XXXXX XXXX CADOT Exhibit 7(b)
NOTARY PUBLIC
[Illegible stamp and signature]
Record No. 13.818-2000
AGREEMENT
INVERSIONES Y XXXXXXX X.X.
AND
LQ INVERSIONES FINANCIERAS S.A.
AND
BANCO DEL ESTADO DE CHILE
IN XXXXXXXX DE CHILE, on December 20, 2000, the parties individualized
hereinbelow have appeared in my presence, XXXXX XXXX CADOT, Notary Public, head
of the 41st Notary Public's Office in Santiago, domiciled at # 0000 Xxxxxxxxx
Xxxxxx, xxxxx 00, Xxxxxxxx of Santiago:
INVERSIONES Y XXXXXXX X.X., Tax Id No. 96.572.580-6, hereinafter also designated
"the debtor", hereby represented by Xx. XXXX XXXXXXXX XXXXXXX BORIES, a Chilean
citizen, married, civil industrial engineer, National Id. Card No. 6.926.972-9
and by Xx. XXXXXXXXXX XXXXXXXX XXXXXXXX, a Chilean citizen, married, lawyer,
National Id. Card No. 7.012.089-5, all the aforementioned domiciled at # 20
Xxxxxxx Xxxxxx Xxx Xxxxxx, xxxxx 00, Xxxxxxxx xx Xxx Xxxxxx; QUINENCO S.A., Tax
Id No. 91.705.000-7, hereby represented by Xx. XXXXXXXXX XXXXX XXXXXXXX, a
Chilean citizen, married, commercial engineer, National Id. Card No.
6.525.286-4, both of them domiciled at # 20 Xxxxxxx Xxxxxx Xxx Xxxxxx, xxxxx 00,
Xxxxxxxx xx Xxx Xxxxxx; LQ INVERSIONES FINANCIERAS S.A., Tax Id. No.
96.929.880-5, hereinafter also designated "the Grantors", hereby represented by
Xx. XXXX XXXXXXXX XXXXXXX XXXXXX, a Chilean citizen, married, civil industrial
engineer, National Id. Card No. 6.926.972-9, both of them domiciled at # 20
Xxxxxxx Xxxxxx Sur, floor 14, District of Las Condes; INVERSIONES RIO GRANDE
S.A., Tax Id. No. 95.987.000-4, represented by Xx. XXXX XXXXXXXX XXXXXXX XXXXXX,
hereinbefore individualized, both of them domiciled at # 20 Xxxxxxx Xxxxxx Sur
Street, floor 14, District of Las Condes, hereinafter jointly denominated "the
Grantorss"; and BANCO DEL ESTADO DE CHILE, an autonomous state-owned company,
hereinafter also designated "the Bank", hereby represented by Xx. XXXXXX XXXXXX
XXXXX, a Chilean citizen, married, commercial engineer, National Id. Card No.
7.706.983-6, both of them domiciled at # 1111 Libertador Xxxxxxxx X'Xxxxxxx
Avenue, District of Santiago, all
the appearing parties of legal age, who have hereby evidenced their identities
by means of the Id. Cards individualized hereinabove and have represented as
follows:
ONE: Banco del Estado has granted a loan amounting to 700,000 Unidades de
Fomento1 to INVERSIONES Y XXXXXXX X.X., which has been documented by means of a
Promissory Note No. 743383, executed by Debtor on the date specified in the
preamble hereof, for the amount referred to hereinabove. QUINENCO S.A., on its
part, undertook as guarantor and joint and several debtor of the aforesaid note.
TWO: By means of a public deed granted at this Notary Public's Office on today's
date, LQ INVERSIONES FINANCIERAS S.A. and INVERSIONES RIO GRANDE S.A. undertake
the capacity of pledgors and joint and several debtors of INVERSIONES Y XXXXXXX
X.X. so as to secure full and timely compliance with the aforementioned note
referred to under the foregoing clause before Banco del Estado de Chile. By
means of the same public deed, LQ INVERSIONES FINANCIERAS S.A. granted a stock
pledge - as per Law No. 4.287 - on 187,970,732 shares issued by BANCO DE X.
XXXXXXX and INVERSIONES RIO GRANDE S.A. on 27,360,026 shares issued by Madeco
S.A., both to secure compliance with the obligations undertaken with the Bank as
a result of the guarantees and joint and several debts specified hereinabove. By
means of same public deed, QUINENCO S.A. granted a stock pledge - as per Law No.
