1. Tentative Offer from SEEDFINANCE Corporation

2. Section 1 - describes briefly SEEDFINANCE Corporation Section 2 - describes briefly the key points of our tentative offer Section 3 - describes the various benefits

3. Section 1 describes briefly SEEDFINANCE Corporation

4. The SEEDFINANCE Corporation is registered with the SEC, with authorized capital of PhP 120 million, registered as a financing company. Our paid-up capital is now nearly 80 million pesos. Increase our authorized capital stock from 120 million pesos to 900 million pesosWe have partnered with PNB Capital to help raise equity and debt capital for us, and there are on-going negotiations now where new investors to come in The SEEDFINANCE Corporation is registered with the SEC, with authorized capital of PhP 120 million, registered as a financing company. Our paid-up capital is now nearly 80 million pesos. Increase our authorized capital stock from 120 million pesos to 900 million pesosWe have partnered with PNB Capital to help raise equity and debt capital for us, and there are on-going negotiations now where new investors to come in

5. Our social mission: To build capacities of local rural microfinance organizations, including cooperatives, so they can deliver appropriate and affordable financial and non-financial services to poor and low-income households.

6. We are owned 60% by CARE USA, and co- owned 40% by SEAD Inc (a microfinance NGO) and a number of partner cooperatives and microfinance organizations. Many of CBL shareholders are also network members and shareholders of our Company.We have a 9-man Board of Directors and a 5-man Executive Committee. We are owned 60% by CARE USA, and co- owned 40% by SEAD Inc (a microfinance NGO) and a number of partner cooperatives and microfinance organizations. Many of CBL shareholders are also network members and shareholders of our Company.We have a 9-man Board of Directors and a 5-man Executive Committee.

7. Computerized accounting systemOur Company is led by a President /CEO who also leads a Senior Management Team comprising of 4 top managersPartners with 78 Partner Financial Institutions (PFIs), consisting mostly of primary cooperatives. CBL is one of our pioneer partners since 2002. The number of PFIs is expected to reach 100 within the next 2 or 3 ears.Computerized accounting systemOur Company is led by a President /CEO who also leads a Senior Management Team comprising of 4 top managersPartners with 78 Partner Financial Institutions (PFIs), consisting mostly of primary cooperatives. CBL is one of our pioneer partners since 2002. The number of PFIs is expected to reach 100 within the next 2 or 3 ears.

8. Our Company was established by CARE Philippines in 1993 as a microfinance project. We provide training, technical assistance and loans to small and medium size Microfinance Institutions (MFIs) in the country. We have a solid track record of building the institutional capacities of partner MFIs.Our Company was established by CARE Philippines in 1993 as a microfinance project. We provide training, technical assistance and loans to small and medium size Microfinance Institutions (MFIs) in the country. We have a solid track record of building the institutional capacities of partner MFIs.

9. We are essentially a wholesale microfinance financing companyThe network of partners are the customer base of the Company and also serve as the channel to deliver or sell microfinance productsThrough this network of PFIs, this company is reaching out to 1.2 million microfinance end-clientsWe are essentially a wholesale microfinance financing companyThe network of partners are the customer base of the Company and also serve as the channel to deliver or sell microfinance productsThrough this network of PFIs, this company is reaching out to 1.2 million microfinance end-clients

10. Various products and services: loans of various types and purposes, training and consulting services, project management services, technical assistance services, etc.Income streams: (2) interest incomes on loans, (2) consultation and training fees, (3) small grants from donors for special projects.Various products and services: loans of various types and purposes, training and consulting services, project management services, technical assistance services, etc.Income streams: (2) interest incomes on loans, (2) consultation and training fees, (3) small grants from donors for special projects.

