Exhibit 10.50

Confidential Treatment Requested by Tesla Motors, Inc.

SUPPLY AGREEMENT

Among

TESLA MOTORS, INC.,

 

LOGO [g279413ex10_50pg001a.jpg]

PANASONIC INDUSTRIAL COMPANY, DIVISION OF

PANASONIC CORPORATION OF NORTH AMERICA,

and

PANASONIC CORPORATION, ACTING THROUGH

ENERGY COMPANY.

 

LOGO [g279413ex10_50pg001b.jpg]

October 5, 2011

 

[***]

Information has been omitted and filed separately with the Securities and
Exchange Commission. Confidential Treatment has been requested with respect to
the omitted portions.

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Confidential Treatment Requested by Tesla Motors, Inc.

 

THIS SUPPLY AGREEMENT is entered into as of this 5th day of October, 2011 (the
“Effective Date”) among:

Tesla Motors, Inc., a Delaware corporation, with its principal place of business
at 3500 Deer Creek, Palo Alto, California 94304, U.S.A. (“Tesla”); and

Panasonic Industrial Company, Division of Panasonic Corporation of North
America, a Delaware corporation, with its office located at Three Panasonic Way,
Secaucus, New Jersey 07094 (“PIC”); and

Panasonic Corporation, acting through Energy Company, a Japanese corporation,
with its office located at 1-1 Matsushita-cho, Moriguchi-city, Osaka, Japan
(“PEC”) (PIC and PEC shall hereinafter be collectively referred to as
“Panasonic”).

WHEREAS, Tesla intends to manufacture Li-Ion battery packs (hereinafter called
“Finished Products” defined in Section 1) with the Items (hereinafter defined in
Section 1) supplied by Panasonic.

WHEREAS, Panasonic is willing to supply the Items to Tesla in accordance with
this Agreement.

The Parties agree as follows:

1. Definitions. Unless defined additionally elsewhere in this Agreement, the
following capitalized terms shall have the meanings specified below:

 

  a)

“Agreement” means (i) this Supply Agreement, (ii) all Attachments, and (iii) all
Orders, as each may be amended from time to time.

 

  b)

“Attachment” means any document that is referenced in this Supply Agreement and
attached hereto. All Attachments are deemed to be incorporated into this
Agreement by this reference.

 

  c)

“DAP Point” means delivered at place as set forth in Incoterms 2010 at Tesla’s
receiving location(s) in California.

 

  d)

“Finished Products” means Li-Ion battery packs and Modules assembled by Tesla
and which incorporate Items provided by Panasonic.

 

  e)

“Item” and “Items” means one (in its singular form) or more than one (in its
plural form) Li-Ion battery cells which are manufactured by PEC and which are
supplied to Tesla by PIC as specified in (i) Attachment 1, or (ii) an Order.

 

  f)

“Module” means smallest replaceable unit in a Tesla battery pack.

 

[***]

Information has been omitted and filed separately with the Securities and
Exchange Commission. Confidential Treatment has been requested with respect to
the omitted portions.

 

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Confidential Treatment Requested by Tesla Motors, Inc.

 

  g)

“Order” means an order for Items communicated pursuant to this Agreement by
Tesla to Panasonic via a purchase order whether in hardcopy or electronic form.
All Orders are deemed to be incorporated into this Agreement by this reference.

 

  h)

“Parties” means Tesla and Panasonic.

 

  i)

“Specification” means the specification and product requirements for each Item
mutually agreed to by the parties.

 

  j)

“Supplier” means Panasonic.

 

  k)

“Tesla Application” means any product into which a Tesla battery pack is
installed. A Tesla Roadster is an example of a Tesla Application.

2. Scope of Agreement; Term.

 

  a)

Scope of Agreement. This Agreement sets forth the terms and conditions governing
the purchase and supply of Items and the relationship between Tesla and
Panasonic in connection with the purchase and supply of Items. Tesla shall be
entitled to purchase Items from Panasonic under this Agreement. Nothing in this
Agreement shall prevent Tesla from engaging third parties other than Panasonic
to provide goods that are the same as, or similar to, the Items. Nothing in this
Agreement shall prevent Panasonic from providing goods that are the same as, or
similar to, the Items to third parties other than Tesla.

 

  b)

Term. This Agreement shall commence on the Effective Date and, unless terminated
as set forth in Section 13 (Termination), shall end on December 31, 2015. This
Agreement, however, shall be automatically extended from year to year for
additional one (1) year periods, unless one Party gives a written notice of
termination to the other Parties at least sixty (60) days before the expiration
date of the initial term or then current term. The effective period of this
Agreement is referred to as the “Term.”

3. Forecasts and Orders.

 

  a)

Monthly Forecasts and Orders. On the first (1st) business day of each calendar
month, Tesla shall provide Panasonic with a [***] forecast for Tesla’s
anticipated requirements of the Items (“Monthly Forecast”) [***]. On the first
(1st) day of each calendar month, Tesla shall issue firm and irrevocable Orders
for [***]. Tesla shall have the right (i) to decrease the Orders [***]; and/or
(ii) to decrease the Orders [***]; in each case without additional charges or
penalties, provided, however, that Tesla shall include such decreased volume of
the Orders based upon (i) or (ii) above in the immediately following three
months’ Orders. Tesla and Panasonic may negotiate on [***]; in each case without
additional charges or penalties. The Orders for the [***] months excluding any
increases negotiated and agreed to for the [***] months are referred to herein
as the Committed Volumes. The Orders shall comply with applicable lead times and
shall be non-cancellable. Delivery of Orders shall not be permitted to be
rescheduled without the

 

[***]

Information has been omitted and filed separately with the Securities and
Exchange Commission. Confidential Treatment has been requested with respect to
the omitted portions.

 

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Confidential Treatment Requested by Tesla Motors, Inc.

 

 

prior written consent of Panasonic and the payment by Tesla of any rescheduling
charges specified by Panasonic.

 

  b)

Order Requirements. An Order shall (i) identify the Items requested and
(ii) state the quantity, date, time, mode and place of delivery, and price of
the Items requested (unless previously specified in Attachment 1, which shall
control in the event of a conflict with the Order).

 

  c)

Acceptance/Rejection of Orders. Panasonic shall communicate to Tesla its
acceptance or rejection of a forecast and related Order within [***] working
days of Panasonic’s receipt of the Order. [***]. Any notice of rejection shall
state the specific grounds for such rejection. If Panasonic fails to notify
Tesla of its rejection of an Order within [***] working days of Panasonic’s
receipt of the Order, the Order shall be deemed accepted by Panasonic.

 

  d)

Forecast Adjustments. Panasonic acknowledges that Tesla may be required to
modify forecasts from time to time, but such modifications to the forecasts
shall not result in a change and/or cancellation of any firm and irrevocable
Orders as described in Section 3(a).

 

  e)

Purchases by Authorized Third Party. Items may be incorporated into Finished
Products made for Tesla by a third party. Upon the mutual agreement of the
Parties, Tesla may designate the third party as authorized to purchase Items
from Panasonic. Such third party shall meet Panasonic’s technical requirements
for battery handling and battery pack assembly, purchasing requirements and
credit terms as established by Panasonic from time to time. Tesla shall cause
such third party to enter into an agreement with Panasonic to purchase Items
from Panasonic on terms and conditions substantially similar to the terms and
conditions set forth in this Agreement.

 

  f)

Notwithstanding anything herein to the contrary, Panasonic shall not be
obligated to deliver any Items to Tesla unless Tesla has issued an Order to
Panasonic as set forth in Section 3(a).

