THE REPUBLIC OF THE PHILIPPINES
UNDERWRITING AGREEMENT
STANDARD TERMS
(DEBT SECURITIES AND WARRANTS)
1. Introduction. The Republic of the Philippines (the
"Republic") may issue and sell from time to time certain of its debt securities,
and, if so specified in the Terms Agreement (as hereinafter defined) warrants to
purchase debt securities, registered under one or more registration statements
referred to in Section 3(a) (the "Securities"). The debt securities will be
issued under the Fiscal Agency Agreement, dated as of October 4, 1999 (the
"Fiscal Agency Agreement"), between the Republic and The Chase Manhattan Bank,
as fiscal agent (the "Fiscal Agent"), in one or more series, which series may
vary as to denomination, interest rates, maturity, redemption provisions,
selling prices and other terms, with all such terms for any particular series of
the Securities being determined at the time of sale. Warrants may be issued
under a warrant agreement in a form to be filed as an exhibit to the
registration statement referred to in Section 3(a) between the Republic and the
warrant agent named therein. Particular series of the Securities shall be sold
pursuant to a Terms Agreement (as hereinafter defined), for resale in accordance
with terms of offering determined at the time of sale(1).
The firm or firms which agree to purchase the Securities are
hereinafter referred to as the "Underwriters" of such Securities, and the
representatives of the Underwriters, if any, specified in a Terms Agreement are
hereinafter referred to as the "Representatives"; provided, however, that if a
Terms Agreement does not specify any representative of the Underwriters, the
term "Representatives", as used in these Underwriting Agreement Standard Terms
(the "Standard Terms"), shall mean the Underwriters.
2. Terms Agreement. (a) A terms agreement relating to the
Securities (the "Terms Agreement"), which may be in telex, facsimile or other
written form, shall (i) contain substantially the terms and information in the
form set forth in Exhibit A hereto, (ii) incorporate by reference, to the extent
set forth therein, the provisions of these Standard Terms, and (iii) evidence
the obligation of the Underwriters to purchase the Securities. The Terms
Agreement will also specify the time and date of delivery and payment (such time
and date being herein and in the Terms Agreement referred to as the "Closing
Date"). The obligations of the Underwriters to purchase the Securities will be
several and not joint. It is understood that the Underwriters propose to offer
the Securities for sale as set forth in the Prospectus (as hereinafter defined).
The Securities delivered to the Underwriters at the Closing Date will be in
registered form, in such denominations and registered in such names as the
Underwriters may request.
(b) Each Underwriter represents and warrants that the
Securities to be purchased by it under the Terms Agreement will be purchased by
it as principal. Without prejudice to the provisions of Section 3(c) below and
except for registration under the Securities Act of 1933, as amended (the
"Act"), and compliance with the rules and regulations thereunder and the
qualification of the Securities for offer and sale under the laws of such
jurisdictions as the Representatives may request pursuant to Section 5(d), the
Republic shall not have any responsibility for obtaining, and each Underwriter
severally agrees with the Republic that each such Underwriter and its respective
affiliates will obtain, any consent, approval or authorization required by them
for the purchase, offer, sale or delivery by them of any of the Securities under
the laws and regulations in force in any jurisdiction to
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(1) If it is specified in the Terms Agreement that warrants will be issued:
(i) the number of warrants to be sold together with the applicable
denomination of the Securities and the title and principal amount of
the Securities which may be purchased upon the exercise of each warrant
and of all the warrants will be specified in the Terms Agreement and
(ii) the legal opinions and other documents to be delivered pursuant to
Section 4 hereof shall be appropriately modified to cover the warrants,
the Warrant Agreement, the Securities issuable upon the exercise of the
warrants and such related matters in such manner as the Representatives
or their counsel may reasonably request.
which they are subject or in or from which they make such purchase, offer, sale
or delivery of any of the Securities.
3. Representations and Warranties. The Republic represents and
warrants to and agrees with each of the Underwriters that:
(a) A registration statement identified in the Terms Agreement
in respect of the Securities has been filed with the Securities and
Exchange Commission (the "Commission"); such registration statement and
any post-effective amendment thereto, each in the form heretofore
delivered to the Representatives, have been declared effective by the
Commission in such form; no other document (other than any documents
incorporated by reference therein) with respect to such registration
statement has been filed with the Commission; and no stop order
suspending the effectiveness of such registration statement has been
issued and no proceeding for that purpose has been initiated or
threatened by the Commission; the Preliminary Prospectus Supplement
filed with the Commission pursuant to Rule 424 of the rules and
regulations of the Commission under the Act, is hereinafter called the
"Preliminary Prospectus Supplement"; the various parts of such
registration statement, as amended at the time of any Terms Agreement,
including all exhibits thereto and the information contained in the
basic prospectus identified in the Terms Agreement (the "Basic
Prospectus"), each as amended at the time such part of the registration
statement became effective, are hereinafter collectively called the
"Registration Statement"; the Basic Prospectus, as supplemented by a
prospectus supplement relating to the Securities, in the form first
filed pursuant to Rule 424 under the Act is hereinafter called the
"Prospectus"; such prospectus supplement is hereinafter called the
"Prospectus Supplement"; and any reference to any amendment or
supplement to the Prospectus or the Basic Prospectus shall be deemed to
refer to and include any annual reports on Form 18-K and any amendments
to such Form 18-K on Form 18K/A (including all exhibits thereto)
(collectively called a "Form 18-K") filed after the date of the
Prospectus or the Basic Prospectus, as the case may be, under the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), and
incorporated by reference in the Prospectus or the Basic Prospectus, as
the case may be.
(b) No order preventing or suspending the use of the Basic
Prospectus has been issued by the Commission, and the Basic Prospectus,
at the time of filing thereof, conformed in all material respects to
the requirements of the Act and the rules and regulations of the
Commission hereunder, and did not contain an untrue statement of a
material fact or omit to state a material fact required to be stated
therein or necessary to make the statements therein, in the light of
the circumstances under which they were made, not misleading.
(c) The Registration Statement conforms, and the Prospectus
and any further amendments or supplements to the Registration Statement
or the Prospectus will conform, in all material respects to the
requirements of the Act and the rules and regulations of the Commission
thereunder, the Registration Statement and any amendment thereto does
not and will not, as of the applicable effective date, contain an
untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements
therein not misleading; and the statements made in the Registration
Statement, the Prospectus and any amendments or supplements thereto
within the coverage of Rule 175(b) under the Act were made by the
Republic with a reasonable basis and in good faith; provided, however,
that this representation and warranty shall not apply to any statements
or omissions made in reliance upon and in conformity with information
furnished in writing to the Republic by an Underwriter through the
Representatives expressly for use therein.
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(d) The Fiscal Agency Agreement has been duly authorized,
executed and delivered by the Republic and is a valid and binding
agreement of the Republic, enforceable in accordance with its terms.
(e) The Securities have been duly authorized and, when
executed and authenticated in accordance with the provisions of the
Fiscal Agency Agreement and delivered to and paid for by the
Underwriters in accordance with the Terms Agreement, will be entitled
to the benefits of the Fiscal Agency Agreement and will be valid and
binding obligations of the Republic, enforceable in accordance with
their terms. The Securities will constitute direct, unconditional,
unsecured and general obligations of the Republic and the full faith
and credit of the Republic is pledged for the performance thereof. The
Securities will rank pari passu in priority of payment with all other
unsecured and unsubordinated External Indebtedness of the Republic.
"Indebtedness" means any indebtedness for money borrowed or any
guarantee of indebtedness for money borrowed. "External Indebtedness"
means Indebtedness which is denominated or payable by its terms in, or
at the option of the holder thereof payable in, a currency or
currencies other than the lawful currency of the Republic.
