Form 10-Q Tesla, Inc. For: Jun 30
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E-mailCertain identified information has been omitted from this document because it is not material and would be competitively harmful if publicly disclosed, and has been marked with “[***]” to indicate where omissions have been made.
Exhibit 10.1
Second Lease Amendment
This Second Lease Amendment (“Second Amendment”) is entered into effective as of April 1, 2020, by and between Tesla, Inc. (“Tesla”) and Panasonic Energy of North America, a division of Panasonic Corporation of North America (“PENA”), with respect to the Amended and Restated Factory Lease dated January 1, 2017 (the “Factory Lease”). Terms used herein with initial capitalization have the meanings specified where used or in the Gigafactory Contract. For good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties hereby agree as follows:
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1. |
For the period of [***] through [***], PENA shall pay for its usage of [***] at the rates set forth in the first table of Appendix C: Utility Rates to the Factory Lease (the “Appendix C-1 Table”). |
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On or before [***], the Parties will discuss in good faith and mutually agree whether [***] set forth in the second table of Appendix C: Utility Rates (“Appendix C-2 Table”) will apply [***] to [***]. |
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On or before [***], the Parties will discuss in good faith and mutually agree whether [***] set forth in the second table of Appendix C: Utility Rates (“Appendix C-2 Table”) will apply [***] to [***]. |
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4. |
This Second Amendment, together with the Factory Lease and all documents referenced or incorporated therein, constitutes the entire agreement between the Parties with respect to its subject matter and supersedes all prior agreements and understandings, both oral and written, between the Parties with respect to its subject matter. No subsequent terms, conditions, understandings, or agreements purporting to modify the terms of this Amendment will be binding unless in writing and signed by both Parties. This Amendment may be executed in counterparts, each of which when so executed and delivered will be deemed an original, and all of which taken together will constitute one and the same instrument. |
IN WITNESS WHEREOF, the Parties have executed this Second Amendment by persons duly authorized below:
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Tesla, Inc. |
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Panasonic Energy of North America a division of Panasonic Corporation of North America |
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By: |
/s/ Karn Budhiraj |
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By: |
/s/ Thomas G. Korte |
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Printed: |
Karn Budhiraj |
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Printed: |
Thomas G. Korte |
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Title: |
VP, Global Supply Management |
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Title: |
Senior Vice President of Operations of Panasonic Corporation of North America and Chief Financial Officer of Panasonic’s US Company |
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Date: |
9 June 2020 |
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Date: |
Jun 5, 2020 |
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Second Lease Amendment |
Page 1 |
Certain identified information has been omitted from this document because it is not material and would be competitively harmful if publicly disclosed, and has been marked with “[***]” to indicated where omissions have been made.
Exhibit 10.2
Amended and Restated General Terms and Conditions for gigafactory
These Amended and Restated General Terms and Conditions for Gigafactory (“Amended GTC”) are entered into effective as of January 1, 2020 (“Amendment Effective Date”) by and between Tesla, Inc., a Delaware corporation with offices at 3500 Deer Creek Road, Palo Alto, California, 94304, USA, and Tesla Motors Netherlands B.V., a Dutch corporation with offices at Burgemeester Stramanweg 122, 1101 EN Amsterdam, the Netherlands (collectively, “Tesla”), on the one hand, and Panasonic Corporation (“Panasonic Corp.”) and Panasonic Corporation of North America, by and through its division Panasonic Energy of North America (“PNA”) (collectively, “Seller”), on the other hand. Each Tesla and Seller entity is referred to herein as a “Party” and such entities are collectively referred to herein as the “Parties.” This Amended GTC shall, as of the Amendment Effective Date, amend and restate in entirety the General Terms and Conditions dated October 1, 2014 by and between the Parties (as amended, the “2014 GTC”); provided, however, that any provisions related to termination of the 2014 GTC, such as those set forth in Section 13.4 (Obligations Upon Termination), shall not apply in connection with the execution of this Amended GTC, and the 2014 GTC shall control with respect to all investments made by Seller in Seller’s Property and Seller’s manufacture, supply and/or provision of Goods prior to the Amendment Effective Date. For avoidance of doubt, claims arising under the 2014 GTC shall continue to be governed by, and subject to, the 2014 GTC.
PURPOSE
Tesla desires to engage Seller to develop, supply, and support products for use in Tesla Products at the manufacturing facility owned by Tesla in Sparks, Nevada (the “Factory”). This Amended GTC shall govern the relationship of the Parties as of the Amendment Effective Date.
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1. |
Production Planning and Order Process. |
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1.1 |
Production Planning. |
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(a) |
Each month during the Term, Tesla will provide a rolling monthly forecast of its anticipated requirements for Goods for the following periods of time: (i) for the next [***] for each forecast provided until Seller has invested in Seller’s Property required for Seller’s manufacture, supply and/or provision of Goods at the Factory in volumes up to an annual aggregate energy capacity of thirty-five gigawatt-hours (35 GWh); and (ii) for the next [***] for each forecast provided thereafter. Tesla’s forecast is non-binding and provided for planning purposes only. At a monthly meeting led by Tesla (“Production Meeting”), the Parties shall review in good faith Tesla’s forecast, the supply chain and other requirements to manufacture per Tesla’s forecast, any potential or actual constraints on Seller’s ability to manufacture Goods in accordance with Tesla’s forecast, and other business- and production-related issues. The Parties may also mutually agree to invite sub-suppliers that are co-located at the Factory to attend the Production Meeting. The Parties will then establish a production plan and/or update the existing production plan for manufacture and delivery of Goods based on the applicable Lead Time(s). Seller shall not withhold, condition or delay its consent to Tesla’s proposed production plan if Seller is capable of meeting Tesla’s forecast, based on such factors as supply chain constraints, labor constraints, and the performance capability of the Property. The agreed plan is the “Production Plan.” The Parties may agree in writing to adjust the Production Plan at any time. Seller shall deliver the Goods that fall within the forecasted volumes in the Production Plan, at prices set in accordance with the then-current production pricing agreement (the “Pricing Agreement”). |
Certain identified information has been omitted from this document because it is not material and would be competitively harmful if publicly disclosed, and has been marked with “[***]” to indicated where omissions have been made.
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(a) |
The Authorized Purchasers will issue one or more Purchase Orders in accordance with the approved Production Plan for Tesla’s anticipated needs as follows: (i) for Goods over a defined period of time, which may include defined periods of time as set forth in the Pricing Agreement (each such order is a “Production Order”); and/or (ii) for Goods, including development parts (each such order is a “Discrete Order”). |
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(b) |
Quantities referenced in any Production Order represent Tesla’s estimate of its anticipated needs for Goods during the timeframe referenced in such Production Order and are provided for Seller’s planning purposes only. Tesla’s liability for purchase of quantities referenced in such Production Orders is limited as set forth in Section 1.5 and elsewhere in this Amended GTC. By accepting a Production Order, Seller agrees it is willing and able to provide all quantities referenced in such Production Order during the period referenced therein. |
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(c) |
Authorized Purchasers may issue Releases against a Production Order to Seller, specifying quantities and delivery dates for Products referenced in such Purchase Order. Each Release may be issued on a rolling basis. Each Release is binding to the extent set forth in Section 1.5. Releases may be issued via an electronic data interface. |
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(d) |
Tesla intends to issue one or more Purchase Order(s) and/or Release(s) on a rolling basis [***]. Purchase Orders accepted by Seller are binding on Tesla to the extent set forth in Section 1.5. |
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(a) |
Purchase Orders. Seller shall accept or reject each Purchase Order as follows: (i) [***] after receipt of a Production Order which conforms to the Production Plan; and (ii) [***] after receipt of either a Discrete Order or a Production Order which does not conform to the Production Plan. If Seller cannot meet the terms set forth in a Purchase Order, Seller will inform Tesla and propose alternative terms. If Tesla accepts such alternative terms, Tesla shall issue a revised Purchase Order that includes such alternative terms. Alternative terms are expressly rejected unless incorporated into a Purchase Order. Notwithstanding the foregoing, Seller may only reject a Production Order to the extent it fails to conform to the terms of the Production Plan, and Seller shall be deemed to have waived any objections and accepted the Production Order if Seller fails to object in writing within the timeframe specified above. Seller’s acceptance of a Purchase Order is referred to as the “Acceptance”. |
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(b) |
Releases. Seller shall accept, and shall not reject, each Release to the extent it conforms to this Amended GTC and the Production Order. Seller will be deemed to have waived these objections and accepted a Release if (i) Seller fails to object to the Release in writing within two business days after receipt thereof, or (ii) automatically without a response if the Release is consistent with the then-current Production Plan. If Seller cannot deliver by the date(s) specified in the Release, Seller shall [***] propose a revised date that is at or before the Lead Time from the date of the Release. |
Certain identified information has been omitted from this document because it is not material and would be competitively harmful if publicly disclosed, and has been marked with “[***]” to indicated where omissions have been made.
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2. |
Goods. |
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(a) |
Seller shall not make any change to: (i) the Goods without Tesla’s prior written consent, which Tesla may withhold in its sole but reasonable discretion; (ii) its manufacturing process in a manner that could result in non-conforming or defective Goods or that could impact operations at the Factory of one or more other companies (i.e. Tesla and/or a co-located sub-supplier) without Tesla’s prior written consent, which Tesla will not unreasonably withhold; and (iii) its suppliers in a manner that could result in non-conforming or defective Goods or that could impact operations at the Factory of one or more other companies (i.e. Tesla and/or a co-located sub-supplier) without prior written notice to Tesla, provided that (A) Seller shall consider any objections by Tesla in good faith and discuss the proposed change with Tesla in good faith, and (B) Seller shall not make any such change that will, or is reasonably likely to, adversely affect any of the following with respect to the Goods: [***]. |
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(b) |
[***]. If [***], Seller shall use Commercially Reasonable Efforts to notify Tesla in writing within [***] after receipt of such request or proposal and prior to making the change if such change will affect cost or timing, and Seller shall also provide the basis for such determination. If Seller proposes a change hereunder, Tesla will [***]. Tesla and Seller will [***] in connection with any change, but [***] shall not [***] due to [***] unless Tesla [***]. For clarification, Seller is not obliged to make such change requested or proposed by Tesla unless [***]or other appropriate [***] in connection with such change is agreed between the Parties in writing. |
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2.3 |
[***]. Tesla may propose that Seller [***]. In such case, Seller will discuss with Tesla and consider such proposal in good faith. |
Certain identified information has been omitted from this document because it is not material and would be competitively harmful if publicly disclosed, and has been marked with “[***]” to indicated where omissions have been made.
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(a) |
In order to facilitate Seller’s performance of its obligations under the Contract, Tesla will perform those tasks and fulfill those responsibilities of Tesla (including, as applicable, provision of Tesla-Supplied Items) as expressly set forth in this Amended GTC and/or the Contract (“Tesla Responsibilities”). Seller’s performance of its obligations may be dependent in some circumstances on Tesla’s timely and effective performance of the Tesla Responsibilities and timely decisions and approvals by Tesla. |
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(b) |
Tesla's failure to perform any of the Tesla Responsibilities (or cause them to be performed) will not constitute grounds for termination by Seller except as provided in Section 13.3 (Termination); provided, however, that Seller’s nonperformance of its obligations under this Amended GTC and/or the Contract will be excused if and to the extent (i) such nonperformance results from Tesla’s failure to perform any Tesla Responsibilities, and (ii) Seller provides Tesla with reasonable notice of such nonperformance and, if requested by Tesla, uses Commercially Reasonable Efforts to perform notwithstanding Tesla’s failure to perform. If Seller’s use of Commercially Reasonable Efforts to perform its obligations in such a circumstance would cause Seller to incur significant uncompensated expenses, Seller may notify Tesla. In that case, Seller’s obligation to continue its efforts to work around Tesla’s failure to perform Tesla Responsibilities will be subject to Tesla agreeing to reimburse Seller for its actual, reasonable and incremental uncompensated expenses. The Parties shall also discuss in good faith Seller’s actual and reasonable out-of-pocket costs and expenses caused by Tesla’s failure to perform any Tesla Responsibility (e.g. loss of material, increased labor costs) and, subject to Section 12 (Liability), Tesla will be responsible for reimbursing such costs and expenses which Seller cannot mitigate or avoid using Commercially Reasonable Efforts. |
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(c) |
From time to time, Tesla may provide Seller with access to proprietary computer systems and technologies owned and operated by Tesla and/or its Affiliates (the “Systems”) to facilitate the performance of Seller’s obligations under the Contract. Seller is not obliged to use the Systems unless agreed by Seller in writing. Seller will only use the Systems for the business purposes of Tesla. Tesla may periodically monitor all uses of the Systems as allowed by law and review user access records maintained by Seller. To the maximum extent permitted by applicable Law, Seller’s users will have no expectation of privacy in connection with their use of the Systems. Seller shall be solely responsible for obtaining and maintaining the hardware and software it uses which are necessary to properly access the Systems and perform its obligations under the Contract. |
Certain identified information has been omitted from this document because it is not material and would be competitively harmful if publicly disclosed, and has been marked with “[***]” to indicated where omissions have been made.
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3.1 |
Packing and Shipment. Tesla may specify the method of transportation and the type and number of packing slips and other documents to be provided with each shipment. The Parties shall discuss in good faith and agree on the manner in which Seller will pack and ship Goods, including labeling and hazardous materials instructions. If Tesla has not provided packing or shipping instructions, Seller will pack and ship Goods in accordance with industry standards (with reference to the lithium-ion battery cell industry). If Seller is required to use Tesla’s returnable packaging, the Parties will discuss in good faith the responsibility for cleaning and maintaining such returnable packaging. |
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3.4 |
Over-Shipments. If Seller delivers more Goods than specified in an Order, the Parties shall discuss the over-shipment in good faith and Seller shall, at its sole discretion, either: (a) accept the return of the Goods delivered in excess of the Purchase Order or Release [***] (the “Excess Goods”), or (b) allow the Authorized Purchaser to retain the Excess Goods [***], in which case the Authorized Purchaser may also in its sole discretion reduce the quantities for future deliveries under the Production Plan and under its Purchase Order(s) and Release(s) by the quantity of Excess Goods. |
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4. |
Invoicing and Payment. |
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4.1 |
[***]. Except to the extent expressly otherwise agreed to by the Parties in a Pricing Agreement, Seller shall provide Tesla [***]. Such information shall be deemed to be Seller’s Highly Confidential Information under the NDA. |
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4.2 |
Pricing. The pricing and pricing methodology applicable to the Goods shall be set forth in the then-current Pricing Agreement. |
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4.3 |
Invoicing. Invoices will be in the currency specified in the Pricing Agreement, unless otherwise agreed, and will be sent to Tesla’s Accounts Payable Department as reasonably directed by Tesla. The invoice will detail the Goods for which payment is being requested, and the applicable Purchase Order number. Charges associated with shipping for which Tesla is responsible will be invoiced separately. |
Certain identified information has been omitted from this document because it is not material and would be competitively harmful if publicly disclosed, and has been marked with “[***]” to indicated where omissions have been made.
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4.5 |
[***]. If any Authorized Purchaser fails to pay undisputed amounts due in a timely manner which are in a material amount, Seller may give notice to Tesla and the Parties shall within a reasonable time discuss in good faith at a meeting with senior representatives of both Parties. If the Authorized Purchaser fails to pay promptly after the meeting, [***] until Tesla or the Authorized Purchaser pays the undisputed amounts in full which are past due. |
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(a) |
This Section 4.7 sets forth the allocation of responsibility between the Parties for taxes arising out of or in relation to this Amended GTC and each Contract. |
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(b) |
Unless otherwise stated in the Contract, including the then-current Pricing Agreement, the Contract price includes all applicable federal, state, provincial, and local taxes other than sales, value added, or similar turnover taxes or charges. The Goods purchased from Seller are for resale which is exempt from all sales, use, value added or similar taxes, and Seller will not charge sales, use, value added or similar taxes on its invoices to Tesla for Goods provided that Tesla has provided Seller a valid resale certificate for Seller’s records. If Seller is required by law to pay or collect from Tesla any taxes or charges, Seller will separately invoice Tesla for such taxes or charges subject to Section 4.6 (Credits). |
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(c) |
Subject to Section 4.8(b) above, each Party will remain responsible for and shall pay (without reimbursement) any and all taxes that are assessed on any goods or services used or consumed by such Party (or its Affiliates) in performing its obligations under the Contract where the tax is imposed on such Party’s (or its Affiliates’) acquisition or use of the goods or services in the performance of such obligations, and other personal property taxes on property owned or leased by such Party (or its Affiliates) unless otherwise expressly provided in the Contract. |
Certain identified information has been omitted from this document because it is not material and would be competitively harmful if publicly disclosed, and has been marked with “[***]” to indicated where omissions have been made.
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(e) |
The Parties agree to cooperate with each other to enable each to more accurately determine its own tax liability and to minimize such liability to the extent legally permissible. |
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a. |
“Nevada Incentives” means any tax credits or any exclusion, exemption, abatement, or reimbursement from tax liabilities as described in, collectively, Senate Bill No. 1 of the 28th (2014) Special Session of the Nevada Legislature (“SB No. 1”), Assembly Bill No. 1 of the 28th (2014) Special Session of the Nevada Legislature (“AB No. 1”), Nevada Revised Statutes (“NRS”) Chapters 231 and 360, Ordinance 14-260 of Storey County, Nevada referred to as the Economic Diversification District Creation Ordinance, the Incentive Agreement dated October 17, 2014, between the State of Nevada and Tesla, Inc. (the “State Incentive Agreement”), and the Reimbursement Agreement dated October 17, 2014, between Storey County, Nevada, and Tesla, Inc. (the “County Reimbursement Agreement”), and any and all Laws related to the foregoing. |
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b. |
Exhibit 2 (Nevada Incentives) sets forth the Parties’ understanding and agreement as to their respective responsibilities in qualifying for, and receiving the benefits of, the Nevada Incentives for purposes of the Gigafactory. If and to the extent that Tesla requests new or different type(s) of data than those described in Exhibit 2 for purposes of the Nevada Incentives, the Parties shall discuss such request in good faith and PNA will not unreasonably withhold, condition, or delay consent to such request. If and to the extent that PNA is required to provide information regarding the wages, salary, benefits, or other compensation offered to one or more specific PNA employees at an individual level (as opposed to an aggregated, summary report) for purposes of the Nevada Incentives, PNA shall only be required to disclose such specific information to the independent CPA engaged by Tesla for purposes of the Nevada Incentives and to disclose only an aggregated, summary report of such information to Tesla. |
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c. |
If and to the extent that a Party does not receive, or alternatively does not receive the benefit of, any Nevada Incentives to which it is entitled and such failure results from the other Party’s failure to comply with its obligations under Exhibit 2 (Nevada Incentives) (in Seller’s case such obligations are identified with “***”), the Parties shall work together in good faith to attempt to cure any deficiency in the requirements to qualify for such Nevada Incentives and, if the Parties are unable to cure such deficiency, the Parties shall discuss [***]. |
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5. |
Product Warranties. |
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(iii) |
Upon delivery and for a period of [***], the Goods will be free from defects in design, workmanship and material as delivered by or for Seller; |
Certain identified information has been omitted from this document because it is not material and would be competitively harmful if publicly disclosed, and has been marked with “[***]” to indicated where omissions have been made.
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(1) |
Recognizing the importance to mass market acceptance of EVs of ensuring that battery packs exhibit a [***], which may occur beyond standard warranty periods and beyond the specified cycle and storage life of the cell, the Parties’ cell technical teams shall work together in good faith to identify, and ensure that some specific aspects of cell performance related to [***] shall not unacceptably [***] throughout the [***] of the Cell. |
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(2) |
The [***] of the Cell shall be defined as the earliest of (a) [***] as set forth in the applicable Specification. |
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(3) |
Unless modified in the applicable Specification, the Parties agree that the following aspects of cell performance are important throughout the [***]: |
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(a) |
For Goods designed to include a [***], the [***] should function at a cell [***] equal to or less than the [***] operation upon delivery; |
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(b) |
The [***] pressure equal to or less than the [***] of [***] operation upon delivery; |
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(c) |
[***] should be equal to or less than the [***] upon delivery; |
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(d) |
If and to the extent that the Cell is [***] within the Specification: (a) the Cell should not lose [***] as measured by [***] testing conducted in accordance with [***]; and (b) at a [***] rate of [***], the [***] of the Cell should not [***] by [***] or more, where [***] is the [***] measured by Tesla through periodic sample testing of [***]; |
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(e) |
Cell(s) should not develop [***]; |
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(f) |
Cell(s) should not develop [***] that could result in measurable [***] and/or disconnection of [***]; and |
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(g) |
Additional aspects as may be described in the applicable Specifications. |
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(4) |
Should the Parties determine that a population of Cells in a particular Cell Model does not meet [***] requirements, the Parties’ cell technical teams shall work together in good faith to assess and mitigate the [***] including review of [***], conducting [***], and performing [***]. Mitigations may involve adjustment of [***], implementation of additional [***], or [***]. |
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(v) |
Recognizing the importance of limiting [***] among [***] Cells from [***], the Parties’ cell technical teams shall work together in good faith to [***] and Seller will use best efforts to avoid [***] that exceeds [***] observed in [***] with respect to [***], and other relevant factors. |
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(vi) |
The foregoing timeframes are, as applicable, the “Warranty Period”. |
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(b) |
Tesla hereby acknowledges and agrees that if Goods are not defective and/or comply with the applicable Specifications, it does not mean that a Tesla battery pack, Module and/or Tesla Product cannot be defective for some other reason, including, without limitation, improper design or manufacturing by Tesla or a third party. |
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(i) |
the design, manufacture and/or function of the overall system, equipment and/or goods of which the Goods are part (e.g. Module, Tesla Product); |
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(ii) |
accident or act of God; |
Certain identified information has been omitted from this document because it is not material and would be competitively harmful if publicly disclosed, and has been marked with “[***]” to indicated where omissions have been made.
