DISTRIBUTORSHIP AGREEMENT

KNOW ALL MEN BY THESE PRESENTS:

This DISTRIBUTORSHIP AGREEMENT is entered into and executed this

_____________________ in _____________________, by and between:

PT HERMAN MEDTEK DIAGNOSTIK, an Indonesian legal entity and with

principal office address at Ruko Puri Mansion A16, Jalan Lingkar Luar Barat – Jakarta 11610,
Indonesia, represented by its Managing Director, MR. JOSE ALBERTO R. CATRAL, hereinafter
referred to as the “PRINCIPAL”.

- AND –

__________________________________________, an Indonesian legal entity and with

principal address at __________________________________________, herein represented by its
___________________, ___________________, hereafter referred to as “DISTRIBUTOR”,

The PRINCIPAL and the DISTRIBUTOR as represented by their respective Officers are
hereinafter collectively referred to as “THE PARTIES” as the context may require.

WITNESSETH THAT:

WHEREAS, the PRINCIPAL is engaged in the business of supplying and distributing in-vitro
diagnostic product lines;

WHEREAS, the DISTRIBUTOR has all the necessary expertise, personnel, and facilities to
distribute the diagnostic products lines of the PRINCIPAL;

WHEREAS, the DISTRIBUTOR has offered, and the PRINCIPAL has accepted such offer, to
be the exclusive DISTRIBUTOR of the said diagnostic products lines supplied and sold by the
PRINCIPAL in a limited and specific territory in Indonesia; and

NOW, THEREFORE, for and in consideration of the foregoing premises and the mutual
covenants and stipulation stated hereunder, the parties through their respective representatives hereto
agree as follows:

I. TERM OF THE CONTRACT

A. DURATION - This contract is valid for ________ (__) years, from date of
_________________________ until date of _________________________.

B. RENEWAL – On or before the expiration of this agreement, PRINCIPAL has the

exclusive option to renew the contract upon written notice by the PRINCIPAL to the
DISTRIBUTOR.

C. The PRINCIPAL may terminate this Agreement for any reason and at any time upon
prior advance written notice to the DISTRIBUTOR. The parties at fault may be allowed
to rectify any violation within 30 days from issuance of warning letter unless such
infraction is so serious that immediate termination is necessary.

II. ACCOUNT-SPECIFIC/PRODUCT-SPECIFIC ASSIGNMENT AND RESTRICTIONS

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 A. The LIMITED and EXCLUSIVE TERRITORIES of operation of the DISTRIBUTOR to
distribute the aforementioned products of the PRINCIPAL shall be “account-specific”
and/or “product-specific” within a territory and hereto attached as Annex “A” and made
integral part hereof.

B. The DISTRIBUTOR shall strictly confine its operation of distribution of the products
only to the assigned TERRITORIES. Should the DISTRIBUTOR serve and operate
outside the abovementioned confined territories, this Distributorship Agreement and
corresponding Certificate of Exclusivity shall be terminated without need of notice.
However, the DISTRIBUTOR may apply for additional territory and/or exclusion of
territories subject to review and approval by the PRINCIPAL. The request for
addition/exclusion of territories shall be based on the DISTRIBUTOR’S performance for
the six (6) consecutive months immediately preceding the date of request. Failure of the
DISTRIBUTOR to meet the sales target during the six (6) consecutive months
immediately preceding the date of request shall amount to denial of such request for
addition of territories. This provision applies to authorized subdealers as warranted.

C. The PRINCIPAL reserves the right to exclude and/or remove other territories hereto
mentioned from the area of operation of the DISTRIBUTOR upon thirty (30) days prior
written notice to the DISTRIBUTOR.

III. DUTIES AND RESPONSIBILITIES OF THE PARTIES

A. On a best-effort basis, the PRINCIPAL shall provide the DISTRIBUTOR the marketing
materials and promotional paraphernalia/campaigns such as samples, brochures, re-prints,
studies, gimmicks, literatures, inserts and other similar materials subject to limitation as
to cost.

B. Technical support such as product/technical presentations to end users, technical

troubleshooting, sales and marketing skills training, personality and soft skills training,
other technical training for the DISTRIBUTOR’S personnel and/or sales force, shall be
provided by the PRINCIPAL. Softcopies of these materials shall be provided to
Distributor as needed.

