Philippine Business Bank: Initial Public Offering: Final Offer Terms and Conditions

February 4, 2013 PSE MEMORANDUM NO. LA IPO-0052-13 TO : The Investing Public SUBJECT : Philippine Business Bank Initial Public Offering Final Offer Terms and Conditions This is with reference to Memorandum Nos. LA_IPO_2013-0015 and LA_IPO_2013-0050 dated January 16, 2013 and February 1, 2013, respectively, in connection with the Initial Public Offering ("IPO" or "Offer") of PHILIPPINE BUSINESS BANK ("PBB" or the "Bank") . As previously announced in Memorandum No. LA_IPO_2013-0015 dated January 16, 2013, the Exchange approved on January 9, 2013, the Bank's initial listing of 343,333,400 common shares with a par value of P10.00 per share, under the First Board of the Exchange, with details as follows: a. 242,000,000 common shares , representing the total number of issued and outstanding shares of the Bank prior to the IPO of the Bank's shares; and b. 101,333,400 common shares , representing the total number of shares to be offered to the public on a primary basis at an Offer Price of P31.50 per share . The Bank's final Terms and Conditions for the IPO is attached as Annex "A". For your information and guidance. (SGD.) J.V. B. ZUO III OIC, Listings Department Noted by: (SGD.) MARSHA M. RESURRECCION Head, Issuer Regulation Division ANNEX A PHILIPPINE BUSINESS BANK INITIAL PUBLIC OFFER Final Terms and Conditions of the Offer Offer Shares PBB, through the Joint Lead Underwriters and Bookrunners, is offering up to 101,333,400 Offer Shares with a par value Php10.00 per share. 20,269,200 Offer Shares are being sold and offered to all the trading participants of the PSE while 10,133,400 Offer Shares are being sold to Local Small Investors. The balance of 70,930,800 Offer Shares shall be distributed to the QIBs and the general public through the Joint Lead Underwriters and Bookrunners. Offer Price The Offer Shares are being offered at a price of Php31.50 per share. Offer Period The Offer Period shall commence on February 6, 2013 and end at 12:00 noon of February 12, 2013. PBB and the Joint Lead Underwriters and Bookrunners reserve the right to extend or terminate the Offer Period with the approval of the SEC and the PSE. Applications must be received by the Receiving Agent not later than 12:00 noon, Manila Time on February 12, 2013 if filed through a Selling Agent or PSE Trading Participants. Applications received thereafter or without the required documents will be rejected. Applications shall be considered irrevocable upon submission to the Selling Agent or Joint Lead Underwriter and Bookrunner, and shall be subject to the terms and conditions of the offer as stated in this Prospectus and in the Application. The actual subscription and/or purchase of the Offer Shares shall become effective only upon the actual listing of the Offer Shares on the PSE. Minimum Each Application must be for a minimum of 500 Offer Shares, and Subscription thereafter, in multiples of 100 Offer Shares. No Application for Eligible Investors multiples of any other number of shares will be considered. and Restrictions The Offer Shares may be subscribed to or held by any person of legal on Ownership age or duly organized and existing corporations, partnerships or other juridical entities regardless of nationality, subject to the restriction by law. Pursuant to R.A. No. 7906 or the Thrift Banks Act of 1995, aggregate foreign ownership in the Bank cannot exceed the maximum of 60 per cent of the issued and outstanding voting stock. An individual non- Filipino individual and non-bank entity can only acquire up to 40 per cent of the issued and outstanding voting stock of the Bank. Accordingly, the Bank cannot allow the issuance of shares or record the transfer of shares to persons other than Philippine Nationals if such issuance or transfers shall exceed the above-mentioned foreign ownership limits. Procedure Application forms to subscribe for Offer Shares in the Offer may be for Application obtained from the Selling Agents or the Joint Lead Underwriters and Bookrunners. All Applications shall be evidenced by the Application to Subscribe and Purchase form, duly executed in each case by an authorized signatory of the applicant and accompanied by one (1) completed signature card, which in the case of corporate and institutional applicants, should be authenticated by the corporate secretary, and the corresponding payment for the Offer Shares covered by the Application, photocopy of two (2) valid identification cards (IDs) for each signatory and all other required documents. The duly executed Application and required documents should be submitted during the Offer Period to the same office where it was obtained. If the applicant is a corporation, partnership, or trust account, the Application must be accompanied by the following documents; A certified true copy of the applicant's latest Articles of Incorporation and By-laws or Partnership and other constitutive documents (each as amended to date) duly certified by its corporate secretary; A certified true copy of the applicant's SEC certificate of registration duly certified by its corporate secretary; A duly notarized corporate secretary's certificate setting forth the resolution of the applicant's board of directors or equivalent body authorizing the purchase of the Offer Shares indicated in the application, identifying the designated signatories authorized for the purpose, including his or her specimen signature, and certifying the percentage of the applicant's capital or capital stock held by Philippine Nationals. Foreign corporate and institutional Applicants, in addition to the documents required for corporate Applicants, are required to submit, in quadruplicate, together with the Application, a representation and warranty stating that their investing in the Offer Shares being applied for will not violate the laws of their jurisdiction and that they are allowed to acquire, purchase and hold the Offer Shares. Payment Terms The Offer Shares must be paid for in full upon submission of the Application. Payment must be made by a check drawn against a bank in Metro Manila to the order of "PBB IPO". The check must be dated as of the date of submission of the Application and crossed for deposit. Acceptance/ The actual number of Offer Shares that an Applicant will be allowed to Rejection of subscribe for in the Offer is subject to the confirmation