Document:

ssni-ex101_195.htm

 

		
	

	
Exhibit 10.1

 

March 2, 2017

Catriona Fallon

[address]

Dear Catriona: 

On behalf of Silver Spring Networks, Inc. (the “Company”), I am pleased to offer you the position of Chief Financial Officer of the Company.

The terms of your new position with the Company are as set forth below: 

	
1.
	
Position.  You will be employed as Chief Financial Officer and will report to Mike Bell, President and Chief Executive Officer.   You will begin this new position with the Company on March 27, 2017 (your “Start Date”).

	
2.
	
Proof of Right to Work. For purposes of federal immigration law, you will be required to provide to the Company documentary evidence of your identity and eligibility for employment in the United States. Such documentation must be provided to us within three (3) business days of your Start Date, or our employment relationship with you may be terminated. 

	
3.
	
Compensation. 

	
 
	
a)
	
Base Salary.  Your starting salary will be $400,000 per year (your “Base Salary”), subject to applicable withholding taxes and paid pursuant to the Company’s regular payroll schedule.  

	
 
	
b)
	
Bonus.  You will be entitled to participate in the Silver Spring Networks’ Bonus Plan.  Your bonus target is 50% of base salary paid for the applicable bonus period and subject to the terms and conditions of the applicable bonus plan. The Company’s Human Resources Department will inform you of the details of the plan.  The Company reserves the right to vary or terminate (with or without replacement by a further plan) any bonus plan in place at any time. 

	
 
	
c)
	
Annual Review. Following your first year of employment, your base salary will be reviewed at the end of each calendar year by the Compensation Committee of the Board of Directors.

	
 
	
d)
	
Equity.  In connection with the commencement of your employment, the Company will recommend to its Board of Directors that it grant you the following equity awards (the “Awards”) in accordance with the Company’s standard equity grant policy:

(i)  An option (the “Option”) to purchase 65,000 shares of common stock of the Company (the “Shares”) with an exercise price equal to the fair market value of a Share on the date of grant.  The Option will vest and become exercisable, subject to your continued employment with the Company on each applicable vesting date, as to 25% of the Shares on the first anniversary of the date of grant and as to 1/48th of the Shares each month thereafter;

(ii) An award of 36,000 restricted stock units (the “RSUs”) which vest into Shares of the Company’s common stock.  The RSUs will vest, subject to your continued employment with the Company on each applicable vesting date, as follows: (a) 25% of the RSUs shall vest on the first anniversary of the grant 

 

	
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date; and (b) the remaining RSUs shall vest in twelve equal quarterly installments following the first anniversary of the grant date until the RSUs have become fully vested four years from the grant date; and

(iii) An award of 26,000 performance share units (the “PSUs”) which will be eligible to vest into Shares of the Company’s common stock.  The PSUs will be eligible to vest, subject to your continued employment with the Company on the vesting date, on the first anniversary of the grant date and subject to the attainment of certain performance metrics (to be determined by the Compensation Committee of the Board of Directors) within the time period for such performance metrics as set forth in the grant agreement. 

If approved, your Awards will be granted pursuant to inducement award agreements, the terms of which will be substantially similar to the terms of the Company’s 2012 Equity Incentive Plan and the terms of the Company’s standard form of Option, RSU and PSU Agreement, as applicable, and will be contingent upon your execution of such agreements.  A copy of the agreements will be provided to you as soon as practicable after the grant date.  You agree to sign any other agreements or documents provided by the Company that may be required under applicable laws to receive the Awards and any Shares upon exercise or settlement of the Awards, as applicable.  Your Awards will also be subject to the applicable termination and change of control provisions set forth in Attachment A. 

	
4.
	
Benefits.

	
 
	
a)
	
Employee Benefits.  You are eligible to participate in any medical insurance plans, 401(k) plans, deferred compensation plans, life insurance plans, retirement or other employee benefit plans or fringe benefit plans or perquisites established by the Company for its employees which may become effective from time to time during your employment with the Company.

	
 
	
b)
	
Vacation.  You are eligible to participate in the Company’s Exempt Employees’ Vacation Program.  There is no prescribed annual vacation allotment for exempt employees, meaning you will not accrue vacation.  

	
 
	
c)
	
Sick Leave.  You are eligible for paid sick leave in accordance with the terms of the Company’s sick leave policy.  You may take up to ten (10) paid sick days per calendar year, pro-rated for the remainder of this year.  

	
8.
	
Background & Reference Checks.  This offer is contingent upon successful completion of background investigation and reference checks.

	
9.
	
Termination of Employment and Severance Benefits. We are pleased to provide you with certain benefits in the event of your termination without “cause” or “constructive termination” from the Company as specifically set forth in Attachment A. 

	
10.
	
Confidential Information and Invention Assignment Agreement. Your acceptance of this offer and commencement of employment with the Company is contingent upon your execution, and delivery to an officer of the Company, of the Company’s Employee Confidential Information and Invention Assignment Agreement, a copy of which is enclosed for your review and execution (the “Confidentiality Agreement”) as Attachment B, prior to or on your Start Date. 

	
11.
	
At-Will Employment. You understand that your employment with the Company is not for any specified term and will at all times be on an “at will” basis, meaning that either you or the Company may terminate your employment at any time for any reason or no reason, without further obligation or liability (except as set forth on Attachment B). 

 

	
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12.
	
No Conflicts. You represent to the Company that your performance of all the terms of this letter agreement will not breach any other agreement to which you are a party and that you have not, and will not during the term of your employment with the Company, enter into any oral or written agreement in conflict with any of the provisions of this agreement. In addition, as we have advised you, you are not to bring with you to the Company, or use or disclose to any person associated with the Company, any confidential or proprietary information belonging to any former employer or other person or entity with respect to which you owe an obligation of confidentiality under any agreement or otherwise. The Company does not need and will not use such information and we will assist you in any way possible to preserve and protect the confidentiality of proprietary information belonging to third parties. You hereby agree that any service by you on an outside corporate board (public or private) or committee will require the prior approval of the Company’s Board of Directors.

	
13.
	
Location.  Your principal place of work will be the Company’s corporate headquarters.

	
14.
	
Cooperation.  During and after employment, you hereby agree that you will reasonably cooperate with the Company and its affiliates and representatives in connection with any action, investigation, proceeding, litigation or otherwise with regard to matters in which you have knowledge as a result of your employment. The Company will use its reasonable business efforts, whenever possible, to provide you with reasonable advance notice of its need for assistance and will attempt to coordinate with you the time and place at which such assistance is provided to minimize the impact of such assistance on any other material and pre-scheduled business commitment that you may have. The Company will reimburse you for the reasonable out-of-pocket expenses incurred by you in connection with such cooperation. Your cooperation will be subject to the Company’s standard indemnification and D&O liability insurance coverage.

	
15.
	
Clawback.  You hereby agree that the Company may recover, or require reimbursement of, any bonus or equity award made to you, pursuant to a clawback policy which may be adopted by the Board of Directors of the Company for the purpose of complying with current or proposed U.S. law or regulation.

	
16.
	
Nondisparagement.  You agree that you will not disparage the Company or its owners, agents, officers, stockholders, employees, directors, attorneys, subscribers, subsidiaries, affiliates, successors and assigns, or their products, services, agents, representatives, directors, officers, stockholders, attorneys, employees, vendors, affiliates, successors or assigns, or any person acting by, through, under or in concert with any of them, with any written or oral statement.

	
17.
	
Governing Law.  The validity, interpretation, construction and performance of this agreement shall be governed by the laws of the State of California, without giving effect to the principles of conflict of laws.

 

 

	
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We are all delighted to be able to extend you this offer and look forward to working with you. To indicate your acceptance of the Company's offer, please sign and date this letter agreement in the space provided below no later than March 8, 2017. Additionally, as part of your acceptance of the Company’s offer, please return a signed and dated copy of Attachment A (Termination of Employment and Severance Benefits) and Attachment B (Confidentiality Agreement). This offer letter, together with Attachment A and Attachment B, set forth the terms of your employment with the Company and supersede any prior representations or agreements, whether written or oral. Neither this letter agreement nor Attachment A and Attachment B may be modified or amended except by a written agreement, approved by the Company’s Board of Directors and signed by the Company’s General Counsel and by you.

Very truly yours, 

Silver Spring Networks, Inc. 

/s/ Terri Stynes

Terri Stynes

Chief Human Resources Officer

ACCEPTED AND AGREED: 

Catriona Fallon

 

	
	
/s/ Catriona Fallon

	
Signature

	
 

	
March 7, 2017

	
Date

 

Attachments:

1.Attachment A — Termination of Employment and Severance Benefits

2.Attachment B — Employee Confidential Information and Invention Assignment Agreement

 

	
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Attachment A

 

Termination of Employment and Severance Benefits

 

 

	
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Termination of Employment and Severance Benefits

	
1.
	
Termination of Employment.

a)At-Will Employment.  Your employment with the Company is at-will, meaning either you or the Company can terminate your employment at any time, with or without cause, and with or without notice.  Neither you nor the Company can change the “at will” nature of your employment, unless approved by the Company’s Board of Directors and the General Counsel of the Company and you sign a written contract that explicitly changes your status as an “at will” employee.

b)Payment & Benefits Upon Termination.  Your entitlement to payment and benefits upon termination is as follows:

(i)Termination Without “Cause” or “Constructive Termination”.  If your employment is (1) terminated involuntarily other than (x) for Cause (as defined in Section 3(a), below), (y) your Disability (as defined in Section 3(e), below) or (z) your death or (2) in the event of your “Constructive Termination” (as defined in Section 3(d) below):  

(A) you will receive payment for any earned and unpaid salary, bonus and commissions as of the date of your termination of employment; and, 

(B) in the event you execute and do not revoke a separation agreement, including a release of claims (“Release”), to be drafted by the Company based upon its standard forms, you will be offered the applicable Separation Compensation (as defined in Section 2, below).  You will not be entitled to or offered any form of additional severance pay or benefits other than the applicable Separation Compensation (e.g., you will not be entitled to pay or benefits under any employee severance plan that is generally applicable to employees).

(ii)Voluntary Termination.  If you voluntarily terminate your employment, or give notice that you will voluntarily terminate your employment at a future date (and whether or not the Company accelerates the effective date of your resignation date that you provide to an earlier termination date), you will receive payment(s) for all earned and unpaid salary, bonus and commissions as of the date of termination.  You will not be entitled to the Separation Compensation, or any other form of severance pay or benefits.

(iii)Termination for Cause.  If your employment is terminated for Cause, you will receive payment(s) for all earned and unpaid salary, bonus and commissions as of the date of your termination of employment.  You will not be entitled to the Separation Compensation, or any other form of severance pay or benefits.

(iv)Termination due to death or Disability.  If your employment is terminated due to your death or Disability, you will receive payment(s) for all earned and unpaid salary, bonus and commissions as of the date of your termination of employment.  You will not be entitled to the Separation Compensation, or any other form of severance pay or benefits.

	
2.
	
Separation Compensation.  

a.Termination Other Than in Connection with a Change of Control.  If you are entitled to Separation Compensation under Section 1 above and your Termination without Cause or your Constructive Termination does not occur within the period beginning two months prior to and ending twelve months following a Change of Control, your “Separation Compensation” will include each of the following: 

(i)Salary Continuance.  You will be offered pay equal to twelve (12) months of your regular base salary and a pro-rated bonus (if any), subject to applicable payroll deductions and withholdings.  The first salary continuance payment equal to three (3) months of your regular base salary shall be made on 

 

	
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the sixtieth (60th) day following your termination of employment provided the Release is effective at such time, and the remainder shall be paid in monthly installments beginning on the 1st day of the fourth month following your termination of employment, and on the 1st day of each month thereafter, until the total payment obligation is fulfilled.

(ii)Acceleration of Vesting.  The vesting applicable to any equity grants previously made by the Company to you shall accelerate (or the Company’s repurchase right with respect to such shares underlying such equity grants shall lapse) as to that number of shares that would have vested on the first anniversary of the date your employment terminates, such acceleration effective immediately prior to the termination of your employment.  Notwithstanding the foregoing, acceleration of vesting of any performance-based equity grants, such as performance stock units, shall be subject to and qualified by the terms of any performance-based equity grant that provides for satisfaction of applicable performance vesting requirements (as set forth in the agreement(s) governing such performance-based equity grant(s)), as determined on the date of your termination, and the acceleration of vesting pursuant this section shall occur only if the above-referenced performance vesting requirements have been satisfied.

(iii)Other Benefits.  The Company will reimburse you for your expenses in continuing medical insurance benefits for you and your family (meaning medical, dental, optical, and mental health, but not life, insurance) under the Company’s benefit plans (or otherwise in obtaining coverage substantially comparable to the coverage provided to you prior to the termination) over the period beginning on the date your employment terminates and ending on the earlier of (a) twelve (12) months following such date, or (b) the date you commence employment with another entity.  Notwithstanding the foregoing, if the Company determines in its sole discretion that it cannot provide the benefits described herein without violating applicable law (including, without limitation, Section 2716 of the Public Health Service Act), the Company shall in lieu thereof provide you a lump sum payment in an amount equal to the monthly premium that you would be required to pay to continue group health coverage for a period of up to twelve (12) months, subject to applicable payroll deductions and withholdings, which payment shall be made regardless of whether you elect continuation of medical insurance coverage.

b.Termination in Connection with a Change of Control.  If you are entitled to Separation Compensation under Section 1 above and your Termination without Cause or your Constructive Termination occurs within the period beginning two months prior to and ending twelve months following a Change of Control, your “Separation Compensation” will include each of the following, provided however that you may be required by the successor entity (at its sole discretion) to continue your employment for up to three (3) months from the effective date of a Change of Control in order to be eligible to receive any or all of the following:

(i)Salary Continuance.  You will be offered pay equal to twelve (12) months of your regular base salary and a pro-rated bonus (if any), subject to applicable payroll deductions and withholdings.  The first salary continuance payment equal to three (3) months of your regular base salary shall be made on the thirtieth (30th) day following your termination of employment (unless a longer period is required by law to make the Release effective, in which case the first salary continuance payment shall me made on the sixtieth (60th) day following your termination of employment) provided the Release is effective at such time, and the remainder shall be paid in monthly installments beginning on the 1st day of the fourth month following your termination of employment, and on the 1st day of each month thereafter, until the total payment obligation is fulfilled.

(ii)Acceleration of Vesting.  The vesting applicable to any equity grants previously made by the Company to you shall accelerate (or the Company’s repurchase right with respect to such shares underlying such equity grants shall lapse) as to one-hundred percent (100%) of the unvested shares underlying such equity grant or grants at the time of the Change of Control. Such acceleration shall be effective as of immediately prior to the termination of your employment.  Notwithstanding the foregoing, acceleration of vesting of any performance-based equity grants, such as performance stock units, shall be subject to and qualified by the terms of any performance-based equity grant that provides for satisfaction of 

 

	
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applicable performance vesting requirements (as set forth in the agreement(s) governing such performance-based equity grant(s)), as determined on the date of your termination, and the acceleration of vesting pursuant this section shall occur only if the above-referenced performance vesting requirements have been satisfied.

(iii)Other Benefits.  The Company will reimburse you for your expenses in continuing medical insurance benefits for you and your family (meaning medical, dental, optical, and mental health, but not life, insurance) under the Company’s benefit plans (or otherwise in obtaining coverage substantially comparable to the coverage provided to you prior to the termination) over the period beginning on the date your employment terminates and ending on the earlier of (a) twelve (12) months following such date, or (b) the date you commence employment with another entity.  

	
3.
	
