Agreement No.: PS22-050 17 - Quality concern resolution (eg of elements; problem solving & escalation, critical concern action process, lessons learned process) 9.1.6 All supporting functions supporting the plant operation are following the same...
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Agreement No.: PS22-050 Certain identified information marked with “[***]” has been omitted from this document because it is both (i) not material and (ii) the type that the registrant treats as private or confidential. [***]MANUFACTURING AGREEMENT Zhongjia Automobile Manufacturing (Chengdu) Co. LTD and Polestar Performance AB Manufacturing of [***]vehicles in Volvo Cars’ Chengdu plant for sale by Polestar outside mainland China Agreement No.: PS22-050 2 TABLE OF CONTENTS 1. DEFINITIONS ......................................................................................................................... 4 2. SCOPE AND ORDER OF PRIORITY .................................................................................... 8 3. THE CONTRACT PRODUCTS.............................................................................................. 9 4. SALE AND PURCHASE ........................................................................................................ 9 5. VOLUME FORECASTS AND ORDER PROCESS .............................................................. 9 6. PRICE AND PAYMENT ........................................................................................................ 9 7. MANUFACTURING ............................................................................................................. 10 8. DELIVERY, TITLE AND RISK ........................................................................................... 14 9. MANUFACTURING QUALITY, INSPECTION AND RIGHT TO REJECT PRODUCTS16 10. PERMITS ............................................................................................................................... 19 11. WARRANTY, PRODUCT LIABILITY, RECALL AND OTHER CLAIMS ...................... 19 12. AUDIT RIGHTS .................................................................................................................... 20 13. TRADEMARKS .................................................................................................................... 20 14. LIMITATION OF LIABILITY ............................................................................................. 21 15. INDEMNIFICATION ............................................................................................................ 22 16. GOVERNANCE AND CHANGES ....................................................................................... 23 17. CONFIDENTIALITY ............................................................................................................ 23 18. TERM AND TERMINATION .............................................................................................. 25 19. RESPONSIBLE BUSINESS ................................................................................................. 27 20. MISCALLENOUS ................................................................................................................. 30 21. GOVERNING LAW .............................................................................................................. 32 22. DISPUTE RESOLUTION ..................................................................................................... 32 LIST OF EXHIBITS Exhibit 1 – Volume planning procedures Exhibit 2 – Car pricing principles and procedures Exhibit 3 – Technical Specification Exhibit 4A - Sustainability requirements Exhibit 4B – Manufacturing Sustainability requirements Agreement No.: PS22-050 This MANUFACTURING AGREEMENT (this “Agreement”) is entered into on the date indicated below and made between: (1) Zhongjia Automobile Manufacturing (Chengdu) Co. LTD., Reg. No. 91510112562005858U a limited liability company incorporated under the laws of People's Republic of China (the “Supplier” or “VCCD”); and (2) Polestar Performance AB, Reg. No. 556653-3096, a limited liability company incorporated under the laws of Sweden with (the “Buyer” or “Polestar”). Supplier and Buyer are referred to individually as a “Party” and jointly as the “Parties”. BACKGROUND A. Volvo Car Corporation (“Volvo Cars”) owns and operates, through its subsidiary Zhongjia Automobile Manufacturing (Chengdu) Co. LTD. (“VCCD”) a plant for manufacturing of cars in Chengdu in the People's Republic of China (the “Plant”). Land, building and facilities, as well as certain equipment and tooling, of the Plant are owned or possessed by VCCD. B. Polestar is engaged in the development, manufacturing and sale of Polestar branded high- end electric performance cars. C. The Supplier has the financial and industrial capacity required to manufacture vehicles in the quality and quantity that has been agreed between the Parties and the Supplier has agreed to supply to Polestar in accordance with the terms set out in this agreement. D. The Volvo and Polestar Engineering & Operations Steering Committee has been established for inter alia governance of the contract manufacturing services provided by the Plant. The Buyer now wishes that the Supplier shall manufacture and sell completed [***]vehicles (the “Contract Product”) to the Buyer. E. The terms and conditions that shall apply to the manufacturing and assembly