THE REHABILITATION OF THE AGRIX GROUP OF COMPANIES FOR AND FOR OTHER PURPOSES.

• Number: Presidential Decree No. 1717
• Sections: 12

Preamble

WHEREAS, Agrix Marketing, Inc. and its subsidiary and

affiliate corporations had induced the public to invest funds upon the promise

of excessive rates of interest under schemes the Securities and Exchange

Commission has declared to be illegal devices;

WHEREAS, Agrix Marketing, Inc. and its subsidiary and

affiliate corporations have defaulted on the on the payment of the promised

yields including the principal, as a result of the deterioration of their

financial position;

WHEREAS, pursuant to its powers under PD 902-A, the

Securities and Exchange Commission found that these high interest-yielding

investment contracts were illegal devices or schemes amounting to

misrepresentations which are detrimental to the interest of the public

particularly the small investors;

WHEREAS, after study and evaluation of the existing assets

and liabilities, earnings and operations of the Agrix Group of corporations, it

has been determined that the best way to salvage and protect the interests of

its investors and creditors is to consolidate the assets and liabilities of the

Agrix Group of Companies into a single corporation which will then be

rehabilitated with, the assistance of government;

WHEREAS, under Letter of Instructions No. 1021, the National

Development Company has been deputized to formulate and adopt a rehabilitation

program, for the Agrix Complex corporations to best protect the interests of its

investors and creditors;

WHEREAS, in view of the magnitude of investments and the

number of small investors involved, there is a need to act expeditiously in

order to protect the investing public and creditors and insure stability of the

economy;

NOW, THEREFORE, I, FEDINAND E. MARCOS, President of the

Republic of the Philippines, by virtue of the powers vested, in me by the

Constitution, do hereby order:

Section 1 Rehabilitation Program.

SECTION 1. Rehabilitation Program. — The

rehabilitation program of Agrix Marketing, Inc., and its subsidiary and

affiliate corporations as formulated by the National Development Company is

hereby approved, under terms and conditions set forth below.

Section 2 Dissolution of the Agrix Group of Companies and Organization of New Agrix, Inc.

SEC. 2. Dissolution of the Agrix Group of Companies and

Organization of New Agrix, Inc. — In line with the rehabilitation program,

the corporations comprising the Agrix Group of Companies are to be dissolved and

their assets and liabilities are to be transferred to New Agrix, Inc. which is

hereby authorized to be organized by a private stock corporation. The Securities

and Exchange Commission is hereby instructed to permit the incorporation of New

Agrix, Inc. with an authorized capital stock of Two Hundred Million Pesos

(P200,000,000.00) divided into 200 million common shares with a par value of One

(1) Peso per share.

The provisions of the Corporation Code regarding-watered stocks

notwithstanding, the paid-up capital of New Agrix, Inc. will consist of the sum

of the valid claims of investors and shareholders in the Agrix Group of

Companies. In the determination of valid claims, only the principal amount,

without interest and dividends, of investors and shareholders in the Agrix Group

of Companies, excluding those against whom criminal charges have been or will be

filed, will be considered.

Section 3 Procedure for Issuance of Common Shares of the New Agrix, Inc.

SEC. 3. Procedure for Issuance of Common Shares of the

New Agrix, Inc. — New Agrix, Inc. shall issue shares of stock equivalent to

the principal amount of the valid claims of all Agrix investors and

shareholders, other than those excluded in Sec. 2, upon submission by such

investors and shareholders of original copies of proof of their investment. A

Claims Committee, consisting of a representative from the National Development

Company, the Securities and Exchange Commission and the Ministry of Justice, is

hereby constituted to establish the rules and regulations for determining the

validity of claims.

Section 4 Settlement of Monetary Obligations of Dissolved Corporations.

SEC. 4. Settlement of Monetary Obligations of Dissolved

Corporations. — All monetary collections, whether secured or unsecured, of

the dissolved corporations, duly submitted and verified shall be assured by the

New Agrix, Inc., but only in respect of the principal value thereof, except for

secured creditors. Payments thereof shall be subject to the following terms and

conditions:

Secured obligations shall bear interest at the rate of twelve per cent (12%)

per annum on outstanding balances and shall be payable in equal annual

installments over a 5-year period, commencing one year from date hereof. All

mortgages and other liens presently attaching to any of the assets of the

dissolved corporations are hereby extinguished.

Unsecured obligations shall not bear interest and shall be payable in equal

annual installment over a 10-year period, commencing one year from date hereof.

All accrued interests, penalties or charges as of date hereof pertaining to

the obligations, whether secured or unsecured, shal1 not be

recognized.

Section 5 Interest-Free Rehabilitation Loan.

SEC. 5. Interest-Free Rehabilitation Loan. — To

assist in the attainment of the objectives of the rehabilitation program, the

National development Company shall extend an interest-free loan to the New

Agrix, Inc. in an amount not to exceed Ten Million Pesos (10,000,000.00) ,

unless authorized by the President of the Philippines.

Section 6 Exemption from taxes.

SEC. 6. Exemption from taxes. — As a further

assistance from the national government and in order to accelerate the

rehabilitation program, New Agrix Inc. shall be exempt from all taxes under the

National Internal Revenue Code, as amended, for a period of five years from date

hereof.

Section 7 Management of the New Agrix, Inc.

SEC. 7. Management of the New Agrix, Inc. — In

order to protect its interests and that of the investors, National Development

Company shall manage the New Agrix, Inc. until such time as the interest-free

loan has been fully paid. In carrying out this management responsibility, the

National Development Company shall submit periodic and regular reports to the

Board of Directors of New Agrix, Inc. which shall be duly organized in

accordance with corporate rules, to represent the shareholders of New Agrix Inc.

upon payment of the National Development Company loan, the Board of New Agrix,

Inc. will appoint its own management.

Section 8 Exemption from Liability.

SEC. 8. Exemption from Liability. — The National

Development Company, including their officers and employees or any person or

entity acting in their behalf, shall not be liable for any act or omission in

connection with the implementation of this Decree.

Section 9 Actions or Proceedings Involving the Dissolved Corporations and/or their Assets.

SEC. 9. Actions or Proceedings Involving the Dissolved

Corporations and/or their Assets. — All monetary claims against the

dissolve corporations which are presently pending, or which are hereafter be

filled, with the court or with any ad-judicatory body, shall be dismissed. In

addition, in all legal proceedings of whatever nature wherein a claim or charge

is made against any of the assets of the dissolved corporations, no order shall

be issued which may in any way interfere with the full possession and ownership

of said assets by the New Agrix, Inc.

Section 10 Assistance of Government Agencies and Offices.

SEC. 10. Assistance of Government Agencies and Offices.

— The Securities and Exchange Commission and such other government agencies

or offices as may be involved in the implementation of this Decree shall extend

all assistance to facilitate the achievement of the objectives of this

Decree.

Section 11 Effectivity.

SEC. 11. Effectivity. — This Decree shall take

effect 90 days from date hereof upon certification by the Ministry of Justice

that the filing of criminal charges against Agrix principals has been completed,

whichever is earlier.

Done in the City of Manila this 21st day of August, in the year of Our Lord,

Nineteen Hundred and Eighty

(Sgd.) FERDINAND E. MARCOS

President of the

Philippines

By the President:

(Sgd.) JOAQUIN T. VENUS, JR.

Presidential

Assistant