Document:

Exhibit 10.59(b)

Exhibit 10.57(b)

	FIRST
      AMENDMENT TO EMPLOYMENT AGREEMENT
	 	 	 	 	 
	This First
      Amendment to Employment Agreement is made and entered into as of January
      24, 2001, by and between PriceSmart, Inc., a Delaware Corporation (“Employer”)
      and Brud Drachman (“Executive”).
	 	 	 	 	 
	
      Recitals

       
	 	 	 	 	 
	A)	 	On January
      11, 2000 an Employment Agreement was made and entered into by and between
      Employer and Executive.
	 	 	 
	B)	 	Employer
      and Executive now desire to amend the Employment Agreement, as set forth
      hereinbelow: 
	 	 	 
	Agreement
	 	 	 	 	 
	1.	 	Section
      3.1 of the Agreement which provides:
	 	 	 	 	 
	 	 	 	3.1 Term.
      The term of Executive’s employment hereunder shall commence on March
      31, 2000 and shall continue until March 31, 2001 unless sooner terminated
      or extended as hereinafter provided. 
	 	 	 	 	 
	 	 	is hereby
      amended, effective January 24, 2001, to provide as follows:
	 	 	 	 	 
	 	 	 	3.1 Term.
      The term of Executive’s employment hereunder shall commence on March
      31, 2000 and shall continue until March 31, 2002 unless sooner terminated
      or extended as hereinafter provided. 
	 	 	 	 	 
	2.	 	All other
      terms of the Employment Agreement shall remain unaltered and fully effective.
       
	 	 	 	 	 
	 	 	Executed
      in San Diego, California, as of the date first written above. 
	 	 	 	 	 

	EXECUTIVE	EMPLOYER
	 	 
	 	PRICESMART,
      INC.
	 	 
	Brud
        Drachman 

       /s/ B. E. Drachman
	By: /s/
      Robert M. Gans

      

      Name: Robert M. Gans

      

      Its: Executive Vice PresidentExhibit 10.59(c)

Exhibit 10.57(c)
  

	 	 	 	 	 
	SECOND
      AMENDMENT TO EMPLOYMENT AGREEMENT
	 	 	 	 	 
	This Second
      Amendment to Employment Agreement is made and entered into as of June 1,
      2001, by and between PriceSmart, Inc., a Delaware Corporation (“Employer”)
      and Brud Drachman (“Executive”). 
	 	 	 	 	 
	Recitals
	 	 	 	 	 
	A)	 	On January
      11, 2000 an Employment Agreement was made and entered into by and between
      Employer and Executive.
	 	 	 	 	 
	B)	 	On January
      24, 2001, a First Amendment to Employment Agreement was made and entered
      into by and between Employer and Executive; 
	 	 	 	 	 
	C)	 	Employer
      and Executive now desire to amend the Employment Agreement, as set forth
      hereinbelow:
	 	 	 	 	 
	Agreement
	 	 	 	 	 
	1.	 	Section
      2.1 of the Agreement which provides:
	 	 	 	 	 
	 	 	 2.1	 Salary.
      For Executive’s services hereunder, Employer shall pay as base salary
      to Executive the amount of $105,000 during each year of the Employment Term.
      Said salary shall be payable in equal installments in conformity with Employer’s
      normal payroll period. Executive shall receive such salary increases, if
      any, as Employer, in its sole discretion, shall determine. 
	 	 	 	 	 
	 	 	is hereby
      amended, effective June 1, 2001, to provide as follows:
	 	 	 	 	 
	 	 	2.1	Salary.
      For Executive’s services hereunder, Employer shall pay as base salary
      to Executive the amount of $137,000 during each year of the Employment Term.
      Said salary shall be payable in equal installments in conformity with Employer’s
      normal payroll period. Executive shall receive such salary increases, if
      any, as Employer, in its sole discretion, shall determine.
	 	 	 	 	 
	2.	 	All other
      terms of the Employment Agreement shall remain unaltered and fully effective.
	 	 	 	 	 
	 	 	Executed
      in San Diego, California, as of the date first written above.
	 	 	 	 	 

	EXECUTIVE	EMPLOYER
	 	 
	 	PRICESMART,
      INC.
	 	 
	Brud
        Drachman 

       /s/ B. E. Drachman
	By: /s/
      Robert M. Gans

      

      Name: Robert M. Gans

      

      Its: Executive Vice PresidentExhibit 10.59(d)

Exhibit 10.57(d)
Memorandum

 PriceSmart, Inc.

  4649 Morena Blvd.

  San Diego, CA 92117

  Tel 858 581-7485

  Fax 858 581-4707

PRICESMART (LOGO) 

	To:	 	 Brud
      Drachman
	 	 	 	 	 
	From:	 	Bob Gans
      /s/ BOB GANS
	 	 	 	 	 
	Re:	 	Salary
      Increase
	 	 	 	 	 
	Date:	 	October
      16, 2001
	 	 	 	 	 

With reference
  to your Employment Agreement, this Memorandum will confirm that effective September
  1, 2001, your annual base salary increased by $20,000, to $157,000.Exhibit 10.59(e)

Exhibit 10.57(e)
   

	 	 	 	 	 
	THIRD
      AMENDMENT TO EMPLOYMENT AGREEMENT
	 	 	 	 	 
	This Third
      Amendment to Employment Agreement is made and entered into as of January
      16, 2002, by and between PriceSmart, Inc., a Delaware Corporation (“Employer”)
      and Brud Drachman (“Executive”). 
	 	 	 	 	 
	Recitals
	 	 	 	 	 
	A)	 	On January
      11, 2000 an Employment Agreement was made and entered into by and between
      Employer and Executive. 
	 	 	 	 	 
	B)	 	On January
      24, 2001, a First Amendment to Employment Agreement was made and entered
      into by and between Employer and Executive; 
	 	 	 	 	 
	C)	 	On June
      1, 2001, a Second Amendment to Employment Agreement was made and entered
      into by and between Employer and Executive; 
	 	 	 	 	 
	D)	 	Pursuant
      to a Memorandum dated October 16, 2001, Executive’s Annual Base Salary
      was increased to $157,000, effective as of September 1, 2001. 
	 	 	 	 	 
	C) 
    	 	Employer
      and Executive now desire to amend the Employment Agreement, as set forth
      hereinbelow:
	 	 	 	 	 
	Agreement
	 	 	 	 	 
	1.	 	Section
      3.1 of the Agreement which provides: 
	 	 	 	 	 
	 	 	 	3.1 Term.
      The term of Executive’s employment hereunder shall commence on March
      31, 2000 and shall continue until March 31, 2002, unless sooner terminated
      or extended as hereinafter provided. 
	 	 	 	 	 
	 	 	is hereby
      amended, effective January 16, 2002, to provide as follows:
	 	 	 	 	 
	 	 	 	3.1 Term.
      The term of Executive’s employment hereunder shall commence on March
      31, 2000 and shall continue until March 31, 2003, unless sooner terminated
      or extended as hereinafter provided. 
	 	 	 	 	 
	2.	 	All other
      terms of the Employment Agreement shall remain unaltered and fully effective.
	 	 	 	 	 
	 	 	 Executed
      in San Diego, California, as of the date first written above.
	 	 	 	 	 

	EXECUTIVE	EMPLOYER
	 	 
	 	PRICESMART,
      INC.
	 	 
	Brud
        Drachman 
 
        /s/ B. E. Drachman
	By: /s/
      Robert M. Gans

      

      Name: Robert M. Gans

      

      Its: Executive Vice PresidentExhibit 10.60

Exhibit 10.58

EXECUTION
  COPY

INVESTMENT
  NUMBER 11213 

OMNIBUS
  AGREEMENT 

among

  PSMT PHILIPPINES,
    INC.

   PRICESMART,
    INC.  

and

INTERNATIONAL
  FINANCE CORPORATION  

Dated
  as of June 27, 2002

 

TABLE
  OF CONTENTS 

	
	Volume
      I – Preliminary Volume	 
	 	 
	ARTICLE
      I	2
	Preliminary
      Provisions	 
	     Section
      1.01. Interpretation	2
	     Section
      1.02. Severability	2
	     Section
      1.03. Governing Law	2
	     Section
      1.04. Waiver of Priority	2
	 	 
	Volume
      II – IFC LOAN AGREEMENT	 
	 	 
	ARTICLE
      I	3
	Definitions
      and Interpretation	3
	     Section
      1.01. General Definitions	3
	     Section
      1.02. Financial Definitions	10
	     Section
      1.03. Financial Calculations	14
	     Section
      1.04. Interpretation	15
	     Section
      1.05. Business Day Adjustment	15
	 	 
	ARTICLE
      II	15
	The
      Project, Project Cost and Financial Plan	15
	     Section
      2.01. The Project	15
	     Section
      2.02. Project Cost and Financial Plan	15
	 	 
	ARTICLE
      III	16
	The
      Loan	16
	     Section
      3.01. The Loan	16
	     Section
      3.02. Disbursement Procedure	16
	     Section
      3.03. Interest	16
	     Section
      3.04. Default Rate Interest	17
	     Section
      3.05. Repayment	18
	     Section
      3.06. Prepayment	18
	     Section
      3.07. Fees	19
	     Section
      3.08. Currency and Place of Payments	19
	     Section
      3.09. Allocation of Partial Payments	20
	     Section
      3.10. Increased Costs	20
	     Section
      3.11. Unwinding Costs	20
	     Section
      3.12. Suspension or Cancellation by IFC	20
	     Section
      3.13. Cancellation by the Co-Borrowers	21
	     Section
      3.14. Taxes	21
	     Section
      3.15. Expenses	22
	 	 
	ARTICLE
      IV	23
	Representations
      and Warranties	23

 

	     Section
      4.01. Representations and Warranties	23
	     Section
      4.02. IFC Reliance	25
	 	 
	ARTICLE
      V	25
	Conditions
      of Disbursement	25
	     Section
      5.01. Conditions of First Disbursement	25
	     Section
      5.02. Conditions of All Disbursements	27
	     Section
      5.03. Co-Borrowers’ Certification	28
	 	 
	ARTICLE
      VI	28
	     Section
      6.01. Affirmative Covenants	28
	     Section
      6.02. Negative Covenants	29
	     Section
      6.03. Reporting Requirements	33
	     Section
      6.04. Insurance	35
	 	 
	ARTICLE
      VII	37
	Events
      of Default	37
	     Section
      7.01. Acceleration after Default	37
	     Section
      7.02. Events of Default	37
	     Section
      7.03. Bankruptcy	40
	 	 
	ARTICLE
      VIII	40
	Miscellaneous	40
	     Section
      8.01. Saving of Rights	40
	     Section
      8.02. Term of Agreement	40
	     Section
      8.03. Applicable Law and Jurisdiction	40
	     Section
      8.04. Disclosure of Information	42
	 	 
	ANNEX
      A	43
	CO-BORROWERS/PROJECT
      AUTHORIZATIONS	43
	 	 
	ANNEX
      B	45
	INSURANCE
      REQUIREMENTS	45
	 	 
	ANNEX
      C	46
	METHODOLOGY	46
	 	 
	SCHEDULE
      1	50
	FORM
      OF CERTIFICATE OF INCUMBENCY AND AUTHORITY	50
	 	 
	SCHEDULE
      2	52
	FORM
      OF REQUEST FOR DISBURSEMENT (LOAN)	52
	 	 
	SCHEDULE
      3	55
	FORM
      OF LOAN DISBURSEMENT RECEIPT	55
	 	 
	SCHEDULE
      4	56
	FORM
      OF SERVICE OF PROCESS LETTER	56

 

	SCHEDULE
      5	58
	MATTERS
      TO BE COVERED IN LOCAL COUNSEL’S LEGAL OPINION	58
	 	 
	SCHEDULE
      5	59
	 	 
	SCHEDULE
      6	60
	FORM
      OF LETTER TO EACH CO-BORROWER'S AUDITORS	60
	 	 
	SCHEDULE
      7	62
	FORM
      OF CO-BORROWERS’ CERTIFICATION ON DISTRIBUTION OF DIVIDENDS	62
	 	 
	SCHEDULE
      8	63
	FORM
      OF PROGRESS REPORT RE: PROJECT IMPLEMENTATION	63
	 	 
	SCHEDULE
      9	64
	INFORMATION
      TO BE INCLUDED IN ANNUAL REVIEW OF OPERATIONS	64
	 	 
	SCHEDULE
      10	65
	FORM
      OF ANNUAL MONITORING REPORT	65
	 	 
	Volume
      III – MORTGAGE AGREEMENT	 
	 	 
	ARTICLE
      I	80
	Definitions
      and Rules of Interpretation	 
	     Section
      1.01. Certain Defined Terms	80
	     Section
      1.02. Additional Definitions	80
	     Section
      1.03. Rules of Interpretation	81
	 	 
	ARTICLE
      II	81
	Representations
      and Warranties	 
	     Section
      2.01. Representations and Warranties of PSPH	81
	     Section
      2.02. Continuing Representations	82
	 	 
	ARTICLE
      III	82
	Real
      Estate Mortgage	 
	     Section
      3.01. Creation of the Real Estate Mortgage	82
	     Section
      3.02. Real Assets	82
	     Section
      3.03. Registration of Real Estate Mortgage	83
	     Section
      3.04. First Priority Ranking of the Mortgage	83
	 	 
	ARTICLE
      IV	83

 

	Chattel
      Mortgage	 
	     Section
      4.01. Creation of the Chattel Mortgage	83
	     Section
      4.02. The Chattel	84
	     Section
      4.03. Registration of Chattel Mortgage 	84
	     Section
      4.04. First Priority Ranking of the Mortgage	85
	     Section
      4.05. Use of Assets 	85
	 	 
	ARTICLE
      V	85
	Covenants
      and Undertakings of the Borrower	 
	     Section
      5.01. Execution and Registration of Deeds in General	85
	     Section
      5.02. Affirmative Covenants	86
	     Section
      5.03. Negative Covenants	87
	 	 
	ARTICLE
      VI	87
	Rights
      and Remedies of IFC	 
	     Section
      6.01. Right to Act for PSPH	87
	     Section
      6.02. Rights in Eminent Domain	88
	     Section
      6.03. Unauthorized Sale and other Disposition of Assets 	88
	     Section
      6.04. Unauthorized Liens	88
	     Section
      6.05. Events of Default	89
	     Section
      6.06. Waiver of Redemption Right	89
	 	 
	ARTICLE
      VII	89
	Power
      of Attorney	 
	     Section
      7.01. Appointment and Authority of Attorney-in-Fact	89
	     Section
      7.02. Ratification of Attorney’s Acts	90
	     Section
      7.03. Power of Attorney Coupled with Interest	90
	     Section
      7.04. Expenses of Attorney-in-Fact	91
	 	 
	ARTICLE
      VIII	91
	Release
      of Mortgage and Required Collateral Value	 
	     Section
      8.01. Release	91
	     Section
      8.02. Required Value of Assets; Partial Release	91
	 	 
	ARTICLE
      IX 	91
	Miscellaneous
      Provisions	 
	     Section
      9.01. (a) Continuing Security	91
	                          (b)
      Partial Security	91
	     Section
      9.02. Rescission of Payment	91
	     Section
      9.03. (a) Application of Proceeds of Mortgage	92

 

	                          (b)
      Conversion to Required Currency	92
	     Section
      9.04. Further Assurances	92
	     Section
      9.05. Taxes, Fees, etc. in Execution, Registration etc. 	92
	     Section
      9.06. (a) Rights and Remedies Cumulative 	92
	                          (b)
      No Waiver	92
	                          (c)
      Amendments, etc. with respect to the Loans 	92
	     Section
      9.07. Severability	92
	     Section
      9.08. Notice	93
	     Section
      9.09. Benefit of Mortgage Agreement	93
	     Section
      9.10. Discharge of Mortgage	93
	     Section
      9.11. Lender without Obligations 	93
	     Section
      9.12. Governing Law	93
	     Section
      9.13. Heading Descriptive	93
	     Section
      9.14. Applicability of IFC Loan Agreement	93
	 	 
	ANNEX
      A	94
	PART
      1 – PRESENT REAL ASSETS	 
	PART
      2 – FUTURE REAL ASSETS	 
	 	 
	ANNEX
      B	99
	PART
      1 – PRESENT CHATTEL	 
	PART
      2 – FUTURE CHATTEL	 
	 	 
	ANNEX
      C	128
	 	 
	SCHEDULE
      OF EXECUTION OF MORTGAGE SUPPLEMENTS	 
	 	 
	EXHIBIT
      A 	 
	MORTGAGE
      SUPPLEMENT	 
	 	 
	Volume
      IV – PLEDGE AGREEMENT	 
	 	 
	ARTICLE
      I	 
	Definitions
      and Rules of Interpretation	132
	     Section
      1.01. Certain Defined Terms	132
	     Section
      1.02. Additional Definitions	132
	     Section
      1.03 Terms Defined in UCC	132
	     Section
      1.04 Rules of Interpretation	132
	 	 
	ARTICLE
      II	132
	Representations
      and Warranties	 
	     Section
      2.01 Representations and Warranties of PSMT 	132
	     Section
      2.02 Continuing Representations	134

 

	ARTICLE
      III 	134
	Pledge	 
	     Section
      3.01 Creation of the Pledge	134
	     Section
      3.02 Delivery and Other Perfection	135
	     Section
      3.03 First Priority Ranking of the Pledge	135
	 	 
	ARTICLE
      IV	135
	Covenants
      and Undertakings	 
	     Section
      4.01 Execution of Deeds in General and Delivery of Pledged Collateral	136
	     Section
      4.02 Affirmative Covenants	136
	     Section
      4.03 Negative Covenants	136
	 	 
	ARTICLE
      V	137
	Dividends,
      Voting and Other Rights	 
	     Section
      5.01 Dividends	137
	     Section
      5.02 Voting Other Rights	137
	 	 
	ARTICLE
      VI	137
	Rights
      and Remedies of IFC	 
	     Section
      6.01 Remedies Following Events of Default, Etc.	137
	     Section
      6.02 Private Sale	138
	     Section
      6.03 Attorney-in-Fact 	139
	 	 
	ARTICLE
      VII	139
	Termination	 
	 	 
	ARTICLE
      VIII	139
	Miscellaneous	 
	     Section
      8.01 Preservation of Rights	139
	     Section
      8.02 Preservation of Pledge Collateral	139
	     Section
      8.03 (a) Continuing Security 	139
	                         (b)
      Partial Security	139
	     Section
      8.04 Rescission of Payment	140
	     Section
      8.05 (a) Application of Proceeds of Pledge	140
	                         (b)
      Conversion to Required Currency	140
	     Section
      8.06 Deficiency	140
	     Section
      8.07 Further Assurances	140
	     Section
      8.08 Taxes, Fees, etc. on Execution, Registration, etc. 	140

 

	     Section
      8.09 (a) Rights and Remedies Cumulative	140
	                          (b)
      No Waiver	140
	                          (c)
      Amendments, etc. with respect to the Loans	141
	     Section
      8.10 Severability	141
	     Section
      8.11 Notice	141
	     Section
      8.12 Benefit of Pledge Agreement	141
	     Section
      8.13 Discharge of Pledge	141
	     Section
      8.14 Lender Without Obligations	141
	     Section
      8.15 Governing Law; Jurisdiction	141
	     Section
      8.16 Applicability of IFC Loan Agreement	141
	 	 
	SCHEDULE
      1	142
	FILINGS,
      REGISTRATION, RECORDINGS, CONSENTS, APPROVALS, NOTICES AND ACKNOWLEDGEMENTS
      REQUIRED UNDER APPLICABLE LAW	 
	 	 
	ANNEX
      A	143
	PLEDGED
      SHARES	 
	 	 
	Volume
      V – MISCELLANEOUS; EXECUTION	 
	 	 
	ARTICLE
      I	144
	Miscellaneous
      Provisions	 
	     Section
      1.01. Headings Descriptive	144
	     Section
      1.02. Notices	144
	     Section
      1.03. English Language	144
	     Section
      1.04. Successors and Assignees 	144
	     Section
      1.05. Amendments, Waivers and Consents	145
	     Section
      1.06. Governing Law	145
	     Section
      1.07. Counterparts	145

 

Volume
  I – Preliminary Volume

	 	 	 	 	 
	 	OMNIBUS
      AGREEMENT, dated as of June_________, 2002, among: 
	 	 	 	 	 
	 	(1)	PRICESMART,
      INC., a corporation organized and existing under the laws of the
      State of Delaware, United States of America (“PSMT”); 
	 	 	 	 	 
	 	(2)	PSMT
      PHILIPPINES, INC., a corporation organized and existing under the
      laws of the Republic of Philippines (“PSPH”),
	 	 	 	 	 
	 	 	 (“PSMT”
      and “PSPH” together the “Co-Borrowers”); and
	 	 	 	 	 
	 	 (3)	INTERNATIONAL
      FINANCE CORPORATION, an international organization established
      by Articles of Agreement among its member countries including the Republic
      of Philippines (“IFC”). 
	 	 	 	 	 

W I T N
  E S S E T H: 

 
WHEREAS:
  

       (A)       Co-Borrowers
  have requested for debt financing from IFC for the Project; 

       (B)       by
  the IFC Loan Agreement comprising Volume II of this Omnibus Agreement (the “IFC
  Loan Agreement”) between the Co-Borrowers and IFC, IFC has agreed to lend
  to the Co-Borrowers up to US$12,500,000.00 (the “Loan”), for the sole
  purpose of financing of the Project;

       (C)       the
  IFC Loan Agreement contemplates the execution, delivery and implementation of
  the Mortgage Agreement comprising Volume III of this Omnibus Agreement (the
  “Mortgage Agreement”), the creation and perfection of the Mortgage
  under said Volume III, the execution, delivery and implementation of the Pledge
  Agreement comprising Volume IV of this Omnibus Agreement (the “Pledge Agreement”),
  and the creation and perfection of the Pledge under said Volume IV;

       (D)     
  it is a condition precedent to the obligation of IFC under the IFC Loan Agreement
  that the Mortgage Agreement and the Pledge Agreement shall have been entered
  into by the parties hereto and shall have become unconditionally and fully effective
  in accordance with the terms hereof;

       (E)       to
  induce IFC to make the Loan thereunder, the Borrower has agreed to enter into
  this Omnibus Agreement and be bound by all covenants and obligations provided
  for herein.

       NOW,
  THEREFORE, the parties hereto hereby agree as follows:

ARTICLE
  I

  Preliminary Provisions

       Section
  1.01. Interpretation. (a) For avoidance of doubt, when used in an agreement
  comprising a Volume of this Omnibus Agreement, (i) the phrase “this Agreement”
  shall refer only to such agreement comprising such Volume, and not to the Omnibus
  Agreement or any other Volume thereof, (ii) references to “herein”,
  “hereof’, “hereto”, and similar references refer only to
  such Volume, and (iii) references to “Annex”, “Schedule”
  and similar referenences refer only to the Annexes or Schedules of such Volume.
  “Volume” shall mean a volume of this Omnibus Agreement.

       (b)
  Unless otherwise defined herein, all capitalized terms used in this Preliminary
  Volume (including the recitals hereto) that are undefined herein and are defined
  in the IFC Loan Agreement (including those terms incorporated therein by reference
  to another document) shall have the respective meanings assigned to them in
  the IFC Loan Agreement.

 

       Section
  1.02. Severability. If any provision of this Omnibus Agreement (including
  any Volume thereof) is prohibited or unenforceable in any jurisdiction, such
  prohibition or unenforceability shall not invalidate the remaining provisions
  and Volumes of the Omnibus Agreement, or affect such provisions in any other
  jurisdiction.

       Section
  1.03. Governing Law. The provisions of this Volume I shall be governed
  by and construed in accordance with the same governing law and rules of construction
  as are stipulated to apply to Volume II of this Omnibus Agreement.

       Section
  1.04. Waiver of Priority. IFC hereby waives the preference created
  under Article 2244(14) of the Civil Code of the Philippines arising in relation
  to the Loan Agreement by virtue of the notarization of this Omnibus Agreement,
  provided that any other rights and preferences arising under any other Volume
  in relation to such notarization are not waived or otherwise affected.

 

3

 

Volume II - IFC
LOAN AGREEMENT
       IFC
  LOAN AGREEMENT, between the Co-Borrowers and IFC:

ARTICLE
  I

  Definitions and Interpretation

       Section
1.01. General Definitions. Wherever used in this Agreement, the following
terms have the meanings opposite them: 
	 	 	 	 	 
	“Accounting
      Principles”	United
      States Generally Accepted Accounting Principles (US-GAAP) promulgated by
      the Financial and Accounting Standards Board, together with pronouncements
      thereon from time to time, and applied on a consistent basis;
	 	 	 	 	 
	“Affiliate”	 any Person
      directly or indirectly controlling, controlled by or under common control
      with, one or both of the Co-Borrowers (for purposes of this definition,
      “control” means the power to direct the management or policies
      of a Person, directly or indirectly, whether through the ownership of shares
      or other securities, by contract or otherwise, provided that the direct
      or indirect ownership of fifteen per cent. (15%) or more of the voting share
      capital of a Person is deemed to constitute control of that Person, and
      “controlling” and “controlled” have corresponding meanings);
	 	 	 	 	 
	“Alabang
      Store”	the PSMT
      store located on property leased by PSPH in Filinvest Corporate City, Alabang,
      Muntinlupa City, the Philippines, and covered under TCT No. 6604 issued
      by the Registrar of Deeds of Muntinlupa City in the name of Filinvest Alabang,
      Inc; 
	 	 	 	 	 
	“Amending
      Agreement (Escrow)”	the amendment
      agreement dated on or about the date hereof between PSMT, The Bank of New
      York and IFC amending certain of the terms and conditions of the Escrow
      Account Agreement and providing for, amongst other things, an increase in
      the Minimum Amount (as defined therein) so as to provide for twelve (12)
      months’ lease payments payable by PSPH for the Ortigas Store and the
      Alabang Store;
	 	 	 	 	 
	“Amending
      Agreement (Share
      Retention)”	the amendment
      agreement dated on or about the date hereof among the parties to the Share
      Retention Agreement and PSMT Jamaica amending certain of the terms and conditions
      of the Share Retention Agreement and providing for, amongst other things,
      certain share retention obligations of PSMT in relation to PSPH and PSMT
      Jamaica;
	 	 	 	 	 
	“Amended
      Escrow Account
      Agreement” 	the Escrow
      Account Agreement as amended by the Amending Agreement (Escrow); 
	 	 	 	 	 
	“Amended
      Share Retention Agreement”	the Share
      Retention Agreement as amended by the Amending Agreement
      (Share Retention);

 

	4
	 	 	 	 	 
	 	 	 	 	 
	“Annual
      Monitoring Report”	a report
      substantially in the form provided in Schedule 10 (Form of Annual Monitoring
      Report) (as the same may be amended or supplemented from time to time);
	 	 	 	 	 
	 “Aseana
      Store”	the PSMT
      store located on property leased by PSPH at Aseana Business Park, Barangay
      Tambo, Parañaque City, Metro Manila, the Philippines;
	 	 	 	 	 
	“Auditors”	Ernst
      & Young in the case of PSMT and Punongbayan & Araullo in the case
      of PSPH or such other firms as either Co-Borrower shall appoint from time
      to time as its auditors pursuant to Section 6.01(d) (Affirmative Covenants);
	 	 	 	 	 
	“Authority”	any national,
      supranational, regional or local government or governmental, administrative,
      fiscal, judicial, or government-owned body, department, commission, authority,
      tribunal, agency or entity, or central bank (or any Person, whether or not
      government owned and howsoever constituted or called, that exercises the
      functions of a central bank);
	 	 	 	 	 
	“Authorization”	any consent,
      registration, filing, agreement, notarization, certificate, license, approval,
      permit, authority or exemption from, by or with any Authority, whether given
      by express action or
      deemed given by failure to act within any specified time period and all
      corporate, creditors' and shareholders' approvals or consents; 
	 	 	 	 	 
	“Authorized Representative”	any natural
      person who is duly authorized by each Co-Borrower to act on its behalf for
      the purposes specified in, and whose name and a specimen of whose signature
      appear on, the Certificate of Incumbency and Authority most recently delivered
      by each Co-Borrower to IFC;
	 	 	 	 	 
	“Base
      Fixed Rate”	 for each
      Disbursement, the rate determined in accordance with Section 3.03(c) (Interest)
      and with the methodology set out in Annex C (Methodology);
	 	 	 	 	 
	 “Business
      Day”	a day
      when banks are open for business in New York, New York and Manila, the Philippines
      or, solely for the purpose of determining the Disbursement Interest Rate,
      London, England;
	 	 	 	 	 
	“Capital Lease
      Obligations”	 the obligations
      of any Person as of the date of determination, to pay rent and other amounts
      under any lease of (or other arrangement conveying the right to use) real
      or personal property, or a combination thereof, which obligations are required
      to be classified and accounted for as capital leases on the balance sheet
      of such Person pursuant to the Accounting Principles;
	 	 	 	 	 
	“Certificate
      of Incumbency and Authority”	a certificate
      provided to IFC by each of the Co-Borrowers in the form of Schedule 1 (Form
      of Certificate of Incumbency and Authority);

 

	5
	 	 	 	 	 
	 	 	 	 	 
	“Charter”	with respect
      to each Co-Borrower, its memorandum and articles of association, by-laws
      or other constitutive document (as the case may be);
	 	 	 	 	 
	“Congressional
      Store”	 the PSMT
      store located on property leased by PSPH, located at 8888 Congressional
      Avenue, Ramon Magsaysay Bago Bantay, Quezon City, the Philippines;
    
	 	 	 	 	 
	“Common
      Stock Purchase Agreement”	the common
      stock purchase agreement dated April 12, 2002 entered into between PSMT
      and IFC providing for the terms and conditions pursuant to which IFC shall
      purchase the common stock of PSMT;
	 	 	 	 	 
	“Derivative
      Transaction”	any swap
      agreement, cap agreement, collar agreement, futures contract, forward contract
      or similar arrangement with respect to interest rates, currencies or commodity
      prices;
	 	 	 	 	 
	“Disbursement”	any Disbursement
      of the Loan;  
	 	 	 	 	 
	“Disbursement
      Interest Rate”	for each
      Disbursement, a rate of interest equal to the sum of:
	 	 	 	 	 
	 	(i)	the Spread;
      and
	 	 	 	 	 
	 	(ii)	the Base
      Fixed Rate;
	 	 	 	 	 
	“Dollars”
      and “$”	the lawful
      currency of the United States of America;
	 	 	 	 	 
	“E
      Class Corporation”	a private
      company incorporated in the Philippines with a thirty eight per cent. (38%)
      shareholding in PSPH as of the date hereof;
	 	 	 	 	 
	“Environmental
      Compliance Certificate”	any of
      the environmental compliance certificates required to be obtained by PSPH
      pursuant to the laws of the Philippines;
	 	 	 	 	 
	“Environmental,
      Health and Safety
      Guidelines”	the IFC
      General Health and Safety Guidelines, dated July 1998 and the World Bank
      General Environmental Guidelines, dated July 1998, a copy of which has been
      delivered to, and receipt of which has been acknowledged by, the Co-Borrowers
      by letter dated January 14, 2002 and is incorporated herein by reference;
	 	 	 	 	 
	“Environmental and
      Social Policies”	the IFC
      Operational Policy on Environmental Assessment (OP 4.01), dated October
      1998 and the IFC Policy Statement on Forced Labor and Harmful Child Labor,
      dated March 1998, copies of which have been delivered to, and receipt of
      which has been acknowledged by, the Co-Borrowers by letter dated January
      14, 2002 and is incorporated herein by reference;
	 	 	 	 	 
	“Environmental
      Side Letter”	the side
      letter agreement dated on or about the date hereof between PSMT, PSMT Jamaica
      and IFC pursuant to which PSMT and PSMT Jamaica undertake to comply with
      certain environmental covenants (as stated therein) in relation to PSMT’s
      operations in
      Jamaica;

 

	6
	 	 	 	 	 
	 	 	 	 	 
	 “ERS”	 the Environmental
      Review Summary for PSPH dated January 16, 2002 prepared by IFC and approved
      by the Co-Borrowers;
	 	 	 	 	 
	“Event of Default”	any one
      of the events specified in Section 7.02 (Events of Default);
	 	 	 	 	 
	“Escrow Account”	the escrow
      account set up and maintained pursuant to the terms of the Amended Escrow
      Account Agreement;
	 	 	 	 	 
	“Escrow Account
      Agreement”	the Escrow
      Account Agreement dated January 26, 2001 entered into between PSMT, The
      Bank of New York and IFC;
	 	 	 	 	 
	“First Metro
      Investment Corporation”	the wholly-owned
      investment subsidiary of the Metrobank Group based in the Philippines with
      a ten per cent. (10%) shareholding in PSPH as of the date hereof; 
	 	 	 	 	 
	“Financial Plan”	the proposed
      sources of financing for the Project set out in Section 2.02(b) (Project
      Cost and Financial Plan);
	 	 	 	 	 
	“Financial Year”	the accounting
      year of PSMT which commences each year on September 1 and ends on the following
      August 31, or such other period as PSMT, with IFC’s consent, from time
      to time designates as its accounting year;
	 	 	 	 	 
	“Fort Bonifacio
      Store”	 the PSMT
      store located on property leased by PSPH at the corner of 32nd Street and
      5th Avenue, Fort Bonifacio Global City, Taguig, Metro Manila, the Philippines;
    
	 	 	 	 	 
	“IFC Security”	 the security
      created by or pursuant to the Security Documents to secure all amounts owing
      by the Co-Borrowers to IFC under this Agreement; 
	 	 	 	 	 
	 “Increased
      Costs”	 the amount
      certified in an Increased Costs Certificate to be the net incremental costs
      of, or reduction in return to, IFC in connection with the making or maintaining
      of the Loan that result from: 
	 	 	 	 	 
	 	(i)	any change
      in any applicable law or regulation or directive (whether or not having
      force of law) or in its interpretation or application by any Authority charged
      with its administration; or  
	 	 	 	 	 
	 	(ii)	 compliance
      with any request from, or requirement of, any central bank or other monetary
      or other Authority which in either case after the date of this Agreement:
	 	 	 	 	 
	 	 	(A)	 imposes,
      modifies or makes applicable any reserve, special deposit or similar requirements
      against assets held by, or deposits with or for the account of, or loans
      made by IFC;
	 	 	 	 	 
	 	 	(B)	 imposes
      a cost on IFC as a result of IFC having made the Loan or reduces the rate
      of return on the overall capital of IFC that it would have achieved had
      IFC not made the Loan;
	 	 	 	 	 
	 	 	 (C)	changes
      the basis of taxation on payments

 

	7
	 	 	 	 	 
	 	 	 	 	 
	 	 	 	received
      by IFC in respect of the Loan (otherwise than by a change in taxation in
      the overall net income of IFC); or
	 	 	 	 	 
	 	 	(D)	imposes
      on IFC any other condition regarding the making or maintaining of the Loan;
	 	 	 	 	 
	“Increased Costs
      Certificate”	a certificate
      provided from time to time by IFC certifying the amount of, and circumstances
      giving rise to, the Increased Costs;
	 	 	 	 	 
	“Interest Payment
      Date”	June 15
      and December 15 in any year;
	 	 	 	 	 
	 “Interest
      Period”	 each
      period of six (6) months beginning on an Interest Payment Date and ending
      on the day immediately before the next following  Interest
      Payment Date, except in the case of the first period applicable to each
      Disbursement when it means the period beginning
      on the date on which that Disbursement is made and ending on the day immediately
      before the next following Interest Payment Date;  
	 	 	 	 	 
	“Interest Rate
      Setting Date”	for each
      Disbursement, the date on which the Base Fixed Rate is set in accordance
      with Section 3.03(d) (Interest);
	 	 	 	 	 
	“Investment
      Policies”	 the Investment
      Policies of PSMT dated November 1998 and provided to IFC by way of facsimile
      on April 25, 2002;
	 	 	 	 	 
	“LAC Loan Agreements”	the loan
      agreements dated January 26, 2001 among PSMT, certain of its Affiliates
      and IFC, pursuant to which IFC agreed to lend the aggregate amount of up
      to thirty two million Dollars consisting of an A Loan in the amount of twenty-two
      million Dollars ($22,000,000) and a B Loan in the amount of ten million
      Dollars ($10,000,000);
	 	 	 	 	 
	“LIBOR”	shall
      have the meaning set forth in Annex C (Methodology); 
	 	 	 	 	 
	“Lien”	 any mortgage,
      pledge, charge, assignment, hypothecation, security interest, title retention,
      preferential right, trust arrangement, right of set-off, counterclaim or
      banker’s lien, privilege or priority of any kind having the effect
      of security, any designation of loss payees or beneficiaries or any similar
      arrangement under or with respect to any insurance policy or any preference
      of one creditor over another arising by operation of law; 
	 	 	 	 	 
	“Loan”	the loan
      specified in Section 3.01(The Loan) or, as the context requires,
      its principal amount from time to time outstanding;  
	 	 	 	 	 
	“Loan Consolidation
      Date”	the first
      Interest Payment Date after the Loan has been fully disbursed (or the undisbursed
      balance of the Loan has been canceled pursuant to Section 3.12 (Suspension
      or Cancellation by IFC) or Section 3.13 (Cancellation by the Co-Borrowers);
	 	 	 	 	 
	“Loan Currency”	Dollars;

 

	8
	 	 	 	 	 
	 	 	 	 	 
	“Loan Interest
      Rate”	 beginning
      on the Loan Consolidation Date, the rate at which interest is payable on
      the Loan, as determined in accordance with Section 3.03(f) (Interest);
    
	 	 	 	 	 
	“Material Adverse
      Effect”	a material
      adverse effect on:
	 	 	 	 	 
	 	(i)	one or
      both Co-Borrowers, their assets or properties;
	 	 	 	 	 
	 	(ii)	the business
      prospects or financial condition of one or both Co-Borrowers;
	 	 	 	 	 
	 	(iii)	the implementation
      of the Project, the Financial Plan or the carrying on of the business or
      operations of one or both Co-Borrowers; or
	 	 	 	 	 
	 	(iv)	the ability
      of the Co-Borrowers to comply with their obligations under this Agreement
      or any other Transaction Document;
	 	 	 	 	 
	 “Nimfa
        Villegas Litigation”
	the litigation
      relating to the Congressional Store docketed as Civil Case Number: Q-02-46304
      entitled Nimfa E. Villegas v. Register of Deeds, et al, and pending
      before the Regional Trial Court of the National Capital Judicial Region,
      Branch 96, Quezon City, the Philippines;
	 	 	 	 	 
	“Official”	any officer
      of a political party or candidate for political office in the Philippines
      or any officer or employee (i) of the government (including any legislative,
      judicial, executive or administrative department, agency or instrumentality
      thereof) or (ii) of a public international organization;
	 	 	 	 	 
	“Omnibus Agreement”	the agreement
      termed as such and comprised of this Agreement and
      the Security Documents;
	 	 	 	 	 
	“Ortigas Store”	the PSMT
      store located on property leased by PSPH located at Ortigas Avenue Ext.
      Bgy. Sta. Rosario, Pasig City, the Philippines, and covered under TCT No.
      PT-115821, issued by the Registrar of Deeds of Pasig City in the name of
      Constress Philippines, Inc.;
	 	 	 	 	 
	“Parallel Lender(s)”	Metro
      Bank and other local banks satisfactory to IFC;
	 	 	 	 	 
	“Parallel Loan(s)”	 the loan(s)
      specified in the Parallel Loan Agreement(s), or, as the context requires,
      the relevant principal amounts form time to time outstanding; 
	 	 	 	 	 
	“Parallel Loan
      Agreement(s)”	the loan
      agreement(s) entered or to be entered into between (each of) the Parallel
      Lender(s) and the Co-Borrowers providing for the Parallel Loan(s);
	 	 	 	 	 
	“Peso”
      or “Php”	the lawful
      currency of the Philippines;
	 	 	 	 	 
	“Person”	any natural
      person, corporation, company, partnership, firm, voluntary association,
      joint venture, trust, unincorporated organization, Authority or any other
      entity whether acting in an individual, fiduciary or other capacity;
	 	 	 	 	 
	“Philippines”	The Republic
      of the Philippines;

 

	9
	 	 	 	 	 
	 	 	 	 	 
	“Potential Event
      of Default”	any event
      or circumstance which would, with notice, lapse of time, the making of a
      determination or any combination thereof, become an Event of Default;
	 	 	 	 	 
	 “Preferred
      Shares”	 those
      shares described as “8% Series A Cumulative Convertible Redeemable
      Series A Preferred Stock” in (i) the Series A Preferred Stock and Warrant
      Purchase Agreement dated January 15, 2002, between PSMT and Grupo Gigante,
      S.A. de C.V., and (ii) the Series A Preferred Stock and Warrant Purchase
      Agreement dated April 11, 2002 between PSMT and IFC;
	 	 	 	 	 
	 “Prohibited
      Payments”	any offer,
      gift, payment, promise to pay or authorization of the payment of any money
      or anything of value, directly or indirectly, to or for the use or benefit
      of any Official (including to or for the use or benefit of any other Person
      if either of the Co-Borrowers knows, or has reasonable grounds for believing,
      that the other Person would use such offer, gift, payment, promise or authorization
      of payment for the benefit of any such Official), for the purpose of influencing
      any act or decision or omission of any Official in order to obtain, retain
      or direct business to, or to secure any improper benefit or advantage for,
      either of the Co-Borrowers, any of their Affiliates or any other Person;
      provided that any such offer, gift, payment, promise or authorization of
      payment shall not be considered a Prohibited Payment if, in IFC’s
      reasonable opinion, it (i) is lawful under applicable written laws and regulations,
      or (ii) is made for the purpose of expediting or securing the performance
      of a routine governmental action (as such term is construed under applicable
      law);
	 	 	 	 	 
	“Project”	the project
      described in Section 2.01 (The Project);
	 	 	 	 	 
	“PSMT Jamaica”	PriceSmart
      Jamaica Limited, a private company incorporated as such under the laws of
      Jamaica;
	 	 	 	 	 
	“Pledge Agreement”	the pledge
      agreement dated on or about the date pursuant to which PSMT pledges in favour
      of IFC its entire shareholding in PSPH as security for the Loan;
	 	 	 	 	 
	“Share
        Retention Agreement”
	the Share
      Retention Agreement dated January 26, 2001 and entered into, amongst others,
      PSMT and IFC;
	 	 	 	 	 
	“Security Documents”	the documents
      providing for the IFC Security consisting of:
	 	 	 	 	 
	 	(i)	a first
      ranking mortgage over the immovable assets (including leasehold rights relating
      thereto) and equipment (and insurances thereon) of PSPH in the Ortigas Store
      and the Alabang Store;

 

	10
	 	 	 	 	 
	 	 	 	 	 
	 	 (ii)	a first
      ranking chattel mortgage over the movable assets of PSPH (and insurances
      thereon) in the Ortigas Store and the Alabang Store;
	 	 	 	 	 
	 	(iii)	a first
      ranking security interest over the Escrow Account; and
	 	 	 	 	 
	 	(iv)	the Pledge
      Agreement;
	 	 	 	 	 
	“Spread per
      annum”	three
      and one half per cent (3.5%);
	 	 	 	 	 
	“Subsidiary”	with respect
      to any Person, any entity:
	 	 	 	 	 
	 	(i)	of whose
      capital at least fifty per cent. (50%) is owned, directly or indirectly,
      by that Person;
	 	 	 	 	 
	 	 (ii)	for which
      that Person may nominate or appoint a majority of the members of the board
      of directors or such other body performing similar functions; or
	 	 	 	 	 
	 	(iii)	which
      is otherwise effectively controlled by that Person;  
	 	 	 	 	 
	“Taxes”	any present
      or future taxes, withholding obligations, duties and other charges of whatever
      nature levied by any Authority;
	 	 	 	 	 
	

      “Transaction Documents”	(i)	the Omnibus
      Agreement;
	 	 	 	 	 
	 	(ii)	the Common
      Stock Purchase Agreement;
	 	 	 	 	 
	 	   
      (iii)	the Amended
      Share Retention Agreement;
	 	 	 	 	 
	 	(iv)	the Amended
      Escrow Account Agreement; and
	 	 	 	 	 
	 	(v)	the Environmental
      Side Letter;  
	 	 	 	 	 
	 “World
      Bank”	the International
      Bank for Reconstruction and Development, an international organization established
      by Articles of Agreement among its member countries.
	 	 	 	 	 