of cars in the Plant are set forth in this Agreement. F. As a general principle, the Parties agree that transactions amongst all relevant entities involved shall be conducted on arm’s length terms. G. In light of the foregoing, the Parties have agreed to execute this Agreement. Agreement No.: PS22-050 4 1. DEFINITIONS The following terms shall have the meanings ascribed to them below. All defined terms in singular in the list of definitions shall have the same meaning in plural and vice versa. “VCCD” shall have the meaning set out in Background A above. "Affiliates" means (i) for Supplier, any other legal entity that directly or indirectly is controlled by Volvo Cars and (ii) for Buyer, any other legal entity that, directly or indirectly, is controlled by Polestar Automotive Holding UK PLC, "control" means the possession, directly or indirectly, by agreement or otherwise, of (i) at least 50% of the voting stock, partnership interest or other ownership interest, or (ii) the power (a) to appoint or remove a majority of the board of directors or other governing body of an entity, or (b) to cause the direction of the management of an entity. The Parties, however, agree to renegotiate this definition of "Affiliates" in good faith if it in the future does not reflect the Parties' intention at the time of signing this Agreement due to a restructuring or reorganization in relation to either of the Parties. “Agreement” means this [***]Manufacturing Agreement and its Exhibits. “Actual Volume” means the total amount of vehicles produced in the Plant and achieved Factory complete status annually for each brand respectively e.g. references could be made to Polestar Actual Volumes. “Buyer” shall have the meaning set out under (2) above. “Common Equipment” means equipment owned by the Supplier that is stored at the premises of the Plant and used for production of any type of vehicle. “Common Type Bound Tooling and Equipment” means tooling and equipment owned by the Supplier that is stored at the premises of the Plant and used for production of [***]vehicles for both Volvo Cars and its Affiliates and the Buyer and its Affiliates. “Common Vendor Tooling” means tooling owned by the Supplier that is used and stored at the premises of a Third Party but used for the production of [***] vehicles (and/or components therein) for Volvo Cars and its Affiliates and Buyer and its Affiliates. "Components" means all the components (including software) and parts included in the Contract Product according to the Technical Specification. “Confidential Information” means any and all information regarding the Parties and their respective businesses, whether commercial or technical, in whatever form or media, including but not limited to, the Technical Information and other information relating to Contract Products, intellectual property rights, concepts, technologies, processes, commercial figures, techniques, strategic plans and budgets, investments, customers and sales, designs, graphics, CAD models, CAE data, targets, test plans/reports, technical performance data and engineering sign-off documents and other information of a sensitive nature, that a Party learns from or about the other Party prior to, during or after the execution of the [***]Manufacturing Agreement. “Contract Products” shall have the meaning set out under Background D. above.
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Agreement No.: PS22-050 9 3. THE CONTRACT PRODUCTS 3.1 The Contract Products shall be manufactured in accordance with the Technical Specifications. 3.2 The Buyer shall provide the Supplier with such Technical Information as set out in this Agreement. The Technical Specifications for the Contract Product are attached hereto as Exhibit 3. 3.3 Any changes to the Technical Specifications that affect the Contract Product shall be notified by the Buyer to the Supplier according to the change management procedures for the Contract Products set out in Section 16.2. 4. SALE AND PURCHASE 4.1 The Supplier agrees to supply to the Buyer, and the Buyer agrees to purchase, the complete Contract Products ordered in accordance with and under the terms and conditions of this Agreement. 4.2 The Parties acknowledge that other car model manufacturing agreements may be entered into for the production of vehicles in the Plant other than the Contract Products. The Buyer shall not only cooperate with the Supplier but shall also cooperate with Volvo Cars as well as buyers under such other car model manufacturing agreements in order to facilitate the operation of the Plant and the overall production of vehicles in the Plant as well as of the Contract Products. 5. VOLUME FORECASTS AND ORDER PROCESS 5.1 The procedures for planning the manufacturing and assembly of the Contract Products in the Plant, including forecasted volumes and orders for Contract Products, are attached hereto as Exhibit 1. 5.2 The Buyer will order and the Supplier will supply the Contract Products in accordance with the order process set out in Exhibit 1. 6. PRICE AND PAYMENT 6.1 Price 6.1.1 The Contract Products shall be priced based on the full cost of production for such Contract Products plus a mark-up, 2024 being[***]. The mark-up will be reviewed annually and adjusted [***]of the latest available benchmark procured by the Supplier in accordance with the “arm’s length principle” between the Parties. [***]The principles and procedures for calculating the full cost of production and for setting the price of the Contract Products, on an ‘arm’s length’ basis, are attached hereto as Exhibit 2. The Parties acknowledge and agree that the Supplier shall actively coordinate and support the Buyer’s dialogues with the Chinese local tax authority regarding the pricing of the Contract Products. 