TERMS AND CONDITIONS

These General Terms and Conditions are an integral part of all Mazda Fleet Programs and as such are incorporated by reference into each Program and are binding upon both Mazda Canada Inc. and the Dealer as if separately agreed to by each of them.

1. DEFINITIONS

"MAZDA FLEET PROGRAM" means any program which Mazda Canada Inc. may publish from time to time to any of its Dealers and which Mazda Canada Inc. designates as a Mazda Fleet Program. Mazda Canada Inc., in its discretion, may publish and maintain in effect more than one Mazda Fleet Program at any one time. As used in any Mazda Fleet Program, the following terms shall have the following meanings:

"MAZDA" means Mazda Canada Inc.

"DEALER" means an authorized Mazda Dealer who elects to participate in the Mazda Fleet Program by submitting an Order or claim to MAZDA under the Mazda Fleet Program.

"PROGRAM PERIOD" means the time specified by MAZDA for the Mazda Fleet Program.

"ELIGIBLE FLEET ACCOUNT" means a qualified Leasing Company, Commercial Fleet, Daily Rental Company or Governmental Agency which has purchased and registered (for use in its business or for lease to others) not less than five (5) motor vehicles or any other entity designated by MAZDA from time to time in any Mazda Fleet Program as an Eligible Fleet Account.

"ELIGIBLE FLEET VEHICLE" means a new Mazda brand motor vehicle of the type identified by MAZDA in the Mazda Fleet Program, which is sold by a Dealer and first registered or titled to an Eligible Fleet Account in Canada in accordance with the provisions of the Mazda Fleet Program. No vehicle shall be an Eligible Fleet Vehicle which has been used as a demonstrator or service loaner, or as otherwise determined by MAZDA. No vehicle leased by an Eligible Fleet Account to its customer shall be an Eligible Fleet Vehicle unless such lease is determined by MAZDA to be a bona fide lease for a term of not less than twelve (12) months.

"ORDER" means an Order submitted by a Dealer and accepted by MAZDA for an Eligible Fleet Vehicle to be sold by MAZDA to Dealer for resale to an Eligible Fleet Account in accordance with the provisions of a Mazda Fleet Program. MAZDA in its sole discretion may from time to time require a minimum number of Eligible Fleet Vehicles for a single Order.

"OUT OF STOCK" means a sale by Dealer of an Eligible Fleet Vehicle from the existing inventory of Dealer.

"COMMERCIAL FLEET" means a company which purchases Eligible Fleet Vehicles for use by its employees in the conduct of the company’s business, or as otherwise determined by MAZDA. Vehicles must be registered in company/lessor name or Dealer/company will be subject to Fleet incentive chargeback.

"DAILY RENTAL COMPANY" means a company which regularly engages in the rental of motor vehicles to the general public on a daily, weekly or monthly basis and which purchases Eligible Fleet Vehicles for the purpose of such rentals, or as otherwise determined by MAZDA.

"COMMERCIAL LEASING COMPANY" means a company which operates at least ten (10) or more passenger cars or trucks and regularly engages in the long-term lease of motor vehicles to its customers (who own/operate five [5] or more passenger cars or trucks) and which purchases Eligible Fleet Vehicles for the purpose of such leases, or as otherwise determined by MAZDA. Leasing companies who lease to retail customers are not eligible for a MAZDA Fleet Authorization Number (F.A.N.).

"DEALER AFFILIATED LEASING COMPANY" means a Leasing company to which Eligible Vehicles are sold by a Dealer and which is owned or controlled by Dealer, or any of its immediate or ultimate shareholders or any of their relatives, whether directly or indirectly, as determined by MAZDA.

2. APPROVAL OF ELIGIBLE FLEET ACCOUNTS

On or before any Order is placed by a Dealer for the sale of an Eligible Fleet Vehicle, an application must be submitted to MAZDA for each Eligible Fleet Account in the manner required by MAZDA, using MAZDA’s Application for Fleet Account Eligibility Form or such other form or document required by MAZDA. MAZDA reserves the right to approve or disapprove any account as an Eligible Fleet Account. Approval by MAZDA in no way constitutes a determination or approval by MAZDA of the credit worthiness of the Eligible Fleet Account, and Dealer shall not rely on any such approval for such purpose. Upon approval, MAZDA will issue the Eligible Fleet Account a unique MAZDA Fleet Authorization Number (F.A.N.) or confirm the account’s number using the most recent list provided by MAZDA. Such identification number must be specified on all Orders, claims and other communications by Dealer to MAZDA regarding the Eligible Fleet Account.