4.287, on 2,075,085 shares issued by MADECO S.A., so as to secure compliance
with the obligations undertaken with the Bank as a result of the guarantees and
joint and several debts specified clause One above. The parties intend that the
pledges serve as a surety for the aforementioned loan since, through the
guarantees and joint and several debts, such loan shall also account for an
indirect debt for each guarantor.
THREE: The appearing parties hereby agree that, for the aforementioned loan to
be properly secured, a ratio between the pledged stocks and the effective amount
of the loan amounting to 1.5 to 1 shall be kept. In other words, the total value
of pledged shares shall be equivalent to 1.5 times the amount of the loan.
Pledged shares value shall be deemed to be the lowest of: a) the average closing
price of issuer's stocks at the Xxxxxxxx Stock Exchange corresponding to the
180-day period prior to the date on which price is determined and b) the average
closing price of shares at the Xxxxxxxx Stock Exchange along the 30 days prior
to price determination. The aforesaid measurement shall be carried out on a
monthly basis, on the first working day of every month.
FOUR: Should the surety / debt ratio drop below the 1.25:1 level, Debtor and/or
Grantors shall, upon the Bank's discretion and within the 30-day term following
notification therefrom, grant a stock pledge on a higher number of shares issued
by MADECO S.A. or by BANCO DE X. XXXXXXX or other stocks acceptable for the
Bank, or Debtor and/or Grantors shall make an advance payment of the loan so
that the aforementioned ratio regains the 1.5:1 level. On an alternative basis
and within the same term, Debtor and/or Grantorss shall be entitled to make term
deposits at the Bank as accommodation endorsements, on a 1:1 surety / debt ratio
basis, so that the aforementioned ratio regains the required level. Should the
aforementioned fail to be achieved within the required term, Banco del Estado de
Chile shall be irrevocably entitled to transfer a portion or the entire amount
of the pledged shares and to allocate the product to paying the loan in advance,
so that the surety / debt ratio regains the 1.5:1 level. QUINENCO S.A., L.Q.
INVERSIONES FINANCIERAS S.A., INVERSIONES RIO GRANDE S.A. and
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(1) Unidad de Fomento - UF - a Chilean, non-physical indexed monetary unit.
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INVERSIONES Y XXXXXXX X.X. hereby grant a special and irrevocable power of
attorney to Banco del Estado de Chile, on behalf of which its representative
hereby accepts the power to act accordingly.
FIVE: Should the surety / debt ratio rise above the 1.75 level along three
consecutive measurements, Debtor and/or Grantors shall require release of pledge
for as many shares as necessary for having such ratio regain the 1.5:1 level.
SIX. Should the stocks of MADECO S.A. and/or BANCO DE X. XXXXXXX be no longer
able to be valued by means of the mechanism referred to under clause three
herein, the Bank shall be entitled to require Debtor replacement thereof for by
other shares deemed to be satisfactory thereto and complying with the
aforementioned requirement. The replacement pledge shall be granted within a
30-working day term as of notice from the Bank. In addition, Debtor shall be
entitled to request replacement of the pledged stocks by shares corresponding to
another company, which the Bank considers acceptable or for term deposits as
accommodation endorsements, where the latter have a 1:1 surety / debt ratio.
SEVEN. INVERSIONES Y XXXXXXX X.X. hereby undertakes before the Bank, on behalf
of which accepts its representative, to keep a debt ratio - measured as the
quotient resulting from the current liabilities divided by net worth - not
exceeding 3.5 times. Should Debtor exceed the aforementioned level, it shall
correct such situation within the following 45-day term.
EIGHT: QUINENCO S.A., in turn, in its capacity of guarantor and joint and
several debtor of the note securing the loan referred to under clause one
herein, hereby undertakes as follows before Banco del Estado de Chile: a)
Keeping assets free from all and every encumbrances, collaterals, burdens,
restrictions or privileges for an amount equivalent to at least 1.3 times the
outstanding balance of all the unsecured debts held by Quinenco S.A. For these
purposes, both assets and debts shall be valued at book value; b) Keeping an
individual indebtedness level whereby the financial debt / total capital
formation ratio not exceeding 0.45 times. To this end, financial debt shall be
construed as the addition of lots 21,010; 21,015; 21,020; 21,025; 21,030;
21,060; 21,075; 22,010; 22,020; 22,030; 22,040 and 22,045 of Quinenco's
individual FECU. Total capital formation shall be construed as the addition of
individual net worth, plus financial debt; c) Keeping a minimum individual net
worth of at least UF 33 million. The aforementioned obligations, as well as that
provided in the clause hereinabove shall remain in full effect for as long as
the relevant loan remains unpaid.
