AGENCY AGREEMENT

KNOW ALL MEN BY THESE PRESENTS:

This Agreement executed and entered into this _____ day of ____________ at

_____________, by and between:

BEN LINE AGENCIES PHILS., INC., a

domestic corporation duly organized and existing under the
laws of the Republic of the Philippines with principal
office at Ground Floor, Room 162 Velco Center, Corner
13th Street and Chicago Street, Port Area, Manila,
represented in this act by its General Manager, LETICIA
V. SARENAS, hereinafter referred to as the "FIRST
PARTY";

- and -

SOUTH FRITZ, INC., also a domestic corporation

duly organized and existing under the laws of the Republic
of the Philippines with principal office at J. P. Laurel
Avenue, Lanang, Davao City, represented in this act by its
President, _______________, hereinafter referred to as the
"SECOND PARTY".

WITNESSETH:

WHEREAS, the FIRST PARTY, known in the shipping industry by its trade

name BEN LINE, is engaged in business as common carrier of freight by water in the

Philippines;

WHEREAS, the FIRST PARTY desires to operate its shipping business in Davao

City through an agent;

WHEREAS, the SECOND PARTY agrees to be the agent of the FIRST PARTY

in its shipping business in Davao City;

 NOW, THEREFORE, for and in consideration of the foregoing premises,

the FIRST PARTY hereby constitutes the SECOND PARTY as its agent in

Davao City, subject to the terms, stipulations and covenants hereinafter set forth:

I. SCOPE OF AGENCY SERVICES

a. In monitoring import cargoes, the SECOND PARTY shall:

1. advise the consignees concerned of any incoming shipment

once documents relative thereto are received from the FIRST

PARTY;

2. ensure that corresponding inward foreign manifests are

properly submitted to customs authorities on time;

3. arrange the release of cargo to the consignees upon

surrender of original bills of lading and full

settlement of freight and local charges, including

demurrage;

4. immediately advise in writing the FIRST PARTY of any

cases of shortlanded, overlanded, pilfered or damaged cargo,

including particulars thereof;

5. immediately transmit to the FIRST PARTY all documents

relative to any cargo claims for proper handling;

3
 6. regularly notify in writing the FIRST PARTY of non-

collection of freight and charges due on import cargoes with

explanation as to the reason thereof.

b. In marketing functions, the SECOND PARTY shall:

5. agree to use its best endeavors, as agent of the FIRST

PARTY, in soliciting contracts for carriage of cargo, inbound or

outbound, covering Transpacific and Europe, specifically from,

but not limited to, shippers, consignees, freight forwarders, and

cargo brokers;

6. execute other marketing functions on behalf of the FIRST

PARTY in accordance with the latter's instructions and policies

that may be established from time to time.

c. The SECOND PARTY shall assist the FIRST PARTY in the

evaluation and selection of, as well as in negotiation with stevedores, terminal

operators, depot stations and other similar independent contractors in Davao City

for services to the First Party.

d. The SECOND PARTY shall properly inspect all containers and

chassis arriving in Davao City, unless otherwise advised in advance by the

FIRST PARTY that another entity has been contracted to conduct such

inspection.

It is hereby understood that the FIRST PARTY may contract out the

inspection service to an entity other than the SECOND PARTY.

4
5
 e. With respect to any equipment of the FIRST PARTY, owned or

leased, being used by the SECOND PARTY in connection with this Agreement,

the latter shall:

1. regularly record the location and condition of all

equipment.

2. not lease or sub-lease to any party, the equipment of the

FIRST PARTY without the express prior written approval of the

latter;

2.1. In case of such lease or sub-lease pursuant to the

foregoing, the SECOND PARTY must furnish the

FIRST PARTY a copy of the contract and must

maintain on its file a complete set of documents of

the transaction.

