Common use of Capacity Reservation Clause in Contracts

Capacity Reservation. 6.1 Geely Party shall introduce necessary general and special equipment on time according to the plan from development to production of the three Lotus models. When the production capacity cannot meet the sales demand, Geely Party shall promptly expand the plant and equipment to ensure the delivery quantity and quality (however, if the delivery quantity and quality are not met due to reasons other than Geely Party, Geely Party shall not be liable therefor). When the original planned production capacity cannot meet the sales demand, Lotus Party and Geely Party should jointly evaluate and confirm whether to expand the plant and equipment, and the resulting production costs that need to be borne by Lotus should be paid to Geely on a lump-sum basis, and the costs of other assets (land, plant, equipment and other supporting facilities) should be amortized to the cost of each vehicle under the principle of dedicated use and shared use. 6.2 Lotus shall have the priority to use the spare capacity of Geely’s factory.