FRANCHISE AGREEMENT

KNOW ALL MEN BY THESE PRESENTS:

This Agreement made and entered into by and between:

KURYENTE MULTI-SALES CORPORATION, a domestic corporation

duly organized and existing under the laws of the Philippines, with principal office
at 55 Damar Loop, Damar Village, Quezon City, represented in this act by its
President, Marcelino Jo, hereinafter referred to as the "FRANCHISOR"

- and -

______________, a domestic corporation duly organized and existing

under the laws of the Philippines, with principal office at
___________________________________________________________,
represented in this act by its _________, ____________, hereinafter referred to as
the "FRANCHISEE
"FRANCHISEE". ".

[___________________, of legal age, Filipino, single/married to

_____________________, with residential and postal address at
______________________________________, hereinafter referred to as the
"FRANCHISEE".]

WITNESSETH: that

FRANCHISOR is engaged in the business of promoting, marketing, selling and distributing

electrical products, equipment, and appliances under the businessname and tradename
"KURYENTE" and franchises its services and business format to qualified franchisees.

FRANCHISEE has offered to operate a unit under FRANCHISOR's businessname/

tradename and business format and the latter has accepted and agreed to franchise its services and
business format to the FRANCHISEE.

NOW THEREFORE, for and in consideration of the foregoing premises and the stipulations
hereinafter appearing, the parties have agreed under the following terms and conditions:

ACKNOWLEDGEMENTS

1.1. FRANCHISOR is the exclusive owner of the following intellectual property: the
businessname and tradename "KURYENTE", the mark "KURYENTE" and device, the slogans:
"Your one-stop electrical shop", "Ang electrical shop ng bayan", the business format/tradedress of
the KURYENTE stores, and all the proprietary and confidential information used and involved in
FRANCHISOR's business.

1.2. The KURYENTE stores and shops operate under FRANCHISOR's confidential
and proprietary information, trade secrets, distinctive image, designs, business format, methods,
procedures, specifications, all of which may be further developed or otherwise modified by
FRANCHISOR from time to time.
 1.3. Due to the special and unique nature of FRANCHISOR's confidential information,
businessname, trademarks, tradedress, operations manual, training manuals and other intellectual
property, FRANCHISEE acknowledges that FRANCHISOR shall be entitled to immediate equitable
remedies including, but not, limited to, restraining orders and/or injunctive relief and damages in the
event of any violation by the FRANCHISEE of FRANCHISOR's intellectual property rights.

1.4. FRANCHISEE acknowledges that it has received all pertinent information in order
to make an informed decision concerning the business contemplated in this Agreement.
FRANCHISEE further acknowledges that it has read this Agreement and understands and accepts
the provisions of this Agreement as being reasonably necessary to maintain FRANCHISOR's high
standards of quality and service and the uniformity of those standards at the franchise unit. In order
to protect and preserve the goodwill of FRANCHISOR's system and marks, FRANCHISOR
expressly disclaims the making of, and FRANCHISEE acknowledges that it has not received or
relied upon any representations of revenue, profits or success of the business venture contemplated
by this Agreement.

II

GRANT OF FRANCHISE

2.1. FRANCHISEE has applied for a franchise to own and operate a KURYENTE store
at _______________________ and FRANCHISOR grants to FRANCHISEE a license to use,
during the term and on the conditions set forth in this Agreement, the businessname, tradenames,
trademarks, slogans, business format, systems and procedures associated with FRANCHISOR's
name and franchise system, from the said premises.

2.2. The license granted to FRANCHISEE by this Agreement shall include the right to
use FRANCHISOR's complete system for the marketing of electrical equipment and products
supplied by FRANCHISOR and marketed under the KURYENTE businessname/ tradename and
business format as it presently exists and as it may be supplemented and modified during the term of
this Agreement.

2.3. FRANCHISOR's system shall include, but not be limited to FRANCHISOR's

businessname, tradename, trademarks, and service marks: copyrighted marks and materials:
distinctive architecture and design of the unit; interior decoration and layout of the unit; developed
operating procedures as published in FRANCHISOR's standard operating procedures manual;
advertising methods; and accounting systems.

This system is and shall be deemed to be the exclusive property of FRANCHISOR, and
FRANCHISEE acknowledges that ___ [his or her or its] use of such system is a temporary use
under license of a system in which FRANCHISOR maintains and reserves an exclusive proprietary
right.

