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  Exhibit 10.30    
    

Confidential
Materials omitted and filed separately with the

Securities and Exchange Commission. Asterisks denote omissions. 

EXCLUSIVE LICENSE AGREEMENT  

 BETWEEN  

 A123 SYSTEMS, INC.  

 AND  

 THE GILLETTE COMPANY  

 

  Table of Contents  

					
	Articles	 	 	 	 
	
1. Definitions	
 	
 	
3	
 
	
2. Grant of Rights to Licensed Technology	
 	
 	
10	
 
	
3. Grant of Rights to Trademarks	
 	
 	
13	
 
	
4. Learning Support	
 	
 	
15	
 
	
5. Royalties & Payment Terms	
 	
 	
16	
 
	
6. Reports & Records	
 	
 	
17	
 
	
7. Patent Prosecution & Infringement	
 	
 	
18	
 
	
8. Indemnification	
 	
 	
20	
 
	
9. Confidentiality	
 	
 	
23	
 
	
10. Representations & Warranties	
 	
 	
25	
 
	
11. Limitations on Liability	
 	
 	
25	
 
	
12. General Compliance with Laws	
 	
 	
29	
 
	
13. Term & Termination	
 	
 	
29	
 
	
14. Dispute Resolution	
 	
 	
30	
 
	
15. Miscellaneous	
 	
 	
30	
 
	
Schedules	
 	
 	

 	
 
	
Schedule 1.19—EXISTING PATENTS	
 	
 	
34	
 
	
Schedule 1.46.2—Obligations of PERMITTED ASSIGNEE OF GILLETTE	
 	
 	
35	
 
	
Schedule 1.47—Obligations of PERMITTED ASSIGNEE OF A123	
 	
 	
36	
 
	
Schedule 10.1—CONFLICTING OBLIGATIONS	
 	
 	
37	
 

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   Preamble  

        This Exclusive License Agreement (this "AGREEMENT"), effective as of the last date of execution of this AGREEMENT (the "EFFECTIVE
DATE"), is between A123 Systems, Inc. ("A123"), a Delaware corporation, with offices at 321 Arsenal Street, Watertown, Massachusetts 02472 and The Gillette Company ("GILLETTE"), a Delaware
Corporation having its principal office at The Prudential Center, 800 Boylston St., Boston Massachusetts 02199. 

        A123
is the owner of certain patent rights and know-how relating to A123's proprietary battery technologies. 

        GILLETTE
desires to obtain an exclusive license under A123's patent rights and related know-how in the FIELD (as later defined herein) upon the terms and conditions set
forth, below. 

        A123
and GILLETTE desire that A123 provide GILLETTE with training and technology transfer to assist GILLETTE in exploiting such patent rights and know-how in the FIELD. 

        A123
and GILLETTE intend to simultaneously enter into a supply agreement (the "SUPPLY AGREEMENT") pursuant to which A123 will supply to GILLETTE powder and other components relating to
A123's battery technologies. 

        A123
and GILLETTE therefore agree as follows: 

        1.     Definitions

        1.1.  "A123" is defined in the first paragraph 

        1.2.  "A123 INDEMNITEES" is defined in Paragraph 8.1.1. 

        1.3.  "AFFILIATE" means any corporation, association or other entity that directly or indirectly controls, is controlled by,
or is under common control with the party in question; through stock ownership, or other equity interest, direct or indirect. As used in the preceding sentence, "control", "controlled" and "control"
mean with respect to a subject entity, direct or indirect beneficial ownership of more than fifty percent (50%) of the voting or equity interest in the entity. 

        1.4.  "AGREEMENT" is defined in the first paragraph. 

        1.5.  "ALTERNATIVE REMEDY NOTICE" is defined in Paragraph 8.1.2.2.2. 

        1.6.  "BUSINESS DAY" means any day other than Saturday, Sunday, US federal holiday, or an Ohio holiday. Any other reference to
day or days will include Saturday, Sunday, US federal holiday, or an Ohio holiday. 

        1.7.  "BUSINESS TRANSFER" is defined in Paragraph 15.2. 

        1.8.  "BUSINESS TRANSFER CLOSING" is defined in Paragraph 15.2.1. 

        1.9.  "CASH-QUANTITY-TRADE DISCOUNTS" means (A) damaged and returned merchandise payments and allowances;
(B) incentive discounts for (i) ordering in quantity to receive reduced price and/or (ii) payment within a stipulated time period; (C) trade & cash
discounts & allowances; (D) value added tax, other taxes or duties, (E) quantity discounts and bracket pricing, to the extent included in invoiced sales of products;
(F) consumer price reductions; (G) merchandising and pricing funds provided to THIRD PARTIES including introductory merchandising funds to list new products; (H) other allowances,
adjustments, reimbursements, discounts, charge backs and rebates granted to THIRD PARTIES; (I) any other discounts which reduce pricing for the customer or end consumer, including without
limitation temporary price reductions, coupons, and other promotional spending with retail customers; provided that (AA) all such discounts are properly recognized according to GAAP and consistent
with GILLETTE's 

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internal
accounting for such discounts and (BB) no such discounts will be taken where discounts are contingent on a third party's marketing or merchandising efforts. 

        1.10.  "CELLS" means cells with a volume up to and including the [**] cell in the marketplace today,
no greater than [**] centimeters ([**]cc), in any form factor, that utilizes NANOPHOSPHATE and/or LTO, with or without other related materials. 

        1.11.  [**].  

         1.12.  "CONFIDENTIAL INFORMATION" is defined in Paragraph 9.1. 

        1.13.  "CONFLICTING OBLIGATION" means a contractual obligation of A123 to a THIRD PARTY that does not allow A123 to include
claims in FUTURE PATENTS and/or any trade secrets in the FUTURE KNOW-HOW, 

        1.13.1.  A123 & SUBSIDIARY Developments. with respect to developments of A123 or its SUBSIDIARIES, solely where such
obligation was in place prior to December 31, 2007; 

        1.13.2.  Contractor Developments. with respect to developments of a contractor to A123, where the contractor is expected to
improve or enhance the LICENSED TECHNOLOGY, solely where such obligation was in place prior to December 31, 2007; and for other contractors, solely where such obligation was in place prior to
the later of 

        1.13.2.1.  December 31, 2007, 

        1.13.2.2.  for FUTURE PATENTS developed by such contractor only, the date A123 obtained rights in such patent applications or
patents, and 

        1.13.2.3.  for FUTURE KNOW-HOW developed by such contractor only, the date A123 obtained rights in such FUTURE
KNOW-HOW; and 

        1.13.3.  Developments Licensed from 3rd Parties. with respect to developments licensed from a third party
to A123 where such development was not the result of research and/or development work contracted out by A123 to the third party, solely where such obligation was in place prior to the later of 

        1.13.3.1.  December 31, 2007, 

        1.13.3.2.  for FUTURE PATENTS only, the date A123 obtained rights in such patent applications or patents and, 

        1.13.3.3.  for FUTURE KNOW-HOW only, the date A123 obtained rights in such FUTURE KNOW-HOW; 

provided
that A123 does not enter into any CONFLICTING OBLIGATION with the intent of reducing GILLETTE's or GILLETTE's AFFILIATEs' rights under this AGREEMENT. Any renewals of CONFLICTING OBLIGATIONS
upon their expiration will continue to be treated as a CONFLICTING OBLIGATION from the original date of the CONFLICTING OBLIGATION that was in effect on December 31, 2007. 

        1.14.  "DISPUTE" is defined in Paragraph 14.1. 

        1.15.  "EFFECTIVE DATE" is defined in the first paragraph. 

        1.16.  "END USE DEVICE" means an end-use device intended for use with a LICENSED PRODUCT as its power source. 

        1.17.  "EQUIPMENT KNOW-HOW" means A123's know-how regarding the identity of suppliers and design
specifications for equipment used by A123's suppliers for the following processes: 

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        1.17.1.  [**] for NANOPHOSPHATE and/or LTO, with or without certain other related materials, or other
raw materials developed by A123, its SUBSIDIARIES or contractors; 

        1.17.2.  [**]; 

        1.17.3.  [**]; 

        1.17.4.  [**]; 

        1.17.5.  all CELL assembly processes; 

        1.17.6.  formation and conditioning; 

        1.17.7.  testing and sorting; and 

        1.17.8.  inspection and quality assurance. 

        1.18.  "EXISTING KNOW-HOW" means the KNOW-HOW that exists on the EFFECTIVE DATE. 

        1.19.  "EXISTING PATENTS" means those patent applications and patents set forth in Schedule 1.19 hereto, and any
related continuations, continuations-in-part, divisionals, reissues, and reexaminations; and foreign counterparts and/or equivalents thereof. 

        1.20.  "FIELD" means the following electronic devices: 

        1.20.1.  photography, imaging, audio and/or video devices; 

        1.20.2.  except as set forth in Paragraphs 1.20.15.3 and 1.20.15.4, handheld and console electronic gaming devices and
related peripherals and accessories (including, for example, Sony PSP, Nintendo DS, Xbox 360, wireless controllers for same, etc.); 

        1.20.3.  computing devices (including, for example, laptops and personal digital assistants), 

        1.20.4.  except as set forth in Paragraphs 1.20.15.3 and 1.20.15.4, communication devices (including, for example, cell
phones, pagers, walkie-talkies); 

        1.20.5.  location devices; 

        1.20.6.  medical devices (including, for example, hearing aids, portable defibrillators, sphygmomanometers, and thermometers)
sold directly to consumers, it being acknowledged that, without limitation, A123 may manufacture, have manufactured, use and sell or have sold similar or identical products directly to hospitals or
doctors offices, which sales will be outside the FIELD; 

        1.20.7.  except as set forth in Paragraph 1.20.15.9 safety and security devices (including, for example, abduction
alarms, laser guard fences, motion detectors, personal security alarms, security systems, surveillance devices, and smoke detectors); 

        1.20.8.  oral care devices; 

        1.20.9.  beauty care devices; 

        1.20.10.  shaving (wet and dry) devices; 

        1.20.11.  cordless household appliances (including, for example, cordless knives, stick mixers, etc.); 

        1.20.12.  except as set forth in Paragraph 1.20.15 devices primarily marketed as home care devices, other than vacuum
cleaners; 

5

 

        1.20.13.  vacuum cleaners having accommodation for removably receiving a disposable sheet; and 

        1.20.14.  [**] and related products primarily intended for use within the above applications, but may
also have application with devices in other fields due to the potential universality of such [**] or related product, it being acknowledged that similar or identical
[**] sold primarily for use outside the above applications will not be within the FIELD; and 

        1.20.15.  Exclusions to FIELD. without intending to broaden the scope of Paragraphs 1.20.1 through 1.20.14,
specifically excludes, 

        1.20.15.1.  stationary power devices, 

        1.20.15.2.  power tools (professional and/or consumer), 

        1.20.15.3.  products primarily marketed or packaged as toys, it being acknowledged that similar products may be included in
the FIELD pursuant to Paragraphs 1.20.2 and 1.20.4, so long as such products are not primarily marketed or packaged as toys, 

        1.20.15.4.  hobby products (such as remote control cars, boats and airplanes), it being acknowledged that similar products may
be included in the FIELD pursuant to Paragraphs 1.20.2 and 1.20.4, 

        1.20.15.5.  transportation or aviation products, 

        1.20.15.6.  generators, compressors and other pump products; 

        1.20.15.7.  devices marketed as home workshop products and /or marketed as construction worksite products, including but not
limited to lasers and security devices marketed in that manner; 

        1.20.15.8.  consumer and professional lawn and garden products (such as hedge clippers, lawn mowers and leaf blowers) and 

        1.20.15.9.  watches and clocks. 

        1.21.  "FTE" is defined in Paragraph 4.3. 

        1.22.  "FUTURE KNOW-HOW" means any KNOW-HOW that is developed during the period between the EFFECTIVE
DATE and the [**] year anniversary of the EFFECTIVE DATE, whether developed by A123, an AFFILIATE of A123, and/or a contractor of A123 (to the extent such contractor is willing
to permit A123 to disclose such KNOW-HOW to GILLETTE in such contractor's sole discretion); provided that, such KNOW-HOW will constitute FUTURE KNOW-HOW only where
A123 does not have a CONFLICTING OBLIGATION. 

        1.23.  "FUTURE PATENTS" means, with respect to inventions whether developed by A123, an AFFILIATE of A123, and/or a contractor
of A123 (to the extent such contractor is willing to assign such rights to A123 in such contractor's sole discretion) and where A123 does not have a CONFLICTING OBLIGATION: 

        1.23.1.  Patents on KNOW-HOW. claims in A123's patent applications and resulting patents where such patent
applications were filed after the EFFECTIVE DATE and encompass any EXISTING KNOW-HOW and/or FUTURE KNOW-HOW; 

        1.23.2.  Selection Inventions. claims in A123's patent applications and resulting patents where such patent applications were
filed after the EFFECTIVE DATE and such claims fall within the scope of any claim(s) of EXISTING PATENTS; 

6

 

        1.23.3.  Additional Inventions. claims in A123's patent applications and patents covering the subject matter set forth in
Paragraphs 1.23.3.1 - 1.23.3.4, which claims describe inventions developed during the period between the EFFECTIVE DATE and the [**] year
anniversary of the EFFECTIVE DATE: 

        1.23.3.1.  CELLS and/or [**] per se, 

        1.23.3.2.  methods of making CELLS and/or [**], 

        1.23.3.3.  methods of using CELLS and/or [**], 

        1.23.3.4.  materials employed in the making of CELLS and/or [**]. 

        1.24.  "GAAP" means generally accepted accounting principles in the US. 

        1.25.  "GILLETTE" is defined in the first paragraph. 

        1.26.  "GILLETTE-IMPROVED IP" means all intellectual property in and to improvements and/or enhancements of the LICENSED
KNOW-HOW first conceived and actually or constructively reduced to practice by GILLETTE or any of their AFFILIATEs during the TERM. 

        1.27.  "GILLETTE INDEMNITEES" is defined in Paragraph 8.1.2.1. 

        1.28.  "GROSS SALES" means the invoiced price of sales, prior to any adjustments resulting from offsets and/or deductions, of
product (i.e., all merchandise items including finished products, and approved intermediates) sold to THIRD PARTIES (including distributors, customers
and/or consumers by GILLETTE). 

        1.29.  "INDEMNITIEES" is defined in Paragraph 8.2. 

        1.30.  "INITIAL LICENSE FEES" is defined in Paragraph 5.1.1 (INITIAL LICENSE FEES). 

        1.31.  "KNOW-HOW" means all of the following that A123 owns or possesses, that is not publicly known: 

        1.31.1.  know-how and trade secrets relating to 

        1.31.1.1.  CELLS and [**], 

        1.31.1.2.  the most up to date version (as well as background on prior versions) of formulations, specifications, quality
assurance methods, and processes for production of NANOPHOSPHATE and/or LTO, with or without other related materials and electrodes, and production of electrolyte for CELLS, 

        1.31.1.3.  safety and performance of the CELLS and [**], 

        1.31.1.4.  support of the products supplied by A123 under the SUPPLY AGREEMENT and 

        1.31.2.  the EQUIPMENT KNOW-HOW. 

        1.32.  "LEARNING PHASE" means the period commencing on the EFFECTIVE DATE and expiring on the [**]
year anniversary of the EFFECTIVE DATE. 

        1.33.  "LICENSED KNOW-HOW" means the EXISTING KNOW-HOW and the FUTURE KNOW-HOW. 

        1.34.  "LICENSED PRODUCT" means any CELL or [**] that: 

        1.34.1.  absent the licenses granted hereunder, would infringe one or more claims of the PATENT RIGHTS; and/or 

        1.34.2.  is developed, manufactured or used by using EXISTING KNOW-HOW or FUTURE KNOW-HOW. 

        1.35.  "LICENSED TECHNOLOGY" means the PATENT RIGHTS and LICENSED KNOW-HOW. 

        1.36.  "LTO" means lithium titanates for use as an electrode active material. 

7

 

 

        1.37.  "MATERIAL ADVERSE EFFECT" means any material adverse change, event, circumstance or development with respect to, or
material adverse effect on, the ability of GILLETTE or any AFFILIATE of GILLETTE to exercise its license rights hereunder in the FIELD, including GILLETTE's or any AFFILIATE of GILLETTE's ability to
commercialize the technology licensed hereunder in the FIELD. 

        1.38.  [**].  

         1.39.  "MONTH" means each calendar month. 

        1.40.  "NANOPHOSPHATE" means A123's proprietary formulation of a nanoscale lithium transition metal phosphate. 

        1.41.  "NET SALES" and "NOS" means GILLETTE's, GILLETTE's AFFILIATEs', and
permitted SUBLICENSEE(s)', if any, GROSS SALES to a THIRD PARTY of LICENSED PRODUCT less the total of the following: CASH-QUANTITY-TRADE DISCOUNTS and Value Added Taxes (VAT). Any of the
deductions listed above which involve a payment by GILLETTE will be taken as a deduction against aggregate sales for the QUARTER in which the expense is accrued by GILLETTE. For purposes of
determining NOS, product will be deemed to be sold when shipped to a THIRD PARTY customer of GILLETTE. Sales between or among GILLETTE or its SUBLICENSEE(s) will be excluded from the computation of
NOS, but sales by GILLETTE or its SUBLICENSEE(S) to their THIRD PARTY customers will be included in the computation of NOS. NOS will be translated into US dollars on a QUARTERly basis using the
average of the exchange rates on the first and last working days of each MONTH as published in the Wall Street Journal. If LICENSED PRODUCT is sold to an AFFILIATE of GILLETTE, then NET SALES for such
LICENSED PRODUCT will be calculated based on the average price of the LICENSED PRODUCT charged to an independent THIRD PARTY during the same reporting period or, in the absence of such sales, on the
fair market value of the LICENSED PRODUCT. Where LICENSED PRODUCT is
OTHERWISE DISTRIBUTED, the NOS of the LICENSED PRODUCT will be the average of the NOS of the LICENSED PRODUCT that was sold to THIRD PARTIES during the most recent QUARTER; and in the event there have
been no previous sales of the LICENSED PRODUCT, then the NOS of such LICENSED PRODUCT will be the average selling price at which products of similar kind and quality, sold in similar quantities, are
then currently being offered for sale by other manufacturers. 

        1.42.  "OTHERWISE DISTRIBUTED" means the transfer of LICENSED PRODUCT by the licensee to a THIRD PARTY for less than fair
market value, other than for purposes of scrapping or donations to charitable institutions. 

        1.43.  "PARTY" means A123 or GILLETTE and "PARTIES" means A123 and GILLETTE
collectively. 

        1.44.  "PATENT RIGHTS" means the EXISTING PATENTS and the FUTURE PATENTS. 

        1.45.  "PATENT TERM" means the period commencing on the EFFECTIVE DATE and ending on the expiration, invalidation or
abandonment of all issued patents and filed patent applications within the PATENT RIGHTS. 

