Document:

Exhibit 10.4

 

Letter of Authorization for Automobile Dealer

 

Subject
to applicable regulations of relevant PRC governmental authorities and the
marketing network requirements of the FAW Group Corporation, we hereby
authorize                 
to be a dealer for the automobiles of our company within Beijing, PRC.

 

1.             Authorizer:        FAW-Volkswagen
Sales Co., Ltd.

 

2.             Description of the auto brands
covered under this letter:

 

	
  No.

  	
   

  	
  Authorized Brands

  
	
  1

  	
   

  	
  FAW-Volkswagen
  Brands

  
	
  2

  	
   

  	
   

  
	
  3

  	
   

  	
   

  

 

3.             Store same, logos and trademarks
permitted to be used by the dealer under this letter:

 

[store
name]

 

[logos
and trademarks of FAW-Volkswagen]

 

 

	
  Signed by legal representative: 

  	
   

  	
   

  
	
   

  	
   

  
	
  Affixed with the company seal: 

  	
   

  	
   

  
	
   

  	
   

  
	
  Dated: 

  	
   

  	
   

  
				

 

1Exhibit 10.5

 

FAW-Volkswagen Audi Dealership Agreement

 

 

Table of Contents

 

	
  RECITALS

  	
   

  	
   

  	
  3

  
	
   

  	
   

  	
   

  	
   

  
	
  CHAPTER I

  	
   

  	
  BASES FOR AGREEMENT

  	
  3

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE 1

  	
   

  	
  DEFINITIONS

  	
  3

  
	
  ARTICLE 2

  	
   

  	
  AGREEMENT

  	
  3

  
	
   

  	
   

  	
   

  	
   

  
	
  CHAPTER II

  	
   

  	
  OBLIGATIONS AND LEGAL STATUS OF THE DEALER

  	
  4

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE 3

  	
   

  	
  PRINCIPLES
  OF PERFORMANCE

  	
  4

  
	
  ARTICLE 4

  	
   

  	
  TERRITORY

  	
  4

  
	
  ARTICLE 5

  	
   

  	
  INFRASTRUCTURE
  CONSTRUCTION

  	
  5

  
	
  ARTICLE 6

  	
   

  	
  SALES
  TARGET AND CAR DELIVERY

  	
  5

  
	
  ARTICLE 7

  	
   

  	
  USED
  CARS

  	
  5

  
	
  ARTICLE 8

  	
   

  	
  CARS
  FOR STOCK, CARS FOR DISPLAY, CARS FOR TEST RIDE AND TEST DRIVE, CARS FOR
  REPLACEMENT DURING SERVICES, AND CARS FOR SERVICES 

  	
  6

  
	
  ARTICLE 9

  	
   

  	
  AFTER-SALES
  SERVICES

  	
  6

  
	
  ARTICLE 10

  	
   

  	
  PRODUCT WARRANTY

  	
  6

  
	
  ARTICLE 11

  	
   

  	
  PARTS

  	
  7

  
	
  ARTICLE 12

  	
   

  	
  AUDI LIFESTYLE ARTICLES

  	
  7

  
	
  ARTICLE 13

  	
   

  	
  PROMOTION

  	
  7

  
	
  ARTICLE 14

  	
   

  	
  LOGOS AND TRADEMARKS

  	
  8

  
	
  ARTICLE 15

  	
   

  	
  INFORMATION AND REPORTS

  	
  8

  
	
  ARTICLE 16

  	
   

  	
  CHANGES TO SHAREHOLDING

  	
  9

  
	
   

  	
   

  	
   

  	
   

  
	
  CHAPTER III

  	
   

  	
  RIGHTS AND OBLIGATIONS OF THE
  SUPPLIER

  	
  9

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE 17

  	
   

  	
  RECOMMENDATIONS AND SUPPORT

  	
  9

  
	
  ARTICLE 18

  	
   

  	
  PRICING

  	
  9

  
	
  ARTICLE 19

  	
   

  	
  PAYMENT OF WARRANTY FEES AND
  EXPENSES

  	
  9

  
	
  ARTICLE 20

  	
   

  	
  DIRECT SALES

  	
  10

  
	
   

  	
   

  	
   

  	
   

  
	
  CHAPTER IV

  	
   