6.1.2 In addition to Contract Products, also service/spare parts manufactured in the Plant being parts in a Contract Product shall be possible to order under this Agreement. In such case the principles relating to Contract Products in this Agreement shall also apply to such Agreement No.: PS22-050 10 service/spare parts as far as reasonably possible, unless the context or circumstances clearly suggests otherwise. 6.2 Payment and Invoice 6.2.1 Invoice for a Contract Product shall be issued by the Supplier to the Buyer when the Contract Product has been delivered in accordance with Section 8.1.1 (invoice trigger loaded on carrier). Invoices may be generated electronically. However, the Buyer may request hard-copy summary invoices that summarises total batches of individual invoices over a specified period, in order to satisfy VAT and customs reporting requirements. 6.2.2 [***] 6.2.3 Invoice from the Supplier to the Buyer shall be paid at the latest [***]days after an invoice has been issued. Payment shall be made in RMB or such other currency that the Supplier and the Buyer may agree, in a timely manner and in accordance with the payment terms set forth in this Section 6.2. 6.2.4 All amounts and payments referred to in this Agreement are exclusive of VAT only. VAT is chargeable on all invoiced amounts only when required by local law and shall be borne by the Buyer. Buyer may appoint an Affiliate or Third Party to handle the requisite VAT registration and recovery. 6.2.5 Payment made later than the due date will automatically be subject to interest for late payments for each day it is not paid and the interest shall be based on[***] 6.2.6 Any bank charges in connection with payment by the Buyer to the Supplier shall be paid or reimbursed by the Buyer. 6.2.7 [***] 7. MANUFACTURING 7.1 Assembly 7.1.1 The Supplier shall assemble the Contract Products in the Plant. The Supplier shall during the Term maintain capacity to manufacture, assemble and supply to the Buyer Contract Products in quantities ordered by the Buyer up to the volumes agreed between the Parties, and such capacity will in relation to the Buyer never exceed such volumes dedicated to the Buyer as decided by the Steering Committee. The Parties thus acknowledge that the capacity in the Plant is limited and shared between the Buyer and the Supplier who also has vehicles produced in the Plant. 7.1.2 The Buyer shall provide the Supplier with the Technical Specification and relevant Know- How for the manufacturing of the Contract Product. The Buyer may also, subject to separate agreement between the Parties, provide technical assistance to a reasonable level at the cost of the Supplier. 7.1.3 The Supplier undertakes to assemble the Contract Product in strict conformity with the Technical Specification, Know-How and/or as otherwise instructed by the Buyer from time to time and shall never implement any product changes, modification or substitutions of Component(s) unless authorized thereto in writing by the Buyer in each case, subject to the change management procedures set forth in Section 16.2. When producing and assembling Agreement No.: PS22-050 11 the Contract Product the work shall be carried out to the same standard of care that is done for Suppliers own products in the Plant. Such standard of care and professionalism shall at all times correspond to Industry standard. 7.1.4 The Supplier shall provide to the Buyer necessary and agreed built data of the Contract Product by the time of Factory Complete in order for the Buyer to maintain and follow-up the Contract Product in the aftermarket, reflecting both the hardware as well as the software configuration. The built data should contain all data needed to meet legal requirements as well as any other data agreed between the Supplier and the Buyer. 7.1.5 The Supplier will strive to meet Xxxxx’s sustainability standards where applicable and will keep the Buyer informed, as set forth in Exhibit 4A and 4B. 7.2 Equipment and tooling 7.2.1 The Supplier undertakes to maintain in its ownership and possession all tooling and equipment for vehicles to be produced in the Plant (e.g. Common Equipment, Common Type Bound Tooling and Equipment, Common Vendor Tooling), except for Unique Type Bound Tooling and Equipment and Unique Vendor Tooling which the Buyer, or Geely Entity shall remain the owner of. The Buyer, or Geely Entity will remain the owner of the Unique Type Bound Tooling and Equipment even if such is located in the Plant. Normal tooling maintenance will be commenced by the Supplier and related costs charged as part of the price for the Contract Products, whereas update and replacement of the Unique Type Bound Tooling and Equipment will be controlled and paid separately by the Buyer or Geely Entity. 7.2.2 The Supplier undertakes to acquire or have acquired, all such necessary tooling, equipment and systems, including but not limited to jigs, fixtures, tools and welding equipment, necessary for the assembly of the Contract Product, except for the Unique Type Bound Tooling and Equipment and Unique Vendor Tooling mentioned in 7.2.1. 