Common use of Cooperation Project Clause in Contracts

Cooperation Project. 1.1 The Parties agree to cooperate with each other to carry out manufacturing of new energy vehicles. To the extent of the plant production capacity specified herein, NIO will license JAC to use its trademarks and related technologies for the purpose of manufacturing the agreed model of new energy vehicles (with the specific specifications, parameters and option requirements to be provided by NIO) (the “Cooperation Model”), and JAC will complete the construction of the new energy vehicle manufacturing plant (the “Plant”) for the purpose of manufacturing the Cooperation Model (the “Cooperation” or the “Cooperation Project”). 1.2 The Parties agree that, based on the requirements under NIO’s product, technique and quality standards, JAC will invest in a brand-new, high-quality new energy vehicle manufacturing plant with world-class technique (including manufacturing technique for all-aluminum bodies) and a planned production capacity of 100,000 vehicles (two shifts). The Plant shall be suitable for the positioning of the high-end new energy vehicle products of NIO. 1.3 Further, the Parties agree that JAC will be solely responsible for the fund raising and construction mode involved in the construction of the Plant, and JAC shall use its best efforts to procure compliance with the construction schedule set forth in Article 3. 1.4 The Parties agree that NIO shall pay manufacturing and processing fee (excluding value-added tax, exercise tax, main materials of paint (finishing coat, clear coat, floating coat, base coat, electrophoretic materials, pretreatment materials and curing agent), all parts and components and auxiliary materials constituting the vehicle (except for the auxiliary materials involved in the manufacturing process), special adhesives for bodies, rivet and outsourcing costs of outsourced parts) to JAC at the rate of ****** per vehicle on a monthly basis for a period of three years. 1.5 The start of production (the “SOP Date”) under the Cooperation Project shall occur no later than six months after the equipment installation and commissioning has passed inspection. Considering that the JAC Plant may suffer loss due to low sales volume for the first three years from the SOP Date, NIO agrees to fully compensate the loss suffered by the Plant each year (each 12 consecutive months from the SOP Date). The amount of compensation shall be determined based on the loss of the Plant (excluding value-added tax and exercise tax) as audited by the accounting firm engaged by JAC to audit its annual report, and the result of such audit shall be subject to the joint confirmation of the Parties. If the amount of compensation determined by a Party is materially different from the audit result (a difference of more than RMB5 million from the audited amount of compensation of a year shall be considered as a material difference), or such audit firm makes any major mistake or violates laws and regulations of the PRC in such audit, either Party to this Agreement shall have the right to request the engagement of a third-party audit firm jointly recognized by the Parties to conduct the audit. Confidential treatment has been requested for redacted portions of this exhibit. This copy omits the information subject to the confidentiality request. Omissions are designated as ******. A complete version of this exhibit has been provided separately to the Securities and Exchange Commission. ****** JAC shall verify the operating profit/loss based on the status of manufacturing on a quarterly basis, and promptly provide such information to NIO. The above plan shall be valid for 36 months from the SOP Date, and the calculation standard applicable after such 36-month period will be separately negotiated by the Parties based on actual operations. 1.6 The Parties agree that they will explore the possibility of other platform-based or capital-based cooperation on the basis of the Cooperation Project and try new initiatives in terms of the business type in this industry. 1.7 The Parties agree that, subject to the satisfaction of the requirements on product quality and production capacity proposed by NIO and jointly confirmed by the Parties, based on a planned production capacity of 100,000 vehicles of the new energy vehicle manufacturing plant, NIO shall undertake to prefer the Plant in its introduction of subsequent vehicle models to guarantee the normal operation of the Plant.