 

  g)

Purchase Commitment. As set forth in Section 4(a), Tesla shall purchase the
quantities of the Items set forth in Attachment 1 (“Commitment Quantity”). Tesla
may buy goods from third parties that are identical or similar to the Items.

4. Pricing.

 

  a)

Contract Prices. “Contract Prices” means the domestic and/or export price in
[***] for an Item as set forth in Attachment 1. [***].

 

  b)

Pricing Adjustment. In addition to Section 4 (a), Contract Prices may be
adjusted as a result of changes in the price of [***] according to the Price
Adjustment Mechanism set forth on Attachment 1 by following the Price Adjustment
Mechanism Process set forth on Attachment 2.

 

[***]

Information has been omitted and filed separately with the Securities and
Exchange Commission. Confidential Treatment has been requested with respect to
the omitted portions.

 

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Confidential Treatment Requested by Tesla Motors, Inc.

 

  c)

Pricing Components. The Contract Prices, and any quotations for Items, shall
include all finishing, testing, inspecting and packaging fees, applicable
royalties and all applicable taxes (excluding sales, use and similar taxes). Any
quotations for Items shall include all costs relating to warranties.

 

  d)

Transportation and Insurance Costs. In the case of delivery to the DAP Point,
the Contract Price does not include cost of shipment which shall be invoiced as
a separate line item.

 

  e)

Taxes. Tesla will pay any applicable excise, sales, use or similar tax imposed
in connection with the sale of Items to Tesla; provided that Panasonic shall not
charge or collect, and Tesla shall have no liability for, taxes on any sale of
Items for which Tesla has provided Panasonic with an appropriate resale
certificate or other documentation evidencing an exemption from such taxes. For
all sales of Items upon which tax reimbursement to Panasonic is applicable,
Panasonic shall separately itemize all applicable taxes on invoices submitted to
Tesla. All amounts payable under this Agreement are exclusive of Value Added Tax
(VAT) which will be paid at the date and in the manner for the time being
prescribed by law.

 

  f)

Recycling Fees. Tesla will pay any applicable recycling fees should it decide to
recycle the Items and/or if any rules and regulations pertaining to battery
recycling change to require recycling of the Items.

5. Delivery of Items.

 

  a)

Delivery Requirements. Panasonic shall meet the (i) negotiated lead time;
(ii) order adjustment requirements as set forth in Section 3; and (iii) time,
date, location and other delivery requirements for Items as set forth in the
Order.

 

  b)

Remedies. Panasonic will use its best efforts to deliver the Committed Volumes
at the time and place set forth in the Order; If Panasonic fails to deliver the
Committed Volumes at the time and place set forth in the Order, and the Order is
based on the agreed schedule and quantity, Tesla shall have the right, [***].

 

  c)

Refusal of Delivery. If Tesla shall at any time wrongly refuse to accept
delivery of any shipment of Items, such shipment, at Panasonic’s option, may be
held for Tesla’s account, and Panasonic may invoice, and Tesla shall promptly
pay, for such shipment. Tesla may at any time thereafter and from time to time
be invoiced by Panasonic, and Tesla agrees to promptly accept and pay each such
invoice, for any and all freight, handling, warehouse, labor and other costs
incurred by Panasonic which arise from or which are in any way related to or
associated with such wrongful refusal by Tesla to accept such shipment until
such time as delivery of such shipment is accepted by Tesla.

6. Shipping and Packaging Requirements.

 

  a)

Panasonic and Tesla shall mutually agree on the cost of freight related expenses
to the DAP Point.

 

[***]

Information has been omitted and filed separately with the Securities and
Exchange Commission. Confidential Treatment has been requested with respect to
the omitted portions.

 

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Confidential Treatment Requested by Tesla Motors, Inc.

 

  b)

Panasonic will ship all Items in accordance with the Transportation, Packaging
and Labeling Specification set forth in the cell specification. If Tesla
specifies an authorized shipping service level (such as ground, sea, air,
second-day, next-day, etc.) in a specific Order and Panasonic has previously
agreed that it can provide such shipping service level, Panasonic will ship such
Items in accordance with the shipping service level included in an Order;
provided, however, that Tesla shall be responsible for any increased costs
resulting from the use of such shipping service level.

 

  c)

The Items shall be packaged, marked and labeled in accordance with mutually
agreed upon specifications. In all events, Panasonic must include a valid
packing slip number or package ID on each package or shipment of Items.

7. Acceptance.

 

  a)

Initial Inspection and Notification. Tesla will inspect the shipments of Items
from Panasonic promptly upon delivery, but in any event within [***] days of
delivery to the DAP Point, using such testing procedures as Tesla determines are
appropriate to determine if the Items conform to the mutually agreed upon
inspection specifications, and will include an OCV test and impedance test among
others. Any claim by Tesla arising from such inspection that an Item fails to
comply with the mutually agreed specifications must be made within [***] days of
the delivery of the Item to the DAP Point. Notification of non-conformity will
be made in writing and supporting documentation will be provided to Panasonic.
An Item will be deemed automatically accepted by Tesla if Panasonic does not
receive a notification of non-conformity within [***] days of the delivery of
the Item to the DAP Point.

 

  b)

Tesla shall promptly supply to Panasonic the detailed facts and additional
supporting evidence with respect to the allegedly defective Items.

 

  c)

If the cause of the defect is determined by the Parties to be solely
attributable to Panasonic, Panasonic shall replace the Items found to be
defective by Tesla. [***].

 

  d)

Upon written instruction from Panasonic, Tesla shall ship, at its expense, any
allegedly defective Items to Panasonic for inspection and testing. Upon
Panasonic’s confirmation that the defect in the Items was caused solely by
Panasonic, Panasonic shall reimburse Tesla for the reasonable transportation
costs for shipping the Items to Panasonic for inspection and testing. If
Panasonic instructs Tesla in writing to destroy the allegedly defective Items,
Panasonic shall reimburse Tesla for the reasonable cost of such destruction.

8. Payment.

 

  a)

Payment Terms. Payment by Tesla for Items shall be in [***] and shall be made
[***] from the date of Panasonic’s invoice in the case of delivery to the DAP
Point. The Parties shall in the future negotiate in good faith a modified DAP
approach whereby Tesla manages freight and risk of loss to the delivery point.
In the case of [***], basically, payment currency by Tesla for Items is expected
to be [***], but such currency shall be

 

[***]

Information has been omitted and filed separately with the Securities and
Exchange Commission. Confidential Treatment has been requested with respect to
the omitted portions.

 

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Confidential Treatment Requested by Tesla Motors, Inc.

 

 

discussed and agreed by both parties in the future. Tesla is authorized by
Panasonic to make payments under this Agreement by either check or electronic
funds transfer, and Panasonic shall provide Tesla with the information necessary
for electronic funds transfer capability. With prior consultation with Tesla,
[***].

 

  b)

Invoices. Panasonic will submit invoices to Tesla no earlier than when the Items
are received at the DAP Point.

 

  c)

Title, Risk of Loss and No Right of Offset. Tesla will take title to and assume
risk of loss for all Items at the DAP Point. Tesla shall not have the right to
withhold payments to Panasonic or reduce the amount of payments owed to
Panasonic under this Agreement for fees, claims, damages, expenses or other
amounts owed, or alleged to be owed, to Tesla from Panasonic under this
Agreement or any other agreement.