Definitions. 

a)Cause.  For the purposes of this letter agreement, “Cause” for termination of your employment will exist if you are terminated for any of the following reasons: (i) your failure to perform your duties and responsibilities to the Company, including but not limited to a failure to cooperate with the Company in any investigation or formal proceeding; (ii) your commission of any act of fraud, embezzlement, dishonesty or any other intentional misconduct that results in injury to the Company; (iii) the unauthorized use or disclosure by you of any proprietary information or trade secrets of the Company or any other party to whom you owe an obligation of nondisclosure as a result of your relationship with the Company; (iv) you are convicted of, or enter a no contest plea to, a felony; or (v) your willful, wrongful and uncured breach of any of your obligations under any Company policy, written agreement or covenant with the Company (including this letter agreement).  The determination as to whether you are being terminated for Cause shall be made in good faith by the Company’s Board of Directors (the “Board”).  The foregoing definition does not in any way limit the Company’s ability to terminate your employment at any time as provided in Section 1 above.

b)Change of Control.  For purposes of this letter agreement, “Change of Control” of the Company is defined as: (i) the date any “person” (as such term is used in Sections 13(d) and 14(d) of the Securities Exchange Act of 1934, as amended) becomes, subsequent to the date hereof, the “beneficial owner” (as defined in Rule 13d-3 under said Act), directly or indirectly, of securities of the Company representing 50% or more of the total voting power represented by the Company’s then outstanding voting securities, other than pursuant to a sale by the Company of its securities in a transaction or series of related transactions the primary purpose of which is to raise capital for the Company; (ii) the date of the consummation of a merger or consolidation of the Company with any other corporation that has been approved by the stockholders of the Company, other than a merger or consolidation which would result in the voting securities of the Company outstanding immediately prior thereto continuing to represent (either by remaining outstanding or by being converted into voting securities of the surviving entity) more than fifty percent (50%) of the total voting power represented by the voting securities of the Company or such surviving entity outstanding immediately after such merger or consolidation; (iii) the date of the consummation of the sale or disposition by the Company of all or substantially all the Company’s assets; or (iv) the date of a change in the composition of the Board such that a majority of the members of the Board immediately following such change in composition are no longer “Incumbent Directors.”  For purposes of the foregoing clause (iv), “Incumbent Directors” means (a) members of the Board as of the date of this letter agreement, or (b) members of the Board elected or appointed to the Board following the date of this letter agreement other than in connection with an actual or threatened proxy contest.

c)Code.  For purposes of this letter agreement, “Code” means the Internal Revenue Code of 1986, as amended.

d)Constructive Termination.  For the purposes of this letter agreement, “Constructive Termination” means the termination of your employment by you after the occurrence of any of the following events: (A) within the period beginning two months prior to and ending twelve months following a Change of Control, a material reduction in your job duties and responsibilities to which you have not 

 

	
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consented to in advance of such change; provided, however, that following a Change of Control, neither a change in your title to a substantially equivalent title within any successor entity nor a reassignment to a position that is substantially similar to your position prior to the Change of Control shall constitute a material reduction in your job duties or responsibilities; (B) following a Change of Control and without your prior written approval, the Company requires you to relocate to a facility or location more than thirty-five (35) miles from the location of the primary location at which you were working for the Company immediately before the required change of location; (C) except as otherwise agreed by you, any reduction of your base salary in effect immediately prior to such reduction (other than as part of an across-the-board, proportional reduction); or (D) following a Change of Control, the failure of a successor entity to assume this letter agreement.  Notwithstanding anything else contained herein, in the event of the occurrence of a condition listed above, as a condition to receiving any benefits triggered by a Constructive Termination, you must provide notice to the Company within ninety (90) days of the occurrence of a condition listed above and allow the Company thirty (30) days in which to cure such condition.  Additionally, in the event the Company fails to cure the condition within the cure period provided, as a condition to receiving any benefits triggered by a Constructive Termination, you must terminate employment with the Company within thirty (30) days of the end of the cure period.

e)Disability. For the purposes of this letter agreement, “Disability” means “disability” within the meaning of Section 22(e)(3) of the Code.

4.Code Section 409A.  For purposes of this letter agreement, a termination of employment will be determined consistent with the rules relating to a “separation from service” as defined in Section 409A of the Code and the regulations thereunder (“Section 409A”).  Notwithstanding anything else provided herein, to the extent any payments provided under this letter agreement in connection with your termination of employment constitute deferred compensation subject to Section 409A, and you are deemed at the time of such termination of employment to be a “specified employee” under Section 409A, then such payment shall not be made or commence until the earlier of (i) the expiration of the 6-month period measured from your separation from service from the Company or (ii) the date of your death following such a separation from service; provided, however, that such deferral shall only be effected to the extent required to avoid adverse tax treatment to you including, without limitation, the additional tax for which you would otherwise be liable under Section 409A(a)(1)(B) in the absence of such a deferral.  The first payment thereof will include a catch-up payment covering the amount that would have otherwise been paid during the period between your termination of employment and the first payment date but for the application of this provision, and the balance of the installments (if any) will be payable in accordance with their original schedule.  To the extent that any provision of this letter agreement is ambiguous as to its compliance with Section 409A, the provision will be read in such a manner so that all payments hereunder comply with Section 409A.  To the extent any payment under this letter agreement may be classified as a “short-term deferral” within the meaning of Section 409A, such payment shall be deemed a short-term deferral, even if it may also qualify for an exemption from Section 409A under another provision of Section 409A.  Payments pursuant to this section are intended to constitute separate payments for purposes of Section 1.409A-2(b)(2) of the Treasury Regulations.

5.Code Section 280G.  In the event that the severance and other benefits provided for in this letter agreement or otherwise payable to you (i) constitute “parachute payments” within the meaning of Section 280G of the Code, and (ii) would be subject to the excise tax imposed by Section 4999 of the Code (the “Excise Tax”), then your benefits under this letter agreement shall be either: 

a)delivered in full; or 

b)delivered as to such lesser extent that would result in no portion of such benefits being subject to the Excise Tax, (with first a pro rata reduction of (i) cash payments subject to Section 409A of the Code as deferred compensation and (ii) cash payments not subject to Section 409A of the Code, then (i) employee benefits that are subject to Section 409A of the Code as deferred compensation and (ii) employee benefits not subject to Section 409A of the Code and then a pro rata cancellation of (i) equity-based compensation subject to Section 409A of the Code as deferred compensation and (ii) equity-based 

 

	
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compensation not subject to Section 409A of the Code), whichever of the foregoing amounts, taking into account the applicable federal, state and local income taxes and the Excise Tax, results in your receipt on an after-tax basis, of the greatest amount of benefits, notwithstanding that all or some portion of such benefits may be taxable under Section 4999 of the Code.  

Unless you and the Company otherwise agree in writing, the determination of your excise tax liability and the amount required to be paid under this Section shall be made in writing by an accounting firm to be selected by reasonable agreement between you and the Company (the “Accountants”), whose determination shall be conclusive and binding upon you and the Company for all purposes.  For purposes of making the calculations required by this Section, the Accountants may make reasonable assumptions and approximations concerning applicable taxes and may rely on reasonable, good faith interpretations concerning the application of Sections 280G and 4999 of the Code. You and the Company shall furnish to the Accountants such information and documents as the Accountants may reasonably request in order to make a determination under this Section.  The Company shall bear all costs the Accountants may reasonably incur in connection with any calculations contemplated by this Section.

6.Other Agreements.  This Attachment A sets forth the terms of the benefits you are eligible to receive in the event your employment with the Company is terminated in the manner described herein and supersedes any prior representations or agreements, whether written or oral.  In the event of a conflict between the terms of this Attachment A and any other agreement you have entered into with the Company (including the cover letter to this Attachment A), the terms of this Attachment A shall apply.  The definitions, terms and conditions contained herein may not be modified or amended except by a written agreement, approved by the Company’s Board of Directors and signed by the Company’s General Counsel and by you.

*  *  *

ACCEPTED AND AGREED:

Catriona Fallon

 

	
	
/s/ Catriona Fallon

	
Signature

	
 

	
Catriona Fallon

	
Name

	
 

	
March 7, 2017

	
Date

 

 

 

	
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Attachment B

 

Employee Confidential Information and Invention Assignment Agreement

 

 

	
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SILVER SPRING NETWORKS, INC.

EMPLOYEE CONFIDENTIAL INFORMATION AND
INVENTION ASSIGNMENT AGREEMENT

As a condition of my becoming employed (or my employment being continued) by Silver Spring Networks, Inc., a Delaware corporation or any of its current or future subsidiaries, affiliates, successors or assigns (collectively, the “Company”), and in consideration of my employment with the Company and my receipt of the compensation now and hereafter paid to me by the Company, I agree to the following:

1.At-Will Employment Relationship.  I understand and acknowledge that my employment with the Company is and shall continue to be at-will, as defined under applicable law, meaning that either I or the Company may terminate my employment at any time for any reason or no reason, with or without notice, without further obligation or liability.

2.Confidential Information.

(a)Company Information.  I agree at all times during the term of my Employment with the Company and thereafter, to hold in strictest confidence, and not to use, except for the benefit of the Company, or to disclose to any person, firm, corporation or other entity without written authorization of the Board of Directors of the Company, any Confidential Information of the Company which I obtain or create.  I further agree not to make copies of such Confidential Information except as authorized by the Company, as necessary to carry out my assigned responsibilities as a Company employee.  I understand that “Confidential Information” means any Company proprietary information, technical data, trade secrets or know-how, including, but not limited to, research, product plans, products, services, suppliers, customer lists and customers (including, but not limited to, customers of the Company on whom I call or called, or with whom I become or became acquainted during my employment), prices and costs, markets, software, developments, inventions, laboratory notebooks, processes, formulas, technology, designs, drawings, engineering, hardware configuration information, marketing, licenses, finances, budgets or other business information disclosed to me by the Company either directly or indirectly in writing, orally or by drawings or observation of parts or equipment or created by me during the period of my employment, whether or not during working hours. I understand that “Confidential Information” includes, but is not limited to, information pertaining to any aspects of the Company’s business which is either information not known by actual or potential competitors of the Company or is proprietary information of the Company or its customers or suppliers, whether of a technical nature or otherwise.  I further understand that Confidential Information does not include any of the foregoing items which has become publicly and widely known and made generally available through no wrongful act of mine or of others who were under confidentiality obligations as to the item or items involved.

Former Employer Information.  I represent that my performance of all terms of this Agreement as an employee of the Company has not breached and will not breach any agreement to keep in confidence proprietary information, knowledge or data acquired by me in confidence or trust prior or subsequent to the commencement of my employment with the Company, and I will not 

 

	
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disclose to the Company, or induce the Company to use, any inventions, confidential or proprietary information or material belonging to any previous employer or any other party.

(b)Third Party Information.  I recognize that the Company has received and in the future will receive confidential or proprietary information from third parties subject to a duty on the Company’s part to maintain the confidentiality of such information and to use it only for certain limited purposes.  I agree to hold all such confidential or proprietary information in the strictest confidence and not to disclose it to any person, firm or corporation or to use it except as necessary in carrying out my work for the Company consistent with the Company’s agreement with such third party.

3.Inventions.

(a)Inventions Retained and Licensed.  I have attached hereto, as Exhibit A, a list describing with particularity all inventions, original works of authorship, developments, improvements, and trade secrets which were made by me prior to the commencement of my employment (collectively referred to as “Prior Inventions”), which belong solely to me or belong to me jointly with another, which relate in any way to any of the Company’s proposed businesses, products or research and development, and which are not assigned to the Company hereunder; or, if no such list is attached, I represent that there are no such Prior Inventions.  If, in the course of my employment with the Company, I incorporate into a Company product, process or machine a Prior Invention owned by me  or in which I have an interest, the Company is hereby granted and shall have a non-exclusive, royalty- free, irrevocable, perpetual, worldwide license (with the right to sublicense) to make, have made, copy, modify, make derivative works of, use, sell and otherwise distribute such Prior Invention as part of or in connection with such product, process or machine.

(b)Assignment of Inventions.  I agree that I will promptly make full written disclosure to the Company, will hold in trust for the sole right and benefit of the Company, and hereby assign to the Company, or its designee, all my right, title and interest throughout the world in and to any and all inventions, original works of authorship, developments, concepts, know-how, improvements or trade secrets, whether or not patentable or registrable under copyright or similar laws, which I may solely or jointly conceive or develop or reduce to practice, or cause to be conceived or developed or reduced to practice, during the period of time in which I am employed by or a consultant of the Company (collectively referred to as “Inventions”), except as provided in Section 3(e) below.  I further acknowledge that all inventions, original works of authorship, developments, concepts, know- how, improvements or trade secrets which are made by me (solely or jointly with others) within the scope of and during the period of my employment with the Company are “works made for hire” (to the greatest extent permitted by applicable law) and are compensated by my wages, unless regulated otherwise by the mandatory law of the state of California.

(c)Maintenance of Records.  I agree to keep and maintain adequate and current written records of all Inventions made by me (solely or jointly with others) during the term of my employment with the Company.  The records may be in the form of notes, sketches, drawings, flow charts, electronic data or recordings, laboratory notebooks, and any other format.  

 

	
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The records will be available to and remain the sole property of the Company at all times.  I agree not to remove such records from the Company’s place of business except as expressly permitted by Company policy which may, from time to time, be revised at the sole election of the Company for the purpose of furthering the Company’s business.

(c)Patent and Copyright Rights.  I agree to assist the Company, or its designee, at the Company’s expense, in every proper way to secure the Company’s rights in the Inventions and any copyrights, patents, trademarks, mask work rights, moral rights, or other intellectual property rights relating thereto in any and all countries, including the disclosure to the Company of all pertinent information and data with respect thereto, the execution of all applications, specifications, oaths, assignments, recordations, and all other instruments which the Company shall deem necessary in order to apply for, obtain, maintain and transfer such rights and in order to assign and convey to the Company, its successors, assigns and nominees the sole and exclusive rights, title and interest in and to such Inventions, and any copyrights, patents, mask work rights or other intellectual property rights relating thereto.  I further agree that my obligation to execute or cause to be executed, when it is in my power to do so, any such instrument or papers shall continue after the termination of this Agreement until the expiration of the last such intellectual property right to expire in any country of the world.  If the Company is unable because of my mental or physical incapacity or unavailability or for any other reason to secure my signature to apply for or to pursue any application for any United States or foreign patents or copyright registrations covering Inventions or original works of authorship assigned to the Company as above, then I hereby irrevocably designate and appoint the Company and its duly authorized officers and agents as my agent and attorney in fact, to act for and in my behalf and stead to execute and file any such applications and to do all other lawfully permitted acts to further the application for, prosecution, issuance, maintenance or transfer of letters patent or copyright registrations thereon with the same legal force and effect as if originally executed by me.  I hereby waive and irrevocably quitclaim to the Company any and all claims, of any nature whatsoever, which I now or hereafter have for infringement of any and all proprietary rights assigned to the Company.

(d)Exception to Assignments.  I understand that the provisions of this Agreement requiring assignment of Inventions to the Company do not apply to any invention which qualifies fully under the provisions of California Labor Code Section 2870 (attached hereto as Exhibit B).  I will advise the Company promptly in writing of any inventions that I believe meet such provisions and are not otherwise disclosed on Exhibit A.

4.Returning Company Documents and Property.  I agree that, at the time of termination of my employment with the Company, I will deliver to the Company (and will not keep in my possession, recreate or deliver to anyone else) any and all devices, records, data, notes, reports, proposals, lists, correspondence, specifications, drawings, blueprints, sketches, laboratory notebooks, materials, flow charts, equipment, other documents or property, or reproductions of any aforementioned items developed by me pursuant to my employment or otherwise belonging to the Company, its successors or assigns.  I further agree that any property situated on the Company’s premises and owned by the Company, including disks and other storage media, filing cabinets or other work areas, is subject to inspection by Company personnel 

 

	
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at any time with or without notice.  In the event of the termination of my employment, I agree to sign and deliver the “Termination Certification” attached hereto as Exhibit C.

5.Notification to Other Parties.  I hereby consent that, after my employment ends, the Company may notify my subsequent employer(s), and any other persons or entities that I render services for in any capacity, about my rights and obligations under this Agreement.

