Waterfront Philippines, Inc.

October 19, 1999 PSE CIRCULAR FOR BROKERS NO. 2666-99 SUBJECT : Waterfront Philippines, Inc . Further to Circular for Brokers No. 2634-99 dated October 15, 1999 relative to Waterfront Philippines, Inc's ("WPI") acquisition/investment in Davao Insular Hotel Company ("Davao Insular") and Polar Peak Philippines, Inc. ("Polar Peak"), WPI furnished the Exchange copies of the following additional information: 1. Agreement (share-for-share swap) a) Copy of the Memorandum of Agreement executed between WPI and the Wellex Group, Inc. ("TWGI") owner of the shares in Davao Insular and Polar Peak which will be acquired by WPI. b) Please note that under the MOA, WPI will need to increase its authorized capital stock to be able to issue the WPI shares that will be exchanged with the shares in Davao Insular and Polar Peak being acquired by WPI. The increase in the authorized capital stock of WPI from P2.0 Billion to P5.0 Billion was approved by the shareholders during its meeting held on August 28, 1999, and the application papers to be filed with the Securities and Exchange Commission are in the process of being finalized. 2. Davao Insular a) Corporate Profile of Davao Insular, b) Audited Financial Statements of Davao Insular as of December 31, 1998; c) Proforma (unaudited) Financial Statements of Davao Insular as of September 30, 1999. The Proforma Financial Statements as of September 30, 1999 reflect the latest appraisal on the facilities at Davao Insular in the amount of P984.229 Million. prcd 3. Polar Peak a) Corporate Profile of Polar Peak; b) Audited Financial Statement of Polar Mines as of December 31, 1997; c) Please note that the audit on the Financial Statements of Polar Peak as of December 31, 1998 has not been completed. Certain items reflected in the 1997 Financial Statements and in the books of account, particularly the advances due to stockholder/officers, are subject to verification and validation by the external auditors designated by the new Management which took over this year. Various reports, including those to the SEC, for previous years have not been filed. The latest appraisal value of the fixed assets of the Polar Peak, which include some 77 hectares of land and the hotel building and equipment amounts to P1.366 Billion. LexLib Copies of the aforementioned documents are available for reference at the PSE Center and PSE Plaza Libraries. For your information. (SGD.) MA. ISABEL T. GARCIA OIC, Listing & Disclosure Group