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(iv) |
misuse, neglect, abuse, mishandling, misapplication, modification, or alteration by Tesla, the relevant Authorized Purchaser or any third party; |
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(v) |
improper installation, service, operation, storage, shipment, testing, checkout or maintenance by Tesla, the relevant Authorized Purchaser or any third party; |
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(vi) |
failure by Tesla, the relevant Authorized Purchaser or any third party to follow (A) the reasonable instructions, cautions, warnings, and notes set forth in the Specifications, and/or (B) any other reasonable direction from Seller; |
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(vii) |
[***]; |
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(viii) |
[***]. |
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(a) |
Notice. Tesla and the Authorized Purchaser(s) will give written notice to Seller of any claims that one or more Cells fail to conform to any warranty in Section 5.1 above (each such failure is a “Non-Conformity”). The date of such notice is referred to herein as the “Warranty Notice Date.” |
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(b) |
Supporting Information. If requested by Seller, the Authorized Purchaser will provide all available information regarding the alleged Non-Conformity in the Goods, which may include as applicable: [***] if available, but the inability to provide a serial number for certain Goods does not invalidate warranty coverage. Tesla will use Commercially Reasonable Efforts to achieve [***] of Cells through the applicable Tesla Products. If requested and where appropriate (as discussed by the Parties’ cell technical teams), Tesla shall [***] a reasonable quantity of [***] and relevant [***] from a [***] before delivering it to Seller. |
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(c) |
Warranty Claim Validation. |
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(i) |
Seller may require return of a reasonable quantity of Cells and/or inspect Cells which are subject to a warranty claim in order to validate the basis for such claim. Seller may decline warranty coverage for any Cells which are disassembled by Tesla or anyone acting on Tesla’s behalf if Seller has not consented to such disassembly. |
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(ii) |
Tesla shall use Commercially Reasonable Efforts to support Seller’s validation of the basis for a warranty claim hereunder, and the Parties shall discuss the warranty claim in good faith. |
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(iii) |
In the event of a disagreement or dispute as to the basis for a warranty claim with respect to Cells, the Parties will designate by mutual agreement a third party that will make the technical determination of the existence of a basis for the warranty claim and whether such claim is based on a breach of one or more warranties in Section 5.1 above. |
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(iv) |
Cell(s) will be a “Non-Conforming Item(s)” if and to the extent that the Cell(s) fail to conform to one or more applicable warranties. Tesla and Seller will work together in good faith to evaluate, [***], whether the Cell(s) meet all applicable warranties. If the results if any such evaluation are inconclusive, the Parties shall [***]. |
Certain identified information has been omitted from this document because it is not material and would be competitively harmful if publicly disclosed, and has been marked with “[***]” to indicated where omissions have been made.
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(i) |
For Cells which have [***] and are subject to a claim under one or more of the warranties in Section 5.1 above, Seller will provide [***] for each such Cell and [***] of the Non-Conforming Item and for [***] of the replacement Cell. |
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(ii) |
For Cells which have [***] and do not meet one or more of the warranties in Sections 5.1(a)(i), 5.1(a)(ii), or 5.1(a)(iii) above: |
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(1) |
For [***] Cells: Seller will promptly pay Tesla an amount equal to [***] (collectively, the “Warranty Costs”); and |
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(2) |
For [***] Cells: for each Good, provide [***]. |
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(iii) |
For Cells which have [***] and do not meet one or more of the warranties in Sections 5.1(a)(i), 5.1(a)(ii), or 5.1(a)(iii) above: |
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(1) |
For [***] Cells: Seller will promptly pay Tesla an amount equal to [***] to compensate Tesla for the corresponding Warranty Costs; and |
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(2) |
For [***] Cells: for each Good which has a Non-Conformity, [***]. |
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(iv) |
Notwithstanding the foregoing, if and to the extent that Warranty Costs pertain to [***], Seller’s financial responsibility shall be [***]. The Parties’ technical teams shall discuss in good faith any such circumstances and evaluate the extent to which damages pertaining to [***]. |
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(v) |
Notwithstanding the foregoing, if and to the extent that Warranty Costs pertain to a [***] issue as contemplated in Section 5.1(a)(iv) above, the remedies contemplated in this Section 5.3(d) shall apply but Seller’s financial responsibility shall be [***] as agreed by the Parties following a good faith discussion. |
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(vi) |
The payments and remedies contemplated above in this Section 5.3(d) with respect to [***] Cells shall – subject to Section 7 (Indemnification) below with respect to Claims by an unaffiliated third party, and any available equitable remedies – be Tesla’s sole remedy for each corresponding warranty claim hereunder. |
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(vii) |
The payments and remedies contemplated above in this Section 5.3(d) shall be subject to [***] in Section 12.1(b) below. |
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(e) |
Destruction, Recycling. If Seller instructs Tesla in writing to destroy and/or recycle any Cells which are subject to a warranty claim hereunder (whether or not such claim is valid) and except as expressly agreed otherwise in writing by both Parties (e.g. in a signed agreement), Seller [***]. |
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(i) |
In addition to complying with its other obligations hereunder (including Sections 5.8 (Corrective Actions) and 5.3(d) (Remedies) above), Seller will also be liable for, and will reimburse Tesla for, [***] to the extent: |
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(1) |
[***]; or |
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(2) |
[***]. |
Certain identified information has been omitted from this document because it is not material and would be competitively harmful if publicly disclosed, and has been marked with “[***]” to indicated where omissions have been made.
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5.4 |
Future Performance. All representations and warranties of Seller extend to future performance of the Goods during the Warranty Period and are not modified, waived or discharged by delivery, inspection, tests, acceptance or payment. Tesla's approval of any design, drawing, material, process or specifications in good faith will not relieve Seller of these representations and warranties. The warranties set forth in this Section 5 shall survive acceptance and payment by Tesla and the termination or expiration of the Contract. |
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5.6 |
Disclaimer. THE WARRANTIES SET FORTH IN THIS Amended GTC ARE EXCLUSIVE AND ARE IN LIEU OF ALL OTHER WARRANTIES WITH RESPECT TO THE GOODS, WHETHER ARISING FROM A COURSE OF DEALING, COURSE OF PERFORMANCE OR TRADE USAGE, OR WHETHER ORAL, WRITTEN, EXPRESS, IMPLIED OR STATUTORY, ALL OF WHICH ARE HEREBY WAIVED BY TESLA, AUTHORIZED PURCHASERS AND SELLER. THE EMPLOYEES AND AGENTS OF EACH PARTY ARE NOT AUTHORIZED TO MAKE MODIFICATIONS TO SUCH WARRANTIES, OR ADDITIONAL WARRANTIES BINDING ON SUCH PARTY; ACCORDINGLY, ADDITIONAL STATEMENTS, WHETHER ORAL OR WRITTEN, DO NOT CONSTITUTE WARRANTIES AND SHOULD NOT BE RELIED UPON BY THE OTHER PARTY. FOR THE AVOIDANCE OF DOUBT, TESLA UNDERSTANDS THAT THE GOODS [***] (I) [***], (II) [***], OR (III) [***]. NO ACTION, SUIT OR ARBITRATION SHALL BE BROUGHT ON AN ALLEGED BREACH OF THE WARRANTIES SET FORTH IN THIS Amended GTC MORE THAN [***] FOLLOWING THE EXPIRATION OF THE APPLICABLE WARRANTY PERIOD. |
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5.7 |
Quality Plan Requirements and Approval. |
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(a) |
Seller will: (i) manufacture and supply Goods in accordance with a mutually-agreed quality plan (“Quality Plan”) which is developed during the design development process, during the Production Part Approval Process (PPAP), and/or as listed in the applicable Specifications; and (ii) provide, maintain and enforce in accordance with the Quality Requirements industry-standard measures necessary to secure the quality of Goods and the manufacturing processes thereof, including without limitation, quality control standards, inspection standards and specifications. Only after the Quality Plan for the Goods is approved by Tesla shall the Goods be allowed to be shipped for use in Tesla Products. Seller shall submit a mutually-agreed quantity of samples of a standard production run of Goods to Tesla per a mutually-agreed Quality Plan. The responsibility for the cost and expense of such samples will be determined by the mutual agreement between the Parties. |
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(b) |
As part of the Quality Plan and during PPAP, the Parties intend to include [***] in the Specification for each Good as related to [***]. |
Certain identified information has been omitted from this document because it is not material and would be competitively harmful if publicly disclosed, and has been marked with “[***]” to indicated where omissions have been made.
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(d) |
Seller agrees that the Goods shall conform to the Quality Requirements attached hereto as Exhibit 1. |
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6.2 |
Operations. Seller represents and warrants as follows: (a) if and to the extent relevant to the Contract and applicable to Seller, comply with all of the following: industry-standard and/or mutually-agreed supplier quality and development process program requirements, quality control and safety standards, and procedures and inspection systems, including Exhibit 1, the Global Automotive Declarable Substance List (“GADSL”), and as applicable EU Directives 2002/95/EC (Restriction on Hazardous Substances or “RoHS”) and 2006/66/EC (re: batteries and accumulators and waste batteries and accumulators), as each may be amended from time to time; (b) Seller will provide an accurate and complete International Material Data System (“IMDS”) submission for each non-prototype Good; (c) Seller will provide all information reasonably required for Tesla to comply with its legal obligations, such as the California Transparency in Supply Chains Act of 2010 and (if and to the extent applicable to the Goods) Section 1502 of the Dodd-Frank Wall Street Reform and Consumer Protection Act (commonly referred to as the conflict minerals provision), as each may be amended from time to time; and (d) Seller will comply with the Tesla Supplier Code of Conduct which is available at https://www.tesla.com/sites/default/files/about/legal/tesla-supplier-code-of-conduct.pdf and the Tesla Human Rights And Conflict Minerals Policy which is available at https://www.tesla.com/about/legal#human-rights-and-conflict-minerals-policy (the foregoing two policies are referred to, collectively, as “Tesla’s Conduct Policies”). Tesla shall notify Seller at least [***] in advance of any material changes to Tesla’s Conduct Policies, unless more notice is reasonably necessary in order for Seller to comply with any such change in Tesla’s Conduct Policies. Upon request by Tesla, Seller shall provide evidence of its compliance with each of the foregoing and as reasonably requested by Tesla for purposes of Tesla’s compliance with its legal obligations. |
Certain identified information has been omitted from this document because it is not material and would be competitively harmful if publicly disclosed, and has been marked with “[***]” to indicated where omissions have been made.
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(a) |
Each Party represents and warrants that it will, at its cost and expense, obtain all necessary regulatory approvals, licenses, and permits (collectively, “Permits”) applicable to its business and comply with all Laws applicable to its business or the performance of its obligations under this Amended GTC and each Contract, as such Laws may be revised from time to time. Seller will provide Tesla with accurate material safety data sheets regarding the Goods and, if requested by Tesla, submit to Tesla evidence of such compliance. Each Party will also provide the other Party with all information reasonably required in order for the other Party to comply with Laws applicable to it. |
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(b) |
To the extent not prohibited by Law, each Party represents and warrants that it will promptly notify the other Party in writing of any investigation or inquiry into whether such Party (or any of its subcontractors) is charged with failing to comply with any Laws that may or will impact, or are otherwise applicable to, such Party’s performance under this Amended GTC and/or the Contract. |
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(c) |
Seller represents and warrants that it will comply with any Tesla policies, standards, rules, and procedures (collectively, “Tesla Policies”) applicable to performance of Seller’s obligations under the Contract and/or to the Factory which are disclosed to Seller in writing and approved by Seller, as such Tesla Policies may be revised from time to time subject to Seller’s approval, and Seller shall not unreasonably withhold, condition, or delay its approval for any such Tesla Policy or any changes thereto. |
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(a) |
During the Term, Seller represents and warrants as follows: |
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(i) |
Seller and each of its Affiliates relevant to or involved in the performance of obligations hereunder shall not be debarred, suspended, excluded or disqualified from doing business with the United States Government or listed on the Excluded Parties List System maintained by the General Services Administration of the United States Government (found at www.epls.gov); |
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(ii) |
Seller and, unless Seller is a listed entity in a stock exchange market in the US or Japan (or any country with similar listing requirements), each person or entity owning an interest in Seller shall not be at any time during the term of the Contract, and each has never been, a Person with which U.S. Persons are prohibited from transacting business of the type contemplated by the Contract or with which U.S. Persons must either limit their interactions to types approved by the Office of Foreign Assets Control, Department of the Treasury (“OFAC”), whether by Law, executive order, trade embargo, economic sanction, lists published by OFAC, or otherwise (such Persons are “Specially Designated Nationals and Blocked Persons”); |
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(iii) |
none of the funds or other assets of Seller constitute property of, or are beneficially owned, directly or indirectly, by any Embargoed Person to Seller’s knowledge based on reasonable due diligence; |
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(iv) |
unless Seller is a listed entity in a stock exchange market in the US or Japan (or any country with similar listing requirements), no Embargoed Person has any interest of any nature, direct or indirect, in Seller to Seller’s knowledge based on reasonable due diligence; |
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(v) |
none of the funds of Seller have been derived from any unlawful activity with the result that either business with Seller is prohibited by Law or the Contract is in violation of Law; |
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(vi) |
Seller has implemented procedures, and will consistently apply those procedures, to ensure, using best efforts, the foregoing representations and warranties remain true and correct at all times; |
Certain identified information has been omitted from this document because it is not material and would be competitively harmful if publicly disclosed, and has been marked with “[***]” to indicated where omissions have been made.
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(viii) |
Seller: (i) to its knowledge (based on reasonable due diligence) is not under investigation by any governmental authority for, nor has it been charged with, or convicted of, money laundering, drug trafficking, terrorist-related activities, any crimes which in the United States would be predicate crimes to money laundering, or any violation of any Anti-Money Laundering Laws; (ii) has not been assessed civil or criminal penalties under any Anti-Money Laundering Laws; or (iii) has not had any of its funds seized or forfeited in any action under any Anti Money Laundering Laws. |
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(b) |
Seller agrees to immediately notify Tesla in writing in the event Seller breaches any of the preceding representations and warranties or has reason to believe that it will become in breach of any of the preceding representations and warranties. |
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(c) |
A breach of any representation or warranty under this Section shall be deemed a Default under the Contract for which Tesla may immediately terminate the Contract without being required to provide notice or permit Seller to cure such Default. |
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(a) |
Seller agrees to indemnify, defend and hold harmless Tesla, its Affiliates, and their respective directors, officers, employers and agents (collectively “Tesla Indemnitees”) from and against any and all costs, fees, penalties, expenses, third-party damages, attorneys' fees and all other liabilities to any third party whatsoever (“Losses”), arising out of any Claim against any Tesla Indemnitee which arises from or relates to any actual or alleged: |
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(1) |
the foregoing obligation shall not apply to the extent that: (A) Tesla was aware of or, in the exercise of reasonable care, should have been aware of the existence of such defect and/or non-conformity; (B) the Losses were caused by the Tesla Products, including but not limited to Tesla’s battery packs, Modules (including circuit and equipment matching issues), and their respective assembly, manufacture or placement, sale, use, operation, storage, and/or transportation; and/or (C) the Losses were caused by [***] if (y) such [***] was caused by [***]; or (z) such [***] occurred more than [***] after the delivery of such affected Goods to the Authorized Purchaser; and |
Certain identified information has been omitted from this document because it is not material and would be competitively harmful if publicly disclosed, and has been marked with “[***]” to indicated where omissions have been made.
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(2) |
to the extent permitted by Law, the liabilities of Seller pursuant to this Section 7.1(a)(iii) will not [***]. |
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7.2 |
Indemnification by Tesla. |
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(a) |
Tesla agrees to indemnify, defend and hold harmless Seller, its Affiliates, and their respective directors, officers, employers and agents (collectively “Seller Indemnitees”) from and against any and all Losses arising out of any Claim against any Seller Indemnitee which arises from or relates to any actual or alleged: |
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(i) |
infringement of any Intellectual Property Right to the extent caused by Tesla Products and/or Modules in which the Goods are used; |
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(b) |
[***]. |
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(c) |
Tesla agrees to indemnify and hold harmless the Seller Indemnitees from and against any and all Losses arising out of any Claim against any Seller Indemnitee which arises from or relates to any breach of Section 6.3(a) (Compliance with Laws), subject to [***]. |
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(d) |
In the event of a Claim that arises from or relates to [***] in a Tesla Product (an “[***] Claim”), the Parties agree as follows: |
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(i) |
The Parties shall discuss and evaluate the [***] Claim in good faith. |
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(ii) |
After such good faith discussion, if and to the extent that the Parties agree that (i) the Losses arising out of the [***] Claim [***] and (ii) the Losses arise from either (a) [***], or (b) [***], then Tesla will indemnify, defend, and hold harmless the Seller Indemnitees from and against such Losses. |
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(iii) |
The obligation in this Section 7.2(d) applies only to the extent permitted by Law and is subject to [***]. |
Certain identified information has been omitted from this document because it is not material and would be competitively harmful if publicly disclosed, and has been marked with “[***]” to indicated where omissions have been made.
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If the Claim is one that cannot by its nature be defended solely by the indemnifying Party, then the indemnified Party will make available information and assistance as the indemnifying Party may reasonably request, at the indemnifying Party’s expense. The indemnifying Party may not, without the prior written consent of the indemnified Party, (i) consent to the entry of any judgment or enter into any settlement that provides for injunctive or other non-monetary relief affecting any indemnified Party, or (ii) consent to the entry of any judgment or enter into any settlement unless such judgment or settlement provides for an unconditional and full release of the indemnified Party and does not diminish any of such Party’s rights under this Amended GTC and/or the Contract or result in additional fees or charges to the indemnified Party. The indemnified Party may not make any party admissions in respect of a Claim if the indemnifying Party elects to control the defense of the Claim. For avoidance of doubt, the indemnifying Party may invoke any applicable statutes of limitations in conducting the defense of any such Claim. |
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7.4 |
Limitations. To the maximum extent permitted by applicable law and subject to [***] (as applicable), the Parties’ respective obligations under this Section 7 will apply even if an Indemnified Party’s conduct has contributed to the Losses, but the obligation to indemnify will not apply to the extent that Losses were caused by such Indemnified Party. Each Party’s obligation to defend and indemnify under this Section 7 will also apply regardless of whether the Claim arises in tort, negligence, contract, warranty, strict liability or otherwise. |
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8. |
Confidentiality. The non-disclosure agreement between the Parties dated January 1, 2017 (“NDA”) sets forth the Parties’ respective confidentiality obligations hereunder. The NDA is hereby incorporated by reference in this Amended GTC and the Contract, and the terms and conditions of the NDA will continue in force throughout the Term. |
Certain identified information has been omitted from this document because it is not material and would be competitively harmful if publicly disclosed, and has been marked with “[***]” to indicated where omissions have been made.
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(b) |
Seller will have no interest in Tesla Property paid for by Tesla except as an at-will bailee. To the extent permitted by law, Seller waives any lien or similar right it may have with respect to Tesla Property. Tesla is responsible for personal property taxes assessed against Tesla Property. |
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9.2 |
Operations and Maintenance. Seller will: (a) ) subject to Section 1.1(b) above, [***], procure, transport, install and configure at the Factory the Seller’s Property as reasonably required to deliver Goods in accordance with the Contract and the Production Plan (e.g., as required for [***]; (b) [***] maintain all Seller’s Property used by Seller in good condition and repair, normal wear and tear excepted; (c) furnish, maintain in good condition, replace and improve all Seller’s Property reasonably required to deliver Goods in accordance with the Contract and the Production Plan; and (d) at Tesla’s request and expense, mark Tesla Property as belonging to Tesla. Further, (e) all replacement parts, additions, improvements, and accessories to Tesla Tooling will become part of Tesla Tooling; and (f) Tesla will, [***], be responsible for procuring, maintaining in good condition, replacing and improving all Tesla Property which Tesla is expressly required to provide hereunder as a Tesla Responsibility, if any, in order to enable Seller to perform its obligations under the Contract and the Production Plan. |
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9.3 |
Tesla’s Rights of Possession, Equitable Relief. Tesla has the right to the sole, unencumbered, unqualified, and absolute possession of Tesla Property at any time, as elected by Tesla and Seller will [***] release to Tesla upon request, and Tesla may retake immediate possession of Tesla Property at any time with or without cause and without payment of any kind unless otherwise provided in the Contract. Tesla will be responsible for transportation costs with respect to Tesla Property. |
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9.4 |
Waiver of Liens. As a continuing condition of Seller’s possession or use of Tesla Property, Seller shall ensure that no third party obtains any lien or other right in Tesla Property and hereby waives and relinquishes, and agrees to obtain from any third parties who might claim any such lien (including without limitation mechanic’s liens) or right, their written waiver and relinquishment of all rights, if any, to any lien or other right of retention whatsoever with respect to Tesla Property. |
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10.1 |
Covenant Not to Sue. Seller and its Affiliates covenant not to bring, assist others in bringing, or otherwise assert against Tesla and/or its Affiliates, and their respective successors and assigns, any claim for infringement of any of Seller’s and/or any of its Affiliates’ Intellectual Property Right incorporated in the Goods arising from any of the following: [***]. For the avoidance of doubt, the foregoing covenant extends to any application of one or more Goods if, at the time of sale of one or more Good(s) to Tesla, (a) Seller knows that Tesla and/or its Affiliates plans to use such Good(s) in such application or (b) the application by Tesla and/or its Affiliates is publicly available and/or disclosed. |
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10.2 |
Independent Efforts and Similar Goods. Provided there is no infringement of the other Party’s Intellectual Property Rights, nothing in this Amended GTC or the Contract will impair either Party’s right to develop, manufacture, purchase, use, sell or market, directly or indirectly, alone or with others, products or services competitive with those offered by the other Party. |
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10.3 |
No Implied Rights. Except for the rights expressly transferred in this Amended GTC or the Contract, nothing therein will operate to transfer any interest in Intellectual Property Rights by implication, estoppel or otherwise. |
Certain identified information has been omitted from this document because it is not material and would be competitively harmful if publicly disclosed, and has been marked with “[***]” to indicated where omissions have been made.
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(a) |
Responsibility for Seller Personnel. Seller will manage, supervise and provide direction to Seller Personnel and cause them to comply with the obligations and restrictions applicable to Seller under these Amended GTC and/or Contract. Each Party is responsible for the acts and omissions of its own personnel under or relating to these Amended GTC and/or the Contract. Seller is responsible for validating the identity of and ensuring that Seller Personnel assigned to perform work hereunder (i) have the legal right to work in the country(ies) in which they are assigned to work, and (ii) conform to all reasonable and applicable Tesla Policies disclosed to Seller and approved by Seller (such approval not to be unreasonably withheld, conditioned or delayed) with respect to personal and professional conduct at the Factory (including adherence to general safety, behavior, and security practices). From time to time, the Parties may also, in conjunction with the Production Meeting, consult in good faith regarding staffing requirements for Seller Personnel at the Factory. |
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(b) |
Background Checks. Prior to assigning any Seller Personnel to work at the Factory, Seller shall perform a background check of each person or, in the case of employees or agents of a subcontractor, Seller shall cause the subcontractor to conduct such a background check. Such background checks may have been performed as part of Seller’s standard pre-employment screening process and will include the following, at a minimum but only to the extent permitted by applicable Law: (i) social security verification (for US employees); and (ii) felony and misdemeanor criminal checks. To the extent permitted by applicable Law, Tesla may require Seller to provide written evidence of the background checks on Seller Personnel at any time. Unless prohibited by Law, neither Party may assign any person to perform work at the Factory who was convicted of any criminal offense involving dishonesty, a breach of trust, money laundering, or who has been convicted of a felony crime within the last seven years without the other Party’s prior written consent. |
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11.3 |
Extension of Lease. Following expiration or termination of the Amended GTC, Seller shall be entitled to extend the duration of the Factory Lease as follows: |
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(a) |
If Tesla terminates this Amended GTC for Seller’s Default or the Factory Lease for Tenant’s Lease Default, Seller may continue its lease rights [***]. Seller shall [***] and Seller shall [***]. |
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(c) |
If Seller terminates this Amended GTC for Tesla’s Default or the Factory Lease for Tesla’s Lease Default, Seller may: (i) elect to continue its lease rights for the [***] without [***] and Seller may [***] and, if applicable, [***]; and (ii) [***]. |
Certain identified information has been omitted from this document because it is not material and would be competitively harmful if publicly disclosed, and has been marked with “[***]” to indicated where omissions have been made.