7.2.3 Any tooling and equipment acquired in accordance with Section 7.2.1–7.2.2 shall meet the Supplier’s quality requirements, as aligned with Industry Standard. 7.2.4 Contract Product specific tooling and equipment acquired in accordance herewith shall be used solely for the purpose of the assembly of the Contract Product and its Components. 7.2.5 All plant tooling and equipment used by Supplier for the production of the Contract Products shall be maintained in proper working condition by the Supplier in accordance with applicable maintenance instructions for said tooling and equipment or by using industry practice if there are no specific instructions. 7.2.6 Purchase, maintenance and repair of Unique Vendor Tooling, which is used only in relation to the Buyer’s Contract Products, is not covered by this Agreement. The Buyer is responsible for providing and maintaining such Unique Vendor Tooling. The Parties may enter into separate tooling agreements in order to regulate any details around tooling, which is not regulated herein. 7.2.7 The Supplier should assist the Buyer in phase out projects related to the Unique Type Bound Tooling and Equipment if necessary. Cost of carving out Unique Type Bound Tooling and Equipment is upon the Buyer. Buyer and Supplier must agree on process and timing for handling Unique Type Bound Tooling and Equipment no later than 12 months Agreement No.: PS22-050 12 before EOP. Agreed timing and process must not interfere with the manufacturing of any other product at the Plant. 7.2.8 If any tooling mentioned in Section 7.2.1 above is wrongly owned by the Supplier that should be owned by the Buyer, or Geely Entity, or vice versa, such ownership shall be transferred to the other Party using a tooling sale and transfer agreement. 7.2.9 For Unique Type Bound Tooling and Equipment and Unique Vendor Tooling the Buyer or Geely Entity shall grant the Supplier the right to use such assets for the manufacturing of the Contract Product under a User Right Agreement to be entered into between the Supplier and Buyer or Geely Entity. 7.2.10 The Buyer shall pay Supplier for its share of Common Equipment, Common Type Bound Tooling and Equipment and Common Vendor Tooling and compensate Supplier for its cost incurred under the User Right Agreement related to Unique Type Bound Tooling and Equipment and Unique Vendor Tooling according to the car pricing principles set forth in Exhibit 2. 7.3 Components 7.3.1 The Buyer and Buyer´s Affiliate have entered into a service agreement for procurement services) dated June 30, 2019 with Volvo Cars (PS19-032) and Volvo Cars Investment Co. Ltd (PS19-031), under which Volvo Cars and its Affiliates provide Manufacturing Engineer, Logistics and Procurement Services. The Buyer utilises these services in order to fulfil its obligations and responsibilities under this Section 7.3. 7.3.2 The Buyer is responsible for ensuring that the Supplier is able to order Components for the production of Contract Products by calling-off such Components from Component suppliers procured by the Buyer. 7.3.3 Components will be called-off from Component suppliers directly by the Supplier. The Buyer shall ensure that the Supplier is provided with information required to be able to call-off Components from such suppliers. 7.3.4 The Supplier is responsible for managing inbound logistics including but not limited to transportation from Component suppliers to plant, custom clearance and to pay related logistic cost including customs duties. 7.3.5 The Supplier shall pay all Component suppliers’ invoices directly to the Component suppliers. The costs for such Components shall be included in the prices for the Contract Products. 7.4 License grant 7.4.1 The Buyer hereby grants to the Supplier a limited, non-exclusive license to the Buyer’s intellectual property rights which are necessary for the production of the Contract Products and solely for the purpose of producing the Contract Products under and during the term of this Agreement. The license granted hereunder does not give the Supplier any right
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Agreement No.: PS22-050 21 agreement, which stipulates that the name, Trademarks and all thereto related intellectual property can only be used by Volvo Cars and its Affiliates in relation to Volvo products. 13.3 Polestar brand name 13.3.1 Correspondingly, it is especially noted that this Agreement does not include any right to use the ‘Polestar’ brand name, or Trademarks, or refer to ‘Polestar’ in communications or official documents of whatever kind. 13.3.2 This means that this Agreement does not include any rights to directly or indirectly use the ‘Polestar’ brand name or ‘Polestar’ Trademarks, on or for any products or when marketing, promoting and/or selling such products, or in any other contacts with Third Parties, e.g. in presentations, business cards and correspondence. 13.4 Trademark on Contract Products 13.4.1 Notwithstanding the above, the Supplier is hereby granted the right to use the Buyer’s trademarks but solely to apply such trademark on the Contract Product in accordance with the Technical Specification or as otherwise instructed by the Buyer. 13.4.2 Any other use of the Buyer’s trademark, including the one on the Contract Products, is subject to the Parties entering into a trademark license agreement. 