(f) The Republic is not, or with the giving of notice or lapse
of time or both would not be, in violation of or in default under any
constitutional or treaty provision, convention, statute, law,
regulation, decree, court order or similar authority binding upon the
Republic, or under any agreement or instrument to which the Republic is
a party or by which it or any of its properties is bound, except for
violations and defaults which individually and in the aggregate would
not reasonably be expected to have a material adverse effect on the
financial, economic or political condition of the Republic or its
ability to issue, offer or sell the Securities; the issue and sale of
the Securities and the performance by the Republic of all of the
provisions of its obligations under the Securities, the Fiscal Agency
Agreement and the Terms Agreement and the consummation of the
transactions therein contemplated will not conflict with or result in a
breach of any of the terms or provisions of, or constitute a default
under, any (x) constitutional or treaty provisions or (y) convention,
statute, law, regulation, decree, court order or similar authority
binding upon the Republic, or under any agreement or instrument to
which the Republic is a party or by which the Republic is bound or to
which any of the property or assets of the Republic is subject, which
in the case of clause (y) would reasonably be expected to have a
material adverse effect on the financial, economic or political
condition of the Republic or its ability to issue, offer or sell the
Securities.
(g) All necessary action by or on behalf of the Republic will
be taken to permit, and all necessary consents and approvals required
under the laws of the Republic have been or will be duly obtained and
be in full force and effect for, (i) the authorization, execution and
delivery of the Terms Agreement and the Fiscal Agency Agreement by the
Republic and for the performance of its obligations arising thereunder,
and (ii) the issuance and sale of the Securities by the Republic
pursuant to the Terms Agreement.
(h) There has not occurred any material adverse change, or any
development involving a prospective material adverse change, in the
financial, economic or political condition of the Republic from that
set forth in the Prospectus (exclusive of any amendments or supplements
thereto subsequent to the date of these Standard Terms).
(i) There are no legal or governmental proceedings pending or,
to the knowledge of the Republic, threatened (i) to which the Republic
is or may be a party or to which any property of the Republic is or may
be subject, which if determined adversely to the Republic, could
individually or in the aggregate reasonably be expected to have a
material adverse effect on the financial, economic or political
condition of the Republic or (ii) against or
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affecting the Republic before any court or administrative agency in the
Republic which challenges the validity or enforceability of the Terms
Agreement, the Fiscal Agency Agreement or the Securities or the
transactions contemplated hereby or thereby.
(j) Under the laws of the Republic in effect as of the date of
the Prospectus, payments made under the Securities will be free and
clear of withholding taxes and all other taxes imposed by the Republic
to the extent described in the Prospectus, and no capital gains, income
or withholding taxes and no stamp or other issuance or transfer taxes
or duties are payable by or on behalf of the Underwriters to any
governmental body in the United States or the Republic in connection
with the sale and delivery by the Republic of the Securities for the
respective accounts of the Underwriters or the sale and delivery by the
Underwriters to the purchasers thereof, other than income tax imposed
by the United States or the Republic on the income of the Underwriter
if its net income is otherwise subject to tax by such jurisdiction.
(k) The Terms Agreement, the Fiscal Agency Agreement and the
Securities are in proper legal form under the laws of the Republic for
enforcement thereof against the Republic; and to ensure the validity,
enforceability or admissibility into evidence of the Terms Agreement,
the Fiscal Agency Agreement or the Securities, it is not necessary that
the Terms Agreement, the Fiscal Agency Agreement , the Securities or
any other document to be furnished thereunder be filed or recorded with
any court or other authority in the Republic or that any tax of the
Republic or any political subdivision thereof be paid on or in respect
of any such document.
(l) It is not necessary under the laws of the Republic (i) to
enable the Underwriters to enforce their respective rights under the
Terms Agreement or any other document to be furnished thereunder or to
enable any holder of Securities to enforce its rights under the Fiscal
Agency Agreement or the Securities or any other document to be
furnished thereunder, provided, however, that they are not otherwise
engaged in business in the Republic, or (ii) solely by reason of the
execution, delivery or consummation of the Terms Agreement, that any
Underwriter or any holder of Securities be licensed, qualified or
entitled to carry out business in the Republic.
(m) No holder of Securities will be deemed resident,
domiciled, carrying on business or subject to taxation in the
Philippines solely by reason of the execution, delivery, consummation
or enforcement of the Terms Agreement or any other document to be
furnished thereunder, nor shall the foregoing be applicable to any
Underwriter solely by reason of the execution, delivery, consummation
or enforcement of this Agreement.
(n) The Republic is not in material default under the
provisions of any agreement or of any instrument evidencing or relating
to any outstanding External Indebtedness and is not engaged in any
discussions with any of its creditors with a view to rescheduling or
restructuring any such External Indebtedness, other than discussions
that are held in the ordinary course of business.
(o) The Republic has not in respect of any of the Republic's
External Indebtedness prepared, executed or filed any public instrument
as provided in Article 2244(14) of the Civil Code of the Republic, or
consented to or assisted in the preparation of filing of any such
public instrument, that would therefore have priority over the
Securities.
(p) The Republic is a member of and eligible to use the
general resources of the International Monetary Fund and is a member of
the International Bank for Reconstruction and Development.
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(q) Except as set forth in the Prospectus, the Republic is
subject to civil and commercial law, to suit, and to execution and
attachment and process in the nature thereof with respect to its
obligations under the Terms Agreement, the Fiscal Agency Agreement and
the Securities. The waiver of immunity set forth in these Standard
Terms, the Fiscal Agency Agreement and the Securities and described in
the Prospectus is valid, binding and enforceable against the Republic.
4. Conditions to the Underwriters' Obligations. The
obligations of the Republic to sell the Securities to the Underwriters and the
several obligations of the Underwriters to purchase and pay for the Securities
are subject to the following conditions:
(a) The Prospectus Supplement shall have been filed with the
Commission pursuant to Rule 424(b) within the applicable time period
prescribed for such filing by the rules and regulations under the Act;
no stop order suspending the effectiveness of the Registration
Statement or any part thereof shall have been issued and no proceeding
for that purpose shall have been initiated or threatened by the
Commission; and all requests for additional information on the part of
the Commission shall have been complied with to the representatives'
reasonable satisfaction;
(b) Subsequent to the execution and delivery of the Terms
Agreement and prior to the Closing Date:
(i) there shall not have occurred any downgrading,
nor shall any notice have been given of any intended or
potential downgrading or of any review for a possible change
that does not indicate the direction of the possible change,
in the rating accorded the Republic or any of the Republic's
securities or securities guaranteed by the Republic or in the
rating outlook for the Republic by any "nationally recognized
statistical rating organization," as such term is defined for
purposes of Rule 436(g)(2) under the Securities Act; and
(ii) there shall not have occurred any change, or any
development involving a prospective change, in the financial,
economic or political condition of the Republic from that set
forth in the Prospectus (exclusive of any amendments or
supplements thereto subsequent to the date of the Terms
Agreement) that, in your judgment, is material and adverse and
that makes it, in your judgment, impracticable to market the
Securities on the terms and in the manner contemplated in the
Prospectus.
(c) The Representatives shall have received on the Closing
Date a certificate, dated the Closing Date and signed by the Secretary
of Finance of the Republic, to the effect set forth in Section 4(b)(i)
above and to the effect that the representations and warranties of the
Republic contained in this Agreement are true and correct as of the
Closing Date and that the Republic has complied with all of the
agreements and satisfied all of the conditions on its part to be
performed or satisfied hereunder on or before the Closing Date.
The official signing and delivering such certificate may rely
upon the best of his or her knowledge as to proceedings threatened.
(d) The Underwriters shall have received on the Closing Date
an opinion of the Secretary of the Philippine Department of Justice,
Philippine counsel to the Republic, dated the Closing Date, in form and
substance satisfactory to the Representatives, to the effect set forth
in Exhibit B hereto.
