**Exhibit
      2.2**




**MERGER
      AGREEMENT**





AGREEMENT,
      made in Santiago, Chile, on May 17, 2007, entered into by and between a majority
      of the controlling shareholders of S.A.C.I. Falabella (the “Falabella Group”),
      of the first part; and, of the second part, the controlling shareholders of
      Distribución y Servicio D&S S.A (the “D&S Group”), both groups as
      identified in the signature page hereof. Each party shall be individually
      referred to as a “Party” and both, collectively, shall be referred to as the
“Parties”.





The
      individuals who enter into this Merger Agreement bind themselves hereunder
      pro
      se and by virtue of their respective controlled affiliates in the interest
      held
      by the Falabella Group in S.A.C.I. Falabella and in the interest held by the
      D&S Group in Distribución y Servicio D&S S.A. under article 1450 of the
      Civil Code.




**1)**  **SCOPE
      OF AGREEMENT**





The
      Falabella Group and the D&S Group have agreed to merge S.A.C.I. Falabella
      (“Falabella”) and Distribución y Servicio D&S S.A. (“D&S”) on the terms
      set forth in articles 99 and 100 of Law 18046 (the “Merger”), in order to
      integrate the business plans of Falabella and D&S and thus create a platform
      for business development in the national territory and in particular in the
      international markets.





Once
      the
      Merger is consummated, the shareholders of Falabella and the shareholders of
      D&S shall become shareholders of the surviving company. To this end, one of
      the companies, either Falabella or D&S, will be merged with and into the
      other. The determination of which of the two companies, Falabella or D&S,
      will be the surviving company (the “Surviving Company”) shall be made
      considering efficiency-related factors only, with regard to (i) the time and
      expediency of the procedure required to consummate the Merger and (ii) the
      convenience of the Surviving Company from a taxation perspective.




**2)**  **NAME
      OF SURVIVING COMPANY**





The
      name
      of the Surviving Company shall be determined in the course of the Merger
      meetings.





The
      decision in relation to the name of the Surviving Company shall be made by
      a
      committee of nine members designated by the Parties ratably to the interest
      that
      each Party shall hold in the merged entity, i.e. seven members designated by
      the
      Falabella Group and two members designated by the D&S Group. The decision
      shall be made by an absolute majority and individual votes, upon deliberation,
      and each committee member may discuss his or her points of view.




**3)**  **EXCHANGE
      RATIO**





The
      Parties agree that the shares of the Surviving Company shall be apportioned
      among the shareholders of pre-Merger Falabella and the shareholders of
      pre-Merger D&S, at a rate of 77% and 23%, respectively.





**4)**  **BOARD
      OF DIRECTORS OF THE SURVIVING COMPANY**





The
      Surviving Company shall have a board of directors composed of 11
      members.





In
      case
      of death, resignation, removal or inability to exercise a directorship by any
      director designated by any of the Parties, the Parties agree, through the other
      directors designated by them or any other adequate legal mechanism, to replace
      the outgoing director with the person indicated by the Party who originally
      designated said outgoing director. This paragraph shall apply to all boards
      of
      directors.





Each
      of
      the members of the Falabella Group individually agrees, for the benefit of
      the
      D&S Group, that as long as the D&S Group holds such number of shares as
      allow it to designate one director in the Surviving Company, and as long as
      the
      parties to the shareholders’ agreement of Falabella (the “Falabella Agreement”)
      maintain control over the Surviving Company:








|(a) | The
              D&S Group shall have the same right to designate one director in the
              Relevant Subsidiaries and other subsidiaries of the Surviving Company
              as a
              party to the Falabella Agreement who holds sufficient shares issued
              by the
              Surviving Company to designate one director of the Surviving Company.
              To
              the extent that no third party holds any interest in a Relevant
              Subsidiary, the D&S Group shall always have the right to designate a
              director; and
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------




|(b) | The
              D&S Group shall designate at least four directors of the food
              subsidiary, including the director to whom it is entitled pursuant
              to
              paragraph (a) above, provided that if the D&S Group no longer holds an
              11.4% interest in the shares of the Surviving Company and that if the
              Falabella Group combined with the D&S Group are unable to designate
              nine directors, the number of directors designated by the D&S Group
              shall be three. One of the directors designated by the D&S Group shall
              be the Chairman of the food subsidiary. The provisions of this paragraph
              (b) shall apply for a term of six years from the date of the
              Merger.
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------