14. LIMITATION OF LIABILITY 14.1 Neither Party shall be responsible for any indirect, incidental or consequential damage or any losses of production or profit caused by it under this Agreement. 14.2 Each Party’s aggregate liability for any damage arising out of or in connection with this Agreement shall be limited to [***] 14.2.1 Any compensation claims paid by a Party under any relevant [***]Chengdu manufacturing agreement shall reduce the aforementioned liability cap amount for that Party during the relevant calendar year. For the avoidance of doubt the aggregated liability for Supplier towards Polestar Companies [***]under any relevant [***]Chengdu manufacturing agreements. The aggregated liability for Polestar Companies towards Supplier shall not exceed [***]under any relevant [***]Chengdu manufacturing agreements. 14.2.2 Any damage paid under this Agreement from the Supplier to the Buyer shall never become part of the cost base for the Contract Products. 14.3 The limitations of liability set out in this Section 14 shall not apply in respect of damage; (a) caused by wilful misconduct or gross negligence, (b) caused by a Party’s breach of the confidentiality undertakings in Section 17 below, (c) caused by a Party’s exit subject to Section 18.4below. Agreement No.: PS22-050 22 14.4 The limitations of liability set out in Sections 14.1-14.2 shall not apply in respect of Section 15 below, with the exception of any Third Party claims on Intellectual Property Rights infringement to which Section 14.1-14.2 shall apply. 15. INDEMNIFICATION 15.1 [***] . 15.2 Supplier shall after receipt of notice of a claim which may reasonably be indemnifiable pursuant to Section 15.1 above, promptly notify Buyer of such claim in writing and Buyer shall following receipt of such notice, to the extent permitted under applicable law, at its own cost conduct negotiations with the Third Party presenting the claim and/or intervene in any suit or action. Buyer shall at all times keep Supplier informed of the status and progress of the claim and consult with Supplier on appropriate actions to take. If Buyer fails to or chooses not to take actions to defend Supplier within a reasonable time, or at any time ceases to make such efforts, Supplier shall be entitled to assume control over the defence against such claim and /or over any settlement negotiation at Buyer’s cost. Any settlement proposed by Buyer on its own account must take account of potential implications for Supplier and shall therefore be agreed in writing with Supplier before settlement. Each Party will at no cost furnish to the other Party all data, records, and Agreement No.: PS22-050 23 assistance within that Party’s control that are of importance in order to properly defend against a claim. 15.3 Supplier and Buyer acknowledge that Supplier may only be indemnified once for each event. 15.4 Buyer is responsible to obtain and maintain an insurance to cover its obligations under Section 15.1 of this Agreement with the exception of Third Party claims on Intellectual Property Rights infringement. 15.5 This clause shall not limit or prevent any rights or remedies available for the Buyer to claim damages from the Supplier under this Agreement. 16. GOVERNANCE AND CHANGES 16.1 Governance 16.1.1 The Parties shall act in good faith in all matters and shall at all times co-operate in respect of changes to this Agreement as well as issues and/or disputes arising under this Agreement. 16.1.2 The governance and co-operation between the Parties in respect of this Agreement shall primarily be administered on an operational level. 16.1.3 In the event the Parties on an operational level cannot agree upon aspects relating to the co- operation between the Parties, each Party shall be entitled to escalate such issue to the Steering Committee. 16.1.4 If the Steering Committee fails to agree upon a solution of the disagreement the relevant issue should be escalated to the Strategic Board for decision. 16.2 Change management 16.2.1 For any changes or updates of the Technical Specifications, the Buyer shall notify the Supplier of its requested change and the Supplier shall provide feedback to the Buyer of potential consequences of the requested change regarding both cost and effect on delivery time. Details regarding change management should follow the change management procedure used by the Parties. 16.2.2 The Supplier undertakes to immediately incorporate any changes in the Components, in the Contract Products or in manufacturing engineering processes related thereto in accordance with strict batch sequence orders and plans as agreed by the Parties. The Supplier shall bear the costs for all the described work. All related work performed by the Supplier shall be charged back to the Buyer as part of the price for the Contract Products. 17. CONFIDENTIALITY 17.1 The Parties shall take any and all necessary measures to comply with the security and confidentiality procedures of the other Parties. 