11. Our new income streams: (1) commissions on the sale of airtime (SMART Telecom), (2) share in the remittance fees earned by mobile banking units – SMART Money, (3) share in the installation of ATM machines and hosted core banking systems in PFIs, (4) share in ATM transaction fees.The major foreign creditors are: MicroVest (USA), Oikocredit (Netherlands), DWM (USA), SNS (Netherlands), PlaNIS (France), ResponsAbility (Switzerland), CARE USA and Symbiotics (USA). The major local creditors are: BPI, BPI-Globe Banko, and Small Business Corporation.Our new income streams: (1) commissions on the sale of airtime (SMART Telecom), (2) share in the remittance fees earned by mobile banking units – SMART Money, (3) share in the installation of ATM machines and hosted core banking systems in PFIs, (4) share in ATM transaction fees.The major foreign creditors are: MicroVest (USA), Oikocredit (Netherlands), DWM (USA), SNS (Netherlands), PlaNIS (France), ResponsAbility (Switzerland), CARE USA and Symbiotics (USA). The major local creditors are: BPI, BPI-Globe Banko, and Small Business Corporation.

12. There are on-going negotiations with ACCION International, Elevar Equity, and Land Bank of the Philippines. We also receive some grants from PCFC for capacity development of selected PFIs. Microvest, ACCION International and other international investors are interested in supporting this bank acquisition project, if it will result to helping hundreds of cooperatives and millions of poor people.

13. Our total assets = 530 million pesos; will reach 800 million pesos by Dec-2011 Total capital = 80 million pesos Capital will increase to 290 million by year-end Net-Profit Profit before-tax = PhP 6.4 millionROE = 9.4 %Capital Adequacy Ratio = 22%Portfolio at Risk = 2.6%

14. Our social mission: To build capacities of local rural microfinance organizations, including cooperatives, so they can deliver appropriate and affordable financial and non-financial services to poor and low-income households.

15. Section 2 describes briefly our tentative offer

16. The current dire situation of the bank: 1)The deteriorating financial condition of CBL has put the Bank in BSPs Prompt Corrective Action (PCA). If there is no additional equity capital, that may mean the failure of the PCA, the eventual collapse of the bank, and the BSP shall be forced to shut it down. 2)CBL lacks qualified and aggressive management team 3)CBL needs to reorganize to strengthen operations; 4)Management needs creativity in developing strategies to be more competitive;

17. Real situation: 5) Personnel lacks the appropriate training in their respective areas of operation 6)Majority of the personnel are close to their retirement stage having worked with the Bank for more than 15 years; 7)Reporting (particularly to the Board) and monitoring system is deficient despite the existence of policies;

18. Real situation: 8) Management lacks review of credit policies particularly on collateral free loans 9)Shareholders up to the present time do not receive dividends; shareholders are concerned on the protection of their investments; 10)There is a need to look for a market niche; new products need to be designed to complement the products of the primary coops

19. Real situation: 11)There are serious weaknesses in the banks organizational structure, manpower complement and the systems and procedures operating within the bank. 12)CAMELS composite rating is 2 which means that CBL has serious financial and managerial deficiencies resulting into unsatisfactory performance.

20. Real situation: 13)The bank recorded net operating losses during the four years under review. In year-end 2010, net income booked was P132K. Ratio of net income to total assets (ROA) was a low 0.3% vis-à-vis the industrys 2%. Likewise, ratio of net income to capital (ROI) of 2.4% was lower than the industrys 11.6%.

21. Real situation: 14) Paid –up capital of P11M was impaired due to the P6M deficit in retained earnings. 15)Past due loans continuously increased from P6M in 2007 to P10.9M in 2010. 16) Past due ratio of 29.7% in 2010, which is 3 times higher than the industrys 9%.

22. Real situation: Given the above condition, CBL has to improve its management, systems, products, and its collection efforts to reduce the Banks High Past Due Rate, which is the main cause of the banks deteriorating financial condition. CBL likewise needs to come up with strategies, formulate and implement a business improvement plan to enable the Bank to entice more depositors and/or investors to increase the capitalization of the bank.

23. Real situation: If the BSP shut down CBL Many people and institutions will lose: All the depositors The Shareholder primary coops SEEDFINANCE will be affected too All preferred shareholders All creditors The BOD members

24. Our tentative offer is for a SPECIAL PARTNERSHIP arrangement that can be summarized in three words Rescue Develop Upgrade

25. Phase 1 - Rescue The objective of this Phase is to prevent the possibility of the BSP closing down the bank due to negative equity and due to poor management.

