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  Exhibit 10.26    
    

Confidential
Materials omitted and filed separately with the

Securities and Exchange Commission. Asterisks denote omissions. 

 CO-OPERATIVE DEVELOPMENT & SUPPLY AGREEMENT  

This
Co-operative Development & Supply Agreement ("Agreement") is hereby entered into between:

A123 Systems, Inc.

8 Saint Mary's Street

6th Floor

Boston, MA 02215

("A123") 

and 

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

701 East Joppa Road 

Towson, MD 21286, USA 

("B&D") 

(each
a "Party" and collectively the "Parties") 

The
effective date of this Agreement shall be September 15, 2004 (the "Effective Date"). 

In
consideration of the mutual covenants and promises contained herein, and for other good and valuable consideration, the Parties agree as follows: 

PROJECT 

        Lithium-Ion Cells—A123 has developed and manufactured a lithium-ion cell, which A123 and B&D believe
can be newly developed into a design which is commercially acceptable to B&D. 

        1.1    Development    Accordingly, B&D desires that A123 develop a
lithium-ion cell, which incorporates such changes in design made pursuant to the terms of this Agreement as will ensure, to the extent practicable, that the developed cell is commercially
acceptable to B&D. The lithium-ion cell to be developed ("CELL PRODUCT") is described in the preliminary specification ("SPECIFICATION") attached hereto as  Appendix "A" and made a part hereof.
A123 shall use its commercially reasonable best efforts to design a CELL PRODUCT that meets the
SPECIFICATION. The SPECIFICATION may be amended from time to time by written agreement of the Parties. 

        1.2    A123 to Supply PRODUCTS—    

        (a)   Subject to Section 1.2(b), in the event that the CELL PRODUCTS meet the SPECIFICATION, B&D may determine to
commercially introduce one or more B&D PRODUCTS (as defined below) to the market and upon such determination, A123 shall serve as a supplier of a battery pack incorporating the CELL PRODUCTS (a "PACK
PRODUCT;" The CELL PRODUCTS and PACK PRODUCTS are sometimes collectively referred to hereinafter as "PRODUCTS.") to B&D, subject to the terms of this Agreement and any Purchase Agreements which may
subsequently be entered into by the Parties. Should B&D choose to purchase only CELL PRODUCTS from A123 it will compensate A123 with a sum which is $[**] per PACK PRODUCT for
which A123 would have been entitled to supply under this agreement. A "B&D PRODUCT" shall be defined as a DEWALT branded professional power tool designed by or on behalf of B&D which incorporates the
CELL PRODUCT or the PACK PRODUCT. If the CELL PRODUCTS meet the SPECIFICATION 

1

 

and
B&D does decide to introduce a DEWALT branded professional power tool with a lithium-ion battery, then subject to B&D's rights not to introduce a B&D PRODUCT pursuant to
Section 1.2(b) below, B&D will purchase PRODUCTS from A123 in accordance with the provisions of this Agreement. 

        (b)   Notwithstanding the foregoing Section 1.2(a), B&D shall not be required to commercially introduce a B&D PRODUCT to
the market, if (i) the commercial introduction of such B&D PRODUCT would be in violation of any applicable law, regulation or industry-wide guideline related to
lithium-ion products or (ii) the introduction of a B&D PRODUCT by B&D is commercially unreasonable due to safety and health hazards associated with the use of CELL PRODUCT, PACK
PRODUCT or B&D PRODUCT, or (iii) B&D, in its reasonable discretion determines that there are valid commercial reasons for it to not introduce the B&D PRODUCTS into the market, including but not
limited to technological advances in the market that render the B&D PRODUCTS obsolete or that are substantially superior in cost or performance. 

        (i)    If
an alternative lithium-ion battery is available to B&D in the market, such that B&D determines not to introduce the B&D PRODUCTS pursuant to
Section 1.2(b)(iii) above, that is comparable or superior to the CELL PRODUCTS and PACK PRODUCTS in specification, safe as determined by B&D, and at a significantly lower cost (a "Lower Cost
Battery"), B&D shall notify A123 and A123 will be required to close the cost differential and offer the PACK PRODUCTS and CELL PRODUCTS to B&D at a price that is within [**]%
of the cost of the Lower Cost Battery within [**] of the date of notification by B&D. If A123 cannot or is not willing to lower the pricing (not including the Exclusivity Fees
set forth in Section 4.6) of the CELL PRODUCTS and PACK PRODUCTS to within [**]% of the price of the Lower Cost Battery, B&D shall have the option to purchase such Lower
Cost Batteries from the alternative supplier, and if B&D does replace the PACK PRODUCTS and/or CELL PRODUCTS with the Lower Cost Battery, to terminate this Agreement in its entirety. If B&D does elect
to terminate this Agreement hereunder, B&D shall pay to A123 the sum of $[**], and A123 shall have no further remedy against B&D with respect to such termination. 

        (ii)   If
an alternative lithium-ion battery is available to B&D in the market, such that B&D determines not to introduce the B&D PRODUCTS pursuant to
Section 1.2(b)(iii) above, that is safe as determined by B&D's evaluation, and superior enough in performance to the CELL PRODUCTS and the PACK PRODUCTS to place B&D at a competitive
disadvantage in the market, as reasonably determined by B&D (a "Superior Battery"), B&D shall notify A123 and A123 will be required to close the performance differential so that the CELL PRODUCTS and
PACK PRODUCTS maintain competitive market performance, within [**] of the date of notification by B&D. During the time period that A123 is working toward such performance
improvements, B&D shall be permitted to purchase the Superior Batteries from a third party, and such purchases shall count towards the required volume of CELL PRODUCTS or PACK PRODUCTS to be purchased
hereunder in order for B&D to maintain its exclusivity rights (as set forth in Article IV). If A123 cannot or is not willing to improve the performance of the CELL PRODUCTS and PACK PRODUCTS
within [**] from the date of notification by B&D, B&D shall have the option to purchase the Superior Batteries from the alternative supplier and if B&D does replace the PACK
PRODUCTS and/or CELL PRODUCTS with the Superior Batteries, to terminate this Agreement in its entirety. If B&D does elect to terminate this Agreement hereunder, B&D shall pay to A123 the sum of
$[**], and A123 shall have no further remedy against B&D with respect to such termination. 

2

 

        (c)   B&D acknowledges that it is its current intent to develop four B&D PRODUCTS, with a capitalization of
$[**], as approved by B&D's Chief Executive Officer. A123 understands, however, that the development of such B&D PRODUCTS is subject to B&D's standard design and milestone
process and B&D may determine, at any point during such design and milestone process, not to move forward with the development of a B&D PRODUCT. If B&D does determine not to move forward with such
development, B&D shall promptly notify A123, and this Agreement shall terminate in its entirety. Furthermore, B&D may decide to introduce DEWALT branded professional power tools into the market with
new battery technology other than lithium-ion (to the exclusion of lithium-ion); upon such a determination, B&D may terminate the Agreement in its entirety Upon a termination
of this Agreement as set forth in this Section 1.2(c), B&D shall not be required to pay any amount to A123, nor shall A123 have any further remedy against B&D with respect to such termination. 

        1.3   Initial Payment—Prior to the execution of this Agreement by
the Parties, B&D paid to A123 the non-refundable sum of [**] Dollars ($[**]. 

        1.4   Three-Phase Project—It is contemplated that the development
of the PRODUCTS will be accomplished in three phases. During such phases, A123 shall use its commercially reasonable best efforts to design a battery cell that meets the SPECIFICATION. The three
phases are as follow: 

        (a)   Phase 1 (Cell Design and
Prototyping).    [**], A123 shall use its commercially reasonable best efforts to build [**] prototype/pilot aluminum
26650 cells that meet the SPECIFICATION requirements ("the Aluminum Prototype PRODUCT"), by December 10, 2004. 

        (1)   Within [**] after delivery to B&D, B&D will test the Aluminum Prototype PRODUCTS to confirm that
they meet the SPECIFICATION. B&D shall provide promptly to A123 copies of all test results on the PRODUCTS and prototypes. Within [**] of such confirmation, B&D shall pay to
A123 a further non-refundable sum of [**] Dollars ($[**]. B&D shall notify A123 if the Aluminum Prototype PRODUCTS do not meet the
SPECIFICATION. In such case, A123 shall continue development of the Aluminum Prototype PRODUCTS at A123's expense until the Aluminum Prototype PRODUCTS meet the SPECIFICATION. 

        (2)   Phase 2 (Battery Pack Design and Prototyping)—A123 shall use its commercially reasonable best efforts
to build and provide to B&D, [**] prototypes of a battery pack sample in accordance with the SPECIFICATION ("the Battery Pack Samples") by April 1, 2005. Within
[**] after delivery to B&D, B&D will test the Battery Pack Samples to confirm that they meet the SPECIFICATION within [**] of such confirmation, B&D
shall advance A123 a further non-refundable sum of [**] Dollars ($[**]. B&D shall notify A123 if the Battery Pack Samples do not meet the
SPECIFICATION. In such case, A123 shall continue development of the Battery Pack Samples at A123's expense until the Battery Pack Samples meet the SPECIFICATION. 

        (b)   Phase 3 (Bulk Production)—Upon confirmation by B&D
that the Aluminum Prototype Products and the Battery Pack Samples meet the SPECIFICATION, B&D and A123 agree to negotiate in good faith and enter into a Purchase Agreement, in substantially the form
attached hereto as Exhibit B, for the purchase by B&D of PRODUCTS from A123. Such Purchase Agreement shall include pricing and volumes as
mutually agreed upon by the Parties. In connection with the Purchase Agreement, A123 will procure equipment, tooling and other articles so as to be able to manufacture the volume of commercially
acceptable PRODUCTS set forth in the Purchase Agreement. 

3

 

        (c)   Exclusivity During Project—During the development process of
the PRODUCTS pursuant to this Section 1.4, A123 shall not offer or provide lithium based energy sources or any of its intellectual property related thereto to any other companies whose business
is the manufacture,
marketing or development of products in the Power Tool Field and/or one or more of the Adjacent Fields, as defined in Section 3.1 below. 

        1.5    Delays in Bulk Purchase    

        (a)   B&D
shall purchase commercially acceptable PRODUCTS in bulk by September 1, 2005, or, if later, promptly after A123 delivers commercially acceptable PRODUCTS.
A123 agrees to use its commercially reasonable best efforts to deliver commercially acceptable PRODUCTS by September 1, 2005. The Parties acknowledge, however, that B&D's bulk purchase may be
delayed for a variety of reasons. If B&D issues its first purchase order for the bulk purchase of commercially acceptable PRODUCTS on or before December 1, 2005, B&D shall incur no monetary
penalty. If the issuance of B&D's first purchase order for the bulk purchase of commercially acceptable PRODUCTS is delayed until after December 1, 2005, B&D may be required to make an
additional payment to A123, subject to Section 1.5(b) below. The length of the delay will be calculated by (A) counting the number of
months between September 1, 2005 and the date of the issuance of B&D's first purchase order for the bulk purchase and prompt shipment of commercially acceptable PRODUCTS, and
(B) subtracting from that number the number of months (or parts thereof) of which A123 failure to meet the enumerated deadlines set forth herein has caused a delay in B&D's ability to purchase
PRODUCTS . The sum of clause (A) and (B) shall equal the "Total Delay." In calculating the Total Delay, partial months shall be rounded up to the next highest whole number of months. 

        (b)   If
the Total Delay is more than [**] but not more than [**], B&D shall pay to A123 [**] Dollars
($[**] for each [**] over [**]; if the Total Delay is more than [**] but not more than
[**], B&D shall pay to A123 an additional [**] Dollars ($[**] for each [**] over
[**]; and if the Total Delay is greater than [**], B&D shall pay to A123 [**] Dollars ($[**] and the
Parties agree to negotiate in good faith to determine how best to resolve the situation. Payment for any [**] shall be made promptly after the end of each such
[**]. 

 
 

  ARTICLE II—INVENTIONS    
    

        Any improvements arising from such development work shall be owned as set forth in this Article II. 

        2.1   Definition—"Invention," as used herein, means any invention,
whether product, process or equipment, technical information, data, computer program, improvement, design, copyrightable work, or know-how, whether or not patentable, which relates to
battery cells, battery packs, chargers for charging battery cells and battery packs which (a) are conceived or first reduced to practice by A123 and/or B&D during the term or in anticipation
of, and in connection with, this Agreement, or (b) results from work done pursuant to and during the term of this Agreement. 

        2.2   B&D Improvements—Inventions solely conceived by B&D or
relating to industrial design shall be solely owned by B&D ("B&D Improvements"). B&D shall grant A123 a royalty-free perpetual worldwide non-exclusive license in any B&D
Improvements related to cell chemistry and the cell container (not including the battery pack). 