17.2 All Confidential Information shall only be used for the purposes comprised by the fulfilment of this Agreement. Each Party will keep in confidence any Confidential Information obtained in relation to this Agreement and will not divulge the same to any Agreement No.: PS22-050 24 Third Party, unless the exceptions specifically set forth below in this Section 17.2 below apply or when approved by the other Party in writing, and with the exception of their own officers, employees, consultants or sub-contractors with a need to know as to enable such personnel to perform their duties hereunder, as well as with the exception of such personnel of Volvo Cars and Polestar with a need to know as for the Parties to perform their duties hereunder and in relation to the operation of the Plant. This provision will not apply to Confidential Information which the Receiving Party can demonstrate: (a) was in the public domain other than by breach of this undertaking, or by another confidentiality undertaking; (b) was already in the possession of the Receiving Party before its receipt from the Disclosing Party; (c) is obtained from a Third Party who is free to divulge the same; (d) is required to be disclosed by mandatory law, court order, lawful government action or applicable stock exchange regulations; or (e) is developed or created by one Party independently of the other, without any part thereof having been developed or created with assistance or information received from the other Party. 17.3 The Receiving Party shall protect the disclosed Confidential Information by using the same degree of care, but no less than a reasonable degree of care, to prevent the dissemination to Third Parties or publication of the Confidential Information, as the Receiving Party uses to protect its own Confidential Information of similar nature. Further, each Party shall ensure that its employees and consultants are bound by a similar duty of confidentiality and that any subcontractors taking part in the fulfilment of that Party’s obligations hereunder, enters into a confidentiality undertaking containing in essence similar provisions as those set forth in this Section 17. 17.4 Any tangible materials that disclose or embody Confidential Information should be marked by the Disclosing Party as “Confidential,” “Proprietary” or the substantial equivalent thereof. Confidential Information that is disclosed orally or visually shall be identified by the Disclosing Party as confidential at the time of disclosure, with subsequent confirmation in writing within thirty (30) days after disclosure. However, the lack of marking or subsequent confirmation that the disclosed information shall be regarded as “Confidential”, “Proprietary” or the substantial equivalent thereof does not disqualify the disclosed information from being classified as Confidential Information. 17.5 If any Party violates any of its obligations described in this Section 17, the violating Party shall, upon notification from the other Party, (i) immediately cease to proceed such harmful violation and take all actions needed to rectify said behaviour and (ii) financially compensate for the harm suffered as determined by an arbitral tribunal pursuant to Section
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Agreement No.: PS22-050 25 21.2 below. All legal remedies (compensatory but not punitive in nature) according to law shall apply. 17.6 This confidentiality provision shall survive the expiration or termination of this Agreement without limitation in time. 18. TERM AND TERMINATION 18.1 Term and termination 18.1.1 This Agreement shall become effective when signed by duly authorised signatories of each Party, and shall, unless terminated in accordance with the principles set forth in this Agreement, remain in force for a period of seven years after start of production, Job1. Should Buyer wish to continue production after seven years the Parties shall, in good faith, negotiate a possible prolongation of this Agreement. This Agreement may be terminated in accordance with what is set out below in this Section 18.1. 18.1.2 Either Party shall be entitled to terminate this Agreement with immediate effect, in the event; (a) the other Party commits a material breach of the terms of this Agreement, which has not been remedied within sixty (60) days from written notice from the other Party to remedy such breach (if capable of being remedied); or (b) the other Party breaches any of its representations or warranties under Section 19.2.3, 19.2.4 or 19.3, or any representations or warranties set forth in Section 19.2.3, 19.2.4 or 19.3 has failed to be true and correct at any time; (c) a Party’s ability to fulfil its obligations under this agreement is materially affected by the imposition of economic sanctions or export control laws and regulations; or (d) if the other Party should become insolvent or enter into negotiations on composition with its creditors or a petition in bankruptcy should be filed by it or it should make an assignment for the benefit of its creditors. 18.1.3 [***] 18.1.4 Upon termination in accordance with this Section 18, the Parties should agree on how to handle supply of spare parts for the period after termination. 18.2 Change of Control A Party shall be entitled to terminate this Agreement in the event that any Change of Control (as defined below) has occurred in the other Party, unless the other Party’s prior written consent has been obtained. “Change of Control” means (a) in the case of the Buyer, the Buyer ceasing to be controlled Polestar Automotive Holding UK PLC or (b) in the case of the Supplier, the Supplier ceasing to be controlled by Volvo Car AB (publ). Agreement No.: PS22-050 26 18.3 Consequences of termination 18.3.1 Termination of this Agreement shall be without prejudice to the accrued rights and liabilities of the Parties on the date of termination, unless expressly waived in writing by the Parties. 