Exhibit 10.18


 


Qingnianlu Auto Mall


 


Franchised Auto Store


 


Land Lease Contract


 


 


Date of Execution: May 28, 2003


 


Place of Execution: Beijing Dongfang
Jiye Auto Mall


 

















 


Lessor:                                                      Beijing
Dongfang Jixy
Investment Co., Ltd. (“Party A”)


 


Registered
Address: 210 Yaojiayuan Road, Chaoyang District, Beijing, 100025


 


Legal
Representative: Wang Xiaojing


 


Telephone:
85759292


 


Lessee:                                                      Lentuo
Aotong Automobile Trading Co., Ltd. (“Party B”)


 


Registered
Address: 210 Yaojiayuan Road, Chaoyang District, Beijing, 100022


 


Legal
Representative: Liang Donglü


 


Telephone:
67783419


 


Chapter One Recitals


 


Article
1                                                   Pursuant to the
general layout of Beijing Municipal urban planning, following the spirit of
Document [2002 Lü Gui Yi Zi No. 62] issued by Beijing Municipal Commission of
Urban Planning and Document Jing Ji Shang Zi [2003] No. 415, and after adequate
negotiations, Party A and Party B hereby reach agreement as follows for mutual
observance based on the principle of equality, reciprocity, willingness and
paid use with respect to Party B’s construction of a
franchised auto store (a 4S dealership)
in the Mall (as defined below).


 


Article
2                                                   Party B shall
be a company duly incorporated and possessing the right to conduct auto sales,
repair and spare part supply and having legally obtained a franchise from the Audi brand auto manufacturer.


 


Chapter Two Interpretation of Certain Defined Terms


 


Article
3                                                   For purposes of
this Contract, the following terms shall have the meanings set forth below:


 


“Mall”
means Beijing Dongfang Jiye Investment
Co., Ltd. Qingnianlu Auto Mall approved under the Document numbered 2002 Lv Gui
Yi Zi No. 62 issued by Beijing Municipal Commission of Urban Planning and the
Document numbered Jing Ji Shang Zi [2003] No. 415.


 


“Leased
Premises” means the site selected by Party B as marked on the Approved Map of
the Architectural Planning Design attached hereto as Appendix 1, which is
located at Zone G1 in the Mall and covers an area of 6,308 square
meters, subject to the area as actually measured.


 


“Franchised Auto Store” or the “Store” means the
building for the Franchised Auto Store
to be located on the Leased Premises at the Zone in the Mall selected
by Party B, which shall be constructed in accordance with the approval issued by the competent planning authority at the application of Party A.


 


Chapter Three                Term of
Use of the Leased Premises


 


Article
4                                                   Following the
effectiveness of this Contract, Party B shall have the right to use and build
the Store on, the Leased Premises,
from July 1, 2003 to June 1, 2023.


 


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Chapter Four                       Rent,
Deposit and Payment Terms


 


Article
5                                                   Party B is
willing to pay Party A the rent for the Leased Premises as follows:


 


(1)                                  From July 1,
2003 to June 30, 2004, the rent shall be One Million Three Hundred Thousand
Renminbi only;


 


(2)                                  From July 1,
2004 to June 30, 2005, the rent shall be One Million Four Hundred Thousand
Renminbi only;


 


(3)                                  From July 1,
2005 to June 30, 2006, the rent shall be One Million Five Hundred Thousand
Renminbi only;


 


(4)                                  From July 1,
2006 to June 30, 2007, the rent shall be One Million Five Hundred Thousand
Renminbi only;


 


(5)                                  From July 1,
2007 to June 30, 2008, the rent in an amount of One Million Six Hundred
Thousand Renminbi only;


 


(6)                                  From July 1,
2008 to June 30, 2009, the rent shall be One Million Seven Hundred Thousand
Renminbi only;


 


(7)                                  From July 1,
2009 to June 30, 2010, the rent shall be One Million Eight Hundred Thousand
Renminbi only;


 


(8)
For the rest of the term of this Contract beginning from July 1, 2010, the annual rent for each year shall be
One Million Eight Hundred Thousand Renminbi only and shall remain
unchanged.


 


Article 6                                                   The rent for the period from July 1, 2003 to December 31, 2003 shall be
paid by Party B to Party A in a lump-sum within three days as of the
effectiveness of this Contract.


 


Article 7                                                   The rent for the second year and the third year as from the
effectiveness of this Contract shall be paid on a semi-annual basis, which
means that Party B shall pay the rent for the first half of the year prior to
January 10 of the year, and the rent for the second half of the year prior to
July 10 of the year.


 


Beginning from the fourth year after this Contract
becomes effective to the expiration of this Contract, Party B shall pay the
rent on an annual basis prior to January 10 of each year.


 


The payment date set forth on the electronic wire
instrument or on the incoming payment voucher of check shall constitute the
date of rent payment.


 


Article 8                                                   Party B shall pay Party A a construction deposit in an amount of
RMB500,000 at the date of execution, which shall be converted into performance
guarantee after Party B’s commencement of business at the Store.  Party A shall repay such amount to Party B in
a lump-sum within 30 days as of any termination of this Contract.


