Ponce Enrile Reyes & Manalastas

August 26, 1996 Ponce Enrile Reyes & Manalastas 3rd Flr., Vernida IV Bldg., Alfaro St., Salcedo Village, 1227 City of Makati Attention : Attys . Janette Pena-Pio De Roda and Rosanno P . Nisce Gentlemen : This refers to you letter dated July 11, 1996 requesting opinion on whether or not the transaction of your Clients described hereunder is exempted from registration requirements under the Revised Securities Act. 1. The Client Corporations are corporations duly organized and existing under Philippine laws. Their shares are not registered under the Revised Securities Act; llcd 2. The Client Corporations currently have more or less twenty two (22) stockholders of record; 3. The Client Corporations intend to issue additional shares out of their authorized but unissued capital stock and offer the same for subscription to their existing stockholders; 4. Shares not taken up by the existing stockholders are proposed to be offered to not more than twenty (20) new investors via private placement, i.e. there is no intention of retailing the shares to the public. Instead, the shares will be offered to institutional investors and, a few high net worth individuals, both in the Philippines and abroad. These investors would be in a position to know the present affairs of the Client Corporations and the risk of participating in the private placement . It is your contention that in view of the reasons stated in No. 4 the above transaction may be exempted from registration requirements. As a general rule, selling or offering for sale of shares of stock is subject to registration under the Revised Securities (Sec. 4). However, the same law allows exemptions if it finds that registration of the transaction is not necessary for the protection of the investors by reason of the small amount or limited character of the offering. (Sec. 6-b) Thus, if it can be shown that the offering will be made only to institutional investors and highly net worth individuals who are in the position to know the present affairs if your client corporations and the risks of investing therein, the transaction may be exempted from the registration requirements under the Revised Securities Act, but only after complying with the following: 1. A certificate of exemption shall be secured by filing a request for exemption from registration requirements stating the reasons why it should be exempted under Section 6(b) of the Revised Securities Act. 2. Payment of exemption fee amounting to one-tenth of one percentum of the maximum aggregate price or issued value of the securities as required under Section 6(c) of the Revised Securities Act. Very truly yours, (SGD.) FE ELOISA C. GLORIA Associate Commissioner