        1.46.  "PERMITTED ASSIGNEE OF GILLETTE" means: 

        1.46.1.  any AFFILIATE of GILLETTE that assumes all or substantially all of GILLETTE's assets relating to the sale of LICENSED
PRODUCTs in the FIELD; or 

        1.46.2.  any THIRD PARTY that, at the time of the applicable assignment, enters into a binding written agreement having terms
substantially similar in scope to those set forth in Schedule 1.46.2. 

8

 

        1.47.  "PERMITTED ASSIGNEE OF A123" means any THIRD PARTY that, at the time of the applicable assignment, enters into a
binding written agreement having terms substantially similar in scope to those set forth in Schedule 1.47. 

        1.48.  "PERMITTED SUBLICENSEE" means any THIRD PARTY that (i) is not involved in the [**], and
(ii) does not derive more than [**] Dollars ($[**]) in revenue annually from providing [**] to any other THIRD PARTY that
derives revenue from the CELLS or [**] in the market segments listed in Paragraph 1.20.15 (Exclusions to FIELD), and (iii) does not perform
[**] for itself or any other person or entity; provided that such THIRD PARTY agrees with GILLETTE to a binding written agreement that requires terms substantially equivalent
to the following: 

        1.48.1.  Non-compete. Such THIRD PARTY will enter into a binding, written agreement that such THIRD PARTY will not
compete in any of the lithium phosphate CELLS or [**] market segments listed in Paragraph 1.20.15 (Exclusions to FIELD) for a period of [**]
years from the EFFECTIVE DATE. 

        1.48.2.  No-sublicensing. Such THIRD PARTY will not sublicense any of the LICENSED TECHNOLOGY to any other THIRD
PARTY for any purposes. 

        1.48.3.  No Tasks Outside FIELD. None of the employees or personnel provided with access to the LICENSED TECHNOLOGY will be
permitted, for at least [**] years following their access to such LICENSED TECHNOLOGY, to perform tasks related to the [**] for application outside the
FIELD, 

        1.48.4.  Abide by Confidentiality. Such THIRD PARTY will meet the confidentiality restrictions set forth in Article 9
(Confidentiality) to the same extent such provisions apply to GILLETTE. 

        1.49.  "PROPOSED SETTLEMENT" is defined in Paragraph 7.3.2. 

        1.50.  "QUARTER" means any three (3) month period beginning on any January 1 and ending on the next
March 31, beginning on any April 1 and ending on the next June 30, beginning on any July 1 and ending on the next September 30, beginning on any October 1 and
ending on the next December 31, provided however that the first QUARTER for the purposes of this AGREEMENT begins on the EFFECTIVE DATE and ends on the earliest of the next March 31,
June 30, September 30 or December 31. 

        1.51.  "REVIEW PERIOD" is defined in Paragraph 3.3.1. 

        1.52.  "ROFO TECHNOLOGIES" is defined in Paragraph 2.4. 

        1.53.  "ROYALTIES" is defined in Paragraph 5.1.3 (ROYALTIES). 

        1.54.  "ROYALTY-BEARING PRODUCT" means a LICENSED PRODUCT that, 

        1.54.1.  but for the rights granted under this AGREEMENT, would otherwise infringe any one or more claims in one or more
unexpired, maintained patent(s) included within PATENT RIGHTS that has not been disclaimed, abandoned or held invalid by a decision beyond the right of review; and/or 

        1.54.2.  that both (i) utilizes KNOW-HOW and (ii) is sold or OTHERWISE DISTRIBUTED during the seven
(7) year period from the EFFECTIVE DATE. 

        1.55.  "SUBLICENSEE" means the beneficiary of a sublicense of the LICENSED TECHNOLOGY from GILLETTE in conformance with
Paragraphs 2.1 (LICENSED TECHNOLOGY), 2.2 (Sublicenses), and/or 3.1 (TRADEMARK), and their subparagraphs. 

9

 

        1.56.  "SUBSEQUENT CONTRACT" means a written binding contract entered into by A123 on or after the EFFECTIVE DATE, such as a
license agreement, supply agreement, services agreement, settlement agreement, reseller agreement or other agreement; provided that, for the avoidance of doubt, SUBSEQUENT CONTRACTS do not include any
written terms imposed by or otherwise required by any final unappealable adjudication. 

        1.57.  "SUBSEQUENT CONTRACT TERMINATION NOTICE" is defined in Paragraph 11.4.2. 

        1.58.  "SUBSIDIARY" of a PARTY means a wholly-owned subsidiary of such PARTY. 

        1.59.  "SUPPLY AGREEMENT" is defined in the first paragraph. 

        1.60.  "SUPPORT" is defined in Paragraph 4.1. 

        1.61.  "TECHNOLOGY APPLICATION" is defined in Paragraph 8.1.2.1. 

        1.62.  "TERM" is defined in Paragraph 13.1. 

        1.63.  "THIRD PARTY" means any person or entity that is not A123, GILLETTE or one of their AFFILIATEs. 

        1.64.  "TRADEMARK" means A123's trademark "NANOPHOSPHATETM". 

        1.65.  "US" means the United States of America. 

        1.66.  [**].  

         1.67.  [**].  

         2.     Grant of Rights to LICENSED TECHNOLOGY

        2.1.  LICENSED TECHNOLOGY. Subject to the terms of this AGREEMENT, A123 hereby grants to GILLETTE and AFFILIATEs of GILLETTE
an exclusive (except as provided in Paragraphs 2.1.1 (Rights Retained) or 2.1.4 (Exclusivity), and their subparagraphs), worldwide, royalty-bearing license under the LICENSED TECHNOLOGY to
develop, make, have made, use, sell, offer to sell, lease, and import LICENSED PRODUCTs and END-USE DEVICEs for use in the FIELD during the TERM. The license includes the limited right to
sublicense certain THIRD PARTIES set forth in Paragraph 2.2 (Sublicenses) and its subparagraphs. 

        2.1.1.  Rights Retained. A123 retains all other rights under LICENSED TECHNOLOGY, including without limitation: 

        2.1.1.1.  all rights under the LICENSED TECHNOLOGY outside the FIELD; and 

        2.1.1.2.  all rights under the LICENSED TECHNOLOGY relating to products that are neither a LICENSED PRODUCT nor an
END-USE DEVICE, regardless of whether such products/devices are within the FIELD. 

        2.1.2.  When Effective. The grant under Paragraph 2.1 (LICENSED TECHNOLOGY) will not be effective until A123 receives
the INITIAL LICENSE FEES contemplated in Paragraph 5.1.1 (INITIAL LICENSE FEES). 

        2.1.3.  Fully Paid Up & Conversion to Non-Exclusive. Upon expiration of this AGREEMENT due to termination
of the PATENT TERM (and not due to any other cause for termination of this AGREEEMENT hereunder), the license grant under Paragraph 2.1 (LICENSED TECHNOLOGY) will be deemed
fully-paid up, and become non-exclusive, irrevocable and perpetual, surviving such expiration of this AGREEMENT. 

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        2.1.4.  Exclusivity.  

         2.1.4.1.  Multiple Field LICENSED PRODUCTS. Some LICENSED PRODUCTS may have application within the FIELD and outside the FIELD. In such instances,
GILLETTE's exclusivity limits only A123's or A123's sublicensees' rights to sell such LICENSED PRODUCTS in the FIELD, while A123 and such sublicensees, if any, may sell the identical LICENSED PRODUCTS
outside the FIELD. For instance and without limitation: 

        2.1.4.1.1.  per Paragraphs 2.1 (LICENSED TECHNOLOGY), and 1.20.14 GILLETTE is granted the exclusive right to sell
LICENSED PRODUCTS that are [**] and END-USE DEVICEs primarily intended for use in the FIELD, while A123 and A123's sublicensees remain unrestricted in their ability
to sell similar or identical [**] and end-use products primarily for use outside the FIELD, regardless of whether such [**] or other
products have application to LICENSED PRODUCTS in the FIELD due to the [**] of such [**] or related product; 

        2.1.4.1.2.  per Paragraphs 2.1 (LICENSED TECHNOLOGY), and 1.20.6, GILLETTE is granted the exclusive right to sell
LICENSED PRODUCTS and END-USE DEVICEs that are
defibrillators, while A123 and A123's sublicensees remain unrestricted in their ability to sell such defibrillators to doctors or hospitals for such doctors' or hospitals' use on patients; and 

        2.1.4.1.3.  per Paragraphs 2.1 (LICENSED TECHNOLOGY), and 1.20.15 GILLETTE is granted the exclusive right to sell
END-USE DEVICEs that are [**] that are not toys, and LICENSED PRODUCTS primarily intended for use in such [**], while A123 and A123's
sublicensees remain unrestricted in their ability to sell CELLS and [**] for use in [**] that are primarily directed to children, and to sublicense to
any THIRD PARTY the right to make, use, import and sell such [**] for use with CELLS and [**], regardless of whether the products are functionally
similar or identical. 

        2.1.4.2.  Exclusion for Current [**] Business. Notwithstanding the exclusive license grant under
Paragraph 2.1 (LICENSED TECHNOLOGY), A123 may make, have made, import, offer to sell and sell products in the FIELD for sales and service to [**] solely where A123 has
delivered a sample of such product to [**] prior to the EFFECTIVE DATE. 

        2.2.  Sublicenses.

        2.2.1.  Sublicense for [**]. GILLETTE and its AFFILIATEs may sublicense the LICENSED TECHNOLOGY to any
THIRD PARTY manufacturer of GILLETTE for the [**] to be provided to GILLETTE and/or its AFFILIATEs. Notwithstanding the foregoing or anything else to the contrary in this
AGREEMENT, GILLETTE and its AFFILIATES each will not sublicense to any THIRD PARTY the right under the LICENSED TECHNOLOGY to [**]. 

        2.2.2.  Sublicense for Development / Manufacturing for GILLETTE. GILLETTE and its AFFILIATEs may sublicense its rights under
Paragraph 2.1 (LICENSED TECHNOLOGY) and its subparagraphs to a PERMITTED SUBLICENSEE for the purpose of developing and/or manufacturing LICENSED PRODUCTs in the FIELD solely for the purpose of
selling such LICENSED PRODUCTs to GILLETTE and/or any AFFILIATE of GILLETTE. 

        2.2.3.  Sublicense for Development / Manufacturing & Resale for THIRD PARTY. Subject to A123's prior written consent,
in A123's sole discretion, on a case-by-case basis, GILLETTE and its AFFILIATEs may sublicense its rights under Paragraph 2.1 (LICENSED TECHNOLOGY) and its subparagraphs
to a THIRD PARTY for the purpose of developing and/or manufacturing LICENSED PRODUCTs in the FIELD for subsequent selling of such 

11

 

LICENSED
PRODUCTs to THIRD PARTIES in the FIELD. It is anticipated that, if A123 were to approve any such sublicenses, substantial restrictions would be placed on the activities of such THIRD PARTY
sublicensee, which may include a separate written agreement between A123 and such THIRD PARTY sublicensee. 

        2.2.4.  Sublicense [**] for CELL Assembly & Resale. GILLETTE and its AFFILIATEs may sublicense
its rights under Paragraph 2.1 (LICENSED TECHNOLOGY) and its subparagraphs to [**] for the purposes of (i) [**] in the FIELD, and
(ii) [**] in the FIELD. Notwithstanding the foregoing, such right to sublicense to [**] does not include the right to sublicense the LICENSED
TECHNOLOGY for coating cathodes for lithium ion cells. 

        2.2.5.  Sublicense for END-USE DEVICEs. GILLETTE and its AFFILIATES may sublicense its PATENT RIGHTS relating to
END-USE DEVICEs under Paragraph 2.1 (LICENSED TECHNOLOGY) and its subparagraphs to any THIRD PARTY manufacturer, wholesaler or retailer of such END-USE DEVICEs. 

        2.2.6.  Sublicensee Compliance / GILLETTE Liability. With respect to each permitted SUBLICENSEE, 

        2.2.6.1.  such SUBLICENSEE will be required to comply with the restrictions of this AGREEMENT, including without limitation
the restrictions set forth in Article 9 (Confidentiality), and will not be permitted to further sublicense the LICENSED TECHNOLOGY, with the exception of SUBLICENSEES under
Paragraph 2.2.5 (Sublicense for END-USE DEVICEs) who will be permitted to further sublicense; and 

        2.2.6.2.  GILLETTE will remain liable for all acts and omissions of such SUBLICENSEE relating to obligations under this
AGREEMENT, as if such acts or omissions were by GILLETTE. 

        2.2.7.  Incorporation & Copy of Sublicense. GILLETTE will incorporate terms and conditions into its sublicense
agreements sufficient to enable GILLETTE to comply with this AGREEMENT. GILLETTE
will promptly furnish A123 with the names of any SUBLICENSEE, promptly after execution of a sublicense agreement with the SUBLICENSEE. 

        2.2.8.  Restrictions—[**]. Notwithstanding anything to the contrary in this
Paragraph 2.2 (Sublicenses) and its subparagraphs, GILLETTE, its AFFILIATEs and/or SUBLICENSEEs will not, under any circumstances, sublicense any of the LICENSED TECHNOLOGY to any THIRD PARTY
for the development or manufacture of [**]. 

        2.3.  Non-exclusive Licenses in Other Fields. Upon request by GILLETTE, A123 will reasonably consider in good
faith on a case-by-case basis, amending the licenses granted under Paragraph 2.1 (LICENSED TECHNOLOGY) and its subparagraphs to include non-exclusive
licenses in certain fields outside of the FIELD, in A123's sole discretion and subject to mutually agreed terms, fees and conditions. For the avoidance of doubt, except as expressly provided in
Paragraph 2.4 (Right of First Offer) and its subparagraphs, A123 is under no obligation to notify GILLETTE or to grant GILLETTE a right of first offer or any other right to bid on such licenses
prior to granting such rights to a THIRD PARTY. 

        2.4.  Right of First Offer. A123 hereby grants to GILLETTE a right of first offer to a license solely in the FIELD, under
patents and know-how, not already licensed under Paragraph 2.1 (LICENSED TECHNOLOGY) and its subparagraphs relating to lithium-ion technologies developed by A123 which
may be pertinent to CELLS, including but not limited to: [**] or other relevant developments, if A123 is willing to license such technologies to any THIRD PARTY (the "ROFO
TECHNOLOGIES"). 

12

 

        2.4.1.  First Offer Procedure. Such right of first offer will mean that if A123 wishes to license the ROFO TECHNOLOGIES to any
THIRD PARTY in the FIELD, then A123 will provide written notice to GILLETTE, prior to offering the subject ROFO TECHNOLOGIES to a THIRD PARTY. GILLETTE will then have [**] from
receipt of such notice in which to provide A123 with proposed terms under which GILLETTE would license such ROFO TECHNOLOGIES from A123. A123 would review such proposed terms but will be under no
obligation to negotiate further with GILLETTE nor under any restriction on A123's right to accept any other offers from any THIRD PARTY for the ROFO TECHNOLOGIES after such
[**] period. 

        2.5.  Non-exclusive GILLETTE IMPROVED IP License. GILLETTE hereby grants to A123 and its SUBSIDIARIES a
non-exclusive, irrevocable, royalty-free, worldwide, license under the GILLETTE IMPROVED IP to develop, make, have made, use, sell, offer to sell, lease, and import any
products outside the FIELD that incorporate the LICENSED
TECHNOLOGY or any GILLETTE IMPROVED IP to the extent GILLETTE has the right to grant such rights to A123. GILLETTE will use good faith efforts to secure the right to grant such rights to A123 but will
not be required to refuse to receive GILLETTE IMPROVED IP from SUBLICENSEES that otherwise are in conformance with the terms and conditions of this Agreement. Notwithstanding the foregoing, GILLETTE
will be under no obligation to disclose any GILLETTE IMPROVED IP to A123. 

        2.6.  Retained Federal Government Rights. GILLETTE acknowledges that the U.S. federal government retains a
royalty-free, non-exclusive, non-transferable license to practice any government-funded invention claimed in any PATENT RIGHTS as set forth in 35 U.S.C.
§§ 201-211, and the regulations promulgated thereunder, as amended, or any successor statutes or regulations. A123 represents and warrants that such US
Government rights will not result in GILLETTE or any AFFILIATEs of GILLETTE being required to obtain US government approval to manufacture CELLS and/or [**] outside of the US
under the intellectual property rights licensed under this AGREEMENT. 

        2.7.  Ownership of LICENSED TECHNOLOGY, No Additional Rights. As between GILLETTE and A123, A123 is the sole and exclusive
owner of all the LICENSED TECHNOLOGY. Nothing in this AGREEMENT will be construed to confer any rights upon GILLETTE by implication, estoppel, or otherwise as to any technology or patent rights of
A123 or any other entity other than the LICENSED TECHNOLOGY, FUTURE PATENTS, and FUTURE KNOW-HOW regardless of whether such technology or patent rights will be dominant or subordinate to
any LICENSED TECHNOLOGY. 

        3.     Grant of Rights to TRADEMARKS

        3.1.  TRADEMARK. A123 hereby grants to GILLETTE and AFFILIATEs of GILLETTE an exclusive worldwide, royalty-free,
non-transferable, non-sublicensable license to use the TRADEMARK during the TERM on and in connection with the manufacture, display, advertising, promotion, labeling, sale,
marketing, and distribution of LICENSED PRODUCTs in the FIELD. The license does not include the right to sublicense. 

        3.2.  Quality Control. A123 will have the right to monitor and observe the manufacture, processing, packaging and sale of all
LICENSED PRODUCTs intended to be marked with the TRADEMARK and to examine all finished LICENSED PRODUCTs intended to be marked with the TRADEMARK for the purpose of protecting and maintaining the
standards of quality established by A123 for products sold under the TRADEMARK, subject to the confidentiality obligations under Article 9 (Confidentiality). GILLETTE will permit A123's
authorized personnel to enter GILLETTE's and its SUBLICENSEEs' premises at all reasonable times, with at least [**] advance written notice, to inspect manufacturing, processing
and packaging facilities and operations where the LICENSED PRODUCTS intended to be marked with the TRADEMARK are being manufactured or stored, and to inspect and test all products produced for sale
under the
TRADEMARK. Such inspection will be limited to a maximum of [**] per QUARTER, and a reasonable number of lots of product inspected per inspection. A123 will be responsible for
all A123's costs associated with such inspection. If A123 at any time finds that any of such marked products are not being manufactured, processed, packaged or sold in accordance with standards of
quality acceptable to A123 or have been packaged in a misleading or deceptive manner, or otherwise have been prepared, packaged, advertised or sold in a manner in violation of this AGREEMENT, A123 may
notify GILLETTE in writing of such deficiencies, and if GILLETTE fails to correct such deficiencies within [**] after receipt of such notice, A123 may, at its election,
terminate this Article 3 (Grant of Rights to TRADEMARKS) effective immediately. 

13

 

 

        3.3.  Advertising & Packaging. All packages, labels, designs, descriptive materials and advertising of every type to be
used by GILLETTE in connection with LICENSED PRODUCTs bearing the TRADEMARK will be subject to A123's prior written approval per the approval process set forth in Paragraph 3.3.1 (Approval
Process), which will not be unreasonably withheld. GILLETTE will cause to appear on all materials on or in connection with which the TRADEMARK is used such legends, markings and notices as A123 may
reasonably request. 

