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  Exhibit 10.24    
    

Confidential
Materials omitted and filed separately with the

Securities and Exchange Commission. Asterisks denote omissions. 

 JOINT DEVELOPMENT AND SUPPLY AGREEMENT  

        This Joint Development and Supply Agreement (this "Agreement") is made and entered into as of February 6, 2008 (the "Effective
Date") by and between A123 Systems, Inc., a Delaware corporation with offices at 321 Arsenal Street, Watertown, Massachusetts 02472 ("A123"), and AES Energy Storage, LLC, a Delaware
limited liability company, with offices at 4300 Wilson Boulevard, Arlington, Virginia 22203 ("AES"). AES and A123 individually and jointly may also be referred to as "Party" or "Parties." 

        A123
is engaged in the business of research and development, manufacturing, sale and supply of various high-power lithium-ion cells and battery systems based on
the A123's proprietary NanophosphateTM technology; and 

        A123
and AES desire to cooperate to jointly develop, prototype and deploy large format energy storage solutions based on AES designed grid interface control systems, third party power
control electronics, and A123's proprietary Nanophosphate battery technology, system design and know-how, for installation and operation in stationary power projects worldwide (the
"Program"); 

        NOW,
THEREFORE, in consideration of the mutual covenants and promises herein contained, A123 and AES hereby agree as follows: 

        1.     DEFINITIONS.
As used in this Agreement: 

        1.1    "AES Supplied Equipment" means the Power Electronics and Grid Interface equipment for the Grid Service System, except as
otherwise expressly provided.    

        1.2    "Affiliates" of a Party means all companies, natural persons, partnerships and other business entities controlled by,
under common control with, or controlling such Party, with "control" meaning either a greater than fifty percent (50%) direct or indirect ownership interest or the right to control the management of
such entity.    

        1.3    "Agreed Components" means the content of the Power Electronics and inverter/Grid Interface components provided that such
components shall be deemed to constitute [**] percent ([**]%) of the gross sales value for the Grid Service System (which represents an
approximation of the actual value which the Parties agree will be revised, if necessary, at a later date upon mutual agreement in writing by the Parties if the percentage does not accurately reflect
the actual value).    

        1.4    "Background IP" means all Intellectual Property of either Party that existed on or prior to the Effective Date or which
is initially developed by a Party or otherwise acquired by a Party for purposes outside the scope of but during the Term of this Agreement. For the avoidance of doubt,    

(a)
A123's Background IP includes, without limitation, A123's proprietary Cells and their related components, materials and chemistry, product specifications, manufacturing and development
methodologies, cell and system level software, firmware and electronics, know-how and research, experimental and development work, design details, and engineering information; and 

(b)
AES's Background IP includes, without limitation, electrical system response algorithms and control routines, control interface specifications, market optimization processes, packaging and design. 

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        1.5    "Battery System" means the systems or packs, including without limitation all related software, algorithms, firmware,
management technology and know-how, and into which the Cells will be integrated to provide energy storage solutions for the Grid Service Systems.    

        1.6    "Cell" or "Cells" means A123's proprietary Nanophosphate-based lithium
ion cells for the Program.    

        1.7    "Deliverables" means the Grid Service Systems for the Projects applying mutually agreed standards to meet applicable
Specifications.    

        1.8    "Development Plan" means the plan for the joint development of the Grid Service System set forth in the Statement(s) of
Work attached as Exhibit A hereto.    

        1.9    "Documentation" means the written reports and other materials provided by a Party to the other Party hereunder and any
other documentation developed by the Parties relating to the Deliverable.    

        1.10    "Fees" means the schedule of fees and other payments for a Project, either as set forth in Section 4 (with
respect to certain Projects) or in an applicable Statement of Work for future Projects.    

        1.11    "Grid Interface" means components and equipment necessary to connect the Grid Service System to an energy grid,
including without limitation, protection relays, switches, isolation transformers, SCADA equipment and system operating modes and control algorithms.    

        1.12    "Grid Service Systems" means large format energy storage applications on the "utility side" of the customer electricity
meter with a capacity 500 kW or greater    

        1.13    "Improvement" means any update, upgrade, new version, change, redesign, improvement or modification to (i) the
Deliverable, (ii) to a Party's Background IP or (iii) to Jointly Developed IP, whether made by A123, AES or any third party on behalf of A123 or AES.    

        1.14    "Intellectual Property" means (a) patents, patent applications, patent disclosures and all related continuation,
continuation-in-part, divisional, reissue, reexamination, utility model, certificate of invention and design patents, patent applications, registrations and applications for
registrations; (b) trademarks, service marks, trade dress, Internet domain names, logos, trade names and corporate names and registrations and applications for registration thereof;
(c) copyrights and registrations and applications for registration thereof; (d) mask works and registrations and applications for registration thereof; (e) computer software, data
and documentation; (f) inventions, trade secrets and confidential business information, whether patentable or nonpatentable and whether or not reduced to practice, know-how,
manufacturing and product processes and techniques, research and development information, copyrightable works, financial, marketing and business data, pricing and cost information, business and
marketing plans and supplier lists and information; and (g) copies and tangible embodiments of the foregoing.    

        1.15    "New Intellectual Property" means Intellectual Property developed independently by one of the Parties or jointly by the
Parties in the course of its or their performance under this Agreement and which is potentially subject to legal protection by registration or otherwise, including patents.    

        1.16    "Party" means A123 or AES and "Parties" means A123 and
AES.    

        1.17    "Power Electronics" means power control electronics equipment meeting the agreed design and performance requirements for
the Grid Service System jointly developed by the Parties pursuant to Section 2.1(c)(i), including without limitation, inverters, inverter controls, algorithms and related inverter/grid
interconnect components, controls and equipment, including without 

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limitation,
circuits, transformers, relays, contactors, fuses, communications cards, and circuit breakers.    

        1.18    "Program" means the joint development activities established under this Agreement for the development of the Grid
Service System.    

        1.19    "Project" means the specific joint development projects contemplated by the Parties under the Program, which include a
Test Project and an Initial Full-Scale Project as further defined in Section 2.1 below. The details of such Projects shall be set forth in separate Statements of Work issued
pursuant to this Agreement.    

        1.20    "Purchase Order" means the order for Deliverables signed by AES referencing this Agreement in the form attached hereto
as Exhibit C. The terms and conditions of this Agreement shall be controlling
over any pre-printed terms in a Purchase Order, which terms shall not apply unless mutually agreed by the Parties in accordance with Sections 2.4 and 3.7.    

        1.21    "Specifications" means the specifications for the Deliverable as mutually agreed by the Parties and set forth in the
applicable Statement of Work attached hereto.    

        1.22    "Test Plan" means a plan for the evaluation and approval of the Deliverable set forth in the Statement(s) of Work
attached as Exhibit A hereto.    

        1.23    "Testing Parameters" means parameters for the completion of performance tests by AES with respect to the Test Project
and the Initial Full-Scale Project attached as Exhibit B hereto.    

        1.24    "Third Party" means a party other than either of the Parties or any of their Affiliates.    

        2.     JOINT
DEVELOPMENT. 

        2.1    Development and Scope.    The Parties agree to collaborate on the terms set forth herein on the development of
a Grid Service System for the Test Project and the Initial Full-Scale Project as set forth in the Statements of Work in accordance with the timeframes set forth therein. The Parties may,
from time to time, collaborate on additional Grid Service Systems in accordance with Statements of Work and/or Purchase Orders to be agreed upon in accordance with Sections 2.4 and 3.7. In
addition to the initial focus areas of grid frequency regulation, voltage regulation, or spinning reserve (collectively "Ancillary Services"), the Parties may also, from time to time during the Term,
consider potential future development of renewable efficiency systems for wind and solar projects, peak power shaving, and hybrid generating plants (collectively, "New Product Lines") under separate
Statements of Work. 

        (a)   As
a general matter, A123 will be primarily responsible for the following: 

        (i)    Physical
packaging and layout, battery sub-system, and battery management in accordance with a mutually agreed roadmap and using A123's proprietary
processes, materials and technology; 

        (ii)   Development,
manufacture, integration and delivery of the Grid Service Systems, including the Test Project and the Initial Full-Scale Project, to the
mutually agreed Specifications. 

Sharing
information with AES regarding its Project-related technology and supporting AES in testing such technologies under applicable conditions. 

        (b)   As
a general matter, AES will be primarily responsible for the following: 

        (i)    Providing
expertise and know-how in the areas of project siting, site engineering (including substation switching and transformers), service specification,
duty cycle definition, Grid Interface, and control logic. 

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        (ii)   Identifying
a suitable site for the initial full-scale Grid Service System Project at the site of one of its power generation projects (the "Initial
Full-Scale Project"). 

        (iii)  Developing
the commercial approach and market interface for the projects based on Grid Service Systems. 

        (iv)  Procuring
the Power Electronics for the Initial Full-Scale Project from a third party supplier at AES's sole cost and expense and delivering the Power
Electronics to A123, FOB Hopkinton, MA (with an extended pass-through warranty of at least [**]) for integration by A123 into the Grid Service System. 

        (c)   As
a general matter, the Parties shall be jointly responsible for the following: 

        (i)    Cooperative
development, along with their designated third party contractors, in the areas of overall Grid Service System design and architecture and Power Electronics
for the Test Project and the Initial Full-Scale Project. 

        (ii)   Identifying
a small-scale [**] test project (the "Test Project") that will be commissioned initially under a separate Statement of Work. 

        (iii)  Developing
and providing to AES the applicable Specifications for the AES Supplied Equipment, including the Power Electronics no later than
[**] provided that such Specifications shall be in form and substance acceptable to AES, whose acceptance of such Specifications shall not be unreasonably withheld. 

Each
of the Parties shall also reasonably cooperate to resolve problems and to respond to requests for information relating to the development activities and the Grid Service Systems as soon as
reasonably possible and will cause its respective engineering personnel to meet at mutually agreed times and locations for liaison purposes to address any such issues. 

        2.2    Joint Development Committee.    The Parties will regularly exchange information, co-ordinate,
synchronize and assess achievement of objectives of their respective activities related to the development of the Grid Service Systems and other related matters. Each Project will be overseen by a
Joint Development Committee (the "JDC"). Each Party will have the right to nominate up to [**] members to the JDC and the JDC will be chaired by AES. The JDC shall plan to hold
meetings at least [**] by video or telephone conference and [**] by personal attendance. For AES, the initial JDC designees shall be named once
identified (which shall occur no later than [**] from the Effective Date) and for A123, the initial JDC designees shall be [**] and
[**]. Each Party can change their JDC designees at any time by written notice to the other Party. Each Party will also designate a Project Manager in the applicable Statement
of Work who will be responsible for coordinating all Project development activities among their respective staffs during the Test Project and Initial Full-Scale Project, with A123's
Project Manager being primarily responsible for managing the combined effort on each of these Projects. The authority of the JDC shall be limited to the administration of the activities established by
the Parties under this Agreement with respect to the Test Project, the Initial Full-Scale Project and any additional Statements of Work or Purchase Orders entered into as contemplated
herein. The responsibilities of the JDC as described in this Section 2.2 shall terminate upon the completion and acceptance of the Test Project and each applicable Project thereafter. 

        2.3    Development and Test Plans.    Each Party hereby agrees to adopt the Development Plan and the Test Plan. 

        2.4    Additional Statements of Work.    From time to time during the Term, either Party may propose an additional
Statement of Work for an additional Grid Service System Project by delivery of a proposed Statement of Work to the other Party. The other Party shall accept or reject such proposed Statement of Work
within [**] of receipt by signing and returning such Statement or 

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Work
or sending a written notice of rejection. Upon execution, each Statement of Work shall be incorporated into this Agreement and be deemed to be Exhibits hereto with respect to the relevant
Project. 

        3.     PURCHASE
AND SALE OF GRID SUPPLY SYSTEMS; EXCLUSIVITY. 

        3.1    Test Project.    The Grid Service System for the Test Project will be developed under the Statement of Work
attached hereto as Exhibit A, which provides, among other things, for the completion and delivery of such system within
[**] of the issuance of a Purchase Order for the Test Project by AES to A123. A123 and AES will use their commercially reasonable efforts to improve upon that delivery
schedule. The Purchase Order for the Test Project shall be issued by AES in accordance with Section 4.1(a). A123's delivery commitment will be extended by an additional day for every day that
the Purchase Order for the Test System issues after the date specified in Section 4.1(a). The Parties acknowledge that A123's delivery commitment will be so extended. Delivery shall be FCA A123
Hopkinton, MA. 

        3.2    Initial Full-Scale Project.    The Grid Service System for the Initial Full-Scale
Project will be developed under the Statement of Work attached hereto as Exhibit A, which provides, among other things, for deliveries of Units
(as defined below) to commence no later than [**] from the issuance of a Purchase Order for the Initial Full-Scale Project by AES to A123 and the completion of all
such deliveries by no later than [**] from the issuance of the Purchase Order for said Grid Service System by AES to A123 (the "Final Delivery Date") (with commitments
described more fully below). In the event that there is a delay in completing the delivery of all Units to AES by the Final Delivery Date and such delay is caused solely by A123, then A123 shall
reduce the total fee for the Initial Full-Scale Project by $[**] for every month of delay, provided that such reduction shall not exceed an aggregate amount of
$[**] (i.e., a maximum of [**] months of delay). Notwithstanding the foregoing, A123 and AES will use their commercially reasonable efforts to
improve upon that delivery schedule with the goal of A123 commencing deliveries to AES's designated site by [**]. The Purchase Order for the Initial Full-Scale
Project shall be issued by AES in accordance with Section 4.1(b). A123's delivery commitment will be extended by an additional day for every day that the Purchase Order for the Initial
Full-Scale Project issues after the date specified in Section 4.1(b). Delivery shall be FCA A123 Hopkinton, MA. 