C. The DISTRIBUTOR shall, at its sole expense, exert its best efforts to promote the sales
and distribution of the product within its specified AREA/TERRITORY. It is therefore
expected that the DISTRIBUTOR shall:

Facilities/Business/Logistics/Personnel Requirements

1. Maintain its office, warehouse and sales facilities, respect handling and storage of
product with special temperature requirements (i.e. cold chain) and all other
product similarly classified.

2. Maintain the inventory of the product sufficient to meet the sales demand for a
minimum of 1 month for shorter shelf-life products and 3 months for longer
shelf-life to be determined on a per business unit level by the parties.

3. Provide access to the PRINCIPAL during reasonable business hours, to inspect

the condition and stock level of the diagnostic products stored at
DISTRIBUTOR’S warehouses/ storage areas.

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 4. Engage, supervise, train and maintain competent and qualified Sales Personnel.

5. Engage, supervise, train and maintain competent and qualified Service Engineer
who shall undergo training with the PRINCIPAL and certified to by the latter as
having the necessary technical skills and service competencies.

6. Purchase its own Demo and Service unit/s to support the product demo and
service requirement in the assigned territory. The list of Demo and Service unit/s
shall be agreed by the PRINCIPAL and DISTRIBUTOR and which list shall
form an integral part of this Agreement. The Distributor has the option to lease or
rent a Demo and Service unit/s from JARCET subject to availability of units.

7. Not sell any product after its expiry date.

8. Resell the product only within the TERRITORY and without any alterations of
their form, substance and packaging.

9. Promote and endorse to the consuming public the reliability and capabilities of all
the product subject of this AGREEMENT.

IV. MACHINE CARE, REPAIR, PREVENTIVE MAINTENANCE

A. Upon request of the Distributor, and beyond the agreed Warranty Period there will be a
bi-monthly preventive maintenance on the equipment and accessories to be done by
PRINCIPAL’s sister-company JARCET BUSINESS SHARED SERVICES (PHILIP-
PINES), INC. The service fee shall be in accordance with the schedule of fees provided
by JARCET.

In case there will be any technical problem encountered on the machine and accessories
by the DISTRIBUTOR, PRINCIPAL undertakes to respond to such problem within
Forty-Eight (48) hours from receipt of the call as documented in a ticketing system
when applicable.

B. If the loss or severe damage on the loaned Service Unit is caused by the negligence or
criminal act of the DISTRIBUTOR’s personnel, employees or representatives, the
indemnity price which is in the amount equivalent to the book value or scrap value,
whichever is higher but not more than ONE MILLION PESOS ONLY (Php
1,000,000.00) VAT Inclusive shall exclusively be for the account of the DISTRIBUTOR.
Unless a higher replacement cost is agreed beforehand by the parties.

C. All repair costs for damages on the Service Unit caused by reasons set out below shall be
billed at the current time and material rate and to be fully paid by the DISTRIBUTOR, to
wit:

a. Operation failure of the equipment caused by the following:

i. Spills, abuse, misuse of and improper operation of the equipment;

ii. Failure to provide specified operational environment such as, but not
limited to, stable electrical power, good air conditioning, clean and tidy
room;

iii. Maintenance or modification to the equipment performed by

personnel not authorized by PRINCIPAL;

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 iv. Failure due to non-performance of routine maintenance, as outlined in
the operations manual and in accordance with the training provided by
PRINCIPAL;

v. Customer’s use of reagents, sample cups, cuvettes or other accessories

or consumables not in accordance with PRINCIPAL’s specifications;

b. Any parts connected to the main unit of the equipment such as printer,
uninterruptible power supply (UPS), computer and the like which do not carry
the PRINCIPAL brand name or are not supplied by PRINCIPAL;

V. REPORTORIAL REQUIREMENTS

A. Submit to PRINCIPAL ANNUAL SALES TARGET for the period January to

December. The standard report template shall form an integral part of this Agreement and
hereto attached as Annex “B”. Non-submission of this report shall result to non-delivery
of purchase order and/or non-issuance of sales invoice.

B. Submit to PRINCIPAL INVENTORY REPORT on the 5th working day of the month
following the reporting month. (i.e. March 31 ending inventory balance to be reported by
5th working day of April). The standard report template shall form an integral part of this
Agreement and hereto attached as Annex “C”. Non-submission of this report shall result
to the downgrading of the credit term into strict Cash-on-Delivery (COD).

