Document:

Exhibit 10.6

 

FAW-Mazda
Motor Sales Co., Ltd.

 

Dealership Contract

 

 

Preamble

 

This
contract (this “Contract”) is entered into for the purpose of establishing an
authorized automobile dealer integrated with the functions of Product sale,
supply of services and spare parts for the Products as well as information
feedback in respect of the Products.

 

Article
1 Parties to the Contract

 

This
Contract is entered into by and between FAW-Mazda Motor Sales Co., Ltd., a
corporation established under the laws of the People’s Republic of China (“PRC”)
.., with its principal business address at 4936 Dongfeng Avenue, Lvyuan
District, Changchun City, Jilin Province, PRC (the “Company”) and
                              ,
a company established under the laws of PRC, with its registered office at
                            (the
“Dealer”) on [insert date] in [insert place of execution]. 
This Contract shall be executed in four counterparts with each of the
parties to hold two.

 

The
Company is the supplier of the Products, which intends to sell the Products in
the PRC (excluding the Hong Kong Special Administrative Region, Macaw Special
Administrative Region and Taiwan).

 

The
Dealer intends to obtain from the Company the right to sell the Products in an
agreed territory to act as an authorized dealer of the Company.

 

The
Company agrees to grant the Dealer a right to sell the Products in a particular
region in the PRC (excluding the Hong Kong Special Administrative Region,
Macaw, and Taiwan) on a non-exclusive basis.

 

Article
2 Owner, General Manager, Authorized Representative, Ownership Structure of the
Dealer

 

The
Company entered into this Contract with the Dealer based on the following
representations:

 

1.
The following person is the authorized representative of the Dealer, who shall
have the right to deal with all the business activities and any other
transactions between the Company and the Dealer under this Contract, and shall
have the capacity, qualification and authority to sign contracts with the
Company and assume obligations of any nature to the Company, in each case, on
behalf of the Dealer:

 

	
  Name
  of the legal representative:

  	
   

  
	
   

  	
   

  
	
  ID
  Card No.:

  	
   

  
	
   

  	
   

  
	
  Domicile
  address:

  	
   

  
	
   

  	
   

  
	
  Name
  of the general manager:

  	
   

  
	
   

  	
   

  
	
  ID
  Card No.:

  	
   

  
	
   

  	
   

  
	
  Domicile
  address:

  	
   

  

 

2

 

2.
The ownership structure of the Dealer

 

Registered
capital: RMB

 

Names
and shareholding percentages of each investor:

 

 

 

Article
3 Change of the Shareholding Structure, General Manager and Legal
Representative of the Dealer

 

Any
change of the shareholding structure, the general manager or the legal
representative of the Dealer shall require prior written consent of the
Company, other than any change due to death of any of the above mentioned
person, provided that the Dealer shall promptly notify the Company of the
same.  Any above change, consent or
notice shall be incorporated into this Contract as the appendices hereto.

 

Article
4 Interpretations and Definitions

 

1.
Interpretations [intentionally omitted]

 

2.
Definitions

 

In
this Contract:

 

(1)
“Company” means FAW-Mazda Motor Sales Co., Ltd., with its principal business
address at 4936 Dongfeng Avenue, Lvyuan District, Changchun City, Jilin
Province, PRC.

 

(2)
“Dealer” means the party indicated in Article 1 who enters into this Contract
with the Company.

 

(3)
“Owner of the Dealer” means the entity or person listed in Article 2.4 hereto.

 

(4)
“General Manager of the Dealer” means the person listed in Article 2.2 hereto.

 

(5)
“Authorized Representative of the Dealer” means the person listed in Article
2.3 hereto.

 

(6)
“Vehicles” means the brand new Products of various models listed in Schedule [·].

 

(7)
“Products” means all Vehicles, Original Spare Parts and any other products
provided by the Company to the Dealer for it to directly sell to users.

 

(8)
“Original Spare Parts” means any accessories or spare parts (i) supplied by the
Company or any Affiliate of the Company with the approval of the Company, or (ii) produced by any other companies in
accordance with the standard designated by the Company, which have been tested
and accepted by the Company and labeled with the relevant trademark to indicate
they are the “Products” hereunder.

 

3

 

(9)
“Affiliate” means Mazda Motor Corporation and FAW Car Co., Ltd. related to the
Company.

 

(10)
“Dealer Price” means the sum of all the prices and expenses payable by the
Dealer to the Company in accordance with Article 6 of this Contract.

 

(11)
“Distribution Center” means the distribution center designated by the Company
to the Dealer, and the Products ordered by the Dealer shall be delivered from
such distribution center.

 

(12)
“Dealer’s Facilities” means the business premises established in accordance
with Article 12 and Schedule [·] hereof.

 

(13)
“Agreed Delivery Place” means the Dealer’s Facilities or any other places
agreed by the Company and the Dealer for the delivery of the Products by the
Company.

 

(14)
“Dealer’s Business” means the business conducted by the Dealer within a specified
territory, including without limitation, promotion, retail sale and aftermarket
services in respect of the Products.

 

(15)
“Territory” means the regions listed in Schedule [·] and agreed by the Company to be the area where the Dealer is
authorized to sell the products and provide related aftermarket services.

 

(16)
“Services” means the inspection, testing, repair, adjustment, maintenance,
calibration and any other services in respect of new automobiles.

 

(17)
“Client Directions” includes a product manual, maintenance manual,
advertisement manual and certain other documents for client’s reference.

 

(18)
“Trademark” means any trademarks, trade names or the name of the Company
legally used, registered or owned by the Company.

 

(19)
“Dealer’s Planned Sales Volume” means the annual average sales volume of the
Dealer estimated by the Company, while it neither represents the actual sales
volume of the Dealer nor the business target which should be achieved by the
Dealer in order to perform the obligations set forth under Article 9.2
hereunder.

 

 (20) “FCC” means the FAW Car Co., Ltd..

 

 (21) “FMSC” means FAW-Mazda Motor Sales Co.,
Ltd.

 

(22)
“Mazda” means the Mazda Motor Corporation.

 

Article
5 Right to Sell

 

1.
Vehicles

 

Subject
to the determination of the Company at its sole discretion, in accordance with
the standards set by the Company, that the Dealer has the capacity to perform
all its obligations hereunder, the Company shall agree to satisfy the Dealer’s
demand for Vehicles and the Dealer shall irrevocably agree to purchase from the
Company the Vehicles set forth under 

 

4

 

Schedule
[·] hereto and sell the same
to its clients.  The Company shall retain
the right to reject the orders of the Dealer, and may amend or cancel the
Dealer’s orders in accordance with the actual production capacity of the
Company.

 

2.
Products

 

The
Company shall accept the Dealer’s orders and sell the Products to the Dealer in
accordance with the terms of this Contract. 
The Dealer agrees that the right to sell the Products granted to it
hereunder shall not be an exclusive distribution right.  The parties agree that in case of any
discrepancy between this Contract and any of its ancillary contracts, this
Contract shall prevail.