2.4. FRANCHISEE shall clearly identify the franchise unit under the tradename
KURYENTE and FRANCHISOR's own products sold under and pursuant to this Agreement as
KURYENTE products, except those distributed by the FRANCHISOR for third party-suppliers.
FRANCHISEE's name shall not be used in connection with the operation of the franchise unit
except as follows:

a. FRANCHISEE may include in any local advertising placed by _____[him or her or

it] the line: "____[name of franchisee], your local KURYENTE franchise operator";

b. A sign placed near the cash register, to be provided by FRANCHISOR, and to bear
the inscription, "This KURYENTE store is owned and operated by _________ [name of
franchisee] under franchise from KURYENTE MULTI-SALES CORPORATION".
 2.5. FRANCHISEE shall be free to incorporate __ [his or her] interest in this Agreement
at any time, provided that the corporation formed executes with FRANCHISOR all agreements then
required by FRANCHISOR of new corporate franchisees. FRANCHISEE understands and agrees
that such required agreements will include the requirements that FRANCHISEE execute a personal
guarantee and covenant to personally supervise the operation of the franchise unit.

III

FRANCHISE STRUCTURE

3.1. FRANCHISEE shall construct a structure conforming to FRANCHISOR's standard

retail outlet plan and shall take possession, equip, and furnish the structure in accordance with
FRANCHISOR's standard specifications and open the unit for business within ____ days after
execution of this Agreement at ______________________________.

3.2. Any modifications or revisions of the franchise unit/structure shall require the prior
written approval of FRANCHISOR.

3.3. FRANCHISEE shall operate the franchise unit only at the location specified in
paragraph 3.1 hereof. FRANCHISOR shall grant permission for relocation of the franchise unit in
the event that the lease thereon expires or is terminated for reasons not attributable to the
FRANCHISEE, or the franchise unit is destroyed by fire/calamity or otherwise rendered unusable.
Relocation of the franchise unit to another site may also be agreed upon in writing by the parties.
All expenses arising from such relocation shall be fore FRANCHISEE's account.

3.4. FRANCHISOR shall assist the FRANCHISEE in analyzing the feasibility and
appropriateness of FRANCHISEE's proposed area for relocation . However, any assistance rendered
by the FRANCHISOR in this regard shall not be construed as a guarantee by the FRANCHISOR of
the franchise unit's success in the proposed area.

3.5. A legal description of the franchised premises, together with a statement of the
holder of record title to the premises, and of the interest of FRANCHISEE in such property, whether
as lessee or otherwise, is set forth in a separate schedule attached to this Agreement. If
FRANCHISEE is not the owner of and occupies the premises under a lease or similar arrangement,
FRANCHISEE shall furnish a copy of any lease contract covering the premises to FRANCHISOR.
Any act of the FRANCHISEE constituting default in its lease arrangement over the franchise unit
shall constitute default on the part of the FRANCHISEE under this Agreement.

3.6. FRANCHISOR shall supply a qualified training supervisor. The training supervisor
shall be assigned ___ days prior to opening of FRANCHISEE's unit and shall continue to personally
instruct and supervise FRANCHISEE for __ days after opening of unit.

3.7. FRANCHISEE's employees shall at all times wear uniforms prescribed by

FRANCHISOR in its Manual.

3.8. FRANCHISEE shall be fully responsible for the operation of the franchise unit.
The franchise unit shall at all times be under the direct, hands-on supervision of FRANCHISEE or a
full-time manager specially trained for this purpose. Even, if the FRANCHISEE employs a full-
time manager, FRANCHISEE agrees to remain actively involved in supervising the operations of
the franchise unit based on the procedure and instructions in FRANCHISOR's Manual. If
FRANCHISEE operates more than one (1) franchise unit, the FRANCHISEE shall employ at least
one (1) full-time manager. FRANCHISEE shall keep FRANCHISOR informed at all times of the
identity of the manager(s) of the franchise unit. All additional or new employees shall be required to
undergo training from and as scheduled by FRANCHISOR. All expenses incurred for the training
of FRANCHISEE's employees shall be for FRANCHISEE's account.
 3.9. FRANCHISEE shall not install, add or maintain on the premises of the franchised
unit any other business/machines/devices without the written approval of the FRANCHISOR.

3.10. Both parties shall have their respective keys to the franchise unit and the
FRANCHISOR may visit the franchise unit during reasonable hours.

IV

MUTUAL OBLIGATIONS ON THE FRANCHISE STRUCTURE

4.1. As soon as practicable after the effective date of this Agreement, and prior to the
beginning of construction of the franchise structure, it is agreed as follows:

(a) FRANCHISOR shall assist FRANCHISEE in obtaining a satisfactory site for

construction of the franchise structure. Such assistance shall not obligate FRANCHISOR to
actually obtain the site.

(b) FRANCHISOR shall, at no additional expense to the FRANCHISEE, perform or cause

to be performed by a qualified expert, a detailed feasibility study of the site. If
FRANCHISEE has already obtained a feasibility study from an independent and qualified
expert, FRANCHISOR shall perform a detailed analysis of such study, and if such study is
deemed to be inadequate in whole or in part, FRANCHISOR shall perform, or cause to be
performed, such additional feasibility studies as FRANCHISOR shall determine to be
necessary and appropriate subject to the payment of a reasonable fee.