        2.3   A123 Improvements—Inventions solely conceived by A123 and not
relating to industrial design shall be solely owned by A123 ("A123 Improvements"). A123 shall grant B&D a royalty-free worldwide non-exclusive perpetual license in any A123
Improvements related to features outside of the cell chemistry and the cell container (including the battery pack). 

4

 

        2.4   Joint Improvements—Inventions that are jointly conceived by
A123 and B&D and not relating to industrial design shall be solely owned by B&D ("Joint Improvements"). B&D shall grant A123 a non-exclusive, worldwide, perpetual,
royalty-free, license to any Joint Improvements. During the term of this Agreement, A123 can sublicense the licenses granted under this section only outside the Power Tool Field, as
defined in Section 3.1(a) below. 

        2.5   Assignment and Filing—A123 shall, upon request by B&D, assign
all right, title and interest in the Joint Improvements and all proprietary rights therefore to B&D. A123's owners, employees and consultants will sign all applications for patents, copyrights, and
other proprietary rights in and for Joint Improvements in the U.S. and foreign countries. All attorney's fees and government costs relating to said patents, copyrights or other proprietary rights
shall be paid by B&D. B&D shall have the sole discretion to decide whether to file or prosecute any patent application, or to otherwise obtain, maintain, or enforce proprietary rights for the Joint
Improvements. 

 
 

  ARTICLE III—FIELDS    
    

        3.1    Definitions    

        (a)   "Power Tool Field" shall mean [**] power tools, and accessories.  

	(b)
	"Adjacent Fields" shall mean products in the fields of [**] products including but
not limited to [**]. 

        3.2   Right of First Refusal in Adjacent Field—During the term of
this Agreement and provided that the supply relationship between A123 and B&D remains exclusive as set forth in Article IV below, A123 shall not provide a cell and/or a license thereto to
others for use in an Adjacent Field without first approaching B&D pursuant to this section. Beginning on March 1, 2005 and during the term of the Agreement thereafter, A123 may approach B&D
with a reasonable business proposal regarding the development or sale of cells for or into an Adjacent Field (the "Proposal"). B&D has [**] to determine if it desires to pursue
the development or sale of cells for or into such Adjacent Field and to work with A123 pursuant to A123's Proposal. 

        (a)   [**] Products Adjacent Field—If at
any time pursuant to this section B&D has a project pending with A123 in the [**] products Adjacent Field, A123 agrees that it shall not supply cells to any companies
for use in the same product category for sale in such Adjacent Field. [**] are examples of product categories within the [**] products adjacent field. 

        (b)   B&D Acceptance of Proposal—If B&D elects in good faith to
accept the Proposal, B&D shall notify A123 in writing of such acceptance. A123 and B&D agree to then negotiate in good faith to enter into a development and supply agreement. In addition, B&D shall
have [**] from the notice date to commence development thereunder. If B&D does not commence development of the Proposal within [**] of the notice date
and B&D continues to proceed to develop a counter-proposal, B&D shall pay to A123 a commercially reasonable mutually agreed-upon monthly payment beginning
[**] after the date A123 presented the Proposal until B&D has commenced development under the Proposal or abandoned the Proposal, whichever is earlier. 

        (c)   B&D Rejection of Proposal—If B&D (i) declines the
Proposal, (ii) does not use its good faith efforts to commence development thereunder within [**] of accepting the Proposal, or (iii) accepts the Proposal but
cannot agree to purchase at least [**] of the volumes set forth in the Proposal, then A123 can present such Proposal to, and engage with, other companies in the Adjacent Field.
In any event, however, B&D will be able to develop products for and launch such products in the Adjacent Fields even if B&D declines any Proposal presented to it by A123. 

5

 

 
 

  ARTICLE IV—EXCLUSIVITY    
    

        The subsequent Purchase Agreements entered into by the Parties shall be subject to the restrictions and obligations set forth in this
Article IV. 

        4.1   Supply During the First Year—During the first
12 months of bulk purchases of commercially acceptable PACK PRODUCTS by B&D from A123, B&D agrees to purchase at least [**] percent
([**]%) of the [**] PACK PRODUCTS required by B&D for the Power Tool Field from A123, and A123 agrees that it shall sell the PACK PRODUCTS for use in
the Power Tool Field and Adjacent Fields (subject to the requirements of Article III above and Section 4.8 below) only to B&D and to no other entity, no matter where located. 

        4.2   Exclusive Supply for Second Year—Subject to the provisions of
Section 4.5 below, during the second 12 -month period, B&D agrees to purchase from A123 at least [**] percent ([**]%) of the PACK PRODUCTS
required by B&D for the Power Tool Field. During the second 12-month period of bulk purchases of commercially acceptable PACK PRODUCTS by B&D from A123, A123 agrees that it will sell the
PACK PRODUCTS only to B&D for use in the Power Tool Field and Adjacent Fields (subject to the requirements of Article III above and Section 4.8 below), so long as: 

        (a)   B&D provides A123 with copies of the capitalization and milestone documents showing the progress of new products to be
powered with the A123 cells by August 2005 or prior to the issuance of B&D's first purchase order for a bulk purchase, whichever is later. These documents are to provide evidence of the projected unit
volumes, which project an A123 annual requirement of not less than [**] PACK PRODUCTS for the second production year 

        (b)   B&D purchases at least [**] PACK PRODUCTS during the first full year of bulk production. If B&D
fails to purchase such amount, B&D can maintain at its option the exclusivity for the second year of bulk production so long as B&D pays to A123 a sum which is [**]% of the
difference between the purchase price for [**] PACK PRODUCTS and the purchase price of the number of PACK PRODUCTS actually purchased during the first year of bulk production.
The payment shall include the additional Exclusivity Fees as defined in Section 4.6 below that would have been paid had B&D purchased [**] PACK PRODUCTS during the first
full year of bulk production; 

        (c)   B&D commits to purchase from A123 at least [**] PACK PRODUCTS; for the second production year 

        (d)   For the [**] period of the second year of bulk production, B&D must purchase at least
[**] percent ([**]%) of its minimum total annual requirements of the PACK PRODUCTS in order to maintain the exclusivity for the
[**] period of the second year of bulk production. If B&D has not purchased at least [**] percent ([**]%) of its minimum
total annual requirements of the PACK PRODUCTS, B&D shall be able to maintain the exclusivity for the [**] period by paying to A123 (1) a sum which is
[**]% of the difference between the purchase price of [**] percent ([**]%) of the minimum total annual requirements of
the PACK PRODUCTS and the purchase price of the number of PACK PRODUCTS actually purchased during the [**] period of the second year of bulk production and (2) the
additional Exclusivity Fees that would have been paid had B&D purchased [**] percent ([**]%) of the minimum total annual requirements of the PACK
PRODUCTS in such [**] period. For the [**] period of the second year of bulk production, B&D must purchase at least
[**] percent ([**]%) of its minimum total annual requirements of the PACK PRODUCTS in order to maintain the exclusivity for the
[**] period of the third year of bulk production. If B&D has not purchased at least [**] percent ([**]%) of its minimum
total annual requirements of the 

6

 

PACK
PRODUCTS during the [**] period of the second year of bulk production, in order to maintain the exclusivity for the [**] period of the third year,
B&D at its option may pay to A123 (1) a sum which is [**]% of the difference between the purchase price of [**] percent
([**]%) of the minimum total annual requirements of the PACK PRODUCTS and the purchase price of the number of PACK PRODUCTS actually purchased during the
[**] period of the second year of bulk production and (2) the additional Exclusivity Fees that would have been paid had B&D purchased
[**] percent ([**]%) of the minimum total annual requirements of the PACK PRODUCTS in such [**] period; 

        (e)   If B&D ultimately purchases in the aggregate in the [**] periods of the second year of bulk
production at least [**] of the PACK PRODUCTS, and B&D has paid to A123 any payments pursuant to Sections 4.2(d) to maintain exclusivity , A123 shall return such
payments to B&D within [**] days after the end of the second year. 

        4.3   Exclusive Supply for Third Year—Subject to the provisions of
Section 4.5 below, during the third 12 -month period, B&D agrees to purchase from A123 at least [**] percent ([**]%) of the PACK PRODUCTS
required by B&D for the Power Tool Field. During the third 12-month period of bulk purchases of commercially acceptable PACK PRODUCTS by B&D from A123, A123
agrees that it will sell the PACK PRODUCTS only to B&D for use in the Power Tool Field and Adjacent Fields (subject to the requirements of Article III above and Section 4.8 below) so
long as: 

        (a)   B&D has met the obligations and requirements of Section 4.2(d) above; 

        (b)   B&D provides A123 by [**] with (1) copy of the capitalization and milestone documents
showing the progress of new products to be powered with the A123 cells, and (2) the marketing plans and projections for B&D products powered by the A123 cells launched within
[**] of B&D's original bulk purchase of commercially acceptable PACK PRODUCTS. These documents are to provide evidence of the projected unit volumes, which project an A123
annual requirement of not less than [**] PACK PRODUCTS for the third production year; 

        (c)   B&D commitment to purchase from A123 at least [**] of its PACK PRODUCTS during the third year of
bulk production. 

        (d)   For the [**] period of the third year of bulk production, B&D must purchase at least
[**] percent ([**]%) of its minimum total annual requirements of the PACK PRODUCTS in order to maintain the exclusivity for the
[**] period of the third year of bulk production. If B&D has not purchased at least [**] percent ([**]%) of its minimum
total annual requirements of the PACK PRODUCTS during the [**] period of the third year, B&D shall be able to maintain the exclusivity for the [**]
period of the third year by paying to A123 (1) a sum which is [**]% of the difference between the purchase price of [**] percent
([**]%) of the minimum total annual requirements of the PACK PRODUCTS and the purchase price of the number of PACK PRODUCTS actually purchased by B&D during the
[**] period of the third year and (2) the additional Exclusivity Fees that would have been paid had B&D purchased [**] percent
([**]%) of the minimum total annual requirements of the PACK PRODUCTS in such [**] period; 

For
the [**] period of the third year of bulk production, B&D must purchase at least [**] percent ([**]%) of its minimum
total annual requirements of the PACK PRODUCTS in order to maintain the exclusivity for the [**] period of the fourth year. If B&D has not purchased at least
[**] percent ([**]%) of its minimum total annual requirements of the PACK PRODUCTS during the [**] period of the third
year, in order to maintain the exclusivity for the [**] period of the fourth year, B&D at its option may pay to A123 (1) a 

7

 

sum
which is [**]% of the difference between the purchase price of [**] percent ([**]%) of the minimum total annual
requirements of the PACK PRODUCTS and the purchase price of the number of the PACK PRODUCTS actually purchased during the [**] period of the third year and (2) the
additional Exclusivity Fees that would have been paid had B&D purchased [**] percent ([**]%) of the minimum total annual requirements of the PACK
PRODUCTS in such [**] period. 

        (e)   If B&D ultimately purchases in the aggregate in the [**] periods of the third year at least
[**] of the PACK PRODUCTS, and B&D has paid to A123 any payments pursuant to Sections 4.3(d) to maintain exclusivity during the third year, A123 shall return such
payments to B&D within [**] days after the end of the third year. 

        4.4   Exclusive Supply for Subsequent Years—B&D and A123 agree to
negotiate in good faith, on a timely basis, the minimum annual requirements for maintaining the exclusivity in subsequent years. 

        4.5   Non-Exclusive Supply to B&D—If B&D does not
maintain the exclusivity of supply by A123 pursuant to Sections 4.1 to 4.4 above, A123 shall be free to supply any products to third parties for use in any field, and will still supply PRODUCTS
to B&D pursuant to the terms of the Purchase Agreement, on a non-exclusive basis. If B&D does not maintain the exclusivity of supply by A123 pursuant to Sections 4.1 to 4.4 above,
B&D may, at its option, terminate this Agreement and any Purchase Agreement between the parties, by providing eighteen (18) months written notice to A123. 

        4.6   Exclusivity Fee—During the period of supply exclusivity under
Sections 4.1 to 4.4 above, B&D shall pay an additional [**] ($[**]) per cell as an Exclusivity Fee. For any 12-month period of bulk
production described in Sections 4.1 to 4.4 above, the Exclusivity Fee shall be lowered to [**] ($[**]) per cell for the remainder of such
12-month period after B&D has purchased [**] percent ([**]%) of its committed volume for any such 12-month
period (i.e., [**]% of the minimum total annual requirements for PACK PRODUCTS). 

