Supplemental Pledge Agreement on Substitution of Shares Not Subject to Documentary Stamp Tax

February 3, 1999 BIR RULING NO. 015-99 000-00-015-99 Alba Romeo & Co. 7/F Don Chua Lemko Building H.V. dela Costa Street Salcedo Village Makati City Gentlemen : This refers to your letter dated December 16, 1998 stating that on December 1, 1997, Telectronic System, Inc. (TSI) executed an Omnibus Agreement for a US$10M bridge loan from Citibank N.A.; that the said bridge loan was guaranteed by Qualcom, Inc. (Qualcom); that the guarantee is secured by a pledge of New Timco shares owned by TSI; that on March 2, 1998, TSI availed another bridge loan in the amount of US$3.6M from Citibank N.A. secured again with a pledge by TSI of more shareholdings in New Timco; that all together, TSI has pledged 15% of its shareholding in New Timco to Qualcom to secure US$13.6M bridge loan which was procured from Citibank N.A. and guaranteed by Qualcom; and that as guarantor of the bridge loan, Qualcom has requested TSI for a substitution of the New Timco share with a corresponding number of Retelcom shares owned by New Timco which will continue to secure the total US$13.6M bridge loan. In connection therewith, you are requesting confirmation of your opinion that a supplemental pledge agreement that will substitute New Timco shares with Retelcom shares without any change in the terms and conditions of the pledge agreement except for the substitution of shares is not subject to documentary stamp tax. In reply, please be informed that Pledge Agreement is subject to the payment of documentary stamps tax imposed under Section 195 of the Tax Code of 1997. However, the execution of a supplemental Pledge Agreement by TSI in favor of Qualcom which will only substitute the New Timco shares pledged under the original pledge agreement with a corresponding number of Retelcom shares owned by New Timco, without any change in the terms and conditions of the pledge agreement as well as the amount of the loan of TSI from Citibank N.A. guaranteed by Qualcom is no longer subject to the documentary stamp tax imposed under Section 195 of the Tax Code of 1997. This ruling is being issued on the basis of the foregoing facts as represented. However, if upon investigation, it will be disclosed that the facts are different, then this ruling shall be considered null and void. Very truly yours, (SGD.) BEETHOVEN L. RUALO Commissioner of Internal Revenue