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(e) The Underwriters shall have received on the Closing Date
an opinion of United States counsel to the Republic, dated the Closing
Date, in form and substance satisfactory to the Representatives, to the
effect set forth in Exhibit C hereto and a letter of United States
counsel to the Republic, dated the Closing Date, in form and substance
satisfactory to the Representatives, to the effect set forth in Exhibit
D hereto.
(f) The Underwriters shall have received on the Closing Date
an opinion of Philippine counsel for the Underwriters in form and
substance satisfactory to the Representatives.
(g) The Underwriters shall have received on the Closing Date
an opinion of United States counsel for the Underwriters in form and
substance satisfactory to the Representatives.
(h) The Republic shall have provided all other opinions,
certificates, letters and documents as the Underwriters may reasonably
request.
5. Covenants of the Republic. In further consideration of the
agreements of the Underwriters herein contained, the Republic covenants with
each Underwriter as follows:
(a) To furnish to United States counsel for the Underwriters,
without charge, one signed copy of the Registration Statement
(including exhibits thereto) in the form in which it became effective
and all amendments thereto.
(b) To file with the Commission within the applicable period
specified in Rule 424(b) under the Securities Act any prospectus
required to be filed pursuant to such Rule.
(c) If, during such period after the first date of the public
offering of the Securities as in the opinion of counsel for the
Underwriters the Prospectus is required by law to be delivered in
connection with sales by an Underwriter or dealer, any event shall
occur or condition exist as a result of which it is necessary to amend
or supplement the Prospectus in order to make the statements therein,
in the light of the circumstances when the Prospectus is delivered to a
purchaser, not misleading, or if, in the opinion of counsel for the
Underwriters, it is necessary to amend or supplement the Prospectus to
comply with applicable law, forthwith to prepare, file with the
Commission and furnish, at its own expense, to the Representatives,
either (i) amendments or supplements to the Prospectus so that the
statements in the Prospectus as so amended or supplemented will not, in
the light of the circumstances when the Prospectus is delivered to a
purchaser, be misleading or so that the Prospectus, as amended or
supplemented, will comply with law, or (ii) if the Republic so elects a
Form 18-K or an amendment thereto which will correct such statement or
omission or effect such compliance; provided, however, if any such
amendment or supplement is required to be prepared and filed after the
expiration of nine months after the time of issue of the Prospectus,
the Underwriters shall reimburse the Republic for its reasonable and
documented costs and expenses (including without limitation, all fees
and expenses of counsel, auditors and printing fees) in connection with
supplying the Underwriters with copies thereof.
(d) To endeavor, with the assistance of the Underwriters, to
qualify the Securities for offer and sale under the securities or Blue
Sky laws of such jurisdictions as the Representatives shall reasonably
request; provided, however, that the Republic will not be obligated to
file any consent to, or take any action that would subject it to,
general or unlimited service of process or waiver of immunity
(including, without limitation, waiver of sovereign immunity) in any
jurisdiction in which it is not otherwise so subject.
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(e) During the period beginning from the date of the Terms
Agreement and continuing to and including the earlier of (i) such time
as the Representatives may notify the Republic and (ii) the Time of
Delivery, the Republic will not offer, sell, contract to sell or
otherwise dispose of any debt securities issued or guaranteed by the
Republic which are substantially similar to the Securities, without the
Representatives' prior written consent.
(f) Unless otherwise agreed between the Republic and the
Underwriters, to pay or cause to be paid all expenses incident to the
performance of its obligations under this Agreement, including: (i) the
fees, disbursements and expenses of the Republic's counsel in
connection with the registration and delivery of the Securities under
the Securities Act and all other fees or expenses in connection with
the preparation and filing of the Registration Statement, any
Preliminary Prospectus Supplement, the Prospectus and amendments and
supplements to any of the foregoing, including all printing costs
associated therewith, and the mailing and delivering of copies thereof
to the Underwriters and dealers, in the quantities hereinabove
specified, (ii) all costs and expenses related to the transfer and
delivery of the Securities to the Underwriters, including any transfer
or other taxes payable thereon, (iii) the cost of printing or producing
any Blue Sky or legal investment memorandum in connection with the
offer and sale of the Securities under state law and all expenses in
connection with the qualification of the Securities for offer and sale
under state law as provided in Section 5(d) hereof, including filing
fees and the reasonable fees and disbursements of counsel for the
Underwriters in connection with such qualification and in connection
with the Blue Sky or legal investment memorandum, (iv) all filing fees
and the reasonable fees and disbursements of counsel to the
Underwriters incurred in connection with the qualification of the
offering of the Securities by the National Association of Securities
Dealers, Inc., (v) all costs and expenses incident to listing any
Securities on the Luxembourg Stock Exchange, (vi) the cost of printing
certificates representing any Securities, (vii) the costs and charges
of any fiscal agent, transfer agent, registrar or depositary, (viii)
the costs and expenses incurred by the Underwriters relating to
investor presentations on the "road show" (other than the Underwriters'
own travel and lodging expenses for such road show) undertaken in
connection with the marketing of the offering of the Securities,
including, without limitation, expenses associated with the production
of road show slides and graphics, fees and expenses of any consultants
engaged in connection with the road show presentations) with the prior
approval of the Republic, travel (including all land and air
transportation) and lodging expenses of the representatives and
officials of the Republic attending the road show and any such
consultants and (ix) all other costs and expenses incident to the
performance of the obligations of the Republic hereunder for which
provision is not otherwise made in this Section. It is understood,
however, that except as provided in this Section, Section 6 and the
last paragraph of Section 8 below, the Underwriters will pay all of
their costs and expenses, including fees and disbursements of their
counsel, transfer taxes payable on resale of any of the Securities by
them and any advertising expenses connected with any offers they may
make. The Underwriters shall deduct all fees and expenses payable by
the Republic pursuant to this subsection (g) which the Underwriters
have incurred on or prior to the Closing Date from the amount delivered
to the Republic in payment for the Securities; provided, however, that
the amounts so deducted shall be specified to the Republic in writing.
6. Indemnity and Contribution. (a) The Republic agrees to
indemnify and hold harmless each Underwriter and each person, if any, who
controls any Underwriter within the meaning of either Section 15 of the
Securities Act or Section 20 of the Exchange Act, from and against any and all
losses, claims, damages and liabilities (including, without limitation, any
legal or other expenses reasonably incurred in connection with defending or
investigating any such action or claim) caused by any untrue statement or
alleged untrue statement of material fact contained in the Registration
Statement or any amendment thereof, any Preliminary Prospectus Supplement or the
Prospectus (as amended or supplemented if the Republic shall have furnished any
amendments or supplements
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thereto), or caused by any omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the statements
therein not misleading, or, in the case of the Prospectus, in light of the
circumstances under which they were made, not misleading, except insofar as such
losses, claims, damages or liabilities are caused by any such untrue statement
or omission or alleged untrue statement or omission based upon information
relating to any Underwriter furnished to the Republic in writing by such
Underwriter expressly for use therein; provided, however, that the foregoing
indemnity agreement with respect to any Preliminary Prospectus Supplement or the
Prospectus or any amendment or supplement thereto shall not inure to the benefit
of any Underwriter from whom the person asserting any such losses, claims,
damages or liabilities purchased Securities, or any person controlling such
Underwriter, if a copy of the Prospectus (as then amended or supplemented if the
Republic shall have furnished any amendments or supplements thereto) was not
sent or given by or on behalf of such Underwriter to such person, if required by
law so to have been delivered, at or prior to the delivery of the written
confirmation of the sale of the Securities to such person, and if the Prospectus
(as so amended or supplemented) would have cured the defect giving rise to such
losses, claims, damages or liabilities.