        4.7   Escrowed Information—A123 shall have a second qualified
manufacturing source of the PRODUCTS in place by January 1, 2006. A123 shall provide B&D on or prior to March 1, 2005 a contingency plan for the manufacture of the cell powder materials,
including placing information sufficient for B&D to manufacture the cells and cell powder materials in escrow ("the Escrowed Information"). The Escrowed Information shall be reviewed by an independent
firm chosen by B&D and approved by A123 (who shall not unreasonably withhold such approval) to confirm that the Escrowed Information is sufficient to manufacture the cells and cell powder materials.
Such independent firm shall not disclose any of the Escrowed Information to B&D and shall only report to B&D whether the Escrowed Information is sufficient to manufacture the cells and cell powder
materials. In the event the Escrowed Information is insufficient to manufacture the cells and cell powder materials, A123 shall supplement the Escrowed Information as necessary. A123 shall maintain
the Escrowed Information up to date. The Escrowed Information (and a license to use such information) will be made available to B&D during the term of this Agreement and any Purchase Agreements
entered into by the Parties in the event that A123 ceases operations, is unable to supply B&D with the required number of cells meeting B&D's delivery or quality requirements as set forth in the
Purchase Agreement(s) between the parties, or is unwilling to meet its obligations hereunder. To the extent that A123 is unable to meet its obligations under this Agreement, A123 will actively
cooperate with B&D to remedy such shortfalls. B&D's license to make or have made cells and cell powder materials according to the Escrowed Information will expire within [**]
from receipt of a notification from A123 that A123 is able to supply B&D with the required number of cells meeting B&D's delivery and quality requirements, as set forth in the Purchase Agreement(s)
between the parties. Such [**] period is intended to allow the phase-out of 

8

 

the
B&D or third party manufacture and the phase-in of A123 manufacture. The parties shall negotiate in good faith any extensions of the phase-out/phase-in period
due to B&D's commercial necessities. B&D shall pay to A123 $[**] per cell manufactured by B&D or a third party designated by B&D under this Section. 

        4.8   Possible Supply in Adjacent Fields—B&D agrees to coordinate
with A123 in connection with the deployment of A123's lithium battery technologies to maximize sales opportunities in the Adjacent Fields, and as such will offer new lithium-ion
application opportunities in these fields first to A123. 

 
 

  ARTICLE V—CONFIDENTIALITY    
    

        5.1   Definition—INFORMATION, as used herein, means any business or
technical information, including without limitation any drawing, disclosure, design, data, report, calculation, computer programs, model, component part, patent application, or the like of the
disclosing party which the receiving party develops, learns, or gains access to during the course of and as a result of work performed pursuant to the terms of this Agreement, excluding any
information or object: (a) which is publicly known as of the EFFECTIVE DATE, (b) which becomes publicly available subsequent to the EFFECTIVE DATE through no fault of the receiving
party, (c) which is known or possessed by the receiving party before receipt from the disclosing party, (d) which is disclosed at any time to the receiving party by a third party not
under binder of confidentiality to the disclosing party, or (e) becomes subject to legal process or applicable law that requires disclosure of any INFORMATION, in which case the Party subject
to such legal process shall notify the other Party of such required disclosure as promptly as possible (and prior to disclosure, if permissible) and shall take all actions as may be reasonably
necessary to keep the INFORMATION confidential, including all actions that such Party takes to preserve the confidentiality of its own INFORMATION. INFORMATION shall also include the existence and/or
subject matter of this Agreement and relationship between the Parties. 

        5.2   Confidentiality—Each Party will maintain in confidence all
INFORMATION disclosed to it by the other Party and will not use or disclose the INFORMATION to a third party (a) except in connection with the performance of its obligations hereunder or when
necessary to contract for services needed to perform this Agreement, (b) except pursuant to a license granted under this Agreement or as permitted by Section 4.7, or (c) unless
authorized in writing by the disclosing party. The obligations of non-disclosure and non-use under this Agreement shall not apply to any information unless, if tangible, such
INFORMATION is labeled or tagged "CONFIDENTIAL" at the time of disclosure, or if intangible, is noted as Confidential at the time of disclosure and reduced to a writing labeled
"CONFIDENTIAL" and sent to the receiving party within thirty 30) days of its disclosure to the receiving party by the disclosing party. 

        5.3   Confidentiality Term—All obligations of the Parties pursuant
to Section 5.2 above shall survive any termination or expiration of this Agreement and shall expire [**] from the termination of this Agreement. 

 
 

  ARTICLE VI—TERM AND TERMINATION    
    

        6.1   Term—This Agreement shall commence on the date the last Party
to execute signs the Agreement ("Effective Date") and continues for up to three (3) years after commencement of bulk production of commercially acceptable PRODUCTS. Such period may be extended
as necessary by approval of both Parties. 

        6.2   Termination for Breach—This Agreement may be terminated upon
written notice by either Party (the "non-defaulting Party") if the other Party materially fails to perform any material 

9

 

obligation
imposed on it by this Agreement, provided that if such breach is by its nature curable, the non-defaulting Party shall have previously given the other Party not less than
[**] calendar days advance written notice of intent to terminate, stating with particularity the breach and the steps required to cure such breach, and provided further that
the other Party has failed to cure the specified breach within such [**] day period. 

        6.3   Termination for Insolvency—This Agreement may be terminated
by a Party without penalty immediately upon giving notice, if proceedings under any bankruptcy, insolvency or similar legislation are instituted (and not withdrawn or terminated within 60 days)
by or against the non-terminating Party, or the non-terminating Party makes an assignment for the benefit of creditors, or a receiver is appointed for all or a substantial part
of the non-terminating Party's assets. 

        6.4   Termination for Delivery Delay—This Agreement may be
terminated immediately by B&D at B&D's option if A123 fails to deliver by December 15, 2005, the Aluminum Prototype PRODUCTS and the Pilot Cell Samples called for in Section 1.4(a)(1)
that meet the SPECIFICATION. This Agreement may be terminated immediately by B&D at B&D's option if A123 fails to deliver by May 15, 2006, the Battery Pack Samples called for in
Section 1.4(a)(2) that meet the SPECIFICATION. 

        6.5   Termination in the Event of Loss of Exclusivity—This
Agreement may be terminated in accordance with the provisions of Section 4.5. 

        6.6   Termination for Other Reasons—This Agreement may be
terminated in accordance with the provisions of Section 1.2. 

        6.7    Effect of Termination—    

        (a)   Neither the expiration nor termination of this Agreement shall relieve either Party of its obligation to make any and all
payments that have come due under this Agreement prior to the date of termination, nor shall it relieve either Party of obligations incurred prior to termination, which by their nature or term survive
termination; other than the foregoing, however, upon expiration or termination of this Agreement, the parties shall have no further obligations to each other. 

        (b)   If B&D terminates this Agreement prior to the completion of a phase detailed in Section 1.4(a) above, B&D will not
be liable for the payments due upon completion of such phase or the later phases. 

 
 

  ARTICLE VII—MISCELLANEOUS    
    

        7.1   Governing Law—This Agreement shall be governed by and
construed in accordance with the laws of the State of Maryland, without regard to its conflicts of law principles. 

        7.2   Assignability—Neither Party may assign its rights or
obligations hereunder without the prior written consent of the other Party hereto, except that B&D may assign this Agreement to an affiliate without the prior written consent of A123. 

        7.3   Entire Agreement; Modification—This Agreement together with
the Exhibits attached hereto which are incorporated into said Agreement and become a part thereof, This Agreement together with the Exhibits sets forth the entire agreement between the Parties
relating to the subject matter hereunder and any representation, promise, agreement or condition therewith not incorporated herein shall not be binding upon either Party. No change, modification,
extension or renewal of this Agreement shall be binding unless made in writing and signed by authorized representatives of both Parties. 

10

 

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

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

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

        7.7   Waiver—ailure of either Party to enforce any provision of
this Agreement shall not be deemed a waiver of future enforcement of that or of any other provision. 

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

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

        WITH
INTENT TO BE BOUND, the Parties have executed this Agreement on the dates indicated below. 

							
	BLACK & DECKER (U.S.) INC:	 	A123:
	

BLACK & DECKER (U.S.) INC	
 	

A123 SYSTEMS, INC.
	

By:	
 	

/s/ Jamie S. Mann

	
 	

By:	
 	

/s/ David P. Vieau

	

Printed Name	
 	

Jamie S. Mann	
 	

Printed Name	
 	

David P. Vieau
	

and Title:	
 	

Director of North American Sourcing and Global Battery Sourcing

	
 	

and Title:	
 	

President & CEO

	

Dated:	
 	

 	
 	

Dated:	
 	

 
	 	 	

 	 	 	 	

 
	

Address:	
 	

 	
 	

Address:	
 	

 
	 	 	

 	 	 	 	

 
	

 	
 	

 	
 	

 	
 	

 

11

 

 
 

  AMENDMENT TO COOPERATIVE DEVELOPMENT
  AND
  SUPPLY AGREEMENT    
    

        THIS AMENDMENT TO COOPERATIVE DEVELOPMENT AND SUPPLY AGREEMENT (this "Amendment") is
made effective as of the 18th day of August, 2005, by and between Black & Decker (U.S.) Inc., a Maryland corporation ("B&D"), A123
Systems, Inc., a Delaware corporation ("A123"). 

 
 

  R E C I T A L S    
    

        A.    B&D and A123 have entered into a Cooperative Development and Supply Agreement (the "Agreement"), dated as of
January 20, 2005, pursuant to which the parties are developing a lithium-ion cell for commercial production. Capitalized terms used herein and not otherwise defined shall have the
meaning given to them in the Agreement. 

        B.    Subject
to the terms of the Agreement, B&D was to begin purchasing PRODUCTS in bulk by September 1, 2005, or, if later, promptly after A123 delivers commercially
acceptable PRODUCTS. The parties now desire to increase the planned purchase volumes from a maximum of [**] PRODUCTS per month to [**] PRODUCTS per
month. In order to begin bulk purchases earlier and to increase its production capacity, A123 will be required to invest approximately $[**] in additional capital in new
tooling and equipment, and B&D is willing to loan such amount to A123. 

        C.    The
parties desire to amend the Agreement, subject to the terms and conditions contained herein. 

        NOW, THEREFORE, in consideration of the mutual premises, representations, covenants and agreements herein contained, and other good and
valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows: 

1.    Tooling.    Promptly after the execution of this Amendment, A123 will place an order to purchase the additional tooling
required to manufacture the PRODUCTS (the "New Tooling"), and will send to B&D an invoice equal to the amount of the purchase price of the New Tooling, or approximately US$[**]
(the "Loan Amount"). Within [**] days after B&D's receipt of such invoice, B&D will pay to Al23 the Loan Amount. All such New Tooling shall be and shall remain the property of
B&D until the Loan Amount is repaid to B&D in accordance with the terms of this Amendment. It shall be plainly identified by A123 as "Property of Black & Decker (U.S.) Inc." and shall be
safely stored and not used except in filling B&D's orders hereunder. The property, while in A123's custody, shall be maintained in good condition, normal wear and tear accepted, at A123's expense and
shall be kept insured by A123 at A123's expense in an amount equal to the replacement cost, with loss payable to B&D. A123 shall furnish to B&D a certificate of insurance evidencing A123's compliance
with the provisions of this Section 1. B&D's property may be removed by B&D at any time in accordance with Paragraph 5 below, in the event that A123 is in material breach of any of the
provisions of the Agreement, this Amendment, or any Purchase Agreement entered into by A123 and B&D or any affiliated B&D entity, and such material breach is not cured within
[**] days of written notice thereof. Immediately upon repayment or satisfaction of the Loan Amount by A123, all such tooling shall become the property of A123 and at the
request of A123 and without further consideration, B&D shall execute and deliver such instruments of sale, transfer, conveyance and assignment and take such actions as A123 may reasonably request to
more effectively transfer, convey and assign to A123, and to confirm A123's rights to, title in and ownership of, all such tooling and to place A123 in actual possession and operating control thereof. 

1

 

2.    Repayment of Loan Amount.

        a.     Beginning
[**] after A123's receipt of written authorization from B&D to initiate bulk production of the PRODUCTS, A123 promises to pay to B&D the
Loan Amount, as described below: 

i.    When
B&D's Average Run Rate (as defined below) reaches [**] PRODUCTS per [**], A123 shall pay to B&D [**]% of
the Loan Amount, or approximately US$[**]. 

ii.    When
B&D's Average Run Rate reaches [**] PRODUCTS per [**], A123 shall pay to B&D an additional [**]% of the
Loan Amount, or US$[**]. 

iii.    When
B&D's Average Run Rate reaches [**] PRODUCTS per [**], A123 shall pay to B&D an additional [**]% of Loan
Amount, or US$[**]. 

iv.    When
B&D's Average Run Rate reaches [**] PRODUCTS per [**], A123 shall pay to B&D the final [**]% of Loan
Amount, or US$[**]. 

        b.     B&D's
"Average Run Rate" shall mean, for periods beginning [**] after the initiation of bulk purchases by B&D, B&D's average of the
[**] purchases of PRODUCTS over the previous [**] and the forecasted purchases for the upcoming [**]. 

        c.    All
payments required to made above shall be made by A123 by check or by wire transfer of immediately available funds, to B&D at 701 E. Joppa Road, Towson, Maryland
21286, Attention:                                    or to an account
designated by B&D, by the [**] in which B&D achieves the Average Run Rates set forth above. 

