SOP Exhibits

Title:

Deed of Sale with Reservation of Title

SOP Number : TS-ES03

Annex A

DEED OF SALE WITH RESERVATION OF TITLE

KNOW ALL MEN BY THESE PRESENTS:

This Deed of Sale with Reservation of Title, made and executed at the place and date indicated below by and between:

The NATIONAL FOOD AUTHORITY, an agency of the government with principal office and place of business at Matimyas Building, 101 E. Rodriguez Sr. Avenue, Quezon City, duly represented herein by its Regional Director ___________________________, hereinafter referred to as the VENDOR:

- and -

____________________________________________________________________________, a farmer's organization duly organized under SEC/CDA Registration, No. ________________ dated ____________________, with principal office at _________________________________________ represented herein by its _________________________, _________________________________ hereinafter referred to as the VENDEE.

W I T N E S S E T H

WHEREAS, the NFA is tasked with, among others, the development and enhancement of grains post-harvest technology through the introduction of modern grains post-harvest facilities (PHFs);

WHEREAS, the NFA has designed the NFA PHF Assistance Program - II for the purpose of making available grains PHFs to qualified farmer's organizations in the Philippines;

WHEREAS, NFA aims to provide farmer's organizations with locally manufactured/assembled grains PHFs to reduce grains losses and post-harvest cost and to shorten the time period for the various in-farm operations, thereby assisting farmers' organizations in venturing into profitable grains marketing business/es and in increasing the level of farm income and t he living standards of their members;

WHEREAS, the VENDEE is one of the farmers' organizations duly organized and chosen as a beneficiary of the NFA PHF Assistance Program - II, and agreed to buy the PHF/s hereafter described;

NOW, THEREFORE, in consideration of the foregoing premises, the parties herein do hereby agree to enter into this contract as follows:

I. SUBJECT MATTER:

Sale of the following grains PHFs :

( ) Portable Axial-Flow Palay Thresher complete with pneumatic tires and tow bar

Brand : ____________________
Capacity : ____________________
Model : ____________________
Chassis No. : ____________________
Engine Brand : ____________________
Engine Type/Model : ____________________
Engine Serial No. : ____________________

( ) Portable Corn Sheller

Brand : _____________________
Capacity : _____________________
Model : _____________________
Chassis No. : _____________________
Engine Brand : _____________________
Engine Type/Model : _____________________
Engine Serial No. : _____________________

( ) Rice Mill

Brand : _____________________
Capacity : _____________________
Model : _____________________
Chassis No. : _____________________
Engine Brand : _____________________
Engine Type/Model : _____________________
Engine Serial No. : _____________________

( ) Corn Mill

Brand : _____________________
Capacity : _____________________
Model : _____________________
Chassis No. : _____________________
Engine Brand : _____________________
Engine Type/Model : _____________________
Engine Serial No. : _____________________

II PRICE/S

Portable axial - Flow Palay Thresher

______________________ (P _________)
Portable Corn Sheller_____ (P _________)
Rice Mill ______________ (P _________)
Corn Mill ______________(P _________)

III. TERMS OF PAYMENT :

1. a) The VENDEE shall pay the total cost of the ricemill/cornmill in eight (8) years, in sixteen (16) equal semi-annual installments of _______________________________________ (P___________) per installment.

b). The VENDEE shall pay the total cost of the thresher/cornsheller in four (4) years, in eight (8) equal semi-annual installments of (P__________) per installment.

c) Payment of the facilities shall be due every June 30 and December 31. The first due date of amortization shall be not earlier than three (3) months after issuance of the Certificate of Acceptance by the beneficiary VENDEE.

d) Payment schedule shall be per attached Annex "A".

2. Failure to pay the installments as they fall due shall subject the VENDEE to a penalty of (1%) per month or any fraction thereof:

3. Rebate of five percent (5%) of the amortization shall however be granted to the VENDEE if payment is made one month before due date of June 30 or December 31 as the case may be.

4. Parties hereto agree that the VENDEE shall have the option to pay his obligation under this agreement in cash or in the form of palay. Valuation of the palay payment shall be based on the NFA procurement price at the time of delivery. NFA procurement procedures and quality standards shall likewise be applied.

IV. DELIVERY AND ACCEPTANCE OF THE FACILITIES :

Delivery of the PHF/s to the VENDEE's site shall be done by designated supplier/s only after the herein VENDOR and VENDEE have signed this Deed of Sale with Reservation of Title. Upon delivery/installation of the PHF/s the supplier/s shall conduct the test-run of the PHF/s and turn-over to the VENDEE's representative all the standard tools, spare parts and technical manuals of the PHF/s. The supplier shall also conduct a hands-on training on PHF operation/maintenance/trouble shooting for the PHF operators. Only after the VENDEE is satisfied with the test-run and training, shall the VENDEE's representative sign the Certificate of Acceptance of the PHF/s from the supplier/s.

V. RESERVATION OF TITLE :

1. It is hereby agreed and stipulated that ownership of the PHF/s shall remain with the VENDOR until after the PHF/s shall have been fully paid and after the corresponding Certificate of Ownership is issued by the VENDOR in favor of the VENDEE.

2. It is further agreed and stipulated that during the period of amortization, only the use and possession of the PHF/s is deemed conveyed to the VENDEE.

3. For purposes of securing the necessary NFA license/s to engage in the appropriate lines of business/es, the beneficiary FO shall be considered the owner/licensee.

VI. EVENTS OF DEFAULT :

The VENDEE agrees that the VENDOR shall have the right to terminate this Deed of Sale with Reservation of Title and to demand and collect all amounts due and demandable, including penalty already incurred, and to retrieve the PHF/s subject of this contract, without any need for a court action, upon the occurence of any of the following events.