        3.3    Cancellation of Initial Full-Scale Project.    AES shall have the right, in its sole discretion, to
cancel the Initial Full-Scale Project within [**] of the Effective Date by written notice to A123 solely as a result of AES's failure (after the exercise of
commercially reasonable efforts) to obtain any necessary initial agreement, acknowledgement of rights, approval or permit required for such Project from the responsible independent system operator or
similar entity or any regulatory or government body in Chile. If AES elects to cancel the Initial Full-Scale Project, then AES shall provide written notice of cancellation to A123 and,
within [**] of such notice, pay A123 an amount equal to the corresponding amount set forth in Exhibit D based on the date
of such cancellation, which shall represent A123's sole and exclusive compensation for such cancellation ("Cancellation Fee"). Notwithstanding anything herein to the contrary, if, pursuant to
Section 4.1(b), A123 has received payments from AES in excess of the Cancellation Fee, it shall be obligated to reimburse AES in an amount equal to such excess payment within
[**] of A123's receipt of the notice of cancellation. 

        3.4    Testing.    Following delivery of each of the Test Project and the Initial Full-Scale Project, AES
shall have up to [**] to conduct testing of the respective systems (the "Testing Period"), using the Testing Parameters. With respect to the Initial Full-Scale
Project, AES shall conduct such acceptance testing on each of the individual, self-contained operating units ("Units") upon delivery. AES acknowledges that time is of the essence in
conducting and completing the foregoing testing and that acceptance shall not be unreasonably conditioned, withheld or delayed, if 

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completed
prior to the expiration of the Testing Period. Upon successful completion of the testing for either the Test Project or the individual Units comprising the Initial Full-Scale
Project, AES will provide written notice of acceptance to A123 and the Warranty Period (as defined below) for such Grid Service System shall commence in accordance with Section 7.2 below. If no
such written notice is received within the foregoing time period, then the applicable system or Unit, as the case may be, shall be deemed not accepted and A123 shall have the right to demand notice of
acceptance or a written statement of the relevant performance issues from AES within [**] of such demand. The Parties may mutually agree in writing to alter the above testing
and acceptance process and the associated milestones or timeframes. 

        3.5   Exclusivity.

        (a)   From
the Effective Date through AES's notice date of acceptance (pursuant to Section 3.3 above) of the Initial Full-Scale Project (the "Initial
Exclusivity Period") and thereafter for so long as A123 agrees to receive the Exclusivity Payments from AES and such payments are made pursuant to Section 4.3 (the Initial Exclusivity Period
together with such additional period, the "Exclusivity Period"), (i) A123 will work exclusively with AES on the development and deployment of Grid Service Systems and New Product Lines (the
"Exclusivity Undertaking") and (ii) AES will use commercially reasonable efforts to secure additional orders from its Affiliates and to procure necessary financing. If AES decides to pursue the
development and deployment of products similar to the Grid Service Systems in the field of Ancillary Services, either in whole or in part, and the Initial Full-Scale Project successfully
completes its performance tests and meets its Specifications in accordance with the
Testing Parameters and the schedule set forth in the Statement of Work, AES shall be required to offer A123 the right to supply Grid Service Systems for at least
[**] percent ([**]%) of AES's projects within the field of Ancillary Services during the Initial Term and to place corresponding Purchase Orders
with A123 for said Projects (collectively the "Volume Orders"), provided that A123's Grid Service System is offered to AES on terms reasonably competitive in price and performance with other available
solutions in the Grid Service System category. Criteria that may be used to determine such reasonable competitiveness shall include without limitation, the characteristics of power rating, energy
storage capacity, safety, environmental impact and expected life. 

        (b)   If
no such Volume Orders are placed by AES by the end of the Exclusivity Period for the failure of AES to procure financing for the Initial Full-Scale
Project or otherwise, then (i) A123 shall have the right, at its option, to terminate this Agreement and market and sell such Grid Services Systems to other users or manufacturers and
(ii) AES will have no rights or license, either express or implied, to use any of A123's Intellectual Property, including New Intellectual Property developed solely by A123 in accordance with
Section 5.3(a), related to the Battery System or which is otherwise applicable to the Grid Service System that was created or developed by A123 during the Exclusivity Period except with respect
to any Units purchased to the extent necessary for the full use and operation of such Units. 

        (c)   As
the Volume Orders are placed, A123 will give [**] for Grid Services Systems to AES based on the timing of A123's receipt of such orders ahead
of other customers. Based on volumes, pricing and schedule (to be specified in the applicable Statement of Work), A123 shall be obligated to build additional production capacity, at its own expense,
to meet specified increments based on receipt and acceptance of additional Purchase Orders placed by AES ("Incremental Production Capacity Order"). 

        3.6   New Product Lines.

        (a)   During
the Initial Exclusivity Period, AES shall have a right of first refusal to enter into a Statement of Work for the exclusive development of New Product Lines as 

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contemplated
in Section 2.1 (the "RoFR Period"). A123 shall provide AES notice if, at any time during the Exclusivity Period, it receives an offer from a Third Party to develop and sell a New
Product Line, including the material terms of such offer. AES shall then have the right for a period of [**] to elect to participate in the exclusive development and purchase
of such New Product Line with A123 on the same terms as those set forth in the offer. If AES elects to participate, AES shall be entitled to exclusivity with respect to any such New Product Line if it
places Purchase Orders with A123 within the RoFR Period that represent orders for at least [**] percent ([**]%) of the total, qualified market
for such New Product Line as reflected in bona fide written offers received by A123. If the right of first refusal has been exercised by AES with respect to any New Product Line in accordance with the
[**]% threshold, then A123 shall sell such New Product Line exclusively to AES for an initial exclusivity period of no less than one (1) year (the specific period to be
mutually agreed in writing) and, after the foregoing initial exclusivity period, for so long as A123 agrees to receive Exclusivity Payments under Section 4.3 (in the same manner as is
contemplated in Section 3.4(a) with respect to Grid Service Systems). If the right of first refusal has not been exercised with respect to any New Product Line as described above, then A123
shall be free to sell such New Product Line to other users or manufacturers except for those classes of Grid Service Systems for which A123 is receiving Exclusivity Payments under Section 4.3. 

        (b)   Notwithstanding
subparagraph (a) above, at any time during the Exclusivity Period, AES shall have the right to initiate discussions with A123 regarding the
development of New Product Lines, including but not limited to AES's rights to exclusive development and purchase of any such New Product Line product. If AES initiates such discussions, A123 shall
negotiate exclusively with AES in good faith for a period not to exceed [**] unless otherwise mutually agreed, but shall be under no obligation to enter into definitive
agreements with AES. 

        3.7    Additional Grid Service Systems.    AES may submit Purchase Orders to A123 for additional Grid Service Systems
as developed under this Agreement and such Purchase Orders shall be governed by the terms and conditions of this Agreement and such other terms and conditions, if necessary, as may be mutually agreed
by the Parties and either included in an additional Statement of Work or attached hereto in Exhibit C. All Purchase Orders shall be subject to
A123's written acceptance, which shall not be unreasonably withheld or delayed. AES and A123 shall negotiate such additional terms in good faith and use commercially reasonable efforts to agree on
such terms within [**] and A123 shall not unreasonably withhold, condition or delay its consent to additional terms proposed by AES provided that they are deemed necessary to
address project-specific local procurement or regulatory requirements including terms necessary to comply with local law. 

        3.8    Inspection.    Subject to not less than [**] prior written notice to A123, AES shall
have the right to inspect the Grid Services System for the Test Project and the Initial
Full-Scale Project and to visit the manufacturing facility for such purpose, subject in all cases to the facility's reasonable safety precautions. 

        4.     FEES;
PAYMENTS; ROYALTIES; PAYMENT TERMS. 

        4.1    Fees.    

        (a)   Test Project.    Upon issuance of the Purchase Order for the Test Project Grid Service System (which shall be
issued within [**] from the Effective Date), AES shall agree to pay A123 [**] Dollars ($[**]) plus the actual costs incurred for
the procurement and preparation of the trailer for such Grid Service System which are approved in advance by AES as confirmed in writing. Payment of [**] percent
([**]%) of the Test Project fee shall be made upon issuance of the Purchase Order for the Test Project Grid Service System with the 

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remaining
[**] percent ([**]%) payable when AES provides written notice to A123 promptly following the Test Project testing indicating that such
testing has been completed and that the Grid Service System for the Test Project has met its Specifications as set forth in the applicable Statement of Work. Costs for the procurement and preparation
of the trailer previously approved by AES will be due net [**] from A123 invoice date. For the avoidance of doubt, the above fee shall include the costs of the Power
Electronics for the Test Project, which A123 shall procure. 

        (b)   Initial Full-Scale Project.    Subject to Section 3.3: 

        (i)    upon
issuance of the Purchase Order for the Initial Full-Scale Project (which shall be issued within [**] from the Effective Date),
AES shall agree to pay A123 a per Unit fee of [**] Dollars ($[**]) based on a minimum order of
[**] Units of [**] each plus the actual costs incurred for the procurement and preparation of additional trailers beyond the anticipated
[**] trailers or [**] per [**] for such Grid Service System, which are approved in advance by AES, as confirmed in writing. For
the avoidance of doubt, the above fee shall not include the costs of the Power Electronics and Grid Interface equipment that are the responsibility of AES; and 

        (ii)   Payment
of [**] percent ([**]%) of the Initial Full-Scale Project fee shall be made upon issuance of
the Purchase Order for the
Initial Full-Scale Project Grid Service System with the remaining [**] percent ([**]%) payable when AES provides written notice to
A123 promptly following the Initial Full-Scale Project testing pursuant to Section 3.4, indicating that such Unit testing has been completed and that each Unit of the Grid Service
System for Initial Full-Scale Project has met its Specifications as set forth in the applicable Statement of Work. 

        (c)   Pricing Preference.    For future Grid Service System procurements, AES or any Affiliate will pay A123 based on
a [**] of effective Grid Service System energy storage capacity. During the Initial Term and after the Exclusivity Period, the fee to be charged by A123 for the sale of
additional Grid Service Systems to AES or any Affiliate shall be [**] percent ([**]%) lower than the price of any like Grid Service Systems as of
the date sold to other utility companies by A123, based on similar volumes and terms. If during any audit under Section 4.5, AES identifies any sale to AES or any Affiliate which was not made
in accordance with this Section 4.1(c), then AES shall have the right to demand, and A123 shall pay AES as its sole and exclusive remedy, the positive difference between the price paid by AES
hereunder for any such additional Grid Service System and the price it would have paid if A123 had complied with this Section 4.1(c). 

        4.2    Royalties.    A123 shall pay a royalty to AES during the Initial Term of this Agreement equal to
[**] percent ([**]%) of the pro-rata share of the sale price of the Agreed Components which are part of any total Grid Service System
being sold by A123 to Third Parties for use in the performance of Ancillary Services and subject to Section 4.3 below. Such royalty will be calculated and paid [**] in
arrears. 

        4.3    Exclusivity Payments.    To continue the Exclusivity Period as contemplated in Section 3.5 above, AES
shall pay to A123 an amount equal to [**] percent ([**]%) of the net income generated directly by each Grid Service System supplied to AES by
A123 hereunder as long as A123 is not selling Grid Service Systems to Third Parties without the written consent of AES ("Exclusivity Payments"). The Exclusivity Payments will be calculated and paid
[**] in arrears over the Warranty Period of the applicable Grid Service Systems. Should A123 decide to make such sales to Third Parties without the consent of AES, the
Exclusivity Payments shall terminate automatically immediately upon the effective date of such sale. Upon termination of the Exclusivity Payments as provided in the preceding sentence or the
expiration of the Initial Exclusivity Period, 

8

 

whichever
is the last to occur, A123 shall be free to sell Grid Service Systems to Third Parties without restriction, subject to the royalty and price preference provisions set forth herein. 

        4.4    Income Sharing Payments.    AES shall make net income sharing payments to A123 solely with respect to the
Initial Full-Scale Project during the Warranty Period for the Initial
Full-Scale Project. The income sharing payment payable to A123 under this Section 4.4 shall be an amount equal to [**] percent
([**]%) of AES's net annual project net income derived from the Initial Full-Scale Project, but shall in no event exceed an aggregate amount of
[**] Dollars ($[**]) annually. The foregoing income sharing payments will be calculated and paid on a quarterly basis in arrears over the Warranty
Period for the Initial Full-Scale Project. 