3.    Notwithstanding
the foregoing Section 2, beginning [**] after A123's receipt of written authorization from B&D to initiate bulk production of the
PRODUCTS, in any [**] during which A123 is using the New Tooling and A123 has not yet repaid the Loan Amount in full, B&D will receive a credit equal to
$[**] per PRODUCT, for each PRODUCT in excess of [**] PRODUCTS that it purchases from A123 during such [**]. The aggregate
credit received by B&D from A123 will be subtracted from the amount of the Loan Amount to be repaid from time to time, when B&D achieves the Average Run Rates set forth above. 

4.    In
consideration for the foregoing, A123 agrees that the exclusive supply period set forth in Section 4.3 of the Agreement shall be extended for an additional
[**] period, so that, assuming that B&D complies with all other provisions of Section 4.3 regarding maintaining exclusivity, at the end of the second
[**] period of the third
year of bulk production, A123 shall, for an additional [**] period, sell the PACK PRODUCTS for use in the Power Tool Field and Adjacent Fields only to B&D and to no other
entity, no matter where located. 

5.    In
the event that B&D elects to remove it's property from A123 pursuant to its right to do so set forth in Paragraph 1 above, then: 

        a.     B&D
shall provide A123 with [**] days' prior written notice of such proposed removal; 

        b.    in
the event that B&D desires to sell such property to a third party, 

        i.    B&D
shall do so through an agent and maintain in confidence the identity of A123 and B&D and the specific use of the property, and 

        ii.    B&D
shall provide A123 with a right of first refusal to purchase the property on the same terms and conditions available to any bona fide third party desiring to
purchase the property. 

6.    In
the event of any conflict between the terms of this Amendment and the terms of the Agreement, this Amendment shall control. Except as amended herein, all provisions of the Agreement
shall remain in full force and effect. 

[Remainder of page blank, Signatures on Next Page]

2

 

        IN WITNESS WHEREOF, the parties hereto have read and executed this Agreement and have set their hands and seals hereto as of the day and
year first above written. 

							
	ATTEST:	 	Black & Decker (U.S.) Inc.	 	 
	

 	
 	

By:	
 	

/s/ John W. Schmidt	
 	

(SEAL)
	

 	 	 	 	

 	 	 
	 	 	 	 	Name: John W. Schmidt

Title:  Group Vice President
	

ATTEST:	
 	
A123 Systems, Inc.	
 	

 
	

 	
 	

By:	
 	

/s/ David P. Vieau	
 	

(SEAL)
	

 	 	 	 	

 	 	 
	 	 	 	 	Name: David P. Vieau

Title:  President & CEO

3

 

 
 

  AMENDMENT TO
  CO-OPERATIVE DEVELOPMENT & SUPPLY AGREEMENT    
    

This
Amendment to Co-operative Development & Supply Agreement ("Amendment") is hereby entered into between: 

A123
Systems, Inc.

The Arsenal on the Charles

1 Kingsbury Avenue

Watertown, MA 02472

("A123") 

and

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

701 East Joppa Road

Towson, MD 21286, USA

("B&D") 

(each
a "Party" and collectively the "Parties") 

The
effective date of this Amendment shall be July 1, 2006 (the "Effective Date"). 

 
 

  RECITALS:    
    

1.    The
Parties entered into a Cooperative Development & Supply Agreement effective as of September 15, 2004 (the "CDSA"), pursuant to which A123 developed certain CELL
PRODUCTS (as defined therein) for B&D. Capitalized terms used herein and not otherwise defined shall have the meaning given to them in the CDSA. 

2.    B&D
currently purchases PACK PRODUCTS from A123, pursuant to the terms of the CDSA. 

3.    The
Parties now desire to amend the CDSA, to clarify certain provisions and to provide that A123's manufacture of 28 volt battery pack systems for B&D is included within the terms of
the CDSA, on the terms and conditions set forth herein. 

        NOW THEREFORE, In consideration of the mutual covenants and promises contained herein, and for other good and valuable consideration, the
Parties agree as follows: 

1.    Products.    The Parties agree that PACK PRODUCTS that A123 is currently manufacturing and selling to B&D may include the 28
volt battery pack PN:627243 that A123 is currently working to manufacture for B&D (the "28V PACK"), in accordance with the terms of the May 18, 2006 quotation provided by A123 to B&D, attached
hereto as Exhibit A. The 28V PACK incorporates the CELL PRODUCTS manufactured by A123 pursuant to the Agreement, and shall be deemed to be a PACK
PRODUCT for all purposes of the Agreement. 

2.    Exclusivity.    For the avoidance of doubt, purchases by B&D of the 28V PACKS from A123 shall be included to determine if B&D
has met its purchase obligations under Article IV of the Agreement. 

3.    Purchase of CELL PRODUCTS.    The parties agree that B&D may purchase CELL PRODUCTS from A123. If any such purchases of CELL
PRODUCTS only are made by B&D for third-party pack assemblers to incorporate into 28 or 36 volt packs, then B&D shall compensate A123 as set forth in Section 1.2(a) of the Agreement by paying
to A123 $[**] per PACK PRODUCT assembled by such third-party pack assemblers. If any such purchases of CELL PRODUCTS only are made by B&D for third-party pack assemblers to
incorporate into B&D's Omega 3 or other pack, however, then B&D may purchase CELL PRODUCTS from A123 for inclusion in such Omega 3 or other pack [**]. The parties further
acknowledge and agree that B&D may have any such CELL PRODUCTS purchased 

1

 

separately
assembled into a pack by other third-party pack assemblers; provided, however, that (A) B&D shall not supply CELL PRODUCTS purchased from A123 for pack assembly to any third-party
pack assembler, if (i) such third-party pack assembler is also a lithium-ion cell competitor of A123, (ii) the majority-owner of such third-party pack assembler is a
lithium-ion cell competitor of A123 or (iii) such third-party pack assembler or any of its affiliates has provided, or is then providing, pack assembly services to A123 as A123 may
notify B&D from time to time, and (B) B&D shall only supply CELL PRODUCTS purchased from A123 for pack assembly to a third-party pack assemblers if B&D complies with Section 4 of this
Amendment with respect to such third-party pack assembler. With respect to clause (A) (iii) above, (Y) A123 hereby notifies B&D, and B&D acknowledges, that
[**] is currently providing pack assembly services to A123, and (Z) A123 agrees that if a third-party pack assembler is already providing pack assembly services to B&D
when it begins to perform pack assembly services for A123, B&D shall not be precluded from continuing to use such third- party pack assembler. Further, notwithstanding clause (A) of this
Section 3, A123 hereby agrees that B&D may supply CELL PRODUCTS purchased from A123 for pack assembly to [**] or [**]. 

4.    Protection of Intellectual Property.    B&D shall only supply CELL PRODUCTS purchased from A123 for pack assembly to a
third-party pack assembler if (A) such third-party pack assembler agrees in writing to be bound to confidentiality terms protecting A123's Confidential Information in the CELL PRODUCTS
substantially equivalent to the confidentiality terms set forth in Article V of the CDSA, (B) such third-party pack assembler agrees in a binding writing not to (i) disassemble,
de-compile, reverse engineer, or otherwise attempt to discover the source code of the CELL PRODUCTS, (ii) utilize the CELL PRODUCTS except for the purpose of assembling battery
packs for sale to B&D or its affiliates that contain the CELL PRODUCTS nor (iii) remove any proprietary notices or labels on the CELL PRODUCTS. B&D hereby agrees to indemnify A123 for any and
all claims, damages, and losses arising from B&D's breach of this Section 4 or a third-party pack assembler's breach of the provisions imposed on them by B&D pursuant to clauses (A) and
(B) of this Section 4; however, in no such event shall B&D be liable to A123 hereunder for any incidental or consequential damages. 

5.    Amendment to Contract Manufacturing Agreement.    Promptly after the execution of this Amendment, the parties agree to execute
an amendment to the Contract Manufacturing Agreement entered into between the A123 and B&D's affiliate, Black & Decker Macao Commercial Offshore Limited, effective as of March 1, 2006,
to expressly provide for the purchase of Cells as set forth herein. 

6.    Change of Address.    A123 hereby notifies B&D, and B&D hereby acknowledges, that A123's address for
notice pursuant to Section 7.9 of the Agreement is hereby changed to the address first set forth above. 

7.    Ratification.    The Agreement, as modified or amended herein, is hereby ratified by the Parties and remains in full force and
effect in accordance with its terms. 

        WITH
INTENT TO BE BOUND, the Parties have executed this Amendment as of the Effective Date set forth above. 

							
	B&D:	 	A123:
	

BLACK & DECKER (U.S.) INC	
 	

A123 SYSTEMS, INC.
	

By:	
 	

/s/ Vishak Sankaran

	
 	

By:	
 	

/s/ David P. Vieau

	

Printed Name	
 	

Vishak Sankaran	
 	

Printed Name	
 	

David P. Vieau
	

and Title:	
 	

VP, Global Sourcing

	
 	

and Title:	
 	

President & CEO

	

Dated:	
 	

11-2-06

	
 	

Dated:	
 	

11-3-06

	

Address:	
 	

701 E Joppa Rd.

	
 	

Address:	
 	

1 Kingsbury Ave.

	

 	
 	

Townson, MD 21286

	
 	

 	
 	

Watertown, MA 02472

2

 
 
 

  EXHIBIT A
  Quotation    
    

3

 Amendment to Co-operative Development and Supply Agreement

and Contract Manufacturing Agreement  

This
Amendment is made and entered into as of March 30, 2007 (the "Effective Date") by and among Black & Decker (U.S.), Inc., 703 East Joppa Road, Towson, MD 21286, USA and its
affiliated companies, Black & Decker Macao Commercial Offshore Limited and BDC International Limited (collectively, "B&D") and A123 Systems, Inc., Arsenal on the Charles, One Kingsbury
Avenue, Watertown, MA 02472 ("A123") in order to amend and supplement the Co-operative Development and Supply Agreement dated as of September 15, 2004, as amended, (the "CDSA") and
the Contract Manufacturing Agreement dated as of March 1, 2006 (the "CMA"), collectively referred to herein as the "Agreements." 

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

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

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

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

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

 

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

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

By:	
 	

/s/ R. Mitchell

	
 	

By:	
 	

/s/ Bruce Brooks

	
 	

By:	
 	

/s/ Michael Rubino

	Name:	 	R. Mitchell

	 	Name:	 	Bruce Brooks

	 	Name:	 	Michael Rubino

	Title:	 	VP Purchasing

	 	Title:	 	President CPG

	 	Title:	 	CFO

	

BDC International Limited	
 	

Black & Decker Macao

Commercial Offshore Limited	
 	

 	
 	

 
	By:	 	/s/ M. Dumenil

	 	By:	 	/s/ Vishak Sankaran

	 	 	 	 
	Name:	 	M. Dumenil

	 	Name:	 	Vishak Sankaran

	 	 	 	 
	Title:	 	General Manager

	 	Title:	 	V.P. Global Sourcing WWPTA

	 	 	 	 

2

 
Exhibit A  

 CELL PRODUCTS:  

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

 ADDITIONAL TERMS AND CONDITIONS (if any):    NONE.  

3

  AMENDMENT TO

COOPERATIVE DEVELOPMENT & SUPPLY AGREEMENT  

        THIS AMENDMENT TO COOPERATIVE DEVELOPMENT & SUPPLY AGREEMENT (the "Amendment") is made effective as of
September             , 2007, by and between A123 Systems, Inc., a Delaware corporation, with offices at The Arsenal on the Charles, 321 Arsenal Street, Watertown, MA 02472
("Contractor"), and Black & Decker (U.S.) Inc., a Maryland corporation, of 701 East Joppa Road, Towson, Maryland 21286 ("Black & Decker"). 

EXPLANATORY STATEMENT  

        A.    The
parties hereto have entered into a Cooperative Development & Supply Agreement, dated as of September 15, 2004, as amended by an Amendment dated
August 18. 2005, an Amendment dated July 1, 2006, and an Amendment dated March, 2007 (together, the "CDSA"), pursuant to which the parties have developed a lithium-ion cell
for commercial production. Capitalized terms used herein but not defined shall have the meaning given to them in the CDSA. 