6.Solicitation of Employees, Consultants and Other Parties.  I agree that during the term of my employment with the Company, and for a period of twelve (12) months immediately following the (voluntary or involuntary) termination of my employment with the Company for any reason, whether with or without cause, I shall not either directly or indirectly solicit, induce, recruit or encourage any of the Company’s employees or consultants to terminate their relationship with the Company, or attempt to solicit, induce, or recruit employees or consultants of the Company, either for myself or for any other person or entity. Further, following (voluntary or involuntary) termination of my employment with the Company for any reason, with or without cause, I shall not at any time use Company trade secrets to solicit any licensor to or customer of the Company or licensee of the Company’s products, in each case, that are known to me, with respect to any business, products or services that are competitive to the products or services offered by the Company or under development as of the date of termination of my employment with the Company.

7.Representations and Covenants.

(a)Facilitation of Agreement. I agree to execute promptly any proper oath or verify any proper document required to carry out the terms of this Agreement upon the Company’s written request to do so.

(b)Conflicts.  I represent that my performance of all the terms of this Agreement will not breach any agreement to keep in confidence proprietary information acquired by me in confidence or in trust prior to commencement of my employment with the Company.  I have not entered into, and I agree I will not enter into, any oral or written agreement in conflict with any of the provisions of this Agreement.  I agree that, during the term of my employment with the Company, I will devote full time to the business of the Company and will not engage in any other employment, occupation, consulting or other business activity directly related to the business in which the Company is now involved or becomes involved during the term of my employment nor will I engage in any other activities that conflict with my obligations to the Company.

(c)Voluntary Execution.  I certify and acknowledge that I have carefully read all of the provisions of this Agreement and that I understand and will fully and faithfully comply with such provisions.

 

	
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8.General Provisions.

(a)Governing Law.  The validity, interpretation, construction and performance of this Agreement shall be governed by the laws of the State of California, without giving effect to the principles of conflict of laws.

(b)Entire Agreement.  This Agreement sets forth the entire agreement and understanding between the Company and me relating to the subject matter herein and merges all prior discussions between us.  No modification or amendment to this Agreement, nor any waiver of any rights under this Agreement, will be effective unless approved by the Company’s Board of Directors and in writing signed by the Company’s General Counsel and me. Any subsequent change or changes in my duties, obligations, rights or compensation will not affect the validity or scope of this Agreement.

(c)Severability.  If one or more of the provisions in this Agreement are deemed void by law, then the remaining provisions will continue in full force and effect.

(d)Successors and Assigns.  This Agreement will be binding upon my heirs, executors, administrators and other legal representatives and will be for the benefit of the Company, its successors, and its assigns.

(e)Survival.  The provisions of this Agreement shall survive the termination of my employment and the assignment of this Agreement by the Company to any successor in interest or other assignee.

(f)Remedies.  I acknowledge and agree that violation of this Agreement by me may cause the Company irreparable harm, and therefore agree that the Company will be entitled to seek extraordinary relief in court, including but not limited to temporary restraining orders, preliminary injunctions and permanent injunctions without the necessity of posting a bond or other security and in addition to and without prejudice to any other rights or remedies that the Company may have for a breach of this Agreement.

(g)ADVICE OF COUNSEL.  I ACKNOWLEDGE THAT, IN EXECUTING THIS AGREEMENT, I HAVE HAD THE OPPORTUNITY TO SEEK THE ADVICE OF INDEPENDENT LEGAL COUNSEL, AND I HAVE READ AND UNDERSTOOD ALL OF THE TERMS AND PROVISIONS OF THIS AGREEMENT. THIS AGREEMENT SHALL NOT BE CONSTRUED AGAINST ANY PARTY BY REASON OF THE DRAFTING OR PREPARATION HEREOF.

 

	
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The parties have executed this Agreement on the respective dates set forth below:

 

	
COMPANY:
	
 
	
EMPLOYEE:

	
 
	
 
	
 

	
SILVER SPRING NETWORKS, INC.
	
 
	
Catriona Fallon, an Individual:

	
 
	
 
	
 

	
 
	
 
	
 

	
/s/ Richard S. Arnold, Jr.
	
 
	
/s/ Catriona Fallon

	
Signature
	
 
	
Signature

	
 
	
 
	
 

	
By:
	
 
	
Richard S. Arnold, Jr.
	
 
	
Name:
	
 
	
Catriona Fallon

	
 
	
 
	
 
	
 
	
 
	
 
	
 

	
Title:
	
 
	
General Counsel
	
 
	
 
	
 
	
 

	
 
	
 
	
 
	
 
	
 
	
 
	
 

	
Date:
	
 
	
March 7, 2017
	
 
	
Date:
	
 
	
March 7, 2017

	
 
	
 
	
 
	
 
	
 
	
 
	
 

	
Address:
	
 
	
230 W. Tasman Drive
	
 
	
Address:
	
 
	
[address]

	
 
	
 
	
San Jose, CA  95134
	
 
	
 
	
 
	
[address]

	
 
	
 
	
 
	
 
	
 
	
 
	
 

 

 

 

 

	
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EXHIBIT A

LIST OF PRIOR INVENTIONS

AND ORIGINAL WORKS OF
AUTHORSHIP EXCLUDED FROM
SECTION 3

 

	
Title
	
Date
	
Identifying Number or Brief Description

	
 
	
 
	
 

	
 
	
 
	
 

	
 
	
 
	
 

	
 
	
 
	
 

	
 
	
 
	
 

	
 
	
 
	
 

	
 
	
 
	
 

	
 
	
 
	
 

	
 
	
 
	
 

	
 
	
 
	
 

	
 
	
 
	
 

	
 
	
 
	
 

	
 
	
 
	
 

	
 
	
 
	
 

	
 
	
 
	
 

	
 
	
 
	
 

	
 
	
 
	
 

	
 
	
 
	
 

	
 
	
 
	
 

	
 
	
 
	
 

 

	
 
	
                No inventions or improvements

	
 
	
 

	
 
	
                Additional Sheets Attached

	
 
	
 

	
 
	
Signature of Employee:
	
/s/ Catriona Fallon

	
 
	
 

	
 
	
Printed Name of Employee:  Catriona Fallon

	
 
	
 

	
 
	
Date:
	
March 7, 2017

 

Silver Spring Networks-California ECIIAA

 

 

EXHIBIT B

Section 2870 of the California Labor Code is as follows:

(a)Any provision in an employment agreement which provides that an employee shall assign, or offer to assign, any of his or her rights in an invention to his or her employer shall not apply to an invention that the employee developed entirely on his or her own time without using the employer’s equipment, supplies, facilities, or trade secret information except for those inventions that either:

(1)Relate at the time of conception or reduction to practice of the invention to the employer’s business, or actual or demonstrably anticipated research or development of the employer; or

(2)Result from any work performed by the employee for the employer.

(b)To the extent a provision in an employment agreement purports to require an employee to assign an invention otherwise excluded from being required to be assigned under subdivision (a), the provision is against the public policy of this state and is unenforceable.

 

	
Date:
	
March 7, 2017
	
 
	
/s/ Catriona Fallon

	
 
	
 
	
Signature

	
 
	
 
	
 

	
 
	
 
	
Catriona Fallon

	
 
	
 
	
Catriona Fallon

 

Silver Spring Networks-California ECIIAAExhibit 10.1

 

TOLLING
/ LEAD PURCHASE AGREEMENT

 

This Tolling / Lead Purchase
Agreement (the “Agreement”) is entered into by and between JOHNSON CONTROLS BATTERY GROUP, INC., a Wisconsin
corporation (“Buyer”), and AQUA METALS, INC., a Delaware corporation (“Supplier”), (each
a “Party” and, collectively, the “Parties”), as of this 7th day of February 2017 (the “Effective
Date”).

 

WHEREAS, Buyer manufactures
and sells lead-acid batteries; and

 

WHEREAS, Supplier
is a supplier of lead and lead alloys with specialized skills, knowledge and experience in processing and recycling lead bearing
materials used in manufacturing lead-acid batteries; and

 

WHEREAS, pursuant
to the terms and conditions of this Agreement, Buyer desires to purchase from Supplier, and Supplier desires to sell to Buyer,
certain Products.

 

NOW, THEREFORE,
in consideration of the mutual covenants, terms and conditions herein, and for other good and valuable consideration, the receipt
and sufficiency of which are hereby acknowledged, the Parties agree as follows:

 

1.             Definitions.
Capitalized terms have the meanings defined in this Agreement.

 

1.1           “Affiliate”
shall means any organization or entity that directly or indirectly, through one or more intermediaries, controls, is controlled
by, or is under common control with, such organization or entity. The term “control” (including the terms “controlled
by” and “under common control with”) means the possession, directly or indirectly, of the power to direct or
cause the direction of the management and policies of an organization or entity, whether through the ownership of voting securities,
by contract or otherwise

 

1.2           “Forecast”
means Buyer’s and Supplier’s nonbinding, advance calculation of its future requirements or production, respectively.

 

1.3           “MT”
shall mean metric ton(s) with a unit of one (1) metric ton being equal to 2,204.6 pounds.

 

1.4           “Product”
or “Products” shall mean the lead, lead alloys and poly chips sold by Supplier to Buyer.

 

1.5           “Raw
Materials” is defined in Exhibit B.

 

1.6           “Specifications”
shall mean the chemical composition and related details for a Product as identified in Exhibit C.

 

1.7           “Tolling
Services” shall mean the process of recycling the Raw Materials into various lead, lead alloys and poly chips.

 

1.8           “U.S.
Dollars” or “$” or “USD” shall mean the currency of the United States of America.

 

    	 	1	 

     

    

 

2.             Supply
of Products.

 

2.1           Sale
of Products. Subject to the terms and conditions of this Agreement, during the Term, Buyer and its Affiliates shall purchase
from Supplier, and Supplier shall sell to Buyer and its Affiliates, each on a non-exclusive basis, the products listed on Exhibit
A (the “Products”).

 

2.2           Joint
and Several Liability. Buyer shall execute Exhibit A-1, and two of its Affiliates shall each execute Exhibits A-2 and A-3.
The duties, rights and obligations for Buyer under Exhibit A-1 and the Affiliates executing Exhibits A-2 and A-3 shall be several
and not joint with respect to the particular entity executing Exhibit A-1, A-2 or A-3 respectively. No Buyer Affiliate shall have
any duties, rights and obligations hereunder until such time as they execute Exhibits A-2 or A-3. Notwithstanding the foregoing,
however, during the Term of this Agreement, Affiliates of Buyer located in North America shall be permitted to submit Purchase
Orders under Exhibit A-1 and Affiliates of Buyer located in the Regions of Europe and China may submit Purchase Orders under Exhibits
A-2 and A-3, respectively, when and if such Exhibits are executed, subject to and commensurate with the rights and obligations
of Buyer or the Buyer Affiliates executing Exhibit A-1, A-2 or A-3, as the case may be. Further, Buyer or the Buyer Affiliate executing
Exhibits A-2 or A-3 shall be responsible under the terms of this Agreement for all Purchase Orders submitted by their Affiliates
in their respective Regions pursuant to Exhibit A-1, A-2 or A-3.

 

2.3           Manufacturing
Specifications and Locations. During the Term of this Agreement Supplier shall produce the Products ordered by Buyer through
its Tolling Services. Supplier shall produce the Products at its McCarren, Nevada facility, or at additional Supplier facilities
as may be mutually agreed after the date of this Agreement (each a “Facility”). All such Products shall meet
the specifications on Exhibit C (the “Specifications”). Buyer shall have the right to change its
Specifications upon thirty (30) days written notice without the approval of Supplier. The parties shall mutually discuss the impact
of the change in Specifications and Supplier shall not be obligated to supply product meeting to the new specifications except
by mutual agreement.

 

2.4           Raw
Materials. Buyer shall provide the Raw Materials necessary to permit Supplier’s orderly production and supply of the
tolled Products through its Tolling Services, subject to the terms and conditions on Exhibit B and any other applicable
terms set out in this Agreement.

 

3.             Forecasts
and Purchase Orders.

 

3.1           Buyer’s
Tolling Forecasts. Commencing sixty (60) days following Supplier’s written notice to Buyer of Supplier’s readiness
to commence Tolling Services, and for Supplier’s capacity planning and commitment purposes, Buyer will provide to Supplier
by the first business day of every month a 30-day forecast of its Tolling requirements for the next succeeding month (“Forecast
Month”) (e.g., on March 1, 2017, Buyer shall deliver a forecast for the 30 days ending April 30, 2017 and the 30 days
ending April 30, 2017 shall be the Forecast Month), setting out the volume of tolled Products that Buyer anticipates it will order
in the Forecast Month (“Buyer’s Forecast”). Supplier shall provide, within five (5) business days following
receipt of the Forecast, written confirmation that it can supply the volume of tolled Products in the Forecast month. Buyer may
provide amendments to its Forecast subject only to the prior written consent of Supplier, which consents shall not be unreasonably
withheld.

 

    	 	2	 

     

    

 

3.2           Supplier’s
Covered Lead Forecast. Commencing sixty (60) days following Supplier’s written notice to Buyer of Supplier’s readiness
to commence the sale of Covered Lead (as defined In Exhibit A-I), Supplier will provide to Buyer by the first business day of every
month a seventh month rolling forecast of its expected production of Covered Lead (“Supplier’s Forecast”).
As set forth in Section C.1. of Exhibit A-1, Buyer shall commit to purchase from Supplier the amount of Covered Lead for any given
month in Supplier’s Forecast unless Supplier provides six months written notice to Supplier of its intention not to purchase
any portion of the forecasted amount for such month.

 

3.3           Purchase
Orders. Buyer shall not be committed to purchase, and Supplier shall not be committed to sell, any volume of Products, whether
tolled Product or products constituting Covered Lead, until Buyer has issued, and Supplier has accepted, a purchase order (a “Purchase
Order”) setting out a specific volume of Products, the price as calculated under this Agreement, the date for delivery,
and the location to which the Products must be delivered (the “Delivery Location”). Buyer may withdraw a Purchase
Order at any time before it is accepted by Supplier. Nothing in this Section 3.3 shall minimize or otherwise affect the obligations
under Sections C.1., C.2. and C.3. of Exhibit A-1.

 

4.             Shipment
and Delivery.

 

4.1           Shipment.
Delivery shall be made in accordance with the terms of this Agreement and, to the extent not inconsistent with the terms of this
Agreement, on the face of Buyer’s Purchase Order. Supplier shall give written notice of shipment to Buyer when the Products
are delivered to a carrier for transportation. Supplier shall also provide Buyer all shipping documents, including the commercial
invoice, packing list, bill of lading and any other documents as mutually agreed by the Parties. In addition, the original bill
of lading and related transportation documents shall be furnished by Supplier to the transportation carrier, The Buyer’s
Purchase Order number must appear on all shipping documents, shipping labels, bills of lading, invoices, correspondence and any
other documents pertaining to the Purchase Order.

