CO-MANUFACTURING AGREEMENT

THIS AGREEMENT is made on this Monday, the 25 th day of November 1996, by and
between:

1. PT NESTLE INDONESIA, a company duly organized and existing under the laws of
the Republic of Indonesia, having its head office in Jakarta, 7th floor Wisma
Metropolitan II, Jalan Jend. Sudirman Kav. 31, In this respect represented by its
President Director, Mr. S.A. Issenmann, residing in Jakarta, hereinafter referred to as
“Company”.

And

2. PT ULTRA JAYA MILK INDUSTRY, a company duly organized and existing under
the laws of the Republic of Indonesia, having its head office in Bandung, Jalan Raya
Cimareme no. 131, Padalarang, in this respect represented by its President Director,
Mr. Sabana Prawirawidjaja, residing in Bandung, hereinafter referred to as “Co-
manufacturer”.

Witnesseth :

WHEREAS the Co-manufacturer operates facilities in its factory at Jalan Raya

Cimareme no. 131, Padalarang, Bandung, for the co-manufacture of UHT RTD milk
products.

WHEREAS the Company has the exclusive right and license in Indonesia to co-
manufacture distribute and sell UHT RTD Milk products under the trademarks mentioned
in Appendix 1 (hereinafter referred to as the “Trademarks”)

WHEREAS the Company desires to engage the Co-manufacturer to produce and to

pack UHT-RTD milk products (hereinafter referred to as the “Products”), Co-
manufacturer will produce and pack them in cartons in specified quantities in accordance
with the specifications, instructions, manufacturing procedures and quality standards
provided by the Company (hereinafter the “Specifications”-Appendix 2) for sale under
the Trademarks (or such other trademark(s) as the Company may from time to time
choose; the aforesaid activities of the Co-manufacturer being hereinafter collectively
described as the “Services”.

WHEREAS Co-manufacturer has co-manufacturing facilities and the necessary

equipment and know-how to perform the Service and is willing and able to do so on the
terms and conditions hereinafter appearing.

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NOW IT IS AGREED as follows:

1. ENGAGEMENT

The Company hereby engages the Co-manufacturer to provide and the Co-
manufacturer agrees to provide the services in Indonesia, on the terms and
conditions herein.

The Co-manufacturer shall carry out the Service for the Company. The Co-
manufacturer undertakes that it will use the Products and packaging materials solely
and exclusively for the performance of the Services.

The Co-manufacturer agrees, that, except where instructed in writing by the

Company, it shall not sell, transfer or dispose of any quantity of Products (whether
pre-packed or in bulk) and packaging materials to any person, natural or juridical,
incorporated or unincorporated. The Co-manufacturer agrees that any movement
transfer, disposition, sale or other form of dealing therewith shall be the exclusive
right and prerogative of the Company.

In no case shall the Co-manufacturer sub-contract the Service or any part thereof to
a third party without the prior written consent of Company.

2. QUANTITIES AND DELIVERY

2.1. FORECASTS AND ORDERS

On the first week of each month, the Company shall advise the Co-manufacturer
of its fix requirement for quantities of the Products for the following month
(Appendix 3), together with forecasted requirements for the next following 2
(two) months. It is agreed by both parties that the difference between the
forecasted requirements and actual requirement shall not exceed + 10% (ten
percent), falling which a flexible adjustment system for the stock position will
apply as referred to in Appendix 3. The Company will place firm orders with the
Co-manufacturer for specified quantities of each Product with sufficient time prior
to its required delivery date, stating in particular the required sizes and delivery
date, as well as any other data necessary to enable Co-manufacturer to perform
the Services.

The Products shall be produced, packed and released according to enclosed

Appendix 2 but the Company reserves the right to modify or after the packing
specifications (including but not limited to sizes) upon mutual agreement with the
Co-manufacturer.

