Document:

Exhibit 10.8

 

Part                          I

 

FAW-TOYOTA Motor Sales Co., Ltd.

 

Dealership Contract

 

Dated:         

 

 

Table of Contents

 

	
  CHAPTER 1

  	
   

  	
  DEFINITIONS

  	
  3

  
	
   

  	
   

  	
   

  	
   

  
	
  CHAPTER 2

  	
   

  	
  RECOGNITION

  	
  4

  
	
   

  	
   

  	
   

  	
   

  
	
  CHAPTER 3

  	
   

  	
  CONDITIONS FOR RECOGNITION

  	
  5

  
	
   

  	
   

  	
   

  	
   

  
	
  CHAPTER 4

  	
   

  	
  INDIVIDUAL PURCHASE AND SALES

  	
  10

  
	
   

  	
   

  	
   

  	
   

  
	
  CHAPTER 5

  	
   

  	
  BUSINESS CONDUCT OF THE DEALER

  	
  12

  
	
   

  	
   

  	
   

  	
   

  
	
  CHAPTER 6

  	
   

  	
  DEALER MANAGEMENT

  	
  16

  
	
   

  	
   

  	
   

  	
   

  
	
  CHAPTER 7

  	
   

  	
  INTELLECTUAL PROPERTY RIGHTS

  	
  17

  
	
   

  	
   

  	
   

  	
   

  
	
  CHAPTER 8

  	
   

  	
  TERM

  	
  18

  
	
   

  	
   

  	
   

  	
   

  
	
  CHAPTER 9

  	
   

  	
  GENERAL
  PROVISIONS

  	
  20

  

 

 

Dealership Contract

 

This
Dealership Contract is entered into by and between [Dealer] and FAW-TOYOTA
Motor Sales Co., Ltd. (“FTMS”) on
              in
                ,
the People’s Republic of China (the “PRC” or “China”).

 

FTMS
has the distribution right to FTMS Cars (as defined herein below) and the
components thereof in the territories specified in the Domestic Toyota Car
Dealership Contract (as defined herein below) and Domestic Dario Car Dealership
Contract (as defined herein below) in accordance with the terms thereunder and
has a plan to conduct the sales and after-sales services of the contracted cars
and the components thereof.

 

The
Dealer desires to accept the assistance from FTMS in the establishment and
operation of an FTMS Car Dealership Store to conduct the sales of and provide after-sales
services to FTMS Cars and Toyota Cars (as defined herein below).

 

The
Main Territory (as defined herein below) of the Dealer is as set forth in Exhibit D
hereto.

 

The
opening of any branch store by the Dealer shall be subject to the consent of FTMS
and shall be conducted in accordance with the FAW-TOYOTA Network Policies—Branch
Store Network Implementation Rules (“Branch Store Implementation Rules”).

 

Chapter 1                                        Definitions

 

Article 1   Definitions

 

The
following terms used in this Contract shall have the meanings set forth below:

 

(A)                               “FTMS Cars”
means certain cars manufactured by PRC domestic car manufacturers and labeled
with Toyota or Daihatsu trademark that FTMS authorizes the Dealer to sell, as
further set forth in the Technology License Contract (as defined herein below).

 

(B)                               “FTMS
Components” means the components, assemblies, chemical products, lubricant and
tools appointed by TMC (as defined herein below) or DMC (as defined herein
below) to be used for the after-sales services, repair, maintenance or assembly
of FTMS Cars.

 

(C)                               “FTMS Products”
mean the FTMS Cars and the FTMS Components collectively.

 

(D)                               “Toyota Cars”
means the imported Toyota or Daihatsu brand cars used in the PRC, but excluding
FTMS Cars.

 

(E)                                “Toyota
Components” means the components, assemblies, chemical products, lubricant, and
tools appointed by TMC or DMC to be used for the after-sales repair,
maintenance or assembly of the Toyota Cars, unless otherwise specified,
excluding the FTMS Components.

 

(F)                                 “Toyota
Products” means the Toyota Cars and Toyota Components collectively, unless
otherwise specified, excluding FTMS Products.

 

3

 

(G)                               “Technology
License Contract” means a technology license contract to be entered into by and
between TMC or DMC on the one hand and a PRC domestic auto manufacturer on the
other hand, as amended and renewed.

 

(H)                              “Domestic
Toyota Car Dealership Contract” means the Domestic Toyota Car Dealership
Contract by and between TMC and FTMS, as amended and supplemented.

 

(I)                                   “Domestic Dario
Car Dealership Contract” means the Domestic Dario Car Dealership Contract by
and between DMC and FTMS, as amended and supplemented.

 

(J)                                   “Toyota Name”
means the name licensed to the Dealer, as further set forth in the Domestic
Toyota Car Dealership Contract.

 

(K)                              “Licensed Marks”
means the marks licensed to the Dealer, as further set forth in the license
contracts by and between FAW, TMC or DMC and FTMS, as amended and supplemented.

 

(L)                                “Dealer
Facilities” means the facilities on the site of the Dealer located at
                  and
the facilities on the site of the Dealer’s branch store(s) opened upon the
consent of FTMS and pursuant to the Branch Store Implementation Rules.

 

(M)                            “Main Territory”
means a geographic area within the PRC to be designated to the Dealer by FTMS
pursuant to Clause 8(1).

 

(N)                               “FAW” means
China FAW Group Corporation, a PRC legal person established and existing under
the laws of the PRC.

 

(O)                               “TMC” means
Toyota Motor Corporation, a Japanese legal person established and existing
under the laws of Japan.

 

(P)                                 “DMC” means
Daihatsu Motor Co., Ltd., a Japanese legal person established and existing
under the laws of Japan.

 

(Q)                               “TMCI” means
Toyota Motor (China) Investment Co., Ltd., a PRC legal person established
and existing under the laws of the PRC.

 

Chapter 2                                        Recognition

 

Article 2   Representations
and Warranties

 

(1)                                 The Dealer
represents and warrants to FTMS as follows:

 

(A)                               it is a legal
entity duly established and validly existing under PRC laws; and

 

(B)                               it has all the
governmental approvals and licenses required for the execution of this Contract
and the performance of its obligations hereunder pursuant to all the applicable
PRC laws, regulations and rules.

 

(2)                                 FTMS represents
and warrants to the Dealer as follows:

 

(A)                               FTMS is a legal
entity duly established and validly existing under PRC laws; and

 

4

 

(B)                               FTMS has the
distribution right to FTMS Products pursuant to the Domestic Toyota Car Dealership
Contract and Domestic Dario Car Dealership Contract.

 

Article 3   Acknowledgement
and Authorization

 

(1)                                 FTMS hereby
grants the Dealer a non-exclusive and non-sole right to conduct the following
activities on terms and conditions of this Contract:

 

(A)                               display, market
and sell FTMS Products at the Dealer Facilities;

 

(B)                               advertise FTMS
Products in the Main Territory;

 

(C)                               perform the
after-sales service to FTMS Cars and Toyota Cars at the Dealer Facilities;

 

(D)                               use the logos
designated by FTMS at the Dealer Facilities to indicate that it is an
authorized dealer of FTMS;

 

(E)                                use the Toyota
Name and Licensed Trademarks in connection with the display, advertisement and
promotion of, and provision of after-sales services to FTMS Products and Toyota
Products; and

 

(F)                                 operate and
maintain the Dealer Facilities soundly;

 

(3)                                 FTMS reserves
the right to implement, whether by itself or any third party, the sales or
after-sales services of FTMS Products and Toyota Products in the Main
Territory.

 

Article 4   No Agency

 

Neither
party hereto is the agent or representative of the other party for any purpose
or in any scope nor does it grant the other party hereunder any authority or
agency right to act on its behalf.

 

Chapter 3                                        Conditions for Recognition

 

Article 5   Mutual
Cooperation and Expansion of Business Environment

 

(1)                                 The parties
hereto shall cooperate with each other to establish good and close relationship
and develop such relationship soundly

 

(2)                                 The Dealer
agrees that it will not, whether within or after the term of this Contract,
take any act that may damage any trade name or trademark owned by FAW, FTMS,
TMC, DMC, orTMCI, or the reputation, credit or rating of FTMS Products or
Toyota Products.

 

(3)                                 With a view to
expanding the business environment in the Main Territory, and actively removing
and curing any issues in or barriers to the reasonable transactions in the
purchase or sales of FTMS Products or Toyota Products in the Main Territory to
improve the service quality and protect the customer’s legal interest, the
Dealer agrees to make its best efforts to take the following actions:

 

(A)                               establish and
maintain good and stable relationship with the governmental authorities,
relevant industrial associations and media that supervise the Dealer and FTMS;

 

5

 

(B)                               provide such
governmental authorities, industrial associations and media with the
information consistent with the views of the Dealer and FTMS; and

 

(C)                               cooperate with
FTMS independently in the taking of any other measures deemed appropriate by
it.

 

Article 6   Annual Plan

 

(1)                                 The Dealer
shall each year, in consultations with FTMS, determine the target sales volume
of FTMS Products in the Main Territory for such year (the “Annual Plan”), and
shall make efforts to achieve the Annual Plan.

 

Prior
to the end of December of the current year, the parties hereto shall enter
into a written agreement with respect to the Annual Plan for the next year  on the basis of the research into FTMS’ car
allocation plan, market trends in the Main Territory and other relevant
conditions.

 

(2)                                 The Dealer
shall, prior to the end of December each year, submit to FTMS the
marketing plan for the next year to be implemented by the Dealer in connection
with the sales of the FTMS Products in the Main Territory.

 

(3)                                 In case the
Dealer fails to or is expected to fail to achieve the sales of FTMS Products in
accordance with the Annual Plan for any given year, which is deemed by FTMS to
be a cause attributable to the Dealer, the Dealer shall explain to FTMS in
writing the reasons or causes therefor. 
In such case, FTMS may request the Dealer to increase the future sales,
improve the sales system or organization structure, increase the capital
required for purchasing and selling FTMS Products, or take any other measures
necessary for improving the purchasing or selling capability.

 

(4)                                 Where FTMS
considers that the Dealer has not satisfied the request mentioned above six (6) months
after FTMS raises such request to the Dealer, FTMS may deliver a written notice
of termination to the Dealer to terminate this Contract with immediate effect.

 

Article 7   Non-competition

 

(1)                                 The Dealer
agrees that within the term of this Contract it may not conduct any marketing,
distribution, advertisement or sales of any product competitive with the FMTS
Products  without prior written
consent of FTMS.

