Overseas Warranty and Service Policy of FOTON Truck Products (Myanmar)

2011 1 1 2011 12 31
Period of validity: 1st Jan, 2011 to 31st Dec, 2011

(Truck Sales division of Foton International Trade Co., Ltd, Beijing)

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 CONTENTS

Warranty Service 1. 1. Coverage 2. 2. Foton Responsibilities 3. 4.

3. Distributor Responsibilities 4. User Responsibilities 5. 5. Limitations

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Cost Reimbursement Policy 1. 1.Foton-Cummins Engine warranty claim process 2. 2. CBU Warranty Expense Process of failure parts Supplementary articles

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 Warranty Service 1 1Coverage 1.1 1.1 Warranted Products 2011 1 1 2011 12 31 KD This policy is applicable for after-sale services of Foton CBU and KD assembly vehicle product which are exported by Truck sales division of Foton Overseas Enterprise from Jan. 1st, 2011 to Dec. 31st, 2011. In case of Special-purpose vehicle, Remoulded-vehicle foreign government bidding or group purchasing, the policy should be adjusted, complemented or renewed according to the requirement of agents and market. 1.2 1.2 Basic Vehicle Warranty policy
Category Basic warranty Policy of CBU Brand Country Myanmar Ollin, Aumark Auman

24 /5 24 months/50,000km

24 /6 24 months/60,000km

Explanation I: Scope & Definition 1. 1. Basic warranty Policy of CBU covers every parts of the corresponded vehicle other than Special Items (as defined below), Expendables, Fuel, oil and Lubrications: (as defined below). 2. 2. The warranty period shall begin since the date that the vehicle is delivered to the first retail purchaser only and warranty mileage or period is exclusively stipulated by warranty policy, whichever comes first. Explanation II: Special Items 1. 18 16 12 8 12 8 1. Foton-Cummins Engine Warranty Policy: Foton-Cummins Engine is warranted by 18months or 160,000km mileage; Among them, Starter, Alternator, Belt, Belt Pulley, Exhaust Gas Recirculation Valve, Exhaust Gas Recirculation Intake Throttle Valve, ECM Harness, Water Pump, Oil Heater, Coolant Heater, Air Heater are warranted by 12months or 80,000km mileage. 2. 6 10000

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2. Tire: In case of proper operation under the normal environment, vehicle (chassis) tire can be warranted within 6 months or 10,000km mileage if the failure is due to quality problems such as the bulge crack, delamination and etc. 3. 6 10000 3. Battery: In case of proper operation under the normal environment, battery is warranted within 6 months or 10,000km mileage if parts falling is due to quality issue. Explanation III: Not-covered Items ()() Normal Consumption Parts: Brake Shoe (without warranty for the parts burned, worn and damaged during use), clutch lining (without warranty for the parts burned, worn and damaged during use). Expendables: Wiper Blade, Bulb, Fuse, various kinds of Filter Elements, and etc. Fuel, Oil and Lubrications: Oil, Lubricating Grease, Coolant, Battery Electrolyte. KD All localized parts and components used in KD assembled products. KD Parts failure incurred by improper assembly or adjustment during local KD process.

2. 2. Foton Responsibilities Vehicles in the range of quality warranty defined by Truck sales division of Foton Overseas Enterprisewhich is operated under normal condition and proper maintenance, be damaged or disabled due to issue of design, material, production or assembly will be warranted. 3 3. Distributor Responsibilities 3.1 3.1 Overseas distributors should provide quality warranty which not less than the aforementioned standard, and make the commitment to customers in written. 3.2 10 1 3.2 Service center (or dealers) must feedback the last monthly service information as required format (see attachment 1) to Foton company before 10th of each month. Foton Company is entitled to reject the warranty fees payment if it is delayed by service center (or agent). 3.3

