Mr. Maximo delos Santos

July 26, 1989 Mr. Maximo delos Santos Plus Factor Trading & Services Company, Inc. Room 316, Merchants Building Gil J. Puyat Avenue Makati, Metro Manila Sir : This refers to your letter, dated July 17, 1989, inquiring on the validity and effects of the alleged unrecorded merger agreement of Plus Factor Trading & Services, Inc. and Portfolio Publishing Inc. In connection herewith, please be advised that in order to legally effect a merger agreement, the procedure/requirements laid down under Title IX (Sections 76-79 of the Corporation Code) must be observed and complied with. The following documents are required to be submitted to the Commission: cdll 1. Articles of merger signed by the President or Vice-President and certified under oath by the Secretary or Assistant Secretary of the Constituent Corporations setting forth the following: a) The plan of merger; b) The number of shares outstanding; c) As to each corporation, the number of outstanding shares voting for and against such plan, respectively, 2. Copies of the minutes of the board of directors' meeting and minutes of the stockholders meeting of the constituent corporations, approving and ratifying the plan of merger, certified under oath by their respective secretaries or assistant secretaries; 3. List of creditors or the absorbed corporations, as of the date of approval of the plan of merger with their addresses and the amounts owing to each; 4. Audited financial statements (Balance Sheet and related statement of income and expenses) of the constituent corporations as of a date not earlier than 120 days prior to the date of filing of the application with the Commission. The financial statements shall be accompanied by a long form audit report of a certified public accountant; 5. Amended articles of Incorporation and By-laws of the surviving corporation, whenever necessary in accordance with the terms of the plan of merger such as change of name of the surviving corporation, increase of capital stock, etc. As to the effectivity of merger agreements Section 79 of the Corporation Code provides: "SECTION 79. Securities and Exchange Commission's approved and effectivity of merger or consolidation. . . .. Where the Commission is satisfied that the merger or consolidation of the corporations concerned is not inconsistent with the provisions of this Code and the existing laws, it shall issue a certificate of merger or of consolidation, as the case may be, at which time the merger or consolidation shall be effective . ...".(emphasis supplied) Pursuant to the above provision, only upon the issuance by the Commission of the certificate of filing of the articles of merger shall the combination of constituent companies become effective . A verification of the corporate records of subject corporations on file with the Commission failed to show any document pertaining to the alleged merger agreement. Consequently, the same is not legally effective and all subsequent corporate transactions in relation thereto are deemed null and void. Please be advised accordingly. Very truly yours, (SGD.) FE ELOISA C. GLORIA Director Corporate and Legal Department