18.3.2 Unless otherwise agreed by the Parties, upon expiry or termination of this Agreement, the rights of the Supplier referred to in this Agreement hereof shall cease and the Supplier shall forthwith cease to assemble the Contract Product or any Components thereof. 18.3.3 The Supplier shall upon expiry or termination of this Agreement make no further use of the Technical Information and Know-How owned or associated with the Buyer and shall return to the Buyer, at the Supplier’s expense, the Technical Information in tangible form Agreement No.: PS22-050 27 and any reproductions or copies thereof or, at the Buyer's option, present acceptable evidence that the same have been completely destroyed. 18.3.4 The Supplier shall forthwith take all action necessary to transfer all licenses or registrations issued by the relevant authorities for the Contract Product to the Buyer or, if this is not possible, to arrange for cancellation of such licenses or registrations. 18.3.5 Upon termination of this Agreement, the Buyer shall within sixty (60) days after expiry, purchase at fair market value any non-defective Contract Product and/or Components and non-cancellable orders regarding supply to the Buyer. 18.3.6 Neither Party is entitled to claim compensation for goodwill, indemnities for loss of profit or of clientele, or consequential loss by reason of termination of this Agreement. 18.3.7 In case of a termination in accordance with Section 18.1, however not in case Section 18.3.8 applies, Section 18.5 shall apply. 18.3.8 [***] 18.3.9 [***] 18.4 Exit 18.4.1 [***] 18.4.2 [***] 18.4.3 [***] 18.5 End of Production 18.5.1 [***] 18.5.2 [***] 19. RESPONSIBLE BUSINESS 19.1 Compliance with laws, internationally recognized principles concerning business and human rights and Code of Conduct 19.1.1 Each Party shall comply with the laws, and regulations of the country/countries where it operates and all other laws and regulations of any other jurisdiction which are, at the time for signing the Agreement or later during the validity of this Agreement become, applicable to the business and the activities of the Parties in connection with this Agreement. 19.1.2 Without limiting the generality of the foregoing, Parties shall at all times follow: (i) all applicable laws, regulations and statutory requirements applicable to the Parties when performing their respective obligations under this Agreement. This includes, but is not limited to those relating to the protection of people’s free enjoyment of labor laws, i.e. such national laws regulating working conditions, work place health and safety, discrimination and the right to freedom of association and collective bargaining; Agreement No.: PS22-050 28 (ii) internationally recognized human rights contained in the International Bill of Human Rights (i.e. the Universal Declaration of Human Rights, the International Covenant on Civil and Political Rights, the International Covenant on Economic, Social and Cultural Rights); UN Guiding Principles on Business and Human Rights; Ten Principles of the United Nations Global Compact (UNGC) covering human rights, labor standards, the environment and anti-corruption; the eight core ILO conventions as set out in the ILO Declaration of Fundamental principles and Rights at Work; where relevant, United Nations Declaration on the Rights of Indigenous Peoples (UNDRIP); and (iii) the OECD Due Diligence Guidance for Responsible Supply Chains of Minerals from Conflict-Affected and High-Risk Areas. 19.1.3 Volvo Car Group has adopted a corporate Code of Conduct for its business called Our Code – How we act (the “Volvo Cars Code of Conduct”) available at xxxxx.xxxxxxxxx.xxx/xxxxxxxxxxxxxx, to which Supplier and its affiliates are bound. Polestar has adopted a Code of Conduct for its business (the “Polestar Code of Conduct”) available at xxxxx.xxxxxxxx.xxx/xxxxxx, to which Buyer and its affiliates are bound. Parties agree that these two documents are expressions of the same or similar principles of good conduct, and hereby declare to each other that they shall adhere to, and shall cause their directors, officers, employees and contractors to adhere to, their respective Code of Conduct or similar principles, in their performance of their respective obligations under this Agreement. 19.1.4 Volvo Car Group has adopted a Code of Conduct for Business Partners (“the Volvo Cars Code of Conduct for Business Partners”) available at xxxxx.xxxxxxxxx.xxx/xxxxxxxxxxxxxx. Polestar has adopted a Code of Conduct for Business Partners (“the Polestar Code of Conduct for Business Partners”). Parties agree that these two documents are expressions of the same or similar principles of good conduct. The Parties agree to make commercially reasonable efforts to ensure that their respective Business Partners (as defined in the applicable Code of Conduct for Business Partners), to the extent relevant for the performance under this Agreement, are committed to follow the applicable Code of Conduct for Business Partners, or similar principles. 19.1.5 If Buyer reasonably suspects that Supplier does not adhere to (i) Volvo Cars Code of Conduct, and (ii) internationally recognized principles concerning business and human rights as described in Section 19.1.2 (i) and (ii) when performing its obligations under this Agreement, then Buyer shall have the right, either directly or through an independent third- party auditor appointed by Xxxxx, to conduct an on-site inspection. Any such inspection is subject to prior reasonable notice in writing from Buyer to Supplier. All information obtained during such an inspection shall be considered Confidential Information and be subject to the confidentiality undertaking in Section 17, unless the Parties agree otherwise Buyer shall ensure that any independent third-party auditor undertakes the same