	       Section
      1.02. Financial Definitions. (a) Wherever used in this Agreement,
      unless the context otherwise requires, the following terms have the meanings
      opposite them:
	 	 	 	 	 
	“Back-to-Back
      Loans”	bank loans
      or other advances from PSMT or its Subsidiaries to its wholly-owned subsidiaries
      that are collateralized by cash or cash-equivalent deposits of PSMT or its
      Subsidiaries;
	 	 	 	 	 
	“Cash Generation”	for any
      period, the aggregate of: 
	 	 	 	 	 
	 	(i)	Consolidated
      Net Income after deduction of taxes, workers and employees’ participation
      in profits, and provisions for losses during the relevant period; plus
	 	 	 	 	 
	 	(ii)	depreciation
      and amortization for the relevant period; plus/minus
	 	 	 	 	 
	 	(iii)	net working
      capital applications; minus
	 	 	 	 	 
	 	 (iv)	any foreign
      exchange gain or loss or any other non-cash items included in such net income
      after tax; plus

 

	11
	 	 	 	 	 
	 	 	 	 	 
	 	(v)	any deferred
      taxes or other non-cash changes or provisions charged against Net Income;
      plus
	 	 	 	 	 
	 	(vi)	to the
      extent that the PSMT charges all pre-opening expenses in the year in which
      such expenses are incurred, expenses related to the pre-opening of particular
      deep-discount membership warehouses, owned and operated by either Co-Borrower;
	 	 	 	 	 
	“Consolidated”
      or  “Consolidated
      Basis”	(with
      respect to any financial statements to be provided, or any financial calculation
      to be made, under or for the purposes of  this
      Agreement and any other Transaction Document) the method referred to in
      Section 1.03(d) (Financial Calculations); and the entities whose
      accounts are to be consolidated with the accounts of
      the PSMT including all of its Subsidiaries;
	 	 	 	 	 
	“Current Assets”	as of
      the relevant date of calculation, Consolidated cash (including cash in the
      Escrow Account), marketable securities, trade and other receivables realizable
      within one year, prepaid expenses which are to be charged to income within
      one year, but excluding funds from any disbursement of the Loan and other
      Project loans temporarily on hand pending application to the Project;
	 	 	 	 	 
	 “Current
      Liabilities”	as of
      the relevant date of calculation, Consolidated liabilities falling due on
      demand or within one year (including the portion of Long-term Debt falling
      due within one year), but excluding liabilities for the Project to the extent
      they are to be paid off with the proceeds of the Loan and any other Project
      loans that were excluded from the calculation of Current Assets;
	 	 	 	 	 
	“Current Ratio”	the result
      obtained by dividing Current Assets by Current Liabilities;
	 	 	 	 	 
	 “Debt”	 the aggregate
      of all obligations (whether actual or contingent) but (excluding Back-to-Back
      Loans) of the Co-Borrowers to pay or repay money (other than that constituting
      trade liabilities incurred in the ordinary course of business and payable
      in accordance with customary practices, operating lease obligations and
      other items commonly considered current payables under Accounting Principles)
      including, without limitation:
	 	 	 	 	 
	 	(i)	all Indebtedness
      for Borrowed Money; 
	 	 	 	 	 
	 	(ii)	the aggregate
      amount then outstanding of all liabilities of any party to the extent the
      Co-Borrowers guarantees them or otherwise directly or indirectly obligates
      itself to pay them;
	 	 	 	 	 
	 	 (iii)	all liabilities
      of the Co-Borrowers (actual or contingent) under any conditional sale or
      a transfer with recourse or obligation to repurchase, including, without
      limitation, by way of discount or factoring of book debts or receivables;
      and 
	 	 	 	 	 
	 	(iv)	all liabilities
      of the Co-Borrowers (actual or contingent) under their respective Charters,
      any resolution of its shareholders, or any agreement or other document binding
      on the Co-Borrowers to redeem any of its shares

 

	12
	 	 	 	 	 
	 	 	 	 	 
	 	(v) 	all Capital
      Lease Obligations of the Co-Borrowers; 
	 	 	 	 	 
	 “Debt
        to Equity Ratio”
	the result
      obtained by dividing Debt by Shareholders’ Equity;
	 	 	 	 	 
	“Indebtedness
      for Borrowed
      Money ”	all obligations
      (excluding Back-to-Back Loans) of the Co-Borrowers to repay money (other
      than that constituting trade liabilities incurred in the ordinary course
      of business and payable in accordance with customary practices, operating
      lease obligations and other items commonly considered current payables under
      Accounting Principles) including, without limitation, with respect to:
	 	 	 	 	 
	 	(i)	borrowed
      money;
	 	 	 	 	 
	 	 (ii)	 the outstanding
      principal amount of any bonds, debentures, notes, loan stock, commercial
      paper, acceptance credits, bills or promissory notes drawn, accepted, endorsed
      or issued by the Co-Borrowers;
	 	 	 	 	 
	 	(iii)	any credit
      to the Co-Borrowers from a supplier of goods or services under any installment
      purchase or other similar arrangement with respect to goods or services
      (except trade accounts that are payable in the ordinary course of business
      and included in Current Liabilities);
	 	 	 	 	 
	 	 (iv)	 non-contingent
      obligations of the Co-Borrowers to reimburse any other Person with respect
      to amounts paid by that Person under a letter of credit or similar instrument
      (excluding any letter of credit or similar instrument issued for the benefit
      of the Co-Borrowers with respect to trade accounts that are payable in the
      ordinary course of business and included in Current Liabilities);
	 	 	 	 	 
	 	(v)	amounts
      raised under any other transaction having the financial effect of a borrowing
      and which would be classified as a borrowing (and not as an off-balance
      sheet financing) under the Accounting Principles including, without limitation,
      under leases or similar arrangements entered into primarily as a means of
      financing the acquisition of the asset leased;
	 	 	 	 	 
	 	(vi)	the amount
      of the Co-Borrowers’ obligations pursuant to Derivative Transactions
      entered into in connection with other Debt of the Co-Borrowers, provided
      that for the avoidance of double counting and for so long as any such Derivative
      Transaction is in effect, that Debt will be included in Indebtedness for
      Borrowed Money pursuant to the terms of the relevant Derivative Transaction
      and not the terms of the agreement providing for that Debt when it was incurred;
      and 
	 	 	 	 	 
	 	(vii)	any premium
      payable on a mandatory redemption or replacement of any of the foregoing
      obligations;
	 	 	 	 	 
	“Interest Expense”	as of
      the relevant date of calculation, all interest (excluding interest on Back-to-Back
      Loans) and charges paid or payable by the Co-

 

	13
	 	 	 	 	 
	 	 	 	 	 
	 	Borrowers,
      on the aggregate Indebtedness for Borrowed Money during the period immediately
      preceding the date of calculation;
	 	 	 	 	 
	“Long-term Debt”	that part
      of the Debt or Consolidated Indebtedness for Borrowed Money (excluding Back-to-Back
      Loans) the final maturity of which, by its terms or the terms of any agreement
      relating to it, falls due more than one year after the date of its incurrence;
	 	 	 	 	 
	“Long-term Debt
      Service

      Coverage Ratio”	the ratio
      obtained by dividing:
	 	 	 	 	 
	 	(i)	the sum
      of the Cash Generation for the Financial Year preceding the date of calculation;
	 	 	 	 	 
	 	 	by
	 	 	 	 	 
	 	(ii)	the Long-term
      Debt Service Payments (principal and interest) due for payment in the Financial
      Year having the highest scheduled total annual Consolidated Long-term Debt
      principal payments by the Co-Borrowers during the life of the Loan;
	 	 	 	 	 
	“Long-term Debt
       Service
      Payments”	as of
      the relevant date for calculation, for the Co-Borrowers, the aggregate of:
	 	 	 	 	 
	 	(i)	the amount
      of the payments of principal of all Long-term Debt (in accordance with the
      respective terms thereof) during the period for which the calculation is
      being made; and
	 	 	 	 	 
	 	(ii)	the Interest
      Expense for such period;
	 	 	 	 	 
	“Long-term Debt

      to Equity Ratio”	the result
      obtained by dividing Long-term Debt by Shareholders’ Equity;
	 	 	 	 	 
	 “Net Fixed
      Assets”	the aggregate
      amount of assets which at any time would be reflected as Net Fixed Assets
      of the Co-Borrowers (taken as a whole)
      on the balance sheet of the Co-Borrowers prepared in accordance with Accounting
      Principles;
	 	 	 	 	 
	  “Net
      Income” 	as of
      the relevant date for calculation, the difference between revenues generated
      through the sale of goods delivered and services rendered, and the costs
      incurred in the process of production and delivery of those goods and services,
      during any Financial Year. (At IFC’s sole discretion, extraordinary
      items, like goodwill and others, will be excluded from the above calculation,
      and reasonable expense provisioning for doubtful collection of receivables
      and inventory obsolescence will be included
      in the above calculation.);

 

	14
	 	 	 	 	 
	 	 	 	 	 
	 “Net Working
      Capital”	the amount
      by which Current Assets exceed Current Liabilities, but for this purpose
      excluding from the Current Liabilities the portion
      of Long-term Debt falling due within one year of the relevant date for calculation;
	 	 	 	 	 
	“Non-Cash Items”	for any
      period, the net aggregate amount (which may be a positive or negative number)
      of all non-cash expenses and non-cash credits which have been subtracted
      or, as the case may be, added in calculating net income during that period,
      including, without limitation, depreciation, amortization, deferred taxes,
      provisions for severance pay of staff and workers, and credits resulting
      from revaluation of the assets’ book value;
	 	 	 	 	 
	“Shareholders’
      Equity”	the aggregate
      of:
	 	 	 	 	 
	 	(i)	the amount
      paid up or credited as paid up on the share capital of the Co-Borrowers;
      and
	 	 	 	 	 
	 	 (ii)	the amount
      standing to the credit of the reserves of the Co-Borrowers (including, without
      limitation, any share premium account, capital redemption reserve funds
      and any credit balance on the accumulated profit and loss account);
	 	 	 	 	 
	 	after
      deducting from that aggregate (A) any debit balance on the profit and loss
      account or impairment of the issued share capital of the Co-Borrowers (except
      to the extent that deduction with respect to that debit balance or impairment
      has already been made), (B) amounts set aside for dividends or taxation
      (including deferred taxation), and (C) amounts attributable to capitalized
      items such as goodwill, trademarks, deferred charges, licenses, patents
      and other intangible assets; and
	 	 	 	 	 
	 “Short-term
      Debt”	 all Consolidated
      Indebtedness for Borrowed Money (as of the relevant date of calculation)
      other than Consolidated Long-term Debt.
	 	 	 	 	 

       Section
  1.03. Financial Calculations. (a) All financial calculations to be
  made under, or for the purposes of, this Agreement and any other Transaction
  Document shall be determined in accordance with the Accounting Principles and,
  except as otherwise required to conform to any provision of this Agreement,
  shall be calculated from the then most recently issued quarterly financial statements
  which the Co-Borrowers are obligated to furnish to IFC under Section 6.03(a)
  (Reporting Requirements).

       (b)       Where
  quarterly financial statements are used for the purpose of making certain financial
  calculations and those statements are with respect to the last quarter of a
  Financial Year then, at IFC’s option, those calculations may instead be
  made from the audited financial statements for the relevant Financial Year.

       (c)       If
  any material adverse change in the financial condition of either Co-Borrowers
  has occurred after the end of the period covered by the financial statements
  used to make the relevant financial calculations, that material adverse change
  shall also be taken into account in calculating the relevant figures.

       (d)       If
  a financial calculation is to be made under or for the purposes of this Agreement
  or any other Transaction Document on a Consolidated Basis, that calculation
  shall be made by
  reference to the sum of all amounts of similar nature reported in the relevant
  financial 

15

 

statements
  of each of the entities whose accounts are to be consolidated with the accounts
  of the Co-Borrowers plus
  or minus the consolidation adjustments customarily applied to avoid double counting
  of transactions among any of those entities, including the Co-Borrowers.

       Section
  1.04. Interpretation. In this Agreement, unless the context otherwise
  requires: 

       (a)       headings
  are for convenience only and do not affect the interpretation of this Agreement;

        (b)       words
  importing the singular include the plural and vice versa; 

       (c)       a
  reference to an Annex, Article, party, Schedule or Section is a reference to
  that Article or Section of, or that Annex, party or Schedule to, this Agreement;
  

       (d)       a
  reference to a document includes an amendment or supplement to, or replacement
  or novation of, that document but disregarding any amendment, supplement, replacement
  or novation made in breach of this Agreement;

       (e)       a
reference to a party to any document includes that party’s successors and
permitted assigns; and 
       (f)       any
  references in this Agreement to this Agreement or to any other agreement or
  document shall be construed as a reference to this Agreement or such other agreement
  or document including all schedules, annexes or exhibits thereto.        

       Section
  1.05. Business Day Adjustment. When the day on or by which a payment
  is due to be made is not a Business Day, that payment shall be made on or by
  the next succeeding Business Day. Interest, fees and charges (if any) shall
  continue to accrue for the period from the due date that is not a Business Day
  to that next succeeding Business Day.

ARTICLE
  II

  

  The Project, Project Cost and Financial Plan

     Section
  2.01. The Project. The project to be financed consists of the construction,
  equipping and placing into operation and the provision of working capital for
  five (5) deep discount membership-shopping warehouses to be located in Metro
  Manila, the Philippines as further described in the letter of information dated
  14 February 2002 provided to IFC by the Co-Borrowers.

     Section
  2.02. Project Cost and Financial Plan. (a) The total estimated cost
  of the Project, including an increase of not less than the equivalent of seven
  million five hundred thousand Dollars ($7,500,000) for working capital, is the
  equivalent of forty eight million two hundred thousand Dollars ($48,200,000),
  as follows:

			
	

	Project
      Cost	 US$
      Millions 	 	%  
	

	Building
      and construction	     	25.2	   	      	   	52	   
	 	 	 	 	 	 	 	 
	Furniture,
      fixtures and equipment	 	12.0	 	 	 	25	 
	 	 	 	 	 	 	 	 
	Pre-opening
      expenses	 	3.5	 	 	 	7	 
	 	 	 	 	 	 	 	 
	Working
      capital	 	7.5	 	 	 	16	 
	 	 	
	 	 	 	
	 
	Total
      Project Cost	 	48.2	 	 	 	100.0	 
	

16

 

 (b) The proposed sources
of financing for the Project are as follows:
			
	 	 		 	 	 		 
	

	
        
          Financial
            Plan

        

      
	US$
      Millions	 	%
	 

	DEBT	 	 	 	 	 	 	 
	IFC Loan	   	12.5	   	      	   	26	   
	Parallel
      Lenders	 	11.5	 	 	 	24	 
	 

	EQUITY
	PSMT	 	12.6	 	 	 	26	 
	E-Class
      Corporation	 	9.2	 	 	 	19	 
	First
      Metro Investment Corporation	 	2.4	 	 	 	5	 
	Total
      Financing	 	48.2	 	 	 	100.0	 
	 

	 

ARTICLE
  III

The
  Loan

       Section
  3.01. The Loan. Subject to the provisions of this Agreement,
  IFC agrees to lend, and the Co-Borrowers agree to jointly and severally borrow,
  the Loan being twelve million five hundred thousand Dollars ($12,500,000).

       Section
  3.02. Disbursement Procedure. (a) The Co-Borrowers shall request
  Disbursements by delivering to IFC, at least ten (10) Business Days prior to
  the proposed date of the Disbursement, a Disbursement request substantially
  in the form of Schedule 2 (Form of Request for Disbursement) and a
  receipt substantially in the form of Schedule 3 (Form of Loan Disbursement
  Receipt).

       (b)       Each
  Disbursement shall be made by IFC at a bank in New York, New York for further
  credit to PSPH’s accounts at a bank in the Philippines, or, in IFC’s
  sole discretion, directly to PSPH’s account at a bank in the Philippines,
  or at any other place acceptable to IFC, all as specified by the Co-Borrowers
  in the relevant Disbursement request.

       (c)       Each
  Disbursement (other than the last one) shall be made in an amount of not less
  than one million Dollars ($1,000,000).

Section 3.03. Interest.
Subject to the provisions of Section 3.04 (Default Rate Interest), the
Co-Borrowers shall pay interest on the Loan in accordance with this Section 3.03:

       (a)       Interest
  on any Disbursement or, as the case may be, the Loan shall accrue from day to
  day, be pro-rated on the basis of a 360-day year for the actual number of days
  in the relevant Interest Period and be payable in arrears on the Interest Payment
  Date immediately following the end of that Interest Period; provided that with
  respect to any Disbursement made less than fifteen (15) days before an Interest
  Payment Date, interest on that Disbursement shall be payable commencing on the
  second Interest Payment Date following the date of that Disbursement.

17

 

       (b)       Up
  to the Loan Consolidation Date, the Co-Borrowers shall pay interest on the amount
  of each Disbursement outstanding from time to time at the Disbursement Interest
  Rate applicable to that Disbursement.

       (c)       For
  the purpose of determining the Disbursement Interest Rate applicable to each
  Disbursement, IFC shall, on the relevant Interest Rate Setting Date, determine
  the Base Fixed Rate for that Disbursement using
  the methodology set out in Annex C (Methodology), add the Spread and
  promptly notify the Co-Borrowers of the Disbursement Interest Rate applicable
  to that Disbursement.

       (d)       For
  each Disbursement, the Co-Borrowers shall specify the date on which to determine
  the applicable Base Fixed Rate, which date shall be two (2) Business Days before
  the proposed date of such Disbursement. In the event the conditions of disbursement
  relevant to that Disbursement have not been fulfilled to IFC’s satisfaction
  or have been waived by IFC by the rate-setting date specified in the relevant
  request for Disbursement, then, after the relevant conditions of disbursement
  have been fulfilled to IFC’s satisfaction or have been waived by IFC, the
  Co-Borrowers shall specify a new date on which to determine the Base Fixed Rate,
  which shall be two (2) Business Days before the new proposed date of the requested
  Disbursement.

       (e)       The
  Co-Borrowers may at any time in connection with any proposed Disbursement (but
  not more than once in any calendar month) request from IFC an indication of
  what the Disbursement Interest
  Rate would be for such a Disbursement as of the date of that request. As promptly
  as practicable after that request, IFC shall advise the Co-Borrowers of the
  indicative Disbursement Interest
  Rate.

       (f)       Beginning
on the Loan Consolidation Date, the Co-Borrowers shall pay interest at the Loan
Interest Rate on the full amount of the Loan outstanding from time to time. The
“Loan Interest Rate” shall be the rate calculated by IFC equal to the
weighted average of the Loan Disbursement Interest Rates, the weighting being
based on the principal amount of each Disbursement 
in relation to the entire principal amount of the Loan and the average being rounded
up to the nearest two decimal places. IFC shall determine the Loan Interest Rate
not less than two (2) Business
Days before the Loan Consolidation Date and promptly notify the Co-Borrowers of
that rate.
       (g)       The
  determination by IFC of each Disbursement Interest Rate or the Loan Interest
  Rate, as the case may be, shall be final and conclusive and shall bind the Co-Borrowers
  (unless the Co-Borrowers
  can show to IFC’s satisfaction that the determination involves manifest
  error).

       Section
  3.04. Default Rate Interest. (a) Without limiting the remedies
  available to IFC under this Agreement or otherwise (and to the maximum extent
  permitted by applicable law), if the Co-Borrowers fail to make any payment of
  principal or interest (including interest payable pursuant to this Section)
  or any other payment provided for in Section 3.07 (Fees) when due as
  specified in this Agreement (whether at stated maturity or upon acceleration),
  the Co-Borrowers shall pay interest on the amount of that payment due and unpaid
  at the rate which shall be the sum of two per cent. (2%) per annum and the Loan
  Interest Rate on or after the Loan Consolidation Date.

       (b)       If
  a payment default referenced in Section 3.04(a) occurs prior to the Loan Consolidation
  Date, then the Co-Borrowers shall pay interest on (i) any unpaid amount of principal
  or interest (including interest payable pursuant to this Section) relating to
  a particular Disbursement at the rate which shall be sum of two per cent. (2%)
  per annum and the corresponding Disbursement Interest Rate; and (ii) on any
  other unpaid amount at the rate which shall be sum of two per cent. (2%) per
  annum and the Disbursement Interest Rate applicable to the first Disbursement.

18

 

       (c)       Interest
  at the rate referred to in Section 3.04(a) shall accrue from the date on which
  payment of the relevant overdue amount became due until the date of actual payment
  of that amount (as well after as before judgment), and shall be payable on demand
  or, if not demanded, on each Interest Payment Date falling after any such overdue
  amount became due.

       Section
  3.05. Repayment. (a) The Co-Borrowers shall repay the Loan on
  the following dates and in the following amounts: 

		
	 	 	 
	
        Date Payment
          Due

      
	Principal
      Amount Due ($)
	

	June
      15, 2005	833,333.00	 
	 

	December
      15, 2005	833,333.00	 
	 

	June
      15, 2006	833,333.00	 
	 

	December
      15, 2006	833,333.00	 
	 

	June
      15, 2007	833,333.00	 
	 

	December
      15, 2007	833,333.00	 
	 

	June
      15, 2008	833,333.00	 
	 

	December
      15, 2008	833,333.00	 
	 

	June
      15, 2009	833,333.00	 
	 

	December
      15, 2009	833,333.00	 
	 

	June
      15, 2010	833,333.00	 
	 

	December
      15, 2010	833,333.00	 
	 

	June
      15, 2011	833,333.00	 
	 

	December
      15, 2011	833,333.00	 
	 

	June
      15, 2012	333,338.00	 
	 

	 

       (b)       The
  dates for repayment of principal of the Loan are intended to coincide with Interest
  Payment Dates.

       (c)       Upon
  each Disbursement, the amount disbursed shall be allocated for repayment on
  each of the respective dates for repayment of principal set out in the table
  in Section 3.05(a) in amounts which are pro rata to the amounts of the
  respective installments shown opposite those dates in those tables (with IFC
  adjusting these allocations as necessary so as to achieve whole numbers in each
  case).

       Section
3.06. Prepayment. Subject to Section 3.10(b) (Increased Costs),
Section 3.14 (Taxes), Section 3.15 (Expenses), Section 6.01(Affirmative
Covenants) and Section 6.04(c) (Insurance): 
       (a)       the
  Co-Borrowers may prepay on any Interest Payment Date all or any part of the
  Loan, on not less than thirty (30) days’ and not more than sixty (60) days’
  prior notice to IFC, but only if:

19

 

	 	(i)	the Co-Borrowers
      simultaneously pay:
	 	 	 	 	 
	 	 	(A)	the prepayment
      premium specified in Section 3.06(b); and 
	 	 	 	 	 
	 	 	(B)	all accrued
      interest and Increased Costs (if any) on the amount of the Loan to be prepaid,
      together with all other amounts then due and payable under this Agreement,
      including the amount payable under Section 3.11 (Unwinding Costs),
      if the prepayment is not made on an Interest Payment Date;
	 	 	 	 	 
	 	(ii)	for a
      partial prepayment, that prepayment is in an amount not less than one million
      Dollars ($1,000,000); and
	 	 	 	 	 
	 	(iii)	if requested
      by IFC, the Co-Borrowers have delivered to IFC, prior to the date of prepayment,
      evidence satisfactory to IFC that all necessary Authorizations with respect
      to the prepayment have been obtained.
	 	 	 	 	 

       (b)       On
  the date of any prepayment of the Loan in accordance with Section 3.06(a),
  the Co-Borrowers shall pay a prepayment premium consisting of an amount in Dollars
  equal to, at the Co-Borrowers’ option, either: (i) one and one-half per
  cent (11⁄2%) of the prepaid amount multiplied by the number of years from
  the prepayment date to the scheduled final maturity date of the Loan; or (ii)
  IFC’s redeployment cost as determined by IFC in accordance with the methodology
  set out in Section (B) of Annex C (Methodology). The determination
  by IFC of the prepayment premium shall be final and conclusive and bind the
  Co-Borrowers (unless the Co-Borrowers show, to the satisfaction of IFC, that
  such determination involved manifest error).

       (c)       Amounts
  of principal prepaid under this Section shall be applied by IFC to all the respective
  outstanding installments of principal of the Loan on a pro-rata basis.

       (d)       Upon
  delivery of a notice in accordance with Section 3.06(a), the Co-Borrowers shall
  make the prepayment in accordance with the terms of that notice.

       (e)       Any
  principal amount of the Loan prepaid under this Agreement may not be re-borrowed.
  

       Section
  3.07. Fees. (a) The Co-Borrowers shall pay to IFC a commitment
  fee at the rate of one-half of one per cent. (1⁄2%) per annum on that part
  of the Loan which from time to time has not been disbursed or canceled. The
  commitment fee shall:

	 	(i)	begin
      to accrue on the date of this Agreement;
	 	 	 	 	 
	 	(ii)	be pro
      rated on the basis of a 360-day year for the actual number of days elapsed;
      and  
	 	 	 	 	 
	 	(iii)	 be payable
      semi-annually, in arrears, on the Interest Payment Dates in each year, the
      first such payment to be due on June 15, 2005.

       (b)       The
  Co-Borrowers shall also pay to IFC a front-end fee on the Loan of one hundred
  eighty seven thousand five hundred Dollars ($187,500), to be paid upon the earlier
  of (x) the date which is thirty (30) days after the date of this Agreement and
  (y) the date immediately preceding the date of the first Disbursement;

       Section
  3.08. Currency and Place of Payments. (a) The Co-Borrowers shall
  make all payments of principal, interest, fees, and any other amount due to
  IFC under this Agreement in the Loan Currency, in same day funds, to the account
  of IFC at Citibank N.A., 111 Wall Street, New York, New York, U.S.A., ABA#021000089,
  for credit to IFC’s account number 36085579, or at such other bank or account
  in New York as IFC from time to time designates. Payments must be received in
  IFC’s designated account no later than 1:00 p.m. New York time.

20

 

       (b)       The
  tender or payment of any amount payable under this Agreement (whether or not
  by recovery under a judgment) in any currency other than the Loan Currency shall
  not novate, discharge or satisfy the obligation of the Co-Borrowers to pay in
  the Loan Currency all amounts payable under this Agreement except to the extent
  that (and as of the date when) IFC actually receives funds in the Loan Currency
  in the account specified in, or pursuant to, Section 3.08(a).

       (c)       The
  Co-Borrowers shall indemnify IFC against any losses resulting from a payment
  being received or an order or judgment being given under this Agreement in any
  currency other than the Loan Currency or any place other than the account specified
  in, or pursuant to, Section 3.08(a). The Co-Borrowers shall, as a separate obligation,
  pay such additional amount as is necessary to enable IFC to receive, after conversion
  to the Loan Currency at a market rate and transfer to that account, the full
  amount due to IFC under this Agreement in the Loan Currency and in the account
  specified in, or pursuant to, Section 3.08(a). 

       (d)       Notwithstanding
  the provisions of Section 3.08(a) and Section 3.08(b), IFC may require the Co-Borrowers
  to pay (or reimburse IFC) for any Taxes, fees, costs, expenses and other amounts
  payable under Section 3.14(a) (Taxes) and Section 3.15 (Expenses)
  in the currency in which they are payable, if other than the Loan Currency.

       Section
  3.09. Allocation of Partial Payments. If at any time IFC receives
  less than the full amount then due and payable to it under this Agreement, IFC
  may allocate and apply the amount received in any way or manner and for such
  purpose or purposes under this Agreement as IFC in its sole discretion determines,
  notwithstanding any instruction that the Co-Borrowers may give to the contrary.

       Section
  3.10. Increased Costs. (a) On each Interest Payment Date, the
  Co-Borrowers shall pay, in addition to interest, the amount which IFC from time
  to time notifies to the Co-Borrowers in an Increased Costs Certificate as being
  the aggregate Increased Costs of IFC accrued and unpaid prior to that Interest
  Payment Date.

       (b)       If
  the Co-Borrowers are required to pay any Increased Costs pursuant to sub-section
  (a) above, they may prepay, in whole but not in part, that part of the Loan
  with respect to which the Increased Costs are being incurred. Such prepayment
  shall be made in accordance with Section 3.06 (Prepayment) except that the provisions
  with respect to the minimum prepayment amount set forth in Section 3.06(a)(ii),
  the prepayment premium set forth in Section 3.06(b) and the allocation of the
  principal amount prepaid set forth in Section 3.06(c) shall not apply.

       Section
  3.11. Unwinding Costs. (a) If IFC incurs any cost, expense or loss
  as a result of the Co-Borrowers failing to borrow in accordance with a request
  for Disbursement made pursuant to Section 3.02 (Disbursement Procedure),
  or to prepay in accordance with a notice of prepayment then the Co-Borrowers
  shall immediately pay to IFC the amount which IFC from time to time notifies
  to the Co-Borrowers as being the amount of those costs, expenses and losses
  incurred.

       (b)       For
the purposes of this Section, “costs, expenses or losses” include any
premium, penalty or expense incurred to liquidate or obtain third party deposits
or borrowings in order to make, maintain or fund all or any part of the Loan.

       Section
  3.12. Suspension or Cancellation by IFC. (a) IFC may, by notice
  to the Co-Borrowers, suspend the right of the Co-Borrowers to Disbursements
  or cancel the undisbursed portion of the Loan in whole or in part:

	 	(i)	if
      the first Disbursement has not been made by September 30, 2002;

21

 

	 	(ii)	if the
      right of IFC to any subscription under the Common Stock Purchase Agreement
      is suspended or canceled pursuant to the provisions of the Common Stock
      Purchase Agreement;
	 	 	 	 	 
	 	 (iii)	if any
      Event of Default has occurred and is continuing or if the Event of Default
      specified in Section 7.02(g) (Events of Default) is, in the reasonable
      opinion of IFC, imminent;
	 	 	 	 	 
	 	(iv)	if any
      event or condition has occurred which has or can be reasonably expected
      to have a Material Adverse Effect; or
	 	 	 	 	 
	 	(v)	on or
      after August 31, 2004.

       (b)       Upon
  the giving of any such notice, the right of the Co-Borrowers to any further
  Disbursements shall be suspended or canceled, as the case may be. The exercise
  by IFC of its right of suspension shall not preclude IFC from exercising its
  right of cancellation, either for the same or any other reason specified in
  Section 3.12(a). Upon any cancellation the Co-Borrowers shall, subject to paragraph
  (d) of this Section 3.12, pay to IFC all fees and other amounts accrued (whether
  or not then due and payable) under this Agreement up to the date of that cancellation.
  A suspension shall not limit any other provision of this Agreement.

       (c)       Any
portion of the Loan that is canceled under this Section 3.12 may not be re-borrowed.

       (d)       In
  the case of partial cancellation of the Loan pursuant to paragraph (a) of this
  Section 3.12, or Section 3.13(a) (Cancellation by the Co-Borrowers),
  interest on the amount then outstanding of the Loan remains payable as provided
  in Section 3.03 (Interest).

       Section
  3.13. Cancellation by the Co-Borrowers. (a) The Co-Borrowers
  may, by notice to IFC, irrevocably request IFC to cancel the undisbursed portion
  of the Loan on the date specified in that notice (which shall be a date not
  earlier than thirty (30) days after the date of that notice).

       (b)       IFC
  shall, by notice to the Co-Borrowers, cancel the undisbursed portion of the
  Loan effective as of that specified date if, subject to Section 3.12(d):

	 	(i)	IFC has
      received all fees and other amounts accrued (whether or not then due and
      payable) under this Agreement up to such specified date; and
	 	 	 	 	 
	 	 (ii)	 if any
      amount of the Loan is then outstanding, IFC is reasonably satisfied that
      the Co-Borrowers has sufficient long-term funding available, on terms satisfactory
      to IFC, to cause the Project to proceed as scheduled.

       (c)       Any
  portion of the Loan that is canceled under this Section 3.13 may not be re-borrowed.
  

       Section
  3.14. Taxes. (a) The Co-Borrowers shall pay or cause to be paid
  all Taxes other than taxes, if any, payable on the overall income of IFC on
  or in connection with the payment of any and all amounts due under this Agreement
  that are now or in the future levied or imposed by any Authority of the Country
  or by any organization of which the Country is a member or any jurisdiction
  through or out of which a payment is made.

       (b)       All
  payments of principal, interest, fees and other amounts due under this Agreement
  shall be made without deduction for or on account of any Taxes.

       (c)       If
  the Co-Borrowers are prevented by operation of law or otherwise from making
  or causing to be made those payments without deduction, the principal or (as
  the case may be) interest, fees or other amounts due under this Agreement shall
  be increased to such amount as may be necessary so that IFC receives the full
  amount it would have received (taking into account any Taxes payable on amounts
  payable by the Co-Borrowers under this subsection) had those payments been made
  without that deduction.

22

 

       (d)       If
  Section 3.14(c) applies and IFC so requests, the Co-Borrowers shall deliver
  to IFC official tax receipts evidencing payment (or certified copies of them)
  within thirty (30) days of the date of that request.

       (e)       If
  the Co-Borrowers are required to gross up any Taxes pursuant to sub-section
  (a) above, they may prepay, in whole but not in part, that part of the Loan
  with respect to which the gross up obligations are being incurred. Such prepayment
  shall be made in accordance with Section 3.06 (Prepayment) except that
  the provisions with respect to the minimum prepayment amount set forth in Section
  3.06(a)(ii), the prepayment premium set forth in Section 3.06(b) and the allocation
  of the principal amount prepaid set forth in Section 3.06(c) shall not apply.

       Section
  3.15. Expenses. (a) The Co-Borrowers shall pay or, as the case
  may be, reimburse IFC or its assignees any amount paid by them on account of,
  all taxes (including stamp taxes), duties, fees or other charges payable on
  or in connection with the execution, issue, delivery, registration or notarization
  of the Transaction Documents and any other documents related to this Agreement
  or any other Transaction Document.

       (b)       The
  Co-Borrowers shall pay to IFC or as IFC may direct:

	 	(i)	the fees
      and expenses of IFC’s technical and market consultants incurred in
      connection with the investment by IFC provided for under this Agreement;
       
	 	 	 	 	 
	 	 (ii)	the fees
      and expenses of IFC’s counsel in the Philippines and elsewhere (as
      IFC shall notify the Co-Borrowers) incurred in connection with:
	 	 	 	 	 
	 	 	(A)	the preparation
      of the investment by IFC provided for under this Agreement and any other
      Transaction Document;
	 	 	 	 	 
	 	 	(B)	the preparation
      and/or review, execution and, where appropriate, translation and registration
      of the Transaction Documents and any other documents related to them;
	 	 	 	 	 
	 	 	(C)	the giving
      of any legal opinions required by IFC under this Agreement and any other
      Transaction Document;
	 	 	 	 	 
	 	 	(D)	the administration
      by IFC of the investment provided for in this Agreement or otherwise in
      connection with any amendment, supplement or modification to, or waiver
      under, any of the Transaction Documents;
	 	 	 	 	 
	 	 	(E)	the registration
      (where appropriate) and the delivery of the evidences of indebtedness relating
      to the Loan and its disbursement; and 
	 	 	 	 	 
	 	 	(F)	the occurrence
      of any Event of Default or Potential Event of Default;
	 	 	 	 	 
	 	(iii)	in 2002
      and in each calendar year thereafter upon receipt of a statement from IFC,
      the amount of ten thousand Dollars ($10,000) on account of IFC’s expenses
      in carrying out its annual supervision review of the Co-Borrowers and the
      Project; and
	 	 	 	 	 
	 	(iv)	 the costs
      and expenses incurred by IFC in relation to efforts to enforce or protect
      its rights under any Transaction Document, or the exercise of its rights
      or powers consequent upon or arising out of the occurrence of any Event
      of Default or Potential Event of Default, including legal and other professional
      consultants’ fees on a full indemnity basis.

    
  

 
     
  

 
     
  

     
  

     

23

 

ARTICLE
  IV

Representations
  and Warranties

       Section
4.01. Representations and Warranties. Each Co-Borrower represents
and warrants for itself and for and on behalf of the other that: 
       (a)       in
  the case of PSMT, it is a company duly incorporated and validly existing under
  the laws of the State of Delaware, United States of America, and in the case
  of PSPH it is a company duly incorporated and validly existing under the laws
  of the Philippines, and each has the corporate power, and has obtained all required
  Authorizations, to own its assets, conduct its business as presently conducted
  and to enter into, and comply with its obligations under, the Transaction Documents
  to which it is a party;

       (b)       each
  Transaction Document to which the it is a party has been duly authorized and
  executed by it and constitutes its valid and legally binding obligation enforceable
  in accordance with its terms;

       (c)       neither
  the making of any Transaction Document to which it is a party nor (when all
  the Authorizations referred to in Section 5.01(e) (Conditions of Disbursement)
  have been obtained) the compliance with its terms will conflict with or result
  in a breach of any of the terms, conditions or provisions of, or constitute
  a default or require any consent under, any indenture, mortgage, agreement or
  other instrument or arrangement to which it is a party or by which it is bound,
  or violate any of the terms or provisions of the its Charter or any Authorization,
  judgment, decree or order or any statute, rule or regulation applicable to it;

       (d)       
to the best of the its knowledge, after due inquiry: 
	 	 	 	 	 
	 	 (i)	the Authorizations
      specified in Annex A (Co-Borrowers/Project Authorizations) are
      all the Authorizations (other than Authorizations that are of a routine
      nature and are obtained in the ordinary course of business) needed by PSPH
      to conduct its business, carry out the Project and execute, and comply with
      its obligations under, this Agreement and each of the other Transaction
      Documents to which it is a party;
	 	 	 	 	 
	 	(ii)	all Authorizations
      specified in Section (1) of Annex A (Co-Borrowers/Project Authorizations)
      have been obtained and are in full force and effect; and
	 	 	 	 	 
	 	(iii)	the Co-Borrowers
      have applied (or are making arrangements to apply) for all Authorizations
      specified in Section (2) of Annex A (Co-Borrowers/Project Authorizations),
      and have no reason to believe that they will not obtain those Authorizations
      in a timely manner;
	 	 	 	 	 

       (e)       PSMT’s
Charter has not been amended since August 29, 1997 and PSPH’s Charter has
not been amended since September 6, 2000; 
       (f)       neither
  Co-Borrower nor any of their respective property enjoys any right of immunity
  from set-off, suit or execution with respect to its assets or its obligations
  under any Transaction Document;

       (g)       PSMT
  owns fifty- two per cent. (52%) of the issued share capital of PSPH as at the
  date hereof; 

       (h)       since
  February 28, 2002, neither Co-Borrower:

	 	(i)	has suffered
      any change that has a Material Adverse Effect or incurred any substantial
      loss or liability;
	 	 	 	 	 
	 	(ii)	has undertaken
      or agreed to undertake any substantial obligation outside of the ordinary
      course of business;
	 	 	 	 	 

24

 

       (i)       the
  Consolidated financial statements of PSMT and unconsolidated financial statements
  of PSPH for the period ending on February 28, 2002:

	 	(i)	have been
      prepared in accordance with the Accounting Principles, and present fairly
      the financial condition of each Co-Borrower as of the date on which they
      were prepared and the results of each Co-Borrower’s operations during
      the period then ended;
	 	 	 	 	 
	 	(ii)	disclose
      all liabilities (contingent or otherwise) of the Co-Borrowers, and the reserves,
      if any, for such liabilities and all unrealized or anticipated liabilities
      and losses arising from commitments entered into by the Co-Borrowers (whether
      or not such commitments have been disclosed in such financial statements);
    
	 	 	 	 	 

       (j)       neither
Co-Borrower is a party to, or committed to enter into, any contract which would
or might affect the judgment of a prospective investor ; 
       (k)       there
  are no outstanding Liens on any of PSPH’s assets other than (i) Liens arising
  by operation of law, (ii) a mortgage in favour of Metrobank on the Fort Bonifacio
  Store, and (iii) Liens, if any, allowed under Section 6.02(g)(ii) (Negative
  Covenants), and no contracts or arrangements, conditional or unconditional,
  exist for the creation by PSPH (or PSMT as the case may be) of any other Lien
  except for the IFC Security;

       (l)       all
  tax returns and reports of the Co-Borrowers required by law to be filed have
  been duly filed and all Taxes, obligations, fees and other governmental charges
  upon the Co-Borrowers, or their properties, or their income or assets, which
  are due and payable or to be withheld, have been paid or withheld, other than
  those presently payable without penalty or interest;

       (m)       neither
  Co-Borrower is engaged in nor, to the best of its knowledge, after due inquiry,
  threatened by, any litigation, arbitration or administrative proceedings, the
  outcome of which could reasonably be expected to have a Material Adverse Effect
  other than the ongoing Nimfa Villegas Litigation;

       (n)       to
  the best of its knowledge and belief, after due inquiry, neither Co-Borrower
  is in violation of any statute or regulation of any Authority; 

       (o)       no
  judgment or order has been issued which has or may reasonably be expected to
  have a Material Adverse Effect; and

       (p)       except
  as identified in the ERS:

	 	(i)	to the best of its knowledge and belief, after
      due inquiry, neither Co-Borrower is in violation of any of the Environmental,
      Health and Safety Guidelines or of the Environmental and Social Policies;
      and
	 	 	 	 	 
	 	(ii)	neither
      Co-Borrower has received or is aware of any complaint, order, directive,
      claim, citation or notice from any Authority with respect to any matter
      of the Co-Borrowers’ compliance with the relevant environmental, health
      and safety laws and regulations in effect in the Philippines or with respect
      to any aspect of its compliance with any matter covered by the Environmental,
      Health and Safety Guidelines or the Environmental and Social Policies such
      as, without limitation, air emissions, discharges to surface water or ground
      water, noise emissions, solid or liquid waste disposal, or the use, generation,
      storage, transportation or disposal of toxic or hazardous substances or
      wastes;
	 	 	 	 	 

25

 

       (q)       neither
  Co-Borrower, nor any of its Affiliates, nor any Person acting on its or their
  behalf, has made, with respect to the Project or any transaction contemplated
  by this Agreement, any Prohibited Payment; and

       (r)       none
  of the representations and warranties in this Section 4.01 omits any matter
  the omission of which makes any of such representations and warranties misleading.

       Section
  4.02. IFC Reliance. Each of the Co-Borrowers acknowledges that
  it makes the representations and warranties in Section 4.01 (Representations
  and Warranties) with the intention of inducing IFC to enter into this Agreement
  and that IFC enters into this Agreement on the basis of, and in full reliance
  on, each of such representations and warranties.

ARTICLE
  V

Conditions
  of Disbursement

       Section
  5.01. Conditions of First Disbursement. The obligation of IFC
  to make the first Disbursement is subject to the fulfillment prior to or concurrently
  with the making of that first Disbursement of the following conditions:

       (a)       the
  following agreements, each in form and substance satisfactory to IFC, have been
  entered into by all parties to them and have become (or, as the case may be,
  remain) unconditional and fully effective in accordance with their respective
  terms (except for this Agreement having become unconditional and fully effective,
  if that is a condition of any of those agreements), and IFC has received a copy
  of each of those agreements to which it is not a party:

	 	(i)	each Transaction
      Document; and
	 	 	 	 	 
	 	(ii)	 the Parallel
      Loan Agreement(s).

       (b)       all
  contractual arrangements for implementation of the Project, at an aggregate
  cost not exceeding the estimated Project cost pursuant to Section 2.02 (Project
  Cost and Financial Plan) shall have been executed by the parties thereto;

       (c)       the
  Co-Borrowers have certified to IFC that each Co-Borrower is existing and in
  good standing and no amendment has been made to their respective Charter since
  August 29, 1997 with respect to PSMT and September 6, 2000 with respect to PSPH,
  or if any such amendment was made, IFC has received a copy of each such Co-Borrower’s
  amended Charter and determined, in its reasonable judgment, that it is not inconsistent
  with the provisions of any Transaction Document and does not have or may not
  reasonably be expected to have a Material Adverse Effect;

       (d)       the
  IFC Security has been duly created and perfected as first ranking security interests
  in all assets and rights which are the subject of the Security Documents;
   

       (e)       the
  Co-Borrowers have obtained, and provided to IFC copies of, all Authorizations
  listed in Section (1) and Section (2) of Annex A (Co-Borrowers/Project Authorizations),
  and such other Authorizations not listed in those Sections that may become necessary
  for:

	 	(i)	the Loan
      and the Parallel Loan(s);
	 	 	 	 	 
	 	(ii)	the business
      of the Co-Borrowers as it is contemplated to be carried on;
	 	 	 	 	 
	 	(iii)	the Project
      and the implementation of the Financial Plan;
	 	 	 	 	 
	 	(iv)	the due
      execution, delivery, validity and enforceability of, and performance by
      the Co-Borrowers of their obligations under, this Agreement and the other
      

26

 

	 	 	Transaction
      Documents and any other documents necessary or desirable to the implementation
      of any of those agreements or documents; and
	 	 	 	 	 
	 	(v)	 the remittance
      to IFC or its assigns in Dollars of all monies payable with respect to the
      Transaction Documents; 
	 	 	 	 	 

       and
  all those Authorizations are in full force and effect;

       (f)       
  IFC has received the following legal opinions:

	 	(i)	PSPH’s
      counsel in the Philippines, concurred in by IFC’s counsel in the Philippines
      on the matters set out in Schedule 5 Part I;
	 	 	 	 	 
	 	(ii)	PSMT’s
      counsel in California on the matters set out in Schedule 5 Part II; and
	 	 	 	 	 
	 	(iii)	IFC’s
      counsel in New York on the matters set out in Schedule 5 Part III;

       (g)       IFC
  has received a certification from the Auditors of PSPH confirming that, as at
  a date not earlier than sixty (60) days prior to the date of first Disbursement,
  PSPH is in compliance with the provisions of Section 6.01(c) (Affirmative
  Covenants) and containing a brief description of the systems and records
  in place;

       (i)       IFC
  has received copies of all insurance policies required to be obtained pursuant
  to Section 6.04 (Insurance) and Annex B (Insurance Requirements)
  prior to the date of first Disbursement, and a certification of the Co-Borrowers’
  insurers or insurance agents confirming that such policies are in full force
  and effect and all premiums then due and payable under those policies have been
  paid;

       (j)       IFC
has received the fees specified in Section 3.07 (Fees) required to be
paid before the date of the first Disbursement; 
       (k)       if
  IFC so requires, IFC has received the reimbursement of all invoiced fees and
  expenses of IFC’s counsel as provided in Section 3.15(b)(ii) (Expenses)
  or confirmation that those fees and expenses have been paid directly to that
  counsel;

       (l)       IFC
  has received a copy of the authorization to the Auditors referred to in Section
  6.01(e) (Affirmative Covenants) together with a confirmation from the
  Auditors that they shall provide IFC with all necessary original Financial Statements
  and other accounting information to be provided to IFC pursuant to the terms
  of this Agreement;

       (m)       IFC
has received a Certificate of Incumbency and Authority for each of the Co-Borrowers;

       (n)       each
  Co-Borrower has delivered to IFC evidence, substantially in the form of Schedule
  4 (Form of Service of Process Letter), of appointment of an agent for
  service of process pursuant to Section 8.03(d) (Applicable Law and Jurisdiction);

       (o)       the
Co-Borrowers and IFC have agreed on the form of the Annual Monitoring Report;

       (p)       there
  shall be been made arrangements satisfactory to IFC, in its sole discretion,
  for installing and implementing the accounting and cost control systems and
  management information systems and books of account and other records, which
  together is capable of generating information which adequately reflect truly
  and fairly the financial condition of each of the Co-Borrowers and the result
  of its respective operations in conformity with the Accounting Principles; and

       (q)       the
  Auditors have delivered to IFC a certification confirming that based on the
  Auditor’s valuation (performed on a cost basis), Co-Borrowers shall be
  in compliance with Section 6.01(j)(i) and (iii) after giving effect to the Disbursement.

27

 

       Section
  5.02. Conditions of All Disbursements. The obligation of IFC
  to make any Disbursement, including the first Disbursement, is also subject
  to the conditions that:

       
  (a)        no Event of Default and no Potential
  Event of Default has occurred and is continuing;  

       (b)       the
  proceeds of that Disbursement are, at the date of the relevant request, needed
  by the Co-Borrowers for the purposes of the Project, or will be needed for that
  purpose within six (6) months of that date;

       (c)       since
  the date of this Agreement nothing has occurred which has or can reasonably
  be expected to have a Material Adverse Effect including, but not limited to,
  any material adverse adjudication (as determined by IFC in its reasonable opinion)
  in relation to the Nimfa Villegas Litigation and that no new litigation shall
  have been commenced or be ongoing;

       (d)       since
  the date of this Agreement neither Co-Borrower has incurred any material loss
  or liability (except such liabilities as may be incurred in accordance with
  Section 6.02 (Negative Covenants));

       (e)       the
  representations and warranties made in Article IV (Representations and Warranties)
  are true and correct in all material respects on and as of the date of that
  Disbursement with the same effect as if those representations and warranties
  had been made on and as of the date of that Disbursement (but in the case of
  Section 4.01(c) (Representations and Warranties), without the words
  in parentheses);

       (f)       the
  proceeds of that Disbursement are not in reimbursement of, or to be used for,
  expenditures in the territories of any country which is not a member of the
  World Bank or for goods produced in or services supplied from any such country;

       (g)       IFC
  has received (if it so requires) a legal opinion or opinions in form and substance
  satisfactory to IFC, of IFC’s counsel in the Philippines, and concurred
  in by counsel for the Co-Borrowers, with respect to any matters relating to
  that Disbursement;

       (h)       after
  giving effect to that Disbursement, neither Co-Borrower would be in violation
  of: 

	 	(i)	 its Charter;
	 	 	 	 	 
	 	(ii)	any provision
      contained in any document to which such Co-Borrower is a party (including
      this Agreement) or by which such Co-Borrower is bound; or
	 	 	 	 	 
	 	(iii)	any law,
      rule, regulation, Authorization or agreement or other document binding on
      such Co-Borrower directly or indirectly limiting or otherwise restricting
      its borrowing power or authority or its ability to borrow;

       (i)       (without
  limiting the generality of Section 5.02(h)), after taking into account the amount
  of that Disbursement and any other Long-term Debt incurred by the Co-Borrowers
  and of any amounts of Shareholders’ Equity paid into the Co-Borrowers after
  the date of the latest financial statements of the Co-Borrowers due pursuant
  to Section 6.03(a) (Reporting Requirements), the Current Ratio would
  not be less than 1.2 and the Long-term Debt to Equity Ratio would not exceed
  50:50, provided that, with respect to any Disbursement requested to be made
  prior to the date of the first financial statements due pursuant to Section
  6.03(a) (Reporting Requirements), the calculation of the Current Ratio
  and Long-term Debt to Equity Ratio and Long-term Debt Service Coverage Ratio
  shall be made on the basis of such information as IFC may reasonably request,
  verified, if IFC so requires, by the Auditors;

       (j)       that
  Disbursement is made pro rata with the disbursement each of the Parallel Loans
  provided for in the Parallel Loan Agreements and any other senior loan forming
  part of the Financial Plan;

       (k)       no
material change shall have occurred to the Financial Plan; and 
       (l)       payment
  of all fees, costs and expenses payable to IFC pursuant to the terms of this
  Agreement shall have been paid to IFC (or to such other party as IFC may designation
  for these purposes).