Relevant
      Subsidiaries shall be the companies that engage in the following
      businesses:





|(i) | department
              stores;
|--- | --------------------------------

|(ii) | food
              sales;
|---- | -------------------------

|(iii) | sale
              of construction materials and home improvement
              products;
|----- | -----------------------------------------------------------------------------------------

|(iv) | consumer
              loans;
|---- | -----------------------------

|(v) | Banco
              Falabella; and
|--- | ----------------------------------

|(vi) | Real
              estate (Saitec and Rentas Falabella).
|---- | --------------------------------------------------------




The
      Relevant Subsidiaries shall have 11 directors.




**5)**  **OTHER
      RIGHTS OF THE PARTIES**





|1. | Nothing
              provided herein (including the provisions of Section 4) shall restrict
              the
              right of the D&S Group and of the Falabella Group to dispose of all or
              part of their equity interest in the Surviving Company, with all the
              rights accruing thereto.
|-- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------




|2. | In
              relation to the shares held by the D&S Group in excess of 8.3334% of
              the shares issued by the Surviving Company and as long as they are
              held by
              it, the D&S Group shall exercise the voting rights corresponding to
              those shares as provided in the Falabella Agreement and as instructed
              to
              that effect by a representative designated by the Falabella Group,
              for a
              period of six years from the Merger. The D&S Group may dispose of
              these shares without any restriction, with all the voting rights accruing
              thereto included, at any time.
|-- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------




|3. | To
              the extent permitted by applicable law, the D&S Group may require, at
              its own cost, at any time and for up to a maximum of three times, that
              the
              Surviving Company assist the D&S group in order that the latter sell
              the shares it holds through one or more public offers, duly registered.
              Likewise, if the Surviving Company considers conducting an offer of
              newly
              issued shares, the D&S Group may include in the respective offer by
              the Surviving Company shares held by the D&S Group, and the D&S
              Group shall contribute funds in such case to pay its ratable portion
              of
              the total offer expenses.
|-- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------




|4. | Within
              60 days following the date of this Agreement, the Falabella Group shall
              advise the D&S Group whether it grants the D&S group an option to
              adhere to the Falabella Agreement. To this end, and concurrently with
              said
              notice, the Falabella Group shall provide the execution version of
              the
              Falabella Agreement regarding which the D&S Group may exercise the
              option. Upon granting of said option, the D&S Group shall be required
              to exercise the same within 60 days.
|-- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



**6)**  **DIVIDEND
      POLICY**





The
      Parties agree that the dividend policy of the Surviving Company shall be to
      distribute, every year, at least 40% of the annual profits that are
      distributable in accordance with the law and other applicable regulations,
      provided the consolidated debt/equity ratio o the Surviving Company shall be
      1:1
      or less.




2


**7)**  **MERGER
      MECHANICS**





The
      Merger shall be conducted through a merger by absorption as provided in articles
      99 and 100 of Law 18,046. In the silence of those provisions and this Agreement,
      the Parties shall opt for such statutory mechanisms and corporate vehicles
      as
      equitably maximize the benefits and minimize the costs for the shareholders
      of
      Falabella and the shareholders of D&S.




**8)**  **ADDITIONAL
      ACTS AND CONTRACTS TO CONSUMMATE THE MERGER**





The
      obligations assumed by the Parties include their individual obligation to have
      the shareholders’ meetings of Falabella and D&S, as applicable, vote in
      favor of the Merger of both companies on the terms provided herein and as soon
      as reasonably practicable. To this end, the Parties shall make their best
      efforts to carry out and enter into the definitive acts and contracts deemed
      necessary or convenient to consummate the agreements set forth herein (the
      “Definitive Contracts”) within 90 days from the date hereof, which shall have
      the nature of a hold-over period and not of a deadline. Once the aforementioned
      90-day term is over, any member of the Falabella Group or of the D&S Group
      may require the Deliberative Body referred to in Exhibit A to this Merger
      Agreement to fulfill its mandate.





In
      this
      Agreement and in the Definitive Contracts, the Falabella Group and the D&S
      Group bind themselves, in their capacity as shareholders representing,
      respectively and collectively, the percentage necessary to meet the requisite
      quorum and majorities to approve the Merger in accordance with applicable laws,
      regulations and bylaws, regardless of whether the Falabella Group and the
      D&S Group hold the respective percentage by themselves or not.