4.2. FRANCHISOR agrees to review the final plans and specifications pertaining to the
construction of the franchise structure prior to the beginning of such construction.

4.3. FRANCHISEE understands and agrees that regardless of anything provided in this
section, there shall be no liability on the part of FRANCHISOR to FRANCHISEE or
any subsequent franchise approved by the FRANCHISOR or any present or future
owner of the premises or any other person because of FRANCHISOR's approval of the
plans and specifications of the franchise structure.
4.1.
4.4. FRANCHISEE shall, pursuant to plans and specifications previously approved by
FRANCHISOR, begin construction of the franchise structure within ____ months from
the effective date of this Agreement and shall fully complete the franchise structure
within a reasonable time after construction of such structure has begun, provided that
FRANCHISEE is not prevented from beginning such construction or completing the
franchise structure within such reasonable time by the occurrence of a war, strike,
lockout, governmental regulation, fire, Act of God, or other force majeure directly
affecting FRANCHISEE's ability to perform under this section.

4.5. FRANCHISEE agrees to commence operation of the franchise business no later

than __ days following completion of the franchise structure but, unless FRANCHISOR otherwise
agrees in writing, no sooner than such structure shall have been completed. Prior to commencing
operations, FRANCHISEE shall give FRANCHISOR ___ days' written notice of ___ [his or her or
its] intention to so commence operations.

4.6. Actual expenses incurred (e.g. transportation, lodging, meals, etc.) by FRANCHISOR's
staff in over-seeing the site development and construction of a provincial franchise unit, from the
pre-construction stage up to the opening of the unit shall be for the account of he FRANCHISEE.

FRANCHISE FEE
 5.1. In consideration of the issuance and continuance of this franchise, FRANCHISEE
agrees to make the following payments to FRANCHISOR:

a. FIVE HUNDRED THOUSAND PESOS (P

(P 500,000.00), as franchise fee.

b. SIX HUNDRED THOUSAND PESOS (P

(P600,000.00) for the following optional
requirements:

Construction (franchise unit area of 50-60 sqm) 250,000.00

POS Machine 50,000.00
Signages/Boards 30,000.00
Telephone Lines/Fax machine 20,000.00
Aircon/Ventilation 40,000.00
Initial Rental Agreement/reservation fee* 150,000.00
Modules 50,000.00
Office Supplies/Invoices/Official Receipts, etc. 10,000.00
---------------

P 600,000.00

(*not applicable if the FRANCHISEE owns the area where the franchise unit is located)

The amount of "initial rental/reservation fee" mentioned above may vary and is subject to
the actual costs prescribed by the lessor of the premises constituting the franchise unit.

5.2. The franchise fee and the optional requirements mentioned in the preceeding
paragraphs shall be paid by the FRANCHISEE to the FRANCHISOR in accordance with the
payment scheme which is integrally attached hereto as Annex "A".

5.3 FRANCHISOR shall deliver to the franchise unit initial stocks worth ONE
MILLION FIVE HUNDRED THOUSAND PESOS (P (P1,500,000.00) within _____ days from the
execution of this Agreement and provided that the construction of the franchise unit has been
completed as verified by FRANCHISOR. FRANCHISEE shall pay to FRANCHISOR the amount
of SEVEN HUNDRED FIFTY THOUSAND PESOS (P (P750,000.00) upon delivery of the initial
stocks and the balance of SEVEN HUNDRED FIFTY THOUSAND PESOS (P (P750,000.00) within
30 days from the opening of the franchise unit plus five percent (5%) service charge thereon.

5.4. Thereafter, so long as this Agreement is in effect, FRANCHISEE shall pay the
actual costs of stocks ordered plus a service fee of five percent (5%) on such purchases to
FRANCHISOR within sixty (60) days from receipt of the ordered stocks.

5.5. FRANCHISEE shall source all of its stocks and supplies exclusively from
FRANCHISOR.

5.6. All payments to FRANCHISOR shall be made at the address designated in this
Agreement. All payments made pursuant to paragraph 4.3 hereof shall be accompanied by a
statement of gross sales on stocks sourced from another supplier and certified to be correct by
FRANCHISEE.

5.7. The parties may agree on a different manner for the payment of the amounts due
hereunder, e.g. on installment basis; profit sharing scheme; different payment scheme on the the
amounts due under Articles 5.2, 5.3 and 5.4 hereof, provided such agreement is entered into by the
parties in writing.

VI

FRANCHISEE's OBLIGATIONS
 6.1. FRANCHISEE shall comply with all applicable government laws, ordinances and
regulations.