2.2. CO-MANUFACTURER’S RISK

All quantities of the Products, whether in bulk or packed or as work in progress,

and all raw materials and all packaging materials which have been delivered to
the Co-manufacturer’s facilities shall be at the sole risk of the Co-manufacturer

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 and he shall assume any and all risks of loss or damage thereto arising from
whatever cause (including but not limited to robbery, hijacking, theft, dishonesty,
pilferage, larceny, house breaking and other acts of man and natural calamities
or Act of God), except if proven that the deterioration and/or declining of quality
of the above mentioned products and/or raw materials are due to product’s
nature. However it does not include the mis-handling and storage which are still
within the responsibility of the Co-manufacturer. In the case of such loss or
damage, the Co-manufacturer will, Irrespective of whether Co-manufacturer will
receive compensation therefore by way of Insurance, reimburse the Company
the replacement value of the materials in question at their actual cost.

To ensure full compliance with its obligations and contingent liabilities herein, the
Co-manufacturer hereby represents and warrants, and shall if requested prove to
the full satisfaction of the Company, that it has existing valid insurance coverage
sufficient to meet in full all and any claim arising from the Co-manufacturer’s
obligations herein.

2.3. DELIVERY, COLLECTION AND RISK

The Co-manufacturer shall deliver each consignment of the Products from stock
in accordance with the relevant firm order to the Company’s nominated facilities
within five (5) business days of receipt of the Company’s written notice that the
consignment is ready for deliver upon quality release by the Co-manufacturer.
Upon receipt by the Company title to and risk in the relevant consignment of the
Products shall pass to the Company.

3. CO-MANUFACTURING FEE

3.1. GENERAL

In consideration of the performance by the Co-manufacturer of the Services,

Company shall pay Co-manufacturer a fee (the “Co-manufacturing Fee”) as per
attached Appendix 4. The Co-manufacturer guarantees that the co-
manufacturing Fee (if any) as is appropriate in all the circumstances. All taxes,
levies, imposts and similar charges which may be due to the national or local
authorities in respect of the performance of the Services and/or receipt of the Co-
manufacturing Fee shall be for the exclusive account of the Co-manufacturer.

3.2 INVOICING AND PAYMENT

The Co-manufacturer will at the latest on every seventh (7th) day of each month,
during the term of this Agreement, invoices the Co-manufacturing Fee in respect
of all Products accepted by the Company in the preceding one (1) month period,
invoices on the raw materials and packaging materials referred to in article 4.1.
paragraph 1 and article 4.2., and the Company shall settle such invoices not later
than the thirtieth (30th) day of the current month.

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3.3 ACCOUNTS AND INVENTORY

For the purposes of good accounting and effective inventory control the
Company and the Co-manufacturer shall establish proper accounts and systems
which will ensure the efficiency and mutual benefits to be derived from the
performance of the Services. The books of accounts in relation to the Services to
be kept by the Co-manufacturer shall, upon request ,be available for examination
by the duly authorized representative of the Company. In addition, for accounting
and control purposes, the authorized representatives of the Company shall be
free at all reasonable times to inspect the warehouse(s) or other storage facilities
of the Co-manufacturer where the Company’s raw materials, packaging
materials, finished Products and goods in process are stored.

4. RAW AND PACKING MATERIALS

4.1 RAW MATERIALS

The Company will provide all required material components (mixed of materials
prepared by the Company) to perform the Services. If required to do so, the Co-
manufacturer shall be responsible for the sourcing and procurement of raw
materials (other raw materials beside material components) of the necessary
quality and type to meet the Specifications, unless another arrangement has
been agreed between the two parties. For the service of the Co-manufacturer to
provide raw materials of the necessary quality and type in accordance with the
Specifications, the Company will pay to the Co-manufacturer a handling fee
which include cost of fund, services etceteras, at a rate calculated based on an
open book basis and approved by both parties.

The Company shall provide the necessary quantities of material components and
packaging materials as may be required to perform the Services.

The Company will arrange for delivery of quantities of material components and
packaging materials from time to time as end when required for the Services.

The Company will ensure the quality and quantity of material components and
packaging materials.

4.2 PACKAGING MATERIALS

Unless otherwise agreed with the Co-manufacturer, the Company shall be solely
responsible for the supply of all materials required in respect of the Services.
Where the Parties agree that any packaging materials are to be procured by the
Co-manufacturer, such materials shall be billed to Company at cost and included
as a separate item in the monthly involves issued by Co-manufacturer in
accordance with Article 3.2.. For the service of the Co-manufacturer to provide
packaging materials of the necessary quality and type in accordance with the
Specifications, the Company will pay to the Co-manufacturer a handling fee

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 which include cost of fund, services etceteras, at a rate calculated based on an
open book basis and approved by both parties.