**9)**  **TRANSITION
      PERIOD**





Between
      the date of this Merger Agreement and the date when the Merger is consummated
      (the “Transition Period”), the Falabella Group, on the one hand, and the D&S
      Group, on the other, agree to have Falabella or D&S, as applicable (the
“Respective Controlled Entity”) (including, unless otherwise expressly
      indicated, the companies controlled by the Respective Controlled Entity”),
      continue conducting its activities and businesses (the “Business”) as it has
      done in the past. Likewise, the Parties agree to make their best efforts to
      (i)
      maintain the business organization established by the Respective Controlled
      Entity, (ii) maintain in force and effect the authorizations and permits whereby
      the Respective Controlled Entity currently conducts its activities, and (iii)
      maintain existing relationships with customers, vendors, workers, creditors,
      regulators and supervisors of the Respective Controlled Entity in order that
      the
      financial condition and the Business of the Respective Controlled Entity as
      an
      ongoing activity taken as a whole should not be adversely affected during the
      Transition Period. Without any limitation to the generality of the obligation
      to
      preserve the Business, each Party agrees to have its Respective Controlled
      Entity perform the affirmative and negative covenants indicated below, the
      breach of which, as well as of the generality of the obligation to preserve
      the
      Business, shall be sanctioned with the penalty referred to in Section
      11):





|1. | Refrain
              from materially modifying the businesses and activities of the Respective
              Controlled Entity. For the avoidance of doubt, it is hereby noted that
              the
              securitization of accounts receivable shall not be deemed a breach
              of this
              paragraph;
|-- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------




|2. | Refrain
              from disposing any asset of material importance for the conduct of
              the
              business of the Respective Controlled Entity as it has done in the
              past;
|-- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------




|3. | Refrain
              from distributing dividends in excess of US$220 million, taking both
              companies as a whole, being able to distribute, in each period of 12
              months from this date and until the consummation of the Merger: (i)
              in the
              case of Falabella, a maximum of US$169.4 million; and (ii) in the case
              of
              D&S, a maximum of US$50.6 million. It is hereby noted that this amount
              does not include the dividend paid by D&S on May 17, 2007, nor the
              right of Falabella to pay out a pre-Merger dividend in the sum of $9
              per
              share;
|-- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------




3


|4. | Refrain
              from agreeing to or conducting any reduction in capital or from approving
              any stock repurchase program. Pre-Merger capital increases shall only
              be
              conducted if funds are used in relation to a specific project and,
              in such
              case, the company that does not increase capital may increase capital
              so
              that the agreed proportion for the distribution of shares in the Surviving
              Company once the Merger is consummated is not altered. The capital
              increase previously agreed in Falabella and pending underwriting shall
              be
              governed by this same rule. The exception to this rule shall be the
              capital increase approved in Falabella at a shareholders’ meeting held on
              April 24, 2007, destined to the executive incentives
              plan;
|-- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------




|5. | In
              general, refrain from encouraging or permitting any operation, act,
              contract or situation related to the Respective Controlled Entity or
              its
              assets such as is incompatible with the consummation of the Merger
              on the
              terms set forth in this Merger Agreement.
|-- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------




Moreover,
      the Parties agree to the following during the Transition Period:





|(a) | To
              designate a Transition Committee comprised of three members of each
              Group,
              the purpose of which shall be, to the extent permitted by law, to
              coordinate the Merger process. This Committee shall take
              minutes.
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------




|(b) | To
              have its Respective Controlled Entity execute, within 10 business days
              following the date hereof, a confidentiality agreement the effective
              term
              of which shall not exceed the date of the Merger, providing the obligation
              to preserve and maintain the confidential character of the information
              exchanged between the Respective Controlled Entities during the Transition
              Period.
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