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Agreement No.: PS22-050 33 position, and simultaneously send a copy of its statement to the Steering Committee. Each such statement shall be considered by the next regular meeting held by the Steering Committee or in a forum meeting specifically called upon by either Party for the settlement of the issue. 22.1.2 The members of the Steering Committee shall use reasonable endeavours to resolve a deadlock situation in good faith. As part thereof, the Steering Committee may request the Parties to in good faith develop and agree on a plan to resolve or address the breach, to be presented for the Steering Committee without undue delay. If the Steering Committee agrees upon a resolution or disposition of the matter, the Parties shall agree in writing on terms of such resolution or disposition and the Parties shall procure that such resolution or disposition is fully and promptly carried into effect. 22.1.3 If the Steering Committee cannot settle the deadlock within thirty (30) days from the deadlock notice pursuant to the section above, despite using reasonable endeavours to do so, such deadlock will be referred to the Strategic Board for decision. Should the matter not have been resolved by the Strategic Board within thirty (30) days counting from when the matter was referred to them, despite using reasonable endeavours to do so, the matter shall be resolved in accordance with Section 21.2 below. If no Steering Committee has been established between the Parties, the relevant issue shall be referred to the Strategic Board immediately and Section 21.1.2 above shall not apply. 22.1.4 All notices and communications exchanged in the course of a deadlock resolution proceeding shall be considered Confidential Information of each Party and be subject to the confidentiality undertaking in Section 17 above. 22.1.5 Notwithstanding the above, the Parties agree that either Party may disregard the time frames set forth in this Section 21.1 and apply shorter time frames and/or escalate an issue directly to the Strategic Board in the event the escalated issue is of an urgent character and where the applicable time frames set out above are not appropriate. 22.2 Arbitration 22.2.1 Any dispute, controversy or claim arising out of or in connection with this Agreement, or the breach, termination or invalidity thereof, shall, be submitted to China International Economic and Trade Arbitration Committee (“CIETAC”) for arbitration, which shall be held in Shanghai and conducted in accordance with the CIETAC’s arbitration rules in effect at the time of applying for arbitration, whereas the language to be used in the arbitral proceedings shall be English and Chinese. The arbitral tribunal shall be composed of three arbitrators. 22.2.2 Irrespective of any discussions or disputes between the Parties, each Party shall always continue to fulfil its undertakings under this Agreement unless an arbitral tribunal or court (as the case may be) decides otherwise. 22.2.3 In any arbitration proceeding, any legal proceeding to enforce any arbitration award, or any other legal proceedings between the Parties relating to this Agreement, each Party expressly waives the defence of sovereign immunity and any other defence based on the fact or allegation that it is an agency or instrumentality of a sovereign state. Such waiver Agreement No.: PS22-050 34 includes a waiver of any defence of sovereign immunity in respect of enforcement of arbitral awards and/or sovereign immunity from execution over any of its assets. 22.2.4 All arbitral proceedings as well as any and all information, documentation and materials in any form disclosed in the proceedings shall be strictly confidential. ______________________________ [SIGNATURE PAGE FOLLOWS] Agreement No.: PS22-050 35 The Parties may execute this Amendment in counterparts which taken together will constitute one instrument. The Parties will receive one (1) each. ZHONGJIA AUTOMOBILE MANUFACTURING (Chengdu) Co. LTD POLESTAR PERFORMANCE AB By: /s/ Xxxxxx Xxxxx By: /s/ Xxxxxxxx Xxxxxxxxx Printed Name: Xxxxxx Xxxxx Printed Name: Xxxxxxxx Xxxxxxxxx Title: Aithoized Signatory Title: Authorized Signatory Date: Date: By: By: Printed Name: Printed Name: Title: Title: Date: Date: Agreement No.: PS22-050 36 EXHIBIT 1 VOLUME PLANNING PROCEDURES 1. [***]
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Agreement No.: PS22-050 45 outcome of alternatives assessment (if applicable), expected phase out date (if applicable) and date for next alternatives assessment. 5.3 IMDS substance data to mitigate future supply chain and compliance risks 5.3.1 The supplier commits to support Polestar in gathering and to disclose information on substances and substance groups, used in materials/components that are material to Polestar to be able to mitigate future supply chain and compliance risks. Agreement No.: PS22-050 46 EXHIBIT 4B MANUFACTURING SUSTAINABILITY REQUIREMENTS 1. [***]