 

4.2           Delivery.
Supplier shall deliver the Products in the quantities and on the date(s) specified in any Purchase Orders issued and accepted pursuant
to this Agreement (the “Delivery Date”). Timely delivery of the Products is of the essence. If Supplier determines
that it cannot meet the Buyer’s Delivery Date within a given month, Supplier shall immediately inform Buyer and shall make
its best efforts to make up for any shortfall in the monthly metric tons of Product, at Buyer’s option, within the next thirty
(30) days or a later date as per Buyer’s needs. Supplier shall prioritize its resources and manufacturing capacity at its
Facility to ensure that it can fulfill Buyer’s Purchase Orders accepted by Buyer on a priority basis over any other order.
If Supplier fails to deliver the Products in full on the Delivery Date (the amount of such shortfall being the “Shortfall”),
and the amount of the Shortfall is less than 15% of the required delivery amount, Supplier shall ensure that the amount of the
Shortfall is delivered in full within sixty (60) days of the original Delivery Date. If the Shortfall is greater than 15% of the
required delivery amount (the amount of the Shortfall in excess of 15% being the “Excess Shortfall”), Buyer
shall, upon written notice of election to Supplier, either (i) elect to have Supplier deliver the amount of the Excess Shortfall
in full within sixty (60) days of the original Delivery Date or (ii) (A) purchase an amount of Products equal to or less than the
Excess Shortfall from an alternative source and demand from Supplier reimbursement for the direct costs and expenses incurred by
Buyer in conducting the covering purchase, including the excess of the price for the Product paid by Buyer in the covering purchase
over the price payable to Supplier in the unfulfilled Purchase Order for the amount of Products subject to the covering purchase,
and (B) require Supplier deliver the balance of the Excess Shortfall not subject to a covering purchase pursuant to (A) to Buyer
within sixty (60) days of the original Delivery Date. In the event Buyer elects the option in clause (ii) with respect to an unfulfilled
Purchase Order for tolled Products, title to the Raw Material relating to the portion of the Excess Shortfall subject to a covering
purchase shall pass to Supplier.

 

    	 	3	 

     

    

 

4.3           Title
and Risk of Loss. All shipments of Product shall be f.o.b. the Supplier’s Facility, at which point the title and risk
of loss for such Product will pass to the Buyer.

 

4.4           Business
Interruption and Recovery Plan. Supplier shall develop and maintain a detailed written business interruption and recovery plan,
including business impact and risk assessment, crisis management, information technology disaster recovery, and business continuity.
Supplier shall update the plan annually and shall notify Buyer in writing within twenty-four (24) hours of any activation of the
plan. Supplier shall provide a copy of the plan to Buyer within thirty (30) days of any request.

 

5.             Price
and Payment.

 

5.1           Price.

 

(a)          Lead.
The price of the Products, other than tolled Products, is determined as set forth in Sections B.4. and B.5. of Exhibit A-1,
subject to the *** provisions of Section 5.4.

 

(b)          Tolling.
The price of the Raw Materials is determined as set forth in Sections B.1., B.2., B.3. and B.5. of Exhibit A-1, subject
to the *** provisions of Section 5.5.

 

5.2           Payment
Terms. All invoices shall be dated either the first day or the 15th day of the month following the month in which
the sale of the Product occurred. Supplier will send its invoices to Buyer via email by the 4th working day of the
month. Until the third (3rd) anniversary of the Effective Date, Buyer will pay the invoices within *** days of the
receipt of the invoice or the invoice date, whichever is later (subject to Buyer’s twice-per-month check runs), in accordance
with Buyer’s then current accounts payable policy. After the third (3rd) anniversary of the Effective Date, Buyer
will pay the invoices within *** days of the receipt of the invoice or the invoice date, whichever is later, (subject to Buyer’s
twice-per-month check runs) in accordance with Buyer’s then current accounts payable policy. The Parties shall seek to resolve
all disputes regarding invoicing and payment expeditiously and in good faith. Supplier shall continue performing its obligations
under this Agreement notwithstanding the existence of any such dispute. Any legal action or arbitration proceeding by Supplier
under any Purchase Order must be commenced no later than one (1) year after the breach or other event giving rise to the Supplier’s
claim occurs, or Supplier becomes aware of the existence (or facts and circumstances giving rise to the existence) of such claim,
whichever occurs first.

 

 

***Text has been omitted pursuant to Registrant’s
confidential treatment request filed with the Securities and Exchange Commission (“Commission”) pursuant to Rule 24b-2
under the Securities Exchange Act of 1934.  The omitted text has been filed separately with the Commission.

 

    	 	4	 

     

    

 

5.3           Currency.
All payments under this Agreement shall be made in United States dollars (US$), unless otherwise agreed to in writing and signed
by the Authorized Representatives of the Parties.

 

5.4           ***
Pricing for Products. *** the prices set forth in in Sections B.4. and B.5. of Exhibit A ***.

 

5.5           ***
Pricing for Tolling Services. *** the prices set forth in Sections B.1., B.2., B.3. and B.5. of Exhibit A-1
***.

 

5.6           Audit
Rights. The Parties shall have the right to conduct an audit to determine compliance with any provision of this Agreement,
upon written notice to the other Party, the requesting Party can initiate an audit at any time during the term of this Agreement
and for the 12 month period following the termination or expiration of this Agreement. Upon receipt of the written notice, the
Parties shall mutually agree on the scope of the audit. The audit shall be conducted by an appropriate independent outside professional
auditing firm (e.g., accountants for financial issues such as *** compliance; environmental auditors for environmental compliance),
paid for by the Party requesting the audit and selected at the sole discretion of Party requesting the audit. Prior to the audit,
the auditor, Supplier, and Buyer will agree upon a confidentiality agreement in order to maintain the confidentiality of any Confidential
Information provided to the auditor. At the conclusion of the audit the auditor shall provide a report setting out the auditor’s
determination regarding the issues that are the scope of the audit, the basis for the Auditor’s determination, and any assumptions
made or conclusions drawn as part of the audit process. In the case of an audit for compliance with Sections 5.4 and 5.5 (***),
the auditor shall also state in the report the amount of any overcharges or undercharges. As long as notice is provided prior
to the expiration or termination of this Agreement, a Party’s right to an audit, and the obligations set out in this Section
5.6, shall continue in full force and effect until such time as the audit is completed, regardless of whether the Term of the
Agreement ends or the Agreement is terminated prior to the completion of the audit.

 

 

***Text has been omitted pursuant to Registrant’s
confidential treatment request filed with the Securities and Exchange Commission (“Commission”) pursuant to Rule 24b-2
under the Securities Exchange Act of 1934.  The omitted text has been filed separately with the Commission.

 

    	 	5	 

     

    

 

5.7           Record
Retention. Supplier and Buyer shall maintain and preserve, for the Term of this Agreement and for not less than one (1) year
thereafter, all written and electronic records of all data and information used to calculate the amount of any invoice for Products
provided under this Agreement, all records demonstrating the prices paid by Buyer, or charged by Supplier, to any other customers
for the same or similar Products and Tolling Services , and any other records related to Buyer’s and Supplier’s performance
under this Agreement. Each party shall bear the cost of maintaining its records.

 

6.             Warranties.

 

6.1           Supplier’s
Warranty. Supplier warrants to Buyer that for a period of six (6) months from the Delivery Date, all Products will: (a) conform
to applicable Specifications, samples and other requirements specified by Buyer; and (b) be free and clear of all liens, security
interests or other encumbrances. If Buyer gives Supplier notice of noncompliance under this Section, Supplier shall, at its own
cost and expense, within three (3) business days replace the defective or nonconforming Products and pay for all related expenses,
including, but not limited to, transportation charges for the return of the defective or nonconforming products to Supplier and
the delivery of replacement Products to Buyer.

 

6.2           Inspection
and Assay of Products. The Buyer has the right to inspect and assay the Products within ninety (90) days of the Delivery Date.
Buyer, at its sole option, may inspect and assay a retention sample or a sample of the Products, and Buyer may reject all or any
portion of the Products if it determines the Products are nonconforming, defective, or less than the quantity required under the
applicable Purchase Order and the terms of this Agreement. The right to inspect and assay the Products does not limit or restrict
in any manner Supplier’s Warranty contained in Section 6.1.

 

(a)          If
Buyer rejects any portion of the Products, pursuant to Section 6.3, Buyer has the right, upon written notice to Supplier, to: (i)
rescind the Purchase Order in its entirety; (ii) accept the Products at a reasonably reduced price; or (iii) reject the Products
and require replacement of the rejected Products. If Buyer requires replacement of the Products, Supplier shall, at its expense,
promptly replace the nonconforming Products and pay for all related expenses, including, but not limited to, transportation charges
for the return of the defective Products and the delivery of replacement Products.

 

(b)          If
Supplier fails to timely deliver replacement Products, Buyer may replace them with products from a third party and charge Supplier
the cost thereof, and terminate the applicable Purchase Order. Any inspection or other action by Buyer under this Section shall
not reduce or otherwise affect Supplier’s obligations under this Agreement, and Buyer shall have the right to conduct further
inspections after Supplier has carried out its remedial actions.

 

    	 	6	 

     

    

 

6.3           Recall.
Supplier shall be responsible for, and shall indemnify and hold harmless Buyer against, all costs associated with any recall campaigns,
field service actions or other corrective service actions, whether voluntary, government mandated, or required by any of Buyer’s
customers, that are attributable to, or partially attributable to, defects in the Products caused by Supplier prior to the time
Customer converts the Product; provided where such corrective service action is attributable to both Supplier and Customer, Supplier’s
liability shall be proportional to its comparative fault. Supplier’s liability under this section includes, but is not limited
to, all costs associated with producing replacement batteries, all labor costs incurred by Buyer or its customer(s) in replacing
the batteries, any attorney’s fees, and any other costs arising from or related to the recall, field service action, or other
corrective service action, including all attorney’s fees or costs arising from any litigation, arbitration, or other proceeding
arising out of or related to the recall.

 

7.             Term;
Termination.

 

7.1           Term.
The term of this Agreement commences on the Effective Date and continues for a period of five (5) years unless it is terminated
earlier as provided in this Agreement (the “Initial Term”). Upon expiration of the Initial Term this Agreement
shall extend each day for another three years unless a party has previously provided a termination notice, in which case the Agreement
will terminate on the third anniversary of the date of such notice (the “Renewal Term”). The Initial Term and
Renewal Term shall be collectively referred to as the “Term”.

 

7.2           Mutual
Termination Right. At any time after the second (2nd) anniversary of the Effective Date, either party may terminate
this Agreement upon written notice to the other party, which termination shall be effective on the third (3rd) anniversary
of the date of such written notice.

 

7.3           Buyer’s
Right to Terminate for Cause. Buyer may terminate this Agreement, in whole or in part, for undelivered Products with ten (10)
days prior written notice to Supplier. In addition to any remedies that may be provided elsewhere in this Agreement, Buyer may
terminate this Agreement with immediate effect upon written notice to the Supplier, either before or after the acceptance of the
Products, if Supplier has materially failed to perform or comply with any of the terms and conditions of this Agreement, in whole
or in part, where such failure goes uncorrected for ten (10) days following written notice to Supplier. If Supplier becomes insolvent,
files a petition for bankruptcy or commences or has commenced against it proceedings relating to bankruptcy, receivership, reorganization
or assignment for the benefit of creditors (collectively, “Bankruptcy”), then Buyer may terminate this Agreement
upon written notice to Supplier. If Buyer terminates this Agreement for any reason, Supplier’s sole and exclusive remedy
is payment for Products received and accepted by Buyer prior to the termination.

 

    	 	7	 

     

    

 

7.4           Supplier’s
Right to Terminate for Cause. Supplier may terminate this Agreement, in whole or in part, based on any material breach of this
Agreement by Buyer that goes uncorrected for ten (10) days following written notice to Buyer. Supplier may also terminate this
agreement effective upon delivery of written notice to Buyer in the event of the expiration of termination of that certain Equipment
Supply Agreement of even date herewith between Buyer and Supplier. If Supplier terminates this Agreement for any reason, Buyer’s
sole and exclusive remedy is the recovery of any Raw Materials in the possession of Supplier and delivery of any Product paid for
by Buyer.

 

7.5           Effect
of Termination. At the termination or expiration of this Agreement:

 

(a)          Buyer
has the option but not the obligation to purchase any remaining Products ordered pursuant to this Agreement at the prices set out
in this Agreement.

 

(b)          At
Buyer’s election, Supplier shall (i) complete or return all work in progress that is the subject of any Purchase Orders placed
by Buyer under this Agreement, and (ii) return any inventory of Raw Materials, packaging, and the Products in Supplier’s
possession.

 

(c)          In
the event of termination of the Agreement for cause by Buyer, Supplier shall, at Buyer’s election, which shall be made in
writing to Supplier at the time of notice of termination is delivered, continue to supply Products to Buyer under the provisions
of this Agreement for up to twelve (12) months, until such time as Buyer provides thirty (30) days prior notice to Supplier that
Buyer has secured an alternative source.

 

8.             Indemnification;
Insurance; Liability.

 

8.1           Indemnification.
Supplier shall defend, indemnify and hold harmless Buyer and Buyer’s parent company, their subsidiaries, affiliates, successors
or assigns and their respective directors, officers, shareholders and employees, and Buyer’s customers (collectively, “Buyer
Indemnitees”) from and against all third party Claims arising out of or as a result of (i) Supplier’s negligence
or willful misconduct, (ii) Supplier’s breach of any of the terms of this Agreement and any and all consequences of such
breach, or (iii) Supplier’s failure to comply with any Law, including any Environmental Law. Claims shall include any and
all loss, injury, death, damage, liability, claim, deficiency, action, judgment, interest, award, penalty, fine, cost or expense
(including reasonable attorney, consultant and professional fees and costs), and the cost of enforcing any right to indemnification
hereunder and the cost of pursuing any insurance providers (collectively, “Losses”). Supplier shall not be obligated
under this Section 8.1 for any settlement of any claim entered into by a Buyer Indemnitee without Supplier’s prior written
consent.

 

8.2           Buyer
Indemnification. Buyer shall defend, indemnify and hold harmless Supplier and Supplier’s parent company, their subsidiaries,
affiliates, successors or assigns and their respective directors, officers, shareholders and employees (collectively, “Supplier
Indemnitees”) from and against all third party Claims arising out of or as a result of (i) Buyer’s negligence or
willful misconduct, (ii) Buyer’s breach of any of the terms of this Agreement and any and all consequences of such breach,
or (iii) Buyer’s failure to comply with any Law, including any Environmental Law. Buyer shall not be obligated under this
section 8.2 for any settlement of any claim entered into by a Supplier Indemnitee without Buyer’s prior written consent.

 

    	 	8	 

     

    

 

8.3           Insurance.
During the Term and for a period of 2 years thereafter, Supplier shall, at its own expense, maintain and carry insurance in full
force and effect which includes, but is not limited to, commercial general liability (including Product liability) in a sum no
less than Five Million US Dollars ($5,000,000 UDS) with financially sound and reputable insurers. Upon Buyer’s request, Supplier
shall provide Buyer with a certificate of insurance from Supplier’s insurer evidencing the insurance coverage specified in
this Agreement. The certificate of insurance shall name Buyer as an additional insured. Supplier shall provide Buyer with thirty
(30) days’ advance written notice in the event of a cancellation or material change in Supplier’s insurance policy.
Except where prohibited by law, Supplier shall require its insurer to waive all rights of subrogation against Buyer’s insurers
and Buyer or the Indemnitees.

 

8.4           Damages
Waiver. EXCEPT FOR DAMAGES ARISING AS A RESULT OF A BREACH OF CONFIDENTIALITY, INTELLECTUAL PROPERTY INFRINGEMENT OR FRAUD,
IN NO EVENT SHALL EITHER PARTY BE LIABLE TO THE OTHER PARTY OR ANY INDEMNITEE FOR ANY INDIRECT, CONSEQUENTIAL (INCLUDING BUT NOT
LIMITED TO LOSS OF BUSINESS, LOSS OF PROFITS, BUSINESS INTERRUPTION AND THE LIKE), EXEMPLARY, PUNITIVE OR SPECIAL DAMAGES ARISING
FROM OR RELATING TO THIS AGREEMENT, THE CONDUCT OF BUSINESS UNDER THIS AGREEMENT, OR BREACH OF THIS AGREEMENT OR ANY PURCHASE ORDER,
REGARDLESS OF WHETHER THE CLAIM UNDER WHICH SUCH DAMAGES ARE SOUGHT IS BASED UPON BREACH OF WARRANTY, BREACH OF CONTRACT, NEGLIGENCE,
TORT, STRICT LIABILITY, STATUTE, REGULATION OR ANY OTHER LEGAL THEORY OR LAW, EVEN IF THE BREACHING PARTY HAS BEEN ADVISED OF THE
POSSIBILITY OF SUCH DAMAGES AND EVEN IF A REMEDY SET FORTH HEREIN IS FOUND TO HAVE FAILED OF ITS ESSENTIAL PURPOSE.