**10)**  **CONDITIONS
      TO CONSUMMATE THE MERGER**





The
      obligation to consummate the Merger shall be subject to the following conditions
      (the fulfillment or breach of which shall be verified by the Deliberative Body
      referred to in Exhibit A hereto):





|1. | That
              no administrative, judicial, legal or other resolution or standard
              exist
              that, as a result of the transaction contemplated hereby, imposes a
              significant restriction or otherwise has a material adverse impact
              on the
              freedom of the Surviving Company to conduct the businesses that Falabella
              and D&S have separately conducted in the
              past;
|-- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------




|2. | That
              Falabella and D&S shall have complied with the provisions of Section
              9) or otherwise (notwithstanding imposition of the penalty referred
              to
              Section 11)), the Falabella Group or the D&S Group (the “Affected
              Party”), depending on whether D&S or Falabella is the company that
              fails to perform such obligations, waives the condition in question
              at its
              entire discretion;
|-- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------




|3. | That
              between this date and the date on which the Merger is to be consummated,
              no event or circumstance shall have occurred other than events or
              circumstances affecting the general economy of the countries in which
              they
              operate, such as have a material adverse impact on the value of Falabella
              or D&S, unless the Affected Party waives this condition at its entire
              discretion;
|-- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------




|4. | Register
              or maintain the registration of the Surviving Company with the U.S.
              Securities and Exchange Commission (“SEC”), to which end, as of the Merger
              date, it must have commenced the registration process with said authority.
              Once 3 years elapse from the Merger and if so determined by two thirds
              of
              the directors of the Surviving Company, the SEC registration will be
              cancelled.
|-- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



**11)**  **BREACH
      OF SECTION 9) COVENANTS**





In
      case
      of any breach of the covenants in Section 9) above, a penalty shall be imposed
      in the equivalent of twice the damage sustained by the Affected Party, as
      determined by the Deliberative Body, notwithstanding the possibility that,
      if
      applicable, the penalty referred to in Section 15) hereof shall be additionally
      imposed.





4





**12)**  **REPRESENTATIONS
      AND WARRANTIES**





The
      representations and warranties set forth in Exhibit B hereto shall
      govern.




**13)**  **OBLIGATIONS
      BINDING AND ENFORCEABLE**





Each
      member of the Falabella Group and each member of the D&S Group, individually
      and indivisibly, expressly represent that they have entered into this Merger
      Agreement willing and intending to be legally bound hereby and that the
      obligations hereof are enforceable.




**14)**  **EFFECTIVE
      TERM**





The
      Merger shall be consummated within 60 days from the date on which evidence
      is
      furnished that the last of the conditions indicated in Section 10) above has
      been fulfilled. Special Shareholders’ Meetings of Falabella and D&S shall be
      called to be held on the same day, as determined by the Transition Committee.




**15)**  **PENALTY**





Any
      Party
      who fails to perform its obligation to carry out and enter into the acts and
      contracts in the manner established by the Deliberative Body (the “Non-diligent
      Party”) shall pay the Respective Controlled Entity of the Party who is diligent
      or is willing to perform its obligation to carry out and enter into the acts
      and
      contracts as provided by the Deliberative Body (the “Penalty Payee” and
“Diligent Party”, respectively), a penalty totaling US$300,000,000 (three
      hundred million United States dollars).





The
      penalty provided in the preceding paragraph is deemed notwithstanding and in
      addition to the right of the Diligent Party to demand payment of actual damages
      sustained by the same as a result of the breach by the Non-diligent Party,
      before the Deliberative Body.




**16)**  **JOINT
      AND SEVERAL LIABILITIES**





All
      the
      members of each Group shall be jointly and severally liable unto the other
      Group
      with regard to fulfillment of the obligations of all the members of its
      respective Group.




**17)**  **DISPUTE
      RESOLUTION**





The
      Parties agree to establish a swift and effective mechanism for the timely,
      fair
      resolution of any disputes as may arise between them in connection with the
      interpretation and performance of this Agreement, all as indicated in Exhibit
      A
      hereto.




**18)**  **NOTICES
      TO THE AUTHORITIES AND PUBLIC**





Any
      notices and communications required to be made by the Parties under the laws,
      regulations, corporate bylaws, contractual provisions, standards of the SVS
      or
      international regulatory entities, shall be the responsibility of each party
      and
      shall not require the consent or prior approval of the other Party, provided
      however that said party shall be required to advise the other Party in advance
      in regard to the obligation to communicate or notify certain events and, if
      possible, accompanying the contents of the respective
      communication.





Publications,
      press releases and other public information in relation to the Merger and not
      mandatory under the laws, regulations, corporate bylaws, contractual provisions,
      standards of the SVS or international regulatory entities shall be disclosed
      by
      mutual consent of the Parties, agreeing on the respective texts. To this end,
      the Parties designate the agents referred to in Section 19) to coordinate all
      the communication activities referred to in this section.