        4.5    Audit Rights.    The Parties shall maintain a complete, clear and accurate record of all transactions related
to this Agreement for which payments are payable to each Party hereunder. To ensure compliance with the terms of this Agreement, a Party shall have the right to audit all of the relevant accounting
and sales books and records of the other Party conducted either by a Party's employees or by an independent certified public accountant reasonably acceptable to both parties whose fee is paid by the
auditing Party (other than on a contingent fee basis), which audits shall be conducted upon reasonable advance notice and during regular business hours at the audited Party's offices and in such a
manner as not to interfere with the audited Party's normal business activities. In no event shall audits be made hereunder more frequently than [**] each year during the
Initial Term and any extension term. If such audits should disclose any under-reporting, the audited Party shall promptly pay the auditing Party such amount, together with interest thereon at the rate
of 11/2% per month or the highest interest rate allowed by law, whichever is lower, from the date on which such amount became due to the auditing Party from the audited Party. If the
amount under-reported by the audited Party is equal to or greater than [**] percent ([**]%) of the total payment due to the auditing Party for
the payment period so audited, then the cost of the audit shall be borne by audited Party. 

        4.6    Method of Payment.    All payments hereunder shall be non-refundable (except as otherwise expressly
provided in Section 3.3 herein) and made by wire transfer to such bank and account as either Party may from time to time designate in writing or by such other payment method as may be mutually
agreed by the Parties. All payments shall be made in U.S. Dollars. Whenever any payment hereunder shall be stated to be due on a day which is not a day that banks are open for business in Boston,
Massachusetts (a "Business Day"), such payment shall be made on the immediately succeeding Business Day. Payments hereunder shall be considered to be made as of the day on which they are transmitted
by a Party's designated bank or otherwise received by a Party. 

        5.     OWNERSHIP
OF INTELLECTUAL PROPERTY. 

        5.1    AES Background IP.    A123 acknowledges and agrees that (i) AES shall retain all ownership or other
pre-existing rights in or to the AES Background IP, including without limitation, any Improvements or modifications made by AES to the AES Background IP arising out of, relating to or
resulting from this Agreement; and (ii) A123 has no right or license to the AES Background IP, except as expressly set forth in this Agreement. Notwithstanding anything to the contrary in this
Agreement, AES shall solely own any Improvements made by A123 (but not jointly with AES) to the AES Background IP in the course of the activities contemplated in the Development Plan. 

        5.2    A123 Background IP.    AES acknowledges and agrees that (i) A123 shall retain all ownership or other
pre-existing rights in or to the A123 Background IP, including without limitation, any Improvements made by A123 to the A123 Background IP arising out of, relating to or resulting from
this Agreement; and (ii) AES has no right or license to the A123 Background IP, except as expressly set forth in this Agreement. Notwithstanding anything to the contrary in this Agreement, A123
shall solely own any Improvements made by AES (but not jointly with A123) to the A123 Background IP in the course of the activities contemplated in the Development Plan. 

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        5.3    Jointly Developed New Intellectual Property.    

        (a)   Ownership of Jointly Developed New Intellectual Property.    Subject to the provisions of Sections 5.1
and 5.2 above, ownership of jointly developed New Intellectual Property shall be held jointly by the Parties in equal shares without a duty to account or pay royalties to the other Party (such new
jointly developed Intellectual Property, "Jointly Developed IP"), including, without limitation, any patent, copyright or other applications covering the Jointly Developed IP ("Applications"), and all
patents, copyrights and other registrations issued on the Applications ("Registrations"). With respect to any New Intellectual Property which constitutes a patent or a copyright, inventorship or
authorship shall be determined in accordance with U.S. patent or copyright law, as applicable. For the avoidance of doubt and notwithstanding the foregoing, New Intellectual Property developed solely
by a Party shall be the property of the Party who created such New Intellectual Property. 

        (b)   Improvements to Jointly Developed IP.    Improvements in or extensions to the Jointly Developed IP that are
independently developed by either Party during the term of this Agreement shall be (i) the sole property of AES if developed by AES and (ii) the sole property of A123 if developed by
A123. Improvements in or extensions to the Jointly Developed IP that are jointly developed by the Parties through the cooperation contemplated in this Agreement shall be jointly owned by the Parties
as provided in Section 5.3(a) above. 

        (c)   Rights to Use.    Each Party shall have the right to (i) use the Jointly Developed IP to use, import,
sell, offer for sale, make, or have made, products which include the Jointly Developed IP for sale to Third Parties and (ii) license the Jointly Developed IP, the Applications and the
Registrations to Third Parties subject to the limitations set forth in Section 3.4. Jointly Developed IP shall be deemed to include jointly developed Improvements pursuant to
Section 5.3(b) above for the foregoing purposes. Any fees or other sums collected by a Party in consideration of any license granted for the Jointly Developed IP, the Applications or the
Registrations may be retained by the Party without accounting to the other Party. For the avoidance of doubt, neither Party shall have any rights to any Intellectual Property of the other Party solely
because such Intellectual Property is necessary to use, import, sell, offer for sale,
make or have made products which incorporate the Jointly Owned IP, except as expressly set forth in this Agreement. 

        (d)   License to Use AES New Intellectual Property.    In consideration of the mutual covenants contained in this
Agreement, AES hereby grants to A123 a non-exclusive, fully paid, worldwide, non-sublicensable, non-transferable (subject to Section 11.10) license as to all
AES New Intellectual Property to use such AES New Intellectual Property in connection with the development, marketing and sales of Grid Service Systems to AES and to Third Parties during the Initial
Term and any extension thereto. The license granted under this Section 5.3(d) shall terminate upon any termination of this Agreement prior to the end of the Initial Term or any extension
thereto. Upon the expiration or termination of this Agreement (other than by AES for cause), A123 shall have the right to seek a license from AES to use the AES New Intellectual Property in connection
with the continued development, marketing and sales of Grid Service Systems. AES agrees to negotiate such license in good faith and under commercially reasonable terms and conditions to be mutually
agreed in writing, but this Agreement does not impose an obligation on AES to grant such a license. 

        (e)   Applications and Registrations.    The Parties shall inform each other of successful applications for
registration of Jointly Developed IP without delay, indicating the reference number and date of application and providing copies of the application documents. If a Party makes the decision to not
apply for the protection and/or registration of Jointly Developed IP or to apply in certain countries only, such Party shall report this decision to the other Party 

10

 

without
delay, and subject to any applicable restrictions under the statutes and mandatory law of the respective country, offer the other Party to apply for the protection and/or registration of such
Jointly Developed IP or to apply in the countries where the other Party does not apply for the protection and/or registration of the Jointly Developed IP. Such an offer shall be made sufficiently in
advance in order to enable the other Party to file the application in time. 

        (f)    Infringement of Third Party Intellectual Property.    In the event that either Party learns of or suspects a
Third Party is infringing its rights in the Jointly Developed IP, it shall immediately notify the other Party. Promptly thereafter, the Parties shall meet to develop a mutually acceptable strategy for
addressing such infringement. Neither Party shall take any action with respect to any such alleged infringement before such mutually acceptable strategy is determined. 

        (g)   Indemnification for Use of Jointly Developed IP.    Each Party shall indemnify and hold the other Party
harmless in respect to any claim for liability of any sort based on its own use or licensing of the Jointly Developed IP. 

        5.4    Enforcement of Background IP    Each Party agrees to use commercially reasonable efforts (subject to advice
from counsel) to prosecute, enforce and maintain all of its rights in and to its respective Background IP relevant to the Deliverables during the Term. 

        6.     CONFIDENTIALITY.

        6.1    Confidentiality Obligation.    Each Party (the "Receiving Party") shall keep strictly confidential any
information disclosed in writing, orally or in any other manner by a Party (the "Disclosing Party") or otherwise made available to the Receiving Party concerning the Disclosing Party's performance of
this Agreement or otherwise concerning the business, operations, trade secrets or other proprietary information of the Disclosing Party ("Confidential Information"), using at least the same degree of
care that it uses to protect its own confidential or proprietary information but in no event less than reasonable care for the industry. Any data or other information relating to or resulting from
joint development hereunder shall be deemed to be Confidential Information of each Party. This Agreement shall be deemed to be Confidential Information of each Party. The obligations hereunder shall
not apply to Confidential Information 

        (a)   which
is or becomes generally available to the public other than as a result of disclosure thereof by the Receiving Party in violation of this Section 6; 

        (b)   which
is lawfully received by the Receiving Party on a non-confidential basis from a third party that is not itself under any obligation of confidentiality
or nondisclosure to the Disclosing Party with respect to such information; 

        (c)   which
by written evidence can be shown by the Receiving Party to have been independently developed by the Receiving Party; or 

        (d)   which
was in the Receiving Party's possession at the time of disclosure by the Disclosing Party. 

        6.2    Nondisclosure of Confidential Information.    The Receiving Party shall use Confidential Information solely for
the purposes of this Agreement and shall not disclose or disseminate any Confidential Information to any Person at any time, except for disclosure to those of its directors, officers, employees,
accountants, attorneys, advisers and agents whose duties reasonably require them to have access to such Confidential Information, provided that such directors, officers, employees, accountants,
attorneys, advisers and agents are required to maintain the confidentiality of such Confidential Information to the same extent as if they were Parties hereto. 

11

 

        6.3    Press Releases.    No Party to this Agreement shall originate any publicity, news release or other public
announcement, written or oral, whether relating to this Agreement or any arrangement between the Parties, without the prior written consent of the other Party, except to the extent such publicity,
news release or other public announcement is required by law; provided that in such event, the Party issuing same shall still be required to consult with the other Party named in such publicity, news
release or public announcement a reasonable time (being not less than 48 hours) prior to its release to allow the named Party or Parties to comment on the use of its name and, after its
release, shall provide the named Party or Parties with a copy thereof. Neither Party shall use the name of the other for advertising or promotional claims without the prior written consent of the
other Party, which shall not be unreasonably withheld or delayed. Notwithstanding the foregoing, the Parties may introduce each other to Third Parties as "partners in the development of Grid Service
Systems for the utility industry" or in a materially similar manner. 

        6.4    Exception.    The foregoing confidentiality and nondisclosure obligations shall not prohibit the disclosure of
Confidential Information, to the extent such disclosure is required by law or by regulation; provided, however, that, in such event, the Receiving Party provides the Disclosing Party with prompt
advance notice of such disclosure so that the Disclosing Party has the opportunity if it so desires to seek a protective order or other appropriate remedy. 

        7.     WARRANTIES
AND COVENANTS. 

        7.1    Mutual Warranty.    Each Party represents and warrants to the other Party that: 

        (a)   such
party is duly organized, validly existing and in good standing under the laws of the State or country of its incorporation and has the full power and authority to
conduct its business as presently conducted and as proposed to be conducted by it and to enter into and perform this Agreement and to carry out the transactions contemplated by this Agreement; 

        (b)   the
execution and delivery of this Agreement will not violate any applicable statute, rule, or regulation to which the warranting Party is subject, or conflict with,
result in a breach of, or constitute a default under any agreement to which such Party is a party; and 

        (c)   the
warranting Party has obtained all necessary approvals to enter into this Agreement and to perform its obligations hereunder. 

        7.2    A123 Grid Service System Performance Warranty.    

        (a)   Initial Full-Scale Project.    For a period of [**], which period commences
from delivery and acceptance of each Unit of the Grid Service System (the "Warranty Period"), A123 hereby provides a warranty that each Unit of each Grid Service System shall be new at the time of
delivery and shall have been manufactured using new components, shall be free from any defects in design, materials or workmanship and that the solution performance of the Grid Service System is in
accordance, in all material respects, with the applicable Specifications for the components and equipment that A123 has designed and for which A123 is responsible under a Project, provided that
(i) the Parties utilize mutually agreed testing protocols as set forth in the applicable Statement of Work ("Testing Protocols") to determine whether a Grid Service System failure is
attributable to equipment or designs provided by AES or by A123, and (ii) AES monitors, operates, and maintains the Grid Service System in accordance with procedures reasonably defined and
required by A123 (the "Operating Requirements"). For the avoidance of doubt, the foregoing Grid Service System warranty (i) does not apply to the Grid Interface equipment and (ii) does
apply to the Power Electronics, provided that AES procures and transfers to A123 a warranty from its third party supplier(s) having the same duration and substantially the same scope as the warranty
set forth above. 

12

 

        (b)   Test Project.    A123 hereby provides AES a warranty on the Test Project that is similar in all material
respects to the warranty set forth in subparagraph (a) above, provided that the income sharing arrangement described in Section 4.4 above shall not apply and AES is not responsible for
procuring and transferring any supplier warranties for the Power Electronics. 

        (c)   Remedies.    If the Specifications for the Grid Service Systems supplied by A123 are not met by any Unit during
the Warranty Period or the warranty set forth in Section 7.2(a) above is otherwise breached with respect to any Unit and AES has met the Operating Requirements, A123 will repair the
non-conforming Unit, provided that pursuant to the Testing Protocols referenced in subparagraph (a) above, the Grid Service System failure is not attributable to equipment provided
or designed by AES. If the Grid Service System has not been restored to full service to meet the Specifications after a [**] cure period, then A123 shall promptly (but in any
case no later than [**] after such [**] cure period) replace the non-conforming equipment to bring the Grid Service System in conformance
with the Specifications. A123 may elect to replace the Grid Service System at any time within such [**] cure period and shall not be required to attempt to repair during the
[**] cure period. 

