PSE Circular for Brokers No. 3223-99

December 17, 1999 PSE CIRCULAR FOR BROKERS NO. 3223-99 16 December 1999 DISCLOSURE DEPARTMENT LISTINGS & DISCLOSURE GROUP PHILIPPINE STOCK EXCHANGE Philippine Stock Exchange Center Exchange Road, Ortigas Center Pasig City, Metro Manila Gentlemen: In compliance with the continuing disclosure requirements of the Exchange, we report that the Company today entered into a Subscription Agreement with AIG Asian Opportunity Fund L.P. and Philippine American Life and General Insurance Company, which provides for the issuance by the Company to AIG Asian Opportunity Fund L.P. and Philippine American Life and General Insurance Company of US$10,000,000 three percent (3%) Convertible Notes under terms and conditions similar to those disclosed by the Company in its letter to the Exchange dated 18 November 1999. As stated in the said disclosure letter, the Board of Directors of the Company authorized the issuance by the Company of Convertible Notes in the aggregate principal amount of up to US$12,000,000. The final closing of the transaction and the funding of the US$10,000,000 investment is expected to occur in January 2000, after the necessary Bangko Sentral ng Pilipinas and Securities and Exchange Commission approvals for this transaction have been secured. The Application for Approval of the issuance of the US$10,000,000 Convertible Notes and the Request for Exemption from the Registration Requirements of the Revised Securities Act have been filed with the Bangko Sentral ng Pilipinas and the Securities and Exchange Commission, respectively. A summary of the terms and conditions of the issuance of the US$010,000,000 Convertible Notes to AIG Asian Opportunity Fund L.P. and Philippine American Life and General Insurance Company is attached herewith as Annex "A." Very truly yours, (SGD.) FRANCIS P. HERNANDO Chief Finance Officer ANNEX A TERMS AND CONDITIONS Issuer: SPI Technologies, Inc. Investors: (a) AIG Asian Opportunity Fund L.P. and members of the AIG Group; and (b) Philippine American Life and General Insurance Company. Type: Convertible Notes Amount: Ten Million US. Dollars (US$10,000,000) Tenor: Six years Interest: Three per cent (3%), payable annually in arrears Conversion price: At all relevant times, Ten Pesos (F 10) to Thirteen Pesos (13) per share. To be fixed permanently at a ten percent (10%) discount to the ninety (90)-day average closing price of Issuer's stock. The ninety (90)-trading-day period shall begin twelve (12) months after the signing of the investment agreement. If the conversion price computed as such is less than Ten Pesos (P10) per share, the conversion price will remain Ten Pesos (P10) per share. If the conversion price computed as such is more than Thirteen Pesos (P13) per share, the conversion price will remain Thirteen Pesos (P13) per share. The exchange rate for the conversion will be equal to the average of the closing peso-dollar exchange rates for each of the seven business days prior to the date of Closing. The conversion price, as stipulated above, will be adjusted for any stock dividends, splits, extraordinary distributions, rights, issues, and other dilutive events. Conversion period: At any time after the approval in principle of the listing of the additional common shares into which the bond is convertible, and prior to maturity, conversion to common equity, in parts or in whole. Early conversion: After four years, if the preceding 45-day average closing stock price of the Issuer is equal to or greater than 150% of the conversion price, Issuer shall have a one-time option to cause the holder/s of the Convertible Notes to convert the bond at the conversion. Redemption: If not converted, redemption at par after six years. Early redemption: After four years, if the preceding 45-day average closing stock price of the Issuer is equal to or lower than 50% of the conversion price, the holder/s of the Convertible Notes shall have a one-time-option to redeem the Convertible Notes at par value.