 

(2)                                 The Dealer also
agrees that within the term of this Contract, without prior written consent of
FTMS, it may not accept the appointment by any auto manufacturer other than
FTMS as an authorized repair factory or authorized dealer of such auto
manufacturer.

 

Article 8   Responsibilities
for the Main Territory

 

(1)                                 FTMS shall
further designate a certain geographic area within the PRC as the Main
Territory of the Dealer in writing, as set out in Exhibit D hereto.

 

(2)                                 The Dealer
shall be responsible for the sales and marketing of the FTMS Products within
the Main Territory.  The Dealer shall
make efforts to actively develop the market within the Main Territory with a
view to achieving the Annual Plan determined pursuant to Article 6 hereof
and shall provide the services of maximum satisfaction to the customers within
the Main Territory.

 

6

 

(3)                                 Without prior
written consent of FTMS, the Dealer may not set up or operate any outlet for
FTMS Products outside the Main Territory, nor may it conduct any advertisement
activities outside the Main Territory.

 

(4)                                 The Dealer
understands and agrees that FTMS, TMC, DMC or any person designated by any of
them may, from time to time, through a sales network other than the Dealer,
sell directly or indirectly FTMS Products or Toyota Products to any other
entity or person within the  Main
Territory.

 

(5)                                 In the case of
any event described in the preceding paragraph, the Dealer shall provide FTMS
with the necessary information to cooperate and assist FTMS to facilitate the
said sales, and answer FTMS’ request for customs declaration, transport and
registration and other similar services relating to Toyota Products.

 

Article 9   Guidance by
FTMS

 

FTMS
may give advice to the Dealer on the Dealer’s operation, management, critical
operating methods and the Dealer shall accept such advice unless it has a good
cause.

 

Article 10                                            Information
from the Dealer

 

The
Dealer shall provide FTMS with the following true and accurate information upon
request of FTMS or within a time period agreed with FTMS:

 

(A)                               information
relating to the sales and inventory of FTMS Products within the Main Territory;

 

(B)                               information
relating to the planned sales volume and sales cost of FTMS Products and the
Dealer’s sales of the FTMS Products;

 

(C)                               monthly
statements of paid and outstanding amounts, operating statements, monthly
closing reports, audited balance sheets, income statements and most recent
cashflow statements to indicate the financial status of the Dealer;

 

(D)                               name of opening
banks and credit facility granted thereby as well as the balance of the loans
owed to each opening bank and/or any other financial institution, description
of the corresponding security interest and term of loan and any other
information that indicate the loans obtained by the Dealer;

 

(E)                                organizational
chart, staffing chart and key personnel plans of the Dealer as well as any
other information relating to the organizational structure and staff of the
Dealer;

 

(F)                                 information
relating to the assessment of the FTMS Products in the Main Territory and any
technical or sales issues of the FTMS Products;

 

(G)                               information
mainly relating to the assessment, model, sales conditions, sales price, and
sales quantity of the competitive products in the Main Territory;

 

(H)                              statistical
data about autos (including without limitation, new autos and second-hand
autos) and auto parts in the Main Territory;

 

7

 

(I)                                   information
relating to laws and regulations that have been enacted or are expected to be
enacted and may have an effect on the sales, services, manufacture,
architecture or performance of the FTMS Products;

 

(J)                                   information
relating to the economic projections or political or economic conditions in the
Main Territory that may have an effect on the sales, services or component
sourcing of the FTMS Products; and

 

(K)                              any other
information reasonably requested by FTMS.

 

Article 11                                            Restrictions on
Establishment or Operation of Similar Facilities

 

Without
prior written consent from FTMS, the Dealer may not establish or operate any
facilities having the functions set forth herein or any similar
facilities.  Further, without prior
written consent from FTMS, the Dealer may not change any function of any Dealer
Facilities or use any Dealer Facilities for any functions other than those set
forth herein.

 

Article 12                                            Notice of
Material Changes to the Dealer’s Organizational Structure or Material
Developments

 

(1)                                 In case any of
the following changes is intended to be made to the Dealer’s organizational
structure, the Dealer shall inform FTMS of the details of such change in
writing 60 days prior to the making of the decision on such change and obtain
the prior written consent of FTMS:

 

(A)                               merger or
split-off;

 

(B)                               transfer of
substantial assets or operational rights;

 

(C)                               acquisition of
any other authorized dealer of FTMS, or acquisition of any other legal person;

 

(D)                               relocation,
expansion, reduction or shut-down any part or all of the Dealer Facilities;

 

(E)                                any change to
the equity structure of the Dealer itself or any of its investors;

 

(F)                                 the Dealer is
to be converted into a joint stock company limited or the actual controlling
person of the Dealer is going to be publicly listed and intends to consolidate
the Dealer into its consolidated statements;

 

(G)                               change of any
director or chairman or vice chairman;

 

(H)                              change of the
general manager (in principle, the Dealer may not change its general manager
within one year as of the commencement of its commercial operation and the
interval between the change of two general managers shall be no shorter than
one year); or

 

(I)                                   any other
material change to the operation or organizational structure of the Dealer that
may affect the performance of this Contract.

 

(2)                                 In case the
Dealer intends to make any of the following changes to its organizational
structure, it shall inform FTMS of the details of such change in writing 30
days prior to the making of the decision on such change and obtain FTMS’ prior
written consent:

 

8

 

(A)                               change of any
of the senior officers other than the general manager; or

 

(B)                               any individual
investor or director of the Dealer intends to concurrently take any position in
any other company.

 

(3)                                 Upon occurrence
of any of the following events, the Dealer shall promptly deliver a written
report to FTMS with respect thereto to explain the cause of, current status and
possible legal consequences from such event:

 

(A)                               the Dealer or
any of its investors is involved in any material litigation/arbitration or has
been served with processes by any court or arbitration commission; or

 

(B)                               the Dealer or
any of its investors is subject to any inquiry by any judicial authority for
being suspected of committing a crime or any director, supervisor or senior
officer of the Dealer is subject to any enforcement action by any judicial
authority for being suspected of committing a crime.

 

(4)                                 If the Dealer
itself or its controlling person is a publicly listed company, upon any change
to the substantial (i.e., 5% or more) shareholding in the Dealer or its
controlling person, or in case of any tender offer from any investor to all the
shareholders of the Dealer or its controlling person to acquire all or any  part of the shares in the Dealer or its
controlling person, or upon termination by the relevant stock exchange of the
public trading of the shares in the Dealer or its controlling person, the
Dealer shall within three days as of its submission of a written report on such
event to the China Securities Regulatory Commission and the relevant stock
exchange and the publication of the announcement of such event, notify FTMS in
writing of the facts described in such announcement.

 

(5)                                 The Dealer
hereby warrants to FTMS that it shall prohibit its general manager or any other
senior officer from concurrently taking any position in any other company.

 

(6)                                 Where FTMS
considers any change set forth in Items (1) to (2) above may
adversely affect the Dealer’s ability to perform its obligations hereunder or
any of FTMS’s rights hereunder, FTMS may, within a reasonable time limit,
require the Dealer to cease the implementation of such change or modify the
fundamental concept or relevant conditions of such change.

 

(7)                                 Where FTMS
considers that the Dealer is unable to satisfy FTMS’s requirement set forth in
Item (6) above, it may early terminate this Contract by a written notice
of termination to the Dealer.

 

(8)                                 Where the
Dealer fails to perform is obligations for delivering the written
report/written notice as set forth in Item (3) or (4) above, or FTMS
believes that any event as described in Item (3) or (4) above may
have an adverse effect on the Dealer’s ability to perform its obligations
hereunder or on FTMS’s rights hereunder, 
or the Dealer breaches its warranty obligations set forth in Item (5) above,
FTMS may early terminate this Contract by a written notice of termination to
the Dealer.

 

9

 

Chapter 4                                        Individual Purchase and Sales

 

Article 13                                            Individual
Purchase and Sales Contracts

 

(1)                                 The purchase
and sales of any FTMS Products between the Dealer and FTMS shall be conducted
pursuant to the conditions set forth in the individual purchase and sales
contracts by and between them. 
Individual purchase and sales contracts shall prevail over this
Contract.

 

(2)                                 When purchasing
any FTMS Components from any third party, the purchase and sales of such FTMS
components shall be conducted pursuant to the specific components purchase and
sales contract between the Dealer and such third party.

 

Article 14                                            Effectiveness
of Individual Purchase and Sales Contracts

 

(1)                                 The Dealer
shall prior to a certain date in the current month to be separately designated
by FTMS, place its order for the FTMS Cars for the next month, or at any time
agreed with FTMS place its order for the FTMS Components required by it.  Such orders shall be in the form designated
by FTMS and shall be executed by the legal representative of the Dealer or the
authorized representative thereof. 
Simultaneous with the placement of any such order, the Dealer shall
submit to FTMS an estimate of products required by it for the two consecutive
months following the month for which such order is placed.  Such estimate shall be a reasonable and
correct estimate made after having fully considered the sales and inventory of
the FTMS Products in the Main Territory, but such estimate shall be for
reference only and not be binding upon either party hereto.

 

(2)                                 Within a
certain time period as separately agreed between the parties hereto as of its
receipt of any order from the Dealer placed pursuant to the provisions in Item (1) above,
FTMS shall notify the Dealer of its response to such order as to whether it
will accept such order or request the Dealer to change the order.

 

(3)                                 Any individual
purchase and sales contract shall be constituted upon FTMS’s notification to
the Dealer to accept the Dealer’s relevant order or the Dealer’s acceptance of
the FTMS’s request for any change to the relevant order.

 

(4)                                 Unless
otherwise specified herein, FTMS shall not be liable to the Dealer for its
refusal to accept any order or request for any change to any order as specified
in Item (2) above.

 

(5)                                 Notwithstanding
the provisions in Item (3) above, the Dealer understands that the supply
quantity allocated to the Dealer is variable, which means that FTMS may reduce
the previously allocated supply quantity or extend the previously scheduled
delivery time, without any liability to the Dealer.

 

Article 15                                            Pricing

 

(1)                                 FTMS may set
the price for any product to be sold to the Dealer and may change the same as
appropriate, without any liability to the Dealer.  Notwithstanding the above, unless otherwise
agreed in writing between the Dealer and FTMS, the price set forth in any
executed and effective individual purchase and sales contract may not be
changed.

