Legal Requirement of Bangko Sentral ng Pilipinas (BSP) for Merger or Consolidation A. General Merger/Consolidation (Memorandum o. M!"##$!

#"% dated &" August "##$) Su'mission of t(e follo)ing do*uments is simultaneous )it( t(e P(ilippine +epositor, -nsuran*e Corporation (P+-C)
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Arti*les of Merger or Consolidation dul, signed ', t(e President or .i*e President and *ertified ', t(e *orporate se*retar, or assistant *orporate se*retar, of ea*( *onstituent institutions setting fort( t(e follo)ing as required in se*tion /% of t(e Corporation Code0 a. 1(e Plan of Merger or Consolidation '. 1(e num'er of s(ares outstanding *. 1(e num'er of s(ares 2oting for and against t(e Plan3 respe*ti2el,4 1(e Plan of Merger or Consolidation setting fort( t(e follo)ing0 a. 1(e names of t(e *onstituent institutions4 '. 1(e terms of merger or *onsolidation and t(e mode of *arr,ing t(e same into effe*t4 *. A statement of t(e *(anges3 if an,3 in t(e Arti*les of in*orporation of t(e sur2i2ing institution in t(e *ase of merger4 and in t(e *ase of *onsolidation3 all t(e statements required to 'e set fort( in t(e Arti*les of -n*orporation4 and d. Su*( ot(er pro2isions )it( respe*t to t(e proposed merger or *onsolidation as are deemed ne*essar, or desira'le4 Resolution of t(e Board of +ire*tors of t(e respe*ti2e *onstituent institution appro2ing t(e Plan of Merger or Consolidation. 1(e resolution s(all 'e *ertified under oat( ', t(e respe*ti2e *orporate se*retaries of t(e *onstituent institutions4 Resolution of t(e meeting of t(e sto*k(olders in )(i*( at least t)o!t(irds ("/5) of t(e outstanding *apital sto*k of ea*( *onstituent institution (a2e appro2ed t(e plan of merger or *onsolidation. 1(e resolution s(all 'e *ertified under oat( ', t(e respe*ti2e *orporate se*retaries of t(e *onstituent institutions4 6inan*ial Statements a. Latest finan*ial statements and 5!,ear audited finan*ial statement of t(e merging finan*ial institutions

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'. 5!,ear finan*ial pro7e*tions )it( 2alid assumptions of t(e merged or *onsolidated institutions8 'alan*e s(eet and in*ome statement4
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List of merger in*enti2es t(at t(e Bank )ill a2ail of (Su'se*tion 9&#%.5 of t(e Manual of Regulations for Banks)4 List of sto*k(oldings of ea*( of t(e *onstituent institutions 'efore and after t(e merger4 List of dire*tors and offi*ers of ea*( merging/*onsolidating institutions4 List of proposed offi*er and dire*tors of t(e merged or *onsolidated institution and t(e summar, of t(eir qualifi*ations4 :rgani;ational *(art of t(e merged or *onsolidated institution in*luding t(e num'er of offi*es and lo*ation t(ereof4 -nter!*ompan, transa*tions relati2e to t(e su'mitted 6inan*ial Statements4 Computation of Risk Based Capital Adequa*, Ratio on t(e su'mitted finan*ial statements4 .ia'le operational plan )it( t(e follo)ing *omponents0 a. Marketing strategies4 '. Proposed target market 4 *. Proposed loan portfolio di2ersifi*ation4 d. +eposit generation4 e. Proposed impro2ements in a**ounting s,stem4 f. :perational *ontrol4 g. Computeri;ation plan4 and (. Communi*ation s,stem4 1(e appraiser8s report of reappraisal of 'ank premises3 if an,3 done ', an independent and li*ensed appraiser4 Proposed in*rease of *apital sto*k of sur2i2ing 'ank4 Proposed amendments in t(e arti*les of in*orporation sur2i2ing 'ank4 of

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+ire*tor8s *ertifi*ate (sur2i2ing 'ank) on t(e proposed amendment of t(e Arti*les of -n*orporation in*reasing t(e aut(ori;ed *apital sto*k4 and

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An, ot(er reasona'le requirement deemed material in t(e proper e2aluation of t(e merger or *onsolidation as ma, su'sequentl, 'e requested ', t(e BSP and/or P+-C.

<nder t(e 7oint undertaking of BSP and P+-C3 Cir*ular o. =$5 dated $ August "#&# or t(e BSP Guidelines on t(e Grant of Regulator, Relief under t(e Strengt(ening Program for Rural Bank3 is passed to promote t(e mergers and *onsolidation as a means to furt(er strengt(en t(e rural 'anking s,stem t(roug( t(e grant of finan*ial assistan*e (6A) ', t(e P+-C and regulator, relief ', t(e BSP to eligi'le strategi* t(ird part, in2estors (S1P-s) )(i*( s(all 'e rural 'anks (RBs) desiring to enter into mergers and *onsolidations )it( eligi'le distressed RBs under t(e SPRB ma, a2ail in a**ordan*e )it( t(e pro2isions of t(e Guidelines. 1(e a'o2e *ir*ular is supplemented ', Memorandum o. M!"#&"! #># or t(e SPRB Plus )(i*( in*ludes t(e t(rift 'anks (1Bs) as eligi'le 'anks in addition to RBs. ?ligi'le 'anks are t(ose )it( Capital Adequa*, Ratio of less t(an &# per*ent. -t also in*ludes uni2ersal 'anks3 *ommer*ial 'anks and t(rift 'anks as eligi'le SP1-s. -n addition to t(e legal requirements general merger/*onsolidation of 'anks3 SPRB and SPRB Plus requires t(e su'mission of t(e follo)ing &. List of regulator, relief t(e *onstituent institutions )ill a2ail from BSP4 ". Letter to BSP requesting restru*turing of past due

redis*ounting/emergen*, loan4 and letter to LBP requesting staggered redemption of matured LBP preferred s(ares4 5. S*(edule of un'ooked 2aluation reser2es 'ased on t(e latest BSP!R:?4 and >. Cop, of due diligen*e report on t(e eligi'le RB3 if an,. B. Legal requirements for pur*(ase or a*quisition Su'se*tion