of the Joint Applications Lead Underwriters and Bookrunners. Applications shall be subject to the final approval of the Bank. The Bank, through the Joint Lead Underwriters and Bookrunners, reserves the right to accept or reject, in whole or in part, any Application. Applications where checks are dishonored upon first presentation and Applications which do not comply with the terms of the Offer shall be rejected. Any payment received pursuant to the Application does not mean approval or acceptance by the Bank of the Application. An Application, when accepted, shall constitute an agreement between the applicant and the Bank for the subscription to the Offer Shares at the time, in the manner and subject to the terms and conditions set forth in the Application and those described in this Prospectus. Notwithstanding the acceptance of any Application by the Joint Lead Underwriters and Bookrunners or their duly authorized representatives, acting for or on behalf of the Bank, the actual subscription and/or purchase by the applicant of the Offer Shares will become effective only upon listing of the Offer Shares on the PSE and upon the obligations of the Joint Lead Underwriters and Bookrunners and Selling Agents under the Underwriting Agreement becoming unconditional and not being suspended, terminated or cancelled, on or before the Listing Date, in accordance with the provision of the said agreement. If such conditions have not been fulfilled on or before the periods provided above, all application payments will be returned to the applicants without interest and, in the meantime, the said application payments will be held in a separate bank account with the Receiving Agent. Refunds In the event that the number of Offer Shares to be received by an applicant, as confirmed by the Joint Lead Underwriters and Bookrunners, is less than the number covered by its Application, or if an Application is rejected by the Bank, then the Joint Lead Underwriters and Bookrunners shall refund, without interest, within five (5) Banking Days from the end of the Offer Period, all, or a portion of the payment corresponding to the number of Offer Shares wholly or partially rejected. All refunds shall be available for pick-up at the office of the Receiving Agent by February 19, 2013. Documentary All documentary stamp taxes applicable to the original issuance of the Stamp Taxes Offer Shares by the Bank shall be for the sole account of PBB. Registration All Offer Shares will be issued in scripless form and lodged with the and Lodgment PDTC. The Applicant should indicate the lodgment information in the of Shares with Application. The Offer Shares will be lodged with the PDTC at least the PDTC two (2) trading days prior to the Listing Date. The Applicant may request for the upliftment of their shares and to receive stock certificates evidencing their investment in the Offers Shares through his/her broker after the Listing Date. Any expense to be incurred on such issuance of certificates shall be borne by the Applicant. Registration of The Bangko Sentral ng Pilipinas requires that investments in shares of Foreign stock funded by inward remittance of foreign currency be registered Investments with the BSP if the foreign exchange needed to service capital repatriation or dividend remittance will be sourced from the banking system. The registration with the BSP of all foreign investments in the Offer Shares shall be the responsibility of the foreign investor. See Foreign Exchange Regulations and Ownership. Restriction Existing shareholders who own an equivalent of at least 10 per cent of on Issuance and the issued and outstanding capital stock of the Bank after the Offer are Disposal of Shares required, under the Revised Listing rules of the PSE applicable to companies applying for listing on the PSE First Board, not to sell, assign or otherwise dispose of their common shares for a minimum period of 180 days after the Listing Date. Furthermore, pursuant to the PSE's rules on share issuances executed and fully paid for within 180 days prior to the start of the offer period with a transaction price lower than the offer price in the initial public offer, recipients of stock dividends issued by the Bank on November 16, 2012 are likewise subject to a 365-day lock-up required by the PSE. The parties and their respective shares covered by the foregoing lock- up provisions: Shareholder No. of Shares No. of Shares Subject to the Subject to the 180-Day Lock Up 365-Day Lock Up Provision Provision Alfredo M. Yao 22,199,910 105,713,856 Zest-O Corporation 14,999,940 71,428,286 Francis T. Lee 4,200,000 20,000,000 Leticia M. Yao 714,286 Armando M. Yao 714,286 Erlinda M. Yao 714,286 Jeffrey S. Yao 714,286 Rolando R. Avante 48 Amador T. Vallejos Jr. 474 Benjamin R. Sta. Catalina, Jr. 48 Paterno H. Dizon 48 Honorio O. Reyes-Lao 48 Peter N. Yap 48 Total 41,399,850 200,000,000 ========= ========== Except for the issuance of the Offer Shares pursuant to the Offer or Common Shares for distribution by way of stock dividends or in connection with an ESOP, the PSE will require the Bank, as a condition to listing of the Common Shares, not to issue new shares in its capital or grant any rights to or issue any securities convertible into or exchangeable for, or otherwise carrying rights to acquire or subscribe to, any shares in its capital or enter into any arrangement or agreement whereby any new shares or any such securities may be issued for a period of 180 days after the Listing Date. Listing and Trading The Bank's application for the listing of the Shares was approved by the PSE on January 9, 2013. All of the Offer Shares are expected to be listed on the PSE under the symbol "PBB" on or about February 19, 2013. Trading of the Common Shares that are not subject to lock-up is expected to commence on the same date. Expected Timetable The expected timetable of the Offer is tentatively scheduled as follows: Price Setting date February 1, 2013 Start of Offer Period February 6, 2013 PSE Trading Participants' February 6-8, 2013 Commitment Period Local Small Investor Offer February 6-12, 2013 Period Underwriters' Offer Period February 6-12, 2013 End of Offer Period February 12, 2013 Listing date February 19, 2013 CERTIFIED CORRECT: (SGD.) ALICE P. RODIL Senior Vice President-Controller Date: February 4, 2013 <http://www.pse.com.ph/resource/memos/2013/LA_IPO_2013-0052.pdf> last visited May 29, 2013.