3. ORDERS

ACCEPTANCE AND FLEET ORDER NUMBER – An Order must be submitted to MAZDA for each Eligible Fleet Vehicle in the manner and at the time required by MAZDA. All Orders are subject to acceptance by MAZDA and MAZDA reserves the right to accept or reject any Order. All Orders are irrevocable and constitute an absolute obligation of Dealer to MAZDA. All Orders are subject to production availability.

4. DELIVERY OF VEHICLES

DELIVERY OF ORDERS – MAZDA will use its best efforts to deliver Eligible Fleet Vehicles as Ordered, but Dealer acknowledges that MAZDA shall have no liability or obligation as a result of any failure to deliver Eligible Fleet Vehicles according to any schedule or at any specific time. If MAZDA determines that it will be unable to fulfill any Order on a timely basis, MAZDA shall notify Dealer promptly.

OUT-OF-STOCK DELIVERIES – If Dealer delivers an Eligible Fleet Vehicle to an Eligible Fleet Account under a Mazda Fleet Program on an Out-of-Stock basis, Dealer may request MAZDA to sell Dealer a vehicle to replace the Eligible Fleet Vehicle in Dealer’s inventory. MAZDA will use its best efforts to provide such a vehicle to Dealer, taking into account such factors as Dealer’s level of inventory and the availability of vehicles to MAZDA and other Dealers. Dealer acknowledges that there is no assurance that MAZDA will be able to provide such a vehicle to Dealer at any particular time, or to provide a vehicle of any particular model, colour, etc.

5. PAYMENTS OR CREDITS TO DEALERS

FLEET INCENTIVES (ORDERS AND OUT-OF-STOCK TRANSACTIONS) – Mazda Fleet Programs contemplate that most Eligible Fleet Vehicles will be delivered pursuant to Orders but that in some cases Eligible Fleet Vehicles will be sold by Dealers to Eligible Fleet Accounts in Out-of-Stock transactions. Mazda Fleet Programs will provide incentives to Dealers in either or both of such cases, as specified in the Mazda Fleet Program section.

PAYMENTS TO THE DEALERS – All amounts owed by MAZDA to Dealers under a Mazda Fleet Program shall be paid by MAZDA automatically in the month following the end of the sales reporting month. All such payments are made subject to MAZDA’s right to audit and chargeback as described in Section 7.

6. AUDIT AND CHARGEBACK

DEALER DOCUMENTATION – Dealer shall be responsible for obtaining and documenting all information related to Dealer’s certification on an Order or claim to MAZDA for payment under a Mazda Fleet Program. Such documentation shall include but not be limited to documents substantiating the eligibility of each company for which Dealer submits an Application for Fleet Account Eligibility, all sales records, odometer mileage statements, registration and/or title applications and temporary registration statements, documents substantiating the accuracy of all information submitted by Dealer, and documents substantiating compliance of Eligible Fleet Accounts with the Vehicle in Service requirement stated below.

VEHICLE IN SERVICE REQUIREMENT – To help ensure that all sales of Eligible Fleet Vehicles to Eligible Fleet Accounts are bona fide transactions, each such Eligible Fleet Vehicle must be (i) placed in use (or leased for use) within thirty (30) days after delivery to the Eligible Fleet Account and (ii) kept in fleet service in Canada and not resold by the Eligible Fleet Account for the following periods of time: six (6) months and 15,000 km if the Eligible Fleet Account is a Daily Rental Company; twelve (12) months and 20,000 km if the Eligible Fleet Account is a Commercial Fleet; and twelve (12) months and 20,000 km if the Eligible Fleet Account is a Commercial Leasing Company.

AUDIT – MAZDA reserves the right to verify all information submitted by or with respect to any Dealer, Eligible Fleet Account, or Eligible Fleet Vehicle in connection with a Mazda Fleet Program, including but not limited to all documents retained by Dealer as required above. MAZDA and its representatives shall have the right upon MAZDA’s request to inspect all Dealer records at Dealer’s premises during normal business hours for such purpose and Dealer agrees to provide any other documentation requested by MAZDA and otherwise cooperate with and assist MAZDA in such audit.