 

3.
Supply and Modification of the Products

 

Where
necessary, the Company may at any time (i) reduce the amount of or cease any
Product supply; (ii) change the design of the Products, or (iii) supply any new
Products or Products from different product line or of different series or
model, in each case, without prior notice to the Dealer and without any
liability or obligation to the Dealer.

 

Article
6 Price

 

The
price paid by the Dealer for the Products purchased from the Company shall be
determined by the Company, which shall be subject to adjustments made by the
Company without prior notice to the Dealer.

 

Article
7 Payment

 

Upon
receiving the payment from the Dealer or any other person on behalf of the
Dealer made in one of the following means selected by the Company, the Company
shall provide the Products to the Dealer in accordance with the relevant
requirements of the Company:

 

(1)
in cash;

 

(2)
any other means of payment agreed by the Company in writing.

 

Article
8 Delivery and Shipment of Products

 

1.
Agreed Delivery Place

 

(1)
The Company shall deliver the Products to the Dealer at the Agreed Delivery
Place.

 

(2)
Upon delivery, the Dealer shall check the Vehicles and the Original Spare Parts
as well as the accompanying documents and tools.  If the Dealer finds any defect, damage or
fault, it may claim losses during the period agreed by the Company and the
Dealer.

 

2.
Obligations of the Dealer

 

Unless
otherwise agreed between the Company and the Dealer in writing, any freight and
any other expenses arising out of the delivery of the Products to the place
other than the Agreed Delivery Place shall be burdened by the Dealer.

 

5

 

3. Rights of the Company

 

The
Company shall have the right to select the means of transportation and
transportation routes, and shall select a transportation company with good
reputation, transportation experience and expertise.  The Dealer agrees that the Company is not the
guarantor or insurer of the transportation company selected by the Company.

 

Article
9 Sales Responsibility and Performance

 

1.
Responsibility of the Dealer

 

The
Dealer shall proactively promote at its business premises the Vehicles to the
clients within the Territory and devote every effort to develop potential
clients in order to acquire reasonable market share.

 

The
forgoing provision shall not prevent the Company from supplying any Products,
directly or through any third parties, to any person other than the Dealer
within the Territory.

 

2.
The Dealer’s Performance Evaluation

 

The
Dealer’s performance in respect of the sale of Vehicles during the period
determined by the Company shall be evaluated based on the reasonable standards
established by the Company, which shall include:

 

(1)
The proportion of the volume of the Vehicles sold by the Dealer within the
Territory to the following sales volume:

 

A.
the total volume of the automobiles sold by the Dealer within the Territory;

 

B.
sales target of the Vehicles proposed by the Company for the Dealer;

 

C.
the total volume of the Vehicles sold within the territory designated by the
Company.

 

(2)
the comparison of the sales performance between the Dealer and all the other
dealers

 

If
the Company does not satisfy with the performance of the Dealer, it shall
notify the Dealer in writing and provide the Dealer with reasonable opportunity
to explain.

 

Article
10 Service Responsibility

 

1.
General Responsibility

 

The
Dealer shall establish and maintain a well-trained and highly qualified service
team to provide high quality services at the Dealer’s Facilities to the owners
and users of the Products, including the owners and users of the Products
within the Territory (regardless of whether such Vehicles are sold by the
Dealer or any other dealers), in accordance with the standards and procedures
formulated by the Company.

 

2.
Check and Services Free of Charge Prior to the Product Examination and Delivery
[intentionally omitted]

 

3.
Maintenance and Repair Services

 

6

 

(1)
The Dealer shall provide periodical services requested by the owners or users
of the Vehicles at reasonable and competitive fee rates (regardless of whether
such Vehicles are sold by the Dealer or any other dealers) in accordance with
the Service Manual of Mazda Brand Autos designated by the Company.

 

(2)
The Dealer may also decorate the Vehicle (regardless of whether such Vehicles
are sold by the Dealer or any other dealers) in accordance with the reasonable
request of its owner or user, provided that such decoration shall not damage or
adversely affect the original function of the Vehicle.

 

4.
Quality Warranty and Service Plan

 

The
Dealer shall provide necessary quality warranty and service plan for the
Products (regardless of whether such Vehicles are sold by the Dealer or any
other dealers) in accordance with the Administrative Regulations
on Motor Vehicle Repair Industry, the Service Manual of designated
Mazda Brand Autos or the requirements of the Company on the owners or users of
the Products, and such service shall be based on the quality warranty standard
provided by the Company and any other provisions set forth in the notices of
the Company.

 

5.
Service Tools and Equipment

 

The
Dealer shall purchase and maintain in the Dealer’s Facilities service tools and
equipment required by the Company, as well as reasonably required special fault
diagnostic equipment and other tools and machinery.

 

6.
Performance Evaluation

 

During
the term of this Contract, the Company may conduct performance review against
the Dealer to determine whether the Dealer performs it obligations in a
satisfactory way.

 

7.
Dealer’s Obligation of Using the Original Spare Parts

 

The
Dealer shall proactively promote the Original Spare Parts to its Clients within
the Territory.

 

8.
Performance Evaluation on the Sale of Original Spare Parts

 

The
Dealer’s performance on the sale of Original Spare Parts during the period
determined by the Company shall be evaluated based on the reasonable standards
established by the Company, which shall include, but not limited to:

 

(1)
the proportion of the Dealer’s sales volume of the Original Spare Parts to the
sales target proposed by the Company to the Dealer;

 

(2)
the comparison of the sales performance between the Dealer and other dealers.

 

9.
Use of Original Spare Parts

 

The
Company encourages the Vehicle users to buy Original Spare Parts from the
Dealer and the Dealer shall only use Original Spare Parts in repairing
Vehicles.

 

7

 

Article
11 Liability Related to Product Quality Warranty

 

1.
Quality Warranty Provided by the Company

 

The
Company may inform the Dealer of the quality warranties applicable to the
Products in writing from time to time. 
Except for the quality warranties provided in accordance with this
Article 11, the Company does not provide any other express or implied quality
warranties to the Dealer or any client of the Dealer, and the Dealer shall not
mislead its clients into believing that the Company provides such other quality
warranties.

 

2.
Quality Warranty on Vehicles

 

The
Company provides quality warranties on the Vehicles to the clients of the
Dealer, which shall be implemented by the Dealer at its facilities.  The Dealer does not have the right to provide
any other warranties or guarantees with respect to the Vehicles on behalf of
the Company; provided, however, that the Dealer may provide additional
warranties or guarantees with respect to its repair work on the Vehicle it
repairs.  The Company does not have any
responsibility or obligation with respect to such additional warranties or
guarantees.

 

3.
Quality Warranties on Original Spare Parts

 

The
Company shall provide quality warranties on the Original Spare Parts to the
Dealer.

