ANNEX D: PRO FORMA CONTRACT

CONSIGNMENT AGREEMENT

KNOW ALL MEN BY THESE PRESENTS:

This Consignment Agreement executed this______ day of______________ , 20_

in _______________ Philippines, by and between:

_________________________________ a private corporation existing under the

laws of the Republic of the Philippines, with office and postal address at
__________________________________________, , represented herein by its
(DESIGNATION), (NAME), hereinafter referred to as the “CONSIGNOR”;

- and –

_______________________________________ represented herein by (Name &

Designation) _, hereinafter referred to as “CONSIGNEE”.

The Consignor and Consignee shall be collectively referred to “as the Party”.

WITNESSETH;

WHEREAS, in view of the high procurement cost of drugs and medicines, access to the
same by patients and other common people has been limited;

WHEREAS, the CONSIGNOR is a distributor of the products listed in Annex A, and

desires to offer its products at reasonable cost through forward-stocking or
consignment:

WHEREAS, the CONSIGNEE after a series of negotiation and evaluation in

compliance to pertinent laws, rules and regulations, has accepted the proposal;

WHEREAS, Administrative Order No.____ Dated____ allows the CONSIGNEE to

enter into a consignment contract with the CONSIGNOR;

NOW, THEREFORE, for and in consideration of the foregoing premises and the terms
and conditions hereunder enumerated, the parties hereby agree that:
A. CONSIGNMENT OF PRODUCTS

A.1. The CONSIGNOR shall deliver on consignment to the CONSIGNEE the

pharmaceutical products listed in Annex A which is attached and incorporated
herein by reference as “Products”, within the period stipulated in this
Agreement,
to be sold or disposed of for such price, in such quantity and under such other
terms and conditions stipulated hereunder.

B. DELIVERY AND QUANTITY

B.1. Unless the CONSIGNEE specifies otherwise in writing, the CONSIGNOR

shall deliver the Products at the above-mentioned address of the CONSIGNEE.

B.2. During the lifetime of this Agreement or at any renewal hereof,

CONSIGNOR shall deliver to the CONSIGNEE the Products on consignment
basis whose initial quantity, otherwise referred to herein as “beginning
inventory”, shall be determined by mutual agreement in writing. At any given
time, said inventory may be increased or decreased upon mutual written
agreement.

C. TITLE TO THE PRODUCTS

D.1. Deliveries of Products to the CONSIGNEE shall be documented by

corresponding stock delivery receipts (DR) duly signed by any one of the
CONSIGNOR’s authorized signatories and countersigned by any one of the
CONSIGNEE’s authorized representatives to evidence delivery and receipt of
the consigned. Products. The DR must be supported with a Certificate of
Analysis coming from the Quality Control Department of the manufacturer
reflecting therein the same batch/lot numbers covered in the DR. The same
batch/lot number must appear on the invoices for billing purposes.

D.2. Upon arrival of the products at the place of delivery, the CONSIGNEE
or/shall have the right to examine and inspect said products to determine
whether the same conform to the specifications before accepting delivery.

D.3. No items shall be delivered with expiration dates less than twelve (12)
months from the date of delivery. Any consigned items with an expiration date
less than that prescribed herein shall be immediately returned to the Consignor
for replacement. A Return Invoice (Invoice Receipt of Property) shall be issued
to this effect stating therein the specific description and quantity of the items and
the reason for their return.

D.4. Consigned goods may be subjected to random sampling and testing by the
Food and Drugs Administration (FDA), through an authorized DOH
representative or FDA Inspector, during deliveries and the corresponding items
retained and tested by the FDA shall be promptly replaced by the Consignor
without cost to the Government.

D.5. All unwithdrawn stocks at the main storeroom shall remain the property of
the CONSIGNOR. Insurance coverage against risk of losses and damages due to
force major shall be the sole responsibility of CONSIGNOR. However,
CONSIGNEE is accountable for losses due to theft, pilferage, negligence, and
mishandling of the consigned stocks.

D.6. CONSIGNEE shall be fully responsible for the storage, safety, and security
of the products delivered to it by CONSIGNOR pursuant to this Agreement.
CONSIGNEE shall follow the First-In, First-Out (FIFO) System of Inventory
management.

D.7. CONSIGNEE shall keep such stock cards and records which shall show
clearly the Products received, stored, sold, used or consumed by it. Such stock
cards or records shall be made available to the CONSIGNOR for review and
examination during reasonable business hours.

D.8. The parties hereto shall agree on a mutually convenient date, which in any
event should at least be once a month during the lifetime of this Agreement,
whereby CONSIGNOR shall allow its duly authorized representative to inspect
the inventory of Products maintained with the CONSIGNEE and determine the
remaining level thereof. A Count Sheet shall be prepared after each inspection
duly signed by the representatives of both parties, indicating therein the
remaining level of inventory.