  	
  TERM AND TERMINATION

  	
  10

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE 21

  	
   

  	
  TERM

  	
  10

  
	
  ARTICLE 22

  	
   

  	
  NORMAL TERMINATION

  	
  10

  
	
  ARTICLE 23

  	
   

  	
  IMMEDIATE TERMINATION

  	
  10

  
	
  ARTICLE 24

  	
   

  	
  CERTIFICATE

  	
  11

  
	
  ARTICLE 25

  	
   

  	
  PROCEDURES OF THE TERMINATION
  OF THE AGREEMENT

  	
  11

  
	
   

  	
   

  	
   

  	
   

  
	
  CHAPTER V

  	
   

  	
  GENERAL PROVISIONS

  	
  12

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE 26

  	
   

  	
  AMENDMENT AND ENTIRE AGREEMENT

  	
  12

  
	
  ARTICLE 27

  	
   

  	
  ASSIGNMENT

  	
  12

  
	
  ARTICLE 28

  	
   

  	
  SEVERABILITY

  	
  12

  
	
  ARTICLE 29

  	
   

  	
  NO WAIVER

  	
  12

  
	
  ARTICLE 30

  	
   

  	
  RESPONSIBILITIES

  	
  12

  
	
  ARTICLE 31

  	
   

  	
  JURISDICTION

  	
  12

  

 

2

 

Recitals

 

FAW-Volkswagen
Sales Co., Ltd. is the general distributor for Audi brand passenger car
series and intends to establish a nationwide effective sales service network
for the purpose of satisfying the demand of the customers and achieving the
intended sales and service targets for Audi cars.  To such end, FAW-Volkswagen Sales Co., Ltd.
seeks cooperation with all Audi authorized dealers.

 

NOW, THEREFORE, FAW-Volkswagen Sales Co., Ltd.
(the “Supplier”) and [Dealer] (the “Dealer”) reach agreement as follows:

 

Chapter I                                          Bases for Agreement

 

Article 1                                               Definitions

 

The
parties hereto define the following terms as follows subject to their
respective rights and obligations hereunder:

 

1.                                      “Contracted
Products” means the Audi car series and the associated auto parts and lifestyle
articles with respect to which the FAW-Volkswagen Sales Co., Ltd. acts as
the general distributor.

 

2.                                      “Selling
Agencies” means FAW-Volkswagen Sales Co., Ltd. hereunder and any FAW-VW
Audi Authorized Dealer authorized by it.

 

3.                                      “Territory”
means an area designated by the Supplier to be the territory in which the
Dealer shall conduct the sales of the Contracted Products as further set forth
in Exhibit [     ] Territory
hereto.

 

4.                                      “Business
Standards” means the FAW-VW Authorized Dealer Management Manual, the FAW-VW
Audi Brand CI/CD Manual, and the FAW-VW Audi After-sales Service Management
Manual as formulated by the Supplier pursuant to this Agreement and subject to
the rights and obligations hereunder.

 

Article 2                                               Agreement

 

1.                                      The Supplier
hereby grants the Dealer a right, and the Dealer hereby agrees to have an
obligation, to sell the Contracted Products to end-users and provide
corresponding after-sales services.  The
standards that the Dealer shall follow in the performance of its obligations
hereunder shall be the FAW-VW Authorized Dealer Management Manual, the FAW-VW
Audi Brand CI/CD Manual, and the FAW-VW Audi After-sales Service Management
Manual, as amended from time to time.

 

2.                                      The Dealer shall
perform all of its obligations hereunder in accordance with this Agreement to
seek all the market opportunities for Audi brand in the Territory and promote
the image and reputation of FAW-Volkswagen Automobile Co., Ltd., the
Supplier and the Contracted Products in all aspects to optimize the
competitiveness of Audi brand in the Territory.

 

3

 

3.                                      The Dealer
shall obtain the prior written consent of the Supplier with respect to any
amendment to this Agreement or any other relevant business standards applicable
to the Dealer.

 

Chapter II                                     Obligations and Legal Status of the Dealer

 

Article 3                                               Principles of Performance

 

1.                                      The Dealer
shall be responsible for promoting and developing the market potential of the
Contracted Products, providing pre-sale, mid-sale and after-sale services
better than any competitor and maintaining an inventory of the parts at a level
consistent with the demand in the Territory.