(b) Each Underwriter agrees, severally and not jointly, to
indemnify and hold harmless the Republic and its officials who sign the
Registration Statement and each person, if any, who controls the Republic within
the meaning of either Section 15 of the Securities Act or Section 20 of the
Exchange Act to the same extent as the foregoing indemnity from the Republic to
such Underwriter, but only with reference to information relating to such
Underwriter furnished to the Republic in writing by such Underwriter expressly
for use in the Registration Statement, any Preliminary Prospectus Supplement,
the Prospectus or any amendments or supplements thereto.
(c) In case any proceeding (including any governmental
investigation) shall be instituted involving any person in respect of which
indemnity may be sought pursuant to Section 6(a) or 6(b), such person (the
"indemnified party") shall promptly notify the person against whom such
indemnity may be sought (the "indemnifying party") in writing and the
indemnifying party, upon request of the indemnified party, shall retain counsel
reasonably satisfactory to the indemnified party to represent the indemnified
party and any others the indemnifying party may designate in such proceeding and
shall pay the fees and disbursements of such counsel related to such proceeding.
In any such proceedings, any indemnified party shall have the right to retain
its own counsel, but the fees and expenses of such counsel shall be at the
expense of such indemnified party unless (i) the indemnifying party and the
indemnified party shall have mutually agreed to the retention of such counsel or
(ii) the named parties of any such proceeding (including any impleaded parties)
include both the indemnifying party and the indemnified party and representation
of both parties by the same counsel would be inappropriate due to actual or
potential differing interests between them. It is understood that the
indemnifying party shall not, in respect of the legal expenses of any
indemnified party in connection with any proceeding or related proceedings in
the same jurisdiction, be liable for the fees and expenses of more than one
separate firm (in addition to any local counsel) for all such indemnified
parties and that all such fees and expenses shall be reimbursed as they are
incurred. Such firm shall be designated in writing by the Representatives, in
the case of parties indemnified pursuant to Section 6(a), and by the Republic,
in the case of parties indemnified pursuant to Section 6(b). The indemnifying
party shall not be liable for any settlement of any proceeding effected without
its written consent, but if settled with such consent or if there be a final
judgment for the plaintiff, the indemnifying party agrees to indemnify the
indemnified party from and against any loss or liability by reason of such
settlement or judgment. Notwithstanding the foregoing sentence, if at any time
an indemnified party shall have requested an indemnifying party to reimburse the
indemnified party for fees and expenses of counsel as contemplated by the second
and third sentences of this paragraph, the indemnifying party agrees that it
shall be liable for any settlement of any proceeding effected without its
written consent if (i) such settlement is entered into more than 30 days after
receipt by such indemnifying party of the aforesaid request and (ii) such
indemnifying party shall not have reimbursed the indemnified party in accordance
with such request prior to the date of such settlement.
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No indemnifying party shall, without the prior written consent of the
indemnified party, effect any settlement of any pending or threatened proceeding
in respect of which any indemnified party is or could have been a party and
indemnity could have been sought hereunder by such indemnified party, unless
such settlement includes an unconditional release of such indemnified party from
all liability on claims that are the subject matter of this proceeding.
(d) To the extent the indemnification provided for in Section
6(a) or 6(b) is unavailable to an indemnified party or insufficient in respect
of any losses, claims, damages or liabilities referred to therein, then each
indemnifying party under such paragraphs, in lieu of indemnifying such
indemnified party thereunder, shall contribute to the amount paid or payable by
such indemnified party as a result of such losses, claims, damages or
liabilities (i) in such proportion as is appropriate to reflect the relative
benefits received by the Republic on the one hand and the Underwriters on the
other hand from the offering of the Securities or (ii) if the allocation
provided by clause 6(d)(i) above is not permitted by applicable law, in such
proportion and is appropriate to reflect not only the relative benefits referred
to in clause 6(d)(i) above but also the relative fault of the Republic on the
one hand and of the Underwriters on the other hand in connection with the
statements or omissions that resulted in such losses, claims, damages or
liabilities, as well as any other relevant equitable considerations. The
relative benefits received by the Republic on the one hand and the Underwriters
on the other hand in connection with the offering of the Securities shall be
deemed to be in the same respective proportions as the net proceeds from the
offering of the Securities (before deducting expenses) received by the Republic
and the total underwriting discounts and commissions received by the
Underwriters, in each case as set forth on the cover of the Prospectus
Supplement, bear to the aggregate public offering price of the Securities. The
relative fault of the Republic on the one hand and the Underwriters on the other
hand shall be determined by reference to, among other things, whether the untrue
or alleged untrue statement of a material fact or the omission or alleged
omission to state a material fact relates to information supplied by the
Republic or by the Underwriters and the parties' relative intent, knowledge,
access to information and opportunity to correct or prevent such statement or
omission. The Underwriters' respective obligations to contribute pursuant to
this Section 6 are several in proportion to the respective principal amounts of
Securities they have purchased hereunder, and not joint.
(e) The Republic and the Underwriters agree that it would not
be just or equitable if contribution pursuant to this Section 6 were determined
by pro rata allocation (even if the Underwriters were treated as one entity for
such purpose) or by any other method of allocation that does not take account of
the equitable considerations referred to in Section 6(d). The amount paid or
payable by an indemnified party as a result of the losses, claims, damages and
liabilities referred to in the immediately preceding paragraph shall be deemed
to include, subject to the limitations set forth above, any legal or other
reasonably incurred by such indemnified party in connection with investigating
or defending any such action or claim. Notwithstanding the provisions of this
Section 6, no Underwriter shall be required to contribute any amount in excess
of the amount by which the total price at which the Securities underwritten by
it and distributed to the public were offered to the public exceeds the amount
of any damages that such Underwriter has otherwise been required to pay by
reason of such untrue or alleged untrue statement or omission or alleged
omission. No person guilty of fraudulent misrepresentation (within the meaning
of Section 11(f) of the Securities Act) shall be entitled to contribution from
any person who was not guilty of such fraudulent misrepresentation. The remedies
provided for in this Section 6 are not exclusive and shall not limit any rights
or remedies which may otherwise be available to any indemnified party at law or
in equity.
(f) The indemnity and contribution provisions contained in
this Section 6 and the representations, warranties and other statements of the
Republic contained in this Agreement shall remain operative and in full force
and effect regardless of (i) any termination of this Agreement, (ii) any
investigation made by or on behalf of any Underwriter or any person controlling
any Underwriter
9
or by or on behalf of the Republic, its officials or any person controlling the
Republic and (iii) acceptance of and payment for any of the Securities.
7. Termination. Each Terms Agreement shall be subject to
termination by notice given by the Representatives to the Republic, if (a) after
the execution and delivery of the Terms Agreement and prior to the Closing Date
(i) trading generally shall have been suspended or materially limited on or by
the New York Stock Exchange, (ii) trading of any securities of the Republic
shall have been suspended on any exchange or in any over-the-counter market,
(iii) a general moratorium on commercial banking activities in New York or the
Republic shall have been declared by the relevant authorities or (iv) there
shall have occurred any outbreak escalation of hostilities involving the
Republic or the United States or declaration by the Republic or the United
States of a national emergency or war or other calamity or crisis that, in the
judgment of the Representatives, is material and adverse or any material adverse
change in international financial markets, and (b) in the case of any of the
events specified in clauses 7(a)(i) through 7(a)(iv), inclusive, such event,
singly or together with any other such event, makes it, in the judgment of the
Representatives, impractical to market the Securities on the terms and in the
manner contemplated in the Prospectus.