        (d)   EXCEPT
AS OTHERWISE EXPRESSLY PROVIDED ABOVE, A123 MAKES NO OTHER WARRANTIES REGARDING THE PERFORMANCE OF THE DELIVERABLES AND DISCLAIMS ALL OTHER WARRANTIES, EXPRESS OR
IMPLIED, RELATING TO THE DELIVERABLES, INCLUDING WITHOUT LIMITATION ANY WARRANTY OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE OR NONINFRINGEMENT. 

        7.3    Extended Warranty Service Contract.    Upon request, A123 will make an extended Warranty Period available to
AES upon mutually agreeable terms and conditions, including, but not limited to, additional fees for such extended warranty. 

        7.4    Covenant.    Each Party covenants that it shall not provide the other Party with any documents, information,
data, deliverables or Intellectual Property, (A) the provision of which would constitute a misappropriation of the Intellectual Property of a Third Party or (B) the use of which would
cause a Party's use, development, manufacture, sale, offering for sale or importation of the Deliverable to infringe the Intellectual Property of a Third Party. 

        8.     INDEMNIFICATION.

        8.1    Indemnification by A123.    A123 agrees to indemnify, defend and hold harmless AES and its Affiliates,
subsidiaries, members, officers, directors, employees, and agents from and against any and all claims, demands, costs, damages, settlements and liabilities (including all reasonable attorneys' fees
and court costs) of any kind whatsoever, arising directly or indirectly out of claims regarding injury to third persons or damage to Third Party property based upon any aspect of the development,
manufacture, marketing, sale, installation, use, operation, maintenance or performance of any Grid Service System, or any other product developed or manufactured by A123 under this Agreement, that is
sold to Third Parties. Such indemnity shall apply to claims asserted under any legal theory, including without limitation negligence, gross negligence, strict liability or product liability. 

        8.2    Indemnification by AES.    AES agrees to indemnify, defend and hold harmless A123 and its Affiliates,
subsidiaries, members, officers, directors, employees, and agents from and against any and all claims, demands, costs, damages, settlements and liabilities (including all reasonable attorneys' fees
and court costs) of any kind whatsoever, arising directly or indirectly out of claims regarding injury to its employees or third persons or damage to Third Party property based upon AES's or its
Affiliates' ownership, installation, use, operation or maintenance of a Grid Service 

13

 

System,
or any other product developed or manufactured by A123, and sold to AES under this Agreement. Such indemnity shall apply to claims asserted under any legal theory, including without limitation
negligence, gross negligence, strict liability or product liability. 

        8.3    Mutual Indemnification.    Each Party agrees to indemnify, defend and hold harmless the other Party and its
Affiliates, subsidiaries, members, officers, directors, employees, and agents from and against any and all claims, demands, costs, damages, settlements and liabilities (including all reasonable
attorneys' fees and court costs) of any kind whatsoever, arising directly or indirectly out of claims regarding injury to third persons or damage to Third Party property based upon its violation of
applicable law. 

        9.     LIMITATION
OF LIABILITY. 

        9.1    Disclaimer.    EXCEPT WITH RESPECT TO CLAIMS FOR BREACH OF ARTICLE 6 OR CLAIMS FOR WHICH EITHER PARTY IS
ENTITLED TO BE INDEMNIFIED UNDER ARTICLE 8, IN NO EVENT SHALL EITHER PARTY BE LIABLE FOR SPECIAL, INCIDENTAL, CONSEQUENTIAL, EXEMPLARY, PUNITIVE, MULTIPLE OR OTHER INDIRECT DAMAGES, OR FOR LOSS OF
PROFITS, LOSS OF DATA OR LOSS OF USE DAMAGES, ARISING OUT OF THIS AGREEMENT, WHETHER BASED UPON WARRANTY, CONTRACT, TORT, STRICT LIABILITY OR OTHERWISE, EVEN IF SUCH PARTY HAS BEEN ADVISED OF THE
POSSIBILITY OF SUCH DAMAGES OR LOSSES. 

        9.2    Limitation.    Except in connection with (i) A123's indemnification obligations pursuant to
Sections 8.1 and 8.3 above, (ii) damages arising from A123's breach of Section 6 (Confidentiality) or (iii) A123's willful misconduct in the performance of its obligations
under this Agreement, A123's aggregate liability to AES, whether in contract, tort, or otherwise, for all claims, in the aggregate, arising out of or in connection with this Agreement, shall not
exceed the amount of fees paid to A123 by AES hereunder in the [**] prior to the applicable claims, less any amounts paid for any other claims in such
[**] period. 

        10.   TERM
AND TERMINATION. 

        10.1    Term.    The initial term of this Agreement shall commence on the Effective Date and shall continue for an
initial term of four (4) years, unless terminated earlier as provided in this Section 10 (the "Initial Term"). The Initial Term may be extended by mutual written agreement of the Parties
for additional one (1) year extension terms. 

        10.2    Default Termination.    If a Party materially breaches, or materially fails to perform, its obligations under
this Agreement and fails to cure such breach or nonperformance within [**] after receiving written notice thereof in the case of a performance default or fifteen
(15) days if a Party becomes insolvent or is subject to any bankruptcy proceeding, then the non-breaching Party in its sole discretion may terminate this Agreement upon prior notice
to the defaulting Party. 

        10.3    Effect of Termination or Expiration.    In the event of termination or expiration of this Agreement, each
Party shall return to the other Party all Confidential Information in its possession or control within thirty (30) days of such termination or expiration. 

        10.4    Survival.    All rights granted and obligations undertaken by the Parties hereunder shall terminate
immediately upon the event of any termination or expiration of this Agreement, except for the following which shall survive according to their terms: Sections 1, 5, 6, 7, 8, 9, 10, and 11. 

        11.   MISCELLANEOUS.

        11.1    Relationship of the Parties.    Nothing herein contained will be construed to imply a joint venture,
partnership or principal-agent relationship between A123 and AES. The Parties will undertake the joint development activities as independent contractors. Personnel supplied by either 

14

 

Party
will be deemed employees of such Party and will not for any purpose be considered employees or agents of the other Party. Except as may otherwise be provided in this Agreement, each Party shall
be solely responsible for the supervision, daily direction and control of its employees and payment of their salaries (including withholding of appropriate payroll taxes), workers' compensation,
disability and other benefits. Neither Party shall have the authority to or shall take any action purporting to bind the other Party or its Affiliates or subsidiaries. 

        11.2    Notices.    All notices, reports, requests, acceptances and other communications required or permitted under
this Agreement shall be in writing. Notices will be deemed given when actually received. All communications will be sent to the receiving Party's address as first set forth above or to such other
address as the receiving Party may have provided for purposes of receiving notices. 

        11.3    Export.    AES shall be responsible for compliance with all applicable export control laws and regulations in
connection with its sale and distribution of the Grid Service Systems. 

        11.4    Binding Nature.    This Agreement shall be binding on and inure to the benefit of the Parties and their
respective successors and permitted assigns. 

        11.5    Force Majeure.    Each Party hereto shall be excused from default or delay in the performance of its
obligations hereunder if and to the extent that such default or delay is caused by an act of God, or other cause beyond its reasonable control, including but not limited to, work stoppages, war,
fires, riots, terrorism, accident, explosion, flood, storm, or failures or fluctuations in electrical power, heat light, air
conditioning or telecommunications equipment. In such event, the nonperforming Party shall be excused from performance, other than performance of payment obligations, to the extent and for as long as
such circumstances prevail and shall as soon as practicable notify the other of any actual or anticipated delay and use diligent efforts to overcome such circumstances. 

        11.6    Severability.    If any provision of this Agreement, or the application thereof, shall for any reason and to
any extent be determined by a court of competent jurisdiction to be invalid or unenforceable, the remaining provisions of this Agreement shall be interpreted so as best to reasonably effect the intent
of the Parties. The Parties further agree to replace any such invalid or unenforceable provisions with valid and enforceable provisions designed to achieve, to the extent possible, the business
purposes and intent of such invalid and unenforceable provisions. 

        11.7    Governing Law; Venue.    

        (a)   THIS
AGREEMENT SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH, AND THE RIGHTS OF THE PARTIES SHALL BE GOVERNED BY, THE LAW OF THE STATE OF NEW YORK WITHOUT REFERENCE
TO CONFLICTS OF LAW PRINCIPLES. 

        (b)   Any
legal action or proceeding with respect to the enforcement of any award by the arbitrators under Section 11.11 may be brought in the courts of the State of
New York located in New York county or of the United States of America for the Southern District of New York, and, by execution and delivery of this Agreement, each of the Parties hereby accepts for
itself and in respect of its property, generally and unconditionally, the non-exclusive jurisdiction of the aforesaid courts and appellate courts from any appeal thereof for disputes
arising under this Agreement. Subject to Section 11.11, each of the Parties irrevocably consents to the service of process out of any of the aforementioned courts in any such action or
proceeding by the mailing of copies thereof by registered or certified mail, postage prepaid, to such Party at its notice address provided pursuant to Section 11.2 hereof. Each of the Parties
hereby irrevocably waives any objection which it may now or hereafter have to the laying of venue of any of the aforesaid actions or proceedings arising out of or in connection with this Agreement
brought in the courts referred to above and hereby further irrevocably 

15

 

waives
and agrees not to plead or claim in any such court that any such action or proceeding brought in any such court has been brought in an inconvenient forum. Nothing herein shall affect the right
of either Party to serve process in any other manner permitted by law or to commence legal proceedings or otherwise proceed against the other Party in any other jurisdiction. 

        (c)   THE
PARTIES HEREBY IRREVOCABLY WAIVE, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY AND ALL RIGHTS TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR
RELATING TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY. 

        11.8    No Waiver.    No waiver or failure to exercise any option, right or privilege under the terms of this
Agreement by either of the Parties hereto on any occasion or occasions shall be construed to be a waiver of the same on any other occasion or of any other option, right or privilege. 

        11.9    Headings and References.    The headings and captions used in this Agreement are for convenience only and are
not to be considered in construing or interpreting this Agreement. All references in this Agreement to Sections or Exhibits shall, unless otherwise provided, refer to Sections hereof or Exhibits
attached hereto, all of which Exhibits are incorporated herein by this reference. 

        11.10    Assignment.    This Agreement may not be assigned by either Party without the prior consent of the other
Party, which shall not be unreasonably withheld or delayed, except that (i) AES may assign this Agreement or any individual Statement of Work to any Affiliate, and (ii) either Party may
assign this Agreement to a successor in connection with a merger, consolidation or sale of all or substantially all of such Party's business related to this Agreement, provided that such successor
agrees in writing to assume and be bound by all the provisions of this Agreement. 

        11.11    Dispute Resolution.    Any claim, counterclaim, demand, cause of action, dispute or controversy arising out
of or relating to this Agreement (or any agreement delivered in connection with this Agreement) or the breach, termination or validity thereof, or in any way relating to the subject matter of this
Agreement involving the Parties or their representatives (each a "Dispute") shall be resolved by final and binding arbitration even if such Disputes allegedly are extra-contractual in nature, sound in
contract, tort or otherwise, or arise under state or federal law. Arbitration shall be conducted in accordance with the Commercial Arbitration Rules of the American Arbitration Association ("AAA")
then in effect (the "Rules"). The validity, construction, and interpretation of this Agreement to arbitrate, and all procedural aspects of the arbitration conducted pursuant hereto that are not
covered by the Rules or the Act shall be determined by the arbitrators. In deciding the substance of the Parties' Dispute, the arbitrators shall follow the governing law. The arbitrators shall have no
authority to award consequential, exemplary, or punitive damages of any type under any circumstances whether or not such damages may be available under applicable law or under the Rules, the Parties
hereby waiving their right, if any, to recover any such damages. The arbitration proceeding shall be conducted and the award shall be rendered in New York, New York. There shall be three neutral
arbitrators. Within fifteen (15) days of receipt by a Party of a copy of the demand for arbitration, each Party shall select one arbitrator. The two Party-appointed arbitrators shall select a
third arbitrator, who shall serve as chair of the arbitral tribunal, within thirty (30) days of the appointment of the second arbitrator. Any arbitrator not timely selected in accordance with
this agreement and the Rules shall be selected by the AAA in accordance with the Rules. To the fullest extent permitted by law, any arbitration proceeding and the arbitrators' award shall be
maintained in confidence by the Parties. The arbitral award shall be in writing, and shall state the findings of fact and conclusions of law upon which it is 

16

 

based.
Each Party agrees that any arbitration award against it may be enforced in any jurisdiction in which such Party holds or keeps assets or by any court having jurisdiction 

        11.12    Equitable Relief.    Except as otherwise expressly provided herein, no remedy granted to either Party herein
shall be exclusive of any other remedy, and each remedy shall be cumulative with every other remedy herein or now or hereafter existing at law, in equity, by statute or otherwise. All claims or causes
seeking injunctive or other equitable relief may be heard in any court of competent jurisdiction and the Parties hereby irrevocably consent to the jurisdiction of such courts. 

        11.13    Counterparts.    This Agreement may be executed simultaneously in one or more counterparts thereof, each of
which shall be deemed an original but all of which together shall constitute one and the same instrument. 

        11.14    Entire Agreement.    This Agreement supersedes and cancels any previous agreements or understandings, whether
oral, written or implied, heretofore in effect including without limitation the Term Sheet between the Parties dated as of October 30, 2007, and sets forth the entire agreement between the
Parties with respect to the subject matter hereof. No modification or change may be made in this Agreement except by written instrument duly signed by a duly authorized representative of each Party. 

