MMC, HMC, and HM have agreed in principle to seek to work on projects relating to the mutual development of automotive technology and products. Earlier this year, MMC and HMC, together with DaimlerChrysler, established a global alliance for a new state-of-the-art four-cylinder gasoline engine. On top of this, MMC and HMC see opportunities to further intensify cooperation with each other in areas such as engines, transmissions, and basic automotive design technology. With the addition of Hyundai Mobis to this agreement, future projects may include cooperation on the design, development, production, procurement, and sourcing of automotive parts and components in Korea and Japan, as well as other locations. Specific projects will be initiated on a case-by-case basis.

In connection with the new cooperation agreement, MMC has signed an agreement with HM to sell approximately 3,750,000 shares of HMC to HM, constituting all HMC shares held by MMC under the old joint venture agreement. These shares represent approximately 1.71% of the total amount of HMC shares issued. The agreement provides for the purchase by HM of these shares at a target price of KRW36,750. The sale will occur between November 1, 2002 and March 15, 2003. MMC will realize approximately USD$110 million in proceeds through the sale.