Distributor Ship Agreement

(DISTRIBUTORSHIP AGREEMENT)

(This Agreement made and entered by and between KIA Motors Corporation, (hereinafter referred to as side "A") and Mongol Hyundai Continental Company

(hereinafter referred to as side "B"), whereas, KMC and Distributor have entered into that certain Distributorship Agreement which granted to the Distributor the right to Distribute certain KIA vehicles as defined in said Agreement (hereinafter referred to as "KMC Vehicles");

One: (General)

(The present agreement regulates all relationships between sides in order to maintain mutual beneficial cooperation which will lead to prosperity of the sides attending to the agreement.) энэ гэрээ нь дараах харилцааг буюу

( The sid “A “ appoint “B” exclusive distributor of Mongol to produce and sale all of the product.)

( The side “B” accepts exclusive distributor of Mongol and implements

sale and after service in accordance with this articles of aggrement.)

Two: (The modifications and standards of goods) барааны стандарт ба өөрчлөлт/ сайжруулалт /

(1. The modifications and standards of goods to be delivered will be based on initial request by the side”B”.

(The side “A” immediately informs side “B” on appeared changes in modifications and standards.)

(3. It is agreed that side “B” receives an initial approval by side “A” to sell

goods similar to those manufactured by side “A”.)

Three: ( Order )

(1. The side “B” informs about the order detailing specifications, quantity and additional options of goods to be ordered in written.)

(.2.The side “A” upon receipt of certain orders inform back with prices and delivery schedule.)

(To place an order, side “B” deposits 50% of the price by wire transfer or against local L/C opened in MHK that invest corporation in Korea.)

Four: ( Inspection and transportation )

(1. Upon completion of the manufacturing and issuance of PDI, the order will be handed over to side “B” within 3 working days.)

(2. The side “B” shall be liable for all expenses including transportation from storage to the sea export warehouse and storage fee itself.)

(3. The side “B” arranges inspection of the received goods in regard of quantity, quality and informs the side “B” within 48 hours in case of finding any failures. Any claims are not accepted beyond the mentioned time.)

(4.The sold goods are not received back except those mentioned in the warranty manual. )

(5. The storage period in the sea export warehouse is 30 days with possibility to prolong only 3 times with maximum period of 90 days. When the maximum period is over, the goods will be a property of the side “A” with no rights to claim and further sale at the auction to cover storage fee and other related expenses.)

( The side “B” appoint MHK Co.Ltd in Korea as the agent of “B” to process smoothly takeover, payment, inspection, transporation , customs formalities and the side “A” accept the agent as like “B” .)

Five: ( Price)

(1. The side “A” quotes special price for goods and those quoted prices is valid only within specified period.)

(2. The prices will be quoted in USD excluding transportation and taxes.)

(The side “B” should pay for transporation charge from warehouse to CY and use only bonded transporation company of “A” in Korea.)

( The side “B” is able to appoint a international shipping company in case of departure from Korean port but the side “A” should admit it.)

(The side “B” should submit B/L and shipping document within 7 days after shippment.)

( If the side “A” ask for “B” change shipping company in case the international shipping company is not suitable to keep quality, the side “B” should change.)

.

Six: ( Payment )

( The payment is available by LOCAL L/C or T/T in principle . In case of payment by L/C in a bank of Mogol, it’s possible to pay by the Confirmed L/C of CITI BANK or HSBC BANK.)

(1. After payment of deposits in 50% of the price by wire transfer or against local L/C, the side “B” pays a balance within 7 days from the completion of the manufacturing and submit delivery form in case of L/C.)

(2. All payments shall be made in Korean won according to the rates of Korean WOORI BANK.)

(3. In case of delay in payment by side “B”, the sum equal to WOORI BANK overdue penalty fee will be paid to the side “A” starting from the day of delay.)

(4. The payment dad line is 13:00 pm for any payment and prolonged payments or will be automatically deducted from the deposited payment .)

(5. The side “B” recovers the deducted sum in the deposited payment within 20 days )

Seven: ( Liabilities )

(It is forbidden to transfer all liabilities coming from this agreement to the third party)

Eight: ( Deposit and financial warranties)

(1. The deposit in cash or immovable property paid to the side “A” shall be equal to the maximum sum of purchased goods in one month. In case the

purchased goods overcome the deposit, the difference will be deposited in cash.)