9. Responsibility for the Quality of the Items and the Finished Products.

 

  a)

Warranty. Panasonic represents and warrants to Tesla that for a period ending
[***] from the date of delivery of the Item to Tesla at the DAP Point (“Warranty
Period”), the Item will be free from defects in workmanship and material and
will comply with the Specifications. Tesla hereby acknowledges and agrees that
if an Item is not defective and/or complies with its applicable Specifications,
it does not mean that a Tesla battery pack, Module and/or Finished Product
cannot be defective for some other reason, including, without limitation,
improper design or manufacturing by Tesla or a third party.

 

  b)

Warranty Exclusions. Notwithstanding anything herein to the contrary, Panasonic
shall have no obligation to Tesla for: (i) any defects relating to the design
and manufacture of the overall system, equipment and/or goods of which the Items
are part; or (ii) any defects in the Items that have been caused by (a) Tesla’s
shipment or storage of the Items, (b) articles not supplied by Panasonic,
including, without limitation, the goods or systems into which the Items are
installed, (c) accident or act of God, or misuse, neglect, abuse, mishandling,
misapplication, modification, alteration by Tesla or any third party, or
improper installation, service, operation testing, checkout or maintenance by
Tesla or any third party, or (d) failure by Tesla or any third party to follow
the instructions, cautions, warnings, and notes set forth in the Specification,
and any other direction from Panasonic.

 

  c)

End User Return and Notification. Tesla shall agree to receive the Items that
its end user customers return to Tesla. Tesla shall store and control those
returned Items from its end user customers and inspect the Items to identify the
cause of return. As a result of Tesla’s inspection under this Section 9(c), if
the reason of return is solely attributable to a breach of the warranties set
forth in Section 9(a) and such return of each Item is done within the Warranty
Period, Tesla shall communicate this in writing to Panasonic with supporting
evidence, and shall return the Item(s) to Panasonic within [***] working days
after Tesla has received the returned Item(s). Panasonic shall be responsible
for each Item only to the extent that, as a result of the re-inspection of each
such returned Item, it is concluded pursuant to either Section 9(e) or
Section 9(g) that the cause of the return of the Item was due solely to a breach
of the warranties in Section 9(a) resulting in an

 

[***]

Information has been omitted and filed separately with the Securities and
Exchange Commission. Confidential Treatment has been requested with respect to
the omitted portions.

 

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Item failure caused by: [***] or (3) Panasonic’s non-compliance with the
Specifications. If the cause of end user return is not due to one of the above
three failure modes resulting solely from the breach of the warranties in
Section 9(a), then Tesla shall be responsible for the returned Item. In order to
assist in verifying cause of cell failure, Tesla shall monitor [***].

 

  d)

Notification of Defect. In the event an Item is returned to Tesla by an end user
customer and the reason of return is solely attributable to the breach of the
warranties in Section 9(a) resulting in one or both of the failure modes
described in Section 9(c) and such return of the Item is done within the
Warranty Period, (a “Defect” and an Item with a Defect a “Defective Item”), then
Tesla will promptly notify Panasonic in writing regarding such Defect, and will
include with the notification all available information relating to the
Defect. Tesla will cooperate with Panasonic in Panasonic’s verification of such
information.

 

  e)

Determination of Defect. For purposes of replacement of Items, the existence of
a Defect will be established by Tesla in the first instance, subject to
Panasonic’s verification and right to dispute the existence of a Defect and to
allow for determination by a third party of any such Defect as specified in
Section 9(g) below. In the event of notification pursuant to Section 9(d), then,
subject to Panasonic’s verification and right to dispute the existence of a
Defect, Panasonic shall, [***]. Tesla will promptly notify Panasonic in writing
regarding such Defect, and will include with the notification, all available
information relating to the Defect. Tesla will cooperate with Panasonic in
Panasonic’s verification of such information. [***].

 

  f)

Warranty Liability; Disclaimer. Panasonic’s sole, exclusive and full liability
under its limited warranties set forth in Section 9(a) will be to [***], as
described in section 9(e) above. THE WARRANTIES SET FORTH IN THIS AGREEMENT ARE
EXCLUSIVE AND ARE IN LIEU OF ALL OTHER WARRANTIES, WHETHER ARISING FROM A COURSE
OF DEALING, COURSE OF PERFORMANCE OR TRADE USAGE, OR WHETHER ORAL, WRITTEN,
EXPRESS, IMPLIED OR STATUTORY, INCLUDING, BUT NOT LIMITED TO, THE WARRANTIES OF
NON-INFRINGEMENT, MERCHANTABILITY, AND FITNESS FOR A PARTICULAR PURPOSE, ALL OF
WHICH ARE HEREBY WAIVED BY TESLA. THE EMPLOYEES AND AGENTS OF PANASONIC ARE NOT
AUTHORIZED TO MAKE MODIFICATIONS TO SUCH WARRANTIES, OR ADDITIONAL WARRANTIES
BINDING ON PANASONIC; ACCORDINGLY, ADDITIONAL STATEMENTS, WHETHER ORAL OR
WRITTEN, DO NOT CONSTITUTE WARRANTIES AND SHOULD NOT BE RELIED UPON BY
TESLA. FOR THE AVOIDANCE OF DOUBT, TESLA UNDERSTANDS THAT THE ITEMS MAY
MALFUNCTION OR BECOME UNSTABLE WHEN SUBJECTED TO (i) [***], OR (iii) ANY OTHER
CONDITIONS DIFFERENT FROM THOSE FOR WHICH THE ITEMS WERE ORIGINALLY DESIGNED,
AND THAT TESLA SHOULD TAKE PROPER STEPS TO PROTECT THE MODULE AND ITEMS INSIDE
THE MODULE FROM SUCH CONDITIONS. NO ACTION OR SUIT SHALL BE BROUGHT ON AN
ALLEGED BREACH OF THE WARRANTIES SET FORTH IN THIS AGREEMENT

 

[***]

Information has been omitted and filed separately with the Securities and
Exchange Commission. Confidential Treatment has been requested with respect to
the omitted portions.

 

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MORE THAN [***] MONTHS FOLLOWING THE EXPIRATION OF THE APPLICABLE WARRANTY
PERIOD.

 

  g)

Third Party Determination. In the event of a disagreement or dispute as to the
existence of a Defect, the parties will designate by mutual agreement a third
party that will make the technical determination of the existence of a Defect
and whether such Defect resulted from a breach of Panasonic’s warranties as set
forth in Section 9(a).

 

  h)

Quality Plan Requirements and Approval. Panasonic will supply Items according to
the mutually agreed upon part approval quality plan therefor. Only after the
quality plan for the Items is submitted and approved by Tesla, shall the Items
be allowed to be shipped for use in manufacturing the Finished Products.
Panasonic shall at Tesla’s costs and expenses submit a mutually agreed quantity
of samples of a standard production run of the Items to Tesla per a mutually
agreed quality plan. Panasonic shall also provide Tesla with the following
information regarding the Items:

 

  i.

QC inspection process flowchart.

 

  ii.

[***]

 

  iii.

Panasonic agrees to the Quality Requirements attached hereto as Attachment 6.

10. Quality Control of the Finished Products.

 

  a)

Tesla shall establish and maintain proper quality control and inspection systems
at each stage of manufacturing, assembly, storage, inspection and shipping of
the Items. Tesla shall use its best efforts to prevent any and all [***]
relating to the use of the Items by Tesla or any third party. [***].

 

  b)

Panasonic may enter from time to time with reasonable advance notice into
Tesla’s Finished Products assembly facility for the purpose of inspecting and
examining the quality control and inspection systems referred to in section
10(a). If appropriate, the Parties shall enter into a non-disclosure agreement
in connection with such inspection and examination. Tesla reserves the right to
shield particular confidential areas of the Finished Products assembly facility
or processes.

