MICRO DISTRIBUTION AGREEMENT

(Grocery)

KNOW ALL MEN BY THESE PRESENTS:

This Micro-Distribution Agreement, which is made and entered into by and between:

__________________________, a domestic corporation duly organized

and existing under and by virtue of the laws of the Philippines, with
principal place of business at ____________________ and represented
herein by its _______________________,
_________________________, hereinafter referred to as
"DISTRIBUTOR";

- and -

__________________________, Filipino, of legal age, with place of

business at _____________________________, hereinafter referred to as
the "MICRO DISTRIBUTOR".

WITNESSETH: That -

WHEREAS, DISTRIBUTOR is a distributor of NESTLÉ grocery products (the “Products”)

within the area of _____________________________;

WHEREAS, DISTRIBUTOR intends to appoint a sub-distributor for the said Products for
the outlets and territories as defined herein;

WHEREAS, MICRO DISTRIBUTOR represents and warrants that he/she has the necessary
resources, tool, manpower, knowledge and expertise to be a MICRO DISTRIBUTOR, and hence,
desires to be a micro distributor of the Products;

NOW, THEREFORE, the parties hereby agree as follows:

1. Appointment as Micro Distributor - DISTRIBUTOR hereby appoints MICRO

DISTRIBUTOR as sub-distributor of the Products for the areas and/or outlets described in
Annex A, which is attached hereto and made part of this Agreement (hereinafter referred to as
the “Territory”). DISTRIBUTOR may appoint other sub-distributors for the same Territory,
but MICRO DISTRIBUTOR may distribute the Products only, and no other goods, inside or
outside the Territory.

By virtue of such appointment, DISTRIBUTOR shall sell the Products to MICRO

DISTRIBUTOR which shall re-sell the same to the areas and/or outlets described in Annex A
 within the Territory. DISTRIBUTOR may re-apportion the Territory of the MICRO
DISTRIBUTOR according to its discretion. Outlets may be added to or removed from the
territory of MICRO DISTRIBUTOR at the discretion of, and upon written notice by
DISTRIBUTOR.

2. Prices and Payment - DISTRIBUTOR shall sell the Products to MICRO DISTRIBUTOR at
FOB price less the corresponding MICRO DISTRIBUTOR’s discount indicated in Annex
“___”. .MICRO DISTRIBUTOR shall extend a 4% mark-up from FOB to its resale prices
to the outlets. Under no circumstances shall MICRO DISTRIBUTOR bring down his/her
selling price of +4% from FOB. Any violation hereof shall be considered a material breach of
this Agreement and shall be a valid ground for the termination of this Agreement.

The discount rate shall be subject to change at any time at DISTRIBUTOR’s discretion.
MICRO DISTRIBUTOR shall pay for the Products in cash upon delivery. If DISTRIBUTOR
opts for a 3 day term, then MICRO DISTRIBUTOR shall provide a cash bond in an amount
equivalent to the exposure of DISTRIBUTOR.

3. Key Performance Indicators - MICRO DISTRIBUTOR shall adhere to the Key

Performance Indicators herewith attached as Annex “_____”

4. Exclusive Sourcing of Products - MICRO DISTRIBUTOR shall sell the Products obtained
exclusively from DISTRIBUTOR and not from any other source.

5. Vehicles – DISTRIBUTOR shall grant to MICRO DISTRIBUTOR the use of motorbike/s

with sidecar (the “Vehicle/s”) under a free-on-loan agreement to be executed separately by
the parties. The said Vehicles shall be used exclusively by MICRO DISTRIBUTOR for the
selling of the Products. DISTRIBUTOR may at anytime pull-out the said Vehicle/s.

6. If MICRO DISTRIBUTOR consistently achieves the monthly KPI’s set by DISTRIBUTOR,

DISTRIBUTOR may provide other incentives to MICRO DISTRIBUTOR at the sole option
of DISTRIBUTOR.

7. Non-Infringement of Intellectual Property - MICRO DISTRIBUTOR shall respect all

intellectual property owned by the Products’ trademark owners, which shall include, but not
be limited to, patents, trademarks and copyrights. Consequently, MICRO DISTRIBUTOR
shall not make use of any such intellectual property in the conduct of its business, nor for any
other purpose, even after the termination of this Agreement. However, MICRO
DISTRIBUTOR has the right to represent to any third person that it is a duly authorized
micro-distributor of the DISTRIBUTOR with respect to the Products.

8. Cooperation in the Development of the Business - MICRO DISTRIBUTOR shall help

promote the Products in the Territory by all legitimate means including regular and
frequent visits to the outlets within the Territory and coverage of potential outlets, as well
as full cooperation with DISTRIBUTOR in promotional and merchandising efforts to
improve sales to and service of customers, in addition to achieving the targets and
standards agreed upon by the parties hereto.

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9. Liability to Third Parties - MICRO DISTRIBUTOR shall at all times take necessary
precautions and exercise due care and diligence in the execution of its undertakings under
this Agreement so as not to cause injury, damage or losses to persons and property. Any
damage, loss, accident, or injury to any person and their properties or any claim or liability
consequent to MICRO DISTRIBUTOR’s performance of the work or operation of the
Vehicles under this agreement shall be shouldered exclusively by MICRO DISTRIBUTOR
who shall hold DISTRIBUTOR free and harmless from any action or causes of action.