6.2. FRANCHISEE shall discharge all applicable tax liabilities arising from its operation
and maintenance of the franchise unit including but not limited to payment of any income, sales, or
real property taxes. Likewise FRANCHISEE shall secure and maintain insurance policies
acceptable to FRANCHISOR to cover workers' compensation as required by applicable law;
occupational hazards; consumer protection; unemployment and such other areas as may be agreed
upon by the parties in writing.

6.3. FRANCHISEE covenants and agrees to observe strictly the rules of operation as
now established by FRANCHISOR, or as revised or amended by FRANCHISOR from time to time
after the effective date of this Agreement, the right of revision and amendment being specifically
reserved by FRANCHISOR.

6.4. FRANCHISEE will comply with existing regulations of FRANCHISOR as from

time to time revised and supplemented by FRANCHISOR, with respect to operating procedures and
standards and requirements for furnishing, equipment, and facilities of franchise units generally.
Such regulations may be set forth in an operating manual to be supplied by FRANCHISOR.

6.5. FRANCHISEE covenants and agrees to permit regular inspection of all

accommodations, facilities, and procedures by accredited inspectors of FRANCHISOR, for
compliance with this Agreement and to guarantee lodging to any such inspector when on official
duty for such time as may be reasonably necessary.

6.6. FRANCHISEE shall, at ___[his, her or it]'s expense, attend FRANCHISOR's store
management training at a place to be designated by FRANCHISOR prior to the opening of
FRANCHISEE's business. If, during the term of this Agreement, FRANCHISEE conducts the
business with a manager other than himself/ herself, FRANCHISEE shall, at FRANCHISEE's
expense, send such manager through the same training program.

6.7. FRANCHISEE shall train and instruct each person employed in the operation of
FRANCHISEE's business (other than those instructed by FRANCHISOR) in the methods and
techniques developed by FRANCHISOR. Such training and instruction shall be based upon and
given in accordance with FRANCHISOR's training manuals, and shall be provided prior to
participation by such employee in FRANCHISEE's business.

6.8. Subject to applicable municipal ordinances or statutes, FRANCHISEE shall have

erected and maintained at the premises of the franchise unit a standard authorized service sign in a
suitable location and such other signs as are necessary to advertise properly FRANCHISEE's
operations approved by FRANCHISOR

6.9. FRANCHISEE specifically agrees to protect, indemnify, and save FRANCHISOR

harmless from and against any loss, damage, liability or expense, including attorneys' fees, because
of any damage to person or property caused or alleged to have been caused by FRANCHISEE,
____[his or her or its] agents, employees, guests, or any other persons in connection with the
operation of the franchise unit.

6.10. FRANCHISEE will keep in utmost confidence and shall not divulge any business
information, whether written or oral, received from FRANCHISOR or from any meetings of
FRANCHISOR's other franchisees, nor use such information in the FRANCHISEE's business, at
any time during or after the term of this Agreement. Such information may include, but is not
limited to, operating and training manuals, accounting system and records, promotional materials or
plans, expansion plans, new products, marketing information costs or other financial data, or
development of packaging procedures.

6.11. During the term of this Agreement, FRANCHISEE shall not conduct or operate,
directly or indirectly, or be employed by or associated with any business which is in any way
competitive with FRANCHISOR's business. FRANCHISEE shall not any time, directly of
indirectly, furnish any information as to FRANCHISOR's methods of operation, interviewing,
advertising publicity, promotion ideas, or any other information relative to FRANCHISOR's
business, or to any other business licensed, owned, or managed by FRANCHISOR or any subsidiary
of FRANCHISOR to anyone except FRANCHISOR.

6.12 In the sale of electrical products in the franchise unit, FRANCHISEE shall abide by
FRANCHISOR's price lists as indicated in Article 8.7 hereof.

VII

INSURANCE

7.1. FRANCHISEE shall obtain and maintain at its expense during the term of this
Agreement, necessary insurance policy/ies as FRANCHISOR may reasonably require to protect
FRANCHISEE and FRANCHISOR, and their respective officers, directors, employees,
representative and agents against any loss, liability, personal injury, death or property damage or
expenses whatsoever arising from the operation of the franchise unit.

7.2. Specifically, FRANCHISEE shall secure and maintain from a reputable insurance
company duly licensed in the Philippines, taking into consideration the standards and specifications
set forth in the Manual or as otherwise required by the FRANCHISOR in writing, an Extended Fire
Insurance on the franchise unit and stocks therein in the amount of P
____________________________________.

FRANCHISOR may require the FRANCHISEE to increase the amount of coverage of the
the insurance policies required herein from time to time.

7.3. Within ninety (90) days from the signing of this Agreement, but in no event later
than the date the Franchisee acquires an interest in the franchise unit, the corresponding certificates
of insurance showing compliance with the foregoing requirements and payment of premiums shall
be furnished by FRANCHISEE to FRANCHISOR for approval. FRANCHISEE shall not cancel or
alter the insurance policies without at least thirty (30) days prior written notice to FRANCHISOR.