 

  c)

Panasonic may from time to time give Tesla advice or instruction as to optimize
the performance of Items in the Finished Products and/or the quality control and
inspection systems referred to in section 10(a) as Panasonic deems appropriate.
Tesla may, upon receipt of such advice or instructions, comply with such advice
or instructions if the advice is deemed reasonable by Tesla management and is
within the scope of Tesla business plans and objectives.

 

  d)

Any advice or instructions given by Panasonic under Section 10(c) is not
intended to indemnify Tesla for any acts or omissions for which it is
responsible, nor shall it create any warranty by Panasonic for the Finished
Products Tesla manufactures.

 

[***]

Information has been omitted and filed separately with the Securities and
Exchange Commission. Confidential Treatment has been requested with respect to
the omitted portions.

 

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11. Indemnification.

 

  a)

Indemnity by Tesla. Tesla acknowledges and agrees that any work conducted by
Tesla with regard to the assembly, manufacture or placement (inside a Tesla
Application) of the Finished Products hereunder is Tesla’s sole and full
responsibility. Except to the extent that a claim is solely attributable to
Panasonic’s breach of the warranty set forth in Section 9(a) above, Tesla
agrees, during the term of this Agreement and thereafter, to defend, indemnify
and hold Panasonic, its divisions, parent, subsidiaries and affiliates, and
their respective officers and directors (collectively, the “Panasonic Parties”),
harmless from any and all damages, claims, liabilities, injuries (including
personal injuries and death), losses, expenses (including attorneys’ fees and
litigation expenses), and costs (collectively, “Claims”) arising out of or
relating to Tesla battery packs, the Modules, Tesla Application and the Finished
Products (including circuit and equipment matching issues) and their respective
assembly, manufacture or placement, sale, use, operation, storage,
transportation, or otherwise, whether the claim is brought by Tesla, its
customers or by third parties. [***]. Tesla shall defend, indemnify and hold the
Panasonic Parties harmless from such Claims arising out of or relating to [***]
involving the Items no matter how such [***]. This limitation shall apply
regardless of the cause of action or legal theory pled or asserted. Nothing
herein to the contrary shall prevent any Panasonic Party from pursuing its
remedies at law or in equity against Tesla with respect to any Claim.

 

  b)

Indemnity by Panasonic. At any time during the term of this Agreement and
thereafter, Panasonic shall indemnify and hold Tesla, its divisions, parent,
subsidiaries and affiliates, and their respective officers and directors
(collectively, the “Tesla Parties”), harmless from and against any and all
Claims arising out of personal injury (including death) or property damage
alleged to have been solely caused by a breach of the warranties set forth in
Section 9(a), unless Tesla was aware of or, in the exercise of reasonable care,
should have been aware of the existence of such defect; provided, however,
Panasonic shall have no liability to Tesla with respect to any failure of the
Items caused by the integration of the Items to make the Finished Products, any
failure of circuit or equipment matching issues. To the maximum extent permitted
by law, Tesla agrees to limit Panasonic’s liability pursuant to this
Section 11(b) to the lesser of (i) [***] and (ii) [***] immediately preceding
the date of the event giving rise to the Claim. This limitation shall apply
regardless of the cause of action or legal theory pled or asserted. Nothing
herein to the contrary shall prevent any Tesla Party from pursuing its remedies
at law or in equity against Panasonic with respect to any Claim.

 

  c)

Procedures. The Parties shall give each other prompt written notice of any Claim
which is or may be subject to indemnification hereunder. The indemnifying Party
will be responsible for defending any and all such Claims hereunder. The
indemnifying Party shall determine, in its sole and absolute discretion, the
manner in which any Claim shall be handled or otherwise disposed of. The
indemnified Party shall cooperate fully with the indemnifying Party, including,
but not limited to, complying with all reasonable requests for all relevant
information and evidence. The indemnifying Party shall be responsible for all
reasonable direct costs and expenses incurred by the indemnified

 

[***]

Information has been omitted and filed separately with the Securities and
Exchange Commission. Confidential Treatment has been requested with respect to
the omitted portions.

 

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Party in connection with providing such cooperation, except for salaries of the
employees of the indemnified Party and fees and expenses of any third party
retained by the indemnified Party in the defense of any Claim. In any action or
proceeding the defense of which an indemnifying Party assumes, the indemnified
Party will have the right to retain its own counsel and be represented in such
litigation at the indemnified Party’s own expense, provided, however, the
indemnified Party shall not consent to any judgment or decree in any such suit
or pay or agree to pay any sum of money or agree to do any other act in
compromise of any such Claim of a third party without first obtaining the
indemnifying Party’s consent thereto in writing.

12. Limitation of Liability; Insurance; Environmental Claims

 

  a)

EXCEPT FOR [***] (2) EACH PARTIES’ OBLIGATIONS SET FORTH IN SECTION 11 AND
(3) TESLA’S OBLIGATIONS SET FORTH IN SECTION 12(d), NEITHER PARTY SHALL BE
LIABLE OR RESPONSIBLE TO THE OTHER PARTY FOR ANY SPECIAL, INDIRECT, INCIDENTAL,
EXEMPLARY, CONSEQUENTIAL OR PUNITIVE DAMAGES ARISING OUT OF OR IN CONNECTION
WITH THIS AGREEMENT, INCLUDING, WITHOUT LIMITATION, ANY WORK DELAYS, LOST
GOODWILL, PROFIT, REVENUE OR SAVINGS, LOSS OF USE, COST OF CAPITAL, COST OF
SUBSTITUTE EQUIPMENT, FACILITIES OR SERVICES, OR DOWNTIME COSTS, EVEN IF SUCH
PARTY HAS BEEN ADVISED OR IS AWARE OF THE POSSIBILITY OF SUCH DAMAGES. EXCEPT
FOR EACH PARTIES’ OBLIGATIONS SET FORTH IN SECTION 11 AND TESLA’S OBLIGATIONS
SET FORTH IN SECTION 12(d), NEITHER PARTY’S LIABILITY FOR MONETARY DAMAGES TO
THE OTHER PARTY UNDER THIS AGREEMENT SHALL EXCEED LESSER OF [***].

 

  b)

Insurance.

 

  i

Tesla agrees to maintain in full force and effect at all times while it has any
obligations remaining under this agreement, policies of insurance written as
primary coverage and not contributing with or in excess of any coverage which
Panasonic may carry. These policies will be issued by an insurance carrier
acceptable to Panasonic with a Best’s rating of at least A, X which affords the
following.

 

  a.

Commercial General Liability Insurance, including coverage for Bodily Injury,
Property Damage, Personal Injury, Contractual Liability, Products and Completed
Operations in an amount not less than [***] per occurrence. Products and
Completed operations coverage will be continued for [***] years following the
expiration of the Term. Tesla’s products liability policy is written on a claims
made basis. If products liability coverage, or any other coverages, are written
on a claims made basis, Tesla will evidence that any retroactive date applicable
to coverage under the policy precedes the effective date of this Agreement, and
that continuous coverage will be maintained or an extended discovery period will
be exercised for a period of not less than [***] years beginning from the time
that final delivery of the product or Item is made.

 

[***]

Information has been omitted and filed separately with the Securities and
Exchange Commission. Confidential Treatment has been requested with respect to
the omitted portions.

 

10

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Confidential Treatment Requested by Tesla Motors, Inc.

 

  b.

Workers’ Compensation Insurance in Statutory amounts and Employer’s Liability
Insurance in an amount not less than [***] per occurrence.

 

  c.

Umbrella Excess Liability Insurance in an amount not less than [***] per
occurrence, Combined Single Limit.