        [Intentionally
Blank] 

17

 

        IN
WITNESS WHEREOF, the Parties hereto have caused their duly authorized representatives to execute and deliver this Joint Development and Supply Agreement as of the Effective Date first
indicated above. 

							
	AES Energy Storage, LLC	 	A123 Systems, Inc.
	

By:	
 	

/s/ John Chris Sherton

	
 	

By:	
 	

/s/ Michael Rubino

	

Name:	
 	

John Chris Sherton

	
 	

Name:	
 	

Michael Rubino

	Title:	 	President

	 	Title:	 	CFO                                  

18

 

 
Exhibit A 

 STATEMENT OF WORK Test Project  

        This Statement of Work for the Test Project is entered into between A123 Systems, Inc. ("A123") and AES pursuant to the Joint
Development and Supply Agreement (the "Agreement") between A123 and AES dated February 6, 2008 and shall be in all respects subject to the terms and conditions of said Agreement, which are
incorporated herein by reference. The terms and conditions below may be revised by mutual agreement in future Statements of Work. 

DESCRIPTION OF SERVICES AND PROJECT MILESTONES
  

[**] 

 LOCATION OF PERFORMANCE  

 The Services are to be performed at the following location(s):  

[**] 

 TIMING OF PERFORMANCE  

 The Services are to be performed within the following time frame:  

[**]. 

 ADDITIONAL TERMS  

[**] 

 Acknowledged and agreed:  

							
	AES Energy Storage, LLC	 	A123 Systems, Inc.
	

By:	
 	

/s/ John C. Sherton

	
 	

By:	
 	

/s/ B.E. Collins

	

Name:	
 	

John C. Sherton

	
 	

Name:	
 	

B.E. Collins

	

Title:	
 	

President

	
 	

Title:	
 	

V.P. Engineering ESG

19

 
 Exhibit A  

 STATEMENT OF WORK Initial Full Scale Project (Chile)  

        This Statement of Work for the Initial Full Scale Project is entered into between A123 Systems, Inc. ("A123") and AES Energy
Storage, LLC or its designated Affiliate ("AES") pursuant to the Joint Development and Supply Agreement between A123 and AES dated February 6, 2008 (the "Agreement") and shall be in all
respects subject to the terms and conditions of the Agreement, which are incorporated herein by reference. The terms and conditions below may be revised by mutual agreement in future Statements of
Work. 

[**]

A
total of one page has been omitted pursuant to a request for confidential treatment. 

IV.    Location
of Performance

The Services are to be performed at the following location(s): 

[**] 

V.    Timing
of Performance

The Services are to be performed within the following time frame: 

[**] 

VI.    Additional
Terms 

[**].

 Acknowledged and agreed:  

							
	AES Energy Storage, LLC	 	A123 Systems, Inc.
	

By:	
 	

/s/ NORGEMER

	
 	

By:	
 	

/s/ B.E. Collins

	

Name:	
 	

Joaquim Melendez

	
 	

Name:	
 	

B.E. Collins

	

Title:	
 	

Project Director

	
 	

Title:	
 	

V.P. Engineering ESG

20

 
Exhibit B

 Unit Testing Parameters—Test Project  

        [**]. 

 Unit Testing Parameters—Initial Full Scale Project  

        [**]. 

21

 
Exhibit C

Form
of Purchase Order/Additional Terms and Conditions (if applicable) 

22

 
Exhibit D

Calculation
of Cancellation Penalty (per Section 3.3) 

			
	Date of A123's Receipt of

Cancellation Notice from AES

 
	 	Penalty Amount (% of

total Initial Full-Scale

Project fee in

Section 4.1(b)(i))* 
	By March 15, 2008	 	[**]%
	

On or after March 16, 2008 thru April 15, 2008	
 	

[**]%
	

On or after April 16, 2008 thru May 15, 2008	
 	

[**]%
	

On or after May 16, 2008 thru June 15, 2008	
 	

[**]%
	

On or after June 16, 2008	
 	

[**]%

	*
	Upon
any cancellation, AES or its designated Affiliate shall receive all Deliverables completed or in progress as of the effective date of cancellation. 

23

 
Amendment Number 1 to Joint Development and Supply Agreement

        This
Amendment Number 1 ("Amendment") is made and entered into as of March 14, 2008 (the "Effective Date") by and between A123 Systems, Inc., a Delaware corporation,
321 Arsenal Street, 3rd Floor, Watertown, MA 02472 (the "Company") and, AES Energy Storage, LLC, a Delaware limited liability company, 4300 Wilson Boulevard, Arlington,
Virginia 22203 ("AES") in order to amend the Joint Development and Supply Agreement dated as of February 6, 2008 between the parties (the "JDSA"). 

        Unless
expressly provided herein, the defined terms in the JDSA shall have the same meaning when used in this Amendment. 

        In
consideration of the mutual covenants and agreements contained herein, and other consideration, the receipt and sufficiency of which is hereby acknowledged, the parties hereto agree
to amend the JDSA as follows: 

1.    Amendments.    

	(a)
	Delete
Section 1.20 in its entirety and replace with the following new Section 1.20: 

1.20.
"Purchase Order" means the order for Deliverables, signed by AES or by its designated Affiliate ("Designated Affiliate") referencing this
Agreement, either in the form attached hereto as Exhibit C or an alternative form that is mutually acceptable to the Parties. In each case, the
AES Designated Affiliate issuing a Purchase Order shall be bound by the terms and conditions of this Agreement. Notwithstanding anything herein to the contrary, AES shall be jointly and severally
liable for its Designated Affiliate's obligations arising under the Purchase Order for the Initial Full-Scale Project but, in all other cases, the Designated Affiliate shall be solely
liable for its obligations arising under any Purchase Order issued by it and AES shall have no responsibility therefore unless otherwise agreed by AES in writing. The terms and conditions of this
Agreement shall be controlling over any pre-printed or new terms in a Purchase Order, which terms shall not apply unless mutually agreed by the parties to such Purchase Order in accordance
with Sections 2.4 and 3.7.  

	(b)
	Add
the following sentence at the end of Section 2.4: 

Notwithstanding
anything herein to the contrary, AES shall be jointly and severally liable for its Designated Affiliate's obligations arising under the Purchase Order for the Initial
Full-Scale Project but, in all other cases, the Designated Affiliate shall be solely liable for its obligations arising under any Purchase Order issued by it and AES shall have no
responsibility therefore unless otherwise agreed by AES in writing.  

	(c)
	Delete
the following sentence from Section 3.2 in its entirety: 

The
Purchase Order for the Initial Full-Scale Project shall be issued by AES in accordance with Section 4.1(b). 

and
replace it with the following new sentence: 

The
Purchase Order for the Initial Full-Scale Project shall be issued by AES or by its Designated Affiliate, in accordance with Section 4.1(b).  

	(d)
	Delete
Section 4.1(b) in its entirety and replace it with the following new Section 4.1(b):

	(b)
	Initial Full-Scale Project.    Subject to Section 3.3: 

        (i)    upon
issuance of the Purchase Order for the Initial Full-Scale Project (which shall be issued within thirty (30) days from the Effective Date), AES
(or its Designated Affiliate), shall agree to pay A123 a per Unit fee of [**] Dollars ($[**]) based on a
minimum order of [**] Units of [**] each plus the actual costs incurred for the procurement and preparation of 

24

 

additional
trailers beyond the anticipated [**] trailers or [**] per [**] for such Grid Service System, which are approved in
advance by AES (or its Designated Affiliate), as confirmed in writing. For the avoidance of doubt, the above fee shall not include the costs of the Power Electronics and Grid Interface equipment that
are the responsibility of AES (or its Designated Affiliate); and 

        (ii)   Payment
of [**] percent ([**]%) of the Initial Full-Scale Project fee shall be made upon issuance of
the Purchase Order for the Initial Full-Scale Project Grid Service System with the remaining [**] percent ([**]%) payable when AES
(or its Designated Affiliate) provides written notice to A123 promptly following the Initial Full-Scale Project testing pursuant to Section 3.4, indicating that such Unit testing
has been completed and that each Unit of the Grid Service System for Initial Full-Scale Project has met its Specifications as set forth in the applicable Statement of Work. 

	(e)
	Delete
the first sentence of Section 4.3 in its entirety and replace it with the following sentence: 

To
continue the Exclusivity Period as contemplated in Section 3.5 above, AES shall pay to A123 an amount equal to [**] percent ([**]%) of
the net income generated directly by each Grid Service System supplied to AES (or to its Designated Affiliate) by A123 hereunder as long as A123 is not selling Grid Service Systems to Third Parties
without the written consent of AES ("Exclusivity Payments"). 

2.    Except
as amended hereby, the JDSA is hereby ratified by the parties and shall remain in full force and effect. This Amendment Number 1 contains the entire agreement of the
parties and supersedes all earlier agreements and understandings, oral and written, between the parties with respect to the subject matter hereof. 

        The
parties have caused this Amendment Number 1 to be executed by their respective authorized representatives as of the Effective Date. 

							
	A123 Systems, Inc.	 	AES Energy Storage, LLC
	

By:	
 	

/s/ Michael Rubino

	
 	

By:	
 	

/s/ John Chris Sherton

	

Name:	
 	

Michael Rubino

	
 	

Name:	
 	

John Chris Sherton

	

Title:	
 	

CFO

	
 	

Title:	
 	

President

25

 
Amendment Number 2 to Joint Development and Supply Agreement

        This
Amendment Number 2 ("Amendment") is made and entered into as of July 2, 2008 (the "Effective Date") by and between A123 Systems, Inc., a Delaware corporation,
321 Arsenal Street, 3rd Floor, Watertown, MA 02472 (the "Company") and, AES Energy Storage, LLC, a Delaware limited liability company, 4300 Wilson Boulevard, Arlington,
Virginia 22203 ("AES") in order to amend and supplement the Joint Development and Supply Agreement dated as of February 6, 2008 between the parties, as amended by Amendment Number 1
dated March 14, 2008 (collectively, the "JDSA") in accordance with its terms. 

        Unless
expressly provided herein, the defined terms in the JDSA shall have the same meaning when used in this Amendment. 

        In
consideration of the mutual covenants and agreements contained herein, and other consideration, the receipt and sufficiency of which is hereby acknowledged, the parties hereto agree
to amend and supplement the JDSA as follows: 

1.    Amendments; Supplementary Terms and Conditions.

        Pursuant
to Section 3.7 of the JDSA, the following supplementary terms and conditions are hereby added to Exhibit C of the
JDSA, which shall apply solely with respect to the additional Grid Service Systems purchased by AES or its Designated Affiliates under a Purchase Order (or Purchase Orders), except as otherwise
provided herein, to be issued to A123 by AES or its Designated Affiliates on or after the Effective Date and subject to subparagraph (iv) below: 

        (i)    New Order:    AES or one or more of its Designated Affiliates shall purchase a total of
[**] Units ("Total Units") (2MW, .5MWh each) at a purchase price of $[**] per Unit (total purchase price of $[**]). For purposes
of this Amendment Number 2, "Units" shall refer to the individual, self-contained operating containers having the specifications described herein. The purchase price for these Units
includes on-site start-up training costs [**]. Project management and on-site applications support will be made available by A123 at
additional quoted cost upon AES's request. For each Unit set forth in a Purchase Order that is submitted by AES or one of its Designated Affiliates and is rejected by A123 (including, without
limitation, as a result of review by A123 pursuant to the fifth bullet point of Section 1(iv)), the Total Units above shall be reduced by [**]. 

        (ii)   Power Electronics:    AES shall be responsible for procuring the necessary Power
Electronics for the Units from a third party supplier at AES's sole cost and expense and delivering the Power Electronics to A123, FOB Hopkinton, MA (with an extended pass-through warranty
of at least [**]) for integration by A123 into the Units in accordance with the schedule set forth in the relevant Purchase Order. 

        (iii)  Specifications:    The Units will be assembled and built by A123 in accordance with
the Services set forth in the Statement of Work (Section III) currently in effect for the Initial Full-Scale Project, unless revised by mutual written agreement, although the
parties acknowledge that the destination and application of these Units to be identified in the relevant Purchase Order for such Units may vary. AES, at its sole cost and expense, shall be responsible
for the procurement, installation and piping/connection to the Units of [**] contained in the Units (a minimum of [**] of [**]
per Unit) in accordance with the schedule set forth in the relevant Purchase Order. The water chillers shall be
integrated by A123 into the Units and shall have an extended pass-through warranty to A123 of at least [**]. Any changes to current Unit specifications will require
re-submittal of pricing by A123 to AES. 

26

 

        (iv)  Payment Terms:
  

	•
	[**] Percent ([**]%) of the Total Unit purchase price
($[**]) (the "Initial AES Deposit") will be due and payable by AES within [**] of the Effective Date in advance of any Purchase Order placement by a
Designated Affiliate. This amount shall be held by A123 as security and refundable to AES as provided below. 

 
	•
	[**] Percent ([**]%) of the applicable Unit purchase price (the
"Affiliate
Deposit") will be due and payable by the Designated Affiliate upon issuance of each Purchase Order for a specified Unit. The Designated Affiliate shall be required to issue such Purchase Order(s) at
least [**] prior to the requested shipment date of the applicable Units from A123. 