4.3 RAW/PACKAGING MATERIALS LOSSES

All losses of material components and/or packaging materials, and raw materials
in excess of the amounts specified in Appendix 5 hereto, shall be for the
account of the Co-manufacturer.

4.4 WAREHOUSING/STORAGE

The Co-manufacturer shall provide a separate warehouse space to store all

finished Products and the material components, raw materials, packaging
materials and any other materials associated with the provision of the Services.
The Co-manufacturer will maintain the appropriate conditions in the warehouse
for the proper storage of all the items specified in the preceding sentence.

In the event that additional warehouse space is required for storage of all finished
Products stocks, material components, raw materials, packaging materials and
any other materials associated with the provision of the Services, for requirement
and/or stock of more than as mentioned in Appendix 3, the Company will pay to
the Co-manufacturer a fee which include cost of fund, services etceteras, at a
rate calculated based on an open book basis and approved by both parties.

5. TECHNICAL ASSISTANCE AND QUALITY

5.1 KNOW-HOW

The Company shall make available or shall cause to be made available to the
Co-manufacturer such technical know-how and assistance as Company shall
deem necessary for the proper co-manufacturing of the Products.

5.2 TECHNICAL ADVISOR/MANAGER

The Co-manufacturer will have at least one senior technical manager dedicated
to the co-manufacturer of the Products, who will

I. oversee and be in overall charge of all manufacturing and packaging

operations at the Co-manufacturer’s facilities, including the maintenance
of established co-manufacturing and processing standards;

II. ensure proper quality control operations in respect of the Products at the
Co-manufacturer’s facilities or elsewhere and, without prejudice to Article
6.2 hereof, ensure that no consignments of the Products are released by
Co-manufacturer unless all operations aforesaid have been carried out to
his satisfaction;

III. report to the Company as soon as practicable any major difficulties

encountered in connection with the performance of the Services

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6. QUALITY AND REJECTION

6.1 QUALITY OF PRODUCTS

The Co-manufacturer agrees to supply to the Company quantities of the

Products which comply at all times with the Specifications in Appendix 2 (as
may be amended by written agreement by the Parties from time to time) and the
applicable laws.

The Co-manufacturer represents and warrants that is in possession of all

necessary permits, authorizations and licenses from the relevant authorities to
perform the Services and that such permits, authorizations and licenses are
valid.

The Co-manufacturer represents and warrants that its plant, equipment and
facilities and the operation thereof conform with all relevant laws, rules and
regulations (in particular, but without prejudice to the foregoing, those in relation
to the manufacturing of good products for human consumption).

6.2 INSPECTION AND SAMPLING

In addition to the provision of Article 3.3 the Co-manufacturer shall permit the
authorized representatives of Company to enter Co-manufacturer’s facilities at all
reasonable times for the purpose of inspecting and assisting the performance of
the Services and the Products, so as to ensure compliance with the
Specifications and generally with provisions of this Agreement.

The Co-manufacturer will provide to the Company, at the Company’s request,

representative samples of the Products as stipulated in Appendix 2.

6.3 REJECTION OF PRODUCTS

The Company, through its authorized representatives, shall be entitled in the

course of inspections under Article 6.2 to reject Products in the course of co-
manufacturing where they fail to meet the Specifications as specified in Appendix
2 and where such failure is attributable to the Co-manufacturer’s failure to follow
and implement any aspect of the Specifications or written advice or
recommendations regarding the production of the Products.

Further, the Company shall have the right, within twenty one (21) calendar days
of taking release of any given consignment of the Products, to reject all or part of
any consignment of the Products where it fails to meet the Specifications as
specified in Appendix 2, unless otherwise agreed in writing by the Company.

Any Products reject as aforesaid shall at the Company’s sole option either be
destroyed or, if possible, reworked by the Co-manufacturer’s cost.

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7. LABELS AND TRADEMARKS

7.1 RIGHT TO USE

The Company hereby warrants that it is authorized by the owner of the

Trademarks to use the Trademarks on and in relation to the Products and to
engage third party co-manufacturers to produce the Products bearing the
Trademarks.

