PSE Circular for Brokers No. 579-98

April 2, 1998 PSE CIRCULAR FOR BROKERS NO. 579-98 April 1, 1998 PHILIPPINE STOCK EXCHANGE, INC. PSE Centre, Exchange Road Ortigas Center, Pasig City Attention : Ms . Ma . Isabel T . Garcia Head, Listing Department Gentlemen : In spite of the matter being sub judice, PAGCOR has issued a cease and desist order dated March 27, 1998, on the Mimosa Regency Casino. The casino is being operated by Mimosa Leisure and Resorts Corporation, a wholly-owned subsidiary of Mondragon International Phils. Inc. LibLex This morning PAGCOR served the order and attempted to close the casino. We have, however, also today secured a temporary restraining order from the Regional Trial Court of Angeles City, so the casino remains open. It may be remembered that PAGCOR attempted to close our casino on January 6, 1997 but were unsuccessful. President Ramos upon the recommendation of Former Secretary of Trade and Industry Roy Navarro formed an Oversight Committee to determine if Mondragon had really violated its contract, as PAGCOR alleged. This committee concluded unanimously (including PAGCOR's nominee), that Mondragon had not violated on the basis of what PAGCOR presented to them. Just recently the Clark Development Corporation's position on the tax issue with Mondragon was also overturned by a three-man panel appointed to review this case. In its contract with Mondragon, PAGCOR is required to submit disputes to arbitration. They however have refused to abide by this and so Mondragon filed suit to compel them to do so. Another objective of the suit is to stop PAGCOR from doing precisely what they attempted to do this morning. In any case, the casino is opened and I have committed to our customers that it will remain open while the courts hear the case. The hearing on the preliminary injunction sought by Mimosa is set for April 3, 1998. In the first quarter just completed, Mondragon has earned over P150 million from casino operations and estimates a sizable improvement over last year. LLpr Sincerely, (SGD.) JOSE ANTONIO U. GONZALES Chairman and CEO