D.9. The CONSIGNEE shall prepare a monthly Sales Report (SR) indicating the
total stocks withdrawal/sold for invoicing and replenishment of the Consignor.
The SR for a corresponding month shall be received by the CONSIGNOR’s
Authorized Representative within ten (10) days after each month and based on
the SR, on the basis of such Sales Report, CONSIGNOR shall there upon
prepare and transmit to the CONSIGNEE a Sales Invoice, which shall be the
basis of payments by the CONSIGNEE

D.10. The CONSIGNOR reserves the right to refuse further delivery of Products
if payments that are already due and payable under this Agreement remains
unpaid.

D.11. The CONSIGNOR shall remove from the hospital the consigned medicines
three (3) months before expiration. Non-movement of stocks for three (3) months
or earlier may result to termination of the agreement or breach of any term or
condition.
 D. PRICES OF PRODUCTS AND TIME OF PAYMENT

E.1. | Subject to such discounts or rebates which the CONSIGNOR may grant from
time to time, CONSIGNEE shall pay for the Products delivered to it at CONSIGNOR’s
prevailing price list as reflected in Annex A hereof.

E.2. The CONSIGNOR guarantees that the acquisition cost of the CONSIGNEE on the
items listed in Annex “A” is based on the latest edition of the Drug Price Reference
Index (DPRD).

E.3. Payment shall be made not later than thirty (30) working days from receipt by the
CONSIGNEE of the Sales Invoice mentioned in Section D, paragraph D.9, without need
of prior demand.

1. Any price increase during the effectivity of the AGREEMENT shall take effect thirty
(30) working days after written notice. In such event, the Consignee has the option to
buy the unwithdrawn stocks at the current prevailing price(s). The decision to buy the
unwithdrawn stocks shall be communicated to the Consignor within fifteen (15)
working days from receipt of advice of new prices.

F. WARRANTY

F.1. CONSIGNOR warrants and guarantees that no products covered by this

Agreement are adulterated or misbranded within the meaning of the Food and Drug
Administration Act of 2009, R.A. No. 9711, and / or the Comprehensive Dangerous
Drug Act of 2002, R.A. No. 9165.

F.2. CONSIGNOR further warrants that all products or articles covered under this
AGREEMENT are free from lien or encumbrances from third parties.

G. DURATION OF AGREEMENT

G.1. This Agreement shall remain in full force and effect for a period of six (6) months
commencing on, renewable upon mutual agreement of both parties, in writing.

G.2. Either party may, at any time, terminate this Agreement, for any reason
whatsoever, upon at least thirty (30) working days written notice to the other party.

H. CONSEQUENCES OF TERMINATION

H.1. Upon termination of this Agreement for any reason whatsoever, CONSIGNOR’s
authorized representative shall perform a final inventory count, and all unsold products
shall be documented in the Count Sheet. CONSIGNEE shall extend its full cooperation
to enable CONSIGNOR to withdraw all unsold Products.

H.2 CONSIGNEE has the option to return or just purchase some or all of the
unwithdrawn stocks of products within thirty (30) working days from date of
termination of this AGREEMENT.
H.3. Neither party shall be liable to the other by reason of the expiration,
pretermination, termination, or non-renewal of this Agreement for loss of prospective
profits, or of expenditures or obligations incurred in connection with the business or
goodwill.

I. NOTICES

Il. All notices required or permitted under this Agreement shall be in writing and
personally delivered or mailed, by registered mail, return receipt requested, and
addressed as follows:

CONSIGNEE:

CONSIGNOR:

IN VIEW THEREOF, the parties have hereunto set their hands this_______ day of-
________________________________,20--.

____________________________
_____________________________

Signed in the presence of:

Chairman, MCC Head, Accounting Unit

 ACKNOWLEDGEMENT

(Republic of the Philippines

_______________________)

BEFORE ME, a Notary Public, for and within (Place), on this _________________of
_____________________, 20 _____ personally appeared the following:

Name Proof of Competent Identity Validity

______________________ _______________________
____________________

______________________ _______________________
____________________

both known to me to be the same persons who executed the foregoing instrument and
that they acknowledge to me that the same is their free act and voluntary deed.

This instrument consisting of six (6) pages, including this page, in which the
Acknowledgment portion is found, signed by both parties concerned, and their
instrumental witnesses on each and every page on the left margin thereof.

IN WITNESS WHEREOF, I have hereunto set my hand, the day, year and
place above written.

_________________

NOTARY PUBLIC

Doc. No._____________

Page No._____________

Book No.____________

Series of_____________
 Annex

Product Name and Description Quantity Price

(Generic / Brand)

_________________________ ______________ ___________

__________________________ ______________ ___________
__________________________ _______________ ___________