7.2 USE OF TRADEMARKS

The Products will be manufactured and packed in packaging materials provided

(unless otherwise agreed in writing) by the Company bearing the Trademarks
mentioned in Appendix 1 or such other trademarks as the Company may specify
in writing from time to time.

7.3 DISCLAIMER OF INTEREST

The Co-manufacturer acknowledges that it has no right to use the Trademarks

on any goods or products which it produces for itself or for third parties. The Co-
manufacturer specifically disclaims any right to or interest in any of the
Trademarks and undertakes to use the Trademarks, including all and of the
Trademarks and undertakes to use the Trademarks, including all and any
representations of the same on moulds, packing, labels or elsewhere, strictly as
directed by or on behalf of the Company.

The Co-manufacturer undertakes not to use on any products or goods any

words, combinations of letters, makes, images, logos, devices, designs or get-up
which resembles or so nearly resembles any of the packaging for the Products
and/or the Trademarks as to be likely to cause deception or confusion.

8. GENERAL PROVISIONS

8.1 INDEMNITY

The Co-manufacturer hereby indemnifies and holds the Company harmless

against any and all claims of whatever nature howsoever arising in relation to the
Products except to the extent that any such claim which can be proved to be
attributable to the negligence of the Company.

8.2 TERM AND TERMINATION

This Agreement shall take effect on the date first above mentioned and shall
continue in effect for a period of five (5) years (the initial term). Thereafter it shall
be automatically renewed for further periods of five (5) years each unless either

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 party hereto give written notice to the others, not less than twelve (12) months
prior to the end of the initial term or any subsequent term, that it will terminate
this Agreement effective at the end of the term then running. A termination under
this paragraph may be without cause and shall be without further obligation to
either party hereto except as provided by the terms and conditions of this
Agreement.

8.3 PRIOR TERMINATION UNDER SPECIAL CIRCUMSTANCES

Either Party shall be entitled at any time by notice in writing to the other Party to
terminate this Agreement forthwith in any of the following events, namely:

I. if the other Party shall go into liquidation other than a voluntary liquidation
for the purpose of reconstruction or amalgamation, or shall commit an act
of bankruptcy or shall compound with its creditors generally or if a
receiver or judicial manager shall be appointed over the whole or a
substantial part of its assets:

II. if the other Party shall cease to carry on business;

III. if the other Party shall commit any breach of any of the provisions of this
Agreement and shall fail within fifteen (15) business days of being notified
in writing to remedy such breach;

IV. if the whole or a substantial part of the Co-manufactures assets shall

pass under the control of any person or company or body of any other
kind to whom the Company objects.

V. If the Co-manufacturer fails to oblige continuously to this operational

commitments, such as:

- constant insufficient and/or out norms quality standards

- constant shortage of agreed supplies and capacities.

8.4 RESULT OF TERMINATION

In the event that one of the parties elects to terminate this Agreement in
accordance with Article 8.3, the other Party shall have no claim for damages,
compensation or indemnity as a consequence of such termination. The
termination of this Agreement shall, however, be without prejudice to any
liabilities or obligations on either Party which arose under this Agreement prior to
the date of termination.

8.5 OBLIGATIONS OF MANUFACTURER UPON TERMINATION

Immediately upon termination of this Agreement for nay reason whatsoever the
Co-manufacturer shall:

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 I. forthwith cease to use any of the Trademarks and any labels and
packaging, including devices and colors relating thereto, and shall not use
on any goods or products any words, combinations of letters, marks,
images, logos, devices, designs or get-up which resembles or so nearly
resembles any of the packaging for the Products and/or the Trademarks
as to be likely to cause deception or confusion;

II. deliver without delay to the Company or as directed by the Company all
confidential technical or other information, documentation or materials
including any and all copies of all the aforementioned items and any
testing equipment or similar apparatus provided by Company to the Co-
manufacturer in connection with the Services, acceptance of which are
acknowledged by receipt signed by authorized signatories of the Co-
manufacturer.

III. deliver to the Company or as directed by it destroy under the supervision

of the Company all printing plates, labels, moulds and other material
bearing any of the Trademarks;

IV. Deliver to Company all quantities of the Products, material components,

raw materials, whether in bulk or already packed and all packaging
materials;

V. Execute any documents which the Company may deem necessary or

desirable to carry out the intent of this Article.