 

  ii.

Tesla shall deliver to Panasonic within ten (10) days of the date of this
Agreement and annually thereafter, Certificates of Insurance evidencing the
above coverage’s with limits not less than those specified above. Such
Certificates of Insurance, with the exception of Workers’ Compensation
Insurance, will confirm that each policy has been endorsed to name Panasonic,
its officers, directors and employees as additional named insured and contain a
Waiver of Subrogation under the Workers’ Compensation, Commercial General
Liability and Policies in favor of Panasonic. All Certificates of Insurance
shall state that the carrier will endeavor to provide 30 day notice in the event
of cancellation and 10 day notice in the event of cancellation due to
non-payment. Failure by Panasonic to receive or request such Certificates of
Insurance does not represent a waiver of the requirements for insurance coverage
noted above.

 

  iii.

The limits of insurance required shall not limit the Tesla’s liability under its
Indemnification obligations set forth herein.

 

  c)

Tesla agrees to manufacture, assemble, sell and/or dispose of the Finished
Products in compliance with the laws and regulations related to health and
safety of workers and general public, and environmental protection in the
countries where the Finished Products are manufactured, handled, or sold.

 

  d)

Tesla shall be solely responsible for all health, safety and environmental
matters arising from the manufacture, assembly, sales, use, operation, storage,
transportation, and/or disposal of the Finished Products, and shall, during the
Term and thereafter, defend, indemnify, and hold Panasonic, its divisions,
parent, subsidiaries and affiliates, and their respective officers and directors
harmless from and against any and all claims, demands, suits, actions,
liabilities, judgments, losses or costs (including reasonable attorneys’ fees
and costs of litigation), with respect to any pollution, threat and/or damage to
the environment, or death, disease, incapacity or injury to any person or damage
to any property resulting, directly or indirectly, from the manufacture,
assembly, purchase, sales, use, operation, storage, transportation, or disposal
of the battery packs, the Modules and/or the Finished Products; except to the
extent that Tesla shall be exempted from such obligation if and so long as the
cause of such damage is solely attributable to Panasonic’s breach of the
warranty in Section 9(a). With respect to the foregoing indemnity, the Parties
shall follow the procedures set forth in Section 11(c).

13. Termination.

 

  a)

If either Party defaults in the performance of any material terms and conditions
of this Agreement and fails to cure the default within [***] days after receipt
of a written notice

 

[***]

Information has been omitted and filed separately with the Securities and
Exchange Commission. Confidential Treatment has been requested with respect to
the omitted portions.

 

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Confidential Treatment Requested by Tesla Motors, Inc.

 

 

given by the non-defaulting Party demanding remedy of such default, the
non-defaulting Party may terminate this Agreement by giving written notice
thereof.

 

  b)

This Agreement may be terminated by either Party effective immediately upon
written notice to the other Party upon or after the filing of a petition by or
against the other Party for the reorganization, liquidation, dissolution, or
similar relief under any present or future federal or state statute, law or
regulation, or the entry of a decree or order by a court having competent
jurisdiction in respect of any such petition, which decree or order is unstayed
and in effect for a period of [***] consecutive days, or the appointment, with
or without the consent of the other Party, of any receiver, liquidator,
custodian, assignee, trustee, sequestrator or other similar official of such
Party or of any substantial part of its property, or the making by the other
Party of an assignment for the benefit of creditors, or the admission by the
other Party in writing of its inability to pay its debts generally as they
become due, or the taking of action by the other Party in furtherance of any
such action.

 

  c)

Except as expressly provided herein, the expiration or termination of this
Agreement shall not affect or impair the rights, liabilities and obligations of
either Party to the other Party as provided pursuant to this Agreement existing
prior to such expiration or termination, nor shall such expiration or
termination relieve either Party of any obligation or liability accrued under
this Agreement prior to such expiration or termination.

14. Import and Export Requirements.

 

  a)

Upon written request from Tesla, Panasonic will provide Tesla with any and all
information that may be required to comply with export laws, including
applicable “Export Control Classification Numbers,” and documentation
substantiating U.S. and foreign regulatory approvals for the Items. All required
export information shall be sent to the attention of: Manager, Trade Compliance,
Tesla Motors, 3500 Deer Creek, Palo Alto, CA 94304; or any agent so designated
by Tesla in writing.

 

  b)

In case Tesla would export the Items and/or the Finished Products from any
country, Tesla shall comply with applicable export control laws and regulations
in such country and export them only after taking adequate proceedings required
under such laws and regulations.

 

  c)

Country of Manufacture. Items shall be marked with the country of origin as
required by the U.S. import laws. Panasonic shall provide Tesla with a written
statement identifying for each Items delivered: (i) the Tesla part number; and
(ii) the country of manufacture.

15. Miscellaneous.

 

  a)

Assignment. Neither this Agreement nor any right hereunder shall be assignable
and transferable to any third party or parties by either of the Parties without
the prior written consent of the other Party. Tesla may assign this Agreement to
a successor in interest without the prior written consent of Panasonic in
connection with a sale of all of the issued and outstanding shares of capital
stock of Tesla or all or substantially all of its

 

[***]

Information has been omitted and filed separately with the Securities and
Exchange Commission. Confidential Treatment has been requested with respect to
the omitted portions.

 

12

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Confidential Treatment Requested by Tesla Motors, Inc.

 

 

assets, provided such successor in interest is an automotive OEM. Either PIC or
PEC may assign this Agreement without the prior written consent of Tesla to an
affiliate or to a successor in interest in connection with a sale of all of its
issued and outstanding shares of capital stock or all or substantially all of
its assets. If either Party assigns or transfers this Agreement, any right or
obligation hereunder to any third party or parties with or without the prior
written consent of the other Party as set forth above, such Party which attempts
such assignment shall make such assignee agree to succeed to and comply with all
terms set forth herein. This Agreement shall be binding upon the parties’
successors and permitted assigns.

 

  b)

Waiver. If either Party fails to insist on performance of any term or condition,
or fails to exercise any right or privilege hereunder, such failure shall not
constitute a waiver of such term, condition, right or privilege.

 

  c)

Survival of Obligations. Termination or expiration of this Agreement will not
relieve either Party of its obligations under Sections 8(c), 9, 10(a), 11, 12,
13(c), 15(g), 15(i), 15(o) and this Section 15(c).

 

  d)

Severability. Any provision of this Agreement that is held unenforceable or
invalid for any reason by a court of competent jurisdiction shall be reformed to
reflect the true intent of the Parties, and the remainder of the Agreement shall
continue in effect.

 

  e)

No Gratuity. Neither Party will offer or give any gratuity to induce any person
or entity to enter into, execute or perform the Agreement or any other agreement
between the Parties.

 

  f)

Enforceability. The invalidity or unenforceability of any term or condition of
this Agreement pursuant to any applicable law shall not affect the validity or
enforceability of the remaining provisions hereof, but this Agreement shall be
construed as if not containing the provision held invalid or unenforceable in
the jurisdiction in which so held unless, in the reasonable opinion of either
Party hereto, such invalid or unenforceable provisions comprise an integral part
of, or are otherwise inseparable from the remainder of, this Agreement, in which
case this Agreement, in such jurisdiction, shall immediately terminate and be of
no further force and effect.

 

  g)

Governing Law. The Agreement and any dispute arising out of or in connection
with the Agreement or the Parties’ relationship shall be interpreted, enforced
and governed by the laws of the State of New York, excluding its choice of law
rules. The parties hereby agree that any and all causes of action arising under
this Agreement shall be brought only in the United States Federal District Court
for the Southern District of New York or, if the United States Federal District
Court does not have jurisdiction, the Supreme Court of New York County, and the
parties hereby submit to the jurisdiction of said Court, and agree not to object
to the venue nor the convenience of the forum. The parties agree that the 1980
United Nations Convention on Contracts for the International Sales of Goods, as
amended to date, shall not apply to this Agreement.

