts to obtain a new Debt Rating by no later than 30 days after the date of such Subsequent Request
(provided that the Company shall have no obligation to obtain more than one Debt Rating in any one fiscal quarter and, subject to clause (y)
below, shall have no obligation to obtain a new Debt Rating unless 

43

 

the
Company shall have prepared new financial statements that were not the basis for the immediately prior Debt Rating), 

        (y)   if
so requested by the Administrative Agent or the Majority Lenders, select a Chilean Rating Agency other than the one used in connection with the First Request Date,
and 

        (z)   furnish
to the Administrative Agent, no later than 40 days after each Subsequent Request, a written report stating whether a Debt Rating was obtained and, if such
Debt Rating is less than 'A-', the reasons therefore (to the extent provided by the applicable Chilean Rating Agency); and 

        (iii)  promptly
after any date (a "QLF Rating Date") on which the Company receives a Debt Rating of 'A-' or
better, the Company will notify the Lenders of the receipt of such Debt Rating; and 

        (iv)  for
purposes of clauses (i) and (ii) above, "commercially reasonable efforts" shall include cooperating with the relevant Chilean Rating Agency as reasonably
requested by such Chilean Rating Agency, and making members of its senior management available for meetings with such Chilean Rating Agency. 

        (c)    Commencement of QLF Process.    The Company shall use commercially reasonable efforts to do each of the
following: 

        (i)    by
no later than 60 days after each Commencement Date, obtain written proposals from prospective lead arrangers or underwriters (which lead arrangers or
underwriters shall be reasonably satisfactory to the Company) to structure a Qualified Local Financing, and furnish copies of the same to each of the Lenders (provided that the compensation terms are
not required to be disclosed), 

        (ii)   promptly
after the receipt thereof, consult with the Administrative Agent and the Lenders about the respective terms and conditions of each such proposal, 

        (iii)  promptly
after such consultations, request that the Majority Lenders give their preliminary written approval to one or more such proposals that contain Acceptable
Terms (and each Lender agrees to provide (or advise that it cannot provide such approval) no later than 14 days after receipt of the Company's written request therefor), 

        (iv)  promptly
after receipt of such preliminary approvals, request binding written commitments with respect to one or more of the proposals that have Acceptable Terms with
respect to which the Majority Lenders have given preliminary approval, 

        (v)   by
no later than 90 days after the Commencement Date, obtain binding written commitments (subject to customary conditions) with respect to each proposal referred
to in clause (iii) above (any such commitment that has Acceptable Terms, a "Commitment"), 

        (vi)  promptly
thereafter, notify the Lenders which Commitment the Company intends to accept (an "Accepted QLF"); 

        (vii) obtain
from the Majority Lenders (or, if required by Section 12.05 hereof, all of the Lenders), any existing QLF Lenders, and the counterparties to any Hedge
Agreement, (x) an irrevocable written consent to any modifications required by the lenders or investors that will participate in the Accepted QLF as a condition to the closing of such Accepted
QLF, and (y) an intercreditor agreement contemplated by Section 9.20(c) hereof (collectively, the "Required Modifications"); and 

        (viii) promptly
after obtaining all Required Modifications, accept the Accepted QLF. 

44

 

        (d)    Consummation of QLF.    If the Company shall have obtained a Commitment and the Required Modifications within
90 days of such Commencement Date (the date on which both such Commitment and such Required Modifications have been obtained is referred to as the "Relevant
Date" for such Accepted QLF), then the Company shall use commercially reasonable efforts to consummate such Accepted QLF by no later than 30 days after such Relevant
Date (or, if the agent or underwriter with respect to such Accepted QLF shall recommend a longer period of time, such longer period of time). 

        (e)    Increase in Applicable Margin.    If each of the following conditions are satisfied: 

        (i)    the
Company shall have defaulted in the performance of its obligations under this Section 9.21, and 

        (ii)   no
Market Change shall have occurred during the period commencing on the applicable Commencement Date and ending on the date 120 days thereafter (or such later
date in accordance with the terms of Section 9.21(d) hereof), 

then, during the period commencing on the first date that the Company shall have defaulted in the performance of its obligations under this
Section 9.21 (but not earlier than the applicable Relevant Date) and ending on the date of the consummation of a QLF, the "Applicable Margin" shall be increased to a rate per annum equal to the
"Applicable Margin" as provided in Section 1.01 hereof plus 4.00%; provided that, if the Company
shall have defaulted in the performance of its obligations under Section 9.21(a), (b) or (c) hereof and a Market Change shall occur during the period commencing on the date of such default and
ending on the date 150 days after the QLF Rating Date or relevant QLF Rating Date Anniversary, as applicable (or such later date in accordance with the terms of Section 9.21(d) hereof),
the "Applicable Margin" shall be reduced, effective as of the later of (i) the date of such Market Change and (ii) the applicable Relevant Date, to the rate provided for in
Section 1.01 hereof. 

        (f)    Amount of QLF.    Any QLF commenced by the Company shall be in the following amounts: 

        (i)    with
respect to the first Qualified Local Financing that is consummated, an aggregate principal amount at least equal to U.S.$60,000,000; and 

        (ii)   with
respect to each subsequent Qualified Local Financing, an aggregate principal amount at least equal to U.S.$30,000,000. 

        9.22    Limitation on Amendments to QLF Documentation.    The Company will not consent to any modification, supplement
or waiver of any of the provisions of the documentation for any QLF without the prior approval of the Administrative Agent, except any such modification, supplement or waiver that would not reasonably
be expected to materially adversely effect the interests of the Lenders hereunder. 

        Section 10.    Events of Default.    If one or more of the following events (herein called
"Events of Default") shall occur and be continuing: 

        (a)   The
Company shall default in the payment when due (whether at stated maturity or at mandatory or optional prepayment) of any principal of, or interest on, any Loan or
any other amount payable by it hereunder or under any other Basic Document; or 

        (b)   Any
Relevant Party shall default in the payment when due (beyond any applicable grace or cure period) of any principal of or interest on any of its other Indebtedness
aggregating U.S.$5,000,000 (or the equivalent in other currencies) or more, or in the payment when due (beyond any applicable grace or cure period) of any amount under any Hedge Agreement aggregating
U.S.$5,000,000 (or the equivalent in other currencies) or more; or any event specified 

45

 

in
any note, agreement, indenture or other document evidencing or relating to any such Indebtedness aggregating U.S.$5,000,000 (or the equivalent in other currencies) or more, or any event specified
in any Hedge Agreement aggregating U.S.$5,000,000 (or the equivalent in other currencies) or more shall occur if the effect of such event is to cause, or (after the expiration of any applicable cure
period) to permit the holder or holders of such Indebtedness (or a trustee or agent on behalf of such holder or holders) to cause, such Indebtedness to become due, or to be prepaid in full (whether by
redemption, purchase, offer to purchase or otherwise), prior to its stated maturity (except to the extent that, in the case of any Indebtedness representing the purchase price of equipment where there
is a dispute between an Obligor and the vendor of such equipment, the holder of such Indebtedness has been indefinitely stayed from exercising any right or remedy with respect to such Indebtedness)
or, in the case of an Hedge Agreement, to permit the payments owing under such Hedge Agreement to be liquidated; or 

        (c)   Any
representation, warranty or certification made or deemed made herein or in any other Basic Document (or in any modification or supplement hereto or thereto) by any
Relevant Party, or any certificate furnished to any Lender or the Administrative Agent pursuant to the provisions hereof or thereof, shall prove to have been false or misleading as of the time made or
furnished in any material respect; or 

        (d)   The
Company or any other Obligor shall default in the performance of any of its obligations under any of Sections 9.01(e), 9.05, 9.06, 9.07, 9.08, 9.09, 9.10,
9.11, 9.12, 9.13, 9.15 or 9.20 hereof; or any Relevant Party shall default in the performance of any of its other obligations in this Agreement or any other Basic Document (other than
Section 9.21 hereof) and such default shall continue unremedied for a period of fourteen or more days after notice thereof to the Company by the Administrative Agent or any Lender (through the
Administrative Agent); or 

        (e)   The
Company shall declare or make any Dividend Payment at any time; or 

        (f)    Any
Relevant Party shall admit in writing its inability to, or be generally unable to, pay its debts as such debts become due; or 

        (g)   Any
Relevant Party shall (i) apply for or consent to the appointment of, or the taking of possession by, a receiver, custodian, trustee, examiner or liquidator of
itself or of all or a substantial part of its Property, (ii) make a general assignment for the benefit of its creditors, (iii) commence a voluntary case under any applicable law relating
to bankruptcy or insolvency, (iv) file a petition seeking to take advantage of any other law relating to bankruptcy, insolvency, reorganization, liquidation, dissolution, arrangement or
windingup, or composition or readjustment of debts (except as expressly contemplated by and pursuant to Section 9.05 hereof), (v) fail to controvert in a timely and appropriate manner,
or acquiesce in writing to, any petition filed against it in an involuntary case under any applicable law relating to bankruptcy or insolvency or (vi) take any corporate action for the purpose
of effecting any of the foregoing; or 

        (h)   A
proceeding or case shall be commenced, without the application or consent of the affected Relevant Party, in any court of competent jurisdiction, seeking
(i) its reorganization, liquidation, dissolution, arrangement or windingup, or the composition or readjustment of its debts, (ii) the appointment of a receiver, custodian, trustee,
examiner, liquidator or the like of such Relevant Party or of all or any substantial part of its Property, or (iii) similar relief in respect of such Relevant Party under any law relating to
bankruptcy, insolvency, reorganization, windingup, or composition or adjustment of debts, and such proceeding or case shall continue undismissed, or a court order, judgment or decree approving or
ordering any of the foregoing shall be entered and continue unstayed and in effect, for a period of 60 or more days (each Lender agreeing to respond within ten Business Days to any request by the
Company for an extension of this grace period (without any obligation on the part of any Lender to so consent)); or a court order for relief 

46

 

against
any Relevant Party shall be entered in an involuntary case under any applicable law relating to bankruptcy or insolvency; or 

        (i)    (i) A
final judgment or judgments for the payment of money for which the amount is in excess of U.S.$5,000,000 (or the equivalent in other currencies), exclusive
of judgment amounts fully covered by insurance, or the amount is in excess of U.S.$20,000,000 (or the equivalent in other currencies), regardless of insurance coverage, in the aggregate shall be
rendered by one or more courts, administrative tribunals or other bodies having jurisdiction against any Relevant Party and the same shall not be discharged (or provision shall not be made for such
discharge), vacated, bonded or a stay of execution thereof shall not be procured, within 30 days from the date of entry thereof and such Relevant Party shall not, within said period of
30 days, or such longer period during which execution of the same shall have been stayed, appeal therefrom and cause the execution thereof to be stayed during such appeal; or (ii) any
non-monetary judgment or order shall be rendered against the Company or any of the other Obligors that could reasonably be expected to have a Material Adverse Effect, and there shall be
any period of 15 consecutive days during which a stay of enforcement of such judgment or order, by reason of a pending appeal or otherwise, shall not be in effect; or 

        (j)    any
of the following: 

        (x)   either
(A) UGC shall cease to own beneficially and control (either directly or indirectly) at least 51% of the issued and outstanding capital stock or other
equity interests (or securities convertible into equity interests) in the Company having the right to vote, or at least 51% of all of the issued and outstanding capital stock or other equity interests
(or securities convertible into equity interests) in the Company, or (B) UGC shall cease to have the power (whether by ownership of capital stock, contract or otherwise) to control the
management or policies of the Company, 

        (y)   any
Person or two or more Persons acting in concert shall have entered into a contract or arrangement that, upon consummation, will result in one or more of the events
described in clause (x) above (unless such contract or agreement is conditioned upon such transaction being permitted under this Agreement), or 

        (z)   any
of the shares of capital stock or other equity interests (or securities convertible into equity interests) of the Company held by any Stock Pledgor shall be subject
to any Lien (other than Liens created in favor of the Lenders and any QLF Lenders under the Basic Documents); or 

        (k)   The
Liens created by the Security Documents shall at any time not constitute a valid and perfected Lien on the Property intended to be covered thereby (other than any
immaterial items of Property) in favor of the Lenders, free and clear of all other Liens (other than Liens permitted under Section 9.06 hereof), or, the Lenders shall cease to have a valid and
perfected first priority Lien on 100% of the issued and outstanding capital stock of, or other equity interests in, any Obligor, or, except for expiration in accordance with its terms, any of the
Basic Documents shall for whatever reason be terminated or cease to be in full force and effect, or the enforceability thereof shall be contested by any Relevant Party; or 

        (l)    Any
license, consent, authorization, registration or approval at any time necessary to enable any Relevant Party to comply with any of its obligations under this
Agreement or any other Basic Document shall be revoked, withdrawn or withheld or shall be modified or amended, which revocation, withdrawal, withholding, modification or amendment could reasonably be
expected to have a Material Adverse Effect; or 

        (m)  Any
governmental authority shall take any action to condemn, seize, nationalize or appropriate any substantial portion of the Property of the Obligors (either with or
without 

47

 

payment
of compensation) or shall take any action which materially adversely affects any Relevant Party's ability to perform its obligations under this Agreement or any of the other Basic Documents;
or the Company or any Subsidiary Guarantor shall be prevented from exercising normal control over all or a substantial part of its Property; or 

        (n)   Chile
or any competent authority thereof shall declare a moratorium on the payment of Indebtedness by Chile or any governmental agency or authority thereof or
corporations therein, or Chile shall cease to be a member in good standing of the International Monetary Fund or shall cease to be eligible to utilize the resources of the International Monetary Fund
under the Articles of Agreement thereof, or the international monetary reserves of Chile shall become subject to any Lien; or 

        (o)   Any
event, circumstance or condition shall have occurred that has had a Material Adverse Effect; provided that a default by the Company in the performance of its
obligations under Section 9.21 shall be deemed to not have caused a Material Adverse Effect; or 

        (p)   Any
Obligor shall make any principal payment in respect of any of the Indebtedness described in Section 9.07(c) or 9.07(d) during the continuance of any Default
in respect of Sections 9.11, 9.12 and 9.13 hereof; or 

        (q)   By
the 45th Business Day after the Closing Date, to the extent that any shares of the Company are not subject to the Stock Pledge Agreement on such date
(including, without limitation, any shares issued in connection with the Equity Contributions referred to in Section 7.02(a) hereof), the Administrative Agent shall not have received
(i) additional stock pledge agreements (substantially in the form of the Stock Pledge Agreement) covering such shares, and (ii) an opinion of Walkers, Cayman Islands counsel to the
Obligors, substantially in the form of Exhibit B-4 hereto (and each Obligor hereby instructs such counsel to deliver such opinion to the Lenders and the Administrative Agent); or 

        (r)   By
the 45th Business Day after the Closing Date, the Administrative Agent shall not have received, with respect to each Conditional Assignment, a written
ratification from each electricity distribution company (or any other Person acting as lessor under the pole rental agreements) in respect thereof, of the extension thereof contemplated by
Section 7.01(c)(iv) hereof; 

THEREUPON:
(1) in the case of any Event of Default other than one referred to in clause (g) or (h) of this Section 10, the Administrative Agent may, and, if so requested by the
Majority Lenders, shall, by notice to the Company, declare the principal amount then outstanding of, and the accrued interest on, the Loans and all other amounts payable by the Obligors hereunder and
under the Notes (including, without limitation, any amounts payable under Section 5.05 hereof) to be forthwith due and payable, whereupon such amounts shall be immediately due and payable
without presentment, demand, protest or other formalities of any kind, all of which are hereby expressly waived by each Obligor; and (2) in the case of the occurrence of an Event of Default
referred to in clause (g) or (h) of this Section 10, the principal amount then outstanding of, and the accrued interest on, the Loans and all other amounts payable by the Obligors
hereunder and under the Notes (including, without limitation, any amounts payable under Section 5.05 hereof) shall automatically become immediately due and payable without presentment, demand,
protest or other formalities of any kind, all of which are hereby expressly waived by each Obligor. 

        Section 11.    The Administrative Agent.    

        11.01    Appointment, Powers and Immunities.    Each Lender hereby irrevocably appoints and authorizes the
Administrative Agent to act as its agent hereunder and under the other Basic Documents with such powers as are specifically delegated to the Administrative Agent by the terms of this Agreement and of
the other Basic Documents, together with such other powers as are reasonably incidental thereto. The Administrative Agent (which term as used in this sentence and in Section 11.05 

48

 

and
the first sentence of Section 11.06 hereof shall include reference to its affiliates and its own and its affiliates' officers, directors, employees and agents): (a) shall have no
duties or responsibilities except those expressly set forth in this Agreement and in the other Basic Documents, and shall not by reason of this Agreement or any other Basic Document be a trustee for
any Lender; (b) shall not be responsible to the Lenders for any recitals, statements, representations or warranties contained in this Agreement or in any other Basic Document, or in any
certificate or other document referred to or provided for in, or received by any of them under, this Agreement or any other Basic Document, or for the value, validity, effectiveness, genuineness,
enforceability or sufficiency of this Agreement, any Note or any other Basic Document or any other document referred to or provided for herein or therein or for any failure by the Company or any other
Person to perform any of its obligations hereunder or thereunder; (c) shall not be required to initiate or conduct any litigation or collection proceedings hereunder or under any other Basic
Document; and (d) shall not be responsible for any action taken or omitted to be taken by it hereunder or under any other Basic Document or under any other document or instrument referred to or
provided for herein or therein or in connection herewith or therewith, except for its own gross negligence or willful misconduct. The Administrative Agent may employ agents and
attorneys-in-fact and shall not be responsible for the negligence or misconduct of any such agents or attorneys-in-fact selected by it in good faith.
The Administrative Agent may deem and treat the payee of any Note as the holder thereof for all purposes hereof unless and until a notice of the assignment or transfer thereof shall have been filed
with the Administrative Agent. 

        11.02    Reliance by Administrative Agent.    The Administrative Agent shall be entitled to rely upon any
certification, notice or other communication (including, without limitation, any thereof by telephone, facsimile, telex, telegram or cable) believed by it to be genuine and correct and to have been
signed or sent by or on behalf of the proper Person or Persons, and upon advice and statements of legal counsel, independent accountants and other experts selected by the Administrative Agent. As to
any matters not expressly provided for by this Agreement or any other Basic Document, the Administrative Agent shall in all cases be fully protected in acting, or in refraining from acting, hereunder
or thereunder in accordance with instructions given by the Majority Lenders or, if provided herein, in accordance with the instructions given by all of the Lenders and such instructions of such
Lenders and any action taken or failure to act pursuant thereto shall be binding on all of the Lenders. 

        11.03    Defaults.    The Administrative Agent shall not be deemed to have knowledge or notice of the occurrence of a
Default unless the Administrative Agent has received notice from a Lender or the Company specifying such Default and stating that such notice is a "Notice of Default". In the event
that the Administrative Agent receives such a notice of the occurrence of a Default, the Administrative Agent shall give prompt notice thereof to the Lenders. The Administrative Agent shall (subject
to Section 11.07 hereof) take such action with respect to such Default as shall be directed by the Majority Lenders provided that, unless and
until the Administrative Agent shall have received such directions, the Administrative Agent may (but shall not be obligated to) take such action, or refrain from taking such action, with respect to
such Default as it shall deem advisable in the best interest of the Lenders except to the extent that this Agreement expressly requires that such action be taken, or not be taken, only with the
consent or upon the authorization of the Majority Lenders or all of the Lenders. 

        11.04    Rights as a Lender.    With respect to any Loan made by The Toronto-Dominion Bank or any of its affiliates,
The Toronto-Dominion Bank or such affiliate (as the case may be) shall have the same rights and powers hereunder as any other Lender and may exercise the same as though TD were not acting as the
Administrative Agent, and the term "Lender" or "Lenders" shall, unless the context otherwise indicates, include The Toronto-Dominion Bank. The Toronto-Dominion Bank or such affiliates, as the case may
be, may (without having to account therefor to any Lender) accept deposits from, lend money to, make investments in and generally engage in any kind of banking or other business with the Obligors (and
any of their Subsidiaries or Affiliates) as if TD were not acting as the Administrative Agent, and The Toronto-Dominion Bank and its affiliates may accept fees and other consideration from the
Obligors for services in connection with this Agreement or otherwise without having to account for the same to the Lenders. 

49

   
        11.05    Indemnification.    The Lenders agree to indemnify the Administrative Agent (to the extent not reimbursed
under Section 12.03 hereof, but without limiting the obligations of the Company under said Section 12.03) ratably in accordance with the aggregate principal amount of the Loans held by
the Lenders, for any and all liabilities, obligations, losses, damages, penalties, actions, judgments, suits, costs, expenses or disbursements of any kind and nature whatsoever that may be imposed on,
incurred by or asserted against the Administrative Agent (including by any Lender) arising out of or by reason of any investigation in or in any way relating to or arising out of this Agreement or any
other Basic Document or any other documents contemplated by or referred to herein or therein or the transactions contemplated hereby or thereby (including, without limitation, the costs and expenses
that the Company is obligated to pay under Section 12.03 hereof but excluding, unless a Default has occurred and is continuing, normal administrative costs and expenses incident to the
performance of its agency duties hereunder) or the enforcement of any of the terms hereof or thereof or of any such other documents, provided that no Lender shall be liable for any of the foregoing to
the extent they arise from the gross negligence or willful misconduct of the party to be indemnified. 

        11.06    Non-Reliance on Administrative Agent and Other Lenders.    Each Lender agrees that it has,
independently and without reliance on the Administrative Agent or any other Lender, and based on such documents and information as it has deemed appropriate, made its own credit analysis of the
Company and its Subsidiaries and decision to enter into this Agreement and that it will, independently and without reliance upon the Administrative Agent or any other Lender, and based on such
documents and information as it shall deem appropriate at the time, continue to make its own analysis and decisions in taking or not taking action under this Agreement or under any other Basic
Document. The Administrative Agent shall not be required to keep itself informed as to the performance or observance by any Obligor of this Agreement or any of the other Basic Documents or any other
document referred to or provided for herein or therein or to inspect the Properties or books of the Company or any of its Subsidiaries. Except for notices, reports and other documents and information
expressly required to be furnished to the Lenders by the Administrative Agent hereunder or under the Security Documents, the Administrative Agent shall not have any duty or responsibility to provide
any Lender with any credit or other information concerning the affairs, financial condition or business of the Company or any of its Subsidiaries (or any of their affiliates) that may come into the
possession of the Administrative Agent or any of its affiliates. 

        11.07    Failure to Act.    Except for action expressly required of the Administrative Agent hereunder and under the
other Basic Documents, the Administrative Agent shall in all cases be fully justified in failing or refusing to act hereunder and thereunder unless it shall receive further assurances to its
satisfaction from the Lenders of their indemnification obligations under Section 11.05 hereof against any and all liability and expense that may be incurred by it by reason of taking or
continuing to take any such action. 

        11.08    Resignation or Removal of Administrative Agent.    Subject to the appointment and acceptance of a successor
Administrative Agent as provided below, the Administrative Agent may resign at any time by giving notice thereof to the Lenders and the Company, and the Administrative Agent may be removed at any time
with or without cause by the Majority Lenders. Upon any such resignation or removal, the Majority Lenders shall have the right to appoint a successor Administrative Agent. If no successor
Administrative Agent shall have been so appointed by the Majority Lenders and shall have accepted such appointment within 30 days after the retiring Administrative Agent's giving of notice of
resignation or the Majority Lenders' removal of the retiring Administrative Agent, then the retiring Administrative Agent may, on behalf of the Lenders, appoint a successor Administrative Agent, that
shall be a financial institution that has an office in New York, New York. Upon the acceptance of any appointment as Administrative Agent hereunder by a successor Administrative Agent, such successor
Administrative Agent shall thereupon succeed to and become vested with all the rights, powers, privileges and duties of the retiring Administrative Agent, and the retiring Administrative 

50

 

Agent
shall be discharged from its duties and obligations hereunder. After any retiring Administrative Agent's resignation or removal hereunder as Administrative Agent, the provisions of this
Section 11 shall continue in effect for its benefit in respect of any actions taken or omitted to be taken by it while it was acting as the Administrative Agent. 

        11.09    Consents under Other Basic Documents.    Except as otherwise provided in Section 12.05 hereof with
respect to this Agreement, the Administrative Agent may, with the prior consent of the Majority Lenders (but not otherwise), consent to any modification, supplement or waiver under any of the Basic
Documents, provided that, without the prior consent of each Lender, the Administrative Agent shall not (except as provided herein or in the Security
Documents) release any collateral or otherwise terminate any Lien under any Basic Document providing for collateral security, or agree to additional obligations being secured by such collateral
security. 

        Section 12.    Miscellaneous.    

        12.01    Waiver.    No failure on the part of the Administrative Agent or any Lender to exercise and no delay in
exercising, and no course of dealing with respect to, any right, power or privilege under this Agreement or any Note shall operate as a waiver thereof, nor shall any single or partial exercise of any
right, power or privilege under this Agreement or any Note preclude any other or further exercise thereof or the exercise of any other right, power or privilege. The remedies provided herein are
cumulative and not exclusive of any remedies provided by law. 

