Ms. Lourdes Constantino

April 16, 1980 Ms. Lourdes Constantino Rm. 502 Martinez Bldg. Dasmarias, Metro Manila Dear Ms. Constantino: This has reference to your letter-query dated March 24, 1980 requesting opinion on whether or not the provision of the articles of incorporation of the Polo Realty Corporation relative to the restrictions on transferability of stocks would apply to transfers by succession. llcd It appears from the articles of incorporation of subject company which you quoted in your letter that: "Tenth: That the following rules shall govern the same of corporate stocks: (1) Should any stockholder desire to sell his shares of stock, he must first offer to sell the same to the corporation, specifying the number of stocks for sale and the price therefor. The corporation is given thirty (30) days from such offer in writing within which to accept or reject the offer of sale. Should the corporation reject the offer or should the period expire without any action thereon by the corporation, the latter shall immediately upon said rejection or expiration of the period, endorse the offer to its stockholders, who, within a similar period of thirty (30) days from receipt of the indorsement or notice thereof, shall likewise either accept or reject the offer of sale of the price mentioned. In the event of rejection or inaction of the stockholders as regards said offer of sale within the period, the stockholder desiring to sell his shares of stock shall then be free to sell the (Missing page in SEC files) ". . . But this restriction does not cover the field of involuntary transfer such as those involved in insolvency, foreclosure or pledge or succession, nor does it afford protection against simulated sales to compel the other stockholders to buy at prices beyond fair market value should the remaining stockholders prefer to keep an unwelcome stranger from joining the family . . . As a rule, restrictions to transferability of stock expressly exclude from its applicability transfers by succession. (Aspects of Philippine Corporation Law, Law Center pp. 18-19) llcd Please be advised accordingly. Very truly yours, (SGD.) ROSARIO N. LOPEZ Director Corporate and Legal Department