Queenbee Resources Corporation, Book Building Process on Warrants Offering

March 3, 1998 PSE CIRCULAR FOR BROKERS NO. 261-98 SUBJECT : Queenbee Resources Corporation Book Building Process on Warrants Offering Further to Circular No. 154-98, please be reminded that the Domestic Lead Underwriter, PNB Capital, Inc. is now accepting bids for Queenbee Resources Corporation's Warrant Offering which commenced last February 26, 1998 and will end on March 10, 1998. The details are as follows: No. of Warrants available to the PSE member-brokers during the book-building Approximately P50.0 Million worth of Warrants Book-building period Starts 26-Feb-98 Ends All bids must be submitted to PNB Capital on or before 5:00 p.m. of March 10, 1998. Participants to the Book-building Qualified Institutional Buyers Must be a minimum of approximately the equivalent warrants of P1,000,000 rounded off to the nearest thousand, and if greater, in multiples of 100 warrants. A bidder is allowed to submit one or more bids at different bid prices. No maximum number of warrants has been set. PSE-Member-Brokers Must be a minimum of approximately the equivalent warrants of P100,000 rounded off to the nearest thousand, and if greater, in multiples of 100 warrants. A broker is allowed to submit one or more bids at different bid prices. No maximum number of warrants has been set. Pricing Date 11-Mar-98 Receipt of Notice of Acceptance of bids by QIBs and PSE-Member-Brokers 12-Mar-98 Offer Period March 12-13, 1998 Submission of Duly Accomplished Application forms indicating the number of warrants as indicated in the Notice of Acceptance, other required documents and corresponding payment Beginning March 12, 1998 and not later than March 13, 1998 from 9:00 a.m. to 5:00. p.m. For your convenience, we are attaching a copy of the Procedures on Warrants Offering and a sample copy of the Application to Bid. Please be guided accordingly. (SGD.) MARIA ISABEL T. GARCIA Head, Listing and Disclosures Group APPLICATION TO BID PNB CAPITAL & INVESTMENT CORPORATION 3/F PNB Financial Center Roxas Boulevard, Pasay City Subject : Queenbee Resources Corporation Warrant Offering Gentlemen: The undersigned applicant hereby submits a bid for the purchase of the warrants of Queenbee Resources Corporation (QRC) as follows: Bid Price No. of Warrants P __________ _________________ This bid is subject to the following terms and conditions: 1 The Bid . PNB Capital and Investment Corporation (PNB Capital), as Domestic Lead Underwriter, on behalf of the other domestic underwriters, are making available to investors the domestic offer of the warrants (representing 15% of the offering). 2. Bid Price . The bid price (which should be expressed in Philippine Peso) shall be the peso amount of the Warrant Price plus the Deposit where, the Deposit should be computed in accordance with the following formula: Deposit = (percentage x share price) Warrant price exercise price Where Percentage = 90% to 110% Share price = the lower of (i) the up to 15-day average or (ii) closing price of the Jollibee shares on the day of pricing day Warrant price = P0.50 Exercise price = P0.25 Bids should indicate the actual peso amount per warrant at which the bidder intends to subscribe to each warrant. Bids indicating formulas or otherwise indicated in amounts other than in actual peso amounts shall not be accepted . All bids must be rounded off to the nearest twenty-five centavos (P0.25) per warrant. 3. Bid Period . The bid period shall start at 9:00 a.m. February 26, 1998 and end at 5:00 p.m. on March 10, 1998. 4. Submission of Bids . All bids must be received by PNB Capital in the case of PSE brokers and the other participating underwriters on or before the end of the bid period. 5. Eligible Bidders . Only qualified institutional buyers (as defined in the SEC-Bed Memorandum Circular No. 04, Series 1997) are qualified to submit bids. 6. Number of Bids . A bidder is allowed to submit one or more bids at different bid prices. 7. Minimum Bid . For QIBs except for PSE member-brokers . Bids must be for a minimum number of warrants equivalent to approximately P1,000,000.00 rounded off to the nearest thousand, and if greater, in multiples of 100 warrants. For PSE member-brokers . Broker's bid must be for a minimum number of warrants equivalent to approximately P100,000.00 rounded off to the nearest thousand, and if greater, in multiples of 100 warrants 8. Acceptance, Rejection or Reduction of Bids . QRC and PNB Capital shall reserve the right to reject or accept, in whole or in part, any bid. The decision of QRC and the Domestic Lead Underwriter shall be final. 9. Award of Bids . Upon the setting of the issue price, the domestic underwriters shall inform bidders whose bids were accepted, indicating the issue price and the number of warrants awarded to such bidder. The awards made by the domestic underwriting syndicate shall be final and deemed to be accepted by the investor without need for a confirmation and shall bind the investor to pay the corresponding purchase price in the offer period. 