Cooperation Framework Agreement entered into by ZEEKR Automobile (Ningbo Hangzhou Bay New Zone) Co., Ltd. and Ningbo Hangzhou Bay Geely Auto Parts Co., Ltd. and Zhejiang Geely Automobile Co., Ltd. and Zhejiang ZEEKR Intelligent Technology Co., Ltd.
Exhibit 10.7
Certain confidential portions of this exhibit were omitted by means of marking such portions with brackets and asterisks because the identified confidential portions (i) are not material and (ii) would be competitively harmful if publicly disclosed, or constituted personally identifiable information that is not material.
Cooperation Framework Agreement
entered into by
ZEEKR Automobile (Ningbo Hangzhou Bay New Zone) Co., Ltd.
and
Ningbo Hangzhou Bay Geely Auto Parts Co., Ltd.
and
Zhejiang Geely Automobile Co., Ltd.
and
Zhejiang ZEEKR Intelligent Technology Co., Ltd.
Project name: [***]
Contract No.: [***]
Signed on: September 19, 2021
Cooperation Framework Agreement
This Cooperation Framework Agreement (hereinafter referred to as "this Agreement") was entered into by the following Parties on September 19, 2021:
Party A: ZEEKR Automobile (Ningbo Hangzhou Bay New Zone) Co., Ltd.
Party B: Ningbo Hangzhou Bay Geely Auto Parts Co., Ltd.
Party C: Zhejiang Geely Automobile Co., Ltd.
Party D: Zhejiang ZEEKR Intelligent Technology Co., Ltd.
Party A, Party B, Party C and Party D may be referred to individually as "a Party" or "any Party" and collectively as the "Parties".
Through friendly negotiation, the Parties hereby enter into the following Agreement on the development and production of [***] project for mutual compliance.
1 Cooperation Principles
1.1 The Parties adhere to the principles of openness, transparency and sharing, and fully trust each other and share resources.
1.2 In the process of project development, the control, verification and acceptance of each node shall be given priority to Party A.
1.3 During the production of the project, quality control shall be carried out in accordance with Party B's quality assurance system approved by Party A.
2 Cooperation Scope
2.1 The Parties shall jointly develop and manufacture new-energy pure electric vehicles based on [***] models. The project code is [***] (hereinafter referred to as the "Cooperative Vehicle Models"), and the Cooperative Vehicle Models use the brand of "ZEEKR". The Road Motor Vehicle Manufacturer and Product Announcement corresponding to the Cooperative Vehicle Models (hereinafter referred to as the "Product Announcement") will be registered under Party C's name.
2.2 For the aforementioned purpose, Party A and/or affiliated parties will entrust Party B to produce the Cooperative Vehicle Models; Party C will inspect and process the Cooperative Vehicle Models and go through the necessary formalities such as the Motor Vehicle Certificate (hereinafter referred to as the "Certificate"), and then sell the vehicle products to Party D; Party D will act as the exclusive general distributor of the Cooperative Vehicle Models. See Appendix 3 for the division of labor and transaction path of the Parties.
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3 Rights and Obligations of the Parties
3.1 Party A is responsible for the project development tasks, objectives, costs, development progress and R&D quality control, while Party C is responsible for coordination and handling the necessary formalities such as product announcement, 3C certification and environmental protection announcement declaration of the Cooperative Vehicle Models, and providing necessary technical data and related documents. If on-site audit or inspection is required by relevant laws and regulations or government authorities, Party B shall cooperate according to the requirements of government authorities, Party A and Party C (including but not limited to cooperating with on-site work and providing documents and materials).
3.2 Party A are responsible for supply chain management such as direct material supplier selection, pricing and point setting, business negotiation, supplier management, purchase order placement, supplier capacity and supply timeliness guarantee. Party B will timely accept the materials delivered by the supplier according to the acceptance standards and requirements recognized by Party A (including but not limited to package confirmation, visual inspection, quantity check, model check, and quality problems), and properly keep and settle the material price. If it is necessary to pay the supplier in advance due to material shortage and other reasons, Party A shall pay the corresponding material price to Party B in advance, which may be deducted from the vehicle kit payment payable by Party A to Party B.
3.3 Party B shall be solely responsible for the production and manufacturing of the Cooperative Vehicle Models, including material management, production process development, inspection, etc., and shall be responsible for product quality problems of the Cooperative Vehicle Models caused by Party B; any loss caused by Party A shall be borne by Party A. Party B shall formulate the inspection documents of the Cooperative Vehicle Models according to the acceptance standards confirmed separately with Party A, and carry out the process inspection and ex-factory inspection of the Cooperative Vehicle Models accordingly. Party A have the right to inspect the Cooperative Vehicle Models prior to delivery, and also have the right to conduct random inspection upon delivery by Party B.
