SPI Technologies Signs Convertible Notes Subscription Agreement with AIG Subsidiaries

December 17, 1999 PSE CIRCULAR FOR BROKERS NO. 3224-99 December 16, 1999 SPI Technologies Signs Convertible Notes Subscription Agreement with AIG Subsidiaries Listed company SPI Technologies Inc. (Philippine Stock Exchange, ticker symbol "SPI"), a leading exporter of information technology services, announced today that it has signed a Convertible Notes Subscription Agreement with AIG Asian Opportunity Fund, L.P. ("AOF") and Philippine American Life and General Insurance Company ("Philamlife"). AOF is a third-party direct investment fund managed by AIG Investment Corporation (Asia) Limited, the Asian investment arm of the American International Group, Inc. ("AIG"), and Philamlife is the Philippine insurance subsidiary of AIG. AOF and Philamlife will purchase US$10,000,000 of Convertible Notes issued by SPI. The key terms of the agreement are: cdll 3% coupon, payable annually in arrears; Conversion price equivalent to the average of the closing price during the 90 trading days subsequent to the date 12 months after the signing of the agreement, less 10%, with a minimum price of Pesos 10 per share, and a maximum price of Pesos 13 per share. The potential dilution of the existing SPI common shares by the US$10,000,000 of Convertible Notes would range from approximately 17% to 22%. cdll 6 year term A disclosure letter with a detailed term sheet was filed with the Philippine Stock Exchange today. The agreed terms are similar to those disclosed by the Company in its letter to the Philippine Stock. Exchange on November 18, 1999. As stated in this disclosure letter, SPI's Board has authorized the issuance by the Company of Convertible Notes in the aggregate amount of up to US$12,000,000. cdll The final closing and funding of the US$10,000,000 investment is expected to occur by January 2000, after the necessary Bangko Sentral ng Pilipinas and Securities and Exchange Commission approvals have been secured. The proceeds of the Convertible Notes will fund general corporate requirements, including principally the Company's investment in a call center joint venture with Integrated Telecom, LLC, a US company established by individuals who were key members of the call center practice of McKinsey & Co, the US management consulting company. The joint venture will be based in the Philippines and will establish several call centers to service the outsourced customer relationship management programs of overseas clients, through a variety of media, such as telephone, facsimile, and e-mail. American International Group, Inc. is the leading US-based international insurance organization and is the largest underwriter of commercial and industrial coverages in the United States. Its member companies write property, casualty, marine, life and financial lines insurance in approximately 130 countries and jurisdictions, and are engaged in a range of financial services and investment management businesses. In the Philippines, it is represented by the Philippine American Life and General Insurance Company (Philamlife). As of year-end 1998, AIG had assets of US$194 billion and earned US$3.8 billion on revenue of US$33.3 billion. cdlex Rafael Ll. Reyes, AIGIC Director of Direct Investments in the Philippines commented, "Our investment in SPI Technologies is part of AIG's continuing commitment to the Philippines and the Asia-Pacific region. We believe SPI, led by a team of dedicated professionals and utilizing abundant Filipino technical talent, will be very successful in offering international clients IT-enabled services." Ernest Cu, SPI's President and CEO, said, "We are delighted to have AIG come on board as a strategic investor, especially as it allows us to explore possible business opportunities within the AIG group, particularly with regard to call center and transaction processing services. We believe that the e-commerce interaction service industry offers a lot of opportunities for us. Our focus is on businesses that are high growth, have higher barriers to entry, are recurring in nature and can be leveraged by SPI's competitive advantages. This new initiative is part of a continuing shift towards higher quality business lines." LexLib Mr. Cu further added, "We consider call centers to be a high contribution new business for SPI. It leverages off SPI's proven expertise at providing remote services to overseas customers, via a well-educated, English speaking workforce using PCs to process information. The joint venture company has already lined up several US clients, including the first anchor client who has signed a Letter of Intent." SPI provides information technology services including (1) conversion of news, professional and technical information into electronic form for major Internet and online content providers, (2) conversion of legacy document collections into a standardized electronic form for use on corporate intranets or networks, (3) conversion of evidence related documents into a searchable CD-ROM format for corporations involved in major litigation, and (4) software services. SPI is an ISO 9002 certified exporter whose clients are located largely in North America and Europe. cdlex Forward-looking statements in this release are based on current expectations and actual results may differ materially due to risks, uncertainties, and other factors. These-forward-looking statements are based largely on the Company's current expectations and are subject to a number of risks and uncertainties, including without limitation, changes in external market factors and various competitive factors. Authenticated by: (SGD.) ERNEST L. CU President & CEO