Atty. Marcial O.T. Balgos

September 11, 1990 Atty. Marcial O.T. Balgos 5th Floor Corinthian Plaza Paseo de Roxas, Makati Metro Manila S i r : This refers to the position paper of the proposed Philippine Leisure Estate (PLE) project to be developed in the 200 hectares property in Bacoor, Cavite, submitted to the Commission for consideration. LexLib Considering that the security instruments to be issued by the PLE only entitle the holders thereof to a corresponding participation in the asset pool, its proceeds and profit, shall not extend to the legal title or ownership of the land in the pool, the scheme introduced therein may not be violative of the constitutional restriction on the land ownership by foreigners. The proposed project, therefore, may be legally feasible subject to the following conditions: 1. The "Asset Privatization Trust Certificates" to be issued under the scheme are categorized as "certificates of interest or participation in a profit sharing agreement" or "investment contract" which fall within the meaning of "Securities" under the Revised Securities Act. Hence, the issuance thereof is subject to the registration requirements under said Law. 2. The APTCs shall clearly disclose the reservation or exclusion of the legal title and ownership of the land in the PLE asset pool. 3. Once the property located in the project site is developed in accordance with the plan and owners thereof are actually paid from the proceeds derived from the issuance of the APTCs, the same shall only be disposed to qualified purchasers. 4. The appointed Trustee Bank must be duly authorized to engage in "trust functions" pursuant to RA No. 337, otherwise known as the General Banking Act. 5. That the Committee on Privatization and the Asset Privatization Trust are authorized under Proclamation No. 50 which created them, to adopt the above-mentioned scheme of disposing the assets they hold in trust for the Government, instead of the usual "public bidding". cdll (SGD.) ROSARIO N. LOPEZ Chairman