        3.3.1.  Approval Process. A123 will review materials submitted by GILLETTE within [**] of receipt from
GILLETTE ("REVIEW PERIOD"). If A123 chooses not to approve the materials, then within the REVIEW PERIOD, A123 will provide written notice of such disapproval together with written reasons for such
disapproval. If A123 fails to respond to GILLETTE within the REVIEW PERIOD, then the materials will be deemed approved. 

        3.4.  Modification or Changes to TRADEMARKS by A123. If A123 modifies any TRADEMARK, then A123 will notify GILLETTE about the
modification and will allow GILLETTE a reasonable time to change the TRADEMARK on the LICENSED PRODUCT, packaging and any advertising materials for the LICENSED PRODUCT. Should A123 require that the
change be implemented within [**] or less from the date of A123's notification, and should there be any cost or expense involved in making A123's desired changes, or such
timing, over and above the costs incurred for packaging changes in the normal course of business, or if the change affects existing inventory, GILLETTE will notify A123 of the incremental cost and/or
expense, and in the event A123 elects to proceed with requiring GILLETTE to make such change to the TRADEMARK used on the LICENSED PRODUCT, A123 will pay the additional cost or expense within
[**] of receipt of an invoice from GILLETTE. 

        3.5.  TRADEMARK Matters.  

         3.5.1.  Ownership of TRADEMARKs. A123 expressly reserves the sole and exclusive ownership of the TRADEMARK and all rights relating thereto. Use of
the
TRADEMARK by GILLETTE under this AGREEMENT will inure to the benefit of A123. 

        3.5.2.  Similar TRADEMARKs. GILLETTE will not produce, sell or distribute, at any time, whether during or after the license
term, directly or indirectly, any LICENSED PRODUCT or similar product whose trademark, trade name or other designation is confusingly similar to the TRADEMARK to the extent that the LICENSED MARK is
valid and enforceable in the subject country. 

        3.5.3.  Maintenance of TRADEMARK. A123 will use good faith efforts to maintain and enforce the TRADEMARK for the TERM;
provided that (i) A123 may modify or replace such TRADEMARK as contemplated in Paragraph 3.4 (Modification or Changes to TRADEMARKS by A123) and its subparagraphs and (ii) A123's
decision to cease maintaining the TRADEMARK or any replacement will not be a breach of this AGREEMENT if A123 provides [**] prior written notice of such decision to GILLETTE.
GILLETTE will not do or permit to be done any act which prejudices, affects, impairs or destroys the title and interest of A123 in and to the TRADEMARK. If GILLETTE knows that any person, firm or
corporation is infringing the TRADEMARK, GILLETTE will promptly notify A123 and cooperate fully with A123 in the defense and protection of the TRADEMARK, provided that GILLETTE will not be required to
make any payments to A123 for costs incurred by A123 in the defense and protection of the TRADEMARK; and A123 will bear all reasonable costs associated with GILLETTE's cooperation and reimburse
GILLETTE accordingly. A123 reserves the right to prosecute or defend, at its own expense, all suits involving the TRADEMARK and the protection thereof. 

14

 

        3.5.4.  Use of A123 Name. GILLETTE may use the "A123" name in connection with the promotion and sale of LICENSED PRODUCTs
during the TERM, subject in each case to the prior written consent of A123 on a case-by-case basis. A123 may withdraw such consent at any time for no reason upon
[**] prior written notice to GILLETTE; and GILLETTE will be given a reasonable time to change any affected packaging or advertising materials equivalent to the timings set
forth in Paragraph 3.4 (Modification or Changes to TRADEMARKS by A123). Additionally, and without the consent of A123, if and after an initial press release as contemplated in
Paragraph 15.4 (Press Releases), GILLETTE may state on a non-confidential basis that it is licensed by A123 under LICENSED TECHNOLOGY in the FIELD. 

        3.5.5.  Use of Other PARTY's Name. Except as expressly authorized under Paragraph 3.5.4 (Use of A123 Name), neither
PARTY nor SUBLICENSEEs will use the name of the other PARTY or any variation, adaptation, or abbreviation thereof, or of any of its employees, or agents, or any trademark owned by the other PARTY
(subject to the license grant in Article 3 (Grant of Rights to TRADEMARKS), or any
terms of this AGREEMENT in any promotional material or other public announcement or disclosure without the prior written consent of the other PARTY or the particular individual. 

        3.6.  Indemnification. A123 will indemnify, defend and hold GILLETTE and its AFFILIATEs harmless from and against any and all
liability resulting from any claim of infringement of trademarks arising out of or related to the use of the TRADEMARK by GILLETTE and/or its AFFILIATEs in a manner authorized by this AGREEMENT. The
obligation of A123 to GILLETTE and its AFFILIATEs for such infringement or claims of infringement, will be conditioned on GILLETTE giving A123 reasonably prompt notice of any such claim or claims for
infringement, and giving A123 the authority to conduct the defense of any such action for infringement, with the understanding, however, that GILLETTE and/or its AFFILIATEs may retain additional
counsel at its expense and participate in any such litigation. 

        4.     Learning Support  

        4.1.  Learning Support. During the LEARNING PHASE, A123 will provide GILLETTE and its AFFILIATEs with necessary
support of
designated company expert resources as may be reasonably required to enable GILLETTE and its AFFILIATEs to practice A123's technology (the "SUPPORT"), including: 

        4.1.1.  Performance / Safety. any fundamental understanding of the technology performance and safety limitations; 

        4.1.2.  Methods / Procedures. methods and procedures which are critical to the ongoing understanding of key technology
attributes; 

        4.1.3.  Process Scale Up. key process scale up parameters and other considerations in transferring technology from the
laboratory to manufacturing; 

        4.1.4.  Successes & Failures. an understanding of what worked / what did not work in reaching the current state of
technology development; 

        4.1.5.  Q&A. access to A123 company expert resources to answer questions during the teaching period including visits to
GILLETTE and/or contractor factories and laboratories; 

        4.1.6.  Laboratories. access to laboratories and factories of A123, its SUBSIDIARIES and contractors to allow first hand
learning of key materials, formulations, methods and processes; 

        4.1.7.  Suppliers. access to A123 key suppliers of raw materials, intermediate materials, components, and analytical tools to
enable qualification of key materials and processes, subject to agreement of such supplier to provide such access; and 

15

 

        4.1.8.  Qualification. support from A123, its SUBSIDIARIES and contractors to enable qualification of key materials,
formulations, methods and processes at GILLETTE and approved contractor sites, including but not limited to verification trials and characterization tools. 

        4.2.  Support Structure. SUPPORT will be provided and scheduled in a reasonable manner, providing A123 with reasonable time to
provide appropriate resources without significant disruption to A123's business. 

        4.3.  Level of Support. The PARTIES anticipate that the SUPPORT can be sufficiently provided by approximately between
[**] and [**] full-time-equivalent A123 employees ("FTEs") during the LEARNING PHASE. A123 will not be obligated to provide
SUPPORT that requires more than [**] FTEs without additional charges. If the efforts of [**] FTEs do not result in a degree of SUPPORT satisfactory to
GILLETTE, then the PARTIES will negotiate in good faith additional FTEs and applicable charges for those FTEs. For the avoidance of doubt, A123 will not be in material breach of this
Section 4.3 due merely to GILLETTE seeking support that requires more than [**] FTEs or such higher number of FTEs as agreed by the PARTIES from time to time. 

        4.4.  Expenses. GILLETTE will pay to A123 all reasonable expenses
(i.e., travel expenses consistent with GILLETTE's travel policy, and related out-of-pocket expenses) incurred in
connection with the provision of SUPPORT hereunder. Such expenses will be paid by GILLETTE within [**] after GILLETTE's receipt of A123's complete and correct invoice, which
will include a statement fully itemizing expenses incurred. 

        4.5.  Failure to Provide Support. A123's material failure to provide SUPPORT as required in Article 4 (Learning
Support) will be deemed a material breach under Paragraph 13.2.2 (Material Breach), subject, without limitation, to the resource constraints identified in this Section 4. Notwithstanding
anything to
the contrary in this AGREEMENT, if A123 fails to cure such breach per Paragraph 13.2.2 (Material Breach) and GILLETTE exercises its right to terminate under Paragraph 13.2.2 (Material
Breach) within [**] after the expiration of the LEARNING PHASE, then A123 will refund to GILLETTE all fees and ROYALTIES under Paragraphs 5.1 (Consideration for Grant of
Rights) and 5.2 (Consideration for Support) and their subparagraphs, paid by GILLETTE from the EFFECTIVE DATE to GILLETTE's notice of termination. Such refund will be made within
[**] of the GILLETTE notice of termination. Notwithstanding the foregoing, if there is a dispute between the PARTIES as to whether or not A123 in fact materially failed to
provide support as required in Article 4 (Learning Support), then the dispute will be resolved in accordance with the procedures set forth in Article 14 (Dispute Resolution). GILLETTE
will use good faith efforts to notify A123 promptly of any dissatisfaction of GILLETTE with A123's provision of SUPPORT. 

        5.     ROYALTIES & Payment Terms  

         5.1.  Consideration for Grant of Rights.  

        5.1.1.  INITIAL LICENSE FEES. GILLETTE will pay to A123 TWENTY-TWO MILLION FIVE HUNDRED THOUSAND U.S. DOLLARS ($22,500,000) in license
fees (the "INITIAL LICENSE FEES") promptly after the EFFECTIVE DATE, which payment will be received by A123 no more than [**] after the EFFECTIVE DATE. 

        5.1.2.  Additional License Fee. GILLETTE will pay to A123 an additional license fee of [**] U.S.
DOLLARS ($[**]) within [**] after the end of the LEARNING PHASE. It is understood that in the event this AGREEMENT is terminated prior to the end of the
LEARNING PHASE, the payment obligation under this Paragraph 5.1.2 will also terminate. 

16

 

        5.1.3.  ROYALTIES. During the TERM, GILLETTE will pay to A123 running royalties ("ROYALTIES") of
[**] percent ([**]%) of NET SALES of ROYALTY-BEARING PRODUCTs. ROYALTIES will be payable for each QUARTER during the TERM and will be due to A123
within [**] of the end of each such QUARTER. 

        5.2.  Consideration for Support. GILLETTE will pay to A123 a support fee of TWO MILLION FIVE HUNDRED THOUSAND U.S. DOLLARS
($2,500,000) promptly after the EFFECTIVE DATE, which payment will be received by A123 no more than [**] after the EFFECTIVE DATE. 

        5.3.  Payments.  

        5.3.1.  Method of Payment. All payments under this AGREEMENT should be made by wire transfer to the below address, or as A123 may otherwise identify
to GILLETTE in writing from time to time. 

			
	Beneficiary:	 	A123 Systems
	Beneficiary Address:	 	321 Arsenal Street

Watertown, MA 02472
	Beneficiary A/C:	 	[**]
	Bank:	 	[**]
	Bank Address:	 	[**]

[**]
	ABA:	 	[**]
	SWIFT Code:	 	[**]

        5.3.2.  Payments in U.S. Dollars. All payments due under this AGREEMENT will be drawn on a US bank and will be payable in US
dollars. Conversion of foreign currency to U.S. dollars will be made at the conversion rate existing in the US (as reported in The Wall Street Journal) on the last working day of the subject QUARTER.
Such payments will be without deduction of exchange, collection, or other charges, except as permitted in the definition of NET SALES. 

        5.3.3.  Late Payments. Any payments by GILLETTE that are not paid on or before the date such payments are due under this
AGREEMENT will bear interest at a rate equal to the lesser of (i) two percent (2%) per month and (ii) the highest rate permitted by applicable law. 

        5.4.  Taxes. All federal, state, municipal, and other governmental excise, sales, use, customs, value
added, or other taxes, fees or duties incurred in connection with this AGREEMENT will be paid by the PARTY incurring such costs. If any taxes are owed by A123 and are required to be withheld on any
payment under this AGREEMENT, then GILLETTE will: 

        5.4.1.  timely pay the taxes on behalf of A123; and 

        5.4.2.  deduct the amount of the taxes from the payment before making the payment to A123. 

        6.     Reports & Records  

        6.1.  Frequency of Reports. GILLETTE will deliver reports to A123 within [**] of the end of each
QUARTER, containing information concerning the immediately preceding QUARTER, as further described in Paragraph 6.2 (Content of Reports & Payments) and its subparagraphs. 

        6.2.  Content of Reports & Payments. Each report delivered by GILLETTE to A123 will contain at least the following
information for the immediately preceding QUARTER: 

        6.2.1.  GILLETTE's NET SALES of LICENSED PRODUCT to THIRD PARTIES; 

17

 

        6.2.2.  total royalty payable on NET SALES of LICENSED PRODUCTs, in U.S. dollars, together with the exchange rates used for
conversion; and 

        6.2.3.  if no amounts are due to A123 for the applicable QUARTER, the report will so state. 

        6.3.  Records. GILLETTE will maintain complete and accurate records relating to the rights and obligations under this
AGREEMENT and any amounts payable to A123 in relation to this AGREEMENT, which records will contain sufficient information to permit A123 to confirm the accuracy of any reports delivered to A123 and
compliance in other respects with this AGREEMENT. GILLETTE will retain such records for at least [**] years following the end of the GILLETTE fiscal year to which they pertain,
during which time A123 will have the right to engage an independent certified public accountant, at A123's expense, to inspect such records during normal business hours to verify any reports and
payments made or compliance in other respects under this AGREEMENT; provided that A123 will give GILLETTE at least [**] advance notice of its intention to conduct such an
inspection of records. In the event that any audit performed under this Paragraph 6.3 reveals an underpayment in excess of five percent (5%), GILLETTE will bear the full cost of such audit and
will remit any amounts due to A123 within [**] of receiving notice thereof from A123. 

        7.     Patent Prosecution & Infringement  

        7.1.  Responsibility for PATENT RIGHTS. A123 will prepare, file, prosecute, and maintain all of the PATENT RIGHTS.
During the
TERM, A123 will not abandon or fail to maintain the EXISTING PATENTS without the prior approval of GILLETTE. 

        7.1.1.  Prosecution by GILLETTE. If GILLETTE does not approve A123's desire to abandon subject EXISTING PATENTS, then 

        7.1.1.1.  A123 will assign the subject EXISTING PATENTS to GILLETTE; 

        7.1.1.2.  GILLETTE will grant A123 a royalty-free, irrevocable, perpetual, non-exclusive, worldwide,
license under the subject EXISTING PATENTS to develop, make, have made, use, sell, offer to sell, lease, and import products outside the FIELD; 

        7.1.1.3.  GILLETTE will prosecute, maintain and/or abandon the subject PATENT RIGHTS at GILLETTE's sole discretion. 

        7.2.  Notification of Infringement. Each PARTY will provide written notice to the other PARTY promptly after becoming aware of
any THIRD PARTY infringement of the PATENT RIGHTS; provided that A123 will provide such notice to GILLETTE only where the THIRD PARTY infringement arises in the FIELD. 

        7.3.  Right to Prosecute Infringements.  

         7.3.1.  GILLETTE Right to Prosecute. During the TERM, GILLETTE, to the extent permitted by law, will have the right, under its own control and at
its
own expense, to prosecute any THIRD PARTY infringement of the PATENT RIGHTS in the FIELD, subject to Paragraph 7.5 (Recovery) and its subparagraphs. If required by law, A123 will permit any
action under Paragraph 7.3 (Right to Prosecute Infringements) and its subparagraphs to be brought in its name, including being joined as a party-plaintiff. GILLETTE will hold A123 harmless
from, and indemnify A123 against, any costs, expenses, or liability that A123 incurs in connection with such action; provided, however, that GILLETTE will not indemnify A123 against any liability
resulting from the actions of A123's counsel or A123's employees or agents. 

18

 

        7.3.2.  A123 Review / Consent. Prior to commencing any such action, GILLETTE will consult with A123 and will consider the
views of A123 regarding the advisability of the proposed action and its effect on the public interest. If A123 is a named party in any such action, GILLETTE will not enter into any settlement, consent
judgment, or other voluntary final disposition of any infringement action under this Paragraph 7.3 (Right to Prosecute Infringements) and its subparagraphs) without the prior written consent of
A123, such consent not to be unreasonably withheld. In the event that A123 is not a named
party in any such action, GILLETTE will provide A123 with a copy of any proposed settlement (the "PROPOSED SETTLEMENT"). 

        7.3.2.1.  A123 Rights/Obligations Affected. In the event A123 believes its rights or obligations are affected by such PROPOSED
SETTLEMENT, A123 will notify GILLETTE in writing within [**] of GILLETTE's providing A123 with the PROPOSED SETTLEMENT, such notice detailing A123's reasons for concern. Upon
such written notice to GILLETTE, A123 may attempt to institute alternative dispute resolution with the alleged infringer to resolve the matter. In the event A123 does not resolve the matter within
[**] from receipt of the PROPOSED SETTLEMENT, GILLETTE will be free to enter into a settlement with the alleged infringer no less favorable to A123 than the PROPOSED
SETTLEMENT. A123 will not settle with the alleged infringer without the prior written consent of GILLETTE if such settlement would result in a more negative effect on the rights of GILLETTE under the
LICENSED TECHNOLOGY than the PROPOSED SETTLEMENT. 

        7.3.3.  A123 Right to Prosecute. In the event that GILLETTE is unsuccessful in persuading the alleged infringer to desist or
fails to have initiated an infringement action within a reasonable time after GILLETTE first becomes aware of the basis for such action, A123 will have the right, at its sole discretion, to prosecute
such infringement under its sole control and at its sole expense, and any recovery obtained will belong to A123. A123 will not settle with the alleged infringer without the prior written consent of
GILLETTE if such settlement would result in a more negative effect on the rights of GILLETTE under the LICENSED TECHNOLOGY than the PROPOSED SETTLEMENT. 

        7.4.  Declaratory Judgment Actions. In the event that a declaratory judgment action is brought against A123 or GILLETTE by a
THIRD PARTY alleging invalidity, unenforceability, or non-infringement of the PATENT RIGHTS, A123, at its option, will have the right within [**] after commencement
of such action to take over the sole defense of the action at its own expense. If A123 does not exercise this right, GILLETTE may take over the sole defense of the action at GILLETTE's sole expense,
subject to Paragraph 7.5 (Recovery) and its subparagraphs. 

        7.5.  Recovery. Any recovery obtained in an action brought by GILLETTE under Paragraphs 7.3.1 (GILLETTE Right to
Prosecute) or 7.4 (Declaratory Judgment Actions) will be distributed as follows: 

        7.5.1.  each PARTY will be reimbursed for any expenses, including reasonable attorneys' fees, incurred in the action; 

19

 

 

        7.5.2.  as to ordinary damages, GILLETTE will receive an amount from such recovery equal to its lost profits or a reasonable
royalty on the infringing sales, or whichever measure of damages the court will have applied, and 

        7.5.2.1.  if such award is at least as much as GILLETTE's lost profits or reasonable royalty had GILLETTE sold the infringing
products, then GILLETTE will pay to A123 based upon such amount a reasonable approximation of the royalties and other amounts that GILLETTE would have paid to A123 if GILLETTE had sold the infringing
products, processes, and services rather than the infringer; and 

        7.5.3.  as to special or punitive damages, GILLETTE will receive [**]% of any such award and A123 will
receive [**]%. 