 

2.                                      The Dealer
shall assume all of its obligations hereunder as an independent contractor and
shall not have any right to act on behalf of the Supplier.

 

3.                                      Within the term
of this Agreement, the Dealer shall ensure that it has sufficient working
capital necessary for the conduct of its own business activities and that it
maintains a good financial status within its operating term.

 

4.                                      Without prior
written consent from the Supplier, the Dealer may not deal in any brand other
than the Contracted Products.

 

5.                                      The Dealer
shall conduct its business in compliance with the standards for the sales,
after-sales services and marketing of FAW-VW Audi brand, in particular, FAW-VW
Audi Authorized Dealer Operating Standard-Sales, FAW-VW Audi Authorized Dealer
Operating Standard-Services, FAW-VW Audi Authorized Dealer Operating Standard-Marketing,
and accept the on-site review by the Supplier.

 

6.                                      The Dealer
shall conduct business activities provided hereunder independently from any
other business of its own and shall reach agreement with the Supplier on the
required isolation measures.

 

7.                                      Without written
authorization of the Supplier, the Dealer may not outside the Territory,
conduct any promotion or after-sales services of any Contracted Products or
establish any branch service facilities.

 

8.                                      The Dealer may
not sell any Contracted Product to any retailer other than the Selling
Agencies.  This restriction shall not
apply to the sales of genuine parts for repair purpose.

 

9.                                      The Dealer
shall have the right to select separate sales services networks for specific
models of imported Audi cars.  The Dealer
shall deal in imported models of cars designated by the Supplier subject to the
Audi XXX Imported Car Business Standard executed by the parties hereto.

 

10.                               The Dealer
shall conduct its business in compliance with the FAW-VW Environmental Policy
and Audi Authorized Dealer Environmental Protection Provisions.

 

Article 4                                               Territory

 

1.                                      The Dealer
shall sell the Contracted Products and provide the services specified herein to
the end users within the Territory.

 

4

 

2.                                      The Dealer
shall have the right to sell the Contracted Products in the Territory and may
not conduct any advertisement or promotion outside the Territory without
written authorization from the Supplier.

 

3.                                      The Supplier
shall have the right to change the Territory, or designate new dealer(s) in
the Territory, with a view to improving the competitiveness of the Contracted
Products and satisfying the market demand for repair and maintenance.

 

Article 5                                               Infrastructure Construction

 

1.                                      In order to
maintain and improve the good image and reputation of both the Supplier and the
Contracted Products, the Dealer shall construct its own infrastructure with a
view to satisfying the most basic requirements of Audi brand for scale,
equipment and exterior appearance both technically and commercially and the
minimum requirements of the Supplier’s changing marketing principles.

 

2.                                      The Dealer
shall seek and take into its consideration of, the Supplier’s opinions on the
design of the buildings and office facilities of the Dealer.  In response to the increase in its business
volume or any other change, the Dealer shall make corresponding adjustments to
its business and facilities as required by the Supplier.  Where there is any material change to the
business of the Dealer or the Dealer intends to make any investment not in its
ordinary course of business, which may have a direct or indirect effect on any
business activities contemplated hereunder, the Dealer shall obtain written
consent from the Supplier.

 

3.                                      In the event
that the Dealer fails for any reason to conduct the construction of any
facilities as required by the Supplier, it shall make a written request to the
Supplier so that the Supplier can make appropriate construction arrangements.

 

Article 6                                               Sales Target and Car Delivery

 

1.                                      In order to
achieve their joint sales target, the Supplier and the Dealer shall reach
agreement on all the targets set forth in the Annual Business Plan, subject to
any adjustments in response to any changes to the auto market in the PRC.

 

2.                                      The Supplier
shall provide the Dealer with a car supply plan based on its own supply
capacity and market development.  The
Dealer shall place orders to the Supplier in compliance with the ordering
procedures formulated by the Supplier. 
Any order confirmed by the Supplier shall be legally binding upon the
Dealer; provided however that, the Dealer shall have the right to change such
order before it is confirmed by the Supplier. 
In case the Supplier encounters any difficulty beyond its capacity in
the delivery of any cars, the Supplier shall have the right to deliver the cars
to the Dealer on a pro rata basis based on the quantity under all the orders
from multiple dealers.