8. Defaulting Underwriters. If, on the Closing Date, any one
or more of the Underwriters shall fail or refuse to purchase Securities that it
has or they have agreed to purchase on such date under the Terms Agreement, and
the aggregate principal amount of Securities which such defaulting Underwriter
or Underwriters agreed but failed or refused to purchase is not more than
one-tenth of the aggregate principal amount of the Securities to be purchased on
such date, the other Underwriters shall be obligated severally in the
proportions that the principal amount of Securities set forth opposite their
respective names in Schedule A of the Terms Agreement bears to the principal
amount of Securities set forth opposite the names of all such non-defaulting
Underwriters, or in such other proportions as the Representatives may specify,
to purchase the Securities which such defaulting Underwriter or Underwriters
agreed but failed or refused to purchase on such date; provided, however, that
in no event shall the principal amount of Securities that any Underwriter has
agreed to purchase pursuant to this Agreement be increased pursuant to this
Section 8 by an amount in excess of one-ninth of such principal amount of
Securities without the written consent of such Underwriter. If within 36 hours
after such default by any Underwriter or Underwriters, the Underwriters do not
arrange for the purchase of such Securities, then the Republic shall be entitled
to a further period of 36 hours within which to procure another party or parties
reasonably satisfactory to the Underwriters to purchase such Securities on such
terms. In any such case either the Underwriters or the Republic shall have the
right to postpone the Closing Date, but in no event for longer than seven days,
in order that the required changes, if any, in the Registration Statement and in
the Prospectus or in any other documents or arrangements may be effected. The
term "Underwriter" as used in these Standard Terms shall include any person
substituted under this Section with like effect as if such person had originally
been a party to this Agreement with respect to such Securities.
If the aggregate principal amount of Securities which remains
unpurchased is more than one-tenth of the aggregate principal amount of
Securities to be purchased on the Closing Date, then the Terms Agreement shall
terminate without liability on the part of any non-defaulting Underwriter or the
Republic. Any action taken under this paragraph shall not relieve any defaulting
Underwriter from liability in respect of any default of such Underwriter.
If any Terms Agreement shall be terminated by the
Underwriters, or any of them, because of any failure or refusal on the part of
the Republic to comply with the terms or to fulfill any of the conditions of
such Terms Agreement, or if for any reason the Republic shall be unable to
perform its obligations under such Terms Agreement, the Republic will reimburse
the Underwriters or such Underwriters as have so terminated such Terms Agreement
with respect to themselves, severally, for all reasonable and documented
out-of-pocket expenses (including the reasonable fees and
10
disbursements of their counsel) incurred by such Underwriters in connection with
this Agreement or the offering contemplated thereunder.
9. Counterparts. The Terms Agreement may be signed in two or
more counterparts, each of which shall be an original, with the same effect as
if the signatures thereto were upon the same instrument.
10. Applicable Law. The Terms Agreement shall be governed by
and construed in accordance with the laws of the State of New York, except that
all matters governing the authorization, execution and delivery of the Terms
Agreement by the Republic will be governed by the laws of the Republic of the
Philippines.
11. Appointment of Agent for Service; Waiver of Immunity. The
Republic irrevocably submits to the jurisdiction of any federal court in the
Southern District of New York, any state court in the Borough of Manhattan, The
City of New York or any competent court in the Philippines (the "Specified
Courts") over any suit, action or proceeding against it or its properties,
assets or revenues with respect to any Terms Agreement (a "Related Proceeding").
The Republic waives, to the fullest extent permitted under applicable law, any
objection to Related Proceedings in such courts whether on the grounds of venue,
residence or domicile or on the ground that the Related Proceedings have been
brought in an inconvenient forum. The Republic agrees that a final
non-appealable judgment in any such Related Proceedings (the "Related Judgment")
shall be conclusive and binding upon it and may be enforced in any Specified
Court or in any other courts to the jurisdiction of which the Republic is or may
be subject (the "Other Courts"), by a suit upon such judgment.
To the extent that the Republic or any of its revenues, assets
or properties shall be entitled, in any jurisdiction in which any Specified
Court is located, in which any Related Proceedings may at any time be brought
against it or any of its revenues, assets or properties, or in any jurisdiction
in which any Specified Court or Other Court is located in which any suit, action
or proceeding may at any time be brought solely for the purpose of enforcing or
executing any Related Judgment, to any immunity from suit, from the jurisdiction
of any such court, from set-off, from attachment prior to judgment, from
attachment in aid of execution of judgment, from execution of a judgment or from
any other legal or judicial process or remedy, and to the extent that in such
jurisdiction there shall be attributed such an immunity, the Republic
irrevocably agrees not to claim and irrevocably waives such immunity to the
fullest extent permitted by the laws of such jurisdiction, provided that such
agreement and waiver, insofar as it relates to any jurisdiction other than a
jurisdiction in which a Specified Court is located, is given solely for the
purpose of enabling the several Underwriters to enforce or execute a Related
Judgment. The waiver of immunities referred to herein constitutes only a limited
and specific waiver for the purpose of any Terms Agreement and under no
circumstances shall it be interpreted as a general waiver of the Republic or a
waiver with respect to proceedings unrelated to such Terms Agreement. The
Republic does not waive such immunity in respect of its (i) properties and
assets which are used by a diplomatic or consular mission of the Republic
(except as may be necessary to effect service or process) (ii) property and
assets of military character and under the control of military authority or
defense agency or (iii) property located in the Republic and dedicated to a
public or governmental use (as distinguished from patrimonial property or
property dedicated to a commercial use). In addition, the Republic has not
waived its sovereign immunity in connection with any action arising out of or
based on United States federal or state securities laws.
The Republic has appointed the Philippine Consul General in
New York, New York as its authorized agent (the "Authorized Agent") at 000 Xxxxx
Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000 upon whom process may be served in any action
arising out of or based on this Agreement, which may be instituted in any
Specified Courts by the several Underwriters. Such appointment will be
irrevocable until all amounts in respect of the Securities have been paid by the
Republic to the Fiscal
11
Agent or unless and until the Republic shall have appointed a successor as
authorized agent and such successor shall have accepted such appointment. The
Republic agrees that it will at all times maintain an authorized agent to
receive such service, as provided above. The failure of the Authorized Agent to
give the Republic notice of the service of process shall not affect the validity
of any proceeding based on that process or any judgment obtained pursuant to it.
The Republic will take any and all action, including the filing of any and all
documents and instruments, that may be necessary to continue such appointment or
appointments in full force and effect as aforesaid. Service of process upon the
Authorized Agent at the address indicated in this Section 11, or at such other
address in the Borough of Manhattan, The City of New York, as may be the office
of the Authorized Agent at the time of such service, shall be deemed in every
respect, effective service of process upon the Republic. Upon receipt of such
service of process, the Authorized Agent shall advise the Republic promptly by
facsimile of its receipt thereof, but the failure to so advise shall have no
effect on the validity or time in less of any such service.
The Philippine Consul General in New York, New York, however,
is not the agent for service of process for actions arising out of or based on
the United states federal or state securities laws, and the Republic's waiver of
immunity does not extend to such actions. Because the Republic has not waived
its sovereign immunity in connection with any action relating to such claims, it
will only be possible to obtain a United States judgment against the Republic
based on such laws if a court were to determine that the Republic is not
entitled under the Foreign Sovereign Immunities Act of 1976 to sovereign
immunity with respect to such actions.
In view of such waiver of immunity, the Republic would be
subject to suit in competent courts in the Philippines. Judgments obtained
against the Republic in any foreign court in respect of any sum payable by it
under this Agreement would be recognized and enforced by the courts of the
Republic in an action brought to enforce such judgment without re-examination of
the issues in dispute so long as (i) such judgment was not obtained by collusion
or fraud, (ii) the foreign court rendering such judgment had jurisdiction over
the case, (iii) the Republic had proper notice of the proceedings before the
foreign court and (iv) such judgment was not based upon a clear mistake of law
or fact.