28

 

       Section
  5.03. Co-Borrowers’ Certification. The Co-Borrowers shall
  deliver to IFC with respect to each request for Disbursement:

       (a)       certifications,
  in the form included in Schedule 2 (Form of Request for Disbursement),
  relating to the conditions specified in Section 5.02 (Conditions of All
  Disbursements) (other than the condition in Section 5.02(g)) expressed
  to be effective as of the date of that Disbursement, and in the case of Section
  5.02(d), also certified by the Auditors if IFC so requires; and

       (b)       such
  evidence as IFC may reasonably request of the proposed utilization of the proceeds
  of that Disbursement or the utilization of the proceeds of any prior Disbursement.

ARTICLE
  VI

Particular
  Covenants

       Section
  6.01. Affirmative Covenants. Unless IFC otherwise agrees, the
  Co-Borrowers shall:

        (a)       carry
  out the Project and conduct their business with due diligence and efficiency
  and in accordance with sound engineering, financial and business practices;

       (b)       cause
  the financing specified in the Financial Plan to be applied exclusively to the
  Project; 

       (c)       maintain
  an accounting and control system, management information system and books of
  account and other records, which together adequately reflect truly and fairly
  the financial condition of the Co-Borrowers and the results of their operations
  in conformity with the Accounting Principles;

       (d)       maintain
at all times a firm of independent public accountants acceptable to IFC as auditors
of the Co-Borrowers; 
       (e)       irrevocably
  authorize, in the form of Schedule 6 (Form of letter to Co-Borrowers’
  Auditors), the Auditors (whose fees and expenses shall be for the account
  of the Co-Borrowers) to communicate directly with IFC at any time regarding
  the Co-Borrowers’ accounts and operations, and provide to IFC a copy of
  that authorization, and, no later than thirty (30) days after any change in
  Auditors, issue a similar authorization to the new Auditors and provide a copy
  thereof to IFC;

       (f)       upon
  IFC’s request, such request to be made with reasonable prior notice to
  the Co-Borrowers, except if an Event of Default or Potential Event of Default
  is continuing or if special circumstances so require, permit representatives
  of IFC, during normal office hours, to:

	 	(i)	 visit
      the Project site and any of the premises where the business of the Co-Borrowers
      is conducted;
	 	 	 	 	 
	 	(ii)	inspect
      all facilities, plant and equipment comprised in the Project;
	 	 	 	 	 
	 	(iii)	 have
      access to the Co-Borrowers’ books of account and records; and
	 	 	 	 	 
	 	 (iv)	have access
      to those employees and agents of the Co-Borrowers who have or may have knowledge
      of matters with respect to which IFC seeks information;

       (g)      
  design, construct, operate, maintain and monitor all of its sites, plant, equipment
  and facilities:

	 	(i)	in
      accordance with the Environmental and Social Policies and the 
      Environmental, Health and Safety Guidelines; and

29

 

	 	 	 
	 	(ii)	 in compliance
      with the ERS, as well as applicable environmental, occupational health and
      safety requirements, and any child labor and forced labor laws, rules and
      regulations (including any international treaty obligations, if any) of
      the government of the Philippines and the local authorities;

       (h)       obtain
  and maintain in force (and where appropriate, renew in a timely manner) all
  Authorizations, including without limitation the Authorizations specified in
  Annex A (Co-Borrowers/Project Authorisations), which are necessary
  for the implementation of the Project, the carrying out of the Co-Borrowers’
  business and operations generally and the compliance by each of the Co-Borrowers
  with all its obligations under the Transaction Documents; and comply with all
  the conditions and restrictions contained in, or imposed on the Co-Borrowers
  by, those Authorizations;

       (i)       from
  time to time, execute, acknowledge and deliver or cause to be executed, acknowledged
  and delivered such further instruments, in form and substance satisfactory to
  IFC, as may reasonably be requested by IFC for creating, perfecting, registering
  or maintaining in full force and effect the IFC Security or for re-registering
  the IFC Security or otherwise to enable each of the Co-Borrowers to comply with
  its obligations under the Transaction Documents; and

       (j)       in
relation to the IFC Security: 
	 	 	 	 	 
	 	(i)	 ensure
      that the value of the collateral provided by the IFC Security (other than
      the Pledge Agreement) is at all times at least one point five (1.5) times
      the total amount then outstanding under the Loan;
	 	 	 	 	 
	 	(ii)	at its
      expense, provide IFC at the expiry of every consecutive one (1) year period
      from the date hereof and at such other times as IFC may require, an independent
      appraiser’s valuation of such collateral, such appraiser to be appointed
      by or to be satisfactory to IFC;
	 	 	 	 	 
	 	(iii)	 in the
      event that the appraiser appointed pursuant to (ii) above assigns a market
      value to the collateral provided by the IFC Security which is less than
      one point five (1.5) times the total amount then outstanding under the Loan,
      the Co-Borrowers shall have the option to either deliver additional security,
      in form and substance acceptable to IFC, thereby addressing this shortfall
      or shall within sixty (60) days (and no later than ninety (90) days), prepay
      in accordance with Section 3.06(a) (Prepayment) (but without any
      prepayment premium pursuant to Section 3.06(b) (Prepayment) being
      payable) an amount of the Loan so as to ensure the value of the collateral
      provided by the IFC Security represents at least one point five (1.5) times
      the total amount then outstanding under the Loan; and
	 	 	 	 	 
	 	 (iv)	from time
      to time, execute, acknowledge and deliver or cause to be executed, acknowledged
      and delivered such further instruments as may reasonably be requested by
      IFC for perfecting or maintaining in full force and effect the IFC Security
      or for re-registering the IFC Security or otherwise to enable the Co-Borrowers
      to comply with their obligations under the Transaction Documents.

       Section
  6.02. Negative Covenants. Unless IFC otherwise agrees, neither
  Co-Borrower shall directly or indirectly: 

       (a)       declare
  or pay any dividend or make any distribution on its share capital (other than
  dividends or distributions payable on the Preferred Shares), or purchase, redeem
  or otherwise acquire any shares or capital stock of the Co-Borrowers or any
  option over them unless the proposed payment or distribution is out of retained
  earnings and the Co-Borrower, no earlier than sixty (60) days nor later than
  thirty (30) days prior to doing so, certifies to IFC in writing, in the form
  attached as Schedule 7 (Form of Co-Borrowers’ Certification on Distribution
  of Dividends), that:

	 	(i)	no
      Event of Default or Potential Event of Default has occurred and is continuing;
      and

30

 

	 	(ii)	after
      giving effect to any such action:
	 	 	 	 	 
	 	 	(A)	the Current
      Ratio will not be less than 1.2;
	 	 	 	 	 
	 	 	(B)	the Long-term
      Debt to Equity Ratio will not be in excess of 50:50;
      and
	 	 	 	 	 
	 	 	(C)	the Long-term
      Debt Service Coverage Ratio will not be less than 1.3;
	 	 	 	 	 
	 	 	 	provided
      always that: 
	 	 	 	 	 
	 	 	 	(A) 	the retained earnings
      out of which any of the payments or distributions referred to in this sub-section
      may be made should in no event include any amount resulting from the revaluation
      of any of the Co-Borrowers’ assets; and
	 	 	 	 	 
	 	 	 	(B)	the Co-Borrowers shall
      not make any payments or distributions of the type referred to in this sub-section
      if, after giving effect to it, the Co-Borrowers could not certify the matters
      referred to in Section 6.02(a)(i) and (ii) (Negative Covenants);

       (b)       incur
  expenditures or commitments for expenditures for fixed or other non-current
  assets, other than those required for carrying out the Project or necessary
  for repairs, replacements and maintenance of satisfactory operating conditions
  that are essential to the Co-Borrowers’ business or operations, unless
  after giving effect to such expenditures or commitments for expenditures, the
  Co-Borrowers will be in compliance with the ratio set forth in Section 6.02(a)
  (Negative Covenants) above in the preceding Financial Year;

       (c)       
  incur, assume or permit to exist any Debt except: 

	 	(i)	the Loan;
	 	 	 	 	 
	 	(ii)	other
      Debt specified in the Financial Plan;  
	 	 	 	 	 
	 	 (iii)	additional
      Long-term Debt which would not result in the Long-term Debt to Equity Ratio
      exceeding 50:50 and the Long-term Debt Service Coverage Ratio exceeding
      1.3;
	 	 	 	 	 
	 	(iv)	Short-term
      Debt incurred in the ordinary course of business which, when aggregated
      with contingent liabilities arising from the discounting of trade receivables,
      would not result at the time it is incurred in the Current Ratio falling
      below 1.2; 
	 	 	 	 	 
	 	(v)	additional
      Debt of the Co-Borrowers, but only if and to the extent that such Debt is
      subordinated in full, in payment and liquidation, to the Loan; and 
	 	 	 	 	 
	 	(vi)	Long-term
      Debt or Short-term Debt obtained to replace any existing Long-term Debt
      or, as the case may be, any Short-term Debt component of then outstanding
      Debt, but then only to the extent that such new Debt is on terms and conditions
      (as to interest rate, other costs and tenor) at least as favorable to the
      Co-Borrowers as those of the Debt being replaced;

31

 

       (d)       enter
  into any Capital Lease Obligations, except Capital Lease Obligations with respect
  to which the aggregate capital lease payments of the Co-Borrowers do not exceed
  the equivalent of two million Dollars ($2,000,000) in any Financial Year (“Permitted
  Lease Amount”) and only to the extent that, when such Permitted Lease Amount
  is treated as Long-term Debt, the Co-Borrowers’ Long-term Debt to Equity
  Ratio would not be in excess of 50:50 and the Long-term Debt Service Coverage
  Ratio would not be less than 1.3;

       (e)       enter
  into any Derivative Transactions or assume the obligations of any party to any
  Derivative Transaction; provide however that the foregoing shall not apply to
  the following types of Derivative Transactions entered into by the Co-Borrowers
  so long as the currency and the amounts associated with such Derivative Transactions
  reasonably reflect the risk and/or exposure such Derivative Transactions are
  designed to hedge:

	 	(i)	 forward
      foreign exchange contracts (including non-deliverable forward foreign exchange
      contracts)
	 	 	 	 	 
	 	(ii)	currency
      swaps; and
	 	 	 	 	 
	 	(iii)	interest-rate
      swaps;

       (f)       enter
  into any agreement or arrangement to guarantee or, in any way or under any condition,
  assume or become obligated for all or any part of any financial or other obligation
  of another Person, except guarantees in the ordinary course of business in favor
  of its Subsidiaries so long as after any such guarantee the Co-Borrowers will
  be in compliance with the financial ratios set forth in Section 6.02(a);

       (g)       create
  or permit to exist any Lien on any property, revenues or other assets, present
  or future, of the Co-Borrowers, except for:

	 	(i)	 the IFC
      Security;  
	 	 	 	 	 
	 	(ii)	Liens
      securing other lenders in relation to the Project provided that, after giving
      effect to such lending,:
	 	 	 	 	 
	 	 	(A)	the Current
      Ratio will not be less than 1.2;
	 	 	 	 	 
	 	 	(B)	the Long-term
      Debt to Equity Ratio will not be in excess of 50:50;
      and
	 	 	 	 	 
	 	 	(C)	 the Long-term
      Debt Service Coverage Ratio will not be less than 1.3,
	 	 	 	 	 
	 	(iii)	 the security
      granted by PSMT under the LAC Loan Agreements; 
	 	 	 	 	 
	 	(iv)	the naming
      of IFC as loss payee/beneficiary under the Co-Borrowers’ insurance
      policies;
	 	 	 	 	 
	 	 (v)	any Lien
      arising from any tax, assessment or other governmental charge or other Lien
      arising by operation of law, in each case if the obligation underlying any
      such Lien is not yet due or, if due, is being contested in good faith by
      appropriate proceedings so long as:
	 	 	 	 	 
	 	 	(A)	those
      proceedings do not involve any substantial danger of the sale, forfeiture
      or loss of any part of the Project, title thereto or any interest therein,
      nor interfere in any material respect with the use or disposition thereof
      or the implementation of the Project or the carrying on of the business
      of the Co-Borrowers; and

32

 

	 	 	(B)	the Co-Borrowers
      have set aside adequate reserves sufficient to promptly pay in full any
      amounts that the Co-Borrowers may be ordered to pay on final determination
      of any such proceedings; and
	 	 	 	 	 
	 	(vi)	any Liens
      over the property of an Affiliate (other than PSPH or the Co-Borrowers (as
      defined therein) under the LAC Loan Agreements) of PSMT;
	 	 	 	 	 
	 	(vii)	 carriers’,
      warehousemen’s, mechanics’, materialmen’s, repairmen’s
      or other similar Liens arising in the ordinary course of business;
	 	 	 	 	 
	 	(viii)	Liens
      related to money purchase obligations incurred in the ordinary course of
      business so long as such Liens only attach to property related to money
      purchase obligations and secure only such property; and
	 	 	 	 	 
	 	(ix)	easements,
      rights-of-way, restrictions and other similar encumbrances incurred in the
      ordinary course of business which do not materially interfere with the ordinary
      conduct of the businesses of the Co-Borrowers’ conducted thereon;

       (h)       enter
  into any transaction with any Person (including Affiliates of the Co-Borrowers)
  except in the ordinary course of business on the basis of arm’s-length
  arrangements (including, without limitation, transactions whereby the Co-Borrowers
  might pay more than the ordinary commercial price for any purchase or might
  receive less than the full ex-works commercial price (subject to normal trade
  discounts) for its products);

       (i)       establish
any sole and exclusive purchasing or sales agency; 
       (j)       in
  relation to PSPH only, enter into any partnership, profit-sharing or royalty
  agreement or other similar arrangement whereby PSPH’s income or profits
  are, or might be, shared with any other Person. For the avoidance of doubt,
  PSMT may enter into such partnerships, profit-sharing or royalty agreements
  or other similar arrangements in the ordinary course of PSMT’s business
  provided that:

	 	(i)	notwithstanding
      the payment of any sums payable under such partnerships, profit-sharing
      or royalty agreements or other similar arrangements, the financial ratios
      set out in sub-section (a) above are achieved; and
	 	 	 	 	 
	 	(ii)	 in the
      event of an Event of Default or Potential Event of Default having occurred,
      all sums to be paid under any such partnership, profit-sharing or royalty
      agreement or other similar arrangement may continue to accrue but shall
      not be paid until the Event of Default or Potential Event of Default has
      been cured;

       (k)       enter
  into any management contract or similar arrangement whereby its business or
  operations are managed by any other Person; 

       (l)       form
  or have any Subsidiary except for those Subsidiaries which are in similar lines
  of business as that of the Co-Borrowers: 

       (m)       make
  or permit to exist loans or advances to, or deposits (except commercial bank
  deposits in the ordinary course of business) with, other Persons or enterprise
  other than short-term marketable securities acquired solely to give temporary
  employment to the Co-Borrowers’ idle funds in accordance with, at the option
  of IFC, either the Investment Policies or investments rated AA or better by
  Standard & Poor’s, provided always that, that after taking into account
  such advances or credit facilities the Current Ratio shall not fall below 1.2;

       (n)       change
  its Charter in any manner which would be inconsistent with the provisions of
  any Transaction Document; 

       (o)       change
  its Financial Year;

33

 

       (p)       change
  the nature or scope of the Project or change the nature of either or both Co-Borrowers’
  present and/or contemplated business or operations; 

       (q)       sell,
  transfer, lease or otherwise dispose of all or a substantial part of its assets,
  other than inventory, whether in a single transaction or in a series of transactions,
  related or otherwise other than:

	 	(i)	fixed
      assets of the Co-Borrowers with an aggregate value of less than ten per
      cent. (10%) of the existing Net Fixed Assets in any Financial Year; and
	 	 	 	 	 
	 	(ii)	 assets
      that have become worn out or obsolete and are replaced or upgraded or that
      are no longer required for the purposes of carrying out the Project,

in each case in the ordinary
  course of business and in a manner consistent with the Transaction Documents;

       
  (r)       undertake or permit any merger,
  spin-off, consolidation or reorganization; 

       (s)       terminate,
  amend or grant any waiver with respect to any provision of:

	 	(i)	any of
      the agreements listed in Section 5.01(a) (Conditions of Disbursement);
      or
	 	 	 	 	 
	 	(ii)	 
      any document
      evidencing or securing any other senior loan set forth in the Financial
      Plan; 

       (t)       prepay
  (whether voluntarily or involuntarily) or repurchase any Long-term Debt (other
  than the Loan and the IFC loan provided under the LAC Loan Agreements) pursuant
  to any provision of any agreement or note with respect to that Long-term Debt
  unless:

	 	(i)	that Long-term
      Debt is refinanced using new Long-term Debt on terms and conditions (as
      to interest rate, other costs and tenor) at least as favorable to the Co-Borrowers
      as those of the Long-term Debt being refinanced; or
	 	 	 	 	 
	 	(ii)	the Co-Borrowers
      gives IFC at least thirty (30) days’ advance notice of its intention
      to make the proposed prepayment and, if IFC so requires, the Co-Borrowers
      contemporaneously prepays a proportion of the Loan equivalent to the proportion
      of the part of the Long-term Debt being prepaid, such prepayment to be made
      in accordance with the provisions of Section 3.06 (Prepayment)
      except that the provisions with respect to the advance notice for prepayment
      set out in Section 3.06(a), the minimum prepayment amount set forth in Section
      3.06(a)(ii) and the prepayment premium set forth in Section 3.06(b) shall
      not apply;

 provided
  that, after taking into account such prepayment for refinancing, the Debt to
  Equity Ratio does not exceed 50:50 and the Current Ratio shall not be less than
  1.2;

       (u)       use
  the proceeds of any Disbursement in the territories of any country which is
  not a member of the World Bank or for reimbursements of expenditures in those
  territories or for goods produced in or services supplied from any such country;

       (v)       terminate,
waive or materially amend any license agreements or trademarks or any other intellectual
property rights with respect to the Project; and 
       (w)       with
  respect to PSMT, amend the Investment Policies unless such amendment is in accordance
  with PSMT’s internal procedures and is promptly delivered to IFC.

       Section
6.03. Reporting Requirements. Unless IFC otherwise agrees, the
Co-Borrowers shall: 
       (a)       as
  soon as available but in any event within sixty (60) days after the end of the
  first three quarters of each Financial Year, deliver to IFC:

34

 

	 	(i)	two (2)
      copies of their complete financial statements for such quarter prepared
      on a Consolidated Basis, in accordance with the Accounting Principles;
	 	 	 	 	 
	 	(ii)	 for such
      period as IFC shall require, provide quarterly monitoring reports, in form
      and substance satisfactory to IFC, on the construction and management of
      the Ortigas Store and the Alabang Store; 
	 	 	 	 	 
	 	 (iii)	during
      implementation of the Project, a report, in the form attached as Schedule
      8 (Form of Project Report re: Project implementation), on the progress
      in implementation of the Project, including any factors that have or could
      reasonably be expected to have a Material Adverse Effect;
	 	 	 	 	 
	 	(iv)	a statement
      of all transactions during that quarter between each Co-Borrower and each
      of its Affiliates, if any, and a certification by an Authorized Representative
      that those transactions were on the basis of arm’s-length arrangements;

       (b)       as
  soon as available but in any event within one hundred and twenty (120) days
  after the end of each Financial Year, deliver to IFC:

	 	(i)	two (2)
      copies of its complete and audited financial statements for that Financial
      Year (which are in agreement with its books of account and prepared, on
      a Consolidated Basis, in accordance with the Accounting Principles, together
      with the Auditors’ audit report on them, all in form satisfactory to
      IFC; 
	 	 	 	 	 
	 	(ii)	 a management
      letter and such other communication from the Auditors commenting, with respect
      to that Financial Year, on, among other things, the adequacy of the Co-Borrowers’
      financial control procedures, accounting systems and management information
      system; 
	 	 	 	 	 
	 	 (iii)	a report
      by the Auditors certifying that, on the basis of its financial statements,
      the relevant Co-Borrower was in compliance with the covenants contained
      in Section 6.02 (Negative Covenants) as of the end of that Financial
      Year or, as the case may be, detailing any non-compliance; and
	 	 	 	 	 
	 	(iv)	a report
      by the Co-Borrowers on its operations during that Financial Year, in the
      form of, and addressing the topics listed in, Schedule 9 (Information
      to be included in annual review of operations); and
	 	 	 	 	 
	 	 (v)	a statement
      by the Co-Borrowers of all transactions between the Co-Borrowers and each
      of its Affiliates, if any, during that Financial Year, and a certification
      by an Authorized Representative that those transactions were on the basis
      of arm’s-length arrangements;

       (c)       as
  soon as available but no later than sixty (60) days after the end of the first
  six months of each Financial Year and after the end of each Financial Year,
  provide to IFC a semi-annual report regarding Project implementation, including
  a description of Cash Generation and the funds raised from other sources of
  funds, invested in the Project;

       (d)       deliver
  to IFC, promptly following receipt, a copy of any management letter or other
  communication sent by the Auditors (or any other accountants retained by the
  Co-Borrowers) to the Co-Borrowers or its management in relation to the Co-Borrowers’
  financial, accounting and other systems, management or accounts, if not provided
  pursuant to Section 6.03(b)(ii) (Reporting Requirements);

       (e)       within
  ninety (90) days after the end of each Financial Year, deliver to IFC an Annual
  Monitoring Report, confirming compliance with the applicable national or local
  requirements, the Environmental and Social Policies, the Environmental, Health
  and Safety Guidelines, and Section 6.01(g)

35

 

 (Affirmative Covenants)
or, as the case may be, detailing any non-compliance together with details of
the action being taken to ensure compliance and advising IFC as to whether any
modification of the form of the Annual Monitoring Report is necessary based on
any changes in the Project;
       (f)       as
  soon as possible but no later than three (3) days after its occurrence, notify
  IFC of any incident or accident which has or may reasonably be expected to have
  an adverse effect on the environment, health or safety, including, without limitation,
  explosions, spills or workplace accidents which result in death, serious or
  multiple injury or major pollution, specifying, in each case, the nature of
  the incident or accident, the on-site and off-site impacts arising or likely
  to arise therefrom and the measures the Co-Borrowers are taking or plan to take
  to address those impacts, and keep IFC informed of the on-going implementation
  of those measures;

       (g)       give
  a fifteen (15) day prior notice to IFC, of either Co-Borrower’s notification
  to its shareholders, of any meeting of its shareholders, such notice to include
  the agenda of the meeting; and, as soon as available, deliver to IFC two (2)
  copies of:

	 	(i)	all notices,
      reports and other communications of the Co-Borrowers to its shareholders,
      whether any such communication has been made on an individual basis or by
      way of publication in a newspaper or other communication medium; and
	 	 	 	 	 
	 	(ii)	the minutes
      of all shareholders’ meetings within thirty (30) days of said shareholders’
      meeting;

       (h)      
  promptly notify IFC of any proposed change in the nature or scope of the Project
  or the business or operations of the Co-Borrowers and of any event or condition
  which has or may reasonably be expected to have a Material Adverse Effect;

       (i)       promptly
  upon becoming aware of any litigation or administrative proceedings before any
  Authority or arbitral body which has or may reasonably be expected to have a
  Material Adverse Effect, notify IFC by facsimile of that event specifying the
  nature of that litigation or those proceedings and the steps the Co-Borrowers
  are taking or propose to take with respect thereto;

       (j)       promptly
  upon the occurrence of an Event of Default or Potential Event of Default, notify
  IFC by facsimile specifying the nature of that Event of Default or Potential
  Event of Default and any steps the Co-Borrowers are taking to remedy it;

       (k)       provide
to IFC, in a timely manner, the insurance certificates and other information referred
to in Section 6.04 (d) (Insurance); and 
       (l)       promptly
  provide to IFC such other information as IFC from time to time requests about
  each of the Co-Borrowers, their respective assets and the Project.

       Section
  6.04. Insurance. 

       (a)
         Insurance Requirements and Co-Borrowers’
  Undertakings. Unless IFC otherwise agrees, the Co-Borrowers shall: 

	 	 	 	 	 
	 	(i)	insure
      and keep insured, with financially sound and reputable insurers, all its
      assets and business against all insurable losses to include the insurances
      specified in Annex B (Insurance Requirements) and any insurance
      required by law;
	 	 	 	 	 
	 	(ii)	punctually
      pay any premium, commission and any other amounts necessary for effecting
      and maintaining in force each insurance policy;
	 	 	 	 	 
	 	(iii)	promptly
      notify the relevant insurer of any claim by the Co-Borrowers under any policy
      written by that insurer and diligently pursue that claim;
	 	 	 	 	 

36

 

	 	 	 	 	 
	 	(iv)	comply
      with all warranties under each policy of insurance;
	 	 	 	 	 
	 	(v)	not do
      or omit to do, or permit to be done or not done, anything which might prejudice
      the Co-Borrowers’, or, where IFC is a loss payee or an additional named
      insured, IFC’s right to claim or recover under any insurance policy;
      and
	 	 	 	 	 
	 	(vi)	not vary,
      rescind, terminate, cancel or cause a material change to any insurance policy
      required to be maintained under this Agreement unless the same is replaced
      by other insurance satisfying the requirement of this Section 6.04;
	 	 	 	 	 
	 	provided
      always that if at any time and for any reason any insurance required to
      be maintained under this Agreement shall not be in full force and effect,
      then IFC shall thereupon or at any time while the same is continuing be
      entitled (but have no such obligation) on its own behalf to procure that
      insurance at the expense of the Co-Borrowers and to take all such steps
      to minimize hazard as IFC may consider expedient or necessary.
	 	 	 	 	 

       (b)       
Policy Provisions. Each insurance policy required to be obtained
pursuant to this Section shall be on terms and conditions acceptable to IFC, and
shall contain provisions to the effect that: 
	 	 	 	 	 
	 	(i)	no policy
      can expire nor can it be canceled or suspended by the Co-Borrowers or the
      insurer for any reason (including failure to renew the policy or to pay
      the premium or any other amount) unless IFC and, in the case of expiration
      or if cancellation or suspension is initiated by the insurer, the Co-Borrowers
      receive at least thirty (30) days’ notice (or such lesser period as
      IFC may agree with respect to cancellation, suspension or termination in
      the event of war and kindred peril) prior to the effective date of termination,
      cancellation or suspension;
	 	 	 	 	 
	 	(ii)	 IFC and
      all contractors working at the Project site are named as additional named
      insured on all liability policies;
	 	 	 	 	 
	 	(iii)	where
      relevant, all its provisions (except those relating to limits of liability)
      shall operate as if they were a separate policy covering each insured party;
      and
	 	 	 	 	 
	 	 (iv)	on every
      insurance policy on the Co-Borrowers’ assets which are the subject
      of the IFC Security and for business interruption or delayed start-up (including,
      but not limited to, for civil riot and commotion), IFC is named as loss
      payee for any claim of, or any series of claims arising with respect to
      the same event whose aggregate amount is, the equivalent of five hundred
      thousand Dollars ($500,000) or more;
	 	 	 	 	 

       (c)       
  Application of Proceeds. 

	 	(i)	At its
      discretion, IFC may remit the proceeds of any insurance paid to it to the
      Co-Borrowers to repair or replace the relevant damaged assets or may apply
      those proceeds towards any amount payable to IFC under this Agreement, including
      to repay or prepay all or any part of the Loan in accordance with Section
      3.06 (Prepayment) except that the provisions with respect to the
      advance notice for prepayment set out in Section 3.06(a), the minimum prepayment
      amount set forth in Section 3.06(a)(ii) and the prepayment premium set forth
      in Section 3.06(b) shall not apply to any such prepayment.
	 	 	 	 	 
	 	(ii)	Each of
      the Co-Borrowers shall use any insurance proceeds it receives (whether from
      IFC or directly from the insurers) for loss of or damage to any asset solely
      to replace or repair that asset.

       (d)       
  Reporting Requirements. Unless IFC otherwise agrees, the Co-Borrowers
  shall provide to IFC the following: 

37

 

	 	 	 	 	 
	 	(i)	as soon
      as possible after its occurrence, notice of any event which entitles the
      Co-Borrowers to claim for an aggregate amount exceeding the equivalent of
      five hundred thousand Dollars ($500,000) under any one or more insurance
      policies;
	 	 	 	 	 
	 	(ii)	within
      thirty (30) days after any insurance policy is issued to the Co-Borrowers,
      a copy of that policy incorporating any loss payee provisions required under
      Section 6.04(b)(iv) (unless that policy has already been provided to IFC
      pursuant to Section 5.01(i) (Conditions of First Disbursement);
	 	 	 	 	 
	 	(iii)	not less
      than ten (10) days prior to the expiry date of any insurance policy (or,
      for insurance with multiple renewal dates, not less than ten (10) days prior
      to the expiry date of the policy on the principal asset), a certificate
      of renewal from the insurer, insurance broker or agent confirming the renewal
      of that policy and the renewal period, the premium, the amounts insured
      for each asset or item and any changes in terms or conditions from the policy’s
      issue date or last renewal, and confirmation from the insurer that provisions
      naming IFC as loss payee or additional named insured, as applicable remain
      in effect;
	 	 	 	 	 
	 	(iv)	such evidence
      of premium payment as IFC may from time to time request; and
	 	 	 	 	 
	 	(v)	any other
      information or documents on each insurance policy as IFC requests from time
      to time.
	 	 	 

ARTICLE
  VII

  

  Events of Default

       Section
  7.01. Acceleration after Default. If any Event of Default occurs
  and is continuing (whether it is voluntary or involuntary, or results from operation
  of law or otherwise), IFC may, by notice to the Co-Borrowers, require the Co-Borrowers
  to repay the Loan or such part of the Loan as is specified in that notice. On
  receipt of any such notice, the Co-Borrowers shall immediately repay the Loan
  (or that part of the Loan specified in that notice) and pay all interest accrued
  on it, the prepayment premium specified in Section 3.06(b) (Prepayment) on the
  amount of the Loan whose payment is accelerated and any other amounts then payable
  under this Agreement. Each of the Co-Borrowers waives any right it might have
  to further notice, presentment, demand or protest with respect to that demand
  for immediate payment.

       Section
  7.02. Events of Default. It shall be an Event of Default if:
  

       (a)       
  the Co-Borrowers fail to pay when due any part of the principal of, or interest
  on, the Loan and such failure continues for a period of five (5) days; 

       (b)       the
  Co-Borrowers fail to pay when due any part of the principal of, or interest
  on, the Parallel Loan(s) and such failure continues for the relevant period
  of grace provided for in the Parallel Loan Agreement(s);

       (c)       the
  Co-Borrowers fail to pay when due any part of the principal of, or interest
  on, any loan from IFC to one or both Co-Borrowers other than the Loan and any
  such failure continues for the relevant period of grace provided for in the
  agreement providing for that loan;

       (d)       either
  Co-Borrower fails to comply with any of its obligations under this Agreement
  or any other Transaction Document or any other agreement between one or both
  Co-Borrowers and IFC (other than for the payment of the principal of, or interest
  on, the Loan or any other loan from IFC to either or 

38

 

both Co-Borrowers),
  and any such failure continues for a period of thirty (30) days after the date
  on which IFC notifies the relevant Co-Borrower(s) of that failure;

       (e)       any
  party to a Transaction Document (other than IFC or the Co-Borrowers) fails to
  observe or perform any of its obligations under that Transaction Document, and
  any such failure continues for a period of thirty (30) days after the date on
  which IFC notifies the Co-Borrowers of that failure or either Co-Borrower becomes
  aware of such failure;

       (f)       any
  representation or warranty made in Article IV (Representations and Warranties)
  or in connection with the execution of, or any request (including a request
  for Disbursement) under, this Agreement or any other Transaction Document is
  found to be incorrect in any material respect;

       (g)       any
  Authority condemns, nationalizes, seizes, or otherwise expropriates all or any
  substantial part of the property or other assets of either or both Co-Borrowers
  or of its share capital, or assumes custody or control of that property or other
  assets or of the business or operations of the Co-Borrowers or of its share
  capital, or takes any action for the dissolution or disestablishment of either
  Co-Borrower or any action that would prevent either Co-Borrower or its officers
  from carrying on all or a substantial part of its business or operations;

       (h)       a
  decree or order by a court is entered against either or both Co-Borrowers: 

	 	(i)	adjudging
      it bankrupt or insolvent;  
	 	 	 	 	 
	 	(ii)	approving
      as properly filed a petition seeking reorganization, arrangement, adjustment
      or composition of, or with respect to, such Co-Borrower under any applicable
      law;
	 	 	 	 	 
	 	(iii)	appointing
      a receiver, liquidator, assignee, trustee, sequestrator (or other similar
      official) of such Co-Borrower or of any substantial part of its property
      or other assets; or 
	 	 	 	 	 
	 	(iv)	ordering
      the winding up or liquidation of its affairs;
	 	 	 	 	 
	 	 	or any
      petition is filed seeking any of the above and is not dismissed within thirty
      (30) days; 

       (i)       either
  Co-Borrower: 

	 	(i)	requests
      a moratorium or suspension of payment of debts from any court; 
	 	 	 	 	 
	 	(ii)	institutes
      proceedings or takes any form of corporate action to be liquidated, adjudicated
      bankrupt or insolvent;
	 	 	 	 	 
	 	(iii)	consents
      to the institution of bankruptcy or insolvency proceedings against it;
	 	 	 	 	 
	 	(iv)	files
      a petition or answer or consent seeking reorganization or relief under any
      applicable law, or consents to the filing of any such petition or to the
      appointment of a receiver, liquidator, assignee, trustee, sequestrator (or
      other similar official) of such Co-Borrower or of any substantial part of
      its property;
	 	 	 	 	 
	 	 (v)	makes
      a general assignment for the benefit of creditors; or
	 	 	 
	 	(vi)	admits
      in writing its inability to pay its debts generally as they become due or
      otherwise becomes insolvent;

       (j)       an
  attachment or analogous process is levied or enforced upon or issued against
  any of the assets of any Co-Borrower for an amount in excess of the equivalent
  of five hundred thousand Dollars ($500,000) and is not discharged within thirty
  (30) days;

39

 

       (k)       any
  other event occurs which under any applicable law would have an effect analogous
  to any of those events listed in Section 7.02(g), Section 7.02(h) or Section
  7.02(i);

       (l)       either
  Co-Borrower fails to pay any of its Debt (other than the Loan or any other loan
  from IFC to one or both Co-Borrowers) or to perform any of its obligations under
  any agreement pursuant to which there is outstanding any Debt, and any such
  failure continues for more than any applicable period of grace or any such Debt
  becomes prematurely due and payable or is placed on demand;

       (m)       any
  Authorization necessary for either Co-Borrower to perform and observe its obligations
  under any Transaction Document, or to carry out the Project, is not obtained
  when required or is rescinded, terminated, lapses or otherwise ceases to be
  in full force and effect, including with respect to the remittance to IFC or
  its assignees, in the Loan Currency, of any amounts payable under any Transaction
  Document, and is not restored or reinstated within thirty (30) days of notice
  by IFC to the Co-Borrowers requiring that restoration or reinstatement;

       (n)       any
  Security Document or any of its provisions: 

	 	(i)	 is revoked,
      terminated or ceases to be in full force and effect or ceases to provide
      the security intended, without, in each case, the prior consent of IFC;
	 	 	 	 	 
	 	(ii)	becomes
      unlawful or is declared void; or  
	 	 	 	 	 
	 	(iii)	is repudiated
      or its validity or enforceability is challenged by any Person and any such
      repudiation or challenge continues for a period of thirty (30) days during
      which period such repudiation or challenge has no effect;

       (o)       any
  Transaction Document (other than a Security Document) or any of its provisions:
  

	 	(i)	 is revoked,
      terminated or ceases to be in full force and effect without, in each case,
      the prior consent of IFC, and that event, if capable of being remedied,
      is not remedied to the satisfaction of IFC within thirty (30) days of IFC’s
      notice to the Co-Borrowers; or 
	 	 	 	 	 
	 	(ii)	becomes
      unlawful or is declared void; 

       (p)       any
  Transaction Document (other than a Security Document) is repudiated or the validity
  or enforceability of any of its provisions at any time is challenged by any
  Person and such repudiation or challenge is not withdrawn within thirty (30)
  days of IFC’s notice to the Co-Borrowers requiring that withdrawal; provided
  that no such notice shall be required or, as the case may be, the notice period
  shall terminate if and when such repudiation or challenge becomes effective;
  or

       (q)       any
  contract material to the completion of the Project or the lease agreements pertaining
  to the Ortigas Store and the Alabang Store: 

	 	(i)	 is breached
      by any party to it and such breach has or could reasonably be expected to
      have a Material Adverse Effect; or
	 	 	 	 	 
	 	(ii)	 is revoked,
      terminated or ceases to be in full force and effect without the prior consent
      of IFC, or performance of any of the material obligations under any such
      agreement becomes unlawful or any such agreement is declared to be void
      or is repudiated or its validity or enforceability at any time is challenged
      by any party to it; or

       (r)       a
  final judgment, a final order or a final arbitral award for the payment of sums
  in excess of five hundred thousand Dollars ($500,000) in relation to either
  Co-Borrower (which remains unpaid for a period of thirty (30) days) or for the
  voiding of any leases is rendered against either or both Co-Borrowers or any
  of its properties.

40

 

       Section
  7.03. Bankruptcy. If either Co-Borrower is liquidated or declared
  bankrupt, the Loan, all interest accrued on it and any other amounts payable
  under this Agreement will become immediately due and payable without any presentment,
  demand, protest or notice of any kind, all of which each Co-Borrower waives.

ARTICLE
  VIII

Miscellaneous

       Section
  8.01. Saving of Rights. (a) The rights and remedies of IFC in
  relation to any misrepresentation or breach of warranty on the part of the Co-Borrowers
  shall not be prejudiced by any investigation by or on behalf of IFC or any of
  the Participants into the affairs of the Co-Borrowers, by the execution or the
  performance of this Agreement or by any other act or thing which may be done
  by or on behalf of IFC in connection with this Agreement and which might, apart
  from this Section, prejudice such rights or remedies.

       (b)       No
  course of dealing or waiver by IFC in connection with any condition of Disbursement
  of the Loan under this Agreement shall impair any right, power or remedy of
  IFC with respect to any other condition of Disbursement, or be construed to
  be a waiver thereof; nor shall the action of IFC with respect to any Disbursement
  affect or impair any right, power or remedy of IFC with respect to any other
  Disbursement.

       (c)       Unless
  otherwise notified to the Co-Borrowers by IFC and without prejudice to the generality
  of Section 8.01(b), the right of IFC to require compliance with any condition
  under this Agreement which may be waived by IFC with respect to any Disbursement
  is expressly preserved for the purposes of any subsequent Disbursement.

       (d)       No
  course of dealing and no failure or delay by IFC in exercising, in whole or
  in part, any power, remedy, discretion, authority or other right under this
  Agreement or any other agreement shall waive or impair, or be construed to be
  a waiver of or an acquiescence in, such or any other power, remedy, discretion,
  authority or right under this Agreement, or in any manner preclude its additional
  or future exercise; nor shall the action of IFC with respect to any default,
  or any acquiescence by it therein, affect or impair any right, power or remedy
  of IFC with respect to any other default.

       Section
  8.02. Term of Agreement. This Agreement shall continue in force
  until all monies payable under it have been fully paid in accordance with its
  provisions.

       Section
8.03. Applicable Law and Jurisdiction. (a) This Agreement is governed
by, and shall be construed in accordance with, the laws of the State of New York,
United States of America. 
       (b)       Each
  Co-Borrower irrevocably agrees that any legal action, suit or proceeding arising
  out of or relating to this Agreement or any other Transaction Document to which
  it is a party may be brought by IFC in the courts of the United States of America
  located in the Southern District of New York. By the execution of this Agreement,
  each Co-Borrower irrevocably submits to the non-exclusive jurisdiction of any
  such court in any such action, suit or proceeding. Final judgment against the
  Co-Borrowers in any such action, suit or proceeding shall be conclusive and
  may be enforced in any other jurisdiction, including the Country, by suit on
  the judgment, a certified or exemplified copy of which shall be conclusive evidence
  of the judgment, or in any other manner provided by law.

       (c)       Nothing
  in this Agreement shall affect the right of IFC to commence legal proceedings
  or otherwise sue the Co-Borrowers in the Philippines or any other appropriate
  jurisdiction, or concurrently in more than one jurisdiction, or to serve process,
  pleadings and other legal papers upon the Co-Borrowers in any manner authorized
  by the laws of any such jurisdiction.

       (d)       Each
  Co-Borrower hereby irrevocably designates, appoints and empowers CT Corporation
  System, 111 Eighth Avenue, 13th Floor, New York, NY 10011 as its authorized
  agent solely to 

41

 

receive for
  and on its behalf service of summons or other legal process in any action, suit
  or proceeding IFC may bring in the State of New York.

       (e)       As
  long as this Agreement or any other Transaction Document to which the Co-Borrowers
  are a party remains in force, each Co-Borrower shall maintain a duly appointed
  and authorized agent to receive for and on its behalf service of any summons,
  complaint or other legal process in any action, suit or proceeding IFC may bring
  in New York, New York, United States of America, with respect to this Agreement
  or that other Transaction Document. Each Co-Borrower shall keep IFC advised
  of the identity and location of such agent.

       (f)       Each
  Co-Borrower also irrevocably consents, if for any reason the Co-Borrower’s
  authorized agent for service of process of summons, complaint and other legal
  process in any action, suit or proceeding is not present in New York, New York,
  to the service of such papers being made out of those courts by mailing copies
  of the papers by registered United States air mail, postage prepaid, to the
  Co-Borrowers at their addresses specified pursuant to Section 1.02 (Notices),
  Volume V, Miscellaneous; Execution. In such a case, IFC shall also send by facsimile,
  or have sent by facsimile, a copy of the papers to the Co-Borrowers.

       (g)       Service
  in the manner provided in this Section 8.05 in any action, suit or proceeding
  will be deemed personal service, will be accepted by the Co-Borrowers as such
  and will be valid and binding upon the Co-Borrowers for all purposes of any
  such action, suit or proceeding.

       (h)       Each
  Co-Borrower irrevocably waives to the fullest extent permitted by applicable
  law: 

	 	(i)	 any objection
      which it may have now or in the future to the laying of the venue of any
      action, suit or proceeding in any court referred to in this Section; and
	 	 	 	 	 
	 	(ii)	 any claim
      that any such action, suit or proceeding has been brought in an inconvenient
      forum.

       (i)       To
  the extent that any Co-Borrower may be entitled in any jurisdiction to claim
  for itself or its assets immunity in respect of its obligations under this Agreement
  or any other Transaction Document to which each such Co-Borrower is a party
  from any suit, execution, attachment (whether provisional or final, in aid of
  execution, before judgment or otherwise) or other legal process or to the extent
  that in any jurisdiction that immunity (whether or not claimed) may be attributed
  to it or its assets, each Co-Borrower irrevocably agrees not to claim and irrevocably
  waives such immunity to the fullest extent permitted now or in the future by
  the laws of such jurisdiction.

       (j)       Each
  Co-Borrower hereby acknowledges that IFC shall be entitled under applicable
  law, including the provisions of the International Organizations Immunities
  Act, to immunity from a trial by jury in any action, suit or proceeding arising
  out of or relating to this Agreement or the transactions contemplated hereby
  or any other Transaction Document to which each such Co-Borrower is a party,
  brought against IFC in any court of the United States of America. Each Co-Borrower
  hereby waives any and all rights to demand a trial by jury in any action, suit
  or proceeding arising out of or relating to this Agreement or any other Transaction
  Document to which each such Co-Borrower is a party or the transactions contemplated
  by this Agreement or those Transaction Documents, brought against IFC in any
  forum in which IFC is not entitled to immunity from a trial by jury.

       (k)       To
  the extent that any Co-Borrower may, in any suit, action or proceeding brought
  in any of the courts referred to in Section 8.03(b) or elsewhere arising out
  of or in connection with this Agreement or any other Transaction Document to
  which each such Co-Borrower is a party, be entitled to the benefit of any provision
  of law requiring IFC in such suit, action or proceeding to post security for
  the costs of such Co-Borrower, or to post a bond or to take similar action,
  each Co-Borrower hereby irrevocably waives such benefit, in each case to the
  fullest extent now or in the future permitted under the laws of the Country
  or, as the case may be, the jurisdiction in which such court is located.

       (l)       To
  the extent that any Co-Borrower may, in any suit, action or proceeding brought
  in any courts referred to in Section 8.03(b) or a court in the Philippines or
  elsewhere arising out of or in connection with this Agreement or any other Transaction
  Document to which each such Co-Borrower is a 

42

 

party, be
  entitled to the benefit of any provision of law requiring IFC in such suit,
  action or proceeding to post security for the costs of such Co-Borrower, or
  to post a bond or to take similar action, each Co-Borrower hereby irrevocably
  waives such benefit, in each case to the fullest extent now or in the future
  permitted under the laws of the jurisdiction in which the court in question
  is located.

       Section
  8.04. Disclosure of Information. (a) IFC may disclose any documents
  or records of, or information about, this Agreement or any other Transaction
  Document, or the assets, business or affairs of the Co-Borrowers to:

	 	(i)	 its outside
      counsel, auditors and rating agencies; or
	 	 	 	 	 
	 	(ii)	 any other
      Person as IFC may deem appropriate in connection with any proposed sale,
      transfer, assignment or other disposition of IFC’s rights under this
      Agreement or any Transaction Document or otherwise for the purpose of exercising
      any power, remedy, right, authority, or discretion relevant to this Agreement
      or any other Transaction Document.

       (b)       Each
  Co-Borrower acknowledges and agrees that, notwithstanding the terms of any other
  agreement between the Co-Borrowers and IFC, a disclosure of information by IFC
  in the circumstances contemplated by Section 8.06(a) does not violate any duty
  owed to the Co-Borrowers under this Agreement or under any such other agreement.

43

 

ANNEX A

Page 1
  of 1 

CO-BORROWERS/PROJECT AUTHORIZATIONS

	
      Section (1). Authorizations Already Obtained

       
	 	 
	(a)	Board
      of Investments (“BOI”) certificate of compliance with pre-qualification
      requirements under the Retail Trade Liberalization Act of 2000
	 	 
	(b)	Bangko
      Sentral ng Pilipinas (“BSP”) Certification(s) of Inward Remittance
      (as required under Section 5, Retail Trade Act, and Section 3, Rule VII,
      Implementing Rules and Regulations of the Retail Trade Act , or “IRR”)
	 	 
	(c)	Charter
      documents for each Co-Borrower
	 	 
	(d)	
      Environmental Compliance Certificate for the Ortigas Store

      
	 	 
	(e)	BOI approval
      for the Fort Bonifacio Store (Section 4, Rule VII, IRR)
	 	 
	(f)	Certificates
      of Zoning Compliance from the local Authorities in each city in the Philippines
      where the Co-Borrowers have a store/branch
	 	 
	(g)	 Proof of submission
      of the most recent verified statement under oath issued by the Corporate
      Secretary of PSMT (which statement must be submitted annually to the BOI)
      stating (i) the number and location of stores of the enterprise and the
      status of operations; and (ii) the maintenance of required minimum capital
      (Section 5, Rule VII, IRR; the “Verified Annual Statement”)
	 	 
	(h)	Proof of submission
      of quarterly verified statement under oath (the “Verified Quarterly
      Statement”) as of 31 March 2002 submitted to the BOI attesting to the
      ratio of local and imported inventory, for the last three quarters (Section
      3, Rule IX, IRR)
	 	 
	Section
      (2). Authorizations to be Obtained Prior to First Disbursement
      
	 	 
	(a)	Proof of submission
      of Quarterly Verified Statement under oath submitted to the BOI attesting
      to the ratio of local and imported inventory, for the last three quarters,
      if applicable (Section 3, Rule IX, IRR)
	 	 
	(b)	Approval of the Loan
      from the BSP
	 	 
	(c)	Registration of (i)
      lease agreements for the Ortigas Store and the Alabang Store, and (ii) the
      real estate mortgage and chattel mortgage created under the Security Documents
      with the pertinent Registrars of Deeds, and annotation thereon on any title
      certificates over the underlying land 
	 	 
	(d)	 Documentary stamp
      tax return in respect of the Omnibus Agreement
	 	 
	(e)	BOI approval for each
      of the Alabang Store and the Ortigas Store (Section 4, Rule VII, IRR)  
      
	 	 
	(f)	Environmental Compliance
      Certificate for the Alabang Store
	 	 
	Section
      (3). Authorizations to be Obtained no later than the date stated
      below

44

 

	(a)	Submission of copies of the signed Loan Agreement
      to the BSP, no later than two weeks after the date hereof
	 	 
	(b)	Confirmation
      from the BSP that the Loan Agreement is in accordance with the BSP’s
      approval thereof to be obtained within three months following the date in
      (a) above
	 	 
	(c)	Notation
      of each Disbursement with the BSP, prior to the last day of the month within
      which each such Disbursement is made
	 	 
	(d)	Registration
      of the Loan with the BSP within one month from the earlier of (1) full disbursement
      of the Loan, and (2) cancellation of the remaining undrawn portion thereof
	 	 
	(e)	Registration
      of each Mortgage Supplement (as such term is defined in the Security Documents),
      executed pursuant to the Security Documents with the Registrar of Deeds
      for Muntinlupa or otherwise (as appropriate), and annotations relating thereto
      on title certificates of the Co-Borrowers, in accordance with the Security
      Documents 
	 	 
	(f)	 BOI approval
      for each of the Aseana Store and the Congressional Store, prior to the opening
      of the Aseana Store, and prior BOI approval for opening additional stores/branches
      (Section 4, Rule VII, IRR) 
	 	 
	(g)	Submission
      to the BOI of Verified Quarterly Statements and Verified Annual Statements
      as the same fall due
	 	 
	(h)	 BSP certificate
      of inward remittance for additional capital (if any)
	 	 
	(i)	 Environmental Compliance
      Certificate for any new stores
	 	 
	(j)	Department
      of Trade and Industry (through the BOI) approval of lease contracts for
      land where any store is located (as applicable) under Republic Act No. 7652
      otherwise known as the Investors’ Lease Act.

