STATEMENT OF THE CASE

By LEE SG CO.

LEE SG CO. is a company incorporated under the Laws of Singapore, which line of business
includes the fabrication, commercialization, and export of instantaneous drinks and beverages,
among which is “ZARAP” powdered juice drink.

JUAN Phils Inc. is a company incorporated under Philippines laws, which line of business
includes the importation, distribution, and sale of instantaneous drinks and beverages within
Philippine territory.

LEE and JUAN entered into Distribution Agreement on 1/2/2007. The object of the agreement
was to distribute and promote the mark ZARAP in the Philippines. To do so, LEE appointed
JUAN as its sole and independent distributor in the Philippines.

According to the Distribution Agreement, LEE commits to deliver ZARAP juice on Cost
Insurance Freight (CIF) condition (Incoterm 2000) at the port of destination, in accordance with
the Purchase Orders send by the Distributor. JUAN shall pay a fixed price for the product
shipped to it. Payments should be made within 200 days after shipping departure.

For the purpose of guaranteeing the payment of fixed price, JUAN should obtain Stand By
Letter of Credit in favor of LEE for the amount of US$ 100,000 and should renew this document
opportunely.

In the first period the agreement developed in a normal way. Sales realized in 2006 was USD$
360,000 and in 2007 was USD 210,000. JUAN requested that LEE ship more cases of ZARAP
because the stocks it had in the warehouse was not enough for the demand as it had 130 sales
points in the Philippines. Between April and July 2007, JUAN requested LEE to send shipment
and sent Purchase Order No. 123 and Purchase Order No. 456 via email detailing the products
from shipment. Total amount of shipment for the two purchase orders was USD150,000. The
goods arrived the Philippines on September 5, 2007.

In October 2007, LEE sent marketing budget for the product for the year 2008 in the amount of
USD$300,000 as marketing support for JUAN.

By end of November 2007, LEE sent several emails to President Bonifacio of JUAN requesting
for the payment plan for Purchase Order No. 123 and Purchase Order No. 456, both were dated
June 1, 2007 and June 2, 2007 respectively. According to LEE, JUAN already purchased the
goods and should pay the purchase price.

JUAN responded that it did not own the products under Purchase Order No. 123 and Purchase
Order No. 456 and demanded that the ZARAP stocks should be removed from the warehouse
of JUAN, otherwise, JUAN would charge storage fee of USD$ 10,000 per month.

LEE is filing a suit against JUAN.

STATEMENT OF THE CASE

By Juan Phils Inc.

LEE SG CO. is a company incorporated under the Laws of Singapore, which line of business
includes the fabrication, commercialization, and export of instantaneous drinks and beverages,
among which is “ZARAP” powdered juice drink.

JUAN Phils Inc. is a company incorporated under Philippines laws, which line of business
includes the importation, distribution, and sale of instantaneous drinks and beverages within
Philippine territory.

LEE and JUAN entered into Distribution Agreement on 1/2/2007. The object of the agreement
was to distribute and promote the mark ZARAP in the Philippines. To do so, LEE appointed
JUAN as its sole and independent distributor in the Philippines.

In 2005, LEE initiated the negotiations for the Distribution Agreement with JUAN for the
distribution of ZARAP products in the Philippines. JUAN agreed under the framework that it
would act as exclusive agent of LEE in the Philippines to sell ZARAP products.
As the distributor under the agreement, JUAN was entitled to 15% fixed gross margin. JUAN
was amendable to remit the price of the sold products, less the 15% margin. LEE promised that
LEE would accept the remittance of payment and not draw from the Stand By Letter of Credit,
which was only a security for payment of any obligation of JUAN. LEE also agreed to
reimburse all expenses of JUAN for marketing the products.

In the first period the agreement developed in a normal way. Sales realized in 2006 was USD$
360,000 and in 2007 was USD 210,000. All shipments to the Philippines were confirmed
through signed pro-forma invoice that served as written purchase order.

But in May 2007, the ZARAP products were not patronized in the market. JUAN informed LEE
that there were two other existing competing products – ZESTO and TANG – in the Philippines.
LEE, to encourage JUAN, offered to provide marketing support. So, in October 2007, LEE sent
marketing budget for the product for the year 2008 in the amount of USD$300,000 as marketing
support for JUAN.

On September 5, 2007, shipment of ZARAP products arrived in the Philippines covered by

Purchase Order No. 123 and Purchase Order No. 456, both were dated June 1, 2007 and June
2, 2007 respectively, signed only by the Logistics Officer of LEE, Mr. Guiao.

By end of November 2007, LEE sent several emails to President Bonifacio of JUAN requesting
for the payment plan for Purchase Order No. 123 and Purchase Order No. 456.

JUAN refused to pay. It insisted that it did not buy the products, and LEE owned the products.
JUAN requested for the purchase orders with signature of JUAN’s officer, but JUAN was only
given a copy of Purchase Order No. 123 and Purchase Order No. 456. Total amount of
shipment for the two purchase orders was USD150,000.

According to JUAN, it was not responsible for the shipments since JUAN was merely an agent
to sell the ZARAP products in the Philippines.
JUAN received information that LEE was filing a case against it.