        7.6.  Cooperation. Each PARTY will use reasonable efforts to cooperate in any action under Article 7 (Patent
Prosecution & Infringement) which is controlled by the other PARTY. 

        8.     Indemnification  

         8.1.  Indemnification.  

         8.1.1.  GILLETTE Indemnity. Subject to Paragraphs 8.1.2 (A123 IP Indemnities) and 8.1.2.4 ([**]) and their
subparagraphs, GILLETTE will indemnify, defend, and hold harmless A123 and its SUBSIDIARIES and their trustees, officers, employees, and agents and their respective successors, heirs and assigns (the
"A123 INDEMNITEES"), against any liability,
damage, loss, or expense (including reasonable attorneys fees and expenses) incurred by or imposed upon any of the A123 INDEMNITEES in connection with any THIRD PARTY claims, suits, actions, demands
or judgments arising out of any theory of liability (including without limitation actions in the form of tort, warranty, or strict liability and regardless of whether such action has any factual
basis) concerning any product, process, or service that is made, used, sold, imported, or performed by GILLETTE pursuant to any right or license granted under this AGREEMENT; provided, however, that
GILLETTE will not be obligated to indemnify A123 for any such liability, damage, loss, or expense that arise as a result of gross negligence or willful misconduct on the part of A123 or AFFILIATEs of
A123 or its and their respective directors, officers, employees and agents. 

        8.1.2.  A123 IP Indemnities.  

         8.1.2.1.  Intellectual Property Infringement. During the [**] following the EFFECTIVE DATE, A123 will indemnify, defend, and
hold harmless GILLETTE, its AFFILIATEs, and their trustees, officers, employees, and agents and their respective successors, heirs and assigns (the "GILLETTE INDEMNITEES") against any action brought
or allegation made against GILLETTE and/or its AFFILIATEs to the extent that it is based upon a THIRD PARTY claim that the manufacture, use or sale of CELLS, [**], or
components thereof that are manufactured by or for GILLETTE and/or its AFFILIATEs in the manner that A123 teaches GILLETTE and/or its AFFILIATEs to manufacture such CELLS, [**]
and components thereof during the LEARNING PHASE and/or as specifically disclosed in EXISTING PATENT RIGHTS (individually and collectively, "TECHNOLOGY APPLICATION") infringes any copyright, trade
secret, patent right in the US, patent right in Europe, patent right in Japan, or other proprietary right, and will pay any costs, damages and reasonable attorney's fees attributable to such claim
that are awarded against GILLETTE and/or its AFFILIATEs. A123's obligations hereunder are contingent on the following conditions: 

        8.1.2.1.1.  GILLETTE must notify A123 in writing promptly after GILLETTE becomes aware of a claim; 

20

 

        8.1.2.1.2.  GILLETTE must grant A123 the sole control of the settlement, compromise, negotiation and defense of any such
claim; and 

        8.1.2.1.3.  GILLETTE must cooperate with A123 and provide A123 with all information related to the claim that is reasonably
requested by A123. 

        8.1.2.2.  Remedies. If in A123's and/or GILLETTE's opinion any TECHNOLOGY APPLICATION may become, or in fact does become, the
subject of a reasonable claim of patent infringement by a THIRD PARTY (excluding for the avoidance of doubt [**]), then A123 will, at its election or at GILLETTE's request,
either (i) obtain the right for GILLETTE and its AFFILIATEs to continue using the applicable TECHNOLOGY APPLICATION under the THIRD PARTY's patent rights; or (ii) replace or modify the
applicable LICENSED TECHNOLOGY with non-infringing technology with substantially the same functionality and performance acceptable to GILLETTE (GILLETTE's acceptance not to be unreasonably
withheld); or (iii) if neither (i) nor (ii) are reasonably practicable in A123's sole discretion, A123 will offer to terminate the license(s) to the extent specifically related to
the subject TECHNOLOGY APPLICATION, by withdrawing the TECHNOLOGY APPLICATION from the scope of LICENSED TECHNOLOGY. If GILLETTE accepts A123's offer to terminate, then either
Paragraphs 8.1.2.2.1 (Applicable Licenses Terminated) or 8.1.2.2.2 (Alternative Remedy) and their subparagraphs will apply: 

        8.1.2.2.1.  Applicable Licenses Terminated. If, pursuant to Paragraph 8.1.2.2 (Remedies) the license(s) scope
specifically applicable to all or a portion of the TECHNOLOGY APPLICATION is terminated, GILLETTE and its AFFILIATEs will immediately cease use of the terminated portion of LICENSED TECHNOLOGY and
A123 will owe to GILLETTE: 

        8.1.2.2.1.1.  subject to the limitations set forth in Paragraph 8.3 (Limitations), a pro rata portion of the INITIAL
LICENSE FEES paid for such license(s) based on 

        8.1.2.2.1.1.1.    the value of the removed LICENSED TECHNOLOGY up to a maximum of Ten Million U.S. Dollars ($10,000,000),
divided by 

        8.1.2.2.1.1.2.    the value of all of the LICENSED TECHNOLOGY, then reduced through 

        8.1.2.2.1.1.3.    straight-line depreciation over such four (4) year period. 

        8.1.2.2.2.  Alternative Remedy. In lieu of receiving the payment contemplated in Paragraph 8.1.2.2.1 (Applicable
Licenses Terminated) and its subparagraphs within thirty (30) days following A123's delivery of written notice of offer of termination of the license with respect to the subject portion of
LICENSED TECHNOLOGY pursuant to Paragraph 8.1.2.2 (Remedies) , GILLETTE may provide written notice to A123 (the "ALTERNATIVE REMEDY NOTICE") of GILLETTE's desire to terminate this AGREEMENT
pursuant to this Paragraph 8.1.2.2.2 in which event the PARTIES will use good faith efforts to resolve the matter through communication between senior executives of both PARTIES. If the PARTIES
are unable to resolve the matter through their senior executives, then the dispute will be resolved in accordance with the procedures set forth in Article 14 (Dispute Resolution). 

        8.1.2.3.  Sole Remedy. Paragraphs 8.1.2.1 (Intellectual Property Infringement), 8.1.2.2 (Remedies) and its
subparagraphs states A123's entire liability and GILLETTE's exclusive remedy for GILLETTE's practice of LICENSED TECHNOLOGY resulting in infringement of intellectual property rights of any kind, other
than with respect to a SUBSEQUENT CONTRACT for which GILLETTE provides a SUBSEQUENT 

21

 

CONTRACT
TERMINATION NOTICE pursuant to Section 11.4.2 (MATERIAL ADVERSE EFFECT). 

        8.1.2.4.  [**]. For clarification, Paragraphs 8.1.2.1 (Intellectual Property Infringement),
8.1.2.2 (Remedies), 8.1.2.3 (Sole Remedy), and their subparagraphs will not apply to [**]. With respect to the [**]: 

        8.1.2.4.1.  No More Restrictive. A123 will not [**] in a manner that is more restrictive of GILLETTE's
and/or its AFFILIATEs rights under this AGREEMENT than A123's rights outside the FIELD. 

        8.1.2.4.2.  Sole Discretion. A123 will have sole discretion [**] but will use good faith efforts to
address any input provided by GILLETTE in connection therewith. 

        8.1.2.5.  [**].  

         8.1.2.6.  Disclaimer. The foregoing indemnities will not apply to any infringement claim to the extent arising from: 

        8.1.2.6.1.  LICENSED KNOW-HOW that has been modified by anyone other than A123 or its subcontractors; 

        8.1.2.6.2.  GILLETTE's or its AFFILIATEs' use of the LICENSED KNOW-HOW in conjunction with any other technology or
product where use with such other technology or product gave rise to the infringement claim; and/or 

        8.1.2.6.3.  GILLETTE's or its AFFILIATEs' use of the LICENSED KNOW-HOW in a manner not authorized by A123 under
this AGREEMENT. 

        8.1.3.  A123 Product Indemnities. A123 will indemnify, defend, and hold harmless the GILLETTE INDEMNITEES against any
liability, damage, loss, or expense (including reasonable attorneys fees and expenses) incurred by or imposed upon any of the GILLETTE INDEMNITEES in connection with any claims, suits, actions,
demands or judgments arising out of any theory of liability (including without limitation actions in the form of tort, warranty, or strict liability and regardless of whether such action has any
factual basis) concerning any product, process, or service that is made, used, sold, imported, or performed by A123 pursuant to any license to GILLETTE IMPROVED IP granted by GILLETTE to A123 under
this AGREEMENT. This clause 8.1.3 will not apply to any of the products supplied by A123 pursuant to the SUPPLY AGREEMENT, for which the SUPPLY AGREEMENT will set forth all applicable
indemnities. 

        8.2.  Procedures. The A123 INDEMNITEES and GILLETTE INDEMNITEES (as applicable, the "INDEMNITEES") will provide the
indemnifying PARTY with prompt written notice of any claim, suit, action, demand, or judgment for which indemnification is sought under this AGREEMENT. The indemnifying PARTY will, at its own expense,
provide attorneys reasonably acceptable to the other PARTY to defend against any such claim. The INDEMNITEES will cooperate fully with the indemnifying PARTY in such defense and will permit the
indemnifying PARTY to conduct and control such defense and the disposition of such claim, suit, or action (including all decisions relative to litigation, appeal, and settlement). The indemnifying
PARTY will keep the INDEMNITEES informed of the progress in the defense and disposition of such claim and to consult with the INDEMNITEES with regard to any proposed settlement. Notwithstanding
anything to the contrary in this Paragraph 8.2, the indemnifying PARTY will have sole control of the settlement, compromise, negotiation and defense of any such claim, suit, action, demand or
judgment. 

22

 

        8.3.  Limitations. Subject to Paragraph 8.3.1 (Clarification of Limitations), A123's obligations under
Paragraphs 8.1.2.1 (Intellectual Property Infringement), 8.1.2.2 (Remedies), 8.1.2.3 (Sole Remedy), and their subparagraphs will be subject in all respects to the limitations of
Article 11 (Limitations on Liability). Subject to Paragraph 8.3.1 (Clarification of Limitations), aggregate amounts payable to GILLETTE or any THIRD PARTY by A123 under
Paragraph 8.1.2 (A123 IP Indemnities) and its subparagraphs will be subject to the maximum obligations set forth in Paragraph 11.2 (Limitation on Liability) and its subparagraphs,
regardless of whether the amounts due from A123 under Paragraphs 8.1.2.1 (Intellectual Property Infringement), 8.1.2.2 (Remedies), 8.1.2.3 (Sole Remedy), and their subparagraphs would exceed
the maximums set forth in Paragraph 11.2 (Limitations on Liability) and its subparagraphs. All other obligations of the PARTIES under Article 8 (Indemnification) will not be limited by
Article 11 (Limitations on Liability). 

        8.3.1.  Clarification of Limitations. For further avoidance of doubt, notwithstanding anything to the contrary in
Paragraph 8.3 (Limitations) or Article 11 (Limitations on Liability), such limitations under Paragraph 8.3 (Limitations) are not applicable to A123's obligations and GILLETTE's
rights under
Paragraph 8.1.2.5 (Cap on GILLETTE Royalties to Practice LICENSED TECHNOLOGY), 11.4 (SUBSEQUENT CONTRACTS) and their subparagraphs. 

        9.     Confidentiality  

         9.1.  Disclosure of CONFIDENTIAL INFORMATION. During the course of this AGREEMENT, it may be necessary for a PARTY
to disclose
to the other PARTY, orally or in writing, proprietary information and/or materials regarding the disclosing PARTY's technology, products, business information, and/or business objectives which the
DISCLOSER considers highly confidential ("CONFIDENTIAL INFORMATION"). In addition, this AGREEMENT will be considered CONFIDENTIAL INFORMATION. 

        9.2.  Obligation of Confidentiality. Subject to Paragraph 9.3 (Form of Disclosure) and its subparagraphs, all
CONFIDENTIAL INFORMATION disclosed by a PARTY to the other PARTY during the term of this AGREEMENT will not be used by the receiving PARTY except in connection with the activities contemplated by this
AGREEMENT, will be maintained in confidence by the receiving PARTY, and will not otherwise be disclosed by the receiving PARTY to any other person, firm, or agency, governmental or private, without
the prior written consent of the disclosing PARTY, except to the extent that the CONFIDENTIAL INFORMATION (as determined by competent documentation): 

        9.2.1.  was known or used by the receiving PARTY prior to its date of disclosure to the receiving PARTY; or 

        9.2.2.  either before or after the date of the disclosure to the receiving PARTY is lawfully disclosed to the receiving PARTY
by sources other than the disclosing PARTY rightfully in possession of the CONFIDENTIAL INFORMATION; or 

        9.2.3.  either before or after the date of the disclosure to the receiving PARTY becomes published or generally known to the
public (including information known to the public through the sale of products in the ordinary course of business) through no fault or omission on the part of the receiving PARTY or its sublicensees;
or 

        9.2.4.  is
independently developed by or for the receiving PARTY without reference to or reliance upon the CONFIDENTIAL INFORMATION; or 

        9.2.5.  is required to be disclosed by the receiving PARTY to comply with applicable laws, to defend or prosecute litigation
or to comply with governmental regulations, provided that 

23

 

the
receiving PARTY provides prior written notice of such disclosure to the disclosing PARTY and takes reasonable and lawful actions to avoid and/or minimize the degree of such disclosure. It is
understood by both PARTIES that A123 will disclose this AGREEMENT to the minimum extent required by law and regulation in connection with securities filings or registrations made by A123, after
providing GILLETTE and opportunity to review and comment on such disclosures. 

        9.3.  Form of Disclosure. The obligations of the receiving PARTY under Paragraph 9.2 (Obligation of Confidentiality)
and its subparagraphs will only extend to CONFIDENTIAL INFORMATION which is disclosed to the receiving PARTY by the disclosing PARTY: 

        9.3.1.  in written form and clearly marked as being confidential; or 

        9.3.2.  if not in tangible form (e.g., disclosed orally or observed), then
identified as confidential when revealed and summarized in a writing delivered to the receiving PARTY within [**] of such disclosure, where such writing contains the following: 

        9.3.2.1.  marked as "Confidential", "Proprietary", "Secret" or similar marking, 

        9.3.2.2.  a summary description of the disclosed CONFIDENTIAL INFORMATION, 

        9.3.2.3.  lists the place and date of disclosure, and 

        9.3.2.4.  lists the names of the persons to whom the disclosure was made. 

        9.4.  Employee & Advisor Obligations. Each PARTY will provide CONFIDENTIAL INFORMATION received from the other PARTY
only to their respective employees, consultants, advisors AFFILIATEs and SUBLICENSEEs, and to the employees, consultants and advisors of such PARTY's AFFILIATEs and SUBLICENSEEs, who have a need to
know and have an obligation to treat such information and materials as confidential. 

        9.5.  Contract Manufacturers. Subject to Paragraph 2.3 (Non-exclusive Licenses in Other Fields), GILLETTE
and its AFFILIATEs may share A123 CONFIDENTIAL INFORMATION with THIRD PARTY manufacturers who have a need to know for purposes of supplying GILLETTE and/or its AFFILIATEs, who are under an obligation
of confidentiality at least as stringent as set forth in Article 9 (Confidentiality). Notwithstanding the foregoing or anything to the contrary in this AGREEMENT, in no event will GILLETTE nor
any of its AFFILIATEs share CONFIDENTIAL INFORMATION on NANOPHOSPHATE with a THIRD PARTY manufacturer, without the prior written consent of A123. 

24

 

 

        9.6.  Terms of AGREEMENT are Confidential. Except as permitted in Paragraph 9.2.5, neither the actual terms of this
AGREEMENT nor the AGREEMENT itself will be disclosed by either PARTY to a THIRD PARTY, without the prior written consent of the other PARTY; other than to: 

        9.6.1.  its representatives and attorneys in the course of any legal proceeding to which either of the PARTIES hereto is a
party for the purpose of securing compliance with this AGREEMENT; 

        9.6.2.  a bona fide potential buyer of all or substantially all of the PARTY's business in LICENSED PRODUCTS; 

        9.6.3.  in the case of GILLETTE, to its AFFILIATEs, SUBLICENSEES or THIRD PARTY customers, where such disclosure is limited to
the existence of the AGREEMENT, the exclusive nature of the license, and the scope of the FIELD, and where the AFFILIATE, SUBLICENSEE or THIRD PARTY will be under obligations of confidentiality with
respect to such disclosure; and 

        9.6.4.  in the case of A123, to its licensors of any of the LICENSED TECHNOLOGY, to the extent necessary to comply with any
obligations of A123 under the applicable license agreements as of the EFFECTIVE DATE. 

        9.7.  TERM. All obligations of confidentiality imposed under Article 9 (Confidentiality) will expire
[**] years following termination or expiration of this AGREEMENT, or upon written release of such obligations by the disclosing PARTY, whichever is earlier. 

        10.   Representations or Warranties

        10.1.  No Conflict. A123 represents and warrants that all CONFLICTING OBLIGATIONs existing as of the EFFECTIVE DATE are listed
on Schedule 10.1 hereto. 

        10.2.  SUPPORT. A123 represents and warrants that it will perform the SUPPORT in a professional and workmanlike manner. 

        10.3.  NO OTHER WARRANTIES.    EXCEPT AS MAY OTHERWISE BE EXPRESSLY
SET FORTH IN THIS AGREEMENT, A123 MAKES NO REPRESENTATIONS OR WARRANTIES OF ANY KIND CONCERNING THE LICENSED TECHNOLOGY, TRADEMARKS, OR SUPPORT EXPRESS OR IMPLIED, INCLUDING WITHOUT LIMITATION
WARRANTIES OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, NONINFRINGEMENT AND VALIDITY OF PATENT CLAIMS. SPECIFICALLY, AND NOT TO LIMIT THE FOREGOING, A123 MAKES NO WARRANTY OR REPRESENTATION
(I) REGARDING THE VALIDITY OR SCOPE OF THE PATENT RIGHTS, AND (II) THAT THE EXPLOITATION OF THE PATENT RIGHTS OR ANY LICENSED PRODUCT, LICENSED PROCESS, OR LICENSED SERVICE WILL NOT
INFRINGE ANY PATENTS OR OTHER INTELLECTUAL PROPERTY RIGHTS OF A123 OR OF A THIRD PARTY.

