DOJ Opinion No. 274, s. 1982

DOJ OPINION NO. 274 , s. 1982 December 6, 1982 To the Banks parties to the Loan Agreement referred to below Re: Loan Agreement dated as of September 13, 1982 Gentlemen : As the Minister of Justice of the Republic of the Philippines ( the "Republic"), I have been requested to give an opinion to you in connection with agreement (the "Loan Agreement") dated as of September 13, 1982 among the Philippine Sugar Commission as borrower (the "Borrower "), the Republic as guarantor (in this capacity the "Guarantor"), the several lending institution named in Section 2.1 of the Loan Agreement (the "Banks") and Bankers Trust Company, as Agent, as follows. In this regard, I have examined a signed copy of the Loan Agreement and all such the documents as I have considered it necessary or desirable to examine in order that I may give this opinion. Terms defined in the Loan Agreement shall have their defined meanings when used herein. Based upon the foregoing and in the light of the law of the Republic as it exists as the data hereof, I am of the opinion that: (1) The Borrower (1) is a governmental entity of the Republic, was created as a governmental entity under Presidential Decree No. 388 as amended by Presidential Decree No. 1192 (the "Presidential Decree as Amended") and is duly organized and validly existing under the law of the Republic and (ii) has the power and authority to own its property and assets and to transact the business in which it is engaged; (2) the Borrower has power to enter into the Loan Agreement and the Notes and to borrow thereunder and has taken all necessary action to authorize the borrowing thereunder upon the terms and conditions of the Loan Agreement and the Notes; (3) under the Presidential Decree as Amended, the President of the Republic has full power and authority on behalf of the Guarantor to execute and deliver the Loan Agreement and the Guaranty and to perform and observe the terms and conditions of the Loan Agreement; (4) under the Presidential Decree as Amended the President of the Republic has full power and authority to authorize the person who signed the Loan Agreement on behalf of the Guarantor to sign on his behalf the Loan Agreement and any document to be given, made or delivered by or on behalf of the Guarantor for the purpose of the Loan Agreement; (5) under that Presidential Decree as Amended and otherwise all acts, conditions and things required to be done, fulfilled and performed before the execution of the Lao Agreement in order to constitute the obligations assumed by the Guarantor under the Loan Agreement the legal, valid and binding obligations of the Guarantor have been done, fulfilled and performed in due compliance with (6) applicable laws and regulations (it being understood and agreed that the phrase laws and regulations" as used herein shall include, without limitation, all constitutional provisions, laws, ordinances, statutes, decrees, treaties, conventions and other similar authorities). Due authority has been given by the President of the Republic to the person who sighed the Loan Agreement on behalf of the Guarantor for purpose of the Presidential Decree as Amended. (6) neither the execution and delivery of the Loan Agreement, nor the consummation of the transactions herein or therein contemplated, nor compliance with the terms and provisions thereof, will contravenes any constitutional provision or any other provision of law, ordinance, statute, decree treaty, convention, rule of regulation to which the Guarantor is subject or will conflict with or will be inconsistent with, or will result in any breach of, any of the terms, covenants, conditions or provisions of, or constitute a default under, or result in the creation or imposition of any lien, security interest, charge or encumbrance upon any of the property or assets of the Guarantor pursuant to the terms of , any indenture, mortgage, deed of trust, license, contract, concession agreement or other instrument payable in any currency other than Philippine Pesos to which the Guarantor is a party or by which it may be bound, or to which it may be subject; LexLib (7) the obligations of the Guarantor under the Loan Agreement are direct, unconditional and enforceable and general obligations of the Guarantor for which the full faith and credit of the Guarantor is pledged ranking at least pari passu in priority of payment and in all other respect with all other unsecured indebtedness of the Guarantor payable in a currency other than Philippine Pesos, and no indebtedness of the Guarantor payable in a currency other than Philippine Pesos is secured by, or otherwise benefits from, any lien, pledge, mortgage, charge or encumbrance or segregation or other preferential arrangement (whether or not constituting a security interest) on, or with respect to, any present or future properties, assets, revenues or rights of the Guarantor to receive income other than (i) liens created on property at the time of purchase thereof solely to secure payment of the purchase prior of such property, and (ii) liens arising in the ordinary course of banking transactions and securing a debt maturing not more than one year after its date; (8) the Guarantor is not in breach of nor in default under any of its obligations in respect of borrowed money payable in a currency other than Philippine Pesos; (9) there is no action, suit or proceeding of or before any court or governmental authority or agency pending or, so far as I am aware (after reasonable inquiry), threatened to question or annul the execution or performance of the Loan Documents or in any manner to question the laws and proceedings of the Guarantor under which the Loan Agreement was executed, performed or endorsed and none of the said laws and proceedings have been repealed, revoked or rescinded in whole or in part; (10) the Guarantor is a member in good standing of the I.M.F. and fully eligible to use