PSE Circular for Brokers No. 2746-98

December 11, 1998 PSE CIRCULAR FOR BROKERS NO. 2746-98 December 10, 1998 MS. LUISA BUENAVENTURA Supervisor, Disclosure Dept. Philippine Stock Exchange, Inc. Ortigas Center, Pasig City Dear Ms. Buenaventura : We write to update you on the matter of Clark Development Corporation's (CDC) threat to terminate the lease agreement with Mondragon for the Mimosa Leisure Estate, which was discussed in our previous disclosure to you on November 18, 1998. Today, December 10, 1998, Mondragon obtained a Temporary Restraining Order (TRO) from the Regional Trial Court, 3rd Judicial Region in Angeles City, enjoining CDC from terminating the lease agreement and from taking over the Mimosa Leisure Estate. This legal procedure was necessary in order to protect Mondragon's interest and to assure that the CDC is not able to implement their termination threat, which was contrary to the provision of the lease agreement providing for specific dispute settlement procedures. These procedures require that a panel comprised of two representatives from Mondragon and two representatives from CDC to convene and attempt to resolve the issues. If after thirty days they are not able to resolve the issues, the lease agreement calls for arbitration as provided for in Republic Act No. 876. We continue to seek a mutually satisfactory settlement of the issues with CDC. As always, we will attempt to achieve a solution in good faith. We will update you as new developments arise. Sincerely, (SGD.) FAUSTINO S. ROBERTO President & COO