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(a) |
Except as provided in Section 12.1(e), Tesla’s liability to Seller under this Amended GTC and all Contracts (including termination, expiration or cancellation) shall not exceed the following: |
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(i) |
with respect to each investment by or for Seller in Seller’s Property as contemplated in Section 1.1(b) above and in the then-current Pricing Agreement, the [***] pursuant to this Amended GTC and the then-current Pricing Agreement; |
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(ii) |
with respect to Goods or other items delivered by Seller pursuant to a Contract, [***] in accordance with the applicable Contract; |
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(iii) |
with respect to amounts for which Tesla is expressly responsible pursuant to this Amended GTC – including Sections 2.4 (Tesla Responsibilities), 11.3 (Extension of Lease), and 13.4 (Obligations Upon Termination) if and to the extent applicable – and/or other relevant agreements between the Parties in connection with this Amended GTC (e.g., Factory Lease) if and to the extent applicable, the [***]; |
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(iv) |
with respect to Claims which are [***]; and |
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(v) |
for other damages which are recoverable pursuant to this Amended GTC and/or a Contract due to one or more events giving rise to liability in a rolling period of [***]. |
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(i) |
costs and expenses for which a Party is expressly responsible under this Amended GTC or a Contract, including costs and expenses related to [***] and Tesla’s obligations to pay [***] paid by Seller [***]; |
Certain identified information has been omitted from this document because it is not material and would be competitively harmful if publicly disclosed, and has been marked with “[***]” to indicated where omissions have been made.
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(ii) |
the actual and reasonable damages, losses, costs and expenses incurred by Tesla as a direct result of Seller’s Default pursuant to Section 3.3 (Time is of the Essence); |
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(iii) |
actual and reasonable damages, losses, costs and expenses incurred by Tesla as contemplated in [***]; |
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(iv) |
payments, fines, penalties or interest imposed by a governmental body or regulatory entity, to the extent caused by the other Party, the other Party’s Affiliates, or their respective agents and subcontractors; |
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(v) |
actual and reasonable damages, losses, costs and expenses as a direct result of Seller’s failure to comply with its obligations under [***], but only to the extent that [***]; |
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(vi) |
amounts for which a Party is expressly responsible pursuant to this Amended GTC (including Sections 2.4 (Tesla Responsibilities), 11.3 (Extension of Lease), and 13.4 (Obligations Upon Termination)), the then-current Pricing Agreement, the Factory Lease, and/or each Contract; |
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(vii) |
damages in tort attributable to the “simple” or “ordinary” negligence of a Party, its employees and/or agents in a manner related to this Amended GTC, a Contract and/or the Factory; |
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(viii) |
actual and reasonable costs and expenses [***], to the extent caused by the other Party, its employees and/or agents or, if [***] using Commercially Reasonable Efforts, damages in an amount equal [***]; |
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(ix) |
actual and reasonable damages for personal injury, illness and/or death with respect to a Party’s employees or agents to the extent caused by the other Party’s failure to maintain adequate health and safety conditions at the Factory; |
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(x) |
actual and reasonable damages and liability incurred by a Party with respect to environmental conditions or issues (including actual and reasonable costs of remediation, if applicable), either (A) to the extent caused by the other Party and/or (B) to the extent such conditions or issues are the legal responsibility of the other Party; and |
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(xi) |
subject to Section 12.1(a)(v) above, the actual and reasonable damages, losses, costs and expenses explicitly described in Section 2.5(b) above and incurred by Seller as a direct result of Tesla’s Default pursuant to Section 2.5(b) ([***]). |
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(g) |
Each Party shall use Commercially Reasonable Efforts to mitigate the damages incurred in connection with any breach by the other Party. |
Certain identified information has been omitted from this document because it is not material and would be competitively harmful if publicly disclosed, and has been marked with “[***]” to indicated where omissions have been made.
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13.2 |
Termination, Generally. This Amended GTC and the Contract may only be terminated as provided in this Section 13 (Term and Termination). Termination by a Party will be without prejudice to any other rights and remedies available to a Party. Neither Party will be obliged to pay any termination charges or demobilization fees to the other Party in connection with any termination, except as may be expressly set forth in this Amended GTC and/or the applicable Contract. |
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(ii) |
transfer title and deliver to Tesla all finished Goods completed prior to the termination date pursuant to a Purchase Order or Release, provided that Seller may in its sole but reasonable discretion change the payment terms for such Goods if Seller has terminated for Tesla’s Default; |
Certain identified information has been omitted from this document because it is not material and would be competitively harmful if publicly disclosed, and has been marked with “[***]” to indicated where omissions have been made.
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(v) |
upon termination of the Factory Lease, comply with the obligations described in the Factory Lease and in Section 11.3 above with respect to [***]; and |
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(vi) |
in case of Tesla’s termination for Seller’s Default and if requested by Tesla, but subject to Seller's actual capacity, labor constraints and supply chain constraints, issue a final Purchase Order for a quantity of Goods at volumes not in excess of [***] of purchases by Tesla over [***] preceding termination and on the [***], and Seller shall not reject such Purchase Order. |
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(b) |
Tesla will, after exercising any setoff rights permitted by Law, pay to Seller the following amounts, without duplication and in accordance with the then-current payment terms between Tesla and Seller: |
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(i) |
The purchase price for all conforming Goods received by Tesla prior to the termination date or delivered following the termination date pursuant to this Section 13.4; |
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(ii) |
[***], unless Tesla has terminated for either (A) Seller’s Default or (B) a Change of Control Event with respect to Seller; and |
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(iii) |
[***] paid by Seller for [***] at the Factory for which [***]; provided, however, that Tesla shall not have any obligation to [***] such amounts if Tesla terminates (A) for Seller’s Default, (B) as permitted under Section 12.2 (Force Majeure) (unless expressly agreed otherwise in writing by Tesla pursuant to the good faith negotiation contemplated in Section 11.3(b) above), or (C) for a Change of Control Event with respect to Seller; and |
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(iv) |
Any costs and/or expenses that Tesla is obligated to pay pursuant to Section 11.3 (Extension of Lease). |
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(c) |
Notwithstanding any other provisions herein to the contrary but subject to Section 12 (Liability), in case of a Party’s termination due to Change of Control with respect to the other Party, the Party exercising such termination right shall be entitled to recover a termination charge equal to the following: (i) in [***] of the Term, one billion, five hundred million dollars ($1.5 billion USD; (ii) in [***] of the Term, one billion ($1.0 billion USD); and (iii) thereafter during the Term, seven-hundred fifty million dollars ($750 million USD). |
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14. |
Insurance. During the Term of this Amended GTC, Seller shall obtain and maintain at its own cost and expense (and shall cause each subcontractor to maintain) policies for the types and amounts of insurance that are required under applicable Law. |
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15. |
Dispute Resolution. |
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15.1 |
Governing Law. This Amended GTC and each Contract will be interpreted and construed in accordance with the substantive Laws of California and the United States generally applicable therein, without regard to any provisions of its choice of law rules that would result in a different outcome. The UN Convention on Contracts for the International Sale of Goods will not apply to the Contract. |
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15.2 |
Informal Dispute Resolution. In the event any disputes, differences or controversies arise between the Parties, out of or in relation to or in connection with the provisions of this Amended GTC and/or the Contract, the Parties shall thoroughly explore all possibilities for an amicable settlement. |
Certain identified information has been omitted from this document because it is not material and would be competitively harmful if publicly disclosed, and has been marked with “[***]” to indicated where omissions have been made.
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appointed in accordance with the JAMS rules. The arbitrator shall be experienced in agreements for capital equipment. Any demand for arbitration and any counterclaim will specify in reasonable detail the facts and legal grounds forming the basis for the claimant’s request for relief and will include a statement of the total amount of damages claimed, if any, and any other remedy sought by the claimant. The arbitration will be conducted in the English language in San Francisco, California. Each Party will bear its own expenses in the arbitration and will share equally the costs of the arbitration; provided, however, that the arbitrator may, in their discretion, award reasonable costs and fees to the prevailing Party. The arbitrator will have full power and authority to determine issues of arbitrability and to interpret or construe the applicable provisions of the Contract and/or this Amended GTC and to fashion appropriate remedies for breaches of the Contract and/or this Amended GTC (including interim or permanent injunctive relief); provided that the arbitrator will not have any right or authority: (i) in excess of the authority of a court having jurisdiction over the Parties and the dispute would have absent this arbitration agreement; (ii) to award damages in excess of the types and limitation of damages found in the Contract and/or this Amended GTC; or (iii) to modify the terms of either the Contract or this Amended GTC. The award of the arbitrator will be issued within thirty (30) days of the completion of the hearing, shall be in writing, and shall state the reasoning on which the award is based. Judgment upon the award rendered in the arbitration may be entered in any court of competent jurisdiction. Each Party will have the right to apply at any time to a judicial authority for appropriate injunctive relief (or other interim or conservatory measures), and by doing so will not be deemed to have breached its agreement to arbitrate or to have impaired the powers reserved to the arbitrator. The Parties further consent to the jurisdiction of any state or federal court with subject matter jurisdiction located within a district that encompasses assets of a Party against whom a judgment (or award) has been rendered for the enforcement of the judgment (or award) against the assets of such Party. |
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15.4 |
Continued Performance. Each Party agrees to continue performing its obligations under this Amended GTC and each Contract while a dispute is being resolved unless and until such obligations are terminated by the termination or expiration thereof. |
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16. |
Miscellaneous. |
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(a) |
Without prior written consent of the other Party, neither Party may assign this Amended GTC or any Contract or subcontract or delegate the performance of its duties thereunder, and any attempt to do so shall be void; provided, however, that (i) each Party may, without requiring the other Party’s consent or meeting any other condition, add an Affiliate which operates in the Factory as a co-party to this Amended GTC and/or any Contract, and (ii) Tesla may, upon the written notice to Seller, assign any or all of its rights, benefits or remedies under any Contract to an Affiliate which assumes all of Tesla’s obligations under the Contract, provided that Tesla remains responsible for (1) payment if the Affiliate fails to pay in accordance with the Contract, (2) performance of Tesla Responsibilities applicable to the Contract, if any, if the Affiliate fails to perform such Tesla Responsibilities and (3) Tesla’s indemnification obligations provided in Section 7.2. |
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(b) |
If Seller intends that all or part of the manufacture of Goods will be subcontracted to a third-party subcontractor, Seller will: (i) be solely responsible for payments to the subcontractor; (ii) include in its purchase order or any other contract with the subcontractor a waiver of subcontractor liens to the maximum extent permitted by applicable law; (iii) before permitting any subcontractor to use Tesla Property and/or access the Facility, obtain Tesla’s prior written consent; (iv) provide notice to Tesla at each Production Meeting of [***]; and (v) [***] in connection with this Amended GTC and/or a Contract as reasonably requested by Tesla within a reasonable time after receipt of Tesla’s notice and following a good faith discussion. Tesla has no obligation with respect to Seller’s subcontractor other than payment to Seller of the agreed price of the conforming Goods delivered to Authorized Purchasers pursuant to their Purchase Order(s) accepted by Seller except as provided in [***]. |
Certain identified information has been omitted from this document because it is not material and would be competitively harmful if publicly disclosed, and has been marked with “[***]” to indicated where omissions have been made.
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(d) |
In the event of a Change of Control Event affecting a Party, the person or entity which acquires Control of the Party shall be subject to the terms and conditions of, and shall assume all of the acquired Party’s obligations under, this Amended GTC and the affected Contract(s). |
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(e) |
This Amended GTC and all Contract(s) shall be binding upon the respective successors and permitted assigns of the Parties. |
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16.2 |
Audit and Inspection. Tesla and its authorized representatives shall have the right with reasonable prior written notice from time to time to access Seller’s leased areas approved by Seller (such approval will not be unreasonably withheld by Seller) and, subject to the NDA, verify Seller’s compliance with the terms of this Amended GTC and the Contract. Seller will maintain records as reasonably necessary to demonstrate Seller’s compliance with the terms of this Amended GTC, the Pricing Agreement, and the Contract, including showing that amounts charged to Tesla are true and correct. Such audit will be made at the agreed date and the normal business hour of Seller at the Factory. Tesla and its representatives may audit Seller’s records made within [***] prior to the audit date, to the extent needed to verify compliance with this Amended GTC, the Pricing Agreement, and the Contract, and Seller will make such records available to Tesla and its auditors for examination and copying upon their reasonable request; provided that Seller is not obliged to make available any technical or engineering confidential records, data and/or information owned or controlled by Seller without the prior written agreement between the Parties. Any audit will be conducted at Tesla’s expense. Notwithstanding the foregoing and unless approved otherwise by Seller, any audit of Seller’s compliance with [***] shall be conducted solely by an authorized third-party representative of Tesla which is bound not to disclose to Tesla the specific [***]. |
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16.3 |
Conflicts. In the event of a conflict between or among the documents comprising this Amended GTC and/or a Contract, the following order of precedence will apply (documents listed in descending order of priority): (a) any written agreement signed by authorized representatives of the Parties expressly amending this Amended GTC and/or a Contract Document; (b) a Pricing Agreement signed by the Parties; (c) the applicable Purchase Order accepted by Seller; (d) the Production Plan; (e) any Product-specific exhibits or attachments to this Amended GTC (e.g. cell warranty); (f) this Amended GTC and any exhibits, attachments, schedules and documents included or referenced in this Amended GTC that are not Product-specific attachments or schedules; and (g) any other Contract Document. This Amended GTC shall supersede any standard terms and conditions that are automatically attached to purchase orders issued by Tesla. |
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16.4 |
Counterparts. This Amended GTC may be executed in counterparts, each of which shall be an original and together which shall constitute one and the same instrument. |
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16.5 |
Covenant of Good Faith. Except where an obligation is specifically identified as being in a party’s sole discretion, each Party, in its respective dealings with the other Party under or in connection with this Amended GTC and each Contract, shall act in good faith and with fair dealing. |
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16.6 |
Electronic Communication. Subject to Section 2.4(c), Seller will comply with the method of electronic communication reasonable specified by Tesla from time to time, including requirements for electronic funds transfer, purchase order transmission, electronic signature, and communication. |
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16.7 |
Entire Agreement. This Amended GTC, the NDA, the Pricing Agreement, the Contract Documents, and each Contract constitute the entire agreement between the Parties with respect to its subject matter, and supersedes all prior oral or written representations or agreements by the Parties with respect to the subject matter thereof. Except as authorized in Section 2.2, no subsequent terms, conditions, understandings, or agreements purporting to modify the terms of this Amended GTC, the Pricing Agreement, any Contract Documents, or a Contract will be binding unless in writing and signed by a Vice-President or higher for both Tesla and Seller. |
Certain identified information has been omitted from this document because it is not material and would be competitively harmful if publicly disclosed, and has been marked with “[***]” to indicated where omissions have been made.
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16.9 |
No Third Party Beneficiaries. This Amended GTC and each Contract are entered into solely between Tesla and Seller and, except for the Parties’ indemnification obligations under Section 7 (Indemnification) and the Authorized Purchasers, will not be deemed to create any rights in any third parties or to create any obligations of either Tesla or Seller to any third parties. |
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16.10 |
No Waiver. The failure of either Party to enforce on a particular occasion any right or remedy provided in this Amended GTC and/or the Contract or by law or in equity will not be deemed a waiver of that right or remedy on a subsequent occasion or a waiver of any other right or remedy. |
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In the case of Tesla: |
With a copy to: |
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Tesla, Inc. |
Tesla, Inc. |
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3500 Deer Creek Road, Palo Alto, CA 94304 |
3500 Deer Creek Road, Palo Alto, CA 94304 |
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Attn: Vice President, Global Supply Management |
Attn: Legal Department |
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In the case of Seller: |
With a copy to: |
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SANYO Electric Co., Ltd. |
Panasonic Corporation of North America |
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Tesla Energy Business Division |
Legal Department, 12th Floor |
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Attn: Associate Director, Global Sales & Marketing |
Two Riverfront Plaza Newark, New Jersey 07102-5490 |
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16.12 |
Relationship of Parties. The Parties are independent contractors under this Amended GTC and the Contract and no other relationship is intended, including, without limitation, a partnership, franchise, joint venture, agency, employer/employee, fiduciary, master/servant relationship, or other special relationship. Neither Party shall act in a manner that expresses or implies a relationship other than that of independent contractor, nor bind the other Party. |
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16.13 |
Rules of Interpretation. Section references are to sections of the document in which the reference is contained and will be deemed to refer to and include all subsections of the referenced section. The section headings in this Amended GTC are for reference purposes only and may not be construed to modify or restrict any of the terms of this Amended GTC and/or the Contract. This Amended GTC and each Contract will be deemed to have been written by both Tesla and Seller. Unless the context requires otherwise, (a) “including” (and any of its derivative forms) means including but not limited to, (b) “may” means has the right, but not the obligation to do something and “may not” means does not have the right to do something, (c) the words “will” and “shall” are shall be understood to apply to a mandatory obligation, not a permissive statement, and (d) terms defined in the singular include the plural and vice versa. This Amended GTC and the Contract Documents are written in the English language, and the English text of this Amended GTC and of each Contract shall prevail over any translation hereof. |
Certain identified information has been omitted from this document because it is not material and would be competitively harmful if publicly disclosed, and has been marked with “[***]” to indicated where omissions have been made.
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will be enforced to the maximum extent permissible so as to implement the intent of the Parties, and the remainder of this Amended GTC and/or the Contract will continue in full force and effect. |
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16.15 |
Survival. Any provision of this Amended GTC and/or of a Contract that contemplates or governs performance or observance subsequent to termination or expiration thereof will survive the expiration or termination thereof for any reason, including without limitation Seller’s obligations, representations and warranties and Tesla’s rights under the Contract with respect to Goods delivered or ordered thereunder. |
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(a) |
Seller shall contractually require its suppliers and sub-suppliers to [***] for purposes of production of Goods under this Amended GTC. “Minerals” means any form of cobalt and/or ‘conflict minerals’ (as that term is used in Tesla’s Conduct Policies). |
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(b) |
At least [***] during the Term, Seller shall [***] (collectively, “Minerals Suppliers”). Seller shall conduct each [***] in accordance with [***], including as applicable [***] from [***] and the commitments adopted by the [***], and using [***] with relevant industry experience. The scope and methodology of [***], and shall schedule each [***] to facilitate [***]. Seller will provide Tesla and its independent auditors with a [***]. Seller shall complete each [***] and deliver a [***] during the Term. |
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(c) |
If and to the extent that [***], then the Parties shall promptly discuss in good faith and one of the following shall apply: |
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(i) |
Seller shall promptly: (a) cause the [***] to [***] and provide evidence to Tesla that [***]; and/or (b) [***] related to this Amended GTC and [***]; or |
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(ii) |
If Seller is unable to achieve compliance as contemplated in Subsection (i) above, Tesla may require Seller to [***]. |
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16.17 |
Defined Terms. Terms used in this Amended GTC with initial capitalization have the meanings specified where used or in this Section 16.16. |
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(a) |
“Affiliate” means with respect to an entity, any other entity or person Controlling, Controlled by, or under common Control with, such entity. |
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(b) |
“Amendment Effective Date” has the meaning set forth in introduction. |
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(c) |
“Anti-Bribery Laws” means the United States Foreign Corrupt Practices Act of 1977, the United Kingdom Bribery Act of 2010, the OECD Convention on Combating Bribery of Foreign Public Officials in International Business Transactions (in each case, as amended from time to time) and all other applicable national, regional, provincial, state, municipal or local laws and regulations that prohibit the bribery of, or the providing of unlawful gratuities, facilitation payments or other benefits to, any government official or any other person. |
Certain identified information has been omitted from this document because it is not material and would be competitively harmful if publicly disclosed, and has been marked with “[***]” to indicated where omissions have been made.
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sanction regulations promulgated pursuant thereto by the OFAC, as well as Laws relating to prevention and detection of money laundering in 18 U.S.C. Sections 1956 and 1957. |
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(e) |
“Authorized Purchaser” means Tesla or any Affiliate of Tesla that is authorized by Tesla to purchase Goods on behalf of Tesla and that Tesla notifies in writing to Seller. |
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(f) |
“Cell” means a [***] battery cell manufactured by or for Seller hereunder, and has the same meaning as the term “Good” when used in the Gigafactory Contract Documents. |
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(g) |
[***] means the [***] of one or more Goods which [***] other Goods. |
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(h) |
“Change of Control Event” means a transaction or event involving a Party whereby (i) any other entity, person or “group” (as such term is used in Section 13(d) of the Securities Exchange Act of 1934, as amended) has acquired Control of all or substantially all of the assets, of such Party (or any parent company of such Party), whether directly or indirectly, in a single transaction or series of related transactions, or (ii) such Party (or any parent company of such Party) has consolidated with, or merged with or into, another entity, or sold, assigned, conveyed, transferred, leased or otherwise disposed of all or substantially all of its assets to another person(s) or entity(ies). |
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(i) |
“Claim” means any demand, or any civil, criminal, administrative or investigative claim, action or proceeding (including arbitration) asserted, commenced or threatened against an entity or person by an unaffiliated third party. For the purposes of this definition, an employee of either Party is considered an unaffiliated third party. |
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(j) |
“Commercially Reasonable Efforts” means taking all such steps and performing in such a manner as a well-managed company would undertake where it was acting in a determined, prudent and reasonable manner to achieve a particular desired result for its own benefit. |
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(k) |
“Contract Documents” means the Purchase Order accepted by Seller, the applicable Pricing Agreement (if any), the provisions of this Amended GTC relevant to the obligations under the accepted Purchase Order (e.g., production and delivery of Goods), documents and attachments which are both referenced in any of the foregoing (including Specifications) relevant to the obligations under the accepted Purchase Order (e.g., production and delivery of Goods), and any other additional written agreements which are signed by authorized representatives of the Parties and pertain to the obligations under the accepted Purchase Order (e.g., production and delivery of Goods). |
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(l) |
“Control” means possessing, directly or indirectly, the power to direct or cause the direction of the management, policies or operations of an entity, whether through ownership of voting securities, by contract or otherwise. |
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(m) |
[***] means [***] near the [***]. |
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(n) |
“Embargoed Person” means any person, entity or government subject to trade restrictions under U.S. Law, including any Anti-Money Laundering Laws and any Executive Orders or regulations promulgated thereunder, with the result that either business with Seller is prohibited by Law or the Contract is in violation of Law. |
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(o) |
“Energy Products” means storage technology in a stationary installation, not in a mobile or otherwise portable device, in which one or more cells store electric power for an auxiliary component. |
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(p) |
“EP Cells” means, collectively, Goods intended for use in Energy Products and purchased under the Gigafactory Contract. |
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(q) |
“EV Cells” means, collectively, Goods intended for use in vehicles that are Tesla Products and purchased under the Gigafactory Contract. |
Certain identified information has been omitted from this document because it is not material and would be competitively harmful if publicly disclosed, and has been marked with “[***]” to indicated where omissions have been made.
