SURETY AGREEMENT

KNOW ALL MEN BY THESE PRESENTS:

This Surety Agreement is entered into by and between:

METRO CEBU COOPRENEURS SURETY FUND, a non-profit trust FUND duly registered
with the Bureau of Internal Revenue, with principal office at c/o NATCCO Network
Visayas, Geson Building, Jakosalem St., Cebu City, represented by its Chairman, Reynaldo
A. Gandionco, hereinafter referred to as the “SURETY”;

-and-

CEBU PEOPLES MULTI-PURPOSE COOPERATIVE., a cooperative duly organized under

Cooperative Code of the Philippines and registered with the Cooperative Development
Authority, with principal office at Pasil, Cebu City, represented by its Chief Executive
Officer, Macario G. Quevedo, hereinafter referred to as the “ENDORSER”;

-in favor of-

LAND BANK OF PHILIPPINES, a government financial institution organized and existing

pursuant to Republic Act 3844, as amended by Republic Act 7907 dated 23 February
1995, otherwise known as the Amended LBP Charter, with principal office at J. Quintos
St., Malate, Manila, Philippines, hereinafter referred to as the “CREDITOR BANK”

WITNESSETH: That

WHEREAS, JUAN DELA CRUZ (the “BORROWER), a member of the ENDORSER,

has obtained a loan with the CREDITOR BANK in the amount of PESOS: ONE MILLION
(P1,000,000.00) to be secured by this surety agreement;

WHEREAS, said loan is evidenced by a promissory note no. ____ dated ______,
executed by the BORROWER in favor of the CREDITOR BANK, payable upon
maturity/monthly installments with interest rate of ___________________ (__%) per
annum;

WHEREAS, the SURETY has made available to the BORROWER a credit

enhancement support to ensure that in the event of latter’s default, the CREDITOR BANK
will be able to promptly recover its credit exposure pertaining to the aforementioned
loan;

NOW, THEREFORE, for and in consideration of the foregoing premises and the
covenants contained herein, the SURETY (per Board Resolution No. 2013-___ dated __),
hereby guarantees and warrants to the CREDITOR BANK, its successors and/or assigns,
the payment of the loan granted to the BORROWER, as evidenced by a promissory note,

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instruments or documents executed by the BORROWER amounting to PESOS: ONE
MILLION ONLY (P1,000,000.00), subject to the following terms and conditions:

1. The CREDITOR BANK shall file a claim against the SURETY after the loan covered
by this Agreement has become past due and demandable.

2. The CREDITOR BANK shall assign to the SURETY, without recourse and without
any other conditions, all the CREDITOR BANK’S claims against the BORROWER
and to deliver all pertinent original documents and evidence of indebtedness,
including all promissory notes and agreements; checks issued by the
BORROWER; monthly statements of bank deposit; debit and credit memos;
communications to and from the BORROWER; and such other documents in the
possession of the CREDITOR BANK that the SURETY may need to enforce
collections of the debt;

3. Upon receipt of the claim of the CREDITOR BANK, together with the required
documents, on account of the past due loan, the SURETY shall exert its best
effort to effect payment of the outstanding unpaid principal loan balance within a
reasonable period of time, subject to the following limitations:

a) Eighty percent (80%) of the unpaid principal if the unpaid principal

amounts to more than seventy percent (70%) of the original loan; or

b) Ninety percent (90%) of the unpaid principal if the unpaid principal

amounts to more than forty percent (40%), but not exceeding seventy
percent (70%) of the original loan; or

c) One Hundred percent (100%) of the unpaid principal, if the unpaid

principal amounts to forty percent (40%) of the original loan, or less.

4. The ENDORSER that has endorsed the loan of the BORROWER shall be liable to
the SURETY for the total payments made by the latter to the CREDITOR BANK.

5. Accordingly, the ENDORSER shall collect the past due loan from the BORROWER
including principal, interest, penalties, foreclosure, litigation and other incidental
expenses.

6. The ENDORSER shall remit to the SURETY its collections on the defaulted loans
until such time the latter shall have recovered in full the amount of its exposure
on account of claims already paid.

7. Upon the failure of the ENDORSER to pay the SURETY on account of the past due
loan, the latter may also collect directly from the BORROWER including principal,
interest, penalties, foreclosure, litigation and other incidental expenses.

8. Any amount collected by the SURETY, after deducting collection and incidental
expenses, interest, penalties and other charges due, shall first be applied to the

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 amount paid by the SURETY, any excess shall be paid to the CREDITOR BANK
until it is able to recover fully its loan exposure;

9. The SURETY and the CREDITOR BANK hereby agree to inform each other from
time to time about the business operations and credit performance of the
BORROWER and to set up, for that purpose, a periodic monitoring mechanism to
ensure that appropriate risk mitigating measures are installed promptly;

10. This surety agreement shall not cover any extension, renewal or novation of the
loan in the nature of new, separate and additional loans without approval of the
SURETY.

IN WITNESS WHEREOF, the parties have hereunto set their hands on

this______day of____________________, at _____________________, Philippines.

ENDORSER SURETY

CEBU PEOPLES MULTI-PURPOSE METRO CEBU COOPRENEURS SURETY

COOPERATIVE FUND

By: By:

MACARIO G. QUEVEDO REYNALDO A. GANDIONCO

Chairman, Board of Directors Chairman, Oversight Committee

Signed in the presence of

__________________________ _______________________

ACKNOWLEDGMENT

Republic of the Philippines)

Cebu City ) S.S.

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 BEFORE ME, a Notary Public, for and in _________________, on this _____ day
of _____________________, personally appeared the following:

Name Community Tax Cert. Date Issued Place Issued

No./Tax Identification No.
Reynaldo A. Gandionco
Macario G. Quevedo

Known to me and to me known be the same persons who executed the foregoing
Agreement and acknowledged to me that the same is their free and voluntary act and
deed, and that they are duly authorized for the purpose.

This document consisting of Four (4) pages including this page whereon this
Acknowledgment is written, signed by the parties and their witnesses on each and every
page thereof and thereafter sealed with my notarial seal, refers to a Surety Agreement

WITNESS MY HAND AND SEAL on the date and place above-written.

NOTARY PUBLIC

Doc.No. ______
Page No. ______
Book No. ______
Series of ______