 

[***]

Information has been omitted and filed separately with the Securities and
Exchange Commission. Confidential Treatment has been requested with respect to
the omitted portions.

 

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Confidential Treatment Requested by Tesla Motors, Inc.

 

  h)

Force Majeure. If and to the extent that a Party’s performance of any of its
obligations pursuant to this Agreement is prevented, hindered or delayed by
fire, flood, earthquake, elements of nature or acts of God, acts of war,
terrorism, riots, civil disorders, rebellions, revolutions, strikes, labor
disputes, a ship or airplane that is carrying the Committed Volumes for delivery
to Tesla sinking or crashing, a demand from a government with authority over the
Party to stop manufacturing the Items, or any other similar cause beyond the
reasonable control of such Party (each, a “Force Majeure Event”), then the
non-performing, hindered or delayed Party shall be excused for such
non-performance, hindrance or delay, as applicable, of those obligations
affected by the Force Majeure Event for as long as such Force Majeure Event
continues; provided, that such Party notified the other Party of such event in
accordance with this Agreement, no later than five business (5) days after its
occurrence and continues to use commercially reasonable efforts to recommence
performance whenever and to whatever extent possible without delay, including
through the use of alternate sources, workaround plans or other commercially
reasonable means. Either Party shall have the option to terminate this
Agreement, should the Parties not have been able to find a solution to resolve
the Force Majeure Event within one hundred eighty (180) days after the
occurrence and notification of such Force Majeure Event.

 

  i)

Confidentiality, Press Releases and Publicity. Panasonic and Tesla agree to keep
the terms and conditions of this Agreement confidential and not disclose them to
any third party, unless such terms and conditions are generally known or
available other than as a result of the breach of this Agreement. If either
Party is legally required to disclose the terms and conditions of this Agreement
by law or pursuant to the order of a court or a governmental agency, such Party
shall, unless legally prohibited, promptly notify the other Party to that
effect, and seek appropriate protection of the terms and conditions of this
Agreement. Such required disclosure shall not be construed as a breach of this
Agreement. Panasonic and Tesla will not issue any press release, advertising,
publicity or public statement or in any way engage in any other form of public
disclosure that refers to the relationship between the Parties or in any way
relates to the terms and conditions of this Agreement without the prior written
approval of the other Party. Any mutual undertaking of Panasonic and Tesla for
the purposes of publicity does not require prior written agreements. Each Party
may disclose the terms and conditions of this Agreement to its parent,
wholly-owned subsidiaries, accountants, attorneys, members of its Board of
Directors, and as may be required by applicable law and securities regulations.

 

  j)

Foreign Translation. This Agreement is written in the English language. The
English text of this Agreement shall prevail over any translation thereof.

 

  k)

Entire Agreement. This Agreement, including its Attachments, sets forth the
entire understanding and agreement of the Parties as to the subject matter of
this Agreement, and supersedes all prior agreements, understandings, proposals
and representations, oral or written, between the Parties as to the subject
matter, except for non-disclosure agreements. During the term of this Agreement,
all agreements between Tesla and Panasonic for the purchase and sale of the
Items shall include and be governed

 

[***]

Information has been omitted and filed separately with the Securities and
Exchange Commission. Confidential Treatment has been requested with respect to
the omitted portions.

 

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Confidential Treatment Requested by Tesla Motors, Inc.

 

 

exclusively by the terms and conditions set forth in this Agreement, except as
the parties may otherwise agree in a writing executed by their respective duly
authorized representatives. In the event of any conflict between or among any
documents that are part of this Agreement, the following order of precedence
shall apply: (i) Supply Agreement; (ii) Attachment 1; (iii) other Attachments;
(iv) Order. Any printed terms of any purchase order of Tesla, or acknowledgment
of Panasonic, and any other terms, provisions or conditions in any purchase
order of Tesla, or acknowledgment of Panasonic, which vary from, or are
inconsistent with, contrary to or in addition to the terms, provisions and
conditions of this Agreement, shall be null and void.

 

  l)

Independent Contractor. Each party acknowledges and agrees that the other party
is an independent contractor and is not an employee, agent or partner of the
other party. The parties do not intend to form a partnership or joint venture.
No party is granted any right or authority to assume or create any obligation or
responsibility, express or implied, on behalf of, or in the name of, the other
party, or to bind the other party in any matter or thing whatsoever.

 

  m)

Headings. The section headings used herein do not form a part of this Agreement
but are for convenience only and shall not limit or be deemed or construed in
any way to affect or limit the meaning of the language of the sections herein
contained.

 

  n)

Counterparts. This Agreement may be executed in two or more counterparts, each
of which shall be an original, and all of which, taken together, shall
constitute one and the same Agreement.

 

  o)

Notices. Any notice, request, consent, demand or other communication given or
required to be given under this Agreement shall be effective only if in writing
and shall be deemed to have been given when either mailed by first class
registered or certified mail, postage prepaid, return receipt requested, or sent
by a reputable express courier, addressed to the parties as follows:

 

[***]

Information has been omitted and filed separately with the Securities and
Exchange Commission. Confidential Treatment has been requested with respect to
the omitted portions.

 

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Confidential Treatment Requested by Tesla Motors, Inc.

 

 

To Tesla:

 

At the address first indicated above.

With a copy of all legal notices to:

General Counsel/Legal Department

Tesla Motors, Inc.

3500 Deer Creek

Palo Alto, CA 94304 USA

To PIC:

 

Panasonic Industrial Company,

Division of Panasonic Corporation of North America

Three Panasonic Way

Secaucus, New Jersey 07094

Attention: President

 

With a copy of all legal notices to:

General Counsel

Panasonic Corporation of North America

One Panasonic Way, 3B-6

Secaucus, New Jersey 07094

To PEC:

 

Panasonic Corporation, acting through Energy Company

1-1 Matsushita-cho, Moriguchi City, Osaka, 570-8511

Japan

Attention: [***],

Industrial Battery Marketing & Sales Office, Corporate

Industrial Marketing and Sales Division

Or to such other addresses as may hereafter be designated by like notice.

 

[***]

Information has been omitted and filed separately with the Securities and
Exchange Commission. Confidential Treatment has been requested with respect to
the omitted portions.

 

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Confidential Treatment Requested by Tesla Motors, Inc.

 

IN WITNESS WHEREOF, the Parties have caused three (3) sets of this Agreement to
be executed as of the date first above written by their duly authorized
representatives.

 

Tesla Motors, Inc.

By:

Printed name: Elon Musk

Title: Chairman and CEO

Date:

Panasonic Industrial Company, Division of Panasonic Corporation of North America

By:

Printed name: Thomas A. Gebhardt

Title: President

Date:

Panasonic Corporation, Energy Company

By:

Printed name: Masato Ito

Title: President

Date:

 

[***]

Information has been omitted and filed separately with the Securities and
Exchange Commission. Confidential Treatment has been requested with respect to
the omitted portions.

 

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Confidential Treatment Requested by Tesla Motors, Inc.

 

Table of Attachments

 

   

No

    

Name

     

1

    

List of Items, Pricing Mechanism

   

2

    

[***] Price Adjustment Mechanism Process

   

3

    

Invoicing Requirements

   

4

    

Nominated Representatives

   

5

    

Leveraging Tesla Brand Marketing

   

6

    

Quality Requirements

 

 

[***]

Information has been omitted and filed separately with the Securities and
Exchange Commission. Confidential Treatment has been requested with respect to
the omitted portions.

