DOJ Opinion No. 006, s. 1980

DOJ OPINION NO. 006 , s. 1980 January 14, 1980 Credit Llyonnais Hong Kong (Finance) Ltd. 27th Floor, Alexandra House Chater Road, Central Hong Kong as agent for the Syndicate of Banks and Financial Institutions named and mentioned in Schedule 1 of the Agreement (the "Lenders") Re: Loan Agreement dated as of October 20, 1979 . Gentlemen : As the Minister of Justice of the Republic of the Philippines (the "Guarantor"), I have been requested to render an opinion in connection with the Loan Agreement dated as of October 20, 1979 (the "Loan Agreement") by and among the National Power Corporation (the "Borrower"), the Republic of the Philippines as guarantor, the Lenders, Managers and Adviser named therein and Credit Lyonnais Hong Kong (Finance) Ltd. as agent of the Lenders (the "Agent"), which provides for a loan to the Borrower in an aggregate principal amount not to exceed FIFTY MILLION UNITED STATES DOLLARS (US$50,000,000), subject to the terms and conditions stated in the Loan Agreement. All terms used herein have the meaning set forth in the Loan Agreement. In rendering this opinion I have examined the Constitution, all relevant Civil Code provisions, presidential decrees and such other provisions of law and all such public records and documents as are necessary in connection herewith, including the following documents: (a) An executed copy of the Loan Agreement including the Schedule and Exhibits attached thereto; (b) Republic Act No. 6395, as amended (An Act Revising the Charter of the National Power Corporation); (c) Full powers granted by the President of the Philippines, in favor of Hon. Cesar E. Virata, Minister of Finance, dated October 15, 1979, "to sign, approve, execute and deliver for and in behalf of the Republic of the Philippines (as Guarantor) the loan agreement . . . and such other documents as may be necessary and appropriate to make effective and implement the said loan agreement and the guarantee of the Republic of the Philippines"; LexLib (d) Certification of the Treasurer of the Philippines dated November 13, 1979, that the Republic of the Philippines is not in default under any agreement, obligation or duty relating to External Indebtedness to which it is a party or by which it, or any of its assets, is bound; (e) Telex message dated November 20, 1979 of Mr. Leo Van Houtven, Secretary of the International Monetary Fund certifying that the Republic of the Philippines ("Guarantor"), as of the close of business on November 20, 1979 was a member of the International Monetary Fund and was fully eligible to use the Funds resources in accordance with its articles of agreement and that Guarantor was on said date a participant in the special drawing rights department of the Fund, which was transmitted to this Office by the Borrower; In such examination, I have assumed the genuineness of all signatures and the authenticity of all documents submitted to me as originals, and the conformity with the original of all documents submitted to me as copies thereof, and I have found nothing to indicate that such assumptions are not fully justified. As to any other matters of fact materials to the opinions expressed herein, I have relied upon certificates of official and other representatives of the Guarantor. As I am qualified to advise the Guarantor regarding the laws of the Republic of the Philippines and do not represent myself to be familiar with the laws of the United States of America or any state thereof or the laws of any jurisdiction other than the Republic, I do not pass upon and I express no opinion in respect of those matters governed by or construed in accordance with any of such foreign laws. LibLex Based upon and subject to the foregoing, I am of the opinion that: 1. The Guarantor has full power and authority to give the guaranty provided for in the Loan Agreement, to execute and deliver the Loan Agreement and to perform and observe the terms and conditions thereof; 2. The Guarantor has taken all necessary legal action to authorize the execution and delivery of the Loan Agreement and to perform and observe the conditions thereof. Mr. Cesar E. Virata, Minister of Finance of the Guarantor, was duly authorized by Ferdinand E. Marcos, President of the Republic to execute and deliver the Loan Agreement for and on behalf of the Guarantor, and his signature thereon legally binds the Guarantor and he has been further authorized to execute and deliver all other documents required by the terms of the Loan Agreement; LexLib 3. There is no constitutional or treaty provision, law ordinance, decree of regulation, and to the best of my knowledge no contractual or other obligation binding on the Guarantor nor any governmental guideline or policy statement applicable to the Guarantor that is or will be contravened or which will result in the imposition of any lien, charge, encumbrance or other security interest, or any segregation or other preferential arrangement (whether or not constituting a security interest) by reason of the execution and delivery of the Loan Agreement or any of the Notes or by the performance or observance by the Guarantor of any of the terms of the Loan Agreement; 4. All authorizations, approvals, consents and licenses from all legislative bodies or government agencies necessary in order for the Guarantor (i) to give the guaranty provided for in the Loan Agreement, (ii) to execute and deliver the Loan Agreement and to execute all other documents and instruments to be delivered thereunder, (iii) to perform and observe the terms and