45

 

ANNEX B

Page 1 of
  1

INSURANCE REQUIREMENTS
  

	 	 	 	 	 
	1.
	CONSTRUCTION
      PHASE
	 	 	 	 	 
	 	a)	Construction
      All Risks, based on full contract value and including:
	 	 	 	 	 
	 	 	i)	riot and
      strike
	 	 	 	 	 
	 	 	ii)	debris
      removal
	 	 	 	 	 
	 	 	iii)	extra
      expenses
	 	 	 	 	 
	 	 	iv)	maintenance
	 	 	 	 	 
	 	 	v)	third
      party liability
	 	 	 	 	 
	 	 	vi)	civil
      commotion (insurrection/rebellion)
	 	 	 	 	 
	 	b)	Marine
      cargo
	 	 	 	 	 
	 	c)	Marine
      delay in start-up (depending on shipping schedule, and any assessed exposure)
	 	 	 	 	 
	2.	OPERATIONAL
      PHASE
	 	 	 	 	 
	 	a)	Fire and
      named perils or All Risks, based on replacement cost of assets
	 	 	 	 	 
	 	b)	machinery
      breakdown ( if applicable)
	 	 	 	 	 
	 	c)	business
      interruption
	 	 	 	 	 
	 	d)	third
      party liability
	 	 	 	 	 
	 	e)	civil
      commotion (insurrection/rebellion)
	 	 	 	 	 
	3.	AT ALL
      TIMES
	 	 	 	 	 
	 	Such insurances
      as required by local legislation. 

46

 

ANNEX
  C

  Page 1 of 4 

METHODOLOGY

 (FOR DETERMINATION
  OF THE BASE FIXED RATE FOR EACH LOAN DISBURSEMENT AND

  CALCULATION OF THE REDEPLOYMENT COSTS)

	 	 	 
	Section
      (A)	 	Methodology
      for Determination of the Base Fixed Rate
	 	 	 
	The
      Base Fixed Rate for each Disbursement is the weighted average of the swap
      rates for all maturities in that Disbursement, as determined as follows
      (see also attached example of calculation): 
	 	 	 
	(1)	 	The amount
      of each Disbursement is first allocated for repayment across equal amounts
      on each of the maturity dates specified in the repayment schedule appearing
      in Section 3.05(a) (Repayment) (each such amount an “Installment”).
	 	 	 
	 (2)	 	Each Installment
      has a Tenor (a “Tenor”) equal to the period commencing from the
      date of the relevant Disbursement to the date on which such Installment
      has been allocated for repayment.
	 	 	 
	(3)	 	On the
      Interest Rate Setting Date for the relevant Disbursement, IFC determines
      the fixed rate swap equivalent for each Installment (a “Fixed Rate
      Swap Equivalent”), i.e., the fixed interest rate payable in the swap
      market against receipt of interest at LIBOR, in respect of a specified maturity
      matching the Tenor of that Installment.
	 	 	 
	For the
      purposes of this Annex C: 
	 	 	 
	(a)	 	 “LIBOR”
      means the British Bankers’ Association London interbank offered rate for
      deposits in the Loan Currency;
	 	 	 
	(b)	 	the swap
      market information used to determine the Fixed Rate Swap Equivalent for
      each Installment is obtained from the Telerate rate fixing page for the
      Loan Currency (currently page 42276), on the Interest Rate Setting Date;
      and if that information cannot be obtained from the Telerate Service, IFC
      shall obtain that information from the relevant rate-fixing page available
      on the Reuters Service or, if not available, on the Bloomberg Financial
      Markets Service;

47

 

ANNEX
  C

  Page 2 of 4  

	 	 	 	 	 
	 (c)	 	 if all
      the services referred to in the preceding paragraph cease to be available,
      or if none of them contains the necessary swap market information, whether
      on the relevant Interest Rate Setting Date or generally, then IFC will determine
      the Fixed Rate Swap Equivalent for each Installment:
	 	 	 	 	 
	 	 	 (i)	 	to the
      extent available, from a live screen of a financial markets information
      provider that IFC, in its reasonable opinion, considers appropriate, the
      information to be obtained on the Interest Rate Setting Date as of 11:00
      a.m., New York time; or
	 	 	 	 	 
	 	 	(ii)	 	using
      whatever equivalent reasonable means of calculation that IFC, in its reasonable
      opinion, considers appropriate; and
	 	 	 	 	 
	(d)	 	swap market
      rates shall be interpolated on a straight-line basis so as to match the
      actual Tenor of each Installment.
	 	 	 	 	 
	(4)	 	The Fixed
      Rate Swap Equivalent for each Installment is then allocated a weight based
      on the Tenor and amount of that Installment (a “Weight”). Each
      such Weight is expressed as a percentage, i.e., the percentage which
      the product of the amount of an Installment times its Tenor represents of
      the sum of all those products calculated for all the Installments in the
      relevant Disbursement.
	 	 	 	 	 
	(5)
	 	Each Weight
      so determined is then multiplied by its corresponding Fixed Rate Swap Equivalent
      and the products so obtained for all Installments are added together to
      obtain the weighted average swap rate (the “Weighted Average Swap Rate”).
	 	 	 	 	 
	 (6)	 	The Weighted
      Average Swap Rate for the relevant Disbursement is then converted to the
      rate basis used for the Loan (i.e., actual number of days/360) and rounded
      up to the nearest two decimal places to produce the Base Fixed Rate for
      that Disbursement.
	 	 	 	 	 
	Section
      (B)	 	Methodology
      for Calculation of the Redeployment Cost
	 	 	 	 	 
	1.	 	The redeployment
      cost equals the amount in excess of zero, if any, obtained by deducting
      (x) the Present Value of the Available Income Stream of the amount to be
      prepaid from (y) the Present Value of the Original Income Stream of the
      amount to be prepaid.

48

 

ANNEX
  C

  Page 3 of 4

	2.
	For the
      purpose of this Section:
	 	 	 	 	 
	 	(a)	 the “Original
      Income Stream of the amount to be prepaid” means the aggregate amount
      of interest originally scheduled to be paid on the principal amount to be
      prepaid from the date of prepayment until the final maturity date of the
      Loan, calculated at the Loan Interest Rate. If the relevant prepayment occurs
      before the Loan Consolidation Date, the applicable interest rate shall be
      the weighted average of all Disbursement Interest Rates then in effect,
      calculated using the methodology set forth in Section 3.03(f) (Interest);
	 	 	 	 	 
	 	(b)	the “Available
      Income Stream of the amount to be prepaid” means the aggregate amount
      of interest that would have accrued, from the date of prepayment until the
      final maturity date of the Loan, on the principal amount to be prepaid had
      such amount been disbursed on the prepayment date, calculated at an interest
      rate equal to the sum of (i) the Spread and (ii) the Base Fixed Rate applicable
      to such hypothetical disbursement, determined two (2) business days prior
      to the date of prepayment in accordance with Annex C, Section (A); and
	 	 	 	 	 
	 	(c)	the “Present
      Value” of the relevant Income Stream is the value of the Original Income
      Stream or, as the case may be, the Available Income Stream discounted back
      to the date of prepayment from each of the relevant Interest Payment Dates
      at a discount rate equal to the Base Fixed Rate determined pursuant to paragraph
      (b) above.
	 	 	 	 	 
	 	 	3.	The determination
      by IFC of the redeployment cost shall be final and conclusive and bind the
      Borrower (unless the Borrower shows to IFC’s satisfaction that the
      determination involves manifest error). 
	 	 	 	 	 
	 	 	 4.	The determination
      by IFC of the redeployment cost shall be final and conclusive and bind the
      Borrower (unless the Borrower shows to IFC’s satisfaction that the
      determination involves manifest error).

49

 

ANNEX
  C

  Page 4 of 4 

EXAMPLE

Applicable
  Swap Rates (from Telerate page 42276)

			
	Rate
      Setting Date:	7 Feb
      1998	Effective
      Date:	9
      Feb 1998
	Quote
      Basis:	Semi
      Annual, 30/360 (by market convention)	 
	 	Maturity	 	Offered
      Rate
	                  	3
      mo	0	3.100	%
	                  	1
      Years	1	3.200	%
	                 	2
      Years	2	3.300	%
	                  	3
      Years	3	3.400	%
	                  	4
      Years	4	3.500	%
	                  	5
      Years	5	3.600	%
	Interpolated	6 Years	6	3.650	%
	                 	7
      Years	7	3.700	%
	Interpolated	8
      Years	8	3.800	%
	Interpolated	9
      Years	9	3.900	%
	                 	10
      Years	10	4.000	%
	Interpolated	11
      Years	11	4.100	%
	                  	12
      Years	12	4.200	%

Calculation
  of the Redeployment Cost on Prepayment of $15,000,000

  Prepayment Date: 9 February, 1998

  Same repayment schedule as in example in Section (A) of Annex C 

Step
  1. Determine Base Fixed Rate for a hypothetical Disbursement of
  principal amount to be prepaid (i.e., $15,000,000) as of prepayment date
  (9 February, 1998).

Step
  2. Add Loan Spread (3.00%) to Base Fixed Rate and then calculate
  income stream for principal amount prepaid as Loan would be priced as of the
  prepayment date.

Step
  3. Using the Loan Interest Rate, calculate the income stream for
  the principal amount prepaid.

Step
  4. Calculate Present Value of each income stream.

Step
  5. Subtract the Present Value of the Available Income Stream from
  the Present Value of the Original Income Stream. The result, if in excess of
  zero, is the redeployment cost.

50

 

SCHEDULE
  1

  Page 1 of 2 

FORM
  OF CERTIFICATE OF INCUMBENCY AND AUTHORITY

[PSMT’s
  Letterhead]

 [Date]

International Finance Corporation

  2121 Pennsylvania Avenue, N.W.

  Washington, D.C. 20433

  United States of America 

Attention:
  Director, Central and East Asia Department

Ladies and Gentlemen: 
Certificate of Incumbency and Authority

       With
  reference to the Loan Agreement between us, dated ________, ___ (the “Loan
  Agreement”), I, the undersigned [Chairman/Director] of [Name of Co-Borrowers],
  (the “Co-Borrowers”), duly authorized to do so, hereby certify that
  the following are the names, offices and true specimen signatures of the persons
  [each] [any two] of whom are, and will continue to be, authorized:

       (a)       to
  sign on behalf of the Co-Borrowers the requests for the disbursement of funds
  provided for in Section 3.02 (Disbursement Procedure) of the Loan Agreement;
  

       (b)       to
  sign the certifications provided for in Section 5.02 (Conditions of First Disbursement)
  and Section 5.03 (Conditions of All Disbursements) of the Loan Agreement;
  and 

51

 

SCHEDULE
  1

  Page 1 of 2 

       (c)       to
  take any other action required or permitted to be taken, done, signed or executed
  under the Loan Agreement or any other agreement to which IFC and the Co-Borrowers
  may be parties.

	 	 	 	 	 
	*Name	 	Office
      	 	Specimen
      Signature
	 	 	 	 	 
	 
	 	
	 	

	 	 	 	 	 
	
	 	
	 	

	 	 	 	 	 
	
	 	
	 	

     You
  may assume that any such person continues to be so authorized until you receive
  authorized written notice from the Co-Borrowers that they, or any of them, is
  no longer so authorized.

	 	 
	 	Yours
      truly,
	 	 	 
	 	[NAME
      OF CO-BORROWERS] 
	 	 	 
	 	 	 
	 	By	 
	 	 	

	 	 	[Chairman/Director]
	 	 	 

52

 

SCHEDULE
  2

  Page 1 of 3 

FORM
  OF REQUEST FOR DISBURSEMENT (LOAN) 

[PSMT’s Letterhead]

 [Date] 

International Finance Corporation

  2121 Pennsylvania Avenue, N.W.

  Washington, D.C. 20433

  United States of America 

Attention:
  Director, Central and East Asia Department

Ladies and Gentlemen: 
Investment
  No. 11213

  Request for Loan Disbursement No. [      ]

 1.       Please
refer to the Loan Agreement (the “Loan Agreement”) dated ___________,
___, between PSMT Philippines, Inc. and PriceSmart, Inc. (together the “Co-Borrowers”)
and International Finance Corporation (“IFC”). Terms defined in the
Loan Agreement have their defined meanings whenever used in this request. 
2.       The
  Co-Borrowers irrevocably requests the disbursement on ____________, ____ (or
  as soon as practicable thereafter) of the amount of ____________ (____________)
  under the Loan (the “Disbursement”) in accordance with the provisions
  of Section 3.02 (Disbursement Procedure) of the Loan Agreement. You
  are requested to pay such amount to the account in [New York/Philippines] of
  [Name of Co-Borrowers] [Name of correspondent Bank], Account No. ____________
  at [Name and Address of Bank] [for further credit to the Co-Borrowers’
  Account No. ________ at [Name and address of Bank] in [city and country].

53

 

SCHEDULE
  2

  Page 2 of 3

 3.       There
  is enclosed a signed [, stamped,] but undated receipt for the amount of the
  Disbursement. The Co-Borrowers authorize IFC to date such receipt with the date
  of actual disbursement by IFC . 

4.       For
  the purpose of Section 5.02 (Conditions of All Disbursements) and Section
  5.03 (Co-Borrowers’ Certification) of the Loan Agreement, the
  Co-Borrowers certify as follows:

	 	(a)	no Event
      of Default and no Potential Event of Default has occurred and is continuing;
	 	 	 	 	 
	 	(b)	the proceeds
      of the Disbursement are at the date of this request needed by the Co-Borrowers
      for the purpose of the Project, or will be needed for such purpose within
      three (3) months of such date;
	 	 	 	 	 
	 	(c)	since
      the date of the Loan Agreement nothing has occurred which has or could reasonably
      be expected to have a Material Adverse Effect;
	 	 	 	 	 
	 	(d)	since
      [insert date] [the date of the Loan Agreement] neither Co-Borrower has incurred
      any material loss or liability (except such liabilities as may be incurred
      by the Co-Borrowers in accordance with Section 6.02 (Negative i)
      of the Loan Agreement);
	 	 	 	 	 
	 	 (e)	the representations
      and warranties made in Article IV (Representations and Warranties)
      of the Loan Agreement are true on the date of this request and will be true
      on the date of Disbursement with the same effect as if such representations
      and warranties had been made on and as of each such date [(but in the case
      of Section 4.01(c), without the words in parenthesis)];
	 	 	 	 	 
	 	(f)	the proceeds
      of the Disbursement are not in reimbursement of, or to be used for, expenditures
      in the territories of any country which is not a member of the World Bank
      or for goods produced in or services supplied from any such country;
	 	 	 	 	 
	 	(g)	after
      giving effect to the Disbursement, neither Co-Borrower will be in violation
      of: 
	 	 	 	 	 
	 	 	(i)	its Charter;
	 	 	 	 	 
	 	 	(ii)	any provision
      contained in any document to which either Co-Borrower is a party (including
      the Loan Agreement) or by which either Co-Borrower is bound; or

54

 

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  Page 3 of 3  

	 	 	 	 	 
	 	 	(iii)	any law,
      rule, regulation, Authorization or agreement or other document binding on
      the Co-Borrowers directly or indirectly, limiting or otherwise restricting
      the Co-Borrowers’ borrowing power or authority or its ability to borrow;
      and 
	 	 	 	 	 
	 	(h)	after
      giving effect to the Disbursement:
	 	 	 	 	 
	 	 	(i)	the Current
      Ratio would not be less than 1.2; and
	 	 	 	 	 
	 	 	(ii)	the Long-term
      Debt to Equity Ratio would not exceed 50:50,
	 	 	 	 	 
	 	(i)	that Disbursement
      is being made pro rata with the disbursement each of the Parallel
      Loans provided for in the Parallel Loan Agreements and any other senior
      loan forming part of the Financial Plan;

       The
  above certifications are effective as of the date of this Request for Disbursement
  and shall continue to be effective as of the date of the Disbursement. If any
  of these certifications is no longer valid as of or prior to the date of the
  requested Disbursement, the Co-Borrowers undertake to immediately notify IFC.

	 	 
	 	Yours
      truly,
	 	 	 
	 	[NAME
      OF CO-BORROWERS] 
	 	 	 
	 	 	 
	 	By	 
	 	 	

	 	 	Authorized
      Representative
	 	 	 

Copy to: Manager,
  Financial Operations Unit

            International Finance
  Corporation

55

 

SCHEDULE
  3

  Page 1 of 1 

FORM
  OF LOAN DISBURSEMENT RECEIPT

[PSMT’s
  Letterhead]

International Finance Corporation

2121 Pennsylvania Avenue, N.W.

Washington, D.C. 20433

United States of America 
Attention:
  Manager, Financial Operations Unit

Ladies and Gentlemen: 
Investment No. 11213

  Disbursement Receipt No. [        
  ] (Loan)

        We,
  PSMT Philippines, Inc. and PriceSmart, Inc., hereby acknowledge receipt on the
  date hereof, of the sum of ___________ (___) disbursed to us by International
  Finance Corporation (“IFC”) under the Loan of __________ (___) provided
  for in the Loan Agreement dated ______, ____ between our company and IFC.

	 	 
	 	Yours
      truly,
	 	 	 
	 	[NAME
      OF CO-BORROWERS] 
	 	 	 
	 	 	 
	 	By	 
	 	 	

	 	 	Authorized
      Representative***
	 	 	 

56

 

SCHEDULE
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  Page 1 of 2 

FORM OF SERVICE OF PROCESS LETTER

[Letterhead
  of Agent for Service of Process]

 [Date]

 International Finance
  Corporation

  2121 Pennsylvania Avenue, N.W.

  Washington, D.C. 20433

  Attention: Director,
  Central and East Asia Department

                     Re:
  New York, New York State, United States of America Dear Sirs:

       Reference
  is made to Section 5.01(n) of the Loan Agreement to be entered into (the “Loan
  Agreement”) between PriceSmart, Inc. and PS Philippines, Inc.
  (together the “Co-Borrowers”) and International Finance
  Corporation (“IFC”). Unless otherwise defined herein,
  capitalized terms used herein shall have the meaning specified in the Loan Agreement.

       Pursuant
  to Section 8.05(d) (Applicable Law and Jurisdiction) of the Loan Agreement,
  the Co-Borrowers have irrevocably designated and appointed the undersigned,
  [CT Corporation System,] with offices currently located at [111 Eighth Avenue,
  13th Floor, New York, New York 10011,] as its authorized agent to
  receive for and on its behalf service of process in any legal action or proceeding
  with respect to the Loan Agreement and the other Transaction Documents to which
  it is a party in the courts of the United States of America for the Southern
  District of New York.

       The
  undersigned hereby informs you that it has irrevocably accepted that appointment
  as process agent as set forth in Section 8.05(d) of the Loan Agreement from
  _______ until December 31, 2012 and agrees with you that the undersigned (i)
  shall inform IFC promptly in writing of any change of its address in New York,
  (ii) shall perform its obligations as such process agent in accordance with
  the relevant provisions of Section 8.05 (Applicable Law and Jurisdiction)
  of the Loan Agreement, and (iii) shall forward promptly to the Co-Borrowers
  any legal process received by the undersigned in its capacity as process agent.

57

 

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  Page 2 of 2  

       As
  process agent, the undersigned and its successor or successors agree to discharge
  the above-mentioned obligations and will not refuse fulfillment of such obligations
  as provided under Section 8.05 (d) of the Loan Agreement.

	 	 
	 	Yours
      truly,
	 	 	 
	 	 [CT Corporation
      System]
	 	 	 
	 	 	 
	 	By	 
	 	 	

	 	 	Title:
	 	 	 

cc: [Co-Borrowers]

58

 

SCHEDULE
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  Page 1 of 2 

MATTERS TO BE COVERED IN LEGAL OPINIONS

 PART I: The legal opinion
  of counsel in the Philippines should cover the following matters:

	 	(a)	the organization,
      existence and corporate power and authority of PSPH and its authorized and
      subscribed share capital;
	 	 	 
	 	(b)	in relation
      to PSPH, the matters referred to in subsections (a), (c), (d), and (e) of
      Section 5.01 (Conditions of First Disbursement) of the Loan Agreement;
	 	 	 
	 	(c)	 the title
      of PSPH to, or other interest of PSPH in, the assets which are the subject
      of the IFC Security; 
	 	 	 
	 	(d)	 the title
      of PSPH’s shareholders in their shares in the PSPH;  
	 	 	 
	 	(e)	with respect
      to PSPH, the authorization, execution, validity and enforceability of this
      Agreement and each of the other Transaction Documents and any other documents
      necessary or desirable to the implementation of any of those agreements
      or documents; 
	 	 	 
	 	(f)	the compliance
      with all obligations referred to in Section 3.16(a) (Expenses);
	 	 	 
	 	(g)	the priorities
      or privileges, if any, that creditors of PSPH, other than IFC, may have
      by reason of law;
	 	 	 
	 	(h)	IFC’s repatriation
      rights in respect of the Loan; and
	 	 	 
	 	(i)	such other
      matters relating to the transactions contemplated by this Agreement as IFC
      reasonably requests.

59

 

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  Page 2 of 2

 PART II: The legal opinion
  of PSMT’s counsel in San Diego, California should cover the following matters:

	 	(a)	the organization,
      existence and corporate power and authority of PSMT and its authorized and
      subscribed share capital;
	 	 	 
	 	(b)	the matters
      referred to in subsections (a), (c), (d), and (e) of Section 5.01 (Conditions
      of First Disbursement) of the Loan Agreement;
	 	 	 
	 	(c)	the title
      of PSMT to, or other interest of PSMT in, the assets which are the subject
      of the IFC Security;
	 	 	 
	 	(d)	the authorization,
      execution, validity and enforceability of this Agreement and each of the
      other Transaction Documents and any other documents necessary or desirable
      to the implementation of any of those agreements or documents;
	 	 	 
	 	(e)	the compliance
      with all obligations referred to in Section 3.16(a) (Expenses);
	 	 	 
	 	(f)	the priorities
      or privileges, if any, that creditors of PSMT, other than IFC, may have
      by reason of law;
	 	 	 
	 	(g)	such other
      matters relating to the transactions contemplated by this Agreement as IFC
      reasonably requests.
	 	 	 
	PART III:
      The legal opinion of IFC’s counsel in New York should cover the following
      matters:
	 	 	 
	 	(a)	the authorization,
      execution, validity and enforceability of this Agreement, the Amended Escrow
      Account Agreement and the Pledge Agreement and any other documents necessary
      or desirable to the implementation of any of those agreements or documents;
	 	 	 
	 	(b)	the security interest
      pursuant to the Pledge Agreement has been duly created and perfected as
      first ranking security interests in all assets and rights which are the
      subject of the Pledge Agreement;
	 	 	 
	 	(c)	the security interest
      pursuant to the Original Escrow Agreement remains perfected as a first ranking
      security interest in all assets and rights which are the subject of the
      Original Escrow Agreement; and
	 	 	 
	 	(d)	such other matters
      relating to the transactions contemplated by this Agreement as IFC reasonably
      requests.
	 	 	 

60

 

SCHEDULE 6

  Page 1 of 2

FORM
  OF LETTER TO EACH CO-BORROWER’S AUDITORS

[PSMT/PSPH’s Letterhead]

 [Date]

 [NAME OF AUDITORS] 

  [ADDRESS]

 

 Ladies and Gentlemen:
  

       We
  hereby authorize and request you to give to International Finance Corporation
  of 2121 Pennsylvania Avenue, N.W., Washington, D.C. 20433, United States of
  America (“IFC”), all such information as IFC may reasonably request
  with regard to the financial statements of the undersigned company, both audited
  and unaudited. We have agreed to supply that information and those statements
  under the terms of an Loan Agreement between the undersigned company and IFC
  to be entered into shortly hereaft (the “Loan Agreement”). For your
  information we enclose a copy of the latest draft of the Loan Agreement.

       We
  authorize and request you to send two copies of the audited accounts of the
  undersigned company to IFC to enable us to satisfy our obligation to IFC under
  Section 6.03(b)(i) (Affirmative Covenants) of the Loan Agreement. When submitting
  the same to IFC, please also send, at the same time, a copy of your full report
  on such accounts in a form reasonably acceptable to IFC.

     Please
  note that under Section 6.03(b)(ii) and (iii) and Section 6.03(c) of the Loan
  Agreement, we are obliged to provide IFC with:

       (a)       a
  copy of the annual and any other management letter or other communication from
  you to the undersigned company or its management commenting on, among other
  things, the adequacy of the undersigned company’s financial control procedures
  and accounting and management information system; and

       (b)       a
  report by you certifying that, based upon its audited financial statements,
  the undersigned company was in compliance with the financial covenants contained
  in Section 6.02 (Negative Covenants) of the Loan Agreement as at the
  end of the relevant Financial Year or, as the case may be, detailing any non-compliance.

       Please
  also submit each such communication and report to IFC with the audited accounts.

       For
  our records, please ensure that you send to us a copy of every letter which
  you receive from IFC immediately upon receipt and a copy of each reply made
  by you immediately upon the issue of that reply.

	 	 
	 	Yours
      truly,
	 	 	 
	 	[NAME
      OF CO-BORROWERS] 
	 	 	 
	 	 	 
	 	By	 
	 	 	

	 	 	Authorized
      Representative
	 	 	 

61

 

Enclosure

	 	 	 
	cc:	Director

        [Name of Department]

        International
        Finance Corporation

        2121 Pennsylvania Avenue, N.W.

        Washington, D.C. 20433

        United States of America

62

 

 SCHEDULE
  7

  Page 1 of 2

FORM
  OF CO-BORROWERS’ CERTIFICATION ON DISTRIBUTION OF DIVIDENDS

[PSMT’s Letterhead]

	International
      Finance Corporation

      2121 Pennsylvania Avenue, N.W.

      Washington, D.C. 20433	[Date]	 
	Attention:
      _______________	
      Re: [Country/_________] 	 
	 	 	 

Dear Sirs: 

1.       Please
  refer to the Loan Agreement (the “Loan Agreement”) dated ____________,
  ____ between PriceSmart, Inc. and PSMT Philippines, Inc. (together the “Co-Borrowers”)
  and International Finance Corporation (“IFC”). Terms defined in
  the Loan Agreement have their defined meanings whenever used in this request.
  

2.       This
  is to inform you that [PSMT/PSPH] plans a distribution of dividends to its shareholders
  in the aggregate amount of ______________ (______), such distribution to commence
  on or about _________, ___. Pursuant to Section 6.02(a) (Negative Covenants)
  of the Loan Agreement, the Co-Borrowers hereby certify that, as at the date
  hereof:

	 	(a)	the proposed
      distribution will be entirely out of retained earnings and such retained
      earnings do not include any amount resulting from the revaluation of any
      of the Co-Borrowers’ assets; 
	 	 	 	 	 
	 	(b)	no Event
      of Default or Potential Event of Default has occurred and is continuing;
	 	 	 	 	 
	 	(c)	after
      giving effect to the proposed distribution:
	 	 	 	 	 
	 	 	(i)	the Current
      Ratio would be at least 1.2;
	 	 	 	 	 
	 	 	(ii)	the Long-term
      Debt to Equity Ratio will not be in excess of 50:50; and
	 	 	 	 	 
	 	 	(iii)	 the Long-term
      Debt Service Coverage Ratio will not be less than 1.3.

3.       The
  Co-Borrowers undertake not to give effect to the proposed distribution or any
  part thereof if, at the time of so doing or after giving effect to it, the Co-Borrowers
  could not certify the matters referred to in section 2 of this certification.
  

	 	 
	 	Yours
      truly,
	 	 	 
	 	[NAME
      OF CO-BORROWERS] 
	 	 	 
	 	 	 
	 	By	 
	 	 	

	 	 	Authorized
      Representative
	 	 	 

63

 

SCHEDULE
  8

  Page 1 of __ 

FORM
  OF PROGRESS REPORT RE: PROJECT IMPLEMENTATION

The Co-Borrowers
  shall provide an overview of the Project and highlight the major events during
  the period covered in a manner similar to, and deemed acceptable by IFC, the
  overview provided pursuant to PSMT’s obligations under the LAC Agreements.

The Co-Borrowers
  shall provide such further information in relation to such overview as IFC may
  reasonably require.

64

 

SCHEDULE
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  Page 1 of 1

INFORMATION
  TO BE INCLUDED IN ANNUAL REVIEW OF OPERATIONS

	 	 	 
	[(1)	Sponsors
      and Shareholdings. Information on significant changes in share ownership
      of Co-Borrowers, the reasons for such changes, and the identity of major
      new shareholders.
	 	 	 
	(2)	Country
      Conditions and Government Policy. Report on any material changes in local
      conditions, including government policy changes, that directly affect the
      Co-Borrowers (e.g. changes in government economic strategy, taxation, foreign
      exchange availability, price controls, and other areas of regulations.)
	 	 	 
	(3)	Management
      and Technology. Information on significant changes in (i) the Co-Borrowers’
      senior management or organizational structure, and (ii) technology used
      by the Co-Borrowers, including technical assistance arrangements.
	 	 	 
	(4)	Corporate
      Strategy. Description of any changes to the Co-Borrowers’ corporate or operational
      strategy, including changes in products, degree of integration, and business
      emphasis.
	 	 	 
	(5)	Markets.
      Brief analysis of changes in Co-Borrowers’ market conditions (both
      domestic and export), with emphasis on changes in market share and degree
      of competition.
	 	 	 
	(6)	Operating
      Performance. Discussion of major factors affecting the year’s financial
      results (sales by value and volume, operating and financial costs, profit
      margins, capacity utilization, capital expenditure, etc.).
	 	 	 
	(7)	  Financial
      Condition. Key financial ratios for previous year, compared with ratios
      covenanted in the Loan Agreement. 

65

 

SCHEDULE
  10

 FORM OF ANNUAL
  MONITORING REPORT

 

Environmental
  and Social Performance

  Annual Monitoring Report (AMR)

PSPH

  PHILIPPINES

  IFC PROJECT NUMBER
  11213

 

 REPORTING
  PERIOD: FROM ___________ TO_____________ 

AMR SUBMISSION
  DATE: ____________

66

 

ANNUAL
  MONITORING REPORT

  TABLE OF CONTENTS

	 	 	 
	Section	Title	Page
      Number
	 	 	 
	1.	Preparation
      Instructions	67
	2.	PS PHILS
      Certification	68
	3.	Significant
      Incidents Report 	69
	4.	Other
      Information and Feedback	69
	5.	Sampling
      and Measurement Reports 	71
	 	 	 
	Annexes	 
	1.	Potable
      Water Monitoring Report	 
	2.	Liquid
      Effluent Discharges Monitoring Report	 
	3.	Occupational
      Health and Safety Incidents Report	 
	4.	Solid
      Waste Generation and Disposal Report	 
	 	 	 
	Attachments	 	 
	A	Pollution Prevention
      and Abatement Handbook, Part III: Monitoring	 

67

 

SECTION
  1: PREPARATION INSTRUCTIONS

1.1 PS PHILS Obligation
To Report Environmental and Social Performance 
IFC’s
  Investment Agreement covenants require PS PHILS to prepare an Annual Monitoring
  Report (AMR) for PS PHILS facilities and operations. This document comprises
  IFC’s preferred format for environmental and social performance reporting.

1.2 When
  PS PHILS is Required To Report

IFC’s
  Investment Agreement requires designated PS PHILS personnel to complete and
  submit annual environmental and social monitoring reports in compliance with
  the schedule stipulated in the Investment Agreement.

The following
  PS Phils locations are covered by the AMR reporting requirements:

	Fort Bonifacio
    Store
	 Ortigas
    Store
	 Congressional
    Store
	 Alabang
    Store
	 Aseana
    Store

1.3 What PS PHILS
  is Required to Report 

PS PHILS must report qualitative
  (see Sections 2, 3 and 4) and quantitative (see Section 5) project performance
  data each year of the investment for the environmental and social monitoring
  parameters included in this report format. Specifically, the AMR must incorporate
  the following elements.

	1.3.1	Certification
      of the validity and representative ness of the information provided in the
      AMR (Section 2); 
	 	 	 
	1.3.2	A description
      of all significant environmental, health & safety, and social incidents
      that occurred during the reporting period (Section 3);
	 	 	 
	1.3.3	Provision
      of additional information about PS PHILS activities that IFC should know
      about (e.g. awards, initiatives, etc.) (Section 4);
	 	 	 
	 1.3.4	 Quantitative
      performance monitoring data summaries1 in comparison to appropriate
      World Bank Group (WBG) and International Finance Corporation (IFC) guidelines,
      and Philippine requirements (Section 5); and, 
	 	 	 
	1.3.5	An explanation
      of all violations of WBG/IFC guidelines or Philippine regulatory limits
      that have occurred, the cause of the exceedance, and the corresponding corrective
      measures planned or underway to prevent future occurrences (Section 6).
    
	 	 	 
	 	 	 
	
	 
	1
      AMRs should incorporate data summaries only. Raw analytical data upon which
      summaries are based should not be submitted with this AMR but must be preserved
      by the sponsor and presented to IFC upon demand.

68

 

SECTION
  2:
  PS PHILS CERTIFICATION

	 	 	 
	2.1	IFC Project
      Identification: PS PHILS
	 	 	 
	2.2	IFC Project
      Sponsor: PSMT Philippines Inc (PS Phils) and PSMT
	 	 	 
	2.3	IFC Investment
      Number: 11213
	 	 	 
	2.4	 AMR reporting
      period: From _______________ to _______________
	 	 	 
	2.5	PS PHILS
      authorized representative: ________________________________________________________________
	 	 	 
	2.6	Contact
      telephone #: (country code-city code-local telephone number):_____________________________________________
	 	 	 
	2.7	Contact
      fax #: (country code-city code-local telephone number):_____________________________________________
	 	 	 
	2.8	Contact
      e-mail address: _____________________________________________
	 	 	 
	2.9	PS PHILS
      web page addresses (if applicable): www.___________._______
	 	 	 
	2.10	 I certify
      that the data contained in this AMR completely and accurately represent
      PS PHILS operations during this reporting period. I further certify that
      analytical data summaries2 incorporated into Section 5 are based
      upon data collected and analyzed in a manner consistent with the World Bank
      Group’s Pollution Prevention and Abatement Handbook, Monitoring.3
	 	 

	 	 
	

	PS PHILS
      Employee Name	Signature

	 	 	 
	
	 
	2
      Raw analytical data upon which summaries are based should not be submitted
      with this AMR but must be preserved by PS PHILS and presented to IFC upon
      demand.
	3
      See Attachment A

69

 

SECTION
  3: REPORT
  OF SIGNIFICANT EVENTS AND ISSUES

3.1 Reporting Events

PS PHILS personnel
  are required to report all environmental, health and safety and social events4
  that may have caused damage; brought about injuries or fatalities or other health
  problems; attracted the attention of outside parties; generated nuisance complaints
  (e.g. for littering, noise or traffic congestion), affected site employees or
  adjacent populations; affected cultural property; or created potential liabilities
  for PS Phils.

Indicate in
  the table below whether any such incident has occurred at PS Phils sites during
  the reporting period.

	

	Site	Incident
      to report (Yes/No)
	

	Fort Bonifacio
      Store	 
	

	Ortigas
      Store	 
	

	Congressional
      Store	 
	

	Alabang
      Store	 
	

	Aseana Store	 
	

3.2 Describing
  Events

Please provide
  separate reports for each incident that occurred during the reporting period.
  Attach photographs, plot plans, newspaper articles and all relevant supporting
  information that IFC will need to understand the incident and its resolution.
  

 The description
  of each significant event should contain the following sections: 

	 	a)	Date
      of event
	 	b)	Description
      of the event5 
	 	c)	Affected
      people or environment
	 	d)	Corrective
      actions
	 	e)	Reports
      sent to IFC and/or to Philippine regulatory agencies
	 	f)	Repairs,
      clean up or other remedial measures
	 	g)	Provide
      actual or estimated cost of repair, clean up or other remedial measures
	 	h)	Lessons
      learned and included in employee training; preventive measures or process
      changes instituted to prevent reoccurrence
	 	i)	Any limiting
      factors which hinder PS Phils’ ability to prevent the type of incident
      from re-occurring.

SECTION
  4: OTHER INFORMATION AND
  FEEDBACK

Provide any
  additional information including the following6.

	
	 
	4
      Examples of significant incidents follow. Chemical and/or hydrocarbon materials
      spills; fire, explosion or unplanned releases; industrial injuries; fatalities
      including transportation; ecological damage/destruction; local population
      disruption; disruption of emissions or effluent treatment; legal/administrative
      notice of violation; penalties, fines, or increase in pollution charges;
      negative media attention; chance cultural finds; labor unrest or disputes.
	5Provide
      additional sheets as needed to completely describe the significant incident.
	6Provide
      additional sheets as needed for complete information.

70

 

	 	 
	|_|	Describe
      ongoing public consultation or community development initiatives:
    
	 	 
	|_|	In detail,
      describe print or broadcast media attention given to PS PHILS during this
      reporting period: 
	 	 
	|_|	In detail,
      describe interactions with non-governmental organizations (NGOs) or public
      scrutiny of PS PHILS: 
	 	 
	|_|	Describe
      training and management initiatives on environmental or social issues
	 	 
	|_|	Describe
      PS PHILS public relations efforts on environmental or social issues 

71

 

SECTION
  5: SAMPLING AND MEASUREMENT
  REPORTS

For each of
  the five PS Phils sites, please provide the following data.

5.1
  POTABLE WATER SUPPLY

PS PHILS is
  required to collect representative samples of potable water supplied for PS
  PHILS personnel and all PS PHILS processes, submit these samples for laboratory
  analysis and report the results to IFC.

The reporting format
for water supply testing appears in Annex 1
5.2 WASTEWATER
  DISCHARGES

For sites
  where PS Phils has installed its own wastewater treatment system (e.g. Ortigas
  and Congressional), PS Phils is required to collect representative samples of
  wastewater discharges, submit these samples for laboratory analysis and report
  the results to IFC. This allows IFC to verify the performance of the treatment
  system. Please indicate below which sites have dedicated wastewater treatment
  systems.

	

	  	Site	Dedicated
      system?	Discharges
      to?
	

	 	Fort Bonifacio
      Store	 	 
	

	 	Ortigas
      Store	Yes	 
	

	 	 Congressional
      Store	Yes	 
	

	 	Alabang
      Store	 	 
	

	 	Aseana
      Store	 	 
	

The
  reporting format for wastewater testing appears in Annex 2.

5.3
  OCCUPATIONAL HEALTH AND SAFETY

PS PHILS personnel
  are required to monitor, record, and report occupational health and safety incidents
  and workplace conditions and report results to IFC.

The reporting format
for occupational health and safety appears in Annex 3
5.4 SOLID WASTE
  MANAGEMENT

PS PHILS personnel
  are required to monitor collection and disposal of solid waste and report the
  measurement results to IFC. This should include data on recycling volumes.

The reporting format
for solid waste management appears in Annex 4 
5.5 NON-COMPLIANCE
  TO PHILIPPINE OR IFC REQUIREMENTS

If any of
  the above reports indicate non-compliance to Philippine regulations or IFC guideline
  limits, please indicate (1) the likely reason for the non-compliance and (2)
  the corrective actions PS Phils proposes to ensure compliance.

72

 

Annex 1.
  Potable Water Monitoring Report

 Please provide
analysis for each store 

---------------------------------------------------------------------------------------------------------------------------------------------------
 Sample Collection     Required Laboratory Analysis for Collected Samples        WBG/IFC          PS PHILS        Philippine         PS PHILS
   and Analysis                                                                  Maximum       Performance in     Regulatory      Performance in
     Frequency                                                                   Levels(7)      WBG/IFC units  Limits and Units  Philippine units
                                                                                               Annual average                   Annual average of
                                                                                                  of weekly                       weekly samples
                                                                                                   samples
---------------------------------------------------------------------------------------------------------------------------------------------------

                                  Store: Fort Bonifacio, Ortigas, Congressional, Alabang, Aseana (please specify)
---------------------------------------------------------------------------------------------------------------------------------------------------
                   Potable Water Weekly  Monitoring Parameters
---------------------------------------------------------------------------------------------------------------------------------------------------
                   Reporting Year                                                                   Year:                       Year:
---------------------------------------------------------------------------------------------------------------------------------------------------
     Annually      PH                                                             7.0-8.5
---------------------------------------------------------------------------------------------------------------------------------------------------
     Annually      Fecal coliform bacteria, Most Probable Number (MPN) or        < 1 /100 ml       /100 mls
                   plate count (PC)
---------------------------------------------------------------------------------------------------------------------------------------------------
                   Potable Water Annual  Monitoring Parameters
---------------------------------------------------------------------------------------------------------------------------------------------------
                   Reporting Year                                                                   Year:                       Year:
---------------------------------------------------------------------------------------------------------------------------------------------------

---------------------------------------------------------------------------------------------------------------------------------------------------
                   Toxic substances
---------------------------------------------------------------------------------------------------------------------------------------------------
      Annual       Arsenic                                                       0.05 mg/l          mg/l
---------------------------------------------------------------------------------------------------------------------------------------------------
      Annual       Cadmium                                                       0.01 mg/l          mg/l
---------------------------------------------------------------------------------------------------------------------------------------------------
      Annual       Cyanide (as CN)                                               0.05 mg/l          mg/l
---------------------------------------------------------------------------------------------------------------------------------------------------
      Annual       Lead                                                          0.1 mg/l           mg/l
---------------------------------------------------------------------------------------------------------------------------------------------------
      Annual       Mercury                                                      0.001 mg/l          mg/l
---------------------------------------------------------------------------------------------------------------------------------------------------
      Annual       Selenium                                                      0.01 mg/l          mg/l
---------------------------------------------------------------------------------------------------------------------------------------------------

7Source: International
Standards for Drinking Water, World Health Organization, 1971.

 
73

 

|_| Data Interpretation
  and Corrective Actions for Non-Compliance: 

74

 

Annex 2. Liquid Effluent Monitoring
Report

 

Please provide
analysis for each store with a dedicated wastewater treatment facility

---------------------------------------------------------------------------------------------------------------------------------------------------
 Sample Collection     Required Laboratory Analysis for Collected Samples     WBG/IFC Maximum     PS PHILS        Philippine         PS PHILS
   and Analysis                                                                   Levels       Performance in     Regulatory      Performance in
     Frequency                                                                                  WBG/IFC units  Limits and Units  Philippine units
                                                                                               Annual average                   Annual average of
                                                                                                 of monthly                      monthly samples
                                                                                                   samples
----------------------------------------------------------------------------------------------------------------------------------------------------
                                  Store: Fort Bonifacio, Ortigas, Congressional, Alabang, Aseana (please specify)
---------------------------------------------------------------------------------------------------------------------------------------------------
                   Liquid Effluent Monitoring Parameters
---------------------------------------------------------------------------------------------------------------------------------------------------
                   Reporting Year                                                             Year:                             Year:
---------------------------------------------------------------------------------------------------------------------------------------------------
    Annually       PH                                                               6-9
---------------------------------------------------------------------------------------------------------------------------------------------------
    Annually       Biochemical oxygen demand (BOD5)                               50 mg/L                  mg/L
---------------------------------------------------------------------------------------------------------------------------------------------------
    Annually       Chemical oxygen demand (COD)                                  250 mg/L                  mg/L
---------------------------------------------------------------------------------------------------------------------------------------------------
    Annually       Oil and grease                                                 10 mg/L                  mg/L
---------------------------------------------------------------------------------------------------------------------------------------------------
    Annually       Total suspended solids (TSS)                                   50 mg/L                  mg/L
---------------------------------------------------------------------------------------------------------------------------------------------------
    Annually       Total coliform bacteria, Most Probable Number (MPN) or      <= 400 /100 ml          /100 mls
                   plate count (PC)
---------------------------------------------------------------------------------------------------------------------------------------------------

 |_| Data Interpretation and Corrective Actions for Non-Compliance:
 
75

 

Annex 3. Occupational Health
and Safety Incidents Report
PS PHILS EMPLOYEES

|_|       Incident
  statistics reporting for PS PHILS personnel.

---------------------------------------------------------------------------------------------------------------------------------------------------------
 PS PHILS Occupational Health and         Number of       PS PHILS Occupational Health and Safety Incident Details(8)
       Safety Incidents                 Incidents this
                                       Reporting Period
---------------------------------------------------------------------------------------------------------------------------------------------------------

                                                          1.  Date(s) of  fatality: _________________________________
Fatalities                               __________
                                                          2. Cause of fatality: ___________________________________________________

                                                          3. Corrective or preventive measures to prevent reoccurrence:
                                                          ____________________________________________________________________

---------------------------------------------------------------------------------------------------------------------------------------------------------

                                                          1.  Date(s) of lost time accidents: _________________________________
Total Lost Time Accidents(9)             __________
                                                          2. Cause(s) of lost time accident(s):
                                                          _______________________________________________________________________

                                                          3. Corrective or preventive measures to prevent reoccurrence:
                                                          _______________________________________________________________________

---------------------------------------------------------------------------------------------------------------------------------------------------------

8Provide additional
sheets as needed.

9Incapacity
to work for at least one full workday beyond the day on which the accident or
illness occurred.
 

76

 

---------------------------------------------------------------------------------------------------------------------------------------------------------
 PS PHILS Occupational Health and         Number of       PS PHILS Occupational Health and Safety Incident Details(8)
       Safety Incidents                Incidents this
                                      Reporting Period
---------------------------------------------------------------------------------------------------------------------------------------------------------

                                                          1.       Total lost workdays this reporting period: _____________
Total number of lost workdays(10)        __________       2.       Total lost workdays last reporting period: _____________
resulting from incidents.                                 3.       Total lost workdays next to last reporting period: _____________

                                                          1.       Total man-hours worked this reporting period: _____________
                                                          2.       Incidence = total lost workdays/total hours worked
Total man-hours worked (total                             3.       Incidence this reporting period: __________
hours worked by all employees)                            4.       Incidence last reporting period: __________
during the reporting period and                           5.       Incidence next to last reporting period: __________
Incidence calculation.

