DOJ Opinion No. 080, s. 1990

DOJ OPINION NO. 080 , s. 1990 To the Banks and the Servicing Bank parties to the Restructuring Agreement referred to below Gentlemen : This opinion is furnished to you pursuant to Part D-3(b)(iii) of the Second Amendment, dated as of January 22, 1990 (the "Second Amendment"), to the Restructuring Agreements, dated as of January 10, 1986 (as modified or amended, including as amended by the First Amendment and the Second Amendment, the "Restructuring Agreements") among the Republic of the Philippines, as Obligor (as successor by assumption pursuant to Part A-2 of the First Amendment to the indebtedness and obligations of Philippine National Bank, as original Obligor, under the Restructuring Agreement), the Republic of the Philippines, as Guarantor, The Chase Manhattan Bank, as Servicing Bank, and the Banks and Existing Agent parties thereto. Terms defined in the Restructuring Agreement are used herein as therein defined. prcd I am the Secretary of Justice of the Obligor and have acted in such capacity in connection with the preparation, execution and delivery of, and the satisfaction of the conditions precedent to the Second Amendment Effective Date for the Restructuring Agreement under, the Second Amendment. In that connection I have examined: (1) The Second Amendment and the Restructuring Agreements (as amended by the First Amendment); (2) The Obligor Amendment Authorizations and the Obligor Second Amendment Authorizations identified and attached to the certificate dated delivered pursuant to Part D- 3(b)(i) of the Second Amendment; and (3) such official records; certificates, rulings and orders of agencies and officers of the Obligor and The Guarantor, and such other agreements and documents as I have deemed appropriate as bases for the opinions expressed herein. In my examination of the documents listed above, I have assumed that, except for all documents executed by the Obligor, (i) all such documents are authentic and have been duly executed and delivered by or on behalf of each of the parties thereto, (ii) all signatures on all such documents are genuine and copies of all documents submitted to me are complete and conform to the original documents, and (iii) the Second Amendment and the Restructuring Agreement have been duly authorized by each of the Banks and the Servicing Banks. Insofar as the opinions expressed herein relate to factual matters, information with respect to which is in the possession of the Obligor but not in my possession, I have made inquiries with respect to such matters and relied upon representations of officers of the Obligor, and nothing has come to my attention leading me to question, or giving me reasonable grounds to question, the accuracy of such information. I have also relied on acknowledgments of the obligor and each Bank contained respectively in Section 2.05 and of the Restructuring Agreement. The opinions hereinafter set forth are limited to matters of the Philippine law, and no opinion is expressed as to the laws of any jurisdiction other than the Republic of the Philippines I have assumed, as the Second Amendment and the Restructuring Agreement are governed by New York law, that the obligations contained therein are legal, valid and binding, and enforceable obligations under New York law. I have relied on the opinions of special New York counsel to the Obligor and the Guarantor (which I have assumed will be delivered in substantially the forms annexed to the Second Amendment) as to matters of New York law which are relevant to the opinions expressed herein. Based upon the foregoing and subject to the qualifications and observations set forth below, I am of the opinion that: (a) The Obligor is the Republic of the Philippines, a sovereign entity. (b) The execution and delivery by the Obligor of the Second Amendment and the performance by the Obligor of the Second Amendment and each Restructuring Agreement are within its powers, have been duly authorized by all necessary legislative, executive, administrative and other governmental action under the laws of the Philippines, and do not contravene the Constitution, any law or any contractual restriction binding on or affecting the Obligor or any of its assets. The Obligor has full power and authority to execute and deliver the Second Amendment and to perform and observe the provisions of the Second Amendment and the Restructuring Agreement on its part to be performed or observed. (c) No authorization or approval (including exchange control or transfer approval) or other action by, and no notice to or filing with, any governmental authority or regulatory body in the Philippines is required for the due execution and delivery by the Obligor of the Second Amendment and the performance by the Obligor of Second Amendment and the Restructuring Agreement, except for the Obligor Second Amendment Authorizations and the Obligor Authorizations , all of which have been duly obtained or made, are unconditional and are in full force and effect (except as the Obligor Authorizations may have been modified by the Obligor Amendment Authorization or as any of such Authorizations may have been modified by the Obligor Second Amendment Authorizations). (d) The Second Amendment has been duly executed and delivered by the Obligor and the Second Amendment