Common use of Cost and Pricing Clause in Contracts

Cost and Pricing. 3.2.1 Party A’s Costs means any shipping cost and any other costs and expenses (if any) under this Agreement. Calculation of shipping cost: the shipping cost shall be calculated based on the actual cost of shipping in the case of a single product (one single product in one logistic box), and shall be proportionated based on the selling price of each product in the case of more than one products in one logistic box. 3.2.2 Party B’s Costs shall include the followings: 3.2.2.1 Costs of raw materials: for any cost of raw material, the serial number, model and specifications, unit, quantity, and unit price of the purchased materials, and the full name and contact information of the supplier/agent shall be specified. 3.2.2.2 OEM costs: details of the costs and expenses in connection with OEM shall be specified in the OEM costs. 3.2.2.3 Amortization of mold and tooling: (in accordance with the template provided by Party A) Formula for Calculation of amortization of mold and tooling: Amortization of mold and tooling for each product = total costs of mold and tooling / (times of design for mold and tooling* number of mold cavity) 3.2.2.4 Logistic costs: means the converted or estimated logistic costs for the delivery of products from Party B’s manufacturer to warehouse designated by Party A (in accordance with the template provided by Party A). 3.2.2.5 Others: license fee or other expenses in relation to third party’s intellectual property rights paid by Party B (including details provided in the cooperation agreement between Party B and such third party, invoices and remittance evidences). 3.2.3 Quotations shall not include the following costs and expenses: Party B’s profit and indirect costs (including without limitation, the management fee, water and electricity costs, depreciation, after-sale service fees and other indirect costs). 3.2.4 All quotations under this Agreement shall be inclusive of tax (and shall only include value-add tax of 17%). 3.2.5 In the event that Party A is not agreeable to Party B’s Costs, Party A shall be entitled to procure, under the same terms and conditions, in such other manners including without limitation the followings: 3.2.5.1 Party A may procure directly from a supplier, and Party B shall be responsible for the inspection and acceptance, inventory taking, management and use of (the materials); or 3.2.5.2 Party A may make available relevant procurement channel to Party B, and Party B shall enter into a procurement agreement with the supplier suggested by Party A upon the terms and conditions designated by Party A. In whichever way mentioned above, Party B undertakes to use the materials and ancillary materials which are confirmed by Party A or procured in accordance with Clause 3.2.5.1 or 3.2.5.2 in the products to be provided to Party A. 3.2.6 Remark: Only direct costs shall be calculated by the Parties in the cooperation mode and profit share between the Parties. The one-time cost (such as R&D, certification*, sales or marketing) shall not be included in costs. *note: it refers to costs for certification targeted at domestic market only. The certification costs incurred in overseas market shall be discussed separately by the Parties on case by case basis as to whether to include in costs or how to allocate between the Parties. 3.2.7 Each Party shall bear its own costs in relation to management, depreciation of water and electricity (facilities), business operation and others. 3.2.8 With respect to the after-sale maintenance/after-sale service fees/online and offline customer services, subject to Appendix V “Framework Agreement on Products’ Quality”, each Party shall bear its own after-sale service fees for defects occurred within the agreed defect ratio. (For details of provisions in relation to after-sale services, please refer to Appendix VI “After-sale RMA Agreement” to be entered into upon the launch of products.)

Cost and Pricing. 3.2.1 Party A’s Costs means any shipping cost and any other costs and expenses (if any) under this Agreement. Calculation of shipping cost: the shipping cost shall be calculated based on the actual cost of shipping in the case of a single product (one single product in one logistic box), and shall be proportionated based on the shipping. Other cost: costs incurred for selling price of each product in the case of more than one products in one logistic boxproducts. 3.2.2 Party B’s Costs shall include the followings: 3.2.2.1 Costs of raw materials: for any cost of raw material, the serial number, model and specifications, unit, quantity, and unit price of the purchased materials, and the full name and contact information of the supplier/agent shall be specified. 3.2.2.2 OEM costs: details of the costs and expenses in connection with OEM shall be specified in the OEM costs. 3.2.2.3 Amortization of mold and tooling: the amortization of mold and tooling shall be limited to the first set of molds for each Xiaomi Customized Product by mutual confirmation between both Parties (in accordance with the template provided by Party A) Formula for Calculation of amortization of mold and tooling: Amortization of mold and tooling for each product = total costs of mold and tooling / (times of design for mold and tooling* number of mold cavity) 3.2.2.4 Logistic costs: means the converted or estimated logistic costs for the delivery of products from Party B’s manufacturer to warehouse designated by Party A (in accordance with the template provided by Party A). 3.2.2.5 Others: license fee or other expenses in relation to third party’s intellectual property rights paid by Party B (including details provided in the cooperation agreement between Party B and such third party, invoices and remittance evidences). 3.2.3 Quotations shall not include the following costs and expenses: Party B’s profit and indirect costs (including without limitation, the management fee, water and electricity costs, depreciation, after-sale service fees and other indirect costs). 3.2.4 All quotations under this Agreement shall be inclusive of tax (and shall only include value-add tax of 17%)tax. 3.2.5 In the event that Party A is not agreeable to Party B’s Costs, Party A shall be entitled to procure, under the same terms and conditions, in such other manners including without limitation but not limited to the followings: 3.2.5.1 Party A may procure directly from a supplier, and Party B shall be responsible for the inspection and acceptance, inventory taking, management and use of (the materials); or 3.2.5.2 Party A may make available relevant procurement channel to Party B, and Party B shall enter into a procurement agreement with the supplier suggested by Party A upon the terms and conditions designated by Party A. In whichever way mentioned above, Party B undertakes to use the materials and ancillary materials which are confirmed by Party A or procured in accordance with Clause 3.2.5.1 or 3.2.5.2 in the products to be provided to Party A. 3.2.6 Remark: Only direct costs shall be calculated by the Parties in the cooperation mode and profit share between the Parties. The one-time cost (such as R&D, trial production, certification*, sales or marketing) shall not be included in costs. *note: it refers to costs for certification targeted at domestic market only. The certification costs incurred in overseas market shall be discussed separately by the Parties on case by case basis as to whether to include in costs or how to allocate between the Parties. 3.2.7 Each Party shall bear its own costs in relation to management, depreciation of water and electricity (facilities), business operation and others. 3.2.8 With respect to the after-sale maintenance/after-sale service fees/online and offline customer services, subject to Appendix V “Framework Agreement on Products’ QualityQuality of Xiaomi Customized Product”, each Party shall bear its own after-sale service fees for defects occurred within the agreed defect ratio. (For details of provisions in relation to after-sale services, please refer to Appendix VI “Framework Agreement on After-sale RMA AgreementService of Xiaomi Customized Product” to be entered into upon the launch of products.)