CONTRACT FOR THE SUPPLY OF UNIFORM AND FABRIC WITH EMBROIDERY AND ACCESSORIES OF BUREAU OF CUSTOMS EMPLOYEES This

agreement made and entered into by and between: BUREAU OF CUSTOMS, a bureau duly organized and existing under and by virtue of Philippine Laws, with principal office address at Port Area, Manila, represented herein by its Commissioner, GEORGE M. JEREOS, hereinafter referred to as BOC; AND PHILIPPINE INTERNATIONAL TRADING CORPORATION, a government owned and controlled corporation created under P.D. 1071, with principal office address at NDC Bldg., 116 Tordesillas St., Salcedo Village, Makati City, represented herein by its Executive Vice President, TEDDIE ELSON E. RIVERA, hereinafter referred to as the CONTRACTOR; WITNESSETH: WHEREAS, BOC needs to provide uniform to its Metro Manila employees and fabric with embroidery/accessories for its Provincial employees for the year 2005; WHEREAS, BOC solicited a proposal from the CONTRACTOR a duly organized Government Owned and Controlled Corporation existing under P.D. 1071; WHEREAS, the CONTRACTOR was selected to be the official uniform provider in accordance with R.A. 9184 on negotiated contracts between government agencies; WHEREAS, the CONTRACTOR submitted design and financial proposals which were found to be acceptable to BOC; WHEREAS, the CONTRACTOR has the adequate experience to supply the office uniforms for regular employees; NOW, THEREFORE, for and in consideration of the foregoing premises and of the covenants hereinafter stipulated, the parties bind themselves as follows; 1. OBLIGATIONS OF THE CONTRACTOR a. The Contractor shall provide uniforms for BOC-Metro Manila employees and fabric with embroidery/accessories for BOC-Provincial employees in accordance with the estimated number specified in Annex A, using the materials and design approved by BOC, attached as Annex B. b. The Contractor shall make one prototype based on the chosen material and preferred design which shall form part of the deliveries. c. Once the prototype has been approved, no modification shall be made unless by mutual agreement of both parties and subject to price adjustments if necessary. d. The Contractor shall conduct measurements and deliver the uniforms and fabric with embroidery/accessories at the BOC offices/ports during office hours starting from the receipt of notice to proceed

e. Repair of uniforms shall be free of charge provided that such complaint is related to the quality of workmanship without altering the approved design or style. Furthermore, repairs other than the above will be undertaken with charges to BOC. f. Request for repair must be made in writing within seven (7) working days from delivery date and must be returned by the contractor also within seven (7) working days from receipt of such request. g. The Contractor shall be required to post within seven (7) calendar days from receipt of notice to proceed a performance bond in the amount equivalent to thirty percent (30%) of the contract price, which performance bond should be in the form of GSIS Surety Bond, callable on demand. 2. CONTRACT PRICE AND PAYMENT TERMS a. For and in consideration of the faithful and complete performance of the contract by the CONTRACTOR of its obligations under this contract, BOC shall pay the former the total amount of TWELVE MILLION NINE HUNDRED TWENTY EIGHT THOUSAND ONLY (12,928,000.00) Philippine currency as detailed in Annex A. It shall be understood however, that payments will be based on the delivered and accepted uniforms and fabric with embroidery/accessories. Should the number of employees enumerated in Annex A change, BOC must inform Contractor subject to the latter's acceptance and price adjustment when applicable. b. The price quoted for the supply of uniforms is VAT inclusive. c. Progress payments are subject to retention of ten percent (10%) referred to as retention money. Such retention shall be based on the total amount due to the contractor prior to any deduction and which shall be retained on every progress payment. Such retention money shall only be released upon acceptance and complete delivery of the uniforms as per this contract as evidenced by Certificate of Acceptance issued by the Contractor and duly accepted by BOC.. d. BOC warrants and agrees that payments due shall be made to PITC on its designated account in cash or manager's check within fifteen (15) calendar days from date of delivery and acceptance of uniforms, and that it shall execute such documents as may be necessary to effect payments for the uniforms to PITC on its designated account. Non-payment/delayed payment within the prescribed period shall be subject to a 2% penalty per month. e. Failure to deliver the complete uniforms on prescribed date shall be subjected to a fine of equivalent to 1/10 of 1% of the total undelivered uniform for every day of delay. 3. CONTRACT PERIOD The contract period of the undertaking shall be 150 calendar days from date of receipt of notice to proceed. The period shall include the days for measurement, fittings, delivery and final acceptance of the uniforms.