        12.02    Notices.    All notices, requests and other communications provided for herein and under the Security
Documents (including, without limitation, any modifications of, or waivers, requests or consents under, this Agreement) shall be given or made in writing (including, without limitation, by facsimile)
delivered to the intended recipient at the "Address for Notices" specified below its name on the signature pages hereof (below the name of the Company, in the case of any Subsidiary Guarantor); or, as
to any party, at such other address as shall be designated by such party in a notice to each other party. Except as
otherwise provided in this Agreement, all such communications shall be deemed to have been duly given when transmitted by facsimile or personally delivered or, in the case of a mailed notice, upon
receipt, in each case given or addressed as aforesaid. 

        12.03    Expenses.    The Company agrees to pay or reimburse each of the Lenders and the Administrative Agent for: 

        (a)   all
reasonable out-of-pocket costs and expenses of the Administrative Agent (including, without limitation, the reasonable fees and expenses of
Mayer, Brown, Rowe & Maw, special New York counsel to the Administrative Agent, and Philippi, Yrarrázaval, Pulido y Brunner, special Chilean counsel to the Administrative Agent)
in connection with (i) the negotiation, preparation, execution and delivery of this Agreement and the other Basic Documents and (ii) the negotiation or preparation of any modification,
supplement or waiver of any of the terms of this Agreement or any of the other Basic Documents (whether or not consummated). 

        (b)   all
reasonable out-of-pocket costs and expenses of each of the Lenders and the Administrative Agent (including, without limitation, the
reasonable fees and expenses of legal counsel) in connection with (i) any Default and any enforcement or collection proceedings resulting therefrom, including, without limitation, all manner of
participation in or other involvement with (x) bankruptcy, insolvency, receivership, foreclosure, winding up or liquidation proceedings, (y) judicial or regulatory proceedings and
(z) workout, restructuring or other negotiations or proceedings (whether or not the workout, restructuring or transaction contemplated thereby is consummated) and (ii) the enforcement of
this Section 12.03; and 

        (c)   all
transfer, stamp, documentary or other similar taxes, assessments or charges levied by any governmental or revenue authority in respect of this Agreement or any of
the other Basic Documents or any other document referred to herein or therein and all costs, expenses, taxes, 

51

 

assessments
and other charges incurred in connection with any filing, registration, recording or perfection of any security interest contemplated by any Basic Document or any other document referred
to therein. 

        12.04    Indemnification.    The Company hereby agrees to indemnify the Administrative Agent and each Lender and their
respective affiliates, directors, officers, employees, attorneys and agents from, and hold each of them harmless against, any and all losses, liabilities, claims, damages or expenses incurred by any
of them (including, without limitation, any and all losses, liabilities, claims, damages or expenses incurred by the Administrative Agent to any Lender, whether or not the Administrative Agent or any
Lender is a party thereto) arising out of or by reason of any investigation or litigation or other proceedings (including any threatened investigation or litigation or other proceedings) relating to
the Loans hereunder, any actual or proposed use by the Company or any of its Subsidiaries of the proceeds
of any of the Loans hereunder or any Environmental Laws or any Environmental Claim, including, without limitation, the reasonable fees and disbursements of counsel incurred in connection with any such
investigation or litigation or other proceedings (but excluding any such losses, liabilities, claims, damages or expenses incurred by reason of the gross negligence or willful misconduct of the Person
to be indemnified). Each of the Obligors agrees that it will not assert any claim against the Administrative Agent, any Lender, any of their respective affiliates, or any of their, or their respective
affiliates', respective directors, officers, employees, attorneys and agents, on any theory of liability for special, consequential or punitive damages arising out of or otherwise relating to any of
the transactions contemplated herein or in any other Basic Document. 

        12.05    Amendments, Etc.    Except as otherwise expressly provided in this Agreement, any provision of this Agreement
may be modified or supplemented only by an instrument in writing signed by the Company and the Majority Lenders, or by the Company and the Administrative Agent acting with the consent of the Majority
Lenders, and any provision of this Agreement may be waived by the Majority Lenders or by the Administrative Agent acting with the consent of the Majority Lenders;  provided that: 

        (a)   no
modification, supplement or waiver shall, unless by an instrument signed by all of the Lenders or by the Administrative Agent acting with the consent of all of the
Lenders: (i) extend the date fixed for the payment of principal of or interest on any Loan or any fee hereunder, (ii) reduce the amount of any such payment of principal,
(iii) reduce the rate at which interest is payable thereon (other than in connection with an increase in the interest rate pursuant to Section 9.21(e) hereof) or any fee is payable
hereunder, (iv) alter the rights or obligations of the Company to prepay Loans, (v) alter the terms of Section 4.02 or this Section 12.05, (vi) modify the definition
of the term "Majority Lenders" or the term "Required Lenders", or modify in any other manner the number or percentage of the Lenders required to make any determinations or waive any rights hereunder
or to modify any provision hereof (including the requirement set forth in Section 11.09 hereof), or (vii) release any Subsidiary Guarantor from its obligations under Section 6
hereof; 

        (b)   any
modification or supplement of Section 11 hereof shall require the consent of the Administrative Agent; and 

        (c)   any
modification or supplement of Section 6 hereof shall require the consent of each Subsidiary Guarantor. 

        12.06    Successors and Assigns.    This Agreement shall be binding upon and inure to the benefit of the parties
hereto and their respective successors and permitted assigns. 

        12.07    Assignments and Participations.    

        (a)   No
Obligor may assign any of its rights or obligations hereunder or under the Notes without the prior consent of all of the Lenders, the Administrative Agent and the
Central Bank of Chile. 

52

 

        (b)   Each
Lender may assign any of its Loans and its Notes to any Eligible Assignee (or during an Event of Default, any Person);  provided that (i) any such partial assignment shall be in an amount at least
equal to U.S.$3,000,000 (or, with respect to assignments among
Lenders, U.S.$1,000,000); (ii) each such assignee Lender shall be a bank or registered as a financial institution with the Central Bank of Chile; and (iii) each such partial assignment
by a Lender of any of its Loans and Notes shall be made in such manner so that the same portion of its Loans and Notes are assigned to the respective assignee. Upon execution and delivery by the
assignee to the Company and the Administrative Agent of an instrument in writing pursuant to which such assignee agrees to become a "Lender" hereunder (if not already a Lender) having the Loan
specified in such instrument, and the assignee shall have, to the extent of such assignment (unless otherwise provided in such assignment with the consent of the Company and the Administrative Agent,
such consents not to be unreasonably withheld or delayed), the obligations, rights and benefits of a Lender hereunder holding the Loan (or portions thereof) assigned to it (in addition to the Loan, if
any, theretofore held by such assignee) and the assigning Lender shall, to the extent of such assignment, be released from the Loan (or portion thereof) so assigned, but shall be entitled to
indemnification and other rights under this Agreement and the other Basic Documents with respect to the period prior to the date of such assignment. Upon each such assignment the assigning Lender
shall pay the Administrative Agent an assignment fee of U.S.$3,500. The Company agrees to cause any assignment made pursuant to this Section 12.07(b) to be notified to the Central Bank of Chile
pursuant to, and in accordance with, the applicable provisions of Chapter XIV of the Foreign Exchange Rules of the Central Bank of Chile. 

        (c)   A
Lender may sell or agree to sell to one or more other Persons a participation in all or any part of any Loan held by it, in which event each purchaser of a
participation (a "Participant") shall be entitled to the rights and benefits of the provisions of Section 9.03(f) hereof with respect to its
participation in such Loan as if (and the Company shall be directly obligated to such Participant under such provisions as if) such Participant were a "Lender" for purposes of said Section, but,
except as otherwise provided in Section 4.07(c) hereof with respect to participations purchased pursuant to Section 4.07 (b) hereof, shall not have any other rights or benefits
under this Agreement or any Note or any other Basic Document (the Participant's rights against such Lender in respect of such participation to be those set forth in the agreements executed by such
Lender in favor of the Participant). All amounts payable by the Company to any Lender under Section 5 hereof in respect of any Loan held by it, shall be determined as if such Lender had not
sold or agreed to sell any participations in such Loan, and as if such Lender were funding each of such Loan in the same way that it is funding the portion of such Loan in which no participations have
been sold. In no event shall a Lender that sells a participation agree with the Participant to take or refrain from taking any action hereunder or under any other Basic Document except that such
Lender may agree with the Participant that it will not, without the consent of the Participant, agree to (i) extend the date fixed for the payment of principal of or interest on the Loan or any
portion of any fee hereunder payable to the Participant, (ii) reduce the amount of any such payment of principal, (iii) reduce the rate at which interest is payable thereon, or any fee
hereunder payable to the Participant, to a level below the rate at which the Participant is entitled to receive such interest or fee, (iv) alter the rights or obligations of the Company to
prepay the Loans or (v) consent to
any modification, supplement or waiver hereof or of any of the other Basic Documents to the extent that the same, under Section 11.09 or 12.05 hereof, requires the consent of each Lender. 

        (d)   Notwithstanding
anything in this Agreement to the contrary (including any other provision regarding assignments, participations, transfers or novations), any Lender (a
"Granting Lender") may, without the consent of any other party hereto, grant to a special purpose funding vehicle (whether a corporation, partnership,
limited liability company, trust or otherwise, an "SPV") sponsored or managed by the Granting Lender or any affiliate thereof identified to 

53

 

Borrower
as such, a participation in all or any part of any existing or future advances hereunder that such Granting Lender has made or will make pursuant to this Agreement;  provided that (i) such Granting
Lender's obligations under this Agreement shall remain unchanged, (ii) such Granting Lender shall remain
the holder of the Notes for all purposes under this Agreement and (iii) the Company, Administrative Agent and other Lenders shall continue to deal solely and directly with such Granting Lender
in connection with such Granting Lender's rights and obligations under this Agreement. 

        (e)   Each
party hereto hereby agrees that (i) no SPV will be entitled to any rights or benefits that a Participant would not otherwise be entitled to under this
Agreement and (ii) an SPV may assign its interest in any existing or future advances hereunder to any entity that would constitute a Participant. In furtherance of the foregoing, each party
hereto hereby agrees (which agreement shall survive the termination of this Agreement) that prior to the date that is one year and one day after the payment in full of all outstanding commercial paper
or other senior indebtedness of any SPV, it will not institute against, or join any other Person in instituting against, such SPV any bankruptcy, reorganization, arrangement, insolvency or liquidation
proceedings under the laws of the United States or any state thereof, other than as a holder of a security or other debt instrument of such SPV. 

        (f)    Notwithstanding
anything in this Agreement to the contrary, the Granting Lender and any SPV may, without the consent of any other party hereto, and without limiting any
other rights of disclosure of the Granting Lender under this Agreement, disclose on a confidential basis any non-public information relating to its funding of advances to (i) (in
the case of the Granting Lender) any actual or prospective SPV in accordance with Section 12.17(vi) hereof, (ii) (in the case of an SPV) its lenders, sureties, reinsurers,
guarantors or credit liquidity enhancers, and their respective directors, officers, and advisors and (iii) any rating agency. This section may not be amended without the written consent of
Borrower and each Lender. 

        (g)   In
addition to the assignments and participations permitted under the foregoing provisions of this Section 12.07, any Lender may (without notice to the Company,
the Administrative Agent or any other Lender and without payment of any fee) (i) assign and pledge all or any portion of its Loan and its Note to any Federal Reserve Bank as collateral security
pursuant to Regulation A and any Operating Circular issued by such Federal Reserve Bank, and (ii) assign all or any portion of its rights under this Agreement and its Loan and its Note
to an affiliate, so long as such assignee is a bank or a foreign financial institution considered as such for purposes of Article 59 No 1 of the income tax law of Chile.
No such assignment shall release the assigning Lender from its obligations hereunder, provided that each such assignment by a Lender of its loan shall
have the prior authorization of the Central Bank of Chile. 

        (h)   A
Lender may furnish any information concerning the Company or any of its Subsidiaries in the possession of such Lender from time to time to assignees and participants
(including prospective assignees and participants), provided that such assignee or participant shall have agreed, pursuant to its customary
confidentiality agreement, to keep such information confidential. 

        (i)    Anything
in this Section 12.07 to the contrary notwithstanding, no Lender may assign or participate any interest in any Loan held by it hereunder to the Company
or any of its Affiliates or Subsidiaries without the prior consent of each Lender. 

        12.08    Survival.    The obligations of the Company under Sections 5.01, 5.04, 5.05, 12.03 and 12.04 hereof, the
obligations of each Subsidiary Guarantor under Sections 6.03 and 6.04 hereof, the obligations of the Lenders under Section 11.05 hereof, and the provisions of Sections 12.11, 12.12, 12.13,
12.14 and 12.15 shall survive the repayment of the Loans. In addition, each representation and warranty made, or deemed to be made by a notice of any Loan, herein or pursuant hereto shall survive the
making of such representation and warranty, and no Lender shall be deemed to have waived, by 

54

 

reason
of having made any Loan, any Default that may arise by reason of such representation or warranty proving to have been false or misleading, notwithstanding that such Lender or the Administrative
Agent may have had notice or knowledge or reason to believe that such representation or warranty was false or misleading at the time such Loan was made. 

        12.09    Captions; Integration.    The table of contents and captions and section headings appearing herein are
included solely for convenience of reference and are not intended to affect the interpretation of any provision of this Agreement. This Agreement, the Notes and the other Basic Documents constitute
the entire understanding among the parties hereto with respect to the subject matter hereof and supersede any agreements, written or oral, with respect thereto, entered into prior to the date of this
Agreement. 

        12.10    Counterparts.    This Agreement may be executed in any number of counterparts, all of which taken together
shall constitute one and the same instrument and any of the parties hereto may execute this Agreement by signing any such counterpart. 

        12.11    Judgment Currency.    This is an international loan transaction in which the specification of Dollars and
payment in New York City is of the essence, and the obligations of the Obligors under this Agreement to make payment to (or for the account of) a Lender in Dollars shall not be discharged or
satisfied by any tender or recovery pursuant to any judgment expressed in or converted into any other currency or in another place except to the extent that such tender or recovery results in the
effective receipt by such Lender in New York City of the full amount of Dollars payable to such Lender under this Agreement. If for the purpose of obtaining judgment in any court it is necessary to
convert a sum due hereunder in Dollars into another currency (in this Section 12.11 called the "judgment currency"), the rate of exchange that
shall be applied shall be that at which in accordance with normal banking procedures the Administrative Agent could purchase such Dollars at its New York City office with the judgment currency on the
Business Day next preceding the day on which such judgment is rendered. The obligation of the Obligors in respect of any such sum due from it to the Administrative Agent or any Lender hereunder or
under any Basic Document (in this Section 12.11 called an "Entitled Person") shall, notwithstanding the rate of exchange actually applied in
rendering such judgment, be discharged only to the extent that on the Business Day following receipt by such Entitled Person of any sum adjudged to be due hereunder in the judgment currency such
Entitled Person may in accordance with normal banking procedures purchase and transfer Dollars to New York City with the amount of the judgment currency so adjudged to be due; and each of the Obligors
hereby, as a separate obligation and notwithstanding any such judgment, agrees to indemnify such Entitled Person against, and to pay such Entitled Person on demand, in Dollars, the amount (if any) by
which the sum originally due to such Entitled Person in Dollars hereunder exceeds the amount of the Dollars so purchased and transferred. 

        12.12    Governing Law.    This Agreement shall be governed by, and construed in accordance with, the law of the State
of New York, United States of America. 

        12.13    Jurisdiction; Service of Process; Venue.    

        (a)   Each
Obligor hereby agrees that any suit, action or proceeding with respect to this Agreement, any Note, any other Basic Document (other than the Security Documents) or
any judgment entered by any court in respect of any thereof may be brought in the Supreme Court of the State of New York, County of New York or in the United States District Court for the Southern
District of New York, as the party commencing such suit, action or proceeding may elect in its sole discretion; and each Obligor hereby irrevocably and unconditionally submits to the jurisdiction of
such courts for the purpose of any suit, action, proceeding or judgment. Each Obligor hereby further irrevocably and unconditionally submits, for the purpose of any such suit, action, proceedings or
judgment brought against it (including any suit, action, proceedings or judgment relating to any of the Security Documents), to any ordinary court of justice of the City and  Comuna of Santiago, Chile.
Each Obligor 

55

 

agrees
that final judgment in any such action or proceeding shall be conclusive and may be enforced in other jurisdictions by law suit on the judgment or in any other manner permitted by law. 

        (b)   Each
Obligor hereby agrees that service of all writs, process and summonses in any such suit, action or proceeding brought in the State of New York may be made upon CT
Corporation, presently located at 1633 Broadway, New York, New York 10019, U.S.A. (the "Process Agent"), and each Obligor hereby confirms and agrees
that the Process Agent has been duly and irrevocably appointed as its agent and true and lawful attorney-in-fact in its name, place and stead to accept such service of any and
all such writs, process and summonses, and agrees that the failure of the Process Agent to give any notice of any such service of process to such Obligor shall not impair or affect the validity of
such service or of any judgment based thereon. Each Obligor hereby further irrevocably consents to the service of process in any suit, action or proceeding in said courts by the mailing thereof by the
Administrative Agent or any Lender by registered or certified mail, postage prepaid, at its address set forth beneath its signature hereto. 

        (c)   Nothing
herein shall in any way be deemed to limit the ability of the Administrative Agent or any Lender to serve any such writs, process or summonses in any other
manner permitted by applicable law or to obtain jurisdiction over any Obligor in such other jurisdictions, and in such manner, as may be permitted by applicable law. 

        (d)   Each
Obligor hereby irrevocably waives any objection that it may now or hereafter have to the laying of the venue of any suit, action or proceeding arising out of or
relating to this Agreement, the Notes or any other Basic Document brought in the Supreme Court of the State of New York, County of New York or in the United States District Court for the Southern
District of New York, and hereby further irrevocably waives any claim that any such suit, action or proceeding brought in any such court has been brought in an inconvenient forum. 

        (e)   Each
Obligor irrevocably waives, to the fullest extent permitted by applicable law, any claim that any action or proceeding commenced by the Administrative Agent or any
Lender relating in any way to this Agreement should be dismissed or stayed by reason, or pending the resolution, of any action or proceeding commenced by any Obligor relating in any way to this
Agreement whether or not commenced earlier. To the fullest extent permitted by applicable law, the Obligors shall take all measures necessary for any such action or proceeding commenced by the
Administrative Agent or any Lender to proceed to judgment prior to the entry of judgment in any such action or proceeding commenced by any Obligor. 

        12.14    No Immunity.    To the extent that any Obligor may be or become entitled, in any jurisdiction in which
judicial proceedings may at any time be commenced with respect to this Agreement or any other Basic Document, to claim for itself or its Property any immunity from set-off, suit, court
jurisdiction, attachment prior to judgment, attachment in aid of execution of a judgment, execution of a judgment or from any other legal process or remedy relating to its obligations under this
Agreement or any other Basic Document, and to the extent that in any such jurisdiction there may be attributed such an immunity (whether or not claimed), each of the Obligors hereby irrevocably agrees
not to claim and hereby irrevocably waives such immunity to the fullest extent permitted by the laws of such jurisdiction and agrees that the foregoing waiver shall have the fullest extent permitted
under the Foreign Sovereign Immunities Act of 1976 of the United States of America and is intended to be irrevocable for purposes of such Act. 

        12.15    Waiver of Jury Trial.    EACH OF THE OBLIGORS, THE ADMINISTRATIVE AGENT AND THE
LENDERS HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE
TRANSACTIONS CONTEMPLATED HEREBY.

56

 

        12.16    Use of English Language.    This Agreement has been negotiated and executed in the English language. All
certificates, reports, notices and other documents and communications given or delivered pursuant to this Agreement shall be in the English language, or accompanied by a certified English translation
thereof. Except in the case of laws of, or official communications of, Chile, in the case of any document originally issued in a language other than English, the English language version of any such
document shall for purposes of this Agreement, and absent manifest error, control the meaning of the matters set forth therein. 

        12.17    Confidentiality.    Each Lender and the Administrative Agent agrees (on behalf of itself and each of its
affiliates, directors, officers, employees and representatives) to use reasonable precautions to keep confidential, in accordance with their customary procedures for handling confidential information
of the same nature and in accordance with safe and sound banking practices, any non-public information supplied to it by the Company pursuant to this Agreement that is identified by the
Company in writing as being confidential at the time the same is delivered to the Lenders or the Administrative Agent (including, without limitation, the information included in Schedules I, II, III
and IV hereto), provided that nothing herein shall limit the disclosure of any such information (i) to the extent required by statute, rule,
regulation or judicial process, (ii) to counsel for any of the Lenders or the Administrative Agent, (iii) to bank examiners, auditors or accountants, (iv) to the Administrative
Agent or any other Lender, (v) in connection with any litigation to which any one or more of the Lenders or the Administrative Agent is a party, (vi) to any assignee or participant (or
prospective assignee or participant) so long as such assignee or participant (or prospective assignee or participant) first executes and delivers to the respective Lender a written confidentiality
agreement or (vii) that has become generally available to the public, other than by a breach of this Section 12.17 by the Administrative Agent or such Lender, as the case may be, or that
the Administrative Agent or such Lender, as the case may be, has received from a Person not party to this Agreement where the Administrative Agent or such Lender, as the case may be, is not aware of
such Person being under an obligation to keep such information confidential. Solely for the purposes of complying with Treasury Regulation
Section 1.6011 - 4(b)(3)(iii), the Company, the Administrative Agent and each Lender (and each of their respective employees, representatives, or other agents) may
disclose to any and all Persons, without limitation of any kind, the U.S. tax treatment and tax structure of the transactions contemplated by this Agreement and all materials of any kind (including
opinions or other tax analyses) that are provided to any of them relating to such tax treatment and tax structure. However, any such information relating to the tax treatment or tax structure is
required to be kept confidential to the extent necessary to comply with any applicable federal or state securities laws. For purposes of this Section "Treasury Regulations" shall mean the Treasury
Regulations promulgated under the Code. "Code" shall mean the Internal Revenue Code of 1986, as amended. 

57

        IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed and delivered as of the day and year first above written. 

	 	 	VTR GLOBALCOM S.A.
	

 	
 	

By:	
 	

/s/  BLAS TOMIC E.      
 Title: Chief Executive Officer
	

 	
 	

Address for Notices:
	

 	
 	

Attention:	
 	

 
	

 	
 	

Facsimile No.:	
 	

 
	

 	
 	

Telephone No.:	
 	

 

	 	 	SUBSIDIARY GUARANTORS
	

 	
 	

VTR NET S.A.
	

 	
 	

By:	
 	

/s/  BLAS TOMIC E.      
 Title: Chief Executive Officer
	

 	
 	

VTR BANDA ANCHA S.A.
	

 	
 	

By:	
 	

/s/  BLAS TOMIC E.      
 Title: Chief Executive Officer
	

 	
 	

VTR GALAXY CHILE S.A.
	

 	
 	

By:	
 	

/s/  BLAS TOMIC E.      
 Title: Chief Executive Officer
	

 	
 	

VTR GLOBALCARRIER S.A.
	

 	
 	

By:	
 	

/s/  BLAS TOMIC E.      
 Title: Chief Executive Officer
	

 	
 	

VTR INGENIERIA S.A.
	

 	
 	

By:	
 	

/s/  BLAS TOMIC E.      
 Title: Chief Executive Officer

	 	 	LENDERS
	
Outstanding Loans:

U.S.$24,460,227.27	
 	

THE TORONTO-DOMINION BANK
	

 	
 	

By:	
 	

/s/  JIM BRIDWELL      
 Title: Vice President
	

 	
 	

Lending Office:
	

 	
 	

909 Fannin Street, Suite 1700

Houston, Texas 77010
	

 	
 	

Address for Notices:
	

 	
 	

909 Fannin Street, Suite 1700

Houston, Texas 77010
	

 	
 	

Attention:	
 	

Mr. Jimmie Bridwell, Vice President
	

 	
 	

Facsimile No.:	
 	

713-951-9921
	

 	
 	

Telephone No.:	
 	

713-653-8231

	Outstanding Loans:

U.S.$18,869,318.18	 	CITIBANK, N.A.
	

 	
 	

By:	
 	

/s/  JULIE SISKIND      
 Title: Director
	

 	
 	

Lending Office:
	

 	
 	

Citigroup

Global Project & Structured Trade Finance

388 Greenwich St., 20th Floor

New York, NY 10013
	

 	
 	

Address for Notices:
	

 	
 	

Citigroup

Global Project & Structured Trade Finance

388 Greenwich St., 20th Floor

New York, NY 10013
	

 	
 	

Attention:	
 	

Julie Siskind
	

 	
 	

Facsimile No.:	
 	

212-816-0374
	

 	
 	

Telephone No.:	
 	

212-816-1233

	Outstanding Loans:

U.S.$18,869,318.18	 	BANKBOSTON N.A.,(1) NASSAU BRANCH
	

 	
 	

By:	
 	

/s/  PAULINA VALDES      
 Title: Authorized Officer
	

 	
 	

Lending Office:
	

 	
 	

BankBoston, N.A., Nassau Branch

Rustcraf Road 100

Denham, Massachusetts 02026
	

 	
 	

Address for Notices:
	

 	
 	

BankBoston, N.A., Nassau Branch

Rustcraf Road 100

Denham, Massachusetts 02026
	

 	
 	

Attention:	
 	

Karen Cooper
	

 	
 	

Facsimile No.:	
 	

781-467-2094
	

 	
 	

Telephone No.:	
 	

781-467-2091
	

 	
 	

With a copy to:
	

 	
 	

BankBoston, N.A.