 

(2)                                 The price set
forth in Item (1) above shall be inclusive of the transportation fee and
insurance from the place of delivery specified in Item 17(1) to a place of
delivery agreed between FTMS and the Dealer.

 

10

 

(3)                                 Unless
otherwise agreed between the parties hereto, the price set forth in Item (1) above
shall be settled in RMB and exclusive of the VAT.

 

Article 16                                            Terms of
Payment

 

(1)                                 Unless
otherwise agreed between the parties hereto, the Dealer shall pay FTMS the
amount set forth on the invoice prior to a date to be separately designated by
FTMS.

 

(2)                                 Even if a
individual purchase and sales contract is constituted in accordance with Article 14,
prior to the receipt by FTMS of the amount set forth in Item (1) above,
FTMS shall not be liable to the Dealer for any delay in the performance of such
individual purchase and sales contract.

 

(3)                                 Unless
otherwise agreed between the parties hereto, all the payments from the Dealer to
FTMS shall be made in RMB.

 

(4)                                 In case of any
delay in the payment of any amount to FTMS hereunder, the Dealer shall be
liable for the delay penalty for such outstanding amount.

 

(5)                                 Unless
otherwise agreed between the parties hereto, the amount set forth in any
invoice under Item (1) above shall be inclusive of the price and the VAT.

 

Article 17                                            Delivery

 

(1)                                 The place of
delivery for FTMS Products hereunder shall be the logistic warehouse in which
FTMS Products are stocked.  The means of
transport and the carrier for delivering the FTMS Products to the Dealer shall
be separately designated by FTMS.

 

(2)                                 Each delivery
of the FTMS Products shall be conducted at the place of delivery specified in
Item (1) above.  A delivery shall be
deemed to be completed at the time when the truck carrying the FTMS Products
departs from the logistic warehouse.  Any
FTMS Products shall be delivered to the destination by a carrier to be
designated by FTMS.

 

(3)                                 Any risk
relating to any FTMS Products delivered to the Dealer by FTMS shall be
transferred from FTMS to the Dealer upon the delivery of such products as set
forth in Item (2) above.

 

(4)                                 The ownership
of any FTMS Products delivered to the Dealer by FTMS shall be assigned from
FTMS to the Dealer upon the delivery of such products to the Dealer as set
forth in Item (2) above subject to FTMS’s receipt of the amount in full
set forth in the individual purchase and sales contract relating to such
products.

 

Article 18                                            Acceptance
Inspection

 

(1)                             Pursuant to the
relevant individual purchase and sales contract, after any FTMS Products are
delivered to the destination, the Dealer shall within a time period to be
further agreed between the parties hereto, inspect any delivery to see if there
is any excess or shortfall or mis-shipping in or any damage to such delivery and
accept those FTMS Products that are verified to have passed such inspection
(the “Acceptance Inspection”).

 

(2)                                 Where after the
Acceptance Inspection conducted within the time limit as set forth in Item (1) above
the Dealer detects any excess, short or wrong delivery or any damage to such 

 

11

 

delivery,
it shall promptly notify FTMS thereof in writing.  Where such notice fails to arrive at FTMS
within three working days of the Dealer after the said time limit for the
Acceptance Inspection, it shall be deemed that there is not any excess or
shortfall or mis-shipping in nor any damage to such delivery.

 

(3)                                 In case of a
notice from the Dealer to FTMS pursuant to Item (2) above, FTMS considers
that such excess or shortfall or mis-shipping in or damage to such delivery
shall be attributable to FTMS, FTMS shall in accordance with the standards or
procedures to be further agreed, (i) deliver the shortfall or replacement
for free, or (ii) repair or adjust the damaged FTMS Products for
free.  In such case, the Dealer shall as
instructed by FTMS, render necessary assistance to FTMS in the implementation
of any of the above remedial measures selected, including returning or abandoning
the mis-shipped or damaged FTMS Products.

 

Article 19                                            Modification of
FTMS Products

 

(1)                                 FTMS may modify
the model and specifications of any FTMS Products from time to time.  In case of such modification, FTMS may
discontinue the production or shipment of the FTMS under the original model or
specifications, without any liability to the Dealer therefor.

 

(2)                                 With respect to
any effective individual purchase and sales contract that exists prior to the
modification of the model and specifications of any FTMS Products, whether the
products ordered thereunder have been delivered or not, FTMS shall have no
obligation to convert any FTMS Products under such contract into the modified
model and specifications.

 

Chapter 5                                        Business Conduct of the Dealer

 

Article 20                                            Organizational
Structure and Facilities

 

(1)                                 Following the
prior written consent from FTMS, the Dealer shall set up the facilities for the
sales of and provision of after-sales for FTMS Product on a site within the
Main Territory designated or accepted by FTMS. 
Other than any branch store otherwise authorized or recognized by FTMS,
the Dealer may not set up any branch store or any other sales or after-sales
facilities in any area for the purpose of implementing the sales and
after-sales services of FTMS Products, nor may it designate any third party as
sub-dealer.

 

(2)                                 The Dealer
shall make endeavors to conduct the promotion of FTMS Products to provide
high-quality services to the customers. 
To such end, the Dealer shall implement the following activities at its
own expense and responsibilities:

 

(A)                               prepare
appropriate immediately available funds for the purpose of implementing of the
purchase, sales and after-sales services for FTMS Products;

 

(B)                               set up and
maintain an effective organization staffed adequately with employees having sufficient
knowledge or experience for the purchase, sales and after-sales services of
FTMS Products and responding to client complaints.

 

(C)                               set up or
maintain the following facilities:

 

(i)                                     appropriate
exhibition hall(s) for the display of FTMS Products;

 

12

 

(ii)                                  storage
site(s) for the adequate management of the FTMS Cars and the warehouses
for the inventory of FTMS Components; and

 

(iii)                               facilities
for the pre-delivery inspection of FTMS products, including after-sales
services such as repair and maintenance,

 

(D)                               The
Dealer shall set up facilities that satisfy the applicable requirement for
Dealer Facilities and comply with the standards under applicable PRC
environmental laws and regulations, including without limitation, standards
relating to noise, water discharge, gas emission, fire fighting or waste.

 

(3)                                 Where FTMS
considers the Dealer fails to sufficiently satisfy any requirement specified in
this Article, the Dealer shall promptly conduct necessary improvements or
enhancements to satisfy the requirement of FTMS.

 

(4)                                 Where FTMS
considers the Dealer fails to satisfy the requirement specified in Item (3) above,
FTMS may early terminate this Contract by a written notice of termination to
the Dealer.

 

Article 21                                            Dealer’s
Management of Sales and Inventory

 

(1)                                 The Dealer
shall keep sufficient and appropriate inventory of FTMS and shall promptly and
duly purchase in and service the FTMS Products.

 

(2)                                 The Dealer may
not wholesale to any third party or export to any place outside the PRC
(including HK SAR, Macau SAR and Taiwan) or sell to any third party intending
to do such export, any FTMS Products.

 

(3)                                 In case of any
breach of the provisions in the preceding paragraph, the Dealer shall indemnify
the dealers in the areas to which it has exported any FTMS Product against any
loss of the obtainable profit resulting from such breach.  The Dealer shall negotiate about and agree on
the agreement for such indemnification with the dealers in the said areas and
FTMS shall not assume any liabilities therefor; provided however, that the
Dealer shall promptly notify FTMS of the result of such negotiation and
agreement.  The Dealer shall release FTMS
from and indemnify FTMS against any damage and loss arising from such breach.

 

Article 22                                            Recommended
Retail Price

 

FTMS
may set recommended retail prices for FTMS Products; provided that it shall
notify the Dealer of such recommended retail prices and publish the same.  The Dealer shall agree to respect such
recommended retail prices; provided however that in case FTMS sets a limit on
the highest retail price the Dealer shall observe such limit.

 

Article 23                                            Responsibilities
for Promotion and Advertisement

 

(1)                                 Subject to the
prior written consent of FTMS, the Dealer shall be obligated at its own
expense, to conduct the promotion and advertisement activities for FTMS
Products in the Main Territory in an effective and appropriate manner.

 

(2)                                 Prior to the
end of December of the current year, the Dealer shall submit to FTMS in the
form to be further specified by FTMS, its Annual Plan for the promotion and
advertisement activities for FTMS Products for the next year.

 

13

 

(3)                                 FTMS may
provide appropriate guidance and advice to the Dealer on the promotion and
advertisement activities for FTMS Products and the annual plan therefor as
submitted by the Dealer.

 

(4)                                 The Dealer
shall participate in the promotion and advertisement activities for FTMS
Products conducted by FTMs targeted at all or certain areas in the PRC.

 

(5)                                 Upon request of
FTMS, the Dealer shall render assistance to FTMS in car exhibitions, exhibition
fairs, trade fairs or contests conducted by FTMS.

 

Article 24                                            Advertisement
Materials

 

(1)                                 In order to
support the advertisement and promotion activities to be conducted by the
Dealer, FTMS shall furnish the Dealer with the advertisement and promotion
materials and other printed materials regarding FTMS at a price to be further
agreed between FTMS and the Dealer and in the type and quantity to be
determined by FTMS at its own discretion.

 

(2)                                 The Deale shall
use the trademarks designated by FTMS in conducting the advertisement and
promotion activities for FTMS products.

 

(3)                                 Any
advertisement promotion materials designed by the Dealer itself shall comply
with the codes for images/word logos provided by FTMS, and applicable laws and
regulations, and shall respect the ethical customs of the local region.  In addition, the Dealer shall assume any
liabilities relating thereto.

 

Article 25                                            Store Signs

 

(1)                                 The Dealer
shall at its own expense, purchase standard high-rise signs and FAW-TOYOTA
Standard Awnings (“Store Signs”).  In
order to maintain the uniform brand image, the Dealer shall agree to use the
Store Signs designed by FTMS to which the IP rights are owned by FTMS.  The Dealer shall purchase such Store Signs
from third parties authorized by FTMS.

 

(2)                                 The Dealer may
not set up any advertisement board or any other signs that may have any adverse
effect on any Store Signs.  Further, the
Dealer may not place any advertisement, trademark or service mark of any
product that competes with any FTMS Product.

 

Article 26                                            Provision of
After-sales Services to Customers

 

(1)                                 The Dealer
shall provide pre-delivery inspection, regular maintenance, general repair and
maintenance and other similar after-sales services to all the FTMS Cars and
Toyota Cars, whether sold out by the Dealer or not.