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3.3 Service Centers (or dealers) are responsible for providing free warranty services Extra charges from end user are prohibited. 3.4 3.4 Services centers (or dealers) must fully bear the warranty cost for any service carried out without confirming the facticity, reasons and blame of the failures in the first place. 3.5 3.5 The service centers (or dealers) are responsible for the loss that caused by repeat work or customers complain due to disqualified service quality. 3.6 3.6 Party shall take responsibility to fully bear relative charges if the service is violated warranty services principle. (i.e. Although replacing breakdown parts can solve the issue, service is deliberately carried out by replacing main assembly). 3.7 3.7 It is forbidden to refuse to provide warranty service to customers; Warranty service must be checked and accepted with confirmed signature by customers; 3.8 6 6 T+6-N N-6 T N N6 3.8 Distributor shall always promise Basic Warranty Policy to end-user. Among that, if distributor sells the product within 6 months after vehicle arrived in destination port, FOTON will grant Basic warranty policy to distributor (T months) and bear the warranty cost which is complied with stipulated agreement; if distributor does not sell the product within 6 months after vehicle arrived in destination port, distributor shall be responsible for the warranty granted to end-users, to the extent that FOTON shall only grant to compensate warranty cost within warranty period: (T+6-N) months to distributor, while warranty mileage will not be deducted, i.e. distributor shall bear warranty cost within period: (N-6) months. (N.B.: T stands for the warranty period; N stands for the period from the date that vehicle arrived in destination port to sales date (N>6).) 3.9 3.9 Distributor shall compile and print the Warranty Maintenance Manualaccording to valid warranty policy, and issue the manual to the end user while delivery for recording maintenance history.

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3.10 FOB **2% FOB **4% 3.10 Spare parts minimum purchasing requirement: To assure our local service responsiveness, all distributor must purchase appropriate amount of spare part in order to benefit from warranty cost reimbursement policy and all terms of valid service commercial policy issued by Truck sales division of Foton Overseas Enterprise: Criterion of the amount of spare part purchasing for light duty truck: CBU FOB price* quantity*2% Criterion of the amount of spare part purchasing for Heavy duty truck: CBU FOB price* quantity*4% 3.11 1 DHL 20 50 3.11 If distributors signed up the after-sales service agreement and fulfilled all stipulated clauses according the service policy, every distributor is entitled to raise twice free urgent spare part DHL express requirement pre year. The total varieties in each application can not be more than 20 categories, and the total quantity can not be more than 50 items. 4 4. User Responsibilities 4.1 4.1 User is responsible for operating and vehicle maintenance according to Foton vehicle maintenance regulation which is stipulated in Warranty Maintenance Manual. 4.2 4.2 User is responsible for providing all proof of implemented maintenance, such as Warranty Maintenance Manual, vehicle purchasing invoice (or copy). 5 5. Limitations 5.1 5.1 Vehicle which is observed with discrepant or changed VIN, engine number, chassis number as shown on theWarranty Maintenance Manual, shall not be warranted. 5.2 ()

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5.2 Any damages caused by not operating vehicle according to operation manual, or exceeding regulated standard or limitation which are stated in the Foton technical documents (e.g. overloading, over-speeding, abnormal tire pressure, improper operation and so on) are not covered by warranty. 5.3 () 5.3 Damages caused by not carrying scheduled maintenance as maintenance regulation, or using unpermitted Lubricating oil, Grease brake fluid or Coolant, are not covered by warranty. 5.4 5.4 Damages and failures due to Vehicle refit without of Fotons approval (e.g. Changing to different tire model, engine and welded-part etc.) or installing (e.g. Adding leaves, changing to thicker leaf springs or installing the electro-equipment and so on), including changing body, chassis or spare parts are not included in warranty. Furthermore, not connecting odometer wire or changing the mileage reading on purpose, the vehicles are not covered by warranty. 5.5 () 5.5 Components produced by refitting plants or failures caused by the defect of refitting based on Foton vehicles(chassis) are not covered by warranty, such related service shall be carried by refitted-vehicle plants. 5.6 5.6 Consequent failures and damaged spare parts caused by not resolving the problem in time but compulsive operation, or parts loss and indirect loss by causing trouble are not covered by warranty. 5.7 5.7 During vehicle service, any damage caused by installing Non-Foton parts or parts uncertified by Truck sales division of Foton Overseas Enterprise are not covered by warranty. 5.8 5.8 After accident, damaged vehicle which if be unilaterally disposed by client without pursuing obligation verification by Foton, is not covered by warranty. 5.9 24 10 24 100001