Enrique Foster Sur 20. Piso 5

Las Condes.

Santiago

CHILE
	

 	
 	

Attention:	
 	

Mario Cortés Phillip
	

 	
 	

Facsimile No.:	
 	

(56-2) 686 0770
	

 	
 	

Telephone No.:	
 	

(56-2) 686 0635

	(1)
	BankBoston,
N.A., a Fleet Boston Financial company is the corporate name under which Fleet National Bank operates in Latin America and the Bahamas. 

	Outstanding Loans:

U.S.$18,869,318.18	 	JPMORGAN CHASE BANK
	

 	
 	

By:	
 	

/s/  MANOCHERE ALAMGIR      
 Title: Vice President
	

 	
 	

Lending Office:
	

 	
 	

JPMorgan Chase Bank-Intl Banking Facility

4 Chase Metrotech Center-15th Floor

Brooklyn, NY 11245
	

 	
 	

Address for Notices:
	

 	
 	

JP Morgan Chase Bank

277 Park Avenue-2nd Floor

New York, New York 10072
	

 	
 	

Attention:	
 	

Laura Rebecca
	

 	
 	

Facsimile No.:	
 	

646-534-0531
	

 	
 	

Telephone No.:	
 	

212-622-2430
	

 	
 	

With copies to:
	

 	
 	

JPMorgan Chase Bank

277 Park Avenue, 2nd Floor

NEW YORK, NY 10172
	

 	
 	

Attention: Jacqueline Truzzell
	

 	
 	

Facsimile No.: 646-634-0829
	

 	
 	

Telephone No.: 212-622-7441
	

 	
 	

JPMorgan Chase Bank

270 Park Avenue-20th Floor

New York, NY 10017
	

 	
 	

Attention:	
 	

Manochere Alamgir
	

 	
 	

Facsimile No.:	
 	

212-270-0433
	

 	
 	

Telephone No.:	
 	

212-270-0293

	Outstanding Loans:

U.S.$11,181,818.18	 	CREDIT LYONNAIS NEW YORK BRANCH
	

 	
 	

By:	
 	

/s/  SILVIA RUBIO      
 Title: Vice President
	

 	
 	

Lending Office:
	

 	
 	

1301 Avenue of the Americas

New York, New York 10019
	

 	
 	

Address for Notices:
	

 	
 	

1301 Avenue of the Americas

New York, New York 10019
	

 	
 	

Attention:	
 	

Silvia Rubio, Vice President
	

 	
 	

Facsimile No.:	
 	

212-261-3402
	

 	
 	

Telephone No.:	
 	

212-261-7485

	Outstanding Loans:

U.S.$8,386,363.62	 	CANADIAN IMPERIAL BANK OF COMMERCE
	

 	
 	

By:	
 	

/s/  ROBERT NOVAK      
 Title: Executive Director
	

 	
 	

Lending Office:
	

 	
 	

CIBC World Markets, Special Assets

425 Lexington Avenue

New York, New York 10017
	

 	
 	

Address for Notices:
	

 	
 	

CIBC World Markets, Special Assets

425 Lexington Avenue

New York, New York 10017
	

 	
 	

Attention:	
 	

Robert Novak, Executive Director
	

 	
 	

Facsimile No.:	
 	

212.856.4135
	

 	
 	

Telephone No.:	
 	

212.856.4130

	Outstanding Loans:

U.S.$11,181,818.18	 	EXPORT DEVELOPMENT CANADA
	

 	
 	

By:	
 	

/s/  SEAN MITCHELL      
 Title: Manager, Special Risks
	

 	
 	

By:	
 	

/s/  DAN KOVACS      
 Title: Loan Asset Manager
	

 	
 	

Lending Office:
	

 	
 	

151 O'Connor

Ottawa, Canada K1A 1K3
	

 	
 	

Address for Notices:
	

 	
 	

151 O'Connor

Ottawa, Canada K1A 1K3
	

 	
 	

Attention:	
 	

Mr. Sean Mitchell, Asset Management
	

 	
 	

Facsimile No.:	
 	

613-598-3186
	

 	
 	

Telephone No.:	
 	

613-598-3027

	Outstanding Loans:

U.S.$11,181,818.18	 	ING BANK N.V., CURAÇÃO BRANCH
	

 	
 	

By:	
 	

/s/  GERMAN TAGLE      
 Title: Attorney in Fact
	

 	
 	

By:	
 	

/s/  ANDRES ERRAZURIZ      
 Title: Attorney in Fact
	

 	
 	

Lending Office:
	

 	
 	

Kaya W.F.G. (Jombi), Mensing 14

Willemsted, Curaçao

Netherlands Antilles
	

 	
 	

Address for Notices:
	

 	
 	

Kaya W.F.G. (Jombi), Mensing 14

Willemsted, Curaçao

Netherlands Antilles
	

 	
 	

Attention:	
 	

Ms. Alba Felipe
	

 	
 	

Facsimile No.:	
 	

5999-432-7511
	

 	
 	

Telephone No.:	
 	

5999-432-7000

	 	 	TORONTO DOMINION (TEXAS), INC.,

as Administrative Agent
	

 	
 	

By:	
 	

/s/  JIM BRIDWELL      
 Title: Vice President
	

 	
 	

Address for Notices to Administrative Agent:
	

 	
 	

Toronto Dominion (Texas), Inc.

909 Fannin Street, Suite 1700

Houston, Texas 77010
	

 	
 	

Attention:	
 	

Mr. Jimmie Bridwell, Vice President
	

 	
 	

Facsimile No.:	
 	

(713) 951-9921
	

 	
 	

Telephone No.:	
 	

(713) 653-8231

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Exhibit 10.1

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Exhibit 4.1  

 
 

MACROPORE BIOSURGERY, INC.    
    
    and    
    
    COMPUTERSHARE TRUST COMPANY, INC., AS RIGHTS AGENT    
    
    RIGHTS AGREEMENT    
    
    DATED AS OF MAY 29, 2003    

  

 
TABLE OF CONTENTS  

	1.	 	Certain Definitions.	 	1
	

2.	
 	

Appointment of Rights Agent.	
 	

4
	

3.	
 	

Issuance of Right Certificates.	
 	

5
	

4.	
 	

Form of Right Certificate.	
 	

6
	

5.	
 	

Countersignature and Registration.	
 	

7
	

6.	
 	

Transfer, Split-Up, Combination and Exchange of Right Certificates; Mutilated, Destroyed, Lost or Stolen Right Certificates.	
 	

7
	

7.	
 	

Exercise of Rights; Purchase Price; Expiration Date of Rights.	
 	

8
	

8.	
 	

Cancellation and Destruction of Right Certificates.	
 	

10
	

9.	
 	

Reservation and Availability of Preferred Stock.	
 	

10
	

10.	
 	

Preferred Stock Record Date.	
 	

11
	

11.	
 	

Adjustment of Purchase Price, Number and Kind of Shares or Number of Rights.	
 	

11
	

12.	
 	

Certificate of Adjusted Purchase Price or Number of Shares.	
 	

17
	

13.	
 	

Consolidation, Merger or Sale or Transfer of Assets or Earning Power.	
 	

17
	

14.	
 	

Fractional Rights and Fractional Shares.	
 	

19
	

15.	
 	

Rights of Action.	
 	

20
	

16.	
 	

Agreement of Right Holders.	
 	

21
	

17.	
 	

Right Certificate Holder Not Deemed a Stockholder.	
 	

21
	

18.	
 	

Concerning the Rights Agent.	
 	

22
	

19.	
 	

Merger or Consolidation or Change of Name of Rights Agent.	
 	

22
	

20.	
 	

Duties of Rights Agent.	
 	

23
	

21.	
 	

Change of Rights Agent.	
 	

25
	

22.	
 	

Issuance of New Right Certificates.	
 	

25
	

23.	
 	

Redemption and Termination.	
 	

26
	

24.	
 	

Notice of Certain Events.	
 	

27
	

25.	
 	

Miscellaneous.	
 	

28
	

26.	
 	

Exchange.	
 	

29
	

Exhibit A—Form of Certificate of Designation, Preferences and Rights of Series RP Preferred Stock	
 	

A-1
	

Exhibit B—Form of Right Certificate	
 	

B-1
	

Exhibit C—Form of Summary of Rights	
 	

C-1

i

RIGHTS AGREEMENT  

        This RIGHTS AGREEMENT (the "Agreement") is made effective as of 5:00 p.m. San Diego time on the
29th day of May, 2003 by and between MacroPore Biosurgery, Inc., a Delaware corporation (the "Corporation"), and Computershare
Trust Company, Inc., a Colorado corporation (the "Rights Agent"), with respect to the following facts and circumstances. 

        A.    The
Board of Directors of the Corporation (the "Board") has authorized and declared a dividend of one preferred share purchase right (a
"Right") for each share of Common Stock (as hereinafter defined) of the Corporation outstanding at the Close of Business (as hereinafter defined) on
June 10, 2003 (the "Record Date"), each Right representing the right to purchase one one-thousandth (1/1000th) of a share of
Preferred Stock (as hereinafter defined), upon the terms and subject to the conditions herein set forth. 

        B.    The
Board of Directors of the Corporation has further authorized and directed the issuance of one Right with respect to each share of Common Stock that shall become
outstanding between the Record Date and the earliest of the Distribution Date, the Redemption Date or the Final Expiration Date (as such terms are hereinafter defined);  provided, however, that Rights may be issued with respect to shares of Common Stock that shall become
outstanding after the Distribution Date and prior to the earlier of the Redemption Date and the Final Expiration Date in accordance with the provisions of Section 22 of this Agreement. 

        NOW,
THEREFORE, in consideration of the foregoing and the mutual agreements herein set forth, the parties hereby agree as follows: 

        1.    Certain Definitions.    

        For
purposes of this Agreement, the following terms have the meanings indicated: 

        1.1.  "Acquiring Person" means any Person who or which, together with all Affiliates and Associates of such Person, without
the prior approval of the Corporation's Board of Directors, shall be the Beneficial Owner of 15% or more of the then outstanding shares of Common Stock (other than as a result of a Permitted Offer) or
was such a Beneficial Owner at any time after the date hereof, whether or not such person continues to be the Beneficial Owner of 15% or more of the then outstanding shares of Common Stock.
Notwithstanding the foregoing: (A) the term "Acquiring Person" shall not include (i) the Corporation, (ii) any Subsidiary of the Corporation, (iii) any employee benefit
plan of the Corporation
or of any Subsidiary of the Corporation, (iv) any Person or entity organized, appointed or established by the Corporation or any Subsidiary of the Corporation for or pursuant to the terms of
any such plan, or (v) any Person who or which, together with all Affiliates and Associates of such Person, becomes the Beneficial Owner of 15% or more of the then outstanding shares of Common
Stock as a result of the acquisition of shares of Common Stock directly from the Corporation; and (B) no Person shall be deemed to be an "Acquiring Person" either (i) as a result of the
acquisition of Common Stock by the Corporation which, by reducing the number of shares of Common Stock outstanding, increases the proportional number of shares beneficially owned by such Person
together with all Affiliates and Associates of such Person; provided, however, that if (X) a
Person would become an Acquiring Person (but for the operation of this subclause (B)(i)) as a result of the acquisition of shares of Common Stock by the Corporation, and (Y) after such
share acquisition by the Corporation, such Person, or an Affiliate or Associate of such Person, becomes the Beneficial Owner of any additional shares of Common Stock, then such Person shall be deemed
an Acquiring Person, or (ii) if (X) within eight (8) days after such Person would otherwise have become an Acquiring Person (but for the operation of this
subclause (B)(ii)), such Person notifies the Board of Directors of the Corporation that such Person did so inadvertently and (Y) within two (2) Business Days (as defined in
Section 1.8 hereof) after such notification, such Person is the Beneficial Owner of less than 15% of the outstanding shares of Common Stock. 

        1.2.  "Act" means the Securities Act of 1933, as amended. 

 

        1.3.  "Adjusted Number of Shares" and "Adjusted Purchase Price" have the
respective meanings set forth in Section 11.1.3 hereof. 

        1.4.  "Adjustment Shares" has the meaning set forth in Section 11.1.2 hereof. 

        1.5.  "Affiliate" and "Associate" shall have the respective meanings ascribed
to such terms in Rule 12b-2 of the General Rules and Regulations under the Exchange Act. 

        1.6.  The
term "current per share market price" shall have the meaning set forth in Section 11.4.1 hereof when used
with respect to a "Security" (as defined in said Section 11.4.1) and shall have the meaning set forth in Section 11.4.2 when used with
respect to the Preferred Stock. 

        1.7.  A
Person is the "Beneficial Owner" of and "beneficially owns" any
securities which: 

        1.7.1.    such
Person or any of such Person's Affiliates or Associates beneficially owns, directly or indirectly; 

        1.7.2.    such
Person or any of such Person's Affiliates or Associates has (A) the right to acquire (whether such right is exercisable immediately or only after the
passage of time) pursuant to any agreement, arrangement or understanding, or upon the exercise of conversion rights, exchange rights, rights (other than the Rights), warrants or options, or otherwise;  provided, however, that a Person shall not be deemed the Beneficial Owner of, or to beneficially own,
securities tendered pursuant to a tender or exchange offer made by or on behalf of such Person or any of such Person's Affiliates or Associates until such tendered securities are accepted for purchase
or exchange; or (B) the right to vote pursuant to any agreement, arrangement or understanding; provided,  however, that a Person shall not be deemed
the Beneficial Owner of, or to beneficially own, any security if the agreement, arrangement or understanding
to vote such security (1) arises solely from a revocable proxy or consent given to such Person in response to a public proxy or consent solicitation made pursuant to, and in accordance with,
the applicable rules and regulations promulgated under the Exchange Act and (2) is not also then reportable on Schedule 13D under the Exchange Act (or any comparable or successor
report); or 

        1.7.3.    are
beneficially owned, directly or indirectly, by any other Person (or any Affiliate or Associate thereof) with which such Person (or any of such Person's Affiliates
or Associates) has any agreement, arrangement or understanding relating to the acquisition, holding, voting (except to the extent contemplated by the proviso to subclause (B) of
Section 1.7.2), or disposing of any securities of the Corporation. 

        Notwithstanding
anything in this Section 1.7 to the contrary, the phrase "then outstanding," when used with reference to a Person's Beneficial Ownership of securities of the
Corporation, shall mean the number of such securities then issued and outstanding together with the number of such securities not then actually issued and outstanding which such Person would be deemed
to own beneficially hereunder. 

        Notwithstanding
anything in this Section 1.7 to the contrary, no Person shall be deemed to beneficially own any securities solely by reason of such Person being a party to a
customary agreement pursuant to which such Person acts or agrees to act as an underwriter with respect to a bona fide public offering of securities. 

        No
decision reached, or action taken, by the Board of Directors of the Corporation or any committee thereof shall cause any Person (or any Affiliate or Associate of such Person) who is a
member of the Board of Directors of the Corporation or such committee to be deemed, for the purposes of this Agreement, to be a Beneficial Owner of any securities beneficially owned by any other
Person (or any Affiliate or Associate of such Person) who is a member of the Board of Directors of the Corporation or any committee thereof solely by reason of such membership of the 

2

 

Board
of Directors or any committee thereof or participation in the decisions or actions thereof on the part of either or both of such Persons. 

        1.8.  "Business Day" means any day other than a Saturday, a Sunday, a day on which banking institutions in the State of New
York are obligated by law or executive order to close, or a United States federal holiday. 

        1.9.  "Capital Stock Equivalents" has the meaning set forth in Section 11.1.3 hereof. 

        1.10.    "Close of Business" on any given date means 5:00 P.M., California time, on such date;  provided, however, that if such
date is not a Business Day it means 5:00 P.M., California time,
on the next succeeding Business Day. 

        1.11.    "Common Stock" when used with reference to the Corporation means the Common Stock of the Corporation or, in the event
of a subdivision, combination or consolidation with respect to such shares of Common Stock, the shares of Common Stock resulting from such subdivision, combination or consolidation. "Common Stock"
when used with reference to any Person other than the Corporation means the capital stock (or equity interest) with the greatest voting power of such other Person or, if such other Person is a
Subsidiary of another Person, the Person or Persons which ultimately control such first-mentioned Person. 

        1.12.    "Corporation" means MacroPore Biosurgery, Inc., a Delaware corporation, and also means a Principal Party to the
extent provided in Section 13.1 hereof. 

        1.13.    "Distribution Date" has the meaning set forth in Section 3.1 hereof. 

        1.14.    "Equivalent Preferred Stock" has the meaning set forth in Section 11.2 hereof. 

        1.15.    "Exchange Act" means the Securities Exchange Act of 1934, as amended. 

        1.16.    "Exchange Ratio" has the meaning set forth in Section 26.1 hereof. 

        1.17.    "Final Expiration Date" has the meaning set forth in Section 7.1 hereof. 

        1.18.    "Interested Stockholder" means any Acquiring Person or any Affiliate or Associate of an Acquiring Person or any other
Person in which any such Acquiring Person, Affiliate or Associate has an interest, or any other Person acting directly or indirectly on behalf of or in concert with any such Acquiring Person,
Affiliate or Associate. 

        1.19.    "NASDAQ" has the meaning set forth in Section 11.4.1 hereof. 

        1.20.    "Permitted Offer" means a tender or exchange offer which is for all outstanding shares of Common Stock of the
Corporation at a price and on terms determined, prior to the purchase of shares under such tender or exchange offer, by at least a majority of the members of the Board of Directors who are not
officers of the Corporation and who are not Acquiring Persons or Affiliates, Associates, nominees or representatives of an Acquiring Person, to be adequate (taking into account all factors that such
directors deem pertinent including, without limitation, prices that could reasonably be achieved if the Corporation or its assets were sold on an orderly basis designed to realize maximum value) and
otherwise in the best interests of the Corporation, its stockholders (other than the Person or any Affiliate or Associate thereof on whose basis the offer is being made) and other relevant
constituencies, taking into account all factors that such directors may deem pertinent. 

        1.21.    "Person" means any individual, firm, partnership, corporation, limited liability company, limited liability
partnership, trust, association, joint venture or other entity, and includes any successor (by merger or otherwise) of such entity. 

3

 

        1.22.    "Preferred Stock" means shares of the Corporation's Series RP Preferred Stock, par value $0.001 per share,
having the relative rights, preferences and limitations set forth in the Form of Certificate of Designation, Preferences and Rights of Series RP Preferred Stock attached to this Agreement as
Exhibit A. 

        1.23.    "Principal Party" has the meaning set forth in Section 13.2 hereof. 

        1.24.    "Proration Factor" has the meaning set forth in Section 11.1.3 hereof. 

        1.25.    "Purchase Price" has the meaning set forth in Section 4.1 hereof. 

        1.26.    "Record Date" has the meaning set forth in Recital A hereof. 

        1.27.    "Redemption Date" has the meaning set forth in Section 7.1 hereof. 

        1.28.    "Redemption Price" has the meaning set forth in Section 23.1.1 hereof. 

        1.29.    "Right Certificate" has the meaning set forth in Section 3.1 hereof. 

        1.30.    "Rights" has the meaning set forth in Recital A hereof. 

        1.31.    "Rights Agent" means Computershare Trust Company, Inc., a Colorado corporation, as Rights Agent hereunder, and,
from the time of its succession, any successor Rights Agent under Section 19 or Section 21 hereof. 

        1.32.    "Section 11.1.2 Event" has the meaning set forth in Section 11.1.2 hereof. 

        1.33.    "Section 13 Event" means any event described in clause (x), (y) or (z) of Section 13.1 hereof. 

        1.34.    "Shares Acquisition Date" means the first date of public announcement (which, for purposes of this definition, shall
include, without limitation, a report filed pursuant to the Exchange Act) by the Corporation or an Acquiring Person that an Acquiring Person has become such or that facts exist as a result of which
there exists an Acquiring Person; provided, that, if such Person is determined by the Board of Directors of the Corporation not to have become an
Acquiring Person pursuant to subclause (B)(ii) of Section 1.1 hereof, then no Shares Acquisition Date shall be deemed to have occurred. 

        1.35.    "Subsidiary" of any Person means any corporation or other Person of which a majority of the voting power of the voting
equity securities or equity interest is owned, directly or indirectly, by such Person. 

        1.36.    "Summary of Rights" has the meaning set forth in Section 3.2 hereof. 

        1.37.    "Trading Day" has the meaning set forth in Section 11.4.1 hereof. 

        1.38.    "Triggering Event" means any Section 11.1.2 Event or any Section 13 Event. 

        1.39.    The
term "voting securities" has the meaning set forth in Section 13.1 hereof. 

        2.    Appointment of Rights Agent.    

        2.1.  The
Corporation hereby appoints the Rights Agent to act as agent for the Corporation in accordance with the terms and conditions hereof, and the Rights Agent hereby
accepts such appointment. The Corporation may from time to time appoint such co-Rights Agents as it may deem necessary or desirable. The Rights Agent shall have no duty to supervise, and
in no event shall be liable for, the acts or omissions of any such co-Rights Agent. 

4

 

        3.    Issuance of Right Certificates.    

        3.1.  Until
the earlier of (i) the Shares Acquisition Date or (ii) the Close of Business on the tenth (10th) day (or such later date as may be determined by
action of the Corporation's Board of Directors) after the date of the commencement by any Person (other than the Corporation, any Subsidiary of the Corporation, any employee benefit plan of the
Corporation or of any Subsidiary of the Corporation or any Person or entity organized, appointed or established by the Corporation or any Subsidiary of the Corporation for or pursuant to the terms of
any such plan) of, or after the date of the first public announcement of the intention of any Person (other than the Corporation, any Subsidiary of the Corporation, any employee benefit plan of the
Corporation or of any Subsidiary of the Corporation or any Person or entity organized, appointed or established by the Corporation or any Subsidiary of the Corporation for or pursuant to the terms of
any such plan) to commence (which intention to commence remains in effect for five (5) Business Days after such announcement), a tender or exchange
offer the consummation of which would result in any Person becoming an Acquiring Person (including, in the case of both (i) and (ii), any such date which is after the date of this Agreement and prior
to the issuance of the Rights) (the "Distribution Date"), (x) the Rights will be evidenced (subject to the provisions of Section 3.2
hereof) by the certificates for shares of Common Stock registered in the names of the holders thereof (which certificates shall also be deemed to be Right Certificates) and not by separate Right
Certificates, and (y) the right to receive Right Certificates will be transferable only in connection with the transfer of the underlying shares of Common Stock (including a transfer to the
Corporation); provided, however, that if a tender or exchange offer is terminated prior to the
occurrence of a Distribution Date, then no Distribution Date shall occur as a result of such tender or exchange offer. As soon as practicable after the Distribution Date, the Corporation will prepare
and execute, the Rights Agent will countersign, and the Corporation will send or cause to be sent by first-class, postage-prepaid mail, to each record holder of shares of Common Stock as of the Close
of Business on the Distribution Date, at the address of such holder shown on the records of the Corporation, a Right Certificate, substantially in the form of Exhibit B hereto (a
"Right Certificate"), evidencing one Right for each share of Common Stock so held. As of and after the Distribution Date, the Rights will be evidenced
solely by such Right Certificates. 

        3.2.  As
promptly as practicable following the Record Date, the Corporation will send a copy of a Summary of Rights to Purchase Preferred Stock, in substantially the form of
Exhibit C hereto (the "Summary of Rights"), by first-class, postage-prepaid mail, to each record holder of shares of Common Stock as of the Close
of Business on the Record Date, at the address of such holder shown on the records of the Corporation. With respect to certificates for shares of Common Stock outstanding as of the Record Date, until
the Distribution Date the Rights will be evidenced by such certificates registered in the names of the holders thereof together with a copy of the Summary of Rights attached thereto. Until the
Distribution Date (or the earlier of the Redemption Date or the Final Expiration Date), the surrender for transfer of any certificate for shares of Common Stock outstanding on the Record Date, with or
without a copy of the Summary of Rights attached thereto, shall also constitute the transfer of the Rights associated with such shares of Common Stock. 

