PSE Circular for Brokers No. 2535-99

October 6, 1999 PSE CIRCULAR FOR BROKERS NO. 2535-99 October 5, 1999 PHILIPPINE STOCK EXCHANGE, INC . 4th Floor, Philippine Stock Exchange Center Pasig City Attention: Ms . Grace B . de Guia Assistant Manager Disclosure Department Gentlemen: Yesterday, the Philippine Amusement and Gaming Corporation ("PAGCOR") issued a press release regarding MIMOSA's Regency Casino, which has appeared in the newspapers today. We hereby advise the Philippine Stock Exchange that this information is totally erroneous. PAGCOR cannot prevent our casino from operating in exactly the same way be casino was open from April 1998 until December 14, 1998 when it was closed by Clark Development Corporation ("CDC"), not PAGCOR, because of a rental dispute, which ended with a Compromise Agreement with CDC and the Office of the President. This Compromise Agreement precisely provides for the re-opening of the casino. This has resulted in Mondragon's offering to the Office of be President to open the casino and pay the government what is owed, from the total net proceeds. The Company's financial creditors due to the closure of the casino plus PAGCOR's self-defeating statements to prospective investors about the validity of Mimosa's permit have thus far made it extremely difficult for Mondragon to raise the P325 million for CDC that will enable the casino to operate once more with or without PAGCOR's agreement. Finally, PAGCOR talks about amounts due to it under our existing permit to operate, Mondragon has never denied this but points out we consistently monthly attempted to pay PAGCOR the amounts from April until December 1998 while our casino remained opened and PAGCOR strangely refused to accept payment even if money due to the government was offered (when the company had the money prior to the closure) It is unfortunate that PAGCOR has ignored the court's decision regarding the validity of Mondragon's permit to operate. One would think that the gaming regulatory body would be the first to uphold judicial decisions. The Court of Appeals has twice denied PAGCOR's intention that PAGCOR has legitimately canceled Mondragon's authority. Its continued defiance. however, established its attitude as believing they are above the law What a sad turn of events, but consistent with its pronouncements of stubbornly believing it is beyond constitutionally established principles. The Company now has no choice but to seek judicial relief to cite PAGCOR and Alice Reyes in contempt of court. Very truly yours, (SGD.) JOSE ANTONIO U. GONZALES Chairman and CEO