DOJ Opinion No. 098, s. 1982

DOJ OPINION NO. 098 , s. 1982 June 26, 1982 Asia Pacific Capital Corporation Limited G.P.O. Box 10942 Hong Kong as agent for City Bank, N.A. Lloyds Bank International Limited LTCB Asia Limited Taiyo Kobs Finance Hong Kong Limited American Express International Banking Corporation Bank of Baroda The Bank of New York PCI Capital Asia Limited Takugin International (Asia) Limited Union Bank Long Term Credit Bank of Japan, Limited Metropolitan Bank and Trust Company Banco Urquijo S.A. Altajir Bank; Equitable Finance Company (Hong Kong) Limited The Inchijuni Bank Limited The Mitsubishi Trust and Banking Corporation Nippon Credit International (Hong Kong) Limited Normura International (Hong Kong) Limited Yamaichi International (Nederland) N.V. (the "Lenders") Re: Loan and Guaranty Agreement dated as of June 4, 1982 Gentlemen : As Minister of Justice of the Republic of the Philippines (the "Republic"), I have been requested to render an opinion in connection with the loan and guaranty agreement, dated as of June 4, 1982 (the "Loan and Guaranty Agreement") by and among the Development Bank of the Philippines as borrower (the "Borrower"), the Republic as Guarantor (the "Guarantor"), the Lenders named in Schedule I thereto (the "Lenders"), the managers named therein (the "Managers") and Asia Pacific Capital Corporation Limited as agent for the Lenders (the "Agent"), providing for a loan (the "Loan"), to the Borrower in an aggregate principal amount not to exceed Seventy Five Million United States Dollars (US$75,000,000), subject to the terms and conditions stated therein, and evidenced by promissory notes substantially in the form provided for in the Loan and Guaranty Agreement (the "Notes"). The obligations of the Borrower under the Loan and Guaranty Agreement and its related documentation have been irrevocably and unconditionally guaranteed by the Guarantor pursuant to its guaranty contained in Section 8.01 of the Loan and Guaranty Agreement and as endorsed on each of the Notes (the "Guaranty"). prLL All terms herein have the meanings set forth in the Loan and Guaranty Agreement. In rendering this opinion I have examined the Constitution, the relevant Civil Code provision, Presidential decrees, laws and regulations of the Republic and all such public records and documents and other documents as are necessary in connection herewith, including the following: (a) an executed copy of the Agreement, including the Schedules and Exhibits attached thereto; (b) The Notes, dated and date of the initial Drawdown; (c) executed copies of the Letter of Agreements; (d) the "final approval" and "registration" of the Loan with the Central Bank dated June 23, 1982 and the Full Powers dated May 6, 1982 issued by the President of the Philippines in favor of Minister of Finance Cesar Virata or, in his absence, Deputy Minister of Finance Alfredo Pio de Roda, Jr. or Deputy Minister of Finance Victor C. Macalincag in respect of the Agreement and Guaranty; True and correct copies of the approval and Full Powers of the above-described are attached to this Opinion as Annexes "A" and "B". (e) a certificate, dated June 23, 1982 issued by the Central Bank in substantially the same form of Exhibit G to the Agreement; (f) the Borrower's notice of Drawdown; and (g) the Borrower's Drawdown Certificate. 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 originals, 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 matter of fact material to the opinion expressed herein, I have relied upon certificates of officials and other representatives of the Guarantor. LexLib As I am qualified to advise the Guarantor regarding the laws of the Republic 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 express no opinion in respect of, those matters governed by or construed in accordance with any of such laws. Based upon and subject to the foregoing, I am of the opinion that: (1) The Guarantor has full legal right, power and authority to provide the Guaranty and to perform its other obligations provided for in the Loan and Guaranty Agreement, to execute and deliver the Loan and Guaranty Agreement, endorse the Guaranty on each of the Notes, and to perform and observe the terms and conditions of the Loan and Guaranty Agreement and the Guaranty. (2) The Guarantor has taken all necessary legal action to authorize the execution, delivery and performance of the loan and Guaranty Agreement and its endorsement of the Guaranty on each of the Notes. (3) There is no constitutional or treaty provision law, ordinance, decree, regulation, statute or similar enactment and no contractual or other obligation binding on the Guarantor, nor any guideline or policy statement whether or not having the force of law applicable to the Guarantor that is or will be contravened by an execution and delivery of the Loan and Guaranty Agreement or the Guaranty or by the performance or observance of any of the terms and conditions thereof. (4) All governmental registrations and approvals necessary for the due execution and delivery of the Loan and Guaranty Agreement and the Guaranty have been obtained, and all such registrations and approvals necessary for the performance or enforceability thereof, including without limitation the final approval of the Loan and Guaranty Agreement and the transactions contemplated thereby by the Central Bank of the Philippines and any foreign exchange and transfer permits regarding Dollar payments thereunder, have been obtained and are in full force and effect. (5) The Loan and Guaranty Agreement and the Guaranty endorsed on each of the Notes constitute and legal valid and binding obligations of the Guarantor enforceable in accordance with their respective terms. (6) To the best of my knowledge and belief after due inquiry, 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 of its assets, is bound, which default might have a material adverse effect on the ability of the Guarantor to perform its obligations under the Loan and Guaranty Agreement or the Guaranty. (7) The obligations of the