        B.    The
CDSA defines the fields in which Black & Decker has the exclusive right to sell Pack Products or Cell Products. The parties now desire to amend the Agreement
so that Black & Decker will waive its Right of First Refusal in the Adjacent Field with respect to the opportunity for development of a [**] (as defined below) and will
permit A123 to sell Pack Products or Cell Products into an Adjacent Field for the same opportunity, subject to certain restrictions, all as set forth below. 

        NOW,
THEREFORE, in consideration of the Explanatory Statement, the mutual covenants and promises contained herein, and other good and valuable consideration, the receipt of and
sufficiency of which are hereby acknowledged, the parties hereto agree to amend the Agreement as follows: 

        1.     For
purposes of this Amendment, a [**] shall be defined as a [**] having a total [**]; shall  not include a [**]; shall not have [**]; shall  not have a [**] (shall not be a [**]); and shall not be a [**]. 

        2.     Pursuant
to Section 3.2 of the CDSA, A123 has approached Black & Decker with a reasonable business proposal regarding the development and sale of cells into
the Adjacent Field of [**]. Specifically, A123 desires to develop and manufacture cells for an [**] ("Manufacturer") for Manufacturer's use with its
[**]. Black & Decker hereby waives its Right of First Refusal with respect to this opportunity and agrees that A123 may develop and manufacture cells for Manufacturer
for use with its [**], subject to the terms and conditions set forth in this Amendment. 

        3.     A123
agrees that: 

        (a)   any
intellectual property associated with cell developments that is developed and owned solely by A123 in connection with the development of cells for Manufacturer for
use with its [**] ("New IP") shall first be made available to Black & Decker for use consistent with Black & Decker's rights under the CDSA before A123 offers
such New IP for the use of any other entity (other than Manufacturer). 

        (b)   A123
will not enter into any exclusivity agreements with Manufacturer or any other entity related to the New IP, that would restrict Black & Decker's access to,
or ability to use, the New IP, or Black & Decker's ability to participate in the Adjacent Field of [**]. 

        (c)   the
selling price for any cells that A123 sells to Black & Decker for use in the Adjacent Field of [**] shall at no time exceed the lowest
price at which such cells are offered to any of A123's other customers purchasing in like quantities and terms. In the event that, prior to the shipment under Black & Decker's purchase order,
A123 sells or offers to sell cells to the Manufacturer at lower prices and or on terms more favorable than those stated in Black & Decker's purchase order, A123 shall notify Black &
Decker of the same and the prices and or terms herein shall be deemed automatically revised to equal the lowest price and or most favorable terms at which A123 shall have sold or shall have offered
such cells and payments shall be made accordingly. In the event Black & Decker shall become entitled to such lower prices but shall have made payment at any price in excess thereof, A123 shall
promptly credit the difference in price to Black & Decker. 

 

        4.     In
consideration for Black & Decker's agreements hereunder, A123 further agrees that Black & Decker shall receive an annual credit towards its annual
requirement of purchases under Article IV of the CDSA, equal to [**] Pack Products. This credit shall be applied by A123 to Black & Decker's purchases during each
12-month period used by the Parties to determine if Black & Decker has met its obligations with respect to maintaining exclusivity, as set forth in Article IV of the CDSA. 

        5.     Except
as amended hereby, all other provisions of the CDSA shall remain in full force and effect. 

        IN
WITNESS WHEREOF, the undersigned have executed and delivered this Amendment to Cooperative Development & Supply Agreement as of the day and year set forth above. 

							
	BLACK & DECKER (U.S.) INC:	 	A123 SYSTEMS, INC.
	

By:	
 	

/s/ Vishak Sankaran

	
 	

By:	
 	

/s/ Dave Vieau

	Printed Name	 	Printed Name
	and Title:	 	V.P. Global Sourcing

	 	and Title:	 	Dave Vieau, CEO

2

 AMENDMENT TO THE

CO-OPERATIVE DEVELOPMENT & SUPPLY AGREEMENT  

This
Amendment to the Co-operative Development & Supply Agreement ("Amendment") is hereby entered into between: 

A123
Systems, Inc.

The Arsenal on the Charles

321 Arsenal Street

Watertown, MA 02472 ("A123") 

and 

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

701 East Joppa Road

Towson, MD 21286, USA

("B&D") 

(each
a "Party" and collectively the "Parties") 

The
effective date of this Amendment shall be December 19, 2007 (the "Effective Date"). 

 RECITALS:  

1.    The
Parties entered into a Cooperative Development & Supply Agreement effective as of September 15, 2004, as subsequently amended on August 18, 2005,
July 1, 2006, and March 30, 2007, respectively, (collectively, the "CDSA"), pursuant to which A123 developed certain CELL PRODUCTS (as defined therein) for B&D. Capitalized terms used
herein and not otherwise defined shall have the meaning given to them in the CDSA. 

2.    The
Parties now desire to amend and supplement the CDSA, to modify certain provisions, including without limitation, the Exclusivity provisions in Article IV that govern the
calculation of B&D's purchase requirements and exclusivity payments, on the terms and conditions set forth herein. 

        NOW THEREFORE, In consideration of the mutual covenants and promises contained herein, and for other good and valuable consideration, the
Parties agree as follows: 

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

A.
Section 4.6.    Delete Section 4.6 in its entirety and replace it with the following new Section 4.6: 

4.6    Exclusivity Fee—(a) During the period of supply exclusivity under Sections 4.1 to 4.4 above, B&D shall pay an
additional [**] ($[**]) per 26650 CELL and [**]($[**]) per 18650 CELL as an Exclusivity Fee (subject to
subparagraph (c) of this Section 4.6 below), which shall be calculated based on the applicable Cell count per PACK PRODUCT as illustrated below. 

(b)    For
purposes of determining if B&D has met its obligations under Sections 4.2, 4.3 and 4.4 with respect to minimum volume purchases to maintain exclusivity, credit will be
given for PACK PRODUCTS being purchased based on the following: a PACK PRODUCT containing [**] 26650 Cells at $[**] each or
$[**] total, or a PACK PRODUCT containing [**] 18650 Cells at $[**] each or $[**] total, will each be
equal to one unit. The following examples are provided for purposes of illustrating how the foregoing calculation metric will be applied: 

Example 1:

[**]
cell Omega3 pack (using 18650 Cells) will be worth [**] in exclusivity payments

[**]Therefore each Omega3 pack will count towards [**]% of a PACK PRODUCT unit 

Example
2: 

[**]
cell [**] pack (using 18650 Cells) will be worth [**]in exclusivity payments 

[**]
Therefore, each [**] pack will counts towards [**] PACK PRODUCT units 

(c)    The
parties agree that as of the Effective Date, B&D may determine whether or not it will pay the Exclusivity Fee on the Cells it purchases from A123 for certain applications provided
that B&D shall
promptly notify A123 in writing of such determination. If B&D determines that it will not pay the Exclusivity Fee for Cell purchases for such specific applications, then no credit toward PACK PRODUCT
units purchased for purposes of maintaining exclusivity will be given to B&D for the Cells purchased for that application. An example is the current [**] program whereby B&D
does not to pay the $[**] exclusivity fee on the Cells for that application. Therefore, the [**] will be excluded from counting towards PACK PRODUCT
exclusivity volume requirements. The foregoing shall not change, and shall have no impact on, the existing applications for which B&D currently pays the non-refundable Exclusivity Fee or
the definition of the Fields in which B&D maintains exclusivity under Article IV. 

2.    Within
[**] days after the end of each month during the term of the Agreement, A123 shall invoice B&D for the Exclusivity Fee due based on net purchases made by
B&D in the prior month, and shall provide the following supporting information: (a) Number of Cells purchased by B&D directly from A123, (b) Number of Cells A123 has shipped and invoiced
to STL or such other third party pack manufacturer identified by B&D, and (c) Number of Cells returned to A123 by STL or such other third party pack manufacturer identified by B&D, and credited
back. Payments of the Exclusivity Fee shall be due by B&D to A123 within [**] days after B&D's receipt of the invoice. 

3.    Except
as amended hereby, the CDSA is hereby ratified by the Parties and shall continue in full force and effect. This Amendment, together. with the CDSA, contains the entire agreement
of the Parties hereto and supersedes all earlier agreements and understandings, oral and written, between the Parties hereto with respect to the subject matter hereof. 

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

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

By:	
 	

/s/ Dave Vieau

	
 	

By:	
 	

/s/ Vishak Sankaran

	Name:	 	Dave Vieau

	 	Name:	 	Vishak Sankaran

	Title:	 	CEO

	 	Title:	 	V.P. Global Sourcing

QuickLinks

Exhibit 10.26

ARTICLE II—INVENTIONS

ARTICLE III—FIELDS

ARTICLE IV—EXCLUSIVITY

ARTICLE V—CONFIDENTIALITY

ARTICLE VI—TERM AND TERMINATION

ARTICLE VII—MISCELLANEOUS

AMENDMENT TO COOPERATIVE DEVELOPMENT AND SUPPLY AGREEMENT

R E C I T A L S

AMENDMENT TO CO-OPERATIVE DEVELOPMENT & SUPPLY AGREEMENT

RECITALS

EXHIBIT A QuotationQuickLinks
 -- Click here to rapidly navigate through this document

 
 

  Exhibit 10.27    
    

Confidential
Materials omitted and filed separately with the

Securities and Exchange Commission. Asterisks denote omissions. 

 SUPPLY AGREEMENT

Number: 99XXXX  

 FOR PURCHASE OF PRODUCTION PARTS AND  

 NON-PRODUCTION GOODS AND SERVICES  

 BETWEEN  

 A123 SYSTEMS, INC. ("SUPPLIER")  

 AND  

 THINK GLOBAL AS ("THINK")  

This
Supply Agreement ("Agreement") has the objective of regulating the delivery of production parts and/or non-production goods and services from the Supplier to Think in relation to the
production of an electrical vehicle by Think with the following designation of type: 

A
306—model year 2007. 

Think
will purchase and Supplier will manufacture/supply Think's requirements for the units, supplies and components listed in the Blanket Purchase Order attached hereto as Appendix 2. 

Prices
set forth in this Agreement are based on and subject to a minimum purchase volume of [**] units in the [**] and [**]
units in [**], totalling [**] units based on a delivery program running from the [**] until [**].
Monthly volumes may fluctuate but the above stated minimum volumes must be met in order for Think to maintain the quoted pricing. The pricing is [**] during the above mentioned
time period, subject to [**]. New forecasts ("Rolling Forecast") will be distributed to the Supplier regularly, but not less than [**]. Think is not
obligated to order any units if design and test requirements are not met by Supplier as specified in Appendix 1 and its relevant documents attached therein. If such design and test requirements
are met,
Think will confirm to Supplier in writing and be obligated to order the units specified above. However both parties acknowledge that full vehicle safety must be met in all level of testing prior to
Think shipping cars to market. This testing as specified in Attachment 1 and its relevant documents attached therein and may influence timing of deliveries [**]. In connection
with the foregoing, Supplier shall be excused from all obligations or penalties arising under this Agreement or otherwise that relate to Supplier's capacity requirements and/or delivery commitments
unless and until Think's testing requirements specified in Attachment 1 are successfully completed and the above unit delivery requirements are confirmed in writing for [**].
In addition to the foregoing, if Supplier meets its scheduled delivery requirements to Think pursuant to Section 3 of this Agreement and Think does not complete the testing specified in
Attachment 1 as referenced above by [**], then Senior Executives of the parties shall promptly meet at a mutually agreed location to discuss in good faith appropriate
compensation to be paid to Supplier for delayed deliveries. 

Think
has the right to increase the number of units to meet the requirements of its business by written notice, based on a [**] lead time for cell assembly and
[**] lead time for coating capacity. Supplier is committed to increase capacity inside this period to a maximum of [**] units per year. Prices and terms
will in this case be renegotiated and mutually agreed to in writing. 

This
Agreement embodies all the terms and conditions agreed upon between the parties as to the subject matter of this Agreement and supersedes all previous agreement or arrangement (if any) between
the parties. 

 

This
Agreement consists of this Supply Agreement and the following Appendices: 

Appendix 1:
Statement of Work ("SOW") with relevant annexes. 

Appendix 2:
Blanket Purchase Order (with following Rolling Delivery Schedules). 

This
Agreement is entered into between the following parties: 

			
	Supplier	 	 
	Name:	 	A123 Systems, Inc. ("Supplier")
	Registration no:	 	 
	Address:	 	Arsenal on the Charles, 321 Arsenal Street, Watertown,

Massachusetts 02472 USA
	Attn:	 	Evan Sanders
	E-mail:	 	esanders@a123systems.com
	Telephone:	 	617-778-5562
	Telefax:	 	617-924-8910
	
 Purchaser	
 	

 
	Name:	 	Think Global AS or a subsidiary of the Think Group ("Think")
	Registration no:	 	NO 989 710 796
	Address:	 	Sandakerveien 24 C

NO-0413 Oslo

NORWAY
	Attn:	 	Erik Skaarnæs
	E-mail:	 	esk@think.no
	Telephone:	 	 
	Telefax:	 	 

This
Agreement consists of 15 pages (excluding Appendices) and is in two originals—one to each of the parties. 

