IN REPLY PLEASE QUOTE

July 02, 2001

TRUE
SM Prime Holdings
3rd F MSE Bldg.
Ayala Ave.

Makati

Attention: Mr. Henry Sy, Jr.

Senior Vice President

Re: Retainer Agreement

Gentlemen :

We confirm our understanding on the engagement of our firm as

legal counsel.

1. Effectivity: 01 April 2001

2. Retainer Fee: P20,000 per month (plus any applicable VAT) payable in
advance on or before the 10th day of each month.

a) The retainer fee shall be applied against legal services actually

performed by the Firm at the rates specified in Section 5.

b) Any services rendered after the retainer fee has been fully credited
to actual time charges shall be billed separately in accordance with
Section 5.

c) Any unutilized portion of the retainer fee shall neither be

refundable nor credited to subsequent months.

3. Scope of Services: The legal services available to you consist of

services in the nature of consultation, advice and opinion on all aspects
of Philippine law; drafting and review of contracts and legal
documents; litigation work, including appearances or representation
before judicial, quasi-judicial, legislative or administrative bodies or
officials; and legal services concerning special projects, such as Board
of Investments (BOI) or Securities and Exchange Commission (SEC)
registrations, legal audits, joint ventures, mergers and acquisitions,
RETAINER AGREEMENT PAGE 2 OF 5 PAGES

consolidations, business reorganizations, derivatives, international

trade and investments, e-commerce transactions, loan and collateral
security arrangements, project finance, securitization, real estate
investments and land development contracts, aviation, admiralty and
maritime matters, attendance at or handling of collective bargaining
negotiations, labor conciliation or arbitration, patent and trademark
work, immigration proceedings, estate, pension and executive
compensation planning, and securities offering and underwriting.

4. Correspondence, Pleadings and Documents: As a matter of course, we

will forward to you copies of all correspondence, pleadings and
documents generated or received by us regarding your affairs. This is
an inexpensive way to keep you advised of important developments. If
you have any questions regarding our handling of your matters, please
feel free to call us. There are times during which we may not be able to
come to the telephone. If you will leave a message at such times, a
lawyer or assigned assistant will get back to you as promptly as
possible. If you have a question requiring a short answer, feel free to
leave it with a secretary and he or she will return your call with the
response as promptly as possible.

5. Legal Fees: The Firm's fees are based primarily on an hourly rate. In
order to provide you with the full benefit of the Firm's expertise (as
opposed to restricting you to the limitations of any one lawyer), there
may be several different lawyers in the Firm working on your matters,
depending upon the degree of specialization required, who will
coordinate their efforts on your behalf. The Firm also will make use of
paralegal assistants who, under our supervision, may handle
numerous tasks involved in your representation at far less cost than we
would charge for a lawyer's time without diminishing the quality of
our services to you.

a) All lawyer and paralegal assistants who render services in your

behalf will record their time spent on your behalf on a daily basis
and will account for that time by tenths of hours. Lawyer and
paralegal time will be recorded at the standard hourly rate charged
by the Firm for that lawyer or paralegal at the time the services are
rendered. The present rates are as follows:

(i) P3,000.00 per hour for work done by a name partner;

(ii) P2,500.00 per hour for work done by a senior partner;
(iii) P2,000.00 per hour for work done by a junior partner;
(iv) P1,500.00 per hour for work done by a senior associate;
(v) P1,000.00 per hour for work done by a junior associate;
(vi) P500.00 per hour for work done by a paralegal.
RETAINER AGREEMENT PAGE 3 OF 5 PAGES

b) The Firm's hourly rates may change from time to time as a result of
general increases determined by the Firm in its discretion. Should
such a change occur during the course of the Firm's representation
of your interests, the Firm shall notify you of such change but for a
period of one (1) year following such notice, the Firm shall continue
to render statements to you at the previous hourly rates. Upon the
expiration of said one (1) year period, the new hourly rates shall
become effective.

c) In certain cases, the hourly rates set forth above do not constitute
the only factors that will be considered in arriving at your total fee.
In addition to the hourly charges, we consider, among others the
following factors as prescribed by our Code of Professional
Responsibility:

(i) The time spent and the extent of services rendered or

required;
(ii) The novelty and difficulty of the questions involved;
(iii) The importance of the subject matter;
(iv) The skill demanded;
(v) The probability of losing other employment as a result of
acceptance of the proferred case;
(vi) The customary charges for similar services;
(vii) The amount involved in the controversy and the benefits
resulting from the client from the service;
(viii) The contingency or certainty of compensation;
(ix) The character of the employment; and
(x) The professional standing, experience, reputation, and ability
of the lawyer or lawyers performing services on your behalf.

Taking into consideration the foregoing factors, we may, in certain

cases, charge you a premium or success fee in addition to our time-
based fees.

d) In the event you prefer not to be billed on an hourly basis, we are

amenable to alternative billing structures.

6. Disbursements: All reasonable and necessary costs and disbursements

incurred by the Firm incident to your affairs, such as telefax and
telephone charges, document reproduction and similar expenses, as
well as per diem, transportation and accommodation expenses
incurred in undertaking work for you shall be for your account.
Similarly, in litigation cases, whether judicial or administrative, filing
RETAINER AGREEMENT PAGE 4 OF 5 PAGES

fees in courts and administrative agencies, sheriff’s and private

investigator’s fees, cost of stenographic notes, postage and the like,
shall be for your account. Where such expenses are anticipated, we
ordinarily request that a deposit for such expenses be made by our
client.

7. Billing: The Firm will send you periodic invoices that will include a
chronological description of all work performed for your benefit by the
Firm (identifying the individuals who performed the services) and a
description of all costs/disbursements incurred by the Firm on your
behalf. Except as set forth below, payment is due within fifteen (15)
days after the date of the invoice.

a) All outstanding balances that are due for more than thirty (30) days
shall be subject to an interest charge of one percent (1%) per month
compounded monthly, from the thirty-first (31st) day outstanding
until paid in full. All payments made by you at any time on any
outstanding bill, first shall be applied to interest; and then shall be
applied to outstanding statements in the reverse order of their
being billed (i.e., most recent bill first).

b) Attorney’s fees and costs are a subject that many clients are hesitant
to discuss. We will respond to any questions or comments you may
have regarding our invoices to you. We also understand that errors
can be made by us in preparing an invoice. Therefore, please read
your invoices carefully, and, by all means, do not hesitate to contact
us if you have any questions regarding their contents.

8. Conflict of Interest: If, in the course of representing multiple clients,

we determine in our sole discretion that a conflict of interest exists
between you and any of our other clients, we will notify all affected
clients of such conflict and may withdraw from representing any one
or more of the multiple clients insofar as that particular matter is
concerned unless, after a full disclosure of the facts, consent is given by
all parties as required by our Code of Professional Responsibility.

9. Termination: This retainer agreement is subject to termination by

either party upon thirty (30) days written notice.

If the foregoing terms are acceptable, please signify your

conformity on the duplicate original of this letter and return the same to
us at your earliest convenience.
RETAINER AGREEMENT PAGE 5 OF 5 PAGES

We look forward to a meaningful and productive relationship with

you.
Very truly yours,
CAYETANO SEBASTIAN DADO
& CRUZ

By:

ARI BEN C. SEBASTIAN

ACKNOWLEDGEMENT

I hereby acknowledge that I have read and fully understand the foregoing
agreement. I further acknowledge that I have had any and all questions I
may have had concerning the same answered to my satisfaction. I agree to
comply with the terms and conditions stated therein.

AYALA LAND, INC.

By:

MERCEDITA S. NOLLEDO
Executive Vice President

ACS
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