(2. The mortages of the side “B” are 700,000U$ opened in MHK to CHO HEUNG BANK and real estate belong to Kim Tae Hwa that located 3 dong gae-po, Kangnam Gu. The mortage can be changed by agreement with the side “ A” at a charge of the side “B”. )

Nine: (Training)

(1. The side “A” shall provide direction and training to appropriate personnel of its

authorized

dealers

to

ensure

competent,

prompt,

efficient,

workmanlike, courteous and quality service on all KMC Vehicles. )

(2. The side “B” provides information on export and sales and other information’s that side “A” deem necessary .)

(3. In course of implementation of the present agreement, both sides shall preserve the confidentiality of the agreement and forbidden to pass the information to the third party without written consent.

(4. The confidentiality will remain even after the expiration of the terms of the agreement.)

Ten. ( Compliance with KMC Service Workshop Identification)

(1. The side “B” shall have or cause all authorized dealers to have facilities and signs of a type, design, and size approved by KMC in accordance with KIA Service Workshop Identification Standard. It is forbidden for the side “B” to register similar brand names and logos.)

(2. The side “B” monitors the copyright ownership of the trade mark owners and informs the side “A” about any violations harming the law.)

(The side “A” allow the side “B” only use mark of the side “A” in Mongol and give a monopoly to the side “B”.)

Eleven: (Warranty)

(1. Warranty applies only to manufactured by the side “A” goods.)

(2. The side “A” agrees to reimburse the side “B” for repair and/or replacement of any part that is found to be defective in material or workmanship under normal use and maintenance for 1 year of exploitation or 20,000 km in accordance with Warranty Policy and Procedures of the side “A”.)

(3. In order to maintain a good reputation of the manufacturer, the side “B” arranges for quality after service and ready for immediate solution of the customers claims)

(4. The side “B” is dedicated for arranging general service based on quality, customer care and time saving at the reasonable work price.)

(5. The side “B” strives to resolve all the claims and in case if insolvency will

try to resolve the problem trough China regional office or Overseas team. )

Twelve. ( Promotion and advertisement)

(The side “A” shall place equipment, sign boards and goods in the territory of side “B” to promote the activities of the distributor )

Thirteen. (Termination)

(1.The party “A” party is entitled to terminate this Agreement without incurring any liability to the other party in case: )

(1.The side “B” fails to secure or maintain any license required for the performance of its obligations under this Agreement, or such license is suspended or revoked, irrespective of the cause.)

(2. The side “B” fails to secure a license by financial organizations and checks and payments means are confiscated.)

(3. The buying capacity of the side “B” fails to reach maximum monthly level in two month period.)

(4. Refusal of the party “B” to timely furnish sales, financial, warranty and service (including, but not limited to product quality) information and related supporting data, or other information related to the operations of the Distributor.)

(5. Refusal of the party “B” to take actions to resolve breaches in implementing of the agreement.)

(6. Changes in the ownership without a notice to the side “A” and transference of the liabilities of the agreement to the third party. Failure to defense side “A” against monetary damages or settlement.)

(7.The claim by side “A” that side “B” violated a special discounted price policy thus disturbing the market regulations.)

(8. Penetration of other distributor’s territory without prior notice to the side “A”)

(2. Upon termination of the agreement, the side “B” is liable to settle all debt and payments against side “A” and refuse from any profits. All relationships between parties are comes to complete stop, when agreement is terminated. Despite the termination, the process of reimbursement by side “A” is in progress.)

(3. Both sides are entitled to terminate this Agreement without incurring any liability to the other party by giving one (1) month prior written notice to the other party. Upon the negotiations, the agreement could be terminated any time. )

( When agreement is terminated, side “B” returns to the side “A” all necessary documents (confidential information, documents related to the technology and sales) and refuses to use brand names, logos and exhibits of the trade mark owners.)

( If the side “B” keeps this agreement well , the side “A” can’t interrupt and should support all of any programs.)

Fourteen: ( Reimbursement)

(All the damages caused by b\violation of the agreement will be reimbursed from the deposit paid to the side “A” and damages caused by “A” will be reimbursed only cash.) )

Fifteen: (Validity)

(The present agreement is valid for one year from the date of its signing and shall be automatically prolonged for 5 years in case of absence of any notes from parties.)

Sixteen: ( Jurisdiction)

.

(All claims raised from this agreement shall be settled by the local court located in the territory of side “A”.)

Seventeen: (Others)

(In case of failure in interpretation of the present agreement, the negotiation, the general rule for claim settlement and previous experience shall be practiced)

(The agreement is made in two copies, one for each side.)