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(s) |
“In-Scope Countries” means, for each type of Cell, the applicable country of delivery and additional countries as requested by Tesla and approved in writing by Seller. Tesla will give reasonable notice of each country that it wishes to include in this definition with respect to a Cell type, the Parties’ cell technical teams will work together in good faith to evaluate and confirm whether the Cell type(s) can meet the applicable Laws of such country, and Seller shall not be unreasonably withhold, condition, or delay its consent to any such request. |
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(t) |
“Intellectual Property Rights” means all intellectual and industrial property rights recognized in any jurisdiction, including copyrights, mask work rights, moral rights, trade secrets, patent rights, rights in inventions, trademarks, trade names, and service marks (including applications for, and registrations, extensions, renewals, and re-issuances of, the foregoing). |
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(u) |
“Law(s)” means any statute, regulation, ordinance, rule, order, decree or governmental requirement enacted, promulgated or imposed by any governmental authority at any level (e.g., municipal, county, province, state or national). For the avoidance of doubt, the term “Laws” includes any and all applicable Anti-Bribery Laws and any and all applicable Laws with respect to: (i) occupational safety and health; (ii) protection of persons and property from death, injury or damage; (iii) the environment and the use, handling, storage, labeling and disposal of toxic or hazardous materials; and/or (iv) labor and employment. |
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(v) |
“Lead Time” means [***]. |
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(w) |
“Module” means smallest replaceable unit in a Tesla battery pack. In the case of the Tesla Roadster, the Module consists of 621 battery cells connected in a series/parallel arrangement. |
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(x) |
“Person” means an individual, corporation, partnership, limited partnership, joint venture, association, joint stock company, trust, trustee, estate, limited liability company, unincorporated organization, real estate investment trust, government or any agency or political subdivision thereof, or any other form of entity. |
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(y) |
“Purchase Order” means a purchase order for Goods issued by Tesla or another Authorized Purchaser (e.g., a Production Order or a Discrete Order). |
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(z) |
“Release” means a written communication issued by Tesla or an Authorized Purchaser that identifies a specific quantity of Goods and associated delivery date by which Seller shall deliver such Goods. |
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(aa) |
“Seller Personnel” means any personnel furnished by Seller or any of its Affiliates and working at the Factory in connection with the Contract, including employees and independent contractors of Seller, its Affiliates and subcontractors. |
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(bb) |
“Seller’s Property” has the meaning given in Section 9.1 of this Amended GTC. |
Certain identified information has been omitted from this document because it is not material and would be competitively harmful if publicly disclosed, and has been marked with “[***]” to indicated where omissions have been made.
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(dd) |
“Tesla” means Tesla, Inc. and/or an Affiliate(s) of Tesla. |
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(ee) |
“Tesla Supplier Handbook” means the most current version of the written set of guidelines, standards and requirements provided by Tesla regarding development and production of Goods under this Amended GTC. The Tesla Supplier Handbook may be provided by Tesla electronically or via a web-based portal. |
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(ff) |
“Tesla Product” means any product that is manufactured by or on behalf of Tesla (excluding Goods). Tesla Products may include vehicles, chargers, subassemblies, systems and components. |
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(gg) |
“Tesla-Supplied Items” means, collectively, the raw materials, components, supplies, and/or services to be provided by Tesla in connection with this Amended GTC or Factory Lease (e.g. Utilities) and/or the Contract as a Tesla Responsibility. |
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(hh) |
“US Person” means a United States citizen, entity organized under the Laws of the United States or its territories or entity having its principal place of business within the United States or any of its territories. |
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(ii) |
“Warranty Period” has the meaning given in Section 5.1(a). |
Certain identified information has been omitted from this document because it is not material and would be competitively harmful if publicly disclosed, and has been marked with “[***]” to indicated where omissions have been made.
IN WITNESS WHEREOF, the Parties have executed these Amended and Restated General Terms and Conditions for Gigafactory by persons duly authorized below:
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Tesla, Inc. |
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Tesla Motors Netherlands B.V. |
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By: |
/s/ Karn Budhiraj |
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By: |
Stephan Werkman |
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Printed: |
Karn Budhiraj |
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Printed: |
Stephan Werkman |
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Title: |
VP, Global Supply Chain Management |
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Title: |
Director |
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Date: |
9 June 2020 |
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Date: |
Jun 10, 2020 |
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Panasonic Corporation |
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Panasonic Corporation of North America, by and through its division Panasonic Energy of North America |
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By: |
/s/ Mototsugu Sato |
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By: |
/s/ Thomas G Korte |
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Printed: |
Mototsugu Sato |
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Printed: |
Thomas G. Korte |
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Title: |
Representative Director, Executive Vice President |
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Title: |
Senior Vice President of Operations at Panasonic Corporation of North America, and Chief Financial Officer of Panasonic’s US Company |
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Date: |
2020 June 6 |
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Date: |
Jun 5, 2020 |
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Certain identified information has been omitted from this document because it is not material and would be competitively harmful if publicly disclosed, and has been marked with “[***]” to indicated where omissions have been made.
Exhibit 1 – Quality Requirements
1.Quality Requirements. All Goods sold to Tesla under the Contract shall be manufactured and provided in accordance with agreed Tesla’s quality control procedures and requirements, including, without limitation, all Tesla quality standards (collectively, the “Quality Requirements”). The Parties shall determine upon the mutual consultation whether the Goods meet the Quality Requirements. Seller shall, in accordance with the Quality Requirements, provide, maintain and enforce all measures necessary to secure the quality of Goods and the manufacturing processes thereof, including without limitation, quality control standards, inspection standards and specifications.
2.PPAP. All cells shall go through a formal Production Part Approval Process (“PPAP”) process prior to use in a Tesla product. The PPAP process requires a review of product and process documents (FMEA, Control Plans, Inspection Standard, IEEE, etc.) and a process audit (as deemed necessary by Tesla Quality Personnel). Seller shall inform Tesla of any process and product changes that occur after completion of the PPAP process.
3.Evidence of Seller’s Quality Assurance; Testing. Upon Tesla’s request and within the scope that the Parties agree, Seller shall deliver to Tesla [***] as will validate compliance with all Quality Requirements. If quality problems based upon the Quality Requirements arise from the Goods, Tesla may, upon prior notice and during normal business hours: [***].
4.Pre-delivery Inspection. Seller shall be responsible for the quality control of the Goods it supplies to Tesla pursuant to the Contract, including, without limitation, reasonable and appropriate inspection and testing of Goods prior to delivery.
5.Tesla Testing. If quality problems based upon the Quality Requirements arise from the Goods, upon receipt of a reasonable request by Tesla, Seller shall promptly conduct required engineering and quality control tests of Goods manufactured pursuant to the Contract, and shall provide Tesla with the results of those tests.
6.This Exhibit 1 does not limit the Parties’ respective rights and obligations under the Contract.
Certain identified information has been omitted from this document because it is not material and would be competitively harmful if publicly disclosed, and has been marked with “[***]” to indicated where omissions have been made.
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Topic |
Description |
Timing |
Purpose |
Risks |
|
Quarterly SB-1 Audit Compliance |
***PNA to provide complete and accurate data, only to the Tesla employees and agents expressly identified in writing by Tesla, regarding the following: 1. The amount of Capital Investment in the State of Nevada, which will be further categorized by depreciable-life.*** For avoidance of doubt, this chart does not obligate PNA to make any minimum amount of Capital Investments, but [***]. 2. The number of employees engaged in the construction of the Project, and show the total number of construction employees and the percentage of construction employees who are Nevada Residents.*** 3. The number of Qualified Employees at the Project, the average wage paid to Qualified Employees throughout the period, and show the total number of Qualified Employees and the percentage of Qualified Employees who are Nevada Residents. For avoidance of doubt, this chart does not obligate PNA to pay any particular wages or wage levels to its employees.***
If and to the extent that PNA discovers that any of the foregoing data as reported to Tesla was inaccurate or incomplete, PNA will promptly notify Tesla and the Parties will collaboratively assess the impact of such inaccurate or incomplete data on past and future tax incentives from the State of Nevada. Depending on the nature, magnitude, and impact of the inaccurate or incomplete data, Tesla will work with the State of Nevada in a timely manner to remediate the error and to mitigate the potential loss of tax incentives. |
Quarterly |
To facilitate the SB-1 Compliance requirement |
Risk losing all incentives if SB-1 compliance is not met. |
|
Tesla-Panasonic Amended General Terms and Conditions |
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Page 32 of 36 |
Certain identified information has been omitted from this document because it is not material and would be competitively harmful if publicly disclosed, and has been marked with “[***]” to indicated where omissions have been made.
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Topic |
Description |
Timing |
Purpose |
Risks |
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Tesla will select and engage independent certified public accountant (“CPA”) to perform SB-1 compliance requirements. PNA to collaborate with same independent CPA and to adopt same agreed-upon procedures as determined by Tesla. [***] related to the incentives contemplated herein. [***] provided to PNA by such independent CPA. |
As-needed |
Pursuant to SB-1, Tesla, as Lead Participant, is required to issue a compliance report (at least on an annual basis) that is certified by an independent CPA. |
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***PNA will provide the following to selected independent CPA and comply with mutually-agreed procedures (PNA will not unreasonably object to Tesla’s proposed procedures): 1. Detailed lists of all pertinent real and personal property, including all Capital Investments incurred by PNA for the Project for each period; 2. Schedule listing all construction employees with respect to the for each period; and 3. Schedule listing all Qualified Employees with respect to the Project Site for each period. PNA will work with Tesla and the independent CPA to ensure that the SB-1 audit compliance process will not identify any material differences between PNA’s reported data and the actual data. PNA will also promptly remediate any errors identified by the independent CPA in PNA’s reported data and PNA will notify Tesla of PNA’s remediation steps and discuss such steps in good faith with Tesla. |
Quarterly |
To ensure that the SB-1 compliance is satisfied and acceptable to Nevada's Governor Office of Economic Development |
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Tesla-Panasonic Amended General Terms and Conditions |
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Page 33 of 36 |
Certain identified information has been omitted from this document because it is not material and would be competitively harmful if publicly disclosed, and has been marked with “[***]” to indicated where omissions have been made.
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Topic |
Description |
Timing |
Purpose |
Risks |
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[***]. PNA agrees that property purchased for the purposes of cell production at the Gigafactory will be delivered to and used at the Gigafactory site, but equipment may be stored offsite after delivery from time to time if not in use. |
Monthly |
To ensure that sales/use tax ultimately does not apply to Gigafactory purchases |
Risk that the incentives will not apply, subjecting Tesla to unwarranted sales tax expense |
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***PNA to provide the following: 1. Copies of all Abatement returns filed for the current period (i.e., returns filed by PNA); 2. Copies of proof of payment associated with each Abatement return; 3. Copies of all vendor invoices supporting the tax amounts reported on each Abatement return, upon request by Tesla or its independent CPA; 4. An Excel schedule summarizing all amounts filed for each Abatement return which lists: Vendor Invoice Number, Vendor Invoice Date, Total Invoice Amount, and Taxable Invoice Amount. It is understood that a delay in providing the information listed above will delay Tesla’s ability to file with Storey County and/or the State of Nevada (as applicable) for the corresponding tax incentives and Tesla may incur a late filing fee or penalty. |
Monthly |
To facilitate the SUT reimbursement claim process (as Tesla is required to file on behalf of all Participants) |
Risk of not receiving (or delayed receipt of) sales tax reimbursement from Storey County |
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Tesla will file SUT reimbursement claim on behalf of PNA to Storey County and Tesla will remit any such amounts to PNA in a timely manner. |
Monthly |
All SUT reimbursement is paid to Tesla. However, Tesla will remit the amounts received of PNA's portion of any reimbursement claim to PNA upon receipt of payment from Storey County |
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Tesla-Panasonic Amended General Terms and Conditions |
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Page 34 of 36 |
Certain identified information has been omitted from this document because it is not material and would be competitively harmful if publicly disclosed, and has been marked with “[***]” to indicated where omissions have been made.
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Topic |
Description |
Timing |
Purpose |
Risks |
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PNA agrees that any Transferable Tax Credit incurred by the Project will be entitled to Tesla, as Lead Participant.
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N/A |
Pursuant to SB-1, transferable tax credit is available to Lead Participant only. |
N/A |
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Cell [***] |
[***].
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N/A |
Due to the benefit of various tax abatements and exemptions, the aforementioned [***]. |
Risk of inaccurate [***] |
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NV Incentive – Project Requirement |
***PNA agrees to maintain any licenses and permits required to be in good standing in the State of Nevada and/or Storey County.
If PNA discovers that it is not in good standing in the State of Nevada and/or Storey County, PNA will promptly remediate the situation with the State of Nevada and/or Storey County and notify Tesla of the situation. Depending on the nature, magnitude, and impact of a failure by PNA to remain in good standing, Tesla will work with the State of Nevada in a timely manner to mitigate the potential loss of tax incentives. |
N/A |
SB-1 Requirement |
Risk losing all incentives. |
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[***]. |
N/A |
SB-1 Requirement |
Risk losing all incentives. |
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Tesla-Panasonic Amended General Terms and Conditions |
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Page 35 of 36 |
Certain identified information has been omitted from this document because it is not material and would be competitively harmful if publicly disclosed, and has been marked with “[***]” to indicated where omissions have been made.
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Topic |
Description |
Timing |
Purpose |
Risks |
|
|
Any recapture of Abated Taxes or Transferable Tax Credits will be repaid [***]. |
N/A |
To ensure that PNA is not subject to any recapture provisions (which is also already stated in Tesla/State Incentive Agreement) |
Tesla is solely responsible for any recapture |
|
|
***PNA will maintain copies of all documents, records, and related information pertaining to any data reported to Tesla, the independent CPA, the State of Nevada, and/or Storey County for purposes of the Nevada Incentives, and provide access to the reasonably requested supporting data to Tesla, the State of Nevada, and Storey County upon request for 5 years after the expiration of the Incentive Agreement (June 30, 2039). |
N/A |
SB-1 Requirement |
Risk losing all incentives if supporting documentation is insufficient to support potential audit by GOED or Dept. of Taxation. |
|
|
[***]. |
N/A |
SB-1 Requirement |
Risk losing all incentives. |
|
|
[***]. |
N/A |
SB-1 Requirement |
Risk losing all incentives. |
|
Tesla and PNA will meet as needed to discuss the following, but not limited to: 1. business update, including headcount/investment projections; 2. SB-1 compliance; 3. SUT reimbursement. |
Quarterly |
To ensure that both parties are aligned on Incentive-related matters, and ultimately partnering to ensure all SB-1 requirements are met and to achieve max value of Incentives available under SB-1. |
Risk of reporting inefficiencies and delay |
|
Tesla-Panasonic Amended General Terms and Conditions |
|
Page 36 of 36 |
Certain identified information has been omitted from this document because it is not material and would be competitively harmful if publicly disclosed, and has been marked with “[***]” to indicated where omissions have been made.
Exhibit 10.3
2020 Pricing Agreement (2170 Cells)
PPA Effective Date: 4/1/2020
|
Seller’s Vendor Number with Tesla |
133618 |
|||||
|
Pricing Validity Period (“Pricing Term”) |
4/1/2020 |
through |
3/31/2023 |
|||
|
Forecasted Volumes during Pricing Term |
See Section 8(a) below |
|||||
|
Payment Terms |
[***] |
|||||
|
1. |
This 2020 Pricing Agreement (Gigafactory 2170 Cells) (the “PPA”) is entered into by the Tesla, Inc. and Tesla Motors Netherlands B.V. (collectively, “Tesla”) and Panasonic Corporation (“Panasonic Corp.”) and Panasonic Corporation of North America, for and on behalf of its division Panasonic Energy of North America (“PENA”) (collectively, “Seller”) with respect to certain cylindrical lithium-ion battery cells made by or on behalf of Seller (collectively, "Cells") at Tesla’s Gigafactory in Sparks, Nevada (the “Factory”). The Parties shall meet and confer in good faith to finalize an agreed, written Specification for each type of Goods, including the agreed watt-hour (Wh) capacity and size. The price per Cell is referred to as the “Unit Price.” Terms used herein with initial capitalization have the meanings given where used or in the Gigafactory Contract. |
|
2. |
Pricing Term. The Pricing Term for this PPA shall be as set forth in the table above, subject to the following: by giving written notice to the other Party on or prior to June 30, 2021, either Party may elect to terminate this PPA for convenience as of March 31, 2022. In the event that a Party elects to so terminate this PPA, the Parties shall negotiate in good faith terms and conditions for a new pricing agreement. |
|
3. |
Orders. Tesla and any of its Affiliates may order Goods pursuant to Purchase Orders or Releases issued directly to Seller and each such Purchase Order and Release shall be governed by the Gigafactory Contract. The applicable delivery dates will be specified in Purchase Orders or Releases issued and accepted per Sections 1.2 and 1.3 of the GTC or otherwise agreed per the production planning process in Section 1.1 of the GTC. Seller shall direct all invoices under a Purchase Order to the Tesla entity identified in the Purchase Order or, if applicable, in the applicable Release. |
|
Table 1 – Base Volume Commitment |
||
|
Timeframe |
|
Volume |
|
[***] |
|
[***] |
|
[***] |
[***] |
[***] |
|
|
[***] |
[***] |
|
[***] |
[***] |
[***] |
|
|
[***] |
[***] |
* See Section 4.c.i below **See Section 4.c.viii below
|
2020 Pricing Agreement (2170 Cells) |
Page 1 of 9 |
Certain identified information has been omitted from this document because it is not material and would be competitively harmful if publicly disclosed, and has been marked with “[***]” to indicated where omissions have been made.
|
|
c. |
Conditions. |
|
Table 2 – Target Production Volume by Line |
|
|
[***] |
[***] |
|
[***] |
[***] |
|
[***] |
[***] |
|
[***] |
[***] |
|
|
ii. |
Tesla’s obligations to purchase the Volume Commitment is subject to the conditions set out in Section 1.6 (Purchase Commitment) of the GTC. |
|
|
iii. |
Tesla’s obligation to purchase the Volume Commitment shall be reduced by the quantity of Cells [***]. |
|
|
iv. |
Seller’s obligation to deliver the Volume Commitment shall be reduced by the quantity of Cells [***]. |
|
|
v. |
Any forecast volumes in excess of the Volume Commitment is provided for planning purposes only and is not a volume guarantee and neither Tesla nor Seller shall have any liability for such excess volumes except to the extent expressly agreed through the Production Plan. |
|
|
vi. |
Tesla’s obligation to purchase the Volume Commitment hereunder shall be deemed to be satisfied and shall be reduced, as applicable, to the extent that one or more Authorized Purchasers purchases Goods in connection with this PPA. |
|
|
d. |
Capital. |
|
|
i. |
Except as otherwise agreed in writing by Tesla (e.g. in the Lease or in a signed change order), Seller shall make all capital and operational investments required for production of Goods for Tesla in accordance with the Production Plan and under this PPA (e.g. equipment, systems, other tangible items, etc.), including equipment and labor for production or for [***]. For purposes of the foregoing clause, Tesla will accept responsibility for [***] is undertaken at Tesla’s request and pursuant to a change order that is signed prior to [***]. |
|
2020 Pricing Agreement (2170 Cells) |
Page 2 of 9 |
Certain identified information has been omitted from this document because it is not material and would be competitively harmful if publicly disclosed, and has been marked with “[***]” to indicated where omissions have been made.
|
|
iv. |
Without limiting anything to the contrary herein or in the GTC, the Parties will discuss in good faith if Tesla requests that Seller [***] and Seller will not be obligated to proceed except as agreed in writing by both Parties. |
|
5. |
Pricing. The Parties agree that the Unit Prices for Cells will be firm and fixed prices determined with reference to the applicable baseline price (“Baseline Price”) and will not increase for any reason except as expressly contemplated below or otherwise mutually agreed by the Parties through either a formal signed amendment hereof or a PO that is issued by Tesla and accepted by Seller. No further amounts shall be payable by Tesla for any reason, except as may be applicable per Section 9 (Changes) below or Section 4 (Volumes) above. |
|
|
a. |
Baseline Pricing. |
|
|
i. |
The Baseline Price for 2170 Cells produced at the Factory shall be as follows per Cell ([***] is included for ease of reference only): |
|
|
Table 3 – Baseline Prices |
|||
|
|
[***] |
[***] |
[***] |
|
|
|
|
[***] |
[***] |
[***] |
|
[***] |
[***] |
[***] |
[***] |
[***] |
|
|
[***] |
[***] |
[***] |
[***] |
|
|
[***] |
|
|
|
|
|
[***] |
[***] |
[***] |
[***] |
|
|
[***] |
[***] |
[***] |
[***] |
|
|
[***] |
|
|
|
|
|
[***] |
[***] |
[***] |
[***] |
|
|
[***] |
[***] |
[***] |
[***] |
|
[***] |
[***] |
|
|
|
|
|
[***] |
[***] |
[***] |
[***] |
|
|
[***] |
[***] |
[***] |
[***] |
|
|
[***] |
|
|
|
|
|
[***] |
[***] |
[***] |
[***] |
|
|
[***] |
[***] |
[***] |
[***] |
|
|
[***] |
[***] |
[***] |
[***] |
|
[***] |
[***] |
|
|
|
|
|
[***] |
[***] |
[***] |
[***] |
|
|
[***] |
[***] |
[***] |
[***] |
[***]
|
2020 Pricing Agreement (2170 Cells) |
Page 3 of 9 |
Certain identified information has been omitted from this document because it is not material and would be competitively harmful if publicly disclosed, and has been marked with “[***]” to indicated where omissions have been made.
|
|
ii. |
The Baseline Prices in Table 3 [***] shall [***]. |
|
|
iii. |
If [***], the Volume Commitment [***] per Table 1. To the extent that [***], the Parties shall [***]. |
|
|
iv. |
[***] Baseline Price [***]in Table 3 above is [***]. The [***] Baseline Price [***] shall be [***]. |
|
|
b. |
Metals Adjustment. Each month during the Pricing Term starting [***], the Baseline Price shall adjust as follows: the Parties will measure the [***] for [***] per the applicable index or metric for the applicable measurement window in the table below (this is the “Index Average Cost”), and adjust the Baseline Price (up or down) based on the difference between the then-current Index Average Cost for each material and the baseline commodity assumptions set forth below. |
|
Table 4: Metals Adjustment |
||||
|
Cell Material |
[***] |
[***] |
[***] |
[***] |
|
Index/Metric |
[***] |
[***] |
[***] |
[***] |
|
Measurement Window |
[***] |
[***] |
[***] |
[***] |
|
Content per Cell: |
[***] per Cell |
[***] per Cell |
[***] per Cell |
[***] per Cell |
|
Content per Cell: [***] Baseline |
[***] per Cell |
[***] per Cell |
[***] per Cell |
[***] per Cell |
|
Content per Cell: |
[***] per Cell |
[***] per Cell |
[***] per Cell |
[***] per Cell |
|
[***] |
[***] |
[***] |
[***] |
[***] |
* The foregoing values shall be set based on [***].