 

(2)                                 The Dealer
shall perform the warranty services and other after-sales services in
accordance with the Toyota Warranty Policy and Procedure Manual (the “WPPM”)
and other procedures to be subsequently provided by FTMS.

 

Article 27                                            Warranties

 

(1)                                 The Dealer
shall within the term provided in the WPPM, provide repair services to FTMS
Cars free of charge (the “Warranted Services”) within the scope set forth in
the WPPM.

 

14

 

(2)                                 In accordance
with WPPM, FTMS shall pay the Dealer the component and labor fees and expenses
incurred by the Dealer in connection with the provision of the Warranted
Services.  FTMS shall not reimburse the
Dealer for any fees and expenses for any Warranted Services that are not
covered by the scope set forth in WPPM.

 

(3)                                 With respect to
Toyota Cars, the Dealer shall also provide the Warranted Services in accordance
with any other WPPM provided by any auto supplier designated by FTMS.  In such case, such Warranted Services shall
also not exceed the scope set forth in such other WPMM.

 

Article 28                                            Pre-delivery
Inspection

 

Prior
to the delivery of any FTMS Car to its purchaser, the Dealer shall perform
pre-delivery inspection on such FTMS Car in accordance with the car inspection
standards to be subsequently furnished by FTMS.

 

Article 29                                            Regular
Inspection and Maintenance

 

(1)                                 The Dealer
shall perform regular inspection on all the FTMS Cars and Toyota Cars, whether
sold out by the Dealer or not, in each case in accordance with the standards to
be subsequently provided by FTMS.  The
fees and expenses incurred in connection with such regular inspection shall be
paid by the Dealer itself or the relevant customers

 

(2) When
a Toyota Authorized Service System (the “TASS”) designated by TMCI to provide
repair services to Toyota Cars perform free regular maintenance for FTMS Cars
sold out by the Dealer, the Dealer shall pay such TASS the expenses incurred by
such TASS in the performance of such regular maintenance upon its receipt of
the relevant invoice from such TASS.

 

Article 30                                            Special
Services

 

(1)                                 Where FTMS
requests the Dealer to perform special repair or inspection on any FTMS Cars or
Toyota Cars, the Dealer shall perform such repair or inspection as instructed
by FTMS, with the expenses relating thereto to be borne by FTMS.

 

(2)                                 The expenses
necessary for the repair or inspection performed by the Dealer and the method
for the payment of such expenses shall be subject to further negotiations
between the Dealer and FTMS.

 

Article 31                                            Components

 

(1)                                 The Dealer
shall in accordance with the conditions and procedures set forth in Articles 13
and 14, order FTMS Components from FTMS or third
parties designated by it.  Without prior
written consent from FTMS, the Dealer may not sell to any customer any FTMS
Components or any other assemblies, back-up components, genuine parts,
lubricants or special tools purchased by the Dealer from any person other than
FTMS or any third party designated by FTMS. 
The Dealer is recommended to purchase any genuine parts, chemicals and
general tools other than FTMS Products from FTMS or third parities designated
by it for the sale of the same to customers.

 

(2)                                 Even
if the Dealer sells to any customer any back-up components, assemblies,
lubricants and special tools purchased from any person other than the third
parties designated 

 

15

 

by FTMS with prior written consent from FTMS, the
Dealer shall be liable for any issue arising from such back-up components,
assemblies, lubricants and special tools and FTMS shall not be held liable
therefor.

 

Article 32                                            Response to Complaints from Customers

 

The Dealer shall promptly report to FTMS in a form
to be further designated by FTMS any complaints received by it directly or
indirectly from customers about any FTMS Products or Toyota Products.  The Dealer shall resolve such complaints at
its own expense whether such products are sold out by itself or not.  In case any complaint fails to be resolved
one month after it is received by the Dealer or is designated as a material
case by FTMS, the Dealer shall submit the details of such complaint to FTMS in
writing and resolve the same as instructed by FTMS.

 

Article 33                                            Modification of Products

 

Without prior written consent from FTMS, the Dealer
may not modify any FTMS Product, including installing on or removing from any
FTMS any component.  Even if the Dealer
modifies any FTMS Product with the prior written consent from FTMS, it shall be
the Dealer who shall take full responsibility for any abnormality or defect
arising from such modification and FTMS shall not be held liable therefor.

 

Article 34                                            Used-Car Business

 

[Intentionally omitted.]

 

Article 35                                            Any Other Retail-related Business

 

[Intentionally omitted.]

 

Chapter 6                                        Dealer Management

 

Article 36                                            Performance
Review

 

FTMS
shall have the right to periodically review the performance of the Dealer in
accordance with a uniform evaluation system (“Evaluation System”) previously
issued to the Dealer.  FTMS shall give a
certain remediation period to the Dealer if the Dealer is ranked among the
poor-performed ones on the basis of the result of such performance review.  If the Dealer still fails to reach the
remediation target upon the expiration of such remediation period, FTMS shall
have the right to early terminate this Contract by a written notice of
termination to the Dealer.  The power to
formulate, modify and interpret the Evaluation System shall lie with FTMS.

 

Article 37                                            Investigation
of Customer Satisfaction

 

FTMS
may in accordance with the method formulated by itself, conduct investigation
of customer satisfaction into the Dealer among customers who use FTMS
Products.  The Dealer shall proactively
assist FTMS in such investigation.  FTMS
may request the Dealer to take steps to improve customer’s satisfaction with
it.  Where FTMS determines that the
Daeler fails to satisfy such request six months after the request is made, FTMS
may immediately terminate this Contract by a written notice of termination to
the Dealer.

 

16

 

Article 38                                            Settlement
Account

 

The
Dealer shall open an account with a bank designated by FTMS for the special use
for transactions with FTMS and shall notify FTMS of the opening bank, account
name, and account number of such account.

 

Article 39                                            Information
System

 

The
Dealer shall agree to use the system software to be subsequently provided,
designated or accepted by FTMS in the sales, supply and performance of
after-sales services.

 

Chapter 7                                        Intellectual Property Rights

 

Article 40                                            Intellectual
Property Rights

 

(1)                                 This Contract
does not transfer to the Dealer or grant the Dealer, the full implementation
right with respect to the Licensed Marks or Toyota Name or any other trademark
rights, copyrights, industrial design rights or invention patent rights or any
other intellectual property rights owned FTMS, DMC, FAW in connection with FTMS
Products or Toyota Products.  Such
intellectual property rights shall remain the property of their respective
original owners.

 

(2)                                 The Dealer
shall not have any right to apply for the registration or publish in any
jurisdiction (i) any trademark, technical information, know-how or any
other intellectual property rights licensed by FTMS; (ii) any similar
intellectual property; (iii) any combination with any other intellectual
property rights.

 

(3)                                 The Dealer
shall monitor at all times to make sure that any intellectual property rights
relating to FTMS Products or Toyota Products will not be infringed upon by or
infringe upon any intellectual property rights of any third party.  The Dealer shall promptly notify FTMS in
writing of any use or proposed use of any such intellectual property rights by
any party other than FTMS upon being aware of the same.  In the meanwhile, the Dealer shall at written
request from FTMS and pursuant to instructions of FTMS, FAW, TMC or DMC, take
appropriate measures to protect such intellectual property rights.

 

(4)                                 When FTMS, FAW,
TMC or DMC applies for registration of any intellectual property rights
relating to FTMS Products in the Main Territory, the Dealer shall provide
assistance to FTMS, FAW, TMC or DMC as requested by FTMS.

 

(5)                                 The
intellectual property rights specified herein shall include any and all the
intellectual property rights owned by FTMS, FAW, TMC or DMC inside the PRC,
whether registered or not.

 

Article 41                                            Use of
Registered Marks

 

(1)                                 FTMS hereby
grants the Dealer a non-exclusive and non-sole right license to use the
Licensed Marks in connection with the sales and after-sales services of the
FTMS Products.

 

(2)                                 The Dealer
agrees to use the Licensed Marks only in connection with the sales and
after-sales services of FTMS Products strictly in accordance with the
directions provided by FTMS.

 

17

 

(3)                                 The Dealer
agrees that upon request from FTMS for any reason, the Dealer shall immediately
cease or change the use of the Licensed Marks.

 

Article 42                                            Use of Toyota
Name

 

(1)                                 The Dealer
shall strictly in accordance with the use directions provided by FTMS, use the
Toyota Name as a part of its corporate name, trade name or department name (the
Toyota Name licensed to the Dealer hereinafter referred as the “Licensed Name”).

 

(2)                                 The Dealer
agrees that upon request from FTMS for any reason, the Dealer shall immediately
cease or change the use of the Licensed Marks and go through the procedures
necessary for such cessation or change, including the procedures for
registration of corporate name.

 

Chapter 8                                        Term

 

Article 43                                            Term of
Contract

 

This
Contract shall become effective as of [·] and shall
remain effective for two years until [·], unless early
terminated in accordance with Article 44 below.

 

Article 44                                            Expiration and
Early Termination

 

(1)                                 This Contract
shall terminate upon occurrence of any of the following events:

 

(A)                               This Contract
is not extended upon expiration;

 

(B)                               The parties
hereto have agreed in writing to early terminate this Contract;

 

(C)                               The Domestic
Toyota Car Dealership Contract expires or terminates and no replacement
contract is executed;

 

(D)                               Either party
hereto is ordered to suspend operation or has its business license revoked or
is imposed on any other similar penalty;

 

(E)                                Either party
delivers a written notice of termination to the other party in case the other
party suffers a petition for seizure, attachment, freezing, or any other
property preservation or enforcement measures against its substantial assets,
share (including equity) or bank account;

 

(F)                                 Either party
hereto becomes insolvent, or submits or suffers a petition for dissolution,
reorganization or bankruptcy;

 

(G)                               FTMS delivers a
written notice of termination to the Dealer in case of any of the following
events:

 

(i)                                     the Dealer
suspends its business for 7 consecutive days without good cause;

 

(ii)                                  the Dealer
commits an offense or crime;

 

(iii)          the Dealer
provides any false information to FTMS, which results in FTMS committing a
material mistake in decision-making or suffering an economic loss;

 

18

 

(iv)                              the Dealer
fails to repay any loan obtained from any financial institution on basis of any
four-party agreement or cooperation agreement between FTMS and such financial
institution;

 

(v)                                 the Dealer
fails to perform its obligation to submit any written report specified in
Clause 12(1) or (2) or the Dealer makes any change specified in
Clause 12(1) or (2) without prior written consent from FTMS or FTMS
detects there exists any discrepancy between the actual organizational
structure of the Dealer and the information previously provided by the Dealer;

 

(H)                              FTMS delivers a
written notice of termination to the Dealer in accordance with Clause 6(4),
Clause 12(7), Clause 12(8), Clause 20(4), Article 36, Clause 37(3) or
Article 55.