 

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Attachment 1

List of Items, Pricing Mechanism

 

[***] CELL PRICING                                                             
              1H12      2H12      1H13      2H13      1H14      2H14      1H15  
   2H15  

Volume (MM)1/

        [***]         [***]         [***]         [***]         [***]        
[***]         [***]         [***]   

[***] Cell Price (JPY) 2/

        [***]         [***]         [***]         [***]         [***]        
[***]         [***]         [***]   

Baseline Commodity Assumptions

                                                              

[***] Content (g) 3/

     [***]                           

[***] Price (USD / Kg) 4/

   $ [***]                           

[***] Content (g) 3/

     [***]                           

[***] Price (USD / Kg) 4/

   $ [***]                           

Illustrative Cell Pricing

                                                              

JPY/USD 5/

        [***]         [***]         [***]         [***]         [***]        
[***]         [***]         [***]   

[***] Price (USD / Kg) 6/

        [***]         [***]         [***]         [***]         [***]        
[***]         [***]         [***]   

[***] Price (USD / Kg) 6/

        [***]         [***]         [***]         [***]         [***]        
[***]         [***]         [***]   

Actual Cell Price (JPY)

        [***]         [***]         [***]         [***]         [***]        
[***]         [***]         [***]   

1/[***]

                          

2/[***]

                          

2/[***]

                          

3/[***]

                          

4/[***]

                          

5/[***]

                          

6/[***]

                          

 

[***]CELL PRICING                                                               
                   2H11      1H12      2H12      1H13      2H13      1H14     
2H14      1H15      2H15  

Volume (MM)1/

        [***]         [***]         [***]         [***]         [***]        
[***]         [***]         [***]         [***]   

[***] Price (JPY) 2/

        [***]         [***]         [***]         [***]         [***]        
[***]         [***]         [***]         [***]   

Baseline Commodity Assumptions

                                                                     

[***] Content (g) 3/

     [***]                              

[***] Price (USD / Kg) 4/

   $ [***]                              

[***]Content (g) 3/

     [***]                              

[***] Price (USD / Kg) 4/

   $ [***]                              

Illustrative Cell Pricing

                                                                     

JPY/USD 5/

        [***]         [***]         [***]         [***]         [***]        
[***]         [***]         [***]         [***]   

[***] Price (USD / Kg) 6/

        [***]         [***]         [***]         [***]         [***]        
[***]         [***]         [***]         [***]   

[***] Price (USD / Kg) 6/

        [***]         [***]         [***]         [***]         [***]        
[***]         [***]         [***]         [***   

Actual Cell Price (JPY)

        [***]         [***]         [***]         [***]         [***]        
[***]         [***]         [***]         [***]   

1/[***]

                             

2/ [***]

                             

2/ [***]

                             

3/ [***]

                             

4/[***]

                             

5/[***]

                             

6/[***]

                             

 

[***]

Information has been omitted and filed separately with the Securities and
Exchange Commission. Confidential Treatment has been requested with respect to
the omitted portions.

 

19

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Attachment 2

[***] Price Adjustment Mechanism Process

[***]

 

[***]

Information has been omitted and filed separately with the Securities and
Exchange Commission. Confidential Treatment has been requested with respect to
the omitted portions.

 

20

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Confidential Treatment Requested by Tesla Motors, Inc.

 

Attachment 3

Invoicing Requirements

 

1

All invoices shall be sent to the attention of Tesla’s assigned buyer who issued
the Order.

 

2

All invoices shall include the following:

 

  (a)

Date of Invoice,

 

  (b)

Ship To Designee,

 

  (c)

Ship To Address,

 

  (d)

Bill To: Tesla Motors, Inc.

 

  (e)

Bill To Address: 3500 Deer Creek, Palo Alto, California, 94304, U.S.A.

 

  (f)

Tesla Buyer Name

 

  (g)

Purchase Order Number,

 

  (h)

Item Number(s),

 

  (i)

Tesla Part Number

 

  (j)

Item Description(s), which is/are consistent with all other commercial invoices
and documents,

 

  (k)

Ship To Quantity,

 

  (l)

Ship To Date(s) or Collection Date(s),

 

  (m)

Costs (Items only),

 

  (n)

Shipping & Handling (only if applicable),

 

  (o)

Tax & Duty (only if applicable),

 

  (p)

Payment Term (“[***]”), and

 

  (q)

INCOTERM (only if applicable).

 

3

All drop-ship related invoices (for example, those for overseas shipment for
ASO) shall include the following additional information:

 

  (a)

Harmonized Tariff Schedule (“HTS”) Codes,

 

  (b)

Number of Cartons or Crates Shipped,

 

  (c)

Weight of Cartons or Crates Shipped,

 

  (d)

A Copy of Weigh Bill Information per carrier,

 

  (e)

Any Special Information Specified in the Order, and

 

  (f)

Value of Rejected Part(s), only if Applicable.

 

[***]

Information has been omitted and filed separately with the Securities and
Exchange Commission. Confidential Treatment has been requested with respect to
the omitted portions.

 

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Attachment 4

Nominated Representatives

 

1

The following listed names are the nominated representatives by Panasonic and
Tesla, who shall be authorized to make decisions relating to the Items and who
shall be responsible for organizing all meetings and actions provided for in
this Agreement.

 

2

Any notice, consent or approval required or permitted under this Agreement shall
be sent to in writing to the following representatives:

 

3

 

  (a)

Notices to Tesla:

Kurt Kelty

Tesla Motors, Inc.

(with a copy to Legal Department)

(with a copy to Supply Chain Management)

3500 Deer Creek

Palo Alto, CA 94304

Fax: [***]

E-mail: [***]

 

  (b)

Notices to Panasonic:

Bob Rauh

Director – Battery Sales Group

Panasonic Industrial Company, Division of Panasonic Corporation of North America

5201 Tollview Drive, E1F-3

Rolling Meadows, Illinois 60008

Telephone: [***]

Facsimile: [***]

E-mail: [***]

 

[***]

Information has been omitted and filed separately with the Securities and
Exchange Commission. Confidential Treatment has been requested with respect to
the omitted portions.

 

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Attachment 5

Leveraging Tesla Brand Marketing

1. Definitions. In this Attachment 5, the following capitalized terms shall have
the meanings specified below.

(a) “Tesla Marketing Materials” means all marketing materials that promote
Tesla’s products and vehicles that include, but are not limited to: (A) Tesla’s
trademarks, service marks, photographs, or images in promotional, advertising,
instructional, or reference materials, or on its web sites, products, labels, or
packaging; (B) marketing merchandise, props, posters, banners, toys, gifts,
mugs, etc.; (C) links to or from Tesla’s web sites to various third party sites,
including Supplier’s; and (D) display or demonstration of Tesla vehicles,
sub-systems, parts, models, or replicas in show rooms, conventions, or marketing
events.

2. Reasonable guidelines shall be provided by Tesla in the event that Supplier
wishes to use Tesla Marketing Materials.

3. The goodwill derived from using any part of a Tesla trademark exclusively
inures to the benefit of and belongs to Tesla. Except for the limited right to
use as expressly permitted under these Guidelines, no other rights of any kind
are granted hereunder, by implication or otherwise.

4. Authorized Use of Tesla Trademarks.

(a) Advertising, Promotional, and Sales Materials. Only Tesla and its authorized
licensees may use the Tesla Marketing Materials in advertising, promotional, and
sales materials. Supplier may use the Tesla Marketing Materials only as
specified in this Attachment.