7.4 In the event that FRANCHISEE fails, for any reason, to obtain and maintain any of
the insurance coverages required , FRANCHISOR may obtain such insurance coverage for the
FRANCHISEE's account and charge the FRANCHISEE such reasonable expenses incurred by
FRANCHISOR in connection with such procurement and which charges shall be payable by
FRANCHISEE immediately upon notice.

7.5 FRANCHISEE's obligations under this section shall not be diminished by reason
of any insurance directly secured and maintained by FRANCHISOR .

VIII
FRANCHISOR'S OBLIGATIONS

8.1. FRANCHISOR shall do all acts necessary to protect the tradename and
businessname "KURYENTE" from unauthorized use and infringement of any kind.

8.2. FRANCHISOR shall provide to FRANCHISEE for exclusive use of the

FRANCHISEE and ___ [his or her or its] employees, one copy of FRANCHISOR's Operating
Manual (the "Manual") and such other training manuals that FRANCHISOR deems sufficient to
commence operations. Additional manuals will be supplied at FRANCHISOR's discretion upon
written request by FRANCHISEE and payment of a printing and/or handling charge. All manuals
 shall remain to be the property of FRANCHISOR, and FRANCHISEE shall treat them as
confidential and shall not disclose the contents of such manuals to unauthorized persons.

8.3 FRANCHISEE acknowledges that the Manual is and shall remain to be the
exclusive property of the FRANCHISOR. FRANCHISEE shall return the Manual to the
FRANCHISOR not later than three (3) days from the expiration or termination of this Agreement.
At no time shall FRANCHISEE, its employees, representatives or agents make copies or
reproduction of any part of the Manual.

8.4. FRANCHISOR shall continue to improve and amend the Manual and such training
manuals necessary in FRANCHISOR's business. which is hereby incorporated by reference in and
made a part of this Agreement. FRANCHISOR shall conduct research and development of new
procedures and techniques, products and materials and other activities to enhance to its systems.

8.5. FRANCHISOR shall furnish to FRANCHISEE, at no additional expense, a

Support Training Group ("STG") for the purpose of assisting in the opening of the franchise unit for
30 days from the soft opening of the franchised unit. During this period, the STG shall assist the
FRANCHISEE and its employees in performing standard procedures and techniques essential to the
operation of the franchise unit. FRANCHISEE is required to successfully complete the Support
Opening Training to be provided by the STG. FRANCHISEE may request training of additional or
new employees and FRANCHISOR shall provide such training if is deemed necessary, feasible and
appropriate. The STG shall likewise assist in the grand opening of franchise unit. All expenses
incurred for the assistance and training provided by the STG beyond a 30-day period shall be for the
account of the FRANCHISEE.

8.6. FRANCHISOR shall secure and maintain the licenses and permits necessary to
operate the franchise unit, and all expenses incurred in securing and the maintenance thereof shall
be for the FRANCHISEE 's account, subject to the provisions of Article 6.1 and 6.2. hereof.

8.7. At the start of the operations of the franchise unit, FRANCHISOR shall provide to
the FRANCHISEE the following:

a. A price list for all electrical products offered for sale by the franchise unit
which price list is based on the analysis of the costs of such products and price of
competitive products;

b. Regulations on maintaining quality standards of products;

c. Mechanics for the coordination of product distribution;

d. Hands-on-assistance on Start-up and Merchandise Lay-out Support;

e. Comprehensive Training Program;

f. Operations assistance and guidance with respect to:

i. I. Proper utilization of procedures by the franchise unit regarding the service

and sale of all items and materials approved by the FRANCHISOR;

ii. Negotiation of group rates/discounts for wholesale

purchases of products and materials as FRANCHISOR, in its sole
discretion, deems necessary and appropriate;

iii. Additional products and services authorized for sale.

 IX

ADVERTISING

9.1. FRANCHISOR shall provide to the FRANCHISEE advertising strategies and

promotional programs and materials. All costs for additional promotions not provided by
FRANCHISOR shall be for the account of the FRANCHISEE.

9.2. FRANCHISEE acknowledges the value of standardizing the advertising and

promotional strategies for the enhancement the franchise's image. To this end, FRANCHISEE shall
secure FRANCHISOR's prior approval on all promotional materials and advertising to be used by
FRANCHISEE including, but not limited to, newspapers, radio, television advertising, specialty
and novelty items, leaflets, brochures, and signs.

9.3. FRANCHISEE shall not use FRANCHISOR's intellectual property or other

proprietary materials in its advertisements and promotion of the franchise unit without
FRANCHISOR's prior approval and appropriately indicating therein FRANCHISOR's ownership
thereof.

