DOJ Opinion No. 098, s. 1980

DOJ OPINION NO. 098 , s. 1980 July 14, 1980 Toronto Dominion (Hong kong) Limited Room 123, Hutchison House 10 Harcourt Road, Central Hong Kong as Agent for: Toronto Dominion (Hong Kong) Limited The Royal Bank of Canada (Asia) Limited (the "Lenders") Re: Loan and Guaranty Agreement dated as of June 9, 1980 Gentlemen : As the Minister of Justice of the Republic of the Philippines (the "Guarantor"), I have been requested to give an opinion in connection with the Loan and Guaranty Agreement (the "Agreement") dated as of June, 1980, and made by and among the Development Bank of the Philippines (the "Borrower"), the Guarantor, Toronto Dominion (Hong Kong) Limited (the "Agent"), and the Lenders. Except as otherwise defined herein, all terms defined in the Agreement are used herein as therein defined. cdll In connection therewith, I have examined the Constitution, laws and regulations of the Republic of the Philippines, the originals or copies, photocopied, certified or otherwise identified to my satisfaction, of all such official records, regulations, certificates, rulings and orders of officials and agencies of the Government of the Republic of the Philippines, and of all such other agreements, documents, and matters as I have considered necessary or desirable for the opinions hereinafter expressed including, without limitation, the following documents: (a) the Agreement; (b) the Notes; (c) Republic Act No. 85, as amended by Republic Act Nos. 2081, 3147, 3517 and 6044 and by Presidential Decrees Nos. 195, 423 and 1461; (d) Full Powers, dated December 28, 1979, issued by the President of the Philippines in favor of the Minister of Finance Cesar Virata (Annex "A"); (e) Memorandum of Minister of Finance Cesar Virata, dated March 18, 1980, requesting the President of the Philippines approval of the issuance of promissory notes in connection with the subject loan, together with the notation of approval by the President of the Philippines, dated March 22, 1980 (Annex "B"); (f) Letters of the Central Bank of the Philippines, dated November 20, 1970 and June 25, 1980, approving the subject loan under the terms and conditions provided in the Agreement (Annexes "C" & "D"); (g) Exchange Assurance of the Central Bank of the Philippines, dated June 25, 1980 (Annex "E"); and (h) Letter of acceptance, dated February 27, 1980, from the Consul-General of the Republic of the Philippines in New York City, U.S.A., of his appointment/designation as agent for service of process of the Borrower and the Guarantor (Annex "F"). Based upon the foregoing and in the light of Philippine law as it exists at the date hereof, I am of the opinion that: 1. The Guarantor has full legal right, power and authority to provide the Guaranty under the Agreement, to execute and deliver the Agreement, to endorse the Notes, 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 Agreement and each of the Notes and the performance and observance of the terms and conditions thereof. 3. There is no constitutional or treaty provision, law, ordinance, decree, regulation, statute or similar enactment, no contractual or other obligation relating to External Indebtedness binding upon the Guarantor and, to the best of my knowledge, no contractual or other obligation relating to domestic Indebtedness binding upon the Guarantor, nor any 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, by the execution and delivery of the Agreement or any of the Notes or by the performance or observance of any of the terms and conditions thereof. 4. All registrations and approvals necessary for the due execution, delivery and performance of the Agreement and the Notes have been obtained and are in full force and effect. 5. The Agreement and the Notes constitute the legal, valid and binding obligations of the Guarantor enforceable in accordance with their respective terms. The obligations of the Guarantor 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 Republic of the Philippines is pledged. 6. The Guarantor is not in default (1) in respect of any External Indebtedness, and (ii) under any agreement, obligation or duty to which it is a party or by which it, or any of its assets, is bound, the breach of which would have a material adverse effect on the ability of the Guarantor to perform its obligations under the Agreement or any of the Notes. (Annex "G") 7. The obligations of the Guarantor under the Agreement and the Notes rank at least pari passu with all other unsecured External Indebtedness of the Guarantor and no External Indebtedness of the Guarantor is secured by or otherwise benefits from any lien, pledge, mortgage, charge or encumbrance or segregation or priority in right of payment or other preferential arrangement (whether or not constituting a security interest) on or with respect to any present or future assets, revenues or rights of the Guarantor to receive income other than (i) liens created on property at the time of purchase thereof solely as security for payment of the purchase price of such property, and (ii) liens arising in the ordinary course of banking transactions and securing debts maturing not more than one year after their dates. 8. The Guarantor is a member in good standing of the IMF and is fully eligible to use the resources of the IMF in accordance with the Article of Agreement of the IMF. 9. The Guarantor is subject to suit with respect to its obligations under the Agreement and the Notes, and the execution, delivery and performance by the Guarantor of the Agreement and the Notes constitutes private and commercial acts rather than governmental or public acts. The waiver of any such rights to sovereign immunity contained in Section 12.06 of the Agreement is irrevocably binding on the Guarantor, its successors and assigns. 10. Solely by reason of the execution, delivery and performance of the Agreement, the qualification by the Agent or any of the Lenders for admission to do business under the laws of the Republic of the Philippines does not constitute a condition to, and the failure to so qualify will not affect the exercise or the enforcement by the Agent or any Lender of any right, privilege or remedy afforded to the Agent or any Lender pursuant to the Agreement and the Notes, and the performance by the Agent of any action required or permitted under the Agreement and the Notes will not violate any law or regulation of the Republic of the Philippines or any political subdivision or government agency thereof or result in any unfavorable tax consequence to the Agent or the Lenders. 11. The transactions contemplated by the Agreement and the Notes are not subject to any currency deposit requirements or any reserve requirements of whatsoever nature under the laws of the Republic of the Philippines. 12. There is no tax, fee, impost or other charge or restriction imposed by the Republic of the Philippines on the Agreement or the Notes or on any payments to be made by the Guarantor under the Agreement or the Notes and the Guarantor is not required or permitted by any present law or regulation of the Republic of the Philippines to deduct or withhold any sum from any payments (whether of Principal, interest or otherwise) due or to become due from it under the Agreement and the Notes. Neither the Agent nor any Lender shall be deemed to be resident, domiciled, to have established a place of business or to be carrying on business in the Republic of the Philippines by reason of the execution, delivery or performance of the Agreement of the Notes in such jurisdiction. In order to ensure the legality, validity, enforceability and admissibility in evidence of the Agreement and the Notes it is not necessary that the Agreement or the Notes or any other document be stamped or that any registration or other tax or charge be paid, except that in case of a suit in the Republic of the Philippines, certain court fees are payable. 13. The choice of New York law to govern the validity, interpretation and performance of the Agreement and 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, United States of America, is a valid submission to the jurisdiction of such courts. A judgment of such courts obtained after service of process in the manner specified in the Agreement would under the laws of the Republic of the Philippines be presumptive evidence of a right as between the parties and their successors in interest and such judgment would be enforceable in the courts of the Republic of the Philippines unless the Borrower or the Guarantor is able to rebut the presumption by evidence of want of jurisdiction, want of notice, collusion, fraud or clear mistake of law or fact. The fact that the Agreement or any of the Notes has been executed or delivered in the Republic of the Philippines or any political subdivision thereof does not alter the foregoing opinion. 14. The documents referred to above are responsive to and in accordance with the requirements of Section 9 of the Agreement as conditions precedent to Drawdown and are in form and substance satisfactory to me. A copy of this opinion may be delivered by your good selves to each of the Lenders and each Lender may rely upon such copy as if it were an original addressed solely to such Lender. cda Very truly yours, (SGD.) RICARDO C. PUNO Minister of Justice