        3.3.  Certificates
for shares of Common Stock that become outstanding (including, without limitation, reacquired shares of Common Stock referred to in the last sentence of
this Section 3.3) after the Record Date but prior to the earliest of the Distribution Date, the Redemption Date or the Final Expiration Date, shall be deemed also to be certificates for Rights,
and shall bear the following legend: 

This
certificate also evidences and entitles the holder hereof to certain rights as set forth in a Rights Agreement between MacroPore Biosurgery, Inc. and Computershare Trust
Company, Inc., a Colorado corporation, as Rights Agent, dated as of May 29, 2003 (the 

5

 

"Rights
Agreement"), the terms of which are hereby incorporated herein by reference and a copy of which is on file at the principal executive offices of MacroPore Biosurgery, Inc. Under certain
circumstances, as set forth in the Rights Agreement, such Rights will be evidenced by separate certificates and will no longer be evidenced by this certificate. MacroPore Biosurgery, Inc. will
mail to the holder of this certificate a copy of the Rights Agreement without charge after receipt of a written request therefor. Under certain circumstances set forth in the Rights Agreement, Rights
issued to, or held by, any Person who is, was or becomes an Acquiring Person or an Affiliate or Associate thereof (as defined in the Rights Agreement) and certain related persons, whether currently
held by or on behalf of such Person or by any subsequent holder, may become null and void. 

With
respect to such certificates containing the foregoing legend, until the Distribution Date the Rights associated with the shares of Common Stock represented by such certificates shall be evidenced
by such certificates alone, and the surrender for transfer of any such certificate shall also constitute the transfer of the Rights associated with the shares of Common Stock represented thereby. In
the event that the Corporation purchases or acquires any shares of Common Stock after the Record Date but prior to the Distribution Date (or the earlier of the Redemption Date or the Final Expiration
Date), any Rights associated with such shares of Common Stock shall be deemed cancelled and retired so that the Corporation shall not be entitled to exercise any Rights associated with the Common
Stock that are no longer outstanding. 

        4.    Form of Right Certificate.    

        4.1.  The
Right Certificates (and the forms of election to purchase and of assignment to be printed on the reverse thereof) shall be substantially in the form set forth in
Exhibit B hereto and may have such marks of identification or designation and such legends, summaries or endorsements printed thereon as the Corporation may deem appropriate (which may not
affect the duties and responsibilities of the Rights Agent) and as are not inconsistent with the provisions of this Agreement, or as may be required to comply with any applicable law or with any rule
or regulation made pursuant thereto or with any rule or regulation of any stock exchange on which the Rights may from time to time be listed, or to conform to usage. Subject to the provisions of
Section 11 and Section 22 hereof, the Right Certificates shall entitle the holders thereof to purchase such number of one one-thousandths (1/1000ths) of a share of Preferred
Stock as shall be set forth therein at the price per one one-thousandth (1/1000th) of a share of Preferred Stock set forth therein in accordance with Section 7.2 hereof (the
"Purchase Price"), but the amount and type of securities purchasable upon the exercise of each Right and the Purchase Price thereof shall be subject to
adjustment as provided herein. 

        4.2.  Any
Right Certificate issued pursuant to Section 3.1 or Section 22 hereof that represents Rights that are null and void pursuant to Section 7.6 of
this Agreement and any Right Certificate issued pursuant
to Section 6 or Section 11 hereof upon transfer, exchange, replacement or adjustment of any other Right Certificate referred to in this sentence, shall contain (to the extent feasible
and upon notice by the Corporation to the Rights Agent that this Section 4.2 has become applicable) the following legend: 

The
Rights represented by this Right Certificate are or were beneficially owned by a Person who was or became an Acquiring Person or an Affiliate or Associate of an Acquiring Person (as such terms are
defined in the Rights Agreement). Accordingly, this Right Certificate and the Rights represented hereby are null and void. 

The
provisions of Section 7.6 of this Agreement shall be operative whether or not the foregoing legend is contained on any such Right Certificate. 

6

 

        5.    Countersignature and Registration.    

        5.1.  The
Right Certificates shall be executed on behalf of the Corporation by its President or any Vice President and the Secretary or an Assistant Secretary, either
manually or by facsimile signature, shall have affixed thereto the Corporation's seal or a facsimile thereof, and shall be attested by the Secretary or an Assistant Secretary of the Corporation,
either manually or by facsimile signature. The Right Certificates shall be countersigned, either manually or by facsimile signature, by the Rights Agent and shall not be valid for any purpose unless
so countersigned. In case any officer of the Corporation who shall have signed any of the Right Certificates shall cease to be such officer of the Corporation before countersignature by the Rights
Agent and issuance and delivery by the Corporation, such Right Certificates may nevertheless be countersigned by the Rights Agent and issued and delivered by the Corporation with the same force and
effect as though the person who signed such Right Certificates had not ceased to be such officer of the Corporation; and any Right Certificate may be signed on behalf of the Corporation by any Person
who, at the actual date of the execution of such Right Certificate, shall be a proper officer of the Corporation to sign such Right Certificate, although at the date of the execution of this Rights
Agreement any such Person was not such an officer. 

        5.2.  Following
the Distribution Date, and receipt by the Rights Agent of a list of record holders of Rights, the Rights Agent will keep or cause to be kept, at its office
designated pursuant to Section 25 hereof as the appropriate place for surrender or transfer of the Right Certificates, books for registration and transfer of the Right Certificates issued
hereunder. Such books shall show the names and addresses of the respective holders of the Right Certificates, the number of Rights evidenced on the face of each of the Right Certificates and the
certificate number and the date of each of the Right Certificates. 

        6.    Transfer, Split-Up, Combination and Exchange of Right Certificates; Mutilated, Destroyed, Lost or Stolen Right
Certificates.    

        6.1.  Subject
to the provisions of Section 4.2, Section 7.6 and Section 14 hereof, at any time after the Close of Business on the Distribution Date, and
at or prior to the Close of Business on the earlier of the Redemption Date or the Final Expiration Date, any Right Certificate or Right Certificates may be transferred, split up, combined or exchanged
for another Right Certificate or Right Certificates, entitling the registered holder to purchase a like number of one one-thousandths (1/1000ths) of a share of Preferred Stock (or,
following a Triggering Event, other securities, as the case may be) as the Right Certificate or Right Certificates surrendered then entitled such holder (or former holder in the case of a transfer) to
purchase. Any registered holder desiring to transfer, split up, combine or exchange any Right Certificate or Right Certificates shall make such request in writing delivered to the Rights Agent, and
shall surrender the Right Certificate or Right Certificates to be transferred, split up, combined or exchanged at the office of the Rights Agent designated for such purpose. Neither the Rights Agent
nor the Corporation shall be obligated to take any action whatsoever with respect to the transfer of any such surrendered Right Certificate until the registered holder shall have completed and signed
the certificate contained in the form of assignment on the reverse side of such Right Certificate and shall have provided such additional evidence of the identity of the Beneficial Owner (or former
Beneficial Owner) or Affiliates or Associates thereof as the Corporation or the Rights Agent shall reasonably request. Thereupon the Rights Agent shall, subject to Section 4.2,
Section 7.6 and Section 14 hereof, countersign and deliver to the Person entitled thereto a Right Certificate or Right Certificates, as the case may be, as so requested. The Corporation
may require payment of a sum sufficient to cover any tax or governmental charge that may be imposed in connection with any transfer, split up, combination or exchange of Right Certificates. The Rights
Agent may in its sole discretion require the Corporation or the Person entitled to such Right Certificate to provide 

7

 

evidence
that such payment has been made prior to countersigning and delivering any Right Certificate pursuant to this Section 6.1. 

        6.2.  Upon
receipt by the Corporation and the Rights Agent of evidence reasonably satisfactory to them of the loss, theft, destruction or mutilation of a Right Certificate,
and, in case of loss, theft or destruction, of indemnity or security satisfactory to them, and, at the Corporation's request, reimbursement to the Corporation and the Rights Agent of all reasonable
expenses incidental thereto, and upon surrender to the Rights Agent and cancellation of the Right Certificate if mutilated, the Corporation will make and deliver a new Right Certificate of like tenor
to the Rights Agent for countersignature and delivery to the registered holder in lieu of the Right Certificate so lost, stolen, destroyed or mutilated. 

        7.    Exercise of Rights; Purchase Price; Expiration Date of Rights.    

        7.1.  Subject
to Section 7.6 hereof, the registered holder of any Right Certificate may exercise the Rights evidenced thereby (except as otherwise provided herein) in
whole or in part at any time after the Distribution Date upon surrender of the Right Certificate, with the form of election to purchase and the certificate on the reverse side thereof duly and
properly executed, to the Rights Agent at the office of the Rights Agent designated for such purpose, together with payment of the aggregate Purchase
Price for the total number of one one-thousandths (1/1000ths) of a share of Preferred Stock (or other securities, as the case may be) as to which such surrendered Rights are exercised, at
or prior to the earlier of (i) the Close of Business on May 29, 2013 (the "Final Expiration Date"), or (ii) the time at which the
Rights are redeemed as provided in Section 23 hereof (the "Redemption Date"). 

        7.2.  The
Purchase Price for each one one-thousandth (1/1000th) of a share of Preferred Stock pursuant to the exercise of a Right shall initially be $25.00, shall
be subject to adjustment from time to time as provided in the next sentence and in Sections 11 and 13.1 hereof and shall be payable in accordance with paragraph 7.3 below. Anything in
this Agreement to the contrary notwithstanding, in the event that at any time after the date of this Agreement and prior to the Distribution Date, the Corporation shall (i) declare or pay any
dividend on the Common Stock payable in Common Stock or (ii) effect a subdivision, combination or consolidation of the Common Stock (by reclassification or otherwise than by payment of
dividends in shares of Common Stock) into a greater or lesser number of shares of Common Stock, then, in any such case, each share of Common Stock outstanding following such subdivision, combination
or consolidation shall continue to have a Right associated therewith and the Purchase Price following any such event shall be proportionately adjusted to equal the result obtained by multiplying the
Purchase Price immediately prior to such event by a fraction the numerator of which shall be the total number of shares of Common Stock outstanding immediately prior to the occurrence of the event and
the denominator of which shall be the total number of shares of Common Stock outstanding immediately following the occurrence of such event. The adjustment provided for in the preceding sentence shall
be made successively whenever such a dividend is declared or paid or such a subdivision, combination or consolidation is effected. 

        7.3.  Upon
receipt of a Right Certificate representing exercisable Rights, with the form of election to purchase and the certificate on the reverse side thereof duly and
properly executed, accompanied by payment of the Purchase Price for the Preferred Stock (or other securities, as the case may be) to be purchased and an amount equal to any applicable tax or
governmental charge required to be paid by the holder of such Right Certificate in accordance with Section 6 hereof by certified check, cashier's check or money order payable to the order of
the Corporation, the Rights Agent shall thereupon promptly (i) (A) requisition from any transfer agent of the Preferred Stock certificates for the number of shares of Preferred Stock to
be purchased, and the Corporation hereby irrevocably authorizes any such transfer agent to comply with all such requests, or (B) if the 

8

 

Corporation,
in its sole discretion, shall have elected to deposit the Preferred Stock issuable upon exercise of the Rights hereunder into a depositary, requisition from the depositary agent
depositary receipts representing such number of one one-thousandths (1/1000ths) of a share of Preferred Stock as are to be purchased (in which case certificates for the Preferred Stock
represented by such receipts shall be deposited by the transfer agent with the depositary agent) and the Corporation will direct the depositary agent to comply with such requests, (ii) when
appropriate, requisition from the Corporation the amount of cash to be paid in lieu of issuance of fractional shares in accordance with Section 14 hereof, (iii) after receipt of such
certificates or depositary receipts, cause the same to be delivered to or upon the order of the registered holder of such Right Certificate, registered in such name or names as may be designated by
such holder, and (iv) when appropriate, after receipt thereof, deliver such cash to or upon the order of the registered holder of such Right Certificate. In the event that the Corporation is
obligated to issue other securities (including shares of Common Stock) of the Corporation pursuant to Section 11.1 hereof, the Corporation will make all arrangements necessary so that such
other securities are available for distribution by the Rights Agent, if and when necessary to comply with this Agreement. 

        7.4.  In
addition, in the case of an exercise of the Rights by a holder pursuant to Section 11.1.2, the Rights Agent shall return such Right Certificate to the
registered holder thereof after imprinting, stamping or otherwise indicating thereon that the Rights represented by such Right Certificate no longer include the rights provided by
Section 11.1.2 of the Rights Agreement and if less than all the Rights represented by such Right Certificate were so exercised, the Rights Agent shall indicate on the Right Certificate the
number of Rights represented thereby that continue to include the rights provided by Section 11.1.2. 

        7.5.  In
case the registered holder of any Right Certificate shall exercise less than all the Rights evidenced thereby, a new Right Certificate evidencing Rights equivalent
to the Rights remaining unexercised shall be issued by the Rights Agent to the registered holder of such Right Certificate or to his duly authorized assigns, subject to the provisions of
Section 6 and Section 14 hereof, or the Rights Agent shall place an appropriate notation on the Right Certificate with respect to those Rights exercised. 

        7.6.  Notwithstanding
anything in this Agreement to the contrary, from and after the first occurrence of a Section 11.1.2 Event, any Rights beneficially owned by
(i) an Acquiring Person or an Affiliate or Associate of an Acquiring Person, (ii) a transferee of an Acquiring Person (or of any Affiliate or Associate thereof) who becomes a transferee
after the Acquiring Person becomes such, or (iii) a transferee of an Acquiring Person (or of any Affiliate or Associate thereof) who becomes a transferee prior to or concurrently with the
Acquiring Person becoming such and receives such Rights pursuant to either (A) a transfer (whether or not for consideration) from the Acquiring Person (or from any Affiliate or Associate
thereof) to holders of equity interests in such Acquiring Person or to any Person with whom the Acquiring Person has a continuing agreement, arrangement or understanding regarding the transferred
Rights or (B) a transfer that the Board of Directors of the Corporation has determined is part of a plan, arrangement or understanding that has as a primary purpose or effect the avoidance of
this Section 7.6, shall become null and void without any further action and no holder of such Rights shall have any rights whatsoever with respect to such Rights, whether under any provision of
this Agreement or otherwise. The Corporation shall notify the Rights Agent when this Section 7.6 applies and shall use all reasonable efforts to insure that the provisions of this
Section 7.6 and Section 4.2 hereof are complied with, but neither the Corporation nor the Rights Agent shall have any liability to any holder of Right Certificates or other Person as a
result of the Corporation's failure to make any determinations with respect to an Acquiring Person or its Affiliates, Associates or transferees hereunder. 

9

  

        7.7.  Notwithstanding
anything in this Agreement to the contrary, neither the Rights Agent nor the Corporation shall be obligated to undertake any action with respect to a
registered holder upon the occurrence of any purported exercise as set forth in this Section 7 unless such registered holder shall have (i) properly completed and signed the certificate
contained in the form of election to purchase set forth on the reverse side of the Right Certificate surrendered for such exercise, and (ii) provided such additional evidence of the identity of
the Beneficial Owner (or former Beneficial Owner) or Affiliates or Associates thereof as the Corporation or the Rights Agent shall reasonably request. 

        8.    Cancellation and Destruction of Right Certificates.    

        All
Right Certificates surrendered for the purpose of exercise, transfer, split up, combination or exchange shall, if surrendered to the Corporation or to any of its agents, be delivered
to the Rights Agent for cancellation or in cancelled form, or, if surrendered to the Rights Agent, shall be cancelled by it, and no Right Certificates shall be issued in lieu thereof except as
expressly permitted by the provisions of this Rights Agreement. The Corporation shall deliver to the Rights Agent for cancellation and retirement, and the Rights Agent shall so cancel and retire, any
other Right Certificate purchased or acquired by the Corporation otherwise than upon the exercise thereof. The Rights Agent shall deliver all cancelled Right Certificates to the Corporation, or shall,
at the written request of the Corporation, destroy such cancelled Right Certificates, and in such case shall deliver a certificate of destruction thereof to the Corporation. 

        9.    Reservation and Availability of Preferred Stock.    

        9.1.  The
Corporation covenants and agrees that, at all times prior to the occurrence of a Section 11.1.2 Event, it will cause to be reserved and kept available out of
its authorized and unissued Preferred Stock, or any authorized and issued Preferred Stock held in its treasury, the number of shares of Preferred Stock that will be sufficient to permit the exercise
in full of all outstanding Rights and, after the occurrence of a Section 11.1.2 Event, shall, to the extent reasonably practicable, so reserve and keep available a sufficient number of shares
of Common Stock (and/or other securities) that may be required to permit the exercise in full of the Rights pursuant to this Agreement. 

        9.2.  So
long as the shares of Preferred Stock (and, after the occurrence of a Section 11.1.2 Event, shares of Common Stock or any other securities) issuable upon the
exercise of the Rights may be listed on any stock exchange, the Corporation shall use its best efforts to cause, from and after such time as the Rights become exercisable, all shares or other
securities reserved for such issuance to be listed on such exchange upon official notice of issuance upon such exercise. 

        9.3.  The
Corporation covenants and agrees that it will take all such action as may be necessary to ensure that all shares of Preferred Stock (or shares of Common Stock
and/or other securities, as the case may be) delivered upon exercise of Rights shall, at the time of delivery of the certificates for such shares or other securities (subject to payment of the
Purchase Price), be duly and validly authorized and issued and fully paid and non-assessable shares or securities. 

        9.4.  The
Corporation covenants and agrees that it will pay when due and payable any and all taxes and governmental charges that may be payable in respect of the issuance or
delivery of the Right Certificates or of any shares of Preferred Stock (or shares of Common Stock and/or other securities, as the case may be) upon the exercise of Rights. The Corporation shall not,
however, be required to pay any tax or governmental charge that may be payable in respect of any transfer or delivery of Right Certificates to a person other than, or the issuance or delivery of
certificates or depositary receipts for the shares of Preferred Stock (or shares of Common Stock and/or other securities, as the case may be) in a name other than that of, the registered holder of the
Right Certificate evidencing Rights surrendered for exercise, or to issue or to deliver any certificates or 

10

 

depositary
receipts for shares of Preferred Stock (or shares of Common Stock and/or other securities, as the case may be) upon the exercise of any Rights, until any such tax or governmental charge
shall have been paid (any such tax or governmental charge being payable by the holder of such Right Certificate at the time of surrender) or until it has been established to the Corporation's
reasonable satisfaction that no such tax or governmental charge is due. 

        9.5.  The
Corporation shall use its best efforts to (i) file, as soon as practicable following the Shares Acquisition Date, a registration statement under the Act,
with respect to the securities purchasable upon exercise of the Rights on an appropriate form, (ii) cause such registration statement to become effective as soon as practicable after such
filing, and (iii) cause such registration statement to remain effective (with a prospectus at all times meeting the requirements of the Act and the rules and regulations thereunder) until the
date of the expiration of the period for exercise of the Rights provided by Section 11.1.2. The Corporation will also take such action as may be appropriate under the blue sky laws of the
various states. 

        10.    Preferred Stock Record Date.    

        Each
Person in whose name any certificate for shares of Preferred Stock (or shares of Common Stock and/or other securities, as the case may be) is issued upon the exercise of Rights
shall for all purposes be deemed to have become the holder of record of the shares of Preferred Stock (or shares of Common Stock and/or other securities, as the case may be) represented thereby on,
and such certificate shall be dated, the date upon which the Right Certificate evidencing such Rights was duly surrendered and payment of the Purchase Price (and any applicable taxes and governmental
charges) was made; provided, however, that, if the date of such surrender and payment is a date upon
which the shares of Preferred Stock (or shares of Common Stock and/or other securities, as the case may be) transfer books of the Corporation are closed, such person shall be deemed to have become the
record holder of
such shares on, and such certificate shall be dated, the next succeeding Business Day on which the shares of Preferred Stock (or shares of Common Stock and/or other securities, as the case may be)
transfer books of the Corporation are open. 

        11.    Adjustment of Purchase Price, Number and Kind of Shares or Number of Rights.    

        The
Purchase Price, the number and kind of shares covered by each Right and the number of Rights outstanding are subject to adjustment from time to time as provided in this
Section 11. 

        11.1.    Adjustment Events.    

        11.1.1.    In
the event the Corporation shall at any time after the date of this Agreement (A) declare a dividend on the Preferred Stock payable in Preferred Stock,
(B) subdivide the outstanding Preferred Stock, (C) combine the outstanding Preferred Stock into a smaller number of Preferred Stock or (D) issue any shares of its capital stock in
a reclassification of the Preferred Stock (including any such reclassification in connection with a consolidation or merger in which the Corporation is the continuing or surviving corporation), except
as otherwise provided in this Section 11.1 and Section 7.6 hereof, the Purchase Price in effect at the time of the record date for such dividend or of the effective date of such
subdivision, combination or reclassification, and the number and kind of shares of capital stock issuable on such date, shall be proportionately adjusted so that the holder of any Right exercised
after such time shall be entitled to receive the aggregate number and kind of shares of capital stock that, if such Right had been exercised immediately prior to such date and at a time when the
Preferred Stock transfer books of the Corporation were open, such holder would have owned upon such exercise and been entitled to receive by virtue of such dividend, subdivision, combination or
reclassification; provided, however, that in no event shall the consideration to be paid upon the
exercise of one Right be less than the aggregate par value, if any, of the shares of capital stock of the Corporation issuable upon exercise of one Right. If an event 

11

 

occurs
that would require an adjustment under both Section 11.1.1 and Section 11.1.2, the adjustment provided for in this Section 11.1.1 shall be in addition to, and shall be made
prior to, any adjustment required pursuant to Section 11.1.2. 

        11.1.2.    In
the event (a "Section 11.1.2 Event") that any Person, alone or together with its Affiliates and Associates,
shall become an Acquiring Person, then proper provision shall be made so that each holder of a Right (except as provided below and in Section 7.6 hereof) shall, for a period of sixty
(60) days (or such longer period as the Corporation's Board of Directors may determine at any time prior to or during such period of sixty (60) days) after the later of the occurrence of
any such event or the effective date of an appropriate registration statement under the Act pursuant to Section 9.5 hereof, have a right to receive, upon exercise thereof at a price equal to
the then current Purchase Price, in accordance with the terms of this Agreement, such number of shares of Common Stock (or, in the discretion of the Corporation's Board of Directors, one
one-thousandths (1/1000ths) of a share of
Preferred Stock) as shall equal the result obtained by (x) multiplying the then current Purchase Price by the then number of one one-thousandths (1/1000ths) of a share of Preferred
Stock for which a Right was exercisable immediately prior to the first occurrence of a Section 11.1.2 Event, and (y) dividing that product by 50% of the then current per share market
price of the Common Stock (determined pursuant to Section 11.4 hereof) on the date of such first occurrence (such number of shares being referred to as the "Adjustment
Shares"); provided, however, that if the transaction that would otherwise give
rise to the foregoing adjustment is also subject to the provisions of Section 13 hereof, then only the provisions of Section 13 hereof shall apply and no adjustment shall be made
pursuant to this Section 11.1.2. 

        11.1.3.    In
the event that there shall not be sufficient treasury or authorized but unissued (and unreserved) Common Stock to permit the exercise in full of the Rights in
accordance with Section 11.1.2 and the Rights become so exercisable (and the Board of Directors of the Corporation has not determined to make the Rights exercisable solely into fractions of a
share of Preferred Stock), notwithstanding any other provision of this Agreement, to the extent necessary and permitted by applicable law, each Right (except as provided below and in
Section 7.6 hereof) shall thereafter represent the right to receive, upon exercise thereof at the then current Purchase Price in accordance with the terms of this Agreement, (x) a number
of (or fractions of) shares of Common Stock calculated by dividing the maximum number of shares of Common Stock that may permissibly be issued by the number of outstanding Rights and (y) a
number of one one-thousandths (1/1000ths) of shares of Preferred Stock or a number of, or fractions of, other equity securities of the Corporation (or, in the discretion of the Board of
Directors of the Corporation, debt) that the Board of Directors of the Corporation has determined to have an aggregate current market value (determined pursuant to Section 11.1.1 and
Section 11.1.2 hereof, to the extent applicable) equal to the difference between (1) the aggregate current market value of the Adjustment Shares (assuming such shares of Common Stock
could be issued pursuant to Section 11.1.2 hereof) and (2) the aggregate current market value of the shares of Common Stock issued in respect of such Right pursuant to the preceding
clause (x) (such number of, or fractions of, shares of Preferred Stock, debt or other equity securities or debt of the Corporation being referred to as a "Capital Stock
Equivalent"); provided, however, if sufficient shares of Common Stock and/or
Capital Stock Equivalents are unavailable, then the Corporation shall, to the extent permitted by applicable law, take all such action as may be necessary to authorize additional shares of Common
Stock or Capital Stock Equivalents for issuance upon exercise of the Rights, including the calling of a meeting of stockholders; and provided, further, that if the Corporation is unable to cause
sufficient shares of Common Stock and/or Capital Stock Equivalents to be available for issuance upon exercise in full of the Rights, then each Right shall thereafter represent the right to receive the
Adjusted Number of Shares upon exercise at 

12

 

the
Adjusted Purchase Price (as such terms are hereinafter defined). As used herein, the term "Adjusted Number of Shares" shall be equal to that number
of (or fractions of) shares of Common Stock (and/or Capital Stock Equivalents) equal to the product of (x) the number of Adjustment Shares and (y) a fraction, the numerator of which is
the number of shares of Common Stock (and/or Capital Stock Equivalents) available for issuance upon exercise of the Rights and the denominator of which is the aggregate number of Adjustment Shares
otherwise issuable upon exercise in full of all Rights (assuming there were a sufficient number of shares of Common Stock available) (such fraction being referred to as the
"Proration Factor"). The "Adjusted Purchase Price" shall mean the product of the Purchase Price and the
Proration Factor. The Board of Directors of the Corporation may, but shall not be required to, establish procedures to allocate the right to receive shares of Common Stock and Capital Stock
Equivalents upon exercise of the Rights among holders of Rights. 