---------------------------------------------------------------------------------------------------------------------------------------------------------

10Lost workdays
are the number of workdays (consecutive or not) beyond the date of injury or onset
of illness that the employee was away from work or limited to restricted work
activity because of an occupational injury or illness. 
77

 

|_| Fire
  Safety Monitoring

--------------------------------------------------------------------------------------------------------------------------------------------
    PS PHILS Fire Safety    Mandatory Frequency      Date(s)        Observed       Corrective Actions and Schedule
   Verification Activities                          Performed    Deficiencies(11)       For Implementation(12)
--------------------------------------------------------------------------------------------------------------------------------------------

1.   Fire Drills            Minimum: three (3)/year

--------------------------------------------------------------------------------------------------------------------------------------------

2.   Inspection and
     certification of fire  Minimum: one (1)/year
     detection and
     suppression electrical
     and mechanical systems.

--------------------------------------------------------------------------------------------------------------------------------------------

3.   Portable fire          Minimum: two (2)
     extinguisher           inspections/year
     inspection,
     refilling/recharging.
--------------------------------------------------------------------------------------------------------------------------------------------

11Attach additional
sheets as needed to fully describe observed deficiencies.

12Attach additional sheets as needed to fully
describe corrective actions and implementation. 
78

 

 Annex 4. Solid Waste Generation
and Disposal Report 

 |_|       Please
provide analysis for each store  

--------------------------------------------------------------------------------------------------------------------------------------------------------------
                Waste Type                  Quantities Generated(13)         Method of Storage(14)                   Disposal Method(15)
--------------------------------------------------------------------------------------------------------------------------------------------------------------
                                        Store: Fort Bonifacio, Ortigas, Congressional, Alabang, Aseana (please specify)
--------------------------------------------------------------------------------------------------------------------------------------------------------------
|X|      Paper and carton product
         containers
--------------------------------------------------------------------------------------------------------------------------------------------------------------
|X|      Plastic packaging
--------------------------------------------------------------------------------------------------------------------------------------------------------------
|X|      Other transportation packaging
         (e.g. wooden pallets)
--------------------------------------------------------------------------------------------------------------------------------------------------------------
|X|      Office and domestic waste
--------------------------------------------------------------------------------------------------------------------------------------------------------------
|X|      Car tires
--------------------------------------------------------------------------------------------------------------------------------------------------------------
|X|      Photographic chemicals
--------------------------------------------------------------------------------------------------------------------------------------------------------------
|X|      Food waste
--------------------------------------------------------------------------------------------------------------------------------------------------------------
|X|      Other (specify)
--------------------------------------------------------------------------------------------------------------------------------------------------------------

13Provide total
weight (metric tons) or volume (m3)/month and total weight (metric
tons) or volume (m3)/year.

14State
how collected waste is stored on site (e.g. drums, bins, other containers, etc.)
and any treatment rendered (e.g. solidification, filtration, etc.).

15Specify if (1) re-used, (2) sold, (3) collected for recycling (and
by whom), collected for disposal (and by whom and where disposed to e.g. municipal
landfill)  
79

 

ATTACHMENT
  A

  POLLUTION PREVENTION AND ABATEMENT
  HANDBOOK – PART III, MONITORING

 

 

 

http://wbln0018.worldbank.org/essd/essd.nsf/Docs/PPAH
  

80

 

Volume III MORTGAGE
  AGREEMENT 

       MORTGAGE
  AGREEMENT between PSPH and IFC. 

ARTICLE I.

  Definitions and Rules of Interpretation

       Section
  1.01. Certain Defined Terms. Unless otherwise defined herein,
  all capitalized terms used in this Mortgage Agreement that are undefined herein
  and are defined in the IFC Loan Agreement (including those terms incorporated
  therein by reference to another document) shall have the respective meanings
  assigned to them in the IFC Loan Agreement.

       Section
  1.02. Additional Definitions. In addition to the terms defined
  pursuant to Section 1.01 whenever used in this Mortgage Agreement, unless the
  context otherwise requires, the following terms have the following meanings:

	“Appraisal
      Report”	means
      any of the appraisal reports referred to in Section 5.02(b);
	 	 
	“Assets”	 means
        the Real Assets and the Chattel owned and to be owned by PSPH;

	 	 
	“Chattel”	means
      the assets of PSPH referred to in Section 4.02, including without limitation,
      all of the Chattel listed in Annex “B” of this Mortgage Agreement;
	 	 
	 “Chattel
      Mortgage”	means
      the mortgage or mortgages created and to be created by PSPH over the Chattel
      pursuant to Article IV and other provisions of this Mortgage Agreement;
	 	 
	“Collateral”	refers
      to all property, rights, title and interest of any kind or character covered
      by, or purported to be covered by, this Mortgage Agreement; "Collateral
      Stores" means the Ortigas Store and the Alabang Store;
	 	 
	“Collateral
      Store Sites”	means
      the land area where the Collateral Stores are located including all ancillary
      areas;
	 	 
	“Future
      Chattel”	means
      the Chattel other than those classified as Present Chattel, including without
      limitation those listed in Part 2 of Annex “B” of this Mortgage
      Agreement; 
	 	 
	 “Future
      Real Assets”	means
      the Real Assets other than those classified as Present Real Assets, including
      without limitation those listed in Part 2 of Annex “A” of this
      Mortgage Agreement;
	 	 
	“IFC
      Loan Agreement”	has the
      meaning ascribed thereto in Recital (B) of the Omnibus Agreement;
	 	 
	“Mortgage
      Supplement”	means
      a document in substantially the form of Exhibit “A” to be executed
      and registered pursuant to Sections 3.03 (b) and 4.03 (b);
	 	 
	“Mortgages”	means
      the Real Estate Mortgage and the Chattel Mortgage, together with the rights,
      benefits and remedies of IFC inherent therein or provided for herein;
	 	 

81

 

	 	 
	“Present
      Chattel”	means
      the Chattel that exist and are owned by PSPH at the time of the execution
      of this Agreement, including without limitation those listed in Part 1 of
      Annex “B” of this Mortgage Agreement;
	 	 
	 “Present
      Real Assets”	 means
      the Real Assets that exist and are owned by PSPH at the time of execution
      of this Agreement, including without limitation those listed in Part 1 of
      Annex “A” of this Mortgage Agreement;
	 	 
	 “Property”	means
      any right or interest in or to property of any kind whatsoever, whether
      real, personal or mixed and whether tangible or intangible, and regardless
      of whether owned or in existence at the date of the execution of the IFC
      Loan Agreement, or thereafter acquired or created
	 	 
	“Real
      Assets”	means
      the real assets owned and to be owned by PSPH referred to in Section 3.02,
      including without limitation, those listed in Annex “A” of this
      Mortgage Agreement;
	 	 
	“Real Estate
      Mortgage”	means the mortgage
      or mortgages created and to be created by PSPH pursuant to Article III and
      other provisions of this Mortgage Agreement;
	 	 
	“Required Collateral
      Value”	has the meaning ascribed
      thereto in Section 8.02 of this Mortgage Agreement; and  
	 	 
	“Secured Obligations”	means collectively,
      (a) the obligations of the Co-Borrowers to IFC to pay the principal of and
      interest and fees (and all other amounts owing) on the Loan and under the
      Loan Agreement, and (b) all other obligations and liabilities of the Co-Borrowers
      to IFC, whether direct or indirect, absolute or contingent, due or to become
      due, under this Mortgage Agreement or any other Transaction Document.

       Section
  1.03. Rules of Interpretation. In this Mortgage Agreement, unless
  the context otherwise requires, the rules of interpretation set forth in Section
  1.04 of the IFC Loan Agreement shall govern mutatis mutandis, as if
  this Mortgage Agreement were the “Agreement” referred to therein.

ARTICLE
  II.

  Representations and Warranties

       Section
  2.01. Representations and Warranties of PSPH. Without limiting
  the generality of Section 4.01 of the IFC Loan Agreement, PSPH further represents
  and warrants, as of the date hereof that:

	 	(a)	Ownership
      of Assets. PSPH (i) is the legal and beneficial owner, with good,
      valid, indefeasible and marketable rights, interest and title, of the Present
      Real Assets and thePresent Chattel; and (ii) will be the legal and beneficial
      owner, with good, valid, indefeasible and marketable rights, interest and
      title to the Future Real Assets and Future Chattel;
	 	 	 
	 	(b)	Freedom
      of Assets from Liens. The Present Real Assets and Present Chattel
      are and will be, and the Future Real Assets and Future Chattel will be,
      free from any Liens (including liens or retained security titles of conditional
      vendors) of any nature whatsoever;
	 	 	 
	 	(c)	Government
      Approvals. no order, consent, approval, license, authorization
      or validation of, or filing, recording or registration with, or exemption
      by, any Authorities (except for the (x) registration with the appropriate
      Authorities of the Mortgages over the Present Real Assets and Present Chattel
      after the execution of this Agreement, and (y) registration with the appropriate
      Government Authorities of the Mortgages on the Future 

82

 

	 	 	 
	 	 	Real Assets
      and Future Chattel after the execution of the Mortgage Supplements, unless
      the applicable law permits the automatic attachment and perfection of the
      Lien of the Mortgages on the Future Real Assets and Future Chattel upon
      their coming into existence and the acquisition by PSPH of ownership thereof),
      is required, (i) to authorize the execution, delivery and performance of
      this Agreement or (ii) for the legality, validity, binding effect and enforceability
      against PSPH and all third parties of this Agreement and the Mortgages;
	 	 	 
	 	 (d)	Priority
      of Mortgages. that, subject to the registrations stated in subsection
      (c) of this Section, the Mortgage constitutes a Lien of first rank in favour
      of IFC in and to the Assets, enforceable as such against PSPH, its creditors,
      and all third parties (except liens that are mandatorily preferred under
      the laws of the Philippines).
	 	 	 

        Section
  2.02. Continuing Representations. The representations and warranties
  contained in Section 2.01 shall survive the execution of this Mortgage Agreement
  and shall be deemed repeated on the date of each Disbursement of the Loan.

ARTICLE
  III.

  Real
  Estate Mortgage

       Section
  3.01. Creation of the Real Estate Mortgage. 

	 	 	 	 	 
	 	(a)	As security
      for the timely payment, discharge, observance and performance of all of
      the Secured Obligations, PSPH:
	 	 	 	 	 
	 	 	       (i)
      hereby creates, establishes and constitutes a first ranking Real Estate
      Mortgage on the Present Real Assets in favour and for the benefit of IFC;
      and
	 	 	 	 	 
	 	 	       (ii)
        hereby (x) agrees to and, to the fullest extent permitted by law, does
        create, establish and constitute a first ranking Real Estate Mortgage
        in favour and for the benefit of IFC on the Future Real Assets, upon their
        coming into existence and the acquisition by PSPH, as the case may be,
        of ownership of such Future Real Assets, and (y) further agrees that,
        to the fullest extent permitted by law and without prejudice to the obligation
        of PSPH to execute and register the Mortgage Supplements, a first ranking
        Real Estate Mortgage on the Future Real Assets shall be created, established
        and constituted upon the execution of the corresponding Mortgage Supplement
        under Section 3.03(b) in respect of each such Future Real Asset over which
        a first ranking Real Estate Mortgage is not created under the immediately
        preceding sub-clause (x), and that such first ranking Real Estate Mortgage
        shall be subject to the same terms and conditions of this Mortgage Agreement
        as are applicable to the Real Estate Mortgage on the Present Real Assets.

	 	 	 	 	 
	 	(b)	The Real
      Estate Mortgage (i) shall extend to the PSPH’s interests from time
      to time in any of the Real Assets which are not fully paid for by PSPH at
      the time of their coming into existence and upon the acquisition by PSPH
      of ownership thereof, and (ii) shall include all Property of every nature
      and description taken in exchange, substitution or replacement of the Real
      Assets, which shall be subject to the Lien of such mortgage in the same
      manner and to the same extent as if now existing and included in the Real
      Estate Mortgage on the Present Real Asset
	 	 	 	 	 
	 	(c)	The Real
      Estate Mortgage is and shall be constituted in favour and for the benefit
      of IFC and shall stand as security for the Secured Obligations in the principal
      amount of US$12,500,000.00.
	 	 	 	 	 
	       Section
      3.02. Real Assets. The Real Assets shall include all the
      Real Assets listed in Annex “A” (regardless of whether initially
      covered by the Chattel Mortgage), and shall consist of: 
	 	 	 	 	 
	 	(i)	PSPH’s
      leasehold rights over the Collateral Stores Sites;

83

 

	 	(ii)	the Collateral
      Stores, including all buildings, machinery, equipment, fixtures, structures,
      installations and other improvements and immovable property constructed,
      acquired and/or permanently attached or located now, or in the future, at
      or to either of the Collateral Stores or the Collateral Store Sites;
	 	 	 
	 	(iii)	all equipment
      and other movable assets located at the Collateral Stores, and similar property
      acquired by PSPH (regardless of whether initially covered by the Chattel
      Mortgage) which are at any time in the future attached to any of the Collateral
      Stores or the Collateral Store Sites so as to become immovable by incorporation
      or by destination, i.e., by reason of their attachment to the Real Assets;
	 	 	 
	 	(iv)	all rights,
      benefits, loss proceeds, indemnities, insurance payments and other payments
      received by or due to PSPH in lieu of, or inherent to, or in connection
      with, the Real Assets; and
	 	 	 
	 	(v)	all property
      of every nature and description taken in exchange, substitution or replacement
      of any of the Real Assets. 
	 	 	 
	       Section
      3.03. Registration of Real Estate Mortgage.
	 	 	 
	 	(a)	Prior
      to the initial Disbursement of the Loan PSPH shall, at its own cost and
      expense, (i) cause the Real Estate Mortgage on the Present Real Assets to
      be registered with the Registers of Deeds for Pasig City and Muntinlupa
      in the Philippines, (ii) perform such other acts, deeds, registrations,
      deposits and formalities necessary or advisable to give full effect to,
      ensure the validity and first ranking priority (subject to the provisions
      of Section 4.04 hereof) of, and render enforceable against PSPH, its creditors
      and all third parties, such Real Estate Mortgage and this Mortgage Agreement,
      and (iii) furnish IFC with evidence, satisfactory to IFC, that such registrations
      and all acts, deeds, deposits and formalities, as required under the preceding
      sub-sections (i) and (ii) of this Section 3.03(a) have been made and performed.
	 	 	 
	 	(b)	In accordance
      with the schedule set forth in Annex “C”, and at such other times
      as may be required by IFC, PSPH and IFC shall execute a Mortgage Supplement,
      and, within thirty (30) calendar days from such execution, PSPH shall, at
      its own cost and expense, (i) cause the Real Estate Mortgage on the Future
      Real Assets covered by such Mortgage Supplement to be registered with the
      Registers of Deeds in Pasig City and Muntinlupa, (ii) perform such other
      acts, deeds, registrations, deposits and formalities necessary or advisable
      to give full effect to, ensure the validity and first ranking priority (subject
      to the provisions of Section 4.04 hereof) of, and render enforceable against
      PSPH, its creditors and all third parties, such Real Estate Mortgage and
      Mortgage Supplement, and (iii) furnish IFC evidence satisfactory to IFC
      that such registration and all acts, deeds, deposits and formalities, as
      required under the preceding subsections (i) and (ii) of this Section 3.03(b)
      have been made and performed.

       
  Section 3.04. First Priority Ranking of the Mortgage. The Lien
  of IFC under this Agreement is and shall at all times constitute a Lien of first
  rank in favor of IFC in and to the Real Assets, prior and superior to all other
  Liens, except liens that are mandatorily preferred under the Laws of the Philippines.
  

ARTICLE
  IV.

  Chattel
  Mortgage

       Section
  4.01. Creation of the Chattel Mortgage. 

	 	(a)	As security
      for the timely payment, discharge, observance and performance of all of
      the Secured Obligations, PSPH:
	 	 	 
	 	 	       (i)
      hereby creates, establishes and constitutes a first ranking Chattel Mortgage
      on the Present Chattel in favour and for the benefit of IFC; and

	 	 	 
	 	 	 
	 	 	 
	 	 	 
	 	 	 
	 	 	 
	 	 	 
	 	 	 
	 	 	 
	 	 	 
	 	 	 

84

 

	 	 	       (ii)
      hereby (x) agrees to and, to the fullest extent permitted by law, does create,
      establish and constitute a first ranking Chattel Mortgage in favour and
      for the benefit of IFC on the Chattel, upon their coming into existence
      and the acquisition by PSPH, as the case may be, of ownership of such Chattel,
      and (y) further agrees that, to the fullest extent permitted by law and
      without prejudice to the obligation of PSPH to execute and register the
      Mortgage Supplements, a first ranking Chattel Mortgage on the Future Chattel
      shall be created, established and constituted upon the execution of the
      corresponding Mortgage Supplement under Section 4.03(b) in respect of each
      such Future Chattel over which a first ranking Chattel Mortgage is not created
      under the immediately preceding sub-clause (x), and that such first ranking
      Chattel Mortgage shall be subject to the same terms and conditions of this
      Mortgage Agreement as are applicable to the Chattel Mortgage on the Present
      Chattel.
	 	 	 
	 	(b)	The Chattel
      Mortgage (i) shall extend to the PSPH’s interests from time to time
      in any of the Chattel which are not fully paid for by PSPH at the time of
      their coming into existence and upon the acquisition by PSPH of ownership
      thereof, and (ii) shall include all Property of every nature and description
      taken in exchange, substitution or replacement of the Chattel, which shall
      be subject to the Lien of such mortgage in the same manner and to the same
      extent as if now existing and included in the Chattel Mortgage on the Present
      Chattel.
	 	 	 
	 	(c)	The Chattel
      Mortgage is and shall be constituted in favour and for the benefit of IFC
      and shall stand as security for the Secured Obligations in the principal
      amount of US$12,500,000.00.
	 	 	 
	       Section
      4.02. The Chattel. The Chattel shall include all the Chattel
      listed in Annex “B”, and shall consist of the following:
	 	 	 
	 	(i)	all equipment
      and other movable assets, and all supplies, inventories, merchandise, and
      stock in trade, as well as all additions, replacements and substitutions
      thereof, acquired or used in connection with the retail business of PSPH,
      and located at the Collateral Stores, together with all attachments, component
      parts, equipment and accessories installed thereon or affixed thereto, regardless
      of where the same are located; 
	 	 	 
	 	(ii)	all Assets
      located at the Collateral Stores, to the extent that such assets are not
      covered or coverable under the Real Estate Mortgage;
	 	 	 
	 	(iii)	all Assets
      which are covered by the Real Estate Mortgage, but are at any time in the
      future, for any reason, dismantled or removed and become immobilized;
	 	 	 
	 	(iv)	all rights, benefits,
      loss proceeds, indemnities, insurance payments and other payments received
      by or due to PSPH in lieu of, or inherent to, or in connection with, the
      Chattel,
	 	 	 
	 	(v)	all of PSPH’s
      right, title and interests in and to any contracts entered into by PSPH
      relative to the construction, operation and maintenance of the Collateral
      Stores, including, but not limited to, any contracts leasing any part of,
      or space within, the Collateral Stores to any Persons; and 
	 	 	 
	 	(vi)	all property of every
      nature and description whether now owned or hereafter acquired in exchange,
      substitution or replacement of any of the Chattel.
	 	 	 
	       Section
      4.03. Registration of Chattel Mortgage.
	 	 	 
	 	(a)	Prior to the initial
      Disbursement of the Loan, PSPH shall, at its own cost and expense, (i) cause
      the Chattel Mortgage on the Present Chattel to be registered with the appropriate
      Registers of Deeds of Pasig City, Muntinlupa City and the principal place
      of business of PSPH, (ii) perform such other acts, deeds, registrations,
      deposits and formalities necessary or advisable to give full effect to,
      ensure the validity and first ranking priority (subject to the provisions
      of Section 4.04 hereof) of, and render
	 	 	 

85

 

	 	 	enforceable
      against PSPH, its creditors and all third parties, such Chattel Mortgage
      and this Mortgage Agreement, and (iii) furnish IFC with evidence, satisfactory
      to IFC, that such registrations and all acts, deeds, deposits and formalities,
      as required under the preceding sub-sections (i) and (ii) of this Section
      4.03(a) have been made and performed.
	 	 	 
	 	(b)	In accordance
      with the schedule set forth in Annex “C”, and at such other times
      as may be required by IFC, PSPH and IFC shall execute a Mortgage Supplement,
      and, within thirty (30) calendar days from such execution, PSPH shall, at
      its own cost and expense, (i) cause the Chattel Mortgage on the Future Chattel
      covered by such Mortgage Supplement to be registered with the appropriate
      Registers of Deeds in the Philippines, (ii) perform such other acts, deeds,
      registrations, deposits and formalities necessary or advisable to give full
      effect to, ensure the validity and first ranking priority (subject to the
      provisions of Section 4.04 hereof) of, and render enforceable against PSPH,
      its creditors and all third parties, such Chattel Mortgage and Mortgage
      Supplement, and (iii) furnish IFC evidence satisfactory to IFC that such
      registration and all acts, deeds, deposits and formalities, as required
      under the preceding subsections (i) and (ii) of this Section 4.03(b) have
      been made and performed.
	 	 	 

       Section
  4.04. First Priority Ranking of the Mortgage. The Lien of IFC
  under this Agreement is and shall at all times constitute a Lien of first rank
  in favor of IFC in and to the Assets, prior and superior to all other Liens,
  except liens that are mandatorily preferred under the laws of the Philippines.

       Section
  4.05. Use of Assets. So long as no Event of Default shall have
  occurred and be continuing, PSPH shall be entitled to use and possess the Assets
  and to exercise its rights, title and interest therein, to the extent that such
  use, possession or exercise is not prohibited or restricted by the Security
  Agreement and (and without in any way limiting the provisions of) the other
  Transaction Documents and does not otherwise constitute a Default (in which
  case such prohibition or restriction shall prevail over the terms of this Section
  4.05.

ARTICLE
  V

  Covenants
  and Undertakings of the Borrower

       PSPH
  undertakes and agrees with IFC that throughout the continuance of this Mortgage
  Agreement and so long as any amount of the Secured Obligations remains outstanding,
  unless IFC otherwise agrees in writing, PSPH shall comply with its affirmative
  and negative undertakings as set forth in Article VI of the IFC Loan Agreement,
  all of which affirmative and negative undertakings are incorporated by reference
  herein as if fully set forth herein, in accordance with the terms thereof.

       Section
  5.01. Execution and Registration of Deeds in General. In consideration
  of the express intention of the parties hereto that the Mortgages shall cover
  the Assets of PSPH, whether such Assets now exist or at any time hereafter come
  into existence and are now or at any time hereafter acquired by PSPH whether
  any such later acquisition is by way of addition thereto or substitution of
  any component part thereof, together with all rights and interests of PSPH therein,
  PSPH shall, from time to time and at their own cost and expense:

	 	(a)	execute,
      deliver and register such mortgages, deeds, assignments, consents and assurances,
      including the Mortgage Supplements, satisfactory to IFC, as may be necessary
      or advisable or, without prejudice to the obligation of PSPH to do so without
      being required by IFC, as required by IFC, for the purpose of mortgaging
      (with first ranking priority), conveying and/or transferring to IFC for
      its benefit, any Assets hereafter coming into existence or acquired by PSPH
      upon the terms, provisions and conditions of this Mortgage Agreement as
      fully and completely to all legal intents and purposes as if owned by PSPH
      on the date of execution hereof and specifically described herein; and
	 	 	 
	 	(b)	execute,
      deliver and register such renewals, amendments, supplements and instruments,
      satisfactory to IFC, as may be necessary, advisable or, without prejudice
      to the 
	 	 	 

86

 

	 	 	obligation
      of PSPH to do so without being required by IFC, as required by IFC, for
      the purpose of perfecting, confirming and/or maintaining the validity, first
      priority and enforceability of the Mortgages.

       Section
  5.02. Affirmative Covenants. Without limiting any rights of
  IFC under the Transaction Documents, unless IFC shall otherwise agree in writing
  and for as long as any amount of the Secured Obligations shall remain outstanding,
  PSPH shall:

	 	(a)	Defense
      of Title and Possession. (i) warrant and defend its title to, interest
      in and/or possession of the Assets against the claims and demands of all
      Persons whomsoever, except the rightful claims of IFC pursuant to this Mortgage
      Agreement, and (ii) promptly and in any case within five (5) Business Days
      after it or any of its officers obtains knowledge of any litigation or governmental
      proceedings which could materially and adversely affect the Real Assets,
      furnish IFC a notice of such litigation or proceedings, giving full details
      thereof and containing a description of the action that PSPH has taken or
      proposes to take with respect thereto;
	 	 	 	 	 
	 	(b)	Appraisal.
      at its own cost and expense, cause the Assets to be appraised in accordance
      with Section 6.01(j)(ii) of the Loan Agreement, and promptly after every
      such appraisal provide IFC with a copy of the appraisal report (the “Appraisal
      Report”); and 
	 	 	 	 	 
	 	(c)	Further
      Acts. at all times, and at its own expense, do everything necessary
      in the reasonable judgment of IFC to
	 	 	 	 	 
	 	 	(i)	create
      and perfect the Mortgage with respect to Future Assets covered by this Mortgage
      Agreement (including, without limitation, any registration in respect of
      supplements to this Mortgage Agreement in accordance with the requirements
      of the laws in the Philippines);
	 	 	 	 	 
	 	 	(ii)	maintain
      the Lien of IFC under this Mortgage Agreement in full force and effect at
      all times, including the priority thereof;
	 	 	 	 	 
	 	 	(iii)	 keep
      the Assets, in good condition and preserve and protect the same, except
      for ordinary wear and tear, promptly make or cause to be made thereon repairs,
      restorations and replacements or, in general, do or cause to be done all
      such acts and things as may be required or necessary for the preservation
      and maintenance of the Assets; and 
	 	 	 	 	 
	 	 	(iv)	promptly
      inform IFC in writing of any loss or damage affecting the Assets, together
      with details of the extent of such loss and damage, and of any event which
      is likely to materially reduce its value. 
	 	 	 	 	 
	 	(d)	Inspections.
      permit, at PSPH’s expense, the officers or designated representatives
      of IFC, at such times and to such extent as IFC may request:
	 	 	 	 	 
	 	 	(i)	 to visit
      and inspect the Assets;
	 	 	 	 	 
	 	 	(ii)	to inspect
      and examine the records of PSPH relating to the Assets from time to time
      during regular business hours, and promptly furnish IFC such information
      as IFC may, from time to time, reasonably request;
	 	 	 	 	 
	 	(e)	Taxes,
      Duties, Fees. except when contested in good faith by appropriate
      proceedings and for which an appropriate reserve has been established (provided
      that taxes, assessments and governmental charges are paid promptly, if after
      final determination of any such action or proceeding, the tax, assessment
      or charge is upheld), PSPH shall pay and discharge on time: 
	 	 	 	 	 
	 	 	(i)	 all taxes
      (including stamp taxes, value-added taxes, transfer taxes), fees, expenses,
      or other charges payable on or in connection with (x) the execution,
	 	 	 	 	 

87

 

	 	 	 	issue,
      delivery, registration, or notarization, or for the legality, validity,
      or enforceability, of this Mortgage Agreement and any other documents related
      thereto; and (y) provide IFC copies of the official receipts for such payments.
	 	 	 	 	 
	 	 	(ii)	all taxes,
      assessments and governmental charges levied or assessed on the Assets and
      provide IFC with copies of the official receipts for such payments.
	 	 	 	 	 
	 	(f)	Appraised
      Value of Assets. maintain the value of the Assets at no less than
      the required amount under Section 7.02 (the “Required Collateral Value”),
      provided that if the value of the Assets goes below the Required Collateral
      Value, then within sixty (60) days from PSPH’s receipt of notice of
      such occurrence from IFC, PSPH shall make appropriate arrangements with
      IFC to either (i) prepay a portion of the Secured Obligations, or (ii) include
      additional properties as Assets, so that the Assets can meet the Required
      Collateral Value.
	 	 	 	 	 
	       Section
      5.03. Negative Covenants. Without limiting any rights of
      IFC under any other Transaction Documents, unless IFC shall otherwise agree
      in writing and for as long as any amount of the Secured Obligations shall
      remain outstanding, PSPH shall not: 
	 	 	 	 	 
	 	(a)	sell,
      assign, transfer, alienate, encumber, lease or otherwise dispose of any
      of the Assets except for sale of the stock in trade, merchandise and inventory
      of the Collateral Stores in the ordinary course of business;
	 	 	 	 	 
	 	(b)	use or
      permit to be used the Assets other than for the intended purpose thereof;
	 	 	 	 	 
	 	(c)	create,
      incur, assume or permit to exist any Lien, other than the Mortgages on,
      or with respect to the Assets;
	 	 	 	 	 
	 	(d)	use, maintain,
      operate or occupy, or allow the use, maintenance, operation or occupancy
      of any part of the Assets for any purpose which:
	 	 	 	 	 
	 	 	(i)	may be
      dangerous, unless safeguarded as required by law;
	 	 	 	 	 
	 	 	(ii)	violates
      any legal requirement in any material respect;
	 	 	 	 	 
	 	 	(iii)	may constitute
      a public or private nuisance resulting in a Material Adverse Effect; or
       
	 	 	 	 	 
	 	 	(iv)	may make
      void, voidable, or cancelable, or increase the premium of, any insurance
      then in force with respect to the Assets or any part thereof.
	 	 	 	 	 

ARTICLE
  VI

  Rights
  and Remedies of IFC

       Section
6.01. Right to Act for PSPH. 
	 	 	 
	 	(a)	PSPH hereby
      irrevocably appoints IFC as its attorney-in-fact, with right of substitution,
      for the purpose of carrying out the provisions of this Mortgage Agreement
      and taking any action and executing any instruments which IFC may deem necessary
      or advisable, to create and perfect, and preserve the validity, perfection
      and priority of (subject to Section 4.04) the security interest in favor
      of IFC under this Mortgage Agreement, including without limitation registering
      the Mortgages and executing and registering Mortgage Supplements should
      PSPH default in the performance of their obligations under Sections 3.03.

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	 	(b)	IFC shall,
      in the exercise of its rights and remedies hereunder, have the right, but
      not the obligation, to advance such sums of money as are necessary to give
      full effect to the provisions of the preceding paragraph and interest shall
      accrue on any such sums so advanced by IFC, from the time so advanced until
      fully paid by PSPH, at the default rate prescribed under the IFC Loan Agreement.
	 	 	 

       Section
6.02. Rights in Eminent Domain. 
	 	 	 	 	 
	 	(a)	In the
      event that the Philippines, or any Person duly authorized by law to acquire
      property by eminent domain, shall expropriate, condemn, confiscate, seize
      or requisition the title to or use of any of the Assets, then (i) all sums
      of money paid and payable to PSPH on account or in consideration of any
      such expropriation, condemnation, confiscation, seizure or requisition of
      the Assets or any part thereof shall be delivered to IFC for application
      against the Secured Obligations, and (ii) all rights and benefits accruing
      to PSPH, or any movable or immovable assets given in exchange for the Assets
      so expropriated, condemned, confiscated, seized or requisitioned shall be
      deemed part of the Assets and covered by the Mortgages. Except as aforesaid,
      this Section shall be without prejudice to any other rights and remedies
      that IFC may have hereunder, under any other Transaction Documents or under
      any law, statute or regulation now or hereafter in force.
	 	 	 	 	 
	 	(b)	PSPH hereby
      agrees and undertakes not to agree to any settlement or any compensation
      whatsoever in lieu of expropriation, condemnation, seizure or requisition
      of any of the Assets, without the prior written consent of IFC. 
	 	 	 	 	 
	 	(c)	 If for
      any reason and notwithstanding the provisions of subsection (a) of this
      Section, any such monies, rights, benefits and/or assets are directly received
      by PSPH, PSPH, as the case may be, shall hold or cause the same to be held
      for IFC, in trust, as security for the payment of the Secured Obligations
      and promptly thereafter, and without prejudice to any other rights and remedies
      that IFC may have hereunder, under any other Transaction Documents or under
      any law, statute or regulation now or hereafter in force, deliver or cause
      to be delivered the same to IFC and, in the case of monies, for application
      against the Secured Obligations. 
	 	 	 	 	 
	       Section
      6.03. Unauthorized Sale and other Disposition of Assets.
       
	 	 	 	 	 
	 	(a)	To the
      extent permitted by law, if notwithstanding the provisions of Section 5.03
      or of any other provision of any other Transaction Documents prohibiting
      or restricting the same, any of the Assets shall be sold, assigned, transferred,
      alienated, leased or in any other manner disposed of otherwise than in accordance
      with the terms hereof or with the prior written consent of IFC, any third
      party who may have acquired title to or possession of any such Assets shall
      be deemed not to have acquired the same in good faith and IFC shall be entitled
      to exercise such rights and remedies as may be available to it by law under
      the circumstances to recover possession of such Assets. The foregoing shall
      be without prejudice to the rights and remedies of IFC under the other Transaction
      Documents.
	 	 	 
	 	(b)	For all
      intents and purposes, the Mortgages shall continue in full force and effect
      under the terms and conditions hereof until the Secured Obligations shall
      have been repaid in full, notwithstanding any unauthorized sale, assignment,
      transfer, alienation, lease or other disposition of any Assets.

       Section
  6.04. Unauthorized Liens. If notwithstanding the provisions
  of Section 5.03 hereof, PSPH shall create or permit to exist any Lien, other
  than the Mortgages, on any of the Assets in favor of any third party without
  the prior written consent of IFC, the same shall, without prejudice to any rights
  and remedies that IFC may have hereunder or under any other Transaction Documents
  or under any law, statute or regulation now or hereafter in force, be and remain
  junior in rank to the Mortgages hereby created until all the Secured Obligations
  are fully paid, notwithstanding any extension of the term or amendment and modification
  of any of the terms, provisions and conditions hereof and notwithstanding any
  additional

89

 

 mortgages
  or other Liens at any time created as security for the same amounts hereby secured
  or any other amounts at a later date advanced by IFC to PSPH, all of which shall
  be and at all times remain a first ranking and senior security, in relation
  to such Lien created by PSPH in favor of such third party.

       Section
6.05. Events of Default. 
	 	 	 
	 	(a)	If an
      Event of Default shall occur and be continuing, IFC shall have all the rights
      and remedies available to it under this Mortgage Agreement and the other
      Transaction Documents with respect thereto.
	 	 	 
	 	(b)	Commencement
      of Foreclosure Proceedings. If an Event of Default shall occur
      and be continuing, IFC shall have the right, upon advance written notice
      to PSPH, to immediately commence proceedings to foreclose the Real Estate
      Mortgage or the Chattel Mortgage or both, and such foreclosure may be carried
      out, at the option of IFC, either judicially or extra-judicially, in accordance
      with applicable law.
	 	 	 
	 	(c)	Delivery
      of Possession of Assets. Promptly upon receipt of notification
      that foreclosure proceedings have been commenced, PSPH shall turn over possession
      of the Assets being foreclosed upon to IFC, or as IFC shall otherwise direct;
      provided, that if PSPH shall fail to turn over possession of any of such
      Assets as required hereunder, IFC shall be entitled and authorized to the
      extent permitted by law to repossess the same wherever they may be located
      by whichever means IFC shall determine and, to enter for that purpose any
      premises where such Assets may be located and transport them, at the expense
      of PSPH, to the place otherwise determined by IFC for turning over possession
      thereof.
	 	 	 
	 	(d)	Waiver
      of Benefits in General. PSPH agrees, to the full extent that it
      may lawfully so agree, that neither it nor anyone claiming through or under
      it, will set up, claim or seek to take advantage of any appraisement, valuation,
      stay, extension, period, redemption, or any other benefit under any law
      now or hereafter in force in the locality where the Assets subject to the
      Lien hereof are situated, in order to prevent, hinder or delay the enforcement
      or foreclosure of the Mortgages pursuant to this Mortgage Agreement, or
      the absolute sale of the Assets or any part thereof, or the final and absolute
      transfer or possession thereof, immediately after such sale, to the purchasers
      of any such Assets; and PSPH for itself and all who may at any time claim
      through or under it, hereby waive, to the fullest extent that they may lawfully
      do so, the benefit of all such laws.
	 	 	 
	 	(e)	Foreclosure
      Sale. In the event that the Real Estate Mortgage or the Chattel
      Mortgage shall be foreclosed, whether judicially or extra-judicially, any
      sheriff conducting the sale at auction, or where a direct sale is permitted
      by law, such sheriff, IFC or its duly appointed representative or any other
      authorized person shall, at the option of such Person or representative
      exercised in a commercially reasonable manner, sell the Assets individually,
      in groups or as a whole lot.

       Section
  6.06. Waiver of Redemption Right. The Borrower hereby waives
  and relinquish, to the extent permitted by law, all rights, present and future,
  that they may have by law or otherwise to redeem any of the Assets that may
  have been sold, whether in a judicial or extra-judicial foreclosure, and whether
  the sale took place at public auction or was a direct sale.

ARTICLE
  VII

  Power
  of Attorney

       Section
  7.01. Appointment and Authority of Attorney-in-fact. PSPH hereby
  irrevocably appoints IFC as its attorney-in-fact, with right of substitution,
  so that IFC or any other Person empowered and duly authorized by IFC shall,
  upon the occurrence of an Event of Default be authorized to the fullest extent
  permitted by law, without need of further authorization from PSPH, and in preservation
  and/or for the enforcement of the rights of IFC hereunder:

90

 

	 	 	 
	 	(a)	 Sale
      of Assets. to effect the sale of any of the Assets in one or more
      transactions, in accordance with Act No. 3135 as amended and/or Act No.
      1508 as amended and/or Rule 68 of the Rules of Court, and, to the extent
      permitted by law, in such other manner as may reasonably be determined by
      such attorney-in-fact, including the direct sale without public auction
      of any such Assets at such price, and upon such terms as may be determined
      by such attorney-in-fact;
	 	 	 
	 	(b)	Entry
      of Premises. to enter upon any premises where the Assets or any
      of them may be located without the need for a court order or other form
      of authority otherwise than upon the authority granted herein; 
	 	 	 
	 	(c)	Possession
      of Assets. to take and retain actual possession and control of
      any such Assets as receivers without bond or otherwise, and transport any
      of them to any location as determined by such attorney-in-fact; 
	 	 	 
	 	(d)	Repairs, Improvements,
      etc. to make any repairs, additions and improvements on and to
      the Assets at the expense of PSPH as such attorney-in-fact shall deem proper
      or necessary;
	 	 	 
	 	(e)	Administration
      of Assets. to perform acts of administration over any or all of
      the Assets including, but not limited to, collecting and receiving rental
      payments from third parties leasing any part of or any space within the
      Collateral Stores;
	 	 	 
	 	(f)	Conclusion
      of Agreements. to conclude any agreement and collect any monies
      under such agreements or otherwise due to PSPH in respect of, or generated
      through the usage of, any of the Assets; 
	 	 	 
	 	(g)	 Exercise
      of Rights. to exercise any of the rights of PSPH arising under
      or in connection with this Mortgage Agreement and the Mortgages, and to
      designate or delegate to another Person in substitution of such attorney-in-fact,
      the exercise of such rights of PSPH, and under such terms as such attorney-in-fact
      shall deem proper or necessary;
	 	 	 
	 	(h)	Collection
      of Monies. to collect, claim and receive all monies and avail of
      all benefits that accrue, and that may become due and payable to the Borrower
      under this Mortgage Agreement and the Mortgages;
	 	 	 
	 	(i)	

      Institution of
      Suits.
      to institute and maintain such suits and proceedings as such attorney-in-fact
      shall deem expedient to prevent any impairment of the Assets or to preserve
      and protect the interest of IFC;
	 	 	 
	 	(j)	Execution
      of Deed of Sale. to execute and deliver such deeds of conveyance
      or sale as may be necessary or proper for the purpose of conveying full
      title and ownership, free from any claims and rights of PSPH, to the Assets,
      after foreclosure thereof; and
	 	 	 
	 	(k)	Other
      Acts. in general, to sign such agreements and documents and perform
      such acts and things required, necessary or, in the opinion of such attorney-in-fact,
      advisable, to fully enforce the rights of IFC under this Mortgage Agreement
      and the Mortgages.

       Section
  7.02. Ratification of Attorney’s Acts. To the extent permitted
  by law, PSPH agrees to and hereby ratifies any and all acts and things performed
  or done by IFC or any of its representatives in each case, whether as PSPH’s
  attorney-in-fact or otherwise, in the exercise of any or all powers granted
  to IFC hereunder.

       Section
  7.03. Power of Attorney Coupled with Interest. This special
  power of attorney shall be deemed coupled with an interest, and cannot be revoked
  by PSPH until all of the Secured Obligations have been paid in full or satisfied.
  Upon the occurrence of an Event of Default, PSPH shall abstain from exercising
  any rights which shall be inconsistent with the exercise of the rights and functions
  herein granted to IFC as PSPH’s attorney-in-fact, provided, however, that
  nothing herein shall prevent PSPH, prior to the exercise by IFC of any such
  rights, powers and remedies and functions in accordance with this Mortgage 

91

 

Agreement,
  from undertaking the PSPH’s operations in the ordinary course of business
  to the extent not prohibited or restricted by the Transaction Documents. To
  the extent that PSPH shall receive any monies in respect of any of the Assets,
  notwithstanding the provisions of this Section, it shall be deemed to have received
  such funds for the account of IFC and shall hold the same in trust and promptly
  pay the same to IFC.

       Section
  7.04. Expenses of Attorney-in-Fact. All costs, expenses, charges
  and fees paid or incurred by IFC and/or its representatives, successors and
  assignees in the exercise of any of the powers herein granted shall be for the
  account of PSPH, and PSPH undertakes promptly on demand to reimburse IFC and/or
  its representatives, successors and assignees, as the case may be, for any monies
  paid by any of them with interest at default rate prescribed under the IFC Loan
  Agreement, from the date the same shall have been incurred until actually paid.

ARTICLE
  VIII

  Release
  of Mortgage and Required Collateral Value

       Section
  8.01 Release. Upon the full payment of the Secured Obligations,
  this Mortgage Agreement shall terminate, and IFC, at the written request and
  expense of PSPH, will promptly execute and deliver to PSPH, the proper instrument
  (in substantially the form in Exhibit B) acknowledging the termination of this
  Mortgage Agreement, and will promptly release from the Mortgage such of the
  Assets in the possession of IFC as have not been theretofore sold or otherwise
  foreclosed, applied or released pursuant to this Mortgage Agreement.

       Section
  8.02 Required Value of Assets; Partial Release. PSPH shall ensure
  that the appraised value of the Assets shall, at any given time, equal at least
  one hundred fifty percent (150%) of the aggregate amount of all the Secured
  Obligations outstanding at such given time (the “Required Collateral Value”).

ARTICLE
  IX

  Miscellaneous
  Provisions

       Section
  9.01. (a) Continuing Security. PSPH hereby duly notes and agrees
  that the security hereby created in favor of IFC in the form of a Real Estate
  Mortgage and the Chattel Mortgages in accordance with the provisions of this
  Mortgage Agreement shall be a continuing security and shall remain in full force
  and effect until all of the Secured Obligations shall have been fully paid in
  accordance with the provisions of the other Transaction Documents and this Mortgage
  Agreement. Accordingly, the validity and enforceability of the Mortgages hereunder
  shall not be affected or impaired by any of the following: any extension of
  time, forbearance or concession given to any of the Co-Borrowers; any assertion
  of, or failure to assert, or delay in asserting, any right, power or remedy
  against the Co-Borrowers, or in respect of any other security for any of the
  Secured Obligations; any modification or amplification of the provisions of
  the other Transaction Documents or this Mortgage Agreement or of any other agreement
  between any or both of the Co-Borrowers and IFC; any failure of any or both
  of the Co-Borrowers to comply with any requirement of any law, regulation or
  order; the dissolution, liquidation, reorganization or any other alteration
  of the legal structure of any or both of the Co-Borrowers; any purported or
  actual assignment of the Loan by IFC to any other Person; or any other circumstance
  (other than complete payment and performance by the Co-Borrowers of all the
  Secured Obligations) which might otherwise constitute a legal or equitable discharge
  of a security.

       (b)       Partial
  Security. It is hereby agreed that the security created in accordance
  with the provisions of this Mortgage Agreement shall be construed as a partial
  security for the Secured Obligations, and is in addition to any other security
  that IFC may, now or in the future, obtain to secure the same obligations. Accordingly,
  in the event that the monies at any time realized by IFC in the judicial or
  extra-judicial foreclosure of the Real Estate Mortgage on any of the Real Assets
  or the Chattel Mortgage on any of the Chattel and/or in the exercise of any
  of their rights and powers hereunder shall not be sufficient to pay and discharge
  all the Secured Obligations, any remaining unpaid balance thereof shall remain
  due and payable on demand by IFC, until fully paid and all rights, powers and
  remedies of IFC in respect thereof are hereby reserved.

       Section
  9.02. Rescission of Payment. This Mortgage Agreement shall continue
  to be effective or 

92

 

be reinstated,
  as the case may be, if at any time, payment, or a part thereof, of the Secured
  Obligations, is rescinded or must otherwise be restored or returned by IFC,
  upon the insolvency, bankruptcy or reorganization of any of the Co-Borrowers
  or otherwise, all as though such payment had not been made.

       Section
  9.03. (a) Application of Proceeds of Mortgage. All monies realized
  and received by IFC in the exercise of its rights, powers and remedies hereunder,
  including without limitation, any proceeds of insurance, expropriation or otherwise
  in respect of the Assets pursuant to the provisions of this Mortgage Agreement
  shall be applied in accordance with Section 3.10 (Allocation of Partial Payments)
  of the IFC Loan Agreement. For the avoidance of doubt, it is understood that
  the Co-Borrowers shall remain liable to the extent of any deficiency between
  the amount of the proceeds of the Assets and the aggregate amount of the Secured
  Obligations.

       (b)       Conversion
  to Required Currency. To the extent that the amounts due and payable
  to IFC are in a currency or currencies other than the currency of payment required
  under the IFC Loan Agreement, such currency or currencies shall for the purposes
  hereof be converted into the required currency of payment.

       Section
  9.04. Further Assurances. From time to time while this Mortgage
  Agreement is in force and effect, PSPH shall promptly, at the request of IFC,
  execute such documents, acts or powers as IFC may deem necessary or advisable
  to give full effect to any of its provisions.

       Section
  9.05. Taxes, Fees, etc. on Execution, Registration, etc. PSPH
  shall pay all taxes (including stamp taxes), duties, fees, expenses or other
  charges payable on or in connection with the execution, issue, delivery, registration
  and notarization of this Mortgage Agreement and any document, act and registration
  performed pursuant hereto, and shall, upon notice from IFC reimburse IFC for
  any such taxes, duties, fees, expenses or other charges paid after notice to
  PSPH by IFC.

       Section
  9.06.      (a) Rights and Remedies Cumulative.
  The rights, powers and remedies of IFC provided for in this Mortgage Agreement
  are not exclusive of, but are in addition to, any other rights and remedies
  that IFC may have in law or under any other Transaction Documents. In addition,
  such rights, powers and remedies of IFC hereunder are granted for the exclusive
  benefit of IFC, and it is IFC’s prerogative to exercise any of such rights,
  powers and remedies in its discretion, but it shall have no obligation to do
  so; nor shall IFC be liable to PSPH or any other Person for any action taken
  or not taken by it pursuant to this Mortgage Agreement. One or more exercises
  of the powers and rights herein granted shall not extinguish or exhaust such
  powers until the Assets and all other property now or hereafter subject hereto
  or to any instrument now or hereafter evidencing, securing or relating to the
  Secured Obligations, is sold or the Secured Obligations are paid in full. If
  the Secured Obligations are now or hereafter further secured by any mortgages,
  chattel mortgages, pledges, contracts of guaranty, assignments or other security,
  IFC may exhaust the remedies granted under any of the said security instruments,
  either concurrently or independently, and in such order as IFC, in the exercise
  of its absolute discretion, may determine.