9.4 Whenever necessary, FRANCHISEE shall participate and contribute a proportional

share in the expenses in all special nationwide advertising and promotions.

ACCOUNTING SYSTEM AND RECORDS

10.1. FRANCHISEE shall use and keep up to date a satisfactory uniform accounting
system of a type designated by FRANCHISOR and will furnish to FRANCHISOR, by the ___ of
each month, a complete and accurate financial and operating statement, with supporting data,
covering the preceding month's operations and showing the true and actual condition of
FRANCHISEE's business. To this end, FRANCHISEE will maintain such system in accordance
with the administrative, bookkeeping, accounting inventory control, supervisory and general
operating procedures for the effective operation of the franchised unit prescribed by FRANCHISOR.

10.2. FRANCHISEE shall not furnish to any third party any financial statement submitted
to FRANCHISOR under and pursuant to this agreement, unless authorized by FRANCHISOR or
required to do so by law or unless they are pertinent to judicial proceedings.

10.3. FRANCHISEE shall file with FRANCHISOR within __ days after the close of each quarter
of the calendar year or fiscal year of FRANCHISEE, a financial statement showing operating results
and monthly gross sales and gross revenues for such quarterly period.

10.4. FRANCHISEE shall file with FRANCHISOR within ___ days after the close of each such
year a similar statement certified by a certified public accountant showing a balance sheet and the
results of operations for the year, including monthly gross sales and revenues.

10.5. FRANCHISEE shall file with FRANCHISOR any and all such other reports as
FRANCHISOR may, from time to time, require, such reports to be in the form prescribed by
FRANCHISOR.

10.6. FRANCHISOR shall have the right to inspect the books and records of the FRANCHISEE
at all reasonable times.
 XI

TERM AND RENEWAL

11.1. The term of this franchise shall be eight (8) years from the effective date of this Agreement
unless sooner terminated by FRANCHISOR as provided below in this Agreement. Provided
FRANCHISEE is not in default under any provision of this Agreement, FRANCHISEE may extend
such term for an additional period of __ years by giving to FRANCHISOR at least ninety (90) days
but not more than 120 days written notice of its election to do so prior to the expiration of this
Agreement, provided:

a. FRANCHISEE has not committed any act constituting default under this Agreement;

b. Renewal fee of 250,000.00 plus value added tax is paid by the FRANCHISEE to the
FRANCHISOR;

c. FRANCHISEE remains in possession of the franchise unit for the duration of the renewal
term and has installed in the franchise unit the requirements prescribed by the
FRANCHISOR for renewal of the franchise;

d. FRANCHISEE complies with the Article 3.3 hereof in the event that the franchise
unit is relocated.

11.2. In the event that this Agreement is not renewed by the parties upon expiration of the term
thereof, FRANCHISEE shall have thirty (30) days from such expiration within which to sell any
remaining stocks/products supplied by FRANCHISOR or to return all remaining stocks to
FRANCHISOR in which case FRANCHISEE shall be reimbursed fifty percent (50%) of whatever
amounts it has paid for such returned stocks/products.

11.3. FRANCHISEE acknowledges that the name "KURYENTE", the business reputation
associated with such name, the methods and techniques employed by FRANCHISOR, the training
and instructions to be provided under and pursuant to this Agreement, the knowledge of the services
and methods of FRANCHISOR, and the opportunities, associations, and experience established and
acquired by FRANCHISEE under and pursuant to this Agreement and as a member of the franchise
system, are of considerable value. In consideration thereof, in the event of expiration or termination
of this Agreement for any reason whatsoever, FRANCHISEE, or any partner if FRANCHISEE is a
partnership nor any shareholder if FRANCHISEE is a corporation, shall not after such termination
engage for a period of two (2) years, either directly or indirectly, as principal or employee, alone or
in association with others, in a similar or competitive business to that licensed and established under
and pursuant to this Agreement.

XII

DEFAULT

12.1. The occurrence of any of the following shall be deemed a default, and FRANCHISOR shall
have the right to terminate this Agreement if

a. FRANCHISEE fails to comply with any of the terms of this Agreement;

b. FRANCHISEE's business remains in an "inoperative state" for any period of sixty

(60) consecutive days;
 c. FRANCHISEE fails to make any payment within __ days following the date when
such payment is due in accordance with the terms of this Agreement; or

d. FRANCHISEE fails to observe or perform any covenant set forth in this Agreement.

e. FRANCHISEE has made any material misrepresentation or omission in its

application for the franchise.

f. FRANCHISEE is convicted of a crime that is likely to adversely affect the

reputation of FRANCHISEE or the franchise unit.

g. FRANCHISEE fails to procure or maintain insurance coverage as provided in

Article VII of this Agreement.

12.2. In the event of default as defined above, FRANCHISOR may terminate this Agreement on
30 days' written notice to FRANCHISEE, unless the default is cured within such 30 -day notice
period.

