Phoenix Petroleum Philippines, Inc.PNX

Disposition of Phoenix Petroterminals & Industrial Park Corp. (PPIPC)

Company disposed a wholly-owned subsidiary, the Phoenix Petroterminals & Industrial Park Corp. (PPIPC), pursuant to the approval of the Board of Directors on September 2, 2016

The sale will allow the Company to allocate all of its resources to fuel and thus enable to drive its aggressive growth of its core business and distribution of petroleum products nationwide. The proceeds of the sale shall be used to pay off existing debts which will effectively reduce interest-bearing-debt-to-equity ratio.

95% of the purchase price paid in Cash while remaining 5% to be paid within 6 months from execution of the Deed of Sale

Phoenix Petroterminals & Industrial Park Corp. is a developer of and manages the Phoenix Petroterminals & Industrial Park consisting of about 94 hectares of land spanning the 3 Barangays Salong, Puting Bato West and Lumbang Calzada in Calaca, Batangas. It is engaged in the business of acquiring and selling lands, buildings and improvements and the like.

cash

Fairness Opinion on the valuation of PPIPC rendered by the third party, the Multi-national Bancorporation (MIB), duly accredited with the Commission and the Exchange

Php950,000,000.00 paid in cash while the balance of Php50,000,000.00 shall be paid within 6 months from execution of the Deed of Sale

The Obligation of the Buyer to purchase the Subject Shares and to pay the Sellers shall be subject to the fulfillment of the all the following conditions precedents as follows:

a) The representations and warranties of the Sellers under this Agreement shall continue to be true and correct as of the Closing Date unless otherwise provided.

b) All agreements, conditions and covenants required in the Agreement and any agreement executed in connection therewith, and all acts to be performed or conditions to be complied with by the Sellers shall have been complied with or performed in accordance with the terms and conditions.

c) There is no breach by any of the Sellers of any provision of this Agreement or occurrence of an event which by the passage of time shall constitute a breach.

d) The Buyer shall have received from the Sellers copies of all applicable resolutions of the Board of Directors of the Sellers authorizing the execution of this Agreement and the sale, transfer and conveyance of the Subject Shares, designating the authorized signatories for purposes of this Agreement, certified under oath by the respective Corporate Secretaries of the Sellers.

e) All Governmental authorizations or other consents, approvals, filings, notices, waivers and other actions necessary for the sale and purchase of the Subject Shares and to give effect to the transaction contemplated in this Agreement, shall have been obtained, made or completed. In this case PCC approval for the sale was obtained on __________________.

f) Termination of all consultancy agreements or arrangements with third parties (the “Consultants”) as of Closing Date and the absolute, irrevocable and unconditional release of PPIPC by the Consultants from any payments or liability in connection with the any consultancy, employment or payment agreement or arrangement or any agreement involving rendering of any service by or payment of any amount to the Consultants.

g) Full payment by the Sellers and other debtors of PPIPC and other persons owing money to the Company of all loans and/or advances made by the Company to the Sellers and such other debtors, if any.

h) Proper recording of all of PPIPC's revenues and expenses with appropriate documentation as of Closing Date and payment of proper taxes, including withholding taxes for all 2015 and 2016 income payments which are subject to withholding tax under the applicable tax laws and revenue regulations.

i) Proper write-off of unrealizable assets, impairment of property, plant and equipment, and take up of accrued expenses and liabilities, if any, all in accordance with or as prescribed by the applicable Philippine Financial Reporting Standards (PFRS) as of Closing Date.

j) The Buyer shall have received from the Sellers the Closing Deliverables agreed as follows:

1. Deed of Absolute Sale of Shares executed by P-H-O-E-N-I-X Petroleum Philippines, Inc.absolutely and unconditionally selling, transferring and conveying Five Million Nine Hundred Ninety Nine Thousand Nine Hundred Eighty Nine(5,999,989) Shares to the Buyer, free and clear of any and all liens whatsoever.

2. Deed of Absolute Sale of Shares executed by Dennis A. Uy, Cherylyn C. Uy, Domingo T. Uy, Chryss Alfonsus V. Damuy, Romeo B. de Guzman, Socorro Ermac Cabreros, Alan Raymond T. Zorrilla, Joseph John L. Ong, Ignacia S. Braga IV, Ma. Henedina V. San Juan, Gigi Q. Fuensalida Ty absolutely and unconditionally selling, transferring and conveying each of their respective One (1) Share to the Buyer, free and clear of any and all liens whatsoever.

3. Stock Transfer Book of PPIPC, Stock Certificate Books containing unissued stock certificates and stubs of issued stock certificates.

4. Resignation letters signed by all the directors of PPIPC effective upon acceptance by the Board including Chairman, President, Treasurer, Corporate Secretary and other officers of PPIPC identified by the Buyer prior to Closing Date.

No change in Employer for all employees of PPIPC.
"Phoenix" brand name may be used for 1 year but not on IT-related transaction and system
Taxes arising from the sale of shares shall be for the account of the Sellers

Since the core business of PPIPC is different and independent from the core business of Phoenix, there is no material effect in terms of business and operation of Phoenix. On the matter of the financial condition of Phoenix, the disposition will relieve as it will free up the consolidated debt to equity ratio of the Company. Moreover, the proceeds will enable the Company to pay off its existing interest bearing debts and thus improve its financial statements.

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