 

4.
Modification of Products

 

(1)
Prior to the sale or delivery of the Vehicles to Clients, the Dealer shall not:

 

A.
make any additions, modifications, changes or adjustments that may adversely
affect the function, durability, stability, reliability, quality or safety of
the Vehicles;

 

B.
make or allow any other person to make any modification to the Vehicles or make
any additions, modification, changes or adjustments inconsistent with the
technology, machinery, function or any other specification provided by the
Company.

 

(2)
if the Dealer breaches Article 11.4, the quality warranty provided by the
Company shall terminate immediately, and if such Vehicle is sold by the Dealer,
the Dealer shall:

 

A.
inform its clients of the nature and degree of such additions, modifications,
changes or adjustments;

 

B.
inform its clients of the termination of the quality warranty in respect of
such Vehicle provided by the Company;

 

The
Dealer shall assume any and all liabilities with respect to the losses arising
from its breach of Article 11.4.

 

(3)
If the Dealer or any other person acting on behalf of the Dealer installs any
accessories, adds any equipment or maintenance equipment in or to the Vehicle
prior to the delivery of such Vehicle by the Dealer to the client, the Dealer
shall inform the client that the quality warranty provided by the company does
not apply to such accessories and additions.

 

8

 

(4)
In case of any additions, modifications, changes or adjustments to/of the
Original Spare Parts made by the Dealer or any other person permitted by the
Dealer without prior written consent of the Company, the quality warranty
provided by the Company on such Original Spare Parts shall immediately
terminate.

 

Article
12  Liability Related to Facilities

 

1.  Liability Related to Dealer’s Facilities

 

The
Dealer shall establish and maintain the Dealer’s Facilities and install
necessary equipment at the place designated by the Company.  Without prior written consent of the Company,
the Dealer may neither move its business premises to any other place, nor
establish any other business premises for the sale and service of the Products
in any other places.

 

Without
prior written consent of the Company, (i) the Dealer may not make any change or
modification to the area, interior layout or design of the Dealer’s Facilities;
(ii) the Dealer’s Facilities may not be used for purposes other than those
provided hereunder.

 

2.
Business Hour [intentionally omitted]

 

Article
13 Other Liabilities of the Dealer and the Company

 

1.
Working Capital

 

The
working capital of the Dealer shall not be lower than the amount required by
the Company.

 

2.
Logo and Signage [intentionally omitted]

 

3.
Accounting System

 

The
Dealer shall comply with the applicable PRC laws and regulations, regardless of
adopting what kind of accounting system.

 

4.
Financial Report

 

Upon
request by the Company, the Dealer shall provide the Company with its balance
sheet and profit statement, and (i) provide a complete, accurate and true
statement regarding its financial condition, monthly and annual operating
results of the Products and its used automobile business, at the time and in
the manner designated by the Company; (ii) provide sales report and any other
report requested by the Company from time to time, including without limitation,
the specific daily sales data.  The
Company shall keep in confidence all the financial materials provided by the
Dealer.

 

5.
Sales Report and Other Report

 

The
Dealer shall provide detailed materials related to the sale of Vehicles, sales
report and any other report related to its business reasonably required by the
Company.

 

6.
Retail Price

 

The
Dealer must sell the Products at the price fixed by the Company.

 

9

 

7.
Clients’ Claims

 

The
Dealer shall endeavor its best efforts to promptly respond to the clients’
inquiries, requests or complains related to the promotion, sale or service of
the Products, and shall report to the Company any inquires, requests or
complains that it cannot solve.

 

8.
Inspection, Examination, Test, Guidance and Check

 

The
Dealer shall allow the person designated by the Company to, during normal
business hours,

 

·                  inspect the Dealer’s Facilities, the dealer’s
business and the Products inventory

 

·                  test the workshop, instruments, tools and
equipment of the Dealer;

 

·                  check the services provided by the Dealer to
the owners or users of the Products;

 

·                  review the records and documents related to
the business of the Dealer.

 

With
respect to any payment, discounts or any other amounts paid by the Company to
the Dealer in order to solve the claim made by the Dealer, if the Company finds
out that such claim is inappropriate or the amount paid by the Company to the
Dealer is inappropriate, the Company shall be entitled to an amount from the
Dealer equal to the above amounts or discounts it paid to the Dealer.

 

9.
Personnel [intentionally omitted]

 

10.
Consumer Satisfaction Index [intentionally omitted]

 

Article
14 Specialized Sale of Products

 

During
the term of this Contract, the Dealer shall not distribute, act as an agent of
and sale of any finished automobile of any brand other than the Mazda brand
without prior written consent of the Company.

 

Article
15 Trademark

 

During
the term of this Contract, the Dealer shall be obligated to use the protected
marks listed under the designated Auto Service and Sale Shop Image Visual
Identify System of Mazda Brand Autos, which shall be displayed on the buildings
and service system of the Dealer.  The
Dealer may only use the names and marks provided by the Company in the Products
sale and service.

 

The
Dealer agrees that it will not use the MAZDA trademark or any other names or
marks used by the Company or any of its Affiliates on the “Mazda products or
services”, whether registered or not, for purposes other than the sale of or
provision of services with respect to the Products.

 

Article
16 Inventory

 

1.
Vehicles

 

10

 

Subject
to the availability of the Products from the Company, the Dealer shall maintain
sufficient inventory of various Products supplied by the Company in order to
ensure the current market share in the Territory and satisfy the estimated
market demand of Vehicles.

 

2.
Original Spare Parts

 

Subject
to the availability of the Products from the Company, the Dealer shall maintain
sufficient inventory of various Original Spare Parts supplied by the Company in
order to ensure the current market share in the Territory and satisfy the
estimated market demand of Original Spare Parts.

 

Article
17 Order and Supply

 

1.
Order for and Supply of Vehicles

 

The
Dealer shall place orders for Products pursuant to the date and form determined
or the method approved by the Company. 
The Dealer may not cancel the orders for the Products without obtaining
the consent of the Company prior to the scheduled production date.

 

The
Company shall not be liable for any losses, damages or expenses sustained by
the Dealer arising out of any failure or delay of delivery of the Vehicles by
any manufacturing plant of the Company. 
The Company may decide whether to compensate the Dealer in an
appropriate method at its sole discretion, which shall not be deemed an agreement
or covenant.

 

2.
Order and Supply of Original Spare Parts

 

The
Dealer shall place orders for Original Spare Parts pursuant to the date and
form provided or the method approved by the Company in accordance with Article
16.2, and shall maintain sufficient inventory. 
The Company shall retain the right to refuse to accept all or portion of
the orders placed by the Dealer.  Unless
with prior written consent of the Company, the Dealer shall not cancel the
orders for Original Spare Parts it has placed.

 

Article
18 Vehicles Used for Display [intentionally omitted]

 

Article
19 Commercial Activities, Advertisements, Deposit of Clients and Guarantee to
the Company

 

1.
Commercial Activities [intentionally omitted]

 

2.
Advertisements [intentionally omitted]

 

3.
Deposit of Clients [intentionally omitted]

 

4.
Guarantee to the Company

 

The
Dealer shall or shall cause other persons to provide security or guarantee to
the Company in the form and substance required and approved by the Company.