 

8.5           Limitation
of Liability. EXCEPT FOR BUYER’S BREACH OF ITS OBLIGATION TO PAY FOR ANY PRODUCT ACCORDING TO THE TERMS OF THIS AGREEMENT,
DAMAGES ARISING AS A RESULT OF A BUYER’S BREACH OF CONFIDENTIALITY, INTELLECTUAL PROPERTY INFRINGEMENT, OR FRAUD, BUYER’S
TOTAL AGGREGATE LIABILITY RESULTING FROM ITS PERFORMANCE OR NON-PERFORMANCE UNDER THIS AGREEMENT, OR FROM ANY CLAIM RELATED IN
ANY WAY TO THIS AGREEMENT, SHALL NOT EXCEED THE TOTAL PAYMENTS MADE BY BUYER TO SUPPLIER FOR PRODUCTS UNDER THIS AGREEMENT IN THE
TWELVE (12) MONTHS PRIOR TO THE EVENT GIVING RISE TO THE CLAIM.

 

9.             Compliance.

 

9.1           Compliance
with Laws. Supplier shall comply with all Laws, and shall hold and comply with all necessary permits, licenses and other governmental
approvals, as applicable or as required to perform each of its obligations under this Agreement. In this Agreement the term “Law”
or “Laws” shall mean all local, county, state, and federal/national laws, statutes, rules, ordinances, regulations,
bylaws, administrative or judicial orders, and administrative, or judicial consent decrees, including, without limitation, any
Law enacted, promulgated, adopted, issued, or entered into, including but not limited, to protect human health and the environment,
such as the Resource Conservation and Recovery Act (“RCRA”), the Clean Air Act, the Clean Water Act, the Comprehensive
Environmental Response, Compensation and Liability Act (“CERCLA”), the Hazardous Materials Transportation Act,
and the Occupational Safety and Health Act (“OSHA”), (hereinafter, individually and collectively, any “Environmental
Law”) or any equivalent law in the applicable jurisdiction.

 

    	 	9	 

     

    

 

9.2           Environmental
Law. Supplier shall promptly provide:

 

(a)          Buyer
with documentation to demonstrate Supplier’s compliance with any applicable Law, including any applicable Environmental Law,
if requested by Buyer.

 

(b)          Buyer
and any agent of Buyer, including but not limited to any environmental consultant hired by Buyer, with reasonable access requested
by Buyer to inspect the operations at Supplier’s plant to assure Supplier’s compliance with any Environmental Law,
if requested by Buyer.

 

(c)          Buyer
with any of the following documents received by Supplier, along with prompt written notice that Supplier has received such document(s):
(i) any notice of violation (a “NOV”) issued to Supplier by any governmental agency enforcing or administering
Environmental Law (a “Governmental Authority”); (ii) any notice of assessment or potential assessment of a civil
or criminal penalty (a “Penalty”) against Supplier alleging violation of any Environmental Law; (iii) any notice
to Supplier of liability or potential liability under any Environmental Law, including liability under CERCLA; (iv) any execution
by Supplier of an administrative or judicial consent decree relating to alleged non-compliance with Environmental Law at Supplier’s
plant or at any other location; or (v) any notice of revocation, or of the intent to revoke, any permit, license, certification
or other documentation held by Supplier tinder or related to any Environmental Law.

 

(d)          Buyer
with copies of any written notice provided by Supplier, or any of its contractors or subcontractors, to any governmental agency
of a release or threat of release to the environment of any substance regulated by Environmental Law at Supplier’s plant.

 

(e)          Buyer
with evidence that Supplier has satisfied all financial responsibility or financial assurance requirements imposed upon it by any
Environmental Law, if requested by Buyer.

 

9.3           Ethics.
Supplier shall conduct itself and ensure all subcontractors conduct themselves ethically and implement and uphold Buyer’s
Ethics Policy (see: www.johnsoncontrols.com).

 

    	 	10	 

     

    

 

10.           Confidentiality
Obligations.

 

10.1         Obligations
of Confidentiality. Each Party (a “Receiving Party”) hereby acknowledges and agrees that any information
or data (including, without limitation, any technical information, experience or data) regarding the other Party’s (the “Disclosing
Party”) plans, programs, facilities, processes, products, processes, production requirements, specifications, costs,
equipment, operations, procedures, instructions, strategies, customers, prospective customers, and forecasts, or any other information
or data that is confidential or proprietary or would reasonably be regarded as confidential or proprietary under the circumstances
(all of which are herein referred to as “Confidential Information”), of the Disclosing Party shall remain the
sole property of the Disclosing Party. The Parties agree that the terms and conditions of this Agreement shall be regarded as Confidential
Information. The Receiving Party shall treat the Disclosing Party’s Confidential Information in the same protective manner
that it treats its own confidential information, unless greater care is required under the circumstances to ensure its confidentiality.
The Receiving Party shall use the Confidential Information only for the purpose of carrying out this Agreement, and shall not disclose
the Confidential Information to others or permit its employees, officers, directors, affiliates or agents to use the Confidential
Information for any other purpose or to disclose the Confidential Information to others. This paragraph shall not prevent the Receiving
Party from using or disclosing to others information:

 

(a)          which
is known to the Receiving Party at the time it is disclosed by or obtained from the Disclosing Party; or

 

(b)          which
is, or through no fault of the Receiving Party becomes, lawfully available to the public; or

 

(c)          which
lawfully becomes available to the Receiving Party from a source other than the Disclosing Party; or

 

(d)          which
the Receiving Party is required by applicable law, a court having jurisdiction, or governmental or regulatory authority to disclose
(provided that reasonable prior notice and an opportunity to limit such disclosure is provided to the Disclosing Party).

 

10.2         Confidentiality
Term. A Receiving Party’s confidentiality obligations set out in Section 10.1 for non-trade secret Confidential Information
shall continue throughout the Term of this Agreement, and for a period of five (5) years thereafter. A Receiving Party’s
confidentiality obligations set out in Section 10.1 for Confidential Information that is also a trade secret shall continue for
so long as the information remains a trade secret.

 

10.3         Disclosure
to Affiliates. A Receiving Party may only disclose confidential information to Affiliates on a need to know basis.

 

10.4         Return
of Materials; Controlled Access. Upon termination of this Agreement, if requested, the Receiving Party shall deliver to the
Disclosing Party all of the Disclosing Party’s Confidential Information, including all copies (whether electronic, paper
or otherwise), and all other Confidential Information which is under the control of the Receiving Party, its representatives or
affiliates. The Receiving Party shall restrict access to the Disclosing Party’s Confidential Information to only those employees,
officers, directors, agents and affiliates who are absolutely necessary for the performance of the Receiving Party’s duties
under this Agreement. The Receiving Party shall be responsible for any breach of this Section 10 by its employees, officers, directors,
agents and affiliates.

 

10.5         Publicity
Not Authorized. Neither Party will issue any press release, advertising, publicity or other public statement that refers to
the relationship of the Parties or in any way refers to the terms of this Agreement, without the prior written approval of the
other Party. This Section 10.5 shall not be interpreted to prohibit disclosures required by applicable law or ordered by a court
of competent jurisdiction.

 

    	 	11	 

     

    

 

11.           General
Terms and Conditions.

 

11.1         Notices.
Each Party shall designate an authorized representative for receipt of any notice or requests provided for or permitted under this
Agreement (“Authorized Representative”). Any notice or request provided for or permitted under this Agreement
shall be in writing and shall be delivered in person or by facsimile, registered or certified mail return receipt requested, express
delivery service or other nationally recognized overnight delivery service to the Authorized Representative of the other Party.
Notice shall be considered given when received by the Authorized Representative at the address designated below. Either Party,
by notice to the other, may change its Authorized Representative and/or address for receiving such notices.

 

	To Buyer:  	
        Johnson Controls Battery Group, Inc.

        5757 N. Green Bay Avenue

        Milwaukee, WI 53209

        ***

	 	 
	With a copy to:

(for informational 

purposes only)	
        Johnson Controls Battery Group, Inc.

        5757 N. Green Bay Avenue

        Milwaukee, WI 53209

        ***

	 	 
	To Supplier:	
        Aqua Metals, Inc.

        1010 Atlantic Avenue

        Alameda, California 94501

        ***

	 	 
	With a copy to:	
        Greenberg Traurig, LLP

        3161 Michelson Drive, Suite 1000

        Irvine, California 92612

        ***

 

 

***Text has been omitted pursuant to Registrant’s
confidential treatment request filed with the Securities and Exchange Commission (“Commission”) pursuant to Rule 24b-2
under the Securities Exchange Act of 1934.  The omitted text has been filed separately with the Commission.

 

    	 	12	 

     

    

 

11.2         Force
Majeure. Neither Party shall be liable to the other for any delay or failure in performing its obligations under this Agreement
to the extent that the delay or failure is caused by an event or circumstance beyond the reasonable control of that Party, without
such Party’s fault or negligence, and which by its nature could not have been foreseen by such Party or, if it could have
been foreseen, was unavoidable (“Force Majeure Event”). Force Majeure Events include, but are not limited to,
acts of God or the public enemy, government restrictions, floods, fire, earthquakes, explosion, epidemic, war, invasion, hostilities,
terrorist acts, riots, embargoes or industrial disturbances. Supplier’s economic hardship, changes in market conditions,
and strikes or other labor disputes are not considered Force Majeure Events. If a Force Majeure Event occurs, the affected Party
may suspend performance under this Agreement by providing prompt written notice to the other Party. Supplier shall use commercially
reasonable best efforts to end the failure or delay of its performance, ensure that the effects of any Force Majeure Event are
minimized and resume performance under this Agreement as quickly as possible. Buyer is entitled to obtain Products from an alternative
source during the period of the Force Majeure Event. Supplier shall be responsible for any additional costs incurred by Buyer for
securing supply from an alternative source. Supplier shall allocate any reduction in the supply of Products as a result of a Force
Majeure Event proportionally across all of its customers.

 

11.3         Governing
Law. The rights and obligations of the Parties to this Agreement and the validity, construction, interpretation and performance
of this Agreement and any claims arising under or related to this Agreement, whether in contract or tort, shall be governed by,
construed and enforced in accordance with the laws of Delaware without regard to the provisions thereof concerning conflict of
laws. The United Nations Convention on Contracts for the International Sales of Goods is expressly excluded from application to
this Agreement in any way.

 

11.4         Dispute
Resolution.

 

(a)          The
Parties may, but are not obligated to attempt to resolve any dispute informally as follows:

 

(i)          Either
Party may initiate the informal dispute resolution process by giving written notice of a dispute (“Dispute Notice”)
to the other Party. The other Party shall have five (5) business days to respond. The Dispute Notice and the response shall each
include: (1) a statement of the Party’s position and a summary of arguments supporting that position, and (2) the name and
title of the designated representative who will represent that Party in attempting to resolve the dispute.

 

(ii)         Within
ten (10) business days of delivery of the Dispute Notice, the Parties’ designated representatives will meet (and will continue
to meet as often as the Parties choose) to gather and furnish to one another the information necessary and appropriate to resolve
the dispute. The designated representatives will discuss the problem and attempt to resolve the dispute without any additional
formal proceeding.

 

(iii)        If,
within twenty (20) business days of the delivery of the Dispute Notice, the designated representatives are unable to resolve the
dispute, either Party may escalate the dispute to the appropriate senior manager(s) within their organization. The senior managers
of each Party will then meet (and continue to meet as often as the Parties choose) to attempt in good faith to resolve the dispute.

 

(iv)        All
negotiations pursuant to this Section will be confidential and will be treated as compromise and settlement negotiations for purposes
of the applicable rules of evidence.

 

    	 	13	 

     

    

 

(v)         Either
Party may end an informal dispute resolution process at any time and for any reason.

 

(b)          If
the informal dispute resolution above is not initiated or, if initiated, does not resolve the dispute, either Party may pursue
its rights in litigation. In all such cases the Parties agree and consent to the exclusive jurisdiction of the State of Delaware.
The losing Party shall be responsible for all costs and expenses of the prevailing Party, including all attorneys’ fees,
incurred in litigation arising under this Agreement. If the court awards a temporary restraining order, preliminary injunction,
or other interim equitable relief to either Party, the Party receiving such relief shall not be required to post a bond (if permitted
by law).

 

(c)          The
Parties agree that they shall not raise, and hereby waive, any defenses based upon venue, inconvenience of forum or lack of personal
jurisdiction in any action or suit brought in accordance with Section 11.4(b).

 

11.5         Cumulative
Remedies. Buyers rights and remedies under this Agreement are cumulative and are in addition to any other rights and remedies
available at law, equity or otherwise. Supplier’s rights and remedies under this Agreement are subject to all limitations
set out in this Agreement.

 

11.6         No
Waiver. The failure to enforce at any time any of the provisions of this Agreement or to require at any time performance by
any Party of any of the provisions hereof shall in no way be construed to be a waiver of such provisions or to affect the validity
of this Agreement, or any part hereof, or the right of any Party thereafter to enforce each and every such provision in accordance
with the terms of this Agreement.

 

11.7         Assignment
& Subcontracts. This Agreement and all of the terms and provisions hereof shall be binding upon and inure to the benefit
of the Parties hereto and their respective successors and permitted assigns. Neither Party may assign or subcontract this Agreement,
nor any of its rights, interests or obligations hereunder, without the prior written consent of the other Party. However, either
Party may, without the consent of the other Party , assign all of its rights hereunder to any of its parent, wholly-owned subsidiary
or other direct or indirect wholly-owned subsidiary of its parent late.

 

11.8         Independent
Contractors. The Parties acknowledge, agree and declare that they are each independent contractors with respect to the other.
Nothing contained in this Agreement creates a partnership, joint venture or agency relationship between the Parties. All persons
employed by a Party are employees only of that Party and not of the other Party, and the employing Party shall bear all costs and
obligations related to the person’s employment.

 

11.9         Third
Party Beneficiaries. The provisions of this Agreement are for the sole benefit of the Parties and their successors and permitted
assigns, and they shall not be construed as conferring any rights in any other persons.

 

11.10         Headings.
The Section headings included throughout this Agreement are for convenience only and are not intended to affect the meaning or
interpretation of this Agreement.

 

    	 	14	 

     

    

 

11.11         Acceptance
and Signatures in Counterparts. This Agreement shall not be effective unless and until it is signed by all Parties, and cannot
be accepted by any other means. This Agreement may be executed in any number of counterparts, each of which shall be deemed an
original and all of which taken together shall be deemed to constitute one and the same instrument. An executed signature page
of this Agreement delivered by facsimile or email transmission shall be as effective as an original executed signature page.

 

11.12         Construction.
This Agreement has been negotiated and drafted by both Parties, and neither Party shall be considered the drafter or primary drafter
of this Agreement. Notwithstanding any rule of construction to the contrary, the Parties agree that this Agreement shall not be
interpreted against either Party on the basis that such Party was the drafter or primary drafter of the Agreement.

 

11.13         Amendment.
Except as otherwise provided herein, this Agreement, and the Exhibits attached hereto, may be varied or amended only by the written
and signed agreement of the Parties through their Authorized Representatives, specifically referring to this Agreement. No purchase
order, bill of sale, packaging slip or other form, whether or not purporting to supersede the terms of this Agreement, shall function
to amend or supplement the terms of this Agreement.

 

11.14         Complete
Agreement. This Agreement, together with the Exhibits hereto, and any other documents expressly incorporated by reference herein,
constitutes the complete and exclusive statement of the terms of the Agreement between the Parties with respect to the sale of
the Products for the Term. No statement or agreements, oral or written, made prior to or at the signing hereof shall vary or modify
the written terms hereof, and neither Party shall claim any modification or rescission from any provision hereof unless such modification
or rescission is in writing and signed by the Authorized Representative of the other Party. The Parties expressly agree that the
terms and conditions set out in any Purchase Order, Purchase Order acceptance, or any other document related to Buyer’s purchase
of Products, whether issued before or after the Effective Date of this Agreement, are not binding on the Parties and are not valid
or enforceable against either Party to this Agreement, unless specifically incorporated by reference herein.