        11.   Limitations on Liability  

         11.1.  DISCLAIMER OF INCIDENTAL / CONSEQUENTIAL DAMAGES.    IN NO
EVENT WILL EITHER PARTY, ITS DIRECTORS, OFFICERS, EMPLOYEES AND AFFILIATES BE LIABLE FOR INCIDENTAL OR CONSEQUENTIAL DAMAGES OF ANY KIND IN CONNECTION WITH THIS AGREEMENT, INCLUDING ECONOMIC DAMAGES
OR INJURY TO PROPERTY AND LOST PROFITS, REGARDLESS OF WHETHER ANY SUCH ENTITY OR PERSON WILL BE ADVISED, WILL HAVE OTHER REASON TO KNOW, OR IN FACT WILL KNOW OF THE POSSIBILITY OF THE
FOREGOING.

25

 

        11.2.  Limitation of Liability.  

         11.2.1.  During the LEARNING PHASE. During the LEARNING PHASE, A123's aggregate liability pursuant to this AGREEMENT, whether in contract, tort, or
otherwise, arising out of or in connection with this AGREEMENT will not exceed: 

        11.2.1.1.  for claims arising in the first [**] of the LEARNING PHASE, $[**]
less any amounts previously or contemporaneously paid by A123 to GILLETTE as a liability, remedy or settlement of liability under this AGREEMENT (including without limitation any amounts paid to
GILLETTE or any THIRD PARTY pursuant to Article 8 (Indemnification)); and 

        11.2.1.2.  for claims arising in the second [**] of the LEARNING PHASE, $[**],
less any amounts previously or contemporaneously paid by A123 to GILLETTE as a liability, remedy, or settlement of liability under this AGREEMENT (including without limitation any amounts paid to
GILLETTE or any THIRD PARTY pursuant to Article 8 (Indemnification)). 

        11.2.2.  After the LEARNING PHASE. After the LEARNING PHASE, A123's aggregate liability pursuant to this AGREEMENT, whether in
contract, tort, or otherwise, arising out of or in connection with this AGREEMENT, regardless of whether such liability arises from an action occurring during the LEARNING PHASE, will not exceed the
following amounts, less amounts previously paid by A123 to GILLETTE as a liability, remedy, or settlement of liability under this AGREEMENT at any prior or contemporaneous time (including without
limitation any amounts paid to GILLETTE or any THIRD PARTY pursuant to Article 8 (Indemnification)): 

        11.2.2.1.  for claims arising in the first [**] after end of the LEARNING PHASE,
$[**] plus ROYALTIES paid in the then-prior [**] period; 

        11.2.2.2.  for claims arising in the second [**] after end of the LEARNING PHASE,
$[**] plus ROYALTIES paid in the then-prior [**] period; and 

        11.2.2.3.  for claims thereafter, $[**] plus ROYALTIES paid in the then-prior
[**] period. 

        11.3.  Exceptions. Article 11 (Limitations on Liability) will not limit either PARTY's liability for any claims arising
from: 

        11.3.1.  breach of Article 9 (Confidentiality); 

        11.3.2.  any of either PARTY's indemnification refund or other payment obligations hereunder except as subject to
Paragraph 8.3 (Limitations); 

        11.3.3.  except for the limitations set forth in Paragraph 11.1 (Disclaimer of Incidental / Consequential Damages), 

        11.3.3.1.  breach of Paragraph 2.2 (Sublicenses) and its subparagraphs, or Paragraph 15.2 (Assignment) by either
PARTY, 

        11.3.3.2.  GILLETTE's rights to refund under Paragraph 11.4 (SUBSEQUENT CONTRACTS) and its subparagraphs, and 

        11.3.3.3.  gross negligence, willful misconduct or fraud of a PARTY. 

        11.4.  SUBSEQUENT CONTRACTS. Notwithstanding anything to the contrary in Paragraphs 8 (Indemnification) or
Sections 11.1 (Disclaimer of Incidental / Consequential Damages), 11.2 (Limitation of Liability), 11.3 (Exceptions) and their respective subparagraphs, A123 will provide to GILLETTE a right to
a refund in connection with specific circumstances created by a SUBSEQUENT CONTRACT, as set forth in the subparagraphs to this Paragraph 11.4. This 

26

 

Section 11.4
and its subparagraphs shall expire on the earlier of (i) the end of the TERM and (ii) the [**] anniversary of the EFFECTIVE DATE. 

        11.4.1.  Freedom to Practice for GILLETTE / No Up-front Payments. A123 will not enter into any SUBSEQUENT CONTRACT
that restricts GILLETTE's license rights under Paragraph 2.1 (LICENSED TECHNOLOGY) and its subparagraphs under the LICENSED PATENTS (via, for example, by sublicense from A123, or direct license
from the patent owner); including the freedom-to-practice NANOPHOSPHATE powder under such patents only to the extent such rights are granted by A123 to GILLETTE in this
AGREEMENT. Additionally, if any SUBSEQUENT CONTRACT expressly requires any upfront or other lump sum payments by A123 or any sublicensee of A123, then A123 will be solely responsible for such payments
to the extent necessary to enable GILLETTE to continue to practice the rights granted by A123 to GILLETTE in this AGREEMENT. 

        11.4.2.  MATERIAL ADVERSE EFFECT. During the TERM, in negotiating a SUBSEQUENT CONTRACT, A123 will make a good faith attempt
to avoid entering into any SUBSEQUENT
CONTRACT that has a MATERIAL ADVERSE EFFECT. In the event a SUBSEQUENT CONTRACT nonetheless results in a MATERIAL ADVERSE EFFECT, GILLETTE may provide written notice to A123 (the "SUBSEQUENT CONTRACT
TERMINATION NOTICE") of GILLETTE's desire to terminate this AGREEMENT, so long as such SUBSEQUENT CONTRACT TERMINATION NOTICE is delivered to A123 no more than [**] after
GILLETTE receives written notice from A123 of the SUBSEQUENT CONTRACT; provided that, [**] SUBSEQUENT CONTRACT TERMINATION NOTICE may be provided to A123 hereunder regardless
of the number of SUBSEQUENT CONTRACTS entered into by A123 that would otherwise be subject to this Section 11.4. Upon A123's receipt of the SUBSEQUENT CONTRACT TERMINATION NOTICE, the following
will apply: 

        11.4.2.1.  P&G Loses Freedom-to-Practice. If the applicable SUBSEQUENT CONTRACT constitutes A123's
breach of its obligation under Paragraph 11.4.1 (Freedom to Practice for GILLETTE / No Upfront Payments) to maintain rights for GILLETTE to practice the technology encompassed by GILLETTE's
license rights under Paragraph 2.1 (LICENSED TECHNOLOGY) and its subparagraphs, then A123 will refund to P&G the following amounts within [**] of GILLETTE's notice to
terminate under Paragraph 11.4.2 (MATERIAL ADVERSE EFFECT): 

        11.4.2.1.1.  all INITIAL LICENSE FEES and consideration for support payments paid from the EFFECTIVE DATE to date under
Paragraphs 5.1 (Consideration for Grant of Rights) and 5.2 (Consideration for Support); and 

        11.4.2.1.2.  to compensate GILLETTE for its capital investment expenses paid and/or committed to date in reliance on its
freedom-to-practice the licensed technology, if the SUBSEQUENT CONTRACT is entered into after the first year from the EFFECTIVE DATE, an additional sum equal to such
[**], up to [**] Dollars ($[**]); or 

        11.4.2.2.  License Becomes Non-exclusive. If the applicable SUBSEQUENT CONTRACT converts any of P&G's exclusive
license rights under Paragraph 2.1 (LICENSED TECHNOLOGY) to a non-exclusive license grant in breach of A123's obligations under Paragraph 2.1 (LICENSED TECHNOLOGY), then A123
will refund P&G one of the following amounts within [**] of GILLETTE's notice to terminate under Paragraph 11.4.2 (MATERIAL ADVERSE EFFECT) (By way of example, "within"
and "up to" 12 months from January 1, 2008 includes January 1, 2009): 

        11.4.2.2.1.  (Year 1) if the relevant SUBSEQUENT CONTRACT is entered into within twelve (12) months of the EFFECTIVE
DATE, then A123 will refund P&G [**] 

27

 

and
consideration for support payments paid from the EFFECTIVE DATE to date under Paragraphs 5.1 (Consideration for Grant of Rights) and 5.2 (Consideration for Support); 

        11.4.2.2.2.  (Year 2) if the relevant SUBSEQUENT CONTRACT is entered into after twelve (12) and up to
twenty-four (24) months from the EFFECTIVE DATE, then A123 will refund P&G [**] dollars ($[**]); 

        11.4.2.2.3.  (Year 3) if the relevant SUBSEQUENT CONTRACT is entered into after twenty-four (24) months up
to thirty-six (36) months from the EFFECTIVE DATE, then A123 will refund P&G [**] dollars ($[**]); 

        11.4.2.2.4.  (Year 4) if the relevant SUBSEQUENT CONTRACT is entered into after thirty-six (36) months up
to forty-eight (48) months from the EFFECTIVE DATE, then A123 will refund P&G [**] dollars ($[**]); and 

        11.4.2.2.5.  (Years 5-7) if the relevant SUBSEQUENT CONTRACT is entered into after forty-eight (48) months
up to eighty-four (84) months from the EFFECTIVE DATE, then A123 will refund P&G [**] dollars ($[**]); or 

        11.4.2.3.  Increase in Running Royalty Obligations. If the SUBSEQUENT CONTRACT results in GILLETTE having to pay an aggregate
running royalty to A123 and/or a counterparty to such SUBSEQUENT CONTRACT or its AFFILIATE (including GILLETTE's obligations under Paragraph 8.1.2.5 (Cap on GILLETTE Royalties to Practice
LICENSED TECHNOLOGY)) equivalent to greater than [**] of NANOPHOSPHATE and/or LFP employed in LICENSED PRODUCTS, then A123 will refund to P&G the following amounts within
[**] of GILLETTE's notice to terminate under Paragraph 11.4.2 (MATERIAL ADVERSE EFFECT): 

        11.4.2.3.1.  all INITIAL LICENSE FEES, ROYALTIES and consideration for support payments paid from the EFFECTIVE DATE to date
under Paragraphs 5.1 (Consideration for Grant of Rights) and 5.2 (Consideration for Support); and 

        11.4.2.3.2.  to compensate GILLETTE for its [**] to date in reliance on its
freedom-to-practice the licensed technology, if the SUBSEQUENT CONTRACT was reached after the first year from the EFFECTIVE DATE, an additional sum of up to
[**] Dollars ($[**]) 

        11.4.2.4.  Substantially Similar/Functional Tech In Lieu of Above. In lieu of the above remedies under
Paragraphs 11.4.2.1 (P&G Loses Freedom to Practice) through 11.4.2.3 (Increase in Running Royalty Obligation) and their subparagraphs, A123 at its election will replace or modify the applicable
LICENSED TECHNOLOGY with non-infringing technology with substantially the same functionality and performance acceptable to GILLETTE (GILLETTE's acceptance not to be unreasonably withheld). 

        11.4.2.5.  Prevention of Multiple Claims under Section 11.4. GILLETTE may only select a remedy pursuant to
Sections 11.4.2 (MATERIAL ADVERSE EFFECT), 11.4.2.4 (Substantially Similar/Functional Tech In Lieu of Above) and their subparagraphs, and not under more than one of such subparagraphs. This
Section 11.4 and its subparagraphs set forth GILLETE's sole and exclusive remedy with respect to the SUBSEQUENT CONTRACT where P&G chooses to exercise its rights under the SUBSEQUENT CONTRACT
TERMINATION NOTICE. Any other claims regarding any other SUBSEQUENT CONTRACT are subject to the other terms and conditions of this AGREEMENT, as applicable. 

28

 

        12.   General Compliance With Laws  

        12.1.  Compliance with Laws. GILLETTE will use reasonable commercial efforts to comply with all commercially
material local,
state, federal, and international laws and regulations relating to the development, manufacture, use, and sale of LICENSED PRODUCTs. 

        12.2.  Export Control. GILLETTE and SUBLICENSEEs will comply with all US laws and regulations controlling the export of
certain commodities and technical data, including without limitation all Export Administration Regulations of the US Department of Commerce. Among other things, these laws and regulations prohibit or
require a license for the export of certain types of commodities and technical data to specified countries. GILLETTE hereby gives written assurance that it will comply with, and will cause its
SUBLICENSEEs to comply with, all US export control laws and regulations, that it bears sole responsibility for any violation of such laws and regulations by itself, and that it will indemnify, defend,
and hold A123 harmless (in accordance with Article 8.1 (Indemnification) and its subparagraphs) for the consequences of any such violation. 

        12.3.  Marking of LICENSED PRODUCTs. Solely with respect to applicable LICENSED PRODUCT sold in the US, to the extent
commercially feasible and consistent with prevailing business practices, GILLETTE will mark, and will cause its SUBLICENSEEs to mark, all LICENSED PRODUCTs that are manufactured or sold under this
AGREEMENT with the number of each issued patent under the PATENT RIGHTS that applies to such LICENSED PRODUCT. 

        13.   TERM & Termination  

         13.1.  TERM. The AGREEMENT will continue in effect from the EFFECTIVE DATE until the end of the PATENT TERM,
unless sooner
terminated pursuant to this Paragraph 12.3 (Marking of LICENSED PRODUCTS) or Paragraph 8.1.2.2.2 (Alternative Remedy) ("TERM"). 

        13.2.  Termination for Default.  

         13.2.1.  Nonpayment. In the event GILLETTE fails to pay any amounts due and payable to A123 hereunder, and fails to make such payments within thirty
(30) days after receiving written notice of such failure, A123 may terminate this AGREEMENT immediately upon written notice to GILLETTE. 

        13.2.2.  Material Breach. In the event either PARTY commits a material breach of its obligations under this AGREEMENT or under
the SUPPLY AGREEMENT, except for breach as described in Paragraph 13.2.1 (Nonpayment), and fails to cure that breach within [**] after receiving written notice thereof,
the non-breaching PARTY may terminate this AGREEMENT immediately upon written notice to the breaching PARTY. 

        13.3.  Effect of Termination.  

         13.3.1.  Survival. Subject to Paragraph 8.1.2.2.2 (Alternative Remedy), the following provisions will survive the expiration or termination of
this AGREEMENT: Articles 1 (Definitions), , 6 (Reports & Records), 8 (Indemnification), 9 (Confidentiality), 11 (Limitations on Liabilities), 12 (General Compliance With Laws), 14
(Dispute Resolution), and 15 (Miscellaneous); and Paragraphs 2.5 (Non-exclusive GILLETTE IMPROVED IP License), 2.7 (Ownership of LICENSED TECHNOLOGY, No Additional Rights), 10.3 (No
Warranties), 13.2 (Termination for Default), and their subparagraphs; provided that Paragraphs 8.1.2.2 (Remedies), all of Paragraph 8.1.2.4 ([**]), other than the
first sentence thereof, and all of Paragraph 11.4 (SUBSEQUENT CONTRACTS) will not survive termination. 

29

 

 

        13.3.2.  Effects of Other Terminations. Upon the early termination of this AGREEMENT for any reason, GILLETTE and its
SUBLICENSEEs may complete and sell any work-in-progress and inventory of LICENSED PRODUCTs that exist as of the effective date of termination, provided that: 

        13.3.2.1.  GILLETTE pays A123 the applicable ROYALTY or other amounts due on such sales of LICENSED PRODUCTs in accordance
with the terms and conditions of this AGREEMENT, and 

        13.3.2.2.  GILLETTE and its SUBLICENSEEs will complete and sell all work-in-progress and inventory of
LICENSED PRODUCTs within [**] after the effective date of termination. 

        13.3.3.  Pre-termination Obligations. In no event will termination of this AGREEMENT release GILLETTE or
SUBLICENSEEs from the obligation to pay any amounts that became due on or before the effective date of termination. 

        14.   Dispute Resolution  

         14.1.  Binding Arbitration of Disputes. Any controversy or dispute arising out of or in connection with this
AGREEMENT its
interpretation, performance, or termination, but not including validity or enforceability of patents licensed herein, ("DISPUTE") that the PARTIES are unable to resolve within
[**] after written notice by one PARTY to the other of the existence of such DISPUTE, will be submitted to arbitration. The arbitration will be conducted in Delaware, US except
as may otherwise be agreed by the PARTIES, in accordance with the Commercial Arbitration Rules of the American Arbitration Association then in effect. Each DISPUTE will be submitted to a panel of
three (3) impartial arbitrators with each PARTY selecting one (1) arbitrator within
[**] after the commencement of the arbitration period and the two (2) selected arbitrators selecting a third arbitrator within [**] after the
commencement of the arbitration period. Any arbitration hereunder will commence within [**] after appointment of the third arbitrator. No discovery by either PARTY will be
permitted unless the arbitrators determine that the PARTY requesting such discovery has a substantial, demonstrable need. The arbitrators will make final determinations as to any discovery disputes
and all other procedural matters. If any PARTY fails to comply with the procedures in any arbitration in a manner deemed material by the arbitrators, then the arbitrators will fix a reasonable time
for compliance, and if the PARTY does not comply within such period, then a remedy deemed just by the arbitrators, including an award of default, may be imposed. The decision of the arbitrators will
be rendered no later than [**] after commencement of the arbitration period. The final decision of the arbitrators with respect to the DISPUTE, will be limited to a finding
fully in favor of one PARTY's position, and no compromise or split decisions will be allowed; and any award of the arbitrators in favor of a PARTY against the other PARTY may not exceed the
limitations on liability set forth in this AGREEMENT. Other than attorney's fees and expenses, the costs of arbitration will be born by the PARTY against whom the arbitral decision is made. Any
judgment or decision rendered by the panel will be binding upon the PARTIES and will be enforceable by any court of competent jurisdiction. For the avoidance of doubt, the arbitrators will be subject
in all respects to the terms and conditions of this AGREEMENT, including without limitation the limitations on liability set forth in Section 11 (Limitations on Liability). 

        15.   Miscellaneous  

         15.1.  Governing Law. This AGREEMENT and all disputes arising out of or related to this AGREEMENT, or the
performance,
enforcement, breach or termination hereof, and any remedies relating thereto, will be construed, governed, interpreted and applied in accordance with the laws of the State of New York applicable to
contracts made and performed entirely in such state, 

30

 

without
regard to any principle of conflict or choice of laws that would cause the application of the laws of any other jurisdiction, except that questions affecting the construction and effect of any
patent will be determined by the law of the country in which the patent will have been granted. 

        15.2.  Assignment. In the event a PARTY transfers ownership of all or substantially all of its business in the LICENSED
PRODUCTS and/or in the event A123 transfers ownership of all or substantially all of the PATENT RIGHTS (collectively, "BUSINESS TRANSFER"), that PARTY would be free to assign this AGREEMENT and the
SUPPLY AGREEMENT, together in whole but not in part, to the new owner of such business; provided that (i) GILLETTE will not have the right to assign this AGREEMENT or the SUPPLY AGREEMENT to
any THIRD PARTY that is not a PERMITTED ASSIGNEE OF GILLETTE, and (ii) A123 will not have the right to assign this AGREEMENT or the SUPPLY AGREEMENT to any THIRD PARTY that is not a PERMITTED
ASSIGNEE OF A123. Except as expressly provided in this Paragraph 15.2 and its subparagraphs, neither PARTY may assign this AGREEMENT, the SUPPLY AGREEMENT or any portion thereof to a THIRD
PARTY without the prior written consent of the other PARTY. 