|
|
c. |
Lithium Adjustment. Each [***] during the Pricing Term starting [***], the Baseline Price shall adjust as follows: the Parties will measure the [***] prices for [***] for the applicable measurement window in the table below, and adjust the Baseline Price (up or down) based on the difference between the then-current Index Average Cost and the baseline commodity assumption set forth below. |
|
Table 5-A: Lithium Adjustment |
|
|
Cell Material |
[***] |
|
Index/Metric |
[***] |
|
Measurement Window |
See Table 5-B below |
|
Content per Cell: [***] Baseline |
[***] per Cell |
|
Content per Cell: [***] Baseline |
[***] per Cell |
|
Content per Cell: [***] Baseline |
[***] per Cell |
|
Commodity Price Baseline |
[***] |
* The foregoing value shall be set based on [***].
|
2020 Pricing Agreement (2170 Cells) |
Page 4 of 9 |
Certain identified information has been omitted from this document because it is not material and would be competitively harmful if publicly disclosed, and has been marked with “[***]” to indicated where omissions have been made.
|
Table 5-B: Measurement Window for Lithium Adjustment |
|
|
Pricing Period |
Measurement Window |
|
Calendar Year [***] |
[***] |
|
Calendar Year [***] |
[***] |
|
Calendar Year [***] |
[***] |
|
Calendar Year [***] |
[***] |
|
|
d. |
[***]Adjustment. Each [***] during the Pricing Term starting [***], the Baseline Price shall adjust based on the change in the [***] and [***] for Cell Materials [***] per the [***]. For example, for Goods scheduled for delivery in [***], this adjustment shall take place with respect to the exchange rate for [***]. The baseline exchange rate as of the PPA Effective Date shall be [***]. |
|
|
e. |
Adjustment for Savings. If and to the extent that the Parties realize savings due to [***], the Parties shall discuss in good faith and may mutually agree on a [***] adjustment to the Baseline Prices for [***] Cells through either a formal signed amendment hereof or a PO that is issued by Tesla and accepted by Seller. |
|
Table 6 |
||
|
[***] |
[***] |
[***] |
|
[***] |
[***] |
[***] |
|
[***] |
[***] |
[***] |
|
[***] |
[***] |
[***] |
|
[***] |
[***] |
[***] |
|
6. |
[***] Transition Costs. |
|
|
a. |
Seller has sole financial responsibility for all [***] (collectively, "Transition Costs") for the [***] (the "Transition"), except as expressly stated otherwise below. |
|
|
b. |
Assumptions. The [***] Baseline Prices assume that [***] during Transition [***] and [***]. [***]. The Parties acknowledge that [***] the foregoing assumptions. |
|
|
c. |
[***]. [***] means the quantity of Cells [***]. [***] means [***]. [***] means [***], where [***] means [***] in Table 7 below. |
|
Table 7: [***] |
||||
|
[***] |
[***] |
[***] |
[***] |
[***] |
|
[***] |
[***] |
[***] |
[***] |
[***] |
|
[***] |
[***] |
[***] |
[***] |
[***] |
|
[***] |
[***] |
[***] |
[***] |
[***] |
|
|
d. |
[***]. Seller will [***] as described in the table attached as Exhibit A [***]. |
|
2020 Pricing Agreement (2170 Cells) |
Page 5 of 9 |
Certain identified information has been omitted from this document because it is not material and would be competitively harmful if publicly disclosed, and has been marked with “[***]” to indicated where omissions have been made.
|
|
e. |
Monthly Reporting. At the end of each month through the completion of the Transition, Seller shall review with Tesla’s commercial and finance team in person (if possible) the actual and incremental [***] for such month [***]. |
|
|
f. |
One-Time Annual True-Up. At the completion of the Transition, , the Parties will review [***] related to the Transition [***] and: |
|
|
i. |
If the actual [***], Seller shall pay Tesla an amount equal to [***]; |
|
|
ii. |
If the actual [***], Tesla shall pay Seller an amount equal to [***]; |
|
|
iii. |
If the actual [***], Seller shall pay Tesla an amount equal to [***]; |
|
|
iv. |
If the actual [***] Tesla shall [***]. |
|
7. |
Bill of Materials. |
|
|
a. |
Except as expressly agreed in writing by the Parties and subject to Section 7.b below, Seller shall be responsible (as between the Parties) for [***], and in no event [***] in connection [***]. |
|
|
c. |
As reasonably requested by Seller, Tesla will participate in all supplier and material qualification processes relevant to this PPA and to the cost trajectory and will not unreasonably withhold or delay its participation in such processes. |
|
8. |
Material Sourcing. |
|
|
a. |
Seller will comply with the Tesla Supplier Code of Conduct which is available at https://www.tesla.com/sites/default/files/about/legal/tesla-supplier-code-of-conduct.pdf and, to the extent applicable, the Tesla Human Rights And Conflict Minerals Policy which is available at https://www.tesla.com/about/legal#human-rights-and-conflict-minerals-policy (the foregoing two policies are referred to, collectively, as “Tesla’s Conduct Policies”). |
|
|
b. |
In connection with the sourcing of cobalt and battery cell materials produced with cobalt (e.g. cathode) (collectively, “Cobalt”) and if applicable conflict minerals, Seller shall (i) comply with the Responsible Minerals Initiative standards (“RMI Standards”), (ii) comply with all applicable Laws, (iii) require each supplier and sub-supplier of Cobalt to submit a comprehensive response using the Cobalt Reporting Template, available at http://www.responsiblemineralsinitiative.org/emerging-risks/cobalt-reporting-template/, to confirm that such entities comply with the RMI Standards, and (iv) provide copies of all such responses and data to Tesla no later than February 28 of each year through during the Pricing Term. |
|
|
c. |
If and to the extent that Seller discovers that a supplier or sub-supplier fails to comply with an applicable Law, the RMI Standards, or Tesla’s Conduct Policies, the Parties shall promptly discuss in good faith how to mitigate the impact on Tesla. |
|
2020 Pricing Agreement (2170 Cells) |
Page 6 of 9 |
Certain identified information has been omitted from this document because it is not material and would be competitively harmful if publicly disclosed, and has been marked with “[***]” to indicated where omissions have been made.
|
10. |
Customs, Duties, and Tariffs. Except as expressly agreed in writing by the Parties: (a) [***]; (b) [***]. The Unit Prices shall not change during the Pricing Term in connection with any change in the amounts of any such duties, tariffs, or other charges; provided, however, that [***]. |
|
11. |
Miscellaneous. |
|
|
a. |
The Parties’ Amended and Restated General Terms and Conditions for Gigafactory dated January 1, 2020 ( “Amended and Restated GTC”), including Section 4.1 (Open Book Structure) thereof and Non-Disclosure Agreement for Commercial Agreement, Gigafactory dated July 1, 2019 (“NDA”), are incorporated by reference as integral parts hereof. |
|
|
b. |
The Amended and Restated GTC, the NDA, this PPA, applicable sections of the Amended and Restated Factory Lease dated January 1, 2017 (“Lease”), and Purchase Orders and Releases issued by or for Tesla hereunder (collectively, “Gigafactory Contract”) constitute the entire agreement between the Parties with respect to the subject matter of this PPA and supersede all prior oral or written representations or agreements by the Parties with respect to its subject matter. No subsequent terms, conditions, understandings, or agreements purporting to modify the terms of this PPA will be binding unless in writing and signed by both Parties. |
|
|
d. |
This PPA may be executed in counterparts, each of which when so executed and delivered will be deemed an original, and all of which taken together will constitute one and the same instrument. |
[Signature page follows]
|
2020 Pricing Agreement (2170 Cells) |
Page 7 of 9 |
Certain identified information has been omitted from this document because it is not material and would be competitively harmful if publicly disclosed, and has been marked with “[***]” to indicated where omissions have been made.
Agreed by authorized representatives of each Party and signed by the Parties as of the PPA Effective Date.
|
Tesla, Inc. |
|
Tesla Motors Netherlands B.V. |
||||||
|
|
By: |
/s/ Karn Budhiraj |
|
|
|
By: |
/s/ Stephan Werkman |
|
|
|
Printed: |
Karn Budhiraj |
|
|
Printed: |
Stephan Werkman |
|
|
|
|
Title: |
VP, Global Supply Management |
|
|
Title: |
Director |
|
|
|
|
Date: |
9 June 2020 |
|
|
Date: |
10/06/2020 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Panasonic Corporation |
|
Panasonic Corporation of North America, for and on behalf of its division Panasonic Energy of North America |
||||||
|
|
By: |
/s/ Mototsugu Sato |
|
|
|
By: |
/s/ Thomas G Korte |
|
|
|
Printed: |
Mototsugu Sato |
|
|
Printed: |
Thomas G. Korte |
|
|
|
|
Title: |
Representative Director, Executive Vice President |
|
|
Title: |
Senior Vice President of Operations at Panasonic Corporation of North America, and Chief Financial Officer of Panasonic’s US Company |
|
|
|
|
Date: |
2020 June 6 |
|
|
|
|||
|
|
|
|
|
|
Date: |
Jun 5, 2020 |
|
|
|
|
|
|
|
|
|
|
|
|
|
2020 Pricing Agreement (2170 Cells) |
Page 8 of 9 |
Certain identified information has been omitted from this document because it is not material and would be competitively harmful if publicly disclosed, and has been marked with “[***]” to indicated where omissions have been made.
Exhibit A: [***]
[***]
|
2020 Pricing Agreement (2170 Cells) |
Page 9 of 9 |
INDEMNIFICATION AGREEMENT
THIS INDEMNIFICATION AGREEMENT (this “Agreement”) is entered into, effective as of June 23, 2020 (the “Effective Date”) by and between Elon R. Musk (the “Indemnitor”) and Tesla, Inc., a Delaware corporation (the “Company”).
WHEREAS, it is essential to the Company to retain and attract as directors and officers the most capable persons available;
WHEREAS, the Indemnitor and the Company recognize the increased risk of litigation and other claims currently being asserted and that may be asserted in the future against directors and officers of corporations;
WHEREAS, the Company has entered and may from time to time enter into indemnification agreements (each, an “Indemnification Agreement”) with its directors, persons holding officerships, and persons holding equivalent positions with the Company’s subsidiaries (each such individual who has executed an Indemnification Agreement prior to a Change in Control (as defined below), an “Indemnitee”) pursuant to which the Company is or will be obligated to indemnify and pay or advance certain Expenses (as defined in the applicable Indemnification Agreement) of each such Indemnitee arising from an Indemnifiable Event (as defined in the applicable Indemnification Agreement) to the maximum extent permitted by law;
WHEREAS, in addition to entering into Indemnification Agreements with Indemnitees, the Company has purchased from time to time in the past directors’ and officers’ liability insurance to indemnify such Indemnitees from certain losses and expenses not otherwise indemnifiable by the Company pursuant to applicable laws;
WHEREAS, the binding quote proposal for directors’ and officers’ liability insurance most recently obtained by the Company in June 2019 would have required the payment of a significant amount of premiums to third parties that the Company deemed at such time to be unreasonably disproportionate to the amount of coverage provided;
WHEREAS, the Company intends to obtain a binding quote proposal for a directors’ and officers’ liability insurance policy with an aggregate “Side A” coverage limit of $100,000,000 from a reputable insurance broker with nationwide standing, for a term commencing upon the end of the Term (the “2020 Insurance Quote”);
WHEREAS, in recognition of each Indemnitee’s need for substantial protection against personal liability in order to enhance such Indemnitee’s continued and effective service to the Company and/or its subsidiaries as a director and/or officer, including during the pendency of the 2020 Insurance Quote, the Indemnitor, subject to the terms herein, desires to agree, in his individual capacity, to indemnify each Indemnitee for Expenses of such Indemnitee arising from an Indemnifiable Event, and solely to the extent that the Company is unable to do so, in order to provide assurance to the Indemnitees of the availability of funds to make payments that the Indemnitees would, but for such inability of the Company, be entitled to pursuant to the Indemnification Agreements or a directors’ and officers’ liability insurance policy; and
WHEREAS, the Company and its Board of Directors (the “Board”) believe it to be in the best interests of the Company and its stockholders to enter into this Agreement pending the 2020 Insurance Quote.
NOW, THEREFORE, in consideration of the above premises and covenants herein and for good and valuable consideration, the sufficiency of which is hereby acknowledged, and intending to be legally bound hereby, the parties agree as follows:
1.Certain Definitions.
(a) “Change in Control” shall be deemed to have occurred if (i) any “person” (as such term is used in Sections 13(d) and 14(d) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”)), other than a trustee or other fiduciary holding securities under an employee benefit plan of the Company or a corporation owned directly or indirectly by the stockholders of the Company in substantially the same proportions as their ownership of stock of the Company, is or becomes the “beneficial owner” (as defined in Rule 13d‑3 under the Exchange Act), directly or indirectly, of securities of the Company representing 50% or more of the total voting power represented by the Company’s then outstanding voting securities, or (ii) during any period of two consecutive years, individuals who at the beginning of such period constitute the Board and any new director whose election by the Board or nomination for election by the Company’s stockholders was approved by a vote of at least two-thirds (2/3) of the directors then still in office who either were directors at the beginning of the period or whose election or nomination for election was previously so approved, cease for any reason to constitute a majority of the Board, or (iii) the stockholders of the Company approve a merger or consolidation of the Company with any other entity, other than a merger or consolidation that would result in the voting securities of the Company outstanding immediately prior thereto continuing to represent (either by remaining outstanding or by being converted into voting securities of the surviving entity) at least 80% of the total voting power represented by the voting securities of the Company or such surviving entity outstanding immediately after such merger or consolidation, or (iv) the stockholders of the Company approve a plan of complete liquidation of the Company or an agreement for the sale or disposition by the Company (in one transaction or a series of transactions) of all or substantially all of the Company’s assets.
(b)“Proceeding” or “claim” shall mean any threatened, pending, or completed action, suit, or proceeding or any alternative dispute resolution mechanism (including an action by or in the right of the Company), or any inquiry, hearing, or investigation, whether conducted by the Company or any other party, that Indemnitee in good faith believes might lead to the institution of any such action, suit, or proceeding, whether civil, criminal, administrative, investigative, or other.
(c)“Term” shall have the meaning specified in Section 8 herein.
2.Agreement to Indemnify.
(a)General Agreement. Subject to Section 5, in the event an Indemnitee was, is, or becomes a party to or witness or other participant in, or is threatened to be made a party to or witness or other participant in, a Proceeding by reason of (or arising in part out of) an Indemnifiable Event, the Indemnitor shall indemnify Indemnitee from and against any and all Expenses (or portion thereof) arising from any claims made on or after the Effective Date, arising out of Indemnifiable Events that occurred prior to the Effective Date or during the Term, and that are not otherwise
-2-
indemnified or indemnifiable by the Company and certified by the Company as such. The parties hereto intend that this Agreement shall provide for indemnification in excess of that expressly permitted by statute, including, without limitation, any indemnification provided or required to be provided by the Company pursuant to an applicable Indemnification Agreement, the Company’s Certificate of Incorporation, its Bylaws, vote of its stockholders or disinterested directors, or applicable law.
(b)Claims Made. Notwithstanding anything in this Agreement to the contrary, the Indemnitor shall only be liable under this Agreement to indemnify and make payments in connection with Proceedings first instituted, or claims first made, against an Indemnitee during the Term and in connection with Proceedings first instituted, or claims first made, against an Indemnitee after the Term but that arises out of an Indemnifiable Event that occurred during the Term.
(c)Initiation of Proceeding. Notwithstanding anything in this Agreement to the contrary, no Indemnitee shall be entitled to indemnification pursuant to this Agreement in connection with any Proceeding or part thereof initiated by such Indemnitee against Indemnitor, the Company or any other director or officer of the Company unless (i) the Company has joined in or the Board has consented to the initiation of such Proceeding or part thereof; or (ii) the Proceeding or part thereof is one to enforce indemnification rights under this Agreement.
(d)Expense Advances. Subject to Section 5, if so requested by an Indemnitee prior to it being established that an Indemnitee is entitled to indemnification from the Indemnitor under this Agreement, the Indemnitor shall advance (within thirty business days following such request any and all Expenses incurred by such Indemnitee (an “Expense Advance”), provided that such Expense Advance may be conditioned upon the receipt by the Indemnitor of a written undertaking by such Indemnitee to repay such Expense Advances to the Indemnitor if and to the extent that it is ultimately determined by a court of competent jurisdiction in a final judgment, not subject to appeal, that such Indemnitee is not entitled to be indemnified by the Indemnitor hereunder.
(e)Mandatory Indemnification. Subject to Section 2(a) and Section 5 of this Agreement, notwithstanding any other provision of this Agreement, to the extent that any Indemnitee has been successful on the merits or otherwise in defense of any Proceeding relating in whole or in part to an Indemnifiable Event or in defense of any issue or matter therein, such Indemnitee shall be indemnified by Indemnitor against all Expenses incurred in connection therewith.
(f)Prohibited Indemnification. No indemnification pursuant to this Agreement shall be paid by the Indemnitor on account of any Proceeding in which judgment is rendered against any Indemnitee for an accounting of profits made from the purchase or sale by such Indemnitee of securities of the Company pursuant to the provisions of Section 16(b) of the Exchange Act, or similar provisions of any federal, state, or local laws.
3.Indemnification Payment. Indemnitee shall receive payment of any Expenses as to which such Indemnitee is entitled to indemnification from the Indemnitor in accordance with this Agreement within ten (10) business days after Indemnitee has made a valid written demand on the Indemnitor for indemnification.
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4.Notification and Defense of Proceeding. Notwithstanding anything to the contrary in this Agreement, in no event shall the Indemnitor be obligated to indemnify an Indemnitee for any Expenses or make any Expense Advances to such Indemnitee unless such Indemnitee has complied with: (i) in the case of any Expenses or Expense Advances as to which the Company would otherwise be obligated to indemnify such Indemnitee pursuant to the applicable Indemnification Agreement, all provisions in such Indemnification Agreement relating to the notification to the Company of, defense and settlement of any Proceeding relating to such Expenses (the “Notice and Defense Provisions”), and (ii) in the case of all other Expenses or Expense Advances as to which the Indemnitor is obligated to indemnify such Indemnitee hereunder, all Notice and Defense Provisions as if they applied to such Expenses or Expense Advances and replacing the rights and powers of Company with those of the Indemnitor, mutatis mutandis.
5.Limits on Indemnification.
(a)Notwithstanding anything to the contrary herein, in no event shall Indemnitor be required to make any payment or advance under this Agreement in excess of $100,000,000 in the aggregate with all payments and advances made by Indemnitor hereunder, net of any amounts repaid to the Indemnitor other than the fee pursuant to Section 6.
(b)The Indemnitor shall not be liable under this Agreement to make any payment in connection with any claim made against any Indemnitee to the extent Indemnitee has otherwise received payment (under an Indemnification Agreement, any insurance policy, Bylaw, or otherwise) of the amounts otherwise indemnifiable hereunder. Notwithstanding anything to the contrary herein, the Indemnitor may condition the payment of any amount to an Indemnitee under this Agreement on the receipt of a written undertaking from such Indemnitee to repay to the Indemnitor any amounts that are duplicative of any other payment that is ultimately received by such Indemnitee from the Company, any insurance policy or other source of funds or contribution.
6.Obligations of the Company. In exchange for Indemnitor’s agreement to indemnify pursuant to this Agreement and the other obligations of Indemnitor set forth herein, the Company agrees to pay Indemnitor a one-time fee of $972,361 upon the execution of this Agreement. In addition, the Company agrees to use its reasonable best efforts to obtain the 2020 Insurance Quote no later than the last day of the Term. In the event that the amount of such 2020 Insurance Quote multiplied by 0.125 (1/8) is greater than the one-time fee paid by the Company to Indemnitor, the Company shall pay the difference to Indemnitor.
7.Amendment of this Agreement. No supplement, modification, or amendment of this Agreement shall be binding unless executed in writing by Indemnitor and the Company with the approval of the Board. No waiver of any of the provisions of this Agreement shall be binding unless in the form of a writing signed by the party against whom enforcement of the waiver is sought, and no such waiver shall operate as a waiver of any other provisions hereof (whether or not similar), nor shall such waiver constitute a continuing waiver. Except as specifically provided herein, no failure to exercise or any delay in exercising any right or remedy hereunder shall constitute a waiver thereof.
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8.Term. This Agreement shall be effective as of the Effective Date and shall remain in effect until of the 90th day following the Effective Date, unless sooner terminated by the mutual agreement of the Indemnitor and the Company with the approval of the Board (the “Term”). Expiration or termination of this Agreement shall operate prospectively only, so that all provisions of this Agreement shall remain in full force and effect as to any claim asserted against an Indemnitee during the Term, and as to any claim asserted against an Indemnitee after the Term but that arises from an Indemnifiable Event that occurred during the Term.
9.Binding Effect. This Agreement constitutes the entire agreement between the parties hereto with respect to the subject matter hereof and supersedes all prior agreements and understandings, oral, written and implied, between the parties hereto with respect to the subject matter hereof. This Agreement shall be binding upon and inure to the benefit of and be enforceable by the parties hereto and their respective successors, assigns, spouses, heirs, and personal and legal representatives. The indemnification provided under this Agreement shall continue as to Indemnitee for any action taken or not taken while Indemnitee was serving in an indemnified capacity pertaining to an Indemnifiable Event even though s/he may have ceased to serve in such capacity at the time of any Proceeding.
10.Severability. If any provision (or portion thereof) of this Agreement shall be held by a court of competent jurisdiction to be invalid, void, or otherwise unenforceable, the remaining provisions shall remain enforceable to the fullest extent permitted by law. Furthermore, to the fullest extent possible, the provisions of this Agreement (including, without limitation, each portion of this Agreement containing any provision held to be invalid, void, or otherwise unenforceable, that is not itself invalid, void, or unenforceable) shall be construed so as to give effect to the intent manifested by the provision held invalid, void, or unenforceable.
11.Third-Party Beneficiaries. Each Indemnitee is an express third-party beneficiary of this Agreement, and may specifically enforce the Indemnitor’s or the Company’s obligations hereunder as though a party hereunder, subject to the limitations specified herein.
12.Governing Law. This Agreement shall be governed by and construed and enforced in accordance with the laws of the State of California applicable to contracts made and to be performed in such State without giving effect to its principles of conflicts of laws.
13.Counterparts. This Agreement may be executed in one or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument.
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IN WITNESS WHEREOF, the parties hereto have duly executed and delivered this Agreement as of the day specified above.
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TESLA, INC. |
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a Delaware corporation |
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By: |
/s/ Al Prescott |
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Name: |
Al Prescott |
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Title: |
Secretary |
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Certain identified information has been omitted from this document because it is not material and would be competitively harmful if publicly disclosed, and has been marked with “[***]” to indicated where omissions have been made.
