How to quiet noisy undergrads students during lecture

Call them out when you notice it. Stop what you're doing - single the chit-chatters out, and ask them if they have anything they'd like to say. If they have questions they should ask them so that the entire class can hear - that way everyone can learn. If they do have questions, remind them of whatever protocol you have for questions (raise a hand, hold questions for designated question breaks, etc).

Otherwise, make it clear that you won't tolerate chit-chat and, if they persist, simply remove them from the class. Make it clear that they are welcome to return to the next lecture on the condition that they keep quiet during the lecture. Be sure to be polite and cordial, of course, but don't waver on being firm.

It is not acceptable for a few noisy students to compromise the learning environment for everyone else. Just get them out of there. You probably won't have to do this more than once or twice before the rest figure out that you're serious. As a lecturer, you're the captain of the ship. Don't be afraid to be the captain - keeping order is your job. The quiet students are relying on you.

Also keep in mind that it is not your job to make sure that they pay attention - that's their job. "Listen to me" should not be your responsibility, it should be theirs. Your responsibility is primarily "Don't disrupt my lecture! Others are trying to listen to me". If they would like to quietly not pay attention, that's fine. They're paying for a seat in the lecture hall - what they do with it is up to them, so long as it does not affect the learning environment for everyone else (who are also paying for their seat in that lecture hall!).

Keep it short and simple. They are adults, able to understand what you ask of them, and able to understand that you have the right to request this. At the first time, say something like: "Please, you guys in the 5th row, your chatter is disturbing the class. If it's important for the class, you can always raise your hand and ask." At the second time (which shouldn't happen): "Please, if you really need to discuss something unrelated to the class, you can do it outside." At the third time, ask them directly to leave.

Also, don't be too picky. Sometimes people mishear your words or aren't sure what you've written. It happens that they ask the neighbour and he replies. Pointing out this can be annoying to the students themselves, since it's often a result of the lecture, and it would be more annoying if they asked you to repeat stuff often.

Last but not least, do not tell them to listen to you and keep paying attention. Again, they are adults, they know why they are there and it's their responsibility. Make them keep paying attention by good lecturing, and ignore those that don't try to pay attention.

Here are my 2 (euro)cents. Mostly are general remarks based on my -maybe lousy- experience, point 5 somehow answers your question.

1. Though breaks are useful for all the stated reasons and more, one should always take into account that it takes some time to the students to regain concentration after a break. During this time, they typically continue to speak, eat food etc. I typically allow 1 break for a 3 h lecture and 2 breaks for a 4 h lecture (we had 4 h lectures up to a few years ago).
2. Students, frequently, start to talk when the pace of the lesson is slow. Or put it in an another way: if they can find the time to talk, maybe the professor is not keeping them enough busy. Try to analyze the pace of your lecture and see if it might be worth increasing it.
3. Be sure to look at them when you speak, even if you have to write a lot on the blackboard.
4. Don't interleave too frequently the parts where you speak with those in which they work the exercises. Separate clearly the two parts (e.g. in the first 1.5 h you speak, in the second, they work).
5. When I think that students are speaking too much (rarely; they are typically quiet), I just stop talking, it is typically sufficient to regain the audience.