        15.2.1.  During LEARNING PHASE. Despite anything to the contrary in Paragraph 15.2 (Assignment), if A123 signs a
definitive agreement for a BUSINESS TRANSFER during the LEARNING PHASE, then the BUSINESS TRANSFER will be further subject to either of Paragraphs 15.2.1.1 or 15.2.1.2. In either case, the
buyer in the BUSINESS TRANSFER and A123 will be jointly and severally liable for a breach by either A123 or the buyer of the SUPPORT obligation under Article 4 (Learning Support). 

        15.2.1.1.  Transfer of Substantially All Personnel / Capabilities. If the BUSINESS TRANSFER involves transfer of all or
substantially all of A123's personnel or other capabilities to provide SUPPORT hereunder, then A123 will assign this AGREEMENT to the buyer in such BUSINESS TRANSFER with such buyer's written
agreement to honor all A123's commitments hereunder, including the SUPPORT commitments hereunder. 

        15.2.1.2.  No Transfer of Substantially All Personnel / Capabilities. If the BUSINESS TRANSFER does not involve transfer of
all or substantially all of A123's personnel or other capabilities to provide SUPPORT hereunder, then the buyer in such BUSINESS TRANSFER will license back to A123 all transferred LICENSED TECHNOLOGY
for the purpose of A123 performing its SUPPORT and other obligations hereunder. 

        15.2.2.  Void & Invalid Assignments. Any assignment made in violation of Paragraph 15.2 (Assignment) and its
subparagraphs will be wholly void and invalid, the assignee will acquire no rights whatsoever, and the non-assigning PARTY will not recognize, nor will it be required to recognize, the
assignment. This provision limits both the right and the power to assign this AGREEMENT, and/or the rights hereunder. 

        15.3.  Notice. Any notices required or permitted under this AGREEMENT will be in writing, will specifically refer to this
AGREEMENT, and will be sent by hand, recognized national overnight courier, confirmed facsimile transmission, confirmed electronic mail, or registered or certified mail, postage prepaid, return
receipt requested, to the following addresses or facsimile numbers of the PARTIES. All notices under this AGREEMENT will be deemed effective upon receipt. A PARTY may change its contact information
immediately upon written notice to the other PARTY in the manner provided in this Paragraph 15.3 and its subparagraphs. 

31

 

If
to A123: 

A123
Systems, Inc.

321 Arsenal Street

Watertown, Massachusetts 02472

Attention: Eric Pyenson—VP, General Counsel

Tel: (617) 778-5700

Fax: (617) 778-5749 

with
a copy to: 

John
H. Chory, Esq

Wilmer Cutler Pickering Hale and Dorr LLP

Bay Colony Corporate Center

1100 Winter Street

Waltham, MA 02454

Tel: 617-526-6000

Fax: 617-526-5000 

If
to GILLETTE: 

Duracell

Berkshire Corporate Park

Bethel, Connecticut 06801

Attention: Rob DaPra, V.P. Strategic Planning,

                Business Development & Alliances

Tel: (203) 796-4362

Fax: (866) 734-7906

with
a copy to:

The
Procter & Gamble Company

One Procter & Gamble Plaza

Cincinnati, Ohio 45202

Attention: Associate General Counsel, Director

                Transactions Organization 

        15.4.  Press Releases. Neither PARTY will issue a press release regarding any aspect of this AGREEMENT, including any general
statements as to the existence of a relationship between the PARTIES, without the prior written consent of the other PARTY, unless otherwise required by law or regulation, in which case, the issuing
PARTY will provide the other PARTY reasonable prior written notice of the required disclosure. 

        15.5.  Force Majeure. Neither PARTY will be responsible for delays resulting from causes beyond the reasonable control of such
PARTY, including without limitation fire, explosion, flood, war, strike, or riot, provided that the nonperforming PARTY uses commercially reasonable efforts to avoid or remove such causes of
nonperformance and continues performance under this AGREEMENT with reasonable dispatch whenever such causes are removed. 

        15.6.  Amendment & Waiver. This AGREEMENT may be amended, supplemented, or otherwise modified only by means of a
written instrument signed by both PARTIES. Any waiver of any rights or failure to act in a specific instance will relate only to such instance and will not be construed as an agreement to waive any
rights or fail to act in any other instance, whether or not similar. 

32

 

        15.7.  Severability. In the event that any provision of this AGREEMENT will be held invalid or unenforceable for any reason,
such invalidity or unenforceability will not affect any other provision of this AGREEMENT, and the PARTIES will negotiate in good faith to modify the AGREEMENT to preserve (to the extent possible)
their original intent. If the PARTIES fail to reach a modified agreement within thirty (30) days after the relevant provision is held invalid or unenforceable, then the dispute will be resolved
in accordance with the procedures set forth in Article 14 (Dispute Resolution). While the dispute is pending resolution, this AGREEMENT will be construed as if such provision were deleted by
agreement of the PARTIES. 

        15.8.  Counterparts. This AGREEMENT may be executed in one or more counterparts, each of which when executed will be deemed to
be an original but all of which taken together will constitute one and the same agreement. A facsimile or .pdf copy of a signature of a PARTY will have the same effect and validity as an original
signature. 

        15.9.  Binding Effect. This AGREEMENT will be binding upon and inure to the benefit of the PARTIES and their respective
permitted successors and assigns. 

        15.10.  Headings. All headings are for convenience only and will not affect the meaning of any provision of this AGREEMENT. 

        15.11.  Entire Agreement. This AGREEMENT constitutes the entire agreement between the PARTIES with respect to its subject
matter and supersedes all prior agreements or understandings between the PARTIES relating to its subject matter. 

        15.12.  Construction. Except where the context otherwise requires, wherever used, the singular will include the plural, the
plural the singular, the use of any gender will be applicable to all genders and the word "or" is used in the inclusive sense (i.e., and/or). The words "hereof," "herein" and "hereunder" and
words of similar import when used in this AGREEMENT will refer to this AGREEMENT as a whole and not to any particular provision of this AGREEMENT. Article, paragraph and subparagraph references are to
this AGREEMENT, unless otherwise specified. The term "including" as used herein will mean including, without limiting the generality of any description preceding such term. The language of this
AGREEMENT will be deemed to be the language mutually chosen by the PARTIES and no rule of strict construction will be applied against either PARTY hereto. 

        15.13.  No Construction Against Drafter. Each PARTY acknowledges that it has been advised to, and has had the opportunity to
consult with its personal attorney prior to entering into this AGREEMENT. No law or rule relating to the construction or interpretation of contracts against the drafter of any particular clause will
be applied with respect to this AGREEMENT. 

        IN
WITNESS WHEREOF, the PARTIES have caused this Exclusive License Agreement to be executed by their duly authorized representatives. 

							
	A123 SYSTEMS, INC.	 	THE GILLETTE COMPANY
	
 By:	
 	
/s/ Michael Rubino

 	
 	
By:	
 	
/s/ Mark Bertolami

 
	Name: Michael Rubino

Title: CFO

Date: November 17, 2008	 	Name: Mark Bertolami

Title: President, Duracell

Date: November 13, 2008

33

 

 Schedule 1.19—EXISTING PATENTS

							
	 
	 	Title 	 	Assignee 	 	Publication Number 
	 [**]
	 	[**]	 	[**]	 	[**]

        Confidential
Materials omitted and filed separately with the Securities and Exchange Commission. A total of 3 pages were omitted. 

        [**]

34

 
Schedule 1.46.2—Obligations of PERMITTED ASSIGNEE OF GILLETTE  

PERMITTED ASSIGNEE agrees to the following: 

	1.
	Restricted Access.    For the period up to [**], PERMITTED ASSIGNEE will
restrict access to A123's CONFIDENTIAL INFORMATION to only PERMITTED ASSIGNEE employees that

	1.1.
	do not work directly in any areas of lithium phosphate design or coating services for application outside
the FIELD; and

	1.2.
	do not provide any lithium phosphate electrode design or coating services for application in the FIELD, to
any third party other than The Procter & Gamble Company, any AFFILIATEs of The Procter & Gamble Company, A123, and/or any AFFILIATEs of A123.

 

	2.
	Acknowledgment of Existing License Obligations.    PERMITTED ASSIGNEE will abide by the terms and
conditions of the AGREEMENT, including without limitation the restrictions regarding PERMITTED SUBLICENSEES. 

[Remainder of page intentionally left blank.] 

35

 
Schedule 1.47—Obligations of PERMITTED ASSIGNEE OF A123  

PERMITTED ASSIGNEE agrees to the following: 

	1.
	Restricted Access.    For the period up to [**], PERMITTED ASSIGNEE will
restrict access to A123's CONFIDENTIAL INFORMATION to only PERMITTED ASSIGNEE employees that

	1.1.
	do not work directly in lithium phosphate design or coating services for application in the FIELD; and

	1.2.
	do not provide any lithium phosphate electrode design or coating services in the FIELD, to any third party
other than The Procter & Gamble Company, any AFFILIATEs of The Procter & Gamble Company, A123, and/or any AFFILIATEs of A123.

 

	2.
	Acknowledgment of Existing License Obligations.    PERMITTED ASSIGNEE will abide by the terms and
conditions of the AGREEMENT. 

[Remainder of page intentionally left blank.] 

36

 
Schedule 10.1—CONFLICTING OBLIGATIONS  

None. 

[Remainder of page intentionally left blank.] 

37

QuickLinks

Exhibit 10.30QuickLinks
 -- Click here to rapidly navigate through this document

Confidential Materials omitted and filed separately with the

Securities and Exchange Commission. Asterisk denote omissions. 

 
 

  Exhibit 10.31    
    

 PURCHASE AGREEMENT  

        This is an agreement, ("AGREEMENT"), made and entered into as of 17 November 2008 ("EFFECTIVE DATE") between the BUYER and
SELLER (each a "PARTY" and collectively the "PARTIES"). 

 1.    Parties  

 1.1    Buyer  

        The Gillette Company ("BUYER"), a Delaware corporation, with offices at Prudential Center, 800 Boylston Street, Boston, MA 02199
("BUYER"). 

 1.2    Seller  

        A123 Systems, Inc., a Delaware corporation, with offices at 321 Arsenal Street, Watertown, Massachusetts 02472 ("SELLER"). 

 1.3    License Agreement  

        The PARTIES are simultaneously entering into an EXCLUSIVE LICENSE AGREEMENT (the "LICENSE AGREEMENT"). Capitalized terms used but not
defined herein shall have the meaning set forth in the LICENSE AGREEMENT. 

 2.    Goods  

 2.1    Goods; Specifications  

        SELLER shall sell and BUYER shall purchase the products and components set forth on Schedule A hereto ("GOODS") in accordance
with the terms and conditions set forth in this AGREEMENT. Schedule A may be amended by written mutual agreement of the PARTIES from time to time in accordance with the terms and conditions set
forth in this AGREEMENT. The GOODS shall be in strict compliance with the specifications as set forth in
BUYER's Specification Sheet(s) attached hereto as Schedule B or incorporated herein by reference and forming a part hereof and as amended from time to time in accordance with the Section
entitled Specification Changes ("SPECIFICATIONS"). For the avoidance of doubt, BUYER may only resell or distribute GOODS as part of the LICENSED PRODUCTS (as defined in the LICENSE AGREEMENT) and not
on a stand-alone basis or as part of a product that is not a LICENSED PRODUCT. 

 2.2    Specification Changes  

 2.2.1    General  

        From time to time, BUYER and SELLER may revise, supplement or otherwise amend the SPECIFICATIONS by mutual written agreement. These
revised SPECIFICATIONS shall become effective upon such mutual written agreement ("CHANGE DATE"). SELLER shall act in good faith and use commercially reasonable efforts to accept each revised
SPECIFICATIONS proposed by BUYER. 

 2.2.2    Objection  

        If SELLER refuses to accept amended SPECIFICATIONS proposed by BUYER ("OBJECTION"), the PARTIES shall promptly discuss the reason for
the OBJECTION and attempt to 

 

resolve
the same. If the PARTIES cannot resolve the OBJECTION within [**], then BUYER shall be entitled to immediately (i) terminate this AGREEMENT without any penalty,
liability or further obligation or (ii) purchase the GOODS from
other suppliers, to the extent such GOODS are available from other suppliers without BUYER providing SELLER's CONFIDENTIAL INFORMATION to such other supplier unless agreed to by SELLER or otherwise
provided for in the LICENSE AGREEMENT, in which case the obligations, of BUYER and SELLER hereunder shall be reduced accordingly. 

 2.3    Production Process and/or Raw Material Changes  

        SELLER shall not make any change to the raw and pack material feedstock, any portion or component of the GOODS, the production process,
the production equipment or the production location(s) relating to SELLER's performance under this AGREEMENT that has a material effect on the form or function of the GOODS unless and until SELLER has
obtained BUYER's prior written consent, not to be unreasonably withheld. 

 2.4    Material, Product or Equipment Disposal  

        Except as expressly permitted in the LICENSE AGREEMENT, BUYER shall utilize the Product for its own manufacturing purposes and BUYER
shall not re-sell the GOODS, or become a re-seller or distributor of the GOODS sold to BUYER under this Agreement. In the event that any material, product or equipment,
including, but not limited to, packaging materials, printing plates, molds, formulations, fragrances and ingredients, which incorporates BUYER's IP RIGHTS requires disposal ("DISPOSAL ITEM") while
under SELLER's ownership or control, SELLER is responsible for ensuring that such disposal is carried out under SELLER's direct control and full supervision in order to ensure that the DISPOSAL ITEM
is made entirely unsalvageable. SELLER shall not contract out such disposal or involve any third parties in this process without the prior written consent of BUYER. Upon expiration or termination of
this AGREEMENT, SELLER shall compile an inventory of all DISPOSAL ITEMS for agreement with BUYER as to which items require disposal in accordance with the procedure described above. SELLER is
responsible for taking all reasonable steps to prevent the counterfeiting of BUYER's current or previously marketed products or the infringement of BUYER's IP RIGHTS resulting from the use of any
DISPOSAL ITEMS. 

 3.    Quality and Acceptance  

 3.1    Quality  

        a.    For a period of [**] following DELIVERY (the "WARRANTY PERIOD"), the GOODS shall be in strict
compliance with the SPECIFICATIONS and in accordance with the terms and conditions set forth in this AGREEMENT; to the extent the GOODS are stored in accordance with their SPECIFICATIONS. 

        b.    SELLER
will: 

	i)
	Maintain
ISO 9002 certification or equivalent.

	ii)
	Provide
a Certificate of Conformance (per 82-01-17) with each lot shipped 

        c.    If
there arises a GOODS failure which is classified as "MATERIAL DEFECTS" in the GOODS supplied to BUYER under this AGREEMENT, BUYER may, after SELLER' approval which
shall not be unreasonably withheld, and during normal business hours, inspect SELLER's manufacturing, storage, and shipment operations and facilities as they relate to or affect the GOODS. "MATERIAL
DEFECTS" shall mean a SELLER's production failure which may pose a hazard to the consumer during intended use and reasonably foreseeable misuse. BUYER shall bear the expense of its representatives'
conducting such inspection. 

2

 

        d.    It
is explicitly understood by SELLER that BUYER is not obliged to execute any incoming inspection or other inspections concerning non-compliance with the
SPECIFICATIONS. 

        e.    Up
to [**] per year, during regular business hours and on mutually agreed date, BUYER reserves the right to observe and inspect SELLER's
manufacturing premises for
compliance with applicable regulations, BUYER quality standards, and BUYER SPECIFICATIONS. The audits should be limited to items related to the GOODS and only for the purpose of confirming SELLER's
operation of document control pursuant to ISO 9002. 

 3.2    Return, Rework & Scrapping  

        Any GOODS DELIVERED by SELLER to BUYER that are not in full compliance with this AGREEMENT may, upon mutual agreement between BUYER and
SELLER within [**] after BUYER's notice to SELLER be (i) returned to SELLER at SELLER's expense for credit to BUYER at the full price plus all costs and expenses
associated with such return, including, without limitation, payment or reimbursement for customs duties and freight charges; or (ii) if approved by SELLER, destroyed by BUYER, at SELLER's
expense, in which case BUYER shall be relieved of any payment obligations with respect to such GOODS. The rights and remedies set forth in this Section are not exclusive and nothing herein shall limit
the rights and remedies either PARTY may have under this AGREEMENT or at LAW. The judgment of the non-conforming GOODS should be based on mutual understanding. BUYER should send to SELLER
the non-conforming GOODS report and alleged non-conforming GOODS (hereinafter referred to as "Sample"). On the receipt of concerned Sample, SELLER will analyze it and make a
written report to BUYER within [**] as from the receipt of the Sample. If SELLER agrees that such Samples are non-conforming, SELLER will replace such
non-conforming GOODS with conforming GOODS and reimburse the actual cost such as sample delivery cost and defective product disposal cost. 

 4.    Quantity  

 4.1    Purchase & Sale Obligations  

        Upon BUYER's request during the PERIOD, and in accordance with the terms and conditions set forth in this AGREEMENT, SELLER shall sell
and BUYER shall purchase quantities of the GOODS consistent with the forecast set forth in Section 4.4 below. For purposes of clarification, these numbers are estimates and shall not be
construed as a minimum purchase commitment or give rise to liability on behalf of BUYER if BUYER's purchases of GOODS are less than these estimates. 

 4.2    Purchase Orders  

        From time to time during the PERIOD, BUYER may request GOODS from SELLER pursuant to and in accordance with separate BUYER forms of
purchase orders, releases or other related documentation (collectively "PURCHASE ORDERS"). Such PURCHASE ORDERS shall specify quantities of GOODS, shipping instructions, delivery date(s) and detailed
instructions for the delivery of GOODS (with release schedules, delivery orders or equivalent notices). Lead times shall be at least [**] prior to requested delivery. Subject
to Section 4.3 hereof, each PURCHASE ORDER shall be binding upon SELLER and BUYER, and shall be deemed to constitute a part of this AGREEMENT as if fully set forth herein, and all terms and
conditions of this AGREEMENT shall be deemed to apply to the subject matter of such PURCHASE ORDER as if fully set forth therein. In the event of any conflict or inconsistency between the terms of
this AGREEMENT and the terms of any PURCHASE ORDER, the terms of this AGREEMENT shall prevail. SELLER shall not be obligated to accept a PURCHASE ORDER except as expressly provided in
Section 4.4 hereof. 

3

 

 4.3    Reduction or Discontinuance of Purchases  

        SELLER acknowledges and agrees that BUYER may deem it necessary, from time to time, to reduce or discontinue purchases of the GOODS
covered by this AGREEMENT because of product or packaging reformulation; process change; changes in technology; changes in the laws governing the GOODS or sale or distribution of the GOODS; the
discontinuance of the GOODS; divestiture of the business in which the GOODS reside; relocation of production to one of BUYER's facilities; relocation of production to a third party supplier; or
similar reasons. In such event, BUYER shall provide SELLER with reasonable, but not less than [**], prior written notice of any such reduction or discontinuance, and BUYER
shall be entitled to thereupon reduce or discontinue further purchases of GOODS from SELLER hereunder without any penalty, liability or further obligation. 