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 24 100000 5.9 Parts that exceed the warranty term or mileage (the warranty limit is deemed as expired when either one condition occurs. For example, warranty period for the engine cylinder block of OLLIN series light truck is 24 months or 100000km. If the purchasing date is still within 24 months, while the total driving mileage is over 100001km or above, then the warranty is expired; in the same way, if the purchasing date was on 24 months ago, while the total driving mileage is less than or equal to 100000 km, the warranty is also deemed as out of warranty coverage). 5.10 5.10 Any damage or consequent damage caused by unavoidable natural disaster, fire, vehicle crashing, stolen is not covered by warranty. Any damage caused by smoke, chemistry regent, seawater, sea breeze, salt and other similar causes is neither covered by warranty. 5.11 (-20 40) 5.11 Any damage caused by not taking proper maintenance under poor environment (e.g. lower than -20or higher than 40) is not covered by warranty. 5.12 () 5.12 Any damnification due to time factors (natural degeneration of painting on the surface and electrophoresisflaking and other degeneration )is not covered by warranty. 5.13 5.13 Spare parts worn due to natural consumption are not covered by warranty. 5.14 5.14 Failures caused by engine sucking water or water moving in it are not covered by warranty. 5.15 () 5.15 The feeling problems which do not affect the vehicle performance (which is not one of the bad feelings that affect the quality, function or performance) is not included in warranty service. 5.16 5.16 Losing vehicle tools, accessories or others technique documents are not included in warranty service. Cost Reimbursement Policy 1. 1. Foton-Cummins Engine warranty claim process

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 Based on prescription of the joint venture contract of Beijing FOTON Cummins Engine Co., Ltd.(BFCEC) that warranty claim of the joint venture products shall be carried out through Cummins global distribution channels. Foton assist distributors to build up liaison with local Cummins distribution. 2 2 CBU Warranty Expense 2.1 2.1 Composition of Warranty Cost 2.1.1 = FOB + + 2.1.1 Warranty Fee= Parts (FOB price) cost + Parts Management Cost + Labor Cost 2.1.2 = + + 2.1.2 Parts Management Cost = Sea Freight Fee + Part Handling Fee + Import Tax Parts CostParts cost is calculated by the price of the service agreement signing date. FOB ; Part Management Fee is only calculated by negotiated percentage of parts FOB price; standard shall be referred to service agreement. 2.1.3 = 2.1.3 Labor Charge= Standard Time Labor Rate 2.2 2011 2.2 Implement labor time according to Repairing Labor Time Standard, 2011 version issued by Service department in Truck sales division of Foton Overseas Enterprise. 2.3 2.3 The basic labor rate shall be referred to service agreement. 2.4 2.4 Cashing methods and periods of the fees 2.4.1 TT 2.4.1 SettlementTT 2.4.2 2.4.2 Periods of the fees
No. 1 Fees Approval of Warranty Claim Settlement Periods 1 1 months

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Warranty Claim Cashing

3
3 months

A paper notification will be delivered to the service centers or agents by Service department in Truck sales division of Foton Overseas Enterprise regarding these fees. The service centers (or Agents) should make out the invoices for the notified amount. The money will be cashed in after the invoices are received by Truck sales division of Foton Overseas Enterprise. Process of failure parts 3.1

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3.1 The service center (or Dealers) should keep the failure parts for 6 months. The failure parts shall be discarded as useless after the troubleshooting and confirmation from Truck sales division of Foton Overseas Enterprise and the service centers possess the failure parts. 3.2 3.2 The reference of the check and acceptance of the failure parts are Product Quality Warranty Technology Appraisal Form. Supplementary articles 1 1. The ultimate power of interpretation belongs to Truck sales division of Foton Overseas Enterprise. 2 2011 1 1 2. This policy is valid from Jan. 1st 2011 and the former policy is abolished at the same time.

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