 

(I)                                   Either party
hereto breaches any of its obligations hereunder (“Breaching Party”) and fails
to cure such breach within the 60-day remedial period allowed by the other
party and the other party delivers a written notice of termination to the
Breaching Party;

 

(J)                                   the Dealer
breaches this Contract or the FAW-TOYOTA Sales Co., Ltd. Dealership
Contract Special Clauses (the “Special Clauses”)( if any); or

 

(K)                              the parties
hereto believe that the continued performance of this Contract is rendered
impossible due to any force majeure event specified in Article 46 or any
provision in Article 53.

 

(2)                                 Termination of
this Contract in accordance with Items (A), (B), (C) or (K) in Clause
(1) above shall not constitute the basis for the claim of any
indemnification.  In case this Contract
is early terminated in accordance with Items (D) to (J) in Clause (1) above,
the party to whom the event occurs shall not have any right to claim
indemnification from the other party.

 

Article 45                                            Post-termination
Measures

 

(1)                                 Upon any
termination of this Contract, any right and obligation of either party hereto shall
be distinguished; provided however that, any creditor’s rights or debts accrued
by virtue of this Contract prior to such termination shall survive such
termination until the satisfaction thereof.

 

Notwithstanding
the foregoing provisions, with respect to any FTMS Products that are the
subject matter of any Individual Purchase and Sales Contract formed prior to
the termination of this Contract and that have not been produced or delivered,
FTMS reserves the right to cancel all or any portion of such Individual
Purchase and Sales Contract at its own discretion.

 

(2)                                 Where upon the
early termination of this Contract in accordance with any Item from (D) to
(J) in Clause 44(1), the other party claims indemnification from the party
to whom such event occurs, the party to whom such event occurs shall promptly
compensate the other party for any loss suffered.

 

(3)                                 Upon any
termination of this Contract, the Dealer shall immediately cease the use of or
remove at its own expense any advertisement signboard or store signs bearing
any Licensed Mark.  In addition, the
Dealer shall cancel or transfer free of charge to any third party designated by
FTMS any domain name containing any Licensed Mar registered by the 

 

19

 

Dealer.  Following any termination of this Contract,
the Dealer may not take any action that may cause any third party to mistake
the Dealer as a dealer or retailer or repair plant for any FTMS Products or
Toyota Products.

 

(4)                                 Following any
termination of this Contract, the Dealer shall immediately upon instruction
from FTMS, return to FTMS or subject to prior written consent of FTMS, dispose
of the following materials and the translations and copies thereof, in each
case, at its own expense;

 

(A)                               all the materials,
data and advertisement materials;

 

(B)                               software for
sales and after-sales services;

 

(C)                               tools,
machinery and equipment necessary for the repair and maintenance of the FTMS
Products or Toyota Products but those tools, machinery and equipment purchased
or financed by the Dealer and bearing any Licensed Mark may continue to be used
by the Dealer after such Licensed Mark is removed,

 

(5)                                 Following any
termination of this Contract, the Dealer may not sell, transfer or create an
encumbrance on any FTMS Product without prior written consent of FTMS.  FTMS may purchase on a priority basis those
FTMS Products kept by the Dealer that are new, unused and undamaged and are as
opinioned by FTMS in good and marketable conditions.  Subject to prior written consent of FTMS, the
Dealer may dispose of any FTMS Products that are not so purchased by FTMS.

 

(6)                                 Following any
termination of this Contract, FTMS may enter the Dealer Facilities to conduct
inspection to verify the Dealer’s performance of its obligations under this
Article.  FTMS make take legal or
administrative proceedings for removal or repossession where it determines
after such inspection that the Dealer fails to perform all the obligations
under this Article.  The Dealer shall
indemnify FTMS against any expenses arising from such proceedings.

 

(7)                                 This Article 45,
Clause 5(2) and Article 49 shall survive any termination of this
Contract.

 

Chapter 9                                        General Provisions

 

Article 46 Force Majeure

 

[Intentionally omitted.]

 

Articel
47

 

This
Contract shall be governed by PRC laws.

 

Article 48                                            Dispute
Resolution

 

Disputes
arising hereunder shall be resolved through arbitration by China International
Economic and Trade Arbitration Commission (“CIETAC”) under the CIETAC rules then
in effect.

 

Article 49                                            Confidentiality

 

20

 

[Intentionally
omitted.]

 

Article 50                                            Defense of
Performance

 

When
either party hereto breaches any of its obligations hereunder, the
non-breaching party may suspend its performance of its obligations hereunder,
without any liability to the breaching party, until the breaching party has
cured such breach.

 

Article 51                                            Indemnification

 

Each
party hereto shall indemnify the other party against any economic losses
suffered by the other party arising from the failure of such party to perform
any of its obligations hereunder.

 

Article 52                                            Entire
Agreement

 

[Intentionally
omitted.]

 

Article 53                                            Severability

 

[Intentionally
omitted.]

 

Article 54                                            No Waiver

 

[Intentionally
omitted.]

 

Article 55                                            No Assignment

 

[Intentionally
omitted.]

 

Article 56                                            Communications

 

[Intentionally
omitted.]

 

Article 57                                            Language

 

This
Contract shall be executed in Chinese.

 

Article 58                                            Non-covered
Matters

 

Any
matters not covered hereunder but relating hereto shall be resolved through
friendly consultations between the parties hereto.  The foregoing provision shall also apply to
the modification of this Contract.

 

Article 59                                            Amendment and
Modification

 

Any
amendment to this Contract shall be made by written agreement signed and
stamped by both parties hereto.

 

21

 

	
  [Dealer]
  (company seal)

  	
   

  	
  FAW-TOYOTA
  Motor Sales Co., Ltd.

  
	
   

  	
   

  	
  (company
  seal)

  
	
   

  	
   

  	
   

  
	
  Signed
  by:

  	
   

  	
   

  	
  Signed
  by:

  	
   

  
					

 

22

 

Part                          II

 

Toyota Dealership Agreement

 

By and between

 

[Dealer]

 

And

 

Toyota Motor (China) Investment Co., Ltd.

 

Dated: [·]

 

 

	
  ARTICLE 1

  	
   

  	
  TERM

  	
  3

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE 2

  	
   

  	
  APPROVED DEALER SITES

  	
  3

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE 3

  	
   

  	
  PRECONDITIONS

  	
  3

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE 4

  	
   

  	
  ACQUISITION, DELIVERY AND STORAGE OF
  TOYOTA PRODUCTS

  	
  4

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE 5

  	
   

  	
  MARKETING OF TOYOTA PRODUCTS BY THE DEALER

  	
  5

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE 6

  	
   

  	
  SERVICE OBLIGATIONS OF THE DEALER

  	
  5

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE 7

  	
   

  	
  COMPLIANCE WITH LAWS, ORDERS, RULES AND
  REGULATIONS FOR CONSUMER 

  	
   

  
	
  PROTECTION

  	
  6

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE 8

  	
   

  	
  SERVICE EQUIPMENT AND MATERIALS

  	
  6

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE 9

  	
   

  	
  INFORMATION TO BE FURNISHED BY THE DEALER

  	
  7

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE 10

  	
   

  	
  RESPONSIBILITIES FOR CUSTOMER SATISFACTION

  	
  7

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE 11

  	
   

  	
  DEALER FACILITIES AND IDENTIFICATION

  	
  7

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE 12

  	
   

  	
  FUNDS AND CREDIT AMOUNT

  	
  8

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE 13

  	
   

  	
  MATERIAL CHANGES TO THE DEALER

  	
  9

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE 14

  	
   

  	
  TERMINATION

  	
  9

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE 15

  	
   

  	
  DISPUTE RESOLUTION

  	
  11

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE 16

  	
   

  	
  DEFENSE AND INDEMNIFICATION

  	
  11

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE 17

  	
   

  	
  GENERAL PROVISIONS

  	
  12

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE 18

  	
   

  	
  DEFINITIONS

  	
  13

  

 

 

Toyota Dealership Agreement

 

This
Agreement is entered into by and between
                          [the
“Dealer”] and Toyota Motor (China) Investment Co., Ltd. (“TMCI”) on [·] in Beijing, the People’s Republic of China (the “PRC”
or “China”).

 

Objectives of the Agreement

 

This
Agreement is mainly intended to set forth the mutual undertakings of each of
TMCI and the Dealer, authorize the Dealer to deal in the Toyota Products and provide services thereto, and specify the rights
and obligations of each of TMCI and the Dealer.

 

Recitals

 

TMCI
is authorized by Toyota Motor Corporation (“TMC”) to distribute the Toyota Products and conduct relevant sales, marketing and service
activities within the PRC, excluding Hong Kong SAR, Macau SAR and Taiwan.

 

The
Dealer desires to obtain the authorization of TMCI to establish and operate
TMCI’s Dealer Facilities, sell the Toyota
Products and provide services thereto.

 

Article 1                                               Term

 

This
Agreement shall come into effect upon being executed by both parties hereto and
shall remain effective for one (1) year (the “Term”) unless earlier
terminated by agreement between the parties hereto or otherwise in accordance
with this Agreement.  The Term may be
automatically extended for a term of one (1) year
unless either party notifies that it will not renew this Agreement three (3) months
prior to the expiration of the current Term.

 

Article 2                                               Approved Dealer Sites

 

In
order for TMCI to establish and maintain an affective authorized dealer
network, the Dealer hereby agrees that it will conduct the operation of Toyota
brand products solely on the site approved by TMCI hereunder.  TMCI hereby approves that the site set forth
below and the facilities thereon shall be the sole site (the “Approved Site”)
on which the Dealer may sell the Toyota
Products, provide the relevant services and display the Toyota Trademarks: [insert description of the Approved Site].  Without prior written consent of TMCI, the
Dealer may not sell autos or auto spare parts or provide auto-related services,
nor may it set up or operate any facilities with similar purposes or functions
set forth herein in any place other than the Approved Site.  Further, without prior written consent of TMCI,
the Dealer may not change the intended purposes or functions of any Dealer
Facilities, nor may it use any Dealer Facilities for any purpose or function
other than those contemplated hereunder.