        11.2.    In
case the Corporation shall fix a record date for the issuance of rights (other than the Rights), options or warrants to all holders of Preferred Stock entitling
them (for a period expiring within 45 calendar days after such record date) to subscribe for or purchase shares of Preferred Stock (or shares having the same rights, privileges and preferences as the
Preferred Stock ("Equivalent Preferred Stock")) or securities convertible into Preferred Stock or Equivalent Preferred Stock at a price per share of
Preferred Stock or Equivalent Preferred Stock (or having a conversion price per share, if a security convertible into shares of Preferred Stock or Equivalent Preferred Stock) less than the then
current per share market price of the Preferred Stock (as determined pursuant to Section 11.4 hereof) on such record date, the Purchase Price to be in effect after such record date shall be
determined by multiplying the Purchase Price in effect immediately prior to such record date by a fraction, the numerator of which shall be the number of shares of Preferred Stock outstanding on such
record date plus the number of shares of Preferred Stock that the aggregate offering price of the total number of shares of Preferred Stock and/or Equivalent Preferred Stock so to be offered (and/or
the aggregate initial conversion price of the convertible securities so to be offered) would purchase at such current per share market price, and the denominator of which shall be the number of shares
of Preferred Stock outstanding on such record date plus the number of additional shares of Preferred Stock and/or Equivalent Preferred Stock to be offered for subscription or purchase (or into which
the convertible securities so to be offered are initially convertible); provided, however, that in no
event shall the consideration to be paid upon the exercise of one Right be less than the aggregate par value, if any, of the shares of capital stock of the Corporation issuable upon exercise of one
Right. In case such subscription price may be paid in a consideration part or all of which shall be in a form other than cash, the value of such consideration shall be determined in good faith by the
Board of Directors of the Corporation, whose determination shall be described in a statement filed with the Rights Agent and shall be binding on the Rights Agent and the holders of the Rights.
Preferred Stock owned by or held for the account of the Corporation shall not be deemed outstanding for the purpose of any such computation. Such adjustment shall be made successively whenever such a
record date is fixed; and in the event that such rights, options or warrants are not so issued, the Purchase Price shall be adjusted to be the Purchase Price that would then be in effect if such
record date had not been fixed. 

        11.3.    In
case the Corporation shall fix a record date for the making of a distribution to all holders of the Preferred Stock (including any such distribution made in
connection with a consolidation or merger in which the Corporation is the continuing or surviving corporation) of evidences of indebtedness or assets (other than a regular quarterly cash dividend or a
dividend payable in Preferred Stock) or subscription rights or warrants (excluding those referred to in Section 11.2 hereof), the Purchase Price to be in effect after such record date shall be
determined by multiplying the Purchase Price in effect immediately prior to such record date by a fraction, the numerator of which shall be the then current per share market price (as determined
pursuant to 

13

 

Section 11.4
hereof) of the Preferred Stock on such record date, less the fair market value (as determined in good faith by the Board of Directors of the Corporation, whose determination shall
be described in a statement filed with the Rights Agent and shall be binding on the Rights Agent and the holders of the Rights) of the portion of the assets or evidences of indebtedness so to be
distributed or of such subscription rights or warrants applicable to one share of Preferred Stock, and the denominator of which shall be such current per share market price of the Preferred Stock;  provided, however, that in no event shall the consideration to be paid upon the exercise of one Right be
less than the aggregate par value, if any, of the shares of capital stock of the Corporation to be issued upon exercise of one Right. Such adjustments shall be made successively whenever such a record
date is fixed; and in the event that such distribution is not so made, the Purchase Price shall again be adjusted to be the Purchase Price that would then be in effect if such record date had not been
fixed. 

        11.4.    Computation of "Current Per Share Market Price."    

        11.4.1.    For
the purpose of any computation hereunder, the "current per share market price" of any security (a "Security" for the purpose of this Section 11.4.1) on
any date shall be deemed to be the average of the daily closing prices per share of such Security for the thirty (30) consecutive Trading Days immediately prior to and not including such date;  provided, however, that in the event that the current per share market price of the Security is
determined during a period following the announcement by the issuer of such Security of (A) a dividend or distribution on such Security payable in shares of such Security or securities
convertible into such shares, or (B) any subdivision, combination or reclassification of such Security and prior to the expiration of thirty (30) Trading Days after (but not including)
the ex-dividend date for such dividend or distribution, or the record date for such subdivision, combination or reclassification, then, and in each such case, the current per share market
price shall be appropriately adjusted to reflect the current market price per share equivalent of such Security. The closing price for each day shall be the last sale price, regular way, or, in case
no such sale takes place on such day, the average of the closing bid and asked prices, regular way, in either case as reported in the principal consolidated transaction reporting system with respect
to securities listed or admitted to trading on the Frankfurt Stock Exchange or, if the Security is not listed or admitted to trading on the Frankfurt Stock Exchange, as reported in the principal
consolidated transaction reporting system with respect to securities listed on the principal national securities exchange on which the Security is listed or admitted to trading or, if the Security is
not listed or admitted to trading on any national securities exchange, the last quoted price or, if not so quoted, the average of the high bid and low asked prices in the
over-the-counter market, as reported by the National Association of Securities Dealers, Inc. Automated Quotations System
("NASDAQ") or such other system then in use, or, if on any such date the Security is not quoted by any such organization, the average of the closing bid
and asked prices as furnished by a
professional market maker making a market in the Security selected by the Board of Directors of the Corporation. If on any such date no such market maker is making a market in the Security, the fair
value of the Security on such date as determined in good faith by the Board of Directors of the Corporation shall be used. The term "Trading Day" shall
mean a day on which the principal national securities exchange on which the Security is listed or admitted to trading is open for the transaction of business or, if the Security is not listed or
admitted to trading on any national securities exchange, a Business Day. 

        11.4.2.    For
the purpose of any computation hereunder, the "current per share market price" of the Preferred Stock shall be determined in accordance with the method set forth
in Section 11.4.1. If the shares of Preferred Stock are not publicly traded, the "current per share market price" of the Preferred Stock shall be conclusively deemed to be the current per share 

14

 

market
price of the Common Stock as determined pursuant to Section 11.4.1 (appropriately adjusted to reflect any stock split, stock dividend or similar transaction occurring after the date
hereof), multiplied by 1,000. If neither the Common Stock nor the Preferred Stock are publicly held or so listed or traded, "current per share market price" shall mean, with respect to the Preferred
Stock, the fair value per share as determined in good faith by the Board of Directors of the Corporation, whose determination shall be described in a statement filed with the Rights Agent and shall be
binding on the Rights Agent and the holders of the Rights. 

        11.5.    Anything
herein to the contrary notwithstanding, no adjustment in the Purchase Price shall be required unless such adjustment would require an increase or decrease of
at least 1% in the Purchase Price; provided, however, that any adjustments that by reason of this
Section 11.5 are not required to be made shall be carried forward and taken into account in any subsequent adjustment. All calculations under this Section 11 shall be made to the nearest
cent or to the nearest one one-thousandth (1/1000th) of a share of Preferred Stock or of any other share or security as the case may be. Notwithstanding the first sentence of this
Section 11.5, any adjustment required by this Section 11 shall be made no later than the earlier of (i) three (3) years from the date of the transaction that mandates such
adjustment or (ii) the Final Expiration Date. 

        11.6.    If
as a result of an adjustment made pursuant to Section 11.1.2 or Section 13.1 hereof, the holder of any Right thereafter exercised shall become
entitled to receive any shares of capital stock of the Corporation other than Preferred Stock, thereafter the number of other shares so receivable upon exercise of any Right shall be subject to
adjustment from time to time in a manner and on terms as nearly equivalent as practicable to the provisions with respect to the Preferred Stock contained in Section 11.1 through 11.3,
inclusive, and the provisions of Sections 7, 9, 10, 13 and 14 with respect to the Preferred Stock shall apply on like terms to any such other shares. 

        11.7.    All
Rights originally issued by the Corporation subsequent to any adjustment made to the Purchase Price hereunder shall evidence the right to purchase, at the adjusted
Purchase Price, the number of one one-thousandths (1/1000ths) of a share of Preferred Stock purchasable
from time to time hereunder upon exercise of the Rights, all subject to further adjustment as provided herein. 

        11.8.    The
Corporation may elect on or after the date of any adjustment of the Purchase Price to adjust the number of Rights, in lieu of any adjustment in the number of one
one-thousandths (1/1000ths) of a share of Preferred Stock purchasable upon the exercise of a Right. Each of the Rights outstanding after such adjustment of the number of Rights shall be
exercisable for the number of one one-thousandths (1/1000ths) of a share of Preferred Stock for which a Right was exercisable immediately prior to such adjustment. Each Right held of
record prior to such adjustment of the number of Rights shall become that number of Rights (calculated to the nearest one ten-thousandth) obtained by dividing the Purchase Price in effect
immediately prior to adjustment of the Purchase Price by the Purchase Price in effect immediately after adjustment of the Purchase Price. The Corporation shall make a public announcement of its
election to adjust the number of Rights, indicating the record date for the adjustment, and, if known at the time, the amount of the adjustment to be made, and shall deliver a copy of such public
announcement to the Rights Agent. This record date may be the date on which the Purchase Price is adjusted or any day thereafter, but, if the Right Certificates have been issued, shall be at least ten
(10) days later than the date of the public announcement. If Right Certificates have been issued, upon each adjustment of the number of Rights pursuant to this Section 11.8, the
Corporation shall, as promptly as practicable, cause to be distributed to holders of record of Right Certificates on such record date Right Certificates evidencing, subject to Section 14
hereof, the additional Rights to which such holders shall be entitled as a result of such adjustment, or, at the option of the Corporation, shall cause to be distributed to such holders of record in
substitution 

15

 

and
replacement for the Right Certificates held by such holders prior to the date of adjustment, and upon surrender thereof, if required by the Corporation, new Right Certificates evidencing all the
Rights to which such holders shall be entitled after such adjustment. Right Certificates so to be distributed shall be issued, executed and countersigned in the manner provided for herein and shall be
registered in the names of the holders of record of Right Certificates on the record date specified in the public announcement. 

        11.9.    Irrespective
of any adjustment or change in the Purchase Price or the number of one one-thousandths (1/1000ths) of a share of Preferred Stock issuable upon
the exercise of the Rights, the Right Certificates theretofore and thereafter issued may continue to express the Purchase Price and the number of one one-thousandths (1/1000ths) of a share
of Preferred Stock that were expressed in the initial Right Certificates issued hereunder. 

        11.10.    Before
taking any action that would cause an adjustment reducing the Purchase Price below the then par value, if any, of the number of one one-thousandths
(1/1000ths) of a share of Preferred Stock, share of Common Stock or other securities issuable upon exercise of the Rights, the Corporation shall take any corporate action that may, in the opinion of
its counsel, be necessary in order that the Corporation may validly and legally issue such number of fully paid and non-assessable one one-thousandths (1/1000ths) of a share of
Preferred Stock, share of Common Stock or other securities at such adjusted Purchase Price. 

        11.11.    In
any case in which this Section 11 shall require that an adjustment in the Purchase Price be made effective as of a record date for a specified event, the
Corporation may elect to defer until the occurrence of such event the issuance to the holder of any Right exercised after such record date of the Preferred Stock, shares of Common Stock or other
securities of the Corporation, if any, issuable upon such exercise over and above the Preferred Stock, shares of Common Stock or other securities of the Corporation, if any, issuable upon such
exercise on the basis of the Purchase Price in effect prior to such adjustment; provided, however, that
the Corporation shall deliver to such holder a due bill or other appropriate instrument evidencing such holder's right to receive such additional shares upon the occurrence of the event requiring such
adjustment and shall deliver to the Rights Agent a notice describing the terms of such due bill or other appropriate instrument. 

        11.12.    Anything
in this Section 11 to the contrary notwithstanding, the Corporation shall be entitled to make such reductions in the Purchase Price, in addition to
those adjustments expressly required by this Section 11, as and to the extent that the Corporation in its sole discretion shall determine to be advisable in order that any
(i) consolidation or subdivision of the Preferred Stock, (ii) issuance wholly for cash of Preferred Stock at less than the current market price, (iii) issuance wholly for cash of
Preferred Stock or securities that by their terms are convertible into or exchangeable for Preferred Stock, (iv) stock dividends or (v) issuance of rights, options or warrants referred
to in this Section 11, hereafter made by the Corporation to holders of its Preferred Stock shall not be taxable to such holders. 

        11.13.    The
Corporation covenants and agrees that it shall not, at any time after the Distribution Date, (i) consolidate with any other Person (other than a Subsidiary
of the Corporation in a transaction that does not violate Section 11.14 hereof), (ii) merge with or into any other Person (other than a Subsidiary of the Corporation in a transaction
that does not violate Section 11.14 hereof), or (iii) sell or transfer (or permit any Subsidiary to sell or transfer), in one transaction, or a series of related transactions, assets or
earning power aggregating more than 50% of the assets or earning power of the Corporation and its Subsidiaries (taken as a whole) to any other Person or Persons (other than the Corporation and/or any
of its Subsidiaries in one or more transactions each of which does not violate Section 11.14 hereof), if (x) at the time of or immediately after such consolidation, merger, sale or
transfer, there are any charter or bylaw 

16

 

provisions
or any rights, warrants or other instruments or securities outstanding or agreements in effect or other actions taken that would materially diminish or otherwise eliminate the benefits
intended to be afforded by the Rights or (y) prior to, simultaneously with or immediately after such consolidation, merger, sale or transfer, the stockholders of the Person who constitutes, or
would constitute, the "Principal Party" for purposes of Section 13.1 hereof shall have received a distribution of Rights previously owned by such Person or any of its Affiliates and Associates.
The Corporation shall not consummate any such consolidation, merger, sale or transfer unless prior thereto the Corporation and such other Person shall have executed and delivered to the Rights Agent a
supplemental agreement evidencing compliance with this Section 11.13. 

        11.14.    The
Corporation covenants and agrees that, after the Distribution Date, it will not, except as permitted by Section 23 or Section 25.2 hereof, take (or
permit any Subsidiary to take) any action the purpose of which is to, or if at the time such action is taken it is reasonably foreseeable that the effect of such action is to, materially diminish or
otherwise eliminate the benefits intended to be afforded by the Rights. 

        11.15.    The
exercise of Rights under Section 11.1.2 shall only result in the loss of rights under Section 11.1.2 to the extent so exercised and shall not
otherwise affect the rights represented by the Rights under this Agreement, including the rights represented by Section 13. 

        12.    Certificate of Adjusted Purchase Price or Number of Shares.    

        Whenever
an adjustment is made as provided in Section 11 or Section 13 hereof, the Corporation shall promptly (a) prepare a certificate setting forth such adjustment
and a brief, reasonably detailed statement of the facts, computations and methodology accounting for such adjustment, (b) file with the Rights Agent and with each transfer agent for the Common
Stock and the Preferred Stock a copy of such certificate and (c) mail a brief summary thereof to each holder of a Right Certificate in accordance with Section 25.1 hereof. The Rights
Agent shall be fully protected in relying on any such certificate and on any adjustment therein contained and shall have no duty with respect to, and shall not be deemed to have knowledge of, such
adjustment unless and until it shall have received such certificate. 

        13.    Consolidation, Merger or Sale or Transfer of Assets or Earning Power.    

        13.1.    In
the event that, on or following the Shares Acquisition Date, directly or indirectly, (x) the Corporation shall consolidate with, or merge with and into, any
Interested Stockholder or, if in such merger or consolidation all holders of shares of Common Stock are not treated alike, any other Person, (y) the Corporation shall consolidate with, or merge
with, any Interested Stockholder or, if in such merger or consolidation all holders of shares of Common Stock are not treated alike, any other Person, and the Corporation shall be the continuing or
surviving corporation of such consolidation or merger (other than, in a case of any transaction described in (x) or (y), a merger or consolation that would result in all of the securities generally
entitled to vote in the election of directors of the Corporation ("voting securities") outstanding immediately prior thereto continuing to represent (either by remaining outstanding or by being
converted into securities of the surviving entity) all of the voting securities of the Corporation or such voting surviving entity outstanding immediately after such merger or consolidation and the
holders of such securities not having changed as a result of such merger or consolidation), or (z) the Corporation shall sell or otherwise transfer (or one or more of its Subsidiaries shall
sell or otherwise transfer), in one transaction or a series of related transactions, assets or earning power aggregating more than 50% of the assets or earning power of the Corporation and its
Subsidiaries (taken as a whole) to any Interested Stockholder or Stockholders or, if in such transaction all holders of Common Stock are not treated alike, any other Person (other than the Corporation
or any Subsidiary of the Corporation in one or more transactions each of which does not violate Section 11.14 hereof), then, and in each such case (except as provided in Section 13.4
hereof), 

17

 

proper
provision shall be made so that (i) each holder of a Right, except as provided in Section 7.6 hereof, shall thereafter have the right to receive, upon the exercise thereof at a
price equal to the then current Purchase Price, in accordance with the terms of this Agreement and in lieu of Preferred Stock, such number of freely tradeable shares of Common Stock of the Principal
Party, not subject to any liens, encumbrances, rights of first refusal or other adverse claims, as shall equal the result obtained by (A) multiplying the then current Purchase Price by the
number of one one-thousandths (1/1000ths) of a share of Preferred Stock for which a Right is then exercisable (without taking into account any adjustment previously made pursuant to
Section 11.1.2) and dividing that product by (B) 50% of the then current per share market price of the Common Stock of such Principal Party (determined pursuant to Section 11.4
hereof) on the date of consummation of such Section 13 Event; (ii) such Principal Party shall thereafter be liable for, and shall assume, by virtue of such Section 13 Event, all
the obligations and duties of the Corporation pursuant to this Agreement; (iii) the term "Corporation" shall thereafter be deemed to refer to such Principal Party, it being specifically
intended that the provisions of Section 11 hereof shall apply only to such Principal Party following the first occurrence of a Section 13 Event; and (iv) such Principal Party
shall take such steps (including, but not limited to, the reservation of a sufficient number of its shares of Common Stock) in connection with the consummation of any such transaction as may be
necessary to assure that the provisions hereof shall thereafter be applicable, as nearly as reasonably may be, in relation to the shares of Common Stock thereafter deliverable upon the exercise of the
Rights. 

        13.2.    "Principal Party" shall mean: 

        13.2.1.    in
the case of any transaction described in clause (x) or (y) of the first sentence of Section 13.1, the Person that is the issuer of any securities
into which shares of Common Stock of the Corporation are converted in such merger or consolidation, and if no securities are so issued, the Person that is the
other party to such merger or consolidation (including, if applicable, the Corporation if it is the surviving corporation); and 

        13.2.2.    in
the case of any transaction described in clause (z) of the first sentence of Section 13.1, the Person that is the party receiving the greatest
portion of the assets or earning power transferred pursuant to such transaction or transactions; provided,  however, that in any of the foregoing cases,
(1) if the Common Stock of such Person is not at such time and has not been continuously over the
preceding twelve (12) month period registered under Section 12 of the Exchange Act, and such Person is a direct or indirect Subsidiary of another Person the shares of Common Stock of
which are and have been so registered, "Principal Party" shall refer to such other Person; (2) in case such Person is a Subsidiary, directly or indirectly, of more than one Person, the shares
of Common Stock of two or more of which are and have been so registered, "Principal Party" shall refer to whichever of such Persons is the issuer of the Common Stock having the greatest aggregate
market value; and (3) in case such Person is owned, directly or indirectly, by a joint venture formed by two or more Persons that are not owned, directly or indirectly, by the same Person, the
rules set forth in (1) and (2) above shall apply to each of the chains of ownership having an interest in such joint venture as if such party were a "Subsidiary" of both or all of such joint venturers
and the Principal Parties in each such chain shall bear the obligations set forth in this Section 13 in the same ratio as their direct or indirect interests in such Person bear to the total of
such interests. 

        13.3.    The
Corporation shall not consummate any such consolidation, merger, sale or transfer unless the Principal Party shall have a sufficient number of its authorized
shares of Common Stock that have not been issued or reserved for issuance to permit the exercise in full of the Rights in accordance with this Section 13 and unless prior thereto the
Corporation and such Principal Party shall have executed and delivered to the Rights Agent a supplemental agreement providing for the terms set forth in Sections 13.1 and 13.2 and further
providing that, as soon as practicable after 

18

 

the
date of any consolidation, merger, sale or transfer mentioned in Section 13.1, the Principal Party at its own expense shall: 

        13.3.1.    prepare
and file a registration statement under the Act with respect to the Rights and the securities purchasable upon exercise of the Rights on an appropriate form,
and will use its best efforts to cause such registration statement to (A) become effective as soon as practicable after such filing and (B) remain effective (with a prospectus at all
times meeting the requirements of the Act) until the Final Expiration Date; 

        13.3.2.    use
its best efforts to qualify or register the Rights and the securities purchasable upon exercise of the Rights under the blue sky laws of such jurisdictions as
may be necessary or appropriate; and 

        13.3.3.    deliver
to holders of the Rights historical financial statements for the Principal Party that comply in all respects with the requirements for registration on
Form 10 under the Exchange Act. 

        The
provisions of this Section 13 shall similarly apply to successive mergers or consolidations or sales or other transfers. The rights under this Section 13 shall be in
addition to the rights to exercise Rights and adjustments under Section 11.1.2 and shall survive any exercise thereof. 

        13.4.    Notwithstanding
anything in this Agreement to the contrary, the foregoing provisions of this Section 13 shall not be applicable to a transaction described in
clauses (x) and (y) of Section 13.1 if: (i) such transaction is consummated with a Person or Persons who acquired shares of Common Stock pursuant to a Permitted Offer (or a wholly
owned Subsidiary of any such Person or Persons); (ii) the price per share of Common Stock offered in such transaction is not less than the price per share of Common Stock paid to all holders of
shares of Common Stock whose shares were purchased pursuant to such Permitted Offer; and (iii) the form of consideration offered in such transaction is the same as the form of consideration
paid pursuant to such Permitted Offer. Upon consummation of any such transaction contemplated by this Section 13.4, all Rights hereunder shall expire. 

        14.    Fractional Rights and Fractional Shares.    

        14.1.    The
Corporation shall not be required to issue fractions of Rights or to distribute Right Certificates that evidence fractional Rights. In lieu of such fractional
Rights, there shall be paid to the registered holders of the Right Certificates with regard to which such fractional Rights would otherwise be issuable an amount in cash equal to the same fraction of
the current market value of a whole Right. For the purposes of this Section 14.1, the current market value of a whole Right shall be the closing price of the Rights for the Trading Day
immediately prior to the date on which such fractional Rights would have been otherwise issuable. The closing price for any day shall be the last sale price, regular way, or, in case no such sale
takes place on such day, the average of the closing bid and asked prices, regular way, in either case as reported in the principal consolidated transaction reporting system with respect to securities
listed or admitted to trading on the Frankfurt Stock Exchange or, if the Rights are not listed or admitted to trading on the Frankfurt Stock Exchange, as reported in the principal consolidated
transaction reporting system with respect to securities listed on the principal national securities exchange on which the Rights are listed or admitted to trading or, if the Rights are not listed or
admitted to trading on any national securities exchange, the last quoted price or, if not so quoted, the average of the high bid and low asked prices in the over-the-counter
market, as reported by NASDAQ or such other system then in use or, if on any such date the Rights are not quoted by any such organization, the average of the closing bid and asked prices as furnished
by a professional market maker making a market in the Rights selected by the Board of Directors of the Corporation. If on any such date no such market maker is making a market in the Rights, the fair
value of the Rights on such date as determined in good faith by the Board of Directors of the Corporation shall be used. 

19

  

        14.2.    The
Corporation shall not be required to issue fractions of shares of Preferred Stock (other than fractions that are one one-thousandth (1/1000th) or
integral multiples of one one-thousandth (1/1000th) of a share of Preferred Stock) upon exercise of the Rights or to distribute certificates that evidence fractional shares of Preferred
Stock (other than fractions that are one one-thousandth (1/1000th) or integral multiples of one one-thousandth (1/1000th) of a share of Preferred Stock). Fractions of shares of
Preferred Stock in integral multiples of one one-thousandth (1/1000th) of a share of Preferred Stock may, at the election of the Corporation, be evidenced by depositary receipts, pursuant
to an appropriate agreement between the Corporation and a depositary selected by it; provided that such agreement shall provide that the holders of such
depositary receipts shall have the rights, privileges and preferences to which they are entitled as beneficial owners of the Preferred Stock represented by such depositary receipts. In lieu of
fractional shares of Preferred Stock that are not one one-thousandth (1/1000th) or integral multiples of one one-thousandth (1/1000th) of a share of Preferred Stock, the
Corporation shall pay to the registered holders of Right Certificates at the time such Rights are exercised as herein provided an amount in cash equal to the same fraction of the current market value
of one share of Preferred Stock. For the purposes of this Section 14.2, the current market value of a share of Preferred Stock shall be the closing price of a share of Preferred Stock (as
determined pursuant to Section 11.4.2 hereof) for the Trading Day immediately prior to the date of such exercise. 