8.6 COMPANY EQUIPMENT AND MACHINERY

Unless otherwise agreed in writing, where the Company provides the Co-
manufacturer with any items of equipment or machinery for or in connection with
the production of the Products such items shall at all times remain the exclusive
property of the Company and shall be returned to the Company immediately
upon written request, upon termination of this Agreement.

The Company will be responsible for any cost arising from the installation and
removal of any items of equipment or machinery provided by the Company as
mutually agreed by both parties.

8.7 COMPETITIVE ACTIVITIES

THE Co-manufacturer undertakes for the duration of this Agreement not to enter
into any licensing, franchising, co-manufacturing or similar agreement or
arrangement in respect of the Products or goods similar to the Products as listed
in Appendix 2 with any third party which, in the opinion of the Company, is
regarded as a competitor of the Product.

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8.8 NO ASSIGNMENT

Neither Party shall have the right to transfer or assign any part of this Agreement
without the written consent of the other Party hereto. The terms and conditions
herein contained shall inure to the benefit of and be binding upon the successors
of either Party only with the written consent of the other Party.

8.9 NO WAIVER

Any waiver by a Party of a breach of any of the terms and conditions of this
Agreement shall not constitute a waiver of any subsequent breach of the same or
any other terms and conditions hereof.

8.10 CONFIDENTIALITY

For each product-group, an individual confidentiality and non-disclosed

agreement will be issued (Appendix 6).

8.11 SEVERABILITY

If any provision of this Agreement is held or declared to be wholly or partially void

or unenforceable for whatever reason, the Parties will make their best endeavors
to agree in writing such amendments as are necessary to give effect to the intent
of the said provision in compliance with the relevant law and/or regulation. In the
absence of such agreement within thirty (30) business days of the Parties
receiving notice of such decision or declaration, the said provision or part thereof
shall be deemed void or unenforceable. In any event, the remaining provisions of
this Agreement shall remain in full force and effect unless either of the Parties
can conclusively demonstrate to the other Party that it would not have entered
into this Agreement without the provision or the part thereof declared or deemed
void or unenforceable.

8.12 NOTICE

Any notice to be given hereunder may be given by sending the same by

registered post or facsimile to the address of the Party specified herein above or
such other address as may be notified by one Party to the other for the purposes
of this Article. Any notice so sent shall, if sent by registered post, be deemed to
have been served at the expiration of five (5) business days after it is posted and,
if sent by facsimile, be deemed to have been served within twenty-four hours
after dispatch of the facsimile. In proving such service it shall be sufficient to
prove that the letter containing the notice or the facsimile was properly addressed
and posted or dispatched, as the case may be.

8.13 EXPENSES

Except as otherwise provided herein, the Company and the Co-manufacturer will
each pay all their respective costs, expenses, taxes or levies incurred in their
performance of and compliance with all conditions contained in this Agreement
and the relevant laws.

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8.14 RELATIONSHIP & LIABILITY FOR EMPLOYEES

The Parties agree that the relationship between them created by this Agreement
is one of client and independent contractor and that no partnership, joint venture
or agency is created.

No employee, servant or agent of the Company shall be regarded as an Co-

manufacturer shall be regarded as an employee of the Company. The Co-
manufacturer shall be solely responsible to and for its employees in respect of
wages and/or legal benefits, damages, losses costs expenses or claims made by
any of the Co-manufacturers employees (whether or not arising in connection
with the Services) and shall indemnify and hold harmless the Company against
any claim in connection therewith.

8.15 PROPER LAW

This Agreement shall be governed by the laws of the Republic of Indonesia.

8.16 DISPUTES

All disputes and differences (hereinafter referred to as “Disputes”) which may

arise out of or in connection with respect to this Agreement shall be settled as far
as possible by negotiations conducted in the spirit of mutual co-operation and
good faith between both parties.

If the parties can not be settled amicably between them shall be submitted to the
court and both parties choose Registrar Office of South Jakarta District Court.

IN WITNESS WHEREOF these presents have been executed by duly authorized officers
of the Parties hereto as of the date first above written.

PT NESTLE INDONESIA, PT ULTRA JAYA MILK INDUSTRY,

S.A. ISSENMANN SABANA PRAWIRAWIDJAJA

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