 

Article
20 Relationship between the Dealer and the Company

 

1.
The Dealer is not an agent of the Company.

 

11

 

2.
The Dealer is not an employee of the Company.

 

3.
The employees of the Dealer do not enter into any relationship with the
Company.

 

4.
Compensation Liability of the Dealer

 

The
Dealer shall compensate the Company for and hold it harmless from any claims,
losses, damages or expenses (including legal fees) arising out of its violation
of the above provisions.

 

Article
21 Termination

 

1.
Termination

 

Either
party hereto may terminate this Contract at any time with six (6) months prior
written notice to the other party.

 

2.
Termination by the Company due to reasons attributable to the Dealer

 

In
case of any of the following events, the Company may immediately notify the
Dealer in writing of its intent to terminate this Contract, and this Contract
shall be deemed terminated upon the Dealer receiving such notice:

 

(1)
The Dealer transfers or attempts to sell, transfer or assign this Contract to
any other person, or change the direct or indirect ownership, shareholding
percentage, right of control or right of management of the owner of the Dealer
set forth under Article 2, in each case, without prior written consent of the
Company;

 

(2)
The Dealer sells, transfers, assigns or otherwise disposes of the Dealer’s
business premises (including the land) described in Schedule [·] hereto or the Dealer’s interests in the Dealer’s
Facilities without prior written consent of the Company;

 

(3)
The Dealer commits any illegal, dishonest, disreputable, misleading or
fraudulent acts, which deemed by the Company to cause material adverse effect
to the Company, other dealers of the Company or the Products;

 

(4)
The Dealer becomes bankrupt or insolvent;

 

(5)  The Dealer fails to obtain or is deprived of
the governmental approval required for the business activities agreed
hereunder;

 

(6)
The Dealer sell the Vehicles to other retailers without consent of the Company;

 

(7)
The Dealer fails to achieve its sales target or market share target for several
times, unless due to the whole market reason or any reasons beyond the control
of the Dealer;

 

(8)
The Dealer violates any of the provisions hereunder, or the Company determines
that the Dealer does not have the capacity to increase the market share of the
Products; or the Dealer violates any provisions or representations under any
guarantee documents executed and delivered by the Dealer in accordance with
this Contract, or such provisions or representations become invalid; or the
Dealer is punished due to its violation of the annual sales policy for the then
current year for consecutive two years;

 

12

 

(9)
The Dealer fails to solve issues related to personnel, structural organization
or finance, which affects the performance of any material terms of this
Contract; and

 

(10)
The Dealer violates any PRC laws, policies or administrative regulations.

 

3.
The Company may terminate this Contract with ninety (90) days notice in writing
to the Dealer if the Dealer fails to perform its obligations under Article 9,
10, 11, 12 and 13.

 

4.
If the Company decides to enter into a new contract with the Dealer with
respect to the Products, the Company may terminate this Contract with thirty
(30) days written notice to the Dealer.

 

Article
22 Post-termination Obligation of the Dealer

 

1.
Upon termination of this Contract, the Dealer shall cease to be the authorized
dealer of the Company.

 

2.
Upon termination of this Contract, the Company shall have the right to cancel
all the outstanding orders for Products it has received.

 

3.
Upon termination of this Contract, the Dealer shall transfer to the Company or
the person designated by the Company all the outstanding orders for the Products
it enters into with its clients and all the deposits of its clients.

 

4.
Upon termination of this Contract, the Dealer shall deliver to the Company or
the person designated by the Company all the plans in connection with repair,
marketing and promotion of the Products and any other service records.

 

5.
Upon termination of this Contract, the Dealer shall immediately repay the
Company or any Affiliate all the amounts owed to the Company or such Affiliate.

 

6.
Removal of Logo and Signage

 

Upon
termination of this Contract, the Dealer shall (i) remove all the logos of the
Company or any Affiliate used by the Dealer; (ii) return all the logos and
signage to the Company at the cost of the Dealer; (iii) remove or destroy all
trademarks and logos of the Company or any Affiliate used on the items for
business purpose at the cost of the Dealer; (iv) stop advertising it as the
authorized dealer of the Products, and (v) not engage in any activities
indicating that it is or was an authorized dealer of the Products.

 

The
Dealer shall compensate the Company for, and hold the Company harmless from all
losses, damages, liabilities, expenses (including any legal fees) resulted from
any violation by the Dealer of any item of Article 22.6.

 

7.
Termination of other Contracts

 

Upon
termination of this Contract, the Company shall be entitled to (i) request its
Affiliates to terminate any other contracts with the Dealer; (ii) terminate any
other contracts with the Dealer.

 

8.
Products Held by the Dealer Upon Contract Termination

 

13

 

Upon
termination of this Contract, the Company may determine at its sole discretion
to (i) assist the Dealer in the disposal of the unused and undamaged Vehicles;
(ii) purchase back all or portion of the unused and undamaged Vehicles of model
year as at the termination date at the price determined by the Company; (iii)
purchase back the unused and undamaged Original Spare Parts and any other
equipment and machinery used in connection with its aftermarket service and in
good condition, at the price determined by the Company.

 

9.
Title Certificate

 

Where
the Company purchases back the Products in accordance with Article 22.8, the
Dealer shall delivered to the Company the certificates evidencing that there is
not any encumbrance on such Products.  If
there is any encumbrance on such Products, the parties shall enter into an
agreement pursuant to which the Company shall purchase such Products at an
agreed price and such encumbrances shall be released upon the execution of such
agreement.

 

10.
Exercise of the Rights against the Collaterals

 

The
Company may exercise its security rights under Article 19.4 at appropriate time
without affecting any other rights of the Company hereunder.

 

Article
23 Miscellaneous

 

1.
This Contract shall be governed by and construed in accordance with the laws of
the People’s Republic of China.

 

2.
The Company shall have the right to select other dealers to sell the Products
within the Territory.

 

3.
The Dealer’s rights to dispose of its interests, rights, assets or business

 

Without
prior written consent of the Company, the Dealer shall not sell, transfer,
assign to any third party or otherwise dispose of any rights under this
Contract or any rights or business qualification of the Dealer.

 

 4-16. [intentionally omitted]

 

Article
24 Limitation of the Company’s Liability

 

The
Company will not be liable for (i) any expenses incurred by the Dealer in its
performance of the liabilities and obligations under this Contract, or (ii) any
direct or indirect losses, damages or expenses sustained by the Dealer or any
third party due to any act of the Dealer relying on the proposal or assistance
of the Company.

 

Article
25 Term

 

The
term of this Contract shall be two (2) years from the date set forth in Article
1 hereof.  The Company may extend the
term of this Contract for one year with thirty (30) days written notice.