(b) Word Mark. Supplier may use Tesla word mark in a referential phrase on
promotional/advertising materials, provided they comply with the following
requirements.

(i) The Tesla word mark is not part of the product name.

(ii) The Tesla word mark appears less prominent than the product name.

(iii) The reference to Tesla does not create a sense of endorsement,
sponsorship, or false association with Tesla or Tesla products or services.

(iv) The use does not show Tesla or its products in a false or derogatory light.

(c) Publications, Seminars, and Conferences. Supplier may use a Tesla word mark
in connection with book titles, magazines, periodicals, seminars, or conferences
provided Supplier comply with the following requirements:

(i) The use is referential and less prominent than the rest of the title.

(ii) The use reflects favorably on both Tesla and Tesla products or technology.

 

[***]

Information has been omitted and filed separately with the Securities and
Exchange Commission. Confidential Treatment has been requested with respect to
the omitted portions.

 

23

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Confidential Treatment Requested by Tesla Motors, Inc.

 

(iii) Supplier’s name and logo appear more prominent than the Tesla word mark on
all printed materials related to the publication, seminar or conference.

(iv) The Tesla Marketing Materials or any other Tesla-owned graphic symbol,
logo, icon or image does not appear on or in the publication or on any materials
related to the publication, seminar, or conference without express written
permission from Tesla.

(v) A disclaimer of sponsorship, affiliation, or endorsement by Tesla, similar
to the following, is included on the publication and on all related printed
materials: “(Title) is an independent (publication) and has not been authorized,
sponsored, or otherwise approved by Tesla Motors, Inc.”

(vi) A trademark attribution notice is included in the credit section giving
notice of Tesla’s ownership of its trademark(s).

(d) Web Sites. Web sites may use the appropriate Tesla word mark, provided such
use complies with the guidelines set forth in Sections 7(a) to (c) above.

8. Unauthorized Use of Tesla Trademarks.

(a) Supplier shall not use or register, in whole or in part, Tesla trademark,
including Tesla-owned graphic symbols, logos, icons, or an alteration thereof,
as or as part of a company name, trade name, product name, or service name
except as specifically noted in these guidelines.

(b) Supplier shall not use the Tesla Marketing Materials or any other
Tesla-owned graphic symbol, logo, or icon on or in connection with web sites,
products, packaging, manuals, promotional/advertising materials, or for any
other purpose except pursuant to an express written trademark license from
Tesla.

(c) Supplier shall not use an image of other variation of the Tesla Marketing
Materials for any purpose. Third parties cannot use a variation, phonetic
equivalent, foreign language equivalent, takeoff, or abbreviation of a Tesla
trademark for any purpose.

(d) Supplier shall not use a Tesla trademark or any other Tesla-owned graphic
symbol, logo, or icon in a disparaging manner.

(e) Supplier shall not use a Tesla trademark, including Tesla-owned graphic
symbols/logos, or icons, in a manner that would imply Tesla’s affiliation with
or endorsement, sponsorship, or support of a third party product or service.

(f) Supplier shall not manufacture, sell or give away merchandise items, such as
T-shirts and mugs, bearing Tesla trademark, including symbols, logos, or icons,
except pursuant to an express written trademark license from Tesla.

(g) Supplier shall not imitate the distinctive Tesla packaging, web site design,
logos, or typefaces.

(h) Supplier shall not use or imitate a Tesla’s slogan or tagline.

 

[***]

Information has been omitted and filed separately with the Securities and
Exchange Commission. Confidential Treatment has been requested with respect to
the omitted portions.

 

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Confidential Treatment Requested by Tesla Motors, Inc.

 

(i) Supplier shall not use an identical or virtually identical Tesla trademark
as a second level domain name.

9. Proper Use of Tesla Trademarks.

(a) Trademarks are adjectives used to modify nouns; the noun is the generic name
of a product or service. Trademarks may not be used in the plural or possessive
form.

(b) Spell and capitalize Tesla’s trademarks exactly as intended by Tesla. No
shortened or abbreviated Tesla product names or made-up names that contain Tesla
trademarks shall be allowed.

10. Compensation. In return for using Tesla Marketing Materials, Parties may
agree to Supplier paying Tesla a reasonable compensation for anticipated
potential for Supplier’s enhanced market position and sales. When such
agreements are made by Parties, the agreed sum shall be paid to Tesla in a
mutually agreed term, including deduction from Item costs.

 

[***]

Information has been omitted and filed separately with the Securities and
Exchange Commission. Confidential Treatment has been requested with respect to
the omitted portions.

 

25

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Confidential Treatment Requested by Tesla Motors, Inc.

 

Attachment 6

Quality Requirements

Quality Requirements. All Items sold to Tesla shall be manufactured and provided
in accordance with quality control processes, procedures and requirements
mutually agreed to by Tesla and Panasonic, including, without limitation,
quality standards, inspection standards and specifications mutually agreed to by
Tesla and Panasonic (the “Quality Requirements”). Panasonic shall, in accordance
with the Quality Requirements, provide, maintain and enforce all measures
reasonably necessary to secure [***].

PPAP. All Items shall go through a formal Production Part Approval Process (the
“PPAP process”) prior to use in a Tesla product. The PPAP process requires a
review of documents (Process Failure Mode and Effects Analysis, Design Failure
Mode and Effects Analysis) and a process audit. Panasonic shall inform Tesla of
any process changes that occur after completion of the PPAP process.

Evidence of Panasonic’s Quality Assurance; Testing. Upon Tesla’s written request
and if Panasonic determines that such disclosure of data, records or others are
acceptable, Panasonic shall deliver to Tesla [***] as will validate compliance
with the Quality Requirements. In case quality problems based upon the Quality
Requirements arise from the Items, Tesla may, upon written prior notice to
Panasonic: [***].

Pre-delivery Inspection. Panasonic shall be responsible for the quality control
of the Items it supplies to Tesla, including, without limitation, adequate
inspection and testing of Items prior to delivery.

Notice of Defective Products or Services. Panasonic shall make commercially
reasonable efforts to give Tesla written notice [***] of discovery of any defect
in the Items as set forth in Section 9(a) of this Agreement (including, without
limitation, boxes and master cartons)(the “Defect”). Such notice shall:
(i) identify the Defect and reason for the Defect, if known; (ii) state whether
the Defect can be corrected, describing in detail the means required to correct
the Defect; and (iii) estimate the time required to make the necessary
corrections. Upon receipt of notice, Tesla may, at its sole discretion, as to
any Defect, [***].

Tesla Testing. In case quality problems arise from the Items based upon the
Quality Requirements, upon receipt of a written request by Tesla, Panasonic
shall promptly conduct reasonably required engineering and quality control tests
of Items manufactured pursuant to this Agreement, and shall provide Tesla with
the results of those tests. Articles of those tests shall be determined based
upon the mutual agreement of Tesla and Panasonic.

Confidentiality. Prior to any disclosure by Panasonic to Tesla pursuant to this
Attachment 6 or prior to Tesla’s commencement of any inspections, quality
control measures and/or tests pursuant to this Attachment 6, the Parties shall
enter into a non-disclosure agreement. In connection with any inspections,
quality control measures and tests conducted pursuant to this Attachment 6,
Tesla shall comply with Panasonic’s information security management policies and
procedures. Panasonic reserves the right to shield particular confidential areas
of its facilities or processes.

 

[***]

Information has been omitted and filed separately with the Securities and
Exchange Commission. Confidential Treatment has been requested with respect to
the omitted portions.

 

26