 

3.                                      Without prior
written consent from the Supplier, the Dealer may not change any Contracted
Products on its order.

 

Article 7                                               Used Cars

 

[Intentionally
omitted.]

 

5

 

Article 8                                               Cars for Stock, Cars for Display, Cars for
Test Ride and Test Drive, Cars for Replacement during Services, and Cars for
Services

 

1.                                      The Dealer
shall keep in stock certain new cars among the current supply plan in
accordance with the Audi Product Series Code Reference Schedule.

 

2.                                      The Dealer
shall have a standard exhibition hall and keep an appropriate number of cars
for display, which cars shall be registered in the books of the Dealer.

 

3.                                      The Dealer
shall ensure that inside its exhibition hall there shall be at least one car
for each model authorized to it.

 

4.                                      The quantity
and models of the cars for stock and the cars for display shall be determined
on the basis of the annual sales target for a particular calendar year.

 

5.                                      The Dealer
shall prepare cars for test ride and test drive, cars for replacement during
services and cars for services in accordance with the relevant management
requirements of the Supplier.

 

Article 9                                               After-sales Services

 

1.                                      The Dealer
shall provide quality services for the Contracted Products to the full
satisfaction of the customers.  To such
end, the Dealer shall possess and use special tools, workshop facilities and
equipment and technical and management documentation in accordance with the
applicable requirements of FAW-VW.   The
Dealer shall hire qualified personnel to perform the work contemplated
hereunder in accordance with the requirements of the Supplier as further set
forth in the FAW-VW Audi After-sales Management Manual.

 

2.                                      The Dealer
shall strictly adhere to and remind the customers of the principle that Audi
genuine parts should be used in the repair and maintenance of the Contracted
Products.

 

3.                                      The Dealer
shall perform its obligations for information feedback strictly in accordance
with the FAW-VW Audi After-sales Management Manual.

 

Article 10                                        Product Warranty

 

1.                                      The Dealer
shall incorporate the warranty provisions of the Supplier as set forth in the
FAW-VW Audi After-sales Management Manual into the sales contract for the
Contracted Products, and shall provide warranty services duly claimed.  The Dealer shall promptly notify the Supplier
of any claims for which legal proceedings are pending or threatened.

 

2.                                      All the
warranty services shall be performed by using the genuine parts from the
Supplier and at the expense of the Supplier. 
The labor fees and material fees for the warranty service shall be
calculated in accordance with the FAW-VW Audi After-sales Management Manual, as
amended from time to time.

 

3.                                      The Dealer
shall deal with all the claims in accordance with the FAW-VW Audi After-sales
Management Manual issued by the Supplier.

 

4.                                      Provisions in
Items 2 and 3 shall also apply to the work in connection with the Supplier’s
product recall from customers.

 

6

 

Article 11                                        Parts

 

1.                                      The Dealer
shall only use the genuine parts purchased from the Supplier in the provision
of after-sales services for the Contracted Products.

 

2.                                      In order to
ensure the Dealer has the capacity to provide parts to the end user, the Dealer
shall with the assistance from the Supplier, establish and use an appropriate
parts stock control system and shall always maintain an appropriate stock of
parts for after-sales services.

 

3.                                      The Dealer
shall comply with the nationwide uniform price limit set by the Supplier.  In case of any breach of this provision by
the Dealer, the Supplier shall have the right to take corresponding measures
until effective remedial measures have been taken by the Dealer.  In such case, the Dealer shall indemnify the
Supplier against any and all the economic losses caused thereby.

 

4.                                      Upon being
aware of any misappropriation of the name or any registered trademark of the
Supplier or any non-genuine parts on the market, the Dealer shall be obligated
to notify the Supplier of the same and assist the Supplier to collect
information, materials and exhibits relating thereto.

 

5.                                      The Dealer
shall keep the prices of the parts, electronic catalogues, training materials
and any other similar information provided by the Supplier in confidence.

 

6.                                      The Dealer’s
employees performing the after-sales services shall have the qualifications and
competence required by the Supplier to ensure the quality of the after-sales
services, as further set forth in the FAW-VW Audi After-sales Management
Manual.

 

7.                                      In order to
ensure the successful implementation of the provisions in Items 1-6 above, the
Dealer shall perform the said provisions strictly in accordance with the
relevant requirements of the Supplier.

