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Module 1 - Procurement Table of Contents

1. 2. 3. 4. Purpose & Scope ....................................................................................................... 2 Purchasing Terms and Conditions.............................................................................. 2 Quotation Requirements ............................................................................................ 9 Technical Documentation ......................................................................................... 10

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1. Purpose & Scope

1.1 General This document describes and defines the specific procurement requirements of filling and packaging equipment to be delivered in accordance with Nestl standards. This document is one part of the complete URS and may not be used when one of the eight following Modules is missing. Equipment Standards: Module 1 - Procurement Module 4 - Safety, Health & Environment (SHE) Module 5 - Hygienic Design Module 6 - General Design Requirements Module 7 - Quality & Performance Module 8 - Electrical & Automation (E&A) Project specific equipment requirements: Module 2 - Line Integration (Single Equipment or Line) Module 3 - Equipment Specific URS

1.2 Inclusions

2. Purchasing Terms and Conditions

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2.1 General Provisions a. This document and its attachments are the obligatory basis for the equipment, service and documentation requirements. b. The terms and conditions set out in this URS should be considered the minimum requirements applicable to the supply of equipments to Nestl. In the event of conflict between the provision of this URS and the Local Purchasing Terms and Conditions, the later will prevail. c. The supplier is responsible that the delivered / installed equipment operates consistently as specified throughout the entire operating parameters and that the relevant documentation is complete and available in the required format. d. The supplier is additionally obliged to inform the buyer should any inaccuracies be detected in specifications and/or drawings. e. All design documents need the approval of Nestl. f. The Nestl Supplier Code establishes non negotiable minimum standards that Nestl expects its suppliers to adhere to. The Code can be viewed on www.nestle.com/suppliers. By acceptance of a Nestl Purchase Order, the Supplier commits to the requirements stipulated in the Code. In case of noncompliance with or rejection of a requirement, the Supplier is obliged to notify Nestl a. Nestl will guarantee contractual obligations only for written orders placed. No work should start before receiving an approved Purchase Order from Nestl. b. Nestl declines all responsibility for orders placed by any third parties without our written consent. c. If for any reason Supplier should fail to accept our Purchase Order in writing, any conduct by Supplier which recognizes the existence of a Contract pertaining to the subject matter shall constitute acceptance by Supplier of our purchase order and all of its terms and conditions. d. Any terms proposed in Supplier's acceptance of Nestl's order which adds to, vary from, or conflict with the terms of our Purchase Order will be subjected to discussion in writing between the Supplier and Nestl. Unless otherwise stated in the Legal Contract or Purchase Order, the following is the order of precedence of documents: a. Legal Contract b. Nestl Purchase Order c. Nestl User Requirement Specification Package d. Supplier Quotation The Supplier accepts to make onsite services (installation, commissioning, training, after sales, maintenance, etc.) in the Nestl Factory Country.

2.2 Purchase Order Acceptance

2.3 Precedence of Documents

2.4 On Site Services

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2.5 Transfer of Obligations The Supplier will not transfer all or part of the rights or obligations without the prior written consent of Nestl. Any consent from Nestl to such transfer shall in no way relieve the Supplier of their responsibilities. The decision to select a supplier is taken because of its standing, its know-how and reputation. Transfer of its obligations will result in depriving Nestl of at least part of these elements, and should be made subject to the control of Nestl. All information, written or otherwise, provided in connection with this URS shall be treated by the Supplier as confidential and shall not be divulged to other parties without our written consent. To be valid for 8,700 operation hours starting from the date of the Acceptance Certificate signed by the relevant technical responsible in the Factory or 18 months from FCA delivery date, whichever comes first, provided the delayed acceptance is not due to acts or omissions from the Supplier. a. Penalty for late delivery will be stated in the Equipment Specific URS as a percentage of the contract value per day of late delivery. b. Penalty for non-performance achievement will be stated in the Equipment Specific URS as a percentage of the contract value per percentage of performance loss. The Supplier will be fully liable and will indemnify Nestl for any and all losses, cost, damage or liability of whatever nature incurred by Nestl as a consequence of the Suppliers willful misconduct, negligence or of a breach of any provision of the Purchase Order or Legal Contract established. Nothing contained in local laws or in standard terms and conditions of the Supplier will result in a reduction or limitation of the Supplier's responsibility to Nestl. 2.10 Insurance a. In order to cover its liability the Supplier and its subcontractors shall take out and maintain at its expense a valid insurance with a reputable insurer against: Loss or damage howsoever caused General Third Party & Products Liability insurance coverage for bodily harm and property damage b. The limit of liability should not be less than CHF 5,000,000 per incident. The Supplier and its subcontractors shall maintain such insurance coverage for the entire duration of the Purchase Order and shall not make any material changes in such insurance without the prior written consent of Nestl. The Contractor shall deliver Nestl a certificate or certificates of insurance evidencing satisfactory compliance.

