Between;
MAGALLANES FORWARDER CHILE S. A.
Ahumada 312, Office 228,
Santiago, Chile, Sud América.
FAX : 56 2 672 94 60
E-MAIL : info@magallaneschile.cl
En Adelante "MFCH",

and

Both parties agree to cooperate in the transaction of international freight shipments, and they mutually agree to the following:

EXCLUSIVITY

MFCH undertakes to cooperate on non-exclusive basis and without obligatory with the AGENT for the air and ocean shipments from Chile to the Agent's Country for two (02) years.

The AGENT shall cooperate with MFCH on non-exclusive basis and without obligatory regarding air and ocean shipments from the Agent's Country, as well as all exported shipments from Chile and delivered in accordance with the address basis.

MFCH shall inform the other associates of their network of this agreement with the AGENT. The AGENT will be allowed total access and use of the network. The AGENT is not allowed to identify itself as MFCH, as only identify itself as an AGENT of MFCH.

RESPONSABILITY

Each party agrees to consign consolidated shipments as well as direct shipments, in the form of master airway bill or bill of ladings.

Each party agrees to do all possible to assure that: the freight and documentation is in order; pre-acceptance work is done at the destination; reporting any discrepancies, shortages or damage to the transportation company or its agent; filling out a preliminary claims form when appropriate.

In the event the merchandise is consigned to the bank order, each party agrees to hold the shipment until the corresponding bank delivers the documentation that it has received.

SHIPPING EXPENSES

The shipping expenses should be paid to the transportation company at its origin, unless otherwise mutually agreed to in advanced. For shipments on a collect basis, the amount to be paid is to be determined at the point of origin. The party at the destination is responsible to collect said expenses and included in the total amount of quantity per conciliation. If the party at the destination chooses to give credit to the shipping agent, then this party assumes all the responsibility for the payment due or financial loss incurred as a result of nonpayment by the client. Additionally, it is agreed that under no circumstance will payment not be made, nor will short term monthly payments be not be reconciled.

SETTLEMENT OF ACCOUNTS

Each party will send, via courier, the monthly status of bills together with copies of all the credits and debits for each item listed in the monthly statement. This shall be received by the other party before the 7th calendar day of the following month.

The amounts of the monthly against conciliation will be obtained by printing the balances that each party owes to the other party. The party who is net payable, after the printing, will initiate the payment to the other party. The payment will be made in the currency of the receiving party.

For contra settlement purposes, the parties will agree on an average exchange rate to use before the settlement is finalized. This will be an average of the weekly exchange rates in effect for the month being settled.

All payments will be made by the last day of the following month being settled via bank wire transfer by the party in the net payable position.

This settlement procedure is on a country basis. MFCH assumes no responsibility for settlements with any other members of its overseas network.

SALES AND MARKETING

Each party agrees to actively exchange sales and marketing information as it relates to traffic between the Agent of the Country and Chile.

Each party agrees to provide the other with current NET/NET rates. Sales rates must always be shown on sales leads and routing orders.

PROFITS

MFCH will credit the AGENT 50% of the profit on all air freight/sea freight shipments from Chile to the agent's country.

The AGENT will credit MFCH 50% of the profit on all airfreight/sea freight shipments from the agent's country to Chile.

This profit from an air freight/sea freight consolidation is defined as follows: the total of all HAWB/House bill of lading gross freight revenue less net MAWB/Master Bill of lading freight cost, taking in to account all legal commissions, rebates and incentives.

The profit from a direct air freight/sea freight shipment is defined as follows: Gross freight amount billed to the customer less net MAWB/Master Bill of lading freight cost, taking into account all legal commissions, rebates and incentives.

The issuance of a profit split is the obligation of the origin party. Credit notes for profit splits are to be issued no later than 30 days after the date of shipment.

Warehousing and containerisation charges for export shipments are to be borne by the party at origin.

Importing expenses for disembark of containers, warehousing and break bulk are to be borne by the party at destination. These expenses are excluded from the profit split calculation.

The exception to the above would be in the case where the point of origin on the HAWB/House Bill of lading is different from the point of origin on the MAWB/ Master Bill of lading, otherwise known as "door-airport" shipments. In those cases the transportation costs to the departure point as per the MAWB/Master Bill of lading are to be applied at net cost.

If the destination on the HAWB/House Bill of lading is beyond the destination on the MAWB/Master Bill of lading, or an "airport-door" shipment, those transportation costs to the final destination point as per the HAWB/House Bill of lading are to be billed back by the party at destination to the party at origin at 50% of the net cost.

In the case of "door - door" shipments, transportation costs from origin to departure airport and from destination airport to final destination are to be handled as above.

INSURANCE

Each party warrants it maintains valid, current freight forwarding liability coverage for consolidation with either house airway bills or house ocean bills of lading issued for shipments between agent's country and Chile.

The coverage shall include the settlement of well founded claims and the defense against ill founded claims made against either party. Such coverage shall be governed by the Warsaw Convention, with a maximum liability of US 20 per kilogram for air shipments and US 500 per manifested piece when shipped via ocean carrier.

Each party shall provide, upon request, the name and address of its liability insurance representative located in the other parties country.

TERMINATION

This agreement may be terminated by either party 45 days after receipt of written notice sent via registered mail.

Upon termination of this agreement, each party shall make every effort to settle outstanding accounts as provided in the Settlement Accounts paragraph of this agreement.

JURISDICTION

The agreement is governed by the laws applicable in Chile and in the place where the Agent works, prevailing the first ones.