Atty. Manuel R. Singson

November 3, 1998 Atty. Manuel R. Singson Singson Valdez & Associates Law Offices 3rd Floor, ICS Building, South Superhighway San Andres cor. Diamante Streets, Manila S i r : This refers to your letter dated September 22, 1998 inquiring on whether or not your client, Carmichael Management Inc. (CARMICHAEL) is required to secure a secondary license from the SEC to perform certain services for a foreign firm, under the following summarized premises. CARMICHAEL, a Philippine domestic corporation, is in the process of finalizing a Memorandum of Agreement (MOA) with Conrad Management, Inc. (CONRAD), a foreign corporation organized and existing under the laws of Cayman Islands, which is engaged in the business of selling foreign shares of stock, such as those registered in NASDAQ in the United States to various clients in foreign countries. Under the proposed MOA, CARMICHAEL will perform the services enumerated therein, related to management, consultancy, clerical, liaison services and other related activities under no employer-employee relationship, for a monthly fee of US$20,000.00. The proposed MOA further states that no sales or solicitation of stocks will be made in the Philippines and neither will CARMICHAEL collect any commissions or monies from the clients of CONRAD. Under the above-described situation, CARMICHAEL need not secure a secondary license from the SEC since the aforesaid services to be rendered by it fall within its primary purposes and no securities transactions are to be undertaken in the Philippines as all the clientele and securities of CONRAD are all foreign-based. The charter of a corporation is the measure of its powers and to that extent, it may transact all lawful business and enter into contracts and agreements of every kind. However, in performing the services under the proposed MOA, CARMICHAEL should not act as securities broker/dealer or salesman and should not go beyond what is authorized under its Articles of Incorporation . We trust that you are guided accordingly. Very truly yours, (SGD.) FE ELOISA C. GLORIA Officer-In-Charge