 

Article
26 Execution, Amendment and Termination [intentionally omitted]

 

Article
27 This Contract shall become effective upon execution by both parties
hereto.

 

14

 

	
  FAW-Mazda Motor Sales
  Co., Ltd.

  	
   

  
	
   

  	
   

  
	
  Authorized
  representative:

  	
   

  
	
   

  	
   

  
	
  Dated:

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  [Dealer]

  	
   

  
	
   

  	
   

  
	
  Authorized
  representative:

  	
   

  
	
   

  	
   

  
	
  Dated:

  	
   

  

 

15Exhibit 10.7

 

Contract
Reference No.:

 

Membership
Code:

 

Dealership Agreement

 

by

 

and

 

between

 

Shanghai-Volkswagen Sales Co., Ltd.

 

And

 

[Dealer]

 

 

Recitals

 

Parties
to this Franchised Dealership Contract: (the “Parties”)

 

Shanghai-Volkswagen
Sales Co., Ltd. (the “Supplier”); and

 

[Dealer]  (the “Dealer”).

 

Whereas,

 

[Intentionally
omitted]

 

NOW,
THEREFORE, the Parties hereby reach agreement as follows:

 

Part I                 Bases
for the Contract

 

Article 1                                               Definitions

 

The
following terms shall have the meaning set forth below:

 

1.               “Network
Organization” means all the retailers and maintenance stations who have
contractual relationship with the Supplier, who are also collectively referred
to as “Dealers” in certain cases.

 

2.               “Dealer” means
a retailer who has franchise relationship
with the Supplier and is authorized by the Supplier to sell Contractual
Products and provide after-sales services to Contractual Cars and may deal in
used cars to the extent permitted by law and authorized by the Supplier in
writing.

 

3.               “Maintenance
Station” means a franchise service provider authorized by the Supplier to
provide comprehensive aftermarket services for the Contractual Products.

 

4.               “Contractual
Products” means all the vehicles, spare parts and accessories listed in
Schedule        hereto.

 

5.               “Contractual
Vehicles” means all the cars listed in Schedule
       hereto.

 

6.               “Contractual
Parts” means all the Original Parts and accessories.

 

7.               “Level
One Mark” includes Chinese logo, English logo, company logo, flags and authorization
plate.

 

8.               “Level
Two Mark” includes outdoor signage, second-hand car business category signage,
second-hand car area signage, office nameplate, maintenance workshop nameplate,
and exhibition area signage.

 

9.               “Original
Parts” means the spare parts and components approved and provided by the
Supplier and used for the aftermarket service for the Contractual Vehicles.

 

10.         “Pre-sale
PDI” means any quality inspection conducted prior to the delivery by the
Supplier of the Contractual Vehicles to end users.

 

 

11.         “Service”
means the pre-sale service, aftermarket service and other relevant business
service provided by the Dealer upon requests of the Supplier.

 

12.         “Marketing
and Promotion” means the comprehensive marketing activities conducted by the
Dealer in the Territory in accordance with the Operating Management Guideline
formulated by the Supplier.

 

13.         “Reasonable
Inventory” means all the inventory varieties and quantities maintained by the
Network Organization in order to ensure normal operation of the Contractual
Vehicles and the Contractual Parts in accordance with the requirements of the
Supplier.

 

14.         “Territory”
means the region set forth in Schedule       
hereof designated by the Supplier within which the Dealer is authorized to sell
and provide Service for the Contractual Products.

 

15.         “Operating
Management Guideline” means the documents and manuals in effect and subject to
amendment and supplement from time to time, related to the daily business
activities and operating management of the Dealer formulated and provided by
the Supplier from time to time, and in accordance with the provisions hereof,
must be followed by the Dealer.

 

16.         “Warranty
Provisions” means any provisions related to the scope and method of quality
warranties for the Contractual Vehicles indicated in the Instructions for Use
and Maintenance accompanying the Contractual Vehicles.

 

17.         “Key
Employee” or “Key Employees” means the management personnel listed in Article       
of Schedule          hereof.

 

18.         “Law’
means all the laws, regulations and rules in effect promulgated by
competent governmental authorities of the People’s Republic of China.

 

Article 2 Purpose

 

1.               In
accordance with the terms of this Contract and the agreement set forth in the
Operating Management Guideline, the Supplier hereby grants to the Dealer the
right to distribute the Contractual Products in the Territory to end users, and
provide Services in accordance with the requirements of the Supplier.

 

2.               The
Dealer shall endeavor to make the Contractual Products acquire the maximum
market share in the Territory.

 

3.               The  Dealer shall ensure that, during the term of
this Contract, its form of organization and structure shall always be in
consistent with the agreement set forth in Schedule
         hereof, or it shall take any
other form of organization and structure agreed by the Supplier in writing.

 

Part II Rights, Obligations
and Legal Status of the Dealer

 

Article 3 Dealer’s Code of Conduct

 

1.               The
Dealer shall, in accordance with the Operating Management Guideline, sell the
Contractual Products in the Territory, provide better aftermarket service than
its 

 

3

 

competitors and maintain Reasonable
Inventory of the Contractual Products required under this Contract.

 

2.               The
basis for the code of conduct to be followed by the Dealer shall include this
Contract and the schedules hereof and the Operating Management Guidelines
formulated, amended or supplemented from time to time.

 

3.               The
Dealer, as an independent party to this Contract, shall perform all its
obligations hereunder in its own name and for its own benefit.  Nothing herein shall constitute the
relationship of employer and employee, principal and agent, or a partnership or
joint venture between the Dealer and Supplier.

 

4.               During
the term of this Contract, the Dealer shall ensure to maintain sufficient
assets and capital to meet the business demand.

 

5.               Without
prior written consent of the Supplier, the Dealer shall not directly or
indirectly sell, market or repair any vehicle or spare part that is not a
Contractual Product.

 

6.               Except
the accessories cannot be provided by the Supplier, the Dealer shall not sell
any other accessories not provided by the Supplier.

 

7.               The
Dealer shall independently undertake the business hereunder in accordance with
applicable laws and the agreement herein.

 

The Dealer shall:

 

(a) be an independent legal person and have
obtained any governmental license required for the sale of the Shanghai
Volkswagen brand cars;

 

(b) construct the facilities required for the
operation of the business agreed hereunder, in accordance with the standard for
the company image and facilities set forth under the Operating Management
Guideline;

 

(c) have employees only engaging in the sale
and services of the Contractual Products;

 

(d) carry out marketing, sales and advertising
activities for the Contractual Products within the scope of authorization
granted by the Supplier;

 

(e) separate its business activities in
connection with this Contract from any other business activities;

 

(f) comply with the local environmental laws
and regulations.

 

8.               The
Dealer may only sell, promote and repair the Contractual Products within the
Territory.

 

9.               Without
prior written consent of the Supplier, the Dealer shall not export any
Contractual Products.

 

10.         Without
prior written consent of the Supplier, the Dealer shall not sell the
Contractual Products to any companies or individuals other than end users.