 

Article 12                                        Audi Lifestyle Articles

 

[Intentionally
omitted.]

 

 Article 13                                     Promotion

 

1.                                      The Dealer
shall conduct effective promotion activities in the Territory in accordance
with the principles of promotion approved by the Supplier.

 

2.                                      The Dealer
shall prepare an annual budget for the advertisements in the Territory within
the framework of the sales target specified in Article 6 herein above.

 

3.                                      In addition to
any promotions conducted by the Supplier, the Dealer shall prepare and
implement any other promotion programs for the Contracted Products based on the
development of sales.

 

4.                                      The Dealer
shall conduct advertisements for the Contracted Products as recommended by the
Supplier and shall select on a priority basis any advertisements provided by
the Supplier.  The Dealer may not conduct
any advertisement that may conflict with the position 

 

7

 

of
the Supplier established among the public or damage the image of the Supplier
or any Selling Agency.

 

Article 14                                        Logos and Trademarks

 

1.                                      For the
maintenance of the consistency and continuousness of the signs, within the term
of this Agreement, the Dealer is authorized and has the right to use the
protected trademarks as set forth in the FAW-VW Audi Brand CI/CD Manual.  Such trademarks shall be displayed on the
buildings or structures and standard letterhead of the Dealer in a form approved
by the Supplier.  Unless approved by the
Supplier, the Dealer may not use any protected trademark or logo in combination
with its own logo or name on any other products, packages or advertisement
literatures.

 

2.                                      Unless
otherwise approved in writing by the Supplier, the Dealer may not use any
trademark set forth in the FAW-VW Audi Brand CI/CD Manual as an element of its
corporate logo.

 

3.                                      The Dealer
shall conduct the sales and services under the names and logos provided by the
Supplier.

 

4.                                      The Dealer may
not register any logo or name to which the Supplier has the ownership or use
right.  This provision shall also apply
to any figurative mark, audio or video materials or any other logo to which the
Supplier has the ownership or use right.

 

5.                                      Immediately
upon being aware of any unauthorized use of any protected trademark or logo in
the Territory, the Dealer shall notify the Supplier of the same.

 

Article 15                                        Information and Reports

 

1.                                      In order to
enable the Supplier to conduct market research and win in the competition, the
Dealer shall to the extent permitted by law, provide to the Supplier or any
third party designated by it the effective data of customers.  To such end, the Dealer shall use the
prescribed information system.

 

2.                                      The Supplier
shall have the right to request the Dealer to submit reports, in particular,
relating to market conditions, statistics of sales and services, inventory
lists and projections of the market demand in the Territory.

 

3.                                      The Dealer
shall provide the Supplier with the necessary information about its operating
status relating to the subject matters hereof. 
On normal business days, subject to a notice of the purpose of the
visit, authorized representatives of the Dealer may enter the premises and
warehouses and review the relevant documents and accounts of the Dealer in
order to understand the current operating status of the Dealer.  Such representatives may make copies of such
materials as reviewed, including electronic data.

 

4.                                      Upon request of
the Supplier, the Dealer shall provide to the Supplier on a monthly basis, its
own balance sheets and statements of income, reports of financial status and
costs, and account books and invoices for the Supplier’s inspection.  The Supplier shall keep all the information
under this Item in confidence.

 

8

 

5.                                      The Dealer
shall as guided by the Supplier, equip itself with communication means,
organization and technical conditions necessary for the information exchange
between the Dealer and the Supplier.

 

6.                                      The Dealer
shall use the financial information system recommended by the Supplier and
ensure the compatibility of such system with the system used by the Supplier.

 

7.                                      The Dealer
shall use the DS-CRM system recommended by the Supplier in its customer
relationship management.  In connection
therewith, the Dealer shall purchase the software and hardware designated by
the Supplier and receive relevant training. 
The Dealer shall upload its customer data to the FAW-VW CRM Center.

 

Article 16                                        Changes to Shareholding

 

In
case the Dealer intends to make any changes to its shareholding, the Dealer
shall notify the Supplier thereof in writing. 
The Dealer may not conduct such change unless and until it receives the
consent from the Supplier.

 

Chapter III                                Rights and
Obligations of the Supplier

 

Article 17                                        Recommendations and Support

 

The
Supplier shall provide the Dealer with advice and assistance and to the extent
necessary, paid-services.