4.

TERMINATION a. Failure to comply to any of the terms and conditions of the contract by the Contractor shall mean forfeiture of the performance bond.

b. Delay beyond forty percent (40%) of the agreed contract period by the Contractor shall mean contract termination without prejudice to other sanctions which the BOC, in its sole discretion, will impose. 5. EFFECTIVITY This agreement shall take effect upon signing. 6. NO EMPLOYER-EMPLOYEE RELATIONSHIP It is mutually agreed and understood that the Contractor is not an employee of BOC but is an independent contractor. Neither, shall the personnel of the Contractor be deemed employees of BOC. Hence BOC shall not in any way be liable or responsible for any injury or damage, including death, sustain or caused by any of the personnel of the Contractor during the performance of their work related to this contract. 7. COST OF SUIT AND ATTORNEY FEES Should the Contractor commit a breach of any of the terms and conditions of this contract and BOC shall be constrained to file any action to obtain relief against the Contractor, the latter agrees and obligates itself to pay an amount equivalent to twenty percent (20%) of the total amount paid for in the complaint as and for attorney's fee, aside from the cost and expenses of litigation which BOC be entitled to under the Rules of Court. 8. VENUE In case of any litigation arising out of this contract, the parties herein agree that the venue of the same shall be laid solely and exclusively in the proper court of Manila. 9. FORCE MAJEURE a. The Contractor shall not be liable for any failure or default in the performance of this contract for reasons beyond its control, including force majeure as long as it has taken all the necessary precautions prior to, during or after the event constituting force majeure to avert or minimize the loss or damage. However the Contractor shall notify the Agency in writing within fifteen (15) days of the occurrence of any event constituting force majeure. As used herein, the term "force majeure" shall means events attributable to natural or human cause or phenomena that make it impossible or impractical for Contractor to carry out, in whole or in part, its obligations under this contract (i,e. typhoons, floods, fires, earthquake, civil disturbances, strikes, war, government restriction, etc.)

b. In the event of force majeure resulting in the suspension of work, and provided due notice is given by Contractor as above required, the contract shall be extended by the period equal to that for which the Contractor was prevented from performing.

c.

If such event shall continue for a period of more than 30 days after notice thereof has been given to the AGENCY, either party may terminate this contract upon not less than 30 days notice in writing to the other. Upon the receipt of such notice, the Contractor shall take immediate steps to bring the services to a close in a prompt and orderly manner as to reduce expenditures. Upon termination of this contract pursuant to this provisions. The Agency shall not be liable to make any payment to the Contractor except for work or services performed or expenditures incurred prior to the date of termination.

10.

NON CIRCUMVENTION CLAUSE BOC cannot deal directly or directly with Contractors sub-contractors on the duration of the contract.

IN WITNESS WHEREOF, the parties hereto affixed their respective signature on this _____ day of _______________________, 2005.

BUREAU OF CUSTOMS BOC

PHILIPPINE INT'L TRADING CORP. CONTRACTOR

GEORGE M. JEREOS COMMISSIONER

TEDDIE ELSON E. RIVERA EXECUTIVE VICE PRESIDENT

SIGNED IN THE PRESENCE OF

______________________________

_______________________________

ACKNOWLEDGMENT

REPUBLIC OF THE PHILIPPINES ) CITY OF MANILA ) S.S.

BEFORE ME, a notary Public for and in ________________________________ On this __________ day of ____________________, _____ personnally appeared:

GEORGE M. JEREOS COMMISSIONER

Residence Certificate No. Date Issued: Placed Issued:

TEDDIE ELSON E. RIVERA EXECUTIVE VICE PRESIDENT

Residence Certificate No. Date Issued: Placed Issued

known to be the same person who executed the foregoing instrument and acknowledged to me that the same is an act of their will and voluntary act deed as well as those of the firms they represent. This instrument refers to a contract of services for provision of company uniforms for regular employees and consist of ______ (_ ) pages including this page on which this acknowledgment is written, duly signed by the parties hereto and their instrument witness on each and every page hereof. IN WITNESS WHEREOF, I have set my hand and seal on the date and placed first above written.

Doc. No. Page No. Book No. Series of

__________ __________ __________ __________