the resources of the I.M.F. in accordance with the Articles of Agreement of the I.M.F.; (11) other than the Central Bank Approval which approval has been obtained and is in full force and effect a and registration of the Loan Agreement, with the Central Bank which registration has been done, no order, consent, license, authorization or approval of, or exemption by, or the giving of notice to, or registration with, or the taking of any other motion in respect of, any governmental or public body or authority, and no filing, recording, publication or registration in any public office or any other place, is required or is necessary or appropriate to authorize, or in connection with, the execution, delivery and performance of the Loan Agreement; (12) the execution, delivery and performance of the Loan Agreement and the transactions contemplated thereby have duly authorized by all necessary authorities (including, without limitation, the Central Bank in the Central Bank Approved under all applicable laws and regulations. The Loan Agreement constitutes the legal, valid and binding obligation of the Guarantor, enforceable in accordance with its terms; (13) all requisite authorizations by the Republic or any department or agency thereof (including , without limitation, the Central Bank Approval) for the foreign exchange payments due under Loan Agreement have been validly obtained; (14) there is no law or regulation of the Republic or of any political subdivision thereof or therein which would prevent the Guarantor in any way from performing any of its obligations pursuant to the Loan Agreement (including without limitation, Section 4, 6.1, 10.6, and 14 of the Loan Agreement); (15) the transactions contemplated by the Loan Agreement are not subject to any currency deposit requirements or any reserve requirements of whatsoever nature under the laws of the Republic; (16) no fees or taxes are required to be paid for the validity or enforceability of the Loan documents, and the Loan Documents are each in proper legal form under laws of the Republic for the enforcement thereof in such jurisdiction without any further action on the part of the Agent or the Banks. The compliance by the Agent or the Banks with legal formalities solely by reason of the execution of the loan Documents for admission to do business under the laws or regulations of the Republic does not constitute a condition to, and the failure to so comply does not affect, the exercise by the Agent or the Banks of any right, privilege or remedy afforded to the Agent or the Banks in, under or in connection with the Loan Documents or the enforcement of any such right privilege or remedy; and the performance by the Agent or the Banks of any action required or permitted under the Loan Documents will not violate any law or regulation of the Republic of any political subdivision thereof or result in any tax liability or other unfavorable consequences to the Agent or any of the Banks pursuant to the laws of the Republic or any political subdivision or taxing authority thereof or therein of any rule or regulation of any federation or organization or similar entity of which the Republic is a member; LexLib (17) the Guarantor is generally subject to set-off, suit, judgment and execution in respect of the Loan Agreement and the transaction contemplated thereby and is not entitled by virtue of the waiver in Section 19 (a) of the Loan Agreement to any present or future claim to any immunity, whether characterized as sovereign immunity or otherwise, from any legal proceedings, whether in the United States of America or elsewhere, to enforce or collect upon the Loan Agreement (including, without limitation, immunity from service of process, immunity from jurisdiction of any courts or tribunes; and immunity of any of its property from attachment prior to judgment in order to obtain satisfaction thereof, from attachment in aid of execution, and from execution upon a judgment) in respect of itself or its property in any action or proceedings in respect of its obligations under the Loan Agreement. The acceptance in Section 19 (a) of the Loan Agreement by the Guarantor of the jurisdiction of each court specified therein in any legal action or proceeding brought with respect to the Loan Agreement in such court effective, insofar as the laws of the Republic are concerned, to permit such court to exercise jurisdiction over the Guarantor in such action or proceeding provided that such court is otherwise entitled under the laws, regulations and rules applicable to it to exercise such jurisdiction; and (18) the choice by the parties of the law of the State of New York under Section 21.5 of the Loan Agreement is valid under the private international law of the Republic, and such law of the State of New York would accordingly be applied by the courts of the Republic if the Loan Agreement or any claim under it comes under their jurisdiction. A Philippine court would, however, also refer to Republic laws, decrees and administrative regulations bearing upon the capacity and the authority of the Guarantor to enter into contracts generally and the Loan Agreement in particular with respect to which matters you are referred to my opinion expressed in Paragraphs 1 and 4. A judgment of the Supreme Court of the State of New York or the United States Federal District Court for the Southern District of New York rendered in an action brought in any such court in the manner contemplated by Section 19 or otherwise in accordance with applicable law to enforce the obligations of the Guarantor under the Loan Agreement or to claim from the Borrower any sum due as a result of default thereunder or for any other reason would be enforceable in the Republic against the Guarantor upon the prior approval of any court or legal authority which may be required in accordance with the laws of the Republic. cda Very truly yours, (SGD.) RICARDO C. PUNO Minister of Justice