10. Condition of Submission of Bids . Final acceptance of the bid shall be conditioned only upon issuance of the Order of Effectivity rendering the Registration Statement filed by QRC with the Securities and Exchange Commission effective. Upon the Registration Statement becoming effective and during the offer period, all bidders whose bids were accepted shall submit the appropriate application to subscribe forms for the number of warrants accepted together with the payment for the warrants and other required documents to the Domestic Lead Underwriters on March 13, 1998. ________________________________ Name of Bidder By: _______________________________ Address: ________________________ ________________________ _______ Telephone No. ____________________ Fax No. _________________________ PROCEDURES ON THE QUEENBEE WARRANTS OFFERING BOOK BUILDING PROCESS A. Qualified Institutional Buyers (QIB's) Excluding Brokers 1. There will be a book building process which will be available to qualified institutional buyers (QIBS) only as defined under SEC-BED Memorandum Circular No. 4, Series, 1997. 2. During the bookbuilding period which will start on February 26, 1998 and end on March 10, 1998, PNB Capital and Investment Corporation (PNB Capital), the Domestic Lead Underwriter, may receive requests/bids from QIBS. 3. Interested QIBs shall submit a bid letter indicating the number of warrants they are willing to buy with the corresponding bid price. (Pls. refer to attached bid letter format) Bids must be for a minimum of approximately the equivalent warrants of P1,000,000.00 rounded off to the nearest thousand, and if greater, in multiples of 100 warrants. A bidder is allowed to submit one or more bids at different bid prices. No maximum number of warrants has been set. Each bid shall be treated independently of any other bid submitted by a particular bidder, regardless of the bid prices indicated. All bids of a particular bidder shall be accumulated. Furthermore, if Bidder A submits several bids at the same price, then submission of such bids by Bidder A shall mean that Bidder A is willing to buy the total number of warrants indicated in all the bids. To illustrate: Bidder A submits the following bids: 10,000 warrants at P19.00 20,000 warrants at P18.50 30,000 warrants at P17.50 40,000 warrants at P17.50 50,000 warrants at P17.00 The foregoing bids shall mean that Bidder A is willing to buy a total of 150,000 warrants, assuming that the final price is set at P17.00. On the other hand, if the final price is set at P18.50 then Bidder A is willing to buy 30,000 warrants. If the price is set at P17.50, then Bidder A is willing to buy 100,000 warrants. 4. All bids must be submitted to PNB Capital on or before 5:00 p.m. of March 10, 1998. The bids must be accompanied by a duly notarized Secretary's Certificate setting forth the resolutions of the Board of Directors or equivalent body authorizing submission of bids and designating the signatories for the purpose and the specimen signatures of the designated authorized signatories. PNB Capital shall determine the level of demand for the warrants. 5. On pricing date (March 11, 1998), PNB Capital shall determine the number of submitted bids with prices equivalent to or higher than the issue price set for the warrants. In the event of an oversubscription, qualifying bids may be scaled down. 6. PNB Capital shall prepare a notice of acceptance informing the qualified bidder of the number of warrants a bidder can subscribe and the issue price of the warrants. The notice shall be sent on the start of the offer period (March 12, 1998) accompanied by an application form and signature card. LibLex B. PSE Member-Brokers 1. P50 Million worth of warrants shall be made available to the PSE member- brokers for bidding. Each brokers may submit bids during the book building period. Bids should be for the broker's own account only . 2. Broker's bid must be for a minimum of approximately the equivalent warrants of P100,000.00 rounded off to the nearest thousand, and if greater, in multiples of 100 warrants. A broker is allowed to submit one or more bids at different bid prices. No maximum number of warrants has been set. 3. The brokers should submit their bids to PNB Capital on or before the end of the bookbuilding period (March 10, 1998). The bids must be accompanied by a duly notarized Secretary's Certificate setting forth the resolutions of the Board of Directors or equivalent body authorizing submission of bids and designating the signatories for the purpose and the specimen signatures of the designated authorized signatories. 4. At the end of the bookbuilding period (March 10, 1998), PNB Capital shall determine the level of demand compared to the total amount to the PSE member-brokers. 