Exhibit 10.5
English Convenience Translation
-Original Agreement has been executed in Mandarin Chinese-
Working Capital Loan Contract
(Version 2020)
Important Notice: This Contract is entered into by the Parties in accordance with laws based on equality and free will, and the terms and conditions of this Contract fully reflect the genuine intention of the Parties hereto. In order to protect legal rights and interests of the Borrower, the Lender hereby draws the Borrower's special attention to the terms and conditions of this Contract in relation to each Party's rights and obligations, in particular those in bold.
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Lender: Industrial and Commercial Bank of China, China (Shanghai) Pilot Free Trade Zone Lingang Special Area Branch
Person-in-charge: Zhan Sheng Contact Person: Ouyang Jing
Telephone: [***] Fax: / Email: [***]
Borrower: Tesla (Shanghai) Co., Ltd.
Legal Representative: Zhu Xiaotong Contact Person: Xian Yu
Telephone: [***]Fax: / Email: [***]
[The Borrower must insert the above information accurately and completely for the timely service of subsequent notices and legal process.]
Upon equal negotiations and mutual agreement, the Lender and the Borrower enter into this Contract in relation to the provision of relevant loan by the Lender to the Borrower.
Part I General Provisions
Clause 1 Purposes
The loans hereunder shall be used for the following purposes. Without written consent of the Lender, the Borrower may not use the loans for any purpose other than those listed below. The Lender may supervise the use of the loan.
The loans hereunder shall be applied to finance:
1. costs and expenses during the production process, including the purchase of raw materials related to the production of vehicles and parts;
2. operating expenses for the production process, including but not limited to the daily operation, wages, taxes, service fees and consulting fees;
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3. repayment of any intercompany loan (which has already been used) between affiliated companies (including but not limited to the amount borrowed or to be borrowed by the Borrower from its affiliated company), provided that such intercompany loan shall be used for the above purposes and the interest rate of such intercompany loan shall be in compliance with PRC laws; and
4. repayment of any outstanding amount under any trade finance facility.
Clause 2 Facility Amount and Loan Period
2.1 The currency of the loans under this Contract shall be RMB or USD, and the facility amount thereof shall be RMB4,000,000,000.00 (IN WORDS: RMB four billion) (or the equivalent amount drawn in USD) (if there is any inconsistency between the amount in figures and the amount in words, the amount in words shall prevail), whether the loan is drawn in RMB or USD shall be determined according to the Borrower’s actual needs.
2.2 The loan period under this Contract shall be 1 year commencing from the first drawdown date hereunder. The final maturity date shall be the date falling one (1) year from the first drawdown date.
2.3 With respect to each loan, the drawdown date shall be the date on which the loan is paid to the loan account, and the maturity date shall be the repayment date set forth in the corresponding drawdown notice; the repayment date of each loan shall be no later than the final maturity date.
Clause 3 Interest Rate, Interest and Fees
3.1 Interest Rate for Loans Drawn in RMB
The rate of interest accrued on each loan drawn in RMB shall be fixed interest rate, which shall be the 1-year (1-year/above-5-year) loan prime rate (LPR) published by the National Interbank Funding Center on 20 April 2020 minus (plus/minus) 35 basis point(s) (“BP”, one basis point equals 0.01%, similarly hereinafter), i.e. 3.5%/year (tax included (for the avoidance of doubt, excluding foreign taxes, similarly hereinafter)).
3.2 Interest Rate for Loans Drawn in Foreign Currency
The rate of interest accrued on each loan drawn in foreign currency shall be fixed interest rate , which shall be the USD Benchmark Rate plus 80 BPs (tax included). (The USD Benchmark Rate means, on the two (2) London business days prior to a relevant drawdown date, the one year London Interbank Offered Rate administered by ICE Benchmark Administration Limited (or any other person which takes over the administration of that rate) for USD quoted at 11:00 a.m. (London time) displayed on pages LIBOR01 or LIBOR02 of the Thomson Reuters screen (or any replacement Thomson Reuters page which displays that rate) or on the appropriate page of such other information service which publishes that rate from time to time in place of
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Thomson Reuters.) If the USD Benchmark Rate is no longer announced, the Borrower and the Lender shall endeavor to establish an alternate rate of interest to such USD Benchmark Rate that gives due consideration to the then prevailing market convention for determining a rate of interest for the facility in the PRC in USD at such time, and shall enter into an amendment to this Contract to reflect such alternate rate of interest (including any mathematical or other adjustments to the benchmark (if any) incorporated therein), provided that, if such alternate rate of interest as so determined would be less than zero, such rate shall be deemed to be zero for the purposes of this Contract.
3.3 Interest on any amounts outstanding hereunder shall accrue from day to day and be computed on the basis of a 360-day year and the actual number of days elapsed. The Borrower shall repay all outstanding amounts on the final maturity date.
3.4 The default interest for overdue amounts shall accrue on the overdue sum, from its due date up to the date of full payment, at 130% of the interest rate; the default interest for misappropriation shall accrue on the misappropriated amount, from the date of misappropriation until the date such misappropriation is remedied, including by using such misappropriated funds for a purpose set forth in this Contract or repayment by Borrower of such misappropriated funds, at 150% of the interest rate. If a loan is both overdue and misappropriated, the default interest rate accrued thereon shall be the higher of two.
Clause 4 Drawdown
The Borrower may (based on its actual needs) draw one or more advances under the facility before the final maturity date. There is no limitation to the number of drawdowns, but the total outstanding amount shall not exceed the facility amount described in Clause 2.1 above.
Clause 5 Repayment
The Borrower may repay any and all outstanding advances prior to the final maturity date, and the Borrower shall repay all outstanding advances on the final maturity date.
Clause 6 Special Provisions in Relation to Revolving Loan
The loans hereunder may be drawn on a revolving basis. The facility amount as set out in Clause 2 above is the limit of the revolving loan, and the term of the revolving loan shall commence on the effective date of this Contract and end on the final maturity date.
Clause 7 Financial Covenants (optional clause: this Clause is Not Applicable (Applicable/Not Applicable))
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Disputes arising out of or in connection with this Contract shall be submitted to the China International Economic and Trade Arbitration Commission, Shanghai Sub-Commission for arbitration, which shall be conducted in accordance with the arbitration rules in force at the time of the application for arbitration, and the number of arbitrators is three (3). In respect of the dispute between the Lender and the Borrower arising out of or in connection with this Contract, the Lender and the Borrower, each as a party, shall appoint one arbitrator respectively, and the third arbitrator shall be jointly appointed by the Lender and the Borrower or appointed by the Chairman with joint authorisation granted by the Lender and the Borrower. The arbitral award shall be final and binding on the Parties.
Clause 9 Miscellaneous
9.1 This Contract is executed in two originals. The Lender and the Borrower shall each keep one original, and each original shall have the same legal effect.
9.2 The following schedules and other schedules as confirmed by both Parties shall constitute an integral part of this Contract and have equal legal effect as this Contract:
Schedule 1:Form of Drawdown Notice
Schedule 2:Entrusted Payment Agreement
Schedule 3:Form of Transfer Certificate
Clause 10 Other Matters Agreed by the Parties
(1) Stamp duties
All stamp duties in respect of this Contract shall be borne by the Borrower and the Lender respectively pursuant to the laws and regulations.
(2) Costs and expenses
Any costs and expenses (including legal fees, appraiser fees, etc.) incurred in relation to the execution of this Contract and the facility hereunder (including but not limited to the expenses incurred in relation to the preparation, negotiation, printing and enforcement of this facility) shall be borne by each Party respectively.
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Clause 1 Interest Rate and Interest
1.1 The benchmark interest rate for loans drawn in foreign currency shall be determined in accordance with Clause 3.2 of Part I of this Contract.
1.2 The interest rate accrued on each loan under this Contract shall be a fixed interest rate, fixed at the time of the advance of such loan.
1.3 The Borrower shall repay interest accrued on each loan together with the principal.
1.4 Interest shall accrue on each advance commencing on the date on which such advance is paid to the loan account.
Clause 2 Drawdown and Payments
2.1 Making Advances
The Lender making an advance pursuant to Clause 2.6 (Conditions Precedent to Each Drawdown) under Part II of this Contract shall pay the advance denominated in RMB or USD under the facility to the loan account no later than 11:00 a.m. (Beijing time) of the proposed drawdown date specified in the drawdown notice in respect of that advance .
2.2 Payment of Loan
(1) If any single payment amount exceeds RMB 10,000,000 (IN WORDS: RMB ten million) or its equivalent in USD, payment by the Lender upon entrustment shall be applicable. Entrusted payment by the Lender refers to the Lender paying out each advance to the loan account on each drawdown date in accordance with the Borrower’s drawdown notice and entrustment of payment, and transferring the relevant advance to the accounts of the Borrower’s counterparty on the same day.
In the event of payment by the Lender upon entrustment, the Borrower shall submit the agreements related to the entrusted payment or documents evidencing the loan usage to the Lender before each advance is made, and the Borrower and the Lender shall enter into an entrusted payment agreement substantially in the form and substance set out in Schedule 2 (Entrusted Payment Agreement) hereof.
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(2) In addition to the circumstances stipulated in the first paragraph above, the Borrower may choose to make payment by either independent payment or entrusted payment at its own discretion. Independent payment by the Borrower means that the Lender pays out the advances to the loan account in accordance with the Borrower’s drawdown notice and the Borrower independently pays out to the Borrower’s counterparties in satisfaction of the usage purposes stipulated herein. The Borrower shall present the relevant payment list evidencing the payment status of each advance on a quarterly basis to the Lender.
(3) If the Borrower has met the conditions precedent to the first drawdown and the conditions precedent to each drawdown under Part II of this Contract, the Lender is obliged to make the advance on the proposed drawdown date.
2.3 Payment by the Borrower
The Borrower shall pay any amount payable under this Contract on its due date no later than 11:00 a.m. (Beijing Time) to the account designated by the Lender at the effective date of this Contract.
2.4 Drawdown Notice
(1) The Borrower may (based on its actual needs) draw one or more advances under the facility before the final maturity date in accordance with the provisions hereof. There is no limitation on the number of drawdowns, but the total outstanding advances shall not exceed the facility amount described in Clause 2.1 under Part I of this Contract.
(2) In connection with a request for an advance, the Borrower shall deliver a drawdown notice to the Lender no later than three (3) business days prior to the proposed drawdown date specified in the drawdown notice.
(3) Each drawdown notice shall satisfy the following requirements: (1) it shall be substantially in the form and substance set out in Schedule 1 (Form of Drawdown Notice) hereof; (2) it shall be executed by the authorized signatory of the Borrower (including through handwritten signing or affixing chop of legal representative or affixing signature chop) or by stamping the Borrower’s official seal; (3) the proposed drawdown date specified in the drawdown notice shall be a business day; (4) the proposed drawdown amount shall not exceed the facility amount available as of the date of such drawdown notice.
2.5 Conditions Precedent to the First Drawdown
Before the first drawdown, the Borrower shall provide the Lender with the following documents or complete the following matters to the satisfaction of the Lender, and the Lender shall not unreasonably refuse or delay to confirm the satisfaction of each following conditions precedent:
(1) this original copy of the executed version of this Contract;
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(2) photocopies (stamped with the Borrower’s official seal) of the latest business license, the latest articles of association, and the original copy of the board resolutions of the Borrower;
(3) the loan account has been opened;
(4) the Shanghai foreign investment project filing certificate stamped with the Borrower’s seal relating to the project obtained by the Borrower (the Project Shanghai Code: 310115MA1H9YGWX20195E2101001);
(5) a photocopy of the evidence that the Borrower has obtained the environment impact assessment filling certificate in relation to the project, stamped with the Borrower’s official seal;
(6) a photocopy of the production permit stamped with the Borrower’s official seal; and
(7) if the advance will be in the form of an entrusted payment, submitting a scanned copy of the relevant agreement or proof of use of the entrusted payment or photocopies of such evidence stamped with the Borrower’s official seal.
2.6 Conditions Precedent to Each Drawdown
The Lender shall confirm that each of the condition precedents set out below have been satisfied (such conditions precedent shall be satisfactory to the Lender provided that such satisfaction shall not be unreasonably withheld or delayed), or the Lender has otherwise waived the condition.
(1) The Lender has received a drawdown notice issued by the Borrower in accordance with the provisions hereof .
(2) On the proposed drawdown date specified in the drawdown notice, each representation of fact made by the Borrower in Clause 7 under Part II of this Contract is true and correct in all material respects with the same effect as though such representation of fact had been made on such drawdown date, it being understood and agreed that any representation of fact which by its terms is made as of a specified date shall be required to be true and correct in all material respects only as of such specified date.
(3) On the proposed drawdown date specified in the drawdown notice, no event of default by the Borrower has occurred and is continuing.
(4) The Borrower has provided the scanned copies of the Environment Influence Assessment Filing Certificate or photocopies of such certificate stamped with the Borrower’s official seal.
(5) If the advance will be in the form of an entrustment payment pursuant to Clause 2.2 under Part II of this Contract, the scanned copies of relevant supporting agreements or documents evidencing the loan purpose or photocopies of such evidence stamped with the Borrower’s official seal are provided where entrusted payment applies, except where such materials have already been provided.
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Clause 3 Repayment and Prepayment
3.1 The Borrower may repay any and all outstanding advances prior to the final maturity date, and the Borrower shall repay all outstanding advances on the final maturity date.
3.2 The Borrower shall notify the Lender in writing (the “Prepayment Notice”) no later than three (3) business days prior to the proposed prepayment date. The Borrower shall not pay any penalties or any fees regarding any such prepayment, provided that prepayment of the principal amount shall be made together with the interest accrued on such prepaid principal through the applicable prepayment date. Any repayment amount made prior to the final maturity date could be borrowed again. The amount of each prepayment by the Borrower shall not be less than RMB 10 million, but the foregoing shall not apply if the Borrower prepays all outstanding advances in full. Amounts prepaid shall offset the principal of the outstanding advances in the reverse order.
Clause 4 Revolving Loan
The facility hereunder may be used on a revolving basis, provided that the aggregate amount of the outstanding advances at any time within the loan period shall not exceed the facility amount.
Clause 5 Security (Not Applicable)
Clause 6 Account Management
6.1 The Borrower shall designate its account opened with the Lender (account number: 1001727329300012609) as the collection account, which will be used to collect sales revenue or funds to be used to repay the loan.
6.2 The Lender may monitor the collection account, including but not limited to monitoring and supervising income and expenditure of such account, for which the Borrower shall give assistance.
Clause 7 Representations and Warranties
The Borrower makes the following representations to the Lender on the effective date hereof and on each drawdown date (except for Clause 7.8 (No Material Default) and Clause 7.9 (No Material Litigation and Arbitration) which shall only be given on the effective date hereof) with reference to the facts and circumstances then subsisting:
7.1 Legal Status
The Borrower is a company duly incorporated and validly existing under the laws and regulations of the PRC.
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The Borrower has necessary capacity for civil conduct and capacity for civil rights to own its assets, to carry out its operations and to enter into and perform this Contract.
7.3 Authorization
All necessary internal authorizations for the Borrower to enter into and perform this Contract have been duly obtained, and this Contract has been duly executed by the authorized signatory of the Borrower.
7.4 Legality
Subject to the Legal Restraint, the obligations to be assumed by the Borrower under this Contract constitute the legal, valid and binding obligations of the Borrower.
“Legal Restraint” means (1) the principle that fair compensation may be granted or denied in accordance with the discretion of the court; (2) in relation to bankruptcy, reorganization and other legal events that may generally affect creditors, the laws that enforce the performance of priority obligations; (3) statutory limitation period of legal restrictions; (4) defense for set-off and counterclaims; and (5) any other restriction or reservation under any other generally applicable law set out in the legal opinion, if any, delivered to the Lender under this Contract.
7.5 Breach of Other Documents
The entering into and performance by the Borrower of this Contract do not and will not violate (a) its articles of association, and/or (b) any applicable laws of the PRC.
7.6 Liquidation and Bankruptcy Events
The Borrower has not entered into any liquidation process, nor is there any bankruptcy event.
7.7 Information
All written documents provided by the Borrower are true and valid in all material aspects as of the date of delivery of the same.
7.8 No Material Default
To the Borrower’s knowledge, as of the effective date hereof, there is no material default of the Borrower under any agreement to which it is a party (material is defined as RMB500,000,000 (or its equivalent in other currency)).
7.9 No Material Litigation and Arbitration
To the Borrower’s knowledge, as of the effective date hereof, there is no litigation or arbitration of the Borrower that will produce any Material Adverse Effect (other than those of a frivolous or vexatious nature which the Borrower is contesting in good faith).
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“Material Adverse Effect” means, in the reasonable opinion of the Lender, a material adverse effect on: (i) the ability of the Borrower to perform its payment obligations thereunder, or (ii) the legality, validity or enforceability of this Agreement.
Clause 8 Covenants by the Borrower
The Borrower undertakes with the Lender as follows:
8.1 Compliance with Law
The Borrower shall ensure that any laws, regulations and rules relevant to its business and operation will be complied with in all material respects.
8.2 Supply of Information
The Borrower shall, within one hundred and eighty (180) days after the end of each financial year or such longer period as consented by the Lender (and the Lender shall not unreasonably reject or delay to give such consent), provide the Lender with its audited financial statements (financial year means a period commencing from and including January 1st and ending on and including December 31st of each calendar year).
The Borrower shall, within ninety (90) days after the end of each semi-financial year or such longer period as consented by the Lender (and the Lender shall not unreasonably reject or delay to give such consent), provide the Lender with its unaudited financial statements in respect of that semi-financial year.
8.3 Reduction of Registered Capital
There can be no reduction of the registered capital of the Borrower during the loan period without the prior consent of the Lender.
8.4 Negative Pledge
The Borrower shall not create any security interests over any of its inventory or account receivable, except for:
1. any lien arising in the ordinary course of trading, any statutory priority and other security interests arising by operation of laws and regulations,
2. security interests arising in the ordinary course of the business of the Borrower (including but not limited to any priority over goods, materials or equipment (acquired in an arm’s length transaction) incurred or constituted by any title retention arrangement in the terms and conditions set out by the supplier or seller in relevant agreements),
3. security interests created according to this Contract , or
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4. security interests created with the consent of the Lender (such consent shall not be unreasonably withheld or delayed by the Lender).
8.5 Material Default Notification
The Borrower shall notify the Lender of material default under any liability of the Borrower to any third party (material is defined as exceeding the greater of (i) RMB750,000,000 (or its equivalent in other currency) or (ii) 20% of the Borrower’s net assets).
“Net Assets” means at any time of determination thereof, the owner’s equity of the Borrower as set forth in the most recent financial statements of the Borrower deliverable to the Lender pursuant to this Contract.
Clause 9 Undertakings of the Lender
9.1 The Lender shall make advances to the Borrower in accordance with this Contract.
9.2 Confidentiality Obligations of the Lender
The Lender agrees that it will not, and shall procure that its senior managers, directors, employees, affiliates, advisors and agents (the Lender may only disclose relevant information to the said persons when necessary) will not disclose, announce or otherwise publish to any third party any information including but not limited to provisions of this Contract, this loan, the Borrower and its shareholders. The Lender shall especially abide by the followings:
1. The Lender shall ensure that its senior managers, directors, employees, affiliates, advisors and agents will not disclose, announce or otherwise publish (including but not limited to publishing in any social media (including microblog and Wechat)) to any third party any information relating to the transactions contemplated hereunder, and the price information herein shall not be disclosed or otherwise used by the foresaid person.
2. The Lender will not, and shall ensure that its senior managers, directors, employees, affiliates, advisors and agents will not, accept any interview by any media (including but not limited to any social media) in respect of the project or the transactions contemplated hereunder or agree to report the same.
Any confidentiality agreement or agreement relating to information disclosure already signed by each Party before the execution of this Contract shall be still applicable to the confidential information of the Borrower provided by the Borrower or any third party during the negotiation, execution and performance of this Contract. During the tenor of this Contract and until two (2) years or any longer period as may be required by applicable laws and regulations after the termination or expiration of this Agreement, the terms and conditions contained in such confidentiality agreement or agreement relating to information disclosure shall remain valid and effective. In the event of any conflict between such confidentiality agreement or agreement relating to information disclosure and this Contract, the provisions imposing stricter confidentiality obligations on the Lender shall always prevail.
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Certain identified information has been omitted from this document because it is not material and would be competitively harmful if publicly disclosed, and has been marked with “[***]” to indicated where omissions have been made.
However, the following disclosures made by the Lender shall be exempted:
1. information already known to the public (other than by reason of the Lender’s breach of this clause);
2. information disclosed in compliance with and to the extent required by competent government or regulatory authority according to laws and regulations, and the relevant disclosure shall be limited to the minimum extent as required by the competent government, regulatory authority and laws and regulations;
3. information disclosed in compliance with the listing rules of the stock exchange where it is listed, and the relevant disclosure shall be limited to the minimum extent as required by the listing rules of the stock exchange where it is listed;
4. information disclosed with the Borrower’s prior written consent.
Clause 10 Event of Default
10.1 Only the following events constitute events of default by the Borrower:
1. Payment Default
The Borrower fails to pay any amount due and payable on the final maturity date in accordance with the provisions of this Contract, and fails to remedy such default within twenty (20) days from the final maturity date.
2. Misappropriation
The Borrower misappropriates any advance within the loan period and fails to remedy, including by using such misappropriated funds for a purpose set forth in this Contract or repayment by Borrower of such misappropriated funds, within twenty (20) days upon occurrence of such misappropriation.
3. Misrepresentation
The representations or statements made in Clause 7 under Part II of this Contract by the Borrower are untrue and cause a Material Adverse Effect, and the Borrower fails to remedy such default within forty-five (45) days from the date on which the Lender issues a written notice to the Borrower.
4. Breach of Other Obligation
The Borrower fails to perform the covenants made in Clause 8 under Part II of this Contract or comply with other obligations hereunder and causes a Material Adverse Effect, and fails to remedy such default within forty-five (45) days from the date on which the Lender issues a written notice to the Borrower.
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The Borrower is insolvent or enters into bankruptcy process and fails to remedy or terminate the bankruptcy process within sixty (60) days upon the occurrence of such events.
6. Enforcement Events
The assets of the Borrower with an aggregate value exceeding the greater of (1) RMB750,000,000 (or its equivalent in another currency) or (2) 20% of the Borrower’s Net Assets are enforced, distressed, seized or frozen based on the final judgment of the court, and such actions are not discharged within sixty (60) days.
7. Cross Default
The Borrower fails to pay any uncontested indebtedness with an aggregate value exceeding the greater of (i) RMB750,000,000 (or its equivalent in another currency) or (ii) 20% of the Borrower’s Net Assets on the maturity date or upon expiry of the grace period, and fails to remedy within one hundred and eighty (180) days from the date on which the Lender issues a written notice.