Acknowledged
and agreed by the authorized representatives of the parties set forth below: 

									
	For and on behalf of the Supplier	 	For and on behalf of Think
	

By:	
 	

/s/ David Vieau

	
 	

By:	
 	

/s/ Jan Olaf Willums

	Name:	 	David Vieau	 	Name:	 	Jan Olaf Willums
	Title:	 	CEO	 	Title:	 	CEO
	Date:	 	28 November, 2007	 	Date:	 	7 November, 2007
	Place:	 	Watertown, Massachusetts	 	Place:	 	Oslo/Aurskog

0.     GENERAL

The
terms and conditions of this Agreement and associated documents are issued on behalf of Think and will apply to all orders issued to the Supplier for the products listed in Appendix 2
("Supplies" or "units"). 

Think
and Supplier agree that the following terms and conditions, which shall be applied in the spirit of fairness and good faith, govern the delivery of Supplies and any related services from the
Supplier to Think. 

Purchase
Orders and other associated purchasing documents will be valid without signature if issued by Think through its computer system or other electronic means. The reference to Purchase Order
herein 

2

 

shall
include a Blanket Purchase Order, Delivery Schedule, Tooling Purchase Order, or similar documents issued by Think to Supplier. 

1.     OFFER, ACCEPTANCE

	(a)
	A
Purchase Order or Delivery Schedule against a Blanket Purchase Order is an offer to Supplier by Think to enter into the purchase agreement it describes.
Supplier's written acceptance of the Purchase Order will constitute acceptance of the offer.

	(b)
	Acceptance
is expressly limited to the terms of Think's offer. Once accepted, such Purchase Order together with these terms and conditions will be the
complete and exclusive statement of the Supply Agreement. Any modifications proposed by Supplier are expressly rejected by Think and shall not become part of the agreement in the absence of Think's
written acceptance. Any pre-printed terms and conditions on the face and reverse of each Purchase Order form shall not apply and this Agreement shall be controlling. 

2.     CHANGES

	(a)
	Subject
to negotiated Purchase Order terms, Think may, at any time, change the design (including drawings, materials and specifications) pursuant to the
change process set forth in subsection (d) below, processing, method of packing and shipping, and the date or place of delivery of the Supplies.

	(b)
	If
any such change affects cost or timing, Think and Supplier will adjust the price and delivery schedules by mutual written agreement, pursuant to the
change process set forth in subsection (d) below.

	(c)
	Supplier
will not make any material change in the design (e.g., form, fit, function or related warrenty terms) unless done pursuant to Think's
instructions pursuant to the change process set forth in subsection (d) below, or to processing, packing, shipping or date or place of delivery of the Supplies unless done pursuant to Think's
instructions or with Think's written approval, which shall not be unreasonably withheld or delayed. Supplier reserves the right to make changes in its internal processes or procedures that do not
impact the foregoing without seeking such approval.

	(d)
	If
Think requires any changes to the Supplies that deviate from the mutually agreed design and specifications set forth in a Statement of Work, Think shall
submit to Supplier (i) all necessary specifications and/or information and (ii) a request for a price quote ("RPQ") for each change. Supplier shall promptly evaluate the RFQ and submit
to Think for its written acceptance a proposal specifying the applicable changes in the Supplies and any related changes to the Statement of Work, including without limitation all affected milestone
delivery dates, and a price quote reflecting all associated changes in fees necessitated by Think's change request. Think shall have [**] business days to accept or reject
Supplier's proposal and shall provide Supplier with written confirmation of same. If Think accepts Supplier's proposal, Supplier shall modify the Statement of Work and Supplier shall proceed to
implement such changes in accordance with the Statement of Work as so modified. 

3.     DELIVERIES

	(a)
	Time
and quantity are of the essence in any Purchase Order. Unless otherwise agreed, delivery times specified are the times of delivery of the Supplies at
Think's designated place of delivery or destination.

	(b)
	Supplies
shall be accompanied by required and agreed documentation specified in the Purchase Order. 

3

 
	(c)
	Delivery
will not take place prior to agreed time of delivery without Think's written consent, not to be unreasonably withheld or delayed.

	(d)
	Supplier
is obliged to do everything in its reasonable power to meet agreed time of delivery. In the event that Supplier understands or has reason to
believe that delivery will be delayed, Think shall be notified immediately in writing about the extent and cause of the delay. Supplier is obliged to do its utmost to minimise the extent and damage of
any delay.

	(e)
	If
such a delay can be reasonably foreseen to directly cause a material delay in Think's ability to ship products to customers on schedule and Supplier is
unable to provide a mutually agreeable plan to correct the deficiencies causing such delay, then Think is entitled to cancel the delivery at its own discretion as its sole remedy and Supplier shall
not be responsible for any penalties under Section 3(f) below.

	(f)
	Supplier
is responsible for any direct and documented loss incurred by Think caused by a delay to the extent provided in this Section 3(f). A
delivery which is delayed solely due to Supplier's fault (and not excusable, pursuant to Section 19) entitles Think to demand a penalty caused by the delay. Unless otherwise mutually agreed,
the penalty shall be [**] per cent of the agreed unit price for the delayed delivery per working day delay after agreed date of delivery. The penalty is limited to
[**] per cent of the agreed price for the delayed delivery. 

If
Think is unable to receive the Supplies at the agreed time of delivery, Supplier shall be notified immediately with instructions for steps to be taken. Think will pay the Supplies as originally
agreed and any costs incurred by Supplier as a result of the delay, provided Supplier has minimised any such costs. 

4.     PACKING, MARKING AND SHIPPING

	(a)
	Supplier
will pack, mark and ship Supplies in accordance with all applicable packaging standards of Think and, as appropriate, the carrier transporting such
Supplies. Think will inform and provide Supplier with such standards in writing a minimum of [**] in advance of any shipment.

	(b)
	Supplier
will not charge separately for packing, marking, or for materials used therein.

	(c)
	Think
may request shipment of any of the Supplies by a more expeditious method of transportation if Supplier fails to meet the delivery requirements of a
Purchase Order and such failure results in a material delay in vehicle production or sales. In such case, Supplier will cover all reasonable express shipping costs incurred unless such failure is due
to an excusable delay as specified under Section 19. 

Supplier
shall perform functional-level quality testing of the Supplies once fully assembled at Supplier's facility prior to shipment pursuant to a mutually agreed test plan. Supplier shall prepare
and deliver a Test Report to Think upon request. 

All
Supplies shall be deemed accepted upon shipment, provided, however that it is understood that Think shall be entitled to conduct an incoming quality inspection pursuant to Section 6(a)
below and shall have the rights and remedies under the Section 10 (Warranty) if any non-conforming Supplies are identified during this process. All Supplies deliveries shall be FCA
A123's factory. 

5.     SHIPPING DOCUMENTS

Freight
Bill or Bill of Lading and any other legally required documents must accompany each material shipment. 

4

 

6.     INSPECTION & CORRECTION

	(a)
	Think
is obliged to inspect the Supplies upon delivery without undue delay. This inspection is visual and primarily intended to detect any damage to goods
under transportation.

	(b)
	In
the event that non-conforming Supplies are not detected upon Think's incoming quality inspection, the non-conforming Supplies
will be subject to this Section 6 and Section 10 below.

	(c)
	Think
may at its own option notify Supplier of any warranty claims during the applicable warranty period and with mutual agreement either return at
Supplier's risk and expense, or retain and correct, Supplies that fail to conform in any material respect to the requirements of a Purchase Order and their applicable specifications, even if the
non-conformity does not become apparent until the manufacturing or processing stage. If the parties agree that Think should correct the Supplies, Think will consult with Supplier on the
method of correction. Supplier, at its option, will either reimburse or credit Think for reasonable expenses resulting from warranty claims or correction, subject to subsection (d) below.

	(d)
	If
Supplier does not immediately take the necessary steps to correct a non-conformance pursuant to Section 10 below, Think is entitled to
receive a credit for the purchase if the non-conformance is material for the fulfilment of the Purchase Agreement. Supplier shall have [**] to rectify the
non-conformance before Think is entitled to a credit for the purchase. Supplies in dispute under this clause will not be paid until the dispute is solved. 

7.     INVOICES, PAYMENT, FOREIGN EXCHANGE

	(a)
	Supplier's
invoices must contain all material information required by Think as detailed in Purchase Order. Invoices missing material details will be
returned to Supplier for correction.

	(b)
	Payment
terms will be as specified in the relevant Purchase Order and, if not so specified, shall be net [**] from shipment or
invoice date, which means the same.

	(c)
	All
payments for Supplies shall be made in the currency specified in the Purchase Order and, if not so specified, shall be in U.S. Dollars.

	(d)
	The
parties acknowledge that a percentage of the Supplies' cost (to be determined pending design completion) originates from China and that all prices
quoted for the Supplies reflects Supplier's current expectations for USD-RMB foreign exchange rates for calendar year 2008. If the applicable foreign exchange rates increase or decrease
more than [**]% from the published exchange rates in The Financial Times as of the Effective Date, then the parties shall
re-negotiate and mutually agree in good faith on the affected part of the supplies to the quoted prices. 

8.     SERVICE AND REPLACEMENT PARTS

Upon
the written acceptance of a Purchase Order by Supplier, Supplier will sell to Think: 

	(i)
	Supplies
necessary to fulfil Think's current model service and replacement requirements for such Supplies at the prices specified in the Purchase Order.

	(ii)
	Service
and replacement parts of any assemblies. The total price of all parts of the assembly shall not exceed a mutually agreed percentage of the price of
the assembly specified in the Purchase Order (less assembly costs).

	(iii)
	Supplies
in a [**] period after Think completes current model purchases. The Supplies of spare parts shall fulfil Think's past
model service and replacement requirements at the prices specified in a Purchase Order plus actual cost differentials for packaging and manufacturing. During the [**] of such
period, Think and Supplier will negotiate in good faith with regard to Supplier's continued manufacture of service and replacement Supplies. Supplier may terminate 

5

 

production
of any Supplies upon reasonable prior written notice to Think, provided that, in such case, Supplier shall support and provide or make available to Think, Supplies having equivalent form,
fit and function and which may have improved capability to the original Supplies at mutually agreed rates. 

9.     APPLICABLE TAXES

The
total price specified for Supplies on a Purchase Order will include the unit price. All elements of freight, duty and tax as specified in the relevant delivery term, including value added tax
(VAT), which, if applicable, will be shown separately on Supplier's invoice and shall be the responsibility of Think. 

10.   WARRANTY

	(a)
	Supplier
warrants that Supplies under a Purchase Order will, during the warranty period specified below, conform in all material respects to the applicable
drawings, specifications, or other description furnished pursuant to the Purchase Order, be free of defects in design (to the extent that Supplier furnished the design), materials, and workmanship
that materially affect the uses to be made of such Supplies and be suitable for the purpose intended. Upon delivery of the Supplies Think will be solely responsible to ensure the correct storing,
handling and usage of the Supplies.

	(b)
	The
warranty period for Supplies shall be the period specified on Think's Purchase Order, provided however that a valid warranty shall not be shorter than
[**] months after the electrical vehicle (where the Supplies are assembled) is registered on the end-user, but in no case longer than [**]
months from the time Think has received the Supplies from the Supplier, or up to [**] Full Cycles (one cycle is defined as 100% complete charge and 100% complete discharge)
with [**]% of initial capacity remaining after the [**] Full cycles, which ever is lesser. 

6

 

	(c)
	During
the warranty period, Supplier will immediately and at its own cost replace or take prompt action to correct any non-conformant Supplies
in accordance with the warranty remedies set forth in Section 6 above. The warranty only applies when the Supplies have been stored, installed and used in accordance with their intended purpose
and specifications. Think will return to Supplier all non-compliant Supplies that are replaced under the warranty.

	(d)
	Supplier
will indemnify and hold Think harmless in respect of the costs of Governing body safety recall campaigns in the country of vehicle sale
(e.g., the Department of Transportation in the U.S.) and other mandated corrective service actions, not to exceed $[**] per recall event and
$[**] in the aggregate in any year during the term of this Agreement, that are required to rectify non-conformances in Supplies (materials and/or workmanship),
other than in instances where the Supplies have not been stored, installed or used by Think or the end-user in accordance with the intended purpose and specifications.

	(e)
	Replaced
and repaired Supplies are subject to the same warranty conditions and term as for the original Supplies, counted from the time when the replacement
or repair was completed.