12. Currency. To the fullest extent permitted by law, the
obligations of the Republic in respect of any amount due under each Terms
Agreement will, notwithstanding any payment in any other currency (whether
pursuant to a judgment or otherwise), be discharged only to the extent of the
amount in the relevant currency (the "relevant currency") that the party
entitled to receive such payment may, in accordance with its normal procedures,
purchase with the sum paid in such other currency (after any premium and costs
of exchange) on the business day immediately following the day on which such
party receives such payment. To the fullest extent permitted by law, if the
amount in the relevant currency that may be so purchased for any reason falls
short of the amount originally due, the Republic agrees to pay such additional
amounts in the relevant currency, as may be necessary to compensate for the
shortfall. To the fullest extent permitted by law, if the amount in the relevant
currency that may be so purchased for any reason exceeds the amount originally
due, the Underwriter agrees to pay such additional amounts, in the relevant
currency, as may be necessary to compensate for the excess. Any obligation of
the Republic not discharged by such payment will, to the fullest extent
permitted by applicable law, be due as a separate and independent obligation
and, until discharged as provided herein or therein, will continue in full force
and effect.
12
Exhibit A
REPUBLIC OF THE PHILIPPINES
TERMS AGREEMENT
(DEBT SECURITIES)
Republic of the Philippines
Attention: [ ] [Date]
Ladies and Gentlemen:
We are acting on behalf of the underwriters (including
ourselves) named in Schedule A hereto (such underwriters being hereunder called
the "Underwriters") in connection with the offering and sale by the Republic of
the Philippines (the "Republic") of [currency and principal amount] aggregate
principal amount of [full title of debt securities] (the "Securities").
Subject to the terms and conditions set forth herein or
incorporated by reference herein, the Republic hereby agrees to sell and each of
the Underwriters agrees to purchase, severally and not jointly, the principal
amount of the Securities set forth in Schedule A hereto opposite the name of
such Underwriter at a purchase price of [ ]% of the principal amount of the
Securities [plus accrued interest, if any, from [date of the Securities] to the
Time of Delivery referred to below].(2)
The Securities shall have terms set forth in the Prospectus
dated [ ], [ ] and the Prospectus Supplement date [ ], [ ], including the
following:
Maturity Date: [ ], [ ]
Interest Rate:
Interest Payments: [ ] and [ ] commencing [ ], [ ], [(Interest
accrues from [ ], [ ])](3)
Redemption Provisions:
Sinking Fund Requirement:
Form and Denomination:
Manner of Payment and Type of Funds: [Certified or official
bank check or check]/[wire transfer] drawn on or by a New York Clearing House
Bank and payable in [next day]/[immediately available] funds.
Registration Statement: The Republic's registration statement,
as amended, under Schedule B of the Securities Act of 1933, as amended
(Registration No[s]. [ ]).
Representatives: [ ]
--------
(2) To be included unless the transaction closes on a regular interest
payment date.
(3) To be included unless the transaction closes on a regular interest
payment date.
A-1
Name and Address of the Underwriters for purposes of
communications under this Terms Agreement:
Closing Date: [ ] ([ ] time) [ ], [ ] or at such other time
thereafter as the Republic and the Representatives may agree.(4)
Closing Locations:
[Other Terms:]
The Underwriters will pay for the Securities upon delivery
thereof at the Closing location on the Closing Date.
All provisions contained in the document entitled "THE
REPUBLIC OF THE PHILIPPINES UNDERWRITING AGREEMENT STANDARD TERMS (DEBT
SECURITIES AND WARRANTS)" as filed as an exhibit to the Registration Statement,
a copy of which is attached hereto, are herein incorporated by reference in
their entirety and shall be deemed to be a part of this Terms Agreement to the
same extent as if such terms had been set forth in full herein, except that if
any term defined in such document is otherwise defined herein, the definition
set forth herein shall control.
Please confirm your agreement by having an authorized officer
sign a copy of this Terms Agreement in the space set forth below.
Very yours truly,
[Name[s] of Representative]
[On behalf of [themselves] [itself] and the
other Underwriters named hereon]
[By: Name[s] of Representative]
By:
------------------------------
Name:
Title:
Accepted:
REPUBLIC OF THE PHILIPPINES
By:
------------------------------
Name:
Title:
--------
(4) The Closing Date should be no more than o business days after the date
of this Terms Agreement.
A-2
SCHEDULE A
Underwriter Principal Amount
----------- ----------------
Total $
A-3
Exhibit B
[FORM OF GOVERNMENT OPINION]
[Date]
[Representatives]
Ladies and Gentlemen:
Philippines Bond Offer
----------------------
I have acted as legal adviser to the Republic of the
Philippines (the "Republic") in connection with the issue and sale to you
pursuant to the terms of a Terms Agreement dated as of o among you, as
Underwriters (the "Underwriters") and the Republic (the "Underwriting
Agreement") of $o principal amount of the Republic's o% Bonds Due o (the
"Securities"). The Securities are issued pursuant to the provisions of a Fiscal
Agency Agreement dated as of o (the "Fiscal Agency Agreement") between the
Republic and o, as the Fiscal Agent (the "Fiscal Agent").
The Republic has filed with the Securities and Exchanges
Commission (the "Commission") a registration statement, including a prospectus,
relating to the Securities. The registration statement as amended at the time it
becomes effective, including the information (if any) deemed to be part of the
registration statement at the time of effectiveness pursuant to Rule 430A under
the Securities Act of 1933, as amended (the "Securities Act") is hereinafter
referred to as the "Registration Statement", the related prospectus, as
supplemented by the prospectus supplement dated o, and as first filed with the
Securities and Exchange Commission pursuant to Rule 424(b)(5) under the
Securities Act is hereinafter referred to as the "Prospectus".
This opinion is furnished to you pursuant to Section 4(d) of
the Underwriting Agreement Standard Terms (Debt Securities) (the "Standard
Terms"). Unless otherwise defined herein, capitalized terms used herein shall
have the meanings specified in the Underwriting Agreement.
In such capacity, I reviewed such laws and examined such
documents as I have deemed necessary for the opinions hereafter expressed,
including the following documents:
(a) the Underwriting Agreement Standard Terms (Debt
Securities);
(b) the Terms Agreement;
(c) the Fiscal Agency Agreement;
(d) the Securities;
(e) the Registration Statement;
(f) the Prospectus; and
(g) such other official records of the Republic and its
agencies, and such other agreements and documents as I have deemed
appropriate as bases for the opinions set forth below.
B-1
The Terms Agreement and Fiscal Agency Agreement are
collectively referred to in this opinion as the "Agreements."
In giving the opinions herein, I have made the following
assumptions:
(i) that all documents submitted to me as copy or
specimen documents conform to the originals thereof;
(ii) that all documents have been validly authorized,
executed and delivered by all the parties thereto (other than
the Republic); and
(iii) that the signatures on all originals of all
documents submitted to me are genuine.
As to other questions of fact material to my conclusions
expressed herein, to the extent that I have not independently established the
facts, I have relied upon the statements of fact contained in the documents I
have examined and on certificates or representations of responsible officers and
other representatives of the Republic and other parties to the relevant
agreements. Nothing has come to my attention which leads me to believe that such
certificates and representations are not accurate.
I express no opinion as to any law other than the law of the
Republic and I have assumed that there is nothing in any other law that affects
my opinions herein. In particular, I have made no independent investigation of
the U.S. federal or New York State laws as a basis for the opinions herein and
do not express or imply and opinion thereon.
Based upon and subject to the foregoing and having regard to
such legal considerations as I deem relevant, I am of the opinion that:
(i) Insofar as Philippine law governs the execution
and delivery thereof, the Terms Agreement has been duly
authorized, executed and delivered by the Republic;
(ii) The Fiscal Agency Agreement has been duly
authorized, and insofar as Philippine law governs the
execution and delivery thereof, executed and delivered by the
Republic;
(iii) The Securities have been duly authorized and,
when executed and authenticated in accordance with the
provisions of the Fiscal Agency Agreement and delivered to and
paid for by the Underwriters in accordance with the terms of
the Terms Agreement, will have been duly executed and
delivered. The Securities constitute direct, unconditional,
unsecured and general obligations of the Republic and the full
faith and credit of the Republic is pledged for the
performance thereof. The Securities rank pari passu in
priority of payment with all other unsecured and
unsubordinated External Indebtedness of the Republic.