CHARGEBACKS – MAZDA is relying upon Dealer to accurately inform MAZDA of all information relating to the eligibility of vehicles claimed to be Eligible Fleet Vehicles by Dealer under a Mazda Fleet Program and to monitor Eligible Fleet Accounts for compliance with the Vehicle in Service requirement stated herein. If MAZDA determines that Dealer has provided MAZDA with any incorrect, incomplete or misleading information in connection with the Mazda Fleet Program, that Dealer has materially breached or failed to perform its agreements under the Mazda Fleet Program, MAZDA shall have the right to charge Dealer for any or all of MAZDA’s costs and expenses of auditing Dealer, and for any or all payments, credits and benefits received by Dealer under the Mazda Fleet Program. MAZDA shall also have the right to suspend Dealer’s right to participate in Mazda Fleet Programs as MAZDA determines is appropriate.

7. OTHER

NO AGENCY – Mazda Fleet Programs do not make either MAZDA or Dealer the agent, partner or legal representative of the other for any purpose. Dealer specially acknowledges that Dealer’s submission of an application for an Eligible Fleet Account or placing of an Order under a Mazda Fleet Program will not obligate MAZDA in any manner except as specified in the Mazda Fleet Program.

NO IMPLIED WAIVERS – The failure of MAZDA to require any performance by Dealer under any Mazda Fleet Program shall not affect the right of MAZDA to require such performance at any time thereafter under such Mazda Fleet Program or any other Mazda Fleet Program.

TAXES – MAZDA shall have no liability for any taxes of any kind arising from the sale of a motor vehicle under any Mazda Fleet Program, or the lease of a motor vehicle sold thereunder.

INTERPRETATION AND MODIFICATION – Whenever MAZDA is required or permitted under any Mazda Fleet Program to make any determination or interpretation, the decision of MAZDA in making such determination or interpretation shall be final and binding upon all Dealers concerned. MAZDA at any time may cancel, amend, modify, expand or revoke any Mazda Fleet Program or any provision thereof, provided that it provides Dealers prior written notice thereof.

8. ELIGIBILITY QUESTIONS

Mazda Fleet Programs have been created to help individual Mazda Dealers develop and penetrate local and national fleet markets. MAZDA does not intend for Mazda Fleet Programs to be used as a substitute for retail sales or to divert retail sales from Mazda Dealers. The following, therefore, should be kept in mind:

A. No fleet incentives are available to Dealers unless they sell an Eligible Fleet Vehicle to an Eligible Fleet Account. An "Eligible Fleet Account" is defined by the Mazda Fleet Program General Terms and Conditions as an end user that has purchased and registered a minimum of five (5) vehicles in its company name or otherwise is approved by MAZDA.

B. BROKERING OF VEHICLES – SOME CUSTOMERS/DEALERS MAY RESELL ELIGIBLE FLEET VEHICLES AS NEW VEHICLES OR OTHERWISE "BROKER" THEM RATHER THAN PLACE THEM INTO LEGITIMATE SERVICE AS INTENDED BY MAZDA. THIS COULD ADVERSELY AFFECT MAZDA DEALERS AND UNFAIRLY PLACE THEM AT A COMPETITIVE DISADVANTAGE. ANY CUSTOMER/DEALER WHO ENGAGES IN SUCH ACTIONS WILL BE SUBJECT TO AUDIT AND CHARGEBACK FOR ANY INCENTIVES PAID ON THE VEHICLES IN QUESTION. IN ADDITION, MAZDA WILL CANCEL THE FLEET AUTHORIZATION NUMBER (F.A.N.) IMMEDIATELY.

C. MAZDA requires that all fleet Orders be supported with and accompanied by a valid purchase order(s) from a customer who is an Eligible Fleet Account (an end user approved by MAZDA).

D. MAZDA depends on its authorized Dealers to comply with the written provisions and intent of Mazda Fleet Programs. Although MAZDA will take all steps it believes necessary to prevent abuses, Mazda Dealers should report promptly any concerns or problems in this area directly to Mazda’s Fleet Sales Department (905) 787-7029. It also is imperative that a Mazda Dealer who enters into a Mazda Fleet Program use its best efforts to make sure that vehicles to be delivered to a customer will be used for a bona fide purpose. In short, EVERY MAZDA DEALER SHOULD KNOW ITS CUSTOMER.