 

Article 18                                        Pricing

 

1.                                      The Supplier
shall sell the Contracted Products to the Dealer at the prices on the Audi
Equipment and Price List as amended from to time.

 

2.                                      The Dealer
shall sell the Contracted Products at the prices set by the Supplier.

 

3.                                      The Supplier
shall have the right to adjust the price of any Contracted Product in response
to any change to itself or the market demand. 
In case of such adjustment, the Supplier shall notify the Dealer thereof
in writing.  Such price adjustment shall
become effective as of the date specified in the notice by the Supplier.

 

4.                                      In case the
Dealer has any objection to any price adjustment by the Supplier, it shall
submit such objection to the Supplier in writing.  In the event that the Supplier and the Dealer
fail to reach agreement on such price adjustment, either party hereto may
terminate this Agreement in accordance with Chapter IV Term and Termination.

 

5.                                      In case the
Dealer places any order to the Supplier and accepts any Contracted Products
despite the fact that the Dealer has any objection to any price adjustment by the
Supplier and submits the same to the Supplier in writing but the Supplier does
not accept such objection, it shall be deemed that the Dealer agrees to such
price adjustment.

 

Article 19                                        Payment of Warranty Fees and Expenses

 

The
Supplier shall pay the Dealer any expenses incurred by the Dealer in connection
with warranty subject to the conditions set forth in the FAW-VW Audi
After-sales Service Management Manual.

 

9

 

Article 20                                        Direct Sales

 

For
the purpose of market development, the Supplier shall reserve the right to do
direct sales to those target customers set forth in Exhibit [·] hereto, and in principle the Dealer shall forward
the Supplier any inquiry about or order for direct sales.

 

Chapter IV                                 Term and
Termination

 

Article 21                                        Term

 

This
Agreement shall take effect upon being signed and chopped by both parties, and
shall remain effective for a term of [·]years.

 

Article 22                                        Normal Termination

 

Either
party hereto may terminate this Agreement by written notice to the other party
six months in advance.

 

Article 23                                        Immediate Termination

 

The
Supplier shall have the right, without prior notice, to terminate this
Agreement with immediate effect by written notice to the Dealer, in case:

 

1.                                      the Dealer
fails to obtain or is deprived of any governmental consent required for the
conduct of its business activities contemplated hereunder;

 

2.                                      the business
reputation or financial conditions of the Dealer suffer material damage,
including declaration of bankruptcy, asset restructuring, any mortgage on any
its assets, bankruptcy of its partner, or failure to have any of its checks or
commercial bills discounted;

 

3.                                      the Dealer
suffers a distress in staffing, organization or financial conditions that can
not be addressed for a certain period of time, which has a material adverse
effect on the performance of any key provisions hereof;

 

4.                                      the Dealer and
its management has refused to permit the Supplier or its authorized
representatives to review the documents or enter the premises of the Dealer;

 

5.                                      the Dealer has
been always continuously failing to perform its obligations to make payment
hereunder despite the reminders from the Supplier;

 

6.                                      the Dealer has
always failed to achieve its sales target or market share target despite
continuous reminders from the Supplier, unless such failure is caused by the
general market conditions or by any other reason that is beyond the reasonable
control of the Dealer;

 

7.                                      the Dealer
sells on a wholesale-basis, any Contracted Products to any retailer other than
the Selling Agencies in violation of this Agreement;

 

8.                                      the Dealer
takes any act or measure without obtaining the prior written consent from the
Supplier as expressly required herein;

 

9.                                      the Dealer is
ranked among last ten for two consecutive years in any customer satisfaction
survey conducted by any agency engaged by the Supplier;

 

10

 

10.                               the Dealer is
ranked among last three among all the Audi dealers in the PRC in terms of its
performance of its annual sales plan for two or more models as set forth in the
Business Plan within one year or for any model more than twice within two
years;

 

11.                               the Dealer
relocates its site or expand its exhibition hall without the approval from the
Supplier and in material violation of CI/CD standards; or the Dealer fails to
reconstruct its exhibition hall in accordance with the construction
requirements as set forth in FAW-VW Audi New Standard Exhibition Hall;

 

12.                               the Dealer
fails to perform any provision herein or commits any material violation in the
conduct of warranty-claim related business or after-sales services;

 

13.                               the Dealer
resells its operating right hereunder as an authorized Audi dealer without
prior written consent from the Supplier; or

 

14.                               the Dealer is
found to fail to achieve the required standard in three consecutive FAW-VW Audi
Authorized Dealer Management Program Inspection conducted by the Supplier.