 

11.15         Severability.
If any provision of this Agreement is held to be invalid, illegal or unenforceable in any respect, then to the fullest extent permitted
by applicable law such provision will be severed and shall not be considered part of this Agreement. All other provisions of this
Agreement shall remain in full force and effect. However, in the event such provision is considered an essential element of this
Agreement, the Parties shall promptly negotiate a valid and enforceable replacement for the provision that is consistent with applicable
law and achieves, as nearly as possible, the original intention of the Parties. To the fullest extent permitted by applicable law,
the Parties waive any provision of law that would render any provision of this Agreement invalid, illegal or unenforceable in any
respect.

 

11.16         Survival.
The obligations under this Agreement that by their nature are intended to continue beyond the termination of this Agreement shall
survive any such termination. The representations and warranties set forth herein shall survive the execution hereof.

 

[SIGNATURE PAGE FOLLOWS]

 

    	 	15	 

     

    

 

IN WITNESS WHEREOF, the
Parties have executed this Agreement as of the Effective Date.

 

	 	AQUA METALS, INC.
	 	 	 
	 	By:	/s/ Dr. Stephen R. Clarke
	 	Name:	Dr. Stephen R. Clarke
	 	Title:	Chairman and CEO
	 	 	 
	 	JOHNSON CONTROLS BATTERY GROUP, INC.
	 	 	 
	 	By:	/s/ Brian Steif
	 	Name:	
        Brian Steif, 

	 	Title:	EVP and Chief Financial Officer

 

     

     

    

 

EXHIBIT
A

 

TOLLING
SERVICES AND PRODUCT PURCHASES

 

Buyer shall supply certain Raw Materials to
supplier and Supplier shall process the Raw Materials into lead, lead alloys and poly chips through its Tolling Services. Buyer
shall purchase Products from Supplier which may result from the Tolling Services of Buyer’s Raw Materials or through the
tolling services of other raw materials Supplier processes at its Facility. All Products shall meet the Specifications identified
in Exhibit C. The Tolling Services and Products purchased by Buyer may vary from Region to Region.

 

Exhibit A-1 identifies and details
the Tolling Services and Product purchases in the Region of North America Region (NAFTA countries as of the Effective Date).

 

Exhibit A-2 identities and details
the Tolling Services and Product purchases in the Region of Europe (European Union countries as of the Effective Date),

 

Exhibit A-3 identifies and details
the Tolling Services and Product purchases in the Region of China.

 

    	 	Exhibit A-1	 

     

    

 

EXHIBIT
A-1

 

NORTH
AMERICA TOLLING SERVICES AND PRODUCT PURCHASES

 

		A.	North America Products. Buyer shall purchase the following Products from Supplier, each
of which must be manufactured to the required Specifications:

 

	Product	 	Specifications	 	Exhibit
	***	 	***	 	C-1
	***	 	***	 	C-2
	***	 	***	 	C-3
	***	 	***	 	C-4
	***	 	***	 	C-5

 

		B.	Product Price.

 

		1)	Tolling Fee - Cores. For Corroding or soft lead Battery Grade Product purchased by Buyer
from Raw Materials that are cores, the price shall be ***, subject to the *** provisions of Section 5.5 of the Agreement.

 

		2)	Tolling Fee - Plant Scrap. For Corroding or soft lead Battery Grade Product purchased by
Buyer from Raw Materials other than cores, the price set shall be ***, subject to the *** provisions of Section 5.5 of the Agreement.

 

		3)	Poly Chips from Tolling Services. Poly Chips from the Tolling Services shall be returned
at *** per MT of lead. Buyer may also purchase additional Poly Chips at a mutually agreed upon price.

 

		4)	Products from non-Tolling Services. The price paid by Buyer per metric ton of Corroding
or soft lead Battery Grade Product shall be *** or equivalent price for lead. For example, ***.

 

		5)	Lead Alloys from Tolling Services or non-Tolling Services. To the extent any of the Product,
whether from Tolling Services or otherwise, is in alloyed form (e.g., lead containing antimony, calcium, selenium, tin, etc.),
the following additional fees shall apply:

 

		a)	***;

		b)	***;

		c)	***;

		d)	***;

		e)	***

 

 

***Text has been omitted pursuant to Registrant’s
confidential treatment request filed with the Securities and Exchange Commission (“Commission”) pursuant to Rule 24b-2
under the Securities Exchange Act of 1934.  The omitted text has been filed separately with the Commission.

 

    	 	Exhibit A-1-1	 

     

    

 

C.           Volume.

 

		1.	Lead. Unless Buyer timely elects not to purchase
some or all of the Covered Lead as set forth, below, Buyer will purchase and Supplier will sell 100% of all Covered Lead (as defined
below) from Supplier’s Facility that Supplier produces above the tolling output from the Raw Materials as set forth in this
Agreement. The term “Covered Lead” means all lead produced by Supplier for “automotive+ applications”,
and excluding industrial storage and forklift battery applications. The term “automotive+ applications” means all
battery applications for the automotive or vehicular transportation industry, to include cars, trucks, buses, marine, golf carts,
etc., subject to the above-referenced exclusions. If for any reason Buyer does not purchase the Covered Lead, Supplier shall be
free to sell that Covered Lead on the open market. Buyer must notify Supplier of its intent not to purchase the full amount of
the Covered Lead at least 6 months in advance of the scheduled production date in order to allow Supplier adequate time to find
an alternate outlet for the lead sales. If Buyer does not purchase the Covered Lead it is obligated to purchase, and Seller has
to find an alternative buyer for the Covered Lead, then Buyer shall pay for the difference in the sale price of that Covered Lead
and Buyer’s price if the sale price was lower than Buyer’s price. All of Buyer’s obligations to purchase Covered
Lead are contingent on the lead meeting quality and specifications set forth in Exhibit C.

 

		2.	Annual Raw Materials Tolling. Buyer will supply
Supplier with Raw Materials to support the equivalent minimum of *** metric tons of lead purchases annually pursuant to the Tolling
Services and Supplier shall prioritize its resources and manufacturing capacity at its Facility to ensure that it provides Tolling
Services to Buyer for the minimum *** metric tons of lead purchases annually on a priority basis over Tolling Services for any
other raw materials it receives. Supplier shall have no obligation to process under its Tolling Services excess of Raw Materials
to support the equivalent minimum of *** metric tons of lead purchases annually except as Supplier may agree to increases in such
amount as provided below. The parties shall confer and take commercially reasonable efforts to mutually agree on or before September
30 of each year during the Term to finalize incremental annual and monthly increases in Raw Materials volumes for the following
year (i.e., above *** metric tons of lead purchases annually). All volume commitments relating to the supply of Raw Materials
are contingent on the lead meeting quality and specifications required by Buyer and set forth in Exhibit C.

 

 

***Text has been omitted pursuant to Registrant’s
confidential treatment request filed with the Securities and Exchange Commission (“Commission”) pursuant to Rule 24b-2
under the Securities Exchange Act of 1934.  The omitted text has been filed separately with the Commission.

 

    	 	Exhibit A-1-2	 

     

    

 

		3.	Monthly Raw Materials Supply to Seller from Buyer.
Buyer will send to Supplier for Tolling Services 1/12 of the annual tonnage initially set at *** MT of Lead +1- 15% monthly during
the term of the Agreement and Supplier will provide Tolling Services to said amounts.

 

[SIGNATURE PAGE FOLLOWS]

 

 

***Text has been omitted pursuant to Registrant’s
confidential treatment request filed with the Securities and Exchange Commission (“Commission”) pursuant to Rule 24b-2
under the Securities Exchange Act of 1934.  The omitted text has been filed separately with the Commission.

 

    	 	Exhibit A-1-3	 

     

    

 

IN WITNESS WHEREOF, the
Parties have executed this Exhibit A-1 as of this 7th day of February 2017.

 

	 	AQUA METALS, INC.
	 	 
	 	By:	 
	 	Name:	Dr. Stephen R. Clarke
	 	Title:	Chairman and CEO
	 	 	 
	 	JOHNSON CONTROLS BATTERY GROUP, INC.
	 	 
	 	By:	 
	 	Name:	 
	 	Title:	 

 

    	 	Exhibit A-1-4	 

     

    

 

Exhibit
A-2

 

EUROPE
TOLLING SERVICES AND PRODUCT PURCHASES

 

Reserved — to be completed by mutual
agreement of the Parties at a later date.

 

IN WITNESS WHEREOF, the
Parties have executed this Exhibit A-2 as of [Date].

 

	 	AQUA METALS, INC.
	 	 	 
	 	By:	 
	 	Name:	 
	 	Title:	 
	 	 	 
	 	[JCI Affiliate]
	 	 	 
	 	By:	 
	 	Name:	 
	 	Title:	 

 

    	 	Exhibit A-2-1	 

     

    

 

Exhibit
A-3

 

CHINA
TOLLING SERVICES AND PRODUCT PURCHASES

 

Reserved — to be completed by mutual
agreement of the Parties at a later date.

 

IN WITNESS WHEREOF, the
Parties have executed this Exhibit A-3 as of [Date].

 

	 	AQUA METALS, INC.
	 	 	 
	 	By:	 
	 	
        Name: 
	 
	 	
        Title: 
	 
	 	 	 
	 	[JCI Affiliate]
	 	 	 
	 	By:	 
	 	Name:	 
	 	Title:	 

 

    	 	Exhibit A-3-1	 

     

    

 

EXHIBIT
B

 

BUYER’S
MATERIALS

 

1.          Raw
Materials. On a consignment basis, Buyer will deliver to Supplier those certain raw materials listed and further described
on Schedule B1 necessary for the production of tolled Products (the “Raw Materials”). If Buyer
is unable to deliver the Raw Materials necessary for Supplier to produce tolled Products under this Agreement, Supplier shall continue
to supply Products to Buyer, and Buyer shall replenish Supplier’s stock of Raw Materials within thirty (30) days.

 

2.          Recovery
and Assay. The Parties agree that the returnable quantity of tolled Products to Buyer from Raw Materials through the Tolling
Services of Supplier shall be at the agreed upon assay as per SCHEDULE B1.

 

3.          Title.
Title to Raw Materials, work in progress, and tolled Products shall remain in Buyer. Supplier acknowledges Buyer’s title
to the Raw Materials, work in process, tolled Products and poly chips. Supplier agrees to protect Raw Materials, work in process,
tolled Product and poly chips and keep them free from pledge, hypothecation, assignment or transfer to third parties without Buyer’s
written consent. Supplier will not take any action which will subject the Raw Materials, work in process or tolled Products to
a claim of a third party. Supplier hereby grants Buyer a security interest in the Raw Materials. If requested by Buyer, Supplier
agrees to execute a Security Agreement in a form acceptable to Buyer.

 

4.          Risk
of Loss. Supplier assumes full responsibility and risk for any loss or damage to the Raw Materials, work in progress and tolled
Products while the same are in the possession of Supplier. Supplier agrees that Raw Materials delivered to Supplier’s Facility
will be used solely and exclusively for the purpose of Buyer’s tolled Products and will not be used for any other purpose
or customers of Supplier. if Raw Materials are used by Supplier for purposes other than supplying tolled Products to Buyer, without
Buyer’s prior written authorization, or Raw Materials are lost or destroyed prior to processing, Supplier will replace such
Raw Materials or reimburse Buyer for the full value of the lead in the Raw Materials (“Value”) based upon the
prior month’s Metal Bulletin (“MB”) or equivalent price for lead plus the high range of the monthly premium
published by Metals Bulletin for the region or Buyer’s actual cost of purchase an equivalent amount of Product, whichever
is greater.

 

5.          Inventory
and Records. Supplier shall weigh, issue a receipt to Buyer for, and physically segregate all Raw Materials, work in process
and tolled Products from all other products stored at Supplier’s premises. Supplier shall further keep account and records
of the quantities and inventories of tolled Products, work in process and Raw Materials on hand. Supplier shall furnish Buyer with
weekly inventory statements (in a mutually agreed format) which shall include a count of all Products on hand and an account of
the tolled Products produced and shipped since the immediately preceding report. Supplier shall also answer normal requests from
Buyer relating to inventory and manufacturing schedules. Subject to Buyer’s right to audit in this Agreement, Supplier will
maintain adequate books and records thereof, including any records which may be required under the local, state and federal rules,
statutes, laws, ordinances and regulations.

 

    	 	Exhibit B-1	 

     

    

 

6.             Delivery.
Unless otherwise agreed to by Buyer and Supplier in writing, delivery of Raw Materials to the Supplier’s Facility shall be
made during the same four (4) hour window, between 7:00 am and 7:00 pm, local time, Monday through Friday and excluding all federal
holidays (each such day, a “Business Day”). If Buyer completes a delivery on a day other than a Business Day
or outside the stated four (4) hour window pursuant to an agreement between Buyer and Supplier, in addition to the applicable purchase
price, Buyer shall incur and pay all additional and incremental costs incurred by Supplier associated with such delivery, which
costs shall be included in the relevant invoice. All shipments of Raw Material shall be f.o.b. the Supplier’s Facility, at
which point the risk of loss for such Raw Materials will pass to the Supplier Upon delivery to Supplier’s Facility, Supplier
shall use its commercially reasonable best efforts to promptly unload the Raw Materials. In the event Supplier delays the unloading
beyond two (2) hours, Buyer will charge Supplier any late fee that is charged by the freight carrier. Empty trailers/containers
should be used for the delivery of tolled Products. Supplier shall also return all pallets used to deliver Raw Materials when shipping
tolled Products to Buyer. Supplier shall pay the cost of replacing any pallets that it fails to return, and any pallets returned
in a damaged or otherwise unusable condition.

 

7.             No
Transfer Off-Site. Supplier agrees that none of the Raw Materials, including the metal and metalloid content, poly scrap, indigenous
material, in process material and finished Products and poly chips delivered by or for Buyer to Supplier’s Facility will
be transferred to any location outside of Supplier’s Facility to a third-party or otherwise for any treatment, storage, disposal,
processing or for any other reason without Buyer’s prior written consent. If any Raw Materials, including its metal and metalloid
content, poly scrap, indigenous material, in process material and tolled Product and poly chips, or if any wastes generated from
the use, management or storage of Raw Materials, are transferred outside Supplier’s plant in violation of this Agreement,
Supplier shall indemnify and defend Buyer from and against any and all claims arising against Buyer and/or any Indemnitees, as
set forth in Section 8.1 of the Agreement.

 

8.             Management
of Raw Materials and Wastes.

 

(a)          Supplier
shall carefully manage all Raw Materials while in Supplier’s possession, including all wastes resulting from the use, management
or storage of Raw materials, in a manner that prevents the release of any Raw Materials to the environment. In the event of any
such release of Raw Materials in Supplier’s possession into the environment, Supplier shall be solely responsible for immediately
responding to such release, providing any notifications required to governmental agencies, and conducting such remedial actions
as are necessary to eliminate the impacts of such release on the environment. Supplier shall provide prompt notice to Buyer of
any release incident that requires notification to a governmental agency. If any such release of Raw Materials occurs, Supplier
shall indemnify and defend Buyer from and against any and all claims arising therefrom against Buyer and/or any Indemnitees, as
set forth in Section 8.1 of the Agreement.

 

(b)          Supplier
shall minimize the generation of any wastes arising from the use, management or storage of Raw Materials. No wastes generated from
the use, management or storage of Raw Materials will be transferred to any location outside of Supplier’s Facility to a third-party
or otherwise for any treatment, storage, disposal, processing or for any other reason without Buyer’s prior written consent.
If any wastes generated from the use, management or storage of Raw Materials are transferred outside Supplier’s plant in
violation of this Agreement, Supplier shall indemnify and defend Buyer from and against any and all claims arising therefrom against
Buyer and/or any Indemnitees, as set forth in Section 8.1 of the Agreement.