5





**19)**  **COMMUNICATIONS
      BETWEEN THE PARTIES**





All
      communications, notifications or notices to be sent between the Parties
      hereunder shall be made in writing and delivered in person, by registered mail
      or electronic mail to the following representatives at the addresses indicated
      hereinbelow:





To
      the
      Falabella Group:


Mr.
      Juan
      Cuneo Solari


E-mail: jcuneo@falabella.cl


Address:
      Rosas 1665, Santiago





c.c.:
      Mr.
      Cristián Lewin Gómez


E-mail: clewin@estudiolewin.cl


Address:
      Huérfanos 1022, 10 th floor,
      Santiago





To
      the
      D&S Group:


Mr.
      Hans
      Eben Oyanedel


E-mail:
      heben@golf99.cl


Address:
      El Golf 99, 15 th floor,
      Las Condes





c.c:
      Mr.
      Alberto Eguiguren Correa


E-mail: aeguiguren@honoratorussi.cl


Address:
      Roger de Flor 2736, 6 th floor,
      Las Condes, Santiago





The
      notices and communications between the Parties shall be deemed received and
      consequently perfected upon delivery if sent in person; five business days
      following their dispatch if sent by registered mail or courier service; and
      the
      following bank business day after transmission if sent by e-mail.





If
      either
      Party changes address or e-mail address or replaces the representative
      authorized to receive communications, said Party shall advise this situation
      to
      the other Party within five bank business days following the occurrence of
      such
      change and in any case as provided in this section. Otherwise, all
      communications sent to the address, e-mail or representative mentioned above
      shall be fully effective for the purposes of this Merger Agreement.




**20)**  **LEGAL
      CAPACITY**





Each
      member of the Falabella Group and of the D&S Group represents, for the
      benefit of the other members of both groups, that it has sufficient authority
      and has been all other corporate or other requirements to validly assume the
      obligations contemplated hereby, which are enforceable in accordance with their
      terms.





**21)**  **DESIGNATION
      OF REPRESENTATIVE**





The
      members of the Falabella Group designate Mr. Juan Cuneo Solari, domiciled at
      Rosas 1665, Santiago, and the members of the D&S Group designate Mr. Hans
      Eben Oyanedel, domiciled at El Golf 99, 15 th floor,
      Las Condes, as their respective representatives, with full authority in
      connection with this Merger Agreement, especially including, but not limited
      to,
      any matter that must be known or decided by the Deliberative Body, including
      any
      notification required by the same, without limitation.




**22)**  **GOVERNING
      LAW**





The
      provisions of this Merger Agreement shall be governed by the laws of the
      Republic of Chile.





6





**23)**  **DOMICILE**





For
      all
      intents and purposes, the Parties establish their domicile in the municipal
      district of Santiago.





Members
              of the
              Falabella Group
            
            
            Members
              of the
              D&S Group/signed/
            
            
            /signed/Reinaldo Solari Magnasco
            
            
            Felipe Ibáñez Scott, pro se
              andp.p.
                Servicios e Inversiones Trucha S.A./signed/
            
            
            /signed/Juan Cuneo Solari
            
            
            Rodrigo Cruz Mattap.p.
                Seprocom
                S.A./signed/
            
            
            /signed/Sergio Cardone Solari
            
            
            Rodrigo Cruz Mattap.p.
                Empresas Almac S.A./signed/
            
            
            /signed/Liliana Solari Falabella
            
            
            Rodrigo Cruz Mattap.p.
                Future Investments S.A./signed/
            
            
            /signed/Juan Carlos Cortés Solari
            
            
            Rodrigo Cruz Mattap.p.
                International Supermarket Holdings
                S.A./signed/José Luis del Río Goudiep.p. Dersa S.A.


7


**EXHIBIT
      A**


**DISPUTE
      RESOLUTION MECHANISM**








|1. | The
              Parties agree to designate the deliberative body referred to herein, in an*ex
              aequo et bono*arbitration
              or proxy capacity, as the case may be (the “Deliberative Body”), with the
              express authority to integrate this Merger Agreement and establish
              the
              provisions that the Definitive Contracts are to include in all aspects
              not
              expressly regulated herein, in any and all aspects thereof, whether
              of its
              essence, inherent thereto or merely incident thereon, in the same manner
              as article 1809 of the Civil Code authorizes a third party to determine
              the price of a purchase & sale transaction, as well as to establish
              the timing for the execution of such Definitive Contracts; determine
              a
              breach by any of the parties and, if applicable, establish and order
              the
              payment of the penalty determined by the Merger Agreement, or any other
              effects of the breach of any obligation. In such case, the Deliberative
              Body shall act as an irrevocable proxy for the Parties to this effect,
              pursuant to article 241 of the Code of Commerce, which is deemed without
              prejudice to the full jurisdictional authority of the Deliberative
              Body in
              its*ex
              aequo et bono*arbitration capacity.
|-- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------