10. Confidentiality Clause - MICRO DISTRIBUTOR shall keep confidential all marketing plans
and other information regarding the operations of DISTRIBUTOR and/or the manufacturer
or importer of the Products.

11. Non-Employment Clause - This Agreement shall not create any employer – employee or
principal – agent relationship between DISTRIBUTOR and MICRO DISTRIBUTOR on one
hand, nor between MICRO DISTRIBUTOR and the manufacturer/importer of the Products,
on the other hand.

12. Non-Assignability - This Agreement constitutes a personal contract between

DISTRIBUTOR and MICRO DISTRIBUTOR and MICRO DISTRIBUTOR shall not
transfer, assign or endorse the same or any part thereof without obtaining the prior written
consent of DISTRIBUTOR. Violation of this provision shall constitute a ground for the
immediate termination of this Agreement, without prejudice to MICRO DISTRIBUTOR’S
criminal liability as may be warranted by evidence.

13. Effectivity and Duration - This Agreement shall take effect on _________ until
_____________, subject to renewal upon agreement by the parties. DISTRIBUTOR may
terminate this Agreement for any reason whatsoever, upon fifteen (15) days’ written notice to
MICRO DISTRIBUTOR.

Notwithstanding the above, this Agreement shall at all times be co-terminus with the
DISTRIBUTOR’s distributorship agreement with Nestle Philippines, Inc. (NPI) which is the
manufacturer and/or distributor of the Products. Accordingly, in the event that
DISTRIBUTOR’s own distributorship agreement with NPI is terminated for any reason
whatsoever, this Agreement shall automatically be considered as terminated.

14. Termination under Certain Circumstances - Notwithstanding the provisions of the

immediately foregoing paragraph, DISTRIBUTOR shall be entitled by written notice to
terminate this Agreement with immediate effect should MICRO DISTRIBUTOR cease its
activities as contemplated in this Agreement, or breach the provisions of this Agreement.

15. Severability - Should any provision or portion of this Agreement be declared illegal or void by
any future legislation or duly constituted authority, the other provisions or portions not so
declared shall remain in full force and effect, without either party becoming liable to the other
therefore.

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16. Venue - Any suit or proceeding arising out of or relating to the terms and conditions of this
Agreement shall be brought before the proper courts of _______ (city/municipality where
DISTRIBUTOR conducts business), to the exclusion of all other venues.

IN WITNESS WHEREOF, the parties hereto have hereunto signed this Agreement on this
_____ day of ____________________ 2009 at ____________________________.

___________________________
Distributor Micro Distributor

By:

______________________________ ____________________________
_____________________ ______________________

Signed in the presence of:

ACKNOWLEDGMENT

REPULIC OF THE PHILIPPINES)

______________ ) S.S.

BEFORE ME, a Notary Public for and in ____________, personally appeared

__________________, with Comm. Tax Certificate No. _________ issued on ____________ at
_____________, in his capacity as ________________ of ________________________, with
Comm. Tax Certificate No. ___________ issued on ____________ at _____________________;
and _________________________, with Community Tax Certificate No. ___________ issued on
______________ at _____________, known to me and to me known to be the same persons who
executed the foregoing instrument and acknowledged to me that the same is their own free and
voluntary act and deed as well as that of the company represented.

This instrument refers to a Micro Distribution Agreement consisting of _________ (____)

pages, including that on which this acknowledgment is written, each and every page signed by the
parties and their instrumental witnesses.

WITNESS my hand and seal on this ___ day of __________________ 2008 at Makati City.

Doc. No. ______;

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Page No. ______;
Book No. ______;
Series of 2009

ANNEX “A”

AREAS AND OUTLETS COVERED

ANNEX “B”

DISTRIBUTOR DISCOUNTING TO MICRO DISTRIBUTOR – FOB LESS 3%

MICRO DISTRIBUTOR PRICING – FOB + 4%

TOTAL MICRO DISTRIBUTOR MARGINS – 7%

MICRO DISTRIBUTOR ACCOUNTS’ DAILY SELL-OUT – P300-1,000

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 ANNEX “C”

KEY PERFORMANCE INDICATORS

1. MICRO DISTRIBUTOR shall ensure the availability and visibility of agreed must-have
Products in the assigned area of coverage.

2. MICRO DISTRIBUTOR shall cover or serve on a regular basis the outlets or stores stated
in Annex “A” above or within the Master Coverage Plan agreed with DISTRIBUTOR,
achieving a minimum of THIRTY (30) calls or store visits a day.

3. MICRO DISTRIBUTOR shall merchandise the stores or outlets within his Territory by
placing required POS materials and installing hangers where Products can be placed.

4. MICRO DISTRIBUTOR shall comply with the pricing structure provided by

DISTRIBUTOR.

5. MICRO DISTRIBUTOR shall use pre-agreed forms in recording orders and bringing the
forms back , on a regular basis, to DISTRIBUTOR to form part of the Sari Sari Store
(SSS) Data Base. A weekly summary report shall be submitted to DISTRIBUTOR every
Monday of each week.

6. MICRO DISTRIBUTOR shall transact with the stores or outlets within the Territory on a
cash basis or as agreed upon with DISTRIBUTOR.

7. MICRO DISTRIBUTOR shall consistently apply the IN CALL EXECUTION steps as

provided for by the distributor.

8. MICRO DISTRIBUTOR shall achieve the following targets:

Routed Calls – 30

Productive Calls – 27

Merchandising Calls – 5

Daily Sales Plan - P8,500.00