       (b)       No
  Waiver. No course of dealing and no delay in exercising, or omission
  to exercise, any right, power or remedy accruing to IFC or its attorney-in-fact
  upon any default or other circumstance under the Real Estate Mortgage, the Chattel
  Mortgage and/or this Mortgage Agreement shall impair any such right, power or
  remedy or be construed to be a waiver thereof or an acquiescence therein; nor
  shall the action of IFC or its attorney-in-fact in respect of such default or
  circumstance, or any acquiescence by it thereto, affect or impair any right,
  power or remedy of IFC or its attorney-in-fact in respect of any other default
  or circumstance, whether similar or not.

       (c)       Amendments,
  etc. with respect to the Loans. PSPH shall remain obligated hereunder,
  and the Assets shall remain subject to the Lien created hereunder, notwithstanding
  that, without any reservation of rights against PSPH, the Transaction Documents
  and any other documents executed and delivered in connection therewith may be
  amended, supplemented or terminated, in whole or part from time to time, and
  any guarantee or other collateral security at any time held by IFC for the payment
  of the Secured Obligations may be sold, exchanged, waived, surrendered or released.
  IFC shall not have any obligation to PSPH to protect, secure, perfect any other
  Lien at any time held by it as security for the Secured Obligations or any property
  subject thereto.

       Section
  9.07. Severability. If any provision, term or condition of this
  Mortgage Agreement or the 

93

 

application
  thereof to any Person or circumstance shall for any reason be held invalid or
  unenforceable, then, without prejudice to the provisions of Section 9.06, the
  same shall not adversely affect or impair the validity and enforceability of
  the other provisions, terms and conditions hereof nor the application of any
  such provisions, terms and conditions to any other Person or in any other circumstance.

       Section
  9.08. Notice. Any notice, request or other communication to
  be given or made under this Agreement shall be given in accordance with Section
  1.02, Volume V, Miscellaneous; Execution.

       Section
  9.09. Benefit of Mortgage Agreement. This Mortgage Agreement
  shall be binding upon and inure to the benefit of each party hereto, its successors,
  assigns and transferees; provided, however, that PSPH may not assign or otherwise
  transfer all or any of its rights and obligations under this Mortgage Agreement
  without the prior written consent of IFC. IFC may, at any time in conjunction
  with the assignment and transfer of any part of the Loan, transfer by way of
  assignment or novation, if not automatically occurring by operation of law,
  all or any part of its rights, benefits or obligations under the Real Estate
  Mortgage, the Chattel Mortgage and/or this Mortgage Agreement, without PSPH
  being in any way discharged from their obligations hereunder and without this
  Mortgage Agreement or the Mortgage created hereunder being deemed cancelled
  or terminated.

       Section
  9.10. Discharge of Mortgage. Subject to Section 9.02, IFC agrees
  to release the Assets from the Mortgages at the request of PSPH when the Secured
  Obligations shall have been fully paid and performed. Notwithstanding the foregoing,
  all indemnities of PSPH herein shall survive such release and any termination
  of this Mortgage Agreement. All taxes, fees and other costs imposed in connection
  with such release and termination shall be for the account of PSPH, and the
  payment thereof shall form part of the Secured Obligations.

       Section
  9.11. Lender Without Obligations. Notwithstanding anything contained
  herein, this Mortgage Agreement and the Mortgages are only intended as security
  for the Secured Obligations and IFC shall not be obligated to perform or discharge,
  nor does IFC undertake to perform or discharge, any obligation, duty, or liability
  of PSPH under or relating to any of the Assets.

       Section
9.12. Governing Law. This Mortgage Agreement and the rights and
obligations of the parties hereunder shall be construed in accordance with and
be governed by the laws of the Philippines. 
       Section
  9.13. Headings Descriptive. The headings of the Articles, Sections
  and subsections of this Mortgage Agreement are inserted for convenience only
  and shall not in any way affect the meaning or construction of any provision
  of this Mortgage Agreement.

       Section
  9.14. Applicability of IFC Loan Agreement. In amplification
  of, and notwithstanding any other provisions of this Mortgage Agreement, in
  connection with its obligations hereunder, IFC has all of the rights, powers,
  privileges, exculpations, protections and indemnities as are provided for or
  referred to in the IFC Loan Agreement.

94

 ANNEX “A”
  

Part
  1 — PRESENT REAL ASSETS

Present Real Assets
  include: 

	 	 	 	 	 
	1.	Ortigas
      Store Present Real Assets: 
	 	 	 	 	 
	 	a.	A building
      with a total area of 6513 square meters, made of 200 mm CMU with steel reinforcements
      seismically attached to a structural steel framing made of hot-rolled steel
      beams and rafters. The main Sales Area covers a floor area of exactly
      5,000 square meters with the rest serving as auxillary areas like the Generator
      room, Electrical room, Refrigeration & Air-conditioning facilities and
      others. 
	 	 	 	 	 
	 	b.	Improvements
      on the land leased for the Ortigas Store Site consisting of a parking area
      and general site that is fully paved with highway-grade asphalt with
      a thickness of 250 mm. The parking lot capacity is 345 parking spaces with
      a loading dock capable of handling two container trailers simultaneously.
    
	 	 	 	 	 
	 	c.	Other
      Ortigas Store Present Real Assets:
	 	 	 	 	 

                  Description                                                                          Item #
                  Warehouse Equipment:
                  Dock Seals   TPW 801                                                                  12652
                  PVC Weatherseals                                                                      90828
                  Dock Levelors w/ weatherseals. 6.6" x 8' x 30000lbs TH1086.5                          12653
                  Dock Lights RHF-40-P                                                                  90773
                  Formmelt Galvanized Metal Hood                                                       410186
                  Pnuematic Tube System 5 drops                                                         47663
                  Service Central / Center                                                              90829
                  Charger Stands  Deka Model RBS 18-25                                                  12312
                  Storage Freezer Steel Drive (7 bays 2 deep 4 high)                                    90861
                  Wedge Anchors                                                                         12490
                  Protectors for Steel PC-6                                                             90772
                  Cart Corrals #4300-15                                                                 12285
                  Safe & Vault ( Model SVM 6030PCD)                                                     12294
                  Great Western Order
                  -------------------
                  Eye wash station                                                                      90710
                  Warehouse Local FFE
                  -------------------
                  Phone System
                  Alarm System
                  Trash Facility Needs
                  2 X 6 Boards-Slats
                  Fencing
                  Speed Bumps
                  Food Service-Pizza
                  ------------------
                  SS Pot Sink 34"x106" - 3 compartment includes:  -3N2028-2D20                          51365

95 

                  Faucets for 24.0  -  USF-12-S                                                         51365
                  Rotary Drains for 24.0 - US-LD-1-5                                                    51365
                  SS Corner Guards - 3 1/2" x 3 1/2" x 4' - CS 5144-C                                   51585
                  Smallwares Package
                  ------------------
                  PriceSmart Food Service Identity "Big" Sign - 5 pc Aluminum KD
                  Bakery
                  ------
                  Leventi Convection Oven   10 tray Electic Oven
                  Cabling (All Departments)                                                             90509
                  Refrigeration Equipment
                  -----------------------
                  MID-12E Meat Cases for Refrigeration (Per Pricemart Specifications)                   53614
                  D6-12LE Dairy Cases for Refrigeration                                                 53617
                  HC4E-126 Coils for Refrigeration                                                      53619
                  HC4E 252BK Alt Coils                                                                  90865
                  MK44-420EDL MM T Coils                                                                90866
                  HC6A 222BB Al T Coils                                                                 90867
                  MK36 354 Air B T Coils                                                                90868
                  HC6E 234BK Al T Coils                                                                 90869
                  Gal 36 135 A 115/1 kPSC Coils                                                         90870
                  Installation Materials for Machine Room                                               90872
                  Bohn Coil Model # ADT070 AJ                                                           90873
                  Mach. Rm. W/compres., coil, tank                                                      90876
                  Installation Labor, start up
                  Refrigeration Panels and Accessories
                  ------------------------------------
                  Control Panel for Air Cooled                                                         908711
                  Refrigeration panels and accessories                                                  50595
                  Refrigeration panels and accessories                                                  50595
                  Refrigeration panels and accessories                                                  50595
                  Refrigeration panels and accessories                                                  50595
                  Steel Beams for Refrg. Rooms                                                          90880
                  Steel Girt                                                                           908925
                  Steel Flat Bars                                                                      908926
                  Foamed Angles                                                                        908930
                  Tie Rod Assy                                                                         908927
                  Steel Bent Clips                                                                     908928
                  Bolts                                                                                908929
                  Columns                                                                              908921
                  Durs Doors/Cooler Doors                                                               90881
                  Duro Last Roof                                                                        90882
                  Sliding Doors with Rails                                                              90884
                  Glass Windows                                                                         97945
                  Plastic Curtains                                                                      90885
                  Anthony Glass Doors                                                                   90894
                  Anthony Glass Door Frames                                                             90895
                  Single Ballast for Anthony Doors                                                      90896
                  Metal Pull Boxes (Grey)                                                               9676
                  Doors
                  -----
                  Hollow Metal Door                                                                     90775
                  Hardware - Finished                                                                   90778
                  Prefinished Wood Doors                                                                90779
                  Wall Louvers @ Generators                                                             90780
                  Stanley Magic Doors with Hardware                                                     90781

96

                  Toilet Partitions                                                                     90784
                  Atlas Rolite Doors- Insulated Polyurethane                                            90788
                  Glass and Aluminum Store front Doors                                                  90832
                  Generator
                  ---------
                  800RIZD-4 Kohler Gen-Set - 800 KW                                                     90678

Part
  2 — FUTURE REAL ASSETS

Future Real Assets
  include:

	 	 	 	 	 
	1.
	Ortigas
      Store Future Real Assets:
	 	 	 	 	 
	 	a.	Leasehold
      rights of PSPH under the Lease Agreement dated 9 January 2001 between Constress
      Philippines, Inc. as lessor and PSPH as lessee, for a total area of 20,000
      square meters located along Ortigas Avenue Extension, Barangay Sta. Rosario,
      Pasig City, acknowledged in Makati City before Gabriel P. De Jesus, notary
      public, and recorded in said notary public's notarial register as Doc No.
      381, Page No. 77, Book No. II, Series of 2001, duly registered with the
      Registry of Deeds of Pasig City;
	 	 	 	 	 
	2.	Alabang
      Store Future Real Assets:
	 	 	 	 	 
	 	a.	Leasehold
      rights of PSPH under the Lease Agreement dated 17 May 2002 between Filinvest
      Alabang, Inc. as lessor and PSPH as lessee, for a total area of 20,000 square
      meters along the Alabang-Zapote Road, Muntinlupa City, acknowledged in Muntinlupa
      City before Jovito M. Salvador, notary public, and recorded in said notary
      public's notarial register as Doc No. 316, Page No. 24, Book No. VI, Series
      of 2002, duly registered with the Registry of Deeds of Muntinlupa City.
	 	 	 	 	 
	 	b.	A building
      with a total area of 6513 square meters, made of 200 mm CMU with steel reinforcements
      seismically attached to a structural steel framing made of hot-rolled steel
      beams and rafters. The main Sales Area covers a floor area of exactly
      5,000 square meters with the rest serving as auxillary areas like the Generator
      room, Electrical room, Refrigeration & Air-conditioning facilities and
      others.
	 	 	 	 	 
	 	c.	Improvements
      on the land leased for the Alabang Store Site consisting of a parking area
      and general site that is fully paved with highway-grade asphalt with a thickness
      of 250 mm. The parking lot capacity is 345 parking spaces with a loading
      dock capable of handling two container trailers simultaneously.
	 	 	 	 	 
	 	d.	Other
      Alabang Store Future Real Assets:
	 	 	 	 	 

                                                    Description                                        Item #
                  Warehouse Equipment
                  -------------------
                  Dock Seals   TPW 801                                                                  12652
                  PVC Weatherseals                                                                      90828
                  Dock Levelors w/ weatherseals. 6.6" x 8' x 30000lbs TH1086.5                          12653
                  Dock Lights RHF-40-P                                                                  90773

97

                  Formmelt Galvanized Metal Hood                                                       410186
                  Pnuematic Tube System 5 drops                                                         47663
                  Service Central / Center                                                              90829
                  Charger Stands  Deka Model RBS 18-25                                                  12312
                  Storage Freezer Steel Drive (7 bays 2 deep 4 high)                                    90861
                  Wedge Anchors                                                                         12490
                  Protectors for Steel PC-6                                                             90772
                  Cart Corrals #4300-15                                                                 12285
                  Safe & Vault ( Model SVM 6030PCD)                                                     12294
                  Great Western Order
                  -------------------
                  Eye wash station                                                                      90710
                  Warehouse Local FFE
                  -------------------
                  Phone System
                  Alarm System
                  Trash facility needs
                  2 X 6 Boards - Slats
                  Fencing
                  Speed Bumps
                  Food Service-Pizza
                  SS Pot Sink 34"x106" - 3 compartment includes:  -3N2028-2D20                          51365
                  Faucets for 24.0  -  USF-12-S                                                         51365
                  Rotary Drains for 24.0 - US-LD-1-5                                                    51365
                  SS Corner Guards - 3 1/2" x 3 1/2" x 4' - CS 5144-C                                   51585
                  Smallwares Package
                  ------------------
                  PriceSmart Food Service Identity "Big" Sign - 5 pc Aluminum KD
                  Bakery
                  ------
                  Leventi Convection Oven   10 tray Electic Oven
                  Cabling (All Departments)                                                             90509
                  Refrigeration Equipment
                  MID-12E Meat Cases for Refrigeration (Per Pricemart Specifications)                   53614
                  D6-12LE Dairy Cases for Refrigeration                                                 53617
                  HC4E-126 Coils for Refrigeration                                                      53619
                  HC4E 252BK Alt Coils                                                                  90865
                  MK44-420EDL MM T Coils                                                                90866
                  HC6A 222BB Al T Coils                                                                 90867
                  MK36 354 Air B T Coils                                                                90868
                  HC6E 234BK Al T Coils                                                                 90869
                  Gal 36 135 A 115/1 kPSC Coils                                                         90870
                  Installation Materials for Machine Room                                               90872
                  Bohn Coil Model # ADT070 AJ                                                           90873
                  Mach. Rm. W/compres., coil, tank                                                      90876
                  Installation Labor, start up
                  Refrigeration Panels and Accessories
                  ------------------------------------
                  Control Panel for Air Cooled                                                         908711
                  Refrigeration panels and accessories                                                  50595
                  Refrigeration panels and accessories                                                  50595
                  Refrigeration panels and accessories                                                  50595
                  Refrigeration panels and accessories                                                  50595
                  Steel Beams for Refrg. Rooms                                                          90880
                  Steel Girt                                                                           908925
                  Steel Flat Bars                                                                      908926

98

                  Foamed Angles                                                                        908930
                  Tie Rod Assy                                                                         908927
                  Steel Bent Clips                                                                     908928
                  Bolts                                                                                908929
                  Columns                                                                              908921
                  Durs Doors/Cooler Doors                                                               90881
                  Duro Last Roof                                                                        90882
                  Sliding Doors with Rails                                                              90884
                  Glass Windows                                                                         97945
                  Plastic Curtains                                                                      90885
                  Anthony Glass Doors                                                                   90894
                  Anthony Glass Door Frames                                                             90895
                  Single Ballast for Anthony Doors                                                      90896
                  Metal Pull Boxes (Grey)                                                               9676
                  Doors
                  -----
                  Hollow Metal Door                                                                     90775
                  Hardware - Finished                                                                   90778
                  Prefinished Wood Doors                                                                90779
                  Wall Louvers @ Generators                                                             90780
                  Stanley Magic Doors with Hardware                                                     90781
                  Toilet Partitions                                                                     90784
                  Atlas Rolite Doors- Insulated Polyurethane                                            90788
                  Glass and Aluminum Store front Doors                                                  90832
                  Generator
                  ---------
                  800RIZD-4 Kohler Gen-Set - 800 KW                                                     90678

  99

   

 ANNEX “B” 

Part 1 — PRESENT CHATTEL

 Present Chattel include: 

	 	 	 	 	 
	1.
	Ortigas Store Present Chattel:
	 	 	 	 	 
	 	a.	Leasehold rights of PSPH under the Lease Agreement
      dated 9 January 2001 between Constress Philippines, Inc. as lessor and PSPH
      as lessee, for a total area of 20,000 square meters located along Ortigas
      Avenue Extension, Barangay Sta. Rosario, Pasig City, acknowledged in Makati
      City before Gabriel P. De Jesus, notary public, and recorded in said notary
      public's notarial register as Doc No. 381, Page No. 77, Book No. II, Series
      of 2001.
	 	 	 	 	 
	 	b.	All supplies,
      inventories, merchandise, and stock in trade, as well as all additions,
      replacements and substitutions thereof, acquired or used in connection with
      the retail business of PSPH, and located at the Ortigas Store, together
      with all attachments, component parts, equipment and accessories installed
      thereon or affixed thereto, regardless of where the same are located.
	 	 	 	 	 
	 	c.	Other
      Ortigas Store Present Chattel 
	 	 	 	 	 

                                                    Description                                        Item #
                  Warehouse Equipment:
                  Membership Cabinets / Counter                                                         37737
                  Photo Lab Cabinets                                                                    48419
                  Travel Desk
                  Application Counter                                                                   90828
                  Shrink Wrap Machine  Model STC2016
                  Manual Pallet Jack Model L50 Fourway                                                  12309
                  Manual Pallet Jack parts
                  Forklift Batteries  Deka Model 18-P137-15                                             12304
                  Forklift Chargers  Deka Model 880C3-18/950                                            12306
                  Transfer Cart  Model TC-24-PP Batt. Powered                                           12308
                  Philidelphia Scientific Watering System                                               90503
                  Mobile Pressure 10 Gal. Tank  INJ-T10M                                               905031
                  Forklifts  Model RC 3020-30                                                          302030
                  Forklifts w/ Frz Cond  RC 3020-30                                                    302031
                  Electric Pallet Jack
                  Baler  30/60 HD 2200                                                                  57696
                  M74 Upright  34" x 180"                                                              919040
                  M74 Upright  34" x 120"                                                              919030
                  M 74 Upright  34" x 60"                                                              919044
                  M74 Upright  34" x 48                                                                919048
                  Beam LBN 125 x 40  108"     (Cross Beams)                                            919061
                  Beams LBN 125 x 40  132"   (Cross Beams)                                             919062
                  Beams LBN 125 x 40  130"   (Cross Beams)                                             919063
                  Beams LBN 125 x 40  118"   (Cross Beams)                                             919064
                  Beams LBN 125 x 40  96"      (Cross Beams)                                           919065

100

                  Beams LBN 125 x 40  92"      (Cross Beams)                                           919066
                  Beams LBN 125 x 40  78"      (Cross Beams)                                           919067
                  Beams LBN  125 x 40  72"     (Cross Beams)                                           919068
                  Beams LBN  125 x 40  48"     (Cross Beams)                                           919069
                  Spacers DTZ300 12" long                                                               90862
                  End Cap Arms                                                                          90863
                  Safety Load Locks                                                                     90864
                  Wire Decking 31.5 x 25X 53.00"                                                       312553
                  Wire Decking 31.5 x 38.00"                                                            29209
                  Wire Decking 31.5 x 45.00"                                                           919045
                  Wire Decking  31.25"x42" Freezer                                                     362542
                  Collapsible Stacking Baskets - Item # 6000-30=30" x 32 x 34 "                         12492
                  Register Stands  Model Kcuu3500  ,3500 LT                                             12278
                  Beltrac Post w/Rubberized Base - 3000LT                                               29200
                  Carts #1200-50                                                                        12284
                  Tennant Floor Scrubber                                                                90500
                  Flats - Platform trucks TR-2000                                                       12283
                  Sign Package
                  ------------
                  Sign-Atencion Members                                                                 90712
                  Annual Fee Sign                                                                       90719
                  Members Benefits Wall                                                                 90720
                  Merchandise Return Sign                                                               90722
                  How to Read  a Tire Sign                                                              90724
                  Food Court Sign                                                                       90727
                  Frutas y Verduras Sign                                                                91944
                  Sign-Entrance                                                                         91995
                  Sign-Instal De Llantas                                                                91998
                  Sign-Precious de Llantas                                                              92902
                  Sign-Como Hacer Su Copra                                                              92905
                  Sign#14-1 Hour Photo                                                                  97904
                  Signs-Salida de Emerg.                                                                97905
                  Sign-Photo Center Prices                                                              90906
                  #16 Panaderia, Pollo Rostiza                                                         106493
                  #19 Aisle Sign                                                                       106494
                  #23 Store Hours Sign                                                                 106600
                  #26 Handicap Parking Sign                                                            106602
                  #27 No Parking Sign                                                                  106603
                  #28 Receiving Information Sign                                                       106604
                  #30 Chock Wheels - Sign                                                              106606
                  #33 Fire Exit - Sign                                                                 106608
                  #35 Caution Forklift- Sign                                                           106608
                  #38 Attentions Members - Sign                                                        106611
                  #40 Think Safety - Sign                                                              106612
                  #44 Det Installaion Price Sign                                                       106614
                  #15 Sign - Pharmacy                                                                  106620
                  #17 Sign - Pharmacy                                                                  106621
                  Sign#16 48'x96' w/no text only logo                                                  160016
                  48'x120' Blank Pieces of Sign w/no logo                                              161600
                  48'X96' Metal Sheets w/out frame                                                     166100
                  #24 Sign - Store Info                                                                 24100
                  #29 Sign - Receiving w/Arrow                                                         291000

101

                  #32 Sign - Cardboard Only                                                            321000
                  #39 Sign-Car Battery Sign                                                            400400
                  New Item Board                                                                       551711
                  Not Allowed Sign                                                                     662230
                  Pylon Signage, 1 Hr Photo                                                            721990
                  Signs 5B-Exit                                                                        876431
                  Sign #43A How to read a Tire                                                         907241
                  #13 Sign-Membership                                                                  929041
                  Bread Racks - six shelf - two (2) bay
                  Bread Trays - White
                  Steam Cleaner - Model 680                                                             12286
                  Receiving Scale - 4x4 -5K Floor Scale w/ indicator
                  Additional Rolling Scale 4x4 - 5K Floor Scale w/indicator
                  Great Western Order
                  -------------------
                  Twine 4/550 ft Tubes                                                                  32514
                  Shrink Wrap                                                                           37488
                  Magnetic Tape 100 x 1/2"                                                              37778
                  Two way Rail Clip                                                                     38013
                  Cutters                                                                               38014
                  Blades                                                                                38022
                  Clear Sign 9x11                                                                       45154
                  Clear Sign 4.5"x6"                                                                    48170
                  High Length Freezer Coat                                                              48178
                  1/16" Wire Crimps SW-116-C                                                            48192
                  Hip Length Freezer Coat                                                               48213
                  Heatrac Cowhide Gloves                                                                90713
                  Full length Freezer Coat                                                              97908
                  Warehouse Local FFE
                  -------------------
                  Warehouse Office Cabinettry
                  Office desks and chairs
                  Fire Extinguisher
                  Produce Bins
                  Pillow Bins
                  Wine Boxes
                  Man Cages
                  Employee and Tire Center Lockers
                  Currency Counters
                  CD Fixtures
                  Local Sign Package
                  Egg Racks
                  Spoil Racks
                  T - Bars
                  Clothing Steel
                  Clothing Displays
                  Safety Ladder
                  MPU Shelving
                  Bag Check Area
                  Produce Cooler Mirrors and Acrylic Shelves
                  Membership Booths
                  Membership Office PBX
                  Light Boxes

102

                  Timekeeping and Payroll System
                  Miscellaneous Fixtures
                  Food Service-Pizza
                  Cooler Shelving  36" 3 Shelf Alum. Cooling rack  - CC1836E-SEP-36"                    51340
                  Cooler Shelving  48" 3 Shelf Alum. Cooling rack  - CC1848E-SBP - 48"                  51342
                  9.0              Refrig. Pizza Prep w/shelf - CPT -67                                 51354
                  24" x 30" SS Table w/casters - P/C -2 SLS-30                                          51356
                  Manual Dough Prss. 110v 190lb - DP-1100                                               51357
                  Dough Press Stand      UT-1200                                                        61006
                  Pizza Cutting Guide - EQ-18-6                                                         61007
                  24"x24" Aluminum Pizza Cutting Table with poly top   P/C-2MCCT24                      51375
                  Undershelf for Pizza Table                                                           513751
                  Pizza Display 60"x24"x52"h     P/C-PDT-602-4                                          51374
                  Pizza Pan 18"                                                                         51595
                  18" Perf. Cooking sheets                                                              51596
                  Gas - Double Deck Conveyor Pizza Oven    P220FS-d-G                                   90685
                        International Start-up and Warranty for the Pizza Oven
                  Exhaust Hood 7'x5'x2' - 18 ga. SS w/backsplash                                        51359
                  Exhaust Fan - 110v/60h/1ph                                                            51360
                  30" x 96" Poly Top Table w/casters and backsplash                                     51361
                  Solid Wall Shelf 12" x 48"                                                            90433
                  Table Mount Utility Drawer                                                            90697
                  Aluminum Undershelf for Table - 30 x 96                                              513601
                  Reach-in Freezer - One section                                                        51363
                  Hand sink 15"x19"x26" SS includes soap dispenser                                      51364
                  Edlund Can opener 17" Bar - S-11-C                                                    51370
                  Dough Carts - DC-63 w/lids and tops                                                   51371
                  Hot Dog Cooker - RB-78-33SC                                                           51373
                  SS Service Counter - 149" long - P-S Custom                                           51378
                  Churro Display Case -  HFD-3                                                          51380
                  Cup Dispenser - C3400CH-18"                                                           51574
                  SS Beverage Dispenser Counter 44"x78" - P/C-BC-78                                     51577
                  Soda/Ice Dispenser  - 220205081BC-50                                                  61003
                  Ice Cuber - 802CAS251-30                                                              61004
                  SS Condiment Counter 24" x 96" - P/C-CC-9624-2A                                       51578
                  Condiment Dispenser - 67590                                                           51579
                  Double Straw Dispenser - 3802-28                                                      51594
                  San Jamar Lid holder - LC2100                                                         51581
                  Vector Fly Trap System                                                                97269
                  Mobile Pizza Rack 20 tier aluminium   MPR-12                                          51583
                  Cuno Filter - Water Filter for Dispensing Unit   4S                                   58578
                  Cuno Replacement Cartridges    S8112-5                                                58579
                  Pre Filter                                                                            58879
                  Smallwares Package
                  ------------------
                  Napkin Dispenser                                                                      90727
                  Bag Dispenser Stand S                                                                 82292
                  Bag Dispenser Stand B                                                                 48369
                  12 oz. Fluted Cheese Shaker                                                           51599
                  Dough Docker                                                                          51600
                  Plastic Handle Pizza Cutter                                                           51600
                  Pizza Cutter 4' Diam. Plstc                                                           51604

103

                  Turner/Scraper 3" x 8"                                                                51605
                  10.5oz Stainless Ladle                                                                51606
                  Solid Hasting Spoon
                  Handle Cutter/Scraper 6" x 3"
                  Rubber Spatulas/Dzn                                                                   51609
                  24oz. Oil Squeeze Bottles                                                             51610
                  Dial Pocket Thermometer                                                               51611
                  Extra Long Oven Mitts                                                                516101
                  1/2 Size Cover with Handle Plastic                                                    51618
                  1/2 Size 6" Deep Plastic Pan Plastic                                                  51621
                  Cambro Food Box                                                                       51622
                  18" Pizza Peel                                                                        51623
                  2.5" Deep Full Size Pan                                                               51624
                  1/4 Size Pan 6" Deep S.S                                                              51628
                  Steam Table Pan 4" Deep - Perforated                                                  51630
                  16" Heavy Duty Tongs - 1/2dozen                                                       51631
                  12" Heavy Duty Tongs - (1/2 doz.)                                                     51632
                  5lb scale (1oz.)                                                                     516290
                  81.0              Plymold Seating 24"x44" - 4  seat arrangment    F81217              51637
                  Trash Unit - Blue - LRD 32                                                            35917
                  Gallon Dome Top w/chain    LRD -32                                                    35916
                  Digital Photo Menu Boards 36" x 48" ea. - 6 Boards                                    39608
                  Coca-Cola Kick Panel 77"x24 3/4" - AD97250                                            61008
                  Black Celtic Sign 12" x 36" - 2mm                                                     90761
                  Engraved Condiment Signs                                                              54020
                  Open/Close Signs                                                                      54021
                  Onion Slicer                                                                          90891
                  Onion Dicer                                                                           90989
                  Bag Dispensers Stand S                                                                82292
                  Bag Dispensers Stand B                                                                48369
                  Fresh Food
                  Rotisserie Chicken
                  ------------------
                  Rotisserie Ovens - Stacked Unit, Electric, 70-3#Bird Capacity, 75 minute cook
                  BKI Elec. Rotisserie Unit MSR-2                                                       61638
                  Extra Spit Kits for above (12) per set                                                61638
                  Full Size Holding Cabinet (HC-72)                                                     90600
                  4'-0" Self-Serve Unit        ssw-4                                                    90650
                  SS sliding Door for Self Serve Unit
                  Table Mount Utility Drawer                                                            90697
                  24" x 96" Alum. Table                                                                 90665
                  30" x 96"  Alum Table with Poly Top, backsplash and locking casters                   51361
                  Polished Alum. Undershelf for Alum. Table                                             63400
                  Solid Wall Shelf 12" x 48"                                                            90433
                  Enclosed Rotissery Racks                                                              90661
                  Alum. 18" x 26" Pans                                                                  51625
                  Utensil Wash Sink Double Compartment -  FN2424-1                                      90672
                  Tongs 16"                                                                             51631
                  Shoulder length baking gloves                                                         51613
                  Poultry Sherar 4 1/2" Locking                                                         90706
                  Poultry Sherar 4 1/2" Locking                                                        907551
                  W/Polished Undershelft                                                               906651

104

                  Meat Scissors
                  5" Boning Knife                                                                      907550
                  Vector Fly Trap System                                                                97269
                  Meat Thermometer                                                                      90696
                  Poultry Pliers
                  Bakery
                  ------
                  Panem Retarder/Proofer    2 Chamber 24 trays
                  Leventi Oven Stand / Inner Rack
                  Upright Refrigerated Cake Cases (4 ft. wide)
                  Prep Rack 20 Shelf                                                                    63405
                  Oven Rack 15 Shelf
                  Bear programmable mixer 60 Quart - 60 quart
                  60 Qt mixing bowl
                  Bowl Truck
                  18"x26" Aluminum Bun Pan
                  Muffin Pans
                  Muffin Racks 12 Shelf
                  Bakery Scale Printer AC 3000                                                          90815
                  Custom Software                                                                       90816
                  Pin Connectors                                                                       905091
                  Master Communication Board                                                            90809
                  DP Heat Pad Cover
                  Shrink Wrap Mach Synthesis 760                                                        64000
                  Noeprene Rubber for Vacuum Pack Machine                                              350008
                  2 x 3 Table for Scale
                  30"x96"  Alum. Table w/poly Top                                                       51361
                  Polished Alum. Undershelf                                                             63400
                  Table Mount Drawer Utility                                                            63401
                  Utensil Wash Sink 24"x24"x14"d w/faucet -1N24-PS                                      90663
                  Bakery Gloves                                                                        341090
                  Panem Refrigerated Working Table  - 3 Doors
                  Vector Fly System                                                                     97269
                  Set of Commercial Rubber Spatulas - 1/2  Dozen - 2x16/10                              90704
                  SS straight Spatula 3" Width                                                          90699
                  Filling Sleeves
                  Cutting Knife
                  Spray Bottles - 24 oz.                                                                51636
                  25lb Scale x 1lb.                                                                     51629
                  5.5 oz. Scooper (Ice Cream Type) - Muffin Scoop - 5.5 oz. Scooper                    634102
                  18" x 48" x 54" 3 Shelf Dry Storage - Shelving                                        51351
                  Basting Brushes                                                                       90694
                  Centorfold Flim for Shrink Wrap Machine  16 x 4370
                  Six Shelf Bakery racks                                                                12295
                  50"x36" Wire Shelves                                                                  12296
                  18x48x54-3 Shelf dry                                                                  51351
                  Water proof cover                                                                    908141
                  Reach in Refrigerator                                                                 90660
                  Fresh Meat
                  BIRO AFMG 24 Mixer w/footswitch - Model 175                                           90651
                  BIRO 4003 Meat Band Saw - Hi Yield 16                                                 90652
                  Ishida DP3000 Scale/Printer and Hand Wrap Station w/ left and right wing and          90813
                  key mnt.

105

                  Replacement Heating Element                                                           90812
                  Ground Beef Test Analizer                                                             90853
                  Hobart 403 Tenderizer                                                                 90622
                  Manual Stuffer
                  Nylon Gong Brush
                  Gong Brush  (Red)                                                                     91956
                  Gong Brush  (White)                                                                  919560
                  Gonb Brush (Yellow)                                                                  919561
                  Grinder Plates
                  #42 Grinder Plates 1/8"                                                               90732
                  # 42 Grinder Plates 3/8"                                                              90733
                  Grinder Knifes #42                                                                    90734
                  Blade Block for Saw                                                                   90804
                  Scaper Fiber                                                                          90822
                  Steel Wheel Block Scaper                                                              90823
                  Block Scraper - SS Blade Fibrox handle                                                90992
                  Plastic Bone Dust Scapers                                                             90993
                  DP 3000 Water Proof Cover - For Scale                                                 90814
                  Handwrap Head Pad Cover                                                               90745
                  Software - Custom                                                                     90816
                  Thermal Head for AC                                                                   90817
                  Work Table 30" x 96" w/ splash, poly top, and locking casters - aluminum              51361
                  Lug Dolly (2) w/casters  (6 lug) w/ casters                                           90981
                  Meat Racks-6 Tier - ALR-6
                  Meat Tubs-Grey - WHPL-8 -18x26                                                        90668
                  Utility Cart With Casters - Model # 311                                               90669
                  One compartment sink w/drain, faucet and side board                                   90677
                  Table Mount Platter Rack                                                              90132
                  Table Mount Tray Rack  15x96                                                          90675
                  Platter Cart 10 Slot  Meat Platter Cart w/ Casters                                    58569
                  Plastic 12" x 30" Platters - Meat/Seafood                                             58570
                  Vector Electoronic Fly System
                  6" Boning Knife                                                                       90693
                  10" Steak Knife                                                                       90691
                  10" Double Scabard - Aluminum                                                         90700
                  10" Regular Cut Steel                                                                 90990
                  Electric Knive Sharpener                                                             907050
                  Kevlar Mesh Gloves                                                                    90658
                  Hi Spectrum T-8 Lamps                                                                 91917
                  126" Scallp Saw Blades                                                                90735
                  126" Saw Blades 24"                                                                  907124
                  Mineral Oil - 1 Gal.                                                                  90747
                  Squeegie 24:                                                                          9654
                  Heavy Duty Plastic Aprons                                                             9656
                  Two Tier Poly Top Table for Grinder                                                   9657
                  Solid Wall Shelves for Meat Room Tables  12" x 48"                                    90433
                  Replacement Heating Element                                                           90812
                  Red Aprons                                                                           140638
                  White Butcher Smocks                                                                 140639
                  SS Chains for Scabbards                                                              907001
                  16" PVC Film

106

                  18" PVC Film
                  Custom Thermal Labels
                  USDA Select Labels
                  Red Vexar 30" x 70'  - For Meat Cases
                  12" x 30" Steak Paper
                  Installation and Handling
                  Fish Program
                  ------------
                  Stainless Fish Fixtures
                  44 Gallon Bone Baller w/lid
                  Black Plastic Dolly for Bone Barrel
                  Cuno Filter System                                                                    58578
                  Cuno Replacement Filters                                                              58579
                  Custom Software                                                                       90816
                  AC 3000 Printer/Scale                                                                 90811
                  Insulated White Bin with White Tray
                  Clear Acrylic Sneeze Guards                                                          130343
                  Ice Flakier 800lb Capacity                                                           130344
                  Ice Storage Bin Top                                                                  130345
                  Ice Storage bin                                                                      130346
                  Plastic Ice Shovel                                                                   140637
                  Cuno Water Filtration System Pre Filter                                              585801
                  Water Proof Cover for Scale                                                          908141
                  Slicing Deli
                  ------------
                  Berke Semi Automatic Slicer - 919FS                                                  687992
                  Mini Pack Floor Vacuum Machine                                                        68801
                  Hand Slicer
                  Seal Wire                                                                            908161
                  Teflon Tape - 10'                                                                     90821
                  Cut Off Wire                                                                         908162
                  AC3000 Deli Scale/Printer                                                             90811
                  Custom Software                                                                       90816
                  Water Proof Cover for Scales                                                         908141
                  Work Table 30" x 96" w/ splash, poly top, and locking  casters - 5SLSB30              51361
                  Table Mount Platter Holder/Rack                                                       90132
                  Solid Wall shelf for Deli Tables - 12"x48"                                            90433
                  Table Mount Utility Draware                                                           90697
                  Two Compartment Sink w/Right Hand drain board   -  2N24-RD24                          90676
                  Platter Cart 10 Slot - Meat                                                           58569
                  Plastic Platters 12" x 30" - Meat/Seafood                                             58570
                  8" Collector for Slicer                                                               90659
                  Lube Oil                                                                              90793
                  12" Double Handle Cheese Knife                                                        90991
                  Vector Fly Trap System                                                                97269
                  Hi Spectrum T-8 Lamps                                                                 91917
                  Heavy Duty Plastic Apron                                                              9656
                  Blue Aprons                                                                          548291
                  White Butcher Smocks                                                                 900911
                  10x12 Vacuum Bags 1M
                  Black Vexaar 30" x 70"
                  Squeegie 24"                                                                          9654
                  Two Tier Poly Top table for Grinder                                                   9657

107

                  Produce
                  -------
                  Produce Scale/Printer - AC 3000 Ishida                                                90815
                  Custom Software                                                                       90816
                  Water Proof Cover                                                                    908141
                  Table Top Handwrap                                                                    90801
                  Vector Fly System                                                                     97269
                  Hi Spectrum T-8 Lamps                                                                 91917
                  One Compartment Sink w/left hand board faucet and drain- 1N24LD24PS                   90663
                  24" x 72" Table w/Poly Top                                                           247299
                  Back Room
                  ---------
                  4x4 5K Floor Scale w/indicator                                                       901017
                  Toggle Switch                                                                         9661
                  Sanitech Propare Pressure Washer                                                     901020
                  Spare Pilot Gas Orfice                                                               901021
                  Spare Flame Sensor Rod                                                               901022
                  Spare Fan Nozzle                                                                     901023
                  Vector Fly System                                                                     97269
                  Replacement Black Lights                                                             901025
                  Replacement Adhesive Boards                                                          901026
                  Stainless Steel Double Compartment Sink 18" w/ sideboards/backsplash 2N24282D18      242821
                  Solid Wall Shelf for above sink  12X48                                                90433
                  Mini Pack Digit Shrink Machine                                                        12291
                  22" 75ga - 3,500 ' Shrink Film
                  Photo Equipment
                  ---------------
                  Noritsu
                  QSS2611MDPM Main Body                                                                 42611
                  Photo Lab Machine                                                                     49811
                  Pallat of Photo Lab Accessories                                                      261110
                  Auto Detacher                                                                        261240
                  Photo One Hour Lab Sink  se4056                                                       51337
                  One Hour Photo Lab Stand                                                              90755
                  One Hour Photo lab Accessories                                                        90756
                  Tire Center
                  -----------
                  Coats 1025 Wheel Balancer - Model 1050                                                63087
                  Coats 5050A Euro Tire Changer - Model 5060A                                           63088
                  Coats 4040A Standard Tire Changer - Model 4050A                                       65649
                  1R 5HP Compressor for Tire Center - IR2475NSFP                                        63091
                  Pad Rack Auto Lift HR6                                                                63092
                  AMMCO  2240 Frame Lift                                                                63205
                  Tire Center Hand Tools & Accessories
                  ------------------------------------
                  Torque Wrench w/Ext. #07902                                                           23658
                  U-Vex Safety Glasses GRN5AK31                                                         63096
                  Bolt Snap 4J197                                                                       63097
                  60Ft Yellow Plastic Chain                                                             63098
                  Chrome Valves WESCV250                                                                63200
                  Pull A Sterm Tool WES ST69                                                            63201
                  Sidewall Brush WESD WSB                                                               63203
                  COMBI Adptr/Special Euro Wheel                                                        63204
                  Stering Wheel Prot. Box of 250                                                        63206
                  47102 Complete Tire Repair Kit                                                        63207
                  Save A Stud Tool Set                                                                  63208

108

                  Lincoln 2 Ton Hydraulic Jack                                                          63209
                  Seat Covers JDI-SC5                                                                   63215
                  Wall Bracket JDI 90-015                                                               63216
                  Floormats JDI FM3                                                                     63217
                  Air Filters 3/4"                                                                      63219
                  3/4" Regulator #SCH REG75                                                             63220
                  Transmission Funnel HUF 6-1461                                                        63221
                  Auto In Line Lubricator 07951                                                         63222
                  Saf-T-Step 1 Galloon NAC-5                                                            63223
                  5030 Branick TC 550 Tire Dolly                                                        63224
                  Branick TC 550 Tire Dolly                                                             63225
                  1/2 x 5 Extension 2245 E                                                              63226
                  Flip Soc MM DP 2092DT                                                                 63228
                  SAE Flip Socket 2046DT                                                                63229
                  Hose Reel 3/8 x 50 Lincold 268                                                        63230
                  Blow Gun DIL 5114                                                                     63231
                  Tire Slick 1 gal ENV STML 1                                                           63232
                  Wheel Clamp ESC MX                                                                    63233
                  13 pc. Set 1/2" Impact Socket                                                         63234
                  14 pc. 1/2" Impact Socket                                                             63235
                  5 Ton Floor Jack HEI 68052                                                            63236
                  Astro Jack Stands (1 Pair)                                                            63237
                  Tube Test Tank HUD 5-3109                                                             63238
                  CP 731-2 Tire Wrench                                                                  63239
                  CP 746-2 1/2" dr. HD                                                                  63241
                  4/Way Wrench KEN T56                                                                  63800
                  4/Way Wrench STD KEN T57                                                              63801
                  Hub Cap Tool KEN T68                                                                  63802
                  Air Tool Oil MAV 085                                                                  63803
                  RIM Wheel Weight Gauge                                                                63804
                  Wonder Vac                                                                            63806
                  4-Way tool SCH 3522                                                                   63808
                  Truck Tire Valve SCH 501                                                              63809
                  Tread Depth Tool SCH 599                                                              63810
                  Valve Tool SCH 940                                                                    63811
                  Valve Tool SCH 992                                                                    63812
                  Valve Core Tool x2-111                                                                63813
                  Coupler 1/4 Fem A-3                                                                   63814
                  Coupler A-13                                                                          63815
                  Nipple/Male 1/4 A-3D                                                                  63818
                  Nipple/Female A-3E                                                                    63819
                  Chrome/Valve TR-416                                                                   63821
                  Air Chuck/Clip 6293                                                                   63822
                  Dual Foot Gauge X2-10 #54837                                                          63823
                  Milton Air Inflator Gauge                                                             63824
                  Snap-in Valves 413                                                                    63825
                  Tubeless Tire Snap 415                                                                63826
                  Snap-in Valves 418                                                                    63827
                  Snap-in Valves 423                                                                    63828
                  Wheel Weights 50 Box 50                                                               63829
                  Wheel Weights 75 Box 50                                                               63830

109

                  Wheel Weights 5 Box 50                                                                63831
                  Wheel Weights 1 onz Box 50                                                            63832
                  Wheel Weights 1.25 onz Box 50                                                         63833
                  Wheel Weights 1.5 onz Box 50                                                          63834
                  Wheel Weights 1.75 onz Box 50                                                         63835
                  Wheel Weights 2 onz. Box 50                                                           63836
                  Wheel Weights 2.75 onz. Box 50                                                        63839
                  Wheel Weights 3 onz.                                                                  63840
                  Wheel Weights 3.25 onz. Box 25                                                        63841
                  Wheel Weights 3.5 onz. Box 25                                                         63842
                  Wheel Weights 3.75 onz Box 25                                                         63843
                  Wheel Weights 4 onz. Box 25                                                           63844
                  Wheel Weights Aluma. 25 Plain                                                         63845
                  Wheel Weights Aluma. 5 Plain                                                          63846
                  Aluma 75 Wheel Weights 50/box                                                         63847
                  Aluma  1 pl Wheel Weights 50/box                                                      63848
                  Aluma 1.25 Wheel Weights 50/box                                                       63849
                  Aluma 1.5 Wheel Weights 50/box                                                        63850
                  Aluma 1.75 Wheel Weights 50/box                                                       63852
                  Aluma 2pl Wheel Weights 50/box                                                        63853
                  Aluma 2.25 Wheel Weights 50/box                                                       63854
                  Aluma 2.5 Wheel Weights 50/box                                                        63855
                  BTS 1 oz. Light Trucks LT1                                                            63856
                  BTS 1.5 oz. Light Truck LT1                                                           63857
                  BTS 2 onz. Light Truck LT1                                                            63858
                  BTS 2.5 onz. Light Truck                                                              63859
                  BTS 3 onz. Light Truck                                                                63860
                  BTS 3.5 onz Light Truck                                                               63861
                  BTS 4 onz. Light Truck                                                                63862
                  LT1-4 5 onz.  Box 25                                                                  63863
                  BTS 5 onz. Light Trucks LT1                                                           63864
                  BTS 6 onz. Light Trucks                                                               63865
                  CWW040 Alloy Wheel Wgts w/bins                                                        63866
                  X-109 W/W Tool                                                                        63867
                  200624 Wheel Weights                                                                  63868
                  SWA 3/8 x 4 Whip Hose                                                                 63869
                  SWA 3/8 x 10  Whip Hose                                                               63870
                  USC 11W White Crayon                                                                  63872
                  JD1MRC Magnet Roof Cap                                                                63873
                  KentG35 Hammer                                                                        63874
                  T15 Wire Rim Brush                                                                    63875
                  PAT19-100 Repair Video                                                                63876
                  6127 Safety Coil Hose                                                                 63878
                  TT-HB 1 tool Ser Remover                                                              63880
                  AST JS3T Jack Stand                                                                   63882
                  BER10R Locking Plier                                                                  63883
                  Vise Grip Pliers BER7R                                                                63884
                  Bead up for all passenger Tires                                                       63885
                  GDL50505 5 Gal Air Tank                                                               63887
                  Special Application Sockets                                                           63888
                  Working Bench 72x28"                                                                  63889

110

                  Bench Vise 5"                                                                         63890
                  FRN2A092 Wheel Chock                                                                  63891
                  IRT231P32 231 Cover                                                                   63892
                  Foam Cover                                                                            63893
                  Wheel Weights 2.25 oz. 50 ct.                                                        638361
                  T-5.00 Weights                                                                       638651
                  Installation Charges
                  Refrigeration Equipment
                  MID 8E Meat Cases                                                                     90855
                  MID 8E Meat Cases                                                                     90855
                  D6L Deli Cases - C28LE                                                                90856
                  LCVZ10410 Air Cool Cond. W/Legs                                                       90871
                  Condensing Unit R05295                                                                90874
                  Refrigeration Panels and Accessories
                  ------------------------------------
                  Light Tubes                                                                           9677
                  Cord Plugs                                                                            9678
                  Pipe Cape                                                                             9679
                  Pipe Hangers                                                                          9680
                  PVC Glue                                                                              9681
                  PVC Tubing                                                                            9682
                  Solder Flux                                                                           9683
                  Solder                                                                                9684
                  Black Steel Pipe                                                                      9686
                  Steel Channel Iron                                                                    9687
                  Steel Plate                                                                           9688
                  Steel Angle Iron                                                                      9689
                  Teflon Tape                                                                           9690
                  Electrical Clamps and Straps                                                          90906
                  Weather Proof Elect. Box                                                              90908
                  Weather Proof Box Covers                                                              90909
                  Tie Wraps Diff. Sizes                                                                 90910
                  Receptacals (Contractors)                                                             90911
                  4" Elec. Boxes and Misc. Covers                                                       90912
                  Alum. Flexible Tubes/Diff. Sizes                                                      90913
                  Electrical Couplings                                                                  90914
                  Lights Fixtures                                                                       90915
                  Threaded Pipe Nipples                                                                 90917
                  Stainless Steel Covers                                                                90918
                  K.O. Seals/Diff. Sizes                                                                90919
                  Heat Tape                                                                             90920
                  Book of #'s and letters                                                               90921
                  Misc. Hardware-Screws, Nuts                                                           90922
                  Wire Forks and Joints                                                                 90926
                  Communication Cables                                                                  90927
                  Wire Pulling Compound                                                                 90928
                  Light Fixture Lens Cover                                                              90929
                  Alum. Flex Fittings                                                                   90930
                  Electrical Fittings                                                                   90931
                  Copper Fittings                                                                       90933
                  Insulation/ Different Sizes                                                           90934
                  Hanging Brackets                                                                      90935

111

                  Plastic Snap in Bushings                                                              90936
                  Galvanized Pipe Fittings                                                              90937
                  PVC Fittings                                                                          90938
                  Selfoss (18"sq.)                                                                      90940
                  Tape-Diff. Colors and Sizes                                                           90941
                  Sand Cloth                                                                            90942
                  Valves-Different Sizes                                                                90944
                  Loose Roll #3 Black Wire                                                              90946
                  Clamps-Different Sizes                                                                90947
                  Struts Different Sizes                                                                90949
                  3/4" Unions                                                                           90950
                  Copper Tubing                                                                         90951
                  Liquid Tight Flex Fittings                                                            90953
                  100' Fish Tape                                                                        90954
                  Flexable Copper Tubing                                                                90956
                  Insulation Adhesive                                                                   90958
                  Electric Drill                                                                        90959
                  Grinder Wheels                                                                        90960
                  6lb. Sledge Hammer                                                                    90963
                  Impact Wrench                                                                         90964
                  4" Grinder                                                                            90965
                  Electrical Conduit                                                                    90966
                  5'x4' Gang Box w/handler                                                              90967
                  Fiberglass Ladders                                                                    90968
                  Electrical Wire Diff. Sizes                                                           90969
                  36" Prybar                                                                            90970
                  5 gal. Water Cooler                                                                   90971
                  Alum. Conduit Body Diff. Sizes                                                        90972
                  Skill Saw                                                                             90973
                  4" Level w/Case                                                                       90975
                  Caulkin Guns                                                                          90976
                  Electrical Cords                                                                      90977
                  Refrigerant R507                                                                      90996
                  1" Liquidtight Flex                                                                   91932
                  Bags of Wire Connectors                                                               91933
                  3/4" PVC Tape                                                                         91934
                  6" Lifting Bar                                                                        91938
                  Electric Concrete Drill                                                               91940
                  Misc. Refrigeration Access.                                                           91941
                  Post Hole Digger                                                                      91942
                  Silicone Paint                                                                        91943
                  Sawzall                                                                               91957
                  Double Channel Brackets                                                               91958
                  R507 Refrigerant (AZ50)                                                               90996
                  6 Gallon Wet/Dry Vacuum                                                              108190
                  Boxes of Nails                                                                       108185
                  Respirator                                                                           108002
                  Work Light                                                                           108177
                  Bags of Terry Towels                                                                 108176
                  5 Gal Buckets                                                                        108178
                  Paint Tray Kits                                                                      108182

112

                  Paint Brush Sets                                                                     108186
                  Pad Locks                                                                            108184
                  MIS Equipment
                  Warehouse- San Diego
                  --------------------
                  Copy Machines
                  Local Printers / cables / local bought PC's
                  Central
                  -------
                  MIS Equipment- from San Diego
                  MIS Equipment- local bought Pc's, printers, fax machines
                  Sharp Copier
                  Light Fixtures
                  --------------
                  Type A1 - Single 1000W MH Polestar Fix - PT3C10M27NLSW                                90835
                  Type A3 - Twin MH Mtd. On 20' Polestar Fixt.                                         440027
                  Type B Wallpack II 175W - PT24000MH27SISw - Type B                                    90840
                  Type D - PrismAire Retail Fix.  - GMVR400/VBU - Type D                                90844
                  Type E -  Tril. Fill, exit sign - WL2K175MH27WH - Type E                              90844
                  Type G - Prismlight Fixt. - RA4000MH27H739A-CS                                        90845
                  Type G1 - Parkpack 70W MH Ceiliing Mount                                              90847
                  Type N  -   Prismaire Retail. Fixt 250 - MASLRU10SBK                                  90851
                  Type A2 - Single 400W Polestar                                                        90893
                  Type S 400W PrisFex w /beam                                                           90898
                  Type Z Wallpack II 70 W MH 277V - WL2K70DMH2TTT                                      227027
                  Type W1  Panelvue 400W Pipe - PANL4000MHHMTTW                                        400300
                  Type W Panelview 400W - Signlighter                                                  400600
                  Type Y Bantan 2000 175W MH - BA17DMH2CG                                              471727
                  Preventive Maintenance and Service - First Year Contracts
                  Central
                  -------
                  Built in Cabinetry / Cubicle work
                  Expat- Coutry Manager/In charge of Const.  Vehicles
                  Expat- Operation Managers Vehicles

	2.	Alabang Store Present Chattel: 
	 	 	 	 	 
	 	a.	Leasehold
      rights of PSPH under the Lease Agreement dated 17 May 2002 between Filinvest
      Alabang, Inc. as lessor and PSPH as lessee, for a total area of 20,000 square
      meters along the Alabang-Zapote Road, Muntinlupa City, acknowledged in Muntinlupa
      City before Jovito M. Salvador, notary public, and recorded in said notary
      public's notarial register as Doc No. 316, Page No. 24, Book No. VI, Series
      of 2002. 
	 	 	 	 	 