 

Article 3                                               Preconditions

 

The
obligations of TMCI hereunder are subject to the satisfaction of the following
conditions:

 

Pursuant
to the relevant provisions of the Measures for the
Implementation of the Administration of Auto Brand Sales promulgated
on February 25, 2005, the qualifications of 

 

3

 

the Dealer shall have been properly filed
with the competent authority and the scope of business of the Dealer as set
forth on its business license shall contain “sale of imported Toyota brand
cars”.

 

Article 4                                               Acquisition, Delivery and Storage of Toyota Products

 

A.                                    Appointment and
Authorization of the Dealer

 

TMCI
hereby appoints the Dealer to, and grants the Dealer a nonexclusive right to
sell the Toyota Products within
the specified geographic area and the Dealer hereby accepts such appointment
and non-exclusive authorization.

 

TMCI
reserves its right to sell by itself or through any third party the Toyota Products within the said specified geographic area.

 

Without
prior written consent of TMCI, the Dealer may sell the Toyota
Products solely to end-users and may not conduct any wholesale of the Toyota Products.

 

B.                                    Selling Price
and Conditions

 

TMCI
may set and modify from time to time the price of and other conditions for the
sale of the Toyota Products to be
sold to the Dealer.  Such modified price
and terms and conditions shall become effective upon the receipt by the Dealer
of the notice of modification (for complete cars) or the issue of new or
modified spare part price list or the completion of the notice, letter, circular
or sheet of modification (for auto components and spare parts) or any other
time designated by TMCI.

 

TMCI
shall have the right to se and publish the manufacture suggested retail price
(MSRP) of the Toyota Products.  The Dealer shall display in a prominent
position on the Approved Site the MSRP of the Toyota
Products and the fees charged by the Dealer for various services provided by
it.

 

C.                                    Manners, Place
and Fees of Product Delivery

 

TMCI
may designate the place of delivery and the manners of transport and select the
carriers for delivering the Toyota products to the Dealer.

 

The
ownership of each shipment of Toyota Products delivered to the Dealer shall be
transferred to the Dealer upon TMCI’s receipt from the Dealer of the total
price for such shipment.  Notwithstanding
the foregoing, TMCI shall not be responsible for any destruction, loss or
damage to any Toyota Products sold hereunder that have been delivered to the
place of delivery.

 

D.                                    Change to
Design, Optional Configuration or Specifications

 

TMCI
may change the design or specifications or configuration of any Toyota
Products, without any obligation to notify the Dealer in advance or to make
similar changes to any products previously purchased by the Dealer or shipped
to the Dealer.

 

4

 

E.                                     Discontinuation
of Production or Importation

 

Subject
to applicable PRC laws, the Manufacturer and/or TMCI may at any time
discontinue the production, importation or distribution of all or any portion
of the Toyota Products, without any liabilities or obligation to the Dealer.

 

F.                                      Inventory

 

Within
the Term, the Dealer shall as required by TMCI, maintain sufficient and
appropriate inventory of the Toyota
Products so as to quickly and promptly deliver the relevant Toyota Products and
services to the users.

 

G.                                    Product
Refitting

 

Without
prior written consent of TMCI, the Dealer may not install on any Toyota car  any components or spare parts sold on the
auto spare part market, or otherwise refit any Toyota car that may harm the
safety, exhaust emission, overall structure or performance of such Toyota car.

 

Article 5                                               Marketing of Toyota Products by the Dealer

 

A.                                    Export Policies

 

The
Dealer is granted the authorization to sell Toyota Products only  within the PRC.  In no even, may
the Dealer sell or export any Toyota Products to any region or country outside
the PRC, nor may it sell any Toyota product to any individual or entity that
the Dealer know or should know or has reason to believe intends to sell or
export such Toyota Products to any region outside the PRC.

 

B.                                    Advertisement
and Publicity Obligations

 

The
Dealer is obligated to, at its own expense and subject to the prior consent of
TMCI, conduct the publicity and advertisement activities for Toyota Products.  TMCI may provide the Dealer with appropriate
guidance or advice on such promotion and advertisement activities.

 

Upon
request of TMCI, the Dealer shall proactively participate in any promotion of
Toyota Cars or any publicity and advertisement activities conducted by TMCI
aimed at improving the auto services.  As
request by TMCI, the Dealer shall render assistance to TMCI in connection with
car exhibition, exhibition fairs and car races.

 

TMCI
may provide the Dealer with paid or free relevant advertisement literatures
relating to Toyota Products.

 

Article 6                                               Service Obligations of the Dealer

 

A.                                    Pre-delivery
Obligations for New Cars

 

The
Dealer hereby agrees that it shall provide pre-delivery services to each new
Toyota car in accordance with Toyota standards prior to the delivery of such
new Toyota car to the relevant user.

 

5

 

B.                                    Warranty and
Policy Adjustment Services

 

The
Dealer hereby confirms that the sole warranty applicable to the Toyota Products
shall be the Toyota Warranty Procedures provided by TMCI or the Manufacturer or
any other written warranty specifically provided by TMCI or the Manufacturer.

 

The
Dealer shall provide the warranted services, non-warranted services or policy
adjustment services specified by TMCI to Toyota Cars in accordance with Toyota
Warranty Procedures.  TMCI shall
reimburse the Dealer for all the expenses incurred by the Dealer in connection
with all the warranty and policy adjustment work.

 

The
Dealer agrees that it shall take all reasonable steps to provide services to
Toyota brand cars, wherever purchased or whether eligible to warranted services
or not.

 

C.                                    Use of
Components and Spare Parts

 

Unless
otherwise agreed between the parties hereto, the Dealer may not use in the provision
of the repair or other services, any components or spare parts other than the
Genuine Toyota Components and Spare Parts purchased from the parties designated
and approved by TMCI.

 

D.                                    Recall
Activities

 

TMCI
may organize recall activities from time to time.  The Dealer shall, as instructed by TMCI,
fully cooperate with TMCI in connection with TMCI’s recall activities.  TMCI shall have the right to cease the supply
of any Toyota Products to the Dealer in case TMCI recalls such Toyota Products
or suspects that such Toyota Products are defective.

 

Article 7                                               Compliance with Laws, Orders, Rules and Regulations for Consumer
Protection

 

The
Dealer shall strictly comply all the PRC laws, orders, rules and
regulations relating to consumer protection and be responsible for the repair,
replacement or return of the Toyota Products for the relevant consumers.

 

The
Dealer shall notify TMCI of any complaint against TMCI that may result in TMCI
assuming liabilities and shall take all measures as required by TMCI.  In case TMCI reasonably determines that the
Dealer fails to repair any car in accordance with the policies and procedures
issued by TMCI in writing or express instructions orally given by TMCI with
subsequent written confirmation, the Dealer shall be liable for paying the
refund back to or replacing car for the user. 
The Dealer shall also agree to provide user notices or public
announcements relating to car repair or replacement required under applicable
laws or any other consumer protection laws or regulations.

 

Article 8                                               Service Equipment and Materials

 

The
Dealer agrees to obtain and properly maintain sufficient service equipment and
special service tools and instruments specified by TMCI.

 

TMCI
agrees to provide to the Dealer copies of those service manuals, public
announcements, printed materials and technical data which are deemed by TMCI to
be actually needed by the Dealer.  The
Dealer shall be responsible for causing such service manuals, public announcements,
printed materials and technical data to be most updated and available to its
employees.  The copyright to the
foregoing service manuals, public 

 

6

 

announcements,
printed materials and technical data shall be vested in the TMCI or the
Manufacturer.

 

Article 9                                               Information to be Furnished by the Dealer

 

The
Dealer shall, upon request of TMCI or upon execution of the relevant agreement
with TMCI, furnish the following information to TMCI:

 

a.                                      information
relating to the sales and inventory of Toyota Products or the background of the
Dealer;

 

b.                                      information to
the Dealer’s planned sales volume and sales cost of the Toyota Products;

 

c.                                       information
relating to the organization and staff of the Dealer;

 

d.                                      information
relating to the assessment and technical or sales issues of Toyota Products;

 

e.                                       information
relating to the assessment, models, sales conditions, sales prices and sales
quantity of the competitive products;

 

f.                                        statistical
data relating to auto and auto components and services;

 

g.                                       information relating
to the laws, orders, rules and regulations that have been or are expected
to be implemented and may have an effect on the sales, service, manufacture,
structure or performance of the Toyota Products;

 

h.                                      political and
economic information that relates to economic forecasts or may have an effect
on the sales, service, or components production plan of the Toyota Products;
and

 

i.                                          any other
information reasonably requested by TMCI.

 

Article 10                                        Responsibilities for Customer Satisfaction

 

[Intentionally
omitted.]

 

Article 11                                        Dealer Facilities and Identification

 

A.                                    Dealer
Facilities

 

In
order to enable TMCI to establish an effective authorized Toyota dealer
network, the Dealer shall provide and maintain at all times the Dealer
Facilities of a high-taste on the Approved Site, which facilities shall satisfy
TMC’s requirement for image, size, layout, internal design, color, equipment
and identification symbols.

 

B.                                    Signs

 

TMCI
hereby grants the Dealer a non-exclusive right to use Toyota signs.  The Dealer shall purchase from the designated
third party the Toyota signs at its own expense, install the Toyota signs as
instructed by TMCI, and maintain the Toyota signs in a good state of repair
within the term of this Agreement.

 

7

 

The
Dealer hereby agrees that it will not display on the Approved Site any sign
other than the Toyota sign that may in the judgment of TMCI have an adverse
effect on any Toyota sign.

 

C.                                    Use of Toyota
Trademarks

 

1.                                      Dealer’s Use of
Toyota Trademarks

 

TMCI
hereby grants the Dealer a non-exclusive and non-transferrable right to display
or otherwise use Toyota Trademarks in the sale of or provision of service to
Toyota Products at the Approved Site.

 

The
Dealer further agrees that upon request of TMCI for whatever reason the Dealer
shall cease immediately the display or use of any such Toyota Trademarks and
shall change the manner in which any Toyota Trademark is displayed.  The Dealer may use Toyota Trademarks only in
the Approved Site and for the purposes set forth herein.  Without TMCI’s prior written consent, the
Dealer may not use any Toyota Trademark as a component of the Dealer’s
tradename.