 
	•
	[**] Percent ([**]%) of the applicable Unit purchase price (the "Final
Payment") will be due and payable by the Designated Affiliate when such Designated Affiliate provides written notice to A123 promptly following completion of Unit acceptance testing indicating that
such Unit has met its specifications as set forth in the applicable Statement of Work. For purposes of this Amendment Number 2, the Testing Period shall be [**]
following the delivery of each Unit or Units. Acceptance testing shall otherwise be conducted in accordance with Section 3.4 of the JDSA. 

 
	•
	A123 shall refund [**]
 percent ([**]%) of the Initial AES Deposit
to AES each time A123 receives a combination of [**] Purchase Orders which collectively represent an order for [**] Units and the
Affiliate Deposit for each such Unit Purchase Order from the Designated Affiliate, such amount to be due and payable by A123 to AES within [**] of A123's receipt of the
Purchase Order and Affiliate Deposit for the [**] Units. 

If
the Initial AES Deposit is not returned as to any Unit in accordance with the above procedure, such failure by A123 shall constitute a default pursuant to Section 10.2 of the JDSA and, in
addition to any other remedies, each Designated Affiliate shall have the right to offset such amount against the Final Payment with respect to such Unit.  

	•
	A123 reserves the right to conduct its standard credit check on any Designated Affiliate that may issue a Purchase Order
hereunder in order to determine whether such Designated Affiliate meets A123's customer credit standards. 

        (v)   Delivery Schedule:    A123 shall deliver the Units to AES or its Designated Affiliate
in accordance with the following delivery schedule and subject to any additional, mutually agreed delivery terms that may be set forth in the relevant Purchase
Orders:

	•
	[**] Units by the end of [**]; and

 
	•
	[**] additional Units by the end of [**] 

The
foregoing delivery schedule may be moved out by a maximum of [**] upon prior notice by either party. Any other adjustments shall be subject to mutual written agreement. 

        (vi)  Exclusivity:    The parties acknowledge and agree that the Initial Exclusivity Period as defined in
Section 3.5 of the JDSA shall be modified so that it shall expire as of December 31, 2009. For the avoidance of doubt, the foregoing shall apply to all Units ordered under the JDSA since
its Effective Date. Accordingly, the first sentence of Section 3.5(a) of the JDSA is deleted in its entirety and is replaced with the following new sentence: 

From
the Effective Date through December 31, 2009 (the "Initial Exclusivity Period") and thereafter for so long as A123 agrees to receive the Exclusivity Payments from AES and such payments are
made pursuant to Section 4.3 (the Initial Exclusivity Period together with such additional period, the "Exclusivity Period"), (i) A123 will work exclusively with AES on the development
and deployment of Grid Service Systems and New Product Lines (the 

27

 

"Exclusivity
Undertaking") and (ii) AES will use commercially reasonable efforts to secure additional orders from its Affiliates and to procure necessary financing. 

        (vi)  Exclusivity Payments:    AES will pay A123 exclusivity payments in accordance with
Section 4.3 of the JDSA with respect to this Purchase Order. For the avoidance of doubt, it is acknowledged that AES's requirement related to additional Volume Orders under Section 3.5
of the JDSA shall remain in effect during the Initial Term. 

        (vii)  Recycling:    AES shall have the option to send Units, including those
previously ordered under the JDSA, to A123 at their end-of-life for recycling and recovery purposes. AES shall bear all related shipping and handling costs to send such Units
to A123's specified recycling destination. If AES elects the foregoing recycling option, AES shall transfer such Units to A123 at no cost. 

        (viii)  Warranty:    The performance warranty applicable to the Units shall be consistent
with the performance warranty and the other terms and conditions applicable to the Initial Full-Scale Project set forth in Section 7.2(a) of the JDSA with the addition of the
following: The Units shall meet the [**] requirements of the AES-supplied, [**] Profile, with a maximum [**] rate of
[**] throughput per cell (the "Profile") for a period of [**] (commencing upon the delivery and acceptance of each Unit), or a similar
[**] profile with the same or lower metrics as the Profile, provided that any [**] profile that does not have the same or lower metrics as the Profile
shall require the mutual written agreement of the parties. For the avoidance of doubt, the remedies set forth in Section 7.2(c) of the JDSA shall be available to AES in the event of a breach of
the foregoing warranty by A123. 

2.    Except
as amended and supplemented hereby, the JDSA is hereby ratified by the parties and shall remain in full force and effect. This Amendment Number 2 contains the entire
agreement of the parties and supersedes all earlier agreements and understandings, oral and written, between the parties with respect to the purchase of additional Grid Service Systems under
subparagraph (i) and the other subject matter hereof. 

        The
parties have caused this Amendment Number 2 to be executed by their respective authorized representatives as of the Effective Date. 

							
	A123 Systems, Inc.	 	AES Energy Storage, LLC
	

By:	
 	

/s/ David P. Vieau

	
 	

By:	
 	

/s/ John C. Shelton

	

Name:	
 	

David P. Vieau

	
 	

Name:	
 	

John C. Shelton

	

Title:	
 	

President

	
 	

Title:	
 	

President

28

QuickLinks

Exhibit 10.24QuickLinks
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  Exhibit 10.25    
    

        Confidential
Materials omitted and filed separately with the

Securities and Exchange Commission. Asterisks denote omissions. 

 CONTRACT MANUFACTURING AGREEMENT  

        Effective March 1, 2006 ("Effective Date"), A123 Systems, Inc., a Delaware corporation, with offices at Arsenal on the
Charles, One Kingsbury Avenue, Watertown, MA 02472 ("Contractor"), and Black & Decker Macao Commercial Offshore Limited, a corporation formed under the laws of Macao ("Black & Decker"),
agree as follows: 

I.     DEFINITIONS  

        1.1   "Affiliate" shall mean any parent company of either Black & Decker or Contractor or any company in which
Black & Decker, Contractor or either of their parent companies, respectively, owns directly or indirectly a majority share. 

        1.2   "Cell" shall mean the Contractor's ANR 26650M1 cell. 

        1.3   "Pack" shall mean the housing, end caps, control module and associated fasteners used to house the Cells for the battery
pack used with the line of 36 volt lithium-ion powered power tools sold by Black & Decker or its Affiliates. 

        1.4   "Product" shall mean the assembled battery pack, comprised of Cells and Packs, used with the line of 36 volt
lithium-ion powered power tools sold by Black & Decker or its Affiliates. 

        1.5   "Productivity" shall mean a quantitative current year result agreed upon by Black & Decker and Contractor which is
benchmarked as a measurement for the next year's continuous improvement activity. 

        1.6   "Purchase Obligations" shall mean purchases ordered by Black & Decker from time to time under this Contract
Manufacturing Agreement. 

        1.7   "Purchase Order" shall mean the form attached hereto as Exhibit A used by Black & Decker to place orders
from the Contractor, whether sent by mail, facsimile or electronically. 

II.    PURCHASE AND SALE  

        2.1   The
parties have entered into a Cooperative Development and Supply Agreement dated as of January 20, 2005 (the "CDSA"), pursuant to which the Product has been
developed. The CDSA contains certain provisions referenced herein that apply to the contract manufacturing relationship. 

        2.2   Black &
Decker agrees to a contract manufacturing commitment with the Contractor for the Product. This document establishes the terms and conditions under which
the parties and their Affiliates will be governed. All transactions between Black & Decker and Contractor will be conducted in accordance with this Agreement. To the extent that there are any
inconsistencies in the terms of the CDSA, this Agreement, Black & Decker Purchase Orders, the terms and conditions of sale outlined on a Contractor invoice or any terms and conditions set forth
on any other document provided by the parties hereto, the terms of the CDSA shall govern, and the other documents shall have precedence in the order they are listed in this sentence. 

        2.3   Black &
Decker will buy and Contractor will manufacture and supply, in amounts as ordered by Black & Decker from time to time, the Products, with planned
purchase volumes as set forth in the CDSA. Black & Decker further agrees to purchase the volume of Products set forth in the CDSA, subject to the terms thereof. 

        2.4   Contractor,
at Black & Decker's request, shall manufacture and supply the Product to any of Black & Decker's majority-owned subsidiaries, to the extent of
Contractor's capacity, on the same 

 

terms
and conditions expressed in this Agreement, with prices adjusted as necessary for the increase or decrease in costs occasioned by any Product changes required. Black & Decker shall
establish volumes and priorities of Contractor's shipment of the Product to Black & Decker locations which purchase the Product. 

        2.5   Both
Black & Decker and Contractor agree to conduct business with the spirit and principles of continuous improvement serving as a foundation on which to build an
ongoing cooperative relationship between the two companies. To further this effort, both parties agree to cooperate on programs which will enhance the
following:

	•
	Quality/Process Improvement 

 
	•
	Communications 

 
	•
	Flexibility/Quick Response 

 
	•
	Technology Advancement 

 
	•
	Productivity Improvements 

 
	•
	Cost Control 

Black &
Decker and Contractor will mutually agree on quantitative current year results and then benchmark these results as a measurement for the next year's continuous improvement activities. 

III.  PRICING, PAYMENT TERMS AND SHIPPING TERMS  

        3.1   Commencing
upon Contractor's receipt of Black & Decker's written authorization to initiate bulk production, the pricing, payment and shipping terms shall be as
indicated below and, except as otherwise provided herein, shall not increase through the First Year of the Exclusivity Agreement (as contemplated by the CDSA). Thereafter, revisions to the prices
shall be as agreed upon by the parties. 

			
	Pricing;	 	US $[**] per Product
	

  Shipping Terms:	

 	

FOB Vessel at Port of Loading; title transfer will occur at vessel.
	
Payment Terms:	
 	

First Year of Exclusivity Agreement: T/T [**] calendar days after receipt of original Bill of Lading.
	

 	
 	

Second Year of Exclusivity Agreement: T/T [**] calendar days after receipt of original Bill of Lading.
	

 	
 	

Third Year of Exclusivity Agreement: T/T [**] calendar days after receipt of original Bill of Lading.

        3.2   Contractor
warrants that all sales made hereunder are or will be made at not less than fair value under the United States Anti-Dumping law (19 U.S.C. Sec.
1673-1677n), and Contractor will indemnify, defend and hold Black & Decker harmless from and against any costs or expenses, including, but not limited to, any
anti-dumping duties which may be imposed arising out of or in connection with any breach of this warranty. Contractor shall have the right upon written notice to Black & Decker to
increase Pricing per Unit to the extent necessary to remain in compliance with such law. 

        3.3   In
the spirit of continuous improvement, Contractor agrees to share material cost information, including such information related to the bill of materials for the
battery pack, but not the cell, and use its commercially reasonable best efforts to work with Black & Decker to achieve a minimum [**]% cost 

2

 

reduction
goal in the Second Year of Exclusivity (as contemplated by the CDSA) for each Product covered by this Agreement. 

IV.    SUPPLY  

        4.1   (a)
It is Contractor's responsibility to furnish the quantity specified in subsequent purchase order releases issued in connection herewith. Black & Decker's
orders will be based on increments of master carton or pallet quantities, as agreed on by the parties. No variation in quantity will be accepted as compliance. Black & Decker reserves the right
to return excess shipments of Products at Contractor's expense, 

        (b)   In
addition, beginning [**] after Contractor's receipt of written authorization from Black & Decker to initiate bulk production, the
following variations in orders versus forecasted amounts will be permitted and it shall be Contractor's responsibility to be able to supply a certain percentage over forecasted amounts in the event of
unplanned increases in demand for the Products, as set forth below: 

			
	Weeks Prior to Shipment Date

 
	 	Required Flexibility

in Capacity 
	 [**] weeks
	 	+/- [**]%
	 [**] weeks
	 	+/- [**]%
	 [**] weeks
	 	+/- [**]%

        4.2   Every
week, Black & Decker will supply Contractor with an updated delivery and forecast schedule for the upcoming [**]-month period. The
parties agree that Black & Decker is not making a firm commitment to purchase any amount of Products set forth in such forecasts and is providing them to Contractor for planning purposes only.
Contractor will provide Black & Decker with usage reports of volume purchased under this Agreement as requested. 

        4.3   Contractor
acknowledges that the delivery schedules agreed between Black & Decker and Contractor are of significant importance to Black & Decker's
customers. Contractor shall use its commercially reasonable best efforts to deliver all products in accordance with the delivery schedules set forth in Black & Decker's purchase orders. If a
shipment delay is caused by Contractor, and such delay causes cancellations of orders by Black & Decker's customer, or if Black & Decker is subjected to other forms of penalties caused
by shipment delays caused by Contractor, then upon the written request of Black & Decker, Contractor will deliver part or full shipment quantity via airfreight at Contractor's cost; however,
Contractor's liability under this Section 4.3 shall be limited to $[**], and any such expenditures shall be negotiated by the Parties based on the financial
reasonableness of the charges and the circumstances that triggered Contractor's obligation to ship Products via airfreight. 

        4.4   Neither
Black & Decker nor Contractor shall be liable for delays in performance or from non-performance due to causes beyond reasonable control such
as act of god, act of civil or military authority, action or request of government authority, strikes, riots and epidemics, but both Black & Decker and Contractor shall be diligent in
attempting to remove such cause or causes. Promptly upon the occurrence of any event hereunder which may result in a delay in the delivery of products, Contractor shall give notice thereof to
Black & Decker, which notice shall identify such occurrence and specify the period of delay which Contractor believes may reasonably be expected to result therefrom. 

