Bautista Picazo Buyco Tan & Fider

February 11, 1997 Bautista Picazo Buyco Tan & Fider 5th Flr., Singapore Airlines Bldg. 138 H.V. dela Costa St., Salcedo Village Makati City Attention : Atty . Antonio A . Picazo S i r : This refers to your letter dated January 17, 1997 requesting advice on the following queries: 1. Whether or not usufructuary rights over properties are acceptable as consideration for the issuance of shares of stock. 2. In the valuation of trademark, what would be considered as a fair valuation by the SEC and who will make such valuation. Please be advised that the Commission had previously allowed leasehold or usufructuary rights over properties as payment for the issuance of shares of stocks, provided that a comprehensive appraisal report is submitted to support the valuation of the leasehold or usufructuary rights, subject to the usual examination of the valuation to be conducted by the Examiners and Appraisers Department. (Re: Kephil Shipyard, inc. Sept. 16, 1993 Commission Meeting) As to the second query, a trademark can be valued initially at cost which can be directly associated with or traced to their acquisition or creation. If the value assigned in consideration for the issuance of shares of stock is above cost, like the usufructuary rights, a comprehensive appraisal report is required to support the valuation subject to the unusual examination of the valuation to be conducted by the Examiners and Appraisers Department. Very truly yours, (SGD.) PERFECTO R. YASAY, JR. Chairman