26. Phase 1 - Rescue 1)Investment into Preferred Shares: With the approval of the BSP and the shareholders of CBL, SEEDFINANCE will be allowed to convert 8.5 million pesos of its loans to CBL into equity, through CBL issuance of Preferred Shares Series __. 2)Board representative: The shareholders shall allow one representative from our Company to sit as a non-voting representative to your Board of Directors, to provide management and governance advice to your bank.

27. Phase 1 - Rescue 3)Pro-bono Consultant: CBL shall appoint SEEDFINANCE as a management consultant, on pro-bono basis. This makes our management advice and services essentially FREE to the bank. 4)MOU: Signing up a MOU describing the key basic management changes and improvements that will have to be made, which will include some steps to improve collections and internal systems. The MOU will also contain the key steps under Phases 1, 2 and 3.

28. Phase 2 – Develop The objectives of this Phase are (a) to develop the deposit-taking and lending business of the bank, so that it will become a profitable small bank, and (b) to exit the PCA program of the BSP.

29. Phase 2 – Develop 5)Additional Capital Infusion: SEEDFINANCE will infuse new additional capital to finance the growth of CBLs loan portfolio; additional 30 to 50 million pesos. The loan portfolio of CBL must be increased to generate sufficient revenues

30. Phase 2 – Develop 6) Develop New Products and Services: We shall improve the deposit-taking products and loans of the bank to make them attractive to primary cooperatives and local people. 7)Install Better Marketing Systems and linkages: Intensify the promotions of banks services to the local community and other cooperatives in other places. We shall develop linkages with partner cooperatives, so we can sell through our partners.

31. Phase 2 – Develop 8)Negotiations on conditional sale of shares, with individual shareholders of the bank, to have conditional purchase agreements. This is necessary incentive to SEEDFINANCE 9)Exit PCA: we shall convince BSP to lift PCA

32. Section 3 The objective of this Phase is: (a) to gather new and bigger shareholders and investors who will put more money into the bank, and (b) to convert CBL into a Thrift Bank

33. Phase 3 – Upgrade Develop a new Business Plan: Together with you and all shareholders of the bank, we shall agree to become a bigger bank in the future, and develop a new Business Plan which will guide us through the growth process. To serve more cooperatives and millions of poor and low-income Filipinos, we shall aim to become a big microfinance-oriented development bank in the future.

34. Phase 3 – Upgrade Gather a Group of Shareholders: SEEDFINANCE shall gather interested investors and stakeholders who are willing to invest substantial money into the bank. Besides SEEDFINANCE itself, potential investors will be invited, such as, are: Philippine National Bank, ACCION International, CLIMBS, Asia United Bank, Small Business Corporation, several international investors, various big primary cooperatives in the industry, etc. The existing shareholders of CBL can still remain as shareholders of this bank albeit their shareholdings will be diluted unless they invest more money into the bank.

35. Phase 3 – Upgrade Convert CBL into a Thrift Bank: We shall ask the BSP to convert the status of the bank into a Thrift Bank, specifically into a Development Bank. The minimum requirement now to have a Thrift Bank status is 250 million pesos, so we shall be required by the BSP to show our proposed shareholders. We shall show BSP the group of old and new investors who are willing to put in a total of 250 million pesos as fresh equity capital into this bank.

36. Disclosure: This offer is tentative and exploratory. This is not yet formally approved by our BOD and shareholders

37. Section 3 describes briefly the various benefits

38. Benefits: a)Saving the bank will mean protecting the deposits of the depositors: b)Saving the bank will mean saving our investments c)Wide linkages with primary cooperatives and banks: SEEDFINANCE has 78 partner cooperatives, rural banks and microfinance NGO across the whole country, and we can link CBL to many of these cooperatives.

39. Benefits: d)New technologies. SEEDFINANCE can bring new technology through its partnership with SMART telecom, ENCASH ATM and other resource agencies e)Better internal governance. f)Will allow SEEDFINANCE to offer more financial services g)Will benefit hundreds of primary cooperatives and millions of poor people: our country. Benefits: d)New technologies. SEEDFINANCE can bring new technology through its partnership with SMART telecom, ENCASH ATM and other resource agencies e)Better internal governance. f)Will allow SEEDFINANCE to offer more financial services g)Will benefit hundreds of primary cooperatives and millions of poor people: our country.

40. Thanks for listening and considering this proposal