conditions thereof and (iv) to make all payment in Dollars as required thereunder, have been obtained and continue in full force and effect; 5. The Loan Agreement constitutes the legal, valid and binding obligation of the Guarantor enforceable in accordance with its terms. The obligations thereunder are and will be direct, unconditional and general obligations of the Guarantor, for the payment and performance of which the full faith and credit of the Guarantor has been pledged; 6. The Guarantor is not in default under any agreement, obligation or duty relating to External Indebtedness to which it is a party or by which it, or any or its assets, is bound; 7. The Guarantor's obligations under the Loan Agreement rank at least pari passu in priority of payment and in all other respects with all other External Indebtedness of the Guarantor. No External Indebtedness of the Guarantor is secured by, or otherwise benefits from, any lien, charge, encumbrance or other security interest or any segregation or other preferential arrangement of any kind, on, or with respect to, any assets, revenues or rights to the receipt of income of the Guarantor other than (i) liens, charges, encumbrances or other security interests upon the Guarantor's property established or assumed at the time of purchase to secure payment of the purchase price of such property, and (ii) liens arising in the ordinary course of banking transactions securing a debt maturing not more than one year after its date; 8. To the best of my knowledge, there is no pending or threatened legal action or arbitration or other proceeding which may materially affect the financial condition of the Guarantor or the validity or enforceability of the Loan Agreement; 9. The execution, delivery and the performance by the Guarantor of the Loan Agreement constitute private or commercial acts and not public or governmental acts. The agreement by the Guarantor not to claim immunity from legal proceedings with respect to itself or any of its property on the grounds of sovereignty or otherwise under any law or in any jurisdiction where an action may be brought for the enforcement of any of the obligations arising under or relating to the Loan Agreement or any of the Notes or for the Attachment of property or the execution of any judgment with respect thereto and the waiver of any rights to sovereign immunity contained in Section 13.07 of the Loan Agreement are irrevocable and binding on the Guarantor; 10. The Guarantor is a member in good standing of the International Monetary Fund and is fully eligible to purchase dollars and other currencies from the International Monetary Fund in exchange for Pesos; 11. There are no income or other taxes or charges of the Republic or any political subdivision or taxing authority thereof or of any taxing authority, federation or association of which the Republic is a member, imposed by withholding or otherwise, applicable to any payment to be made by the Guarantor or to any amounts to be received by any of the Lenders, the Managers or the Agent pursuant to the terms of the Loan Agreement or the Notes or to be imposed on or by virtue of the execution, delivery, performance or enforcement of the Loan Agreement or any of the Notes. In the event that the Guarantor or any such political subdivision, taxing authority, federation or association should in the future impose such a tax, withholding or charge, whether by change in law, regulation or the interpretation thereof, the Guarantor is obligated to make all payments due under the Loan Agreement and each of the Notes free and clear of any such tax, withholding or charge so that each Lenders, each Manager and the Agent shall receive the amounts due as if no such tax, withholding or charge had been imposed. None of the Lenders, the Managers or the Agent shall be deemed to be resident, domiciled, to have established a place or business or to be carrying on business in the Republic by reason of the execution, delivery, performance or enforcement in such jurisdiction of the Loan Agreement or any related documentation; 12. Other than the filing of an executed copy of the Loan Agreement with the Central Bank, it is not necessary or advisable under the laws of the Republic in order to assure the validity, effectiveness or enforceability of the Loan Agreement or each of the Notes, or any part thereof, that any such agreement or instrument be filed, registered or recorded in any public office or elsewhere or that any other instrument relating thereto be executed, delivered, filed, registered or recorded; prcd 13. The choice of New York law to govern the validity, construction and performance of the Loan Agreement and each of the Notes and the transactions therein contemplated is a valid and irrevocable choice of law and the submission by the Guarantor to the jurisdiction of the courts of the State of New York and the Federal courts of the United States of America located in the City and State of New York is valid submission to the jurisdiction of such courts. In the event that a judgment of such courts were obtained after service of process in the manner specified in the Loan Agreement, the same would be enforced by the courts of the Republic by suit on the judgment, subject to defenses of lack of jurisdiction, notice to parties, collusion, fraud, or clear mistake of law or fact. A copy of this opinion may be delivered by you to each Lender, who may rely upon such copy as if it were an original addressed to such Lender. Very truly yours, (SGD.) RICARDO C. PUNO Ministry of Justice