2.6 Confidentiality

2.7 Warranty

2.8 Penalties

2.9 Liability

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2.11 Intellectual Property Rights Supplier agrees to transfer to Nestec S.A. the full ownership of all intellectual property rights created for the development and production of the Equipments requested by this URS and guarantees that it is not infringing intellectual property rights of other parties. If for some reason it is not possible to transfer the ownership of such rights to Nestec S.A., then the Supplier shall take all steps needed to grant, free of charge to Nestec S.A., an irrevocable, fully paid up and perpetual license to use all such rights. Supplier offer should be based on the Incoterms 2010: FCA Supplier Warehouse or Port of Loading, packed, loaded and stuffed unless otherwise specified. Unless otherwise stated in the Equipment Specific URS, Purchase Order or Legal Contract, the following payment terms will apply: a. No down payment b. 100% of equipment value, at complete delivery (as per Incoterm of the purchase order) c. Invoicing term: 60 days Unless otherwise stated in the Equipment Specific URS, Purchase Order or Legal Contract, the following payment terms will apply: a. No down payment b. 80% of equipment value, at complete delivery (as per Incoterm of the purchase order) c. 20% of equipment value, after successful Site Acceptance Test, against acceptance certificate signed by the relevant technical responsible in the Factory and the Supplier. The acceptance protocol must be documented, measurable and integral part of the purchase order. d. The final countersigned acceptance certificate should be in the hands of the buyer to release the payment to the Supplier. e. Services will be paid separately after acceptance. f. Invoicing term: 60 days.

2.12 Incoterms

2.13 Payment Terms (<100 KCHF) (no installation)

2.14 Payment Terms (<100KCHF) (w/ installation)

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2.15 Payment Terms (>100KCHF < 500K CHF) Unless otherwise stated in the Equipment Specific URS, Purchase Order or Legal Contract, the following payment terms will apply: a. 20% of equipment value down payment against valid bank guarantee b. 60% of equipment value, at complete delivery (as per Incoterm of the purchase order). c. 20% of equipment value, after successful Site Acceptance Test, against acceptance certificate signed by the relevant technical responsible in the Factory and the Supplier. The acceptance protocol must be documented, measurable and integral part of the purchase order. d. The final countersigned acceptance certificate should be in the hands of the buyer to release the payment to the supplier. e. Services will be paid separately after acceptance. f. Invoicing term: 60 days. Unless otherwise stated in the Equipment Specific URS, Purchase Order or Legal Contract, the following payment terms will apply: a. A% of equipment value down payment against valid bank guarantee b. B% of equipment value, at intermediate milestones before delivery c. C% of equipment value, at complete delivery (as per Incoterm of the purchase order) d. D% of equipment value, after successful Site Acceptance Test, against acceptance certificate signed by the relevant technical responsible in the Factory and the Supplier. The acceptance protocol must be documented, measurable and integral part of the purchase order. e. A, B, C and D percentages will be stated in the Equipment Specific URS. f. The final countersigned acceptance certificate should be in the hands of the buyer to release the payment to the supplier. g. Last payment against a performance or efficiency guarantee bond. This bond will be covered by a bank guarantee of 10% of equipment value h. Services will be paid separately after acceptance. i. Invoicing term: 60 days.

2.16 Payment Terms (>500KCHF)

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2.17 Packing and Dispatch a. Goods should not be dispatched without the shipping instruction from Nestl. b. Items should be adequately packed for sea freight and suitable for standard container transport where applicable. c. Neither invoice nor packing list from the Supplier must be attached to the parcel. d. Nestl must be informed at the acceptance of the purchase order if the goods do not fit into standard containers. Equipment is oversized if the gross dimensions are above the following figures: length: 12.00 m; width: 2.30 m; height: 2.50 m. e. Blank parts should be wrapped into anti-rust paper or properly greased/waxed. Electrical panels and elements requiring higher protection to be sealed into appropriate aluminum sheets with air removed and desiccant incorporated into the package to absorb moisture. f. If packaging is partially or wholly wooden, use wood treated as per IPPCstandard / ISPM 15 regulation. This is not applicable to cardboard boxes. g. Loading and stuffing inside truck(s) and/or container(s) to be done properly by the Supplier in order to guarantee safe transport of the goods. Pictures of the goods inside trucks or containers must be sent by email. h. As soon as goods are ready for pick up, Supplier should inform exact address and contact person. i. If any item considered as Dangerous according to the International Transport Regulation will be delivered, contact directly the buyer and send the Material Safety Data Sheet (MSDS). j. Please mark all packages as follows: NESTLE Purchase Order Number Nestl Factory Name Gross Kg