 4.4    Forecasts  

        a.    BUYER's estimated annual demand for the GOODS during the term of this Agreement is set forth on  Schedule C
("Forecast"). The quantities set forth on Schedule C are provided for guidance
purposes only. BUYER may, without obligation to SELLER, decrease or increase the estimates and will notify SELLER in writing of such changes. This is not a requirements contract. BUYER may in its
unfettered discretion elect to discontinue any item at any time, provided however that BUYER shall be responsible for all raw material, work-in-process and/or finished GOODS on
SELLER's hand, not to exceed a [**] supply, related to BUYER production in case of discontinuation. To minimize the cost of remaining material, BUYER shall send to SELLER
[**] prior notice in case of such discontinuation. SELLER will cooperate to make reasonable adjustment by reducing or canceling orders for the material purchase. 

        b.    To
ensure that BUYER's demand is met and that SELLER is able to plan for efficient operations, BUYER will provide to SELLER a requirements' forecast for the GOODS on a
monthly (or other acceptable frequency) basis for the following [**] period by the [**] of each month. 

        c.    Purchase
orders will be placed monthly with a minimum [**] lead-time. SELLER will provide the flexibility of accepting changes to the
[**] forecast at a rate of +/- [**]% in the [**] and at a rate of +/- [**]% in the
[**] and [**]. SELLER commits to supplying the amounts set forth in the Forecast. For requests for supply in excess of the Forecast, A123 shall not be
required to supply GOODs in excess of the Forecast that cause A123's current utilization for any purposes (excluding supply to BUYER) on the Effective Date, plus any BUYER orders, to exceed SELLER's
capacity to manufacture such GOODs. SELLER will provide BUYER with updates as to SELLER's capacity restraints from time to time. BUYER and SELLER will communicate quarterly on capacity issues and
BUYER's anticipated requirements. In the event BUYER's anticipated requirements over a [**] period exceeds SELLER's capacity, SELLER will use commercially reasonable efforts to
increase capacity to address BUYER's expected requirements of the GOODs in excess of the Forecast. SELLER may, but shall not be required to, procure GOODS from third parties, reasonable acceptable to
BUYER, or will advise BUYER the capital costs required to increase capacity (if SELLER determines in its sole discretion that such costs are too much for SELLER to bear) which BUYER may choose to pay
to SELLER if BUYER desires that SELLER increase capacity, in order to meet its supply commitments hereunder. 

 5.    Price and Taxes  

 5.1    Price  

        The price(s) for the GOODS, excluding TAXES, shall be the prices set forth in Chinese Renminbi (RMB) on Schedule A ("PRICE").
The PRICE shall include any goods and services necessary to fulfill this AGREEMENT. All payments of PRICES under this AGREEMENT should be made by wire transfer to an address provided by SELLER, as
SELLER may identify to BUYER in writing from time 

4

 

to
time. The Price shall be adjusted every [**] based on commodity indices and the non-commodity portion of the PRICE for a type of GOOD will be subject to an
annual reduction of [**]% commencing January 1st after the first production shipment of such GOOD. 

        For
the avoidance of doubt, products provided to BUYER for research, development or experimental purposes shall be supplied to BUYER under separate terms, conditions and pricing, as may
be agreed by BUYER and SELLER from time to time, and not under this AGREEMENT unless otherwise agreed in writing by BUYER and SELLER on a case-by-case basis at cost
+[**]%. 

 5.2    Taxes  

 5.2.1  

        SELLER shall be responsible for and pay all fees, expenses, charges, costs, and taxes payable for the transaction relating to the GOODS
imposed by a governmental or regulatory body (including, without limitation, any sales, use, exercise, value-added, services, consumption, and other taxes and duties) the taxable incident of which
occurs prior to or upon BUYER's receipt of title of GOODS ("TAXES"). 

 5.2.2  

        SELLER shall be responsible for and pay any personal property taxes on property it owns or leases, for franchise and privilege taxes on
its business, and for taxes based on its net income or gross receipts. 

 5.2.3  

        SELLER's invoices shall separately state the amount of any taxes SELLER is charging BUYER, to the extent applicable. SELLER shall
provide and make available to BUYER other resale certificates, information regarding out-of-state or out-of-country sales or use of equipment, materials
or services, and other exemption certificates or information reasonably requested by BUYER. 

 5.3    Meet or Release  

        If, during the PERIOD of this AGREEMENT, BUYER can purchase goods of like quality to GOODS hereunder from another supplier at a total
delivered cost to a BUYER facility that is lower than the total delivered cost of the GOODS purchased hereunder from SELLER, BUYER may notify SELLER of such total delivered cost and SELLER shall have
an opportunity to price the GOODS purchased hereunder on such a basis as to result in the same total delivered cost to BUYER within [**] of such notice. If SELLER fails to do
so or cannot legally do so, then BUYER shall be entitled to immediately (i) terminate this AGREEMENT on ninety (90) days prior written notice without any penalty, liability or further
obligation; (ii) purchase the similar goods from other suppliers in which case the obligations of BUYER and SELLER hereunder shall be reduced accordingly commencing [**]
after notice is delivered to SELLER; or (iii) continue purchases under this AGREEMENT. This Section 5.3 is subject in all respects to the restrictions set forth in Section 2.2,
and elsewhere, in the LICENSE AGREEMENT. 

 6.    Contract Period & Termination  

 6.1    Contract Period  

        The period of this AGREEMENT ("PERIOD") shall begin on the EFFECTIVE DATE and end 4 years thereafter, unless earlier terminated
in accordance with the provisions hereof. 

5

 

 6.2    Early Termination  

        In the event that (i) SELLER breaches any representation, warranty, covenant or other obligation set forth in this AGREEMENT,
and fails to cure such breach as promptly as practicable but in any event within [**] of notice of such breach by BUYER, or (ii) SELLER becomes unable to pay its bills
as they become due in the ordinary course, a trustee or receiver of SELLER's property is appointed, the SELLER makes an assignment for the benefit of creditors, a petition in bankruptcy is filed by or
against the SELLER or the SELLER terminates or liquidates its business, then BUYER shall be entitled to immediately (a) terminate this AGREEMENT, without any penalty, liability or further
obligation therefore (except for SELLER's costs of custom materials) or (b) purchase similar goods from other suppliers in which case the obligations of BUYER and SELLER hereunder shall be
reduced accordingly. In the event that (i) BUYER breaches any representation, warranty, covenant or other obligation set forth in this AGREEMENT, and fails to cure such breach as promptly as
practicable but in any event within
[**] of notice of such breach by SELLER, or (ii) BUYER becomes unable to pay its bills as they become due in the ordinary course, a trustee or receiver of BUYER's
property is appointed, BUYER makes an assignment for the benefit of creditors, a petition in bankruptcy is filed by or against BUYER or BUYER terminates or liquidates its business, then SELLER shall
be entitled to immediately terminate this AGREEMENT, without any penalty, liability or further obligation therefore. Further, upon expiration or termination of the LICENSE AGREEMENT, this AGREEMENT
shall terminate automatically and without notice. Nothing in this Section 6.2 shall be deemed to grant a license or other rights to BUYER in SELLER's intellectual property rights. 

 6.3    Effect of Termination  

        Termination or expiration of this AGREEMENT shall not relieve either PARTY of any liability or obligation it may have to the other
arising out of or related to acts or omissions occurring prior to such termination or expiration. In case of termination or expiration of this AGREEMENT by BUYER, SELLER shall make available for
BUYER's immediate removal any of BUYER's property then in the possession of SELLER or any of its subcontractors, or under SELLER's or any of its subcontractor's control. 

 7.    Shipping, Payment & Delivery  

 7.1    Shipment Terms  

        GOODS shall be delivered FOB (Incoterms 2000) Port of Exit. As used in this AGREEMENT, the term "DELIVERY" and its derivatives mean
receipt of the GOODS at the BUYER's final destination. SELLER shall retain title and risk of loss for GOODS until DELIVERY. 

 7.2    Payment Terms  

 7.2.1  

        Payment terms shall be Net [**]. 

 7.2.2    Payment Terms  

        For all invoices, whether subject to discount for prompt payment or not, the discount period and the due date for payment shall be
calculated from the date the accurate invoice is received at the location as designated by BUYER or the date of DELIVERY of the corresponding GOODS, whichever is later. BUYER may withhold payment if
SELLER's invoice is incorrect or does not conform to BUYER's invoicing instructions. Payment shall be made in Chinese Renminbi (RMB). 

6

 

 8.    Representations and Warranties  

 8.1    General Representations & Warranties  

        SELLER represents and warrants that as of DELIVERY of the GOODS to BUYER and during the WARRANTY PERIOD the GOODS and any and all
article(s), chemical or other component(s) or composition(s) forming a part thereof hereunder shall: 

 8.1.1  

        be in compliance with all SPECIFICATIONS applicable to such GOODS and any parts thereof; 

 8.1.2  

        be of good materials and workmanship and free from defects in materials and workmanship, whether latent or patent; 

 8.1.3  

        be labeled accurately and appropriately; 

 8.1.4  

        be in compliance with all applicable LAWS. 

        This
shall not apply if the GOODS have been subjected to misuse or if the original identification markings have been defaced, altered or removed. SELLER reserves the right to inspect any
allegedly defective GOODS. 

 8.2    Title and Liens  

 8.2.1  

        SELLER represents and warrants that upon DELIVERY of the GOODS, SELLER shall pass to BUYER, and BUYER shall receive, good and
marketable title to such GOODS, free and clear of all liens, claims, security interests pledges, charges, mortgages, deeds of trusts, options, or other encumbrances of any kind ("LIENS"). 

 8.2.2  

        SELLER shall at all times keep any of BUYER's property in the possession of SELLER or any of its subcontractors or under SELLER's or
any of its subcontractors' control free and clear of any LIENS, and hereby grants BUYER the right to file such protective financing or similar statements to confirm and record BUYER's ownership
thereof. 

 8.3    Intellectual Property Rights  

        Notwithstanding anything to the contrary in this AGREEMENT, SELLER (i) represents and warrants that as of the DELIVERY of the
GOODS to BUYER that the GOODS and any parts thereof and BUYER's purchase, use, sale, offer to sell and/or importing of such GOODS and any parts thereof, do not infringe any copyrights, design patents,
utility patents, trademarks, trade secrets or similar intellectual property rights (collectively "IP RIGHTS") of any third party excluding any infringement alleged in the UT LAWSUIT (as defined in the
LICENSE AGREEMENT); (ii) represents and warrants that, except as disclosed to BUYER by SELLER on or prior to the EFFECTIVE DATE, at the EFFECTIVE DATE there are no claims currently being
asserted and no actions pending or threatened against SELLER by any third party that the GOODS and any parts 

7

 

thereof
allegedly infringe, violate or misappropriate third party IP RIGHTS and (iii) covenants to provide BUYER with immediate notice of such claims or actions as they arise after the
EFFECTIVE DATE. 

 8.4    Child Labor and Forced Labor  

        SELLER represents, warrants and covenants that SELLER does not and will not employ children, prison labor, indentured labor, bonded
labor or use corporal punishment or other forms of mental and physical coercion as a form of discipline. In the absence of any national or local law, BUYER and SELLER agree to define "child" as less
than 15 years of age. If local LAW sets the minimum age below 15 years of age, but is in accordance with exceptions under International Labor Organization Convention 138, the lower age
will apply. BUYER has the right to make unannounced inspections, and conduct appropriate audits of books and records, of all of SELLER'S premises and any other premises employed in connection with
SELLER'S provision of GOODS or parts thereof hereunder, to ensure compliance with this Section. SELLER shall, and shall cause each entity involved through SELLER in the provision of GOODS or parts
thereof hereunder, to comply with any code of conduct or similar policy statement promulgated by BUYER from time to time. 

 8.5    Corporate Authority  

        The PARTIES represent, warrant and covenant that (i) each PARTY is and shall be at all times a legal entity validly existing
under the laws of its jurisdiction with the power
to own all of its properties and assets and to carry on its business as it is currently being conducted; (ii) each PARTY has the power to execute and deliver this AGREEMENT and to perform its
obligations under this AGREEMENT; (iii) each PARTY's officer executing this AGREEMENT is duly authorized to execute and deliver this AGREEMENT on its behalf, and no further corporate
proceedings are necessary with respect thereto; (iv) each PARTY is not required to obtain the consent of any third party, including the consent of any party to any contract to which it is a
party, in connection with execution and delivery of this AGREEMENT and performance of its obligations under this AGREEMENT; and (v) each PARTY's execution and delivery of this AGREEMENT and
performance of its obligations under this AGREEMENT do not (a) violate any provision of its articles of incorporation or by-laws or equivalent corporate provision as currently in
effect, or (b) conflict with, result in a breach of, constitute a default under (or an event which, with notice or lapse of time or both, would constitute a default under), accelerate the
performance required by, result in the creation of any lien upon any of its properties or assets under, or create in any party the right to accelerate, terminate, modify, or cancel, or require any
notice under, any contract to which it is a party or by which any of its properties or assets are bound. 

 8.6    Compliance with Laws and Safety Measures  

 8.6.1    Laws  

        SELLER represents, warrants and covenants that SELLER is and shall at all times, be in full compliance with all applicable
governmental, legal, regulatory and professional requirements, including without limitation all applicable laws, codes regulations, rules, ordinances, judgments, orders and decrees, including, without
limitation, those related to IP RIGHTS, fair trade and anti trust, customs, immigration, labor, employment, working conditions, worker health and safety, branding and labeling, adulteration and
contamination, board of health and environmental matters (collectively "LAWS"). 

 8.6.2    Licenses, Consents, Permits  

        SELLER represents, warrants and covenants that SELLER has obtained and maintains in full force and effect all governmental licenses,
consents, permits, approvals, authorizations and the like required to lawfully perform SELLER'S obligation under this AGREEMENT. SELLER (i) shall 

8

 

promptly
notify BUYER if SELLER receives any notice, demand, summons or complaint from any governmental or regulatory authority, agency or other body relating to the GOODS and parts thereof or
SELLER'S performance in accordance with this AGREEMENT, and (ii) shall take all steps, at SELLER'S expense, to remedy and resolve any issues raised therein as promptly as practicable. 

 8.7    Seller Diversity Program  

        If SELLER has operations (production, sales, administrative) physically located in the United States of America which are involved in
SELLER's performance under this AGREEMENT, then SELLER is expected to develop procurement and contracting strategies aimed at meeting the goals of BUYER's minority business development program (a.k.a.
Supplier Diversity Program). Such strategies shall include sourcing methods, goals, reporting and efforts to encourage sub-contractors' use of minority vendors. SELLER shall use its good
faith commercial efforts that the use of such minority vendors shall reach or exceed [**]% of the PRICE. SELLER shall report to BUYER the amount of such minority vendor
spending quarterly. BUYER's sole and exclusive remedy for SELLER's breach of this Section 8.7 shall be to terminate this AGREEMENT for breach. 

9

 

 8.8    Applicability and Survival of Representations and Warranties  

        SELLER's representations, warranties and covenants set forth in the Section 8 entitled GENERAL REPRESENTATIONS &
WARRANTIES shall remain in effect with respect to each delivery of the GOODS to BUYER for the applicable WARRANTY PERIOD. For the avoidance of doubt the BUYER shall remain entitled to claim against
the SELLER for breaches of such representations, warranties and covenants after the expiry of the WARRANTY PERIOD for breaches that occurred during the WARRANTY PERIOD, so long as SELLER is provided
with such claim of breach within [**] of the end of the WARRANTY PERIOD. Any other of SELLER's representations, warranties, covenants and other obligation set forth in this
AGREEMENT shall be subject to all applicable statutes of limitation, similar statutes and other similar defenses provided by law or equity. 

 8.9    No Other Warranties  

        EXCEPT AS EXPRESSLY SET FORTH IN THIS AGREEMENT, SELLER MAKES NO OTHER REPRESENTATIONS OR WARRANTIES OF ANY KIND CONCERNING THE GOODS,
EXPRESS OR IMPLIED, INCLUDING WITHOUT LIMITATION WARRANTIES OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE AND NONINFRINGEMENT. 

 9.    Indemnification and Insurance  

 9.1    Seller's Indemnification of Buyer  

 9.1.1    Indemnity.  

        SELLER shall defend, indemnify and hold harmless BUYER, its parent, its affiliates and subsidiaries, and their respective agents,
officers, directors and employees (collectively, "BUYER INDEMNITEE") by law, in equity or otherwise, at its own expense, from and against all claims including third party claims, allegations, demands,
liabilities, fines, losses, damages, costs and expenses, including without limitation reasonable fees and expenses of attorneys and any amounts paid in settlement (collectively "CLAIMS"), arising out
of (i) SELLER's supply of GOODS in breach of the warranties set forth in Section 8.1 of this AGREEMENT, provided such breach occurs during the WARRANTY PERIOD; (ii) the gross
negligence, bad faith, or willful misconduct of SELLER or subcontractors (whether or not approved by BUYER) or their respective employees or other representatives; (iii) bodily injury, death or
damage to personal property arising out of or relating to SELLER's or subcontractors' breach of the warranties set forth in Section 8. of this AGREEMENT, and (iv) the infringement of any
copyright, trade secret, patent right in the United States, patent right in Europe, patent right in Japan, or other proprietary right through the sale of the GOODS to BUYER excluding
[**]. 

 9.1.2    Disclaimer.  

        The foregoing indemnity shall not apply to any infringement claim to the extent arising from (i) GOODS that have been modified
by anyone other than SELLER or its subcontractors where such modification or modified state of the GOODS gave rise to the infringement claim; and/or (ii) Client's use of the GOODS with other
components, where use with such other components gave rise to the infringement claim and/or (iii) compliance by SELLER with designs, plans or specifications furnished by or on behalf of Client. 

 9.2    Buyer's Indemnification of Seller  

        BUYER shall defend, indemnify and hold harmless SELLER, its parent, its affiliates and subsidiaries, and their respective agents,
officers, directors and employees (collectively, "SELLER INDEMNITEE") by law, in equity or otherwise, at its own expense, from and against CLAIMS, arising 

10

 

out
of BUYER's sale or other distribution or use of GOODS or products incorporating the GOODS except to the extent SELLER is obligated to indemnify BUYER hereunder. 