3.4 Party B will coordinate Party C to handle the Certificate, conformity certificate, 3C labeling, printing and information uploading of the environmental protection on-board list of the Cooperative Vehicle Models. According to the corresponding data provided by Party A and/or Party D , Party C is responsible for the information input of various platforms, including but not limited to the new energy vehicle monitoring platform and battery traceability system, and Party B is responsible for timely and accurately providing all other information (including but not limited to vehicle production, warehousing, invoicing and other information) required to complete the above work, and is held accountable for the authenticity, accuracy and completeness of such information.
3.5 The Parties hereby confirm that although the product announcement is registered in the name of Party C, such new energy points, carbon emission points (if applicable), subsidies and allowances of the central and/or local governments for new energy vehicles (including but not limited to car purchase subsidies, energy saving and emission reduction subsidies, and the rights and interests under various support/reward policies issued by the state or local governments) as are related to the Cooperative Vehicle Models are owned by Party A and/or Party D. Party B and Party C do not enjoy any rights and interests in question, and shall take necessary actions (for example, selling such rights and interests to a third party) according to the instructions of Party A and/or Party D, and the taxes and fees arising from such necessary actions shall be borne by Party A and/or Party D. For the sake of clarity, under the same conditions, Party A and/or Party D shall give priority to selling the new energy points to Party B and/or affiliated parties of the Group.
3.6 The Parties concerned shall conduct subsequent negotiation and enter into separate agreement for the quality assurance, after-sales service and claims of the Cooperative Vehicle Models and delivered vehicles.
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4 Factory Construction and SOP Preparation
4.1 Party B is a brand-new, high-quality automobile production base with first-class manufacturing level and management level, which may meet Party A's quality requirements and capacity requirements.
4.2 The Parties hereby confirm that Party B's factory (including but not limited to factory building, production line, investment of facilities and equipment such as logistics and warehousing in the factory) will be built at Party B's own funds.
4.3 The Parties hereby confirm that the costs related to the trial and testing of the Cooperative Vehicle Models (hereinafter referred to as the "Production Costs") shall be borne by Party A. Upon the execution of this Agreement, Party A and Party B shall jointly calculate the Production Costs incurred for the Cooperative Vehicle Models, and negotiate and determine the subsequent settlements.
The Production Costs refer to the costs of direct materials, energy consumption, material consumption, and low value and consumption goods related to testing cars, exhibiting cars and testing parts during the trial production stage of the Cooperative Vehicle Models, and also include the wages (including welfare, social insurances and housing provident fund) of workers prior to FSR, training fees of substitute workers, and expert support fees. Based on the New Accounting Standards for Business Enterprises (CK (2006) No. 18), Party B is not included in the "scope of management expenses-start-up expenses", but listed in the subject of "R&D expenditures-capitalized expenditures".
5 Production Capacity Schedule
5.1 Every year, Party A shall submit to Party B the rolling production capacity schedule of "1+3" years from the next year according to the rules for submitting production capacity schedule formulated by Party B. Party B shall try its best to meet Party A's production capacity requirements.
For the sake of clarity, the annual scheduled capacity mentioned herein shall be subject to the amount upon the last adjustment according to rolling update (if any).
If the total scheduled production capacity received by Party B from each brand company is beyond Party B's production capacity, Party B shall negotiate with each brand company on the adjustment of scheduled production capacity according to the specific situation, and implement the adjusted scheduled production capacity upon the final resolution made by the manufacturing committee.
5.2 If Party A plans to further increase the supply quantity of the Cooperative Vehicle Models beyond the annual scheduled production capacity, specific matters shall be separately negotiated with Party B.
6 Accounting and Payment of Factory Price
6.1 The Parties hereby confirm that the factory price of the finished vehicle kit in 2021 shall be calculated according to the following formula:
Factory price=BOM costs +[***]
Note: The formula is derived by referring to the same type of foundry services of comparable companies in the market or full cost plus rate of the third parties.
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Of which:
BOM cost refers to the total cost of materials purchased by Party B and approved by Party A. The specific details shall be separately determined by Party A and Party B;
Refer to Appendix 1 for details
In case of inconsistency between this agreement and other agreements regarding the factory price of the finished vehicle kit in 2021, this agreement shall prevail.
6.2 Party A and Party B shall settle on a monthly basis. Party A shall pay the corresponding amount to the bank account designated by Party B within 60 days after the Parties have completed the settlement confirmation at the end of the month and received the special VAT invoice issued by Party B.
7 Confidentiality Agreement
7.1 During and after the term of this Agreement, without the written permission of other parties, any Party shall not divulge or disclose the confidential information to a third party, unless the information is available through public channels.