 

2.                                      Cession of Use

 

The
Dealer agrees that upon any termination, failure of renewal or expiration of
this Agreement, it will immediately:

 

a.                                      cease the use
of the word “Toyota” or any Toyota Trademark or any word or trademark similar
thereto, including without limitation any use of any office supplies, telephone
address books or any other print-outs involving Toyota or bearing any Toyota
trademark;

 

b.                                      cease the use
of the word “Toyota” or any Toyota Trademark or any word or trademark similar
thereto as a component of its tradename or corporate name, and go through the
formalities with the competent governmental authorities for the change to or
cessation of the use of such name;

 

c.                                       remove all the
product marks bearing the word “Toyota” or any Toyota Trademark at its own cost
and expense;

 

d.                                      cease holding
itself out as an authorized Toyota dealer; and

 

e.                                       refrain from
taking any act that indicates whether expressly or implicitly that it is
authorized to deal in or distribute Toyota Products, including without
limitation, any advertisements.

 

If
the Dealer fails to comply with its obligations set forth above, TMCI shall
have the right to enter the buildings of the Dealer to remove the said product
marks bearing “Toyota” or any Toyota Trademark, without any liabilities
therefor.

 

Article 12                                        Funds and Credit Amount

 

The
Dealer agrees to determine in due course and maintain sufficient net cashflow
and shall obtain and maintain at all times sufficient bottom line credit
facilities from banks or financial institutions.

 

8

 

Article 13                                        Material Changes to the Dealer

 

If
the Dealer intends to merge with any company or transfer or otherwise dispose
of its substantial assets or business to any third party, replace its general
manager or otherwise materially restructure its business or organization, or
the Dealer expects that its major investor or any other controlling person or
entity will or may change, it shall notify TMCI of the details of such intended
or expected changes in advance.

 

If
TMCI determines that any of the above changes may damage in any way the
performance by the Dealer of, or the ability of the Dealer to perform any of
its obligations hereunder, or any of TMCI’s rights or interests hereuner, TMCI
shall have the right to request the Dealer to suspend such change or amend the
plan for or conditions of such changes. 
Failure of the Dealer to comply with such request shall entitle TMCI to
terminate this Agreement in accordance with Article 14.

 

Article 14                                        Termination

 

A.                                    Unilateral
Termination and Agreed Termination

 

Each
party hereto shall have the right to notify the other party of its intention
not to renew this Agreement three (3) months prior to the expiration of
the Term, without any liability therefor. 
In such case, this Agreement shall terminate on the expiry date of the
Term.

 

This
Agreement may be earlier terminated at any time upon agreement between the
parties hereto.  In such case, this
Agreement shall terminate on the date mutually agreed by the parties.

 

B.                                    Termination for
Cause

 

1.                                      Immediate
Termination

 

This
Agreement shall automatically terminate upon the termination of the Toyota
Dealership Agreement by and between TMCI and TMC.

 

The
Dealer and TMCI acknowledge that the following actions are under the control of
the Dealer, that the following actions are contrary to the purposes and
intentions of this Agreement, and that the occurrence of any of the following
actions shall result in the immediate termination of this Agreement.  The Dealer agrees that TMCI shall have the
right to terminate this Agreement in case:

 

a.                                      the Dealer is
unable to conduct its business in the ordinary course of business for seven (7) consecutive
working days, except that such shut-down or suspension is caused by any force
majeure event set forth in Article 17(D) below;

 

b.                                      the Dealer
becomes insolvent, is subject to liquidation or is subject to a petition for
bankruptcy by or against it or is subject to any seizure or enforcement or
similar proceedings;

 

c.                                       any investor or
director of the Dealer is declared to be guilty;

 

d.                                      any investor or
director or the general manager of the Dealer makes any material false
representation; or

 

9

 

e.                                       the Dealer
fails to obtain or maintain any license, permit or authorization required for
the conduct of its business in accordance with this Agreement or any such
license, permit or authorization is suspended or revoked.

 

2.                                      Termination by
60 Days’ Notice

 

TMCI
shall have the right to terminate this Agreement by a sixty (60) days’ prior
notice in case the Dealer takes any of the following actions in violation of
this Agreement:

 

a.                                      the Dealer
seeks to sell, transfer or convey or sells, transfers or conveys any of the
rights granted hereunder, or the Dealer seeks to transfer or convey or
transfers or conveys any of its obligations hereunder without prior written
consent;

 

b.                                      the Dealer
conducts any Toyota sales outside the Approved Site;

 

c.                                       the Dealer
fails to make the payment to TMCI for any Toyota Products;

 

d.                                      there arises
any dispute between the managers and officers or any investor of the Dealer
which in the reasonable judgment of TMCI may have an adverse effect on the
ownership, operation, management, business, reputation or interests of TMCI;

 

f.                                        the reputation
or financial standing of the Dealer is damaged after the execution of this
Agreement;

 

g.                                       the Dealer
fails to perform this Agreement or breaches any other term or condition hereof;
or

 

h.                                      the Dealer or
any of its investors or directors is subject to any civil or administrative
liabilities due to any vehicle-related matter, which in the judgment of TMCI
may have a material adverse effect on the ownership, operation, management,
business, reputation or interests of the Dealer or may harm the goodwill
associated with Toyota Trademarks.

 

In
the event TMCI reasonably believes that the Dealer fails to fully perform its
sales, service or customer satisfaction responsibilities, it shall notify the
Dealer in writing of such deficiency, make best endeavors to review together
with the Dealer the nature and degree of such deficiency, and allow the Dealer
sixty (60) days or any other period required by law to cure such
deficiency.  Notwithstanding the
foregoing, TMCI shall have the right to take any action against the Dealer at
its own discretion, including without limitation, ceasing or lmiting the delivery
of Toyota Products to the Dealer until substantial improvement is made.  If the Dealer fails or refuses to cure such
deficiency or fails to make any substantial progress towards the cure of such
deficiency at the expiration of such 60-day period, TMCI may terminate this
Agreement by a sixty-day prior notice or any other notice required by law.

 

C.                                    Termination
Notice

 

Any
notice of termination hereunder shall be in writing, set forth TMCI’s reasons
for termination, and may be amended by TMCI as appropriate.

 

D.                                    Post-termination
Steps

 

Upon
its receipt of any notice from TMCI to terminate or not to renew this
Agreement, the Dealer agrees to conducts its business in a manner that will not
harm Toyota Trademarks or

 

10

 

the
reputation or goodwill of TMCI or TMC until the date on which the notified
termination or non-renewal becomes effective.

 

Upon
any termination of this Agreement, the Dealer shall be obligated to return
immediately back to TMCI all the facilities and equipment, advertisement
materials and technical documentation as well as the reproductions thereof, or
as instructed by TMCI, dispose of the foregoing in the presence of TMCI’s
representatives.

 

Article 15                                        Dispute Resolution

 

A.                                    Dispute Resolution

 

1.                                      Any dispute
arising from or in connection with this Agreement, or the performance, breach,
termination, validity or interpretation of this Agreement, shall first be
resolved through good faith consultations between the authorized
representatives of the parties.

 

2.                                      Any dispute
that fails to be resolved through such consultations within sixty (60) days as
of the commencement of such consultations may be submitted to China
International Economic and Trade Arbitration Commission (“CIETAC”) for final resolution
under the then effective CIETAC arbitration rules.

 

3.                                      The arbitration
shall be conducted as follows:

 

a.                                      the arbitration
shall be conducted in Beijing;

 

b.                                      the arbitral
tribunal shall consist of three arbitrators. 
The claimant and the respondent shall each appoint one arbitrator and
the third arbitrator shall be selected in accordance with CIETAC arbitration
rules; and

 

c.                                       the arbitration
shall be conducted in Chinese.

 

4.                                      An arbitral
award shall be final and binding upon both parties.  The parties hereto shall agree to be bound by
and act in accordance with such arbitral award.

 

5.                                      Arbitration
costs shall be paid in accordance with the requirements of the arbitral
tribunal or relevant provisions in the arbitral award.

 

6.  When any dispute is under arbitration, other
than the matter in dispute, the parties shall continue to perform their
respective remaining rights and obligations hereunder, other than the rights
and obligations relating to termination.

 

B.                                    Governing Law

 

This
Agreement shall be governed by the published laws of the PRC.  Where the published laws of the PRC remain
silent on any specific matter, general international business practice shall be
referred to.

 

Article 16                                        Defense and Indemnification

 

The
Dealer hereby agrees to protect and indemnify TMCI and the Manufacturers
against, and hold them harmless from, any and all the claims, actions,
liabilities or damages relating to

 

11

 

any
of the following events, and shall pay any and all the expenses and fees and
damages awarded by the arbitral awards or judgments involved therein:

 

a.                                      any omission or
intentional misconduct of the Dealer or any of its employees or agents;

 

b.                                      any breach of
this Agreement by the Dealer;

 

c.                                       any
modification to any Toyota product by or on behalf of the Dealer, other than
those made pursuant to express written request or approval of TMCI and strictly
in accordance with any instruction (including drawings) issued or approved by
TMCI in writing; or

 

d.                                      any installation
by the Dealer of any equipment, spare part or replacement component that does
not comply with the technical specifications or quality standards.

 

Article 17                                        General Provisions

 

A.                                    Notices.

 

[Intentionally
omitted.]

 

B.                                    No Implicit
Waiver

 

[Intentionally
omitted.]

 

C.                                    Sole Agreement

 

[Intentionally
omitted.]

 

D.                                    Force Majeure

 

[Intentionally
omitted.]

 

E.                                     Language

 

This
Agreement shall be executed in Chinese.

 

F.                                      No Agency or
Representative

 

The
Dealer is an independent contractor and this Agreement does not designate the
Dealer as an agent or legal representative of TMCI for any purpose.

 

G.                                    Assignment of
Rights or Delegation of Responsibilities

 

Without
prior written consent of TMCI, this Agreement may not be assigned.

 

H.                                   Confidentiality

 

[Intentionally
omitted.]

 

I.                                        Severability

 

[Intentionally
omitted.]

 

12

 

J.                                        Agreement
Reached Through Negotiations

 

Each
term hereof has been fully negotiated between the parties hereto.  The Dealer acknowledges that TMCI has taken
reasonable measures to cause the Dealer to pay special attention to those
provisions releasing or limiting the liabilities of TMCI, and TMCI has fully
explained such provisions to TMCI.

