Victorias Agromachinery Corporation

April 1, 1980 Victorias Agromachinery Corporation c/o Mr. Patrick M. Decena Vicmico, Negros Occidental Gentlemen : This has reference to your letter dated January 12, 1980 inquiring whether the Board of Directors can legally offer to sell P1,000,000.00 worth of shares from the unsubscribed capital stock of the VICTORIAS AGROMACHINERY CORPORATION to interested persons or corporations since the stockholders individually by means of written notice waived their rights to purchase them. Please be advised that the Board can legally offer to sell the P1,000,000.00 worth of unsubscribed capital stock to interested persons or corporation provided they would not exceed fifteen (15) in number. It is a settled rule, that preemptive rights are recognized only with respect to new issues of shares, and not with respect to additional issues of originally authorized shares, the theory being that when a corporation at its inception offers its first shares, it is presumed to have offered all of those which it is authorized to issue. An original subscriber is deemed to have taken his shares knowing that they form a definite proportionate part of the whole number of authorized shares when the shares left unsubscribed are later re-offered, he cannot therefore claim a dilution of interest. (Campos and Lopez Campos, Notes and Selected Cases on Corp. Law pp. 854-855) Please be guided accordingly. cdll Very truly yours, (SGD.) ROSARIO N. LOPEZ Director Corporate and Legal Department