Part 2 — FUTURE CHATTEL

 Future Chattel
  include: 

	1.	 Alabang
        Store Future Chattel:

	 	 	 	 	 
	 	a.	All supplies,
      inventories, merchandise, and stock in trade, as well as all additions,
      replacements and substitutions thereof, to be acquired or used in connection
      with the retail business of PSPH, and to be located at the Alabang Store,
      together with all attachments, component parts, equipment and accessories
      installed thereon or affixed thereto, regardless of where the same are to
      or will be located.
	 	 	 	 	 

113 

 

	 	b.	Other
      Alabang Store Future Chattel: 
	 	 	 	 	 

                  Description                                                                          Item #

                  Warehouse Equipment:
                  Dock Seals   TPW 801                                                                  12652
                  PVC Weatherseals                                                                      90828
                  Dock Levelors w/ weatherseals. 6.6" x 8' x 30000lbs TH1086.5                          12653
                  Dock Lights RHF-40-P                                                                  90773
                  Formmelt Galvanized Metal Hood                                                       410186
                  Pnuematic Tube System 5 drops                                                         47663
                  Membership Cabinets /  Counter                                                        37737
                  Photo Lab Cabinets                                                                    48419
                  Service Central / Center                                                              90829
                  Travel Desk
                  Application Counter                                                                   90828
                  Shrink Wrap Machine  Model STC2016
                  Manual Pallet Jack Model L50 Fourway                                                  12309
                  Manual Pallet Jack parts
                  Charger Stands  Deka Model RBS 18-25                                                  12312
                  Forklift Batteries  Deka Model 18-P137-15                                             12304
                  Forklift Chargers  Deka Model 880C3-18/950                                            12306
                  Transfer Cart  Model TC-24-PP Batt. Powered                                           12308
                  Philidelphia Scientific Watering System                                               90503
                  Mobile Pressure 10 Gal. Tank  INJ-T10M                                               905031
                  Forklifts  Model RC 3020-30                                                          302030
                  Forklifts w/ Frz Cond  RC 3020-30                                                    302031
                  Electric Pallet Jack
                  Baler  30/60 HD 2200                                                                  57696
                  M74 Upright  34" x 180"                                                              919040
                  M74 Upright  34" x 120"                                                              919030
                  M 74 Upright  34" x 60"                                                              919044
                  M74 Upright  34" x 48                                                                919048
                  Beam LBN 125 x 40  108"     (Cross Beams)                                            919061
                  Beams LBN 125 x 40  132"   (Cross Beams)                                             919062
                  Beams LBN 125 x 40  130"   (Cross Beams)                                             919063
                  Beams LBN 125 x 40  118"   (Cross Beams)                                             919064
                  Beams LBN 125 x 40  96"      (Cross Beams)                                           919065
                  Beams LBN 125 x 40  92"      (Cross Beams)                                           919066
                  Beams LBN 125 x 40  78"      (Cross Beams)                                           919067
                  Beams LBN  125 x 40  72"     (Cross Beams)                                           919068
                  Beams LBN  125 x 40  48"     (Cross Beams)                                           919069
                  Storage Freezer Steel Drive (7 bays 2 deep 4 high)                                    90861
                  Spacers DTZ300 12" long                                                               90862
                  Wedge Anchors                                                                         12490
                  End Cap Arms                                                                          90863
                  Safety Load Locks                                                                     90864
                  Protectors for Steel PC-6                                                             90772
                  Wire Decking 31.5 x 25X 53.00"                                                       312553
                  Wire Decking 31.5 x 38.00"                                                            29209
                  Wire Decking 31.5 x 45.00"                                                           919045

 
114

                  Wire Decking  31.25"x42" Freezer                                                     362542
                  Collapsible Stacking Baskets - Item # 6000-30=30" x 32 x 34 "                         12492
                  Register Stands  Model Kcuu3500  ,3500 LT                                             12278
                  Beltrac Post w/Rubberized Base - 3000LT                                               29200
                  Cart Corrals #4300-15                                                                 12285
                  Carts #1200-50                                                                        12284
                  Safe & Vault ( Model SVM 6030PCD)                                                     12294
                  Tennant Floor Scrubber                                                                90500
                  Flats - Platform trucks TR-2000                                                       12283
                  Sign Package
                  ------------
                  Sign-Atencion Members                                                                 90712
                  Annual Fee Sign                                                                       90719
                  Members Benefits Wall                                                                 90720
                  Merchandise Return Sign                                                               90722
                  How to Read  a Tire Sign                                                              90724
                  Food Court Sign                                                                       90727
                  Frutas y Verduras Sign                                                                91944
                  Sign-Entrance                                                                         91995
                  Sign-Instal De Llantas                                                                91998
                  Sign-Precious de Llantas                                                              92902
                  Sign-Como Hacer Su Copra                                                              92905
                  Sign#14-1 Hour Photo                                                                  97904
                  Signs-Salida de Emerg.                                                                97905
                  Sign-Photo Center Prices                                                              90906
                  #16 Panaderia, Pollo Rostiza                                                         106493
                  #19 Aisle Sign                                                                       106494
                  #23 Store Hours Sign                                                                 106600
                  #26 Handicap Parking Sign                                                            106602
                  #27 No Parking Sign                                                                  106603
                  #28 Receiving Information Sign                                                       106604
                  #30 Chock Wheels - Sign                                                              106606
                  #33 Fire Exit - Sign                                                                 106608
                  #35 Caution Forklift- Sign                                                           106608
                  #38 Attentions Members - Sign                                                        106611
                  #40 Think Safety - Sign                                                              106612
                  #44 Det Installation Price Sign                                                      106614
                  #15 Sign - Pharmacy                                                                  106620
                  #17 Sign - Pharmacy                                                                  106621
                  Sign#16 48'x96' w/no text only logo                                                  160016
                  48'x120' Blank Pieces of Sign w/no logo                                              161600
                  48'X96' Metal Sheets w/out frame                                                     166100
                  #24 Sign - Store Info                                                                 24100
                  #29 Sign - Receiving w/Arrow                                                         291000
                  #32 Sign - Cardboard Only                                                            321000
                  #39 Sign-Car Battery Sign                                                            400400
                  New Item Board                                                                       551711
                  Not Allowed Sign                                                                     662230
                  Pylon Signage, 1 Hr Photo                                                            721990
                  Signs 5B-Exit                                                                        876431
                  Sign #43A How to read a Tire                                                         907241
                  #13 Sign-Membership                                                                  929041

 
115

                  Bread Racks - six shelf - two (2) bay
                  Bread Trays - White
                  Steam Cleaner - Model 680                                                             12286
                  Receiving Scale - 4x4 -5K Floor Scale w/ indicator
                  Additional Rolling Scale 4x4 - 5K Floor Scale w/indicator
                  Great Western Order
                  -------------------
                  Twine 4/550 ft Tubes                                                                  32514
                  Shrink Wrap                                                                           37488
                  Magnetic Tape 100 x 1/2"                                                              37778
                  Two way Rail Clip                                                                     38013
                  Cutters                                                                               38014
                  Blades                                                                                38022
                  Clear Sign 9x11                                                                       45154
                  Clear Sign 4.5"x6"                                                                    48170
                  High Length Freezer Coat                                                              48178
                  1/16" Wire Crimps SW-116-C                                                            48192
                  Hip Length Freezer Coat                                                               48213
                  Eye wash station                                                                      90710
                  Heatrac Cowhide Gloves                                                                90713
                  Full length Freezer Coat                                                              97908
                  Warehouse Local FFE
                  -------------------
                  Warehouse Office Cabinettry
                  Office desks and chairs
                  Phone System
                  Alarm System
                  Trash facility needs
                  Fire Extinguisher
                  Produce Bins
                  Pillow Bins
                  Wine Boxes
                  2 X 6 Boards - Slats
                  Fencing
                  Man Cages
                  Employee and Tire Center Lockers
                  Currency Counters
                  CD Fixtures
                  Speed Bumps
                  Local Sign Package
                  Egg Racks
                  Spoil Racks
                  T - Bars
                  Clothing Steel
                  Clothing Displays
                  Safety Ladder
                  MPU Shelving
                  Bag Check Area
                  Produce Cooler Mirrors and Acrylic Shelves
                  Membership Booths
                  Membership Office PBX
                  Light Boxes
                  Timekeeping and Payroll System

 
116

                  Miscellaneous Fixtures
                  Food Service-Pizza
                  Cooler Shelving  36" 3 Shelf Alum. Cooling rack  - CC1836E-SEP-36"                    51340
                  Cooler Shelving  48" 3 Shelf Alum. Cooling rack  - CC1848E-SBP - 48"                  51342
                  9.0              Refrig. Pizza Prep w/shelf - CPT -67                                 51354
                  24" x 30" SS Table w/casters - P/C -2 SLS-30                                          51356
                  Manual Dough Prss. 110v 190lb - DP-1100                                               51357
                  Dough Press Stand      UT-1200                                                        61006
                  Pizza Cutting Guide - EQ-18-6                                                         61007
                  24"x24" Aluminum Pizza Cutting Table with poly top   P/C-2MCCT24                      51375
                  Undershelf for Pizza Table                                                           513751
                  Pizza Display 60"x24"x52"h     P/C-PDT-602-4                                          51374
                  Pizza Pan 18"                                                                         51595
                  18" Perf. Cooking sheets                                                              51596
                  Gas - Double Deck Conveyor Pizza Oven    P220FS-d-G                                   90685
                        International Start-up and Warranty for the Pizza Oven
                  Exhaust Hood 7'x5'x2' - 18 ga. SS w/backsplash                                        51359
                  Exhaust Fan - 110v/60h/1ph                                                            51360
                  30" x 96" Poly Top Table w/casters and backsplash                                     51361
                  Solid Wall Shelf 12" x 48"                                                            90433
                  Table Mount Utility Drawer                                                            90697
                  Aluminum Undershelf for Table - 30 x 96                                              513601
                  Reach-in Freezer - One section                                                        51363
                  Hand sink 15"x19"x26" SS includes soap dispenser                                      51364
                  SS Pot Sink 34"x106" - 3 compartment includes:  -3N2028-2D20                          51365
                  Faucets for 24.0  -  USF-12-S                                                         51365
                  Rotary Drains for 24.0 - US-LD-1-5                                                    51365
                  Edlund Can opener 17" Bar - S-11-C                                                    51370
                  Dough Carts - DC-63 w/lids and tops                                                   51371
                  Hot Dog Cooker - RB-78-33SC                                                           51373
                  SS Service Counter - 149" long - P-S Custom                                           51378
                  Churro Display Case -  HFD-3                                                          51380
                  Cup Dispenser - C3400CH-18"                                                           51574
                  SS Beverage Dispenser Counter 44"x78" - P/C-BC-78                                     51577
                  Soda/Ice Dispenser  - 220205081BC-50                                                  61003
                  Ice Cuber - 802CAS251-30                                                              61004
                  SS Condiment Counter 24" x 96" - P/C-CC-9624-2A                                       51578
                  Condiment Dispenser - 67590                                                           51579
                  Double Straw Dispenser - 3802-28                                                      51594
                  San Jamar Lid holder - LC2100                                                         51581
                  Vector Fly Trap System                                                                97269
                  Mobile Pizza Rack 20 tier aluminium   MPR-12                                          51583
                  Cuno Filter - Water Filter for Dispensing Unit   4S                                   58578
                  Cuno Replacement Cartridges    S8112-5                                                58579
                  Pre Filter                                                                            58879
                  SS Corner Guards - 3 1/2" x 3 1/2" x 4' - CS 5144-C                                   51585
                  Smallwares Package
                  ------------------
                  Napkin Dispenser                                                                      90727
                  Bag Dispenser Stand S                                                                 82292
                  Bag Dispenser Stand B                                                                 48369
                  12 oz. Fluted Cheese Shaker                                                           51599

 
117

                  Dough Docker                                                                          51600
                  Plastic Handle Pizza Cutter                                                           51600
                  Pizza Cutter 4' Diam. Plstc                                                           51604
                  Turner/Scraper 3" x 8"                                                                51605
                  10.5oz Stainless Ladle                                                                51606
                  Solid Hasting Spoon
                  Handle Cutter/Scraper 6" x 3"
                  Rubber Spatulas/Dzn                                                                   51609
                  24oz. Oil Squeeze Bottles                                                             51610
                  Dial Pocket Thermometer                                                               51611
                  Extra Long Oven Mitts                                                                516101
                  1/2 Size Cover with Handle Plastic                                                    51618
                  1/2 Size 6" Deep Plastic Pan Plastic                                                  51621
                  Cambro Food Box                                                                       51622
                  18" Pizza Peel                                                                        51623
                  2.5" Deep Full Size Pan                                                               51624
                  1/4 Size Pan 6" Deep S.S                                                              51628
                  Steam Table Pan 4" Deep - Perforated                                                  51630
                  16" Heavy Duty Tongs - 1/2dozen                                                       51631
                  12" Heavy Duty Tongs - (1/2 doz.)                                                     51632
                  5lb scale (1oz.)                                                                     516290
                  81.0              Plymold Seating 24"x44" - 4  seat arrangment    F81217              51637
                  Trash Unit - Blue - LRD 32                                                            35917
                  Gallon Dome Top w/chain    LRD -32                                                    35916
                  Digital Photo Menu Boards 36" x 48" ea. - 6 Boards                                    39608
                  Coca-Cola Kick Panel 77"x24 3/4" - AD97250                                            61008
                  Black Celtic Sign 12" x 36" - 2mm                                                     90761
                  Engraved Condiment Signs                                                              54020
                  Open/Close Signs                                                                      54021
                  PriceSmart Food Service Identity "Big" Sign - 5 pc Aluminum KD
                  Onion Slicer                                                                          90891
                  Onion Dicer                                                                           90989
                  Bag Dispensers Stand S                                                                82292
                  Bag Dispensers Stand B                                                                48369
                  Fresh Food
                  Rotisserie Chicken
                  ------------------
                  Rotisserie Ovens - Stacked Unit, Electric, 70-3#Bird Capacity, 75 minute cook
                  BKI Elec. Rotisserie Unit MSR-2                                                       61638
                  Extra Spit Kits for above (12) per set                                                61638
                  Full Size Holding Cabinet (HC-72)                                                     90600
                  4'-0" Self-Serve Unit        ssw-4                                                    90650
                  SS sliding Door for Self Serve Unit
                  Table Mount Utility Drawer                                                            90697
                  24" x 96" Alum. Table                                                                 90665
                  30" x 96"  Alum Table with Poly Top, backsplash and locking casters                   51361
                  Polished Alum. Undershelf for Alum. Table                                             63400
                  Solid Wall Shelf 12" x 48"                                                            90433
                  Enclosed Rotissery Racks                                                              90661
                  Alum. 18" x 26" Pans                                                                  51625
                  Utensil Wash Sink Double Compartment -  FN2424-1                                      90672
                  Tongs 16"                                                                             51631

 
118

                  Shoulder length baking gloves                                                         51613
                  Poultry Sherar 4 1/2" Locking                                                         90706
                  Poultry Sherar 4 1/2" Locking                                                        907551
                  W/Polished Undershelft                                                               906651
                  Meat Scissors
                  5" Boning Knife                                                                      907550
                  Vector Fly Trap System                                                                97269
                  Meat Thermometer                                                                      90696
                  Poultry Pliers
                  Bakery
                  ------
                  Leventi Convection Oven   10 tray Electic Oven
                  Panem Retarder/Proofer    2 Chamber 24 trays
                  Leventi Oven Stand / Inner Rack
                  Upright Refrigerated Cake Cases (4 ft. wide)
                  Prep Rack 20 Shelf                                                                    63405
                  Oven Rack 15 Shelf
                  Bear programmable mixer 60 Quart - 60 quart
                  60 Qt mixing bowl
                  Bowl Truck
                  18"x26" Aluminum Bun Pan
                  Muffin Pans
                  Muffin Racks 12 Shelf
                  Bakery Scale Printer AC 3000                                                          90815
                  Custom Software                                                                       90816
                  Cabling (All Departments)                                                             90509
                  Pin Connectors                                                                       905091
                  Master Communication Board                                                            90809
                  DP Heat Pad Cover
                  Shrink Wrap Mach Synthesis 760                                                        64000
                  Noeprene Rubber for Vacuum Pack Machine                                              350008
                  2 x 3 Table for Scale
                  30"x96"  Alum. Table w/poly Top                                                       51361
                  Polished Alum. Undershelf                                                             63400
                  Table Mount Drawer Utility                                                            63401
                  Utensil Wash Sink 24"x24"x14"d w/faucet -1N24-PS                                      90663
                  Bakery Gloves                                                                        341090
                  Panem Refrigerated Working Table  - 3 Doors
                  Vector Fly System                                                                     97269
                  Set of Commercial Rubber Spatulas - 1/2  Dozen - 2x16/10                              90704
                  SS straight Spatula 3" Width                                                          90699
                  Filling Sleeves
                  Cutting Knife
                  Spray Bottles - 24 oz.                                                                51636
                  25lb Scale x 1lb.                                                                     51629
                  5.5 oz. Scooper (Ice Cream Type) - Muffin Scoop - 5.5 oz. Scooper                    634102
                  18" x 48" x 54" 3 Shelf Dry Storage - Shelving                                        51351
                  Basting Brushes                                                                       90694
                  Centorfold Flim for Shrink Wrap Machine  16 x 4370
                  Six Shelf Bakery racks                                                                12295
                  50"x36" Wire Shelves                                                                  12296
                  18x48x54-3 Shelf dry                                                                  51351

 
119

                  Water proof cover                                                                    908141
                  Reach in Refrigerator                                                                 90660
                  Fresh Meat
                  ----------
                  BIRO AFMG 24 Mixer w/footswitch - Model 175                                           90651
                  BIRO 4003 Meat Band Saw - Hi Yield 16                                                 90652
                  Ishida DP3000 Scale/Printer and Hand Wrap Station w/ left and right wing and          90813
                  key mnt.
                  Replacement Heating Element                                                           90812
                  Ground Beef Test Analizer                                                             90853
                  Hobart 403 Tenderizer                                                                 90622
                  Manual Stuffer
                  Nylon Gong Brush
                  Gong Brush  (Red)                                                                     91956
                  Gong Brush  (White)                                                                  919560
                  Gonb Brush (Yellow)                                                                  919561
                  Grinder Plates
                  #42 Grinder Plates 1/8"                                                               90732
                  # 42 Grinder Plates 3/8"                                                              90733
                  Grinder Knifes #42                                                                    90734
                  Blade Block for Saw                                                                   90804
                  Scaper Fiber                                                                          90822
                  Steel Wheel Block Scaper                                                              90823
                  Block Scraper - SS Blade Fibrox handle                                                90992
                  Plastic Bone Dust Scapers                                                             90993
                  DP 3000 Water Proof Cover - For Scale                                                 90814
                  Handwrap Head Pad Cover                                                               90745
                  Software - Custom                                                                     90816
                  Thermal Head for AC                                                                   90817
                  Work Table 30" x 96" w/ splash, poly top, and locking casters - aluminum              51361
                  Lug Dolly (2) w/casters  (6 lug) w/ casters                                           90981
                  Meat Racks-6 Tier - ALR-6
                  Meat Tubs-Grey - WHPL-8 -18x26                                                        90668
                  Utility Cart With Casters - Model # 311                                               90669
                  One compartment sink w/drain, faucet and side board                                   90677
                  Table Mount Platter Rack                                                              90132
                  Table Mount Tray Rack  15x96                                                          90675
                  Platter Cart 10 Slot  Meat Platter Cart w/ Casters                                    58569
                  Plastic 12" x 30" Platters - Meat/Seafood                                             58570
                  Vector Electoronic Fly System
                  6" Boning Knife                                                                       90693
                  10" Steak Knife                                                                       90691
                  10" Double Scabard - Aluminum                                                         90700
                  10" Regular Cut Steel                                                                 90990
                  Electric Knive Sharpener                                                             907050
                  Kevlar Mesh Gloves                                                                    90658
                  Hi Spectrum T-8 Lamps                                                                 91917
                  126" Scallp Saw Blades                                                                90735
                  126" Saw Blades 24"                                                                  907124
                  Mineral Oil - 1 Gal.                                                                  90747
                  Squeegie 24:                                                                          9654
                  Heavy Duty Plastic Aprons                                                             9656
                  Two Tier Poly Top Table for Grinder                                                   9657

 
120

                  Solid Wall Shelves for Meat Room Tables  12" x 48"                                    90433
                  Replacement Heating Element                                                           90812
                  Red Aprons                                                                           140638
                  White Butcher Smocks                                                                 140639
                  SS Chains for Scabbards                                                              907001
                  16" PVC Film
                  18" PVC Film
                  Custom Thermal Labels
                  USDA Select Labels
                  Red Vexar 30" x 70'  - For Meat Cases
                  12" x 30" Steak Paper
                  Installation and Handling
                  Fish Program
                  ------------
                  Stainless Fish Fixtures
                  44 Gallon Bone Baller w/lid
                  Black Plastic Dolly for Bone Barrel
                  Cuno Filter System                                                                    58578
                  Cuno Replacement Filters                                                              58579
                  Custom Software                                                                       90816
                  AC 3000 Printer/Scale                                                                 90811
                  Insulated White Bin with White Tray
                  Clear Acrylic Sneeze Guards                                                          130343
                  Ice Flakier 800lb Capacity                                                           130344
                  Ice Storage Bin Top                                                                  130345
                  Ice Storage bin                                                                      130346
                  Plastic Ice Shovel                                                                   140637
                  Cuno Water Filtration System Pre Filter                                              585801
                  Water Proof Cover for Scale                                                          908141
                  Slicing Deli
                  ------------
                  Berke Semi Automatic Slicer - 919FS                                                  687992
                  Mini Pack Floor Vacuum Machine                                                        68801
                  Hand Slicer
                  Seal Wire                                                                            908161
                  Teflon Tape - 10'                                                                     90821
                  Cut Off Wire                                                                         908162
                  AC3000 Deli Scale/Printer                                                             90811
                  Custom Software                                                                       90816
                  Water Proof Cover for Scales                                                         908141
                  Work Table 30" x 96" w/ splash, poly top, and locking  casters - 5SLSB30              51361
                  Table Mount Platter Holder/Rack                                                       90132
                  Solid Wall shelf for Deli Tables - 12"x48"                                            90433
                  Table Mount Utility Draware                                                           90697
                  Two Compartment Sink w/Right Hand drain board   -  2N24-RD24                          90676
                  Platter Cart 10 Slot - Meat                                                           58569
                  Plastic Platters 12" x 30" - Meat/Seafood                                             58570
                  8" Collector for Slicer                                                               90659
                  Lube Oil                                                                              90793
                  12" Double Handle Cheese Knife                                                        90991
                  Vector Fly Trap System                                                                97269
                  Hi Spectrum T-8 Lamps                                                                 91917
                  Heavy Duty Plastic Apron                                                              9656

121

                  Blue Aprons                                                                          548291
                  White Butcher Smocks                                                                 900911
                  10x12 Vacuum Bags 1M
                  Black Vexaar 30" x 70"
                  Squeegie 24"                                                                          9654
                  Two Tier Poly Top table for Grinder                                                   9657
                  Produce
                  -------
                  Produce Scale/Printer - AC 3000 Ishida                                                90815
                  Custom Software                                                                       90816
                  Water Proof Cover                                                                    908141
                  Table Top Handwrap                                                                    90801
                  Vector Fly System                                                                     97269
                  Hi Spectrum T-8 Lamps                                                                 91917
                  One Compartment Sink w/left hand board faucet and drain- 1N24LD24PS                   90663
                  24" x 72" Table w/Poly Top                                                           247299
                  Back Room
                  ---------
                  4x4 5K Floor Scale w/indicator                                                       901017
                  Toggle Switch                                                                         9661
                  Sanitech Propare Pressure Washer                                                     901020
                  Spare Pilot Gas Orfice                                                               901021
                  Spare Flame Sensor Rod                                                               901022
                  Spare Fan Nozzle                                                                     901023
                  Vector Fly System                                                                     97269
                  Replacement Black Lights                                                             901025
                  Replacement Adhesive Boards                                                          901026
                  Stainless Steel Double Compartment Sink 18" w/ sideboards/backsplash 2N24282D18      242821
                  Solid Wall Shelf for above sink  12X48                                                90433
                  Mini Pack Digit Shrink Machine                                                        12291

                  22" 75ga - 3,500 ' Shrink Film
                  Photo Equipment
                  ---------------
                  Noritsu
                  QSS2611MDPM Main Body                                                                 42611
                  Photo Lab Machine                                                                     49811
                  Pallat of Photo Lab Accessories                                                      261110
                  Auto Detacher                                                                        261240
                  Photo One Hour Lab Sink  se4056                                                       51337
                  One Hour Photo Lab Stand                                                              90755
                  One Hour Photo lab Accessories                                                        90756
                  Tire Center
                  -----------
                  Coats 1025 Wheel Balancer - Model 1050                                                63087
                  Coats 5050A Euro Tire Changer - Model 5060A                                           63088
                  Coats 4040A Standard Tire Changer - Model 4050A                                       65649
                  1R 5HP Compressor for Tire Center - IR2475NSFP                                        63091
                  Pad Rack Auto Lift HR6                                                                63092
                  AMMCO  2240 Frame Lift                                                                63205
                  Tire Center Hand Tools & Accessories
                  ------------------------------------
                  Torque Wrench w/Ext. #07902                                                           23658
                  U-Vex Safety Glasses GRN5AK31                                                         63096
                  Bolt Snap 4J197                                                                       63097
                  60Ft Yellow Plastic Chain                                                             63098
                  Chrome Valves WESCV250                                                                63200

122

                  Pull A Sterm Tool WES ST69                                                            63201
                  Sidewall Brush WESD WSB                                                               63203
                  COMBI Adptr/Special Euro Wheel                                                        63204
                  Stering Wheel Prot. Box of 250                                                        63206
                  47102 Complete Tire Repair Kit                                                        63207
                  Save A Stud Tool Set                                                                  63208
                  Lincoln 2 Ton Hydraulic Jack                                                          63209
                  Seat Covers JDI-SC5                                                                   63215
                  Wall Bracket JDI 90-015                                                               63216
                  Floormats JDI FM3                                                                     63217
                  Air Filters 3/4"                                                                      63219
                  3/4" Regulator #SCH REG75                                                             63220
                  Transmission Funnel HUF 6-1461                                                        63221
                  Auto In Line Lubricator 07951                                                         63222
                  Saf-T-Step 1 Galloon NAC-5                                                            63223
                  5030 Branick TC 550 Tire Dolly                                                        63224
                  Branick TC 550 Tire Dolly                                                             63225
                  1/2 x 5 Extension 2245 E                                                              63226
                  Flip Soc MM DP 2092DT                                                                 63228
                  SAE Flip Socket 2046DT                                                                63229
                  Hose Reel 3/8 x 50 Lincold 268                                                        63230
                  Blow Gun DIL 5114                                                                     63231
                  Tire Slick 1 gal ENV STML 1                                                           63232
                  Wheel Clamp ESC MX                                                                    63233
                  13 pc. Set 1/2" Impact Socket                                                         63234
                  14 pc. 1/2" Impact Socket                                                             63235
                  5 Ton Floor Jack HEI 68052                                                            63236
                  Astro Jack Stands (1 Pair)                                                            63237
                  Tube Test Tank HUD 5-3109                                                             63238
                  CP 731-2 Tire Wrench                                                                  63239
                  CP 746-2 1/2" dr. HD                                                                  63241
                  4/Way Wrench KEN T56                                                                  63800
                  4/Way Wrench STD KEN T57                                                              63801
                  Hub Cap Tool KEN T68                                                                  63802
                  Air Tool Oil MAV 085                                                                  63803
                  RIM Wheel Weight Gauge                                                                63804
                  Wonder Vac                                                                            63806
                  4-Way tool SCH 3522                                                                   63808
                  Truck Tire Valve SCH 501                                                              63809
                  Tread Depth Tool SCH 599                                                              63810
                  Valve Tool SCH 940                                                                    63811
                  Valve Tool SCH 992                                                                    63812
                  Valve Core Tool x2-111                                                                63813
                  Coupler 1/4 Fem A-3                                                                   63814
                  Coupler A-13                                                                          63815
                  Nipple/Male 1/4 A-3D                                                                  63818
                  Nipple/Female A-3E                                                                    63819
                  Chrome/Valve TR-416                                                                   63821
                  Air Chuck/Clip 6293                                                                   63822
                  Dual Foot Gauge X2-10 #54837                                                          63823
                  Milton Air Inflator Gauge                                                             63824

123

                  Snap-in Valves 413                                                                    63825
                  Tubeless Tire Snap 415                                                                63826
                  Snap-in Valves 418                                                                    63827
                  Snap-in Valves 423                                                                    63828
                  Wheel Weights 50 Box 50                                                               63829
                  Wheel Weights 75 Box 50                                                               63830
                  Wheel Weights 5 Box 50                                                                63831
                  Wheel Weights 1 onz Box 50                                                            63832
                  Wheel Weights 1.25 onz Box 50                                                         63833
                  Wheel Weights 1.5 onz Box 50                                                          63834
                  Wheel Weights 1.75 onz Box 50                                                         63835
                  Wheel Weights 2 onz. Box 50                                                           63836
                  Wheel Weights 2.75 onz. Box 50                                                        63839
                  Wheel Weights 3 onz.                                                                  63840
                  Wheel Weights 3.25 onz. Box 25                                                        63841
                  Wheel Weights 3.5 onz. Box 25                                                         63842
                  Wheel Weights 3.75 onz Box 25                                                         63843
                  Wheel Weights 4 onz. Box 25                                                           63844
                  Wheel Weights Aluma. 25 Plain                                                         63845
                  Wheel Weights Aluma. 5 Plain                                                          63846
                  Aluma 75 Wheel Weights 50/box                                                         63847
                  Aluma  1 pl Wheel Weights 50/box                                                      63848
                  Aluma 1.25 Wheel Weights 50/box                                                       63849
                  Aluma 1.5 Wheel Weights 50/box                                                        63850
                  Aluma 1.75 Wheel Weights 50/box                                                       63852
                  Aluma 2pl Wheel Weights 50/box                                                        63853
                  Aluma 2.25 Wheel Weights 50/box                                                       63854
                  Aluma 2.5 Wheel Weights 50/box                                                        63855
                  BTS 1 oz. Light Trucks LT1                                                            63856
                  BTS 1.5 oz. Light Truck LT1                                                           63857
                  BTS 2 onz. Light Truck LT1                                                            63858
                  BTS 2.5 onz. Light Truck                                                              63859
                  BTS 3 onz. Light Truck                                                                63860
                  BTS 3.5 onz Light Truck                                                               63861
                  BTS 4 onz. Light Truck                                                                63862
                  LT1-4 5 onz.  Box 25                                                                  63863
                  BTS 5 onz. Light Trucks LT1                                                           63864
                  BTS 6 onz. Light Trucks                                                               63865
                  CWW040 Alloy Wheel Wgts w/bins                                                        63866
                  X-109 W/W Tool                                                                        63867
                  200624 Wheel Weights                                                                  63868
                  SWA 3/8 x 4 Whip Hose                                                                 63869
                  SWA 3/8 x 10  Whip Hose                                                               63870
                  USC 11W White Crayon                                                                  63872
                  JD1MRC Magnet Roof Cap                                                                63873
                  KentG35 Hammer                                                                        63874
                  T15 Wire Rim Brush                                                                    63875
                  PAT19-100 Repair Video                                                                63876
                  6127 Safety Coil Hose                                                                 63878
                  TT-HB 1 tool Ser Remover                                                              63880
                  AST JS3T Jack Stand                                                                   63882

124

                  BER10R Locking Plier                                                                  63883
                  Vise Grip Pliers BER7R                                                                63884
                  Bead up for all passenger Tires                                                       63885
                  GDL50505 5 Gal Air Tank                                                               63887
                  Special Application Sockets                                                           63888
                  Working Bench 72x28"                                                                  63889
                  Bench Vise 5"                                                                         63890
                  FRN2A092 Wheel Chock                                                                  63891
                  IRT231P32 231 Cover                                                                   63892
                  Foam Cover                                                                            63893
                  Wheel Weights 2.25 oz. 50 ct.                                                        638361
                  T-5.00 Weights                                                                       638651
                  Installation Charges
                  Refrigeration Equipment
                  MID-12E Meat Cases for Refrigeration (Per Pricemart Specifications)                   53614
                  D6-12LE Dairy Cases for Refrigeration                                                 53617
                  HC4E-126 Coils for Refrigeration                                                      53619
                  MID 8E Meat Cases                                                                     90855
                  MID 8E Meat Cases                                                                     90855
                  D6L Deli Cases - C28LE                                                                90856
                  HC4E 252BK Alt Coils                                                                  90865
                  MK44-420EDL MM T Coils                                                                90866
                  HC6A 222BB Al T Coils                                                                 90867
                  MK36 354 Air B T Coils                                                                90868
                  HC6E 234BK Al T Coils                                                                 90869
                  Gal 36 135 A 115/1 kPSC Coils                                                         90870
                  LCVZ10410 Air Cool Cond. W/Legs                                                       90871
                  Installation Materials for Machine Room                                               90872
                  Bohn Coil Model # ADT070 AJ                                                           90873
                  Condensing Unit R05295                                                                90874
                  Mach. Rm. W/compres., coil, tank                                                      90876
                  Installation Labor, start up
                  Refrigeration Panels and Accessories
                  ------------------------------------
                  Control Panel for Air Cooled                                                         908711
                  Refrigeration panels and accessories                                                  50595
                  Refrigeration panels and accessories                                                  50595
                  Refrigeration panels and accessories                                                  50595
                  Refrigeration panels and accessories                                                  50595
                  Steel Beams for Refrg. Rooms                                                          90880
                  Steel Girt                                                                           908925
                  Steel Flat Bars                                                                      908926
                  Foamed Angles                                                                        908930
                  Tie Rod Assy                                                                         908927
                  Steel Bent Clips                                                                     908928
                  Bolts                                                                                908929
                  Columns                                                                              908921
                  Durs Doors/Cooler Doors                                                               90881
                  Duro Last Roof                                                                        90882
                  Sliding Doors with Rails                                                              90884
                  Glass Windows                                                                         97945
                  Plastic Curtains                                                                      90885

125

                  Anthony Glass Doors                                                                   90894
                  Anthony Glass Door Frames                                                             90895
                  Single Ballast for Anthony Doors                                                      90896
                  Metal Pull Boxes (Grey)                                                               9676
                  Light Tubes                                                                           9677
                  Cord Plugs                                                                            9678
                  Pipe Cape                                                                             9679
                  Pipe Hangers                                                                          9680
                  PVC Glue                                                                              9681
                  PVC Tubing                                                                            9682
                  Solder Flux                                                                           9683
                  Solder                                                                                9684
                  Black Steel Pipe                                                                      9686
                  Steel Channel Iron                                                                    9687
                  Steel Plate                                                                           9688
                  Steel Angle Iron                                                                      9689
                  Teflon Tape                                                                           9690
                  Electrical Clamps and Straps                                                          90906
                  Weather Proof Elect. Box                                                              90908
                  Weather Proof Box Covers                                                              90909
                  Tie Wraps Diff. Sizes                                                                 90910
                  Receptacals (Contractors)                                                             90911
                  4" Elec. Boxes and Misc. Covers                                                       90912
                  Alum. Flexible Tubes/Diff. Sizes                                                      90913
                  Electrical Couplings                                                                  90914
                  Lights Fixtures                                                                       90915
                  Threaded Pipe Nipples                                                                 90917
                  Stainless Steel Covers                                                                90918
                  K.O. Seals/Diff. Sizes                                                                90919
                  Heat Tape                                                                             90920
                  Book of #'s and letters                                                               90921
                  Misc. Hardware-Screws, Nuts                                                           90922
                  Wire Forks and Joints                                                                 90926
                  Communication Cables                                                                  90927
                  Wire Pulling Compound                                                                 90928
                  Light Fixture Lens Cover                                                              90929
                  Alum. Flex Fittings                                                                   90930
                  Electrical Fittings                                                                   90931
                  Copper Fittings                                                                       90933
                  Insulation/ Different Sizes                                                           90934
                  Hanging Brackets                                                                      90935
                  Plastic Snap in Bushings                                                              90936
                  Galvanized Pipe Fittings                                                              90937
                  PVC Fittings                                                                          90938
                  Selfoss (18"sq.)                                                                      90940
                  Tape-Diff. Colors and Sizes                                                           90941
                  Sand Cloth                                                                            90942
                  Valves-Different Sizes                                                                90944
                  Loose Roll #3 Black Wire                                                              90946
                  Clamps-Different Sizes                                                                90947
                  Struts Different Sizes                                                                90949

126

                  3/4" Unions                                                                           90950
                  Copper Tubing                                                                         90951
                  Liquid Tight Flex Fittings                                                            90953
                  100' Fish Tape                                                                        90954
                  Flexable Copper Tubing                                                                90956
                  Insulation Adhesive                                                                   90958
                  Electric Drill                                                                        90959
                  Grinder Wheels                                                                        90960
                  6lb. Sledge Hammer                                                                    90963
                  Impact Wrench                                                                         90964
                  4" Grinder                                                                            90965
                  Electrical Conduit                                                                    90966
                  5'x4' Gang Box w/handler                                                              90967
                  Fiberglass Ladders                                                                    90968
                  Electrical Wire Diff. Sizes                                                           90969
                  36" Prybar                                                                            90970
                  5 gal. Water Cooler                                                                   90971
                  Alum. Conduit Body Diff. Sizes                                                        90972
                  Skill Saw                                                                             90973
                  4" Level w/Case                                                                       90975
                  Caulkin Guns                                                                          90976
                  Electrical Cords                                                                      90977
                  Refrigerant R507                                                                      90996
                  1" Liquidtight Flex                                                                   91932
                  Bags of Wire Connectors                                                               91933
                  3/4" PVC Tape                                                                         91934
                  6" Lifting Bar                                                                        91938
                  Electric Concrete Drill                                                               91940
                  Misc. Refrigeration Access.                                                           91941
                  Post Hole Digger                                                                      91942
                  Silicone Paint                                                                        91943
                  Sawzall                                                                               91957
                  Double Channel Brackets                                                               91958
                  R507 Refrigerant (AZ50)                                                               90996
                  6 Gallon Wet/Dry Vacuum                                                              108190
                  Boxes of Nails                                                                       108185
                  Respirator                                                                           108002
                  Work Light                                                                           108177
                  Bags of Terry Towels                                                                 108176
                  5 Gal Buckets                                                                        108178
                  Paint Tray Kits                                                                      108182
                  Paint Brush Sets                                                                     108186
                  Pad Locks                                                                            108184
                  MIS Equipment
                  -------------
                  Warehouse- San Diego
                  Copy Machines
                  Local Printers / cables / local bought PC's
                  Central
                  -------
                  MIS Equipment- from San Diego
                  MIS Equipment- local bought Pc's, printers, fax machines
                  Sharp Copier

127

                  Light Fixtures
                  --------------
                  Type A1 - Single 1000W MH Polestar Fix - PT3C10M27NLSW                                90835
                  Type A3 - Twin MH Mtd. On 20' Polestar Fixt.                                         440027
                  Type B Wallpack II 175W - PT24000MH27SISw - Type B                                    90840
                  Type D - PrismAire Retail Fix.  - GMVR400/VBU - Type D                                90844
                  Type E -  Tril. Fill, exit sign - WL2K175MH27WH - Type E                              90844
                  Type G - Prismlight Fixt. - RA4000MH27H739A-CS                                        90845
                  Type G1 - Parkpack 70W MH Ceiliing Mount                                              90847
                  Type N  -   Prismaire Retail. Fixt 250 - MASLRU10SBK                                  90851
                  Type A2 - Single 400W Polestar                                                        90893
                  Type S 400W PrisFex w /beam                                                           90898
                  Type Z Wallpack II 70 W MH 277V - WL2K70DMH2TTT                                      227027
                  Type W1  Panelvue 400W Pipe - PANL4000MHHMTTW                                        400300
                  Type W Panelview 400W - Signlighter                                                  400600
                  Type Y Bantan 2000 175W MH - BA17DMH2CG                                              471727
                  Doors
                  -----
                  Hollow Metal Door                                                                     90775
                  Hardware - Finished                                                                   90778
                  Prefinished Wood Doors                                                                90779
                  Wall Louvers @ Generators                                                             90780
                  Stanley Magic Doors with Hardware                                                     90781
                  Toilet Partitions                                                                     90784
                  Atlas Rolite Doors- Insulated Polyurethane                                            90788
                  Glass and Aluminum Store front Doors                                                  90832
                  Generator
                  ---------
                  800RIZD-4 Kohler Gen-Set - 800 KW                                                     90678
                  Preventive maintenance and service-first year contracts

                  Central

                  Built in Cabinetry / Cubicle work
                  Expat- Coutry Manager/In charge of Const.  Vehicles
                  Expat- Operation Managers Vehicles

128

 

ANNEX
  “C”  

SCHEDULE OF EXECUTION OF MORTGAGE SUPPLEMENTS

	 	 
	1.	The first
      Mortgage Supplement shall be executed on a date that is not more than thirty
      (30) days prior to the date of the first Disbursement.
	 	 
	2.	Until
      both the Collateral Stores are complete and open for business operations,
      the next Mortgage Supplement shall be executed on about the date that is
      three (3) months after the execution of the Mortgage Supplement mentioned
      in No. 1 above, and each succeeding Mortgage Supplement shall be executed
      on or about the date that is three months after the immediately preceding
      Mortgage Supplement.
	 	 
	3.	From the
      time that both Collateral Stores are complete and open for business, Mortgage
      Supplements shall be executed on the anniversary of the date of the last
      Mortgage Supplement under No. 2 above.

129

 

 EXHIBIT
  “A” 

No. 