C. Submit to PRINCIPAL actual IN-MARKET PRODUCT SALES REPORT (IMS) on

the 5th working day of the month following the reporting month. (i.e. March 31 ending
inventory balance to be reported by 5th working day of April). The standard report
template shall form an integral part of this Agreement and hereto attached as Annex “D”.
Non-submission of this report shall result to the downgrading of the credit term into strict
Cash-on-Delivery (COD).

D. Submit to PRINCIPAL a MONTHLY SUMMARY LIST OF INSTALLATION

REPORT following the PRINCIPAL’s

E. prescribed standard template. The standard report template shall form an integral part of
this Agreement and hereto attached as Annex “E”. Non-submission of this report shall
result to non-delivery of purchase order and/or non-issuance of sales invoice.

F. Collaborate with the PRINCIPAL in the latter’s preparation of Annual Sales Budget for
the product.

G. Non-Compliance of the Reportorial Requirements required of the Distributor shall be a

ground for immediate termination of this Agreement.

VI. AUDITS OF COMPANY PREMISES AND FINANCIAL STANDING

A. The PRINCIPAL, pursuant to this Agreement has the authority to conduct audit of the
DISTRIBUTOR’s premises and properties.

B. The PRINCIPAL is also authorized to conduct financial audit of the DISTRIBUTOR’s

financials with the end view of ascertaining the DISTRIBUTOR’s liquidity position and
financial position.

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VII. DELIVERIES

A. Deliveries of the product will be made only at the DISTRIBUTOR’S warehouse by the
PRINCIPAL within two (2) to fifteen (15) working days upon receipt of the official
purchase order from the DISTRIBUTOR.

B. Deliveries of the product will be through PRINCIPAL’s accredited freight forwarder or

courier. In cases when the DISTRIBUTOR decides to use non-accredited forwarder or
courier, the date of delivery of goods to the non-accredited forwarder or courier shall be
considered as date of receipt of goods by the DISTRIBUTOR for purposes of aging the
Accounts Receivable and reckoning date of the credit term. Distributor may nominate its
own forwarder or courier for accreditation by Principal.

VIII. CREDIT LIMIT

A. The DISTRIBUTOR shall have a maximum credit limit and credit term at any given time
within the validity period of this Agreement and hereto attached as Annex “F”.

B. The PRINCIPAL reserves the right to withhold the processing of purchase order and/or
delivery of products to the DISTRIBUTOR when the maximum credit limit and/or credit
term is exceeded.

IX. COLLATERAL/Real Estate Mortgage/Chattel Mortgage

A. The DISTRIBUTOR shall submit a listing of real property (i.e. land/building) and other
fixed assets registered under the name of the Corporation as reflected on the Financial
Statement and/or real property and other personal assets registered under the name of its
duly authorized Representative to this Agreement, the total value of which must be
equivalent to at least 25% more than the DISTRIBUTOR’s maximum credit limit.

B. A Real Estate Mortgage Contract for Real Property or a Chattel Mortgage Contract
for Personal Property or Chattel Mortgage Contract for Machines owned by
Distributor currently on tie-up with Customer End-User shall be executed by and
between the Parties as a collateral contract to the outstanding credit or accounts payable of
the DISTRIBUTOR.

C. The DISTRIBUTOR may request for increase in credit limit upon submission of updated
listing of real property registered under the name of the Corporation and/or real property
and other fixed assets registered under the name of its duly authorized Representative to this
Agreement the total value of which must be equivalent to at least 25% more than the
DISTRIBUTOR’s requested increase in credit limit.

D. Any waiver on this requirement on collateral cover must be made in writing by the
PRINCIPAL.

X. PAYMENTS

A. The initial orders for the product shall be CASH ON DELIVERY (COD) basis only
unless otherwise agreed upon by the Parties. Thereafter, the succeeding orders shall have
an agreed credit limit and credit terms.

B. The product purchase shall be covered with a crossed Post-dated Check (PDC) to be
issued within 7 (SEVEN) days to the PRINCIPAL upon receipt of stocks. PDC payment
shall observe the agreed credit term.