10.2 Remedies Available to the Lender
1. During the period when any event of default has occurred and is continuing, the Lender may, after giving written notice to the Borrower, exercise one or more of the following rights in any order:
(1) to grant any waiver or approve any remedy of the relevant event of default;
(2) to declare suspension of all or any part of advances requested in any drawdown notice which have not been drawn;
(3) to cancel all or any part of the facility, and the part so cancelled may not be borrowed again; and
(4) to declare all or any outstanding advances together with all accrued interests, fees (if any) and other amounts hereunder immediately due and payable.
2. Undertakings of the Lender
The Lender agrees not to exercise any of its rights hereunder in a way that would conflict with this Contract.
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Clause 11 Transfer of Rights and Obligations
11.1 Transfer by the Lender
If the Lender (the “Transferring Lender”) intends to transfer all or any of its rights and/or obligations hereunder to one or more financial institutions (the “Transferee Bank”), it shall give at least ten (10) business days’ prior notice (the “Transfer Notice”) and obtain the prior written consent of the Borrower. However, no prior written consent is required under the following circumstances: (1) the Transferring Lender transfers all or any rights and/or obligations hereunder to its branches or sub-branches; and (2) an event of default has occurred and is continuing.
The transfer made by the Lender in accordance with Clause 11.1 (Transfer by the Lender) under Part II of this Contract shall take effect upon the date specified in a duly completed Transfer Certificate in the form and substance set out in Schedule 3 (Form of Transfer Certificate) hereof and executed by the Transferring Lender and the Transferee Bank. The execution of a Transfer Certificate shall not be withheld or delayed by the Lender.
11.3 Binding Effect of a Transfer
Any transfer effected and completed in accordance with this Contract shall be binding on each Party to this Contract.
11.4 Consequences of a Transfer
From the date a transfer takes effect, the Transferee Bank becomes the Lender and to the extent of the transfer subject as specified in the Transfer Certificate:
(1) the Transferring Lender shall no longer enjoy rights and bear liabilities under this Contract in relation to the transfer object; and
(2) the Transferee Bank shall enjoy all the rights and bear all the obligations under this Contract in relation to the transfer object.
11.5 Limitation of Liabilities of the Transferring Lender
The Transferring Lender shall bear no liability to the Transferee Bank for any of the following:
1. the due execution, genuineness, accuracy, completeness, legality, effectiveness or enforceability of this Contract or any other document in connection herewith;
2. the receivability of any payment due under this Contract; and
3. the accuracy and completeness of the representations of facts made by the other Party to this Contract to any person under or in connection with this Contract.
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11.6 Further Limitation of Liabilities of the Transferring Lender
The Transferring Lender is not obliged to:
1. retrieve from any Transferee Bank any right and/or obligation which is already transferred to that Transferee Bank in accordance with provisions of this Contract.
2. indemnify any Transferee Bank against any losses incurred by it as a result of the breach of any obligation by the Borrower under this Contract.
The Lender may change its lending office by giving the Borrower at least twenty (20) business days’ prior notice.
Clause 12 Effectiveness, Amendment and Termination
12.1 This Contract shall take effect upon affixing company seal or contractual seal by both Parties, and shall terminate when the Borrower has fulfilled all the obligations hereunder.
12.2 Any amendment to this Contract shall be agreed by both Parties and be made in writing. The amendment clause or agreement shall be an integral part of this Contract with equal legal effect. The provisions of this Contract which are not amended shall remain effective. The provisions hereof which are to be amended shall remain effective until the relevant amendment takes effect.
12.3 Amendments to and release of this Contract shall not prejudice each Party’s right to claim compensation for loss. The dispute resolution provision hereof shall survive the termination of this Contract.
Clause 13 Governing Laws and Dispute Resolution
13.1 Governing Law
This Contract is governed by and shall be construed in accordance with the laws of the PRC (for the purpose of this Contract the laws of the PRC shall not include the laws of Hong Kong Special Administrative Region, Macau Special Administrative Region and Taiwan Region).
Disputes arising out of or in connection with this Contract shall be submitted to the China International Economic and Trade Arbitration Commission, Shanghai Sub-Commission for arbitration, which shall be conducted in accordance with the arbitration rules in force at the time of the application for arbitration, and the number of arbitrators is three (3). In respect of the dispute between the Lender and the Borrower arising out of or in connection with this Contract, the Lender and the Borrower, each as a party, shall appoint one arbitrator respectively, and the third arbitrator shall be jointly appointed by the Lender and the Borrower or appointed by the Chairman with joint authorisation granted by the Lender and the Borrower. The arbitral award shall be final and binding on both Parties.
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Certain identified information has been omitted from this document because it is not material and would be competitively harmful if publicly disclosed, and has been marked with “[***]” to indicated where omissions have been made.
Clause 14 Address for Service of Litigation/Arbitration Process
14.1 The Borrower confirms that the address set forth on the first page of this Contract shall be the address for service of the litigation/arbitration process in relation to any dispute hereunder. Such litigation/arbitration process includes without limitation the subpoena, notice of court session, judgment, ruling, mediation agreement and notice of performance within a prescribed time limit.
14.2 The Borrower agrees that the arbitration institution or the court may use the fax and email provided on the first page of this Contract for the service of litigation/arbitration process except for the judgment, ruling and mediation agreement.
14.3 The service provisions above shall apply to each phase of the arbitration or litigation, including the first and second instances, retrial and enforcement. The arbitration institution or the court may directly deliver any instrument by mail to the above address for service of process.
14.4 The Borrower shall ensure that the address, contact person, fax, email and other information set forth herein shall be true and valid. In case of any change to the relevant information, the Borrower shall promptly notify the Lender in writing; otherwise, services to the initial address shall remain effective, and any legal consequences arising therefrom shall be solely borne by the Borrower.
Clause 15 Entire Contract
Part I (General Provisions) and Part II (Specific Provisions) hereof shall together constitute the entire Working Capital Loan Contract. A term used in both Parts shall have the same meanings. The Borrower shall be bound by the two Parts jointly. In the event of any conflict between Part I and Part II, Part II shall always prevail.
Clause 16 Notices
16.1 Methods of Notices
Any notice, demand or other document from one Party to the other hereto pursuant to the provisions of this Contract shall be made in writing and be delivered to that Party at such correspondence address or email address and marked for the attention of the persons (if any) as that Party may designate from time to time in writing. The initial contact address, telephone number, email address and contact persons designated by each Party are specified on the first page of this Contract.
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Certain identified information has been omitted from this document because it is not material and would be competitively harmful if publicly disclosed, and has been marked with “[***]” to indicated where omissions have been made.
Any communication made between the Parties hereto in accordance with the provisions of this Contract shall be deemed as having been received upon satisfaction of the following conditions:
1. if delivered in person, at the time of actual delivery;
2. if transmitted by email, when received in a legible form;
3. if sent by mail, on the fifth (5) business day following the date of posting by registered mail at the correct address.
The Borrower shall promptly notify the Lender of any change to the correspondence address, telephone number or email address. Any change of the Borrower shall become effective upon notification of the Borrower to the Lender. Upon receipt of such notice, the Lender shall forthwith notify other Parties hereto of any such change.
Any notice under or in connection with this Contract shall be prepared and issued in Chinese.
Clause 17 Special Provisions on Value Added Taxes (“VAT”)
17.1 Any interests and fees to be paid by the Borrower to the Lender hereunder shall be tax-included.
17.2 If the Borrower requests the Lender to issue any VAT invoice, it shall firstly register its information with the Lender, including its full name, taxpayer's identification number or social credit code, address, telephone number, deposit bank and account number. The Borrower shall ensure that the relevant information provided to the Lender is true, accurate and complete, and it shall provide relevant supporting documents as requested by the Lender according to the specific requirements published by the Lender through notice in its office or announcement on its website.
17.3 If the Borrower is collecting the VAT invoice on its own, it shall provide a power of attorney affixed with its stamp designating the person collecting the invoice and specifying the identity card number and other information of such person to the Lender, and the designated person shall collect the VAT invoice with his/her original identity card. In case of change of designated person, the Borrower shall reissue the power of attorney affixed with its stamp to the Lender. If the Borrower chooses to collect the VAT invoice by mail, it shall also provide correct and valid mailing details. In case of any change in the mailing details, it shall timely notify the Lender in writing.
17.4 If the Lender fails to issue the VAT invoice in a timely manner due to natural disaster, government act, social disruption and other force majeure events or reasons on the part of tax authorities, the Lender has the right to delay issuance of the invoice within a reasonable period without any liability.
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17.5 If the Borrower fails to receive the corresponding sheet of the VAT invoice or to offset any taxes due to loss of, damage to or overdue declaration of the VAT invoice after such invoice is collected by the Borrower, the Lender is not liable for compensating the relevant financial losses suffered by the Borrower. However, the Lender shall compensate the relevant financial losses suffered by the Borrower if the loss of, damage to or overdue declaration of any invoice is attributable to the Lender.
17.6 If it is necessary to issue red-letter VAT invoices due to reasons such as return of goods sold, suspension of taxable service or error in invoicing, or failure of authentication of both the offsetting sheet and invoice sheet, and if the Borrower is required to submit the Information Sheet for Issuing Red-Letter VAT Invoice to the tax authority according to relevant laws, regulations and policies, the Borrower shall submit the Information Sheet for Issuing Red-Letter VAT Invoice to the tax authority and the Lender will issue a red-letter VAT invoice after the tax authority approves and notifies the Lender.
17.7 During the performance hereof, in case of adjustment of tax rate by the government, the Lender has the right to adjust the price stipulated herein according to such change.
Clause 18 Miscellaneous
18.1 Neither failure to exercise nor delay in exercising on the part of the Lender any right under this Contract shall operate as a waiver, nor shall any single or partial exercise of any right prevents the Lender from any further or otherwise exercise of any other rights.
18.2 If at any time any provision of this Contract is held to be illegal, invalid, or unenforceable in any respect, the legality, validity or enforceability of any other provisions of this Contract shall not be affected or prejudiced.
18.3 The bills and vouchers in respect of the facility hereunder prepared and maintained by the Lender in accordance with its business rules shall constitute the valid evidence of the creditor-debtor relationship between the Borrower and the Lender, and shall be binding on the Borrower.
18.4 During the term of this Contract, if the Lender cannot continue to perform this Contract in part or in whole due to any enactment or amendment of any laws and regulations, state policies or regulatory rules, it shall communicate with the Borrower in a timely manner, cancel the loans undrawn, and take other necessary measures acceptable to both Parties in accordance with relevant provisions.
18.5 In this Contract, (i) any reference to this Contract shall include the amendment or supplement hereto; (ii) the headings are only for the convenience of reference and shall not constitute any construction of this Contract or limitation of the contents thereunder or scope thereof howsoever.
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Certain identified information has been omitted from this document because it is not material and would be competitively harmful if publicly disclosed, and has been marked with “[***]” to indicated where omissions have been made.
18.6 This Contract is made and executed in Chinese; this English version is prepared for reference only; if there is any discrepancy, the Chinese version controls.
The Parties acknowledge that sufficient consultations have been carried out on all the provisions of this Contract by the Borrower and the Lender. The Lender has drawn the Borrower’s special attention to all the provisions in relation to each Party’s rights and obligations, requested the Borrower to fully and accurately understand such provisions, and made clarifications and explanations in respect of relevant provisions at the Borrower’s request. The Borrower has carefully read and fully understood all the provisions hereunder, including those in Part I (General Provisions) and Part II (Specific Provisions). Each Party’s understanding of each provision hereunder is completely consistent with that of the other, and has no objection against the contents hereof.
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Lender (Seal): Industrial and Commercial Bank of China, China (Shanghai) Pilot Free Trade Zone Lingang Special Area Branch
Date: May 7, 2020
Borrower (Seal): Tesla (Shanghai) Co., Ltd.
Date: May 7, 2020
I, as the legal representative/authorized representative of the Borrower, hereby acknowledge that the Borrower has made the borrowing from the Lender in accordance with the provisions hereof and fully completed all the procedures necessary for the borrowing, and the seal affixed on this Contract is genuine and valid.
Legal Representative/Authorized Representative of the Borrower (Signature): /s/ XiaoTong Zhu(Seal)
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Certain identified information has been omitted from this document because it is not material and would be competitively harmful if publicly disclosed, and has been marked with “[***]” to indicated where omissions have been made.
Schedules Listed Below Omitted Pursuant to Regulation S-K Item 601(a)(5)
Schedule 1: Form of Drawdown Notice
Schedule 3: Form of Transfer Agreement
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Certain identified information has been omitted from this document because it is not material and would be competitively harmful if publicly disclosed, and has been marked with “[***]” to indicated where omissions have been made.
SCHEDULE 2
Ref. No.: [***]
Entrusted Payment Agreement
Principal (Party A): Tesla (Shanghai) Co., Ltd.
Address: No.5000 Jiangshan Road, China (Shanghai) Pilot Free Trade Zone Lingang Special Area
Legal Representative: Xiaotong Zhu
Agent (Party B): Industrial and Commercial Bank of China, China (Shanghai) Pilot Free Trade Zone Lingang Special Area Branch
Address: No.555 South Xinyuan Road, Pudong New Area, Shanghai
Whereas:
(1) Party A and Party B have entered into the Working Capital Loan Contract (contract no.: [***], “Finance Contract”), by which Party B extends a facility to Party A.
(2) In accordance with the relevant regulatory rules and Party B’s management requirements, entrusted payment shall be applicable if the payment amount meets certain conditions or Party A agrees to adopt payment by Party B upon entrustment. Entrusted payment refers to the Lender paying out an advance to the accounts of the Borrower’s counterparty for the relevant loan purpose in accordance with the Borrower’s drawdown notice and entrustment of payment.
In order to specify the entrusted payment of financing amounts, Party A and Party B enter into this Agreement upon equal negotiations.
Clause 1 Condition for Entrusted Payment
If any single payment amount under the Finance Contract by Party A exceeds RMB 10,000,000, entrusted payment shall be applicable.
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Certain identified information has been omitted from this document because it is not material and would be competitively harmful if publicly disclosed, and has been marked with “[***]” to indicated where omissions have been made.
Clause 2 Authorization and Entrustment
In respect of an advance that meets the conditions for entrusted payment herein, Party A authorizes and entrusts Party B to pay out such advance to the designated loan account of Party A, and transfer the relevant advance to the accounts of the Borrower’s counterparty for the loan purpose as agreed under the Finance Contract. Party A shall provide Party B with payment voucher and other relevant materials upon Party B’s request.
The loans under the Finance Contract shall be applied to finance:
1. costs and expenses during the production process, including the purchase of raw materials related to the production of vehicles and parts;
2. operating expenses for the production process, including but not limited to the daily operation, wages, taxes, service fees and consulting fees;
3. repayment of any intercompany loan (which has already been used) between affiliated companies (including but not limited to the amount borrowed or to be borrowed by Party A from its affiliated company), provided that such intercompany loan shall be used for the above purposes and the interest rate of such intercompany loan shall be in compliance with PRC laws; and
4. repayment of any outstanding amount under any trade finance facility.
Clause 3 Entrusted Payment
(1) In the event of entrusted payment, Party A shall open or designate a special account with Party B for the use of entrusted payment.
(2) In the event of entrusted payment, Party A shall provide Party B with the information about its loan account and the accounts of its counterparties, and relevant supporting materials evidencing the loan purpose when each advance is made. Party A shall undertake that all materials provided to Party B are true, complete and valid.
(3) In the event of entrusted payment, Party B will only conduct a formality examination of, among others, the information about Party A’s counterparties and the supporting documents evidencing the loan purpose provided by Party A. If the materials provided by Party A are not true, accurate or complete, Party B shall inform Party A of all the materials to be supplemented within one (1) business day after receipt of the above materials.
(4) If Party B finds any inconsistency or other defects in the supporting documents evidencing the loan purpose and other relevant materials provided by Party A upon examination, Party B has the right to request Party A to supplement, replace, explain or resubmit the relevant materials. Party B has the right to reject relevant advance and payment until Party A submits the materials to the satisfaction of Party B; provided that Party B shall not unreasonably refuse or delay to confirm the satisfaction of such materials.
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(5) Depending on the loan purposes of Party A, if necessary, Party B may reasonably request Party A, independent intermediaries and other relevant parties to provide a joint verification form and other relevant supporting documents, and then by relying on such materials, Party B will make the advance and payment. Party B shall inform Party A of such request as early as possible so that Party A has sufficient time to prepare for such matters.
(6) If Party B, upon examination, thinks that the materials provided by Party A conform to the loan purposes as agreed herein and that the drawdown meets the conditions precedent under the Finance Contract, Party B shall firstly transfer the advance to Party A's loan account and then, according to the needs and the relevant business vouchers provided by Party A, transfer the relevant advance to the accounts of Party A’s counterparties.
Clause 4 Account Freezing or Suspension
If Party B is unable to timely pay any amount as entrusted by Party A due to the freezing or attachment of Party A’s loan account or the accounts of Party A’s counterparties by any competent authority, Party B shall assume no liability and Party A’s repayment obligations already incurred under the Finance Contract shall not be affected.
Clause 5 Supervision and Inspection of Independent Payment
In the event of independent payment by Party A of the advances under the Finance Contract, Party A undertakes to accept and actively cooperate with the reasonable inspection and supervision by Party B of the utilization of the loans, including the purpose thereof, by means of account analysis, inspection of certificates, on-site investigation and otherwise, and to regularly report the utilization of the loans as required by the Finance Contract.
Clause 6 Force Majeure and Accident
Party B shall not be liable for its failure to timely make advances and payments due to war, natural disaster or other force majeure events that are unforeseeable, unavoidable and insurmountable, or due to failure of Party B’s system or communication or other accidents, provided that Party B shall immediately give a notice to and communicate with Party A about loss reduction. Party B shall compensate for any loss suffered by Party A due to Party B’s delay in notification.
Clause 7 Effectiveness and Termination
This Agreement shall take effect upon affixing company seal or contractual seal by both Parties, and shall terminate when Party A has drawn all loans under the Finance Contract (including the cancellation by Party B of all undrawn amounts under the Finance Contract in accordance with provisions thereof) and Party B has completed the entrusted payment.
Clause 8 Miscellaneous
This Agreement shall be a schedule to and have the same legal effect as the Finance Contract. For any matter not covered herein, the Finance Contract shall apply.
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Tesla (Shanghai) Co., Ltd. |
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(Seal) |
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/s/ Xiaotong Zhu (Seal) |
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May 7, 2020 |
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Party B: |
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Industrial and Commercial Bank of China, |
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China (Shanghai) Pilot Free Trade Zone Lingang Special Area Branch |
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(Seal) |
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/s/ Jing Ouyang (Seal) |
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ELEVENTH AMENDMENT TO AMENDED AND RESTATED AGREEMENT FOR RESEARCH & DEVELOPMENT ALLIANCE ON TRIEX MODULE TECHNOLOGY
This ELEVENTH AMENDMENT TO AMENDED AND RESTATED AGREEMENT FOR RESEARCH & DEVELOPMENT ALLIANCE ON TRIEX MODULE TECHNOLOGY (this “Eleventh Amendment”) is effective as of July 22, 2020 (the “Effective Date”) and is by and among THE RESEARCH FOUNDATION FOR THE STATE UNIVERSITY OF NEW YORK (“FOUNDATION”), a non-profit educational corporation existing under the laws of the State of New York, having an office located at 257 Fuller Road, Albany, New York 12203, on behalf of the Colleges of Nanoscale Science and Engineering of the State University of New York Polytechnic Institute SILEVO, LLC (as successor in interest of SILEVO INC.) (“SILEVO”), a Delaware limited liability company with offices at 47700 Kato Road, Fremont, California 94538 and TESLA ENERGY OPERATIONS, INC. (“TEO”), a Delaware corporation with offices at 47700 Kato Road, Fremont, California 94538. FOUNDATION, SILEVO and TEO are each referred to herein sometimes individually as a “Party” or, collectively, as “Parties.”
RECITALS
1.1FOUNDATION and SILEVO entered into that certain Amended and Restated Agreement for Research & Development Alliance on Triex Module Technology effective as of September 2, 2014, as amended by a First Amendment thereto effective as of October 31, 2014, a Second Amendment thereto effective as of December 15, 2014, a Third Amendment thereto effective as of February 12, 2015, a Fourth Amendment thereto effective as of March 30, 2015, a Fifth Amendment thereto effective as of June 30, 2015, a Sixth Amendment thereto effective as of September 1, 2015, a Seventh Amendment thereto effective as of October 9, 2015, an Eighth Amendment thereto effective as of October 26, 2015 (the “Eighth Amendment”), a Ninth Amendment thereto effective as of December 9, 2015 (the “Ninth Amendment”), and a Tenth Amendment thereto effective as of March 31, 2017 (as amended, the “Agreement”).
1.2TEO acquired SILEVO in 2014 and FOUNDATION and SILEVO now wish for TEO to become a party to the Agreement by executing this Amendment.
1.3FOUNDATION, SILEVO, and TEO wish to amend the Agreement as more particularly set forth herein.
THEREFORE, in consideration of the mutual promises and covenants contained in this Amendment and other good and valuable consideration, the receipt and sufficiency of which hereby are acknowledged, and intending to be legally bound hereby, the Parties agree as follows as of the Effective Date.
1. Section 2.1 of the Agreement is deleted in its entirety and replaced with the following:
“Affiliate means an entity that Controls, is Controlled by, or is under common Control with, another entity, but only during the period that such control exists. For purposes of this Agreement, FOUNDATION’s Affiliates shall be deemed to include Fort Schuyler Management Corporation (“FSMC”), New York Center for Research, Economic Advancement, Technology, Engineering and Science Corp., d/b/a NY CREATES, New York State Urban Development Corporation, d/b/a Empire State Development, SUNY Polytechnic Institute Foundation, Inc., SUNY Polytechnic Institute, the State of New York, and the State University of New York. For purposes of this Agreement, SILEVO’s Affiliates shall be deemed to include, without limitation, TeO fka SolarCity Corporation, and Tesla, Inc.
2.A new Section 4.1(i) of the Agreement is hereby added as follows:
“On or prior to May 31 of each year (the “Reporting Date”) during the term of the Agreement until 2029, SILEVO shall annually report to FOUNDATION and Empire State Development on behalf
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Amendment 11 |
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of SILEVO, its Affiliates, and each Collocated Entity (as defined in Section 4.3(a)(2) of the Agreement), concerning compliance with the Investment & Spending requirements contained in Section 4.3 of the Agreement and the Employment Targets contained in Section 4.4 of the Agreement using a form substantially similar to Exhibit 2 to this Amendment. Separate reports shall be submitted for: (i) SILEVO and its Affiliates; (ii) each Collocated Entity; and (iii) each Employment Contractor whose employees are being reported pursuant to Section 4.4 (each, a “Reporting Entity”), in accordance with Exhibit 2.
Subject to SILEVO’s reasonable confidentiality requirements, SILEVO shall also provide to FOUNDATION, or make available for inspection by FOUNDATION, or to Empire State Development as directed by FOUNDATION, copies of documentation as reasonably required by FOUNDATION to validate the accuracy of each report, which may include for each Reporting Entity the subject entity’s Form NYS-45 ATT and New York Multiple Worksite Report (if applicable). Without limitation, the foregoing report shall include aggregate, cumulative totals with sufficient detail to illustrate SILEVO’s compliance with the foregoing contractual requirements.