 9.3    Indemnification Procedures.  

        Within [**] after its receipt of notice of the commencement of any third party legal proceeding, a PARTY
seeking indemnification hereunder ("INDEMNIFIED PARTY") shall notify the other PARTY ("INDEMNIFYING PARTY") thereof; provided that the failure to provide such notice shall not relieve INDEMNIFYING
PARTY of its indemnity obligations hereunder to the extent such INDEMNIFYING PARTY did not suffer prejudice. INDEMNIFYING PARTY shall, upon INDEMNIFIED PARTY'S request, be entitled, at its own
expense, to assume the defense of any such third party CLAIM with reputable counsel reasonably acceptable to INDEMNIFIED PARTY. INDEMNIFYING PARTY shall be entitled to settle any such third party
CLAIM, with INDEMNIFIED PARTY'S written consent, which consent shall not be unreasonably withheld or delayed. The INDEMNIFYING PARTY shall pay any damages assessed against INDEMNIFIED PARTY in such
third party CLAIM. The INDEMNIFIED PARTY at the INDEMNIFYING PARTY's cost, shall reasonably cooperate with the INDEMNIFYING PARTY in the defense of such action as the INDEMNIFYING PARTY may reasonably
request. 

 9.4    Insurance  

 9.4.1    General Insurance Policy Requirements  

        For the PERIOD, SELLER shall maintain and cause its subcontractors to maintain at their own expense the insurance coverage set forth in
Section entitled INSURANCE COVERAGE in full force and effect during the PERIOD. with underwriters acceptable to BUYER and having an A. M. Best's rating of "A VIII" or better or its equivalent rating
where not available. SELLER shall provide BUYER with a copy of Certificate(s) of Insurance. All insurance policies shall provide for a [**] prior written notice to BUYER in the
event of termination, cancellation, non renewal or a material change to the requirements as set forth in this Section entitled INSURANCE. All insurance policies shall be primary without right of
contribution from any of BUYER's insurance carriers. 

 9.4.2    Insurance Coverage  

 9.4.2.1  

        Commercial General Liability including GOODS Completed Operations and Blanket Contractual "occurrence form" coverage with the following
limits of liability: 

	(i)
	$5,000,000
per occurrence combined single limit for Bodily Injury and Property Damages; and

	(ii)
	minimum
$5,000,000 limit of liability per occurrence for GOODS-Completed Operations, Product Liability and Contractual Liability to include liability
assumed under this AGREEMENT. 

 9.4.3    Additional Insured  

        The Commercial General Liability policy shall include BUYER INDEMNITEE as additional insured in connection with the activities
contemplated by the scope of this AGREEMENT to be stated explicitly on the Certificate(s) of Insurance. 

11

 

 9.4.4    Waiver of Subrogation  

        SELLER hereby irrevocably and unconditionally waives and shall cause its insurers to irrevocably and unconditionally waive any rights
of subrogation for claims against BUYER INDEMNITEE to be documented to BUYER's satisfaction. 

 9.4.5    Liability of Seller  

        SELLER's compliance with this Section shall not relieve SELLER of any liability to BUYER INDEMNITEE arising under any other provision
of this AGREEMENT except to the extent that such monies recovered are paid to BUYER INDEMNITEE to reduce SELLER's obligations to BUYER INDEMNITEE. SELLER shall be liable for any and all deductibles it
may incur in connection with any of the policies listed in the Section entitled INSURANCE. 

 10.    Confidentiality  

 10.1    Disclosure of Confidential Information  

        During the course of this AGREEMENT, it may be necessary for a PARTY (the "DISCLOSER") to disclose to the other PARTY, orally or in
writing, proprietary information and/or materials regarding the DISCLOSER's technology, products, business information, and/or business objectives which the DISLCOSER considers highly confidential
("CONFIDENTIAL INFORMATION"). In addition, this AGREEMENT will be considered CONFIDENTIAL INFORMATION. 

 10.2    Obligation of Confidentiality  

        Subject to Section 10.3 (Form of Disclosure) and its sub-sections, all CONFIDENTIAL INFORMATION disclosed by a PARTY
to the other PARTY during the term of this AGREEMENT, shall not be used by the receiving PARTY except in connection with the activities contemplated by this AGREEMENT, shall be maintained in
confidence by the receiving PARTY, and shall not otherwise be disclosed by the receiving PARTY to any other person, firm, or agency, governmental or private, without the prior written consent of the
disclosing PARTY, except to the extent that the CONFIDENTIAL INFORMATION (as determined by competent documentation): 

	(a)
	was
known or used by the receiving PARTY prior to its date of disclosure to the receiving PARTY; or

	(b)
	either
before or after the date of the disclosure to the receiving PARTY is lawfully disclosed to the receiving PARTY by sources other than the disclosing
PARTY rightfully in possession of the CONFIDENTIAL INFORMATION; or

	(c)
	either
before or after the date of the disclosure to the receiving PARTY becomes published or generally known to the public (including information known to
the public through the sale of products in the ordinary course of business) through no fault or omission on the part of the receiving PARTY or its sublicensees; or

	(d)
	is
independently developed by or for the receiving PARTY without reference to or reliance upon the CONFIDENTIAL INFORMATION; or

	(e)
	is
required to be disclosed by the receiving PARTY to comply with applicable laws, to defend or prosecute litigation or to comply with governmental
regulations, provided that the receiving PARTY provides prior written notice of such disclosure to the disclosing PARTY and takes reasonable and lawful actions to avoid and/or minimize the degree of
such disclosure. It is understood by both PARTIES that A123 will disclose this AGREEMENT to the minimum extent required by law and regulation in connection with securities filings or registrations 

12

 

made
by A123, after providing GILLETTE and opportunity to review and comment on such disclosures. 

 10.3    Form of Disclosure  

        The obligations of the receiving PARTY under Section 10.2 (Obligation of Confidentiality) and its sub-sections will
only extend to CONFIDENTIAL INFORMATION which is disclosed to the receiving PARTY by the disclosing PARTY: 

	(a)
	in
written form and clearly marked as being confidential; or

	(b)
	if
not in tangible form (e.g., disclosed orally or observed), then identified as confidential when revealed and summarized in a writing delivered to
the receiving PARTY within [**] of such disclosure, where such writing contains the following:

	(i)
	marked
as "Confidential", "Proprietary", "Secret" or similar marking,

	(ii)
	a
summary description of the disclosed CONFIDENTIAL INFORMATION,

	(iii)
	lists
the place and date of disclosure, and

	(iv)
	lists
the names of the persons to whom the disclosure was made. 

 10.4    Employee & Advisor Obligations  

        Each PARTY shall provide CONFIDENTIAL INFORMATION received from the other PARTY only to their respective employees, consultants,
advisors AFFILIATEs and SUBLICENSEEs, and to the employees, consultants and advisors of such PARTY's AFFILIATEs and SUBLICENSEEs, who have a need to know and have an obligation to treat such
information and materials as confidential. 

 10.5    Contract Manufacturers  

        Subject to Section 2.2 of the LICENSE AGREEMENT, BUYER and its AFFILIATES may share SELLER CONFIDENTIAL INFORMATION with third
party manufacturers who have a need to know for purposes of supplying BUYER and/or its AFFILIATEs, who are under an obligation of confidentiality at least as stringent as set forth in this
Section 10. Notwithstanding the foregoing or anything to the contrary in this AGREEMENT, in no event will BUYER nor any of its AFFILIATEs share CONFIDENTIAL INFORMATION on NANOPHOSPHATE with a
THIRD PARTY manufacturer, without the prior written consent of SELLER . 

 10.6    Terms of Agreement are Confidential  

        Except as permitted in this Section 10, neither the actual terms of this AGREEMENT nor the AGREEMENT itself will be disclosed by
either PARTY to a THIRD PARTY, without the prior written consent of the other PARTY; other than to (a) its representatives and attorneys in the course of any legal proceeding to which either of
the PARTIES hereto is a party for the purpose of securing compliance with this AGREEMENT; (b) a bona fide potential buyer of all or substantially all of the PARTY's business in LICENSED
PRODUCTS; (c) in the case of BUYER , to its AFFILIATEs, SUBLICENSEES or THIRD PARTY customers, where such disclosure is limited to the existence of the AGREEMENT, the exclusive nature of the
license, and the scope of the FIELD, and where the AFFILIATE, SUBLICENSEE or THIRD PARTY will be under obligations of confidentiality with respect to such disclosure; and (d) in the case of
SELLER , to its licensors of any of the LICENSED TECHNOLOGY, to the extent necessary to comply with any obligations of SELLER under the applicable license agreements as of the EFFECTIVE DATE. 

13

 

 10.7    Term  

        All obligations of confidentiality imposed under this Section 10 shall expire [**] years following
termination or expiration of this AGREEMENT or the LICENSE AGREEMENT whichever or later in time, or upon written release of such obligations by the disclosing PARTY, whichever is earlier. 

 11.    Limitations on Liability  

 11.1    Disclaimer of Incidental/Consequential Damages  

        In no event shall either PARTY, its directors, officers, employees and AFFILIATEs be liable for incidental, consequential, exemplary or
punitive damages of any kind in connection with this AGREEMENT, including without limitation economic damages or injury to property or lost profits, regardless of whether any such entity or person
shall be advised, shall have other reason to know, or in fact shall know of the possibility of the foregoing. 

 11.2    Limitation of Liability  

        SELLER's aggregate liability pursuant to this AGREEMENT, whether in contract, tort, or otherwise, arising out of or in connection with
this AGREEMENT shall not exceed,  

	i)
	for
claims arising in year one (1), $[**] plus the amounts previously paid to SELLER for the GOODS in that 12 months period
under this AGREEMENT, less any amounts previously or contemporaneously paid by SELLER to BUYER as a liability, remedy or settlement of liability under this AGREEMENT (including without limitation any
amounts paid to BUYER or any THIRD PARTY pursuant to Section 9).

	ii)
	for
claims arising in year two (2) $[**] plus the amounts previously paid to SELLER for the GOODS in that 12 months
period under this AGREEMENT, less any amounts previously or contemporaneously paid by SELLER to BUYER as a liability, remedy or settlement of liability under this AGREEMENT (including without
limitation any amounts paid to BUYER or any THIRD PARTY pursuant to Section 9).

	iii)
	for
claims arising in year three (3) $[**] plus the amounts previously paid to SELLER for the GOODS in that 12 months
period under this AGREEMENT, less any amounts previously or contemporaneously paid by SELLER to BUYER as a liability, remedy or settlement of liability under this AGREEMENT (including without
limitation any amounts paid to BUYER or any THIRD PARTY pursuant to Section 9).

	iv)
	for
claims arising in year four (4) $[**] plus the amounts previously paid to SELLER for the GOODS in that 12 months
period under this AGREEMENT, less any amounts previously or contemporaneously paid by SELLER to BUYER as a liability, remedy or settlement of liability under this AGREEMENT (including without
limitation any amounts paid to BUYER or any THIRD PARTY pursuant to Section 9).

	v)
	for
claims arising after the expiry of this AGREEMENT but within twelve (12) months of such expiry, $[**].

	vi)
	for
claims arising after the expiry of all periods set out in sections 11.2 (i)—(v) above, $[**]. 

 11.3    Exceptions  

        This Section 11 shall not limit either PARTY's liability for any claims arising from: 

	i)
	a
breach of Section 10. (Confidentiality),

	ii)
	breach
of Section 8.2 (Title and Liens) , or Section 8.4 (Child Labor and Forced Labor), 

14

 

	iii)
	except
with respect to Section 11.1, breach of Section 4.1 (Purchase and Sale obligations) and Section 5.1 (Price),

	iv)
	gross
negligence, willful misconduct or fraud of a PARTY. 

 12.    MISCELLANEOUS PROVISIONS  

 12.1    Assignment  

        This AGREEMENT may only be assigned by a PARTY in connection with an assignment permitted pursuant to Section 15.2 of the
LICENSE AGREEMENT, except as the PARTIES may otherwise agree in writing on a case-by-case basis. Any assignment made in violation of this Section shall be wholly void and
invalid, the assignee shall acquire no rights whatsoever, and the non-assigning Party shall not recognize, nor shall it be required to recognize, the assignment. This provision limits both
the right and the power to assign this AGREEMENT, and/or the rights hereunder. 

 12.2    Contractor Status  

        The PARTIES are and shall remain independent contractors with respect to each other, and nothing in this AGREEMENT shall be construed
to place the PARTIES in the relationship of partners, joint ventures, fiduciaries or agents. Neither BUYER nor SELLER is granted any right or authority to assume nor to create an obligation or
responsibility, express or implied, on behalf of or in the name of the other or bind the other in any manner whatsoever. 

 12.3    Modification and Waiver  

        No waiver of any provision of this AGREEMENT shall be valid or binding unless in writing and executed by the PARTY against whom
enforcement is sought. No waiver by either PARTY of any breach, or the failure of either PARTY to enforce any of the terms and conditions of this AGREEMENT, shall affect, limit or waive that PARTY's
right to enforce and compel compliance with all terms and conditions of this AGREEMENT, or to terminate this AGREEMENT according to its terms. No modification or amendment of any provision of this
AGREEMENT shall be valid or binding unless (i) executed and delivered by both PARTIES hereto in writing subsequent to the date hereof, (ii) it specifically refers to this AGREEMENT, and
(iii) it specifically states that it is intended to, and shall take precedence over, this AGREEMENT. Any other modification, amendment or waiver of any provision of this AGREEMENT shall be null
and void. 

 12.4    Notice  

        Any notices required or permitted under this AGREEMENT shall be in writing, shall specifically refer to this AGREEMENT, and shall be
sent by hand, recognized national overnight courier, confirmed facsimile transmission, confirmed electronic mail, or registered or certified mail, postage prepaid, return receipt requested, to the
following addresses or facsimile numbers of the PARTIES: 

If
to SELLER:

A123 Systems, Inc.

321 Arsenal Street

Watertown, Massachusetts 02472

Attention: Eric Pyenson—VP, General Counsel

Tel: (617) 778-5700

Fax: (617) 778-5749 

15

 

with
a copy to:

John H. Chory, Esq

Wilmer Cutler Pickering Hale and Dorr LLP

Bay Colony Corporate Center

1100 Winter Street

Waltham, MA 02454

Tel: 781-966-2001 

If
to BUYER:

Rob Dapra

Duracell

14 Research Drive

Berkshire Corporate Park

Bethel CT 06801

Tel: 1 203 796 4362 

with
a copy to:

The Procter & Gamble Company

One Procter & Gamble Plaza

Cincinnati, Ohio 45202

Attention: Associate General Counsel, Director

Transactions Organization 

Governing
Law, Construction and Language 

        (a)    This
AGREEMENT and all disputes arising out of or related to this AGREEMENT, or the performance, enforcement, breach or termination hereof, and any remedies relating
thereto, shall be construed, governed, interpreted and applied in accordance with the laws of the State of New York, applicable to contracts made and performed entirely in such state, without regard
to any principle of conflict or choice of laws that would cause the application of the laws of any other jurisdiction, except that questions affecting the construction and effect of any patent will be
determined by the law of the country in which the patent will have been granted. 

        (b)    The
PARTIES understand the English language and are fully aware of all terms and conditions contained herein. If any translation of this AGREEMENT is made, the English
language version shall always continue to govern. 

        (c)    The
PARTIES agree that (i) the United Nations Convention on International Sale of Goods shall have no force or effect on transactions under or relating to this
AGREEMENT; (ii) no trade usage shall be used to explain or supplement this AGREEMENT even if either or both PARTIES were aware or
should have been aware of such trade usage; and (iii) this AGREEMENT prevails over any general terms and conditions of trade. 

 12.5    Force Majeure  

        Neither PARTY will be responsible for delays resulting from causes beyond the reasonable control of such PARTY, including without
limitation, explosion, flood, war, or riot, provided that the nonperforming PARTY uses commercially reasonable efforts to avoid or remove such causes of nonperformance and continues performance under
this AGREEMENT with reasonable dispatch whenever such causes are removed. 

 12.6    Amendment and Waiver  

        This AGREEMENT may be amended, supplemented, or otherwise modified only by means of a written instrument signed by both PARTIES. Any
waiver of any rights or failure to act in a specific 

16

 

instance
shall relate only to such instance and shall not be construed as an agreement to waive any rights or fail to act in any other instance, whether or not similar. 

 12.7    Severability  

        In the event that any provision of this AGREEMENT shall be held invalid or unenforceable for any reason, such invalidity or
unenforceability shall not affect any other provision of this AGREEMENT, and the PARTIES shall negotiate in good faith to modify the AGREEMENT to preserve (to the extent possible) their original
intent. If the PARTIES fail to reach a modified agreement within [**] after the relevant provision is held invalid or unenforceable, then the dispute shall be resolved in
accordance with the procedures set forth in the LICENSE AGREEMENT. While the dispute is pending resolution, this AGREEMENT shall be construed as if such provision were deleted by agreement of the
PARTIES. 

 12.8    Counterparts  

        This AGREEMENT may be executed in one or more counterparts, each of which when executed shall be deemed to be an original but all of
which taken together shall constitute one and the same agreement. Delivery of an executed counterpart of a signature page to this AGREEMENT by facsimile shall be as effective as delivery of a manually
executed counterpart of any such AGREEMENT. 

 12.9    Binding Effect  

        This AGREEMENT shall be binding upon and inure to the benefit of the PARTIES and their respective permitted successors and assigns. 

 12.10    Headings  

        All headings are for convenience only and shall not affect the meaning of any provision of this AGREEMENT. 

 12.11    Entire Agreement  

        This AGREEMENT, together with the Schedules attached hereto and the LICENSE AGREEMENT, constitutes the entire agreement between the
PARTIES with respect to its subject matter and supersedes all prior agreements or understandings between the PARTIES relating to its subject matter. For their convenience, the PARTIES may use, from
time to time, their standard purchase orders, site level execution agreements, sales releases, DELIVERY schedules, acknowledgments, invoices and other similar preprinted forms. In the event of a
conflict between this AGREEMENT and any of these documents that purport to govern the same matters set forth herein, this AGREEMENT shall prevail, except as otherwise set forth in the Section entitled
MODIFICATION AND WAIVER. 

 12.12    Construction Against Drafter  

        Each PARTY acknowledges that it has been advised to, and has had the opportunity to consult with its personal attorney prior to
entering into this AGREEMENT. No law or rule relating to the construction or interpretation of contracts against the drafter of any particular clause will be applied with respect to this AGREEMENT. 

[Signature Page Follows]

17

 

        IN
WITNESS WHEREOF, the PARTIES have caused this Purchase Agreement to be executed by their duly authorized representatives. 

							
	A123 SYSTEMS, INC.	 	THE GILLETTE COMPANY
	
 By:	
 	
/s/ MICHAEL RUBINO

 	
 	
By:	
 	
/s/ ERIK LAWSON  

 
	Name:	 	Michael Rubino	 	Name:	 	Erik Lawson
	Title:	 	CFO	 	Title:	 	Associate Director,
	 	 	 	 	 	 	Durables Spend Pool

18

  SCHEDULE A

PRODUCT SCHEDULE  

        [**] 

 SCHEDULE B

SPECIFICATIONS  

        Confidential Materials omitted and filed separately with the Securities and Exchange Commission. A total of 16 pages were omitted. 

        [**] 

 SCHEDULE C

ESTIMATED ANNUAL DEMAND  

        [**] 

QuickLinks

Exhibit 10.31

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00150-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00150-of-00352.parquet"}]]