 

Article 24                                        Certificate

 

The
Certificate of Audi Authorized Dealer shall terminate simultaneously with the
termination of this Agreement.

 

Article 25                                        Procedures of the Termination of the Agreement

 

1.                                      Within six
months prior to any termination of this Agreement, the Supplier shall have the
right to take necessary actions in its territories to ensure the smooth supply
of the Contracted Products and the smooth provision of post-termination
after-sales services.

 

2.                                      Upon any
termination of this Agreement, the Dealer shall immediately:

 

A.                                    cease the use
of any trademark of the Supplier or any mark that is capable of confusion,
remove any logo or symbol of the Supplier, or otherwise the Supplier shall have
the right to do such removal at the expense of the Dealer.

 

B.                                    upon request of
the Supplier, transfer any unfulfilled order to the Supplier or any third party
designated by it, and provide for free, to the Supplier or any third party
designated by it, documents necessary for the fulfillment of such orders or the
provision of customer services.

 

C.                                    upon request of
the Supplier, at its own expense and risk, deliver to the Supplier or any third
party designated it, all the Contracted Products that are (i) directly
from the Supplier, (ii) brand new or still inside the original package,
never used, not damaged, and delivered to the Dealer within 12 months as from
such termination, (iii) not sold out but stored at the Dealer, without any
mortgage by the Dealer or the Supplier. 
The Supplier shall repurchase such Contracted Product at a price that is
equal to the net purchase price paid by the Dealer less a 10% depreciation and
management expenses.

 

D.                                    upon request of
the Supplier, return to the Supplier all the relevant information systems,
documents, in particular, the equipment and special tools, technical management
materials and advertisement literatures, logos, all at the expense 

 

11

 

and
risk of the Dealer; provided however that the Supplier shall pay the Dealer at
the price effective at the time of repossession in case any such items are
purchased by the Dealer as evidenced by relevant invoices.

 

3.                                      Upon any
termination of this Agreement, the Supplier shall have the right to cancel all
or any portion of any orders that have not been fulfilled by then.  In such case, the Dealer may not have any
claim against the Supplier for any consequences arising therefrom.  Item 2.B above shall not be prejudiced by
this paragraph.

 

4.                                      Except for any
claim otherwise mandatorily required by law or permitted hereby, the Dealer
shall not have the right to make any claim against the Supplier in relating to
the termination of this Agreement.

 

Chapter V                                      General Provisions

 

Article 26                                        Amendment and Entire Agreement

 

[Intentionally
omitted]

 

Article 27                                        Assignment

 

1.                                      Without written
consent from the Supplier, the Dealer may not assign any of its rights and
obligations hereunder to any person.

 

2.                                      In case the
agreement between the manufacturer of the Contracted Products and the Supplier
is terminated or amended, the manufacturer or any third party designated by it
shall have the right to perform this Agreement on behalf of the Supplier and
the Dealer hereby accepts such performance.

 

Article 28                                        Severability

 

[Intentionally
omitted]

 

Article 29                                        No Waiver

 

[Intentionally
omitted]

 

Article 30                                        Responsibilities

 

The
parties hereto shall be solely responsible for any commercial risks that may
arise from this Agreement or the performance of this Agreement.

 

Article 31                                        Jurisdiction

 

Any
dispute arising hereunder shall be submitted to the exclusive jurisdiction of a
court located in the jurisdiction in which the Supplier is incorporated.

 

In
case of any discrepancy between the Chinese version and the English version of
this Agreement, the Chinese version shall prevail.

 

12

 

Accepted
for and on behalf of:

 

 

	
  FAW-Volkswagen
  Sales Co., Ltd.

  	
   

  	
  [Dealer]
  (company seal)

  
	
  (company
  seal)

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Signed by:

  	
   

  	
   

  	
  Signed
  by:

  	
   

  
	
   

  	
   

  	
   

  	
  Legal
  representative

  
					

 

13

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