        14.3.    Following
the occurrence of one of the transactions or events specified in Section 11 giving rise to the right to receive shares of Common Stock, Capital Stock
Equivalents (other than Preferred Stock) or other securities upon the exercise of a Right, the Corporation shall not be required to issue fractions of shares or units of such shares of Common Stock,
Capital Stock Equivalents or other securities upon exercise of the Rights or to distribute certificates that evidence fractions of such shares of Common Stock, Capital Stock Equivalents or other
securities. In lieu of fractional shares or units of such shares of Common Stock, Capital Stock Equivalents or other securities, the Corporation may pay to the registered holders of Right Certificates
at the time such Rights are exercised as herein provided an amount in cash equal to the same fraction of the current market value of a share or unit of such shares of Common Stock, Capital Stock
Equivalents or other securities. For purposes of this Section 14.3, the current market value shall be determined in the manner set forth in Section 11.4 hereof for the Trading Day
immediately prior to the date of such exercise and, if such Capital Stock Equivalent is not traded, each such Capital Stock Equivalent shall have the value of one one-thousandth (1/1000th)
of a share of Preferred Stock. 

        14.4.    The
holder of a Right by the acceptance of the Right expressly waives such holder's right to receive any fractional Rights or any fractional share upon exercise of a
Right (except as provided above). The Rights Agent shall not be deemed to have knowledge of, and shall have no duty in respect of, the issuance of fractional Rights or fractional shares unless and
until it shall have received instructions from the Corporation concerning the issuance of such fractional Rights or fractional shares. 

        15.    Rights of Action.    

        All
rights of action in respect of this Agreement, excepting the rights of action given to the Rights Agent under Section 18 hereof, are vested in the respective registered
holders of the Right Certificates (and, prior to the Distribution Date, the registered holders of shares of the Common Stock); and any registered holder of any Right Certificate (or, prior to the
Distribution Date, of shares of the Common Stock), without the consent of the Rights Agent or of the holder of any other Right Certificate (or, prior to the Distribution Date, of shares of the Common
Stock), may, in such registered holder's own behalf and for such registered holder's own benefit, enforce, and may institute and maintain any suit, action or proceeding against the Corporation to
enforce, or otherwise act in respect of, such registered holder's right to exercise the Rights evidenced by such Right Certificate in the manner provided in 

20

 

such
Right Certificate and in this Agreement. Without limiting the foregoing or any remedies available to the holders of Rights, it is specifically acknowledged that the holders of Rights would not
have an adequate remedy at law for any breach of this Agreement and will be entitled to specific performance of the obligations under, and injunctive relief against actual or threatened violations of
the obligations of any Person subject to, this Agreement. Nothing in this Section 15 is intended to modify or limit the authority of the Board of Directors under Section 25.3. 

        16.    Agreement of Right Holders.    

        Every
holder of a Right, by accepting the same, consents and agrees with the Corporation and the Rights Agent and with every other holder of a Right that: 

        16.1.    prior
to the Distribution Date, the Rights will be transferable only in connection with the transfer of the associated shares of Common Stock; 

        16.2.    after
the Distribution Date, the Right Certificates are transferable only on the registry books of the Rights Agent if surrendered at the office of the Rights Agent
designated for such purpose, duly endorsed or accompanied by a proper instrument of transfer and with the appropriate form fully executed; 

        16.3.    subject
to Section 6 and Section 7.7 hereof, the Corporation and the Rights Agent may deem and treat the Person in whose name the Right Certificate (or,
prior to the Distribution Date, the associated Common Stock certificate) is registered as the absolute owner thereof and of the Rights evidenced thereby (notwithstanding any notations of ownership or
writing on the Right Certificate or the associated Common Stock certificate made by anyone other than the Corporation or the Rights Agent) for all purposes whatsoever, and neither the Corporation nor
the Rights Agent, subject to the last sentence of Section 7.6 hereof, shall be required to be affected by any notice to the contrary; and 

        16.4.    Notwithstanding
anything in this Agreement to the contrary, neither the Corporation nor the Rights Agent shall have any liability to any holder of a Right or a
beneficial interest in a Right or other Person as a result of its inability to perform any of its obligations under this Agreement by reason of any preliminary or permanent injunction or other order,
decree, judgment or ruling (whether interlocutory or final) issued by a court of competent jurisdiction or by a governmental, regulatory or administrative agency or commission, or any statute, rule,
regulation or executive order promulgated or enacted by any governmental authority, prohibiting or otherwise restraining performance of such obligation;  provided, however, that the Corporation must use its best efforts to have any such order, decree,
judgment or ruling lifted or otherwise overturned as soon as practicable. 

        17.    Right Certificate Holder Not Deemed a Stockholder.    

        No
holder, as such, of any Right Certificate shall be entitled to vote, receive dividends or be deemed for any purpose the holder of shares of the Preferred Stock or any other securities
of the Corporation that may at any time be issuable on the exercise of the Rights represented thereby, nor shall anything contained herein or in any Right Certificate be construed to confer upon the
holder of any Right Certificate, as such, any of the rights of a stockholder of the Corporation or any right to vote for the election of directors or upon any matter submitted to stockholders at any
meeting thereof, or to give or withhold consent to any corporate action, or to receive notice of meetings or other actions affecting stockholders (except as provided in Section 24 hereof), or
to receive dividends or other distributions or to exercise any preemptive or subscription rights, or otherwise, until the Right or Rights evidenced by such Right Certificate shall have been exercised
in accordance with the provisions hereof. 

21

 

        18.    Concerning the Rights Agent.    

        18.1.    The
Corporation agrees to pay to the Rights Agent reasonable compensation for all services rendered by it hereunder and, from time to time, on demand of the Rights
Agent, its reasonable expenses and counsel fees and other disbursements incurred in the administration, preparation, delivery, amendment and execution of this Agreement and the exercise and
performance of its duties hereunder. The Corporation also agrees to indemnify the Rights Agent for, and to hold it harmless against, any loss, liability, damage, judgment, fine, penalty, claim,
demand, settlement, cost or expense incurred without gross negligence, bad faith or willful misconduct on the part of the Rights Agent, for any action taken, suffered or omitted by the Rights Agent in
connection with the acceptance and administration of this Agreement, including without limitation the costs and expenses of defending against any claim of liability arising therefrom, directly or
indirectly. The costs and expenses of enforcing this right of indemnification shall also be paid by the Corporation. The indemnity provided for herein shall survive the expiration of the Rights and
the termination of this Agreement. 

        18.2.    The
Rights Agent may conclusively rely upon and shall be authorized and protected and shall incur no liability for, or in respect of, any action taken, suffered or
omitted by it in connection with the acceptance and administration of this Agreement in reliance upon any Right Certificate or certificate for shares of Common Stock or for other securities of the
Corporation, instrument of assignment or transfer, power of attorney, endorsement, affidavit, letter, notice, direction, consent, certificate, statement or other paper or document believed by it to be
genuine and to be signed, executed and, where necessary, verified or acknowledged, by the proper Person or Persons, or otherwise upon the advice of counsel as set forth in Section 20 hereof.
The Rights Agent shall not be deemed to have knowledge of, and shall have no duty in respect of, any fact contained in such Right Certificate or certificate for shares of Common Stock or for other
securities of the Corporation, instrument of assignment or transfer, power of attorney, endorsement, affidavit, letter, notice, direction, consent, certificate, statement or other paper or document
unless and until it shall have received the same. 

        18.3.    Anything
in this Agreement to the contrary notwithstanding, in no event shall the Rights Agent be liable for special, indirect, punitive, incidental or consequential
loss or damage of any kind whatsoever (including but not limited to lost profits), even if the Rights Agent has been advised of the likelihood of such loss or damage and regardless of the form of the
action. 

        19.    Merger or Consolidation or Change of Name of Rights Agent.    

        19.1.    Any
Person into which the Rights Agent or any successor Rights Agent may be merged or with which it may be consolidated, or any Person resulting from any merger or
consolidation to which the Rights Agent or any successor Rights Agent shall be a party, or any Person succeeding to the stock transfer or all or substantially all of the shareholder services business
of the Rights Agent or any successor Rights Agent, shall be the successor to the Rights Agent under this Agreement without the execution or filing of any paper or any further act on the part of any of
the parties hereto, provided that such Person would be eligible for appointment as a successor Rights Agent under the provisions of Section 21
hereof. 

        19.2.    In
case at any time the name of the Rights Agent shall be changed and at such time any of the Right Certificates shall have been countersigned but not delivered, the
Rights Agent may adopt the countersignature under its prior name and deliver Right Certificates so countersigned; and in case at that time any of the Right Certificates shall not have been
countersigned, the Rights Agent may countersign such Right Certificates either in its prior name or in its changed name; and in all such cases such Right Certificates shall have the full force
provided in the Right Certificates and in this Agreement. 

22

 

        20.    Duties of Rights Agent.    

        20.1.    The
Rights Agent undertakes those duties and obligations, and only the duties and obligations, expressly imposed by this Agreement (and no implied duties or
obligations) upon the following terms and conditions, and no implied duties or obligations shall be read into this Agreement against the Rights Agent, by all of which the Corporation and the holders
of Right Certificates, by their acceptance thereof, shall be bound. 

        20.2.    Before
the Rights Agent acts or refrains from acting, the Rights Agent may consult with legal counsel (who may be legal counsel for the Corporation), and the advice or
opinion of such counsel shall be full and complete authorization and protection to the Rights Agent, and the Rights Agent shall incur no liability for or in respect of any action taken, suffered or
omitted by it in good faith and in accordance with such advice or opinion. 

        20.3.    Whenever
in the performance of its duties under this Agreement the Rights Agent shall deem it necessary or desirable that any fact or matter (including, without
limitation, the identity of an Acquiring Person and the determination of the current market price of any security) be proved or established by the Corporation prior to taking, suffering or omitting
any action hereunder, such fact or matter (unless other evidence in respect thereof be herein specifically prescribed) may be deemed to be conclusively proved and established by a certificate signed
by any one of the Chairman of the Board, the Chief Executive Officer, the President, any Vice President, the Treasurer or the Secretary of the Corporation and delivered to the Rights Agent; and such
certificate shall be full authorization and protection to the Rights Agent and the Rights Agent shall incur no liability for or in respect of any action taken, suffered or omitted in good faith by it
under the provisions of this Agreement in reliance upon such certificate. 

        20.4.    The
Rights Agent shall be liable hereunder only for its own gross negligence, bad faith or willful misconduct. 

        20.5.    The
Rights Agent shall not be liable for, or by reason of, any of the statements of fact or recitals contained in this Agreement or in the Right Certificates (except
its countersignature on such Right Certificates) or be required to verify the same, but all such statements and recitals are and shall be deemed to have been made by the Corporation only. 

        20.6.    The
Rights Agent shall not be under any liability or responsibility in respect of the validity of this Agreement or the execution and delivery hereof (except the due
execution hereof by the Rights Agent) or in respect of the validity or execution of any Right Certificate (except its countersignature thereof); nor shall it be responsible for any breach by the
Corporation of any covenant or condition contained in this Agreement or in any Rights Certificate; nor shall it be responsible for any change in the exercisability of the Rights (including the Rights
becoming null and void pursuant to Section 7.6 hereof) or any adjustment required under the provisions of Section 11, Section 13 or Section 26 hereof or responsible for the
manner, method or amount of any such adjustment or the ascertaining of the existence of facts that would require any such adjustment (except with respect to the exercise of Rights evidenced by Right
Certificates after receipt of the certificate described in Section 12 hereof); nor shall it by any act hereunder be deemed to make any representation or warranty as to the authorization or
reservation of any shares of Preferred Stock or shares of Common Stock to be issued pursuant to this
Agreement or any Right Certificate or as to whether any Preferred Stock or shares of Common Stock will, when issued, be validly authorized and issued, fully paid and non-assessable. 

        20.7.    The
Corporation agrees that it will perform, execute, acknowledge and deliver or cause to be performed, executed, acknowledged and delivered all such further and other
acts, instruments and assurances as may reasonably be required by the Rights Agent for the carrying out or performing by the Rights Agent of the provisions of this Agreement. 

23

 

        20.8.    The
Rights Agent is hereby authorized and directed to accept instructions with respect to the performance of its duties hereunder from any one of the Chairman of the
Board, the Chief Executive Officer, the President, any Vice President or the Secretary of the Corporation, and to apply to such officers for advice or instructions in connection with its duties, and
such instructions shall be full authorization and protection of the Rights Agent and the Rights Agent shall incur no liability for or in respect of any action taken, suffered or omitted by it in good
faith or lack of action in accordance with instructions of any such officer or for any delay in acting while waiting for those instructions. The Rights Agent shall incur no liability for or in respect
of its reliance upon the most recent instructions received by any such officer. Any application by the Rights Agent for written instructions from the Corporation may, at the option of the Rights
Agent, set forth in writing any action proposed to be taken, suffered or omitted by the Rights Agent under this Agreement and the date on or after which such action shall be taken or suffered or such
omission shall be effective. The Rights Agent shall not be liable for any action taken or suffered by, or omission of, the Rights Agent in accordance with a proposal included in any such application
on or after the date specified in such application (which date shall not be less than five (5) Business Days after the date any officer of the Corporation actually receives such application,
unless any such officer shall have consented in writing to an earlier date) unless, prior to taking any such action (or the effective date in the case of an omission), the Rights Agent shall have
received written instruction in response to such application specifying the action to be taken, suffered or omitted. 

        20.9.    The
Rights Agent and any stockholder, affiliate, director, officer or employee of the Rights Agent may buy, sell or deal in any of the Rights or other securities of
the Corporation or become pecuniarily interested in any transaction in which the Corporation may be interested, or contract with or lend money to the Corporation or otherwise act as fully and freely
as though it were not Rights Agent under this Agreement. Nothing herein shall preclude the Rights Agent from acting in any other capacity for the Corporation or for any other Person or legal entity. 

        20.10.    The
Rights Agent may execute and exercise any of the rights or powers hereby vested in it or perform any duty hereunder either itself or by or through its attorneys
or agents, and the Rights Agent shall not be answerable or accountable for any act, default, negligence or misconduct of any such attorneys or agents or for any loss to the Corporation or any other
Person resulting from any such act, default, negligence or misconduct, absent gross negligence, bad faith or willful misconduct in the selection and continued employment thereof. 

        20.11.    No
provision of this Agreement shall require the Rights Agent to expend or risk its own funds or otherwise incur any financial liability in the performance of any of
its duties hereunder or in the exercise of its rights if it believes that repayment of such funds or adequate indemnification against such risk or liability is not reasonably assured to it. 

        20.12.    If,
with respect to any Rights Certificate surrendered to the Rights Agent for exercise or transfer, the certificate attached to the form of assignment or form of
election to purchase, as the case may be, has not been completed, the Rights Agent shall not take any further action with respect to such requested exercise or transfer without first consulting with
the Corporation. 

        20.13.    The
Rights Agent shall not be required to take notice or be deemed to have notice of any fact, event or determination (including, without limitation, any dates or
events defined in this Agreement or the designee of a Person as an Acquiring Person, Affiliate or Associate), under this Agreement unless and until the Rights Agent shall be specifically notified in
writing by the Corporation of such fact, event or determination. 

24

 

        21.    Change of Rights Agent.    

        The
Rights Agent or any successor Rights Agent may resign and be discharged from its duties under this Agreement upon thirty (30) days' notice in writing mailed to the Corporation
and to each transfer agent of the Common Stock or Preferred Stock by registered or certified mail, and, at the expense of the Corporation, to the holders of the Right Certificates by first-class mail.
The Corporation may remove the Rights Agent or any successor Rights Agent upon sixty (60) days' notice in writing, mailed to the Rights Agent or successor Rights Agent, as the case may be, and
to each transfer agent of the Common Stock or Preferred Stock by registered or certified mail, and to holders of the Right Certificates by first-class mail. If the Rights Agent shall resign or be
removed or shall otherwise become incapable of acting, the Corporation shall appoint a successor to the Rights Agent. If the Corporation shall fail to make such appointment within a period of sixty
(60) days after giving notice of such removal or after it has been notified in writing of such resignation or incapacity by the resigning or incapacitated Rights Agent or by the holder of a
Right Certificate (who shall, with such notice, submit his Right Certificate for inspection by the Corporation), then the registered holder of any Right Certificate may apply to any court of competent
jurisdiction for the appointment of a new Rights Agent. Any successor Rights Agent, whether appointed by the Corporation or by such a court, shall be (i) a Person organized and doing business
under the laws of the United States or of any of the States of New York, New Jersey, Colorado or California (or of any other state of the United States so long as such Person is authorized to do
business in any of the States of New York, New Jersey, Colorado or California), in good standing, having an office in any of such States, which is subject to supervision or examination by federal or
state authority and which (or the parent corporation of which) has at the time of its appointment as Rights Agent a combined capital and surplus of at least $50,000,000 or (ii) an affiliate of
such Person. After appointment, the successor Rights Agent shall be vested with the
same powers, rights, duties and responsibilities as if it had been originally named as Rights Agent without further act or deed; but the predecessor Rights Agent shall deliver and transfer to the
successor Rights Agent any property at the time held by it hereunder, and execute and deliver any further assurance, conveyance, act or deed necessary for the purpose. In case at the time such
successor Rights Agent shall succeed to the agency created by this Agreement, any of the Right Certificates shall have been countersigned but not delivered, any such successor Rights Agent may adopt
the countersignature of a predecessor Rights Agent and deliver such Right Certificates so countersigned; and in case at that time any of the Right Certificates shall not have been countersigned, any
successor Rights Agent may countersign such Right Certificates either in the name of the predecessor or in the name of the successor Rights Agent; and in all such cases such Right Certificates shall
have the full force provided in the Right Certificates and in this Agreement. Not later than the effective date of any such appointment, the Corporation shall file notice thereof in writing with the
predecessor Rights Agent and each transfer agent of the Common Stock or Preferred Stock, and mail a notice thereof in writing to the registered holders of the Right Certificates. Failure to give any
notice provided for in this Section 21, however, or any defect therein, shall not affect the legality or validity of the resignation or removal of the Rights Agent or the appointment of the
successor Rights Agent, as the case may be. 

        22.    Issuance of New Right Certificates.    

        22.1.    Notwithstanding
any of the provisions of this Agreement or of the Rights to the contrary, the Corporation may, at its option, issue new Right Certificates evidencing
Rights in such form as may be approved by its Board of Directors to reflect any adjustment or change in the Purchase Price and the number or kind or class of shares or other securities or property
purchasable under the Right Certificates made in accordance with the provisions of this Agreement. 

        22.2.    In
connection with the issuance or sale of Common Stock following the Distribution Date and prior to the earlier of the Redemption Date and the Final Expiration Date,
the Corporation (a) shall with respect to shares of Common Stock so issued or sold pursuant to the 

25

 

exercise
of stock options or under any employee plan or arrangement, or upon the exercise, conversion or exchange of securities, notes or debentures issued by the Corporation, and (b) may in
any other case, if deemed necessary or appropriate by the Board of Directors of the Corporation, issue Right Certificates representing the appropriate number of Rights in connection with such issuance
or sale; provided, however, that (i) the Corporation shall not be obligated to issue any such
Right Certificates if, and to the extent that, the Corporation shall be advised by counsel that such issuance would create a significant risk of material adverse tax consequences to the Corporation or
the Person to whom such Right Certificate would be issued, and (ii) no Right Certificate shall be issued if, and to the extent that, appropriate adjustment shall otherwise have been made in
lieu of the issuance thereof. 

        23.    Redemption and Termination.    

        23.1.    Redemption.    

        23.1.1.    The
Board of Directors of the Corporation may, at its option, redeem all but not less than all of the then outstanding Rights at a redemption price of $0.001 per
Right, as such amount may be appropriately adjusted to reflect any stock split, stock dividend or similar transaction occurring after the date hereof (such redemption price being hereinafter referred
to as the "Redemption Price"), at any time prior to the earlier of the occurrence of a Section 11.1.2 Event or the Final Expiration Date. The
Corporation may, at its option, pay the Redemption Price either in shares of Common Stock (based on the current per share market price of the Common Stock at the time of redemption) or cash;  provided
that if the Corporation elects to pay the Redemption Price in shares of Common Stock, the Corporation shall not be required to issue any
fractional shares of Common Stock and the number of shares of Common Stock issuable to each holder of Rights shall be rounded down to the next whole share. 

        23.1.2.    In
addition, the Board of Directors of the Corporation may, at its option, at any time following the occurrence of a Section 11.1.2 Event and the expiration
of any period during which the holder of Rights may exercise the Rights under Section 11.1.2 but prior to any Section 13 Event redeem all but not less than all of the then outstanding
Rights at the Redemption Price (x) in connection with any merger, consolidation or sale or other transfer (in one transaction or in a series of related transactions) of assets or earning power
aggregating 50% or more of the earning power of the Corporation and its Subsidiaries (taken as a whole) in which all holders of shares of Common Stock are treated alike and not involving (other than
as a holder of shares of Common Stock being treated like all other such holders) an Interested Stockholder or (y) (i) if and for so long as the Acquiring Person is not thereafter the
Beneficial Owner of 15% or more of the Common Stock, and (ii) at the time of redemption no other Persons are Acquiring Persons. 

        23.2.    In
the case of a redemption permitted under Section 23.1.1, immediately upon the date for redemption set forth in (or determined in the manner specified in) a
resolution of the Board of Directors of the Corporation ordering the redemption of the Rights, and without any further action and without any notice, the right to exercise the Rights will terminate
and the only right thereafter of the holders of Rights shall be to receive the Redemption Price for each Right so held. In the case of a redemption permitted only under Section 23.1.2, the
right to exercise the Rights will terminate and represent only the right to receive the Redemption Price upon the later of ten (10) Business Days following the giving of such notice or the
expiration of any period during which the Rights may be exercised under Section 11.1.2. The Corporation shall promptly give public notice of any such redemption with prompt notice thereof to
the Rights Agent; provided, however, that the failure to give, or any defect in, any such notice shall
not affect the validity of such redemption. Within ten (10) days after such date for redemption set forth in a resolution of 

26

 

the
Board of Directors of the Corporation ordering the redemption of the Rights, the Corporation shall mail a notice of redemption to the Rights Agent and all the holders of the then outstanding
Rights at (in the case of notice to holders) their addresses as they appear upon the registry books of the Rights Agent or, prior to the Distribution Date, on the registry books of the transfer agent
for the Common Stock. Any notice which is mailed in the manner herein provided shall be deemed given, whether or not the holder receives the notice. Each such notice of redemption will state the
method by which the payment of the Redemption Price will be made. Neither the Corporation nor any of its Affiliates or Associates may redeem, acquire or purchase for value any Rights at any time in
any manner other than as specifically set forth in this Section 23 and other than in connection with the purchase of shares of Common Stock prior to the Distribution Date. 

        23.3.    The
Corporation may, at its option, discharge all of its obligations with respect to the Rights by (i) issuing a press release announcing the manner of
redemption of the Rights in accordance with this Agreement and (ii) mailing payment of the Redemption Price to the registered holders of the Rights at their addresses as they appear on the
registry books of the Rights Agent or, prior to the Distribution Date, on the registry books of the transfer agent of the Common Stock, and upon such action, all outstanding Rights and Right
Certificates shall be null and void without any further action by the Corporation. 

        24.    Notice of Certain Events.    

        24.1.    In
case the Corporation shall propose (i) to pay any dividend payable in stock of any class to the holders of its Preferred Stock or to make any other
distribution to the holders of its Preferred Stock (other than a regular quarterly cash dividend), (ii) to offer to the holders of its Preferred Stock rights or warrants to subscribe for or to
purchase any additional Preferred Stock or shares of stock of any class or any other securities, rights or options, (iii) to effect any reclassification of its Preferred Stock (other than a
reclassification involving only the subdivision of outstanding Preferred Stock), (iv) to effect any consolidation or merger into or with any other Person (other than a Subsidiary of the
Corporation in a transaction which does not violate Section 11.14 hereof), or to effect any sale or other transfer (or to permit one or more of its Subsidiaries to effect any sale or other
transfer) in one or more transactions, of 50% or more of the assets or earning power of the Corporation and its Subsidiaries (taken as a whole) to any other Person or Persons (other than the
Corporation and/or any of its Subsidiaries in one
or more transactions each of which does not violate Section 11.14 hereof), or (v) to effect the liquidation, dissolution or winding up of the Corporation, then, in each such case, the
Corporation shall give the Rights Agent and to each holder of a Right Certificate, in accordance with Section 25 hereof, a notice of such proposed action which shall specify the record date for
the purposes of such stock dividend or distribution of rights or warrants, or the date on which such reclassification, consolidation, merger, sale, transfer, liquidation, dissolution or winding up is
to take place and the date of participation therein by the holders of the Preferred Stock, if any such date is to be fixed, and such notice shall be so given in the case of any action covered by
clause (i) or (ii) above at least twenty (20) days prior to the record date for determining holders of the Preferred Stock for purposes of such action, and in the case of any such other
action, at least twenty (20) days prior to the date of the taking of such proposed action or the date of participation therein by the holders of the Preferred Stock, whichever shall be the
earlier. 

