RURAL ELECTRIFICATION FINANCING

CORPORATION

SUBSCRIPTION AGREEMENT

KNOW ALL MEN BY THESE PRESENT:

This AGREEMENT entered into this day of at , by and

Between:

ELECTRIC COOPERATIVE, INC. (herein called “Subscriber), represented by its President .

-and-

RURAL ELECTRIFICATION FINANCING CORPORATION (herein called “REFC”), represented byits Managing Director Wilfred L. Billena .

WITNESSETH:

WHEREAS, REFC was created to provide a broad based source of supplemental funding to electric cooperatives so they might achieve goals of providing electric service to additional consumers within each cooperative’s coverage area, ensure that electric service is adequate, dependable, and of high quality, and meet consumer satisfaction by contributing towards reasonably priced electricity;

WHEREAS, REFC is dedicated to providing high quality financial service;

WHEREAS, REFC is interested in providing loan funds to qualified Subscribers for qualified purposes upon such Subscriber being determined as meeting requirements to receive such loan funds in accordance with policies and procedures as prescribed from time to time by REFC, and;

WHEREAS, the Subscriber is willing and able to commit to purchase shares of common and/or preferred stock, and agrees to make payment for such shares of REFC for the purpose of being considered for availment of loans to be provided by REFC;

NOW THEREFORE, for and in consideration of covenants of the Parties and of terms and conditions hereinafter set forth, the Parties hereto agree as follows:

ARTICLE I: DEFINITIONS

Section 1.01 Whenever used in this Agreement, unless the context otherwise requires, the following terms shall have the following meaning:

“Agreement” shall mean this Subscription Agreement;

“Audited Financial Statements” shall mean financial statements of the Subscriber as audited by a duly qualified Certified Public Accountant of the Republic of the Philippines, such audit having been conducted in accordance with requirements promulgated by the National Electrification Administration;

“Loan Subscription” shall carry the meaning ascribed to in Article III, Section 3.02 of thisAgreement;

“Party”, or “Parties” shall mean REFC or Subscriber individually (Party), or collectively (Parties);

“Pesos” or the sign “PhP” shall mean the Currency of the Republic of the Philippines;

“Quarterly” shall mean three (3) consecutive months;

“Shares” shall mean evidence of ownership in Capital of REFC, each having a par value of OneThousand Pesos (PhP 1,000) per share;

“Subscribed Shares” shall mean Shares of REFC to be acquired by the Subscriber in accordance with this Agreement;

“Subscription” shall mean commitment by the Subscriber to acquire Shares in Capital of REFC in accordance with this Agreement;

“Subscription Price” shall carry the meaning ascribed to in Article III, Section 3.01 of thisAgreement.

ARTICLE II: SUBSCRIPTION REQUIREMENT

Section 2.01 Subscription Procedure and Requirements

The Subscriber shall obtain a resolution from its Board of Directors authorizing its subscription to the shares of REFC, execution of this Agreement, complete the appropriate information, and affix appropriate signature/s of authorized signatories. A copy of the Board Resolution authorizing the execution of this Agreement shall accompany this Agreement.

Section 2.02 Acceptance by REFC

This Agreement shall be deemed to have been accepted and approved by REFC upon REFC’s execution of this Agreement. All subscription rights and obligations of the Parties shall commence upon due execution of this Agreement by REFC and the Subscriber;

ARTICLE III SUBSCRIPTION

Section 3.01 Initial Subscription (herein called “Initial Subscription”)

Subscriber hereby subscribes to Shares in REFC at One Thousand Pesos per share. Full payment of the subscription liability due on account of this Initial Subscription may be made upon execution of this Agreement, or over a four-year period as follows: a) not less than ten percent (10%) of the total amount of the subscription liability on account of the Initial Subscription within ten (10) working days from date of REFC’s execution on this Agreement, and: b) the remainder of the unpaid subscription liability over a period of fifteen (15) equal quarterly installments as shown in the attached Schedule (Attachment I). Subscriber, however, may prepay its subscription liabilities earlier than the scheduled payments.

Additional Provision for Initial Subscription

a.) Initial Subscription is not contingent upon Subscriber becoming qualified for loans from REFCor actually receiving any loans therefrom;

b.) Subscriber must make payments in accordance with Attachment I without need of call/demand for payment and the shares covered by the Initial Subscription should not be declared delinquent in order to exercise full voting rights over the same.

c.) In the event, the Subscriber fails to make any subsequent payments in accordance with the

Loan and/or Mortgage Agreement/s with REFC, regardless of the amount of its retained limited ownership over the shares of REFC;

d.) In the event Subscriber decides not to continue with its ownership in REFC’s equity, Subscriber may, but subject to the provisions of paragraph (e) hereof, sell/convey its Subscription rights and obligations to another entity qualified to be a holder/owner of Capital/equity of REFC of the same class of shares and shall be relieved of any further obligation under this Agreement, provided it does not violate or contravene any corporate restrictions on ownership and disposal of shares;

e.) Subscriber agrees it will retain ownership of shares subscribed under this Initial Subscription for a period extending at least three (3) years beyond final principal payment of its loan obligations to REFC. After this three (3) year period, these shares may be sold/conveyed to another entity qualified to be a holder/owner of Capital/equity of REFC in accordance with REFC Board prescribed policies on Capital ownership and disposal;