        4.5   In
the spirit of continuous improvement, Contractor agrees to use its commercially reasonable best efforts to work with Black & Decker to improve flexibility and
quick response including the implementation of Electronic Data Interchange (EDI) and other information technology advancements provided these are available in the local market. 

        4.6   The
provisions of Article IV of the CDSA, Exclusivity, shall apply to the supply of Products hereunder. 

3

 

V.     PRODUCT SPECIFICATIONS AND REGULATORY APPROVALS  

        5.1   The
Product shall meet all performance requirements as specified in the product specifications attached to the CDSA and quality plan in  Appendix B. No changes will be made in the Product, inner carton,
or outer carton without prior written approval which has been delegated to
Black & Decker's Engineering Group based in Towson, MD. Product changes shall mean changes in suppliers of components and material deviations from specifications and approval samples. Products
containing unapproved changes will be considered defective under this Agreement. Product changes shall also mean changes in sources of materials and components or the manufacturing location which will
adversely affect duty-free status of the Product, when applicable, under the "Generalized System of Preferences—GSP" as defined
in the tariff laws of the United States or Europe, whichever is applicable. Any change to specification requested by Black & Decker and within Contractor's capability will be implemented by
Contractor subject to mutual agreement of delivery and price changes. 

        5.2   This
Contract Manufacturing Agreement is contingent upon UL listing and/or other international regulatory approvals of the Black & Decker specified Product, if
required. Black & Decker will submit the product for UL and/or other international regulatory approval. Contractor will affix the UL / International Regulatory marks and numbers on all such
Products after the Products have been approved by the authorized regulatory bodies. Any future changes required by UL / International Regulatory agencies for continued listing will be made by
Contractor after approval by Black & Decker of the change, timing and any related expense, which approval shall not be unreasonably withheld or delayed. 

VI.   CONFIDENTIALITY; INTELLECTUAL PROPERTY  

        6.1   The
provisions of Article V of the CDSA, Confidentiality, shall apply to the parties and information disclosed hereunder. 

        6.2   Inventions
and Improvements, as defined in the CDSA, shall be owned by the parties as set forth in Article II of the CDSA. 

        6.3   Contractor
agrees to hold harmless and protect Black & Decker against all damages, costs and expenses arising out of a claim that the Cells constitute an
infringement of any patent of the United States or the country of manufacture or sale of Cells, with respect to the design of the Cell which is owned by Contractor or for which Contractor has design
responsibility. Contractor shall defend any suit or proceeding brought against Black & Decker or its customers based thereon and Contractor shall pay all damages and costs awarded therein to
the extent related to such claim. If in such suit or proceeding the use of said goods is enjoined or if the importation into the country of purchase or exportation from the country of manufacture is
prevented as a result of such infringement Contractor shall, at its own expense and without delay, either procure for Black & Decker the right to continue such use, importation, or exportation
of said goods or replace or modify them so they become non-infringing or, upon a showing of inability to do the foregoing, shall promptly remove said goods, and refund the purchase
occasioned thereby. The foregoing constitutes the sole liability of Contractor with respect to patent infringement involving said goods. 

        6.4   Contractor
agrees to honor Black & Decker patent, trademark, copyright, and trade secret rights throughout the world. All Black & Decker trademarks and all
items bearing Black & Decker trademarks will at all times remain in Black & Decker's ownership and control. Black & Decker agrees to honor Contractor patent, trademark, copyright,
and trade secret rights throughout the world. All Contractor trademarks and all items bearing Contractor trademarks will at all times remain in Contractor's ownership and control. 

4

 

        6.5   Upon
termination of this contract for any reason, Contractor shall immediately cease and desist from all use of Black & Decker trademarks (including logo) and
shall deliver to Black & Decker all artwork and other material on which the trademarks appear, and shall at no time thereafter adopt or use any word, logo or mark which is the same as or
similar to the Black & Decker trademark, or colorable imitation, or any translation or transliteration thereof in any language. Upon termination of this contract for any reason, and except as
may be necessary to sell off any existing inventory held by Black & Decker at the time, Black & Decker shall immediately cease and desist from all use of Contractor trademarks (including
logo) and shall deliver to Contractor all artwork and other material on which the trademarks appear, and shall at no time thereafter adopt or use any word, logo or mark which is the same as or similar
to the Contractor trademark, or colorable imitation, or any translation or transliteration thereof in any language. 

VII.     COMPLIANCE WITH LAW  

        7.1   Contractor
represents and warrants that (i) Contractor and all of Contractor's suppliers, subcontractors and agents involved in the production or delivery of
Products hereunder strictly adhere, and shall continue throughout the terms of this Agreement to strictly adhere, to all applicable federal, state and local laws, regulations and prohibitions of the
United States, its territories and all countries in which the Products are produced or delivered with respect to the operation of their production facilities and their other business and labor
practices, including laws, regulations and prohibitions governing the working conditions, wages, hours and minimum age of the workforce, (ii) the Products have not been and shall not be
produced or manufactured by or for Contractor, in whole or in part, by child labor or by convict or forced labor, and (iii) the Products shall not have been transhipped for purposes of avoiding
compliance with labor laws. Contractor further agrees to furnish such documentation as may be reasonably required by Black & Decker to evidence compliance with the foregoing. 

        7.2   Black &
Decker or a third party designated by Black & Decker shall have the right, at any time during the term of this Agreement, upon reasonable notice,
to inspect Contractor's and its' subcontractor's and agents' production facilities to verify the representations and warranties in the subparagraph directly above. 

VIII.      QUALITY; INSURANCE; INDEMNITY  

        8.1   (a)
Contractor warrants that the Products to be purchased and sold hereunder shall conform to the Product Specifications and shall be free, at the time of delivery to
Black & Decker from defects in workmanship, materials, design and construction and shall at the time of delivery to Black & Decker perform in a satisfactory manner as outlined in the
Quality Plan. Payment for goods shipped shall not constitute final acceptance of any non-conforming goods delivered hereunder, and any acceptance of goods delivered hereunder shall not
relieve Contractor of compliance with the obligations of any other provision of this Agreement. Black & Decker will determine acceptance or rejection of goods based on stated inspection
criteria in the Quality Plan and will decide on rework and/or return of goods. When units are deviant, Black & Decker may direct sorting and/or rework of rejected goods at Contractor's expense.
Contractor must decide within [**] after notification and inspection of evidence of deviant units on sort and/or rework and/or return or replacement of rejected goods.
Black & Decker will start sorting and/or rework and/or return or replacement following Contractor's decision. 

        (b)   Black &
Decker shall design and prepare a test protocol and procedure for the control modules to be included in the Products (a "Module Test"). Contractor shall
be responsible for subjecting the control modules to be included in the Products to the Module Test. Contractor shall not install in the Products any control modules that do not pass the Module Test.
So long as Contractor has complied with this obligation, and notwithstanding any other provision of this Agreement to the 

5

 

contrary,
Contractor shall have no liability under this Agreement for any Product failures (including a failure of the Products to comply with the requirements specified herein) to the extent
resulting solely from a design or operational defect in the control module. 

        8.2   If
any services performed by Contractor are found upon inspection not to be of good workmanship and quality Black & Decker may, in addition to any other rights
which it may have, reject the services or upon [**] prior written notice to Contractor direct that they be performed properly or order the services performed by others at
Contractor's expense. The defective goods remaining from sort and/or rework shall be returned to Contractor or reworked at Contractor's expense. If Black & Decker chooses to rework product, by
their choice or because of customer order demand, or if Contractor authorizes Black & Decker to rework, the hourly labor rate will be the fully burdened labor rate paid by Black &
Decker. Periodic adjustments for inflation will be made to this labor rate as necessary. When reasonable under the circumstances, Black & Decker will use the lowest labor rate available to it
to perform such rework. 

        8.3   In
the event that the field failure rate for any Contractor's Product sold to Black & Decker exceeds [**]%
([**] percent), excluding (i) returns "for no apparent reason", or (ii) failures of the Products resulting solely from a defect in a control module that is
not detectable by the Module Test, during the [**], Black & Decker holds the right to determine whether the units of such excess failure rate shall be replaced by
Contractor or whether Contractor shall reimburse Black & Decker for material and service costs incurred by Black & Decker attributable to such excessive failure rate, based upon
Black & Decker's established labor rates, allowances and retards. Black & Decker will provide Contractor with applicable documents and inspection records evidencing the field failure
rate including the original sample or picture depicting defective units. 

        8.4   For
the purpose of the above paragraph, the term "material and service costs" shall mean the costs of replacement or repair labor, transportation, replacement product,
parts or components, and such other out-of-pocket costs as may be incurred by Black & Decker to locate and correct such non-conformity. It is recognized that
it is difficult to ascertain precisely these costs in advance of occurrence for statement in this agreement. Therefore, the material and service costs will be based on actual costs to Black &
Decker calculated at the time of occurrence. These actual costs will be revealed by Black & Decker to Contractor in documented form for Contractor's examination. 

        8.5   After
a new product launch and at the end of each contract year, a [**] to determine the root cause of returns. Contractor agrees to send a
representative to the Black & Decker location [**] in order to assist in identifying the quantity of problems caused by the Contractor's faults and make improvements for
future production. A [**] to account for the amount of the returned/credited product allowed under the contract for the subsequent year. 

        8.6   (a)
To the fullest extent permitted by law, Contractor agrees to indemnify and hold harmless Black & Decker from and against any and all liabilities, losses,
damages, judgments, awards, costs, fees, and expenses, (including, but not limited to, attorneys' fees and costs of investigation) incurred by Black & Decker resulting from or relating to any
claim, notice, allegation, complaint, demand, action, lawsuit, investigation, proceeding, or other process or procedure of any kind (together, a "Claim") (including, but not limited to, those based in
whole or part on negligence, product liability, willful misconduct, breach of express or implied warranties, strict liability, deceptive or unfair trade practices, advertising liability, governmental
statute or regulation, and the like) between Black & Decker and any third party, parties or any other entity and caused by, arising out of or in any way resulting from the failure of Contractor
to comply with this Agreement or the failure of the Products to comply with the requirements specified herein. The obligations of Contractor under this Section 8.7 shall survive cancellation or
termination of each Purchase Order. The obligations of Contractor under this Section 8.6 are independent and do not in any way limit or satisfy the obligations of Contractor to Black &
Decker under any other provision of this agreement. 

6

 

        (b)   To
the, fullest extent permitted by law, Black & Decker agrees to indemnify and hold harmless Contractor from and against any and all liabilities, losses,
damages, judgments, awards, costs, fees, and expenses, (including, but not limited to, attorneys' fees and costs of investigation) incurred by Contractor resulting from or relating to any Claim
between Contractor and any third party, parties or any other entity and caused by, arising out of or in any way resulting from the failure of Black & Decker to comply with this Agreement. 

        8.7   In
the event that Black & Decker becomes subject to any investigation or report to a governmental agency or voluntary standards organization relating to
compliance with safety regulations or product safety, or becomes subject to any corrective action plan, consent agreement or order requiring corrective action (including without limitation notice,
recall, retrofit, repair, replacement or the refund of purchase price of said products or services, whether at the wholesale, retail or consumer distribution level), whether such corrective action
plan, consent agreement or order is voluntary or is a mandate of any governmental agency or voluntary standards organization, or becomes subject to Black & Decker's own investigation relating
to compliance with safety regulations or product safety, as the result of, arising from or in any way related to the failure of Contractor to comply with this Agreement or the failure of the Products
to comply with the requirements specified herein, Contractor agrees to defend, protect, indemnify and hold harmless Black & Decker from any and all expenses and liabilities (including without
limitation attorneys' fees and expenses, administrative costs and expenses, costs of investigation, notice, corrective action, recall, repair, replacement or the refund of the purchase price) which
may be incurred in connection with any such investigation, corrective action plan, consent agreement or order requiring corrective action, or in assuring compliance or aiding or assisting compliance
with such mandates. The obligations of Contractor under this Section 8.7 shall survive cancellation or termination of each purchase order and/or agreement. 

        8.8   Contractor
shall procure and maintain comprehensive commercial general liability insurance, including, without limitation, coverage for products liability, advertising
liability and contractual liability (i.e., contractual assumption of liability under this agreement) and providing coverage on an occurrence basis, with limits of at least
$[**] per occurrence, claims for bodily injury, sickness and disease including death, property damage, and damages relating to loss of use of physical property, arising out of
or relating to all goods, materials, products or substances provided, shipped, furnished, or delivered or services performed which are the subject of this Agreement. [**].
Contractor shall annually, and more frequently upon request of Black & Decker, furnish to Black & Decker certificates of insurance evidencing Contractor's compliance with the provisions
of this Section 8.8. The obligations of Contractor under this Section 8.8 are independent and do not in any way limit or satisfy the obligations of Contractor to Black & Decker
under any other provision of this agreement. 

        8.9   Quality
Requirements for Purchased Parts and Sourced Products for Contractors to Black & Decker are referenced in  SQA015 (Appendix C) and made an
integral part of this Agreement. 