 


The said deposit may be set off against any rent or
liquidated damages with which Party B is in arrears.  In case of any such setoff, Party A shall
request Party B in writing to make up for any shortfall in the deposit.  In case Party B fails to perform its
obligation to make up for the 


 


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shortfall within 30 days as from its receipt of
such notice from Party A, Party A shall have the right to terminate this
Contract.


 


Chapter Five  Use Right and Title to the Store


 


Article 9                                                   Within the term of the lease agreed herein, Party B shall have the right
to use and build the Store on, the Leased Premises.


 


Article 10                                             As a merchant attraction project, the buildings on the ground of the
Leased Premises shall be constructed with the investment of Party B and the
ownership thereof shall therefore be vested in Party B.  Party A shall assist Party B to obtain the
title to the buildings on the Leased Premises within the first 8 years of the
term of this Contract, with all the expenses arising therefrom to be borne by
Party B.


 


Article 11                                             Upon the expiration of this Contract, the Franchised Auto Store
constructed with the investment of Party B shall become owned by Party A, and
neither party hereto shall have any liability to the other.


 


Chapter Six   Construction
of the Store


 


Article 12                                             Party A represents that it shall prior to July 1, 2003, provide
the interconnections to three public utility systems and the leveling of the
ground required in connection with the construction on the Leased
Premises.  Party B shall conduct the
design and the construction strictly in accordance with the area of the land
used and the area of the land occupied as set forth on the Planning Drawings.  The design and construction of the Store
shall be based on the planned economic indices as set forth in the Notification
on the Approved Design Plan.  Prior to
the commencement of the construction on the Leased Premises, Party A shall at
Party B’s expense, provide Party B with the Report of the Results of Pile
Setting and Route Laying and the Geological Survey Report issued by the
relevant survey and mapping department. 
Party B shall upon completion of the design of the Store, submit to
Party A two sets of the design drawings for Party A’s confirmation and
submission to the competent planning department for examination and approval.


 


Article 13                                             The construction of all the water supply and discharge facilities,
electrical power supply facilities, gas supply facilities, roads planned for
urban areas and greening projects outside each franchised auto store in the
Mall shall be organized and conducted by Party A on a centralized basis, with
the expenses for such construction paid by all the franchised stores in
proportion to the area actually occupied by each franchised store prior to the
commencement of the construction.


 


Article 14                                             Party B shall accept Party A’s centralized management of the
construction site of the Store.  Party A
shall have the right to charge Party B the construction management fee at 1% of
the total price of the Store construction project.  In the event that Party B violates such
construction policy and causes any direct economic loss to any other party,
such loss shall be Party B’s liability.


 


Article 15                                             Party B shall accept the supervision and management of the project
supervisor over the quality of the works at the construction site of the
Store.  Party A shall have the right to
receive the project supervision fee from Party B on behalf of the project
supervisor.


 


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Article 16                                             All fees charged by relevant governmental authorities in connection with
the construction of the Store shall be solely paid by Party B.


 


Chapter Seven                 Rights
and Obligations of Party A and Party B


 


Article
17                                             Party A shall
be responsible for providing the market management services, inter alia, in
respect of public sanitation, fire protection, security and cleaning, and shall
have the right to advise and request the Store to comply with the applicable regulations
related to fire protection, environmental protection and security.


 


Article
18                                             Party A shall
be obligated to formulate the policies in respect of the management of the auto
trading market of the Mall in accordance with the relevant laws and regulations
and the regulatory documents issued by the competent governmental authorities,
in order to maintain the overall image of the Mall and the interests of the
Store.  Party B shall abide by such
policies and Party A shall not interfere with Party B’s normal independent
business operation.


 


Article
19                                             Party A shall
coordinate the public relations between Party B and the local government in
accordance with the preferential policies issued by the Beijing Government, to
ensure that Party B enjoys the applicable preferential treatment.


 


Article
20                                             Party A shall
be obligated to notify Party B of whether it decides to continue to use the
Store within three months prior to the expiry of the term of use of the Store,
and Party B shall have a right of first refusal under the same terms and
conditions.


 


Article
21                                             Party B shall
change its registered address to the address of the Leased Premises indicated
herein within one year from the date of this Contract.


 


Article
22                                             Party B may
only deal in auto brand franchised to it and the spare parts and services
related to such auto brand in its Store, and Party B shall assume all the legal
liabilities arising out of its violation of such provision.


 


Article
23                                             The autos sold
by Party B in the Mall shall be the (i) qualified products indicated in the Catalogue of PRC Automobile, Civilian
Modified Vehicles and Motorcycle Manufacturing Enterprises and Products,
and (ii) imported autos which are permitted to be dealt in in accordance with
the applicable law.


 


Article
24                                             Party B shall
reasonably use the public places and ancillary facilities in the Mall.  In the event of any damages caused by Party B
to the public facilities and equipment in the Mall, Party B shall be obligated
to repair or make compensation.


