Guidelines in Buying Shares/Proprietary Membership Certificates of Resorts and Country Clubs

March 11, 1977 GUIDELINES IN BUYING SHARES/PROPRIETARY MEMBERSHIP CERTIFICATES OF RESORTS AND COUNTRY CLUBS In order to be properly and reasonably assured that the shares/proprietary membership certificates being bought by a would-be investor-member of a resort and country club, are from fully legitimate and financially sound sources, the following guidelines are hereby suggested: 1) If the shares or proprietary membership certificates of the issuing corporation exceed 20 in number, the same should have been first registered with the Commission before being sold to the public, except when the same is exempted under its Rules on Registration and sale of proprietary rights, consisting of any of the following: * a) When the issuer corporation has fully constructed its golf courses, clubs, resorts, recreational or athletic facilities and is no longer raising funds from the public ; b) When the sales are made to less than twenty (20) persons; c) When the sales are made to persons who are clearly connected with the issuer corporation, such as sales to its employees as well as personnel of a sister or affiliated company who know the affairs of the issuer or sales under circumstances where prior registration of the proprietary rights is unnecessary to protect investors, such as private offerings to friends and/or persons who are in a position to know the projects of the issuer. Provided, however, that in either of these cases mentioned, no compensation, remuneration or commission is paid or given in connection with the offering of the proprietary right. * 2) The property of the issuer corporation being used as a golf course and club or any other facility should not be subject on sale and must be free from mortgage or similar encumbrance except with the consent of at least 2/3 of the subscribed capital stock . 3) All advertisement being made by the issuer corporation should have first been approved by the Commission to ascertain its factual basis. 4) The prices of said shares or proprietary membership certificates must have been approved by the Commission except when full development has been reached by the issuer corporation. 5) Work development should follow the work program and timetable submitted by the corporation to the Commission. 6) Full information on issuer corporation must first be obtained from the Commission. For the information and guidance of all concerned. (SGD.) ANGEL L. LIMJOCO Chairman