"Indebtedness" means any indebtedness for money borrowed or
any guarantee of indebtedness for money borrowed. "External
Indebtedness" means Indebtedness which is denominated or
payable by its terms, or at the option of the holder thereof,
in a currency or currencies other than the lawful currency of
the Republic.
(iv) To the best of my knowledge after due inquiry,
the Republic is not, or with the giving of notice or lapse of
time or both would not be, in violation of or in default under
any constitutional or treaty provision, convention, statute,
law,
B-2
regulation, decree, court order or similar authority binding
upon the Republic, any fiscal agency agreement, indenture,
mortgage, deed of trust, loan agreement or other agreement or
instrument to which the Republic is a party or by which it or
any of its properties is bound, except for violations and
defaults which individually and in the aggregate are not
material to the Republic taken as a whole or to the holders of
the Securities. The issue and sale of the Securities and the
performance by the Republic of all of the provisions of its
obligations under the Securities, the Fiscal Agency Agreement
and the Terms Agreement and the consummation of the
transactions therein contemplated will not conflict with or
result in a breach of any of the terms or provisions of, or
constitute a default under, any constitutional or treaty
provision, convention, statute, law, regulation, decree, court
order or similar authority binding upon the Republic, any
fiscal agency agreement, indenture, mortgage, deed of trust,
loan agreement or other agreement or instrument to which the
Republic is a party or by which the Republic is bound or to
which any of the property or assets of the Republic is
subject;
(v) All necessary action by or on behalf of Republic
has been taken to permit, and all necessary consents and
approvals required under the laws of Republic have been duly
obtained and are in full force and effect for, (A) the
authorization, execution and delivery of the Terms Agreement
and the Fiscal Agency Agreement by the Republic and for the
performance of its obligations arising thereunder, and (B) the
issuance and sale of the Securities by the Republic pursuant
to the Terms Agreement, including the Full Powers of the
President of the Republic and the consent and the preliminary
and final approvals of the Monetary Board which are the only
such consents or approvals required;
(vi) To the best of my knowledge after due inquiry,
there has not occurred any material adverse change, or any
development involving a prospective material adverse change,
in the condition, financial, economic, political or otherwise,
of the Republic from that set forth in the Prospectus
(exclusive of any Amendments or supplements thereto subsequent
to the date of the Terms Agreement);
(vii) Other than as set forth or contemplated in the
Prospectus, to the best of my knowledge after due inquiry,
there are no legal or governmental investigations, actions,
suits or proceedings pending, threatened or contemplated
against or affecting the Republic which, if determined
adversely to the Republic, could individually or in the
aggregate reasonably be expected to have a material adverse
effect on the financial, economic or political condition of
the Republic; and there are no statutes, regulations,
contracts or other documents that are required to be filed as
an exhibit to the Registration Statement or required to be
described in the Registration Statement or the Prospectus
which are not filed or described as required;
(viii) The description in the Registration Statement
and the Prospectus of the constitution, laws, statutes and
regulations of the Republic or any subdivision thereof are
accurate and complete in all material respects and fairly
present the information purported to be shown;
(ix) Under the laws of the Republic in effect as of
the date hereof, payments made under the Securities will be
free and clear of withholding taxes and all other taxes
imposed by the Republic to the extent described in the
Prospectus, and no capital gains, income or withholding taxes,
and no stamp or other issuance or transfer taxes or duties are
payable by or on behalf of any Underwriter to any governmental
body in the Republic in connection with (A) the sale and
delivery by the Republic of
B-3
the Securities for the respective accounts of the
Underwriters, (B) the sale and delivery of the Securities made
outside the Republic by the Underwriter to the purchasers
thereof and (C) the execution and delivery of the Terms
Agreement or the Fiscal Agency Agreement, in each case other
than income tax imposed by the Republic on the income of an
Underwriter if its net income is otherwise subject to tax by
the Republic. Profits derived from the sale and delivery of
the Securities made within the Republic by an Underwriter who
qualifies as a U.S. resident under the tax treaty between the
Republic and the United States of America shall not be subject
to Republic taxes if such profits are not attributable to a
permanent establishment of the Underwriter in the Philippines;
(x) It is not necessary under the laws of the Republic
(A) to enable the Underwriters or holder of Securities, who
are not otherwise engaged in business in the Republic, to
enforce any of their rights under the Terms Agreement, the
Fiscal Agency Agreement, the Securities or any other document
to be furnished thereunder or (B) solely by reason of the
execution, delivery or consummation of the Terms Agreement,
that any underwriter or any holder of Securities be licensed,
qualified or entitled to carry out business in the Republic.
The opinion in this paragraph (x) is subject to the
qualification, with respect to any such party otherwise carry
on business in the Republic (other than by reason only of the
execution or performance of any such Agreement(s) or
Securities or enforcement of any such Agreement(s) or
Securities) that such party will not be permitted to maintain
by itself or by an assignee any suit for recovery of any debt,
claims or demand whatsoever, unless it has or shall have
obtained a license to transact business in the Republic from
the Philippine Securities and Exchange Commission;
(xi) The Terms Agreement, the Fiscal Agency Agreement
and the Securities are in proper legal form under the laws of
the Republic for enforcement thereof against the Republic; and
to ensure the validity, enforceability or admissibility into
evidence of the Terms Agreement, the Fiscal Agency Agreement
or the Securities, it is not necessary that the Terms
Agreement, the Fiscal Agency Agreement, the Securities or any
other document to be furnished thereunder be filed or recorded
with any court or other authority in the Republic or that any
tax of the Republic or any political subdivision thereof be
paid on or in respect of any such document;
(xii) (A) The provisions of the Terms Agreement, the
Fiscal Agency Agreement and the Securities wherein the
Republic submits to the jurisdiction of the federal courts in
the Southern District of New York and the state courts in the
Borough of Manhattan, The City of New York, and waives any
immunity, including sovereign immunity, are valid and binding
to the extent set forth in the Terms Agreement, the Fiscal
Agency Agreement and the Securities; (B) final judgment
against the Republic in any such suit, action or proceeding
brought, in accordance with such provisions, in the federal or
state courts in the City of New York would be conclusive and
binding upon the Republic and may be enforced through a
separate action filed to enforce such action in the courts of
the Republic, without retrial or reexamination but subject to
the procedural requirements relating to enforcement and
recognition of foreign judgments and provided that (1) the
court rendering such judgment had jurisdiction over the
subject matter of the action in accordance with its
jurisdiction rules, (2) the Republic had notice of the
proceedings before the applicable federal or state court in
the City of New York, (3) such judgment was not obtained by
collusion or fraud, and (4) such judgment was not based on a
clear mistake of fact or
B-4
law; and (C) except as set forth in the Prospectus there was
no laws of the Republic that limit or prohibit the Republic's
agreements or waives referred to above;
(xiii) The information set forth in the Prospectus
under the captions "Republic of the Philippines,"
"Taxation--Philippine Taxation," "Description of the
Securities--Description of the Debt Securities--Governing Law"
and "Description of the Securities--Description of the Debt
Securities--Jurisdiction and Enforceability of Judgments,"
insofar as such statements relate to laws of the Republic and
legal matters, documents or proceedings referred to therein,
are accurate in all material respects and fairly summarize in
all material respects the information purported to be shown
therein;
(xiv) No holder of Securities will be deemed resident,
domiciled, carrying on business or subject to taxation in the
Republic solely by reason of the execution, delivery,
consummation or enforcement of the Terms Agreement or any
other document to be furnished thereunder, nor shall the
foregoing be applicable to any underwriter solely by reason of
the execution, delivery, consummation or enforcement of the
Terms Agreement;
(xv) To the best of my knowledge after due inquiry,
the Republic has not and no other person has, in respect of
any of the Republic's External Indebtedness, prepared,
executed or filed any public instrument as provided in Article