        24.2.    In
case of a Section 11.1.2 Event, then (i) the Corporation shall as soon as practicable thereafter give to each holder of a Right Certificate, in
accordance with Section 25.1.3 hereof, a notice of the occurrence of such event, which notice shall describe such event and the consequences of such event to holders of Rights under
Section 11.1.2 hereof, and (ii) all references in the preceding Section 24.1 to Preferred Stock shall be deemed thereafter to refer also to shares of Common Stock and/or, if
appropriate, other securities of the Corporation. 

27

 

        25.    Miscellaneous.    

        25.1.    Notices.    

        25.1.1.    Notices
or demands authorized by this Agreement to be given or made by the Rights Agent or by the holder of any Right Certificate to or on the Corporation shall be
sufficiently given or made if sent by registered or certified mail and shall be deemed given upon receipt, addressed (until another address is filed in writing with the Rights Agent) as follows: 

MacroPore
Biosurgery, Inc.

6740 Top Gun Street

San Diego, California 92121

Attention: Corporate Secretary 

        25.1.2.    Subject
to the provisions of Section 21 hereof, any notice or demand authorized by this Agreement to be given or made by the Corporation or by the holder of
any Right Certificate to or on the Rights Agent shall be sufficiently given or made if sent registered or certified mail and shall be
deemed given upon receipt, addressed (until another address is filed in writing with the Corporation) as follows: 

Computershare
Trust Company, Inc.

350 Indiana Street, Suite 800

Golden, Colorado 80401

Attention: Theresa Henshaw 

        25.1.3.    Notices
or demands authorized by this Agreement to be given or made by the Corporation or the Rights Agent to the holder of any Right Certificate or, if prior to the
Distribution Date, to the holder of certificates representing shares of Common Stock shall be sufficiently given or made if sent by first-class mail, postage prepaid, addressed to such holder at the
address of such holder as shown on the registry books of the Corporation. 

        25.2.    Supplements and Amendments.    The Corporation may from time to time supplement or amend any provision of
this Agreement without the approval of any holders of Rights in order to cure any ambiguity, to correct, supplement or amend any provision herein, or to make any other provision with respect to the
Rights which the Corporation may deem necessary or desirable, any such supplement or amendment to be evidenced by a writing signed by the Corporation and the Rights Agent;  provided, however, that from and after any Shares Acquisition Date this Agreement shall not be amended
in any manner which will adversely affect the interests of the holders of Rights. Upon the delivery of a certificate from an appropriate officer of the Corporation which states that the proposed
supplement or amendment is in compliance with the terms of this Section 25.2, and, if requested by the Rights Agent, an opinion of counsel, the Rights Agent shall execute such supplement or
amendment. Prior to the Distribution Date, the interests of the holders of Rights shall be deemed coincident with the interests of the holders of shares of Common Stock. This Agreement shall not be
amended, without the prior written consent of the Rights Agent, in any manner that changes or increases the duties, liabilities or obligations of the Rights Agent. 

        25.3.    Determination and Actions by the Board of Directors, etc.    The Board of Directors of the Corporation shall
have the exclusive power and authority to administer this Agreement and to exercise all rights and powers specifically granted to the Board, or the Corporation, or as may be necessary or advisable in
the administration of this Agreement, including without limitation, the right and power to (i) interpret the provisions of this Agreement, and (ii) make all determinations deemed
necessary or advisable for the administration of this Agreement (including, without limitation, a determination to redeem or not redeem the Rights or to amend the Agreement and 

28

 

whether
any proposed amendment adversely affects the interests of the holders of Right Certificates). For all purposes of this Agreement, any calculation of the number of shares of Common Stock or
other securities outstanding at any particular time, including for purposes of determining the particular percentage of such outstanding shares of Common Stock or any other securities of which any
Person is the Beneficial Owner, shall be made in accordance with the last sentence of Rule 13d-3(d)(1)(i) of the General Rules and Regulations under the Exchange Act as in effect on
the date of this Agreement. All such actions, calculations, interpretations and determinations (including, for purposes of clause (y) below, all omissions with respect to the foregoing) which
are done or made by the Board in good faith, shall (x) be final, conclusive and binding on the Corporation, the Rights Agent, the holders of the Right Certificates and all other Persons, and
(y) not subject the Board to any liability to the holders of the Right Certificates. The Rights Agent shall be fully protected and shall incur no liability for or in respect of its reliance on
the good faith of the Corporation's Board of Directors with respect to actions done or made in connection with such calculation. The Rights Agent may also assume the Board of Directors acted in good
faith. Nothing in Section 15 hereof is intended to modify or limit this Section 25.3. 

        25.4.    Successors.    All the covenants and provisions of this Agreement by or for the benefit of the Corporation or
the Rights Agent shall bind and inure to the benefit of their respective successors and assigns hereunder. 

        25.5.    Benefits of this Agreement.    Nothing in this Agreement shall be construed to give to any Person or
corporation other than the Corporation, the Rights Agent and the registered holders of the Right Certificates (and, prior to the Distribution Date, the shares of Common Stock) any legal or equitable
right, remedy or claim under this Agreement. This Agreement shall be for the sole and exclusive benefit of the Corporation, the Rights Agent and the registered holders of the Right Certificates (and,
prior to the Distribution Date, the shares of Common Stock). 

        25.6.    Severability.    If any term, provision, covenant or restriction of this Agreement is held by a court of
competent jurisdiction or other authority to be invalid, void or unenforceable, the remainder of the terms, provisions, covenants and restrictions of this Agreement shall remain in full force and
effect and shall in no way be affected, impaired or invalidated. 

        25.7.    Governing Law.    This Agreement, each Right and each Right Certificate issued hereunder shall be deemed to
be a contract made under the laws of the State of Delaware and for all purposes shall be
governed by and construed in accordance with the laws of such State applicable to contracts to be made and performed entirely within such State. 

        25.8.    Counterparts.    This Agreement may be executed in any number of counterparts and each of such counterparts
shall for all purposes be deemed to be an original, and all such counterparts shall together constitute but one and the same instrument. 

        25.9.    Descriptive Headings.    Descriptive headings of the several sections of this Agreement are inserted for
convenience only and shall not control or affect the meaning or construction of any of the provisions hereof. 

        26.    Exchange.    

        26.1.    Notwithstanding
any other provision hereof, the Board of Directors of the Corporation may, at its option, at any time after any Person becomes an Acquiring Person,
exchange all or part of the then outstanding and exercisable Rights (which shall not include Rights that have become null and void pursuant to the provisions of Section 7.6 hereof) for shares
of Common Stock of the Corporation at an exchange ratio determined by dividing the then-applicable exercise price of the Rights determined under Section 7.2 by the "current per
share market price" as defined in Section 11.4.1 (such exchange ratio being hereinafter referred to as the "Exchange Ratio"). Notwithstanding the
foregoing, the Corporation's Board of Directors shall not be empowered to 

29

 

effect
such exchange at any time after any Person (other than the Corporation, any Subsidiary of the Corporation, any employee benefit plan of the Corporation or any such Subsidiary, or any Person
organized, appointed or established by the Corporation for or pursuant to the terms of any such plan or any trustee, administrator or fiduciary of such a plan), together with all Affiliates and
Associates of such Person, becomes the Beneficial Owner of more than 50% of the Common Stock then outstanding. 

        26.2.    Immediately
upon the action of the Board of Directors of the Corporation ordering the exchange of any Rights pursuant to Section 26.1 and without any further
action and without any notice, the right to exercise such rights shall terminate and the only right thereafter of the holder of such Rights (other than a holder of Rights that have become null and
void pursuant to the provisions of Section 7.6 hereof) shall be to receive that number of shares of Common Stock equal to the number of such Rights held by such holder multiplied by the
Exchange Ratio. The Corporation shall promptly give public notice, and shall promptly give notice to the Rights Agent, of any such exchange; provided,  however, that the failure to give, or any defect in, such notice shall not affect the validity of such exchange. The Corporation promptly shall mail a
notice of any such exchange to all of the holders of such Rights at their last addresses as they appear upon the registry books of the Rights Agent. Any notice which is mailed in the manner herein
provided shall be deemed given, whether or not the holder receives the notice. Each such notice of exchange shall state the method by which the exchange of the Common Stock for Rights will be effected
and, in the event of any partial exchange, the number of
Rights which will be exchanged. Any partial exchange shall be effected pro rata based on the number of Rights (other than Rights which have become void pursuant to the provisions of
Section 7.6) held by each holder of Rights. 

        26.3.    In
the event that there shall not be sufficient shares of Common Stock issued but not outstanding or authorized but unissued to permit any exchange of Rights as
contemplated in accordance with this Section 26, the Corporation shall take all such action as may be necessary to issue additional shares of Common Stock, Preferred Stock and/or Capital Stock
Equivalents with an aggregate current market value (as determined by the Board of Directors of the Corporation) equal to the aggregate current market value of a number of shares of Common Stock equal
to the Exchange Ratio. 

[REST
OF PAGE INTENTIONALLY LEFT BLANK] 

30

        IN
WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed and attested, all as of the date and year first above written. 

	 	 	MACROPORE BIOSURGERY, INC.
	Attest:	 	 	 	 
	

 	
 	

By:	
 	

/s/  CHRISTOPHER J. CALHOUN      

	 	 	Name:	 	Christopher J. Calhoun

	 	 	Title:	 	President, Chief Executive Officer

	

 	
 	

COMPUTERSHARE TRUST COMPANY, INC.,

    as Rights Agent
	

 	
 	

By:	
 	

/s/  THERESA HENSHAW      

	 	 	Name:	 	Theresa Henshaw

	 	 	Title:	 	Trust Officer / OPS Manager

	

 	
 	

COMPUTERSHARE TRUST COMPANY, INC.
	

 	
 	

By:	
 	

/s/  K. GWINN      

	 	 	Name:	 	K. Gwinn

	 	 	Title:	 	V.P.

   Exhibit A  

Certificate of Designation, Preferences and

Rights of Series RP Preferred Stock 

of 

MacroPore
Biosurgery, Inc. 

(Pursuant
to § 151 of the Delaware General Corporation Law) 

        I,
Jonathan E. Soneff, Secretary of MacroPore Biosurgery, Inc. (the "Corporation"), a corporation organized and existing under the
General Corporation Law of the State of Delaware, in accordance with the provisions of Section 103 thereof, DO HEREBY CERTIFY: 

        That
pursuant to the authority conferred upon the Board of Directors of the Corporation by the Restated Certificate of Incorporation of the Corporation, the said Board of Directors on
May 28, 2003, adopted the following resolutions creating a series of 9,500 shares of Preferred Stock designated as Series RP Preferred Stock. 

        RESOLVED,
that pursuant to the authority granted to and vested in the Board of Directors of the Corporation in accordance with the provisions of the Restated Certificate of Incorporation
of the Corporation, the Board of Directors hereby creates a series of Series RP Preferred Stock, with a par value of $0.001 per share, of the Corporation and hereby states the designation and
number of shares, and fixes the relative rights, preferences and limitations thereof as follows (the following provisions
being intended to operate in addition to any other provisions of said Restated Certificate of Incorporation applicable to any series of Preferred Stock): 

Series RP Preferred Stock 

        Section 1.    Designation, Par Value and Amount.    The shares of such series shall be designated as
"Series RP Preferred Stock" (hereinafter referred to as "Series RP Preferred Stock"), the shares of such series shall be with par value of
$0.001 per share, and the number of shares constituting such series shall be 9,500; provided, however,
that, if more than a total of 9,500 shares of Series RP Preferred Stock shall be issuable upon the exercise of Rights (the "Rights") issued
pursuant to the Rights Agreement, dated as of May 29, 2003, between the Corporation and Computershare Trust Company, Inc., as Rights Agent (as amended from time to time, the
"Rights Agreement"), the Board of Directors of the Corporation shall direct by resolution or resolutions that a certificate be properly executed,
acknowledged and filed providing for the total number of shares of Series RP Preferred Stock authorized to be issued to be increased (to the extent that the Restated Certificate of
Incorporation then permits) to the largest number of whole shares (rounded up to the nearest whole number) issuable upon exercise of the Rights. 

        Section 2.    Dividends and Distributions.    

        2.1   Subject
to the prior and superior rights of the holders of any shares of any series of Preferred Stock ranking prior and superior to the shares of Series RP
Preferred Stock with respect to dividends, the holders of shares of Series RP Preferred Stock shall be entitled to receive, when, as and if declared by the Board of Directors out of assets
legally available for the purpose, quarterly dividends payable in cash on the first business day of March, June, September and December in each year (each such date being referred to herein as a
"Quarterly Dividend Payment Date"), commencing on the first Quarterly Dividend Payment Date after the first issuance of a share or fraction of a share
of Series RP Preferred Stock, in an amount per share (rounded to the nearest cent) equal to the greater of (a) $1.00 or (b) subject to the provision for adjustment set forth in
Section 6.1, 1,000 times the aggregate per share amount of all cash dividends, and 1,000 times the aggregate per share amount (payable in kind) of all non-cash
dividends or other 

A-1

 

distributions
other than a dividend payable in shares of Common Stock, par value $0.001 per share, of the Corporation (the "Common Stock") or a
subdivision of the outstanding shares of Common Stock (by reclassification or otherwise), declared on the Common Stock since the immediately preceding Quarterly Dividend Payment Date, or, with respect
to the first Quarterly Dividend Payment Date, since the first issuance of any share or fraction of a share of Series RP Preferred Stock. 

        2.2   The
Corporation shall declare a dividend or distribution on the Series RP Preferred Stock as provided in Section 2.1 above immediately after it declares a
dividend or distribution on the Common Stock (other than a dividend payable in shares of Common Stock); provided that, in the event no dividend or
distribution shall have been declared on the Common Stock during the period between any Quarterly Dividend Payment Date and the next subsequent Quarterly Dividend Payment Date, a dividend of $1.00 per
share on the Series RP Preferred Stock shall nevertheless be payable on such subsequent Quarterly Dividend Payment Date. 

        2.3   Dividends
shall begin to accrue and be cumulative on outstanding shares of Series RP Preferred Stock from the Quarterly Dividend Payment Date next preceding the
date of issue of such shares of Series RP Preferred Stock, unless the date of issue of such shares is prior to the record date for the first Quarterly Dividend Payment Date, in which case
dividends on such shares shall begin to accrue from the date of issue of such shares, or unless the date of issue is a Quarterly Dividend Payment Date or is a date after the record date for the
determination of holders of shares of Series RP Preferred Stock entitled to receive a quarterly dividend and before such Quarterly Dividend Payment Date, in either of which events such
dividends shall begin to accrue and be cumulative from such Quarterly Dividend Payment Date. Accrued but unpaid dividends shall not bear interest. Dividends paid on the shares of Series RP
Preferred Stock in an amount less than the total amount of such dividends at the time accrued and payable on such shares shall be allocated pro rata on a share-by-share basis
among all such shares at the time outstanding. The Board of Directors may fix a record date for the determination of holders of shares of Series RP Preferred Stock entitled to receive payment
of a dividend or distribution declared thereon, which record date shall be not more than 30 days prior to the date fixed for the payment thereof. 

        Section 3.    Voting Rights.    The holders of shares of Series RP Preferred Stock shall have the
following voting rights: 

        3.1   Except
as provided in Section 3.3 and subject to the provision for adjustment hereinafter set forth, each share of Series RP Preferred Stock shall entitle
the holder thereof to 1,000 votes on all matters submitted to a vote of the stockholders of the Corporation. 

        3.2   Except
as otherwise provided herein or by law, the holders of shares of Series RP Preferred Stock and the holders of shares of Common Stock shall vote together as
one class on all matters submitted to a vote of stockholders of the Corporation. 

        3.3   The
following additional provisions shall apply with respect to the voting of shares of Series RP Preferred Stock: 

        3.3.1    If,
on the date used to determine stockholders of record for any meeting of stockholders for the election of directors, a default in preference dividends (as defined
in Section 3.3.5 below) on the Series RP Preferred Stock shall exist, the holders of the Series RP Preferred Stock shall have the right, voting as a class as described in
Section 3.3.2 below, to elect two directors (in addition to the directors elected by holders of Common Stock of the Corporation). Such right may be exercised (a) at any meeting of
stockholders for the election of directors or (b) at a meeting of the holders of shares of Voting Preferred Stock (as hereinafter defined), called for the purpose in accordance with the Bylaws
of the Corporation, 

A-2

 

until
all such cumulative dividends (referred to above) shall have been paid in full or until non-cumulative dividends have been paid regularly for at least one year. 

        3.3.2    The
right of the holders of Series RP Preferred Stock to elect two directors, as described above, shall be exercised as a class concurrently with the rights of
holders of any other series of Preferred Stock upon which voting rights to elect such directors have been conferred and are then exercisable. The Series RP Preferred Stock and any additional
series of Preferred Stock that the Corporation may issue and that may provide for the right to vote with the foregoing series of Preferred Stock are collectively referred to herein as
"Voting Preferred Stock." 

        3.3.3    Each
director elected by the holders of shares of Voting Preferred Stock shall be referred to herein as a "Preferred
Director." A Preferred Director shall continue to serve as such for a term of one year, except that upon any termination of the right of all holders of Voting Preferred Stock
to vote as a class for Preferred Directors, the term of office of Preferred Directors then serving shall terminate. Any Preferred Director may be removed by, and shall not be removed except by, the
vote of the holders of record of a majority of the outstanding shares of Voting Preferred Stock then entitled to vote for the election of directors, present (in person or by proxy) and voting together
as a single class (a) at a meeting of the stockholders, or (b) at a meeting of the holders of shares of such Voting Preferred Stock, called for the purpose in accordance with the Bylaws
of the Corporation. 

        3.3.4    So
long as a default in any preference dividends of the Series RP Preferred Stock shall exist or the holders of any other series of Voting Preferred Stock shall
be entitled to elect Preferred Directors, (a) any vacancy in the office of a Preferred Director may be filled (except as provided in the following clause (b)) by an instrument in writing
signed by the remaining Preferred Director and filed with the Corporation and (b) in the case of the removal of any Preferred Director, the vacancy may be filled by the vote or written consent
of the holders of a majority of the outstanding shares of Voting Preferred Stock then entitled to vote for the election of directors, present (in person or by proxy) and voting together as a single
class, at such time as the removal shall be effected. Each director appointed as aforesaid by the remaining Preferred Director shall be deemed, for all purposes hereof, to be a Preferred Director.
Whenever (x) no default in preference dividends on the Series RP Preferred Stock shall exist and (y) the holders of other series of Voting Preferred Stock shall no longer be
entitled to elect such Preferred Directors, then the number of directors constituting the Board of Directors of the Corporation shall be reduced by two. 

        3.3.5    For
purposes hereof, a "default in preference dividends" on the Series RP Preferred Stock shall be deemed to
have occurred whenever the amount of cumulative and unpaid dividends on the Series RP Preferred Stock shall be equivalent to six full quarterly dividends or more (whether or not consecutive),
and, having so occurred, such default shall be deemed to exist thereafter until, but only until, all cumulative dividends on all shares of the Series RP Preferred Stock then outstanding shall
have been paid through the last Quarterly Dividend Payment Date or until, but only until, non-cumulative dividends have been paid regularly for at least one year. 

        3.4   Except
as set forth herein (or as otherwise required by applicable law), holders of Series RP Preferred Stock shall have no general or special voting rights and
their consent shall not be required for taking any corporate action. 

        Section 4.    Certain Restrictions.    

        4.1   Whenever
quarterly dividends or other dividends or distributions payable on the Series RP Preferred Stock as provided in Section 2 are in arrears,
thereafter and until all accrued 

A-3

 

and
unpaid dividends and distributions, whether or not declared, on shares of Series RP Preferred Stock outstanding shall have been paid in full, the Corporation shall not: 

        4.1.1    declare
or pay dividends, or make any other distributions, on any shares of stock ranking junior (either as to dividends or upon liquidation, dissolution or winding
up) to the Series RP Preferred Stock; 

        4.1.2    declare
or pay dividends, or make any other distributions, on any shares of stock ranking on a parity (either as to dividends or upon liquidation, dissolution or
winding up) with the Series RP Preferred Stock, except dividends paid ratably on the Series RP Preferred Stock and all such parity stock on which dividends are payable or in arrears in
proportion to the total amounts to which the holders of all such shares are then entitled; 

        4.1.3    redeem
or purchase or otherwise acquire for consideration (except as provided in Section 4.1.4 below) shares of any stock ranking junior (either as to dividends
or upon liquidation, dissolution or winding up) to the Series RP Preferred Stock, provided that the Corporation may at any time redeem, purchase or otherwise acquire shares of any such junior
stock in exchange for shares of any stock of the Corporation ranking junior (either as to dividends or upon dissolution, liquidation or winding up) to the Series RP Preferred Stock; 

        4.1.4    redeem
or purchase or otherwise acquire for consideration any shares of Series RP Preferred Stock, or any shares of stock ranking on a parity (either as to
dividends or upon liquidation, dissolution or winding up) with the Series RP Preferred Stock, except in accordance with a purchase offer made in writing or by publication (as determined by the
Board of Directors) to all holders of such shares upon such terms as the Board of Directors, after consideration of the respective annual dividend rates and other relative rights and preferences of
the respective series and classes, shall determine in good faith will result in fair and equitable treatment among the respective series or classes. 

        4.2   The
Corporation shall not permit any subsidiary of the Corporation to purchase or otherwise acquire for consideration any shares of stock of the Corporation unless the
Corporation could, under Section 4.1, purchase or otherwise acquire such shares at such time and in such manner. 

        Section 5.    Reacquired Shares.    Any shares of Series RP Preferred Stock purchased or otherwise
acquired by the Corporation in any manner whatsoever shall be retired and cancelled promptly after the acquisition thereof. All such shares shall upon their cancellation become authorized but unissued
shares of Preferred Stock and may be reissued as part of a new series of Preferred Stock subject to the conditions and restrictions on issuance set forth herein, in the Certificate of Incorporation,
in any other Certificate of Amendment creating a series of Preferred Stock or as otherwise required by law. 

        Section 6.    Liquidation, Dissolution or Winding Up.    

        6.1   Subject
to the prior and superior rights of holders of any shares of any series of Preferred Stock ranking prior and superior to the shares of Series RP Preferred
Stock with respect to rights upon liquidation, dissolution or winding up (voluntary or otherwise), no distribution shall be made to the holders of shares of stock ranking junior (either as to
dividends or upon liquidation, dissolution or winding up) to the Series RP Preferred Stock unless, prior thereto, the holders of shares of Series RP Preferred Stock shall have received
per share an amount equal to the greater of 1,000 times $25.00 or 1,000 times the payment made per share of Common Stock, plus an amount equal to accrued and unpaid dividends and
distributions thereon, whether or not declared, to the date of such payment (the "Series RP Liquidation Preference"). Following the payment of
the full amount of the Series RP Liquidation Preference, no additional distributions shall be made to the holders of shares of Series RP Preferred Stock unless, prior thereto, the
holders of shares of Common Stock shall have received an amount per share (the "Capital Adjustment") equal to the 

A-4

 

quotient
obtained by dividing (i) the Series RP Liquidation Preference by (ii) 1,000 (as appropriately adjusted as set forth in Section 6.3 to reflect such events as stock
splits, stock dividends and recapitalizations with respect to the Common Stock) (such number in clause (ii) being hereafter referred to as the "Adjustment
Number"). Following the payment of the full amount of the Series RP Liquidation Preference and the Capital Adjustment in respect of all outstanding shares of
Series RP Preferred Stock and Common Stock, respectively, holders of Series RP Preferred Stock and holders of Common Stock shall receive their ratable and proportionate share of the
remaining assets to be distributed in the ratio of the Adjustment Number to 1 with respect to such Preferred Stock and Common Stock, on a per share basis, respectively. 

        6.2   In
the event, however, that there are not sufficient assets available to permit payment in full of the Series RP Liquidation Preference and the liquidation
preferences of all other series of preferred stock, if any, which rank on a parity with the Series RP Preferred Stock, then such remaining assets shall be distributed ratably to the holders of
Series RP Preferred Stock and the holders of such parity shares in proportion to their respective liquidation preferences. In the event, however, that there are not sufficient assets available
to permit payment in full of the Capital Adjustment, then such remaining assets shall be distributed ratably to the holders of Common Stock. 