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 C. Late payments shall be subject to interest at the rate of 1.5 % per month. Late payments
made by the DISTRIBUTOR shall not be construed as a waiver of any claim of the
PRINCIPAL for any breach of the terms and conditions in this Agreement;

D. The PRINCIPAL reserves the right to withhold the processing of purchase order and/or
delivery of products to the DISTRIBUTOR when the latter has overdue accounts.

XI. PURCHASE REQUIREMENT

A. In Order to maintain the exclusivity (i.e. account-specific and product-specific) of the

DISTRIBUTOR in the TERRITORY as per Annex “A”, the DISTRIBUTOR shall be
provided by the PRINCIPAL with its specific ANNUAL SALES Target as per Annex
“B”. Once agreed, this will be considered as the purchase requirement within the
contractual year and is expected to have an annual increase of at least twenty-five (25 %)
per cent from the succeeding year unless agreed otherwise.

XII. NON-COMPETE CLAUSE

A. The DISTRIBUTOR WARRANTS that it will not enter into a similar agreement with any
competing entity involving the same product during the validity and effectivity of this
AGREEMENT without a written consent from the PRINCIPAL. Any violation of this
restriction would entitle the PRINCIPAL to LIQUIDATED DAMAGES in the amount
of 1 MILLION PESOS.

B. In cases when PRINCIPAL ceased to carry the products of the Manufacturers as

enumerated in Annex “A” for whatever reasons, the PRINCIPAL shall provide
alternative products sourced from another Manufacturers for distribution by
DISTRIBUTOR.

C. DISTRIBUTOR shall not distribute products of the Manufacturers whom PRINCIPAL

had ceased to do business with during the life of this Agreement but shall carry instead
the alternative products from another Manufacturers as recommended by the
PRINCIPAL. This restriction shall apply for five (5) years from date PRINCIPAL ceased
to do business with Manufacturers, and any violation thereof by the DISTRIBUTOR of
this restriction would entitle the PRINCIPAL to LIQUIDATED DAMAGES in the
amount of FIVE (5) MILLION PESOS.

D. In cases when DISTRIBUTOR has been carrying competing product and has been selling
to its current customer prior to the validity and effectivity of this Agreement, the
DISTRIBUTOR shall be allowed to continue selling such competing product to its
currently-served customer. However, the DISTRIBUTOR shall be prohibited from selling
the competing product to new customer during the validity and effectivity of this
Agreement. A competing product means a product that is in direct competition with
PRINCIPAL’s existing product portfolio.

E. A Distribution Agreement may still be executed between the PRINCIPAL and

DISTRIBUTOR excepting such competing product of DISTRIBUTOR which is directly
in competition with PRINCIPAL’s product on the principle that the Distribution
Agreement is on account-specific and product-specific basis within a territory.

F. The PRINCIPAL strictly follows a non-competing product policy. Any violation with
respect to this non-compete clause shall be served a written warning to rectify any breach
of this Agreement within (30) thirty days from date of infraction. Non-compliance of said
written warning shall be a ground to terminate this Agreement.

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XIII. TERMINATION

A. Any of the parties may terminate this Agreement by giving the other party a thirty (30)
day advance written notice, specifying the reasons for termination and the date from
which the termination is deemed effective.

B. Also, the PRINCIPAL may terminate this Agreement without need of notice due to
DISTRIBUTOR’S violation of any provision contained herein.

XIV. OBLIGATIONS AFTER TERMINATION

A. Upon the termination or expiration of this Agreement, the PRINCIPAL may OR may not
exercise the right to repurchase DISTRIBUTOR's inventory of the remaining product(s)
at DISTRIBUTOR's acquisition cost or offset the cost of the remaining inventory against
the outstanding account of the DISTRIBUTOR.

XV. CONFIDENTIALITY AND NON-DISCLOSURE CLAUSE

A. During the life of the agreement and one (1) year after the termination, each of the
contracting parties shall keep in strict secrecy and shall not disclose ANY information
obtained from the other party in connection with the product(s), its prices, the provisions
of the AGREEMENT or performance thereof; Provided, however that the above
obligation of confidentiality shall not apply to any or which hereafter becomes public
knowledge through no fault of either party, or information which is properly provided to
either party without restriction by an independent third party, or information which either
party can show was already in either party’s possessions at the time of receipt from the
other party.