 

    	 	Exhibit B-2	 

     

    

 

9.             Effect
of Termination. Upon the expiration or termination of this Agreement for any reason, at Buyer’s election:

 

(a)          Supplier
shall process the remaining Raw Materials in its inventory and ship in the form of tolled Product at the price set out in Exhibit
A, or

 

(b)          If
Supplier is unable to process the Raw Materials remaining in its inventory on account of Buyer due to Bankruptcy, a Force Majeure
Event or any other reason, Supplier will make arrangements to properly package all remaining Buyer Raw Materials inventory and
allow Buyer to pick up such inventory from Supplier, or

 

(c)          To
the extent that Supplier is unable to return or process the Raw Materials remaining in its inventory, Supplier shall reimburse
Buyer for the full value of the Raw Materials based on LME Settlement for the month plus any premium that Buyer paid to obtain
the Raw Materials.

 

    	 	Exhibit B-3	 

     

    

 

SCHEDULE
B1

 

Raw Materials/Recovery and Assay

 

RAW MATERIALS AND RECOVERY:

 

	Lead Bearing Material	 	Yield
	Cores	 	 
	1)     Automotive Cores wet	 	***
	2)     Industrial Cores wet	 	***
	3)     Dry Automotive Batteries with Covers	 	***
	4)     Dry Automotive Batteries without Covers	 	***
	Plants Scrap	 	***
	1)     Casting Dross - Calcium	 	***
	2)     Casting Dross - W45 — ASTP	 	***
	3)     Casting Dross - Pure Lead	 	***
	4)     Casting Dross - Mixed Alloy	 	***
	5)     Casting Dross - GU3	 	***
	6)     Lead Oxide	 	***
	7)     Paste Scrap	 	***
	8)     Grids	 	***
	9)     Plates	 	***
	10)   Dust (Baghouse & Radco)	 	***
	11)   Bushings	 	***
	12)   Jumper Cables	 	***

 

BUYER’S PALLETS: Supplier agrees to return
all the pallets on which Raw Material was shipped by the Buyer to Buyer’s designated carrier or authorized recycler. Supplier
shall make best efforts to minimize any damage to the pallets at its Facility.

 

 

***Text has been omitted pursuant to Registrant’s
confidential treatment request filed with the Securities and Exchange Commission (“Commission”) pursuant to Rule 24b-2
under the Securities Exchange Act of 1934.  The omitted text has been filed separately with the Commission.

 

    	 	Exhibit B1-1	 

     

    

 

EXHIBIT
C

 

PRODUCT
SPECIFICATIONS

 

	Product	 	Specifications	 	Exhibit
	***	 	
        JCBGI MATERIAL SPECIFICATION

        ***
	 	C-1
	***	 	
        JCBGI MATERIAL SPECIFICATION

        ***
	 	C-2
	***	 	
        JCBGI MATERIAL SPECIFICATION

        ***
	 	C-3
	***	 	
        JCI MATERIAL SPECIFICATION

        ***
	 	C-4
	***	 	
        JCI MATERIAL SPECIFICATION

        ***
	 	C-5

 

 

***Text has been omitted pursuant to Registrant’s
confidential treatment request filed with the Securities and Exchange Commission (“Commission”) pursuant to Rule 24b-2
under the Securities Exchange Act of 1934.  The omitted text has been filed separately with the Commission.

 

    	 	Exhibit C-1	 

     

    

 

JCBGI MATERIAL SPECIFICATION

***

 

Date approved: ***

Date superseded: New

 

		1.	Material

***

 

		2.	Definition

Johnson Controls Battery Group Inc. (JCBGI) includes all affiliated entities,

 

		3.	Responsibility

The responsibility of maintaining and updating the material specifications is JCBGI which is headquartered in Milwaukee, Wisconsin,
Glendale facility, USA.

 

		4.	Application or Use

***

 

		5.	Specification Limits

Note: This symbol (◑) or (◊) or (□) on this Material
Specification or applicable drawing denote a characteristic that must be on the Control Plan and capability data available for
review by the XI Supplier Quality.

 

		5.1	Chemical composition (% by weight)

 

		5.1.1	Approved Supplier Lot Certification.

 

	Element	 	Max. % Wt.	 	Max. ppm
	***	 	***	 	***
	***	 	***	 	***
	***	 	***	 	***
	***	 	***	 	***
	***	 	***	 	***
	***	 	***	 	***
	***	 	***	 	***
	***	 	***	 	***
	***	 	***	 	***
	***	 	***	 	***
	***	 	***	 	***
	***	 	***	 	***
	***	 	***	 	***

 

 

***Text has been omitted pursuant to Registrant’s
confidential treatment request filed with the Securities and Exchange Commission (“Commission”) pursuant to Rule 24b-2
under the Securities Exchange Act of 1934.  The omitted text has been filed separately with the Commission.

 

    	 	1	 

     

    

 

		5.1.2	To qualify the materials must meet the following material
requirements for chemical composition, plus 5.1.1 elements

 

	Element	 	Max. % Wt.	 	Max. ppm
	***	 	***	 	***
	***	 	***	 	***
	***	 	***	 	***
	***	 	***	 	***
	***	 	***	 	***
	***	 	***	 	***
	***	 	***	 	***

 

		6.	Supplier Responsibilities

 

		6.1	Quality Requirements

 

		6.1.1	Certificate of Analysis (COA) - Each shipment shall
include a COA all of the elements listed in section 5.1.1. Actual test values must be in compliance with the stated specification
limits. A copy of each COA shall be emailed to:

ps-supplier-quality@jci.com

 

		6.2	New Supplier/Process Qualification

 

		6.2.1	All new suppliers or new processes to be introduced by
existing suppliers must be qualified before any material can be shipped to a manufacturing plant for use in production product.
Such qualification must be approved by the applicable JCBGI change approval authority.

 

		6.3	Sample Submission

 

		6.3.1	In order to verify the lead manufacturers continuing compliance
as an approved vendor, it is the responsibility of the Supplier to:

 

		6.3.1.1	Select a random sample representing one lot from each month’s
production for JCBGI. Submit this sample monthly to: JCBGI ASS Lab, Ave. Eugenio Garza Sada 3431 Sur, Col Arrollo Seco, Monerrey,
N.L. Mex 64740.

 

		6.3.1.1.1	This sample should be identified as “Monthly Sample”
indicating date of production, lot number and supplier’s contact information. The analysis of this sample shall be per table
5.1.1 and 5.1.2.

 

 

***Text has been omitted pursuant to Registrant’s
confidential treatment request filed with the Securities and Exchange Commission (“Commission”) pursuant to Rule 24b-2
under the Securities Exchange Act of 1934.  The omitted text has been filed separately with the Commission.

 

    	 	2	 

     

    

 

		6.3.2	For vendors outside the Americas, it is acceptable to submit
this monthly sample to a regional / local JCI approved laboratory. The results shall be kept in a log file and submitted to JCBGI:
ps-supplier-quality@jci.com

 

		6.4	Retention Samples

 

		6.4.1	The supplier must maintain a test sample representing each
lot of lead produced for JCBGI for a period of three months.

 

		7.	Shipping Instructions

 

		7.1	Shipping to meet International Transportation Guidelines,
Customs and Regulations.

 

		7.1.1	Strapping method. The ingots are stacked in a pile/bundle/pig
and tied together with belts (plastic if possible), on both sides of the bundle.

 

		7.1.2	All shipments must be secured to prevent damage during
transportation as applicable per local requirements.

 

		7.2	Material Identification

 

		7.2.1	Each block or bundle will be identified with the supplier’s
lot number.

 

		7.2.2	Each block or bundle will be painted with a clearly visible
“PINK” stripe, or a “PINK” identification marking, unless approved in writing by JCBGI.

 

		7.3	General Requirements

 

		7.3.1	Lead processability and cleanliness will be a factor in
the final determination of material acceptance. Special storage conditions could be required to meet with this condition In vendor
locations with severe/extreme weather or contamination can occur.

 

		8.	Document Change Summary

 

	Revision Date	 	Section	 	Change Order	 	Description
	***	 	***	 	***	 	***

 

 

***Text has been omitted pursuant to Registrant’s
confidential treatment request filed with the Securities and Exchange Commission (“Commission”) pursuant to Rule 24b-2
under the Securities Exchange Act of 1934.  The omitted text has been filed separately with the Commission.

 

    	 	3	 

     

    

  

*PROPRIETARY AND CONFIDENTIAL*

 

PROPERTY OF JCBGI

 

Printed documents are controlled copies
that are valid for date printed at bottom of each page.

 

Copyright © 2003 Johnson Controls Inc.

 

    	 	4	 

     

    

 

JCBGI MATERIAL SPECIFICATION

***

 

Date effective: ***

Date approved: ***

Date superseded: ***

 

		1.	Material

***

 

		2.	Definition

Johnson Controls Battery Group Inc. (JCBGI) includes all affiliated entities.

 

		3.	Responsibility

The responsibility of maintaining and updating the material specifications is JCBGI which is headquartered in Milwaukee Wisconsin,
Glendale facility, USA.

 

		4.	Application or Use 

***

 

		5.	Specification Limits

Note: This symbol (K) or (◑) or (◊) on this Material
Specification denotes a characteristic that must be on the Control Plan and capability reported to SQM on a quarterly basis.

 

		5.1	Chemical composition (% by weight)

 

		5.1.1	Approved Supplier Lot Certification. Supplier must target
specified nominal values as demonstrated by statistics.

 

	Element (K)	 	% Spec. Limits (ppm)
	***	 	***
	***	 	***
	***	 	***
	***	 	***
	***	 	***
	***	 	***
	***	 	***
	***	 	***

 

 

***Text has been omitted pursuant to Registrant’s
confidential treatment request filed with the Securities and Exchange Commission (“Commission”) pursuant to Rule 24b-2
under the Securities Exchange Act of 1934.  The omitted text has been filed separately with the Commission.

 

    	 	1	 

     

    

 

		5.1.2	To qualify the materials must meet the following material
requirements for chemical composition

 

	Element	 	Of Spec. Limits (ppm)
	***	 	***
	***	 	***
	***	 	***
	***	 	***
	***	 	***
	***	 	***
	***	 	***
	***	 	***
	***	 	***
	***	 	***
	***	 	***
	***	 	***
	***	 	***
	***	 	***
	***	 	***
	***	 	***
	***	 	***
	***	 	***

 

		6.	Supplier Responsibilities

 

		6.1	Sample Submission

 

		6.1.1	The Battery Supplier Quality group will request a test
sample quarterly to verify the Supplier’s continuing compliance as an approved supplier. To support this re-qualification
procedure the Supplier must maintain a test sample of approximately 600 grams representing each lot of lead produced for JCBGI
for a period of three months. Specific instructions on how and when to submit the samples will be provided with the sample request.
No routine submission of samples is required unless specifically requested by Johnson Controls, Inc., Purchasing or Quality.

 

 

***Text has been omitted pursuant to Registrant’s
confidential treatment request filed with the Securities and Exchange Commission (“Commission”) pursuant to Rule 24b-2
under the Securities Exchange Act of 1934.  The omitted text has been filed separately with the Commission.

 

    	 	2	 

     

    

 

		6.2	Quality Requirements

 

		6.2.1	Quality Assurance of all material delivered to JCBGI is
the responsibility of the supplier. The supplier must have a quality control program adapted to their manufacturing process and
capable of ensuring that delivered materials consistently meet the specification requirements of JCBGI. The approach taken in
the program shall follow the guidelines contained in the JCBGI Quality Operating Procedure, QOP-06-01.

 

		6.2.2	Delivery - Suppliers shall meet 100% on-time delivery performance.
The standard shall be based upon mutually agreed upon delivery established by the supplier and JCBGI.

 

		6.2.3	Nonconforming materials - The supplier must immediately
advise Johnson Controls Purchasing Department in the event of a non-conformance condition. Action may be taken by Johnson Controls
Purchasing Department to authorize shipment under a temporary written deviation. Failure to obtain an approved written deviation
of nonconforming material shipped to a Johnson Controls facility shall result in the supplier being removed from the Approved
Supplier List.

 

		6.2.4	Certificate of Compliance - The supplier shall submit a
Product Certification of Compliance with each shipment. The certificate may be sent directly to the Quality Manager of the receiving
Johnson Controls plant or enclosed with shipment. It shall state the material shipped is in compliance with the material specification
and shall be signed by the responsible supplier representative. It shall include actual test data as applicable.

 

		6.3	Material Characteristics or Formulation Changes

 

		6.3.1	Any formulation or process change that changes the operating
or functional characteristics of the suppliers product must be preceded by written notification to JCBGI-SLI, Purchasing. This
notification must be made at least 60 days, and preferably 90 days in advance of the proposed shipping date. Any exceptions to
notification dates must be approved by JCBGI. Notification must be accompanied by a representative sample(s) for testing and analysis.
Approval to run rests on test results. Failure of supplier to comply with the above procedure may result in either temporary or
permanent removal from the Approved Supplier List.

 

		6.3.2	Product Verification - JCBGI retains the right to verify
purchased product at the Supplier’s facility to ensure specification compliance.

 

Customers of Johnson Controls may verify purchased product
at the Supplier’s facility to ensure that purchased product Is manufactured to specification.

 

In addition, any attributes of the material not specifically
covered in this specification that shall render It nonfunctional in Johnson Controls Battery Groups’ processing will be cause
for rejection. The ultimate disposition of the material in question will be processed per Johnson Controls Battery Groups’
existing SNR procedure.

 

		6.3.3	The supplier shall maintain an up to date copy of a Material
Safety Data Sheet (MSDS sheet) for the materials that are supplied under this JCI material specification.

 

    	 	3	 

     

    

 

		6.3.4	The supplier should be capable of showing evidence of continuing
control through the use of recognized statistical process control techniques and submit evidence to JCBGI Quality Assurance on
a quarterly basis.

 

		6.4	New Supplier/Process Qualification

 

		6.4.1	All new suppliers or new processes to be introduced by
existing suppliers must be qualified before any material can be shipped to a manufacturing plant for use in production product.
Such qualification must be covered by a Specification Change Order (SCO) with the approval of Manufacturing, Engineering and Quality
Assurance.

 

		7.	Shipping Instructions

 

		7.1	Shipping to meet International Transportation Guidelines,
Customs and Regulations.

 

		7.1.1	Strapping method. The Ingots are stacked in a pile/bundle/pig
and tied together with plastic belts (if possible), on both sides of the bundle.

 

		7.2	Material Identification

 

		7.2.1	Each ingot (hog/pig) will be Identified as lead type “CSC”.

 

		7.2.2	Each block or bundle will be identified with the suppliers
lot number.

 

		7.2.3	Each block or bundle will be painted with a clearly visible
“Red/White” stripes.

 

		7.2.4	Each shipment will be accompanied by two copies of the
3CI Lead Certification form with all required information completed (see Appendix A). Actual test values must be in compliance
with the stated specification limits. The form must be signed by the Supplier’s representative. Shipments received without
a properly completed certification form will be rejected. After receipt of the lead the 3a plant will send one copy of the certification
form to Milwaukee Supplier Quality.

 

		7.3	General Requirements

 

		7.3.1	Lead processability and cleanliness will be a factor in
the final determination of material acceptance,

 

    	 	4	 

     

    

 

		8.	Document Change Summary

 

	Revision Date	 	Section	 	Change Order	 	Description
	***	 	***	 	***	 	***
	***	 	***	 	***	 	***
	***	 	***	 	***	 	***
	***	 	***	 	***	 	***
	***	 	***	 	***	 	***

 

*PROPRIETARY AND CONFIDENTIAL*

 

PROPERTY OF JCBGI

 

Printed documents are controlled copies
that are valid for date printed at bottom of each page.