 

Article 18                                        Definitions

 

The
parties hereto agree that the following terms used herein shall have the
meanings set forth below:

 

A.                                    “Dealer
Facilities” refers to the buildings, fixtures and equipment located on the
Approved Site.

 

B.                                    “Approved Site”
refers to the site designated in Article 2 as approved by TMCI to be used
for the dealership contemplated hereunder and any facilities thereon.

 

C.                                    “Toyota
Trademarks” refers to various Toyota Trademarks, service marks, names, symbols
and patterns that TMCI authorizes the Dealer to use in its sale of Toyota
Products and provision of services thereto.

 

D.                                    “Toyota Cars”
refers to all the imported Toyota brand cars to be sold by TMCI to the Dealer
for resale.

 

E.                                     “Genuine Toyota
Components and Spare Parts” refers to all the Toyota brand components and spare
parts manufactured by or under the authorization of the Manufacturer, or any
other components or spare parts sold by TMCI to the Dealer for resale and
specifically approved by the Manufacturer to be used for the provision of
services to imported Toyota Cars.

 

F.                                      “Toyota
Products” refers to all the Toyota Cars, components and spare parts to be sold
by TMCI at its own discretion to the Dealer for resale, specifically excluding
any cars, components or spare parts imported to China by any person or entity
other than TMCI.

 

G.                                    “Manufacturer”
refers to the manufacturer of the Toyota Products.

 

IN
WITNESS THEREOF, this Agreement has been duly executed by the authorized
representatives of both TMCI and the Dealer.

 

	
  [Dealer]

  	
   

  	
  Signed
  by : 

  	
   

  	
  Legal
  Representative 

  
	
   

  	
   

  	
   

  	
   

  	
  Title

  
	
   

  	
   

  	
  Signature

  	
   

  	
   

  
	
  Date:
  [·]

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Toyota
  Motor (China) Investment Co., Ltd.

  	
   

  	
  Signed
  by : 

  	
   

  	
  General
  Manager 

  
	
   

  	
   

  	
   

  	
   

  	
  Title

  
	
   

  	
   

  	
  Signature

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Date:
  [·]

  	
   

  	
   

  	
   

  	
   

  

 

13Exhibit 10.9

 

Chang
An Ford Mazda Automobile 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 Chang An Ford Mazda Co., Ltd., a
corporation established under the laws of the People’s Republic of China (“PRC”)
with its registered office at No. 1 Changfu West Road, Yuanyang Town,
North of Chongqing City (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 owner and significant shareholder of the Dealer:

 

The
former applicant:                                                

 

The
significant shareholder (or owner) of the former applicant:                               

 

Name
of the legal representative:                                                                        

 

ID
Card No.:                                                                                            

 

The
proportion of the shares it holds in the total amount of the investments
contributed by the shareholders of the Dealer: 99.9%

 

2.
The following person is the general manager of the Dealer, who shall have
sufficient right in the management of the business and operation of the Dealer:

 

Name
of the general manager:                                                               

 

2

 

ID
Card No.:                                                                                          

 

Domicile
address:                                                                                  

 

3.
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:

  	
   

  
	
   

  	
   

  
	
  4.
  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.  The Dealer shall provide the Company with a
prior written notice with respect to any probable change of the ownership or
management right, and shall notify the Company immediately of any death or
incapacity of any person listed in Article 2.  Unless and until any appropriate written
amendment to or agreement for the assignment of this Contract has been duly
executed and delivered to the Company and the Dealer, no amendment, notice or
any assignment of any rights or interests hereunder may become effective.  In case of any failure by the Dealer to
obtain from the Company the prior written consent to such amendment and
assignment, the Company shall be entitled to terminate this Contract in
accordance with Article 21 hereof.

 

3

 

Article 4
Interpretations and Definitions

 

1.
Interpretations [intentionally omitted]

 

2.
Definitions

 

In
this Contract:

 

(1) “Company”
means Chang’an Ford Mazda Co., Ltd., with its principal office located at No. 1,
Changfu West Road, New District, North of Chongqing City, 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.

 

(9) “Affiliate”
means Mazda Motor Corporation, Ford Asia-Pacific Automobile Holding Co., Ltd.,
Ford Motor (China) Co., Ltd., Chang’an International Corporation, and any
other companies related to Mazda Motor Corporation.

 

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

 

(12)
“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.

 

(13)
“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.

 

(14)
“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.

 

(15)
“Services” means the inspection, testing, repair, adjustment, maintenance,
calibration and any other services in respect of new automobiles.

 

4

 

(16)
“Client Directions” includes a product manual, maintenance manual,
advertisement manual and certain other documents for client’s reference.

 

(17)
“Trademark” means any trademarks, trade names or the name of the Company
legally used, registered or owned by the Company.

 

(18)
“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.

 

(19)
“Mazda” means the Mazda Motor Corporation.

 

(20)
“Mazda Brand Autos” means Mazda brand automobiles of any models produced or
sold by the Company within the PRC.

 

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 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.

 

The
Dealer is authorized hereunder and agrees to sell the Products only to the
clients who purchase the Products for their own use but not for resale and the
Company’s authorized dealers of the Products in the PRC and their
Affiliates.  The Dealer is prohibited
from selling the Products to non-authorized dealers and/or brokers.  Such restrictions shall not limit the right
of the Dealer to sell the Product outside of the Territory, provided that the
Dealer may only sell the Products to the person whose purpose of buying the
Products is to use the same in the PRC but not for export.

 

5

 

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 by the Company, 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.

 

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.

 

6

 

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

 

(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.

 

7

 

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.

 

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.

 

8

 

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.

 

(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]

 

9

 

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.

 

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 

 

10

 

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

 

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 

 

11

 

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.

 

3.
Liability for Demurrage

 

The
Dealer shall be responsible for any demurrage and storage fees and any other
expenses incurred after the delivery of the Products, and it shall also pay any
additional fees and expenses incurred by the Company or its Affiliates due to
the cancellation of any orders for Products or refusal or failure to receive
the ordered Products by the Dealer.

 

4.
Taxes and Charges

 

The
Dealer shall be responsible for any and all taxes and charges related to the
Products.

 

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.

 

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.

 

12

 

Article
21 Termination

 

1.
Termination by the Dealer

 

The
Dealer may terminate this Contract at any time with ninety (90) days prior
written notice to the Company.

 

2.
Termination by the Company due to Events under the control of the Dealer

 

Termination
of this Contract due to the following events under the control of the Dealer
and beyond the control of the Company, which are in material contravention with
the intention and purpose of this Contract:

 

(1)
transfer or attempt transfer by the Dealer of any interests, rights, privileges
or obligations hereunder; transfer of the material assets of the Dealer
required for the operation of the Products due to any legal or other similar
reasons; any direct or indirect change of the ownership or management member of
the Dealer without prior written consent of the Company in accordance with
Article 3;

 

(2)
The Dealer or the persons identified under Article 2 conceal relevant facts in
applying for this Contract; the Dealer conceals any facts of the persons
identified under Article 2; the Dealer delivers false or fraudulent
applications, demands, representations or reports to the Company or any of its
Affiliates during its dealing in the Products;

 

(3)
The Dealer becomes bankrupt or insolvent;

 

(4)
The Dealer or the person identified under Article 2 is determined by a court to
be in violation of any law, or such person’s act is incompliant with that of a
merchant with good reputation, or any disagreements arises among the persons
identified under Article 2, in each case, which seems to the Company that may adversely
affect the operation or business of the Dealer or the reputation, good will or
credibility of the Dealer, the Company, any other dealers, Affiliates or the
Products;

 

(5)
The Dealer continues to engage in any business or advertisement activities in
contravention of Article 23.8 after being warned by the Company in writing;

 

(6)  The Dealer fails to meet the requirements set
forth under Article 5 to Article 7 and Article 15;

 

(7)
The Dealer fails to pay any amounts which have become due to the Company or any
Affiliates, and fails to pay such amounts in full within fifteen (15) days
after it receives the notice from the Company or such Affiliates.

 

In
case of any event described above, the Company may terminate this Contract with
at least 15 days notice in writing to the Dealer.

 

3.
The Company may terminate this Contract with at least sixty (60) days notice in
writing to the Dealer if the Dealer fails to perform its obligations under
Article 9, 10, 12, 13, 14 and 23, and the then applicable standard manual of
the Products and the Dealer.

 

4.
In the event of death or incapacity of the owner of the Dealer, the Company or
the Dealer may terminate this Contract with at least fifteen (15) days notice
in writing to the other party.

 

13

 

5.
If the Dealer or the Company fails to obtain the license required for the
performance of this Contract, either the Company or the Dealer may terminate
this Contract with at least fifteen (15) days notice in writing to the other
party.

 

6.  Termination by the Company at its sole
discretion

 

The
Company may terminate this Contract at its sole discretion at any time with
thirty (30) days prior written notice to the Dealer.

 

7.
If the Company or any Affiliate proposes a new or amended contract to the
Dealer, the Company may terminate this Contract with at least thirty (30) days
notice in writing to the Dealer.

 

8.
Act in Good Faith

 

(1)
The Dealer acknowledges that (i) any failure to perform any of its obligations
hereunder shall be deemed a material breach of this Contract; (ii) the
occurrence of any event described under Article 21.2, 21.3 or 21.5 will
materially affect the basic intention of this Contract, and (iii) the retention
by the Company of the termination right under Article 21.7 is necessary for the
Company to always remain competitive.

 

(2)
If the Company or any representative of the Company (i) requests the Dealer to
perform any of its obligations, (ii) finds the Dealer fails to perform its
obligation and notifies the Dealer of the same, and (iii) send a termination
notice to the Dealer in case of the event described in (ii), the Dealer agrees
that such request, notice or termination shall not be regarded to be a threat,
unreasonable, unfair or dishonest.

 

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 

 

14

 

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

 

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]

 

15

 

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.

 

 

	
  Chang
  An Ford Mazda Automobile Co., Ltd.

  	
   

  
	
   

  	
   

  
	
  Authorized
  representative:

  	
   

  
	
   

  	
   

  
	
  Dated:

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  [Dealer]

  	
   

  
	
   

  	
   

  
	
  Authorized
  representative:

  	
   

  
	
   

  	
   

  
	
  Dated:

  	
   

  

 

16

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