        6.3   In
the event the Corporation shall (i) declare any dividend on Common Stock payable in shares of Common Stock, (ii) subdivide the outstanding Common Stock,
or (iii) combine the outstanding Common Stock into a smaller number of shares, then in each such case the Adjustment Number in effect immediately prior to such event shall be adjusted by
multiplying such Adjustment Number by a fraction the numerator of which is the number of shares of Common Stock outstanding immediately after such event and the denominator of which is the number of
shares of Common Stock that were outstanding immediately prior to such event. 

        Section 7.    Consolidation, Merger, etc.    In case the Corporation shall enter into any consolidation,
merger, combination or other transaction in which the shares of Common Stock are exchanged for or changed into other stock or securities, cash and/or any other property, then in any such case the
shares of Series RP Preferred Stock shall at the same time be similarly exchanged or changed in an amount per share equal to the Adjustment Number (as appropriately adjusted as set forth in
Section 6.3 to reflect such events as stock splits, stock dividends and recapitalizations with respect to the Common Stock) times the aggregate amount of stock, securities, cash and/or any
other property (payable in kind), as the case may be, into which or for which each share of Common Stock is changed or exchanged. 

        Section 8.    No Redemption.    The shares of Series RP Preferred Stock shall not be redeemable. 

        Section 9.    Ranking.    The Series RP Preferred Stock shall rank junior to all other series of the
Corporation's Preferred Stock as to the payment of dividends and the distribution of assets, unless the terms of any such other series shall provide otherwise. 

        Section 10.    Amendment.    The Restated Certificate of Incorporation of the Corporation shall not be further
amended in any manner that would materially alter or change the powers, preferences or special rights of the Series RP Preferred Stock so as to affect them adversely without the affirmative
vote of the holders of a majority or more of the outstanding shares of Series RP Preferred Stock, voting separately as a class. 

        Section 11.    Fractional Shares.    Series RP Preferred Stock may be issued in fractions of a share
which shall entitle the holder, in proportion to such holder's fractional shares, to exercise voting rights, receive dividends, participate in distributions and have the benefit of all other rights of
holders of Series RP Preferred Stock. 

A-5

 

        RESOLVED,
that the proper officers of the Corporation be, and each of them hereby is, authorized to execute a Certificate of Designation with respect to the Series RP Preferred
Stock pursuant to Section 151 of the General Corporation Law of the State of Delaware and to take all appropriate action to cause such Certificate to become effective, including, but not
limited to, the filing and recording of such Certificate with and/or by the Secretary of State of the State of Delaware. 

[REST
OF PAGE INTENTIONALLY LEFT BLANK] 

A-6

 

        IN
WITNESS WHEREOF, I have executed and subscribed to this Certificate and do affirm the foregoing as true under penalty of perjury this 29th day of May, 2003. 

	 	 	By:	 	/s/  JONATHAN E. SONEFF      

	 	 	Name:	 	Jonathan E. Soneff

	 	 	Title:	 	Secretary

A-7

   Exhibit B  

Form of Right Certificate 

	Certificate No. RP-	 	    
	 	Rights

NOT
EXERCISABLE AFTER MAY 29, 2013 OR EARLIER IF REDEEMED BY THE CORPORATION. THE RIGHTS ARE SUBJECT TO REDEMPTION AT $0.001 PER RIGHT ON THE TERMS SET FORTH IN THE RIGHTS AGREEMENT. 

Right
Certificate 

MACROPORE
BIOSURGERY, INC. 

        This
certifies that                        , or registered assigns, is the registered owner of the number of Rights set forth above,
each of which entitles the owner thereof, subject to the
terms, provisions and conditions of the Rights Agreement, dated as of May 29, 2003 (the "Rights Agreement"), between MacroPore Biosurgery, Inc., a Delaware corporation (the
"Corporation"), and Computershare Trust Company, Inc., a Colorado corporation, (the "Rights Agent") to purchase from the Corporation at any time after the Distribution Date (as such term is
defined in the Rights Agreement) and prior to 5:00 P.M., California time, on May 29, 2013, unless the Rights evidenced hereby shall have been previously redeemed by the Corporation, at
the principal office or offices of the Rights Agent designated for such purpose, or at the office of its successor as Rights Agent, one one-thousandth (1/1000th) of a fully paid
non-assessable share of Series RP Preferred Stock (the "Preferred Stock") of the Corporation, at a purchase price of $25.00 per one one-thousandth (1/1000th) of a share
of Preferred Stock (the "Purchase Price"), upon presentation and surrender of this Right Certificate with the Form of Election to Purchase duly executed. The number of Rights evidenced by this Right
Certificate (and the number of one one-thousandths (1/1000ths) of a share of Preferred Stock that may be purchased upon exercise hereof) set forth above, and the Purchase Price set forth
above, are the number and Purchase Price as of June 10, 2003, based on the Preferred Stock as constituted at such date. 

        Upon
the occurrence of a Section 11.1.2 Event (as such term is defined in the Rights Agreement), if the Rights evidenced by this Right Certificate are beneficially owned by
(i) an Acquiring Person or an Affiliate or Associate of an Acquiring Person, (ii) a transferee of an Acquiring Person (or of any Affiliate or Associate thereof) who becomes a transferee
after the Acquiring Person becomes such, or (iii) a transferee of an Acquiring Person (or of an Affiliate or Associate thereof) who becomes a transferee prior to or concurrently with the
Acquiring Person becoming such and receives such Rights pursuant to either (A) a transfer (whether or not for consideration) from the Acquiring Person (or from any Affiliate or Associate
thereof) to holders of equity interests in such Acquiring Person or to any Person with whom the Acquiring Person has a continuing agreement, arrangement or understanding regarding the transferred
Rights or (B) a transfer that the Board of Directors of the Corporation has determined is part of a plan, arrangement or understanding that has as a primary purpose or effect the avoidance of
Section 7.6 of the Rights Agreement, shall become null and void without any further action and no holder hereof shall have any rights whatsoever with respect to such Rights, whether under any
provision of the Rights Agreement or otherwise. 

        As
provided in the Rights Agreement, the Purchase Price and the number of one one-thousandths (1/1000ths) of a share of Preferred Stock or other securities that may be
purchased upon the exercise of the Rights evidenced by this Right Certificate are subject to modification and adjustment upon the happening of certain events, including Triggering Events (as such term
is defined in the Rights Agreement). 

B-1

 

        This
Right Certificate is subject to all of the terms, covenants and restrictions of the Rights Agreement, which terms, covenants and restrictions are hereby incorporated herein by
reference and made a part hereof and to which Rights Agreement reference is hereby made for a full description of the rights, limitations of rights, obligations, duties and immunities hereunder of the
Rights Agent, the Corporation
and the holders of the Right Certificates, which limitations of rights include the temporary suspension of the exercisability of such Rights under the specific circumstances set forth in the Rights
Agreement. Copies of the Rights Agreement are on file at the principal executive offices of the Corporation and the office of the Rights Agent. 

        This
Right Certificate, with or without other Right Certificates, upon surrender at the designated office of the Rights Agent, may be exchanged for another Right Certificate or Right
Certificates of like tenor and date evidencing Rights entitling the holder to purchase a like aggregate number of shares of Preferred Stock or other securities as the Rights evidenced by the Right
Certificate or Right Certificates surrendered shall have entitled such holder to purchase. If this Right Certificate shall be exercised in part, the holder shall be entitled to receive upon surrender
hereof another Right Certificate or Right Certificates for the number of whole Rights not exercised. 

        Subject
to the provisions of the Rights Agreement, the Rights evidenced by this Certificate may be redeemed by the Corporation at a redemption price of $0.001 per Right (subject to
adjustment as provided in the Rights Agreement) payable in cash. 

        No
fractional shares of Preferred Stock will be issued upon the exercise of any Right or Rights evidenced hereby (other than fractions that are one one-thousandth (1/1000th)
or integral multiples of one one-thousandth (1/1000th) of a share of Preferred Stock, which may, at the election of the Corporation, be evidenced by depository receipts), but in lieu
thereof a cash payment will be made, as provided in the Rights Agreement. 

        No
holder of this Right Certificate shall be entitled to vote or receive dividends or be deemed for any purpose the holder of shares of the Preferred Stock or of any other securities of
the Corporation that may at any time be issuable on the exercise hereof, nor shall anything contained in the Rights Agreement or herein be construed to confer upon the holder hereof, as such, any of
the rights of a stockholder of the Corporation or any right to vote for the election of directors or upon any matter submitted to stockholders at any meeting thereof, or to give or withhold consent to
any corporate action, or to receive notice of meetings or other actions affecting stockholders (except as provided in the Rights Agreement), or to receive dividends or other distributions or to
exercise any preemptive or subscription rights, or otherwise, until the Right or Rights evidenced by this Right Certificate shall have been exercised as provided in the Rights Agreement. 

        This
Right Certificate shall not be valid or obligatory for any purpose until it shall have been countersigned by the Rights Agent. 

B-2

 

        WITNESS
the facsimile signature of the proper officers of the Corporation and its corporate seal. Dated as of                        ,
            . 

	[SEAL]

ATTEST:	 	MACROPORE BIOSURGERY, INC.
	

By	
 	

    
	
 	

By	
 	

    

	

Name	
 	

    
	
 	

Name	
 	

    

	

Title	
 	

    
	
 	

Title	
 	

    

	

Countersigned:	
 	

 	
 	

 
	

COMPUTERSHARE TRUST COMPANY, INC.
	

By	
 	

    
	
 	

 	
 	

 
	

Name	
 	

    
	
 	

 	
 	

 
	

Title	
 	

    
	
 	

 	
 	

 

B-3

Form of Reverse Side of Right Certificate 

FORM
OF ASSIGNMENT 

(To
be executed by the registered holder if such holder desires to

transfer the Right Certificate.) 

        FOR
VALUE
RECEIVED                                        
        hereby sells, assigns and transfers unto
 

	    
 (Please print name and address of transferee)
	    
 this Right Certificate, together with all right, title and interest therein, and does hereby irrevocably constitute and
appoint                        Attorney-in-Fact, to transfer the within Right Certificate on the books of the within-named
Corporation, with full power of substitution.
	

Dated:	
 	

                        ,            	
 	

 
	 	 	
	 	
 Signature
	

 	
 	

 	
 	

 
	Signature Guaranteed:	 	 
	

    
	
 	

 

        Signatures
must be guaranteed by an "Eligible Guarantor Institution" as defined in Rule 17Ad-15 (or any successor rule or regulation) promulgated pursuant to the
Securities Exchange Act of 1934, as amended (this term means, in general, banks, stock brokers, savings and loan associations, and credit unions, in each case with membership in an approved signature
guarantee medallion program). 

        The
undersigned hereby certifies that (1) the Rights evidenced by this Right Certificate are not being sold, assigned or transferred by or on behalf of a Person who is or was an
Acquiring Person or an Affiliate or Associate thereof (as such terms are defined in the Rights Agreement), (2) this Right Certificate is not being sold, assigned or transferred to or on behalf
of any such Acquiring Person, Affiliate or Associate, and (3) after due inquiry and to the best knowledge of the undersigned, the undersigned did not acquire the Rights evidenced by this Right
Certificate from any Person who is or was an Acquiring Person or an Affiliate or Associate thereof (as such terms are defined in the Rights Agreement). 

	 	 	    
 Signature

Form
of Reverse Side of Right Certificate—continued 

FORM
OF ELECTION TO PURCHASE 

(To
be executed by the registered holder if such holder desires to

exercise Rights represented by the Right Certificate) 

To
the Rights Agent: 

        The
undersigned hereby irrevocably elects to exercise                        Rights represented by this Right Certificate to purchase
the shares of Preferred Stock, shares of Common Stock or
other securities issuable upon the exercise of such Rights and requests that certificates for such shares of Preferred Stock, shares of Common Stock or other securities be issued in the name of: 

	Please insert social security number
	or other identifying number	 	    

	    
 (Please print name and address)

        If
such number of Rights shall not be all the Rights evidenced by this Right Certificate, a new Right Certificate for the balance remaining of such Rights shall be registered in the name
of and delivered to: 

	Please insert social security number
	or other identifying number	 	    

	    
 (Please print name and address)

	

Dated:	
 	

                        ,            	
 	

 
	 	 	
	 	
 Signature
	

 	
 	

 	
 	

 
	Signature Guaranteed:	 	 
	

    
	
 	

 

        Signatures
must be guaranteed by an "Eligible Guarantor Institution" as defined in Rule 17Ad-15 (or any successor rule or regulation) promulgated pursuant to the
Securities Exchange Act of 1934, as amended (this term means, in general, banks, stock brokers, savings and loan associations, and credit unions, in each case with membership in an approved signature
guarantee medallion program). 

Form
of Reverse Side of Right Certificate—continued 

        The
undersigned hereby certifies that (1) the Rights evidenced by this Right Certificate are not being exercised by or on behalf of a Person who is or was an Acquiring Person or
an Affiliate or Associate thereof (as such terms are defined in the Rights Agreement), (2) this Right Certificate is not being sold, assigned or transferred by or on behalf of any such
Acquiring Person, Affiliate or Associate, and (3) after due inquiry and to the best knowledge of the undersigned, the undersigned did not acquire the Rights evidenced by this Right Certificate
from any Person who is or was an Acquiring Person or an Affiliate or Associate thereof (as such terms are defined in the Rights Agreement). 

	 	 	    
 Signature
	

 	
 	

Notice

        The
signature on the foregoing Forms of Assignment and Election and certificates must conform to the name as written upon the face of this Right Certificate in every particular, without
alteration or enlargement or any change whatsoever. 

        In
the event the certification set forth above in the Form of Assignment or the Form of Election to Purchase, as the case may be, is not completed, the Corporation and the Rights Agent
will deem the Beneficial Owner of the Rights evidenced by this Right Certificate to be an Acquiring Person or an Affiliate or Associate thereof (as such terms are defined in the Right Agreement) and
such Assignment or Election to Purchase will not be honored. 

   Exhibit C  

MACROPORE
BIOSURGERY, INC.

6740 Top Gun Street

San Diego, California 92121 

SUMMARY OF RIGHTS TO PURCHASE

SERIES RP PREFERRED SHARES  

        On May 28, 2003, the Board of Directors (the "Board") of MacroPore Biosurgery, Inc. (the "Corporation") declared a dividend distribution of one
preferred share purchase right (a "Right") for each outstanding share of Common Stock (the "Common Stock") of the Corporation. The dividend is payable to the stockholders of record on June 10,
2003 (the "Record Date"), and with respect to shares of Common Stock issued thereafter until the Distribution Date (as defined below) and, in certain circumstances, with respect to shares of Common
Stock issued after the Distribution Date. Except as set forth below, each Right, when it becomes exercisable, entitles the registered holder to purchase from the Corporation one
one-thousandth (1/1000th) of a share of Series RP Preferred Stock, $0.001 par value per share (the "Preferred Stock"), of the Corporation at a price of $25.00 per one
one-thousandth (1/1000th) of a share of Preferred Stock (the "Purchase Price"), subject to adjustment. The description and terms of the Rights are set forth in a Rights Agreement (the
"Rights Agreement") between the Corporation and Computershare Trust Company, Inc., as Rights Agent (the "Rights Agent"), dated as of May 29, 2003. 

        Initially,
the Rights will be attached to all certificates representing shares of Common Stock then outstanding, and no separate certificates representing the Rights ("Right
Certificates") will be distributed. The Rights will separate from the Common Stock upon the earliest to occur of (i) a person or group of affiliated or associated persons having acquired,
without the prior approval of the Corporation's Board of Directors, beneficial ownership of 15% or more of the outstanding shares of Common Stock (except pursuant to a Permitted Offer, as hereinafter
defined) or (ii) 10 days (or such later date as the Board may determine) following the commencement of, or announcement of an intention to make, a tender offer or exchange offer the
consummation of which would result in a person or group of affiliated or associated persons becoming an Acquiring Person (as hereinafter defined) (the "Distribution Date"). A person or group whose
acquisitions of shares of Common Stock
cause a Distribution Date pursuant to clause (i) above is an "Acquiring Person," with certain exceptions as set forth in the Rights Agreement. The date that a person or group is first publicly
announced to have become such by the Corporation or such Acquiring Person is the "Shares Acquisition Date." 

        The
Rights Agreement provides that, until the Distribution Date, the Rights will be transferred with and only with the associated shares of Common Stock. Until the Distribution Date (or
earlier redemption or expiration of the Rights), new Common Stock certificates issued after the Record Date upon transfer or new issuance of shares of Common Stock will contain a notation
incorporating the Rights Agreement by reference. Until the Distribution Date (or earlier redemption or expiration of the Rights), the surrender for transfer of any certificates for shares of Common
Stock outstanding as of the Record Date, even without such notation or a copy of this 

        Summary
of Rights being attached thereto, will also constitute the transfer of the Rights associated with the shares of Common Stock represented by such certificate. As soon as
practicable following the Distribution Date, Right Certificates will be mailed to the holders of record of the shares of Common Stock as of the Close of Business (as defined in the Rights Agreement)
on the Distribution Date (and to each initial record holder of certain shares of Common Stock issued after the Distribution Date), and such separate Right Certificates alone will evidence the Rights. 

        The
Rights are not exercisable until the Distribution Date and will expire at the close of business on May 29, 2013, unless earlier redeemed by the Corporation as described below. 

C-1

 

        In
the event that any person becomes an Acquiring Person (except pursuant to a tender or exchange offer which is for all outstanding shares of Common Stock at a price and on terms which
a majority of certain members of the Board determines to be adequate and in the best interests of the Corporation, its stockholders and other relevant constituencies, other than such Acquiring Person,
its affiliates and associates (a "Permitted Offer")), each holder of a Right will thereafter have the right (the "Flip-In Right") to receive, upon exercise, the number of shares of Common
Stock (or, in certain circumstances, of one one-thousandths (1/1000ths) of a share of Preferred Stock or other securities of the Corporation) having a value (immediately prior to such
triggering event) equal to two times the exercise price of the Right. Notwithstanding the foregoing, following the occurrence of the event described above, all Rights that are, or (under certain
circumstances specified in the Rights Agreement) were, beneficially owned by any Acquiring Person or any affiliate or associate thereof will be null and void. The Board has the option, at any time
after any person becomes an Acquiring Person, to exchange all or part of the then-exercisable Rights (excluding those that have become void, as described in the immediately preceding
sentence) for shares of Common Stock, at an exchange ratio determined by dividing the then-applicable Purchase Price by the then-current market price per share of Common Stock
as determined in accordance with the Rights Agreement. However, this option generally terminates if any person becomes the beneficial owner of 50% or more of the Common Stock. 

        In
the event that, at any time following the Shares Acquisition Date, (i) the Corporation is acquired in a merger or other business combination transaction in which the holders of
all of the outstanding shares of Common Stock immediately prior to the consummation of the transaction are not the holders of all of the surviving corporation's voting power, or (ii) more than
50% of the Corporation's assets or earning power is sold or transferred, in either case with or to (x) an Acquiring Person or any affiliate or associate thereof or (y) any other person
in which such Acquiring Person, affiliate or associate has an interest or any person acting on behalf of or in concert with such Acquiring Person, affiliate or associate, or (z) if, in such
transaction, all holders of shares of Common Stock are not treated alike, any other person, then each holder of a Right (except Rights which previously have been voided as set forth above) shall
thereafter have the right (the "Flip-Over Right") to receive, upon exercise, common shares of the acquiring company (or, in certain circumstances, its parent), having a value equal to two
times the exercise price of the Right. The holder of a Right will continue to have the Flip-Over Right whether or not such holder exercises or surrenders the Flip-In Right. The
Purchase Price payable, and the number of shares of Preferred Stock, shares of Common Stock or other securities issuable, upon exercise of the Rights are subject to adjustment from time to time to
prevent dilution (i) in the event of a stock dividend on, or a subdivision, combination or reclassification of, the Preferred Stock, (ii) upon the grant to holders of shares of the
Preferred Stock of certain rights or warrants to subscribe for or purchase Preferred Stock at a price, or securities convertible into Preferred Stock with a conversion price, less than the then
current market price of the Preferred Stock or (iii) upon the distribution to holders of shares of the Preferred Stock of evidences of indebtedness or assets (excluding regular quarterly cash
dividends) or of subscription rights or warrants (other than those referred to above). 

        The
number of outstanding Rights and the number of one one-thousandths (1/1000ths) of a share of Preferred Stock issuable upon exercise of each Right are also subject to
adjustment in the event of a stock split of the Common Stock or a stock dividend on the Common Stock payable in Common Stock or subdivisions, consolidations or combinations of the Common Stock
occurring, in any such case, prior to the Distribution Date. 

        Preferred
Stock purchasable upon exercise of the Rights will not be redeemable. Each share of Preferred Stock will be entitled to a minimum preferential quarterly dividend payment of
$1.00 per share but, if greater, will be entitled to an aggregate dividend per share of 1,000 times the dividend declared per share of Common Stock. In the event of liquidation, the holders of
shares of the 

C-2

 

Preferred
Stock will be entitled to a minimum preferential liquidation payment per share in an amount equal to the greater of $25.00 or 1,000 times the payment made per share of Common Stock
plus an amount equal to accrued and unpaid dividends and distributions thereon, whether or not declared, to the date of such payment (the "Series RP Liquidation Preference"); thereafter, and
after the holders of shares of the Common Stock receive a liquidation payment of an amount equal to the quotient obtained by dividing the Series RP Liquidation Preference by 1,000 (subject to
certain adjustments for stock splits, stock dividends and recapitalizations with respect to the Common Stock), the holders of shares of the Preferred Stock and the holders of the Common Stock will
share the remaining assets in the ratio of 1,000 to 1 (as adjusted) for each share of Preferred Stock and Common Stock so held, respectively. Finally, in the event of any merger, consolidation or
other transaction in which shares of Common Stock are exchanged, each share of Preferred Stock will be entitled to receive 1,000 times the amount received per share of Common Stock. These
rights are protected by customary antidilution provisions. In the event that the amount of accrued and unpaid dividends on the Preferred Stock is equivalent to six full quarterly dividends or more,
the holders of shares of the Preferred Stock shall have the right, voting as a class, to elect two directors in addition to the directors elected by the holders of shares of the Common Stock until all
cumulative dividends on the Preferred Stock have been paid or set apart for payment through the last quarterly dividend payment date. No fractional shares of Preferred Stock will be issued (other than
fractions which are one one-thousandth (1/1000th) or integral multiples of one one-thousandth (1/1000th) of a share of Preferred Stock, which may, at the election of the
Corporation, be evidenced by depositary receipts) and in lieu thereof, an adjustment in cash will be made based on the market price of the Preferred Stock on the last trading day prior to the date of
exercise. With certain exceptions, no adjustment in the Purchase Price will be required until cumulative adjustments require an adjustment of at least 1% in such Purchase Price. 

        At
any time prior to the earlier to occur of (i) a person becoming an Acquiring Person or (ii) the expiration of the Rights, and under certain other circumstances, the
Corporation may redeem the Rights in whole, but not in part, at a price (payable in cash or, at the Corporation's election, in Common Stock) of $0.001 per Right (the "Redemption Price"), which
redemption shall be effective upon the action of the Board. Additionally, following the Shares Acquisition Date, the Corporation may redeem the then outstanding Rights in whole, but not in part, at
the Redemption Price, provided that such redemption is in connection with a merger or other business combination transaction or series of transactions involving the Corporation in which all holders of
shares of Common Stock are treated alike but not involving an Acquiring Person or its affiliates or associates. 

        Other
than those provisions relating to the rights, duties and obligations of the Rights Agent and certain principal economic terms of the Rights, all of the provisions of the Rights
Agreement may be amended by the Board of Directors of the Corporation prior to the Distribution Date. After the Distribution Date, the provisions of the Rights Agreement may be amended by the Board of
Directors of the Corporation in order to cure any ambiguity, defect or inconsistency, to make changes that do not
adversely affect the interests of holders of Rights (excluding the interests of any Acquiring Person), or, subject to certain limitations, to shorten or lengthen any time period under the Rights
Agreement. 

        Until
a Right is exercised, the holder thereof, as such, will have no rights as a stockholder of the Corporation, including, without limitation, the right to vote or to receive
dividends. While the distribution of the Rights will not be taxable to stockholders of the Corporation, stockholders may, depending upon the circumstances, recognize taxable income should the Rights
become exercisable or upon the occurrence of certain events thereafter. 

        A
copy of the Rights Agreement has been filed with the Securities and Exchange Commission as an Exhibit to a Registration Statement on Form 8-A. A copy of the Rights
Agreement is available free of charge from the Corporation. This summary description of the Rights does not purport to be complete and is qualified in its entirety by reference to the Rights
Agreement, which is hereby incorporated herein by reference. 

C-3

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MACROPORE BIOSURGERY, INC. and COMPUTERSHARE TRUST COMPANY, INC., AS RIGHTS AGENT RIGHTS AGREEMENT DATED AS OF MAY 29, 2003

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