PSE Circular for Brokers No. 2414-98

October 21, 1998 PSE CIRCULAR FOR BROKERS NO. 2414-98 October 19, 1998 SECURITIES AND EXCHANGE COMMISSION SEC Building, EDSA City of Mandaluyong Attention: Director Linda Daoang Money Market Operations Department Gentlemen : We advise that a Complaint for Fraud and Rescission has been filed on behalf of Messrs. Joseph Jackson and James L. Burns (Plaintiffs) against MUSIC Semiconductors, ProTelcon, Inc., Michael Bridges, Bart Van Hedel, Stephen Stas, James Brian and Michael Burton (Defendants), in the Superior Court of the State of California, County of Los Angeles (Case No. BC195228) on 31 July 1998, receipt of Summons having been received by our US office only in 14 October 1998. This is the third suit involving the same parties since 1995, all of which relate to corporate actions within ProTelCon. The first suit filed by MUSIC and ProTelCon in 1995 was an arbitration proceeding before the American Arbitration Association in Los Angeles, California seeking injunctive and monetary relief against Mr. Jackson, former CEO of ProTelCon for his actions following his termination, in which proceeding Plaintiffs herein filed a counter-claim alleging wrongful termination and fraudulent inducement to enter the Securities Purchase Agreement ( Disclosed in the Registration Statement filed prior to MUSIC Corporation's Initial Public Offering ). This arbitration proceeding was terminated in 26 October 1995 and resolved in favor of MUSIC and ProTelCon. LLjur The second suit filed in 1997 was a civil action for declaratory relief with the Superior Court of New Jersey, Warren County (Docket No. L-58-97) seeking an order permanently enjoining defendants from turning over assets pledged to defendants in connection with two (2) loans granted by MUSIC to Protelcon and secured by assets of Protelcon, including patent rights over the Telecommander. In this latter suit Defendants have been awarded costs incurred for the litigation of the case which had earlier been dismissed by the lower court. ( Please see disclosure dated 14 April 1997 for details ) It is our counsels preliminary opinion that the factual basis for this most recent complaint is the same as the factual basis averred in the said previous cases which have both been resolved in favor of the Defendants, with recovery of costs. This recent California action is therefore viewed to be completely frivolous and without merit. aisadc If you should have any questions please call us. Yours truly, (SGD.) MITOS TANTUICO-ZSHORNACK VP for Corporate Affairs