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2.18 Packing List Details and Penalties a. As soon as the goods are packed, the packing list should be sent by email. Packing list must be established on plain paper (no header) in English language, indicating for each package: Contents (each loose part to be mentioned) Net and gross weight Type of packaging (carton, case, etc.) Outside measurements of packaging Origin of the goods and custom codes b. In order to ship and clear the goods through customs without any problems it is important that the packing list is very explicit. For Machines / Equipments: Details figuring on name plate i.e.: brand name of machine, model or type, serial number etc. should appear on the packing list. Accessories or tools already mounted on machine and being part of it, should NOT be listed separately (preferably: machine ... including ... parts etc.). For spare parts: Must be properly tagged and visible part numbers must be shown on the packing list. Declaration such as: "one set" or "one lot" should be avoided and individual parts should be mentioned. Spare parts must always be delivered with the equipment and never separately. c. Supplier will be liable in case of wrong final packing list which cause additional costs & delays. The amount of the penalties to apply will be the additional costs related to the mistaken final packing list. If needed by Local Authorities, Supplier should provide an export declaration.

2.19 Export Declaration 2.20 Commercial Embargoes 2.21 Visits

If any, the parties should respect the valid commercial embargoes between the countries.

Nestl or its representatives shall have the right to carry out visits of the Supplier's premises where the Products are being manufactured, packed and/or stored, their accounts and records, to verify the Supplier's compliance with the terms of the Purchase Order or Contract, including compliance with the Nestl Supplier Code. The Supplier shall implement any reasonable recommendations made by Nestl regarding quality assurance and product safety. The Supplier will bear their internal cost for such visits. The carrying out of visits shall not release the Supplier from or diminish its legal obligations.

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2.22 Safety and Health at Nestl Sites Supplier and its subcontractors working in any Nestl facility should comply with local safety regulations and the Nestl Policy on Health and Safety at work. This Policy is available on: www.nestle.com/Investors/CorporateGovernance/BusinessPrinciples/

3. Quotation Requirements
3.1 General Requirements a. Quotations must comply with the requirements of this URS. b. Any offer must be structured as outlined, transparent and easy to understand. c. All offers must be in English and in the native language of the factory country if requested. d. Available in electronic form. e. Including experience with Nestl projects. Supplier must provide detailed costs for: Basic equipment (incl. concept, drawing) Auxiliary equipment (only if requested) Sub-components with mark-up (only if requested) Spare and wear parts required for routine maintenance over 8,700 hours of operation Critical parts required for the operation Engineering (incl. concept, drawing) Components (incl. hardware, wiring, documentation, test) Automation Software Factory Acceptance Test Site Acceptance Test Installation Commissioning (incl. I/O test, start up, technical trials) Training and Documentation Maintenance costs after warranty period

3.2 Cost Breakdown

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3.3 Detailed Information Supplier must provide information for: Efficiency Mean Time Between Failures (MTBF) Mean Time To Repair (MTTR) Changeover time Nominal rate Consumables Service Labor requirements Utilities consumption (electricity, steam, air, water, gas, etc) Standard Material Loss Reference fees for project manager, programmer, electrical engineer, fitters, supervisors, etc. Overtime fees Cost for travel time and expenses Qualification of the key project team members Delivery time (calendar weeks) as well as detailed project timeline and milestones to be included Holidays and non working days schedule to be provided

3.4 Additional Information

4. Technical Documentation
4.1 General Requirements The technical documentation should be sent in English and in the local language of the Factory location, if required, in electronic form, at the moment of equipment delivery or before including: Updated technical drawings and documents (as built). Updated operating and maintenance manuals. Updated training materials. The equipment is delivered with a comprehensive spare parts catalog organized by machine modules and classified in alphabetical order. OEM brand and part numbers for the parts not manufactured by the Supplier. If necessary, this documentation shall be updated after conclusion of commissioning and start-up and this work shall be concluded within 2 months from start-up.