 


Article
25                                             In the event
that Party B assigns the operational right of the Store to a third party (the
purpose of the Store shall remain the same), if such assignment requires any
filing with competent governmental authorities in accordance with applicable
law, Party B shall deliver a copy of the filing document to Party A after it
conducts such filing formalities.


 


Article
26                                             In case of any
violation of applicable law or Party A sustains any losses arising from the
transfer of the Store by Party B to any third party, Party B and such third
party agree to assume joint liabilities to Party A with respect to the rights
and obligations agreed hereunder.


 


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Article
27                                             Party B shall
erect signboards and the brand logo at the place designated by Party A or
agreed by both parties within the Leased Premises, and shall not erect any
signboard in the Mall without Party A’s consent; otherwise, Party A shall have
the right to remove the same.


 


Article
28                                             If Party B
needs to erect signboards and signage in any other places within the Mall,
Party B shall provide the design to Party A for Party A to make the same at the
cost of Party B.


 


Article
29                                             Party B shall
be responsible for the advertisement administration fees or license fees
charged by the applicable governmental authorities in accordance with the
relevant laws and regulations.


 


Article
30                                             If Party B
fails to timely pay the rent for the Leased Premises, it shall pay a penalty
for late payment on a daily basis, which shall be equal to (i) 0.2% of the
overdue amount, if the period during which an amount remains overdue is less
than 30 days, or (ii) 0.5% of the overdue amount, if the period during which an
amount remains overdue ranges between 30 days and 60 days.


 


The
abovementioned overdue payment may also be deducted from the deposit of Party
B.


 


Article
31                                             If Party B is
in arrears with any rent for the Leased Premises for more than 60 days, or in
the event of any circumstances described under Article 8 of this Contract, Party A shall be entitled to terminate this Contract
by notifying Party B in writing, under which circumstance, Party B shall not
request Party A to return its deposit and the Store shall be vested in Party A
without any payment required to be made by Party A upon the termination of this
Contract.


 


Chapter Eight                    Miscellaneous


 


Article
32                                             The conclusion,
performance and interpretation of this Contract shall be governed by the PRC
law.


 


Article
33                                             Any dispute
arising out of this Contract shall first be resolved through friendly negotiation
between the two parties.  If such
negotiation fails, either party may file a lawsuit to the competent court.


 


Article
34                                             Any amendment
to this Contract shall be in writing and signed by both Party A and Party B.


 


Article
35                                             All notices and
other communications hereunder shall be in writing and shall be given or made
(and shall be deemed to have been duly given or made upon receipt) by delivery
in person or by facsimile to the respective parties hereto at the addresses of
the parties indicated herein.  In case of
any change of the address of either party, the party shall notify the other
party within ten days of such change.


 


Article
36                                             In the event
that a party is unable to perform all or portion of its obligations hereunder
in accordance with the conditions agreed herein due to any force majeure event,
the party affected by such force majeure event (the “Affected Party”) shall
immediately notify the other party, and shall provide the documentation in
respect of such force majeure event within 15 days following the occurrence of
the same, including a statement setting forth 


 


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the
reasons for any delayed performance, partial performance or inability to
perform the obligations hereunder.


 


Article
37                                             In case of any
force majeure event, both parties shall decide whether to amend this Contract
or partially or entirely discharge the obligation of the Affected Party based
on the effect of such event on the performance of this Contract.


 


Article
38                                             The appendix
hereto shall be a part of this Contract and shall have the same legal effect as
this Contract.  Any and all prior oral or
written agreement between both parties with respect to the subject matters
hereunder shall become invalid as of the date hereof.


 


Article
39                                             Matters not
included herein shall be subject to a supplemental agreement between Party A
and Party B.


 


Article
40                                             Both parties
hereby agree that (i) neither party may disclose the content of this Contract
to any media or the public; (ii) the parties shall duly keep this Contract to
ensure that the employees of either party may not have access to this Contract,
and (iii) neither party may disclose this Contract to any third party
irrelevant to this Contract.


 


Article
41                                             This Contract
shall be executed in four counterparts, which shall become effective after
being signed and sealed by both Party A and Party B.


 


 


	
  Party
  A:      Beijing Dongfang Jiye
  Investment Co., Ltd.

  	
   

  	
  Party B: Lentuo Aotong Automobile
  Trading Co., Ltd.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Signed
  by the legal representative:

  	
   

  	
  Signed
  by the legal representative:

  
	
   

  	
   

  	
   

  
	
  Corporate
  Seal of Party A:

  	
   

  	
  Corporate
  Seal of Party B:

  
	
   

  	
   

  	
   

  
	
  Dated
  May 28, 2003

  	
   

  	
  Dated
  May 28, 2003

  



 


Appendices:
1) Approved Map of the Architectural Planning Design; 2) the Document numbered
Jing Ji Shang [2003] No. 415 issued by Beijing Municipal Commission of
Development and Reform; 3) Approved Planning Documents numbered (2002) Lü Gui
Zi No. 62; and 4) copy of the business license


 


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