	(f)
	Supplier
warrants that the Supplies fulfils official requirements regarding environment, quality and safety in the jurisdictions where the vehicle shall be
marketed and sold. Think is responsible for providing in writing to Supplier all necessary documents regarding this in order for Supplier to adequately review these requirements in advance of
accepting any Purchase Order.

	(g)
	The
parties expressly disclaim the application of the UN Convention on Contracts for the International Sale of Goods to this Agreement. 

EXCEPT
FOR THE FOREGOING WARRANTIES, SUPPLIER MAKES NO OTHER WARRANTIES REGARDING THE SUPPLIES, AND DISCLAIMS ALL OTHER WARRANTIES, EXPRESS OR IMPLIED, RELATING TO THE SUPPLIES, INCLUDING WITHOUT
LIMITATION ANY WARRANTY OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE OR NONINFRINGEMENT. 

11.   TITLE AND ENGINEERING DRAWINGS, SPECIFICATIONS

	(a)
	Any
documents, including drawings and specifications produced or acquired by Supplier under a Purchase Order, which documents define elements that are
unique to Think ("Documents"), will belong to Think, subject only to Supplier's intellectual property rights in and to such Documents or their contents, including and not limited to both foreign and
domestic pending patent applications, issued patents, trademarks, trade secrets, copyrights, industrial design right or other intellectual property rights (collectively, "Intellectual Property
Rights"), but without any other restrictions on Think's use of such Documents for the purposes of this Agreement, including reproduction, modification, disclosure or distribution of the documents or
the information contained therein, subject to the confidentiality obligations arising under Section 13(b) and Section 23 below. To the extent such documents contain original work of
authorship under applicable copyright law created by Supplier in order to comply with Think's requirements under a Purchase Order, the copyrights to such work shall be owned by Supplier, subject to
Think's usage rights above. Any engineering drawing that Supplier is required to prepare and furnish to Think shall conform to Think's local computer hardware and software.

	(b)
	All
drawings, know-how, and confidential information supplied either to Think or Supplier by the other party and all rights therein, including
Intellectual Property Rights, will remain the property of the disclosing party and will be kept confidential by the receiving party in accordance with Section 13(b) and Section 23.
Supplier is licensed to use Think's drawings, know-how, and confidential information produced or acquired by Supplier under a Purchase Order and subject only to Supplier's Intellectual
Property Rights, as set forth in Section 11(a), only for the purpose 

7

 

of
fulfilling its obligations under a Purchase Order. Supplier will ensure that any third party to whom Supplier subcontracts any of the work hereunder is bound by all the terms and conditions
relating to such work to which Supplier is bound under a Purchase Order. 

12.   INTELLECTUAL PROPRIETARY RIGHTS

	(a)
	Other
than disclosed to Think as of the Effective Date, Supplier represents and warrants that Supplier has no knowledge of any claims of infringement filed
against Supplier by a third party for practicing any existing Intellectual Property Right of such party.

	(b)
	This
Agreement does not constitute any transfer of Intellectual Property Rights, either in whole or in part, from one party to another party. Supplier is
and remains the owner of all rights in and to its inventions or other Intellectual Property Rights, rights received or applied for such inventions or other Intellectual Property Rights, including but
not limited to rights in and to the Supplies, as well as any other pre-existing rights from before entering into this Agreement and any improvements or modifications thereto made by
Supplier following the Effective Date. For the avoidance of doubt, Supplier owns all rights, title and interests in and to the following elements of the Supplies (i) cell-level
technology, composition and know-how, (ii) software and firmware, including without limitation, SOC/SOH algorithms and (iii) module design features. 

13.   INFORMATION AND DATA

	(a)
	Supplier
will furnish to Think all non-proprietary information and data Supplier acquires or develops in the course of Supplier's activities
under a Purchase Order—without restrictions on use or disclosure. Supplier shall also disclose, on Think's request, any potential or real problems with design, quality or manufacturing
related to the Supplies under a Purchase Order.

	(b)
	Think
and Supplier will use reasonable care to prevent disclosing to any third person:

	(i)
	the
technical information and data furnished by Think or Supplier to the other party or developed or acquired by Think and Supplier under its work related
to a Purchase Order,

	(ii)
	information
relating to any portion of either party's business that either party may acquire in the course of the activities related to a Purchase Order 

These
confidentiality obligations shall continue as long as any Purchase Order is in effect and for a minimum period of [**] thereafter. This obligation will not apply to
information that is or becomes publicly known through no fault of Think or Supplier. Nevertheless, Supplier may disclose the information and data of subsections (b)(i) and (b)(ii) hereof to
relevant third parties if this is required for Supplier to fulfil its duties under a Purchase Order and such third parties have agreed in writing to conditions at least as stringent as those contained
herein. 

14.   COPYRIGHTS

	(a)
	Any
work of authorship created by Supplier or Supplier's employees under a Purchase Order which is specially ordered or commissioned by Think and which does
not relate to, either in whole or in part, Supplier's Intellectual Property Rights or is filed as any continuation and/or continuation-in-part and/or divisional applications
filed by or granted to Supplier either inside or outside of the U.S., may be considered as a "work made for hire" and all copyright ownership for such
works of authorship will be mutually agreed by the parties in writing.

	(b)
	All
works of authorship, if mutually agreed subject to Sections 14(a), will bear a valid copyright notice designating either Think or Supplier as the
copyright owner, for example, in the case of Think: "Copyright © 2007, THINK Global AS", where "2007" is the year the work was created. 

8

 

15.   SUBCONTRACTS

In
each subcontract of Supplier's work performed pursuant to a Purchase Order, if any, Supplier will obtain for Think the rights and licenses granted in Sections 11, 13, and 14. 

16.   ADVERTISING

Any
reference to the other party or the use of the other party's trade marks or logos in advertising or publicity materials will be subject to the other party's prior written approval. 

Each
party agrees that it will refrain from issuing any press release or other public statement regarding this Agreement or the matters described herein, or disclose the existence of this Agreement or
the terms hereof to any third party, until the Effective Date (as defined below). Any press releases issued under this Agreement shall be subject to prior review and agreement by the parties. 

17.   AUDIT RIGHTS

Think
will have the right at any reasonable time during normal business hours upon prior written notice, at its sole expense, to send its authorized representatives to examine all pertinent documents
and materials in the possession or under the control of Supplier relating to any of Supplier's obligations under a Purchase Order or any payments requested by Supplier pursuant to a Purchase Order.
Supplier shall maintain all pertinent books and records relating to a Purchase Order for a period of [**] years after completion of services or delivery of Supplies pursuant to
that Purchase Order. 

18.   ASSIGNMENT

Except
for subcontracting by Supplier in the ordinary course of its business, neither party will assign or delegate any of its rights or substantive duties under this agreement or a Purchase Order
without the other party's prior written approval, provided that no such approval is required for an assignment of this Agreement by either party in connection with a merger, consolidation,
reorganization or sale of all or substantially all assets. 

19.   EXCUSABLE DELAYS  

	(a)
	Neither
Think nor Supplier will be liable for a failure to perform arising from causes or events beyond its reasonable control and without its fault or
negligence, including labour disputes ("excusable delay"). The non-performing party claiming an excusable delay shall give notice in writing to the other party as soon as possible after
the occurrence of the cause relied on and after termination of the condition.

	(b)
	In
the event of a delay in performance (excusable or not), Think may acquire possession of all finished goods and materials in progress meant to be included
in a Purchase Order. Supplier will deliver such parts of the Supplies to Think, at Think's chosen point of delivery. Think will pay a price no less than the documented costs to Supplier of the goods
and materials. Think may also obtain the Supplies covered by a Purchase Order elsewhere for the duration of the impediment and a reasonable period thereafter. 

20.   TERM AND TERMINATION

	(a)
	This
Agreement will become effective and enforceable against the parties on November 28, 2007 (the "Effective Date") and shall continue in force
unless and until terminated pursuant to Section 20(b) below.

	(b)
	After
December 31, 2009, this Agreement can be terminated with 12 months written notice, but not before all pending Purchase Orders are
fulfilled. The clauses meant to survive the termination 

9

 

(such
as clauses 8, 10, 11, 12, 13, 14, 16 and 17), will last until the obligations stated in the clauses lapses. 

21.   APPLICABLE LAW AND ARBITRATION

	(a)
	This
Agreement, and any document related to this Agreement (such as a Purchase Order), shall be governed by the laws of Switzerland, and all disputes
arising out of this Agreement shall be brought before the ordinary Swiss courts with Geneva as the legal venue.

	(b)
	If
either party initiates litigation on such contractual causes, the other party shall have the right to initiate mediation. The parties agree to
participate in good faith in the mediation and negotiations related thereto for a period of [**]. If the parties are not successful in resolving the dispute through the
mediation, then the parties may agree to submit by mutual written agreement the matter to binding arbitration by a sole arbitrator in accordance with the Swiss Arbitration Act. 

22.   DISCLAIMER; LIMITATION OF LIABILITY

IN
NO EVENT SHALL EITHER PARTY BE LIABLE FOR ANY INDIRECT, SPECIAL, INCIDENTAL OR CONSEQUENTIAL LOSS OR DAMAGES DUE TO ANY CAUSE WHATSOEVER, INCLUDING DAMAGES CAUSED BY THE NEGLIGENCE OF A PARTY, ITS
EMPLOYEES OR AGENTS OR OTHERWISE. NO SUIT OR ACTION SHALL BE BROUGHT AGAINST THE A PARTY MORE THAN TWO YEARS AFTER THE RELATED CAUSE OF ACTION HAS ACCRUED. 

IN
NO EVENT SHALL THE ACCRUED TOTAL LIABILITY OF SUPPLIER FROM ANY LAWSUIT, CLAIM, WARRANTY OR INDEMNITY EXCEED THE AGGREGATE SUM PAID TO THE SUPPLIER BY THINK UNDER THE PURCHASE ORDER THAT GIVES RISE
TO SUCH LAWSUIT, CLAIM, WARRANTY OR INDEMNITY. 

23.   CONFIDENTIALITY

Except
as otherwise expressly provided in Section 13(b) above, the treatment of all proprietary and confidential information exchanged under this Agreement shall be in accordance with the terms
and conditions of the Confidentiality Agreement entered into between the parties dated January 1, 2007. 

 SUPPLEMENTAL PROVISIONS APPLICABLE TO TOOLING  

22.   TOOLING ORDER

If
Think issues a Purchase Order for "Tooling", and such Purchase Order is accepted by Supplier, Supplier will design, fabricate and install the Tooling described in such Purchase Order subject to the
terms and conditions contained herein. 

23.   SAMPLES, STATUS

	(a)
	Supplier
shall, at its own expense, manufacture a mutually agreed to number of sample parts on the Tooling for inspection and/or testing by Think to ensure
the capability of the Tooling to produce parts which meet Think's requirements.

	(b)
	To
the extent technically feasible, the Tooling shall be designed and fabricated to be sufficiently durable to support the manufacture of all production and
service requirements through the production lifetime of the part.

	(c)
	The
Tooling will be deemed to be completed when the necessary samples have been submitted and approved by Think. Think may request Supplier to furnish
status reports on the design, 

10

 

construction
and acquisition of the Tooling. Supplier will notify Think immediately if the Tooling may not be completed by the completion date specified in the Purchase Order. 

24.   TITLE, IDENTIFICATION

	(a)
	All
title to any part of the Tooling under a Purchase Order ("Tooling Property") shall pass to Think as soon
as it is acquired or fabricated in accordance with the relevant Purchase Order. During the term of a Purchase Order, all such Tooling Property in the possession of Supplier shall be deemed to be
bailed and not be deemed to be a fixture or a part of Supplier's own real property.

	(b)
	Supplier
will:

	(i)
	properly
house and maintain such property on Supplier's or subcontractors premises,

	(ii)
	prominently
mark it Property of Think,

	(iii)
	refrain
from mixing it with the property of Supplier or with that of a third party,

	(iv)
	adequately
insure it against loss or damage, and

	(v)
	not
move it to another location whether owned by Supplier or a third party, without the prior consent of Think, except in the case of an emergency. Supplier
may move the Tooling property provided that it gives Think notice that the Tooling has been moved and the location of the Tooling as soon as reasonably practicable.

	(c)
	Supplier
shall indemnify Think against any claim adverse to Think's ownership of the Tooling Property, except as such claims may result from any acts or
omissions of Think. To the extent permitted by law, Supplier waives its right to object to the repossession of the Tooling Property in the event Supplier is involved in bankruptcy proceedings.

	(d)
	While
in its possession, Supplier shall maintain the Tooling Property in good condition and immediately replace any items which are lost or damaged. All
repaired or replaced Tooling Property shall remain the property of Think. None of the Tooling Property shall be sold or used in the production, manufacture or design of any goods or materials except
to the order of Think.