|2. | The
              Deliberative Body shall be comprised of three members, two of whom
              shall
              not be attorney (the “Non-Attorney members”) and one shall be an attorney
              (the “Deliberative Body Chair”). The Falabella Group shall designate one
              Non-Attorney Member and the D&S Group shall designate the other
              Non-Attorney Member. The Deliberative Body Chair will be entitled to
              decide on any issue in which the Non-Attorney Members are unable to
              agree,
              and shall be one of the persons designated in the following paragraph,
              in
              the order established therein.
|-- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------




|3. | The
              Parties hereby designate, first, as Deliberative Body Chair, Mr. Roberto
              Guerrero del Río. If Mr. Roberto Guerrero del Río is unwilling or unable
              to accept this position, the Parties designate Mr. Sergio Urrejola
              Monckeberg. If Mr. Sergio Urrejola Monckeberg is unwilling or unable
              to
              accept this position, the Parties designate Mr. Miguel Luis Amunátegui
              Monckeberg. If Mr. Miguel Luis Amunátegui Monckeberg is unwilling or
              unable to accept this position and the Parties are unable to agree
              on
              another person, the authority to integrate this Merger Agreement shall
              be
              deemed terminated for all intents and purposes. And in such case any
              dispute theretofore or thereafter arising between the parties shall
              be
              resolved by the Deliberative Body, the jurisdictional authority of
              which
              shall survive in full force and effect, which body shall be chaired
              by the
              person who, in the absence of any agreement between the Non-Attorney
              members, is designated by the Santiago Chamber of Commerce. If the
              third
              member is designated by the Santiago Chamber of Commerce, each Party
              will
              have the discretional right (without cause) to veto up to 10
              persons.
|-- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------




|4. | The
              induction process for the Deliberative Body to exercise its functions
              as
              an*ex
              aequo et bono*arbitration panel or proxy, as the case may be, shall commence with
              a
              communication sent by registered mail by either of the groups to the
              other
              group, (i) indicating the intention to establish the procedure and
              (ii)
              designating the Non-Attorney Member said group is entitled to designate.
              The group that receives this communication shall have a deadline of
              10
              business days to designate the Non-Attorney Member said group is entitled
              to designate and advise the name of the designee by registered mail
              to the
              group that commenced the procedure. If the Party who did not commence
              the
              induction process does not designate the Non-Attorney member it is
              entitled to designate within the stated term, said party shall by virtue
              of that fact alone be deemed as having delegated the designation of
              said
              Non-Attorney member to the Santiago Chamber of Commerce (the “Chamber”),
              which shall designate the same from among the non-attorney members
              on the
              list of arbitrators kept by its Arbitration
              Center.
|-- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------




|5. | Arbitration
              shall be completed within 3 months from the date on which the last
              of the
              members of the Deliberative Body is sworn in, except if, on reasonable
              grounds, the Deliberative Body Chair decides to extend the term for
              an
              additional 3 months. The Parties expressly waive any remedies to which
              they could be entitled against the award and any other decision made
              or
              issued by the Deliberative Body.
|-- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------




8


|6. | The
              Parties waive the witness challenges contemplated by sections 4 and
              5 of
              article 358 of the Code of Civil Procedure in relation to the inability
              of
              witnesses due to employment ties with the parties submitting said
              witnesses, notwithstanding the authority of the arbitration panel to
              weigh
              the evidential value of their testimonies.
|-- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------




9


**EXHIBIT
      B**


**REPRESENTATIONS
      AND WARRANTIES**





The
      Falabella Group and the D&S Group make the following representations with
      regard to its Respective Controlled Entity, including the entities controlled
      by
      the Respective Controlled Entity (collectively, the “Relevant Entities”) and
      warrants that said representations are effective as of this date and as of
      the
      date of the Merger.