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7.2 Any Party (including its employees) has the obligation to keep confidential this Agreement and all business policy, rules, operation manuals, customer information, and product information.
| 8 | Liability for Breach of this Agreement |
| 8.1 | This Agreement is a clear expression of the true will of the Parties. During the performance of this Agreement, if any Party fails to strictly implement or fulfill the corresponding responsibilities and obligations in accordance with this Agreement, such Party will be deemed to have breached the Agreement, and shall bear the corresponding liability for the breach. In addition to compensating the observant Party for its actual losses, the defaulting Party shall also bear all expenses paid by the observant Party to obtain such compensation, including but not limited to legal fees, attorney fees, and travel expenses. |
If any other third party suffers any losses and disputes due to any Party's violation of this Agreement, and the result of the settlement of such disputes finally leads to the observant Party taking any responsibilities, the breaching Party shall fully compensate the observant Party for the losses thus incurred.
| 8.2 | If this Agreement is terminated in advance caused by Party A, that is, the production of the Cooperative Vehicle Models in Party B is stopped prior to the expiration of this Agreement, Party A shall compensate Party B for the reasonable and direct losses caused thereby in lump sum. For the purpose of clarity, Party B's reasonable direct losses are limited to those directly related to the Cooperative Vehicle Models, including but not limited to the depreciation and amortization of fixed assets (calculated at annual scheduled production capacity), material inventory, semi-finished products of the Cooperative Vehicle Models produced online, vehicles not yet delivered, and employee severance costs that have not yet been borne by Party B during the remaining term of this Agreement. |
9 Special Clauses of Good Faith and Self-discipline
| 9.1 | The Parties promise to strictly abide by the following agreements during business dealings: |
| (1) | Any Party shall not transfer all kinds of property and non-property interests or benefits to the other Parties' (including its shareholding, holding, actually controlled or other related units, the same below) personnel (including their relatives or other stakeholders, the same below) in any name; |
| (2) | Any Party shall not engage in operating activities with the other Parties' personnel, and those who are related to each other shall voluntarily withdraw. Within 2 years upon the termination of cooperation, any Party shall not employ the personnel of the other Parties or accept the service provided by the personnel of the other Parties without the consent of the other Parties. |
| 9.2 | In case of any breach of the foregoing provisions, the Breaching Party shall pay liquidated damages to the Observant Party at the rate of 30% of the contract amount (calculated according to the actual amount incurred in the case of a contract with a non-fixed amount, the same below). If the contract amount cannot be determined, the Breaching Party shall pay a liquidated damages of RMB300,000 to the Observant Party. If the case constitutes a crime, it shall be submitted to the judicial organ for investigation of criminal responsibility. |
| 9.3 | If any Party finds that any member of any other Party violates the aforementioned clauses of good faith and self-discipline, the Party shall report to the compliance department or judicial organ of the other Party. |
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| 9.4 | The change, transfer, termination, cancellation or invalidity of this Agreement shall not affect the validity of the aforementioned clauses of good faith and self-discipline. |
| 10 | Termination and Rescission of this Agreement |
| 10.1 | The Parties shall terminate this Agreement in writing without any liability in case of any of the following: |
(1) A Party is unable to pay its debts or goes into liquidation, or suffers any other event similar to that provided by law;
(2) A Party changes its control or disposes of all or any of its important businesses or assets (except legal organizational adjustment), and such disposal seriously affects the Party's ability to perform this Agreement.
10.2 The Parties may terminate this Agreement by consensus.
10.3 If a Party delays the performance of this Agreement and fails to perform it after being urged by the observant Party, the observant Party may unilaterally terminate this Agreement.
10.4 In addition to the abovementioned circumstances, if this Agreement is terminated or rescinded for any other reason, the Parties shall negotiate in good faith any matters not listed hereinabove or matters that shall be further discussed.
| 11 | Dispute Resolution |
This Agreement shall be governed by the laws of the People’s Republic of China. Any dispute arising from the performance of this Agreement shall be settled by the Parties through negotiation. If no agreement can be reached through negotiation, any Party may file a lawsuit with the people's court where Party B is located.
| 12 | Others |
12.1 This Agreement shall take effect upon being signed and sealed by the authorized representatives of the Parties, and shall be terminated according to the relevant termination terms of this Agreement. Articles 7-12 hereof will survive the termination of this Agreement and the rights and obligations arising prior to such termination will not affected.
12.2 In case of any matters not covered herein, Side Agreements on clauses to be supplemented may be signed through negotiation by the Parties, which will be annexed to this Agreement. The Appendixes hereto have the same effect as this Agreement.
12.3 This Agreement is made in octuplicate, with each Party holding two copies, all of which have the same legal effect.
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[Signature page]
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Appendix 1
Explanation of the full cost range of the foundry
[***]
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Appendix 2
Division of Labor and Transaction Path of the Parties
[***]
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