3. facilitate and ensure the arrival from and the return of any

equipment to, third parties, pursuant to the FIRST

PARTY's set of guidelines, and ensure that any charges due

the FIRST PARTY for detention, demurrage and/or hire

relative thereto are promptly billed, collected, reported and

remitted.

f. The SECOND PARTY shall exercise its best effort and due

diligence in collecting all freight and other charges due and payable to the FIRST

PARTY, where the place of payment is in Davao City, whether for an inbound or

6
an outbond carriage of cargo. These charges shall include detention, demurrage

and other charges assessed against cargoes, containers, chassis and other

equipment involved relative to the shipping business of the FIRST PARTY.

g. The SECOND PARTY shall submit to the FIRST PARTY such

reports as the latter may reasonably request with respect to the duties of the

SECOND PARTY under the terms of this Agreement. The SECOND PARTY

must also keep full and sufficient records of the business transacted in the

performance of this Agreement.

h. The SECOND PARTY shall, on request of the FIRST PARTY,

furnish the latter with a surety company bond conditioned on the faithful

performance of the SECOND PARTY's duties and the accounting for all funds

received by the SECOND PARTY. Such bond shall be in the form, amount and

substance satisfactory to the FIRST PARTY.

i. The SECOND PARTY agrees to keep confidential such

information as the FIRST PARTY may from time to time impart to the

SECOND PARTY regarding the FIRST PARTY's business affairs and customers.

The SECOND PARTY will not, in whole or in part, now or at any time, disclose

such information.

j. The SECOND PARTY agrees to indemnify the FIRST PARTY,

and its agents and employees, against all claims, damages, losses and expenses,

including reasonable attorney's fees, arising out of performance of the SECOND

PARTY's endeavors under this Agreement that are caused in whole or in party by

SECOND PARTY's negligent act or omission, or by the act of anyone employed

by the SECOND PARTY for whose acts the SECOND PARTY may be liable.

7
II. CONSIDERATION

It is hereby agreed that the SECOND PARTY shall get a share from the

FIRST PARTY in the net proceeds from all carriages of cargoes in Davao City,

whether inbound or outbound, as follows:

a. 2.5% of the net proceeds for exportation;

b. 1.25% of the net proceeds for importation.

III. REPRESENTATION

A. The SECOND PARTY hereby undertakes not to represent any

other shipping carrier licensed to do business in the Philippines during the

duration of this Agreement.

B. The parties have read and understood the terms, conditions and

covenants of this Agreement, and hereby express their conformity thereto. All

covenants, promises, representations and agreements herein contained shall be

binding upon, apply and inure to the benefit of the assigns or successors-in-

interest of the contracting parties herein.

IV. AMENDMENT

This Agreement may be modified or amended from time to time by

mutual agreement reduced to writing and signed by the parties.

8
V. DURATION OF THE AGREEMENT

This Agreement shall be for a period of one year, commencing upon the

execution of this contract, and shall be deemed impliedly renewed if no written

notice of cancellation is given by either party at least thirty (30) days prior to the

date of the expiration of the term.

Either party shall have the option to pre-terminate this Agreement by

means of a written notice served upon the other party at least thirty (30) days

prior to the date of such termination and tendering with the notice all sums owing

the other party, provided however that the termination shall be subject to the

performance by the contracting parties of any outstanding obligation to each

other arising from this Agreement and shall not affect any liability in any way

resulting from transactions initiated prior to the termination.

On termination of this Agreement, the SECOND PARTY within thirty

(30) days, at its expense, shall return to the FIRST PARTY in good condition,

ordinary wear and tear expected, all equipment loaned or consigned by the FIRST

PARTY to the SECOND PARTY. If the SECOND PARTY fails to return any

equipment as above provided, the latter shall be liable for rental payments for

such equipment.

VI. VENUE OF ACTIONS

It is hereby stipulated that any legal controversy arising from this

Agreement shall be exclusively brought before the courts of the City of Manila.

9
 IN WITNESS WHEREOF, the parties have hereunto affixed their hands

on the day and place first above written.

BEN LINE AGENCIES PHILS., INC. SOUTH FRITZ, INC.

First Party Second Party

By: By:

LETICIA V. SARENAS _________________

General Manager President

SIGNED IN THE PRESENCE OF:

_____________________
________________________

ACKNOWLEDGMENT

REPUBLIC OF THE PHILIPPINES )

) S.S.

BEFORE ME, a Notary Public for and in _________________ this

_____ day of _____________________ personally appeared the following:

NAME COMM. TAX CERT. NO. PLACE/DATE ISSUED

Ben Line Agencies Phils, Inc.

Leticia B. Sarenas
South Fritz, Inc.
_________________

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

This instrument consisting of nine (9) pages including this page wherein
this acknowledgment clause is written refers to an Agency Agreement signed by
both parties and their instrumental witnesses on each and every page thereof.

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

Doc. No. _____;

Page No. _____;
Book No. _____;

10
Series of 1998.
/conversion/tmp/activity_task_scratch/553127613.doc
RTB

11