1. Failure to pay two (2) consecutive semi-annual amortization despite repeated notices of delayed payments served by the VENDOR ;

2. Sale and/or transfer of management, possession, control, use, or operation of the PHF/s to third parties;

3. Technical alteration of the PHF/s without any previous written clearance from the VENDOR;

4. Dissolution of the organization or any serious organizational failure or break-up as determined by the VENDOR;

5. Transfer of the PHF/s to another location without written consent of the VENDOR and;

6. Violation of the terms and conditions of this Deed of Sale with Reservation of Title, including but not limited to non-payment of penalty/ies, insurance premium and/or NFA license.

It is agreed that all expenses, incurred in connection with the pulling-out of the PHF/s, including the transporting of the same to the nearest NFA Grains Center/Provincial Office shall be chargeable to the VENDEE.

It is also agreed that all previous payments made on any repossesd PHF/s shall be considered as rental only for the period that the PHF/s was/were with the VENDEE.

It is also agreed that all previous payments made on any repossesed PHF/s shall be considered as rental only for the period that the PHF/s was/were with the VENDEE.

If the condition/s of the PHF/s upon repossession is/are such that its/their actual or market value is less than the total amount of remaining unpaid amortization, the VENDEE shall be required to pay the difference.

It is further agreed that in the event of default, VENDOR shall likewise have the option to effect payment of the obligations of the VENDEE out of whatever funds, securities and properties belonging to the VENDEE which may be in the possession or control of the VENDOR, including the accumulated Cooperative Incentive Fees (CIF).

VII. OTHER CONDITIONS :

1. Immediately upon delivery/installation of PHF/s at its site, the VENDEE shall secure the necessary license/s to engage in the appropriate lines/s of business from the NFA Provincial Office, City/Municipal Mayor's Office and other concerned regulatory offices.

2. The PHF/s shall be operated and maintained by the VENDEE only for the purpose/s applied for, and under no circumstances shall any of its parts, or accessories be used for any other purpose "without prior written consent from VENDOR.

3. The VENDEE shall shoulder all costs for the proper operation and maintenance of the PHF/s.

4. The VENDEE shall, at his own expense, provide a shelter/shed to house the PHF/s in accordance with the minimum requirements of the plans and specifications of the VENDOR.

5. Liability for losses or damages that may be incurred while the PHF/s are in the custody of the VENDEE shall be for the VENDEE'S account.

6. Upon signing of this Deed, the VENDEE shall insure the facility/ies acquired with any insurance company licensed by the Insurance Commission and duly accredited by the NFA, against any loss or damage due to fire, theft, or any other natural calamity, at an amount equivalent to the above full sale value of the PHF/s.

In case the VENDEE fails to renew the insurance within five (5) days from expiration of the insurance, VENDOR may renew the insurance subject to payment by VENDEE of the corresponding premium and other cost of insurance. Failure by the VENDE to pay the premium and other cost of insurance within five (5) days from execution thereof shall entitle VENDOR to collect a penalty of one percent (1%) per month (or a fraction thereof) on the premium and cost of insurance.

The VENDOR has the right to repossess the PHF/s if the VENDEE fails o reimburse the corresponding premium and other costs of insurance to the VENDOR within one (1) month from such expiration date.

7. The VENDOR, through its authorized representative/s, has the right to inspect the PHF/s at any reasonable time without notice to the VENDEE, and to conduct periodic technical and financial audit relative to the PHF/s.

8. No action or inaction on the part of the VENDOR or its authorized representative/s shall be construed as a waiver or novation of this Deed of Sale with Reservation of Title insofar as rights and obligations are concerned, unless such waiver or novation is explicitly made in writing and agreed upon by the parties herein.

9. The VENDEE warrants that its signatory to this Deed has the full capacity and authority to execute this Deed of Sale with Reservation of Title, as well as to bind the cooperative/organization he/she represents.

10. VENDEE undertakes to require its officers and operators to attend trainings on the technical and marketing aspects of the PHF/s to be granted.

VIII. VENUE OF ACTION :

The venue of any legal action arising out of this Deed of Sale with Reservation of Title shall be in any of the competent courts of Quezon City.

IN WITNESS WHEREOF, the parties herein sign this Deed of Sale with Reservation of Title this ____________________ day of ___________________, 19 ______ at ________________________, Philippines.

NATIONAL FOOD AUTHORITY _________________________________
BY : BY :

__________________________________ _________________________________

NFA Regional Director Name and Position of Authorized Representative

CO-SIGNATORY :

_________________________________

SIGNED IN THE PRESENCE OF :

___________________________________ _________________________________
NFA Provincial Manager

A C K N O W L E D G M E N T

REPUBLIC OF THE PHILIPPINES ) S.S.
X_______________________________X

BEFORE ME, a Notary Public for and in __________________________, Philippines, this ______ day _____________________, 19 _____ personally appeared :

NAME RES. CERT. DATE/PLACE TAN
ISSUED

____________________ _______________ ______________ _______________
____________________ _______________ ______________ _______________
____________________ _______________ ______________ _______________
____________________ _______________ ______________ _______________
____________________ _______________ ______________ _______________

both known to me to be the same persons who executed the foregoing Deed of Sale with Reservation of Title consisting of ________ ( ) pages including Annex "A" and this page on which the acknowledgment is written isgned by the parties and their instrumental witnesses on each and every page hereof and they acknowledged the same to be their free and voluntary act and deed as well as those of the entities representative.

WITNESS MY HAND AND SEAL on the date and place above written.

NOTARY PUBLIC

Doc No. _________
Page No. ________
Book No. ________
Series of 19 _______