 

4

 

11.         Without
prior written consent of the Supplier, the Dealer shall not provide any model
of the Contractual Products to users for purpose of being used as taxi cars.

 

12.         The
Dealer shall not sell any counterfeit Contractual Products, and shall not use
any spare parts or components which are not provided by the Supplier in its
aftermarket service.

 

13.         The
Dealer agrees that it shall inform the Supplier of any change of its corporate
nature, form of organization, structure, shareholders, Key Employees, corporate
assets and business content which is different from those listed in schedule
         hereof or the condition agreed
or confirmed by the Supplier, or may affect the operation of the Dealer’s
business, or give rise to any change of the records of the Dealer maintained by
the Supplier, or affect the interests of the Supplier; and any such change may
not be made unless agreed by the Supplier in writing.

 

14.         Where
the Dealer sells any Contractual Vehicles to end users, it shall execute the
Shanghai Volkswagen Car Sales Contract provided by the Supplier with such end
users.

 

15.         The
Dealer shall conduct Pre-sale PDI before it delivers cars to end users.

 

16.         The
Dealer must pass the certification of a quality system designated by the
Supplier within the agreed period.

 

17.         The
Dealer shall accept examination and evaluation of its business operation
conducted by the Supplier in accordance with the standard formulated by the
Supplier from time to time.

 

18.         The
employees holding any key position of the Dealer shall receive various testing,
training and certification.

 

19.         The
Dealer shall keep in confidence all the documents and materials it receives
from Volkswagen Group, Shanghai Automotive Industry Corporation, SAIC Motor
Corporation Limited, Shanghai Volkswagen and the Supplier, as well as the
content of related management system, computer software and various training.

 

20.         The
Supplier shall have a right of first refusal to enter into any franchise
contract in respect of automobile sale and services with the Dealer, so long as
the Dealer engages in such business.

 

21.         The
Dealer shall execute employment contracts with its employees which shall meet
the requirements of the Supplier.

 

Article 4 Shipment and Acceptance of
Contractual Products

 

1.               The
business transaction between the two parties shall be conducted based on the
invoices and delivery orders issued by the Supplier.  The Supplier may authorize its local branches
to execute the orders placed by the Dealer, and issue invoices and delivery
orders to the Dealer.

 

2.               The
Dealer’s orders shall become effective only after being confirmed by the
Supplier, and shall be binding upon both Parties.

 

5

 

3.               The
Dealer shall inform the Supplier of its plan for the order of Contractual
Vehicles in writing or through the special order system of the Supplier during
the period required by the Operating Management Guideline.

 

4.               Unless
otherwise agreed hereunder, the Supplier shall arrange for the delivery of the
Contractual Products to the Dealer after the Supplier pays the amount listed in
the invoice in full to the account of the Supplier.

 

5.               The
Dealer shall receive the Contractual Products at the place and in the manner
agreed by the Parties, and shall inspect the Contractual Products in accordance
with the requirements set forth under the handover documents provided by the
Supplier or any third party on behalf of the Supplier.

 

6.               The
Dealer shall promptly notify the Supplier of any damages of the Contractual
Vehicles discovered by the Dealer during product inspection.

 

7.               The
Supplier shall deliver documents in respect of quality warranty for the
Contractual Vehicles supplied to the Dealer.

 

8.               The
quality of the Contractual Vehicles supplied to the Dealer shall comply with
the production standard in effect as at the date of production.

 

9.               The
Supplier will not deliver any Contractual Products to the Dealer unless it
receives the full payments for such Contractual Products, provided that in case
the Dealer fails to make payment after it receives the Contractual Products or
the Supplier accept the Dealer’s request for payment after delivery of the
Contractual Product, the ownership of such Contractual Products shall still
vest in the Supplier before the full payment for the same has been remitted to
the account designated by the Supplier and available to the Supplier.

 

10.         The
risk of loss and damage of the Contractual Products shall transfer to the
Dealer upon its receipt of the same.  In
the event that the Dealer fails to accept the products on time due to causes
not attributable to the Dealer, the risk of loss and damage shall transfer to
the Dealer from the delivery date agreed by the Parties.

 

Article 5 Plans and Conditions for the Sale
of Contractual Products

 

1.               The
Supplier shall formulate to the Dealer an annual plan for each year and a
monthly plan for each month for the sale and inventory of Contractual Vehicles
and send such plan to the Dealer in writing. 
The achievement of such plan shall be one of the bases to determine
whether and how much discount may be granted to the Dealer.  The Supplier may adjust the Dealer’s annual
and/or monthly sales and/or inventory plan from time to time based on the
change of the domestic car market.

 

2.               The
Supplier shall have the right to formulate an annual plan for each year and a
monthly plan for each month for the sale and inventory Contractual Parts.  The achievement of such plan shall be one of
the bases to determine whether and how much discount may be granted to the
Dealer.  The Supplier may adjust the
Dealer’s annual and/or monthly sales and/or inventory plan from time to time
based on the change of the domestic auto market.

 

6

 

3.               The
Dealer shall not modify or remodel any Contractual Vehicle without prior
written consent of the Supplier.

 

4.               If
the Contractual Vehicles in the possession of the Dealer are damaged before
being sold to end users, the Dealer shall immediately inform the Supplier in
writing and may not make any repair without the Supplier’s written consent.

 

5.               The
Dealer may engage in the sale of second-hand Contractual Products in accordance
with the requirements of the Supplier and the Operating Management Guideline,
to the extent permitted by applicable laws and authorized by the Supplier in
writing.

 

Article 6 Inventory and Display

 

1.               The
Dealer shall maintain Reasonable Inventory of the Contractual Products in
accordance with the types and quantities set forth in the Operating Management
Guideline provided by the Supplier.

 

2.               The
Dealer shall display in its exhibition hall all models of the Contractual
Vehicles authorized to be sold in accordance with the requirements of the
Supplier.

 

Article 7 Sale and Aftermarket Service

 

1.               The
Dealer shall ensure a quality sale and aftermarket service of the Contractual
Products.

 

2.               In
the event the Supplier deems it necessary to recall and/or take necessary
measures with respect to the Contractual Products, all repair services and
related preparation work shall also be a part of aftermarket services, which
shall be rendered by the Dealer in accordance with the requirements set forth
in the Operating Management Guideline.

 

3.               The
Shanghai Volkswagen Car Sales Contract entered into between the Dealer and its
end users shall cover the Warranty Provisions of the Supplier.

 

4.               The
Dealer shall promptly report to the Supplier any breakdown of the Contractual
Products which is difficult to maintain or was maintained.

 

5.               The
Dealer shall assume any and all obligations with respect to any quality issues
of the Contractual Vehicles and any increase in the clients’ complain, in each
case, due to the Dealer’s reasons.

 

6.               The
Dealer shall assume any and all obligation if it fails to (i) promptly
report any claims made by any end user due to any quality warranty or other
quality disputes and (ii) duly keep the questioned spare parts.