XVI. NO EMPLOYER-EMPLOYEE RELATIONSHIP

A. The relationship between the parties is that of a supplier and a reseller. DISTRIBUTOR
is an independent contractor and is not a joint venture with or partner, agent or employee
of the PRINCIPAL. Nothing in this Agreement shall be deemed to permit
DISTRIBUTOR to conduct business in the name of or on account of PRINCIPAL.
Accordingly, the DISTRIBUTOR shall be solely responsible to all its agents, employees
and personnel and there shall be no liability or responsibility upon the PRINCIPAL for
wages and/or legal benefits owing to any of the DISTRIBUTOR’s agents, employees or
personnel, or damages or injuries sustained or claimed by any agent, employee or
personnel of the DISTRIBUTOR arising out of this Agreement, and the DISTRIBUTOR
shall at all times save the PRINCIPAL therefrom.

XVII. LIABILITY

A. PRINCIPAL shall answer for any products that was/were found to be defective as to their
manufacture. Any other damage/s to the products sustained after delivery to the
DISTRIBUTOR shall be for the sole account of the DISTRIBUTOR. The
DISTRIBUTOR shall indemnify and hold PRINCIPAL free and harmless against any
other claims, lawsuits, proceedings, recoveries and damages arising out and/or caused by
negligence committed by the DISTRIBUTOR in the handling and use of the products.

XVIII. SEVERABILITY

A. If any provision of this Agreement or the application thereof to any situation or

circumstance shall be invalid or unenforceable, the remainder of this Agreement shall not

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 be affected, and each remaining provision shall be valid and enforceable to the fullest
extent.

XVIII. ALTERNATIVE DISPUTE RESOLUTION

A. The Parties agree that, in the event of a dispute or alleged breach, they will work together
in good faith first, to resolve the matter internally and, if necessary, to use a mutually
agreed alternative dispute resolution technique following the rules of arbitration of the
Indonesia Dispute Resolution Center, prior to resorting to litigation. Unwillingness of one
Party to submit to arbitration shall be considered a failure to arbitrate.

B. Any dispute arising from the interpretation or enforcement of this Agreement which is not
resolved by negotiation or mediation shall be referred to Arbitration. There shall be one
party-arbitrator to be appointed by each Party and a common Arbitrator to be appointed
by both party-appointed Arbitrators. The venue or the seat of arbitration for the
alternative dispute resolution shall be at the Indonesia Dispute Resolution Center
(PDRIC).

C. This instrument shall serve as the agreement of the parties to arbitrate. Costs of arbitration
shall be shared equally by both parties.

XIX. KEY UNDERTAKINGS OF THE DISTRIBUTOR

A. To emphasize the importance of the salient provisions of this Distribution Agreement,

the Distributor reiterates its commitment to comply with the following undertakings as
a continuing requirement to the validity of this Distribution Agreement, to wit:

1. The “Non-disclosure of confidential information” in relation to Article XV,

Section A.
2. The “Financial Due Diligence” in relation to Article VI (A), (B).
3. The “Ability to Maintain a Cold Chain Storage” in relation to Article III, Section
C, Item No. 1.
4. The “Employment of Own Service Engineer” as in relation to Article III, Section
C, Item No. 5.
5. The “Employment of Qualified and Competent Salespeople” in relation to Article
III, Section C, Item No. 4.
6. The “Observance of Highest Level of Customer Service” in relation Article III,
Section C, Item No. 6 and Article IV.
7. The payment in the form of Post-dated Check (PDC) within seven (7) days from
receipt of stocks in relation to Article X, Section B.
8. The submission of periodic mandatory reports in relation to Article V-
Reportorial Requirements.
9. The submission of “Masterlist of Accounts and Target Accounts for Non-
exclusive Products” as additional requirement in light of the provisions of Article
II – Account-specific/Product-specific Assignment and Restrictions and
Article XII-Non-competing clause, Section D.

B. This instrument shall serve as the agreement of the parties to arbitrate. Costs of
arbitration shall be shared equally by both parties.

IN WITNESS WHEREOF THE PARTIES HERETO, by their duly authorized representatives,

have signed and executed this agreement on the date and in the place first above written.

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PT. HERMAN MEDTEK
________________________________
DIAGNOSTIK

Mr. Jose Alberto R. Catral ________________________________

Managing Director ________________________________
Date: Date:

WITNESSES:

_______________________________ __________________________________

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