12.3. FRANCHISEE shall be deemed to be in default under this Agreement, and all rights granted
to FRANCHISEE under and pursuant to this Agreement shall terminate immediately, if

a. FRANCHISEE becomes insolvent;

b. FRANCHISEE files a petition under any bankruptcy, reorganization, insolvency, or

moratorium law, or any law for the relief of, or relating to, debtors;

c. Any involuntary petition under any bankruptcy statute is filed against

FRANCHISEE, or any receiver or trustee is appointed to take possession of the personal and
real properties of FRANCHISEE, unless such petition or appointment is set aside or
withdrawn or ceases to be in effect within 30 days of the date of such filing or appointment;
or

d. The real or personal properties of FRANCHISEE are sold or levied upon by any
sheriff or court appointed personnel.

XIII

TERMINATION

13.1. Whenever a condition constituting default exists under Article X hereof, and
FRANCHISOR elects to terminate this Agreement, FRANCHISOR shall have the right, summarily
and without notice, to enter FRANCHISEE's business premises to take custody of all unpaid
stocks/products delivered to FRANCHISEE and to accomplish any acts that FRANCHISOR has
authority or duty to perform pursuant to this Agreement.

13.2. Upon termination of this Agreement, whether by lapse of time, default, or other cause,
FRANCHISEE shall:

a. Promptly discontinue all use of the mark "KURYENTE" and all of

FRANCHISOR's other businessnames, tradenames, trademarks, trade secrets, business
format, procedures and systems and shall remove from _____[his or her or its] own
franchise unit all signs, decor, and decoration characteristic of FRANCHISOR's operations,
and shall not thereafter operate or do business under any name or in any manner that might
tend to give the general public the impression that ______[he or she or it] is dispensing,
selling or serving any of FRANCHISOR's products, or that ___ [he or she or it] is operating
a business similar to a KURYENTE outlet/store.
 b. Immediately return to FRANCHISOR all instructions, operations manuals,
applications, books, forms and materials, and other documents bearing FRANCHISOR's
businessname/tradename, trademarks, slogans or any other marks supplied to
FRANCHISEE by FRANCHISOR, and turn over to FRANCHISOR any and all other
books, forms, customer lists, materials, data, and records, including financial records,
pertaining to FRANCHISEE's business under this Agreement. in this regard,
FRANCHISOR is hereby authorized and empowered peaceably to take possession of the
above-stated documents.

c. Immediately pay to the FRANCHISOR any remaining balance on the franchise

fee.

d. Turn over to FRANCHISOR all unpaid stocks/products.

13.3. In connection with the preceding paragraph, FRANCHISEE shall have the option of selling
back to FRANCHISOR any stocks/products supplied by FRANCHISOR and already paid for at the
time of termination for the price of fifty percent (50%) of the cost thereof.

13.4. The expiration or termination of this Agreement shall not relieve FRANCHISEE of any of
____ [his or her or its] obligations to FRANCHISOR existing at the time of expiration or
termination.

13.5. FRANCHISEE hereby appoints FRANCHISOR or any of FRANCHISOR's officers as

_____ [his or her or its] attorney-in-fact to execute all instruments and to do all things necessary for
accomplishing those acts required of FRANCHISEE under this section in the event that
FRANCHISEE fails to perform such acts immediately on termination of this Agreement.

XIV

DISPUTE RESOLUTION

14.1. This Agreement is based on mutual trust and confidence. Accordingly, the parties
shall in good faith attempt to settle amicably and by mutual agreement any disputes in
connection with or arising out of this Agreement.

14.2. All disputes or differences arising between the parties in respect of this Agreement, or the
breach, termination or inabilitity thereof, which cannot be resolved by the parties within a period of
thirty (30) days, shall be finally settled by arbitration in accordance with the rules of and under the
auspices of the Philippine Dispute Resolution Center, Inc.

14.3. The number of arbitrators shall be three (3). Within ten (10) days after the initiation of
arbitration proceedings, the parties shall each select one (1) arbitrator. The decision in writing of at
least two (2) of the three (3) arbitrators shall be final and binding on the parties.

14.4. The arbitration hearing shall be conducted in the English Language and all documents shall
be submitted in English.

14.5. The arbitration hearing shall take place in Quezon City unless the parties agree in writing to
a different location.

14.6. The award rendered by arbitration shall be final and binding upon the parties hereto, who
expressly waive all and any rights of appeal from all and any awards.

14.7. All costs and fees associated with the Arbitration shall be paid by the losing party, including
reasonable and valid legal and witness expenses of the winning party.
14.8. This Agreement shall be governed and interpreted in accordance with Philippine laws and
the exclusive venue of any action to be instituted by any party hereto including enforcement of any
arbitral award shall be the proper courts of Quezon City.