	(e)
	If
the Tooling Property is not utilized to produce any parts for Think for a period of two years, Supplier shall notify Think and request instructions as to
the disposition of the Tooling Property.

	(f)
	If
Supplier subcontracts all or any portion of the manufacture of the Tooling Property, Supplier shall ensure that Supplier' duties under this Agreement
also are obeyed by his sub-supplier.

	(g)
	Supplier's
responsibility continues beyond the expiry date of the related parts Purchase Order. 

25.   TOOLING PAYMENT

Any
payments made by Think for Tooling Property will be made to Supplier, even if the Supplier uses a sub-contractor. 

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CONFIDENTIAL
 MY 2007 A306 Energy System—STATEMENT OF WORK  

Lithium Ion Energy Pack system
  Statement of Work

A306—MODEL YEAR 2008

Category 1

 Agreement between THINK GLOBAL AS and A123 Systems,

pertaining to Lithium Ion Energy Pack System—Statement of

Work A306—MODEL YEAR 2008  

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CONFIDENTIAL
 MY 2007 A306 Energy System—STATEMENT OF WORK  

 Revision: 1.1  

 Date:  

 Prepared by: Erik Skaarnæs  

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 MY 2007 A306 Energy System—STATEMENT OF WORK  

 CONTENT  

									
	1	 	Content	 	 	 15	 
	

1	
 	

Program Information and Requirements	
 	
 	
 15	
 
	 	 	1.1	 	 DESCRIPTION OF SCOPE	 	 	15	 
	 	 	1.2	 	 PROTOTYPE TIMING	 	 	16	 
	 	 	1.3	 	 PROGRAM VOLUMES FORECAST	 	 	16	 
	 	 	1.4	 	 COST	 	 	16	 
	 	 	1.5	 	 DEVELOPMENT MILESTONES, PAYMENT	 	 	17	 
	 	 	1.6	 	 KEY SUPPLIER DELIVERABLES AND RESPONSIBILITIES	 	 	17	 
	 	 	1.7	 	 KEY THINK GLOBAL AS DELIVERABLES AND RESPONSIBILITIES	 	 	17	 
	 	 	1.8	 	 JOINTLY MANAGE COST, TIMING AND TOOLING	 	 	17	 
	 	 	1.9	 	 SUPPLIER QA SYSTEM	 	 	18	 
	 	 	1.10	 	CAD/CAE	 	 	18	 
	
 2	
 	

Supplier Responsibilities Throughout the Program and in the Production	
 	
 	
 19	
 
	 	 	2.1	 	 SOURCING	 	 	19	 
	 	 	2.2	 	 THINK GLOBAL AS AGREEMENT TO CHANGES	 	 	19	 
	 	 	2.3	 	 PRODUCT CONCERNS	 	 	19	 
	 	 	2.4	 	 MODIFY MANUFACTURING	 	 	20	 
	
 3	
 	

Attached Forms	
 	
 	
 21	
 
	

4	
 	

Document tracking control	
 	
 	
 22	
 
	

5	
 	

Document list (including but not limited to attachments above)	
 	
 	
 23	
 
	

6	
 	

Bill of Material	
 	
 	
 24	
 

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 MY 2007 A306 Energy System—STATEMENT OF WORK  

 1    PROGRAM INFORMATION AND REQUIREMENTS  

 1.1    Description of Scope

Supply
of the 18 kWh Lithium Ion Energy Pack System, as per attached BOM 

All
the parts are defined in the attached Bill of Materials with agreed Costs. 

Think
GLOBAL AS participates with the Tooling, Engineering, Development, Testing, Implementation and other Investment costs with a Value of
USD [**]. This Value applies to expenses related to the components defined in Bill of Materials. The Value is subject to
changes as design and contents of Bill of Materials may change. 

1PP
units to be priced at USD [**] each 

Payment
Terms are specified in the relevant Purchase Orders or as otherwise specified in the Supply Agreement. 

New
components or functions may be added to the Scope. The Target Value shall be modified taking into account modifications with the joint agreement of Supplier and Think GLOBAL AS. 

Think
GLOBAL AS' financial responsibilities to Supplier are limited to the agreed investment costs described in this Statement of Work with a Purchase Order, the Supply Agreement and any Blanket
Purchase Agreements and Delivery Schedules related to the scope of this Statement of Work 

This
Statement of Work is subject to the Supply Agreement entered into between the parties effective as of October 15, 2007 (the "Supply Agreement"). 

Supplier
is a Think GLOBAL AS category 1 according to THINK APQP guideline. Supplier has complete system responsibility. 

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1.2   Prototype Timing

Dates
and number of cars shown in table may be subject to change. Software may be released in stages incorporating increasing levels of functionality (TBD). 

							
	Code

 
	 	Milestones 	 	Dates 	 	QTY 
	 Prototype—AP
	 	 I functional prototype for bench purpose
	 	 [**]	 	 [**]
	 Prototype CP Parts
	 	 Confirmation Prototypes
	 	  [**]
	 	  [**]

	 PSW/1PP
	 	 First serial delivery with Parts Submission Warrant
	 	  [**]
	 	  [**]

	 JI
	 	 Job #1
	 	  [**]
	 	  [**]

1.3   Program Volumes Forecast

[**]
vehicles over [**] years. Volume is subject to change and take rate is dependent on end customer demand. Volume forecast in this document is for
development purposes only. Program volumes are referred to in Think GLOBAL Supply agreement and delivery schedules as such. Termination is subject to Think supply agreement. 

1.4   Cost

Agreed
Cost are detailed in attachment E—Bom of Materials 

Supplier
will be responsible for delivery of the subsystem/component to Target Costs and Values agreed between Think GLOBAL AS and Supplier during the program. 

The
parties shall use commercially reasonable efforts to cooperate in identifying a target annual cost reduction of [**]% pcs. The parties shall equally share the benefits
achieved by any such reduction. In addition prices are subject to volume and are defined in the volume vs price matrix in Appendix        attached hereto. 

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1.5   Development milestones, payment

	

	Program
Kick-Off — [**] — USD [**] NRE

	

	Delivery
A Bench proto — [**] — USD [**] NRE

	–
	Intended
for preliminary vehicle integration on vehicle test bench

	–
	[**]
Units @ USD [**] ea.

	

	Delivery
B Func protos - [**] — USD [**] NRE

	–
	Intended
for in-vehicle integration, i.e. must be correct mechanical form and fit

	–
	Up
to [**] units @ USD [**] ea.

	

	Final
Payment of USD $[**] to be paid to Supplier after completion and delivery of successful production pilot. 

Meeting
timing milestones is of great importance. Major delays, greater than [**], that is caused solely by the Supplier and not deemed an excusable delay pursuant to
Section 19 of the Supply Agreement will release a credit of USD [**] per month of delays vs the NRE amount of USD [**] up to a
maximum credit of USD [**]. 

1.6   Key Supplier Deliverables and Responsibilities (including but not limited to):

	[**]
	. 

	

	Any
Supplier deliverables and responsibilities in addition to the above will be mutually agreed in writing. 

1.7   Key Think GLOBAL AS Deliverables and Responsibilities

	[**]
	. 

1.8   Jointly Manage Cost, Timing and Tooling

SUPPLIER to manage jointly with Think GLOBAL AS costs, timing and tooling to meet vehicle program goals and objectives. 

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1.9   Supplier QA System

Supplier
to comply with and maintain a documented QA system. Think GLOBAL AS has the right to assess Supplier's QA system. 

1.10 CAD/CAE

Supplier
to develop and maintain Computer Aided Design/Computer Aided Engineering models for parts and tool design. 

CAD/CAE
system must be Catia compliant. Cad is master. A123 will supply IGES files 

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 MY 2007 A306 Energy System—STATEMENT OF WORK  

 2    SUPPLIER RESPONSIBILITIES THROUGHOUT THE PROGRAM AND IN THE PRODUCTION  

2.1   Sourcing

Supplier
will be responsible for sub-supplier selection and management if not otherwise agreed with Think GLOBAL AS for specific components. 

Direct
sub-suppliers and monitor their progress toward program timing goals and technical quality requirements including APQP, FMEA and other relevant processes. 

2.2   Think GLOBAL AS Agreement to Changes

Think
GLOBAL AS's Supplier Change Enquiries (SCE) is an integral part of this document and shall be the reference document for all changes proposed both by Supplier and Think GLOBAL AS. Except as
otherwise expressly indicated, the change order process in Section 2(d) of the Supply Agreement shall apply to this Statement of Work. 

Supplier
shall obtain Think GLOBAL AS's prior written agreement on feasibility and cost of change enquiries affecting Supplies. 

Change
enquiries are required for all substantive design/part/process changes after initial release. 

Supplier
can only implement a change after receipt of relevant Think release document and corresponding Purchase Order. 

2.3   Product Concerns

Investigate
concerns, provide resolutions and implement corrective actions using the appropriate problem solving process. 

Investigate
and resolve jointly with Think GLOBAL AS in-plant manufacturing and process concerns including: 

Provide
on-site vehicle launch support at Think GLOBAL AS assembly plant in Aurskog Norway 

Liability
for failed fit and function shall be in accordance with the Supply Agreement. 

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 MY 2007 A306 Energy System—STATEMENT OF WORK  

2.4   Modify Manufacturing

Modify
manufacturing and propose design modifications for continuous cost improvement. 

Acknowledged
and Agreed: 

			
	/s/ Jan Olaf Willums, CEO

	 	/s/ David Vieau, CEO

	THINK GLOBAL AS	 	Supplier

20

 

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 MY 2007 A306 Energy System—STATEMENT OF WORK  

3.     ATTACHED FORMS

					
	Form Name

 
	 	Applied

Supplier Category 	 
	 Tooling and Facility list
	 	 	1,2	 
	 Packaging Instruction
	 	 	1,2	 
	 Part Submission Warrant
	 	 	1,2	 
	 APQP Status Report
	 	 	1,2	 
	 Supplier Change Enquiry
	 	 	1,2,3	 

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 MY 2007 A306 Energy System—STATEMENT OF WORK  

4      DOCUMENT TRACKING CONTROL

Creation
date: 

Change
control: 

								
	Change

 
	 	Section 	 	Reason 	 
	 1.0—first draft
	 	 	 	 	 	 	 

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 MY 2007 A306 Energy System—STATEMENT OF WORK  

 5    DOCUMENT LIST (INCLUDING BUT NOT LIMITED TO ATTACHMENTS ABOVE)

											
	 
	 	Title 	 	Date

issued 	 	Revision 	 	Issued by 
	
	 	Blanket Purchase agreement	 	 	 	 	 	 	 	 Think
	
	 	Statement Of Work (SOW)	 	 	 	 	 	 	 	 Think
	
	 	System Development Timing Plan	 	 	 	 	 	 	 	 A123 Systems
	 Purchasing
	 	 Think Advanced Product Quality Planning (APQP) Guideline
	 	 	 	 	 	 	 	
 Think
	
	 	Think Production Part approval Process (PPAP) guideline	 	 	 	 	 	 	 	 Think
	
	 	Think Non Conformance guideline (NCR)	 	 	 	 	 	 	 	 Think
	
	 	Think Logistics guideline	 	 	 	 	 	 	 	 Think
	
	 	 System General Arrangement (GA) drawing
	 	 	 	 	 	 	 	
 Think
	
	 	Battery System Spec for A306	 	 	 	 	 	 	 	 Think
	
	 	 [**]
	 	 	 	 	 	 	 	
 [**]
	 Specifications
	 	 [**]
	 	 	 	 	 	 	 	
 [**]
	
	 	[**]	 	 	 	 	 	 	 	 [**]
	
	 	[**]	 	 	 	 	 	 	 	 [**]
	
	 	[**]	 	 	 	 	 	 	 	 [**]
	
	 	[**]	 	 	 	 	 	 	 	 [**]
	
	 	[**]	 	 	 	 	 	 	 	 [**]
	
	 	[**]	 	 	 	 	 	 	 	 [**]
	
	 	[**]	 	 	 	 	 	 	 	 [**]
	
	 	 Vehicle validation including battery systems in vehicle
	 	 	 	 	 	 	 	
 Think
	
	 	System Design and Process FMEAs	 	 	 	 	 	 	 	 A123 Systems
	 Quality
	 	 System DVP&R
	 	 	 	 	 	 	 	
 A123 Systems
	
	 	 System Life test plan and report
	 	 	 	 	 	 	 	
 A123 Systems

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 MY 2007 A306 Energy System—STATEMENT OF WORK  

 6    BILL OF MATERIAL

								
	PART No.

 
	 	PART NAME 	 	Cost curr 	 
	 51X.XXXX.A
	 	 	 	 	 	 	 

24

QuickLinks

Exhibit 10.27

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00146-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00146-of-00352.parquet"}]]