and the Restructuring Agreement are the legal, valid and binding obligations of the Obligor, enforceable against the Obligor in accordance with their respective terms, except as enforceability in the Philippines may be limited or affected by moratorium or similar laws affecting creditors rights generally. (e) The Second Amendment and the Restructuring Agreement and each payment obligations of the Obligor thereunder are the direct, unconditional and general obligations of the Obligor, the payment of which is guaranteed by the Guarantor. (f) The obligations of the Obligor under the Second Amendment and the Restructuring Agreement rank at least pari passu with all other existing unsecured External Indebtedness of the Obligor. There is no (and there will not be as result of the execution and delivery of the Second Amendment or the performance of the Second Amendment or any Restructuring Agreement by the Obligor any) Lien upon or with respect to any of the properties or revenues of the Obligor which does or will secure, or otherwise provides for the payment of, Indebtedness, which Lien would be prohibited by Section 8.03 of the Restructuring Agreement. (g) There is no pending or, to the best of my knowledge after due inquiry, threatened action or proceeding affecting the Obligor before any court, governmental agency or arbitrator, which may individually or in the aggregate materially adversely affect the financial condition or operations of the Obligor or which purports to affect the legality, validity or enforceability of the Second Amendment or the Restructuring Agreement, except as disclosed in the item 25 of Annex II to the Restructuring Agreement or as disclosed in item 5 of Annex II-A or item 1 of Annex II-B to the Restructuring Agreement. prcd (h) The Obligor is subject to civil and commercial law with respect to its obligations under the Second Amendment and the Restructuring Agreement, and the execution and delivery of the Second Amendment and performance of the Second Amendment and the Restructuring Agreement constitute and will constitute private and commercial acts rather than public or governmental acts. The Obligor is a sovereign entity which has given its consent to be sued in respect of its obligations under the Second Amendment and the Restructuring Agreement. Except as provided in Section 12.08(d) of the Restructuring Agreements, the provisions of the Second Amendment and such section effective to waive, on behalf of the Obligor and its property, whether or not held for its own account, any immunity (sovereign or otherwise) from any legal action, suit or proceeding, from jurisdiction of any Philippine court or from set-off or any legal process (whether through service or notice, attachment prior to judgment, attachment in aid of execution of judgment, execution of judgment or otherwise) under the laws of the Philippines in respect of its obligations under the Second Amendment and the Restructuring Agreement. The waiver of immunities, the submission to the jurisdiction of the New York State and Federal courts sitting in the City of New York, the High Court of Justice in London, the competent courts and of the Philippines, any competent court in the jurisdictions in which the Servicing Banks Accounts for each Credit Currency is located and in Frankfurt/Main, Federal Republic of Germany, the agreement to suit therein and the appointment of the New York Process Agent and the London Process Agent and the other agreements contained in Section 12.08 of the Restructuring Agreement and incorporated by reference in the Second Amendment, are irrevocably binding on the Obligor. The letters of the New York Process Agent and the London Process Agent delivered pursuant to Parts D-1(b)(vii) and (viii) of the Second Amendment have each been duly authorized and executed and delivered by, and are irrevocably binding on, said Process Agents. (i) There are no Philippine Taxes or Other Applicable Taxes imposed by the Philippines either (i) on or by virtue of the execution, delivery or enforcement of the Second Amendment, any Restructuring Agreement or any other document to be furnished thereunder or (ii) on any payment to be made by the Obligor pursuant to the Second Amendment or any Restructuring Agreement. (j) To ensure the legality, validity, enforceability or admissibility in evidence of the Second Amendment and the Restructuring Agreement in the Philippines, it is not necessary that the Second Amendment or any Restructuring Agreement or any other document be filed, registered or recorded with, or executed or notarized before, any court or other authority in the Philippines or that any registration charge or stamp or similar tax be paid on or in respect of the Second Amendment or the Restructuring Agreement or any other document. (k) The Second Amendment and each Restructuring Agreement are in proper legal form under the laws of the Philippines for the enforcement thereof against the Obligor under the laws of the Philippines. (l) In any action or proceeding arising out of or relating to the Second Amendment or any Restructuring Agreement in any court in the Philippines, such court would recognize and give effect to the provisions of the Second Amendment and Section 12.11 of the Restructuring Agreement wherein the parties thereto agree that the Second