 

7.               The
Dealer shall duly solve all complaints, disputes and litigation in connection
with the sale, aftermarket service and quality of the Contractual Products.

 

8.               The
Supplier may examine the Dealer’s accounts and data related to quality warranty
on an irregular basis.  Any unreasonable
indemnity discovered during such examination shall be returned to the Supplier,
and the Dealer shall pay the Supplier liquidated damages equivalent to the
unreasonable indemnity discovered if such indemnity exceeds 10% of the total
indemnities subject to the examination.

 

7

 

9.               The
Dealer shall only use the Original Parts supplied by the Supplier in providing
maintenance services.

 

10.         If
the Dealer (i) uses any non-Original Parts or counterfeit Original Parts
to provide any quality warranty services or initial maintenance services and
claims for damages against the Supplier, and/or (ii) claims for damages
based on any fictional facts, the Dealer shall return the indemnity in full and
pay liquidated damages to the Supplier.

 

11.         The
Parties agree that if the Dealer purchases any spare parts or components from
any third parties other than the Supplier, the Dealer shall pay liquidated
damages equivalent to the amount of payment made by the Dealer for such spare
parts or components, and the Supplier may impose any other penalties agreed by
the Parties.

 

Article 8 Marketing, Advertisement and
Promotion

 

1.               The Dealer
shall carry out activities in relation to the promotion and brand maintenance
of the Contractual Products in the Territory in accordance with the relevant
provisions in the Operating Management Guideline approved and provided by the
Supplier.

 

2.               The Supplier
shall, at the beginning of each quarter, and based on the sales volume achieved
for the previous quarter and the relevant provisions of the Operating
Management Guideline, provide financial support to the Dealer for its marketing
and promotional activities conducted in the previous quarter.

 

[3
and below, intentionally omitted]

 

Article 9
Trademark and Logo

 

[intentionally
omitted]

 

Article 10
Information Collection and Report

 

[intentionally
omitted]

 

Article 11
Operation Facilities and Business Activities

 

Without
prior written consent of the Supplier, the Dealer may not use its business
premises or facilities to sell any auto products or spare parts or conduct any
other business other than to sell and provide Service for the Contractual
Products.

 

Any
change or reconstruction by the Dealer of its business premises or building
requires prior written consent of the Supplier.

 

Any
investment activities conducted by the Dealer which (i) may materially
change its business related to the Contractual Products; or (ii) falls out
of its normal scope of business activities; or (iii) contravene with the
agreement set forth herein; or (iv) may directly or indirectly affect the
business activities conducted by the Dealer hereunder, shall require prior
written consent of the Supplier.

 

8

 

Part III Rights and Obligations of the Supplier

 

Article 12
Advice and Assistance

 

1.               The Supplier
shall provide advice and assistance with respect to the sale and aftermarket
Service of the Contract Products upon reasonable request by the Dealer,
including without limitation, providing appropriate support to the Dealer’s
promotional activities by conducting national or regional marketing promotion
activities for the Contractual Products; seconding experts to provide advice
and support on a irregular basis; and providing various support to the Dealer
in connection with the business activities for the Contractual Products.

 

2.               If (i) the
Dealer provides guarantee to any auto brand other than that of the Supplier’s
or the Manufacturer’s or any business of any other industries, or (ii) the
Dealer fails to use any money obtained through loan arrangement for the
business operation in relation to the auto brand of the Supplier or the
Manufacturer, the Supplier shall have the right to refuse to provide any
financial support to the Dealer.

 

Article 13
Price and Sales Discount

 

1.               The Supplier
shall sell the Contractual Products to the Dealer at the price published by the
Supplier, which shall be subject to adjustment by the Supplier from time to
time.

 

The
Supplier shall fix a market guiding price of the Contractual Products based on
the sales made by the Supplier and change of the market, and the Dealer shall
sell the Contractual Products to end users at such market guiding price
determined by the Supplier.  The Dealer
shall not sell any Contractual Products at any price lower than the market
guiding price determined by the Supplier without the Supplier’s consent.  In case of any violation of the forgoing
provision, the Dealer shall pay the Supplier liquidated damage in an amount not
less than RMB 10,000 for each car.

 

The
Dealer shall not sell any spare parts at a price lower than their purchase
price.  In case of any violation of this
provision, the Dealer shall pay the Supplier liquidated damage in an amount not
less than RMB 10,000.

 

2.               The
Supplier may grant certain discount to the Dealer at its sole discretion based
on the achievement of sales volume and composite index.

 

Article 14 Setoff and Interest

 

1.               The
Supplier shall be entitled to (i) deduct any amount owed to it by the
Dealer and/or any losses resulted from any default of the Dealer as well as the
liquidated damages and indemnities agreed hereunder from the payment and/or
other amounts from the Dealer and/or any indemnities for quality warranty
payable by the Supplier to the Dealer, and/or (ii) reduce or cancel the
discount granted to the Dealer.

 

2.               The
Supplier may claim interest on any overdue account payable by the Dealer.

 

Article 15 Direct Sale

 

1.               The
Supplier shall retain the right to trade with the users listed in Schedule
         due to their special status or
their international characteristics, in order to make full use of the market
opportunities.  If the Dealer receives
any inquiry and orders from the above users, it shall immediately inform the
Supplier in writing.

 

9

 

2.               The
Supplier shall not compensate the Dealer for its direct sale in the Territory,
provided that if such direct sale requires any Service provided by the Dealer,
and in such case, the Supplier shall negotiate with the Dealer with respect to
the compensation for such Services.

 

Part IV Termination

 

Article 16 Normal Termination

 

This Contract shall terminate upon expiration unless
renewed by both Parties upon mutual agreement.

 

Article 17 Termination with Immediate Effect

 

In the event of any of the following events, the
Supplier may terminate this Contract immediately upon sending a notice to the
Dealer setting forth the reasons for termination:

 

·                  The
Dealer fails to obtain within the agreed period or is deprived of any
governmental license or business authorization required for the performance of
this Contract ;

 

·                  The
Dealer becomes insolvent or bankrupt;

 

·                  The
Dealer fails to repay its debts within seven days following the due date
determined by a court or arbitration tribunal;

 

·                  The Dealer’s assets or business is taken over by any receivers;

 

·                  The Dealer fails to perform its payment obligation hereunder;

 

·                  The Dealer encounters any difficulties in personnel, organizational
structure or finance which makes it impossible to perform any substantial
provision of this Contract;

 

·                  The Dealer files a serious false claim for compensation, and/or false
claims for compensation, and/or delete or modifies any true operational
information, repair information or any other information and data;

 

·                  The Dealer uses any non-Original Parts which may give rise to potential
risk in the safety of motor vehicle;

 

·                  The Dealer violates any provisions related to the price set forth in Article 13;

 

·                  In selling any Contractual Vehicle to an end user, the Dealer fails to
execute the Shanghai Volkswagen Car Sales Contract with such user in accordance
with Article 14;