For purposes of the Agreement, including Section 4.3 and Exhibits A and G, cumulative investments shall include all amounts spent or incurred by or for SILEVO on or after January 1, 2015.
3.Section 4.3 (SILEVO Investment & Spending) of the Agreement is deleted in its entirety and replaced with the following:
“(a)In accordance with and subject to the terms set forth in this Agreement, including Exhibit A, providing FOUNDATION performs its obligations as required hereunder: (i) SILEVO commits to invest and spend in the Manufacturing Operation at a level that ensures competitive product costs as determined by the market place for a minimum of five (5) years from the date of Manufacturing Facility Completion; (ii) SILEVO will be responsible for and pay all costs associated with operation of the Manufacturing Facility during the Term after the date of Manufacturing Facility Completion; and (iii) SILEVO will spend or incur approximately $5 Billion in combined capital, operational expenses, and other costs in New York State (which, for the avoidance of doubt, shall include amounts spent or incurred by SILEVO for consumables and raw materials consumed or used by SILEVO at the Manufacturing Facility or other manufacturing facility in the State of New York and amounts spent on employment, labor, and services), including at its next generation manufacturing, business, and related operation in Western New York, during the ten (10) year period commencing on the date of Manufacturing Facility Completion.
(b)From time to time, SILEVO, TEO, and/or their respective Affiliates (as applicable, the “Sublessor”) may contract with or permit one or more entities to perform Manufacturing Operations and related business functions at the Manufacturing Facility, including the right to sublet space within the Manufacturing Facility to such entities under terms consistent with the lease by and between the FSMC and Silevo, LLC dated April 30, 2018 with respect to the Manufacturing Facility (each such entity is referred to herein as a “Collocated Entity”) and subject to the approval of the FOUNDATION.
(c)The approval of a Collocated Entity by the FOUNDATION will not be unreasonably withheld, conditioned, or delayed. Without limiting the generality of the foregoing, the Parties agree that the FOUNDATION may withhold approval of a particular proposed sublease with a Collocated Entity if and to the extent that the proposed sublease or other agreement with the proposed Collocated Entity permits or could otherwise result in the Silevo or TEO financially benefitting from rent received from the proposed Collocated Entity in any form with respect to the Manufacturing Facility or any Manufacturing Equipment owned by the FOUNDATION. In addition, the Parties agree that in determining whether to approve a Collocated Entity, FOUNDATION shall be permitted to consider whether the addition of the Collocated Entity would
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result in more than half of the persons employed at the Manufacturing Facility being employed by Collocated Entities.
(d)Any and all investments, costs, expenses, and other spending by SILEVO, TEO, any Affiliate of SILEVO and/or TEO, or any Collocated Entity shall count towards the investment and spending requirements set forth in this Section, Section 4.1(a), Exhibit A, and Exhibit G unless said expense is an Ineligible Expense as defined in this Section. Without limitation, the foregoing includes all direct and indirect costs and expenses incurred or accrued on operations, equipment and other tangible assets used for Manufacturing Operations or the Program but shall not include any employment costs incurred outside of New York State or the cost of equipment or other tangible assets that are not physically located or used in New York (the “Program Related Costs”). SILEVO and TEO agree that neither they nor any of their respective Affiliates shall sublet or otherwise make space in the Manufacturing Facility available in exchange for rent in any form.
(e)Ineligible Expense means: (i) any expense to the extent paid or reimbursed by the FOUNDATION or its Affiliates; or (ii) any expense that is not incurred or accrued either in New York State or elsewhere for business operations in New York State; or (iii) any expense by a Collocated Entity that is not incurred or accrued either at or for the Manufacturing Facility.”
4Section 4.4 (SILEVO Employment Targets) of the Agreement is amended to include new Subsections (e) and (f) and (g) as follows:
“(e)Any and all individuals employed by or for SILEVO, TEO, any Affiliate of SILEVO and/or TEO, or any Collocated Entity, including individuals as contemplated below for each such subject entity, shall count towards the employment targets and requirements set forth in this Section, Section 4.1(a), Exhibit A, and Exhibit G provided such employees are Full-Time Employees and are not an Ineligible Employee as defined in this Section.
(f)Full-Time Employee shall mean:
(i) a full-time employee on the payroll of the subject entity, who has worked in the State of New York for a minimum of thirty (30) hours per week for not less than four (4) consecutive weeks as of the Reporting Date, and who is entitled to receive the usual and customary fringe benefits extended by the subject entity to other full-time employees with comparable rank and duties; or
(ii) two part-time employees on the payroll of the subject entity, who have worked in the State of New York for a combined minimum of thirty (30) hours per week (i.e. the hours for both employees exceed that threshold collectively) for not less than four (4) consecutive weeks as of the Reporting Date and who are entitled to receive the usual and customary fringe benefits extended by the subject entity to other part-time employees with comparable rank and duties; or
(iii) a full-time independent contractor or self-employed individual that performs responsibilities in furtherance of the Program that would otherwise be performed by an employee of Silevo or its Affiliates who is not on the subject entity’s payroll but who has worked in New York State for the subject entity for a minimum of thirty (30) hours per week for not less than four (4) consecutive weeks as of the Reporting Date providing services pursuant to a contract signed with either the individual or their direct employer; or
(iv) two part-time independent contractors or self-employed individuals that perform responsibilities in furtherance of the Program that would otherwise be performed by an employee of Silevo or its Affiliates who are not on the subject entity’s payroll but who have worked in New York State for the subject entity for a combined minimum of thirty (30) hours per week for not less than four (4) consecutive weeks as of the Reporting Date
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providing services pursuant to a contract signed with either the individual or their direct employer.
(g)Ineligible Employee means: (i) any employee of a Collocated Entity that does not perform work related to the Program; or (ii) an employee or position of a Collocated Entity that was transferred to the Manufacturing Facility from another location in New York State unless the employee or position was (a) “at-risk” of elimination or of leaving New York State on or prior to such transfer, as demonstrated by SILEVO, or (b) backfilled by the Collocated Entity at another location in New York State after such transfer; or (iii) any employee or position of a Collocated Entity that is not employed at the Manufacturing Facility.”
5.A new last sentence of the first paragraph of Section 5.1(c) of the Agreement is hereby added as follows:
“Notwithstanding anything herein to the contrary, the FOUNDATION shall apply any unused portion of the FOUNDATION’s financial commitments under the Agreement (the “UNUSED FUNDS”) for any of the following purposes as previously agreed to by the Parties or as directed by SILEVO: (i) purchase, commission, modify, and improve Manufacturing Equipment for the Manufacturing Facility; (ii) to make additions, modifications, or improvements to the Manufacturing Facility; (iii) to take such other actions related to the Manufacturing Facility or Manufacturing Equipment as may be agreed by the Parties; or (iv) for other purposes related to the Project with the FOUNDATION’s consent, which shall not be unreasonably withheld, conditioned, or delayed. Notwithstanding the foregoing, any UNUSED FUNDS must be (a) for a capital, facility, or equipment use or purpose related to either the Manufacturing Facility or Manufacturing Equipment, and (b) consistent with applicable laws and subject to the terms and conditions of the Grant Disbursement Agreement(s) between FSMC and Empire State Development, if any, as provided in writing to SILEVO on the Effective Date.”
6.A new second paragraph of Section 5.1(c) of the Agreement is hereby added as follows:
“The UNUSED FUNDS as of the Effective Date of this Amendment are an amount equal to $28,880,339.51. Upon expenditure of the remaining balance of the UNUSED FUNDS, the FOUNDATION will have fully satisfied its obligations under Sections 4.1(c), 5.1(a), 5.1(b), and 5.1(c) of the Agreement and will have for the purposes of the Agreement met its commitment to contribute $750 million for the project. The FOUNDATION, Affiliates or their contractors, as applicable retain their warranty support and other obligations with respect to such construction work, including the open punch-list items set forth in the Final Base Build Punch-List attached hereto as Exhibit 1. Any expenses to be paid with UNUSED FUNDS must be incurred and payment must be requested by SILEVO prior to December 31, 2021 (the “Expenditure Date”), and FOUNDATION shall, or shall cause its Affiliate to, promptly pay such amounts to SILEVO. Notwithstanding the foregoing, if and to the extent that the FOUNDATION or its Affiliate does not promptly pay any of the UNUSED FUNDS to SILEVO or as directed by SILEVO due to an encumbrance or claim arising from potential liabilities associated with any contract(s) entered by or for the FOUNDATION or its Affiliates under this Agreement, the Expenditure Date shall be extended by a period of one month for each month or portion thereof that such funds are encumbered and therefore unavailable to SILEVO to pay for project related purposes.”
7.Section 4.1(b) of the Agreement is hereby deleted and is replaced with the following
“Manufacturing Facility Completion means April 30, 2018.”
Exhibit G is deleted in entirety and replaced with revised Exhibit G attached hereto.
9.TEO shall be a Party to the Agreement as of the date last signed below, and references to “SILEVO” throughout the Agreement shall be deemed to refer collectively to SILEVO and TEO.
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10.Section 18.2 is amended to include the following at the end of the Section:
“In the case of TEO:
Tesla Energy Operations, Inc.
47700 Kato Road
Fremont, California 94538
Attn: Chief Technology Officer
With a concurrent paper copy and a concurrent electronic copy via e-mail to:
Tesla Energy Operations, Inc.
901 Page Avenue
Fremont, CA 94538
Attn: Legal Department
E-mail: [email protected]
In case of FOUNDATION, including annual reports:
The Research Foundation for the State University of New York
P.O. Box 9
Albany NY 12201-0009
With a concurrent paper copy and a concurrent electronic copy via e-mail to:
Fort Schuyler Management Corporation
257 Fuller Road
Albany, NY 12203
Attn: President
E-mail: [email protected]
With a concurrent paper copy and a concurrent electronic copy via e-mail to:
Empire State Development
Portfolio Management Department
633 Third Avenue – 35th Floor
New York, New York 10017-6754
E-mail: [email protected]”
11.Section 2.9 is deleted in entirety and replaced with the following:
“Manufacturing Operations means the activities of SILEVO, TEO, any of their respective Affiliates, and/or Collocated Entities in connection with the research, development, evaluation, testing, manufacture, repair (except for general consumer vehicle repair), and/or re-manufacture of
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solar, stationary storage, electric vehicle, semiconductor, sustainable energy, sustainable transportation, and/or any related products and components produced by any such entity, including any and all subcomponents and materials for any such products or components and any ancillary administrative activities, including without limitation such costs required to achieve Full Production Output as defined in Section 4.1(b).”
12.The Parties desire to foster additional research, development, technology, and development jobs at, and in connection with, the Manufacturing Facility. Accordingly, the Parties will attempt to solicit additional third parties to collocate at the Manufacturing Facility for purposes of Manufacturing Operations, and SILEVO, TEO, and any of their respective Affiliates shall investigate opportunities to collaborate with local and regional higher education institutions, including State University of New York (SUNY) institutions, with the goals to foster student study, training, and hiring in fields relevant to sustainable energy or transportation. The title of the document is amended to be “Amended and Restated Agreement for Research & Development Alliance” as of the Effective Date of this Amendment.
(c)The FOUNDATION may designate any Affiliate to provide any and all consents or approvals required in the Agreement. FOUNDATION may assign this Agreement to any Affiliate with SILEVO’s consent, which shall not be unreasonably withheld, conditioned, or delayed.
13.Section 3.2(a) is deleted in entirety and replaced with the following:
“(a)Establish a mutually-beneficial joint effort focused on the US-based manufacture, expansion, and commercialization of the products of SILEVO, TEO, and any of their respective Affiliates and related research and development.”
Pursuant to an extension granted by ESD on or about June 10, 2020 to the required job and investment milestones required pursuant the Agreement as a result of the COVID-19 outbreak, the employment and investment commitments contained in Exhibit G are hereby deferred for one year. As such, and notwithstanding anything contained in this Agreement to the contrary, the Parties agree that the Second Anniversary Milestone contained in Section 4.4 of the Agreement, as amended, and Exhibit G shall be April 30, 2021. Each subsequent Anniversary Date shall be extended accordingly.
15.Unless otherwise expressly amended by this Eleventh Amendment, the terms and conditions of the Agreement shall remain in full force and effect. In the event of any conflicts or inconsistencies between the provisions contained in this Eleventh Amendment and the provisions contained in the Agreement (excluding the amendments made to it by this Eleventh Amendment), the provisions contained in this Eleventh Amendment shall govern and prevail.
16.This Eleventh Amendment may be executed in counterparts, each of which shall be deemed to be an original, all of which together shall constitute one and the same instrument. To facilitate delivery of this Eleventh Amendment, the Parties may exchange executed counterparts by facsimile or e-mail in portable document format (pdf.)
[Signature Page Follows]
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IN WITNESS WHEREOF, the Parties hereto have caused this Amendment to be executed and delivered by their duly authorized representatives as of the Effective Date.
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The Research Foundation for the State University of New York |
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/s/ Scott Bateman |
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Scott Bateman |
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RP Operations Manager |
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Date: |
7/22/2020 |
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Tesla Energy Operations, Inc. |
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Silevo, LLC |
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/s/ Yaron Klein |
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/s/ Emmanuelle Stewart |
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Printed: |
Yaron Klein |
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Printed: |
Emmanuelle Stewart |
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Treasurer |
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Secretary |
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July 22, 2020 |
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July 22, 2020 |
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Final Base Build Warranty List
DateArea / RoomsEquipment Tag PassdownTesla/LPC/NY State : Meeting Minutes and Status UpdatesSTATUSTuesday, October 24, 2017Chemical Offload DocksCRCCRCs on both chemical and DIW docks are cracking and lifting off concrete10/24/17 - Dan M walked down docks with LPC-Brad F. Plan to be onsite next week to address1/10/18: LPC to come back out in the spring to correct3/8/2019: Large CRC patches blown off in recent wind stormOPENMonday, March 11, 2019Cell ManufacturingMAH unitsMezzanine 3 RAH102 – 48 and 52 missing sprinkler coverage - found during annual inspection.3/11/2019: notified FSMC of gap on 2/11/2019; no action to date - funding in questionCompletedFriday, March 1, 2019Cell ManufacturingAWD drain from nitric CTSAWD drain line from CTS to gravity drain leaking and dissolving - polypropylene (MOC) determined to be incompatible with 69% nitric acid. 3/8/2019: piping to be replaced. Expecting reimbursemenet from NYS. OPENFriday, March 1, 2019Cell ManufacturingCHFWDCHFWD leaking3/8/2019: O-rings in valves determined to be incompatible material. Spec called out for EPDM seals, FKM was installed - both are incompatible with chemistry in drain. FFKM(Kalrez/Chemraz) o-rings required. Material on order and is being replaced. Expecting reimbursement from NYS. 2/13/2020 Completed o-ring replacement for waste drain valves on CLN201 - CLN 204. High point vents and flange gaskets as well as the connection point to the gravity drain still need to be completed. OPENThursday, February 21, 2019Cell ManufacturingCWDNumerous leaks on the piping for the caustic waste drain. Material of construction is suspect. 3/8/2019: CPVC has been determined to be incompatible with TS42 (POR chemistry) and not able to handle the POR temperature of 185F. ~1000' of pipe to be replaced with NIckel 200.2/21/2019 - CPVC is rated for 180F , bath operates at 185F. Over time the flexing due to temperature variations and cracking the couplings and valves. Design engineer to review base build specs and process to determine material compatability.
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Annual Report
The following report sets out the report of the Reporting Entities named below with respect to the investment, spending, and employment requirements of the Amended and Restated Agreement for Research & Development Alliance on Triex Technology dated September 2, 2014.
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Silevo LLC and Affiliates |
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Program Year |
__ Anniversary of April 30, 2018, the date of Manufacturing Facility Completion |
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Reports Required by Law |
Did the Reporting Entities file the NYS-45 form, including cover page and NYS-45-ATT, and, if applicable, the Multiple Worksite Report form (BLS 3020 for NYS; “MWR”) for the last four calendar quarters? ☐ Yes ☐ No |
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Explanation (if needed) |
If the answer to the question above is No or if the employment figures on such reports differ materially from those reported below, please explain: Click here to enter text. |
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Investments & Spending (USD) |
Description |
May 1, 20__ – April 30, 20__ |
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The foregoing report is true and correct to the best of my knowledge.
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Date: Click or tap to enter a date. |
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Name (Print): Click here to enter text. |
Title: Click here to enter text. |
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EXHIBIT G: INVESTMENT AND JOB MILESTONES
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Subject to Section 2 of this Exhibit G, commencing on the date of the first anniversary of April 30, 2018 (the date on which Manufacturing Facility Completion was achieved), for each Program Year, if SILEVO fails to achieve the Investment and Job Milestones, SILEVO shall pay the Program Payment for the Program year on or before the Milestone Payment Due Date, as specified in Schedule A below. |
Schedule A
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Program Year |
Program Payment Due Dates |
Program Payment Due |
SILEVO Cumulative Investment (as described in Section 4.3 of the Agreement) Milestone |
SILEVO Cumulative Job (as described in Section 4.4 of the Agreement) Milestone |
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1 |
First Anniversary of the Manufacturing Completion Date |
$41.2 Million |
$130,000,000 |
500 |
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2 |
Second Anniversary of the Manufacturing Completion Date |
$41.2 Million |
$472,000,000 |
1,460 |
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3 |
Third Anniversary of the Manufacturing Completion Date |
$41.2 Million |
$928,000,000 |
2,000 |
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4 |
Fourth Anniversary of the Manufacturing Completion Date |
$41.2 Million |
$1,478,000,000 |
2,500 |
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5 |
Fifth Anniversary of the Manufacturing Completion Date |
$41.2 Million |
$2,056,000,000 |
3,460 |
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6 |
Sixth Anniversary of the Manufacturing Completion Date |
$41.2 Million |
$2,625,000,000 |
3,460 |
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7 |
Seventh Anniversary of the Manufacturing Completion Date |
$41.2 Million |
$3,208,000,000 |
3,460 |
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8 |
Eighth Anniversary of the Manufacturing Completion Date |
$41.2 Million |
$3,793,000,000 |
3,460 |
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9 |
Ninth Anniversary of the Manufacturing Completion Date |
$41.2 Million |
$4,391,000,000 |
3,460 |
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10 |
Tenth Anniversary of the Manufacturing Completion Date |
$41.2 Million |
$5,000,000,000 |
3,460 |
If, with respect to a Program Year above in Schedule A, SILEVO satisfies the Investment Milestone and Job Milestone set forth in Schedule A on or before the applicable Program Payment Due Date in that
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Program Year, then SILEVO is not required to pay the Program Payment Due for the Program Year on such Program Payment Date. Notwithstanding anything contained herein the contrary, SILEVO shall be required to meet the Cumulative Job Milestone in each Program Year regardless of whether it has met the Cumulative Job Milestone in any other Program Year.
The SILEVO Cumulative Investment Milestones set forth in Schedule A refer to cumulative investments, spend, costs, and expenses incurred in or related to the State of New York as permitted in the Agreement. If and to the extent that SILEVO meets the Cumulative Investment Milestone requirements for a particular Program Year, SILEVO shall be deemed to have met the Cumulative Investment Milestone for all applicable Program Years under the Agreement where the Cumulative Investment equals or exceeds the Cumulative Investment Milestone for that Program Year. For example, if SILEVO’s cumulative investment in Year 2 equals $5,000,000,000, then SILEVO shall have met the SILEVO Cumulative Investment Milestones for Years 2 through and including Year 10.
The SILEVO Cumulative Job Milestones set forth in Schedule A refer to the number of Full-Time Employees as permitted under the Agreement in each Program Year and are not in addition to the previous Program Year. For example, if SILEVO’s Cumulative Job Milestone in Year 2 equals 2,000, then SILEVO shall have met the SILEVO Cumulative Job Milestone for Year 2 only and the Cumulative Job Milestone for Year 3 shall remain at 2,000.
If any of the following events of default occur, all Program Payments in Schedule A shall be become due and payable immediately, without demand or notice:
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the failure of SILEVO to pay in full a Program Payment payable by SILEVO to FOUNDATION in accordance with Sections 1 and 2 of this Exhibit G on or before the applicable Program Payment Due Date, which payment remains unpaid for ten (10) business days after delivery of written notice of such failure to SILEVO; |
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the filing of bankruptcy proceedings involving SILEVO as a debtor (which is not dismissed within ninety (90) days of filing); |
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the appointment of a receiver for SILEVO; |
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the making of a general assignment for the benefit of SILEVO’s creditors; |
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the termination of the Agreement due to SILEVO’s default thereunder. |
The terms and conditions contained in this Exhibit G shall survive the termination of the Agreement.
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Exhibit 31.1
CERTIFICATIONS
I, Elon Musk, certify that:
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I have reviewed this Quarterly Report on Form 10-Q of Tesla, Inc.; |
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Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
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3. |
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
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The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
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Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
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Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
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(c) |
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
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(d) |
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and |
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The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s Board of Directors (or persons performing the equivalent functions): |
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All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and |
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Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. |
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Date: July 28, 2020 |
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/s/ Elon Musk |
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Elon Musk |
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Chief Executive Officer |
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Exhibit 31.2
CERTIFICATIONS
I, Zachary J. Kirkhorn, certify that:
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I have reviewed this Quarterly Report on Form 10-Q of Tesla, Inc.; |
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Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
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3. |
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
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4. |
The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
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Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
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Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
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Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
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Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and |
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The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s Board of Directors (or persons performing the equivalent functions): |
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(a) |
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and |
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Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. |
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Date: July 28, 2020 |
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/s/ Zachary J. Kirkhorn |
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Zachary J. Kirkhorn |
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Chief Financial Officer |
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(Principal Financial Officer) |
Exhibit 32.1
SECTION 1350 CERTIFICATIONS
I, Elon Musk, certify, pursuant to 18 U.S.C. Section 1350, that, to my knowledge, the Quarterly Report of Tesla, Inc. on Form 10-Q for the quarterly period ended June 30, 2020, (i) fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934 and (ii) that the information contained in such Form 10-Q fairly presents, in all material respects, the financial condition and results of operations of Tesla, Inc.
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Date: July 28, 2020 |
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/s/ Elon Musk |
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Elon Musk |
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Chief Executive Officer |
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(Principal Executive Officer) |
I, Zachary J. Kirkhorn, certify, pursuant to 18 U.S.C. Section 1350, that, to my knowledge, the Quarterly Report of Tesla, Inc. on Form 10-Q for the quarterly period ended June 30, 2020, (i) fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934 and (ii) that the information contained in such Form 10-Q fairly presents, in all material respects, the financial condition and results of operations of Tesla, Inc.
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Date: July 28, 2020 |
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/s/ Zachary J. Kirkhorn |
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Zachary J. Kirkhorn |
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Chief Financial Officer |
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(Principal Financial Officer)
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