XV

MISCELLANEOUS PROVISIONS

15.1. This Agreement contains the entire agreement between the Parties with respect to
distributorship of FRANCHISOR Products and shall be binding upon and inure to the benefit of the
successors of the Parties. Neither this Agreement, nor its rights or obligations shall be assignable or
transferable by FRANCHISEE, in whole or in part, except with the written consent of
FRANCHISOR.

15.2. No amendments changes, or additions to this Agreement shall be effective or binding on

either party hereto unless reduced to writing and executed by the respective duly authorized
representatives of each of the parties hereto.

15.3. The rights of any of the parties shall not be prejudiced or restricted by any indulgence or
forbearance extended to the other parties and no waiver by any party in respect of any breach shall
operate as a waiver in respect of any subsequent breach.

15.4. The relationship of the parties under and in relation to this Agreement shall be limited to the
matters herein contained. Nothing herein shall constitute a partnership or agency or employment
between or among the parties, nor shall anything herein be considered or interpreted as constituting
any party as the general agent or employee of any other party.

Neither party to this agreement will have authority to act for the other in any manner to create
obligations or debts binding on the other, and either party will be responsible for any obligations or
expenses whatsoever of the other.
Parties in writing.

15.5. A party shall not be liable for any delay in or failure of performance of its obligations
hereunder if such delay or failure arises from or in consequence of force majeure. The term "Force
Majeure" shall mean acts of God, fire, storm, earthquake or seismic disturbances, acts of war
(whether declared or not), acts of public enemies of the Philippines, sabotage, rebellion, revolution,
civil commotion, strikes, lockouts, boycotts or other industrial or labor disputes, acts of
Government, or any other cause or causes, whether similar or dissimilar to the foregoing, beyond the
reasonable control of the parties.

Any party claiming the benefit of this provision shall promptly give notice thereof to the other party
including sufficient information as to the cause. The parties shall consult with each other with a
view to suspending or amending this Agreement on account of force majeure.

15.6. If any provision of this Agreement is found to be invalid or unenforceable in any

jurisdiction, then, to the fullest extent permitted by law, the other provisions of this Agreement shall
remain in full force and effect in such jurisdiction. The invalidity or unenforceability of any
provision of this Agreement in any jurisdiction shall not affect the validity or enforceability of such
provision in any other jurisdiction.

15.7. This Agreement shall be binding on the respective successors-in-interest and permitted
nominees and representatives of the parties hereto.

15.8. The rights of FRANCHISEE under this Agreement are personal to FRANCHISEE and may
not be assigned or transferred to any other person, firm corporation, or other entity without the prior,
express, and written consent of FRANCHISOR.
15.9. Except as otherwise provided in this Agreement, all notices, statements, demands, or other
communications and documents (hereafter, the "Communications") required or permitted to be
given, served or delivered hereunder shall be in writing and shall be sent or delivered by hand,
telefax, telex, cable electronic mail or registered mail, with receipt requested. Any such
Communications, acceptance or approval so given shall become effective -

(a) If delivered by hand, upon delivery;

(b) If sent by telex, the correct answer back having been received; and

(c) If sent by facsimile machine transmission, at the time of transmission, subject to its having
in fact been received in legible form.

(d) If sent through electronic mail, upon confirmation of receipt from the other party.

Any Communications hereunder shall be addressed as follows:

To KURYENTE: KURYENTE MULTI-SALES CORPORATION

55 Damar Loop, Damar Village, Quezon City

Attention: Mr. Marcelino Jo

Fax No.: 365-07-08
E-Mail:

To ___________: _______________________________________
_______________________________________

Attention:
Fax No.:
E-Mail:

XIV

EFFECTIVITY

This Agreement shall become effective upon signing hereof by the representatives of both parties.

IN WITNESS WHEREOF, the parties signed this Agreement on _______________ at

______________________.

KURYENTE MULTI-SALES
CORPORATION _____________________

By: By:

MARCELINO JO _______________________
 ACKNOWLEDGMENT

REPUBLIC OF THE PHILIPPINES)

BEFORE ME, a Notary Public for and in the city of ________, on this ______ day of
______________ 1999 personally appeared the following:

Community Tax
Name Certificate/Passport No. Date/Place Issued

Kuryente Multi-Sales
Corporation
Marcelino Jo
__________________
__________________

known to me and too me known to be the same persons who executed the foregoing Franchise
Agreement and acknowledged to me that the same is their free and voluntary act and deed, as well as
the fee and voluntary act and deed of the Corporation which they respectively represent.

WITNESS MY HAND AND NOTARIAL SEAL on this date and place first above written.

Doc No. ____; NOTARY PUBLIC

Page No. ____;
Book No. ____;
Series of 2000.

F:\DATA\K\AGR\FRANCH4.DOC
HTA\lot\615-5-01