|1. | Organization:The Relevant Entities are companies legally organized and validly existing
              and licensed and authorized to conduct their businesses as they presently
              do.
|-- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------




|2. | Licenses
              and Authorizations:The
              Relevant Entities are in possession of all permits, patents, licenses,
              franchises, concessions and government authorizations (the “Permits”)
              necessary for their operations as they have been conducted in the past.,
              both in Chile and in the other countries where they do business,
              considering that certain establishments and warehouses are functioning
              under temporary permits, and except for those permits the absence or
              defect of which does not generate a material adverse
              impact.
|-- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------




|3. | Title
              to Assets:The Relevant Entities own, possess and hold the tangible and intangible
              assets, chattels and real property (the “Assets”) that are recorded in
              their accounting books as being under their ownership, possession or
              leasehold, respectively, and said Assets are not subject to any liens,
              prohibitions, limitations or litigation other than as described in
              the
              Pertinent Financial Statements. In case of any absence of or cloud
              on
              title (a “Cloud on Title”) as to the ownership, possession or leasehold of
              Assets, the Cloud on Title (i) does not affect assets that, individually
              or collectively considered, are of significance to the Relevant Entities
              taken as a whole, and (ii) does not materially compromise or limit
              the
              normal conduct of activities by the Relevant Entities taken as a whole.
|-- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------




|4. | Financial
              Statements:The Pertinent Financial Statements (i) have been prepared in accordance
              with generally accepted accounting principles of Chile or the relevant
              jurisdiction (the “GAAP”), (ii) fairly reflect the financial position of
              the Relevant Entities, the results of their operations, assets,
              liabilities and equity accounts as of their date of preparation, and
              (iii)
              do not contain or fail to include anything the inclusion or omission
              of
              which would render them misleading in any material respect. Between
              the
              date of the Financial Statements as of December 31, 2006 and this date
              (i)
              there have been no material adverse variations to the consolidated
              net
              worth of the Relevant Entities, (i) there has been no variation to
              the
              accounting policies of the Relevant Entities or on the manner they
              are
              applied, and (iii) no significant liabilities, actual or contingent,
              have
              been incurred except for those originating in the ordinary course of
              business consistent with past practices. The estimations, valuations,
              allowances and reserves (the “Estimations”) used by the Company in
              preparing the Financial Statements as of December 31, 2006, with regard
              to
              trade debtors, consumer loans and inventories are sufficient and adequate
              considering expected losses, GAAP and the standards of the Banking
              and
              Finance Commission or other competent regulatory agencies, as the case
              may
              be. Between the date of the Financial Statements as of December 31,
              2006
              and this date and the date of the Merger, there have not been and shall
              not be any significant variations to the criteria used in making the
              Estimations.
|-- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------




|5. | Agreements
              and Transactions with Shareholders and Executives:The Relevant Entities are not required by any contract or undertaking
              (i)
              that are contrary to the provisions of articles 44 or 89 of Law 18,046
              or
              (ii) with executives of the Relevant Entities, executed other than
              on
              arm’s length terms with regard to deliverables, effectiveness,
              consequences of termination or otherwise.
|-- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------




|6. | Taxes:The Relevant Entities (i) have filed in time and form all the tax returns
              they are required to file under applicable laws, (ii) have paid or
              withheld and paid to the tax authorities, as the case may be, in time
              and
              form, all taxes, fees, duties and assessments generally (the “Taxes”), and
              (iii) are not the subject of any action, claim, assessment or procedures
              in relation to Taxes entailing significant payments not correctly
              reflected in the Financial Statements as of December 31, 2006. In case
              of
              any errors or inaccuracies in any such aspects, said errors or
              inaccuracies do not materially affect or henceforth compromise the
              normal
              conduct of the activities of the entities referred to in
              (a).
|-- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------




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For
      the
      purposes of this section, “Pertinent Financial Statements” include the Financial
      Statements as of December 31, 2006, as of December 31, 2007, and those prepared
      in connection with the Merger.





Consequences
      of Breach:





If
      the
      total effect on any inaccuracy in the representations made by D&S and
      Falabella does not exceed US$50,000,000 and US$100,000,000, respectively, there
      shall be no consequences.





If
      the
      total effect of any inaccuracy in the representations exceeds the amounts
      referred to in the preceding paragraph, the Surviving Company shall be paid
      damages by the non-diligent Party in the amount required to place the Surviving
      Company in a position equivalent to that in which it would have been had the
      inaccuracy in question not taken place, for any damage in excess of
      US$50,000,000 or US$100,000,000, in each case.





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