MORTGAGE SUPPLEMENT

        This
  Mortgage Supplement No. [*] (the “Supplement”) dated as of [*],
  is entered into by and between: 

	 	 
	(1)	PSMT PHILIPPINES,
      INC., a corporation organized and existing under the laws of the Republic
      of Philippines (the “PSPH”), and
	 	 
	(2)	INTERNATIONAL
      FINANCE CORPORATION, an international organization established by Articles
      of Agreement among its member countries including the Republic of the Philippines
      (“IFC”). 
	 	 

       WHEREAS,
  PSPH and IFC have executed and registered a Mortgage Agreement constituting
  Volume III to an Omnibus Agreement dated as of [*] (the “Omnibus Agreement”),
  to secure the Obligations of the Co-Borrowers under Volume II thereof, IFC Loan
  Agreement and the Mortgage Agreement;

       WHEREAS,
the Mortgage Agreement has been supplemented by the following Mortgage Supplements:
[*], [*] and [*]; 
       WHEREAS,
  the Mortgage Agreement provides that PSPH and IFC shall execute and register
  Mortgage Supplements for the purposes stated therein; and

       WHEREAS,
  in fulfillment of the continuing Obligation of the Co-Borrowers under the IFC
  Loan Agreement and the Security Documents, PSPH desires to execute this Mortgage
  Supplement with IFC.

       NOW
  THEREFORE, the parties hereto agree as follows:

	1.	Unless
      otherwise defined in this Mortgage Supplement, (i) capitalized terms shall
      have the meanings set forth in Article I of the IFC Loan Agreement and Section
      1.02 of the Mortgage Agreement unless the context otherwise requires, and
      (ii) the principles of construction set forth in said Article I of the IFC
      Loan Agreement and Section 1.03 of the Mortgage Agreement shall apply.
	 	 
	2.	Borrower
      hereby confirms that (i) certain of the Assets identified and described
      as [Future Real Assets/Future Chattel] in the Mortgage
      Agreement have come into existence or have been acquired in ownership by
      PSPH as of the date hereof (those certain assets to be herein called the
      “New Assets”), and (ii) the New Assets are now identified and
      more fully described in Schedule A to this Mortgage Supplement.
	 	 
	3.	 Borrower
      hereby acknowledges and agrees (i) that the [Real Estate Mortgage
      or the Chattel Mortgage, as may be applicable,
      has been granted, created, established and constituted on the New Assets
      in favor of IFC and (ii) that such Mortgages are subject to the same provisions,
      terms and conditions of the, Mortgage Agreement  

130

 

	 	 as are
      applicable to the Mortgage on the [Present Real Assets/Present Chattel]
      thereunder, as fully and completely for all legal intents and purposes as
      if owned by PSPH on the date of execution of the, Mortgage Agreement
	 	 
	4.	The parties
      hereto confirm that the New Assets serve as security for payment of the
      Secured Obligations to the extent of the amount stated in Section 3.01(c)
      of the Mortgage Agreement.
	 	 
	5.	PSPH undertakes,
      at its own cost and expense, to register this Mortgage Supplement with the
      register of deeds and, where necessary, other appropriate government agencies,
      in the Philippines in accordance with Section [*] of the Mortgage Agreement.
	 	 

       IN
  WITNESS WHEREOF, the parties hereto have caused their duly authorized representative
  to execute and deliver this Supplement as of the date first above written.

	 	 	 
	 	 	INTERNATIONAL
      FINANCE CORPORATION
	 	 	 
	 	By:	 
	 	 	

	 	 	Name:
	 	 	Position:
	 	 	 
	 	 	 
	 	 	PSMT PHILIPPINES,
      INC.
	 	 	 
	 	By:	 
	 	 	

	 	 	Name:
	 	 	Position:
	 	 	 

Signed in the presence of

________________________________          ________________________________

AFFIDAVIT OF GOOD FAITH

We swear
  that the Chattel Mortgage embodied in the foregoing 

  Mortgage Supplement is made for the purpose of securing the obligations

  specified therein, and for not other purpose, and that the
  same are just

  and valid obligations not entered into for the purpose of fraud. 

	 	 	 
	 	 	PSMT PHILIPPINES,
      INC.
	 	 	 
	 	 	 
	 	By:	________________________________________
	 	 	 
	 	Name:______________________________________
	 	 	 
	 	Title:_______________________________________

131

 

	 	 	 
	 	 	INTERNATIONAL
      FINANCE CORPORATION
	 	 	 
	 	 	 
	 	By:	________________________________________
	 	 	 
	 	Name:______________________________________
	 	 	 
	 	Title:_______________________________________

 

ACKNOWLEDGMENT AND CERTIFICATION OF OATH

REPUBLIC
  OF THE PHILIPPINES)

                       )
  S.S. 

     Before
  me, a notary public for [*], on this [*] day of [*], 200[*]

  at [*], Philippines, personally appeared:

	 	 	 
	Name	Community
      Tax Certificate

      No./ Passport No.

      	Issued
      at/on
	 	 	 
	PSMT Philippines,
      Inc.

      Represented by: 	 	 
	 	 	 
	International
      Finance

      Corporation

      Represented by:	 	 
	 	 	 

   all known to me
  and to me known to be the same persons who executed the foregoing Affidavit
  of Good Faith and made oath to the truth thereof and executed the foregoing
  Mortgage Supplement No. [*], who
  signed the foregoing Mortgage Supplement No. [*] in the presence of two witnesses,
  all of whom are known to me and by me known to be the same persons who executed
  the said instrument and they acknowledged to me that the same was their free
  and voluntary act, and the free and voluntary act of
  the corporations they respectively represent.

This Mortgage
  Supplement No. [*] relates to Volume III of the Omnibus Agreement dated as of
  [*] among the same parties and consists of [*] pages, including the pages of
  this Acknowledgment and Schedule A thereto and is signed by the parties thereto
  and their instrumental witnesses on the signature page and on the left margin
  of the other pages thereof.

IN WITNESS
  WHEREOF, I have hereunto set my hand and affixed my notarial seal this [*] day
  of [*], 200[*] at [*], Philippines.

Doc No.

  Page No.

  Book No.

Series of

132

 

Volume IV PLEDGE AGREEMENT

       PLEDGE
  AGREEMENT between PSMT and IFC. 

ARTICLE I.

  Definitions and Rules of Interpretation

       Section
  1.01. Certain Defined Terms. Unless otherwise defined herein,
  all capitalized terms used in this Pledge Agreement that are undefined herein
  and are defined in the IFC Loan Agreement (including those terms incorporated
  therein by reference to another document) shall have the respective meanings
  assigned to them in the IFC Loan Agreement.

     Section
  1.02. Additional Definitions. In addition to the terms defined
  pursuant to Section 1.01 whenever used in this Pledge Agreement, unless the
  context otherwise requires, the following terms have the following meanings:

	“Permitted
      Share Lien”	has the
      meaning ascribed to it in Section 2.01(b). 
	 	 
	“Pledge”	means
      the pledge created or to be created pursuant to Article III, together with
      the rights, benefits and remedies of IFC inherent therein and provided for
      herein. 
	 	 
	“Pledged Collateral”	has the meaning ascribed
      to it in Section 3.01.
	 	 
	“Pledged Shares”	 has the meaning ascribed
      to it in Section 3.01(a).
	 	 
	 “Secured
      Obligations”	means, collectively,
      (a) the obligations of the Co-Borrowers to IFC to pay the principal of and
      interest and fees (and all other amounts owing) on the Loan and (b) all
      other obligations and liabilities of the Co-Borrowers to IFC, whether direct
      or indirect, absolute or contingent, due or to become due, under this Pledge
      Agreement or any other Transaction Document.
	 	 
	“UCC”	 means the Uniform
      Commercial Code as the same may, from time to time, be in effect in the
      State of New York.

       Section
  1.03. Terms Defined in UCC. Except as otherwise defined herein
  and unless the context otherwise requires, terms used in this Agreement shall
  have the meanings assigned to them in the UCC.

       Section
  1.04. Rules of Interpretation. In this Pledge Agreement, unless
  the context otherwise requires, the rules of interpretation set forth in Section
  1.04 of the IFC Loan Agreement shall govern mutatis mutandis, as if
  this Pledge Agreement were the “Agreement” referred to therein.

ARTICLE
  II

  Representations
  and Warranties

       Section
  2.01. Representations and Warranties of PSMT. Without limiting
  the generality of Section 4.01 of the IFC Loan Agreement, PSMT further represents
  and warrants, as of the date hereof that:

	 	(a)	Ownership
      of Assets. PSMT is the legal and beneficial owner, with good, valid,
      indefeasible and marketable rights, interest and title, of the Pledged Collateral;
       
	 	 	 
	 	(b)	Freedom
      of Assets from Liens. The Pledged Collateral are and will be free
      from any Liens (including liens or retained security titles of conditional
      vendors) of any nature whatsoever and no warrants, options or other rights
      to acquire the same exist in favor of any other Person and no voting trusts,
      proxies or other commitments, understandings or arrangements exist with
      respect to the Pledged Shares, including without limitation the 
	 	 	 

133

 

	 	 	ability to vote, transfer,
      or receive dividends in respect of, the Pledged Shares, except for the pledge
      and security interest in favor of IFC created or provided for herein, which
      pledge and security interest constitute a first priority perfected pledge
      and security interest in and to all of the Pledged Shares (the “Permitted
      Share Lien”);
	 	 	 
	 	(c)	Government
      Approvals. This Agreement creates in favor of IFC a legal, valid
      and enforceable, and upon the delivery of the Pledged Collateral to IFC
      and the other filings, registrations, recordings, consents, approvals, notices,
      acknowledgments and other actions described in Schedule 1, first-priority
      perfected security interest in the Pledged Collateral, securing the payment
      and performance of the Secured Obligations. Other than the filings, registrations,
      recordings, consents, approvals, notices, acknowledgments and other actions
      described in Schedule 1, no filings, registrations, recordings, consents,
      approvals, notices, acknowledgments or other actions by or with any Authority
      or other Person are necessary (a) for the execution, delivery and performance
      by PSMT of this Agreement, (b) for the validity and enforceability
      of this Agreement, (c) in order to perfect, protect and preserve the
      security interest (and the priority thereof) of IFC in the Pledged Collateral
      created or intended to be created by this Agreement or (d) for the
      exercise by IFC of the rights, powers, remedies and privileges granted pursuant
      to this Pledge Agreement with respect to the Pledged Collateral. No mortgage
      or financing statement or other instrument of record covering all or any
      part of the Pledged Collateral has been filed or registered in any recording
      office; 
	 	 	 
	 	(d)	Priority
      of Mortgages. The Pledge constitutes a Lien of first rank in favour
      of IFC in and to the Assets, enforceable as such against PSMT, its creditors,
      and all third parties (except Liens that are mandatorily preferred under
      law);
	 	 	 
	 	(e)	Transferability.
      There are and will be no restrictions on the transferability by IFC of any
      Pledged Collateral transferred or delivered by PSMT hereunder to IFC or
      with respect to the foreclosure, transfer or disposition thereof by IFC,
      whether through contractual restrictions, restrictions in PSMT’s Charter
      Documents, or otherwise, other than (a) any such restriction contained
      herein or (b) as a result of the application of Applicable Law affecting
      the foreclosure and exercise of rights and remedies hereunder;
	 	 	 
	 	(f)	 Shares Not Subject
      to Restrictions.The Pledged Shares represented by the certificates
      identified in Annex A hereto are duly authorized, validly existing, fully
      paid and non-assessable and none of such Pledged Shares is or will be subject
      to any contractual restriction, or any restriction under the Charter of
      PSPH, upon the transfer of such Pledged Shares. 
	 	 	 
	 	(g)	Percentage Ownership.
      On the date of execution hereof, the Pledged Shares represented by the certificates
      identified in Annex A hereto constitute [fifty-two (52%)]
      percent of the issued and outstanding shares of capital stock of PSPH,

134

 

	 	 	all of
      which are registered in the name of PSMT, and said Annex A correctly
      identifies, as at the date hereof, the class and par value of the shares
      comprising such Pledged Shares and the number of shares (and registered
      owner thereof) represented by such certificate(s).
	 	 	 
	 	(h)	Records
      and Books. PSPH maintains its books and records with respect to
      the Pledged Shares at its principal place of business. 
	 	 	 
	 	(i)	Form
      Of Pledge. This Pledge Agreement is in proper legal form under
      the Laws of the Philippines and is capable of enforcement in the Philippines
      in accordance with its terms.

       Section
  2.02. Continuing Representations. The representations and warranties
  contained in Section 2.01 shall survive the execution of this Pledge Agreement
  and shall be deemed repeated on the date of each Disbursement of the Loan.

ARTICLE
  III

  Pledge

       Section
  3.01. Creation Of The Pledge. As collateral security for the prompt
  payment and performance in full when due (whether at stated maturity, by acceleration
  or otherwise) of the Secured Obligations, PSMT hereby pledges and grants to
  IFC, a continuing first priority pledge and security interest in all of PSMT’s
  right, title and interest in and to the following property, whether now existing
  or hereafter coming into existence (all being collectively referred to herein
  as “Pledged Collateral”):

	 	(a)	the shares
      of capital stock of PSPH represented by the certificate(s) identified in
      Annex A hereto (the “Pledged Shares”); 
	 	 	 
	 	(b)	 all shares,
      securities, moneys or property representing a dividend on any of the Pledged
      Shares, or representing a distribution or return of capital upon or in respect
      of the Pledged Shares, or resulting from a split-up, revision, reclassification
      or other like change of the Pledged Shares or otherwise received
      in exchange therefor, and any subscription warrants, rights or options issued
      to the holders of, or otherwise in respect of, the Pledged Shares;
	 	 	 
	 	(c)	in the
      event of any consolidation or merger in which PSPH is not the surviving
      corporation, (i) all shares (A) of each class of the capital stock of
      the successor corporation formed by or resulting from such consolidation
      or merger and (B) received in consideration of, or in exchange for, the
      Pledged  Shares
      and (ii) all other consideration (including, without limitation, all personal
      property, tangible or intangible) received in exchange for the Pledged Shares;
      and
	 	 	 
	 	(d)	all other tangible
      and intangible personal property of PSMT relating to the Pledged Shares,
      including, without limitation, all proceeds, profits, income, benefits,
      substitutions and replacements of and to any of the property of PSMT described
      in the preceding clauses of this Section 3.01.

135

 

       Section
  3.02. Delivery And Other Perfection. PSMT shall: 

	 	(a)
	forthwith
      either (x) transfer and deliver to IFC or its authorized designee such shares
      or securities (together with the certificates for any such shares and securities
      duly endorsed in blank or accompanied by undated stock powers duly executed
      in blank), all of which thereafter shall be held by the Pledgee, pursuant
      to the terms of this Pledge Agreement, as part of the Pledged Shares or
      (y) take such other action as IFC or its authorized designee shall
      deem necessary
      or appropriate to duly record the Lien created hereunder in such shares,
      securities, moneys or property; and
	 	 	 
	 	(b)	give,
      execute, deliver, file and/or record any financing statement, notice, instrument,
      document, agreement or other papers that may be necessary or desirable (in
      the judgment of IFC or its authorized designee) to create, preserve, perfect
      or validate the pledge and security interest granted pursuant hereto
      or to enable IFC to exercise and enforce its rights hereunder with respect
      to such pledge and security interest, including, without limitation, whenever
      an Event of Default has occurred and is continuing, causing any or all of
      the Pledged Shares to be transferred of record into the name of IFC or its
      nominee;

       Section
  3.03. First Priority Ranking of the Pledge. The Lien of IFC under this
  Pledge Agreement is and shall at all times constitute a Lien of first rank in
  favor of IFC in and to the Pledged Collateral, prior and superior to all other
  Liens, except liens that are mandatorily preferred under Applicable Law.

ARTICLE
  IV

  Covenants
  and Undertakings

       PSMT
  undertakes and agrees with IFC that throughout the continuance of this Pledge
  Agreement and so long as any amount of the Secured Obligations remains outstanding,
  unless IFC otherwise agrees in writing, PSMT shall comply with its affirmative
  and negative undertakings as set forth in Article VI of the IFC Loan Agreement,
  all of which affirmative and negative undertakings are incorporated by reference
  herein as if fully set forth herein, in accordance with the terms thereof.

       Section
  4.01. Execution of Deeds in General and Delivery of Pledged Collateral.
  In consideration of the express intention of the parties hereto that the Pledge
  shall cover the Pledged Collateral, whether such Pledged Collateral now exist
  or at any time hereafter come into existence and are now or at any time hereafter
  acquired by PSMT whether any such later acquisition is by way of addition thereto
  or substitution of any component part thereof, together with all rights and
  interests of PSMT therein, PSMT shall, from time to time and at its own cost
  and expense:

	 	(a)	execute,
      deliver and register such pledges, deeds, assignments, consents and assurances,
      including the Pledge Agreement Supplement, satisfactory to IFC, as may be
      necessary or advisable or, without prejudice to the obligation of PSMT to
      do so without being required by IFC, as required by IFC, for the purpose
      of pledging (with first ranking priority), conveying and/or transferring
      to IFC for its benefit, any Pledged Collateral hereafter coming into existence
      or acquired by PSMT upon the terms, provisions and conditions of this Pledge
      Agreement as fully and completely to all legal intents and purposes as if
      owned by PSMT on the date of execution hereof and specifically described
      herein;

136

 

	 	(b)	upon acquiring
      any Pledged Collateral hereafter, as soon as possible but not later than
      ten (10) Business Days after its acquisition thereof, comply with the requirements
      of 3.02 with respect to such additional Pledged Collateral. PSMT hereby
      agrees that all such Pledged Collateral listed shall for all purposes under
      this Pledge Agreement, be covered by the Pledge and agrees to take, and
      authorizes IFC to take, such further action as may be necessary or that
      IFC may deem reasonably advisable in order to establish and perfect the
      security interest granted under this Pledge Agreement and the Pledge Agreement
      Supplement with respect to such Pledged Collateral; and 
	 	 	 
	 	(c)	execute,
      deliver and register such renewals, amendments, supplements and instruments,
      satisfactory to IFC, as may be necessary, advisable or, without prejudice
      to the obligation of PSMT to do so without being required by IFC, as required
      by IFC, for the purpose of perfecting, confirming and/or maintaining the
      validity, first priority and enforceability of the pledge of the Pledged
      Collateral.

       Section
  4.02. Affirmative Covenants. Without limiting any rights of IFC under
  the Transaction Documents, unless IFC shall otherwise agree in writing and for
  as long as any amount of the Secured Obligations shall remain outstanding:

	 	(a)	Defence
      of Title. PSMT shall defend, all at its own expense, PSMT’s
      respective title and the existence, perfection and first priority of IFC’s
      security interest in the Pledged Shares against all adverse claims.
	 	 	 	 
	 	(b)	Percentage
      Ownership of PSPH. PSMT shall hold legal and beneficial title to
      shares of stock amounting to at least fifty-two (52%) percent of the issued
      and outstanding capital of PSPH.
	 	 	 	 
	 	(c)	Taxes,
      Duties, Fees. Except when contested in good faith by appropriate
      proceedings and for which an appropriate reserve has been established (provided
      that taxes, assessments and governmental charges are paid promptly, if after
      final determination of any such action or proceeding, the tax, assessment
      or charge is upheld), PSMT shall pay and discharge on time:
	 	 	 	 
	 	 	(i)	all taxes (including
      stamp taxes, value-added taxes, transfer taxes), fees, expenses, or other
      charges payable on or in connection with (x) the execution, issue, delivery,
      registration, or notarization, or for the legality, validity, or enforceability,
      of this Pledge Agreement and any other documents related thereto; and (y)
      provide IFC copies of the official receipts for such payments.
	 	 	 	 
	 	 	(ii)	all taxes, assessments
      and governmental charges levied or assessed on the Pledged Collateral and
      provide IFC with copies of the official receipts for such payments.
	 	 	 	 
	 	(d)	Books
      and Records. PSMT shall keep full and accurate books and records
      relating to the Pledged Shares, and stamp or otherwise mark such books and
      records in such manner as IFC may reasonably require in order to reflect
      the pledge and security interest granted by this Agreement;  
       
	 	 	 	 
	 	(e)	Inspection.
      PSMT shall permit representatives of IFC, at any time during normal business
      hours to inspect and make abstracts from its books and records pertaining
      to the Pledged Shares, in such manner as IFC may require; and
	 	 	 	 
	 	(f)	Material
      Communication. PSMT shall promptly deliver to IFC a copy of each
      material written notice or other material communication PSMT receives in
      respect of the Pledged Shares. 
	 	 	 

      Section
  4.03. Negative Covenants. Without limiting any rights of IFC under
  any other 

137

 

Transaction
  Documents, unless IFC shall otherwise agree in writing and for as long as any
  amount of the Secured Obligations shall remain outstanding:

	 	(a)	Other
      Financing Statements And Liens. Without the prior written consent
      of IFC, PSMT shall not file or suffer to be on file, or authorize or permit
      to be filed or to be on file, in any jurisdiction, any financing statement
      or like instrument with respect to the Pledged Shares in which IFC is not
      named as the sole secured party.
	 	 	 
	 	(b)	 Voting
      Trusts, Proxies, Other Arrangements. PSMT shall not enter into
      any voting trust, grant any proxies or enter into any other commitment,
      understanding or arrangement with respect to the Pledged Shares (including
      without limitation the ability to vote, transfer or receive dividends in
      respect of, the Pledged Shares), except for the Permitted Share Lien.
	 	 	 
	 	(c)	Sale
      or Disposition of Pledged Shares. PSMT shall not voluntarily sell,
      assign, exchange or otherwise dispose of the Pledged Shares or any interest
      therein.
	 	 	 
	 	(d)	Liens of Pledged
      Collateral. Except for the Permitted Share Lien, PSMT shall not
      permit or suffer to exist any Lien on the Pledged Collateral.
	 	 	 
	 	 (e)	Amendment,
      Modification or Waiver of Pledged Collateral. PSMT shall not consent
      to any amendment, modification or waiver with respect to any Pledged Collateral
      or any agreement or document creating or governing any Pledged Collateral,
      including the Charter of PSPH.
	 	  	 
	 	(f)	Books and Records.
      Without at least 30 days’ prior written notice to IFC, PSMT shall not
      maintain any of its books and records with respect to the Pledged Collateral
      at any office or maintain its principal place of business at any place other
      than at the current address of PSMT. 

     ARTICLE
  V

  Dividends,Voting
  and Other Rights

       Section
  5.01. Dividends. For as long as no Event of Default shall have occurred
  and be continuing, PSMT shall be entitled to receive and retain any dividends
  on the Pledged Shares paid in cash out of earned surplus to the extent not inconsistent
  with this Pledge Agreement and the IFC Loan Agreement.

       Section
  5.02. Voting/Other Rights. So long as no Event of Default shall have
  occurred and be continuing, PSMT shall have the right to exercise all voting,
  consensual and other powers of ownership pertaining to the Pledged Shares for
  all purposes not inconsistent with the terms of this Pledge Agreement, the IFC
  Loan Agreement or any other instrument or agreement referred to herein or therein,
  provided that PSMT agrees that it will not vote the Pledged Shares in any manner
  that is inconsistent with the terms of this Pledge Agreement, the IFC Loan Agreement
  or any of the other Transaction Documents.

ARTICLE
  VI

  Rights
  and Remedies of IFC

       Section
  6.01. Remedies Following Events of Default, Etc. During the period
  during which an Event of Default shall have occurred and be continuing: 

	 	(a)	Delivery
      of Pledged Collateral. PSMT shall immediately deliver all Pledged
      Collateral (and/or such representations or evidences thereof) not otherwise
      already in the possession of IFC, to IFC at such place or places as IFC
      shall specify;

138

 

	 	(b)	Rights
      and Remedies under UCC. IFC shall have all of the rights and remedies
      with respect to the Pledged Collateral of a secured party under UCC (whether
      or not said Code is in effect in the jurisdiction where the rights and remedies
      are asserted) and such additional rights and remedies to which a secured
      party is entitled under the Laws in effect in any jurisdiction where any
      rights and remedies hereunder may be asserted, including, without limitation,
      the right, to the maximum extent permitted by Law, to exercise all voting,
      consensual and other powers of ownership pertaining to the Pledged Shares
      as if IFC were the sole and absolute owner thereof and PSMT agrees to take
      all such action as may be appropriate to give effect to such right;
	 	 	 
	 	(c)	Collection.
      IFC in its discretion may, in its name or in the name of PSMT, demand, sue
      for, collect or receive any money or property at any time payable or receivable
      on account of or in exchange for any of the Pledged Collateral, but shall
      be under no obligation to do so;
	 	 	 
	 	(d)	Dividends.
      Whether or not IFC exercises any available right to declare the Secured
      Obligation due and payable or seeks or pursues any other relief
      or remedy available to it under Applicable Law or under this Pledge Agreement,
      the IFC Loan Agreement or any other Transaction Document, all dividends and
      other distributions on the Pledged Shares shall be paid directly to IFC
      and retained by it as part of the Pledged Shares, subject to the terms of
      this Pledge Agreement
      or the IFC Loan Agreement, and, if IFC shall so request in writing, PSMT
      agrees to execute and deliver to IFC the appropriate additional dividend, distribution
      and other orders and documents to that end, provided that if such Event
      of Default is no longer continuing, any such dividend or distribution theretofore
      paid to IFC shall, upon request of PSMT (except to the extent theretofore
      applied to the Secured Obligations), be promptly returned by IFC to PSMT.
	 	 	 
	 	(e)	Sale of Pledged
      Collateral. IFC may, upon ten Business Days’ prior written
      notice to PSMT of the time and place, with respect to the Pledged Collateral
      or any part thereof that shall then be or shall thereafter come into the
      possession, custody or control of IFC or any of its agent, sell, lease,
      assign or otherwise dispose of all or any part of such Pledged Collateral,
      at any exchange, broker’s board or any other place or places as IFC
      deems best, and for cash or for credit or for future delivery (without thereby
      assuming any credit risk), at public or private (to the extent permitted
      by Applicable Law) sale, without demand of performance or notice of intention
      to effect any such disposition or of the time or place thereof (except such
      notice as is required above or by applicable statute and cannot be waived),
      and IFC or anyone else may be the purchaser, lessee, assignee or recipient
      of any or all of the Pledged Collateral so disposed of at any public sale
      (or, to the extent permitted by Applicable Law, at any private sale) and
      thereafter hold the same absolutely, free from any claim or right of whatsoever
      kind, including any right or equity of redemption (statutory or otherwise),
      of PSMT or PSPH, any such demand, notice and right or equity being hereby
      expressly waived and released to the fullest extent permitted under Applicable
      Law. IFC may, without notice or publication, adjourn any public or private
      sale or cause the same to be adjourned from time to time by announcement
      at the time and place fixed for the sale, and such sale may be made at any
      time or place to which the sale may be so adjourned.

       Section
  6.02. Private Sale. IFC shall incur no liability as a result of the
  sale of the Pledged Collateral, or any part thereof, at any private sale pursuant
  to Section 6.01(e) hereof conducted in a commercially reasonable manner.
  PSMT hereby waives any claims against IFC or any of its agent arising by reason
  of the fact that the price at which the Pledged Collateral may have been sold
  at such a private sale was less than the price that might have been obtained
  at a public sale or was less than the aggregate amount 

139

 

of the Secured
  Obligations, even if IFC accepts the first offer received and does not offer
  the Pledged Collateral to more than one offeree.

       Section
  6.03 Attorney-in-Fact. Without limiting any rights or powers granted
  by this Pledge Agreement to IFC while no Event of Default has occurred and is
  continuing, upon the occurrence and during the continuance of any Event of Default,
  IFC or its authorized agent is hereby appointed the attorney-in-fact of PSMT
  for the purpose of carrying out the provisions of this Article VI and taking
  any action and executing any instruments that IFC may deem necessary or advisable
  to accomplish the purposes hereof, which appointment as attorney-in-fact is
  irrevocable and coupled with an interest. Without limiting the generality of
  the foregoing, so long as IFC shall be entitled under this Article VI to make
  collections in respect of the Pledged Collateral, IFC shall have the right and
  power to receive, endorse and collect all checks made payable to the order of
  PSMT representing any dividend, payment or other distribution in respect of
  the Pledged Collateral or any part thereof and to give full discharge for the
  same.

ARTICLE
  VII

  Termination

     When
  all Secured Obligations shall have been indefeasibly paid in full (and the IFC
  Loan Agreement shall have been terminated or expired) or the Pledged Collateral
  disposed of in accordance with Section 6.02(e) hereof, this Pledge Agreement
  shall terminate, and IFC shall (at the expense of PSMT) (i) forthwith cause
  to be assigned, transferred, delivered and released against receipt but without
  any recourse, warranty or representation whatsoever, any remaining Pledged Collateral
  and money received in respect thereof, to or on the order of PSMT and (ii) execute
  and deliver to PSMT upon such termination such termination statements and such
  other documentation as shall be reasonably requested by PSMT to effect the termination
  and release of the Lien of this Pledge Agreement on the Pledged Collateral.

ARTICLE
  VIII

  Miscellaneous

     Section
  8.01 Preservation of Rights. IFC shall not be required to take steps
  necessary to preserve any rights against prior parties to any of the Pledged
  Collateral.

     Section
  8.02. Preservation of Pledged Collateral. IFC may (but need not) pay
  or secure payment of any tax or other claim that may be secured by or result
  in a Lien on any Pledged Collateral. IFC may do any other thing that it in good
  faith believes is necessary to preserve, protect or maintain the Pledged Collateral
  or to enhance its value. PSMT shall immediately reimburse IFC for any reasonable
  payment or expense (including reasonable attorneys’ fees and expenses)
  IFC or its authorized agent may incur pursuant to this Section 8.02.

     Section
  8.03. (a) Continuing Security. PSMT hereby duly notes and agrees that
  the security hereby created in favor of IFC in the form of a pledge in accordance
  with the provisions of this Pledge Agreement shall be a continuing security
  and shall remain in full force and effect until all of the Secured Obligations
  shall have been fully paid in accordance with the provisions of the other Transaction
  Documents and this Pledge Agreement. Accordingly, the validity and enforceability
  of the pledge hereunder shall not be affected or impaired by any of the following:
  any extension of time, forbearance or concession given to any of the Co-Borrowers;
  any assertion of, or failure to assert, or delay in asserting, any right, power
  or remedy against the Co-Borrowers, or in respect of any other security for
  any of the Secured Obligations; any modification or amplification of the provisions
  of the other Transaction Documents or this Pledge Agreement or of any other
  agreement between any or both of the Co-Borrowers and IFC; any failure of any
  or both of the Co-Borrowers to comply with any requirement of any law, regulation
  or order; the dissolution, liquidation, reorganization or any other alteration
  of the legal structure of any or both of the Co-Borrowers; any purported or
  actual assignment of the Loan by IFC to any other Person; or any other circumstance
  (other than complete payment and performance by the Co-Borrowers of all the
  Secured Obligations) which might otherwise constitute a legal or equitable discharge
  of a security.

     (b)
  Partial Security. It is hereby agreed that the security created in
  accordance with the 

140

 

provisions
  of this Pledge Agreement shall be construed as a partial security for the Secured
  Obligations, and is in addition to any other security that IFC may, now or in
  the future, obtain to secure the same obligations. Accordingly, in the event
  that the monies at any time realized by IFC in the sale of the Pledged Collateral
  and/or in the exercise of any of their rights and powers hereunder shall not
  be sufficient to pay and discharge all the Secured Obligations, any remaining
  unpaid balance thereof shall remain due and payable on demand by IFC, until
  fully paid and all rights, powers and remedies of IFC in respect thereof are
  hereby reserved.

       Section
  8.04. Rescission of Payment. So long as this Pledge Agreement shall
  not have terminated pursuant to Article VII, for the avoidance of doubt, this
  Pledge Agreement shall continue to be effective or be reinstated, as the case
  may be, in respect of any payment, or a part thereof, of the Secured Obligations
  that is rescinded or must otherwise be restored or returned by IFC, upon the
  insolvency, bankruptcy or reorganization of any of the Co-Borrowers or otherwise,
  all as though such payment had not been made.

       Section
  8.05. (a) Application of Proceeds of Pledge. All monies realized and
  received by IFC in the exercise of its rights, powers and remedies hereunder
  shall be applied in accordance with Section 3.10 (Allocation of Partial Payments)
  of the IFC Loan Agreement.

       (b)
  Conversion to Required Currency. To the extent that the amounts due
  and payable to IFC are in a currency or currencies other than the currency of
  payment required under the IFC Loan Agreement, such currency or currencies shall
  for the purposes hereof be converted into the required currency of payment.

       Section
  8.06. Deficiency. If the proceeds of sale, collection or other realization
  of or upon the Pledged Collateral pursuant to Section 6.01(e) hereof are
  insufficient to cover the costs and expenses of such realization and the payment
  in full of the Secured Obligations, IFC shall retain all rights and remedies
  under this Pledge Agreement and the IFC Loan Agreement, and the Co-Borrowers
  shall remain liable, with respect to any deficiency.

       Section
  8.07. Further Assurances. From time to time while this Pledge Agreement
  is in force and effect, PSMT shall promptly, at the request of IFC, execute
  such documents, acts or powers as IFC may deem necessary or advisable to give
  full effect to any of its provisions.

       Section
  8.08. Taxes, Fees, etc. on Execution, Registration, etc. PSMT shall
  pay all taxes (including stamp taxes), duties, fees, expenses or other charges
  payable on or in connection with the execution, issue, delivery, registration
  and notarization of this Pledge Agreement and any document, act and registration
  performed pursuant hereto, and shall, upon notice from IFC reimburse IFC for
  any such taxes, duties, fees, expenses or other charges paid after notice to
  PSMT from IFC.

       Section
  8.09. (a) Rights and Remedies Cumulative. The rights, powers and remedies
  of IFC provided for in this Pledge Agreement are not exclusive of, but are in
  addition to, any other rights and remedies that IFC may have in law or under
  any other Transaction Documents. In addition, such rights, powers and remedies
  of IFC hereunder are granted for the exclusive benefit of IFC, and it is IFC’s
  prerogative to exercise any of such rights, powers and remedies in its discretion,
  but it shall have no obligation to do so; nor shall IFC be liable to PSMT or
  any other Person for any action taken or not taken by it pursuant to this Pledge
  Agreement. One or more exercises of the powers and rights herein granted shall
  not extinguish or exhaust such powers until the Pledged Collateral and all other
  property now or hereafter subject hereto or to any instrument now or hereafter
  evidencing, securing or relating to the Secured Obligations, is sold or the
  Secured Obligations are paid in full. If the Secured Obligations are now or
  hereafter further secured by any mortgages, chattel mortgages, pledges, contracts
  of guaranty, assignments or other security, IFC may exhaust the remedies granted
  under any of the said security instruments, either concurrently or independently,
  and in such order as IFC, in the exercise of its absolute discretion, may determine.

       (b)       No
  Waiver. No course of dealing and no delay in exercising, or omission to
  exercise, any right, power or remedy accruing to IFC or its attorney-in-fact
  upon any default or other circumstance under this Pledge Agreement shall impair
  any such right, power or remedy or be construed to be a waiver thereof or an
  acquiescence therein; nor shall the action of IFC or its attorney-in-fact in
  respect of such 

141

 

default or
  circumstance, or any acquiescence by it thereto, affect or impair any right,
  power or remedy of IFC or its attorney-in-fact in respect of any other default
  or circumstance, whether similar or not.

       (c)       Amendments,
  etc. with respect to the Loans. PSMT shall remain obligated hereunder,
  and the Pledged Collateral shall remain subject to the Lien created hereunder,
  notwithstanding that, without any reservation of rights against PSMT, the Transaction
  Documents and any other documents executed and delivered in connection therewith
  may be amended, supplemented or terminated, in whole or part from time to time,
  and any guarantee or other collateral security at any time held by IFC for the
  payment of the Secured Obligations may be sold, exchanged, waived, surrendered
  or released. IFC shall not have any obligation to PSMT to protect, secure or
  perfect any other Lien at any time held by it as security for the Secured Obligations
  or any property subject thereto.

       Section
  8.10. Severability. If any provision, term or condition of this Pledge
  Agreement or the application thereof to any Person or circumstance shall for
  any reason be held invalid or unenforceable, then, without prejudice to the
  provisions of Section 8.09 the same shall not adversely affect or impair the
  validity and enforceability of the other provisions, terms and conditions hereof
  nor the application of any such provisions, terms and conditions to any other
  Person or in any other circumstance.

       Section
  8.11 Notice. Any notice, request or other communication to be given
  or made under this Agreement shall be given in accordance with Section 1.02,
  Volume V, Miscellaneous; Execution.

       Section
  8.12 Benefit of Pledge Agreement. This Pledge Agreement shall be binding
  upon and inure to the benefit of each party hereto, its successors, assigns
  and transferees; provided, however, that PSMT may not assign or otherwise transfer
  all or any of its rights and obligations under this Pledge Agreement without
  the prior written consent of IFC. IFC may, at any time in conjunction with the
  assignment and transfer of any part of the Loan, transfer by way of assignment
  or novation, if not automatically occurring by operation of law, all or any
  part of its rights, benefits or obligations under the Pledge or this Pledge
  Agreement, without PSPH being in any way discharged from their obligations hereunder
  and without this Pledge Agreement or the Pledge created hereunder being deemed
  cancelled or terminated. Any purported assignment or transfer in violation of
  this Section shall be void.

       Section
  8.13 Discharge of Pledge. Subject to Section 8.04 (Rescission of Payment)
  and Article VII (Termination), IFC agrees to release the Pledged Collateral
  from the Pledge at the request of PSMT when the Secured Obligations shall have
  been fully and indefeasibly paid and performed. Notwithstanding the foregoing,
  all indemnities of PSMT herein shall survive such release and any termination
  of this Pledge Agreement. All taxes, fees and other costs imposed in connection
  with such release and termination shall be for the account of PSMT, and the
  payment thereof shall form part of the Secured Obligations.

       Section
  8.14. Lender Without Obligations. Notwithstanding anything contained
  herein, this Pledge Agreement and the Pledges are only intended as security
  for the Secured Obligations and IFC shall not be obligated to perform or discharge,
  nor does IFC undertake to perform or discharge, any obligation, duty, or liability
  of PSMT under or relating to any of the Pledged Collateral.

       Section
  8.15. Governing Law; Jurisidiction. The provisions of this Pledge Agreement
  shall be governed by and construed in accordance with the same governing law
  and rules of construction as are stipulated to apply to Volume II, IFC Loan
  Agreement. The provisions of Section 8.03 of Volume II, IFC Loan Agreement,
  shall apply in its entirety to this Pledge Agreement, with all references therein
  to the Co-Borrower applicable to PSMT.

       Section
  8.16. Applicability of IFC Loan Agreement. In amplification of, and
  notwithstanding any other provisions of this Pledge Agreement, in connection
  with its obligations hereunder, IFC has all of the rights, powers, privileges,
  exculpations, protections and indemnities as are provided for or referred to
  in the IFC Loan Agreement.

142

 

SCHEDULE
  1

FILINGS,
  REGISTRATIONS, RECORDINGS, CONSENTS, APPROVALS, NOTICES AND

  ACKNOWLEDGEMENTS REQUIRED UNDER APPLICABLE LAW.

1.UCC –1 Financing statement

(in respect of any pledge
  collateral not comprised of shares of stock with certificates delivered to IFC)

143

 

 ANNEX “A”
  

PLEDGED
  SHARES

-------------------------------------------------------------------------------------------------------------
        Class /Par Value            Certificate Number         Number of Shares           % of total PSPH
                                                                                              equity
-------------------------------------------------------------------------------------------------------------
Common/PHP100.00                            002                                     1
-------------------------------------------------------------------------------------------------------------
Common/PHP100.00                            003                                     1
-------------------------------------------------------------------------------------------------------------
Common/PHP100.00                            008                                     1
-------------------------------------------------------------------------------------------------------------
Common/PHP100.00                            009                               584,997
-------------------------------------------------------------------------------------------------------------
Total                                                                         585,000                    52%
-------------------------------------------------------------------------------------------------------------

 
144

 

Volume
  V – MISCELLANEOUS; EXECUTION

       This
  Agreement between IFC and the Co-Borrowers:

ARTICLE
  I

  Miscellaneous
  Provisions

       Section
  1.01. Headings Descriptive. The headings of the Articles, Sections
  and subsections of this Omnibus Agreement are inserted for convenience only
  and shall not in any way affect the meaning or construction of any provision
  of this Omnibus Agreement.

       Section
  1.02. Notices. Any notice, request or other communication to be given
  or made under this Omnibus Agreement or any Volume hereof shall be in writing.
  Subject to Section 6.03(i) and Section 6.03(h) (Reporting Requirements) and
  Section 8.03(f) (Applicable Law and Jurisdiction) of Volume II, IFC
  Loan Agreement, any such communication may be delivered by hand, airmail, facsimile
  or established courier service to the party’s address specified below or
  at such other address as such party notifies to the other party from time to
  time, and will be effective upon receipt.

	 	For the
      Co-Borrowers:
	 	 	 	 
	 	 	PriceSmart,
      Inc.

      4649 Morena Blvd.

      San Diego, CA 92117-3650
	 	 	 	 
	 	 	Attention:	   General
      Counsel 
	 	 	Facsimile:	   (858)
      581-4707
	 	 	 	 
	 	For IFC:
	 	 	 	 
	 	 	INTERNATIONAL
      FINANCE CORPORATION

      2121 Pennsylvania Avenue, N.W.

      Washington, D.C. 20433

      United States of America
	 	 	 	 
	 	 	Attention:	   Director,
      East Asia and Pacific Department
	 	 	Facsimile:	   (202)
      974-4340 
	 	 	 	 
	 	 	With a
      copy (in the case of communications relating to payments) sent to the attention
      of the Senior Manager, Financial Operations Unit, at:
	 	 	 	 
	 	 	Facsimile:	   202-974-4371
	 	 	 	 

        Section
1.03. English Language. (a) All documents to be provided or communications
to be given or made under this Agreement shall be in the English language. 
       (b)       To
  the extent that the original version of any document to be provided, or communication
  to be given or made, to IFC under this Omnibus Agreement or any other Transaction
  Document is in a language other than English, that document or communication
  shall be accompanied by an English translation certified by an Authorized Representative
  to be a true and correct translation of the original. IFC may, if it so requires,
  obtain an English translation of any document or communication received in another
  language other than English at the cost and expense of the Co-Borrowers. IFC
  may deem any such English translation to be the governing version between the
  Co-Borrowers and IFC.

       Section
  1.04. Successors and Assignees. This Omnibus Agreement binds and benefits
  the respective successors and assignees of the parties. However, the Co-Borrowers
  may not assign or delegate any of its rights or obligations under this Omnibus
  Agreement without the prior consent of IFC.

  
145

 

       Section
  1.05. Amendments, Waivers and Consents. Any amendment or waiver of,
  or any consent given under, any provision of this Omnibus Agreement or any Volume
  thereof shall be in writing and, in the case of an amendment, signed by the
  parties.

       Section
  1.06. Governing Law. The provisions of this Volume V shall be governed
  by and construed in accordance with the same governing law and rules of construction
  as are stipulated to apply to Volume II of this Omnibus Agreement.

       Section
1.07. Counterparts. This Agreement may be executed in several counterparts,
each of which is an original, but all of which together constitute one and the
same agreement. 

146

 

       IN
  WITNESS WHEREOF, the parties have caused this Agreement to be signed in their
  respective names as of the date first above written.

	 	 	 
	 	 	PRICESMART,
      INC.

      (as to Volumes I, II, IV and V)
	 	 	 
	 	By:	________________________________________
	 	 	 
	 	Name:
      Ariel F. Aguirre
	 	 	 
	 	Title:
      Authorized Representative
	 	 	 
	 	 	 
	 	 	 PSMT PHILIPPINES,
      INC.

      (as to Volumes I, II, III and V)
	 	 	 
	 	By:	________________________________________
	 	 	 
	 	Name:
      William S. Go,
      Sr.
	 	 	 
	 	Title:
      Chairman
	 	 	 
	 	 	 
	 	 	INTERNATIONAL FINANCE
      CORPORATION

      (as to Volumes I,II, III, IV and V)
	 	 	 
	 	By:	________________________________________
	 	 	 
	 	Name:
       
	 	 	 
	 	Title:
       
	 	 

Signed in
  the presence of

________________________________
           ________________________________

147

 

AFFIDAVIT OF GOOD FAITH

       We
  swear that the Chattel Mortgage embodied in the Volume III of the foregoing
  Omnibus Mortgage Agreement is made for the purpose of securing the obligations
  specified therein, and for not
  other purpose, and that the same are just and valid obligations not entered
  into for the purpose of fraud.

	 	 	 
	 	 	 PSMT PHILIPPINES,
      INC. 
	 	 	 
	 	By:	________________________________________
	 	 	 
	 	Name:
      William S. Go,
      Sr.
	 	 	 
	 	Title:
      Chairman
	 	 	 
	 	 	 
	 	 	INTERNATIONAL FINANCE
      CORPORATION
	 	 	 
	 	By:	________________________________________
	 	 	 
	 	Name:
       
	 	 	 
	 	Title:
       
	 	 

ACKNOWLEDGMENT AND CERTIFICATION OF OATH

REPUBLIC
  OF THE PHILIPPINES)

                       )
  S.S. 

     Before
  me, a notary public for ________, on this ________ day of

  ________, 2002 at ________, Philippines, personally appeared:

	 	 	 
	Name	Community
      Tax Certificate

      No./ Passport No.

      	Issued
      at/on
	 	 	 
	PSMT Philippines,
      Inc.

      Represented by:

      William S. Go, Sr.	 00629160	Manila/

      28 February 2002
	 	 	 
	International
      Finance

      Corporation

      Represented by:	 	 
	 
	all known
      to me and to me known to be the same persons who executed the foregoing
      Affidavit of Good Faith and made oath to the truth thereof.
	 
	Name	Community Tax Certificate

      No./ Passport No.

      	Issued at/on
	 	 	 
	PriceSmart, Inc.

      Represented by:

      Ariel F. Aguirre	 15078010	 Pasig City/

      28 January 2002
	 

148

 

	PSMT Philippines,
      Inc.

      Represented by:

      William S. Go, Sr.	 00629160	Manila/

      28 February 2002
	 	 	 
	International
      Finance

      Corporation

      Represented by:	 	 

being the
  authorized officer of PSMT Philippines, Inc., a party to the foregoing Omnibus
  Agreement, including the Mortgage Agreement comprising Volume III thereof, who
  signed the foregoing Omnibus Agreement in the presence of two witnesses, all
  of whom are known to me and by me known to be the same persons who executed
  the said instrument and they acknowledged to me that the same was their free
  and voluntary act, and the free and voluntary act of PSMT Philippines, Inc.
  

This Omnibus
  Agreement dated as of _________ between PriceSmart, Inc., PSMT Philippines,
  Inc. and the International Finance Corporation relates in part to the Mortgage
  Agreement covering Real Assets and Chattel identified and described in the Annex
  thereto, and consists of ______ pages, including the page of this Acknowledgement
  and the pages comprising the Mortgage Agreement are
  signed by the parties thereto and their instrumental witnesses on the signature
  page and on the left margin of each of the other pages thereof.

       IN
  WITNESS WHEREOF, I have hereunto set my hand and affixed my notarial seal this
  ___ day of ________, 2002 at _________, Philippines.

Doc No.

  Page No.

  Book No.

  Series of

149

 

District
  of Columbia) ss:

        I,
  __________________, the undersigned Notary Public, acknowledge that ______________,
  to me known and known by me to be the _______________ of International Finance
  Corporation, and the _______________ of PriceSmart, Inc., each executed the
  foregoing document in the name and on behalf of International Finance Corporation
  and Pricesmart, Inc, respectively, and acknowledged the signing thereof to be
  ____ voluntary act and deed.

 Washington,
  D.C., this ____ day of _______2002. 

	 	 
	 	

	 	My commission
      expires ______________

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