NINE: Banco del Estado de Chile shall be entitled to require advance payment of
all and every pending obligations held by INVERSIONES Y XXXXXXX X.X. therewith.
Further the Bank shall be entitled to demand the payment of the pledge,
guarantee and surety as specified under clauses one and two herein in any of the
following cases: a) In the event Debtor and/or Quinenco S.A. fail to fully and
timely comply with the obligations undertaken thereby by means of this
instrument; b) Should Quinenco's current major stockholders loose control of
such company.
TEN: Debtor shall be able to pay the loan referred to under clause one herein in
advance, with no fee being applicable thereto, provided that the following
requirements are complied with: a) Notifying the Bank in writing, at least 90
days in advance to the date on which it intends to make the relevant advance
payment; b) As of January 15, 2002, it shall be able
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to pay in advance as much as 50 per cent of the owed principal. Said advance
payment shall only be carried out on any day between January 15 and January 31,
2002. Following such date, payment shall only be performed on interest payment
dates; c) As of January 15, 2003, Debtor shall be able to pay up to 100 per cent
of owed principal. The aforesaid advance payment shall only be carried out on
any day between January 15 and January 31, 2003. Following such date, payment
shall only be performed on interest payment dates.
ELEVEN: For all the legal purposes stemming from this instrument, the appearing
parties hereby establish their domicile in the city and district of Santiago
and, consequently, shall subject to the jurisdiction of the Courts of Justice
located therein.
TWELVE: All and every expenses resulting from this deed shall be exclusively
born by Debtor.
The power of Xx. Xxxx Xxxxxxxx Xxxxxxx Xxxxxx and Xx. Xxxxxxxxxx Xxxxxxxx
Xxxxxxxx to act on behalf of INVERSIONES Y XXXXXXX X.X. is evidenced by means of
a public deed dated August 5, 1997 granted at the Santiago Notary Public's
Office of Xx. Xxxx Xxxxxxxxx Cash. The power of Xx. Xxxxxxxxx Xxxxx Xxxxxxxx to
act on behalf of QUINENCO S.A. is evidenced by means of a public deeds dated
December 12, 2000, granted at the Santiago Notary Public's Office of Xx. Xxxx
Xxxxxxxxx Cash. The power of Xx. Xxxx Xxxxxxxx Xxxxxxx Bories to act on behalf
of LQ INVERSIONES FINANCIERAS S.A. is evidenced by means of public deeds dated
December 13 and December 15, 2000, both of them granted at the Santiago Notary
Public's Office of Xx. Xxxx Xxxxxxxxx Cash. The power of Xx. Xxxx Xxxxxxxx
Xxxxxxx Xxxxxx to act on behalf of INVERSIONES RIO GRANDE S.A. is evidenced by
means of public deed dated December 14, 2000, granted at the Santiago Notary
Public's Office of Xx. Xxxx Xxxxxxxxx Cash. The power of the Bank's
representative is evidenced by means of a public deed dated June 7, 1996,
granted at the Santiago Notary Public's Office of Xx. Xxxxx Xxxxxx Hormazabal.
This agreement has been prepared by counsel XXXXXX XXXXX LOYOLA. In witness
whereof, the parties sign this document having one single date and effect.
Counterparts are provided. Registered under Record No. 13.818.
In witness whereof I have hereunto affixed my hand and seal.
(Signature illegible)
XXXX XXXXXXXX XXXXXXX XXXXXX
National Id. Card No. 6.926.972-9
(Signature illegible)
XXXXXXXXXX XXXXXXXX XXXXXXXX
National Id. Card No. 7.012.089-5
(Signature illegible)
XXXXXXXXX XXXXX XXXXXXXX
National Id. Card No. 6.525.286-4
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(Signature illegible)
XXXXXX XXXXXX BRAGA
National Id. Card No. 7.706.983-6
By proxy BANCO DEL ESTADO DE CHILE
(Signature and stamp illegible)
(Stamp: Banco del Estado de Chile - Group Head - Major Corporations; Signature
illegible).
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