DOJ Opinion No. 028, s. 1982

DOJ OPINION NO. 028 , s. 1982 February 26, 1982 To : The Banks parties to the Credit Agreement dated as of May 14, 1981 between Philippine Airlines, Inc. the Financial institutions listed as Managers therein, said Banks and National Bank of Canada (Pacific), Limited as Agent for said Banks, and to National Bank of Canada (Pacific) Limited, as Agent The Republic of the Philippines Gentlemen : This opinion is furnished to you pursuant to Section 3.01(g) of the Credit Agreement dated as of May 14, 1981 (the "Credit Agreement") between Philippine Airlines, Inc. (the "Borrower"), the financial institutions listed as Managers therein, the Banks parties thereto and National Bank of Canada (Pacific) Limited, as Agent. Terms defined in the Credit Agreement are used herein as therein defined. prcd As the Minister of Justice of the Republic of the Philippines, I have acted as counsel for the Guarantor in connection with the preparation, execution and delivery of the Guaranty and in that connection I have examined: (1) The Credit Agreement; (2) The Notes; (3) The Guaranty; (4) The documents furnished by Guarantor pursuant to Section 3.01(c), (d) and (e) of the Credit Agreement, which are in full force and effect as of the date hereof, and which include the following: (i) Full Powers, dated April 8, 1981, issued by the President of the Republic of the Philippines in favor of Minister of Finance Cesar Virata or Deputy Minister of Finance Alfredo Pio de Roda, Jr. or Deputy Minister of Finance Efren Plana. (ii) Letter of the Central Bank of the Republic of the Philippines, dated March 16, 1981, authorizing the Borrower to obtain the loan subject of the Credit Agreement. (5) The letter from the process agent for the Guarantor furnished pursuant to Section 3.01(i) of the Credit Agreement (the "Process Agent's Letter"); (6) The constitution of the Guarantor and all amendments thereto (the "Constitution"); (7) Such other documents, agreements and instruments, and such treaties, laws, rules, regulations, orders, decrees, writs, judgments, awards, injunctions, and the like, as I have deemed necessary as a basis for the opinions hereinafter expressed. Based upon the foregoing, I am of the opinion that: (a) The Guarantor has the full power, authority and legal right to incur the obligations provided for in the Guaranty, to execute and deliver the Guaranty, and to perform and observe the terms and provisions of the Guaranty. (b) The Guaranty constitutes a valid and binding obligation of the Republic of the Philippines enforceable in accordance with its terms. LexLib (c) There is no constitutional provision, treaty, statute, regulation, decree or similar authority or other legal or contractual obligation binding on the Guarantor which would be violated by its execution of the Guaranty or the performance or observance of any of the terms thereof. (d) The Guaranty has been duly authorized by all necessary action of the Guarantor and duly executed and delivered by the Guarantor, and all of the covenants of the Guarantor contained therein constitute irrevocable and unconditional direct obligations of the Guarantor for the payment and performance of which its full faith and credit is pledged and no further authorization or approval (including exchange control approval) or other action by, and no notice to or filing with, any governmental body or authority is necessary for the execution, delivery and performance by the Guarantor of the Guaranty. The documents with respect to the Guaranty included in the documents furnished pursuant to Section 3.01(c) of the Credit Agreement are in full force and effect. (e) Upon the making of any payment under the Guaranty, the Guarantor would not have any recourse against the assets of the Agent or against any Bank in its individual capacity. (f) In the event of the Borrower being dissolved, or the property, rights and liabilities of the Borrower being transferred to any other corporation or entity, the Guaranty will remain a valid and binding obligation of the Guarantor enforceable in accordance with its terms prior to, upon and after the consummation of said transactions. (g) The choice of New York law to govern the Guaranty is, under the law of the Republic of the Philippines, a valid choice of law and will be honored by the courts of the Republic of the Philippines. (h) Under the laws of the Republic of the Philippines the Guarantor has validly submitted to the jurisdiction of the Supreme court of New York County, New York, and of the U.S. District court for the southern district of New York and, in the event that a judgment of such courts was obtained after service of process in the manner specified in Section 7 of the Guaranty, such judgment would be enforced by the courts of the Philippines subject only to defenses of want of jurisdiction over the subject matter or nature of the action on the part of the court that rendered the judgment, want of due notice, collusion, fraud or clear mistake of law or fact. LexLib (i) To the best of my knowledge after due inquiry, the obligations of the Guarantor under the Guaranty rank at least pari passu in priority of payment with all other unsecured obligations of the Guarantor for borrowed money payable in a currency other than the lawful currency of the Republic of the Philippines, and there is no lien, security interest or other charge or encumbrance, and no other type of preferential arrangement upon or with respect to any of the properties or income of the Guarantor, which secure External Indebtedness of any Person, except as referred to in Section 9(c) of the Guaranty. (j) Neither the Guarantor nor any of its property has any immunity from jurisdiction of any court or from any legal process (whether through service or notice attachment prior to judgment, attachment in aid of execution, execution or otherwise) under the laws of the Philippines. The waiver of immunities, the submission to the jurisdiction of the New York State and Federal courts sitting in New York City, and the appointment of the Process Agent as specified in the Guaranty, contained in Section 7 of the Guaranty, are irrevocably binding on the Guarantor. The Process Agent's Letter has been duly authorized, executed and delivered by the Process Agent and is irrevocably binding on the Process Agent. (k) There is no tax, levy, impost, deduction, charge or withholding imposed by the Philippines or any political subdivision or taxing authority thereof or therein either (i) on or by virtue of the execution of delivery of the Guaranty or any other document to be furnished thereunder or (ii) on any payment to be made by the Guarantor pursuant to the Guaranty. (l) To ensure the enforceability or admissibility in evidence of the Guaranty in the Philippines, it is not necessary that the Guaranty or any other document be filed or recorded with any court or other authority in the Philippines or that any stamp or similar tax be paid on or in respect of the Guaranty or that any notarial or similar action be taken with respect to the Guaranty or any other document delivered in connection therewith. (m) The Guaranty is in proper legal form under the law of the Philippines for the enforcement thereof against the Guarantor under the law of the Philippines. (n) It is not necessary under the laws of the Philippines (i) in order to enable the Banks and the Agent or any of them to enforce their respective rights under the Guaranty (ii) by reason of the execution, delivery or performance of the Guaranty, that any of them should be licensed, qualified or entitled to carry on business in the Philippines. The foregoing opinion is subject to the provisions of Section 133 of the Corporation Code of the Philippines, which states that no foreign corporation transacting business in the Philippines without license, or its successors or assigns, shall be permitted to maintain or intervene in any action, suit or proceeding in any court or administrative agent of the Philippines. (o) Neither the Agent and the Banks nor any of them is or will be resident, domiciled, carrying on business or subject to taxation in the Philippines by reason only of the execution, delivery, performance or enforcement of the Guaranty. I express no opinion in respect of matters governed by or construed in accordance with any laws other tan those of the Philippines. Very truly yours, (SGD.) RICARDO C. PUNO Minister of Justice