Agreement and the Restructuring Agreement, respectively, shall be governed by, and construed in accordance with the laws of the State of New York. Accordingly, such court would apply the laws of the State of New York in any legal action seeking enforcement of the Second Amendment or any Restructuring Agreement. Such court would also award a judgment in the currencies in which such obligations are payable. The foregoing opinion is subject to the qualification that in the event of any such action or proceeding in a Philippine court, such court would apply the laws of the Philippines with respect to (i) matters bearing upon the power and authority of the Obligor and the Guarantor to execute, deliver and perform the Second Amendment and such Restructuring Agreement and the other agreements contemplated thereunder, and (ii) compliance with all requirements of governmental approvals, authorizations and consents under Philippine laws, decrees and administrative regulations. (m) It is not necessary under the laws of the Philippines (i) in order to enable the Banks and the Servicing Banks or any of them to enforce their respective rights under the Second Amendment and the Restructuring Agreement or (ii) by reason of the execution of the Second Amendment or performance of the Second Amendment or any Restructuring Agreement that any of them should be licensed, qualified or entitled to carry on business in the Philippines. The foregoing opinion is subject to the qualification, with respect to any Bank or Servicing Bank otherwise carrying on business in the Philippines (other than by reason only of the execution, performance, or enforcement of the Second Amendment or the Restricting Agreement) that such Bank or Servicing Bank will not be permitted to maintain by itself or by an assignee any suit for recovery of any debt, claims or demand whatsoever unless it has or shall have obtained upon order of the Monetary Board of the Central Bank, a license to transact business in the Philippines from the Philippine Securities and Exchange Commission. (n) Neither the Servicing Banks, any Existing Agent, the Banks, the Second Amendment Closing Agent nor any of them is or will be deemed to be resident, domiciled, carrying on business or subject to taxation in the Philippines by reason only of the execution or delivery of the Second Amendment or the performance or enforcement of the Second Amendment or the Restructuring Agreement. The performance by the Servicing Banks, any Existing Agent, the Banks, or any of them of any action required or permitted under the Second Amendment or the Restructuring Agreement will not violate any law or regulation of the Philippines. (o) If any judgment of a competent court outside the Philippines were rendered against the Obligor in connection with any action arising out of or relating to the Second Amendment or any Restructuring Agreement, such judgment would be recognized and could be sued upon in the courts of the Philippines and such courts would grant a judgment which would be enforceable against the Obligor in the Philippines without any retrial unless it is shown that (i) the foreign court did not have jurisdiction in accordance with its jurisdictional rules, (ii) the party against whom the judgment of such foreign court was obtained had no notice of the proceedings, or (iii) the judgment of such foreign court was obtained through collusion or fraud or was based on clear mistake of law or fact. (p) All conditions precedent on the part of the Obligor provided for in the Second Amendment relating to the Second Amendment Effective Date have been duly complied with and the other documents (including this opinion) being delivered to the Second Amendment Closing Agent by or on behalf of the Obligor pursuant to Part D-3(b) of the Second Amendment conform to the requirements of the Second Amendment. prcd This opinion is further subject to the following qualifications: (i) I express no opinion as to the enforceability in the Philippines of Section 12.07(b) of the Restructuring Agreement to the extent that it purports to permit a second or separate suit, after recovery on a judgment in a judgment currency, for recovery of the difference between the amount of judgment currency stated in such judgment and the amount of the Agreement currency due under the Restructuring Agreement. (ii) Nothing in this opinion should be taken as indicating that the remedy of specific performance or injunction under any particular provision of the Second Amendment or the Restructuring Agreement would necessarily be granted by a Philippine court in any particular instance, if there is otherwise available an adequate compensatory remedy with respect thereto. (iii) The enforceability of the obligations of the Obligor under the Second Amendment or any Restructuring Agreement is subject to general principles of equity. In applying these principles, a Philippine court might require that parties exercising any right under the Second Amendment or the Restructuring Agreement act reasonably and in good faith. Such a requirement might be applied, among other situations, to the provisions of the Restructuring Agreement purporting to authorize conclusive determinations by any Servicing Bank, any Bank or any other party. Very truly yours, (SGD.) FRANKLIN M. DRILON Secretary