 

·                  The layout and maintenance of the image and facilities of the Dealer’s
business premises fails to (i) be accepted by the Supplier due to the
reason that it fails to meet the standard set forth in the Supplier’s Operating
Management Guideline; or (ii) meet such standard during the operational
period, and in each case, the Dealer fails to make any rectification during the
period required by the Supplier;

 

10

 

·                  Upon
the execution of this Contract by both Parties, the Dealer is unable to
commence its business operation in connection with the Contractual Products
during the period required by the Supplier, to the extent that the Dealer is a
new member of the Network Organization;

 

·                  The
Dealer is liable to or fails to effectively solve any serious customer complain
or event seriously affecting the brand image of Shanghai Volkswagen occurs
during the term of this Contract;

 

·                  The Dealer is unable to proceed with its sales business and/or
aftermarket Service for three months due to reasons attributable to the Dealer
and/or any administrative penalty requiring the Dealer to suspend business for
rectification and/or rectification required by the Supplier;

 

·                  The Dealer commits any crime;

 

·                  The Dealer’s operation manner endangers the public health or security;

 

·                  The Dealer or its shareholder, employee, agent commits any violence
against, threats, slanders or insults any employee or agent of the Manufacturer
or the Supplier which results in any physical or mental damage, and the
Supplier deem it necessary to terminate this Contract;

 

·                  The Dealer fails to pass the regular or irregular business performance
review arranged by the Supplier, which, in accordance with the rules of
review, falls within the events giving rise to the termination by the Supplier;

 

·                  The Dealer fails to meet the Supplier’s requirements on Reasonable
Inventory of Contractual Products;

 

·                  Without written consent of the Supplier, the Dealer at its sole
discretion, and/or its investors and/or any other third parties determines to
sell or transfer the equity interest and/or the business premises and/or
facilities of the Dealer or lease its business premises and/or facilities, to
any other parties; or the Dealer does not directly use its business premises
and/or facilities, and/or does not directly operate the business of Contractual
Products;

 

·                  The Dealer loses the right to use its business premises and is unable to
reclaim the same;

 

·                  The Dealer commits any acts which shall require the Supplier’s consent
or be reported to the Supplier in advance without obtaining the Supplier’s
consent or being reported the Supplier;

 

·                  The Dealer fails to staffing itself with the employees in accordance
with the Supplier’s arrangement for posts and qualification requirements within
the period required by the Supplier;

 

·                  The Dealer fails to accept the various training provided by the
Supplier, or its employees fails to pass the training examination provided by
the Supplier, which makes the Dealer unable to conduct normal operation in
accordance with the Supplier’s requirements;

 

11

 

·                  The Dealer violates any other material provisions of this Contract
and/or any schedules hereto;

 

·                  Any termination by the Supplier provided in the Operating Management
Guideline;

 

·                  Any change of Law or any auto industry regulations during the term of
this Contract, makes the performance of this Contract impossible;

 

·                  Both Parties or either party fails to restore to normal within three
months following the occurrence of any event of force majeure agreed under Article 24
hereof during the term of this Contract;

 

In addition, the Parties may terminate this
Contract upon mutual written agreement.

 

Article 18 Partial
Termination

 

In the event that

 

·                  the Dealer fails to use the Supplier’s Level One Mark system or Olympic
logo system in accordance with the Supplier’s Operating Management Guideline,
which results in any losses of the Supplier;

 

·                  the Dealer publishes any false market information or uses any
unauthorized pictures without complying with the Supplier’s Operating
Management Guideline, which results in any losses of the Supplier;

 

·                  the Dealer provide any false information to the Supplier in filing any
materials such as various market information and effect evaluation report;

 

the Supplier may terminate the provisions in
connection with the following items:

 

·                  termination with respect to a certain brand or model of the Contractual
Products, without affecting other brands and models;

 

·                  termination with respect to the Contractual Vehicles, without affecting
aftermarket service and Contractual Parts, or vice versa;

 

·                  termination with respect to sedan cars, without affecting other business
cars, or vice versa;

 

In case of termination of partial provisions of
this Contract, the Dealer undertakes to follow the relevant post-termination
procedures in accordance with Article 19.

 

Article 19 Post-termination
Enforcement Procedures

 

1. During a reasonable period prior to the
expiration of this Contract, the Supplier shall have the right to take
necessary actions and measures to ensure normal sale and aftermarket service of
the Contractual Products in the Territory following the termination of this
Contract.

 

2. Upon termination of this Contract, the Dealer
shall, within seven days and without any delay, (i) cease to use any
trademark and logo of the Supplier and any marks which are 

 

12

 

easily to be confused with the same; (ii) upon
the Supplier’s request, transfer all the outstanding orders and business
related to the Contractual Products to the Supplier or any third parties
designated by the Supplier; (iii) upon the Supplier’s request, return any
Contractual Products of the Supplier in its possession without any charge; (iv) upon
the Supplier’s request, sell any Contractual Products which (a) are
directly purchase from the Supplier and brand new and/or in the original
package, unused and undamaged; or (b) have not been sold and no security
has been created thereon, to the third party designated by the Supplier.  Any and all logistics and insurance fees and
risks shall be borne by the Dealer; (v) upon the Supplier’s request,
return all the articles, documents, information system, materials, in
particular, the equipment and tools for special purpose, provided by the
Supplier; and (vi) upon termination of this Contract, the Supplier shall
have the right to terminate all or partial outstanding orders entered into with
the Dealer; provided that item (ii) of this Article 19.2 shall not be
affect.

 

Part V General Provisions

 

Article 20 Amendment and
Entire Agreement

 

[intentionally omitted]

 

Article 21 Assignment

 

1. [intentionally omitted]

 

2. In case of any termination or amendment of the
contract between the Manufacturer and the Supplier, the Manufacturer of the
Contractual Product or any other parties designated by the Manufacturer shall
have the right to take the place of the Supplier as a party to this Contract
and continue to perform this Contract as a party hereto.

 

Article 22 Severability

 

[intentionally omitted]

 

Article 23 Waiver

 

[intentionally omitted]

 

Article 24 Force Majeure

 

[intentionally omitted]

 

Article 25 Liabilities

 

[intentionally omitted]

 

Article 26 Confidentiality

 

[intentionally omitted]

 

Article 27 Default Liability

 

[intentionally omitted]

 

13

 

Article 28 Dispute
Resolution

 

[intentionally omitted]

 

14

 

Accepted
for and on behalf of:

 

	
  Shanghai-Volkswagen
  Sales Co., Ltd.

  	
   

  	
  [Dealer]
  (company seal)

  
	
  (company
  seal)

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Signed by:

  	
   

  	
   

  	
  Signed
  by: 

  	
   

  
	
   

  	
   

  	
   

  	
  Legal
  representative

  
					

 

15

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00181-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00181-of-00352.parquet"}]]