 

Copyright © 2003 Johnson Controls Inc.

 

 

***Text has been omitted pursuant to Registrant’s
confidential treatment request filed with the Securities and Exchange Commission (“Commission”) pursuant to Rule 24b-2
under the Securities Exchange Act of 1934.  The omitted text has been filed separately with the Commission.

 

    	 	5	 

     

    

 

Appendix
A

 

Lead
Certification Form

 

	Supplier Name	 	 	Location	 
	 	 	 	 	 
	Lead Type:  ***                  *** 	 	 	Date: *** 
	 	 	 	 	 
	Supplier Lot No:	 	 	Date Poured:	 

  

MATERIAL REQUIREMENTS:

 

	Element (K)	 	% Spec. Limits (ppm)	 	ACTUAL VALUE
	***	 	***	 	 
	***	 	***	 	 
	***	 	***	 	 
	***	 	***	 	 
	***	 	***	 	 
	***	 	***	 	 
	***	 	***	 	 
	***	 	***	 	 

 

I certify that the above values are correct
and that this material is in compliance with the referenced Johnson Controls, Inc. Material Specification.

  

	Signed	 	 	Title	 

 

 

***Text has been omitted pursuant to Registrant’s confidential
treatment request filed with the Securities and Exchange Commission (“Commission”) pursuant to Rule 24b-2 under the
Securities Exchange Act of 1934.  The omitted text has been filed separately with the Commission.

 

    	 	Appendix A-1	 

     

    

 

JCBGI MATERIAL SPECIFICATION

***

 

Date approved: ***

Date superseded: ***

 

		1.	Material

***

 

		2.	Definition

Johnson Controls Battery Group Inc. (JCBGI) includes all affiliated entities

 

		3.	Responsibility

The responsibility of maintaining and updating the material specifications is JCBGI which is headquartered in Milwaukee, Wisconsin,
Glendale facility, USA.

 

		4.	Application or Use

***

 

		5.	Specification Limits

Note: This symbol (◑) or (◊) or (□) on this Material
Specification and/or applicable drawing, denotes a characteristic that must be on the Control Plan and available for review by
the JCBGI Supplier Quality.

 

		5.1	Chemical composition (% by weight and ppm)

 

		5.1.1	Supplier must target specified nominal values as demonstrated
by statistics

 

	Element	 	Approved Supplier Lot 

Certification
	***	 	***
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***Text has been omitted pursuant to Registrant’s confidential
treatment request filed with the Securities and Exchange Commission (“Commission”) pursuant to Rule 24b-2 under the
Securities Exchange Act of 1934.  The omitted text has been filed separately with the Commission.

 

    	 	1	 

     

    

 

		5.1.2	To qualify the materials must meet the following material
requirements for chemical composition plus elements in Section 5.1.1

 

	Element	 	Specification Limits
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		6.	Supplier Responsibilities

 

		6.1	Quality Requirements

 

		6.1.1	Certificate of Analysis (COA) - The Supplier shall
submit a Product Certification of Analysis with each shipment and it shall include all elements listed in Section 5.1.1. The certificate
may be sent directly to the Quality Manager of the receiving JCBGI Plant or enclosed with shipment, and a copy e-mailed to PS-Supplier-Quality@jci.com

 

		6.2	New Supplier/Process Qualification

 

		6.2.1	All new Suppliers or new processes to be introduced by
existing Suppliers must be qualified before any material can be shipped to a manufacturing plant for use in production product.
Such qualification must be approved by the applicable JCBGI change approval authority.

 

		6.2.2	In order to verify the Supplier’s continuing compliance
as an approved vendor, it is the responsibility of the Supplier to:

 

		6.2.2.1	Select a random sample representing one lot from each month’s
production for JCBGI. Submit this sample monthly to: JCI ASD Lab, Av. Eugenio Garza Sada 3431 Sur, Col Arrollo Seco, Monterrey,
N.L. Mex. 64740

 

		6.2.2.2	This sample should be identified as “Monthly Sample”
indicating date of production, lot number and supplier’s contact information.

 

 

***Text has been omitted pursuant to Registrant’s confidential
treatment request filed with the Securities and Exchange Commission (“Commission”) pursuant to Rule 24b-2 under the
Securities Exchange Act of 1934.  The omitted text has been filed separately with the Commission.

 

    	 	2	 

     

    

 

		6.2.3	For Vendors outside the Americas, it is acceptable to submit
this monthly sample to a regional / local JCBGI approved laboratory. The results shall be kept In a log file and submitted to
PS-Supplier-Quality@jci.com

 

		6.2.3.1	This sample should be identified as “Monthly Sample”
Indicating date of production, lot number and Supplier’s contact information. The analysis of this sample shall be per tables
5.1.1 and 5.1.2

 

		6.3	Retention Samples

 

		6.3.1	The Supplier must maintain a test sample representing each
lot of lead produced for JCBGI for a period of three months.

 

		7.	Shipping Instructions

 

		7.1	Shipping to meet International Transportation Guidelines,
Customs and Regulations.

 

		7.2	Strapping method. The ingots/pigs are stacked in
a pile/bundle and tied together with plastic belts (if possible), on both sides of the bundle.

 

		7.3	Material Identification

 

		7.3.1	Each ingot will be identified as lead type “P3”

 

		7.3.2	Each block or bundle will be identified with the Supplier’s
lot number

 

		7.3.3	Each block or bundle will be painted with a clearly visible
“Black and White Stripes” stripes.

 

		7.3.4	Paint striping identification will be across the top of
the lead hogs.

 

		7.4	General Requirements

 

		7.4.1	Lead processability and cleanliness will be a factor in
the final determination of material acceptance.

 

    	 	3	 

     

    

 

		8.	Document Change Summary

 

	Revision Date	 	Section	 	Change Order	 	Description
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*PROPRIETARY AND CONFIDENTIAL*

 

PROPERTY OF JCBGI

 

Printed documents are controlled copies
that are valid for date printed at bottom of each page.

 

Copyright © 2003 Johnson Controls Inc.

 

 

***Text has been omitted pursuant to Registrant’s
confidential treatment request filed with the Securities and Exchange Commission (“Commission”) pursuant to Rule 24b-2
under the Securities Exchange Act of 1934.  The omitted text has been filed separately with the Commission.

 

    	 	4	 

     

    

 

JCI MATERIAL SPECIFICATION

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Date effective: ***

Date approved: ***

Date superseded: ***

 

		1.	Material

***

 

		2.	Definition

Johnson Controls Inc. (JCI) includes all affiliated entities

 

		3.	Responsibility

The responsibility of maintaining and updating the material specifications is JCI which is headquartered in Milwaukee, Wisconsin,
Glendale facility, USA.

 

		4.	Application or Use

***

 

		5.	Specification Limits

Note: This symbol (◑) or (◊) on this Material Specification
and/or applicable drawing, denotes a characteristic that must be on the Control Plan and available for review by the JO Supplier
Quality.

 

		5.1	Chemical composition (% by weight)

 

		5.1.1	Supplier must target specified nominal values as demonstrated
by statistics

 

	Element	 	Approved Supplier Lot Certification
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	***	 	***

 

 

***Text has been omitted pursuant to Registrant’s
confidential treatment request filed with the Securities and Exchange Commission (“Commission”) pursuant to Rule 24b-2
under the Securities Exchange Act of 1934.  The omitted text has been filed separately with the Commission.

 

    	 	1	 

     

    

 

		5.1.2	To qualify the materials must meet the following material
requirements for chemical composition plus 5.1.1 requirements

 

	Element	 	Specification Limits
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	***	 	***

 

		6.	Supplier Responsibilities

 

		6.1	Quality Requirements

 

		6.1.1	Certificate of Analysis (COA) - Each shipment shall include
a CDA all of the elements listed in section 5.1.1. Actual test values must be in compliance with the stated specification limits.
A copy of each COA shall be emailed to:

PS-Supplier-Quality@jci.com

 

		6.2	New Supplier/Process Qualification

 

		6.2.1	All new Suppliers or new processes to be introduced by
existing Suppliers must be qualified before any material can be shipped to a manufacturing plant for use in production product.
Such qualification must be approved by the applicable JCI change approval authority.

 

		6.3	Sample Submission

 

		6.3.1	In order to verify the Supplier’s continuing compliance
as an approved Vendor, it is the responsibility of the Supplier to:

 

		6.3.1.1	Select a random sample representing one lot from each month’s
production for JCBGI. Submit this sample monthly to: JCBGI ASD Lab, Ave. Eugenio Garza Sada 3431 Sur, Col Arrollo Seco, Monerrey,
N.L. Mex 64740.

 

		6.3.1.2	For vendors outside the Americas, it is acceptable to submit
this monthly sample to a regional / local JO approved laboratory. The results shall be kept in a log file and submitted to JCI:
PS-Supplier-Quality@jci.com

 

		6.3.1.3	This sample should be identified as “Monthly Sample”
indicating date of production, lot number and supplier’s contact information. The analysis of this sample shall be per tables
5.1.1 and 5.1.2

 

 

***Text has been omitted pursuant to Registrant’s confidential
treatment request filed with the Securities and Exchange Commission (“Commission”) pursuant to Rule 24b-2 under the
Securities Exchange Act of 1934.  The omitted text has been filed separately with the Commission.

 

    	 	2	 

     

    

 

		6.4	Retention Samples

 

		6.4.1	The supplier must maintain a test sample representing each
lot of lead produced for XI for a period of three months.

 

		7.	Shipping Instructions

 

		7.1	Shipping to meet International Transportation Guidelines,
Customs and Regulations.

 

		7.1.1	Strapping method. The ingots/pigs are stacked in a pile/bundle
and tied together with plastic belts (if possible), on both sides of the bundle.

 

		7.2	Material Identification

 

		7.2.1	Each ingot will be identified as lead type “Pb-3Se”

 

		7.2.2	Each block or bundle will be identified with the supplier’s
lot number

 

		7.2.3	Each block or bundle will be painted with a clearly visible
“Bright or Neon Blue” stripes

 

		7.3	General Requirements

 

		7.3.1	Lead processability and cleanliness will be a factor in
the final determination of material acceptance.

 

		8.	Document Change Summary

 

	Revision Date	 	Section	 	Change Order	 	Description
	***	 	***	 	***	 	***
	***	 	***	 	***	 	***
	***	 	***	 	***	 	***
	***	 	***	 	***	 	***
	***	 	***	 	***	 	***

 

*PROPRIETARY AND CONFIDENTIAL*

 

PROPERTY OF JCBGI

 

Printed documents are controlled copies
that are valid for date printed at bottom of each page.

 

Copyright © 2003 Johnson Controls Inc.

 

 

***Text has been omitted pursuant to Registrant’s
confidential treatment request filed with the Securities and Exchange Commission (“Commission”) pursuant to Rule 24b-2
under the Securities Exchange Act of 1934.  The omitted text has been filed separately with the Commission.

 

    	 	3	 

     

    

 

JCI MATERIAL SPECIFICATION

***

 

Date approved: ***

Date superseded: ***

 

		1.	Material

***

 

		2.	Definition

Johnson Controls Battery Group Inc, ()CI) includes all affiliated entities

 

		3.	Responsibility

The responsibility of maintaining and updating the material specifications is JCI which is headquartered in Milwaukee, Wisconsin,
Glendale facility, USA,

 

		4.	Application or Use

***

 

		5.	Specification Limits

Note: This symbol (◑) or (◊) or (□) on this Material
Specification and/or applicable drawing, denotes a characteristic that must be on the Control Plan and available for review by
the XI Supplier Quality.

 

		5.1	Chemical composition (% by weight and ppm)

 

		5.1.1	Supplier must target specified nominal values as demonstrated
by statistics

 

	Element	 	Approved Supplier Lot Certification
	***	 	***
	***	 	***
	***	 	***
	***	 	***
	***	 	***
	***	 	***
	***	 	***
	***	 	***
	***	 	***
	***	 	***

 

 

***Text has been omitted pursuant to Registrant’s
confidential treatment request filed with the Securities and Exchange Commission (“Commission”) pursuant to Rule 24b-2
under the Securities Exchange Act of 1934.  The omitted text has been filed separately with the Commission.

 

    	 	1	 

     

    

  

		5.1.2	To qualify the materials must meet the following material
requirements for chemical composition plus elements in Section 5.1.1

 

	Element	 	Specification Limits
	***	 	***
	***	 	***
	***	 	***
	***	 	***
	***	 	***
	***	 	***
	***	 	***
	***	 	***

 

		6.	Supplier Responsibilities

 

		6.1	Quality Requirements

 

		6.1.1	Certificate of Analysis (COA) - The Supplier shall
submit a Product Certification of Analysis with each shipment and it shall include all elements listed in Section 5.1.1. The certificate
may be sent directly to the Quality Manager of the receiving JCI Plant or enclosed with shipment, and a copy e-mailed to PS-Supplier-Quality@jci.com

 

		6.2	New Supplier/Process Qualification

 

		6.2.1	All new Suppliers or new processes to be introduced by
existing Suppliers must be qualified before any material can be shipped to a manufacturing plant for use in production product.
Such qualification must be approved by the applicable JCL change approval authority.

 

		6.2.2	In order to verify the Supplier’s continuing compliance
as an approved vendor, it is the responsibility of the Supplier to:

 

		6.2.2.1	Select a random sample representing one lot from each month’s
production for JCI. Submit this sample monthly to: ASD Global Lab. Johnson Controls, Ave. del Parque No. 2155 Monterrey Technology
Park. Cienega de Flores, Mex CP 65550. This sample should be identified as “Monthly Sample” indicating date of production,
lot number and supplier’s contact information.

 

		6.2.3	For Vendors outside the Americas, it is acceptable to submit
this monthly sample to a regional / local JCI approved laboratory. The results shall be kept in a log file and submitted to PS-Supplier-Quality@jci.com

 

 

***Text has been omitted pursuant to Registrant’s
confidential treatment request filed with the Securities and Exchange Commission (“Commission”) pursuant to Rule 24b-2
under the Securities Exchange Act of 1934.  The omitted text has been filed separately with the Commission.

 

    	 	2	 

     

    

  

		6.2.3.1	This sample should be identified as “Monthly Sample”
indicating date of production, lot number and Supplier’s contact information. The analysis of this sample shall be per tables
5.1.1 and 5.1.2

 

		6.3	Retention Samples

 

		6.3.1	The Supplier must maintain a test sample representing each
lot of lead produced for JCI for a period of three months.

 

		7.	Shipping Instructions

 

		7.1	Shipping to meet International Transportation Guidelines,
Customs and Regulations.

 

		7.2	Strapping method. The ingots/pigs are stacked in
a pile/bundle and tied together with plastic belts (if possible), on both sides of the bundle.

 

		7.3	Material Identification

 

		7.3.1	Each ingot will be identified as lead type “P7”

 

		7.3.2	Each block or bundle will be Identified with the Supplier’s
lot number

 

		7.3.3	Each block or bundle will be painted with a clearly visible
“Green and White”.

 

		7.3.4	Paint striping identification will be across the top of
the lead blocks and bundles.

 

		7.4	General Requirements

 

		7.4.1	Lead process ability and cleanliness will be a factor in
the final determination of material acceptance.

 

		8.	Document Change Summary

 

	Draft Revision Date	 	Section	 	Change Order	 	Description
	***	 	***	 	***	 	***
	***	 	***	 	***	 	***

 

*PROPRIETARY AND CONFIDENTIAL*

 

PROPERTY OF JCBGI

 

Printed documents are controlled copies
that are valid for date printed at bottom of each page.

 

Copyright © 2003 Johnson Controls Inc.

 

 

***Text has been omitted pursuant to Registrant’s
confidential treatment request filed with the Securities and Exchange Commission (“Commission”) pursuant to Rule 24b-2
under the Securities Exchange Act of 1934.  The omitted text has been filed separately with the Commission.

 

    	 	3

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