Guarantor under the Loan and Guaranty Agreement and the Guaranty are direct, unconditional, enforceable and general obligations of the Guarantor for which the full faith and credit of the Guarantor is pledged, and which the rank at least pari passu in priority of payment with all other External Indebtedness of the Guarantor, it being understood that the " pari passu " in priority of payment" refers to the order of priority of payment and not to the presence or absence of security in respect of specific property 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 (whether or not constituting a security interest), on or with respect to any present or future assets, revenues or rights to be receipt of income of the Guarantor except as permitted under Section 8.05 of the Loan and Guaranty Agreement. LexLib (8) The Guarantor is a member in good standing of the IMF and is fully eligible to use it General Account and its Special Drawing Account with the IMF in accordance with the Articles of Agreements of the IMF. (9) The Guarantor is subject to suit with respect to its obligations under the Loan and Guaranty Agreement and the Guaranty endorsed upon each of the Notes, and the execution, delivery and performance by the Guarantor of the Loan and Guaranty Agreement and the Guaranty endorsed upon each of the Notes constitutes private commercial acts rather than governmental and public acts. The waiver of any right to sovereign immunity contained in Section 12.07 of the Loan and Guaranty is irrevocably binding on the Guarantor, its successors and assigns. (10) The qualification by the Agent, any of the Managers or any of the Lenders for admission to do business under the laws of the Republic does not constitute a condition to, and to failure to so qualify will not affect the exercise or the enforcement by the Agent, any of the Managers or any of the Lenders of any rights, privilege or remedy afforded to Agent, any of the Managers, or any of the Lenders pursuant to the Loan and Guaranty Agreement, the Letter Agreements, any of the Notes or the Guaranty and the performance by the Agent, any Manager or any Lender or any action required or permitted under the Loan and Guaranty Agreement, the Letter Agreements, any of the Notes or the Guaranty will not violate any law or regulation of the Republic or any political subdivision thereof or Government Agency or result in any unfavorable tax consequences for the Agent, any of the Managers, or any of the Lenders. Neither the Agent nor any of the Managers or Lenders is or will be deemed to be resident, domiciled, to have an office in or to be doing business in the Republic solely by reason of the execution, delivery performance or enforcement of the Loan and Guaranty Agreement, the Letter Agreements, any of the Notes or the Guaranty. (11) There is no tax, fee, impost or other charge or restriction imposed by the Republic of the Loan and Guaranty Agreement or the Guaranty or on any payments to be made by the Guarantor under the Loan and Guaranty Agreement or the Guaranty and the Guarantor is not required or permitted by any present law or regulation of the Republic to deduct or withhold any sum from any payments (whether of principal, interest of otherwise) due or to become due from the Guarantor under the Loan and Guaranty Agreement or the Guaranty. (12) Except for the approval of the Central Bank of the Philippines, which approval has been obtained and is in full force and effect, it is not necessary or advisable under the laws of the Republic in order to assure the validity effectiveness and enforceability of the Loan and Guaranty Agreement, the Guaranty or any part therefor that any such agreement or instrument be filed, registered or recorded in any public office or elsewhere or that any other instrument relating thereto elsewhere thereto be executed, delivered, filed registered or recorded. (13) The transactions contemplated by the Loan and Guaranty Agreement and Guaranty are not subject to any currency deposit requirements or any reserve requirements of whatsoever nature under the laws of the Republic. (14) Under the laws of the Republic, the choice of New York law to govern the validity, construction and performance of the Loan and Guaranty Agreement, the Guaranty 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 and the High Court of Justice in England is a valid submission to the jurisdiction of such courts. In the event that a judgment of any of such courts were obtained after service of process in the manner specified in the Loan and Guaranty Agreement, the same would be presumptive evidence of a right as between the parties and their successor in interest, and would enforceable in the courts of the Philippines unless the Party against whom the judgment was obtained is able to rebut the presumption by showing (i) that the foreign court did not have jurisdiction in accordance with the jurisdictional rules of the foreign court (ii) want of notice to the party of the foreign proceeding, (iii) conclusion, (iv), fraud, or (v) clear mistake of law or fact. (15) Except for the documents referred to in Section 9.01(j), relating to "Consent to Service of Process" by each of the persons mentioned in Section 12.08 of the Agreement which were not furnished our Office, all the other documents referred to above which I have reviewed as conditions precedent to the initial Drawdown of the Loan are responsive to and in accordance with the requirements of Section 9.01 of the Loan and Guaranty Agreement and are in form and substance satisfactory to me. LexLib 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 solely to such Lender. Although this opinion is dated on June 26, 1982, it may be relied upon by you and each Lender as if this opinion were dated the date of the initial Drawdown under the Loan and Guaranty Agreement and all opinions expressed herein shall continue with the same force and effect as if expressed on such date unless you receive notice from me to contrary prior to such date. Very truly yours, (SGD.) RICARDO C. PUNO Secretary of Justice