5. On pricing date (March 11, 1998), PNB Capital will determine the number of submitted broker's bids which indicated prices equivalent to or greater than the issue price of the warrants. In case of oversubscription, PNB Capital shall then adopt a pro-rata allocation of warrants based on the total number of warrants made available to the PSE. The aggregate bid of a particular broker which is equal to or greater than the issue price shall be served ratably. To illustrate: BID PRICES Issue Broker P15.00 P16.00 P17.00 P18.00 Total Price At P16.00 A 10,000 20,000 30,000 60,000 50,000 B 30,000 15,000 15,000 60,000 60,000 Total 110,000 In the above illustration, assuming the issue price is set at P16.00, then Broker A will be served 50,000 warrants at P16.00, while Broker B will be served 60,000 warrants at P16.00. In case of oversubscription, the number of warrants to be served shall be equal to the aggregate number of warrants that is equal to or greater than the issue price divided by the total number of warrants ordered multiplied by the total number of warrants made available to the PSE member-brokers. Assuming that the issue price was set at P16.00 and there are only 100,000 warrants available, then the proportionate number of warrants that will be served to the brokers shall be as follows: A 50/110 x 100,000 warrants = 45,500 warrants B 60/110 x 100,000 warrants = 54,500 warrants Total 100,000 warrants 6. PNB Capital shall prepare a notice of acceptance informing the brokers, who submitted qualified bids, the number of warrants they can subscribe and the issue price of the warrants. The notice Shall be sent on the start of the offer period (March 12, 1998) accompanied by an application form and signature card. OFFER PERIOD 1. The QIB's and PSE member-brokers which received their notice of acceptance shall from 9:00 a.m. to 5:00 p.m., beginning March 12, 1998 and not later than March 13, 1998, submit their duly accomplished application forms indicating the number of warrants as reflected in the notices of acceptance, other required documents and the corresponding payment in the form of cash, manager's check or cashier's check. 2. During the offer period which will start on March 12, 1998 and end on March 13, 1998, application forms shall be made available at and may be obtained from the offices of the Domestic Lead Underwriter and other Underwriters. 3. Prospective investors who were not able or were otherwise not qualified to participate in the book-building process may subscribe to the offer by submitting their duly accomplished application forms together with the required documents and payments during the offer period. 4. The applicant may subscribe to the Warrants by submitting a duly accomplished and signed Application to Subscribe ("Application") and signature card accompanied by full payment for the Warrants covered by the required attachments and documentary requirements to any of the Domestic Underwriters. (1) An applicant must accomplish application forms in quadruplicate with one (1) signature card. If the applicant is a corporation, partnership or trust, the Application must be accompanied by the following documents: (i) a certified true copy of the Applicant's Articles of Incorporation and By-Laws or other constitutive documents, each as amended to date; (ii) a certified true copy of the Applicant's SEC Certificate of Registration; and (iii) a notarized Secretary's Certificate setting forth the resolutions of the Applicant's Board of Directors or equivalent body authorizing subscription to the Warrants and designating the signatories for the purpose, and the specimen signatures of the designated authorized signatories. (2) All Applications, signature cards and attachments must be submitted to the Domestic Underwriters on or before 12:00 noon on March 13, 1998. (3) The Warrants shall be paid in full in Philippine currency upon the submission of the duly accomplished and signed Application and signature card together with all attachments and requirements. Payments shall be made by cash, managers or cashier's check drawn against a Bangko Sentral ng Pilipinas authorized bank located in Metro Manila to the order of "Queenbee Warrants". The check must be dated as of the date of the Application and crossed for deposit. 5. Acceptance of the Applications shall be subject to the confirmation of the Domestic Lead Underwriter. The Company and the Domestic Underwriters reserve the right to accept, reject and scale down the number and amount of Warrants covered by the Application. In the event that the Warrants are insufficient to satisfy the Applications received, the Company and the Domestic Underwriters have the right to reallocate or limit the available Warrants in the manner deemed appropriate. Applications with dishonored checks upon first presentation and Applications which do not comply with the terms of the Offer will be rejected. In case of reduction or rejection, the Domestic Lead Underwriter shall inform the Applicant in writing of such reduction or rejection ten (10) days after the end of the Offer Period. 6. An Application when accepted, shall constitute an agreement between the Applicant and the Company for the subscription for the Warrants at the time, in the manner and subject to the conditions set forth in the Prospectus.