        8.10    Limitation of Liability.    Except as otherwise provided in this Agreement, in no event shall either party
have any liability to the other for any incidental, indirect, consequential, punitive or exemplary damages or loss of business, loss of records or data, loss of use, or loss of profits, whether or not
a Party was informed or was aware of the possibility of such loss. 

IX.   TOOLING; NEW PRODUCT DEVELOPMEN/TECHNICAL SUPPORT  

        9.1   Prior
to or during the Term of this Agreement, Black & Decker may pay Contractor for the purchase of tooling required to manufacture the Products. All such
tooling shall be and shall remain the property of Black & Decker until such amounts are repaid to Black & Decker, as the parties may agree. It shall be plainly identified by Contractor
as "Property of Black & Decker (U.S.) Inc." and shall be safely stored and not used except in filling Black & Decker's orders hereunder. The property, while in Contractor's
custody, shall be maintained in good condition, normal wear and tear excepted, at 

7

 

Contractor's
expense and shall be kept insured by Contractor at Contractor's expense in an amount equal to the replacement cost, with loss payable to Black & Decker. Contractor shall furnish to
Black & Decker a certificate of insurance evidencing Contractor's compliance with the provisions of this Section 9.1. Black & Decker's property may be removed by Black &
Decker at any time upon reasonable notice. 

        9.2   In
the spirit of continuous improvement, Contractor agrees to continue to use its technical resources as required to foster Productivity improvements, technology
advancement and new product development. 

        9.3   In
addition to satisfying the requirements for Product Service, Contractor will make available to Black & Decker, on demand, a copy of any drawing pertaining to
any unit purchased. Drawings will be mailed from Contractor within [**] from the time of request, either verbal or written. 

        9.4   All
Engineering changes will be administered by Contractor, including all record-keeping, unless otherwise agreed upon. Contractor will contact Black & Decker
Engineering Group in Towson, MD with a request for change. Black & Decker will respond to the request, in writing, within 10 working days from the date of receipt of the request. No changes to
any Product will be allowed without prior notification to Black & Decker. 

X.    PRODUCT SERVICE  

        10.1    Contractor will supply Black & Decker with the parts list and prices of each item requested by Black &
Decker for fulfillment of its product service obligation. Prices will be on the basis of the price of the entire unit in the purchase order and may be revised from time to time, but will never exceed
the price of a total unit. (If necessary, Contractor may add reasonable packing cost for service parts delivery. Any part price adjustment should be made in proportion to the price adjustment of the
total price.) Contractor agrees to supply the parts within [**] after receipt of Black & Decker's purchase order. Contractor is obligated to supply parts and/or total
units in quantities equivalent to a [**] supply following the completion of the last order (based on forecasts by Black & Decker's Product Services department, based on
historical needs and market projections). Black & Decker will make every effort to order the required parts or units prior to the termination of production of the last lot. However,
Black & Decker has the right to order and expects Contractor to make every reasonable effort to supply parts during the [**] following completion of the last
order.    

XI.   TERM AND TERMINATION  

        11.1    Term.    This Agreement shall commence on the Effective Date and continue in effect until 42 months
after Contractor's receipt of written authorization from Black & Decker to initiate bulk production or as earlier terminated under the terms of this Agreement. At expiration of the initial
term, this Agreement will renew automatically for successive one-year periods ("Renewal Period(s)"), unless either party provides written notice of non-renewal to the other
party more than ninety (90) days prior to any renewal date, or unless earlier terminated as permitted hereunder. 

        11.2    Termination for Breach.    This Agreement may be terminated upon written notice by either party (the
"non-defaulting Party") if the other party materially fails to perform any obligation imposed on it by this Agreement, provided that if such breach is by its nature curable, the
non-defaulting Party shall have previously given the other party not less than [**] calendar days advance written notice of intent to terminate, stating with
particularity the breach and the steps required to cure such breach, and provided further that the other party has failed to cure the specified breach within such [**] day
period. 

        11.3    Termination for Insolvency.    This Agreement may be terminated by a party without penalty immediately upon
giving notice, if proceedings under any bankruptcy, insolvency or similar legislation 

8

 

are
instituted by or against the non-terminating party (and not withdrawn or terminated within 60 days), or the non-terminating party makes an assignment for the benefit
of creditors, or a receiver is appointed for all or a substantial part of the non-terminating party's assets. 

        11.4    Termination pursuant to the CDSA.    If the CDSA is terminated pursuant to any of the provisions of
Article VI of the CDSA, then this Agreement shall terminate also, effective as of the same day as the termination date of the CDSA. 

        11.5    Effect of Termination.    

        (a)   Payments.    Neither the expiration nor termination of this Agreement shall relieve either party of its
obligation to make any and all payments due under this Agreement, nor shall it relieve either party of obligations incurred prior to termination, which by their nature or term survive termination. 

        (b)   Fulfillment/Cancellation of Orders upon Termination.    Upon termination of this Agreement, other than for
failure of Black & Decker to make payments, Contractor shall continue to fulfill all orders for Products for orders accepted by Contractor prior to the date of termination; provided that all
orders shall provide for delivery to occur not later than [**] following termination. 

        (c)   Survival of Certain Terms.    The provisions of this Agreement and related Appendixes regarding Warranties,
Indemnity, Intellectual Property Rights, Compliance with Laws and General Clauses, and any other sections that by their terms so provide, shall survive termination of this Agreement for any reason. 

XII.  MISCELLANEOUS  

        12.1    Governing Law.    Contractor agrees that this Agreement shall be governed by and construed in accordance with
the laws of the State of Delaware, without regard to its conflicts of laws provisions. 

        12.2    Assignment.    Neither Party may assign its rights or obligations hereunder without the prior written consent
of the other Party hereto, except that Black & Decker may assign this Agreement to an Affiliate without the prior written consent of Contractor. 

        12.3    Entire Agreement.    This Agreement, the CDSA and together with the individual purchase orders submitted
hereunder which are incorporated into said Agreement and become a part thereof, sets forth the entire Agreement between the parties relating to the subject matter hereunder and any representation,
promise, agreement or condition therewith not incorporated herein shall not be binding upon either party. 

        12.4    Modifications.    No change, modification, extension or renewal of this Agreement shall be binding unless made
in writing and signed by authorized representatives of both parties. 

        12.5    Public Announcement.    The Parties shall not disclose, advertise or publish the terms and conditions of this
Agreement without the prior written consent of the other Party. Each Party shall consult with the other party before issuing any press releases or other public statements regarding the existence or
nature of this Agreement, or regarding the parties' execution, performance or benefit hereunder. 

        12.6    Nature of Relationship.    For the purposes of this Agreement, the parties are deemed to be independent
contractors. It is expressly agreed that this Agreement and the relationship between the parties hereby established do not constitute a partnership, joint venture, agency or contract of employment. No
party shall have the authority to make any statements, representations or commitments of any kind, or to take any action, which shall be binding on the other, except as authorized in writing by the
party to be bound. No party shall bind nor attempt to bind the other to any contract or to the performance of any obligation, nor represent to third parties that it has any right to enter into any
obligation on the other's behalf. 

9

 

        12.7    Partial Invalidity.    If and to the extent that any court of competent jurisdiction or arbitrator holds any
provision (or part thereof) of this Agreement to be invalid, illegal, or unenforceable, that provision shall, if possible, be construed as though more narrowly drawn, if a narrower construction would
avoid such invalidity, illegality, or unenforceability or, if that is not possible, such provision (or part thereof) shall be severed, and the remaining provisions of this Agreement shall remain in
effect. 

        12.8    Force Majeure.    Neither party hereto shall be liable for damages, nor shall this Agreement be terminable or
cancelable by reason of any delay or default in such party's performance hereunder (excluding payment obligations) if such default or delay is caused by events beyond such party's reasonable control
("force majeure") including, but not limited to, acts of God, action of any government or agency thereof, war or insurrection, civil commotion or destruction of production facilities or materials by
earthquake, fire, flood, storm or epidemics. Each party shall endeavor to resume its performance hereunder as soon as reasonably possible if such performance is delayed or interrupted by reason of
force majeure. The parties acknowledge, however, that Black & Decker's ability to access and use the "Escrowed Information," as defined in the CDSA, shall not be limited in any way by this
Section 12.8. 

        12.9    Waiver.    Failure of either party to enforce any provision of this Agreement shall not be deemed a waiver of
future enforcement of that or of any other provision. 

        12.10    Counterparts.    This Agreement and any related amendments or other documents or instruments between or among
the parties may be executed in multiple counterparts, each of which shall be deemed an original, and all of which together shall constitute one and the same instrument. 

        12.11    Notice.    Any notice required or permitted hereunder mast be in writing and be either (i) personally
delivered; (ii) delivered by courier, overnight delivery, facsimile or similar means providing for proof of service; or (iii) sent by mail, postage prepaid (which shall be registered or
certified mail, return receipt requested); properly addressed to the party entitled to receive such notice or communication at the address for such party set forth above or at such other address as
the intended recipient shall have previously designated by written notice to the sender. Notice shall be effective on the date that it is delivered or, if mailed as provided above, three
(3) days after the date of mailing. 

10

 

 Agreed For & On Behalf of:  

 BLACK & DECKER MACAO

COMMERCIAL OFFSHORE LIMITED  

							
	
 By:	
 	

/s/ James Mann

 	
 	
 By:	
 	

/s/ (illegible)

 
	 	 	 	 	 	 	WITNESS

							
	
 Date:	
 	

4/3/06

	
 	
 Date:	
 	

4/3/06

 Agreed For & On Behalf of:  

 A123 SYSTEMS, INC.  

							
	
 By:	
 	

/s/ (illegible)

 	
 	
 By:	
 	

/s/ Deborah E. Giampa

 
	 	 	OFFICER	 	 	 	WITNESS

							
	
 Date:	
 	

3/30/06

	
 	
 Date:	
 	

3/30/06

        [NOTARY
SEAL] 

11

   Amendment to Co-operative Development and Supply Agreement

and Contract Manufacturing Agreement  

        This Amendment is made and entered into as of March 30, 2007 (the "Effective Date") by and among Black & Decker
(U.S.), Inc., 701 East Joppa Road, Towson, MD 21286, USA and its affiliated companies, Black & Decker Macao Commercial Offshore Limited and BDC International Limited (collectively,
"B&D") and A123 Systems, Inc., Arsenal on the Charles, One Kingsbury Avenue, Watertown, MA 02472 ("A123") in order to amend and supplement the Co-operative Development and Supply
Agreement dated as of September 15, 2004, as amended, (the "CDSA") and the Contract Manufacturing Agreement dated as of March 1, 2006 (the "CMA"), collectively referred to herein as the
"Agreements." 

        Unless
expressly provided herein, the defined terms in the Agreements shall have the same meaning when used in this Amendment. 

        In
consideration of the mutual covenants and agreements contained herein, and other consideration, the receipt and sufficiency of which is hereby acknowledged, the parties hereto agree
as follows: 

	1.
	The
CMA is hereby amended and supplemented as follows: 

As
of the Effective Date, BDC International Limited, with a principal office located at 4/F, 2 Dai Wang Street, Tai Po Industrial Estate, Tai Po, New Territories, Hong Kong ("BDCI"), shall
(i) be added as a party to the CMA, and (ii) be entitled to purchase the A123 CELL PRODUCTS specified in Exhibit A attached hereto
(and not any other Products, as defined in the CMA) in accordance with and subject to the terms and conditions of the CMA to the same extent that Black & Decker (as defined in the CMA) is
entitled to purchase Products under the CMA, except as may be otherwise mutually agreed by the
parties in writing or as may be specified in Exhibit A. The parties to the CDSA acknowledge and agree to the foregoing. 

	2.
	Except
as amended hereby, the Agreements are hereby ratified by the applicable parties to each such agreement and shall remain in full force and effect. This
Amendment, together with the Agreements, contains the entire agreement of the parties hereto and supersedes all earlier agreements and understandings, oral and written, between the parties hereto with
respect to the subject matter hereof. 

        The
parties to this Amendment have caused this Amendment to be executed by their respective authorized representatives as of the Effective Date. 

											
	 	 	 	 	Black & Decker (U.S.), Inc	 	A123 Systems, Inc.
	

By:	
 	

/s/ R. Mitchell

	
 	

By:	
 	

/s/ Bruce Brooks

	
 	

By:	
 	

/s/ Michael Rubino

	Name:	 	R. Mitchell

	 	Name:	 	Bruce Brooks

	 	Name:	 	Michael Rubino

	Title:	 	VP Purchasing

	 	Title:	 	President CPG

	 	Title:	 	CFO

	

BDC International Limited	
 	

Black & Decker Macao Commercial

Offshore Limited	
 	

 	
 	

 
	

By:	
 	

/s/ M. Dumenil

	
 	

By:	
 	

/s/ Vishak Sankaran

	
 	

 	
 	

 
	Name:	 	M. Dumenil

	 	Name:	 	Vishak Sankaran

	 	 	 	 
	Title:	 	General Manager

	 	Title:	 	V.P. Global Sourcing WWPTA

	 	 	 	 

 Exhibit A  

 CELL PRODUCTS:  

        18650 Cell—as made available by A123 to its customers generally and in accordance with the terms of the quotation(s)
provided by A123 to BDCI referencing the Agreements. 

 ADDITIONAL TERMS AND CONDITIONS (if any):            NONE.  

QuickLinks

Exhibit 10.25

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