Section 3.02. Commitment to Subscribe

The Subscriber hereby firmly commits to subscribe to, and pay in full such additional shares in REFC which is equivalent to a percentage of the loans which it shall obtain from REFC. Such percentage of the additional shares to be subscribed (the “Loan Subscription”) is initially set at five percent (5%) of the total loan amount as may be granted by REFC subject to REFC’s right to change said percentage. The Subscriber is not obliged to obtain loans from REFC nor to pay for its subscription liabilities under this Commitment to Subscribe until both parties have agreed and executed both the loan agreement/s covering the loans to be granted to the Subscriber and the Subscription Agreement to be executed pursuant to the terms of this Section 3.02. Payments by the Subscriber of its subscription liabilities on account of this Loan Subscription, shall be made automatically to REFC as deductions from the initial loan proceeds made to the Subscriber by REFC and the Subscriber hereby gives REFC the authority to retain such amounts from said initial loan proceeds as may be necessary to fully pay for its obligations on account of the Loan Subscription.

Section 3.03 Acceptance and Issuance of Shares

Acceptance and issuance of Shares shall be governed as follows:

• Shares of REFC evidencing the Initial Subscription shall only be issued to the Subscriber after all payments due on the Initial Subscription is received by REFC;

• Shares purchased as a part of the Loan Subscription shall only be issued to the Subscriber after all payments on account of said Loan Subscription received by REFC;

• Issuance and delivery of Shares to the Subscriber shall be contingent upon approval by the Securities and Exchange Commission of the exemption of Subscribed Shares from the registration requirements of the Securities Regulation Code.

Section 3.04 Form of Shares Issued by REFC

Shares issued on account of the Initial Subscription and the Loan Subscription shall be Common shares until all Common shares authorized by the Articles of Incorporation are issued. After all Common shares are issued, subsequent shares issued shall be Preferred shares.

Section 3.05 Right to Acquire Additional Shares of REFC

This Agreement does not in any way limit the ability of the Subscriber to acquire additional Shares of REFC in accordance with the By-Laws and policies of REFC.

Section 3.06 Failure to Obtain or Receive Loans

Failure of Subscriber to obtain or receive loans from REFC will not affect in any way its obligations for the payment of subscription liability in respect of the Initial Subscription under this Agreement.

Section 3.07 Payment of Subscription Obligations

Article IV: MISCELLANEOUS

Section 4.01 Notices

Any notice or request required or permitted to be given or made under this Agreement to either Party hereto shall be in writing. Such notice or request shall have been deemed to have been duly given or made when it shall have been delivered by hand, airmail, telex, or facsimile to the Party to which it is addressed at such Party’s address specified below or at such other address as such Party shall have designated by notice to the Party giving such notice or making such request.

For the Subscriber: Attention:

Address:

Facsimile:

For REFC: Attention: Mr. Wilfred L. Billena

Address: Suite 401/402 OMM – Citra Bldg.

No. 39 San Miguel Avenue, Ortigas CenterPasig City

Facsimile: (02) 637-3664 / (02) 687-1975

Section 4.02 No delay in exercising, or omission to exercise, any right, power or privilege under this Agreement shall operate as a waiver thereof, nor shall any single or partial exercise of any right, power or privilege limit any further exercise thereof, or the exercise or another right, power or privilege;

Section 4.03 This Agreement, contains the entire agreement between the Subscriber and REFC concerning the term and conditions of any subscription of shares by the Subscriber. No amendment or modification of this Agreement shall be effective unless duly set forth in writing executed by duly authorized representatives of the Parties;

Section 4.04 This Agreement shall be governed by, and construed in accordance with the laws of theRepublic of the Philippines.

IN WITNESS WHEREOF, the Parties hereto, acting through their representatives duly authorized, have caused this Agreement to be signed in their respective names and to be delivered as of the day and year first above written.

ELECTRIC COOPERATIVE, INC.

By: President( Printed Name) (Title)

(Signature) (Date)RURAL ELECTRIFICATION FINANCING CORPORATION

By: WILFRED L. BILLENA _Managing Director_(Printed Name) (Title)

(Signature) (Date)

ACKNOWLEDGMENT

REPUBLIC OF THE PHILIPPINES) )S.S.

BEFORE ME, this Philippines, personally appeared:

day of 20 in the City of ,

Names CTC/Passport Numbers Date/Place of Issue

Electric Cooperative, Inc.

By:

Rural Electrification Financing Corporation

By:

all known to me and to me known to be the same persons who executed the foregoing Subscription Agreement consisting of pages including the page in which this Acknowledgment is written and they acknowledged to me that the same is their free and voluntary act and deed as well as that of the entities which they respectively represent.

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

Doc. No. Page No. Book No.Series of 20 .

Attachment I

Subscription Agreement - Schedule of Payments

Due Date Amount

(To be Completed by REFC)