2244(14) of the Civil Code of the Republic, or consented to or
assisted in the preparation of filing of any such public
instrument, that would therefore have priority over the
Securities;
(xvi) The Republic is a member of the International
Monetary Fund and of the International Bank for Reconstruction
and Development;
(xvii) Except as set forth in the Prospectus, the
Republic is subject to civil and commercial law, to suit, and
to execution and attachment and process in the nature thereof
with respect to its obligations under the Terms Agreement, the
Fiscal Agency Agreement and the Securities. The waiver of
immunity set forth in the Terms Agreement, the Fiscal Agency
Agreement and the Securities is valid, binding and enforceable
against the Republic;
(xviii) The provisions of the Terms Agreement, the
Fiscal Agency Agreement and the Securities, including without
limitation the indemnification and contribution provisions set
forth in the Terms Agreement, do not contravene the law,
customs or public policy of the Republic;
(xix) The choice of New York law to govern the
validity, construction and performance of the Terms Agreement,
the Securities and the Fiscal Agency Agreement would be upheld
by a court of the Republic as a valid and effective choice of
law under the laws of the Republic;
(xx) Nothing has come to my attention which causes me
to believe that (other than financial or statistical data
included therein or omitted therefrom, as to which I express
no opinion) the Registration Statement and the prospectus
included therein at the time the Registration Statement became
effective contained any untrue statement of a material fact or
omits to state a material fact required to be stated therein
or necessary to make the statements therein not misleading, or
that as of the date of this opinion, the prospectus, as
amended or supplemented, if applicable, contains any untrue
statement of a material fact or omits to state a material fact
B-5
necessary in order to make the statements therein, in the
light of the circumstances under which they were made, not
misleading;
(xxi) The appointment of the Authorized Agent in
Section 11 of the Standard Terms Agreement and any waiver in
that section by the Republic in respect thereto are legal,
valid and binding in accordance with their respective terms
under the laws of the Republic;
(xxii) To the best of my knowledge after due inquiry,
no outstanding unsecured External Indebtedness of the Republic
has priority over the Securities in respect of payments upon
liquidation or insolvency;
(xxiii) The information in the Prospectus stated on
the authority of public officials of the Republic has been
stated in their official capacities thereupon duly authorized
by the Republic; and
(xxiv) The execution, delivery and performance by the
Republic of the Terms Agreement and the Fiscal Agency
Agreement constitute private and commercial acts rather than
public or governmental acts.
This opinion is further subject to the following
qualifications:
(i) I express no opinion as to the enforceability of
any provision that purports to permit a second or separate
suit, after recovery on a judgment in a judgment currency, for
recovery of the difference between the amount of judgment
currency stated in such judgment and the amount of US dollars
due under any Agreement or any Security.
(ii) Nothing in this opinion should be taken as
indicating that the remedy of specific performance or
injunction under any particular provision of any Agreement or
any Security would necessarily be granted by a Philippine
court in any particular instance if there is otherwise
available an adequate compensatory remedy with respect
thereto.
(iii) The enforceability of the obligations of the
Republic under any Agreement or any Security is subject to
general principles of equity. In applying these principles, a
Philippine court might require that parties exercising any
right under any Agreement or any Security act reasonably and
in good faith. Such a requirement might be applied, among
other situations, to the provisions of the Agreements or the
Securities purporting to authorize conclusive determinations
by any party to such Agreement or Security.
This opinion is rendered to you solely for your benefit as
Underwriters, at the request of the Republic, any may not be relied upon by any
other person.
Very truly yours,
DEPARTMENT OF JUSTICE
B-6
Exhibit C
(FORM OF U.S. COUNSEL OPINION)
Opinion points to be covered by U.S. Counsel include:
i. The Terms Agreement has been duly executed and delivered by the
Republic under the law of the State of New York;
ii. The Fiscal Agency Agreement has been duly executed and delivered by the
Republic under the law of the State of New York and constitutes a
valid, binding and enforceable agreement of the Republic;
iii. The Securities have been duly executed and delivered by the Republic
under the law of the State of New York and are valid, binding and
enforceable obligations of the Republic, entitled to the benefits of
the Fiscal Agency Agreement;
iv. The Securities are exempt from the provisions of the Trust Indenture
Act of 1939, as amended, under Section 304(a)(6) thereof, and no
indenture in respect of the Securities need be qualified under such
Act;
v. The issuance and sale of the Securities to the Underwriters pursuant to
the Terms Agreement and the performance by the Republic of its
obligations in the Terms Agreement, the Fiscal Agency Agreement and the
Securities do not require any consent, approval, authorization,
registration or qualification of or with any governmental authority of
the United States or the State of New York, except such as have been
obtained or effected under the Securities Act (but such counsel
expresses no opinion as to any consent, approval, authorization,
registration or qualification that may be required under state
securities or Blue Sky laws);
vi. Under the law of the State of New York relating to submission to
jurisdiction, the Republic has, pursuant to Section 11 of the
Underwriting Agreement Standard Terms (Debt Securities and Warrants)
(the "Standard Terms") and Section 15 of the Fiscal Agency Agreement
submitted to the personal jurisdiction of any New York State or U.S.
federal court located in the Borough of Manhattan, The City of New
York, New York in any action rising out of or relating to the
Underwriting Agreement, the Fiscal Agency Agreement or the Securities,
and has appointed the Philippine Consul General in New York as its
authorized agent for the purpose described in Section 11 of the
Standard Terms and Section 15 of the Fiscal Agency Agreement; and
service of process effected on such agent in the manner set forth in
Section 11 of the Standard Terms and Section 15 of the Fiscal Agency
Agreement will be effective to confer valid personal jurisdiction over
the Republic in any such action. The enforceability in the United
States of America of the waiver of immunities by the Republic set forth
in Section 11 of the Standard Terms and Section 15 of the Fiscal Agency
Agreement is subject to the limitations imposed by the Foreign
Sovereign Immunities At of 1976 and to the other limitations contained
in such agreements;
vii. The statements set forth in the Prospectus under the heading
"Description of the Securities--Description of the Debt Securities,"
insofar as such statements purport to summarize certain provisions of
the Securities and the Fiscal Agency Agreement, provide a fair summary
of such provisions, and the statements set forth in the Prospectus
under the heading "Taxation--United States Tax Considerations," insofar
as such statements purport to summarize certain
C-1
federal income tax laws of the United States, provide a fair summary of
the principal U.S. federal income tax consequences of an investment in
the Securities.
C-2
Exhibit D
[FORM OF U.S. COUNSEL LETTER]
Points to be covered by U.S. Counsel in the letter include:
i. Such counsel confirms that (based solely upon a telephone confirmation
from a representative of the Commission) the Registration Statement has
become effective under the Securities Act and, insofar as such counsel
is aware, no stop order suspending its effectiveness has been issued
and no proceeding for that purpose has been instituted or threatened by
the Commission;
ii. Such counsel is of the opinion that the Registration Statement, at the
time it became effective, and the Prospectus and any amendments and
supplements thereto, as of the date of this letter (other than
financial and statistical data included therein, as to which such
counsel need express no view) appeared on their face to be
appropriately responsive in all material respects to the requirements
of the Securities Act; and that nothing has come to such counsel's
attention which causes such counsel to believe that (other than
financial and statistical data included therein, as to which such
counsel need express no view) the Registration Statement and the
Prospectus included therein at the time the Registration Statement
became effective contained any untrue statement of a material fact or
omitted to state a material fact required to be stated therein or
necessary to make the statements therein not misleading, or that as of
the date of this letter, the Prospectus (except the financial and
statistical data included therein, as to which such counsel need
express no view), as amended or supplemented, if applicable, contains
any untrue statement of a material fact or omits to state a material
fact necessary in order to make the statements therein, in the light of
the circumstances under which they were made, not misleading.
D-1
